Exhibit 10.4
EXECUTION COPY
CREDIT AGREEMENT
DATED AS OF APRIL 30, 2003
BETWEEN
HEADS & THREADS INTERNATIONAL LLC,
A DELAWARE LIMITED LIABILITY COMPANY,
AND
LASALLE BANK NATIONAL ASSOCIATION
SCHEDULE 5.5 Material Adverse Changes since December 31, 2002
SCHEDULE 5.6 Exceptions to Tax Representations
SCHEDULE 5.7 Pending Litigation
SCHEDULE 5.8 Borrower's Subsidiaries
SCHEDULE 5.9 Exceptions to ERISA Representation with respect to Plan
Withdrawals
SCHEDULE 5.14 Exceptions to Representation Concerning Ownership of
Properties
SCHEDULE 5.15 Exceptions to Representation Concerning Environmental
Matters
SCHEDULE 6.12 Permitted Indebtedness
SCHEDULE 6.15(viii) Description of Existing Investments
SCHEDULE 6.16 Description of Existing Liens
EXHIBIT A Form of Compliance Certificate
EXHIBIT B Form of Note
EXHIBIT C Form of Security Agreement
EXHIBIT D Form of Letter of Credit Request and Agreement
EXHIBIT E Form of Opinion of Outside Counsel For Borrower
EXHIBIT F Form of Written Money Transfer Instructions
EXHIBIT G Form of Assignment and Assumption Agreement
EXHIBIT H Borrowing Base Certificate
EXHIBIT I Acceptance Credit Agreement
CREDIT AGREEMENT
This
Credit Agreement (this "Agreement"), dated as of April 30, 2003,
is between HEADS & THREADS INTERNATIONAL LLC, a Delaware limited liability
company (the "Borrower") and LASALLE BANK NATIONAL ASSOCIATION (the "Lender").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms shall
have the meanings herein specified unless the context otherwise requires:
"Acceptance
Credit Agreement" is defined in Section 2.3.4 and Exhibit
I.
"Account" means any right to payment for goods sold or for services
rendered which is not evidenced by an instrument or chattel paper, whether or
not it has been earned by performance or delivery.
"Account Debtor" has the meaning stated therefor in the Security
Agreement.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going concern business or
all or substantially all of the assets of any firm, corporation or division
thereof, whether through the purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power for
the election of directors (other than securities having such power only by
reason of the happening of a contingency) or a majority (by percentage or voting
power) of the outstanding partnership interests of a partnership or membership
interests in a limited liability company.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lender to the Borrower on the same
Borrowing Date.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Aggregate Available Revolving Commitment" means, at any date of
determination thereof, the Aggregate Revolving Commitment minus the sum of (i)
the Facility Letter of Credit Obligations then outstanding and (ii) the
aggregate principal amount of all Revolving Advances then outstanding.
"Aggregate Commitment" means the aggregate of the commitments of the
Lender, as reduced from time to time pursuant to the terms hereof.
"Aggregate Revolving Commitment" means $30,000,000.
"Agreement" means this
Credit Agreement, as it may be amended or
modified and in effect from time to time.
"Alleghany" means Alleghany Corporation, a Delaware corporation, which
as of the date hereof is the sole member of the Borrower.
"Alleghany Debt" means the Borrower's Indebtedness to Alleghany in the
principal amount not exceeding $3,100,000.
"Applicable Bankers Acceptance Percentage" means at any time one and
one quarter percent (1.25%).
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Atlas Sale" means the sale by the Borrower of the assets comprising
its Atlas Division, including, among other things, the Inventory, Accounts,
leasehold interest and intellectual property of the Atlas Division of the
Borrower.
"Authorized Officer" means any of the Chairman, President, Executive
Vice President, Vice President, Chief Financial Officer, Secretary or Treasurer
of the Borrower, or any other senior officer of the Borrower designated as such
in writing to the Lender by the Borrower, in each case acting singly.
"Availability" at any time and from time to time means the amount of
funds which would be available to the Borrower for a Revolving Advance as
calculated under Subsection (2) of the Borrowing Base.
"Bankers Acceptance" means a bankers acceptance or similar instrument
which is issued by the Lender pursuant to a documentary acceptance
credit
agreement upon the application of a Person or upon which such Person is an
account party or for which such Person is in any way liable.
"Bankers Acceptance Fee" means with respect to any Bankers Acceptance
and any extension, modification, or renewal thereof, the BA Rate plus the
Applicable Bankers Acceptance Percentage times the maximum amount of such
Bankers Acceptance payable to the Lender on the Issuance Date thereof and on
each anniversary of such Issuance Date.
"BA Rate" means the rate customarily charged by the Lender for the
issuance of Bankers Acceptances.
"Benefit Plan" means each employee benefit plan as defined in Section
3(3) of ERISA of the Borrower and its Subsidiaries.
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"Borrower" means Heads & Threads International LLC, a Delaware limited
liability company, and, subject to the provisions herein, its successors and
assigns.
"Borrowing Base" means an amount equal to the lesser of (1) $30,000,000
or (2) an amount, adjusted as described below, equal to (a) 85% of the face
amount (less maximum discounts, credits and allowances which may be taken by or
granted to the Account Debtor thereof in connection therewith) of all existing
Eligible Accounts that are set forth in the Schedule of Accounts then most
recently delivered by the Borrower to the Lender and all existing Eligible
Accounts that are set forth in any Schedule of Accounts delivered by the
Borrower to the Lender since the date of such Schedule of Accounts, which amount
shall be reduced by 100% of the face amount of all payments which the Borrower
has received on or in connection with its Eligible Accounts since the date of
such Schedule of Accounts, plus (b) 50% of Eligible Inventory, all as set forth
in the Schedule of Inventory then most recently delivered by the Borrower to the
Lender and all existing Eligible Inventory set forth in any Schedule of
Inventory delivered by the Borrower to the Lender since the date of such
Schedule of Inventory; provided, however, that, notwithstanding any contrary
provision contained herein, the Lender shall deduct an Inventory reserve in an
amount equal to $10,000,000, the Lender may adjust the Borrowing Base, the
calculation of Eligible Accounts and the calculation of Eligible Inventory based
upon the results of the field audit stated in Section 6.26, and the Lender may
elect at any time, if in its reasonable discretion, it is materially insecure,
to change the foregoing method of calculating the Borrowing Base by reducing
advances against Eligible Accounts and Eligible Inventory, or to deduct
additional reserves from the Borrowing Base. For purposes hereof, unless
otherwise notified by the Borrower, the Lender will assume that all monies
collected in the Lock Box (as defined in the Security Agreement) are payments of
Eligible Accounts.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Business Day" means with respect to any borrowing, payment and for all
other purposes, a day (other than a Saturday or Sunday) on which banks generally
are open in Chicago, Illinois for the conduct of substantially all of their
commercial lending activities.
"Borrowing Notice" is defined in Section 2.2.6.
"Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines or (ii) any adoption of or change in any other
law, governmental or quasi-
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governmental rule, regulation, policy, guideline, interpretation, or directive
(whether or not having the force of law) after the date of this Agreement which
affects the amount of capital required or expected to be maintained by the
Lender or any corporation controlling the Lender.
"Change in Control" means Alleghany Corporation shall fail to maintain
beneficial ownership, directly or indirectly, free and clear of any Lien other
than Liens in favor of the Lender, in the aggregate of at least eighty percent
(80%) of the membership interests of the Borrower and its Subsidiaries.
"Closing Date" means April 30, 2003.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral" means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Borrower and its Subsidiaries in
or upon which a Lien now or hereafter exists in favor of the Lender, whether
under this Agreement or under any other documents executed by any such Person
and delivered to the Lender.
"Commercial Letter of Credit" means any Facility Letter of Credit that
is a commercial or trade Letter of Credit.
"Commitment" means the obligation of the Lender to make Loans and issue
Facility Letters of Credit in an aggregate amount not exceeding $30,000,000.
"Commitment Fee" has the meaning stated in Section 2.4.1.1(ii).
"Compliance Certificate" means a compliance certificate, substantially
in the form of Exhibit A hereto, signed by the chief financial officer or
treasurer of the Borrower, showing the calculations necessary to determine
compliance with this Agreement and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the nature and
status thereof.
"Condemnation" is defined in Section 7.8.
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Borrower and its Subsidiaries calculated
on a consolidated basis for such period.
"Consolidated Funded Indebtedness" means at any time the aggregate
dollar amount of Consolidated Indebtedness which has actually been funded and is
outstanding at such time, whether or not such amount is due or payable at such
time.
"Consolidated Indebtedness" means at any time the Indebtedness of the
Borrower and its Subsidiaries calculated on a consolidated basis as of such
time.
"Contingent Obligation" of a Person means, without duplication, any
agreement, undertaking or arrangement by which such Person directly or
indirectly assumes guarantees, endorses, contingently agrees to purchase or
provide funds for the payment of, or otherwise
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becomes or is contingently liable upon, the obligation or liability of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise assures any creditor of
such other Person against loss, including, without limitation, any operating
agreement, comfort letter, take-or-pay contract or application or reimbursement
agreement for a Letter of Credit but excluding any endorsement of instruments
for deposit or collection in the ordinary course of business.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Credit Party" means the Borrower.
"Debt" means as of any time the aggregate of all indebtedness,
obligations, liabilities, reserves and any other items which would be listed as
a liability on a consolidated balance sheet of the Borrower in accordance with
GAAP consistently applied, and in any event including all indebtedness and
liabilities of any other person which the Borrower or any of its Subsidiaries
may guarantee or otherwise be responsible or liable for (other than any
liability arising out of the endorsement of commercial paper for deposit or
collection in the ordinary course of business), all indebtedness and liabilities
secured by any lien on any property of the Borrower or any of its Subsidiaries,
whether or not the same would be classified as a liability on a balance sheet,
the liability of the Borrower or any of its Subsidiaries, in respect to banker's
acceptances and letters of credit, and the aggregate amount of rentals or other
consideration payable by the Borrower or any of its Subsidiaries over the
remaining unexpired term of all capital leases (determined in accordance with
GAAP), but excluding all general contingency reserves and reserves for deferred
income taxes and investment credit.
"Default" means an event described in Article VII.
"Dollars", "U.S. Dollars" and "$" mean dollars in lawful currency of
the United States of America.
"Eligible Account" means any of the Accounts of the Borrower or any of
its Subsidiaries which meets each of the following requirements: (i) if it
arises from the sale of goods, such goods have been shipped or delivered to the
Account Debtor thereof or such goods are being invoiced in accordance with the
Borrower's or such Subsidiary's customary progress xxxxxxxx in accordance with
GAAP; (ii) it is a valid, legally enforceable obligation of the Account Debtor
thereunder, and is not subject to any offset, counterclaim or other defense on
such Account Debtor's part or to any claim on such Account Debtor's part denying
liability thereunder in whole or in part; (iii) it is subject to a perfected
Lien in the Lender's favor and is not subject to any other Lien whatsoever,
except for Permitted Liens; (iv) it is evidenced by an invoice (dated not later
than the date of shipment to the Account Debtor or performance and having a due
date not more than 60 days after the date of invoice) rendered to such Account
Debtor, and is not evidenced by any instrument or chattel paper; (v) it is
payable in Dollars; (vi) it is not accounts owing by any governmental agency or
body, (vii) it is not owing by any Account Debtor residing, located or having
its principal activities or place of business outside the United States of
America or who is not subject to service of process within the continental
United States of
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America, unless it is secured by a letter of credit in form and substance
acceptable to the Lender in the Lender's sole discretion or, it is an account
owing by one or more of the Account Debtors listed on Schedule 1.1 hereto, as
amended from time to time with the consent of the Lender, and such accounts in
the aggregate do not exceed twenty five percent (25%) of the total of Eligible
Accounts; (viii) it is not owing by any Account Debtor which is the subject of
any bankruptcy or insolvency proceeding; (ix) it is not owing by any of the
Borrower's Affiliates; (x) it is not unpaid more than 90 days after the date of
such invoice; (xi) it is not owing by an Account Debtor which shall have failed
to pay in full any invoice evidencing any Account within 90 days after the date
of such invoice, unless the total invoice amounts of such Account Debtor which
have not been paid within 90 days of the date of such invoice represent less
than 25% of the total invoice amounts then outstanding of such Account Debtor;
(xii) it is not an account upon which the Account Debtor is any of the
Borrower's Subsidiaries; and (xiii) it is not an Account as to which the Lender,
at any time or times hereafter, determines, in good faith, that the prospect of
payment or performance by the Account Debtor thereof is or will be impaired. An
Account of the Borrower which is at any time an Eligible Account, but which
subsequently fails to meet any of the foregoing requirements, shall forthwith
cease to be an Eligible Account.
"Eligible Inventory" means the Borrower's and its Subsidiaries'
inventory at cost which meets each of the following requirements: (i) it is in
such condition that it may be sold in the ordinary course of the Borrower's and
its Subsidiaries' business; (ii) in the case of goods held for sale, it is
unused (except as the Lender may otherwise consent in writing); (iii) it is
owned by the Borrower or its Subsidiaries and is subject to a perfected Lien in
the Lender's favor and is not subject to any other Lien whatsoever, except for
Permitted Liens; (iv) it is maintained in compliance with all governmental and
governmental agency regulations; and (v) the Lender, in good faith, has
determined, in accordance with the Lender's customary business practices, that
it is not unacceptable due to age, type, category and/or quantity. Any of the
Borrower's and its Subsidiaries Inventory which is Eligible Inventory at any
time, but which subsequently fails to meet any of the foregoing requirements,
shall forthwith cease to be Eligible Inventory.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, injunctions, permits, grants, franchises, licenses,
agreements and other governmental restrictions relating to (i) the protection of
the environment, (ii) the effect of the environment on human health, (iii)
emissions, discharges or releases of pollutants, contaminants, hazardous
substances or wastes into surface water, ground water or land, or (iv) the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided herein, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the rate determined by the Lender to be the rate
at which the Lender offers to place deposits in U.S. dollars with first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest
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Period, in the approximate amount of the Lender's relevant Eurodollar Loan and
having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, and
(ii) two percent (2.00%) per annum. The Eurodollar Rate shall be rounded to the
next higher multiple of 1/16 of 1.0% if the rate is not such a multiple.
"Excluded Taxes" means taxes imposed on the Lender's overall net
income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which the Lender is incorporated or organized, (ii) the jurisdiction in
which the Lender's principal executive office is located, or (iii) any other
taxes to which the Lender would be subject without regard to any Loan made
pursuant to this Agreement.
"Facility Letter of Credit Collateral Account" is defined in Section
2.3.9.
"Facility Letter of Credit Obligations" means, at any date of
determination thereof, all liabilities, whether actual or contingent, of the
Borrower in respect of the Facility Letters of Credit, including, without
limitation, the sum of (i) Reimbursement Obligations and (ii) the aggregate
undrawn face amount of any outstanding Facility Letters of Credit.
"Facility Letter of Credit Request" is defined in Section 2.3.4.
"Facility Letters of Credit" means, collectively, the Letters of Credit
and/or Bankers Acceptances issued by the Lender pursuant to Section 2.3.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Lender from three Federal
funds brokers of recognized standing selected by the Lender in its sole
discretion.
"Fiscal Year" means, with respect to the Borrower or any of its
Subsidiaries, the one year fiscal period beginning on January 1 and ending on
the last day of each calendar year.
"Floating Rate" means, for any day, a rate per annum equal to the Prime
Rate for such day less one half percent (.50%) per annum, in each case changing
when and as the Prime Rate changes.
"Floating Rate Advance" means an Advance, which except as otherwise
provided herein, bears interest at the Floating Rate.
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"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time; it being understood and agreed
that determinations in accordance with GAAP for purposes of Section 6.10,
including defined terms as used therein, shall utilize accounting principles and
policies in effect at the time of the preparation of, and in conformity with
those used to prepare, the December 31, 2002 consolidated financial statements
of the Borrower and its Subsidiaries heretofore delivered to the Lender.
"Gross Up Event" means the occurrence of any of the events stated in
Sections 3.1 or 3.2 hereof.
"Indebtedness" of a Person means, without duplication, (i) such
Person's obligations for borrowed money, (ii) such Person's obligations
representing the deferred purchase price of Property or services (other than
accounts payable arising in the ordinary course of such Person's business
payable on terms customary in the trade), (iii) obligations of another Person,
whether or not assumed, secured by Liens, or payable out of the proceeds or
production from property now or hereafter owned or acquired by such Person, (iv)
such Person's obligations which are evidenced by notes, acceptances, or other
instruments, (v) such Person's Capitalized Lease Obligations, (vi) such Person's
Rate Hedging Obligations, (vii) such Person's Contingent Obligations and (viii)
such Person's Subordinated Debt.
"Intangible Assets" means the amount (to the extent reflected in
determining consolidated stockholders' equity) of (i) all write-ups in the book
value of any asset owned or acquired by the Borrower or a Subsidiary, (ii) all
goodwill, covenants not to compete, prepayments, deferred charges, franchises,
patents, licenses, trademarks, service marks, trade names, brand names and
copyrights, (iii) all deferred financing costs (including, but not limited to,
unamortized debt discount and expense, organization expense and experimental and
development expenses, but excluding prepaid expenses), and (iv) leasehold
improvements not recoverable at the expiration of a lease.
"Intellectual Property" is defined in Section 5.19 hereof.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Internally Generated by Borrower's Operations" means with respect to
funds, funds which are (i) derived from the Borrower's and its Subsidiaries'
ordinary course of business operations; (ii) proceeds of sales of the Borrower's
and its Subsidiaries' assets permitted hereunder, or (iii) funds contributed to
the Borrower by Alleghany.
"Inventory" shall have the meaning stated therefor in the Security
Agreement.
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"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers, employees and sales agents
made in the ordinary course of business), extension of credit (other than
accounts receivable arising in the ordinary course of business on terms
customary in the trade) or contribution of capital by such Person, stocks,
bonds, mutual funds, partnership interests, notes, debentures or other
securities owned by such Person.
"Issuance Date" means with respect to any Facility Letter of Credit,
the date on which such Facility Letter of Credit is issued hereunder.
"Issuance Fee" means with respect to any Letter of Credit and any
extension, modification or renewal thereof, an amount equal to (x) one and one
quarter percent (1.25%), multiplied by (y) a fraction equal to (A) the number of
days between the date of issuance of such Letter of Credit and the date of
expiration of such Letter of Credit divided by (B) 360, multiplied by (z) the
maximum amount of such Letter of Credit, or such other issuance fee as the
Borrower and the Lender shall have otherwise agreed upon in writing.
"KPMG" means KPMG LLP, certified public accountants.
"Lender" is defined in the preamble to this Agreement.
"Letter of Credit" of a Person means a letter of credit, or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Letter of
Credit Agreement" is defined in Section 2.3.4 and Exhibit I.
"Letter of Credit Application" is defined in Section 2.3.4 and Exhibit
I.
"Letter of Purpose" is defined in Section 2.3.4 and Exhibit I.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, filed financing statement, assignment, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means a loan or any continuation thereof made by the Lender
pursuant to Article II.
"Loan Documents" means this Agreement, the Note, the Security
Agreement, the Acceptance
Credit Agreement, the Letter of Purpose, the Letter of
Credit Agreement, the Letter of Application and any other documents and
agreements contemplated hereby and executed by the Borrower or a Subsidiary in
favor of the Lender.
"Lock Box" has the meaning set forth in the Security Agreement.
"Lock Box Account" has the meaning set forth in the Security Agreement.
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"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, financial condition or results of operations of the Borrower
and its Subsidiaries taken as a whole, (ii) the ability of the Borrower to
perform its respective obligations under any of the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the rights or
remedies of the Lender thereunder.
"Material Indebtedness" is defined in Section 7.5.
"Multiemployer Plan" means a Plan defined in Section 3(37) of ERISA to
which the Borrower or any member of the Controlled Group may have any liability.
"Net Capital Expenditures" means all of the Borrower's and its
Subsidiaries' Capital Expenditures which are not funded from Advances hereunder.
"Net Income" shall mean, for any period, the net income (or loss),
after provision for taxes, of the Borrower and its Subsidiaries on a
consolidated basis for such period taken as a single accounting period but
excluding any unrealized losses and gains for such period resulting from
xxxx-to-market of Rate Hedging Agreements.
"Note" means the promissory note, substantially in the form of Exhibit
B hereto, with appropriate insertions, duly executed and delivered to the Lender
by the Borrower on the Closing Date payable to the order of the Lender in the
amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all accrued and unpaid fees arising under the Loan
Documents, all Facility Letter of Credit Obligations, Rate Hedging Obligations,
and all expenses, reimbursements, indemnities and other obligations of the
Borrower to the Lender or any indemnified party hereunder arising under the Loan
Documents or under any Rate Hedging Agreement.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals effective at the option of the lessor) of one
year or more.
"Other Taxes" is defined in Section 3.3(ii).
"Participants" is defined in Section 11.2.1.
"Payment Date" means the earlier of (i) the last Business Day of each
month commencing May 31, 2003, and (ii) the Revolving Facility Termination Date,
provided that for each Eurodollar Advance with an Interest period of six months,
the Payment Date for such Eurodollar Advance means the earlier of (i) the last
Business Day of each calendar quarter, (ii) the last day of the Interest Period
for the Applicable Eurodollar Advance, and (iii) the Revolving Facility
Termination Date.
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"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Lien" is defined in Section 6.16.
"Person" means any natural person, corporation, limited liability
company, firm, joint venture, partnership, association, enterprise, trust or
other entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 302 of
ERISA or Section 412 of the Code as to which the Borrower or any member of the
Controlled Group may have any liability.
"Prepayment Date" is defined in Section 2.4.1.
"Prime Rate" means a rate per annum equal to the prime or corporate
base rate of interest announced by the Lender from time to time, changing when
and as said prime or corporate base rate changes. Any change in the Prime Rate
shall take effect at the opening of business on the date specified in the
announcement of such change. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
The Lender may make commercial loans or other loans at rates of interest at,
above or below the Prime Rate.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 11.3.1.
"Rate Hedging Agreement" means an agreement, device or arrangement
providing for payments which are related to fluctuations of interest rates,
exchange rates or forward rates. including, but not limited to,
dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts and warrants.
"Rate Hedging Obligations" of a Person means any and all obligations of
such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Hedging Agreements, and (ii) any and all cancellations, buy backs, reversals,
terminations or assignments of any Rate Hedging Agreement.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
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"Reimbursement Obligations" means, at any time, the aggregate of the
obligations of the Borrower to the Lender in respect of all unreimbursed
payments or disbursements made by the Lender under or in respect of drawings or
payments otherwise under the Facility Letters of Credit.
"Rent" of a Person means for any given period the aggregate amounts
paid by such Person under all Operating Leases.
"Rentals" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reserve Requirement" means, with respect to a Eurodollar Interest
Period, the maximum aggregate reserve requirement (including all basic,
supplemental, marginal and other reserves) which is imposed under Regulation D
on Eurocurrency liabilities.
"Revolving Advance" means an Advance under the Revolving Facility
pursuant to Section 2.1.1.
"Revolving Facility Termination Date" means with respect to Revolving
Advances and Facility Letter of Credit Obligations, April 30, 2006 or any
earlier date on which the Aggregate Revolving Commitment is reduced to zero or
otherwise terminated pursuant to the terms hereof.
"Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
"Schedule of Accounts" means an aged trial balance and reconciliation
to the Borrowing Base in form and substance satisfactory to the Lender (which
may at the Lender's discretion include copies of original invoices) listing the
Borrower's and its Subsidiaries' Accounts, to be delivered to the Lender by the
Borrower and its Subsidiaries pursuant to Section 6.1(iv).
"Schedule of Inventory" means a schedule in form and substance
satisfactory to the Lender listing the Borrower's and its Subsidiaries'
Inventory, to be delivered to the Lender by the Borrower pursuant to Section
6.1(iv), describing such Inventory by category, age and type.
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"Schedule of Payables" means a detailed aged schedule in form and
substance satisfactory to the Lender listing the Borrower's and its
Subsidiaries' accounts payable, to be delivered on a monthly basis to the Lender
by the Borrower pursuant to Section 6.1(iv).
"SEC" means the Securities and Exchange Commission, or any Person
succeeding to any of its principal functions.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Security Agreement" means that certain Security Agreement and
Financing Statement between Borrower and the Lender dated as of April 30, 2003
in substantially the form of Exhibit C hereto as amended, modified or restated
from time to time.
"Senior Funded Debt" means all Indebtedness that is not Subordinated
Debt.
"Single Employer Plan" means a Plan which is not a Multiemployer Plan
maintained by the Borrower or any member of the Controlled Group for employees
of the Borrower or any member of the Controlled Group.
"Standby Letter of Credit" means any Facility Letter of Credit that is
a standby Letter of Credit.
"Subordinated Debt" means any unsecured Indebtedness of the Borrower
(a) no part of the principal of which is stated to be payable or is required to
be paid (whether by way of mandatory sinking fund, mandatory redemption,
mandatory prepayment or otherwise) prior to the Revolving Facility Termination
Date and the payment of the principal of and interest on which and other
obligations of the Borrower in respect thereof are subordinated to the prior
payment in full of principal of and interest (including post-petition interest)
on the Notes and all other obligations and liabilities of the Borrower to the
Lender hereunder on terms and conditions first approved in writing by the Lender
and (b) otherwise containing terms, covenants and conditions satisfactory in
form and substance to the Lender, as evidenced by its prior written approval
thereof, including without limitation the Indebtedness evidenced by the
Subordinated Notes. The Lender expressly agrees that the Alleghany Debt does not
constitute Subordinated Debt.
"Subordinated Notes" means collectively all notes evidencing
Subordinated Debt whether now existing or hereafter arising and substitutions or
replacements therefor.
"Subsidiary" of any Person means (i) any corporation more than 50% of
whose stock of any class or classes having by the terms thereof ordinary voting
power to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries and (ii) any partnership, association (including business trusts),
joint venture, limited liability company or other entity in which such Person
directly or indirectly through Subsidiaries, has more than 50% voting or equity
interest at the time.
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"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than five
percent (5%) of the consolidated assets of the Borrower and its Subsidiaries as
at the last day of the calendar month ending on or most recently ended prior to
the date on which such determination is made, or (ii) is responsible for more
than five percent (5%) of the consolidated net sales or of the consolidated net
income of the Borrower and its Subsidiaries for the period of twelve complete
consecutive calendar months ending on or most recently ended prior to the date
on which such determination is made.
"Tangible Net Worth" means at any time the Borrower's consolidated (i)
Total Assets, minus (ii) Total Liabilities, plus (iii) Subordinated Debt less
(iv) the sum of each of the following to the extent that each of (a), (b), (c),
(d) and (e) is included in Total Assets: (a) the aggregate amount of any
Intangible Assets of the Borrower and its Subsidiaries, (b) all prepaid
expenses, (c) all deferred income taxes, (d) notes receivable from and
investments in Affiliates and (e) "other assets" as customarily designated on
the Borrower's consolidated balance sheet. All components of Tangible Net Worth
shall be computed in accordance with GAAP.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes.
"Total Assets" means, as of the date of determination, the aggregate
amount of assets of the Borrower and its Subsidiaries determined in accordance
with GAAP.
"Total Liabilities" means, as of the date of determination, the
aggregate amount of liabilities of the Borrower and its Subsidiaries determined
in accordance with GAAP.
"Transferee" is defined in Section 12.4.
"Type" means with respect to any Advance, its nature as a Floating Rate
Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans as if such Plans were terminating on such date under Section 4041 of
ERISA.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint venture
or similar business organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.
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1.2 Other Interpretive Provisions. (a) The meanings of defined terms
are equally applicable to the singular and plural forms of the defined terms.
All references to Persons shall include such Person's successors and assigns as
applicable.
(b) The words "hereof", "herein", "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement, and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other writings,
however evidenced.
(i) The term "including" is not limiting and means "including
without limitation."
(ii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but
excluding", and the word "through" means "to and including."
(iii) The term "property" includes any kind of property or
asset, real, personal or mixed, tangible or intangible.
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the statute or
regulation.
(e) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms. Unless otherwise expressly
provided, any reference to any action of the Lender by way of consent, approval
or waiver shall be deemed modified by the phrase "in its sole discretion."
(e) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Lender and the
Borrower, and are the products of both parties. Accordingly, they shall not be
construed against the Lender merely because of the Lender's involvement in their
preparation.
1.3 Accounting Principles.
(a) Unless the context otherwise clearly requires, all accounting
terms not expressly defined herein shall be construed, and all financial
computations required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter" refer
to such fiscal periods of the Borrower.
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ARTICLE II
THE CREDITS
2.1 Description of Facility.
2.1.1 Revolving Facility. Upon the terms and subject to the conditions
set forth in this Agreement, the Lender hereby grants to the Borrower a
revolving credit facility pursuant to which: (i) the Lender agrees to make
Revolving Advances to the Borrower in accordance with Section 2.2; and (ii) the
Lender agrees to issue Facility Letters of Credit in accordance with Section
2.3; provided, however, that in no event may the sum of (1) the aggregate
principal amount of all outstanding Revolving Advances and (2) the Facility
Letter of Credit Obligations exceed the lesser of (i) the Borrowing Base, or
(ii) the Aggregate Revolving Commitment.
2.1.2 Use of Proceeds. The proceeds of the Revolving Advances will be
used solely to refinance the Borrower's existing indebtedness, and for
Borrower's general business purposes.
2.2 Advances.
2.2.1 Commitment. From and including the date of this Agreement and
prior to the Revolving Facility Termination Date, the Lender agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
from time to time in amounts not to exceed in the aggregate at any one time
outstanding (after giving effect to the intended use of proceeds of any Loan
used to repay any outstanding Reimbursement Obligations) the amount of its
Commitment. Subject to the terms of this Agreement, the Borrower may borrow,
repay, and reborrow Revolving Advances from the Lender at any time prior to the
Revolving Facility Termination Date. The Commitment of the Lender to lend
hereunder shall expire on the Revolving Facility Termination Date.
2.2.2 Termination. All outstanding Revolving Advances owing to Lender
shall be paid in full by the Borrower on the Revolving Facility Termination
Date. All other unpaid Obligations owing to the Lender shall be paid on the
Revolving Facility Termination Date.
2.2.3 Intentionally Omitted.
2.2.4 Types of Advances. The Advances may be Floating Rate Advances or
Eurodollar Advances, or a combination thereof, selected by the Borrower in
accordance with Sections 2.2.6 and 2.2.7.
2.2.5 Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $300,000 (and in multiples of $100,000 if in excess
thereof) and each Floating Advance shall be in the minimum amount of $10,000
(and in multiples of $10,000 if in excess thereof); provided, however, that any
Advance may be in the amount of the unused Aggregate Available Revolving
Commitment should the Aggregate Available Revolving Commitment be less than
$300,000.
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2.2.6 Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each
Eurodollar Advance, the Interest Period applicable thereto from time to time.
The Borrower shall give the Lender irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate
Advance and two Business Days before the Borrowing Date for each Eurodollar
Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest Period
applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, the Lender shall make
available to the Borrower its Loan or Loans in funds immediately available in
Chicago.
2.2.7 Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.2.7 or are repaid in accordance with Section 2.3.7. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.3.7 or (y) the
Borrower shall have given the Lender a Conversion/Continuation Notice (as
defined below) requesting that, at the end of such Interest Period, such
Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.2.6, the Borrower may elect
from time to time to convert all or any part of a Floating Rate Advance into a
Eurodollar Advance. The Borrower shall give the Lender irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Chicago time) at least two Business Days prior to the date of the
requested conversion or continuation, specifying:
(v) the requested date, which shall be a Business Day, of such
conversion or continuation,
(vi) the aggregate amount and Type of the Advance which is to be
converted or continued, and
(vii) the amount of such Advance which is to be converted into or
continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
2.3 Facility Letters of Credit.
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2.3.1 Obligation to Issue. From and including the date of this
Agreement and prior to the Business Day prior to the Revolving Facility
Termination Date, the Lender agrees, on the terms and conditions set forth in
this Agreement to issue for the account of the Borrower or one or more of its
Subsidiaries, one or more Letters of Credit and Bankers Acceptances in
accordance with this Section 2.3.
2.3.2 Types and Amounts. The Lender shall not have any obligation to
and shall not:
(i) issue any Facility Letter of Credit if, after giving
effect thereto, the sum of (a) the Facility Letter of Credit
Obligations and (b) the aggregate unpaid principal balance of the
Revolving Advances would exceed the Aggregate Revolving Commitment; or
(ii) issue any Facility Letter of Credit which has an expiry
date (a) later than twelve months after the Issuance Date thereof or
(b) after the Facility Termination Date.
2.3.3 Conditions. In addition to being subject to the satisfaction of
the conditions contained in Sections 4.1 and 4.2, the obligation of the Lender
to issue any Facility Letter of Credit is subject to the satisfaction in full of
each of the following conditions:
(i) the Borrower shall have delivered to the Lender at such
times and in such manner as the Lender may reasonably prescribe such
documents and materials as may be required pursuant to the terms of the
requested Facility Letter of Credit (it being understood that if any
inconsistency exists between the Lender's Facility Letter of Credit
documents and the Loan Documents, the terms of the Loan Documents shall
govern and control) and the requested Facility Letter of Credit shall
be reasonably satisfactory to the Lender as to form and content; and
(ii) as of the Issuance Date, no order, judgment or decree of
any court, arbitrator or governmental authority shall purport by its
terms to enjoin or restrain the Lender from issuing the requested
Facility Letter of Credit and no law, rule or regulation applicable to
the Lender and no request or directive (whether or not having the force
of law) from any governmental authority with jurisdiction over the
Lender shall prohibit or request that the Lender refrain from the
issuance of Letters of Credit generally or the issuance of such
requested Facility Letter of Credit in particular.
2.3.4 Procedure for Issuance of Facility Letters of Credit.
(a) Prior to the Borrower's request for issuance of any Facility Letter
of Credit, the Borrower shall have delivered to Lender a Letter of Credit
Agreement substantially in the form of Exhibit D hereto or an Acceptance Credit
Agreement substantially in the form of Exhibit I hereto as applicable. The
Borrower shall give the Lender written notice not later than noon (Chicago time)
at least two Business Days before the Issuance Date of any requested Facility
Letter of Credit (each a "Facility Letter of Credit Request") (except that, in
lieu of such
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written notice, the Borrower may give the Lender notice of such request by
tested telex or other tested arrangement satisfactory to the Lender) accompanied
by the Lender's Letter of Credit Application in the form provided in Exhibit D
hereto or, as applicable, the Letter of Purpose in the form provided in Exhibit
I hereto. Such Facility Letter of Credit Request shall be irrevocable and shall
specify in addition to the information required in the Letter of Credit
Application or the Letter of Purpose:
(1) the stated amount of such requested Facility Letter of
Credit;
(2) the Issuance Date (which day shall be a Business Day);
(3) the date on which such requested Facility Letter of
Credit is to expire (which date shall be a Business Day
and shall in no event be later than either (i) twelve
months after its Issuance Date or (ii) the Revolving
Facility Termination Date);
(4) the purpose for which such Facility Letter of Credit is
to be issued;
(5) the Person for whose benefit the requested Facility
Letter of Credit is to be issued; and
(6) whether the requested Facility Letter of Credit will be
a Commercial Letter of Credit, a Standby Letter of
Credit or a Bankers Acceptance.
Prior to the issuance of the requested Facility Letter of Credit, the
Borrower shall provide the Lender with a copy of the form of the
Facility Letter of Credit it is requesting be issued.
(b) Subject to the terms and conditions of this Section 2.3.4
and provided that the applicable conditions set forth in Sections 4.1 (in the
case of the initial Facility Letter of Credit), 4.2 and 2.3.3 have been
satisfied, the Lender shall, on the applicable Issuance Date, issue a Facility
Letter of Credit on behalf of the Borrower in accordance with the Lender's usual
and customary business practices.
(c) The Lender shall not extend or amend any Facility Letter
of Credit unless the requirements of Sections 2.3.2 and 2.3.4 are met.
2.3.5 Reimbursement Obligations.
(a) (i) The Lender shall promptly notify the Borrower of any
draw or other payment under any Facility Letter of Credit. The Borrower
shall reimburse the Lender for drawings under any such Letters of
Credit or payments under Bankers Acceptances (including the Lender's
issuing costs) no later than the Business Day after the payment in
respect of such Facility Letter of Credit by the Lender, together with
interest thereon at the Prime Rate plus 2% per annum from the date of
payment on such Facility Letter of Credit by the Lender to and
including the date on which the Lender is reimbursed for such payment
by the Borrower.
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(ii) Any Reimbursement Obligation with respect to any
Facility Letter of Credit which is not paid on the date when due in
accordance with Section 2.3.5(a)(i) shall (A) if there is availability
for such an Advance pursuant to Section 2.1.1, be automatically
converted on such date into a Revolving Advance and shall bear interest
at the Floating Rate or (B) if there is no availability for an Advance
pursuant to Section 2.1.1, be payable on demand and bear interest until
paid at a rate per annum equal to the sum of (a) the Prime Rate plus
(b) 2% per annum.
(b) Any action taken or omitted to be taken by the Lender
under or in connection with any Facility Letter of Credit, if taken or omitted
in the absence of willful misconduct or gross negligence, shall not put the
Lender under any resulting liability to the Borrower. In determining whether to
pay under any Facility Letter of Credit, the Lender shall have no obligation
relative to the Borrower other than to confirm that any documents required to be
delivered under such Facility Letter of Credit appear to comply on their face
with the requirements of such Facility Letter of Credit.
2.3.6 Intentionally Omitted.
2.3.7 Payment of Reimbursement Obligations.
The Borrower agrees to pay to the Lender the amount of all
Reimbursement Obligations, interest and other amounts payable to the Lender
under or in connection with each Facility Letter of Credit immediately when due,
irrespective of any claim, set-off, defense or other right which the Borrower or
any Subsidiary may have at any time against the Lender or any other Person,
under all circumstances, including without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or
other right which the Borrower or any Subsidiary may have at any time
against a beneficiary named in a Facility Letter of Credit or any
transferee of any Facility Letter of Credit (or any Person for whom any
such transferee may be acting), the Lender, or any other Person,
whether in connection with this Agreement, any Facility Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between the
Borrower or any Subsidiary and the beneficiary named in any Facility
Letter of Credit);
(iii) any draft, certificate or any other document
presented under the Facility Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement
therein being untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for
the performance or observance of any of the terms of any of the Loan
Documents;
(v) the occurrence of any Default or Unmatured
Default.
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2.3.8 Compensation for Facility Letters of Credit. The
Borrower shall pay to the Lender on or before the Issuance Date of each Letter
of Credit (or such later date as the Borrower and Lender shall agree upon in
writing), and shall also pay from time to time the Lender's reasonable and
customary costs of, and fees for, issuing and servicing such Letter of Credit.
The Borrower shall also pay to the Lender, the Issuance Fee with respect to each
Letter of Credit, for the period from the Issuance Date thereof to and including
the final expiration date thereof. The Issuance Fee shall be due and payable in
full on the Issuance Date of each Letter of Credit or extension thereof (as the
expiration of such Letter of Credit may be extended from time to time). The
Issuance Fee shall be non refundable and shall be fully earned as of the date
each payment thereof is due.
Borrower shall pay to the Lender on or before the Issuance Date of each
Bankers Acceptance (or such later date as the Borrower and the Lender shall
agree upon in writing), and shall also pay from time to time the Lender's
reasonable and customary costs of issuing and servicing such Bankers Acceptance.
The Borrower shall also pay to the Lender, the Bankers Acceptance Fee with
respect to each Bankers Acceptance, for the period from the Issuance Date
thereof to and including the final expiration date thereof. The Bankers
Acceptance Fee shall be due and payable in full on the Issuance Date of each
Bankers Acceptance. The Banker's Acceptance Fee shall be non refundable and
shall be fully earned as of the date each payment thereof is due.
2.3.9 Facility Letter of Credit Collateral Account. The
Borrower hereby agrees that it will, until the final expiration date of any
Facility Letter of Credit and thereafter as long as any Facility Letter of
Credit Obligation is outstanding or payable to the Lender, maintain a special
cash collateral account (the "Facility Letter of Credit Collateral Account") at
the Lender's office at the address specified pursuant to Article XIII, in the
name of the Borrower but under the sole dominion and control of the Lender, in
which the Borrower shall have no interest other than as set forth in Section 15
of the Security Agreement. Upon demand of the Lender (i) after the occurrence
and during the continuance of an Unmatured Default or a Default, or (ii) upon
the Revolving Facility Termination Date, the Borrower shall deposit funds into
the Facility Letter of Credit Collateral Account up to the amount of the
Facility Letter of Credit Obligations in existence from time to time. Nothing in
this Section 2.3.9 shall either obligate the Lender to require the Borrower to
deposit any funds in the Facility Letter of Credit Collateral Account or limit
the right of the Lender to release any funds held in the Facility Letter of
Credit Collateral Account other than as required by Section 15 of the Security
Agreement.
2.4 General Facility Terms.
2.4.1 Fees; Reductions in Aggregate Commitment.
2.4.1.1 Fees. The Borrower agrees to pay to the
Lender the following fees:
(i) Closing Fee. On the Closing Date, the
Borrower shall pay to the Lender a one time
non-refundable closing fee of $50,000.
(ii) Commitment Fee. A nonrefundable
quarterly commitment fee equal to the product of (a)
one quarter percent (.25%) and (b) the
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average non-utilized portion of the Aggregate
Revolving Commitment during such quarter, which
commitment fee shall be deemed earned in its entirety
on the date of this Agreement (the "Commitment Fee").
The Commitment Fee shall be payable quarterly in
arrears on June 30, 2003 and on the last Business Day
of each September, December, March and June
thereafter prior to the Facility Termination Date for
Revolving Advances with the outstanding unpaid
balance of such fee due on the Facility Termination
Date for Revolving Advances.
2.4.1.2 Reductions in Aggregate Revolving Commitment.
The Borrower may permanently reduce the Aggregate Revolving Commitment
in whole, or in part in integral multiples of $1,000,000, upon at least
three Business Days' written notice to the Lender, which notice shall
specify the amount of any such reduction, provided, however, that the
amount of the Aggregate Revolving Commitment may not be reduced below
an amount equal to the sum of (a) the aggregate principal amount of the
outstanding Revolving Advances plus (b) an amount equal to (x) the
outstanding Facility Letter of Credit Obligations less (y) the amount
of cash funds on deposit in the Facility Letter of Credit Collateral
Account.
2.4.2 Optional Principal Payments; Mandatory Principal
Payments. In addition to funds collected in the Lock Box, the Borrower may from
time to time pay all outstanding Floating Rate Advances, or, pay in a minimum
aggregate amount of $300,000 or any integral multiple of $100,000 in excess
thereof, without penalty or premium, any portion of the outstanding Floating
Rate Advances upon prior notice to the Lender not later than 10:30 a.m. (Chicago
time) at least one (1) Business Day before the date of such prepayment.
Notwithstanding anything in this Section 2.4.2 to the contrary, if at any time
(i) the sum of the aggregate unpaid principal balance of the Advances plus the
Facility Letter of Credit Obligations exceeds the Aggregate Commitment, or (ii)
the sum of the aggregate unpaid principal balance of the Revolving Advances plus
the Facility Letter of Credit Obligations exceeds the Aggregate Revolving
Commitment, the Borrower shall, make an immediate mandatory payment on the
Advances and/or Revolving Advances equal to such excess.
2.4.3 Changes in Interest Rate, etc. Each Floating Rate
Advance shall bear interest on the outstanding principal amount thereof, for
each day from and including the date such Advance is made or is automatically
converted from a Eurodollar Advance into a Floating Rate Advance pursuant to
Section 2.2.7, to but excluding the date it is paid or is converted into a
Eurodollar Advance pursuant to Section 2.2.7 hereof, at a rate per annum equal
to the Floating Rate for such day. Changes in the rate of interest on that
portion of any Advance maintained as a Floating Rate Advance will take effect
simultaneously with each change in the Prime Rate. Each Eurodollar Advance shall
bear interest on the outstanding principal amount thereof from and including the
first day of the Interest Period applicable thereto to (but not including) the
last day of such Interest Period at the interest rate determined by the Lender
as applicable to such Eurodollar Advance based upon the Borrower's selections
under Sections 2.2.6 and 2.2.7 and otherwise in accordance with the terms
hereof. No Interest Period may end after the Facility Termination Date.
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2.4.4 Rates Applicable After Default. During the continuance
of a Default, each Advance shall bear interest at a rate per annum equal to the
rate otherwise applicable to the Advance plus, to the extent permitted by law,
2% per annum.
2.4.5 Method of Payment. All payments of the Obligations
hereunder shall be made, without setoff, deduction, or counterclaim, in
immediately available funds to the Lender at the Lender's address specified
pursuant to Article XIII, by noon (Chicago time) on the date when due. The
Lender is hereby authorized to charge the account of the Borrower maintained
with the Lender for each payment of principal, interest and fees as it becomes
due hereunder.
2.4.6 [Intentionally Omitted]
2.4.7 Collateral. Payment and performance of all of the
Obligations shall be secured by the Collateral pursuant to the Security
Agreement.
2.4.8 Notes; Telephonic Notices. The Lender is hereby
authorized to record the principal amount of each of its Loans and each
repayment on a schedule attached to its Note or otherwise in the Lender's
records, and such entries shall be prima facie evidence of the existence and the
amounts of the Obligations therein recorded; provided, however, that neither the
failure to so record nor any error in such recordation shall affect the
Borrower's obligations under any such Note. The Borrower hereby authorizes the
Lender to extend, or continue Revolving Advances and to transfer funds and issue
Facility Letters of Credit in each case based on telephonic notices made by any
Authorized Officer or Authorized Officers the Lender in good faith believes to
be acting on behalf of the Borrower. The Borrower agrees to deliver promptly to
the Lender a written confirmation if such confirmation is requested by the
Lender, of each telephonic notice signed by an Authorized Officer. If the
written confirmation differs in any material respect from the action taken by
the Lender, the records of the Lender shall govern absent manifest error.
2.4.9 Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Advance shall be payable on each Payment Date, commencing with
the first such date to occur after the date hereof, on any date on which such
Advance is prepaid, whether due to acceleration or otherwise, and at maturity.
Interest accrued on that portion of the outstanding principal amount of any
Advance optionally prepaid on a day other than a Payment Date, shall be payable
on the Payment Date next succeeding the date of such prepayment. Interest on all
Advances and fees shall be calculated for actual days elapsed on the basis of a
360-day year. Interest shall be payable for the day an Advance is made but not
for the day of any payment on the amount paid if payment is received prior to
noon (local time) at the place of payment. If any payment of principal on an
Advance shall become due on a day which is not a Business Day and, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in computing interest in connection with such payment.
2.4.10 [Intentionally Omitted]
2.4.11 [Intentionally Omitted]
2.4.12 Maintenance of Balances and Lock Box Account.
Throughout the term of this Agreement the Borrower agrees (i) to utilize the
Lender as its primary depository and
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xxxxxxxxxx xxxxx, (xx) at all times to maintain the Lock Box and Lock Box
Account with the Lender and (iii) in the event depository accounts for
collection purposes are maintained with other Persons, to cause such Persons to
enter blocked account agreements with Lender, reasonably acceptable to Lender,
provided that the Borrower may maintain a depository account with First Savings
Bank in New Jersey up to one hundred twenty (120) days after the Closing Date
without delivering a blocked account agreement to Lender.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted, enacted, modified or otherwise becoming
effective after the date hereof, or any interpretation thereof, or the
compliance of the Lender therewith,
(i) subjects the Lender to any tax, duty, charge or
withholding on or from payments due from the Borrower
(excluding any Excluded Tax), or changes the basis of taxation
of payments to the Lender in respect of its Loans, the
Facility Letters of Credit or other amounts due it hereunder,
or
(ii) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with or for
the account of, or credit extended by, the Lender (other than
reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which
is to increase the cost to the Lender of making, funding,
maintaining, issuing Loans or Letters of Credit or reduces any
amount receivable by the Lender in connection with Loans or
Letters of Credit, or requires the Lender to make any payment
calculated by reference to the amount of loans held, Letters
of Credit issued or interest received by it, in each case by
an amount deemed material by the Lender,
then, within 15 days of demand by the Lender, the Borrower shall pay the Lender
that portion of such increased expense incurred or reduction in an amount
received which the Lender reasonably determines is attributable to making,
funding and maintaining its Loans and its Commitment.
3.2 Changes in Capital Adequacy Regulations. If the Lender determines
the amount of capital required or expected to be maintained by the Lender, or
any corporation controlling the Lender is increased as a result of a Change,
then, within 15 days of demand by the Lender, the Borrower shall pay the Lender
the amount necessary to compensate for any shortfall in the rate of return on
the portion of such increased capital which the Lender determines is
attributable to this Agreement, its Loans or its obligation to make Loans
hereunder (after taking into account the Lender's policies as to capital
adequacy).
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3.3 Taxes.
(i) All payments by the Borrower to or for the account of the
Lender hereunder or under any Note shall be made free and clear of and
without deduction for any and all Taxes. If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to the Lender, (a) the sum payable shall be increased
as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.3) the Lender receives an amount equal to the sum it would have
received had no such deductions been made, (b) the Borrower shall make
such deductions, (c) the Borrower shall pay the full amount deducted to
the relevant authority in accordance with applicable law and (d) the
Borrower shall furnish to the Lender the original copy of a receipt
evidencing payment thereof within 30 days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any
present or future stamp or documentary taxes and any other excise or
property taxes, charges or similar levies which arise from any payment
made hereunder or under any Note or from the execution or delivery of,
or otherwise with respect to, this Agreement or any Note ("Other
Taxes").
(iii) The Borrower hereby agrees to indemnify the Lender for
the full amount of Taxes or Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed on amounts payable under this Section
3.3) paid by the Lender and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto.
Payments due under this indemnification shall be made within 30 days of
the date the Lender makes demand therefor pursuant to Section 3.4.
3.4 Lender Statements; Survival of Indemnity. Lender shall deliver a
written statement to the Borrower as to the amount due, if any, under Section
3.1, 3.2 or, 3.3. Such written statement shall set forth in reasonable detail
the calculations upon which Lender determined such amount and shall be final,
conclusive and binding on the Borrower absent manifest error. Unless otherwise
provided herein, the amount specified in the written statement of Lender shall
be payable on demand after receipt by the Borrower of such written statement.
The obligations of the Borrower under Sections 3.1, 3.2 and 3.3 shall survive
for a period of one year after the later of the payment in full of the
Obligations and the termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Initial Advance and Facility Letter of Credit. The Lender shall not
be required to make the initial Advance hereunder and, if the initial Advance
shall not have been made, the Lender shall not be required to issue any Facility
Letter of Credit hereunder unless the Borrower
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has furnished to the Lender the following, each dated as of the initial
Borrowing Date or Issuance Date, as the case may be (or such earlier date as
shall be acceptable to the Lender):
(i) Copies of the certificate of formation of the
Borrower, together with all amendments thereto, and
certificates of good standing of the Borrower from each
jurisdiction in which the Borrower is qualified to do
business, all certified by the appropriate governmental
officers in their respective jurisdiction.
(ii) Copies, certified by the Secretary or an
Assistant Secretary of the Borrower, of its limited liability
company agreement and of Board of Directors' and members'
resolutions (and resolutions of other bodies, if any are
deemed necessary by counsel for the Lender) authorizing the
execution of each of the Loan Documents to which the Borrower
is a party.
(iii) Incumbency certificate, executed by the
Secretary or an Assistant Secretary of the Borrower, which
shall identify by name and title and bear the signature of the
officers of the Borrower authorized to sign the Loan Documents
to which it is a party and, with respect to the Borrower, to
make borrowings hereunder, upon which certificates the Lender
shall be entitled to rely until informed of any change in
writing by the Borrower.
(iv) A certificate of the Borrower, signed by the
president or chief financial officer of the Borrower, stating
that on the initial Borrowing Date the Borrower is solvent and
no Default or Unmatured Default has occurred and is
continuing.
(v) A written opinion of Xxxxx Xxxxxxxxxx LLP,
outside counsel to the Borrower, addressed to the Lender in
substantially the form of Exhibit E hereto.
(vi) This Agreement and the Note fully executed and
payable to the order of the Lender.
(vii) A Security Agreement executed by the Borrower
and (if applicable) the Subsidiaries in favor of the Lender,
together with:
(a) original copies of Uniform Commercial
Code financing statements (Form UCC-1), dated a date
reasonably near (but not subsequent to) to the
Closing Date naming the Borrower as Debtor and the
Lender as the secured party, in a form sufficient to
be filed under the Uniform Commercial Code of all
jurisdictions as may be necessary or, in the
reasonable opinion of the Lender, desirable to
perfect the security interest of the Lender pursuant
to the Security Agreement;
(b) executed copies of proper Uniform
Commercial Code termination statements (Form UCC-3)
and such other instruments or agreements to release
all Liens and other rights of any Person in any
collateral covered by the Collateral Documents.
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(viii) Subordination agreements in form and substance
acceptable to the Lender with respect to Subordinated Debt (if
any).
(ix) A payoff letter for Indebtedness which is to be
refinanced with Loan proceeds.
(x) Written money transfer instructions in the form
of Exhibit F hereto addressed to the Lender and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Lender may have reasonably
requested.
(xi) Evidence satisfactory to the Lender that the
Borrower shall have paid, or concurrently with the making of
the initial Advance or the issuance of the initial Facility
Letter of Credit shall pay, in full, all fees required to be
paid pursuant to Section 2.4.1 on or before the initial
Borrowing Date or Issuance Date, as the case may be.
(xii) The insurance certificate described in Section
5.24 along with evidence that the Lender has been named as
loss payee under all policies of casualty insurance, and as
additional insured under all policies of liability insurance
required in accordance with Section 5.23 and under the
Security Agreement (in the form of certificates of insurance,
with standard lenders' loss payable endorsements acceptable to
the Lender or other instruments or documents evidencing such
insurance coverage).
(xiii) A Letter of Credit Agreement executed by the
Borrower in the form of Exhibit D.
(xiv) An Acceptance Credit Agreement executed by the
Borrower in the form of Exhibit I.
(xv) An initial Borrowing Base certificate and aging
of Accounts.
(xvi) Such consents, estoppels, subordination
agreements and other documents and instruments executed by
landlords, tenants and other Persons party to material
contracts relating to any Collateral as to which the Lender
shall be granted a Lien, as requested by the Lender.
(xvii) Evidence that all other actions necessary or,
in the opinion of the Lender, desirable to perfect and protect
the first priority Lien created by the Security Agreement, and
to enhance the Lender's ability to preserve and protect its
interests in and access to the Collateral, have been taken.
(xviii) Such other documents as Lender or its counsel
may have reasonably requested.
4.2 Each Advance and Facility Letter of Credit. The Lender shall not be
required to make any Advance (other than an Advance that, after giving effect
thereto and to the application of the proceeds thereof, does not increase the
aggregate amount of outstanding Advances) and
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the Lender shall not be required to issue any Facility Letter of Credit, unless
on the applicable Borrowing Date or Issuance Date, as the case may be:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in
Article V are true and correct as of such Borrowing Date
except to the extent any such representation or warranty is
stated to relate solely to an earlier date, in which case such
representation or warranty shall be true and correct on and as
of such earlier date.
Each Borrowing Notice with respect to each such Advance and each Facility Letter
of Credit Request shall constitute a representation and warranty by the Borrower
that the conditions contained in Sections 4.2(i) and (ii) have been satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lender that:
5.1 Corporate Existence and Standing. The Borrower is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware, and each Subsidiary (if any) is a limited
liability company duly formed, or a corporation duly incorporated, validly
existing and in good standing under the laws of its respective state of
formation or incorporation. Each of the Borrower and the Subsidiaries is duly
qualified and in good standing as a foreign corporation or limited liability
company, as the case may be, authorized to do business in each jurisdiction
where such qualification is required because of the nature of its activities or
properties and where the failure to maintain such qualification would singly or
in the aggregate cause a Material Adverse Effect.
5.2 Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by the Borrower of the Loan Documents and the performance of its obligations
thereunder have been duly authorized by proper limited liability company
proceedings, and the Loan Documents constitute legal, valid and binding
obligations of the Borrower, enforceable against the Borrower in accordance with
the terms thereof, except as enforceability may be limited by bankruptcy,
insolvency or similar laws or general principles of equity relating to remedies
affecting or relating to the enforcement of creditors' rights generally.
5.3 No Conflict; Government Consent. Neither the execution and delivery
by the Borrower of the Loan Documents, nor the consummation of the transactions
therein contemplated, nor compliance with the provisions thereof will violate
any law, rule, regulation, order, writ, judgment, injunction, decree or award
binding on the Borrower or any of its Subsidiaries, or violate the Borrower's or
any Subsidiary's limited liability company agreement, certificate of
incorporation or by-laws, or the provisions of any indenture, instrument or
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agreement to which the Borrower or any of its Subsidiaries is a party or is
subject, or by which it or its Property is bound, or conflict with or constitute
a default thereunder, or result in the creation or imposition of any Lien in, of
or on the Property of the Borrower or a Subsidiary pursuant to the terms of any
such indenture, instrument or agreement, except for any such violation or
conflict which would not singly or in the aggregate cause a Material Adverse
Effect. No order, consent, approval, license authorization, or validation of, or
filing, recording or registration with, or exemption by, or other action in
respect of any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect of, any of the Loan Documents, except as may be applicable because of the
Lender, being a party thereto or except as may be required with respect to
particular Facility Letters of Credit, and except for any failure to obtain any
such order, consent, approval, license, authorization or exemption or to make
any such filing or recordation or to take any such other action which would not
singly or in the aggregate cause a Material Adverse Effect.
5.4 Financial Statements. The December 31, 2002 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Lender were prepared in accordance with GAAP as in effect on the date such
statements were prepared and fairly present the consolidated financial condition
and operations of the Borrower and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended.
5.5 Material Adverse Change. Except as set forth as of the date of this
Agreement on Schedule 5.5 hereto, since December 31, 2002, there has been no
change in the business, Property, financial condition or results of operations
of the Borrower and its Subsidiaries, taken as a whole, which could reasonably
be expected to have a Material Adverse Effect.
5.6 Taxes. Except as set forth as of the date of this Agreement on
Schedule 5.6 hereto, the Borrower and its Subsidiaries have filed (or joined in
the filing of) all United States federal income tax returns and all other tax
returns which are required to be filed and have paid all taxes due pursuant to
said returns or pursuant to any assessment received by the Borrower or any of
its Subsidiaries, except such taxes, if any, as are being contested in good
faith and as to which adequate reserves have been provided in accordance with
GAAP and as to which no Lien exists, except for failures to file or pay which
could not be reasonably expected to have a Material Adverse Effect. The United
States federal income tax returns of (or which include) the Borrower and its
Subsidiaries have been audited by the Internal Revenue Service through the
Fiscal Year ended 1997. No tax liens (other than those, if any, which are
Permitted Liens) have been filed and no claims are being asserted with respect
to any such taxes. The charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of any taxes or other governmental
charges are adequate.
5.7 Litigation and Contingent Obligations. Except as set forth as of
the date of this Agreement on Schedule 5.7 hereto, there is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the best knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could be reasonably expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
the Loans or Advances. Other than any liability incidental to such litigation,
arbitration or proceedings, neither the Borrower nor any Subsidiary has any
material contingent obligations not provided for or disclosed in the financial
statements referred to in Section 5.4.
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5.8 Subsidiaries. Except as otherwise disclosed to the Lender in
writing on or prior to the date hereof, Schedule 5.8 hereto contains an accurate
list of all Subsidiaries of the Borrower as of the date of this Agreement,
setting forth their respective jurisdictions of formation or incorporation and
the percentage of their respective equity interests owned by the Borrower or
other Subsidiaries. Such Subsidiaries do not own any Collateral or if any
Collateral is owned, have delivered to the Lender a Security Agreement and UCC
financing statements required by the Lender. All of the issued and outstanding
equity interests of such Subsidiaries have been duly authorized and issued and
those equity interests which are owned by the Borrower or one or more of its
Subsidiaries are fully paid and non-assessable.
5.9 ERISA. The projected benefit obligations at the end of 2002 in
excess of the fair value of plan assets at the end of 2002 (computed in
accordance with GAAP) of all Single Employer Plans did not exceed $20,300,000.
Neither the Borrower nor any other member of the Controlled Group has incurred,
or is reasonably expected to incur, any withdrawal liability to Multiemployer
Plans in excess of $100,000 in the aggregate. Except as set forth as of the date
of this Agreement on Schedule 5.9 hereto, each Benefit Plan complies in all
material respects with all applicable requirements of law and regulations, no
Reportable Event has occurred with respect to any Plan, neither the Borrower nor
any other members of the Controlled Group since 1999 has withdrawn from any
Plan, except as set forth as of the date of this Agreement on Schedule 5.9
hereto, or initiated steps to do so, and no steps have been taken to reorganize
or terminate any Plan. Each Benefit Plan is in substantial compliance with ERISA
and the Code and the Borrower has not received any notice from the government or
any agency or department thereof asserting that any Benefit Plan is not in
material compliance with either ERISA or the Code.
5.10 Accuracy of Information. The information, exhibits and reports
furnished by the Borrower or any of its Subsidiaries to the Lender in connection
with the negotiation of, or compliance with, the Loan Documents as of the date
thereof (and together with all other information, exhibits and reports then or
previously delivered), taken as a whole did not contain any material
misstatement of fact or omit to state a material fact or any fact necessary to
make the statements therein not misleading, provided that this Section 5.10
shall not apply to any plan, forecast, projection or pro forma financial
information contained in such materials that is based upon good faith estimates
and assumptions believed by the Borrower or such Subsidiary to be reasonable at
the time made.
5.11 Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and each of its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12 Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any agreement to which it is a party, except such
default which could not reasonably be expected to have a Material Adverse
Effect.
5.13 Compliance With Laws. The Borrower and each of its Subsidiaries
have complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic
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or foreign government or any instrumentality or agency thereof, having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material Adverse
Effect.
5.14 Ownership of Properties. Except as set forth on Schedule 5.14
hereto and except for sales of inventory and other assets made in the ordinary
course of business since December 31, 2002, on the date of this Agreement, the
Borrower and its Subsidiaries will have good title, free of all Liens (other
than those permitted by Section 6.16), to all of the Property and assets
reflected as owned by it in the Borrower's December 31, 2002 consolidated
balance sheet heretofore delivered to the Lender.
5.15 Environmental Matters. Except as set forth as of the date of this
Agreement on Schedule 5.15 hereto, in the ordinary course of its business, the
officers of the Borrower consider the effect of Environmental Laws on the
business of the Borrower and its Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing to the Borrower
due to Environmental Laws. On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any Subsidiary has any reason
to believe that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.16 Investment Company Act. Neither the Borrower nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
5.17 Public Utility Holding Company Act. Neither the Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.18 Intentionally Omitted.
5.19 Intellectual Property. The Borrower owns, is licensed under, or
otherwise has the rights to, all patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the conduct of its
business as currently conducted (collectively, "Intellectual Property"), except
where the failure to own, be licensed under or otherwise have the rights to any
such Intellectual Property could not reasonably be expected to have a Material
Adverse Effect. All such patents, federally-registered trademarks and registered
copyrights included in the Intellectual Property are properly registered, filed
or issued in the appropriate office and jurisdictions for such registrations,
filing or issuances. No material claim has been asserted by any Person with
respect to the use of any Intellectual Property, or challenging or questioning
the validity or effectiveness of any Intellectual Property, and to the knowledge
of the Borrower, the use of such Intellectual Property by the Borrower does not
infringe on the rights of any Person.
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5.20 Labor. There are no strikes, work stoppages, unfair labor charges,
equal employment opportunity proceedings, wage payment or material unemployment
compensation proceedings, material workmen's compensation proceedings or other
material labor or employee related controversies, pending or, to the Borrower's
knowledge, threatened involving Borrower and any of its employees, except for
any of the foregoing which would not in the aggregate have a Material Adverse
Effect.
5.21 Solvency. After giving effect to the consummation of the
transactions contemplated by this Agreement, the Borrower has capital sufficient
to carry on its business and transactions and all businesses and transactions in
which it is about to engage and is solvent and able to pay its debts as they
mature and the Borrower owns property the fair saleable value of which is
greater than the amount required to pay the Borrower's Indebtedness. No transfer
of property is being made and no Indebtedness is being incurred in connection
with the transactions contemplated by this Agreement with the intent to hinder,
delay or defraud either present or future creditors of the Borrower or any
Affiliate.
5.22 Post-Retirement Benefits. The present value of the expected cost
to the Borrower and its Subsidiaries of post-retirement medical and insurance
benefits provided by the Borrower and its Subsidiaries to its employees and
former employees, as estimated by the Borrower in accordance with procedures and
assumptions deemed reasonable by the Lender, does not exceed $250,000.
5.23 Insurance. In addition to insurance requirements set forth in the
Security Agreement, the Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss or
damage of the kinds customarily insured against by Persons engaged in the same
or similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons; including workers'
compensation insurance, public liability and property and casualty insurance
which amount shall not be reduced by the Borrower in the absence of 10 days'
prior notice to the Lender other than in the ordinary course of business. All
such insurance shall name the Lender as loss payee/mortgagee and as additional
insured. All casualty and key man insurance maintained by the Borrower (except
for the life insurance policy for Xxx Xxxxxxx) shall name the Lender as loss
payee and all liability insurance shall name the Lender as additional insured.
Upon request of the Lender, the Borrower shall furnish the Lender, at reasonable
intervals (but not more than once per calendar year) a certificate of a
Responsible Officer of the Borrower (and, if requested by the Lender, any
insurance broker of the Borrower) setting forth the nature and extent of all
insurance maintained by the Borrower and its Subsidiaries in accordance with
this Section or the Security Agreement (and which, in the case of a certificate
of a broker, were placed through such broker).
5.24 Insurance Certificate. The certificate delivered at Closing signed
by the President or Chief Financial Officer of the Borrower, that attests to the
existence and adequacy of, and summarizes, the property and casualty insurance
program carried by the Borrower with respect to itself and its Subsidiaries and
that has been furnished by the Borrower to the Lender is complete and accurate.
This summary includes the insurer's or insurers' name(s), policy number(s),
expiration date(s), amount(s) of coverage, type(s) of coverage, exclusion(s),
and
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deductibles. This summary also includes similar information, and describes any
reserves, relating to any self-insurance program that is in effect.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Lender shall otherwise
consent in writing:
6.1 Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with GAAP, and furnish to the Lender:
(i) Within 90 days after the close of each of its Fiscal
Years, an unqualified (except for qualifications relating to changes in
generally accepted accounting principles or practices reflecting
changes in generally accepted accounting principles) audit report
certified by KPMG, or by other independent certified public accountants
reasonably acceptable to the Lender, prepared in accordance with GAAP
on a consolidated basis for itself and its Subsidiaries, including
balance sheets as of the end of such period, related profit and loss
and reconciliation of surplus statements, and a statement of cash
flows, and accompanied by a certificate of said accountants that, in
the course of their examination necessary for their certification of
the foregoing, they have obtained no knowledge of any Default or
Unmatured Default, or if, in the opinion of such accountants, any
Default or Unmatured Default shall exist, stating the nature and status
thereof;
(ii) Within 30 days after the end of each month of each of its
Fiscal Years, for itself and its Subsidiaries, consolidated and
consolidating unaudited balance sheets as at the close of such month
most recently ended and consolidated and consolidating profit and loss
and reconciliation of surplus statements, and within 30 days after the
end of each fiscal quarter of its Fiscal Years, for itself and its
Subsidiaries, a statement of cash flows for the period from the
beginning of such Fiscal Year to the end of such month, all prepared in
accordance with GAAP and certified by the chief financial officer of
the Borrower;
(iii) Together with the financial statements required under
Sections 6.1(i) and (ii), submitted at the end of each of the
Borrower's fiscal quarters, a Compliance Certificate.
(iv) Schedules of Accounts, Inventory and Payables. On or
before the fifteenth day of each calendar month a Schedule of Accounts,
a Schedule of Inventory and a Schedule of Payables as at the last day
of the immediately preceding calendar month, each showing an aging of
Accounts, Inventory and accounts payable respectively and otherwise in
form and substance satisfactory to the Lender.
(v) Borrowing Base Certificate. Not less frequently than
monthly (and more frequently in the Lender's reasonable discretion) a
Borrowing Base Certificate in the
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form of Exhibit H hereto listing all Accounts generated by the Borrower
during the immediately prior month. Unless the Lender provides
notification otherwise, such Borrowing Base Certificate shall be
delivered to Lender on the fifteenth day of every calendar month.
(vi) Forthwith upon the Borrower's having knowledge, the
occurrence of a Default or Unmatured Default written notice describing
in detail such event.
(vii) Forthwith upon the Borrower's having knowledge of the
institution of, or any adverse determination in any litigation,
arbitration proceeding or court proceeding in which any injunctive
relief is sought or in which money damages in excess of $500,000 in the
aggregate are sought, written notice describing such matter and the
Borrower's intended response.
(viii) As soon as possible and in any event within 10 days
after the Borrower knows that any Reportable Event has occurred with
respect to any Benefit Plan, a statement, signed by the chief financial
officer of the Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with respect thereto.
(ix) As soon as possible and in any event within 10 days after
the Borrower or any Controlled Group member withdraws from a
Multiemployer Plan and the liability from such withdrawal could
reasonably be expected to exceed $100,000.
(x) As soon as possible and in any event within 10 days after
the Borrower terminates a Single Employer Plan under Section 4041 of
ERISA or the Borrower knows that any Controlled Group Member has
terminated a Single Employer Plan that could result in the imposition
of a Lien on the property of Alleghany, the Borrower or any Subsidiary.
(xi) As soon as possible and in any event within 10 days after
receipt by the Borrower of a written notice from the government or any
agency or department thereof that any Benefit Plan of the Borrower has
violated the provisions of ERISA or the Code, which violation could
result in liability to the Borrower in excess of $100,000.
(xii) As soon as possible and in any event within 10 days
after receipt by the Borrower, a copy of (a) any notice or claim to the
effect that the Borrower or any of its Subsidiaries is or may be liable
to any Person as a result of the release by the Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by the Borrower or any of its Subsidiaries,
which, in either case, could reasonably be expected to have a Material
Adverse Effect.
(xiii) Within thirty days following delivery to the Borrower,
a copy of each of the Borrower's auditor's management letters, if
prepared.
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(xiv) Promptly, copies of all financial statements and reports
that the Borrower sends to its members.
(xv) Such other information (including non-financial
information) as the Lender may from time to time reasonably request.
6.2 Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Revolving Advances and the Facility Letters of
Credit for working capital and for general corporate purposes. The Borrower will
not, nor will it permit any Subsidiary to, use any of the proceeds of the
Advances or the Facility Letters of Credit to purchase or carry any "margin
stock" (as defined in Regulation U).
6.3 Notice of Adverse Development.. Promptly upon becoming aware of any
development, financial or otherwise, which could reasonably be expected to have
a Material Adverse Effect the Borrower will provide prompt written notice to the
Lender of the occurrence of such development.
6.4 Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in substantially the same
manner and in substantially the same fields of enterprise as it is presently
conducted and to do all things necessary to remain duly incorporated, validly
existing and in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted unless failure to maintain
such authority could not reasonably be expected to have a Material Adverse
Effect.
6.5 Taxes. The Borrower will, and will cause each Subsidiary to, timely
file (or join in the filing of) complete and correct United States federal and
applicable foreign, state and local tax returns required by law and pay when due
all taxes, assessments and governmental charges and levies upon it or its
income, profits or Property, except those which are being contested in good
faith by appropriate proceedings and with respect to which adequate reserves
have been set aside in accordance with GAAP, and except to the extent that the
failure to file any return or the nonpayment of any tax could not reasonably be
expected to have a Material Adverse Effect.
6.6 Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance on
all their Property in such amounts and covering such risks as is consistent with
sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, except to the extent that
noncompliance could not reasonably be expected to have a Material Adverse
Effect.
6.8 Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and keep
its Property in good repair, working order and condition, and make all necessary
and proper repairs, renewals and replacements so that its business carried on in
connection therewith may be properly conducted
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at all times, except to the extent that failure to maintain such Property or
make such repair could not reasonably be expected to have a Material Adverse
Effect.
6.9 Inspection. The Borrower will, and will cause each Subsidiary to,
permit the Lender, by its respective representatives and agents, to inspect any
of the Property, corporate books and financial records of the Borrower and each
Subsidiary, to examine and make copies of the books of accounts and other
financial records of the Borrower and each Subsidiary, and to discuss the
affairs, finances and accounts of the Borrower and each Subsidiary with, and to
be advised as to the same by, their respective officers at such reasonable times
and intervals as the Lender may designate, provided that so long as no Unmatured
Default or Default has occurred field audits shall not be conducted more than
one time each calendar year. The Borrower shall upon demand reimburse the Lender
for the reasonable cost of each field audit.
6.10 Financial Covenants. The financial covenants referred to in this
Section 6.10 shall each be computed at the end of each fiscal quarter (unless
stated otherwise) by the Borrower, and such calculations shall be included in
the Compliance Certificate referred to in Section 6.1(iii).
6.10.1 Tangible Net Worth. The Borrower will maintain, at all
times, Tangible Net Worth not less than (i) thirty five million dollars
($35,000,000) during calendar year 2003, and (ii) after calendar year 2003,
thirty five million dollars ($35,000,000) plus fifty percent of the positive Net
Income for calendar year 2003 and each calendar year thereafter (without
reduction for any net losses).
6.10.2 Liabilities to Tangible Net Worth. The Borrower will
maintain a ratio of (i) Total Liabilities minus Subordinated Debt to (ii)
Tangible Net Worth, at all times, of not greater than 1.50 to 1.00.
6.11 Availability Under The Borrowing Base. The Borrower will maintain,
at all times, Availability of no less than two million five hundred thousand
dollars ($2,500,000).
6.12 Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) Advances and Facility Letter of Credit Obligations
hereunder;
(ii) Indebtedness is described in Schedule 6.12 hereto;
(iii) Subordinated Debt;
(iv) Indebtedness incurred to refinance existing Indebtedness
permitted pursuant to this Section 6.12; provided, however, that the
maturity date of such new Indebtedness is no earlier than the maturity
date of the Indebtedness being refinanced and the terms of such new
Indebtedness (including, but not limited to, the amount, the term, the
amount of the annual loan payment or provision for collateral or
additional collateral) are no more disadvantageous to the Lender, the
Borrower and its Subsidiaries than the terms of the Indebtedness being
refinanced;
(v) The Alleghany Debt; and
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(vi) Contingent Obligations not exceeding $250,000 at any one
time outstanding.
6.13 Merger. The Borrower will not, nor will it permit any Subsidiary
to, merge or consolidate with or into any other Person, except that a Subsidiary
may amalgamate, merge or consolidate with or into the Borrower or a Wholly-Owned
Subsidiary.
6.14 Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of Property, to any other
Person, except:
(i) Sales of inventory in the ordinary course of business;
(ii) The Atlas Sale; and
(iii) Leases, sales or other dispositions of Property that
together with all other Property of the Borrower and its Subsidiaries
previously leased, sold or disposed of (other than inventory in the
ordinary course of business) as permitted by this Section during the
twelve-month period ending with the month in which any such lease, sale
or other disposition occurs, do not constitute a Substantial Portion of
the Property of the Borrower and its Subsidiaries.
6.15 Investments and Acquisitions. The Borrower will not, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to become or remain a partner in any
partnership or joint venture, or member in a limited liability company, or to
make any Acquisition of any Person, except:
(i) Short-term obligations of, or fully guaranteed by, the
United States of America.
(ii) Commercial paper rated A-1 or better by Standard and
Poor's Corporation or P-1 or better by Xxxxx'x Investors Service, Inc.
(iii) Demand deposit accounts maintained in the ordinary
course of business.
(iv) Certificates of deposit issued by and time deposits with
commercial banks (whether domestic or foreign) having capital and
surplus in excess of $100,000,000.
(v) Investments not to exceed $5 million in the aggregate at
any one time outstanding in the common stock and investment grade bonds
of publicly held corporations which stock and bonds are traded on the
New York, American or NASDAQ stock exchanges.
(vi) Loans to employees of the Borrower or of any of its
Subsidiaries which do not exceed, in the aggregate for all such
employees at any one time outstanding, $150,000, provided that no such
loans shall be advanced when there exists an Unmatured Default or
Default.
(vii) Existing Investments which are described in Schedule
6.15 (vii) hereto.
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6.16 Liens. The Borrower will not, nor will it permit any Subsidiary to
create, incur, or suffer to exist any Lien in, of or on the Property of the
Borrower or any of its Subsidiaries, except the following ("Permitted Liens"):
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with GAAP shall have been set aside on its
books.
(ii) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations which are either
(x) not more than 60 days past due or (y) are being contested in good
faith by appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(iv) Liens arising from a judgment rendered or claim filed,
not in excess, singly or in the aggregate, of $250,000 against the
Borrower or any of its Subsidiaries which the Borrower or such
Subsidiary shall be contesting diligently in good faith by proper legal
proceedings.
(v) Liens which exist on the date hereof incurred by Borrower
or its Subsidiaries in the ordinary course of business securing
Indebtedness less than $100,000 in the aggregate.
(vi) Easements, building restrictions and such other
encumbrances or charges against real property which do not in any
material way interfere with the use thereof by the Borrower.
(vii) Any extension, renewal or substitution of or for any of
the foregoing Liens described in this Section 6.16, provided in each
case that (a) the Indebtedness or other obligation or liability secured
by the applicable Lien shall not exceed the Indebtedness or other
obligation or liability existing immediately prior to such extension,
renewal or substitution and (b) the Lien securing such Indebtedness or
other obligation or liability shall be limited to the Property which,
immediately prior to such extension, renewal or substitution, secured
such Indebtedness or other obligation or liability, and improvements on
or additions to such Property.
6.17 Prohibition of Negative Pledge. The Borrower will not, nor will it
permit any of its Subsidiaries to agree, covenant, warrant, represent, pledge or
otherwise commit with or to any entity other than the Agent, to not incur,
create, assume or permit to exist, any mortgage, pledge, lien charge or other
encumbrance of any nature whatsoever on all or any of its assets now or
hereafter owned.
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6.18 Affiliates. The Borrower will not, nor will it permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Borrower or
such Subsidiary than the Borrower or such Subsidiary would obtain in a
comparable arms-length transaction.
6.19 Amendments to Agreements. The Borrower will not, nor will it
permit any Subsidiary to, amend any term or provision of any Subordinated Debt
except with the consent of the Lender. The Borrower shall deliver to the Lender
all amendments to the Subordinated Debt within five (5) days of the date of such
amendment.
6.20 Sale of Accounts. The Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or Accounts,
with or without recourse, except for (i) sales of Accounts in connection with
the Atlas Sale and (ii) sales of Accounts which are past due to a collection
agent for collection at a commission not exceeding twenty percent (20%) of the
amount of such notes or Accounts recovered.
6.21 Fiscal Year. The Borrower will not, nor will it permit any
Subsidiary to, change its Fiscal Year.
6.22 Limitation on the Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire any
Subsidiary, unless such Subsidiary delivers to the Lender a Security Agreement
along with all other documentation required by the Lender to perfect a first
priority security interest in all Collateral owned or to be owned by such
Subsidiary.
6.23 Subsidiary Dividends. The Borrower's Subsidiaries shall not in any
manner either directly or indirectly incur or be bound by any restrictions on
dividends from such Subsidiaries to the Borrower, other than those restrictions
required by applicable law.
6.24 Repayment of Subordinated Debt. The Borrower and its Subsidiaries
(i) will not pay any principal amounts on any Subordinated Debt and (ii) will
not pay interest on any such Subordinated Debt in an amount exceeding the amount
of interest permitted to be paid thereon by the applicable subordination
agreement.
6.25 Delivery of Agreements. Within ninety (90) days following the
Closing Date the Borrower shall deliver to Lender all of the agreements required
to be delivered under Section 7 (xix) of the Security Agreement.
6.26 Initial Field Audit. The Borrower shall cooperate with Lender to
facilitate and complete a field audit of Borrower's assets conducted by the
Lender within sixty (60) days after the Closing Date and Borrower shall pay
Lender the cost of such audit.
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ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1 Any representation or warranty made (or deemed made pursuant to
Article IV) by or on behalf of the Borrower or any of its Subsidiaries to the
Lender, under or in connection with this Agreement, any Loan, any Facility
Letter of Credit or any certificate or information delivered in connection with
this Agreement or any other Loan Document shall be false in any material respect
on the date as of which made (or deemed made).
7.2 Nonpayment of principal of any Note or of any Reimbursement
Obligation when due (or in the case of any Reimbursement Obligation due pursuant
to Section 2.3.5(a)(ii)(B), upon demand), or nonpayment of interest upon any
Note or of any facility fee, Issuance Fee or other obligations (other than
Reimbursement Obligations which have been converted into Advances pursuant to
Section 2.3.5(a)(ii)(A)) under any of the Loan Documents within three (3) days
after the same becomes due.
7.3 The breach by the Borrower of any of the terms or provisions of
Sections 6.2, 6.3, 6.6, 6.10, 6.12, 6.13, 6.14, 6.15, 6.16, 6.17, 6.19, 6.20,
6.23, 6.24 and 6.25.
7.4 The breach by the Borrower (other than a breach which constitutes a
Default under Section 7.1, 7.2 or 7.3) of any of the terms or provisions of this
Agreement which is not remedied within fifteen (15) days after written notice
from the Lender.
7.5 Failure of the Borrower or any of its Subsidiaries to pay when due
any Indebtedness to the Lender or any other Indebtedness in excess of, singly or
in the aggregate, $250,000 (any such Indebtedness being herein defined as
"Material Indebtedness"); or the default by the Borrower or any of its
Subsidiaries in the performance of any term, provision or condition contained in
any agreement under which any such Material Indebtedness was created or is
governed, or any other event shall occur or condition exist, the effect of which
is to cause, or to permit the holder or holders of such Material Indebtedness to
cause, such Material Indebtedness to become due prior to its stated maturity; or
any Material Indebtedness of the Borrower or any of its Subsidiaries shall be
declared to be due and payable or required to be prepaid or repurchased (other
than by a regularly scheduled payment) prior to the stated maturity thereof; or
the Borrower or any of its Subsidiaries shall not pay, or admit in writing its
inability to pay, its debts generally as they become due.
7.6 The Borrower or any of its Subsidiaries shall (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws or the laws
of any other jurisdiction relating to bankruptcy, insolvency, reorganization or
relief of debtors as now or hereafter in effect, (ii) make an assignment for the
benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or similar
official for it or any Substantial Portion of its Property, (iv) institute any
proceeding seeking an order for relief under the Federal bankruptcy laws or the
laws of any other jurisdiction relating to bankruptcy, insolvency,
reorganization or relief of debtors as now or hereafter in effect or seeking to
adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation,
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reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, (v) take any corporate
action to authorize or effect any of the foregoing actions set forth in this
Section 7.6 or (vi) fail to contest in good faith any appointment or proceeding
described in Section 7.7.
7.7 Without the application, approval or consent of the Borrower or any
of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for the Borrower or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against the Borrower or any of its Subsidiaries and
such appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of 60 consecutive days.
7.8 Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of the Borrower and its Subsidiaries which,
when taken together with all other Property of the Borrower and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion.
7.9 The Borrower or any of its Subsidiaries fail to pay, bond or
otherwise discharge within thirty (30) days any judgment or order for the
payment of money in excess of, singly or in the aggregate, $500,000, which is
not stayed on appeal or otherwise being appropriately contested in good faith
and as to which no enforcement actions have been commenced.
7.10 Any Reportable Event shall occur in connection with any Benefit
Plan which could result in liability to Borrower in excess of $100,000 or a
Control Group Member has terminated a Single Employer Plan that could result in
the imposition of a Lien on the property of Alleghany, the Borrower or any
Subsidiary in excess of $500,000.
7.11 The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $500,000.
7.12 The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $100,000.
7.13 The Borrower or any Subsidiary shall terminate a Benefit Plan
resulting in Unfunded Liabilities to the Borrower in excess of $100,000.
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7.14 The Borrower or any Subsidiary shall incur liability for a
violation of ERISA or the Code with respect to any Benefit Plan which exceeds
$100,000.
7.15 The Borrower or any of its Subsidiaries shall be the subject of
any proceeding pertaining to the release by the Borrower or any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or substance
into the environment, or any violation of any federal, state or local
environmental, health or safety law or regulation, which, in either case, could
reasonably be expected to have a Material Adverse Effect.
7.16 Any Change in Control shall occur, except such Change in Control
consented to by the Lender.
7.17 Nonpayment by the Borrower or any of its Subsidiaries of any Rate
Hedging Obligation when due or the default or breach by the Borrower or any of
its Subsidiaries of any term, provision or condition contained in any Rate
Hedging Agreement, which default or breach continues (without being waived)
beyond any period of grace therein provided.
7.18 The occurrence of any "default", as defined in any Loan Document
(other than this Agreement or the Notes) or the breach of any of the terms or
provisions of any Loan Document (other than this Agreement), which default or
breach continues beyond any period of grace therein provided and has not been
waived.
7.19 The subordination provisions of any agreement or instrument
governing any Subordinated Debt is for any reason revoked or invalidated, or
otherwise cease to be in full force and effect, any Person contests in any
manner the validity or enforceability thereof or denies that it has any further
liability or obligation thereunder, or the Indebtedness hereunder is for any
reason subordinated or does not have the priority contemplated by this Agreement
or such subordination provisions.
7.20 Enforceability of Loan Documents. Either:
(i) any material provision of any Loan Document shall for any reason
cease to be valid and binding on or enforceable against the Borrower or any
Subsidiary party thereto, the Borrower or any Subsidiary shall so state in
writing or bring an action to limit its obligations or liabilities thereunder;
or
(ii) any Loan Document shall for any reason (other than pursuant to the
terms thereof) cease to create a valid security interest in the collateral
purported to be covered thereby or such security interest shall for any reason
cease to be a perfected and first priority security interest subject only to
Permitted Liens.
ARTICLE VIII
ACCELERATION AND REMEDIES
8.1 Acceleration. If any Default described in Section 7.6 or 7.7 occurs
with respect to the Borrower, the obligations of the Lender to make Loans and to
issue Facility Letters of Credit hereunder, shall automatically terminate and
the Obligations shall immediately become due and
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payable without any election or action on the part of the Lender. If any other
Default occurs, the Lender (i) may terminate or suspend its obligations to make
Loans and to issue Facility Letters of Credit hereunder, and/or (ii) declare the
Obligations to be due and payable, whereupon the Obligations shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which the Borrower hereby expressly waives.
8.2 Preservation of Rights. No delay or omission of the Lender, to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or issuance of a Facility Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lender, and then only to the extent in such writing specifically
set forth. All remedies contained in the Loan Documents or by law afforded shall
be cumulative and all shall be available to the Lender until the Obligations
have been paid in full.
8.3 Amendments. Subject to the provisions of this Article VIII, the
Lender and the Borrower may enter into a written agreement executed by both
Lender and Borrower supplemental hereto or to any other Loan Documents for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lender or the Borrower hereunder or thereunder
or waiving any Default hereunder or thereunder.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Note and
the making of the Loans and the issuance of the Facility Letters of Credit
herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, the Lender shall not be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3 Taxes. Any taxes (excluding Excluded Taxes) or other similar
assessments or charges made by any governmental or revenue authority in respect
of the Loan Documents shall be paid by the Borrower, together with interest and
penalties, if any.
9.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.5 Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, and the Lender and supersede all prior
agreements and understandings among the Borrower, and the Lender relating to the
subject matter thereof.
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9.6 Benefits of this Agreement. This Agreement shall not be construed
so as to confer any right or benefit upon any Person other than the parties to
this Agreement and their respective successors and assigns.
9.7 Expenses; Indemnification. The Borrower shall reimburse the Lender
for any costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' fees and time charges of attorneys for the Lender, which attorneys
may be employees of the Lender) paid or incurred by the Lender in connection
with the preparation, negotiation, execution, delivery, review, amendment,
modification, and administration of the Loan Documents. The Borrower also agrees
to reimburse the Lender for any costs, internal charges and out-of-pocket
expenses (including reasonable attorneys' fees and time charges of attorneys for
the Lender which attorneys may be employees of the Lender) paid or incurred by
the Lender in connection with the collection and enforcement of the Loan
Documents. The Borrower further agrees to indemnify the Lender and its
respective directors, officers and employees against all losses, claims,
damages, penalties, judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
the Lender is a party thereto) which any of them may pay or incur arising out of
or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or thereby or the direct or indirect application or proposed
application of the proceeds of any Loan or the direct or indirect use or
intended use of any Facility Letter of Credit hereunder except to the extent
that they have resulted from the gross negligence or willful misconduct of the
party seeking indemnification. The obligations of the Borrower under this
Section shall survive the termination of this Agreement.
9.8 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP, except that any
calculation or determination which is to be made on a consolidated basis shall
be made for the Borrower and all its Subsidiaries, including those Subsidiaries,
if any, which are unconsolidated on the Borrower's audited financial statements.
9.9 Severability of Provisions. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
9.10 Nonliability of Lender. The relationship between the Borrower and
the Lender shall be solely that of borrower and lender. The Lender shall not
have any fiduciary responsibilities to the Borrower. The Lender undertakes no
responsibility to the Borrower to review or inform the Borrower of any matter in
connection with any phase of the Borrower's business or operations. The Borrower
agrees that the Lender shall have no liability to the Borrower (whether sounding
in tort, contract or otherwise) for losses suffered by the Borrower in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined by
a court of competent jurisdiction in a final and non-appealable order that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought.
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9.11 Confidentiality. The Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates to the extent that such
Affiliate agrees to be bound by this obligation of confidentiality, (ii) to
legal counsel, accountants, and other professional advisors to the Lender that
agree to be bound by this obligation of confidentiality, (iii) upon the request
or demand of any bank regulatory agency having jurisdiction over the Lender,
(iv) to any Person as required by law, regulation, or legal process after notice
to the Borrower (to the extent such notice is permitted by law), and (v)
permitted by Section 11.3.
9.12 Nonreliance. The Lender hereby represents that it is not relying
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Loans provided
for herein.
ARTICLE X
SETOFF; RATABLE PAYMENTS
10.1 Setoff. In addition to, and without limitation of, any rights of
the Lender under applicable law, if the Borrower becomes insolvent, however
evidenced or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by the Lender to
or for the credit or account of the Borrower may be offset and applied toward
the payment of the Obligations owing to the Lender, whether or not the
Obligations, or any part hereof, shall then be due.
ARTICLE XI
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATION
11.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower, and
the Lender and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents; and (ii) any assignment by the Lender must be made in compliance
with Section 11.3. The Lender may at any time, without the consent of the
Borrower, assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank; provided, however, that no such assignment to a
Federal Reserve Bank shall release the Lender from its obligations hereunder.
11.2 Participation.
11.2.1 Permitted Participants; Effect. The Lender may, subject to
the provisions of this Section 11.2.1, in the ordinary course of its business
and in accordance with applicable law, at any time sell to one or more banks or
other entities ("Participants") participating interests in any Loan owing to the
Lender, any Note held by the Lender, any Facility Letter of Credit issued by the
Lender, any Commitment of the Lender or any other interest of the Lender under
the Loan Documents, provided that such Participants are consented to in advance
by the
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Borrower, such consent not to be unreasonably withheld or delayed. In the event
of any such sale by the Lender of participating interests to a Participant, such
Participant shall have no direct rights hereunder, the Lender's obligations
under the Loan Documents shall remain unchanged, the Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
the Lender shall remain the holder of any such Note for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement shall
be determined as if the Lender had not sold such participating interests, and
the Borrower shall continue to deal solely and directly with the Lender in
connection with the Lender's rights and obligations under the Loan Documents.
11.3 Assignments.
11.3.1 Permitted Assignments. The Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time assign
to one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit G hereto or in such other form as may be
agreed to by the parties thereto. The consent of the Borrower which shall not be
unreasonably withheld or delayed, shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not an Affiliate of
Lender; provided, however, that if a Default has occurred and is continuing, the
consent of the Borrower shall not be required. Each such assignment shall be in
an amount not less than $5 million.
11.4 Voting Rights. The Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan, Facility Letter of Credit or Commitment in
which such Participant has an interest which forgives principal, interest or
fees or reduces the interest rate or fees payable with respect to any such Loan,
Facility Letter of Credit or Commitment, postpones any date fixed for any
regularly-scheduled payment of principal of, or interest or fees on, any such
Loan, Facility Letter of Credit or Commitment, releases any guarantor of any
such Loan or releases any substantial portion of collateral, if any, securing
such Loan or Facility Letter of Credit.
11.5 Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor the Lender shall
cause such Transferee, concurrently with the effectiveness of such transfer, to
comply with the provisions of Section 11.6.
11.6 Withholding Tax Exemption. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of the Lender, the Lender, if it is not incorporated under the laws of the
United States of America, or a state thereof, agrees that it will deliver to the
Borrower (i) two duly completed copies of United States Internal Revenue Service
Form X-0, X-0 XXX, xx X-0XXX or successor form), certifying in either case that
the Lender is entitled to receive payments under this Agreement and the Note
without deduction or withholding of any United States federal income taxes, and
(ii) a United States Internal Revenue Form W-8 or W-9, as the case may be, and
certify that it is entitled to an exemption from United States backup
withholding tax. If the Lender so delivers a Form X-0, X-0 XXX, xx X-0XXX (or
successor form) it shall further undertake to deliver to the Borrower two
additional copies of such form (or successor form) on or before the date that
such form expires or becomes obsolete
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or after the occurrence of any event requiring a change in the most recent forms
so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by the Borrower, in each case certifying
that the Lender is entitled to receive payments under this Agreement and the
Note without deduction or withholding of any United States federal income taxes,
unless an event (including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent the Lender from duly completing and delivering any such form with
respect to it and the Lender advises the Borrower that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax.
ARTICLE XII
NOTICES
12.1 Notices. Except as otherwise permitted by Section 2.4.10 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower, at its address, facsimile number or telex number set forth
on the signature pages hereof, (y) in the case of the Lender, at its address,
facsimile number or telex number set forth on Schedule 2 hereto or (z) in the
case of any party, such other address, facsimile number or telex number as such
party may hereafter specify for the purpose by notice to the Lender and the
Borrower. Each such notice, request or other communication shall be effective
(i) if given by telex, when such telex is transmitted to the telex number
specified in this Section and the appropriate answerback is received, (ii) if
given by facsimile transmission, when transmitted to the facsimile number
specified in this Section and confirmation of receipt is received, (iii) if
given by mail, three (3) Business Days after such communication is deposited in
the mails with first class postage prepaid, addressed as aforesaid or (iv) if
given by any other means, when delivered at the address specified in this
Section; provided that notices to the Lender under Article II shall not be
effective until received.
12.2 Change of Address. The Borrower and the Lender may each change the
address for service of notice upon it by a notice in writing to the other party
hereto.
ARTICLE XIII
COUNTERPARTS
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument. This Agreement shall be effective when
it has been executed by the Borrower and the Lender. A complete set of
counterparts executed by all the parties hereto shall be lodged with each of the
Borrower and the Lender.
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ARTICLE XIV
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL
14.1 Choice of Law. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
14.2 Consent to Jurisdiction. THE PARTIES HERETO HEREBY IRREVOCABLY
SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR
ILLINOIS STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE PARTIES HERETO HEREBY
IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVE ANY OBJECTION ANY
OF THEM MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE LENDER OR ANY AFFILIATE OF
THE LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT
OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A
COURT IN CHICAGO, ILLINOIS.
14.3 Waiver of Jury Trial. THE PARTIES HERETO HEREBY WAIVE TRIAL BY
JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
(WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Borrower and the Lender, have executed this
Agreement as of the date first above written.
BORROWER:
HEADS & THREADS INTERNATIONAL LLC, a
Delaware limited liability company
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Print Name: Xxxx X. Xxxxx
Title: VP Finance and CFO
Address: 000 Xxxxxxx Xxxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
LENDER:
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
----------------------------------
Print Name: Xxxxx X. Xxxxx
Title: First Vice President
Address: 000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, XX 00000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
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