AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED FINANCING AND SECURITY AGREEMENT (this
"Agreement") is made this 29th day of August, 1997, by and among XXXXX
PLASTICS CORPORATION, a corporation organized under the laws of the State
of Delaware (the "Borrower"); NATIONSBANK, N.A., a national banking
association ("NationsBank"), FLEET CAPITAL CORPORATION, a corporation
organized and existing under the laws of the State of Rhode Island
("Fleet"), GENERAL ELECTRIC CAPITAL CORPORATION, a corporation organized
and existing under the laws of the State of New York ("GE Capital"), and
each other financial institution which is a party to this Agreement,
whether by execution and delivery of this Agreement or otherwise pursuant
to Section 9.5 hereof (collectively the "Lenders" and individually, a
"Lender"); and NATIONSBANK, N.A., a national banking association, in its
capacity as both collateral and administrative agent for the Lenders (the
"Agent").
RECITALS
A. The Borrower, the Agent and the Lenders are parties to that
certain Financing and Security Agreement dated as of January 21, 1997 by
and among the Borrower, the Agent and the Lender, as amended by (i) that
certain First Amendment to Financing and Security Agreement dated as of
Xxxxx 0, 0000, (xx) that certain Second Amendment to Financing and
Security Agreement dated as of May 13, 1997 and (iii) that certain Loan
Restructuring Amendment dated as of June 13, 1997 (as amended, restated,
supplemented or otherwise modified, the "Original Credit Agreement").
Pursuant to the provisions of the Original Credit Agreement, the Borrower
applied to the Lenders for credit facilities consisting of (i) a
revolving credit facility in the maximum principal amount of $30,000,000
(the "Total Revolving Credit Committed Amount"), (ii) a letter of credit
facility in the maximum principal amount of $5,000,000, as part of that
revolving credit facility, (iii) a term loan facility in the maximum
principal amount of $31,980,000 ("Term Loan A"), and (iv) a standby
letter of credit facility in the maximum principal amount of $12,000,000
(the "Bond Letter of Credit Committed Amount"), all to be used by the
Borrower for the Permitted Uses described in this Agreement.
B. The Borrower has advised the Agent and the Lenders that the
Borrower has formed VABC Acquisition Corp., a corporation organized and
existing under the laws of the State of Delaware ("Xxxxx Venture") and
that Xxxxx Venture is a wholly-owned subsidiary of the Borrower.
Contemporaneously with the execution and delivery of this Agreement,
Xxxxx Venture has acquired or intends to acquire all or substantially all
of the stock ("Venture Stock") issued by Venture Packaging, Inc., a
corporation organized and existing under the laws of the State of
Delaware ("Venture Holdings") in accordance with the provisions of that
certain Agreement and Plan of Reorganization dated as of August 29, 1997
(as amended, restated, supplemented or otherwise modified, the "Venture
Packaging Purchase Agreement"). Venture Packaging Southeast, Inc., a
corporation organized and existing under the laws of the State of South
Carolina ("Venture Southeast") and Venture Packaging Midwest, Inc., a
corporation organized and existing under the laws of the State of Ohio
("Venture Midwest") currently are wholly-owned subsidiaries of Venture
Holdings. The Borrower has further advised the Agent and the Lenders
that as part of the contemplated acquisition of the Venture Stock, Xxxxx
Venture shall be merged into Venture Holdings (the "Venture Merger"),
with Venture Holdings being the survivor, and that one hundred percent
(100%) of the capital stock issued by Venture Southeast and Venture
Midwest may be transferred to the Borrower. Subsequent to the closing
and consummation of the acquisition of the Venture Stock, the Venture
Merger and the possible transfer to the Borrower of the stock of Venture
Southeast and Venture Midwest, the Borrower may dissolve, liquidate or
merge Venture Holdings, all as to and to the extent permitted by the
terms of this Agreement.
C. In connection with the consummation of the acquisition of the
Venture Stock, the Borrower has requested that the Lenders agree (i) to
increase the maximum principal amount of the Total Revolving Credit
Committed Amount from $30,000,000 to $50,000,000, (ii) to amend and
restructure Term Loan A such that as of the date of this Agreement, the
maximum aggregate unpaid principal balance of Term Loan A shall be
$31,000,000, (iii) to make an additional term loan to the Borrower in the
maximum principal amount of $30,000,000 ("Term Loan B"), and (iv) to
increase the maximum principal amount of the Bond Letter of Credit
Committed Amount from $12,000,000 to $18,852,000. In addition, the
Borrower has requested that (ii) the Agent and the Lenders consent and
agree to (1) the acquisition of the Venture Stock in accordance with the
terms and conditions of the Venture Packaging Purchase Agreement, (2) the
merger of Xxxxx Venture into Venture Holdings, (3) the transfer of one
hundred percent (100%) of the capital stock of Venture Southeast and
Venture Midwest to the Borrower, and (4) the dissolution, liquidation or
merger of Xxxxx Venture in accordance with the provisions of this
Agreement.
D. Accordingly, the Borrower, the Agent and the Lenders desire to
amend and restate the Original Credit Agreement, as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 CERTAIN DEFINED TERMS. As used in this Agreement,
the terms defined in the Preamble and Recitals hereto shall have the
respective meanings specified therein, and the following terms shall have
the following meanings:
"Account" individually and "Accounts" collectively mean all
presently existing or hereafter acquired or created accounts, accounts
receivable, contract rights, notes, drafts, instruments, acceptances,
chattel paper, leases and writings evidencing a monetary obligation or a
security interest in, or a lease of, goods, all rights to receive the
payment of money or other consideration under present or future contracts
(including, without limitation, all rights to receive payments under
presently existing or hereafter acquired or created letters of credit),
or by virtue of merchandise sold or leased, services rendered, by or set
forth in or arising out of any present or future chattel paper, note,
draft, lease, acceptance, writing, bond, insurance policy, instrument,
document or general intangible, and all extensions and renewals of any
thereof, all rights under or arising out of present or future contracts,
agreements or general interest in merchandise which gave rise to any or
all of the foregoing, including all goods, all claims or causes of action
now existing or hereafter arising in connection with or under any
agreement or document or by operation of law or otherwise, all collateral
security of any kind (including, without limitation, real property
mortgages and deeds of trust) and letters of credit given by any Person
with respect to any of the foregoing, all books and records in whatever
media (paper, electronic or otherwise) recorded or stored, with respect
to any or all of the foregoing and all general intangibles necessary or
beneficial to retain, access and/or process the information contained in
those books and records, and all proceeds (cash and non-cash) of the
foregoing.
"Account Debtor" means any Person who is obligated on an
Account and "Account Debtors" mean all Persons who are obligated on the
Accounts.
"AeroCon, Inc." means AeroCon, Inc., a corporation organized
and existing under the laws of the State of Delaware, and its successors
and assigns.
"Affiliate" means, with respect to any designated Person, any
other Person, (i) directly or indirectly controlling, directly or
indirectly controlled by, or under direct or indirect common control with
the Person designated, (ii) directly or indirectly owning or holding ten
percent (10%) or more of any equity interest in such designated Person,
or (iii) ten percent (10%) or more of whose stock or other equity
interest is directly or indirectly owned or held by such designated
Person. For purposes of this definition, the term "control" (including
with correlative meanings, the terms "controlling", "controlled by" and
"under common control with") means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities or other equity interests or by contract or otherwise.
"Agency Fee" and "Agency Fees" have the meanings described in
Section 8.9.
"Agent" means the Person defined as the "Agent" in the preamble
of this Agreement and shall also include any successor Agent appointed
pursuant to Section 8.7.
"Agent's Obligations" shall mean any and all Obligations
payable solely to and for the exclusive benefit of the Agent by the
Borrower under the terms of this Agreement and/or any of the other
Financing Documents, including, without limitation, any and all Agency
Fees, Letter of Credit Fronting Fees and/or Field Examination Fees.
"Agreement" means this Financing and Security Agreement, as
amended, restated, supplemented or otherwise modified in writing in
accordance with the provisions of Section 9.2 of this Agreement.
"Alternate Base Rate" means the sum of (i) the Base Rate PLUS
(ii) the Applicable Margin.
"Amortizing Iowa Bond Letter of Credit Obligations" has the
meaning described in Section 2.5.5(b) (Payments of Bond Letters of
Credit).
"Applicable Interest Rate" means (i) the LIBOR Rate, or (ii)
the Alternate Base Rate.
"Applicable Margin" means the applicable rate per annum to be
added to the LIBOR Base Rate or the Base Rate, as set forth in Section
2.7.1.
"Asset Disposition" means the disposition of any or all of the
Assets of the Borrower or any Subsidiary of the Borrower, whether by
sale, lease, transfer or other disposition (including any such
disposition effected by way of merger or consolidation) other than
Permitted Asset Dispositions.
"Assets" means at any date all assets that, in accordance with
GAAP consistently applied, should be classified as assets on a
consolidated balance sheet of the Borrower and its Subsidiaries.
"Assignee" has the meaning set forth in Section 9.5 of this
Agreement.
"Assignment of Patents" means (i) that certain collateral
assignment of patents as security dated as of the Closing Date from the
Borrower to the Agent for the benefit of the Lenders ratably and the
Agent, (ii) that certain collateral assignment of patents as security
dated as of the Closing Date from BTP, BIC, Xxxxx Xxxxxxxx and PackerWare
to the Agent for the benefit of the Lenders ratably and the Agent, and
(iii) that certain collateral assignment of patents as security dated as
of the date of this Agreement from Venture Southeast and Venture Midwest,
as amended, restated, supplemented or otherwise modified in writing at
any time and from time to time.
"Assignment of Trademarks" means (i) that certain collateral
assignment of trademarks as security dated as of the Closing Date from
the Borrower to the Agent for the benefit of the Lenders ratably and the
Agent, (ii) that certain collateral assignment of trademarks as security
dated as of the Closing Date from PackerWare to the Agent for the benefit
of the Lenders ratably and the Agent, and (iii) that certain collateral
assignment of trademarks as security dated the date of this Agreement
from Venture Southeast and Venture Midwest to the Agent for the benefit
of the Lenders ratably and the Agent, as amended, restated, supplemented
or otherwise modified in writing at any time and from time to time.
"Base Rate" means the higher of (i) the Prime Rate, or (ii) the
sum of (x) the Federal Funds Rate, plus (y) fifty (50) basis points.
"Base Rate Loan" means any Loan for which interest is to be
computed with reference to the Alternate Base Rate.
"Xxxxx Design" means Xxxxx Plastics Design Corporation, a
corporation organized and existing under the laws of the State of
Delaware, and its successors and assigns.
"Xxxxx Xxxxxxxx" means Xxxxx Xxxxxxxx Corporation, a
corporation organized and existing under the laws of the State of
Delaware, and its successors and assigns.
"Xxxxx Venture" shall have the meaning specified in the
Recitals.
"BIC" means Xxxxx Iowa Corporation, a corporation organized and
existing under the laws of the State of Delaware,and its successors and
assigns.
"BTP" means Xxxxx Tri-Plas Corporation, a corporation organized
and existing under the laws of the State of Delaware, and its successors
and assigns.
"Bankruptcy Code" means the United States Bankruptcy Code, as
amended from time to time, and any successor Laws.
"Bond Letter of Credit Agreements" means the collective
reference to the Iowa Bond Letter of Credit Agreement, the Nevada Bond
Letter of Credit Agreement and the South Carolina Bond Letter of Credit
Agreement.
"Bond Letter of Credit Commitment" means the agreement of the
Agent relating to the issuance of the Bond Letters of Credit, the
repayment of the Bond Letter of Credit Obligations and the agreement of a
Lender to purchase a participating interest in any Bond Letter of Credit
Obligations with respect to such Bond Letters of Credit, all subject to
and in accordance with the provisions of this Agreement; and "Bond Letter
of Credit Commitments" means the collective reference to the Bond Letter
of Credit Commitment of the Agent and each of the Lenders.
"Bond Letter of Credit Committed Amount" has the meaning given
such term in Section 2.5.1.
"Bond Letter of Credit Facility" means the facility established
pursuant to Section 2.5 (Bond Letter of Credit Facility) of this
Agreement.
"Bond Letter of Credit Fee" and "Bond Letter of Credit Fees"
have the meanings described in Section 2.5.2 (Bond Letter of Credit
Fees).
"Bond Letter of Credit Fronting Fee" and "Bond Letter of Credit
Fronting Fees" have the meanings described in Section 2.5.2 (Bond Letter
of Credit Fees).
"Bond Letter of Credit Obligations" means the collective
reference to the Iowa Bond Letter of Credit Obligations, the Nevada Bond
Letter of Credit Obligations and the South Carolina Bond Letter of Credit
Obligations.
"Bond Letter of Credit Agreement Documents" means the
collective reference to the Iowa Bond Letter of Credit Agreement
Documents - Bonds, the Iowa Bond Letter of Credit Agreement Documents -
NB, the Nevada Bond Letter of Credit Agreement Documents - Bonds, the
Nevada Bond Letter of Credit Agreement Documents - NB, the South Carolina
Bond Letter of Credit Agreement Documents - Bonds, and the South Carolina
Bond Letter of Credit Agreement Documents - NB.
"Bond Letters of Credit" means the collective reference to the
Iowa Bond Letter of Credit - NB, the Nevada Bond Letter of Credit - NB
and the South Carolina Bond Letter of Credit - NB.
"Bonds" means the collective reference to the Iowa Bonds, the
Nevada Bonds and the South Carolina Bonds.
"Borrowing Base" has the meaning described in Section 2.1.3
(Borrowing Base).
"Borrowing Base Deficiency" has the meaning described in
Section 2.1.3 (Borrowing Base).
"Borrowing Base Report" has the meaning described in Section
2.1.4 (Borrowing Base Report).
"Borrowing Base Trigger Event" has the meaning described in
Section 2.1.4 (Borrowing Base Report).
"Business Day" means any day other than a Saturday, Sunday or
other day on which (i) in the case of NationsBank (as Agent and Lender),
commercial banks in the State are authorized or required to close and,
(ii) in the case of the Lenders other than NationsBank, those Lenders are
open for the transaction of business at the addresses stated after their
names on the signature pages of this Agreement.
"Capital Expenditure" means an expenditure which would be
classified as such in accordance with GAAP (whether payable in cash or
other property or accrued as a liability) for Fixed or Capital Assets,
including, without limitation, the entering into of a Capital Lease.
"Capital Lease" means with respect to any Person any lease of
real or personal property, for which the related Lease Obligations have
been or should be, in accordance with GAAP consistently applied,
reflected as a liability on the balance sheet that Person.
"Cash Equivalents" means (a) securities with maturities of one
year or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit with maturities of one (1) year or less from the
date of acquisition of, or money market accounts maintained with, the
Agent, any Affiliate of the Agent, or any other domestic commercial bank
having capital and surplus in excess of One Hundred Million Dollars
($100,000,000.00) or such other domestic financial institutions or
domestic brokerage houses to the extent disclosed to, and approved by,
the Agent and (c) commercial paper of a domestic issuer rated at least
either A-1 by Standard & Poor's Corporation (or its successor) or P-1 by
Xxxxx'x Investors Service, Inc. (or its successor) with maturities of six
(6) months or less from the date of acquisition.
"Chattel Paper" means a writing or writings which evidence both
a monetary obligation and a security interest in or lease of specific
goods; any returned, rejected or repossessed goods covered by any such
writing or writings and all proceeds (in any form including, without
limitation, accounts, contract rights, documents, chattel paper,
instruments and general intangibles) of such returned, rejected or
repossessed goods; and all proceeds (cash and non-cash) of the foregoing.
"Closing Date" means January 21, 1997.
"Collateral" means all property of the Borrower and each
Subsidiary Guarantor subject from time to time to the Liens of this
Agreement, any of the Security Documents and/or any of the other
Financing Documents, together with any and all cash and non-cash proceeds
and products thereof.
"Collateral Account" has the meaning described in Section 2.1.8
(The Collateral Account).
"Collateral Disclosure List" has the meaning described in
Section 3.3 (Collateral Disclosure List).
"Collection" means each check, draft, cash, money, instrument,
item, and other remittance in payment or on account of payment of the
Accounts or otherwise with respect to any Collateral, including, without
limitation, cash proceeds of any returned, rejected or repossessed goods,
the sale or lease of which gave rise to an Account, and other proceeds of
Collateral; and "Collections" means the collective reference to all of
the foregoing.
"Commitment" means with respect to each Lender, such Lender's
Revolving Credit Commitment, Letter of Credit Commitment, Term Loan A
Commitment, Term Loan B Commitment, or Bond Letter of Credit Commitment,
as the case may be, and "Commitments" means the collective reference to
the Revolving Credit Commitments, the Letter of Credit Commitments, the
Term Loan A Commitments, Term Loan B Commitments, and the Bond Letter of
Credit Commitments of all of the Lenders.
"Committed Amount" means with respect to each Lender, such
Lender's Revolving Credit Committed Amount, Letter of Credit Committed
Amount, Term Loan A Committed Amount, Term Loan B Committed Amount, or
the Bond Letter of Credit Committed Amount, as the case may be, and
"Committed Amounts" means collectively the Revolving Loan Committed
Amount, the Letter of Credit Committed Amount, Term Loan A Committed
Amount, Term Loan B Committed Amount, and the Bond Letter of Credit
Committed Amount of each of the Lenders.
"Compliance Certificate" means a periodic Compliance
Certificate described in Section 6.1.1(a) (Financial Statements).
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within the
meaning of Section 414(b) or (c) of the Internal Revenue Code.
"Container Purchase Agreement" means that certain asset
purchase agreement dated as of January 17, 1997 by and among the
Borrower, Container Industries, Inc. and the shareholders of Container
Industries, Inc., as amended, restated, supplemented or otherwise
modified.
"Container Purchase Agreement Transaction" means the
acquisition of all or substantially all of the assets of Container
Industries, Inc.
"Copyrights" means and includes, in each case whether now
existing or hereafter arising, all of the Borrower's rights, title and
interest in and to (a) all copyrights, rights and interests in
copyrights, works protectable by copyright, copyright registrations,
copyright applications, and all renewals of any of the foregoing, (b) all
income, royalties, damages and payments now or hereafter due and/or
payable under any of the foregoing, including, without limitation,
damages or payments for past, current or future infringements of any of
the foregoing, (c) the right to xxx for past, present and future
infringements of any of the foregoing, and (d) all rights corresponding
to any of the foregoing throughout the world.
"Credit Facility" means with respect to each Lender, such
Lender's Pro Rata Share of the Revolving Credit Facility, the Letter of
Credit Facility, the Term Loan A Facility, the Term Loan B Facility, or
the Bond Letter of Credit Facility, as the case may be, and "Credit
Facilities" means collectively the Revolving Credit Facility, the Letter
of Credit Facility, the Term Loan A Facility, the Term Loan B Facility,
and the Bond Letter of Credit Facility, and any and all other credit
facilities now or hereafter extended under or secured by this Agreement.
"Current Bond Letter of Credit Obligations" has the meaning
described in Section 2.5.5 hereof.
"Current Letter of Credit Obligations" has the meaning
described in Section 2.4.5 hereof.
"Debt Service" means for any period of determination thereof an
amount equal to the total of the aggregate amount of all payments of
principal and interest with respect to Indebtedness for Borrowed Money of
the Borrower and the Subsidiary Guarantors scheduled to be due and
payable during such period, excluding, any Term Loan B Mandatory
Prepayments with respect to Excess Cash Flow. For purposes of
calculating "Debt Service", the Agent and the Lenders agree that (i)
scheduled payments with respect to the Iowa Bond Letter of Credit
Obligations shall reflect the permitted amortization of a portion of such
Iowa Bond Letter of Credit Obligations pursuant to Section 2.5.5(b) of
this Agreement, and (ii) Iowa Bond Rollover Payments shall not be
included in the determination of Debt Service.
"Debt Service Coverage Ratio" means as to the Borrower and each
of the Subsidiary Guarantors, on a consolidated basis, for any period of
determination thereof the ratio of (a) EBITDA to (b) Debt Service.
"Deed of Trust - Xxxxxxxx" means that certain deed of trust or
mortgage dated as of the date of this Agreement from Venture Southeast to
or for the benefit of the Agent, as the same may from time to time be
amended, restated, supplemented or modified, which Deed of Trust -
Xxxxxxxx grants to the Agent for the benefit of the Lenders ratably and
for the benefit of the Agent, a first priority Lien on that certain
property located in Xxxxxxxx County, South Carolina, as further
described therein.
"Deed of Trust - Indian Trail" means that certain deed of trust
or mortgage dated as of the Closing Date from BTP to or for the benefit
of the Agent, as the same may from time to time be amended, restated,
supplemented or modified, which Deed of Trust -Indian Trail grants to the
Agent for the benefit of the Lenders ratably and for the benefit of the
Agent, a first priority Lien on that certain property known generally as
Xxxxxx Xxxxxx-Xxxxxx Xxxx, Xxxxxx Xxxxx, Xxxxx Xxxxxxxx 00000.
"Deed of Trust - Evansville" means that certain deed of trust
or mortgage dated as of the Closing Date from the Borrower to or for the
benefit of the Agent, as the same may from time to time be amended,
restated, supplemented or modified, which Deed of Trust - Evansville
grants to the Agent for the benefit of the Lenders ratably and for the
benefit of the Agent, a first priority Lien on that certain property
known generally as 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000.
"Deed of Trust - Henderson" means that certain deed of trust or
mortgage dated as of the Closing Date from the Borrower to or for the
benefit of the Agent, as the same may from time to time be amended,
restated, supplemented or modified, which Deed of Trust - Henderson
grants to the Agent for the benefit of the Lenders ratably and for the
benefit of the Agent, a second priority Lien on that certain property
known generally as 000 Xxxx Xxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxx 00000.
"Deed of Trust - Iowa Falls" means that certain deed of trust
or mortgage dated as of the Closing Date from BIC to or for the benefit
of the Agent, as the same may from time to time be amended, restated,
supplemented or modified, which Deed of Trust -Iowa Falls grants to the
Agent for the benefit of the Lenders ratably and for the benefit of the
Agent, a first priority Lien on that certain property known generally as
0000 Xxxxxxxxxx Xxxx Xxxx, Xxxx Xxxxx, Xxxx 00000.
"Deed of Trust - Xxxxxxxx" means that certain deed of trust or
mortgage dated as of the Closing Date from PackerWare to or for the
benefit of the Agent, as the same may from time to time be amended,
restated, supplemented or modified, which Deed of Trust - Xxxxxxxx grants
to the Agent for the benefit of the Lenders ratably and for the benefit
of the Agent, a first priority Lien on that certain property known
generally as 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxx 00000.
"Deed of Trust - Monroeville" means that certain deed of trust
or mortgage dated as of the date of this Agreement from Venture Midwest
to or for the benefit of the Agent, as the same may from time to time be
amended, restated, supplemented or modified, which Deed of Trust -
Xxxxxxxx grants to the Agent for the benefit of the Lenders ratably and
for the benefit of the Agent, a first priority Lien on that certain
property located in Huron County, Ohio, as further described therein.
"Deed of Trust - Suffolk" means that certain credit line deed
of trust, assignment and security agreement dated May 13, 1997 from Xxxxx
Design to or for the benefit of the Agent, as the same may from time to
time be amended, restated, supplemented or modified, which Deed of Trust
- Suffolk grants to the Agent for the benefit of the Lenders ratably and
for the benefit of the Agent, a first priority Lien on that certain
property known generally as 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx.
"Deed of Trust - Winchester" means that certain deed of trust
or mortgage dated as of the Closing Date from Xxxxx Xxxxxxxx to or for
the benefit of the Agent, as the same may from time to time be amended,
restated, supplemented or modified, which Deed of Trust - Xxxxxxxx grants
to the Agent for the benefit of the Lenders ratably and for the benefit
of the Agent, a first priority Lien on that certain property known
generally as 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx. The Agent
understands that Xxxxx Xxxxxxxx intends to close and consummate a sale of
the property encumbered by the Deed of Trust - Winchester as soon as
commercially practicable and that, accordingly, the Agent agrees that it
shall not record or cause to be recorded the Deed of Trust - Winchester
among any public land records office at any time prior to the date which
is ninety (90) days after the Closing Date; unless on or before such date
there exists a Default or an Event of Default.
"Deeds of Trust" means the collective reference to the Deed of
Trust - Xxxxxxxx, the Deed of Trust - Indian Trail, the Deed of Trust -
Evansville, the Deed of Trust - Henderson, the Deed of Trust - Iowa
Falls, the Deed of Trust - Xxxxxxxx, the Deed of Trust - Monroeville, the
Deed of Trust - Suffolk, and the Deed of Trust - Winchester.
"Default" means an event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default under the
provisions of this Agreement.
"Distribution" means (i) the payment of any dividends or other
distributions on capital stock of the Borrower (except distributions in
any class of capital stock) and (ii) the redemption or acquisition of
capital stock or Subordinated Indebtedness of the Borrower unless made
contemporaneously from the Net Proceeds of the sale of capital stock or
the issuance of Subordinated Indebtedness to the extent permitted by the
provisions of this Agreement or otherwise consented to by the Agent.
"Documents" means all documents of title, whether now existing
or hereafter acquired or created, and all proceeds (cash and non-cash) of
the foregoing.
"Draw" has the meaning described in Section 2.5.5(b) (Payment
of Bond Letters of Credit).
"Early Termination Fee" has the meaning described in Section
2.1.11 (Early Termination Fee).
"EBITDA" means as to the Borrower and the Subsidiary
Guarantors, on a consolidated basis, as of any date or for any period of
determination, the sum of (a) the net profit (or loss) determined in
accordance with GAAP consistently applied, PLUS (b) interest expense and
income Taxes or alternative minimum Taxes for such period to the extent
deducted in the calculation of net income (or loss), PLUS (c)
depreciation and amortization of Assets for such period, PLUS (d) unusual
expenses associated with the write-off of the capitalized portion of
financing costs, MINUS (e) non-cash gains from Asset sales other than
sales of Inventory in the ordinary course of business, PLUS (f) non-cash
losses from Asset sales other than sales of Inventory in the ordinary
course of business, PLUS, (g) non-cash extraordinary losses, MINUS (h)
extraordinary gains, MINUS (i) interest income, MINUS (j) any gain
relating to the accumulated effect of any change in accounting method,
PLUS (k) any loss relating to the accumulated effect of any change in
accounting method, each item in clauses (a) through (k) calculated
pursuant to GAAP for such period, PLUS, (l) any non-cash compensation
expenses, MINUS, (m) any non-cash compensation gains.
"Eligible Inventory" means the collective reference to all
Inventory of the Borrower and each Subsidiary Guarantor held for sale,
valued at the lowest of (i) the cost, (ii) any ceiling prices which may
be established by any Law of any Governmental Authority or
(iii) prevailing market value, all as reduced by the aggregate amount of
all reserves, limits and deductions provided for in this definition or in
Section 2.1.3 (Borrowing Base)); EXCLUDING, however, any Inventory which
consists of:
(a) any Inventory located outside of the United States,
(b) any Inventory located outside of a state in which the
Agent has properly perfected the Liens of the Agent and the
Lenders under this Agreement, free and clear of all other Liens
(other than Permitted Liens),
(c) any Inventory not in the actual possession of the
Borrower or a Subsidiary Guarantor, except to the extent
provided in subsection (d) below,
(d) any Inventory in the possession of a bailee,
warehouseman, consignee or similar third party, except to the
extent that either (1) such bailee, warehouseman, consignee or
similar third party has entered into an agreement with the
Agent in which such bailee, warehouseman, consignee or similar
third party consents and agrees to the Lien of the Agent and
the Lenders on such Inventory and to such other terms and
conditions as may be reasonably required by the Agent, or (2)
with respect to any Inventory in the possession of a bailee or
warehouseman, the Agent has established a reserve for such
Inventory in an amount not greater than three (3) months of any
fees or other charges which would be due and payable to any
such bailee and warehouseman under its agreements with the
Borrower or Subsidiary Guarantor, as appropriate (the Agent
agrees to so establish a reserve as of the Closing Date and at
such times thereafter as shall be appropriate unless otherwise
directed by the Borrower),
(e) any Inventory located on premises leased or rented to
the Borrower or a Subsidiary Guarantor or otherwise not owned
by the Borrower or a Subsidiary Guarantor, unless either (1)
the Agent has received a waiver and consent from the lessor,
landlord and/or owner, in form and substance reasonably
satisfactory to the Agent and from any mortgagee of such
lessor, landlord or owner to the extent reasonably required by
the Agent or (2) with respect to any such Inventory, the Agent
has established a reserve for such Inventory in an amount not
greater than three (3) months of any rents or other charges
which would be due and payable to any such lessor, landlord or
owner under its agreements with the Borrower or Subsidiary
Guarantor, as appropriate (the Agent agrees to so establish a
reserve as of the Closing Date and at such times thereafter as
shall be appropriate unless otherwise directed by the
Borrower),
(f) any Inventory the sale or other disposition of which
has given rise to an Account,
(g) any Inventory which fails to meet all standards and
requirements imposed by any Governmental Authority over such
Inventory or its production, storage, use or sale to the extent
that the failure to meet any such standards and/or requirements
imposed by any Governmental Authority would entitle a purchaser
of such Inventory to return the Inventory or otherwise cancel
or rescind its purchase or shall otherwise materially impair
the value of the Inventory or the ability of the Agent to
realize upon the value of the Inventory,
(h) work-in-process or supplies (the Agent acknowledges
that based on its field examination of Inventory conducted
prior to the Closing Date, no Inventory has been classified as
work-in-process, except for certain Inventory of PackerWare as
to which the Agent will advise the Borrower once the Agent has
completed its review of the field examination and audit of
PackerWare),
(i) any Inventory as to which the Agent determines in the
exercise of its sole and absolute discretion at any time and in
good faith (i) is not in merchantable condition or is
defective, post-seasonal, slow moving or obsolete and (ii)
which the Agent determines in the exercise of its sole and
absolute discretion is unlikely to be sold in the ordinary
course of business within a reasonable period of time and on
customary terms and conditions, without significant out of the
ordinary course discounts or other concessions,
(j) any Inventory which the Agent in the good faith
exercise of its sole and absolute discretion has deemed to be
ineligible because the Agent considers the collateral value to
the Agent and the Lenders to be impaired in any material
respect or its ability to realize such value to be insecure in
any material respect, and
(k) any Inventory of Venture Southeast or Venture Midwest
until such time as the Agent completes, reviews and approves a
satisfactory field examination and audit of the Assets and
properties of Venture Southeast and Venture Midwest, at which
time such Assets and properties shall be included in the
Borrowing Base if the results of such field examination and
audit are acceptable in all respects to the Agent in its
reasonable discretion and such Assets and properties otherwise
satisfy the eligibility criteria for inclusion in the Borrowing
Base.
In the event of any dispute under the foregoing criteria, as to
whether Inventory is, or has ceased to be, Eligible Inventory, the
decision of the Agent in the good faith exercise of its sole and absolute
discretion shall control.
"Eligible Receivable" and "Eligible Receivables" mean, at any
time of determination thereof, the unpaid portion of each Account (net of
any returns, discounts, claims asserted by Account Debtors or other
obligors with respect to such Account, credits, charges, accrued rebates
or other allowances, offsets, deductions, counterclaims, disputes or
other defenses asserted by Account Debtors or other obligors with respect
to such Account, and reduced by the aggregate amount of all reserves,
limits and deductions expressly provided for in this Agreement), which
shall be receivable in United States Dollars by the Borrower or any
Subsidiary Guarantor, provided each Account conforms and continues to
conform to the following criteria to the reasonable satisfaction of the
Agent:
(a) the Account arose in the ordinary course of business
from a bona fide outright sale of Inventory or from services
performed;
(b) the Account is a valid, legally enforceable obligation
of the Account Debtor;
(c) if the Account arises from the sale of Inventory, the
Inventory the sale of which gave rise to the account has been
shipped or delivered to the Account Debtor on an absolute sale
basis and not on a xxxx and hold sale basis, a consignment sale
basis, a guaranteed sale basis, a sale or return basis, or on
the basis of any other similar understanding;
(d) if the Account arises from the performance of
services, such services have been fully rendered;
(e) the Account is evidenced by an invoice or other
documentation in form reasonably acceptable to the Agent, dated
no later than two (2) Business Days after the date of shipment
or performance and containing only terms normally offered by
the Borrower or the Subsidiary Guarantor, as appropriate;
(f) the amount shown on the books of the Borrower or the
Subsidiary Guarantor, as appropriate, and on any invoice,
certificate, schedule or statement delivered to the Agent is
owing to the Borrower or the Subsidiary Guarantor, as
appropriate, with any partial payment reducing the amount of
the Eligible Receivable by such partial payment received;
(g) the Account is not outstanding more than one hundred
twenty (120) days from the date of the invoice therefor or past
due more than thirty (30) days after its due date, which shall
not be later than ninety (90) days after the invoice date;
(h) the Account is not owing by any Account Debtor for
which fifty percent (50%) or more of such Account Debtor's
other Accounts (or any portion thereof) due to the Borrower or
any Subsidiary Guarantor, individually, or the Borrower and
each of the Subsidiary Guarantors collectively, are non-
Eligible Receivables;
(i) the Account is not owing by an Account Debtor or a
group of affiliated Account Debtors whose then existing
Accounts owing to the Borrower or any Subsidiary Guarantor,
individually, exceed in the aggregate, fifteen percent (15%) of
the total Eligible Receivables of the Borrower or the
Subsidiary Guarantor, as appropriate, and is not owing by an
Account Debtor or a group of affiliated Account Debtors whose
then existing Accounts to the Borrower and each of the
Subsidiary Guarantors collectively exceed, in the aggregate,
fifteen percent (15%) of the total Eligible Receivables of the
Borrower and all of the Subsidiary Guarantors,
except that with respect to Accounts owing by those Account
Debtors identified on Schedule 1.1 attached hereto, as updated
with the Agent's consent at any time and from time, the Account
is not owing by any Account Debtor so named on Schedule 1.1
whose then existing Accounts to the Borrower and/or any
Subsidiary Guarantor, individually, exceed, in the aggregate,
twenty-five percent (25%) of the total Eligible Receivables of
the Borrower or any Subsidiary Guarantor, as appropriate, and
is not owing by an Account Debtor so named on Schedule 1.1
whose then existing Accounts to the Borrower and each of the
Subsidiary Guarantors, collectively, exceed, in the aggregate,
twenty-five percent (25%) of the total Eligible Receivables of
the Borrower and all of the Subsidiary Guarantors;
(j) the Account Debtor has not returned, rejected or
refused to retain, or otherwise notified the Borrower or any
Subsidiary Guarantor of any dispute concerning, or claimed
nonconformity of, any of the Inventory or services from the
sale or furnishing of which the Account arose;
(k) the Account Debtor is not a Subsidiary or Affiliate of
the Borrower or any Subsidiary Guarantor or an employee,
officer, director of shareholder of the Borrower or any
Subsidiary Guarantor or any Subsidiary or Affiliate of the
Borrower or any Subsidiary Guarantor (For purposes of
calculating Eligible Receivables, the term Affiliate shall not
include any Affiliate of any stockholder of the Parent);
(l) the Account Debtor is not incorporated or organized in
or primarily located in any jurisdiction outside of the United
States of America or Canada, unless the Account Debtor's
obligations with respect to such account are secured by a
letter of credit, guaranty or banker's acceptance having terms
and from such issuers and confirmation banks as are reasonably
acceptable to the Agent in its commercially reasonable
discretion (which letter of credit, guaranty or banker's
acceptance is subject to the perfected Lien of the Agent for
the benefit of the Lenders ratably and the Agent);
(m) the Account Debtor with respect to such account is not
insolvent or the subject of any bankruptcy or insolvency
proceedings of any kind or of any other proceeding or action;
(n) the Account Debtor is not a Governmental Authority,
unless the Borrower or Subsidiary Guarantor, as appropriate,
shall have complied to the Agent's satisfaction with the
Assignment of Claims Act of 1940, as amended;
(o) neither the Borrower nor any of the Subsidiary
Guarantors is indebted in any manner to the Account Debtor (as
creditor, lessor, supplier otherwise), with the exception of
customary credits, adjustments and/or discounts given to an
Account Debtor;
(p) the Account does not arise from services under or
related to any warranty obligation of the Borrower or any
Subsidiary Guarantor or out of service charges, finance charges
or other fees for the time value of money;
(q) the Account is not evidenced by Chattel Paper or an
Instrument of any kind and is not secured by any letter of
credit, except as permitted under subsection (l) above, unless
the original of any such Chattel Paper and/or Instrument has
been delivered to the Agent;
(r) the title of the Borrower or the Subsidiary Guarantor,
as appropriate, to the account is absolute and is not subject
to any prior assignment, claim, Lien, or security interest,
except Permitted Liens and Liens in favor of the Agent and/or
the Lenders;
(s) no bond or other undertaking by a guarantor or surety
which is not reasonably acceptable to the Agent has been or is
required to be obtained, supporting the Account and any of the
Account Debtor's obligations in respect of the Account, other
than as and to the extent permitted or required under the
provisions of subsection (l) above;
(t) the Borrower and each Subsidiary Guarantor, as
appropriate, have the full and unqualified right and power to
assign and grant a security interest in, and Lien on, the
Account to the Agent as security and collateral for the payment
of the Obligations;
(u) the Account does not arise out of a contract with, or
order from, an Account Debtor that, by its terms, forbids or
makes void or unenforceable the assignment or grant of a Lien
by the Borrower and each Subsidiary Guarantor, as appropriate,
to the Agent, for the benefit of the Lenders ratably and the
Agent, of the Account arising from such contract or order;
(v) the Account is subject to a Lien in favor of the
Agent, for the benefit of the Lenders ratably and the Agent,
which Lien constitutes a first priority perfected security
interest and Lien, subject only to Permitted Liens;
(w) the Inventory giving rise to the Account was not, at
the time of the sale thereof, subject to any Lien, except those
in favor of the Agent, for the benefit of the Lenders ratably
and the Agent and other Permitted Liens;
(x) no part of the Account represents a progress billing
or a retainage;
(y) the Agent in the good faith exercise of its
commercially reasonable discretion has not deemed the Account
ineligible because of uncertainty in any material respect as to
the creditworthiness of the Account Debtor or because the Agent
otherwise considers the collateral value of such Account to the
Agent and the Lenders to be impaired in any material respect or
its ability to realize such value to be insecure in any
material respect; and
(z) until such time as the Agent completes, reviews and
approves a satisfactory field examination and audit of the
Assets and properties of Venture Southeast and Venture Midwest,
no Account of Venture Southeast or Venture Midwest shall be
included in the Borrowing Base; upon the completion, review and
approval of a satisfactory field examination and audit of the
Assets and properties of Venture Southeast and Venture Midwest,
the Assets and properties of Venture Southeast and Venture
Midwest may be eligible for inclusion in the Borrowing Base if
the results of such field examination and audit are acceptable
in all respects to the Agent in its reasonable discretion and
such Assets and properties otherwise satisfy the eligibility
criteria for inclusion in the Borrowing Base.
In the event of any dispute, under the foregoing criteria, as to whether
an account is, or has ceased to be, an Eligible Receivable, the decision
of the Agent in the good faith exercise of its commercially reasonable
discretion shall control.
"Enforcement Costs" means all commercially reasonable expenses,
charges, costs and fees whatsoever (including, without limitation,
reasonable outside and allocated in-house counsel attorney's fees and
expenses) of any nature whatsoever reasonably paid or incurred by or on
behalf of the Agent and/or any of the Lenders in connection with (a) any
or all of the Obligations, this Agreement and/or any of the other
Financing Documents and (b) the creation, perfection, collection,
maintenance, preservation, defense, protection, realization upon,
disposition, sale or enforcement of all or any part of the Collateral,
this Agreement or any of the other Financing Documents, including,
without limitation, those costs and expenses more specifically enumerated
in Section 3.8 (Costs) and Section 9.10 (Enforcement Costs). The Lenders
agree that the Borrower shall have no obligation to reimburse any Lender,
other than the Agent, for legal fees and expenses incurred by such Lender
in connection with its review, execution and delivery of any of the
Financing Documents, to the extent such legal fees and expenses exceed
Five Thousand Dollars ($5,000).
"Equipment" means all equipment, machinery, computers,
chattels, tools, parts, machine tools, furniture, furnishings, fixtures
and supplies of every nature, presently existing or hereafter acquired or
created and wherever located, whether or not the same shall be deemed to
be affixed to real property, together with all accessions, additions,
fittings, accessories, special tools, and improvements thereto and
substitutions therefor and all parts and equipment which may be attached
to or which are necessary or beneficial for the operation, use and/or
disposition of such personal property, all licenses, warranties,
franchises and general intangibles related thereto or necessary or
beneficial for the operation, use and/or disposition of the same,
together with all Accounts, Chattel Paper, Instruments and other
consideration received by the Borrower or any Subsidiary Guarantor on
account of the sale, lease or other disposition of all or any part of the
foregoing, and together with all rights under or arising out of present
or future Documents and contracts relating to the foregoing and all
proceeds (cash and non-cash) of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.
"Eurodollar Business Day" means any Business Day on which
dealings in United States Dollar deposits are carried out on the London
interbank market and on which commercial banks are open for domestic and
international business (including dealings in Dollar deposits) in London,
England.
"Eurodollar Lending Office" means with respect to the Agent
such branch or office of the Agent as designated by the Agent, as
applicable, from time to time as the branch or office at which the LIBOR
Loans are to be made or maintained.
"Event of Default" has the meaning described in Article 7.
"Excess Cash Flow" means for any annual period of determination
thereof, an amount equal to fifty percent (50%) of the sum of (i) EBITDA,
less (ii) non-financed Capital Expenditures permitted by Section 6.2.6,
less (iii) cash income Taxes and alternative minimum Taxes, less (iv)
increases in working capital, plus (v) decreases in working capital, less
(vi) Debt Service, as shown on the annual financial statements for such
annual period, furnished to the Agent in accordance with Section 6.1.1;
or in the event that the Borrower fails to deliver such financial
statements to the Agent as and when required, the Agent shall estimate,
in its sole, but commercially reasonable discretion, the amount of Excess
Cash Flow for such period.
"Federal Funds Rate" means for any day of determination, 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 for such day (or, if such day is not a Business
Day) by the Federal Reserve Bank for the next preceding Business Day) by
the Federal Reserve Bank of Richmond or, if such rate is not so published
for any day that is a Business Day, the average of quotations for such
day on such transactions received by the Agent from three (3) Federal
funds brokers of recognized standing selected by the Agent.
"Fees" means the collective reference to each fee payable to
the Agent, for its own account or for the ratable benefit of the Lenders,
under the terms of this Agreement or under the terms of any of the other
Financing Documents, including, without limitation, the Agency Fees, the
Revolving Credit Unused Line Fees, the Letter of Credit Fees, the Letter
of Credit Fronting Fees, the Bond Letter of Credit Fees, the Bond Letter
of Credit Fronting Fees, the Early Termination Fee, the Term Loan B Fees,
and the Field Examination Fees.
"Field Examination Fee" and "Field Examination Fees" have the
meanings described in Section 2.8.3 (Field Examination Fees).
"Financing Documents" means at any time collectively this
Agreement, the Notes, the Security Documents, the Letter of Credit
Documents, the Bond Letter of Credit Agreement Documents, and any other
instrument, agreement or document previously, simultaneously or hereafter
executed and delivered by the Borrower, any Guarantor and/or any other
Person, singly or jointly with another Person or Persons, evidencing,
securing, guarantying or in connection with this Agreement, any Note, any
of the Security Documents, any of the Credit Facilities, and/or any of
the Obligations, all as the same may be amended, restated, supplemented,
replaced or otherwise modified at any time and from time to time.
"Fixed or Capital Assets" of a Person at any date means all
assets which would, in accordance with GAAP consistently applied, be
classified on the balance sheet of such Person as property, plant or
equipment at such date.
"Fixed Charges" means as to the Borrower and each of the
Subsidiary Guarantors, on a consolidated basis, for any period of
determination, the scheduled payments of principal and cash interest on
account of all Indebtedness for Borrowed Money and on account of all
Capital Leases, plus cash Taxes, plus cash dividends declared or paid by
the Borrower. For purposes of calculating "Fixed Charges", the Agent and
the Lenders agree that scheduled payments with respect to the Iowa Bond
Letter of Credit Obligations shall reflect the permitted amortization of
a portion of such Iowa Bond Letter of Credit Obligations pursuant to
Section 2.5.5(b) of this Agreement.
"Fixed Charge Coverage Ratio" means as to the Borrower and each
of the Subsidiary Guarantors, on a consolidated basis, for the period of
any determination thereof, the ratio of (a) EBITDA, less the aggregate
amount of all non-financed Capital Expenditures for such period, to (b)
Fixed Charges.
"Funded Debt" means as to the Borrower and each of the
Subsidiary Guarantors, on a consolidated basis, as of any date of
determination, (i) the aggregate of all Indebtedness for Borrowed Money
of the Borrower and each of the Subsidiary Guarantors, whether secured or
unsecured (but excluding, without duplication, loans by the Borrower to
one or more of the Subsidiary Guarantors), having a final maturity (or
which by the terms thereof is renewable or extendible at the option of
the obligor for a period ending) more than a year after that date,
including current maturities of long-term Indebtedness for Borrowed Money
(as determined in accordance with GAAP), less (ii) the aggregate amount
of all cash balances and Cash Equivalents of the Borrower and/or any of
the Subsidiary Guarantors.
"GAAP" means generally accepted accounting principles in the
United States of America in effect from time to time.
"General Intangibles" means all general intangibles of every
nature, whether presently existing or hereafter acquired or created, and
without implying any limitation of the foregoing, further means all books
and records, claims (including without limitation all claims for income
tax and other refunds), choses in action, claims, causes of action in
tort or equity, contract rights, judgments, customer lists, Patents,
Trademarks, licensing agreements, rights in intellectual property,
goodwill (including goodwill of the business of the Borrower or any
Subsidiary Guarantor symbolized by and associated with any and all
Trademarks, trademark licenses, Copyrights and/or service marks), royalty
payments, licenses, rights as lessee under any lease of real or personal
property, literary rights, Copyrights, service names, service marks,
logos, trade secrets, amounts received as an award in or settlement of a
suit in damages, deposit accounts, interests in joint ventures, general
or limited partnerships, or limited liability companies or partnerships,
rights in applications for any of the foregoing, books and records in
whatever media (paper, electronic or otherwise) recorded or stored, with
respect to any or all of the foregoing and all general intangibles
necessary or beneficial to retain, access and/or process the information
contained in those books and records, and all proceeds (cash and non-
cash) of the foregoing.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions
of or pertaining to government and any department, agency or
instrumentality thereof.
"Guarantor" means the Parent or any Subsidiary Guarantor or
their respective successors and assigns, as the case may be; and
"Guarantors" means the Parent, each and every Subsidiary Guarantor, and
each of their respective successors and assigns.
"Guaranty" means collectively each guaranty of payment for the
benefit of the Lenders ratably and the Agent to the Lender from any or
all of the Guarantors, as the same may from time to time be amended,
restated, supplemented or otherwise modified.
"Hazardous Materials" means (a) any "hazardous waste" as
defined by the Resource Conservation and Recovery Act of 1976, as amended
from time to time, and regulations promulgated thereunder; (b) any
"hazardous substance" as defined by the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended from time to
time, and regulations promulgated thereunder; (c) any substance the
presence of which on any property now or hereafter owned, acquired or
operated by the Borrower or any Subsidiary Guarantor is prohibited by any
Law similar to those set forth in this definition; and (d) any other
substance which by Law requires special handling in its collection,
storage, treatment or disposal.
"Hazardous Materials Contamination" means the contamination
(whether presently existing or occurring after the date of this
Agreement) by Hazardous Materials of any property owned, operated or
controlled by the Borrower or any Subsidiary Guarantor or for which the
Borrower or any Subsidiary Guarantor has responsibility, including,
without limitation, improvements, facilities, soil, ground water, air or
other elements on, or of, any property now or hereafter owned, acquired
or operated by the Borrower or any Subsidiary Guarantor, and any other
contamination by Hazardous Materials for which the Borrower or any
Subsidiary Guarantor is, or is claimed to be, responsible.
"Indebtedness" of a Person means at any date the total
liabilities of such Person at such time determined in accordance with
GAAP consistently applied.
"Indebtedness for Borrowed Money" of a Person means at any time
the sum at such time of (a) Indebtedness of such Person for borrowed
money or for the deferred purchase price of property or services, (b) any
obligations of such Person in respect of letters of credit, banker's or
other acceptances or similar obligations issued or created for the
account of such Person, (c) Lease Obligations of such Person with respect
to Capital Leases, (d) all liabilities secured by any Lien on any
property owned by such Person, to the extent attached to such Person's
interest in such property, even though such Person has not assumed or
become personally liable for the payment thereof, (e) obligations of
third parties which are being guarantied or indemnified against by such
Person or which are secured by the property of such Person; (f) any
obligation of such Person or a Commonly Controlled Entity to a
Multiemployer Plan; and (h) any obligations, liabilities or indebtedness,
contingent or otherwise, under or in connection with, any interest rate
or currency swap agreements, cap, floor, and collar agreements, currency
spot, foreign exchange and forward contracts and other similar agreements
and arrangements; but excluding trade and other accounts payable in the
ordinary course of business in accordance with customary trade terms and
which are not more than thirty (30) days past due (as determined in
accordance with customary trade practices) or which are being disputed in
good faith by such Person and for which adequate reserves are being
provided on the books of such Person in accordance with GAAP.
"Indenture" means that certain indenture dated as of April 21,
1994 by and between the Borrower and the United States Trust Company of
New York, as trustee, entered into in connection with the Subordinated
Debt, as the same may be amended, restated supplemented or otherwise
modified.
"Installment Payment Date" means the first day of each
February, May, August and November commencing on May 1, 1997.
"Instrument" means a negotiable instrument (as defined under
Article 3 of the Uniform Commercial Code), a "certificated security" (as
defined under Article 8 of the Uniform Commercial Code), or any other
writing which evidences a right to payment of money and is not itself a
security agreement or lease and is of a type which is in the ordinary
course of business transferred by delivery with any necessary
indorsement.
"Interest Coverage Ratio" means as to the Borrower and each of
the Subsidiary Guarantors, on a consolidated basis, for any period of
determination thereof the ratio of (a) EBITDA to (b) cash interest
expense, all determined on a consolidated basis in accordance with GAAP
consistently applied.
"Interest Period" means as to any LIBOR Loan, the period
commencing on and including the date such LIBOR Loan is made (or on the
effective date of the Borrower's election to convert any Base Rate Loan
to a LIBOR Loan in accordance with the provisions of this Agreement) and
ending on and including the day which is 30, 60, 90 or 180 days
thereafter, as selected by the Borrower in accordance with the provisions
of this Agreement, and thereafter, each period commencing on the last day
of the then preceding Interest Period for such LIBOR Loan and ending on
and including the day which is 30, 60, 90 or 180 days thereafter, as
selected by the Borrower in accordance with the provisions of this
Agreement; provided, however that:
(a) the first day of any Interest Period shall be a Eurodollar
Business Day;
(b) if any Interest Period would end on a day that shall not be
a Eurodollar Business Day, such Interest Period shall be extended to
the next succeeding Eurodollar Business Day unless such next
succeeding Eurodollar Business Day would fall in the next calendar
month, in which case, such Interest Period shall end on the next
preceding Eurodollar Business Day; and
(c) no Interest Period shall extend beyond the Revolving Credit
Termination Date or the scheduled maturity date of the Term Loans A
or Term Loans B, as appropriate.
"Interest Rate Election Notice" has the meaning described in
Section 2.7.2(e).
"Interest Rate Protection Agreement" means any interest rate or
currency swap agreements, cap, floor, and collar agreements, currency
spot, foreign exchange and forward contracts and other similar agreements
and arrangements.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and the Income Tax Regulations issued
and proposed to be issued thereunder.
"Inventory" means all inventory of the Borrower and each
Subsidiary Guarantor and all right, title and interest of the Borrower
and each Subsidiary Guarantor in and to all of its and their now owned
and hereafter acquired goods, merchandise and other personal property
furnished under any contract of service or intended for sale or lease,
including, without limitation, all raw materials, work-in-progress,
finished goods and materials and supplies of any kind, nature or
description which are used or consumed in the business of the Borrower
and any Subsidiary Guarantor, as appropriate, or are or might be used in
connection with the manufacture, packing, shipping, advertising, selling
or finishing of such goods, merchandise and other licenses, warranties,
franchises, general intangibles, personal property and all Documents or
documents relating to the same and all proceeds (cash and non-cash) of
the foregoing.
"Iowa Bond Letter of Credit - NB" means (i) that certain
irrevocable letter of credit issued by the Agent for the account of the
Borrower or BIC to replace the Iowa Bond Letter of Credit and (ii) that
certain standby credit line made available by the Agent to replace the
Iowa Bond Standby Credit Agreement, as the same may be amended, restated,
reissued, renewed, supplemented, replaced or otherwise modified at any
time and from time to time.
"Iowa Bond Letter of Credit" means that certain irrevocable
letter of credit dated March 13, 1996, as amended by Amendment No. 1
dated March 13, 1996, issued by Fleet National Bank of Connecticut in the
original amount of $6,025,810, for the account of BIC, for the benefit of
State Street Bank and Trust Company, as trustee, and as security for the
Iowa Bonds, as the same may be amended, restated, reissued, renewed,
supplemented, replaced or otherwise modified at any time and from time to
time.
"Iowa Bond Letter of Credit Agreement" means that certain
letter of credit reimbursement agreement by and between the Agent and the
Borrower pursuant to which the Borrower will agree to reimburse the Agent
for any amounts drawn under the Iowa Bond Letter of Credit - NB and to
pay certain fees, interest and other amounts payable to the Agent with
respect to the Iowa Bond Letter of Credit - NB, as the same may be
amended, restated, supplemented, replaced or otherwise modified at any
time and from time to time.
"Iowa Bond Letter of Credit Agreement Documents - Bonds" means
all instruments, agreements or documents previously, simultaneously or
hereafter executed and delivered by the Borrower, any Guarantor and/or
any other Person, singly or jointly with another Person or Persons,
evidencing, securing, guarantying or in connection with the Iowa Bond
Letter of Credit, the Iowa Bond Standby Credit Agreement (prior to the
date on which the Agent is a party thereto), and/or any or all of the
Iowa Bonds, all as the same may be amended, restated, supplemented,
replaced or otherwise modified at any time and from time to time.
"Iowa Bond Letter of Credit Agreement Documents - NB" means the
Iowa Bond Letter of Credit Agreement and any other instrument, agreement
or document previously, simultaneously or hereafter executed and
delivered by the Borrower, any Guarantor and/or any other Person, singly
or jointly with another Person or Persons, evidencing, securing,
guarantying or in connection with the Iowa Bond Letter of Credit - NB,
the Iowa Bond Standby Letter of Credit Agreement (but only after such
date as the Agent is a party thereto) and/or any or all of the Iowa Bond
Letter of Credit Obligations, all as the same may be amended, restated,
supplemented, replaced or otherwise modified at any time and from time to
time.
"Iowa Bond Letter of Credit Obligations" means the collective
reference to all Obligations of the Borrower under and with respect to
the Iowa Letter of Credit - NB, the Iowa Bond Letter of Credit Agreement,
and/or any of the Iowa Bond Letter of Credit Agreement Documents.
"Iowa Bond Rollover Payments" means the collective reference to
payments made to the bondholders or to the Iowa Trustee pursuant to a
Draw or a Conversion Drawing.
"Iowa Bond Standby Credit Agreement" means that certain Standby
Credit Agreement among BIC, The First National Bank of Boston, as prior
Iowa Bond Trustee, and Barclays Bank, PLC, New York Branch, dated as of
February 1, 1995; all of the obligations and rights of Barclays Bank PLC,
New York Branch, having been assigned to and assumed by Fleet National
Bank of Connecticut pursuant to an Amendment, Assignment and Assumption
Agreement dated March 13, 1996, by and among BIC, Fleet Capital
Corporation, Barclays Bank PLC, New York Branch, The First National Bank
of Boston, as remarketing agent, and State Street Bank and Trust Company,
as Iowa Bond Trustee, as the same may be amended, restated, reissued,
renewed, supplemented, replaced or otherwise modified at any time and
from time to time. Subsequent to the Closing Date, the Agent has
delivered a standby line of credit to replace the line of credit
described in the Iowa Bond Standby Credit Agreement and a new Iowa Bond
Standby Credit Agreement has been executed and delivered among the Agent,
BIC and the Iowa Bond Trustee and other necessary persons, if any, and
all references to the term Iowa Bond Standby Credit Agreement shall be to
such replacement agreement to which the Agent is a party, as the same may
be amended, restated, reissued, supplemented, replaced or otherwise
modified at any time and from time to time.
"Iowa Bond Trust Agreement" means that certain loan and trust
agreement dated as of August 30, 1988 by and among the Iowa Bond Trustee,
The City of Iowa Falls, Iowa, Genpak Corporation and Canadian Imperial
Bank of Commerce (New York), relating to the Iowa Bonds, as supplemented
by the Supplemental Agreement dated as of September 27, 1990, and as
amended by the Amendment to Loan and Trust Agreement dated as of February
12, 1992, and the Second Amendment to Loan and Trust Agreement dated as
of April 21, 1994, and as subsequently amended, restated, supplemented or
otherwise modified at any time and from time to time.
"Iowa Bond Trustee" means State Street Bank and Trust Company,
and its successors and assigns, as trustee under the Iowa Bond Trust
Agreement.
"Iowa Bonds" means the City of Iowa Falls Flexible Mode
Industrial Development Revenue Refunding Bonds (Xxxxx Iowa Corporation
Project), Series 1988, issued by the City of Iowa Falls, Iowa in the
original aggregate principal amount of Five Million Four Hundred Thousand
Dollars ($5,400,000).
"Item of Payment" means each check, draft, cash, money,
instrument, item, and other remittance in payment or on account of
payment of any Collateral, including, without limitation, cash proceeds
of any returned, rejected or repossessed goods, the sale or lease of
which gave rise to an Account, and other proceeds of Collateral; and
"Items of Payment" means the collective reference to all of the
foregoing.
"Laws" means all ordinances, statutes, rules, regulations,
orders, injunctions, writs, or decrees of any Governmental Authority or
political subdivision or agency thereof, or any court or similar entity
established by any thereof.
"Lease Obligations" of a Person means for any period the rental
commitments of such Person for such period under leases for real and/or
personal property.
"Letter of Credit" and "Letters of Credit" shall have the
meanings described in Section 2.4.1 hereof.
"Letter of Credit Agreement" means the collective reference to
each letter of credit application and agreement substantially in the form
of the Agent's then standard form of application for letter of credit or
such other form as may be approved by the Agent, executed and delivered
by the Borrower in connection with the issuance of a Letter of Credit
(other than any of the Bond Letters of Credit), as the same may from time
to time be amended, restated, supplemented or modified; and "Letter of
Credit Agreements" means all of the foregoing in effect at any time and
from time to time. The Agent and the Lenders agree that if the
provisions of any Letter of Credit Agreement conflict with the provisions
of this Agreement, the provisions of this Agreement shall control.
"Letter of Credit Commitment" means the agreement of the Agent
relating to the issuance of the Letters of Credit and the agreement of a
Lender to purchase a participating interest in any Letter of Credit
Obligations with respect to such Letters of Credit, all subject to and in
accordance with the provisions of this Agreement; and "Letter of Credit
Commitments" means the collective reference to the Letter of Credit
Commitment of the Agent and each of the Lenders.
"Letter of Credit Committed Amount" has the meaning given such
term in Section 2.4.1.
"Letter of Credit Documents" means any and all drafts under or
purporting to be under a Letter of Credit, any Letter of Credit
Agreement, and any other instrument, document or agreement executed
and/or delivered by the Borrower or any other Person under, pursuant to
or in connection with a Letter of Credit or any Letter of Credit
Agreement.
"Letter of Credit Facility" means the facility established
pursuant to Section 2.4 (Letter of Credit Facility) of this Agreement.
"Letter of Credit Fee" and "Letter of Credit Fees" have the
meanings described in Section 2.4.2 hereof.
"Letter of Credit Fronting Fee" and "Letter of Credit Fronting
Fees" have the meanings described in Section 2.4.2 hereof.
"Letter of Credit Obligations" means the collective reference
to all Obligations of the Borrower with respect to the Letters of Credit
and the Letter of Credit Agreements.
"Liabilities" means at any date all liabilities that in
accordance with GAAP consistently applied should be classified as
liabilities on a consolidated balance sheet of the Borrower and its
Subsidiaries.
"LIBOR Base Rate" means for any Interest Period with respect to
any LIBOR Loan, the rate per annum (rounded upward, if necessary, to the
nearest next 1/100 of 1%) appearing on Telerate Page 3750 (or any
successor page) as the London interbank offered rate for deposits in
United States Dollars at approximately 11:00 a.m. (London time) two (2)
Eurodollar Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "LIBOR Base Rate" shall mean, for any
LIBOR Loan for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters
Screen LIBO Page as the London interbank offered rate for deposits in
United States Dollars at approximately 11:00 a.m. (London time) two (2)
Eurodollar Business Days prior to the first day of such Interest Period;
PROVIDED, HOWEVER, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates. For purposes of this definition, Telerate Page 3750 refers to the
British Bankers Association Libor Rates (determined at approximately
11:00 a.m (London time)) that are published by Dow Xxxxx Telerate, Inc.
"LIBOR Loan" means any Loan for which interest is to be
computed with reference to the LIBOR Rate.
"LIBOR Rate" means for any Interest Period with respect to any
LIBOR Loan, (i) the Applicable Margin, PLUS (ii) the per annum rate of
interest calculated pursuant to the following formula:
LIBOR BASE RATE
1.00 - Reserve Percentage
"Lien" means any mortgage, deed of trust, deed to secure debt,
grant, pledge, security interest, assignment, encumbrance, lien,
hypothecation, or charge of any kind, whether perfected or unperfected,
avoidable or unavoidable, including, without limitation, any conditional
sale or other title retention agreement, any lease in the nature thereof,
and the filing of any financing statement under the Uniform Commercial
Code of any jurisdiction, excluding the precautionary filing of any
financing statement by any lessor in a true lease transaction, by any
xxxxxx in a true bailment transaction or by any consignor in a true
consignment transaction under the Uniform Commercial Code of any
jurisdiction or the agreement to give any financing statement by any
lessee in a true lease transaction, by any bailee in a true bailment
transaction or by any consignee in a true consignment transaction.
"Loan" means each of the Revolving Loan, a Term Loan A, or a
Term Loan B, as the case may be, and "Loans" means the collective
reference to the Revolving Loan, the Term Loans A, and the Term Loans B.
"Loan Notice" has the meaning described in Section 2.1.2
(Procedure for Making Advances).
"Lockbox" has the meaning described in Section 2.1.8 (The
Collateral Account).
"Multiemployer Plan" means a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Net Outstandings" of any Lender means, at any time, the sum of
(a) all amounts paid by such Lender (other than pursuant to Section 8.5
(Indemnification)) to the Agent in respect to the Revolving Loan or
otherwise under this Agreement, MINUS (b) all amounts paid by the Agent
to such Lender which are received by the Agent and which, pursuant to
this Agreement, are paid over to such Lender for application in reduction
of the outstanding principal balance of the Revolving Loan.
"Net Casualty Proceeds", when used with respect to any
condemnation awards or insurance proceeds allocable to any Collateral,
means the gross proceeds from any casualty or condemnation remaining
after payment of all expenses (including attorneys' fees) incurred in the
collection of such gross proceeds.
"Net Proceeds" means gross proceeds (cash and non-cash) or
other consideration paid to, or received by, the Borrower or any
Subsidiary of the Borrower from (i) any Asset Disposition (including,
without limitation, issuance or assumption of Indebtedness or the
issuance of Securities), net of customary and reasonable settlement
costs, fees, expenses and Taxes payable in connection with such Asset
Disposition or (ii) any sale, issuance or other offering of Indebtedness
or Securities, net of customary and reasonable closing costs, fees and
expenses.
"Nevada Bond Letter of Credit - NB" means that certain
irrevocable letter of credit issued by the Agent for the account of the
Borrower to replace the Nevada Bond Letter of Credit, as the same may be
amended, restated, reissued, renewed, supplemented, replaced or otherwise
modified at any time and from time to time.
"Nevada Bond Letter of Credit" means that certain irrevocable
letter of credit dated April 21, 1995, issued by Barclays Bank PLC in the
original stated amount of $6,271,233, for the account of the Borrower,
for the benefit of the Manufacturers and Traders Trust Company, as
Trustee, and as security for the Nevada Bonds, as the same may be
amended, restated, reissued, renewed, supplemented, replaced or otherwise
modified at any time and from time to time.
"Nevada Bond Letter of Credit Agreement" means that certain
letter of credit reimbursement agreement by and between the Agent and the
Borrower pursuant to which the Borrower will agree to reimburse the Agent
for any amounts drawn under the Nevada Bond Letter of Credit - NB and to
pay certain fees, interest and other amounts payable to the Agent with
respect to the Nevada Bond Letter of Credit - NB, as the same may be
amended, restated, supplemented, replaced or otherwise modified at any
time and from time to time.
"Nevada Bond Letter of Credit Agreement Documents" means all
instruments, agreements or documents previously, simultaneously or
hereafter executed and delivered by the Borrower, any Guarantor and/or
any other Person, singly or jointly with another Person or Persons,
evidencing, securing, guarantying or in connection with the Nevada Bond
Letter of Credit, and/or any or all of the Nevada Bonds, all as the same
may be amended, restated, supplemented, replaced or otherwise modified at
any time and from time to time.
"Nevada Bond Letter of Credit Agreement Documents - NB" means
the Nevada Bond Letter of Credit Agreement and any other instrument,
agreement or document previously, simultaneously or hereafter executed
and delivered by the Borrower, any Guarantor and/or any other Person,
singly or jointly with another Person or Persons, evidencing, securing,
guarantying or in connection with the Nevada Bond Letter of Credit - NB
and/or any or all of the Nevada Bond Letter of Credit Obligations, all as
the same may be amended, restated, supplemented, replaced or otherwise
modified at any time and from time to time.
"Nevada Bond Letter of Credit Obligations" means the collective
reference to all Obligations of the Borrower under and with respect to
the Nevada Letter of Credit - NB, the Nevada Bond Letter of Credit
Agreement, and/or any of the Nevada Bond Letter of Credit Agreements.
"Nevada Bond Trust Agreement" means that certain trust
indenture dated as of April 1, 1991 by and between the Nevada Trustee and
The City of Xxxxxxxxx, Nevada Public Improvement Trust, relating to the
Nevada Bonds, as amended, restated, supplemented or otherwise modified at
any time and from time to time.
"Nevada Bond Trustee" means Manufacturers and Traders Trust
Company, and its successors and assigns, as trustee under the Nevada Bond
Trust Agreement.
"Nevada Bonds" means the City of Xxxxxxxxx, Nevada Public
Improvement Trust Variable Rate Demand Refunding Bonds (Xxxxx Plastics
Corporation Project), Series 1991, issued by the City of Xxxxxxxxx Nevada
Public Improvement Trust in the original aggregate principal amount of
Eight Million Dollars ($8,000,000).
"Non-Ratable Loan" means an advance under the Revolving Loan
made by the Agent in accordance with the provisions of Section 2.9.3(c).
"Note" means any Revolving Credit Note, any Term Loan A Note,
any Term Loan B Note, as the case may be, and "Notes" means collectively
each Revolving Credit Note, each Term Loan A Note, each Term Loan B Note,
and any other promissory note which may from time to time evidence all or
any portion of the Obligations.
"Obligations" means and includes all present and future
indebtedness, obligations, and liabilities, whether now existing or
contemplated or hereafter arising, of the Borrower to the Lenders and/or
Agent under, arising pursuant to, in connection with and/or on account of
the provisions of this Agreement, each Note, each Security Document,
and/or any of the other Financing Documents, the Loans, and/or any of the
Credit Facilities including, without limitation, the principal of, and
interest on, each Note, late charges, the Fees, Enforcement Costs, and
prepayment fees (if any), letter of credit fees or fees charged with
respect to any guaranty of any letter of credit; also means and includes
all other present and future indebtedness, liabilities and obligations,
whether now existing or contemplated or hereafter arising, of the
Borrower and/or any Subsidiary Guarantor to the Agent and/or to any
Lender any/or any of its or their Affiliates under or in connection with,
any Interest Rate Protection Agreements; and also means any and all
renewals, extensions, substitutions, amendments, restatements and
rearrangements of any such debts, obligations and liabilities. FOR
PURPOSES OF THE INDENTURE, ALL OBLIGATIONS UNDER AND IN CONNECTION WITH
THE CREDIT FACILITIES CONSTITUTE AND ARE HEREBY DEEMED "DESIGNATED SENIOR
INDEBTEDNESS" AS DEFINED IN THE INDENTURE.
"Outstanding Bond Letter of Credit Obligations" has the meaning
described in Section 2.5.3 hereof.
"Outstanding Letter of Credit Obligations" has the meaning
described in Section 2.4.3 hereof.
"PAC" means PackerWare Acquisition Corporation, a corporation
organized and existing under the laws of the State of Kansas, and its
successors and assigns.
"PackerWare" means PackerWare Corporation, a corporation
organized and existing under the laws of the State of Kansas, and its
successors and assigns.
"PackerWare Merger Agreement" means that certain Agreement and
Plan of Reorganization dated as of January 14, 1997 by and among the
Borrower, PAC, PackerWare and the shareholders of PackerWare immediately
prior to consummation of the PackerWare Merger Transaction, as amended,
restated, supplemented or otherwise modified.
"PackerWare Merger Agreement Documents" means collectively the
PackerWare Merger Agreement and any and all other agreements, documents
or instruments (together with any and all amendments, modifications, and
supplements thereto, restatements thereof, and substitutes therefor)
previously, now or hereafter executed and delivered by the Borrower,
PackerWare, PAC, or any other Person in connection with the PackerWare
Merger Transaction.
"PackerWare Merger Transaction" means the merger of PAC with
and into PackerWare in accordance with the provisions of the PackerWare
Merger Agreement.
"Parent" means BPC Holding Corporation, a corporation organized
and existing under the laws of the State of Delaware, and its successors
and assigns.
"Patents" means and includes, in each case whether now existing
or hereafter arising, all of the rights, title and interest of the
Borrower and each Subsidiary Guarantor in and to (a) any and all patents
and patent applications, (b) any and all inventions and improvements
described and claimed in such patents and patent applications, (c)
reissues, divisions, continuations, renewals, extensions and
continuations-in-part of any patents and patent applications, (d) income,
royalties, damages, claims and payments now or hereafter due and/or
payable under and with respect to any patents or patent applications,
including, without limitation, damages and payments for past and future
infringements, (e) rights to xxx for past, present and future
infringements of patents, and (f) all rights corresponding to any of the
foregoing throughout the world.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Acquisition" means (A) the acquisition or purchase
of, or investment in, any Person, any operating division or unit of any
Person, or the stock or Assets of any Person or the combination with any
Person (each individually, a "Subject Transaction") regardless of the
structure of the Subject Transaction, engaged principally in the lines of
business set forth in Section 6.1.7 or in a business reasonably related
thereto; provided, however that:
(i) the aggregate purchase price of, investment in, acquisition
expenditures relating to (excluding customary and reasonable
transaction costs), and assumed Liabilities in connection with, any
such Subject Transaction shall not exceed the lesser of:
(x) the product of (a) the actual EBITDA for the Borrower
and each of the Subsidiary Guarantors, calculated on a
consolidated basis, for the then preceding twelve (12) month
period after giving effect to such Subject Transaction (subject
to such proforma adjustments as shall be acceptable to the
Agent in its sole and absolute discretion), and (b) five (5),
or
(y) Fifteen Million Dollars ($15,000,000),
(ii) the aggregate purchase prices of, investments in,
acquisition expenditures relating to (excluding customary and
reasonable transaction costs), and assumed Liabilities in connection
with, all Subject Transactions made on or after the Closing Date
shall not exceed Thirty Million Dollars ($30,000,000),
(iii) such Subject Transaction shall not otherwise constitute
or give rise to a Default or an Event of Default,
(iv) the Borrower shall have furnished financial projections in
form and content reasonably acceptable to the Agent which give
effect to such Subject Transaction and which project that such
Subject Transaction would not cause a Default or Event of Default
(provided that the Agent and the Lenders agree that such projections
shall not constitute a guaranty of actual performance),
(v) if requested by the Agent or the Requisite Lenders, a Phase
I environmental assessment of any real property to be acquired or
purchased or owned by any Person to be acquired or purchased or
owned by any Person in which the Borrower or any Subsidiary intends
to make an investment, has been performed by a reputable and
recognized environmental consulting firm engaged by the Borrower and
reasonably acceptable to the Agent and has revealed no material
Hazardous Materials Contamination or material violations of any
Environmental Laws, the non-remediation of or non-compliance with
which would result in a material Liability not reflected in the
purchase price,
(vi) if and to the extent the Subject Transaction consists of
the purchase or acquisition of a Person which is to be a Subsidiary
of the Borrower or merged into a Subsidiary of the Borrower created
for the express purpose of consummating the proposed acquisition:
(1) the Borrower shall execute all documents and take such
other actions as the Agent may reasonably require to grant to
the Agent and the Lenders a first priority Lien on one hundred
percent (100%) of the stock of such Subsidiary, and
(2) such Subsidiary shall be designated and qualify
immediately after the closing of the Subject Transaction as a
Subsidiary Guarantor in accordance with the terms of Section
6.2.2,
(vii) after giving effect to any borrowings under the Revolving
Loan, if any, needed to finance the Subject Transaction, the
Borrower and the Subsidiary Guarantors shall have availability under
the Revolving Loan in an amount at least equal to Twenty Million
Dollars ($20,000,000) and are reasonably expected to have such
minimum availability for a period of ten (10) Business Days after
closing and consummation of the Subject Transaction,
(viii) all legal matters incident to the Subject Transaction
shall be acceptable to the Agent in its reasonable discretion,
(ix) the Agent shall have been given no less than thirty (30)
days prior written notice of any proposed Subject Transaction and
shall have been provided with all information which it may have
reasonably requested in connection with such proposed Subject
Transaction,
(x) if requested by the Agent, the Agent shall have received,
prior to or simultaneously with the closing of a Subject Transaction
an opinion of counsel reasonably acceptable to the Agent in all
respects covering the Borrower's or the relevant Subsidiary's, as
the case may be, due incorporation, valid existence, good standing
and power and authority to enter into the documents contemplated by
this Agreement and the Subject Transaction and such other matters as
may be reasonably requested by the Agent,
(xi) unless otherwise agreed by the Requisite Lenders, no
Subject Transaction shall be permitted by the terms of this
Agreement if the Borrower and the Subsidiary Guarantors, on a
consolidated basis and taken as a whole, have had, immediately prior
to the date of the closing of such Subject Transaction, three (3)
consecutive months of net operating losses, and
(xii) the aggregate purchase price of, investment in,
acquisition expenditures relating to (excluding customary and
reasonable transaction costs), and assumed Liabilities in connection
with, all Subject Transactions in any given fiscal year shall not
exceed Seven Million Dollars ($7,000,000); and
(B) the Venture Stock Purchase/Merger Transaction.
The Borrower understands and agrees that the Agent shall have no
obligation or commitment to include any of the assets or properties of
any Person acquired in the Borrowing Base pursuant to a Subject
Transaction. The Agent and the Lenders agree, however, that if after
completion and review of a satisfactory field examination of the Assets
and properties which constitute or are part of a Permitted Acquisition,
such Assets and properties shall be included in the Borrowing Base if the
results of such field examination and audit are reasonably acceptable in
all respects to the Agent in its discretion and such Assets and
properties otherwise satisfy the eligibility criteria for inclusion in
the Borrowing Base.
"Permitted Asset Disposition" means any one of the following
Asset Dispositions; provided that no such Asset Disposition shall be
permitted at any time following the occurrence of a Default or an Event
of Default or if and to the extent any such Asset Disposition would give
rise to a Default or an Event of Default, unless otherwise agreed in
writing by the Requisite Lenders:
(a) an Asset Disposition which satisfies the following
conditions:
(i) the sum of (i) the Net Proceeds to be paid to or
received by the Borrower and/or any Subsidiary of the Borrower
with respect to such Asset Disposition, plus (ii) the aggregate
amount of all Net Proceeds paid to or received by the Borrower
and/or any or all of its Subsidiaries, is less than or equal to
Five Hundred Thousand Dollars ($500,000) during any fiscal
year, and
(ii) none of the Assets sold under this clause(a)
constitute molds used in the business of the Borrower or
any Subsidiary Guarantor.
(b) the sale of the property owned by Xxxxx Xxxxxxxx
located at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx;
(c) sales of Inventory in the ordinary course of
business,
(d) the licensing of Patents, Trademarks and/or
Copyrights, in the ordinary course of business,
(e) dispositions of worn, used, surplus or obsolete
Equipment in the ordinary course of business,
(f) dispositions of Assets (including Net Casualty
Proceeds) to the extent such Assets are replaced with Assets of
similar kind and function, provided that the replacement Assets
shall be purchased no later than ninety (90) days following the
Asset Disposition, the replacement Assets (which shall constitute
Collateral) shall be free and clear of Liens other than Permitted
Liens that are not Liens securing purchase money or finance lease
arrangements, and the Borrower or the Subsidiary Guarantor, as the
case may be, shall give the Agent at least ten (10) days prior
written notice of such Asset Disposition, except for an Asset
Disposition which constitutes a casualty,
(g) intercompany sales, leases or other dispositions of
Assets among and between the Borrower and any and all Subsidiary
Guarantors; provided, that any such Assets sold, leased or otherwise
disposed of as between the Borrower and any and all Subsidiary
Guarantors shall remain subject to the Liens of the Agent and the
Lenders under this Agreement and under the other Financing
Documents,
(h) the sale of any Fixed or Capital Assetsacquired by the
Borrower or any Subsidiary Guarantor and the leaseback of such
Assets within thirty (30) days of acquisition, but only as
contemplated and required as part of an intended Capital Lease
transaction at the time of acquisition,
(i) the sale of molds by the Borrower or any Subsidiary
Guarantor; provided that the aggregate Net Proceeds of any and all
such molds outside the ordinary course of business shall not exceed
Five Hundred Thousand Dollars ($500,000) in any fiscal year,
(j) the termination of the lease for PackerWare's Reno,
Nevada location; provided, that all Assets of PackerWare at such
location are transferred to one or more locations of the Borrower
and/or any Subsidiary Guarantor such that the Agent and the Lenders
would have a properly perfected Lien on, and security interest in,
such Assets,
(k) the sale, transfer or other conveyance of the issued
and outstanding capital stock of Venture Southeast and Venture
Midwest to the Borrower, as contemplated by the Venture Stock
Purchase/Merger Transaction, and
(l) transfers made as part of the South Carolina IRB Lease
Transfers.
"Permitted Liens" means: (a) Liens for Taxes (x) which are not
delinquent or (y) which (i) are being diligently contested in good faith
and by appropriate proceedings, (ii) the Borrower or the Subsidiary
Guarantor, as appropriate, has the financial ability to pay, with all
penalties and interest, at all times without materially and adversely
affecting the Borrower or the Subsidiary Guarantor, as appropriate, and
(iii) are not, and will not be with appropriate filing, the giving of
notice and/or the passage of time, entitled to priority over any Lien of
the Agent and/or the Lenders unless and to the extent that a reserve has
been established against the Borrowing Base in an amount equal to the
maximum liability under and in connection with such Taxes, which reserve
shall be established by the Agent upon the Borrower's request; (b)
deposits or pledges to secure obligations under workers' compensation,
social security or similar laws, or under unemployment insurance in the
ordinary course of business; (c) Liens securing the Obligations; (d)
judgment Liens to the extent the entry of such judgment does not
constitute an Event of Default under the terms of this Agreement or
result in the sale or levy of, or execution on, any of the Collateral;
(e) such other Liens, if any, as are set forth on SCHEDULE 4.1.22
attached hereto and made a part hereof; (f) deposits, liens or pledges to
secure payments of unemployment and other insurance, old-age pensions or
other social security obligations, or the performance of bids, tenders,
leases, contracts, public or statutory obligations, surety, stay or
appeal bonds, or other similar obligations arising in the ordinary course
of business; (g) statutory mechanics', workers', repairmen's,
warehousemen's, vendors' or carriers' Liens or other similar statutory
Liens arising in the ordinary course of business and securing sums which
are not more than thirty (30) days past due, provided that such statutory
Liens do not materially impair or affect the use or value of any of the
Collateral; (h) statutory landlord's Liens under leases to which the
Borrower or any of its Subsidiaries is a party; (i) zoning restrictions,
easements, rights of way, licenses and restrictions on the use of real
property or minor irregularities in title thereto which do not materially
impair the use or value of any such real property; (j) "Permitted
Encumbrances" (as defined in each of the Deeds of Trust); (k) Liens
securing Indebtedness for Borrowed Money permitted by the provisions of
Section 6.2.4(g); and (l) Liens securing obligations under Capital Leases
to the extent such Capital Leases are permitted by the provisions of this
Agreement.
"Permitted Uses" means (i) the acquisition of one hundred
percent (100%) of the capital stock of PackerWare through the PackerWare
Merger Transaction by the Borrower, (ii) the acquisition of one hundred
percent (100%) of the capital stock of Venture Holdings pursuant to the
Venture Stock Purchase/Merger Transaction, (iii) the refinancing and
payment of all obligations of the Borrower and/or any of the Subsidiary
Guarantors to any lenders with respect to any Indebtedness for Borrowed
Money existing as of the Closing Date, (iv) the refinancing and payment
of all obligations of Venture Holdings, Venture Southeast and/or Venture
Midwest to any lenders with respect to any Indebtedness for Borrowed
Money existing as of the date of this Agreement, (v) the payment of all
costs and expenses reasonably incurred in connection with the closing and
consummation of the transactions contemplated by this Agreement,
including the PackerWare Merger and/or the Venture Stock Purchase/Merger
Transaction, (vi) the payment of expenses incurred in the ordinary course
of business of the Borrower or any Subsidiary Guarantor, (vii) the
acquisition of any Permitted Acquisition as and to the extent permitted
by the provisions of this Agreement, (viii) the payment of all costs and
expenses reasonably incurred in connection with the closing and
consummation of a Permitted Acquisition, (ix) the repayment of a portion
of the "Term Loans" (as defined in the Original Credit Agreement) and
(ix) for general corporate purposes of the Borrower or any Subsidiary
Guarantor.
"Person" means and includes an individual, a corporation, a
partnership, a joint venture, a limited liability company or partnership,
a trust, an unincorporated association, a Governmental Authority, or any
other organization or entity.
"Plan" means any pension plan which is covered by Title IV of
ERISA and in respect of which the Borrower, any Subsidiary of the
Borrower or a Commonly Controlled Entity is an "employer" as defined in
Section 3 of ERISA.
"Post-Default Rate" means with respect to the principal balance
of any of the Obligations, the then applicable rate of interest on such
Obligations, plus two percent (2%) per annum.
"Post-Expiration Date Letter of Credit" and "Post-Expiration
Date Letters of Credit" have the meanings described in Section 2.4.3
"Prepayment" means a Revolving Loan Mandatory Prepayment, a
Revolving Loan Optional Prepayment, a Term Loan A Mandatory Prepayment, a
Term Loan A Optional Prepayment, a Term Loan B Mandatory Prepayment, or a
Term Loan B Optional Prepayment, as the case may be, and "Prepayments"
mean collectively all Revolving Loan Mandatory Prepayments, all Revolving
Loan Optional Prepayments, all Term Loan A Mandatory Prepayments, all
Term Loan A Optional Prepayments, all Term Loan B Mandatory Prepayments
and all Term Loan B Optional Prepayments.
"Pricing Ratio" means as to the Borrower and the Subsidiary
Guarantors, on a consolidated basis, the ratio of (i) Funded Debt to (ii)
EBITDA.
"Prime Rate" means the floating and fluctuating per annum prime
commercial lending rate of interest of the Agent, as established by the
Agent at any time or from time to time. The Prime Rate shall be adjusted
automatically, without notice, as of the effective date of any change in
such prime commercial lending rate. The Prime Rate does not necessarily
represent the lowest rate of interest charged by the Agent to borrowers.
"Proposed Assignee" has the meaning described in Section 9.5
(Assignments by Lenders).
"Proforma Financial Projections" has the meaning described in
Section 4.1.12 (Proforma Financial Statements) below.
"Proforma Financial Statements" has the meaning described in
Section 4.1.12 (Proforma Financial Statements) below.
"Pro Rata Share" means at any time and as to any Lender, the
percentage derived by dividing the unpaid principal amount of the Loans,
Bond Letter of Credit Obligations and Letter of Credit Obligations owing
to that Lender by the aggregate unpaid principal amount of all Loans,
Bond Letter of Credit Obligations and Letter of Credit Obligations then
outstanding; or if no Loans, Bond Letter of Credit Obligations or Letter
of Credit Obligations are outstanding, by dividing the total amount of
such Lender's Commitments by the total amount of the Commitments of the
Agent and all of the Lenders.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA or the regulations thereunder.
"Responsible Officer" means for the Borrower, its chief
executive officer, any vice president or president or, with respect to
financial matters, its chief financial officer.
"Requisite Lenders" means at any time of determination one or
more of the Lenders holding at least sixty-six and two-thirds percent
(66-2/3%) of the Commitments.
"Reserve Percentage" means, at any time, the then current
maximum rate for which reserves (including any basic, supplemental,
marginal and emergency reserves) are required to be maintained by member
banks of the Federal Reserve System under Regulation D of the Board of
Governors of the Federal Reserve System against "Eurocurrency
liabilities", as that term is defined in Regulation D. The LIBOR Rate
shall be adjusted automatically on and as of the effective date of any
change in the Reserve Percentage. The Agent hereby advises the Borrower
that as of the date of this Agreement, the Reserve Percentage is equal to
zero.
"Revolving Credit Commitment" means the agreement of a Lender
relating to the making the Revolving Loan and advances thereunder subject
to and in accordance with the provisions of this Agreement; and
"Revolving Credit Commitments" means the collective reference to the
Revolving Credit Commitment of each of the Lenders.
"Revolving Credit Commitment Period" means the period of time
from the Closing Date to the Business Day preceding the Revolving Credit
Termination Date.
"Revolving Credit Committed Amount" has the meaning described
in Section 2.1.1 (Revolving Credit Facility).
"Revolving Credit Facility" means the facility established by
the Lenders pursuant to Section 2.1 (Revolving Credit Facility) of this
Agreement.
"Revolving Credit Note" and "Revolving Credit Notes" have the
meanings described in Section 2.1.5 (Revolving Credit Notes).
"Revolving Credit Optional Reduction" and "Revolving Credit
Optional Reductions" have the meanings described in Section 2.1.12.
"Revolving Credit Pro Rata Share" has the meaning described in
Section 2.1.1.
"Revolving Credit Termination Date" means the earlier of (i)
January 21, 2002, (ii) the repayment or prepayment of the Term Loan in
full, (iii) the date on which the Revolving Credit Commitments are
terminated pursuant to Section 7.2 or otherwise.
"Revolving Credit Unused Line Fee" and "Revolving Credit Unused
Line Fees" have the meanings described in Section 2.1.10 (Revolving
Credit Unused Line Fee).
"Revolving Loan" has the meaning described in Section 2.1.1
(Revolving Credit Facility).
"Revolving Loan Account" has the meaning described in Section
2.1.9 (Revolving Loan Account).
"Revolving Loan Mandatory Prepayment" and "Revolving Loan
Mandatory Prepayments" have the meanings described in Section 2.1.6
(Mandatory Prepayments).
"Revolving Loan Optional Prepayment" and "Revolving Loan
Optional Prepayments" have the meanings described in Section 2.1.7
(Revolving Loan Optional Prepayment).
"Right of First Refusal Notice" has the meaning described in
Section 9.5 (Assignments by Lenders).
"Securities" means the collective reference to each and every
certificated or uncertificated security which constitutes a "security"
under the provisions of Title 8 of the Uniform Commercial Code, and all
proceeds (cash and non-cash) of the foregoing and to each and every
"investment property" under the provisions of Title 9 of the Uniform
Commercial Code (if that definition is included in that Title), and all
proceeds (cash and non-cash) of the foregoing.
"Security Agreement" means (i) that certain security agreement
dated as of the Closing Date from PackerWare, BIC, BTP, Xxxxx Xxxxxxxx
and AeroCon, Inc. to the Agent for the benefit of the Lenders, ratably,
and the Agent, (ii) that certain security agreement dated May 13, 1997
from Xxxxx Design to the Agent for the benefit of the Lenders, ratably,
and the Agent, and (iii) that certain security agreement dated the date
hereof from Xxxxx Venture, Venture Southeast and Venture Midwest, all as
amended, restated, supplemented or otherwise modified in writing at any
time and from time to time.
"Security Documents" means collectively any assignment, pledge
agreement, security agreement, mortgage, deed of trust, deed to secure
debt, financing statement and any similar instrument, document or
agreement under or pursuant to which a Lien is now or hereafter granted
to, or for the benefit of, the Agent and/or the Lenders on any real or
personal property of any Person to secure all or any portion of the
Obligations, all as the same may from time to time be amended, restated,
supplemented or otherwise modified, including, without limitation, this
Agreement, the Guaranty, the Stock Pledge Agreement, the Deeds of Trust,
the Security Agreement, the Assignment of Patents and the Assignment of
Trademarks.
"Security Procedures" means the rules, policies and procedures
adopted and implemented by the Agent and its Affiliates at any time and
from time to time with respect to security procedures and measures
relating to electronic funds transfers, all as the same may be amended,
restated, supplemented, terminated, or otherwise modified at any time and
from time to time by the Agent in its sole and absolute discretion.
"Seller" means all of the shareholders of PackerWare
immediately prior to consummation of the PackerWare Merger and all of the
shareholders of Venture Holdings immediately prior to consummation of the
Venture Stock Purchase/Merger Transaction.
"Settlement Date" means each Business Day after the Closing
Date selected by the Agent in its sole discretion subject to and in
accordance with the provisions of Section 2.9.3(a) as of which a
Settlement Report is delivered by the Agent and on which settlement is to
be made among the Lenders in accordance with the provisions of Section
2.9.3.
"Settlement Report" means each report prepared by the Agent and
delivered to each Lender and setting forth, among other things, as of the
Settlement Date indicated thereon and as of the next preceding Settlement
Date, the aggregate outstanding principal balance of the Revolving Loan,
each Lender's Revolving Credit Pro Rata Share thereof, each Lender's Net
Outstandings and all Non-Ratable Loans made, and all payments of
principal, interest and Fees received by the Agent from the Borrower
during the period beginning on such next preceding Settlement Date and
ending on such Settlement Date.
"South Xxxxxxxx Xxxx Letter of Credit" means that certain
irrevocable letter of credit dated April 20, 1995, issued by Bank One,
Cleveland, NA in the original amount of $8,427,637, for the account of
Venture Southeast, for the benefit of Bank One Trust Company, NA, as
trustee, and as security for the South Carolina Bonds, as the same may be
amended, restated, reissued, renewed, supplemented, replaced or otherwise
modified at any time and from time to time.
"South Carolina Bond Letter of Credit - NB" means that certain
irrevocable letter of credit issued or to be issued by the Agent for the
account of the Borrower or Venture Southeast as security for the South
Xxxxxxxx Xxxx Letter of Credit, as the same may be amended, restated,
reissued, renewed, supplemented, replaced or otherwise modified at any
time and from time to time. Subsequent to the date hereof, but on or
before the expiration date of the South Carolina Bond Letter of Credit,
the Agent intends to issue an irrevocable letter of credit to replace the
South Carolina Bond Letter of Credit, in which case the term "South
Xxxxxxxx Xxxx Letter of Credit - NB" shall mean such replacement letter
of credit, as the same may be amended, restated, reissued, renewed,
supplemented, replaced or otherwise modified at any time and from time to
time.
"South Carolina Bond Letter of Credit Agreement" means that
certain letter of credit reimbursement agreement by and between the Agent
and the Borrower pursuant to which the Borrower will agree to reimburse
the Agent for any amounts drawn under the South Carolina Bond Letter of
Credit - NB and to pay certain fees, interest and other amounts payable
to the Agent with respect to the South Carolina Bond Letter of Credit -
NB, as the same may be amended, restated, supplemented, replaced or
otherwise modified at any time and from time to time.
"South Xxxxxxxx Xxxx Letter of Credit Agreement Documents -
Bonds" means all instruments, agreements or documents previously,
simultaneously or hereafter executed and delivered by the Borrower, any
Guarantor and/or any other Person, singly or jointly with another Person
or Persons, evidencing, securing, guarantying or in connection with the
South Xxxxxxxx Xxxx Letter of Credit and/or any or all of the South
Carolina Bonds, all as the same may be amended, restated, supplemented,
replaced or otherwise modified at any time and from time to time.
"South Carolina Bond Letter of Credit Agreement Documents - NB"
means the South Carolina Bond Letter of Credit Agreement and any other
instrument, agreement or document previously, simultaneously or hereafter
executed and delivered by the Borrower, any Guarantor and/or any other
Person, singly or jointly with another Person or Persons, evidencing,
securing, guarantying or in connection with the South Xxxxxxxx Xxxx
Letter of Credit - NB and/or any or all of the South Carolina Bond Letter
of Credit Obligations, all as the same may be amended, restated,
supplemented, replaced or otherwise modified at any time and from time to
time.
"South Carolina Bond Letter of Credit Obligations" means the
collective reference to all Obligations of the Borrower under and with
respect to the South Carolina Letter of Credit - NB, the South Carolina
Bond Letter of Credit Agreement, and/or any of the South Carolina Bond
Letter of Credit Agreement Documents.
"South Carolina Bond Trust Agreement" means that certain trust
indenture dated as of April 1, 1995 by and among the South Carolina Bond
Trustee and the South Carolina Jobs - Economic Development Authority
relating to the South Carolina Bonds, as amended, restated, supplemented
or otherwise modified at any time and from time to time.
"South Carolina Bond Trustee" means Bank One Trust Company, NA,
and its successors and assigns, as trustee under the South Carolina Bond
Trust Agreement.
"South Carolina Bonds" means the South Carolina Jobs -Economic
Development Authority, Adjustable Rate Bonds, Series 1995 (Venture
Packaging, Inc. Project) issued by the South Carolina Jobs - Economic
Development Authority in the original aggregate principal amount of Eight
Million Three Hundred Twenty-five Thousand Dollars ($8,325,000).
"South Carolina IRB" means the Xxxxxxxx County, South Carolina
Industrial Revenue Bonds, Series 1995 (Venture Packaging Southeast, Inc.
Project).
"South Carolina IRB Lease Agreement" means that certain First
Amended Lease Agreement dated as of January 18, 1996, between Xxxxxxxx
County, South Carolina and Venture Holdings.
"South Carolina IRB Lease Purchase Option" means the option of
Venture Southeast to purchase the assets subject to the South Carolina
IRB Lease Agreement pursuant to Section 10.02 of the South Carolina IRB
Lease Agreement.
"South Carolina IRB Lease Transfers" means transfers of capital
assets related to the real property covered by the Deed of Trust -
Xxxxxxxx and, pursuant to the terms of the South Carolina IRB Lease
Agreement required to be transferred to the lessor and leased to the
lessee under the South Carolina IRB Lease Agreement.
"State" means the State of Maryland.
"Stock Pledge Agreement" means (i) that certain stock pledge,
assignment and security agreement dated as of the Closing Date from the
Borrower to the Agent for the benefit of the Lenders ratably and the
Agent, (ii) that certain stock pledge, assignment and security agreement
dated May 13, 1997 from the Borrower to the Agent for the benefit of the
Lenders ratably and the Agent, and (iii) that certain stock pledge,
assignment and security agreement dated as of the date hereof from the
Borrower to the Agent for the benefit of the Lenders ratably and the
Agent, all as the same may from time to time be amended, restated,
supplemented or otherwise modified, which Stock Pledge Agreement grants,
pledges and assigns to the Agent for the benefit of the Lenders ratably
and the Agent, a first priority pledge and assignment of one hundred
percent (100%) of the capital stock of each Subsidiary Guarantor.
"Senior Secured Debt - Parent" means that certain Indebtedness
for Borrowed Money of the Parent (and all guarantees thereof by the
Borrower and its Subsidiaries) in favor of First Trust of New York,
National Association, as trustee for the holders of the 12-1/2% Series A
Senior Secured Notes due 2006 and the 12-1/2% Series B Secured Notes due
2006 in a stated principal amount of One Hundred Five Million Dollars
($105,000,000).
"Senior Secured Debt Loan Documents" means any and all
promissory notes, agreements, documents or instruments now or at any time
evidencing, securing, guarantying or otherwise executed and delivered in
connection with the Senior Secured Debt - Parent, as the same may from
time to time be amended, restated, supplemented or modified.
"Stockholder's Equity" means as to the Borrower and each of the
Subsidiary Guarantors, on a consolidated basis, for any date of
determination thereof, the total of capital stock (except treasury stock
and net of any note receivable received upon the issuance of any shares
of capital stock) and contributed capital, as determined in accordance
with GAAP consistently applied, after eliminating all intercompany items.
"Subordinated Debt" means that certain Indebtedness for
Borrowed Money of the Borrower (and all guarantees thereof by the
Borrower and its Subsidiaries) in favor of United States Trust Company of
New York, as trustee for the holders of the 12-1/4% Senior Subordinated
Notes due 2004 in a stated principal amount of One Hundred Million
Dollars ($100,000,000).
"Subordinated Debt Loan Documents" means any and all promissory
notes, agreements, documents or instruments now or at any time
evidencing, securing, guarantying or otherwise executed and delivered in
connection with the Subordinated Debt, as the same may from time to time
be amended, restated, supplemented or modified.
"Subordinated Indebtedness" means all Indebtedness, including,
without limitation, the Subordinated Debt, incurred at any time by the
Borrower as and to the extent permitted by the provisions of Section
6.2.4 of this Agreement, which is subordinated to the Obligations, as set
forth in one or more written agreements, all in form and substance
satisfactory to the Agent in its reasonable discretion. The Agent and
the Lenders agree that Subordinated Indebtedness does not include the
Senior Secured Debt - Parent.
"Substitute Purchaser" has the meaning described in Section 9.5
(Assignments by Lenders).
"Subsidiary" means any corporation the majority of the voting
shares of which at the time are owned directly by the Borrower and/or by
one or more Subsidiaries of the Borrower.
"Subsidiary Guarantor" means BIC, BTP, AeroCon, Xxxxx Xxxxxxxx,
Xxxxx Design, Xxxxx Venture, Venture Southeast, Venture Midwest or any
other domestic Subsidiary of the Borrower or the Parent which is
designated and qualifies as a Subsidiary Guarantor in accordance with the
provisions of Section 6.2.2, or any of their respective successors and
assigns, as the case may be; and, "Subsidiary Guarantors" means BIC, BTP,
AeroCon, Xxxxx Xxxxxxxx, Xxxxx Design, Xxxxx Venture, Venture Southeast,
Venture Midwest, and each other domestic Subsidiary of the Borrower
designated and qualified as a "Subsidiary Guarantor" in accordance with
the provisions of Section 6.2.2, and all of their respective successors
and assigns.
"Tangible Capital Funds" means as to the Borrower and each of
the Subsidiary Guarantors, on a consolidated basis, for any date of
determination thereof, the total of (i) all Stockholder's Equity, less
(ii) all Assets which would be classified as intangible assets under GAAP
consistently applied, plus (iii) Subordinated Indebtedness.
"Taxes" means all taxes and assessments whether general or
special, ordinary or extraordinary, or foreseen or unforeseen, of every
character (including all penalties or interest thereon), which at any
time shall be assessed, levied, confirmed or imposed by any Governmental
Authority on the Borrower, any Subsidiary Guarantor or any of its or
their properties or Assets or any part thereof or in respect of any of
its or their franchises, businesses, income or profits.
"Term Loan A" and "Term Loans A" have the meanings described in
Section 2.2.
"Term Loan A Additional Advances" has the meaning described in
Section 2.2.
"Term Loan B" and "Term Loans B" have the meanings described in
Section 2.3.1.
"Term Loan A Commitment" and "Term Loan A Commitments" have the
meanings described in Section 2.2.
"Term Loan B Commitment" and "Term Loan B Commitments" have the
meanings described in Section 2.3.1.
"Term Loan A Committed Amount" has the meaning described in
Section 2.2.
"Term Loan B Committed Amount" has the meaning described in
Section 2.3.1
"Term Loan A Facility" means the facility established by the
Lenders pursuant to Section 2.2 (Term Loan A Facility) of this Agreement.
"Term Loan B Facility" means the facility established by the
Lenders pursuant to Section 2.3 (Term Loan B Facility) of this Agreement.
"Term Loan B Fee" and "Term Loan B Fees" have the meaning
described in Section 2.3.5 (Term Loan B Fees).
"Term Loan A Mandatory Prepayment" and "Term Loan A Mandatory
Prepayments" have the meanings described in Section 2.2.3.
"Term Loan B Mandatory Prepayment" and "Term Loan B Mandatory
Prepayments" have the meanings described in Section 2.3.3.
"Term Loan A Optional Prepayment" and "Term Loan A Optional
Prepayments" have the meanings described in Section 2.2.4.
"Term Loan B Optional Prepayment" and "Term Loan B Optional
Prepayments" have the meanings described in Section 2.3.4.
"Term Loan A Pro Rata Share" has the meaning described in
Section 2.2.
"Term Loan B Pro Rata Share" has the meaning described in
Section 2.3.1.
"Term Loan A Note" and "Term Loan A Notes" have the meaning
described in Section 2.2.2.
"Term Loan B Note" and "Term Loan B Notes" have the meaning
described in Section 2.3.2.
"Term Loan" means either a Term Loan A or a Term Loan B; and
"Term Loans" means each Term Loan A and Term Loan B.
"Term Note" means a Term Loan A Note or a Term Loan B Note;
"Term Notes" means each Term Loan A Note and each Term Loan B Note.
"Total Revolving Credit Committed Amount" has the meaning
described in Section 2.1.1.
"Total Term Loan A Committed Amount" has the meaning described
in Section 2.2.
"Total Term Loan B Committed Amount" has the meaning described
in Section 2.3.
"Trademarks" means and includes in each case whether now
existing or hereafter arising, all of the Borrower's rights, title and
interest in and to (a) any and all trademarks (including service marks),
trade names and trade styles, and applications for registration thereof
and the goodwill of the business symbolized by any of the foregoing, (b)
any and all licenses of trademarks, service marks, trade names and/or
trade styles, whether as licensor or licensee, (c) any renewals of any
and all trademarks, service marks, trade names, trade styles and/or
licenses of any of the foregoing, (d) income, royalties, damages and
payments now or hereafter due and/or payable with respect thereto,
including, without limitation, damages, claims, and payments for past,
present and future infringements thereof, (e) rights to xxx for past,
present and future infringements of any of the foregoing, including the
right to settle suits involving claims and demands for royalties owing,
and (f) all rights corresponding to any of the foregoing throughout the
world.
"Uniform Commercial Code" means, unless otherwise provided in
this Agreement, the Uniform Commercial Code as adopted by and in effect
from time to time in the State or in any other jurisdiction, as
applicable.
"Venture Holdings" has the meaning described in the Recitals.
"Venture Midwest" has the meaning described in the Recitals.
"Venture Southeast" has the meaning described in the Recitals.
"Venture Stock" means all capital stock issued by Venture
Holdings acquired or to be acquired by Xxxxx Venture, all in accordance
with the Venture Purchase Agreement Transaction, together with any and
all proceeds and products thereof.
"Venture Stock Purchase/Merger Agreement" means that certain
Agreement and Plan of Merger dated as of August29, 1997 by and among the
Borrower, Xxxxx Venture, Venture Holdings, the Parent, Venture Southeast,
Venture Midwest and the shareholders of Venture Holdings, as the same may
from time to time be amended, restated, supplemented or modified,
together with any and all exhibits and schedules thereto, amendments,
modifications, and supplements thereto, restatements thereof, and
substitutes therefor.
"Venture Stock Purchase/Merger Documents" means collectively
the Venture Stock Purchase Agreement and any and all other agreements,
documents or instruments, previously, now or hereafter executed and
delivered by Venture Holdings, Venture Southeast, Venture Midwest, Xxxxx
Venture, the Borrower, or any other Person in connection with the Venture
Stock Purchase/Merger Transaction, as the same may from time to time be
amended, restated, supplemented and modified.
"Venture Stock Purchase/Merger Transaction" means (i) the
acquisition of all issued and outstanding capital stock of Venture
Holdings by Xxxxx Venture through a merger, (ii) the merger of Venture
Holdings into Xxxxx Venture, (iii) the transfer to the Borrower of all
issued and outstanding stock of Venture Southeast and/or Venture Midwest
by Xxxxx Venture and/or Venture Holdings, as contemplated by the Venture
Stock Purchase/Merger Agreement, and (iv) the merger, consolidation,
dissolution or liquidation of Xxxxx Venture.
"Virginia Design" means Virginia Design Packaging Corp., a
corporation organized and existing under the laws of the Commonwealth of
Virginia, and its successors and assigns.
"Virginia Design NewCo" means Xxxxx Plastics Design
Corporation, a corporation organized and existing under the laws of the
State of Delaware, and its successors and assigns.
"Virginia Design Purchase Agreement" means that certain asset
purchase agreement dated as of May 13, 1997 by and among the Borrower,
Virginia Design NewCo, Virginia Design and the shareholders of Virginia
Design, as the same may from time to time be amended, restated,
supplemented or modified, together with any and all exhibits and
schedules thereto, amendments, modifications, and supplements thereto,
restatements thereof, and substitutes therefor.
"Virginia Design Purchase Agreement Documents" means
collectively the Virginia Design Purchase Agreement and any and all other
agreements, documents or instruments, previously, now or hereafter
executed and delivered by Virginia Design, Virginia Design NewCo, the
Borrower, or any other Person in connection with the Virginia Design
Purchase Agreement Transaction, as the same may from time to time be
amended, restated, supplemented and modified.
"Virginia Design Purchase Agreement Transaction" means the
asset purchase transaction contemplated by the Virginia Design Purchase
Agreement.
"Wholly Owned Subsidiary" means any domestic United States
Person all the shares of stock or other equity interests of all classes
of which (other than directors' qualifying shares) at the time are owned
directly or indirectly by the Borrower and/or by one or more Wholly Owned
Subsidiaries of the Borrower.
"Wire Transfer Procedures" means the rules, policies and
procedures adopted and implemented by the Agent and its Affiliates at any
time and from time to time with respect to electronic funds transfers,
including, without limitation, the Security Procedures, all as the same
may be amended, restated, supplemented, terminated or otherwise modified
at any time and from time to time by the Agent upon notice to the
Borrower in its reasonable discretion.
SECTION 1.2 ACCOUNTING TERMS AND OTHER DEFINITIONAL PROVISIONS.
Unless otherwise defined herein, as used in this Agreement and in
any certificate, report or other document made or delivered pursuant
hereto, accounting terms not otherwise defined herein, and accounting
terms only partly defined herein, to the extent not defined, shall have
the respective meanings given to them under GAAP. Unless otherwise
defined herein, all terms used herein which are defined by the Uniform
Commercial Code shall have the same meanings as assigned to them by the
Uniform Commercial Code unless and to the extent varied by this
Agreement. 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
article, section, subsection, schedule and exhibit references are
references to articles, sections or subsections of, or schedules or
exhibits to, as the case may be, this Agreement unless otherwise
specified. As used herein, the singular number shall include the plural,
the plural the singular and the use of the masculine, feminine or neuter
gender shall include all genders, as the context may require. Reference
to any one or more of the Financing Documents shall mean the same as the
foregoing may from time to time be amended, restated, substituted,
extended, renewed, supplemented or otherwise modified. Notwithstanding
the foregoing, the Agent and the Lenders agree that if GAAP at any time
changes and such changes have an affect on the computation of any of the
covenants contained in Section 6.1.13 of this Agreement, the Agent, the
Lenders and the Borrower will negotiate in good faith to revise any such
affected covenants so as to reverse the effect of such change in GAAP.
ARTICLE 2
THE CREDIT FACILITIES
SECTION 2.1 THE REVOLVING CREDIT FACILITY.
2.1.1 REVOLVING CREDIT FACILITY. Subject to and
upon the terms of this Agreement, the Lenders collectively, but
severally, establish a revolving credit facility in favor of the
Borrower. The aggregate of all advances under the Revolving Credit
Facility are sometimes referred to in this Agreement collectively as the
"Revolving Loan".
The amount set forth below opposite each Lender's name is herein
called such Lender's "Revolving Credit Committed Amount" and the total of
each Lender's Revolving Credit Committed Amount is herein called the
"Total Revolving Credit Committed Amount". The proportionate share set
forth below opposite each Lender's name is herein called such Lender's
"Revolving Credit Pro Rata Share":
Revolving Credit Revolving Credit
LENDER COMMITTED AMOUNT PRO RATA SHARE
Fleet $11,494,000 22.99%
GE Capital $19,253,000 38.51%
NationsBank $19,253,000 38.51%
Total Revolving
Credit Committed
Amount: $50,000,000 100%
Neither the Agent nor any of the Lenders shall be responsible for the
Revolving Credit Commitment of any other Lender, nor will the failure of
any Lender to perform its obligations under its Revolving Credit
Commitment in any way relieve any other Lender from performing its
obligations under its Revolving Credit Commitment.
During the Revolving Credit Commitment Period, the Borrower may
request advances under the Revolving Credit Facility in accordance with
the provisions of this Agreement; provided that after giving effect to
the Borrower's request:
(i) the outstanding principal balance of each Lender's Pro Rata
Share of the Revolving Loan and of the Letter of Credit Obligations would
not exceed the lesser of (a) such Lender's Pro Rata Share of the
Revolving Loan and of the Letter of Credit Obligations or (b) such
Lender's Pro Rata Share of the Borrowing Base; and,
(ii) the aggregate outstanding principal balance of the Revolving
Loan and all Letter of Credit Obligations would not exceed the lesser of
(a) the Total Revolving Credit Committed Amount or (b) the Borrowing
Base.
2.1.2 PROCEDURE FOR MAKING ADVANCES UNDER THE
REVOLVING LOAN.
The Borrower may borrow under the Revolving Credit Facility on any
Business Day. Advances under the Revolving Loan shall be deposited to a
demand deposit account of the Borrower with the Agent or shall be
otherwise applied as directed by the Borrower, which direction the Agent
may require to be in writing. Not later than 11:00 a.m. (Baltimore City
Time) on the date of the requested borrowing, the Borrower shall give the
Agent oral or written notice (a "Loan Notice") of the amount and (if
requested by the Agent) the purpose of the requested borrowing. Any oral
Loan Notice shall be confirmed in writing by the Borrower within three
(3) Business Days after the making of the requested advance under the
Revolving Loan. At any time within three (3) hours prior to funding, the
Borrower may revoke a Loan Notice; provided, that the Borrower shall pay
to each Lender, as the case may be, any amounts which may be due to such
Lender under Section 2.7.4 by reason of such Lender having taken action
in reliance on the Loan Notice. Upon receipt of any such Loan Notice,
the Agent shall promptly notify each Lender of the amount of each advance
to be made by such Lender on the requested borrowing date under such
Lender's Revolving Credit Commitment.
Not later than 1:00 p.m. (Baltimore City Time) on each requested
borrowing date for the making of advances under the Revolving Loan, each
Lender shall, if it has received timely notice from the Agent of the
Borrower's request for such advances, make available to the Agent, in
funds immediately available to the Agent at the Agent's office set forth
in Section 9.1, such Lender's Pro Rata Share of the advances to be made
on such date.
In addition, the Borrower hereby irrevocably authorizes the Lenders
at any time and from time to time, without further request from or notice
to the Borrower, to make advances under the Revolving Loan which the
Agent, in its sole and absolute discretion, deems necessary or
appropriate to protect the interests of the Agent and/or any or all of
the Lenders under this Agreement, including, without limitation, advances
under the Revolving Loan made to cover debit balances in the Revolving
Loan Account, to pay principal of, and/or interest on, any Loan,
including any Term Loan, the Obligations (including any Letter of Credit
Obligations and any Bond Letter of Credit Obligations), and/or
Enforcement Costs, prior to, on, or after the termination of other
advances under this Agreement, regardless of whether the outstanding
principal amount of the Revolving Loan which the Lenders may advance
hereunder exceeds the Total Revolving Credit Committed Amount. The Agent
acknowledges and agrees that (i) the obligation of the Lenders to make
advances to or for the account of the Borrower pursuant to this paragraph
shall be subject to the provisions of Section 8.14 of this Agreement and
(ii) no Lender shall have any obligation or commitment to make any
advance to or for the account of the Borrower under the Revolving Loan
(including any obligation or commitment to reimburse the Agent for
advances made by the Agent to or for the account of the Borrower under
this paragraph, except for advances made to cover Enforcement Costs for
which the Agent has not been duly reimbursed by the Borrower) unless
otherwise agreed in writing by such Lender, if and to the extent such
Lender's Pro Rata Share of the Revolving Loan and of the Letter of Credit
Obligations would exceed, with the making of such advance or
reimbursement, such Lender's Revolving Credit Committed Amount. Each
Lender, however, shall continue to be obligated to reimburse the Agent
for any and all Enforcement Costs incurred by the Agent in accordance
with the provisions of this Agreement if and to the extent the Borrower
fails to reimburse the Agent for such Enforcement Costs.
2.1.3 BORROWING BASE. As used in this Agreement, the
term "Borrowing Base" means at any time, an amount equal to the aggregate
of (a) eighty-five percent (85%) of the amount of Eligible Receivables,
plus (b) the lesser of (x) sixty-five percent (65%) of the amount of
Eligible Inventory or (y) Twenty-five Million Dollars ($25,000,000).
The Borrowing Base shall be computed based on the Borrowing Base
Report most recently delivered to and accepted by the Agent in its
reasonable discretion. In the event the Borrower fails to furnish a
Borrowing Base Report required by Section 2.1.4 below, the Agent may, in
its reasonable discretion exercised from time to time and without
limiting other rights and remedies under this Agreement, direct the
Lenders to suspend the making of or limit advances under the Revolving
Loan. The Borrowing Base shall be reduced by all amounts credited to the
Collateral Account (if and to the extent a Collateral Account is required
by the terms of this Agreement) since the date of the most recent
Borrowing Base Report and by the amount of any Account or any Inventory
which was included in the Borrowing Base, but which the Agent determines
fails to meet the respective criteria applicable from time to time for
Eligible Receivables or Eligible Inventory.
If at any time the total of the aggregate principal amount of the
Revolving Loan and Outstanding Letter of Credit Obligations exceeds the
Borrowing Base, a borrowing base deficiency ("Borrowing Base Deficiency")
shall exist. Each time a Borrowing Base Deficiency exists, the Borrower,
at the sole and absolute discretion of the Agent exercised from time to
time, shall pay the Borrowing Base Deficiency ON DEMAND to the Agent for
the benefit of the Lenders from time to time.
Without implying any limitation on the Agent's discretion with
respect to the Borrowing Base, the criteria for Eligible Receivables and
for Eligible Inventory contained in the respective definitions of
Eligible Receivables and of Eligible Inventory are in part based upon the
business operations of the Borrower and the Subsidiary Guarantors
existing on or about the date of this Agreement and upon information and
records furnished to the Agent by the Borrower and the Subsidiary
Guarantors. If at any time or from time to time hereafter, the business
operations of the Borrower and/or any of the Subsidiary Guarantors change
in any material respect or such information and records furnished to the
Agent are materially incorrect or misleading, the Agent in its reasonable
discretion, may at any time and from time to time during the duration of
this Agreement change such criteria, add new criteria, make existing
criteria less onerous, or remove existing criteria; provided, however,
that any such change in, or addition or removal of criteria shall be
effective only after notice thereof from the Agent to the Borrower.
Except in emergency circumstances, the Agent agrees to use its
commercially reasonable efforts to consult with the Borrower prior to the
effective date of any addition to, or change in, eligibility criteria,
but that the Agent shall have no obligation or duty to reach an agreement
with the Borrower as a condition of, or prior to, imposing any changes
in, or additions to, eligibility criteria. The Agent shall communicate
such changed or additional criteria to the Borrower from time to time
either orally or in writing.
2.1.4 BORROWING BASE REPORT. The Borrower will furnish to
the Agent no less frequently than monthly, as soon as available, but in
any event within twenty (20) days of the end of each fiscal month, and,
upon the occurrence of an Event of Default or as otherwise provided in
this Section 2.1.4, at such other times as may be requested by the Agent
a report of the Borrowing Base in the form attached hereto as Exhibit A
(each a "Borrowing Base Report"; collectively, the "Borrowing Base
Reports") in the form required from time to time by the Agent,
appropriately completed and duly signed. The Borrowing Base Report shall
contain the amount and payments on the Accounts, the value of Inventory,
and the calculations of the Borrowing Base, all in such detail, and
accompanied by such supporting and other information, as the Agent may
from time to time reasonably request. Upon the Agent's request and upon
the creation of any Accounts, the Borrower will provide the Agent with
(a) confirmatory assignment schedules; (b) copies of Account Debtor
invoices; (c) evidence of shipment or delivery; and (d) such further
schedules, documents and/or information regarding the Accounts and the
Inventory as the Agent may reasonably require. The items to be provided
under this subsection shall be in form reasonably satisfactory to the
Agent, and certified as true and correct by a Responsible Officer, and
delivered to the Agent from time to time solely for the Agent's
convenience in maintaining records of the Collateral. The Borrower's
failure to deliver any such items to the Agent shall not affect,
terminate, modify, or otherwise limit the Liens of the Agent and the
Lenders in the Collateral. Notwithstanding the foregoing, the Borrower
acknowledges and agrees that the Agent, at its option, may require that
the Borrower furnish to the Agent weekly and, if requested by the Agent,
daily Borrowing Base Reports if any one of the following events occur (i)
the Borrower's and Subsidiary Guarantors' collective aggregate
availability under the Revolving Loan is at any times less than or equal
to Fifteen Million Dollars ($15,000,000), (ii) the Borrower and the
Subsidiary Guarantors, on a consolidated basis, incur three (3)
consecutive months of net operating losses, or (iii) the occurrence of an
Event of Default (each of the aforementioned events are herein called a
"Borrowing Base Trigger Event"). The Agent agrees that it shall not be
entitled to require that the Borrower furnish weekly or daily Borrowing
Base Reports solely as the result of the occurrence of a Borrowing Base
Trigger Event, if the Agent fails to so notify the Borrower within ninety
(90) days of the date that the Borrower has cured the Borrowing Base
Trigger Event to the reasonable satisfaction of the Agent. The foregoing
sentence, however, shall not prevent the Agent from later requiring more
frequent Borrowing Base Reports following the occurrence of any
subsequent Borrowing Base Trigger Event; provided, that the Agent so
notifies the Borrower within ninety (90) days of date that the Borrower
has cured the Borrowing Base Trigger Event to the reasonable satisfaction
of the Agent.
2.1.5 REVOLVING CREDIT NOTES. The obligation of the
Borrower to pay each Lender's Pro Rata Share of the Revolving Loan, with
interest, shall be evidenced by a series of promissory notes (as from
time to time extended, amended, restated, supplemented or otherwise
modified, collectively the "Revolving Credit Notes" and individually a
"Revolving Credit Note"). Each Lender's Revolving Credit Note shall be
dated as of the date of this Agreement, shall be payable to the order of
such Lender at the times provided in the Revolving Credit Note, and shall
be in the principal amount of such Lender's Revolving Credit Committed
Amount. The Borrower acknowledges and agrees that, if the outstanding
principal balance of the Revolving Loan outstanding from time to time
exceeds the aggregate stated amount of the Revolving Credit Notes, the
excess shall bear interest at the rates provided from time to time for
advances under Revolving Loan evidenced by the Revolving Credit Notes and
shall be payable, with accrued interest, ON DEMAND. The Revolving Credit
Notes shall not operate as a novation of any of the Obligations or
nullify, discharge, or release any such Obligations or the continuing
contractual relationship of the parties hereto in accordance with the
provisions of this Agreement.
2.1.6 MANDATORY PREPAYMENTS OF REVOLVING LOAN.
Subject to the provisions of Section 2.7.4 (Indemnity) and in addition to
any mandatory prepayment required by the provisions of Section 2.2.3
(Term Loan Mandatory Prepayments), upon the request of the Agent pursuant
to Section 2.1.3 (Borrowing Base), the Borrower shall make mandatory
prepayments (each a "Revolving Loan Mandatory Prepayment" and
collectively, the "Revolving Loan Mandatory Prepayments") of the
Revolving Loan at any time and from time to time in order to cover any
Borrowing Base Deficiency.
2.1.7 OPTIONAL PREPAYMENTS OF REVOLVING LOAN. Subject
to the provisions of Section 2.7.4 (Indemnity), the Borrower shall have
the option at any time and from time to time prepay (each a "Revolving
Loan Optional Prepayment" and collectively the "Revolving Loan Optional
Prepayments") the Revolving Loan, in whole or in part without premium or
penalty. Revolving Loan Optional Prepayments shall be made following a
timely and proper written notice to the Agent with respect thereto
specifying the date and amount of any intended Revolving Loan Optional
Prepayment. The amount to be prepaid shall be paid by the Borrower to
the Agent on the date specified for such prepayment. Any amounts repaid
or prepaid may be readvanced and reborrowed subject to the provisions of
this Agreement.
2.1.8 THE COLLATERAL ACCOUNT. Upon demand by the Agent
following a Borrowing Base Trigger Event, the Borrower will deposit, or
cause to be deposited, all Items of Payment to a bank account designated
by the Agent and from which the Agent alone has power of access and
withdrawal (the "Collateral Account"). Each deposit shall be made not
later than the next Business Day after the date of receipt of the Items
of Payment. The Items of Payment shall be deposited in precisely the
form received, except for the endorsements of the Borrower where
necessary to permit the collection of any such Items of Payment, which
endorsement the Borrower hereby agree to make. In the event the Borrower
fails to do so, the Borrower hereby authorizes the Agent to make the
endorsement in the name of the Borrower. Prior to such a deposit, the
Borrower will not commingle any Items of Payment with the Borrower's
other funds or property, but will hold them separate and apart in trust
and for the account of the Agent for the benefit of the Lenders ratably
and the Agent. The Agent agrees that it shall not demand that the
Borrower deposit or cause to be deposited all Items of Deposit to the
Collateral Account at any time prior to the occurrence of a Borrowing
Base Trigger Event. Once the Agent has so made demand on the Borrower,
unless otherwise agreed by the Agent in writing, the Borrower shall
continue to so deposit or cause to be deposited all Items of Payment to
the Collateral Account notwithstanding that subsequent to such demand the
Borrowing Base Trigger Event has been cured, waived, otherwise remedied
or is no longer applicable.
In addition, if the Agent has so made demand, if so directed by the
Agent, the Borrower shall direct the mailing of all Items of Payment from
its Account Debtors to one or more post-office boxes designated by the
Agent, or to such other additional or replacement post-office boxes
pursuant to the request of the Agent from time to time (collectively, the
"Lockbox"). The Agent shall have unrestricted and exclusive access to
the Lockbox.
Subject to the provisions of this Section, the Borrower hereby
authorizes the Agent to inspect all Items of Payment, and deposit such
Items of Payment in the Collateral Account. The Agent reserves the
right, exercised in its reasonable discretion from time to time, to
provide to the Collateral Account credit prior to final collection of an
Item of Payment and to disallow credit for any Item of Payment prior to
final collection which is reasonably unsatisfactory to the Agent. In the
event Items of Payment are returned to the Agent for any reason
whatsoever, the Agent may, in the exercise of its reasonable discretion
from time to time, forward such Items of Payment a second time. Any
returned Items of Payment shall be charged back to the Collateral
Account, the Revolving Loan Account, or other account, as appropriate.
The Agent will apply the whole or any part of the collected funds
credited to the Collateral Account against the Revolving Loan (or with
respect to Items for Payments which are not proceeds of Accounts or
Inventory or after a Default or an Event of Default, against any of the
Obligations) or credit such collected funds to a depository account of
the Borrower with the Agent, the order and method of such application to
be in the sole discretion of the Agent. Notwithstanding the foregoing,
the Agent agrees that prior to the occurrence of an Event of Default, the
Agent shall use its best efforts to apply collected funds credited to the
Collateral Account to the Obligations so as to avoid or minimize any
amounts which would be due under Section 2.7.4 by reason of any such
application.
Notwithstanding the foregoing, the Agent agrees that it shall not be
entitled to require establishment of the Collateral Account and/or the
Lockbox as the result of the occurrence of a Borrowing Base Trigger
Event, if the Agent fails to so notify the Borrower within ninety (90)
days of the date that the Borrower has cured the Borrowing Base Trigger
Event to the reasonable satisfaction of the Agent. The foregoing
sentence, however, shall not prevent the Agent from later requiring
establishment of the Collateral Account and/or a Lockbox following the
occurrence of any subsequent Borrowing Base Trigger Event; provided, that
the Agent so notifies the Borrower within ninety (90) days of the date
that the Borrower has cured the Borrowing Base Trigger Event to the
reasonable satisfaction of the Agent.
2.1.9 REVOLVING LOAN ACCOUNT. The Agent will
establish and maintain a loan account on its books (the "Revolving Loan
Account") to which the Agent will (a) DEBIT (i) the principal amount of
each advance under the Revolving Loan made by the Lenders hereunder as of
the date made, (ii) the amount of any interest accrued on the Revolving
Loan as and when due, and (iii) any other amounts due and payable by the
Borrower to the Agent and/or the Lenders from time to time under the
provisions of this Agreement in connection with the Revolving Loan,
including, without limitation, Enforcement Costs, Fees, late charges, and
service, collection and audit fees, as and when due and payable, and (b)
CREDIT all payments made by the Borrower to the Agent on account of the
Revolving Loan as of the date made including, without limitation, funds
credited to the Revolving Loan Account from the Collateral Account. The
Agent may debit the Revolving Loan Account for the amount of any Item of
Payment which is returned to the Agent unpaid. All credit entries to the
Revolving Loan Account are conditional and shall be readjusted as of the
date made if final and indefeasible payment is not received by the Agent
in cash or solvent credits. The Borrower hereby promises to pay to the
order of the Agent for the ratable benefit of the Lenders, on the
Revolving Credit Termination Date, an amount equal to the excess, if any,
of all debit entries over all credit entries recorded in the Revolving
Loan Account under the provisions of this Agreement. Any and all
periodic or other statements or reconciliations, and the information
contained in those statements or reconciliations, of the Revolving Loan
Account shall be presumed conclusively to be correct, and shall
constitute an account stated between the Agent, the Lenders and the
Borrower unless the Agent receives specific written objection thereto
from the Borrower and/or any Lender within thirty (30) Business Days
after such statement or reconciliation shall have been sent by the Agent.
Any and all periodic or other statements or reconciliations, and the
information contained in those statements or reconciliations, of the
Revolving Loan Account shall be final, binding and conclusive upon the
Borrower in all respects, absent manifest error, unless the Agent
receives specific written objection thereto from the Borrower within
thirty (30) Business Days after such statement or reconciliation shall
have been sent by the Agent.
2.1.10 REVOLVING CREDIT UNUSED LINE FEE. The Borrower
shall pay to the Agent for the ratable benefit of the Lenders a quarterly
Revolving Credit Facility fee (collectively, the "Revolving Credit Unused
Line Fees" and individually, a "Revolving Credit Unused Line Fee") in an
amount equal to thirty (30) basis points per annum (calculated on the
basis of actual number of days elapsed in a year of 360 days) and
calculated on average daily unused and undisbursed portion of the Total
Revolving Credit Committed Amount in effect from time to time accruing
during each quarterly period. The accrued and unpaid Revolving Credit
Unused Line Fee shall be paid by the Borrower to the Agent on the first
day of each quarter, in arrears, commencing on the first such date
following the date hereof, and on the Revolving Credit Termination Date.
2.1.11 EARLY TERMINATION FEE. In the event of the
termination of the Revolving Credit Commitments, the Borrower shall pay a
fee to the Agent for the benefit of the Lenders ratably (the "Early
Termination Fee"), equal to following amount at the following times:
PERIOD EARLY TERMINATION FEE
Closing Date, through and 2% of the Total Revolving
including, day preceding Committed Amount
the first anniversary date
of the Closing Date
First anniversary date 1% of the Total Revolving
of the Closing Date, Credit Committed Amount
through and including,
the day preceding the
second anniversary date
of the Closing Date
Second anniversary date 1/2% of the Total Revolving
of the Closing Date, Credit Committed Amount
through and including,
the day preceding the
third anniversary date
of the Closing Date
In the event of a partial reduction of the Revolving Credit
Commitments, the Borrower shall pay to the Agent for the benefit of the
Lenders ratably, an Early Termination Fee equal to following amount at
the following times:
PERIOD EARLY TERMINATION FEE
Closing Date, through and 2% of the amount of the
including, day preceding Revolving Credit Optional
the first anniversary date Reduction
of the Closing Date
First anniversary date 1% of the amount of the
of the Closing Date, Revolving Credit Optional
through and including, Reduction
the day preceding the
second anniversary date
of the Closing Date
Second anniversary date 1/2% of the amount of the
of the Closing Date, Revolving Credit Optional
through and including, Reduction
the day preceding the
third anniversary date
In the event the Term Loans are refinanced or replaced with the
proceeds of Indebtedness for Borrowed Money, in whole or in part, the
Borrower shall pay to the Agent for the benefit of the Lenders ratably,
an Early Termination Fee equal to following amount at the following
times:
PERIOD EARLY TERMINATION FEE
Closing Date, through and 2% of the amount prepaid
including, day preceding
the first anniversary date
of the Closing Date
First anniversary date 1% of the amount prepaid
of the Closing Date,
through and including,
the day preceding the
second anniversary date
of the Closing Date
Second anniversary date 1/2% of the amount prepaid
of the Closing Date,
through and including,
the day preceding the
third anniversary date
Notwithstanding the foregoing, the Borrower shall not be required to
pay the Early Termination Fee in connection with such a refinancing or
replacement of the Term Loans and the termination or partial reduction of
the Revolving Credit Commitments from the proceeds of a public offering
of Securities by the Borrower or the Parent. Nothing contained in this
Section shall be deemed a waiver by the Agent or any Lender of any
Default or Event of Default which results from any such public offering
of Securities by the Borrower and/or the closing of a purchase,
acquisition or investment otherwise prohibited by the provisions of this
Agreement, which does not result in a prepayment of all Obligations and a
termination of all Letters of Credit, all Bond Letters of Credit and
Commitments.
In addition, if the Borrower requests that the Requisite Lenders
consent to the purchase or acquisition of, or investment in, any Person
which would not otherwise be permitted by the provisions of this
Agreement, and the Requisite Lenders refuse to agree and consent to any
such purchase, acquisition or investment, the Borrower may, at its
option, prepay all of the Obligations in full and terminate all of the
Commitments and shall have no obligation to pay an Early Termination Fee
in connection with any such prepayment and termination; provided, that
(i) all Letters of Credit and all Bond Letters of Credit are terminated
or otherwise secured by the issuance of one or more back-to-back letters
of credit from an issuer and containing terms reasonably acceptable to
the Agent, (ii) all Obligations are paid in full, (iii) all Commitments
are terminated, and (iv) to the extent the Borrower intends to finance
such purchase, acquisition or investment, any one of the Lenders have not
agreed to provide such financing after having been first offered the
opportunity by the Borrower to provide such financing substantially on
the same terms and conditions as are actually proposed to the Borrower
from another lender or financial institution. A Lender shall be deemed
to have so declined to provide the requested financing for the proposed
acquisition, purchase or other investment unless such Lender has
otherwise notified the Borrower in writing within fifteen (15) days of
its receipt of all proposed material terms and conditions of the proposed
acquisition, purchase or investment and any requested financing that such
Lender wishes to participate in such financing. The Lenders understand
and agree that the Borrower shall be required only to furnish to the
Agent and the Lenders a term sheet summarizing the proposed terms for
such financing to be prepared by the Borrower based on actual terms
proposed by such other lender or financial institution, and that neither
the Borrower nor any such other lender or financial institution shall
have any obligation to furnish to the Agent or the Lenders copies of
actual commitments, proposals or correspondence from such other lender or
financial institution or independent verification of any such proposed
terms.
Payment of all or any portion of the Obligations relating to the
Revolving Loan and/or the Term Loans and/or termination or reduction of
any of the Commitments, in whole or in part, by or on behalf of the
Borrower, by court order or otherwise, following and as a result of the
institution of any bankruptcy proceeding by or against the Borrower,
shall be deemed to be a prepayment of the Revolving Loan and the Term
Loans, and/or termination or reduction of the Commitments, as
appropriate, subject to payment of the Early Termination Fee provided in
this subsection if any or all of the Obligations are actually paid and/or
any or all of the Commitments are terminated or reduced at any time
during the periods set forth above. All Early Termination Fees shall be
paid to the Agent for the ratable benefit of the Lenders.
2.1.12 OPTIONAL REDUCTION OF REVOLVING CREDIT COMMITTED
AMOUNT.
Subject to the provisions of Section 2.1.11 (Early Termination Fee),
the Borrower shall have the right to reduce permanently (each a
"Revolving Credit Optional Reduction" and collectively the "Revolving
Credit Optional Reductions") the Total Revolving Credit Committed Amount
in effect from time to time in the amount of any integral multiple of
Five Hundred Thousand Dollars ($500,000), upon at least five (5)
Business Days prior written notice to the Agent specifying the date and
amount of such Revolving Credit Optional Reduction; provided, that no
Revolving Credit Optional Reduction shall be permitted if, after giving
effect thereto and to any Revolving Loan Optional Prepayment made on the
effective date thereof, the then outstanding principal amount of the
Revolving Loan and Outstanding Letter of Credit Obligations exceeds the
Total Revolving Credit Committed Amount as so reduced. Such notice shall
be irrevocable as to the amount and date of such Revolving Credit
Optional Reduction. After each such Revolving Credit Optional Reduction,
the Revolving Credit Unused Line Fee provided for in Section 2.1.10
hereof and the Early Termination Fee, if any, provided for in Section
2.1.11 shall be calculated with respect to the Revolving Credit Committed
Amount as so reduced. Any Revolving Credit Optional Reduction shall be
made to each Lender's Revolving Credit Commitment in accordance with its
Pro Rata Share of such Revolving Credit Optional Reduction.
SECTION 2.2 THE TERM LOAN A FACILITY.
2.2.1 TERM LOAN A COMMITMENTS. Subject to and upon
the terms of this Agreement, each Lender severally agrees to make a loan
(each a "Term Loan A"; and collectively, the "Term Loans A") to the
Borrower in the principal amount set forth below opposite such Lender's
name (herein called such Lender's "Term Loan A Committed Amount"). The
total of each Lender's Term Loan A Committed Amount is herein called the
"Total Term Loan A Committed Amount". The proportionate share set forth
below opposite each Lender's name is herein called such Lender's "Term
Loan A Pro Rata Share":
Term Loan A Term Loan A
LENDER COMMITTED AMOUNT PRO RATA SHARE
Fleet $ 7,126,000 22.99%
GE Capital $11,937,000 38.51%
NationsBank $11,937,000 38.51%
TOTAL TERM LOAN A
COMMITTED AMOUNT: $31,000,000 100%
The obligation of each Lender to make a Term Loan A is several and
is limited to its Term Loan A Committed Amount, and such obligation of
each Lender is herein called its "Term Loan A Commitment". The Term Loan
A Commitment of each of the Lenders are herein collectively referred to
as the "Term Loan A Commitments". The Agent shall not be responsible for
the Term Loan A Commitment of any Lender; and similarly, none of the
Lenders shall be responsible for the Term Loan A Commitment of any of the
other Lenders; the failure, however, of any Lender to perform its Term
Loan A Commitment shall not relieve any of the other Lenders from the
performance of their respective Term Loan A Commitments.
Pursuant to the Borrower's request, the Lenders reduced the
outstanding principal amount of the Term Loans A in accordance with the
provisions of this Agreement. As set forth in the Original Credit
Agreement, the aggregate principal balance of the Term Loans A (referred
to the "Term Loans" in the Original Credit Agreement) was $30,299,000.
The Borrower acknowledges and agrees that a portion of the proceeds of
Term Loan B or the Revolving Loans are to be used to repay and reduce the
outstanding principal balance of the Term Loans A such that as of the
date of this Agreement, the unpaid aggregate principal balance of the
Term Loans A is $27,480,000.
Up to and including October 31, 1997, the Borrower shall be entitled
to obtain additional advances under Term Loans A (collectively, "Term
Loan A Additional Advances") provided, however, that the aggregate amount
of the additional advances shall not exceed the lesser of $3,520,000 or
the aggregate of (i) seventy-five (75)% of the increase to the
determination of the fair market value of the real property covered by
the Deed of Trust -Xxxxxxxxx above the fair market value determined by
the appraisal furnished in connection with the closing of the Original
Credit Agreement, plus (ii) eighty percent (80%) of the orderly
liquidation value of the Equipment of Venture Southeast and Venture
Southeast, such values being determined by the Agent after the date of
this Agreement pursuant appraisals which shall be performed by one or
more appraisers satisfactory in all respects to the Agent and shall be in
such form and content as may be required by the Agent and received by the
Agent on or before October 1, 1997.
2.2.2 AMORTIZATION OF TERM LOANS A; THE TERM LOAN
A NOTES.
The unpaid principal balance of the Term Loans A shall be due
and payable in quarterly installments of principal on each Installment
Payment Date, each in the following amounts at the following times:
DUE DATE AMOUNT
February 1, 1998 $ 288,000
May 1, 1998 $ 288,000
August 1, 1998 $ 288,000
November 1, 1998 $ 288,000
February 1, 1999 $ 731,000
May 1, 1999 $ 731,000
August 1, 1999 $ 731,000
November 1, 1999 $ 731,000
February 1, 2000 $ 1,175,000
May 1, 2000 $ 1,175,000
August 1, 2000 $ 1,175,000
November 1, 2000 $ 1,175,000
February 1, 2001 $ 1,618,000
May 1, 2001 $ 1,618,000
August 1, 2001 $ 1,618,000
November 1, 2001 $ 1,618,000
January 21, 2002 $12,232,000
PROVIDED, HOWEVER, that each of the payments above shall be increased on
a pro rata basis by the aggregate amount of the Term Loan A Additional
Advances.
Unless sooner paid, the unpaid principal balance of the Term
Loans A, together with interest accrued and unpaid thereon, shall be due
and payable in full on the Revolving Credit Termination Date.
The obligation of the Borrower to pay the Term Loans A, with
interest, shall be evidenced by a series of amended and restated
promissory notes (each as from time to time extended, amended, restated,
supplemented or otherwise modified, a "Term Loan A Note" and
collectively, the "Term Loan A Notes"). Each Term Loan A Note shall be
dated as the date hereof and shall be payable to the order of a Lender at
the times provided in the Term Loan A Note, and shall be in the principal
amount of such Lender's Term Loan A Committed Amount.
2.2.3 MANDATORY PREPAYMENTS OF TERM LOANS A.
Subject to the provisions of Section 2.7.4 (Indemnity), the Borrower
shall make the following mandatory prepayments (each a "Term Loan A
Mandatory Prepayment" and collectively the "Term Loan A Mandatory
Prepayments") of the Term Loans A to the Agent for the ratable benefit of
the Lenders:
(a) To the extent the Net Proceeds of any Asset
Disposition (including the sale and issuance of any Securities, but
excluding (i) the sale or transfer of all Securities issued by Venture
Southeast and/or Venture Southwest to the Borrower and (ii) the merger,
liquidation, consolidation or dissolution of Xxxxx Venture, as
contemplated by the Venture Stock Purchaser/Merger Transaction) by the
Borrower or any Subsidiary Guarantor cause the aggregate of all such
Asset Dispositions in any fiscal year to exceed Two Hundred Fifty
Thousand Dollars ($250,000), all of such excess shall be paid to the
Agent as a Term Loan A Mandatory Prepayment, or if the Term Loans A have
been paid in full shall be paid to the Agent as a Term Loan B Mandatory
Prepayment, or if the Term Loans B have been paid in full shall be paid
to the Agent as a Revolving Loan Mandatory Prepayment. Notwithstanding
the foregoing, the Borrower shall not be required to make a Term Loan A
Mandatory Prepayment in connection with any public, private or Rule
144(a) offering of Securities which does not generate any proceeds (other
than nominal proceeds), including, for example, the issuance or exercise
of warrants with registration rights or the issuance of a resale
prospectus for any existing shares of capital stock. In addition, the
Borrower shall not be required to make a Term Loan A Mandatory Prepayment
to the extent of any non-cash Net Proceeds which are Indebtedness for
Borrowed Money received by the Borrower or any Subsidiary Guarantor in
payment of the purchase price of an Asset which is the subject of a
Permitted Asset Disposition; provided that, upon the Agent's demand, the
Borrower and/or the Subsidiary Guarantor, as the case may, shall take all
such actions as shall be reasonably requested by the Agent to grant to
the Agent for its benefit and the ratable benefit of the Lenders a
perfected Lien on any such Indebtedness for Borrowed Money and provided
further that the principal amount of all such Indebtedness for Borrowed
Money, together with the Indebtedness for Borrowed Money referenced in
Section 2.3.3(a) below, shall not exceed at any time in the aggregate
Five Hundred Thousand Dollars ($500,000).
(b) Immediately upon closing and consummation of any
public or private offering of Indebtedness by the Borrower or any
Subsidiary Guarantor (excluding (i) the sale or transfer of all
Securities issued by Venture Southeast and/or Venture Southwest to the
Borrower and (ii) the merger, liquidation, consolidation or dissolution
of Xxxxx Venture, as contemplated by the Venture Stock Purchaser/Merger
Transaction), except for Indebtedness for Borrowed Money permitted by
Section 6.2.4, other than subsection (d) of Section 6.2.4, the Borrower
shall make a Term Loan A Mandatory Prepayment in an amount equal to one
hundred percent (100%) of the Net Proceeds of such public or private
offering; provided that a Term Loan A Mandatory Prepayment shall not be
required as the result of the issuance of Indebtedness by the Borrower or
any Subsidiary Guarantor, if (i) such Indebtedness is issued pursuant to
and is permitted by subsection (d) of Section 6.2.4 and such Indebtedness
constitutes a "Refinancing Indebtedness" as defined in subsection (m) of
Section 6.2.4, (ii) if the Net Proceeds of such Indebtedness are used, in
whole, to finance a Permitted Acquisition or Capital Expenditures as and
to the extent permitted by the provisions of this Agreement; and (iii)
the aggregate amount of Indebtedness under subsections (i) and (ii) of
this subsection (b) and the amount of Indebtedness under subsections (i)
and (ii) of Section 2.3.3(b), do not exceed Twenty Million Dollars
($20,000,000).
The Borrower shall pay to the Agent on the date of each required
Term Loan A Mandatory Prepayment accrued interest to such date on the
amount prepaid. Each partial Term Loan A Mandatory Prepayment shall be
applied to all of the remaining principal installments due on account of
the Term Loans A on a pro rata basis. Notwithstanding anything to the
contrary contained herein, the Borrower shall not be required to pay an
Early Termination Fee as the result of a Term Loan A Mandatory
Prepayment.
2.2.4 OPTIONAL PREPAYMENTS OF TERM LOANS A. Subject
to the provisions of Section 2.7.4 (Indemnity), the Borrower may, at its
option, at any time and from time to time, prepay (each a "Term Loan A
Optional Prepayment" and collectively the "Term Loan A Optional
Prepayments") the Term Loans A, in whole or in part, upon five (5)
Business Days prior written notice, specifying the date and amount of
prepayment. The amount to be so prepaid, together with interest accrued
thereon to date of prepayment if the amount is intended as a prepayment
of the Term Loans A in whole, shall be paid by the Borrower to the Agent
for the ratable benefit of the Lenders on the date specified for such
prepayment. Partial Term Loan A Optional Prepayments shall be applied to
all of the remaining principal installments due on account of the Term
Loans A on a pro rata basis.
SECTION 2.3 TERM LOAN B FACILITY.
2.3.1 TERM LOAN B COMMITMENTS. Subject to and upon
the terms of this Agreement, each Lender severally agrees to make a loan
(each a "Term Loan B"; and collectively, the "Term Loans B") to the
Borrower in the principal amount set forth below opposite such Lender's
name (herein called such Lender's "Term Loan B Committed Amount"). The
total of each Lender's Term Loan B Committed Amount is herein called the
"Total Term Loan B Committed Amount". The proportionate share set forth
below opposite each Lender's name is herein called such Lender's "Term
Loan B Pro Rata Share":
Term Loan B Term Loan B
LENDER COMMITTED AMOUNT PRO RATA SHARE
Fleet $ 6,896,000 22.99%
GE Capital $11,552,000 38.51%
NationsBank $11,552,000 38.51%
TOTAL LOAN B
COMMITTED AMOUNT: $30,000,000 100%
The obligation of each Lender to make a Term Loan B is several and
is limited to its Term Loan B Committed Amount, and such obligation of
each Lender is herein called its "Term Loan B Commitment". The Term Loan
B Commitment of each of the Lenders are herein collectively referred to
as the "Term Loan B Commitments". The Agent shall not be responsible for
the Term Loan B Commitment of any Lender; and similarly, none of the
Lenders shall be responsible for the Term Loan B Commitment of any of the
other Lenders; the failure, however, of any Lender to perform its Term
Loan B Commitment shall not relieve any of the other Lenders from the
performance of their respective Term Loan B Commitments.
2.3.2 AMORTIZATION OF TERM LOANS B; THE TERM LOAN
B NOTES.
The unpaid principal balance of the Term Loans B shall be due
and payable in quarterly installments of principal on each Installment
Payment Date, each in the following amounts at the following times:
DUE DATE AMOUNT
December 31, 1997 $1,000,000
April 1, 1998 $ 500,000
July 1, 1998 $1,000,000
October 1, 1998 $2,500,000
January 1, 1999 $2,500,000
April 1, 1999 $2,500,000
July 1, 1999 $2,500,000
October 1, 1999 $2,500,000
January 1, 1999 $2,500,000
April 1, 2000 $2,500,000
July 1, 2000 $2,500,000
October 1, 2000 $2,500,000
January 1, 2000 $2,500,000
April 1, 2001 $2,500,000
Unless sooner paid, the unpaid principal balance of the Term
Loans B, together with interest accrued and unpaid thereon, shall be due
and payable in full on March 1, 2001.
The obligation of the Borrower to pay the Term Loans B, with
interest, shall be evidenced by a series of promissory notes (each as
from time to time extended, amended, restated, supplemented or otherwise
modified, the "Term Loan B Note" and collectively, the "Term Loan B
Notes"). Each Term Loan B Note shall be dated as the date hereof and
shall be payable to the order of a Lender at the times provided in the
Term Loan B Note, and shall be in the principal amount of such Lender's
Term Loan B Committed Amount.
2.3.3 MANDATORY PREPAYMENTS OF TERM LOAN B. Subject to
the provisions of Section 2.7.4 (Indemnity), the Borrower shall make
mandatory prepayments (each a "Term Loan B Mandatory Prepayment" and
collectively the "Term Loan B Mandatory Prepayments") of the Term Loans B
to the Agent for the ratable benefit of the Lenders annually. Each Term
Loan B Mandatory Prepayment shall be in the amount of the Excess Cash
Flow for the then preceding fiscal year and shall be payable on the date
the Borrower shall furnish to the Agent the annual financial statements
referred to in Section 6.1.1 of this Agreement. If, however, the
Borrower fails to furnish such financial statements in any given year as
and when required, the Borrower shall be required to pay the Term Loan B
Mandatory Prepayment payable during such calendar year on the date which
is ninety (90) days after the close of the Borrower's then preceding
fiscal year. The Borrower shall pay to the Agent on the date of each
required Term Loan B Mandatory Prepayment accrued interest to such date
on the amount prepaid. Each partial Term Loan B Mandatory Prepayment
shall be applied as follows: (i) fifty percent (50%) to principal against
the principal installments of the Term Loans B in the inverse order of
their maturities and (ii) fifty percent (50%) to all of the remaining
principal installments due on account of the Term Loans B on a pro rata
basis. Notwithstanding anything to the contrary contained herein, the
Borrower shall not be required to pay an Early Termination Fee as the
result of a Term Loan B Mandatory Prepayment.
2.3.4 OPTIONAL PREPAYMENTS OF TERM LOANS B. Subject
to the provisions of Section 2.7.4 (Indemnity), the Borrower may, at its
option, at any time and from time to time, prepay (each a "Term Loan B
Optional Prepayment" and collectively the "Term Loan B Optional
Prepayments") the Term Loans B, in whole or in part, upon five (5)
Business Days prior written notice, specifying the date and amount of
prepayment. The amount to be so prepaid, together with interest accrued
thereon to date of prepayment if the amount is intended as a prepayment
of the Term Loans B in whole, shall be paid by the Borrower to the Agent
for the ratable benefit of the Lenders on the date specified for such
prepayment. Partial Term Loan B Optional Prepayments shall be applied as
follows: (i) fifty percent (50%) to principal against the principal
installments of the Term Loans B in the inverse order of their maturities
and (ii) fifty percent (50%) to all of the remaining principal
installments due on account of the Term Loans B on a pro rata basis.
2.3.5 TERM LOAN B FEES.
The Borrower shall pay to the Agent for the ratable benefit of the
Lenders, a quarterly fee, in arrears commencing with the earlier of (i)
any quarter in which an Event of Default existed or (ii) the quarter
ending September 30, 1998, (collectively, the "Term Loan B Fees" and
individually, a "Term Loan B Fee"), in an amount to be determined based
on the Pricing Ratio and calculated on the average quarterly outstanding
balance of the Term Loans B during such quarterly period, as follows:
Per annum Quarterly Term
Pricing Ratio Loan B Fee
greater than or equal to 6.0 to 1.0 37.5 b.p.
greater than or equal to 5.0 to 1.0, but 25 b.p.
less than 5.99 to 1.0
greater than or equal to 4.50 to 1.0, but 12.5 b.p.
less than 4.99 to 1.0
less than 4.50 to 1.0 0 b.p.
Each accrued and unpaid Term Loan B Fee shall be paid by the Borrower to
the Agent at the time the quarterly statements are furnished under
Section 6.1.1(c) below, in arrears, commencing September 30, 1998, and on
the maturity date of the Term Loans B; provided, however, in the event
that the Borrower fails to deliver such financial statements to the Agent
as and when required, the Agent may estimate, in its reasonable
discretion and without waiving any Default or Event of Default, the
amount of the Term Loan B Fee, which amount shall be due and payable ON
DEMAND by the Agent.
SECTION 2.4 THE LETTER OF CREDIT FACILITY.
2.4.1 LETTERS OF CREDIT. Subject to and upon the
provisions of this Agreement, and as a part of the Revolving Credit
Commitments, the Borrower may obtain standby or commercial letters of
credit (as the same may from time to time be amended, supplemented or
otherwise modified, each a "Letter of Credit" and collectively the
"Letters of Credit") from the Agent from time to time from the Closing
Date until the Business Day preceding the Revolving Credit Termination
Date. The Borrower will not be entitled to obtain a Letter of Credit
unless (a) the Borrower is then able to obtain a Revolving Loan from the
Lenders in an amount not less than the proposed stated amount of the
Letter of Credit requested by the Borrower, and (b) the sum of the then
Outstanding Letter of Credit Obligations (including the amount of the
requested Letter of Credit) does not exceed Five Million Dollars
($5,000,000) (the "Letter of Credit Committed Amount").
2.4.2 LETTER OF CREDIT FEES.
(a) The Borrower shall pay to the Agent, for its own
account, an issuance fee of one-quarter of one percent (1/4%) per annum
of the stated amount of the Letter of Credit without regard for
provisions contained in the Letters of Credit which may give rise to a
reduction in the stated amount thereof unless such reduction has actually
occurred (each a "Letter of Credit Fronting Fee" and collectively, the
"Letter of Credit Fronting Fees"). The Letter of Credit Fronting Fees
shall be paid upon the opening of each Letter of Credit and upon each
anniversary thereof, if any. In addition, the Borrower shall pay to the
Agent all other reasonable and customary negotiation, processing,
transfer or other fees to the extent and as and when required by the
provisions of any Letter of Credit Agreement. All Letter of Credit
Fronting Fees and all such other additional fees are included in and are
a part of the "Fees" payable by the Borrower under the provisions of this
Agreement and are for the sole and exclusive benefit of the Agent and are
a part of the Agent's Obligations.
(b) In addition and in connection with each Letter of
Credit, the Borrower shall pay to the Agent for the ratable benefit of
the Lenders quarterly, in arrears, a letter of credit fee (each a "Letter
of Credit Fee" and collectively the "Letter of Credit Fees") in an amount
equal to one hundred seventy-five (175) basis points per annum
(calculated on the basis of actual number of days elapsed in a year of
360 days) of the stated amount of each such Letter of Credit without
regard for provisions contained in the Letters of Credit which may give
rise to a reduction in the stated amount thereof unless such reduction
has actually occurred. The accrued and unpaid portion of each Letter of
Credit Fee shall be paid by the Borrower to the Agent on the first day of
each February, May, August and November, commencing on the first such
date following the date hereof, and on the expiration or termination date
of the respective Letter of Credit.
2.4.3 TERMS OF LETTERS OF CREDIT; POST-EXPIRATION
DATE LETTERS OF CREDIT.
Each Letter of Credit shall (a) be opened pursuant to a Letter of
Credit Agreement and (b) expire on a date not later than the Business Day
preceding the Revolving Credit Termination Date; provided, however, if
any Letter of Credit does have an expiration date later than the Business
Day preceding the Revolving Credit Termination Date (each a "Post-
Expiration Date Letter of Credit" and collectively, the "Post-Expiration
Date Letters of Credit"), effective as of the Business Day preceding the
Revolving Credit Termination Date and without prior notice to or the
consent of the Borrower, the Lenders shall make advances under the
Revolving Loan for the account of the Borrower in the aggregate stated
amount of all such Letters of Credit. The amount of each Lender's
advance shall be equal to its Revolving Credit Pro Rata Share of the
aggregate stated amount of all such Letters of Credit. The Agent shall
deposit the proceeds of such advances into one or more non-interest
bearing accounts with and in the name of the Agent and over which the
Agent alone shall have exclusive power of access and withdrawal
(collectively, the "Letter of Credit Cash Collateral Account"). The
Letter of Credit Cash Collateral Account is to be held by the Agent, for
the ratable benefit of the Lenders, as additional collateral and security
for any Letter of Credit Obligations relating to the Post-Expiration Date
Letters of Credit. The Borrower hereby assigns, pledges, grants and sets
over to the Agent, for the ratable benefit of the Lenders, a first
priority security interest in, and Lien on, all of the funds on deposit
in the Letter of Credit Cash Collateral Account, together with any and
all proceeds (cash and non-cash) and products thereof as additional
collateral and security for the Letter of Credit Obligations relating to
the Post-Expiration Date Letters of Credit. The Borrower acknowledges
and agrees that the Agent shall be entitled to fund any draw or draft on
any Post-Expiration Date Letter of Credit from the monies on deposit in
the Letter of Credit Cash Collateral Account without notice to or consent
of the Borrower or any of the Lenders so long as the drawing request
substantially complied with the requirements of any such Letter of
Credit. The Borrower further acknowledges and agrees that the Agent's
election to fund any draw or draft on any Post-Expiration Date Letter of
Credit from the Letter of Credit Cash Collateral shall in no way limit,
impair, lessen, reduce, release or otherwise adversely affect the
Borrower's obligation to pay any unpaid Letter of Credit Obligations
under or relating to the Post-Expiration Date Letters of Credit. At such
time as all Post-Expiration Date Letters of Credit have expired and all
Letter of Credit Obligations relating to the Post-Expiration Date Letters
of Credit have been paid in full, the Agent agrees to apply the amount of
any remaining funds on deposit in the Letter of Credit Cash Collateral
Account to the then unpaid balance of the Obligations under the Revolving
Credit Facility in such order and manner as the Agent shall determine in
its reasonable discretion in accordance with the provisions of this
Agreement.
Each Letter of Credit shall be issued for the sole purpose of a
Permitted Use. The aggregate stated amount of all Letters of Credit at
any one time outstanding and issued by the Agent pursuant to the
provisions of this Agreement, including, without limitation, any and all
Post-Expiration Date Letters of Credit, plus the amount of any unpaid
Letter of Credit Fees and Letter of Credit Fronting Fees accrued, and
less the aggregate amount of all drafts issued under such Letters of
Credit that have been paid by the Agent and for which the Agent has been
reimbursed by the Borrower in full in accordance with Section 2.3.5 below
and the Letter of Credit Agreements, and for which the Agent has no
further obligation or commitment to restore all or any portion of the
amounts drawn and reimbursed, is herein called the "Outstanding Letter of
Credit Obligations".
2.4.4 PROCEDURES FOR LETTERS OF CREDIT. The Borrower
shall give the Agent written notice at least five (5) Business Days prior
to the date on which the Borrower desires the Agent to issue a Letter of
Credit. Such notice shall be accompanied by a duly executed Letter of
Credit Agreement specifying, among other things: (a) the name and
address of the intended beneficiary of the Letter of Credit, (b) the
requested stated amount of the Letter of Credit, (c) whether the Letter
of Credit is to be revocable or irrevocable, (d) the Business Day on
which the Letter of Credit is to be opened and the date on which the
Letter of Credit is to expire, (e) the terms of payment of any draft or
drafts which may be drawn under the Letter of Credit, and (f) any other
terms or provisions the Borrower desire to be contained in the Letter of
Credit. Such notice shall also be accompanied by such other information,
certificates, confirmations, and other items as the Agent may reasonably
require to assure that the Letter of Credit is to be issued in accordance
with the provisions of this Agreement and a Letter of Credit Agreement.
In the event of any conflict between the provisions of this Agreement and
the provisions of a Letter of Credit Agreement, the provisions of this
Agreement shall prevail and control unless otherwise expressly provided
in the Letter of Credit Agreement. Upon (i) receipt of such notice, (ii)
payment of all Letter of Credit Fronting Fees and all other Fees payable
in connection with the issuance of such Letter of Credit, and (iii)
receipt of a duly executed Letter of Credit Agreement, the Agent shall
process such notice and Letter of Credit Agreement in accordance with its
customary procedures and open such Letter of Credit on the Business Day
specified in such notice.
2.4.5 PAYMENTS OF LETTERS OF CREDIT. The Borrower
hereby promises to pay to the Agent, ON DEMAND and in United States
Dollars, the following which are herein collectively referred to as the
"Current Letter of Credit Obligations":
(a) the amount which the Agent has paid under each draft or
draw on a Letter of Credit, whether such demand be in advance of the
Agent's payment or for reimbursement for such payment;
(b) any and all reasonable charges and expenses which the
Agent may pay or incur relative to the Letter of Credit and/or such
draws or drafts; and
(c) interest on the amounts described in (a) and (b) not paid
by the Borrower as and when due and payable under the provisions of
(a) and (b) above from the day the same are due and payable until
paid in full at a rate per annum equal to the then current highest
rate of interest on the Revolving Loan.
In addition, the Borrower hereby promises to pay any and all other
Letter of Credit Obligations as and when due and payable in accordance
with the provisions of this Agreement and the Letter of Credit
Agreements. The obligation of the Borrower to pay Current Letter of
Credit Obligations and all other Letter of Credit Obligations shall be
absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower or any other account party may have or have had against the
beneficiary of such Letter of Credit, the Agent, any of the Lenders, or
any other Person, including, without limitation, any defense based on the
failure of any draft or draw to conform to the terms of such Letter of
Credit, any draft or other document proving to be forged, fraudulent or
invalid, or the legality, validity, regularity or enforceability of such
Letter of Credit, any draft or other documents presented with any draft,
any Letter of Credit Agreement, this Agreement, or any of the other
Financing Documents, all whether or not the Agent or any of the Lenders
had actual or constructive knowledge of the same, and irrespective of any
Collateral, security or guarantee therefor or right of offset with
respect thereto and irrespective of any other circumstances whatsoever
which constitutes, or might be construed to constitute, an equitable or
legal discharge of the Borrower for any Letter of Credit Obligations, in
bankruptcy or otherwise; PROVIDED, HOWEVER, that the Borrower shall not
be obligated to reimburse the Agent for any wrongful payment under such
Letter of Credit made as a result of the Agent's willful misconduct or
gross negligence. The obligation of the Borrower to pay the Letter of
Credit Obligations shall not be conditioned or contingent upon the
pursuit by the Agent or any other Person at any time of any right or
remedy against any Person which may be or become liable in respect of all
or any part of such obligation or against any Collateral, security or
guarantee therefor or right of offset with respect thereto.
The Letter of Credit Obligations shall continue to be effective, or
be reinstated, as the case may be, if at any time payment of all or any
portion of the Letter of Credit Obligations is rescinded or must
otherwise be restored or returned by the Agent or any of the Lenders upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of
any Person, or upon or as a result of the appointment of a receiver,
intervenor, or conservator of, or trustee or similar officer for, any
Person, or any substantial part of such Person's property, all as though
such payments had not been made.
All payments by the Agent and the Lenders with respect to any of the
Current Letter of Credit Obligations shall be deemed to be advances under
the Revolving Loan contemporaneously as of the date any such Current
Letter of Credit Obligations due and owing; the proceeds of each such
advance shall be used to pay Current Letter of Credit Obligations in the
amount of such advance.
SECTION 2.5 THE BOND LETTER OF CREDIT FACILITY.
2.5.1 BOND LETTERS OF CREDIT. Subject to and upon
the provisions of the Bond Letter of Credit Agreements, the Agent has
agreed to issue the Bond Letters of Credit for the period commencing on
the Closing Date and ending on the Revolving Credit Termination Date (the
"Bond Letter of Credit Commitment"). The Agent shall have no obligation
or commitment to issue a Bond Letter of Credit if the aggregate stated
amount of all Bond Letters of Credit then outstanding or proposed to be
issued exceeds Eighteen Million Eight Hundred Fifty-Two Thousand Dollars
($18,852,000) (the "Bond Letter of Credit Committed Amount").
2.5.2 BOND LETTER OF CREDIT FEES.
(a) The Borrower shall pay to the Agent, for its own
account, an issuance fee of one-quarter of one percent (1/4%) per annum
of the stated amount of each Bond Letter of Credit, without regard for
provisions contained in the Bond Letter of Credit which may give rise to
a reduction in the stated amount thereof unless such reduction has
actually occurred (each a "Bond Letter of Credit Fronting Fee" and
collectively, the "Bond Letter of Credit Fronting Fees"). The Bond
Letter of Credit Fronting Fees shall be paid upon the issuance of each
Bond Letter of Credit and upon each anniversary thereof, if any. In
addition, the Borrower shall pay to the Agent all other reasonable and
customary negotiation, processing, transfer or other fees to the extent
and as and when required by the provisions of any Bond Letter of Credit
Agreement. All Bond Letter of Credit Fronting Fees and all such other
additional fees are included in and are a part of the "Fees" payable by
the Borrower under the provisions of this Agreement and are for the sole
and exclusive benefit of the Agent and are a part of the Agent's
Obligations.
(b) In addition and in connection with each Bond
Letter of Credit, the Borrower shall pay to the Agent for the ratable
benefit of the Lenders quarterly, in arrears, a letter of credit fee
(each a "Bond Letter of Credit Fee" and collectively the "Bond Letter of
Credit Fees") in an amount equal to one hundred seventy-five (175) basis
points per annum (calculated on the basis of actual number of days
elapsed in a year of 360 days) of the stated amount of each such Bond
Letter of Credit, without regard for provisions contained in the Bond
Letter of Credit which may give rise to a reduction in the stated amount
thereof unless such reduction has actually occurred. The accrued and
unpaid portion of each Bond Letter of Credit Fee shall be paid by the
Borrower to the Agent, for the ratable benefit of the Lenders, on the
first day of each February, May, August and November, commencing on the
first such date following the date hereof, and on the expiration or
termination date of the respective Bond Letter of Credit.
2.5.3 TERMS OF BOND LETTERS OF CREDIT.
Each Bond Letter of Credit shall (a) be issued pursuant to a Bond
Letter of Credit Agreement and (b) expire on a date not later than the
Business Day preceding the Revolving Credit Termination Date; provided,
however, that (i) the initial Iowa Bond Letter of Credit - NB issued as
security for the Iowa Bond Letter of Credit and the Iowa Bond Standby
Credit Agreement shall expire on the expiry date of the Iowa Bond Letter
of Credit and Iowa Bond Standby Credit Agreement, (ii) the initial Nevada
Bond Letter of Credit -NB issued as security for the Nevada Bond Letter
of Credit shall expire on the expiry date of the Nevada Bond Letter of
Credit and (iii) the initial South Carolina Bond Letter of Credit - NB
issued as security for the South Xxxxxxxx Xxxx Letter of Credit shall
expire on the expiry date of the South Carolina Bond Letter of Credit.
Each Bond Letter of Credit shall be issued for the sole purpose of
providing collateral for the Iowa Bonds, the Nevada Bonds, the South
Carolina Bonds, the Iowa Bond Letter of Credit, the Nevada Bond Letter of
Credit or the South Carolina Bond Letter of Credit or for any other
purposes required by the Nevada Bonds, the Iowa Bonds or the South
Carolina Bonds. The aggregate stated amount of all Bond Letters of
Credit at any one time outstanding and issued by the Agent pursuant to
the provisions of this Agreement, plus the amount of any unpaid Bond
Letter of Credit Fees and Bond Letter of Credit Fronting Fees accrued or
scheduled to accrue thereon, and less the aggregate amount of all drafts
drawn under or purporting to have been drawn under such Bond Letters of
Credit that have been paid by the Agent and for which the Agent has been
reimbursed by the Borrower in full in accordance with Section 2.5.5 below
and the Bond Letter of Credit Agreements, and for which the Agent has no
further obligation or commitment to restore all or any portion of the
amounts drawn and reimbursed, is herein called the "Outstanding Bond
Letter of Credit Obligations".
2.5.4 PROCEDURES FOR BOND LETTERS OF CREDIT. The
Borrower shall give the Agent written notice at least five (5) Business
Days prior to the date on which the Borrower desires the Agent to issue a
Bond Letter of Credit. Such notice shall be accompanied by a duly
executed Bond Letter of Credit Agreement specifying, among other things:
(a) the name and address of the intended beneficiary of the Bond Letter
of Credit, (b) the requested stated amount of the Bond Letter of Credit,
(c) that the Bond Letter of Credit is to be irrevocable, (d) the
Business Day on which the Bond Letter of Credit is to be issued and the
date on which the Bond Letter of Credit is to expire, (e) the terms of
payment of any draft or drafts which may be drawn under the Bond Letter
of Credit, and (f) any other terms or provisions the Borrower desire to
be contained in the Bond Letter of Credit. Such notice shall also be
accompanied by such other information, certificates, confirmations, and
other items as the Agent may reasonably require to assure that the Bond
Letter of Credit is to be issued in accordance with the provisions of
this Agreement and a Bond Letter of Credit Agreement. In the event of
any conflict between the provisions of this Agreement and the provisions
of a Bond Letter of Credit Agreement, the provisions of this Agreement
shall prevail and control unless otherwise expressly provided in the Bond
Letter of Credit Agreement. Upon (i) receipt of such notice, (ii)
payment of all Bond Letter of Credit Fronting Fees and all other Fees
payable in connection with the issuance of such Bond Letter of Credit,
and (iii) receipt of a duly executed Bond Letter of Credit Agreement, the
Agent shall process such notice and Bond Letter of Credit Agreement in
accordance with its customary procedures and issue such Bond Letter of
Credit on the Business Day specified in such notice, subject to
compliance by all parties with the requirements of the Iowa Bond Trust
Agreement, the Nevada Bond Trust Agreement and the South Carolina Bond
Trust Agreement, pertaining to the replacement of credit enhancement and
liquidity facilities relating to the Iowa Bonds, the Nevada Bonds, and
the South Carolina Bonds, respectively.
2.5.5 PAYMENTS OF BOND LETTERS OF CREDIT.
(a) Subject to the provisions of paragraph (b)
below, the Borrower hereby promises to pay to the Agent, ON DEMAND and in
United States Dollars, the following which are herein collectively
referred to as the "Current Bond Letter of Credit Obligations":
(i) the amount which the Agent has paid under each draft or
draw on a Bond Letter of Credit, whether such demand be in advance
of the Agent's payment or for reimbursement for such payment;
(ii) any and all reasonable charges and expenses which the
Agent may pay or incur relative to the Bond Letter of Credit and/or
such draws or drafts; and
(iii) interest on the amounts described in (i) and (ii) not
paid by the Borrower as and when due and payable under the
provisions of (i) and (ii) above from the day the same are due and
payable until paid in full at a rate per annum equal to the then
current highest rate of interest on the Revolving Loan.
(b) Notwithstanding the provisions of paragraph (a)
above, as long as no Event of Default has occurred, any drawing under the
Iowa Bond Letter of Credit - NB to redeem Iowa Bonds purchased with a
drawing under the Iowa Bond Standby Credit Agreement, any drawing under
the Nevada Bond Letter of Credit - NB to purchase Nevada Bonds, and any
drawing under the South Carolina Bond Letter of Credit - NB to purchase
South Carolina Bonds, in each case relating to Bonds which were tendered
for purchase by the holders thereof and which were not remarketed in a
timely fashion (each referred to herein as a "Conversion Drawing"), are
not required to be reimbursed to the Agent ON DEMAND; provided that BIC
or the Borrower, as appropriate, make payments of interest to the Agent
at the rates, at the times and otherwise subject to the provisions for
interest on the Loans under Section 2.7, and the principal amount of each
such Conversion Drawing is repaid in equal quarterly payments (i) over
the remaining term to expiry of the Bond Letter of Credit Facility with
respect to the Nevada Bond Letter of Credit - NB and/or the South
Xxxxxxxx Xxxx Letter of Credit - NB and (ii) over a period of ten (10)
years with respect to the Iowa Bond Letter of Credit - NB; final payment
of all outstanding amounts relating to the Nevada Bond Letter of Credit -
NB and/or the South Carolina Bond Letter of Credit - NB to be made no
later than expiry of the Bond Letter of Credit Facility or the Revolving
Credit Termination Date, whichever is earlier, and final payment of all
outstanding amounts relating to the Iowa Bond Letter of Credit - NB to be
made no later than the date which is ten (10) years after the date of any
Conversion Drawing under the Iowa Bond Letter of Credit - NB or the
Revolving Credit Termination Date, whichever is earlier. In addition,
the Agent and the Lenders agree that in the event the Iowa Bond Trustee
draws on the Iowa Bond Letter of Credit on or about the business day
preceding the expiration or termination of the Iowa Bond Letter of
Credit, as contemplated by Section 505 of the Iowa Bond Trust Agreement
(the "Draw"), the Iowa Bond Letter of Credit Obligations resulting from
the Draw, shall not be payable ON DEMAND as would otherwise be required
by this Section 2.5.5, but shall be repaid by the Borrower in equal
consecutive quarterly installments over a period of ten (10) years,
commencing with the first day following the first full quarterly period
after the Draw and continuing on the first day of each quarterly period
thereafter (the "Amortizing Iowa Bond Letter of Credit Obligations");
provided, that (i) there does not exist a Default or an Event of Default,
(ii) the Draw is not the result of an acceleration of the Iowa Bonds
pursuant to Section 1102 of the Iowa Bond Trust Agreement and (iii) the
Draw is not the result of the occurrence of a "Determination of
Taxability" (as defined in the Iowa Bond Trust Agreement). Interest
shall be payable on the Amortizing Iowa Bond Letter of Credit Obligations
to the Agent at the rates, at the times and otherwise subject to the
provisions for interest on the Loans under Section 2.7, with a final
payment of all outstanding amounts relating to the Iowa Bond Letter of
Credit - NB to be made no later than the date which is ten (10) years
after the date of the Draw or the Revolving Credit Termination Date,
whichever is earlier.
In the event that any of the payments required by this paragraph (b) are
not made when due or an Event of Default occurs, all of the foregoing
amounts shall be immediately due and payable ON DEMAND.
(c) In addition, the Borrower hereby promises to pay
any and all other Bond Letter of Credit Obligations as and when due and
payable in accordance with the provisions of this Agreement and the Bond
Letter of Credit Agreements. The obligation of the Borrower to pay
Current Bond Letter of Credit Obligations and all other Bond Letter of
Credit Obligations shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower or any other account party may have or have
had against the beneficiary of such Bond Letter of Credit, the Agent, any
of the Lenders, or any other Person, including, without limitation, any
defense based on the failure of any draft or draw to conform to the terms
of such Bond Letter of Credit, any draft or other document proving to be
forged, fraudulent or invalid, or the legality, validity, regularity or
enforceability of such Bond Letter of Credit, any draft or other
documents presented with any draft, any Bond Letter of Credit Agreement,
this Agreement, any of the Bond Letter of Credit Agreement Documents, or
any of the other Financing Documents, all whether or not the Agent or any
of the Lenders had actual or constructive knowledge of the same, and
irrespective of any Collateral, security or guarantee therefor or right
of offset with respect thereto and irrespective of any other
circumstances whatsoever which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Borrower for any Bond
Letter of Credit Obligations, in bankruptcy or otherwise; PROVIDED,
HOWEVER, that the Borrower shall not be obligated to reimburse the Agent
for any wrongful payment under such Bond Letter of Credit made as a
result of the Agent's willful misconduct or gross negligence. The
obligation of the Borrower to pay the Bond Letter of Credit Obligations
shall not be conditioned or contingent upon the pursuit by the Agent or
any other Person at any time of any right or remedy against any Person
which may be or become liable in respect of all or any part of such
obligation or against any Collateral, security or guarantee therefor or
right of offset with respect thereto.
The Bond Letter of Credit Obligations shall continue to be
effective, or be reinstated, as the case may be, if at any time payment
of all or any portion of the Bond Letter of Credit Obligations is
rescinded or must otherwise be restored or returned by the Agent or any
of the Lenders upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of any Person, or upon or as a result of the
appointment of a receiver, intervenor, or conservator of, or trustee or
similar officer for, any Person, or any substantial part of such Person's
property, all as though such payments had not been made.
SECTION 2.6 GENERAL LETTER OF CREDIT PROVISIONS.
2.6.1 PROCEDURES FOR LETTERS OF CREDIT AND BOND
LETTERS OF CREDIT.
If any change after the Closing Date in any law or regulation or in
the interpretation thereof by any court or other Governmental Authority
charged with the administration thereof shall either (a) impose, modify
or deem applicable any reserve, special deposit or similar requirement
against Letters of Credit or Bond Letters of Credit issued by the Agent,
or (b) impose on the Agent or any of the Lenders any other condition
regarding this Agreement, any Letter of Credit or any Bond Letter of
Credit, and the result of any event referred to in clauses (a) or (b)
above shall be to increase the cost to the Agent of issuing, maintaining
or extending the Letter of Credit or the Bond Letter of Credit or the
cost to any of the Lenders of funding any obligation under or in
connection with the Letter of Credit or the Bond Letter of Credit (which
increase in cost shall be the result of the Agent's reasonable allocation
of the aggregate of such cost increases resulting from such events),
then, upon demand by the Agent, the Borrower shall immediately pay to the
Agent from time to time as specified by the Agent, additional amounts
which shall be sufficient to compensate the Agent and the Lenders for
such increased cost, together with interest on each such amount from the
date demanded until payment in full thereof at a rate per annum equal to
the then highest current rate of interest on the Revolving Loan. A
certificate as to such increased cost incurred by the Agent and/or any of
the Lenders, submitted by the Agent to the Borrower, shall be conclusive,
absent manifest error.
2.6.2 GENERAL LETTER OF CREDIT PROVISIONS. The
Borrower hereby instructs the Agent to pay any draft complying with the
terms of any Letter of Credit or any Bond Letter of Credit irrespective
of any instructions of the Borrower to the contrary. The Borrower assume
all risks of the acts and omissions of the beneficiary and other users of
any Letter of Credit or any Bond Letter of Credit. The Agent, the
Lenders and their respective branches, Affiliates and/or correspondents
shall not be responsible for and the Borrower hereby indemnifies and
holds the Agent, the Lenders and their respective branches, Affiliates
and/or correspondents harmless from and against all liability, loss and
expense (including reasonable attorney's fees and costs) incurred by the
Agent, the Lenders and/or their respective branches, Affiliates and/or
correspondents relative to and/or as a consequence of (a) any failure by
the Borrower to perform the agreements hereunder and under any Letter of
Credit Agreement or under any Bond Letter of Credit Agreement, (b) any
Letter of Credit Agreement, any Bond Letter of Credit Agreement, this
Agreement, any Letter of Credit, any Bond Letter of Credit and any draft,
draw and/or acceptance under or purported to be under any Letter of
Credit or any Bond Letter of Credit, (c) any action taken or omitted by
the Agent, any of the Lenders and/or any of their respective branches,
Affiliates and/or correspondents at the request of the Borrower, other
than acts of willful misconduct and gross negligence, (d) any failure or
inability to perform in accordance with the terms of any Letter of Credit
or any Bond Letter of Credit by reason of any control or restriction
rightfully or wrongfully exercised by any DE FACTO or DE JURE
Governmental Authority, group or individual asserting or exercising
governmental or paramount powers, and/or (e) any consequences arising
from causes beyond the control of the Agent, any of the Lenders and/or
any of their respective branches, Affiliates and/or correspondents.
Except for willful misconduct and gross negligence, the Agent,
the Lenders and their respective branches, Affiliates and/or
correspondents, shall not be liable or responsible in any respect for any
(a) error, omission, interruption or delay in transmission, dispatch or
delivery of any one or more messages or advices in connection with any
Letter of Credit or any Bond Letter of Credit, whether transmitted by
cable, telegraph, mail or otherwise and despite any cipher or code which
may be employed, and/or (b) action, inaction or omission which may be
taken or suffered by it or them in good faith or through inadvertence in
identifying or failing to identify any beneficiary or otherwise in
connection with any Letter of Credit or any Bond Letter of Credit.
Any Letter of Credit or any Bond Letter of Credit may be
amended, modified or revoked only upon the receipt by the Agent from the
Borrower and the beneficiary (including any transferee and/or assignee of
the original beneficiary), of a written consent and request therefor.
If any Laws, order of court and/or ruling or regulation of any
Governmental Authority of the United States (or any state thereof) and/or
any country other than the United States permits a beneficiary under a
Letter of Credit or a Bond Letter of Credit to require the Agent, the
Lenders and/or any of their respective branches, Affiliates and/or
correspondents to pay drafts under or purporting to be under a Letter of
Credit or a Bond Letter of Credit after the expiration date of the Letter
of Credit or the Bond Letter of Credit, respectively, the Borrower shall
reimburse the Agent and the Lenders, as appropriate, for any such payment
pursuant to provisions of Section 2.4.5 or 2.5.5, as appropriate.
Except as may otherwise be specifically provided in a Letter of
Credit, a Bond Letter of Credit, a Letter of Credit Agreement or a Bond
Letter of Credit Agreement, the laws of the State of Maryland and the
Uniform Customs and Practice for Documentary Credits, 1995 Revision,
International Chamber of Commerce Publication No. 500 shall govern the
Letters of Credit and the Bond Letters of Credit. The Laws, rules,
provisions and regulations of the Uniform Customs and Practice for
Documentary Credits are hereby incorporated by reference. In the event
of a conflict between the Uniform Customs and Practice for Documentary
Credits and the laws of the State of Maryland, the Uniform Customs and
Practice for Documentary Credits shall prevail.
2.6.3 PARTICIPATIONS IN THE LETTERS OF CREDIT AND
THE BOND LETTERS OF CREDIT.
Each Lender hereby irrevocably authorizes the Agent to issue Letters
of Credit and the Bond Letters of Credit in accordance with the
provisions of this Agreement. As of the date each Letter of Credit or
each Bond Letter of Credit is opened or issued by the Agent pursuant to
the provisions of this Agreement, each Lender shall have an undivided
participating interest in (i) the rights and obligations of the Agent
under each such Letter of Credit and each such Bond Letter of Credit, and
(ii) the Outstanding Letter of Credit Obligations and the Outstanding
Bond Letter of Credit Obligations of the Borrower with respect to such
Letter of Credit and Bond Letter of Credit, as appropriate, in an amount
equal to each Lender's Pro Rata Share of such Outstanding Letter of
Credit Obligations and Outstanding Bond Letter of Credit Obligations.
2.6.4 PAYMENTS BY THE LENDERS TO THE AGENT. If the
Borrower fails to pay to the Agent any Current Letter of Credit
Obligations or any Current Bond Letter of Credit Obligations as and when
due and payable, the Agent shall promptly notify each of the Lenders and
shall demand payment from each of the Lenders such Lender's Revolving
Credit Pro Rata Share of such unpaid Current Letter of Credit Obligations
and unpaid Current Bond Letter of Credit Obligations, as appropriate. In
addition, if any amount paid to the Agent on account of Current Letter of
Credit Obligations or any Current Bond Letter of Credit Obligations is
rescinded or required to be restored or turned over by the Agent upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of the
Borrower or upon or as a result of the appointment of a receiver,
intervenor, trustee, conservator or similar officer for the Borrower, or
is otherwise not indefeasibly covered by an advance under the Revolving
Loan, the Agent shall promptly notify each of the Lenders and shall
demand payment from each of the Lenders of its Revolving Credit Pro Rata
Share of its portion of the Current Letter of Credit Obligations and/or
Current Bond Letter of Credit Obligations to be remitted to the Borrower.
Each of the Lenders irrevocably and unconditionally agrees to
honor any such demands for payment under this Section and promises to pay
to the Agent's account on the same Business Day as demanded the amount of
its Revolving Credit Pro Rata Share of the Current Letter of Credit
Obligations and Current Bond Letter of Credit Obligations, as
appropriate, in immediately available funds, without any setoff,
counterclaim or deduction of any kind. Any payment by a Lender hereunder
shall in no way release, discharge or lessen the obligation of the
Borrower to pay Current Letter of Credit Obligations or to pay Current
Bond Letter of Credit Obligations to the Agent in accordance with the
provisions of this Agreement.
The obligation of each of the Lenders to remit the amounts of
its Revolving Credit Pro Rata Share of Current Letter of Credit
Obligations and Current Bond Letter of Credit Obligations for the account
of the Agent pursuant to this Section shall be unconditional and
irrevocable under any and all circumstances and may not be terminated,
suspended or delayed for any reason whatsoever, provided that all
payments of such amounts by each of the Lenders shall be without
prejudice to the rights of each of the Lenders with respect to the
Agent's alleged willful misconduct. Any claim any Lender may have
against the Agent as a result of the Agent's alleged willful misconduct
may be brought by such Lender in a separate action against the Agent but
may not be used as a defense to payment under the provisions of this
Section.
No failure of any Lender to remit the amount of its Revolving
Credit Pro Rata Share of Current Letter of Credit Obligations and/or
Current Bond Letter of Credit Obligations to the Agent pursuant to this
Section shall affect the obligations of the Agent under any Letter of
Credit or under any Bond Letter of Credit, and if any Lender does not
remit to the Agent the amount of its Revolving Credit Pro Rata Share of
Current Letter of Credit Obligations and/or Current Bond Letter of Credit
Obligations on the same day as demanded, then without limiting such
Lender's obligation to transmit funds on the same Business Day as
demanded, such Lender shall be obligated to pay, on demand of the Agent
and without setoff, counterclaim or deduction of any kind whatsoever
interest on the unpaid amount at the Federal Funds Rate for each day from
the date such amount shall be due and payable to the Agent until the date
such amount shall have been paid in full to the Agent by such Lender.
No Lender shall have any obligation to pay to the Agent such
Lender's Pro Rata Share of unpaid Current Letter of Credit Obligations
and/or unpaid Current Bond Letter of Credit Obligations, if the Borrower
shall not be obligated to reimburse the Agent for such unpaid Current
Letter of Credit Obligations and/or unpaid Current Bond Letter of Credit
Obligations, respectively, because of the Agent's wrongful payment of a
Letter of Credit and/or Bond Letter of Credit made as a result of the
Agent's willful misconduct or gross negligence.
SECTION 2.7 INTEREST.
2.7.1 APPLICABLE INTEREST RATES.
(a) Each Loan shall bear interest until maturity
(whether by acceleration, declaration, extension or otherwise) at either
the Alternate Base Rate or the LIBOR Rate, as selected and specified by
the Borrower in an Interest Rate Election Notice furnished to the Agent
in accordance with the provisions of Section 2.7.2(e), or as otherwise
determined in accordance with the provisions of this Section 2.7, and as
may be adjusted from time to time in accordance with the provisions of
Section 2.7.3.
(b) Notwithstanding the foregoing, following the
occurrence and during the continuance of an Event of Default, at the
option of the Agent, all Loans and all other Obligations shall bear
interest at the Post-Default Rate.
(c) The Applicable Margin for (i) LIBOR Loans shall
be two hundred (200) basis points per annum, and (ii) Base Rate Loans
shall be fifty (50) basis points per annum unless and until a change is
required by the operation of Section 2.7.1(d).
(d) Subsequent to the Agent's receipt of the
Borrower's quarterly financial statements for the period ending June 30,
1998 to be furnished to the Agent pursuant to Section 6.1.1(c) of this
Agreement, changes in the Applicable Margin may be made, but not more
frequently than one such change per quarter based on the Borrower's
Pricing Ratio, tested as of the end of each fiscal quarter and the end of
each fiscal year, determined by the Agent based on the annual and
quarterly financial statements required by Section 6.1.1 (a) and (c), as
appropriate. Any change in the Applicable Margin shall be effective as
of the test date of the Pricing Ratio, as appropriate. The Applicable
Margin shall vary depending upon the Borrower's Pricing Ratio, as
follows:
Applicable Margin for Applicable Margin for
Pricing Ratio LIBOR Loans Base Rate Loans
greater than or equal to 5.5 to 1.0 250 b.p. 100 b.p.
greater than or equal to 5.0 to 1.0, but 225 b.p. 75 b.p.
less than 5.5 to 1.0
greater than or equal to 3.5 to 1.0, but 200 b.p. 50 b.p.
less than 5.0 to 1.0
greater than or equal to 2.75 to 1.0, but 175 b.p. 25 b.p.
less than 3.5 to 1.0
less than 2.75 to 1.0 150 b.p. 0 b.p.
2.7.2 SELECTION OF INTEREST RATES.
(a) The Borrower may select the initial Applicable
Interest Rate or Applicable Interest Rates to be charged on the Loans.
(b) From time to time after the date of this
Agreement as provided in this Section, by a proper and timely Interest
Rate Election Notice furnished to the Agent in accordance with the
provisions of Section 2.7.2(e), the Borrower may select an initial
Applicable Interest Rate or Applicable Interest Rates for any Loans or
may convert the Applicable Interest Rate and, when applicable, the
Interest Period, for any existing Loan to any other Applicable Interest
Rate or, when applicable, any other Interest Period.
(c) The Borrower's selection of an Applicable
Interest Rate and/or an Interest Period, the Borrower's election to
convert an Applicable Interest Rate and/or an Interest Period to another
Applicable Interest Rate or Interest Period, and any other adjustments in
an interest rate are subject to the following limitations:
(i) the Borrower shall not at any time select or
change to an Interest Period that extends beyond the Revolving
Credit Termination Date in the case of the Revolving Loan or beyond
the scheduled maturity of the Term Loan in the case of the Term
Loan,
(ii) no change from the LIBOR Rate to the
Alternate Base Rate shall become effective on a day other than a
Business Day and so long as the Lenders receive any compensation
payable pursuant to Section 2.7.4, on a day which is the last day of
the then current Interest Period, no change of an Interest Period
shall become effective on a day other than the last day of the then
current Interest Period, and no change from the Alternate Base Rate
to the LIBOR Rate shall become effective on a day other than a day
which is a Eurodollar Business Day.
(iii) any Applicable Interest Rate change for
any Loan to be effective on a date on which any principal payment on
account of such Loan is scheduled to be paid shall be made only
after such payment shall have been made,
(iv) no more than three (3) different LIBOR
Rates may be outstanding at any time and from time to time with
respect to the Revolving Loan,
(v) no more than two (2) different LIBOR Rates
may be outstanding at any time and from time to time with respect to
the Term Loan,
(vi) the first day of each Interest Period shall
be a Eurodollar Business Day,
(vii) as of the effective date of a selection,
there shall not exist a Default or an Event of Default, and
(viii) the minimum principal amount of a LIBOR
Loan shall be One Million Dollars ($1,000,000).
(d) If a request for an advance under the Loans is
not accompanied by an Interest Rate Election Notice or does not otherwise
include a selection of an Applicable Interest Rate and, if applicable, an
Interest Period, or if, after having made a selection of an Applicable
Interest Rate and, if applicable, an Interest Period, the Borrower fails
or is not otherwise entitled under the provisions of this Agreement to
continue such Applicable Interest Rate or Interest Period, the Borrower
shall be deemed to have selected the Alternate Base Rate as the
Applicable Interest Rate until such time as the Borrower shall have
selected a different Applicable Interest Rate and specified an Interest
Period in accordance with, and subject to, the provisions of this
Section.
(e) The Lenders will not be obligated to make Loans,
to convert the Applicable Interest Rate on Loans to another Interest
Rate, or to change Interest Periods, unless the Agent shall have received
an irrevocable written or telephonic notice (an "Interest Rate Election
Notice") from the Borrower specifying the following information:
(i) the amount to be borrowed or converted,
(ii) a selection of the Alternate Base Rate or
the LIBOR Rate,
(iii) the length of the Interest Period if the
Applicable Interest Rate selected is the LIBOR Rate, and
(iv) the requested date on which such election
is to be effective.
Any telephonic notice must be confirmed in writing within three (3)
Business Days. Each Interest Rate Election Notice must be received by
the Agent not later than 10:00 a.m. (Baltimore City Time) on the Business
Day of any requested borrowing or conversion in the case of a selection
of the Alternate Base Rate and not later than 10:00 a.m. (Baltimore City
Time) on the third Business Day before the effective date of any
requested borrowing or conversion in the case of a selection of the LIBOR
Rate.
2.7.3 INABILITY TO DETERMINE LIBOR BASE RATE.
In the event that (i) the Agent shall have determined that, by reason of
circumstances affecting the London interbank eurodollar market, adequate
and reasonable means do not exist for ascertaining the LIBOR Base Rate
for any requested Interest Period with respect to a Loan the Borrower
shall have requested to be made or to be converted to a LIBOR Loan or
(ii) the Agent shall determine that the LIBOR Base Rate for any requested
Interest Period with respect to a Loan the Borrower shall have requested
to be made or to be converted to a LIBOR Loan does not adequately and
fairly reflect the cost to the Lenders of funding or converting such
Loan, the Agent shall give telephonic or written notice of such
determination to the Borrower at least one (1) day prior to the proposed
date for funding or converting such Loan. If such notice is given, any
request for a LIBOR Loan shall be made or converted to a Alternate Base
Rate Loan. Until such notice has been withdrawn by the Agent, the
Borrower will not request that any Loan be made or converted to a LIBOR
Loan.
2.7.4 INDEMNITY. The Borrower agrees to indemnify and
reimburse the Lenders and to hold the Lenders harmless from any loss,
cost (including administrative costs) or expense which any one or more of
the Agent or the Lenders may sustain or incur as a consequence of (a) a
default by the Borrower in payment when due of the principal amount of or
interest on any LIBOR Loan, (b) the failure of the Borrower to make, or
convert the Applicable Interest Rate of, a LIBOR Loan after the Borrower
has given a Loan Notice or an Interest Rate Election Notice, (c) the
failure of the Borrower to make any prepayment of a LIBOR Loan after the
Borrower have given notice of such intention to make such a prepayment,
and/or (d) the making by the Borrower of a prepayment of a LIBOR Loan on
a day which is not the last day of the Interest Period for such LIBOR
Loan, calculated as provided in the following paragraph, including,
without limitation, any such loss or expense arising from the
reemployment of funds obtained by the Agent and/or any of the Lenders to
maintain any LIBOR Loan or from fees payable to terminate the deposits
from which such funds were obtained. This agreement and covenant of the
Borrower shall survive termination or expiration of this Agreement and
payment of the other Obligations.
Contemporaneously with any prepayment of principal of a
LIBOR Loan, a prepayment fee shall be due and payable to the Lenders in
an amount equal to any loss or expense (other than loss of anticipated
profits) arising from the reemployment of funds obtained by any Lender to
fund or maintain any LIBOR Loan or from fees payable to terminate the
deposits from which such funds were obtained. The Agent and the Lender
shall not be obligated to accept any prepayment of principal unless it is
accompanied by the prepayment fee, if any, due in connection therewith as
calculated pursuant to the provisions of this paragraph. No prepayment
fee payable in connection herewith shall in any event or under any
circumstances be deemed or construed as a penalty.
2.7.5 PAYMENT OF INTEREST.
(a) Unpaid and accrued interest on any Base Rate
Loan shall be paid monthly, in arrears, on the first day of each calendar
month, commencing on the first such date after the date of this
Agreement, and on the first day of each calendar month thereafter, and at
maturity (whether by acceleration, declaration, extension or otherwise).
(b) Notwithstanding the foregoing, any and all
unpaid and accrued interest on any Base Rate Loan converted to a LIBOR
Loan or prepaid shall be paid immediately upon such conversion and/or
prepayment, as appropriate.
(c) Unpaid and accrued interest on any LIBOR Loan
shall be paid monthly, in arrears, on the first day of each calendar
month, commencing on the first such date after the date of this
Agreement, and on the first day of each calendar month thereafter, and at
maturity (whether by acceleration, declaration, extension or otherwise).
Notwithstanding anything to the contrary contained herein, the Agent
agrees that the Borrower shall have no obligation to make any payment
pursuant to the provisions of Section 2.7.4 resulting solely from the
payment of accrued interest on a date other than the expiration date of
an Interest Period.
SECTION 2.8 GENERAL FINANCING PROVISIONS.
2.8.1 BORROWER'S REPRESENTATIVES.
(a) The Borrower hereby represents and warrants to
the Agent and the Lenders that the Borrower and each Subsidiary Guarantor
will derive benefits, directly and indirectly, from each Letter of
Credit, from each Bond Letter of Credit and from each Loan, both in their
separate capacity and as a member of the integrated group to which the
Borrower and each Subsidiary Guarantor belongs and because (i) the
successful operation of the integrated group is dependent upon the
continued successful performance of the functions of the integrated group
as a whole, (ii) this financing enabled the PackerWare Merger Transaction
and is enabling the Venture Stock Purchase/Merger Transaction, (iii) the
terms of the consolidated financing provided under this Agreement are
more favorable than would otherwise would be obtainable by the Borrower
and any Subsidiary Guarantor individually, and (iv) the Borrower's
additional administrative and other costs and reduced flexibility
associated with individual financing arrangements which would otherwise
be required if obtainable would substantially reduce the value to the
Borrower of such financings.
(b) The Borrower hereby irrevocably authorizes each
of the Lenders to make Loans to the Borrower, and hereby irrevocably
authorizes the Agent to issue Letters of Credit and Bond Letters of
Credit for the account of the Borrower, pursuant to the provisions of
this Agreement upon the written, oral or telephone request of any one of
the Persons who is from time to time a Responsible Officer of the
Borrower under the provisions of the most recent certificate of corporate
resolutions of the Borrower on file with the Agent and also upon the
written, oral or telephone request of any one of the Persons who is from
time to time a Responsible Officer of the Borrower under the provisions
of the most recent certificate of corporate resolutions and/or incumbency
for the Borrower on file with the Agent.
(c) Neither the Agent nor any of the Lenders assumes
any responsibility or liability for any errors, mistakes, and/or
discrepancies in the oral, telephonic, written or other transmissions of
any instructions, orders, requests and confirmations between the Agent
and the Borrower or the Agent and any of the Lenders in connection with
the Credit Facilities, any Loan, any Letter of Credit, any Bond Letter of
Credit or any other transaction in connection with the provisions of this
Agreement, except for acts of willful misconduct and gross negligence.
2.8.2 USE OF PROCEEDS OF THE LOANS. The proceeds of
each Loan shall be used by the Borrower and the Subsidiary Guarantors for
Permitted Uses, and for no other purposes except as may otherwise be
agreed by the Requisite Lenders in writing.
2.8.3 FIELD EXAMINATION FEES. The Borrower shall pay
to the Agent for the exclusive benefit of the Agent an annual field
examination fee (the "Field Examination Fee"), which Field Examination
Fee shall be payable quarterly in advance on the Closing Date and on the
first day of each February, May, August and November of each year
commencing on the first such date following the Closing Date, and
continuing until the last such date prior to which all Obligations
arising out of, or under, the Credit Facilities then outstanding have
been paid in full. The Field Examination Fee shall be in the amount of
Forty Thousand Dollars ($40,000) per annum. The Agent agrees that the
initial portion of the Field Examination Fee payable on the Closing Date
shall be pro rated for the actual number of days for the period
commencing on the Closing Date and ending on January 31, 1997.
2.8.4 COMPUTATION OF INTEREST AND FEES. All
applicable Fees and interest shall be calculated on the basis of a year
of 360 days for the actual number of days elapsed. Any change in the
interest rate on any of the Obligations resulting from a change in the
Alternate Base Rate shall become effective as of the opening of business
on the day on which such change in the Alternate Base Rate is announced.
2.8.5 PAYMENTS. All payments of the Obligations,
including, without limitation, principal, interest, Prepayments, and
Fees, shall be paid by the Borrower without setoff or counterclaim to the
Agent (except as otherwise provided herein) at the Agent's office
specified in Section 9.1 in immediately available funds not later than
2:00 p.m. (Baltimore City Time) on the due date of such payment. All
payments received by the Agent after such time shall be deemed to have
been received by the Agent for purposes of computing interest and Fees
and otherwise as of the next Business Day. Payments shall not be
considered received by the Agent until such payments are paid to the
Agent in immediately available funds.
2.8.6 LIENS; SETOFF. The Borrower hereby grants to
the Agent and to the Lenders a continuing Lien for all of the Obligations
(including, without limitation, the Agent's Obligations) upon any and all
monies, securities, and other cash deposits of the Borrower and the
proceeds thereof, now or hereafter held or received by or in transit to,
the Agent, any of the Lenders, and/or any Affiliate of the Agent and/or
any of the Lenders, from or for the Borrower, and also upon any and all
deposit accounts (general or special) and credits of the Borrower, if
any, with the Agent, any of the Lenders or any Affiliate of the Agent or
any of the Lenders, at any time existing, excluding any deposit accounts
held by the Borrower in its capacity as trustee for Persons who are not
Affiliates or Subsidiaries of the Borrower. Without implying any
limitation on any other rights the Agent and/or the Lenders may have
under the Financing Documents or applicable Laws, during the continuance
of an Event of Default, the Agent is hereby authorized by the Borrower at
any time and from time to time, without notice to the Borrower, to set
off, appropriate and apply any or all items hereinabove referred to
against all Obligations (including, without limitation, the Agent's
Obligations) then outstanding (whether or not then due), all in such
order and manner as shall be determined by the Agent in its sole and
absolute discretion.
2.8.7 REQUIREMENTS OF LAW. In the event that any
Lender shall have determined in good faith that (a) the adoption of any
Laws after the Closing Date regarding capital adequacy, or (b) any change
in or in the interpretation or application of any Laws, or (c) compliance
by such Lender or any corporation controlling such Lender with any
request or directive regarding capital adequacy (whether or not having
the force of law) from any central bank or Governmental Authority, does
or shall have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender, as a consequence
of the obligations of the such Lender hereunder to a level below that
which such Lender or any corporation controlling such Lender would have
achieved but for such adoption, change or compliance (taking into
consideration the policies of such Lender and the corporation controlling
such Lender, with respect to capital adequacy) by an amount deemed by
such Lender to be material, then from time to time, after submission by
such Lender to the Borrower of a written request therefor and a statement
of the basis for such determination, the Borrower shall pay to such
Lender such additional amount or amounts in order to compensate for such
reduction. The Agent and the Lenders agree that the Borrower shall be
entitled, at its option, to require that any Lender which demands payment
of any amounts under this Section 2.8.7 assign one hundred percent (100%)
of its Commitments and Obligations to one or more other lenders or
financial institutions as shall be acceptable to the Borrower and the
Agent; provided that any such assignment is effected in accordance with
the provisions of Section 9.5.
2.8.8 FUNDS TRANSFER SERVICES.
(a) The Borrower acknowledges that the Agent has
made available to the Borrower the Agent's Wire Transfer Procedures a
copy of which is attached to this Agreement as EXHIBIT B and which
includes a description of security procedures regarding funds transfers
executed by the Agent or an Affiliate bank at the request of the Borrower
(the "Security Procedures"). The Borrower and the Agent agree that the
Security Procedures are commercially reasonable. The Borrower further
acknowledges that the full scope of the Security Procedures which the
Agent or such Affiliate bank offers and strongly recommends is available
only if the Borrower communicates directly with the Agent or such
Affiliate bank as applicable in accordance with said procedures. If the
Borrower attempts to communicate by any other method or otherwise not in
accordance with the Security Procedures, the Agent or such Affiliate
bank, as applicable, shall not be required to execute such instructions,
but if the Agent or such Affiliate bank, as applicable, does so, the
Borrower will be deemed to have refused the Security Procedures that the
Agent or such Affiliate bank as applicable offers and strongly
recommends, and the Borrower will be bound by any funds transfer, whether
or not authorized, which is issued in the Borrower's name and accepted by
the Agent or such Affiliate bank, as applicable, in good faith. The
Agent or such Affiliate bank, as applicable, may modify Wire Transfer
Procedures upon notice to the Borrower, including, without limitation,
the Security Procedures at such time or times and in such manner as the
Agent or such Affiliate bank, as applicable, in its reasonable
discretion, deems appropriate to meet prevailing standards of good
banking practice. By continuing to use the Agent's or such Affiliate
bank's, as applicable, wire transfer services after receipt of any
modification of the Wire Transfer procedures including, without
limitation, the Security Procedures, the Borrower agrees that the
Security Procedures, as modified, are likewise commercially reasonable.
Neither the Agent nor any Affiliate bank is responsible for detecting any
error in payment order sent by the Borrower to the Agent or any of the
Lenders unless due to the willful misconduct or gross negligence of the
Agent or any such Affiliate bank.
(b) The Agent or such Affiliate bank, as applicable,
will generally use the Fedwire funds transfer system for domestic funds
transfers, and the funds transfer system operated by the Society for
Worldwide International Financial Telecommunication (SWIFT) for
international funds transfers. International funds transfers may also be
initiated through the Clearing House InterBank Payment System (CHIPs) or
international cable. However, the Agent or such Affiliate bank, as
applicable, may use any means and routes that the Agent or such Affiliate
bank, as applicable, in its reasonable discretion, may consider suitable
for the transmission of funds. Each payment order, or cancellation
thereof, carried out through a funds transfer system or a clearinghouse
will be governed by all applicable funds transfer system rules and
clearing house rules and clearing arrangements, whether or not the Agent
or such Affiliate bank, as applicable, is a member of the system,
clearinghouse or arrangement and the Borrower acknowledges that the
Agent's or such Affiliate bank's, as applicable, right to reverse,
adjust, stop payment or delay posting of an executed payment order is
subject to the laws, regulations, rules, circulars and arrangements
described herein.
SECTION 2.9 SETTLEMENT AMONG LENDERS.
2.9.1 TERM LOANS. The Agent shall pay to each Lender
on each date on which a payment of principal and/or interest on the
Loans, such Lender's ratable share of all payments received by the Agent
in immediately available funds on account of the Term Loans, net of any
amounts payable by such Lender to the Agent, by wire transfer of same day
funds; the amount payable to each Lender shall be based on the principal
amount of the Term Loans owing to such Lender.
2.9.2 REVOLVING LOAN. It is agreed that each
Lender's Net Outstandings are intended by the Lenders to be equal at all
times to such Lender's Revolving Credit Pro Rata Share of the aggregate
outstanding principal amount of the Revolving Loan outstanding.
Notwithstanding such agreement, the several and not joint obligation of
each Lender to fund the Revolving Loan made in accordance with the terms
of this Agreement ratably in accordance with such Lender's Revolving
Credit Pro Rata Share and each Lender's right to receive its ratable
share of principal payments on the Revolving Loan in accordance with its
Revolving Credit Pro Rata Share, the Lenders agree that in order to
facilitate the administration of this Agreement and the Financing
Documents that settlement among them may take place on a periodic basis
in accordance with the provisions of this Section 2.9.
2.9.3 SETTLEMENT PROCEDURES AS TO REVOLVING LOAN.
(a) IN GENERAL. To the extent and in the manner
hereinafter provided in this Section 2.9.3, settlement among the Lenders
as to the Revolving Loan may occur periodically on Settlement Dates
determined from time to time by the Agent, which may occur before or
after the occurrence or during the continuance of a Default or Event of
Default and whether or not all of the conditions set forth in Section 5.2
have been met. On each Settlement Date payments shall be made by or to
the Lenders in the manner provided in this Section 2.9.3 in accordance
with the Settlement Report delivered by the Agent pursuant to the
provisions of this Section 2.9.3 in respect of such Settlement Date so
that as of each Settlement Date, and after giving effect to the
transactions to take place on such Settlement Date, each Lender's Net
Outstandings shall equal such Lender's Revolving Credit Pro Rata Share of
the Revolving Loan outstanding.
(b) SELECTION OF SETTLEMENT DATES. If the Agent
elects, in its discretion, but subject to the consent of NationsBank, to
settle accounts among the Lenders with respect to principal amounts of
Revolving Loan less frequently than each Business Day, then the Agent
shall designate periodic Settlement Dates which may occur on any Business
Day after the Closing Date; provided, however, that the Agent shall
designate as a Settlement Date any Business Day which is payment date;
and provided further, that a Settlement Date shall occur at least once
during each seven-day period. The Agent shall designate a Settlement
Date by delivering to each Lender a Settlement Report not later than
12:00 noon (Baltimore City Time) on the proposed Settlement Date, which
Settlement Report shall be with respect to the period beginning on the
next preceding Settlement Date and ending on such designated Settlement
Date.
(c) NON-RATABLE LOANS AND PAYMENTS. Between
Settlement Dates, the Agent shall request and NationsBank may (but shall
not be obligated to) advance to the Borrower out of NationsBank's own
funds, the entire principal amount of any advance under the Revolving
Loan requested or deemed requested pursuant to Section 2.1.2 (any such
advance under the Revolving Loan being referred to as a "Non-Ratable
Loan"). The making of each Non-Ratable Loan by NationsBank shall be
deemed to be a purchase by NationsBank of a 100% participation in each
other Lender's Revolving Credit Pro Rata Share of the amount of such Non-
Ratable Loan. All payments of principal, interest and any other amount
with respect to such Non-Ratable Loan shall be payable to and received by
the Agent for the account of NationsBank. Upon demand by NationsBank,
with notice to the Agent, each other Lender shall pay to NationsBank, as
the repurchase of such participation, an amount equal to 100% of such
Lender's Revolving Credit Pro Rata Share of the principal amount of such
Non-Ratable Loan. Any payments received by the Agent between Settlement
Dates which in accordance with the terms of this Agreement are to be
applied to the reduction of the outstanding principal balance of
Revolving Loan, shall be paid over to and retained by NationsBank for
such application, and such payment to and retention by NationsBank shall
be deemed, to the extent of each other Lender's Revolving Credit Pro Rata
Share of such payment, to be a purchase by each such other Lender of a
participation in the advance under the Revolving Loan (including the
repurchase of participations in Non-Ratable Loans) made by NationsBank.
Upon demand by another Lender, with notice thereof to the Agent,
NationsBank shall pay to the Agent, for the account of such other Lender,
as a repurchase of such participation, an amount equal to such other
Lender's Revolving Credit Pro Rata Share of any such amounts (after
application thereof to the repurchase of any participations of
NationsBank in such other Lender's Revolving Credit Pro Rata Share of any
Non-Ratable Loans) paid only to NationsBank by the Agent.
(d) NET DECREASE IN OUTSTANDINGS. If on any
Settlement Date the increase, if any, in the dollar amount of any
Lender's Net Outstandings which is required to comply with the first
sentence of Section 2.9.2 is less than such Lender's Revolving Credit Pro
Rata Share of amounts received by the Agent but paid only to NationsBank
since the next preceding Settlement Date, such Lender and the Agent, in
their respective records, shall apply such Lender's Revolving Credit Pro
Rata Share of such amounts to the increase in such Lender's Net
Outstandings, and NationsBank shall pay to the Agent, for the account of
such Lender, the excess allocable to such Lender.
(e) NET INCREASE IN OUTSTANDINGS. If on any
Settlement Date the increase, if any, in the dollar amount of any
Lender's Net Outstandings which is required to comply with the first
sentence of Section 2.9.2 exceeds such Lender's Revolving Credit Pro Rata
Share of amounts received by the Agent but paid only to NationsBank since
the next preceding Settlement Date, such Lender and the Agent, in their
respective records, shall apply such Lender's Revolving Credit Pro Rata
Share of such amounts to the increase in such Lender's Net Outstandings,
and such Lender shall pay to the Agent, for the account of NationsBank,
any excess.
(f) NO CHANGE IN OUTSTANDINGS. If a Settlement
Report indicates that no advance under the Revolving Loan has been made
during the period since the next preceding Settlement Date, then such
Lender's Revolving Credit Pro Rata Share of any amounts received by the
Agent but paid only to NationsBank shall be paid by NationsBank to the
Agent, for the account of such Lender. If a Settlement Report indicates
that the increase in the dollar amount of a Lender's Net Outstandings
which is required to comply with the first sentence of Section 2.9.2 is
exactly equal to such Lender's Revolving Credit Pro Rata Share of amounts
received by the Agent but paid only to NationsBank since the next
preceding Settlement Date, such Lender and the Agent, in their respective
records, shall apply such Lender's Revolving Credit Pro Rata Share of
such amounts to the increase in such Lender's Net Outstandings.
(g) RETURN OF PAYMENTS. If any amounts received by
NationsBank in respect of the Obligations are later required to be
returned or repaid by NationsBank to the Borrower or any other obligor or
their respective representatives or successors in interest, whether by
court order, settlement or otherwise, in excess of the NationsBank's
Revolving Credit Pro Rata Share of all such amounts required to be
returned by all Lenders, each other Lender shall, upon demand by
NationsBank with notice to the Agent, pay to the Agent for the account of
NationsBank, an amount equal to the excess of such Lender's Revolving
Credit Pro Rata Share of all such amounts required to be returned by all
Lenders over the amount, if any, returned directly by such Lender.
(h) PAYMENTS TO AGENT, LENDERS.
(i) Payment by any Lender to the Agent shall be
made not later than 12:00 p.m. noon (Baltimore City Time) on the Business
Day such payment is due, provided that if such payment is due on demand
by another Lender, such demand is made on the paying Lender not later
than 10:00 a.m. (Baltimore City Time) on such Business Day. Payment by
the Agent to any Lender shall be made by wire transfer, promptly
following the Agent's receipt of funds for the account of such Lender and
in the type of funds received by the Agent, provided that if the Agent
receives such funds at or prior to 12:00 p.m. noon (Baltimore City Time),
the Agent shall pay such funds to such Lender by 2:00 p.m. (Baltimore
City Time) on such Business Day. If a demand for payment is made after
the applicable time set forth above, the payment due shall be made by
2:00 p.m. (Baltimore City Time) on the first Business Day following the
date of such demand.
(ii) If a Lender shall, at any time, fail to
make any payment to the Agent required hereunder, the Agent may, but
shall not be required to, retain payments that would otherwise be made to
such Lender hereunder and apply such payments to such Lender's defaulted
obligations hereunder, at such time, and in such order, as the Agent may
elect in its sole discretion. In addition, if a Lender shall default in
its obligation to fund its Pro Rata Share of any requested advance of the
Revolving Loan and the Agent elects not to fund such defaulting Lender's
Pro Rata Share of that advance, then the defaulting Lender, at the
Agent's option, shall not be entitled to receive any payments of
principal of or interest on its Pro Rata Share of any of the Obligations
or its Pro Rata Share of any Fees, unless and until (x) all of the
Obligations have been paid in full or (y) the defaulting Lender cures its
default by funding its Pro Rata Share of the requested Revolving Loan
advance. Interest and Fees which would be payable to the defaulting
Lender except for the provisions of this subsection, instead shall be
payable to the other Lenders in accordance with their respective Pro Rata
Shares. In addition, for so long as the defaulting Lender shall remain
in default under its obligations under this Agreement, for purposes of
voting on matters with respect to this Agreement and/or any of the
Financing Documents, such defaulting Lender shall be deemed not to be a
"Lender" and such Lender's Pro Rata Share of the Commitments and the
Obligations shall be deemed to be zero. No Commitment of any Lender
shall be increased or otherwise affected by the default of any other
Lender nor shall the Agent have any obligation to fund any amounts not
funded by a defaulting Lender.
(iii) With respect to the payment of any funds
under this Section 2.9.3, whether from the Agent to a Lender or from a
Lender to the Agent, the party failing to make full payment when due
pursuant to the terms hereof shall, upon demand by the other party, pay
such amount together with interest on such amount at the Federal Funds
Rate.
2.9.4 SETTLEMENT OF OTHER OBLIGATIONS. All other
amounts received by the Agent on account of, or applied by the Agent to
the payment of, any Obligation owed to the Lenders (including, without
limitation, Fees payable to the Lenders and proceeds from the sale of, or
other realization upon, all or any part of the Collateral following an
Event of Default) that are received by the Agent not later than 11:00
a.m. (Baltimore City Time) on a Business Day will be paid by the Agent to
each Lender on the same Business Day, and any such amounts that are
received by the Agent after 11:00 a.m. (Baltimore City Time) will be paid
by the Agent to each Lender on the following Business Day. Unless
otherwise stated herein, the Agent shall distribute Fees payable to the
Lenders ratably to the Lenders based on each Lender's Revolving Credit
Pro Rata Share and shall distribute proceeds from the sale of, or other
realization upon, all or any part of the Collateral following an Event of
Default ratably to the Lenders based on the amount of the Obligations
then owing to each Lender.
2.9.5 PRESUMPTION OF PAYMENT.
(a) Unless the Agent shall have received notice from
a Lender prior to 12:00 p.m. noon (Baltimore City Time) on the date of
the requested date for the making of advances under the Revolving Loan
that such Lender will not make available to the Agent, such Lender's
Revolving Credit Pro Rata Share of the advances to be made on such date,
the Agent may assume that such Lender has made such amount available to
the Agent on such date in accordance with this Section 2.9, and the
Agent, in its sole discretion may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount on behalf
of such Lender.
(b) If and to the extent such Lender shall not have
so made available to the Agent its Revolving Credit Pro Rata Share of the
advances under the Revolving Loan made on such date, and the Agent shall
have so made available to the Borrower a corresponding amount on behalf
of such Lender, such Lender shall, on demand, pay to the Agent such
corresponding amount, together with interest thereon, at the Federal
Funds Rate, for each day from the date such corresponding amount shall
have been so available by the Agent to the Borrower until the date such
amount shall have been repaid to the Agent. Such Lender shall not be
entitled to payment of any interest which accrues on the amount made
available by the Agent to the Borrower for the account of such Lender
until such time as such Lender reimburses the Agent for such amount,
together with interest thereon, as provided in this Section 2.9.5.
(c) A certificate of the Agent submitted to any
Lender with respect to any amounts owing to the Agent by such Lender
under this Section 2.9 shall be conclusive and binding on such Lender,
absent manifest error. If such Lender does not pay such amounts to the
Agent promptly upon the Agent's demand, the Agent shall promptly notify
the Borrower of such Lender's failure to make payment, and the Borrower
shall immediately repay such amounts to the Agent, together with accrued
interest thereon at the applicable rate on the Revolving Loan, all
without prejudice to the rights and remedies of the Agent against any
defaulting Lender. Any and all amounts due and payable to the Agent by
the Borrower under this Section 2.9 constitute and shall be part of the
Agent's Obligations.
(d) Unless the Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Agent
that the Borrower will not make such payment in full, the Agent may
assume that the Borrower have made such payment in full to the Agent on
such date and the Agent in its sole discretion may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date an
amount equal to the amount then due such Lender. If and to the extent
the Borrower shall not have so made such payment in full to the Agent and
the Agent shall have distributed to any Lender all or any portion of such
amount, such Lender shall repay to the Agent on demand the amount so
distributed to such Lender, together with interest thereon at the Federal
Funds Rate, for each day from the date such amount is distributed to such
Lender until the date such Lender repays such amount to the Agent.
ARTICLE 3
THE COLLATERAL
SECTION 3.1 DEBT AND OBLIGATIONS SECURED. All property and Liens
assigned, pledged or otherwise granted under or in connection with this
Agreement (including, without limitation, those under Section 3.2 (Grant
of Liens) below) or any of the Financing Documents shall, subject to the
terms, conditions and limitations, if any, set forth in this Agreement or
in any of the Financing Documents, secure (a) the payment of all of the
Obligations, including, without limitation, any and all Outstanding
Letter of Credit Obligations, all Outstanding Bond Letter of Credit
Obligations and any and all Agent's Obligations, and (b) the performance,
compliance with and observance by the Borrower of the provisions of this
Agreement and all of the other Financing Documents or otherwise under the
Obligations. The security interest and Lien of each Lender in such
property shall rank equally in priority with the interest of each other
Lender, but the security interest and Lien of the Agent with respect to
the Agent's Obligations shall be superior and paramount to the security
interest and Lien of the Lenders. Notwithstanding the foregoing, the
security interest and Lien of the Agent and/or any Lender with respect to
any Obligations under or in connection with, any interest rate or
currency swap agreements, cap, floor, and collar agreements, currency
spot, foreign exchange and forward contracts and other similar agreements
and arrangements permitted by the provisions of this Agreement shall be
junior and subordinate to the security interest and Lien of the Agent
with respect to the Agent's Obligations and junior and subordinate to the
security interest and Lien of the Lender with respect to all other
Obligations.
SECTION 3.2 GRANT OF LIENS. The Borrower hereby assigns, pledges
and grants to the Agent, for the ratable benefit of the Lenders and for
the benefit of the Agent with respect to the Agent's Obligations, and
agrees that the Agent and the Lenders shall have a perfected and
continuing security interest in, and Lien on, (a) all of the Borrower's
Accounts, Inventory, Chattel Paper, Documents, Instruments, Equipment,
Securities, and General Intangibles, whether now owned or existing or
hereafter acquired or arising, (b) all returned, rejected or repossessed
goods, the sale or lease of which shall have given or shall give rise to
an Account or Chattel Paper, (c) all insurance policies relating to the
foregoing, (d) all books and records in whatever media (paper, electronic
or otherwise) recorded or stored, with respect to the foregoing and all
equipment and general intangibles necessary or beneficial to retain,
access and/or process the information contained in those books and
records, and (e) all cash and non-cash proceeds and products of the
foregoing. The Borrower further agrees that the Agent, for the ratable
benefit of the Lenders and for the benefit of the Agent with respect to
the Agent's Obligations, shall have in respect thereof all of the rights
and remedies of a secured party under the Uniform Commercial Code as well
as those provided in this Agreement, under each of the other Financing
Documents and under applicable Laws. Notwithstanding anything to the
contrary contained herein, the Collateral shall not include any rights of
the Borrower under any Capital Leases of Equipment or any other
agreements if and to the extent any such Capital Leases or other
agreements prohibit the collateral assignment or pledge of the Borrower's
interest therein, and such prohibition has not been waived by the
respective Person.
Without implying any limitation to the foregoing, as additional
Collateral and security for the Obligations, the Borrower hereby assigns
to the Agent, for the ratable benefit of the Lenders and for the benefit
of the Agent with respect to the Agent's Obligations, all of its rights,
title and interest in, to, and under, the PackerWare Merger Agreement,
the Virginia Design Purchase Agreement, the Venture Stock Purchase/Merger
Agreement, all of the PackerWare Merger Agreement Documents, all of the
Virginia Design Purchase Agreement Documents, and the Venture Stock
Purchase/Merger Documents, including, without limitation, all of the
benefits of any representations and warranties provided by the PackerWare
Seller, Virginia Design and the Seller, respectively, and any and all
rights of the Borrower to indemnification from the Seller or any other
Person contained therein. The Borrower agrees that neither the
assignment to the Agent, for the ratable benefit of the Lenders and for
the benefit of the Agent with respect to the Agent's Obligations, nor any
other provision contained in this Agreement or any of the other Financing
Documents shall impose on the Agent or any of the Lenders any obligation
or liability of the Borrower under the PackerWare Merger Agreement, under
the Virginia Design Purchase Agreement, under the Venture Stock
Purchase/Merger Agreement, under any of the PackerWare Merger Agreement
Documents, under any of the Virginia Design Purchase Agreement Documents,
and/or under any of the other Venture Stock Purchase/Merger Documents.
The Borrower hereby agrees to indemnify the Agent and each of the Lenders
and hold the Agent and each of the Lenders harmless from any and all
claims, actions, suits, losses, damages, costs, expenses, fees,
obligations and liabilities which may be incurred by or imposed upon the
Agent and/or any of the Lenders by virtue of the assignment of and Lien
on each of the Borrower's rights, title and interest in, to, and under
the PackerWare Merger Agreement, Virginia Design Purchase Agreement, the
Venture Stock Purchase/Merger Agreement, the PackerWare Merger Agreement
Documents, the Virginia Design Purchase Agreement Documents and the
Venture Stock Purchase/Merger Documents, unless due to the gross
negligence or willful misconduct of the Agent and/or any of the Lenders.
The Borrower further acknowledges and agrees that following the
occurrence of an Event of Default, the Agent, with the consent of the
Requisite Lenders, shall be entitled to enforce any and all rights and
remedies available to the Borrower under the PackerWare Merger Agreement,
under the Virginia Design Purchase Agreement, under the Venture Stock
Purchase/Merger Agreement, under any or all of the PackerWare Merger
Agreement Documents, under any or all of the Virginia Design Purchase
Agreement Documents, under any or all of the Venture Stock
Purchase/Merger Documents, and under applicable Laws with respect to the
PackerWare Merger Transaction, Virginia Design Purchase Agreement
Transaction, and/or the Venture Stock Purchase/Merger Transaction.
SECTION 3.3 COLLATERAL DISCLOSURE LIST. On or prior to the date
of this Agreement, the Borrower shall deliver to the Agent one or more
lists (collectively, the "Collateral Disclosure List") which shall
contain such information with respect to the business and real and
personal property of the Borrower and each Subsidiary Guarantor as the
Agent may require and shall be certified by a Responsible Officer of the
Borrower and each Subsidiary Guarantor, as appropriate, all in the form
provided to the Borrower by the Agent. Promptly after demand by the
Agent, the Borrower shall furnish and shall cause each Subsidiary
Guarantor to furnish to the Agent an update of the information contained
in the Collateral Disclosure List at any time and from time to time as
may be requested by the Agent.
SECTION 3.4 PERSONAL PROPERTY. The Borrower acknowledges and
agrees that it is the intention of the parties to this Agreement that the
Agent, for the ratable benefit of the Lenders and for the benefit of the
Agent with respect to the Agent's Obligations, except as otherwise
expressly provided in Section 3.2 of this Agreement, shall have a first
priority, perfected Lien (except that the Agent acknowledges and agrees
that the Lien on the Fixed and Capital Assets of the Borrower located in
the State of Nevada, including, without limitation, the real property
owned by the Borrower in the State of Nevada shall be a second priority
Lien, subject to first priority Liens as set forth in Schedule 4.1.22),
in form and substance reasonably satisfactory to the Agent and its
counsel, on all of the personal property of the Borrower and of each
Subsidiary Guarantor of any kind and nature whatsoever, whether now owned
or hereafter acquired, subject only to the Permitted Liens, if any. In
furtherance of the foregoing:
3.4.1 SECURITIES, CHATTEL PAPER, PROMISSORY
NOTES, ETC.
(a) As of the date of this Agreement and without
implying any limitation on the scope of Section 3.2 (Grant of Liens)
above, the Borrower shall deliver and shall cause each Subsidiary
Guarantor to deliver (or shall have delivered or caused to be delivered)
to the Agent, for the ratable benefit of the Lenders and for the benefit
of the Agent with respect to the Agent's Obligations, all originals of
all of letters of credit, Securities, Chattel Paper, Documents and
Instruments owned or held by the Borrower and/or any Subsidiary
Guarantor, and, if the Agent so requires, shall execute and deliver and,
shall cause each Subsidiary Guarantor to execute and deliver (or shall
have executed and delivered or caused to be delivered), a separate
pledge, assignment and security agreement in form and content acceptable
to the Agent, which pledge, assignment and security agreement shall
assign, pledge and xxxxx x Xxxx to the Agent, for the ratable benefit of
the Lenders and for the benefit of the Agent with respect to the Agent's
Obligations on all of the letters of credit, Securities, Chattel Paper,
Documents and Instruments of the Borrower and each Subsidiary Guarantor,
as the case may be. In addition, the Borrower agrees to endorse to the
order of the Agent any and all Instruments which constitute or evidence
all or any portion of the Collateral.
(b) In the event that the Borrower or any Subsidiary
Guarantor shall acquire (or have acquired) after the Closing Date any
letters of credit, Securities, Chattel Paper, Documents or Instruments,
the Borrower shall promptly so notify the Agent and deliver the originals
of all of the foregoing to the Agent promptly and in any event within
thirty (30) days of each acquisition.
(c) All letters of credit, Securities, Chattel
Paper, Documents and Instruments to be delivered hereunder shall be
delivered to the Agent endorsed and/or assigned as required by the
pledge, assignment and security agreement and/or as the Agent may require
and, if applicable, shall be accompanied by blank irrevocable and
unconditional stock or bond powers.
3.4.2 PATENTS, COPYRIGHTS AND OTHER PROPERTY
REQUIRING ADDITIONAL STEPS TO PERFECT.
As of the date of this Agreement and without implying any limitation
on the scope of Section 3.2 above, the Borrower shall execute and deliver
and, shall cause each Subsidiary Guarantor, as appropriate, to execute
and deliver (or shall have executed and delivered or caused to be
executed and delivered), all Financing Documents and take all actions
requested by the Agent in order to perfect a first priority assignment of
Patents, Copyrights, Trademarks, customer lists or any other type or kind
of intellectual property acquired by the Borrower or any Subsidiary
Guarantor after the Closing Date.
SECTION 3.5 RECORD SEARCHES. As of the Closing Date and
thereafter, as determined by the Agent, at the time any Financing
Document is executed and delivered by the Borrower or any Subsidiary
Guarantor pursuant to this Article 3 or any other Section of this
Agreement, the Agent shall, in its reasonable discretion and if
requested, have received, in form and substance satisfactory to the
Agent, such Lien or record searches with respect to the Borrower, each
Subsidiary Guarantor and/or any other Person who may be an obligor or
pledgor with respect to any of the Obligations, as appropriate, and the
property covered by such Financing Document showing that the Lien of such
Financing Document will be a perfected first priority Lien on the
property covered by such Financing Document subject only to Permitted
Liens or to such other Liens or matters as the Agent may approve.
Notwithstanding the foregoing, the Agent acknowledges and agrees that the
Borrower shall be obligated to reimburse the Agent only for actual out-
of-pocket costs and expenses relating to Lien and record searches and
only to the extent ordered by the Agent (i) one-time only after the
Closing Date to confirm the due filing and Lien priority of the Agent and
the Lenders, (ii) not more frequently than once in any given calendar
year after the Closing Date prior to the occurrence of a Default or an
Event of Default, and (iii) in addition, at any time following the
occurrence of a Default or an Event of Default.
SECTION 3.6 REAL PROPERTY. The Borrower acknowledges and agrees
that it is the intention of the parties to this Agreement that the Agent,
for the ratable benefit of the Lenders and for the benefit of the Agent
with respect to the Agent's Obligations, shall have a first priority,
perfected Lien, in form and substance satisfactory to the Agent and its
counsel, on all real property of any kind and nature whatsoever, whether
now owned or hereafter acquired by the Borrower or any Subsidiary
Guarantor, subject only to the Permitted Liens, if any, and subject to
the provisions of Section 3.7 below, excluding, however, any real
property leased by the Borrower or any Subsidiary Guarantor.
With respect to each parcel of real property now owned by the
Borrower and/or a Subsidiary Guarantor (other than the real property
located at 000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxx), the Borrower
shall execute and deliver and, subject to the terms of Section 3.7 below,
shall cause each Subsidiary Guarantor, as appropriate, to execute and
deliver (or to have executed and delivered), as of the date of this
Agreement, a deed of trust or a mortgage or other document, as
appropriate, which deed of trust, mortgage and/or other document shall be
included among the Financing Documents. With respect to real property
acquired in fee by the Borrower or any Subsidiary Guarantor after the
Closing Date (whether by merger or otherwise), the Borrower shall grant
and, subject to the terms of Section 3.7 below, shall cause each
Subsidiary Guarantor, as appropriate, to grant (or shall have granted or
caused to be granted), promptly after acquisition thereof, a Lien
covering such real property to the Agent, for the ratable benefit of the
Lenders and for the benefit of the Agent with respect to the Agent's
Obligations, under the provisions of a mortgage, deed of trust or other
document, as appropriate. Each Financing Document to be executed and
delivered pursuant hereto shall:
(a) be in form and substance reasonably satisfactory
to the Agent;
(b) create a first priority Lien in such real
property in favor of the Agent, for the ratable benefit of the
Lenders and for the benefit of the Agent with respect to the Agent's
Obligations, subject only to Permitted Liens, zoning ordinances, and
such other matters as the Agent may approve;
(c) be accompanied by a current survey reasonably
satisfactory in all respects to the Agent of the subject real
property, prepared by a registered land surveyor or engineer
reasonably satisfactory to the Agent;
(d) be accompanied by evidence reasonably
satisfactory to the Agent regarding the current and past pollution
control practices at such real property in connection with the
discharge, emission, handling, disposal or existence of Hazardous
Materials, which may include, at the Agent's request, an
environmental audit of such real property prepared by a person or
firm reasonably acceptable to the Agent;
(e) be accompanied by a mortgagee's title insurance
policy or marked-up commitment or binder for such insurance in form
and substance reasonably satisfactory to the Agent and issued by a
title insurance company reasonably satisfactory to the Agent; and
(f) upon request of the Agent, be accompanied by a
signed opinion of counsel addressed to the Agent and each of the
Lenders, in form and substance reasonably satisfactory to the Agent.
SECTION 3.7 SUBSIDIARY GUARANTOR ASSETS. The Borrower agrees
that all Obligations are and shall continue to be fully and
unconditionally and jointly and severally guaranteed by each Subsidiary
Guarantor and that the joint and several obligations of each Subsidiary
Guarantor under the Guaranty are and shall continue to be secured by a
first priority Lien (subject only to Permitted Liens) on all Assets and
properties of each Subsidiary Guarantor.
SECTION 3.8 COSTS. The Borrower agrees to pay, as part of the
Enforcement Costs and to the fullest extent permitted by applicable Laws,
on demand all reasonable costs, fees and expenses incurred by the Agent
and/or any of the Lenders in connection with the taking, perfection,
preservation, protection and/or release of a Lien on the Collateral,
including, without limitation, with respect to all actions required to
effect any of the provisions of Section 3.7 above, and any of the
following:
(a) customary reasonable fees and expenses incurred
by the Agent and/or any of the Lenders in preparing, reviewing,
negotiating and finalizing the Financing Documents from time to time
(including, without limitation, reasonable attorneys' fees incurred
in connection with preparing, reviewing, negotiating, and finalizing
any of the Financing Documents, including, any amendments and
supplements thereto);
(b) all filing and/or recording taxes or fees;
(c) all title insurance premiums and costs;
(d) all costs of Lien and record searches;
(e) reasonable attorneys' fees in connection with all
legal opinions required;
(f) appraisal and/or survey costs; and
(g) all related reasonable costs, fees and expenses.
SECTION 3.9 RELEASE. Upon the payment and performance of all
Obligations of the Borrower and all obligations and liabilities of each
other Subsidiary Guarantor, under this Agreement and/or under any or all
other Financing Documents, the termination and/or expiration of all of
the Commitments, all Letters of Credit, all Bond Letters of Credit, all
Outstanding Bond Letter of Credit Obligations, and all Outstanding Letter
of Credit Obligations, upon the Borrower's request and at the Borrower's
sole cost and expense, the Agent shall release and/or terminate the Liens
of any and all of the Financing Documents.
SECTION 3.10 INCONSISTENT PROVISIONS. In the event that the
provisions of any Financing Document directly conflict with any provision
of this Agreement, the provisions of this Agreement shall govern.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
SECTION 4.1 REPRESENTATIONS AND WARRANTIES. The Borrower
represents and warrants to the Agent and the Lenders, as follows:
4.1.1 SUBSIDIARIES. The Borrower owns the
Subsidiaries listed on the Collateral Disclosure List attached hereto and
made a part hereof and no others, as updated from time to time pursuant
to the provisions of this Agreement. Each of the Subsidiaries is a
Wholly Owned Subsidiary except as shown on the Collateral Disclosure
List, as updated from time to time pursuant to the provisions of this
Agreement, which correctly indicates the nature and amount of the
Borrower's ownership interests therein.
4.1.2 GOOD STANDING. Each of the Borrower and its
Subsidiaries (a) is a corporation duly organized, existing and in good
standing under the laws of the jurisdiction of its incorporation, (b) has
the corporate power to own its property and to carry on its business as
now being conducted, and (c) is duly qualified to do business and is in
good standing in each jurisdiction in which the character of the
properties owned by it therein or in which the transaction of its
business makes such qualification necessary or where such non-
qualification would have a materially adverse effect on the Borrower and
its Subsidiaries taken as a whole or would otherwise impair the ability
of the Agent to collect or realize upon any of the Collateral.
4.1.3 POWER AND AUTHORITY. Each of the Borrower and
its Subsidiaries has full corporate power and authority to execute and
deliver this Agreement, the other Financing Documents, the Venture Stock
Purchase/Merger Documents to which it is a party, to make the borrowings
and request Letters of Credit and Bond Letters of Credit under this
Agreement, to close and consummate each aspect of the Venture Stock
Purchase/Merger Transaction, as appropriate and to incur and perform the
Obligations whether under this Agreement, the other Financing Documents,
the Venture Stock Purchase/Merger Documents, all of which have been duly
authorized by all proper and necessary corporate action. No consent or
approval of shareholders or any creditors of the Borrower or any
Subsidiary of the Borrower, and no consent, approval, filing or
registration with or notice to any Governmental Authority on the part of
the Borrower or any Subsidiary of the Borrower, is required as a
condition to the execution, delivery, validity or enforceability of this
Agreement, the other Financing Documents, any of the Venture Stock
Purchase/Merger Documents, the performance by the Borrower of the
Obligations or the closing and consummation of the Venture Stock
Purchase/Merger Transaction, in each case, if required, the same has been
duly obtained.
4.1.4 BINDING AGREEMENTS. This Agreement and the
other Financing Documents executed and delivered by the Borrower and/or
any of its Subsidiaries have been properly executed and delivered and
constitute the valid and legally binding obligations of the Borrower and
its Subsidiaries, respectively, and are fully enforceable against the
Borrower and its Subsidiaries in accordance with their respective terms,
subject to bankruptcy, insolvency, reorganization, moratorium and other
laws of general applications affecting the rights and remedies of
creditors and secured parties, and general principles of equity
regardless of whether applied in a proceeding in equity or at law.
4.1.5 NO CONFLICTS. Neither the execution, delivery
and performance of the terms of this Agreement or of any of the other
Financing Documents executed and delivered by the Borrower or any of its
Subsidiaries nor the consummation of the transactions contemplated by
this Agreement will conflict with, violate or be prevented by (a) the
charter or bylaws of the Borrower or any of its Subsidiaries, (b) any
existing mortgage, indenture, contract or agreement binding on the
Borrower or any of its Subsidiaries or affecting any of its or their
property, or (c) any Laws.
4.1.6 NO DEFAULTS, VIOLATIONS. As of the date of this
Agreement:
(a) No Default or Event of Default has occurred and
is continuing.
(b) Neither the Borrower nor any of its Subsidiaries
is in material default under any existing mortgage, indenture, contract
or agreement binding on it or them or affecting its or their property in
any respect which would be materially adverse to the business,
operations, property or financial condition of the Borrower and its
Subsidiaries, taken as a whole, or which would materially adversely
affect the ability of the Borrower and its Subsidiaries, taken as a whole
to perform their obligations under this Agreement or under any of the
other Financing Documents to which the Borrower and/or any of its
Subsidiaries is a party.
4.1.7 COMPLIANCE WITH LAWS. Neither the Borrower nor
any of its Subsidiaries is in violation of any applicable Laws
(including, without limitation, any Laws relating to employment
practices, to environmental, occupational and health standards and
controls) or order, writ, injunction, decree or demand of any court,
arbitrator, or any Governmental Authority affecting the Borrower, any of
its Subsidiaries or any of its or their properties, the violation of
which, considered in the aggregate, would materially adversely affect the
business, operations or properties of the Borrower and/or any of its
Subsidiaries taken as a whole.
4.1.8 MARGIN STOCK. None of the proceeds of the
Loans will be used, directly or indirectly, by the Borrower or any
Subsidiary for the purpose of purchasing or carrying, or for the purpose
of reducing or retiring any indebtedness which was originally incurred to
purchase or carry, any "margin security" within the meaning of Regulation
G (12 CFR Part 207), or "margin stock" within the meaning of Regulation U
(12 CFR Part 221), of the Board of Governors of the Federal Reserve
System or for any other purpose which would make the transactions
contemplated in this Agreement a "purpose credit" within the meaning of
said Regulation G or Regulation U, or cause this Agreement to violate any
other regulation of the Board of Governors of the Federal Reserve System
or the Securities Exchange Act of 1934 or the Small Business Investment
Act of 1958, as amended, or any rules or regulations promulgated under
any of such statutes.
4.1.9 INVESTMENT COMPANY ACT; MARGIN SECURITIES.
Neither the Borrower nor any of its Subsidiaries is an investment
company within the meaning of the Investment Company Act of 1940, as
amended, nor is it, directly or indirectly, controlled by or acting on
behalf of any Person which is an investment company within the meaning of
said Act. Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying "margin
security" within the meaning of Regulation G (12 CFR Part 207), or
"margin stock" within the meaning of Regulation U (12 CFR Part 221), of
the Board of Governors of the Federal Reserve System.
4.1.10 LITIGATION. Except as otherwise disclosed on
SCHEDULE 4.1.10 attached to and made a part of this Agreement, there are
no proceedings, actions or investigations pending or, so far as the
Borrower knows, threatened before or by any court, arbitrator any
Governmental Authority which, in any one case or in the aggregate, if
determined adversely to the interests of the Borrower or any Subsidiary,
would have a material adverse effect on the business, properties,
condition (financial or otherwise) or operations, present or prospective,
of the Borrower or any of its Subsidiaries taken as a whole.
4.1.11 FINANCIAL CONDITION. The consolidated financial
statements of the Borrower and its Subsidiaries dated as of September 30,
1996, are complete and correct and fairly present the financial position
of the Borrower and its Subsidiaries and the results of their operations
as of the date and for the period referred to and have been prepared in
accordance with GAAP applied on a consistent basis throughout the period
involved. There are no material liabilities, direct or indirect, fixed
or contingent, of the Borrower or any Subsidiary as of the date of such
financial statements which are not reflected therein. There has been no
materially adverse change in the financial condition or operations of the
Borrower or any Subsidiary since the date of such financial statements
and to the Borrower's knowledge no such materially adverse change is
pending. Except as permitted by the provisions of Section 6.2.5, neither
the Borrower nor any Subsidiary has guaranteed the obligations of, or
made any investment in or advances to, any Person (other than the
Borrower or any Subsidiary Guarantor), except as disclosed in such
financial statements and except that the Borrower and/or any or all of
the Subsidiary Guarantors may have guaranteed one or more leases under
which the Borrower and/or a Subsidiary Guarantor is a tenant or lessee,
as of the date of this Agreement.
4.1.12 PROFORMA FINANCIAL STATEMENTS. The Borrower has
furnished to the Agent a proforma consolidated balance sheet of the
Borrower and its Subsidiaries as of immediately after consummation of the
Venture Stock Purchase/Merger Transaction and the transactions incident
thereto (the "Proforma Balance Sheet") together with proforma financial
projections of the Parent for the five-year period subsequent to the
Venture Stock Purchase/Merger Transaction (the "Proforma Financial
Projections"). A copy of the Proforma Balance Sheet and the Proforma
Financial Projections are attached hereto as Exhibits C-1 and C-2,
respectively. The Proforma Balance Sheet is correct and complete, has
been prepared in accordance with GAAP, and fairly presents the
consolidated financial condition of the Borrower and its Subsidiaries as
of immediately after consummation of the Venture Stock Purchase/Merger
Transaction and the transactions incident thereto. The Proforma
Financial Projections represent the best estimate of the future
operations of the Parent and are based on reasonable and conservative
assumptions, but do not constitute a guaranty of actual performance.
4.1.13 FULL DISCLOSURE. The financial statements
referred to in Section 4.1.11 (Financial Condition) of this Agreement and
the statements, reports or certificates furnished by the Borrower in
connection with the Financing Documents (a) do not contain any untrue
statement of a material fact and (b) when taken in their entirety, do not
omit any material fact necessary to make the statements contained therein
not misleading. There is no fact known to the Borrower which the
Borrower has not disclosed to the Agent and the Lenders in writing prior
to the date of this Agreement with respect to the transactions
contemplated by the Financing Documents which materially and adversely
affects or in the future would, in the reasonable opinion of the Borrower
materially adversely affect the condition, financial or otherwise,
results of operations, business, or assets of the Borrower and its
Subsidiaries, taken as a whole.
4.1.14 INDEBTEDNESS FOR BORROWED MONEY. As of the date
of this Agreement, except for the Obligations and except as set forth in
SCHEDULE 4.1.14 attached to and made a part of this Agreement, the
Borrower has no Indebtedness for Borrowed Money. The Agent has received
photocopies of all promissory notes evidencing any Indebtedness for
Borrowed Money set forth in SCHEDULE 4.1.14, together with any and all
material subordination agreements, other agreements, documents, or
instruments securing, evidencing, guarantying or otherwise executed and
delivered in connection therewith.
4.1.15 SUBORDINATED DEBT; SENIOR SECURED DEBT. None of
the Subordinated Debt Loan Documents nor any of the Senior Secured Debt
Loan Documents in effect prior to the date of this Agreement have been
amended, supplemented, restated or otherwise modified except as otherwise
disclosed to the Agent in writing on or before the date of this
Agreement. In addition, the Borrower has furnished copies of each
amendment, supplement, restatement or other modification to any of the
Subordinated Debt Loan Documents executed on or before the date of this
Agreement. In addition, there does not exist any default or any event
which upon notice or lapse of time or both would constitute a default
under the terms of any of the Subordinated Debt Loan Documents or any of
the Senior Secured Debt Loan Documents.
4.1.16 TAXES. The Borrower and its Subsidiaries have
filed all returns, reports and forms for all material Taxes which, to the
knowledge of the Borrower, are required to be filed, and have paid all
such Taxes as shown on such returns or on any assessment received by it,
to the extent that such Taxes have become due, unless and to the extent
only that such Taxes, assessments and governmental charges are currently
contested in good faith and by appropriate proceedings by the Borrower,
such Taxes are not the subject of any Liens other than Permitted Liens,
and adequate reserves therefor have been established as required under
GAAP. All tax liabilities of the Borrower and its Subsidiaries were as
of the date of audited financial statements referred to in Section 4.1.11
(Financial Condition) above, and are now, adequately provided for on the
books of the Borrower and its Subsidiaries, as appropriate. No tax
liability has been asserted by the Internal Revenue Service or any state
or local authority against the Borrower or any of its Subsidiaries for
Taxes in excess of those already paid, except that the Agent and the
Lenders understand that PackerWare is to be the subject of an audit by
the Internal Revenue Service, but that such audit, to the Borrower's
knowledge, is not the result of any claimed or actual non-compliance with
any Laws.
4.1.17 ERISA. With respect to any "pension plan" as
defined in SECTION 3(2) of ERISA, which plan is now or previously has
been maintained or contributed to by the Borrower and/or any of its
Subsidiaries and/or by any commonly controlled entity: (a) no
"accumulated funding deficiency" as defined in Code 412 or ERISA
302 has occurred, whether or not that accumulated funding
deficiency has been waived; (b) no Reportable Event has occurred; (c) no
termination of any plan subject to Title IV of ERISA has occurred; (d) no
Borrower, Subsidiary nor any commonly controlled entity (as defined under
ERISA) has incurred a "complete withdrawal" within the meaning of ERISA
4203 from any Multiemployer Plan; (e) no Borrower, Subsidiary
nor any commonly controlled entity has incurred a "partial withdrawal"
within the meaning of ERISA 4205 with respect to any
Multiemployer Plan; (f) no Multiemployer Plan to which the Borrower, any
of its Subsidiaries or any commonly controlled entity has an obligation
to contribute is in "reorganization" within the meaning of ERISA
4241 nor has notice been received by the Borrower, any of its
Subsidiaries or any commonly controlled entity that such a Multiemployer
Plan will be placed in "reorganization".
4.1.18 TITLE TO PROPERTIES. Each of the Borrower and
its Subsidiaries has good title to all of its and their respective
properties, including, without limitation, the Collateral and the
properties and assets reflected in the balance sheets described in
Section 4.1.11 (Financial Condition) above, subject to any minor
imperfections in title which do not significantly detract from the use
thereof. The Borrower and each of its Subsidiaries have legal,
enforceable and uncontested rights to use freely such property and
assets.
4.1.19 PATENTS, TRADEMARKS, ETC. Each of the Borrower
and its Subsidiaries owns, possesses, or has the right to use all
necessary Patents, licenses, Trademarks, Copyrights, permits and
franchises to own its properties and to conduct its business as now
conducted, without known conflict with the rights of any other Person.
Any and all obligations to pay royalties or other charges with respect to
such properties and assets are properly reflected on the financial
statements described in Section 4.1.11 (Financial Condition) above.
4.1.20 EMPLOYEE RELATIONS. Except as disclosed on
Schedule 4.1.20 attached hereto and made a part hereof, as updated from
time to time, (a) no Borrower nor any Subsidiary thereof nor the
Borrower's or Subsidiary's employees is subject to any collective
bargaining agreement, (b) to the Borrower's knowledge, no petition for
certification or union election is pending with respect to the employees
of the Borrower or any Subsidiary and no union or collective bargaining
unit has sought such certification or recognition with respect to the
employees of the Borrower, and (c) as of the date of this Agreement,
there are no strikes, slowdowns, work stoppages or controversies pending
or, to the best knowledge of the Borrower after due inquiry, threatened
between the Borrower and its employees. Hours worked and payments made
to the employees of any one or more of the Borrower have not been in
violation of the Fair Labor Standards Act or any other applicable law
dealing with such matters. All payments due from the Borrower or any of
its Subsidiaries or for which any claim may be made against the Borrower
or any of its Subsidiaries, on account of wages and employee and retiree
health and welfare insurance and other benefits have been paid or accrued
as a liability on its or their books, as appropriate.
4.1.21 PRESENCE OF HAZARDOUS MATERIALS OR HAZARDOUS
MATERIALS CONTAMINATION.
To the best of the Borrower's knowledge and except as disclosed in
writing to the Agent in Schedule 4.1.21 hereof with respect to any
matters existing as of the date of this Agreement and except as hereafter
disclosed in writing to the Agent with respect to any matters arising
after the date of this Agreement, (a) no Hazardous Materials are located
on any real property owned, controlled or operated by the Borrower or any
of its Subsidiaries or for which the Borrower or any of its Subsidiaries
is, or is claimed to be, responsible, except for reasonable quantities of
necessary supplies for use by the Borrower and/or its Subsidiaries any of
their respective tenants in the ordinary course of its or their current
lines of business and stored, used and disposed in accordance with
applicable Laws; and (b) no property owned, controlled or operated by the
Borrower or any of its Subsidiaries or for which the Borrower or any of
its Subsidiaries has, or is claimed to have, responsibility is affected
by any material Hazardous Materials Contamination at any other property.
In addition, as of the date of this Agreement, the Borrower
represents and warrants that it has no existing monitoring or observation
xxxxx located at Lawrence, Kansas (including Aeroquip); Evansville,
Indiana; Indian Trail, North Carolina; and Reno, Nevada properties from
which groundwater can be sampled and analyzed.
4.1.22 PERFECTION AND PRIORITY OF COLLATERAL. The
Agent and the Lenders have, or upon execution and recording of UCC-1
financing statements and possession of Securities, Documents,
Instruments, Chattel Paper and Instruments will have, and will continue
to have as security for the Obligations (subject to the terms of Section
3.7), a valid and perfected Lien on and security interest in all
Collateral, free of all other Liens, claims and rights of third parties
whatsoever except Permitted Liens, including, without limitation, those
described on SCHEDULE 4.1.22.
4.1.23 PLACES OF BUSINESS AND LOCATION OF COLLATERAL.
The information contained in the Collateral Disclosure List, as
updated annually and at such other times as shall be determined by the
Borrower at any time prior to the occurrence of a Default or an Event of
Default and as shall be determined by the Agent at any time following the
occurrence of a Default or an Event of Default, is complete and correct
in all material respects. The Collateral Disclosure List completely and
accurately identifies the address of (a) the chief executive office of
the Borrower and each of the Subsidiary Guarantors, (b) any and each
other place of business of the Borrower or any of the Subsidiary
Guarantors, (c) the location of all books and records pertaining to the
Collateral, and (d) each location, other than the foregoing, where any of
the Collateral is located. The legally required places to file financing
statements with respect to the Collateral within the meaning of the
Uniform Commercial Code are the filing offices for those jurisdictions in
which the Borrower and/or any Subsidiary Guarantor, as appropriate,
maintains a place of business as identified on the Collateral Disclosure
List.
4.1.24 BUSINESS NAMES AND ADDRESSES. Except as set
forth in Schedule 4.1.24 attached hereto and made a part hereof, in the
five (5) years preceding the date hereof, neither the Borrower nor any of
its Subsidiaries (other than PAC) has changed its name, identity or
corporate structure, has conducted business under any name other than its
current name, and has conducted its business in any jurisdiction other
than those disclosed on the Collateral Disclosure List.
4.1.25 EQUIPMENT. No equipment is held by the Borrower
or any Subsidiary Guarantor on a sale on approval basis.
4.1.26 INVENTORY. All material portions of the
Inventory of the Borrower and each Subsidiary Guarantor included in the
Borrowing Base, conform to the eligibility criteria set forth in the
definition of Eligible Inventory. Except as disclosed in the Collateral
Disclosure List, no goods offered for sale by the Borrower or any
Subsidiary are consigned to or held on sale or return terms by the
Borrower or any Subsidiary.
4.1.27 ACCOUNTS. All material portions of the Accounts
included in the Borrowing Base conform to the eligibility criteria set
forth in the definition of Eligible Receivables
4.1.28 PACKERWARE MERGER TRANSACTION. The Agent has
received true and correct photocopies of the PackerWare Merger Agreement
and each of the other PackerWare Merger Agreement Documents, executed,
delivered and/or furnished on or before the Closing Date in connection
with the PackerWare Merger Transaction. Neither the PackerWare Merger
Agreement nor any of the other PackerWare Merger Agreement Documents have
been modified, changed, supplemented, canceled, amended or otherwise
altered, except as otherwise disclosed to the Agent in writing on or
before the Closing Date. The PackerWare Merger Transaction has been
effected, closed and consummated pursuant to, and in accordance with, the
terms and conditions of the PackerWare Merger Agreement and with all
applicable Laws.
4.1.29 VENTURE STOCK PURCHASE/MERGER TRANSACTION. The
Agent has received true and correct photocopies of the Venture Stock
Purchase/Merger Agreement and each of the other Venture Stock
Purchase/Merger Documents, executed, delivered and/or furnished on or
before the date of this Agreement in connection with the Venture Stock
Purchase/Merger Transaction. Neither the Venture Stock Purchase/Merger
Agreement nor any of the other Venture Stock Purchase/Merger Documents
have been modified, changed, supplemented, canceled, amended or otherwise
altered, except as otherwise disclosed to the Agent in writing on or
before the date of this Agreement. The Venture Stock Purchase/Merger
Transaction has been effected, closed and consummated pursuant to, and in
accordance with, the terms and conditions of the Venture Stock
Purchase/Merger Agreement and with all applicable Laws. As of the date
of this Agreement, Venture Southeast and Venture Midwest are Wholly-Owned
Subsidiaries of the Borrower.
4.1.30 XXXX-XXXXX-XXXXXX. The Borrower, the Seller and
all other necessary Persons, as appropriate, have made such filings as
may be required by the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and have provided such supplemental information that
may be required by such Act, with respect to the sales contemplated by
the PackerWare Merger Transaction and the Venture Stock Purchase/Merger
Transaction and/or the Container Purchase Agreement Transaction. The
waiting periods under such Act have terminated or expired.
4.1.31 INCREASE IN TOTAL REVOLVING CREDIT COMMITTED
AMOUNT AND TERM LOANS PERMITTED UNDER INDENTURE. The Borrower hereby
represents and warrants that neither the increase in the Total Revolving
Credit Committed Amount from $30,000,000 to $50,000,000 nor the
obligations of the Borrower and the Guarantors under and with respect to
the Term Loans are in violation of or otherwise constitute a default
under the provisions of the Indenture. In particular, the Term Loans
constitute "Senior Indebtedness" under the provisions of the Indenture.
SECTION 4.2 SURVIVAL; UPDATES OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in or made under or in
connection with this Agreement and the other Financing Documents shall
survive the date of this Agreement, the making of any advance under the
Loans and extension of credit made hereunder, and the incurring of any
other Obligations and shall be deemed to have been made at the time of
the making of each advance under the Loans or the issuance of each Letter
of Credit and/or each Bond Letter of Credit, except that (i)
representations and warranties which relate to a specific date need only
be true and correct as of such date, and (ii) the representations and
warranties which relate to financial statements which are referred to in
Section 4.1.11, shall also be deemed to cover financial statements
furnished from time to time to the Agent and the Lenders pursuant to
Section 6.1.1 (Financial Statements) of this Agreement. The Borrower
shall have the right from time to time to modify or supplement any of the
Schedules and/or the Collateral Disclosure List referred to in this
Article IV, and following any such modification or supplement the
representations in this Article shall be deemed to refer to such
Schedules and Collateral Disclosure List as so modified or supplemented;
provided, that the Borrower will be deemed to have represented at the
time of delivery of any such modification or supplement that the
modifications of and supplements to such Schedules and/or Collateral
Disclosure List after the date of this Agreement do not relate to events
or circumstances which individually or in the aggregate have resulted in
a material adverse change in the business or operations of the Borrower
and its Subsidiaries taken as a whole or which would otherwise constitute
a Default or an Event of Default.
ARTICLE 5
CONDITIONS PRECEDENT
SECTION 5.1 CONDITIONS TO THE INITIAL ADVANCE AND INITIAL LETTER
OF CREDIT.
The making of the initial advance under the Loans and the issuance
of the initial Letter of Credit and the initial Bond Letter of Credit are
subject to the fulfillment on or before the date of this Agreement of the
following conditions precedent in a manner reasonably satisfactory in
form and substance to the Agent and its counsel:
5.1.1 ORGANIZATIONAL DOCUMENTS - BORROWER. The Agent
shall have received for the Borrower:
(a) a certificate of good standing certified by the
Secretary of State, or other appropriate Governmental Authority, of
the state of incorporation of the Borrower;
(b) a certificate of qualification to do business for
the Borrower certified by the Secretary of State or other
Governmental Authority of each state in which the Borrower conducts
business;
(c) a certificate dated as of the date of this
Agreement by the Secretary or an Assistant Secretary of the Borrower
covering:
(i) true and complete copies of that Borrower's
corporate charter, bylaws, and all amendments thereto;
(ii) true and complete copies of the resolutions
of its Board of Directors authorizing (i) the execution,
delivery and performance of the Financing Documents and
the Venture Stock Purchase/Merger Documents to which it is
a party, (ii) the borrowings hereunder, (iii) the granting
of the Liens contemplated by this Agreement and the
Financing Documents to which the Borrower is a party, and
(iv) the Venture Stock Purchase/Merger Transaction;
(iii) the incumbency, authority and signatures
of the officers of the Borrower authorized to sign this
Agreement and the other Financing Documents to which the
Borrower is a party; and
(iv) the identity of the Borrower's current
directors, common stock holders and other equity holders,
as well as their respective percentage ownership
interests.
5.1.2 OPINION OF BORROWER'S COUNSEL. The Agent
shall have received the favorable opinion of counsel for the Borrower and
its Subsidiaries addressed to the Agent and the Lenders in form
satisfactory to the Agent. The Agent agrees that local counsel opinions
shall be required only for the States of Nevada, North Carolina, Kansas,
Indiana, Iowa, South Carolina and Ohio.
5.1.3 ORGANIZATIONAL DOCUMENTS - SUBSIDIARY
GUARANTOR.
The Agent shall have received for each Subsidiary Guarantor:
(a) a certificate of good standing certified by the
Secretary of State, or other appropriate Governmental Authority, of
the state of incorporation;
(b) a certificate of qualification to do business
certified by the Secretary of State or other Governmental Authority
of each state in which each Subsidiary Guarantor conducts business;
(c) a certificate dated as of the date of this
Agreement by the Secretary or an Assistant Secretary of each
Corporate Guarantor covering:
(i) true and complete copies of the its
corporate charter, bylaws, and all amendments thereto;
(ii) true and complete copies of the resolutions
of it's Board of Directors authorizing the execution,
delivery and performance of the Financing Documents to
which it is a party and the granting of the Liens
contemplated by any of the Financing Documents to which it
is a party;
(iii) the incumbency, authority and signatures
of its officers to sign the Guaranty and all other
Financing Documents to which it is a party;
(iv) the identity of it's current directors,
common stock holders and other equity holders, as well as
their respective percentage ownership interests;
(d) the favorable opinion of counsel for the
Subsidiary Guarantors addressed to the Agent and the Lenders and in
form satisfactory to the Agent.
5.1.4 CONSENTS, LICENSES, APPROVALS, ETC.The Agent
shall have received copies of all consents, licenses and approvals,
required in connection with the execution, delivery, performance,
validity and enforceability of the Financing Documents, and the Venture
Stock Purchase/Merger Documents, and such consents, licenses and
approvals shall be in full force and effect.
5.1.5 NOTES. The Agent shall have received for
delivery to each of the Lenders the Term Notes and the Revolving Credit
Notes, each conforming to the requirements hereof and executed by a
Responsible Officer of the Borrower and attested by a duly authorized
representative of the Borrower.
5.1.6 FINANCING DOCUMENTS AND COLLATERAL. The
Borrower and each Subsidiary Guarantor shall have executed and delivered
the Financing Documents to be executed by it, and shall have delivered
original Chattel Paper, Instruments, Securities, and related Collateral
and all opinions, title insurance, and other documents contemplated by
Article 3 hereof.
5.1.7 OTHER FINANCING DOCUMENTS. In addition to the
Financing Documents to be delivered by the Borrower, the Agent shall have
received the Financing Documents duly executed and delivered by Persons
other than the Borrower.
5.1.8 OTHER DOCUMENTS, ETC. The Agent shall have received
such other certificates, opinions, documents and instruments confirmatory
of or otherwise relating to the transactions contemplated hereby as may
have been reasonably requested by the Agent.
5.1.9 PAYMENT OF FEES. The Agent and the Lenders shall
have received payment of any Fees due on or before the date of this
Agreement.
5.1.10 COLLATERAL DISCLOSURE LIST. The Borrower shall
have delivered the Collateral Disclosure List required under the
provisions of Section 3.3 (Collateral Disclosure List) hereof duly
executed by a Responsible Officer of the Borrower and each Subsidiary
Guarantor, as appropriate. The Agent and the Lenders acknowledge and
agree that the Borrower previously delivered a Collateral Disclosure List
to the Agent on the Closing Date and an additional Collateral Disclosure
List relating to Xxxxx Design on or about May 13, 1997, and that,
accordingly, the Borrower shall not be required to furnish to the Agent a
new Collateral Disclosure List, but shall be required only to update the
information contained in the previous Collateral Disclosure Lists
furnished to the Agent to the extent such information has changed in any
material respect.
5.1.11 RECORDINGS AND FILINGS. The Borrower and each
Subsidiary Guarantor, as appropriate, shall have: (a) executed and
delivered all Financing Documents (including, without limitation, UCC-1
and UCC-3 statements) required to be filed, registered or recorded in
order to create, in favor of the Agent and the Lenders, a perfected Lien
in the Collateral (subject only to the Permitted Liens) in form and in
sufficient number for filing, registration, and recording in each office
in each jurisdiction in which such filings, registrations and
recordations are required, and (b) delivered such evidence as the Agent
may deem satisfactory that all necessary filing fees and all recording
and other similar fees, and all Taxes and other expenses related to such
filings, registrations and recordings will be or have been paid in full.
5.1.12 INSURANCE CERTIFICATE. The Agent shall have
received an insurance certificate in accordance with the provisions of
Section 6.1.8 (Insurance) and Section 6.1.17 (Insurance With Respect to
Equipment and Inventory) of this Agreement. The Agent and the Lenders
acknowledge and agree that a series of insurance certificates acceptable
to the Agent were furnished to the Agent on or about the Closing Date and
again on May 13, 1997 and that additional insurance certificates will not
be required except with respect to the insurance coverages of Xxxxx
Venture, Venture Southeast and Venture Midwest.
5.1.13 LANDLORD'S WAIVERS. Unless otherwise agreed by
the Agent, the Agent shall have received a landlord's waiver from each
landlord of each and every business premise leased by the Borrower and/or
any Subsidiary Guarantor and on which any of the Collateral is or may
hereafter be located, which landlords' waivers must be reasonably
acceptable to the Agent and its counsel in their sole and absolute
discretion.
5.1.14 BAILEE ACKNOWLEDGEMENTS. Unless otherwise
agreed by the Agent, the Agent shall have received an agreement
acknowledging the Liens of the Agent and the Lender from each bailee,
warehouseman, consignee or similar third party which has possession of
any of the Collateral, which agreements must be reasonably acceptable to
the Agent and its counsel in their sole and absolute discretion.
5.1.15 FIELD EXAMINATION. The Agent shall have
completed a field examination and audit of the business, operations and
income of the Borrower and each Subsidiary Guarantor, the results of
which field examination and audit shall be in all respects acceptable to
the Agent in its sole and absolute discretion and shall include reference
discussions with key customers and vendors. The Agent acknowledges and
agrees that a field examination and audit has not yet been completed for
Xxxxx Venture, Venture Southeast and Venture Midwest and that such field
examination and audit will be completed as soon as commercially possible
after the date of this Agreement and that pending such completion the
Assets and properties of Xxxxx Venture, Venture Southeast and Venture
Midwest shall not be eligible for inclusion in the Borrowing Base, but
that the Borrower shall be permitted to continue to obtain advances of
the Revolving Loan, subject to the provisions of this Agreement.
5.1.16 APPRAISAL. The Agent shall have received
appraisals of all real and personal property owned by the Borrower and/or
each Subsidiary Guarantor, all of which appraisals shall be performed by
one or more appraisers satisfactory in all respects to the Agent, shall
be in such form and content as may be required by the Agent.
5.1.17 PROFORMA BALANCE SHEET AND PROJECTIONS. The
Agent shall have received and approved the Borrower's Proforma Balance
Sheet and Proforma Financial Projections, which Proforma Balance Sheet
and Proforma Financial Projections must be in form and content acceptable
to the Agent in its sole and absolute discretion.
5.1.18 STOCK CERTIFICATES AND STOCK POWERS. The Agent
shall have received all of the original stock certificates of each
Subsidiary Guarantor and fully executed irrevocable stock powers from the
holders of all such stock certificates.
5.1.19 VENTURE STOCK PURCHASE/MERGER AGREEMENT
TRANSACTION.
(a) The Venture Stock Purchase/Merger Transaction
shall have been completed and closed prior to or simultaneously herewith
upon terms and conditions reasonably satisfactory to the Agent, in
accordance with the Venture Stock Purchase/Merger Agreement and all
applicable Laws.
(b) The Agent shall have received photocopies of all
Venture Stock Purchase/Merger Documents executed, delivered and/or
furnished in connection with the Venture Stock Purchase/Merger
Transaction, together with a certificate signed by a Responsible Officer
of the Borrower certifying that the Venture Stock Purchase/Merger
Agreement and the other Venture Stock Purchase/Merger Documents furnished
to the Agent are true, correct, in full force and effect and the
provisions thereof have not been in any way modified, amended or waived,
except as otherwise disclosed in writing to the Agent on or before the
date of this Agreement.
5.1.20 ENVIRONMENTAL REPORTS. The Agent shall have
received and reviewed a Phase I environmental assessment for each parcel
of real property owned or leased by the Borrower or any Subsidiary
Guarantor, each of which environmental assessment has been performed by a
reputable and recognized environmental consulting firm acceptable to the
Agent and has revealed no material Hazardous Materials Contamination or
material violations of any Environmental Laws, and shall otherwise be in
all respects acceptable to the Agent.
5.1.21 FINANCIAL STATEMENTS. The Agent shall have
received and reviewed copies of the annual audited financial statements
in reasonable detail satisfactory to the Agent relating to the Borrower
and its Subsidiaries for the fiscal years 1993, 1994 and 1995, prepared
in accordance with GAAP, which financial statements shall include a
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as of the end of each such fiscal year and consolidated and
consolidating statements of income, cash flows and changes in
shareholders equity of the Borrower and its Subsidiaries for each such
fiscal year, except that the 1993 and 1994 financial statements include
only consolidated information. In addition, the Agent shall have
received and reviewed copies of the most recent interim monthly financial
statements for the Borrower and its Subsidiaries for fiscal years 1995
and 1996, all prepared in accordance with GAAP.
SECTION 5.2. CONDITIONS TO ALL EXTENSIONS OF CREDIT. The making
of all advances under the Loans and the issuance of all Letters of Credit
and all Bond Letters of Credit is subject to the fulfillment of the
following conditions precedent in a manner reasonably satisfactory in
form and substance to the Agent:
5.2.1 DEFAULT. There shall exist no Event of Default
or Default hereunder.
5.2.2 REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Borrower contained among the
provisions of this Agreement shall be true and with the same effect as
though such representations and warranties had been made at the time of
the making of, and of the request for, each advance under the Loans or
the issuance of each Letter of Credit or Bond Letter of Credit, except
that (i) the representations and warranties which relate to a specific
date need only be true and correct as of such date and (ii) the
representations and warranties which relate to financial statements which
are referred to in Section 4.1.11, shall also be deemed to cover
financial statements furnished from time to time to the Agent pursuant to
Section 6.1.1 (Financial Statements) of this Agreement.
5.2.3 ADVERSE CHANGE. No material adverse change
shall have occurred in the condition (financial or otherwise), operations
or business of the Borrower or any Subsidiary Guarantor which would, in
the good faith judgment of the Agent, materially impair the ability of
the Borrower or any Subsidiary Guarantor to pay or perform any of the
Obligations.
5.2.4 LEGAL MATTERS. All legal documents incident to
each advance under the Loans and each of the Letters of Credit and Bond
Letters of Credit shall be reasonably satisfactory to the Agent.
ARTICLE 6
COVENANTS OF THE BORROWER
SECTION 6.1 AFFIRMATIVE COVENANTS. So long as any of the
Obligations (or any the Commitments therefor) shall be outstanding
hereunder, the Borrower agrees jointly and severally with the Agent and
the Lenders as follows:
6.1.1 FINANCIAL STATEMENTS. The Borrower shall
furnish to the Agent for distribution to the Lenders:
(a) ANNUAL STATEMENTS AND CERTIFICATES. The
Borrower shall furnish to the Agent for distribution to the Lenders as
soon as available, but in no event more than ninety (90) days after the
close of the Borrower's fiscal years, (i) a copy of the annual
consolidated and consolidating financial statements in reasonable detail
satisfactory to the Agent relating to the Borrower and its Subsidiaries,
prepared in accordance with GAAP and examined and certified by
independent certified public accountants satisfactory to the Agent, which
financial statements shall include a consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as of the end of such
fiscal year and consolidated and consolidating statements of income, cash
flows and changes in shareholders equity of the Borrower and its
Subsidiaries for such fiscal year, and (ii) a Compliance Certificate, in
substantially the form attached to this Agreement as EXHIBIT D,
containing a detailed computation of each financial covenant in this
Agreement which is applicable for the period reported, a certification
that no change has occurred to the information contained in the
Collateral Disclosure List (except as set forth any schedule attached to
the certification) and (iii) a management letter in the form prepared by
the Borrower's independent certified public accountants, but only if and
to the extent customarily obtained by the Borrower. The Agent agrees
that any one of the "Big 6" accounting firms is satisfactory to the Agent
for purposes of this Section 6.1.1(a), except to the extent the Agent in
its reasonable discretion and based on good faith and legitimate concerns
determines that any such accounting firm would be unacceptable because of
any conflict of interest or any material adverse change affecting such
firm's reliability or financial viability.
(b) ANNUAL OPINION OF ACCOUNTANT. The Borrower
shall furnish to the Agent for distribution to the Lenders as soon as
available, but in no event more than ninety (90) days after the close of
the Borrower's fiscal years, a letter or opinion of the accounting firm
which examined and certified the annual financial statement relating to
the Borrower and its Subsidiaries stating whether anything in such
accounting firm's examination has revealed the occurrence of a Default or
an Event of Default hereunder, and, if so, stating the facts with respect
thereto.
(c) QUARTERLY STATEMENTS AND CERTIFICATES. The
Borrower shall furnish to the Agent for distribution to the Lenders as
soon as available, but in no event more than forty-five (45) days after
the close of the Borrower's fiscal quarters (other than the final fiscal
quarter), consolidated and consolidating balance sheets of the Borrower
and its Subsidiaries as of the close of such period, consolidated and
consolidating income, cash flows and changes in shareholders equity
statements for such period, and a Compliance Certificate, in
substantially the form attached to this Agreement as EXHIBIT D,
containing a detailed computation of each financial covenant in this
Agreement which is applicable for the period reported, each prepared by a
Responsible Officer of or on behalf of the Borrower in a format
acceptable to the Agent, all as prepared and certified by a Responsible
Officer of the Borrower and accompanied by a certificate of that officer
stating whether any event has occurred which constitutes a Default or an
Event of Default hereunder, and, if so, stating the facts with respect
thereto.
(d) MONTHLY STATEMENTS AND CERTIFICATES. The
Borrower shall furnish to the Agent for distribution to the Lenders as
soon as available, but in no event more than thirty-five (35) days after
the close of the Borrower's fiscal months, consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as of the close of
such period, consolidated and consolidating income, cash flows and
changes in shareholders equity statements for such period, and a detailed
computation of each financial covenant in this Agreement which is
applicable for the period reported, all as prepared and certified by a
Responsible Officer of the Borrower and accompanied by a certificate of
that officer stating whether any event has occurred which constitutes a
Default or an Event of Default hereunder, and, if so, stating the facts
with respect thereto.
(e) MONTHLY REPORTS. As part of the Borrowing Base
Certificate, the Borrower shall furnish to the Agent for distribution to
the Lenders within twenty (20) days after the end of each fiscal month, a
report containing the following information:
(i) a detailed aging schedule of all Accounts
for the Borrower and each Subsidiary Guarantor by Account Debtor, in
such detail, and accompanied by such supporting information, as the
Agent may from time to time reasonably request;
(ii) a detailed aging of all accounts payable by
supplier, in such detail, and accompanied by such supporting
information, as the Agent may from time to time reasonably request;
and
(iii) a listing of all Inventory of the Borrower
and each Subsidiary Guarantor by component, category and location,
in such detail, and accompanied by such supporting information as
the Agent may from time to time reasonably request.
(f) ANNUAL BUDGET AND PROJECTIONS. Commencing with
fiscal year 1997, the Borrower shall furnish to the Lender as soon as
available, but in no event later than the 10th day before the end of each
fiscal year:
(i) a consolidated and consolidating budget and
pro forma financial statements on a month-to-month basis for the
following fiscal year, and
(ii) three-year financial projections or
financial projections for such lesser or greater period to the
extent routinely prepared by the Borrower in the ordinary course of
its business, which projections shall include both consolidated and
consolidating projections with respect to the Borrower and its
Subsidiaries.
(g) AMENDMENTS TO SUBORDINATED DEBT LOAN DOCUMENTS.
The Borrower will furnish copies of each amendment, supplement,
restatement or other modification to any of the Subordinated Debt Loan
Documents executed at any time after the Closing Date on or before the
effective date of such amendment, supplement, restatement or other
modification.
(h) ADDITIONAL REPORTS AND INFORMATION. The
Borrower shall furnish to the Agent for distribution to the Lenders
promptly, such additional information, reports or statements as the Agent
and/or any of the Lenders may from time to time reasonably request.
6.1.2 REPORTS TO SEC AND TO STOCKHOLDERS. The
Borrower will furnish to the Agent for distribution to the Lenders,
promptly upon the filing or making thereof, at least one (1) copy of all
reports, notices and proxy statements sent by the Parent, the Borrower or
any of their respective Subsidiaries to its stockholders, and of all
regular and other reports filed by the Parent, the Borrower or any of
their respective Subsidiaries with the Securities and Exchange
Commission.
6.1.3 RECORDKEEPING, RIGHTS OF INSPECTION, FIELD
EXAMINATION, ETC.
(a) The Borrower shall, and shall cause each of the
Subsidiary Guarantors to, maintain (i) a standard system of accounting in
accordance with GAAP, and (ii) proper books of record and account in
which full, true and correct entries are made of all dealings and
transactions in relation to its properties, business and activities.
(b) The Borrower shall, and shall cause each of its
Subsidiaries to, permit authorized representatives of the Agent and any
of the Lenders to visit and inspect the properties of the Borrower and
its Subsidiaries, to review, audit, check and inspect the Collateral at
any time with reasonable prior notice prior to the occurrence of an Event
of Default, and without notice at any time on or after the occurrence of
an Event of Default, to review, audit, check and inspect the other books
of record of the Borrower and its Subsidiaries at any time with or
without notice and to make abstracts and photocopies thereof, and to
discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries, with the officers, directors, employees and other
representatives of the Borrower and its Subsidiaries and their respective
accountants, all at such times during normal business hours and other
reasonable times and as often as the Agent and/or any of the Lenders may
reasonably request.
(c) The Borrower hereby irrevocably authorizes and
directs all accountants and auditors employed by the Borrower and/or any
of its Subsidiaries at any time prior to the repayment in full of the
Obligations to exhibit and deliver to the Agent for distribution to the
Lenders copies of any and all of the financial statements, trial
balances, management letters, or other accounting records of any nature
of the Borrower and/or any or all of its Subsidiaries in the accountant's
or auditor's possession, and to disclose to the Agent and any of the
Lenders any information they may have concerning the financial status and
business operations of the Borrower and/or any or all of its
Subsidiaries. Further, the Borrower hereby authorizes all Governmental
Authorities to furnish to the Agent for distribution to the Lenders
copies of reports or examinations relating to the Borrower and/or any or
all Subsidiaries, whether made by the Borrower or otherwise. The Agent
agrees that it shall not request any of the foregoing items directly from
any accountants or auditors employed by the Borrower or any Subsidiary at
any time prior to the occurrence of an Event of Default unless (i) the
Agent shall have first requested such items from the Borrower and the
Borrower shall have failed or is unable to furnish the requested items
promptly and (ii) the Agent shall have notified the Borrower and/or the
respective Subsidiary, as appropriate. Upon the Borrower's request, the
Agent will furnish copies of all items obtained by the Agent from any
accountants or auditors for the Borrower unless the Agent is legally
prohibited from so doing.
(d) All reasonable costs and expenses incurred by,
or on behalf of, the Agent in connection with the conduct of any of the
foregoing shall be part of the Enforcement Costs and shall be payable to
the Agent upon demand. The Borrower acknowledges and agrees that such
expenses may include, but shall not be limited to, any and all out-of-
pocket costs and expenses of the Agent's employees and agents in, and
when, travelling to any of the facilities of the Borrower or any
Subsidiary Guarantor.
6.1.4 CORPORATE EXISTENCE. Except in connection
with consummation of those transactions permitted by Section 6.2.1, the
Borrower shall maintain, and shall cause each of its Subsidiaries to
maintain, its corporate existence in good standing in the jurisdiction in
which it is incorporated and in each other jurisdiction where it is
required to register or qualify to do business if the failure to do so in
such other jurisdiction would have a material adverse effect (i) on the
ability of the Borrower or any Subsidiary Guarantor to perform the
Obligations, (ii) on the conduct of the operations of the Borrower and
the Subsidiary Guarantors, taken as a whole, (iii) on the consolidated
financial condition of the Borrower and its Subsidiaries, taken as a
whole, or (iv) on the value of, or the ability of the Agent and the
Lenders to realize upon, any of the Collateral.
6.1.5 COMPLIANCE WITH LAWS. The Borrower shall
comply, and shall cause each of its Subsidiaries to comply, with all
applicable Laws and observe the valid requirements of all Governmental
Authorities, the noncompliance with or the nonobservance of which would
have a material adverse effect (i) on the ability of the Borrower or any
Subsidiary Guarantor to perform the Obligations, (ii) on the conduct of
the operations of the Borrower and the Subsidiary Guarantors, taken as a
whole, (iii) on the consolidated financial condition of the Borrower and
its Subsidiaries, taken as a whole, or (iv) on the value of, or the
ability of the Agent and the Lenders to realize upon, any of the
Collateral.
6.1.6 PRESERVATION OF PROPERTIES. Except as
otherwise expressly permitted by the provisions of this Agreement, the
Borrower will, and will cause each of its Subsidiaries to, at all times
(a) maintain, preserve, protect and keep its material properties, whether
owned or leased, in good operating condition, working order and repair
(ordinary wear and tear excepted), and from time to time will make all
proper repairs, maintenance, replacements, additions and improvements
thereto needed to maintain such properties in good operating condition,
working order and repair, and (b) do or cause to be done all things
necessary to preserve and to keep in full force and effect its material
franchises, leases of real and personal property, trade names, patents,
trademarks and permits which are necessary for the orderly continuance of
its business.
6.1.7 LINE OF BUSINESS. The Borrower will
continue and, will cause its Subsidiaries to continue, to engage
substantially only in the business of manufacturing, marketing, selling
and distributing plastic products.
6.1.8 INSURANCE. The Borrower will, and will
cause each of its Subsidiaries to, at all times maintain with "A" or
better rated insurance companies such insurance as is required by
applicable Laws and such other insurance, in such amounts, of such types
and against such risks, hazards, liabilities, casualties and
contingencies as are usually insured against in the same geographic areas
by business entities engaged in the same or similar business. Without
limiting the generality of the foregoing, the Borrower will, and will
cause each of its Subsidiaries to, keep adequately insured all of its
property against loss or damage resulting from fire or other risks
insured against by extended coverage and maintain public liability
insurance against claims for personal injury, death or property damage
occurring upon, in or about any properties occupied or controlled by it,
or arising in any manner out of the businesses carried on by it. The
Borrower shall deliver to the Agent on the Closing Date (and thereafter
on each date there is a material change in the insurance coverage) a
certificate of a Responsible Officer of the Borrower containing a
detailed list of the insurance then in effect and stating the names of
the insurance companies, the types, the amounts and rates of the
insurance, dates of the expiration thereof and the properties and risks
covered thereby.
6.1.9 TAXES. Except to the extent that the
validity or amount thereof is being contested in good faith and by
appropriate proceedings, the Borrower will, and will cause each of its
Subsidiaries, to pay and discharge all Taxes prior to the date when the
failure to pay such Taxes will give rise to a Default or an Event of
Default. The Borrower shall furnish to the Agent at such times as the
Agent may require proof satisfactory to the Agent of the making of
payments or deposits required by applicable Laws including, without
limitation, payments or deposits with respect to amounts withheld by the
Borrower and/or any Subsidiary Guarantor from wages and salaries of
employees and amounts contributed by the Borrower and/or any Subsidiary
Guarantor on account of federal and other income or wage taxes and
amounts due under the Federal Insurance Contributions Act, as amended.
6.1.10 ERISA. The Borrower will, and will cause each
of its Subsidiaries and Affiliates to, comply with the funding
requirements of ERISA with respect to employee pension benefit plans for
its respective employees. The Borrower will not permit, and will not
allow any Subsidiary to permit, with respect to any employee benefit plan
or plans covered by Title IV of ERISA (a) any prohibited transaction or
transactions under ERISA or the Internal Revenue Code, which results, or
would result, in any material liability of the Borrower and/or any of its
Subsidiaries and Affiliates, or (b) any Reportable Event if, upon
termination of the plan or plans with respect to which one or more such
Reportable Events shall have occurred, there is or would be any material
liability of the Borrower and/or any of its Subsidiaries and Affiliates
to the PBGC. Upon the Agent's request, the Borrower will deliver to the
Agent a copy of the most recent actuarial report, financial statements
and annual report completed with respect to any "defined benefit plan",
as defined in ERISA.
6.1.11 NOTIFICATION OF EVENTS OF DEFAULT AND ADVERSE
DEVELOPMENTS.
The Borrower shall promptly notify the Agent and the Lenders upon
obtaining knowledge of the occurrence of:
(a) any Event of Default;
(b) any Default;
(c) any litigation instituted or threatened against
the Borrower or any of its Subsidiaries and of the entry of any
judgment or Lien (other than any Permitted Liens) against any of the
assets or properties of the Borrower or any Subsidiary where the
claims against the Borrower or any Subsidiary exceed One Million
Dollars ($1,000,000) and are not covered by insurance;
(d) the receipt by the Borrower or any Subsidiary
Guarantor of any notice, claim or demand from any Governmental
Authority which alleges that the Borrower or any Subsidiary
Guarantor is in material violation of any of the terms of, or has
failed to comply with any applicable material Laws regulating its
operation and business, including, but not limited to, the
Occupational Safety and Health Act and the Environmental Protection
Act, the noncompliance with which would have a materially adverse
effect on the Borrower and the Subsidiary Guarantors, taken as a
whole;
(e) any other development in the business or affairs
of the Borrower or any of its Subsidiaries which is materially
adverse to the Borrower and its Subsidiaries taken as a whole;
in each case describing in detail satisfactory to the Agent the nature
thereof and the action the Borrower or any Subsidiary, as the case may
be, proposes to take, if any, with respect thereto.
6.1.12 HAZARDOUS MATERIALS; CONTAMINATION. The
Borrower agrees to:
(a) give notice to the Agent immediately upon
acquiring knowledge of the presence of any Hazardous Materials
or any Hazardous Materials Contamination on any property owned,
operated or controlled by the Borrower or any Subsidiary
Guarantor or for which the Borrower or any Subsidiary Guarantor
is, or is claimed to be, responsible (provided that such notice
shall not be required for Hazardous Materials placed or stored
on such property in accordance with applicable Laws in the
ordinary course (including, without limitation, quantity) of
the line of business expressly described in this Agreement or
as described in any Phase I environmental assessments expressly
referenced herein or in any schedule attached hereto), with a
full description thereof;
(b) promptly comply with any Laws, the
noncompliance with which would have a materially adverse effect
on the Borrower and the Subsidiary Guarantors, taken as a whole
or on the value of any material portion of the Collateral or
the ability of the Agent to realize upon the value of any such
Collateral requiring the removal, treatment or disposal of
Hazardous Materials or Hazardous Materials Contamination and
provide the Agent with reasonably satisfactory evidence of such
compliance;
(c) as part of the Obligations, defend,
indemnify and hold harmless the Agent, each of the Lenders and
each of their respective agents, employees, trustees,
successors and assigns from any and all claims which may now or
in the future (whether before or after the termination of this
Agreement) be asserted as a result of the presence of any
Hazardous Materials or any Hazardous Materials Contamination on
any property owned, operated or controlled by the Borrower or
any Subsidiary Guarantor for which the Borrower or any
Subsidiary Guarantor is, or is claimed to be, responsible which
claims relate to the financing and/or Liens contemplated by
this Agreement, but which claims do not arise out of the gross
negligence or willful misconduct of the Agent or any of the
Lenders. The Borrower acknowledges and agrees that this
indemnification shall survive the termination of this Agreement
and the Commitments and the payment and performance of all of
the other Obligations.
(d) Within two (2) months of the Closing Date,
(i) use its commercially reasonable efforts to cause the
removal of a sump pump at the Aeroquip facility, located
at Lawrence, Kansas; and (ii) furnish to the Agent such
reports and other information as shall be available to the
Borrower regarding the removal of impacted contaminated
soils located at the Evansville, Indiana property at the
drum storage pad and waste oil tank area based on a
delineation of the scope and extent of contamination; and
(e) Within nine (9) months of the Closing Date
produce a report from a qualified environmental
consultant, who is reasonably acceptable to the Agent and
who certifies as to the removal of impacted soils from the
Reno, Nevada location (as identified in Xxxxxxxx & Xxxxxx,
Inc.'s Phase II Environmental Site Assessment, dated
January 13, 1997) exhibiting TPH concentrations that
exceed the State of Nevada action level of 100 mg/kg.
6.1.13 FINANCIAL COVENANTS.
(a) TANGIBLE CAPITAL FUNDS. The Borrower and
each of the Subsidiary Guarantors, on a consolidated basis, will
attain a Tangible Capital Funds of not less than the following
amounts as of the following dates:
DATE AMOUNT
December 31, 1997 $32,000,000
March 31, 1998 $33,000,000
June 30, 1998 $33,000,000
September 30, 1998 $33,500,000
December 31, 1998 $33,000,000
March 31, 1999 $33,500,000
June 30, 1999 $35,000,000
September 30, 1999 $37,000,000
December 31, 1999 $41,000,000
March 31, 2000 $41,500,000
June 30, 2000 $44,000,000
September 30, 2000 $50,000,000
December 31, 2000 $55,000,000
March 31, 2001 $57,000,000
June 30, 2001 $60,000,000
September 30, 2001 $65,000,000
December 31, 2001 $73,000,000
(b) FUNDED DEBT TO EBITDA . The Borrower and
each Subsidiary Guarantor, on a consolidated basis, will not at any
time permit the ratio of (x) Funded Debt to (y) EBITDA, for the
prior twelve (12) month period, to be greater than the following
amounts as of the following dates:
DATE RATIO
December 31, 1997 6.00 to 1.00
March 31, 1998 6.00 to 1.00
June 30, 1998 5.00 to 1.00
September 30, 1998 4.50 to 1.00
December 31, 1998 4.00 to 1.00
March 31, 1999 4.00 to 1.00
June 30, 1999 3.75 to 1.00
September 30, 1999 3.75 to 1.00
December 31, 1999 3.50 to 1.00
March 31, 2000 3.50 to 1.00
June 30, 2000 3.25 to 1.00
September 30, 2000 3.25 to 1.00
December 31, 2000 3.00 to 1.00
March 31, 2001 3.00 to 1.00
June 30, 2001 3.00 to 1.00
September 30, 2001 3.00 to 1.00
December 31, 2001 3.00 to 1.00
(c) INTEREST COVERAGE RATIO. The Borrower and
each Subsidiary Guarantor will maintain, on a consolidated basis and
tested as of the last day of each fiscal quarter in each fiscal year
for the three (3), six (6), nine (9) or twelve (12) month period of
such fiscal year, as appropriate, ending on that date, an Interest
Coverage Ratio of not less than the following amounts as of the
following dates:
December 31, 1997 1.90 to 1.00
March 31, 1998 1.90 to 1.00
June 30, 1998 2.00 to 1.00
September 30, 1998 2.00 to 1.00
December 31, 1998 2.00 to 1.00
March 31, 1999 2.00 to 1.00
June 30, 1999 2.00 to 1.00
September 30, 1999 2.00 to 1.00
December 31, 1999 2.50 to 1.00
March 31, 2000 2.50 to 1.00
June 30, 2000 2.50 to 1.00
September 30, 2000 2.50 to 1.00
December 31, 2000 2.50 to 1.00
March 31, 2001 2.50 to 1.00
June 30, 2001 2.50 to 1.00
September 30, 2001 2.50 to 1.00
December 31, 2001 2.50 to 1.00
(d) FIXED CHARGE COVERAGE RATIO. The Borrower
and each of the Subsidiary Guarantor will maintain, on a
consolidated basis and tested as of the last day of each fiscal
year, a Fixed Charge Coverage Ratio of not less than the following
amounts as of the following dates:
PERIOD RATIO
December 31, 1997 0.90 to 1.00
December 31, 1998 1.00 to 1.00
December 31, 1999 1.00 to 1.00
December 31, 2000 1.00 to 1.00
December 31, 2001 1.00 to 1.00
(e) DEBT SERVICE COVERAGE RATIO. The Borrower
and each Subsidiary Guarantor will maintain, on a consolidated basis
and tested as of the last day of each fiscal quarter in each fiscal
year for the three (3), six (6), nine (9) or twelve (12) month
period of such fiscal year, as appropriate, ending on that date, a
Debt Service Coverage Ratio of not less than 1.50 to 1.0.
6.1.14 COLLECTION OF ACCOUNTS. Until the
occurrence of an Event of Default, the Borrower and its Subsidiaries
shall at their own expense have the privilege for the account of,
and in trust for, the Agent and the Lenders of collecting their
Accounts and receiving in respect thereto all Items of Payment and
shall otherwise completely service all of the Accounts including (a)
the billing, posting and maintaining of complete records applicable
thereto, (b) the taking of such action with respect to the Accounts
as each of the Borrower and each of the Subsidiaries may deem
advisable; and (c) the granting, in the ordinary course of business,
to any Account Debtor, any rebate, refund or adjustment to which the
Account Debtor may be lawfully entitled, and may accept, in
connection therewith, the return of goods, the sale or lease of
which shall have given rise to an Account and may take such other
actions relating to the settling of any Account Debtor's claim as
may be commercially reasonable. The Agent may, at its option, at
any time or from time to time after and during the continuance of an
Event of Default hereunder, revoke the collection privilege given in
this Agreement to the Borrower and its Subsidiaries by either giving
notice of its assignment of, and Lien on the Collateral to the
Account Debtors or giving notice of such revocation to the Borrower.
The Agent shall not have any duty to, and the Borrower hereby
releases the Agent and the Lenders from all claims of loss or damage
caused by the delay or failure to collect or enforce any of the
Accounts or to preserve any rights against any other party with an
interest in the Collateral, unless due to the gross negligence or
willful misconduct of the Agent and/or any of the Lenders.
6.1.15 GOVERNMENT ACCOUNTS. The Borrower will
immediately notify the Agent if any of the Accounts arise out of
contracts with the United States or with any other Governmental
Authority, which Accounts, individually or in the aggregate, exceed
One Hundred Thousand Dollars ($100,000) and, as appropriate, execute
and, cause each Subsidiary Guarantor to execute, any Financing
Documents and take any steps required by the Agent in order to
comply with the Federal Assignment of Claims Act or any other
applicable Laws.
6.1.16 INVENTORY. With respect to the Inventory,
the Borrower and its Subsidiaries will keep correct and accurate
records itemizing and describing the kind, type, and quantity of
Inventory, the Borrower's and Subsidiaries' cost therefor and the
selling price thereof, all of which records shall be available to
the officers, employees or agents of the Agent upon demand for
inspection and copying thereof. The Borrower and its Subsidiaries
shall be permitted to sell Inventory in the ordinary course of
business until such time as the Agent notifies the Borrower to the
contrary following the occurrence of an Event of Default.
6.1.17 INSURANCE WITH RESPECT TO EQUIPMENT
AND INVENTORY.
The Borrower will (a) maintain and cause each of its
Subsidiaries to maintain hazard insurance with fire and extended
coverage and naming the Agent as an additional insured with loss
payable to the Agent as its respective interest may appear on the
Equipment and Inventory in an amount at least equal to the fair
market value of the Equipment and Inventory (but in any event
sufficient to avoid any co-insurance obligations) and with a
specific endorsement to each such insurance policy pursuant to which
the insurer agrees to give the Agent at least thirty (30) days
written notice before any alteration or cancellation of such
insurance policy and that no act or default of the Borrower or any
Subsidiary shall affect the right of the Agent to recover under such
policy in the event of loss or damage; and (b) file, and cause each
of its Subsidiaries to file, with the Agent, upon its request, a
detailed list of the insurance then in effect and stating the names
of the insurance companies, the amounts and rates of the insurance,
dates of the expiration thereof and the properties and risks covered
thereby.
6.1.18 MAINTENANCE OF THE COLLATERAL. Except as
permitted by Section 6.2.1, the Borrower will maintain, and will
cause each of the Subsidiary Guarantors to maintain, the Collateral
in good working order, saving and excepting ordinary wear and tear.
6.1.19 DEFENSE OF TITLE AND FURTHER ASSURANCES.
At its expense, the Borrower will defend the title to the
Collateral (and any part thereof), and will immediately execute,
acknowledge and deliver and, cause each Subsidiary Guarantor to
execute, acknowledge and deliver, any financing statement, renewal,
affidavit, deed, assignment, continuation statement, security
agreement, certificate or other document which the Agent may require
in order to perfect, preserve, maintain, continue, protect and/or
extend the Lien or security interest granted or required to be
granted to the Agent, for the benefit of the Lenders ratably and the
Agent, under the terms of this Agreement and/or under any of the
other Financing Documents and the first priority of that Lien,
subject only to the Permitted Liens. The Borrower will from time to
time do, and, will cause each of the Subsidiary Guarantors to do,
whatever the Agent may reasonably require by way of obtaining,
executing, delivering, and/or filing financing statements,
landlords' or mortgagees' waivers, notices of assignment and other
notices and amendments and renewals thereof and the Borrower will
take and, will cause each of the Subsidiary Guarantors to take, any
and all steps and observe such formalities as the Agent may require,
in order to create and maintain a valid Lien upon, pledge of, or
paramount security interest in (subject only to Permitted Liens),
the Collateral (including as and to the extent required to comply
with the provisions of Section 3.7 of this Agreement), subject only
to the Permitted Liens. The Agent understands and will require that
the Borrower only use commercially reasonable efforts to obtain
landlord's and mortgagee's waivers requested by the Agent. The
Borrower shall pay to the Agent on demand all taxes, costs and
expenses incurred by the Agent in connection with the preparation,
execution, recording and filing of any such document or instrument.
To the extent that the proceeds of any of the Accounts are expected
to become subject to the control of, or in the possession of, a
party other than the Borrower or a Subsidiary Guarantor or the
Agent, the Borrower shall use commercially reasonable efforts to
cause all such parties to execute and deliver security documents,
financing statements or other documents as requested by the Agent
and as may be necessary to evidence and/or perfect the security
interest of the Agent, for the benefit of the Lenders ratably and
the Agent in those proceeds. The Borrower agrees that a copy of a
fully executed security agreement and/or financing statement shall
be sufficient to satisfy for all purposes the requirements of a
financing statement as set forth in Article 9 of the applicable
Uniform Commercial Code. The Borrower hereby irrevocably appoints
the Agent as the Borrower's attorney-in-fact, with power of
substitution, in the name of the Agent or in the name of the
Borrower or otherwise, for the use and benefit of the Agent for
itself and the Lenders, but at the cost and expense of the Borrower
and without notice to the Borrower, to execute and deliver any and
all of the instruments and other documents and take any action which
the Lender may require pursuant to the foregoing provisions of this
Section 6.1.19.
6.1.20 BUSINESS NAMES; LOCATIONS. The Borrower
will notify and cause each of the Subsidiary Guarantors to notify
the Agent not less than thirty (30) days prior to (a) any change in
the name under which the Borrower or the applicable Subsidiary
Guarantor conducts its business, (b) any change of the location of
the chief executive office of the applicable Borrower or Subsidiary
Guarantor, and (c) the opening of any new place of business, and (d)
any change in the location of the places where the Collateral, or
any part thereof, or the books and records, or any part thereof, are
kept to the extent any such change in location would in and of
itself then or with the passage of time result in any Lien of the
Agent and the Lenders not being perfected unless action is taken by
the Agent and/or any other Person to continue, extend or effect the
perfection of such Lien.
6.1.21 SUBSEQUENT OPINION OF COUNSEL AS TO
RECORDING REQUIREMENTS.
In the event that the Borrower or any Subsidiary Guarantor
shall transfer its principal place of business or the office where
it keeps its records pertaining to the Collateral, upon the Agent's
reasonable request the Borrower will provide to the Agent a
subsequent opinion of counsel as to the filing, recording and other
requirements with which the Borrower and the Subsidiary Guarantors
have complied to maintain the Lien and security interest in favor of
the Agent, for the ratable benefit of the Lenders and for the
benefit of the Agent with respect to the Agent's Obligations, in the
Collateral.
6.1.22 USE OF PREMISES AND EQUIPMENT. The
Borrower agrees that until the Obligations are fully paid and all of
the Commitments and the Letters of Credit and Bond Letters of Credit
have been terminated or have expired, the Agent (a) after and during
the continuance of a Default or an Event of Default, may use the
Borrower's owned or leased lifts, hoists, trucks and other
facilities or equipment for handling or removing the Collateral; and
(b) shall have, and is hereby granted, a right of ingress and egress
to the places where the Collateral is located, and may proceed over
and through the Borrower's owned or leased property.
6.1.23 PROTECTION OF COLLATERAL. The Borrower
agrees that the Agent may at any time following an Event of Default
take such steps as the Agent deems reasonably necessary to protect
the interest of the Agent and the Lenders in, and to preserve the
Collateral, including, the hiring of such security guards or the
placing of other security protection measures as the Agent deems
appropriate, may employ and maintain at the Borrower's premises a
custodian who shall have full authority to do all acts necessary to
protect the interests of the Agent and the Lenders in the
Collateral. The Borrower agrees to cooperate fully with the Agent's
efforts to preserve the Collateral and will take such actions to
preserve the Collateral as the Agent may reasonably direct. All of
the Agent's reasonable expenses of preserving the Collateral,
including any reasonable expenses relating to the compensation and
bonding of a custodian, shall part of the Enforcement Costs.
6.1.24 APPLICATION OF NET CASUALTY PROCEEDS. The
Borrower agrees that Net Casualty Proceeds with respect to any
Assets of the Borrower and/or any Subsidiary Guarantor must be
applied to either (a) the payment of the Obligations or (b) the
repair, replacement and/or restoration of the Assets affected, and
without the prior written consent of the Agent for no other purpose.
The Agent shall determine, in its sole discretion, the manner in
which Net Casualty Proceeds are to be applied if the amount of the
Net Casualty Proceeds exceeds, individually or in the aggregate, One
Million Dollars ($1,000,000) or if there exists a Default or an
Event of Default.
SECTION 6.2 NEGATIVE COVENANTS. So long as any of the
Obligations or the Commitments or Letters of Credit or Bond Letters
of Credit shall be outstanding, the Borrower agrees with the Agent
and the Lenders that:
6.2.1 CAPITAL STRUCTURE, MERGER, ACQUISITION
OR SALE OF ASSETS.
Except as otherwise permitted by the provisions of Section
6.2.3, the Borrower will not alter or amend, or permit any
Subsidiary Guarantor to alter or amend, its capital structure,
authorize any additional class of equity, issue any stock or equity
of any class, enter into any merger or consolidation or
amalgamation, windup or dissolve themselves (or suffer any
liquidation or dissolution) or acquire all or substantially all the
Assets of any Person, or sell, lease or otherwise dispose of any of
its Assets; except that prior to the occurrence of a Default or an
Event of Default, the following shall be permitted:
(a) Permitted Acquisitions;
(b) Permitted Asset Dispositions;
(c) mergers or consolidations (i) among and between
the Borrower and/or any Subsidiary Guarantor and (ii) among and
between any Subsidiaries of the Borrower other than Subsidiary
Guarantors; provided, that after closing and consummation of
any such merger or consolidation involving the Borrower or any
Subsidiary Guarantor (x) the Borrower is the surviving entity
if the Borrower is a party to such merger or consolidation, (y)
the Agent and the Lenders retain a first priority Lien on, and
assignment of, one hundred percent (100%) of the capital stock
of all surviving Subsidiary Guarantors, subject only to
Permitted Liens, and a first priority Lien on all of the Assets
of the Borrower and of each surviving Subsidiary Guarantor
which had been pledged or required to be pledged under the
provisions of this Agreement prior to such merger or
consolidation, subject only to Permitted Liens, and (z) in any
merger or consolidation involving only Subsidiary Guarantors,
the surviving entity qualifies or continues to qualify as a
Subsidiary Guarantor in accordance with the provisions of
Section 6.2.2 of this Agreement;
(d) investments as and to the extent permitted by the
provisions of Section 6.2.5 of this Agreement, including,
without limitation, the issuance of equity by any Subsidiary to
the Borrower or another Subsidiary;
(e) the use and disposition of Net CasualtyProceeds,
but only as and to the extent permitted by the provisions of
Section 6.1.24 of this Agreement;
(f) the sale and transfer of all issued and
outstanding capital stock of Venture Southeast and Venture
Midwest to the Borrower and the merger, consolidation,
liquidation or dissolution of Xxxxx Venture, all as
contemplated by the Venture Stock Purchase/Merger Transaction;
and
(h) South Carolina IRB Lease Transfers.
Any consent of the Agent to an Asset disposition which does not
constitute a Permitted Asset Disposition may be conditioned on a
specified use of the Net Proceeds generated by such Asset
Disposition, provided, however, that the Agent and the Lenders (i)
acknowledge that in the case of a disposition of assets subject to
the South Carolina IRB Lease Agreement, the proceeds must be first
applied to repay the South Carolina IRB, but (ii) reserve all rights
and remedies (including, without limitation, those arising under
Section 6.1.19 and comparable provisions of the Security Agreement)
in the right of the Borrower or any one or more of the Guarantors to
receive the proceeds of such repayment as a holder of the South
Xxxxxxxx Xxxx or otherwise.
6.2.2 SUBSIDIARIES. The Borrower will not create
or acquire, or permit any Subsidiary to create or acquire, any
Subsidiaries other than (i) the Subsidiaries identified on the
Collateral Disclosure List, as updated through the date of this
Agreement and (ii) the creation or acquisition of Subsidiary
Guarantors. In order to qualify, after the Closing Date, as a
Subsidiary Guarantor under the provisions of this Agreement, a
Subsidiary must (i) be an acquisition permitted by the provisions of
this Agreement or be created solely to consummate an acquisition
permitted by the provisions of this Agreement, (ii) execute and
deliver to the Agent a guaranty agreement substantially in the form
of the Guaranty, (iii) grant to the Agent and the Lenders a first
priority Lien on all Assets and property of such Subsidiary, subject
only to Permitted Liens, all in accordance with the terms of one or
more Financing Documents as and to the extent reasonably required by
the Agent, and (iv) be a domestic Subsidiary.
6.2.3 PURCHASE OR REDEMPTION OF SECURITIES,
DIVIDEND RESTRICTIONS.
The Borrower will not (i) purchase, redeem or otherwise
acquire, or permit any Subsidiary to purchase, redeem or otherwise
acquire, any shares of the Borrower's capital stock or warrants now
or hereafter outstanding, (ii) declare or pay any Distributions
(other than stock dividends) or set aside any funds therefor, or
(iii) apply any of its property or Assets to the purchase,
redemption or other retirement of, set apart any sum for the payment
of any Distributions on, or for the purchase, redemption, or other
retirement of, make any Distributions by reduction of capital or
otherwise in respect of, any shares of any class of capital stock or
warrants of the Borrower, except for (i) Distributions by the
Borrower to the Parent pursuant to a certain Tax Sharing Agreement
dated as of April 21, 1994 by and between the Borrower and the
Parent, as amended through the Closing Date, and as the same may be
further amended from time to time in a manner that is not materially
adverse to the Borrower, (ii) Distributions by the Borrower to the
Parent to enable the Parent to pay its operating and administrative
expenses, including, without limitation, directors fees, legal and
audit expenses, Securities and Exchange Commission compliance
expenses and corporate franchise and other Taxes, not to exceed in
any fiscal year Five Hundred Thousand Dollars ($500,000), (iii)
Distributions by the Borrower to the Parent to pay management fees
not to exceed Seven Hundred Fifty Thousand Dollars ($750,000) in any
fiscal year of the Borrower, (iv) Distributions to the Parent to
enable the Parent to repurchase any capital stock owned by any
Person employed by the Parent and/or the Borrower if such Person is
no longer so employed, provided, that the aggregate amount of
Distributions for this purpose shall not exceed One Million Dollars
($1,000,000) per annum, and (v) so long as the same may be effected
with the payment of nominal consideration, the redemption of the
South Carolina IRB in conjunction with the exercise of the South
Carolina IRB Lease Purchase Option.
6.2.4 INDEBTEDNESS. The Borrower will not
create, incur, assume or suffer to exist, or permit any Subsidiary
to create, incur, assume or suffer to exist, any Indebtedness for
Borrowed Money, except:
(a) the Obligations;
(b) current accounts payable arising in the
ordinary course;
(c) Indebtedness secured by Permitted Liens;
(d) Subordinated Indebtedness; provided that the
principal amount of all such Subordinated Indebtedness shall
not at any time exceed, in the aggregate, Twenty Million
Dollars ($20,000,000);
(e) Indebtedness of the Borrower and/or any
Subsidiary existing on the date hereof and reflected on the
financial statements furnished pursuant to Section 4.1.11
(Financial Condition);
(f) Unsecured letters of credit, bankers'
acceptances and/or (1) secured Interest Rate Protection
Agreements between the Borrower or a Subsidiary Guarantor and
NationsBank and/or (2) unsecured Interest Rate Protection
Agreements between the Borrower or a Subsidiary Guarantor and
any other financial institution, providing for the transfer or
mitigation of foreign exchange risks or interest rate risks
either generally or under specific contingencies;
(g) Indebtedness for Borrowed Money incurred by
the Borrower or any Subsidiary Guarantor incurred after the
Closing Date; provided, that (i) such Indebtedness for Borrowed
Money is incurred on account of purchase money or finance lease
arrangements of Assets (other than real property) acquired by
the Borrower or a Subsidiary Guarantor after the Closing Date,
(ii) each such purchase money or finance lease arrangement does
not exceed the cost of the Assets acquired or leased, (iii) any
Lien securing such purchase money or finance lease arrangement
does not extend to any Assets or property other than that
purchased or leased, and (iv) the aggregate amount of
Indebtedness for Borrowed Money under and in connection with
all such purchase money and/or finance lease arrangements shall
not exceed, in the aggregate, the sum of Five Hundred Thousand
Dollars ($500,000);
(h) Capital Leases;
(i) Indebtedness for Borrowed Money of the
Borrower to any Guarantor or of any Guarantor to the Borrower
or any other Guarantor;
(j) Indebtedness for Borrowed Money as set
forth on Schedule 4.1.14 of this Agreement;
(k) Other unsecured Indebtedness for Borrowed
Money in aggregate principal amount not to exceed at any time
One Million Dollars ($1,000,000); and
(l) Indebtedness permitted under the provisions
of Section 6.2.5.
(m) any refinancing, replacement, repurchase,
defeasance, redemption or refunding of any existing
Indebtedness for Borrowed Money permitted by the provisions of
this Agreement; provided, that (1) the principal amount of any
Indebtedness for Borrowed Money used to refinance, replace,
repurchase, defease, redeem or refund such existing
Indebtedness for Borrowed Money (each a "Refinancing
Indebtedness") does not exceed the then outstanding principal
balance of the Indebtedness for Borrowed Money so refinanced,
replaced, repurchased, defeased, redeemed or refunded, (2) the
Weighted Average Life to Maturity of any Refinancing
Indebtedness is equal to or greater than the Weighted Average
Life to Maturity of the Indebtedness for Borrowed Money being
so refinanced, replaced, repurchased, defeased, redeemed or
refunded by the Refinancing Indebtedness, (3) the terms of the
Refinancing Indebtedness are not materially more restrictive or
limiting on the Borrower or any Subsidiary Guarantor, as the
case may be, than the terms of the Indebtedness for Borrowed
Money being refinanced, replaced, repurchased, defeased,
redeemed or refunded, as determined by the Agent in its
reasonable discretion, and (4) if and to the extent the
Refinancing Indebtedness is intended to refinance, replace,
repurchase, defeasance, redemption or refund Subordinated
Indebtedness, then the Refinancing Indebtedness is subordinated
in right of payment to the Obligations on terms at least as
favorable to the Agent and the Lenders as those then governing
the Subordinated Indebtedness to be refinanced, replaced,
repurchased, defeased, redeemed or refunded. As used herein,
the term "Weighted Average Life to Maturity" when applied to
any Indebtedness for Borrowed Money (including any Refinancing
Indebtedness) means at any date, the number of years obtained
by dividing (a) the sum of the products obtained by multiplying
(x) the amount of each then remaining installment, sinking
fund, serial maturity or other required payment of principal,
including payment at final maturity, in respect thereof, by (y)
the number of years (calculated to the nearest one-twelfth)
that will elapse between each such date and the making of each
such payment, by (b) the then outstanding principal amount of
such Indebtedness for Borrowed Money.
Notwithstanding the foregoing, neither the Borrower nor any
Subsidiary Guarantor shall be permitted to create, incur, assume or
suffer to exist any additional Indebtedness for Borrower Money at
any time after the occurrence of a Default or an Event of Default or
if and to the extent any such additional Indebtedness for Borrowed
Money would give rise to a Default or an Event of Default.
6.2.5 INVESTMENTS,LOANS AND OTHER TRANSACTIONS.
Except as otherwise provided in this Agreement, the Borrower
will not, and will not permit any of its Subsidiaries to, (a) make,
assume, acquire or continue to hold any investment in any real
property (unless used in connection with their business) or any
Person, whether by stock purchase, capital contribution, acquisition
of Indebtedness of such Person or otherwise (including, without
limitation, investments in any joint venture or partnership), except
for (i) Permitted Acquisitions, (ii) replacements of Assets which
are the subject of a Permitted Asset Disposition made pursuant to
clause (f) of the definition of Permitted Asset Disposition, (iii)
those investments existing as of the Closing Date and reflected on
the financial statements furnished pursuant to Section 4.1.11
(Financial Condition), (iv) any investments in Cash Equivalents,
which, if requested by the Agent, are pledged to the Agent, for the
ratable benefit of the Lenders and for the benefit of the Agent with
respect to the Agent's Obligations, as collateral and security for
the Obligations (v) those investments more particularly set forth in
Schedule 6.2.5 attached hereto and made a part hereof (the
"Permitted Investments"), (vi) the Borrower's acquisition, creation
or ownership of any Subsidiary Guarantor, including, the Borrower's
existing or additional capital contributions in any such Subsidiary
Guarantor, (vii) the receipt of Indebtedness for Borrowed Money by
the Borrower or any Subsidiary Guarantor which represents payment to
the Borrower or a Subsidiary Guarantor, as the case may be, of a
portion of the purchase price payable to the Borrower in connection
with a Permitted Asset Disposition; provided that, upon the Agent's
demand, the Borrower and/or the Subsidiary Guarantor, as the case
may, shall take all such actions as shall be reasonably requested by
the Agent to grant to the Agent for its benefit and the ratable
benefit of the Lenders a perfected Lien on any such Indebtedness for
Borrowed Money and provided further that the principal amount of all
such Indebtedness for Borrowed Money shall not exceed at any time in
the aggregate Five Hundred Thousand Dollars ($500,000), (vii)
investments permitted by Section 6.2.1, an (viii) the sale and
transfer of all issued and outstanding capital stock of Venture
Southeast and Venture Midwest to the Borrower and the merger,
consolidation, liquidation or dissolution of Xxxxx Venture, all as
contemplated by the Venture Stock Purchase/Merger Transaction, (b)
guaranty or otherwise become contingently liable for the
Indebtedness or obligations of any Person, except that the Borrower
and any Subsidiary Guarantor shall be permitted to guaranty (1) any
Indebtedness for Borrowed Money of the Borrower or any Subsidiary
Guarantor otherwise permitted by the provisions of Section 6.2.4 of
this Agreement, (2) the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course
of business, (3) the obligations of the Borrower under the
Subordinated Debt and the Senior Secured Debt, and (4) the
Obligations, or (c) make any loans or advances, or otherwise extend
credit to any Person, except (1) any advance to an officer or
employee of the Borrower or any Subsidiary for travel or other
business expenses in the ordinary course of business, provided that
the aggregate amount of all such advances by all of the Borrower and
its Subsidiaries (taken as a whole) outstanding at any time shall
not exceed Five Hundred Thousand Dollars ($500,000), (2) trade
credit extended to customers in the ordinary course of business, (3)
ordinary course advances to customers in connection with the
production of molds and related materials, (4) South Carolina IRB
Lease Transfers, and (5) ordinary course working capital advances
and loans to and from the Borrower to any Guarantor and to and from
any Guarantor to the Borrower or any other Guarantor.
6.2.6 CAPITAL EXPENDITURES. Except for
Permitted Acquisitions and permitted reinvestments of Permitted
Asset Dispositions, the Borrower will not, and will not permit any
Subsidiary to, directly or indirectly, make any Capital Expenditures
in the aggregate for the Borrower and its Subsidiaries (taken as a
whole) in amount which exceed the following amounts at any time
during the following fiscal years (for each fiscal year, the
"Capital Expenditure Ceiling"):
FISCAL YEAR CAPITAL EXPENDITURE CEILING
1997 $19,000,000
1998 $23,000,000
1999 $26,000,000
2000 $27,000,000
2001 $29,000,000
If in any given fiscal year, the total Capital Expenditures of the
Borrower and its Subsidiaries, taken as a whole, are less than the
applicable Capital Expenditure Ceiling for that fiscal year, the
unused portion of the amount permitted for Capital Expenditures (the
"Carry Forward Amount') may be used to increase the applicable
Capital Expenditure Ceiling for the then next succeeding fiscal
year. The Carry Forward Amount for any given fiscal year cannot be
carried forward for more than one (1) fiscal year.
6.2.7 STOCK OF SUBSIDIARIES. The Borrower
will not sell or otherwise dispose of any shares of capital stock of
any Subsidiary (except as necessary or incident to any transaction
permitted by Sections 6.2.1 or 6.2.6 above) or permit any Subsidiary
to issue any additional shares of its capital stock except PRO RATA
to its stockholders.
6.2.8 SUBORDINATED INDEBTEDNESS. The
Borrower will not, and will not permit any Subsidiary to make:
(a) (i) any payment on account of the
Subordinated Debt in violation of the subordination provisions
relating to such Subordinated Debt, or (ii) any payment on
account of any other Subordinated Indebtedness in violation of
the subordination provisions relating to such Subordinated
Indebtedness;
(b) any amendment or modification of to the
documents evidencing or securing the Subordinated Indebtedness;
and
(c) any payment of principal or interest on the
Subordinated Indebtedness other than when due, except that
Subordinated Indebtedness may be prepaid, redeemed,
repurchased, refinanced, replaced, refunded or defeased from
the proceeds of any offering of Securities or Indebtedness by
the Parent or the Borrower; provided that at the time of such
prepayment there does not exist a Default or an Event of
Default and provided that such offering of Securities or
Indebtedness is otherwise permitted by the provisions of this
Agreement.
6.2.9 LIENS. The Borrower agrees that it
(a) will not create, incur, assume or suffer to exist any Lien upon
any of its properties or Assets, whether now owned or hereafter
acquired, or permit any Subsidiary so to do, except for (i) Liens
securing the Obligations and (ii) Permitted Liens, (b) will not
allow or suffer to exist any Permitted Liens to be superior to Liens
securing the Obligations, or permit any Subsidiary so to do, except
for (i) statutory landlord's Liens with respect to which the Agent
has not obtained a landlord's waiver and subordination, (ii)
existing Liens securing Indebtedness for Borrowed Money under and in
connection with the Bonds, and (iii) Liens which have priority as a
matter of law and which do not otherwise constitute or give rise to
a Default or an Event of Default and for which the Agent has
established a reserve against the Borrowing Base in an amount to be
determined by the Agent in its reasonable discretion, (c) except as
otherwise permitted by the provisions of this Agreement, will not
enter into any contracts for the consignment of goods, will not
execute or suffer the filing of any financing statements or the
posting of any signs giving notice of consignments, and will not, as
a material part of its business, engage in the sale of goods
belonging to others, or permit any Subsidiary so to do, and (d) will
not allow or suffer to exist the failure of any Lien described in
the Security Documents to attach to, and/or remain at all times
perfected on, any of the property described in the Security
Documents, except with respect to any Assets disposed of as part of
a Permitted Asset Disposition.
6.2.10 TRANSACTIONS WITH AFFILIATES. Neither the
Borrower nor any of its Subsidiaries will enter into any transaction
with any Affiliate except in the ordinary course of business, in
each case, upon terms no less favorable to the Borrower or any
Subsidiary then would be obtained in an arms-length, third party
transaction. The foregoing provision shall not restrict (i) any
employment agreement entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business and consistent with
the past practices of the Borrower and/or any such Subsidiary, (ii)
transactions between or among the Borrower and/or the Subsidiary
Guarantors, (iii) transactions between First Atlantic Capital, Ltd.
("First Atlantic"), pursuant to the Second Amended and Restated
Management Agreement dated as of June 18, 1996, as amended to the
date hereof or otherwise amended with the Agent's prior written
consent (solely for purposes of this Section 6.2.10, between the
Borrower and First Atlantic, (iv) the payment of Distributions
permitted by Section 6.2.3, and (v) any transaction fee payable to
First Atlantic not to exceed $1,250,000 per transaction.
6.2.11 ERISA COMPLIANCE. Neither the Borrower nor
any Commonly Controlled Entity shall: (a) engage in or permit any
"prohibited transaction" (as defined in ERISA); (b) cause any
"accumulated funding deficiency" as defined in ERISA and/or the
Internal Revenue Code; (c) terminate any pension plan in a manner
which could result in the imposition of a lien on the property of
the Borrower pursuant to ERISA; (d) terminate or consent to the
termination of any Multiemployer Plan; or (e) incur a complete or
partial withdrawal with respect to any Multiemployer Plan.
6.2.12 PROHIBITION ON HAZARDOUS MATERIALS. The
Borrower shall not place, manufacture or store or permit to be
placed, manufactured or stored any Hazardous Materials on any
property owned, operated or controlled by the Borrower or for which
the Borrower is responsible other than Hazardous Materials placed or
stored on such property in accordance with applicable Laws in the
ordinary course of the Borrower's or any tenant's business expressly
described in this Agreement, or permit any Subsidiary to do so.
6.2.13 AMENDMENTS. The Borrower will not amend or
agree to amend any of the Subordinated Debt Loan Documents, any of
the Senior Secured Debt Loan Documents, any of the PackerWare Merger
Agreement Documents and/or any of the Venture Stock Purchase/Merger
Documents, other than in the normal course of business.
6.2.14 METHOD OF ACCOUNTING; FISCAL YEAR. The
Borrower agrees that:
(a) it shall not change, or permit any
Subsidiary to change, the method of accounting employed in the
preparation of any financial statements furnished to the Agent under
the provisions of Section 6.1.1 (Financial Statements) of this
Agreement, unless required to conform to GAAP and on the condition
that the Borrower's accountants shall furnish such information as
the Agent may request to reconcile the changes with the Borrower's
prior financial statements.
(b) it will not change or permit any Subsidiary
to change, its fiscal year from a year ending on or about December
31.
6.2.15 TRANSFER OF COLLATERAL. Neither the
Borrower nor any of its Subsidiaries will transfer, or permit the
transfer, to another location of any of the Collateral or the books
and records related to any of the Collateral, except (i) for
transfers among the Borrower and the Subsidiary Guarantors, if and
to the extent the first priority Lien (subject to Permitted Liens)
of the Agent and the Lenders would be unaffected by any such
transfers or (ii) transfers of Inventory in the ordinary course of
business to bailees, warehousemen, consignees or similar third
parties if and to the extent that either (1) such bailees,
warehousemen, consignees or similar third parties have entered into
an agreement with the Agent in which such bailees, warehousemen,
consignees or similar third parties consent and agree to the
superior Lien of the Agent and the Lenders on such Inventory and to
such other terms and conditions as may be reasonably required by the
Agent or (2) the Agent has established reserves against the
Borrowing Base with respect to any such Inventory so transferred in
accordance with the provisions set forth in the definition of
Eligible Inventory, which reserves the Agent shall establish upon
the Borrower's request.
6.2.16 SALE AND LEASEBACK. The Borrower nor any
of the Subsidiaries will directly or indirectly enter into any
arrangement to sell or transfer all or any substantial part of its
fixed assets and thereupon or within one year thereafter rent or
lease the assets so sold or transferred, except as contemplated by
subsection (h) or subsection (m) of the definition of Permitted
Asset Disposition.
ARTICLE 7
DEFAULT AND RIGHTS AND REMEDIES
SECTION 7.1 EVENTS OF DEFAULT. The occurrence of any one or
more of the following events shall constitute an "Event of Default"
under the provisions of this Agreement:
7.1.1 FAILURE TO PAY. The failure of the
Borrower to pay any of the Obligations within three (3) days of the
date as and when due and payable in accordance with the provisions
of this Agreement, the Notes and/or any of the other Financing
Documents;
7.1.2 BREACH OF REPRESENTATIONS AND WARRANTIES.
Any representation or warranty made in this Agreement, in any
of the other Financing Documents, or in any report, statement,
schedule, certificate, opinion, financial statement or other
document furnished in connection with this Agreement, any of the
other Financing Documents, or the Obligations, shall prove to have
been false or misleading when made (or, if applicable, when
reaffirmed) in any material respect.
7.1.3 FAILURE TO COMPLY WITH CERTAIN
COVENANTS. The failure of the Borrower to perform, observe or
comply, or to cause any Subsidiary Guarantor to perform, observe or
comply, as appropriate, with any covenant, condition or agreement
contained in Sections 6.1.1 (Financial Statements), Section 6.1.3(a)
(Bookkeeping, Rights of Inspection, Field Examination, Etc.) with
respect to inspection rights only, Section 6.1.8 (Insurance),
Section 6.1.13 (Financial Covenants), Section 6.1.17 (Insurance with
Respect to Equipment), Section 6.1.19 (Defense of Title and Further
Assurances), Section 6.1.19 (Business Names; Locations), or Section
6.2 (Negative Covenants).
7.1.4 FAILURE TO COMPLY WITH OTHER
COVENANTS. The failure of the Borrower to perform, observe or
comply, or to cause any Subsidiary Guarantor to perform, observe or
comply, as appropriate, with any covenant, condition or agreement
contained in this Agreement other than those set forth in Section
7.1.1, 7.1.2 or 7.1.3 above, which failure shall remain unremedied
for a period of thirty (30) days after written notice thereof to the
Borrower by the Agent.
7.1.5 DEFAULT UNDER OTHER FINANCING
DOCUMENTS OR OBLIGATIONS.
The failure of the Borrower and/or any other Person (other than
the Agent or any of the Lenders) which is a party to any of the
Financing Documents, to perform, observe or comply with any
covenant, condition or agreement contained in any such Financing
Documents which is not otherwise covered by any other Section of
this Article 7, which failure shall remain unremedied for a period
of thirty (30) days after written notice thereof to the Borrower by
the Agent or the occurrence of an Event of Default under any of the
other Financing Documents as defined therein.
7.1.6 RECEIVER; BANKRUPTCY. The Borrower or
any Guarantor shall (a) apply for or consent to the appointment of a
receiver, trustee or liquidator of itself or any of its property,
(b) admit in writing its inability to pay its debts as they mature,
(c) make a general assignment for the benefit of creditors, (d) be
adjudicated a bankrupt or insolvent, (e) file a voluntary petition
in bankruptcy or a petition or an answer seeking or consenting to
reorganization or an arrangement with creditors or to take advantage
of any bankruptcy, reorganization, insolvency, readjustment of debt,
dissolution or liquidation law or statute, or an answer admitting
the material allegations of a petition filed against it in any
proceeding under any such law, or take corporate action for the
purposes of effecting any of the foregoing, or (f) by any act
indicate its consent to, approval of or acquiescence in any such
proceeding or the appointment of any receiver of or trustee for any
of its property, or suffer any such receivership, trusteeship or
proceeding to continue undischarged for a period of sixty (60) days,
or (g) by any act indicate its consent to, approval of or
acquiescence in any order, judgment or decree by any court of
competent jurisdiction or any Governmental Authority enjoining or
otherwise prohibiting the operation of all or substantially all of
the Borrower's or any Guarantor's business or the use or
disposition of all or substantially all of the Borrower's or any
Guarantor's assets.
7.1.7 INVOLUNTARY BANKRUPTCY, ETC. (a) An
order for relief shall be entered in any involuntary case brought
against the Borrower or any Guarantor under the Bankruptcy Code, or
(b) any such case shall be commenced against the Borrower or any
Guarantor and shall not be dismissed within sixty (60) days after
the filing of the petition, or (c) an order, judgment or decree
under any other Law is entered by any court of competent
jurisdiction or by any other Governmental Authority on the
application of a Governmental Authority or of a Person other than
the Borrower or any Guarantor (i) adjudicating the Borrower, or any
Guarantor bankrupt or insolvent, or (ii) appointing a receiver,
trustee or liquidator of the Borrower or of any Guarantor, or of a
material portion of the Borrower's or any Guarantor's assets, or
(iii) enjoining, prohibiting or otherwise limiting the operation of
all or substantially all of the Borrower's or any Guarantor's
business or the use or disposition of all or substantially all of
the Borrower's or any Guarantor's assets, and such order, judgment
or decree continues unstayed and in effect for a period of thirty
(30) days from the date entered.
7.1.8 JUDGMENT. Unless adequately insured
in the reasonable opinion of the Agent, the entry of a final
judgment for the payment of money involving more than $1,000,000
(individually and in the aggregate) against the Borrower and/or any
or all of the Guarantors, and the failure by the Borrower or such
Guarantor to discharge the same, or cause it to be discharged,
within sixty (60) days from the date of the order, decree or process
under which or pursuant to which such judgment was entered, or to
secure a stay of execution pending appeal of such judgment.
7.1.9 EXECUTION; ATTACHMENT. Any execution
or attachment shall be levied against the Collateral, or any part
thereof, and such execution or attachment shall not be set aside,
discharged or stayed within sixty (60) days after the same shall
have been levied.
7.1.10 DEFAULT UNDER OTHER BORROWINGS. An event
of default shall be made with respect to any Indebtedness for
Borrowed Money in a principal amount in excess of Two Million
Dollars ($2,000,000), either individually or in the aggregate, of
the Borrower and/or any or all of the Guarantors, other than the
Loans, if such Indebtedness for Borrowed Money was not paid when
due, after giving effect to any applicable notice and cure period,
or if the effect of such event of default is to accelerate the
maturity of such Indebtedness for Borrowed Money or to permit the
holder or obligee thereof or other party thereto to cause such
Indebtedness for Borrowed Money to become due prior to its stated
maturity.
7.1.11 CHALLENGE TO AGREEMENTS. The Borrower or
any Guarantor shall challenge the validity and binding effect of any
provision of any of the Financing Documents or any of the Financing
Documents shall for any reason (except to the extent permitted by
its express terms) cease to be effective or to create a valid and
perfected first priority Lien (except for Permitted Liens, certain
of which Permitted Liens, to the extent expressly permitted by the
provisions of this Agreement, may constitute superior and prior
Liens) on, or security interest in, any of the Collateral purported
to be covered thereby, unless due to the gross negligence or willful
misconduct of the Agent.
7.1.12 MATERIAL ADVERSE CHANGE. The Requisite
Lenders, in their sole discretion, determine in good faith that a
material adverse change has occurred in the financial condition of
the Borrower and/or the Subsidiary Guarantors, taken as a whole.
7.1.13 CHANGE IN OWNERSHIP. (1) The Borrower
shall cease to own and control, beneficially and of record, directly
or indirectly, at least one hundred percent (100%) of the issued and
outstanding capital stock of each Subsidiary Guarantor (except
pursuant to any transaction permitted by Section 6.2.1 or Section
6.2.2), (2) the Parent shall cease to own and control, beneficially
and of record, directly or indirectly, at least one hundred percent
(100%) of the issued and outstanding capital stock of the Borrower,
or (3) Atlantic Equity Partners International II, L.P. ("AEP"),
Chase Capital Partners, and their respective Affiliates shall cease
to own and control, beneficially and of record, at least fifty-one
percent (51%) or more of the issued and outstanding voting capital
stock of the Parent.
7.1.14 LIQUIDATION, TERMINATION, DISSOLUTION,
CHANGE IN MANAGEMENT, ETC.
The Borrower or any Guarantor shall liquidate, dissolve or terminate
its existence, except as otherwise expressly permitted by the
provisions of Section 6.2 of this Agreement.
7.1.15 PARENT LINE OF BUSINESS. At any time the
Parent engages in any business other than the ownership of capital
stock of the Borrower or any other Wholly-Owned Subsidiary or such
other business as shall be mandatory under the provisions of
applicable Laws.
SECTION 7.2 REMEDIES. Upon the occurrence of any Event of
Default, the Agent may, in the exercise of its sole and absolute
discretion from time to time, and shall, at the direction of the
Requisite Lenders, at any time thereafter exercise any one or more
of the following rights, powers or remedies:
7.2.1 ACCELERATION. The Agent may declare
any or all of the Obligations to be immediately due and payable,
notwithstanding anything contained in this Agreement or in any of
the other Financing Documents to the contrary, without presentment,
demand, protest, notice of protest or of dishonor, or other notice
of any kind, all of which the Borrower hereby waives.
7.2.2 FURTHER ADVANCES. The Agent may from
time to time without notice to the Borrower suspend, terminate or
limit any further advances, loans or other extensions of credit
under the Commitment, under this Agreement and/or under any of the
other Financing Documents. Further, upon the occurrence of an Event
of Default specified in Sections 7.1.6 (Receiver; Bankruptcy) or
7.1.7 (Involuntary Bankruptcy, etc.) above, the Revolving Credit
Commitments, the Letter of Credit Commitments, the Bond Letter of
Credit Commitments and any agreement in any of the Financing
Documents to provide additional credit and/or to issue Letters of
Credit and/or Bond Letters of Credit shall immediately and
automatically terminate and the unpaid principal amount of the Notes
(with accrued interest thereon) and all other Obligations then
outstanding, shall immediately become due and payable without
further action of any kind and without presentment, demand, protest
or notice of any kind, all of which are hereby expressly waived by
the Borrower.
7.2.3 UNIFORM COMMERCIAL CODE. The Agent shall
have all of the rights and remedies of a secured party under the
applicable Uniform Commercial Code and other applicable Laws. Upon
demand by the Agent, the Borrower shall assemble the Collateral and
make it available to the Agent, at a place designated by the Agent.
The Agent or its agents may without notice from time to time enter
upon the Borrower's premises to take possession of the Collateral,
to remove it, to render it unusable, to process it or otherwise
prepare it for sale, or to sell or otherwise dispose of it.
Any written notice of the sale, disposition or other intended
action by the Agent with respect to the Collateral which is sent by
regular mail, postage prepaid, to the Borrower at the address set
forth in Section 9.1 of this Agreement, or such other address of the
Borrower which may from time to time be shown on the Agent's
records, at least ten (10) days prior to such sale, disposition or
other action, shall constitute commercially reasonable notice to the
Borrower. The Agent may alternatively or additionally give such
notice in any other commercially reasonable manner.
If any consent, approval, or authorization of any state,
municipal or other Governmental Authority or of any other Person or
of any Person having any interest therein, should be necessary to
effectuate any sale or other disposition of the Collateral, the
Borrower agrees to execute all such applications and other
instruments, and to take all other action, as may be required in
connection with securing any such consent, approval or
authorization.
The Borrower recognizes that the Agent may be unable to effect
a public sale of all or a part of the Collateral consisting of
Securities by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and other applicable Federal and
state Laws. The Agent may, therefore, in its discretion, take such
steps as it may deem appropriate to comply with such Laws and may,
for example, at any sale of the Collateral consisting of securities
restrict the prospective bidders or purchasers as to their number,
nature of business and investment intention, including, without
limitation, a requirement that the Persons making such purchases
represent and agree to the satisfaction of the Agent that they are
purchasing such securities for their account, for investment, and
not with a view to the distribution or resale of any thereof. The
Borrower covenants and agrees to do or cause to be done promptly all
such acts and things as the Agent may request from time to time and
as may be necessary to offer and/or sell the Securities or any part
thereof in a manner which is valid and binding and in conformance
with all applicable Laws. Upon any such sale or disposition, the
Agent shall have the right to deliver, assign and transfer to the
purchaser thereof the Collateral consisting of securities so sold.
7.2.4 SPECIFIC RIGHTS WITH REGARD TO
COLLATERAL.
In addition to all other rights and remedies provided hereunder
or as shall exist at law or in equity from time to time, the Agent
may (but shall be under no obligation to), without notice to the
Borrower, and upon the occurrence of an Event of Default the
Borrower hereby irrevocably appoints the Agent as its
attorney-in-fact, with power of substitution, in the name of the
Agent and/or any or all of the Lenders and/or in the name of the
Borrower or otherwise, for the use and benefit of the Agent and the
Lenders, but at the cost and expense of the Borrower:
(a) request any Account Debtor obligated on any
of the Accounts to make payments thereon directly to the Agent,
with the Agent taking control of the cash and non-cash proceeds
thereof;
(b) compromise, extend or renew any of the
Collateral or deal with the same as it may deem advisable,;
(c) make exchanges, substitutions or surrenders
of all or any part of the Collateral;
(d) copy, transcribe, or remove from any place
of business of the Borrower or any Subsidiary all books,
records, ledger sheets, correspondence, invoices and documents,
relating to or evidencing any of the Collateral or without cost
or expense to the Agent or the Lenders, make such use of the
Borrower's or any Subsidiary's place(s) of business as may be
reasonably necessary to administer, control and collect the
Collateral;
(e) repair, alter or supply goods if necessary
to fulfill in whole or in part the purchase order of any
Account Debtor;
(f) demand, collect, receipt for and give
renewals, extensions, discharges and releases of any of the
Collateral;
(g) institute and prosecute legal and equitable
proceedings to enforce collection of, or realize upon, any of
the Collateral;
(h) settle, renew, extend, compromise, compound,
exchange or adjust claims in respect of any of the Collateral
or any legal proceedings brought in respect thereof;
(i) endorse or sign the name of the Borrower
upon any items of payment, certificates of title, instruments,
securities, stock powers, documents, documents of title,
financing statements, assignments, notices or other writing
relating to or part of the Collateral and on any proof of claim
in bankruptcy against an Account Debtor;
(j) notify the Post Office authorities to change
the address for the delivery of mail to the Borrower to such
address or Post Office Box as the Agent may designate and
receive and open all mail addressed to the Borrower; and
(k) take any other action necessary or
beneficial to realize upon or dispose of the Collateral or to
carry out the terms of this Agreement.
7.2.5 APPLICATION OF PROCEEDS. Unless
otherwise required by applicable Laws, any proceeds of sale or other
disposition of the Collateral will be applied by the Agent to the
payment first of any and all Agent's Obligations, then to any and
all Enforcement Costs, and any balance of such proceeds will be
remitted to the Lenders in like currency and funds received ratably
in accordance with their respective Pro Rata Shares of such balance.
Each Lender shall apply any such proceeds received from the Agent to
its Obligations in such order and manner as such Lender shall
determine. If the sale or other disposition of the Collateral fails
to fully satisfy the Obligations, the Borrower shall remain liable
to the Agent and the Lenders for any deficiency.
7.2.6 PERFORMANCE BY AGENT. If the Borrower
shall fail to pay the Obligations or otherwise fail to perform,
observe or comply with any of the conditions, covenants, terms,
stipulations or agreements contained in this Agreement or any of the
other Financing Documents, the Agent without notice to or demand
upon the Borrower and without waiving or releasing any of the
Obligations or any Default or Event of Default, may (but shall be
under no obligation to) at any time thereafter make such payment or
perform such act for the account and at the expense of the Borrower,
and may enter upon the premises of the Borrower for that purpose and
take all such action thereon as the Agent may consider necessary or
appropriate for such purpose and each of the Borrower hereby
irrevocably appoints the Agent as its attorney-in-fact upon the
occurrence of an Event of Default to do so, with power of
substitution, in the name of the Agent, in the name of any or all of
the Lenders, or in the name of the Borrower or otherwise, for the
use and benefit of the Agent, but at the cost and expense of the
Borrower and without notice to the Borrower. All sums so paid or
advanced by the Agent together with interest thereon from the date
of payment, advance or incurring until paid in full at the Post-
Default Rate and all costs and expenses, shall be deemed part of the
Enforcement Costs, shall be paid by the Borrower to the Agent on
demand, and shall constitute and become a part of the Agent's
Obligations.
7.2.7 OTHER REMEDIES. The Agent may from
time to time proceed to protect or enforce the rights of the Agent
and/or any of the Lenders by an action or actions at law or in
equity or by any other appropriate proceeding, whether for the
specific performance of any of the covenants contained in this
Agreement or in any of the other Financing Documents, or for an
injunction against the violation of any of the terms of this
Agreement or any of the other Financing Documents, or in aid of the
exercise or execution of any right, remedy or power granted in this
Agreement, the Financing Documents, and/or applicable Laws. The
Agent and each of the Lenders is authorized to offset and apply to
all or any part of the Obligations all moneys, credits and other
property of any nature whatsoever of the Borrower now or at any time
hereafter in the possession of, in transit to or from, under the
control or custody of, or on deposit with, the Agent, any of the
Lenders or any Affiliate of the Agent or any of the Lenders.
ARTICLE 8
THE AGENT
SECTION 8.1 APPOINTMENT. Each Lender hereby designates and
appoints NationsBank as its agent under this Agreement and the
Financing Documents, and each Lender hereby irrevocably authorizes
the Agent to take such action or to refrain from taking such action
on its behalf under the provisions of this Agreement and the
Financing Documents and to exercise such powers as are set forth
herein or therein, together with such other powers as are reasonably
incidental thereto. The Agent agrees to act as such on the express
conditions contained in this Article 8. The provisions of this
Article 8 are solely for the benefit of the Agent and the Lenders
and neither the Borrower nor any Person shall have any rights as a
third party beneficiary of any of the provisions hereof, except for
those rights expressly granted to the Borrower pursuant to Sections
8.7.1, 8.8, 8.12 and 8.13. In performing its functions and duties
under this Agreement, the Agent shall act solely as an
administrative representative of the Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for the Lenders, the
Borrower or any Person. The Agent may perform any of its duties
hereunder, or under the Financing Documents, by or through its
agents or employees.
SECTION 8.2 NATURE OF DUTIES.
8.2.1 IN GENERAL. The Agent shall have no duties,
obligations or responsibilities except those expressly set forth in this
Agreement or in the Financing Documents. The duties of the Agent shall
be mechanical and administrative in nature. The Agent shall not have by reason
of this Agreement a fiduciary relationship in respect of any Lender. Each
Lender shall make its own independent investigation of the financial condition
and affairs of the Borrower in connection with the extension of credit
hereunder and shall make its own appraisal of the credit worthiness of the
Borrower, and the Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before
the Closing Date or at any time or times thereafter. If the Agent seeks the
consent or approval of any of the Lenders to the taking or refraining from
taking of any action hereunder, then the Agent shall send notice thereof to
each Lender. The Agent shall promptly notify each Lender any time that the
applicable percentage of the Lenders have instructed the Agent to act or
refrain from acting pursuant hereto.
8.2.2 EXPRESS AUTHORIZATION.
The Agent is hereby expressly and irrevocably authorized by each of the
Lenders, as agent on behalf of itself and the other Lenders:
(a) To receive on behalf of each of the Lenders
any payment or collection on account of the Obligations and to
distribute to each Lender its Pro Rata Share of all such payments
and collections so received as provided in this Agreement;
(b) To receive all documents and items to be
furnished to the Lenders under the Financing Documents;
(c) To act or refrain from acting in this
Agreement and in the other Financing Documents with respect to those
matters so designated for the Agent;
(d) To act as nominee for and on behalf of the
Lenders in and under this Agreement and the other Financing
Documents;
(e) To arrange for the means whereby the funds
of the Lenders are to be made available to the Borrower;
(f) To distribute promptly to the Lenders, if
required by the terms of this Agreement, all written information,
requests, notices, Loan Notices, payments, Prepayments, documents
and other items received from the Borrower or other Person;
(g) To amend, modify, or waive any provisions
of this Agreement or the other Financing Documents on behalf of the
Lenders subject to the requirements that all or certain of the
Lenders' consent be obtained in certain instances as provided in
Section 8.13 and 9.2;
(h) To deliver to the Borrower and other
Persons, all requests, demands, approvals, notices, and consents
received from any of the Lenders;
(i) To exercise on behalf of each Lender all
rights and remedies of the Lenders upon the occurrence of any Event
of Default and/or Default specified in this Agreement and/or in any
of the other Financing Documents or applicable Laws;
(j) To execute any of the Security Documents
and any other documents on behalf of the Lenders as the secured
party for the benefit of the Agent and the Lenders; and
(k) To take such other actions as may be
requested by the Requisite Lenders.
SECTION 8.3 RIGHTS, EXCULPATION, ETC. Neither the Agent nor
any of its officers, directors, employees or agents shall be liable
to any Lender for any action taken or omitted by them hereunder or
under any of the Financing Documents, or in connection herewith or
therewith, except that the Agent shall be obligated on the terms set
forth herein for performance of its express obligations hereunder,
and except that the Agent shall be liable with respect to its own
gross negligence or willful misconduct. The Agent shall not be
liable for any apportionment or distribution of payments made by it
in good faith and if any such apportionment or distribution is
subsequently determined to have been made in error the sole recourse
of any Lender to whom payment was due but not made, shall be to
recover from other the Lenders any payment in excess of the amount
to which they are determined to be entitled (and such other Lenders
hereby agree to return to such Lender any such erroneous payments
received by them). The Agent shall not be responsible to any Lender
for any recitals, statements, representations or warranties herein
or for the execution, effectiveness, genuineness, validity,
enforceability, collectible, or sufficiency of this Agreement or any
of the Financing Documents or the transactions contemplated thereby,
or for the financial condition of any Person. The Agent shall not
be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of this
Agreement or any of the Financing Documents or the financial
condition of any Person, or the existence or possible existence of
any Default or Event of Default. The Agent agrees to use its
reasonable efforts to notify the Lenders as to the occurrence of any
material Event of Default promptly upon obtaining actual knowledge
thereof, provided, however, that the failure in good faith of the
Agent to so notify any Lender shall not give rise to any liability
on the part of the Agent nor shall it waive, discharge or otherwise
adversely affect the Agent's ability to exercise and enforce any
rights or remedies resulting from such Event of Default. The Agent
may at any time request instructions from the Lenders with respect
to any actions or approvals which by the terms of this Agreement or
of any of the Financing Documents the Agent is permitted or required
to take or to grant, and the Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall
not be under any liability whatsoever to any Person for refraining
from any action or withholding any approval under any of the
Financing Documents until it shall have received such instructions
from the applicable percentage of the Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever
against the Agent as a result of the Agent acting or refraining from
acting under this Agreement or any of the other Financing Documents
in accordance with the instructions of the applicable percentage of
the Lenders and notwithstanding the instructions of the Lenders, the
Agent shall have no obligation to take any action if it, in good
faith believes that such action exposes the Agent to any liability.
SECTION 8.4 RELIANCE. The Agent shall be entitled to rely
upon any written notices, statements, certificates, orders or other
documents or any telephone message or other communication (including
any writing, telex, telecopy or telegram) believed by it in good
faith to be genuine and correct and to have been signed, sent or
made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Financing Documents and
its duties hereunder or thereunder, upon advice of counsel selected
by it. The Agent may deem and treat the original Lenders as the
owners of the respective Notes for all purposes until receipt by the
Agent of a written notice of assignment, negotiation or transfer of
any interest therein by the Lenders in accordance with the terms of
this Agreement. Any interest, authority or consent of any holder of
any of the Notes shall be conclusive and binding on any subsequent
holder, transferee, or assignee of such Notes. The Agent shall be
entitled to rely upon the advice of legal counsel, independent
accountants, and other experts selected by the Agent in its sole
discretion.
SECTION 8.5 INDEMNIFICATION. Each Lender, severally, agrees
to reimburse and indemnify the Agent for and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, advances or disbursements
including, without limitation, Enforcement Costs, of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted
against the Agent in any way relating to or arising out of this
Agreement or any of the Financing Documents or any action taken or
omitted by the Agent under this Agreement for any of the Financing
Documents, in proportion to each Lender's Pro Rata Share, all of the
foregoing as they may arise, be asserted or be imposed from time to
time; PROVIDED, HOWEVER, that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from the Agent's gross negligence or willful
misconduct. The obligations of the Lenders under this Section 8.5
shall survive the payment in full of the Obligations and the
termination of this Agreement.
SECTION 8.6 NATIONSBANK INDIVIDUALLY. With respect to its
Commitments and the Loans made by it, and the Notes issued to it,
NationsBank shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as
and to the extent set forth herein for any other Lender. The terms
"the Lenders" or "Requisite Lenders" or any similar terms shall,
unless the context clearly otherwise indicates, include NationsBank
in its individual capacity as a Lender or one of the Requisite
Lenders. NationsBank and its Affiliates may lend money to, accept
deposits from and generally engage in any kind of banking, trust or
other business with the Borrower, any Affiliate of the Borrower, or
any other Person or any of their officers, directors and employees
as if NationsBank were not acting as the Agent pursuant hereto and
the Agent may accept fees and other consideration from the Borrower,
any Affiliate of the Borrower or any of their officers, directors
and employees (in addition to the Agency Fees or other arrangements
or fees heretofore agreed to between the Borrower and the Agent) for
services in connection with this Agreement or otherwise without
having to account for or share the same with the Lenders.
SECTION 8.7 SUCCESSOR AGENT.
8.7.1 RESIGNATION. The Agent may resign
from the performance of all its functions and duties hereunder at
any time by giving at least thirty (30) Business Days' prior written
notice to the Borrower and the Lenders. Such resignation shall take
effect upon the acceptance by a successor Agent of appointment
pursuant to Section 8.7.2 below or as otherwise provided below.
8.7.2 APPOINTMENT OF SUCCESSOR. Upon any
such notice of resignation pursuant to Section 8.7.1 above, the
Requisite Lenders, with the consent of NationsBank and the Borrower,
shall appoint a successor to the Agent. If a successor to the Agent
shall not have been so appointed within said thirty (30) Business
Day period, the Agent retiring, upon notice to the Borrower, shall
then appoint a successor Agent who shall serve as the Agent until
such time, as the Requisite Lenders appoint a successor the Agent as
provided above.
8.7.3 SUCCESSOR AGENT. Upon the acceptance
of any appointment as the Agent under the Financing Documents by a
successor Agent, such successor to the Agent shall thereupon succeed
to and become vested with all the rights, powers, privileges and
duties of the Agent retiring, and the Agent retiring shall be
discharged from its duties and obligations under the Financing
Documents. After any Agent's resignation as the Agent under the
Financing Documents, the provisions of this Article 8 shall inure to
its benefit as to any actions taken or omitted to be taken by it
while it was the Agent under the Financing Documents.
SECTION 8.8 COLLATERAL MATTERS.
8.8.1 RELEASE OF COLLATERAL. The Lenders
hereby irrevocably authorize the Agent, at its option and in its
discretion, to release any Lien granted to or held by the Agent upon
any property covered by this Agreement or the Financing Documents:
(i) upon termination of the Commitments and payment
and satisfaction of all Obligations and expiration or
termination of all Letters of Credit and all Bond Letters
of Credit;
(ii) constituting property being sold or disposed of
if the Borrower or a Subsidiary Guarantor certifies to the
Agent that the sale or disposition is made in compliance
with the provisions of this Agreement (and the Agent may
rely in good faith conclusively on any such certificate,
without further inquiry);
(iii) constituting property leased to the Borrower or
any Subsidiary under a lease which has expired or been
terminated in a transaction permitted under this Agreement
or is about to expire and which has not been, and is not
intended by the Borrower or the Subsidiary to be, renewed
or extended; or
(iv) constituting property covered by Permitted Liens
with lien priority superior to those Liens in favor or for
the benefit of the Lenders.
In addition during any fiscal year of the Borrower (x) the Agent may
release Collateral having a book value of not more than 5% of the
book value of all Collateral, (y) the Agent, with the consent of
Requisite Lenders, may release Collateral having a book value of not
more than 25% of the book value of all Collateral and (z) the Agent,
with the consent of the Lenders having 90% of (i) the Commitments
and (ii) Loans, may release all the Collateral.
8.8.2 CONFIRMATION OF AUTHORITY, EXECUTION
OF RELEASES.
Without in any manner limiting the Agent's authority to act
without any specific or further authorization or consent by the
Lenders as set forth in Section 8.8.1, each Lender agrees to confirm
in writing the authority to release any property covered by this
Agreement or the Financing Documents conferred upon the Agent under
Section 8.8.1. So long as no Event of Default is then continuing,
upon receipt by the Agent of confirmation from the requisite
percentage of the Lenders, of its authority to release any
particular item or types of property covered by this Agreement or
the Financing Documents, the Agent shall (and is hereby irrevocably
authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of the Liens granted to the Agent
for the benefit of the Lenders herein or pursuant hereto upon such
Collateral; PROVIDED, HOWEVER, that (i) the Agent shall not be
required to execute any such document on terms which, in the Agent's
opinion, would expose the Agent to liability or create any
obligation or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not
in any manner discharge, affect or impair the Obligations or any
Liens upon (or obligations of any Person, in respect of), all
interests retained by any Person, including, without limitation, the
proceeds of any sale, all of which shall continue to constitute part
of the property covered by this Agreement or the Financing
Documents.
8.8.3 ABSENCE OF DUTY. The Agent shall have
no obligation whatsoever to any Lender, the Borrower or any other
Person to assure that the property covered by this Agreement or the
Financing Documents exists or is owned by the Borrower or any
Subsidiary Guarantor or is cared for, protected or insured or has
been encumbered or that the Liens granted to the Agent on behalf of
the Lenders herein or pursuant hereto have been properly or
sufficiently or lawfully created, perfected, protected or enforced
or are entitled to any particular priority, or to exercise at all or
in any particular manner or under any duty of care, disclosure or
fidelity, or to continue exercising, any of the rights, authorities
and powers granted or available to the Agent in this Section 8.8.3
or in any of the Financing Documents, it being understood and agreed
that in respect of the property covered by this Agreement or the
Financing Documents or any act, omission or event related thereto,
the Agent may act in any manner it may deem appropriate, in its
discretion, given the Agent's own interest in property covered by
this Agreement or the Financing Documents as one of the Lenders and
that the Agent shall have no duty or liability whatsoever to any of
the other the Lenders.
SECTION 8.9 AGENCY FEE. The Borrower shall pay to the
Agent, an annual loan administration and agency fee (collectively,
the "Agency Fees" and individually, an "Agency Fee"), in the
aggregate amount of Eighty Thousand Dollars ($80,000), payable
quarterly in arrears in installments of $20,000 each. The initial
Agency Fee shall be payable in advance on the date of this
Agreement, and each Agency Fee thereafter shall be payable in
advance on the first day of each quarterly period, commencing with
the first such day following the date hereof. Each Agency Fee shall
be fully earned and non-refundable upon the date paid. The Agent
shall retain all of the Agency Fees for its own account and shall
have no obligation to remit or pay any portion thereof to any of the
Lenders.
SECTION 8.10 AGENCY FOR PERFECTION. Each Lender hereby
appoints the Agent and each other Lender as agent for the purpose of
perfecting the Lenders' Liens in Collateral which, in accordance
with Article 9 of the Uniform Commercial Code in any applicable
jurisdiction or otherwise, can be perfected only by possession.
Should any Lender (other than the Agent) obtain possession of any
such Collateral, such Lender shall notify the Agent thereof, and,
promptly upon the Agent's request therefor, shall deliver such
Collateral to the Agent or in accordance with the Agent's
instructions.
SECTION 8.11 EXERCISE OF REMEDIES. Each Lender agrees that
it will not have any right individually to enforce or seek to
enforce this Agreement or any Financing Document or to realize upon
any collateral security for the Loans, it being understood and
agreed that such rights and remedies may be exercised only by the
Agent.
SECTION 8.12 CONSENTS.
(a) In the event the Agent requests the consent
of a Lender and does not receive a written denial thereof, or a
written notice from a Lender that due cause consideration of the
request requires additional time, in each case, within ten (10)
Business Days after such Lender's receipt of such request, then such
Lender will be deemed to have given such consent.
(b) In the event the Agent or the Borrower
requests the consent of a Lender and such consent is denied, then
NationsBank or the Borrower may, at its option, require such Lender
to assign its interest in the Loans to NationsBank or such other
lender as shall be acceptable to the Borrower and the Agent, for a
price equal to the then outstanding principal amount thereof, PLUS
accrued and unpaid interest, fees and costs and expenses due such
Lender under the Financing Documents, which principal, interest,
fees and costs and expenses will be paid on the date of such
assignment. In the event that NationsBank or the Borrower elects to
require any Lender to assign its interest to NationsBank or such
other lender as shall be acceptable to the Borrower and the Agent,
NationsBank will so notify such Lender in writing within thirty (30)
days following such Lender's denial, and such Lender will assign its
interest to NationsBank or such other lender as shall be acceptable
to the Borrower and the Agent, no later than five (5) days following
receipt of such notice.
(c) The Lenders each hereby authorize the Agent
on their behalf to execute any and all amendments to this Agreement
and any of the other Financing Documents as may be necessary to
remedy and correct any clerical errors, omissions or
inconsistencies. The Agent agrees to give copies of any and all
such executed amendments to each of the Lenders.
SECTION 8.13 CIRCUMSTANCES WHERE CONSENT OF ALL OF THE
LENDERS IS REQUIRED.
Notwithstanding anything to the contrary contained herein, no
amendment, modification, change or waiver shall be effective without
the consent of all of the Lenders to:
(a) increase the principal amount of any of the
Commitments;
(b) extend the maturity or due date of payment
of principal, interest or Fees on account of the Obligations;
(c) reduce the principal amount of any
Obligations, the rate of interest on any of the Obligations or any
Fees payable, except as expressly permitted therein;
(d) change the method of calculation utilized
in connection with the computation of interest and Fees;
(e) change the manner of pro rata application
by the Agent of payments made by the Borrower, or any other payments
required hereunder or under the other Financing Documents;
(f) modify this Section or the definition of
"Requisite Lenders";
(g) release any material portion of any
Collateral, any Guarantor or any Financing Document (except to the
extent provided herein or therein); and
(h) increase the advance rates for any
component of the Borrowing Base.
SECTION 8.14 DISSEMINATION OF INFORMATION. The Agent will
provide the Lenders with any information received by the Agent from
the Borrower which is required to be provided to the Agent or to the
Lenders hereunder; PROVIDED, HOWEVER, that the Agent shall not be
liable to any one or more the Lenders for any failure to do so,
except to the extent that such failure is attributable to the
Agent's gross negligence or willful misconduct.
SECTION 8.15 DISCRETIONARY ADVANCES. The Agent may, in its
sole discretion, make, for the account of the Lenders on a pro rata
basis, advances under the Revolving Loan of up to 10% in excess of
the Borrowing Base but not in excess of the limitation set forth in
aggregate Revolving Credit Commitments for a period of not more than
thirty (30) consecutive days or, following an Event of Default, for
such longer period as the Requisite Lenders may elect.
ARTICLE 9
MISCELLANEOUS
SECTION 9.1 NOTICES. All notices, requests and demands to
or upon the parties to this Agreement shall be in writing and shall
be deemed to have been given or made when delivered by hand on a
Business Day, or two (2) days after the date when deposited in the
mail, postage prepaid by registered or certified mail, return
receipt requested, or when sent by overnight courier, on the
Business Day next following the day on which the notice is delivered
to such overnight courier, addressed as follows:
Borrower: XXXXX PLASTICS CORPORATION
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: President
with a copy to:
Xxxxxxxx X. Xxxxx, Esquire
X'Xxxxxxxx, Graev & Karabell
00 Xxxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Xxxxxx X. Xxxx
Vice President
First Atlantic Capital, Ltd.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Agent: NATIONSBANK, N.A.
NationsBank Business Credit
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx
with a copy to:
Xxxxx X. Xxxxxxx, Esquire
Miles & Stockbridge, P.A.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
NationsBank: NationsBank, N.A.
NationsBank Business Credit
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxx Xxxxxxx
GE Capital: General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Account Manager - Xxxxx Plastics
Fleet: Fleet Capital Corporation
000 Xxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xx. Xxxxxx X. Xxxxxx
By written notice, each party to this Agreement may change the
address to which notice is given to that party, provided that such
changed notice shall include a street address to which notices may
be delivered by overnight courier in the ordinary course on any
Business Day.
SECTION 9.2 AMENDMENTS; WAIVERS. This Agreement and the
other Financing Documents may not be amended, modified, or changed
in any respect except by an agreement in writing signed by the
Requisite Lenders and the Borrower, and to the extent provided in
Section 8.13 by an agreement in writing signed by all of the Lenders
and the Borrower. In addition, any agreement which directly or
indirectly affects any rights, duties, obligations, liabilities or
remedies of the Agent under this Agreement, under any of other
Financing Documents or otherwise must be approved and signed by the
Agent. No waiver of any provision of this Agreement or of any of
the other Financing Documents, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same
shall be in writing. No course of dealing between the Borrower and
the Agent and/or any of the Lenders and no act or failure to act
from time to time on the part of the Agent and/or any of the Lenders
shall constitute a waiver, amendment or modification of any
provision of this Agreement or any of the other Financing Documents
or any right or remedy under this Agreement, under any of the other
Financing Documents or under applicable Laws.
Without implying any limitation on the foregoing, and subject
to the provisions of Section 8.13:
(a) Any waiver or consent shall be effective
only in the specific instance, for the terms and purpose for which
given, subject to such conditions as the Agent may specify in any
such instrument.
(b) No waiver of any Default or Event of
Default shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereto.
(c) No notice to or demand on the Borrower in
any case shall entitle the Borrower to any other or further notice
or demand in the same, similar or other circumstance.
(d) No failure or delay by the Lender to
insist upon the strict performance of any term, condition, covenant
or agreement of this Agreement or of any of the other Financing
Documents, or to exercise any right, power or remedy consequent upon
a breach thereof, shall constitute a waiver, amendment or
modification of any such term, condition, covenant or agreement or
of any such breach or preclude the Agent from exercising any such
right, power or remedy at any time or times.
(e) By accepting payment after the due date of
any amount payable under this Agreement or under any of the other
Financing Documents, the Agent shall not be deemed to waive the
right either to require prompt payment when due of all other amounts
payable under this Agreement or under any of the other Financing
Documents, or to declare a Default or an Event of Default for
failure to effect such prompt payment of any such other amount.
SECTION 9.3 CUMULATIVE REMEDIES. The rights, powers and
remedies provided in this Agreement and in the other Financing
Documents are cumulative, may be exercised concurrently or
separately, may be exercised from time to time and in such order as
the Agent shall determine, subject to the provisions of this
Agreement, and are in addition to, and not exclusive of, rights,
powers and remedies provided by existing or future applicable Laws.
In order to entitle the Agent to exercise any remedy reserved to it
in this Agreement, it shall not be necessary to give any notice,
other than such notice as may be expressly required in this
Agreement. Without limiting the generality of the foregoing and
subject to the terms of this Agreement, the Agent may:
(a) proceed against the Borrower with or without
proceeding against any other Person (including, without
limitation, any one or more of the Guarantors) who may be
liable (by endorsement, guaranty, indemnity or otherwise) for
all or any part of the Obligations;
(b) proceed against the Borrower with or without
proceeding under any of the other Financing Documents or
against any Collateral or other collateral and security for all
or any part of the Obligations;
(c) without reducing or impairing the obligation
of the Borrower and without notice, release or compromise with
any guarantor or other Person liable for all or any part of the
Obligations under the Financing Documents or otherwise;
(d) without reducing or impairing the
obligations of the Borrower and without notice thereof:
(i) fail to perfect the Lien in any or all Collateral or to
release any or all the Collateral or to accept substitute
Collateral, (ii) approve the making of advances under the
Revolving Loan under this Agreement, (iii) waive any provision
of this Agreement or the other Financing Documents, (iv)
exercise or fail to exercise rights of set-off or other rights,
or (v) accept partial payments or extend from time to time the
maturity of all or any part of the Obligations.
SECTION 9.4 SEVERABILITY. In case one or more provisions,
or part thereof, contained in this Agreement or in the other
Financing Documents shall be invalid, illegal or unenforceable in
any respect under any Law, then without need for any further
agreement, notice or action:
(a) the validity, legality and enforceability of
the remaining provisions shall remain effective and binding on
the parties thereto and shall not be affected or impaired
thereby;
(b) the obligation to be fulfilled shall be
reduced to the limit of such validity;
(c) such provision or part thereof only shall be
void, and the remainder of this Agreement shall remain
operative and in full force and effect.
SECTION 9.5 ASSIGNMENTS BY LENDERS. Any Lender may, with
the prior written consent of the Agent and the Borrower, but without
notice to or consent of any other Lender, which consent shall not be
unreasonably withheld, delayed or conditioned, assign to any Person
(each an "Assignee" and collectively, the "Assignees") all or a
portion of such Lender's Commitments; provided that (i) the amount
assigned by such Lender must be at least equal to Five Million
Dollars ($5,000,000), (ii) after giving effect to such assignment,
such Lender must continue to hold a Pro Rata Share of the
Commitments at least equal to Ten Million Dollars ($10,000,000),
unless such Lender has assigned one hundred percent (100%) of such
Lender's Commitments, and (iii) any amount assigned shall be divided
pro rata among such Lenders' Pro Rata Share of the Commitments and
Obligations. NationsBank agrees that if at any time NationsBank
sells one hundred percent (100%) of all of its Commitments,
NationsBank shall resign as Agent and the remaining Lenders shall
select a replacement Agent in accordance with the provisions of this
Agreement. In addition, NationsBank agrees that for so long as
NationsBank is the Agent, unless otherwise agreed by the Lenders,
NationsBank shall continue to hold a Pro Rata Share of the
Commitments at least equal to the Pro Rata Share of the Lender
(other than NationsBank) having the highest Pro Rata Share of the
Commitments. Any Lender which elects to make such an assignment
shall pay to the Agent, for the exclusive benefit of the Agent, an
administrative fee for processing each such assignment in the amount
of Three Thousand Five Hundred Dollars ($3,500). Such Lender and
its Assignee shall notify the Agent and the Borrower in writing of
the date on which the assignment is to be effective (the "Adjustment
Date"). On or before the Adjustment Date, the assigning Lender, the
Agent, the Borrower and the respective Assignee shall execute and
deliver a written assignment agreement in a form acceptable to the
Agent, which shall constitute an amendment to this Agreement to the
extent necessary to reflect such assignment. Upon the request of
any assigning Lender following an assignment made in accordance with
this Section 9.5, the Borrower shall issue new Notes to the
assigning Lender and its Assignee reflecting such assignment, in
exchange for the existing Notes held by the assigning Lender.
In addition to the foregoing assignments permitted by this
Section 9.5, without the prior written consent of the Borrower, but
with the consent of the Agent, which consent shall not be
unreasonably withheld, delayed or conditioned, any Lender may assign
all or any portion of such Lender's Commitments (a) to NationsBank,
Fleet, or GE Capital at any time regardless of the occurrence or
non-occurrence of an Event of Default and (b) to any other Person at
any time after the occurrence of an Event of Default; provided that
with respect to any such proposed assignment under either (a) or (b)
(i) the amount to be assigned by such assigning Lender must be at
least equal to Five Million Dollars ($5,000,000), (ii) after giving
effect to such assignment, such assigning Lender must continue to
hold a Pro Rata Share of the Commitments at least equal to Ten
Million Dollars ($10,000,000), unless such Lender has assigned one
hundred percent (100%) of such Lender's Commitments, (iii) any
amount to be assigned shall be divided pro rata among such Lender's
Pro Rata Share of the Commitments and the Obligations, and (iv)
prior to closing and consummating the proposed assignment (the
"Proposed Assignee"), the Lender shall have first given the Borrower
notice of the proposed assignment (the "Right of First Refusal
Notice") to permit the Borrower an opportunity to locate another
Person acceptable to the Agent (the "Substitute Purchaser") to close
and consummate the proposed assignment on the same terms and
conditions available to the Proposed Assignee and the Substitute
Purchaser shall in fact close and consummate the proposed assignment
within thirty (30) days after the Right of First Refusal Notice. If
the Borrower fails to locate a Substitute Purchaser or if the
Substitute Purchaser fails to close and consummate the proposed
assignment within such thirty (30) day period, the assigning Lender
shall be entitled to close and consummate the proposed assignment to
the Proposed Assignee without further notice or obligation to the
Borrower.
In addition, notwithstanding the foregoing, any Lender may at
any time pledge all or any portion of such Lender's rights under
this Agreement, any of the Commitments or any of the Obligations to
a Federal Reserve Bank.
SECTION 9.6 PARTICIPATIONS BY LENDERS. Any Lender may at
any time sell to one or more financial institutions participating
interests in any of such Lender's Obligations or Commitments;
provided, however, that (a) no such participation shall relieve such
Lender from its obligations under this Agreement or under any of the
other Financing Documents to which it is a party, (b) such Lender
shall remain solely responsible for the performance of its
obligations under this Agreement and under all of the other
Financing Documents to which it is a party, (c) the Borrower, the
Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights
and obligations under this Agreement and the other Financing
Documents, and (d) no such participant shall be granted voting
rights with respect to any matters reserved for the Lenders under
the provisions of this Agreement.
SECTION 9.7 DISCLOSURE OF INFORMATION BY LENDERS. (a) In
connection with any sale, transfer, assignment or participation by
any Lender in accordance with Section 9.5 or 9.6 above, each Lender
shall have the right to disclose to any actual or potential
purchaser, assignee, transferee or participant all financial
records, information, reports, financial statements and documents
obtained in connection with this Agreement and/or any of the other
Financing Documents or otherwise, provided that such actual or
potential purchaser shall agree to keep confidential any non-public
information delivered or made available to such Lender.
(b) Each of the Lenders and the Agent hereby agree to exercise
reasonable efforts to keep any non-public information delivered or
made available to it pursuant to this Agreement or any of the
Financing Documents, confidential from any other Person except (a)
Persons employed or retained by such Lender or Agent who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Obligations, (b) with the prior written consent of
Borrower, (c) as required in connection with the exercise of any
remedy under this Agreement or any of the Financing Documents or (e)
as may be required by Law, provided that in the event that any
Lender, the Agent or any of its or their representatives are
requested or compelled (by oral questions, interrogatories, requests
for information or documents, subpoena, civil investigative demand
or similar process) to disclose any of the non-public information
delivered or made available to any Lender or the Agent pursuant to
this Agreement or any of the Financing Documents, the Lenders, the
Agent and its or their representatives, as appropriate, agree to
provide Borrower with prompt notice of such request(s).
SECTION 9.8 SUCCESSORS AND ASSIGNS. This Agreement and all
other Financing Documents shall be binding upon and inure to the
benefit of the Borrower, the Agent and the Lenders and their
respective heirs, personal representatives, successors and assigns,
except that the Borrower shall not have the right to assign its
rights hereunder or any interest herein without the prior written
consent of the Agent and the Requisite Lenders.
SECTION 9.9 CONTINUING AGREEMENTS. All covenants,
agreements, representations and warranties made by the Borrower in
this Agreement, in any of the other Financing Documents, and in any
certificate delivered pursuant hereto or thereto shall survive the
making by the Lenders of the Loans, the issuance of Letters of
Credit by the Agent and the execution and delivery of the Notes,
shall be binding upon the Borrower regardless of how long before or
after the date hereof any of the Obligations were or are incurred,
and shall continue in full force and effect so long as any of the
Obligations are outstanding and unpaid. From time to time upon the
Agent's request, and as a condition of the release of any one or
more of the Security Documents, the Borrower and other Persons
obligated with respect to the Obligations shall provide the Agent
with such acknowledgments and agreements as the Agent may require to
the effect that there exists no defenses, rights of setoff or
recoupment, claims, counterclaims, actions or causes of action of
any kind or nature whatsoever against the Agent, any or all of the
Lenders, and/or any of its or their agents and others, or to the
extent there are, the same are waived and released.
SECTION 9.10 ENFORCEMENT COSTS. The Borrower agrees to pay
to the Agent on demand all Enforcement Costs (including expenses and
fees incurred by any Lender to the extent included in the definition
of Enforcement Costs), together with interest thereon from the date
following demand until paid in full at a per annum rate of interest
equal at all times to the Post-Default Rate. Enforcement Costs
shall be immediately due and payable at the time advanced or
incurred, whichever is earlier. Without implying any limitation on
the foregoing, the Borrower agrees, as part of the Enforcement
Costs, to pay upon demand any and all stamp and other Taxes and fees
payable or determined to be payable in connection with the execution
and delivery of this Agreement and the other Financing Documents and
to save the Agent and the Lenders harmless from and against any and
all liabilities with respect to or resulting from any delay in
paying or omission to pay any Taxes or fees referred to in this
Section. The provisions of this Section shall survive the execution
and delivery of this Agreement, the repayment of the other
Obligations and shall survive the termination of this Agreement.
SECTION 9.11 APPLICABLE LAW; JURISDICTION.
9.11.1 As a material inducement to the Agent and
the Lenders to enter into this Agreement, the Borrower acknowledges
and agrees that the Financing Documents, including, this Agreement,
shall be governed by the Laws of the State, as if each of the
Financing Documents and this Agreement had each been executed,
delivered, administered and performed solely within the State even
though for the convenience and at the request of the Borrower, one
or more of the Financing Documents may be executed elsewhere. The
Agent and the Lenders acknowledge, however, that remedies under
certain of the Financing Documents which relate to property outside
the State may be subject to the laws of the state in which the
property is located.
9.11.2 The Borrower irrevocably submits to the
jurisdiction of any state or federal court sitting in the State over
any suit, action or proceeding arising out of or relating to this
Agreement or any of the other Financing Documents. The Borrower
irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding brought in any such
court and any claim that any such suit, action or proceeding brought
in any such court has been brought in an inconvenient forum. Final
judgment in any such suit, action or proceeding brought in any such
court shall be conclusive and binding upon the Borrower and may be
enforced in any court in which the Borrower is subject to
jurisdiction, by a suit upon such judgment, PROVIDED that service of
process is effected upon the Borrower in one of the manners
specified in this Section or as otherwise permitted by applicable
Laws.
9.11.3 The Borrower hereby irrevocably designates
and appoints The Corporation Trust, Incorporated, 00 Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxxx 00000, as the Borrower's authorized agent to
receive on the Borrower's behalf service of any and all process that
may be served in any suit, action or proceeding of the nature
referred to in this Section in any state or federal court sitting in
the State. If such agent shall cease so to act, the Borrower shall
irrevocably designate and appoint without delay another such agent
in the State satisfactory to the Agent and shall promptly deliver to
the Agent evidence in writing of such other agent's acceptance of
such appointment and its agreement that such appointment shall be
irrevocable.
9.11.4 The Borrower hereby consents to process
being served in any suit, action or proceeding of the nature
referred to in this Section by (i) the mailing of a copy thereof by
registered or certified mail, postage prepaid, return receipt
requested, to the Borrower at the Borrower's address designated in
or pursuant to Section 9.1 hereof, and (ii) serving a copy thereof
upon the agent, if any, designated and appointed by the Borrower as
the Borrower's agent for service of process by or pursuant to this
Section. The Borrower irrevocably agrees that such service (i)
shall be deemed in every respect effective service of process upon
the Borrower in any such suit, action or proceeding, and (ii) shall,
to the fullest extent permitted by law, be taken and held to be
valid personal service upon the Borrower. Nothing in this Section
shall affect the right of the Agent to serve process in any manner
otherwise permitted by law or limit the right of the Agent otherwise
to bring proceedings against the Borrower in the courts of any
jurisdiction or jurisdictions.
SECTION 9.12 DUPLICATE ORIGINALS AND COUNTERPARTS. This
Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall
be deemed to be an original and all taken together shall constitute
but one and the same instrument.
SECTION 9.13 HEADINGS. The headings in this Agreement are
included herein for convenience only, shall not constitute a part of
this Agreement for any other purpose, and shall not be deemed to
affect the meaning or construction of any of the provisions hereof.
SECTION 9.14 NO AGENCY. Nothing herein contained shall be
construed to constitute the Borrower as the agent of the Agent or
any of the Lenders for any purpose whatsoever or to permit the
Borrower to pledge any of the credit of the Agent or any of the
Lenders. Neither the Agent nor any of the Lenders shall be
responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be
located and regardless of the cause thereof. Neither the Agent nor
any of the Lenders shall, by anything herein or in any of the
Financing Documents or otherwise, assume any of the Borrower's
obligations under any contract or agreement assigned to the Agent
and/or the Lenders, and neither the Agent nor any of the Lenders
shall be responsible in any way for the performance by the Borrower
of any of the terms and conditions thereof.
SECTION 9.15 WAIVER OF TRIAL BY JURY. THE BORROWER, THE
AGENT AND THE LENDERS HEREBY JOINTLY AND SEVERALLY WAIVE TRIAL BY
JURY IN ANY ACTION OR PROCEEDING TO WHICH THE BORROWER, THE AGENT
AND/OR ANY OR ALL OF THE LENDERS MAY BE PARTIES, ARISING OUT OF OR
IN ANY WAY PERTAINING TO (A) THIS AGREEMENT, (B) ANY OF THE
FINANCING DOCUMENTS, OR (C) THE COLLATERAL. THIS WAIVER CONSTITUTES
A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH
ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT
PARTIES TO THIS AGREEMENT.
This waiver is knowingly, willingly and voluntarily made
by the Borrower, the Agent and the Lenders, and the Borrower, the
Agent and the Lenders hereby represent that no representations of
fact or opinion have been made by any individual to induce this
waiver of trial by jury or to in any way modify or nullify its
effect. The Borrower, the Agent and the Lenders further represent
that they have been represented in the signing of this Agreement and
in the making of this waiver by independent legal counsel, selected
of their own free will, and that they have had the opportunity to
discuss this waiver with counsel.
SECTION 9.16 LIABILITY OF THE AGENT AND THE LENDERS. The
Borrower hereby agrees that neither the Agent nor any of the Lenders
shall be chargeable for any negligence, mistake, act or omission of
any accountant, examiner, agency or attorney employed by the Agent
and/or any of the Lenders in making examinations, investigations or
collections, or otherwise in perfecting, maintaining, protecting or
realizing upon any lien or security interest or any other interest
in the Collateral or other security for the Obligations, except for
acts of gross negligence and willful misconduct.
By inspecting the Collateral or any other properties of
the Borrower or by accepting or approving anything required to be
observed, performed or fulfilled by the Borrower or to be given to
the Agent and/or any of the Lenders pursuant to this Agreement or
any of the other Financing Documents, neither the Agent nor any of
the Lenders shall be deemed to have warranted or represented the
condition, sufficiency, legality, effectiveness or legal effect of
the same, and such acceptance or approval shall not constitute any
warranty or representation with respect thereto by the Agent and/or
the Lenders.
SECTION 9.17 ENTIRE AGREEMENT. THIS AGREEMENT IS INTENDED BY
THE AGENT, THE LENDERS AND THE BORROWER TO BE A COMPLETE, EXCLUSIVE
AND FINAL EXPRESSION OF THE AGREEMENTS CONTAINED HEREIN. NEITHER
THE AGENT, THE LENDERS NOR THE BORROWER SHALL HEREAFTER HAVE ANY
RIGHTS UNDER ANY PRIOR AGREEMENTS PERTAINING TO THE MATTERS
ADDRESSED BY THIS AGREEMENT BUT SHALL LOOK SOLELY TO THIS AGREEMENT
FOR DEFINITION AND DETERMINATION OF ALL OF THEIR RESPECTIVE RIGHTS,
LIABILITIES AND RESPONSIBILITIES UNDER THIS AGREEMENT.
IN WITNESS WHEREOF, each of the parties hereto have executed
and delivered this Agreement under their respective seals as of the
day and year first written above.
WITNESS OR ATTEST: XXXXX PLASTICS CORPORATION
/S/ By:/S/ XXXXX X. XXXXXXXXXX (Seal)
------------------------- ------------------------------
Xxxxx X. Xxxxxxxxxx
Vice President
WITNESS: NATIONSBANK, N.A.,
in its capacity as Agent
/S/ By:/S/ XXXXXX X. XXXXXXX (Seal)
------------------------- ------------------------------
Xxxxxx X. Xxxxxxx
Vice President
WITNESS: NATIONSBANK, N.A.
in its capacity as a Lender
/S/ By:/S/ XXXXXX X. XXXXXXX (Seal)
------------------------- ------------------------------
Xxxxxx X. Xxxxxxx
Vice President
WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION
in its capacity as a Lender
/S/ By:/S/ XXXXX ERLENCOTTER (Seal)
------------------------- ------------------------------
Xxxxx Erlencotter
Senior Vice President
WITNESS: FLEET CAPITAL CORPORATION
in its capacity as a Lender
/S/ By:/S/ XXXXXX X. XXXXXX (Seal)
------------------------- ------------------------------
Xxxxxx X. Xxxxxx
Vice President
LIST OF EXHIBITS
A. Form of Borrowing Base Report
B. Wire Transfer Procedures
C-1. Pro Forma Financial Statements
C-2 Pro Forma Balance Sheets
D. Form of Compliance Certificate
LIST OF SCHEDULES
SCHEDULE 1.1 List of Account Debtors (concentrations)
SCHEDULE 4.1.10 Litigation
SCHEDULE 4.1.14 Scheduled Indebtedness for Borrowed Money
SCHEDULE 4.1.20 Employee Relations Disclosures
SCHEDULE 4.1.21 Hazardous Materials Disclosures
SCHEDULE 4.1.22 Scheduled Permitted Liens
SCHEDULE 4.1.24 Information on Names, Addresses and Locations
SCHEDULE 6.2.5 Permitted Investments
EXHIBIT B
NATIONSBANK BUSINESS CREDIT
WIRE TRANSFER PROCEDURES
The transfer of funds by means of wire may be made by NationsBank
(lender) at the request of its customer (borrower). Such wire transfers
are categorized by lender as either repetitive or non-repetitive.
REPETITIVE:
Repetitive wire transfers may vary in amount, but are consistent in terms
of the payee, the location to which funds are wired, the bank name,
account number and the routing transit number.
Either borrower or lender may initiate a repetitive wire transfer. The
borrower may identify the repetitive nature of transfers and request they
be established as such via the "Repetitive Wire Transfer Authorization
Form" (copy attached). Lender, after observing numerous transfers to the
same recipient and destination, may initiate the repetitive process by
faxing or mailing the "Repetitive Wire Authorization Form" to the
borrower for completion and return.
Although a first request for a repetitive wire transfer may be honored
from a faxed copy of the "Repetitive Wire Transfer Authorization Form", a
copy of the form containing an original signature must be received from
the borrower. All transfer authorization forms must be approved by and
contain the signature of a person authorized by the borrower to advance
funds from borrower's line of credit with the lender.
After receipt of the original "Repetitive Wire Transfer Authorization
Form" by the lender, subsequent wire transfers to the recipient named
thereon may be initiated by telephone request, provided the requesting
party is identified by the lender as a person authorized by borrower to
advance funds from the borrower's line of credit with lender.
NON-REPETITIVE:
Non-Repetitive wire transfers are directed to recipients on a one-time or
infrequent basis or are directed to varied destinations. Non-repetitive
wire transfers require that written notification be provided to lender by
borrower, showing payee, location, account number, routing transit number
and name and location of bank into which funds are to be transferred.
Such written notification may be provided by means of a "Non-Repetitive
Wire Transfer Authorization Form" (copy attached).
Required information may be faxed to lender in order to expedite the
transfer; however, a copy of the transfer authorization form with an
original signature(s) must be received by lender from borrower. The
transfer authorization form must be approved by and contain the signature
of a person authorized by the borrower to advance funds from borrower's
line of credit with the lender.
For any non-repetitive wire transfer, Lender may, at its discretion,
perform a telephone verification with an authorized representative (the
original signer or another authorized representative) of borrower prior
to initiating the transfer.
EXHIBIT D
FINANCING AGREEMENT
COMPLIANCE CERTIFICATE
THIS CERTIFICATE is made as of __________________, 199_ , by XXXXX
PLASTICS CORPORATION, a corporation organized under the laws of the
State of Delaware, (the "Borrower"), to NATIONSBANK, N.A., a national
banking association (the "Agent"), pursuant to Section 6.1.1 of the
Financing and Security Agreement dated ______________, 199_, (as amended,
modified, restated, substituted,
