Exhibit 4
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CREDIT AGREEMENT
among
ALPHA TECHNOLOGIES GROUP, INC.
THE LENDERS PARTIES HERETO
UNION BANK OF CALIFORNIA, N.A.
as Sole Lead Arranger
and
UNION BANK OF CALIFORNIA, N.A.
as Administrative Agent
Dated as of December 26, 2000
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TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................... 1
1.1 Defined Terms......................................................... 1
1.2 Other Definitional Provisions......................................... 17
SECTION 2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT; COMMITMENT AMOUNTS... 18
2.1 Revolving Loans and Letters of Credit; Revolving Loan Commitments..... 18
2.2 Term Loans; Term Loan Commitments..................................... 20
2.3 Issuance of Letters of Credit......................................... 22
2.4 Optional Prepayments; Optional Commitment Reductions.................. 24
2.5 Mandatory Prepayments................................................. 25
2.6 Conversion and Continuation Options................................... 26
2.7 Minimum Amounts of Tranches; Minimum Borrowings....................... 27
2.8 Interest Rates and Payment Dates...................................... 27
2.9 Computation of Interest and Fees...................................... 28
2.10 Inability to Determine Interest Rate.................................. 28
2.11 Pro Rata Treatment and Payments....................................... 28
2.12 Illegality............................................................ 29
2.13 Increased Costs....................................................... 29
2.14 Taxes................................................................. 30
2.15 Indemnity............................................................. 31
2.16 Mitigation of Costs................................................... 31
2.17 Unused Commitment Fee................................................. 31
SECTION 3. REPRESENTATIONS AND WARRANTIES........................................ 32
3.1 Financial Condition................................................... 32
3.2 Corporate Existence; Compliance with Law.............................. 32
3.3 Corporate Power; Authorization; Enforceable Obligations............... 33
3.4 No Legal Bar.......................................................... 33
3.5 No Material Litigation................................................ 33
3.6 Ownership of Property; Liens; Condition of Properties................. 34
3.7 Intellectual Property................................................. 34
3.8 Taxes................................................................. 34
3.9 Federal Regulations................................................... 34
3.10 ERISA Compliance...................................................... 35
3.11 Investment Company Act; Public Utility Holding Company Act............ 35
3.12 Subsidiaries.......................................................... 35
3.13 Purpose of Loans and Letters of Credit................................ 35
3.14 Accuracy and Completeness of Information.............................. 36
3.15 Real Property Assets.................................................. 36
3.16 Permits, Etc.......................................................... 36
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3.17 Nature of Business.................................................... 36
3.18 Insolvency............................................................ 36
3.19 Labor Matters......................................................... 37
3.20 Condemnation.......................................................... 37
3.21 Representations and Warranties in Acquisition Agreement............... 37
SECTION 4. CONDITIONS PRECEDENT.................................................. 37
4.1 Conditions to Closing Date............................................ 37
4.2 Conditions to Each Loan or Letter of Credit........................... 41
SECTION 5. AFFIRMATIVE COVENANTS................................................. 42
5.1 Financial Statements.................................................. 42
5.2 Certificates; Other Information....................................... 42
5.3 Payment of Obligations................................................ 44
5.4 Conduct of Business and Maintenance of Existence...................... 44
5.5 Maintenance of Property; Insurance.................................... 44
5.6 Inspection of Property; Books and Records; Discussions................ 45
5.7 Use of Proceeds....................................................... 45
5.8 Interest Rate Protection.............................................. 46
5.9 Acquisition of Real Property.......................................... 46
5.10 Lease and License Compliance.......................................... 46
5.11 Employee Contracts.................................................... 46
5.12 Guaranties, Etc....................................................... 46
5.13 Colmar Liquidating.................................................... 47
SECTION 6. NEGATIVE COVENANTS.................................................... 47
6.1 Financial Condition Covenants......................................... 47
6.2 Limitation on Indebtedness............................................ 48
6.3 Limitation on Liens................................................... 49
6.4 Limitation on Fundamental Changes..................................... 49
6.5 Limitation on Sale of Assets.......................................... 50
6.6 Limitation on Restricted Payments..................................... 50
6.7 Limitation on Investments, Loans and Advances......................... 50
6.8 Management Fees....................................................... 50
6.9 Transactions with Affiliates.......................................... 50
6.10 Fiscal Year........................................................... 51
6.11 Sale-Leaseback Transactions; Lease Obligations........................ 51
6.12 Unfunded Liabilities.................................................. 51
6.13 Line of Business...................................................... 51
SECTION 7. EVENTS OF DEFAULT..................................................... 51
SECTION 8. THE AGENT............................................................. 54
8.1 Appointment........................................................... 54
8.2 Delegation of Duties.................................................. 54
8.3 Exculpatory Provisions................................................ 54
8.4 Reliance by Agent..................................................... 55
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8.5 Notice of Default..................................................... 55
8.6 Non-Reliance on Agent and Other Lenders............................... 55
8.7 Indemnification....................................................... 56
8.8 Agent in Its Individual Capacity...................................... 56
8.9 Successor Agent....................................................... 57
8.10 Duties of Arranger.................................................... 57
SECTION 9. MISCELLANEOUS......................................................... 57
9.1 Amendments and Waivers................................................ 57
9.2 Notices............................................................... 58
9.3 No Waiver; Cumulative Remedies........................................ 58
9.4 Survival of Representations and Warranties............................ 58
9.5 Payment of Expenses and Taxes......................................... 58
9.6 Successors and Assigns; Participation; Purchasing Lenders............. 59
9.7 Adjustments; Set-Off.................................................. 62
9.8 Counterparts.......................................................... 63
9.9 Severability.......................................................... 63
9.10 Integration........................................................... 63
9.11 GOVERNING LAW......................................................... 63
9.12 Alternative Dispute Resolution........................................ 63
9.13 Acknowledgements...................................................... 63
9.14 Headings.............................................................. 65
9.15 Confidentiality....................................................... 65
9.16 Copies of Certificates, Etc........................................... 65
Exhibits
A Form of Revolving Note
B Form of Term Note
C Form of No Default/Representation Certificate
D Form of Continuation Notice
E Form of Borrowing Notice
F Form of Assignment and Acceptance
G Form of Borrowing Base Certificate
H Form of Covenant Compliance Certificate
I Forms of Letter of Credit Requests
Schedules
2.3 Certain Letter of Credit Fees
3.1 Qualification Jurisdictions
3.5 Litigation
3.6 Legal and Operating Names
3.12 Subsidiaries
3.15 Real Property
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CREDIT AGREEMENT
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THIS CREDIT AGREEMENT, dated as of December 26, 2000, among ALPHA
TECHNOLOGIES GROUP, INC., a Delaware corporation (the "Borrower"), the several
banks and other financial institutions from time to time parties to this
Agreement (the "Lenders"), UNION BANK OF CALIFORNIA, N.A. ("UBOC") as Sole Lead
Arranger, and UBOC, as administrative agent for the Lenders (in such capacity,
the "Agent").
RECITALS
--------
A. The Borrower has entered into a Stock Purchase Agreement dated as of
September 18, 2000 with Mestek, Inc., a Pennsylvania corporation (the "Seller"),
as amended by Amendment No. 1 dated as of November 10, 2000 (as it may be
further amended or otherwise modified from time to time in accordance with the
terms hereof, the "Acquisition Agreement"), pursuant to which the Borrower will
acquire (such transaction, the "NNE Acquisition") all of the issued and
outstanding shares of National Northeast Corporation, a Delaware corporation
("NNE").
B. The Borrower has requested that the Lenders make available to it term
loan, revolving loan and letter of credit facilities for its use in consummating
the NNE Acquisition, and for its general corporate purposes and other purposes
as more fully set forth below.
C. The Lenders are willing to make available such facilities on the terms
and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings:
"Accountants": Xxxxx Xxxxxxxx, LLP, or such other firm of independent
certified public accountants of recognized national standing as shall be
selected by the Borrower and reasonably satisfactory to the Agent.
"Accounts Receivable": the unpaid portion of obligations owing to the
Borrower or any Subsidiary, payable in Dollars, arising out of the sale of
Inventory by the Borrower or any Subsidiary.
"Acquisition Agreement": as defined in the Recitals hereto.
"Affiliate": as to any Person, (a) any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person or (b) any Person who is a
director, officer, shareholder, member or partner (i) of such Person, (ii) of
any Subsidiary of such Person or (iii) of any Person described in the preceding
clause (a). For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (i) vote securities having 10% or more
of the ordinary voting power for the election of directors of such Person or
(ii) direct or cause the direction of the management and policies of such Person
whether by contract or otherwise.
"Agent": as defined in the preamble hereto.
"Aggregate Revolving Loan Commitment": the sum of the Revolving Loan
Commitments set forth on the signature pages hereof.
"Aggregate Term Loan Commitment": the sum of the Term Loan Commitments set
forth on the signature pages hereof.
"Aggregate Total Commitment": the sum of the Aggregate Revolving Loan
Commitment and the Aggregate Term Loan Commitment.
"Aggregate Total Commitment Percentage": with respect to each Lender, the
percentage equivalent of the ratio which such Lender's Commitments bears to the
Aggregate Total Commitment.
"Agreement": this Credit Agreement, as amended, waived, supplemented or
otherwise modified from time to time.
"Applicable Lending Office": for any Lender, its offices for LIBOR Loans
and Base Rate Loans and for participations in Letters of Credit specified on the
signature pages hereof or in the Assignment and Acceptance pursuant to which it
became a party hereto, as the case may be, any of which offices may, upon 10
days' prior written notice to the Agent and the Borrower, be changed by such
Lender.
"Applicable Margin": for LIBOR Loans, Base Rate Loans and commitment fees,
as applicable, subject to Section 2.8(d), as set forth below:
Leverage Level LIBOR Margin Base Rate Margin Commitment Fee
--------------------- ----------------------- --------------------------- ---------------------
1 (*1.50) 2.00% per annum 0.25% per annum 0.250% per annum
2 (**1.50 *2.00) 2.25% per annum 0.50% per annum 0.375% per annum
3 (**2.00 *2.50) 2.50% per annum 0.75% per annum 0.500% per annum
4 (**2.50) 2.75% per annum 1.00% per annum 0.500% per annum
--------------------
* Less than or equal to
** Greater than
Notwithstanding the foregoing, during the period from and including the
Closing Date to but excluding the fifth day after the day on which the Agent
receives certified financial statements and a Covenant Compliance Certificate in
accordance with Section 5.1(b) and 5.2(a) for the Borrower's Second Quarter
2001, the Applicable Margin for each Type of Loan and for commitment fees shall
be not less than that set forth for Leverage Level 3.
"Asset Disposition": the sale, sale and leaseback, transfer, conveyance,
exchange, long-term lease accorded sales treatment under GAAP or similar
disposition (including by means of a merger, consolidation, amalgamation, joint
venture or other substantive combination) of any of the Properties, business or
assets (other than marketable securities, including "margin stock"
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within the meaning of Regulation U, liquid investments and other financial
instruments but, including, without limitation, the assignment of any lease,
license or permit relating to the Properties) of the Borrower or any of its
Subsidiaries to any Person or Persons other than to the Borrower or any of its
Subsidiaries; provided that Asset Dispositions shall not include the sale of
inventory in the ordinary course of business.
"Assignment and Acceptance": an Assignment and Acceptance in the form of
Exhibit F to this Agreement.
"Available Excess Cash Flow": with respect to any Fiscal Year of the
Borrower, the amount of Excess Cash Flow remaining after repayment of the Loans
(and the making of any Cash Collateral Deposit) required by Section 2.5(d).
"Available Revolving Loan Commitment": with respect to each Lender on the
date of determination thereof, the amount by which (a) the Revolving Loan
Commitment of such Lender on such date exceeds (b) the principal sum of such
Lender's (i) Revolving Loans outstanding, (ii) Revolving Loan Commitment
Percentage of the aggregate Letter of Credit Amount of all Letters of Credit
outstanding and (iii) Revolving Loan Commitment Percentage of the aggregate
amount of unreimbursed drawings under all Letters of Credit on such date.
"Base Rate": for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Reference Rate in effect
on such day and (b) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. "Reference Rate" shall mean the rate of interest per annum publicly
announced from time to time by Union Bank of California, N.A. as its "reference
rate" in effect at its office in Los Angeles, California. "Federal Funds
Effective Rate" shall mean, for any day, the weighted average of the rates on
overnight federal funds transactions with members of the Federal Reserve System
arranged by federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
the day of such transactions received by the Agent from three federal funds
brokers of recognized standing selected by it. If, for any reason, the Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate for any
reason, including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall be
determined without regard to clause (b) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist. Any
change in the Base Rate due to a change in the Reference Rate or the Federal
Funds Effective Rate shall be effective on the effective date of such change in
the Reference Rate or the Federal Funds Effective Rate, respectively.
"Base Rate Loans": Loans the rate of interest applicable to which is based
upon the Base Rate.
"Borrower": as defined in the preamble hereto.
"Borrowing Base": as at any date of determination, an amount equal to 85%
of Eligible Accounts Receivable.
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"Borrowing Base Certificate": a certificate, duly executed by a
Responsible Officer, substantially in the form of Exhibit G hereto.
"Borrowing Notice": a notice from the Borrower to the Agent requesting a
borrowing of Loans, substantially in the form of Exhibit E hereto.
"Business Day": a day other than a Saturday, Sunday or other day on which
commercial banks in the State of California are authorized or required by law to
close and which, in the case of a LIBOR Loan, is a Eurodollar Business Day.
"Capital Expenditures": for any period, collectively, for any Person, the
aggregate of all expenditures which are made during such period (whether paid in
cash or accrued as liabilities), and all contractual commitments for such
expenditures which are entered into during such period (provided that if any
such commitment is included in one fiscal year, the actual payment in a later
fiscal year shall not be included in such later fiscal year), by such Person,
for property, plant or equipment and which would be reflected as additions to
property, plant or equipment on a balance sheet of such Person prepared in
accordance with GAAP (including all Capitalized Lease Obligations).
"Capitalized Lease Obligations": obligations for the payment of rent for
any real or personal property under leases or agreements to lease that, in
accordance with GAAP, have been or should be capitalized on the books of the
lessee and, for purposes hereof, the amount of any such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Capital Stock": any and all shares, interests, participation or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation), any and
all warrants, options or rights to purchase or any other securities convertible
into any of the foregoing.
"Cash Collateral Deposit": cash deposits made by the Borrower to the
Agent, to be held by the Agent as Collateral pursuant to the Security Agreement,
for the reimbursement of drawings under Letters of Credit.
"Cash Equivalents": investments having a maturity of not greater than 3
months from the date of acquisition thereof in (a) obligations issued or
unconditionally guaranteed by the United States of America or any agency
thereof, (b) certificates of deposit of any commercial bank organized under the
laws of the United States of America or any state thereof and having combined
capital and surplus of at least $1 billion, (c) commercial paper with a rating
of at least Prime-1 by Xxxxx'x Investors Service, Inc. or A-1 by Standard &
Poor's Ratings Group or (d) other investments agreed to from time to time
between the Borrower and the Agent.
"Closing Date": the date, which shall be on or before January 15, 2001, on
which the conditions set forth in Section 4.1 are satisfied and the initial Loan
is made.
"Code": the Internal Revenue Code of 1986, as amended from time to time.
"Collateral": all of the property (tangible or intangible) purported to be
subject to the lien or security interest purported to be created by any
mortgage, deed of trust, security agreement,
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pledge agreement, assignment or other security document heretofore or hereafter
executed by the Borrower as security for all or part of the Obligations.
"Collateral Documents": the Security Agreement, the Mortgage, all notices
of security interests in deposit accounts and all control agreements requested
by the Agent pursuant to the Security Agreement, Form UCC-1 Financing Statements
and amendments thereto and any other document encumbering the Collateral or
evidencing or perfecting a security interest therein for the benefit of the
Lenders executed by the Borrower, as the same may be amended or modified from
time to time in accordance with the terms hereof.
"Colmar Liquidating": Colmar Liquidating Corp., a Delaware corporation
(formerly known as Malco Technologies, Inc., a Delaware corporation).
"Commitment": a Revolving Loan Commitment or a Term Loan Commitment, as
applicable.
"Commonly Controlled Entity": as to any Person, an entity, whether or not
incorporated, which is under common control with such Person within the meaning
of Section 4001 of ERISA or is part of a group which includes such Person and
which is treated as a single employer under Section 414 of the Code.
"Continuation Notice": a request for continuation or conversion of a Loan
as set forth in Section 2.6, substantially in the form of Exhibit D.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Covenant Compliance Certificate": a certificate of the Chief Financial
Officer of the Borrower substantially in the form of Exhibit H hereto.
"Default": any of the events specified in Section 7, whether or not any
requirement for the giving of notice, the lapse of time, or both, or any other
condition, has been satisfied.
"Dollars" and "$": dollars in lawful currency of the United States.
"EBITDA": for the Borrower and its Subsidiaries on a consolidated basis,
for the fiscal quarter most recently ended and the immediately preceding three
fiscal quarters, Net Income after eliminating extraordinary gains and losses,
plus (i) provisions for income taxes, (ii) depreciation and amortization and
(iii) Interest Expense.
"Eligible Accounts Receivable": Accounts Receivable (net of finance
charges) (i) for which fewer than 90 days have elapsed since the date of
invoice, (ii) which are less than 60 days past-due, (iii) which are covered by a
perfected first-priority security interest in favor of the Agent for the benefit
of the Lenders and (iv) which comply with all the Borrower's representations and
warranties in the Loan Documents; provided, however, that Eligible Accounts
Receivable shall not include the following:
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(a) Accounts Receivable with respect to which the account debtor is an
officer, employee, agent, Subsidiary or Affiliate of any Loan Party;
(b) Accounts Receivable with respect to which the account debtor is not a
Person resident in the United States;
(c) Accounts Receivable with respect to which the account debtor is the
United States or any department, agency or instrumentality of the United States;
(d) Accounts Receivable with respect to which the account debtor is any
state of the United States or any county, city, town, municipality or other
division of such state;
(e) that arises from a xxxx-and-hold, guaranteed sale, sale-and-return,
sale on approval, consignment or any other repurchase or return basis or is
evidenced by chattel paper;
(f) for which the goods giving rise to such Account Receivable have not
been shipped and delivered to and accepted by the buyer or the services giving
rise to such Account Receivable have not been performed by the Borrower or any
Subsidiary and accepted by the buyer or the Account Receivable otherwise does
not represent a final sale;
(g) that portion of the aggregate Accounts Receivable owed to the Loan
Parties by any single account debtor that exceeds 15%;
(h) Accounts Receivable with respect to which the account debtor disputes
liability or makes any claim, in whole or in part;
(i) Accounts Receivable due from a particular account debtor if any event
of the types described in Section 7.1(g) occurs with respect to such account
debtor;
(j) Accounts Receivable due from a particular account debtor with respect
to which 25% or more of the aggregate amount of its Accounts Receivable is 90
days or more past-due; or
(k) Accounts Receivables that are not satisfactory to the Agent, in its
sole discretion, using reasonable business judgment.
"Environmental Indemnity": the Environmental Indemnity dated as of the
Closing Date made by the Borrower in favor of the Agent, for the benefit of the
Lenders, as it may be amended or modified in accordance with the terms hereof.
"Equity Offering": the sale or issuance (or reissuance) by the Borrower or
any Subsidiary of any equity interests or beneficial interests (common stock,
preferred stock, partnership interests, member interests or otherwise) or any
options, warrants, convertible securities or other rights to purchase such
equity interests or beneficial interests.
"ERISA": the Employee Retirement Income Security Act of 1974, as amended
from time to time.
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"ERISA Affiliate": as to any Person, each trade or business including such
Person, whether or not incorporated, which together with such Person would be
treated as a single employer under Section 4001(a)(14) of ERISA.
"Eurodollar Business Day": any day on which banks are open for dealings in
Dollar deposits in the London interbank market.
"Event of Default": any of the events specified in Section 7, provided
that any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
"Excess Cash Flow": for any period, for the Borrower and its Subsidiaries
on a consolidated basis, an amount equal to EBITDA for such period, less, during
such period (in each case, without duplication), (i) Interest Expense for such
period, (ii) regularly scheduled principal payments due on Indebtedness during
such period (excluding optional and mandatory prepayments due under Sections
2.4 and 2.5), including the principal component of Capitalized Lease
Obligations, (iii) cash taxes paid or due and payable for such period, (iv)
Capital Expenditures, (v) increases (or plus decreases) in Net Working
Investment and (vi) optional prepayments of Revolving Loans, if any, made by the
Borrower prior to Fiscal Year End 2001.
"Excluded Taxes": all taxes imposed on or by reference to the net income
of the Agent, or any Lender or its Applicable Lending Office by any Governmental
Authority and all franchise taxes, taxes on doing business or taxes measured by
capital or net worth imposed on the Agent or on any Lender or its Applicable
Lending Office by any Governmental.
"Financial Statements": as defined in Section 3.1(a) hereof.
"First Quarter End": with respect to any fiscal year of the Borrower, the
last day of the first quarter of such fiscal year; and "First Quarter" shall
mean the first fiscal quarter of the Borrower so ending.
"Fiscal Year End": with respect to any fiscal year of the Borrower, the
last day of such fiscal year (which occurs on the last Sunday in October of such
year); and "Fiscal Year" shall mean the Borrower's fiscal year so ending.
"Fixed Charge Coverage Ratio": for the Borrower and its Subsidiaries on a
consolidated basis for the fiscal quarter most recently ended and the
immediately preceding three fiscal quarters, the ratio of (a) EBITDA to (b)
Fixed Charges for such period.
"Fixed Charges": with respect to any period, for the Borrower and its
Subsidiaries on a consolidated basis, the sum of (i) Interest Expense for such
period, (ii) regularly scheduled principal payments due on Indebtedness during
such period (excluding optional and mandatory prepayments due under Sections
2.4 and 2.5), including the principal component of Capitalized Lease
Obligations, (iii) Capital Expenditures for such period, (iv) Restricted
Payments made during such period and (v) cash taxes paid or due and payable for
such period.
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"Funded Debt": the sum of the outstanding principal balance of all
Indebtedness of the Borrower and its Subsidiaries described in clauses (i),
(ii), (iii), (iv), (vi) and (vii) of the definition of "Indebtedness" set forth
herein.
"GAAP": generally accepted accounting principles in the United States in
effect from time to time. If, at any time, GAAP changes in a manner which will
materially affect the calculations determining compliance by the Borrower with
any of its covenants in Section 6.1, such covenants shall continue to be
calculated in accordance with GAAP in effect prior to such changes in GAAP.
"Governmental Authority": any nation or government, any federal, state or
other political subdivision thereof and any federal, state or local entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guarantee Obligation": as to any Person (the "guaranteeing person"), any
obligation of (a) the guaranteeing person or (b) another Person (including,
without limitation, any bank under any letter of credit) which Person the
guaranteeing person has agreed to reimburse or indemnify for undertaking such
obligation in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds for the purchase or payment of any such primary
obligation or to maintain working capital or equity capital of the primary
obligor or otherwise to maintain the net worth or solvency of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the owner of any such primary obligation against loss
in respect thereof; provided, however, that the term Guarantee Obligation shall
not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee Obligation of any
guaranteeing person shall be deemed to be the lesser of (a) an amount equal to
the stated or determinable amount of the primary obligation in respect of which
such Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guarantee Obligation, unless such primary obligation and the
maximum amount for which such guaranteeing person may be liable are not stated
or determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by the Borrower in good faith.
"Guarantees": each guarantee made by a Guarantor in favor of the Agent,
for the benefit of the Lenders, in form and substance satisfactory to the Agent,
as the same may be amended, modified or restated from time to time in accordance
with the terms hereof.
"Guarantor Collateral": all of the property (tangible or intangible)
purported to be subject to the lien or security interest purported to be created
by any mortgage, deed of trust, security agreement, pledge agreement, assignment
or other security document heretofore or hereafter executed by any Guarantor as
security for all or part of any Guarantee.
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"Guarantor Collateral Documents": the Guarantor Security Agreements, all
notices of security interests in deposit accounts and all control agreements
requested by the Agent pursuant to the Guarantor Security Agreements, Form UCC-1
Financing Statements and amendments thereto and any other document encumbering
the Guarantor Collateral or evidencing or perfecting a security interest therein
for the benefit of the Lenders executed by a Guarantor, as the same may be
amended, modified or restated from time to time in accordance with the terms
hereof.
"Guarantor Security Agreements": each security agreement made by a
Guarantor in favor of the Agent, for the benefit of the Lenders, on the Closing
Date or pursuant to Section 5.12, in form and substance satisfactory to the
Agent, as the same may be amended, modified or restated in accordance with the
terms hereof.
"Guarantors": each Subsidiary which executes a Guarantee in favor of the
Agent, for the benefit of the Lenders, on the Closing Date or pursuant to
Section 5.12.
"Hedging Agreements": as defined in the definition of "Hedging
Obligations" in this Section 1.1.
"Hedging Obligations": of any Person, any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, commodity prices,
exchange rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including dollar-denominated or cross-currency
interest rate exchange agreements, forward currency exchange agreements,
interest rate cap or collar protection agreements, forward rate currency or
interest rate options, puts and warrants or any similar derivative transactions
("Hedging Agreements"), and (ii) any and all cancellations, buy-backs,
reversals, terminations or assignments of any of the foregoing.
"Indebtedness": of any Person, (i) all indebtedness of such Person for
borrowed money or for the deferred purchase price of property or services, (ii)
all obligations of such Person evidenced by notes, bonds, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional-sale or other title-retention agreement with respect to property
acquired by such Person, (iv) all Capitalized Lease Obligations of such Person,
(v) all Hedging Obligations of such Person, (vi) all obligations, contingent or
otherwise, of such Person under acceptance, letter of credit or similar
facilities, (vii) all mandatory redemption, repurchase or dividend obligations
of such Person with respect to Capital Stock, (viii) all Guarantee Obligations
of such Person in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to secure a credit against loss in
respect of, indebtedness or obligations of others of the kinds referred to in
clause (i), (ii), (iii), (iv), (v), (vi) or (vii) above and (viii) all
liabilities in respect of unfunded vested benefits under plans covered by Title
IV of ERISA.
"Insolvency": with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.
9
"Insolvent": pertaining to a condition of Insolvency.
"Interest Expense": as of any date, for the fiscal quarter most recently
ended and the immediately preceding three fiscal quarters, the sum of (i) the
amount of all interest on Funded Debt which was paid, payable and/or accrued for
such period, (ii) all commitment, standby letter of credit, commercial letter of
credit or line of credit fees paid, payable and/or accrued for such period to
any lender in exchange for such lender's commitment to lend and (iii) net
amounts payable (or receivable) under all Hedging Agreements; provided, however,
that if, as at any date (a "calculation date"), fewer than four complete
consecutive fiscal quarters have elapsed subsequent to the Closing Date,
Interest Expense shall be calculated only for the portion of such period
commencing on the Closing Date and ending on the calculation date and shall then
be annualized by multiplying the amount of such Interest Expense by a fraction,
the numerator of which is 365 and denominator of which is the number of days
during the period commencing on the day immediately following the Closing Date
through and including the calculation date.
"Interest Payment Date": (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while any such Loan is
outstanding, (b) as to any LIBOR Loan having an Interest Period of three months
or less, the last day of such Interest Period, (c) as to any LIBOR Loan having
an Interest Period longer than three months, each day which is at the end of
each three month-period within such Interest Period after the first day of such
Interest Period and the last day of such Interest Period and (d) for each of
(a), (b) and (c) above, the day on which any such Loan becomes due and payable
in full or is paid or prepaid in full.
"Interest Period": with respect to any LIBOR Loan:
(l) initially, the period commencing on the borrowing or conversion date,
as the case may be, with respect to such LIBOR Loan and ending one, two, three
or six months thereafter, as selected by the Borrower in its notice of borrowing
or its Continuation Notice, as the case may be, given with respect thereto; and
(m) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such LIBOR Loan and ending one, two,
three or six months thereafter, as selected by the Borrower by irrevocable
notice to the Agent not less than three Eurodollar Business Days prior to the
last day of the then current Interest Period with respect thereto;
provided that, all of the foregoing provisions relating to Interest Periods are
subject to the following:
(i) if any Interest Period pertaining to a LIBOR Loan would otherwise
end on a day that is not a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless the result of such extension would be
to carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period for any Loan that would otherwise extend
beyond the date final payment is due on such Loan shall end on the date of such
final payment; and
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(iii) any Interest Period pertaining to a LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month.
"Inventory": that portion of the inventory of the Borrower and its
Subsidiaries which is finished goods, raw materials and work in process.
"Investment Company Act": as defined in Section 3.11 hereof.
"Landlord Consent": each Waiver and Consent executed by the landlord of
the Borrower or any Subsidiary, in form and substance satisfactory to the Agent,
as such agreements may be amended, modified or restated from time to time in
accordance with the terms hereof.
"Lease Expense": for any period, the aggregate minimum rental obligations
payable in respect of such period under leases of real and/or personal property
(net of income from subleases thereof), whether or not such obligations are
reflected as liabilities or commitments on a consolidated balance sheet or in
the notes thereto.
"Lenders": as defined in the preamble hereto and Section 8.8 hereof.
"Letter of Credit": as defined in Section 2.1(a).
"Letter of Credit Amount": the stated maximum amount available to be drawn
under a particular Letter of Credit, as such amount may be reduced or reinstated
from time to time in accordance with the terms of such Letter of Credit.
"Letter of Credit Request": a request by the Borrower for the issuance of
a Letter of Credit, on the Agent's standard form of standby or commercial letter
of credit application and agreement, as applicable, the current forms of which
are attached hereto as Exhibit I-1 and I-2, and containing terms and conditions
satisfactory to the Agent in its sole discretion.
"Leverage Level": if the Maximum Leverage Ratio shall be less than or
equal to 1.50:1, the Leverage Level shall be 1; if the Maximum Leverage Ratio
shall be greater than 1.50:1 and less than or equal to 2.00:1, the Leverage
Level shall be 2; if the Maximum Leverage Ratio shall be greater than 2.00:1 and
less than or equal to 2.50:1, the Leverage Level shall be 3; and if the Maximum
Leverage Ratio shall be greater than 2.50:1, the Leverage Level shall be 4.
"LIBOR": with respect to each day during each Interest Period pertaining
to a LIBOR Loan, the rate of interest determined by the Agent to be the rate per
annum at which deposits in dollars would be offered to the Agent by leading
banks in the London Interbank Market at or about 9:00 a.m., Los Angeles time,
two Eurodollar Business Days prior to the beginning of such Interest Period, for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its LIBOR Loan to
be outstanding during such Interest Period.
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"LIBOR Adjusted Rate": with respect to each day during each Interest
Period pertaining to a LIBOR Loan, a rate per annum determined for such day in
accordance with the following formula (rounded upward to the nearest 1/100th of
1%):
LIBOR
---------------------------------------
1.00 - LIBOR Reserve Requirements
"LIBOR Loans": Loans the rate of interest applicable to which is based
upon LIBOR.
"LIBOR Reserve Requirements": for any day as applied to a LIBOR Loan, the
aggregate (without duplication) of the maximum rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including, without
limitation, basic, supplemental, marginal and emergency reserves under any
regulations of the Board of Governors of the Federal Reserve System or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a
member bank of such Federal Reserve System.
"Lien": any mortgage, pledge, charge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), security interest or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any Capitalized Lease Obligation having substantially the same
economic effect as any of the foregoing, and the filing of any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction in respect of any of the foregoing).
"Loan": a Term Loan or a Revolving Loan, as applicable; and "Loans" means
the aggregate of all Revolving Loans and all Term Loans outstanding at any given
time.
"Loan Documents": this Agreement, the Revolving Notes, the Term Notes, the
Collateral Documents, the Guarantor Collateral Documents, the Guarantees, the
Landlord Consents, any Hedge Agreements, any Letter of Credit Requests that are
executed by the Borrower, the Environmental Indemnity, the Syndication
Sideletter and any other agreement executed by a Loan Party in connection
therewith and herewith including, but not limited to, UCC-1 Financing
Statements, as such agreements and documents may be amended, supplemented and
otherwise modified from time to time in accordance with the terms hereof.
"Loan Parties": the Borrower and the Guarantors.
"Majority Lenders": Lenders having Commitments equal to or more than
66-2/3% of the Aggregate Total Commitment, or, if any Commitment has terminated,
with respect to such Commitment, Lenders with outstanding Loans and/or
participations in Letters of Credit (if applicable) having an unpaid principal
balance equal to or more than 66-2/3% of the sum of (i) the unpaid principal
balance of all Loans outstanding, (ii) the aggregate Letter of Credit Amount and
(iii) the aggregate amount of unreimbursed drawings under all Letters of Credit
(if applicable), excluding from such calculation Lenders which have failed or
refused to fund a Loan when required to do so.
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"Margin Stock": as defined in Regulation U.
"Material Adverse Effect": a material adverse effect on (a) the business,
operations, property, condition or prospects (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole, (b) the ability of the Borrower
or any Subsidiary to perform its respective obligations under the Loan Documents
or (c) the validity or enforceability of the Loan Documents or the rights or
remedies of the Agent or the Lenders hereunder or thereunder.
"Maximum Leverage Ratio": for the Borrower and its Subsidiaries on a
consolidated basis, the ratio of Funded Debt to EBITDA.
"Mortgage": that certain mortgage executed by NNE in favor of the Agent
for the benefit of the Lenders, in form and substance satisfactory to the Agent,
with respect to the real property commonly known as 00 Xxxxxx Xxxxxx, Xxxxxx,
Xxx Xxxxxxxxx, as such mortgage may be amended, modified or restated from time
to time in accordance with the terms hereof.
"Multiemployer Plan": a plan which is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NNE": as defined in the Recitals hereto.
"NNE Acquisition": as defined in the Recitals hereto.
"NNE Shareholder Agreement": that certain Shareholder Agreement, dated to
be effective upon the merger of NNE and National Southeast Aluminum Corporation,
among the Seller, Xxxxx X. Xxxxxxxx, Xxxx X. XxXxxxx, Xxx X. Xxxxxxxx and
Xxxxxxx X. Xxxxx.
"Net Income": for the Borrower and its Subsidiaries on a consolidated
basis, net income as determined in accordance with GAAP.
"Net Proceeds": (A) with respect to any Asset Disposition, the net amount
equal to the aggregate amount received in cash (including any cash received by
way of deferred payment pursuant to a note receivable, other non-cash
consideration or otherwise, but only as and when such cash is so received) in
connection with such Asset Disposition minus the sum of (a) the reasonable fees,
commissions and other out-of-pocket expenses incurred by the Borrower or any of
its Subsidiaries in connection with such Asset Disposition (other than amounts
payable to Affiliates of the Person making such disposition), (b) Indebtedness,
other than the Loans, required to be paid as a result of such Asset Disposition
and (c) federal, state and local taxes incurred in connection with such Asset
Disposition; and (B) with respect to any Equity Offering, the net amount equal
to the aggregate amount received in cash (including any cash received by way of
deferred payment pursuant to a note receivable, other non-cash consideration or
otherwise, but only as and when such cash is so received) in connection with
such Equity Offering minus the reasonable fees, commissions and other out-of-
pocket expenses incurred by the Borrower in connection with such Equity Offering
(other than amounts payable to Affiliates of the Person making such Equity
Offering).
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"Net Working Investment": for the Borrower and its Subsidiaries on a
consolidated basis, (i) current assets (excluding cash and permitted liquid
investments) less (ii) current liabilities (excluding the current portion of
long-term debt).
"Net Worth": the excess of total assets over total liabilities, in each
case determined in accordance with GAAP.
"Note": a Revolving Note or a Term Note; and "Notes" means the aggregate
of all Revolving Notes and all Term Notes.
"Obligations": the unpaid principal of and interest on (including, without
limitation, interest accruing after the maturity of the Loans and interest
accruing on or after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating to
the Borrower, whether or not a claim for post-filing or post-petition interest
is allowed in such proceeding and whether or not at a default rate) the Notes,
the obligation to reimburse drawings under Letters of Credit (including the
contingent obligation to reimburse any drawings under outstanding Letters of
Credit), and all other obligations and liabilities of the Borrower and its
Subsidiaries to the Agent and the Lenders, whether direct or indirect, absolute
or contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, this Agreement, the Notes,
the Letters of Credit, any other Loan Document and any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all reasonable fees and disbursements
of counsel, and the allocated reasonable cost of internal counsel, to the Agent
or the Lenders that are required to be paid by the Borrower and its Subsidiaries
pursuant to the terms of this Agreement) or otherwise.
"Occupancy Agreements": as defined in Section 5.10.
"Participant": as defined in Section 9.6(b) hereof.
"PBGC": the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA or any successor thereto.
"Permitted Stock Repurchases": repurchases by the Borrower of its stock
during the following periods in accordance with Section 6.6, provided that the
aggregate consideration (including the fair market value of non-cash
consideration) paid for such stock shall not exceed the following amounts, as
applicable: (i) during Fiscal Year 2001, $100,000, (ii) during Fiscal Year 2002,
the lesser of $250,000 and Available Excess Cash Flow for Fiscal Year 2001,
(iii) during Fiscal Year 2003, the lesser of $500,000 and Available Excess Cash
Flow for Fiscal Year 2002, (iv) during Fiscal Year 2004, the lesser of $750,000
and Available Excess Cash Flow for Fiscal Year 2003 and (v) during Fiscal Year
2005, the lesser of $1,000,000 and Available Excess Cash Flow for Fiscal Year
2004.
"Person": any individual, firm, partnership, joint venture, corporation,
limited liability company, association, business enterprise trust,
unincorporated organization, government or department or agency thereof or other
entity, whether acting in an individual, fiduciary or other capacity.
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"Plan": as to any Person, any plan (other than a Multiemployer Plan)
subject to Title IV of ERISA maintained for employees of such Person or any
ERISA Affiliate of such Person (and any such plan no longer maintained by such
Person or any of such Person's ERISA Affiliates to which such Person or any of
such Person's ERISA Affiliates has made or was required to make any
contributions within any of the five preceding years).
"Press Proceeds": up to $716,000 in insurance proceeds to be received by
NNE, pursuant to Section 5.4 of the Acquisition Agreement, in connection with
damage to an extrusion press.
"Properties": the collective reference to the real and personal property
owned, leased, used, occupied or operated, under license or permit, by the
Borrower or any of its Subsidiaries.
"Purchasing Lenders": as defined in Section 9.6(c) hereof.
"Reduction Installment": as defined in Section 2.2(d) hereof.
"Regulation D": Regulation D of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"Regulation U": Regulation U of the Board of Governors of the Federal
Reserve System, as the same is from time to time in effect, and all official
rulings and interpretations thereunder or thereof and any successor regulation
thereto.
"Reorganization": with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of ERISA.
"Reportable Event": any of the events set forth in Section 4043(b) of
ERISA, other than those events as to which the thirty day notice period is
waived under PBGC regulations.
"Requirement of Law": as to any Person, the Articles of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule, order, judgment or regulation of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer": the chief executive officer, the president, any
senior vice president or any vice president of the applicable Loan Party, or,
with respect to financial matters, the chief financial officer, treasurer or
controller of the applicable Loan Party, as applicable.
"Restricted Payments": as defined in Section 6.6.
"Revolving Loan": as defined in Section 2.1(a).
"Revolving Loan Commitment": the commitment of a Lender listed on the
signature pages hereof to make Revolving Loans and participate in Letters of
Credit hereunder through its Applicable Lending Office as set forth on the
signature pages hereof, as the same may be adjusted pursuant to the provisions
hereof.
15
"Revolving Loan Commitment Expiration Date": the date which is five years
after the Closing Date, or such earlier date as the Revolving Loan Commitments
shall expire in accordance with the terms hereof (whether by acceleration or
otherwise).
"Revolving Loan Commitment Percentage": with respect to each Lender, the
percentage equivalent of the ratio which such Lender's Revolving Loan Commitment
bears to the Aggregate Revolving Loan Commitment.
"Revolving Loan Lender": each Lender having a Revolving Loan Commitment.
"Revolving Note": as defined in Section 2.1(c).
"Second Quarter End": with respect to any fiscal year of the Borrower, the
last day of the second quarter of such fiscal year; and "Second Quarter" shall
mean the second fiscal quarter of the Borrower so ending.
"Security Agreement": the Security Agreement made by the Borrower in favor
of the Agent, for the benefit of the Lenders, in form and substance satisfactory
to the Agent, as it may be amended or otherwise modified from time to time in
accordance with the terms hereof.
"Seller": as defined in the Recitals hereto.
"Single Employer Plan": any Plan which is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.
"Solvent": when used with respect to any Person, that:
(a) the present fair salable value of such Person's assets is in excess of
the total amount of the probable liability on such Person's debts;
(b) such Person is able to pay its debts as they become due; and
(c) such Person does not have unreasonably small capital to carry on such
Person's business as theretofore operated and all businesses in which such
Person is about to engage.
"Subsidiary": as to any Person at any time of determination, a
corporation, partnership, limited liability company or other entity of which
shares of stock or other ownership interests having ordinary voting power (other
than stock or such other ownership interests having such power only by reason of
the happening of a contingency) to elect a majority of the board of directors or
other managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries or Subsidiaries, or both, by such
Person. Unless otherwise qualified, all references to a "subsidiary" or to
"subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Borrower. Notwithstanding the foregoing, Colmar Liquidating shall not be a
"Subsidiary" under the Loan Documents so long as the Borrower is in compliance
with Section 5.13.
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"Syndication Sideletter": that certain sideletter dated as of even date
herewith between the Agent and the Borrower.
"Taxes": as defined in Section 2.14 hereof.
"Term Loan": a term loan made to the Borrower by a Lender under its Term
Loan Commitment.
"Term Loan Commitment": the commitment of a Lender listed on the signature
pages hereof to make a Term Loan hereunder through its Applicable Lending Office
as set forth on the signature pages hereof, as the same may be adjusted pursuant
to the provisions hereof.
"Term Loan Commitment Percentage": with respect to each Lender having a
Term Loan Commitment, the percentage equivalent of the ratio which such Lender's
Term Loan Commitment bears to the Aggregate Term Loan Commitment.
"Term Loan Lender": each Lender having a Term Loan Commitment.
"Term Loan Maturity Date": the date which is five years after the Closing
Date.
"Term Note": as defined in Section 2.2(c) hereof.
"Termination Event": (a) a Reportable Event, (b) the institution of
proceedings to terminate a Single Employer Plan by the PBGC under Section 4042
of ERISA, (c) the appointment by the PBGC of a trustee to administer any Single
Employer Plan or (4) the existence of any other event or condition that would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment by the PBGC of a trustee to administer, any
Single Employer Plan.
"Third Quarter End": with respect to any fiscal year of the Borrower, the
last day of the third quarter of such fiscal year; and "Third Quarter" shall
mean the third fiscal quarter of the Borrower so ending.
"Tranche": the collective reference to LIBOR Loans the Interest Periods
with respect to all of which begin on the same date and end on the same later
date (whether or not such LIBOR Loans shall originally have been made on the
same day).
"Transferee": as defined in Section 9.6(f) hereof.
"Type": as to any Loan, its nature as a Base Rate Loan or a LIBOR Loan.
"UBOC": Union Bank of California, N.A., in its individual capacity.
1.2 Other Definitional Provisions. (a) Unless otherwise specified therein,
all terms defined in this Agreement shall have the defined meanings when used in
any other Loan Document or any certificate or other document made or delivered
pursuant hereto or thereto.
17
(b) As used herein, in any other Loan Document, and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in Section 1.1 and accounting terms partly defined in Section 1.1,
to the extent not defined, shall have the respective meanings given to them
under GAAP. Unless otherwise provided herein, all financial calculations made
with respect to the Borrower for the purpose of determining compliance with the
terms of this Agreement shall be made on a consolidated basis. For the purpose
of determining compliance with financial covenants hereunder for any period,
acquisitions, divestitures, and asset sales occurring during such period will be
included in the calculation of such ratio for such period on a pro forma basis,
and will be deemed to have occurred on the first day of such period.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section, subsection,
Schedule and Exhibit references are to this Agreement unless otherwise
specified. The words "include," "includes" and "including" shall be deemed to be
followed by the phrase "without limitation".
(d) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.
(e) References to agreements, other contractual instruments and other
documents include all subsequent amendments and other modifications to such
agreement and documents, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document.
SECTION 2. AMOUNT AND TERMS OF LOANS AND LETTERS OF CREDIT; COMMITMENT
AMOUNTS
2.1 Revolving Loans and Letters of Credit; Revolving Loan Commitments. (a)
Subject to the terms and conditions hereof, each Revolving Loan Lender severally
agrees to (i) make loans on a revolving credit basis through its Applicable
Lending Office to the Borrower from time to time from and including the Closing
Date to but excluding the Revolving Loan Commitment Expiration Date (each a
"Revolving Loan", and collectively, the "Revolving Loans") in accordance with
the terms of this Agreement and (ii) participate through its Applicable Lending
Office in letters of credit issued for the account of the Borrower pursuant to
Section 2.3 from time to time from and including the Closing Date to but
excluding the Revolving Loan Commitment Expiration Date (each a "Letter of
Credit" and, collectively, the "Letters of Credit"); provided, however, that (A)
the sum of (1) the aggregate principal amount of all Revolving Loans
outstanding, (2) the aggregate Letter of Credit Amount of all Letters of Credit
outstanding and (3) the aggregate amount of unreimbursed drawings under all
Letters of Credit shall not exceed either the Aggregate Revolving Loan
Commitment or the Borrowing Base at any time and (B) the sum of (1) the
aggregate Letter of Credit Amount of all Letters of Credit outstanding and (2)
the aggregate amount of unreimbursed drawings under all Letters of Credit shall
not exceed $1,000,000 at any time. Within the limits of each Revolving Loan
Lender's Revolving Loan Commitment, the Borrower may borrow, have Letters of
Credit issued for the Borrower's account, prepay Revolving Loans, reborrow
Revolving Loans, and have
18
additional Letters of Credit issued for the Borrower's account after the
expiration of previously issued Letters of Credit.
With respect to each Revolving Loan Lender, the principal amount of each
(A) Revolving Loan to be made by such Revolving Loan Lender and (B)
participation of a Revolving Loan Lender in a Letter of Credit shall be in an
amount equal to the product of (i) such Revolving Loan Lender's Revolving Loan
Commitment Percentage (expressed as a fraction) and (ii) the total amount of the
Revolving Loan(s) and/or Letter(s) of Credit requested; provided that in no
event shall any Revolving Loan Lender be obligated to make a Revolving Loan or
participate in a Letter of Credit if after giving effect to such Revolving Loan
or such participation the sum of such Revolving Loan Lender's (x) Revolving
Loans outstanding, (y) Revolving Loan Commitment Percentage of the aggregate
Letter of Credit Amount of all Letters of Credit outstanding and (z) Revolving
Loan Commitment Percentage of the aggregate amount of unreimbursed drawings
under all Letters of Credit would exceed its Revolving Loan Commitment or if the
amount of such requested Revolving Loan or such Revolving Loan Lender's
Revolving Loan Commitment Percentage of such requested Letter of Credit is in
excess of such Revolving Loan Lender's Available Revolving Loan Commitment.
(b) Subject to Sections 2.8 and 2.9, the Revolving Loans may from time to
time be (i) LIBOR Loans, (ii) Base Rate Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Agent in accordance with either
Section 2.1(d) or 2.6. Each Revolving Loan Lender may make or maintain its
Revolving Loans to the Borrower or participate in Letters of Credit to or for
the account of the Borrower by or through any Applicable Lending Office.
(c) The Revolving Loans made by each Revolving Loan Lender to the Borrower
shall be evidenced by a promissory note of the Borrower, substantially in the
form of Exhibit A (a "Revolving Note"), with appropriate insertions therein as
to payee, date and principal amount, payable to the order of such Revolving Loan
Lender and representing the obligation of the Borrower to pay the aggregate
unpaid principal amount of all Revolving Loans made by such Revolving Loan
Lender to the Borrower pursuant to Section 2.1(a), with interest thereon as
prescribed in Sections 2.8 and 2.9. Each Revolving Loan Lender is hereby
authorized (but not required) to record the date and amount of each payment or
prepayment of principal of its Revolving Loans made to the Borrower, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of LIBOR Loans, the length of each Interest Period with
respect thereto, in the books and records of such Revolving Loan Lender, and any
such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded. The failure of any Revolving Loan Lender to make any
such recordation or notation in the books and records of such Revolving Loan
Lender (or any error in such recordation or notation) shall not affect the
obligations of the Borrower hereunder or under the Revolving Notes. Each
Revolving Note shall (i) be dated the Closing Date, (ii) provide for the payment
of interest in accordance with Sections 2.8 and 2.9 and (iii) be stated to be
payable on the Revolving Loan Commitment Expiration Date.
(d) The Borrower shall give the Agent irrevocable written notice,
substantially in the form of a Borrowing Notice (which notice must be received
by the Agent prior to 9:00 a.m., Los Angeles time, one Business Day prior to the
proposed borrowing date or, if all or any part of the
19
Revolving Loans are requested to be made as LIBOR Loans, three Eurodollar
Business Days prior to the proposed borrowing date) requesting that the
Revolving Loan Lenders make Revolving Loans on the proposed borrowing date and
specifying (i) the aggregate amount of Revolving Loans requested to be made,
(ii) subject to Sections 2.10 and 2.13, whether the Revolving Loans are to be
LIBOR Loans, Base Rate Loans or a combination thereof and (iii) if the Revolving
Loans are to be entirely or partly LIBOR Loans, the respective amounts of each
such Type of Revolving Loan and the respective lengths of the initial Interest
Periods therefor. Upon receipt of such notice, the Agent shall promptly notify
each Revolving Loan Lender thereof on the date of receipt of such notice. On the
proposed borrowing date, not later than 11:00 a.m., Los Angeles time, each
Revolving Loan Lender shall make available to the Agent the amount of such
Revolving Loan Lender's pro rata share of the aggregate borrowing amount (as
determined in accordance with the second paragraph of Section 2.1(a)) in
immediately available funds by wiring such amount to such account as the Agent
shall specify. The Agent may, in the absence of notification from any Revolving
Loan Lender that such Revolving Loan Lender has not made its pro rata share
available to the Agent on such date, credit the account of the Borrower on the
books of the Agent with the aggregate amount of Revolving Loans.
(e) Neither the Agent nor any Revolving Loan Lender shall be responsible
for the obligations or Revolving Loan Commitments of any other Revolving Loan
Lender hereunder, nor will the failure of any Revolving Loan Lender to comply
with the terms of this Agreement relieve any other Revolving Loan Lender or the
Borrower of its obligations under this Agreement and the Revolving Notes.
(f) The Revolving Loan Commitment of each Revolving Loan Lender and the
Aggregate Revolving Loan Commitment shall terminate on the Revolving Loan
Commitment Expiration Date.
(g) All outstanding Revolving Loans shall be due and payable on the
Revolving Loan Commitment Expiration Date.
2.2 Term Loans; Term Loan Commitments. (a) Subject to the terms and
conditions hereof, each Term Loan Lender severally agrees to make a Term Loan to
the Borrower on the Closing Date in an aggregate principal amount equal to the
amount of the Term Loan Commitment of such Term Loan Lender. After the funding
of the Term Loans on the Closing Date, the Term Loan Commitments shall expire.
(b) Subject to Sections 2.8 and 2.9, the Term Loans may from time to time
be (i) LIBOR Loans, (ii) Base Rate Loans or (iii) a combination thereof, as
determined by the Borrower and notified to the Agent in accordance with either
Section 2.2(e) or 2.6. Each Term Loan Lender may make or maintain its Term Loan
to the Borrower by or through any Applicable Lending Office.
(c) The Term Loan made by each Term Loan Lender to the Borrower shall be
evidenced by a promissory note of the Borrower, substantially in the form of
Exhibit B (a "Term Note"). Each Term Note shall include appropriate insertions
therein as to payee, date and principal amount, shall be payable to the order of
the applicable Term Loan Lender and shall represent the obligation of the
Borrower to pay the aggregate unpaid principal amount of the
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Term Loan made by such Term Loan Lender to the Borrower pursuant to Section
2.2(a), with interest thereon as prescribed in Sections 2.8 and 2.9. Each Term
Loan Lender is hereby authorized (but not required) to record the date and
amount of each payment or prepayment of principal of a Term Loan made to the
Borrower, each continuation thereof, each conversion of all or a portion thereof
to another Type and, in the case of LIBOR Loans, the length of each Interest
Period with respect thereto, in the books and records of such Term Loan Lender,
and any such recordation shall constitute prima facie evidence of the accuracy
of the information so recorded. The failure of any Term Loan Lender to make any
such recordation or notation in the books and records of the Term Loan Lender
(or any error in such recordation or notation) shall not affect the obligations
of the Borrower hereunder or under the Term Notes. Each Term Note shall (i) be
dated the Closing Date, (ii) provide for the payment of interest in accordance
with Sections 2.8 and 2.9 and (iii) be stated to be payable in installments of
principal in accordance with, and subject to the provisions of, Section 2.2(d).
(d) On each date set forth below, the Borrower shall repay the principal of
the Term Notes in an aggregate amount equal to the corresponding amount set
forth below (each such amount a "Reduction Installment"):
March 31, 2001 $1,500,000
June 30, 2001 $1,500,000
September 30, 2001 $1,500,000
December 31, 2001 $1,500,000
March 31, 2002 $1,750,000
June 30, 2002 $1,750,000
September 30, 2002 $1,750,000
December 31, 2002 $1,750,000
March 31, 2003 $1,750,000
June 30, 2003 $1,750,000
September 30, 2003 $1,750,000
December 31, 2003 $1,750,000
March 31, 2004 $1,750,000
June 30, 2004 $1,750,000
September 30, 2004 $1,750,000
December 31, 2004 $1,750,000
March 31, 2005 $2,000,000
June 30, 2005 $2,000,000
September 30, 2005 $2,000,000
Term Loan Maturity Date $2,000,000
; provided, that the final Reduction Installment paid shall be in an amount
equal to all amounts outstanding on the Term Notes. The aggregate amount payable
to any Term Loan Lender on any
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Term Loan reduction date set forth in this Section 2.2(d) shall be determined in
accordance with the provisions of Section 2.11.
(e) The Borrower shall give the Agent irrevocable written notice,
substantially in the form of a Borrowing Notice (which notice must be received
by the Agent prior to 9:00 a.m., Los Angeles time, one Business Day prior to the
Closing Date or, if all or any part of the Term Loans are requested to be made
as LIBOR Loans, three Eurodollar Business Days prior to the proposed borrowing
date) requesting that the Term Loan Lenders make the Term Loans in accordance
with their respective Term Loan Commitments on the Closing Date. Upon receipt of
such notice the Agent shall promptly notify each Term Loan Lender thereof on the
date of receipt of such notice. Not later than 11:00 a.m., Los Angeles time, on
the Closing Date each Term Loan Lender shall make available to the Agent the
amount of such Term Loan Lender's Term Loan Commitment in immediately available
funds by wiring such amount to such account as the Agent shall specify.
(f) Neither the Agent nor any Term Loan Lender shall be responsible for the
obligations or Term Loan Commitment of any other Term Loan Lender hereunder, nor
will the failure of any Term Loan Lender to comply with the terms of this
Agreement relieve any other Term Loan Lender or the Borrower of its obligations
under this Agreement and the Term Notes.
2.3 Issuance of Letters of Credit.
(a) Subject to the limitations on Letters of Credit set forth in Section
2.1(a), the Borrower shall be entitled to request the issuance of standby
Letters of Credit and/or commercial Letters of Credit from time to time from and
including the Closing Date to but excluding the three Business Days prior to the
Revolving Loan Commitment Expiration Date, by giving the Agent a Letter of
Credit Request at least three Business Days before the requested date of
issuance of such Letter of Credit (which shall be a Business Day). Any Letter of
Credit Request received by the Agent later than 12:00 noon, Los Angeles time,
shall be deemed to have been received on the next Business Day. Each Letter of
Credit Request shall be signed by a Responsible Officer, shall be irrevocable
and shall be effective upon receipt by the Agent. Provided that a valid Letter
of Credit Request has been received by the Agent and upon fulfillment of the
other applicable conditions set forth in Section 4.2, the Agent will issue the
requested Letter of Credit from its office specified in Section 9.2. Each Letter
of Credit shall have an expiration date as set forth in the Letter of Credit
Request, provided that no Letter of Credit shall in any event have an expiration
date later than two Business Days prior to the Revolving Loan Commitment
Expiration Date.
(b) Immediately upon the issuance of each Letter of Credit, the Agent shall
be deemed to have sold and transferred to each Revolving Loan Lender, and each
Revolving Loan Lender shall be deemed to have purchased and received from the
Agent, in each case irrevocably and without any further action by any party, an
undivided interest and participation in such Letter of Credit, each drawing
thereunder and the obligations of the Borrower under this Agreement in respect
thereof in an amount equal to the product of (i) such Revolving Loan Lender's
Revolving Loan Commitment Percentage and (ii) the maximum amount available to be
drawn under such Letter of Credit (assuming compliance with all conditions to
drawing).
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(c) The payment by the Agent of a draft drawn under any Letter of Credit
shall constitute for all purposes of this Agreement the making by the Agent in
its individual capacity as a Revolving Loan Lender hereunder (in such capacity,
the "Drawing Lender") of a Base Rate Loan in the amount of such payment (but
without any requirement of compliance with the conditions set forth in Section
4.2). In the event that any such Loan by the Drawing Lender resulting from a
drawing under any Letter of Credit is not repaid by the Borrower by 11:00 a.m.,
Los Angeles time, on the day of payment of such drawing, the Agent shall
promptly notify each other Revolving Loan Lender. Each Revolving Loan Lender
shall, on the day of such notification (or if such notification is not given by
12:00 noon, Los Angeles time, on such day, then on the next succeeding Business
Day), make a Base Rate Loan, which shall be used to repay the applicable portion
of the Base Rate Loan of the Drawing Lender with respect to such Letter of
Credit drawing, in an amount equal to the amount of such Revolving Loan Lender's
participation in such drawing for application to repay the Drawing Lender (but
without any requirement of compliance with the applicable conditions set forth
in Section 4.2) and shall deliver to the Agent for the account of the Drawing
Lender, on the day of such notification (or if such notification is not given by
12:00 noon, Los Angeles time, on such day, then on the next succeeding Business
Day) and in immediately available funds, the amount of such Base Rate Loan. In
the event that any Revolving Loan Lender fails to make available to the Agent
for the account of the Drawing Lender the amount of such Base Rate Loan, the
Drawing Lender shall be entitled to recover such amount on demand from such
Revolving Loan Lender, together with interest thereon for each day from the date
of non-payment until such amount is paid in full at the Federal Funds Effective
Rate.
(d) The obligations of the Borrower with respect to any Letter of Credit,
any Letter of Credit Request and any other agreement or instrument relating to
any Letter of Credit and any Base Rate Loan made under Section 2.3(c) shall be
absolute, unconditional and irrevocable and shall be paid strictly in accordance
with the terms of the aforementioned documents under all circumstances,
including the following:
(i) any lack of validity or enforceability of any Letter of Credit,
this Agreement or any other Loan Document;
(ii) the existence of any claim, setoff, defense or other right that
the Borrower may have at any time against any beneficiary or transferee of any
Letter of Credit (or any Person for whom any such beneficiary or transferee may
be acting), the Agent, any Revolving Loan Lender (other than the defense of
payment to a Revolving Loan Lender in accordance with the terms of this
Agreement) or any other Person, whether in connection with this Agreement, any
other Loan Document, the transactions contemplated hereby or thereby or any
unrelated transaction;
(iii) any statement or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect,
or any statement therein being untrue or inaccurate in any respect whatsoever;
provided that payment by the Agent under such Letter of Credit against
presentation of such draft or document shall not have constituted gross
negligence or willful misconduct; and
23
(iv) any exchange, release or non-perfection of any Collateral,
Guarantor Collateral or other collateral, or any release, amendment or waiver of
or consent to departure from any Guarantee, other Loan Document or other
guaranty, for any of the Obligations of the Borrower in respect of the Letters
of Credit.
(e) The Borrower shall pay to the Agent, with respect to each Letter of
Credit issued hereunder, the following fees:
(i) for each commercial Letter of Credit, for the account of the
Revolving Loan Lenders, negotiation, issuance and amendment fees in accordance
with the Agent's standard internal charge guidelines (as such guidelines may
change from time to time) ;
(ii) for each standby Letter of Credit, for the account of the
Revolving Loan Lenders, for the period from and including the day such Letter of
Credit is issued to but excluding the day such Letter of Credit expires, a
letter of credit fee equal to the product of (x) the Applicable Margin for LIBOR
Loans and (y) the Letter of Credit Amount of such Letter of Credit from time to
time, such letter of credit fee to be payable in installments quarterly in
arrears on the last day of each March, June, September and December and on the
expiration date of such Letter of Credit; and
(iii) with respect to each Letter of Credit issued hereunder, for the
account of Agent, from time to time such additional fees and charges (including
cable charges) as are generally associated with letters of credit, in accordance
with the Agent's standard internal charge guidelines (as such guidelines may
change from time to time) and the related Letter of Credit Request.
(f) The Borrower agrees to the provisions in the Letter of Credit Request
forms; provided, however, that the terms of the Loan Documents shall take
precedence if there is any inconsistency between the terms of the Loan Documents
and the terms of said forms.
(g) The Borrower assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit with respect to its use of
such Letter of Credit. Neither the Agent nor any Lender nor any of their
respective officers or directors shall be liable or responsible for (i) the use
that may be made of any Letter of Credit or any acts or omissions of any
beneficiary or transferee in connection therewith; or (ii) the validity,
sufficiency or genuineness of documents, or of any endorsement thereof, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged. In furtherance and not in limitation of the foregoing, the
Agent may accept any document that appears on its face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
2.4 Optional Prepayments; Optional Commitment Reductions. The Borrower may,
at any time and from time to time, subject to Section 2.15, prepay the Loans
and/or permanently reduce the Aggregate Revolving Loan Commitment, in whole or
in part, without premium or penalty, upon at least three Business Days'
irrevocable written notice in the case of LIBOR Loans and upon at least one
Business Day's irrevocable written notice in the case of Base Rate Loans, from
the Borrower to the Agent, specifying the date and amount of prepayment and/or
24
commitment reduction, and whether, if a prepayment, the prepayment is of
Revolving Loans or Term Loans or a combination thereof and, if of a combination
thereof, the amount allocable to each, and whether the prepayment is of LIBOR
Loans, Base Rate Loans or a combination thereof and, if of a combination
thereof, the amount allocable to each. Upon receipt of any such notice from the
Borrower, the Agent shall promptly notify each Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable by
the Borrower on the date specified therein, together with accrued interest to
such date on the amount prepaid. All prepayments of Term Loans under this
Section 2.4 shall be applied to the scheduled Reduction Installments therefor in
inverse order of maturity. Partial prepayments of Revolving Loans shall be in
the aggregate principal amount of $1,000,000 or an integral multiple of $500,000
in excess thereof.
2.5 Mandatory Prepayments. (a) If at any time the sum of (A) the aggregate
principal amount of all Revolving Loans outstanding, (B) the aggregate Letter of
Credit Amount of all Letters of Credit outstanding and (C) the aggregate amount
of unreimbursed drawings under all Letters of Credit exceeds the Aggregate
Revolving Loan Commitment and/or the Borrowing Base, then, in either case, the
Borrower shall immediately, without notice or request by the Agent, prepay the
Revolving Loans and/or, if one or more Letters of Credit are outstanding, pledge
cash collateral to the Agent to secure reimbursement of amounts available to be
drawn thereunder, in an aggregate amount equal to such excess.
(b) If the Borrower or any Subsidiary receives insurance proceeds (other
than the Press Proceeds) or condemnation proceeds with respect to any Property
which are not fully applied (or contractually committed pursuant to contract(s)
approved by the Agent) toward the repair or replacement of such damaged or
condemned Property within 90 days of the receipt thereof, the Borrower shall, on
such 90th day prepay the Loans and, after all Loans have been prepaid, make a
Cash Collateral Deposit, in an amount equal to the amount of such proceeds not
so applied (and such prepayment shall be applied as set forth in Section
2.5(f)).
(c) On the date of receipt by the Borrower or any of its Subsidiaries of
any Net Proceeds with respect to an Asset Disposition, the Borrower shall prepay
the Loans (and such prepayment shall be applied as set forth in Section 2.5(f))
and, after all Loans have been prepaid, make a Cash Collateral Deposit, in an
amount equal to 100% of such Net Proceeds; provided that, so long as no Default
has occurred and is continuing, no prepayment shall be required with respect to
an Asset Disposition, (i) to the extent that the fair market value of assets
subject to Asset Dispositions (including the value of the assets subject to such
Asset Disposition) consummated during any 12-month period (commencing on the
Closing Date) is less than $100,000 or (ii) if the Net Proceeds of any such
Asset Dispositions are used, within 90 days of such disposition, to invest in
assets of the same type and use as those disposed. On or prior to the date of
any Asset Disposition, the Borrower agrees to provide the Agent with
calculations used by the Borrower in determining the amount of any such
prepayment under this Section 2.5(c).
(d) In the event that at the end of any fiscal year of the Borrower ending
on and after Fiscal Year End 2001 there shall exist Excess Cash Flow with
respect to such fiscal year, then on the date which is ten Business Days after
the earlier to occur of (i) the date upon which the audited financial statements
of the Borrower with respect to such fiscal year become available
25
and (ii) the 90th day after the end of such fiscal year, the Borrower shall
prepay the Loans (and such prepayment shall be applied as set forth in Section
2.5(f)) and, after all Loans have been prepaid, make a Cash Collateral Deposit,
in an amount equal to 75% of such Excess Cash Flow; provided that such
percentage shall be 50% if the Maximum Leverage Ratio as of the end of such
fiscal year was less than 1.50:1. On or prior to the date of any prepayment
required by this Section 2.5(d), the Borrower agrees to provide the Agent with
the calculations used by the Borrower in determining the amount of any such
prepayment.
(e) On the date of receipt by the Borrower or any of its Subsidiaries of
any Net Proceeds with respect to an Equity Offering consummated after the
Closing Date, the Borrower shall prepay the Loans (and such prepayment shall be
applied as set forth in Section 2.5(f)) and, after all Loans have been prepaid,
make a Cash Collateral Deposit, in an amount equal to 100% of the Net Proceeds
of such Equity Offering. On or prior to the completion of any Equity Offering,
the Borrower agrees to provide the Agent with calculations used by the Borrower
in determining the amount of any such prepayment under this Section 2.5(e).
Nothing in this Section 2.5(e) shall be deemed to constitute a waiver or
modification of Section 7(j).
(f)
(i) Each prepayment of the Loans pursuant to this Section 2.5 shall be
applied first, to the outstanding Term Loans, and second to the outstanding
Revolving Loans. Each prepayment shall be accompanied by payment in full of all
accrued interest and, if applicable, accrued commitment fees thereon to and
including the date of such prepayment, together with any additional amounts
owing pursuant to Section 2.15.
(ii) If, at any time, the Revolving Loans are repaid in full,
additional prepayments hereunder shall be applied to make a Cash Collateral
Deposit with respect to outstanding Letters of Credit.
(iii) Each prepayment of the Term Loans shall be applied in inverse
order of maturity, and no such amounts shall be available for reborrowing.
2.6 Conversion and Continuation Options. (a) The Borrower may elect from
time to time to convert LIBOR Loans to Base Rate Loans, by the Borrower giving
the Agent at least two Business Days' prior irrevocable written notice of such
election pursuant to a Continuation Notice, provided that any such conversion of
LIBOR Loans may only be made on the last day of an Interest Period with respect
thereto. The Borrower may elect from time to time to convert Base Rate Loans to
LIBOR Loans by the Borrower giving the Agent at least three Eurodollar Business
Days' prior irrevocable written notice of such election pursuant to a
Continuation Notice. Any such notice of conversion to LIBOR Loans shall specify
the length of the initial Interest Period or Interest Periods therefor. Upon
receipt of any such notice the Agent shall promptly notify each Lender thereof.
All or any part of outstanding LIBOR Loans and Base Rate Loans may be converted
as provided herein, provided that (i) any such conversion may only be made if,
after giving effect thereto, Section 2.7 shall not have been contravened, (ii)
no such Loan may be converted into a LIBOR Loan after the date that is one month
prior to the Term Loan Maturity Date or the Revolving Loan Commitment Expiration
Date, as applicable, and
26
(iii) the Borrower shall not have the right to elect to continue at the end of
the applicable Interest Period, or to convert to, a LIBOR Loan if a Default
shall have occurred and be continuing.
(b) Any LIBOR Loan may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving notice to
the Agent, in accordance with the applicable provisions of the term "Interest
Period" set forth in Section 1.1, of the length of the next Interest Period to
be applicable to such LIBOR Loan, provided that no LIBOR Loan may be continued
as such (i) if, after giving effect thereto, Section 2.7 would be contravened,
(ii) after the date that is one month prior to the Term Loan Maturity Date or
the Revolving Loan Commitment Expiration Date, as applicable, or (iii) if a
Default shall have occurred and be continuing and provided, further, that if the
Borrower shall fail to give any required notice as described above in this
Section or if such continuation is not permitted pursuant to the preceding
proviso, such Loans shall be automatically converted to Base Rate Loans on the
last day of such then-expiring Interest Period.
2.7 Minimum Amounts of Tranches; Minimum Borrowings. All borrowings,
conversions and continuations of LIBOR Loans hereunder and all selections of
Interest Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal amount
of the Loans comprising each Tranche shall be equal to $1,000,000 or a whole
multiple of $250,000 in excess thereof and, in any case, there shall not be more
than 5 Tranches. All borrowings of Base Rate Loans shall be in a minimum amount
of $500,000 or a whole multiple of $100,000 in excess thereof.
2.8 Interest Rates and Payment Dates.
(a) Each LIBOR Loan shall bear interest for each day during each Interest
Period with respect thereto at a rate per annum equal to the LIBOR Adjusted Rate
plus the Applicable Margin. Each Base Rate Loan shall bear interest at a rate
per annum equal to the Base Rate plus the Applicable Margin.
(b) If any Event of Default shall have occurred and be continuing, all
amounts outstanding hereunder shall bear interest at a rate per annum equal to
the Base Rate plus 2% per annum, from the date of the occurrence of such Event
of Default until such Event of Default is no longer continuing (after as well as
before judgment).
(c) Interest shall be payable in arrears on each Interest Payment Date;
provided, however, that interest accruing pursuant to paragraph (b) of this
Section shall be payable on demand.
(d) For purposes of determining the Applicable Margin for Loans, commitment
fees and standby letter of credit fees hereunder, interest rates on the Loans
and such fees shall be calculated on the basis of the Maximum Leverage Ratio set
forth in the most recent Covenant Compliance Certificate received by the Agent
in accordance with Section 5.2(a). For accrued and unpaid interest and fees only
(no changes being made for interest or fee payments previously made), changes in
interest rates on the Loans or the rate of such fees attributable to changes in
the Applicable Margin caused by changes in the Maximum Leverage Ratio shall be
calculated upon the delivery of a Covenant Compliance Certificate, and such
change shall be effective with
27
respect to Base Rate Loans, LIBOR Loans and such fees from the day which is five
days after receipt by the Agent of such Covenant Compliance Certificate. If, for
any reason, the Borrower shall fail to deliver a Covenant Compliance Certificate
when due in accordance with Section 5.2(a), and such failure shall continue for
a period of ten days, the Leverage Level shall be deemed to be Leverage Xxxxx 0
for such purposes, retroactive to the date on which the Borrower should have
delivered such Covenant Compliance Certificate, and shall continue until a
Covenant Compliance Certificate indicating a different Leverage Level is
delivered to the Agent.
2.9 Computation of Interest and Fees. Interest on the Loans and all other
Obligations shall be calculated on the basis of a 360-day year for the actual
days elapsed. Each determination of an interest rate by the Agent pursuant to
any provision of this Agreement shall be conclusive and binding on the Borrower
and the Lenders in the absence of manifest error.
2.10 Inability to Determine Interest Rate. In the event that, prior to the
first day of any Interest Period, (a) the Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower absent manifest
error) that, by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the LIBOR Adjusted Rate for
such Interest Period or (b) the Agent shall have received notice from the
Majority Lenders acting in good faith that the LIBOR Adjusted Rate determined or
to be determined for such Interest Period will not adequately and fairly reflect
the cost to such Lenders (as conclusively certified by such Lenders) of making
or maintaining their affected Loans during such Interest Period, the Agent shall
give telecopy or telephonic notice thereof to the Borrower and the Lenders as
soon as practicable thereafter. If such notice is given, (i) any LIBOR Loans
requested to be made on the first day of such Interest Period shall accrue
interest at the Base Rate, (ii) Loans that were to have been converted on the
first day of such Interest Period to LIBOR Loans shall be continued as Base Rate
Loans and (iii) any outstanding LIBOR Loans shall be converted, on the first day
of such Interest Period, to Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further LIBOR Loans shall be made or continued as
such, nor shall the Borrower have the right to convert Base Rate Loans to LIBOR
Loans.
2.11 Pro Rata Treatment and Payments. Each payment (including each
prepayment) by the Borrower on account of principal of and interest on the
Revolving Loans shall be made pro rata according to the respective outstanding
principal and interest amounts of the Revolving Loans then held by the Lenders,
and each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Term Loans shall be made pro rata according to
the respective outstanding principal and interest amounts of the Term Loans then
held by the Lenders. All payments (including prepayments) to be made by the
Borrower hereunder and under the Notes, whether on account of principal,
interest, fees or otherwise, shall be made without setoff, deduction or
counterclaim and shall be made prior to 11:00 a.m., Los Angeles time, on the due
date thereof to the Agent, for the account of the applicable Lenders, at the
Agent's office specified in Section 9.2, in Dollars and in immediately available
funds. The Agent shall distribute such payments to the applicable Lenders
promptly upon receipt in like funds as received. If any payment hereunder (other
than payments on the LIBOR Loans) becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding Business
Day, and, with respect to payments of principal, interest thereon shall be
payable at the then applicable rate during such extension. If any payment on a
LIBOR
28
Loan becomes due and payable on a day other than a Eurodollar Business
Day, the maturity thereof shall be extended to the next succeeding Eurodollar
Business Day (and interest shall continue to accrue thereon at the applicable
rate) unless the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the
immediately preceding Eurodollar Business Day.
2.12 Illegality. Notwithstanding any other provision herein, if any change
after the Closing Date in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Lender or Applicable Lending
Office to maintain LIBOR Loans as contemplated by this Agreement, (a) the
commitment of such Lender hereunder to continue LIBOR Loans as such and convert
Base Rate Loans to LIBOR Loans shall forthwith be suspended during such period
of illegality and (b) the Loans of such Lender or Applicable Lending Office then
outstanding as LIBOR Loans, if any, shall be converted automatically to Base
Rate Loans on the respective last days of the then current Interest Periods with
respect to such Loans or within such earlier period as required by law. If any
such conversion of a LIBOR Loan occurs on a day which is not the last day of the
then current Interest Period with respect thereto, the Borrower shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 2.15.
To the extent that a Lender's LIBOR Loans have been converted to Base Rate Loans
pursuant to this Section 2.12, all payments and prepayments of principal that
otherwise would be applied to such Lender's LIBOR Loans shall be applied instead
to its Base Rate Loans.
2.13 Increased Costs. (a) In the event that any change after the Closing
Date in any Requirement of Law or in the interpretation or application thereof
or compliance by any Lender with any request or directive (whether or not having
the force of law but, if not having the force of law, generally applicable to
and complied with by banks and financial institutions of the same general type
as such Lender in the relevant jurisdiction) from any central bank or other
Governmental Authority made subsequent to the Closing Date:
(i) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirements against assets held by, letters
of credit issued by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other acquisition of
funds by, any office of such Lender or Applicable Lending Office which is not
otherwise included in the determination of the LIBOR Adjusted Rate hereunder; or
(ii) shall impose on such Lender or Applicable Lending Office any
other condition;
and the result of any of the foregoing is to increase the cost to the Agent of
issuing any Letter of Credit, increase the cost to any Lender or any Applicable
Lender Office of purchasing or maintaining any participation in a Letter of
Credit, or increase the cost to any Lender or any Applicable Lending Office of
converting into, continuing or maintaining LIBOR Loans, or to reduce any amount
receivable hereunder in respect of any of the foregoing, in any case by an
amount which the Agent or such Lender, as applicable, deems to be material,
then, in any such case, the Borrower shall immediately pay to the Agent, on
behalf of the Agent, such Lender or Applicable Lending Office, upon the demand
of the Agent, any additional amounts necessary to compensate the Agent or such
Lender, as applicable, for such increased cost or reduced amount receivable. If
the Agent, any Lender or any Applicable Lending Office becomes entitled to
29
claim any additional amounts pursuant to this Section, it shall promptly notify
the Borrower, through the Agent, of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by the Agent, such Lender or Applicable Lending Office,
through the Agent, to the Borrower, which shall demonstrate in reasonable detail
the computation of such amounts, shall be conclusive evidence of the accuracy of
the information so recorded, absent manifest error. This covenant shall survive
the termination of this Agreement, the expiration of the Letters of Credit and
the payment of the Notes and all other amounts payable hereunder.
(b) If, after the date of this Agreement, the introduction of or any change
in any applicable law, rule, regulation or guideline regarding capital adequacy,
or any change in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or administration
thereof, affects the amount of capital required or expected to be maintained by
any Lender or any corporation controlling any Lender, and such Lender (taking
into consideration such Lender's or such corporation's policies with respect to
capital adequacy) determines that the amount of capital maintained by such
Lender or such corporation which is attributable to or based upon the Loans, the
Letters of Credit or this Agreement must be increased as a consequence of such
introduction or change by an amount deemed by such Lender to be material, then,
upon demand of the Agent at the request of such Lender, the Borrower shall
immediately pay to the Agent on behalf of such Lender, additional amounts
sufficient to compensate such Lender or such corporation for the increased costs
to such Lender or corporation of such increased capital. Any such demand shall
be accompanied by a certificate of such Lender setting forth in reasonable
detail the computation of any such increased costs, which certificate shall be
conclusive, absent manifest error. This obligation of the Borrower under this
Section 2.13(b) shall survive the termination of this Agreement, the expiration
of the Letters of Credit and the payment of the Notes and all other amounts
payable hereunder.
2.14 Taxes. All payments made by the Borrower in respect of the Obligations
shall be made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority or any
political subdivision or taxing authority thereof or therein, other than
Excluded Taxes (all such non-Excluded Taxes being hereinafter called "Taxes").
If any Taxes are required to be withheld from any amounts payable to the Agent
or any Lender in respect of the Obligations, the amounts so payable to the Agent
or such Lender shall be increased to the extent necessary to yield to the Agent
or such Lender (after payment of all Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement and
the Notes. The Agent or a Lender, as the case may be, shall deliver to the
Borrower a certificate in good faith setting forth the amount of such Taxes, the
calculation of such Taxes and an explanation of the requirement therefor, all in
reasonable detail and such certificate shall be conclusive, absent manifest
error. Whenever any Taxes are payable by the Borrower, as promptly as possible
thereafter, the Borrower shall send to the Agent, for its own account or for the
account of such Lender, as the case may be, a copy of an original official
receipt received by the Borrower showing payment thereof or such other evidence
of payment reasonably satisfactory to the Agent. If the Borrower fails to pay
any Taxes when due to the appropriate taxing authority or fails to remit to the
Agent the required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and the Lenders for any
30
incremental taxes, interest or penalties (and related reasonable fees and
expenses of counsel) that may become payable by the Agent or any Lender as a
result of any such failure. The agreements in this Section shall survive the
termination of this Agreement, the expiration of the Letters of Credit and the
payment of the Notes and all other amounts payable hereunder.
2.15 Indemnity. The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from and to pay each Lender on demand the amount of any
liability, loss or expense arising from the reemployment of funds obtained by it
or from fees payable to terminate the deposits from which such funds were
obtained (including reasonable fees and expenses of counsel) which such Lender
may sustain or incur as a consequence of (a) default by the Borrower in payment
when due of the principal amount of or interest on any LIBOR Loan, (b) default
by the Borrower in making a borrowing of, conversion into or continuation of
LIBOR Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement, (c) default by the Borrower in
making any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (d) the making by the
Borrower of a prepayment or conversion of LIBOR Loans on a day which is not the
last day of an Interest Period with respect thereto (including any prepayment
required as a result of acceleration of the Loans under Article 7). A Lender's
certificate as to such liability, loss or expense shall be deemed conclusive,
absent manifest error. This covenant shall survive the termination of this
Agreement, the expiration of the Letters of Credit and the payment of the Notes
and all other amounts payable hereunder.
2.16 Mitigation of Costs. If any Lender, by changing its Applicable Lending
Office or taking any other reasonable action, so long as making such change or
taking such other action is not disadvantageous to it in any financial,
regulatory or other respect, can mitigate any adverse effect on the Borrower
under Section 2.10, 2.12, 2.13 or 2.14, such Lender shall take such action.
2.17 Unused Commitment Fee. The Borrower agrees to pay to the Agent, for
the account of the Revolving Loan Lenders, an unused commitment fee to be shared
pro rata among the Revolving Loan Lenders for the period from and including the
date hereof to but excluding the Revolving Loan Commitment Expiration Date,
based on the average aggregate amount, for each day during such period, of the
Available Revolving Loan Commitment, and computed at a rate equal to the
Applicable Margin for commitment fees. Such unused commitment fees shall be
payable in installments quarterly in arrears on the last day of each March,
June, September and December and on the Revolving Loan Commitment Expiration
Date, commencing on the first such date to occur after the date hereof.
(b) The Borrower agrees to pay to the Agent, for the account of the Term
Loan Lenders, an unused commitment fee to be shared pro rata among the Term Loan
Lenders for the period from and including the date hereof to but excluding the
date the Term Loans are funded in accordance with Section 2.2, based on the
Aggregate Term Loan Commitment, and computed at a rate equal to 0.25% per annum.
Such unused commitment fee shall be payable on the Closing Date.
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SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the Loans
and participate in the Letters of Credit, and to induce the Agent to issue the
Letters of Credit, the Borrower hereby represents and warrants to the Agent and
each Lender that:
3.1 Financial Condition. (a) The audited consolidated balance sheet of the
Borrower as at Fiscal Year End 1999, and the related audited consolidated
statements of income and of cash flows for the fiscal year ended on such date,
certified by the Accountants, and the unaudited consolidated balance sheet of
the Borrower as at Third Quarter End 2000 and the related unaudited consolidated
statements of income and of cash flows for the fiscal quarter ended on such
date, copies of which have heretofore been furnished to the Agent, present
fairly in all material respects the financial condition of the Borrower as at
such respective dates, and the results of its operations and its cash flows for
the fiscal periods then ended. The audited consolidated balance sheet of NNE as
at December 31, 1999, and the related audited consolidated statements of income
and of cash flows for the fiscal year ended on such date, certified by the
Accountants, and the unaudited consolidated balance sheet of NNE as at June 30,
2000, and the related unaudited consolidated statements of income and of cash
flows for the fiscal quarter ended on such date, copies of which have heretofore
been furnished to the Agent, present fairly, to the best knowledge of the
Borrower, in all material respects the financial condition of NNE as at such
respective dates, and the results of its operations and its cash flows for the
fiscal periods then ended. All such financial statements (the "Financial
Statements"), including the related schedules and notes thereto, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved. Neither the Borrower nor NNE has, as of such date, any Guarantee
Obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment, including, without limitation, any
interest rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto. Since Fiscal Year
End 1999 (or, with respect to NNE prior to consummation of the NNE Acquisition,
December 31, 1999) there has been no event or condition resulting in a Material
Adverse Effect.
(b) The pro forma balance sheet of the Borrower as at December 31, 2000, a
copy of which has heretofore been furnished to the Agent, presents fairly the
pro forma financial condition of the Borrower as at such date, assuming (i) the
Loans to be made, and Letters of Credit to be issued, on the Closing Date had
been made and issued, as applicable, (ii) the NNE Acquisition had been
consummated immediately prior to such date in accordance with the terms of the
Acquisition Agreement and (iii) all Indebtedness to be repaid on the Closing
Date had been repaid.
3.2 Corporate Existence; Compliance with Law. The Borrower and each
Subsidiary, (a) is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its organization, (b) has the corporate,
partnership or limited liability company power, as the case may be, and
authority, and the legal right, to own and operate its Properties, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged and in which it proposes to be engaged after the Closing Date,
(c) is duly qualified as a foreign entity and in good standing under the laws of
each jurisdiction where its ownership, lease or operation of property or the
conduct of its business requires such qualification, each of which jurisdictions
is
32
set forth on Schedule 3.1 hereto and (d) is in compliance with all Requirements
of Law except to the extent that the failure to comply therewith could not, in
the aggregate, reasonably be expected to have a Material Adverse Effect.
3.3 Corporate Power; Authorization; Enforceable Obligations. (a) The
Borrower and each of its Subsidiaries has the corporate, partnership or limited
liability company power, as the case may be, and authority, and the legal right,
to make, deliver and perform the Acquisition Agreement and the Loan Documents,
in each case, to which it is or will be a party, to borrow hereunder and to
consummate the NNE Acquisition under the Acquisition Agreement, and the
applicable Loan Party has taken all necessary corporate action to authorize (i)
the borrowings on the terms and conditions of this Agreement and the Notes, (ii)
the execution, delivery and performance of the Acquisition Agreement and the
Loan Documents to which it is or will be a party and (iii) the consummation of
the NNE Acquisition. Each Subsidiary has the corporate, partnership or limited
liability company power and authority, and the legal right, to make, deliver and
perform the Loan Documents to which it is or will be a party and has taken all
corporate, partnership or limited liability company action, as the case may be,
to authorize the execution, delivery and performance of such Loan Documents.
(b) No consent or authorization of, filing with or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder, the consummation of the NNE
Acquisition or the execution, delivery, performance, validity or enforceability
of this Agreement, the Notes, the other Loan Documents or the Acquisition
Agreement except for any consent, authorization, filing or other act which has
been made or obtained and the filing and recording, as applicable, of the UCC-1
Financing Statements and the Mortgage pursuant to Section 4.1. This Agreement
and the Acquisition Agreement have been, and each of the Notes and the other
Loan Documents to which the Borrower or any Subsidiary is or will be a party
will be, duly executed and delivered by it. This Agreement and the Acquisition
Agreement constitute, and each of the Notes and the other Loan Documents when
executed and delivered will constitute, a legal, valid and binding obligation of
the Borrower and each Subsidiary (to the extent the Borrower or such Subsidiary
is a party thereto) enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
3.4 No Legal Bar. The execution, delivery and performance of this
Agreement, the Notes, the other Loan Documents and the Acquisition Agreement,
the borrowings hereunder and the use of the proceeds thereof, and the
consummation of the NNE Acquisition will not violate any material Requirement of
Law or Contractual Obligation of the Borrower or any Subsidiary, and will not
result in, or require, the creation or imposition of any Lien on any of its
properties or revenues pursuant to any such Requirement of Law or Contractual
Obligation, except pursuant to the Loan Documents.
3.5 No Material Litigation. Except as set forth in Schedule 3.5, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against the Borrower or any Subsidiary or against any of its or
their properties or revenues or by or against any Affiliate of the Borrower or
33
any Subsidiary, (a) on the Closing Date with respect to this Agreement, the
Notes or the other Loan Documents, or the Acquisition Agreement or any of the
transactions contemplated hereby or thereby or (b) which could reasonably be
expected to have a Material Adverse Effect.
3.6 Ownership of Property; Liens; Condition of Properties. The Borrower and
each Subsidiary has good and marketable title to all Properties purported to be
owned thereby, free and clear of any Liens, except those permitted by Section
6.3. The property and assets of the Borrower and its Subsidiaries constitute all
property and assets necessary for the business of the Borrower and its
Subsidiaries, are in good order and repair (ordinary wear and tear excepted) and
are fully covered by the insurance required under the Loan Documents. Neither
the Borrower nor any Subsidiary has used (or permitted the filing of any
financing statement under) any legal or operating name at any time during the
twelve consecutive calendar months immediately preceding the execution of this
Agreement, except as identified on Schedule 3.6.
3.7 Intellectual Property. The Borrower and each Subsidiary owns, or is
licensed to use, all trademarks, trade names, patents and copyrights necessary
for the conduct of its business as currently conducted (the "Intellectual
Property"), except to the extent that the failure to so own or use would not
have a Material Adverse Effect. To the Borrower's knowledge, no claim which
could reasonably be expected to have a Material Adverse Effect has been asserted
and is pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property, nor does the Borrower or any Subsidiary know of any valid basis for
any such claim. To the Borrower's knowledge, the use of such Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person, nor, to the Borrower's knowledge, does the use by other Persons of
such Intellectual Property infringe on the rights of the Borrower or any
Subsidiary.
3.8 Taxes. The Borrower and each Subsidiary has filed or caused to be filed
all tax returns which are required to be filed and has paid all taxes shown to
be due and payable on said returns or on any assessments made against it or any
of its property and all other taxes, fees or other charges imposed on it or any
of its property by any Governmental Authority (other than any not yet delinquent
or the amount or validity of which are currently being contested in good faith
by appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Borrower or such Subsidiary, as
appropriate); and no tax Lien has been filed, and no claim is being asserted
with respect to any such tax, fee or other charge.
3.9 Federal Regulations. No Loan, no Letter of Credit, and no part of the
proceeds thereof are intended to be or will be used, directly or indirectly, for
"purchasing" or "carrying" any Margin Stock within the respective meanings of
each of the quoted terms under Regulation U or for any purpose which violates
the provisions of the Regulations of the Board of Governors of the Federal
Reserve System. If requested by the Agent, the Borrower will furnish to the
Agent a statement to the foregoing effect in conformity with the requirements of
Form U-1 referred to in Regulation U.
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3.10 ERISA Compliance.
(a) The Borrower and each Subsidiary is in compliance in all respects with
all applicable provisions of ERISA, and all rules, regulations and orders
implementing ERISA, except to the extent that the failure to comply therewith
would not, in the aggregate, have a Material Adverse Effect.
(b) Neither the Borrower, nor any Subsidiary or any ERISA Affiliate thereof
maintains or contributes to (or has maintained or contributed to) any
Multiemployer Plan under which the Borrower, any Subsidiary or any ERISA
Affiliate thereof could have any withdrawal liability.
(c) Neither the Borrower, nor any Subsidiary or any ERISA Affiliate thereof
sponsors or maintains any defined benefit pension plan under which there is an
accumulated funding deficiency within the meaning of Section 412 of the Code,
whether or not waived.
(d) The liability for accrued benefits under each defined benefit pension
plan that will be sponsored or maintained by the Borrower, any Subsidiary or any
ERISA Affiliate thereof (determined on the basis of the actuarial assumptions
utilized by the PBGC) does not exceed the aggregate fair market value of the
assets under each such defined benefit pension plan.
(e) The aggregate liability of the Borrower, each Subsidiary and each ERISA
Affiliate thereof arising out of or relating to a failure of any employee
benefit plan within the meaning of Section 3(2) of ERISA to comply with
provisions of ERISA or the Code will not have a Material Adverse Effect.
(f) There does not exist any unfunded liability (determined on the basis of
actuarial assumptions utilized by the actuary for the plan in preparing the most
recent annual report) of the Borrower, any Subsidiary or any ERISA Affiliate
thereof under any plan, program or arrangement providing post-retirement, life
or health benefits.
(g) No Reportable Event and no Prohibited Transaction (as defined in ERISA)
has occurred or is occurring with respect to any plan with which the Borrower or
any Subsidiary is associated.
3.11 Investment Company Act; Public Utility Holding Company Act. Neither
the Borrower nor any Subsidiary is an "investment company", or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended (the "Investment Company Act"). Neither the
Borrower nor any Subsidiary is a "holding company," or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
3.12 Subsidiaries. As of the Closing Date, assuming consummation of the NNE
Acquisition, the Borrower has no Subsidiaries other than those set forth on
Schedule 3.12.
3.13 Purpose of Loans and Letters of Credit. (a) The proceeds of the
Revolving Loans are intended to be and shall be used by the Borrower as follows:
(i) to finance, in part, the NNE
35
Acquisition, (ii) to pay fees and expenses in connection with preparation and
negotiation of the Loan Documents and consummation of the transactions
contemplated thereby, (iii) for working capital and general corporate purposes
of the Borrower and its Subsidiaries and (iv) to repay certain Indebtedness of
the Borrower and its Subsidiaries existing on the Closing Date.
(b) The proceeds of the Term Loans are intended to be and shall be used by
the Borrower to finance, in part, the NNE Acquisition.
(c) The Letters of Credit shall be used for general corporate purposes of
the Borrower and its Subsidiaries.
3.14 Accuracy and Completeness of Information. All information contained in
any material application, schedule, report, certificate, or any other document
given to the Agent or any Lender by or on behalf of the Borrower or any
Subsidiary in connection with the Loan Documents is in all material respects
true, accurate and complete as of the date referred to therein, and no such
Person has omitted to state therein (or failed to include in any such document)
any material fact or any fact necessary to make such information not misleading.
All projections given to the Agent or any Lender by or on behalf of the Borrower
or any Subsidiary have been prepared with a reasonable basis and in good faith
making use of such information as was available at the date such projection was
made. The projections and pro forma financial information contained in such
materials are based upon good faith estimates and assumptions believed by the
Borrower to be reasonable at the time made and as of the Closing Date, it being
recognized that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by any such
projections may differ from the projected results.
3.15 Real Property Assets. Schedule 3.15 sets forth all real property that,
as of the Closing Date, is owned, leased, occupied, used, controlled, managed or
operated by the Borrower and its Subsidiaries, including all real property
acquired in connection with the NNE Acquisition.
3.16 Permits, Etc.. The Borrower and its Subsidiaries have all permits,
licenses, authorizations and approvals required for each of them lawfully to
own, lease, control, manage and operate its Properties and businesses, except
for such permits, licenses, authorizations or approvals for which the failure to
obtain or maintain could not have a Material Adverse Effect. No condition exists
or event has occurred which, in itself or with the giving of notice or lapse of
time or both, would result in the suspension, revocation, impairment, forfeiture
or non-renewal of any such permit, license, authorization or approval.
3.17 Nature of Business. Neither the Borrower nor any Subsidiary is engaged
in any material business other than the manufacture and sale of extruded
aluminum and thermal management products.
3.18 Insolvency. After giving effect to the repayment of all Indebtedness
to be repaid on the Closing Date in accordance with the terms of this Agreement,
the funding of Loans and the issuance of any Letters of Credit on the Closing
Date, the application of the proceeds of such Loans as provided herein,
consummation of the NNE Acquisition, and the payment of all
36
estimated legal, underwriting, investment banking, accounting and other fees
related hereto and thereto, the Borrower and each other Loan Party will be
Solvent as of and on the Closing Date.
3.19 Labor Matters. As of the Closing Date, there are no strikes or other
labor disputes against the Borrower or any Subsidiary pending, or to the
Borrower's knowledge, threatened against it or any Subsidiary.
3.20 Condemnation. No taking of any of the Properties or any part thereof
through eminent domain, conveyance in lieu thereof, condemnation or similar
proceeding is pending or, to the knowledge of the Borrower, threatened by any
Governmental Authority.
3.21 Representations and Warranties in Acquisition Agreement. As of the
Closing Date, the Agent has received a complete and correct copy of the
Acquisition Agreement (including all exhibits, schedules and disclosure letters
referred to therein or delivered pursuant thereto, if any) and all amendments
thereto, waivers relating thereto and other side letters or agreements affecting
the terms thereof. As of the Closing Date, the Acquisition Agreement has been
duly executed and delivered by the Borrower. To the best of the Borrower's
knowledge, the Seller has not defaulted with respect to, and there has not
occurred any event which with the giving of notice or lapse of time would
constitute a default by the Seller with respect to, its representations,
warranties or covenants in the Acquisition Agreement. There is no material
default by the Borrower with respect to, nor has there occurred any event which
with the giving of notice or lapse of time would constitute a material default
by the Borrower with respect to, its representations, warranties or covenants in
the Acquisition Agreement. The representations and warranties in the Acquisition
Agreement shall be deemed to be made by the Borrower for the benefit of the
Agent and the Lenders as if set forth herein at length.
SECTION 4. CONDITIONS PRECEDENT
4.1 Conditions to Closing Date. The agreement of each Lender to make the
Loans requested to be made by it on the Closing Date and to participate in any
Letters of Credit to be issued on the Closing Date and the agreement of the
Agent to issue any Letters of Credit requested to be issued on the Closing Date,
in each case in accordance with the terms hereof, is subject to the
satisfaction, immediately prior to or concurrently with the making of such Loans
and/or the issuance of and participation in such Letters of Credit on the
Closing Date, of the following conditions precedent:
(a) Credit Agreement. The Agent shall have received this Agreement,
executed and delivered by an officer of the Borrower, each Lender and the Agent.
(b) Other Loan Documents; Landlord Consents. The Agent shall have received
each other Loan Document, in each case dated as of the Closing Date (unless
otherwise agreed to by the Agent) and executed and delivered by an officer of
the relevant Loan Party. The Agent shall have received a Landlord Consent
executed by the landlord with respect to each of the following properties
occupied by the Borrower or its Subsidiaries: (i) 000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxxxx; (ii) 15707, 15555 and 00000 Xxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxxxx; (iii) 000 Xxxxx Xxxx, Xxxx Xxxxx, Xxxxxxxxxxxxx; and (iv) 28715 Xxx
Xxxxxxxxx/00000 Xxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx.
00
(x) Incumbency Certificate. The Agent shall have received an incumbency
certificate of each Loan Party, dated the Closing Date, executed by its
Secretary or Assistant Secretary.
(d) Corporate Proceedings. The Agent shall have received a copy of the
resolutions of the Board of Directors of each Loan Party authorizing (i) the
Loan Documents to which it is or will be a party, (ii) in the case of the
Borrower, the borrowings contemplated hereunder and (iii) in the case of the
Borrower, the Acquisition Agreement, in each case certified by the Secretary or
an Assistant Secretary of such Loan Party as of the Closing Date, which
certificate states that the resolutions thereby certified have not been amended,
modified, revoked or rescinded and are in full force and effect.
(e) Organizational Documents. The Agent shall have received copies of the
certified articles of incorporation and by-laws of each Loan Party, certified as
of the Closing Date as complete and correct copies thereof by the Secretary or
an Assistant Secretary of such Loan Party.
(f) Costs. The Agent shall have received payment or evidence of payment by
the Borrower of all reasonable costs, expenses and taxes (including, without
limitation, those payable pursuant to Section 9.5) accrued and unpaid and
otherwise due and payable on or before the Closing Date by the Borrower pursuant
to this Agreement.
(g) Fees. The Agent and the Lenders shall have received the fees to be
paid on the Closing Date pursuant to that certain fee letter dated as of the
even date herewith between the Borrower and the Agent.
(h) Legal Opinions. The Agent shall have received, with a counterpart for
each Lender, the following executed legal opinions, each dated the Closing Date:
(A) the executed legal opinion of Xxxxxxx Xxxxxx & Xxxxx LLP, counsel
to the Loan Parties, in form and substance satisfactory to the Agent;
provided that issues of California law shall be opinion on by Xxxxxx &
Schiff, LLP;
(B) the executed legal opinion of McLane, Graf, Xxxxxxxxx & Xxxxxxxxx,
New Hampshire counsel to the Loan Parties, in form and substance
satisfactory to the Agent, with regard to the Mortgage; and
(C) such other legal opinions as the Agent may reasonably request.
(i) Acquisition. The NNE Acquisition shall have been consummated in
accordance with the Acquisition Agreement, and the Agent shall have received,
(i) a copy of the Acquisition Agreement (including all exhibits, schedules and
disclosure letters referred to therein or delivered pursuant thereto, if any,
and all amendments thereto, waivers relating thereto and other side letters or
agreements affecting the terms thereof), in form and substance satisfactory to
the Agent, certified as true and correct and in full force and effect on and as
of the Closing Date by a Responsible Officer of the Borrower, (ii) a certificate
of a Responsible Officer of the Borrower to the effect that the transactions
contemplated by the Acquisition Agreement have been consummated without
amendment, waiver or modification of the terms thereof, except as agreed to in
writing by the Agent, (iii) copies of each legal opinion of counsel to the
Seller and the
38
Borrower delivered pursuant to the Acquisition Agreement, each of which shall
contain a statement or be accompanied by a letter addressed to the Agent to the
effect that the Agent and the Lenders may rely upon such opinion to the same
extent as if it were originally addressed to each of them, in form and substance
satisfactory to the Agent and (iv) evidence acceptable to the Agent that the
provisions of the Shareholder Agreement were complied with in connection with
the NNE Acquisition and that such agreement has terminated.
(j) Acquisition Price. The aggregate consideration paid by to the Seller
in connection with the NNE Acquisition shall not exceed $51,500,000, and the
Agent shall have received a certificate of a Responsible Officer of the Borrower
to such effect.
(k) Equity Contribution, Etc. The Agent shall have received evidence
acceptable to it that the following amounts, in addition to Loans, were used to
consummate the NNE Acquisition: (i) an equity contribution in the Borrower of at
least $1,964,000 made on the Closing Date and (ii) at least $13,000,000 of cash
of the Borrower.
(l) Appraisal(s). The Agent shall have received appraisal(s) of the assets
of the Borrower and its Subsidiaries, as well as NNE, each prepared by an
appraiser satisfactory to the Agent, and otherwise in form and substance
satisfactory to the Agent.
(m) Recording. The Agent shall have received as of the Closing Date
evidence of the recording, or of the provision acceptable to the Agent for the
recording, of the Mortgage and any other documents reasonably necessary to be
recorded in such office or offices as may be necessary or desirable to perfect
each Lien purported to be created thereby or to otherwise protect the rights of
the Agent and the Lenders thereunder and evidence of the filing, or of provision
acceptable to the Agent for the filing, of appropriate UCC financing statements,
naming the Agent, for the benefit of the Lenders, as secured party, duly
executed by the applicable Loan Party under the Security Agreement or the
Guarantor Security Agreements, in such office or offices as may be necessary or
desirable to perfect the security interests purported to be created by any of
the Collateral Documents or the Guarantor Collateral Documents, including as a
result of the NNE Acquisition.
(n) Title Policy. The Agent shall have received a commitment for an ALTA
Lender's policy of Title Insurance relating to the Mortgage naming the Agent,
for the benefit of the Lenders, as the insured, in an amount, containing
coverage (including endorsements) and otherwise in form and substance
satisfactory to the Agent and subject only to those exceptions permitted by the
Agent.
(o) Flood Plain. The Borrower and its Subsidiaries shall have delivered to
the Agent, and the Agent shall have approved with respect to the Property
encumbered by the Mortgage, evidence whether such Property is located in an area
identified as a flood plain area as defined by the U.S. Department of Housing
and Urban Development pursuant to the Flood Disaster Protection Act of 1973.
(p) Environmental Audit. The Agent shall have received a copy of that
certain "Environmental Assessment of the National Xxxxxxxxx Xxxxxxxxxxx, Xxxxxx,
XX," by Environ,
39
dated September 14, 2000, accompanied by a reliance letter from Environ, in form
and substance satisfactory to the Agent, providing that the Agent may rely
thereon.
(q) Lien Searches. The Agent shall have received such UCC searches as it
shall request.
(r) Stock Certificates; Etc. The Agent shall have received original stock
certificates representing all outstanding shares of stock of each Subsidiary,
together with an undated stock power for each of such certificates, duly
executed in blank by an authorized officer of the pledgor thereof.
(s) Good Standing Certificates. The Agent shall have received, with respect
to each Loan Party, a certificate, dated a recent date, of the Secretary of
State of the state of formation of such Loan Party and each other jurisdiction
where such Loan Party is required to be qualified to do business under such
jurisdiction's law, certifying as to the existence and good standing of, and the
payment of taxes by, each Loan Party in such state.
(t) No Default/Representations. No Default shall have occurred and be
continuing on the Closing Date or would occur after giving effect to the
repayment of all Indebtedness to be repaid on the Closing Date in accordance
with the terms of this Agreement, the funding of Loans and the issuance of any
Letters of Credit on the Closing Date, the application of the proceeds of such
Loans as provided herein, consummation of the NNE Acquisition, and the payment
of all estimated legal, underwriting, investment banking, accounting and other
fees related hereto and thereto, and the representations and warranties
contained in this Agreement and each other Loan Document, and the
representations and warranties contained in each certificate or other writing
delivered to the Agent or the Lenders in satisfaction of the conditions set
forth in this Section 4.1 prior to or on the Closing Date, except to the extent
such representations and warranties expressly relate to an earlier date, shall
be correct in all material respects on and as of the Closing Date, and the Agent
shall have received a certificate of a Responsible Officer of the Borrower to
such effect in the form of Exhibit C, dated as of the Closing Date.
(u) Solvency Certificate. The Agent shall have received a certificate of
the Chief Financial Officer of the Borrower and each Guarantor, respectively, to
the effect that the Borrower and each Guarantor is Solvent after giving effect
to the repayment of all Indebtedness to be repaid on the Closing Date in
accordance with the terms of this Agreement, the funding of Loans and the
issuance of any Letters of Credit on the Closing Date, the application of the
proceeds of such Loans as provided herein, consummation of the NNE Acquisition,
and the payment of all estimated legal, underwriting, investment banking,
accounting and other fees related hereto and thereto.
(v) Employment Agreement. The Agent shall have received a copy of the
employment agreement for Xxxxxx Xxxxxxxx, in form and substance satisfactory to
the Agent, and certified as true and correct and in full force and effect as of
the Closing Date by a Responsible Officer of the Borrower.
(w) Insurance Policies. The Agent shall have received evidence that the
insurance policies provided for in Section 5.5 (including the keyman insurance)
are in full force and effect,
40
certified by the insurance broker therefor, together with (i) appropriate
evidence showing the Agent as an additional named insured or loss payee, as
appropriate, for the benefit of the Lenders and (ii) the original policy (or
policies) of keyman insurance, all in form and substance reasonably satisfactory
to the Agent.
(x) Financial Statements, Etc. The Agent shall have received the Financial
Statements and the pro forma balance sheet referred to in Section 3.1(b). The
Agent shall have received a pro forma Covenant Compliance Certificate (for which
Interest Expense shall be calculated based on the assumption that (i)
Indebtedness outstanding for such period was equal to that outstanding on the
Closing Date (immediately following consummation of the transactions
contemplated to occur on the Closing Date, including borrowings hereunder) and
(ii) the interest rate applicable to such Indebtedness was equal to that
applicable to the borrowings on the Closing Date), in form and substance
satisfactory to the Agent.
(y) Existing Debt. The Agent shall have received evidence satisfactory to
it that all Indebtedness of the Loan Parties not permitted by Section 6.2 has
been repaid, and all Liens in connection therewith released.
(z) Additional Proceedings. The Agent shall have received such other
approvals, opinions and documents as any Lender, through the Agent, may
reasonably request and all legal matters incident to the making of such Loans
and issuance of such Letters of Credit shall be reasonably satisfactory to the
Agent.
4.2 Conditions to Each Loan or Letter of Credit. The agreement of each
Lender to make the Loans requested to be made by it on the Closing Date, the
agreement of each Lender to participate in any Letters of Credit to be issued on
the Closing Date, and the agreement of the Agent to issue any Letters of Credit
to be issued on the Closing Date, and the agreement of each Lender to make each
Revolving Loan, and the agreement of the Agent to issue each Letter of Credit
from time to time requested to be made or issued by it, as applicable, is
subject to the satisfaction, immediately prior to or concurrently with the
making of such Loan or the issuance of such Letter of Credit, of the following
conditions precedent:
(a) Representations and Warranties; No Default. The following statements
shall be true and the Borrower's acceptance of the proceeds of such Loan or its
delivery of an executed Letter of Credit Request shall be deemed to be a
representation and warranty of the Borrower, on the date of such Loan or as of
the date of issuance of such Letter of Credit, as applicable, that:
(i) The representations and warranties contained in this Agreement,
each other Loan Document and each certificate or other writing delivered to the
Agent or the Lenders in connection herewith are correct on and as of such date
in all material respects as though made on and as of such date except to the
extent that such representations and warranties expressly relate to an earlier
date; and
(ii) No Default has occurred and is continuing or would result from the
making of the Loan or the issuance of such Letter of Credit to be made or issued
on such date.
41
(b) Legality. The making of such Loan or the issuance of such Letter of
Credit, as applicable, shall not contravene any law, rule or regulation
applicable to any Lender or the Borrower or any other Loan Party.
(c) Borrowing Notice or Letter of Credit Request. The Agent shall have
received a Borrowing Notice or Letter of Credit Request, as applicable, pursuant
to the provisions of this Agreement from the Borrower.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that from and after the Closing Date, so long as
any Note remains outstanding and unpaid, any Letter of Credit is outstanding or
any other amount is owing to any Lender or the Agent hereunder:
5.1 Financial Statements. The Borrower shall furnish to the Agent:
(a) as soon as available, but in any event within 90 days after the end of
each fiscal year of the Borrower, a copy of the audited consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such year and the
related audited income statement and operating cash flow statement, reported on
without a "going concern" or like qualification or exception, or other
qualification arising out of the scope of the audit, by the Accountants; and
(b) as soon as available, but in any event not later than 45 days after the
end of each fiscal quarter of the Borrower, the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such quarter and the
related unaudited income statement and operating cash flow statement for such
quarter and the portion of the fiscal year through the end of such quarter,
certified by a Responsible Officer of the Borrower as being fairly stated in all
material respects (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by the Accountants and disclosed therein).
5.2 Certificates; Other Information. The Borrower shall:
(a) furnish to the Agent concurrently with the delivery of the financial
statements referred to in Section 5.1, a Covenant Compliance Certificate with
respect to such quarter or fiscal year, as the case may be;
(b) as soon as available, but in any event within 45 days after the end of
each fiscal year of the Borrower, a copy of (i) the annual operating budget for
the Borrower and its Subsidiaries for such fiscal year and (ii) a summary
forecast of the results of the Borrower and its Subsidiaries covering the period
up to and including the later of the Revolving Loan Commitment Expiration Date
and the Term Loan Maturity Date, in each case in form satisfactory to the Agent;
42
(c) within 30 days after the end of each fiscal month, the Borrower shall
deliver to the Agent, for distribution to the Lenders, (i) a Borrowing Base
Certificate as of the end of such month and (ii) an accounts receivable agings
report for each Subsidiary as of the end of such month and in form satisfactory
to the Agent;
(d) furnish to the Agent within five Business Days after the same are
filed, copies of all financial statements and reports which the Borrower or any
Subsidiary may make to, or file with, the Securities and Exchange Commission or
any successor or analogous Governmental Authority;
(e) furnish to the Agent promptly but, in any event, within five days,
after the Borrower's receipt thereof, copies of all financial reports
(including, without limitation, management letters), if any, submitted to the
Borrower by the Accountants in connection with any annual or interim audit of
the books thereof;
(f) furnish to the Agent as soon as possible and in any event within five
Business Days after a Responsible Officer has knowledge of the occurrence of a
Default or, in the good faith determination of a Responsible Officer of the
Borrower, a Material Adverse Effect, the written statement by a Responsible
Officer of the Borrower, setting forth the details of such Default or Material
Adverse Effect and the action which the Borrower proposes to take with respect
thereto;
(g) furnish to the Agent (i) as soon as possible and in any event within
five days after the Borrower knows or has reason to know that any Termination
Event with respect to any Plan has occurred, a statement of a Responsible
Officer of the Borrower describing such Termination Event and the action, if
any, which the Borrower proposes to take with respect thereto, (ii) promptly and
in any event within five Business Days after receipt thereof by the Borrower,
any Subsidiary or any of its or their ERISA Affiliates from the PBGC, copies of
each notice received by the Borrower, any Subsidiary or any of its or their
ERISA Affiliates of the PBGC's intention to terminate any Plan or to have a
trustee appointed to administer any Plan, (iii) promptly and in any event within
five Business Days after the filing thereof with the Internal Revenue Service,
copies of each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) with respect to each Single Employer Plan maintained for or
covering employees of the Borrower or any of its Subsidiaries if the present
value of the accrued benefits under the Plan exceeds its assets by an amount
which could cause a Material Adverse Effect and (iv) promptly and in any event
within five Business Days after receipt thereof by the Borrower, any Subsidiary
or any of its or their ERISA Affiliates from a sponsor of a Multiemployer Plan
or from the PBGC, a copy of each notice received by the Borrower, any Subsidiary
or any of its ERISA Affiliates concerning the imposition or amount of withdrawal
liability under Section 4202 of ERISA or indicating that such Multiemployer Plan
may enter reorganization status under Section 4241 of ERISA;
(h) furnish to the Agent promptly after the commencement thereof, but in
any event not later than five days after service of process with respect thereto
on, or the obtaining of knowledge by, the Borrower, notice of each action, suit
or proceeding before any court or governmental authority or other regulatory
body or any arbitrator as to which there is a reasonable possibility of a
determination that would have a Material Adverse Effect; and
43
(i) furnish to each Lender promptly such additional financial and other
information as any Lender may from time to time reasonably request.
5.3 Payment of Obligations. The Borrower shall, and shall cause each of its
Subsidiaries to, pay, discharge or otherwise satisfy at or before maturity or
before they become delinquent, as the case may be, all its obligations of
whatever nature, except where the failure to so satisfy such obligations would
not have a Material Adverse Effect or except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Borrower or such Subsidiary, as applicable.
5.4 Conduct of Business and Maintenance of Existence. The Borrower shall,
and shall cause each of its Subsidiaries to, (i) continue to engage in business
of the same general type as conducted by the Borrower and its Subsidiaries as of
the Closing Date, (ii) preserve, renew and keep in full force and effect its
corporate or other legal existence, as applicable, (iii) except where the loss
thereof could not, in the aggregate, have a Material Adverse Effect, take all
reasonable action to maintain all rights, registrations, licenses, privileges
and franchises necessary or desirable in the normal conduct of its business, and
(iv) except to the extent that failure to comply therewith could not, in the
aggregate, have a Material Adverse Effect, comply with all Contractual
Obligations and Requirements of Law, such compliance to include, without
limitation (a) paying before the same become delinquent all taxes, assessments
and governmental charges or levies imposed upon it or upon its income or profits
or upon any of its Properties and (b) paying all lawful claims which if unpaid
might become a Lien upon any of its Properties; provided, however, that the
Borrower shall not be required to pay and discharge or to cause to be paid and
discharged any such tax, assessment, charge, levy or claim so long as (i) the
validity or applicability thereof is being contested in good faith by
appropriate proceedings and (ii) the Borrower shall, to the extent required by
GAAP, have set aside on its books adequate reserves with respect thereto.
5.5 Maintenance of Property; Insurance. (a) The Borrower shall, and shall
cause each of its Subsidiaries to, keep all property material or necessary to
its business in good working order and condition (ordinary wear and tear
excepted).
(b) The Borrower shall, and shall cause each of its Subsidiaries to,
maintain with financially sound and reputable insurance companies or
associations insurance on such of its property in at least such amounts and
against such risks as are usually insured against in the same general area by
companies engaged in the same or a similar business; and furnish to the Agent,
upon written request, full information as to the insurance carried. The Borrower
shall also maintain keyman life insurance on the life of Xxxxxx Xxxxxxxx, in the
amount of at least $10,000,000, and shall at all times cause such insurance to
be assigned to the Agent pursuant to such assignment agreements and related
documentation as the Agent shall request. All such policies of insurance shall
contain an endorsement, in form and substance reasonably satisfactory to the
Agent in its sole discretion, showing the Agent, on behalf of the Lenders, as
additional insured or loss payee, as appropriate. Such endorsement, or an
independent instrument furnished to the Agent, shall provide that the insurance
companies will give the Agent at least 30 days' prior written notice before any
such policy or policies of insurance shall be altered or canceled. The Borrower
shall deliver to the Agent insurance certificates certified by the Borrower's
44
insurance brokers, as to the existence and effectiveness of each policy of
insurance and evidence of payment of all premiums then due and payable therefor.
In addition, the Borrower shall notify the Agent promptly of any occurrence
causing a material loss of any insured Property and the estimated (or actual, if
available) amount of such loss. Further, the Borrower shall maintain all
insurance required under the other Loan Documents.
(c) Each policy for liability insurance shall provide for all losses to be
paid on behalf of the Agent and the Borrower, as their respective interests may
appear, and each policy for property damage insurance shall, to the extent
applicable to equipment and inventory, provide for all losses (except for losses
of less than $250,000 per occurrence and except for the Press Proceeds, which
may be paid directly to the Borrower) to be paid directly to the Agent.
(d) Reimbursement under any liability insurance maintained by the Borrower
or any Subsidiary pursuant to this Section 5.5 may be paid directly to the
Person who shall have incurred liability covered by such insurance. In the case
of any loss involving damage to equipment or inventory as to which Section
5.5(e) is not applicable, the Borrower will make or cause to be made the
necessary repairs to or replacements of such equipment or inventory, and any
proceeds of insurance maintained by the Borrower pursuant to this Section 5.5
shall be paid by the Agent to the Borrower, upon presentation of invoices and
other evidence of obligations, as reimbursement for the costs of such repairs or
replacements; provided that this Section 5.5(d) shall not apply to the Press
Proceeds or the equipment for which such proceeds were paid.
(e) Upon the actual or constructive total loss (in excess of $250,000 per
occurrence) of any equipment or inventory during the continuance of a Default,
all insurance proceeds in respect of such equipment or inventory shall be paid
to the Agent and applied in the manner set forth in Section 2.5(f).
5.6 Inspection of Property; Books and Records; Discussions. The Borrower
shall, and shall cause each Subsidiary to, keep proper books of records and
account in which full, true and correct entries in conformity with GAAP and all
Requirements of Law shall be made of all material dealings and transactions in
relation to its business and activities (except for certain Subsidiaries'
nonmaterial deviations from GAAP with respect to certain expenses incurred by
the Borrower on behalf of such Subsidiaries); and upon reasonable notice and at
such reasonable times during usual business hours, permit representatives of the
Agent and any Lender to (i) visit and inspect any of its properties and examine
and make abstracts from any of its books and records at any reasonable time and
as often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Subsidiaries with officers of the Borrower and its Subsidiaries and with its
Accountants and (ii) at the expense of the Borrower, on an annual basis (or more
frequently if a Default has occurred and is continuing) make such further
inspections and examinations, including field audits, as deemed reasonably
necessary by the Agent or any Lender to confirm information provided by the
Borrower in any Borrowing Base Certificate.
5.7 Use of Proceeds. The Borrower will use the Letters of Credit, and the
proceeds of the Loans, as set forth in Section 3.13, and not for the purchasing
or carrying of any Margin Stock.
45
5.8 Interest Rate Protection. (a) Within 90 days after the Closing Date,
the Borrower will enter into and maintain, for at least a three-year period, one
or more Hedging Agreements, each in form and substance satisfactory to the
Agent, covering a minimum of 50% of the outstanding Term Loans on such date.
(b) The Borrower shall not, and shall not permit any of its Subsidiaries
to, incur any Hedging Obligation, except that the Borrower or any Subsidiary may
enter into any Hedging Obligation that (i) is of a non-speculative nature and
(ii) is for the purpose of hedging the Borrower's or such Subsidiary's
reasonably estimated interest rate exposure.
5.9 Acquisition of Real Property. The Borrower shall submit to the Agent
for the prior approval of the Majority Lenders any documents relating to any fee
simple real property interest to be acquired by any Borrower or any Subsidiary
for Consideration in excess of $500,000. Each such acquisition, and the
documents governing such acquisition, shall be subject to the approval of the
Majority Lenders. The Majority Lenders may require that any such property
interest become part of the Collateral or the Guarantor Collateral (as
applicable), and that the Borrower provide the Agent with title insurance and a
favorable environmental report and opinion(s) of counsel with respect thereto.
5.10 Lease and License Compliance. The Borrower shall, and shall cause each
Subsidiary to, perform and carry out the provisions of all leases, licenses,
permits and other occupancy agreements relating to real property or real
property interests which are material to the business of the Borrower or the
Subsidiaries (the "Occupancy Agreements"), and shall appear in and defend any
action in which the validity of any of the Occupancy Agreements relating to any
real property or real property interest is at issue and shall commence and
maintain any action or proceeding necessary to establish or maintain the
validity of any of such Occupancy Agreements and to enforce the provisions
thereof. The Borrower shall not, and shall not permit any Subsidiary to, amend
in a materially adverse manner or terminate any Occupancy Agreement without the
prior written consent of the Agent. The Borrower shall immediately give notice
to the Agent of any material default by it or any of its Subsidiaries or, to the
knowledge of the Borrower, by any other party to an Occupancy Agreement.
5.11 Employee Contracts. The Borrower shall give to the Agent prompt notice
of any material dispute arising out of, or material uncured default occurring
under, any employee contract of the Borrower or any Subsidiary providing for
salary payments equal to or in excess of $200,000 per year, or if any of such
contracts shall be terminated or not renewed on substantially similar terms.
5.12 Guaranties, Etc. The Borrower will cause each of its Subsidiaries
hereafter formed or acquired to execute and deliver to the Agent, concurrently
with the formation or acquisition thereof, (i) a Guarantee guaranteeing the
Obligations, (ii) a Guarantor Security Agreement granting to the Agent, for the
benefit of the Lenders, a security interest in the personal property of such
Subsidiary, together with appropriate Lien searches requested by the Agent
indicating the Lenders' first priority Lien on such personal property and (iii)
UCC-1 Financing Statements, duly executed by such Subsidiary, in form and
substance satisfactory to the Agent and, in connection with such deliveries,
cause to be delivered to the Agent (A) a favorable written opinion of counsel
satisfactory to the Agent as to such matters relating thereto
46
as any Lender through the Agent may reasonably request, in form and substance
satisfactory to the Agent, (B) such other agreements, instruments, approvals or
other documents as any Lender through the Agent may reasonably request with
respect thereto, and (C) certified copies of the organizational documents,
resolutions and incumbency certificates of such Subsidiary.
5.13 Colmar Liquidating. The Borrower agrees to deliver to the Agent, by
March 15, 2001, copies of appropriate documents dissolving Colmar Liquidating,
along with evidence of the filing thereof with the relevant Governmental
Authority. Until such time, (i) Colmar shall have no assets (other than a note
receivable in an amount not exceeding $300,000) and shall conduct no business
and (ii) neither the Borrower nor any Subsidiary shall make any Asset
Disposition, loan money or make any investment in or to Colmar Liquiditing, or
allow the proceeds of any Loans, or any Letter of Credit, to be loaned or
contributed to, or otherwise used for the benefit of Colmar Liquidating.
SECTION 6. NEGATIVE COVENANTS
The Borrower hereby agrees that from and after the Closing Date, so long as
any Note remains outstanding and unpaid, any Letter of Credit is outstanding, or
any other amount is owing to any Lender or the Agent hereunder:
6.1 Financial Condition Covenants. The Borrower shall not:
(a) Maximum Leverage Ratio. Permit the Maximum Leverage Ratio, as of the
end of any fiscal quarter of the Borrower, to exceed the following levels for
the periods indicated:
Period Ratio
------ -------
First Quarter End 2001, Second Quarter End 2001 and 2.75:1
Third Quarter End 2001
Fiscal Year End 2001, First Quarter End 2002, Second 2.25:1
Quarter End and Third Quarter End 2002
Fiscal Year End 2002 and thereafter 1.75:1
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage Ratio, as
of the end of any fiscal quarter of the Borrower, to be less than the following
levels for the periods indicated:
47
Period Ratio
------ -------
First Quarter End 2001 through and including Fiscal 1.20:1
Year End 2002
First Quarter End 2003 and thereafter 1.25:1
(c) Capital Expenditures. Permit Capital Expenditures of the Borrower and
its Subsidiaries on a consolidated basis for any fiscal year to be more than (i)
for the Borrower's Fiscal Year 2001, Fiscal Year 2002 and Fiscal Year 2003,
$4,000,000 and (ii) for each Fiscal Year thereafter, $5,000,000 per year.
(d) Minimum Net Worth. Permit Net Worth of the Borrower and its
Subsidiaries on a consolidated basis, as of the end of any fiscal quarter of the
Borrower, to be less than $33,050,000 plus (i) with respect to each fiscal
quarter of the Borrower ending on or after First Quarter End 2001, 75% of any
increase in Net Income over such amount as revealed by the Borrower's financial
statements for such fiscal quarter, such increase to become effective upon
receipt of such financial statements, plus (ii) 100% of the Net Proceeds of each
Equity Offering consummated after the date hereof, such increase to become
effective immediately, less the amount of any Permitted Stock Repurchase, such
decrease to become effective immediately.
6.2 Limitation on Indebtedness. The Borrower shall not, and shall not
permit any Subsidiary to, create, incur, assume or suffer to exist any
Indebtedness except for:
(a) Indebtedness created hereunder and under the other Loan Documents;
(b) Indebtedness (i) under any Hedging Agreement required pursuant to
Section 5.8, (ii) evidenced by performance bonds issued in the ordinary course
of business or reimbursement obligations in respect thereof or (iii) for bank
overdrafts incurred in the ordinary course of business that are promptly repaid;
(c) trade credit incurred to acquire goods, supplies, services and incurred
in the ordinary course of business;
(d) Lease Expenses which the Borrower or its Subsidiaries are not
prohibited from incurring pursuant to Section 6.11;
(e) Indebtedness not to exceed an aggregate amount of $250,000 for any
fiscal year of the Borrower secured by any purchase money Lien incurred in
connection with the acquisition by the Borrower or any Subsidiary of equipment;
(f) Indebtedness owing by any wholly-owned Subsidiary to the Borrower or
any other wholly-owned Subsidiary, and Indebtedness owing by the Borrower to any
wholly-owned Subsidiary; and
48
(g) unsecured Indebtedness in an aggregate principal amount not exceeding
$250,000 incurred in the ordinary course of business.
6.3 Limitation on Liens. The Borrower shall not, and shall not permit any
Subsidiary to, create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, except
for:
(a) Liens created hereunder or under any of the other Loan Documents;
(b) Liens for taxes not yet delinquent or which are being contested in
good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the Borrower or a Subsidiary, as
applicable, in conformity with GAAP;
(c) Liens created by operation of law not securing the payment of
Indebtedness for money borrowed or guaranteed, including carriers',
warehousemen's, mechanics', materialmen's, repairmen's or other like Liens
arising in the ordinary course of business which are not overdue for a period of
more than 45 days or which are being contested in good faith by appropriate
proceedings;
(d) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation and deposits
securing liability to insurance carriers under insurance or self-insurance
arrangements;
(e) deposits to secure the performance of bids, trade contracts (other than
for borrowed money), leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature incurred in the
ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business which, in the aggregate, could not
reasonably be expected to cause a Material Adverse Effect; and
(g) Liens securing Indebtedness permitted by Section 6.2(e); provided that
no such Lien covers any property other than the property acquired in connection
with the incurrence of such Indebtedness.
6.4 Limitation on Fundamental Changes. The Borrower shall not, and shall
not permit any Subsidiary to, (a) amend its corporate charter or by-laws in any
way that could reasonably be expected to have a Material Adverse Effect, (b)
vote to or for, or take any other action to commence or acquiesce to any
bankruptcy or similar proceeding with respect to any Loan Party, (c) enter into
any merger, consolidation or amalgamation, or liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution) except any merger,
consolidation or amalgamation of a Subsidiary into the Borrower, with the
Borrower being the survivor thereof, or between or among the Subsidiaries;
provided that the Borrower shall give the Agent thirty days' prior written
notice thereof and shall comply with all reasonable actions requested by the
Agent to protect and maintain its security interests and Liens granted pursuant
to the Loan Documents; or (d) except as permitted by Sections 6.5, convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all of its
property, business or assets.
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6.5 Limitation on Sale of Assets. The Borrower shall not, and shall not
permit any of its Subsidiaries to, make any Asset Disposition unless (i) such
Asset Disposition is for fair market value, (ii) the consideration for such
Asset Disposition is all cash, (iii) no Default has occurred and is continuing
or would result from such Asset Disposition and (iv) the consideration for such
Asset Disposition, when aggregated with the consideration for all previous Asset
Dispositions during the same fiscal year, does not exceed $250,000.
6.6 Limitation on Restricted Payments. The Borrower shall not, and shall
not permit any of its Subsidiaries to, (a) if a corporation, declare or pay any
dividend (other than dividends payable solely in common stock of the Borrower or
its Subsidiaries) on, or make any payment on account of, or set apart assets for
a sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Borrower or its Subsidiaries or any warrants or options to purchase any such
Capital Stock, whether now or hereafter outstanding, and (b) if a partnership or
a limited liability company, make any distribution with respect to the ownership
interests therein, or, in either case, any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary (such declarations, payments,
setting apart, purchases, redemptions, defeasance, retirements, acquisitions and
distributions being herein called "Restricted Payments"); provided, however,
that (i) the Borrower may consummate Permitted Stock Repurchases, on and after
receipt by the Agent of the financial statements and Covenant Compliance
Certificate for Second Quarter End 2001 pursuant to Sections 5.1(b) and 5.2(a),
so long as no Default has occurred and is continuing or would result therefrom
and (ii) the Subsidiaries shall in any case be permitted to pay cash dividends
to the Borrower.
6.7 Limitation on Investments, Loans and Advances. The Borrower shall not,
and shall not permit any Subsidiary to, make any advance, loan, extension of
credit or capital contribution to, or purchase any stock, bonds, notes,
debentures or other securities of or any assets constituting a business unit of,
or make any other investment in (any of the foregoing, an "investment"), any
Person, except:
(a) Cash Equivalents;
(b) extensions of trade credit in the ordinary course of business;
(c) the Borrower's ownership interest in its Subsidiaries; and
(d) investments (not referred to in any other clause of this Section 6.7)
in an aggregate amount during the term of this Agreement not exceeding $250,000.
6.8 Management Fees. The Borrower and its Subsidiaries shall not pay any
management fees for services rendered to any Affiliate thereof (provided that
(i) the Subsidiaries may pay management fees to the Borrower and (ii)
compensation paid to Xxxxxxxx X. Xxxxxx and Xxxxxxxx Xxxxxx in the ordinary
course of business consistent with past practices shall not be deemed to be
prohibited by this Section 6.8).
6.9 Transactions with Affiliates. The Borrower shall not, and shall not
permit any Subsidiary to, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of property or the rendering
of any service, with any Subsidiary (other than wholly-
50
owned Subsidiaries) or any Affiliate, unless such transaction is in the ordinary
course of the Borrower's or such Subsidiary's business and is upon terms no less
favorable to the Borrower or such Subsidiary, than it would obtain in a
comparable arm's length transaction with a Person not an Affiliate.
6.10 Fiscal Year. The Borrower shall not permit the fiscal year of the
Borrower or any Subsidiary to end on a day other than the last Sunday in
October.
6.11 Sale-Leaseback Transactions; Lease Obligations. The Borrower shall
not, and shall not permit any Subsidiary to, sell, assign or otherwise transfer
any of its Properties, rights or assets (whether now owned or hereafter
acquired) to any Person and thereafter directly or indirectly lease back the
same or similar property. The Borrower shall not, and shall not permit any
Subsidiary to, create, incur or suffer to exist any obligations as lessee for
the payment of Lease Expenses other than (a) rental expense with respect to
Capitalized Lease Obligations not in excess of $250,000 in any fiscal year and
(b) Lease Expenses for long-term operating leases not in excess of $2,500,000 in
any fiscal year.
6.12 Unfunded Liabilities. The Borrower shall not permit unfunded
liabilities for any and all Plans maintained for or covering employees of the
Borrower or any Subsidiary to exceed $250,000 in the aggregate at any time.
6.13 Line of Business. Neither the Borrower nor any of its Subsidiaries
shall engage in any material business other than as described in Section 3.17.
SECTION 7. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Note when due, or
the Borrower shall fail to pay any interest on any Note, or any fee referred to
in this Agreement or the letter referred to in Section 4.1(g) within two
Business Days of the date when due; or
(b) Any representation or warranty made by any Loan Party herein or in any
other Loan Document, or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement or any other Loan Document shall prove to have been incorrect in
any material respect when made; or
(c) The Borrower shall default in the observance or performance of any
agreement contained in Section 5.2(f), 5.5, 5.7, 5.12 or 5.13, or any provision
of Section 6; or
(d) Any Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or the other Loan Documents (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days after the earlier of
(i) notice thereof from the Agent to the Borrower and (ii) actual knowledge
thereof by a Responsible Officer of such Loan Party; or
(e) Any material provision of any Loan Document shall at any time for any
reason be declared null and void, or the validity or enforceability of any Loan
Document shall at any time
51
be contested by any Loan Party in writing, or a proceeding shall be commenced by
any Loan Party or by any Governmental Authority or other Person having
jurisdiction over any Loan Party, seeking to establish the invalidity or
unenforceability thereof, or any Loan Party shall deny in writing that it has
any liability or obligation purported to be created under any Loan Document or
any Loan Document shall cease to be in full force and effect; or
(f) Any Loan Party shall (i) default in any payment of principal or
interest, regardless of the amount, due in respect of any (A) Indebtedness
(other than the Notes), issued under the same indenture or other agreement, if
the maximum principal amount of Indebtedness covered by such indenture or
agreement is $250,000 or greater or (B) Guarantee Obligation with respect to an
amount of $250,000 or greater, in either case beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness or
Guarantee Obligation was created, whether or not such default has been waived by
the holders of such Indebtedness or Guarantee Obligation; or (ii) default in the
observance or performance of any other material agreement or condition relating
to any such Indebtedness or Guarantee Obligation or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
or beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or
agent on behalf of such holder or holders or beneficiary or beneficiaries) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or such Guarantee Obligation to become payable or
such Indebtedness to be required to be defeased or purchased; or
(g) (i) The Borrower or any other Loan Party shall commence any voluntary
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief entered
with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian or other similar official
for it or for all or any substantial part of its assets, or the Borrower or any
other Loan Party shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower or any other
Loan Party any involuntary case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for relief or
any such adjudication or appointment and (B) remains undismissed, undischarged,
unstayed or unbonded for a period of 60 days; or (iii) there shall be commenced
against the Borrower or any other Loan Party any case, proceeding or other
action seeking issuance of a warrant of attachment, execution, distraint or
similar process against all or any substantial part of its assets which results
in the entry of an order for any such relief which shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the entry
thereof; or (iv) the Borrower or any other Loan Party shall take any action in
writing in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii) above;
or (v) the Borrower or any other Loan Party shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due or there shall be a general assignment for the benefit of creditors;
or
52
(h) (i) Any Person shall engage in any non-exempt "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code) involving any
Plan, (ii) any "accumulated funding deficiency" (as defined in Section 302 of
ERISA), whether or not waived, shall exist with respect to any Plan, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee would reasonably be expected to result
in the termination of such Plan for purposes of Title IV of ERISA, (iv) any
Single Employer Plan shall terminate for purposes of Title IV of ERISA (other
than a standard termination) or (v) the Borrower or any Commonly Controlled
Entity would reasonably be expected to incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a Multiemployer Plan;
or
(i) One or more judgments or decrees shall be entered against one or more
of the Loan Parties involving in the aggregate a liability (not paid or fully
covered by insurance) of $250,000 or more, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal within
60 days from the entry thereof or in any event five days before the date of any
sale pursuant to such judgment or decree; or any non-monetary judgment or order
shall be entered against any Loan Party that is reasonably likely to have a
Material Adverse Effect and either (i) enforcement proceedings shall have been
commenced by any Person upon such judgment which has not been stayed pending
appeal or (ii) there shall be any period of 10 consecutive days during which a
stay of enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(j) Except for Xxxxxxxx X. Xxxxxx, Xxxxxxxx Xxxxxx and, so long as one of
the foregoing is the general partner thereof, Xxx.xxx Partners, L.P., any person
or group (within the meaning of Rule 13d-5 under the Securities Exchange Act of
1934, as amended (the "Exchange Act") and Section 13(d) and 14(d) of the
Exchange Act) becomes, directly or indirectly, in a single transaction or in a
related series of transactions by way of merger, consolidation or other business
combination or otherwise, the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act) of more than 30% of the Capital Stock of the Borrower; or
individuals who constituted the Borrower's Board of Directors as of the Closing
Date (and/or individuals nominated or otherwise appointed by such individuals)
shall cease for any reason to constitute a majority of the directors then in
office; or
(k) Any material provision of any Loan Document, after delivery thereof
pursuant to the provisions hereof, shall, for any reason other than pursuant to
the terms thereof, cease to be valid or enforceable in accordance with its
terms, or any Lien created under any Loan Document shall for any reason other
than pursuant to the terms thereof, cease to be a valid and perfected first
priority (except for as permitted by Section 6.3) Lien in any material portion
of the Collateral, the Guarantor Collateral or the property purported to be
covered thereby; or
(l) Any event or condition shall occur which the Majority Lenders
reasonably believe is likely to have a Material Adverse Effect;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) above, automatically the Revolving Loan Commitments and the
commitment to issue Letters of
53
Credit shall immediately terminate and the Loans made to the Borrower hereunder
(with accrued interest thereon) and all other Obligations shall immediately
become due and payable and, to the extent any Letters of Credit are then
outstanding, the Borrower shall make a Cash Collateral Deposit, to be held by
the Agent as collateral under the Security Agreement, in the amount equal to the
aggregate Letter of Credit Amount of such Letters of Credit and (B) if such
event is any other Event of Default, with the consent of the Majority Lenders
the Agent may, or upon the request of the Majority Lenders the Agent shall, take
any or all of the following actions: (i) by written notice to the Borrower
declare the Revolving Loan Commitments and the commitment to issue Letters of
Credit to be terminated forthwith, whereupon the Revolving Loan Commitments and
the commitment to issue Letters of Credit shall immediately terminate; and (ii)
by written notice to the Borrower, declare the Loans (with accrued interest
thereon) and all other Obligations under this Agreement and the Notes to be due
and payable forthwith, whereupon (x) the same shall immediately become due and
payable and (y) to the extent any Letters of Credit are then outstanding, the
Borrower shall make a Cash Collateral Deposit, to be held by the Agent as
collateral under the Security Agreement, in an amount equal to the aggregate
Letter of Credit Amount of the Letters of Credit outstanding. In all cases, with
the consent of the Majority Lenders, the Agent may enforce any or all of the
Liens and other rights and remedies created pursuant to any Loan Document or
available at law or in equity. Except as expressly provided above in this
Section, presentment, demand, protest and all other notices of any kind are
hereby expressly waived by the Borrower.
SECTION 8. THE AGENT
8.1 Appointment. Each Lender hereby irrevocably designates and appoints
Union Bank of California, N.A., as Agent of such Lender under this Agreement and
the other Loan Documents, and each such Lender irrevocably authorizes Union Bank
of California, N.A., as the Agent, for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Agent, by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, the Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or 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 the Agent in
such capacity. The Borrower shall be entitled to rely on any written notice from
the Agent stating that an amendment, modification or waiver hereunder has been
approved under this Agreement, as having been approved by the requisite number
of Lenders under Section 9.1.
8.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
8.3 Exculpatory Provisions. Neither the Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates
shall be (i) liable for any action lawfully taken or omitted to be taken by it
or such Person under or in connection with this
54
Agreement or any other Loan Document (except for its or such Person's own gross
negligence or willful misconduct) or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or warranties made by
the Borrower, any other Loan Party, or any officer thereof, contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Agent under or
in connection with, this Agreement or any other Loan Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the Notes or any other Loan Document or for any failure of the
Borrower, or any other Loan Party to perform its obligations hereunder or
thereunder. The Agent shall not 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 properties, books or records of the Borrower or any
other Loan Party.
8.4 Reliance by Agent. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), the Accountants and
independent accountants and other experts selected by the Agent. The Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement or any other Loan Document
unless it shall first receive such advice or concurrence of the Majority Lenders
or all Lenders, as it deems appropriate, or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense (except
those incurred solely as a result of the Agent's gross negligence or willful
misconduct) which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement and the Notes and the other
Loan Documents in accordance with a request of the Majority Lenders or all
Lenders, as may be required, and such request and any action taken or failure to
act pursuant thereto shall be binding upon all the Lenders and all future
holders of the Notes.
8.5 Notice of Default. Neither the Agent nor any Lender shall be deemed to
have knowledge or notice of the occurrence of any Default hereunder unless such
Person has received notice from the Agent, a Lender or the Borrower referring to
this Agreement, describing such Default and stating that such notice is a
"notice of default". In the event that the Agent or any Lender receives such a
notice, the Agent or such Lender, as the case may be, shall give notice thereof
to the Agent and the Lenders. The Agent shall take such action with respect to
such Default as shall be reasonably directed by the Majority Lenders or all
Lenders as appropriate; provided that unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default as
it shall deem advisable in the best interests of the Lenders or as the Agent
shall believe necessary to protect the Agent and the Lenders' interests in the
Collateral or the Guarantor Collateral.
55
8.6 Non-Reliance on Agent and Other Lenders. Each Lender expressly
acknowledges that none of the Agent or any of its respective officers,
directors, employees, agents, attorneys-in-fact, Subsidiaries or Affiliates has
made any representations or warranties to it and that no act by the Agent
hereafter taken, including any review of the affairs of the Borrower or any
other Loan Party, shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the
Guarantors and made its own decision to make its Loans and participate in
Letters of Credit hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrower and the other Loan Parties. The Agent
agrees to promptly furnish to each Lender a copy of all notices, reports and
other documents received by it from the Borrower; provided that the Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Borrower or any
other Loan Party which may otherwise come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates except such as may come into the possession of the
employees of Agent then having the responsibility for the administration of this
Agreement.
8.7 Indemnification. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to the
respective amounts of their Aggregate Total Commitment Percentages, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs (including, without limitation, the allocated
cost of internal counsel), expenses or disbursements of any kind whatsoever
which may at any time (including, without limitation, at any time following the
payment of the Notes) be imposed on, incurred by or asserted against the Agent,
in its capacity as such, but not as a Lender hereunder, in any way relating to
or arising out of this Agreement, any of the other Loan Documents or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Agent's gross negligence or willful misconduct.
The agreements in this Section shall survive the termination of this Agreement,
the expiration of the Letters of Credit and the payment of the Notes and all
other amounts payable hereunder.
8.8 Agent in Its Individual Capacity. The Agent and its Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower and the other Loan Parties as though the Agent were not the Agent
hereunder and under the other Loan Documents. With respect to the Agent, the
Loans made by the Agent, the Letters of Credit participated in by the Agent and
the Notes issued to the Agent shall have the same rights and
56
powers under this Agreement and the other Loan Documents as any Lender and the
Agent may exercise the same as though it were not the Agent and the terms
"Lender" and "Lenders" shall include the Agent in its individual capacity.
8.9 Successor Agent. The Agent may resign as Agent upon 10 days' notice to
the Lenders and the Borrower. If the Agent shall resign as Agent under this
Agreement and the other Loan Documents, then the Majority Lenders shall appoint
from among the Lenders a successor agent for the Lenders, whereupon such
successor agent shall succeed to the rights, powers and duties of the Agent and
the term "Agent" shall mean such successor agent, effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Notes.
Notice of such appointment shall be given by such successor agent to the
Borrower and each Lender. After any retiring Agent's resignation as Agent, the
provisions of this Section shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent, under this Agreement and the other
Loan Documents. In addition, after the replacement of the Agent hereunder, the
retiring Agent shall remain a party hereto and shall continue to have all the
rights and obligations of an Agent under this Agreement with respect to Letters
of Credit issued by it prior to such replacement, but shall not be required to
issue additional Letters of Credit.
8.10 Duties of Arranger. The Sole Lead Arranger, as such, shall have no
duties or responsibilities to the Loan Parties, the Lenders or the Agent under
this Agreement or any of the other Loan Documents.
SECTION 9. MISCELLANEOUS
9.1 Amendments and Waivers. Neither this Agreement, any Note, any other
Loan Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section. With the
prior written consent of the Majority Lenders and the Borrower (and, in the case
of any Loan Document other than this Agreement, the relevant Loan Party), the
Borrower may (or such Loan Party, as the case may be), from time to time, enter
into written amendments, supplements or modifications hereto and to the other
Loan Documents for the purposes of adding any provisions to this Agreement or
the other Loan Documents or changing in any manner the rights of the Lenders,
the Borrower or any other Loan Party hereunder or thereunder or waiving, on such
terms and conditions as may be specified in such instrument, any of the
requirements of this Agreement or the Notes or the other Loan Documents or any
Default and its consequences; provided, however, that no such waiver and no such
amendment, supplement or modification shall: (a) reduce the amount or extend the
maturity of any Note or any installment due thereon, or reduce the rate or
extend the time of payment of interest thereon, or reduce the amount or extend
the time of payment of any fee, indemnity or reimbursement payable to any Lender
hereunder, or amend, modify or waive any provision of Section 2.5, in each case
without the written consent of the Lender affected thereby; or (b) (i) amend,
modify or waive any provision of this Section 9.1 or reduce the percentage
specified in or otherwise modify the definition of Majority Lenders, or consent
to the assignment or transfer by any Loan Party of any of its rights and
obligations under this Agreement and the other Loan Documents; or (ii) release
any Loan Party from any liability under its respective Loan Documents; or (iii)
release any material portion of the Collateral or any material portion of the
57
Guarantor Collateral, except in connection with any Asset Disposition permitted
by this Agreement or any other Loan Document; or (iv) amend, modify or waive,
directly or indirectly, any of the provisions of Section 2.1(e), 2.2(f) or 2.11;
or (v) amend, modify or waive any provision of this Agreement requiring the
consent or approval of all Lenders, in each case without the written consent of
all the Lenders; or (c) amend, modify or waive any provision of Section 8
without the written consent of the then Agent, or any provision affecting the
rights and duties of the Agent as the issuer of Letters of Credit without the
written consent of the then Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Borrower, the other Loan Parties, the Lenders, the Agent,
and all future holders of the Notes. In the case of any waiver, the Borrower,
the other Loan Parties, the Lenders and the Agent, shall be restored to their
former position and rights hereunder and under the outstanding Notes and any
other Loan Documents, and any Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default,
or impair any right consequent thereon.
9.2 Notices. All notices, requests and demands or other communications to
or upon the respective parties hereto to be effective shall be in writing
(including by telecopy), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered by hand, or 3 days
after being deposited in the United States mail, certified and postage prepaid
and return receipt requested, or, in the case of telecopy notice, when received,
in each case addressed to the parties at their addresses as set forth on the
signature pages hereof, or in the Assignment and Acceptance pursuant to which a
Person becomes a party hereto, or to such other address as may be hereafter
notified by the respective parties hereto; provided that any notice, request or
demand to or upon the Agent or the Lenders pursuant to Section 2.1, 2.2, 2.3,
2.4, 2.5 or 2.6 shall not be effective until received.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay in
exercising, on the part of the Agent or any Lender, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
9.4 Survival of Representations and Warranties. All representations and
warranties made hereunder and in any document, certificate or statement
delivered pursuant hereto or in connection herewith shall survive the execution
and delivery of this Agreement.
9.5 Payment of Expenses and Taxes. The Borrower agrees, whether or not the
transactions contemplated hereby are consummated, (a) to pay or reimburse the
Agent for all its reasonable costs and out-of-pocket expenses incurred in
connection with the preparation and execution of, and any amendment, supplement
or modification to, this Agreement and the Notes and the other Loan Documents
and any other documents prepared in connection herewith or therewith, and the
consummation and administration of the transactions contemplated hereby and
thereby (including the transactions to occur on the Closing Date), including,
without limitation, the reasonable fees and disbursements of outside counsel to
the Agent (including local counsel to the Agent) and as to any amendment,
supplement or modification to this Agreement or any other
58
Loan Document and the administration of the transactions contemplated thereby,
and with respect to the foregoing, the allocated reasonable costs of internal
counsel to the Agent, (b) after the occurrence and during the continuance of a
Default, to pay or reimburse the Agent and each Lender, for all its reasonable
costs and out-of-pocket expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents or in connection with any refinancing or restructuring
of the credit arrangements provided under this Agreement in the nature of a
"work-out" or of any insolvency or bankruptcy proceeding, including, without
limitation, reasonable legal fees and disbursements of outside counsel to the
Agent and each Lender and the allocated reasonable cost of internal counsel to
the Agent and each Lender, (c) to pay, and indemnify and hold harmless each
Lender and the Agent from, any and all recording and filing fees and any and all
liabilities with respect to, or resulting from any delay in paying, stamp,
excise and other taxes (but not including Excluded Taxes), if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the Notes, the other Loan
Documents and any such other documents and (d) to pay, and indemnify and hold
harmless each Lender and the Agent from and against, any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs (including, without limitation, the allocated reasonable cost of internal
counsel and the reasonable legal fees and disbursements of outside counsel to
the Lenders and the Agent), expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery and enforcement of this
Agreement, the Notes, the other Loan Documents or the use of the Letters of
Credit or the proceeds of the Loans and any such other documents (all the
foregoing, collectively, the "indemnified liabilities"), provided, that the
Borrower shall have no obligation hereunder to the Agent or any Lender with
respect to indemnified liabilities arising from the gross negligence or willful
misconduct of the Agent or such Lender or their agents or attorneys-in-fact. The
agreements in this Section shall survive the termination of this Agreement, the
expiration of the Letters of Credit and the payment of the Notes and all other
amounts payable hereunder.
9.6 Successors and Assigns; Participation; Purchasing Lenders.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign,
transfer or delegate any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may at any time sell to one or more banks or other entities
("Participants") participating interests in the rights of such Lender hereunder
and under the other Loan Documents; provided any such sale must result in the
Participant acquiring at least a $5,000,000 risk participation interest in the
aggregate amount of obligations under this Agreement and the other Loan
Documents. A Participant shall have the right only to vote on the extension of
regularly scheduled maturity of principal or interest under a Note, extension of
the expiration of a Letter of Credit, reduction of the principal amount or rate
of interest of a Note, reduction of the amount to be reimbursed under any Letter
of Credit, or the release of any material portion of the Collateral or the
Guarantor Collateral. In the event of any such sale by a Lender of participating
interests to a Participant, such Lender's obligations under this Agreement
59
to the other parties to this Agreement shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of its Note and the participant in such Letters of Credit for all
purposes under this Agreement and the other Loan Documents, and the Borrower and
the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement and
the other Loan Documents.
(c) Any Lender may at any time sell to any of its Affiliates or to any
Lender, any Affiliate thereof or to one or more additional lenders that are
approved by the Borrower, such approval not to be unreasonably withheld or
delayed ("Purchasing Lenders") and not to be required if an Event of Default has
occurred and is continuing, and the Agent, all or any part of its rights and
obligations under this Agreement, the Notes and the other Loan Documents
pursuant to an Assignment and Acceptance executed by such Purchasing Lender and
such transferor Lender, and delivered to the Agent for its acceptance and
recording in the Register (as defined below), accompanied by a $3,500 processing
fee; provided, however, that any such sale must result in the Purchasing Lender
having an interest in at least $5,000,000 in aggregate amount of obligations
under this Agreement and the other Loan Documents. Upon such execution and
delivery from and after the transfer effective date determined pursuant to such
assignment document, (x) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in the Assignment and Acceptance, have the
rights and obligations of a Lender hereunder with a Revolving Loan Commitment
and Term Loan Commitment as set forth therein, and (y) the transferor Lender
thereunder shall, to the extent of such assigned portion and as provided in the
Assignment and Acceptance, be released from its obligations under this Agreement
and the other Loan Documents (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of a transferor Lender's rights and
obligations under this Agreement, such transferor Lender shall cease to be a
party hereto). Any such Assignment and Acceptance shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Lender and the resulting adjustment of Revolving
Loan Commitment Percentages and/or Term Loan Commitment Percentage arising from
the purchase by such Purchasing Lender of all or a portion of the rights and
obligations of such transferor Lender under this Agreement and the other Loan
Documents. The Borrower, at its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Note or Notes a new Note or Notes to the
order of such Purchasing Lender in an amount equal to the Revolving Loan
Commitment and/or Term Loan Commitment assumed by it, and if the transferor
Lender has retained a Revolving Loan Commitment and/or Term Loan Commitment
hereunder, a new Note to the order of the transferor Lender in an amount equal
to such Revolving Loan Commitment and/or Term Loan Commitment retained by it
hereunder. Such new Notes shall be dated the Closing Date.
(d) The Agent shall maintain at its address referred to in Section 9.2 a
copy of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amounts of the Loans owing to and, if
applicable, the Letters of Credit participated in by, each Lender from time to
time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as the owner of the Loans recorded
therein for all purposes of this Agreement. The
60
Register shall be available for inspection by the Borrower or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by a
transferor Lender and Purchasing Lender (and, in the case of a Purchasing Lender
that is not then a Lender or an Affiliate thereof, by the Borrower (if required)
and the Agent) the Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) on the effective date determined pursuant thereto record the
information contained therein in the Register.
(f) The Borrower authorizes each Lender to disclose to any Participant or
Purchasing Lender (each, a "Transferee") and any prospective Transferee any and
all financial information in such Lender's possession concerning the Borrower,
the other Loan Parties and the Affiliates thereof which has been delivered to
such Lender by or on behalf of the Borrower pursuant to this Agreement or any
other Loan Document or which has been delivered to such Lender by or on behalf
of the Borrower in connection with such Lender's credit evaluation of the
Borrower and the other Loan Parties; provided that such Transferee or
prospective Transferee agrees in writing to maintain the confidentiality of such
information in accordance with the provisions of Section 9.15.
(g) Nothing herein shall prohibit any Lender from pledging or assigning any
of its interest and rights under this Agreement and its Notes to any Federal
Reserve Bank in accordance with applicable law.
(h) Each Lender (and each Person becoming a Lender pursuant to Section
9.6(c)) represents, warrants and agrees with the Agent as follows:
(i) Such Lender is entitled to receive any payments hereunder without
the withholding of any tax and will furnish to Agent such forms, certifications,
statements and other documents as Agent may request from time to time to
evidence such Lender's exemption from withholding of any tax imposed by any
jurisdiction or to enable Agent to comply with any applicable laws or
regulations relating thereto;
(ii) Without limiting the effect of the foregoing, if such Lender is
not created or organized under the laws of the United States or any state
thereof, such Lender is lawfully engaged in the conduct of a business within the
United States and payments made hereunder are or are reasonably expected to be
effectively connected with the conduct of that trade or business and are or will
be includible in its gross income or, if such Lender is not engaged in a United
States trade or business with which such payments are effectively connected,
such Lender is entitled to the benefits of a tax convention which exempts the
income from United States withholding tax and that it has satisfied all
requirements to qualify for the exemption from tax.
(iii) Such Lender agrees that it will, immediately upon the request of
the Agent, furnish to the Agent with a copy to the Borrower Form X-0, X-0XXX xx
X-0XXX (as applicable to it) of the Internal Revenue Service, or such other
forms, certifications, statements or documents, duly executed and completed by
such Lender as evidence of such Lender's exemption from the withholding of
United States tax with respect thereto. If such Lender determines that, as a
result of any change in any Requirement of Law or in any official
61
application or interpretation thereof, it ceases to qualify for exemption from
any tax imposed by any jurisdiction with respect to payments made hereunder,
such Lender shall promptly notify the Agent of such fact and the Agent may, but
shall not be required to withhold the amount of any such applicable tax from
amounts paid to such Lender hereunder. The Agent shall not be obligated to make
any payments hereunder to such Lender in respect to the Obligations owing to
such Lender hereunder until such Lender shall have furnished to the Agent the
requested form, certification, statement or document, and may withhold the
amount of such applicable tax from amounts paid to such Lender hereunder.
(iv) Each Lender shall reimburse, indemnify and hold the Agent
harmless from any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed upon, incurred by or asserted against the
Agent due to its reliance upon the representation hereby made that such Lender
is exempt from withholding of tax. Unless the Agent receives written notice to
the contrary, such Lender shall be deemed to have made the representations
contained in this Section 9.6(h) for the current and each subsequent tax year of
such Lender.
9.7 Adjustments; Set-Off.
(a) If any Lender (a "benefitted Lender") shall at any time receive any
payment of all or part of its Loans or its participations in Letters of Credit,
or interest thereon, or fees, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off, pursuant to events or
proceedings of the nature referred to in Section 7(g) or 8.8, or otherwise), in
a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Loans, its participation
in Letters of Credit, or interest thereon, or fees, such benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Loans, participations in Letters of Credit, or fees, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest. The Borrower agrees that each
Lender so purchasing a portion of another Lender's Loans or its participations
in Letters of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
(b) Subject to Section 9.7(a), in addition to any rights and remedies of
the Lenders provided by law, with the prior consent of the Agent, each Lender
shall have the right, exercisable upon the occurrence and during the continuance
of an Event of Default and acceleration of the Obligations pursuant to Section
7, without prior notice to the Borrower, any such notice being expressly waived
by the Borrower to the extent permitted by applicable law, to set-off and
appropriate and apply against any such Obligations any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof or bank controlling
such Lender to or for the credit or the account of the
62
Borrower. Each Lender agrees promptly to notify the Borrower after any such set-
off and application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
9.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
9.9 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.10 Integration. This Agreement, together with the other Loan Documents,
represents the entire agreement of the Borrower, the Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Agent or any Lender relative to the subject
matter hereof not expressly set forth or referred to herein or in the other Loan
Documents.
9.11 GOVERNING LAW. THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA (WITHOUT REFERENCE TO ITS CHOICE OF LAW RULES).
9.12 Alternative Dispute Resolution.
(a) Claims Subject to Judicial Reference; Selection of Referee. All Claims,
including any and all questions of law or fact relating thereto, shall, at the
written request of any Party, be determined by Reference. The Parties shall
select a single neutral referee, who shall be a retired state or federal judge
with at least five years of judicial experience in civil matters. In the event
that the Parties cannot agree upon a referee, the referee shall be appointed by
the court. The Parties shall equally bear the fees and expenses of the referee
unless the referee otherwise provides in the statement of decision.
(b) WAIVER OF JURY TRIAL. IN CONNECTION WITH A REFERENCE OR ANY OTHER
ACTION OR PROCEEDING, WHETHER BROUGHT IN STATE OR FEDERAL COURT, THE PARTIES
HEREBY EXPRESSLY, INTENTIONALLY AND DELIBERATELY WAIVE ANY RIGHT THEY MAY
OTHERWISE HAVE TO TRIAL BY JURY OF ANY CLAIM.
(c) Conduct of Reference. Except as provided in this Section 9.12, the
Reference shall be conducted pursuant to Applicable State Law. The referee shall
determine all issues relating to the applicability, interpretation, legality and
enforceability of this Section 9.12.
(d) Provisional Remedies, Self-Help and Foreclosure. No provision of this
Section 9.12 shall limit the right of any party to (i) exercise self-help
remedies including setoff, (ii) foreclose against or sell any Collateral or
Guarantor Collateral, by power of sale or otherwise
63
or (iii) obtain or oppose provisional or ancillary remedies from a court of
competent jurisdiction before, after or during the pendency of the Reference.
The exercise of, or opposition to, any such remedy does not waive the right of
any Party to Reference pursuant to this Section 9.12.
(e) Limitation on Damages. In the event that punitive damages are permitted
under Applicable State Law, the amount thereof shall not exceed a sum equal to
three times the amount of actual damages as determined by the referee.
(f) Severability. In the event that any provision of this Section 9.12 is
found to be illegal or unenforceable, the remainder of this Section 9.12 shall
remain in full force and effect.
(g) Miscellaneous. In the event that multiple Claims are asserted, some of
which are found not subject to this Section 9.12, the Parties agree to stay the
proceedings of the Claims not subject to this Section 9.12 until all other
Claims are resolved in accordance with this Section. In the event that Claims
are asserted against multiple parties, some of whom are not subject to this
Section, the Parties agree to sever the Claims subject to this Section 9.12 and
resolve them in accordance with this Section 9.12. In the event of any challenge
to the legality or enforceability of this Section 9.12, the prevailing Party
shall be entitled to recover the costs and expenses, including reasonable
attorneys' fees, incurred by it in connection therewith. Applicable State Law
shall govern the interpretation of this Section 9.12.
(h) Defined Terms. As used in this Section 9.12, the following terms shall
have the respective meanings set forth below:
"Applicable State Law": the law of the State of California; provided,
however, that if any Party seeks to (i) exercise self-help remedies, including
setoff, (ii) foreclose against or sell any Collateral or Guarantor Collateral,
by power of sale or otherwise or (iii) obtain or oppose provisional or ancillary
remedies from a court of competent jurisdiction before, after or during the
pendency of the Reference, the law of the state where such Collateral or
Guarantor Collateral, as the case may be, is located shall govern the exercise
of or opposition to such rights and remedies.
"Claim": any claim, cause of action, action, dispute or controversy
between or among the Parties, whether sounding in contract, tort or otherwise,
which arises out of or relates to: (i) any of the Loan Documents; (ii) any
negotiations or communications relating to any of the Loan Documents, whether or
not incorporated into the Loan Documents or any indebtedness evidenced thereby;
or (iii) any alleged agreements, promises, representations or transactions in
connection therewith.
"Party": any Loan Party, any Lender or the Agent.
"Reference": a judicial reference conducted pursuant to this Section 9.12
in accordance with Applicable State Law, as in effect at the time the referee is
selected pursuant to Section 9.12(a).
9.13 Acknowledgements. The Borrower hereby acknowledges that:
64
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
(b) neither the Agent nor any Lender has any fiduciary relationship to the
Borrower solely by virtue of any of the Loan Documents, and the relationship
pursuant to the Loan Documents between the Agent and the Lenders, on one hand,
and the Borrower on the other hand, is solely that of creditor and debtor; and
(c) no joint venture exists among the Lenders or among the Borrower and
the Lenders.
9.14 Headings. Section headings herein are included for convenience of
reference only and shall not constitute a part of this Agreement for any other
purpose.
9.15 Confidentiality. The Lenders shall take normal and reasonable
precautions to maintain the confidentiality of all non-public information
obtained pursuant to the requirements of this Agreement which has been
identified as such by any Loan Party but may, in any event, make disclosures (a)
reasonably required by any bona fide transferee, assignee or participant in
connection with the contemplated transfer or assignment of any of the Loans, any
participation in Letters of Credit or participation in any of the foregoing or
(b) as required or requested by any governmental agency or representative
thereof or as required pursuant to legal process or (c) to its attorneys and
accountants or (d) as required by law or (e) in connection with litigation
involving any Lender; provided that (i) such transferee, assignee or participant
agrees in writing to comply with the provisions of this Section 9.15 unless
specifically prohibited by applicable law or court order and (ii) in no event
shall any Lender be obligated or required to return any materials furnished by
the Borrower and its Subsidiaries.
9.16 Copies of Certificates, Etc. Whenever the Borrower is required to
deliver notices, certificates, opinions, statements or other information
hereunder to the Agent for delivery to any Lender (including under Article 4),
it shall do so in such number of copies as the Agent shall specify.
65
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in Los Angeles, California by their proper and duly
authorized officers as of the day and year first above written.
ALPHA TECHNOLOGIES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxx X. Xxxxxxxxx
--------------------------
Title: Chief Financial Officer
--------------------------
Address for Notices:
00000 Xxx Xxxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX
Attention: Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxx Xxxxxx & Xxxxx LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00
XXXXX XXXX XX XXXXXXXXXX, N.A., as Agent and as a
Lender
By: /s/ Xxxx X. Xxxx
------------------------
Name: Xxxx X. Xxxx
Title: Vice President
Revolving Loan Commitment: $4,500,000
Term Loan Commitment: $10,500,000
Address for Notices:
Union Bank of California, N.A.
000 Xx. Xxxxxxxx Xx., 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for
Base Rate Loans:
000 Xx. Xxxxxxxx Xx.
Xxx Xxxxxxx, XX 00000
Applicable Lending Office for
LIBOR Loans:
000 Xx. Xxxxxxxx Xx.
Xxx Xxxxxxx, XX 00000
Applicable Lending Office for
participations in Letters of Credit:
000 Xx. Xxxxxxxx Xx.
Xxx Xxxxxxx, XX 00000
67
CALIFORNIA BANK & TRUST, as a Lender
By: /s/ Xxxxxx X. Xxxx
------------------------
Name: Xxxxxx X. Xxxx
--------------------
Title: Vice President
--------------------
Revolving Loan Commitment: $2,850,000
Term Loan Commitment: $6,650,000
Address for Notices:
California Bank & Trust
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for
Base Rate Loans:
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Applicable Lending Office for
LIBOR Loans:
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
Applicable Lending Office for
participations in Letters of Credit:
000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
68
IBM CREDIT CORPORATION, as a Lender
By: /s/ Xxxxx Xxxxxxx
-----------------------
Name: Xxxxx Xxxxxxx
--------------------
Title: Manager of Credit
--------------------
Revolving Loan Commitment: $2,625,000
Term Loan Commitment: $6,125,000
Address for Notices:
IBM Credit Corporation
Xxxxx Xxxxxx Xxxxx
XX000
Xxxxxx XX 00000
Attention: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for
Base Rate Loans:
Xxxxx Xxxxxx Xxxxx
XX000
Xxxxxx XX 00000
Applicable Lending Office for
LIBOR Loans:
Xxxxx Xxxxxx Xxxxx
XX000
Xxxxxx XX 00000
Applicable Lending Office for
participations in Letters of Credit:
Xxxxx Xxxxxx Xxxxx
XX000
Xxxxxx XX 00000
69
MANUFACTURERS BANK
A California Banking Corporation, as a Lender
By: /s/ Xxxxx X. Xxx
-------------------------------
Name: Xxxxx X. Xxx
----------------------------
Title: Vice President & Team Member
----------------------------
Revolving Loan Commitment: $2,400,000
Term Loan Commitment: $5,600,000
Address for Notices:
Manufacturers Bank
A California Banking Corporation
000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for
Base Rate Loans:
000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, XX 00000
Applicable Lending Office for
LIBOR Loans:
000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, XX 00000
Applicable Lending Office for
participations in Letters of Credit:
000 Xxxx 0xx Xxxxxx
Xxx Xxxxxxx, XX 00000
70
U.S. BANK NATIONAL ASSOCIATION, as a Lender
By: /s/ Xxxxxxx Xxxxxxx
----------------------
Name: Xxxxxxx Xxxxxxx
--------------------
Title: Vice President
--------------------
Revolving Loan Commitment: $2,625,000
Term Loan Commitment: $6,125,000
Address for Notices:
U.S. Bank National Association
0000 Xxxxxxxx Xxxx.
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Applicable Lending Office for
Base Rate Loans:
0000 Xxxxxxxx Xxxx.
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
Applicable Lending Office for
LIBOR Loans:
0000 Xxxxxxxx Xxxx.
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
Applicable Lending Office for
participations in Letters of Credit:
0000 Xxxxxxxx Xxxx.
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, XX 00000
71
