UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 3, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to ________________
Commission file number 0-16255
JOHNSON WORLDWIDE ASSOCIATES, INC.
(Exact name of Registrant as specified in its charter)
Wisconsin 39-1536083
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1326 Willow Road, Sturtevant, Wisconsin 53177
(Address of principal executive offices)
(414) 884-1500
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that
the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90
days. Yes [ X ] No [ ]
As of May 1, 1998, 6,869,819 shares of Class A and 1,224,087 shares of
Class B common stock of the Registrant were outstanding.
Index Page No.
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Operations -
Three Months and Six Months Ended April 3,
1998 and March 28, 1997 1
Consolidated Balance Sheets - April 3, 1998,
October 3, 1997 and March 28, 1997 2
Consolidated Statements of Cash Flows -
Six Months Ended April 3, 1998 and March 28,
1997 4
Notes to Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 11
JOHNSON WORLDWIDE ASSOCIATES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Six Months Ended
April 3 March 28 April 3 March 28
(thousands, except per share data) 1998 1997 1998 1997
Net sales $ 97,938 $ 96,111 $ 149,779 $ 147,928
Cost of sales 58,210 58,978 90,857 92,666
-------- --------- --------- ---------
Gross profit 39,728 37,133 58,922 55,262
-------- --------- --------- ---------
Operating expenses:
Marketing and selling 19,394 19,023 32,887 33,303
Financial and administrative
management 6,587 5,891 12,424 11,544
Research and development 1,806 1,224 3,349 2,501
Profit sharing 339 741 354 844
Amortization of acquisition costs 943 563 1,855 1,166
Nonrecurring charges 36 - 102 -
-------- --------- --------- ---------
Total operating expenses 29,105 27,442 50,971 49,358
-------- --------- --------- ---------
Operating profit 10,623 9,691 7,951 5,904
Interest income (68) (98) (145) (219)
Interest expense 2,539 2,344 4,733 4,427
Other (income) expenses, net 142 (105) 72 (40)
-------- --------- --------- ---------
Income before income taxes 8,010 7,550 3,291 1,736
Income tax expense 3,271 3,222 1,337 1,274
-------- --------- --------- ---------
Net income $ 4,739 $ 4,328 $ 1,954 $ 462
======== ========= ========= =========
Basic earnings per common share $ 0.59 $ 0.53 $ 0.24 $ 0.06
======== ========= ========= =========
Diluted earnings per common share $ 0.58 $ 0.53 $ 0.24 $ 0.06
======== ========= ========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED BALANCE SHEETS
(unaudited)
(thousands, except share data)
April 3 October 3 March 28
1998 1997 1997
ASSETS
Current assets:
Cash and temporary cash investments $ 4,724 $ 7,130 $ 5,362
Accounts receivable, less allowance for
doubtful accounts of $2,536, $2,693, and
$2,003, respectively 85,451 51,168 83,254
Inventories 95,774 78,694 92,606
Deferred income taxes 7,755 7,976 9,596
Other current assets 8,446 7,781 7,570
Total current assets 202,150 152,749 198,388
Property, plant and equipment 33,857 31,360 28,774
Deferred income taxes 11,126 10,221 6,168
Intangible assets 86,330 82,127 48,482
Other assets 533 562 583
----------- ---------- ----------
Total assets $ 333,996 $ 277,019 $ 282,395
continued
April 3 October 3 March 28
1998 1997 1997
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt and current maturities of
long-term debt $ 80,917 $ 26,082 $ 58,160
Accounts payable 19,267 10,672 12,987
Accrued liabilities 27,022 29,355 28,652
---------- -------- ---------
Total current liabilities 127,206 66,109 99,799
Long-term debt, less current maturities 87,921 88,753 61,323
Other liabilities 4,740 4,426 3,765
---------- -------- ---------
Total liabilities 219,867 159,288 164,887
---------- -------- ---------
Shareholders' equity:
Preferred stock: none issued - - -
Common stock:
Class A shares issued:
April 3, 1998, 6,909,351;
October 3, 1997, 6,905,523;
March 28, 1997, 6,905,385 345 345 345
Class B shares issued (convertible into Class
A):
April 3, 1998, , 1,224,087;
October 3, 1997, 1,227,915;
March 28, 1997, 1,228,053 61 61 61
Capital in excess of par value 44,193 44,186 44,173
Retained earnings 81,809 79,882 78,307
Contingent compensation (65) (85) (131)
Cumulative translation adjustment (11,599) (6,356) (4,846)
Treasury stock:
April 3, 1998, 39,532 Class A shares; (615) (302) (401)
October 3, 1997, 23,600 Class A shares; (615) (302) (401)
March 28, 1997, 23,400 Class A shares (615) (302) (401)
--------- --------- ---------
Total shareholders' equity 114,129 117,731 117,508
--------- --------- ---------
Total liabilities and shareholders' equity $ 333,996 $ 277,019 $ 282,395
========= ========= =========
The accompanying notes are an integral part of the consolidated financial
statements.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
April 3 March 28
1998 1997
(thousands)
CASH USED FOR OPERATIONS
Net income $ 1,954 $ 462
Noncash items:
Depreciation and amortization 6,882 5,397
Deferred income taxes 210 (1,145)
Change in assets and liabilities, net of
effect of businesses acquired or sold:
Accounts receivable, net (35,390) (36,963)
Inventories (15,863) (4,549)
Accounts payable and accrued liabilities 5,115 3,992
Other, net (1,472) (176)
----------- ---------
(38,564) (32,982)
----------- ---------
CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES
Net assets of businesses acquired, net (12,418) -
of cash
Proceeds from sale of business, net of - 13,937
cash
Net additions to property, plant and (5,613) (4,521)
equipment
---------- ---------
(18,031) 9,416
----------- ---------
CASH PROVIDED BY FINANCING ACTIVITIES
Issuance of senior notes 25,000 -
Net change in short-term debt 29,869 17,639
Common stock transactions (333) (474)
---------- ---------
54,536 17,165
Effect of foreign currency fluctuations (347) (934)
on cash
---------- ---------
Decrease in cash and temporary cash (2,406) (7,335)
investments
CASH AND TEMPORARY CASH INVESTMENTS
Beginning of period 7,130 12,697
---------- ---------
End of period $ 4,724 $ 5,362
========== =========
The accompanying notes are an integral part of the consolidated financial
statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1 Basis of Presentation
The consolidated financial statements included herein are unaudited.
In the opinion of management, these statements contain all
adjustments (consisting of only normal recurring items) necessary to
present fairly the financial position of Johnson Worldwide
Associates, Inc. and subsidiaries (the Company) as of April 3, 1998
and the results of operations and cash flows for the three months and
six months ended April 3, 1998. These consolidated financial
statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's 1997
Annual Report.
Because of seasonal and other factors, the results of operations for
the three months and six months ended April 3, 1998 are not
necessarily indicative of the results to be expected for the full
year.
All amounts, other than share and per share amounts, are stated in
thousands.
2 Income Taxes
The provision for income taxes includes deferred taxes and is based
upon estimated annual effective tax rates in the tax jurisdictions in
which the Company operates.
3 Inventories
Inventories at the end of the respective periods consist of the
following:
April 3 October 3 March 28
1998 1997 1997
Raw materials $ 34,597 $ 27,032 $ 32,425
Work in process 6,818 5,036 6,177
Finished goods 61,765 56,846 64,176
--------- ---------- ----------
103,180 88,914 102,778
Less reserves 7,406 10,220 10,172
--------- ---------- ----------
$ 95,774 $ 78,694 $ 92,606
========= ========== ==========
4 Indebtedness
In October 1997, the Company issued unsecured senior notes totaling
$25,000 with an interest rate of 7.15%. The funding commitment for the
senior notes was received in July 1997. The senior notes have annual
principal payments of $2,000 to $7,000 beginning October 2001 with a
final payment due October 2007. Simultaneous with the commitment of
the senior notes, the Company executed a foreign currency swap,
denominating in Swiss francs all principal and interest payments
required under the senior notes. The fixed, effective interest rate to
be paid on the senior notes as a result of the currency swap is 4.32%.
Proceeds from issuance of the senior notes were used to reduce
outstanding indebtedness under the Company's primary revolving credit
facility. Outstanding short-term debt totaling $25,000 at October 3,
1997 was classified as long-term in anticipation of refinancing with
the proceeds of the senior notes.
5 Earnings Per Share
In 1998, the Company adopted FASB Statement 128, Earnings Per Share,
which replaced the previously reported earnings per share with basic
and diluted earnings per share. Basic earnings per share excludes any
dilutive effects of options, warrants and convertible securities.
Diluted earnings per share is similar to the previously reported fully
diluted earnings per share. All per share amounts for all periods have
been restated to conform to the requirements of Statement 128.
The following table sets forth the computation of basic and diluted
earnings per share:
Three Months Ended Six Months Ended
April 3 March 28 April 3 March 28
1998 1997 1998 1997
Net income for basic and diluted earnings per share $4,739 $4,328 $1,954 $462
========= ========= ========= =========
Weighted average shares outstanding 8,103,881 8,112,117 8,106,924 8,116,294
Less nonvested restricted stock (6,559) (11,501) (6,854) (9,917)
--------- --------- --------- ---------
Basic shares 8,097,322 8,100,616 8,100,070 8,106,377
Dilutive stock options and restricted stock 30,199 14,561 31,329 12,198
--------- --------- --------- ---------
Diluted shares 8,127,521 8,115,177 8,131,399 8,118,575
========= ========= ========= =========
Basic earnings per common share $0.59 $0.53 $0.24 $0.06
========= ========= ========= =========
Diluted earnings per common share $0.58 $0.53 $0.24 $0.06
========= ========= ========= =========
6 Stock Ownership Plans
A summary of stock option activity related to the Company's plans is as
follows:
Weighted
Shares Average
Exercise
Price
Outstanding at October 3, 1997 686,521 $18.32
Granted 247,000 17.01
Exercised (10,243) 13.96
Cancelled (302,517) 19.17
---------- ---------
Outstanding at April 3, 1998 620,761 $17.45
========== =========
7 Acquisitions
In January 1998, the Company completed the acquisition of the common
stock of Leisure Life Limited, a privately held manufacturer and
marketer of small recreational boats. The purchase price, including
direct expenses, for the acquisition was approximately $10,391, of
which approximately $7,400 was recorded as intangible assets and is
being amortized over 25 years.
In October 1997, the Company completed the acquisition of certain
assets of Soniform, Inc., a manufacturer of diving buoyancy
compensators, and the common stock of Plastiques L.P.A. Limitee, a
privately held Canadian manufacturer of kayaks. The purchase prices
for the acquisitions totaled approximately $3,256.
8 Reclassification
Certain amounts as previously reported have been reclassified to
conform with the current period presentation.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
The following discussion includes comments and analysis relating to the
Company's results of operations and financial condition for the three
months and six months ended April 3, 1998 and March 28, 1997. This
discussion should be read in conjunction with the consolidated financial
statements and related notes that immediately precede this section, as
well as the Company's 1997 Annual Report.
Foreign Operations
The Company has significant foreign operations, for which the functional
currencies are denominated primarily in Swiss and French francs, German
marks, Italian lire, Japanese yen and Canadian dollars. As the values of
the currencies of the foreign countries in which the Company has
operations increase or decrease relative to the U.S. dollar, the sales,
expenses, profits, assets and liabilities of the Company's foreign
operations, as reported in the Company's consolidated financial
statements, increase or decrease, accordingly. The Company mitigates a
portion of the fluctuations in certain foreign currencies through the
purchase of foreign currency swaps, forward contracts and options to hedge
known commitments, primarily for purchases of inventory and other assets
denominated in foreign currencies. The appreciation of the U.S. dollar
significantly reduced the cumulative translation component of
shareholders' equity during the six months ended April 3, 1998 and the
corresponding period in the prior year.
Results of Operations
Net sales for the three months ended April 3, 1998 totaled $97.9 million,
compared to $96.1 million in the three months ended March 28, 1997. Net
sales for the six months ended April 3, 1998 increased $1.9 million to
$149.8 million. Sales of businesses acquired in 1998 and 1997 and strong
European outdoor equipment sales offset the absence of the Plastimo
business, which was sold in January 1997, and weakness in the fishing
business in North America and the diving business in Japan.
Relative to the U.S. dollar, the average values of most currencies of the
countries in which the Company has operations were lower for the three
months and six months ended April 3, 1998 as compared to the corresponding
period of the prior year. Excluding the impact of foreign currencies and
the Plastimo business, net sales increased 8% and 11%, respectively, for
the three months and six months ended April 3, 1998.
Gross profit as a percentage of sales increased to 40.6% for the three
months ended April 3, 1998 compared to 38.6% in the corresponding period
in the prior year. Gross profit for the six months ended April 3, 1998
increased to 39.3% from 37.4% in the prior year. Acquired businesses,
which have higher gross profit margins than historical Company levels, and
the watercraft and diving businesses contributed to the increase.
The Company recognized an operating profit of $10.6 million for the three
months ended April 3, 1998, compared to an operating profit of $9.7
million for the corresponding period of the prior year. For the six months
ended April 3, 1998, operating profit increased to $8.0 million, from $5.9
million in the prior year. The increases in sales and gross profit led to
the increased operating profit, more than offsetting modest increases in
operating expenses in the current year.
Interest expense totaled $4.7 million for the six months ended April 3,
1998 compared to $4.4 million for the corresponding period of the prior
year. Increased debt levels due to acquisitions consummated in 1998 and
1997, offset by improved management of working capital and a favorable
interest rate environment, accounted for the change. The Company's
effective tax rate improved due to a rate reduction in Italy and an
increase in profits in Switzerland, which has lower overall tax rates.
The Company recognized net income of $4.7 million in the three months
ended April 3, 1998 compared to net income of $4.3 million in the
corresponding period of the prior year. Diluted earnings per share
totaled $0.58 for the three months ended April 3, 1998 compared to $0.53
in the prior year. Year to date diluted earnings per share increased to
$0.24 from $0.06 in the prior year.
Financial Condition
The following discusses changes in the Company's liquidity and capital
resources.
Operations
Cash flows used for operations totaled $38.6 million for the six months
ended April 3, 1998 and $33.0 million for the corresponding period of the
prior year.
Accounts receivable seasonally increased $35.4 million for the six months
ended April 3, 1998 and $37.0 million for the corresponding period of the
prior year. Seasonal growth in inventories of $15.9 million for the six
months ended April 3, 1998 and $4.5 million for the corresponding period
of the prior year also accounted for a portion of the net usage of funds.
Inventory turns increased for the period ended April 3, 1998 compared to
the corresponding period of the prior year.
Accounts payable and accrued liabilities increased $5.1 million for the
six months ended April 3, 1998 and $4.0 million for the corresponding
period of the prior year, decreasing the net outflow of cash from
operations.
Depreciation and amortization charges were $6.9 million for the six months
ended April 3, 1998 and $5.4 million for the corresponding period of the
prior year. The increase was due primarily to increased amortization of
intangible assets from businesses acquired in 1998 and 1997.
Investing Activities
Expenditures for property, plant and equipment were $5.6 million for the
six months ended April 3, 1998 and $4.5 million for the corresponding
period of the prior year. The Company's recurring investments are made
primarily for tooling for new products and enhancements. In 1998,
capitalized expenditures are anticipated to total approximately $9-10
million. These expenditures are expected to be funded by working capital
or existing credit facilities.
The Company completed the acquisition of three businesses in the six month
period ended April 3, 1998, resulting in a use of cash of $12.4 million.
The sale of the Plastimo business generated $13.9 million of cash in the
prior year.
Financing Activities
Cash flows from financing activities totaled $54.5 million for the three
months ended April 3, 1998 and $17.2 million for the corresponding period
of the prior year. In October 1997, the Company consummated a private
placement of long-term debt totaling $25 million. Payments on long-term
debt required to be made in 1998 total $8 million.
Other Factors
The Company has not been significantly impacted by inflationary pressures
over the last several years. However, from time to time the Company faces
changes in the prices of commodities. Price increases and, in certain
situations, price decreases are implemented for individual products, when
appropriate. The Company anticipates that changing costs of basic raw
materials may impact future operating costs and, accordingly, the prices
of its products. Fluctuations in foreign currencies may also impact the
cost of the Company's products. The Company is involved in continuing
programs to mitigate the impact of cost increases through changes in
product design, identification of sourcing and manufacturing efficiencies
and foreign currency hedges.
Forward-Looking Statements
Certain matters discussed in this Form 10-Q are "forward-looking
statements," intended to qualify for the safe harbors from liability
established by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements can generally be identified as such
because the context of the statement includes phrases such as the Company
"expects", "believes" or other words of similar import. Similarly,
statements that describe the Company's future plans, objectives or goals
are also forward-looking statements. Such forward-looking statements are
subject to certain risks and uncertainties which could cause actual
results or outcomes to differ materially from those currently anticipated.
Factors that could affect actual results or outcomes include adverse
weather conditions, changes in consumer spending patterns, the success of
the Company's EVA and JWAction programs, actions of companies that compete
with JWA and the Company's success in managing inventory. Shareholders,
potential investors and other readers are urged to consider these factors
in evaluating the forward-looking statements and are cautioned not to
place undue reliance on such forward-looking statements. The forward-
looking statements included herein are only made as of the date of this
Form 10-Q and the Company undertakes no obligations to publicly update
such forward-looking statements to reflect subsequent events or
circumstances.
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting on January 28, 1998, the
shareholders voted on two shareholder proposals and to
elect the following individuals as Directors for terms
that expire at the next annual meeting:
Votes Votes
Cast Cast Votes Broker
For Against Withheld Abstentions Non-Votes
Class A Directors:
Gregory E. Lawton 5,684,388 0 548,365 0 0
Glenn N. Rupp 5,684,388 0 548,365 0 0
Class B Directors:
Samuel C. Johnson 1,216,299 0 0 0 0
Helen P. Johnson-Leipold 1,216,299 0 0 0 0
Thomas F. Pyle, Jr. 1,216,299 0 0 0 0
Ronald C. Whitaker 1,216,299 0 0 0 0
Proposal 1 regarding sale or
merger of Company 1,756,873 16,088,431 0 16,455 533,984
Proposal 2 regarding director
compensation 2,328,631 15,512,323 0 20,805 533,984
Votes cast for or against Proposals 1 and 2 reflect that holders of Class B shares are entitled
to 10 votes per share for matters other than the election of Directors.
Item 6.Exhibits and Reports on Form 8-K
(a) The following documents are filed as part of this Form
10-Q
Exhibit 4.16: Amended and Restated Credit Agreement
dated as of April 3, 1998
Exhibit 27:Financial Data Schedule
(b) There were no reports on Form 8-K filed for the three
months ended April 3, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JOHNSON WORLDWIDE ASSOCIATES, INC.
Date: May 16, 1998
/s/ Carl G. Schmidt
Carl G. Schmidt
Senior Vice President and Chief
Financial Officer, Secretary and
Treasurer
(Principal Financial and Accounting
Officer)
EXHIBIT INDEX
Page
Exhibit Description Number
4.16 Amended and Restated Credit Agreement -
dated as of April 3, 1998
27. Financial Data Schedule -
TABLE OF CONTENTS
I. DEFINITIONS 1
SECTION 1.01. Definitions. 1
SECTION 1.02. Accounting Terms 19
SECTION 1.03. Directly or Indirectly 20
II. THE LOANS 20
SECTION 2.01. Revolving Loans and Eurocurrency Loans 20
SECTION 2.02. (Intentionally omitted) 23
SECTION 2.03. Revolving Loan and Eurocurrency Notes 23
SECTION 2.04. Absolute Rate Loans 24
SECTION 2.05. Continuation of Loans under the Current Agreement 27
SECTION 2.06. Interest on Loans 27
SECTION 2.07. Default Interest; Alternate Rate of Interest 29
SECTION 2.08. Refinancing of Revolving Loans 30
SECTION 2.09. Refinancing of Eurocurrency Loans 31
SECTION 2.10. (Intentionally omitted) 32
SECTION 2.11. Voluntary and Mandatory Prepayment of Loans;
Indemnification 32
SECTION 2.12. Pro Rata Treatment; Funds; Manner of Payment and
Prepayment; Net Payments 34
SECTION 2.13. Other Events 37
SECTION 2.14. Change in Legality 40
SECTION 2.15. Fees, Reduction of Commitment 41
SECTION 2.16. Increase of Commitments 42
SECTION 2.17. Removal of Banks 43
SECTION 2.18. Letters of Credit 43
III. REPRESENTATIONS AND WARRANTIES 49
IV. CONDITIONS OF LENDING 53
SECTION 4.01. All Borrowings 53
SECTION 4.02. Initial Borrowing 54
SECTION 4.03. Initial Borrowing by Eligible Subsidiaries 55
SECTION 4.04. Absolute Rate Loans 55
V. AFFIRMATIVE COVENANTS 55
SECTION 5.01. Financial Statements 55
SECTION 5.02. Litigation Notice 57
SECTION 5.03. ERISA 57
SECTION 5.04. Corporate Existence 59
SECTION 5.05. Insurance 59
SECTION 5.06. Obligations and Taxes 59
SECTION 5.07. Notice of Defaults 60
SECTION 5.08. Use of Proceeds 60
SECTION 5.09. Environmental Notices and Inspection 60
SECTION 5.10. Compliance with Laws 61
SECTION 5.11. Inspection 61
SECTION 5.12. Conduct of Business 61
VI. NEGATIVE COVENANTS 61
SECTION 6.01. Limitations on Indebtedness 61
SECTION 6.02. Mergers, Consolidations, Sales of Assets, Etc. 62
SECTION 6.03. Fixed Charges Coverage Ratio 66
SECTION 6.04. Distributions 66
SECTION 6.05. Investments 67
SECTION 6.06. Transactions with Affiliates 69
SECTION 6.07. ERISA 69
SECTION 6.08. Environmental Compliance 69
SECTION 6.09. Grants of Security Interests 70
VII. EVENTS OF DEFAULT 70
VIII.THE AGENT 72
SECTION 8.01. Appointment and Authority of Agent 72
SECTION 8.02. Agent May Rely on Documents 73
SECTION 8.03. No Amendment to Agent's Duties Without Consent 73
SECTION 8.04. Responsibilities of Agent 73
SECTION 8.05. Indemnification of Agent 74
SECTION 8.06. Agent Shall Have Rights of a Bank 74
SECTION 8.07. Credit Decision 74
SECTION 8.08. Successor Agent 74
IX. AMENDMENTS; WAIVERS; AND REMEDIES 75
X. MISCELLANEOUS 75
SECTION 10.01. No Discharge 75
SECTION 10.02. Sharing of Setoffs 76
SECTION 10.03. Severability 76
SECTION 10.04. Successors and Assigns 76
SECTION 10.05. Governing Law. 77
SECTION 10.06. Currency Indemnity 78
SECTION 10.07. Headings 78
SECTION 10.08. Notices 78
SECTION 10.09. Survival of Agreement 79
SECTION 10.10. Expenses of Banks 79
SECTION 10.11. Foreign Bank Certifications 79
XI. GUARANTY 81
XII. COUNTERPARTS. 82
Exhibits
EXHIBIT A -- Form of Revolving Note
EXHIBIT B -- Form of Eurocurrency Note
EXHIBIT C -- Form of Competitive Bid Note
EXHIBIT D -- Form of Competitive Bid Quote Request
EXHIBIT E -- Form of Competitive Bid Quote
EXHIBIT F -- Form of Election to Participate
EXHIBIT G -- Form of Election to Terminate
Schedules
Schedule 1 -- Litigation (Article 3, paragraph g)
Schedule 2 -- ERISA (Article 3, paragraph i)
Schedule 3 -- Environmental Matters (Article 3,
paragraph k)
Schedule 6.05 -- Investments (Sections 6.05(d), (e), &
(j))
EXECUTION COPY
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of
April 3, 1998
among
JOHNSON WORLDWIDE ASSOCIATES, INC.
THE BANKS LISTED HEREIN
THE FIRST NATIONAL BANK OF CHICAGO,
AS AGENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of
April 3, 1998 (as the same may be amended, supplemented or otherwise
modified from time to time hereafter, the "Agreement"), by and among
JOHNSON WORLDWIDE ASSOCIATES, INC., a Wisconsin corporation (the
"Company") certain consolidated subsidiaries of the Company which may from
time to time become parties hereto, THE FINANCIAL INSTITUTIONS WHICH ARE
SIGNATORIES HERETO (individually, a "Bank" and collectively, the "Banks")
and THE FIRST NATIONAL BANK OF CHICAGO, a national banking association,
individually as one of the Banks and as agent for the Banks (in such
capacity, the "Agent").
Whereas, the Company, certain consolidated subsidiaries of the
Company which may from time to time become parties hereto, the Banks and
the Agent are parties to that certain Revolving Credit Agreement, dated as
of November 29, 1995, as amended by that certain Amendment No. 1, dated as
of July 1, 1996, that certain Waiver and Amendment No. 2, dated as of
November 6, 1996, that certain Amendment No. 3, dated as of July 9, 1997,
and that certain Amendment No. 4, dated as of September 30, 1997 (taken
together, the "Current Agreement"); and
Whereas, the Company desires to amend and restate the Current
Agreement in certain respects;
So, therefore, the Company, certain consolidated subsidiaries of the
Company which may from time to time become parties hereto, the Banks, and
the Agent have agreed to amend and restate the Current Agreement on the
terms and conditions set forth herein:
I. DEFINITIONS
SECTION 1.01. Definitions. As used herein, the following words
and terms, when capitalized, shall have the following meanings (such
meanings to be equally applicable to both the singular and the plural
forms of the terms defined):
"Absolute Rate" shall mean, with respect to a Loan made by a given
Bank for the relevant Interest Period, the rate of interest per annum
(rounded to the nearest 1/100 of 1%) offered by such Bank and accepted by
the Company pursuant to Section 2.04(c).
"Absolute Rate Auction" shall mean a solicitation of Competitive Bid
Quotes setting forth Absolute Rates pursuant to Section 2.04.
"Absolute Rate Loan" shall mean a Loan which bears interest at an
Absolute Rate.
"Acquisitions" shall mean any transaction or series of transactions
by which the Company or any Subsidiary of the Company, by merger or
otherwise, directly or indirectly: (a) acquires all or substantially all
of the assets of any Person, or a portion of the assets of any Person, or
the technological rights of any Person, which constitutes all or
substantially all, or, in the case of technological rights, permits the
operation of, a product line, division or other operating segment of such
Person; (b) acquires control of the majority of the voting securities of a
Person; (c) acquires a controlling equity interest in any Person; (d)
acquires an option or right to consummate any of the foregoing; or (e)
acquires any additional securities or equity interests in a Person in
which the Company or any Subsidiary has a controlling equity interest or
control of the majority of the voting securities.
"Adjusted CD Rate" shall mean, with respect to any Adjusted CD Rate
Loan for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next higher 1/100 of 1%) equal to the sum of (a) the
Adjusted CD Rate Margin plus (b) a rate per annum equal to the product of
(i) the Fixed Certificate of Deposit Rate in effect for such Interest
Period and (ii) Statutory Reserves, plus (c) the Assessment Rate. For
purposes hereof, the term "Fixed Certificate of Deposit Rate" shall mean
the arithmetic average (rounded upwards, if necessary, to the next higher
1/100 of 1%) of the prevailing rates per annum bid on or about 10:00 am.,
Chicago time, to the Agent on the first Business Day of the Interest
Period for the Adjusted CD Rate Loan by three Chicago negotiable
certificate of deposit dealers of recognized national standing and
selected by the Agent for the purchase at face value of negotiable
certificates of deposit of major United States money center banks in an
amount approximately equal to the principal amount of First Chicago's
portion of the Adjusted CD Rate Loan and with a maturity comparable to
such Interest Period.
"Adjusted CD Rate Loan" shall mean any Loan for which interest is
determined, in accordance with the provisions hereof, at the Adjusted CD
Rate.
"Adjusted CD Rate Margin" is defined in Section 2.06.
"Affiliate" shall mean any Person (other than a Subsidiary) (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, the Company, (b) which
beneficially owns or holds 5% or more of any class of the Voting Stock of
the Company or (c) 5% or more of the Voting Stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest) of
which is beneficially owned or held by the Company or a Subsidiary. The
term "control" means possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through the ownership of Voting Stock, by contract or otherwise.
"Agent" shall have the meaning ascribed to such term in the initial
paragraph of this Agreement and any successor Agent appointed pursuant to
Section 8.08.
"Aggregate Commitment" shall mean $90,000,000, as such amount may be
increased or reduced from time to time pursuant to Section 2.15 or 2.16 or
other provisions hereof.
"Aggregate Eurocurrency Commitment" shall mean $12,000,000, as such
amount may be increased or reduced from time to time pursuant to Section
2.01(g), 2.15, 2.16 or 2.17 or other provisions hereof.
"Aggregate Revolving Commitment" shall mean $78,000,000, as such
amount may be increased or reduced from time to time pursuant to Section
2.01(g), 2.15, 2.16 or 2.17 or other provisions hereof.
"Agreement" shall have the meaning ascribed to such term in the
initial paragraph of this Agreement.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Corporate Base Rate in effect on such day and (b) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For
purposes hereof, "Corporate Base Rate" shall mean the rate of interest per
annum announced from time to time by First Chicago as its corporate base
rate in effect at its principal office in Chicago; each change in the
Corporate Base Rate shall be effective on the date such change is
announced by First Chicago. "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published on the next succeeding Business Day by
the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for the
day of such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it. If for any reason the
Agent shall have determined (which determination shall be conclusive
absent manifest error) that it is unable to ascertain the Federal Funds
Effective Rate for any reason, including the inability or failure of the
Agent to obtain sufficient quotations in accordance with the terms hereof,
the Alternate Base Rate shall be determined without regard to clause (b)
of the first sentence of this definition, as appropriate, until the
circumstances giving rise to such inability no longer exist. Any change
in the Alternate Base Rate due to a change in the Corporate Base Rate or
the Federal Funds Effective Rate shall be effective on the effective date
of such change in the Corporate Base Rate or the Federal Funds Effective
Rate, respectively.
"Alternate Base Rate Loan" shall mean any Loan for which interest is
determined, in accordance with the provisions hereof, at the Alternate
Base Rate.
"Alternative Currency" shall mean Canadian dollars, French francs,
German marks, Japanese yen, pounds sterling, Australian dollars and any
other currency (other than ECU's) which is freely transferable and
convertible into Dollars, as and if available, in which deposits are
customarily offered to banks in the London interbank market, which the
Borrower requests the Agent to include as an Alternative Currency
hereunder and which is acceptable to each Bank; provided that the Agent
shall promptly notify each Bank of each such request and each Bank shall
be deemed to have agreed to each such request if its objection thereto has
not been received by the Agent within five Business Days from the date of
such notification by the Agent to such Bank.
"Applicable Percentage" shall mean, with respect to each Bank at any
date of determination thereof, a fraction (expressed as a percentage), the
numerator of which is the sum of such Bank's Revolving Loan Commitment
and Eurocurrency Commitment, in each case as at such date, and the
denominator of which is the Aggregate Commitment as at such date, as such
percentage may be modified from time to time pursuant to the terms hereof.
"Applicable Rate" shall mean at any time, for any Loan, the Alternate
Base Rate, the Adjusted CD Rate, the Eurocurrency Rate or LIBOR at such
time, as determined in accordance with Section 2.06 hereof.
"Assessment Rate" shall mean for any date the annual rate (rounded
upwards, if necessary, to the next higher 1/100 of 1%) most recently
estimated by First Chicago as the then current net annual assessment rate
that will be employed in determining amounts payable by First Chicago to
the Federal Deposit Insurance Corporation (or any successor) for insurance
by such Corporation (or such successor) of time deposits made in Dollars
at First Chicago's domestic offices.
"Average Outstanding Balance of Consolidated Current Debt" shall
mean the average of the Current Debt (excluding any portion of Current
Debt refinanced with Funded Debt) outstanding on each of the Company's
July fiscal month-end, August 15, August fiscal month-end, September 15,
and the Company's September fiscal month-end for each Compliance Period.
"Bank" and "Banks" shall have the meanings ascribed to such terms in
the initial paragraph of this Agreement and their respective successors
and assigns.
"Bankruptcy Code" shall mean Title 11 of the United States Code, as
the same may be amended from time to time, and any successor statute
thereto.
"Benefit Plan" shall mean a defined benefit plan as defined in
Section 3(35) of ERISA (other than a Multiemployer Plan) in respect of
which the Company or any ERISA Affiliate is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of
ERISA.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrowing" shall mean a borrowing consisting of one or more Loans
from the Banks.
"Borrowing Date" shall mean, with respect to any Loan, the date on
which such Loan is disbursed to the Company.
"Business Day" shall mean a day on which the Banks are each open for
business at their respective Domestic Offices; provided that when the term
"Business Day" is used with respect to any LIBOR Loan, it shall mean a day
on which the Banks are each also open for business at their respective
Eurodollar Offices and on which Dollar transactions are carried on in the
applicable interbank market and further provided that when the term
"Business Day" is used with respect to any Eurocurrency Loan, it shall
mean a day on which commercial banks are open for domestic and
international business (including dealings in deposits in the Alternative
Currency constituting such Eurocurrency Loan) in both London and the place
where such funds are paid or made available.
"Capitalized Lease" shall mean any lease the obligation for Rentals
with respect to which is required to be capitalized on a balance sheet of
the lessee in accordance with GAAP.
"Capitalized Rentals" of any Person shall mean as of the date of any
determination the amount at which the aggregate Rentals due and to become
due under all Capitalized Leases under which such Person is a lessee would
be reflected as a liability on a consolidated balance sheet of such Person
and its subsidiaries prepared in accordance with GAAP.
"Commitment Fee" shall have the meaning ascribed to such term in
Section 2.15(a) hereof.
"Commitments" shall mean the Eurocurrency Commitments and the
Revolving Loan Commitments.
"Company" shall have the meaning ascribed to such term in the
initial paragraph of this Agreement.
"Competitive Bid Borrowing Notice" is defined in Section 2.04(c).
"Competitive Bid Note" shall mean a promissory note in substantially
the form of Exhibit C hereto, with appropriate insertions, duly executed
and delivered to the Agent by the Company for the account of a Bank and
payable to the order of such Bank, including any amendment, modification,
renewal or replacement of such promissory note.
"Competitive Bid Quote" shall mean a Competitive Bid Quote delivered
by a Bank to the Company in accordance with Section 2.04(b).
"Competitive Bid Request" shall mean a Competitive Bid Quote Request
delivered by the Company to any one or more of the Banks in accordance
with Section 2.04(a).
"Compliance Period" shall mean the period beginning on the date of
the Company's July fiscal month-end and ending on the date of the
Company's September fiscal month-end in each calendar year.
"Consolidated Current Debt" shall mean, without duplication, Current
Debt of the Company and its Subsidiaries determined on a consolidated
basis eliminating intercompany items.
"Consolidated Funded Debt" shall mean, without duplication, Funded
Debt of the Company and its Subsidiaries determined on a consolidated
basis eliminating intercompany items.
"Consolidated Net Income" for any period shall mean net income of the
Company and its Subsidiaries from continuing operations, determined on a
consolidated basis in accordance with GAAP consistently applied but
excluding net earnings and losses of any Person (other than a Subsidiary)
with which the Company or a Subsidiary shall have consolidated or which
shall have merged or liquidated into or with the Company or a Subsidiary
prior to the date of such consolidation, merger or liquidation.
"Consolidated Net Worth" shall mean as of the date of any
determination thereof the amount of the par or stated value of all
outstanding capital stock, capital surplus and retained earnings of the
Company and its Subsidiaries, net of all cumulative translation
adjustments and contingent compensation adjustments determined on a
consolidated basis in accordance with GAAP.
"Consolidated Tangible Assets" shall mean as of the date of any
determination thereof the total amount of all Tangible Assets of the
Company and its Subsidiaries on a consolidated basis after deducting
therefrom all Investments incurred pursuant to and within the limitations
of Section 6.05(j) hereof.
"Consolidated Tangible Net Worth" shall mean as of the date of any
determination thereof Consolidated Net Worth less (a) all assets of the
Company and its Subsidiaries that are properly classified as "intangible
assets" and (b) all Investments incurred pursuant to and within the
limitations of Section 6.05(j) hereof, all determined in accordance with
GAAP.
"Consolidated Tangible Net Worth Available for Investments" shall
mean as of the date of any determination thereof the sum of (a)
Consolidated Tangible Net Worth and (b) all Investments incurred pursuant
to and within the limitations of Section 6.05(j) hereof.
"Consolidated Total Assets" of the Company and its Subsidiaries shall
mean as of the date of any termination thereof, the total assets of the
Company and its Subsidiaries as of such date determined on a consolidated
basis in accordance with GAAP.
"Consolidated Total Capitalization" shall mean as of the date of any
determination thereof the sum of (a) Consolidated Net Worth and (b)
Consolidated Funded Debt.
"Current Debt" shall mean as of the date of any determination thereof
(a) all Indebtedness for borrowed money or which has been incurred in
connection with the acquisition of property or assets other than Funded
Debt, provided that any portion of such obligations incurred in connection
with the acquisition of property or assets specifically including, without
limitation, obligations which have been incurred by such Person in
connection with any sale, transfer or issuance of stock pursuant to and in
compliance with Section 6.02(c)(5) and which are at the date of any
determination of Current Debt contingent as to amount or as to payment
shall not be treated as Current Debt on such date, (b) Guaranties of
Current Debt of others, and (c) all obligations of such Person with
respect to receivables sold or otherwise discounted with recourse which
would not constitute Funded Debt pursuant to the terms of the definition
thereof.
"Debt/EBITDA Ratio" is defined in Section 2.06(b) hereof.
"Default" shall mean a condition or event which, with the giving of
notice or lapse of time or both, would constitute an Event of Default.
"Dollar Amount" shall mean in relation to any Borrowing of Loans
denominated in Dollars, the amount thereof, and in relation to any
Borrowing of Loans denominated in an Alternative Currency, the equivalent
in Dollars of such amount of Alternative Currency, calculated on the basis
of the arithmetical mean of the buy and sell spot rates of exchange of the
Agent for such Alternative Currency quoted to the Company or the
applicable Eligible Subsidiary as of 11:00 a.m. (London time) three
Business Days before the date of such Borrowing. Dollar Amount shall mean
in relation to any Letter of Credit Obligation, the equivalent in Dollars
of any such Letter of Credit Obligation denominated in an Alternative
Currency computed as prescribed in Section 2.18(d)(i), or, if such methods
are for any reason inapplicable, in the manner deemed most appropriate and
customary by the Agent.
"Dollar" or "$" shall mean the currency of the United States of
America.
"DOL" shall mean the United States Department of Labor and any
successor department or agency.
"Domestic Office" shall mean for each Bank or the Agent, the Domestic
Office set forth for such Bank or the Agent on the signature pages hereof,
unless such Bank or the Agent shall designate a different Domestic Office
or Domestic Offices by notice in writing to the Agent and the Company;
provided that a Bank may designate different Domestic Offices for its
Alternate Base Rate Loans on the one hand and its Adjusted CD Rate Loans
on the other hand, in which case all references herein to the Domestic
Office of such Bank shall be deemed to refer to either or both of such
offices as the context may require.
"Domestic Subsidiary" shall mean any Subsidiary (a) which is
organized under the laws of the United States or any state thereof and (b)
which conducts substantially all of its business and has substantially all
of its assets within the United States.
"EBITDA" means, for any period, the sum of the amounts for each such
period, without duplication, of (i) Consolidated Net Income plus (ii)
Interest Charges, plus (iii) charges against income for foreign, federal,
state and local taxes to the extent deducted in computing Consolidated Net
Income, plus (iv) depreciation expense to the extent deducted in computing
Consolidated Net Income, plus (v) amortization expense, including, without
limitation, amortization of good will and other intangible assets to the
extent deducted in computing Consolidated Net Income, plus (vi)
extraordinary charges to the extent deducted in computing Consolidated Net
Income; minus (vii) extraordinary gains to the extent included in
computing Consolidated Net Income.
"Effective Date" shall mean the date on which this Agreement shall
become effective pursuant to the terms and conditions of Section 4.02
hereof.
"Eighty Percent-Owned Subsidiary" shall mean a Subsidiary of which
80% (by number of votes) of the Voting Stock shall be beneficially owned,
directly or indirectly, by the Company.
"Election to Participate" shall mean an Election to Participate by an
Eligible Subsidiary, substantially in the form of Exhibit F hereto.
"Election to Terminate" shall mean an Election to Terminate by an
Eligible Subsidiary, substantially in the form of Exhibit G hereto.
"Eligible Subsidiary" shall mean any Subsidiary of the Company which
is organized and doing business outside of the United States of America
and as to which an Election to Participate shall have been delivered to
the Agent and as to which an Election to Terminate shall not have been
delivered to the Agent. Each such Election to Participate and Election to
Terminate shall have been duly executed on behalf of such Eligible
Subsidiary and the Company in such number of copies as the Agent may
request. The delivery of an Election to Terminate shall not affect any
obligation of an Eligible Subsidiary theretofore incurred. The Agent
shall promptly give written notice to the Banks of the receipt of any
Election to Participate or Election to Terminate.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is a member of
the same controlled group of corporations (within the meaning of Section
414(b) of the IRC) as the Company, (ii) partnership or other trade or
business (whether or not incorporated) under common control (within the
meaning of Section 414(c) of the IRC) with the Company, and (iii) member
of the same affiliated service group (within the meaning of Section 414(m)
of the IRC) as the Company, any corporation described in clause (i) above
or any partnership or trade or business described in clause (ii) above.
"Eurocurrency Commitment" shall mean, with respect to any Bank, the
amount set forth opposite its signature below in the column entitled
"Eurocurrency Commitment", as such amount may be modified from time to
time pursuant to the terms hereof.
"Eurocurrency Loan" shall have the meaning ascribed to such term in
Section 2.01(b).
"Eurocurrency Margin" is defined in Section 2.06(b).
"Eurocurrency Note" shall have the meaning ascribed to such term in
Section 2.03(b).
"Eurocurrency Rate" shall mean, with respect to any Eurocurrency Loan
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next higher 1/8 of 1%) equal to the sum of (a) the
Eurocurrency Margin plus (b) a rate per annum equal to the Euro-Interbank
Rate in effect for such Interest Period. For purposes hereof
"Euro-Interbank Rate" shall mean, with respect to any Eurocurrency Loan
for any Interest Period, the applicable London interbank offered rate for
deposits in the applicable Alternative Currency appearing on Telerate Page
3750 as of 11:00 a.m. (London time) two (2) Business Days prior to the
first day of such Interest Period, and having a maturity approximately
equal to such Interest Period. If no London interbank offered rate of
such maturity then appears on Telerate Page 3750, then the Euro-Interbank
Rate shall be equal to the London interbank offered rate for deposits in
the applicable Alternative Currency maturing immediately before or
immediately after such maturity, whichever is higher, as determined by the
Agent from Telerate Page 3750. If Telerate Page 3750 is not available,
the applicable Euro-Interbank Rate for the relevant Interest Period shall
be the rate at which deposits in the applicable Alternative Currency
approximately equal in principal amount to First Chicago's portion of the
proposed Eurocurrency Loan and for the maturity equal to the applicable
Interest Period are offered by First Chicago in immediately available
funds in the London, England interbank market at approximately 11:00 A.M.,
London time, two (2) Business Days prior to the commencement of such
Interest Period.
"Eurodollar Office" shall mean, for each Bank, the Eurodollar Office
set forth for such Bank on the signature pages hereof, unless such Bank
shall designate a different Eurodollar Office or different Eurodollar
Offices by notice in writing to the Agent and the Company.
"Event of Default" shall mean any Event of Default set forth in
Article VII hereof.
"Expiration Date" shall mean November 29, 2000.
"Financial Officer" shall mean either the Chief Financial Officer or
such other person the Chief Financial Officer shall designate in writing
from time to time.
"First Chicago" shall mean The First National Bank of Chicago in its
individual capacity, and its successors.
"Fixed Charges" for any period shall mean on a consolidated basis the
sum of (a) all Rentals (excluding all Capitalized Rentals) payable with
respect to continuing operations during such period by the Company and its
Subsidiaries and (b) all Interest Charges on all Indebtedness (including
the interest component of Capitalized Rentals) with respect to continuing
operations of the Company and its Subsidiaries.
"Fixed Rate Loan" shall mean any Adjusted CD Rate Loan, any
Eurocurrency Loan, any LIBOR Loan or any Absolute Rate Loan.
"Funded Debt" of any Person shall mean, without duplication (a) all
Indebtedness for or in respect of borrowed money or which has been
incurred in connection with the acquisition of property or assets, in each
case having a final maturity of more than one year from the date of origin
thereof (or which is renewable or extendible at the option of the obligor
for a period or periods more than one year from the date of origin),
including without limitation, the portion of the "Fixed Purchase Price"
(as defined in the Purchase Agreement) which has been deferred in
accordance with Section 2.4 of the Purchase Agreement, including all
payments in respect thereof that are required to be made within one year
from the date of any determination of Funded Debt, whether or not the
obligation to make such payment shall constitute a current liability of
the obligor under GAAP, provided that any portion of such obligations
incurred in connection with the acquisition of property or assets
specifically including, without limitation, obligations which have been
incurred by such Person in connection with any sale, transfer or issuance
of capital stock pursuant to and in compliance with Section 6.02(c)(5) and
which are at the date of any determination of Funded Debt contingent as to
amount or as to payment shall not be treated as Funded Debt on such date,
(b) all Capitalized Rentals, (c) all Guaranties by such Person of Funded
Debt of others, (d) all obligations of such Person with respect to
receivables sold or otherwise discounted with recourse and (e) all
obligations of such Person with respect to Letters of Credit with an
expiry date more than one year from the Issuance Date (or which can be
extended at the option of the account party to an expiry date more than
one year from the Issuance Date.
"GAAP" shall mean United States generally accepted accounting
principles as in effect from time to time.
"Governmental Authority" shall mean any nation, government, city,
town, municipality, or county or any federal, state, provincial, local or
other political subdivision thereof or thereto and any department,
commission, instrumentality, agency or other entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to such nation, government, city, town, municipality, county or
federal, state, provincial, local or other political subdivisions thereof
or thereto.
"Guaranties" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments
for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation, of any other
Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred
through an agreement, contingent or otherwise, by such Person: (a) to
purchase such Indebtedness or obligation or any property or assets
constituting security therefor, (b) to advance or supply funds (1) for the
purchase or payment of such Indebtedness or obligation, (2) to maintain
working capital or other balance sheet condition or otherwise to advance
or make available funds for the purchase or payment of such Indebtedness
or obligation, or (c) to lease property or to purchase Securities or other
property or services primarily for the purpose of assuring the owner of
such Indebtedness or obligation of the ability of the primary obligor to
make payment of the Indebtedness or obligation, or (d) otherwise to assure
the owner of the Indebtedness or obligation of the primary obligor against
loss in respect thereof. For the purposes of all computations made under
this Agreement, a Guaranty in respect of any Indebtedness for borrowed
money shall be deemed to be Indebtedness equal to the principal amount of
such Indebtedness for borrowed money which has been guaranteed, and a
Guaranty in respect of any other obligation or any dividend shall be
deemed to be Indebtedness equal to the maximum aggregate amount of such
obligation or dividend.
"Indebtedness" of any Person shall mean and include, without
duplication (a) obligations of such Person for borrowed money or which
have been incurred in connection with the acquisition of property or
assets (except for obligations under bona fide employment, consulting,
non-competition, lease and similar agreements), including without
limitation the portion of the "Fixed Purchase Price" (as defined in the
Purchase Agreement) which has been deferred in accordance with Section 2.4
of the Purchase Agreement, provided that any portion of such obligations
which have been incurred in connection with the acquisition of property or
assets specifically including, without limitation, obligations which have
been incurred by such Person in connection with any sale, transfer or
issuance of stock pursuant to and in compliance with Section 6.02(c)(5)
and which are at the date of any determination of Indebtedness contingent
as to amount or as to payment shall not be treated as Indebtedness on such
date, (b) obligations secured by any Lien upon property or assets owned by
such Person, even though such Person has not assumed or become liable for
the payment of such obligations, (c) obligations created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person, notwithstanding the fact that the rights
and remedies of the seller, lender or lessor under such agreement in the
event of default are limited to repossession or sale of property, (d) all
Guaranties by such Person of obligations of others of the character
referred to in this definition, (e) Capitalized Rentals, (f) all
obligations of such Person with respect to receivables sold or otherwise
discounted with recourse, and (g) all obligations of such Person with
respect to the Letter of Credit Obligations. Indebtedness shall not
include obligations under operating leases.
"Interest Charges" for any period shall mean on a consolidated basis
the sum of all interest and all amortization of debt discount and expense
on any particular Indebtedness for which such calculations are being made,
including the interest component of all Capitalized Rentals of the Company
and its Subsidiaries. For purposes of this definition, computations of
interest charges on a pro forma basis for Indebtedness having a variable
interest rate shall be calculated at the rate in effect on the date of any
determination.
"Interest Payment Date" shall mean, as to (a) Alternate Base Rate
Loans, the last Business Day of each March, June, September and December
ending after the Effective Date, and as to (b) Adjusted CD Rate Loans,
Eurocurrency Loans, LIBOR Loans and Absolute Rate Loans, the last day of
the Interest Period applicable thereto (and in the case of any Interest
Period of one hundred and eighty (180) days or six (6) months duration,
the date that would be the last day of such Interest Period if such
Interest Period were of ninety (90) days or three (3) months duration).
"Interest Period" shall mean, (i) as to any LIBOR Loan or
Eurocurrency Loan, the period commencing on the date of such LIBOR Loan or
Eurocurrency Loan and ending on the numerically corresponding day (or if
there is no numerically corresponding day on the last day) in the calendar
month that is one (l), two (2), three (3) or six (6) months thereafter, as
the Company may elect, (ii) as to any Adjusted CD Rate Loan, a period
commencing on the date of such Adjusted CD Rate Loan, and ending thirty
(30), sixty (60), ninety (90) or one hundred and eighty (180) days
thereafter, as the Company may elect, and (iii) as to any Absolute Rate
Loan, the period commencing on the date of such Absolute Rate Loan and
ending 1-270 days thereafter, as the Company may elect; provided, however,
that (a) if any Interest Period would end on a day that is not a Business
Day, such Interest Period shall be extended to the next succeeding
Business Day (unless, in the case of a LIBOR Loan or Eurocurrency Loan,
the same would fall in a succeeding month, in which case such Interest
Period shall end on the immediately preceding Business Day), (b) no
Interest Period with respect to any Loan shall end later than the
Expiration Date and (c) interest shall accrue from and including the first
day of an Interest Period to but excluding the last day of such Interest
Period.
"IRC" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"IRS" shall mean the Internal Revenue Service and any successor
agency.
"Investments" shall mean all investments, in cash or by delivery of
property made, directly or indirectly in any Person, whether by
acquisition of shares of capital stock, indebtedness or any other
obligations or securities or by loan, advance, capital contributions or
otherwise.
"Issuance Date" means, with respect to any Letter of Credit, the date
on which such Letter of Credit is issued hereunder.
"Issuer" means any Bank which has issued a Letter of Credit pursuant
to the Letter of Credit Facility, and its successors and assigns.
"Issuer's Fee" is defined in Section 2.18(g).
"Johnson Family" shall mean at any time, collectively, Samuel C.
Johnson, his wife and their children and grandchildren, the executor or
administrator of the estate or other legal representative of any such
Person, all trusts for the benefit of the foregoing or their heirs or any
one or more of them, and all partnerships, corporations or other entities
directly or indirectly controlled by the foregoing or any one or more of
them.
"Letter of Credit" means any standby letter of credit denominated in
Dollars issued for the account of the Company under the Letter of Credit
Facility.
"Letter of Credit Facility" means the Letter of Credit Facility
provided in Section 2.18.
"Letter of Credit Fee" is defined in Section 2.18(g).
"Letter of Credit Obligations" means, at any date of determination
thereof, all liabilities, whether actual or contingent, of the Company in
respect of the Letters of Credit, including without limitation, the sum of
(a) the Dollar Amount of the Reimbursement Obligations and (b) the Dollar
Amount of the aggregate undrawn face amount of the outstanding Letters of
Credit.
"Letter of Credit Request" is defined in Section 2.18(c).
"LIBOR" shall mean, with respect to any LIBOR Loan for any Interest
Period, an interest rate per annum (rounded upwards, if necessary, to the
next higher 1/8 of l%) equal to the sum of (a) the LIBOR Margin plus (b) a
rate per annum equal to the Interbank Rate in effect for such Interest
Period. For purposes hereof, "Interbank Rate" shall mean, with respect to
any LIBOR Loan for any Interest Period, the applicable London interbank
offered rate for deposits in U.S. dollars appearing on Telerate Page 3750
as of 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period, and having a maturity approximately equal to
such Interest Period. If no London interbank offered rate of such
maturity then appears on Telerate Page 3750, then the Interbank Rate shall
be equal to the London interbank offered rate for deposits in U.S. dollars
maturing immediately before or immediately after such maturity, whichever
is higher, as determined by the Agent from Telerate Page 3750. If
Telerate Page 3750 is not available, the applicable Interbank Rate for the
relevant Interest Period shall be the rate at which Dollar deposits
approximately equal in principal amount to First Chicago's portion of the
proposed LIBOR Loan and for the maturity equal to the applicable Interest
Period are offered by First Chicago in immediately available funds in the
London, England interbank market at approximately 11:00 A.M., London time,
two (2) Business Days prior to the commencement of such Interest Period.
"LIBOR Loan" shall mean any Loan for which interest is determined, in
accordance with the provisions hereof, at LIBOR.
"LIBOR Margin" is defined in Section 2.06(b).
"Lien" shall mean any interest in property securing an obligation
owed to, or a claim by, a Person other than the owner of the property,
whether such interest is based on the common law, statute or contract,
including, without limitation, the security interest arising from a
mortgage, encumbrance, pledge, conditional sale or trust receipt or a
lease, consignment or bailment for security purposes and including any
Capitalized Lease. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, lease and other similar title exceptions and
encumbrances affecting real property. For the purpose of this Agreement,
the Company or a Subsidiary shall be deemed to be the owner of any
property which it has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the property has
been retained by or vested in another person for security purposes.
"Loans" shall mean and include the Revolving Loans, the Eurocurrency
Loans and/or Absolute Rate Loans, as applicable.
"Majority Banks" shall mean Banks in the aggregate having at least
fifty-one percent (51%) of the Aggregate Commitment or, if the Aggregate
Commitment has been terminated, Banks in the aggregate holding at least
fifty-one percent (51%) of the aggregate unpaid principal Dollar amount of
the outstanding Loans and Letter of Credit Obligations.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a) (3) of ERISA which is, or within the immediately preceding
six (6) years was, contributed to by either the Company or any ERISA
Affiliate.
"Net Income Available for Fixed Charges" for any period shall mean
the sum of (a) Consolidated Net Income during such period plus (b) (to the
extent taken into account in determining Consolidated Net Income), all
provisions for any foreign, Federal, state or other income taxes made by
the Company and its Subsidiaries during such period plus (c) Fixed Charges
(to the extent taken into account in determining Consolidated Net Income)
during such period, plus (d) (to the extent taken into account in
determining Consolidated Net Income) in the case of the period of time
prior to October 2, 1998, special charges not to exceed $5,000,000 taken
in respect of certain distribution center closings and, if Uwatec A.G. is
acquired, certain plant closings, in each case during such period.
"Notes" shall mean the Revolving Loan Notes, the Eurocurrency Notes
and/or the Competitive Bid Notes, as applicable.
"Notice of Borrowing" shall have the meaning specified in Section
2.01(a) hereof.
"Notice of Refinancing" shall have the meaning ascribed to such term
in Section 2.08 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any
Person succeeding to the functions thereof.
"Parent Guaranty" shall mean the guaranty by the Company contained in
Article XI hereof, as the same may be amended, supplemented or otherwise
modified from time to time hereafter.
"Permit" shall mean any permit, approval, authorization, license,
variance, or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Liens" shall mean:
(1) Liens for property taxes and assessments or governmental charges
or levies and Liens securing claims or demands of mechanics and
materialmen; provided that payment thereof is not at the time
required by Section 5.06;
(2) Liens of or resulting from any judgment or award, the time for
the appeal or petition for rehearing of which shall not have
expired, or in respect of which the Company or a Subsidiary
shall at any time in good faith be prosecuting an appeal or
proceeding for a review and in respect of which a stay of
execution pending such appeal or proceeding for review shall
have been secured;
(3) Liens incidental to the conduct of business or the ownership of
properties and assets (including, without limitation,
warehousemen's and attorneys' liens, statutory landlords' liens,
workers' compensation liens and ERISA liens) and deposits,
pledges or Liens to secure the performance of bids, tenders or
trade contracts, or to secure statutory obligations, surety or
appeal bonds or other Liens of like general nature incurred in
the ordinary course of business and not in connection with the
borrowing of money; provided that the aggregate amount of the
obligations so secured will not materially impair the value of
the assets so secured or the use thereof in the ordinary course
of business and provided, further, that in each case, the
obligation so secured will not exceed $1,000,000 and is not
overdue or, if overdue, is being contested in good faith by
appropriate actions or proceedings;
(4) minor survey exceptions or minor encumbrances, easements or
reservations, or rights of others for rights-of-way, utilities
and other similar purposes, or zoning or other restrictions as
to the use of real properties, which are necessary for the
conduct of the activities of the Company and its Subsidiaries or
which customarily exist on properties of Persons engaged in
similar activities and similarly situated and which do not in
any event materially impair their use in the operation of the
business of the Company and its Subsidiaries;
(5) Liens securing Indebtedness of a Subsidiary to the Company or to
an Eighty Percent-Owned Subsidiary;
(6) Liens existing as of the date of this Agreement securing
Indebtedness of the Company or any Subsidiary outstanding on
such date and described on Schedule IV attached to this
Agreement,
(7) Liens incurred after the date of this Agreement given to secure
the payment of the cost of the acquisition or construction of
fixed assets useful and intended to be used in carrying on the
business of the Company or a Subsidiary; provided that (i) the
Lien shall attach solely to the fixed assets acquired or
constructed, (ii) the Lien shall have been created or incurred
within twelve (12) months of the date of acquisition or the date
of completion of construction, as the case may be, of such fixed
assets, (iii) at the time of the acquisition or construction of
such fixed assets the aggregate amount remaining unpaid on all
Indebtedness secured by Liens on such fixed assets whether or
not assumed by the Company or a Subsidiary shall not exceed an
amount equal to the lesser of the total cost or fair market
value at the time of acquisition or completion of construction
of such fixed assets (as determined in good faith by the Board
of Directors of the Company) and (iv) all such Indebtedness
shall have been incurred within the applicable limitations of
Section 6.01;
(8) Liens existing on any assets at the time of acquisition thereof
or at the time of acquisition by the Company or a Subsidiary of
any business entity then owning such assets, whether or not such
existing Liens were given to secure the payment of the purchase
price of the assets to which they attach, so long as they were
not incurred, extended or renewed in contemplation of such
acquisition; provided that (a) any such Lien shall attach solely
to the assets acquired and (b) at the time of the acquisition of
the assets or business entity, as the case may be, the aggregate
amount remaining unpaid on all Indebtedness secured by Liens on
such assets and business entities (whether or not assumed by the
Company or such Subsidiary) shall not be in excess of the fair
market value of such assets and business entities at the time of
such acquisition (as determined in good faith by the Board of
Directors of the Company); and
(9) any extension, renewal or replacement of any Lien permitted by
the preceding clauses (6), (7) and (8) of this definition in
respect of the same property theretofore subject to such Lien in
connection with the extension, renewal or refunding of the
Indebtedness secured thereby; provided that (a) such Lien shall
attach solely to the same such property and (b) such extension,
renewal or refunding of such Indebtedness shall be without
increase in the principal amount remaining unpaid as of the date
of such extension, renewal or refunding.
"Person" shall mean any natural person, corporation, business trust,
joint venture, association, company, partnership or Governmental
Authority.
"Plan" shall mean an employee benefit plan defined in Section 3(3) of
ERISA in respect of which the Company or any ERISA Affiliate is, or within
the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"Principal Subsidiaries" shall mean any Subsidiary of the Company
which had (a) total assets, on a consolidating basis, as of the last day
of the most recently ended fiscal quarter of the Company, of an amount
equal to or greater than ten percent (10%) of Consolidated Total Assets of
the Company as of the last day of such fiscal quarter or (b) net income,
on a consolidating basis, for the Company's most recent fiscal year, equal
to or greater than 10% of Consolidated Net Income of the Company for such
year.
"Purchase Agreement" means that certain Share Purchase Agreement
dated as of July 11, 1997 by and among the Company, Uwatec AG, Heinz
Ruchti and Karl Leemann.
"Quarterly Date" shall mean the last day of each fiscal quarter of
the Company.
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any
successor thereto or other regulation or official interpretation of said
Board of Governors relating to reserve requirements applicable to member
banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of the
obligations of the Company to the Issuers and the Banks in respect of all
unreimbursed payments or disbursements made by an Issuer and the Banks
under or in respect of the Letters of Credit.
"Rentals" of any Person shall mean and include all fixed rents
(including as such all payments which the lessee is obligated to make to
the lessor on termination of the lease or surrender of the property)
payable by such Person, as lessee or sublessee under a lease of real or
personal property, but shall be exclusive of any amounts required to be
paid by such Person (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar
charges. Fixed rents under any so-called "percentage leases" shall be
computed solely on the basis of the minimum rents, if any, required to be
paid by the lessee regardless of sales volume or gross revenues.
"Reportable Event" shall mean any Reportable Event as defined in
Section 4043 of ERISA or the regulations thereunder for which the 30-day
notice requirement has not been waived by the PBGC.
"Requirement of Law" shall mean any federal, state or local law, rule
or regulation, Permit, or other binding determination of any Governmental
Authority.
"Revolving Loan" is defined in Section 2.01(a).
"Revolving Loan Commitment" shall mean, with respect to any Bank, the
amount set forth opposite its signature below in the column entitled
"Revolving Loan Commitment", as such amount may be modified from time to
time pursuant to the terms hereof.
"Revolving Loan Note" shall have the meaning ascribed to such term in
Section 2.03(a) hereof.
"Section" shall mean a numbered section of this Agreement, unless
another document is specifically referenced.
"Statutory Reserves" shall mean a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is
the number one minus the aggregate of the maximum reserve percentages
(including, without limitation, any marginal, special, emergency, or
supplemental reserves) expressed as a decimal established by the Board and
any other banking authority for determining the reserve requirements of
the Agent for new negotiable time deposits in Dollars of $100,000 or more
issued by a member bank of the Federal Reserve System in New York City (as
such terms are defined in Regulation D) with maturities approximately
equal to the applicable Interest Period, in the case of the Adjusted CD
Rate. Such reserve percentages shall include, without limitation, those
imposed under Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Subsidiary" shall mean a subsidiary of the Company. The term
"subsidiary" shall mean, as to any particular parent corporation, (i) any
corporation of which more than 50% (by number of votes) of the Voting
Stock shall be owned by such parent corporation and/or one or more
corporations which are themselves subsidiaries of such parent corporation
and (ii) any partnership, association, joint venture or similar business
organization more than 50% of the equity ownership interests which shall
at the time be so owned.
"Subsidiary Obligations" shall mean all unpaid principal of and
accrued and unpaid interest on the Eurocurrency Notes, all accrued and
unpaid fees and all expenses, reimbursements, indemnities and other
obligations of the Eligible Subsidiaries to the Banks or any Bank, the
Agent or any indemnified party hereunder arising under this Agreement.
"Tangible Assets" of any Person shall mean, as of the date of any
determination thereof, the total amount of all assets of such Person (less
depreciation, depletion and other properly deductible valuation reserves)
after deducting the following: goodwill, patents, trade names,
trademarks, copyrights, franchises, experimental expense, organization
expense, unamortized debt discount and expense, the excess of cost of
shares acquired over book value of related assets, any write up in the
book value of any asset resulting from a revaluation thereof subsequent to
October 3, 1997 (except to the extent such write up is required by GAAP)
and such other assets as are properly classified as "intangible assets" in
accordance with GAAP.
"Taxes" shall have the meaning ascribed to such term in Section
2.12(b).
"Termination Event" shall mean (i) a Reportable Event with respect to
any Benefit Plan; (ii) the withdrawal of the Company or any ERISA
Affiliate from a Benefit Plan during a plan year in which the Company or
such ERISA Affiliate was a "substantial employer" as defined in Section
4001(a) (2) of ERISA; (iii) the imposition of an obligation on the Company
or any ERISA Affiliate under Section 4041 of ERISA to provide affected
parties written notice of intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA; (iv) the institution by
the PBGC of proceedings to terminate a Benefit Plan; (v) any event or
condition which might constitute grounds under Section 4042 of ERISA for
the termination of, or the appointment of a trustee to administer, any
Benefit Plan; or (vi) the partial or complete withdrawal of the Company or
any ERISA Affiliate from a Multiemployer Plan.
"Type" of Loan shall mean an Alternate Base Rate Loan, Adjusted CD
Rate Loan, Eurocurrency Loan, LIBOR Loan or Absolute Rate Loan.
"Voting Stock" shall mean securities of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled
to elect a majority of the corporate directors (or Persons performing
similar functions).
"Wholly-owned" when used in connection with any Subsidiary shall mean
a Subsidiary of which all of the issued and outstanding shares of stock
(other than directors' qualifying shares or shares owned by foreign
domiciliaries as required by law) shall be owned by the Company and/or one
or more of its Wholly-owned Subsidiaries.
SECTION 1.02. Accounting Terms. Where the character or amount
of any asset or liability or item of income or expense is required to be
determined or any consolidation or other accounting computation is
required to be made for the purposes of this Agreement, the same shall be
done in accordance with GAAP, to the extent applicable, except where such
principles are inconsistent with the specific provisions of this
Agreement. For purposes of this Agreement, GAAP shall be determined on
the basis of such principles in effect on the date hereof and consistent
with those used in the preparation of the audited financial statements
referred to in paragraph (d) of Article III. In the event that any
Accounting Changes (as defined below) shall occur and such change results
in a change in the method of calculation of financial covenants, standards
or terms in this Agreement, then the Company and the Banks agree to enter
into negotiations in order to amend such provisions of this Agreement so
as to equitably reflect such Accounting Changes with the desired result
that the criteria for evaluating the financial condition of the Company
and its consolidated Subsidiaries shall be the same after such Accounting
Changes as if such Accounting Changes had not been made. Until such time
as such an amendment shall have been executed and delivered by the parties
thereto, all financial covenants, standards and terms in this Agreement
shall continue to be calculated or construed as if such Accounting Changes
had not occurred. "Accounting Changes" means: changes in accounting
principles required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standards Board or
the American Institute of Certified Public Accountants or, if applicable,
the Securities and Exchange Commission (or successors thereto or agencies
with similar functions).
SECTION 1.03. Directly or Indirectly. Where any provision in
this Agreement refers to action to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be applicable
whether the action in question is taken directly or indirectly by such
Person.
II. THE LOANS
SECTION 2.01. Revolving Loans and Eurocurrency Loans.
(a) Upon the terms and subject to the conditions hereinafter
set forth and in reliance upon the representations and warranties
contained herein, each Bank, by its execution and delivery of this
Agreement, severally, and not jointly, agrees to make Revolving Loans
to the Company from time to time from the date hereof to the
Expiration Date, at such times and in such amounts as the Company
shall request, subject to the limitation that (i) the aggregate
outstanding principal Dollar Amount of Revolving Loans, Eurocurrency
Loans and Absolute Rate Loans to and Letter of Credit Obligations of
the Company and all Eligible Subsidiaries does not exceed the
Aggregate Commitment and (ii) the aggregate outstanding principal
amount of Revolving Loans made pursuant to this Section 2.01(a) and
Letter of Credit Obligations of the Company shall at no time exceed
such Bank's Revolving Loan Commitment (each such loan, individually a
"Revolving Loan" and collectively, the "Revolving Loans"). The
aggregate outstanding amount of Absolute Rate Loans shall reduce each
Bank's Revolving Loan Commitment ratably in the proportion such
Bank's Revolving Loan Commitment bears to the Aggregate Revolving
Commitment regardless of which Bank makes such Absolute Rate Loans.
In addition, each Bank may, in its sole discretion, make bids to make
Absolute Rate Loans pursuant to Section 2.04. Upon the terms and
subject to the conditions of this Agreement, the Company may elect to
make Borrowings of Revolving Loans at the Alternate Base Rate, the
Adjusted CD Rate or LIBOR. The Company shall give at least three (3)
Business Days' prior irrevocable written or telex notice to the Agent
of any requested Borrowing of LIBOR Loans under this Section 2.01(a)
and at least two (2) Business Days' prior irrevocable written or
telex notice to the Agent of any requested Borrowing of Adjusted CD
Rate Loans under this Section 2.01(a). An irrevocable written or
telex notice of any requested Borrowing of Alternate Base Rate Loans
may be made on the Borrowing Date for such requested Borrowing;
provided, however, that the Company shall use its best efforts to
give at least one (l) Business Day's prior irrevocable written or
telex notice of Alternate Base Rate Loans under this Section 2.01(a).
Each such notice and similar notice pursuant to Section 2.01(b) shall
herein be called a "Notice of Borrowing" and each Notice of Borrowing
shall specify the amount and Type of the proposed Borrowing, the
proposed Borrowing Date and, if such Notice of Borrowing requests
Fixed Rate Loans, the proposed Interest Period. Each Notice of
Borrowing, to be effective, must be received by the Agent not later
than 10:00 a.m., Chicago time, on the last Business Day on which
notice can be given of such Borrowing, as provided above. If no Type
of Borrowing is specified in such Notice of Borrowing, such Borrowing
shall be of Alternate Base Rate Loans, and if no Interest Period is
specified in a Notice of Borrowing requesting LIBOR Loans or Adjusted
CD Rate Loans, the Interest Period shall be one (1) month or thirty
(30) days, respectively.
(b) Upon the terms and subject to the conditions hereinafter
set forth and in reliance upon the representations and warranties
contained herein, each Bank, by its execution and delivery of this
Agreement, severally and not jointly, agrees to make Eurocurrency
Loans in one or more Alternative Currencies to the Company or any
Eligible Subsidiary pursuant to this Section 2.01(b) from time to
time from the date hereof to the Expiration Date in amounts such that
(i) the aggregate outstanding principal Dollar Amount of Eurocurrency
Loans, Revolving Loans and Absolute Rate Loans by such Bank to the
Company and all Eligible Subsidiaries and Letter of Credit
Obligations of the Company does not exceed the Aggregate Commitment
and (ii) the aggregate outstanding principal Dollar Amount of
Eurocurrency Loans made pursuant to this Section 2.01(b) shall at no
time exceed such Bank's Eurocurrency Commitment (each such Loan,
individually a "Eurocurrency Loan" and collectively the "Eurocurrency
Loans"). Subject to the terms and conditions of this Agreement, the
Company or an Eligible Subsidiary may elect to make Borrowings of
Eurocurrency Loans in any Alternative Currency. The Company or such
Eligible Subsidiary shall give the Agent a Notice of Borrowing at
least three (3) Business Days' prior to the requested Borrowing of
Eurocurrency Loans under this Section 2.01(b). Each such Notice of
Borrowing shall specify the amount and Alternative Currency of such
Borrowing, the proposed Borrowing Date and the proposed Interest
Period. Each such Notice of Borrowing, to be effective, must be
received by the Agent not later than 10 a.m., Chicago time, on the
last Business Day on which such notice can be given. If no Interest
Period is specified in a Notice of Borrowing of Eurocurrency Loans,
the Interest Period shall be one (1) month.
(c) The Agent shall, on the same day a Notice of Borrowing is
received from the Company or any Eligible Subsidiary, notify each
Bank of the amount of its Applicable Percentage of such Borrowing,
the Borrowing Date, the Type of Borrowing, the Applicable Rate and,
if applicable, the Interest Period, Eligible Subsidiary and
Alternative Currency. On the Borrowing Date specified in such Notice
of Borrowing, each Bank shall make the amount of its Applicable
Percentage of the Borrowing available to the Agent at the Agent's
Domestic Office, no later than 12:00 noon, Chicago time, in
immediately available funds. On such date the Agent shall credit the
amounts so received, in immediately available funds, to the regular
deposit account maintained by the Company or applicable Eligible
Subsidiary with it, or shall transfer such amount to another account
designated by the Company in writing and acceptable to the Agent.
Each Borrowing of Fixed Rate Loans made by the Company or applicable
Eligible Subsidiary under this Section 2.01 shall be in an aggregate
principal amount of not less than $1,000,000 and in an integral
multiple of $500,000. There is no minimum amount for Alternate Base
Rate Loans. Until the Expiration Date, the Company may borrow, pay,
reborrow and repay hereunder in accordance with Section 2.01(a) and
the Company and the Eligible Subsidiaries may borrow, pay, reborrow
and repay hereunder in accordance with Section 2.01(b).
(d) The Agent shall be entitled to assume, unless it shall have
received notice from any Bank to the contrary, that each Bank will
make the amount of its Applicable Percentage of each Borrowing
available to the Agent on the date required, and the Agent may (but
shall not be obligated to) make a corresponding amount available to
the Company or Eligible Subsidiary, as the case may be. If such
amount is not in fact made available to the Agent by any Bank and the
Agent has made a corresponding amount available to the Company or
Eligible Subsidiary, as the case may be, the Agent shall be entitled
to recover such corresponding amount on demand from such Bank. If
such Bank does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Company
or applicable Eligible Subsidiary and the Company or such Eligible
Subsidiary shall pay such corresponding amount to the Agent. The
Agent shall also be entitled to recover from such Bank or the Company
or such Eligible Subsidiary, as the case may be, interest on such
corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Company
or Eligible Subsidiary to the date such corresponding amount is
recovered by the Agent, at a rate per annum equal, in the case of a
recovery from the Company or Eligible Subsidiary, to the rate payable
on such amount pursuant to this Agreement or, in the case of a
recovery from such Bank, at the "Federal Funds Effective Rate" (as
defined in the definition of Alternate Base Rate).
(e) Any Borrowing pursuant to Section 2.01(b) which is made in
an Alternative Currency shall be advanced in such Alternative
Currency and shall be repaid or prepaid in such Alternative Currency
in the amount borrowed. Interest payable on any Loan denominated in
an Alternative Currency shall be paid in such Alternative Currency.
Each Borrowing denominated in an Alternative Currency shall be deemed
a utilization of the Commitments in an amount equal to the Dollar
Amount thereof.
(f) Notwithstanding the satisfaction of all conditions referred
to in Section 2.01(b) with respect to any Eurocurrency Borrowing, if
there shall occur on or prior to the date of such Borrowing any
change in national or international financial, political or economic
conditions or currency exchange rates or exchange controls or in the
general availability in the London interbank market of deposits in
the Alternative Currency, and for the requested Interest Period,
which change would, in the opinion of the Agent, make it
impracticable for the Eurocurrency Loans comprising such Borrowing to
be denominated in the requested Alternative Currency, then the Agent
shall promptly give notice thereof to the Company, the applicable
Eligible Subsidiary and the Banks and such Loans shall not be
denominated in such Alternative Currency but shall be made on the
date of such Borrowing in Dollars as Alternate Base Rate Loans,
unless the applicable Eligible Subsidiary notifies the Agent at least
two Business Days prior to the proposed Borrowing Date that it elects
not to borrow.
(g) The Company may upon three (3) days' written notice to the
Agent, increase or decrease the respective amounts of the Aggregate
Revolving Commitment and the Aggregate Eurocurrency Commitment,
provided that the total amount thereof shall at no time exceed the
Aggregate Commitment and further provided, that at no time may the
Aggregate Revolving Commitment be reduced below the then outstanding
principal amount of the Revolving Loans and the Aggregate
Eurocurrency Commitment shall at no time be reduced below the
aggregate outstanding principal Dollar Amount of Eurocurrency Loans.
SECTION 2.02. (Intentionally omitted).
SECTION 2.03. Revolving Loan and Eurocurrency Notes.
(a) Revolving Loan Notes. The Revolving Loans of each Bank to
the Company shall be evidenced by a Revolving Loan Note ("Revolving
Loan Note") substantially in the form attached hereto as Exhibit A,
appropriately completed, duly executed and delivered on behalf of the
Company and payable to the order of each Bank, or by any Revolving
Loan Note or Revolving Loan Notes subsequently issued by the Company
in substitution therefor and replacement thereof. The date, amount,
Applicable Rate, and Interest Period of each Revolving Loan of such
Bank to the Company (including each Revolving Loan made to refinance
an existing Revolving Loan pursuant to Section 2.08 hereof ), and the
date and amount of each payment and prepayment of principal of any
Revolving Loan to such Bank by the Company, shall be recorded in such
Bank's internal records and, prior to any transfer of such Revolving
Loan Note, on a grid schedule which shall be annexed thereto, and the
Company authorizes each Bank to make such recordation; provided,
however, that the failure of any Bank to set forth such Revolving
Loans, principal payments or other information on such schedule shall
not in any manner affect the obligation of the Company to repay the
Revolving Loans made by such Bank to the Company in accordance with
the terms of this Agreement and the applicable Revolving Loan Note.
Each Bank's Revolving Loan Note and other records maintained by such
Bank shall be prima facie evidence of the Revolving Loans made by
such Bank to the Company. The principal of each Revolving Loan as
evidenced by a Revolving Loan Note shall be payable (subject to
Section 2.08 hereof) on the earlier of (i) the last day of the
Interest Period of such Revolving Loan, or (ii) the date on which
such Revolving Loan is prepaid pursuant to Section 2.11 hereof, or
(iii) the Expiration Date. All accrued and unpaid interest on any
Revolving Loan shall, subject to the provisions hereof, be payable
simultaneously with the payment of the principal of such Revolving
Loan; provided that, if any such day is not a Business Day, such
principal and interest shall be payable on the next succeeding
Business Day (unless, in the case of a LIBOR Loan, the same would
fall in a succeeding month, or, in the case of any Revolving Loan,
the same would fall after the Expiration Date, in which case such
principal and interest shall be payable on the immediately preceding
Business Day).
(b) Eurocurrency Notes. The Eurocurrency Loans of each Bank to the
Company and each Eligible Subsidiary shall be evidenced by a Eurocurrency
Note ("Eurocurrency Note") substantially in the form attached hereto as
Exhibit B, appropriately completed, duly executed and delivered on behalf
of the Company and each Eligible Subsidiary and payable to the order of
each Bank or any Eurocurrency Note or Eurocurrency Notes subsequently
issued by the Company or such Eligible Subsidiary in substitution therefor
and replacement thereof. The date, amount, applicable Alternative
Currency, Applicable Rate, and Interest Period of each Eurocurrency Loan
of such Bank to the Company or such Eligible Subsidiary (including each
Eurocurrency Loan made to refinance an existing Eurocurrency Loan pursuant
to Section 2.08 hereof ), and the date and amount of each payment and
prepayment of principal of any Eurocurrency Loan to such Bank by the
Company or such Eligible Subsidiary, shall be recorded in such Bank's
internal records and, prior to any transfer of such Eurocurrency Note, on
a grid schedule which shall be annexed thereto, and the Company and each
Eligible Subsidiary authorizes each Bank to make such recordation;
provided, however, that the failure of any Bank to set forth such
Eurocurrency Loans, principal payments or other information on such
schedule shall not in any manner affect the obligation of the Company and
each Eligible Subsidiary to repay the Eurocurrency Loans made by such Bank
to the Company or such Eligible Subsidiary in accordance with the terms of
this Agreement and the applicable Eurocurrency Note. Each Bank's
Eurocurrency Note and other records maintained by such Bank shall be prima
facie evidence of the Eurocurrency Loans made by such Bank to the Company
or such Eligible Subsidiary. The principal of each Eurocurrency Loan as
evidenced by a Eurocurrency Note shall be payable (subject to Section 2.09
hereof) on the earlier of (i) the last day of the Interest Period of such
Eurocurrency Loan, or (ii) the date on which such Eurocurrency Loan is
prepaid pursuant to Section 2.11 hereof, or (iii) the Expiration Date.
All accrued and unpaid interest on any Eurocurrency Loan shall, subject to
the provisions hereof, be payable simultaneously with the payment of the
principal of such Eurocurrency Loan; provided that, if any such day is not
a Business Day, such principal and interest shall be payable on the next
succeeding Business Day unless the same would fall in a succeeding month
or the same would fall after the Expiration Date, in which case such
principal and interest shall be payable on the immediately preceding
Business Day.
SECTION 2.04. Absolute Rate Loans.
In addition to Revolving Loans pursuant to Section 2.01, but
subject to the terms and conditions set forth in this Agreement
(including, without limitation, the limitation set forth in Sections
2.01(a) and 2.01(b) as to the maximum aggregate principal amount of all
outstanding Loans hereunder), the Company may, as set forth in this
Section 2.04, request any one or more of the Banks, prior to the
Expiration Date, to make offers to make Absolute Rate Loans to the
Company. Each Bank may, but shall have no obligation to, make such offers
and the Company may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section 2.04. Absolute Rate Loans
shall be evidenced by the Competitive Bid Notes. Each Absolute Rate Loan
shall be repaid in full by the Company on the last day of the Interest
Period applicable thereto.
(a) Competitive Bid Quote Request. When the Company wishes to
request offers to make Absolute Rate Loans under Section 2.04, the
Company shall transmit to any Bank selected by the Company by
telephone, telex or telecopy a Competitive Bid Quote Request,
specifying:
(i) the aggregate principal amount of such Absolute Rate
Loan;
(ii) the Interest Period applicable thereto (which must end
on or prior to the Expiration Date); and
(iii) the proposed Borrowing Date, if other than the
day of the Competitive Bid Quote Request.
After giving effect to such Absolute Rate Loan, the then aggregate
outstanding principal amount of all Loans shall not exceed the Aggregate
Commitment then in effect and the aggregate outstanding principal amount
of all Revolving Loans and Absolute Rate Loans shall not exceed the
Aggregate Revolving Commitment.
(b) Submission and Contents of Competitive Bid Quotes.
(i) Each Bank may, in its sole discretion, submit a
Competitive Bid Quote containing an offer or offers to make
Absolute Rate Loans in response to any Competitive Bid Quote
Request. Each Competitive Bid Quote must comply with the
requirements of this Section 2.04(b) and must be submitted to
the Company by telephone, telex or telecopy at its offices
specified in or pursuant to Article X. Subject to Articles IV
and VII, any Competitive Bid Quote so made shall be irrevocable
except with the written consent of the Company.
(ii) Each Competitive Bid Quote shall in any case specify:
(A) the proposed Borrowing Date, which shall be the
same as that set forth in the applicable Competitive Bid
Quote Request;
(B) the principal amount of the Absolute Rate Loan
for which each such offer is being made, (1) the principal
amount of which may be greater than, less than or equal to
the Commitment of the quoting Bank, but in no case greater
than the Aggregate Revolving Commitment and (2) which
principal amount may not exceed the principal amount of
Absolute Rate Loans for which offers were requested;
(C) the minimum amount of the Absolute Rate Loan
which may be accepted by the Company;
(D) the Absolute Rate offered for each such Absolute
Rate Loan;
(E) the applicable Interest Period;
(F) the identity of the quoting Bank;
(G) the time by which the Company must notify the
quoting Bank of its acceptance or rejection of such
Competitive Bid Quote; and
(H) whether the terms of an accepted offer must be
confirmed by the Company in writing.
(c) Acceptance and Notice by the Company. Not later than the
time specified for such notice in the Competitive Bid Quote, the
Company shall notify the participating Bank or Banks by telephone,
telex or telecopy of the Company's acceptance or rejection of the
offers so notified to it pursuant to Section 2.04.(b); provided,
however, that the failure of the Company to give such notice to such
Bank or Banks shall be deemed to be a rejection of all such offers.
In the case of acceptance, such notice (a "Competitive Bid Borrowing
Notice") shall specify the aggregate principal amount of offers for
each Interest Period that are accepted. The Company may accept or
reject any Competitive Bid Quote in whole or in part; provided that
the aggregate principal amount of each Absolute Rate Loan may not
exceed the applicable amount set forth in the related Competitive Bid
Quote Request. The Company shall confirm the terms of an accepted
offer to make an Absolute Rate Loan in writing to the quoting Bank if
required by the terms of the Competitive Bid Quote.
(d) Allocation by the Company. If offers are made by two or
more Banks with the same Absolute Rates for a greater aggregate
principal amount than the amount in respect of which offers are
permitted to be accepted for the related Interest Period, the
principal amount of Absolute Rate Loans in respect of which such
offers are accepted shall be allocated by the Company among such
Banks in its sole discretion; provided, however, that no Bank shall
be allocated a portion of any Absolute Rate Loan which is less than
the minimum amount which such Bank has indicated that it is willing
to accept. Allocations by the Company of the amounts of Absolute
Rate Loans shall be conclusive in the absence of manifest error.
(e) Notice to Agent. Each Bank making an Absolute Rate Loan
shall promptly, and not later than the close of business on the
Borrowing Date, notify the Agent of the amount and Interest Period of
each Absolute Rate Loan. If a Bank fails to so notify the Agent,
such Absolute Rate Loan shall not constitute an Absolute Rate Loan
under this Agreement.
SECTION 2.05. Continuation of Loans under the Current
Agreement. The Company and the Banks acknowledge and agree that each Loan
(as defined in the Current Agreement) outstanding under the Current
Agreement as of the Effective Date shall remain outstanding past the
Effective Date and shall be treated as an Absolute Rate Loan made pursuant
to Section 2.04 of this Agreement. Each such Absolute Rate Loan shall
continue at its existing principal amount and interest rate until the
expiration of its interest period under the Current Agreement.
SECTION 2.06. Interest on Loans.
(a) Each Alternate Base Rate Loan, and the principal balance of
each of the Company's and the Eligible Subsidiaries' other
obligations to the Banks arising under this Agreement (other than
Adjusted CD Rate Loans, Eurocurrency Loans, LIBOR Loans and Absolute
Rate Loans) shall bear interest until maturity (by acceleration or
otherwise) on its principal amount outstanding from time to time at a
rate per annum (computed on the basis of the actual number of days
elapsed and a year of 360 days, except in the case of Alternate Base
Rate Loans based on the Corporate Base Rate, which Alternate Base
Rate Loans shall be computed on the basis of the actual number of
days elapsed and a year of 365/366 days) equal to the Alternate Base
Rate in effect from time to time. Interest shall be payable on each
Alternate Base Rate Loan on the earliest of (i) each Interest Payment
Date applicable to such Loan, (ii) the date upon which such Alternate
Base Rate Loan is converted to a Fixed Rate Loan pursuant to the
terms hereof, (iii) any date on which such Loan is prepaid, or (iv)
the Expiration Date.
(b) The Adjusted CD Rate Margin, Eurocurrency Margin and LIBOR
Margin (each herein a "Margin") shall be subject to adjustment
(upwards or downwards, as appropriate) based on the applicable ratio
of the Company's Consolidated Funded Debt to EBITDA ("Debt/EBITDA
Ratio") as at the end of any fiscal quarter, as set forth in the
chart below. The Debt/EBITDA Ratio shall be calculated on a four
quarter rolling average basis from financial statements delivered by
the Company pursuant to Section 5.01. The adjustment, if any, to the
applicable Margins shall be effective on the fifth Business Day after
the delivery of such financial statements. If the Company shall at
any time fail to timely furnish to the Banks the financial statements
required to be delivered pursuant to Section 5.01, the maximum
applicable Margin shall apply until delivery of the financial
statements. Notwithstanding the foregoing, if at the end of any
fiscal quarter, the ratio of Net Income Available for Fixed Charges
to Fixed Charges is less than 1.5 to 1.0, the maximum Margins shall
apply until the financial statements delivered at the end of any
fiscal quarter evidence a ratio equal to or greater than 1.5 to 1.0.
Ratio of LIBOR Eurocurrency Adjusted
Consolidated Margin Margin CD Rate
Funded Debt to Margin
EBITDA
Less than 2.5 45 b.p. 45 b.p. 57.5 b.p.
Less than 3.0 but
equal to or 75 b.p. 75 b.p. 87.5 b.p.
greater than 2.5 100 b.p. 100 b.p. 112.5 b.p.
Greater than or
equal to 3.0
(c) Each Adjusted CD Rate Loan shall bear interest (computed on
the basis of the actual number of days elapsed and a year of 360
days) until maturity (by acceleration or otherwise) at the Adjusted
CD Rate for the Interest Period in effect for such Loan. Interest
shall be payable on each Adjusted CD Rate Loan on the earlier of (i)
each Interest Payment Date applicable to such Loan, (ii) any date on
which such Loan is prepaid, or (iii) the Expiration Date. The Agent
shall determine the Adjusted CD Rate for each Interest Period at
10:00 a.m., Chicago time, on the first day of such Interest Period,
or as soon as practicable thereafter, and shall notify (by telephone,
confirmed promptly thereafter in writing) the Company and the Banks
of the Adjusted CD Rate so determined on the date of such
determination. Such determination shall be conclusive absent
manifest error.
(d) Each LIBOR Loan shall bear interest (computed on the basis
of the actual number of days elapsed and a year of 360 days) until
maturity (by acceleration or otherwise) at LIBOR for the Interest
Period in effect for such Loan. Interest shall be payable on each
LIBOR Loan on the earlier of (i) each Interest Payment Date
applicable to such Loan, (ii) any date on which such Loan is prepaid,
or (iii) the Expiration Date. The Agent shall determine LIBOR for
each Interest Period at 10:00 am., Chicago time, two (2) Business
Days prior to the commencement of such Interest Period, or as soon as
practicable thereafter, and shall notify (by telephone, confirmed
promptly thereafter in writing) the Company and the Banks of LIBOR so
determined on the date of such determination. Such determination
shall be conclusive absent manifest error.
(e) Each Eurocurrency Loan shall bear interest (computed on the
basis of the actual number of days elapsed and a year of 360 days)
until maturity (by acceleration or otherwise) at the Eurocurrency
Rate for the Interest Period in effect for such Loan. Interest shall
be payable on each Eurocurrency Loan on the earlier of (i) each
Interest Payment Date applicable to such Loan, (ii) any date on which
such Loan is prepaid and (iii) the Expiration Date. The Agent shall
determine the Eurocurrency Rate for each Interest Period at 10 a.m.
Chicago time, two (2) Business Days prior to the commencement of such
Interest Period, or as soon as practicable thereafter, and shall
notify (by telephone, confirmed promptly thereafter in writing) the
Company, the applicable Eligible Subsidiary and the Banks of the
Eurocurrency Rate so determined on the date of such determination.
Such determination shall be conclusive absent manifest error.
SECTION 2.07. Default Interest; Alternate Rate of Interest.
(a) If the Company or any Eligible Subsidiary shall default in
the payment of the principal of or interest on any Loan or any other
amount becoming due hereunder, the Company or such Eligible
Subsidiary shall, to the extent permitted by law, pay interest on
such defaulted amount (after as well as before judgment) on demand,
from the date such defaulted amount was due until the date of actual
payment at a rate per annum equal to the Alternate Base Rate plus two
percent (2%) per annum.
(b) In the event, and on each occasion, that on or before the
day two (2) Business Days prior to the commencement of any Interest
Period for a LIBOR Loan or Eurocurrency Loan, any Bank shall have
determined (which determination shall be conclusive, absent manifest
error, and binding upon the Company and the Eligible Subsidiaries)
that Dollar deposits or deposits in the applicable Alternative
Currency in the amount of the principal amount of such LIBOR Loan or
Eurocurrency Loan are not generally available in the London interbank
market, or the Majority Banks shall have determined (which
determination shall be conclusive, absent manifest error, and binding
upon the Company and the Eligible Subsidiaries) that the rate at
which such Dollar or Alternative Currency deposits are being offered
will not adequately and fairly reflect the cost to the Banks of
making or maintaining the principal amount of such LIBOR Loan or
Eurocurrency Loan during such Interest Period, or that means do not
exist for ascertaining LIBOR or the applicable Eurocurrency Rate, the
Agent shall, as soon as practicable thereafter, give written or telex
notice, or telephonic notice confirmed promptly in writing, of such
determination to the Company and, if applicable, the Eligible
Subsidiary, and the Banks, and the applicable request by the Company
or Eligible Subsidiary, as the case may be, for the making of a LIBOR
Loan or Eurocurrency Loan shall, unless the Company or the applicable
Eligible Subsidiary shall have given the Agent prior irrevocable
written or telex notice that such request has been withdrawn, which
notice has been received by the Agent not later than 10:00 a.m.,
Chicago time on the Borrowing Date for such requested Borrowing, be
deemed to be a request for an Alternate Base Rate Loan (in Dollars)
in the case of the Company and, in the case of an Eligible
Subsidiary, such request shall be deemed to have been withdrawn.
After such notice from the Agent shall have been given and until the
circumstances giving rise to such notice no longer exist, the rights
of the Company or the Eligible Subsidiary to select LIBOR Loans or
Eurocurrency Loans in the affected Alternative Currency shall be
suspended.
(c) In the event, and on each occasion, that on or before the
day on which the Adjusted CD Rate for an Adjusted CD Rate Loan is to
be determined, the Majority Banks shall have determined (which
determination shall be conclusive, absent manifest error, and binding
upon the Company) that the Adjusted CD Rate for such Loan cannot be
ascertained for any reason (including, without limitation, the
inability of the Agent to obtain sufficient bids in accordance with
the terms of the definition of the Adjusted CD Rate) or that the
Adjusted CD Rate for such Adjusted CD Rate Loan will not adequately
and fairly reflect the cost to the Banks of making or maintaining the
principal amount of such Loan during the applicable Interest Period,
the Agent shall, as soon as practicable thereafter, give written or
telex notice, or telephonic notice confirmed promptly in writing, of
such determination to the Company and the Banks, and the applicable
request by the Company for the making of an Adjusted CD Rate Loan
shall, unless the Company shall have given the Agent prior
irrevocable written or telex notice that such request has been
withdrawn, which notice has been received by the Agent not later than
10:00 am., Chicago time on the Borrowing Date for such requested
Borrowing, be deemed to be a request for an Alternate Base Rate Loan.
After such notice from the Agent shall have been given and until the
circumstances giving rise to such notice no longer exist, the right
of the Company to select Adjusted CD Rate Loans shall be suspended.
SECTION 2.08. Refinancing of Revolving Loans. The Company
shall have the right prior to the Expiration Date, subject to the
provisions of Sections 2.07 and 4.01 hereof and this Section 2.08, (i) on
at least three (3) Business Days' prior irrevocable written or telex
notice (or telephonic notice confirmed promptly thereafter in writing) to
the Agent, to refinance any Borrowing (or portion thereof) of Revolving
Loans with a successive Borrowing of LIBOR Loans, (ii) on at least two (2)
Business Days' prior irrevocable written or telex notice (or telephonic
notice confirmed promptly thereafter in writing) to the Agent, to
refinance any Borrowing (or portion thereof) of Revolving Loans with a
successive Borrowing of Adjusted CD Rate Loans or (iii) on prior
irrevocable written or telex notice (or telephonic notice confirmed
promptly thereafter in writing) to the Agent, to refinance any Borrowing
(or portion thereof) of Revolving Loans with a successive Borrowing of
Alternate Base Rate Loans which notice may be given on the date of such
Borrowing; provided, however, that the Company shall use its best efforts
to give at least one (l) Business Day's prior irrevocable written or telex
notice to the Agent of any such Borrowing of Alternate Base Rate Loans
(each of the above-described notices and the similar notices described in
Section 2.09 being a "Notice of Refinancing"), in each case subject to the
following further conditions:
(a) (1) each refinancing of a Borrowing of Revolving Loans (or
portion thereof) shall be made pro rata among the Banks in accordance
with their Applicable Percentages, (2) the aggregate outstanding
principal amount of all such refinanced Borrowings (or portion
thereof) shall be equal to $1,000,000 or a larger integral multiple
of $500,000 (except there is no minimum amount for Alternate Base
Rate Loans), and (3) the notice given to the Agent by the Company in
connection with the refinancing of any Borrowing shall specify the
amount of such Borrowing to be refinanced;
(b) A Borrowing (or portion thereof) of Fixed Rate Loans may be
refinanced only on the last day of the applicable Interest Period;
(c) Each Notice of Refinancing requesting a Borrowing of LIBOR
Loans or Adjusted CD Rate Loans which shall fail to state an
applicable Interest Period shall be deemed to be a request for an
Interest Period of a one (1) month or thirty (30) day duration,
respectively;
(d) Each refinancing shall be effected by each Bank applying
the proceeds of its Loans made pursuant to the new Borrowing to its
Loans made pursuant to the Borrowing (or portion thereof) being
refinanced; accrued interest on each Loan made pursuant to the
Borrowing (or portion thereof) being refinanced shall be paid by the
Company at the time of refinancing;
(e) The Interest Period with respect to any new Loans made as
part of a refinancing of a Borrowing (or portion thereof) shall
commence on the date of refinancing;
(f) No Borrowing (or portion thereof) of Revolving Loans shall
be refinanced to the extent that the aggregate amount of the
Revolving Loans outstanding after such refinancing would exceed the
limitations set forth in Section 2.01 hereof; and
(g) If the Company fails to deliver a Notice of Refinancing
with respect to a Loan (other than a Eurocurrency Loan) within the
applicable time limits, such Loan shall, provided the conditions set
forth in Section 4.01 (other than delivery of a Notice of
Refinancing) have been met, be automatically refinanced as an
Alternate Base Rate Loan.
Each Notice of Refinancing, to be effective, must be received by
the Agent no later than 10:00 a.m., Chicago time, on the last Business Day
on which notice can be given of such refinancing under the first sentence
of this Section 2.08. The Agent shall communicate the information
contained in each Notice of Refinancing of Revolving Loans delivered by
the Company pursuant to this Section 2.08 to the other Banks promptly
after its receipt of the same. The Type of Borrowing to be made in
connection with any refinancing of a Borrowing (or portion thereof), and
the Interest Period applicable to any new Borrowing of Fixed Rate Loans
made in connection with a refinancing of a Borrowing (or portion thereof)
shall be specified by the Company in the Notice of Refinancing delivered
pursuant to this Section; provided, however, that if no Type of Borrowing
is specified in the Notice of Refinancing, the new Borrowing shall be of
Alternate Base Rate Loans.
SECTION 2.09. Refinancing of Eurocurrency Loans. The Company
or the applicable Eligible Subsidiary shall have the right prior to the
Expiration Date, subject to the provisions of Sections 2.07 and 4.01
hereof and this Section 2.09, (i) on at least four (4) Business Days'
prior irrevocable written or telex notice (or telephonic notice confirmed
promptly thereafter in writing) to the Agent, to refinance any Borrowing
(or portion thereof) of Eurocurrency Loans with a successive Borrowing of
Eurocurrency Loans, subject to the following further conditions:
(a) (i) each refinancing of a Borrowing of Eurocurrency Loans
(or portion thereof) shall be made by the Company or the same
Eligible Subsidiary pro rata among the Banks in accordance with their
Applicable Percentages, (ii) the aggregate outstanding principal
amount of all such refinanced Borrowings (or portion thereof) shall
be equal to $1,000,000 or a larger integral multiple of $500,000, and
(iii) the notice given to the Agent by the Company or the applicable
Eligible Subsidiary in connection with the refinancing of any
Borrowing shall specify the amount of such Borrowing to be
refinanced;
(b) A Borrowing (or portion thereof) of Eurocurrency Loans may
be refinanced only on the last day of the applicable Interest Period;
(c) Each Notice of Refinancing requesting a Borrowing of
Eurocurrency Loans which shall fail to state an applicable Interest
Period shall be deemed to be a request for an Interest Period of a
one (1) month;
(d) Each refinancing shall be effected by each Bank applying
the proceeds of its Loans made pursuant to the new Borrowing to
its Loans made pursuant to the Borrowing (or portion thereof)
being refinanced; accrued interest on each Loan made pursuant to
the Borrowing (or portion thereof) being refinanced shall be
paid by the Company or the applicable Eligible Subsidiary at the
time of refinancing;
(e) The Interest Period with respect to any new Loans made as
part of a refinancing of a Borrowing (or portion thereof) shall
commence on the date of refinancing; and
(f) No Borrowing (or portion thereof) of Eurocurrency Loans
shall be refinanced to the extent the aggregate Dollar Amount of the
Eurocurrency Loans outstanding after such refinancing would exceed
the limitations set forth in Section 2.01 hereof.
Each Notice of Refinancing, to be effective, must be received by
the Agent no later than 10:00 a.m., Chicago time, on the last Business Day
on which notice can be given of such refinancing under the first sentence
of this Section 2.09. The Agent shall communicate the information
contained in each Notice of Refinancing of Eurocurrency Loans delivered by
the Company or an Eligible Subsidiary pursuant to this Section 2.09 to the
other Banks promptly after its receipt of the same.
SECTION 2.10. (Intentionally omitted)
SECTION 2.11. Voluntary and Mandatory Prepayment of Loans;
Indemnification.
(a) The Company and each Eligible Subsidiary shall have the
right (i) at any time and from time to time to prepay on any Business
Day any Borrowing of Alternate Base Rate Loans, in whole or in part,
without premium or penalty, and (ii) at any time and from time to
time to prepay any Borrowing consisting of Fixed Rate Loans (except
Absolute Rate Loans), in whole or in part, without premium or
penalty, except as set forth in Section 2.11(d) hereof, in each case
upon at least five (5) Business Days' prior written or telex notice,
or telephonic notice confirmed promptly thereafter in writing, to the
Agent; provided, however, that any partial prepayment shall be in the
minimum principal amount of $1,000,000 and in an integral multiple of
$500,000. Absolute Rate Loans may only be prepaid upon payment of
any amount due pursuant to Section 2.11(d) and with the consent of
the applicable Bank. Each notice of prepayment of a Borrowing (or
portion thereof) shall specify the prepayment date and the aggregate
principal amount of Loans to be prepaid, shall be irrevocable and
shall commit the Company or the applicable Eligible Subsidiary to
prepay such Loans on the date stated therein. All prepayments shall
be accompanied by accrued interest on the principal amount being
prepaid to the date of prepayment. The Agent shall, promptly after
receiving notice from the Company or an Eligible Subsidiary
hereunder, notify each Bank of the prepayment date and the Loans made
by such Bank which are to be prepaid in whole or in part.
(b) On each Borrowing Date and date of a Refinancing of Loans
on which the aggregate amount of the Revolving Loans outstanding
exceeds the Aggregate Revolving Commitment then in effect, the
Company shall be required to prepay to the Agent, for distribution to
the Banks, the amount of such excess, together with accrued interest
on the principal amount being prepaid to the date of prepayment and
any indemnification in accordance with Section 2.11(d) hereof.
Mandatory prepayments required by this subsection (b) shall be
applied first to Borrowings of Alternate Base Rate Loans, if
applicable, and then to Borrowings of Fixed Rate Loans.
(c) On each Borrowing Date, on the date of a Refinancing of
Loans and on the last Business Day of each March, June, September and
December on which the aggregate Dollar Amount of the Eurocurrency
Loans outstanding exceeds the Aggregate Eurocurrency Commitment then
in effect, the Company or the Eligible Subsidiaries shall be required
to prepay to the Agent, for distribution to the Banks, the amount of
such excess, together with accrued interest on the principal amount
being prepaid to the date of prepayment and any indemnification in
accordance with Section 2.11(d) hereof. Unless otherwise directed in
writing by the Company or the applicable Eligible Subsidiary (each
only with respect to its own payments), mandatory prepayments
required by this Section 2.11(c) shall be applied to the oldest then
outstanding Eurocurrency Loans to the Company or such Eligible
Subsidiary.
(d) The Company and the Eligible Subsidiaries shall indemnify
each Bank against any loss or expense which such Bank may sustain or
incur as a consequence of any failure by the Company or an Eligible
Subsidiary to fulfill on the date of any Borrowing hereunder the
applicable conditions set forth in Article IV, any failure by the
Company or an Eligible Subsidiary to borrow hereunder or to
refinance, convert or renew any Loan hereunder after irrevocable
notice of borrowing pursuant to Section 2.01 or irrevocable notice of
refinancing pursuant to Section 2.08 or 2.09 has been given, any
payment, prepayment or conversion of a Fixed Rate Loan by the Company
or an Eligible Subsidiary required or permitted by any other
provision of this Agreement or otherwise made on a date other than
the last day of the applicable Interest Period, any default in
payment or prepayment of the principal amount of any Loan by the
Company or an Eligible Subsidiary or any part thereof or interest
accrued thereon, as and when due and payable (at the due date
thereof, by irrevocable notice of prepayment or otherwise), or the
occurrence of any Event of Default, including, but not limited to,
any loss or expense sustained or incurred or to be sustained or
incurred in liquidating or employing deposits from third parties
acquired to effect or maintain such Loan or any part thereof as a
Fixed Rate Loan. Such loss or expense shall include, without
limitation, an amount equal to the excess, if any, as determined by
each Bank of (i) its cost of obtaining the funds for the Loan being
paid, prepaid or converted or not borrowed, refinanced, converted or
renewed (based on the Adjusted CD Rate, Eurocurrency Rate or LIBOR
applicable thereto) for the period from the date of such payment,
prepayment or conversion or failure to borrow, refinance, convert or
renew to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow, refinance, convert or renew, the
Interest Period for such Loan which would have commenced on the date
of such failure to borrow, refinance, convert or renew) over (ii) the
amount of interest (as determined by such Bank) that would be
realized by such Bank in reemploying the funds so paid, prepaid or
converted or not borrowed, refinanced, converted or renewed by making
a Loan of the same type in such principal amount and with a maturity
comparable to such period. Each Bank shall deliver a certificate to
the Company or the applicable Eligible Subsidiary after any such loss
or expense is sustained or incurred setting forth the amount
necessary to indemnify such Bank therefor, and setting forth in
reasonable detail the basis for, and calculations of, such amount,
which certificate shall be prima facie evidence of the facts set
forth in such certificate, and the Company or the applicable Eligible
Subsidiary shall pay to such Bank, within ten (10) days after
delivery of such certificate, the amount shown as due in such
certificate.
(e) If, as of the last Business Day of any fiscal quarter, the
sum of (i) the aggregate outstanding principal amount of Revolving
Loans made pursuant to Section 2.01(a) and (ii) the Letter of Credit
Obligations exceeds the Aggregate Revolving Commitment, then the
Company shall make a mandatory prepayment of the Revolving Loans in
an amount sufficient to eliminate such excess.
SECTION 2.12. Pro Rata Treatment; Funds; Manner of Payment and
Prepayment; Net Payments.
(a) Each Borrowing under Section 2.01, each refinancing of a
Borrowing of a Revolving Loan (or portion thereof) or of a
Eurocurrency Loan (or portion thereof) under Sections 2.08 and 2.09,
each payment or prepayment of principal of and interest on the Notes
and each payment of the fees specified in Section 2.15 hereof, shall
be made or applied among the Banks pro rata in accordance with each
Bank's Applicable Percentage (except as otherwise provided in Section
2.13). Each Bank agrees to share with the other Banks any payment
(including, without limitation, pursuant to Section 10.02 hereof) or
prepayment of its Notes hereunder so as to ensure such pro rata
treatment. Unless otherwise specified herein, each Loan, each
payment or prepayment of principal of and interest on the Notes and
each payment of the Commitment Fee and any other fees set forth in
Section 2.15 shall be made by the Company (or applicable Eligible
Subsidiary) in immediately available funds to the Agent not later
than 12:00 noon, Chicago time, on the date on which such amount is
due and payable. Each payment or prepayment of principal, interest
or any other amount due with respect to an Absolute Rate Loan shall
be made by the Company in immediately available funds to the
applicable Bank (or, if a Default or Event of Default shall have
occurred and be continuing, to the Agent for the account of the
applicable Bank) on the date on which such amount is due and payable.
(b) All sums payable by the Company and the Eligible
Subsidiaries whether in respect of principal, interest, fees or
otherwise shall be paid without deduction for any present and future
taxes, levies, imposts, deductions, charges or withholdings imposed
on the Banks or any Eurodollar Office other than in respect of taxes
on the overall net income of such Bank or Eurodollar Office imposed
by the jurisdiction under the laws of which such Bank or Eurodollar
Office is organized or located (collectively, "Taxes"), which amounts
shall be paid by the Company and the Eligible Subsidiaries as
provided in subsection (c) below. The Company and the Eligible
Subsidiaries will pay each Bank the amounts necessary such that the
net amount of the principal, interest, fees or other sums received
and retained by each Bank is not less than the amount payable under
this Agreement.
(c) If: (a) the Company or an Eligible Subsidiary or any other
Person is required by law to make any deduction or withholding on
account of any such tax or other amount from any sum paid or
expressed to be payable by the Company or an Eligible Subsidiary to
any Bank under this Agreement; or (b) any party to this Agreement (or
any Person on its behalf) other than the Company or an Eligible
Subsidiary is required by law to make any deduction or withholding
from, or (other than on account of tax on the overall net income of
that party) any payment on or calculated by reference to the amount
of, any such sum received or receivable by any Bank under this
Agreement:
(i) the Company or such Eligible Subsidiary shall notify
the Agent, of any such requirement or any change in any such
requirement as soon as the Company or such Eligible Subsidiary
becomes aware of it;
(ii) the Company or such Eligible Subsidiary shall pay any
such tax or other amount before the date on which penalties
attached thereto become due and payable, such payment to be made
(if the liability to pay is imposed on the Company or such
Eligible Subsidiary) for its own account or (if that liability
is imposed on any party to this Agreement) on behalf of and in
the name of that party;
(iii) the sum payable by the Company or such Eligible
Subsidiary in respect of which the relevant deduction,
withholding or payment is required shall (except, in the case of
any such payment, to the extent that the amount thereof is not
ascertainable when that sum is paid) be increased to the extent
necessary to ensure that, after the making of that deduction,
withholding or payment, that party receives on the due date and
retains (free from any liability in respect of any such
deduction, withholding or payment) a sum equal to that which it
would have received and so retained had no such deduction,
withholding or payment been required or made; and
(iv) within thirty (30) days after payment of any sum from
which the Company or such Eligible Subsidiary is required by law
to make any deduction or withholding, and within thirty (30)
days after the due date of payment of any tax or other amount
which it is required by paragraph (ii) to pay, it shall deliver
to the Agent all such certified documents and other evidence as
to the making of such deduction, withholding or payment as (a)
are satisfactory to other affected parties as proof of such
deduction, withholding or payment and of the remittance thereof
to the relevant taxing or other authority and (b) are required
by any such party to enable it to claim a tax credit with
respect to such deduction, withholding or payment.
(d) A certificate as to any additional amounts payable to any
Bank under this Section 2.12 shall set forth in reasonable detail the
basis for, and calculations of, such additional amounts and be
submitted to the Company and any applicable Eligible Subsidiaries
(with a copy to the Agent) by the applicable Bank promptly upon its
learning thereof and shall be prima facie evidence of the facts set
forth in such certificate.
(e) All payments provided for in this Section 2.12 shall be
made under all circumstances, irrespective of any bilateral or
multilateral payment or clearing agreement that may be in force and
of any restrictions then existing in any jurisdiction and without
regard to the nationality, residence or domicile of any Bank and
without requiring any affidavit or the fulfillment of any other
formality. The obligations of the Company and the Eligible
Subsidiaries under this Section 2.12 shall survive the termination of
this Agreement.
(f) In the event that material new Taxes become applicable to
payments to any Bank after the date hereof, such Bank shall cooperate
with the Company and the Eligible Subsidiaries to minimize such
Taxes, provided, however, that nothing in this Section 2.12(f) shall
obligate any Bank to take any action which such Bank, in its sole
discretion, determines to be prejudicial to its rights and interests
hereunder.
SECTION 2.13. Other Events.
(a) In the event that any introduction of or change in any
applicable law, rule, regulation, condition, directive,
administration or interpretation thereof, including any request,
guideline or policy (whether or not having the force of law and
including, without limitation, Regulation D promulgated by the Board)
as now and from time to time hereafter in effect, (but without
duplicating the effect of any such change already specifically
included in the calculation of the interest rates applicable to the
Loans), by any authority charged with the administration or
interpretation thereof:
(i) subjects any Bank to any tax, duty or other
charge or assessment with respect to its Loans or Notes, or its
Letters of Credit or any portion thereof (other than any tax on
the overall net income of such Bank imposed by the United States
of America or by any other jurisdiction in which such Bank is
qualified to do business or is doing business or any political
subdivision or taxing authority therein); or
(ii) changes the basis of taxation of payments to any Bank
of principal of or interest on its Revolving Loans, its
Eurocurrency Loans or its Absolute Rate Loans, or any commitment
hereunder, or any portion thereof, or in respect of any other
amounts due under this Agreement (other than any tax measured by
or based upon the overall net income of such Bank imposed by the
United States of America or by any other jurisdiction in which
such Bank is qualified to do business or is doing business or
any political subdivision or taxing authority therein); or
(iii) imposes, modifies or deems applicable any reserve
or deposit requirements against any assets held by, deposits
with or for the account of, or loans or commitments by, an
office of any Bank in connection with obligations of any Bank
hereunder; or
(iv) imposes upon any Bank or any interbank market any
other condition with respect to any amount paid or payable to or
by any Bank pursuant to this Agreement; and the result of any of
the foregoing is to increase the cost to any Bank, in its
reasonable determination and in accordance with its customary
lending practices with respect to loan arrangements of a similar
type as that contemplated by this Agreement (as such practices
are modified from time to time by such Bank, in its sole
discretion), of maintaining its Loan or Loans or its Letters of
Credit or maintaining its commitments with respect thereto or to
reduce the amount of any payment receivable by any Bank with
respect thereto or to require any Bank to make any payment on or
calculated by reference to the gross amount of any sum received
by it with respect thereto, in each case by an amount which such
Bank in its reasonable judgment deems material, then:
(A) such Bank shall promptly notify the Company and
any affected Eligible Subsidiary and the Agent in writing
of the happening of such event;
(B) such Bank shall promptly deliver to the Company
and any affected Eligible Subsidiary a certificate stating
the amount of such increased cost (without duplication),
reduction or payment; and
(C) the Company or the affected Eligible Subsidiary
shall pay to such Bank, within ten (10) days after delivery
of the certificate referred to in clause (B) above, such an
amount or amounts as will compensate such Bank for such
additional cost, reduction or payment; provided, however,
that the Company shall not be required to pay any
additional amounts pursuant to this Section 2.13 for any
such increased cost or reduction incurred more than 90 days
prior to such Bank's demand for payment unless such
increased cost or reduction is incurred pursuant to any
introduction or change in any law, rule, regulation,
condition, directive, administration or interpretation
thereof that has retroactive effect, and then only to the
extent of such effect.
(b) No failure on the part of any Bank to demand compensation
under subsection (a) above on any one occasion shall constitute a
waiver of its right to demand such compensation on any other
occasion. The protection of this Section 2.13 shall be available to
each Bank regardless of any possible contention of the invalidity or
inapplicability of any law, regulation or other condition which shall
give rise to any demand by such Bank for compensation hereunder.
Nothing in this Section 2.13(b) shall be construed to give the
Company or the Eligible Subsidiaries the right to compel any Bank to
contest the validity or applicability of any such law, regulation or
other condition. For purposes of this Section 2.13, LIBOR Loans or
Eurocurrency Loans shall be deemed to constitute Eurocurrency
Liabilities and as such shall be deemed to be subject to any reserve
requirements without benefit of or credit for proration, exceptions
or offsets which may be available from time to time to any Bank under
such Regulation D.
(c) In the event that any introduction of or change in any
applicable law, rule, regulation, condition, request, directive,
administration or interpretation thereof, including any request,
guideline or policy (whether or not having the force of law) relating
to capital adequacy by any authority charged with administration or
interpretation thereof has or would have the effect, in a Bank's
reasonable determination and in accordance with its customary lending
practices with respect to loan arrangements of a similar type as that
contemplated by this Agreement (as such practices are modified from
time to time by such Bank, in its sole discretion), of reducing the
rate of return on such Bank's capital as a consequence of its Loans
or its Letters of Credit, or any portion thereof, to a level below
that which such Bank could have achieved but for such introduction or
change (taking into consideration such Bank's policies with respect
to capital adequacy), then:
(A) such Bank shall promptly notify the Company and
the Agent in writing of the happening of such event;
(B) such Bank shall promptly deliver to the Company a
certificate stating the amount of such reduction; and
(C) the Company shall pay to such Bank, within ten
(10) days after delivery of the certificate referred to in
clause (B) above, such an amount or amounts as will
compensate such Bank for such reduction; provided, however,
that the Company shall not be required to pay any
additional amounts pursuant to this Section 2.13 for any
such increased cost or reduction incurred more than 90 days
prior to such Bank's demand for payment unless such
increased cost or reduction is incurred pursuant to any
introduction or change in any law, rule, regulation,
condition, directive, administration or interpretation
thereof that has retroactive effect, and then only to the
extent of such effect.
(d) The Company further agrees to pay each Bank, upon
presentation of the certificate described in clause (e) below, so
long as such Bank shall be required to maintain reserves with respect
to liabilities or assets consisting of or including Eurocurrency
Liabilities (as defined in Regulation D) and without duplication of
any other amounts due under this Section 2.13, additional interest on
the principal amount of each Eurocurrency or LIBOR Loan of said Bank
from the date of such Loan until the principal amount is paid in
full, payable on the same date interest is payable on LIBOR Loans, at
a rate per annum equal at all times during the applicable Interest
Period to (x) the rate obtained by dividing LIBOR for such Interest
Period by a percentage equal to 100% minus the reserve percentage
applicable to Eurocurrency Liabilities under Regulation D (or if more
than one such percentage is so applicable, minus the daily average
for such percentage for those days in such Interest Period during
which any such percentage shall be so applicable) for such Bank minus
(y) LIBOR for such Interest Period.
(e) A certificate of any Bank claiming compensation under this
Section 2.13 setting forth the additional amount or amounts to be
paid to it hereunder shall set forth in reasonable detail the basis
for, and calculations of, such amount or amounts, and shall be prima
facie evidence of the facts set forth therein if such amount or
amounts are calculated reasonably and in good faith. In determining
such amount or amounts, such Bank shall use reasonable averaging and
attribution methods. Each Bank agrees to cooperate with the Company
to minimize any amount payable pursuant to this Section 2.13;
provided, however, that nothing in this Section 2.13 shall obligate
any Bank to take any action which such Bank, in its sole discretion,
determines to be prejudicial to its rights and interests hereunder.
SECTION 2.14. Change in Legality.
(a) Notwithstanding anything to the contrary contained
elsewhere in this Agreement, if any change in law or regulation or in
the interpretation thereof by any Governmental Authority charged with
the administration thereof shall make it unlawful for such Bank to
make or maintain any LIBOR Loan or Eurocurrency Loan or to give
effect to its obligations as contemplated hereby with respect to any
LIBOR Loan or Eurocurrency Loan, then, by written notice to the
Company, any affected Eligible Subsidiary and the Agent by such Bank,
such Bank may:
(i) declare that LIBOR Loans or Eurocurrency Loans, as the
case may be, will not thereafter be made by such Bank hereunder,
whereupon the Company and the Eligible Subsidiaries shall be
prohibited from requesting LIBOR Loan or Eurocurrency Loans from
such Bank hereunder; and
(ii) require that all outstanding LIBOR Loans or
Eurocurrency Loans made by it be forthwith converted into
Alternate Base Rate Loans, in which case the Company or the
affected Eligible Subsidiary shall pay to such Bank on the date
of such conversion all interest accrued on such LIBOR Loan or
Eurocurrency Loan to such date and the amounts payable pursuant
to Section 2.11(d) hereof.
(b) For purposes of this Section 2.14, a notice to the Company
or an Eligible Subsidiary by any Bank pursuant to paragraph (a) above
shall be effective on the date of receipt by the Company or an
Eligible Subsidiary.
(c) Each Bank agrees to designate a different office of such
Bank as its lending office for LIBOR Loan or Eurocurrency Loans or
take other appropriate action if such designation or action will
effect compliance with the law or regulation or interpretation
thereof invoking the provisions of this Section 2.14; provided that
such designation or action need not be made or taken if, in the
opinion of such Bank, it would result in any material additional
costs, expenses or risks to such Bank that are not reimbursed by the
Company or an Eligible Subsidiary pursuant hereto or be deemed by
such Bank, in its sole discretion, to in any other material respect
be prejudicial to such Bank.
(d) If any Bank gives notice pursuant to subsection (a) of this
Section 2.14 of its inability to make LIBOR Loans or Eurocurrency
Loans, then no portion of any LIBOR Loans or Eurocurrency Loans
thereafter requested by the Company shall be allocated to such Bank,
and such Bank shall purchase participations in the Alternate Base
Rate Loans and/or Adjusted CD Rate Loans made by the other Banks
hereunder, or if no such Loans are outstanding, shall make an
Alternate Base Rate Loan with the same interest period as such LIBOR
Loan or Eurocurrency Loan, in an amount sufficient to cause each
Bank, at all times, to have Loans outstanding in an amount equal to
the product of such Bank's Applicable Percentage and the aggregate
principal amount of all Loans outstanding hereunder.
SECTION 2.15. Fees, Reduction of Commitment.
(a) The Company agrees to pay to the Agent for distribution to
the Banks a commitment fee (the "Commitment Fee") on the average
daily unused portion of the Aggregate Revolving Commitment and the
Aggregate Eurocurrency Commitment (treating the Dollar Amount of the
Letter of Credit Obligations as a usage of the Aggregate Revolving
Commitment), at the rate set forth in the chart below. For purposes
of this Section 2.15, Absolute Rate Loans shall not be deemed usage
of the Commitment of each Bank. The Commitment Fee shall be computed
on the basis of the actual number of days elapsed and a year of
365/366 days, shall accrue from the Effective Date and shall be
payable quarterly, in arrears, on each March 31, June 30, September
30 and December 31, thereafter, commencing on the Effective Date, and
on the Expiration Date.
(b) Commitment Fee. The Commitment Fee shall be subject to
adjustment (upwards or downwards, as appropriate) based on the
applicable Debt/EBITDA Ratio as at the end of any fiscal quarter, as
set forth in the chart below. The Debt/EBITDA Ratio shall be
calculated on a four quarter rolling average basis from financial
statements delivered by the Company pursuant to Section 5.01. The
adjustment, if any, to the Commitment Fee shall be effective on the
fifth Business Day after the delivery of such financial statements.
If the Company shall at any time fail to timely furnish to the Banks
the financial statements required to be delivered pursuant to Section
5.01, the maximum Commitment Fee shall apply until delivery of the
financial statements. Notwithstanding the foregoing, if at the end
of any fiscal quarter, the ratio of Net Income Available for Fixed
Charges to Fixed Charges is less than 1.5 to 1.0, the maximum
Commitment Fee shall apply until the financial statements delivered
at the end of any fiscal quarter evidence a ratio equal to or greater
than 1.5 to 1.0.
Ratio of Consolidated Commitment
Funded Debt to EBITDA Fee
Less than 2.5 15 b.p.
Less than 3.0 but equal to or greater
than 2.5 17.5 b.p.
Greater than or equal to 3.0 25 b.p.
The Company agrees to pay to the Agent, for the Agent's sole
account, the agent's fees set forth in that certain letter agreement
between the Company and the Agent dated October 6, 1995 (the "Commitment
Letter"). Such agent's fees shall be due and payable on the dates and in
the amounts set forth in the Commitment Letter.
(c) The Company shall have the right, from time to time, upon
at least three (3) Business Days' notice to the Agent, to terminate,
or permanently reduce the unused portion of the Aggregate Revolving
Commitment or Aggregate Eurocurrency Commitment, as the case may be,
by an amount not less than $1,000,000 and integral multiples of
$500,000. Upon such reduction, each Bank's Revolving Commitment or
Eurocurrency Commitment, as the case may be, shall be permanently
reduced by an amount equal to the product of such Bank's Applicable
Percentage and the amount by which the Aggregate Revolving Commitment
or Aggregate Eurocurrency Commitment, as the case may be, is reduced.
SECTION 2.16. Increase of Commitments.
(a) The Company may from time to time, on the terms set forth
below, request that the Aggregate Commitment hereunder be increased
to an amount not to exceed $125,000,000; provided, however, that (i)
no increase in the Aggregate Commitment shall be made at a time when
a Default or Event of Default shall have occurred and be continuing,
or (ii) the Fixed Charge Coverage Ratio shall remain below 1.50 on a
rolling four quarter basis.
(b) In the event of such a requested increase in the Aggregate
Commitment, (i) each of the Banks shall be given the opportunity to
participate in the increased Commitments (x) initially ratably in the
proportions that their respective Commitments bear to the Aggregate
Commitment and (y) to the extent that the requested increase of
Commitments is not fulfilled pursuant to the preceding clause (x),
ratably in the proportion that the respective Commitments of the
Banks desiring to participate in any such increase bear to the total
of the Commitments of the increasing Banks, so long as an increase
under either clause (x) or clause (y) does not cause any Lender's
Commitment to exceed one-third of the new Aggregate Commitment, and
(ii) to the extent that the Banks do not elect so to participate in
such increased Commitments after being afforded an opportunity to do
so, then the Company shall consult with the Agent as to the number,
identity and requested Commitments of additional financial
institutions which the Company may, upon the written consent of the
Agent, which consent shall not be unreasonably withheld, invite to
participate in the Commitments.
(c) No Bank shall have any obligation to increase its
Commitment pursuant to a request by the Company hereunder.
(d) In the event that the Company and one or more of the Banks
(or other financial institutions) shall agree upon such an increase
in the Aggregate Commitment (i) the Company, the Agent and each Bank
or other financial institution increasing its Commitment or extending
a new Commitment shall enter into an amendment to this Agreement
setting forth the amounts of the Commitments, as so increased,
providing that the financial institutions extending new Commitments
shall be Banks for all purposes of this Agreement, and setting forth
such additional provisions as the Agent shall consider reasonably
appropriate and (ii) the Company shall furnish new Notes to each
financial institution that is extending a new Commitment. No such
amendment shall require the approval or consent of any Bank whose
Commitment is not being increased. Upon the execution and delivery
of such amendment as provided above, and upon satisfaction of such
other conditions as the Agent may reasonably specify upon the request
of the financial institutions that are increasing or extending new
Commitments (including the delivery of certificates, evidence of
corporate authority and legal opinions on behalf of the Company),
this Agreement shall be deemed to be amended accordingly.
SECTION 2.17. Removal of Banks. The Company shall be
permitted, from time to time in its discretion, to remove Banks from the
Agreement and reduce the Aggregate Commitment, provided that the Aggregate
Commitment may not be reduced below $60,000,000 as a result of removing
one or more Banks pursuant to this Section, and a Bank may not be removed
from the Agreement at any time an Event of Default exists and remains
uncured or unwaived under the Agreement. If the Company elects to
terminate the Commitment of any Bank, it shall give not less than 14 days
written notice to the Agent and such Bank. On the effective date of such
termination, the Company shall pay to the Agent, for the account of such
Bank, in immediately available funds, an amount equal to all Loans and
other amounts (including accrued interest and fees) owing to such Bank
plus the amounts, if any, owing to such Bank under Section 2.11(d) if such
payment is not made on the last day of the applicable Interest Period.
SECTION 2.18. Letters of Credit. Subject to the terms and
conditions of this Agreement, the Company may obtain Letters of Credit,
from time to time during the period commencing on the date hereof and
ending on the Business Day prior to the Expiration Date. The Company may
request any Bank to issue a Letter of Credit and such Bank may, but is not
required to, issue a Letter of Credit. If no other Bank is willing to
issue a Letter of Credit, First Chicago shall issue such Letter of Credit.
Any Bank issuing a Letter of Credit shall be an Issuer. Nothing herein
contained shall prohibit the Company from obtaining letters of credit
outside of this Credit Agreement.
(a) Types and Amounts. No Issuer (including First Chicago)
shall:
(i) issue any Letter of Credit if the aggregate maximum
amount then available for drawing under Letters of Credit, after
giving effect to the Letter of Credit requested hereunder, shall
exceed any limit imposed by law or regulation upon the Issuer;
(ii) issue any Letter of Credit if, after giving effect
thereto, the sum of (a) the Dollar Amount of the Letter of
Credit Obligations and (b) the aggregate unpaid principal
balance of the Revolving Loans would exceed the Revolving Loan
Commitment;
(iii) issue any Letter of Credit if, after giving
effect thereto, the sum of (a) the Dollar Amount of the Letter
of Credit Obligations and (b) the aggregate unpaid principal
balance of the Revolving Loans, Eurocurrency Loans and Absolute
Rate Loans would exceed the Aggregate Commitment;
(iv) issue any Letter of Credit which has an expiration
date on or after the Expiration Date; or
(v) issue any Letter of Credit if the Dollar Amount of the
Letter of Credit Obligations, after giving effect to the Letter
of Credit requested hereunder, shall exceed $20,000,000.
(b) Conditions. In addition to being subject to the
satisfaction of the conditions contained in Article IV, the
obligation of the Issuer to issue any Letter of Credit is subject to
the satisfaction in full of the following conditions:
(i) the Company shall have delivered to the Issuer, with a
copy to the Agent, at such times and in such manner as the
Issuer may reasonably prescribe such documents and materials as
may be required pursuant to the terms of the proposed Letter of
Credit and the proposed Letter of Credit shall be reasonably
satisfactory to the Issuer as to form and content; and
(ii) as of the Issuance Date, no order, judgment or decree
of any court, arbitrator or Governmental Authority shall purport
by its terms to enjoin or restrain the Issuer from issuing the
proposed Letter of Credit and no law, rule or regulation
applicable to the Issuer and no request or directive (whether or
not having the force of law) from any Governmental Authority
with jurisdiction over the Issuer shall prohibit or request that
the Issuer refrain from the issuance of Letters of Credit
generally or the issuance of such proposed Letter of Credit in
particular.
(c) Procedure for Issuance of Letters of Credit.
(i) The Company shall give the Issuer and the Agent three
(3) Business Days' prior written notice of any requested
issuance of a Letter of Credit (except that, in lieu of such
written notice, the Company may give the Issuer (x) notice of
such request by tested telex or other tested arrangement
satisfactory to the Issuer or (y) telephonic notice of such
request if confirmed in writing by delivery to the Issuer (i)
immediately (A) of a telecopy of the written notice required
hereunder which has been signed by an authorized signatory of
the Company or (B) of a telex containing all information
required to be contained in such written notice and (ii)
promptly (but in no event later than the requested time of
issuance) of a copy of the written notice required hereunder
containing the original signature of an authorized signatory of
the Company). Each such notice (each a "Letter of Credit
Request") shall be irrevocable once the relevant Letter of
Credit is issued and shall specify the stated amount of the
Letter of Credit requested, the Issuance Date (which day shall
be a Business Day) of such requested Letter of Credit, the date
on which such requested Letter of Credit is to expire (which
date shall be a Business Day and shall in no event be on or
after the Expiration Date), the purpose for which such Letter of
Credit is to be issued, and the Person for whose benefit the
requested Letter of Credit is to be issued. Promptly after
receipt thereof, the Agent shall notify each Bank of the
contents of each Letter of Credit Request. At the time such
Letter of Credit Request is made, the Company shall also provide
the Issuer and the Agent with a copy of the form of the Letter
of Credit it is requesting be issued. Such Letter of Credit
Request, to be effective, must be received by the Issuer and the
Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this Section
2.18(c).
(ii) Subject to the terms and conditions of this Section
2.18(c) and provided that the applicable conditions set forth in
Section 4.01(c), Section 4.01(d) and Section 2.18(b) have been
satisfied, the Issuer shall, on the requested Issuance Date,
issue the requested Letter of Credit for the account of the
Company in accordance with the Issuer's usual and customary
business practices.
(iii) An Issuer shall not amend, renew, extend, or permit an
extension of any Letter of Credit unless the requirements of
this Section 2.18(c) are met as if a new Letter of Credit were
being requested and issued.
(d) Reimbursement Obligations.
(i) The Issuer shall promptly notify the Company and the
Agent and each Bank of any draw under a Letter of Credit. The
Company shall reimburse the Agent for the account of the Issuer,
in immediately available funds, for draws under a Letter of
Credit no later than the Business Day next succeeding the date
of the payment by the Issuer. In the case of any draw under a
Letter of Credit in an Alternative Currency, the Company shall
reimburse the Agent for the account of the Issuer on demand at
the Agent's head office (or at such other place as may be
specified by the Agent) the amount in such Alternative Currency
drawn under such Letter of Credit or the equivalent of the
amount in Dollars at the rate of exchange then quoted by the
Agent for the electronic transfer to the place of payment in the
currency in which such draw was made or, if so required by the
Agent, to pay the Agent at its head office in advance, following
a documentary presentation, in Dollars the equivalent of the
amount required to pay the same. If, for any cause whatsoever,
there exists at the time in question no rate of exchange
generally available to the Agent for effective electronic
transfers of the sort provided for above, the Company agrees to
pay the Agent on demand an amount in Dollars equivalent to the
actual cost of settlement of the Issuer's obligation to the
person presenting the applicable draft under the applicable
Letter of Credit, however and whenever such settlement may be
made by the Issuer.
(ii) Any Reimbursement Obligation with respect to any
Letter of Credit shall bear interest from the date of the
relevant draws under the relevant Letter of Credit at the
interest rate for Borrowings not paid at maturity as calculated
in accordance with Section 2.07(a).
(iii) Any action taken or omitted to be taken by the Issuer
under or in connection with any Letter of Credit, if taken or
omitted in the absence of willful misconduct or gross
negligence, shall not put the Issuer under any resulting
liability to any Bank or, assuming that the Issuer has complied
with the procedures specified in Section 2.18(c) and such Bank
has not given a notice contemplated by Section 2.18(e) that
continues in full force and effect, relieve such Bank of its
obligations hereunder to the Issuer. In determining whether to
pay under any Letter of Credit, the Issuer shall have no
obligation relative to the Banks, the Agent or the Company other
than to confirm that any documents required to be delivered
under such Letter of Credit appear to comply on their face with
the requirements of such Letter of Credit.
(e) Participation; Receipt of Payments.
(i) Immediately upon issuance or extension or renewal by
an Issuer of any Letter of Credit in accordance with the
procedures set forth in Section 2.18(c), each Bank shall be
deemed to have irrevocably and unconditionally purchased and
received from the Issuer, without recourse or warranty, an
undivided interest and participation equal to its Applicable
Percentage in such Letter of Credit (including, without
limitation, all obligations of the Company with respect thereto)
and any security therefor or guaranty pertaining thereto, if
any; provided, that a Letter of Credit issued by the Issuer
shall not be deemed to be a Letter of Credit for purposes of
this Section 2.18(e) if the Issuer and the Agent shall have
received written notice from any Bank on or before one Business
Day prior to the date of its issuance of such Letter of Credit
that one or more of the conditions contained in Article IV is
not then satisfied, and, in the event the Issuer and the Agent
receive such a notice, there shall be no further obligation on
the part of First Chicago or any Issuer to issue any Letter of
Credit until such notice is withdrawn by that Bank or such
condition has been effectively waived in accordance with the
provisions of this Agreement.
(ii) In the event that an Issuer makes any payment under
any Letter of Credit and the Company shall not have repaid such
amount to the Issuer pursuant to Section 2.18(d), the Issuer
shall promptly notify the Agent and each Bank of such failure,
and each Bank shall promptly and unconditionally pay to the
Agent for the account of the Issuer the Dollar Amount of such
Bank's Applicable Percentage of the unreimbursed amount of any
such payment, and the Company's obligations to repay the Banks
with respect to such amounts shall be deemed to be, and treated
as, a Revolving Loan or Loans which shall bear interest at the
interest rate for Borrowings not paid at maturity as calculated
in accordance with Section 2.07(a) unless and until such amounts
are repaid or refinanced pursuant to Section 2.08. The failure
of any Bank to make available to the Agent, in immediately
available funds, its Applicable Percentage of the unreimbursed
amount of any such payment shall not relieve any other Bank of
its obligation hereunder to make available to the Agent, in
immediately available funds, its Applicable Percentage of the
unreimbursed amount of any payment on the date such payment is
to be made, but no Bank shall be responsible for the failure of
any other Bank to make available to the Agent its Applicable
Percentage of the unreimbursed amount of any payment on the date
such payment is to be made.
(iii) Whenever the Agent or an Issuer receives a payment on
account of a Reimbursement Obligation, including any interest
thereon, it shall promptly pay to each Bank which has funded its
participating interest therein, in immediately available funds,
an amount equal to such Bank's Applicable Percentage thereof.
(iv) The obligations of a Bank to make payments to the
Agent for the account of an Issuer with respect to a Letter of
Credit shall be absolute, unconditional and irrevocable, shall
not be subject to any counterclaim, set-off, qualification or
exception whatsoever and shall be made without any requirement
that the Company satisfy the conditions set forth in Section
4.01.
(f) Payment of Reimbursement Obligations.
(i) The Company agrees to pay to the Agent for the account
of the Issuer the amount of all Reimbursement Obligations,
interest and other amounts payable to the Issuer under or in
connection with any Letter of Credit immediately when due,
irrespective of any claim, set-off, defense or other right which
the Company or any Subsidiary may have at any time against the
Issuer or any other Person, under all circumstances, including
without limitation, any of the following circumstances:
(A) any lack of validity or enforceability of this
Agreement or any of the other documents, instruments or
agreements executed by the Company in connection therewith;
(B) the existence of any claim, setoff, defense or
other right which the Company or any Subsidiary may have at any
time against a beneficiary named in a Letter of Credit or any
transferee of any Letter of Credit (or any Person for whom any
such transferee may be acting), any Issuer, any Bank, or any
other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions
between the Company or any Subsidiary and the beneficiary named
in any Letter of Credit);
(C) any draft, certificate or any other document
presented under the 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
(provided any such draft, certificate or other document appeared
valid on its face when presented to the Issuer);
(D) the surrender or impairment of any security for
the performance or observance of any of the terms of this
Agreement or any of the documents, instruments or agreements
executed by the Company in connection therewith; or
(E) the occurrence of any Default or Event of
Default.
(ii) In the event any payment by the Company received by
the Agent or an Issuer with respect to a Letter of Credit and
distributed to the Banks on account of their participations is
thereafter set aside, avoided or recovered from the Agent or an
Issuer in connection with any receivership, liquidation,
reorganization or bankruptcy proceeding, each Bank which
received such distribution shall, upon demand by the Agent,
contribute to the Agent or such Issuer such Bank's Applicable
Percentage of the amount set aside, avoided or recovered
together with interest at the rate required to be paid by the
Agent or such Issuer upon the amount required to be repaid by
it.
(g) Compensation for Letters of Credit. The Company shall pay
to the Agent, for the ratable account of each Bank, a Letter of
Credit Fee ("Letter of Credit Fee") in respect of the Letter of
Credit then being issued at a rate per annum equal to the LIBOR
Margin on such day times the Dollar Amount on such day (and
recalculated on the first Business Day of each quarter for such
quarter) of the maximum face amount of such Letter of Credit from the
Issuance Date thereof until such Letter of Credit expires or is
terminated. Promptly upon its receipt of such Letter of Credit Fee,
the Agent shall pay to each Bank, in immediately available funds, an
amount equal to such Bank's Applicable Percentage thereof. Any
Issuer shall have the right to receive, for its own account, (i) in
respect of each Letter of Credit issued by it, a fee in the amount of
12.8 b.p. per annum multiplied by the Dollar Amount of the maximum
face amount of such Letter of Credit ("Issuer's Fee"), and (ii) all
of its reasonable and customary costs of issuing and servicing the
Letters of Credit. The Letter of Credit Fee and the Issuer's Fee
shall begin to accrue on the Issuance Date and shall be payable
quarterly in arrears.
III. REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Banks and each
Eligible Subsidiary shall be deemed, by the execution and delivery of its
Election to Participate, to also have represented and warranted to the
Banks as to the matters set forth in Article III subsections (m) and (n)
regarding itself:
(a) Organization; Corporate Powers. The Company (i) is a
corporation duly organized, validly existing and in good standing
under the laws of the state of its incorporation; (ii) has the
corporate power and authority to own its property and assets and to
carry on its business substantially as now conducted; (iii) is duly
qualified to do business and is in good standing in every
jurisdiction in which the failure to do so would expose the Company
to a material penalty or to any inhibition which would materially
adversely affect the ability of the Company either to carry on its
business substantially as now conducted or to perform its obligations
under this Agreement and the Notes; and (iv) has the corporate power
to execute, deliver and perform this Agreement, to borrow hereunder
and to execute and deliver the Notes; and each of the Subsidiaries
(other than those organized under the laws of a jurisdiction outside
of the United States of America but including all Eligible
Subsidiaries) is duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation.
(b) Authorization. The execution, delivery and performance of
this Agreement, and the execution and delivery of the Notes (i) have
been duly authorized by all requisite corporate action on the part of
the Company and (ii) will not (A) violate (1) any provision of law
applicable to the Company, which violation would materially and
adversely affect the ability of the Company either to carry on its
business substantially as now conducted or to perform its obligations
under this Agreement or the Notes, (2) the Articles of Incorporation
or By-laws of the Company, (3) any order of any court or agency of
government applicable to the Company or (4) any indenture, agreement
or other instrument to which the Company is a party or by which the
Company or any of its property or assets is bound, which violation
would materially and adversely affect the ability of the Company
either to carry on its business substantially as now conducted or to
perform its obligations under this Agreement or the Notes, (B) be in
conflict with, result in a breach of or constitute (with due notice
or lapse of time or both) a default under any such indenture,
agreement or other instrument, which conflict, breach or default
would materially and adversely affect the ability of the Company
either to carry on its business substantially as now conducted or to
perform its obligations under this Agreement or the Notes, or (C)
result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever upon any property or assets of
the Company. The Agreement is, and the Revolving Notes are, legal,
valid and binding obligations of the Company enforceable in
accordance with their respective terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
generally, (ii) the enforceability thereof may be limited by
equitable principles of general applicability, and (iii) the
enforceability thereof may be limited by public policy limitations
upon the availability of certain remedies or the enforcement of
certain types of obligations.
(c) Government Approval. No action, consent or approval of, or
registration or filing with, or any other action by any Governmental
Authority is required on behalf of the Company in connection with the
execution, delivery and performance by the Company of this Agreement,
the Borrowings hereunder or the execution and delivery of the Notes
other than such as have been (or, will be, when required) made or
obtained. No consent, approval or authorization of stockholders is
required in connection with any of the foregoing other than such as
have been (or will be, when required) obtained.
(d) Financial Statements. The Company has heretofore furnished
to the Banks a consolidated balance sheet of the Company and its
Subsidiaries as of October 3, 1997, and the consolidated statement of
operations (income statement) and consolidated statement of cash
flows for the 12-month period then ended, certified by KPMG Peat
Marwick LLP, independent accountants and an unaudited consolidated
balance sheet and statement of operations and statement of cash flows
of the Company and its Subsidiaries dated as of October 3, 1997 and
for the fiscal year then ended. Such financial statements present
fairly the consolidated financial condition and results of operations
of the Company and its Subsidiaries as of the dates and for the
periods indicated (subject to normal audit and year-end adjustments
in the case of the unaudited statements). All such financial
statements were prepared in accordance with GAAP applied on a
consistent basis as of the date of such financial statements.
(e) No Material Adverse Change. Since October 3, 1997, there
has been no material adverse change in the business, properties or
condition, financial or otherwise, of the Company and the
Subsidiaries taken as a whole which might reasonably be expected to
impair the ability of the Company or the Eligible Subsidiaries to
perform their obligations under this Agreement or the Notes.
(f) Title to Properties. All material assets of the Company
and the Subsidiaries are free and clear of all Liens except Permitted
Liens and Liens permitted under Section 6.01(b).
(g) Litigation. Except as described on Schedule 1, there are
no actions, suits or proceedings at law or in equity or by or before
any Governmental Authority now pending or, to the knowledge of the
officers and directors of the Company, threatened against or
affecting the Company or any of the Subsidiaries or any property or
rights of the Company or any of its Subsidiaries which might be
reasonably expected materially to adversely affect the ability of the
Company and its Subsidiaries, taken as a whole, to carry on business
substantially as now being or heretofore conducted or to materially
adversely affect the financial condition of the Company and its
Subsidiaries taken as a whole.
(h) Tax Returns. The Company and the Subsidiaries have filed
or caused to be filed all federal, state and local tax returns which
are required to be filed and have paid or caused to be paid all taxes
as shown on such returns or on any assessment received by it or by
any of them to the extent that such taxes have become due, except
taxes the amount, applicability or validity of which are being
contested in good faith by appropriate proceedings and with respect
to which the Company or any of the Subsidiaries, as the case may be,
has set aside on its books adequate reserves, in the opinion of the
Company or such Subsidiary, as the case may be. The federal income
tax returns of the Company and its Subsidiaries have been examined by
the IRS for all years through the Company's fiscal year ending
September 30, 1994.
(i) Employee Benefit Plans. The Company and all ERISA
Affiliates, and Plan fiduciaries indemnified by them who are
employees of the Company or an ERISA Affiliate have complied with the
responsibilities, obligations, and duties imposed upon them by ERISA
and the IRC and the rules and regulations promulgated thereunder with
respect to any Plan, where the failure so to comply might be
reasonably expected materially to adversely affect the ability of the
Company and its ERISA Affiliates, taken as a whole, to carry on
business substantially as now being or heretofore conducted, or to
materially adversely affect the financial condition of the Company
and its ERISA Affiliates taken as whole. Except as disclosed in
Schedule 2 neither the Company nor any ERISA Affiliate maintains or
contributes to any employee welfare benefit plan within the meaning
of Section 3(l) of ERISA which provides benefits to employees after
termination of employment other than as required by Section 601 of
ERISA. No Benefit Plan has incurred any accumulated funding
deficiency (as defined in Sections 302 (a)(2) of ERISA or 412(a) of
the IRC) whether or not waived. Neither the Company nor any ERISA
Affiliate has taken or failed to take any action which would
constitute or result in a Termination Event which might be reasonably
expected materially to adversely affect the ability of the Company
and its ERISA Affiliates, taken as a whole, to carry on business
substantially as now being or heretofore conducted, or to materially
adversely affect the financial condition of the Company and its ERISA
Affiliates taken as a whole. Neither the Company nor any ERISA
Affiliate has incurred with respect to any Benefit Plan liability to
the PBGC or any Multiemployer Plan under Title IV of ERISA which
remains outstanding other than the payment of premiums to the PBGC,
and there are no premium payments which have become due which are
unpaid. Neither the Company nor any ERISA Affiliate has failed to
make a required contribution or payment to a Multiemployer Plan.
Neither the Company nor any ERISA Affiliate has failed to make a
required installment or any other required payment under Section 412
of the IRC on or before the due date for such installment or other
payment. Neither the Company nor any ERISA Affiliate is required to
provide security to a Benefit Plan under Section 401(a) (29) of the
IRC due to a Plan amendment that results in an increase in current
liability for the plan year.
(j) Margin Stock. (i) Neither the Company nor any of its
Subsidiaries is engaged in the business of purchasing or carrying
"margin stock," as defined in Regulation U of the Board of Governors
of the Federal Reserve System as from time to time in effect; (ii) no
proceeds of any Loan, or any portion thereof, will be used by the
Company or any of its Subsidiaries to purchase or carry any such
"margin stock" in violation of Regulation G, U, T or X of the Board
of Governors of the Federal Reserve System as from time to time in
effect, and (iii) the value of all such "margin stock" owned by the
Company and its Subsidiaries does not and will not at any time
constitute more than twenty-five percent (25%) of the value of the
total assets of the Company and its Subsidiaries.
(k) Environmental Laws. Except as set forth on Schedule 3
attached hereto and made a part hereof, the operations of the Company
and each Subsidiary comply in all material respects with all
applicable environmental, health and safety Requirements of Law,
where the failure to so comply might be reasonably expected
materially to impair the right of the Company and its Subsidiaries,
taken as a whole, to carry on business substantially as now being or
heretofore conducted, or materially adversely affects the financial
condition of the Company and its Subsidiaries taken as a whole. To
the Company's knowledge, neither the Company, any Subsidiary nor any
of their present assets or operations or their past assets or
operations, are subject to any order, agreement, proceeding or
investigation by any Governmental Authority or other Person
respecting any environmental, health or safety Requirements of Law
which might be reasonably expected materially to adversely affect the
ability of the Company and its Subsidiaries, taken as a whole, to
carry on business substantially as now being or heretofore conducted,
or materially adversely affect the financial condition of the Company
and its Subsidiaries taken as a whole.
(l) Compliance With Laws. The Company and its Subsidiaries
have complied in all material respects with all applicable statutes,
rules, regulations, orders and restrictions of any domestic or
foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the
ownership of their respective properties.
(m) Eligible Subsidiary Organization and Corporate Powers.
Each Eligible Subsidiary (i) is a corporation duly organized, validly
existing and in good standing under the laws of the state or country
of its incorporation; (ii) has the corporate power and authority to
own its property and assets and to carry on its business
substantially as now conducted; and (iii) has the corporate power to
execute, deliver and perform this Agreement, to borrow hereunder and
to execute and deliver its Election to Participate and its
Eurocurrency Notes.
(n) Binding Effect. The Election to Participate and the
Eurocurrency Note executed by such Eligible Subsidiary are legal,
valid and binding obligations of such Eligible Subsidiary enforceable
in accordance with their respective terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting the enforcement of creditors' rights
generally, (ii) the enforceability thereof may be limited by
equitable principles of general applicability, and (iii) the
enforceability thereof may be limited by public policy limitations
upon the availability of certain remedies or the enforcement of
certain types of obligations.
IV. CONDITIONS OF LENDING
The obligations of the Banks to make Loans or to issue Letters
of Credit hereunder shall be subject to the following conditions
precedent:
SECTION 4.01. All Borrowings. On the date of each Borrowing or
the Issuance Date of each Letter of Credit by the Company or any Eligible
Subsidiary hereunder, including the initial Borrowing, and each
refinancing of any Borrowing (or portion thereof) pursuant to Sections
2.08 and 2.09:
(a) In the case of (i) the initial Borrowing and each
refinancing of any Borrowing (or portion thereof) pursuant to
Sections 2.08 and 2.09, the Agent shall have received a Notice of
Borrowing or a Notice of Refinancing, as the case may be, as required
by Sections 2.08 and 2.09, respectively.
(b) The unborrowed portion (after giving effect to all
Borrowings and repayments on such day) of the Aggregate Commitment
shall not be less than the aggregate face amount (plus accrued
interest, if any) of the outstanding short-term unsecured debt
obligations (interest bearing or discounted) of the Company or its
Subsidiaries having maturities of 270 days or less ("Wisconsin
Commercial Paper") excluding in any case, debt obligations under this
Agreement and foreign currency borrowings by Subsidiaries.
(c) The representations and warranties set forth in Article III
hereof shall be true and correct with the same effect as though made
on and as of such date (except with respect to the refinancing of any
Borrowing (or portion thereof), the representation and warranty set
forth in Article III(e) hereof).
(d) The Company and, if applicable, the appropriate Eligible
Subsidiary shall be in compliance with all the terms and provisions
contained herein on its part to be observed or performed, and at the
time of and immediately after such Borrowing or refinancing or the
Issuance Date of each Letter of Credit no Default or Event of Default
shall have occurred and be continuing.
Each Notice of Borrowing or Notice of Refinancing hereunder, and each
Competitive Bid Quote Request, shall be deemed to be a representation and
warranty by the Company and, if applicable, the appropriate Eligible
Subsidiary on the date of such Notice of Borrowing or Notice of
Refinancing, or Competitive Bid Quote Request as applicable, as to the
matters specified in paragraphs (b), (c) and (d) of this Section 4.01.
SECTION 4.02. Initial Borrowing. In addition to the conditions
described in Section 4.01 above, the obligation of each Bank to make its
initial Revolving Loan hereunder on the occasion of the initial Borrowing
by the Company is subject to the condition precedent that the Agent shall
have received on or before the day of such initial Borrowing all of the
following, each fully executed and in form and substance satisfactory to
the Agent and in sufficient copies for each Bank, if applicable, and this
Agreement shall become effective on the date such condition precedent is
satisfied:
(i) This Agreement, with all Exhibits and Schedules completed
in form and substance reasonably satisfactory to the Agent;
(ii) Revolving Loan Notes, Eurocurrency Notes and Competitive
Bid Notes of the Company payable to the order of each of the
Banks, respectively; and
(iii) Signed copies of a certificate of the Secretary or an
Assistant Secretary or other appropriate officer of the Company,
in form and substance acceptable to the Agent, certifying as of
the Effective Date (A) the names and true signatures of the
officers of the Company authorized to sign this Agreement, the
Revolving Loan Notes, the Eurocurrency Notes and the Competitive
Bid Notes, (B) that the By-laws of the Company have remained
unchanged since November 29, 1995, and (C) that the Articles of
Incorporation of the Company have not been amended since
November 29, 1995. The Agent may conclusively rely on such
certificate of the Company until the Agent shall receive a
further certificate of the Secretary or an Assistant Secretary
of the Company cancelling or amending the prior certificate of
the Company and submitting the signatures of the officers named
in such further certificate.
SECTION 4.03. Initial Borrowing by Eligible Subsidiaries. In
addition to the conditions described in Section 4.01 above, the obligation
of each Bank to make its initial Eurocurrency Loan hereunder to an
Eligible Subsidiary is subject to the condition precedent that the Company
shall have satisfied all the conditions precedent in Section 4.02 and that
the Agent shall have received on or before the day of the initial
Borrowing by such Eligible Subsidiary all of the following, each duly
executed and in form and substance satisfactory to the Agent and in
sufficient copies for each Bank, if applicable:
(i) Eurocurrency Notes executed by such Eligible Subsidiary,
payable to the order of each of the Banks;
(ii) All documents reasonably requested by the Agent relating to
the existence of such Eligible Subsidiary, the corporate
authority for and the validity of the Election to Participate of
such Subsidiary, this Agreement and its Eurocurrency Note,
including without limitation, documents of the type listed in
Section 4.02(iii);
(iii) An executed Election to Participate from such Eligible
Subsidiary; and
(iv) A certificate of the President or Vice President of such
Eligible Subsidiary certifying that as of the initial Borrowing
Date for such Eligible Subsidiary, the representations and
warranties set forth in Article III with respect to such
Eligible Subsidiary are true and correct as of such date.
SECTION 4.04. Absolute Rate Loans. In addition to the
conditions described in Sections 4.01 and 4.02 above, the Company shall
deliver to a Bank with the first Absolute Rate Loan made by such Bank, a
Competitive Bid Note of the Company payable to the order of such Bank.
V. AFFIRMATIVE COVENANTS
The Company covenants and agrees with each of the Banks that, so
long as this Agreement shall remain in effect or the Loans, Letter of
Credit Obligations, Commitment Fee, interest, fees or any other expenses
or amounts payable hereunder shall be unpaid, unless the Majority Banks
shall otherwise consent in writing, it will, and will cause each of its
Subsidiaries to:
SECTION 5.01. Financial Statements. In the case of the
Company, furnish to the Agent with sufficient copies for each Bank:
(a) within ninety (90) days after the end of each fiscal year
of the Company, a consolidated balance sheet of the Company and its
Subsidiaries as of the close of such fiscal year and consolidated
statements of operations (income statement) and cash flows of the
Company and its Subsidiaries for such fiscal year, all the foregoing
consolidated financial statements to be certified by KPMG Peat
Marwick LLP or another nationally recognized firm of independent
accountants, and all certified as accurate by a Financial Officer of
the Company;
(b) (i) within forty-five (45) days after the end of each of
the first three fiscal quarters of each fiscal year of the Company, a
consolidated balance sheet of the Company and its Subsidiaries as of
the close of such fiscal quarter and consolidated statement of
operations and a statement of cash flows of the Company and its
Subsidiaries as of the end of each such fiscal quarter for the then
elapsed portion of such fiscal year, all certified as accurate by a
Financial Officer of the Company (subject to audit and normal
year-end adjustments) and (ii) within forty-five (45) days (or ninety
(90) days with respect to the fourth quarter) after the end of each
of the four fiscal quarters of each fiscal year of the Company, a
consolidating "key income statement figures report" of the Company
and its Subsidiaries for the portion of such fiscal year elapsed
through the end of each such fiscal quarter, prepared on a basis
consistent with such report of the Company and its Subsidiaries dated
October 3, 1997 and certified as accurate by a Financial Officer of
the Company;
(c) promptly after the sending or filing thereof, copies of all
reports which the Company or any of its Subsidiaries sends to any of
its stockholders which the Company or any of its Subsidiaries files
with the Securities and Exchange Commission or any national
securities exchange, and copies of all 10-K, 10-Q and 8-K reports and
registration statements which the Company or any of the Subsidiaries
files with the Securities and Exchange Commission or any national
securities exchange;
(d) concurrently with the reports required to be delivered
pursuant to Section 5.01(a), a report by the Company's independent
accountants to the effect that, in connection with their examination
of such annual consolidated financial statements, (i) nothing came to
their attention that caused them to believe that the Company or any
of its Subsidiaries was not in compliance with the covenants
contained in Article V or VI and (ii) they have examined the
schedules to such reports containing calculations of financial
covenants required to be performed or observed pursuant to Sections
6.01 through 6.08, and, in their opinion, the information set forth
in such schedules is fairly stated in all material respects in
relation to the annual consolidated financial statements taken as a
whole;
(e) concurrently with the reports required to be delivered
pursuant to Sections 5.01(a) and 5.01(b), a certificate of the
Company executed by a Financial Officer of the Company to the effect
that he has made a review of the activities of the Company and the
Company's Subsidiaries for such fiscal period and of its performance
and observance of the covenants contained in Articles V and VI, that
to the best of his knowledge, based on such review, the Company is
not in default in the performance or observance of any such covenants
(showing the calculations upon which such conclusions are based) and
that to the best of his knowledge no Default or Event of Default has
occurred and is continuing or, if in his opinion a Default or an
Event of Default has occurred and is continuing, specifying the
nature and extent thereof known to him; and
(f) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Company and the Subsidiaries as any Bank may reasonably request.
SECTION 5.02. Litigation Notice. Give the Agent notice,
promptly, of any action, suit or proceeding at law or in equity or by or
before any Governmental Authority which might be reasonably expected
materially to adversely affect the ability of the Company and the
Subsidiaries, taken as a whole, to carry on business substantially as now
being conducted or to affect materially adversely the financial condition
of the Company and the Subsidiaries taken as a whole and of any
combination of such actions, suits or proceedings which taken together
might be reasonably expected materially to impair such right or to affect
materially adversely such financial condition.
SECTION 5.03. ERISA.
(a) Deliver to the Agent, at the Company's expense, the
following information and notices as soon as possible, and in any
event:
(i) within ten (10) Business Days after the Company or any
ERISA Affiliate knows or has reason to know that a Termination
Event has occurred which might be reasonably expected materially
to adversely affect the ability of the Company and its
Subsidiaries, taken as a whole, to carry on business
substantially as now being or heretofore conducted, or to
materially adversely affect the financial condition of the
Company and its Subsidiaries taken as a whole, a written
statement of the Financial Officer of the Company describing
such Termination Event and the action, if any, which the Company
or any ERISA Affiliate has taken, is taking or proposes to take
with respect thereto, and when known, any action taken or
threatened by the IRS, DOL, PBGC or a Multiemployer Plan with
respect thereto;
(ii) within ten (10) Business Days after the Company or any
ERISA Affiliate knows or has reason to know that a prohibited
transaction (defined in Sections 406 of ERISA and 4975 of the
IRC) has occurred, a statement of the Financial Officer of the
Company describing such transaction and the action which the
Company or any ERISA Affiliate has taken, is taking or proposes
to take with respect thereto;
(iii) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with
respect to any Benefit Plan and all communications received by
the Company or any ERISA Affiliate with respect to such request;
(iv) within ten (10) Business Days after receipt by the Company
or any ERISA Affiliate of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, which termination or appointment might be
reasonably expected materially to adversely affect the ability
of the Company and its Subsidiaries, taken as a whole, to carry
on business substantially as now being or heretofore conducted,
or to materially adversely affect the financial condition of the
Company and its Subsidiaries taken as a whole, copies of each
such notice;
(v) within ten (10) Business Days after receipt by the Company
or any ERISA Affiliate of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section
401(a) of the IRC which might be reasonably expected materially
to adversely affect the ability of the Company and its
Subsidiaries, taken as a whole, to carry on business
substantially as now being or heretofore conducted, or to
materially adversely affect the financial condition of the
Company and its Subsidiaries taken as a whole, copies of each
such letter;
(vi) within ten (10) Business Days after receipt by the Company
or any ERISA Affiliate of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability which liability
might be reasonably expected materially to adversely affect the
ability of the Company and its Subsidiaries, taken as a whole,
to carry on business substantially as now being or heretofore
conducted, or to materially adversely affect the financial
condition of the Company and its Subsidiaries taken as a whole,
copies of each such notice;
(vii) within ten (10) Business Days after the Company or any
ERISA Affiliate fails to make a required installment or any
other required payment under Section 412 of the IRC on or before
the due date for such installment or payment which failure might
be reasonably expected materially to adversely affect the
ability of the Company and its Subsidiaries, taken as a whole,
to carry on business substantially as now being or heretofore
conducted, or to materially adversely affect the financial
condition of the Company and its Subsidiaries taken as a whole,
a notification of such failure; and
(viii) within ten (10) Business Days after the Company or any
ERISA Affiliate knows or has reason to know (a) a Multiemployer
Plan has been terminated, (b) the administrator or plan sponsor
of a Multiemployer Plan intends to terminate a Multiemployer
Plan, or (c) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan, which termination or proceedings might be
reasonably expected materially to adversely affect the ability
of the Company and its Subsidiaries, taken as a whole, to carry
on business substantially as now being or heretofore conducted,
or to materially adversely affect the financial condition of the
Company and its Subsidiaries taken as a whole.
For purposes of this Section 5.03, the Company and any ERISA Affiliate
shall be deemed to know all facts known by the Administrator of any Plan
of which the Company or any ERISA Affiliate is the plan sponsor.
(b) Establish, maintain and operate all Plans to comply in all
material respects with the provisions of ERISA and the IRC, and the
regulations and interpretations thereunder, where the failure to so
comply might reasonably be expected materially to impair the ability
of the Company and the Subsidiaries, taken as a whole, to carry on
business substantially as now being conducted or to affect materially
and adversely the financial condition of the Company and the
Subsidiaries, taken as a whole.
SECTION 5.04. Corporate Existence. (a) Do or cause to be done
all things necessary to preserve, renew and keep in full force and effect
its corporate existence, material rights, licenses, permits and franchises
and substantially comply with all laws and regulations the noncompliance
with which would have a material adverse effect on its business; (b) at
all times maintain and preserve all property used or useful in the conduct
of its business (other than property which is not owned by the Company or
any of its Subsidiaries and with respect to which a third party is
responsible for maintenance) and keep the same in good repair, working
order and condition, ordinary wear and tear excepted, and from time to
time make, or cause to be made, all necessary repairs, renewals and
replacements thereto; provided, however, that nothing contained in this
Section 5.04 shall prevent the Company or its Subsidiaries from ceasing or
omitting to exercise any rights, licenses, permits or franchises which in
the judgment of the Company or such Subsidiary is no longer in the best
interest of the Company or such Subsidiary or prevent the Company or any
Subsidiary from selling, abandoning or otherwise disposing of any
property, the retention of which in the judgment of the Company or such
Subsidiary is not in the best interest of the Company or such Subsidiary,
or prevent any liquidation of any Subsidiary of the Company or any merger
or consolidation or sale permitted by the provisions of Section 6.03.
SECTION 5.05. Insurance. Keep its insurable properties
adequately insured at all times in the same manner and to the same extent,
and carry such other insurance, including, without limitation, product
liability insurance, in connection with the operation of its business as
is customary with companies in the same or similar businesses; provided
that the Company may self-insure certain risks to the extent customary for
companies of similar size or in the same or similar businesses.
SECTION 5.06. Obligations and Taxes. Pay all its indebtedness
and obligations promptly and in accordance with their terms and pay and
discharge promptly all taxes, assessments and governmental charges or
levies imposed upon it or in respect of its property, before the same
shall become in default, as well as all lawful claims for labor, materials
and supplies or otherwise which, if unpaid, might become a lien or charge
upon such properties or any part thereof; provided, however, that neither
the Company nor any of its Subsidiaries shall be required to pay and
discharge or to cause to be paid and discharged any such indebtedness or
obligations or any such tax, assessment, charge, levy or claim so long as
the applicability, validity or amount thereof shall be contested in good
faith by appropriate proceedings or actions and the Company or such
Subsidiary, as the case may be, shall set aside on its books adequate
reserves, in its reasonable opinion, with respect to any such indebtedness
or obligations or any such tax, assessment, charge, levy or claim so
contested.
SECTION 5.07. Notice of Defaults. Notify each Bank, in
writing, promptly upon the Company's obtaining knowledge of any condition
or event that constitutes a Default or an Event of Default.
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans
and Letters of Credit solely (a) for general corporate purposes or (b) to
make non-hostile Acquisitions, or acquisitions of a noncontrolling equity
interest in a Person (other than the Company), which, if required by
applicable law or by any agreement, instrument or other document binding
on such Person, have been approved by the boards of directors or other
governing bodies of the Persons who, or whose assets, will be acquired
with the proceeds of such Loans, or, if a vote of such governing bodies is
not required, but the vote of the stockholders of such Person is required
by applicable law or by any agreement, instrument or other document
binding on such Person, by such stockholders.
SECTION 5.09. Environmental Notices and Inspection. (a) Notify the
Agent in writing, promptly upon the Company's learning thereof, of any (i)
notice or claim by any Governmental Authority or any other Person to the
effect that the Company or any Subsidiary is or may be liable to any
Person, or is or may be required to take any actions or refrain from
taking any actions, as a result of any environmental, health or safety
Requirements of Law, which might be reasonably expected to materially
adversely affect the ability of the Company and its Subsidiaries, taken as
a whole, to carry on business substantially as now being or heretofore
conducted, or to materially adversely affect the financial condition of
the Company and its Subsidiaries taken as a whole; or (ii) notice that the
Company or any Subsidiary is subject to investigation by any Governmental
Authority evaluating whether any remedial action is needed to respond to
the release or threatened release of any contaminant into the environment,
which remedial action might be reasonably expected materially to adversely
affect the ability of the Company and its Subsidiaries, taken as a whole,
to carry on business substantially as now being or heretofore conducted,
or materially adversely affects the financial condition of the Company and
its Subsidiaries taken as a whole, and (b) pertaining to the areas of
environmental compliance, hazard or liability, permit, and cause each
Subsidiary to permit, the Agent, any Bank, or any agent or representative
of the Agent or any Bank, during normal business hours and with reasonable
prior notice, to inspect any of the Company's or any Subsidiary's
documents, property or operations, and interview any of the Company's or
any Subsidiary's employees, representatives or agents (including without
limitation, its officers and third party accountants).
SECTION 5.10. Compliance with Laws. Comply in all material
respects with all laws, rules, regulations, orders, writs, judgments,
injunctions, decrees or awards to which it may be subject.
SECTION 5.11. Inspection. Will, and will cause each of its
Subsidiaries to, permit the Banks, by their representatives and agents, to
inspect with reasonable prior notice any of the properties, corporate
books and financial records of the Company and its Subsidiaries and to
examine and make copies of the books of accounts and other financial
records of the Company and its Subsidiaries, and to discuss the affairs,
finances and accounts of the Company and its Subsidiaries with, and to be
advised as to the same by, its officers at such reasonable times and
intervals as the Banks may designate.
SECTION 5.12. Conduct of Business. The Company will, and will
cause each Subsidiary to, carry on and conduct its business substantially
in the recreation and leisure activities industry excluding gaming
casinos.
VI. NEGATIVE COVENANTS
The Company covenants and agrees with the Banks that, so long as
this Agreement shall remain in effect or the Loans, Letter of Credit
Obligations, Commitment Fee, interest, fees or any other expenses or
amounts payable hereunder shall be unpaid, unless the Majority Banks shall
otherwise consent in writing:
SECTION 6.01. Limitations on Indebtedness.
(a) The Company will not at any time permit Consolidated Funded
Debt to exceed 55% of Consolidated Total Capitalization, provided
that for purposes of calculating compliance with this Section 6.01,
the Average Outstanding Balance of Consolidated Current Debt computed
for the Compliance Period preceding the date of any such
determination shall be deemed to constitute outstanding Funded Debt
of the Company incurred as of the last day of such Compliance Period
and shall be deemed outstanding at all times prior to the end of the
next Compliance Period.
(b) The Company will not at any time permit the sum (without
duplication) of (i) Current Debt and Funded Debt of its Subsidiaries
and (ii) Funded Debt of the Company and its Subsidiaries secured by
Liens (other than Permitted Liens) to exceed 25% of Consolidated
Tangible Assets.
(c) Current Debt and Funded Debt of any Subsidiary to the
Company or to an Eighty Percent-Owned Subsidiary shall not be taken
into account for purposes of the foregoing limitations of this
Section 6.01. There shall be no duplication of Funded Debt and
Current Debt of any Subsidiary and the Guaranty of such Debt by the
Company.
(d) Any Person which becomes a Subsidiary after the date hereof
shall for all purposes of this Section 6.01 be deemed to have
created, assumed or incurred or issued at the time it becomes a
Subsidiary all Current Debt and Funded Debt of such Person existing
immediately after it becomes a Subsidiary.
SECTION 6.02. Mergers, Consolidations, Sales of Assets, Etc.
The Company will not, and will not permit any Subsidiary to,
(a) consolidate with or be a party to a merger with any other
Person; provided, however, that:
(1) any Subsidiary may merge or consolidate with or liquidate
into the Company, any Wholly-Owned Subsidiary or any Subsidiary
that is the direct or indirect parent of said Subsidiary and any
Subsidiary (other than a Principal Subsidiary) may merge or
consolidate with or liquidate into any other Subsidiary so long
as (i) in any merger or consolidation involving the Company, the
Company shall be the surviving corporation and (ii) in any
merger, consolidation or liquidation involving a Domestic
Subsidiary and a non-Domestic Subsidiary, the Domestic
Subsidiary shall be the surviving corporation; and
(2) the Company or any Subsidiary may consolidate or merge with
any other corporation if (i) (in the case of a merger or
consolidation involving the Company) the surviving or acquiring
corporation (if other than the Company) (A) is organized and
existing under the laws of any State of the United States of
America or the District of Columbia, (B) shall expressly assume
in writing the due and punctual performance of all obligations
of the Company under this Agreement and the Notes, according to
their tenor, and the Parent Guaranty, and (C) the Company or
such surviving or acquiring corporation shall furnish to the
holders of the Notes an opinion of counsel satisfactory to such
holders to the effect that the instrument of assumption has been
duly authorized, executed and delivered and constitutes the
legal, valid and binding contract and agreement of the surviving
or acquiring corporation enforceable in accordance with its
terms, except as enforcement of such terms may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally, and subject, as to
enforceability, to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at
law), or (ii) (in the case of a merger or consolidation
involving a Subsidiary) such Subsidiary shall be the surviving
corporation and (iii) in the case of any consolidation or merger
described in either (i) or (ii), at the time of such
consolidation or merger, and after giving effect thereto no
Default or Event of Default shall have occurred and be
continuing.
(b) sell, lease, transfer, abandon or otherwise dispose of,
assets (other than (x) sales of goods, products, inventory or
services in the ordinary course of business to customers, (y) the
sale, lease, transfer or disposition of assets to the Company or a
Domestic Subsidiary if a merger between such transferor and such
Domestic Subsidiary would be permitted under Section 6.02(a)(1) and
(z) sales or other dispositions of assets having a fair market value
(as determined in good faith by the chief financial officer of the
Company) in any single sale or disposition of not greater than
$200,000 which the Company determines have become inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary in the
conduct of its business); provided that the foregoing restrictions do
not apply to the sale of assets for cash or property to a Person or
Persons if all of the following conditions are met:
(1) either (i) the net book value of such assets, when added to
the net book value of all other assets sold, leased, transferred
or otherwise disposed of by the Company and its Subsidiaries in
other transactions subject to this Section 6.02(b)(1) or Section
6.02(c)(3) or (4) during the immediately preceding twelve-month
period do not constitute 20% of Consolidated Total Assets
(determined as of October 3, 1997) or (ii) the sum of the
portions of Consolidated Net Income contributed for the
immediately preceding twelve-month period (each as determined in
good faith by the Chief Financial Officer of the Company) by (A)
such assets, (B) each Subsidiary (or portion thereof) disposed
of during such period pursuant to Section 6.02(c)(3) or (4) and
(C) other assets of the Company and its Subsidiaries disposed of
during such period in other transactions subject to this Section
6.02(b)(1) do not constitute 20% or more of Consolidated Net
Income for such period, and the aggregate amount of any sale,
lease, transfer or other disposition of assets does not exceed
50% of Consolidated Total Assets and does not constitute 50% or
more of Consolidated Net Income during the term of this
Agreement; and
(2) immediately after the consummation of the transaction and
after giving effect thereto no Default or Event of Default would
exist.
(c) sell, transfer or otherwise dispose of any shares of
capital stock (including as "stock" for the purposes of this Section
6.02(c), any warrants, rights or options to purchase or otherwise
acquire stock or other securities exchangeable for or convertible
into such stock) of any Subsidiary and the Company will not permit
any Subsidiary to issue any shares of stock of such Subsidiary
(except for any sale, transfer, issuance or other disposition of
stock to the Company or a Subsidiary if a merger between such
transferor or issuer and such Subsidiary would be permitted under
Section 6.02(a)(1)); provided that the foregoing restrictions do not
apply to:
(1) the sale, transfer or issuance of directors' qualifying
shares of capital stock;
(2) the sale, transfer or issuance of any de minimus number of
shares of capital stock to foreign domiciliaries as may be
required by law;
(3) the sale, transfer or other disposition of all or any part
of the shares of capital stock of any Subsidiary (other than a
Principal Subsidiary);
(4) the sale, transfer or other disposition of all shares of
capital stock of a Principal Subsidiary held by the Company and
its Subsidiaries if all of the following conditions are met:
(i) simultaneously with such sale, transfer, or
disposition, all shares of stock and all Indebtedness of
such Principal Subsidiary at the time owned by the Company
and by every other Subsidiary shall be sold, transferred
or disposed of as an entirety;
(ii) the Board of Directors of the Company shall have
determined, as evidenced by a resolution thereof, that the
proposed sale, transfer or disposition of said shares of
stock and Indebtedness is in the best interests of the
Company;
(iii) said shares of stock and Indebtedness are sold,
transferred or otherwise disposed of to a Person or
Persons, for cash and/or tangible assets and on terms
reasonably deemed by the Board of Directors to be adequate
and satisfactory; and
(iv) the Principal Subsidiary being disposed of shall not
have any continuing investment in the Company or any other
Subsidiary not being simultaneously disposed of;
(5) the sale, transfer or issuance of shares of capital stock
of a Subsidiary in connection with the purchase or other
acquisition by the Company or a Subsidiary of the capital stock,
properties or assets of any Person; provided that:
(i) after giving effect to such sale, transfer or issuance
and such purchase or other acquisition, no Default or Event
of Default would then exist;
(ii) the aggregate fair value of all such capital stock,
properties or assets so acquired attributable to the
issuance, sale or transfer of such shares of capital stock
in each sale, transfer or issuance of such shares shall
equal or exceed the fair value of such shares (in each case
as determined in good faith by the Board of Directors of
the Company at the time of such acquisition taking into
consideration the terms of any written agreement described
in Section 6.02(c)(5)(iii) below); and
(iii) the shares of capital stock are sold, transferred
or issued pursuant to a written agreement which (A)
contemplates the subsequent purchase or redemption of such
shares by the Company or the Subsidiary whose shares have
been so sold, transferred or issued or any direct or
indirect parent of such Subsidiary upon request of the
transferee of such shares or upon demand by the Company or
such Subsidiary or any direct or indirect parent of such
Subsidiary made pursuant to the terms of such written
agreement at a price or prices computed by reference to
such formulas or indices or other references as are
determined in good faith by the Board of Directors of the
Company at the time of such acquisition to be in the best
interests of the Company and its Subsidiaries and (B)
prohibits the transfer of such shares to any Person other
than the Company or the Subsidiary whose shares have been
so sold, transferred or issued or any direct or indirect
parent of such Subsidiary; and
(6) the sale, transfer or issuance of capital stock to
employees of Subsidiaries as part of any incentive stock
arrangement other than any incentive stock agreement entered
into in connection with any purchase or acquisition contemplated
by Section 6.02(c)(5), provided that:
(i) after giving effect to such issuance no Subsidiary
shall cease to be a Subsidiary; and
(ii) the aggregate fair value (in each case determined in
good faith at the time of such issuance by the Board of
Directors of the Company or such person or committee as the
Board of Directors of the Company may authorize to make
such determination pursuant to the terms of any such
incentive stock arrangement) of all shares of capital stock
of such Subsidiaries issued to such employees shall not
exceed $2,000,000;
provided, however, that notwithstanding the foregoing, any sale,
transfer, issuance or other disposition of shares pursuant Section
6.02(c)(3) or 6.02(c)(4) may not be consummated if either (y) the net
book value of the assets of such Subsidiary attributable to such
sale, transfer, issuance or other disposition of shares when added to
the net book value of all other assets sold, leased, transferred or
otherwise disposed of by the Company and its Subsidiaries during the
immediately preceding twelve-month period in other transactions
subject to Section 6.02(b)(1) and Sections 6.02(c)(3) and (4) would
constitute 20% (or more) of Consolidated Total Assets (determined as
of October 3, 1997) or (z) the portions of Consolidated Net Income
for the immediately preceding twelve-month period contributed (each
as determined in good faith by the Chief Financial Officer of the
Company) by (1) such assets, (2) each Subsidiary (or portion thereof)
disposed of during such period in transactions subject to Sections
6.02(c)(3) and (4) and (3) other assets of the Company and its
Subsidiaries sold, leased, transferred or otherwise disposed of by
the Company and its Subsidiaries during such period in transactions
subject to Section 6.02(b)(1) would exceed 20% of Consolidated Net
Income for such period, and provided further, that the aggregate
amount of any sale, transfer or issuance of shares does not exceed
50% of Consolidated Total Assets and does not constitute 50% or more
of Consolidated Net Income during the term of this Agreement.
(d) Notwithstanding any other provision of this Section 6.02,
the Company may sell stock or assets of America Outdoors, Inc.,
Airguide Instrument Co. and all of the Plastimo businesses. Sale of
stock or assets permitted by this Section 6.02(d) shall not be taken
into account for purposes of calculating the limitations on permitted
sales of assets and stock set forth in Section 6.02(b)(1) and the
proviso at the end of Section 6.02(c).
SECTION 6.03. Fixed Charges Coverage Ratio. The Company will,
on each Quarterly Date, have kept and maintained for the immediately
preceding four fiscal quarters ending on such Quarterly Date, a ratio of
Net Income Available for Fixed Charges to Fixed Charges of not less than
1.50 to 1.00, provided that on any three Quarterly Dates after October 3,
1997, the ratio of Net Income Available for Fixed Charges to Fixed Charges
may be less than 1.5 to 1.0, but must be greater than 1.2 to 1.0.
SECTION 6.04. Distributions.
(a) The Company will not, and will not permit any Subsidiary
to, except as hereinafter provided:
(1) Declare or pay any dividends, either in cash or property,
on any shares of its capital stock of any class (except dividends or other
distributions payable solely in shares of capital stock of the Company and
dividends paid by Subsidiaries to the Company or other Subsidiaries in
respect of capital stock of Subsidiaries owned by the Company or such
other Subsidiaries); or
(2) Directly or indirectly, or through any Subsidiary,
purchase, redeem or retire any shares of its capital stock of
any class or any warrants, rights or options to purchase or
acquire any shares of its capital stock (other than (i) in
exchange for or out of the net cash proceeds to the Company
obtained within three months of such purchase, redemption or
retirement from the issue or sale of other shares of capital
stock of the Company or warrants, rights or options to purchase
or acquire any shares of its capital stock or (ii) in connection
with any purchase or redemption of any shares of capital stock
sold, transferred or issued in accordance with Section
6.02(c)(1), (2) or (5)); or
(3) Make any other payment or distribution, either directly or
indirectly or through any Subsidiary, in respect of its capital
stock (such declarations or payments of dividends, purchases,
redemptions or retirements of capital stock and warrants, rights
or options and all such other payments or distributions being
herein collectively called "Distributions"), except (i)
Repurchases of up to 50,000 shares of stock per year of the
Company for use in connection with employee stock option and
other employee benefit plans, and (ii) other Distributions,
provided that after giving effect thereto no Default or Event of
Default would exist and the aggregate amount of Distributions
(excluding Distributions pursuant to Section 6.04 (a)(3)(i))
made during the period from and after June 14, 1991 to and
including the date of the making of the Distribution in question
would not exceed the sum of (1) $5,000,000 plus (2) 50% of
Consolidated Net Income for such period, computed on a
cumulative basis for said entire period (or if such Consolidated
Net Income is a deficit figure, then minus 100% of such
deficit).
(b) For the purposes of Section 6.04(a)(3)(ii) above, the
amount of any Distribution declared, paid or distributed in property
shall be deemed to be the greater of the book value or fair market
value (as determined in good faith by the Board of Directors of the
Company) of such property at the time of the making of the
Distribution in question.
(c) The Company will not authorize or make a Distribution on
its capital stock if after giving effect to the proposed Distribution
a Default or Event of Default would exist.
SECTION 6.05. Investments. The Company will not, and will not
permit any Subsidiary to, make any Investments, other than:
(a) Investments by the Company or a Subsidiary in and to
Subsidiaries, including any Investment in a Person which, after
giving effect to such Investment, will become a Subsidiary;
(b) Investments in property or assets to be used in the usual
and ordinary course of business of the Company or its Subsidiaries,
provided that such Investment does not have the effect of changing
substantially the general nature of the business engaged in by the
Company and its Subsidiaries on a consolidated basis;
(c) Investments in commercial paper maturing in 270 days or
less from the date of issuance which, at the time of acquisition by
the Company or any Subsidiary, is accorded the highest rating by
Standard & Poor's Rating Group, a division of McGraw-Hill, Moody's
Investors Service, Inc. or another credit rating agency of recognized
national standing;
(d) Investments in direct obligations of the federal
governments of the United States of America, or any of the other
countries listed on Schedule 6.05 or any direct agency or
instrumentality of any thereof, the payment or guarantee of which
constitutes a full faith and credit obligation of one of such federal
governments or any direct agency or instrumentality of any thereof,
as the case may be, in each case, maturing in twelve months or less
from the date of acquisition thereof;
(e) Term federal funds and banker's acceptances maturing within
180 days from the date of acquisition thereof and issued by a bank
organized under the laws of the United States or any of the countries
listed on Schedule 6.05, having capital, surplus and undivided
profits aggregating at least U.S. $100,000,000; provided that the
issuing institution has a long-term debt rating of A or better by
Keefe Bank Watch Service, Standard & Poor's Rating Group, a division
of McGraw-Hill or Moody's Investors Service, Inc. or any successors
thereto.
(f) Investments in certificates of deposit and time deposits
maturing within one year from the date of issuance thereof with
commercial banks (whether domestic or foreign) having capital and
surplus in excess of $100,000,000 (or the Dollar equivalent thereof);
(g) Investments consisting of demand deposit accounts
maintained in the ordinary course of business;
(h) Loans or advances in the usual and ordinary course of
business to officers, directors, and employees incidental to carrying
on the business of the Company or any Subsidiary;
(i) Receivables arising from the sale of goods and services in
the ordinary course of business of the Company and its Subsidiaries;
and
(j) Other Investments (in addition to those permitted by the
foregoing provisions of this Section 6.05); provided that (1) all
such other Investments shall not exceed in the aggregate 25% of
Consolidated Tangible Net Worth Available for Investments and (2)
after giving effect to such other Investments, no Default or Event of
Default would exist.
In valuing any Investments for the purpose of applying the
limitations set forth in this Section 6.05, such Investments shall be
valued in accordance with GAAP.
For purposes of this Section 6.05, at any time when a
corporation becomes a Subsidiary, all Investments of such Person at such
time shall be deemed to have been made by such Person, as a Subsidiary, at
such time.
SECTION 6.06. Transactions with Affiliates. The Company will
not, and will not permit any Subsidiary to, enter into or be a party to
any material transaction or arrangement with any Affiliate (including,
without limitation, the purchase from, sale to or exchange of property
with, or the rendering of any service by or for, any Affiliate), except
transactions reasonably deemed by the Company in good faith to be in the
best business interests of the Company or the concerned Subsidiary and
upon fair and reasonable terms no less favorable to the Company or such
Subsidiary than would obtain in a comparable arm's-length transaction with
a Person other than an Affiliate.
SECTION 6.07. ERISA. Except to the extent that such act, or
failure to act would not result singly, or in the aggregate, after taking
into account all other such acts or failures to act, in a liability which
might be reasonably expected materially to adversely affect the ability of
the Company and its ERISA Affiliates, taken as a whole, to carry on
business substantially as now being or heretofore conducted, or to
materially adversely affect the financial condition of the Company and its
ERISA Affiliates taken as a whole, (i) engage, or permit any ERISA
Affiliate to engage, in any prohibited transaction described in Sections
406 of ERISA or 4975 of the IRC for which a statutory or class exemption
is not available or a private exemption has not been previously obtained
from the DOL; (ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the IRC); (iii) fail, or
permit any ERISA Affiliate to fail, to pay timely required contributions
or annual installments due with respect to any waived funding deficiency
of any Benefit Plan; (iv) terminate, or permit any ERISA Affiliate to
terminate, any Benefit Plan which would result in any liability of the
Company or any ERISA Affiliate under Title IV of ERISA; (v) fail to make
any contribution or payment to any Multiemployer Plan which the Company or
any ERISA Affiliate may be required to make under any agreement relating
to such Multiemployer Plan, or any law pertaining thereto; (vi) fail, or
permit any ERISA Affiliate to fail, to pay any required installment or any
other payment required under Section 412 of the IRC on or before the due
date for such installment or other payment; (vii) amend, or permit any
ERISA Affiliate to amend, a Benefit Plan resulting in an increase in
current liability for the plan year such that the Company or any ERISA
Affiliate is required to provide security to such Plan under Section 401
(a) (29) of the IRC.
SECTION 6.08. Environmental Compliance. The Company will not
become, or permit any Subsidiary to become, subject to any liabilities or
costs which might be reasonably expected materially to adversely affect
the ability of the Company and its Subsidiaries, taken as a whole, to
carry on business substantially as now being or heretofore conducted, or
to materially adversely affect the financial condition of the Company and
its Subsidiaries taken as a whole, arising out of or related to (i) the
release or threatened release at any location of any contaminant into the
environment, or any remedial action in response thereto, or (ii) any
violation of any environmental, health or safety Requirements of Law.
SECTION 6.09. Grants of Security Interests. The Company will
not grant a security interest to any other provider of Indebtedness unless
the Company equally and ratably secures all obligations under this Credit
Agreement.
VII. EVENTS OF DEFAULT
In the case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made in or in
connection with this Agreement or in any report, certificate,
financial statement or other instrument furnished by the Company or
an Eligible Subsidiary pursuant to this Agreement or with the
execution and delivery of the Notes shall prove to have been false or
misleading in any materially adverse respect when made or deemed
made;
(b) default shall be made by the Company or an Eligible
Subsidiary in the payment of the principal of the Notes or the
Reimbursement Obligations when and as the same shall become due and
payable, whether at the due date thereof or by acceleration thereof
or otherwise;
(c) default shall be made by the Company or an Eligible
Subsidiary in the payment of interest on the Notes or of the
Commitment Fee, the Letter of Credit Fee, the Issuer's Fee or any
other amount payable hereunder (other than principal payments on the
Notes or the Reimbursement Obligations) when and as the same shall
become due and payable, whether at the due date thereof or by
acceleration thereof or otherwise, and such default shall continue
for five (5) Business Days;
(d) default shall be made with respect to any Indebtedness
(other than that evidenced by the Notes) of the Company or of any of
its Subsidiaries if (i) the effect of such default is to accelerate
or to permit the holders thereof to accelerate the maturity of such
Indebtedness and (ii) the aggregate amount of such Indebtedness which
is or may be accelerated by reason of such default equals or exceeds
$5,000,000;
(e) default shall be made in the due observance or performance
of any covenant, condition or agreement on the part of the Company or
any of its Subsidiaries to be observed or performed pursuant to the
terms of Article VI;
(f) default shall be made in the due observance or performance
of any term, provision, covenant, condition or agreement to be
observed or performed by the Company or any of its Subsidiaries
pursuant to the terms hereof (other than the covenants described in
Article VI) and, if capable of being remedied, such default shall
continue unremedied for thirty (30) days after the earlier of (i) the
date the Company or the Subsidiary, as the case may be, obtains
knowledge thereof, or (ii) the date written notice thereof shall have
been given to the Company or the Subsidiary, as the case may be, by
the Agent or any Bank;
(g) the Johnson Family shall at any time fail to own stock
having, in the aggregate, votes sufficient to elect at least a
fifty-one percent (51%) majority of the directors of the Company;
(h) the Company or any of the Principal Subsidiaries shall (i)
apply for or consent to the appointment of, or the taking or
possession by, a receiver, custodian, trustee or liquidator of itself
or of all or a substantial part of its property, (ii) admit in
writing its inability, or be generally unable, to pay its debts as
such debts become due, (iii) make a general assignment for the
benefit of its creditors, (iv) commence a voluntary case under the
Bankruptcy Code, (v) file a petition seeking to take advantage as
debtor of any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts,
(vi) fail to controvert in a timely or appropriate manner, or
acquiesce in writing to, any petition filed against the Company or a
Principal Subsidiary in an involuntary case under the Bankruptcy
Code, or (vii) take any corporate action (other than action to
controvert any such petition) for the purpose of effecting any of the
foregoing;
(i) a proceeding or case shall be commenced in any court of
competent jurisdiction, seeking (i) the liquidation, reorganization,
dissolution, winding-up, or composition or readjustment of debts, of
the Company or any of the Principal Subsidiaries, (ii) the
appointment of a trustee, receiver, custodian, liquidator or the like
of the Company or any of the Principal Subsidiaries or of all or any
substantial part of its or such Subsidiary's assets, or (iii) similar
relief in respect of the Company or any of the Principal Subsidiaries
under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, without the
consent of the Company or such Subsidiary, as the case may be, and
such proceeding or case shall continue undismissed, or an order,
judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of
thirty (30) days, or an order for relief against the Company or any
of the Principal Subsidiaries shall be entered in an involuntary case
under the Bankruptcy Code;
(j) final judgment shall be rendered against the Company or any
of the Company's Subsidiaries in an amount (exclusive of amounts
fully covered by insurance) in excess of an aggregate of $5,000,000
and the same shall remain undischarged for a period of thirty (30)
consecutive days during which execution shall not be effectively
stayed; or
(k) (i) a Termination Event occurs with respect to any Plan
and, within thirty (30) days after the reporting of such Termination
Event to the Agent (who shall promptly notify the Banks), the Agent
shall have notified the Company in writing that (i) the Majority
Banks have determined that such Termination Event might be reasonably
expected materially to impair the right of the Company and its ERISA
Affiliates, taken as a whole, to carry on business substantially as
now being or heretofore conducted, or materially adversely affects
the financial condition of the Company and its ERISA Affiliates taken
as a whole, and as a result thereof, an Event of Default exists
hereunder; or (ii) the plan administrator of any Plan applies under
Section 412(d) of the IRC for a waiver of the minimum funding
standards of Section 412(a) of the IRC and the Agent believes that
the substantial business hardship upon which the application for the
waiver is based might be reasonably expected materially to impair the
right of the Company and its ERISA Affiliates, taken as a whole, to
carry on business substantially as now being or heretofore conducted,
or materially adversely affects the financial condition of the
Company and its ERISA Affiliates taken as a whole.
then, and in every such event (other than an event with respect to the
Company or a Principal Subsidiary described in paragraph (h) or (i) above)
and at any time thereafter during the continuance of such event, the Agent
may, or shall at the request of the Majority Banks, by written notice to
the Company, take any or all of the following actions, at the same or
different times: (i) terminate forthwith the Revolving Loan Commitments
and Eurocurrency Commitments, and the obligations to issue Letter of
Credit, if any, of the Banks hereunder; (ii) declare the Revolving Loan
Notes, the Competitive Bid Notes or the Eurocurrency Notes, as applicable,
and all other amounts payable under this Agreement to be forthwith due and
payable, whereupon the Revolving Loan Notes, the Eurocurrency Notes, and
the Competitive Bid Notes, and the Letter of Credit Obligations as
applicable, and all other amounts payable under this Agreement shall
become forthwith due and payable, both as to principal and interest,
without presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived by the Company, anything contained
herein or in the Revolving Loan Notes, the Eurocurrency Notes, the
Competitive Bid Notes to the contrary notwithstanding; and (iii) pursue
any other remedy under this Agreement or otherwise; and, in any event with
respect to the Company or a Major Subsidiary described in paragraph (h) or
(i) above, the Revolving Loan Commitments, if any, and the Eurocurrency
Commitments, if any, of all of the Banks shall automatically terminate,
and the Revolving Loan Notes, the Eurocurrency Notes, the Competitive Bid
Notes, and the Letter of Credit Obligations as applicable, and all other
amounts payable under this Agreement shall automatically become due and
payable, both as to principal and interest, without presentment, demand,
protest or other notice of any kind, all of which are hereby expressly
waived by the Company, anything contained herein or in the Revolving Loan
Notes, the Eurocurrency Notes, or the Competitive Bid Notes, as
applicable, to the contrary notwithstanding.
VIII. THE AGENT
The Banks and the Agent agree among themselves as follows:
SECTION 8.01. Appointment and Authority of Agent. Each of the
Banks, and each subsequent holder of any Note by its acceptance thereof,
irrevocably authorizes the Agent to take all actions on its behalf and to
exercise all powers hereunder as are specifically delegated to the Agent
by the terms hereof, together with all such powers as shall be reasonably
incidental thereto. The relationship between the Agent and the Banks is
and shall be that of agent and principal only and nothing herein shall be
construed to constitute the Agent a trustee for the holder of any Note or
for any holder of a participation therein nor impose on the Agent duties
or obligations other than those expressly provided for herein. Neither
the Agent nor any of its directors, officers, employees or agents shall be
liable to any Bank for any action lawfully taken or omitted to be taken by
it or them hereunder or in connection herewith (a) at the request or with
the approval of the Majority Banks or, where expressly provided for
herein, all the Banks, as the case may be, or (b) in the absence of gross
negligence or willful misconduct.
SECTION 8.02. Agent May Rely on Documents. The Agent shall be
entitled to rely on any communication, instrument or document believed by
it to be genuine and correct and to have been signed or sent by the proper
person or persons, and with respect to all legal matters shall be entitled
to rely on the advice of legal advisors selected by it concerning all
matters relating to this Agreement and the Notes and its duties hereunder
and thereunder, and, subject to the provisions of the last sentence of
Section 8.01, shall not be liable to any of the parties hereto or to any
holder of a Note for the consequence of such reliance.
SECTION 8.03. No Amendment to Agent's Duties Without Consent.
The Agent shall not be bound by any waiver, amendment, supplement or
modification of this Agreement which affects its duties under this
Agreement unless it shall have given its prior written consent as Agent
thereto.
SECTION 8.04. Responsibilities of Agent. The Agent may treat
the payee of any Note as the holder thereof until written notice of the
transfer thereof shall have been received by it. The Agent shall not be
responsible for any recitals, statements, representations or warranties
herein or for the execution, effectiveness, genuineness, validity or
enforceability of this Agreement or the Notes, or be liable for failing to
make any inquiry concerning the performance or observance of any of the
terms, provisions or conditions thereof. The Agent shall not be deemed to
have knowledge of the occurrence of an Event of Default or Default (other
than a failure by the Company to pay when due the principal of or interest
on any Note or with respect to any Letter of Credit Obligation or the
Commitment Fee, the Letter of Credit Fee or the Issuer's Fee) unless the
Agent shall have received written notice from a Bank or the Company
specifying that an Event of Default or Default has occurred and describing
such Event of Default or Default. In the event that (a) the Company or
any Eligible Subsidiary fails to pay when due the principal of or interest
on any Note or the Commitment Fee or (b) the Agent receives such notice of
the occurrence of an Event of Default or Default the Agent shall give
written notice thereof to the Banks, and shall take such action with
respect to such Event of Default or Default as it shall be directed in
writing to take by the Majority Banks; provided, however, that, unless
and until the Agent shall have received such directions, the Agent may
take such action or refrain from taking such action with respect to such
Event of Default or Default as it shall deem advisable in the best
interests of the Banks.
SECTION 8.05. Indemnification of Agent. Each of the Banks
agrees (which agreement shall survive payment of the Notes and the Letter
of Credit Obligations) to indemnify the Agent (to the extent not
reimbursed by the Company or any Eligible Subsidiary), in amounts which
are pro rata to their respective Applicable Percentages from and against
any and all losses, claims, damages, liabilities and expenses which may be
imposed on, incurred by or asserted against the Agent (in its capacity as
Agent) in any way related to or arising out of this Agreement, the Notes,
the Letters of Credit or the Loans or any action taken or omitted by the
Agent, except any losses, claims, damages, liabilities or expenses
resulting from the Agent's gross negligence or willful misconduct.
SECTION 8.06. Agent Shall Have Rights of a Bank. In relation
to its Commitments, its Loans and the Notes evidencing such Loans, and the
Letters of Credit, the Agent, in its capacity as a Bank, shall have the
same rights, powers and obligations hereunder as any Bank and may exercise
such rights and powers as though it were not the Agent.
SECTION 8.07. Credit Decision. Each Bank acknowledges that it
has, independently and without reliance upon the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this Agreement.
Each Bank also acknowledges that it will independently and without
reliance upon the Agent or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking any action under this
Agreement. Each Bank agrees that the Agent shall not have any
responsibility for the accuracy or adequacy of any information contained
in any document, or any oral information, supplied to such Bank by the
Company directly or through the Agent.
SECTION 8.08. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Banks and the Company, and
the Agent may be removed at any time with or without cause by written
notice received by the Agent from the Majority Banks. Upon any such
resignation or removal, the Majority Banks shall have the right to
appoint, on behalf of the Company and the Banks and, provided no Default
then exists, with the prior written consent of the Company, a successor
Agent. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within thirty days after
the retiring Agent's giving notice of resignation, then the retiring Agent
may appoint, on behalf of the Company and the Banks and, provided no
Default then exists, with the prior written consent of the Company, a
successor Agent. Such successor Agent shall be a commercial bank having
capital and retained earnings of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations
hereunder and under the other Loan Documents. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Article VIII shall
continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and
under the other Loan Documents.
IX. AMENDMENTS; WAIVERS; AND REMEDIES
No amendment or waiver of any provision of this Agreement or any
Note, nor consent to any departure by the Company or an Eligible
Subsidiary therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Majority Banks; provided, however,
that unless approved in writing by all the Banks, no such amendment,
waiver or consent shall (a) change the amount or date of payment of the
principal of, or change the rate or extend the time of payment of interest
on, any Revolving Note or Eurocurrency Note or Letter of Credit, or change
the amount or extend the time of payment of any Commitment Fee or other
fee due hereunder, (b) increase the Revolving Loan Commitments or the
Eurocurrency Commitments, (c) change or affect the provisions of Section
2.06, (d) change or affect the definition of "Majority Banks," (e)
subordinate the Notes in right of payment to any other indebtedness or
obligation whatsoever, (f) waive any conditions specified in Article IV or
(g) change or affect any provision of Section 10.02, this Article IX, or
Section 10.04 or (h) release the Parent Guaranty. An amendment, waiver or
consent which changes the amount or date of payment of the principal of,
or changes the rate or extends the time of payment of, any Competitive Bid
Note shall only require the consent of the holder thereof. Any such
waiver, consent or approval shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on
the Company or an Eligible Subsidiary in any case shall entitle the
Company or an Eligible Subsidiary to any other or further notice or demand
in the same, similar or other circumstances. Each holder of any Note
outstanding shall be bound by any modification, waiver or consent
authorized by this Article IX, whether or not such Note shall have been
marked to indicate such modification, waiver or consent. No waiver by the
Agent or any Bank of any breach or default of or by the Company or an
Eligible Subsidiary under this Agreement shall be deemed a waiver of any
other previous breach or default or any thereafter occurring. No
amendment of any provision of this Agreement relating in any way to any
Issuing Banks or any or all of the Letters of Credit shall be effective
without the written consent of each Issuing Bank affected thereby.
X. MISCELLANEOUS
SECTION 10.01. No Discharge. The obligations of the Company
and the Eligible Subsidiaries under this Agreement and under the Notes
shall be absolute and unconditional and shall remain in full force and
effect without regard to, and shall not be released, discharged or in any
way affected by: (a) any exercise or nonexercise of any right, remedy,
power or privilege under or in respect of this Agreement or applicable
law, including, without limitation, any failure to set off or release in
whole or in part by any Bank of any balance of any deposit account or
credit on its books in favor of the Company or any Eligible Subsidiary or
any waiver, consent, extension, indulgence or other action or inaction in
respect of any thereof or (b) any other act or thing or omission or delay
to do any other act or thing which may or might in any manner or to any
extent vary the risk of the Company or any Eligible Subsidiary or would
otherwise operate as a discharge of the Company or any Eligible Subsidiary
as a matter of law.
SECTION 10.02. Sharing of Setoffs. Subject to Section
2.14(a)(ii), each Bank agrees that if it shall, through the exercise of a
right of banker's lien, setoff or counterclaim against the Company or an
Eligible Subsidiary, or through a secured claim the security for which is
a debt owed by such Bank to the Company including, but not limited to, a
secured claim under Section 506 of the Bankruptcy Code or other security
or interest arising from, or in lieu of, such secured claim, received by
such Bank under any applicable bankruptcy, insolvency or other similar
law, obtain payment in respect of any Note held by it as a result of which
the unpaid portion of such Note is proportionately less than the unpaid
portion of the Notes held by each of the other Banks or obtain payment
in respect of any Reimbursement Obligations owed to it as a result of
which the unpaid portion of such Reimbursement Obligations is
proportionately less than the unpaid portion of the Reimbursement
Obligations held by each of the other Banks; (a) it shall be deemed to
have simultaneously purchased from such other Banks a participation in the
Notes held by such other Banks, so that the aggregate unpaid principal
amount of the Notes and Reimbursement Obligations held by each Bank shall
be in the same proportion to the aggregate unpaid principal amount of the
Notes and Reimbursement Obligations then outstanding as the principal
amount of the Note and Reimbursement Obligations held by it prior to such
exercise of banker's lien, setoff or counter-claim or prior to such
receipt of a secured claim, security or interest was to the principal
amount of all the Notes and Reimbursement Obligations outstanding prior to
such exercise of banker's lien, setoff or counterclaim or prior to such
receipt of a secured claim, security or interest; provided, however, that
if any purchase is made pursuant to this Section 10.02 and the payment
giving rise thereto is thereafter recovered, such purchase shall be
rescinded and the purchase price restored with interest to the extent
interest has been recovered by the Bank purchasing such participation and
(b) such other adjustments shall be made from time to time as shall be
equitable to ensure that all the Banks share such payment pro rata in
accordance with their Applicable Percentages. The Company and each
Eligible Subsidiary agrees that any holder of a participation in any Loan
or Note and Reimbursement Obligations, or any portion thereof, whether or
not acquired pursuant to this Section 10.02, may exercise rights of
payment and set-off with respect to such participation as fully as if such
holder of a participation were the direct creditor of the Company in the
amount of such participation and such holder of a participation shall be
deemed a "Bank" for purposes of this Section 10.02.
SECTION 10.03. Severability. Any provision of this Agreement
which is illegal, invalid or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such illegality,
invalidity or unenforceability without invalidating the remaining
provisions hereof or affecting the legality, validity or enforceability of
such provision in any other jurisdiction.
SECTION 10.04. Successors and Assigns. Whenever in this
Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Company, the
Eligible Subsidiaries or the Banks that are contained in this Agreement
shall bind and inure to the benefit of their respective successors and
assigns as if such successors and assigns were original parties hereto.
The Company and the Eligible Subsidiaries may not assign or transfer any
of their rights or obligations hereunder without the prior written consent
of all the Banks, except in connection with a transaction permitted by the
provisions of Section 6.02. Any Bank may assign its rights and delegate
its obligations under this Agreement and further may assign, or sell
participations in, all or any part of any Loan or Loans made by it or any
other interest herein or in its Note to another bank or other entity;
provided, that, no Bank may make any such assignment or delegation (but
may sell such participations) without the prior written consent of the
Company or the Eligible Subsidiary, as the case may be, which consent
shall not be unreasonably withheld. In the case of an assignment or
delegation, (i) each such assignment shall be evidenced by a written
agreement signed by the Company or the Eligible Subsidiary, as the case
may be, the Agent, the assigning Bank (without the requirement that any
other Bank sign such agreement or consent thereto) and the assignee, and
the form and substance of any such agreement (to the extent not provided
below) shall be satisfactory to the Company or the Eligible Subsidiary, as
the case may be and the assigning Bank and the form of such agreement
shall be satisfactory to the Agent; (ii) each such assignment shall be of
a constant, and not a varying, percentage of all of the assigning Bank's
rights and obligations under this Agreement; (iii) the aggregate amount of
the Revolving Loan Commitment or Eurocurrency Commitment of the assigning
Bank being assigned pursuant to each such assignment (if less than all of
the remaining Revolving Loan Commitment or Eurocurrency Commitment of the
assigning Bank) shall in no event be less than $5,000,000 and shall be an
integral multiple of $1,000,000; and (iv) the assignee shall have, to the
extent of such assignment (unless otherwise provided therein), the same
rights and benefits as it would have if it were a Bank hereunder and the
holder of a Note, and the assigning Bank shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Agreement with respect to any rights, obligations, Notes or
Loans so assigned or delegated (and, in the case of an assignment covering
all of the remaining portion of an assigning Bank's rights and obligations
under this Agreement, such assigning Bank shall cease to be a party to
this Agreement). Upon each assignment, the assigning Bank shall pay to
the Agent, for the Agent's sole account, an administrative fee of
$2,500.00 for processing such assignment. In the case of a participation,
the participant shall not have any rights under this Agreement or any Note
other than those rights granted to the Banks in Sections 2.11 through 2.14
hereof (the participant's rights against the assigning Bank in respect of
such participation to be those set forth in the agreement executed by such
Bank in favor of the participant relating thereto). The Banks may furnish
any information concerning the Company and its Subsidiaries in the
possession of the Banks from time to time to assignees and participants
(including prospective assignees and participants); provided that such
Banks shall use their best efforts to ensure that any such information
provided to any such assignee or participant shall be kept confidential by
such assignee or participant.
SECTION 10.05. Governing Law. (a) This Agreement and the Notes
shall be construed in accordance with and governed by the laws of the
State of Illinois and any applicable laws of the United States of America.
The Company and each Eligible Subsidiary (a) irrevocably submits to the
jurisdiction of any Illinois State or Federal court sitting in the City of
Chicago over any suit, action or proceeding arising out of or relating to
this Agreement or its Notes; (b) irrevocably waives, to the fullest extent
permitted by law, any objection which it may have or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in an
inconvenient forum; (c) consents to process being served in any such suit,
action or proceeding upon the Company and each Eligible Subsidiary by the
mailing of a copy thereof by registered or certified mail, postage
prepaid, return receipt requested, to the Company's address specified in
Section 10.08 (or with respect to an Eligible Subsidiary, in its Election
to Participate) or provided therein, to be effective when delivered to the
Company or such Subsidiary (or when delivery thereof is refused); and (d)
agrees that such service (i) shall be deemed in every respect effective
service of process upon it in any such suit, action or proceeding and (ii)
shall, to the fullest extent permitted by law, be taken and held to be
valid personal service upon and personal delivery to it. Nothing in this
Section 10.06 shall affect the right of the Agent or any Bank to serve
process in any manner permitted by law or limit the right of the Agent or
any Bank to bring proceedings against the Company or an Eligible
Subsidiary in the courts of any jurisdiction or jurisdictions.
SECTION 10.06. Currency Indemnity. To the fullest extent
permitted by applicable law, the obligation of the Company and the
Eligible Subsidiaries under this agreement to make payments in an
Alternative Currency in which the Loans or any portion thereof are
outstanding shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment, expressed in or converted into any
other currency or any other realization in such currency, whether as
proceeds of set-off, security, guarantee, distributions or otherwise,
except to the extent that such tender, recovery or realization shall
result in the actual receipt by the Bank or Banks entitled thereto of the
full amount of the Alternative Currency due and payable. If the amount in
the Alternative Currency actually received by such a Bank or Banks for any
reason falls short of the full amount of the Alternative Currency due and
payable, the Company or the applicable Eligible Subsidiary shall, as a
separate and independent obligation, pay such additional amounts in the
Alternative Currency as may be necessary to compensate for such shortfall.
This obligation of the Company and the Eligible Subsidiaries shall
continue in force and effect until discharged as provided herein and shall
not be affected by judgment being obtained for any other sum due under
this Agreement. Each Bank's determination of amounts effectively received
by it shall be conclusive absent manifest error.
SECTION 10.07. Headings. The Article and Section headings in
this Agreement are for convenience only and shall not affect the
construction hereof.
SECTION 10.08. Notices. Any notice shall be conclusively
deemed to have been received by a party hereto and to be effective (i) if
sent by regular mail or commercial delivery service, on the day on which
delivered to such party at its address set forth below (or at such other
address as such party shall specify to the other parties hereto in
writing), (ii) if sent by telex, graphic scanning or other telecopy
communications of the sending party, when delivered by such equipment to
the number set forth on the signature pages hereof or (iii) if sent by
registered or certified mail, on the day on which delivered to such party
(or delivery is refused), addressed to such party as follows: (a) if to
the Company, at 1326 Willow Road, Sturtevant, Wisconsin, 53177, Attention:
Carl G. Schmidt; (b) if to any Bank other than First Chicago, at its
Domestic Office, with a copy to any other address set forth on the
signature pages hereof; and (c) if to First Chicago, either as a Bank or
as Agent, at the addresses for notice set forth on the signature pages
hereof.
SECTION 10.09. Survival of Agreement. All covenants made
herein and in the certificates delivered pursuant hereto shall survive the
execution and delivery to the Banks of the Notes evidencing the Loans and
shall continue in full force and effect so long as any Note or any amount
due hereunder is outstanding and unpaid or the Revolving Loan Commitment
of any Bank has not been terminated.
SECTION 10.10. Expenses of Banks. The Company and the Eligible
Subsidiaries, jointly and severally, shall be liable for and shall pay all
reasonable out-of-pocket expenses incurred by the Agent in connection with
the preparation of this Agreement, the Notes and the other agreements and
documents referred to herein or contemplated hereby (whether or not the
transactions contemplated hereby shall be consummated), the preparation of
any amendment, waiver or consent relating to any of the foregoing, its
receiving of legal advice or other consultation regarding the
interpretation of its rights and obligations with respect to any of the
foregoing, the administration or operation of the Loans pursuant hereto
and all reasonable out-of-pocket expenses (including, without limitation,
legal fees and expenses) incurred by the Agent and each Bank in connection
with the enforcement of the rights of the Agent and the Banks in
connection with this Agreement, the Notes and with respect to any action
which may be instituted by any Person (other than a Bank) against the
Agent or the Banks in respect of any of the foregoing or as a result of
any transactions, action or nonaction arising from the foregoing. The
Company further agrees to indemnify the Agent and each Bank, its
directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or
not the Agent or any Bank is a party thereto) relating to claims by third
parties, which any of them may pay or incur arising out of or relating to
this Agreement, the other Loan Documents, the transactions contemplated
hereby or the direct or indirect application or proposed application of
the proceeds of any Loan or Letter of Credit hereunder, provided however
that no Bank shall be indemnified for any of the foregoing resulting from
its own gross negligence or wilful misconduct. The obligations of the
Company under this Section shall survive the termination of this
Agreement.
SECTION 10.11. Foreign Bank Certifications. Each Bank that is
not created or organized under the laws of the United States of America or
a state or political subdivision thereof shall deliver to the Company (or
an Eligible Subsidiary, if requested) and the Agent within fifteen (15)
days after the date hereof, or if later, the date on which such Bank
becomes a Bank pursuant to Section 10.04 hereof, a true and accurate
certificate executed in duplicate by a duly authorized officer of such
Bank, in a form satisfactory to the Company and the Agent, to the effect
that such Bank is capable under the provisions of an applicable tax treaty
concluded by the United States of America (in which case the certificate
shall be accompanied by two executed copies of Form 1001 of the IRS) or
under Section 1442 of the IRC (in which case the certificate shall be
accompanied by two copies of Form 4224 of the IRS) of receiving payments
of interest hereunder without deduction or withholding of United States
federal income tax. Each Bank further agrees to deliver to the Company
and the Agent from time to time a true and accurate certificate executed
in duplicate by a duly authorized officer of such Bank in a form
satisfactory to the Company and the Agent, before or promptly upon the
occurrence of any event requiring a change in the most recent certificate
previously delivered by it to the Company and the Agent pursuant to this
Section 10.11. Further, to the extent it may lawfully do so, each Bank
which delivers a certificate accompanied by Form 1001 of the IRS covenants
and agrees to deliver to the Company and the Agent within fifteen (15)
days after the date hereof, and every third anniversary of such date
thereafter, on which this Agreement is still in effect, another such
certificate and two accurate and complete original signed copies of Form
1001 (or any successor form or forms required under the IRC or the
applicable regulations promulgated thereunder), and each Bank that
delivers a certificate accompanied by Form 4224 of the IRS covenants and
agrees to deliver to the Company and the Agent within fifteen (15) days
prior to the beginning of each subsequent taxable year of such Bank during
which this Agreement is still in effect, another such certificate and two
accurate and complete original signed copies of IRS Form 4224 (or any
successor form or forms required under the IRC or the applicable
regulations promulgated thereunder). Each such certificate shall certify
as to one of the following:
(i) that such Bank is capable of receiving payments of interest
hereunder without deduction or withholding of United States of
America federal income tax;
(ii) that such Bank is not capable of receiving payments of
interest hereunder without deduction or withholding of United
States of America federal income tax as specified therein but is
capable of recovering the full amount of any such deduction or
withholding from a source other than the Company or Eligible
Subsidiary and will not seek any such recovery from the Company
or Eligible Subsidiary; or
(iii) that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date
such Bank became a party hereto, such Bank is not capable of
receiving payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein and that it is not capable of recovering the
full amount of the same from a source other than the Company or
an Eligible Subsidiary.
Each Bank shall promptly furnish to the Company and the Agent
such additional documents as may be reasonably required by the Company, an
Eligible Subsidiary or the Agent to establish any exemption from or
reduction of any taxes required to be deducted or withheld and which may
be obtained without undue expense to such Bank.
XI. GUARANTY
The Company requests the Banks to extend credit or to permit
credit to remain outstanding to the Eligible Subsidiaries under this
Agreement and, in consideration thereof, the Company hereby absolutely and
unconditionally guarantees prompt payment when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, of
the Subsidiary Obligations incurred by Eligible Subsidiaries.
Company waives notice of the acceptance of this Parent Guaranty
and of the extension or continuation of the Subsidiary Obligations or any
part thereof. Company further waives presentment, protest, notice, demand
or action on delinquency in respect of the Subsidiary Obligations of
Eligible Subsidiaries or any part thereof, including any right to require
the Banks to sue the applicable Eligible Subsidiary or require the Banks
to make demand upon the applicable Eligible Subsidiary for payment, any
other guarantor or any other person obligated with respect to the
Subsidiary Obligations of Eligible Subsidiaries or any part thereof, or
otherwise to enforce payment thereof against any collateral securing such
Subsidiary Obligations or any part thereof
and provided further that if at any time any payment of any portion of
such Subsidiary Obligations is rescinded or must otherwise be restored or
returned upon the insolvency, bankruptcy or reorganization of the Eligible
Subsidiary or otherwise, Company's obligations hereunder with respect to
such payment shall be reinstated at such time as though such payment had
not been made.
The validity and enforceability of this Parent Guaranty shall not be
impaired or affected by any of the following: (a) any extension,
modification or renewal of, or indulgence with respect to, or
substitutions for, the Subsidiary Obligations of Eligible Subsidiaries or
any part thereof or any agreement relating thereto at any time; (b) any
failure or omission to enforce any right, power or remedy with respect to
the Subsidiary Obligations of Eligible Subsidiaries or any part thereof or
any agreement relating thereto, or any collateral securing the Subsidiary
Obligations of Eligible Subsidiaries or any part thereof; (c) any waiver
of any right, power or remedy or of any default with respect to the
Subsidiary Obligations of Eligible Subsidiaries or any part thereof or any
agreement relating thereto or with respect to any collateral securing the
Subsidiary Obligations of Eligible Subsidiaries or any part thereof; (d)
any release, surrender, compromise, settlement, waiver, subordination or
modification, with or without consideration, of any collateral securing
the Subsidiary Obligations of Eligible Subsidiaries or any part thereof,
any other guaranties with respect to the Subsidiary Obligations of
Eligible Subsidiaries or any part thereof, or any other obligation of any
person or entity with respect to the Subsidiary Obligations of Eligible
Subsidiaries or any part thereof; (e) the enforceability or validity of
the Subsidiary Obligations of Eligible Subsidiaries or any part thereof or
the genuineness, enforceability or validity of any agreement relating
thereto or with respect to any collateral securing the Subsidiary
Obligations of Eligible Subsidiaries or any part thereof; or (f) the
application of payments received from any source to the payment of
indebtedness of the Company or an Eligible Subsidiary other than the
Subsidiary Obligations of Eligible Subsidiaries, any part thereof or
amounts which are not covered by this Parent Guaranty even though the Bank
might lawfully have elected to apply such payments to any part or all of
the Subsidiary Obligations of Eligible Subsidiaries or to amounts which
are covered by this Guaranty, all whether or not the Company shall have
had notice or knowledge of any act or omission referred to in the
foregoing clauses (a) through (f) of this paragraph. It is agreed that
Company's liability hereunder is several and independent of any other
guaranties or other obligations at any time in effect with respect to the
Subsidiary Obligations or any part thereof and that Company's liability
hereunder may be enforced regardless of the existence, validity,
enforcement or non-enforcement of any such other guaranties or other
obligations.
Credit may be granted or continued under this Agreement from
time to time by the Banks to the Eligible Subsidiaries without notice to
or authorization from Company regardless of the Eligible Subsidiaries'
financial or other condition at the time of any such grant or
continuation. The Bank shall have no obligation to disclose or discuss
with Company its assessment of the financial condition of the Eligible
Subsidiaries.
Until the Subsidiary Obligations are paid in full, the Company
shall not exercise any right of subrogation with respect to payments made
by the Company pursuant to this Parent Guaranty.
XII. COUNTERPARTS.
This Agreement may be executed in counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one Agreement.
IN WITNESS WHEREOF, the Company, the Banks and the Agent have caused
this Agreement to be duly executed by their duly authorized officers and
delivered as of the day and year first above written.
@@
JOHNSON WORLDWIDE ASSOCIATES, INC.
By:_____________________________________
Name: Carl G. Schmidt
Title: Senior Vice President & CFO
1326 Willow Road
Sturtevant, WI 53177
Attention: Carl G. Schmidt
Telephone No.: 414-884-1531
Telecopier No.: 414-884-1704
Borrower's Signature
Page for the Johnson Worldwide
Credit Agreement
Revolving Loan Eurocurrency THE FIRST NATIONAL BANK OF CHICAGO
Commitment Commitment Individually and as Agent
$26,000,000 $4,000,000 By:_____________________________________
Name: Deborah E. Stevens
Title: Authorized Agent
Domestic and Eurodollar Offices:
One First National Plaza
Suite 0088
Chicago, Illinois 60670-0088
Attention: Deborah E. Stevens
Telex No.: 4330253
Answerback: FNB CUT
Telephone No.: 312-732-2532
Telecopier No.: 312-732-1117
The First National Bank of Chicago's
Signature Page for the Johnson
Worldwide Credit Agreement
Revolving Loan Eurocurrency
Commitment Commitment
$17,333,333.33333333 $2,666,666.66666667 FIRSTAR BANK MILWAUKEE, N.A.
By:__________________________
Name: Bruce Anthony
Title: Vice President
Domestic and Eurodollar Offices:
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Telex No.: 191178
Answerback: FIR WIS
Telephone No.: 414-765-4724
Telecopier No.: 414-765-5062
@@
Firstar Bank, Milwaukee's
Signature Page for the Johnson
Worldwide Credit Agreement
@@
Revolving Loan Eurocurrency M&I MARSHALL & ILSLEY BANK
Commitment Commitment
$8,666,666.66666667 $1,333,333.33333333 By: ___________________________
Name: Stephen F. Geimer
Title: Vice President
Domestic and Eurodollar Offices:
M&I Marshall & Ilsley Bank
770 North Water Street
Milwaukee, Wisconsin 53202
Attention: Steve Geimer
Telex No.: 190470
Answerback: MARIL MIL
Telephone No.: 414-765-7593
Telecopier No.: 414-765-7625
M&I Marshall & Ilsley Bank's
Signature Page for the
Revolving Loan Eurocurrency THE NORTHERN TRUST COMPANY
Commitment Commitment
$8,666,666.66666667 $1,333,333.33333333 By: ___________________________
Name: Joe Kunze
Title:
Domestic and Eurodollar Offices:
50 South LaSalle Street B2
Chicago, Illinois 60603
Telephone No.: 312-444-3175
Telecopier No.: 312-444-7028
The Northern Trust Company's
Signature Page for the Johnson
Worldwide Credit Agreement
Revolving Loan Eurocurrency SOCIETE GENERALE
Commitment Commitment
$17,333,333.33333333 $2,666,666.66666667 By:
____________________________
Name: Robert Bolt
Title:
Societe Generale
181 West Madison Street
Suite 3400
Chicago, Illinois 60602
Telex No.: 190130 SGCHI UT
Telephone No.: 312-578-5014
Telecopier No.: 312-578-5099
@@
Societe Generale's Signature
Page for the Johnson
Worldwide Credit Agreement
EXHIBIT A
FORM OF REVOLVING LOAN NOTE
__________ __, 199_
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), promises to pay, on or before the Expiration Date, to the
order of _________________ (the "Bank") the aggregate unpaid principal
amount of all Revolving Loans made by the Bank to the Company pursuant to
Section 2.01(a) of the Agreement (as hereinafter defined), in immediately
available funds at the main office of The First National Bank of Chicago
in Chicago, Illinois, as Agent, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement.
The Bank shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its
usual practice, the date and amount of each Revolving Loan and the date
and amount of each principal payment hereunder.
This Revolving Loan Note is one of the Revolving Loan Notes
issued pursuant to, and is entitled to the benefits of, the Revolving
Credit Agreement, dated as of November 29, 1995 (which, as it may be
amended or modified from time to time, is herein called the "Agreement"),
among the Company, certain consolidated Subsidiaries of the Company, the
banks party thereto, including the Bank, and The First National Bank of
Chicago, as Agent, to which Agreement reference is hereby made for a
statement of the terms and conditions under which this Revolving Loan Note
may be prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By:____________________________________
Title:___________________________________
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
REVOLVING LOAN NOTE
OF JOHNSON WORLDWIDE ASSOCIATES, INC.,
DATED ____________ __, 199_
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
EXHIBIT B
FORM OF EUROCURRENCY NOTE
_____________ __, 199_
[Johnson Worldwide Associates, Inc., a Wisconsin corporation
(the "Company")] [ _________, (the "Eligible Subsidiary")], promises to
pay, on or before the Expiration Date, to the order of
__________________________________ (the "Bank") the aggregate unpaid
principal amount of all Eurocurrency Loans made by the Bank to the
[Company][Eligible Subsidiary] pursuant to Section 2.03(a) of the
Agreement (as hereinafter defined), in immediately available funds at the
main office of The First National Bank of Chicago in Chicago, Illinois, as
Agent, together with interest on the unpaid principal amount hereof at the
rates and on the dates set forth in the Agreement. All payments shall be
made in the appropriate Alternative Currency.
The Bank shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its
usual practice, the date and amount of each Eurocurrency Loan and the date
and amount of each principal payment hereunder.
This Eurocurrency Note is one of the Eurocurrency Notes issued
pursuant to, and is entitled to the benefits of, the Revolving Credit
Agreement, dated as of November 29, 1995 (which, as it may be amended or
modified from time to time, is herein called the "Agreement"), among [the
Company] [Johnson Worldwide Associates, Inc. (the "Company")], certain
consolidated Subsidiaries of the Company[,including the Eligible
Subsidiary], the banks party thereto, including the Bank, and The First
National Bank of Chicago, as Agent, to which Agreement reference is hereby
made for a statement of the terms and conditions under which this
Eurocurrency Note may be prepaid or its maturity date accelerated.
Capitalized terms used herein and not otherwise defined herein are used
with the meanings attributed to them in the Agreement.
[JOHNSON WORLDWIDE ASSOCIATES, INC.]
[ELIGIBLE SUBSIDIARY]
By: ________________________________
Title: ______________________________
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
EUROCURRENCY NOTE
OF [JOHNSON WORLDWIDE ASSOCIATES, INC.] [ELIGIBLE SUBSIDIARY],
DATED __________ __, 199_
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
EXHIBIT C
FORM OF COMPETITIVE BID NOTE
_________ __, 199_
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), promises to pay, on or before the Expiration Date, to the
order of _____________________ (the "Bank") the aggregate unpaid
principal amount of all Absolute Rate Loans made by the Bank to the
Company pursuant to Section 2.04 of the Agreement (as hereinafter
defined), in lawful money of the United States in immediately available
funds at the main office of the Bank (or if a Default or Event of Default
shall have occurred and be continuing, at the main office of The First
National Bank of Chicago, in Chicago, Illinois, as Agent) together with
interest, in like money and funds, on the unpaid principal amount hereof
at the rates and on the dates determined in accordance with the Agreement.
The Company shall pay each Absolute Rate Loan in full on the last day of
such Absolute Rate Loan's applicable Interest Period.
The Bank shall, and is hereby authorized to, record on the
schedule attached hereto, or otherwise record in accordance with its usual
practice, the date and amount of each Absolute Rate Loan and the date and
amount of each principal payment hereunder.
This Competitive Bid Note is one of the Competitive Bid Notes
issued pursuant to, and is entitled to the benefits of, the Revolving
Credit Agreement, dated as of November 29, 1995 (which, as it may be
amended or modified from time to time, is herein called the Agreement"),
among the Company, certain consolidated Subsidiaries of the Company, the
banks party thereto, including the Bank, and The First National Bank of
Chicago, as Agent, and to which Agreement reference is hereby made for a
statement of the terms and conditions under which this Competitive Bid
Note may be prepaid or its maturity date accelerated. Capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By: _____________________________
Title: ___________________________
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
COMPETITIVE BID NOTE
OF JOHNSON WORLDWIDE ASSOCIATES, INC.,
DATED_________ __, 199_
Principal Maturity Principal
Amount of of Interest Amount Unpaid
Date Loan Period Paid Balance
EXHIBIT D
FORM OF COMPETITIVE BID QUOTE REQUEST
(Section 2.04(a))
Date: ___________, 19
To: [specify Bank or Banks]
From: Johnson Worldwide Associates, Inc. ("Company")
Re: Amended and Restated Credit Agreement dated as of April 3, 1998
(as amended or modified from time to time, the "Agreement")
among the Company, certain consolidated Subsidiaries of the
Company, the Banks party thereto and The First National Bank of
Chicago, as Agent
We hereby give notice pursuant to Section 2.04(a) of the
Agreement that we request Competitive Bid Quotes for the following
proposed Absolute Rate Loan(s):
Borrowing Date: ___________, 19
Principal Amount Interest Period1
$
Upon acceptance by the undersigned of any or all of the Absolute
Rate Loans offered by Banks in response to this request, the undersigned
shall be deemed to affirm as of such date the representations and
warranties made in the Agreement to the extent specified in Article III
thereof. Capitalized terms used herein and not otherwise defined herein
shall have the meanings assigned to such terms in the Agreement.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By: __________________________________
Title:_________________________________
1 At least 1 and up to 270 days, subject to the provisions of the
definitions of Interest Period.
EXHIBIT E
FORM OF COMPETITIVE BID QUOTE
(Section 2.04(b))
Date: ___________, 19
To: Johnson Worldwide Associates, Inc.
Attn:
Re: Competitive Bid Quote to the Company
In response to your invitation dated __________, 19___, we
hereby make the following Competitive Bid Quote pursuant to Section 2.04
of the Agreement (as hereinafter defined) to and on the following terms:
1. Quoting Bank:
2. Person to contact at Quoting Bank:
3. Borrowing Date: __________, 19 1
4. We hereby offer to make Absolute Rate Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
Principal Interest Absolute Minimum
Amount2 Period3 Rate4 Amount5
$
________________________________
1 As specified in the related Competitive Bid Quote Request.
2 Principal amount bid for each Interest Period may not exceed
principal amount requested.
3 At least 1 and up to 270 days, as specified in the related
Competitive Bid Quote Request.
4 Specify rate of interest per annum (rounded to the nearest 1/100 of
1%).
5 Specify minimum amount which the Company may accept (see Section
2.04).
We understand and agree that the offer(s) set forth above,
subject to the satisfaction of the applicable conditions set forth in the
Amended and Restated Credit Agreement dated as of April 3, 1998 (as
amended or modified from time to time, the "Agreement") among the Company,
certain consolidated Subsidiaries of the Company, the Banks party thereto
and The First National Bank of Chicago, as Agent, irrevocably obligates us
to make the Absolute Loan(s) for which any offer(s) are accepted, in whole
or in part. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement.
Very truly yours,
[NAME OF BANK]
Dated: ____________, 19__ By:_________________________
Authorized Officer
EXHIBIT F
FORM OF ELECTION TO PARTICIPATE
Date: ___________, 19__
THE FIRST NATIONAL BANK OF CHICAGO
as Agent (the "Agent") for the Banks referred
to in the Amended and Restated Credit Agreement
dated as of April 3, 1998 (as
the same may be amended or modified from time to time, the
"Agreement") among Johnson Worldwide Associates, Inc.,
certain of its consolidated Subsidiaries, such Banks and the Agent
Dear Sirs:
Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to such terms in the Agreement.
1. The undersigned, [name of Eligible Subsidiary], a
[jurisdiction of incorporation] corporation, hereby elects to be a party
to and an Eligible Subsidiary for purposes of the Agreement, effective on
and after the date hereof.
2. The undersigned hereby agrees to perform all obligations of
an Eligible Subsidiary under, and to be bound in all respects by the
applicable terms of, the Agreement (including, without limitation,
Sections 10.05 and 10.06 thereof, as if this Election to Participate were
referred to therein) and agrees that the Banks and Agent shall be entitled
to the benefits of, and shall have all of the rights and remedies against
the undersigned described in, the Agreement, as if the undersigned were
named as an Eligible Subsidiary therein and were a signatory party
thereto.
3. The undersigned represents and warrants that:
a. Concurrently herewith there are being delivered to the
Agent the documents and certificates required to be
delivered by the undersigned as of the date hereof by
Section 4.03 of the Agreement.
b. Each of the representations and warranties set forth in
subsections (m) and (n) of Article III of the Agreement is
true and correct on the date hereof with the same effect as
if made on and as of such date.
4. This Election to Participate shall be governed by and
construed in accordance with the internal laws of the State of Illinois.
5. This Election to Participate may be signed in any number of
counterparts, each of which shall constitute an original, with the same
effect as if the signature hereto and thereto were upon the same
instrument.
[NAME OF ELIGIBLE SUBSIDIARY]
By: _______________________________
Title: _____________________________
Receipt of the above Election to Participate is hereby
acknowledged on and as of the date set forth above.
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By: _______________________________
Title: _____________________________
Acknowledged and agreed as of
the date first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By: _______________________________
Title: _____________________________
EXHIBIT G
FORM OF ELECTION TO TERMINATE
Date: ______________, 19__
THE FIRST NATIONAL BANK OF CHICAGO
as Agent (the "Agent") for the Banks referred
to in the Amended and Restated Credit Agreement
dated as of April 3, 1998 (as the same may be amended
or modified from time to time, the "Agreement") among
Johnson Worldwide Associates, Inc., certain of its consolidated
Subsidiaries, such Banks and the Agent
Dear Sirs:
Capitalized terms used herein and not otherwise defined herein
shall have the meanings attributed to such terms in the Agreement.
1. The undersigned, [name of Eligible Subsidiary], a
[jurisdiction of incorporation] corporation, hereby elects to terminate
its participation as an Eligible Subsidiary for purposes of the Agreement,
effective as of _______________ .
2. The undersigned hereby agrees to pay in full all
outstanding principal, interest, fees and any other amounts payable by it
on ________________.
3. The undersigned acknowledges and agrees that its
obligations under Sections 2.12, 2.13 and 10.10 of the Agreement shall
continue.
4. This Election to Terminate shall be governed by and
construed in accordance with the internal laws of the State of Illinois.
5. This Election to Terminate may be signed in any number
of counterparts, each of which shall constitute an original, with the same
effect as if the signature hereto and thereto were upon the same
instrument.
[NAME OF ELIGIBLE SUBSIDIARY]
By: _______________________________
Title: _____________________________
Receipt of the above Election to Terminate is hereby
acknowledged on and as of the date set forth above.
THE FIRST NATIONAL BANK OF
CHICAGO, as Agent
By: _______________________________
Title: _____________________________
Acknowledged and agreed as of
the date first above written.
JOHNSON WORLDWIDE ASSOCIATES, INC.
By: _______________________________
Title: _____________________________
Schedule 1
to Amended and Restated Credit Agreement
Litigation
Schedule 2
to Amended and Restated Credit Agreement
ERISA
Schedule 3
to Amended and Restated Credit Agreement
Environmental Matters
Schedule 6.05
to Amended and Restated Credit Agreement
Investments
5
1000
6-MOS
OCT-02-1998
OCT-04-1997
APR-03-1998
4,724
0
87,987
2,536
95,744
202,150
89,461
55,604
333,996
127,206
87,921
0
0
407
113,722
333,996
149,394
149,779
90,857
90,857
50,738
160
4,733
3,291
1,337
1,954
0
0
0
1,954
0.24
0.24
