Ex. 10.33
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "Agreement") is made this ___ day
of July, 2000, by and among XXXXX PLASTICS CORPORATION, a corporation organized
under the laws of the State of Delaware (the "Borrower"); 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 (Assignments by Lender) (collectively, the
"Lenders" and individually, a "Lender"); GENERAL ELECTRIC CAPITAL CORPORATION, a
corporation organized and existing under the laws of the State of New York, in
its capacity as administrative agent for the Lenders (the "Agent"); and BANK OF
AMERICA, N.A., a national banking association, in its capacity as collateral
agent for the Agent and the Lenders (the "BofA Agent").
RECITALS
A. The Borrower has applied to the Lenders for a term loan facility in the
maximum principal amount of $25,000,000 to be used by the Borrower for the
Permitted Uses described in this Agreement.
B. The Lenders severally are willing to make the term loan facility
available to the Borrower upon the terms and subject to the conditions set forth
in this Agreement.
ARTICLE I
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.
"Additional Subordinated Debt" means that certain Indebtedness for
Borrowed Money of the Borrower (and all guarantees thereof by the Borrower and
its Subsidiaries) issued in favor of United States Trust Company of New York, as
trustee for the holders of the 12-1/4% Series B Senior Subordinated Notes (and
any other promissory notes hereafter issued in exchange therefor as contemplated
by the Indenture) due 2004 in a stated principal amount up to Twenty-five
Million Dollars ($25,000,000).
"Additional Subordinated Debt (Cardinal)" means that certain Indebtedness
for Borrowed Money of the Borrower (and all guarantees thereof by the Borrower
and its Subsidiaries) issued in favor of United States Trust Company of New
York, as trustee for the holders of the 11% Senior Subordinated Notes (and any
other promissory notes hereafter issued in exchange therefor as contemplated by
the Indenture) due 2007 in a stated principal amount of up to Seventy-five
Million Dollars ($75,000,000).
"Additional 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
Additional Subordinated Debt, as the same may from time to time be amended,
restated, supplemented or modified.
"Additional Subordinated Debt Loan Documents (Cardinal)" 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 Additional Subordinated Debt (Cardinal), as the same may
from time to time be amended, restated, supplemented or modified.
"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, (a) directly or indirectly controlling, directly or indirectly
controlled by, or under direct or indirect common control with the Person
designated, (b) directly or indirectly owning or holding ten percent (10%) or
more of any equity interest in such designated Person, or (c) 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.
2
"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 (Successor Agent).
"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.
"Agreement" means this Loan and Security Agreement, as amended, restated,
supplemented or otherwise modified in writing in accordance with the provisions
of Section 9.2 (Amendments; Waivers).
"Alternate Index Rate" means the sum of (a) the Index Rate plus (b) the
Applicable Margin.
"Applicable Interest Rate" means (a) the LIBOR Rate, or (b) the Alternate
Index Rate.
"Applicable Margin" means the applicable rate per annum to be added to the
LIBOR Base Rate or the Index Rate, as set forth in Section 2.2.1 (Applicable
Interest Rates).
"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 (Assignments by
Lenders).
"Bank of America" means Bank of America, N.A. and its successors and
assigns.
"Bankruptcy Code" means the United States Bankruptcy Code, as amended from
time to time, and any successor Laws.
"Xxxxx Acquisition" means Xxxxx Plastics Acquisition Corp., a corporation
organized and existing under the laws of the State of Delaware, and its
successors and assigns.
"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 UK" means Xxxxx Plastics UK Limited, a company organized and
existing under the laws of the England and formerly known as Norwich Injection
Moulders Limited, and its successors and assigns.
3
"BIC" means Xxxxx Iowa Corporation, a corporation organized and existing
under the laws of the State of Delaware, and its successors and assigns.
"BofA Agent" means the Person defined as the "Agent" under the provisions
of the BofA Financing Agreement and shall also include any successor agent
appointed pursuant to the provisions of the BofA Financing Agreement.
"BofA Commitments" means the "Commitments" as that term is defined in the
BofA Financing Agreement.
"BofA Financing Agreement" means that certain Third Amended and Restated
Financing and Security Agreement dated as of May 9, 2000, by and among the
Borrower, NIM Holdings, and Xxxxx UK; Bank of America, Fleet Capital
Corporation, a corporation organized and existing under the laws of the State of
Rhode Island, GE Capital, Xxxxxx Financial, Inc., a corporation organized and
existing under the laws of the State of Delaware, PNC Bank, National
Association, a national banking association, LaSalle Business Credit, Inc., a
corporation organized and existing under the laws of the State of Delaware, and
each other financial institution which is a party to the BofA Financing
Agreement; GE Capital, as documentation agent, and the BofA Agent, as the same
has been amended and may from time to time be further amended, restated,
supplemented or otherwise modified.
"BofA Financing Documents" means the "Financing Documents" as that term is
defined in the BofA Financing Agreement.
"BofA Lender" means each "Lender" under the terms of the BofA Financing
Agreement; and "BofA Lenders" means all "Lenders" under the terms of the BofA
Financing Agreement.
"BofA Obligations" means the "Obligations" as that term is defined in the
BofA Financing Agreement, subject to any limitations set forth in the
Intercreditor Agreement.
"BofA Requisite Lenders" means the "Requisite Lenders" as that term is
defined in the BofA Financing Agreement.
"BofA Termination Date" has the meaning given such term in the
Intercreditor Agreement.
"BTP" means Xxxxx Tri-Plas Corporation, a corporation organized and
existing under the laws of the State of Delaware, and its successors and
assigns.
"Business Day" means any day other than a Saturday, Sunday or other day on
which (i) in the case of GE Capital (as Agent and Lender), commercial banks in
the State of New York are authorized or required to close, and (ii) in the case
of the Lenders other than GE Capital, 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.
4
"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 of that Person.
"Capsol Italy" means Capsol S.p.A. Stampaggio Resine Termoplastiche, a
joint stock corporation organized and existing under the laws of the Republic of
Italy, and its successors and assigns.
"Cardinal" means Cardinal Packaging, Inc., a corporation organized and
existing under the laws of the State of Ohio, and its successors and assigns.
"Cash Equivalents" means (a) securities with unexpired maturities of one
year or less issued or fully guaranteed or insured by the United States
Government or any agency thereof, (b) certificates of deposit with unexpired
maturities of one (1) year or less or money market accounts maintained with, the
Agent, any Lender, Bank of America, any BofA Lender, any Affiliate of the Agent,
any Lender, Bank of America, or any BofA Lender, 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 BofA
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 unexpired maturities of six (6) months or
less. In addition, (i) with respect to Xxxxx UK and NIM Holdings, Cash
Equivalents shall also mean (a) securities with unexpired maturities of one year
or less issued or fully guaranteed or insured by the British National Government
or any agency thereof and (b) certificates of deposit with unexpired maturities
of one year or less or money market instruments issued by Barclays Bank PLC and
(ii) with respect to the Italian Holding Company, Ociesse and Capsol Italy, Cash
Equivalents shall also mean (a) securities with unexpired maturities of one year
of less issued or fully guaranteed or insured by the Italian national government
or any agency thereof and (b) certificates of deposit with unexpired maturities
of one year or less or money market instruments issued by the largest financial
institution based in the Republic of Italy.
"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 the date of this Agreement.
"Closing Fee" has the meaning described in Section 2.3.4 (the Closing
Fee).
"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.
5
"Collateral Agent" initially means the BofA Agent, in its capacity as
collateral agent for the Agent, the Lenders, the BofA Agent and the BofA Lenders
with respect to any and all collateral and security for the BofA Obligations and
the Obligations. Effective immediately on the BofA Termination Date and upon the
request of the Agent, the Agent shall succeed the BofA Agent as the Collateral
Agent under any and all Security Documents without further notice to, or consent
or agreement of, the Borrower or any other Person. Notwithstanding the
foregoing, if at any time any payment, or portion thereof, made by, or for the
account of, the Borrower or any other Person on account of any of the BofA
Obligations is set aside by any court or trustee having jurisdiction as a
voidable preference or fraudulent conveyance or must otherwise be restored or
returned by the BofA Agent and/or any of the BofA Lenders to the Borrower or to
any other Person under any insolvency, bankruptcy or other federal and/or state
laws or as a result of any dissolution, liquidation or reorganization of the
Borrower or such other Person or upon, or as a result of, the appointment of any
receiver, intervenor or conservator of, or trustee, or similar officer for, the
Borrower or such Person or any substantial part of its or their properties or
assets, the parties hereto agree that the BofA Agent shall be reinstated and
shall continue as the Collateral Agent under the Security Documents all as
though such payment(s) had not been made.
"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 Term Loan
Commitment, and "Commitments" means the collective reference to the Term Loan
Commitments of all of the Lenders.
"Commitment Fee" has the meaning described in Section 2.3.3 (the
Commitment Fee).
"Committed Amount" means with respect to each Lender, such Lender's Term
Loan Committed Amount, and "Committed Amounts" means collectively the Term Loan
Committed Amount of each of the Lenders.
"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.
"Compliance Certificate" means a periodic Compliance Certificate described
in Section 6.1.1(a) (Financial Statements).
"Copyrights" means and includes, in each case whether now existing or
hereafter arising, all of the Borrower's or any Subsidiary'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
6
any of the foregoing, and (d) all rights corresponding to any of the foregoing
throughout the world.
"CPI" means CPI Holding Corporation, a corporation organized and existing
under the laws of the State of Delaware, and its successors and assigns.
"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, the
Subsidiary Guarantors, Xxxxx UK, NIM Holdings and, upon closing and consummation
of the Italian Target Stock Purchase Transaction, the Italian Holding Company,
Capsol Italy and Ociesse, as appropriate, scheduled to be due and payable during
such period, excluding any "Term Loan B Mandatory Prepayments" with respect to
"Excess Cash Flow" (as defined in the BofA Financing Agreement), any "UK Term
Loan Mandatory Prepayment" with respect to "UK Excess Cash Flow" (as defined in
the BofA Financing Agreement), and any Term Loan Mandatory Prepayment with
respect to Excess Cash Flow."
"Debt Service Coverage Ratio" means as to the Borrower, each of the
Subsidiary Guarantors, Xxxxx UK, NIM Holdings, and, upon closing and
consummation of the Italian Target Stock Purchase Transaction, the Italian
Holding Company, Capsol Italy and Ociesse, on a consolidated basis, for any
period of determination thereof the ratio of (a) EBITDA to (b) Debt Service.
"Deed of Trust - Arlington Heights" means that certain amended and
restated deed of trust or mortgage dated as of May 9, 2000 from Knight to or for
the benefit of the Collateral Agent, as the same has been amended and may from
time to time be further amended, restated, supplemented or modified, which Deed
of Trust - Arlington Heights grants to the Collateral Agent for the benefit of
the BofA Lenders ratably and the BofA Agent, a first priority Lien on that
certain property located in Arlington Heights, Illinois as further described
therein and which grants to the Collateral Agent for the benefit of the Lenders
ratably and the Agent, a second priority Lien on such property.
"Deed of Trust - Baltimore" means that certain deed of trust or mortgage
dated as of May 9, 2000 from Poly-Seal to or for the benefit of the Collateral
Agent, as the same has been amended and may from time to time be further
amended, restated, supplemented or modified, which Deed of Trust - Baltimore
grants to the Collateral Agent for the benefit of the BofA Lenders ratably and
the BofA Agent, a first priority Lien on that certain property located in
Baltimore, Maryland as further described therein and which grants to the
Collateral Agent for the benefit of the Lenders ratably and the Agent, a second
priority Lien on such property.
"Deed of Trust - Indian Trail" means that certain amended and restated
deed of trust or mortgage dated as of May 9, 2000 from BTP to or for the benefit
of the Collateral Agent, as the same has been amended and may from time to time
be further amended, restated, supplemented or modified, which Deed of Trust -
Indian Trail grants to the Collateral Agent for the benefit of the BofA Lenders
ratably and for the benefit of the BofA Agent, a first priority Lien on that
certain property known generally as Xxxxxx Chapel-Stouts Road, Indian Trail,
North Carolina
7
28079 and which grants to the Collateral Agent for the benefit of the Lenders
ratably and the Agent, a second priority Lien on such property.
"Deed of Trust - Evansville" means that certain amended and restated deed
of trust or mortgage dated as of May 9, 2000 from the Borrower to or for the
benefit of the Collateral Agent, as the same has been amended and may from time
to time be further amended, restated, supplemented or modified, which Deed of
Trust - Evansville grants to the Collateral Agent for the benefit of the BofA
Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on
that certain property known generally as 000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx
00000 and which grants to the Collateral Agent for the benefit of the Lenders
ratably and the Agent, a second priority Lien on such property.
"Deed of Trust - Henderson" means that certain amended and restated deed
of trust or mortgage dated as of May 9, 2000 from the Borrower to or for the
benefit of the Collateral Agent, as the same has been amended and may from time
to time be further amended, restated, supplemented or modified, which Deed of
Trust - Henderson grants to the Collateral Agent for the benefit of the BofA
Lenders ratably and for the benefit of the BofA Agent, a second priority Lien on
that certain property known generally as 000 Xxxx Xxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxx 00000 and which grants to the Collateral Agent for the benefit of the
Lenders ratably and the Agent, a third priority Lien on such property.
"Deed of Trust - Iowa Falls" means that certain amended and restated deed
of trust or mortgage dated as of May 9, 2000 from BIC to or for the benefit of
the Collateral Agent, as the same has been amended and may from time to time be
further amended, restated, supplemented or modified, which Deed of Trust - Iowa
Falls grants to the Collateral Agent for the benefit of the BofA Lenders ratably
and for the benefit of the BofA Agent, a first priority Lien on that certain
property known generally as 0000 Xxxxxxxxxx Xxxx Xxxx, Xxxx Xxxxx, Xxxx 00000
and which grants to the Collateral Agent for the benefit of the Lenders ratably
and the Agent, a second priority Lien on such property.
"Deed of Trust - Xxxxxxxx" means that certain amended and restated deed of
trust or mortgage dated as of May 9, 2000 from PackerWare to or for the benefit
of the Collateral Agent, as the same has been amended and may from time to time
be further amended, restated, supplemented or modified, which Deed of Trust -
Xxxxxxxx grants to the Collateral Agent for the benefit of the BofA Lenders
ratably and for the benefit of the BofA Agent, a first priority Lien on that
certain property known generally as 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxx 00000 and
which grants to the Collateral Agent for the benefit of the Lenders ratably and
the Agent, a second priority Lien on such property.
"Deed of Trust - Monroeville" means that certain amended and restated deed
of trust or mortgage dated as of May 9, 2000 from Venture Midwest to or for the
benefit of the Collateral Agent, as the same has been amended and may from time
to time be further amended, restated, supplemented or modified, which Deed of
Trust - Monroeville grants to the Collateral Agent for the benefit of the BofA
Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on
that certain property located in Huron County, Ohio, as further described
therein and which grants to the Collateral Agent for the benefit of the Lenders
ratably and the Agent, a second priority Lien on such property.
8
"Deed of Trust - Streetsboro" means that certain amended and restated deed
of trust or mortgage dated as of May 9, 2000 from Cardinal to or for the benefit
of the Collateral Agent, as the same has been amended and may from time to time
be further amended, restated, supplemented or modified, which Deed of Trust -
Streetsboro grants to the Collateral Agent for the benefit of the BofA Lenders
ratably and the BofA Agent, a first priority Lien on that certain property
located in Streetsboro, Ohio as further described therein and which grants to
the Collateral Agent for the benefit of the Lenders ratably and the Agent, a
second priority Lien on such property.
"Deed of Trust - Suffolk" means that certain amended and restated credit
line deed of trust, assignment and security agreement dated as of May 9, 2000
from Xxxxx Design to or for the benefit of the Collateral Agent, as the same may
from time to time be amended, restated, supplemented or modified, which Deed of
Trust - Suffolk grants to the Collateral Agent for the benefit of the BofA
Lenders ratably and for the benefit of the BofA Agent, a first priority Lien on
that certain property known generally as 0000 Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxxx
and which grants to the Collateral Agent for the benefit of the Lenders ratably
and the Agent, a second priority Lien on such property.
"Deed of Trust - Woodstock" means that certain amended and restated deed
of trust or mortgage dated as of May 9, 2000 from Knight to or for the benefit
of the Collateral Agent, as the same has been amended and may from time to time
be further amended, restated, supplemented or modified, which Deed of Trust -
Woodstock grants to the Collateral Agent for the benefit of the BofA Lenders
ratably and the BofA Agent, a first priority Lien on that certain property
located in Woodstock, Illinois as further described therein and which grants to
the Collateral Agent for the benefit of the Lenders ratably and the Agent, a
second priority Lien on such property.
"Deeds of Trust" means the collective reference to the Deed of Trust -
Arlington Heights, the Deed of Trust - Baltimore, the Deed of Trust -
Streetsboro, the Deed of Trust - Woodstock, 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, and
the Deed of Trust - Suffolk.
"Default" means an event that, 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 (a) the payment of any dividends or other
distributions on capital stock of the Borrower (except distributions in any
class of capital stock) and (b) 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 (excluding the Preferred Stock) or
the issuance of Subordinated Indebtedness to the extent permitted by the
provisions of this Agreement or otherwise consented to by the BofA Agent at any
time on or before the BofA Termination Date and, thereafter, 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.
9
"Dollar" or "Dollars" means United States Dollars.
"EBITDA" means as to the Borrower, Xxxxx UK, NIM Holdings, the Subsidiary
Guarantors, and, upon closing and consummation of the Italian Target Stock
Purchase Transaction, the Italian Holding Company, Capsol Italy and Ociesse, 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., plus (n) unusual or
nonrecurring non-cash losses or expenses, plus (o) non-recurring
acquisition-related cash expenses up to $5,000,000 for fiscal year 2000 only. In
connection with the calculation of any financial covenant provided in Section
6.1.13 following the closing and consummation of any Permitted Acquisition,
EBITDA shall include each Subject Transaction which constitutes a Permitted
Acquisition, with such calculation to be based on a twelve (12) month trailing
period reflecting actual and historical performance of the Subject Transaction.
"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 3.7 (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
10
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.
"Event of Default" has the meaning described in ARTICLE VII (Default and
Rights and Remedies).
"Excess Cash Flow" means for any annual period of determination thereof
and with respect to the Borrower and the Subsidiary Guarantors only and not
including Xxxxx UK or NIM Holdings, an amount equal to fifty percent (50%) of
the sum of (a) EBITDA, less (b) non-financed Capital Expenditures permitted by
Section 6.2.6 (Capital Expenditures), less (c) cash income Taxes and alternative
minimum Taxes, less (d) increases in working capital, plus (e) decreases in
working capital, less (f) Debt Service, as shown on the annual financial
statements for such annual period, furnished to the Agent in accordance with
Section 6.1.1 (Financial Statements); 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 Commitment Fee and the Closing Fee.
"Financing Documents" means at any time collectively this Agreement, the
Notes, the Security Documents, and any other instrument, agreement or document
previously, simultaneously or hereafter executed and delivered by the Borrower,
any Subsidiary 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, 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, Xxxxx UK, NIM Holdings, the
Subsidiary Guarantors, and, upon closing and consummation of the Italian Target
Stock Purchase
11
Transaction, the Italian Holding Company, Capsol Italy and Ociesse, 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 income Taxes, plus cash
dividends declared or paid.
"Fixed Charge Coverage Ratio" means for any period of determination with
respect to the Borrower, Xxxxx UK, NIM Holdings, the Subsidiary Guarantors, and,
upon closing and consummation of the Italian Target Stock Purchase Transaction,
the Italian Holding Company, Capsol Italy and Ociesse, on a consolidated basis,
the ratio of (a) EBITDA, less the aggregate amount of all non-financed Capital
Expenditures for such period, plus all cash proceeds from Permitted Asset
Dispositions to the extent reinvested into Fixed or Capital Assets if and to the
extent permitted by the provisions of this Agreement, to (b) Fixed Charges.
"Funded Debt" means as to the Borrower, Xxxxx UK, NIM Holdings, each of
the Subsidiary Guarantors, and, upon closing and consummation of the Italian
Target Stock Purchase Transaction, the Italian Holding Company, Capsol Italy and
Ociesse, on a consolidated basis, as of any date of determination, (a) the
aggregate of all Indebtedness for Borrowed Money of the Borrower, Xxxxx UK, NIM
Holdings, each of the Subsidiary Guarantors, and, upon closing and consummation
of the Italian Target Stock Purchase Transaction, the Italian Holding Company,
Capsol Italy and Ociesse, whether secured or unsecured (but excluding, without
duplication, loans by the Borrower to one or more of the Subsidiary Guarantors,
Xxxxx UK, NIM Holdings, the Italian Holding Company, Capsol Italy and/or
Ociesse), 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 (b) the aggregate
amount of all cash balances and Cash Equivalents of the Borrower, Xxxxx UK, NIM
Holdings, any of the Subsidiary Guarantors, and/or, upon closing and
consummation of the Italian Target Stock Purchase Transaction, the Italian
Holding Company, Capsol Italy and/or Ociesse.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time, except that with respect to any
Subsidiary Guarantor which is not a domestic Subsidiary, GAAP means generally
accepted accounting principles in the jurisdiction of such Subsidiary's
formation in effect from time to time. Notwithstanding the foregoing, with
respect to (i) any financial statements which consolidate any foreign Subsidiary
Guarantor with the Borrower or any other Subsidiary Guarantor or (ii) any
financial covenant relating to any foreign Subsidiary, the Borrower and/or any
Subsidiary Guarantor on a consolidated basis, GAAP shall mean 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
12
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 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, Xxxxx UK, NIM Holdings 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, Xxxxx
UK, NIM Holdings or any Subsidiary Guarantor or for which the Borrower, Xxxxx
UK, NIM Holdings 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, Xxxxx UK, NIM Holdings or any Subsidiary Guarantor, and any other
contamination by Hazardous Materials for which the Borrower, Xxxxx UK, NIM
Holdings 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
13
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
Multi-employer 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 collectively (i) 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,
(ii) that certain indenture dated as of August 24, 1998 by and between the
Borrower and the United States Trust Company of New York, as trustee, with
respect to the Additional Subordinated Debt, and (iii) that certain indenture
dated as of July 6, 1999 by and between the Borrower and the United States Trust
Company of New York, as trustee, entered into in connection with the Additional
Subordinated Debt (Cardinal), each as the same may be amended, restated
supplemented or otherwise modified.
"Index Rate" means the higher of (a) the Prime Rate, or (b) the sum of (i)
the Federal Funds Rate, plus (ii) fifty (50) basis points.
"Index Rate Loan" means any Loan for which interest is to be computed with
reference to the Alternate Index Rate.
"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 endorsement.
"Intercreditor Agreement" means that certain Intercreditor Agreement dated
as of the date hereof by and among the Borrower, the Subsidiary Guarantors, the
BofA Agent, the BofA Lenders, the Agent and the GE Lenders, as the same may be
amended, restated, supplemented or otherwise modified at any time and from time
to time.
"Interest Coverage Ratio" means as to the Borrower, Xxxxx UK, NIM
Holdings, each of the Subsidiary Guarantors, and, upon closing and consummation
of the Italian Target Stock Purchase Transaction, 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.
14
"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 Index 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 or 90 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 or 90 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 Business
Day;
(b) if any Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless such next succeeding Business Day would
fall in the next calendar month, in which case, such Interest Period shall
end on the next preceding Business Day; and
(c) no Interest Period shall extend beyond the Maturity Date.
"Interest Rate Election Notice" has the meaning described in Section
2.2.2(e) (Selection of Interest Rates).
"Interest Rate/Currency Protection Agreement" means, for any Person,
interest rate swap, cap, floor or collar agreements, currency agreements,
currency spot, foreign exchange and forward contracts or similar arrangement
between such Person and one or more financial institutions providing for the
transfer or mitigation of interest or currency risks either generally or under
specific contingencies.
"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 now owned and hereafter acquired inventory, 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, 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.
"Italian Holding Company" means Capsol-Xxxxx Plastics, S.r.l., a limited
liability company organized and existing under the laws of the Republic of
Italy, and its successors and assigns.
"Italian Target" means each of Capsol Italy and Ociesse, individually and
collectively, and each of their successors and assigns.
15
"Italian Target Stock" means all capital stock issued by the Italian
Target acquired or to be acquired by the Italian Holding Company, all in
accordance with the Italian Target Stock Purchase Agreement, together with any
and all proceeds and products thereof.
"Italian Target Stock Purchase Agreement" means that certain Share and
Quota Purchase Agreement to be entered into by and among the Borrower, the
Italian Holding Company and the shareholders of the Italian Target, 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.
"Italian Target Stock Purchase Documents" means collectively the Italian
Target Stock Purchase Agreement and any and all other agreements, documents or
instruments, previously, now or hereafter executed and delivered by the
Borrower, or any other Person in connection with the Italian Target Stock
Purchase Transaction, as the same may from time to time be amended, restated,
supplemented and modified.
"Italian Target Stock Purchase Transaction" means the acquisition of all
issued and outstanding Italian Target Stock by the Italian Holding Company in
accordance with the provisions of the Italian Target Stock Purchase Agreement.
"Knight" means Knight Plastics, Inc., a corporation organized and existing
under the laws of the State of Delaware, and its successors and assigns.
"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.
"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 Dollars at approximately 11:00
a.m. (London time) two (2) 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 upward, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two (2) Business Days prior to the first day of such Interest
Period; provided, however, if more than one rate is specified on Reuters Screen
LIBOR 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
16
(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,
(a) the Applicable Margin, plus (b) 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 Term Loans, and "Loans" means the collective
reference to the Term Loans.
"Maturity Date" means July 1, 2002.
"Multi-employer Plan" means a Plan that is a multi-employer plan as
defined in Section 4001(a)(3) of ERISA.
"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 and Taxes
payable in connection therewith and payment of the BofA Obligations in full.
"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 (a) 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 (b) any sale, issuance or other offering of
Indebtedness or Securities, net of customary and reasonable closing costs, fees
and expenses.
"NIM Holdings" means NIM Holdings Limited, a company organized and
existing under the laws of England, and its successors and assigns.
17
"Norwich" means Norwich Acquisition Limited, a company organized and
existing under the laws of England and Wales, and its successors and assigns.
"Note" means any Term Loan Note, and "Notes" means collectively each Term
Loan Note, and any other promissory note which may from time to time evidence
all or any portion of the Obligations.
"Ociesse" means Ociesse S.r.l. - Officina Costruzione Stampi - Lavorazioni
Meccaniche di Precisione, a limited liability company organized and existing
under the laws of the Republic of Italy, and its successors and assigns.
"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 the 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,
and/or the Loans, including, without limitation, the principal of, and interest
on, each Note, late charges, the Fees, Enforcement Costs, and prepayment fees
(if any); 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 THIS AGREEMENT CONSTITUTE AND ARE HEREBY DEEMED "DESIGNATED
SENIOR INDEBTEDNESS" AS DEFINED IN THE INDENTURE.
"PackerWare" means PackerWare Corporation, a corporation organized and
existing under the laws of the State of Delaware, and its successors and
assigns.
"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 the acquisition or purchase of, or
investment in, any Person, any operating division or unit of any Person, or the
capital stock or Assets of any Person or the combination with any Person by the
Borrower or any Subsidiary Guarantor (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 (Line of
Business); provided, however that:
18
(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 at any time or in any circumstance
the lesser of:
(1) the product of (A) the actual EBITDA for (x) the
Person which is the target of such Subject Transaction or (y) the
seller or the division of the seller of the assets which is the
target of such Subject Transaction, as applicable, for the then
preceding twelve (12) month period after giving effect to such
Subject Transaction (subject to such pro-forma adjustments as shall
be reasonably acceptable to the BofA Agent (at any time on or before
the BofA Termination Date and, thereafter, the Agent) in its sole
and absolute discretion), and (B) 5, except that for the Italian
Target, the required multiple shall be 6.0, or
(2) Twenty Million Dollars ($20,000,000) (excluding the
Poly-Seal Stock Purchase Transaction),
(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, excluding the "Poly-Seal
Stock Purchase Transaction" (as defined in the BofA Financing Agreement),
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 BofA Agent (at any time
on or before the BofA Termination Date and, thereafter, 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 BofA Agent or the Requisite Lenders,
or at any time after the BofA Termination Date, the Agent, 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 BofA Agent or the
Agent, as the case may be, 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,
19
(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 another 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 or cause its Subsidiary
to execute all documents and take such other actions as the BofA
Agent (at any time on or before the BofA Termination Date and,
thereafter, the Agent) may reasonably require to grant to the
Collateral Agent a first priority Lien on one hundred percent (100%)
of the stock of such Subsidiary for the benefit of the BofA Agent
and the BofA Lenders and to grant to the Collateral Agent for the
benefit of the Agent and the Lenders a second priority Lien on one
hundred percent (100%) of the stock of such Subsidiary, except that
no pledge shall be required with respect to the stock of Xxxxx UK or
Norwich and no pledge shall be required with respect to the stock of
any other foreign Subsidiary if such pledge would result in a
materially adverse tax consequence for the Borrower under the
Internal Revenue Code or would violate applicable law, and
(2) such Subsidiary (other than Xxxxx UK, Norwich or NIM
Holdings) 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 (Subsidiaries), except
that a foreign Subsidiary shall not be designated or required to
qualify as a Subsidiary Guarantor if such designation would result
in a materially adverse tax consequence for the Borrower under the
Internal Revenue Code or violate applicable law,
(vii) after giving effect to any borrowings under the
"Revolving Loan" (as defined in the BofA Financing Agreement), 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 BofA Agent (at any time on or before the BofA
Termination Date and, thereafter, the Agent) in its reasonable discretion,
(ix) the BofA Agent (at any time on or before the BofA
Termination Date and, thereafter, 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
20
may have reasonably requested in connection with such proposed Subject
Transaction,
(x) if requested by the BofA Agent (at any time on or before
the BofA Termination Date and, thereafter, the Agent), the BofA Agent or
the Agent, as the case may be, shall have received, prior to or
simultaneously with the closing of a Subject Transaction, an opinion of
counsel reasonably acceptable to the BofA Agent (at any time on or before
the BofA Termination Date and, thereafter, 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
BofA Agent or, at any time after the BofA Termination Date, 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, Xxxxx UK, NIM Holdings 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,
(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 fiscal year (excluding the Poly-Seal Stock Purchase
Transaction) shall not exceed Twenty Million Dollars ($20,000,000), and
(xiii)The Agent has consented to the Subject Transaction,
which consent the Agent agrees shall not be unreasonably withheld, delayed
or conditioned.
The Agent and the Lenders agree that the purchase of certain assets of
Capsal-Certwood UK Ltd. by Xxxxx UK shall constitute a Permitted Acquisition;
provided that Xxxxx UK and/or the Borrower satisfy subparts (ii), (iii), (vi),
(viii), (x), (xi) and (xii) of this definition of Permitted Acquisition.
"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 (A) the Net Proceeds to be paid to or received
by the Borrower and/or any Subsidiary with respect to such Asset
Disposition, plus (B) the aggregate amount of all Net
21
Proceeds paid to or received by the Borrower and/or any or all
Subsidiaries, is less than or equal to One Million Dollars
($1,000,000) during any fiscal year, and
(ii) none of the Assets sold under this clause (a) constitute
molds used in the business of the Borrower, NIM Holdings, Xxxxx UK
or any Subsidiary Guarantor.
(b) sales of Inventory in the ordinary course of business,
(c) the licensing of Patents, Trademarks and/or Copyrights, in the
ordinary course of business,
(d) dispositions of worn, used, surplus or obsolete tangible property in
the ordinary course of business; provided that any the proceeds of any
such disposition shall be subject to the Liens of the Collateral Agent as
and to the extent provided in the BofA Financing Agreement and herein,
(e) 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, the Borrower, Xxxxx UK, NIM Holdings or the Subsidiary
Guarantor, as the case may be, shall give the Collateral Agent at least
ten (10) days prior written notice of such Asset Disposition, except for
an Asset Disposition which constitutes a casualty.
(f) 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 Collateral Agent; no intercompany sales, leases or other
dispositions of Assets among and between Xxxxx UK or NIM Holdings and the
Borrower or any Subsidiary Guarantor shall be permitted without the prior
written consent of the Collateral Agent, except that Xxxxx UK and/or NIM
Holdings may sell, lease or otherwise transfer Assets to the Borrower,
provided that such Assets become subject to Liens of the Collateral Agent
(subject only to Permitted Liens) immediately upon any sale or other
transfer.
(g) the sale of any Fixed or Capital Assets acquired by the Borrower,
Xxxxx UK, NIM Holdings 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,
(h) the sale of molds by the Borrower, Xxxxx UK, NIM Holdings or any
Subsidiary Guarantor; provided that the aggregate Net Proceeds of any and
all such molds outside
22
the ordinary course of business shall not exceed Five Hundred Thousand
Dollars ($500,000) in any fiscal year,
(i) the sale of the real property and improvements subject to the Lien of
the Deed of Trust - Arlington Heights, provided that the Net Proceeds of
such sale are used within 180 days of their receipt to purchase other
Fixed or Capital Assets which are to be subject to the Liens of the
Collateral Agent,
(j) the sale of a portion of the real property and improvements subject to
the lien of the Deed of Trust - Evansville as more particularly described
on Schedule 1.1B - Evansville Sale Leaseback attached hereto and made a
part hereof, provided that the Net Proceeds of such sale are used within
180 days of their receipt to purchase other Fixed or Capital Assets which
are to be subject to the Liens of the Collateral Agent; and
(k) the sale of Fixed or Capital Assets that are sold in connection with a
sale-leaseback transaction referred to in clause (A) of the last sentence
of Section 6.2.16..
"Permitted Liens" means: (a) Liens for Taxes (i) which are not delinquent
or (ii) which (1) are being diligently contested in good faith and by
appropriate proceedings, (2) the Borrower, Xxxxx UK, NIM Holdings 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, Xxxxx UK, NIM Holdings or the Subsidiary Guarantor, as
appropriate, and (3) 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 Collateral Agent unless and to the extent that a reserve has been
established against the "Borrowing Base" (as defined in the BofA Financing
Agreement) (or the "UK Borrowing Base" (as defined in the BofA Financing
Agreement), as appropriate) in an amount equal to the maximum liability under
and in connection with such Taxes, which reserve shall be established by the
BofA 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 BofA Obligations and the Obligations, which Liens securing the BofA
Obligations shall be senior to the 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, Xxxxx UK, NIM Holdings or any
Subsidiary 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) or
23
Refinancing Indebtedness with respect thereto permitted by the provisions of
Section 6.2.4(m); (l) Liens securing obligations under Capital Leases to the
extent such Capital Leases are permitted by the provisions of this Agreement,
and (m) any Lien arising under any retention of title arrangements entered into
in the ordinary course of trading and not entered into primarily for the
purposes of securing borrowings.
"Permitted Uses" means the payment of outstanding obligations under the
"Revolving Loan" (as defined in the BofA Financing Agreement).
"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.
"Poly-Seal" means Poly-Seal Corporation, a corporation organized and
existing under the laws of the State of Delaware, and its successors and
assigns.
"Poly-Seal Stock" means all capital stock issued by Poly-Seal acquired or
to be acquired by the Borrower, all in accordance with the Poly-Seal Stock
Purchase Transaction, together with any and all proceeds and products thereof.
"Poly-Seal Stock Purchase Agreement" means that certain Agreement and Plan
of Merger dated as of May 9, 2000 by and among the Borrower, Xxxxx Plastics
Acquisition and the shareholders of Poly-Seal, 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.
"Poly-Seal Stock Purchase Documents" means collectively the Poly-Seal
Stock Purchase Agreement and any and all other agreements, documents or
instruments, previously, now or hereafter executed and delivered by the
Borrower, or any other Person in connection with the Poly-Seal Stock Purchase
Transaction, as the same may from time to time be amended, restated,
supplemented and modified.
"Poly-Seal Stock Purchase Transaction" means the acquisition of all issued
and outstanding capital stock of Poly-Seal by the Borrower in accordance with
the provisions of the Poly-Seal Stock Purchase Agreement.
"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.
"Preferred Stock" means the issued and outstanding class of Series A-1
Preferred Stock issued by the Parent for sale to one or more of the Parent's
existing shareholders for an aggregate purchase price of Twenty-five Million
Dollars ($25,000,000).
24
"Prepayment" means a Term Loan Mandatory Prepayment or a Term Loan
Optional Prepayment, and "Prepayments" mean collectively all Term Loan Mandatory
Prepayments and all Term Loan Optional Prepayments.
"Prime Rate" means the highest quoted annual rate of interest which is
published from time to time in The Wall Street Journal listing of "Money Rates"
as the "Prime Rate". If The Wall Street Journal listing of "Money Rates" is
discontinued or substantially altered, the Agent may, in its sole discretion,
chose another index of annual interest rates for non-consumer loans which is
readily available and verifiable and beyond the control of the Agent; in this
event, the substitute index therefore will be considered the Prime Rate although
the Agent, in its sole discretion, may increase or decrease the Applicable
Margin to make the interest rate comparable to the interest rate under the Prime
Rate last in effect. The Borrower acknowledges and agrees that the Prime Rate is
a reference used in determining interest rates on certain loans by the Agent,
and that it is not intended to be the best or lowest rate of interest charged on
any extension of credit to any customer.. The Prime Rate shall be adjusted
automatically, without notice, as of the effective date of any change in such
published Prime Rate.
"Proposed Assignee" has the meaning described in Section 9.5 (Assignments
by Lenders).
"Pro-forma Financial Projections" has the meaning described in Section
4.1.12 (Pro-forma Financial Statements).
"Pro-forma Financial Statements" has the meaning described in Section
4.1.12 (Pro-forma Financial Statements).
"Pro Rata Share" means at any time and as to any Lender, the percentage
derived by dividing the unpaid principal amount of the Loans owing to that
Lender by the aggregate unpaid principal amount of all Loans then outstanding.
"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 fifty-one percent (51%) of the Loans; except that at
all times on or before the BofA Termination Date, "Requisite Lenders" means at
any time of determination one or more of the Lenders and/or the BofA Lenders
holding at least fifty-one percent (51%) of the sum of (i) the Loans and (ii)
the BofA Commitments, in the aggregate.
"Requisite Term Loan Lenders" means at any time of determination one or
more Lenders holding at least fifty-one percent (51%) of the Loans.
"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
25
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.
"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 Documents" means the "Security Documents" as defined in the BofA
Financing Agreement, as amended to secure the Obligations, all as the same may
from time to time be further amended, restated, supplemented or otherwise
modified.
"Seller" means all of the shareholders of the Italian Target immediately
prior to consummation of the Italian Target Stock Purchase Transaction.
"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.
"State" means the State of Maryland.
"Stockholder's Equity" means as to the Borrower, Xxxxx UK, NIM Holdings,
each of the Subsidiary Guarantors, and, upon closing and consummation of the
Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol
Italy and Ociesse, 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.
"Subject Transaction" has the meaning given such term in the definition of
Permitted Acquisition.
"Subordinated Debt" means collectively (i) that certain Indebtedness for
Borrowed Money of the Borrower (and all guarantees thereof by the Borrower and
its Subsidiaries) in favor
26
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), (ii) the Additional Subordinated Debt,
and (iii) the Additional Subordinated Debt (Cardinal).
"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 (Indebtedness), 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.
"Subsidiary" means with respect to any Person, any other Person owning the
majority of the voting shares of such first Person.
"Subsidiary Guarantor" means BIC, BTP, AeroCon, Xxxxx Xxxxxxxx,
PackerWare, Xxxxx Design, Xxxxx Venture, Venture Southeast, Venture Midwest,
Knight, CPI, Cardinal, Poly-Seal, or any other domestic Subsidiary (organized
and existing under the laws of any state in the United States) 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 (Subsidiaries), or any of their
respective successors and assigns, as the case may be; and, "Subsidiary
Guarantors" means BIC, BTP, AeroCon, Xxxxx Xxxxxxxx, Xxxxx Design, PackerWare,
Xxxxx Venture, Venture Southeast, Venture Midwest, Knight, CPI, Cardinal,
Poly-Seal, each other domestic Subsidiary of the Borrower designated and
qualified as a "Subsidiary Guarantor" in accordance with the provisions of
Section 6.2.2 (Subsidiaries), and all of their respective successors and
assigns. In addition, if and to the extent permitted by Italian law, "Subsidiary
Guarantor" shall also include the Italian Holding Company, Ociesse and Capsol
Italy. For purposes of this Agreement, however, the Agent and the Lenders agree
that none of the tangible or intangible assets or properties (excluding capital
stock) of Capsol Italy, Ociesse and/or the Italian Holding Company located in
the Republic of Italy shall be pledged to the Collateral Agent, the Agent and/or
the Lenders as collateral for any of the Obligations. Upon consummation of the
Italian Stock Purchase Transaction, if and to the extent permitted by Italian
law, all of the Obligations shall be secured by the grant to the Collateral
Agent of a second priority assignment, pledge and grant of one hundred percent
(100%) of the outstanding shares of capital stock now or at any time hereafter
issued by Capsol Italy, Ociesse and/or the Italian Holding Company.
"Substitute Purchaser" has the meaning described in Section 9.5
(Assignments by Lenders).
"Tangible Capital Funds" means as to the Borrower, Xxxxx UK, NIM Holdings,
each of the Subsidiary Guarantors, and, upon closing and consummation of the
Italian Target Stock Purchase Transaction, the Italian Holding Company, Capsol
Italy and Ociesse, on a consolidated
27
basis, for any date of determination thereof, the total of (a) all Stockholder's
Equity, less (b) all Assets which would be classified as intangible assets under
GAAP consistently applied, plus (c) 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, Xxxxx UK, NIM Holdings 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" and "Term Loans have the meanings described in Section 2.1
(Term Loan Facility).
"Term Loan Commitment" and "Term Loan Commitments" have the meanings
described in Section 2.1.1 (Term Loan Commitments).
"Term Loan Committed Amount" has the meaning described in Section 2.1.1
(Term Loan Commitments).
"Term Loan Facility" means the facility established by the Lenders
pursuant to Section 2.1 (Term Loan Facility).
"Term Loan Mandatory Prepayment" and "Term Loan Mandatory Prepayments"
have the meanings described in Section 2.1.3 (Mandatory Prepayments of Term
Loan).
"Term Loan Optional Prepayment" and "Term Loan Optional Prepayments" have
the meanings described in Section 2.1.4 (Optional Prepayments of Term Loans).
"Term Loan Pro Rata Share" has the meaning described in Section 2.1 (Term
Loan Facility).
"Term Loan Note" and "Term Loan Notes" have the meaning described in
Section 2.1.2 (Amortization of Term Loans).
"Total Term Loan Committed Amount" has the meaning described in Section
2.1.1 (Term Loan Commitments).
"Trademarks" means and includes in each case whether now existing or
hereafter arising, all of the Borrower's or any Subsidiary Guarantor'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
28
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" means Venture Packaging, Inc., a corporation organized
and existing under the laws of the State Delaware, and its successors and
assigns.
"Venture Midwest" means Venture Packaging Midwest, Inc., a corporation
organized and existing under the laws of the State of Delaware, and its
successors and assigns.
"Venture Southeast" means Xxxxx Plastics Technical Services, Inc., a
corporation organized and existing under the laws of the State of Delaware,
formerly known as Venture Packaging Southeast, Inc., and its successors and
assigns.
"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.
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 (Financial Covenants), 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.
29
ARTICLE II
THE CREDIT FACILITIES
Section 2.1 The Term Loan Facility.
2.1.1 Term Loan Commitments.
Subject to and upon the terms of this Agreement, each Lender
severally agrees to make a loan (each a "Term Loan"; and collectively, the "Term
Loans") to the Borrower in the principal amount set forth below opposite such
Lender's name (herein called such Lender's "Term Loan Committed Amount"). The
total of each Lender's Term Loan Committed Amount is herein called the "Total
Term Loan Committed Amount". The proportionate share set forth below opposite
each Lender's name is herein called such Lender's "Term Loan Pro Rata Share":
Term Loan Term Loan
Lender Committed Amount Pro Rata Share
------ ---------------- --------------
GE Capital $25,000,000 100%
Total Term Loan
Committed Amount: $25,000,000 100%
The obligation of each Lender to make a Term Loan is several
and is limited to its Term Loan Committed Amount, and such obligation of each
Lender is herein called its "Term Loan Commitment". The Term Loan Commitment of
each of the Lenders are herein collectively referred to as the "Term Loan
Commitments". The Agent shall not be responsible for the Term Loan Commitment of
any Lender; and similarly, none of the Lenders shall be responsible for the Term
Loan Commitment of any of the other Lenders; the failure, however, of any Lender
to perform its Term Loan Commitment shall not relieve any of the other Lenders
from the performance of their respective Term Loan Commitments.
2.1.2 Payment of Term Loans; the Term Loan Notes.
The unpaid principal balance of the Term Loans shall be due
and payable in full on the Maturity Date. The obligation of the Borrower to pay
the Term Loans, with interest, shall be evidenced by a series of promissory
notes (each as from time to time extended, amended, restated, supplemented or
otherwise modified, a "Term Loan Note" and collectively, the "Term Loan Notes").
Each Term Loan Note shall be dated as the Closing Date and shall be payable to
the order of a Lender at the times provided in the Term Loan Note, and shall be
in the principal amount of such Lender's Term Loan Committed Amount.
2.1.3 Mandatory Prepayments of Term Loans.
Subject to the provisions of Section 2.2.4 (Indemnity), the
Borrower shall make the following mandatory prepayments (each a "Term Loan
Mandatory Prepayment" and collectively the "Term Loan Mandatory Prepayments") of
the Term Loans to the Agent for the ratable benefit of the Lenders:
30
(a) Following payment of the BofA Obligations in full,
the Borrower shall make Term Loan Mandatory Prepayments of the Term Loans to the
Agent for the ratable benefit of the Lenders annually. Each Term Loan 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 (Financial
Statements). 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 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.
(b) To the extent the Net Proceeds of any Asset
Disposition (excluding any Asset Disposition by Xxxxx UK or NIM Holdings)
(including the sale and issuance of any Securities) by the Borrower or any
Subsidiary Guarantor cause the aggregate of all such Asset Dispositions in any
fiscal year to exceed Five Hundred Thousand Dollars ($500,000), all of such
excess, if any, remaining after payment of the BofA Obligations in full, shall
be paid to the Agent as a Term Loan Mandatory Prepayment. Notwithstanding the
foregoing, the Borrower shall not be required to make a Term Loan Mandatory
Prepayment in connection with
(i) 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;
(ii) 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 Collateral Agent's demand, the Borrower and/or the
Subsidiary Guarantor, as the case may, on or before the BofA
Termination Date, shall take all such actions as shall be reasonably
requested by the Collateral Agent to grant to the Collateral Agent
for the benefit of the BofA Agent and the ratable benefit of the
BofA Lenders a first priority perfected Lien on any such
Indebtedness for Borrowed Money and to grant to the Collateral Agent
for the benefit of the Agent and the ratable benefit of the Lenders
a second priority perfected Lien and at any time after the BofA
Termination Date, shall take all such actions as shall be reasonably
required by the Collateral Agent to grant to the Collateral Agent
for the benefit of the Agent and the ratable benefit of the Lenders,
a first priority perfected Lien on any such Indebtedness for
Borrowed Money; 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);
31
(iii) the issuance and sale of the Preferred
Stock; and
(iv) the sale of the property which is subject to
the Lien of the Deed of Trust - Arlington Heights and/or the sale of
a portion of the property which is subject to the Lien of the Deed
of Trust - Evansville; provided that such sale or sales constitute a
Permitted Asset Disposition.
(c) Immediately upon closing and consummation of any
public or private offering of Indebtedness for Borrowed Money by the Borrower or
any Subsidiary Guarantor on or after the Closing Date, the Borrower shall make a
Term Loan Mandatory Prepayment in an amount equal to the balance, if any, of one
hundred percent (100%) of the Net Proceeds of such public or private offering
remaining after payment of the BofA Obligations in full; provided that a Term
Loan Mandatory Prepayment shall not be required with respect to:
(i) Indebtedness for Borrowed Money permitted by Section 6.2.4
(Indebtedness), other than subsection (d) of Section 6.2.4; and
(ii) the issuance of any Indebtedness by the Borrower or any
Subsidiary Guarantor, if (A) 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 or (B) 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 (C) the aggregate amount of
Indebtedness under clauses (i) and (ii) of this subsection (b) does
not exceed Twenty Million Dollars ($20,000,000).
The Borrower shall pay to the Agent on the date of each required Term Loan
Mandatory Prepayment accrued interest to such date on the amount prepaid. Each
partial Term Loan Mandatory Prepayment shall be applied to the unpaid principal
balance of the Term Loans due on the Maturity Date.
2.1.4 Optional Prepayments of Term Loans.
Subject to the provisions of Section 2.2.4 (Indemnity), the
Borrower may, at its option, at any time and from time to time, prepay (each a
"Term Loan Optional Prepayment" and collectively the "Term Loan Optional
Prepayments") the Term Loans, 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 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 Optional Prepayments shall
be in minimum amounts of Five
32
Million Dollars ($5,000,000) and shall be applied to the unpaid principal
balance of the Term Loans due on the Maturity Date.
Section 2.2 Interest.
2.2.1 Applicable Interest Rates.
(a) Each Loan shall bear interest until maturity
(whether by acceleration, declaration, extension or otherwise) at either the
Alternate Index Rate or the LIBOR Rate, as selected and specified by the
Borrower, as appropriate, in an Interest Rate Election Notice furnished to the
Agent in accordance with the provisions of Section 2.2.2(e) (Selection of
Interest Rates), or as otherwise determined in accordance with the provisions of
this Section 2.2, and as may be adjusted from time to time in accordance with
the provisions of Section 2.2.3 (Inability to Determine LIBOR Base Rate).
(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
four hundred fifty (450) basis points per annum and (ii) Index Rate Loans shall
be three hundred (300) basis points.
2.2.2 Selection of Interest Rates.
(a) The Borrower shall select the initial Applicable
Interest Rate to be charged on the Term 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
2.2.2(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 selection of an Applicable Interest Rate and/or
an Interest Period, the 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 Maturity Date,
(ii) no change from the LIBOR Rate to the
Alternate Index Rate shall become effective on a day other than a
Business Day and unless the Agent or the Lenders, as appropriate,
receive any compensation payable pursuant to Section 2.2.4
(Indemnity), 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
33
Interest Period, and no change from the Alternate Index Rate to the
LIBOR Rate shall become effective on a day other than a day which is
a Business Day,
(iii) no more than two (2) different LIBOR Rates
may be outstanding at any time and from time to time with respect to
the Term Loans,
(iv) the first day of each Interest Period shall
be a Business Day,
(v) the Borrower shall not be entitled to select
the LIBOR Rate as the Applicable Interest Rate for any Loans
following and during the continuance of a Default or an Event of
Default, and
(vi) 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
Index 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 converted,
(ii) a selection of the Alternate Index 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 for a Loan must be received by the
Agent not later than 10:00 a.m. (New York City Time) on the Business Day of any
requested borrowing or conversion in the case of a selection of the Alternate
Index Rate and not later than 10:00 a.m. (New York City
34
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..
2.2.3 Inability to Determine LIBOR Base Rate.
In the event that (a) the Agent shall have determined that, by
reason of circumstances affecting the London interbank 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 (b) 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 an Alternate
Index Rate Loan. Until such notice has been withdrawn by the Agent, the Borrower
will not request that any Loan be converted to a LIBOR Loan.
2.2.4 Indemnity.
The Borrower agrees to indemnify and reimburse the Agent and
the Lenders and to hold the Agent and 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 an Interest Rate
Election Notice, (c) the failure of the Borrower to make any prepayment of a
LIBOR Loan after the Borrower has 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.
The foregoing agreements and covenants of the Borrower shall survive termination
or expiration of this Agreement and payment of the 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. Neither the Agent nor any of the Lenders shall 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.
35
2.2.5 Payment of Interest.
(a) Unpaid and accrued interest on any Index 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 Index 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, in arrears, on the last day of the applicable LIBOR Interest Period and
at maturity (whether by acceleration, declaration, extension or otherwise).
Notwithstanding anything to the contrary contained herein, the Agent agrees that
the Borrower shall not have any obligation to make any payment pursuant to the
provisions of Section 2.2.4 (Indemnity) resulting solely from the payment of
accrued interest on a date other than the expiration date of an Interest Period.
Section 2.3 General Financing Provisions.
2.3.1 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 the Loans, 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) 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 (iii) 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 the Loans to 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.
(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 any Loan or any other
transaction in connection with the provisions of this Agreement, except for acts
of willful misconduct and gross negligence.
36
2.3.2 Use of Proceeds of the Loans.
The proceeds of each Loan shall be used by the Borrower for
Permitted Uses, and for no other purposes except as may otherwise be agreed by
the Requisite Term Loan Lenders in writing.
2.3.3 Commitment Fee.
The Borrower shall pay to the Agent a commitment fee (the
"Commitment Fee") in the amount of One Hundred Thousand Dollars ($100,000). The
Agent shall remit the Commitment Fee to those Lenders which have funded the Term
Loans as of the Closing Date. The Commitment Fee shall be payable on or before
the Closing Date and shall be deemed fully earned on the date paid and is
non-refundable.
2.3.4 Closing Fee.
The Borrower shall pay to the Agent for the ratable benefit of
the Lenders based on each Lender's Pro Rata Share of the Commitments, a closing
fee (the "Closing Fee") in the amount of Seven Hundred Fifty Thousand Dollars
($750,000), less the amount of the Commitment Fee actually paid to and received
by the Agent on or before the Closing Date. The Closing Fee shall be payable on
or before the Closing Date and shall be deemed fully earned on the date paid and
is non-refundable.
2.3.5 Computation of Interest.
All applicable 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
Index Rate shall become effective as of the opening of business on the day on
which such change in the Alternate Index Rate is announced.
2.3.6 Payments.
All payments to be made by the Borrower to the Agent and/or
any of the Lenders under this Agreement or any of the other Financing Documents
with respect to the Obligations shall be made in Dollars, without set-off or
counterclaim and free and clear of, and without deduction for or on account of,
any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions, withholdings or restrictions or conditions of any
nature whatsoever now or hereafter imposed, levied, collected, withheld or
assessed against the Borrower, other than income and franchise taxes imposed on
any Lender (the "Assessments"). If the Borrower fails to perform its obligations
to the Agent and/or any of the Lenders under the foregoing, the Borrower shall
indemnify the Agent and the Lenders for any such Assessments that are paid by
the Agent and/or any of the Lenders, plus all incremental Assessments, interest
or penalties that may become payable as a consequence of such failure. All
payments of the Obligations, including, without limitation, principal, interest,
Prepayments, and Fees, shall be paid by the Borrower to the Agent (except as
otherwise provided herein) at the Agent's office specified in Section 9.1
(Notices) in immediately available funds not later than 2:00 p.m. (New York 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
37
computing interest 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.
2.3.7 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 any of 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. Notwithstanding the foregoing, the Agent and
the Lenders acknowledge and agree that any Liens and rights of setoff under this
Section 2.3.7 are subordinate and junior to the Liens and rights of setoff
securing the BofA Obligations; accordingly, the Agent and the Lenders agree that
on or before the BofA Termination Date any amounts received by them on account
of any such Liens or rights of setoff shall be remitted to the Collateral Agent
for application to the BofA Obligations until such time as the BofA Obligations
are paid in full. In addition, the Agent and the Lenders agree that any Liens
and rights of setoff under this Section 2.3.7 shall be held for the benefit of,
and as agent for, the Collateral Agent.
2.3.8 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 2.3.8 assign one hundred percent (100%) of its
Obligations to
38
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 (Assignments by Lenders).
Section 2.4 Settlement Among Lenders.
The Agent shall pay to each Lender on each date on which a
payment of principal and/or interest on the Term 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.
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, proceeds from the sale of, or other realization upon, all or any
part of the Collateral following an Event of Default and payment of the BofA
Obligations in full) that are received by the Agent not later than 11:00 a.m.
(New York 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. (New York City Time) will be paid by the Agent to each Lender
on the following Business Day. Unless otherwise stated herein, the Agent 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.
Section 2.5 Presumption of Payment.
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 has
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 III
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)) 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 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
the Collateral Agent for the benefit of each Lender
39
in such property shall rank equally in priority with the Lien for the benefit of
each other Lender, but the security interest and Lien of the Collateral Agent
for the benefit of the Agent with respect to the Agent's Obligations shall be
superior to the security interest and Lien of the Lender.
Section 3.2 Grant of Liens.
The Borrower hereby assigns, pledges and grants to the Collateral 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 Collateral Agent 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 Collateral
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 in each case subject to the provisions of
the Financing Documents, including, without limitation, the Intercreditor
Agreement. Notwithstanding anything to the contrary contained herein, the
Collateral shall not include (i) 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 or (ii) any assets or properties of the Borrower or any
Subsidiary which are not subject to a prior and senior perfected Lien in favor
of the Collateral Agent with respect to the BofA Obligations. Notwithstanding
anything to the contrary contained herein, the Collateral shall not include any
item of tangible or intangible property to the extent the grant of a security
interest pursuant hereto in the Borrower's right, title and interest in such
item of property is prohibited by an applicable contractual obligation or
requirement of law or would give any other Person the right to terminate its
obligations with respect to such item (it being understood and agreed, however,
that notwithstanding the foregoing, all rights to payment for money due or to
become due pursuant to any such excluded item of property shall be subject to
the security interests created hereby and it being further understood and agreed
that any such excluded item shall be included as part of the Collateral if and
to the extent any applicable prohibition on the collateral assignment of such
item shall be unenforceable under the applicable Uniform Commercial Code as now
or hereafter in effect).
The Agent and the Lenders acknowledge and agree that all Liens and
security interests granted by the Borrower and/or any of the Subsidiary
Guarantors to the Collateral Agent pursuant to this Agreement or any of the
other Financing Documents shall at all times be junior and subordinate to the
Liens and security interests of the Collateral Agent with respect to the BofA
Obligations, except as set forth in the Intercreditor Agreement. The Agent, the
Lenders and the Borrower further understand and agree that notwithstanding any
provision herein to the contrary or in any of the Financing Documents, all Liens
and security interests shall be granted
40
to the Collateral Agent for the benefit of the Agent and the Lenders and that at
no time prior to the BofA Termination Date shall any such Liens or security
interests be granted to or otherwise held in the name of the Agent and/or any of
the Lenders.
Section 3.3 Personal Property.
The Borrower acknowledges and agrees that it is the intention of the
parties to this Agreement that (i) the Collateral 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 (Grant of
Liens), shall have a second priority, perfected Lien (except that the Collateral
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 third
priority Lien, subject to first priority Liens as set forth in Schedule 4.1.22),
in form and substance reasonably satisfactory to the Collateral Agent and its
counsel, on all of the personal property of the Borrower and of each Subsidiary
Guarantor of any kind and nature whatsoever which is subject to the Liens and
security interests of the Collateral Agent with respect to the BofA Obligations,
whether now owned or hereafter acquired, as security for all of the Obligations,
subject only to the Permitted Liens. In furtherance of the foregoing:
3.3.1 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), the
Borrower shall deliver and shall cause each Subsidiary Guarantor that owns
Collateral to deliver (or shall have delivered or caused to be delivered) to the
Collateral Agent, 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 Collateral Agent, so requires, shall execute
and deliver and, shall cause each such 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 Collateral Agent, which pledge, assignment and security
agreement shall assign, pledge and grant a first priority Lien to the Collateral
Agent, for the ratable benefit of the BofA Lenders and for the benefit of the
BofA Agent with respect to the "Agent's Obligations" (as defined in the BofA
Financing Agreement) and a second priority Lien to the Collateral 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 such Subsidiary
Guarantor, as the case may be; provided that at all times after the BofA
Termination Date, any required Lien for the benefit of the Agent and the Lenders
shall be a first priority Lien. In addition, the Borrower agrees to endorse to
the order of the Collateral Agent any and all Instruments that constitute or
evidence all or any portion of the Collateral.
(b) In the event that the Borrower or any such
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 Collateral Agent and deliver the originals
of all of the foregoing to the Collateral Agent, promptly and in any event
within thirty (30) days of each acquisition.
41
(c) All letters of credit, Securities, Chattel Paper,
Documents and Instruments to be delivered hereunder shall be delivered to the
Collateral Agent endorsed and/or assigned as required by the pledge, assignment
and security agreement and/or as the Collateral Agent may require and, if
applicable, shall be accompanied by blank irrevocable and unconditional stock or
bond powers.
3.3.2 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 (Grant of Liens), the Borrower shall
execute and deliver and, shall cause each Subsidiary Guarantor that owns
Collateral, 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 Collateral Agent in order to perfect an
assignment of Patents, Copyrights, Trademarks, customer lists or any other type
or kind of intellectual property acquired by the Borrower or any such Subsidiary
Guarantor after the Closing Date, which assignment shall grant to the Collateral
Agent for the benefit of the BofA Agent and the BofA Lenders a first priority
assignment of the foregoing and shall grant to the Collateral Agent for the
benefit of the Agent and the Lenders a second priority assignment; except that
at all times after the BofA Termination Date any assignment given for the
benefit of the Agent and the Lenders under this Section shall be a first
priority assignment.
Section 3.4 Record Searches.
As determined by the Collateral Agent, at the time any Financing Document
is executed and delivered by the Borrower pursuant to the BofA Financing
Agreement or this ARTICLE III or any other Section of this Agreement, the
Collateral Agent shall, in its reasonable discretion and if requested, have
received, in form and substance satisfactory to the Collateral 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 with
respect to the BofA Obligations and a second priority Lien with respect to the
Obligations, subject only to Permitted Liens or to such other Liens or matters
as the Collateral Agent may approve. The Agent agrees that it shall not require
Lien or record searches if and to the extent the BofA Agent has obtained such
Lien and record searches and, if requested by the Agent, has furnished copies of
such Lien or record searches to the Agent promptly upon request. In addition,
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 (a) one-time only after the Closing Date to confirm the due
filing and Lien priority of the Agent and the Lenders, (b) 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 (c) in addition, at any time
following the occurrence of a Default or an Event of Default.
42
Section 3.5 Real Property.
The Borrower acknowledges and agrees that it is the intention of the
parties to this Agreement that the Collateral 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 second priority, perfected Lien, in form and substance
satisfactory to the Collateral 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 to a first priority Lien in favor
of the Collateral Agent for the benefit of the BofA Agent and the BofA Lenders
and to the Permitted Liens, 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 that owns Collateral), the Borrower shall execute
and deliver and, subject to the terms of Section 3.6 (Subsidiary Guarantor
Assets), shall cause each such 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, including, any
amendments or confirmations of the existing Deeds of Trust as may be required by
the Collateral Agent, 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 such Subsidiary Guarantor after the
Closing Date (whether by merger or otherwise), the Borrower shall grant and
shall cause each such 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 Collateral Agent, for the benefit of the
BofA Agent, the BofA Lenders, the Agent and the Lenders, 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
Collateral Agent;
(b) create a first priority Lien in such real property in
favor of the Collateral Agent, for the ratable benefit of the BofA Lenders and
for the benefit of the BofA Agent with respect to the "Agent's Obligations" (as
defined in the BofA Financing Agreement) and a second priority Lien in such real
property in favor of the Collateral 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 Collateral Agent may approve, except that at all times after the
BofA Termination Date, any Lien for the benefit of the Agent and the Lenders
shall be a first priority Lien;
(c) be accompanied by a current survey reasonably satisfactory
in all respects to the Collateral Agent of the subject real property, prepared
by a registered land surveyor or engineer reasonably satisfactory to the
Collateral Agent;
(d) be accompanied by evidence reasonably satisfactory to the
Collateral 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 request
of the Collateral Agent, an environmental audit of such real property prepared
by a person or firm reasonably acceptable to the Collateral Agent;
43
(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 Collateral Agent insuring the Lien in the real
property granted by Borrower and/or the Subsidiary Guarantors in favor of the
Collateral Agent, for the benefit of the BofA Lenders, the BofA Agent, the Agent
and the Lenders, and issued by a title insurance company reasonably satisfactory
to the Collateral Agent, except for any real property located in a jurisdiction
outside of the United States unless mortgagee's title insurance coverage is
customary in such jurisdiction; and
(f) upon request of the Collateral Agent be accompanied by a
signed opinion of counsel addressed to the BofA Agent, the BofA Lenders, the
Agent and each of the Lenders, as appropriate, in form and substance reasonably
satisfactory to the Collateral Agent or the Agent, as the case may be.
Section 3.6 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, except as expressly provided in the Financing
Documents, the joint and several obligations of each Subsidiary Guarantor under
the Guaranty are and shall continue to be secured by a second priority Lien
(subject only to the first priority Lien in favor of the Collateral Agent with
respect to the BofA Obligations and to Permitted Liens) on all Assets and
properties of each Subsidiary Guarantor.
Section 3.7 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 Collateral Agent, the Agent and 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 3.6 (Subsidiary
Guarantor Assets), and any of the following:
(a) customary reasonable fees and expenses incurred by the
Collateral Agent, 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;
44
(f) appraisal and/or survey costs; and
(g) all related reasonable costs, fees and expenses.
Section 3.8 Release.
Upon the payment and performance of all Obligations (other than contingent
indemnification and expense reimbursement obligations for which no claim has
been made) of the Borrower and termination of this Agreement 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, upon the Borrower's request and at the Borrower's sole
cost and expense, the Collateral Agent shall release and/or terminate the Liens
of any and all of the Financing Documents.
Section 3.9 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.
Section 3.10 Collateral Agency. The Borrower, the Agent and the Lenders
acknowledge and agree that in order to minimize the cost of obtaining,
perfecting and continuing certain Liens and security interests of the Agent and
the Lenders as required by the terms of this Agreement and as required by the
Intercreditor Agreement, the BofA Agent shall be and remain the Collateral Agent
at all times on or before the BofA Termination Date. Accordingly, neither the
Agent nor the Lenders will require at any time on or before the BofA Termination
Date that the Borrower execute and deliver any Financing Document to create,
perfect or maintain any Liens or security interests required by the terms of
this Agreement if and to the extent the BofA Financing Documents give rise to
and perfect such required Liens and security interests.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties.
The Borrower represents and warrants to the Agent and the Lenders, as
follows (any of the following relating to the Italian Target Stock Purchase
Transaction being made only at and after the time the same is consummated):
4.1.1 Subsidiaries.
The Borrower owns the Subsidiaries listed on the "Collateral
Disclosure List" attached to, and made a part of, the BofA Financing Agreement
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 the BofA Financing Agreement, which correctly indicates the nature
and amount of the Borrower's ownership interests therein, as applicable.
45
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, and the Italian Target Stock Purchase Documents to which it is a
party, to make the borrowings under this Agreement, to close and consummate each
aspect of the Italian Target Stock Purchase Transaction, as appropriate and to
incur and perform the Obligations whether under this Agreement, the other
Financing Documents, the Italian Target Stock Purchase 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, and no consent, approval, filing or registration with or notice to
any Governmental Authority on the part of the Borrower or any Subsidiary, is
required as a condition to the execution, delivery, validity or enforceability
of this Agreement, the other Financing Documents, any of the Italian Target
Stock Purchase Documents, the performance by the Borrower of the Obligations or
the closing and consummation of the Italian Target Stock Purchase 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 the 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 the
Subsidiaries, (b) any existing mortgage, indenture, contract or agreement
46
binding on the Borrower or any of the 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 the 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 the Subsidiaries, taken as a whole,
or which would materially adversely affect the ability of the Borrower and the
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 the Subsidiaries is a party.
4.1.7 Compliance with Laws.
Neither the Borrower nor any of the 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
Subsidiary 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 Subsidiary 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 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 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 Subsidiary 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 Subsidiary 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
47
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, could reasonably be expected to have a material adverse effect on
the business, properties, condition (financial or otherwise) or operations,
present or prospective, of the Borrower or any of the Subsidiaries taken as a
whole.
4.1.11 Financial Condition.
The audited consolidated annual financial statements of the
Borrower and the Subsidiaries dated as of December 31, 1999 and, subject to
audit adjustments and the absence of footnotes, the unaudited quarterly
financial statements of the Borrower and the Subsidiaries dated as of March 31,
2000, are complete and correct and fairly present the financial position of the
Borrower and the 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 that 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
(Investments), 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 Pro-forma Financial Statements.
The Borrower has furnished to the Agent a pro-forma
consolidated balance sheet of the Borrower and the Subsidiaries as of end of the
most recent fiscal month giving effect to the Italian Target Stock Purchase
Agreement Transaction and the transactions incident thereto (the "Pro-forma
Balance Sheet") together with pro-forma financial projections of the Parent for
the five-year period subsequent to the Italian Target Stock Purchase Transaction
(the "Pro-forma Financial Projections"). A copy of the Pro-forma Balance Sheet
and the Pro-forma Financial Projections are attached hereto as Exhibits A-1 and
A-2, respectively. The Pro-forma Balance Sheet is correct and complete, has been
prepared in accordance with GAAP, and fairly presents in all material respects
the consolidated financial condition of the Borrower and the Subsidiaries as of
the end of the most recent fiscal month giving effect to the Italian Target
Stock Purchase Transaction, after giving effect to the Italian Target Stock
Purchase Transaction and the transactions incident thereto. The Pro-forma
Financial Projections represent the best estimate of the future operations of
the Parent (assuming the Italian Target Stock Purchase
48
Transaction is consummated) 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 the 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 does not have any Indebtedness for Borrowed Money. The
BofA Agent (at any time on or before the BofA Termination Date and, thereafter,
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; BofA Financing
Agreement.
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 to the BofA Agent 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 , any of the Senior Secured Debt
Loan Documents, the BofA Financing Agreement and/or any of the BofA Financing
Documents.
4.1.16 Taxes.
The Borrower and the 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 material 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
49
Liens, and adequate reserves therefor have been established as required under
GAAP. All tax liabilities of the Borrower and the Subsidiaries were as of the
date of the audited financial statements referred to in Section 4.1.11
(Financial Condition), and are now, adequately provided for on the books of the
Borrower and the Subsidiaries, as appropriate. No material tax liability has
been asserted by the Internal Revenue Service or any state or local authority
against the Borrower or any Subsidiary for Taxes in excess of those already
paid.
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 Subsidiary and/or by any commonly controlled entity:
(a) no "accumulated funding deficiency" as defined in Code ss.412 or ERISA
ss.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 ss.4203 from any Multi-employer Plan;
(e) no Borrower, Subsidiary nor any commonly controlled entity has incurred a
"partial withdrawal" within the meaning of ERISA ss.4205 with respect to any
Multi-employer Plan; (f) no Multi-employer Plan to which the Borrower, any
Subsidiary or any commonly controlled entity has an obligation to contribute is
in "reorganization" within the meaning of ERISA ss.4241 nor has notice been
received by the Borrower, any Subsidiary or any commonly controlled entity that
such a Multi-employer Plan will be placed in "reorganization".
4.1.18 Title to Properties.
Each of the Borrower and the 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), subject to any minor
imperfections in title which do not significantly detract from the use thereof.
The Borrower and each Subsidiary have legal, enforceable and uncontested rights
to use freely such property and assets.
4.1.19 Patents, Trademarks, Etc.
Each of the Borrower and the 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).
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) neither the Borrower nor
any Subsidiary nor the Borrower's or any 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
50
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 Subsidiary or for which any claim may
be made against the Borrower or any Subsidiary, 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 Subsidiary or for
which the Borrower or any Subsidiary is, or is claimed to be, responsible,
except for reasonable quantities of necessary supplies for use by the Borrower
and/or the Subsidiaries any of their respective tenants in the ordinary course
of its or their lines of business as permitted by this Agreement and stored,
used and disposed in accordance with applicable Laws; and (b) no property owned,
controlled or operated by the Borrower or any Subsidiary or for which the
Borrower or any Subsidiary has, or is claimed to have, responsibility is
affected by any material Hazardous Materials Contamination at any other
property.
4.1.22 Perfection and Priority of Collateral.
The Collateral Agent, for the benefit of the Agent and the
Lenders, has, or upon execution and recording of the Collateral Agent's 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, 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 Liens in favor of the Collateral Agent and other 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
provided to the Collateral Agent, 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 Collateral
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
51
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 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 Italian Target Stock Purchase Transaction.
The BofA Agent and the Agent have received true and correct
photocopies of the Italian Target Stock Purchase Agreement and each of the other
Italian Target Stock Purchase Documents, executed, delivered and/or furnished on
or before the date of this Agreement in connection with the Italian Target Stock
Purchase Transaction. Neither the Italian Target Stock Purchase Agreement nor
any of the other Italian Target Stock Purchase Documents have been modified,
changed, supplemented, canceled, amended or otherwise altered, except as
otherwise disclosed to the BofA Agent and the Agent in writing. The Italian
Target Stock Purchase Transaction will be effected, closed and consummated
pursuant to, and in accordance with, the terms and conditions of the Italian
Target Stock Purchase Agreement and with all applicable Laws. As of closing and
consummation of the Italian Target Stock Purchase Transaction, each of Capsol
Italy and Ociesse will be a Wholly-Owned Subsidiary of the Italian Holding
Company and the Italian Holding Company will be a Wholly-Owned Subsidiary of the
Borrower.
4.1.27 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, if any, that may be required by such Act, with respect
to the acquisition contemplated by the Italian Target Stock Purchase
Transaction. The waiting periods, if any, under such Act have terminated or
expired.
4.1.28 Term Loans.
The Borrower hereby represents and warrants that neither the
Term Loans nor the obligations of the Borrower and the Subsidiary Guarantors
under and with respect to the Term Loans are in violation of or otherwise
constitute a default under the provisions of the
52
Indenture. In particular, the Term Loans constitute "Senior Indebtedness" under
the provisions of the Indenture.
Section 4.2 Survival
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 the Loans and extensions of
credit made hereunder, and the incurring of any other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
Section 5.1 Conditions to the Making of the Loans.
The making of the initial advance under the Loans is 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, if applicable;
(b) 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 its corporate
charter, bylaws, and all amendments thereto;
(ii) true and complete copies of the resolutions
of its Board of Directors authorizing (A) the execution, delivery and
performance of the Financing Documents and, if the Italian Target Stock
Purchase Transaction is being consummated concurrently, the Italian Target
Stock Purchase Documents to which it is a party, (B) the borrowings
hereunder, (C) the granting of the Liens contemplated by this Agreement
and the Financing Documents to which it is a party and (D) if the Italian
Target Stock Purchase Transaction is being consummated concurrently, the
Italian Target Stock Purchase Transaction;
(iii) the incumbency, authority and signatures of
the officers authorized to sign this Agreement and the other Financing
Documents to which it is a party; and
53
5.1.2 Opinion of Counsel.
The Agent shall have received such favorable opinions of
counsel for the Borrower and the Subsidiary Guarantors addressed to the Agent
and the Lenders, in form and substance satisfactory to the Agent and as
requested by the Agent.
5.1.3 Organizational Documents - Guarantors.
The Agent shall have received for each 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 dated as of the date of this Agreement
by the Secretary or an Assistant Secretary of each Guarantor covering:
(i) 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;
(ii) the incumbency, authority and signatures of
its officers to sign the Guaranty and all other Financing Documents to
which it is a party;
5.1.4 Consents, Licenses, Approvals, Etc.
The BofA Agent and 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, if the Italian Target Stock Purchase Transaction is being consummated
concurrently or prior to the date hereof, the Italian Target Stock Purchase
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, 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.
The Borrower and each Subsidiary Guarantor shall have executed
and delivered the Financing Documents to be executed by it.
54
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 parties thereto other than the Borrower, including, without
limitation the Intercreditor Agreement.
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 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 Collateral Agent for the benefit
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.
5.1.11 Pro-forma Balance Sheet and Projections.
The BofA Agent and the Agent shall have received and approved
the Borrower's Pro-forma Balance Sheet and Pro-forma Financial Projections,
which Pro-forma Balance Sheet and Pro-forma Financial Projections must be in
form and content acceptable to the BofA Agent and the Agent in their sole and
absolute discretion.
5.1.12 Stock Certificates and Stock Powers.
The Collateral Agent shall have received (a) all of the
original stock certificates, if any, of (i) each Subsidiary Guarantor and (ii)
if the Italian Target Stock Purchase Transaction is being consummated
concurrently or prior to the date hereof, the Italian Holding Company and each
Italian Target and (b) fully executed irrevocable stock powers from the holders
of all such stock certificates.
55
ARTICLE VI
COVENANTS OF THE BORROWER
Section 6.1 Affirmative Covenants.
So long as any of the Obligations shall be outstanding hereunder, the
Borrower agrees 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 all Subsidiaries, prepared in accordance with GAAP and examined and
certified (as to consolidated statements) by independent certified public
accountants satisfactory to the Agent, which financial statements shall include
a consolidated and consolidating balance sheet of the Borrower and all
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 all Subsidiaries for such fiscal year, and (ii) a
Compliance Certificate, in substantially the form attached to this Agreement as
EXHIBIT B, 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 furnished to the Collateral Agent (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 5" 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 all 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 all Subsidiaries as of the
close of such period, consolidated and consolidating income, cash flows
56
and changes in shareholders equity statements for such period, and a Compliance
Certificate, in substantially the form attached to this Agreement as EXHIBIT B,
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 all other 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) Annual Budget and Projections. The Borrower shall
furnish to the Agent for distribution to the Lenders 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, 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 all
Subsidiaries.
(f) Amendments to Subordinated Debt Loan Documents;
Senior Secured Debt Loan Documents. The Borrower will furnish to the Agent
copies of each amendment, supplement, restatement or other modification to any
of the Subordinated Debt Loan Documents and/or the Senior Secured 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.
(g) 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.
57
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 Subsidiaries 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
the Subsidiaries to, permit authorized representatives of the Agent and any of
the Lenders to visit and inspect the properties of the Borrower and the
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
the 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 the Subsidiaries, with the officers, directors, employees and other
representatives of the Borrower and the 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
Subsidiary, or from any Governmental Authority, 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 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 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 or from any
Governmental Authority 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.
58
(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 (Capital Structure), 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
(a) on the ability of the Borrower and the Subsidiary Guarantors, taken as a
whole, to perform the Obligations, (b) on the conduct of the operations of the
Borrower and the Subsidiary Guarantors, taken as a whole, (c) on the
consolidated financial condition of the Borrower and the Subsidiaries, taken as
a whole, or (d) on the value of, or the ability of the Agent and the Lenders to
realize upon, any of the Collateral, subject to the terms of the Intercreditor
Agreement.
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 (a) on the ability
of the Borrower and the Subsidiary Guarantors, taken as a whole, to perform the
Obligations, (b) on the conduct of the operations of the Borrower and the
Subsidiary Guarantors, taken as a whole, (c) on the consolidated financial
condition of the Borrower and the Subsidiaries, taken as a whole, or (d) on the
value of, or the ability of the Agent and the Lenders to realize upon, any of
the Collateral, subject to the terms of the Intercreditor Agreement.
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.
59
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 or in a business related
thereto.
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 their 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 them, or arising in any manner out of the businesses carried on by
them. If requested by the Agent, 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
60
be any material liability of the Borrower and/or any of the 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 their Subsidiaries which is materially adverse to the
Borrower and its Subsidiaries taken as a whole; and
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,
Xxxxx UK, NIM Holdings 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 permitted by
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;
61
(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 or the
Financing Documents, 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.
6.1.13 Financial Covenants.
(a) Tangible Capital Funds. The Borrower, Xxxxx UK, NIM
Holdings and 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
---- ------
June 30, 2000 $80,000,000
September 30, 2000 $83,000,000
December 31, 2000 $85,000,000
March 31, 2001 $87,000,000
June 30, 2001 $92,500,000
September 30, 2001 $98,000,000
December 31, 2001 and all $100,000,000
times thereafter
The Agent and the Lenders agree that if the Italian Target Stock Purchase
Transaction is closed and consummated in accordance with the terms of the
Italian Target Stock Purchase Agreement, the required level of Tangible Capital
Funds for each measurement period after closing and consummation of the Italian
Target Stock Purchase Transaction set forth above shall be decreased by Ten
Million Dollars ($10,000,000) effective as of the first measurement period
following the closing and consummation of the Italian Target Stock Purchase
Transaction. In addition, (i) if the amount of actual goodwill attributed to
Poly-Seal at the time of closing and consummation of the Poly-Seal Stock
62
Purchase Transaction exceeds $27,000,000 (the "Excess Poly-Seal Goodwill"), the
required levels of Tangible Capital Funds set forth above shall be reduced by
the amount of such Excess Poly-Seal Goodwill; alternatively, if the amount of
actual goodwill attributed to Poly-Seal at the time of closing and consummation
of the Poly-Seal Stock Purchase Transaction is less than $27,000,000 (the
"Deficiency Poly-Seal Goodwill"), the required levels of Tangible Capital Funds
as set forth above shall be increased by the amount of such Deficiency Poly-Seal
Goodwill and (ii) if the amount of actual goodwill attributed to Capsol Italy
and/or Ociesse at the time of closing and consummation of the Italian Target
Stock Purchase Transaction exceeds $10,000,000 (the "Excess Italian Goodwill"),
the required levels of Tangible Capital Funds set forth above shall be reduced
by the amount of such Excess Italian Goodwill; alternatively, if the amount of
actual goodwill attributed to Capsol Italy and/or Ociesse at the time of closing
and consummation of the Italian Stock Purchase Transaction is less than
$10,000,000 (the "Deficiency Italian Goodwill"), the required levels of Tangible
Capital Funds as set forth above shall be increased by the amount of such
Deficiency Italian Goodwill.
(b) Funded Debt to EBITDA. The Borrower, Xxxxx UK, NIM
Holdings and the Subsidiary Guarantors, on a consolidated basis, will not 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
---- -----
June 30, 2000 4.75 to 1.00
September 30, 2000 4.25 to 1.00
December 31, 2000 4.00 to 1.00
March 31, 2001 3.75 to 1.00
June 30, 2001 3.50 to 1.00
September 30, 2001 3.50 to 1.00
December 31, 2001 3.50 to 1.00
and thereafter
The Agent and the Lenders agree that if the Italian Target Stock Purchase
Transaction is closed and consummated in accordance with the terms of the
Italian Target Stock Purchase Agreement, the required ratio of Funded Debt to
EBITDA for the measurement periods ending June 30, 2000, September 30, 2000, and
December 31, 2000 shall be increased by .25, but only if and to the extent each
such measurement period ends after closing and consummation of the Italian
Target Stock Purchase Transaction.
(c) Interest Coverage Ratio. The Borrower, Xxxxx UK, NIM
Holdings and the Subsidiary Guarantors will maintain, on a consolidated basis
and tested as of the last day of each fiscal quarter in each fiscal year, on a
rolling four (4) quarter basis, an Interest Coverage Ratio of not less than the
following amounts as of the following dates:
63
Date Ratio
---- -----
June 30, 2000 2.00 to 1.00
September 30, 2000 2.00 to 1.00
December 31, 2000 2.00 to 1.00
March 31, 2001 2.25 to 1.00
June 30, 2001 2.25 to 1.00
September 30, 2001 2.25 to 1.00
December 31, 2001 2.50 to 1.00
and thereafter
(d) Fixed Charge Coverage Ratio. The Borrower, Xxxxx UK,
NIM Holdings and the Subsidiary Guarantors 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 1.00 to 1.00.
(e) Debt Service Coverage Ratio. The Borrower, Xxxxx UK,
NIM Holdings and the Subsidiary Guarantors will maintain, on a consolidated
basis and tested as of the last day of each fiscal quarter in each fiscal year,
on a rolling four (4) quarter basis, ending on that date, a Debt Service
Coverage Ratio of not less than 1.50 to 1.0.
6.1.14 Insurance With Respect to Equipment and Inventory.
The Borrower will (a) maintain and cause each of their the
Subsidiaries to maintain hazard insurance with fire and extended coverage and
naming the Collateral Agent as an additional insured with loss payable to the
Collateral Agent as its respective interest may appear on the Equipment and
Inventory that constitutes Collateral in an amount at least equal to the fair
market value of such 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 Collateral
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 Collateral 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 Collateral 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.
6.1.15 Maintenance of the Collateral.
Except as permitted by Section 6.2.1 (Capital Structure), 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.
6.1.16 Defense of Title and Further Assurances.
At its expense, the Borrower will defend the title to the
Collateral (and any part thereof), and, subject to the terms of this Agreement,
will immediately execute, acknowledge and deliver and, cause each Subsidiary
Guarantor which owns Collateral to
64
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 Collateral 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 second priority of that Lien,
subject only to first priority Lien securing the BofA Obligations and to the
other Permitted Liens. The Borrower will from time to time do, and, the Borrower
will cause each of the Subsidiary Guarantors which owns Collateral to do,
whatever the Collateral 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, the Borrower will cause each of
the Subsidiary Guarantors which owns Collateral to take, any and all steps and
observe such formalities as the Collateral Agent may require, in order to create
and maintain a valid Lien upon, pledge of, or security interest in (subject only
to Permitted Liens), the Collateral, 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
Collateral Agent. The Borrower shall pay to the Collateral Agent on demand all
taxes, costs and expenses incurred by the Collateral 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 Collateral 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 Collateral Agent and as may be necessary to evidence and/or
perfect the security interest of the Collateral Agent, for the benefit of the
Agent, the BofA Lenders, the Lenders and the BofA 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
Collateral Agent as its attorney-in-fact, with power of substitution, in the
name of the Collateral Agent, or in the name of the Borrower or otherwise, for
the use and benefit of the BofA Agent, the BofA Lenders, the Agent 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 Collateral the Agent may require
pursuant to the foregoing provisions of this Section 6.1.16.
6.1.17 Business Names; Locations.
The Borrower will notify and the Borrower will cause each of
the Subsidiary Guarantors which owns Collateral to notify the Collateral 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 Borrower or the
applicable 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
65
Collateral Agent not being perfected unless action is taken by the Collateral
Agent and/or any other Person to continue, extend or effect the perfection of
such Lien.
6.1.18 Subsequent Opinion of Counsel as to Recording
Requirements.
In the event that the Borrower or any Subsidiary Guarantor
which owns Collateral shall transfer its principal place of business or the
office where it keeps its records pertaining to the Collateral, upon the
Collateral Agent's reasonable request the Borrower will provide to the
Collateral 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 Collateral
Agent, for the benefit of the BofA Agent, the BofA Lenders, the Agent and the
Lenders, in the Collateral, as appropriate.
6.1.19 Use of Premises and Equipment.
The Borrower agrees that until the Obligations are fully paid,
subject to the terms of the Intercreditor Agreement, the Collateral Agent after
and during the continuance of a Default or an Event of Default, (a) may use all
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 their owned or, subject to the terms of any
applicable lease, leased property.
6.1.20 Protection of Collateral.
The Borrower agrees that, subject to the terms of the
Intercreditor Agreement, the Collateral Agent may at any time following an Event
of Default take such steps as the Collateral Agent deems reasonably necessary to
protect the interest of the Collateral Agent in, and to preserve the Collateral,
including, the hiring of such security guards or the placing of other security
protection measures as the Collateral Agent deems appropriate, may employ and
maintain at their premises a custodian who shall have full authority to do all
acts necessary to protect the interests of the Collateral Agent in the
Collateral. The Borrower agrees to cooperate fully with the Collateral Agent's
efforts to preserve the Collateral and will take such actions to preserve the
Collateral as the Collateral Agent may reasonably direct. All of the Collateral
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.
6.1.21 Application of Net Casualty Proceeds.
The Borrower agrees that Net Casualty Proceeds with respect to
any Assets of the Borrower must be applied to either (a) the payment of the
Obligations after payment of the BofA Obligations or (b) the repair, replacement
and/or restoration of the Assets affected, and without the prior written consent
of the Collateral Agent for no other purpose. If the BofA Obligations have been
paid in full and all "Commitments" and "Letters of Credit" under the BofA
Financing Agreement have been terminated, the Collateral 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.
66
Section 6.2 Negative Covenants.
So long as any of the Obligations 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 (Purchase or Redemption of Securities), neither the Borrower, Xxxxx UK nor
NIM Holdings will alter or amend, nor will the Borrower permit any Subsidiary
Guarantor to alter or amend, its equity 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;
provided however that, except following the occurrence and during the
continuation 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, (ii) among and between Xxxxx UK and
NIM Holdings, (iii) among and between the Italian Holding Company, Capsol Italy
and Ociesse, and (iv) among and between any Subsidiaries of the Borrower other
than Subsidiary Guarantors, Xxxxx UK and/or NIM Holdings; provided, that after
closing and consummation of any such merger or consolidation involving the
Borrower or any Subsidiary Guarantor (A) the Borrower is the surviving entity if
the Borrower is a party to such merger or consolidation, (B) Collateral Agent
for the benefit of the Agent and the Lenders retains a second 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 to the
Liens of the Collateral Agent on 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 to Liens of the Collateral Agent, and (C) 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 (Subsidiaries);
(d) investments as and to the extent permitted by the
provisions of Section 6.2.5 (Investments, Loans and Other Transactions),
including, without limitation, the issuance of equity (including of a new class)
by any Subsidiary to the Borrower or another Subsidiary;
(e) the use and disposition of Net Casualty Proceeds,
but only as and to the extent permitted by the provisions of Section 6.1.21
(Application of Net Casualty Proceeds);
67
(f) with respect to each Subsidiary Guarantor which is
incorporated in a jurisdiction other than the State of Delaware, the formation
of a corporation under the laws of the State of Delaware (each referred to
herein as "Delaware NewCo") and the merger of such Subsidiary Guarantor into
such Delaware NewCo; provided that (i) the Delaware NewCo, as the surviving
corporation (1) shall be a Wholly-Owned Subsidiary of the Borrower, (2) shall
have the same name as its predecessor Subsidiary Guarantor, (3)shall be the
successor to such Subsidiary Guarantor in all respects, (4) shall have assumed
all liabilities and obligations of its predecessor Subsidiary Guarantor,
including, without limitation, the Obligations, (5) shall, at the time of
merger, have no assets or liabilities other than those of its predecessor
Subsidiary Guarantor, (6) shall be considered a Subsidiary Guarantor, and (7)
shall execute and deliver to the Agent any and all agreements, documents and
instruments as may be reasonably requested by the Agent confirming its
obligations and liabilities to the Agent and the Lenders, (ii) the formation of
Delaware NewCo and the merger of a Subsidiary Guarantor into Delaware NewCo
shall not have any material adverse effect on the Agent or the Lenders or the
obligations and liabilities of the Subsidiary Guarantor, as reasonably
determined by the Agent, and (iii) the Borrower shall furnish or cause to be
furnished to the Agent such due diligence items with respect to the Delaware
NewCo and its merger with a Subsidiary Guarantor as may be reasonably requested
by the Agent.
6.2.2 Subsidiaries.
The Borrower will not create or acquire, or permit any
Subsidiary to create or acquire, any Subsidiaries other than (a) the
Subsidiaries identified on the Collateral Disclosure List, as provided to the
Collateral Agent and (b) the creation or acquisition of Subsidiary Guarantors,
including, without limitation, each Delaware NewCo; provided that no assets or
properties may be transferred to any Subsidiary unless such Subsidiary
constitutes a Subsidiary Guarantor. 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) except as expressly otherwise
provided herein, grant to the Collateral Agent, for the benefit of the BofA
Agent and the BofA Lenders, a first priority Lien on all Assets and property of
such Subsidiary and grant to the Collateral Agent, for the benefit of the Agent
and the Lenders, a second 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
Collateral Agent, and (iv) be a domestic Subsidiary (organized and existing
under the laws of a state in the United States) or, if acceptable to the BofA
Agent (at all times prior to the BofA Termination Date and thereafter, the
Agent) in its sole and absolute discretion, a foreign Subsidiary. The Borrower
understands and agrees that the BofA Agent or the Agent, as the case may be, may
condition its consent to the formation of a foreign Subsidiary on such terms,
conditions, and restrictions as the BofA Agent or the Agent, as the case may be,
may determine in its discretion. In addition, the Agent and the Lenders hereby
consent to the acquisition of the Italian Holding Company, Capsol Italy and
Ociesse; provided that (i) if and to the extent permitted by applicable Italian
law, the Collateral Agent for the benefit of the BofA Agent and the BofA Lenders
is granted a first priority Lien on and assignment and the Collateral Agent for
the benefit of the Agent and the Lenders is granted a second priority Lien on
and assignment of one hundred percent (100%) of the shares of the
68
Italian Holding Company and each of Capsol Italy and Ociesse and (ii) if and to
the extent permitted by applicable Italian laws, the Italian Holding Company and
each of Capsol Italy and Ociesse unconditionally and irrevocably and jointly and
severally guaranty payment and performance of all of the BofA Obligations and
the Obligations.
6.2.3 Purchase or Redemption of Securities, Dividend
Restrictions.
The Borrower will not (a) 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,
(b) declare or pay any Distributions (other than stock dividends) or set aside
any funds therefor, or (c) 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 by the Borrower 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) Distributions to the Borrower or to any Subsidiary Guarantor
from its Subsidiaries.
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 and the BofA Obligations (subject to
the limitations contained in the Intercreditor Agreement);
(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, Two Hundred Million Dollars ($200,000,000), and
provided further that no portion of the Subordinated Indebtedness previously
advanced and then repaid may be reborrowed without the prior written consent of
the BofA Agent (at any time on or before the BofA Termination Date and,
thereafter, the Agent);
69
(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 (i) secured Interest Rate/Currency Protection Agreements between the
Borrower, Xxxxx UK, NIM Holdings or a Subsidiary Guarantor and Bank of America
and/or (ii) unsecured Interest Rate Protection/Currency Agreements between the
Borrower, Xxxxx UK, NIM Holdings 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, NIM Holdings, Xxxxx UK 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, NIM Holdings, Xxxxx UK 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 other property similarly financed from the same financing source, 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 One Million Dollars ($1,000,000);
(h) Capital Leases;
(i) Indebtedness for Borrowed Money of the Borrower to
any Subsidiary Guarantor or of any Subsidiary Guarantor to the Borrower or any
other Subsidiary Guarantor and Indebtedness for Borrowed Money of Xxxxx UK, NIM
Holdings, Norwich, the Italian Holding Company, Capsol Italy and/or Ociesse to
the Borrower or any other domestic Subsidiary Guarantor (the "Foreign
Intercompany Indebtedness"), provided that the aggregate amount of such Foreign
Intercompany Indebtedness (excluding intercompany allocations of expenses and
charges), together with any investment by the Borrower and/or any domestic
Subsidiary Guarantor in Xxxxx UK, NIM Holdings, Norwich, the Italian Holding
Company, Capsol Italy and/or Ociesse permitted by the terms of this Agreement,
shall not exceed, in the aggregate, Four Million Dollars ($4,000,000) and
provided further that any such Foreign Intercompany Indebtedness shall be
permitted with the Italian Holding Company, Capsol Italy and Ociesse only if the
Italian Target Stock Purchase Transaction is closed and consummated.
Notwithstanding the foregoing, upon closing and consummation of the Italian
Target Stock Purchase Transaction, the $4,000,000 limitation on Foreign
Intercompany Indebtedness shall be increased to Twenty-two Million Dollars
($22,000,000) if and to the extent the Borrower makes loans and advances to the
Italian Holding Company to finance the Italian Target Stock Purchase
Transaction.
(j) Indebtedness for Borrowed Money as set forth on
Schedule 4.1.14;
70
(k) Other unsecured Indebtedness for Borrowed Money in
aggregate principal amount not to exceed at any time One Million Dollars
($1,000,000);
(l) Indebtedness permitted under the provisions of
Section 6.2.5 (Investments, Loans and Other Transactions), and
(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 (i) 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, (ii) 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, (iii) the terms of the Refinancing
Indebtedness are not materially more restrictive or limiting on the Borrower,
Xxxxx UK, NIM Holdings 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 BofA Agent (at
any time on or before the BofA Termination Date and, thereafter, the Agent) in
its reasonable discretion, and (iv) 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 (1) 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 (2) 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
71
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 Collateral Agent, are pledged to the
Collateral Agent, for the benefit of the BofA Agent, the BofA Lenders, the Agent
and the Lenders, as appropriate, as collateral and security for the BofA
Obligations and 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 (including purchases of equity securities) in any such Subsidiary
Guarantor, (vii) the Borrower's acquisition, creation and ownership of NIM
Holdings and the Italian Holding Company and any existing or additional capital
contributions in Xxxxx UK, NIM Holdings, the Italian Holding Company, Capsol and
Ociesse; provided that the aggregate amount of any such existing or additional
capital contributions, together with any Foreign Intercompany Indebtedness
(excluding intercompany allocations of expenses and charges) permitted by the
terms of this Agreement, may not exceed at any time in the aggregate Four
Million Dollars ($4,000,000) (which amount, upon closing and consummation of the
Italian Target Stock Purchase Transaction shall be increased to Twenty-two
Million Dollars ($22,000,000) if and to the extent the Borrower makes loans and
advances to the Italian Holding Company to finance the Italian Target Stock
Purchase Transaction, (viii) 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 Collateral 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 Collateral Agent to grant to the Collateral
Agent for the benefit of the BofA Agent, the BofA Lenders, the Agent and the
Lenders, as appropriate, 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), (ix) investments permitted by Section 6.2.1
(Capital Structure), (x) Indebtedness for Borrowed Money permitted by Section
6.2.4(i), and (xi) the receipt of securities in connection with the settlement
of claims against any customer, supplier or vendor or as a result of the
bankruptcy of any such customer, supplier or vendor; provided that the
Collateral Agent shall be granted a perfected first priority Lien on any such
securities with respect to the BofA obligations and a second priority Lien with
respect to the Obligations, except that at all times after the BofA Termination
Date, the Lien securing the Obligations shall be a first priority Lien, (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 (i) any Indebtedness for Borrowed Money of the
Borrower, any Subsidiary Guarantor, Xxxxx UK, NIM Holdings, the Italian Holding
Company, Capsol Italy or Ociesse otherwise permitted by the provisions of
Section 6.2.4 (Indebtedness), (ii) the endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business, (iii) the obligations of the Borrower under the Subordinated Debt and
the Senior Secured Debt, (iv) the Obligations and (v) the BofA Obligations, or
(c) make any loans or advances, or otherwise extend credit to any Person, except
(i) any advance to an officer or employee of the Borrower or any Subsidiary for
travel or other
72
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), (ii) trade credit extended to customers in
the ordinary course of business, (iii) ordinary course advances to customers in
connection with the production of molds and related materials, and (iv) 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, permitted reinvestments of
Permitted Asset Dispositions and Capital Expenditures made for the acquisition
or construction of Fixed or Capital Assets that are contemplated to be sold in
connection with a sale-leaseback transaction referred to in clause (A) of the
last sentence of Section 6.2.16, the Borrower will not and will not permit any
Subsidiary to, directly or indirectly, make any Capital Expenditures in the
aggregate for the Borrower, Xxxxx UK, NIM Holdings and their respective
Subsidiaries (taken as a whole) in amount which exceed Thirty-six Million
Dollars ($36,000,000) (the "Capital Expenditure Ceiling") during any fiscal
year. If in any given fiscal year, the total Capital Expenditures of the
Borrower, Xxxxx UK, NIM Holdings and its or their 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 Section 6.2.1 (Capital Structure) or Section 6.2.6
(Capital Expenditures)) 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 or agreements 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
73
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 BofA Obligations and the Obligations with the Liens securing
the BofA Obligations to be at all times and in all respects senior to the 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
and the BofA Obligations, or permit any Subsidiary so to do, except for (i)
statutory landlord's Liens with respect to which the Collateral 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" (as
defined in the BofA Financing Agreement), 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 BofA Agent has established a reserve
against the "Borrowing Base" (as defined in the BofA Financing Agreement) in an
amount to be determined by the BofA 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 than would be obtained in an arms-length, third party transaction.
The foregoing provision shall not restrict (a) 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, (b) transactions between or among the Borrower and/or the Subsidiary
Guarantors, (c) 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 BofA Agent's prior written consent (at any time on or before the BofA
Termination Date and, thereafter, the Agent) (solely for purposes of this
Section 6.2.10) between the Borrower and First Atlantic, (d) the payment of
Distributions permitted by Section 6.2.3 (Purchase or Redemption of Securities),
(e) any transaction fee payable to First Atlantic not to exceed $1,250,000 per
transaction and (f) intercompany investments and loans between and among the
Borrower, Xxxxx UK, NIM Holdings, the Italian Holding Company, Capsol Italy and
Ociesse as and to the extent permitted by the provisions of this Agreement.
74
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 Multi-employer Plan;
or (e) incur a complete or partial withdrawal with respect to any Multi-employer
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 or any of the Senior Secured Debt Loan
Documents, other than in the normal course of business unless otherwise agreed
by the BofA Agent in accordance with the terms of the BofA Financing Agreement
at any time on or before the BofA Termination Date and, thereafter unless
otherwise agreed by the Agent.
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), 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;
and
(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 (a) for
transfers among the Borrower and the Subsidiary Guarantors, if and to the extent
the priority of the Liens of the Collateral Agent (subject to Permitted Liens)
would be unaffected by any such transfers, (b) transfers of Inventory in the
ordinary course of business to bailees, warehousemen, consignees or similar
third parties if and to the extent that either (i)
75
such bailees, warehousemen, consignees or similar third parties have entered
into an agreement with the Collateral Agent in which such bailees, warehousemen,
consignees or similar third parties consent and agree to the superior Liens of
the Collateral Agent on such Inventory and to such other terms and conditions as
may be reasonably required by the Collateral Agent or (ii) the BofA 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 Domestic Inventory" (as defined in the BofA Financing
Agreement), which reserves the BofA Agent shall establish upon the Borrower's
request, (d) temporary transfers of Equipment offsite for repairs; provided that
such Equipment is promptly upon repair returned to a location in which the
Collateral Agent has perfected its Liens (subject only to Permitted Liens), and
(e) usual and customary transfers of mobile Equipment (such as laptop computers)
by employees of the Borrower and/or a Subsidiary Guarantor in the ordinary
course of their employment.
6.2.16 Sale and Leaseback.
Neither 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
clause (k) of the definition of Permitted Asset Disposition. Notwithstanding the
foregoing, the Borrower and its Subsidiaries shall be permitted to enter into
one or more such sale-leaseback transactions involving Fixed or Capital Assets,
including, without limitation the property described in clause (k) of the
definition of Permitted Asset Dispositions; provided that in each case, either
(A) in the case of the real property, improvements and fixtures subject to the
lien of the Deed of Trust - Evansville as more particularly described on
Schedule 1.1B - Evansville Sale Leaseback attached to and made a part of the
BofA Financing Agreement (i) such transaction is consummated prior to the date
120 days following the date the Borrower or the applicable Subsidiary has
acquired and/or completed construction of all the assets to which such
transaction relates, (ii) the aggregate cost of the assets (other than the
property described in such clause (k)) sold in all transactions covered by this
clause (A) does not exceed $7,000,000, and (iii) such transaction shall be
reasonably satisfactory to the BofA Agent (at any time on or before the BofA
Termination Date and, thereafter, the Agent) or (B) such transaction complies
with the provisions of clause (g) of the definition of Permitted Asset
Disposition.
ARTICLE VII
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 to
be paid by them under the terms of this Agreement 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;
76
7.1.2 Breach of Representations and Warranties.
Any representation or warranty made by or on behalf of the
Borrower or any Subsidiary Guarantor 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
the Borrower to cause any Subsidiary Guarantor to perform, observe or comply, as
appropriate, with any covenant, condition or agreement contained in Section
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 6.1.14
(Insurance with Respect to Equipment), Section 6.1.16 (Defense of Title and
Further Assurances), Section 6.1.17 (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
the Borrower 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 (Failure to Pay), Section
7.1.2 (Breach of Representations and Warranties) or Section 7.1.3 (Failure to
Comply with Certain Covenants), 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 BofA Agent, any of the BofA Lenders, 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
VII, 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, Xxxxx UK, NIM Holdings 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 under any applicable Laws,
(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
77
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 under any applicable Laws, 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 its or their respective assets.
7.1.7 Involuntary Bankruptcy, etc.
(a) An order for relief shall be entered in any involuntary
case brought against the Borrower, Xxxxx UK, NIM Holdings or any Guarantor under
the Bankruptcy Code or comparable Law, or (b) any such case shall be commenced
against the Borrower, Xxxxx UK, NIM Holdings 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, Xxxxx UK,
NIM Holdings or any Guarantor (i) adjudicating the Borrower, Xxxxx UK, NIM
Holdings or any Guarantor bankrupt or insolvent, or (ii) appointing a receiver,
trustee or liquidator of the Borrower, of Xxxxx UK, of NIM Holdings or of any
Guarantor, or of a material portion of its or their assets, or (iii) enjoining,
prohibiting or otherwise limiting the operation of all or substantially all of
its or their business or the use or disposition of all or substantially all of
its or their 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
BofA Agent (at any time on or before the BofA Termination Date and, thereafter,
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,
Xxxxx UK, NIM Holdings and/or any or all of the Guarantors, and the failure by
the Borrower, Xxxxx UK, NIM Holdings 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.
78
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,
Xxxxx UK, NIM Holdings 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, Xxxxx UK, NIM Holdings 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 second 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 Collateral Agent
or 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, Xxxxx UK, NIM Holdings and the Subsidiary Guarantors,
taken as a whole.
7.1.13 Change in Ownership.
(a) 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 NIM Holdings and each Subsidiary
Guarantor (except pursuant to any transaction permitted by Section 6.2.1
(Capital Structure) or Section 6.2.2 (Subsidiaries)), (b) NIM Holdings 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
Xxxxx UK, (C) 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 (c) 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, Xxxxx UK, NIM Holdings or any Guarantor shall
liquidate, dissolve or terminate its existence, except as otherwise expressly
permitted by the provisions of Section 6.2 (Negative Covenants).
79
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.
7.1.16 Failure to Pay Senior Secured Debt - Parent.
The failure of the Parent to make any scheduled interest
payment on account of the Senior Secured Debt - Parent as and when such payment
is due and payable, regardless of any applicable notice, grace or cure period.
Section 7.2 Remedies.
Upon the occurrence of any Event of Default and subject to the terms and
conditions of the Intercreditor Agreement, the Agent, may, in the exercise of
its sole and absolute discretion from time to time, and shall, at the direction
of the Requisite Term Loan 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 Uniform Commercial Code.
Subject to the terms and conditions of the Intercreditor
Agreement, the Collateral 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 Collateral Agent, the Borrower shall assemble the
Collateral and make it available to the Collateral Agent at a place designated
by the Collateral Agent. The Collateral 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 Collateral 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 (Notices), or such other address of the Borrower which may from time
to time be shown on the Collateral 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 Collateral 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
80
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 Collateral 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 Collateral
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 Collateral 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
Collateral 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 Collateral Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral consisting of securities so
sold.
7.2.3 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, but subject
to the terms and conditions of the Intercreditor Agreement, the Collateral 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 Collateral Agent, as its attorney-in-fact, with power of
substitution, in the name of the Collateral Agent, 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 Collateral Agent, the Agent and the Lenders, but at the cost and
expense of the Borrower, as and to the extent permitted by the provisions of
this Agreement:
(a) request any Account Debtor obligated on any of the
Accounts to make payments thereon directly to the Collateral Agent, with the
Collateral 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 Collateral Agent, the Agent or any
of 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;
81
(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 or comparable Laws 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 Collateral 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.
7.2.4 Application of Proceeds.
Unless otherwise required by applicable Laws and subject to
the terms and conditions of the Intercreditor Agreement, any proceeds of sale or
other disposition of the Collateral received by the Collateral Agent will be
applied by the Collateral Agent first to the payment of any and all BofA
Obligations then outstanding, second to the Agent's Obligations, third to any
and all Enforcement Costs, and any balance of such proceeds will be remitted to
the Lenders, in like funds received ratably in accordance with their respective
Pro Rata Shares of such balance. Each Lender shall apply any such proceeds
received from the Collateral Agent or 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.
7.2.5 Performance by Collateral 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 Collateral 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
82
such action thereon as the Collateral Agent may consider necessary or
appropriate for such purpose and the Borrower hereby irrevocably appoints the
Collateral 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 Collateral
Agent, 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 Collateral Agent, but
at the cost and expense of the Borrower and without notice to the Borrower. All
sums so paid or advanced by the Collateral 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 Collateral Agent on
demand, and shall constitute and become a part of the Agent's Obligations.
7.2.6 Other Remedies.
Subject to the terms and conditions of the Intercreditor
Agreement, 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. If the BofA
Obligations have been paid in full and all "Commitments" and "Letters of Credit"
under the BofA Financing Agreement have been terminated or have expired, the
Agent and each of the Lenders are authorized to offset and apply to all or any
part of the Obligations (but subject to the provisions of Section 7.2.4
(Application of Proceeds) 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 VIII
THE AGENT
Section 8.1 Appointment.
Each Lender hereby designates and appoints GE Capital 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 VIII. The provisions
of this ARTICLE VIII 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 Section 8.7.1 (Resignation), Section 8.8
(Collateral Matters), Section 8.11 (Consents) and Section 8.12 (Circumstances
Where All Lenders Required). 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
83
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;
(g) To amend, modify, or waive any provisions of this
Agreement or the other Financing Documents on behalf of the Lenders subject to
the
84
requirements that all or certain of the Lenders' consent be obtained in certain
instances as provided in Section 8.12 (Circumstances All Lenders Required) and
Section 9.2 (Amendments; Waivers);
(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 Collateral Agent, the Agent and the Lenders; and
(k) To take such other actions as may be requested by
the Requisite Lenders.
The Collateral Agent is hereby expressly and irrevocably authorized by the
Agent and each of the Lenders, as agent on behalf of the Collateral Agent, the
Agent and the Lenders to execute any of the Security Documents and any other
documents on behalf of the Agent and the Lenders, as the secured party for the
benefit of the Collateral Agent, the BofA Lenders, the Agent and the 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
85
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 GE Capital Individually.
With respect to its Commitment and the Loans made by it, and the Note
issued to it, GE Capital shall have and may exercise the same rights and powers
hereunder and is subject to the
86
same obligations and liabilities as and to the extent set forth herein for any
other Lender. The terms "the Lenders", "Requisite Lenders" or "Requisite Term
Loan Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include GE Capital in its individual capacity as a Lender, one of the
Requisite Lenders or one of the Requisite Term Loan Lenders. GE Capital 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 GE Capital 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
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 (Appointment of Successor) or as otherwise provided below.
8.7.2 Appointment of Successor.
Upon any such notice of resignation pursuant to Section 8.7.1
(Resignation), the Requisite Term Loan Lenders, with the consent of GE Capital
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
Term Loan 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 VIII 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.
87
Section 8.8 Collateral Matters.
8.8.1 Release of Collateral.
The Agent and the Lenders, as appropriate, hereby irrevocably
authorize the Collateral Agent, at its option and in its discretion, to release
any Lien granted to or held by the Collateral Agent upon any property covered by
this Agreement or the Financing Documents:
(a) upon termination of the Commitments and this
Agreement and payment and satisfaction of all Obligations (other than contingent
indemnification and expense reimbursement obligations for which no claim has
been made);
(b) constituting property being sold or disposed of if
the Borrower certifies to the Collateral Agent that the sale or disposition is
made in compliance with the provisions of this Agreement and the Collateral
Agent and the Agent may rely in good faith conclusively on any such certificate,
without further inquiry);
(c) 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
(d) constituting property covered by Permitted Liens
with lien priority superior to those Liens in favor or for the benefit of the
Collateral Agent.
In addition during any fiscal year of the Borrower on or
before the BofA Termination Date (x) the Collateral Agent may release Collateral
having a book value of not more than 5% of the book value of all Collateral, (y)
the Collateral Agent, with the consent of the Requisite Lenders, may release
Collateral having a book value of not more than 25% of the book value of all
Collateral or (z)(1) the Collateral Agent, with the consent of the BofA Lenders
and the Lenders holding, in the aggregate, at least 90% of (i) the BofA
Commitments and (ii) the Term Loans or, (2) the Collateral Agent, with the
consent of all of the BofA Lenders (excluding any BofA Lender which is also a GE
Lender) may release its Lien on all or substantially all of the Collateral (and
in connection therewith may release, terminate and discharge any Financing
Document relating to such Collateral and/or the obligations and liabilities of
any Guarantor in connection with a sale of the Borrower and/or any Guarantor
and/or a sale of all or substantially all of its or their assets); provided that
either:
(i) the Collateral Agent has obtained a third-party
appraisal or valuation (which may be a fairness valuation) of all of the
Collateral or of only the Collateral being released, has furnished a copy
of such appraisal or valuation to the Agent and has determined in good
faith that (A) in the case of an appraisal or valuation of all of the
Collateral, the orderly or forced sale liquidation value (as applicable or
whichever is appropriate as determined by the Collateral Agent in good
faith), of such Collateral based on such appraisal or valuation (after
deducting the actual and anticipated costs and expenses of liquidation) is
or would be insufficient to allow for payment of the BofA Obligations in
full and/or to result in any surplus payment which would or could be
available for payment of
88
the Obligations, or (B) in the case of an appraisal or valuation of less
than all of the Collateral, the Collateral being released is sold for an
amount at least equal to the value established by such third party
appraisal or valuation; or:
(ii) the Collateral is sold or to be sold by or on
behalf of the Borrower, any Subsidiary Guarantor and/or the Collateral
Agent at a commercially reasonable, public auction or an "auction style"
private sale arranged or brokered by a third party (such as an investment
banker); and provided further that such release is not pursuant to, or
required in connection with, debtor-in-possession financing.
Notwithstanding the foregoing, at any time on or before the BofA
Termination Date and pursuant to or in connection with any debtor-in-possession
financing provided to the Borrower and/or any or all of the Subsidiary
Guarantors, the Collateral Agent, subject to the terms of the Intercreditor
Agreement, may release or subordinate its Lien on all or substantially all of
the Collateral (and in connection therewith release, terminate or discharge any
Financing Document relating to such Collateral and/or the obligations and
liabilities of any Guarantor).
During any fiscal year of the Borrower at any time after the BofA
Termination Date (x) the Agent, in its capacity as Collateral Agent, may release
Collateral having a book value of not more than 5% of the book value of all
Collateral, (y) the Agent, in its capacity as Collateral Agent, with the consent
of the Requisite Term Loan Lenders, may release Collateral having a book value
of not more than 25% of the book value of all Collateral, and (z) the Agent, in
its capacity as Collateral Agent and with the consent of the Lenders having 90%
of the Loans, may release all the Collateral.
8.8.2 Confirmation of Authority, Execution of Releases.
Without in any manner limiting the Collateral Agent's
authority to act without any specific or further authorization or consent by the
Lenders as set forth in Section 8.8.1 (Release of Collateral), the Agent and
each Lender agrees to confirm in writing the authority to release any property
covered by this Agreement or the Financing Documents conferred upon the
Collateral Agent under Section 8.8.1 (Release of Collateral). So long as no
Event of Default is then continuing, upon receipt by the Collateral Agent of
confirmation from the requisite percentage, if any, of the Lenders and/or the
BofA Lenders, as the case may be, of its authority to release any particular
item or types of property covered by this Agreement or the Financing Documents,
the Collateral 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 Collateral Agent for the benefit of the Agent and Lenders
herein or pursuant hereto upon such Collateral; provided, however, that (a) the
Collateral Agent shall not be required to execute any such document on terms
which, in the Collateral Agent's opinion, would expose the Collateral Agent to
liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (b) 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.
89
8.8.3 Absence of Duty.
Neither the Collateral Agent nor the Agent shall have any
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 Collateral
Agent for the benefit of the Agent and 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 Collateral 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 Collateral Agent may act in any manner it
may deem appropriate, in its discretion, given the Collateral Agent's own
interest in property covered by this Agreement or the Financing Documents and
that the Collateral Agent shall have no duty or liability whatsoever to the
Agent or any of the other the Lenders.
Section 8.9 Agency for Perfection; Appointment and Replacement of
Collateral Agent.
The Agent and each Lender hereby appoints the Collateral Agent as agent
for the purpose of perfecting the Liens of the Agent and the Lenders 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 obtain possession of any such Collateral, such Lender shall
notify the Collateral Agent thereof, and, promptly upon the Collateral Agent's
request therefor, shall deliver such Collateral to the Collateral Agent or in
accordance with the Collateral Agent's instructions. At any time on or after the
BofA Termination Date, upon the request of the Agent, the BofA Agent agrees to
resign as Collateral Agent and effective with such resignation the Lenders
hereby appoint the Agent as the Collateral Agent. In such case the Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the Collateral Agent, and the BofA Agent shall be discharged from
its duties and obligations under this Agreement and the Financing Documents.
Section 8.10 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, it being understood
and agreed that such rights and remedies may be exercised only by the Agent. In
addition, the Agent and each Lender agree that the exercise of any and all
rights hereunder or under any of the Financing Documents is subject to the terms
and conditions of the Intercreditor Agreement.
Section 8.11 Consents.
(a) In the event the Collateral Agent or 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 consideration of the request requires
additional time, in each case, within ten
90
(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 the Agent or the Borrower,
may, at their option, require such Lender to assign its interest in the Loans to
GE Capital 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 the Agent or the
Borrower elects to require any Lender to assign its interest to GE Capital or
such other lender as shall be acceptable to the Borrower and the Agent, the
Agent will so notify such Lender in writing within thirty (30) days following
such Lender's denial, and such Lender will assign its interest to GE Capital 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 8.12 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:
(a) increase the principal amount of any of the Term
Loans;
(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" or "Requisite Term Loan Lenders"; and
(g) release any material portion of any Collateral, any
Guarantor or any Financing Document (except to the extent provided in Section
8.8 of this Agreement or elsewhere in this Agreement or in any such Financing
Agreement);
91
Section 8.13 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 8.14 Consents, Amendments and Waivers on or before BofA
Termination Date.
The Agent, the Lenders and the Borrower understand and agree that the
representations, warranties, covenants, agreements and Events of Default as set
forth in this Agreement and in the Financing Documents are intended to be
substantially similar to the representations, warranties, covenants, agreements
and Events of Default contained in the BofA Financing Agreement and the BofA
Financing Documents. The Agent, the Lenders and the Borrower acknowledge and
agree that to the extent any determination, consent, amendment or waiver with
respect to any terms or conditions of the BofA Financing Agreement is given,
obtained or approved in accordance with the provisions of the BofA Financing
Agreement, such determination, consent, amendment or waiver shall be considered
binding upon the Agent, the Lenders and the Borrower for purposes of this
Agreement and the Financing Documents and shall be deemed made, obtained or
given, as appropriate, by the Agent, the Lenders and/or the Borrower with
respect to the similar or substantially similar term, condition or event
contained in or relating to this Agreement and/or in any of the Financing
Documents; provided that the definition of "Requisite Lenders" contained in the
BofA Financing Agreement has been amended to include the Lenders and the BofA
Lenders as a combined voting group, as set forth in the definition of "Requisite
Lenders" in this Agreement, such that any consent, determination, amendment or
waiver requiring the consent of the BofA Requisite Lenders would take into
account the votes of the Lenders as part of the larger group including the
Lenders and the BofA Lenders. Notwithstanding the foregoing, under no
circumstances shall the Agent or the Lenders be deemed to have consented or
approved any matter requiring the consent of all Lenders set forth in Section
8.12 or the consent of the Agent as set forth in Section 9.2 regardless if such
matter has received the consent or approval of the BofA Agent and/or all or any
portion of the BofA Lenders.
ARTICLE IX
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:
92
Borrower: XXXXX PLASTICS CORPORATION
000 Xxxxxx Xxxxxx
X.X. Xxx 000
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attention: President
with a copy to: Xxxxxxx X. X'Xxxxx, Esquire
X'Xxxxxxxx, Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to: Xx. Xxxxxx X. Xxxx
Vice President
First Atlantic Capital, Ltd.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Agent: General Electric Capital Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Account Manager - Xxxxx Plastics
with a copy to: General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: GE Commercial Finance Legal Counsel
with a copy to: Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxx, Esq.
Collateral Agent: BANK OF AMERICA, N.A.
(on or before Bank of America Business Credit
BofA Termination 000 X. Xxxxxxx Xxxxxx
Xxxx) Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx
with a copy to: Xxxxx X. Xxxxxxx, Esq.
Miles & Stockbridge P.C.
00 Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
93
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.
Subject to the terms of Sections 8.8.1 and 8.14, 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 (or
the Agent with the approval of the Requisite Lenders), the Borrower, and to the
extent provided in Section 8.12 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 Collateral Agent under this Agreement, under any of other Financing
Documents or otherwise must be approved and signed by the Collateral 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 8.12:
(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 Agent 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
94
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 and are subject to the terms and
conditions of the Intercreditor Agreement, 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 the Collateral Agent
proceeding 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, or permit the Collateral Agent to
fail, to perfect the Lien in any or all Collateral or to release any or all the
Collateral or to accept substitute Collateral, (ii) waive any provision of this
Agreement or the other Financing Documents, (iii) exercise or fail to exercise
rights of set-off or other rights, or (iv) 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;
95
(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 Loans; provided that (a) the amount assigned by such Lender must be at
least equal to Five Million Dollars ($5,000,000) and (b) after giving effect to
such assignment, such Lender must continue to hold a Pro Rata Share of the Loans
at least equal to Five Million Dollars ($5,000,000), unless such Lender has
assigned one hundred percent (100%) of such Lender's Loans. GE Capital agrees
that if at any time GE Capital sells one hundred percent (100%) of all of its
Commitments, GE Capital shall resign as Agent and the remaining Lenders shall
select a replacement Agent in accordance with the provisions of this Agreement.
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 Note 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 Loans (a) to GE
Capital or any other Lender 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 Loans at least equal to Five
Million Dollars ($5,000,000), unless such Lender has assigned one hundred
percent (100%) of such Lender's Loans, and (iii) 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
96
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 Loans 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 Loans; 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 (Assignments by
Lenders) or Section 9.6 (Participations by Lenders), 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 (i) 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, (ii) with the prior
written consent of Borrower, (iii) as required in connection with the exercise
of any remedy under this Agreement or any of the Financing Documents or (iv) 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).
97
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 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 Governing Law.
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
98
more of the Financing Documents may be executed elsewhere. The Agent and the
Lenders acknowledge, however, that remedies under certain of the Financing
Documents that relate to property outside the State may be subject to the laws
of the state in which the property is located.
9.11.2 Submission to Jurisdiction.
The Borrower irrevocably submits to the jurisdiction of any
state or federal court sitting in the State or in the State of New York 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 Appointment of Agent for Service of Process.
The Borrower hereby irrevocably designates and appoints CT
Corporation System, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, as its agent
to receive on their 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 or in the State of New York. If such
agent shall cease so to act, the Borrower shall irrevocably designate and
appoint without delay another such agent in either such 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 Service of Process.
The Borrower hereby consents to process being served in any
suit, action or proceeding of the nature referred to in this Section by (a) the
mailing of a copy thereof by registered or certified mail, postage prepaid,
return receipt requested, to the Borrower at its address designated in or
pursuant to Section 9.1 (Notices), and (b) serving a copy thereof upon the
agent, if any, designated and appointed by the Borrower as its 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 each of them 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.
99
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, THE COLLATERAL 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, the Collateral 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, the Collateral 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 Collateral Agent, 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
Collateral Agent, 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.
100
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 Collateral Agent, the Agent and/or any of
the Lenders pursuant to this Agreement or any of the other Financing Documents,
neither the Collateral Agent, 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
Collateral Agent, the Agent and/or the Lenders.
Section 9.17 ENTIRE AGREEMENT.
THIS AGREEMENT IS INTENDED BY THE COLLATERAL AGENT, THE AGENT, THE LENDERS
AND THE BORROWER TO BE A COMPLETE, EXCLUSIVE AND FINAL EXPRESSION OF THE
AGREEMENTS CONTAINED HEREIN. NEITHER THE COLLATERAL AGENT, 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.
101
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
_________________________ By:_______________________(Seal)
Name:
Title:
WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION
in its capacity as Agent
_________________________ By:_______________________(Seal)
Name:
Title:
WITNESS: GENERAL ELECTRIC CAPITAL CORPORATION
in its capacity as a Lender
_________________________ By:_______________________(Seal)
Name:
Title:
WITNESS: BANK OF AMERICA, N.A.
in its capacity as Collateral Agent
_________________________ By:_______________________(Seal)
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
LIST OF EXHIBITS
A-1. Pro-Forma Financial Statements
A-2 Pro-Forma Balance Sheets
B Form of Compliance Certificate
LIST OF SCHEDULES
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
TABLE OF CONTENTS
ARTICLE I DEFINITIONS 1
Section 1.1 Certain Defined Terms 1
Section 1.2 Accounting Terms and Other Definitional Provisions 29
ARTICLE II THE CREDIT FACILITIES 30
Section 2.1 The Term Loan Facility 30
2.1.1 Term Loan Commitments 30
2.1.2 Payment of Term Loans; the Term Loan Notes 30
2.1.3 Mandatory Prepayments of Term Loans 30
2.1.4 Optional Prepayments of Term Loans 32
Section 2.2 Interest 33
2.2.1 Applicable Interest Rates 33
2.2.2 Selection of Interest Rates 33
2.2.3 Inability to Determine LIBOR Base Rate 35
2.2.4 Indemnity 35
2.2.5 Payment of Interest 36
Section 2.3 General Financing Provisions 36
2.3.1 Borrower's Representatives 36
2.3.2 Use of Proceeds of the Loans 37
2.3.3 Commitment Fee 37
2.3.4 Closing Fee 37
2.3.5 Computation of Interest 37
2.3.6 Payments 37
2.3.7 Liens; Setoff 38
2.3.8 Requirements of Law 38
Section 2.4 Settlement Among Lenders 39
Section 2.5 Presumption of Payment 39
ARTICLE III THE COLLATERAL 39
Section 3.1 Debt and Obligations Secured 39
Section 3.2 Grant of Liens 40
Section 3.3 Personal Property 41
3.3.1 Securities, Chattel Paper, Promissory Notes, etc 41
3.3.2 Patents, Copyrights and Other Property Requiring Additional
Steps to Perfect 42
Section 3.4 Record Searches 42
Section 3.5 Real Property 43
Section 3.6 Subsidiary Guarantor Assets 44
Section 3.7 Costs 44
Section 3.8 Release 45
Section 3.9 Inconsistent Provisions 45
Section 3.10 Collateral Agency 45
ARTICLE IV REPRESENTATIONS AND WARRANTIES 45
Section 4.1 Representations and Warranties 45
4.1.1 Subsidiaries 45
4.1.2 Good Standing 46
4.1.3 Power and Authority 46
4.1.4 Binding Agreements 46
4.1.5 No Conflicts 46
4.1.6 No Defaults, Violations. As of the date of this Agreement: 47
4.1.7 Compliance with Laws 47
4.1.8 Margin Stock 47
4.1.9 Investment Company Act; Margin Securities 47
4.1.10 Litigation 48
4.1.11 Financial Condition 48
4.1.12 Pro-forma Financial Statements 48
4.1.13 Full Disclosure 49
4.1.14 Indebtedness for Borrowed Money 49
4.1.15 Subordinated Debt; Senior Secured Debt; BofA Financing Agreement. 49
4.1.16 Taxes 49
4.1.17 ERISA 50
4.1.18 Title to Properties 50
4.1.19 Patents, Trademarks, Etc 50
4.1.20 Employee Relations 50
4.1.21 Presence of Hazardous Materials or Hazardous Materials
Contamination 51
4.1.22 Perfection and Priority of Collateral 51
4.1.23 Places of Business and Location of Collateral 51
4.1.24 Business Names and Addresses 52
4.1.25 Equipment 52
4.1.26 Italian Target Stock Purchase Transaction 52
4.1.27 Xxxx-Xxxxx-Xxxxxx 52
4.1.28 Term Loans 52
Section 4.2 Survival 53
ARTICLE V CONDITIONS PRECEDENT 53
Section 5.1 Conditions to the Making of the Loans 53
5.1.1 Organizational Documents - Borrower 53
5.1.2 Opinion of Counsel 54
5.1.3 Organizational Documents - Guarantors 54
5.1.4 Consents, Licenses, Approvals, Etc 54
5.1.5 Notes 54
5.1.6 Financing Documents 54
5.1.7 Other Financing Documents 55
5.1.8 Other Documents, Etc 55
5.1.9 Payment of Fees 55
5.1.10 Recordings and Filings 55
5.1.11 Pro-forma Balance Sheet and Projections 55
5.1.12 Stock Certificates and Stock Powers 55
ARTICLE VI COVENANTS OF THE BORROWER 56
Section 6.1 Affirmative Covenants 56
6.1.1 Financial Statements 56
6.1.2 Reports to SEC and to Stockholders 58
6.1.3 Recordkeeping, Rights of Inspection, Field Examination, Etc 58
6.1.4 Corporate Existence 59
6.1.5 Compliance with Laws 59
6.1.6 Preservation of Properties 59
6.1.7 Line of Business 60
6.1.8 Insurance 60
6.1.9 Taxes 60
6.1.10 ERISA 60
6.1.11 Notification of Events of Default and Adverse Developments 61
6.1.12 Hazardous Materials; Contamination 61
6.1.13 Financial Covenants 62
6.1.14 Insurance With Respect to Equipment and Inventory 64
6.1.15 Maintenance of the Collateral 64
6.1.16 Defense of Title and Further Assurances 64
6.1.17 Business Names; Locations 65
6.1.18 Subsequent Opinion of Counsel as to Recording Requirements 66
6.1.19 Use of Premises and Equipment 66
6.1.20 Protection of Collateral 66
6.1.21 Application of Net Casualty Proceeds 66
Section 6.2 Negative Covenants 67
6.2.1 Capital Structure, Merger, Acquisition or Sale of Assets 67
6.2.2 Subsidiaries 68
6.2.3 Purchase or Redemption of Securities, Dividend Restrictions 69
6.2.4 Indebtedness 69
6.2.5 Investments, Loans and Other Transactions 71
6.2.6 Capital Expenditures 73
6.2.7 Stock of Subsidiaries 73
6.2.8 Subordinated Indebtedness 73
6.2.9 Liens 74
6.2.10 Transactions with Affiliates 74
6.2.11 ERISA Compliance 75
6.2.12 Prohibition on Hazardous Materials 75
6.2.13 Amendments 75
6.2.14 Method of Accounting; Fiscal Year 75
6.2.15 Transfer of Collateral 75
6.2.16 Sale and Leaseback 76
ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES 76
Section 7.1 Events of Default 76
7.1.1 Failure to Pay 76
7.1.2 Breach of Representations and Warranties 77
7.1.3 Failure to Comply with Certain Covenants 77
7.1.4 Failure to Comply with Other Covenants 77
7.1.5 Default Under Other Financing Documents or Obligations 77
7.1.6 Receiver; Bankruptcy 77
7.1.7 Involuntary Bankruptcy, etc 78
7.1.8 Judgment 78
7.1.9 Execution; Attachment 78
7.1.10 Default Under Other Borrowings 79
7.1.11 Challenge to Agreements 79
7.1.12 Material Adverse Change 79
7.1.13 Change in Ownership 79
7.1.14 Liquidation, Termination, Dissolution, Change in
Management, etc. 79
7.1.15 Parent Line of Business 80
7.1.16 Failure to Pay Senior Secured Debt - Parent 80
Section 7.2 Remedies 80
7.2.1 Acceleration 80
7.2.2 Uniform Commercial Code 80
7.2.3 Specific Rights With Regard to Collateral 81
7.2.4 Application of Proceeds 82
7.2.5 Performance by Collateral Agent 82
7.2.6 Other Remedies 83
ARTICLE VIII THE AGENT 83
Section 8.1 Appointment 83
Section 8.2 Nature of Duties 84
8.2.1 In General 84
8.2.2 Express Authorization 84
Section 8.3 Rights, Exculpation, Etc 85
Section 8.4 Reliance 86
Section 8.5 Indemnification 86
Section 8.6 GE Capital Individually 86
Section 8.7 Successor Agent 87
8.7.1 Resignation 87
8.7.2 Appointment of Successor 87
8.7.3 Successor Agent 87
Section 8.8 Collateral Matters 88
8.8.1 Release of Collateral 88
8.8.2 Confirmation of Authority, Execution of Releases 89
8.8.3 Absence of Duty 90
Section 8.9 Agency for Perfection; Appointment and Replacement
of Collateral Agent. 90
Section 8.10 Exercise of Remedies 90
Section 8.11 Consents 90
Section 8.12 Circumstances Where Consent of all of the Lenders is Required 91
Section 8.13 Dissemination of Information 92
Section 8.14 Consents, Amendments and Waivers on or before BofA
Termination Date 92
ARTICLE IX MISCELLANEOUS 92
Section 9.1 Notices 92
Section 9.2 Amendments; Waivers 94
Section 9.3 Cumulative Remedies 95
Section 9.4 Severability 95
Section 9.5 Assignments by Lenders 96
Section 9.6 Participations by Lenders 97
Section 9.7 Disclosure of Information by Lenders 97
Section 9.8 Successors and Assigns 98
Section 9.9 Continuing Agreements 98
Section 9.10 Enforcement Costs 98
Section 9.11 Applicable Law; Jurisdiction 98
9.11.1 Governing Law 98
9.11.2 Submission to Jurisdiction 99
9.11.3 Appointment of Agent for Service of Process 99
9.11.4 Service of Process 99
Section 9.12 Duplicate Originals and Counterparts 99
Section 9.13 Headings 100
Section 9.14 No Agency 100
Section 9.15 Waiver of Trial by Jury 100
Section 9.16 Liability of the Agent and the Lenders 100
Section 9.17 ENTIRE AGREEMENT 101
