0000950124-95-002389.txt : 19950810
0000950124-95-002389.hdr.sgml : 19950810
ACCESSION NUMBER: 0000950124-95-002389
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 19950630
FILED AS OF DATE: 19950809
SROS: NYSE
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: ITEL CORP
CENTRAL INDEX KEY: 0000052795
STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-ELECTRICAL APPARATUS & EQUIPMENT, WIRING SUPPLIES [5063]
IRS NUMBER: 941658138
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-10212
FILM NUMBER: 95559951
BUSINESS ADDRESS:
STREET 1: 2 N RIVERSIDE PLZ
STREET 2: STE 1900
CITY: CHICAGO
STATE: IL
ZIP: 60606
BUSINESS PHONE: 3129021515
MAIL ADDRESS:
STREET 1: 2 N RIVERSIDE PLZ
STREET 2: STE 1900
CITY: CHICAGO
STATE: IL
ZIP: 60606
FORMER COMPANY:
FORMER CONFORMED NAME: SSI COMPUTER
DATE OF NAME CHANGE: 19710316
FORMER COMPANY:
FORMER CONFORMED NAME: SSI COMPUTER CORP
DATE OF NAME CHANGE: 19690727
10-Q
1
FORM 10-Q DATED
1
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 JUNE 30, 1995
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934
Commission file number 1-5989
ITEL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 94-1658138
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 North Riverside Plaza
Suite 1900
Chicago, Illinois 60606
(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (312) 902-1515
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
----- -----
At July 31, 1995 there were 26,754,145 shares of Common Stock, $1.00 par value,
of the registrant outstanding.
2
PART I. FINANCIAL INFORMATION
ITEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
1995 1994
----------- -------------
(UNAUDITED)
Current assets:
Cash and equivalents $ 33,300 $ 14,200
Accounts receivable (net of allowances for doubtful
accounts of $7,000 and $6,000, respectively) 376,200 325,900
Inventories, primarily finished goods 305,500 275,800
Other assets 7,100 4,900
----------- -----------
Total current assets 722,100 620,800
Property, at cost 83,200 68,600
Accumulated depreciation (40,900) (35,200)
----------- -----------
Net property 42,300 33,400
Goodwill (net of accumulated amortization
of $48,500 and $45,500 respectively) 184,900 187,900
Discontinued and assets held for sale, net 101,100 105,400
Marketable equity securities -- 64,500
Investment in ANTEC 71,600 69,500
Other assets 36,700 29,400
----------- -----------
$ 1,158,700 $ 1,110,900
=========== ===========
See accompanying notes to the condensed consolidated financial statements.
2
3
ITEL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
1995 1994
----------- ------------
(UNAUDITED)
Current liabilities:
Accounts payable $ 210,600 $ 186,200
Accrued expenses 93,100 79,100
----------- -----------
Total current liabilities 303,700 265,300
Deferred taxes, net 3,700 1,800
Other liabilities 20,800 19,400
Long-term debt 312,400 280,500
----------- -----------
Total liabilities 640,600 567,000
Stockholders' equity:
Common stock 28,000 29,400
Capital surplus 210,600 262,500
Retained earnings 289,300 269,300
Cumulative translation adjustments (9,800) (10,100)
----------- -----------
518,100 551,100
Unrealized loss on marketable equity securities
(net of deferred income taxes) -- (7,200)
----------- -----------
Total stockholders' equity 518,100 543,900
----------- -----------
$ 1,158,700 $ 1,110,900
=========== ===========
See accompanying notes to the condensed consolidated financial statements.
3
4
ITEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
THREE-MONTH PERIODS SIX-MONTH PERIODS
ENDED JUNE 30, ENDED JUNE 30,
---------------------------- ----------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
Revenues $ 542,000 $ 422,900 $ 1,044,900 $ 785,700
Cost of goods sold (405,900) (316,800) (781,700) (585,200)
----------- ----------- ----------- -----------
Gross profit 136,100 106,100 263,200 200,500
Operating expenses (108,900) (87,900) (210,700) (167,100)
Amortization of goodwill (1,500) (1,500) (3,000) (3,000)
----------- ----------- ----------- -----------
Operating income 25,700 16,700 49,500 30,400
Interest expense and other, net (5,400) (6,300) (10,300) (14,000)
Equity earnings in ANTEC 300 2,600 2,100 5,400
Non-recurring item - ANTEC Offering -- 48,200 -- 48,200
Marketable equity securities losses (3,000) (34,400) (3,000) (39,600)
----------- ----------- ----------- -----------
Income from continuing
operations before income taxes 17,600 26,800 38,300 30,400
Income tax expense (8,700) (10,000) (18,300) (10,900)
----------- ----------- ----------- -----------
Income from continuing
operations 8,900 16,800 20,000 19,500
Loss from discontinued
operations (net of related taxes) -- (400) -- (1,300)
----------- ----------- ----------- -----------
Net income $ 8,900 $ 16,400 $ 20,000 $ 18,200
=========== =========== =========== ===========
Income per common and common equivalent share:
Continuing operations $ .32 $ .51 $ .70 $ .59
Net income $ .32 $ .50 $ .70 $ .55
=========== =========== =========== ===========
Weighted average common and
common equivalent shares 28,400 33,000 28,600 33,000
=========== =========== =========== ===========
See accompanying notes to the condensed consolidated financial statements.
4
5
ITEL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
SIX-MONTH PERIODS
ENDED JUNE 30,
------------------------
1995 1994
--------- ---------
Operating activities:
Income from continuing operations $ 20,000 $ 19,500
Adjustments to reconcile income from continuing
operations to net cash provided (used) by continuing
operating activities:
Depreciation 7,300 4,400
Amortization of goodwill 3,000 3,000
Deferred income tax expense 1,800 10,700
Non-recurring item - ANTEC Offering -- (48,200)
Loss on sale of marketable equity securities 3,000 39,600
Equity earnings in ANTEC (2,100) (5,400)
Non-cash financing expense 400 2,400
Other, net 1,300 3,500
Changes in assets and liabilities, net (45,700) (61,500)
--------- ---------
Net cash used by continuing operating
activities (11,600) (32,000)
Discontinued operations and assets held for sale, net 9,700 2,100
--------- ---------
Net cash used by operating activities (1,900) (29,900)
Investing activities:
Sales of marketable equity securities 72,600 47,800
Purchases of property, net (15,900) (7,700)
Sale of ANTEC common stock -- 82,800
Other, net (4,900) 7,600
--------- ---------
Net investing activities 51,800 130,500
--------- ---------
Net cash provided before financing activities 49,900 100,600
Financing activities:
Borrowings 504,000 725,200
Reductions in borrowings (476,300) (784,000)
Purchases of treasury stock (62,900) (13,200)
Proceeds from issuance of common stock 5,200 5,200
Other, net (800) (3,600)
--------- ---------
Net financing activities (30,800) (70,400)
--------- ---------
Cash provided 19,100 30,200
Cash and equivalents at beginning of period 14,200 31,000
--------- ---------
Cash and equivalents at end of period $ 33,300 $ 61,200
========= =========
Supplemental cash flow information:
Interest paid (including allocations to discontinued
operations in 1994) during the period $ 11,400 $ 33,100
========= =========
Income taxes paid during the period $ 8,200 $ 1,600
========= =========
See accompanying notes to the condensed consolidated financial statements.
5
6
ITEL CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of presentation: The accompanying consolidated financial statements should
be read in conjunction with the consolidated financial statements included in
Itel Corporation's ("Itel") Annual Report on Form 10-K for the year ended
December 31, 1994. The condensed consolidated financial information furnished
herein reflects all adjustments (consisting of normal recurring accruals) which
are, in the opinion of management, necessary for a fair presentation of the
condensed consolidated financial statements for the periods shown. All operating
activities of the Company are carried out by its principal subsidiary, Anixter
Inc. ("Anixter"), which is engaged in the sales of networking products for
voice, data, video and electrical power applications.
Principles of consolidation: The condensed consolidated financial statements
include the accounts of Itel and its subsidiaries (collectively "the Company")
after elimination of intercompany transactions.
NOTE 2. MARKETABLE EQUITY SECURITIES LOSSES
In the second quarter of 1995, the Company recorded a $1.8 million after-tax
loss on the sale of its investment in Santa Fe Energy Resources, Inc.
("Energy"). In the second quarter of 1994, the Company wrote down the value of
its investment in SFR equity securities by $21.0 million after-tax. Also, in the
first quarter of 1994, the Company recorded a $3.2 million after-tax loss on the
sale of its investment in Catellus Development Corporation ("Catellus").
6
7
NOTE 3. NON-RECURRING ITEMS
Non-recurring items in 1994 reflect a $29.4 million after-tax gain on the public
offering of shares of common stock of ANTEC Corporation ("ANTEC Offering"). In
the second quarter of 1994 Itel sold 4.0 million shares of ANTEC common stock at
$21.75 per share resulting in net proceeds of approximately $83 million. Itel
provided income taxes relating to the recognized pre-tax book gain.
NOTE 4. SUMMARIZED FINANCIAL INFORMATION OF ANTEC
The Company's ownership interest in ANTEC at June 30, 1995 and 1994 was 30%.
This investment is accounted for under the equity method. The following
summarizes the financial information for ANTEC:
ANTEC CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
JUNE 30, DECEMBER 31,
1995 1994
-------- ------------
(UNAUDITED)
(IN MILLIONS)
Assets:
Current assets $270.9 $234.2
Property, net 26.9 22.4
Goodwill 165.2 167.4
Other assets 14.5 14.0
------ ------
$477.5 $438.0
====== ======
Liabilities and Shareholders' Equity:
Current liabilities $ 89.0 $ 83.1
Long-term debt 151.7 125.2
Shareholders' equity 236.8 229.7
------ ------
$477.5 $438.0
====== ======
7
8
ANTEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
THREE-MONTH PERIODS SIX-MONTH PERIODS
ENDED JUNE 30, ENDED JUNE 30,
------------------------ --------------------
1995 1994 1995 1994
---- ---- ---- ----
(IN MILLIONS)
Revenues $ 165.3 $ 143.1 $ 324.2 $280.8
======== ========= ======= ======
Operating income $ 5.8 $ 10.5 $ 19.5 $ 20.5
======== ========= ======= ======
Income before income tax expense $ 3.0 $ 9.8 $ 11.5 $ 19.2
======== ========= ======= ======
Net income $ 1.1 $ 5.4 $ 5.5 $ 10.6
======== ========= ======= ======
NOTE 5. RELATED PARTY TRANSACTION
On June 27, 1995 the Company agreed to purchase up to 1.9 million shares of its
common stock from Sam Zell, the Company's Chairman, and other related
stockholders. The first 1.3 million shares were purchased on July 10, 1995 at
$36 per share. The remaining .6 million shares may be purchased no later than
December 31, 1996 at $36 per share plus an incremental increase of 6.5% per
annum from the date of the agreement.
8
9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL LIQUIDITY AND CAPITAL RESOURCES
LIQUIDATION OF SIGNAL CAPITAL: The finance business of Signal Capital
Corporation ("Signal Capital") has been included as assets held for sale since
acquisition in 1988. Subsequent to the purchase, Itel sold or liquidated
portions of the portfolio including $855 million in 1989, $78 million in 1990,
$157 million in 1991, $82 million in 1992, $82 million in 1993, $60 million in
1994 and $10 million through June 30, 1995. The $101 million portfolio of
discontinued and assets held for sale at June 30, 1995 represents approximately
7.5% of the original acquired Signal Capital portfolio. The acquired Signal
Capital portfolio is being liquidated and no material amounts of new loans or
investments are being made by Signal Capital. The Company has had and continues
to have discussions with third parties for the sale of substantial portions of
the acquired Signal Capital portfolio of loans and leases. Absent such
transactions, orderly liquidation of the remaining portfolio is expected to
continue over approximately the next two years. The Company continues to reduce
the acquired Signal Capital portfolio in an orderly manner that maximizes its
value to Itel shareholders.
CASH FLOW: Consolidated net cash used by continuing operating activities was
$11.6 million for the first six months of 1995 compared to $32.0 million for the
same period in 1994. Consolidated net cash used by continuing operating
activities in 1995 reflects a $45.7 million net working capital investment used
to fund a $259 million increase in revenues compared to a $61.5 million working
capital increase in 1994. Consolidated cash provided by net investing activities
was $51.8 million for the first six months of 1995 versus $130.5 million for the
same period in 1994. Consolidated investing activities in 1995 include proceeds
of $72.6 million from the sale of the Company's investment in Energy and in 1994
includes $82.8 million of proceeds from the ANTEC Offering and $47.8 million
from the sale of the Company's investment in Catellus.
9
10
Consolidated cash used for net financing activities was $30.8 million for the
first six months of 1995 in comparison to $70.4 million for the first six months
of 1994. The consolidated net financing activities in 1994 include the paydown
of $221 million of subordinated debt. The consolidated net financing activities
in 1995 and 1994 include $62.9 million and $13.2 million of treasury stock
purchases, respectively. Net cash from discontinued operations and assets held
for sale, was $9.7 million for the first six months of 1995 versus $2.1 million
for the same period in 1994. Cash from discontinued operations and assets held
for sale, net in both periods reflects cash received principally from the
reduction of Signal Capital assets which are held for sale.
FINANCINGS: On May 19, 1995, the Company converted its $115 million senior bank
term loan to a revolver ("Corporate Revolver"). The Corporate Revolver is
secured by the Company's investments in the capital stock of Anixter and ANTEC.
The Corporate Revolver had no outstanding borrowings at June 30, 1995.
On March 24, 1995, the Company increased Anixter's secured domestic revolving
line of credit to $425 million, lowered the interest rate spreads and extended
the maturity to 2000. The revolving line of credit is non-recourse to Itel.
At June 30, 1995, in addition to the Corporate Revolver, $197 million was
available under the bank revolving lines of credit at Anixter, of which $63
million was available to pay Itel for intercompany liabilities.
INTEREST: Consolidated net interest expense was $10.3 million and $14.0 million
for the six months ended June 30, 1995 and 1994, respectively. The Company has
entered into interest rate agreements which effectively fix or cap, for a period
of time, the interest rate on a portion of its floating rate obligations. As a
result, the interest rate on approximately 70% of debt obligations at June 30,
1995 is fixed or capped. The impact of interest rate swaps and caps on interest
expense, net for the six months ended June 30, 1995 and 1994 was to increase
interest expense by approximately $.4 million and $6.3 million, respectively.
10
11
CAPITAL EXPENDITURES AND ACQUISITIONS
Consolidated capital expenditures were $15.9 million and $7.7 million for the
first six months of 1995 and 1994, respectively. Increase in Capital
Expenditures is in support of international expansion, increase in Service
offerings, enhanced logistical capabilities and infrastructure required by
general volume growth.
RESULTS OF OPERATIONS
The Company has experienced increased revenues due to the continued growth of
the North American communications and electrical wire and cable products and its
continuing worldwide expansion. While the Company continues to believe that its
revenue base will grow and its worldwide expansion will result in both increased
revenues and operating profits, there can be no assurance of future financial
performance. The Company competes with distributors and manufacturers who sell
products directly or through existing distribution channels to end users or
other resellers. In addition, the Company's future performance could be subject
to economic downturns and possibly rapid changes in applicable technologies.
EARNINGS PER SHARE: Weighted average common and common equivalent shares
outstanding decreased from June 30, 1994 to June 30, 1995 primarily as a result
of Itel's treasury stock purchases in 1994 and 1995. An increase in borrowing
costs associated with stock purchases offset the decrease in shares resulting in
no significant effect on earnings per share.
On June 27, 1995 the Company agreed to purchase up to 1.9 million shares of its
common stock from Sam Zell, the Company's Chairman, and other related
stockholders. The first 1.3 million shares were purchased on July 10, 1995 at
$36 per share. The remaining .6 million shares may be purchased no later than
December 31, 1996 at $36 per share plus an incremental increase of 6.5% per
annum from the date of the agreement.
11
12
QUARTER ENDED JUNE 30, 1995: While operating income increased 54% to $25.7
million, income from continuing operations for the second quarter of 1995
decreased to $8.9 million compared with $16.8 million for the second quarter of
1994 due to special items related to asset dispositions and decreased Antec
earnings. Income from continuing operations for the second quarter of 1995
includes a $1.8 million after-tax charge associated with the sale of the
Company's investment in Energy. 1994 results include an $8.4 million after tax
gain consisting of a $29.4 million after-tax gain on the Antec offering offset
by a $21.0 million after-tax charge associated with the write-down of marketable
equities. Net income was $8.9 million and $16.4 million in the first quarter of
1995 and 1994, respectively.
The Company's revenues during the second quarter of 1995 increased 28% to $542.0
million from $422.9 million in 1994 due to (1) the continued strong demand for
its communication products in North America and Europe, (2) focused marketing
efforts on its electrical wiring systems products and (3) further market
penetration in the Asian and Latin American expansion markets. Revenues by major
geographic market are presented in the following table.
QUARTERS ENDED JUNE 30,
---------------------------
1995 1994
---- ----
(IN MILLIONS)
North America $415.5 $333.2
Europe 105.0 77.8
Asia and Latin America 21.5 11.9
------ ------
$542.0 $422.9
====== ======
The Company's gross profit increased to $136.1 million in the second quarter of
1995 from $106.1 million in the second quarter of 1994 which is consistent with
the sales volume increase.
Operating expenses increased 24% to $108.9 million due to increased volume,
increased spending for new service and logistic initiatives, principally in
North America, and geographic expansion in Asia and Latin America. Spending on
new initiatives and international expansion is planned to increase in future
quarters.
12
13
Operating income increased 54% to $25.7 million in 1995 from $16.7 million in
the second quarter of 1994. Operating income by major geographic market is
presented in the following table.
QUARTERS ENDED JUNE 30,
--------------------------
1995 1994
---- ----
(IN MILLIONS)
North America $22.4 $15.5
Europe 5.0 1.7
Asia and Latin America (1.7) (.5)
----- -----
$25.7 $16.7
===== =====
North America operating income increased due to volume related economies of
scale somewhat offset by increased spending for new service and logistic
initiatives. The significant increase in European profitability is due to volume
related economies of scale and positive operating earnings contributions in most
countries in 1995. Changes in currency exchange rates in the second quarter 1995
versus 1994 also contributed about $.7 million to the improvement in European
operating results.
Consolidated net interest expense for the second quarter of 1995 declined to
$5.4 million from $6.3 million in 1994 due to a reduction of high-cost corporate
debt from the monetization of Itel's non-core assets partially offset by higher
short-term interest rates and increased working capital borrowings.
The consolidated tax provision for the second quarter reflects an effective tax
rate of 49.4% based on pre-tax book income adjusted for nondeductible
amortization of goodwill and start up losses of foreign operations, primarily
Asia and Latin America, which are not currently recognizable. The increase in
the effective rate from 1994 is due to the sale of the Company's rail car
leasing business in the second half of 1994 which exhausted virtually all
previously existing NOL and ITC carryforwards.
13
14
SIX MONTHS ENDED JUNE 30, 1995: Increased operating income of $49.5 million, up
63% from the same period in 1994, was somewhat offset by losses on asset
dispositions and decreased Antec earnings resulting in income from continuing
operations for the first six months of 1995 of $20.0 million compared with $19.5
million for the first six months of 1994. Results in 1995 include a $1.8 million
after-tax charge associated with the sale of the Company's investment in Energy
while results in 1994 include a $5.2 million gain consisting of $29.4 million
after-tax gain on the ANTEC Offering and a $24.2 million after-tax charge
associated with the sale and write-down of marketable equity securities. Net
income was $20.0 million and $18.2 million in the first six months of 1995 and
1994, respectively.
The Company's revenues during the first six months of 1995 increased 33% to
$1,044.9 million from $785.7 million in 1994 due to (1) the continued strong
demand for its communication products in North America and Europe, (2) focused
marketing efforts on its electrical wiring systems products and (3) further
market penetration in the Asian and Latin American expansion markets. Revenues
by major geographic market are presented in the following table.
SIX MONTHS ENDED JUNE 30,
-----------------------------
1995 1994
---- ----
(IN MILLIONS)
North America $ 800.2 $614.9
Europe 205.1 148.7
Asia and Latin America 39.6 22.1
-------- ------
$1,044.9 $785.7
======== ======
Gross profit margins decreased to 25.2% from 25.5% in 1994 due to lower margins
on North America Wire and Cable products and expansion markets, especially Asia,
resulting from increased volume and market share.
14
15
Operating expenses increased 26% to $210.7 million due to increased volume,
increased spending for new service and logistic initiatives, principally in
North America, and geographic expansion in Asia and Latin America. Spending on
new initiatives and international expansion is planned to increase in future
quarters.
Operating income increased 63% to $49.5 million in 1995 from $30.4 million in
the first six months of 1994. Operating income by geographic market is presented
in the following table.
SIX MONTHS ENDED JUNE 30,
-----------------------------
1995 1994
---- ----
(IN MILLIONS)
North America $42.4 $29.2
Europe 10.1 2.6
Asia and Latin America (3.0) (1.4)
----- -----
$49.5 $30.4
===== =====
North America operating income increased due to volume related economies of
scale somewhat offset by increased spending for new service and logistic
initiatives. The significant increase in European profitability is due to volume
related economies of scale and positive operating earnings contributions in most
countries in 1995. Changes in currency exchange rates in the first six months of
1995 versus 1994 contributed $1.2 million to improved European operating
results.
Consolidated net interest expense for the first six months of 1995 declined to
$10.3 million from $14.0 million in 1994 due to a reduction of high-cost
corporate debt from the monetization of Itel's non-core assets partially offset
by higher short-term interest rates and increased working capital borrowings.
15
16
The consolidated tax provision for the six months ended June 30, 1995 reflects
an effective tax rate of 47.8% based on pre-tax book income adjusted for
nondeductible amortization of goodwill and start up losses of foreign
operations, primarily Asia and Latin America, which are not currently
recognizable. The increase in the effective tax rate from the prior year period
is due to the sale of the Company's rail car leasing business in the second half
of 1994 which exhausted virtually all previously existing NOL and ITC
carryforwards.
16
17
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
4.1 Amended and Restated Credit Agreement, dated
May 19, 1995, among Itel Corporation, The Bank of
New York, as Administrative Agent, and the other
banks named therein.
10.1 Stock purchase agreement dated June 27, 1995 between
Itel Corporation and Riverside Partners, SZRL
Investments and Equity Holdings. (Incorporated by
reference from Riverside Partners' Amendment No. 20
to its Schedule 13D, filed for an event on June 27,
1995, relating to the shares of Itel Corporation,
Exhibit 1.)
27.1 Financial Data Schedule
(b) Reports on Form 8-K
None
17
18
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.
ITEL CORPORATION
Date: August 9, 1995 By:_____________________________________
Rod F. Dammeyer
President and Chief Executive Officer
Date: August 9, 1995 By:_____________________________________
Dennis J. Letham
Senior Vice President - Finance
and Chief Financial Officer
18
19
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.
ITEL CORPORATION
Date: August 9, 1995 By: /s/ Rod F. Dammeyer
-------------------------------------
Rod F. Dammeyer
President and Chief Executive Officer
Date: August 9, 1995 By: /s/ Dennis J. Letham
-------------------------------------
Dennis J. Letham
Senior Vice President - Finance
and Chief Financial Officer
EX-4.1
2
AMENDED CREDIT AGREEMENT
1
EXHIBIT 4.1
AMENDED AND RESTATED CREDIT AGREEMENT
by and among
ITEL CORPORATION,
THE LENDERS PARTY HERETO,
AND
THE BANK OF NEW YORK, AS ADMINISTRATIVE AGENT
----------------
$115,000,000
----------------
Dated as of May 19, 1995
2
TABLE OF CONTENTS
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1. Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2. Other Definitional Provisions. . . . . . . . . . . . . . . . . 13
2. AMOUNT AND TERMS OF LOANS. . . . . . . . . . . . . . . . . . . . . . 14
2.1. Loans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.3. Procedure for Borrowing. . . . . . . . . . . . . . . . . . . . 15
2.4. Termination or Reduction of Aggregate
Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . 16
2.5. Prepayments of the Loans. . . . . . . . . . . . . . . . . . . 16
2.6. Conversions. . . . . . . . . . . . . . . . . . . . . . . . . . 17
2.7. Interest Rate and Payment Dates. . . . . . . . . . . . . . . . 18
2.8. Substituted Interest Rate. . . . . . . . . . . . . . . . . . . 19
2.9. Taxes; Net Payments. . . . . . . . . . . . . . . . . . . . . . 20
2.10. Illegality. . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.11. Increased Costs. . . . . . . . . . . . . . . . . . . . . . . 21
2.12. Indemnification for Loss. . . . . . . . . . . . . . . . . . . 22
2.13. Option to Fund. . . . . . . . . . . . . . . . . . . . . . . . 23
2.14. Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . 23
2.15. Capital Adequacy. . . . . . . . . . . . . . . . . . . . . . . 23
2.16. Administrative Agent's Records. . . . . . . . . . . . . . . . 24
3. FEES; PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.1. Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . 24
3.2. Closing Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.3. Pro Rata Treatment and Application of Principal
Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . 25
4.1. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . 25
4.2. Existence and Power. . . . . . . . . . . . . . . . . . . . . . 25
4.3. Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.4. Binding Agreement. . . . . . . . . . . . . . . . . . . . . . . 25
4.5. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.6. Required Consents. . . . . . . . . . . . . . . . . . . . . . . 26
4.7. No Conflicting Agreements. . . . . . . . . . . . . . . . . . . 26
4.8. Compliance with Applicable Laws. . . . . . . . . . . . . . . . 26
4.9. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.10. Governmental Regulations. . . . . . . . . . . . . . . . . . . 27
4.11. Federal Reserve Regulations; Use of Loan
Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.12. Plans; Multiemployer Plans. . . . . . . . . . . . . . . . . . 27
4.13. Financial Statements. . . . . . . . . . . . . . . . . . . . . 27
4.14. Property. . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3
4.15. Franchises, Intellectual Property, Etc. . . . . . . . . . . . 28
4.16. Security Interests. . . . . . . . . . . . . . . . . . . . . . 28
4.17. Environmental Matters. . . . . . . . . . . . . . . . . . . . 28
4.18. Absence of Certain Restrictions. . . . . . . . . . . . . . . 29
4.19. Concerning the Collateral. . . . . . . . . . . . . . . . . . . 29
4.20. Burdensome Obligations. . . . . . . . . . . . . . . . . . . . 30
4.21. No Misrepresentation. . . . . . . . . . . . . . . . . . . . . 30
5. CONDITIONS TO CLOSING . . . . . . . . . . . . . . . . . . . . . . . . 30
5.1. Evidence of Action. . . . . . . . . . . . . . . . . . . . . . 30
5.2. This Agreement. . . . . . . . . . . . . . . . . . . . . . . . 30
5.3. Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.4. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.5. Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.6. Opinion of Counsel to the Borrower. . . . . . . . . . . . . . 31
5.7. Opinion of Special Counsel. . . . . . . . . . . . . . . . . . 31
5.8. Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.9. Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.10. Fees and Expenses of Special Counsel. . . . . . . . . . . . . 32
5.11. Other Documents. . . . . . . . . . . . . . . . . . . . . . . 32
6. CONDITIONS OF LENDING - ALL LOANS . . . . . . . . . . . . . . . . . . 32
6.1. Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . 32
6.2. Loan Closings. . . . . . . . . . . . . . . . . . . . . . . . . 32
6.3. Borrowing Request. . . . . . . . . . . . . . . . . . . . . . . 32
6.4. Documentation and Proceedings. . . . . . . . . . . . . . . . . 32
6.5. Required Acts and Conditions. . . . . . . . . . . . . . . . . 33
6.6. Approval of Special Counsel. . . . . . . . . . . . . . . . . . 33
6.7. Other Documents. . . . . . . . . . . . . . . . . . . . . . . . 33
7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 33
7.1. Financial Statements. . . . . . . . . . . . . . . . . . . . . 33
7.2. Certificates; Other Information. . . . . . . . . . . . . . . . 34
7.3. Legal Existence. . . . . . . . . . . . . . . . . . . . . . . . 37
7.4. Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.5. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.6. Payment of Indebtedness and Performance of
Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.7. Condition of Property. . . . . . . . . . . . . . . . . . . . . 38
7.8. Observance of Legal Requirements. . . . . . . . . . . . . . . 38
7.9. Inspection of Property; Books and Records;
Discussions. . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.10. Licenses, Intellectual Property. . . . . . . . . . . . . . . 38
7.11. Liquidity. . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.12. Asset Coverage Ratio. . . . . . . . . . . . . . . . . . . . . 39
7.13. Liquid Asset Coverage Ratio. . . . . . . . . . . . . . . . . 39
7.14. Minimum Net Worth. . . . . . . . . . . . . . . . . . . . . . 39
8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.1. Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . . 39
8.2. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.3. Merger, Consolidation and Certain Dispositions
of Property. . . . . . . . . . . . . . . . . . . . . . . . . . 40
4
8.4. Contingent Obligations. . . . . . . . . . . . . . . . . . . . 40
8.5. Dividends and Purchase of Stock. . . . . . . . . . . . . . . . 41
8.6. Investments, Loans, Etc. . . . . . . . . . . . . . . . . . . . 41
8.7. Business and Name Changes. . . . . . . . . . . . . . . . . . . 42
8.8. Dispositions of Collateral. . . . . . . . . . . . . . . . . . 42
8.9. Restricted Subsidiaries. . . . . . . . . . . . . . . . . . . . 43
8.10. Certificate of Incorporation and By-laws. . . . . . . . . . . 43
8.11. ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8.12. Prepayments of Indebtedness. . . . . . . . . . . . . . . . . 43
8.13. Sale and Leaseback. . . . . . . . . . . . . . . . . . . . . . 43
8.14. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . 43
8.15. Capital Expenditures. . . . . . . . . . . . . . . . . . . . . 43
8.16. Amendments, Etc. of Certain Agreements. . . . . . . . . . . . 44
8.17. Transactions with Affiliates. . . . . . . . . . . . . . . . . 44
8.18. Issuance of Additional Capital Stock. . . . . . . . . . . . . 44
9. DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
9.1. Events of Default. . . . . . . . . . . . . . . . . . . . . . . 44
10. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . . . . . . . . . . 47
10.1. Appointment. . . . . . . . . . . . . . . . . . . . . . . . . 47
10.2. Delegation of Duties. . . . . . . . . . . . . . . . . . . . . 48
10.3. Exculpatory Provisions. . . . . . . . . . . . . . . . . . . . 48
10.4. Reliance by Administrative Agent. . . . . . . . . . . . . . . 48
10.5. Notice of Default. . . . . . . . . . . . . . . . . . . . . . 49
10.6. Non-Reliance on Administrative Agent and Other
Lenders. . . . . . . . . . . . . . . . . . . . . . . . . . . 49
10.7. Indemnification. . . . . . . . . . . . . . . . . . . . . . . 49
10.8. Administrative Agent in its Individual
Capacity. . . . . . . . . . . . . . . . . . . . . . . . . . . 50
10.9. Successor Administrative Agent. . . . . . . . . . . . . . . . 50
11. OTHER PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.1. Amendments and Waivers. . . . . . . . . . . . . . . . . . . . 51
11.2. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 51
11.3. No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . . 52
11.4. Survival of Representations and Warranties. . . . . . . . . . 53
11.5. Payment of Expenses and Taxes. . . . . . . . . . . . . . . . 53
11.6. Lending Offices. . . . . . . . . . . . . . . . . . . . . . . 53
11.7. Successors and Assigns. . . . . . . . . . . . . . . . . . . . 54
11.8. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 55
11.9. Adjustments; Set-off. . . . . . . . . . . . . . . . . . . . . 56
11.10. Lenders' Representations. . . . . . . . . . . . . . . . . . 56
11.11. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . 57
11.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . 57
11.13. Headings Descriptive. . . . . . . . . . . . . . . . . . . . 57
11.14. Severability. . . . . . . . . . . . . . . . . . . . . . . . 57
11.15. Integration. . . . . . . . . . . . . . . . . . . . . . . . . 58
5
11.16. Consent to Jurisdiction. . . . . . . . . . . . . . . . . . . 58
11.17. Service of Process. . . . . . . . . . . . . . . . . . . . . 58
11.18. No Limitation on Service or Suit. . . . . . . . . . . . . . 58
11.19. WAIVER OF TRIAL BY JURY. . . . . . . . . . . . . . . . . . . 58
11.20. Savings Clause; Security Agreement. . . . . . . . . . . . . 59
EXHIBITS
--------
Exhibit A List of Commitments
Exhibit B Form of Revolving Credit Note
Exhibit C Form of Borrowing Request
Exhibit D Form of Compliance Certificate
Exhibit E Form of Assignment and Acceptance Agreement
Exhibit F Form of Opinion of Counsel to the Borrower
Exhibit G Form of Opinion of Special Counsel
SCHEDULES
---------
Schedule 1.1 List of Lending Offices
Schedule 4.1 List of Subsidiaries; Capitalization
Schedule 4.5 List of Litigation
Schedule 4.12 List of Plans and Multiemployer Plans
Schedule 8.1 List of Existing Indebtedness
Schedule 8.2 List of Existing Liens
Schedule 8.4 List of Existing Contingent Obligations
Schedule 8.6 List of Existing Investments
6
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of May 19, 1995, by
and among ITEL CORPORATION, a Delaware corporation (the "Borrower"), each lender
party hereto (each a "Lender" and, collectively, the "Lenders") and THE BANK OF
NEW YORK, as agent for the Lenders (in such capacity, the "Administrative
Agent").
RECITALS
I. Pursuant to the Term Loan Agreement, dated as of November 10,
1994, by and among the Borrower, the Lenders and the Administrative Agent (as
amended to the date hereof, the "Existing Agreement"), the Lenders made
term loans (the "Existing Loans") to the Borrower.
II. The Borrower, the Lenders and the Administrative Agent desire to
amend and restate the Existing Agreement in its entirety, to, among other
things, convert the Existing Agreement and the Existing Loans to a revolving
credit agreement and revolving credit loans, respectively.
III. For convenience, this Agreement is dated as of May 19, 1995
(the "Restatement Effective Date"), and references to certain matters
relating to the period prior to the date hereof have been deleted.
1. DEFINITIONS
1.1. Defined Terms.
As used in this Agreement, terms defined in the preamble
have the meanings therein indicated, and the following terms have the following
meanings:
"ABR Advances": the Loans (or any portions thereof)
at such time as they (or such portions) are made and/or being maintained at a
rate of interest based upon the Alternate Base Rate.
"Accountants": Ernst & Young (or any successor
thereto), or such other firm of certified public accountants of recognized
national standing selected by the Borrower and reasonably satisfactory to the
Administrative Agent.
"Advance": an ABR Advance or a Eurodollar Advance, as the
case may be.
"Affected Advance": as defined in Section 2.8.
"Affected Principal Amount": in the event that (i) the
Borrower shall fail for any reason to borrow or convert after it shall have
notified the Administrative Agent of its intent to do so in any instance in
which it shall have requested a Eurodollar Advance pursuant to Section 2.3 or
2.6, an amount equal to the principal amount of such Eurodollar Advance; (ii) a
Eurodollar Advance shall terminate for any reason prior to the last day of the
Interest Period applicable thereto, an amount equal to the principal amount of
such
7
Eurodollar Advance; and (iii) the Borrower shall prepay or repay all or any part
of the principal amount of a Eurodollar Advance prior to the last day of the
Interest Period applicable thereto, an amount equal to the principal amount of
such Eurodollar Advance so prepaid or repaid.
"Affiliate": as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, control of a Person
shall mean the power, direct or indirect, (i) to vote 5% or more of the
securities having ordinary voting power for the election of directors of such
Person or (ii) to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
"Aggregate Commitments": on any date, the sum of the
Commitments of all Lenders on such date.
"Agreement": this Amended and Restated Credit Agreement, as
the same may be amended, supplemented or otherwise modified from time to time.
"Alternate Base Rate": on any date, a rate of interest per
annum equal to the higher of (i) the Federal Funds Rate in effect on such date
plus 1/2 of 1% or (ii) the BNY Rate in effect on such date.
"Anixter": Anixter Inc., a Delaware corporation, formerly
known as Anixter Bros., Inc.
"Anixter Credit Agreement": the Amended and Restated Credit
Agreement, dated as of March 11, 1994, as amended by Amendment No. 1, dated as
of July 29, 1994, and Amendment No. 2, dated as of October 21, 1994, among
Anixter, the financial institutions party thereto and Chemical Bank, as agent,
or any replacement or refinancing thereof with the same or different lenders
provided that the proceeds of loans under such replacement or refinancing are to
be used for the same purposes as in the foregoing agreement, as the same may
hereafter be amended, supplemented or otherwise modified from time to time in
accordance with Section 8.16.
"Annualized Anixter EBITDA": at the end of (i) the first
fiscal quarter ending after the Original Effective Date, four times Anixter
EBITDA for such fiscal quarter, (ii) the first two fiscal quarters ending after
the Original Effective Date, two times Anixter EBITDA for such two fiscal
quarters, (iii) the first three fiscal quarters ending after the Original
Effective Date, 1.3333 times Anixter EBITDA for such three fiscal quarters and
(iv) the first four fiscal quarters ending after the Original Effective Date and
each fiscal quarter thereafter, Anixter EBITDA for the immediately preceding
four fiscal quarters.
"Anixter EBITDA": for any period, net income of Anixter and
its Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP, plus the sum of, without duplication, (i) Anixter Interest
Expense, (ii) provision for income taxes of Anixter and its Subsidiaries and
(iii) depreciation, amortization and other non-cash charges of Anixter and its
Subsidiaries, each to the extent deducted in determining such net income for
such period.
"Anixter Interest Expense": for any period, interest expense
(adjusted to give effect to all interest rate swap, interest rate cap or similar
interest rate hedging agreements and fees and expenses in connection therewith)
of Anixter and its Subsidiaries
8
such period, determined on a consolidated basis in accordance with GAAP.
"Anixter Net Worth": at any date of determination, the sum
of all amounts which would be included under shareholders' equity on a
consolidated balance sheet of Anixter and its Subsidiaries determined in
accordance with GAAP as at such date.
"Anixter Total Funded Debt": all indebtedness for borrowed
money of Anixter.
"ANTEC": ANTEC Corporation, a Delaware corporation.
"Applicable Lending Office": in respect of any Lender, (i)
in the case of such Lender's ABR Advances, its Domestic Lending Office and (ii)
in the case of such Lender's Eurodollar Advances, its Eurodollar Lending Office.
"Applicable Margin": at all times during the applicable
periods set forth below: (i) with respect to the unpaid principal amount of ABR
Advances, 0% and (ii) with respect to the unpaid principal amount of Eurodollar
Advances, 1.125%.
"Asset Coverage Ratio": on any date of determination, the
ratio of (i) the sum of (a) the aggregate market value of ANTEC Stock owned by
the Borrower on such date (determined at the close of business on the
immediately preceding Business Day) plus (b) the lesser of (1) the Anixter Net
Worth on such date, or (2) the difference (if positive) between (x) the product
of nine multiplied by Annualized Anixter EBITDA minus (y) Anixter Total Funded
Debt outstanding on such date, to (ii) the outstanding principal balance of the
Loans on such date (less the amount of cash, if any, held on such date as
Collateral by the Administrative Agent pursuant to the Security Agreement as
provided in Section 7.12).
"Assignment and Acceptance Agreement": an assignment and
acceptance agreement executed by an assignor and an assignee pursuant to which
the assignor assigns to the assignee all or any portion of such assignor's Note
and Commitment, substantially in the form of Exhibit E.
"Assignment Fee": as defined in Section 11.7(b).
"Authorized Signatory": the chairman of the board, the
president, any vice president or any other duly authorized officer (acceptable
to the Administrative Agent) of the Borrower.
"Bank of Boston Line": the $2,000,000 letter of credit line
made available by the Bank of Boston to Signal.
"Benefited Lender": as defined in Section 11.9.
"BNY": The Bank of New York.
"BNY Rate": a rate of interest per annum equal to the rate
of interest publicly announced in New York City by BNY from time to time as its
prime commercial
9
lending rate, such rate to be adjusted automatically (without notice) on the
effective date of any change in such publicly announced rate.
"Borrowing Date": any Business Day specified in a Borrowing
Request as a date on which the Borrower requests the Lenders to make Loans.
"Borrowing Request": a request for Loans in the form of
Exhibit C.
"Business Day": for all purposes other than as set forth in
clause (ii) below, (i) any day other than a Saturday, a Sunday or a day on which
commercial banks located in New York City are authorized or required by law or
other governmental action to close and (ii) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
Eurodollar Loans, any day which is a Business Day described in clause (i) above
and which is also a day on which dealings in foreign currency and exchange and
Eurodollar funding between banks may be carried on in London, England.
"Capital Leases": leases which have been, or under GAAP are
required to be, capitalized.
"Cash Collateral": as defined in the Security Agreement.
"Change in Control": any of the following: (i) a "person" or
"group" (within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act)
becoming the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act) of Voting Shares entitled to exercise more than 50% of the total voting
power of all outstanding Voting Shares (including any Voting Shares that are not
then outstanding of which such person or group is deemed the beneficial owner),
unless such beneficial ownership is approved by the board of directors of the
Borrower prior to such acquisition or (ii) a change in the board of directors of
the Borrower in which the individuals who constituted the board of directors of
the Borrower at the beginning of the two-year period immediately preceding such
change (together with any other director whose election by the board of
directors of the Borrower or whose nomination for election by the shareholders
of the Borrower was approved by a vote of at least two-thirds of the directors
then in office who either were directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of the directors then in office. For
purposes of this definition, (i) "Voting Shares" shall mean all outstanding
shares of any class or classes (however designated) of capital Stock entitled to
vote generally in the election of members of the board of directors of the
Borrower and (ii) the "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Closing Fee": as defined in Section 3.2.
"Code": the Internal Revenue Code of 1986, as the same may
be amended from time to time, or any successor thereto, and the rules and
regulations issued thereunder, as from time to time in effect.
"Collateral": collectively, the collateral under and as
defined in the Security Agreement.
"Commitment": in respect of any Lender, such Lender's
undertaking during the Commitment Period to make Loans to the Borrower, subject
to the terms and conditions hereof, in an aggregate outstanding principal amount
not exceeding the amount set forth next to the name of such Lender in Exhibit A
under the heading "Commitments", as
10
the same may be reduced pursuant to Section 2.4.
"Commitment Fee": as defined in Section 3.1.
"Commitment Percentage": as to any Lender, the percentage
set forth opposite the name of such Lender in Exhibit A under the heading
"Commitment Percentage".
"Commitment Period": the period from the Restatement
Effective Date through the Business Day immediately preceding the Maturity Date.
"Compliance Certificate": a certificate substantially in the
form of Exhibit D.
"Consolidated": the Borrower and its Subsidiaries which are
consolidated for financial reporting purposes.
"Contingent Obligation": as to any Person, any obligation of
such Person guaranteeing or in effect guaranteeing any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and whether
arising from partnership or keep-well agreements, including, without limitation,
any obligation of such Person, whether contingent or not contingent (a) to
purchase any such primary obligation or any Property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain net worth,
solvency or other financial statement condition of the primary obligor, (c) to
purchase Property, securities or services primarily for the purpose of assuring
the beneficiary of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation or (d) otherwise to assure,
protect from loss or hold harmless the beneficiary of such primary obligation
against loss in respect thereof; provided, however, that the term Contingent
Obligation shall not include the indorsement of instruments for deposit or
collection in the ordinary course of business. The term Contingent Obligation
shall also include the liability of a general partner in respect of the
liabilities of the partnership in which it is a general partner. The amount of
any Contingent Obligation of a Person shall be deemed to be an amount equal to
the lesser of the (i) stated or (ii) determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonably anticipated liability in respect
thereof as determined by such Person in good faith.
"Conversion Date": the date on which a Eurodollar Advance is
converted to an ABR Advance, or the date on which an ABR Advance is converted to
a Eurodollar Advance, or the date on which a Eurodollar Advance is converted to
a new Eurodollar Advance, all in accordance with Section 2.6.
"Default": any event or condition which constitutes an Event
of Default or which, with the giving of notice, the lapse of time, or any other
condition, would, unless cured or waived, become an Event of Default.
11
"Dollars" and "$": lawful currency of the United States of
America.
"Domestic Lending Office": in respect of any Lender,
initially, the office or offices of such Lender designated as such on Schedule
1.1; thereafter, such other office of such Lender, through which it shall be
making or maintaining ABR Advances, as reported by such Lender to the
Administrative Agent and the Borrower.
"Environmental Laws": any and all federal, state and local
laws relating to the environment, the use, storage, transporting, manufacturing,
handling, discharge, disposal or recycling of hazardous substances, materials or
pollutants or industrial hygiene and including, without limitation, (i) the
Comprehensive Environmental Response, Compensation and Liability Act, as
amended, 42 USCA Section 9601 et seq.; (ii) the Resource Conservation and
Recovery Act of 1976, as amended, 42 USCA Section 6901 et seq.; (iii) the Toxic
Substance Control Act, as amended, 15 USCA Section 2601 et. seq.; (iv) the Water
Pollution Control Act, as amended, 33 USCA Section 1251 et. seq.; (v) the Clean
Air Act, as amended, 42 USCA Section 7401 et seq.; (vi) the Hazardous Materials
Transportation Authorization Act of 1994, as amended, 49 USCA Section 5101 et
seq. and (viii) all rules, regulations judgments decrees injunctions and
restrictions thereunder and any analogous state law.
"ERISA": the Employee Retirement Income Security Act of
1974, as amended from time to time, and the rules and regulations issued
thereunder, as from time to time in effect.
"ERISA Affiliate": any Person which is a member of any group
of organizations (i) described in Section 414(b) or (c) of the Code of which the
Borrower or any Subsidiary is a member, or (ii) solely for purposes of potential
liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code
and the Lien created under Section 302(f) of ERISA and Section 412(n) of the
Code, described in Section 414(m) or (o) of the Code of which the Borrower or
any Subsidiary is a member.
"ERISA Liabilities": without duplication, the aggregate of
all unfunded vested benefits under all Plans and all potential withdrawal
liabilities under all Multiemployer Plans.
"Eurodollar Advances": collectively, the Loans (or any
portions thereof) at such time as they (or such portions) are made and/or being
maintained at a rate of interest based upon the Eurodollar Rate.
"Eurodollar Lending Office": in respect of any Lender,
initially, the office, branch or affiliate of such Lender designated as such on
Schedule 1.1 (or, if no such office branch or affiliate is specified, its
Domestic Lending Office); thereafter, such other office, branch or affiliate of
such Lender through which it shall be making or maintaining Eurodollar Advances,
as reported by such Lender to the Administrative Agent and the Borrower.
"Eurodollar Rate": with respect to any Interest Period
applicable to any Eurodollar Advance, a rate of interest per annum, as
determined by the Administrative Agent, obtained by dividing (and then rounding
to the nearest 1/16 of 1% or, if there is no nearest 1/16 of 1%, then to the
next higher 1/16 of 1%):
(a) the average (rounded upward, if necessary, to
the next 1/16 of 1%) of the respective rates per annum, as reported by BNY to
the Administrative Agent, quoted by BNY to leading banks in the interbank
eurodollar market as the rate at which
12
BNY is offering Dollar deposits in immediately available funds in an amount
equal approximately to the Eurodollar Advance of BNY to which such Interest
Period shall apply for a period equal to such Interest Period, as quoted at
approximately 11:00 a.m. two Business Days prior to the first day of such
Interest Period, by
(b) a number equal to 1.00 minus the aggregate of
the then stated maximum rates during such Interest Period of all reserve
requirements (including, without limitation, marginal, emergency, supplemental
and special reserves), expressed as a decimal, established by the Board of
Governors of the Federal Reserve System and any other banking authority to which
BNY and other major United States money center banks are subject, in respect of
eurocurrency funding (currently referred to as "Eurocurrency liabilities" in
Regulation D of the Board of Governors of the Federal Reserve System) or in
respect of any other category of liabilities including deposits by reference to
which the interest rate on Eurodollar Advances is determined or any category of
extensions of credit or other assets which includes loans by non-domestic
offices of any Lender to United States residents. Such reserve requirements
shall include, without limitation, those imposed under such Regulation D.
Eurodollar Advances shall be deemed to constitute Eurocurrency liabilities and
as such shall be deemed to be subject to such reserve requirements without
benefit of credits for proration, exceptions or offsets which may be available
from time to time to any Lender under such Regulation D. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any change in
any such reserve requirement.
"Event of Default": any of the events specified in Section
9, provided that any requirement for the giving of notice, the lapse of time or
any other condition has been satisfied.
"Existing Agreement": as defined in the Recitals.
"Existing Loans": as defined in the Recitals.
"Federal Funds Rate": for any day, a rate per annum
(expressed as a decimal, rounded upwards, if necessary, to the next higher 1/100
of 1%), equal to the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day, provided that (i) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (ii) if
such rate is not so published for any day, the Federal Funds Rate for such day
shall be the average of the quotations for such day on such transactions
received by BNY as determined by BNY and reported to the Administrative Agent.
"Financial Statements": as defined in Section 4.13.
"GAAP": generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statement by such other entity as may be approved by a significant segment of
the accounting profession, which are applicable to the
13
circumstances as of the date of determination, consistently applied.
"Governmental Authority": any nation or government, any
state or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any court or arbitrator.
"Hazardous Substance": any hazardous or toxic substance,
material or waste, including, but not limited to, (i) those substances,
materials, and wastes listed in the United States Department of Transportation
Hazardous Materials Table (49 CFR 172.111) or by the Environmental Protection
Agency as hazardous substances (40 CFR Part 302) and amendments thereto and
replacements therefor and (ii) any substance, pollutant or material defined as,
or designated in, any Environmental Law as a "hazardous substance," "toxic
substance," "hazardous material," "hazardous waste," "restricted hazardous
waste," "pollutant," "toxic pollutant" or words of similar import.
"Highest Lawful Rate": with respect to any Lender, the
maximum rate of interest, if any, that at any time or from time to time may be
contracted for, taken, charged or received by such Lender on its Note or which
may be owing to such Lender pursuant to this Agreement under the laws applicable
to such Lender and this Agreement.
"Indebtedness": as to any Person, at a particular time, all
items which constitute, without duplication, (a) indebtedness for borrowed money
or the deferred purchase price of Property (other than trade payables incurred
in the ordinary course of business), (b) indebtedness evidenced by notes, bonds,
debentures or similar instruments, (c) obligations with respect to any
conditional sale or title retention agreement, (d) indebtedness arising under
acceptance facilities and the amount available to be drawn under all letters of
credit issued for the account of such Person and, without duplication, all
drafts drawn thereunder to the extent such Person shall not have reimbursed the
issuer in respect of the issuer's payment of such drafts, (e) all liabilities
secured by any Lien on any Property owned by such Person even though such Person
has not assumed or otherwise become liable for the payment thereof (other than
carriers', warehousemen's, mechanics', repairmen's or other like non-consensual
statutory Liens arising in the ordinary course of business), (f) obligations
under Capital Leases, (g) Contingent Obligations and (h) ERISA Liabilities.
"Indemnified Person": as defined in Section 11.11.
"Intellectual Property": all copyrights, trademarks,
patents, trade names and service names.
"Interest Payment Date": (i) as to any ABR Advance, the last
day of each March, June, September and December commencing on the first of such
days to occur after such ABR Advance is made or any Eurodollar Advance is
converted to an ABR Advance, (ii) as to any Eurodollar Advance in respect of
which the Borrower has selected an Interest Period of one, two or three months,
the last day of such Interest Period, and (iii) as to any Eurodollar Advance in
respect of which the Borrower has selected an Interest Period of six months, the
day which is three months after the first day of such Interest Period and the
last day of such Interest Period.
"Interest Period": with respect to any Eurodollar Advance
requested by the Borrower, the period commencing on, as the case may be, the
Borrowing Date or Conversion Date with respect to such Eurodollar Advance and
ending one, two, three or six months thereafter, as selected by the Borrower in
its irrevocable Borrowing Request as
14
provided in Section 2.3 or its irrevocable notice of conversion as provided in
Section 2.6; provided, however, that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a
day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) if, with respect to the borrowing of any Loan
or the conversion of one Advance to another, the Borrower shall fail to give due
notice as provided in Section 2.3 or 2.6, as the case may be, the Borrower shall
be deemed to have elected that such Loan or Advance shall be made as an ABR
Advance;
(iii) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;
(iv) no Interest Period selected in respect of any
Loan shall end after the Maturity Date; and
(v) the Borrower shall select Interest Periods so
as not to have more than five different Interest Periods outstanding at any one
time for all Loans.
"Investments": as defined in Section 8.6.
"Itel Quadrum": Itel Quadrum, Inc., a Delaware corporation
and a wholly-owned Subsidiary of Itel Rail.
"Itel Rail": Itel Rail Holdings Corp., a Delaware
corporation and a wholly-owned Subsidiary of Itel.
"Lien": any mortgage, pledge, hypothecation, assignment,
deposit or preferential arrangement, encumbrance, lien (statutory or other), or
other security agreement or security interest of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement and any capital or financing lease having substantially the same
economic effect as any of the foregoing.
"Liquid Asset Coverage Ratio": on any date of determination,
the ratio of (i) the sum of (a) the market value of the Stock of Santa Fe and
ANTEC held by the Borrower on such date (in each case determined at the close of
business on the immediately preceding Business Day) plus (b) cash held by the
Borrower on such date plus (c) Marketable Securities held by the Borrower on
such date plus (d) the outstanding principal amount of loans on such date (not
in excess of $10,000,000) made by the Borrower to Anixter in order to enable
Anixter to prepay revolving credit loans under the Anixter Credit Agreement,
provided that the Borrower has the currently exercisable right to receive
repayment from Anixter of, and Anixter has sufficient funds to pay, the full
15
amount of such loans, including, without limitation, under the terms of any
subordination provisions applicable thereto, to (ii) the outstanding principal
balance of the Loans on such date.
"Loan" and "Loans": as defined in Section 2.1.
"Loan Availability": on any date of determination, the
excess (if positive) of the Aggregate Commitments over the aggregate outstanding
principal balance of the Loans.
"Loan Documents": collectively, this Agreement, the Notes,
and the Security Agreement.
"Margin Stock": any "margin stock", as said term is defined
in Regulation U of the Board of Governors of the Federal Reserve System, as the
same may be amended or supplemented from time to time.
"Marketable Securities": collectively, (i) securities issued
or guaranteed by the United States of America, (ii) corporate and municipal
bonds rated BBB or better by Standard & Poors or A or better by Moody's
Investors Service, Inc., (iii) common stocks and convertible bonds regularly
tradeable on a recognized exchange, (iv) commercial paper rated not less than A2
by Standard & Poors or P2 by Moody's Investors Service, Inc., (v) banker's
acceptances created by the Administrative Agent or any Lender and (vi)
certificates of deposit with 6 months or less to maturity from the date of
acquisition. Notwithstanding the foregoing, "Marketable Securities" shall not
include any of the Collateral.
"Material Adverse Change": a material adverse change in the
financial condition, operations or business, prospects or Property of (i) the
Borrower or (ii) the Borrower and its Subsidiaries taken as a whole.
"Material Adverse Effect": a material adverse effect on the
financial condition, operations or business, prospects or Property of the
Borrower and its Restricted Subsidiaries taken as a whole.
"Material Restricted Subsidiary": at any time of
determination, each Restricted Subsidiary once it has assets exceeding $500,000.
"Maturity Date": December 31, 1997, or such earlier date on
which the Notes shall become due and payable, whether by acceleration or
otherwise.
"Multiemployer Plan": a plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Offering Proceeds": in respect of any Offering, the
aggregate gross proceeds received by the Borrower from such Offering less (i)
sales and other commissions (including, without duplication, underwriting
discounts and commissions to the extent that the same have not been taken into
account in determining the gross proceeds received by the Borrower) and (ii)
legal and other expenses incurred in connection with such Offering.
"Net Sales Proceeds": the aggregate gross sales proceeds
received in cash from each sale, redemption or other disposition, direct or
indirect, of Collateral, including, without limitation, cash payments received
from time to time on account of the prin-
16
cipal of any note received as consideration for any such sale or other
disposition less (a) sales and other commissions and legal and other expenses
incurred in connection with such sale and (b) taxes reasonably estimated to be
payable in cash by the Borrower or any Material Restricted Subsidiary in respect
of such sale for the taxable year in which such sale occurred (taking into
consideration the Borrower's overall Consolidated tax position for such year).
"Net Worth": at any date of determination, the sum of all
amounts which would be included under shareholders' equity on a Consolidated
balance sheet of the Borrower and its Subsidiaries determined in accordance with
GAAP as at such date.
"Newsprint Guaranty": the Guaranty, dated as of September
28, 1989, as amended, made by Signal Capital Holding Corporation and assumed by
the Borrower to the obligees listed therein, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with Section
8.16.
"Note" and "Notes": as defined in Section 2.2.
"Offering": any public offering or private placement by the
Borrower of shares of its Stock.
"Original Effective Date": November 10, 1994.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA, or any Governmental Authority
succeeding to the functions thereof.
"Permitted Liens": Liens permitted to exist under Section
8.2.
"Person": an individual, a partnership, a corporation, a
business trust, a joint stock company, a trust, an unincorporated association, a
joint venture, a Governmental Authority or any other entity of whatever nature.
"Plan": any employee benefit or other plan established or
maintained by the Borrower or any ERISA Affiliate and which is covered by or
subject to the minimum funding standards of Title IV of ERISA, other than a
Multiemployer Plan.
"Pledged Stock": as defined in the Security Agreement.
"Property": all types of real, personal, tangible,
intangible or mixed Property.
"Real Property": all real Property owned or leased by the
Borrower or any Restricted Subsidiary.
"Registration Rights Agreement": the Registration Rights
Agreement, dated as of June 1, 1993, between the Borrower and ANTEC, as the same
may be amended, modified or otherwise modified from time to time in accordance
with Section 8.16.
17
"Remaining Interest Period": (i) in the event that the
Borrower shall fail for any reason to borrow a Loan in respect of which it shall
have requested a Eurodollar Advance or convert an Advance to a Eurodollar
Advance after it shall have notified the Administrative Agent of its intent to
do so pursuant to Section 2.3 or 2.6, a period equal to the Interest Period that
the Borrower elected in respect of such Eurodollar Advance; or (ii) in the event
that a Eurodollar Advance shall terminate for any reason prior to the last day
of the Interest Period applicable thereto, a period equal to the remaining
portion of such Interest Period if such Interest Period had not been so
terminated; or (iii) in the event that the Borrower shall prepay or repay all or
any part of the principal amount of a Eurodollar Advance prior to the last day
of the Interest Period applicable thereto, a period equal to the period from and
including the date of such prepayment or repayment to but excluding the last day
of such Interest Period.
"Required Lenders": at any time when no Loans are
outstanding, Lenders having Commitments (or if no Commitments then exist,
Lenders having Commitments on the last day on which Commitments did exist) equal
to at least 66-2/3% of the aggregate Commitments of all the Lenders, and at any
time when Loans are outstanding, Lenders holding Notes having an unpaid
principal balance equal to at least 66-2/3% of the aggregate Loans outstanding.
"Restatement Effective Date": as defined in the Recitals.
"Restricted Subsidiary": each Subsidiary of the Borrower
other than Anixter and each Subsidiary of Anixter.
"Santa Fe": Santa Fe Energy Resources Corporation, a
Delaware corporation.
"SBA Guarantee": the Guarantee, dated as of July 29, 1994,
made by the Borrower to the United States Small Business Administration, under
which the Borrower guaranteed the obligations of Seacoast Capital Corporation as
general partner of Seacoast to make certain capital contributions to Seacoast
pursuant to Seacoast's Amended and Restated Agreement of Limited Partnership, as
such SBA Guarantee may be amended, supplemented or otherwise modified from time
to time in accordance with Section 8.16.
"Seacoast": Seacoast Capital Partners L.P., a limited
partnership organized under the laws of the Commonwealth of Massachusetts and a
wholly-owned Subsidiary of Signal.
"SEC": the Securities and Exchange Commission, or any
Governmental Authority succeeding to the functions thereof.
"Security Agreement": the Security Agreement, dated as of
April 12, 1995, made by the Borrower in favor of the Administrative Agent, as
the same may be amended, supplemented or otherwise modified from time to time.
"Signal": Signal Capital Corporation, a Delaware corporation
and a wholly-owned Subsidiary of Itel Rail.
"Special Counsel": Emmet, Marvin & Martin, LLP, special
counsel to the Administrative Agent.
"Stock": any and all shares, rights, interests,
participations, warrants or
18
other equivalents (however designated) of corporate stock.
"Subsidiary": as to any Person, any corporation,
association, partnership, joint venture or other business entity of which such
Person or any Subsidiary of such Person, directly or indirectly, either (i) in
respect of a corporation, owns or controls more than 50% of the outstanding
Stock having ordinary voting power to elect a majority of the board of directors
or similar managing body, irrespective of whether a class or classes shall or
might have voting power by reason of the happening of any contingency, or (ii)
in respect of an association, partnership, joint venture or other business
entity, is entitled to share in more than 50% of the profits and losses, however
determined, provided that for purposes of this definition, the term "Subsidiary"
shall not include Subsidiaries of Signal, the stock of which was acquired as a
result of the lending activities of Signal.
"Tax Sharing Agreement": the Tax Sharing Agreement, dated as
of January 1, 1987, between Anixter and the Borrower, as the same may be
amended, supplemented or otherwise modified from time to time pursuant to
Section 8.16.
"Taxes": any present or future income, stamp or other taxes,
levies, imposts, duties, fees, assessments, deductions, withholdings, or other
charges of whatever nature, now or hereafter imposed, levied, collected,
withheld, or assessed by any Governmental Authority.
1.2. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the
meanings given such terms herein when used in the Loan Documents or any
certificate, opinion or other document made or delivered pursuant hereto or
thereto, unless otherwise defined therein.
(b) As used in the Loan Documents and in any certificate,
opinion or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in Section 1.1, and accounting terms partly defined
in Section 1.1, to the extent not defined, shall have the respective meanings
given to them under GAAP.
(c) The words "hereof", "herein", "hereto" and "hereunder"
and similar words when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
schedule and exhibit references contained herein shall refer to Sections hereof
or schedules or exhibits hereto unless otherwise expressly provided herein.
(d) The word "or" shall not be exclusive; "may not" is
prohibitive and not permissive.
(e) Unless the context otherwise requires, words in the
singular number include the plural, and words in the plural include the
singular.
(f) Unless specifically provided in a Loan Document to the
contrary, references to time shall refer to New York City time.
19
(g) Unless specifically provided in a Loan Document to the
contrary, in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the words "to"
and "until" each means "to but excluding".
(h) References in any Loan Document to a fiscal period shall
refer to that fiscal period of the Borrower.
2. AMOUNT AND TERMS OF LOANS.
2.1. Loans.
Pursuant to the Existing Agreement, the Borrower borrowed
the Existing Loans. On the Restatement Effective Date, and subject to the terms
and conditions hereof, the aggregate outstanding principal balance of the
Existing Loans shall be converted to revolving credit loans. Subject to the
terms and conditions hereof, each Lender severally agrees to make revolving
credit loans (each, together with each Existing Loan being converted as set
forth above, a "Loan" and, as the context may require, collectively with all
other Loans of such Lender, with the Loans of all other Lenders and the Existing
Loans being converted as set forth above, the "Loans") to the Borrower from time
to time during the Commitment Period, provided, however, that immediately after
giving effect thereto (i) the outstanding principal balance of such Lender's
Loans would not exceed such Lender's Commitment, and (ii) the aggregate
outstanding principal balance of all Lenders' Loans would not exceed the
Aggregate Commitments. During the Commitment Period, the Borrower may borrow,
prepay in whole or in part and reborrow under the Aggregate Commitments, all in
accordance with the terms and conditions of this Agreement. Subject to the
provisions of Sections 2.3 and 2.6, Loans may be (a) ABR Advances, (b)
Eurodollar Advances or (c) any combination thereof.
2.2. Notes.
The Loans made by a Lender shall be evidenced by a
promissory note of the Borrower, substantially in the form of Exhibit B, with
appropriate insertions therein as to date and principal amount (each, as
indorsed or modified from time to time, a "Note" and, collectively with the
Notes of all other Lenders, the "Notes"), payable to the order of such Lender
for the account of its Applicable Lending Office and representing the obligation
of the Borrower to pay the lesser of (i) the original amount of the Commitment
of such Lender and (ii) the aggregate unpaid principal balance of all Loans made
by such Lender, with interest thereon as prescribed in Section 2.7. Each Note
shall (i) be dated the Restatement Effective Date, (ii) be stated to mature on
the Maturity Date and (iii) bear interest from the date thereof on the unpaid
principal balance thereof at the applicable interest rate or rates per annum
determined as provided in Section 2.7. Interest on each Note shall be payable as
specified in Section 2.7. The (i) date and amount of each Loan made by a Lender,
(ii) its character as an ABR Advance, a Eurodollar Advance or a combination
thereof, (iii) the interest rate and Interest Period (if any) applicable to
Eurodollar Advances, and (iv) each payment and prepayment of the principal
thereof, shall be recorded by such Lender on its books and, prior to any
transfer of its Note, indorsed by such Lender on the schedule attached thereto
or any continuation thereof, provided that the failure of such Lender to make
any such recordation or indorsement shall not affect the obligations of the
Borrower to make payment when due of any amount owing under the Loan Documents.
Interest on each Note shall be payable as specified in Section 2.7. Upon receipt
of each Lender's Note pursuant to Section 5, the Administrative Agent shall
20
mail such Note to such Lender.
2.3. Procedure for Borrowing.
(a) The Borrower may borrow under the Aggregate Commitments
on any Business Day during the Commitment Period, provided, however, that the
Borrower shall notify the Administrative Agent (by telephone or telecopy) no
later than 11:00 A.M., three Business Days prior to the requested Borrowing
Date, in the case of Eurodollar Advances and 11:00 A.M., one Business Day prior
to the requested Borrowing Date, in the case of ABR Advances, specifying (A) the
aggregate principal amount to be borrowed under the Aggregate Commitments, (B)
the requested Borrowing Date, (C) whether the borrowing is to consist of
Eurodollar Advances, ABR Advances, or a combination thereof, and (D) if the
borrowing is to consist of Eurodollar Advances, the length of the Interest
Period or Periods for such Eurodollar Advances (subject to the provisions of the
definition of Interest Period). Each such notice shall be irrevocable and
confirmed immediately by delivery to the Administrative Agent of a Borrowing
Request. Each borrowing shall be in an aggregate principal amount equal to
$5,000,000 or such amount plus a whole multiple of $1,000,000 in excess thereof,
or, if less, the unused amount of the Aggregate Commitments. Upon receipt of
each notice of borrowing from the Borrower, the Administrative Agent shall
promptly notify each Lender thereof. Subject to its receipt of the notice
referred to in the preceding sentence, each Lender will make the amount of its
Commitment Percentage of each borrowing of Loans available to the Administrative
Agent for the account of the Borrower at the office of the Administrative Agent
set forth in Section 11.2 not later than 12:00 Noon on the relevant Borrowing
Date requested by the Borrower, in funds immediately available to the
Administrative Agent at such office. The amounts so made available to the
Administrative Agent on such Borrowing Date will then, subject to the
satisfaction of the terms and conditions of this Agreement, as determined by the
Administrative Agent, be made available on such date to the Borrower by the
Administrative Agent at the office of the Administrative Agent specified in
Section 11.2 by crediting the account of the Borrower on the books of such
office with the aggregate of said amounts received by the Administrative Agent.
(b) Unless the Administrative Agent shall have received
prior notice from a Lender (by telephone or otherwise, such notice to be
promptly confirmed by fax or other writing) that such Lender will not make
available to the Administrative Agent such Lender's Commitment Percentage of the
Loans requested by the Borrower, the Administrative Agent may assume that such
Lender has made such share available to the Administrative Agent on the
Borrowing Date in accordance with this Section, provided that such Lender
received notice of the proposed borrowing from the Administrative Agent, and the
Administrative Agent may, in reliance upon such assumption, make available to
the Borrower on the Borrowing Date a corresponding amount. If and to the extent
such Lender shall not have so made its Commitment Percentage of such Loans
available to the Administrative Agent, such Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount (to the extent not previously paid by the other), together with interest
thereon for each day from the date such amount is made available to the Borrower
to the date such amount is paid to the Administrative Agent, at a rate per annum
equal to, in the case of the Borrower, the applicable interest rate set forth in
Section 2.7 for ABR Advances, and, in the case of such Lender, the Federal Funds
Rate in effect on each such day (as determined by the Administrative Agent).
21
Such payment by the Borrower, however, shall be without prejudice to its rights
against such Lender. If such Lender shall pay to the Administrative Agent such
corresponding amount, such amount so paid shall constitute such Lender's Loan as
part of the Loans for purposes of this Agreement, which Loan shall be deemed to
have been made by such Lender on the Borrowing Date applicable to such Loans.
(c) If a Lender makes a new Loan on a Borrowing Date on
which the Borrower is to repay a Loan from such Lender, such Lender shall apply
the proceeds of such new Loan to make such repayment, and only the excess of the
proceeds of such new Loan over the Loan being repaid need be made available to
the Administrative Agent.
2.4. Termination or Reduction of Aggregate Commitments.
(a) Voluntary Reductions. The Borrower shall have the right,
upon at least five Business Days' prior written notice to the Administrative
Agent, at any time to terminate the Aggregate Commitments or from time to time
to permanently reduce the Aggregate Commitments to an amount not less than the
sum of the aggregate principal balance of the Loans then outstanding (after
giving effect to any contemporaneous prepayment thereof), provided, however,
that any such reduction shall be in the amount of $5,000,000 or such amount plus
a whole multiple of $1,000,000 in excess thereof.
(b) Mandatory Reductions. The Aggregate Commitments shall be
permanently reduced by the amount, if any, by which the amount of a required
prepayment pursuant to Sections 2.5(b) or 2.5(c) exceeds the outstanding
principal balance of the Loans on the date of such required prepayment.
(c) Mandatory Scheduled Reductions. On the dates set forth
below, the Aggregate Revolving Credit Commitments shall be permanently reduced
to the following amounts:
Amount of
Aggregate
Date Commitments
---- -----------
December 31, 1996 $86,250,000
December 31, 1997 $ -0- (d)I n
=====
General. Reductions of the Aggregate Commitments shall be applied pro rata
according to the Commitment of each Lender. Simultaneously with each reduction
of the Aggregate Commitments under this Section, the Borrower shall pay the
Commitment Fee accrued on the amount by which the Aggregate Commitments have
been reduced and prepay the Loans as required by Section 2.5(e).
2.5. Prepayments of the Loans.
(a) Voluntary Prepayments. The Borrower may, at its option,
prepay the Loans, in whole or in part, without premium or penalty, at any time
and from time to time by notifying the Administrative Agent in writing on or
before the Business Day of the proposed prepayment date in the case of Loans
consisting of ABR Advances and at least three Business Days prior to the
proposed prepayment date in the case of Loans consisting of Eurodollar Advances,
specifying the Loans to be prepaid consist of ABR Advances, Eurodollar Advances
or a combination thereof, the amount to be prepaid and the date of prepayment.
Such notice shall be irrevocable and the amount specified in such notice shall
be due and payable on the date specified, together with accrued interest to the
date of such
22
payment on the amount prepaid. Upon receipt of such notice, the Administrative
Agent shall promptly notify each Lender in respect thereof. Partial prepayments
of the Loans shall be in an aggregate principal amount of $1,000,000 or such
amount plus a whole multiple of $1,000,000 in excess thereof, or, if less, the
outstanding principal balance of the Loans. After giving effect to any partial
prepayment with respect to Eurodollar Advances which were made (whether as the
result of a borrowing or a conversion) on the same date and which had the same
Interest Period, the outstanding principal amount of such Eurodollar Advances
shall exceed (subject to Section 2.6) $5,000,000 or such amount plus a whole
multiple of $1,000,000 in excess thereof.
(b) Mandatory Prepayments Relating to Sales of Collateral.
The Borrower shall prepay the Loans in the amounts and to the extent required by
Section 8.8 in connection with certain sales and other dispositions of
Collateral, such prepayment to be made on the date of the receipt of the Net
Sales Proceeds giving rise to such prepayment.
(c) Mandatory Prepayments in Respect of an Offering. In the
event of any Offering, the Borrower shall prepay the Loans one Business Day
after the receipt by the Borrower of the Net Offering Proceeds thereof in an
amount equal to 100% of such Net Offering Proceeds.
(d) Mandatory Prepayments Relating to the Incurrence of
Certain Indebtedness. In the event that the Borrower or any Material Restricted
Subsidiary incurs any Indebtedness described in Section 8.1(v), the Borrower
shall prepay the Loans in an amount equal to the amount of such Indebtedness,
such prepayment to be made on the date of the incurrence of such Indebtedness.
(e) Mandatory Prepayments of Loans Relating to Reductions of
the Aggregate Commitments. Simultaneously with each reduction of the Aggregate
Commitments under Section 2.4(b) and (c), the Borrower shall prepay the Loans by
the amount, if any, by which the aggregate unpaid principal balance of the Loans
exceeds the amount of the Aggregate Commitments as so reduced.
(f) In General. All prepayments shall be made together with
accrued interest to the date of such payment on the amount prepaid. If any
prepayment is made in respect of any Eurodollar Advance, in whole or in part,
prior to the last day of the applicable Interest Period, the Borrower agrees to
indemnify the Lenders in accordance with Section 2.12.
2.6. Conversions.
(a) The Borrower may elect from time to time to convert
Eurodollar Advances to ABR Advances by giving the Administrative Agent at least
one Business Day's prior irrevocable notice of such election, specifying the
amount to be so converted, provided, that any such conversion of Eurodollar
Advances shall only be made on the last day of the Interest Period applicable
thereto. In addition, the Borrower may elect from time to time to convert ABR
Advances to Eurodollar Advances or to convert Eurodollar Advances to new
Eurodollar Advances by giving the Administrative Agent at least three Business
Days' prior irrevocable notice of such election, specifying the amount to be so
converted and the initial Interest Period relating thereto, provided that any
such con- 23
version of ABR Advances to Eurodollar Advances shall only be made on a Business
Day and any such conversion of Eurodollar Advances to new Eurodollar Advances
shall only be made on the last day of the Interest Period applicable to the
Eurodollar Advances which are to be converted to such new Eurodollar Advances.
The Administrative Agent shall promptly provide the Lenders with notice of any
such election. ABR Advances and Eurodollar Advances may be converted pursuant to
this Section in whole or in part, provided that conversions of ABR Advances to
Eurodollar Advances, or Eurodollar Advances to new Eurodollar Advances, shall be
in an aggregate principal amount of $5,000,000 or such amount plus a whole
multiple of $1,000,000 in excess thereof.
(b) Notwithstanding anything in this Section to the
contrary, no ABR Advance may be converted to a Eurodollar Advance, and no
Eurodollar Advance may be converted to a new Eurodollar Advance, if the Borrower
or the Administrative Agent has knowledge that a Default or Event of Default has
occurred and is continuing either (i) at the time the Borrower shall notify the
Administrative Agent of its election to convert or (ii) on the requested
Conversion Date. In such event, such ABR Advance shall be automatically
continued as an ABR Advance or such Eurodollar Advance shall be automatically
converted to an ABR Advance on the last day of the Interest Period applicable to
such Eurodollar Advance. If an Event of Default shall have occurred and be
continuing, the Administrative Agent shall, at the request of the Required
Lenders, notify the Borrower (by telephone or otherwise) that all, or such
lesser amount as the Required Lenders shall designate, of the outstanding
Eurodollar Advances shall be automatically converted to ABR Advances, in which
event such Eurodollar Advances shall be automatically converted to ABR Advances
on the date such notice is given.
(c) Each conversion shall be effected by each Lender by
applying the proceeds of its new ABR Advance or Eurodollar Advance, as the case
may be, to its Advances (or portion thereof) being converted (it being
understood that such conversion shall not constitute a borrowing for purposes of
Sections 4, 5 or 6).
2.7. Interest Rate and Payment Dates.
(a) Prior to Maturity. Except as otherwise provided in
Section 2.7(b), prior to maturity, the Loans shall bear interest on the
outstanding principal balance thereof at the applicable interest rate or rates
per annum set forth below:
ADVANCES RATE
-------- ----
Each ABR Advance Alternate Base Rate plus
the Applicable Margin.
Each Eurodollar Eurodollar Rate for the
Advance applicable Interest
Period plus the Applicable
Margin.
(b) Event of Default. After the occurrence and during the
continuance of a Default or an Event of Default, the outstanding principal
balance of the Loans shall bear interest at a rate per annum equal to 2% plus
the rate which would otherwise be applicable under Section 2.7(a), and any
overdue interest or other amount payable under the Loan Documents shall bear
interest at a rate per annum equal to the Alternate Base Rate plus the
Applicable Margin plus 2%. All such interest shall be payable on demand.
(c) General. Interest on (i) ABR Advances to the extent
based on the
24
BNY Rate shall be calculated on the basis of a 365 or 366-day year (as the case
may be), and (ii) ABR Advances to the extent based on the Federal Funds Rate and
on Eurodollar Advances shall be calculated on the basis of a 360-day year, in
each case for the actual number of days elapsed, including the first day but
excluding the last. Except as otherwise provided in Section 2.7(b), interest
shall be payable in arrears on each Interest Payment Date and upon payment
(including prepayment) of the Loans. Any change in the interest rate on the
Loans resulting from a change in the Alternate Base Rate shall become effective
as of the opening of business on the day on which such change shall become
effective. The Administrative Agent shall, as soon as practicable, notify the
Borrower and the Lenders of the effective date and the amount of each such
change in the Alternate Base Rate, but any failure to so notify shall not in any
manner affect the obligation of the Borrower to pay interest on the Loans in the
amounts and on the dates required. Each determination of the Alternate Base Rate
or a Eurodollar Rate by the Administrative Agent pursuant to this Agreement
shall be conclusive and binding on the Borrower and the Lenders absent manifest
error. At no time shall the interest rate payable on the Loans of any Lender,
together with the Commitment Fee, the Closing Fee and all other amounts payable
under the Loan Documents, to the extent the same are construed to constitute
interest, exceed the Highest Lawful Rate applicable to such Lender. If interest
payable to a Lender on any date would exceed the maximum amount permitted by the
Highest Lawful Rate applicable to such Lender, such interest payment shall
automatically be reduced to such maximum permitted amount, and interest for any
subsequent period, to the extent less than the maximum amount permitted for such
period by the Highest Lawful Rate, shall be increased by the unpaid amount of
such reduction. Any interest actually received for any period in excess of such
maximum allowable amount for such period shall be deemed to have been applied as
a prepayment of the Loans. The Borrower acknowledges that to the extent interest
payable on ABR Advances is based on the BNY Rate, such rate is only one of the
bases for computing interest on loans made by the Lenders, and by basing
interest payable on ABR Advances on the BNY Rate, the Lenders have not committed
to charge, and the Borrower has not in any way bargained for, interest based on
a lower or the lowest rate at which the Lenders may now or in the future make
loans to other borrowers.
2.8. Substituted Interest Rate.
In the event that (i) the Administrative Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that by reason of circumstances affecting the interbank eurodollar
market either adequate and reasonable means do not exist for ascertaining the
Eurodollar Rate applicable pursuant to Section 2.7 or (ii) the Required Lenders
shall have notified the Administrative Agent that they have determined (which
determination shall be conclusive and binding on the Borrower) that the
applicable Eurodollar Rate will not adequately and fairly reflect the cost to
such Lenders of maintaining or funding loans bearing interest based on such
Eurodollar Rate, with respect to any portion of the Loans that the Borrower has
requested be made as Eurodollar Advances or Eurodollar Advances that will result
from the requested conversion of any portion of the Advances into Eurodollar
Advances (each, an "Affected Advance"), the Administrative Agent shall promptly
notify the Borrower and the Lenders (by telephone or otherwise, to be promptly
confirmed in writing) of such determination, on or, to the extent practicable,
prior to the requested Borrowing Date or Conversion Date for such Affected
Advances. If the Administrative Agent shall give such notice, (a) any Affected
Advances shall be made as ABR Advances, (b) the Advances (or any portion
thereof) that were to
25
have been converted to Affected Advances shall be converted to or continued as
ABR Advances and (c) any outstanding Affected Advances shall be converted, on
the last day of the then current Interest Period with respect thereto, to ABR
Advances. Until any notice under clauses (i) or (ii), as the case may be, of
this Section has been withdrawn by the Administrative Agent (by notice to the
Borrower promptly upon either (x) the Administrative Agent having determined
that such circumstances affecting the interbank eurodollar market no longer
exist and that adequate and reasonable means do exist for determining the
Eurodollar Rate pursuant to Section 2.7 or (y) the Administrative Agent having
been notified by such Required Lenders that circumstances no longer render the
Advances (or any portion thereof) Affected Advances), no further Eurodollar
Advances shall be required to be made by the Lenders nor shall the Borrower have
the right to convert all or any portion of the Loans to Eurodollar Advances.
2.9. Taxes; Net Payments.
(a) All payments made by the Borrower under the Loan
Documents shall be made free and clear of, and without reduction for or on
account of, any Taxes required by law to be withheld from any amounts payable
under the Loan Documents. In the event that the Borrower is prohibited by law
from making payments under the Loan Documents free of deductions or
withholdings, the Borrower shall pay such additional amounts to the
Administrative Agent, for the benefit of the Lenders, as may be necessary in
order that the actual amounts received by each Lender in respect of interest and
any other amounts payable under the Loan Documents after such deduction or
withholding (and after payment or withholding of any additional Taxes or other
charges due as a consequence of the payment of such additional amounts) shall
equal the amount which would have been received if such deduction or withholding
were not required. In the event that any such deduction or withholding can be
reduced or nullified as a result of the application of any relevant double
taxation convention, the Administrative Agent and the Lenders will, at the
expense of the Borrower, cooperate with the Borrower in making application to
the relevant taxing authorities seeking to obtain such reduction or
nullification, provided, however, that the Administrative Agent and the Lenders
shall have no obligation to engage in litigation with respect thereto. If the
Borrower shall make any payments under this Section or shall make any deductions
or withholdings from amounts paid under the Loan Documents, the Borrower shall
forthwith forward to the Administrative Agent original or certified copies of
official receipts or other evidence acceptable to the Administrative Agent
establishing such payment and the Administrative Agent in turn shall distribute
copies of such receipts to each Lender. If payments to a Lender under the Loan
Documents are or become subject to any withholding, such Lender shall (unless
otherwise required by a Governmental Authority or as a result of any law, rule,
regulation, order or similar directive applicable to such Lender) designate a
different office or branch to which payments are to be made under the Loan
Documents from that initially selected by such Lender, if such designation would
avoid such withholding and will not be otherwise disadvantageous to such Lender.
In the event that a Lender receives a refund or credit for taxes paid by the
Borrower under this Section, such Lender shall promptly notify the
Administrative Agent and the Borrower of such fact and shall remit to the
Borrower the amount of such refund or credit applicable to the payments made by
the Borrower in respect of such Lender under this Section. If a Lender believes
that it is entitled to such a refund or credit which it would be obligated to
remit to the Borrower pursuant to the preceding sentence, such Lender shall, in
good faith, use reasonable efforts to seek to obtain such refund or credit,
provided that such Lender would, in its sole discretion, suffer no economic,
legal or regulatory disadvantage therefrom.
(b) Each Lender (and any holder of a participation interest
from such
26
Lender) shall deliver to the Borrower and the Administrative Agent such
certificates, documents, or other evidence as the Borrower or the Administrative
Agent may require from time to time as are necessary to establish that such
Lender (or participant) is not subject to withholding under Section 1441 or 1442
of the Code or as may be necessary to establish, under any law imposing upon the
Borrower, whether existing now or hereafter, an obligation to withhold any
portion of the payments made by the Borrower under the Loan Documents, that
payments to the Administrative Agent on behalf of such Lender (or participant)
are not subject to withholding. Notwithstanding any provision herein to the
contrary, the Borrower shall have no obligation to pay to any Lender (or
participant) any amount which the Borrower is liable to withhold due to, and
during the continuation of, the failure of such Lender (or participant) to file
any statement of exemption required by the Code.
2.10. Illegality.
Notwithstanding any other provisions herein, if any law,
regulation, treaty or directive, or any change therein or in the interpretation
or application thereof, shall make it unlawful for any Lender to make or
maintain its Eurodollar Advances as contemplated by this Agreement, (i) the
commitment of such Lender hereunder to make Eurodollar Advances or convert ABR
Advances to Eurodollar Advances shall forthwith be suspended and (ii) such
Lender's Loans then outstanding as Eurodollar Advances affected hereby, if any,
shall be converted automatically to ABR Advances on the last day of the then
current Interest Period applicable thereto or within such earlier period as
required by law. If the commitment of any Lender with respect to Eurodollar
Advances is suspended pursuant to this Section and such Lender shall notify the
Administrative Agent and the Borrower that it is once again legal for such
Lender to make or maintain Eurodollar Advances, such Lender's commitment to make
or maintain Eurodollar Advances shall be reinstated.
2.11. Increased Costs.
In the event that any law, regulation, treaty or directive
hereafter enacted, promulgated, approved or issued or any change in any
presently existing law, regulation, treaty or directive therein or in the
interpretation or application thereof by any Governmental Authority charged with
the administration thereof or compliance by any Lender (or any corporation
directly or indirectly owning or controlling such Lender) with any request or
directive from any central bank or other Governmental Authority, agency or
instrumentality:
(a) does or shall subject any Lender to any Taxes of any
kind whatsoever with respect to any Eurodollar Advances or its obligations under
this Agreement to make Eurodollar Advances, or change the basis of taxation of
payments to any Lender of principal, interest or any other amount payable
hereunder in respect of its Eurodollar Advances, including any Taxes required to
be withheld from any amounts payable under the Loan Documents (except for
imposition of, or change in the rate of, tax on the overall net income of such
Lender or its Applicable Lending Office for any of such Advances by the
jurisdiction in which such Lender is incorporated or has its principal office or
such Applicable Lending Office, including, in the case of Lenders incorporated
in any State of the United States such tax imposed by the United States); or
27
(b) does or shall impose, modify or make applicable any
reserve, special deposit, compulsory loan, assessment, increased cost or similar
requirement against assets held by, or deposits of, or advances or loans by, or
other credit extended by, or any other acquisition of funds by, any office of
such Lender in respect of its Eurodollar Advances which is not otherwise
included in the determination of the Eurodollar Rate;
and the result of any of the foregoing is to increase the cost to such Lender
of making, renewing, converting or maintaining its Eurodollar Advances or its
commitment to make such Eurodollar Advances, or to reduce any amount receivable
hereunder in respect of its Eurodollar Advances, then, in any such case, the
Borrower shall pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such additional cost or reduction in
such amount receivable which such Lender deems to be material as determined by
such Lender; provided, however, that nothing in this Section shall require the
Borrower to indemnify the Lenders with respect to withholding Taxes for which
the Borrower has no obligation under Section 2.9. No failure by any Lender to
demand compensation for any increased cost during any Interest Period shall
constitute a waiver of such Lender's right to demand such compensation at any
time. A statement setting forth the calculations of any additional amounts
payable pursuant to this Section submitted by a Lender to the Borrower shall be
conclusive absent manifest error.
2.12. Indemnification for Loss.
Notwithstanding anything contained herein to the contrary,
if the Borrower shall fail to borrow or convert on a Borrowing Date or
Conversion Date after it shall have given notice to do so in which it shall have
requested a Eurodollar Advance pursuant to Section 2.3 or 2.6, or if a
Eurodollar Advance shall be terminated for any reason prior to the last day of
the Interest Period applicable thereto, or if, while a Eurodollar Advance is
outstanding, any repayment or prepayment of such Eurodollar Advance is made for
any reason (including, without limitation, as a result of acceleration or
illegality) on a date which is prior to the last day of the Interest Period
applicable thereto, the Borrower agrees to indemnify each Lender against, and to
pay on demand directly to such Lender, any loss or expense suffered by such
Lender as a result of such failure to borrow or convert, termination or
repayment, including, without limitation, an amount, if greater than zero, equal
to:
A x (B-C) x D
=
360
where:
"A" equals such Lender's pro rata share of the Affected Principal Amount;
"B" equals the Eurodollar Rate (expressed as a decimal) applicable to such
Eurodollar Advances;
"C" equals the applicable Eurodollar Rate (expressed as a decimal) in effect on
or about the first day of the applicable Remaining Interest Period, based on the
applicable rates offered or bid, as the case may be, on or about such date, for
deposits in an amount equal approximately to such Lender's pro rata share of the
Affected Principal Amount with an Interest Period equal approximately to the
applicable Remaining Interest Period, as determined by such Lender;
"D" equals the number of days from and including the first day of the applicable
Remain-
28
ing Interest Period to but excluding the last day of such Remaining Interest
Period;
and any other out-of-pocket loss or expense (including any internal processing
charge customarily charged by such Lender but excluding any Applicable Margin)
suffered by such Lender in connection with such Eurodollar Advance, including,
without limitation, in liquidating or employing deposits acquired to fund or
maintain the funding of its pro rata share of the Affected Principal Amount, or
redeploying funds prepaid or repaid, in amounts which correspond to its pro rata
share of the Affected Principal Amount. Each determination by the Administrative
Agent or a Lender pursuant to this Section shall be conclusive and binding on
the Borrower absent manifest error. A statement setting forth the calculations
of any additional amounts payable pursuant to this Section submitted by a Lender
to the Borrower shall be conclusive absent manifest error.
2.13. Option to Fund.
Each Lender has indicated that, if the Borrower elects to
borrow or convert to Eurodollar Advances, such Lender may wish to purchase one
or more deposits in order to fund or maintain its funding of its Eurodollar
Advances during the Interest Period in question; it being understood that the
provisions of this Agreement relating to such funding are included only for the
purpose of determining the rate of interest to be paid on such Eurodollar
Advances. Each Lender shall be entitled to fund and maintain its funding of all
or any part of each Eurodollar Advance made by it in any manner it sees fit, but
all determinations under Section 2.12 shall be made as if such Lender had
actually funded and maintained its funding of such Eurodollar Advance during the
applicable Interest Period through the purchase of deposits in an amount equal
to such Eurodollar Advance and having a maturity corresponding to such Interest
Period. The obligations of the Borrower under Sections 2.8, 2.9, 2.10, 2.11 and
2.12 shall survive the termination of the Aggregate Commitments, the payment of
the Notes and all other amounts payable under the Loan Documents.
2.14. Use of Proceeds.
The proceeds of the Loans shall be used solely for the
Borrower's general corporate purposes and such use shall conform to the
provisions of Section 4.11.
2.15. Capital Adequacy.
If after the Original Effective Date (i) the enactment or
promulgation of, or any change or phasing in of, any United States or foreign
law or regulation or in the interpretation thereof by any Governmental Authority
charged with the administration thereof, (ii) compliance with any directive or
guideline from any central bank or United States or foreign Governmental
Authority (whether having the force of law) promulgated or made after the
Original Effective Date, or (iii) any change is enacted or promulgated in the
Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve
System as set forth in 12 CFR Parts 208 and 225, or of the Comptroller of the
Currency, Department of the Treasury, as set forth in 12 CFR Part 3, or similar
legislation, rules, guidelines, directives or regulations under any applicable
United States or foreign Governmental Authority affects or would affect the
amount of capital required to be maintained by a Lender (or any lending office
of such Lender) or any corporation directly or indirectly
29
owning or controlling such Lender or imposes any restriction on or otherwise
adversely affects such Lender (or any lending office of such Lender) or any
corporation directly or indirectly owning or controlling such Lender and such
Lender shall have determined that such enactment, promulgation, change or
compliance has the effect of reducing the rate of return on such Lender's
capital or the asset value to such Lender of any Loan made by such Lender as a
consequence, directly or indirectly, of its obligations to make and maintain the
funding of its Loans at a level below that which such Lender could have achieved
but for such enactment, promulgation, change or compliance (after taking into
account such Lender's policies regarding capital adequacy) by an amount deemed
by such Lender to be material, then, upon demand by such Lender, the Borrower
shall promptly pay to such Lender such additional amount or amounts as shall be
sufficient to compensate such Lender for such reduction in such rate of return
or asset value. A certificate in reasonable detail as to such amounts submitted
to the Borrower and the Administrative Agent setting forth the determination of
such amount or amounts that will compensate such Lender for such reductions
shall be presumed correct absent manifest error.
2.16. Administrative Agent's Records.
The Administrative Agent's records with respect to the
Loans, the interest rates applicable thereto, each payment by the Borrower of
principal and interest on the Loans and fees, expenses and any other amounts due
and payable in connection with this Agreement shall be presumptively correct
absent manifest error as to the amount of the Loans and as to the amount of
principal and interest paid by the Borrower in respect of such Loans and as to
the other information relating to the Loans and amounts paid and payable by the
Borrower hereunder and under the Notes.
3. FEES; PAYMENTS
3.1. Commitment Fee.
The Borrower agrees to pay to the Administrative Agent, for
the account of the Lenders in accordance with each Lender's Commitment
Percentage, a fee (the "Commitment Fee"), during the Commitment Period, equal to
0.375% per annum on the excess of (a) the Aggregate Commitments over (b) the
average daily sum of the outstanding principal balance of the Loans. The
Commitment Fee shall be payable quarterly in arrears on the last day of each
March, June, September and December of each year, commencing on the first such
day following the Restatement Effective Date, and ending on the date that the
Aggregate Commitments shall expire or otherwise terminate. The Commitment Fee
shall be calculated on the basis of a 360-day year for the actual number of days
elapsed.
3.2. Closing Fee.
The Borrower agrees to pay to the Administrative Agent on
the Restatement Effective Date, for the account of each of the Lenders, a fee
(the "Closing Fee"), equal to 0.125% of such Lender's Commitment.
3.3. Pro Rata Treatment and Application of Principal Payments.
Each payment, including each prepayment, of principal and
interest on the Loans and of the Commitment Fee shall be made by the Borrower to
the Administrative Agent at its office set forth in Section 11.2 in funds
immediately available to the Administrative Agent at such office by 12:00 noon
on the due date for such payment, and,
30
promptly upon receipt thereof by the Administrative Agent, shall be remitted by
the Administrative Agent in like funds as received, to the applicable Lenders
pro rata according to the Aggregate Commitments, in the case of the Commitment
Fee, and pro rata according to the aggregate outstanding principal balance of
the Loans, in the case of principal and interest due thereon. The failure of the
Borrower to make any such payment by such time shall not constitute a default
hereunder, provided that such payment is made on such due date, but any such
payment made after 12:00 noon on such due date shall be deemed to have been made
on the next Business Day for the purpose of calculating interest on amounts
outstanding on the Loans. If any payment hereunder or under the Notes shall be
due and payable on a day which is not a Business Day, the due date thereof
(except as otherwise provided in the definition of Interest Period) shall be
extended to the next Business Day and (except with respect to payments in
respect of the Commitment Fee) interest shall be payable at the applicable rate
specified herein during such extension. If any payment is made with respect to
any Eurodollar Advance prior to the last day of the applicable Interest Period,
the Borrower shall indemnify each Lender in accordance with Section 2.12.
4. REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent and the Lenders to enter
into this Agreement and to make the Loans, the Borrower makes the following
representations and warranties to the Administrative Agent and each Lender:
4.1. Subsidiaries.
The Borrower has only the Subsidiaries set forth on Schedule
4.1. The Borrower's Subsidiaries designated on Schedule 4.1 as Restricted
Subsidiaries and Material Restricted Subsidiaries are the only Restricted
Subsidiaries and Material Restricted Subsidiaries of the Borrower.
4.2. Existence and Power.
Each of the Borrower and its Subsidiaries is duly organized
and validly existing in good standing under the laws of the jurisdiction of its
incorporation has all requisite power and authority to own its Property and to
carry on its business as now conducted, and each is in good standing and
authorized to do business in each jurisdiction in which the nature of the
business conducted therein or the Property owned therein make such qualification
necessary, except where such failure to qualify could not reasonably be expected
to have a Material Adverse Effect.
4.3. Authority.
The Borrower has full legal power and authority to enter
into, execute, deliver and perform the terms of the Loan Documents, to make the
borrowings contemplated hereby and by the Notes, to execute, deliver and carry
out the terms of the Notes and to incur the obligations provided for herein and
therein, all of which have been duly authorized by all proper and necessary
corporate action and are in full compliance with its certificate of
incorporation and by-laws.
31
4.4. Binding Agreement.
The Loan Documents (other than the Notes) constitute, and
the Notes, when issued and delivered pursuant hereto for value received, will
constitute, the valid and legally binding obligations of the Borrower,
enforceable in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally.
4.5. Litigation.
Except as set forth on Schedule 4.5, there are no actions,
suits or proceedings at law or in equity or by or before any Governmental
Authority (whether or not purportedly on behalf of the Borrower or any
Subsidiary) pending or, to the knowledge of the Borrower, threatened against the
Borrower or any Subsidiary or any of their respective Properties or rights,
which (i) could reasonably be expected to have a Material Adverse Effect, (ii)
call into question the validity or enforceability of any of the Loan Documents,
or (iii) could reasonably be expected to result in the rescission, termination
or cancellation of any material franchise, right, license, permit or similar
authorization held by the Borrower or any Subsidiary, which rescission,
termination or cancellation could reasonably be expected to have a Material
Adverse Effect.
4.6. Required Consents.
No consent, authorization or approval of, filing with,
notice to, or exemption by, stockholders, any Governmental Authority or any
other Person is required to authorize, or is required in connection with the
execution, delivery and performance of the Loan Documents or is required as a
condition to the validity or enforceability of the Loan Documents.
4.7. No Conflicting Agreements.
Neither the Borrower nor any Subsidiary is in default under
any mortgage, indenture, contract or agreement to which it is a party or by
which it or any of its Property is bound, the effect of which default could
reasonably be expected to have a Material Adverse Effect. The execution,
delivery or carrying out of the terms of the Loan Documents will not constitute
a default under, or result in the creation or imposition of, or obligation to
create, any Lien upon any Property of the Borrower or any Subsidiary pursuant to
the terms of any such mortgage, indenture, contract or agreement, except in the
case of the Collateral, the Lien in favor of the Administrative Agent and the
Lenders pursuant to the Security Agreement.
4.8. Compliance with Applicable Laws.
Neither the Borrower nor any Subsidiary is in default with
respect to any judgment, order, writ, injunction, decree or decision of any
Governmental Authority which default could reasonably be expected to have a
Material Adverse Effect. The Borrower and each Subsidiary is complying in all
material respects with all statutes, regulations, rules and orders applicable to
the Borrower or such Subsidiary of all Governmental Authorities, including,
without limitation, Environmental Laws and ERISA, a violation of which could
reasonably be expected to have a Material Adverse Effect.
4.9. Taxes.
32
Each of the Borrower and its Subsidiaries has filed or
caused to be filed all tax returns required to be filed and has paid, or has
made adequate provision for the payment of, all taxes shown to be due and
payable on said returns or in any assessments made against it (other than those
being contested in accordance with the provisions of Section 7.4) which would be
material to the Borrower or any Subsidiary, and no tax Liens have been filed
with respect thereto. The charges, accruals and reserves on the books of the
Borrower and each Subsidiary with respect to all federal, state, local and other
taxes are, to the best knowledge of the Borrower, adequate for the payment of
all such taxes, and the Borrower knows of no unpaid assessment which is due and
payable against it or any Subsidiary or any claims being asserted which could
reasonably be expected to have a Material Adverse Effect, except such thereof as
are being contested in accordance with the provisions of Section 7.4, and for
which adequate reserves have been set aside in accordance with GAAP.
4.10. Governmental Regulations.
The Borrower is not subject to regulation under the Public
Utility Holding Company Act of 1935, as amended, the Federal Power Act or the
Investment Company Act of 1940, as amended, and the Borrower is not subject to
any statute or regulation which prohibits or restricts the incurrence of
Indebtedness under the Loan Documents, including, without limitation, statutes
or regulations relative to common or contract carriers or to the sale of
electricity, gas, steam, water, telephone, telegraph or other public utility
services.
4.11. Federal Reserve Regulations; Use of Loan Proceeds.
The Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock. No part of the proceeds of the Loans
will be used, directly or indirectly, for a purpose which violates any law, rule
or regulation of any Governmental Authority, including, without limitation, the
provisions of Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System, as amended. No part of the proceeds of the Loans will be used,
directly or indirectly, to purchase or carry Margin Stock or to extend credit to
others for the purpose of purchasing or carrying Margin Stock within the meaning
of such Regulation U.
4.12. Plans; Multiemployer Plans.
Each of the Borrower and its ERISA Affiliates maintains or
makes contributions only to the Plans and Multiemployer Plans listed on Schedule
4.12. Each Plan, and, to the best knowledge of the Borrower, each Multiemployer
Plan, is in compliance in all material respects with, and has been administered
in all material respects in compliance with, the applicable provisions of ERISA,
the Code and any other applicable Federal or state law, and no event or
condition is occurring or exists concerning which the Borrower would be under an
obligation to furnish a report to the Administrative Agent and each Lender as
required by Section 7.2(d). Except as set forth on Schedule 4.12, as of December
31, 1994 no "accumulated funding deficiency", as such term is defined in Section
412 of the Code, exists. Any "accumulated funding deficiency" set forth on
Schedule 4.12 could not reasonably be expected to have a Material Adverse
Effect. To the best knowledge of the Borrower, no Plan has ceased being fully
funded.
33
4.13. Financial Statements.
The Borrower has heretofore delivered to the Administrative
Agent and the Lenders copies of its Form 10-K for the fiscal year of the
Borrower ending December 31, 1994, containing the audited Consolidated Balance
Sheet of the Borrower and its Subsidiaries as of December 31, 1994 and December
31, 1993, and the related Consolidated Statements of Operations, Cash Flows and
Retained Earnings for the periods then ended (with the applicable related notes
and schedules, the "Financial Statements"). The Financial Statements fairly
present the Consolidated financial condition and results of the operations of
the Borrower and its Subsidiaries as of the dates and for the periods indicated
therein and have been prepared in conformity with GAAP. Except as reflected in
the Financial Statements or in the footnotes thereto, neither the Borrower nor
any of its Subsidiaries has any obligation or liability of any kind (whether
fixed, accrued, contingent, unmatured or otherwise) which, in accordance with
GAAP, should have been shown in the Financial Statements and was not. Since
December 31, 1994, the Borrower and each Subsidiary has conducted its business
only in the ordinary course and there has been no Material Adverse Change.
4.14. Property.
Each of the Borrower and its Subsidiaries has good and
marketable title to all of its Property which is material to the Borrower and
its Subsidiaries taken as a whole, subject to no Liens, except Permitted Liens.
4.15. Franchises, Intellectual Property, Etc.
Each of the Borrower and its Subsidiaries possesses or has
the right to use all franchises, Intellectual Property, licenses and other
rights as are material and necessary for the conduct of its business, and with
respect to which it is in compliance, with no known conflict with the valid
rights of others which could reasonably be expected to have a Material Adverse
Effect. No event has occurred which permits or, to the best knowledge of the
Borrower, after notice or the lapse of time or both, or any other condition,
could reasonably be expected to permit, the revocation or termination of any
such franchise, Intellectual Property, license or other right and which
revocation or termination could reasonably be expected to have a Material
Adverse Effect.
4.16. Security Interests.
The Liens granted to the Administrative Agent under the
Security Agreement constitute valid, binding and continuing first priority Liens
in the Collateral, subject to no Liens other than Permitted Liens.
4.17. Environmental Matters.
(a) The Borrower and each Subsidiary is in compliance in all
material respects with the requirements of all applicable Environmental Laws.
(b) No Hazardous Substances have been generated or
manufactured on, transported to or from, treated at, stored at or discharged
from any Real Property in violation of any Environmental Laws, which violation
could reasonably be expected to have a Material Adverse Effect; no Hazardous
Substances have been discharged into subsurface waters under any Real Property
in violation of any Environmental Laws, which violation could reasonably be
expected to have a Material Adverse Effect; and no Hazardous Sub-
34
stances have been discharged from any Real Property on or into property or
waters (including subsurface waters) adjacent to any Real Property in violation
of any Environmental Laws, which violation could reasonably be expected to have
a Material Adverse Effect.
(c) Neither the Borrower nor any Subsidiary (i) has received
notice (written or oral) or otherwise learned of any claim, demand, suit,
action, proceeding, event, condition, report, directive, lien, violation,
non-compliance or investigation indicating or concerning any potential or actual
liability (including, without limitation, potential liability for enforcement,
investigatory costs, cleanup costs, government response costs, removal costs,
remedial costs, natural resources damages, property damages, personal injuries
or penalties) which violation could reasonably be expected to have a Material
Adverse Effect arising in connection with: (x) any non-compliance with or
violation of the requirements of any applicable Environmental Laws, or (y) the
presence of any Hazardous Substance on any Real Property (or any Real Property
previously owned by the Borrower or any Subsidiary) or the release or threatened
release of any Hazardous Substance into the environment, (ii) has any threatened
or actual liability in connection with the presence of any Hazardous Substance
on any Real Property (or any Real Property previously owned by the Borrower or
any Subsidiary) or the release or threatened release of any Hazardous Substance
into the environment which violation could reasonably be expected to have a
Material Adverse Effect (iii) has received notice of any federal or state
investigation evaluating whether any remedial action is needed to respond to the
presence of any Hazardous Substance on any Real Property (or any Real Property
previously owned by the Borrower or any Subsidiary) or a release or threatened
release of any Hazardous Substance into the environment for which the Borrower
or any Subsidiary is or may be liable which violation could reasonably be
expected to have a Material Adverse Effect or (iv) has received notice that the
Borrower or any Subsidiary is or may be liable to any Person under any
Environmental Law which violation could reasonably be expected to have a
Material Adverse Effect.
4.18. Absence of Certain Restrictions.
Except for the Anixter Credit Agreement and the Tax Sharing
Agreement, no indenture, certificate of designation for preferred Stock,
agreement or instrument to which the Borrower or any of its Subsidiaries is a
party, which prohibits or restrains, directly or indirectly, the payment of
dividends or other payments to the Borrower or any of its Subsidiaries.
4.19. Concerning the Collateral.
(a) As of April 3, 1995, the authorized capital Stock of
Anixter consists solely of (i) 32,000,000 shares of common Stock, $.01 par
value, of which 29,329,814 shares are issued and outstanding and of which
29,000,000 shares are owned by the Borrower, and (ii) 3,000 shares of preferred
Stock, $1.00 par value, of which 1,569 shares are issued and outstanding and of
which 1,569 shares are owned by the Borrower. All issued and outstanding shares
of the Stock of Anixter are duly and validly issued and outstanding and fully
paid and nonassessable. All shares of the Stock of Anixter owned by the Borrower
are owned free and clear of any Liens, except the Lien in favor of the
Administrative Agent and the Lenders pursuant to the Security Agreement. Except
for employee stock options and shares acquired pursuant to the exercise thereof,
there are no
35
other shares of Stock issued by Anixter outstanding or any rights, warrants or
options to acquire, or instruments convertible into or exchangeable for, any
shares of Anixter's Stock.
(b) As of March 15, 1995, the authorized capital Stock of
ANTEC consists solely of (i) 50,000,000 shares of common Stock, $.01 par value,
of which 22,117,326 shares are issued and outstanding and of which 6,727,500
shares are owned by the Borrower, and (ii) 5,000,000 shares of preferred Stock,
$1.00 par value, of which no share is issued or outstanding. All issued and
outstanding shares of the Stock of ANTEC are duly and validly issued and
outstanding and fully paid and nonassessable. All shares of the Stock of ANTEC
owned by the Borrower are owned free and clear of any Liens, except the Lien in
favor of the Administrative Agent and the Lenders pursuant to the Security
Agreement.
4.20. Burdensome Obligations.
Neither the Borrower nor any Material Restricted Subsidiary
is a party to or bound by any franchise, agreement, deed, lease or other
instrument, or subject to any corporate restriction which, in the opinion of the
management of the Borrower or such Subsidiary, is so unusual or burdensome, in
the context of its business, as in the foreseeable future might materially and
adversely affect or impair the revenue or cash flow of the Borrower or such
Material Restricted Subsidiary or the ability of the Borrower or such Material
Restricted Subsidiary to perform its obligations under the Loan Documents. The
Borrower does not presently anticipate that future expenditures by the Borrower
or any Subsidiary needed to meet the provisions of federal or state statutes,
orders, rules or regulations will be so burdensome as to result in a Material
Adverse Effect.
4.21. No Misrepresentation.
No representation or warranty contained herein and no
certificate or report furnished or to be furnished by the Borrower or any
Subsidiary in connection with the transactions contemplated hereby, contains or
will contain a misstatement of material fact, or, to the best knowledge of the
Borrower, omits or will omit to state a material fact required to be stated in
order to make the statements herein or therein contained not misleading in the
light of the circumstances under which made.
5. CONDITIONS TO CLOSING
The effectiveness of this Agreement is subject to the satisfaction
of the following conditions precedent:
5.1. Evidence of Action.
The Administrative Agent shall have received a certificate,
dated the Restatement Effective Date, of the Secretary or Assistant Secretary of
the Borrower (i) attaching a true and complete copy of the resolutions of its
Board of Directors and of all documents evidencing other necessary corporate
action (in form and substance satisfactory to the Administrative Agent) taken by
it to authorize the Loan Documents and the transactions contemplated thereby,
(ii) certifying that its certificate of incorporation and by-laws have not been
amended since November 10, 1994, or, if so, setting forth the same and (iii)
setting forth the incumbency of its officer or officers who may sign the Loan
Documents, including therein a signature specimen of such officer or officers.
36
5.2. This Agreement.
The Administrative Agent shall have received counterparts of
this Agreement signed by each of the parties hereto (or receipt by the
Administrative Agent from a party hereto of a facsimile signature page signed by
such party which shall have agreed to promptly provide the Administrative Agent
with originally executed counterparts hereof).
5.3. Notes.
The Administrative Agent shall have received the Notes, duly
executed by an Authorized Signatory of the Borrower.
5.4. Litigation.
There shall be no injunction, writ, preliminary restraining
order or other order of any nature issued by any Governmental Authority in any
respect affecting the transactions provided for herein and no action or
proceeding by or before any Governmental Authority shall have been commenced and
be pending or, to the knowledge of the Borrower, threatened, seeking to prevent
or delay the transactions contemplated by the Loan Documents or challenging any
other terms and provisions hereof or thereof or seeking any damages in
connection therewith and the Administrative Agent shall have received a
certificate of an Authorized Signatory of the Borrower to the foregoing effects.
5.5. Approvals.
The Administrative Agent shall have received a certificate
of an Authorized Signatory of the Borrower to the effect that all approvals and
consents of all Persons required to be obtained in connection with the
consummation of the transactions contemplated by the Loan Documents have been
duly obtained and are in full force and effect and that all required notices
have been given and all required waiting periods have expired.
5.6. Opinion of Counsel to the Borrower.
The Administrative Agent shall have received an opinion of
Mayer, Brown & Platt, counsel to the Borrower, addressed to the Administrative
Agent, the Lenders and Special Counsel, and dated the Restatement Effective
Date, substantially in the form of Exhibit F, and covering such additional
matters as the Required Lenders may reasonably request.
5.7. Opinion of Special Counsel.
The Administrative Agent shall have received an opinion of
Special Counsel, addressed to the Administrative Agent and the Lenders and dated
the Restatement Effective Date and substantially in the form of Exhibit G.
5.8. Compliance.
The Borrower is in compliance with all of the terms,
covenants and condi-
37
tions of the Loan Documents, there exists no Default or Event of Default and no
Material Adverse Change has occurred since December 31, 1994 and the
Administrative Agent shall have received a certificate of an Authorized
Signatory of the Borrower to such effect.
5.9. Fees.
All fees payable on the Restatement Effective Date shall
have been paid.
5.10. Fees and Expenses of Special Counsel.
The fees and expenses of Special Counsel in connection with
the preparation, negotiation and closing of the Loan Documents shall have been
paid.
5.11. Other Documents.
The Administrative Agent shall have received such other
documents as the Administrative Agent or the Lenders shall reasonably request.
6. CONDITIONS OF LENDING - ALL LOANS
The obligation of each Lender to make any Loan is subject to the
satisfaction of the following conditions precedent as of the date of such Loan:
6.1. Compliance.
On each Borrowing Date and after giving effect to the Loans
to be made thereon, (a) the Borrower shall be in compliance with all of the
terms, covenants and conditions thereof, (b) there shall exist no Default or
Event of Default, (c) the representations and warranties contained in the Loan
Documents shall be true and correct with the same effect as though such
representations and warranties had been made on such Borrowing Date except for
any such representation and warranty which, by its terms, relates specifically
to a state of facts on an earlier date and (d) the aggregate outstanding
principal balance of the Loans will not exceed the Aggregate Commitments. Each
borrowing by the Borrower shall automatically constitute a certification by the
Borrower as of the date of such borrowing that each of the foregoing matters is
true and correct in all respects.
6.2. Loan Closings.
All documents required by the provisions of the Loan
Documents to be executed or delivered to the Administrative Agent on or before
the applicable Borrowing Date shall have been executed and shall have been
delivered at the office of the Administrative Agent set forth in Section 11.2 on
or before such Borrowing Date.
6.3. Borrowing Request.
The Administrative Agent shall have received a Borrowing
Request, duly executed by an Authorized Signatory of the Borrower.
6.4. Documentation and Proceedings.
All corporate and legal proceedings and all documents and
papers in con-
38
nection with the transactions contemplated by the Loan Documents shall be
satisfactory in form and substance to the Administrative Agent and the
Administrative Agent shall have received all information and copies of all
documents which the Administrative Agent or the Required Lenders may reasonably
have requested in connection therewith, such documents (where appropriate) to be
certified by an Authorized Signatory of the Borrower or proper Governmental
Authorities.
6.5. Required Acts and Conditions.
All acts, conditions and things (including, without
limitation, the obtaining of any necessary regulatory approvals and the making
of any filings, recordings or registrations) required to be done, performed and
to have happened on or prior to such Borrowing Date and which are necessary for
the continued effectiveness of the Loan Documents, shall have been done and
performed and shall have happened in due compliance with all applicable laws.
6.6. Approval of Special Counsel.
All legal matters in connection with the making of each Loan
shall be reasonably satisfactory to Special Counsel.
6.7. Other Documents.
The Administrative Agent shall have received such other
documents as the Administrative Agent or Required Lenders shall reasonably
request.
7. AFFIRMATIVE COVENANTS
The Borrower agrees that, so long as this Agreement is in effect,
any Loan remains outstanding and unpaid, or any other amount is owing under any
Loan Document to any Lender or the Administrative Agent, the Borrower shall:
7.1. Financial Statements.
Maintain a standard system of accounting in accordance with
GAAP, and furnish or cause to be furnished to the Administrative Agent and each
Lender:
(a) As soon as available, but in any event within
95 days after the end of each fiscal year of the Borrower, (i) a copy of its
Consolidated Balance Sheet as at the end of such fiscal year, together with the
related Consolidated Statements of Operations, Retained Earnings and Cash Flows
as of and through the end of such fiscal year and (ii) a Balance Sheet of the
Borrower as at the end of such fiscal year, together with the related Statements
of Operations, Retained Earnings and Cash Flows of the Borrower as of and
through the end of such fiscal year, setting forth in each case in comparative
form the figures for the preceding fiscal year. The Consolidated Balance Sheet
and Consolidated Statements of Operations, Retained Earnings and Cash Flows
shall be audited and certified without qualification by the Accountants, which
certification shall (i) state that the examination by such Accountants in
connection with such Consolidated finan-
39
cial statements has been made in accordance with generally accepted auditing
standards and, accordingly, included such tests of the accounting records and
such other auditing procedures as were considered necessary in the
circumstances, and (ii) include the opinion of such Accountants that such
Consolidated financial statements have been prepared in accordance with GAAP in
a manner consistent with prior fiscal periods, except as otherwise specified in
such opinion. Notwithstanding any of the foregoing, the Borrower may satisfy its
obligation to furnish Consolidated Balance Sheet and Consolidated Statements of
Operations, Retained Earnings and Cash Flows by furnishing copies of the
Borrower's annual report on Form 10-K in respect of such fiscal year together
with the financial statements required to be attached thereto, provided the
Borrower is required to file such annual report on Form 10-K with the SEC and
such filing is actually made.
(b) As soon as available, but in any event within
50 days after the end of each of the first three fiscal quarters of the Borrower
(95 days after the end of the last fiscal quarter of the Borrower) a copy of the
Consolidated Balance Sheet of the Borrower as at the end of each such quarterly
period, together with the related Consolidated Statements of Operations and Cash
Flows for such period and for the elapsed portion of the fiscal year through
such date, setting forth in each case in comparative form the figures for the
corresponding periods of the preceding fiscal year, certified by the Vice
President- Treasurer of the Borrower (or such other officer acceptable to the
Administrative Agent), as being complete and correct in all material respects
and as presenting fairly the Consolidated financial condition and the
Consolidated results of operations of the Borrower and its Subsidiaries.
Notwithstanding any of the foregoing, the Borrower may satisfy its obligation to
furnish quarterly Consolidated Balance Sheets and Consolidated Statements of
Operations and Cash Flows by furnishing copies of the Borrower's quarterly
report on Form 10-Q in respect of such fiscal quarter together with the
financial statements required to be attached thereto, provided the Borrower is
required to file such quarterly report on Form 10-Q with the SEC and such filing
is actually made.
(c) At the time of the delivery of each annual and
quarterly statement required under subsections (a) and (b) above, a Compliance
Certificate, certified by the Vice President-Treasurer of the Borrower (or such
other officer as shall be acceptable to the Administrative Agent).
(d) Not later than (i) 95 days after the end of
Anixter's fiscal year, a copy of the audited consolidated annual financial
statements of Anixter and its Subsidiaries and (ii) 50 days after the end of
Anixter's first three fiscal quarters of each fiscal year (95 days after the end
of the last fiscal quarter of Anixter), a copy of the unaudited consolidated
quarterly financial statements of Anixter and its Subsidiaries.
(e) Not later than (i) 95 days after the end of
Signal's fiscal year, a copy of the unaudited consolidated annual financial
statements of Signal and its Subsidiaries and (ii) 50 days after the end of
Signal's first three fiscal quarters of each fiscal year (95 days after the end
of the last fiscal quarter of Signal), a copy of the unaudited consolidated
quarterly financial statements of Signal and its Subsidiaries.
(f) No later than 50 days after the end of each
calendar year, a statement of the assets held in the portfolio of Signal.
(g) Such other information as the Administrative
Agent or any Lender may reasonably request from time to time.
7.2. Certificates; Other Information.
40
Furnish to the Administrative Agent and each Lender:
(a) Prompt written notice if: (i) any Indebtedness
of the Borrower or any Subsidiary is declared or shall become due and payable
prior to its stated maturity, or called and not paid when due, (ii) a default
shall have occurred under any note (other than the Notes) or the holder of any
such note, or other evidence of Indebtedness, certificate or security evidencing
any such Indebtedness or any obligee with respect to any other Indebtedness of
the Borrower or any Subsidiary has the right to declare any such Indebtedness
due and payable prior to its stated maturity, or (iii) there shall occur and be
continuing a Default or an Event of Default;
(b) Prompt written notice of: (i) any citation,
summons, subpoena, order to show cause or other document naming the Borrower or
any Subsidiary a party to any proceeding before any Governmental Authority which
could reasonably be expected to have a Material Adverse Effect or which calls
into question the validity or enforceability of any of the Loan Documents, and
include with such notice a copy of such citation, summons, subpoena, order to
show cause or other document, (ii) any lapse or other termination of any
material Intellectual Property, license, permit, franchise or other
authorization issued to the Borrower or any Subsidiary by any Person or
Governmental Authority, and (iii) any refusal by any Person or Governmental
Authority to renew or extend any such material Intellectual Property, license,
permit, franchise or other authorization, which lapse, termination, refusal or
dispute could reasonably be expected to have a Material Adverse Effect;
(c) Promptly upon becoming available, copies of all
(i) regular, periodic or special reports, schedules and other material which the
Borrower or any Subsidiary may now or hereafter be required to file with or
deliver to any securities exchange or the SEC, or any other Governmental
Authority succeeding to the functions thereof and (ii) material news releases
and annual reports relating to the Borrower or any Subsidiary;
(d) As soon as possible, and in any event within
ten days after the Borrower knows or has reason to know that any of the events
or conditions enumerated below with respect to any Plan or Multiemployer Plan
has occurred or exists, a statement signed by the Vice President-Treasurer of
the Borrower (or such other officer as shall be acceptable to the Administrative
Agent), setting forth details respecting such event or condition and the action,
if any, which the Borrower or an ERISA Affiliate proposes to take with respect
thereto; provided, however, that if such event or condition is required to be
reported or noticed to the PBGC, such statement, together with a copy of the
relevant report or notice to the PBGC, shall be furnished promptly and in any
event not later than ten days after it is reported or noticed to the PBGC:
(i) any reportable event, as defined in Section
4043(b) of ERISA with respect to a Plan, as to which the PBGC has not by
regulation waived the requirement of Section 4043(a) of ERISA that it be
notified within thirty days of the occurrence of such event (provided that a
failure to meet the minimum funding standard of Section 412 of the Code or of
Section 302 of ERISA, including, without limitation, the failure to make, on or
before its due date, a required installment under Section 412(m) of the Code or
Section 302(e) of ERISA or the disqualification of such Plan for purposes of
Section 4043(b)(1) of ERISA, shall be a reportable event regardless of the
issuance of any
41
waivers in accordance with Section 412(d) of the Code) and any request for a
waiver under Section 412(d) of the Code for any Plan;
(ii) the distribution under Section 4041 of ERISA
of a notice of intent to terminate any Plan or any action taken by the Borrower
or any ERISA Affiliate to terminate any Plan;
(iii) the institution by the PBGC of proceedings
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Borrower or any ERISA
Affiliate of a notice from a Multiemployer Plan that such action has been taken
by the PBGC with respect to such Multiemployer Plan;
(iv) the complete or partial withdrawal from a
Multiemployer Plan by the Borrower or any ERISA Affiliate that results in
liability under Section 4201 or 4204 of ERISA (including the obligation to
satisfy secondary liability as a result of a purchaser default) or the receipt
of the Borrower or any ERISA Affiliate of notice from a Multiemployer Plan that
it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA
or that it intends to terminate or has terminated under Section 4041A of ERISA;
(v) the institution of a proceeding by a fiduciary
of any Multiemployer Plan against the Borrower or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed with thirty days from
its commencement;
(vi) the adoption of an amendment to any Plan
pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA that would
result in the loss of the tax-exempt status of the trust of which such Plan is a
part or the Borrower or any ERISA Affiliate fails to timely provide security to
such Plan in accordance with the provisions of said Sections; and
(vii) any event or circumstance exists which may
reasonably be expected to constitute grounds for the incurrence of liability by
the Borrower or any ERISA Affiliate under Title IV of ERISA or under Sections
412(c)(11) or 412(n) of the Code with respect to any employee benefit plan;
(e) Promptly after the request of the
Administrative Agent or any Lender therefor, copies of each annual report filed
pursuant to Section 104 of ERISA with respect to each Plan (including, to the
extent required by Section 104 of ERISA, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information referred to in Section 103 of ERISA) and each annual
report filed with respect to each Plan under Section 4065 of ERISA; provided,
however, that in the case of a Multiemployer Plan, such annual reports shall be
furnished only if they are available to the Borrower or any ERISA Affiliate; and
(f) Prompt written notice of any order, notice,
claim or proceeding received by, or brought against, the Borrower or any
Subsidiary, or with respect to any of the Real Property, under any Environmental
Law; and
(g) In the event that the Administrative Agent
shall have a reasonable basis for believing that Hazardous Substances may be on,
at, under or around any Real Property in violation of any applicable
Environmental Law, conduct and complete (at the Borrower's expense) all
investigations, studies, samplings and testings relative to such
42
Hazardous Substances as the Administrative Agent may reasonably request.
(h) Subject to any confidentiality requirements, as
soon as reasonably practicable but in any event at least 5 Business Days in
advance of any Offering, written notice of such Offering together with copies of
all registration statements, if any, filed in connection therewith.
(i) [Intentionally Omitted]
(j) Prompt written notice if a Change in Control
occurs; and
(k) As soon as reasonably practicable but in any
event at least 3 Business Days in advance of sale, redemption or other
disposition of Collateral, written notice of such sale, redemption or other
disposition together with copies of all registration statements, if any, filed
in connection therewith.
(l) Such other information as the Administrative
Agent or any Lender shall reasonably request from time to time.
7.3. Legal Existence.
Maintain, and cause each Restricted Subsidiary so to
maintain, its corporate existence in good standing in the jurisdiction of its
incorporation and in each other jurisdiction in which the failure so to do could
reasonably be expected to have a Material Adverse Effect.
7.4. Taxes.
Pay and discharge when due, and cause each Restricted
Subsidiary so to do, all Taxes, assessments and governmental charges, license
fees and levies upon, or with respect to the Borrower or such Restricted
Subsidiary and all Taxes upon the income, profits and Property of the Borrower
and its Restricted Subsidiaries, which if unpaid, could reasonably be expected
to have a Material Adverse Effect or become a Lien on the Property of the
Borrower or such Restricted Subsidiary (other than a Permitted Lien), unless and
to the extent only that such Taxes, assessments, charges, license fees and
levies shall be contested in good faith and by appropriate proceedings
diligently conducted by the Borrower or such Restricted Subsidiary and provided
that any such contested Tax, assessment, charge, license fee or levy shall not
constitute, or create, a Lien on any Property of the Borrower or such Restricted
Subsidiary senior to the Liens granted to the Administrative Agent and the
Lenders by the Security Agreement on such Property, and, provided further, that
the Borrower shall give the Administrative Agent prompt notice of such contest
and that such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor.
7.5. Insurance.
Maintain with financially sound and reputable insurance
companies insurance on all its Property in at least such amounts and against at
least such risks (but including in any event public liability and product
liability) as are usually insured against
43
in the same general area by companies engaged in the same or a similar business;
and furnish to the Administrative Agent, upon written request, full information
as to the insurance carried.
7.6. Payment of Indebtedness and Performance of Obligations.
Pay and discharge when due, and cause each Restricted
Subsidiary to pay and discharge, all lawful Indebtedness, obligations and claims
for labor, materials and supplies or otherwise which, if unpaid, might (i) have
a Material Adverse Effect, or (ii) become a Lien upon Property of the Borrower
or any Restricted Subsidiary other than a Permitted Lien, unless and to the
extent only that the validity of such Indebtedness, obligation or claim shall be
contested in good faith and by appropriate proceedings diligently conducted by
it, and that any such contested Indebtedness, obligations or claims shall not
constitute, or create, a Lien on any Property of the Borrower or any Restricted
Subsidiary senior to the Lien granted to the Administrative Agent under the
Security Agreement on such Property, and further provided that the Borrower
shall give the Administrative Agent prompt notice of any such contest and that
such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor.
7.7. Condition of Property.
At all times, maintain, protect and keep in good repair,
working order and condition (ordinary wear and tear excepted), and cause each
Restricted Subsidiary so to do, all Property necessary to the operation of the
Borrower's or such Restricted Subsidiary's business.
7.8. Observance of Legal Requirements.
Observe and comply in all respects, and cause each
Restricted Subsidiary so to do, with all laws, ordinances, orders, judgments,
rules, regulations, certifications, franchises, permits, licenses, directions
and requirements of all Governmental Authorities, which now or at any time
hereafter may be applicable to it, including, without limitation, ERISA and all
Environmental Laws, a violation of which could reasonably be expected to have a
Material Adverse Effect, except such thereof as shall be contested in good faith
and by appropriate proceedings diligently conducted by it, provided that the
Borrower shall give the Administrative Agent prompt notice of such contest and
that such reserve or other appropriate provision as shall be required by the
Accountants in accordance with GAAP shall have been made therefor.
7.9. Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true
and correct entries in conformity with GAAP and all requirements of law shall be
made of all dealings and transactions in relation to its business and activities
and permit representatives of the Administrative Agent and any Lender to visit
its offices, to inspect any of its Property and examine and make copies or
abstracts from any of its books and records at any reasonable time and as often
as may reasonably be desired, and to discuss the business, operations,
prospects, licenses, Property and financial condition of the Borrower or and its
Restricted Subsidiaries with the officers thereof and the Accountants.
7.10. Licenses, Intellectual Property.
44
Maintain, and cause each Restricted Subsidiary to maintain,
in full force and effect, all material licenses, franchises, Intellectual
Property, permits, licenses, authorizations and other rights as are necessary
for the conduct of its business.
7.11. Liquidity.
Maintain at all times (to be calculated quarterly) the sum
of (i) cash of the Borrower (other than Cash Collateral), (ii) Marketable
Securities of the Borrower, (iii) amounts loaned by the Borrower to Anixter in
order to enable Anixter to prepay revolving credit loans under the Anixter
Credit Agreement, provided that the Borrower has the currently exercisable right
to receive repayment from Anixter of, and Anixter has sufficient funds to pay,
the full amount of such loans, including, without limitation, under the terms of
any subordination provisions applicable thereto and (iv) Loan Availability in an
amount not less than $10,000,000.
7.12. Asset Coverage Ratio.
Maintain at all times (to be calculated quarterly) an Asset
Coverage Ratio of not less than 3.10:1.00, provided, however, that if at any
time the Borrower fails to maintain an Asset Coverage Ratio of not less than
3.10:1.00, the Borrower shall have 3 Business Days from the date of the
Borrower's knowledge of the failure to either prepay the Loans or deposit Cash
Collateral with the Administrative Agent as additional Collateral under the
Security Agreement, in either case in an amount such that the Asset Coverage
Ratio is not less than 3.10:1.00 after giving effect to such prepayment or
deposit.
7.13. Liquid Asset Coverage Ratio.
Maintain at all times (to be calculated quarterly) a Liquid
Asset Coverage Ratio of not less than 1.125:1.00.
7.14. Minimum Net Worth.
Maintain at all times Net Worth of not less than
$150,000,000.
8. NEGATIVE COVENANTS
The Borrower agrees that, so long as this Agreement is in effect,
any Loan remains outstanding and unpaid, or any other amount is owing under any
Loan Document to any Lender or the Administrative Agent, the Borrower shall not,
directly or indirectly:
8.1. Indebtedness.
Create, incur, assume or suffer to exist any liability for
Indebtedness, or permit any Material Restricted Subsidiary so to do, except (i)
Indebtedness due under the Loan Documents, (ii) Indebtedness of the Borrower or
any Material Restricted Subsidiary existing on the Original Effective Date as
set forth on Schedule 8.1, excluding increases and refinancings thereof, (iii)
Indebtedness consisting of Contingent Obligations permitted by Section 8.4, (iv)
Indebtedness in respect of Capital Leases in an aggregate amount not
45
in excess of $5,000,000, (v) other Indebtedness on terms and conditions and in
form and substance satisfactory to the Administrative Agent and the Lenders, the
proceeds of which are used to prepay the Loans, (vi) in addition to the
Indebtedness of Seacoast existing on the Original Effective Date as described on
Schedule 8.1, Indebtedness of Seacoast incurred in the ordinary course of its
business in an aggregate outstanding principal amount not in excess of
$58,000,000 and (vii) intercompany Indebtedness among the Borrower and its
Subsidiaries incurred in the ordinary course of business.
8.2. Liens.
Create, incur, assume or suffer to exist any Lien upon any
of its Property, whether now owned or hereafter acquired, or covenant or agree
with any Person not to grant a Lien in favor of any other Person (other than in
favor of the Administrative Agent and the Lenders hereunder), or permit any
Material Restricted Subsidiary so to do, except (i) Liens for Taxes, assessments
or similar charges incurred in the ordinary course of business which are not
delinquent or which are being contested in accordance with Section 7.4, provided
that enforcement of such Liens is stayed pending such contest, (ii) Liens in
connection with workers' compensation, unemployment insurance or other social
security obligations (but not ERISA), (iii) deposits or pledges to secure bids,
tenders, contracts (other than contracts for the payment of money), leases,
statutory obligations, surety and appeal bonds and other obligations of like
nature arising in the ordinary course of business, (iv) zoning ordinances,
easements, rights of way, minor defects, irregularities, and other similar
restrictions affecting real Property which do not adversely affect the value of
such real Property or the financial condition of the Borrower or such Material
Restricted Subsidiary or impair its use for the operation of the business of the
Borrower or such Material Restricted Subsidiary, (v) statutory Liens arising by
operation of law such as mechanics', materialmen's, carriers', warehousemen's
liens incurred in the ordinary course of business which are not delinquent or
which are being contested in accordance with Section 7.4, provided that
enforcement of such Liens is stayed pending such contest, (vi) Liens arising out
of judgments or decrees which are being contested in accordance with Section
7.4, provided that enforcement of such Liens is stayed pending such contest,
(vii) Liens in favor of the Administrative Agent and the Lenders under the Loan
Documents and (viii) Liens on Property of the Borrower and its Material
Restricted Subsidiaries existing on the Original Effective Date as set forth on
Schedule 8.2 as renewed from time to time, but not any increases in the amounts
secured thereby, provided, however, that in lieu of listing all existing Liens
on such Schedule 8.2, the Borrower may list (x) under the heading "Miscellaneous
Existing Liens of the Borrower" on Schedule 8.2, Liens of the Borrower existing
on the Original Effective Date not in excess of $1,000,000 individually or
$5,000,000 in the aggregate and (y) under the heading "Miscellaneous Existing
Liens of a Material Restricted Subsidiary" on Schedule 8.2, Liens of such
Material Restricted Subsidiary existing on the Original Effective Date not in
excess of $1,000,000 individually or $5,000,000 in the aggregate.
8.3. Merger, Consolidation and Certain Dispositions of Property.
Consolidate with, be acquired by, or merge into or with any
Person, or sell, lease or otherwise dispose of all or substantially all of its
Property, or permit any Material Restricted Subsidiary so to do.
8.4. Contingent Obligations.
Assume, guarantee, indorse, contingently agree to purchase
or perform, or otherwise become liable upon any Contingent Obligation or permit
any Material Restricted
46
Subsidiary so to do, except for (i) the Contingent Obligations of the Borrower
or any Material Restricted Subsidiary existing on the Original Effective Date as
set forth on Schedule 8.4, (ii) Contingent Obligations of Signal in respect of
the Bank of Boston Line, (iii) without duplication, Contingent Obligations of
the Borrower in respect of any Indebtedness of Anixter Canada, Inc. in an amount
not in excess of $40,000,000 in the aggregate, (iv) provided that no Default or
Event of Default would exist before or after giving effect thereto, (x)
unsecured Contingent Obligations of the Borrower and Material Restricted
Subsidiaries incurred in the ordinary course of business and not in excess of
$10,000,000 in the aggregate of which not more than $5,000,000 may be incurred
in connection with a new Subsidiary or line of business and (y) unsecured
Contingent Obligations of the Borrower and Material Restricted Subsidiaries
incurred in the ordinary course of business and not in excess of $10,000,000 in
the aggregate which Contingent Obligations shall be subordinated in form and
substance satisfactory to the Administrative Agent and (v) Contingent
Obligations of the Borrower under the SBA Guarantee, provided, however, that the
liability of the Borrower thereunder shall not exceed $30,000,000 in the
aggregate.
8.5. Dividends and Purchase of Stock.
Declare or pay any dividends payable in cash or otherwise or
apply any of its Property to the purchase, redemption or other retirement of, or
set apart any sum for the payment of any dividends on, or make any other
distribution by reduction of capital or otherwise in respect of, any shares of
its Stock, or permit any Material Restricted Subsidiary so to do, except that
(i) a wholly-owned Subsidiary may declare and pay dividends to the Borrower and
(ii) provided that no Default or Event of Default has occurred and is then
continuing or would occur immediately after giving effect thereto, the Borrower
may pay dividends on, or make purchases and redemptions of, its Stock (other
than dividends, purchases or redemptions payable in the Stock of Anixter or
ANTEC).
8.6. Investments, Loans, Etc.
At any time, purchase or otherwise acquire, hold or invest
in the Stock of, or any other interest in, any Person, or make any loan or
advance to, or enter into any arrangement for the purpose of providing funds or
credit to, or make any other investment, whether by way of capital contribution,
time deposit or otherwise, in or with any Person, or permit any Material
Restricted Subsidiary so to do, or permit any Subsidiary to purchase or
otherwise acquire Stock in Itel (all of which are sometimes referred to herein
as "Investments") except:
(a) Investments in short-term domestic and
eurodollar time deposits with any Lender, or any other commercial bank, trust
company or national banking association incorporated under the laws of the
United States or any State thereof and having undivided capital, surplus and
undivided profits exceeding $500,000,000;
(b) Investments in short-term direct obligations of
the United States of America or agencies thereof whose obligations are
guaranteed by the United States of America;
(c) Investments existing on the Original Effective
Date as set
47
forth on Schedule 8.6, provided, however, that (i) in lieu of listing all
existing Investments on such Schedule 8.6, the Borrower may list (x) under the
heading "Miscellaneous Existing Investments of the Borrower" on Schedule 8.6,
Investments of the Borrower existing on the Original Effective Date not in
excess of $1,000,000 individually or $5,000,000 in the aggregate and (y) under
the heading "Miscellaneous Existing Investments of a Material Restricted
Subsidiary" on Schedule 8.6, Investments of such Material Restricted Subsidiary
existing on the Original Effective Date not in excess of $1,000,000 individually
or $5,000,000 in the aggregate and (ii) the Borrower need not separately set
forth on Schedule 8.6 the Investments held in the Signal portfolio;
(d) normal business banking accounts and
short-term certificates of deposit and time deposits in, or issued by,
federally insured institutions in amounts not exceeding the limits of such
insurance;
(e) noncash Investments in Subsidiaries other than
Investments consisting of Collateral;
(f) without duplication, Investments in existing
Subsidiaries or existing lines of business (other than Investments in Seacoast)
in an aggregate amount not in excess of $20,000,000;
(g) other Investments of the Borrower or any
Material Restricted Subsidiary (other than Investments in Seacoast), including,
without limitation, Investments in new Subsidiaries and new lines of business,
in an aggregate amount not in excess of $5,000,000;
(h) Investments consisting of loans made by the
Borrower to Anixter in order to enable Anixter to prepay revolving credit loans
under the Anixter Credit Agreement, provided that the Borrower has the currently
exercisable right to receive repayment from Anixter of, and Anixter has
sufficient funds to pay, the full amount of such loans, including, without
limitation, under the terms of any subordination provisions applicable thereto;
(i) subject to the limitation on Indebtedness of
Seacoast set forth in Section 8.1(vi), Investments by Seacoast in the ordinary
course of its business in an amount not in excess of $105,000,000;
(j) provided that no Default or Event of Default
has occurred and is then continuing or would occur immediately after giving
effect thereto, a Subsidiary of Itel may purchase or otherwise acquire Stock of
Itel; and
(k) without duplication, Investments by the
Borrower in Seacoast made after the Restatement Effective Date, in an aggregate
amount not in excess of $22,500,000, it being understood that any amounts paid
by the Borrower under the SBA Guarantee shall be deemed to be Investments for
purposes of the limitations of this Section 8.6(k).
8.7. Business and Name Changes.
Materially change the nature of the business of the Borrower
and its Material Restricted Subsidiaries as conducted on the Restatement
Effective Date, or alter or modify its name, structure or status, or permit any
Material Restricted Subsidiary so to do.
48
8.8. Dispositions of Collateral.
Sell, exchange, transfer or otherwise dispose of any
Collateral or permit any Material Restricted Subsidiary so to do, except that
provided that no Default or Event of Default would exist before and after giving
effect thereto, (i) the Borrower may redeem shares of preferred Stock of Anixter
in any fiscal year in an amount equal to (x) 50% of the sum of Anixter's
consolidated net income for each fiscal year (commencing with its 1995 fiscal
year and including the year in which the calculation is being made) less (y) the
amount of Net Sales Proceeds from such redemptions in such years to the extent
that such Net Sales Proceeds were not applied to the mandatory prepayment of
Loans pursuant to Section 2.5(b) and (ii) subject to clause (i), the Borrower
may sell, exchange, transfer or otherwise dispose of any Collateral for cash
provided that 100% of the Net Sales Proceeds thereof (including Net Sales
Proceeds of redemptions of preferred Stock of Anixter in excess of the amount
determined under clause (i)) shall be applied to the mandatory prepayment of the
Loans pursuant to Section 2.5(b).
8.9. Restricted Subsidiaries.
Create or acquire any other Material Restricted Subsidiary,
or permit any Restricted Subsidiary so to do, provided that (i) so long as no
Default or Event of Default shall have occurred or be continuing before and
after giving effect thereto and (ii) the aggregate amounts applied in connection
therewith do not exceed $5,000,000, the Borrower or a Material Restricted
Subsidiary may, upon five Business Days' advance written notice to the
Administrative Agent, create or acquire a Material Restricted Subsidiary.
8.10. Certificate of Incorporation and By-laws.
Amend or otherwise modify its certificate of incorporation
or by-laws in any way which would adversely affect the interests of the
Administrative Agent and the Lenders under any of the Loan Documents, or permit
any Material Restricted Subsidiary so to do.
8.11. ERISA.
Adopt or become obligated to contribute to any Plan or
Multiemployer Plan, or permit any ERISA Affiliate so to do, other than those set
forth on Schedule 4.12.
8.12. Prepayments of Indebtedness.
Prepay or obligate itself to prepay, in whole or in part,
any Indebtedness (other than the Indebtedness under the Loan Documents), or
permit any Material Restricted Subsidiary so to do.
8.13. Sale and Leaseback.
Enter into any arrangement with any Person providing for the
leasing by it of Property which has been or is to be sold or transferred by it
to such Person or to any other Person to whom funds have been or are to be
advanced by such Person on the security of such Property or its rental
obligations, or permit any Material Restricted Subsidiary so to do.
49
8.14. Fiscal Year.
Change its fiscal year from that in effect on the
Restatement Effective Date, or permit any Material Restricted Subsidiary so to
do.
8.15. Capital Expenditures.
During any fiscal year, make any capital expenditures or
fixed asset acquisitions, or, without duplication, incur any obligation so to do
or permit any Material Restricted Subsidiary so to do, in an aggregate amount
exceeding $5,000,000. Capital expenditures and fixed asset acquisitions shall be
calculated on a non-cumulative basis so that amounts not expended in any fiscal
year may not be carried over and expended in subsequent fiscal years.
8.16. Amendments, Etc. of Certain Agreements.
Enter into, permit to exist or agree to any amendment,
modification or waiver of any term or condition, or permit any of its
Subsidiaries to do so, of (i) the Anixter Credit Agreement which (x) would
restrict Anixter's ability to pay cash dividends or other non-tax payments to
the Borrower to an amount less than 50% of Anixter's net income or (y) change
the definition of "Revolving Credit Availability" set forth therein or any terms
used in such definition, (ii) the Tax Sharing Agreement (or any replacement or
restatement thereof) which would reduce the cash amounts that Anixter is
presently obligated or permitted to pay to the Borrower except for an amendment
required as a result of a change in law, (iii) the Registration Rights
Agreement, (iv) the Newsprint Guaranty or the SBA Guarantee, which amendment,
modification or waiver of any term or condition of the Newsprint Guaranty or the
SBA Guarantee would materially and adversely affect the interests of the
Lenders, or (v) any indenture, certificate of designation for preferred Stock,
agreement or instrument (other than the Anixter Credit Agreement and the Tax
Sharing Agreement) which would prohibit or restrain, directly or indirectly, the
payment of dividends or other payments to the Borrower or any of its
Subsidiaries.
8.17. Transactions with Affiliates.
Become a party to any transaction with an Affiliate unless
its Board of Directors or its designee shall have determined that the terms and
conditions relating thereto are as favorable to it as those which would be
obtainable at the time in a comparable arm's-length transaction with a Person
other than an Affiliate, or permit any Material Restricted Subsidiary so to do.
8.18. Issuance of Additional Capital Stock.
Permit any Subsidiary, the Stock of which is pledged as
Collateral, to issue any additional Stock or other equity interest of such
Subsidiary, unless simultaneously therewith the same is delivered to the
Administrative Agent, together with appropriate stock powers and such other
documentation as the Administrative Agent shall reasonably request, to be held
by the Administrative Agent as collateral security under the Security Agreement.
Notwithstanding the foregoing, Anixter shall be permitted to issue additional
shares of its common Stock in connection with the normal operation of its stock
option plans, provided that at all times the shares of such Anixter Stock owned
by the Borrower and pledged to the Administrative Agent under the Security
Agreement shall exceed 90% of the total shares of such Anixter Stock on a
fully-diluted basis.
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9. DEFAULT
9.1. Events of Default.
The following shall each constitute an "Event of Default"
hereunder:
(a) The failure of the Borrower to pay principal on
any Note on the date when due and payable; or
(b) The failure of the Borrower to pay any
installment of interest or any other fees or expenses payable under any Loan
Document or under any agreement with the Administrative Agent within three
Business Days of the date when due and payable; or
(c) The use of the proceeds of any Loan in a manner
inconsistent with or in violation of Section 2.14; or
(d) The failure of the Borrower to observe or
perform any covenant or agreement contained in Sections 7.3, 7.11, 7.12, 7.13,
7.14 or Section 8; or
(e) The failure to observe or perform any other
term, covenant, or agreement contained in any Loan Document and such failure
shall have continued unremedied for a period of 30 days after the Borrower shall
have obtained knowledge thereof; or
(f) Any representation or warranty of the Borrower
(or of any officer of the Borrower on its behalf) made in any Loan Document or
in any certificate, report, opinion (other than an opinion of counsel) or other
document delivered or to be delivered pursuant thereto, shall prove to have been
incorrect or misleading (whether because of misstatement or omission) in any
material respect when made; or
(g) Any obligation of the Borrower (other than its
obligations under the Notes) or any Material Restricted Subsidiary, whether as
principal, guarantor, surety or other obligor, for the payment of any
Indebtedness in excess of $10,000,000 (i) shall become or shall be declared to
be due and payable prior to the expressed maturity thereof, or (ii) shall not be
paid when due or within any grace period for the payment thereof, or (iii) any
holder of any such obligation shall have the right to declare such obligation
due and payable prior to the expressed maturity thereof;
(h) The Borrower, any Material Restricted
Subsidiary shall be in default under any other material agreement and the
applicable grace period or cure period, if any, with respect thereto shall have
expired; or
(i) The Borrower or any Material Restricted
Subsidiary shall (i) suspend or discontinue its business, (ii) make an
assignment for the benefit of creditors, (iii) generally not be paying its debts
as such debts become due, (iv) admit in writing its inability to pay its debts
as they become due, (v) file a voluntary petition in bankruptcy, (vi) become
insolvent (however such insolvency shall be evidenced), (vii) file any petition
or answer seeking for itself any reorganization, arrangement, composition,
readjustment
51
of debt, liquidation or dissolution or similar relief under any present or
future statute, law or regulation of any jurisdiction, (viii) petition or apply
to any tribunal for any receiver, custodian or any trustee for any substantial
part of its Property, (ix) be the subject of any such proceeding filed against
it which remains undismissed for a period of 45 days, (x) file any answer
admitting or not contesting the material allegations of any such petition filed
against it or any order, judgment or decree approving such petition in any such
proceeding, (xi) seek, approve, consent to, or acquiesce in any such proceeding,
or in the appointment of any trustee, receiver, custodian, liquidator, or fiscal
agent for it, or any substantial part of its Property, or an order is entered
appointing any such trustee, receiver, custodian, liquidator or fiscal agent and
such order remains in effect for 45 days, (xii) take any formal action for the
purpose of effecting any of the foregoing or looking to the liquidation or
dissolution of the Borrower or such Material Restricted Subsidiary; or
(j) An order for relief is entered under the United
States bankruptcy laws or any other decree or order is entered by a court having
jurisdiction (i) adjudging the Borrower or any Material Restricted Subsidiary
bankrupt or insolvent, (ii) approving as properly filed a petition seeking
reorganization, liquidation, arrangement, adjustment or composition of or in
respect of the Borrower or any Material Restricted Subsidiary under the United
States bankruptcy laws or any other applicable Federal or state law, (iii)
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator
(or other similar official) of the Borrower or any Material Restricted
Subsidiary or of any substantial part of the Property thereof, (iv) ordering the
winding up or liquidation of the affairs of the Borrower or any Material
Restricted Subsidiary, and any such decree or order continues unstayed and in
effect for a period of 45 days; or
(k) Judgments or decrees against the Borrower or
any Material Restricted Subsidiary aggregating in excess of $10,000,000 shall
remain unpaid, unstayed on appeal, undischarged, unbonded or undismissed for a
period of 60 days; or
(l) The occurrence of an Event of Default under and
as defined in any of the Security Agreement; or
(m) Any Loan Document shall cease, for any reason,
to be in full force and effect, or the Borrower shall so assert in writing or
shall disavow any of its obligations thereunder; or
(n) An event or condition specified in Section
7.2(d) shall occur or exist with respect to any Plan or Multiemployer Plan and,
as a result of such event or condition, together with all other such events or
conditions, the Borrower or any Subsidiary shall be reasonably likely to incur a
liability to a Plan, a Multiemployer Plan, the PBGC, or any combination thereof
which would constitute, in the reasonable opinion of the Required Lenders, a
Material Adverse Effect; or
(o) The occurrence of a Change in Control; or
(p) The occurrence of any Event of Default under
and as defined in the Anixter Credit Agreement (or, if the Anixter Credit
Agreement is not in effect, any obligation of Anixter, whether as principal,
guarantor, surety or other obligor, for the payment of any Indebtedness in
excess of $50,000,000 (x) shall become or shall be declared to be due and
payable prior to the expressed maturity thereof, or (y) shall not be paid when
due or within any grace period for the payment thereof, or (z) any holder of any
such obligation shall have the right to declare such obligation due and payable
prior to the expressed maturity thereof).
52
Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, (a) if such event is an Event of
Default specified in clause (i) or (j) above, the Aggregate Commitments shall
immediately and automatically terminate and the Loans, all accrued and unpaid
interest thereon, and all other amounts owing under the Loan Documents shall
immediately become due and payable, and the Administrative Agent may, and upon
the direction of the Required Lenders shall, exercise any and all remedies and
other rights provided in the Loan Documents, and (b) if such event is any other
Event of Default, any or all of the following actions may be taken: (i) with the
consent of the Required Lenders, the Administrative Agent may, and upon the
direction of the Required Lenders shall, by notice to the Borrower, declare the
Aggregate Commitments to be terminated forthwith, whereupon the Aggregate
Commitments shall immediately terminate, and (ii) with the consent of the
Required Lenders, the Administrative Agent may, and upon the direction of the
Required Lenders shall, by notice of default to the Borrower, declare the Loans,
all accrued and unpaid interest thereon, and all other amounts owing under the
Loan Documents to be due and payable forthwith, whereupon the same shall
immediately become due and payable, and the Administrative Agent may, and upon
the direction of the Required Lenders shall, exercise any and all remedies and
other rights provided pursuant to the Loan Documents. Except as otherwise
provided in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived. The Borrower hereby further expressly
waive and covenant not to assert any appraisement, valuation, stay, extension,
redemption or similar laws, now or at any time hereafter in force which might
delay, prevent or otherwise impede the performance or enforcement of any Loan
Document.
In the event that the Aggregate Commitments shall have been
terminated or the Notes shall have been declared due and payable pursuant to the
provisions of this Section, any funds received by the Administrative Agent and
the Lenders from or on behalf of the Borrower shall be applied by the
Administrative Agent and the Lenders in liquidation of the Loans and the
obligations of the Borrower under the Loan Documents in the following manner and
order: (i) first, to the payment of interest on and then the principal portion
of any Loans which the Administrative Agent may have advanced on behalf of any
Lender for which the Administrative Agent has not then been reimbursed by such
Lender or the Borrower; (ii) second, to the payment of any fees or expenses due
the Administrative Agent from the Borrower, (iii) third, to reimburse the
Administrative Agent and the Lenders for any expenses (to the extent not paid
pursuant to clause (ii) due from the Borrower pursuant to the provisions of
Section 11.5; (iv) fourth, to the payment of accrued Commitment Fees, and all
other fees, expenses and amounts due under the Loan Documents (other than
principal and interest on the Notes); (v) fifth, to the payment of interest due
on the Notes; (vi) sixth, to the payment of principal outstanding on the Notes;
and (vii) seventh, to the payment of any other amounts owing to the
Administrative Agent and the Lenders under any Loan Document.
10. THE ADMINISTRATIVE AGENT
10.1. Appointment.
Each Lender hereby irrevocably designates and appoints BNY
as the Administrative Agent of such Lender under the Loan Documents and each
such Lender hereby
53
irrevocably authorizes BNY, as the Administrative Agent for such Lender, to take
such action on its behalf under the provisions of the Loan Documents and to
exercise such powers and perform such duties as are expressly delegated to the
Administrative Agent by the terms of the Loan Documents, together with such
other powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary elsewhere in any Loan Document, the Administrative Agent shall
not have any duties or responsibilities, except those expressly set forth
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into the Loan Documents or otherwise exist against the Administrative
Agent.
10.2. Delegation of Duties.
The Administrative Agent may execute any of its duties under
the Loan Documents by or through agents or attorneys-in-fact and shall be
entitled to rely upon the advice of counsel concerning all matters pertaining to
such duties.
10.3. Exculpatory Provisions.
Neither the Administrative Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with the Loan Documents (except for its own gross
negligence or willful misconduct), or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower or any officer thereof contained in the Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Administrative Agent under or in connection with, the Loan
Documents or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of any of the Loan Documents or for any failure of the Borrower
or any other Person to perform its obligations thereunder. The Administrative
Agent shall be under no obligation to any Lender to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, the Loan Documents, or to inspect the properties, books or
records of the Borrower. The Administrative Agent shall be under no liability or
responsibility whatsoever to the Borrower or any other Person as a consequence
of any failure or delay in performance, or any breach, by any Lender of any of
its obligations under any of the Loan Documents.
10.4. Reliance by Administrative Agent.
The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, opinion, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may treat each Lender, or the Person designated in the last
notice filed with it under this Section, as the holder of all of the interests
of such Lender in its Loans and in its Note until written notice of transfer,
signed by such Lender (or the Person designated in the last notice filed with
the Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall
have been filed with the Administrative Agent. The Administrative Agent shall
not be under any duty to examine or pass upon the validity, effectiveness or
genuineness of the Loan Documents or any instrument, document or communication
furnished pursuant thereto
54
or in connection therewith, and the Administrative Agent shall be entitled to
assume that the same are valid, effective and genuine, have been signed or sent
by the proper parties and are what they purport to be. The Administrative Agent
shall be fully justified in failing or refusing to take any action under the
Loan Documents unless it shall first receive such advice or concurrence of the
Required Lenders as it deems appropriate. The Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, under the Loan
Documents in accordance with a request or direction of the Required Lenders, and
such request or direction and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.
10.5. Notice of Default.
The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default unless
the Administrative Agent has received written notice thereof from a Lender or
the Borrower. In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall promptly give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders,
provided, however, that unless and until the Administrative Agent shall have
received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem to be in the best interests
of the Lenders.
10.6. Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that neither the
Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates has made any representations or warranties to it
and that no act by the Administrative Agent hereinafter, including any review of
the affairs of the Borrower, shall be deemed to constitute any representation or
warranty by the Administrative Agent to any Lender. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
the Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own evaluation of and
investigation into the business, operations, Property, financial and other
condition and creditworthiness of the Borrower and made its own decision to
enter into this Agreement. Each Lender also represents that it will,
independently and without reliance upon the Administrative Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit analysis, evaluations and decisions
in taking or not taking action under any Loan Document, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, Property, financial and other condition and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Administrative Agent hereunder, the
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
Property, financial and other condition or creditworthiness of the Borrower
which may come into the possession of the Administrative Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
10.7. Indemnification.
55
Each Lender agrees to indemnify and reimburse the
Administrative Agent in its capacity as such (to the extent not promptly
reimbursed by the Borrower and without limiting the obligation of the Borrower
to do so), according to its Commitment Percentage, from and against any and all
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever
including, without limitation, any amounts paid to the Lenders (through the
Administrative Agent) by the Borrower pursuant to the terms of the Loan
Documents, that are subsequently rescinded or avoided, or must otherwise be
restored or returned which may at any time (including, without limitation, at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against the Administrative Agent in any way relating to or arising out
of the Loan Documents or any other documents contemplated by or referred to
therein or the transactions contemplated thereby or any action taken or omitted
to be taken by the Administrative Agent under or in connection with any of the
foregoing; provided, however, that no Lender shall be liable for the payment of
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting solely from the gross negligence or willful misconduct of the
Administrative Agent. The agreements in this Section shall survive the payment
of all amounts payable under the Loan Documents.
10.8. Administrative Agent in its Individual Capacity.
BNY and its affiliates may make loans to, accept deposits
from, issue letters of credit for the account of, and generally engage in any
kind of business with, the Borrower as though BNY was not the Administrative
Agent hereunder. With respect to the Commitment made by BNY and the Note issued
to BNY, BNY shall have the same rights and powers under the Loan Documents as
any Lender and may exercise the same as though it was not an Administrative
Agent and the terms "Lender" and "Lenders" shall in each case include BNY.
10.9. Successor Administrative Agent.
If at any time the Administrative Agent deems it advisable,
in its sole discretion, it may submit to each of the Lenders a written notice of
its resignation as Administrative Agent under this Agreement, such resignation
to be effective upon the earlier of (i) the written acceptance of the duties of
the Administrative Agent under the Loan Documents by a successor Administrative
Agent and (ii) on the 30th day after the date of such notice. Upon any such
resignation, the Required Lenders shall have the right, after consultation with
the Borrower, to appoint from among the Lenders a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders and accepted such appointment in writing within 30 days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders and after
consultation with the Borrower, appoint a successor Administrative Agent, which
successor Administrative Agent shall be a commercial bank organized under the
laws of the United States of America or any State thereof and having a combined
capital and surplus of at least $100,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent's rights, powers,
privileges and duties as Administrative Agent under the Loan Documents shall be
terminated. The Borrower and the Lenders shall execute such documents as shall
be necessary to effect such appointment. After any retiring Administrative
Agent's resignation hereunder as Administrative Agent, the provisions of the
Loan Documents shall inure to its benefit as to any actions taken or omitted to
be
56
taken by it while it was Administrative Agent under the Loan Documents. If at
any time hereunder there shall not be a duly appointed and acting Administrative
Agent, the Borrower agrees to make each payment due under the Loan Documents
directly to the Lenders entitled thereto during such time.
11. OTHER PROVISIONS.
11.1. Amendments and Waivers.
With the written consent of the Required Lenders, the
Administrative Agent and the Borrower may, from time to time, enter into written
amendments, supplements or modifications of the Loan Documents and, with the
consent of the Required Lenders, the Administrative Agent on behalf of the
Lenders may execute and deliver to any such parties a written instrument waiving
or a consent to a departure from, on such terms and conditions as the
Administrative Agent may specify in such instrument, any of the requirements of
the Loan Documents or any Default or Event of Default and its consequences;
provided, however, that no such amendment, supplement, modification, waiver or
consent shall (i) change the Commitments of any Lender or the Aggregate
Commitments, (ii) extend the Maturity Date; (iii) decrease the rate, or extend
the time of payment, of interest of, or change or forgive the principal amount
of, or change the requirement that payments and prepayments of principal of, and
payments of interest on, the Notes be made pro rata to the Lenders on the basis
of the outstanding principal amount of the Loans, (iv) release any Collateral
except in connection with a sale, exchange, redemption or other disposition
thereof permitted by Section 8.8 or (v) change the provisions of Sections 2.9,
2.11, 2.12, 2.13, 2.15, or 11.1 without the consent of all of the Lenders; and
provided further that no such amendment, supplement, modification, waiver or
consent shall amend, modify, waive or consent to a departure from any provision
of Section 10 or otherwise change any of the rights or obligations of the
Administrative Agent under the Loan Documents without the written consent of the
Administrative Agent. Any such amendment, supplement, modification, waiver or
consent shall apply equally to each of the Lenders and shall be binding upon the
parties to the applicable agreement, the Lenders, the Administrative Agent and
all future holders of the Notes. In the case of any waiver, the parties to the
applicable agreement, the Lenders and the Administrative Agent shall be restored
to their former position and rights under the Loan Documents, and any Default or
Event of Default waived shall not extend to any subsequent or other Default or
Event of Default, or impair any right consequent thereon.
11.2. Notices.
All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made when
delivered by hand, or when deposited in the mail, first-class postage prepaid,
or, in the case of telecopier notice, when sent, addressed as follows in the
case of the Borrower or the Administrative Agent, and at the Domestic Lending
Office in the case of each Lender, or to such other addresses as to which the
Administrative Agent may be hereafter notified by the respective parties hereto
or any future holders of the Notes:
57
The Borrower:
Itel Corporation
c/o Anixter Inc.
4711 Golf Road
Skokie, Illinois 60076
Attention: Rod Shoemaker,
Assistant Treasurer
Telephone: (708) 715-2205
Telecopy: (708) 677-8557
The Administrative Agent:
The Bank of New York
One Wall Street
Agency Function Administration
18th Floor
New York, New York 10286
Attention: Carolyn Surles
Agency Function Administrator
Telephone: (212) 635-4695
Telecopy: (212) 635-6365 or 6366 or 6367
with a copy to:
The Bank of New York
One Wall Street
New York, New York 10286
Attention: John C. Lambert,
Assistant Vice President
Telephone: (212) 635-8044
Telecopy: (212) 635-1208,
except that any notice, request or demand by the Borrower to or upon the
Administrative Agent or the Lenders pursuant to Sections 2.3 or 2.6 shall not be
effective until received. Any party to a Loan Document may rely on signatures of
the parties thereto which are transmitted by telecopier or other electronic
means as fully as if originally signed.
11.3. No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the
part of the Administrative Agent or any Lender, any right, remedy, power or
privilege under any Loan Document shall operate as a waiver thereof; nor shall
any single or partial exercise of any right, remedy, power or privilege under
any Loan Document preclude any other or further exercise thereof or the exercise
of any other right, remedy, power or privilege. The rights, remedies, powers and
privileges under the Loan Documents are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.4. Survival of Representations and Warranties.
All representations and warranties made under the Loan
Documents and in any document, certificate or statement delivered pursuant
hereto or in connection therewith shall survive the execution and delivery of
the Loan Documents.
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11.5. Payment of Expenses and Taxes.
The Borrower agrees, promptly upon presentation of a
statement or invoice therefor, and whether any Loan is made (i) to pay or
reimburse the Administrative Agent for all its out-of-pocket costs and expenses
reasonably incurred in connection with the development, preparation and
execution of, the term sheet, the Loan Documents and any amendment, supplement
or modification thereto (whether or not executed), any documents prepared in
connection therewith and the consummation of the transactions contemplated
thereby, the syndication of the transactions contemplated hereby and the
monitoring of the Collateral, including, without limitation, the reasonable fees
and disbursements of Special Counsel, (ii) to pay or reimburse the
Administrative Agent and the Lenders for all of their respective costs and
expenses, including, without limitation, reasonable fees and disbursements of
counsel (including, without limitation, the allocated cost of internal legal
counsel and all disbursements of internal legal counsel), incurred in connection
with (x) any Default or Event of Default and any enforcement or collection
proceedings resulting therefrom or in connection with the negotiation of any
restructuring or "work-out" (whether consummated or not) of the obligations of
the Borrower under any of the Loan Documents and (y) the enforcement of this
Section, (iii) to pay, indemnify, and hold each Lender and the Administrative
Agent harmless from and against, any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other similar taxes, if any, which may be payable or
determined to be payable in connection with the execution and delivery of, or
consummation of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
the Loan Documents and any such other documents, and (iv) to pay, indemnify and
hold each Lender and the Administrative Agent and each of their respective
officers, directors and employees harmless from and against any and all other
liabilities, obligations, claims, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, reasonable counsel fees and
disbursements) with respect to the enforcement and performance of the Loan
Documents, the use of the proceeds of the Loans and the enforcement and
performance of the provisions of any subordination agreement in favor of the
Administrative Agent and the Lenders (all the foregoing, collectively, the
"indemnified liabilities") and, if and to the extent that the foregoing
indemnity may be unenforceable for any reason, the Borrower agrees to make the
maximum payment permitted or not prohibited under applicable law; provided,
however, that the Borrower shall have no obligation hereunder to pay indemnified
liabilities to the Administrative Agent or any Lender arising from the gross
negligence or willful misconduct of the Administrative Agent or such Lender or
claims between one indemnified party and another indemnified party. The
agreements in this Section shall survive the termination of the Aggregate
Commitments and the payment of all amounts payable under the Loan Documents.
11.6. Lending Offices.
Each Lender shall have the right at any time and from time
to time to transfer its Loans to a different office, provided that such Lender
shall promptly notify the Administrative Agent and the Borrower of any such
change of office. Such office shall thereupon become such Lender's Domestic
Lending Office or Eurodollar Lending Office, as the case may be, provided,
however, that no such Lender shall be entitled to receive any greater amount
under Sections 2.9, 2.11 and 2.15 as a result of a transfer of any such
59
Loans to a different office of such Lender than it would be entitled to
immediately prior thereto unless such claim would have arisen even if such
transfer had not occurred.
11.7. Successors and Assigns.
(a) The Loan Documents shall be binding upon and inure to
the benefit of the Borrower, the Lenders, the Administrative Agent, all future
holders of the Notes and their respective successors and assigns, except that
the Borrower may not assign, delegate or transfer any of its rights or
obligations under the Loan Documents without the prior written consent of the
Administrative Agent and each Lender.
(b) Each Lender shall have the right at any time, upon
written notice to the Administrative Agent of its intent to do so, to sell,
assign, transfer or negotiate all or any part of such Lender's rights under the
Loan Documents to one or more of its Affiliates, to one or more of the other
Lenders (or to Affiliates of such other Lenders) or, with the prior written
consent of the Borrower (which consent shall not be unreasonably withheld and
shall not be required upon the occurrence and during the continuance of an Event
of Default), to sell, assign, transfer or negotiate all or any part of such
Lender's rights and obligations under the Loan Documents to any other bank,
insurance company, pension fund, mutual fund or other financial institution,
provided that (i) each such sale, assignment, transfer or negotiation (other
than sales, assignments, transfers or negotiations (x) to Affiliates of such
Lender or (y) of a Lender's entire interest) shall be in a minimum amount of
$5,000,000 and (ii) there shall be paid to the Administrative Agent by the
assigning Lender a fee (the "Assignment Fee") of $3,000. For each assignment,
the parties to such assignment shall execute and deliver to the Administrative
Agent for its acceptance and recording an Assignment and Acceptance Agreement.
Upon such execution, delivery, acceptance and recording by the Administrative
Agent, from and after the effective date specified in such Assignment and
Acceptance Agreement, the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance Agreement, the assignor
Lender thereunder shall be released from its obligations under the Loan
Documents. The Borrower agrees upon written request of the Administrative Agent
and at the Borrower's expense to execute and deliver (i) to such assignee, a
Note, dated the effective date of such Assignment and Acceptance Agreement, in
an aggregate principal amount equal to the portion of the Loan assigned to, and
Commitments assumed by, such assignee and (ii) to such assignor Lender, a Note,
dated the effective date of such Assignment and Acceptance Agreement, in an
aggregate principal amount equal to the balance of such assignor Lender's Loan
and Commitment, if any, and each assignor Lender shall cancel and return to the
Borrower its existing Note.
(c) Each Lender may grant participations in all or any part
of its Loans, its Note and its Commitment to one or more banks, insurance
companies, financial institutions, pension funds or mutual funds, provided that
(i) such Lender's obligations under the Loan Documents shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties to the
Loan Documents for the performance of such obligations, (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under the Loan Documents, (iv) no sub-participations shall be
permitted and (v) the voting rights of any holder of any participation shall be
limited to decisions that only do any of the following: (A) subject the
participant to any additional obligation, (B) reduce the principal of, or
interest on the Notes or any fees or other amounts payable hereunder, (C)
postpone any date fixed for the payment of principal of, or interest on the
Notes or any fees or other amounts payable hereunder, (D) release any security
interest or Collateral except in connection with a sale, exchange, redemption or
other disposition thereof per-
60
mitted by Section 8.8 or (E) release any guarantor under any guarantee. The
Borrower acknowledges and agrees that any such participant shall for purposes of
Sections 2.9, 2.11, 2.13 and 2.15 be deemed to be a "Lender"; provided, however,
the Borrower shall not, at any time, be obligated to pay any participant in any
interest of any Lender hereunder any sum in excess of the sum which the Borrower
would have been obligated to pay to such Lender in respect of such interest had
such Lender not sold such participation. A Lender granting a participation shall
promptly notify the Administrative Agent and the Borrower thereof, specifying
the identity of such participant.
(d) If any (i) assignment is made pursuant to subsection (b)
or (ii) any participation is granted pursuant to subsection (c), shall be made
to any Person that is organized under the laws of any jurisdiction other than
the United States of America or any State thereof, such Person shall furnish
such certificates, documents or other evidence to the Borrower and the
Administrative Agent, in the case of clause (i) and to the Borrower and the
Lender which sold such participation in the case of clause (ii), as shall be
required by Section 2.9(b) to evidence such Person's exemption from U.S.
withholding taxes with respect to any payments under or pursuant to the Loan
Documents because such Person is eligible for the benefits of a tax treaty which
provides for a zero % rate of tax on any payments under the Loan Documents or
because any such payments to such Person are effectively connected with the
conduct by such Person of a trade or business in the United States.
(e) No Lender shall, as between and among the Borrower, the
Administrative Agent and such Lender, be relieved of any of its obligations
under the Loan Documents as a result of any sale, assignment, transfer or
negotiation of, or granting of participations in, all or any part of its Loans,
its Commitment or its Note, except that a Lender shall be relieved of its
obligations to the extent of any such sale, assignment, transfer, or negotiation
of all or any part of its Loans, its Commitment or its Note pursuant to
subsection (b) above.
(f) Notwithstanding anything to the contrary contained in
this Section, any Lender may at any time or from time to time assign all or any
portion of its rights under the Loan Documents to a Federal Reserve Bank,
provided that any such assignment shall not release such assignor from its
obligations thereunder.
11.8. Counterparts.
Each Loan Document (other than the Notes) may be executed by
one or more of the parties thereto on any number of separate counterparts and
all of said counterparts taken together shall be deemed to constitute one and
the same document. It shall not be necessary in making proof of any Loan
Document to produce or account for more than one counterpart signed by the party
to be charged. A telecopied counterpart of any Loan Document or to any document
evidencing, and of any an amendment, modification, consent or waiver to or of
any Loan Document shall be deemed to be an originally executed counterpart. A
set of the copies of the Loan Documents signed by all the parties thereto shall
be deposited with each of the Borrower and the Administrative Agent. Any party
to a Loan Document may rely upon the signatures of any other party thereto which
are transmitted by telecopier or other electronic means to the same extent as if
originally signed.
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11.9. Adjustments; Set-off.
(a) If any Lender (a "Benefited Lender") shall at any time
receive any payment of all or any part of its Loans, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or involuntarily,
by set-off, pursuant to events or proceedings of the nature referred to in
Section 9.1 (h) or (i), or otherwise) in a greater proportion than any such
payment to and collateral received by any other Lender in respect of such other
Lender's Loans, or interest thereon, such Benefited Lender shall purchase for
cash from each of the other Lenders such portion of each such other Lender's
Loans, and shall provide each of such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders, provided, however, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
Benefited Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another Lender's
Loans may exercise all rights of payment (including, without limitation, rights
of set-off, to the extent not prohibited by law) with respect to such portion as
fully as if such Lender were the direct holder of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence of an Event of Default and the acceleration
of the obligations owing in connection with the Loan Documents, or at any time
upon the occurrence and during the continuance of an Event of Default, under
Section 9.1(a) or (b), each Lender shall have the right, without prior notice to
the Borrower, any such notice being expressly waived by the Borrower to the
extent not prohibited by applicable law, to set-off and apply against any
indebtedness, whether matured or unmatured, of the Borrower to such Lender, any
amount owing from such Lender to the Borrower, at, or at any time after, the
happening of any of the above-mentioned events. To the extent not prohibited by
applicable law, the aforesaid right of set-off may be exercised by such Lender
against the Borrower or against any trustee in bankruptcy, custodian, debtor in
possession, assignee for the benefit of creditors, receiver, or execution,
judgment or attachment creditor of the Borrower, or against anyone else claiming
through or against the Borrower or such trustee in bankruptcy, custodian, debtor
in possession, assignee for the benefit of creditors, receivers, or execution,
judgment or attachment creditor, notwithstanding the fact that such right of
set-off shall not have been exercised by such Lender prior to the making, filing
or issuance, or service upon such Lender of, or of notice of, any such petition,
assignment for the benefit of creditors, appointment or application for the
appointment of a receiver, or issuance of execution, subpoena, order or warrant.
Each Lender agrees promptly to notify the Borrower and the Administrative Agent
after any such set-off and application made by such Lender, provided that the
failure to give such notice shall not affect the validity of such set-off and
application.
11.10. Lenders' Representations.
Without limiting the rights of a Lender under
Section 11.7, each Lender represents to the Administrative Agent that, in
acquiring its Note, it is acquiring the same for its own account for the purpose
of investment and not with a view to selling the same in connection with any
distribution thereof, provided that the disposition of each Lender's own
Property shall at all times be and remain within its control.
11.11. Indemnity.
62
The Borrower agrees to indemnify and hold harmless the
Administrative Agent and each Lender and their respective affiliates, directors,
officers, employees, attorneys and agents (each an "Indemnified Person") from
and against any loss, cost, liability, damage or expense (including the
reasonable fees and disbursements of counsel of such Indemnified Person,
including all local counsel hired by any such counsel) incurred by such
Indemnified Person in investigating, preparing for, defending against, or
providing evidence, producing documents or taking any other action in respect
of, any commenced or threatened litigation, administrative proceeding or
investigation under any federal securities law or any other statute of any
jurisdiction, or any regulation, or at common law or otherwise, which is alleged
to arise out of or is based upon (i) any untrue statement or alleged untrue
statement of any material fact by the Borrower in any document or schedule
executed or filed with any Governmental Authority by or on behalf of the
Borrower; (ii) any omission or alleged omission to state any material fact
required to be stated in such document or schedule, or necessary to make the
statements made therein, in light of the circumstances under which made, not
misleading; (iii) any acts, practices or omissions or alleged acts, practices or
omissions of the Borrower or its agents relating to the use of the proceeds of
any or all borrowings made by the Borrower which are alleged to be in violation
of Section 2.14, or in violation of any federal securities law or of any other
statute, regulation or other law of any jurisdiction applicable thereto; or (iv)
any acquisition or proposed acquisition by the Borrower or any Subsidiary of all
or a portion of the Stock, or all or a portion of the assets, of any Person
whether such Indemnified Person is a party thereto. The indemnity set forth
herein shall be in addition to any other obligations or liabilities of the
Borrower to each Indemnified Person under the Loan Documents or at common law or
otherwise, and shall survive any termination of the Loan Documents, the
expiration of the Aggregate Commitments and the payment of all indebtedness of
the Borrower under the Loan Documents, provided that the Borrower shall have no
obligation under this Section to an Indemnified Person with respect to any of
the foregoing to the extent found in a final judgment of a court having
jurisdiction to have resulted primarily out of the gross negligence or wilful
misconduct of such Indemnified Person or arising solely from claims between one
such Indemnified Person and another such Indemnified Person.
11.12. Governing Law.
The Loan Documents and the rights and obligations of the
parties thereunder shall be governed by, and construed and interpreted in
accordance with, the internal laws of the State of New York, without regard to
principles of conflict of laws.
11.13. Headings Descriptive.
Section headings have been inserted in the Loan Documents
for convenience only and shall not be construed to be a part thereof.
11.14. Severability.
Every provision of the Loan Documents is intended to be
severable, and if any term or provision thereof shall be invalid, illegal or
unenforceable for any reason, the validity, legality and enforceability of the
remaining provisions thereof shall not be affected or impaired thereby, and any
invalidity, illegality or unenforceability in any jurisdiction
63
shall not affect the validity, legality or enforceability of any such term or
provision in any other jurisdiction.
11.15. Integration.
All exhibits to a Loan Document shall be deemed to be a part
thereof. Except with respect to certain fees of the Administrative Agent, the
Loan Documents embody the entire agreement and understanding among the Borrower,
the Administrative Agent and the Lenders with respect to the subject matter
thereof and supersede all prior agreements and understandings among the
Borrower, the Administrative Agent and the Lenders with respect to the subject
matter thereof.
11.16. Consent to Jurisdiction.
The Borrower hereby irrevocably submits to the jurisdiction
of any New York State or Federal court sitting in the City of New York over any
suit, action or proceeding arising out of or relating to the Loan Documents. The
Borrower hereby irrevocably waives, to the fullest extent permitted or not
prohibited by law, any objection which it may now or hereafter have to the
laying of the venue of any such suit, action or proceeding brought in such a
court and any claim that any such suit, action or proceeding brought in such a
court has been brought in an inconvenient forum. The Borrower hereby agrees that
a final judgment in any such suit, action or proceeding brought in such a court,
after all appropriate appeals, shall be conclusive and binding upon it.
11.17. Service of Process.
The Borrower hereby agrees that process may be served
against it in any suit, action or proceeding referred to in Section 11.16 by
sending the same by first class mail, return receipt requested or by overnight
courier service, to the address of the Borrower set forth in Section 11.2. The
Borrower hereby agrees that any 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 enforceable by law, be taken
and held to be valid personal service upon and personal delivery to it.
11.18. No Limitation on Service or Suit.
Nothing in the Loan Documents or any modification, waiver,
consent or amendment thereto shall affect the right of the Administrative Agent
or any Lender to serve process in any manner permitted by law or limit the right
of the Administrative Agent or any Lender to bring proceedings against the
Borrower in the courts of any jurisdiction or jurisdictions in which the
Borrower may be served.
11.19. WAIVER OF TRIAL BY JURY.
THE ADMINISTRATIVE AGENT, THE LENDERS AND THE BORROWER
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF, UNDER OR IN
CONNECTION WITH THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREIN.
FURTHER, THE BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF THE
ADMINISTRATIVE AGENT, OR THE LENDERS, OR COUNSEL TO THE ADMINISTRATIVE AGENT OR
THE LENDERS, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE ADMINISTRATIVE
AGENT OR THE LENDERS WOULD NOT, IN THE EVENT OF SUCH
64
LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY TRIAL PROVISION. THE
BORROWER ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT AND THE LENDERS HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT BY, INTER ALIA, THE
PROVISIONS OF THIS SECTION.
11.20. Savings Clause; Security Agreement.
This Agreement is intended solely as an amendment of, and
contemporaneous restatement of, the terms and conditions of the Existing
Agreement and is not intended and should not be construed as in any way
extinguishing or terminating the Existing Agreement or the Indebtedness incurred
thereunder. The Security Agreement remains in full force and effect and
continues to secure the obligations of the Borrower as set forth therein. All
references in the Security Agreement to the Term Loan Agreement shall be deemed
to refer to this Agreement.
65
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
ITEL CORPORATION
By: ________________________
Name: ______________________
Title: _____________________
THE BANK OF NEW YORK,
Individually and as
Administrative Agent
By: ________________________
Name: ______________________
Title: _____________________
BANK OF AMERICA ILLINOIS
By: ________________________
Name: ______________________
Title: _____________________
BANQUE PARIBAS
By: ________________________
Name: ______________________
Title: _____________________
By: ________________________
Name: ______________________
Title: _____________________
CHEMICAL BANK
By: ________________________
Name: ______________________
Title: _____________________
66
CAISSE NATIONALE DE CREDIT AGRICOLE
By: ________________________
Name: ______________________
Title: _____________________
EX-27
3
FINANCIAL DATA SCHEDULE
5
1,000
6-MOS
DEC-31-1995
JAN-01-1995
JUN-30-1995
33,300
0
376,200
7,000
305,500
722,100
83,200
40,900
1,158,700
303,700
0
28,000
0
0
490,100
1,158,700
1,044,900
1,044,900
781,700
995,400
0
0
11,300
38,300
18,300
20,000
0
0
0
20,000
.70
.70