EXHIBIT 10.35
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CREDIT AGREEMENT
BY AND AMONG
XX XXXX'X CORPORATION.
AS PARENT,
AND
EACH OF ITS SUBSIDIARIES THAT ARE SIGNATORIES HERETO
AS BORROWERS,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
XXXXX FARGO FOOTHILL, INC.
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF APRIL 5, 2007
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement"), is entered into as of April
5, 2007, by and among the lenders identified on the signature pages hereof (such
lenders, together with their respective successors and permitted assigns, are
referred to hereinafter each individually as a "Lender" and collectively as the
"Lenders"), and XXXXX FARGO FOOTHILL, INC., a California corporation, as the
arranger and administrative agent for the Lenders (in such capacity, together
with its successors and assigns in such capacity, "Agent"), and XX XXXX'X
CORPORATION, a Delaware corporation ("Parent"), and each of Parent's
Subsidiaries identified on the signature pages hereof (Parent and such
Subsidiaries are referred to hereinafter each individually as a "Borrower", and
individually and collectively, jointly and severally, as the "Borrowers").
RECITALS
WHEREAS, on February 17, 2007, Altra Holdings, Inc. ("Altra Holdings")
and its wholly owned subsidiary Forest Acquisition Corporation ("FAC"), entered
into an Agreement and Plan of Merger (the "Merger Agreement") with Parent,
pursuant to which FAC agreed to purchase shares of common stock of Parent for
$24.80 per share;
WHEREAS, in the Merger Agreement, FAC agreed to make a cash tender
offer of $24.80 per share for all outstanding shares of XX Xxxx'x common stock;
WHEREAS, FAC commenced the tender offer (the "Tender Offer") on March
5, 2007;
WHEREAS, FAC will acquire greater than 90% of the outstanding shares
of Parent's common stock in the Tender Offer, and FAC and Parent will, after the
execution of this Agreement, effect a statutory "short-form" merger pursuant to
which FAC will be merged with and into Parent (the "Merger") and Parent will
become a wholly-owned subsidiary of Altra Industrial Motion, Inc. ("Altra
Industrial"), which is a wholly owned subsidiary of Altra Holdings;
WHEREAS, Altra Industrial will issue $105,000,000 aggregate principal
amount of 9% Senior Secured Notes due 2011 (the "Additional Notes") under a
supplement (the "Indenture Supplement") to the Indenture dated as of November
30, 2004 (the "Indenture"), by and among Altra Industrial, the subsidiaries of
Altra Industrial party thereto and the Trustee, pursuant to which Altra
Industrial has previously issued $165,000,000 aggregate principal amount of
senior secured notes;
WHEREAS, Altra Holdings and Altra Industrial will fund the purchase
price of the acquisition of the common stock of Parent through the net proceeds
of the issuance of the Additional Notes, together with cash on hand and
borrowings under the Altra Senior Credit Agreement; and
WHEREAS, this Agreement is being entered into in connection with the
refinancing of the indebtedness incurred under that certain Loan and Security
Agreement dated as of January 7, 2005, by and among the Borrowers, XX Xxxx'x
Canada Ltd., Manufacturers and Traders Trust Company, as collateral agent and
funding agent, PNC Bank, National Association, as administrative agent, and the
lenders party thereto, as amended, restated or otherwise modified to date (the
"M&T Facility").
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. Capitalized terms used in this Agreement shall have the
meanings specified therefor on Schedule 1.1.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. In the event of any change in GAAP
that occurs after the date of this Agreement that would affect the calculation
or application of the financial or other covenants contained herein, Agent and
Borrowers agree to negotiate to amend such financial or other covenants (or the
definitions used therein) to eliminate the effect of such change and no Event of
Default shall be deemed to exist solely as a result of such change in GAAP
during the period prior to the effectiveness of such amendment; provided,. that
such financial or other covenants shall continue to be calculated in the manner
provided immediately prior to such change until such amendment has been executed
by Borrowers and the Required Lenders. When used herein, the term "financial
statements" shall include the notes and schedules thereto, if any. Whenever the
term "Borrowers" or the term "Parent" is used in respect of a financial covenant
or a related definition, it shall be understood to mean Borrowers and their
Subsidiaries or Parent and its Subsidiaries, as applicable, on a consolidated
basis unless the context clearly requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein, provided, however, that to the extent that the Code is used to define
any term herein and such term is defined differently in different Articles of
the Code, the definition of such term contained in Article 9 shall govern.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, and the terms
"includes" and "including" are not limiting. The words "hereof," "herein,"
"hereby," "hereunder," and similar terms in this Agreement or any other Loan
Document refer to this Agreement or such other Loan Document, as the case may
be, as a whole and not to any particular provision of this Agreement or such
other Loan Document, as the case may be. Section, subsection, clause, schedule,
and exhibit references herein are to this Agreement unless otherwise specified.
Any reference in this Agreement or in the other Loan Documents to any agreement,
instrument, or document shall include all alterations, amendments, changes,
extensions, modifications, renewals, replacements, substitutions, joinders, and
supplements, thereto and thereof, as applicable (subject to any restrictions on
such alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements set forth herein). Any
reference herein to the satisfaction, payment or repayment in full of the
Obligations shall mean the repayment in full in cash (or cash collateralization
or the provision of other security in accordance with the terms hereof) of all
Obligations other than contingent indemnification Obligations. Any reference
herein to any Person shall be construed to include such Person's successors and
assigns. Any requirement of a writing contained herein or in the other Loan
Documents shall be satisfied by the transmission of a Record.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 INTENTIONALLY OMITTED.
2.2 TERM LOANS
(a) TERM LOAN A. Subject to the terms and conditions of this
Agreement, on the Closing Date each Lender with a Commitment agrees (severally,
not jointly or jointly and severally) to make term loans (collectively, "Term
Loan A") to Borrowers in an amount equal to such Lender's Pro Rata Share of the
Term Loan A Amount. The principal of the Term Loan A shall be repaid in monthly
installments of $125,000, payable on the first day of each month (or, if such
first day is not a Business Day, the next succeeding Business Day) commencing on
May 1, 2007 through the date of determination as provided in the immediately
succeeding sentence. The outstanding unpaid principal balance and all accrued
and unpaid interest on the Term Loan A shall be due and payable on the earliest
of (i) the Maturity Date, (ii) the date of
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the acceleration of the Term Loan A in accordance with the terms hereof, and
(iii) the date of termination of this Agreement pursuant to Section 8.1(c). All
principal of, interest on, and other amounts payable in respect of the Term Loan
A shall constitute Obligations. Once any portion of the Term Loan A has been
paid or prepaid, it may not be reborrowed.
(b) TERM LOAN B. Subject to the terms and conditions of this
Agreement, on the Closing Date each Lender with a Commitment agrees (severally,
not jointly or jointly and severally) to make term loans (collectively, "Term
Loan B", and together with Term Loan A, the "Term Loans") to Borrowers in an
amount equal to such Lender's Pro Rata Share of the Term Loan B Amount. The
outstanding unpaid principal balance and all accrued and unpaid interest on the
Term Loan B shall be due and payable on the earliest of (i) the Maturity Date,
(ii) the date of the acceleration of the Term Loan B in accordance with the
terms hereof, and (iii) the date of termination of this Agreement pursuant to
Section 8.1(c). All principal of, interest on, and other amounts payable in
respect of the Term Loan B shall constitute Obligations. Once any portion of the
Term Loan B has been paid or prepaid, it may not be reborrowed.
2.3 BORROWING PROCEDURES. The Term Loans shall be made by an irrevocable
request by an Authorized Person delivered to Agent no later than 7:00 a.m.
(California time) on the Closing Date. Each Lender shall make the amount of such
Lender's Pro Rata Share of the Term Loans available to Agent in immediately
available funds, to Agent's Account, not later than 10:00 a.m. (California time)
on the Closing Date. After Agent's receipt of the proceeds of the Term Loans,
Agent shall make the proceeds thereof available to Administrative Borrower on
the Closing Date by transferring immediately available funds equal to such
proceeds received by Agent to the Designated Account; provided, however, that
Agent shall not request any Lender to make, and no Lender shall have the
obligation to make, the Term Loans if Agent shall have actual knowledge that one
or more of the applicable conditions precedent set forth in Section 3.1 will not
be satisfied on the Closing Date unless such condition has been waived.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWERS.
(i) Except as otherwise expressly provided herein, all payments
by Borrowers shall be made to Agent's Account for the account of the Lender
Group and shall be made in immediately available funds, no later than 11:00 a.m.
(California time) on the date specified herein. Any payment received by Agent
later than 11:00 a.m. (California time), shall be deemed to have been received
on the following Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.
(ii) Unless Agent receives notice from Administrative Borrower
prior to the date on which any payment is due to the Lenders that Borrowers will
not make such payment in full as and when required, Agent may assume that
Borrowers have made (or will make) such payment in full to Agent on such date in
immediately available funds and Agent may (but shall not be so required), in
reliance upon such assumption, distribute to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent Borrowers
do not make such payment in full to Agent on the date when due, each Lender
severally shall repay to Agent on demand such amount distributed to such Lender,
together with interest thereon at the Defaulting Lender Rate for each day from
the date such amount is distributed to such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION.
(i) Except as otherwise provided in the Loan Documents (including
agreements between Agent and individual Lenders), aggregate principal and
interest payments shall be apportioned ratably among the Lenders (according to
the unpaid principal balance of the Obligations to which such payments relate
held by each Lender) and payments of fees and expenses (other than fees or
expenses that are for Agent's separate account, after giving effect to any
agreements between Agent and individual Lenders) shall
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be apportioned ratably among the Lenders having a Pro Rata Share of the
Obligation to which a particular fee relates. Except as provided in Section
2.4(b)(iii), all payments shall be remitted to Agent and all such payments, and
all proceeds of Collateral received by Agent, shall be applied as follows:
(A) first, ratably to pay any Lender Group Expenses then due
to Agent or any of the Lenders under the Loan Documents until paid in full,
(B) second, ratably to pay any fees or premiums then due to
Agent (for its separate account, after giving effect to any agreements between
Agent and individual Lenders) or any of the Lenders under the Loan Documents
until paid in full,
(C) third, ratably to pay interest due in respect of the LC
Obligations and the Term Loans until paid in full,
(D) fourth, ratably to pay all principal amounts then due
and payable (other than as a result of an acceleration thereof) with respect to
the LC Obligations and the Term Loans until paid in full,
(E) fifth, if an Event of Default has occurred and is
continuing, ratably to pay the outstanding principal balance of the LC
Obligations and the Term Loans until paid in full,
(F) sixth, if an Event of Default has occurred and is
continuing, ratably to pay any other Obligations, and
(G) seventh, to Borrowers (to be wired to the Designated
Account) or such other Person entitled thereto under applicable law.
(ii) Agent promptly shall distribute to each Lender, pursuant to
the applicable wire instructions received from each Lender in writing, such
funds as it may be entitled to receive.
(iii) In each instance, so long as no Event of Default has
occurred and is continuing, this Section 2.4(b) shall not apply to any payment
made by Borrowers to Agent and specified by Borrowers to be for the payment of
specific Obligations then due and payable (or prepayable) under any provision of
this Agreement.
(iv) For purposes of the foregoing, "paid in full" means payment
of all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any Insolvency Proceeding),
default interest, interest on interest, and expense reimbursements, whether or
not any of the foregoing would be or is allowed or disallowed in whole or in
part in any Insolvency Proceeding.
(v) In the event of a direct conflict between the priority
provisions of this Section 2.4 and other provisions contained in any other Loan
Document, it is the intention of the parties hereto that such priority
provisions in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid, the terms
and provisions of this Section 2.4 shall control and govern.
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(c) VOLUNTARY PREPAYMENTS. Borrowers have the option, at any time,
upon not less than 10 days prior written notice to Agent, to prepay all or any
portion of the LC Obligations and the Term Loans, subject to the payment of the
Applicable Prepayment Premium if any such voluntary prepayment results in a
termination of this Agreement pursuant to Section 3.5.
(d) MANDATORY PREPAYMENTS.
(i) If, as of the last day of any month, (A) the sum of (x) the
aggregate outstanding principal balance of the Term Loans on such date, plus (y)
the aggregate outstanding principal balance of the LC Obligations on such date,
plus (z) the Letter of Credit Usage on such date exceeds (B) the Borrowing Base
(such excess being referred to as the "Limiter Excess"), then Borrowers shall,
within 3 Business Days thereafter, prepay, without penalty or premium, the
outstanding principal amount of the Obligations in accordance with Section
2.4(e) in an aggregate amount equal to the Limiter Excess.
(ii) Immediately upon the receipt by any Loan Party of the
proceeds of any voluntary or involuntary sale or disposition by any Loan Party
of property or assets constituting Collateral (including casualty losses or
condemnations but excluding sales or dispositions which qualify as Permitted
Dispositions (other than clause (l) of the definition of Permitted
Dispositions)), Borrowers shall prepay the outstanding principal amount of the
Obligations in accordance with Section 2.4(e) in an amount equal to 100% of the
Net Cash Proceeds (including condemnation awards and payments in lieu thereof)
received by such Person in connection with such sales or dispositions; provided
that, so long as (A) no Default or Event of Default shall have occurred and is
continuing, (B) Administrative Borrower shall have given Agent prior written
notice of Borrowers' intention to apply such monies to the costs of replacement
of the properties or assets that are the subject of such sale or disposition or
the cost of purchase or construction of other assets useful in the business of
Loan Parties, (C) the monies are held in a cash collateral account in which
Agent has a perfected first-priority security interest, and (D) the applicable
Loan Party completes such replacement, purchase, or construction within 180 days
after the initial receipt of such monies, Loan Parties shall have the option to
apply such monies to the costs of replacement of the property or assets that are
the subject of such sale or disposition or the costs of purchase or construction
of other assets useful in the business of Loan Parties unless and to the extent
that such applicable period shall have expired without such replacement,
purchase or construction being made or completed, in which case, any amounts
remaining in the cash collateral account shall be paid to Agent and applied in
accordance with Section 2.4(e). Nothing contained in this Section 2.4(d)(ii)
shall permit Loan Parties to sell or otherwise dispose of any property or assets
other than in accordance with Section 6.4.
(iii) Immediately upon the receipt by any Loan Party of any
Extraordinary Receipts with respect to Collateral, Borrowers shall prepay the
outstanding principal amount of the Obligations in accordance with Section
2.4(e) in an amount equal to 100% of such Extraordinary Receipts, net of any
reasonable expenses incurred in collecting such Extraordinary Receipts.
(iv) Immediately upon the issuance or incurrence by any Loan
Party of any Indebtedness (other than Indebtedness permitted under Section 6.1)
or the issuance by any Loan Party of any shares of Loan Parties' Stock (other
than in the event that any Loan Party forms a Subsidiary in accordance with the
terms hereof, the issuance by such Subsidiary of Stock to any such Loan Party),
Borrowers shall prepay the outstanding principal amount of the Obligations in
accordance with Section 2.4(e) in an amount equal to 100% of the Net Cash
Proceeds received by such Person in connection with such issuance or incurrence.
The provisions of this Section 2.4(d)(iv) shall not be deemed to be implied
consent to any such issuance or incurrence otherwise prohibited by the terms and
conditions of this Agreement.
(e) APPLICATION OF PAYMENTS. Each prepayment pursuant to Section
2.4(d) shall be applied ratably to the outstanding principal amount of the LC
Obligations and the Term Loans until paid in full. Each such prepayment of Term
Loan A shall be applied against the remaining installments of principal of Term
Loan A in the inverse order of maturity.
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2.5 INTENTIONALLY OMITTED.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c) below, all
Obligations (except for undrawn Letters of Credit) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof as follows: (i) if the relevant Obligation is a LIBOR Rate Loan,
at a per annum rate equal to the LIBOR Rate plus the LIBOR Rate Margin, and (ii)
otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.
The foregoing notwithstanding, at no time shall any portion of the
Obligations bear interest on the Daily Balance thereof at a per annum rate less
than 3.75%. To the extent that interest accrued hereunder at the rate set forth
herein would be less than the foregoing minimum daily rate, the interest rate
chargeable hereunder for such day automatically shall be deemed increased to the
minimum rate.
(b) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the ratable
benefit of the Lenders, subject to any agreements between Agent and individual
Lenders), a Letter of Credit fee (in addition to the charges, commissions, fees,
and costs set forth in Section 2.12(e)) which shall accrue at a rate equal to
1.50% per annum times the Daily Balance of the undrawn amount of all outstanding
Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during the continuation of
an Event of Default, but solely at the election of Agent or the Required
Lenders,
(i) all Obligations (except for undrawn Letters of Credit) that
have been charged to the Loan Account pursuant to the terms hereof shall bear
interest on the Daily Balance thereof at a per annum rate equal to 2 percentage
points above the per annum rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided for above shall be
increased to 2 percentage points above the per annum rate otherwise applicable
hereunder.
(d) PAYMENT. Except as provided to the contrary in Section 2.11 or
Section 2.13(a), interest, Letter of Credit fees, and all other fees payable
hereunder shall be due and payable, in arrears, on the first day of each month
(or, if such first day is not a Business Day, the next succeeding Business Day)
during the term hereof. Borrowers hereby authorize Agent, from time to time,
without prior notice to Borrowers (except as otherwise specifically provided in
any Loan Document), to charge all interest and fees (when due and payable), all
Lender Group Expenses (as and when incurred), all charges, commissions, fees,
and costs provided for in Section 2.12(e) (as and when accrued or incurred), all
fees and costs provided for in Section 2.11 (as and when accrued or incurred),
and all other payments as and when due and payable under any Loan Document to
Borrowers' Loan Account, which amounts thereafter shall constitute Obligations
hereunder and shall accrue interest at the rate then applicable to Base Rate
Loans hereunder. Any interest not paid when due shall be compounded by being
charged to the Loan Account and shall thereafter constitute Obligations
hereunder and shall accrue interest at the rate then applicable to Base Rate
Loans hereunder.
(e) COMPUTATION. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event shall
the interest rate or rates payable under this Agreement, plus any other amounts
paid in connection herewith, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable. Borrowers and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; provided, however, that,
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anything contained herein to the contrary notwithstanding, if said rate or rates
of interest or manner of payment exceeds the maximum allowable under applicable
law, then, ipso facto, as of the date of this Agreement, Borrowers are and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Borrowers in excess of such legal maximum, whenever received,
shall be applied to reduce the principal balance of the Obligations to the
extent of such excess.
2.7 CASH MANAGEMENT.
(a) Subject to Section 3.6(b), Borrowers shall and shall cause each of
their Restricted Subsidiaries to (i) establish and maintain cash management
services of a type and on terms reasonably satisfactory to Agent at one or more
of the banks set forth on Schedule 2.7(a) (each a "Cash Management Bank"), and
shall request in writing and otherwise take such reasonable steps to ensure that
all of their and their Restricted Subsidiaries' Account Debtors forward payment
of the amounts owed by them directly to such Cash Management Bank, and (ii)
deposit or cause to be deposited promptly, and in any event no later than the
first Business Day after the date of receipt thereof, all of their Collections
(including those sent directly by their Account Debtors to Borrowers or their
Restricted Subsidiaries) into a bank account in Agent's name (a "Cash Management
Account") at one of the Cash Management Banks.
(b) Each Cash Management Bank shall establish and maintain Cash
Management Agreements with Agent and Borrowers, in form and substance reasonably
acceptable to Agent. Each such Cash Management Agreement shall provide, among
other things, that (i) the Cash Management Bank will comply with any
instructions (each, a "Cash Disposition Instruction"), originated by Agent
directing the disposition of the funds in such Cash Management Account without
further consent by a Borrower or its Restricted Subsidiary, as applicable, (ii)
the Cash Management Bank has no rights of setoff or recoupment or any other
claim against the applicable Cash Management Account, other than for payment of
its service fees and other charges directly related to the administration of
such Cash Management Account and for returned checks or other items of payment,
(iii) at any time after which the Agent so instructs such Cash Management Bank
(a "Cash Sweep Instruction"), it immediately will forward by daily sweep all
amounts in the applicable Cash Management Account to the Agent's Account until
such time (if any) as Agent notifies it that the Cash Sweep Instruction is
terminated pursuant to the last sentence of this Section 2.7(b); and (iv) if
clause (iii) is not applicable, then Agent shall direct the Cash Management bank
to immediately transfer all such amounts to Borrowers' Designated Account. Agent
may issue a Cash Sweep Instruction or Cash Disposition Instruction only on or
after any date that: an Event of Default shall have occurred and be continuing.
(c) So long as no Default or Event of Default has occurred and is
continuing, Administrative Borrower may amend Schedule 2.7(a) to add or replace
a Cash Management Bank or Cash Management Account; provided, however, that (i)
such prospective Cash Management Bank shall be reasonably satisfactory to Agent,
and (ii) prior to the time of the opening of such Cash Management Account, a
Borrower or its Restricted Subsidiary, as applicable, and such prospective Cash
Management Bank shall have executed and delivered to Agent a Cash Management
Agreement. Borrowers (or their Restricted Subsidiaries, as applicable) shall
close any of their Cash Management Accounts (and establish replacement cash
management accounts in accordance with the foregoing sentence) promptly and in
any event within 45 days of notice from Agent that the creditworthiness of any
Cash Management Bank is no longer acceptable in Agent's reasonable judgment, or
as promptly as practicable and in any event within 75 days of notice from Agent
that the operating performance, funds transfer, or availability procedures or
performance of the Cash Management Bank with respect to Cash Management Accounts
or Agent's liability under any Cash Management Agreement with such Cash
Management Bank is no longer acceptable in Agent's reasonable judgment.
(d) Subject to Section 3.6(b), the Cash Management Accounts shall be
cash collateral accounts subject to Control Agreements.
(e) Notwithstanding anything to the contrary contained herein, Agent
acknowledges that the Cash Management Accounts may contain from time to time
Trust Funds (as defined below), which, by law,
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Borrowers and their Subsidiaries are required to collect and remit from time to
time but which, pending such remittance, shall be contained or held in the Cash
Management Accounts. Upon Agent's delivery of a Cash Sweep Instruction, Cash
Disposition Instruction or any other exercise of control by Agent under a
Control Agreement or a Cash Management Agreement, Agent agrees to notify
Borrowers and their Subsidiaries of such exercise (which notice may be by
delivery of a copy of such Cash Sweep Instruction, if any). Upon receipt of such
notice, Borrowers and their Subsidiaries shall send written notice to Agent
certifying the type and amount of any Trust Funds contained or held in the Cash
Management Accounts. Within 3 Business Days after receipt of such notice by
Agent, Agent shall remit the amount of the Trust Funds to Borrowers and their
Subsidiaries for payment to the appropriate Person; provided, that, during such
3 Business Day period, Agent shall have the right to ask for further
clarification, verification or other supporting documentation with respect to
any such type or amount certified by Borrowers or their Subsidiaries as
constituting Trust Funds and Agent shall not be required to remit the amount of
such Trust Funds so certified unless and until Agent is reasonably satisfied as
to such clarification, verification or other supporting documentation. For the
purposes of this Agreement, "Trust Funds" means all funds held by Borrowers and
their Subsidiaries, as a fiduciary, all taxes required to be collected or
withheld (including, without limitation, federal and state withholding taxes
(including the employer's share thereof), taxes owing to any governmental unit
thereof, sales, use and excise taxes, customs duties, import duties and
independent customs brokers' charges), other taxes for which Borrowers and their
Subsidiaries may become liable, and accrued and unpaid employee compensation
(including salaries, wages, benefits and expense reimbursements).
2.8 CREDITING PAYMENTS. The receipt of any payment item by Agent (whether
from transfers to Agent by the Cash Management Banks pursuant to the Cash
Management Agreements or otherwise) shall not be considered a payment on account
unless such payment item is a wire transfer of immediately available federal
funds made to the Agent's Account or unless and until such payment item is
honored when presented for payment. Should any payment item not be honored when
presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
2.9 DESIGNATED ACCOUNT. Administrative Borrower agrees to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Term Loans.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent shall
maintain an account on its books in the name of Borrowers (the "Loan Account")
on which Borrowers will be charged with the LC Obligations and the Term Loans
made by Agent to Borrowers or for Borrowers' account, and with all other payment
Obligations hereunder or under the other Loan Documents, including, accrued
interest, fees and expenses, and Lender Group Expenses. In accordance with
Section 2.8, the Loan Account will be credited with all payments received by
Agent from Borrowers or for Borrowers' account, including all amounts received
in the Agent's Account from any Cash Management Bank. In accordance with Section
2.6(d), Agent shall render statements regarding the Loan Account to
Administrative Borrower, including principal, interest, fees, and including an
itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements, absent manifest error, shall be conclusively
presumed to be correct and accurate and constitute an account stated between
Borrowers and the Lender Group unless, within 30 days after receipt thereof by
Administrative Borrower, Administrative Borrower shall deliver to Agent written
objection thereto describing the error or errors contained in any such
statements.
2.11 FEES. Borrowers shall pay to Agent, as and when due and payable under
the terms of the Fee Letter, the fees set forth in the Fee Letter.
8
2.12 LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement, the Issuing
Lender agrees to issue letters of credit for the account of Borrowers (each, an
"L/C") or to purchase participations or execute indemnities or reimbursement
obligations (each such undertaking, an "L/C Undertaking") solely with respect to
the Existing Letters of Credit. Notwithstanding anything to the contrary
contained herein, in no event shall Issuing Lender or any other Lender be
required to issue any L/C or L/C Undertaking (or otherwise advance any credit in
respect thereof) after the Closing Date other than with respect to the Existing
Letters of Credit, and once any portion of the LC Obligations has been paid or
prepaid it may not be reborrowed. If Issuing Lender is obligated to advance
funds under a Letter of Credit, Borrowers immediately shall reimburse such L/C
Disbursement to Issuing Lender upon receiving written or telephonic notice of
such L/C Disbursement by paying to Agent an amount equal to such L/C
Disbursement not later than 11:00 a.m., California time, on the date that such
L/C Disbursement is made, provided, that Administrative Borrower has received
written or telephonic notice of such L/C Disbursement prior to 10:00 a.m.,
California time, on such date, or, if such notice has not been received by
Administrative Borrower prior to such time on such date, then not later than
11:00 a.m., California time, on the Business Day immediately following the day
that Administrative Borrower receives such notice, pursuant to the foregoing,
and, in the absence of such reimbursement, the L/C Disbursement immediately and
automatically shall be deemed to be an Obligation hereunder (an "LC Obligation"
and, collectively, the "LC Obligations") and, thereafter, shall bear interest at
the rate then applicable to Base Rate Loans under Section 2.6 (subject to
conversion to LIBOR Rate Loans in accordance with Section 2.13). To the extent
an L/C Disbursement is deemed to be an LC Obligation hereunder, Borrowers'
obligation to reimburse such L/C Disbursement shall be discharged and replaced
by the resulting LC Obligation. Promptly following receipt by Agent of any
payment from Borrowers pursuant to this paragraph, Agent shall distribute such
payment to the Issuing Lender or, to the extent that Lenders have made payments
pursuant to Section 2.12(c) to reimburse the Issuing Lender, then to such
Lenders and the Issuing Lender as their interests may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.12(a), each Lender agrees to fund its Pro Rata Share of
any LC Obligation deemed made pursuant to the foregoing subsection on the same
terms and conditions as if Borrowers had requested such LC Obligation and Agent
shall promptly pay to Issuing Lender the amounts so received by it from the
Lenders. By the issuance of a Letter of Credit (or an amendment to a Letter of
Credit increasing the amount thereof) and without any further action on the part
of the Issuing Lender or the Lenders, the Issuing Lender shall be deemed to have
granted to each Lender, and each Lender shall be deemed to have purchased, a
participation in each Letter of Credit, in an amount equal to its Pro Rata Share
of the Risk Participation Liability of such Letter of Credit, and each such
Lender agrees to pay to Agent, for the account of the Issuing Lender, such
Lender's Pro Rata Share of any payments made by the Issuing Lender under such
Letter of Credit. In consideration and in furtherance of the foregoing, each
Lender hereby absolutely and unconditionally agrees to pay to Agent, for the
account of the Issuing Lender, such Lender's Pro Rata Share of each L/C
Disbursement made by the Issuing Lender and not reimbursed by Borrowers on the
date due as provided in clause (a) of this Section, or of any reimbursement
payment required to be refunded to Borrowers for any reason. Each Lender
acknowledges and agrees that its obligation to deliver to Agent, for the account
of the Issuing Lender, an amount equal to its respective Pro Rata Share of each
L/C Disbursement made by the Issuing Lender pursuant to this Section 2.12(b)
shall be absolute and unconditional and such remittance shall be made
notwithstanding the occurrence or continuation of an Event of Default or Default
or the failure to satisfy any condition set forth in Section 3 hereof. If any
such Lender fails to make available to Agent the amount of such Lender's Pro
Rata Share of each L/C Disbursement made by the Issuing Lender in respect of
such Letter of Credit as provided in this Section, such Lender shall be deemed
to be a Defaulting Lender and Agent (for the account of the Issuing Lender)
shall be entitled to recover such amount on demand from such Lender together
with interest thereon at the Defaulting Lender Rate until paid in full.
(c) Each Borrower hereby agrees to indemnify, save, defend, and hold
the Lender Group harmless from any loss, cost, expense, or liability, and
reasonable attorneys fees incurred by the Lender Group
9
arising out of or in connection with any Letter of Credit; provided, however,
that no Borrower shall be obligated hereunder to indemnify for any loss, cost,
expense, or liability to the extent that it is caused by the gross negligence or
willful misconduct of the Issuing Lender or any other member of the Lender
Group. Each Borrower agrees to be bound by the Underlying Issuer's regulations
and interpretations of any Underlying Letter of Credit or by Issuing Lender's
interpretations of any L/C issued by Issuing Lender to or for such Borrower's
account, even though this interpretation may be different from such Borrower's
own, and each Borrower understands and agrees that the Lender Group shall not be
liable for any error, negligence, or mistake, whether of omission or commission,
in following Borrowers' instructions or those contained in the Letter of Credit
or any modifications, amendments, or supplements thereto. Each Borrower
understands that the L/C Undertakings may require Issuing Lender to indemnify
the Underlying Issuer for certain costs or liabilities arising out of claims by
Borrowers against such Underlying Issuer. Each Borrower hereby agrees to
indemnify, save, defend, and hold the Lender Group harmless with respect to any
loss, cost, expense (including reasonable attorneys fees), or liability incurred
by the Lender Group under any L/C Undertaking as a result of the Lender Group's
indemnification of any Underlying Issuer; provided, however, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability to the extent that it is caused by the gross negligence or willful
misconduct of the Issuing Lender or any other member of the Lender Group. Each
Borrower hereby acknowledges and agrees that neither the Lender Group nor the
Issuing Lender shall be responsible for delays, errors, or omissions resulting
from the malfunction of equipment in connection with any Letter of Credit.
(d) Each Borrower hereby authorizes and directs any Underlying Issuer
to deliver to the Issuing Lender all instruments, documents, and other writings
and property received by such Underlying Issuer pursuant to such Underlying
Letter of Credit and to accept and rely upon the Issuing Lender's instructions
with respect to all matters arising in connection with such Underlying Letter of
Credit and the related application.
(e) Any and all issuance charges, commissions, fees, and costs
incurred by the Issuing Lender relating to Underlying Letters of Credit shall be
Lender Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is .825% per annum
times the face amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
(f) If by reason of (i) any change after the Closing Date in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by any Governmental Authority, or (ii) compliance by the
Underlying Issuer or the Lender Group with any direction, request, or
requirement (irrespective of whether having the force of law) of any
Governmental Authority or monetary authority including, Regulation D of the
Federal Reserve Board as from time to time in effect (and any successor
thereto):
(i) any reserve, deposit, or similar requirement is or shall be
imposed or modified in respect of any Letter of Credit issued hereunder, or
(ii) there shall be imposed on the Underlying Issuer or the
Lender Group any other condition regarding any Underlying Letter of Credit or
any Letter of Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by
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Agent of any amount due pursuant to this Section, as set forth in a certificate
setting forth the calculation thereof in reasonable detail, shall, in the
absence of manifest or demonstrable error, be final and conclusive and binding
on all of the parties hereto.
2.13 LIBOR OPTION.
(a) INTEREST AND INTEREST PAYMENT DATES. In lieu of having interest
charged at the rate based upon the Base Rate, Borrowers shall have the option
(the "LIBOR Option") to have interest on all or a portion of the Term Loans or
LC Obligations be charged at a rate of interest based upon the LIBOR Rate.
Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last
day of the Interest Period applicable thereto (provided, however, that, subject
to the following clauses (ii) and (iii), in the case of any Interest Period
greater than 3 months in duration, interest shall be payable at 3 month
intervals after the commencement of the applicable Interest Period and on the
last day of such Interest Period), (ii) the occurrence of an Event of Default in
consequence of which the Required Lenders or Agent on behalf thereof have
elected to accelerate the maturity of all or any portion of the Obligations, or
(iii) termination of this Agreement pursuant to the terms hereof. On the last
day of each applicable Interest Period, unless Administrative Borrower properly
has exercised the LIBOR Option with respect thereto, the interest rate
applicable to such LIBOR Rate Loan automatically shall convert to the rate of
interest then applicable to Base Rate Loans of the same type hereunder. At any
time that an Event of Default has occurred and is continuing, Borrowers no
longer shall have the option to request that Obligations bear interest at a rate
based upon the LIBOR Rate and Agent shall have the right to convert the interest
rate on all outstanding LIBOR Rate Loans to the rate then applicable to Base
Rate Loans hereunder.
(b) LIBOR ELECTION.
(i) Administrative Borrower may, at any time and from time to
time, so long as no Event of Default has occurred and is continuing, elect to
exercise the LIBOR Option by notifying Agent prior to 11:00 a.m. (California
time) at least 3 Business Days prior to the commencement of the proposed
Interest Period (the "LIBOR Deadline"). Notice of Administrative Borrower's
election of the LIBOR Option for a permitted portion of the Obligations and an
Interest Period pursuant to this Section shall be made by delivery to Agent of a
LIBOR Notice received by Agent before the LIBOR Deadline, or by telephonic
notice received by Agent before the LIBOR Deadline (to be confirmed by delivery
to Agent of a LIBOR Notice received by Agent prior to 5:00 p.m. (California
time) on the same day). Promptly upon its receipt of each such LIBOR Notice,
Agent shall provide a copy thereof to each of the Lenders.
(ii) Each LIBOR Notice shall be irrevocable and binding on
Borrowers. In connection with each LIBOR Rate Loan, each Borrower shall
indemnify, defend, and hold Agent and the Lenders harmless against any loss,
cost, or expense incurred by Agent or any Lender as a result of (A) the payment
of any principal of any LIBOR Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (B) the conversion of any LIBOR Rate Loan other than on the last day
of the Interest Period applicable thereto, or (C) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, and expenses,
collectively, "Funding Losses"). Funding Losses shall, with respect to Agent or
any Lender, be deemed to equal the amount determined by Agent or such Lender to
be the excess, if any, of (1) the amount of interest that would have accrued on
the principal amount of such LIBOR Rate Loan had such event not occurred, at the
LIBOR Rate that would have been applicable thereto, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period therefor), minus (2) the amount of interest
that would accrue on such principal amount for such period at the interest rate
which Agent or such Lender would be offered were it to be offered, at the
commencement of such period, Dollar deposits of a comparable amount and period
in the London interbank market. A certificate of Agent or a Lender delivered to
Administrative Borrower setting forth any amount or amounts that Agent or such
Lender is entitled to receive pursuant to this Section 2.13 shall be conclusive
absent manifest error unless the Administrative
11
Borrower shall object in writing within seven (7) Business Days of receipt
thereof, specifying the basis for such objection in detail.
(iii) Borrowers shall have not more than 5 LIBOR Rate Loans in
effect at any given time. Borrowers only may exercise the LIBOR Option for LIBOR
Rate Loans of at least $1,000,000 and integral multiples of $500,000 in excess
thereof.
(c) PREPAYMENTS. Borrowers may prepay LIBOR Rate Loans or convert such
Loans to Base Rate Loans at any time; provided, however, that in the event that
LIBOR Rate Loans are so prepaid or converted on any date that is not the last
day of the Interest Period applicable thereto, including as a result of any
automatic prepayment through the required application by Agent of proceeds of
Borrowers' and their respective Restricted Subsidiaries' Collections in
accordance with Section 2.4(b) or for any other reason, including early
termination of the term of this Agreement or acceleration of all or any portion
of the Obligations pursuant to the terms hereof, each Borrower shall indemnify,
defend, and hold Agent and the Lenders and their Participants harmless against
any and all Funding Losses in accordance with clause (b)(ii) above.
(d) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Agent with respect to any
Lender on a prospective basis to take into account any additional or increased
costs to such Lender of maintaining or obtaining any eurodollar deposits or
increased costs, in each case, due to changes in applicable law occurring
subsequent to the commencement of the then applicable Interest Period, including
changes in tax laws (except changes of general applicability in tax laws
relating to taxes based on income, profits, receipts or capital) and changes in
the reserve requirements imposed by the Board of Governors of the Federal
Reserve System (or any successor), excluding the Reserve Percentage, which
additional or increased costs would increase the cost of funding loans bearing
interest at the LIBOR Rate. In any such event, the affected Lender shall give
Administrative Borrower and Agent notice of such a determination and adjustment
and Agent promptly shall transmit the notice to each other Lender and, upon its
receipt of the notice from the affected Lender, Administrative Borrower may, by
notice to such affected Lender (y) require such Lender to furnish to
Administrative Borrower a statement setting forth the basis for adjusting such
LIBOR Rate and the method for determining the amount of such adjustment
accompanied by a certificate of such Lender stating that it is charging such
similar increased costs to similarly situated borrowers, or (z) repay the LIBOR
Rate Loans with respect to which such adjustment is made (together with any
amounts due under clause (b)(ii) above).
(ii) In the event that any change in market conditions or any
law, regulation, treaty, or directive, or any change therein or in the
interpretation of application thereof, shall at any time after the date hereof,
in the reasonable opinion of any Lender, make it unlawful or impractical for
such Lender to fund or maintain LIBOR Rate Loans or to continue such funding or
maintaining, or to determine or charge interest rates at the LIBOR Rate, such
Lender shall give notice of such changed circumstances to Agent and
Administrative Borrower and Agent promptly shall transmit the notice to each
other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are
outstanding, the date specified in such Lender's notice shall be deemed to be
the last day of the Interest Period of such LIBOR Rate Loans, and interest upon
the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate
then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to
elect the LIBOR Option until such Lender determines that it would no longer be
unlawful or impractical to do so.
(e) NO REQUIREMENT OF MATCHED FUNDING. Anything to the contrary
contained herein notwithstanding, neither Agent, nor any Lender, nor any of
their Participants, is required actually to acquire eurodollar deposits to fund
or otherwise match fund any Obligation as to which interest accrues at the LIBOR
Rate. The provisions of this Section shall apply as if each Lender or its
Participants had match funded any Obligation as to which interest is accruing at
the LIBOR Rate by acquiring eurodollar deposits for each Interest Period in the
amount of the LIBOR Rate Loans.
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2.14 CAPITAL REQUIREMENTS. If, after the date hereof, either (i) the
adoption of or change in any law, rule, regulation or guideline regarding
capital requirements for banks or bank holding companies, or any change in the
interpretation or application thereof by any Governmental Authority charged with
the administration thereof, or (ii) compliance by any Lender or its parent bank
holding company with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law), has the
effect of reducing the return on such Lender's or such holding company's capital
as a consequence of such Lender's Commitments hereunder to a level below that
which such Lender or such holding company could have achieved but for such
adoption, change, or compliance (taking into consideration such Lender's or such
holding company's then existing policies with respect to capital adequacy and
assuming the full utilization of such entity's capital) by any amount deemed in
good faith by such Lender to be material and the result is an increase in the
cost to any Lender of funding or maintaining any LC Obligations or Term Loans to
Borrowers, then such Lender may notify Administrative Borrower and Agent
thereof. Following receipt of such notice, Borrowers agree to pay such Lender on
demand the amount of such reduction of return of capital as and when such
reduction is determined, payable within 90 days after presentation by such
Lender of a statement in the amount and setting forth in reasonable detail such
Lender's calculation thereof and the assumptions upon which such calculation was
based (which statement shall be deemed true and correct absent manifest error).
In determining such amount, such Lender may use any reasonable averaging and
attribution methods.
2.15 JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each Borrower is accepting joint and several liability hereunder
and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender Group under this Agreement, for the
mutual benefit, directly and indirectly, of each Borrower and in consideration
of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations.
(b) Each Borrower, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 2.15), it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of each Borrower without preferences or distinction among them.
(c) If and to the extent that any Borrower shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such event
the other Borrowers will make such payment with respect to, or perform, such
Obligation.
(d) The Obligations of each Borrower under the provisions of this
Section 2.15 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each
Borrower hereby waives notice of acceptance of its joint and several liability,
notice of any advances made under or pursuant to this Agreement, notice of the
occurrence of any Default, Event of Default, or of any demand for any payment
under this Agreement, notice of any action at any time taken or omitted by Agent
or Lenders under or in respect of any of the Obligations, any requirement of
diligence or to mitigate damages and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of every kind in
connection with this Agreement (except as otherwise provided in this Agreement).
Each Borrower hereby assents to, and waives notice of, any extension or
postponement of the time for the payment of any of the Obligations, the
acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Agent or Lenders at any time or times in respect of any default by any Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of
13
this Agreement, and the taking, addition, substitution or release, in whole or
in part, at any time or times, of any security for any of the Obligations or the
addition, substitution or release, in whole or in part, of any Borrower. Without
limiting the generality of the foregoing, each Borrower assents to any other
action or delay in acting or failure to act on the part of any Agent or Lender
with respect to the failure by any Borrower to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 2.15 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this Section
2.15, it being the intention of each Borrower that, so long as any of the
Obligations hereunder remain unsatisfied, the Obligations of each Borrower under
this Section 2.15 shall not be discharged except by performance and then only to
the extent of such performance. The Obligations of each Borrower under this
Section 2.15 shall not be diminished or rendered unenforceable by any winding
up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Borrower or any Agent or Lender.
(f) Each Borrower represents and warrants to Agent and Lenders that
such Borrower is currently informed of the financial condition of Borrowers and
of all other circumstances which a diligent inquiry would reveal and which bear
upon the risk of nonpayment of the Obligations. Each Borrower further represents
and warrants to Agent and Lenders that such Borrower has read and understands
the terms and conditions of the Loan Documents. Each Borrower hereby covenants
that such Borrower will continue to keep informed of Borrowers' financial
condition, the financial condition of other guarantors, if any, and of all other
circumstances which bear upon the risk of nonpayment or nonperformance of the
Obligations.
(g) Each Borrower waives all rights and defenses arising out of an
election of remedies by Agent or any Lender, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security for a
guaranteed obligation, has destroyed Agent's or such Lender's rights of
subrogation and reimbursement against such Borrower by the operation of Section
580(d) of the California Code of Civil Procedure or otherwise.
(h) Each Borrower waives all rights and defenses that such Borrower
may have because the Obligations are secured by Real Property. This means, among
other things:
(i) Agent and Lenders may collect from such Borrower without first
foreclosing on any Collateral pledged by Borrowers.
(ii) If Agent or any Lender forecloses on any Real Property
Collateral pledged by Borrowers:
(A) The amount of the Obligations may be reduced only by the
price for which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price.
(B) Agent and Lenders may collect from such Borrower even if
Agent or Lenders, by foreclosing on the Real Property Collateral, has destroyed
any right such Borrower may have to collect from the other Borrowers.
This is an unconditional and irrevocable waiver of any rights and defenses such
Borrower may have because the Obligations are secured by Real Property. These
rights and defenses include, but are not limited to, any rights or defenses
based upon Section 580a, 580b, 580d or 726 of the California Code of Civil
Procedure.
(i) The provisions of this Section 2.15 are made for the benefit of
Agent, Lenders and their respective successors and assigns, and may be enforced
by it or them from time to time against any or all Borrowers as often as
occasion therefor may arise and without requirement on the part of any such
Agent, Lender, successor or assign first to marshal any of its or their claims
or to exercise any of its or their rights against any Borrower or to exhaust any
remedies available to it or them against any Borrower or to resort to
14
any other source or means of obtaining payment of any of the Obligations
hereunder or to elect any other remedy. The provisions of this Section 2.15
shall remain in effect until all of the Obligations shall have been paid in full
or otherwise fully satisfied. If at any time, any payment, or any part thereof,
made in respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by any Agent or Lender upon the insolvency, bankruptcy or
reorganization of any Borrower, or otherwise, the provisions of this Section
2.15 will forthwith be reinstated in effect, as though such payment had not been
made.
(j) Each Borrower hereby agrees that it will not enforce any of its
rights of contribution or subrogation against any other Borrower with respect to
any liability incurred by it hereunder or under any of the other Loan Documents,
any payments made by it to Agent or Lenders with respect to any of the
Obligations or any collateral security therefor until such time as all of the
Obligations have been paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to any Agent or
Lender hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.
(k) Each Borrower hereby agrees that, after the occurrence and during
the continuance of any Default or Event of Default, the payment of any amounts
due with respect to the indebtedness owing by any Borrower to any other Borrower
is hereby subordinated to the prior payment in full in cash of the Obligations.
Each Borrower hereby agrees that after the occurrence and during the continuance
of any Default or Event of Default, such Borrower will not demand, xxx for or
otherwise attempt to collect any indebtedness of any other Borrower owing to
such Borrower until the Obligations shall have been paid in full in cash. If,
notwithstanding the foregoing sentence, such Borrower shall collect, enforce or
receive any amounts in respect of such indebtedness, such amounts shall be
collected, enforced and received by such Borrower as trustee for Agent, and such
Borrower shall deliver any such amounts to Agent for application to the
Obligations in accordance with Section 2.4(b).
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The obligation
of each Lender to make its initial extension of credit provided for hereunder,
is subject to the fulfillment, to the satisfaction of Agent and each Lender of
each of the conditions precedent set forth on Schedule 3.1 (the making of such
initial extension of credit by a Lender being conclusively deemed to be its
satisfaction or waiver of the conditions precedent).
3.2 INTENTIONALLY OMITTED.
3.3 TERM. This Agreement shall continue in full force and effect for a term
ending on November 30, 2010 (the "Maturity Date"). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders,
shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.
3.4 EFFECT OF TERMINATION. On the date of termination of this Agreement,
all Obligations (including contingent reimbursement obligations of Borrowers
with respect to outstanding Letters of Credit) immediately shall become due and
payable without notice or demand and Borrowers agree to either (i) provide cash
collateral to be held by Agent for the benefit of those Lenders in an amount
equal to 105% of the Letter of Credit Usage, or (ii) cause the original Letters
of Credit to be returned to the Issuing Lender). No termination of this
Agreement, however, shall relieve or discharge Borrowers or their respective
Restricted Subsidiaries of their duties, Obligations, or covenants hereunder or
under any other Loan Document and the Agent's Liens in
15
the Collateral shall remain in effect until all Obligations have been paid in
full and the Lender Group's obligations to provide additional credit hereunder
have been terminated. When this Agreement has been terminated and all of the
Obligations have been paid in full and the Lender Group's obligations to provide
additional credit under the Loan Documents have been terminated irrevocably,
Agent will, at Borrowers' sole expense, execute and deliver any termination
statements, lien releases, mortgage releases, re-assignments of trademarks,
discharges of security interests, and other similar discharge or release
documents (and, if applicable, in recordable form) as are reasonably necessary
to release, as of record, the Agent's Liens and all notices of security
interests and liens previously filed by Agent with respect to the Obligations.
3.5 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at any time
upon 30 days prior written notice by Administrative Borrower to Agent, to
terminate this Agreement by paying to Agent, in cash, the Obligations (including
either (i) providing cash collateral to be held by Agent for the benefit of
those Lenders in an amount equal to 105% of the Letter of Credit Usage, or (ii)
causing the original Letters of Credit to be returned to the Issuing Lender), in
full, together with any Applicable Prepayment Premium. If Administrative
Borrower has sent a notice of termination pursuant to the provisions of this
Section, then, absent an agreement to the contrary contained in any Loan
Document, the Commitments shall terminate and Borrowers shall be obligated to
repay the Obligations (including either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders in an amount equal to 105% of the
Letter of Credit Usage, or (ii) causing the original Letters of Credit to be
returned to the Issuing Lender), in full, together with any Applicable
Prepayment Premium, on the date set forth as the date of termination of this
Agreement in such notice.
3.6 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to maintain
the LC Obligations and the Term Loans (or otherwise extend credit hereunder) is
subject to the fulfillment, on or before the date applicable thereto, of each of
the conditions subsequent set forth below (the failure by Borrowers to so
perform or cause to be performed constituting an Event of Default):
(a) within 30 days after the Closing Date (or such longer period as
agreed to by Agent in its sole discretion), Borrowers shall have delivered to
Agent certified copies of the policies of insurance, together with the
endorsements thereto, as are required by Section 5.8, the form and substance of
which shall be reasonably satisfactory to Agent and its counsel;
(b) within 60 days after the Closing Date (or such longer period as
agreed to by Agent in its sole discretion), Borrowers shall deliver to Agent
Cash Management Agreements and Control Agreements, in form and substance
reasonably satisfactory to Agent;
(c) within 90 days after the Closing Date (or such longer period as
agreed to by Agent in its sole discretion), Borrowers shall use their
commercially reasonable efforts to deliver to Agent Collateral Access Agreements
with respect to any leased location at which books and records are located or
Collateral in excess of $500,000 is located;
(d) within 10 Business Days after the Closing Date (or such longer
period as agreed to by Agent in its sole discretion), Borrowers shall deliver to
Agent (i) any certificates representing shares of Stock pledged under the
Security Agreement, as well as Stock powers with respect thereto endorsed in
blank, to the extent not delivered prior to the Closing Date, (ii) the original
notes issued under the M&T Facility, marked cancelled: and (iii) an affidavit of
lost indemnity in form and substance reasonably satisfactory to Agent with
respect to any certificates representing shares of Stock pledged under the
Security Agreement but not delivered to Agent on the Closing Date or pursuant to
clause (i) above;
(e) on or prior to April 15, 2007 (or such longer period as agreed to
by Agent in its sole discretion), Agent shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
5.8, the form and substance of which shall be satisfactory to Agent;
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(f) within 90 days after the Closing Date, the following conditions
shall have been satisfied with respect to all Real Property Collateral (other
than the Real Property Collateral located in the State of New York): (a) Agent
shall have been granted a first priority Mortgage on such Real Property
Collateral; (b) Agent shall have received mortgagee title insurance policies (or
marked commitments to issue the same) for such Real Property Collateral issued
by a title insurance company reasonably satisfactory to Agent in an amount
reasonably satisfactory to Agent assuring Agent that the Mortgage on such Real
Property Collateral is a valid and enforceable first priority mortgage Lien on
such Real Property Collateral free and clear of all defects and encumbrances
except Permitted Liens, and such mortgagee title insurance policies (or marked
commitments to issue the same) otherwise shall be in form and substance
reasonably satisfactory to Agent; (c) Borrowers and their Subsidiaries shall
have paid to said title insurance company all expenses and premiums of said
title insurance company in connection with the issuance of such mortgagee title
insurance policies (or marked commitments to issue the same) and in addition
shall, to the extent required, have paid all recording costs, stamp taxes,
mortgage taxes, intangibles taxes and other fees and costs (including reasonable
attorneys fees and expenses) incurred in connection therewith; and (d) Agent
shall have received such other documentation and opinions of counsel, in form
and substance reasonably satisfactory to Agent, in connection with the grant of
such Mortgage as Agent shall request in its Permitted Discretion, including,
without limitation, surveys (or existing surveys and survey affidavits that are
(x) sufficient to have the "matters that would be shown on a survey" exception
deleted from the mortgagee policy of title insurance and (y) reasonably
satisfactory to Agent), financing statements and fixture filings; and
(g) within 10 days after the Closing Date (or such longer period as
agreed to by Agent in its sole discretion), Borrowers shall deliver to Agent the
Governing Documents, as amended, modified, or supplemented to the Closing Date,
for XX Xxxx'x Incorporated certified by the Secretary of State of the
jurisdiction of organization of such Person, which certificate shall indicate
that such Person is in good standing in such jurisdiction.
4. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement, each
Borrower makes the following representations and warranties to the Lender Group
which shall be true, correct, and complete, in all material respects, as of the
date hereof, and shall be true, correct, and complete, in all material respects,
as of the Closing Date (except to the extent that such representations and
warranties relate solely to an earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement:
4.1 NO ENCUMBRANCES. Borrowers and their respective Restricted Subsidiaries
have good and indefeasible title to, or a valid leasehold interest in, their
material personal property assets and good and marketable title to, or a valid
leasehold interest in, their Real Property, in each case, free and clear of
Liens except for Permitted Liens.
4.2 ELIGIBLE ACCOUNTS. As to each Account that is identified by a Borrower
as an Eligible Account in a borrowing base report submitted to Agent, such
Account is (a) a bona fide existing payment obligation of the applicable Account
Debtors created by the sale and delivery of Inventory or the rendition of
services to such Account Debtors in the ordinary course of Borrowers' business,
(b) owed to Borrowers without any known defenses, disputes, offsets,
counterclaims, or rights of cancellation, and (c) not excluded as ineligible by
virtue of one or more of the excluding criteria set forth in the definition of
Eligible Accounts.
4.3 ELIGIBLE INVENTORY.
(a) As to each item of Inventory that is identified by a Borrower as
Eligible Raw Materials Inventory in a borrowing base report submitted to Agent,
such Inventory is not excluded as ineligible by virtue of one or more of the
excluding criteria set forth in the definition of Eligible Raw Materials
Inventory.
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(b) As to each item of Inventory that is identified by a Borrower as
Finished Goods Inventory in a borrowing base report submitted to Agent, such
Inventory is (a) to such Borrower's knowledge, of good and merchantable quality,
free from known defects, and (b) not excluded as ineligible by virtue of one or
more of the excluding criteria set forth in the definition of Eligible Finished
Goods Inventory.
4.4 EQUIPMENT. Each material item of Equipment of Borrowers and their
respective Restricted Subsidiaries is used or held for use in their business
and, to such owner's knowledge, is in good working order, ordinary wear and tear
and damage by casualty excepted.
4.5 LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment (other
than (i) vehicles, (ii) Equipment out for repair, (iii) Equipment and Inventory
in transit between locations identified on Schedule 4.5(b), (iv) dies, tools,
patterns, molds and similar items maintained with customers in the ordinary
course of business, and (v) items of de minimus value) of Borrowers and their
respective Restricted Subsidiaries are not stored with a bailee, warehouseman,
or similar party (except as identified on Schedule 4.5(a), as such Schedule
shall be required to be updated pursuant to the immediately succeeding sentence)
and are located only at the locations identified on Schedule 4.5(b) (as such
Schedule shall be required to be updated pursuant to the immediately succeeding
sentence). Administrative Borrower shall be required to update Schedules 4.5(a)
and Schedule 4.5(b) simultaneously with the delivery of quarterly financial
statements required pursuant to Section 5.3; provided, that such Schedules shall
be required to be updated only with respect to Equipment or Inventory having an
aggregate value of $250,000 or greater.
4.6 INVENTORY RECORDS. Each Borrower keeps correct and accurate records
itemizing and describing the type, quality, and quantity of its and its
Restricted Subsidiaries' Inventory and the book value thereof.
4.7 STATE OF INCORPORATION; LOCATION OF CHIEF EXECUTIVE OFFICE;
ORGANIZATIONAL IDENTIFICATION NUMBER; COMMERCIAL TORT CLAIMS.
(a) The jurisdiction of organization of Borrowers and each of their
respective Restricted Subsidiaries is set forth on Schedule 4.7(a).
(b) The chief executive office of Borrowers and each of their
respective Restricted Subsidiaries is located at the address indicated on
Schedule 4.7(b) (as such Schedule may be updated pursuant to Section 5.9).
(c) Borrowers' and each of their respective Restricted Subsidiaries'
organizational identification numbers, if any, are identified on Schedule
4.7(c).
(d) As of the Closing Date, Borrowers and their respective Restricted
Subsidiaries do not hold any commercial tort claims, except as set forth on
Schedule 4.7(d).
4.8 DUE ORGANIZATION AND QUALIFICATION; RESTRICTED SUBSIDIARIES.
(a) Each Borrower is duly organized and existing and in good standing
under the laws of the jurisdiction of their organization and qualified to do
business in any state where the failure to be so qualified reasonably could be
expected to result in a Material Adverse Change.
(b) Set forth on Schedule 4.8(b) is a complete and accurate
description of the authorized capital Stock of each Borrower and their
respective Restricted Subsidiaries, by class, and, as of the Closing Date, a
description of the number of shares of each such class that are issued and
outstanding. Other than as described on Schedule 4.8(b), as of the Closing Date,
there are no subscriptions, options, warrants, or calls relating to any shares
of each Borrower's or any of their respective Restricted Subsidiaries' capital
Stock, including any right of conversion or exchange under any outstanding
security or other instrument. None of
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Borrowers or any of their respective Restricted Subsidiaries is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on Schedule 4.8(c) is a complete and accurate list of
each Borrower's direct and indirect Restricted Subsidiaries, showing, as of the
Closing Date, the number and the percentage of the outstanding shares of each
class of common and preferred Stock authorized for each of such Restricted
Subsidiaries owned directly or indirectly by the applicable Borrower. All of the
outstanding capital Stock of each such Restricted Subsidiary has been validly
issued and is fully paid and non-assessable.
4.9 DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by each Borrower of this
Agreement, the other Loan Documents and the Acquisition Documents to which each
is a party have been duly authorized by all necessary action on the part of such
Borrower.
(b) (i) The execution, delivery, and performance by each Borrower of
this Agreement and the other Loan Documents to which it is a party do not (A)
violate any material provision of federal, state, or local law or regulation
applicable to any Borrower, the Governing Documents of any Borrower, or any
material order, judgment, or decree of any court or other Governmental Authority
binding on any Borrower, (B) conflict with, result in a breach of, or constitute
(with due notice or lapse of time or both) a default under any material
contractual obligation of any Borrower, (C) result in or require the creation or
imposition of any Lien of any nature whatsoever upon any properties or assets of
any Borrower, other than Permitted Liens, or (D) require any approval or consent
of any Person under any material contractual obligation of any Borrower, other
than consents or approvals that have been obtained and that are still in force
and effect; and (ii) the execution, delivery, and performance by each Borrower
of the Acquisition Documents to which it is a party do not (A) violate any
provision of federal, state, or local law or regulation applicable to any
Borrower, the Governing Documents of any Borrower, or any order, judgment, or
decree of any court or other Governmental Authority binding on any Borrower, (B)
conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under any contractual obligation of any Borrower, (C)
result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of any Borrower, other than Permitted
Liens, or (D) require any approval or consent of any Person under any
contractual obligation of any Borrower, other than consents or approvals that
have been obtained and that are still in force and effect, which, in each of
cases (A), (B), (C) and (D) of this clause (ii), could reasonably be expected to
result in a Material Adverse Change.
(c) (i) Other than the filing of financing statements, and the
recordation of the Mortgages, the execution, delivery, and performance by each
Borrower of this Agreement and the other Loan Documents to which it is a party
do not require any registration with, consent, or approval of, or notice to, or
other action with or by, any Governmental Authority, other than consents or
approvals that have been obtained and that are still in force and effect; and
(ii) other than the filing of financing statements, and the recordation of the
Mortgages, the execution, delivery, and performance by each Borrower of the
Acquisition Documents to which it is a party do not require any registration
with, consent, or approval of, or notice to, or other action with or by, any
Governmental Authority, other than consents or approvals that have been obtained
and that are still in force and effect and other than those items which could
not reasonably be expected to result in a Material Adverse Change.
(d) (i) This Agreement and the other Loan Documents to which each
Borrower is a party, and all other documents contemplated hereby and thereby,
when executed and delivered by such Borrower will be the legally valid and
binding obligations of such Borrower, enforceable against such Borrower in
accordance with their respective terms, except as enforcement may be limited by
equitable principles or by bankruptcy, insolvency, reorganization, moratorium,
or similar laws relating to or limiting creditors' rights generally; and (ii)
the Acquisition Documents to which each Borrower is a party, and all other
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documents contemplated hereby and thereby, when executed and delivered by such
Borrower will be the legally valid and binding obligations of such Borrower,
enforceable against such Borrower in accordance with their respective terms,
except as enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors' rights generally and except to the extent that the lack of such
enforceability could not reasonably be expected to result in a Material Adverse
Change.
(e) The Agent's Liens in the Collateral are validly created,
perfected, and first priority Liens to the extent provided for in the other Loan
Documents, subject only to Permitted Liens.
(f) The execution, delivery, and performance by each Guarantor of the
Loan Documents to which it is a party have been duly authorized by all necessary
action on the part of such Guarantor.
(g) The execution, delivery, and performance by each Guarantor of the
Loan Documents to which it is a party do not (i) violate any material provision
of federal, state, or local law or regulation applicable to such Guarantor, the
Governing Documents of such Guarantor, or any material order, judgment, or
decree of any court or other Governmental Authority binding on such Guarantor,
(ii) conflict with, result in a breach of, or constitute (with due notice or
lapse of time or both) a default under any material contractual obligation of
such Guarantor, (iii) result in or require the creation or imposition of any
Lien of any nature whatsoever upon any properties or assets of such Guarantor,
other than Permitted Liens, or (iv) require any approval or consent of any
Person under any material contractual obligation of such Guarantor, other than
consents or approvals that have been obtained and that are still in force and
effect.
(h) Other than the filing of financing statements and the recordation
of the Mortgages, the execution, delivery, and performance by each Guarantor of
the Loan Documents to which such Guarantor is a party do not require any
registration with, consent, or approval of, or notice to, or other action with
or by, any Governmental Authority, other than consents or approvals that have
been obtained and that are still in force and effect.
(i) The Loan Documents to which each Guarantor is a party, and all
other documents contemplated hereby and thereby, when executed and delivered by
such Guarantor will be the legally valid and binding obligations of such
Guarantor, enforceable against such Guarantor in accordance with their
respective terms, except as enforcement may be limited by equitable principles
or by bankruptcy, insolvency, reorganization, moratorium, or similar laws
relating to or limiting creditors' rights generally.
4.10 LITIGATION. Other than those matters disclosed on Schedule 4.10, there
are no actions, suits, or proceedings pending or, to the knowledge of each
Borrower, threatened against any Borrower or any of its Restricted Subsidiaries
that (a) if adversely determined, could result in a Material Adverse Change or
(b) relate to this Agreement or any other Loan Documents or any transaction
contemplated hereby or thereby.
4.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Borrowers and their respective Restricted Subsidiaries that have been delivered
by Borrowers to the Lender Group have been prepared in accordance with GAAP
(except, in the case of unaudited financial statements, for the lack of
footnotes and being subject to year-end audit adjustments) and present fairly in
all material respects, Borrowers' and their respective Restricted Subsidiaries'
financial condition as of the date thereof and results of operations for the
period then ended. There has not been a Material Adverse Change with respect to
Borrowers and their respective Restricted Subsidiaries since December 31, 2006.
4.12 FRAUDULENT TRANSFER.
(a) Borrowers, together with their Restricted Subsidiaries, taken as a
whole, are Solvent.
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(b) No transfer of property is being made by any Borrower or any of
its Restricted Subsidiaries and no obligation is being incurred by any Borrower
or any of its Restricted Subsidiaries in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of Borrowers or any
of their respective Restricted Subsidiaries.
4.13 EMPLOYEE COMPLIANCE.
(a) Set forth on Schedule 4.13(a) is a complete and accurate list of
all Plans that meet the definition of an "employee pension benefit plan" under
Section 3(2) of ERISA and that are currently maintained or contributed to by any
Borrower, any of their respective Restricted Subsidiaries or any of their
respective ERISA Affiliates as of the Closing Date.
(b) each Borrower, their respective Restricted Subsidiaries, and their
respective ERISA Affiliates are in compliance in all material respects with all
applicable provisions and requirements of ERISA and the regulations and
published interpretations thereunder with respect to each Plan, and have
performed all their obligations in all material respects under each Plan.
(c) No ERISA Event has occurred or is reasonably expected to occur.
(d) All liabilities under each Plan are (i) funded to at least the
minimum level required by law or, if higher, to the level required by the terms
governing the Plans, (ii) insured with a reputable insurance company, (iii)
provided for or recognized in the financial statements most recently delivered
to Agent pursuant to Section 5.3 hereof to the extent required by GAAP or (iv)
estimated in the formal notes to the financial statements most recently
delivered to Agent pursuant to Section 5.3 hereof to the extent required by
GAAP.
(e) To the best knowledge of each Borrower, there are no circumstances
which may give rise to a material liability in relation to any Plan which is not
funded, insured, provided for, recognized or estimated in the manner described
in subsection (d) above.
4.14 ENVIRONMENTAL CONDITION. Except as set forth on Schedule 4.14 or
disclosed in the Phase I Environmental Site Assessment prepared by URS, and
except for matters that would not reasonably be expected to result in the
Borrowers or any of their respective Restricted Subsidiaries incurring material
liability, (a) to Borrowers' knowledge, none of Borrowers' or their respective
Restricted Subsidiaries' properties or assets has ever been used by Borrowers,
any of their respective Restricted Subsidiaries, or by previous owners or
operators in the disposal of, or to produce, store, handle, treat, release, or
transport, any Hazardous Materials, where such use, production, storage,
handling, treatment, release or transport was in violation, in any material
respect, of any applicable Environmental Law, (b) to Borrowers' knowledge, none
of Borrowers' nor any of their respective Restricted Subsidiaries' properties is
or has ever been designated or identified pursuant to any environmental
protection statute as a site requiring investigation or remediation due to the
disposal or release of Hazardous Materials, (c) none of Borrowers nor any of
their respective Restricted Subsidiaries have received notice that a Lien
arising under any Environmental Law has attached to any revenues of any Borrower
or any of its Restricted Subsidiaries or to any Real Property owned or operated
by Borrowers or any of their respective Restricted Subsidiaries, and (d) none of
Borrowers nor any of their respective Restricted Subsidiaries have received a
summons, citation, notice, or directive from the United States Environmental
Protection Agency or any other federal or state governmental agency
("Environmental Claim") concerning any action or omission by any Borrower or any
of its Restricted Subsidiaries resulting in the releasing or disposing of
Hazardous Materials into the environment other than Environmental Claims that
would not reasonably be expected to result in a Material Adverse Change, and
there are no material Environmental Claims currently pending against Borrowers
or any of their respective Restricted Subsidiaries.
21
4.15 INTELLECTUAL PROPERTY. Except for the matters which could not
reasonably be expected to result in a Material Adverse Change, each Borrower and
each of their respective Restricted Subsidiaries owns, or holds licenses in, all
trademarks, trade names, copyrights, patents, patent rights, and licenses that
are necessary to the conduct of its business as currently conducted.
4.16 LEASES. Except for the matters which could not reasonably be expected
to result in a Material Adverse Change, Borrowers and their respective
Restricted Subsidiaries enjoy peaceful and undisturbed possession under all
leases material to their business and to which they are parties or under which
they are operating and all of such material leases are valid and subsisting and
no material default by Borrowers or their respective Restricted Subsidiaries
exists under any of them except for payments which are the subject of a
Permitted Protest.
4.17 DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. As of the Closing Date, set
forth on Schedule 4.17 is a listing of all of Borrowers' and their respective
Restricted Subsidiaries' Deposit Accounts and Securities Accounts, including,
with respect to each bank or securities intermediary (a) the name and address of
such Person, and (b) the account numbers of the Deposit Accounts or Securities
Accounts maintained with such Person.
4.18 COMPLETE DISCLOSURE. All factual information furnished by or on behalf
of Borrowers or their respective Restricted Subsidiaries with respect to
Borrowers or such Restricted Subsidiaries in writing to Agent or any Lender for
purposes of or in connection with this Agreement and the other Loan Documents
is, when taken as a whole with all other furnished information, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information (when taken as a whole with all other furnished
information) not misleading in any material respect at such time in light of the
circumstances under which such information was provided. On the Closing Date,
the Projections received by Agent pursuant to clause (t) of Schedule 3.1
represent, and as of the date on which any other Projections are delivered to
Agent, such additional Projections represent Borrowers' good faith estimate of
their and their respective Restricted Subsidiaries' future performance for the
periods covered thereby (it being understood that the Projections are subject to
significant uncertainties and contingencies, many of which are beyond control
and that no assurance is or can be given that the Projections will be realized
and that actual results may vary from such Projections and such variances may be
material).
4.19 INDEBTEDNESS. Set forth on Schedule 4.19 is a true and complete list
of all Indebtedness of each Borrower and each of their respective Restricted
Subsidiaries outstanding immediately prior to the Closing Date that is to remain
outstanding after the Closing Date and such Schedule accurately reflects the
aggregate principal amount of such Indebtedness and describes the principal
terms thereof.
4.20 MATERIAL CONTRACTS. Except for matters which, either individually or
in the aggregate, could not reasonably be expected to result in a Material
Adverse Change, each Material Contract (a) is in full force and effect and is
binding upon and enforceable against each Person that is a party thereto in
accordance with its terms, (b) has not been otherwise amended or modified
(except as not otherwise prohibited hereby), and (c) is not in default due to
the action of any Borrower or any of its Restricted Subsidiaries.
5. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, until termination of all of
the Commitments and payment in full of the Obligations, Borrowers shall and
shall cause each of their respective Restricted Subsidiaries to do all of the
following:
5.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Borrowers to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain
22
information as from time to time reasonably may be requested by Agent. Borrowers
also shall keep a reporting system that shows all additions, sales, claims,
returns, and allowances with respect to their and their respective Restricted
Subsidiaries' sales.
5.2 COLLATERAL REPORTING. Provide Agent with each of the reports set forth
on Schedule 5.2 at the times specified therein. In addition, each Borrower
agrees to cooperate fully with Agent to facilitate and implement, where
appropriate, a system of electronic collateral reporting in order to provide
electronic reporting of each of the items set forth above.
5.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent each of
the financial statements, reports, or other items set forth on Schedule 5.3 at
the time specified herein. In addition, Parent agrees that no Restricted
Subsidiary of Parent will have a fiscal year different from that of Parent.
5.4 INTENTIONALLY OMITTED.
5.5 INSPECTION. Subject to any specific limitations set forth in any other
Loan Document, permit Agent and each of its duly authorized representatives or
agents to visit any of its properties and inspect any of its assets or books and
records, to examine and make copies of its books and records, and to discuss its
affairs, finances, and accounts with, and to be advised as to the same by, its
officers and employees at such reasonable times and intervals as Agent may
designate and, so long as no Default or Event of Default exists, with reasonable
prior notice to Administrative Borrower.
5.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of their
properties which are necessary or useful in the proper conduct to their business
in good working order and condition, ordinary wear, tear, and casualty excepted
(and except where the failure to do so could not be expected to result in a
Material Adverse Change), and comply at all times with the provisions of all
material leases to which it is a party as lessee (except where the failure to do
so could not reasonably be expected to result in a Material Adverse Change), so
as to prevent any loss or forfeiture thereof or thereunder.
5.7 TAXES. Cause all material assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or assessed
against Borrowers, their respective Restricted Subsidiaries, or any of their
respective assets to be paid in full, before delinquency or before the
expiration of any extension period, except to the extent that the validity of
such assessment or tax shall be the subject of a Permitted Protest. Borrowers
will and will cause their respective Restricted Subsidiaries to make timely
payment or deposit of all tax payments and withholding taxes required of them by
applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof reasonably satisfactory to Agent indicating that the
applicable Borrower or applicable Restricted Subsidiary has made such payments
or deposits (except to the extent the subject of a Permitted Protest).
5.8 INSURANCE.
(a) At Borrowers' expense, maintain insurance respecting their and
their respective Restricted Subsidiaries' assets wherever located, covering loss
or damage by fire, theft, explosion, and all other hazards and risks as
ordinarily are insured against by other Persons engaged in the same or similar
businesses and in the same geographic area. Borrowers also shall maintain
business interruption, public liability, and product liability insurance, as
well as insurance against larceny, embezzlement, and criminal misappropriation.
All such policies of insurance shall be in such amounts and with such insurance
companies as are reasonably satisfactory to Agent. Borrowers shall deliver
copies of all such policies (other than directors and officers policies) to
Agent with an endorsement naming Agent as the sole loss payee (under a
reasonably satisfactory lender's loss payable endorsement) or additional
insured, as appropriate. Each policy of insurance or
23
endorsement shall contain a clause requiring the insurer to give not less than
30 days prior written notice to Agent in the event of cancellation of the policy
for any reason whatsoever.
(b) Administrative Borrower shall give Agent prompt notice of any loss
exceeding $500,000 covered by such insurance. So long as no Event of Default has
occurred and is continuing, Borrowers shall have the exclusive right to adjust
any losses payable under any such insurance policies which are less than
$500,000. Following the occurrence and during the continuation of an Event of
Default, or in the case of any losses payable under such insurance exceeding
$500,000, Agent shall have the exclusive right to adjust any losses payable
under any such insurance policies, without any liability to Borrowers whatsoever
in respect of such adjustments. Any monies received as payment for any loss
under any insurance policy mentioned above (other than liability insurance
policies) or as payment of any award or compensation for condemnation or taking
by eminent domain, shall be paid over to Agent to be applied in accordance with
Section 2.4(d).
(c) Borrowers will not, and will not suffer or permit their respective
Restricted Subsidiaries to, take out separate insurance concurrent in form or
contributing in the event of loss with that required to be maintained under this
Section 5.8, unless Agent is included thereon as an additional insured or loss
payee under a lender's loss payable endorsement. Administrative Borrower
promptly shall notify Agent whenever such separate insurance is taken out,
specifying the insurer thereunder and full particulars as to the policies
evidencing the same, and copies of such policies promptly shall be provided to
Agent.
5.9 LOCATION OF INVENTORY AND EQUIPMENT. Keep Borrowers' and their
respective Restricted Subsidiaries' Inventory and Equipment (other than (i)
vehicles, (ii) Equipment out for repair, (iii) Equipment and Inventory in
transit between locations identified on Schedule 4.5(b), (iv) items stored with
a bailee, warehouseman, or similar party to the extent disclosed on Schedule
4.5(a), (v) dies, tools, patterns, molds and similar items maintained with
customers in the ordinary course of business, (vi) Inventory that has been
consigned in an aggregate amount not to exceed $500,000 at any time, and (vii)
items of de minimus value) only at the locations identified on Schedule 4.5(b)
and their chief executive offices only at the locations identified on Schedule
4.7(b); provided, however, that Administrative Borrower may amend Schedule
4.5(b) or Schedule 4.7(b) so long as (A) with respect to Schedule 4.5(b), such
amendment occurs by written notice to Agent in accordance with the last sentence
of Section 4.5, and with respect to Schedule 4.7(b), such amendment occurs by
written notice to Agent not less than 30 days prior to the date on which such
chief executive office is relocated, (B) such new location is within the
continental United States, and (C) at the time of such written notification, the
applicable Borrower or Restricted Subsidiary (x) with respect to any location at
which books and records (other than prior years' historical records) are
maintained or Inventory and/or Equipment having an aggregate value of $2,000,000
or greater is maintained, obtains a Collateral Access Agreement with respect
thereto and (y) with respect to any other location, uses its commercially
reasonable efforts to provide Agent a Collateral Access Agreement with respect
thereto.
5.10 COMPLIANCE WITH LAWS. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Change.
5.11 LEASES. Except for matters which could not reasonably be expected to
result in a Material Adverse Change, pay when due all rents and other amounts
payable under any material leases to which any Borrower or any of its Restricted
Subsidiaries is a party or by which any Borrower's or any of their respective
Restricted Subsidiaries' properties and assets are bound, unless such payments
are the subject of a Permitted Protest.
5.12 EXISTENCE. Except as permitted by Section 6.3 and Section 6.4, at all
times preserve and keep in full force and effect each Borrower's and each of
their respective Restricted Subsidiaries' valid existence and, except to the
extent failure to do so could not reasonably be expected to result in a Material
Adverse
24
Change, good standing and any rights, franchises, permits, licenses,
authorizations, approvals, entitlements and accreditations material to their
businesses.
5.13 ENVIRONMENTAL.
(a) Keep any property either owned or operated by any Borrower or any
of its Restricted Subsidiaries free of any Environmental Liens or post bonds or
other financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, (b) comply, in all material respects,
with Environmental Laws and provide to Agent reasonable documentation of such
compliance which Agent reasonably requests, provided that, so long as no Default
or Event of Default shall have occurred and be continuing, Agent shall not make
such a request more than once per any consecutive 12-month period, (c) promptly
notify Agent of any release of a Hazardous Material in any reportable quantity
from or onto property owned or operated by any Borrower or any of its Restricted
Subsidiaries and take any Remedial Actions required to xxxxx said release or
otherwise to come into material compliance with applicable Environmental Law,
and (d) promptly, but in any event within 10 Business Days of its receipt
thereof, provide Agent with written notice of any of the following: (i) notice
that an Environmental Lien has been filed against any of the real or personal
property of any Borrower or any of its Restricted Subsidiaries, (ii)
commencement of any Environmental Action or notice that an Environmental Action
will be filed against any Borrower or any of its Restricted Subsidiaries which
Environmental Action could reasonably be expected to result in any Borrower or
any of its Restricted Subsidiaries incurring material liability under
Environmental Laws, and (iii) notice of a violation, citation, or other
administrative order which reasonably could be expected to result in a Material
Adverse Change.
5.14 INTENTIONALLY OMITTED.
5.15 CONTROL AGREEMENTS. Subject to Section 3.6(b), take all reasonable
steps in order for Agent to obtain control in accordance with Sections 8-106,
9-104, 9-105, 9-106, and 9-107 of the Code with respect to (subject to the
proviso contained in Section 6.12) all of its Securities Accounts, Deposit
Accounts, electronic chattel paper, investment property, and letter of credit
rights.
5.16 FORMATION OF SUBSIDIARIES. At the time that any Borrower or any
Guarantor forms any direct or indirect Subsidiary or acquires any direct or
indirect Subsidiary after the Closing Date and such Subsidiary is a Restricted
Subsidiary, such Borrower or such Guarantor shall (a) cause such new Restricted
Subsidiary to provide to Agent a joinder to this Agreement or the Guaranty, as
applicable, and the Security Agreement, together with such other security
documents (including Mortgages with respect to any Real Property of such new
Restricted Subsidiary, subject to Section 5.17), as well as appropriate
financing statements (and with respect to all property subject to a Mortgage,
fixture filings), all in form and substance reasonably satisfactory to Agent
(including being sufficient to grant Agent a first priority Lien (subject to
Permitted Liens) in and to the assets of such newly formed or acquired
Restricted Subsidiary), (b) provide to Agent a pledge agreement and appropriate
certificates and powers or financing statements, hypothecating all of the direct
or beneficial ownership interest in such new Restricted Subsidiary, in form and
substance reasonably satisfactory to Agent, and (c) provide to Agent all other
documentation, including one or more opinions of counsel reasonably satisfactory
to Agent, which in its opinion is appropriate with respect to the execution and
delivery of the applicable documentation referred to above (including policies
of title insurance or other documentation with respect to all property subject
to a Mortgage). Notwithstanding the foregoing, if a Subsidiary that is so formed
or acquired is a Controlled Foreign Corporation, then clause (a) of the
immediately preceding sentence shall not be applicable and, with respect to
clause (b) of the immediately preceding sentence, such pledge shall be limited
to 65% of the voting power of all classes of capital Stock of such Subsidiary
entitled to vote. Any document, agreement, or instrument executed or issued
pursuant to this Section 5.16 shall be a Loan Document. Notwithstanding the
foregoing, Agent and Lenders shall not be obligated to consent to any such
formation or acquisition of a Subsidiary unless such formation or acquisition is
otherwise expressly permitted hereunder.
25
5.17 REAL PROPERTY. Upon the acquisition of any fee interest in Real
Property with a purchase price or Fair Market Value in excess of $500,000 (other
than Real Property located in the State of New York or in any other state having
substantially similar real estate mortgage taxes), promptly notify Agent of the
acquisition of such Real Property and within 60 days (or such longer time as
Agent, in its reasonable discretion, may agree) thereafter: (a) grant Agent a
first priority Mortgage on such Real Property; (b) deliver mortgagee title
insurance policies (or marked commitments to issue the same) for such Real
Property issued by a title insurance company reasonably satisfactory to Agent in
an amount reasonably satisfactory to Agent assuring Agent that the Mortgage on
such Real Property Collateral is a valid and enforceable first priority mortgage
Lien on such Real Property Collateral free and clear of all defects and
encumbrances except Permitted Liens, and such mortgagee title insurance policies
(or marked commitments to issue the same) otherwise shall be in form and
substance reasonably satisfactory to Agent; (c) Borrowers and their Subsidiaries
shall pay to said title insurance company all expenses and premiums of said
title insurance company in connection with the issuance of such mortgagee title
insurance policies (or marked commitments to issue the same) and in addition
shall, to the extent required, pay all recording costs, stamp taxes, mortgage
taxes, intangibles taxes and other fees and costs (including reasonable
attorneys fees and expenses) incurred in connection therewith; and (d) execute
and/or deliver to Agent such other documentation and opinions of counsel, in
form and substance reasonably satisfactory to Agent, in connection with the
grant of such Mortgage as Agent shall request in its Permitted Discretion,
including, without limitation, surveys (or existing surveys and survey
affidavits that are (x) sufficient to have the "matters that would be shown on a
survey" exception deleted from the mortgagee policy of title insurance and (y)
reasonably satisfactory to Agent), financing statements and fixture filings.
5.18 ERISA COMPLIANCE
(a) Each Borrower shall do, and shall cause each of their respective
Restricted Subsidiaries and ERISA Affiliates to do, each of the following: (i)
maintain each Plan in compliance in all material respects with the applicable
provisions of ERISA, the IRC and each other applicable federal or state law;
(ii) cause each Qualified Plan to maintain its qualified status under Section
401(a) of the IRC; (iii) make all required contributions to each Plan; (iv)
ensure that all liabilities under each Plan are (A) funded to at least the
minimum level required by law or, if higher, to the level required by the terms
governing such Plan; (B) insured with a reputable insurance company; or (C)
provided for or recognized in the financial statements most recently delivered
to Agent under Section 5.3 (to the extent required by GAAP); and (v) ensure that
the contributions or premium payments to or in respect of each Plan are and
continue to be promptly paid at no less than the rates required under the rules
of such Plan and in accordance with the most recent actuarial advice received in
relation to such Plan and applicable law.
(b) Deliver to Agent such certifications or other evidence of
compliance with the provisions of Section 4.13 as Agent may from time to time
reasonably request.
(c) Promptly notify Agent of each of the following ERISA events
affecting any Borrower, any of their respective Restricted Subsidiaries or any
ERISA Affiliates (but in no event more than ten (10) days after such event),
together with a copy of each notice with respect to such event that may be
required to be filed with a Governmental Authority and each notice delivered by
a Governmental Authority to any Borrower, any of their respective Restricted
Subsidiaries or any ERISA Affiliates with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Pension Plan by any Borrower, any of
their respective Restricted Subsidiaries or any ERISA Affiliates; or
26
(iii) except as required under the terms of any collective
bargaining agreement, the adoption of any amendment to a Pension Plan, if such
amendment will result in a material increase in benefits or unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA).
(d) Promptly deliver to Agent, upon request, copies of (i) each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) filed
by any Borrower, any of their respective Restricted Subsidiaries or any ERISA
Affiliates with the Internal Revenue Service with respect to each Pension Plan;
(ii) all notices received by any Borrower, any of their respective Restricted
Subsidiaries or any of their respective ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; and (iii) such other documents or
governmental reports or filings relating to any Plan as Agent shall reasonably
request.
5.19 PAYMENT OF SENIOR SUBORDINATED NOTES Upon issuance of the Additional
Notes, Borrowers shall use a portion of the proceeds thereof to prepay all of
the outstanding senior subordinated notes issued pursuant to that certain
Securities Purchase Agreement dated as of October 20, 2005, among Parent and the
other parties thereto.
6. NEGATIVE COVENANTS.
Borrowers covenant and agree that, until termination of all of the
Commitments and payment in full of the Obligations, Borrowers will not and will
not permit any of their respective Restricted Subsidiaries to do any of the
following:
6.1 INDEBTEDNESS. Create, incur, assume, suffer to exist, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other Loan
Documents, together with Indebtedness owed to Underlying Issuers with respect to
Underlying Letters of Credit,
(b) Indebtedness set forth on Schedule 4.19,
(c) Permitted Purchase Money Indebtedness,
(d) refinancings, renewals, or extensions of Indebtedness permitted
under clauses (b) and (c) of this Section 6.1 (and continuance or renewal of any
Permitted Liens associated therewith) so long as: (i) such refinancings,
renewals, or extensions do not result in an increase in the principal amount of
the Indebtedness so refinanced, renewed, or extended, (ii) such refinancings,
renewals, or extensions do not result in a shortening of the average weighted
maturity of the Indebtedness so refinanced, renewed, or extended, nor are they
on terms or conditions, that, taken as a whole, are materially more burdensome
or restrictive to the applicable Borrower, (iii) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of payment to the
Obligations, then the terms and conditions of the refinancing, renewal, or
extension Indebtedness must include subordination terms and conditions that are
at least as favorable to the Lender Group, taken as a whole, as those that were
applicable to the refinanced, renewed, or extended Indebtedness, and (iv) the
Indebtedness that is refinanced, renewed, or extended is not recourse to any
Person that is liable on account of the Obligations other than those Persons
which were obligated with respect to the Indebtedness that was refinanced,
renewed, or extended or as otherwise permitted pursuant to Section 6.1,
(e) endorsement of instruments or other payment items for deposit,
(f) Indebtedness consisting of Permitted Investments,
(g) Guarantees by a Loan Party of the obligations under the Altra
Senior Credit Agreement, the Indenture Documents and the Unsecured Note
Documents,
27
(h) Hedge Agreements entered into in the ordinary course of business
and not for speculative purposes;
(i) Indebtedness of a Loan Party to another Loan Party and any
Refinancing Indebtedness in respect thereof (whether in whole or in part) so
long as such Indebtedness is subject to the Intercompany Subordination
Agreement;
(j) Guarantees by a Loan Party of Indebtedness incurred by another
Loan Party so long as the incurrence of such Indebtedness is otherwise permitted
by the terms hereof;
(k) intentionally omitted;
(l) Indebtedness (other than for borrowed money) solely to the extent
subject to Permitted Liens;
(m) intentionally omitted;
(n) Indebtedness consisting of promissory notes issued by any Borrower
or any Restricted Subsidiary to current or former directors, officers, employees
and consultants, their respective estates, spouses or former spouses to finance
the purchase or redemption of Stock permitted hereby;
(o) Indebtedness consisting of obligations of any Borrower or any
Restricted Subsidiary under deferred compensation, adjustment of purchase price,
earn outs, indemnification or other similar arrangements incurred by such Person
in connection with the Acquisition Transactions and Permitted Dispositions;
(p) cash management obligations and other Indebtedness in respect of
netting services, overdraft protections and similar arrangements, in each case
in connection with cash management and Deposit Accounts and incurred in the
ordinary course of business; and
(q) additional Indebtedness of Borrowers and their Restricted
Subsidiaries in an aggregate principal amount not to exceed $5,000,000 at any
time outstanding solely to the extent that such Indebtedness consists of either
(i) Purchase Money Indebtedness or (ii) Indebtedness that is subordinated to the
Obligations on terms reasonably satisfactory to Agent.
6.2 LIENS. Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced, renewed, or
extended under Section 6.1 and so long as the replacement Liens only encumber
those assets that secured the refinanced, renewed, or extended Indebtedness and
proceeds thereof or additions or accessions thereto).
6.3 RESTRICTIONS ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation, reorganization, or recapitalization, or liquidate, wind up, or
dissolve itself (or suffer any liquidation or dissolution), except that:
(a) any Borrower or any Restricted Subsidiary may merge with (i) any
Borrower (including a merger, the purpose of which is to reorganize such
Borrower into a new jurisdiction), or (ii) any one or more other Restricted
Subsidiaries; provided that a Borrower shall be the continuing or surviving
Person or the continuing or surviving Person shall expressly assume the
obligations of such Borrower in a manner reasonably acceptable to Agent;
28
(b) any Borrower or Restricted Subsidiary may liquidate or dissolve or
change its legal form so long as its assets are transferred to (i) in the case
of a Borrower, to another Borrower and (ii) in the case of a Restricted
Subsidiary, to a Loan Party or any other Restricted Subsidiary;
(c) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, any Borrower or Restricted Subsidiary may
merge with any other Person in order to effect an Investment permitted pursuant
to Section 6.12; provided that the continuing or surviving Person shall be a
Restricted Subsidiary, which together with each of its Restricted Subsidiaries,
shall have complied with the requirements of Section 5.16;
(d) the Borrowers and the Restricted Subsidiaries may consummate the
Acquisition Transactions; and
(e) so long as no Event of Default exists or would result therefrom, a
merger, consolidation, reorganization, recapitalization, liquidation, windup or
dissolution, the sole purpose of which is to effect a Disposition permitted
pursuant to Section 6.4.
6.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of (collectively, a
"Disposition") any of the assets of any Borrower or any of its Restricted
Subsidiaries.
6.5 CHANGE NAME. Change any Borrower's or any of their respective
Restricted Subsidiaries' name, organizational identification number,
jurisdiction of organization, or organizational identity; provided, however,
that any Borrower or any of its Restricted Subsidiaries may change its name upon
at least 10 days prior written notice by Parent or Administrative Borrower to
Agent of such change so long as, (a) at the time of such written notification,
such Borrower or such Restricted Subsidiary provides any financing statements
necessary to perfect and continue perfected the Agent's Liens and (b)
immediately after such name change, Administrative Borrower provides Agent with
evidence of such name change (including copies of any related public filings).
6.6 NATURE OF BUSINESS. Engage in any material line of business
substantially different from those lines of business conducted by Borrowers and
the Restricted Subsidiaries on the Closing Date other than any businesses
reasonably related or ancillary thereto.
6.7 PREPAYMENTS AND AMENDMENTS. Except in connection with a refinancing
permitted by Section 6.1,
(a) optionally prepay, redeem, defease, purchase, or otherwise acquire
any Indebtedness of any Borrower or any Restricted Subsidiary of a Borrower,
except (i) Purchase Money Indebtedness and (ii) the Obligations in accordance
with this Agreement;
(b) make any payment on account of Indebtedness that has been
contractually subordinated in right of payment if such payment is not permitted
at such time under the subordination terms and conditions, or
(c) directly or indirectly, amend, modify, alter, increase, or change
any of the terms or conditions of any agreement, instrument, document,
indenture, or other writing evidencing or concerning the Senior Notes or the
Altra Senior Credit Agreement in a manner materially adverse to the interests of
the Lender Group other than to consummate a Refinancing Indebtedness in respect
thereof.
6.8 INTENTIONALLY OMITTED.
6.9 INTENTIONALLY OMITTED.
29
6.10 INTENTIONALLY OMITTED.
6.11 FISCAL YEAR. Modify or change its fiscal year.
6.12 INVESTMENTS. Except for Permitted Investments, directly or indirectly,
make or acquire any Investment, or incur any liabilities (including contingent
obligations) for or in connection with any Investment; provided, however, that
Borrowers and their respective Restricted Subsidiaries shall not have Permitted
Investments (other than in the Cash Management Accounts) in Deposit Accounts or
Securities Accounts in an aggregate amount in excess of $50,000 (exclusive of
Trust Funds) at any one time unless the applicable Borrower or the applicable
Restricted Subsidiary, and the applicable securities intermediary or bank have
entered into Control Agreements governing such Permitted Investments in order to
perfect (and further establish) the Agent's Liens in such Permitted Investments.
Subject to the foregoing proviso, Borrowers shall not and shall not permit their
respective Restricted Subsidiaries to establish or maintain any Deposit Account
or Securities Account unless Agent shall have received a Control Agreement in
respect of such Deposit Account or Securities Account.
6.13 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of any Borrower except for
transactions that (a) are in the ordinary course of Borrowers' business, (b) are
upon fair and reasonable terms and (c) are no less favorable to Borrowers or
their respective Restricted Subsidiaries, as applicable, than would be obtained
in an arm's length transaction with a non-Affiliate; provided, however, that if
any such transaction involves aggregate payments or other property with a Fair
Market Value in excess of $2,500,000, it shall be approved by a majority of the
members of the Board of Directors of Parent (including a majority of the
disinterested members thereof), such approval to be evidenced by board
resolutions stating that the Parent's Board of Directors has determined that
such transactions comply with the foregoing provisions, and if any such
transaction involves an aggregate Fair Market Value of more than $5,000,000,
Parent will, prior to the consummation thereof, obtain a favorable opinion as to
the fairness of the financial terms of such transactions or series of related
transactions to the applicable Loan Party, from an Independent Financial Advisor
and file the same with Agent; provided, further, however, that such restrictions
shall not apply to:
(a) transactions exclusively between or among Parent and its
Subsidiaries permitted hereby;
(b) reasonable fees and compensation paid to, and indemnity provided
for directors, officers, employees and consultants to Parent and its
Subsidiaries;
(c) intentionally omitted;
(d) transactions otherwise expressly permitted by this Agreement;
(e) any Investment permitted pursuant to Section 6.12;
(f) any sale of the Stock of any Loan Party in exchange for equity
contributions from Parent;
(g) any merger or other transaction with an Affiliate solely for the
purpose of reincorporating a Loan Party in another jurisdiction or creating a
holding company, to the extent otherwise permitted by this Agreement;
(h) any employment, stock option, stock repurchase, employee benefit
compensation, business expense reimbursement, severance, termination or other
employment-related agreements, arrangements or plans entered into in good faith
by a Loan Party in the ordinary course of business;
30
(i) sales or purchases of inventory, other products or services to or
from any Affiliate of the Borrowers entered into in the ordinary course of
business on terms no less favorable to the Borrowers and its Subsidiaries than
those that could be obtained at the time of such sale or purchase in
arm's-length dealings with a Person who is not an Affiliate; and
(j) any agreement in effect as of the Closing Date or any transaction
contemplated thereby and any amendment thereto so long as any such amendment or
replacement agreement is not more disadvantageous to Borrowers or the Restricted
Subsidiaries in any material respect than the original agreement as in effect on
the Closing Date.
6.14 USE OF PROCEEDS. Use the proceeds of the Term Loans for any purpose
other than (a) on the Closing Date, to refinance the M&T Facility, and to pay
transactional fees, costs, and expenses incurred in connection with this
Agreement, the other Loan Documents, and the transactions contemplated hereby
and thereby, and (b) thereafter, consistent with the terms and conditions
hereof, to finance ongoing working capital, capital expenditure, and general
corporate needs of Borrowers, and for its lawful and permitted purposes.
6.15 INTENTIONALLY OMITTED.
6.16 FINANCIAL COVENANTS.
(a) FIXED CHARGE COVERAGE RATIO. Fail to maintain or achieve a Fixed
Charge Coverage Ratio, measured on a fiscal quarter-end basis, of at least the
required amount set forth in the following table for the "Applicable Period" set
forth opposite thereto:
Applicable Ratio Applicable Period
---------------- -------------------------------------
1.00:1.00 For the 4 quarter period
ending March 31, 2007
1.00:1.00 For the 4 quarter period
ending each fiscal quarter thereafter
(b) CAPITAL EXPENDITURES. Make Capital Expenditures in any fiscal year
in excess of the amount set forth in the following table for the applicable
period:
Applicable Amount Applicable Period
----------------- ------------------------------------------------
$9,750,000 fiscal year 2007
$5,625,000 fiscal year 2008
$6,000,000 fiscal year 2009
$6,375,000 fiscal year 2010 and each fiscal year thereafter
provided, however, that up to 75% of the difference between the amount of
Capital Expenditure that may be made in any fiscal year and the amount of
Capital Expenditures actually made in such fiscal year, may be made in the
immediately succeeding fiscal year.
31
6.17 ACQUISITION DOCUMENTS. Amend, modify or waive in any way materially
adverse to the Lender Group, any term or provision of the Acquisition Documents.
6.18 INTENTIONALLY OMITTED.
6.19 GOVERNING DOCUMENTS. Amend, modify or waive in any way materially
adverse to the Lender Group, any term or provision of any Governing Document of
any Borrower or Guarantor.
6.20 REAL PROPERTY COLLATERAL. Without in any manner limiting Section 6.2,
execute and deliver a mortgage with respect to any Real Property located in the
State of New York or any other Real Property for which Borrowers and their
Restricted Subsidiaries are not required to grant a Mortgage pursuant to Section
5.17, except (a) in favor of Agent or (b) if the Agent has been, or will
simultaneously be, granted a first priority mortgage with respect thereto, in
favor of (i) Xxxxx Fargo Foothill, Inc., in its capacity as agent under the
Altra Senior Credit Agreement, as a second priority mortgage to the extent
permitted by the Intercreditor Agreement and (ii) the Trustee as a third
priority mortgage to the extent permitted by the Intercreditor Agreement.
7. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "Event of Default") under this Agreement:
7.1 If Borrowers fail to pay when due and payable, or when declared due and
payable, (a) all or any portion of the Obligations consisting of interest, fees,
or charges due the Lender Group, reimbursement of Lender Group Expenses, or
other amounts (other than any portion thereof constituting principal)
constituting Obligations (including any portion thereof that accrues after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding), and
such failure continues for a period of 3 Business Days, or (b) all or any
portion of the principal of the Obligations);
7.2 If any Borrower or any of its Restricted Subsidiaries
(a) fails to perform or observe any covenant or other agreement
contained in any of Sections 5.5, 5.8, 5.12 (as to existence), and 6.1 through
6.20 of this Agreement or Section 6 of the Security Agreement;
(b) fails to perform or observe any covenant or other agreement
contained in any of Sections 2.7, 5.2, and 5.3 of this Agreement and such
failure continues for a period of 3 Business Days after written notice thereof
is given to Administrative Borrower by Agent;
(c) fails to perform or observe any covenant or other agreement
contained in any of Sections 5.6, 5.7, 5.9, 5.15, 5.16, and 5.17 of this
Agreement and such failure continues for a period of 10 Business Days after
written notice thereof is given to Administrative Borrower by Agent; or
(d) fails to perform or observe any covenant or other agreement
contained in this Agreement, or in any of the other Loan Documents; in each
case, other than any such covenant or agreement that is the subject of another
provision of this Section 7 (in which event such other provision of this Section
7 shall govern), and such failure continues for a period of 20 Business Days
after written notice thereof is given to Administrative Borrower by Agent;
7.3 If any of any Borrower's or any of its Restricted Subsidiaries' assets
with an individual fair market value of $750,000 or more or assets with an
aggregate fair market value of $2,000,000 or more is
32
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any third Person and the same is not discharged
before the earlier of 30 days after the date it first arises or 5 days prior to
the date on which such property or asset is subject to forfeiture by such
Borrower or the applicable Restricted Subsidiary;
7.4 If an Insolvency Proceeding is commenced by any Borrower or any of its
Restricted Subsidiaries;
7.5 If an Insolvency Proceeding is commenced against any Borrower or any of
its Restricted Subsidiaries, and any of the following events occur: (a) the
applicable Borrower or Restricted Subsidiary consents to the institution of such
Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 60 calendar days of the date of
the filing thereof, (d) an interim trustee is appointed to take possession of
all or any substantial portion of the properties or assets of, or to operate all
or any substantial portion of the business of, any Borrower or any such
Restricted Subsidiary, or (e) an order for relief shall have been issued or
entered therein;
7.6 If any Borrower or any of its Restricted Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;
7.7 If one or more judgments, orders, or awards involving an individual
amount of $750,000 or more or an aggregate amount of $2,000,000, or more (except
to the extent fully covered by insurance pursuant to which the insurer has
accepted liability therefor in writing) shall be entered or filed against any
Borrower or any of its Restricted Subsidiaries or with respect to any of their
respective assets, and the same is not released, discharged, bonded against, or
stayed pending appeal before 30 days after the date it first arises;
7.8 If there is a default in one or more agreements to which any Borrower
or any of its Restricted Subsidiaries is a party with one or more third Persons
relative to Indebtedness of any Borrower or any of its Restricted Subsidiaries
involving an aggregate amount of $2,000,000 or more, and (a) such default (i)
occurs at the final maturity of the obligations thereunder, or (ii) results in a
right by such third Person(s), irrespective of whether exercised, to accelerate
the maturity of the applicable Borrower's or Restricted Subsidiary's obligations
thereunder, or (b) or any such Indebtedness obligations shall be required to be
prepaid or redeemed (other than by a regularly scheduled required prepayment or
redemption), prior to the stated maturity thereof;
7.9 If any warranty, representation, statement, or Record made herein or in
any other Loan Document or delivered to Agent or any Lender in connection with
this Agreement or any other Loan Document proves to be untrue in any material
respect as of the date of issuance or making or deemed making thereof;
7.10 If the obligation of any Guarantor under the Guaranty is limited or
terminated by operation of law or by such Guarantor or any such Guarantor
becomes the subject of an Insolvency Proceeding;
7.11 If the Security Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby, except as permitted under this Agreement;
7.12 Any provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by any Borrower or any of its Restricted Subsidiaries, or a proceeding
shall be commenced by any Borrower or any of its Restricted Subsidiaries, or by
any Governmental Authority having jurisdiction over any Borrower or any of its
Restricted Subsidiaries,
33
seeking to establish the invalidity or unenforceability thereof, or any Borrower
or any of its Restricted Subsidiaries shall deny that it has any liability or
obligation purported to be created under any Loan Document;
7.13 If any Change of Control shall have occurred;
7.14 If (a) there shall occur and be continuing any "Event of Default" (or
any comparable term) under, and as defined in any Indenture Document or under
the Altra Senior Credit Agreement, (b) any of the Obligations for any reason
shall cease to be "XX Xxxx'x Credit Agreement Secured Obligations" (or any
comparable terms) under, and as defined in the Intercreditor Agreement, (c) any
Indebtedness other than the Obligations shall constitute "XX Xxxx'x Credit
Agreement Senior Obligations" (or any comparable term) under, and as defined in,
any Intercreditor Agreement or any other document evidencing or governing any
Indebtedness that has been contractually subordinated in right of payment to the
Obligations, except as expressly permitted by this Agreement, (d) any holder of
any Senior Note shall fail to perform or comply with any of the subordination
provisions of the documents evidencing or governing such Indebtedness, or (e)
the subordination provisions of the Intercreditor Agreement shall, in whole or
in part, terminate, cease to be effective or cease to be legally valid, binding
and enforceable against any holder of such Indebtedness; or
7.15 If there occurs one or more ERISA Events which results in or otherwise
is associated with liability of any Borrower, any of its Restricted
Subsidiaries, or any of their respective ERISA Affiliates in excess of
$2,000,000 in the aggregate during the term of this Agreement.
8. THE LENDER GROUP'S RIGHTS AND REMEDIES.
8.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the continuation,
of an Event of Default, the Required Lenders (at their election but without
notice of their election and without demand) may authorize and instruct Agent to
do any one or more of the following on behalf of the Lender Group (and Agent,
acting upon the instructions of the Required Lenders, shall do the same on
behalf of the Lender Group), all of which are authorized by Borrowers:
(a) Declare all or any portion of the Obligations, whether evidenced
by this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable;
(b) Cease or restrict advancing money or extending credit to or for
the benefit of Borrowers under this Agreement, under any of the Loan Documents,
or under any other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other Loan Documents as to
any future liability or obligation of the Lender Group, but without affecting
any of the Agent's Liens in the Collateral and without affecting the
Obligations; and
(d) The Lender Group shall have all other rights and remedies
available at law or in equity or pursuant to any other Loan Document.
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in Section 7.4 or Section 7.5, in addition to the remedies
set forth above, without any notice to Borrowers or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations then outstanding, together with all accrued and unpaid interest
thereon and all fees and all other amounts due under this Agreement and the
other Loan Documents, shall automatically and immediately become due and
payable, without presentment, demand, protest, or notice of any kind, all of
which are expressly waived by Borrowers.
8.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group under
this Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all
34
other rights and remedies not inconsistent herewith as provided under the Code,
by law, or in equity. No exercise by the Lender Group of one right or remedy
shall be deemed an election, and no waiver by the Lender Group of any Event of
Default shall be deemed a continuing waiver. No delay by the Lender Group shall
constitute a waiver, election, or acquiescence by it.
9. TAXES AND EXPENSES.
If any Borrower or any of its Restricted Subsidiaries fails to pay any
monies (whether taxes, assessments, insurance premiums, or, in the case of
leased properties or assets, rents or other amounts payable under such leases)
due to third Persons, or fails to make any deposits or furnish any required
proof of payment or deposit, all as required under the terms of this Agreement,
then, Agent, in its sole discretion and without prior notice to such Person, may
do any or all of the following: (a) except for payments which are the subject of
a Permitted Protest, make payment of the same or any part thereof, or (b) in the
case of the failure to comply with Section 5.8 hereof, obtain and maintain
insurance policies of the type described in Section 5.8 and take any action with
respect to such policies as Agent deems prudent in its Permitted Discretion. Any
such amounts paid by Agent shall constitute Lender Group Expenses and any such
payments shall not constitute an agreement by the Lender Group to make similar
payments in the future or a waiver by the Lender Group of any Event of Default
under this Agreement. Except in connection with payments made by Agent pursuant
to clause (a) above, Agent need not inquire as to, or contest the validity of,
any such expense, tax, or Lien and the receipt of the usual official notice for
the payment thereof shall be conclusive evidence that the same was validly due
and owing.
10. WAIVERS; INDEMNIFICATION.
10.1 DEMAND; PROTEST; ETC. Each Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which any Borrower may in any way be liable.
10.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Each Borrower hereby
agrees that: (a) so long as Agent complies with its obligations, if any, under
the Code, the Lender Group shall not in any way or manner be liable or
responsible for: (i) the safekeeping of the Collateral, (ii) any loss or damage
thereto occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrowers.
10.3 INDEMNIFICATION. Each Borrower shall pay, indemnify, defend, and hold
the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an "Indemnified Person") harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, liabilities, fines, costs, penalties and damages,
and all reasonable fees and disbursements of attorneys, experts and consultants
and other costs and expenses actually incurred in connection therewith or in
connection with the enforcement of this indemnification (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration (including any restructuring or workout with respect hereto) of
this Agreement, any of the other Loan Documents, or the transactions
contemplated hereby or thereby or the monitoring of Borrowers' and their
respective Restricted Subsidiaries' compliance with the terms of the Loan
Documents, (b) with respect to any investigation, litigation, or proceeding
related to this Agreement, any other Loan Document, or the use of the proceeds
of the credit provided hereunder (irrespective of whether any Indemnified Person
is a party thereto), or any act, omission, event, or circumstance in any manner
related thereto, and (c) in connection with or arising out of any presence or
release of Hazardous Materials at, on, under, to or from any assets or
properties owned, leased or operated by any Borrower or any of its Subsidiaries
or any Environmental Actions, Environmental Liabilities and Costs or Remedial
Actions related in any way to any such assets or properties of
35
any Borrower or any of its Subsidiaries (all the foregoing, collectively, the
"Indemnified Liabilities") provided, however, that any claim with respect to
taxes should be governed solely by Section 15.11. The foregoing to the contrary
notwithstanding, Borrowers shall have no obligation to any Indemnified Person
under this Section 10.3 with respect to any Indemnified Liability that a court
of competent jurisdiction finally determines to have resulted from the gross
negligence or willful misconduct of such Indemnified Person. This provision
shall survive the termination of this Agreement and the repayment of the
Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which
Borrowers were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Borrowers with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.
11. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands by
Borrowers or Agent to the other relating to this Agreement or any other Loan
Document shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as Parent, Administrative Borrower or Agent, as applicable, may
designate to each other in accordance herewith), or telefacsimile to Borrowers
in care of Administrative Borrower or to Agent, as the case may be, at its
address set forth below:
If to Parent or Administrative XX XXXX'X CORPORATION.
Borrower:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Fax No.: 000-000-0000
with copies to: GENSTAR CAPITAL, L.P.
Xxxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Gold
Fax No.: (000) 000-0000
and
WEIL, GOTSHAL & XXXXXX LLP
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax No.: (000) 000-0000
36
If to Agent: XXXXX FARGO FOOTHILL, INC.
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance Manager
Fax No.: (000) 000-0000
with copies to: MOSES & SINGER LLP
The Chrysler Building
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax No.: (000) 000-0000
Agent and Borrowers may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other party. All notices or demands sent in accordance with this Section 11,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail or, where permitted by law, transmitted by telefacsimile or
any other method set forth above.
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER
PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION
WHERE AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER
PROPERTY MAY BE FOUND. EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP WAIVE,
TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 12(B).
(c) EACH BORROWER AND EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. EACH BORROWER AND EACH
MEMBER OF THE LENDER GROUP REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH
KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH
37
LEGAL COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED
AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
13.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may assign and delegate to one or more assignees (each
an "Assignee") that are Eligible Transferees all, or any ratable part of all, of
the Obligations, the Commitments and the other rights and obligations of such
Lender hereunder and under the other Loan Documents, in a minimum amount of
$5,000,000; provided, however, that Borrowers and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower and Agent by such Lender
and the Assignee, (ii) such Lender and its Assignee have delivered to
Administrative Borrower and Agent an Assignment and Acceptance, and (iii) the
assigning Lender or Assignee has paid to Agent for Agent's separate account a
processing fee in the amount of $3,500. Anything contained herein to the
contrary notwithstanding, the payment of any fees shall not be required and the
Assignee need not be an Eligible Transferee if such assignment is in connection
with any merger, consolidation, sale, transfer, or other disposition of all or
any substantial portion of the business or loan portfolio of the assigning
Lender.
(b) From and after the date that Agent notifies the assigning Lender
(with a copy to Administrative Borrower) that it has received an executed
Assignment and Acceptance and payment of the above-referenced processing fee and
the satisfaction of the other conditions in Section 13.1(a), (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (except
with respect to Section 10.3 hereof) and be released from any future obligations
under this Agreement (and in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement and the other Loan Documents, such Lender shall cease to be
a party hereto and thereto), and such assignment shall effect a novation between
Borrowers and the Assignee; provided, however, that nothing contained herein
shall release any assigning Lender from obligations that survive the termination
of this Agreement, including such assigning Lender's obligations under Article
16 and Section 16.7 of this Agreement.
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance or observance by Borrowers of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (iii) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (iv) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (v) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are
38
reasonably incidental thereto, and (vi) such Assignee agrees that it will
perform all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d) Immediately upon Agent's receipt of the required processing fee
payment and the fully executed Assignment and Acceptance and the satisfaction of
the other conditions in Section 13.1(a), this Agreement shall be deemed to be
amended to the extent, but only to the extent, necessary to reflect the addition
of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time sell to one or more commercial banks,
financial institutions, or other Persons (a "Participant") participating
interests in all or any portion of its Obligations, the Commitment, and the
other rights and interests of that Lender (the "Originating Lender") hereunder
and under the other Loan Documents; provided, however, that (i) the Originating
Lender shall remain a "Lender" for all purposes of this Agreement and the other
Loan Documents and the Participant receiving the participating interest in the
Obligations, the Commitments, and the other rights and interests of the
Originating Lender hereunder shall not constitute a "Lender" hereunder or under
the other Loan Documents and the Originating Lender's obligations under this
Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no
Originating Lender shall transfer or grant any participating interest under
which the Participant has the right to approve any amendment to, or any consent
or waiver with respect to, this Agreement or any other Loan Document, except to
the extent such amendment to, or consent or waiver with respect to this
Agreement or of any other Loan Document would (A) extend the final maturity date
of the Obligations hereunder in which such Participant is participating, (B)
reduce the interest rate applicable to the Obligations hereunder in which such
Participant is participating, (C) release all or substantially all of the
Collateral or guaranties (except to the extent expressly provided herein or in
any of the Loan Documents) supporting the Obligations hereunder in which such
Participant is participating, (D) postpone the payment of, or reduce the amount
of, the interest or fees payable to such Participant through such Lender, or (E)
change the amount or due dates of scheduled principal repayments or prepayments
or premiums, and (v) all amounts payable by Borrowers hereunder shall be
determined as if such Lender had not sold such participation, except that, if
amounts outstanding under this Agreement are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of set off in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement. The rights of any Participant
only shall be derivative through the Originating Lender with whom such
Participant participates and no Participant shall have any rights under this
Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Borrowers, the Collections of Borrowers or their respective
Subsidiaries, the Collateral, or otherwise in respect of the Obligations. No
Participant shall have the right to participate directly in the making of
decisions by the Lenders among themselves.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may, subject to the provisions of
Section 16.7, disclose all documents and information which it now or hereafter
may have relating to Borrowers and their respective Restricted Subsidiaries and
their respective businesses.
(g) Any other provision in this Agreement notwithstanding, any Lender
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Bank or U.S.
Treasury Regulation 31 CFR Section 203.24, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
39
(h) Agent (on behalf of Borrowers) shall maintain, or cause to be
maintained, a register (the "Register") on which it enters the name of a Lender
as the registered owner of each Obligation held by such Lender. Other than in
connection with an assignment by a Lender of all or any portion of its
Commitment to an Affiliate of such Lender (i) a Registered Loan may be assigned
or sold in whole or in part only by registration of such assignment or sale on
the Register and (ii) any assignment or sale of all or part of such Registered
Loan may be effected only by registration of such assignment or sale on the
Register, together with the surrender of any note, if any, evidencing the same
duly endorsed by (or accompanied by a written instrument of assignment or sale
duly executed by) the holder of such note, if any, whereupon, at the request of
the designated assignee(s) or transferee(s), one or more new notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan, Borrowers shall treat the Person in whose name such Loan is registered as
the owner thereof for the purpose of receiving all payments thereon and for all
other purposes, notwithstanding notice to the contrary. In the case of any
assignment by a Lender of all or any portion of its Commitment to an Affiliate
of such Lender, and which assignment is not recorded in the Register, the
assigning Lender, on behalf of Borrowers, shall maintain a register comparable
to the Register.
13.2 SUCCESSORS. This Agreement shall bind and inure to the benefit of
the respective successors and assigns of each of the parties; provided, however,
that Borrowers may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void ab initio. No consent to assignment by the Lenders shall
release any Borrower from its Obligations. A Lender may assign this Agreement
and the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to Section 13.1 hereof and, except as expressly required pursuant to
Section 13.1 hereof, no consent or approval by any Borrower is required in
connection with any such assignment.
14. AMENDMENTS; WAIVERS.
14.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by Borrowers or any of their respective Restricted Subsidiaries
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by Agent at the written request of the Required
Lenders) and Administrative Borrower (on behalf of all Loan Parties) and then
any such waiver or consent shall be effective, but only in the specific instance
and for the specific purpose for which given; provided, however, that no such
waiver, amendment, or consent shall, unless in writing and signed by all of the
Lenders affected thereby and Administrative Borrower (on behalf of all Loan
Parties), do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any other
Loan Document for any payment of principal, interest, fees, or other amounts due
hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any loan or
other extension of credit hereunder, or reduce any fees or other amounts payable
hereunder or under any other Loan Document,
(d) change the Pro Rata Share that is required to take any action
hereunder,
(e) amend or modify this Section or any provision of this Agreement
providing for consent or other action by all Lenders,
(f) other than as permitted by Section 15.12, release Agent's Lien in
and to any of the Collateral,
(g) change the definition of "Required Lenders" or "Pro Rata Share",
40
(h) contractually subordinate any of the Agent's Liens,
(i) release any Borrower or any Guarantor from any obligation for the
payment of money, or
(j) amend any of the provisions of Section 15.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent or Issuing Lender, as applicable, affect
the rights or duties of Agent or Issuing Lender, as applicable, under this
Agreement or any other Loan Document. The foregoing notwithstanding, any
amendment, modification, waiver, consent, termination, or release of, or with
respect to, any provision of this Agreement or any other Loan Document that
relates only to the relationship of the Lender Group among themselves, and that
does not affect the rights or obligations of Borrowers, shall not require
consent by or the agreement of Borrowers.
14.2 REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or Agent hereunder
requires the unanimous consent, authorization, or agreement of all Lenders, and
a Lender ("Holdout Lender") fails to give its consent, authorization, or
agreement, then Agent, upon at least 5 Business Days prior irrevocable notice to
the Holdout Lender, may permanently replace the Holdout Lender with one or more
substitute Lenders (each, a "Replacement Lender"), and the Holdout Lender shall
have no right to refuse to be replaced hereunder. Such notice to replace the
Holdout Lender shall specify an effective date for such replacement, which date
shall not be later than 15 Business Days after the date such notice is given.
(b) Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance, subject only to the Holdout Lender being repaid its share of the
outstanding Obligations (including an assumption of its Pro Rata Share of the
Risk Participation Liability) without any premium or penalty of any kind
whatsoever. If the Holdout Lender shall refuse or fail to execute and deliver
any such Assignment and Acceptance prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance. The replacement of any Holdout Lender shall be
made in accordance with the terms of Section 13.1. Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments,
and the other rights and obligations of the Holdout Lender hereunder and under
the other Loan Documents, the Holdout Lender shall remain obligated to make the
Holdout Lender's Pro Rata Share of LC Obligations, in an amount equal to its Pro
Rata Share of the Risk Participation Liability of such Letter of Credit.
14.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Borrowers or any of
their respective Restricted Subsidiaries of any provision of this Agreement.
Agent's and each Lender's rights under this Agreement and the other Loan
Documents will be cumulative and not exclusive of any other right or remedy that
Agent or any Lender may have.
15. AGENT; THE LENDER GROUP.
15.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby designates
and appoints WFF as its representative under this Agreement and the other Loan
Documents and each Lender hereby irrevocably authorizes Agent to execute and
deliver each of the other Loan Documents on its behalf and to take such other
action on its behalf under the provisions of this Agreement and each other Loan
Document and to
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exercise such powers and perform such duties as are expressly delegated to Agent
by the terms of this Agreement or any other Loan Document, together with such
powers as are reasonably incidental thereto. Agent agrees to act as such on the
express conditions contained in this Section 15. The provisions of this Section
15 (other than the proviso to Section 15.11(a)) are solely for the benefit of
Agent, and the Lenders, and Borrowers and their respective Restricted
Subsidiaries shall have no rights as a third party beneficiary of any of the
provisions contained herein. Any provision to the contrary contained elsewhere
in this Agreement or in any other Loan Document notwithstanding, Agent shall not
have any duties or responsibilities, except those expressly set forth herein,
nor shall Agent have or be deemed to have any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "Agent" is for convenience only, that WFF is
merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with the Loan Documents and its customary
business practices, ledgers and records reflecting the status of the
Obligations, the Collateral, the Collections of Borrowers and their respective
Restricted Subsidiaries, and related matters, (b) execute or file any and all
financing or similar statements or notices, amendments, renewals, supplements,
documents, instruments, proofs of claim, notices and other written agreements
with respect to the Loan Documents, (c) make extensions of credit, for itself or
on behalf of Lenders as provided in the Loan Documents, (d) exclusively receive,
apply, and distribute the Collections of Borrowers and their respective
Restricted Subsidiaries as provided in the Loan Documents, (e) open and maintain
such bank accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections of Borrowers and their
respective Restricted Subsidiaries, (f) perform, exercise, and enforce any and
all other rights and remedies of the Lender Group with respect to the Loan
Parties, the Obligations, the Collateral, the Collections of Borrowers and their
respective Restricted Subsidiaries, or otherwise related to any of same as
provided in the Loan Documents, and (g) incur and pay such Lender Group Expenses
as Agent may deem necessary or appropriate for the performance and fulfillment
of its functions and powers pursuant to the Loan Documents.
15.2 DELEGATION OF DUTIES. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
15.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (a) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Borrower or any Subsidiary or
Affiliate of any Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of any Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the books and records or properties of Borrowers or the
books or records or properties of any of Borrowers' Subsidiaries or Affiliates.
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15.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Borrowers or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice of legal counsel and until such advice is received, Agent shall act, or
refrain from acting, as it deems reasonably advisable. If Agent so requests, it
shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense that may be incurred by it by reason of taking
or continuing to take any such action. Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the requisite
Lenders and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Lenders.
15.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders and, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Administrative
Borrower referring to this Agreement, describing such Default or Event of
Default, and stating that such notice is a "notice of default." Agent promptly
will notify the Lenders of its receipt of any such notice or of any Event of
Default of which Agent has actual knowledge. If any Lender obtains actual
knowledge of any Event of Default, such Lender promptly shall notify the other
Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 15.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 8; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
15.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrowers
and their respective Subsidiaries or Affiliates, shall be deemed to constitute
any representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person party to a Loan Document, and
all applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to Borrowers. Each Lender also represents that it will, independently and
without reliance upon any Agent-Related Person and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigations as
it deems necessary to inform itself as to the business, prospects, operations,
property, financial and other condition and creditworthiness of Borrowers and
any other Person party to a Loan Document. Except for notices, reports, and
other documents expressly herein required to be furnished to the Lenders by
Agent, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
Borrowers and any other Person party to a Loan Document that may come into the
possession of any of the Agent-Related Persons.
15.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the performance and fulfillment of its functions, powers, and obligations
pursuant to the Loan Documents, including court costs, attorneys fees and
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expenses, fees and expenses of financial accountants, advisors, consultants, and
appraisers, costs of collection by outside collection agencies, auctioneer fees
and expenses, and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to this Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
the Collections of Borrowers and their respective Restricted Subsidiaries
received by Agent to reimburse Agent for such out-of-pocket costs and expenses
prior to the distribution of any amounts to Lenders. In the event Agent is not
reimbursed for such costs and expenses from the Collections of Borrowers and
their respective Restricted Subsidiaries received by Agent, each Lender hereby
agrees that it is and shall be obligated to pay to or reimburse Agent for the
amount of such Lender's Pro Rata Share thereof. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent-Related Persons (to the extent not reimbursed by or on behalf of Borrowers
and without limiting the obligation of Borrowers to do so), according to their
Pro Rata Shares, from and against any and all Indemnified Liabilities; provided,
however, that no Lender shall be liable for the payment to any Agent-Related
Person of any portion of such Indemnified Liabilities resulting solely from such
Person's gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender shall reimburse Agent upon demand for such Lender's Pro
Rata Share of any costs or out of pocket expenses (including reasonable
attorneys, accountants, advisors, and consultants fees and expenses) incurred by
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment, or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein or therein, to the extent that Agent is
not reimbursed for such expenses by or on behalf of Borrowers. The undertaking
in this Section shall survive the payment of all Obligations hereunder and the
resignation or replacement of Agent.
15.8 AGENT IN INDIVIDUAL CAPACITY. WFF and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Borrowers and their
respective Subsidiaries and Affiliates and any other Person party to any Loan
Documents as though WFF were not Agent hereunder, and, in each case, without
notice to or consent of the other members of the Lender Group. The other members
of the Lender Group acknowledge that, pursuant to such activities, WFF or its
Affiliates may receive information regarding Borrowers or their respective
Affiliates and any other Person party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrowers or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall not be under any obligation to provide such
information to them. The terms "Lender" and "Lenders" include WFF in its
individual capacity.
15.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice to the
Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 15 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
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15.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their respective Subsidiaries and Affiliates and any other Person
party to any Loan Documents as though such Lender were not a Lender hereunder
without notice to or consent of the other members of the Lender Group. The other
members of the Lender Group acknowledge that, pursuant to such activities, such
Lender and its respective Affiliates may receive information regarding Borrowers
or their Affiliates and any other Person party to any Loan Documents that is
subject to confidentiality obligations in favor of Borrowers or such other
Person and that prohibit the disclosure of such information to the Lenders, and
the Lenders acknowledge that, in such circumstances (and in the absence of a
waiver of such confidentiality obligations, which waiver such Lender will use
its reasonable best efforts to obtain), such Lender shall not be under any
obligation to provide such information to them.
15.11 WITHHOLDING TAXES.
(a) All payments made by any Borrower hereunder or under any note or
other Loan Document will be made without setoff, counterclaim, or other defense.
In addition, except as provided in this Section, all such payments will be made
free and clear of, and without deduction or withholding for, any present or
future Taxes, and in the event any deduction or withholding of Taxes is
required, each Borrower shall comply with the penultimate sentence of this
Section 15.11(a). "Taxes" shall mean, any taxes, levies, imposts, duties, fees,
assessments or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding (i) any tax imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein measured by or based on the net income, capital, receipts or profits of
any Lender, (ii) franchise or similar taxes, (iii) any non-United States taxes
imposed by the jurisdictions under the laws of which the Lender or Agent, as the
case may be, is organized, conducts business or has a present or former
connection (other than by reason of the transactions contemplated hereby or by
the other Loan Documents), or any political subdivision thereof, in effect on
the Closing Date (or, in the case of (A) an Assignee, the date of the Assignment
and Acceptance, (B) a successor Lender, the date such successor Lender becomes a
Lender hereunder and (C) a successor Agent, the date of the appointment of such
Agent) applicable to such Lender or Agent, as the case may be, but not excluding
any United States withholding tax payable with respect to interest arising under
any Loan Document as a result of any change in such laws occurring after the
Closing Date (or the date of such Assignment and Acceptance, the date such
successor Lender becomes a Lender or the date of the appointment of such Agent),
(iv) any taxes that are attributable to such Lender's or Agent's failure to
comply with the requirements of Section 15.11(b) and (v) all liabilities,
penalties and interest with respect to any of the forgoing excluded taxes) and
all interest, penalties or similar liabilities with respect thereto. If any
Taxes are so levied or imposed, each Borrower agrees to pay the full amount of
such Taxes and such additional amounts as may be necessary so that every payment
of all amounts due under this Agreement, any note, or Loan Document, including
any amount paid pursuant to this Section 15.11(a) after withholding or deduction
for or on account of any Taxes, will not be less than the amount provided for
herein; provided, however, that Borrowers shall not be required to increase any
such amounts if the increase in such amount payable results from Agent's or such
Lender's own willful misconduct or gross negligence (as finally determined by a
court of competent jurisdiction). Each Borrower will furnish to Agent as
promptly as is commercially reasonable after the date the payment of any Tax is
due pursuant to applicable law certified copies of any tax receipts provided by
the taxing authority evidencing such payment by any Borrower.
(b) (i) Each Lender, Assignee, successor Lender, Agent or successor
Agent that is not a "United States person" within the meaning of Section
7701(a)(30) of the IRC (each, a "Foreign Lender") shall deliver to the
Administrative Borrower and Agent, on or prior to the date which is fifteen (15)
Business Days after the Closing Date (or upon accepting an assignment of an
interest herein), two duly signed, properly completed copies of either IRS Form
W-8BEN or any successor thereto (relating to such Foreign Lender and entitling
it to an exemption from, or reduction of, United States withholding tax on all
payments to be made to such Foreign Lender by a Borrower or any other Loan Party
pursuant to this Agreement or any other Loan
45
Document) or IRS Form W-8ECI or any successor thereto (relating to all payments
to be made to such Foreign Lender by a Borrower or any other Loan Party pursuant
to this Agreement or any other Loan Document) or such other evidence reasonably
satisfactory to Administrative Borrower and Agent that such Foreign Lender is
entitled to an exemption from, or reduction of, United States withholding tax,
including any exemption pursuant to Section 881(c) of the IRC, and in the case
of a Foreign Lender claiming such an exemption under Section 881(c) of the IRC,
a certificate that establishes in writing to the Administrative Borrower and the
Administrative Agent that such Foreign Lender is not (i) a "bank" as defined in
Section 881(c)(3)(A) of the IRC, (ii) a 10-percent shareholder within the
meaning of Section 871(h)(3)(B) of the IRC, or (iii) a Controlled Foreign
Corporation related to a Borrower with the meaning of Section 864(d) of the IRC.
Thereafter and from time to time, each such Foreign Lender shall (A) within a
commercially reasonable period submit to the Administrative Borrower and Agent
such additional duly and properly completed and signed copies of one or more of
such forms or certificates (or such successor forms or certificates as shall be
adopted from time to time by the relevant United States taxing authorities) as
may then be available under then current United States laws and regulations to
avoid, or such evidence as is reasonably satisfactory to the Administrative
Borrower and Agent of any available exemption from, or reduction of, United
States withholding taxes in respect of all payments to be made to such Foreign
Lender by a Borrower or other Loan Party pursuant to this Agreement, or any
other Loan Document, in each case, (1) on or before the date that any such form,
certificate or other evidence expires or becomes obsolete, (2) after the
occurrence of any event requiring a change in the most recent form, certificate
or evidence previously delivered by it to the Administrative Borrower and Agent
and (3) from time to time thereafter if reasonably requested by the
Administrative Borrower or the Administrative Agent, and (B) within a
commercially reasonable period notify the Administrative Borrower and Agent of
any change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(ii) The Borrowers shall not be required to pay any additional
amount or any indemnity payment to (A) any Foreign Lender with respect to any
taxes required to be deducted or withheld solely on the basis of the
information, certificates or statements of exemption such Lender transmits
pursuant to this Section 15.11(b) or (B) any Lender if such Lender shall have
failed to satisfy the foregoing provisions of this Section 15.11(b).
(c) If a Lender claims an exemption from withholding tax in a
jurisdiction other than the United States, Lender agrees with and in favor of
Agent and Borrowers, to deliver to Agent any such form or forms, as may be
required under the laws of such jurisdiction as a condition to exemption from,
or reduction of, foreign withholding or backup withholding tax before receiving
its first payment under this Agreement and at any other time reasonably
requested by Agent or Administrative Borrower.
Lender agrees promptly to notify Agent and Administrative Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (b)
or (c) of this Section 15.11 are not delivered to Agent, then Agent may withhold
from any interest payment to such Lender not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the United
States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender due to a
failure on the part of the Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify and hold Agent harmless for all amounts paid, directly or
indirectly, by Agent, as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
under this Section 15.11, together with all costs and expenses (including
attorneys fees and
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expenses). The obligation of the Lenders under this subsection shall survive the
payment of all Obligations and the resignation or replacement of Agent.
(f) Each Lender agrees that, upon the occurrence of any event giving
rise to the operation of Section 15.11(a) with respect to such Lender, it will,
if requested by the Administrative Borrower, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another lending
office for any loans affected by such event with the object of avoiding the
consequences of such event; provided, that such designation is made on terms
that cause such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and provided, further, that nothing in this Section
shall affect or postpone any of the obligations of the Borrowers or the rights
of any Lender pursuant to Section 15.11(a). In determining whether designating
another lending office would cause such Lender or its lending office(s) to
suffer economic disadvantage, such Lender shall disregard any economic
disadvantage that the Administrative Borrower agrees, in form and substance
reasonably satisfactory to such Lender, to indemnify and hold such Lender
harmless therefrom. If, after such reasonable efforts by such Lender, such
Lender does not so designate a different one of its lending offices so as to
avoid the consequences of such event, then the Administrative Borrower may, at
its sole expense and effort, upon notice to such Lender and the Agent, require
such Lender to assign and delegate, without recourse, all its interests, rights
and obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment, and which assignee shall be reasonably acceptable to Agent). A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling such Borrower to require such assignment and delegation
cease to apply.
15.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its option and
in its sole discretion, to release any Lien on any Collateral (i) upon the
termination of the Commitments and payment and satisfaction in full by Borrowers
of all non-contingent Obligations, (ii) constituting property being sold or
disposed of if a release is required or desirable in connection therewith and if
Administrative Borrower certifies to Agent that the sale or disposition is
permitted under Section 6.4 of this Agreement or the other Loan Documents (and
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which none of any Borrower or any of its
Restricted Subsidiaries owned any interest at the time the Agent's Lien was
granted nor at any time thereafter, or (iv) constituting property leased to a
Borrower or any of its Restricted Subsidiaries under a lease that has expired or
is terminated in a transaction permitted under this Agreement. Except as
provided above, Agent will not execute and deliver a release of any Lien on any
Collateral without the prior written authorization of (y) if the release is of
all or substantially all of the Collateral, all of the Lenders, or (z)
otherwise, the Required Lenders. Upon request by Agent or Administrative
Borrower at any time, the Lenders will confirm in writing Agent's authority to
release any such Liens on particular types or items of Collateral pursuant to
this Section 15.12; provided, however, that (1) Agent shall not be required to
execute any document necessary to evidence such release on terms that, in
Agent's opinion, would expose Agent to liability or create any obligation or
entail any consequence other than the release of such Lien without recourse,
representation, or warranty, and (2) such release shall not in any manner
discharge, affect, or impair the Obligations or any Liens (other than those
expressly being released) upon (or obligations of Borrowers in respect of) all
interests retained by Borrowers or any of their respective Restricted
Subsidiaries, including, the proceeds of any sale, all of which shall continue
to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the Lenders to
assure that the Collateral exists or is owned by Borrowers or any of their
respective Restricted Subsidiaries or is cared for, protected, or insured or has
been encumbered, or that the Agent's Liens have been properly or sufficiently or
lawfully created, perfected, protected, or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and powers granted or available to Agent pursuant to any of
the Loan Documents, it
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being understood and agreed that in respect of the Collateral, or any act,
omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent's own interest in the Collateral in its capacity as
one of the Lenders and that Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing, except as otherwise
provided herein.
15.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the express
written consent of Agent, set off against the Obligations, any amounts owing by
such Lender to Borrowers or any of their respective Restricted Subsidiaries or
any deposit accounts of Borrowers or any of their respective Restricted
Subsidiaries now or hereafter maintained with such Lender. Each of the Lenders
further agrees that it shall not, unless specifically requested to do so in
writing by Agent, take or cause to be taken any action, including, the
commencement of any legal or equitable proceedings, to foreclose any Lien on, or
otherwise enforce any security interest in, any of the Collateral.
(b) If, at any time or times any Lender shall receive (i) by payment,
foreclosure, setoff, or otherwise, any proceeds of Collateral or any payments
with respect to the Obligations, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (A) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (B) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that to the extent that such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
15.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected only by possession or
control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent's request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent's instructions.
15.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by Agent to
the Lenders shall be made by bank wire transfer of immediately available funds
pursuant to such wire transfer instructions as each party may designate for
itself by written notice to Agent. Concurrently with each such payment, Agent
shall identify whether such payment (or any portion thereof) represents
principal, premium, fees, or interest of the Obligations.
15.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member of
the Lender Group authorizes and directs Agent to enter into this Agreement and
the other Loan Documents. Each member of the Lender Group agrees that any action
taken by Agent in accordance with the terms of this Agreement or the other Loan
Documents relating to the Collateral and the exercise by Agent of its powers set
forth therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
48
15.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY; DISCLAIMERS BY
LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to this Agreement,
each Lender:
(a) is deemed to have requested that Agent furnish such Lender,
promptly after it becomes available, a copy of each field audit or examination
report (each a "Report" and collectively, "Reports") prepared by or at the
request of Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that neither the Borrowers nor
the Agent (i) make any representation or warranty as to the accuracy of any
Report, and (ii) shall be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrowers
and their respective Restricted Subsidiaries and will rely significantly upon
the books and records of Borrowers and their respective Restricted Subsidiaries,
as well as on representations of Borrowers' and their respective Restricted
Subsidiaries' personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Borrowers and their respective Restricted Subsidiaries and
their operations, assets, and existing and contemplated business plans in a
confidential manner in accordance with Section 16.7, and
(e) without limiting the generality of any other indemnification
provision contained in this Agreement, agrees: (i) to hold Agent and any such
other Lender preparing a Report harmless from any action the indemnifying Lender
may take or fail to take or any conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Borrowers; and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers and their respective Restricted Subsidiaries to
Agent that has not been contemporaneously provided by Borrowers and their
respective Restricted Subsidiaries to such Lender, and, upon receipt of such
request, Agent promptly shall provide a copy of same to such Lender, (y) to the
extent that Agent is entitled, under any provision of the Loan Documents, to
request additional reports or information from Borrowers and their respective
Restricted Subsidiaries, any Lender may, from time to time, reasonably request
Agent to exercise such right as specified in such Lender's notice to Agent,
whereupon Agent promptly shall request of the applicable Person the additional
reports or information reasonably specified by such Lender, and, upon receipt
thereof from the applicable Person, Agent promptly shall provide a copy of same
to such Lender, and (z) any time that Agent renders to Administrative Borrower a
statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.
15.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain of
the Loan Documents now or hereafter may have been or will be executed only by or
in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their Commitments. Nothing
contained herein shall confer upon any Lender any interest in, or subject any
Lender to any liability for, or in respect of, the business, assets, profits,
losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its
49
Participants of any matters relating to the Loan Documents to the extent any
such notice may be required, and no Lender shall have any obligation, duty, or
liability to any Participant of any other Lender. Except as provided in Section
15.7, no member of the Lender Group shall have any liability for the acts of any
other member of the Lender Group. No Lender shall be responsible to any Borrower
or any other Person for any failure by any other Lender to fulfill its
obligations to make credit available hereunder, nor to advance for it or on its
behalf in connection with its Commitment, nor to take any other action on its
behalf hereunder or in connection with the financing contemplated herein.
16. GENERAL PROVISIONS.
16.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by each Borrower, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
16.2 SECTION HEADINGS. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
16.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Borrowers,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
16.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
16.5 COUNTERPARTS; ELECTRONIC EXECUTION. This Agreement may be executed in
any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
16.6 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment
of the Obligations by any Borrower or any Guarantor or the transfer to the
Lender Group of any property should for any reason subsequently be declared to
be void or voidable under any state or federal law relating to creditors'
rights, including provisions of the Bankruptcy Code relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or
transfers of property (collectively, a "Voidable Transfer"), and if the Lender
Group is required to repay or restore, in whole or in part, any such Voidable
Transfer, or elects to do so upon the reasonable advice of its counsel, then, as
to any such Voidable Transfer, or the amount thereof that the Lender Group is
required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Lender Group related thereto, the liability
of Borrowers or such Guarantor automatically shall be revived, reinstated, and
restored and shall exist as though such Voidable Transfer had never been made.
16.7 CONFIDENTIALITY. Agent and Lenders each individually (and not jointly
or jointly and severally) agree that material, non-public information regarding
Borrowers and their respective Subsidiaries, their operations, assets, and
existing and contemplated business plans shall be treated by Agent and the
50
Lenders in a confidential manner, and shall not be disclosed by Agent and the
Lenders to Persons who are not parties to this Agreement, except: (a) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group for matters in connection with this Agreement, (b) to
Subsidiaries and Affiliates of any member of the Lender Group, provided that any
such Subsidiary or Affiliate shall have agreed to receive such information
hereunder subject to the terms of this Section 16.7, (c) as may be required by
statute, decision, or judicial or administrative order, rule, or regulation, (d)
as may be agreed to in advance by Parent or Administrative Borrower or its
Subsidiaries or as requested or required by any Governmental Authority pursuant
to any subpoena or other legal process, (e) as to any such information that is
or becomes generally available to the public (other than as a result of
prohibited disclosure by Agent or the Lenders or their respective Affiliates and
Subsidiaries), (f) in connection with any assignment, prospective assignment,
sale, prospective sale, participation or prospective participations, or pledge
or prospective pledge of any Lender's interest under this Agreement, provided
that any such assignee, prospective assignee, purchaser, prospective purchaser,
participant, prospective participant, pledgee, or prospective pledgee shall have
agreed in writing to receive such information hereunder and keep it confidential
subject to the terms of this Section, and (g) in connection with any litigation
or other adversary proceeding involving parties hereto which such litigation or
adversary proceeding involves claims related to the rights or duties of such
parties under this Agreement or the other Loan Documents. The provisions of this
Section 16.7 shall survive for 2 years after the payment in full of the
Obligations.
16.8 INTEGRATION. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
16.9 XX XXXX'X CORPORATION AS AGENT FOR BORROWERS. Each Borrower hereby
irrevocably appoints XX Xxxx'x Corporation as the borrowing agent and
attorney-in-fact for all Borrowers (the "Administrative Borrower") which
appointment shall remain in full force and effect unless and until Agent shall
have received prior written notice signed by each Borrower that such appointment
has been revoked and that another Loan Party has been appointed Administrative
Borrower. Each Borrower hereby irrevocably appoints and authorizes the
Administrative Borrower (a) to provide Agent with all notices with respect to
Term Loans and Letters of Credit obtained for the benefit of any Borrower and
all other notices and instructions under this Agreement and (b) to take such
action as the Administrative Borrower deems appropriate on its behalf to obtain
Term Loans and Letters of Credit and to exercise such other powers as are
reasonably necessary to carry out the purposes of this Agreement. It is
understood that the handling of the Loan Account and Collateral in a combined
fashion, as more fully set forth herein, is done solely as an accommodation to
Borrowers in order to utilize the collective borrowing powers of Borrowers in
the most efficient and economical manner and at their request, and that Lender
Group shall not incur liability to any Borrower as a result hereof. Each
Borrower expects to derive benefit, directly or indirectly, from the handling of
the Loan Account and the Collateral in a combined fashion since the successful
operation of each Borrower is dependent on the continued successful performance
of the integrated group. To induce the Lender Group to do so, and in
consideration thereof, each Borrower hereby jointly and severally agrees to
indemnify each member of the Lender Group and hold each member of the Lender
Group harmless against any and all liability, expense, loss or claim of damage
or injury, made against the Lender Group by any Borrower or by any third party
whosoever, arising from or incurred by reason of (a) the handling of the Loan
Account and Collateral as herein provided, (b) the Lender Group's relying on any
instructions of the Administrative Borrower, or (c) any other action taken by
the Lender Group hereunder or under the other Loan Documents, except that
Borrowers will have no liability to the relevant Agent-Related Person or
Lender-Related Person under this Section 16.9 with respect to any liability that
has been finally determined by a court of competent jurisdiction to have
resulted solely from the gross negligence or willful misconduct of such
Agent-Related Person or Lender-Related Person, as the case may be.
[Signature pages to follow.]
51
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
XX XXXX'X CORPORATION,
a Delaware corporation, as Parent and
a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: VP, CFO and Corporate Secretary
---------------------------------
XX XXXX'X INCORPORATED,
a Pennsylvania corporation, as a
Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: VP, CFO and Corporate Secretary
---------------------------------
PLANT ENGINEERING CONSULTANTS, LLC,
a Tennessee limited liability company,
as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: Treasurer and Secretary
---------------------------------
XX XXXX'X ENTERPRISES, INC.,
a Delaware corporation, as a Borrower
By: /s/ Xxxxxx X. Xxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxx
----------------------------------
Title: President and Treasurer
---------------------------------
[SIGNATURE PAGE OF CREDIT AGREEMENT]
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent and
as a Lender
By: /s/ Xxxxxxx X. Xxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxx, Xx.
----------------------------------
Title: VP
---------------------------------
[SIGNATURE PAGE OF CREDIT AGREEMENT]
TABLE OF CONTENTS
Page
----
1. DEFINITIONS AND CONSTRUCTION......................................... 1
1.1 Definitions.................................................... 1
1.2 Accounting Terms............................................... 2
1.3 Code........................................................... 2
1.4 Construction................................................... 2
1.5 Schedules and Exhibits......................................... 2
2. LOAN AND TERMS OF PAYMENT............................................ 2
2.1 Intentionally Omitted.......................................... 2
2.2 Term Loans..................................................... 2
2.3 Borrowing Procedures........................................... 3
2.4 Payments....................................................... 3
2.5 Intentionally Omitted.......................................... 6
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments,
and Calculations............................................... 6
2.7 Cash Management................................................ 7
2.8 Crediting Payments............................................. 8
2.9 Designated Account............................................. 8
2.10 Maintenance of Loan Account; Statements of Obligations......... 8
2.11 Fees........................................................... 8
2.12 Letters of Credit.............................................. 9
2.13 LIBOR Option................................................... 11
2.14 Capital Requirements........................................... 12
2.15 Joint and Several Liability of Borrowers....................... 13
3. CONDITIONS; TERM OF AGREEMENT........................................ 15
3.1 Conditions Precedent to the Initial Extension of Credit........ 15
3.2 Intentionally Omitted.......................................... 15
3.3 Term........................................................... 15
3.4 Effect of Termination.......................................... 15
3.5 Early Termination by Borrowers................................. 16
3.6 Conditions Subsequent to the Initial Extension of Credit....... 16
4. REPRESENTATIONS AND WARRANTIES....................................... 17
4.1 No Encumbrances................................................ 17
4.2 Eligible Accounts.............................................. 17
4.3 Eligible Inventory............................................. 17
-i-
TABLE OF CONTENTS
(continued)
Page
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4.4 Equipment...................................................... 17
4.5 Location of Inventory and Equipment............................ 17
4.6 Inventory Records.............................................. 17
4.7 State of Incorporation; Location of Chief Executive Office;
Organizational Identification Number; Commercial Tort Claims... 17
4.8 Due Organization and Qualification; Restricted Subsidiaries.... 18
4.9 Due Authorization; No Conflict................................. 18
4.10 Litigation..................................................... 20
4.11 No Material Adverse Change..................................... 20
4.12 Fraudulent Transfer............................................ 20
4.13 Employee Compliance............................................ 20
4.14 Environmental Condition........................................ 21
4.15 Intellectual Property.......................................... 21
4.16 Leases......................................................... 21
4.17 Deposit Accounts and Securities Accounts....................... 21
4.18 Complete Disclosure............................................ 21
4.19 Indebtedness................................................... 22
4.20 Material Contracts............................................. 22
5. AFFIRMATIVE COVENANTS................................................ 22
5.1 Accounting System.............................................. 22
5.2 Collateral Reporting........................................... 22
5.3 Financial Statements, Reports, Certificates.................... 22
5.4 Intentionally Omitted.......................................... 22
5.5 Inspection..................................................... 22
5.6 Maintenance of Properties...................................... 23
5.7 Taxes.......................................................... 23
5.8 Insurance...................................................... 23
5.9 Location of Inventory and Equipment............................ 24
5.10 Compliance with Laws........................................... 24
5.11 Leases......................................................... 24
5.12 Existence...................................................... 24
5.13 Environmental.................................................. 24
5.14 Intentionally Omitted.......................................... 25
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TABLE OF CONTENTS
(continued)
Page
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5.15 Control Agreements............................................. 25
5.16 Formation of Subsidiaries...................................... 25
5.17 Real Property.................................................. 25
5.18 ERISA Compliance............................................... 26
5.19 Payment of Senior Subordinated Notes........................... 26
6. NEGATIVE COVENANTS................................................... 27
6.1 Indebtedness................................................... 27
6.2 Liens.......................................................... 28
6.3 Restrictions on Fundamental Changes............................ 28
6.4 Disposal of Assets............................................. 29
6.5 Change Name.................................................... 29
6.6 Nature of Business............................................. 29
6.7 Prepayments and Amendments..................................... 29
6.8 Intentionally Omitted.......................................... 29
6.9 Intentionally Omitted.......................................... 29
6.10 Intentionally Omitted.......................................... 29
6.11 Fiscal Year.................................................... 29
6.12 Investments.................................................... 29
6.13 Transactions with Affiliates................................... 30
6.14 Use of Proceeds................................................ 30
6.15 Intentionally Omitted.......................................... 31
6.16 Financial Covenants............................................ 31
6.17 Acquisition Documents.......................................... 31
6.18 Intentionally omitted.......................................... 31
6.19 Governing Documents............................................ 31
6.20 Real Property Collateral....................................... 31
7. EVENTS OF DEFAULT.................................................... 32
8. THE LENDER GROUP'S RIGHTS AND REMEDIES............................... 34
8.1 Rights and Remedies............................................ 34
8.2 Remedies Cumulative............................................ 34
9. TAXES AND EXPENSES................................................... 34
10. WAIVERS; INDEMNIFICATION............................................. 35
10.1 Demand; Protest; etc........................................... 35
-iii-
TABLE OF CONTENTS
(continued)
Page
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10.2 The Lender Group's Liability for Collateral.................... 35
10.3 Indemnification................................................ 35
11. NOTICES.............................................................. 36
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER........................... 37
13. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS........................... 37
13.1 Assignments and Participations................................. 37
13.2 Successors..................................................... 39
14. AMENDMENTS; WAIVERS.................................................. 40
14.1 Amendments and Waivers......................................... 40
14.2 Replacement of Holdout Lender.................................. 40
14.3 No Waivers; Cumulative Remedies................................ 41
15. AGENT; THE LENDER GROUP.............................................. 41
15.1 Appointment and Authorization of Agent......................... 41
15.2 Delegation of Duties........................................... 42
15.3 Liability of Agent............................................. 42
15.4 Reliance by Agent.............................................. 42
15.5 Notice of Default or Event of Default.......................... 42
15.6 Credit Decision................................................ 43
15.7 Costs and Expenses; Indemnification............................ 43
15.8 Agent in Individual Capacity................................... 44
15.9 Successor Agent................................................ 44
15.10 Lender in Individual Capacity.................................. 44
15.11 Withholding Taxes.............................................. 44
15.12 Collateral Matters............................................. 47
15.13 Restrictions on Actions by Lenders; Sharing of Payments........ 47
15.14 Agency for Perfection.......................................... 48
15.15 Payments by Agent to the Lenders............................... 48
15.16 Concerning the Collateral and Related Loan Documents........... 48
15.17 Field Audits and Examination Reports; Confidentiality;
Disclaimers by Lenders; Other Reports and Information.......... 48
15.18 Several Obligations; No Liability.............................. 49
16. GENERAL PROVISIONS................................................... 49
16.1 Effectiveness.................................................. 49
-iv-
TABLE OF CONTENTS
(continued)
Page
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16.2 Section Headings............................................... 49
16.3 Interpretation................................................. 49
16.4 Severability of Provisions..................................... 50
16.5 Counterparts; Electronic Execution............................. 50
16.6 Revival and Reinstatement of Obligations....................... 50
16.7 Confidentiality................................................ 50
16.8 Integration.................................................... 51
16.9 XX Xxxx'x Corporation as Agent for Borrowers................... 51
-v-
EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule P-1 Permitted Liens
Schedule P-2 Permitted Investments
Schedule R-1 Real Property Collateral
Schedule 1.1 Definitions
Schedule 2.7(a) Cash Management Banks
Schedule 2.12 Existing Letters of Credit
Schedule 3.1 Conditions Precedent
Schedule 4.5(a) Inventory and Equipment Stored with Bailees or Warehousemen
Schedule 4.5(b) Locations of Inventory and Equipment
Schedule 4.7(a) States of Organization
Schedule 4.7(b) Chief Executive Offices
Schedule 4.7(c) Organizational Identification Numbers
Schedule 4.7(d) Commercial Tort Claims
Schedule 4.8(b) Capitalization of Borrowers
Schedule 4.8(c) Capitalization of Borrowers' Restricted Subsidiaries
Schedule 4.10 Litigation
Schedule 4.13(a) ERISA Plans
Schedule 4.14 Environmental Matters
Schedule 4.17 Deposit Accounts and Securities Accounts
Schedule 4.19 Permitted Indebtedness
Schedule 5.2 Collateral Reporting
Schedule 5.3 Financial Statements, Reports, Certificates
FINAL VERSION
EXHIBIT A-1
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Assignment Agreement") is
entered into as of ______________ between ______________________ ("Assignor"),
solely in its capacity as Lender, and _____________________ ("Assignee").
Reference is made to the Agreement described in Annex I hereto (the "Credit
Agreement"). Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Credit Agreement.
1. In accordance with the terms and conditions of Section 13 of the
Credit Agreement, the Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
the Assignor's rights and obligations under the Loan Documents as of the date
hereof with respect to the Obligations owing to the Assignor, and Assignor's
portion of the Commitments, all to the extent specified on Annex I.
2. The Assignor (a) represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any adverse claim and (ii) it has full power
and authority, and has taken all action necessary, to execute and deliver this
Assignment Agreement and to consummate the transactions contemplated hereby; (b)
makes no representation or warranty and assumes no responsibility with respect
to (i) any statements, representations or warranties made in or in connection
with the Loan Documents, or (ii) the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Loan Documents or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or any Guarantor or the performance or
observance by any Borrower or any Guarantor of any of their respective
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto, and (d) represents and warrants that the amount set
forth as the purchase price on Annex I represents the amount owed by Borrowers
to Assignor with respect to Assignor's share of the Term Loans and LC
Obligations hereunder, as reflected on Assignor's books and records.
3. The Assignee (a) confirms that it has received copies of the
Credit Agreement and the other Loan Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement; (b) agrees that it will,
independently and without reliance upon Agent, Assignor, or any other Lender,
based upon such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking any
action under the Loan Documents; (c) confirms that it is an Eligible Transferee;
(d) appoints and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under the Loan Documents as are delegated to Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; (e) agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender; [and (f) attaches the forms prescribed by the
Internal Revenue Service of the United States certifying as to the Assignee's
status for purposes of determining exemption from United States withholding
taxes with respect to all payments to be made to the Assignee under the Credit
Agreement or such other documents as are necessary to indicate that all such
payments are subject to such rates at a rate reduced by an applicable tax
treaty.]
4. Following the execution of this Assignment Agreement by the
Assignor and Assignee, the Assignor will deliver this Assignment Agreement to
the Agent for recording by the Agent. The effective date of this Assignment (the
"Settlement Date") shall be the latest to occur of (a) the date of the execution
and delivery hereof by the Assignor and the Assignee, (b) the receipt by Agent
for its sole and separate account a processing fee in the amount of $3,500 (if
required by the Credit Agreement), (c) the receipt of any required consent of
the Agent, and (d) the date specified in Annex I.
5. As of the Settlement Date (a) the Assignee shall be a party to
the Credit Agreement and, to the extent of the interest assigned pursuant to
this Assignment Agreement, have the rights and obligations of a Lender
thereunder and under the other Loan Documents, and (b) the Assignor shall, to
the extent of the interest assigned pursuant to this Assignment Agreement,
relinquish its rights and be released from its obligations under the Credit
Agreement and the other Loan Documents, provided, however, that nothing
contained herein shall release any assigning Lender from obligations that
survive the termination of this Assignment Agreement, including such assigning
Lender's obligations under Article 13, Article 15 and Section 16.7 of the Credit
Agreement.
6. Upon the Settlement Date, Assignee shall pay to Assignor the
purchase price (as set forth in Annex I). From and after the Settlement Date,
Agent shall make all payments that are due and payable to the holder of the
interest assigned hereunder (including payments of principal, interest, fees and
other amounts) to Assignor for amounts which have accrued up to but excluding
the Settlement Date and to Assignee for amounts which have accrued from and
after the Settlement Date. On the Settlement Date, Assignor shall pay to
Assignee an amount equal to the portion of any interest, fee, or any other
charge that was paid to Assignor prior to the Settlement Date on account of the
interest assigned hereunder and that are due and payable to Assignee with
respect thereto, to the extent that such interest, fee or other charge relates
to the period of time from and after the Settlement Date.
7. This Assignment Agreement may be executed in counterparts and by
the parties hereto in 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 Assignment Agreement may be executed and delivered
by telecopier or other facsimile transmission all with the same force and effect
as if the same were a fully executed and delivered original manual counterpart.
8. THIS ASSIGNMENT AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement and Annex I hereto to be executed by their respective officers, as of
the first date written above.
[NAME OF ASSIGNOR]
as Assignor
By: _______________________________________
Name:
Title:
[NAME OF ASSIGNEE]
as Assignee
By: _______________________________________
Name:
Title:
ACCEPTED THIS ___ DAY OF __________
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent
By: ________________________________
Name:
Title:
ANNEX FOR ASSIGNMENT AND ACCEPTANCE
ANNEX I
1. Borrowers: XX Xxxx'x Corporation, a Delaware corporation, XX Xxxx'x
Incorporated, a Pennsylvania corporation, Plant Engineering
Consultants, LLC, a Tennessee limited liability company, and
XX Xxxx'x Enterprises, Inc., a Delaware corporation
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of April 5, 2007, by and among
Borrowers, the lenders from time to time a party thereto (the
"Lenders"), Xxxxx Fargo Foothill, Inc., a California
corporation, as the arranger and administrative agent for the
Lenders
3. Date of Assignment Agreement: ____________
4. Amounts:
a. Assigned Amount of Commitment $ ____________
b. Assigned Amount of Term Loans $ ____________
c. Assigned Amount of LC Obligations $ ____________
5. Settlement Date: ____________
6. Purchase Price $ ____________
7. Notice and Payment Instructions, etc.
Assignee: Assignor:
________________________________ ________________________________
________________________________ ________________________________
________________________________ ________________________________
8. Agreed and Accepted:
[ASSIGNOR] [ASSIGNEE]
By: __________________________ By: ____________________________
Name: ________________________ Name: ______________________
Title: _______________________ Title: _____________________
Accepted:
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent
By: _________________________________
Name:
Title:
FINAL VERSION
EXHIBIT B-1
FORM OF BORROWING BASE CERTIFICATE
Xxxxx Fargo Foothill, Inc.
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance Manager
The undersigned, XX Xxxx'x Corporation, a Delaware corporation
("Parent"), pursuant to Schedule 5.2 of that certain Credit Agreement dated as
of April 5, 2007 (as amended, restated, amended and restated, modified,
supplemented, refinanced, renewed, or extended from time to time, the "Credit
Agreement"), entered into among Parent, its subsidiaries signatory thereto
(collectively with Parent, "Borrowers"), the lenders signatory thereto from time
to time and Xxxxx Fargo Foothill, Inc., a California corporation, as the
arranger and administrative agent (in such capacity, together with its
successors and assigns, if any, in such capacity, "Agent"), hereby certifies to
Agent that the following items, calculated in accordance with the terms and
definitions set forth in the Credit Agreement for such items are true and
correct in all material respects.
All initially capitalized terms used in this Borrowing Base
Certificate have the meanings set forth in the Credit Agreement unless
specifically defined herein.
[Remainder of page intentionally left blank.]
Effective Date of Calculation: ________________________
A. BORROWING BASE CALCULATION
1. Eligible Accounts
a. 85% of Eligible Accounts(1) $ _________
b. the amount, if any, of the Dilution Reserve $ _________
c. Item 1.a. minus Item 1.b $ _________
2. Eligible Inventory
a. 65% of the net book value of Eligible Inventory(2) $ _________
3. Eligible Equipment
a. 50% of the Eligible Equipment Book Value(3) $ _________
4. Borrowing Base (Item 1.c. plus Item 2.a. plus Item 3.a): $ _________
_____________
(1) See Annex A
(2) See Annex B
(3) See Annex C
- 2 -
Effective date of calculation: ___________
XX XXXX'X CORPORATION,
a Delaware corporation, as Administrative
Borrower
By: __________________________________
Name: __________________________
Title: __________________________
- 3 -
Annex A
Total Accounts: Accounts created by a Borrower in the ordinary course arising
out of sale of goods or rendition of services $ __________
less (without duplication)
Accounts that the Account Debtor (i) has failed to pay within 90
days (or, with respect to Accounts with selling terms of more than
60 days, 105 days) after the original invoice date, (ii) are more
than 60 days after the due date, or (iii) Accounts with selling
terms of more than 120 days, $ __________
Accounts owed by an Account Debtor (or its Affiliates) where 50% or
more of all Accounts owed by that Account Debtor (or its Affiliates)
are deemed ineligible under the immediately preceding clause $ __________
Accounts with respect to which the Account Debtor is an Affiliate of
any Borrower or an employee or agent of any Borrower or any
Affiliate of Borrower $ __________
Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or
return, a sale on approval, a xxxx and hold, or any other terms by
reason of which the payment by the Account Debtor may be conditional $ __________
Accounts that are not payable in Dollars $ __________
Accounts with respect to which the Account Debtor either (i) does
not maintain its chief executive office in the United States, or
(ii) is not organized under the laws of the United States or any
state thereof, or (iii) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or other
political subdivision thereof, or of any department, agency, public
corporation, or other instrumentality thereof, unless (x) the
Account is supported by an irrevocable letter of credit reasonably
satisfactory to Agent (as to form, substance, and issuer or domestic
confirming bank) that has been delivered to Agent and is directly
drawable by Agent, or (y) the Account is covered by credit insurance
in form, substance, and amount, and by an insurer, reasonably
satisfactory to Agent, $ __________
- 4 -
Accounts with respect to which the Account Debtor is the United
States or any department, agency, or instrumentality of the United
States or any state of the United States (exclusive, however, of
Accounts with respect to which the applicable Borrower has complied,
to the reasonable satisfaction of Agent, with the Assignment of
Claims Act, 31 USC Section 3727, or any similar state or local law,
if applicable), $ ___________
Accounts with respect to which the Account Debtor claims a credit
from any Borrower, has or has asserted a right of setoff, or has
disputed its obligation to pay all or any portion of the Account, to
the extent of such claim, right of setoff, or dispute, $ ___________
Accounts with respect to an Account Debtor whose total obligations
owing to Borrowers exceed 10% (such percentage, as applied to a
particular Account Debtor, being subject to reduction by Agent in
its Permitted Discretion if the creditworthiness of such Account
Debtor deteriorates) of all Eligible Accounts, to the extent of the
obligations owing by such Account Debtor in excess of such
percentage; provided, however, that as to the following Account
Debtor, a percentage limitation of 20% (in lieu of 10%) shall apply
for purposes hereof: Motion Industries; provided, further, however,
that, in each case, the amount of Eligible Accounts that are
excluded because they exceed the foregoing percentage shall be
determined by Agent based on all of the otherwise Eligible Accounts
prior to giving effect to any eliminations based upon the foregoing
concentration limit, $ ___________
Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, or as to which a Borrower has
received written notice of an imminent Insolvency Proceeding of such
Account Debtor, $ ___________
Accounts with respect to which the Account Debtor is located in a
state or jurisdiction (e.g., New Jersey, Minnesota, and West
Virginia) that requires, as a condition to access to the courts of
such jurisdiction, that a creditor qualify to transact business,
file a business activities report or other report or form, or take
one or more other actions, unless the applicable Borrower has so
qualified, filed such reports or forms, or taken such actions (and,
in each case, paid any required fees or other charges), except to
the extent that the applicable Borrower may qualify subsequently as
a foreign entity authorized to transact business in such state or
jurisdiction and gain access to such courts, without incurring any
cost or penalty viewed by Agent, in its Permitted Discretion, to be
significant in amount, and such later qualification cures any access
to such courts to enforce payment of such Account, $ ___________
- 5 -
Accounts, the collection of which, Agent, in its Permitted
Discretion, believes to be doubtful by reason of the Account
Debtor's financial condition, $ ___________
Accounts that are not subject to a valid and perfected first
priority Agent's Lien, $ ___________
Accounts with respect to which (i) the goods giving rise to such
Account have not been shipped and billed to the Account Debtor, or
(ii) the services giving rise to such Account have not been
performed and billed to the Account Debtor $ ___________
Accounts that represent the right to receive progress payments or
other advance xxxxxxxx that are due prior to the completion of
performance by the applicable Borrower of the subject contract for
goods or services. $ ___________
Total Excluded Accounts $ ___________
ELIGIBLE ACCOUNTS (TOTAL ACCOUNTS LESS TOTAL EXCLUDED ACCOUNTS): $ ___________
- 6 -
Annex B
1. Total Finished Goods Inventory: Inventory consisting of first quality
finished goods held for sale in the ordinary course of Borrowers' business $ ___________
less (without duplication)
Inventory which Borrower does not have good, valid, and marketable
title thereto $ ___________
Inventory not located at one of the locations in the continental
United States set forth on Schedule 4.5(a) or 4.5(b) to the Credit
Agreement (or in-transit from one such location to another such
location) $ ___________
Inventory not subject to a valid and perfected first priority
Agent's Lien $ ___________
Inventory consisting of goods returned or rejected by a Borrower's
customers $ ___________
Inventory consisting of goods that are obsolete or slow moving,
work-in-process, raw materials or goods that constitute spare parts,
packaging and shipping materials, supplies used or consumed in
Borrower's business, xxxx and hold goods, defective goods,
"seconds," or Inventory acquired on consignment $ ___________
Total Excluded Finished Goods Inventory $ ___________
ELIGIBLE FINISHED GOODS INVENTORY (Total Finished Goods Inventory less Total
Excluded Finished Goods Inventory): $ ___________
2. Total Raw Materials Inventory: Inventory consisting of first quality raw
materials to be used in Borrowers' production process $ ___________
less (without duplication)
Inventory which Borrower does not have good, valid, and marketable
title thereto $ ___________
Inventory not located at one of the locations in the continental
United States set forth on Schedule 4.5(a) or 4.5(b) to the Credit
Agreement (or in-transit from one such location to another such
location) $ ___________
Inventory not subject to a valid and perfected first priority
Agent's Lien $ ___________
- 7 -
Inventory consisting of goods that are obsolete or slow moving,
work-in-process, finished goods, or goods that constitute spare
parts, packaging and shipping materials, supplies used or consumed
in Borrower's business, xxxx and hold goods, defective goods,
"seconds," or Inventory acquired on consignment $ ___________
Total Excluded Raw Materials Inventory $ ___________
ELIGIBLE RAW MATERIALS INVENTORY (Total Raw Materials Inventory less Total
Excluded Raw Materials Inventory): $ ___________
ELIGIBLE INVENTORY (ELIGIBLE FINISHED GOODS INVENTORY PLUS ELIGIBLE RAW
MATERIALS INVENTORY): $ ___________
- 8 -
Annex C
Eligible Equipment: Net book value of Equipment of Borrowers located at the
locations identified on Schedule 4.5(a) or 4.5(b) hereto, as such schedules may
be amended or supplemented from time to time in accordance with the Credit
Agreement, such value to be as determined from time to time by a qualified
appraisal company selected by Agent, net of all related costs and expense. $ ___________
- 9 -
FINAL VERSION
EXHIBIT C-1
FORM OF COMPLIANCE CERTIFICATE
[on Parent's letterhead]
To: Xxxxx Fargo Foothill, Inc.
Xxx Xxxxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Business Finance Division Manager
Re: Compliance Certificate dated ___________
Ladies and Gentlemen:
Reference is made to that certain CREDIT AGREEMENT (the "Credit
Agreement") dated as of April 5, 2007, by and among the lenders identified on
the signature pages thereof (such lenders, together with their respective
successors and permitted assigns, are referred to hereinafter each individually
as a "Lender" and collectively as the "Lenders"), XXXXX FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders
("Agent"). XX XXXX'X CORPORATION, a Delaware corporation ("Parent"), and each of
its Subsidiaries party thereto. Capitalized terms used in this Compliance
Certificate have the meanings set forth in the Credit Agreement unless
specifically defined herein.
Pursuant to Schedule 5.3 of the Credit Agreement, the undersigned
officer of Parent hereby certifies on behalf of Parent, and not individually,
that:
1. The financial information of Parent and its Subsidiaries
furnished in Schedule 1 attached hereto, has been prepared in accordance with
GAAP (except for year-end adjustments and the lack of footnotes), and fairly
presents in all material respects the financial condition of Parent and its
Subsidiaries.
2. Such officer has reviewed the terms of the Credit Agreement and
has made, or caused to be made under his/her supervision, a review in reasonable
detail of the transactions and condition of the Loan Parties during the
accounting period covered by the financial statements delivered pursuant to
Schedule 5.3 of the Credit Agreement.
3. Such review has not disclosed the existence on and as of the date
hereof, and the undersigned does not have actual knowledge of the existence as
of the date hereof, of any event or condition that constitutes a Default or
Event of Default, except for such conditions or events listed on Schedule 2
attached hereto, specifying the nature and period of existence thereof and what
action the Loan Parties have taken, are taking, or propose to take with respect
thereto.
4. The representations and warranties of the Loan Parties set forth
in the Credit Agreement and the other Loan Documents are true and correct in all
material respects on and as of the date hereof (except to the extent they relate
to a specified date), except as set forth on Schedule 3 attached hereto.
5. The Loan Parties are in compliance with the applicable covenants
contained in Section 6.16 of the Credit Agreement as demonstrated on Schedule 4
hereof.
IN WITNESS WHEREOF, this Compliance Certificate is executed by the
undersigned this _____ day of _______________, _____.
XX XXXX'X CORPORATION,
a Delaware corporation
By: _______________________________
Name: ________________________
Title: ________________________
SCHEDULE 1
FINANCIAL INFORMATION
SCHEDULE 2
DEFAULT OR EVENT OF DEFAULT
SCHEDULE 3
REPRESENTATIONS AND WARRANTIES
SCHEDULE 4
FINANCIAL COVENANTS
1. FIXED CHARGE COVERAGE RATIO.
Parent's and its Subsidiaries' Fixed Charge Coverage Ratio, measured
on a quarter-end basis, for the 4 quarter period ending ________, ________ is
___:1.0, which [IS/IS NOT] greater than or equal to the amount set forth in
Section 6.16(a) of the Credit Agreement for the corresponding period.
2. CAPITAL EXPENDITURES.
Parent's and Borrowers' Capital Expenditures from the beginning of
Parent's most recent fiscal year to the date hereof is __________, (i) which
[IS/IS NOT] less than or equal to the amount set forth in Section 6.16(b) of the
Credit Agreement for the corresponding period.
FINAL VERSION
EXHIBIT L-1
FORM OF LIBOR NOTICE
Xxxxx Fargo Foothill, Inc., as Agent
under the below referenced Credit Agreement
Xxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
Reference hereby is made to that certain Credit Agreement, dated as
of April 5, 2007 (the "Credit Agreement"), among XX Xxxx'x Corporation, a
Delaware corporation ("Parent"), each of its Subsidiaries signatory thereto
(Parent and such Subsidiaries each, a "Borrower" and collectively, "Borrowers"),
the lenders signatory thereto (the "Lenders"), and Xxxxx Fargo Foothill, Inc., a
California corporation, as the arranger and administrative agent for the Lenders
("Agent"). Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Credit Agreement.
This LIBOR Notice represents Administrative Borrower's request to
elect the LIBOR Option with respect to [all or a portion of [outstanding
Obligations] bearing interest at a rate determined by reference to the Base
Rate] [the continuation of an outstanding LIBOR Rate Loan] in the amount of
$_________ (the "LIBOR Rate Loan")[, and is a written confirmation of the
telephonic notice of such election given to Agent].
The LIBOR Rate Loan will have an Interest Period of [1, 2, 3 or 6]
month(s) commencing on ___________.
This LIBOR Notice further confirms Borrowers' acceptance, for
purposes of determining the rate of interest based on the LIBOR Rate under the
Credit Agreement, of the LIBOR Rate as determined pursuant to the Credit
Agreement.
Administrative Borrower represents and warrants that (i) as of the
date hereof, each representation or warranty contained in or pursuant to any
Loan Document is true and correct in all material respects (except to the extent
any representation or warranty expressly related to an earlier date) and (ii) no
Default or Event of Default has occurred and is continuing on the date hereof,
nor will any thereof occur after giving effect to the request above.
Xxxxx Fargo Foothill, Inc., as Agent
Page 2
Dated: __________________________________
XX XXXX'X CORPORATION,
a Delaware corporation, as Administrative
Borrower
By: _____________________________________
Name: _______________________________
Title: ______________________________
Acknowledged by:
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent
By: _____________________________
Name: _______________________
Title: ______________________
FINAL VERSION
SCHEDULE A-1
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as the
account into which Administrative Borrower shall make all payments to Agent for
the benefit of the Lender Group and into which the Lender Group shall make all
payments to Agent under this Agreement and the other Loan Documents; unless and
until Agent notifies Administrative Borrower and the Lender Group to the
contrary, Agent's Account shall be that certain deposit account bearing account
number 323-266193 and maintained by Agent with JPMorgan Chase Bank, 4 New York
Plaza, 15th Floor, New York, New York 10004, ABA #000000000.
FINAL VERSION
SCHEDULE C-1
COMMITMENTS
Term Loan A Term Loan B LC Obligation
Name of Lender Commitment Commitment Commitment Total Commitment
-------------------------- --------------- --------------- --------------- -----------------
Xxxxx Fargo Foothill, Inc. $ 6,805,000.00 $ 6,220,384.79 $ 6,532,531.53 $ 19,557,916.32
SCHEDULE D-1
DESIGNATED ACCOUNT
Bank Name/Address: M&T Bank
0 X&X Xxxxx
Xxxxxxx, Xxx Xxxx
ABA Routing #: 000000000
Account Name: XX Xxxx'x Corporation
Account number: 9837038422
SCHEDULE P-1
PERMITTED LIENS
FILING
DEBTOR JURISDICTION FILE NUMBER DATE SECURED PARTY DESCRIPTION OF COLLATERAL
------------ ------------------- ----------- -------- ------------------- ----------------------------------------------------
XX Xxxx'x DE Secretary of 31757007 7/11/03 Arrow Electronics Those products stored in the segregated area of
Corporation State Inc. Debtor's facility designated as Secured Party's
consigned inventory storage area and those
products sold by Secured Party to Debtor pursuant
to that consigned inventory agreement dated June 1,
2003 by and between Debtor and Secured Party.
XX Xxxx'x PA Secretary of the 20220005768 1/9/04 Xerox Capital 1 Xerox
Corporation commonwealth Services LLC
TV Wood's PA Secretary of the 20040041169 1/12/04 Xerox Capital Refers to 20220005768
Corporation Commonwealth Services LLC Add:
1 Xerox DTCNtRL-1
1 Xerox DT75PRT
1 Xerox 6100PM-1
XX Xxxx'x PA Secretary of the 29520997 10/26/98 General Electric Equipment Lease
Incorporated Commonwealth Capital Corporation
XX Xxxx'x PA Secretary of the 29521002 10/26/98 General Electric Equipment Lease
Incorporated Commonwealth Capital Corporation
XX Xxxx'x PA Secretary of the 29790418 1/11/99 General Electric Equipment Lease
Incorporated Commonwealth Capital Corporation
1
FILING
DEBTOR JURISDICTION FILE NUMBER DATE SECURED PARTY DESCRIPTION OF COLLATERAL
------------ ------------------- ----------- -------- ------------------- ---------------------------------------------------
XX Xxxx'x PA Secretary of the 30290939 5/21/99 National City Equipment Lease
Incorporate Commonwealth Leasing Corporation
XX Xxxx'x PA Secretary of the 30340565 6/4/99 National City Equipment Lease
Incorporated Commonwealth Leasing Corporation
XX Xxxx'x PA Secretary of the 34711519 12/14/01 XX Xxxxxx Xxxxx Rents related to Tennessee IRBs
Incorporated Commonwealth Bank
XX Xxxx'x PA Secretary of the 36630224 9/10/02 PA Dept. of The machinery, equipment and other tangible
Incorporated Commonwealth Community and personal property listed on Exhibit A,
Economic and all parts, replacements and/or
Development substitutions, additions and accession, equipment,
- MELF tools and operating manuals therto,
any proceeds of sale or disposition thereof and
any proceeds of insurance thereon or condemnation
thereof.
XX Xxxx'x PA Secretary of the 20031225818 12/16/03 Citicapital 1 Xxxxxxxxx-Xxxx company Air Compressor EPE12528
Incorporated Commonwealth Commercial G/N FF2529 241175
Corporation
XX Xxxx'x PA Secretary of the 20040262016 3/11/04 National City In lieu of the financing statement listed.
Incorporated Commonwealth Leasing Corporation Collateral: 1 OKUMA LU-15 Big Bore 2SC Four Axis
CNC Turning Center
XX Xxxx'x PA Secretary of the 20040447617 4/30/04 Citicapital 1 Bobcat Skid Steer Loader
Incorporated Commonwealth Commercial
Corporation
2
FILING
DEBTOR JURISDICTION FILE NUMBER DATE SECURED PARTY DESCRIPTION OF COLLATERAL
------------ ------------------- ------------- ------- -------------------- --------------------------------------------------
XX Xxxx'x PA Secretary of the 20041126848 11/2/04 Citicapital 1 Xxxxxxxxx-Xxxx Dryer
Incorporated Commonwealth Commercial
Corporation
XX Xxxx'x PA Secretary of the 2005011400558 1/14/05 Crown Credit Company 1 Crown Life Truck
Incorporated Commonwealth 1 Deka Battery
1 Ametek Charger
XX Xxxx'x PA Secretary of the 2005081504374 8/15/05 Valenite, LLC Valenite, LLC (Consignor) will ship an inventory
Incorporated Commonwealth of consigne products, including but not limited
to all carbide or other items delivered by
Valenite, LLC from time to time. Such inventory of
consigned products shall remain in the property
of Valenite, LLC until such inventory is
withdrawn by Consignee for consumption.
XX Xxxxx PA Secretary of the 2006062105264 6/21/06 General Electric All Equipment, described herein or otherwise,
Commonwealth Capital Corporation leased to or financed for the Debtor by Secured
Party under that certain Master Note and Security
Agreement No. 4430734-001 dated 6/19/06 including
all accessories accessions, replacements,
additions, substitutions, add-ons and upgrades
thereto, and any proceeds therefrom.
XX Xxxx'x TX Secretary of 99-046730 -- City of San Marcos Buildings, and equipment located on 31 acres of
Incorporated State Industrial 1 and at 0000 Xxxxxx Xxxxxx Xxxxx
Development
Corporation
XX Xxxx'x Xxxx Xxxxxx, XX 00000000 8/17/05 General Electric 90' x 110' private sewerage easement over Xxx 0,
Xxxxxxxxxxxx Xxxxxxx Xxxxxxxxxxx Xxxxxxx Xxxxxxxxxx Xxxx No. 1, Xxxx County.
Together with (i) all substitutions for, and
products and proceeds of any of the foregoing
property, (ii) all accessions thereto.....
3
FILING
DEBTOR JURISDICTION FILE NUMBER DATE SECURED PARTY DESCRIPTION OF COLLATERAL
------------ ------------------- ------------- -------- -------------------- --------------------------------------------------
XX Xxxx'x Xxxx Xxxxxx, XX 00000000 8/19/05 General Electric 90' x 110' private sewerage easement over Xxx 0,
Xxxxxxxxxxxx Xxxxxxx Xxxxxxxxxxx Xxxxxxx Xxxxxxxxxx Xxxx No. 1, Xxxx County.
OKUMA CNC Lathe
Plant TN Secretary of 306101862 1/10/06 General Electric Maximum Principal Indebtedness for Tennessee
Engineering State Capital Corporation Recording Tax Purposes is $0.00. All accounts
Consultants, receivable for which Honeywell International
LLC Inc. is the Account Debtor and which have been
purchased from the Debtor pursuant to the
Agreement, dated as of 1/28/1999, between the
Debtor and the Secured Party, and all proceeds
thereof.
4
SCHEDULE P-2
PERMITTED INVESTMENTS
Equity Investments in:
- Industrial Blaju, S.A. de C.V.
- Xxxxxx Electronic GmBH
- XX Xxxx'x Canada Ltd.
Joint Ventures:
- XX Xxxx'x Corporation and XX Xxxx'x Incorporated hold a 92%
investment in XX Xxxx'x (India) Private Ltd. Joint Venture
The following intercompany indebtedness:
- TBWood's Incorporated is owed approximately $761,000 by Industrial
Blaju, S.A. de C.V.
- XX Xxxx'x Incorporated has guaranteed lease payments of $33,069 a
month until June 8, 2014, for Industrial Blaju, S.A. de C.V. at its
facility located at Avenue Commission Federal de Electricidad Xx.
000, Xxxxxx Xxxxxxxxxx Xxxxxxxxxx, Xxx Xxxx Xxxxxx, Xxxxxx 00000.
- Xxxxxx Electronic GmBH is owed approximately $1,900,000 by XX Xxxx'x
Incorporated
- TBWoods Incorporated is owed approximately $620,000 by TBW India Pvt
Ltd..
5
SCHEDULE R-1
REAL PROPERTY COLLATERAL
REAL PROPERTY
XX XXXX'X CORPORATION
Headquarters:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
XX XXXX'X INCORPORATED
Main offices, warehouse Mechanical Division manufacturing plant:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Electronics Division Offices and manufacturing plant
0000 Xxxxx Xxx Xxxx
Xxxxxxxxxxxx, XX 00000
000 X. Xxxxxxxxxx Xxx.
Xx. Xxxxxxxx, Xxxxxxxx 00000
0000 Xxxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
REAL PROPERTY LEASES
XX XXXX'X INCORPORATED
Reno Nevada: Landlord: Xxxxxxx Industrial Group managed
by DP Partners
0000 Xxxxx Xxxxxx, 0000 Xxxxxxxxx Xxxx
Xxxx, XX 00000 Xxxx, XX 00000
PLANT ENGINEERING CONSULTANTS LLC
000 Xxxxxxx Xxxx Xxxxxxxx: XX Xxxx'x Incorporated leases this
Xxxxxxxxxxx, XX 00000 building from the Industrial Development
Board of the City of Chattanooga.
XX XXXX'X ENTERPRISES, INC.
Xxxxx 000, 000 Xxxxxxxx Xxxxxx Xxxxxxxx: PNC Bank, Delaware
Xxxxxxxxxx, Xxxxxxxx 00000
6
SCHEDULE 1.1
As used in the Agreement, the following terms shall have the following
definitions:
"Account" means an account (as that term is defined in the Code).
"Account Debtor" means any Person who is obligated on an Account, chattel
paper, or a general intangible.
"Acquisition Documents" means the Merger Agreement and the other
documents, instruments and agreements executed and delivered in connection with
the Acquisition Transactions, or otherwise relating thereto.
"Acquisition Transactions" means the transactions contemplated by the
Tender Offer and the Merger Agreement.
"Additional Notes" has the meaning specified therefor in the recitals to
the Agreement.
"Administrative Borrower" has the meaning specified therefor in Section
16.9.
"Affiliate" means, as applied to any Person, any other Person who
controls, is controlled by, or is under common control with, such Person. For
purposes of this definition, "control" means the possession, directly or
indirectly through one or more intermediaries, of the power to direct the
management and policies of a Person, whether through the ownership of Stock, by
contract, or otherwise; provided, however, that, for purposes of the definition
of Eligible Accounts and Section 6.13 hereof: (a) any Person which owns directly
or indirectly 10% or more of the Stock having ordinary voting power for the
election of directors or other members of the governing body of a Person or 10%
or more of the partnership or other ownership interests of a Person (other than
as a limited partner of such Person) shall be deemed an Affiliate of such
Person, (b) each director (or comparable manager) of a Person shall be deemed to
be an Affiliate of such Person, and (c) each partnership or joint venture in
which a Person is a general partner or joint venturer shall be deemed an
Affiliate of such Person.
"Agent" has the meaning specified therefor in the preamble to the
Agreement.
"Agent-Related Persons" means Agent, together with its Affiliates,
officers, directors, employees, attorneys, and agents.
"Agent's Account" means the Deposit Account of Agent identified on
Schedule A-1.
"Agent's Liens" means the Liens granted by Borrowers and their respective
Restricted Subsidiaries to Agent under the Loan Documents.
"Agreement" means the Credit Agreement to which this Schedule 1.1 is
attached.
"Altra Holdings" has the meaning specified therefor in the recitals to the
Agreement.
"Altra Industrial" has the meaning specified therefor in the recitals to
the Agreement.
"Altra Senior Credit Agreement" means that certain Credit Agreement dated
as of November 30, 2004 among Altra Industrial, the Subsidiaries of Altra
Industrial party thereto, Xxxxx Fargo Foothill, Inc., as agent, and the lenders
party thereto, as the same may be amended, restated, supplemented or modified
from time to time.
"Applicable Prepayment Premium" has the meaning specified therefore in
the Fee Letter.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
transfer, lease (other than operating leases entered into in the ordinary course
of business, consistent with past practice), assignment or other transfer of:
(a) any Stock of any Borrower or any of its Restricted Subsidiaries; or
(b) any other property or assets of any Borrower or any of its Restricted
Subsidiaries other than in the ordinary course of business, consistent with past
practice;
provided, that Asset Sales shall not include:
(1) a transaction or series of related transactions for which the
applicable Loan Party received aggregate consideration of less than $2,500,000;
(2) a transaction included in the definition of Permitted Investment;
(3) the sale of Cash Equivalents;
(4) the creation of a Permitted Lien (but not the sale or other
disposition of the property subject to such Lien); and
(5) a transfer from a Loan Party to another Loan Party.
"Assignee" has the meaning specified therefor in Section 13.1(a).
"Assignment and Acceptance" means an Assignment and Acceptance Agreement
substantially in the form of Exhibit A-1.
"Authorized Person" means any officer or employee of Administrative
Borrower.
"Bankruptcy Code" means title 11 of the United States Code, as in effect
from time to time.
"Base LIBOR Rate" means the rate per annum, determined by Agent in
accordance with its customary procedures, and utilizing such electronic or other
quotation sources as it considers appropriate (rounded upwards, if necessary, to
the next 1/100%), to be the rate at which Dollar deposits (for delivery on the
first day of the requested Interest Period) are offered to major banks in the
London interbank market 2 Business Days prior to the commencement of the
requested Interest Period, for a term and in an amount comparable to the
Interest Period and the amount of the LIBOR Rate Loan requested (whether as an
initial LIBOR Rate Loan or as a continuation of a LIBOR Rate Loan or as a
conversion of a Base Rate Loan to a LIBOR Rate Loan) by Administrative Borrower
in accordance with the Agreement, which determination shall be conclusive in the
absence of manifest error.
2
"Base Rate" means, the rate of interest announced, from time to time,
within Xxxxx Fargo at its principal office in San Francisco as its "prime rate",
with the understanding that the "prime rate" is one of Xxxxx Fargo's base rates
(not necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publications as Xxxxx Fargo may designate.
"Base Rate Loan" means the portion of the Obligations that bears interest
at a rate determined by reference to the Base Rate.
"Base Rate Margin" means 0.25 percentage points.
"Board of Directors" means the board of directors (or comparable managers
or other equivalents) of any Borrower or any of its Restricted Subsidiaries or
any committee thereof duly authorized to act on behalf of the board of directors
(or comparable managers or other equivalents).
"Borrower" and "Borrowers" have the respective meanings specified therefor
in the preamble to the Agreement.
"Borrowing Base" means, as of any date of determination, the result of:
(a) 85% of the amount of Eligible Accounts, less the amount, if any, of
the Dilution Reserve, plus
(b) 65% of the net book value of Eligible Inventory, plus
(c) 50% of the Eligible Equipment Book Value.
"Borrowing Base Certificate" means a certificate in the form of Exhibit
X-x.
"Business Day" means any day that is not a Saturday, Sunday, or other day
on which banks are authorized or required to close in the state of New York,
except that, if a determination of a Business Day shall relate to a LIBOR Rate
Loan, the term "Business Day" also shall exclude any day on which banks are
closed for dealings in Dollar deposits in the London interbank market.
"Capital Expenditures" means, with respect to any Person for any period,
the aggregate of all expenditures by such Person and its Subsidiaries during
such period that are capital expenditures as determined in accordance with GAAP,
whether such expenditures are paid in cash or financed.
"Capitalized Lease Obligation" means that portion of the obligations under
a Capital Lease that is required to be capitalized in accordance with GAAP.
"Capital Lease" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"Cash Disposition Instruction" has the meaning specified therefor in
Section 2.7(b).
"Cash Equivalents" means (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Rating Group ("S&P") or Xxxxx'x Investors Service, Inc.
("Moody's"), (c) commercial paper maturing no more than 270 days from the date
3
of creation thereof and, at the time of acquisition, having a rating of at least
A-l from S&P or at least P-l from Moody's, (d) certificates of deposit or
bankers' acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States, any state
thereof or the District of Columbia or the United States branch of a foreign
bank having at the date of acquisition thereof combined capital and surplus of
not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank
that satisfies the criteria described in clause (d) above, or (ii) any other
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any such other bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, (f)
repurchase obligations of any commercial bank satisfying the requirements of
clause (d) of this definition or recognized securities dealer having combined
capital and surplus of net less than $250,000,000, provided that such repurchase
obligations have a term of not more than seven (7) days and are securities that
otherwise satisfy the criteria in clause (a) or (d) above, and (g) Investments
in money market funds substantially all of whose assets are invested in the
types of assets described in clauses (a) through (f) above.
"Cash Management Account" has the meaning specified therefor in Section
2.7(a).
"Cash Management Agreements" means those certain cash management
agreements, in form and substance reasonably satisfactory to Agent, each of
which is among a Borrower or one of its Restricted Subsidiaries, Agent, and one
of the Cash Management Banks.
"Cash Management Bank" has the meaning specified therefor in Section
2.7(a).
"Cash Sweep Instruction" has the meaning specified therefor in Section
2.7(b).
"Change of Control" means that (a) after consummation of the Merger, Altra
Industrial fails to own or control, directly or indirectly, 100% of the Stock of
Parent having the right to vote for the election of members of the Board of
Directors thereof or (b) except for transactions permitted under Section 6.3 or
Section 6.4, any Borrower fails to own or control, directly or indirectly, 100%
of the Stock of each of its Subsidiaries that are Borrowers or Restricted
Subsidiaries (after giving effect to the Acquisition Transactions) having the
right to vote for the election of members of the Board of Directors thereof.
"Closing Date" means the date of the making of the Term Loans hereunder or
the date on which Agent sends Administrative Borrower a written notice that each
of the conditions precedent set forth in Section 3.1 either have been satisfied
or have been waived.
"Code" means the New York Uniform Commercial Code, as in effect from time
to time.
"Collateral" means all assets and interests in assets and proceeds thereof
now owned or hereafter acquired by Borrowers or any of their respective
Restricted Subsidiaries in or upon which a Lien is granted under any of the Loan
Documents.
"Collateral Access Agreement" means a landlord waiver, bailee letter, or
acknowledgement agreement of any lessor, warehouseman, processor, consignee, or
other Person in possession of, having a Lien upon, or having rights or interests
in Borrower's or any of their respective Restricted Subsidiaries' books and
records, Equipment or Inventory, in each case, in form and substance reasonably
satisfactory to Agent.
"Collateral Cushion" means, as of any date of determination, the excess,
if any, of (a) Borrowing Base over (b) the sum of (i) the aggregate outstanding
principal balance of the Term Loans on such date, plus (ii) the aggregate
outstanding principal balance of the LC Obligations on such date, plus (iii) the
Letter of Credit Usage on such date.
4
"Collections" means all cash, checks, notes, instruments, and other items
of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds).
"Commitment" means, with respect to each Lender, its Commitment, and, with
respect to all Lenders, their Commitments, in each case as such Dollar amounts
are set forth beside such Lender's name under the applicable heading on Schedule
C-l or in the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of Section 13.1.
"Compliance Certificate" means a certificate substantially in the form of
Exhibit C-l delivered by the chief financial officer, controller, treasurer,
vice president of finance or another officer performing comparable duties to
those typically granted to any of the foregoing of Parent to Agent.
"Consolidated EBITDA" means, with respect to any fiscal period, the sum
(without duplication) of:
(a) Consolidated Net Income; and
(b) to the extent Consolidated Net Income has been reduced thereby:
(i) all income taxes paid or accrued in accordance with GAAP for
such period;
(ii) Interest Expense and interest attributable to write-offs of
deferred financing costs;
(iii) non-cash non-recurring charges;
(iv) cash non-recurring charges in an aggregate amount not to exceed
$1,000,000 in any fiscal year; and
(v) Consolidated Non-cash Charges less any non-cash items increasing
Consolidated Net Income for such period;
all as determined on a consolidated basis in accordance with GAAP.
"Consolidated Net Income" means, for any period, the aggregate net income
(or loss) of Parent and its Subsidiaries for such period on a consolidated
basis, determined in accordance with GAAP; provided, that there shall be
excluded therefrom (to the extent otherwise included therein):
(a) gains from Asset Sales and extraordinary gains, in each case together
with any provision for taxes on such gains;
(b) the net income (but not loss) of any Subsidiary of Parent to the
extent that the declaration of dividends or similar distributions by that
Subsidiary of that income is restricted by contract, operation of law or
otherwise;
5
(c) the net income (but not loss) of any Person, other than a Borrower or
a Restricted Subsidiary of any Borrower, except to the extent of cash dividends
or distributions paid to any Borrower or any of its Restricted Subsidiaries by
such Person;
(d) any restoration to income of any material contingency reserve, except
to the extent that provision for such reserve was made out of Consolidated Net
Income accrued at any time following the Closing Date;
(e) income or loss attributable to discontinued operations (including
without limitation, operations disposed of during such period whether or not
such operations were classified or discontinued);
(f) all gains realized on or because of the purchase or other acquisition
by any Borrower, or any of their respective Restricted Subsidiaries of any
securities of such Person or any of its Restricted Subsidiaries;
(g) the cumulative effect of a change in accounting principles; and
(h) in the case of a successor to Parent by consolidation or merger or as
a transferee of the Parent's assets, any earnings of the successor corporation
prior to such consolidations, merger or transfer of assets.
"Consolidated Non-cash Charges" mean, with respect to any Person, for any
period, the aggregate depreciation, amortization and other non-cash items and
expenses of such Person and its consolidated Subsidiaries to the extent they
reduce Consolidated Net Income of such Person for such period, determined on a
consolidated basis in accordance with GAAP (excluding any such charges
constituting an extraordinary item or loss or any such charge that requires an
accrual of or a reserve for cash charges for any future period).
"Control Agreement" means a control agreement, in form and substance
reasonably satisfactory to Agent, executed and delivered by a Borrower or one of
their respective Restricted Subsidiaries, Agent, and the applicable securities
intermediary (with respect to a Securities Account) or bank (with respect to a
Deposit Account).
"Controlled Foreign Corporation" means "controlled foreign corporation" as
defined in the IRC.
"Copyright Security Agreement" has the meaning specified therefor in the
Security Agreement.
"Daily Balance" means, as of any date of determination and with respect to
any Obligation, the amount of such Obligation owed at the end of such day.
"Default" means an event, condition, or default that, with the giving of
notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any extension of
credit that it is required to make hereunder on the date that it is required to
do so hereunder.
"Defaulting Lender Rate" means (a) for the first 3 days from and after the
date the relevant payment is due, the Base Rate, and (b) thereafter, the
interest rate then applicable to Base Rate Loans (inclusive of the Base Rate
Margin applicable thereto).
6
"Deposit Account" means any deposit account (as that term is defined in
the Code).
"Designated Account" means the Deposit Account of Administrative Borrower
identified on Schedule D-l.
"Designated Account Bank" has the meaning specified therefor in Schedule
D-l.
"Dilution" means, as of any date of determination, a percentage, based
upon the experience of the immediately prior 180 consecutive days, that is the
result of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to
Borrowers' Accounts during such period, by (b) Borrowers' xxxxxxxx with respect
to Accounts during such period.
"Dilution Reserve" means, as of any date of determination, an amount
sufficient to reduce the advance rate against Eligible Accounts by 1 percentage
point for each percentage point by which Dilution is in excess of 5.0%.
"Disposition" has the meaning specified therefor in Section 6.4.
"Dollars" or "$" means United States dollars.
"EBITDA" means, with respect to any fiscal period and any Person, such
Person's and its Subsidiaries' consolidated net earnings (or loss), minus
extraordinary gains and interest income, plus interest expense, income taxes,
and depreciation and amortization for such period, in each case, as determined
in accordance with GAAP.
"Eligible Accounts" means those Accounts created by a Borrower in the
ordinary course of its business, that arise out of its sale of goods or
rendition of services, and that are not excluded as ineligible by virtue of one
or more of the excluding criteria set forth below; provided, however, that such
criteria may be revised from time to time by Agent in Agent's Permitted
Discretion to address the results of any audit performed by Agent from time to
time after the Closing Date; provided, further, however, that Agent shall use
commercially reasonable efforts to notify Administrative Borrower at or before
the time such eligibility criteria are revised. In determining the amount to be
included, Eligible Accounts shall be calculated net of customer deposits and
unapplied cash. Eligible Accounts shall not include the following:
(a) Accounts that the Account Debtor (i) has failed to pay within 90 days
(or, with respect to Accounts with selling terms of more than 60 days, 105 days)
after the original invoice date, (ii) are more than 60 days after the due date,
or (iii) Accounts with selling terms of more than 120 days,
(b) Accounts owed by an Account Debtor (or its Affiliates) where 50% or
more of all Accounts owed by that Account Debtor (or its Affiliates) are deemed
ineligible under clause (a) above,
(c) Accounts with respect to which the Account Debtor is an Affiliate of
any Borrower or an employee or agent of any Borrower or any Affiliate of any
Borrower,
(d) Accounts arising in a transaction wherein goods are placed on
consignment or are sold pursuant to a guaranteed sale, a sale or return, a sale
on approval, a xxxx and hold, or any other terms by reason of which the payment
by the Account Debtor may be conditional,
(e) Accounts that are not payable in Dollars,
7
(f) Accounts with respect to which the Account Debtor either (i) does not
maintain its chief executive office in the United States, or (ii) is not
organized under the laws of the United States or any state thereof, or (iii) is
the government of any foreign country or sovereign state, or of any state,
province, municipality, or other political subdivision thereof, or of any
department, agency, public corporation, or other instrumentality thereof, unless
(x) the Account is supported by an irrevocable letter of credit reasonably
satisfactory to Agent (as to form, substance, and issuer or domestic confirming
bank) that has been delivered to Agent and is directly drawable by Agent, or (y)
the Account is covered by credit insurance in form, substance, and amount, and
by an insurer, reasonably satisfactory to Agent,
(g) Accounts with respect to which the Account Debtor is the United States
or any department, agency, or instrumentality of the United States or any state
of the United States (exclusive, however, of Accounts with respect to which the
applicable Borrower has complied, to the reasonable satisfaction of Agent, with
the Assignment of Claims Act, 31 USC Section 3727, or any similar state or local
law, if applicable),
(h) Accounts with respect to which the Account Debtor claims a credit from
any Borrower, has or has asserted a right of setoff, or has disputed its
obligation to pay all or any portion of the Account, to the extent of such
claim, right of setoff, or dispute,
(i) Accounts with respect to an Account Debtor whose total obligations
owing to Borrowers exceed 10% (such percentage, as applied to a particular
Account Debtor, being subject to reduction by Agent in its Permitted Discretion
if the creditworthiness of such Account Debtor deteriorates) of all Eligible
Accounts, to the extent of the obligations owing by such Account Debtor in
excess of such percentage; provided, however, that as to the following Account
Debtor, a percentage limitation of 20% (in lieu of 10%) shall apply for purposes
hereof: Motion Industries; provided, further, however, that, in each case, the
amount of Eligible Accounts that are excluded because they exceed the foregoing
percentage shall be determined by Agent based on all of the otherwise Eligible
Accounts prior to giving effect to any eliminations based upon the foregoing
concentration limit,
(j) Accounts with respect to which the Account Debtor is subject to an
Insolvency Proceeding, is not Solvent, or as to which a Borrower has received
written notice of an imminent Insolvency Proceeding of such Account Debtor,
(k) Accounts with respect to which the Account Debtor is located in a
state or jurisdiction (e.g., New Jersey, Minnesota, and West Virginia) that
requires, as a condition to access to the courts of such jurisdiction, that a
creditor qualify to transact business, file a business activities report or
other report or form, or take one or more other actions, unless the applicable
Borrower has so qualified, filed such reports or forms, or taken such actions
(and, in each case, paid any required fees or other charges), except to the
extent that the applicable Borrower may qualify subsequently as a foreign entity
authorized to transact business in such state or jurisdiction and gain access to
such courts, without incurring any cost or penalty viewed by Agent, in its
Permitted Discretion, to be significant in amount, and such later qualification
cures any access to such courts to enforce payment of such Account,
(l) Accounts, the collection of which, Agent, in its Permitted Discretion,
believes to be doubtful by reason of the Account Debtor's financial condition,
(m) Accounts that are not subject to a valid and perfected first priority
Agent's Lien,
8
(n) Accounts with respect to which (i) the goods giving rise to such
Account have not been shipped and billed to the Account Debtor, or (ii) the
services giving rise to such Account have not been performed and billed to the
Account Debtor, or
(o) Accounts that represent the right to receive progress payments or
other advance xxxxxxxx that are due prior to the completion of performance by
the applicable Borrower of the subject contract for goods or services.
"Eligible Equipment" means the Equipment of Borrowers located at the
locations identified on Schedules 4.5(a) and 4.5(b) hereto, as such schedules
may be amended or supplemented from time to time in accordance with the
Agreement.
"Eligible Equipment Book Value" means the net book value of the Eligible
Equipment, such value to be as determined from time to time by a qualified
appraisal company selected by Agent, net of all related costs and expenses.
"Eligible Finished Goods Inventory" means Inventory of Borrowers
consisting of first quality finished goods held for sale in the ordinary course
of Borrowers' business and that is not excluded as ineligible by virtue of one
or more of the excluding criteria set forth below; provided, however, that such
criteria may be revised from time to time by Agent in Agent's Permitted
Discretion to address the results of any audit or appraisal performed by Agent
from time to time after the Closing Date; provided, further, however, that Agent
shall use commercially reasonable efforts to notify Administrative Borrower at
or before the time such eligibility criteria are revised. In determining the
amount to be so included, Inventory shall be valued (unless otherwise agreed to
by Agent in its sole discretion) at the lower of cost computed on a first-in
first-out basis in accordance with GAAP or market value on a basis consistent
with Borrowers' historical accounting practices. An item of Inventory shall not
be included in Eligible Finished Goods Inventory if:
(a) a Borrower does not have good, valid, and marketable title thereto,
(b) it is not located at one of the locations in the continental United
States set forth on Schedules 4.5(a) and 4.5(b), as such schedules may be
amended from time to time in accordance with the Agreement (or in-transit from
one such location to another such location),
(c) it is not subject to a valid and perfected first priority Agent's
Lien,
(d) it consists of goods returned or rejected by a Borrower's customers,
or
(e) it consists of goods that are obsolete or slow moving,
work-in-process, raw materials, or goods that constitute spare parts, packaging
and shipping materials, supplies used or consumed in a Borrower's business, xxxx
and hold goods, defective goods, "seconds," or Inventory acquired on
consignment.
"Eligible Inventory" means, collectively, Eligible Finished Goods
Inventory and Eligible Raw Materials Inventory.
9
"Eligible Raw Materials Inventory" means Inventory of Borrowers consisting
of first quality raw materials to be used in Borrowers' production process and
that is not excluded as ineligible by virtue of one or more of the excluding
criteria set forth below; provided, however, that such criteria may be revised
from time to time by Agent in Agent's Permitted Discretion to address the
results of any audit or appraisal performed by Agent from time to time after the
Closing Date; provided, further, however, that Agent shall use commercially
reasonable efforts to notify Administrative Borrower at or before the time such
eligibility criteria are revised. In determining the amount to be so included,
Inventory shall be valued (unless otherwise agreed to by Agent in its sole
discretion) at the lower of cost computed on a first-in first-out basis in
accordance with GAAP or market value on a basis consistent with Borrowers'
historical accounting practices. An item of Inventory shall not be included in
Eligible Raw Materials Inventory if:
(a) a Borrower does not have good, valid, and marketable title thereto,
(b) it is not located at one of the locations in the continental United
States set forth on Schedules 4.5(a) and 4.5(b), as such schedules may be
amended or supplemented from time to time in accordance with the Agreement (or
in-transit from one such location to another such location),
(c) it is not subject to a valid and perfected first priority Agent's
Lien, or
(d) it consists of goods that are obsolete or slow moving,
work-in-process, finished goods, or goods that constitute spare parts, packaging
and shipping materials, supplies used or consumed in a Borrower's business, xxxx
and hold goods, defective goods, "seconds," or Inventory acquired on
consignment.
"Eligible Transferee" means (a) a commercial bank organized under the laws
of the United States, or any state thereof, and having total assets in excess of
$250,000,000, (b) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a Lender, (e) so
long as no Event of Default has occurred and is continuing, any other Person
approved by Agent and Administrative Borrower (which approval of Administrative
Borrower shall not be unreasonably withheld, delayed, or conditioned), and (f)
during the continuation of an Event of Default, any other Person approved by
Agent.
"Environmental Actions" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding or judgment from any Governmental Authority, or any third party
alleging violations of Environmental Laws or releases of Hazardous Materials in
violation of Environmental Laws from (a) any assets, properties, or businesses
of any Borrower, any of their respective Subsidiaries, or any of their
predecessors in interest, (b) from adjoining properties or businesses, or (c)
from or onto any facilities which received Hazardous Materials generated by any
Borrower, any of their respective Subsidiaries, or any of their predecessors in
interest.
"Environmental Claim" has the meaning specified therefore in Section 4.14.
"Environmental Law" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy or rule of common
law now or hereafter in effect and in each case as amended, or any binding
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, in each case, to the extent
binding on any Borrower or any of their respective Subsidiaries, relating to the
environment, or the effect of the environment on employee health, in each case
as amended from time to time.
10
"Environmental Liabilities" means all liabilities, monetary obligations,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all reasonable fees, disbursements and expenses of
counsel, experts, or consultants, and costs of investigation and feasibility
studies), fines, penalties, sanctions, and interest incurred as a result of any
claim or demand, or Remedial Action required, by any Governmental Authority or
any third party, and which relate to any Environmental Action.
"Environmental Lien" means any Lien in favor of any Governmental Authority
for Environmental Liabilities.
"Equipment" means equipment (as that term is defined in the Code).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, from time to time, and the regulations promulgated thereunder.
"ERISA Affiliate" means each business or entity which is a member of a
"controlled group of corporations", under "common control" or an "affiliated
service group" with any Borrower or any of its Restricted Subsidiaries within
the meaning of Section 414(b), (c) or (m) of the IRC, required to be aggregated
with any Borrower or any of its Restricted Subsidiaries under Section 414(o) of
the IRC, or is under "common control" with any Borrower or any of its Restricted
Subsidiaries, within the meaning of Section 4001(a)(14) of ERISA.
"ERISA Event" means (a) a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such Section with respect to a Pension
Plan, excluding, however, such events as to which the PBGC by regulation has
waived the requirement of Section 4043(a) of ERISA that it be notified within 30
days of the occurrence of such event; (b) a withdrawal by any Borrower, any of
their respective Restricted Subsidiaries, or any ERISA Affiliate from a Pension
Plan or the termination of any Pension Plan resulting in liability under
Sections 4063 or 4064 of ERISA; (c) the withdrawal of any Borrower, any of their
respective Restricted Subsidiaries, or ERISA Affiliate in a complete or partial
withdrawal (within the meaning of Section 4203 and 4205 of ERISA) from any
Multiemployer Plan if there is any potential liability therefor, or the receipt
by any Borrower, any of their respective Restricted Subsidiaries, or ERISA
Affiliate of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA; (d) the filing of a notice
of intent to terminate, the treatment of a plan amendment as a termination under
Section 4041(c) of ERISA, or the treatment of a plan amendment as a termination
under Section 4041(e) of ERISA, or the commencement of proceedings by the PBGC
to terminate a Pension Plan; (e) the imposition of liability on any Borrower,
any of their respective Restricted Subsidiaries, or any ERISA Affiliate pursuant
to Sections 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (f) the failure by any Borrower, any of their respective
Restricted Subsidiaries, or any ERISA Affiliate to make any required
contribution to a Pension Plan, or the failure to meet the minimum funding
standard of Section 412 of the IRC with respect to any Pension Plan (whether or
not waived in accordance with Section 412(d) of the IRC) or the failure to make
by its due date a required installment under Section 412(m) of the IRC with
respect to any Pension Plan or the failure to make any required contribution to
a Multiemployer Plan; (g) an event or condition which might reasonably be
expected to constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Pension Plan or
Multiemployer Plan; (h) the imposition of any material liability under Title IV
of ERISA, other than PBGC premiums due but not delinquent under Section 4007 of
ERISA, upon any Borrower, any of their respective Restricted Subsidiaries or any
ERISA Affiliate; (i) an application for a funding waiver under Section 303 of
ERISA or an extension of any amortization period pursuant to Section 412 of the
IRC with respect to any Pension Plan; (j) the occurrence of a non-exempt
prohibited transaction under Sections 406 or 407 of ERISA for which any
Borrower, or any of their respective Restricted Subsidiaries, may be directly or
indirectly liable and which is reasonably expected to result in a material
11
liability to any Borrower or any of its Restricted Subsidiaries; (k) the
occurrence of an act or omission which could give rise to the imposition on any
Borrower, any of their respective Restricted Subsidiaries, or any ERISA
Affiliate of material fines, material penalties, material taxes or material
related charges under Chapter 43 of the IRC or under Sections 409, 502(c), (i)
or (1) or 4071 of ERISA; (1) the assertion of a material claim (other than
routine claims for benefits) against any Plan or the assets thereof, or against
any Borrower or any of its Restricted Subsidiaries in connection with any such
Plan; (m) receipt from the Internal Revenue Service of notice of the failure of
any Qualified Plan to qualify under Section 401(a) of the IRC, or the failure of
any trust forming part of any Qualified Plan to fail to qualify for exemption
from taxation under Section 501(a) of the IRC; or (n) the imposition of any lien
on any of the rights, properties or assets of any Borrower, any of their
respective Restricted Subsidiaries, or any ERISA Affiliate, in either case
pursuant to Section 302(f) of ERISA or Title IV of ERISA or to the penalty or
excise tax provisions of the IRC or to Section 401(a)(29) or 412(n) of the IRC.
"Event of Default" has the meaning specified therefor in Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as in effect
from time to time.
"Existing Letters of Credit" means the Letters of Credit set forth on
Schedule 2.12 hereto.
"Extraordinary Receipts" means any cash received by Parent or any of its
Subsidiaries not in the ordinary course of business, including (a) foreign,
United States, state or local tax refunds, (b) pension plan reversions, (c)
proceeds of insurance (including key man life insurance and business
interruption insurance, but excluding any casualty insurance), (d) judgments,
proceeds of settlements or other consideration of any kind in connection with
any cause of action, (e) indemnity payments, and (f) any purchase price
adjustment received in connection with any purchase agreement.
"FAC" has the meaning specified therefor in the recitals to the Agreement.
"Fair Market Value" means, with respect to any asset or property, the
price which could be negotiated in an arm's length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair Market
Value shall be determined by the Board of Directors of a Loan Party acting
reasonably and in good faith, and shall be evidenced by a resolution of such
Loan Party's Board of Directors.
"Fee Letter" means that certain fee letter between Borrowers and Agent, in
form and substance reasonably satisfactory to Agent.
"Fixed Charges" means with respect to Parent and its Subsidiaries for any
period, the sum, without duplication, of (a) Interest Expense, (b) principal
payments required to be paid during such period in respect of Indebtedness, and
(c) all federal, state, and local income taxes accrued for such period.
"Fixed Charge Coverage Ratio" means, with respect to Parent and its
Subsidiaries for any period, the ratio of (a) Consolidated EBITDA for such
period minus Capital Expenditures made (to the extent not already incurred in a
prior period) or incurred during such period, to (b) Fixed Charges for such
period.
"Foreign Lender" has the meaning specified therefore in Section
15.11(b)(i).
"Funding Losses" has the meaning specified therefor in Section
2.13(b)(ii).
12
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, consistently applied.
"Governing Documents" means, with respect to any Person, the certificate
or articles of incorporation, by-laws, or other organizational documents of such
Person.
"Governmental Authority" means any federal, state, local, or other
governmental or administrative body, instrumentality, board, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Guarantors" means each Restricted Subsidiary of Parent that is not a
Borrower and each other Subsidiary of Parent that executes a joinder to the
Guaranty after the Closing Date in accordance with Section 5.16; and "Guarantor"
means any one of them.
"Guaranty" means that certain general continuing guaranty executed and
delivered by each Guarantor in favor of Agent for the benefit of the Lender
Group, in form and substance satisfactory to Agent.
"Hazardous Materials" means (a) substances that are defined or listed in,
or otherwise classified pursuant to, any applicable Environmental Laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity," (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"Hedge Agreement" means any and all agreements, or documents now existing
or hereafter entered into by a Borrower or any of their respective Restricted
Subsidiaries that provide for an interest rate, credit, commodity or equity
swap, cap, floor, collar, forward foreign exchange transaction, currency swap,
cross currency rate swap, currency option, or any combination of, or option with
respect to, these or similar transactions, for the purpose of hedging a
Borrower's or any of their respective Restricted Subsidiaries' exposure to
fluctuations in interest or exchange rates, loan, credit exchange, security or
currency valuations or commodity prices.
"Holdout Lender" has the meaning specified therefor in Section 14.2(a).
"Indebtedness" means (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes, or other similar instruments
and all reimbursement or other obligations in respect of letters of credit,
bankers acceptances, (c) all obligations as a lessee under Capital Leases, (d)
all obligations or liabilities of others secured by a Lien on any asset of a
Person or its Subsidiaries, irrespective of whether such obligation or liability
is assumed (with the amount of such Indebtedness being the lesser of the
Indebtedness secured thereby or the book value of the assets constituting
security therefor), (e) all obligations to pay the deferred purchase price of
assets (other than trade payables incurred in the ordinary course of business
and repayable in accordance with customary trade practices), (f) all obligations
owing under Hedge Agreements, and (g) any obligation guaranteeing or intended to
guarantee (whether directly or indirectly guaranteed, endorsed, co-made,
discounted, or sold with recourse) any obligation of any other Person that
constitutes Indebtedness under any of clauses (a) through (f) above.
13
"Indenture" has the meaning specified therefor in the recitals to the
Agreement.
"Indenture Documents" means the Indenture, the Indenture Supplement, the
Senior Notes, the Collateral Agreements (as defined in the Indenture), and all
other documents, instruments and agreements executed or delivered by any of the
Parent and its Subsidiaries in connection therewith.
"Indenture Supplement" has the meaning specified therefor in the recitals
to the Agreement.
"Indemnified Liabilities" has the meaning specified therefor in Section
10.3.
"Indemnified Person" has the meaning specified therefor in Section 10.3.
"Independent Financial Advisor" means a nationally-recognized accounting,
appraisal or investment banking firm: (i) that does not, and whose directors,
officers and employees or Affiliates do not, have a direct or indirect financial
interest in Parent; and (ii) that, in the judgment of the Board of Directors of
Parent, is otherwise independent and qualified to perform the task for which it
is to be engaged.
"Insolvency Proceeding" means any proceeding commenced by or against any
Person under any provision of the Bankruptcy Code or under any other state or
federal bankruptcy or insolvency law, assignments for the benefit of creditors,
formal or informal moratoria, compositions, extensions generally with creditors,
or proceedings seeking reorganization, arrangement, or other similar relief and
including the appointment of a trustee, receiver, administrative receiver,
administrator or similar officer.
"Intercompany Subordination Agreement" means a subordination agreement
executed and delivered by Borrowers, each of their respective Restricted
Subsidiaries and Agent, the form and substance of which is reasonably
satisfactory to Agent.
"Intercreditor Agreement" means the Intercreditor Agreement dated as of
November 30, 2004, as amended and restated as of the date hereof, among WFF, in
its capacity as agent hereunder, WFF, in its capacity as agent under the Altra
Senior Credit Agreement, and Trustee, as amended, modified, supplemented or
restated from time to time.
"Interest Expense" means, for any period, the aggregate of the interest
expense of Parent and its Restricted Subsidiaries for such period, determined on
a consolidated basis in accordance with GAAP, and including, without
duplication, (a) all amortization or accretion of original issue discount; (b)
the interest component of Capitalized Lease Obligations paid, accrued and/or
scheduled to be paid or accrued by Parent and its Restricted Subsidiaries during
such period; and (c) net cash costs under all Interest Swap Obligations
(including amortization of fees).
"Interest Period" means, with respect to each LIBOR Rate Loan, a period
commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, 3 or 6 months thereafter; provided, however,
that (a) if any Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended (subject to clauses (c)-(e) below) to the
next succeeding Business Day, (b) interest shall accrue at the applicable rate
based upon the LIBOR Rate from and including the first day of each Interest
Period to, but excluding, the day on which any Interest Period expires, (c) any
Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (d) with
14
respect to an Interest Period that begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period), the Interest Period shall
end on the last Business Day of the calendar month that is 1, 2, 3 or 6 months
after the date on which the Interest Period began, as applicable, and (e)
Borrowers (or Administrative Borrower on behalf thereof) may not elect an
Interest Period which will end after the Maturity Date.
"Interest Swap Obligations" means the obligations of any Person pursuant to
any arrangement with any other Person, whereby, directly or indirectly, such
Person is entitled to receive from time to time periodic payments calculated by
applying either a floating or a fixed rate of interest on a stated notional
amount in exchange for periodic payments made by such other Person calculated by
applying a fixed or a floating rate of interest on the same notional amount and
shall include, without limitation, interest rate swaps, caps, floors, collars
and similar agreements.
"Inventory" means inventory (as that term is defined in the Code).
"Investment" means, with respect to any Person, any investment by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers, directors, employees and consultants
of such Person made in the ordinary course of business, and (b) extensions of
trade credit arising in the ordinary course of business consistent with past
practice), purchases or other acquisitions of Indebtedness, Stock, or all or
substantially all of the assets of such other Person (or of any division or
business line of such other Person), and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"IRC" means the Internal Revenue Code of 1986, as in effect from time to
time, and the regulations promulgated thereunder.
"Issuing Lender" means WFF or any other Lender that, at the request of
Administrative Borrower and with the consent of Agent (not to be unreasonably
withheld, conditioned or delayed), agrees, in such Lender's sole discretion, to
become an Issuing Lender for the purpose of issuing L/Cs or L/C Undertakings
pursuant to Section 2.12 with respect to the Existing Letters of Credit.
"L/C" has the meaning specified therefor in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender pursuant to a
Letter of Credit.
"LC Obligations" has the meaning specified therefor in Section 2.12(a).
"L/C Undertaking" has the meaning specified therefor in Section 2.12(a).
"Lender" and "Lenders" have the respective meanings set forth in the
preamble to the Agreement, and shall include any other Person made a party to
the Agreement in accordance with the provisions of Section 13.1.
"Lender Group" means, individually and collectively, each of the Lenders
(including the Issuing Lender) and Agent.
15
"Lender Group Expenses" means all (a) costs or expenses (including taxes,
and insurance premiums) required to be paid by any Borrower or any of its
Restricted Subsidiaries under any of the Loan Documents that are paid, advanced,
or incurred by the Lender Group, (b) fees or charges paid or incurred by Agent
in connection with the Lender Group's transactions with any Borrower or any of
its Restricted Subsidiaries, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record searches
(including tax lien, litigation, and UCC searches and including searches with
the patent and trademark office, the copyright office, or the department of
motor vehicles), filing, recording, publication, appraisal (including periodic
collateral appraisals or business valuations to the extent of the fees and
charges (and up to the amount of any limitation) contained in the Agreement),
real estate surveys, real estate title policies and endorsements, and
environmental audits, (c) costs and expenses incurred by Agent in the
disbursement of funds to Borrowers or other members of the Lender Group (by wire
transfer or otherwise), (d) charges paid or incurred by Agent resulting from the
dishonor of checks, (e) reasonable costs and expenses paid or incurred by the
Lender Group to correct any default or enforce any provision of the Loan
Documents, or in gaining possession of, maintaining, handling, preserving,
storing, shipping, selling, preparing for sale, or advertising to sell the
Collateral, or any portion thereof, irrespective of whether a sale is
consummated, (f) audit fees and expenses of Agent related to any inspections or
audits to the extent of the fees and charges (and up to the amount of any
limitation) contained in the Agreement, (g) reasonable costs and expenses of
third party claims or any other suit paid or incurred by the Lender Group in
enforcing or defending the Loan Documents or in connection with the transactions
contemplated by the Loan Documents or the Lender Group's relationship with any
Borrower or any of its Restricted Subsidiaries, (h) Agent's and each Lender's
reasonable costs and expenses (including attorneys fees) incurred in advising,
structuring, drafting, reviewing, administering, syndicating, or amending the
Loan Documents, and (i) Agent's and each Lender's reasonable costs and expenses
(including attorneys, accountants, consultants, and other advisors fees and
expenses) incurred in terminating, enforcing (including attorneys, accountants,
consultants, and other advisors fees and expenses incurred in connection with a
"workout," a "restructuring," or an Insolvency Proceeding concerning any
Borrower or any of its Restricted Subsidiaries or in exercising rights or
remedies under the Loan Documents), or defending the Loan Documents,
irrespective of whether suit is brought, or in taking any Remedial Action
concerning the Collateral.
"Lender-Related Person" means, with respect to any Lender, such Lender,
together with such Lender's Affiliates, officers, directors, employees,
attorneys, and agents.
"Letter of Credit" means an L/C or an L/C Undertaking, as the context
requires.
"Letter of Credit Usage" means, as of any date of determination, the
aggregate undrawn amount of all outstanding Letters of Credit.
"LIBOR Deadline" has the meaning specified therefor in Section 2.13(b)(i).
"LIBOR Notice" means a written notice in the form of Exhibit L-1.
"LEBOR Option" has the meaning specified therefor in Section 2.13(a).
"LIBOR Rate" means, for each Interest Period for each LIBOR Rate Loan, the
rate per annum determined by Agent (rounded upwards, if necessary, to the next
1/100%) by dividing (a) the Base LIBOR Rate for such Interest Period, by (b)
100% minus the Reserve Percentage. The LIBOR Rate shall be adjusted on and as of
the effective day of any change in the Reserve Percentage.
"LIBOR Rate Loan" means each portion of an Obligation that bears interest
at a rate determined by reference to the LIBOR Rate.
"LIBOR Rate Margin" means 1.75 percentage points.
16
"Lien" means, with respect to any asset, any mortgage, lien (statutory or
other), charge, deed of trust, encumbrance, pledge, hypothecation, assignment,
deposit arrangement, security agreement, conditional sale or trust receipt, or
other security interest in, on or of such asset to secure or provide for the
payment of any obligation of any Person, whether arising by contract, operation
of law or otherwise, and also includes reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases, and other
title exceptions and encumbrances affecting Real Property.
"Limiter Excess" has the meaning specified therefor in Section 2.4(d)(i).
"Loan Account" has the meaning specified therefor in Section 2.10.
"Loan Documents" means the Agreement, the Cash Management Agreements, the
Copyright Security Agreement, the Control Agreements, the Fee Letter, the
Guaranty, the Intercompany Subordination Agreement, the Intercreditor Agreement,
the Letters of Credit, the Mortgages, the Patent Security Agreement, the
Security Agreement, the Trademark Security Agreement, executed by any Loan Party
in connection with the Agreement, and any other agreement entered into, now or
in the future, by any Loan Party and the Lender Group in connection with the
Agreement.
"Loan Parties" means, collectively, Borrowers and Guarantors, and "Loan
Party" means any one of them.
"M&T Facility" has the meaning specified therefor in the recitals to the
Agreement.
"Material Adverse Change" means (a) a material adverse change in the
business, operations, assets, liabilities or condition (financial or otherwise)
of Borrowers and their Restricted Subsidiaries, taken as a whole, (b) a material
impairment of a Borrower's or any of its Restricted Subsidiaries' ability to
perform its obligations under the Loan Documents to which it is a party or of
the Lender Group's ability to enforce the Obligations or realize upon the
Collateral, or (c) a material impairment of the enforceability or priority of
the Agent's Liens with respect to the Collateral as a result of an action or
failure to act on the part of a Borrower or a Restricted Subsidiary of a
Borrower.
"Material Contract" means, with respect to any Person, any contract or
agreement, whether entered into as of the Closing Date or after the Closing
Date, if the breach of any such contract or agreement or the failure of any such
contract or agreement to be in full force and effect could be reasonably
expected to result in a Material Adverse Change.
"Maturity Date" has the meaning specified therefor in Section 3.3.
"Merger" has the meaning specified therefor in the recitals to the
Agreement.
"Merger Agreement" has the meaning specified therefor in the recitals to
the Agreement.
"Xxxxx'x" has the meaning specified therefore in the definition of Cash
Equivalents.
"Mortgages" means, individually and collectively, one or more mortgages,
deeds of trust, or deeds to secure debt, executed and delivered by any Borrower
or any of its Restricted Subsidiaries in favor of Agent, in form and substance
reasonably satisfactory to Agent, that encumber the Real Property Collateral.
17
"Multiemployer Plan" means a "multiemployer plan" (within the meaning of
Section 3(37) of ERISA) to which any Borrower, any of its Restricted
Subsidiaries, or any ERISA Affiliate makes, is making, is obligated, or within
the last six years has been obligated, to make contributions.
"Net Cash Proceeds" means (a) with respect to the sale or issuance by any
Person of any shares of its Stock, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred consideration) by or on behalf of
such Person in connection therewith, after deducting therefrom only (i) costs
and expenses related thereto incurred by such Person in connection therewith
(including, without limitation, legal, accounting and investment banking fees,
and underwriting discounts and commissions), (ii) transfer taxes paid by such
Person in connection therewith and (iii) net income taxes to be paid in
connection therewith (after taking into account any tax credits or deductions
and any tax sharing arrangements), and (b) with respect to any sale or
disposition by any Person thereof of property or assets, the amount of
Collections received (directly or indirectly) from time to time (whether as
initial consideration or through the payment of deferred consideration) by or on
behalf of such Person in connection therewith after deducting therefrom only (i)
the amount of any Indebtedness secured by any Permitted Lien on any asset (other
than (A) Indebtedness owing to Agent or any Lender under the Agreement or the
other Loan Documents and (B) Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection with such
disposition, (ii) reasonable expenses related thereto incurred by such Person in
connection therewith, and (iii) taxes paid or payable to any taxing authorities
by such Person in connection therewith, in each case to the extent, but only to
the extent, that the amounts so deducted are, at the time of receipt of such
cash, actually paid or payable to a Person that is not an Affiliate and are
properly attributable to such transaction.
"Obligations" means all loans, Term Loans, LC Obligations, debts,
principal, interest (including any interest that accrues after the commencement
of an Insolvency Proceeding regardless of whether allowed or allowable in whole
or in part as a claim in any such Insolvency Proceeding), contingent
reimbursement obligations with respect to outstanding Letters of Credit,
premiums, liabilities (including all amounts charged to Borrowers' Loan Account
pursuant hereto), obligations (including indemnification obligations), fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that accrue after the
commencement of an Insolvency Proceeding, regardless of whether allowed or
allowable in whole or in part as a claim in any such Insolvency Proceeding),
guaranties, covenants, and duties of any kind and description owing by Borrowers
to the Lender Group pursuant to or evidenced by the Loan Documents and
irrespective of whether for the payment of money, whether direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
and including all interest not paid when due and all Lender Group Expenses that
Borrowers are required to pay or reimburse by the Loan Documents, by law, or
otherwise. Any reference in the Agreement or in the Loan Documents to the
Obligations shall include all or any portion thereof and any extensions,
modifications, renewals, or alterations thereof, both prior and subsequent to
any Insolvency Proceeding.
"Originating Lender" has the meaning specified therefor in Section 13.1(e).
"Parent" has the meaning specified therefor in the preamble to the
Agreement.
"Participant" has the meaning specified therefor in Section 13.1(e).
"Patent Security Agreement" has the meaning specified therefore in the
Security Agreement.
18
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Pension Plan" means an employee pension benefit plan (as defined in
Section 3(2) of ERISA) other than a Multiemployer Plan (a) that is or has within
the last six years maintained or sponsored by any Borrower, any of its
Restricted Subsidiaries, or any ERISA Affiliate or to which any Borrower, any of
its Restricted Subsidiaries, or any ERISA Affiliate has within the last six
years made, or was obligated to make, contributions, and (b) that is or was
subject to Section 412 of the IRC, Section 302 of ERISA or Title IV of ERISA.
"Permitted Discretion" means a determination made in the exercise of
reasonable (from the perspective of a secured asset-based lender) business
judgment.
"Permitted Dispositions" means:
(a) Disposition of assets that are substantially worn, damaged, or obsolete
in the ordinary course of business,
(b) sales of Inventory in the ordinary course of business including
intercompany sales at transfer prices, prescribed by the IRC,
(c) the use or transfer of money or Cash Equivalents,
(d) the licensing of patents, trademarks, copyrights, and other
intellectual property rights in the ordinary course of business,
(e) the transfer of assets from any Loan Party to another Loan Party,
(f) Dispositions permitted by Sections 6.3 and 6.12 and Liens permitted by
Section 6.2,
(g) leases, subleases, licenses or sublicenses of property in the ordinary
course of business and which do not materially interfere with the business of
any Borrower or any of the Restricted Subsidiaries,
(h) the transfer of assets (i) among the Borrowers and the Restricted
Subsidiaries and (ii) from the Borrowers and the Restricted Subsidiaries to
Unrestricted Subsidiaries, provided that any sale, transfer or disposition
pursuant to this clause (ii) for a cash price less than the Fair Market Value of
such assets shall be deemed to be an Investment subject to Section 6.12;
(i) Disposition of property to the extent that (i) such property is
exchanged for credit against the purchase price of similar replacement property
or (ii) the proceeds of such Disposition are promptly applied to the purchase
price of such replacement property;
(j) Dispositions of accounts receivable that are not Eligible Accounts in
connection with the collection or compromise thereof;
(k) subject to Section 2.4(d) and Section 5.8 of the Agreement, transfers
of property arising directly from condemnation and casualty events; and
19
(l) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, Dispositions not otherwise permitted in
clauses (a) through (k) so long as (i) after giving effect thereto, the Fair
Market Value of the assets so disposed would not exceed $5,000,000 in the
aggregate during the term of the Agreement, (ii) Administrative Borrower shall
have given Agent at least five (5) days prior written notice of its intent to
make a Disposition subject to this clause (1), such notice to describe the
assets that Borrowers intend to dispose of, and (iii) 100% of the net book value
of the proceeds from such Dispositions shall be used to pay any outstanding LC
Obligations and Term Loans in accordance with Section 2.4(d)(ii).
"Permitted Investments" means:
(a) Investments in cash and Cash Equivalents,
(b) Investments in negotiable instruments for collection,
(c) advances made in connection with purchases of goods or services in the
ordinary course of business,
(d) Investments received in settlement of amounts due to any Borrower or
any Restricted Subsidiary effected in the ordinary course of business or owing
to any Borrower or any Restricted Subsidiary as a result of Insolvency
Proceedings involving an Account Debtor, supplier or in respect of any other
Investment or upon the foreclosure or enforcement of any Lien in favor of a
Borrower or a Restricted Subsidiary;
(e) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, Investments by any Loan Party in a newly
created Restricted Subsidiary that is or immediately after such Investment will
be a Guarantor;
(f) Investments among Borrowers and the Restricted Subsidiaries;
(g) Investments in the Senior Notes, the Unsecured Notes and under the
Altra Senior Credit Agreement;
(h) Hedge Agreements entered into in the ordinary course of Loan Parties'
businesses and otherwise permitted under the Agreement;
(i) Investments consisting of consideration received by a Loan Party as a
result of a Permitted Disposition;
(j) Investments existing on the Closing Date and disclosed in Schedule P-2
hereto and any modification, replacement, renewal or extension thereof; provided
that the amount of the original Investment is not increased by the terms of such
Investment and such modification, replacement, renewal or extension is otherwise
permitted by Section 6.12;
(k) Investments consisting of Indebtedness, Liens, fundamental changes,
Dispositions, and Capital Expenditures permitted under Sections 6.1, 6.2, 6.3,
6.4, and 6.16(b), respectively;
(l) the Acquisition Transactions;
(m) Guarantees by Borrowers or any Restricted Subsidiary of leases (other
than Capital Lease Obligations) or of other obligations that do not constitute
Indebtedness, in each case entered into in the ordinary course of business;
(n) loans and advances to employees, officers and directors of Parent or
any of its Subsidiaries, in the ordinary course of business, consistent with
past practice, for bona fide business purposes and in accordance with applicable
laws, in an aggregate amount not to exceed $500,000 at any time outstanding;
20
(o) so long as no Default or Event of Default has occurred and is
continuing or would result therefrom, Investments in any Unrestricted Subsidiary
by any Loan Party, provided that (i) the aggregate amount of such Investments at
any time outstanding does not exceed $10,000,000 (valued at cost at the time of
making thereof, which for purposes of Dispositions pursuant to clause (h)(ii) of
the definition of Permitted Dispositions shall be deemed to be the amount by
which the Fair Market Value exceeds the price received in cash, net of return of
return of capital, dividends, principal or similar amounts) and (ii) after
giving effect to each such Investment, Borrowers shall have a Collateral Cushion
of at least $2,500,000;
(p) loans and advances to Parent and the distribution or declaration or
payment of dividends on Parent's Stock to Altra Industrial, and
(q) other Investments that (net of any cash repayment of or return on such
Investments theretofore received) do not exceed $2,500,000 in any fiscal year so
long as (i) no Default or Event of Default has occurred and is continuing or
would result therefrom and (ii) after giving effect to each such Investment,
Borrowers shall have a Collateral Cushion of not less than $2,500,000.
"Permitted Liens" means:
(a) Liens held by Agent or Lenders to secure the Obligations,
(b) Liens for unpaid taxes, assessments, or other governmental charges or
levies that either (i) are not yet delinquent, or (ii) do not constitute an
Event of Default and for which the underlying taxes, assessments, charges or
levies are the subject of Permitted Protests,
(c) Liens set forth on Schedule P-1,
(d) judgment Liens that do not constitute an Event of Default under Section
7.7 of the Agreement,
(e) the interests of lessors, sublessors or licensors under operating
leases,
(f) purchase money Liens or the interests of lessors under Capital Leases
to the extent that such Liens or interests secure Permitted Purchase Money
Indebtedness and so long as such Lien attaches only to the asset purchased or
acquired and the proceeds thereof,
(g) Liens arising by operation of law in favor of warehousemen, landlords,
carriers, mechanics, materialmen, laborers, or suppliers or other similar Liens
imposed by operation of law or pursuant to customary reservations or retentions
of title, incurred in the ordinary course of business and not in connection with
the borrowing of money, and which Liens either (i) are for sums not yet
delinquent, or (ii) are the subject of Permitted Protests,
(h) Liens on cash, securities or similar instruments deposited (or Liens
securing any letter of credit issued in respect of) (i) worker's compensation,
unemployment insurance, and other types of social security, or similar
obligations, (ii) the making or entering into of bids, tenders, leases,
statutory obligations, contracts and similar obligations incurred in the
ordinary course of business and not in connection with the borrowing of money,
or (iii) performance, return of money, surety or appeal or similar bonds in
connection with obtaining such bonds in the ordinary course of business,
21
(i) with respect to any Real Property, easements, rights of way, title
defects and irregularities, and zoning and other applicable municipal or
governmental restrictions that (i) do not materially interfere with or impair
the use or operation thereof and (ii) are not Environmental Liens,
(j) Liens encumbering deposits made to secure obligations arising from
statutory, regulatory, contractual, or warranty requirements of any Borrower or
any of its Restricted Subsidiaries, including rights of offset and setoff,
(k) Liens securing Hedge Agreements relating to Indebtedness otherwise
permitted under the Agreement,
(l) intentionally omitted,
(m) Liens securing the obligations under (i) the Altra Senior Credit
Agreement and (ii) the Indenture and the Indenture Documents,
(n) Liens securing the reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating to such
letters of credit and products and proceeds thereof to the extent such letters
of credit are permitted to be incurred hereunder,
(o) Liens upon specific items of inventory or other goods and proceeds of
any Person securing such Person's obligations solely in respect of bankers'
acceptances issued or created for the account of such Person in the ordinary
course of business to facilitate the purchase, shipment or storage of such
inventory or other goods,
(p) Liens on property consisting of a definitive agreement to dispose of
such property in a Permitted Disposition,
(q) Liens that are contractual rights of set-off (i) relating to the
establishment of depository relations with banks not given in connection with
the issuance of Indebtedness or (ii) relating to pooled deposit or sweep
accounts of any Borrower or any Restricted Subsidiary to permit satisfaction of
overdraft or similar obligations, in each case incurred in the ordinary course
of business,
(r) leases, subleases, licenses or sublicenses granted by any Borrower or
the Restricted Subsidiaries to third parties in the ordinary course of business
and not interfering in any material respect with the ordinary course of the
business of the Borrower and the Restricted Subsidiaries, and
(s) Liens securing Refinancing Indebtedness which is incurred to refinance
any Indebtedness which has been secured by a Lien that is a Permitted Lien under
clause (a) through (r) of this definition, provided, however, that (x) if there
is any Refinancing Indebtedness in respect of the Indebtedness evidenced by the
Senior Notes (or any Refinancing Indebtedness in respect thereof), any Lien
permitted under this clause (s) shall only be permitted if such Lien is
subordinated upon substantially the same terms and conditions as the
Intercreditor Agreement, (y) such Liens are no less favorable to the Lender
Group than the Liens in respect of the Indebtedness being refinanced, and (z)
such Liens do not extend to or cover any property or assets of any Loan Party
not securing the Indebtedness so refinanced.
22
"Permitted Protest" means the right of any Borrower or any of its
Restricted Subsidiaries to protest any Lien (other than any Lien that secures
the Obligations), taxes (other than payroll taxes or taxes that are the subject
of a United States federal tax lien), rental payment, or other obligation,
provided that (a) a reserve with respect to such obligation is established on
any Borrower's or any of their respective Restricted Subsidiaries' books and
records in such amount as is required under GAAP, (b) any such protest is
instituted promptly and prosecuted diligently by any Borrower or the Restricted
Subsidiaries, as applicable, in good faith, and (c) Agent is satisfied that,
while any such protest is pending, there will be no impairment of the
enforceability or validity of any of the Agent's Liens.
"Permitted Purchase Money Indebtedness" means, as of any date of
determination, Purchase Money Indebtedness in an aggregate principal amount
outstanding at any one time not in excess of $5,000,000.
"Person" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
"Plan" means (a) an employee benefit plan (as defined in Section
3(3) of ERISA) other than a Multiemployer Plan which is or was within the last
six years maintained or sponsored by any Borrower or any of its Restricted
Subsidiaries or to which any Borrower or any of its Restricted Subsidiaries has
within the last six years made, or was obligated to make, contributions, (b) a
Pension Plan, or (c) a Qualified Plan.
"Projections" means Borrowers' forecasted (a) balance sheets, (b)
profit and loss statements, and (c) cash flow statements, all prepared on a
basis consistent, unless otherwise noted therein, with Parent's historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions.
"Pro Rata Share" means, as of any date of determination:
(a) with respect to a Lender's obligation to make the Term Loans and
right to receive payments of principal, interest, fees, costs, and expenses with
respect thereto, (i) prior to the making of the Term Loans, the percentage
obtained by dividing (y) such Lender's Commitment, by (z) the aggregate amount
of all Lenders' Commitments, and (ii) from and after the making of the Term
Loans, the percentage obtained by dividing (y) the principal amount of such
Lender's portion of the Term Loans by (z) the principal amount of the Term
Loans,
(b) with respect to a Lender's obligation to participate in Letters
of Credit, to reimburse the Issuing Lender, and right to receive payments of
fees with respect thereto, the percentage obtained by dividing (y) such Lender's
Commitment, by (z) the aggregate Commitments of all Lenders, and
(c) with respect to all other matters as to a particular Lender
(including the indemnification obligations arising under Section 15.7), the
percentage obtained by dividing (i) such Lender's Commitment, by (ii) the
aggregate amount of Commitments of all Lenders; provided, however, that in the
event the Commitments have been terminated or reduced to zero, Pro Rata Share
under this clause shall be the percentage obtained by dividing (A) the
outstanding principal amount of such Lender's Term Loans and LC Outstandings
plus such Lender's ratable portion of the Risk Participation Liability with
respect to outstanding Letters of Credit, by (B) the outstanding principal
amount of all Term Loans and LC Outstandings plus the aggregate amount of the
Risk Participation Liability with respect to outstanding Letters of Credit.
"Purchase Money Indebtedness" means Indebtedness (other than the
Obligations, but including Capitalized Lease Obligations), incurred at the time
of, or within 180 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
23
"Qualified Cash" means, as of any date of determination, the amount
of unrestricted cash and Cash Equivalents of Borrowers and their Restricted
Subsidiaries that is in Deposit Accounts or in Securities Accounts, or any
combination thereof, and which such Deposit Accounts or Securities Accounts are
the subject of Control Agreements and are maintained by branch offices of the
banks or securities intermediaries located within the United States.
"Qualified Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) other than a Multiemployer Plan (a) that is or was within
the last six years maintained or sponsored by any Borrower, any of its
Restricted Subsidiaries or any ERISA Affiliate or to which any Borrower, any of
its Restricted Subsidiaries or any ERISA Affiliate has within the last six years
made or was obligated to make, contributions, and (b) that is intended to be
tax-qualified under Section 401 (a) of the IRC.
"Real Property" means any fee estates in real property now owned or
hereafter acquired by any Borrower or any of its Restricted Subsidiaries,
together with all buildings, structures and the improvements thereto and all
licenses, easements and appurtenances relating thereto, wherever located..
"Real Property Collateral" means the Real Property identified on
Schedule X-x (as such Schedule may be amended or supplemented from time to time)
and any Real Property hereafter acquired by any Borrower or any of its
Restricted Subsidiaries.
"Record" means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Refinancing Indebtedness" means any Indebtedness of any Loan Party
issued in exchange for, or the net proceeds of which are used to extend,
refinance, renew, replace, defease, repay, prepay, redeem, retire or refund
other Indebtedness of Borrower or any of its Restricted Subsidiaries; provided,
that, other than with respect to the Obligations:
(a) the principal amount (or accreted value, if applicable) of such
Refinancing Indebtedness does not exceed the principal amount (or accreted
value, if applicable) of the Indebtedness extended, refinanced, renewed,
replaced, defeased, repaid, prepaid, redeemed, retired or refunded (plus all
accrued interest on such Indebtedness and the amount of all fees, expenses,
premiums and defeasance costs incurred in connection therewith);
(b) such Refinancing Indebtedness has a final maturity date no
earlier than the final maturity date of, and has a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased, repaid,
prepaid, redeemed, retired or refunded;
(c) if the Indebtedness being extended, refinanced, renewed,
replaced, defeased, repaid, prepaid, redeemed, retired or refunded is
subordinated in right of payment to the Obligations, such Refinancing
Indebtedness is subordinated in right of payment to the Obligations on terms at
least as favorable to the Lender Group as those contained in the documentation
governing the Indebtedness being extended, refinanced, renewed, replaced,
defeased, repaid, prepaid, redeemed, retired or refunded; and
(d) such Indebtedness is recourse solely to the Loan Parties which
are obligated on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded.
24
"Register" has the meaning specified therefor in Section 13.1(h).
"Remedial Action" means all actions required by Governmental
Authority or Environmental Law taken in response to a violation of Environmental
Laws to (a) clean up, remove, remediate, contain, treat, monitor, assess,
evaluate, or in any way address Hazardous Materials in the indoor or outdoor
environment, (b) prevent or minimize a release or threatened release of
Hazardous Materials so they do not migrate or endanger or threaten to endanger
public health or welfare or the indoor or outdoor environment, (c) restore or
reclaim natural resources or the environment, (d) perform any pre-remedial
studies, investigations, or post-remedial operation and maintenance activities,
or (e) conduct any other actions with respect to Hazardous Materials authorized
by Environmental Laws.
"Replacement Lender" has the meaning specified therefor in Section
14.2(a).
"Report" has the meaning specified therefor in Section 15.17.
"Required Lenders" means, at any time, Lenders whose aggregate Pro
Rata Shares (calculated under clause (c) of the definition of Pro Rata Shares)
exceed 50%.
"Reserve Percentage" means, on any day, for any Lender, the maximum
percentage prescribed by the Board of Governors of the Federal Reserve System
(or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"Restricted Subsidiary" means any Subsidiary of Parent (including
any Subsidiary formed or acquired after the Closing Date that is organized under
the laws of a jurisdiction of the United States of America or any state,
territory or subdivision thereof) other than the Unrestricted Subsidiaries.
"Risk Participation Liability" means, as to each Letter of Credit,
all reimbursement obligations of Borrowers to the Issuing Lender with respect to
an L/C Undertaking, consisting of (a) the amount available to be drawn or which
may become available to be drawn, (b) all amounts that have been paid by the
Issuing Lender to the Underlying Issuer to the extent not reimbursed by
Borrowers, whether by the making of an LC Obligation or otherwise, and (c) all
accrued and unpaid interest, fees, and reasonable expenses payable with respect
thereto.
"S&P" has the meaning specified therefore in the definition of Cash
Equivalents.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"Securities Account" means a "securities account" (as that term is
defined in the Code).
"Security Agreement" means a security agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by Borrowers
and Guarantors to Agent.
"Senior Notes" means the $270,000,000 aggregate principal amount of
9% Senior Secured Notes due 2011 issued by Altra Industrial as described in the
Indenture (as amended by the Indenture Supplement).
25
"Solvent" means, with respect to any Person on a particular date,
that, such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"Subsidiary" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns more than 50% of the shares of Stock having (without regard to any
contingency) ordinary voting power to elect a majority of the board of directors
(or appoint other comparable managers) of such corporation, partnership, limited
liability company, or other entity.
"Taxes" has the meaning specified therefor in Section 15.11.
"Tender Offer" has the meaning specified therefor in the recitals to
the Agreement.
"Term Loan A" has the meaning set forth in Section 2.2(a).
"Term Loan A Amount" means $6,805,000.
"Term Loan B" has the meaning set forth in Section 2.2(b).
"Term Loan B Amount" means $6,220,384.79.
"Term Loans" has the meaning set forth in Section 2.2(b).
"Trademark Security Agreement" has the meaning specified therefor in
the Security Agreement.
"Trustee" means the Bank of New York, N.A. in its capacity as
Trustee and Collateral Agent under the Indenture.
"Trust Funds" has the meaning specified therefor in Section 2.7(e).
"Underlying Issuer" means a third Person which is the beneficiary of
an L/C Undertaking and which has issued one or more of the Existing Letters of
Credit for the benefit of Borrowers.
"Underlying Letter of Credit" means a letter of credit that has been
issued by an Underlying Issuer.
"United States" means the United States of America.
"Unrestricted Subsidiary" means any Subsidiary of Parent that is
organized under the laws of a jurisdiction other than the United States of
America or any state, territory or subdivision thereof.
"Unsecured Indenture" means the Indenture dated as of February 8,
2006, by and among Altra Industrial, the domestic subsidiaries of Altra
Industrial party thereto and The Bank of New York, as trustee, pursuant to which
Altra Industrial has issued the Unsecured Notes.
26
"Unsecured Notes" means the 11-1/4% Senior Notes due 2013 issued by
Altra Industrial under the Unsecured Indenture.
"Unsecured Note Documents" means the Unsecured Indenture, the
Unsecured Notes, and all other documents, instruments and agreements executed or
delivered by any of Altra Industrial and its Subsidiaries in connection
therewith.
"Voidable Transfer" has the meaning specified therefor in Section
16.6.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing:
(a) the sum of the products obtained by multiplying (i) the
amount of each then remaining installment, sinking fund, serial maturity or
other required payments of principal, including payment at final maturity, in
respect of the Indebtedness, by (ii) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of such
payment; by
(b) the then outstanding principal amount of such
Indebtedness.
"Xxxxx Fargo" means Xxxxx Fargo Bank, National Association, a
national banking association.
"WFJF" means Xxxxx Fargo Foothill, Inc., a California corporation.
27
SCHEDULE 2.7(a)
CASH MANAGEMENT BANKS
M&TBank
00 X Xxxxxxx Xx
Xxxxxxxxx XX 00000
Commercial Checking accts:
9837038422
61000006143751
9837038398
F&M Trust
00 X Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Payroll acct 10-77376
HCSA 10-77384
7
SCHEDULE 2.12
EXISTING LETTERS OF CREDIT
LC #907342 (Obligation #91)
Beneficiary: Argonaut Insurance
Balance: $332,000.00
Issuance Date: 1.14.05
Expiration Date: 1.21.08
LC #907571 (Obligation #141)
Beneficiary: The Travelers Indemnity Company
Balance: $500,000.00
Issuance Date: 3.23.05
Expiration Date: 3.31.08
LC #907482 (Obligation #158)
Beneficiary: Bank of New York
Balance: $2,327,643.84
Issuance Date: 4.01.05
Expiration Date: 4.01.08
LC #907481 (Obligation #166)
Beneficiary: XX Xxxxxx Xxxxx
Balance: $3,049,315.00
Issuance Date: 4.01.05
Expiration Date: 4.01.08
LC #909008 (Obligation #224)
Beneficiary: Century Insurance
Balance: $300,000.00
Issuance Date: 4.13.06
Expiration Date: 3.31.08
BACKSTOP LETTERS OF CREDIT:
LC #NZS593997
Beneficiary: M and T Bank
Balance: $215,869
Issuance Date: 4/5/07
Expiration Date: 2/21/08
LC #NZS593996
Beneficiary: M and T Bank
Balance: $3,118,305.75
Issuance Date: 4/5/07
Expiration Date: 5/1/08
8
LC #NZS593995
Beneficiary: M and T Bank
Balance: $2,380,306.78
Issuance Date: 4/5/07
Expiration Date: 5/1/08
LC #NZS593998
Beneficiary: M and T Bank
Balance: $511,281.25
Issuance Date: 4/5/07
Expiration Date: 4/30/08
LC#NZS593971
Beneficiary: M and T Bank
Balance: 306,768.75
Issuance Date: 4/5/07
Expiration Date: 4/30/08
9
SCHEDULE 3.1
The obligation of each Lender to make its initial extension of credit
provided for in the Agreement is subject to the fulfillment, to the reasonable
satisfaction of Agent and each Lender (the making of such initial extension of
credit by any Lender being conclusively deemed to be its satisfaction or waiver
of the following), of each of the following conditions precedent:
(a) the Closing Date shall occur on or before April 5, 2007;
(b) Agent shall have received each of the following documents, in
form and substance reasonably satisfactory to Agent, duly executed, and each
such document shall be in full force and effect:
(i) a disbursement letter or funds flow statement regarding
the extensions of credit to be made on the Closing Date, the form and substance
of which is reasonably satisfactory to Agent,
(ii) the Fee Letter,
(iii) the Intercompany Subordination Agreement,
(iv) the Intercreditor Agreement,
(v) the Patent Security Agreement,
(vi) the Security Agreement, together with all certificates
representing the shares of Stock pledged thereunder except as provided in
Section 3.6(d), as well as Stock powers with respect thereto endorsed in blank,
and
(vii) the Trademark Security Agreement.
(c) Agent shall have received a certificate from Parent's Secretary
attesting that there exists no suit, action, investigation, or proceeding
(judicial or administrative) pending or, to Parent's knowledge, threatened
against any Loan Party or any of their respective Subsidiaries, which could
reasonably be expected to result in a Material Adverse Change;
(d) Agent shall have received a certificate from the Secretary of
each Borrower (i) attesting to the resolutions of such Borrower's Board of
Directors authorizing (x) its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Borrower is a party, (y)
authorizing specific officers of such Borrower to execute the same and (ii)
attesting to the incumbency and signatures of such specific officers of such
Borrower;
(e) Agent shall have received copies of each Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of such Borrower;
(f) Agent shall have received a certificate of status with respect
to each Borrower, dated within 30 days of the Closing Date, such certificate to
be issued by the appropriate officer of the jurisdiction of organization of such
Borrower, which certificate shall indicate that such Borrower is in good
standing in such jurisdiction (together with a bringdown certificate dated
within 1 day of the Closing Date);
(g) Agent shall have received certificates of status with respect to
each Borrower, each dated within 30 days of the Closing Date, such certificates
to be issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of such Borrower) in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Borrower is in good standing in such
jurisdictions;
(h) intentionally omitted;
(i) Agent shall have received an opinion or opinions of Borrowers'
counsel in form and substance reasonably satisfactory to Agent;
(j) intentionally omitted;
(k) Agent shall have completed its business, legal and collateral
due diligence, the results of which shall be satisfactory to Agent;
(l) Agent shall have received completed reference checks with
respect to Borrowers' senior management, and any required Patriot Act
compliance, the results of which are reasonably satisfactory to Agent in its
sole discretion;
(m) Agent shall have received a set of Projections for the 2 year
period following the Closing Date (on a month-by-month basis for the first year
and on a year by year basis for each year thereafter), in form and substance
(including as to scope and underlying assumptions) satisfactory to Agent;
(n) Borrowers shall have paid all Lender Group Expenses incurred in
connection with the transactions evidenced by this Agreement;
(o) Agent shall have received Uniform Commercial Code, tax lien and
litigation searches, the results of which shall be reasonably satisfactory to
Agent;
(p) Agent and its counsel shall be satisfied with the corporate
structure of Parent and its Subsidiaries;
(q) Borrowers and each of their respective Subsidiaries shall have
received all licenses, approvals or evidence of other actions required by any
Governmental Authority in connection with the execution and delivery by
Borrowers or their respective Subsidiaries of the Loan Documents or with the
consummation of the transactions contemplated thereby that are required by law
to be held or received;
(r) Agent shall have received evidence (reasonably satisfactory to
Agent) of the payment of the indebtedness under the M&T Facility, and
termination of any and all security interests related thereto; and
(s) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance satisfactory to Agent.
-2-
SCHEDULE 4.5(a)
INVENTORY AND EQUIPMENT STORED WITH BAILEES OR
WAREHOUSEMEN
NONE.
10
SCHEDULE 4.5(b)
LOCATIONS OF INVENTORY AND EQUIPMENT
XX XXXX'X CORPORATION
Headquarters:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
XX XXXX'X INCORPORATED
Main offices, warehouse Mechanical Division manufacturing plant:
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Electronics Division Offices and manufacturing plant
0000 Xxxxx Xxx Xxxx
Xxxxxxxxxxxx, XX 00000
000 X. Xxxxxxxxxx Xxx.
Xx. Xxxxxxxx, Xxxxxxxx 00000
0000 Xxxxxx Xxxxx Xxxx
Xxx Xxxxxx, XX 00000
Reno Nevada: Landlord: Xxxxxxx Industrial Group managed
by DP Partners
0000 Xxxxx Xxxxxx, 0000 Xxxxxxxxx Xxxx
Xxxx, XX 00000 Xxxx, XX 00000
PLANT ENGINEERING CONSULTANTS LLC
000 Xxxxxxx Xxxx Xxxxxxxx: XX Xxxx'x Incorporated leases this
Xxxxxxxxxxx, XX 00000 building from the Industrial Development
Board of the City of Chattanooga.
XX XXXX'X ENTERPRISES, INC.
Xxxxx 000, 000 Xxxxxxxx Xxxxxx Xxxxxxxx: PNC Bank, Delaware
Xxxxxxxxxx, Xxxxxxxx 00000
11
SCHEDULE 4.7(a)
STATES OF ORGANIZATION
ENTITY JURISDICTION OF ORGANIZATION
----------------------------------- -------------------------------------
XX Xxxx'x Corporation Delaware
XX Xxxx'x Incorporated Pennsylvania
Plant Engineering Consultants, LLC Tennessee
XX Xxxx'x Enterprises, Inc. Delaware
12
SCHEDULE 4.7(b)
CHIEF EXECUTIVE OFFICES
ENTITY CHIEF EXECUTIVE OFFICE
----------------------------------- -------------------------------------
XX Xxxx'x Corporation 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
XX Xxxx'x Incorporated 000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Plant Engineering Consultants, LLC 000 Xxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
XX Xxxx'x Enterprises, Inc. Xxxxx 000, 000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
13
SCHEDULE 4.7(c):
ORGANIZATIONAL IDENTIFICATION NUMBERS
ENTITY ORGANIZATIONAL IDENTIFICATION NUMBERS
----------------------------------- -------------------------------------
XX Xxxx'x Corporation 2531112
XX Xxxx'x Incorporated 394660
Plant Engineering Consultants, LLC 0154436
XX Xxxx'x Enterprises, Inc. 3102375
14
SCHEDULE 4.7(d):
COMMERCIAL TORT CLAIMS
None.
15
SCHEDULE 4.8(b):
CAPITALIZATION OF BORROWERS
ISSUED AND
ENTITY CLASS AUTHORIZED OUTSTANDING
----------------------------------- ------------------------ ---------- ------------------------
XX Xxxx'x Corporation common preferred 40,000,000 1,000
5,000,000 0
XX Xxxx'x Incorporated common 2,500,000 1,125,000
Plant Engineering Consultants, LLC LLC membership interests n/a 100% membership interest
XX Xxxx'x Enterprises, Inc. common 3,000 3,000
Options and Warrants:
Please see the grid attached.
16
COST OF AMT REC'D AT NET CASH TO BE
NAME # OF OPTIONS OPTIONS $24.80 REC'D (PRE-TAX)
------------ ------------ -------------- --------------- ---------------
Xxxxxxxx, T 10,300 $ 90,246.00 $ 255,440.00 $ 165,194.00
Xxxxxx, W -- $ -- $ -- $ --
Xxxx, R 4,200 $ 36,131.72 $ 104,160.00 $ 68,028.28
Xxxx, M 2,500 $ 20,063.73 $ 62,000.00 $ 41,936.27
Xxxxxxx, J 2,500 $ 20,063.73 $ 62,000.00 $ 41,936.27
Chien, A 43,500 $ 263,280.00 $ 1,078,800.00 $ 815,520.00
Coder, H 41,650 $ 402,250.00 $ 1,032,920.00 $ 630,670.00
Xxxx, T -- $ -- $ -- $ --
Xxxxx, L 18,200 $ 161,925.00 $ 451,360.00 $ 289,435.00
Xxxxx, W 127,000 $ 1,096,825.60 $ 3,149,600.00 $ 2,052,774.40
Xxxxx, T 77,300 $ 790,567.50 $ 1,917,040.00 $ 1,126,472.50
Giewont, W 5,500 $ 46,995.00 $ 136,400.00 $ 89,405.00
Xxxxxx, G 2,500 $ 43,500.00 $ 62,000.00 $ 18,500.00
Xxxxxxx, J 61,500 $ 570,700.00 $ 1,525,200.00 $ 954,500.00
Hurt, M -- $ -- $ -- $ --
Xxxxxxxx, W 7,000 $ 56,465.60 $ 173,600.00 $ 117,134.40
Xxxxxx, R 4,500 $ 37,825.00 $ 111,600.00 $ 73,775.00
Krediet, J 6,000 $ 98,000.00 $ 148,800.00 $ 50,800.00
Lazio, R 33,000 $ 286,500.00 $ 818,400.00 $ 531,900.00
MacGregor, A -- $ -- $ -- $ --
Xxxx, A 23,000 $ 192,100.00 $ 570,400.00 $ 378,300.00
Xxxxxx, S 3,000 $ 26,640.00 $ 74,400.00 $ 47,760.00
Xxxxxx, F 33,000 $ 286,500.00 $ 818,400.00 $ 531,900.00
XxxXxxxxx, S 3,000 $ 26,640.00 $ 74,400.00 $ 47,760.00
Xxxxxxxxx, E 500 $ 3,729.40 $ 12,400.00 $ 8,670.60
Xxxxxxxxx, C 18,000 $ 158,670.00 $ 446,400.00 $ 287,730.00
Xxxxxxx, J 39,000 $ 336,300.00 $ 967,200.00 $ 630,900.00
Xxxxxxxxx, M 6,000 $ 57,480.00 $ 148,800.00 $ 91,320.00
---------- -------------- --------------- --------------
572,650 $ 5,109,398.28 $ 14,201,720.00 $ 9,092,321.72
========== ============== =============== ==============
17
SCHEDULE 4.8(c):
CAPITALIZATION OF BORROWERS' RESTRICTED SUBSIDIARIES
See Schedule 4.8(b).
18
SCHEDULE 4.10:
LITIGATION
None.
19
SCHEDULE 4.13(a):
ERISA Plans
Xxxxx Employment Agreement
Chien Employment Agreement
Change in Control agreement executed for 10 salaried employees (Xxxxxxx; Coder;
Xxxx; San Xxxxxx; Xxxxx; Vevasis; Xxxxxx; Xxxx; Xxxxxxx; and Xxxxxx)
XX Xxxx'x -- Employment Termination of Exempt Salaried Employees (Severance
Policy)
Xxxxxxxxx Xxxxxxxxx Agreement
XX Xxxx'x Inc. Retirement Savings and Investment Plan
XX Xxxx'x Corporation Employee Stock Purchase Plan
XX Xxxx'x Incorporated Flexible Spending Account Plan
Group Medical Insurance (Highmark Blue Shield)
Group Dental Insurance (United Concordia Companies, Inc.)
Group Vision Coverage (Xxxxx Vision)
Group Life Insurance (The Hartford)
Long-term Disability Insurance (The Hartford)
Incentive Compensation Plan
XX Xxxx'x Corporation 1996 Stock-Based Incentive Compensation Plan
XX Xxxx'x Corporation 2006 Stock-Based Incentive Compensation Plan
XX Xxxx'x Incorporated Tuition Reimbursement Plan
Employee Assistance Plan
Driver Policy
20
SCHEDULE 4.14:
ENVIRONMENTAL MATTERS
4.14(a):
(a) Chambersburg, PA
(i) Air emissions should be logged as required by the
Pennsylvania Department of Environmental Protection ("PADEP").
(ii) Secondary containment and/or a monitoring system is
needed for three of the underground storage tanks and above-ground storage tanks
on site.
(b) San Marcos, TX
(i) A Spill Prevention, Control and Countermeasure Plan is
needed.
(ii) 2 above-ground storage tanks need secondary containment.
(c) Chattanooga, TN
(i) Drums should be properly labelled and need secondary
containment.
(d) Mt. Pleasant, MI
(i) Spill Prevention, Control and Countermeasure and Storm
Water Pollution Prevention plans need to be updated.
(ii) Storm water catch basins located in the truck xxxxx
discharge directly to the northern property boundary and are uncovered.
(iii) The cover of the cast iron turnings gondola should be
closed at all times except during filling or emptying.
(iv) 8 foot pit/shaft installed in the floor of the machining
area in the western portion of the building should be sealed.
4.14(b):
As with most industrial companies, the Company's operations and properties
are required to comply with, and are subject to liability under federal, state,
local and foreign laws, regulations and ordinances relating to the use, storage,
handling, generation, treatment, emission, release, discharge and disposal of
certain materials, substances and wastes. The nature of the Company's operations
exposes it to the risk of claims with respect to environmental matters.
21
The Asset Purchase Agreement for the Company's 1993 acquisition of the Mt.
Pleasant Facility from Xxxx Corporation (Xxxx) included an environmental
indemnity provision. Pursuant to this provision, Xxxx agreed to indemnify the
Company with respect to any environmental liabilities to the extent they arose
out of environmental conditions first occurring on or before the closing date,
including the presence or release of any hazardous substances at, in or under
the Mt. Pleasant Facility and with respect to the identification of the Mt.
Pleasant Facility as a CERCLIS No Further Action site and on the Michigan list
of inactive hazardous waste sites. Until March 2006, Xxxx conducted limited
remediation with respect to volatile organic compounds found in soils and
groundwater. Xxxx filed for bankruptcy in March 2006 and notified the Company
that it would no longer perform its remediation obligations. The Company
subsequently filed a proof of claim in the Bankruptcy Court in September 2006.
The Company has been notified by the Michigan Department of Environmental
Quality (MDEQ) that Xxxx is considered responsible for investigating and/or
remediating such environmental conditions at the property. Although the MDEQ has
not notified the Company that it is required to undertake remediation that Xxxx
had been performing, the Company may incur additional costs as a result of
Dana's bankruptcy and subsequent non-performance.
The Company believes that its facilities are in substantial compliance
with current regulatory standards applicable to air emissions under the Clean
Air Act Amendments of 1990 (CAAA). At this time, the Company cannot estimate
when other new air standards will be imposed or what technologies or changes in
processes the Company may have to install or undertake to achieve compliance
with any applicable new requirements at its facilities. The Company has no
reason to believe that such expenditures are likely to be material. Similarly,
based upon the Company's experience to date, the Company believes that the
future cost of currently anticipated compliance with existing environmental laws
relating to wastewater, hazardous waste and employee and community right-to-know
should not have a material adverse effect on the Company's financial condition.
4.14(c):
None.
4.14(d):
None.
22
SCHEDULE 4.17:
DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS
M&T Bank
00 X Xxxxxxx Xx
Xxxxxxxxx XX 00000
Commercial Checking accts:
9837038422
61000006143751
9837038398
F&M Trust
00 X Xxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Payroll acct 10-77376
HCSA 10-77384
AIM Investments
XX Xxx 0000
Xxxxxxx, XX 00000
Prime Private 10364
23
SCHEDULE 4.19:
PERMITTED INDEBTEDNESS
- Industrial Revenue Bonds, each of which are a XX Xxxx'x Incorporated
obligation in the amount of $2,290,000 in Chattanooga, TN and in the
amount of $3,000,000 in San Marcos, TX.
- Inter-company indebtedness described in Schedule P-2.
24
SCHEDULE 5.2
Provide Agent (and if so requested by Agent, with copies for each Lender)
with each of the documents set forth below at the following times in form
satisfactory to Agent:
Monthly
(a) an Account roll-forward with supporting details supplied from sales
journals, collection journals, credit registers and any other records, and
(b) Inventory system/perpetual reports specifying the cost and the
wholesale market value of Borrowers' and their Subsidiaries' Inventory, by
category, with additional detail showing additions to and deletions therefrom
(delivered electronically in an acceptable format, if Borrowers have implemented
electronic reporting).
Monthly (not later than the 15th day of each month)
I a Borrowing Base Certificate,
(d) a detailed aging, by total, of Borrowers' Accounts, together with a
reconciliation and supporting documentation for any reconciling items noted
(delivered electronically in an acceptable format, if Borrowers have implemented
electronic reporting),
(e) a detailed calculation of those Accounts that are not eligible for the
Borrowing Base, if Borrowers have not implemented electronic reporting,
(f) a detailed Inventory system/perpetual report together with a
reconciliation to Borrowers' general ledger accounts (delivered electronically
in an acceptable format, if Borrowers have implemented electronic reporting),
(g) a detailed calculation of Inventory categories that are not eligible
for the Borrowing Base, if Borrowers have not implemented electronic reporting,
(h) a summary aging, by vendor, of Borrowers' and their respective
Restricted Subsidiaries' accounts payable and any book overdrafts (delivered
electronically in an acceptable format, if Borrowers have implemented electronic
reporting) and an aging, by vendor, of any held checks,
(i) a detailed report regarding Borrowers' and their respective Restricted
Subsidiaries' cash and Cash Equivalents, including an indication of which
amounts constitute Qualified Cash,
(j) a monthly Account roll-forward, in a format acceptable to Agent in its
discretion, tied to the beginning and ending account receivable balances of
Borrowers' general ledgers,
(k) proof of payment of Borrowers' and their respective Restricted
Subsidiaries' applicable taxes, and
(l) a detailed summary of Loan Parties' fixed assets reflecting the book
value of Loan Parties' Real Property and Equipment.
Monthly (no later than the 30th day of each month)
(m) a reconciliation of Accounts, trade accounts payable, and Inventory of
Borrowers' and their respective Restricted Subsidiaries' general ledger accounts
to their monthly financial statements including any book reserves related to
each category.
Quarterly
(n) a report regarding Borrowers' and their respective Restricted
Subsidiaries' accrued, but unpaid, ad valorem taxes.
Annually
(o) a detailed list of Borrowers' and their respective Restricted
Subsidiaries' customers, with address and contact information.
Promptly, and in any event within 5 days after occurrence thereof
(p) if (i) any Borrower consigns any Inventory or sells any Inventory on
xxxx and hold, sale or return, sale on approval, or other conditional terms of
sale, (ii) such Inventory is included in the Borrowing Base immediately prior to
the time of such consignment or sale, and (iii) the aggregate amount of such
Inventory satisfying clauses (i) and (ii) above, after giving effect to any such
consignment or sale, exceeds $100,000, then Administrative Borrower shall
deliver notice thereof to Agent describing the Inventory so consigned or sold
and shall deliver to Agent a pro forma Borrowing Base Certificate reflecting the
reduction in the Borrowing Base resulting from such consignment or sale (unless
Agent determines, in its Permitted Discretion, that such Inventory shall remain
in the Borrowing Base), and
(q) if (i) any Borrower or Restricted Subsidiary stores any Inventory or
Equipment with a bailee, warehouseman or similar party, (ii) such Inventory or
Equipment is included in the Borrowing Base immediately prior to the time of
such storage with a bailee, warehouseman or similar party, and (iii) the
aggregate amount of such Inventory and/or Equipment satisfying clauses (i) and
(ii) above, after giving effect to any such storage with a bailee, warehouseman
or similar party, exceeds $100,000, then Administrative Borrower shall deliver
notice thereof to Agent describing the Inventory or Equipment so stored with a
bailee, warehouseman or similar party and shall deliver to Agent a pro forma
Borrowing Base Certificate reflecting the reduction in the Borrowing Base
resulting from such storage with a bailee, warehouseman or similar party (unless
Agent determines, in its Permitted Discretion, that such Inventory or Equipment
shall remain in the Borrowing Base).
Upon request by Agent
I such other reports as to the Collateral or the financial condition of
Borrowers and their respective Restricted Subsidiaries, as Agent may reasonably
request.
SCHEDULE 5.3
Deliver to Agent, with copies to each Lender, each of the financial
statements, reports, or other items set forth set forth below at the following
times in form satisfactory to Agent:
Monthly (not later than 30 days after the end of each month)
(a) an unaudited consolidated and consolidating balance sheet, income
statement, and statement of cash flow covering Parent's and its Subsidiaries'
operations during the prior month, and
(b) a Compliance Certificate.
Quarterly (not later than 60 days after the end of each fiscal quarter of
Parent)
I an unaudited consolidated and consolidating balance sheet, income
statement, and statement of cash flow covering Parent's and its Subsidiaries'
operations during the prior fiscal quarter and during the period commencing on
the first day of the applicable fiscal year and ending on the last day of the
prior quarter,
(d) a Compliance Certificate, and
(e) to the extent not delivered pursuant to clause (i) or (j) below,
copies of Material Contracts entered into since the delivery of the previous
Compliance Certificate, together with any material amendments to any existing
Material Contracts entered into since the delivery of the previous Compliance
Certificate.
Annually (not later than 90 days after the end of each of Parent's fiscal years)
(f) consolidated and consolidating financial statements of Parent and its
Subsidiaries for each such fiscal year, certified by the chief financial officer
of Parent to have been prepared in accordance with GAAP (such financial
statements to include a balance sheet, income statement, and statement of cash
flow and, if prepared, such accountants' letter to management), and
(g) a Compliance Certificate.
Annually (not later than 15 days after the start of each of Parent's fiscal
years)
(h) copies of Borrowers' Projections, in form and substance (including as
to scope and underlying assumptions) satisfactory to Agent, in its Permitted
Discretion, for the forthcoming fiscal year, quarter by quarter, certified by
the chief financial officer of Parent as being such officer's good faith
estimate of the financial performance of Borrowers during the period covered
thereby.
If and when filed by any Borrower,
(i) Form 10-Q quarterly reports, Form 10-K annual reports, and Form 8-K
current reports,
(j) any other filings made by any Borrower with the SEC (and, to the
extent not included in any such filings, Borrowers shall promptly provide Agent
with true and complete copies of any and all material documents delivered to any
Person pursuant to, or in connection with, the Acquisition Documents and the
Indenture Documents), and
(k) any other information that is provided by any Borrower to its
shareholders generally.
Promptly, but in any event within 5 days after any Borrower or any of its
Subsidiaries has knowledge of any event or condition that constitutes a Default
or an Event of Default, thereto.
(l) notice of such event or condition and a statement of the curative
action that Borrowers propose to take with respect
Promptly after the commencement thereof, but in any event within 5 days after
the service of process with respect thereto on Parent, any Borrower or any of
their respective Restricted Subsidiaries,
(m) notice of all actions, suits, or proceedings brought by or against
Parent, any Borrower or any of their respective Restricted Subsidiaries before
any Governmental Authority which reasonably could be expected to result in a
Material Adverse Change.
upon the request of Agent,
(n) any other information reasonably requested relating to the financial
condition of Borrowers or their respective Restricted Subsidiaries.
