Exhibit 10
Execution Copy
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$75,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of July 18, 2005
among
INDUSTRIAL DISTRIBUTION GROUP, INC.
and
IDG USA, LLC,
as Borrowers,
THE GUARANTORS PARTY HERETO,
THE LENDERS PARTY HERETO,
BANK OF AMERICA, N.A.,
as Administrative Agent,
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent,
and
BANC OF AMERICA SECURITIES LLC,
as Sole Lead Arranger and Sole Book Runner
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TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS................................................................................ 2
1.1 GENERAL DEFINITIONS........................................................................... 2
1.2 ACCOUNTING TERMS AND DETERMINATIONS........................................................... 26
1.3 OTHER DEFINITIONAL TERMS...................................................................... 27
1.4 JOINT AND SEVERAL OBLIGATIONS................................................................. 27
ARTICLE 2 LOANS..................................................................................... 27
2.1 LOANS......................................................................................... 27
2.2 OPTIONAL AND MANDATORY PREPAYMENTS; REDUCTION OF COMMITMENTS.................................. 34
2.3 PAYMENTS AND COMPUTATIONS..................................................................... 35
2.4 MAINTENANCE OF ACCOUNT........................................................................ 38
2.5 STATEMENT OF ACCOUNT.......................................................................... 39
2.6 TAXES......................................................................................... 39
2.7 SHARING OF PAYMENTS........................................................................... 40
2.8 PRO RATA TREATMENT............................................................................ 41
2.9 EXTENSIONS AND CONVERSIONS.................................................................... 41
2.10 SWINGLINE LOAN SUBFACILITY.................................................................... 42
ARTICLE 3 LETTERS OF CREDIT......................................................................... 43
3.1 ISSUANCE...................................................................................... 43
3.2 NOTICE AND REPORTS............................................................................ 44
3.3 PARTICIPATION................................................................................. 44
3.4 REIMBURSEMENT................................................................................. 44
3.5 REPAYMENT WITH REVOLVING LOANS................................................................ 45
3.6 RENEWAL, EXTENSION............................................................................ 46
3.7 UNIFORM CUSTOMS AND PRACTICES................................................................. 46
3.8 INDEMNIFICATION; NATURE OF DUTIES OF ISSUING BANKS............................................ 46
3.9 RESPONSIBILITY OF ISSUING BANKS............................................................... 47
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS...................................................... 47
ARTICLE 4 INTEREST AND FEES......................................................................... 47
4.1 INTEREST ON LOANS............................................................................. 47
4.2 INTEREST AFTER EVENT OF DEFAULT............................................................... 48
4.3 UNUSED LINE FEE............................................................................... 48
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4.4 LENDERS' FEES/ADMINISTRATIVE AGENT'S FEES..................................................... 48
4.5 LETTER OF CREDIT FEES......................................................................... 48
4.6 AUTHORIZATION TO CHARGE ACCOUNT............................................................... 49
4.7 INDEMNIFICATION IN CERTAIN EVENTS............................................................. 49
4.8 INABILITY TO DETERMINE INTEREST RATE.......................................................... 49
4.9 ILLEGALITY.................................................................................... 50
4.10 FUNDING INDEMNITY............................................................................. 50
ARTICLE 5 CONDITIONS PRECEDENT...................................................................... 51
5.1 CLOSING CONDITIONS............................................................................ 51
5.2 CONDITION TO ALL LOANS AND LETTERS OF CREDIT.................................................. 54
ARTICLE 6 REPRESENTATIONS AND WARRANTIES............................................................ 55
6.1 ORGANIZATION AND QUALIFICATION................................................................ 55
6.2 SOLVENCY...................................................................................... 55
6.3 LIENS; INVENTORY.............................................................................. 56
6.4 NO CONFLICT................................................................................... 56
6.5 ENFORCEABILITY................................................................................ 56
6.6 FINANCIAL DATA; MATERIAL ADVERSE CHANGE....................................................... 57
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY................................................... 57
6.8 FICTITIOUS BUSINESS NAMES..................................................................... 58
6.9 SUBSIDIARIES.................................................................................. 58
6.10 NO JUDGMENTS OR LITIGATION.................................................................... 58
6.11 NO DEFAULTS................................................................................... 58
6.12 NO EMPLOYEE DISPUTES.......................................................................... 58
6.13 COMPLIANCE WITH LAW........................................................................... 58
6.14 ERISA......................................................................................... 59
6.15 COMPLIANCE WITH ENVIRONMENTAL LAWS............................................................ 59
6.16 USE OF PROCEEDS............................................................................... 60
6.17 INTELLECTUAL PROPERTY......................................................................... 60
6.18 LICENSES AND PERMITS.......................................................................... 60
6.19 TITLE TO PROPERTY............................................................................. 61
6.20 LABOR MATTERS................................................................................. 61
6.21 INVESTMENT COMPANY............................................................................ 61
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6.22 MARGIN SECURITY............................................................................... 62
6.23 NO EVENT OF DEFAULT........................................................................... 62
6.24 TAXES AND TAX RETURNS......................................................................... 62
6.25 NO OTHER INDEBTEDNESS......................................................................... 62
6.26 STATUS OF ACCOUNTS............................................................................ 62
6.27 REPRESENTATIONS AND WARRANTIES................................................................ 63
6.28 SURVIVAL OF REPRESENTATIONS................................................................... 63
6.29 AFFILIATE TRANSACTIONS........................................................................ 63
6.30 ACCURACY AND COMPLETENESS OF INFORMATION...................................................... 63
6.31 OFAC.......................................................................................... 63
6.32 PATRIOT ACT................................................................................... 63
ARTICLE 7 AFFIRMATIVE COVENANTS..................................................................... 64
7.1 FINANCIAL INFORMATION......................................................................... 64
7.2 INVENTORY..................................................................................... 66
7.3 CORPORATE EXISTENCE........................................................................... 66
7.4 ERISA......................................................................................... 66
7.5 PROCEEDINGS OR ADVERSE CHANGES................................................................ 67
7.6 ENVIRONMENTAL MATTERS......................................................................... 67
7.7 BOOKS AND RECORDS; INSPECTION................................................................. 68
7.8 COLLATERAL RECORDS............................................................................ 69
7.9 SECURITY INTERESTS............................................................................ 69
7.10 INSURANCE; CASUALTY LOSS...................................................................... 70
7.11 TAXES......................................................................................... 71
7.12 COMPLIANCE WITH LAWS.......................................................................... 71
7.13 USE OF PROCEEDS............................................................................... 71
7.14 FISCAL YEAR................................................................................... 72
7.15 NOTIFICATION OF CERTAIN EVENTS................................................................ 72
7.16 ADDITIONAL GUARANTORS......................................................................... 72
7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS..................................................... 72
7.18 COLLECTION OF ACCOUNTS........................................................................ 73
7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.................................................. 73
7.20 ACKNOWLEDGMENT AGREEMENTS..................................................................... 73
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TABLE OF CONTENTS
(Continued)
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7.21 TRADEMARKS.................................................................................... 74
7.22 MAINTENANCE OF PROPERTY....................................................................... 74
7.23 REVISIONS OR UPDATES TO SCHEDULES............................................................. 74
7.24 LETTERS OF CREDIT............................................................................. 74
7.25 THIRD PARTY CONSENTS.......................................................................... 74
ARTICLE 8 FINANCIAL COVENANTS....................................................................... 75
8.1 FIXED CHARGE COVERAGE RATIO................................................................... 75
ARTICLE 9 NEGATIVE COVENANTS........................................................................ 75
9.1 RESTRICTIONS ON LIENS......................................................................... 75
9.2 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS....................................................... 75
9.3 RESTRICTIONS ON SALE OF ASSETS................................................................ 75
9.4 NO CORPORATE CHANGES.......................................................................... 76
9.5 NO GUARANTEES................................................................................. 76
9.6 NO RESTRICTED PAYMENTS........................................................................ 76
9.7 NO INVESTMENTS................................................................................ 77
9.8 NO AFFILIATE TRANSACTIONS..................................................................... 77
9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA........................................................ 77
9.10 NO ADDITIONAL BANK ACCOUNTS................................................................... 78
9.11 NO EXCESS CASH................................................................................ 78
9.12 RESTRICTIONS ON SALE OF CAPITAL STOCK OF THE SUBSIDIARIES..................................... 78
9.13 ISSUANCE OF STOCK BY SUBSIDIARIES............................................................. 78
9.14 ADDITIONAL NEGATIVE PLEDGES................................................................... 78
9.15 INDEBTEDNESS.................................................................................. 79
9.16 SALE AND LEASEBACK............................................................................ 79
9.17 LICENSES, ETC................................................................................. 79
9.18 LIMITATIONS................................................................................... 79
ARTICLE 10 POWERS.................................................................................... 79
10.1 APPOINTMENT AS ATTORNEY-IN-FACT............................................................... 80
10.2 LIMITATION ON EXERCISE OF POWER............................................................... 80
ARTICLE 11 EVENTS OF DEFAULT AND REMEDIES............................................................ 80
11.1 EVENTS OF DEFAULT............................................................................. 80
11.2 ACCELERATION.................................................................................. 82
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(Continued)
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ARTICLE 12 TERMINATION............................................................................... 83
ARTICLE 13 THE ADMINISTRATIVE AGENT.................................................................. 83
13.1 APPOINTMENT AND AUTHORIZATION................................................................. 83
13.2 ADMINISTRATIVE AGENT'S RIGHTS AS LENDER....................................................... 83
13.3 DUTIES AS EXPRESSLY STATED.................................................................... 83
13.4 RELIANCE BY ADMINISTRATIVE AGENT.............................................................. 84
13.5 ACTION THROUGH SUB-ADMINISTRATIVE AGENTS...................................................... 84
13.6 RESIGNATION OF ADMINISTRATIVE AGENT AND APPOINTMENT OF SUCCESSOR
ADMINISTRATIVE AGENT.......................................................................... 84
13.7 LENDERS' INDEPENDENT DECISIONS................................................................ 85
13.8 INDEMNIFICATION............................................................................... 85
13.9 CONSENTS UNDER OTHER LOAN DOCUMENTS........................................................... 86
13.10 COLLATERAL MATTERS............................................................................ 86
13.11 ACTIONS WITH RESPECT TO DEFAULTS.............................................................. 87
13.12 SYNDICATION AGENT............................................................................. 87
ARTICLE 14 MISCELLANEOUS............................................................................. 87
14.1 WAIVERS....................................................................................... 87
14.2 JURY TRIAL.................................................................................... 88
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.............................................. 88
14.4 NOTICES....................................................................................... 88
14.5 ASSIGNABILITY................................................................................. 89
14.6 PAYMENT OF EXPENSES; INDEMNIFICATION.......................................................... 92
14.7 CONFIDENTIALITY............................................................................... 93
14.8 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS...................................................... 93
14.9 AMENDMENTS, ETC............................................................................... 93
14.10 NONLIABILITY OF ADMINISTRATIVE AGENT AND LENDERS.............................................. 94
14.11 INDEPENDENT NATURE OF LENDERS' RIGHTS......................................................... 95
14.12 COUNTERPARTS.................................................................................. 95
14.13 EFFECTIVENESS................................................................................. 95
14.14 SEVERABILITY.................................................................................. 95
14.15 HEADINGS DESCRIPTIVE.......................................................................... 95
14.16 MAXIMUM RATE.................................................................................. 95
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14.17 RIGHT OF SETOFF............................................................................... 96
14.18 APPOINTMENT OF PARENT AS AGENT AND ATTORNEY................................................... 96
14.19 REPLACEMENT LENDERS........................................................................... 96
14.20 LIMITATION ON ATTORNEYS FEES AND EXPENSES..................................................... 97
14.21 SEALS......................................................................................... 97
14.22 CONTINUED EFFECTIVENESS; NO NOVATION.......................................................... 97
ARTICLE 15 AFFILIATE GUARANTY........................................................................ 98
15.1 THE GUARANTEE................................................................................. 98
15.2 OBLIGATIONS UNCONDITIONAL..................................................................... 98
15.3 REINSTATEMENT................................................................................. 98
15.4 DEFERRAL OF SUBROGATION RIGHTS................................................................ 99
15.5 REMEDIES...................................................................................... 99
15.6 CONTINUING GUARANTY........................................................................... 99
15.7 RIGHTS OF CONTRIBUTION........................................................................ 99
15.8 LIMITATION ON GUARANTEED OBLIGATIONS.......................................................... 100
15.9 SUBORDINATION................................................................................. 100
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT is entered into as of July 18, 2005
among INDUSTRIAL DISTRIBUTION GROUP, INC., a Delaware corporation (the
"Parent"), IDG USA, LLC, a Georgia limited liability company ("IDG", and
together with the Parent, the "Borrowers" and each, a "Borrower"), those
DOMESTIC SUBSIDIARIES of the Borrowers identified on the signature pages hereto
as "Guarantors" and any other Subsidiaries of the Borrowers which may become
Guarantors hereunder pursuant to Section 7.16 (collectively referred to as the
"Guarantors" or individually referred to as a "Guarantor"; hereinafter, the
Borrowers and the Guarantors are sometimes collectively referred to as the
"Credit Parties" or individually referred to as an "Credit Party"); the LENDERS
party hereto (together with each of their successors and assigns, referred to
individually as a "Lender" and, collectively, as the "Lenders"); WACHOVIA BANK,
NATIONAL ASSOCIATION ("Wachovia"),, as Syndication Agent, and BANK OF AMERICA,
N.A. ("Bank of America"), a national banking association, as a Lender and as
Administrative Agent.
WITNESSETH:
WHEREAS, the Credit Parties are parties to that certain Credit Agreement
dated as of December 22, 2000 among the Parent, as "borrower" thereunder, each
of the Subsidiaries of the Parent constituting "affiliate guarantors"
thereunder, each of the financial institutions party thereto as "lenders"
thereunder (the "Existing Lenders"), Fleet Capital Corporation, as Documentation
Agent, Bank of America, N.A., as Syndication Agent, and Wachovia (formerly known
as First Union National Bank), as "administrative agent" thereunder (the "Prior
Administrative Agent") and as "swingline lender" thereunder (as heretofore
amended, modified and supplemented and in effect on the date hereof immediately
before giving effect to the amendment and restatement contemplated hereby, the
"Existing Credit Agreement");
WHEREAS, Wachovia desires to assign to, and Bank of America desires to
succeed to and assume, the rights and obligations of Wachovia, as
"administrative agent" and "swingline lender" under the Existing Credit
Agreement;
WHEREAS, Wachovia and Bank of America are entering into an Assignment and
Assumption Agreement immediately prior to the execution of this Agreement,
pursuant to which Wachovia is assigning and delegating to Bank of America, and
Bank of America is assuming the rights and obligations of Wachovia as
"administrative agent" and "swingline lender" under the Existing Credit
Agreement;
WHEREAS, the Credit Parties, the Existing Lenders, and Bank of America,
desire to amend and restate the Existing Credit Agreement in its entirety; and
WHEREAS, the Credit Parties and their Subsidiaries share an identity of
interests as members of a consolidated group of companies engaged in similar or
related businesses wherein the making available to the Parent and to IDG, as
co-borrowers, of financial accommodations by the Lenders will facilitate and
enhance the overall financial strength and stability of the consolidated group;
and
WHEREAS, upon the terms and subject to the conditions set forth herein,
the Lenders are willing to make loans and advances (including Protective
Advances and Overadvances under Section 2.1(f) below) to, and the Issuing Banks
are willing to issue Letters of Credit for the benefit of, the Borrowers under
this Agreement.
NOW, THEREFORE, the Credit Parties, the Lenders and the Administrative
Agent hereby agree that the Existing Credit Agreement be, and it hereby is,
amended and restated in its entirety by this
Agreement, and the Credit Parties, the Lenders and the Administrative Agent
hereby further agree as follows:
ARTICLE 1
DEFINITIONS
1.1 GENERAL DEFINITIONS.
As used herein, the following terms shall have the meanings herein
specified:
"Account Designation Letter" shall have the meaning given to such term in
Section 5.1(q).
"Accounts" shall mean all of each Credit Party's "accounts" (as defined in
the UCC), whether now existing or existing in the future, including all (i)
accounts receivable (whether or not specifically listed on schedules furnished
to the Administrative Agent), including all accounts created by or arising from
all of each Credit Party's sales of goods or rendition of services made under
any of each Credit Party's trade names or styles, or through any of each Credit
Party's divisions; (ii) unpaid seller's rights (including rescission, replevin,
reclamation and stopping in transit) relating to the foregoing or arising
therefrom, (iii) rights to any goods represented by any of the foregoing,
including returned or repossessed goods; (iv) reserves and credit balances held
by each Credit Party with respect to any such accounts receivable or account
debtors; (v) guarantees or collateral for any of the foregoing; and (vi)
insurance policies or rights relating to any of the foregoing.
"Acknowledgment Agreements" shall mean: (i) Customer Agreements; and (ii)
Landlord Agreements.
"Acquisition" shall mean the acquisition by a Credit Party or any
Subsidiary of: (a) all, or a controlling interest in, the voting stock or other
equity securities of another Person; or (b) all, or substantially all, of assets
or property of a Person, or assets or property constituting all, or
substantially all assets or properties of a division or line of business of a
Person.
"Adjusted Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Prime Rate in effect on such day, and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Adjusted Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Adjusted LIBO Rate" means, with respect to any LIBOR Borrowing for any
LIBOR Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such LIBOR
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" shall mean Bank of America, as provided in the
preamble of this Agreement, or any successor to Bank of America acting in such
capacity.
"Administrative Agent's Fees" shall mean the fees payable by the Borrowers
to the Administrative Agent as described in the Fee Letter.
"Affiliate" shall mean any entity which directly or indirectly Controls,
is Controlled by, or is under common Control with, any Credit Party or any
Subsidiary of any Credit Party.
2
"Agent" means each of the Administrative Agent and the Syndication Agent.
"Agreement" shall mean this Amended and Restated Credit Agreement, dated
as of the date hereof, as the same may be modified, amended, extended, restated
or supplemented from time to time; together with all exhibits and schedules
thereto.
"Applicable Margin" shall mean, for LIBOR Loans and Base Rate Loans, the
appropriate Applicable Margins corresponding to the Leverage Ratio in effect as
of the most recent Calculation Date (as defined below) as shown below:
Tier Applicable Margin Applicable Margin for
Levels Leverage Ratio for LIBOR Loans Base Rate Loans
------ ------------------- ----------------- ---------------------
1 > = 4.75 to 1.0 1.75% 0.00%
2 > = 3.25 to 1.0 but 1.50% 0.00%
< 4.75 to 1.0
3 > = 1.75 to 1.0 but 1.25% 0.00%
< 3.25 to 1.0
4 < 1.75 to 1.0 1.00% 0.00%
provided that, even if the Leverage Ratio shall be less than 1.75 to 1.0, the
Applicable Margins set forth above for Tier Level 4 shall only be available if
the Average Excess Availability as of the end of the most recently ended fiscal
month equals or exceeds $20,000,000 as set forth in the Compliance Certificate
most recently delivered pursuant to Section 7.1(d). If, at any time when Tier
Level 4 is in effect, the Average Excess Availability shall fall below
$20,000,000, then the Applicable Margins shall automatically change to
Applicable Margins set forth above for Tier Level 3 without further action or
notice to any Credit Party. If the Applicable Margins set forth in Tier Level 3
are in effect as a consequence of the Average Excess Availability having fallen
below $20,000,000 at any time, then the Applicable Margins shall not change to
Tier Level 4 unless and until (1) the Credit Parties shall deliver a Compliance
Certificate, demonstrating that the Leverage Ratio is less than 1.75 to 1.00 and
(2) the Average Excess Availability is, and has for the entire period of three
consecutive months most recently ended, equaled or exceeded $20,000,000.
The Applicable Margins shall be determined and adjusted quarterly on the
fifth (5th) Business Day (each a "Calculation Date") after each date on which
the Administrative Agent receives the Compliance Certificate for the fiscal
quarter most recently ended in accordance with the provisions of Section 7.1(d);
provided, however, that: (i) commencing on the Closing Date, the Applicable
Margins shall be based on Tier Xxxxx 0 of the pricing grid shown above and shall
remain at Tier Level 3 until the first Calculation Date subsequent to December
31, 2005; and, thereafter, the Tier Level shall be determined by the then
current Leverage Ratio (and in accordance with the proviso in the immediately
preceding paragraph, the Average Excess Availability); and (ii) if the Borrowers
fail to deliver a Compliance Certificate to the Administrative Agent for any
fiscal quarter as required by and within the time limits set forth in Section
7.1(d), each Applicable Margin from the applicable date of such delivery failure
shall be based on Tier Level 1 until five (5) Business Days after a satisfactory
Compliance Certificate is delivered, whereupon the Tier Level shall be
determined by the then current Leverage Ratio. Except as set forth above, each
Applicable Margin shall be effective from one Calculation Date until the next
Calculation Date.
3
"Applicable Percentage" shall mean, with respect to any Lender with
Revolving Credit Commitments, the percentage of the Revolving Credit Committed
Amount represented by such Lender's Revolving Credit Commitment and identified
on Schedule 1.1A or in the Assignment and Acceptance pursuant to which such
Lender acquired its Revolving Credit Commitment, in each case, as such
percentage may be modified in connection with any assignment made in accordance
with the provisions of Section 14.5 or in connection with an increase in the
Revolving Credit Commitment in accordance with Section 2.1(e).
"Approved Banks" shall have the meaning given to such term in the
definition of "Cash Equivalents" herein.
"Asset Disposition" shall mean the disposition (other than (i) any
disposition described in clauses (a) of Section 9.3 or (ii) a disposition
described in clauses (b) or (c) of Section 9.3, so long as the proceeds thereof
are used to repair existing assets or acquire other assets or property useful in
the relevant Credit Party's business within one hundred twenty (120) days of
such disposition) of any or all of the assets (including the Capital Stock of a
Credit Party or Subsidiary of a Credit Party) of any Credit Party or its
Subsidiaries, whether by sale, lease, transfer or otherwise, in a single
transaction, or in a series of related transactions in any consecutive twelve
(12) month period (a) that have a fair market value in the aggregate in excess
of Two Hundred Fifty Thousand Dollars ($250,000) or (b) for Net Cash Proceeds in
the aggregate in excess of Two Hundred Fifty Thousand Dollars ($250,000).
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by an assigning Lender and an assignee Lender, accepted by the
Administrative Agent and, if applicable, the Parent, in accordance with Section
14.5(f), in the form of Exhibit A.
"Authorized Officer," for each Credit Party, shall mean its chief
executive officer, chief operating officer, vice president, chief financial
officer, director of treasury, or Vice President of Finance (regardless of
title).
"Average Excess Availability" shall mean that amount, determined monthly,
as of the last Business Day of each calendar month, by which (A) the lesser of
(1) the Revolving Credit Committed Amount in effect on the first day of such
calendar month (or the Closing Date, for the initial such partial month), or (2)
the Borrowing Base reported at the end of such calendar month or, as
appropriate, at the end of the calendar week closest to such month end, pursuant
to Section 7.1(e), exceeds (B) the greater of (1) the total amount of Loans and
Letter of Credit Obligations outstanding at the end of such calendar month, or
(2) the daily mean average amount of Loans and Letter of Credit Obligations for
such calendar month.
"Bank of America" shall have the meaning given to such term in the first
paragraph hereof and shall include its successors and assigns.
"Bank of America Account" shall mean a deposit account to be established
and maintained, if necessary, in the name of the Administrative Agent at Bank of
America, for the benefit of the Lenders, in respect of the Borrowers for
purposes of this Agreement.
"Base Rate Loan" shall mean any Loan bearing interest at a rate determined
by reference to the Adjusted Base Rate.
"Benefit Plan" shall mean a defined benefit plan as defined in Section
3(35) of ERISA (other than a Multiemployer Plan) in respect of which any
Borrower, any Subsidiary or any ERISA Affiliate is, or within the immediately
preceding six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
4
"Board" means the Board of Governors of the Federal Reserve System of the
United States of America.
"Borrowers" shall have the meaning given to such term in the preamble of
this Agreement.
"Borrowing Base" shall mean, at the relevant time of reference thereto, an
amount determined by the Administrative Agent by reference to the most recent
Borrowing Base Certificate delivered to the Administrative Agent which is equal
to the sum of:
(1) an amount equal to eighty-five percent (85%) of Eligible Accounts
Receivable; plus
(2) an amount equal to the lesser of:
(i) the sum of (x) the lesser of (A) fifteen percent (15%) of
Qualified Inventory (as defined below) and (B) One Million Eight Hundred
Seventy Five Thousand Dollars ($1,875,000) and (y) fifty-five percent
(55%) of Qualified Inventory and Non-Qualified Inventory (as each term is
hereinafter defined), and
(ii) Fifty Million Dollars ($50,000,000);
where "Qualified Inventory" shall mean Eligible Inventory meeting the
following conditions: (1) it is located at an ISA Site pursuant to an
existing ISA that is then in effect with a Customer whose credit quality
has been approved by the Administrative Agent in its commercially
reasonable judgment; (2) Acknowledgment Agreements in regard to such
Inventory in form satisfactory to the Administrative Agent have been duly
executed and are then in effect, and (3) the ISA or Customer Agreement
contains "buyback" or "buyout" provisions with respect to such Inventory
satisfactory to the Administrative Agent; and "Non-Qualified Inventory"
shall mean any Eligible Inventory except Qualified Inventory, but
including any Eligible Inventory at any ISA Site which fails to meet any
one of the foregoing criteria for Qualified Inventory; plus
(3) an amount equal to the lesser of:
(i) an amount equal to fifty-five percent (55%) of Eligible In
Transit Inventory for which a documentary Letter of Credit has been issued
and remains outstanding; and
(ii) One Million Eight Hundred Seventy-Five Thousand Dollars
($1,875,000); minus
(4) reserves in respect of Eligible Accounts Receivable and Eligible
Inventory consistent with the definitions thereof, and such other reserves as
may be established by the Administrative Agent from time to time in its
commercially reasonable judgment.
In determining the Borrowing Base from time to time, the Administrative
Agent may, but shall not be required to, rely upon reports or analyses generated
by the Credit Parties (including Borrowing Base Certificates) and reports or
analyses generated by or on behalf of the Administrative Agent or any Lender.
Notwithstanding anything to the contrary set forth herein, the Administrative
Agent may in its commercially reasonable judgment at any time and from time to
time upon three (3) Business Days prior notice, adjust the percentage of
Eligible Accounts Receivable and Eligible Inventory included in the Borrowing
Base; provided that the Administrative Agent shall not increase any such
percentages to a percentage greater than that in effect on the Closing Date
without obtaining the consent of each Lender.
"Borrowing Base Certificate" shall have the meaning given to such term in
Section 7.1(e).
5
"Business Day" shall mean any day that is not a Saturday, Sunday or other
day on which commercial banks in Boston, Massachusetts are authorized or
required by law to remain closed; provided that, when used in connection with a
LIBOR Loan, the term "Business Day" shall also exclude any day on which banks
are not open for dealings in U.S. dollar deposits in the London interbank
market.
"Capital Lease" shall mean, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
accordance with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Capital Stock" shall mean (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and all
shares, interests, participations, rights or other equivalents (however
designated) of capital stock, (iii) in the case of a partnership, partnership
interests (whether general or limited), (iv) in the case of a limited liability
company, membership interests and (v) any other equity interest or participation
that confers on a Person the right to receive a share of the profits and losses
of, or distributions of assets of, the issuing Person.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued or
directly and fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than one (1)
year from the date of acquisition, (ii) time deposits or certificates of deposit
of any commercial bank incorporated under the laws of the United States or any
state thereof, of recognized standing having capital and unimpaired surplus in
excess of $1,000,000,000 and whose short-term commercial paper rating at the
time of acquisition is at least A-1 or the equivalent thereof by Standard &
Poor's Corporation or at least P-1 or the equivalent thereof by Xxxxx'x
Investors Services, Inc. (any such bank, an "Approved Bank"), with such deposits
or certificates having maturities of not more than one (1) year from the date of
acquisition, (iii) repurchase obligations with a term of not more than seven (7)
days for underlying securities of the types described in clauses (i) and (ii)
above entered into with any Approved Bank, (iv) commercial paper or finance
company paper issued by any Person incorporated under the laws of the United
States or any state thereof and rated at least A-1 or the equivalent thereof by
Standard & Poor's Corporation or at least P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc., and in each case maturing not more than one
year after the date of acquisition, and (v) investments in money market funds
that are registered under the Investment Company Act of 1940, as amended, which
have net assets of at least $1,000,000,000 and at least eighty-five percent
(85%) of whose assets consist of securities and other obligations of the type
described in clauses (i) through (iv) above. All such Cash Equivalents must be
denominated solely for payment in Dollars.
"Cash Management Bank" shall mean either (a) Bank of America or (b)
Wachovia, in each case, and its affiliates and successors, in its capacity as
the provider of cash management services to the Borrowers.
"Cash Management Obligations" shall mean all present and future
liabilities, obligations and Indebtedness of the Credit Parties owing to the
Administrative Agent, any Lender, the Cash Management Bank, or any Affiliate
thereof under or in connection with any Cash Management Services or related
services or products provided by the Administrative Agent, any Lender, the Cash
Management Bank or any Affiliate thereof to or for the account of the Credit
Parties, including liabilities, obligations or Indebtedness in respect of
automated clearing house and other fund transfers, checks, money orders, drafts,
instruments, funds, payments and other items and forms of remittances paid,
deposited or otherwise credited to any deposit, disbursement or other account of
any Credit Party, any overdraft or other extension of credit made to cover any
funds transfer, check, draft, instrument or amount paid for the account or
benefit of any Credit Party, and all fees, charges, indemnities, expenses and
other amounts from time to time owing to the Administrative Agent, any Lender,
the Cash Management Bank or any
6
Affiliate thereof in connection therewith (all whether accruing before or after
the commencement of any bankruptcy proceeding by or against any Credit Party and
regardless of whether allowed as a claim in any such proceeding).
"Cash Management Services" shall mean all cash management services
extended by any Lender, individually, to the Borrowers or any other Credit Party
in furtherance of, pursuant to, in accordance with or otherwise arising from the
transactions contemplated to occur in, this Agreement or any other Loan Document
including any in respect of a Lockbox or as a Lockbox Bank.
"Casualty Loss" shall have the meaning given to such term in Section 7.10.
"Change of Control" shall mean the occurrence of either of the following:
(i) any Person (or group of Persons acting in concert), not in Control of the
Parent on the Closing Date shall acquire Control of the Parent; (ii) during any
period of twelve (12) consecutive calendar months, individuals who were
directors of the Parent on the first day of such period shall cease to
constitute a majority of the board of directors of the Parent other than because
of the replacement as a result of death or disability of one or more such
directors or (iii) the Parent shall cease to own, directly or indirectly, all of
the Capital Stock of IDG or the Guarantors (except Cardinal Machinery, Inc),
unless otherwise permitted by this Agreement.
"Closing" shall mean the consummation of the making of the initial Loan by
the Lenders to the Borrowers under this Agreement.
"Closing Date" shall mean the date on which the Closing occurs.
"Collateral" shall mean all assets and rights and interests in or to
property of the Credit Parties pledged from time to time as security for the
Obligations pursuant to the Security Documents.
"Commitment" shall mean the Revolving Credit Commitment of each Lender,
the Swingline Commitment of the Swingline Lender and the Letter of Credit
Commitments of the Issuing Banks or each, as appropriate.
"Compliance Certificate" shall mean a certificate signed by a Authorized
Officer, in substantially the form of Exhibit S, (a) such officer has caused
this Agreement to be reviewed and has no knowledge of any Default or Event of
Default during such month or quarter or at the end of such year, or, if such
officer has such knowledge, specifying each Default or Event of Default and the
nature thereof and any action taken or proposed to be taken with respect
thereto, (b) setting forth reasonably detailed calculations demonstrating
compliance with the financial covenants contained in Article 8, if applicable,
(c) stating whether any change in GAAP or in the application thereof has
occurred since the date of the audited financial statements referred to in
Section 6.6 and, if any such change has occurred, specifying the effect of such
change on the financial statements accompanying such certificate and (d) setting
forth the Leverage Ratio as of the end of the applicable fiscal quarter and year
for purposes of determining the Applicable Margin
"Consolidated" or "consolidated" with reference to any term defined
herein, shall mean that term as applied to the accounts of the Parent and all of
its consolidated Subsidiaries, consolidated in accordance with GAAP.
"Consolidated Capital Expenditures" shall mean, for any applicable period
of computation, an amount equal to the consolidated aggregate expenditures of
the Parent and its consolidated Subsidiaries during such fiscal period for the
acquisition (including the acquisition by capitalized lease) or improvement of
capital assets, as determined in accordance with GAAP.
7
"Consolidated Cash Taxes" shall mean, for any applicable period of
computation, the aggregate of all taxes of the Parent and its consolidated
Subsidiaries on a consolidated basis determined in accordance with applicable
law and GAAP applied on a consistent basis, to the extent the same are paid in
cash during such period. The applicable period of computation shall be for the
twelve (12) consecutive fiscal months of the Parent ending as of the date of
determination.
"Consolidated EBITDA" shall mean, for any applicable period of
computation, Consolidated Net Income plus to the extent the following items are
deducted in calculating Consolidated Net Income for such period: (i)
Consolidated Interest Expense for such period, (ii) Consolidated Cash Taxes for
such period, and (iii) depreciation, amortization and other non-cash charges for
such period.
"Consolidated Fixed Charges" shall mean, for any applicable period of
computation, without duplication, the sum of (i) all Consolidated Interest
Expense for such period plus (ii) Consolidated Scheduled Funded Debt Payments
for such period plus (iii) Consolidated Cash Taxes for such period, plus (iv)
Restricted Payments paid in cash by the Parent during such period.
"Consolidated Funded Debt" shall mean, as of any date of determination,
all Funded Indebtedness of the Parent and its consolidated Subsidiaries on such
date, determined on a consolidated basis in accordance with GAAP.
"Consolidated Interest Expense" shall mean, for any applicable period of
computation, interest expense, net of interest income, of the Parent and its
consolidated Subsidiaries for such period, as determined in accordance with
GAAP.
"Consolidated Net Income" shall mean, for any applicable period of
computation, the consolidated net income (or net deficit) of the Parent and its
consolidated Subsidiaries for such period, after deduction of all expenses,
taxes and other proper charges, all as determined in accordance with GAAP.
"Consolidated Scheduled Funded Debt Payments" shall mean, for any
applicable period of computation for the Parent and its consolidated
Subsidiaries on a consolidated basis, the sum of all regularly scheduled
payments of principal on Consolidated Funded Debt for such period (including the
principal component of any payments due on Capital Leases).
"Contractual Obligations" shall mean, with respect to any Person, any term
or provision of any securities issued by such Person, or any indenture,
mortgage, deed of trust, contract, undertaking, document, instrument or other
agreement to which such Person is a party or by which it or any of its
properties is bound or to which it or any of its properties is subject.
"Control" and its correlative components, "Controlled" and "Controlling"
shall mean the possession, directly or indirectly, of the power to (i) vote
twenty percent (20%) or more of the securities having ordinary voting power for
the election of directors (or similar governing board) of such Person, or (ii)
direct or cause the direction of management and policies of a business, whether
through the ownership of voting securities, by contract or otherwise and either
alone or in conjunction with others or any group.
"Credit Party" and "Credit Parties" shall have the meaning given to such
term in the preamble of this Agreement.
"Customer" shall mean a Person to whom any Credit Party sells goods or
provides services pursuant to an ISA or other agreement and pursuant to which
the Inventory of such Credit Party is situated on the Property of such Person.
8
"Customer Agreement" shall mean a Customer Waiver and Consent Agreement,
substantially in the form of Exhibit B (or such other form as shall be
acceptable to the Administrative Agent in its commercially reasonable judgment),
between a Customer and the Administrative Agent.
"Default" shall mean an event, condition or default which, with the giving
of notice, the passage of time or both, would become an Event of Default.
"Default Rate" shall have the meaning given to such term in Section 4.2.
"Defaulting Lender" shall have the meaning given to such term in Section
2.1(d)(iii).
"DOL" shall mean the U.S. Department of Labor and any successor department
or agency.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Subsidiaries" shall mean, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the laws of
the United States, any State of the United States or the District of Columbia.
"Eligible Accounts Receivable" shall mean the aggregate face amount of the
Credit Parties' Accounts that conform to the warranties contained herein and at
all times continue to be acceptable to the Administrative Agent in its
commercially reasonable judgment, less the aggregate amount of all returns,
discounts, claims, credits, charges (including warehousemen's charges) and
allowances of any nature (whether issued, owing, granted or outstanding);
provided, however, that, subject to the succeeding paragraph hereof, no Account
shall be deemed to be an Eligible Account Receivable if:
(i) it arises out of a sale or lease made by any Credit Party to an
Affiliate; or
(ii) the Account is unpaid more than ninety (90) days after the
original invoice date; or
(iii) the invoice for such Account provides that payment is due more
than sixty (60) days from the date of such invoice.
(iv) the Account is from the same account debtor (or any affiliate
thereof) and fifty percent (50%) or more, in face amount, of other
Accounts from such account debtor (or any affiliate thereof) are unpaid
more than ninety (90) days after the original invoice date; or
(v) the amount of the Account, when aggregated with all other
Accounts of the same account debtor, exceeds fifteen percent (15%) in face
value of all Eligible Accounts Receivable of the Credit Parties then
outstanding, to the extent of such excess; or
(vi) (A) the account debtor is also a creditor of any Credit Party,
to the extent of the amount owed by such Credit Party to the account
debtor, (B) the account debtor has disputed its liability on, or the
account debtor has made any claim with respect to, such Account or any
other Account due from such account debtor to such Credit Party, which has
not been resolved, to the extent of the amount of such dispute or claim,
(C) the Account otherwise is or may become subject to any right of setoff
by the account debtor, to the extent of the amount of such setoff; or
(vii) unless otherwise agreed by the Administrative Agent in its
commercially reasonable judgment, the Account is owing by an account
debtor that has commenced a voluntary
9
case under the federal bankruptcy laws, as now constituted or hereafter
amended, or made an assignment for the benefit of creditors, or if a
decree or order for relief has been entered by a court having jurisdiction
in the premises in respect to such account debtor in an involuntary case
under the federal bankruptcy laws, as now constituted or hereafter
amended, or if any other petition or other application for relief under
the federal bankruptcy laws has been filed by or against the account
debtor, or if such account debtor has failed, suspended business, ceased
to be solvent, or consented to or suffered a receiver, trustee, liquidator
or custodian to be appointed for it or for all or a significant portion of
its assets or affairs; or
(viii) the sale is to an account debtor outside the continental
United States, unless the sale is (A) on letter of credit, guaranty or
acceptance terms, or subject to credit insurance, in each case acceptable
to the Administrative Agent in its commercially reasonable judgment, or
(B) otherwise approved by and acceptable to the Administrative Agent in
its commercially reasonable judgment; or
(ix) the sale to the account debtor is on a xxxx-and-hold,
guaranteed sale, sale-and-return, sale on approval or consignment basis or
made pursuant to any other written agreement providing for repurchase or
return; or
(x) the Administrative Agent believes, in its commercially
reasonable judgment, that collection of such Account is insecure or that
such Account may not be paid by reason of the account debtor's financial
inability to pay; or
(xi) the account debtor is the United States of America or any
department, agency or instrumentality thereof, unless the applicable
Borrower duly assigns its rights to payment of such Account to the
Administrative Agent pursuant to the Assignment of Claims Act of 1940, as
amended (31 U.S.C. ss. 3727 et seq.); or
(xii) the goods giving rise to such Account have not been shipped
and delivered to and accepted by the account debtor or its designee or the
services giving rise to such Account have not been performed by or on
behalf of the applicable Credit Party and accepted by the account debtor
or its designee or the Account otherwise does not represent a final sale;
or
(xiii) the Accounts owing by a particular account debtor exceed a
credit limit as to that account debtor determined by the Administrative
Agent, in its commercially reasonable judgment, to the extent such
Accounts owing by the particular account debtor exceed such limit; or
(xiv) the Administrative Agent does not have a first priority,
perfected security interest in the Account; or
(xv) the Administrative Agent, in the exercise of its commercially
reasonable judgment, determines it to be ineligible.
In addition to the foregoing, Eligible Accounts Receivable shall include
such Accounts as the Borrowers shall request and that the Administrative Agent
approves in advance, in writing and in its commercially reasonable judgment.
"Eligible In Transit Inventory" shall mean Inventory of any Credit Party
recorded on the books and records of such Credit Party in the ordinary course of
the business operations of such Credit Party valued on a first in first out
basis at the lower of (a) the fair market value of such Inventory, or (b) the
cost
10
charged by suppliers which are not Affiliates of any Credit Party, which
Inventory satisfies all of the requirements of Eligible Inventory other than
items (i)(c) and (v) thereof, and which Inventory satisfies each of the
following additional requirements:
(i) the seller of such Inventory received a documentary Letter of Credit
with respect to the invoiced cost of such inventory (including, where
applicable, any related freight or insurance fees);
(ii) title to such Inventory has passed from the seller of such Inventory
to a Credit Party;
(iii) such Inventory has been delivered into the possession of an industry
recognized common carrier for shipment overseas and has left its country of
origin;
(iv) a xxxx of lading representing such Inventory that names the
Administrative Agent (or such other Person as the Administrative Agent may
require by notice to the Parent) as consignee has been received by or on behalf
of the applicable Credit Party;
(v) such Inventory is fully insured pursuant to policies of insurance that
have been assigned to the Administrative Agent in accordance with the provisions
of Section 7.10; and
(vi) such Inventory has not been in transit for longer than ninety days;
provided, however, that (A) the aggregate amount of Eligible In Transit
Inventory shall be computed net of such reserves for slow moving and other
ineligible inventory as the Administrative Agent shall reasonably deem
appropriate, (B) the Administrative Agent may in its reasonable credit judgment
exclude particular items of Inventory from the definition of Eligible In Transit
Inventory and may impose additional and/or more restrictive eligibility or
valuation criteria than those set forth above as preconditions for any item of
Inventory to be deemed to be Eligible In Transit Inventory hereunder, and (C)
such Inventory deemed to be Eligible In Transit Inventory at any one point in
time but thereafter fails to satisfy the above requirements may be excluded or
may otherwise be excluded by the Administrative Agent in its commercially
reasonable judgment at a future point in time.
"Eligible Inventory" shall mean
(i) the aggregate gross amount of each Credit Party's Inventory consisting
of raw materials and finished goods, valued at the lower of cost (on a FIFO
basis) or market, which
(A) is owned solely by such Credit Party and with respect to which
such Credit Party has good, valid and marketable title (and , for
avoidance of doubt, Eligible Inventory will not include any "Inventoried
Customer Items" (as defined in any ISA),
(B) is subject to a valid, enforceable and first priority Lien in
favor of Administrative Agent;
(C) is located in the United States; and
(D) is not obsolete or slow moving and for which a markdown reserve
has not been made, and which otherwise conforms to the warranties
contained herein and which at all times continues to be acceptable to the
Administrative Agent in its commercially reasonable judgment,
(ii) less Inventory consisting of supplies,
11
(iii) less markdown reserves,
(iv) less any goods returned or rejected by such Credit Party's customers
for which a credit has not yet been issued,
(v) less goods in transit to third parties,
(vi) less damaged Inventory;
(vii) less a reserve equal to the amount of all sums owed or owing by such
Credit Party to any of those vendors holding purchase money Liens on any
Inventory of such Credit Party on the Closing Date, as more particularly
described in Schedule 1.1C, unless the Borrowers have obtained an agreement of
such vendor (a "Subordinating Vendor") that its Lien on such Inventory shall be
subordinate to the Lien of the Administrative Agent thereon, in a form and
substance satisfactory to the Administrative Agent in its commercially
reasonable judgment (such agreements herein called "Vendor Subordination
Agreements");
(viii) less any reserves required by the Administrative Agent in its
commercially reasonable judgment for special order goods and market value
declines,
(ix) less any Inventory which is held by any Credit Party pursuant to
consignment, sale or return, sale on approval or similar arrangement, and
(x) less any Inventory that the Administrative Agent determines in its
commercially reasonable judgment to be ineligible.
Without limitation of the foregoing, to the extent that any Inventory is
at any time situated on real property that is not owned by a Credit Party,
including, for this purpose any real property (A) rented or leased by a Credit
Party from a third party, including a Customer or the landlord of a Customer,
(B) owned and operated by a warehouseman for use by a Credit Party (among
others), (C) owned and operated by any filler, processor, packer or finisher of
Inventory (the foregoing called, collectively, "Third Party Property"), then (1)
with respect to Inventory located at Third Party Property on the Closing Date,
such Inventory will be ineligible hereunder ninety (90) days after the Closing
Date unless, within such period and (2) with respect to Inventory located at
Third Party Property pursuant to a Customer Agreement, lease agreement,
warehouseman agreement or filler, processor, packer or finisher agreement
entered into on or after the Closing Date, such Inventory will be ineligible
hereunder unless, either (A) the Credit Parties have obtained Acknowledgement
Agreements, in form and substance satisfactory in the commercially reasonable
judgment of the Administrative Agent in regard thereto, and for each
Acknowledgement Agreement delivered to the Administrative Agent that was in
effect under the Existing Credit Agreement (or any credit agreement prior to the
Existing Credit Agreement), a letter, in form and substance satisfactory to the
Administrative Agent, from the Customer or the landlord party to such
Acknowledgement Agreement acknowledging that such Acknowledgement Agreement is
still in effect with respect to the Loans and this Agreement, and, to the extent
any such Inventory is on consignment (as defined in the UCC), such Credit Party
has obtained the "consignment notice" UCC financing statements referenced
Section 5(h) of the Security Agreement in regard thereto; or, (B) in lieu of the
foregoing, the Administrative Agent has imposed reserves on borrowing
availability sufficient, in the commercially reasonable judgment of the
Administrative Agent, to protect the interests of the Lenders in regard thereto
(the foregoing called "Inventory Protective Measures"). In addition to the
foregoing, Eligible Inventory shall include such items of such Credit Party's
Inventory as such Credit Party shall request and that the Administrative Agent
approves in advance, in writing and in its commercially reasonable judgment.
12
"Equipment" shall mean all of each Credit Party's present and hereafter
acquired machinery, machine tools, motors, equipment, furniture, furnishings,
fixtures, vehicles (including motor vehicles and trailers not subject to a
certificate of title), tools, parts, goods (other than consumer goods, farm
products, or Inventory), wherever located, including, (a) any interest of a
Credit Party in any of the foregoing, and (b) all attachments, accessories,
accessions, replacements, substitutions, additions and improvements to any of
the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean any (i) corporation which is or was at any
time a member of the same controlled group of corporations (within the meaning
of Section 414(b) of the Internal Revenue Code) as the Credit Parties or any
Subsidiary; (ii) partnership or other trade or business (whether or not
incorporated) at any time under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with the Credit Parties or any Subsidiary;
and (iii) member of the same affiliated service group (within the meaning of
Section 414(m) of the Internal Revenue Code) as the Parent or any of its
Subsidiaries, any corporation described in clause (i) above, or any partnership
or trade or business described in clause (ii) above.
"Event of Default" shall have the meaning given to such term in Article
11.
"Excess Availability", as of any day, shall mean that amount by which (A)
the lesser of (1) the Revolving Credit Committed Amount on such day or (2) the
Borrowing Base, as then most recently delivered pursuant to Section 7.1(e),
exceeds (B) the total amount of Loans and Letter of Credit Obligations
outstanding on such date.
"Excess Funding Guarantor" shall have the meaning given o such term in
Section 15.7.
"Excess Payment" shall have the meaning given o such term in Section 15.7.
"Excluded Taxes" shall have the meaning given to such term in Section 2.6.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fee Letter" shall mean the letter agreement, dated May 3, 2005, by and
between the Administrative Agent and the Parent regarding the fees to be paid by
the Parent to the Administrative Agent, as it may be supplemented, modified or
amended from time to time.
"Fees" shall mean, collectively, the Administrative Agent's Fees, the
Lenders' Fees, the Unused Line Fee, the Letter of Credit Fees and the Issuing
Bank Fees payable hereunder.
"Financials" shall have the meaning given to such term in Section 6.6.
"Fixed Charge Coverage Ratio" shall mean, as at any date, the ratio of
(i)(A) Consolidated EBITDA for the period of twelve consecutive fiscal months
ending on or most recently ended prior to
13
such date minus (B) Unfinanced Capital Expenditures made during such period to
(ii) Consolidated Fixed Charges for such period.
"Foreign Lender" shall have the meaning given to such term in Section
2.6(a).
"Foreign Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person which is not a Domestic Subsidiary.
"Funded Indebtedness" shall mean, with respect to any Person, without
duplication, (i)(a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) the principal portion of all
obligations of such Person under Capital Leases, (f) the maximum amount of all
letters of credit issued or bankers' acceptances facilities created for the
account of such Person and, without duplication, all drafts drawn thereunder (to
the extent unreimbursed) and (g) all preferred Capital Stock issued by such
Person and required by the terms thereof to be redeemed, or for which mandatory
sinking fund payments are due, by a fixed date, and (ii) all Indebtedness of
another Person of the type referred to in clause (i) above secured by (or for
which the holder of such Funded Indebtedness has an existing right, contingent
or otherwise, to be secured by) any Lien on, or payable out of the proceeds of
production from, property owned or acquired by such Person, whether or not the
obligations secured thereby have been assumed, (iii) all guaranties of such
Person with respect to Indebtedness of the type referred to in clause (i) above
of another Person and (iv) Indebtedness of the type referred to in clause (i)
above of any partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with respect
thereto. Notwithstanding anything in this definition to the contrary, operating
leases shall not be deemed to be Funded Indebtedness.
"Funding Bank" shall have the meaning given to such term in Section 4.7.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, as in effect on the date hereof and, in respect of the Credit
Parties, applied on a consistent basis with the Financials.
"Governmental Authority" shall mean any federal, state, local or foreign
court or governmental agency, authority, instrumentality or regulatory body.
"Guaranteed Obligations" shall have the meaning given to such term in
Section 15.1.
"Guarantor Subordinated Debt" shall have the meaning given to such term in
Section 15.9.
"Guarantor" and "Guarantors" shall have the meanings given to such term in
the preamble of this Agreement.
"Hedging Agreements" shall mean any Interest Rate Protection Agreement or
other interest rate protection agreement, foreign currency exchange agreement,
commodity purchase or option agreement or other interest or exchange rate or
commodity price hedging agreements.
14
"Highest Lawful Rate" shall mean, at any given time during which any
Obligations shall be outstanding hereunder, the maximum nonusurious interest
rate, if any, that at any time or from time to time may be contracted for,
taken, reserved, charged or received on the indebtedness under this Agreement,
under the laws of the Commonwealth of Massachusetts or the State of Georgia (or
the law of any other jurisdiction whose laws may be mandatorily applicable
notwithstanding other provisions of this Agreement and the other Loan
Documents), or under applicable federal laws which may presently or hereafter be
in effect and which allow a higher maximum nonusurious interest rate than under
Massachusetts, Georgia or such other jurisdiction's law, in any case after
taking into account, to the extent permitted by applicable law, any and all
relevant payments or charges under this Agreement and any other Loan Documents
executed in connection herewith, and any available exemptions, exceptions and
exclusions.
"Indebtedness" shall mean, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (d) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (e) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (f) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (g) all guaranties of such Person with
respect to Indebtedness of the type referred in this definition of another
Person, (h) the principal portion of all obligations of such Person under
Capital Leases, (i) all obligations of such Person under Interest Rate
Protection Agreements, (j) the maximum amount of all letters of credit issued or
bankers' acceptances facilities created for the account of such Person and,
without duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person and required by the terms
thereof to be redeemed, or for which mandatory sinking fund payments are due, by
a fixed date, (l) the principal portion of all obligations of such Person under
off-balance sheet financing arrangements and (m) the Indebtedness of any
partnership or unincorporated joint venture in which such Person is a general
partner or a joint venturer in which such Person is legally obligated or has a
reasonable expectation of being liable with respect thereto.
"Independent Accountant" shall mean a firm of independent public
accountants of nationally recognized standing selected by the Board of Directors
of the Parent, which is "independent" as that term is defined in Rule 2-01 of
Regulation S-X promulgated by the Securities and Exchange Commission.
"Interest Rate Protection Agreement" shall mean any interest rate
protection agreement, foreign currency exchange agreement, commodity purchase or
option agreement or other interest or exchange rate or commodity price hedging
agreements between any Borrower and any Lender, or any affiliate of a Lender.
"Internal Revenue" shall mean the Internal Revenue Service and any
successor agency.
"Internal Revenue Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute thereto and all rules and
regulations promulgated thereunder.
15
"Inventory" shall mean all of each Credit Party's inventory, including (i)
all raw materials, work in process, finished goods, parts, components,
assemblies, supplies and materials sold, used or consumed in such Credit Party's
business; (ii) all goods, wares and merchandise, finished or unfinished, held
for sale or lease or leased or furnished or to be furnished under contracts of
service; and (iii) all goods returned to or repossessed by such Credit Party.
"Investment" in any Person shall mean (i) the acquisition (whether for
cash, property, services, assumption of Indebtedness, securities or otherwise,
but exclusive of the acquisition of inventory, supplies, equipment and other
property or assets used or consumed in the ordinary course of business of the
applicable Credit Party or its Subsidiary and Consolidated Capital Expenditures
not otherwise prohibited hereunder) of assets, shares of Capital Stock, bonds,
notes, debentures, partnership interests, joint ventures or other ownership
interests or other securities of such Person, (ii) any deposit (other than
deposits constituting a Permitted Lien) with, or advance, loan or other
extension of credit (other than sales of inventory on credit in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms and sales on credit of the type described in clauses (c) or (d) of
Section 9.3) to, such Person or (iii) any other capital contribution to or
investment in such Person, including any obligation incurred for the benefit of
such Person. In determining the aggregate amount of Investments outstanding at
any particular time, (a) the amount of any Investment represented by a guaranty
shall be taken at not less than the maximum principal amount of the obligations
guaranteed and still outstanding; (b) there shall be deducted in respect of each
such Investment any amount received as a return of capital (but only by
repurchase, redemption, retirement, repayment, liquidating dividend or
liquidating distribution); (c) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise; and (d) there shall not be deducted from or
added to the aggregate amount of Investments any decrease or increases, as the
case may be, in the market value thereof. Without limitation of the foregoing,
the term "Investments" shall include Acquisitions.
"ISA" shall mean an integrated supply agreement between a Credit Party, as
supplier, and a Customer, as recipient, of certain goods and services.
"ISA Site" shall mean the location of a Customer party to an ISA with a
Credit Party at which Inventory identified to such ISA is located.
"Issuing Banks" shall mean with respect to any Letters of Credit, Wachovia
and Bank of America.
"Issuing Bank Fees" shall have the meaning given to such term in Section
4.5(b).
"Landlord Agreement" shall mean a Landlord Waiver and Consent Agreement,
substantially in the form of Exhibit C (or such other form as shall be
acceptable to the Administrative Agent in its commercially reasonable judgment),
between a Credit Party's landlord and the Administrative Agent, acknowledging
and agreeing, among other things, (i) that any Liens of such Landlord on any of
the property of such Credit Party or any Subsidiary shall be subordinate to the
Liens of the Administrative Agent thereon, on terms and conditions acceptable to
the Administrative Agent, in its commercially reasonable judgment, and (ii) to
permit the Administrative Agent access to the property for the purposes of
exercising its remedies under the Security Agreement. The term "Landlord
Agreement," when used in respect of fillers, processors, packers or finishers,
shall mean a Landlord Waiver and Consent Agreement augmented as appropriate to
accommodate the special and more limited interests of such third parties.
"Leases" shall have the meaning given to such term in Section 6.19.
16
"Lender" shall have the meaning given to such term in the preamble of this
Agreement. The term "Lender" shall also include the Swingline Lender, as
appropriate.
"Lenders' Fees" shall mean the non-refundable fees payable to each of the
Lenders as set forth in each of the Lender's respective fee letters with the
Administrative Agent.
"Letter of Credit Committed Amount" shall have the meaning given to such
term in Section 3.1.
"Letter of Credit Documents" shall mean, with respect to any Letter of
Credit, such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in application or
applicable only to such Letter of Credit) governing or providing for (i) the
rights and obligations of the parties concerned or at risk or (ii) any
collateral security for such obligations.
"Letter of Credit Fee" shall have the meaning given to such term in
Section 4.5(a).
"Letter of Credit Obligations" shall mean, at any time, the sum of (i) the
aggregate undrawn amount of all Letters of Credit outstanding at such time, plus
(ii) the aggregate amount of all drawings under Letters of Credit for which the
Issuing Banks have not at such time been reimbursed, plus (iii) without
duplication, the aggregate amount of all payments made by each Lender to the
Issuing Banks with respect to such Lender's participation in Letters of Credit
as provided in Section 3.3 for which the Borrowers have not at such time
reimbursed the Lenders, whether by way of a Revolving Loan or otherwise.
"Letters of Credit" shall mean all letters of credit (whether documentary
or stand-by and whether for the purchase of inventory, equipment or otherwise)
issued by the Issuing Banks for the account of the Borrowers pursuant to this
Agreement, and all amendments, renewals, extensions or replacements thereof.
"Leverage Ratio" shall mean as of the last day of any fiscal quarter, the
ratio of (i) Consolidated Funded Debt as of such day to (ii) Consolidated EBITDA
for the period of twelve (12) consecutive fiscal months ending on or most
recently ended prior to such day.
"LIBO Rate" shall mean, with respect to any LIBOR Borrowing for any LIBOR
Interest Period, the rate per annum (rounded upwards, as necessary, to the
nearest 1/100 of 1%), equal to the British Bankers Association LIBOR Rate ("BBA
LIBOR") as published by Reuters (or other commercially available source
providing quotations of BBA LIBOR as designated by the Lender from time to time
for purposes of providing quotations of interest rates applicable to U.S. dollar
deposits in the London interbank market) at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such LIBOR Interest Period,
as the rate for U.S. dollar deposits with a maturity comparable to such LIBOR
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such LIBOR Borrowing for such
LIBOR Interest Period shall be the average of the rates at which U.S. dollar
deposits of $5,000,000, and for a maturity comparable to such LIBOR Interest
Period, are offered by four major banks in the London interbank market as
selected by the Lender in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such LIBOR Interest Period.
"LIBOR" when used in reference to any Loan, refers to whether such Loan is
bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
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"LIBOR Interest Period" shall mean with respect to any LIBOR Loan, the
period commencing on the date of such Loan and ending on the numerically
corresponding day in the calendar month that is one, two, three or six months
thereafter, as the Parent may elect; provided, that (i) if any LIBOR Interest
Period would end on a day other than a Business Day, such LIBOR 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 LIBOR Interest Period shall end on the next preceding Business Day and (ii)
any LIBOR Interest Period that commences on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
last calendar month of such LIBOR Interest Period) shall end on the last
Business Day of the last calendar month of such LIBOR Interest Period. For
purposes hereof, the date of an advance initially shall be the date on which
such advance is made and thereafter shall be the effective date of the most
recent conversion or continuation of such advance. Notwithstanding the
foregoing, if any LIBOR Interest Period for any advance would otherwise end
after the Maturity Date, such LIBOR Interest Period shall end on the Maturity
Date.
"LIBOR Loan" shall mean a Loan bearing interest based at a rate determined
by reference to the Adjusted LIBO Rate.
"Lien(s)" shall mean any lien, claim, charge, pledge, security interest,
deed of trust, mortgage, or other encumbrance.
"Loan" or "Loans" shall mean the Revolving Loans (or a portion of any
Revolving Loan), the Swingline Loans, individually or collectively, as
appropriate.
"Loan Documents" shall mean, collectively, this Agreement, the Notes, the
Letter of Credit Documents, the Security Documents and all other documents,
agreements, instruments and certificates executed and delivered by any Credit
Party in connection herewith or therewith, as the same may be modified, amended,
extended, restated or supplemented from time to time. The term "Loan Documents"
shall not include, however, Interest Rate Protection Agreements.
"Lockbox" shall have the meaning given to such term in Section 2.3(b)(i).
"Lockbox Account" shall have the meaning given to such term in Section
2.3(b)(ii)(A).
"Lockbox Agreement" shall have the meaning given to such term in Section
2.3(b)(ii).
"Lockbox Bank" shall have the meaning given to such term in Section
2.3(b)(i).
"Material Adverse Change" shall mean a material adverse change in (a) the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of the Credit Parties taken as a whole, (b)
the Collateral, (c) the ability of either Borrower, individually, or the Credit
Parties, taken as a whole, to perform its or their respective obligations under
the Loan Documents, or (d) the rights and remedies of the Lenders hereunder; in
each case, as determined by the Administrative Agent in its commercially
reasonable judgment.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of the Credit Parties taken as a whole, (b)
the Collateral, (c) the ability of either Borrower, individually, or the Credit
Parties, taken as a whole, to perform its or their respective obligations under
the Loan Documents, or (d) the rights and remedies of the Lenders hereunder; in
each case, as determined by the Administrative Agent in its commercially
reasonable judgment.
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"Maturity Date" shall mean July 18, 2010.
"Merchandise Returns" shall mean any of the products sold by the Credit
Parties or any of their Subsidiaries that are returned.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA and (i) which is, or within the immediately
preceding six (6) years was, contributed to by any Credit Party, any Subsidiary
or any ERISA Affiliate or (ii) with respect to which any Credit Party or any
Subsidiary may incur any liability.
"Net Cash Proceeds" shall mean the aggregate cash proceeds received by any
Credit Party in respect of any Asset Disposition, net of (a) direct costs
(including legal, accounting and investment banking fees, and sales commissions)
and (b) taxes paid or payable as a result thereof; it being understood that "Net
Cash Proceeds" shall include any cash received upon the sale or other
disposition of any non-cash consideration received by a Credit Party in any
Asset Disposition.
"Note" or "Notes" shall mean the Revolving Notes and the Swingline Note,
individually or collectively, as appropriate.
"Notice of Borrowing" shall have the meaning given to such term in Section
2.1(d)(i).
"Notice of Extension/Conversion" shall mean a written request signed by a
Authorized Officer for the conversion of Base Rate Loans into LIBOR Loans or for
the continuation of an existing LIBOR Loan for an additional LIBOR Interest
Period in accordance with Section 2.9, in substantially the form of Exhibit I.
"Obligations" shall mean the Loans, any other loans and advances or
extensions of credit made or to be made by any Lender to any Credit Party, or to
others for any Credit Party's account in each case pursuant to the terms and
provisions of this Agreement, together with interest thereon (including interest
which would be payable as post-petition interest in connection with any
bankruptcy or similar proceeding) and, including any reimbursement obligation or
indemnity of the Credit Parties on account of Letters of Credit and all other
Letter of Credit Obligations, all Cash Management Obligations, and all
indebtedness, fees, liabilities and obligations which may at any time be owing
by any Credit Party to any Lender, the Issuing Banks, the Cash Management Bank,
the Administrative Agent or any of their Affiliates, in each case, pursuant to
this Agreement or any other Loan Document, whether now in existence or incurred
by a Credit Party from time to time hereafter, whether unsecured or secured by
pledge, Lien upon or security interest in any of a Credit Party's assets or
property or the assets or property of any other Person, whether such
indebtedness is absolute or contingent, joint or several, matured or unmatured,
direct or indirect and whether such Credit Party is liable to such Lender for
such indebtedness as principal, surety, endorser, guarantor or otherwise.
"Obligations" shall also include any other Indebtedness owing to any Lender by
any Credit Party under this Agreement and the other Loan Documents, any Credit
Party's liability to any Lender pursuant to this Agreement as maker or endorser
of any promissory note or other instrument for the payment of money, any
Borrower's liability to any Lender pursuant to this Agreement or any other Loan
Document under any instrument of guaranty or indemnity, or arising under any
guaranty, endorsement or undertaking which any Lender may make or issue to
others for any such Credit Party's account pursuant to this Agreement, including
any accommodation extended with respect to applications for Letters of Credit,
and all liabilities and obligations owing from any Borrower to any Lender, or
any affiliate of a Lender, arising under Interest Rate Protection Agreements
entered into for the purpose of hedging interest rate risk under this Agreement
and the other Loan Documents. "Obligations" shall also include, to the extent
not otherwise expressly provided above and in any event, any indebtedness
arising hereunder or under any Loan
19
Document to the Administrative Agent, the Swingline Lender or Bank of America,
individually, including all indebtedness arising under or in respect of the
provision of any Cash Management Services.
"Other Taxes" shall have the meaning given to such term in Section 2.6(c).
"Overadvances" shall have the meaning given to such term in Section
2.1(f).
"PBGC" shall mean the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.
"Permitted Acquisition" shall mean:
(a) any Acquisition which is approved for consideration hereunder as a
"Permitted Acquisition" by Administrative Agent and which meets each of the
following conditions:
(i) at least fifteen (15) days prior to the intended closing date of
such Acquisition, the Administrative Agent shall have received a report
from the Parent setting forth all financial and related information
concerning the Acquisition, in such form, manner and detail as then
reasonably requested;
(ii) on or prior to the date of the closing of the Acquisition, the
board of directors of the Acquisition Target (as hereinafter defined)
shall have approved the Acquisition; i.e., it is not a "hostile"
Acquisition;
(iii) the Person, operating assets or line of business acquired
(herein, the "Acquisition Target"), must be in substantially similar line
of business as conducted (or proposed to be conducted) by the Parent and
its Domestic Subsidiaries as of the Closing Date or a business reasonably
related thereto;
(iv) no Event of Default or Default shall exist at the time of such
Acquisition or shall result from, or be caused by, its consummation;
(v) the Administrative Agent shall have received at least three (3)
Business Days prior to the intended closing date of such Acquisition or
the date of their intended execution (if required or permitted to be
executed prior to such Acquisition being consummated, whichever is the
earlier), copies of all documents, instruments and agreements to be
executed by the Parent or any of its Subsidiaries evidencing, governing or
relating to such Acquisition (the "Acquisition Documents"), and the
Administrative Agent, in the exercise of its commercially reasonable
judgment, shall be satisfied therewith and with any change in the
organization structure of the Parent and its Subsidiaries resulting
therefrom;
(vi) contemporaneously with the closing of such Acquisition, the
Administrative Agent shall have received (A) such documents and
instruments as may be necessary to grant or confirm to the Administrative
Agent a Lien on or security interest in the equity interests, operating
assets or line of business so acquired subject to no other Liens, except
Permitted Liens, and (B) if the Person is acquired by, and not merged
into, a Credit Party, and the Person is a Domestic Subsidiary, the joinder
of such Person as an Guarantor pursuant to Section 7.16;
(vii) at the time of the closing of such Acquisition, the Parent
shall deliver to the Administrative Agent a certificate of an Authorized
Officer demonstrating to the satisfaction of the Administrative Agent the
Credit Parties' compliance with all financial covenants set forth in
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Article 8 then in effect, if any, on a pro forma basis, giving effect to
such Acquisition as of the last day of the then most recently ended fiscal
quarter of the Parent for which financial reports are then available, on
an historical basis, for the four (4) consecutive fiscal quarters then
ending, as reflected on restated financial statements (including income
statements, balance sheets and cash flow summaries) for such fiscal
period;
(viii) at the time of closing of such Acquisition, the Parent must
also be able to demonstrate to the Administrative Agent's satisfaction
that, on a pro forma basis, (A) subject to clause (x) below, after giving
effect to such Acquisition and any Loans or Letters of Credit associated
therewith, Average Excess Availability shall be at least Ten Million
Dollars ($10,000,000) and (B) after factoring in the Acquisition Target's
share as a Subsidiary of the Parent of historical overhead, debt service
and similar costs allocated to the Parent's Subsidiaries over the period
of four (4) consecutive fiscal quarters of the Parent most recently ended
prior to the Acquisition for which financial statements are available, the
Parent and its consolidated Subsidiaries have a Leverage Ratio of not more
than 4.75:1;
(ix) the aggregate amount of Revolving Loans applied to the
consideration paid by the Parent or any Subsidiary for such Acquisition,
(the "Total Acquisition Loans") shall not exceed for all Permitted
Acquisitions Fifteen Million Dollars ($15,000,000) during any fiscal year;
provided that there shall be no limit on Total Acquisition Loans if, on a
pro forma basis, after giving effect to such Acquisition and any Loans or
Letters of Credit associated therewith and subject to clause (x) below,
Average Excess Availability shall be at least Twenty Million Dollars
($20,000,000); and
(x) no Accounts or Inventory of any Acquisition Target shall be
included as Eligible Accounts Receivable or Eligible Inventory hereunder
unless approved by the Administrative Agent following such field audit and
other diligence as it shall deem appropriate; or
(b) any other Acquisition which has been approved by the Required Lenders.
"Permitted Indebtedness" shall mean:
(i) Indebtedness to the Lenders with respect to the Loans, the
Letters of Credit or otherwise, pursuant to the Loan Documents;
(ii) trade payables incurred in the ordinary course of a Credit
Party's business;
(iii) purchase money Indebtedness (including Capital Leases)
hereafter incurred by the Credit Parties or any of their Subsidiaries to
finance the purchase of Equipment; provided that (A) the total of all such
Indebtedness for all such Persons, taken together, shall not exceed an
aggregate principal amount of Five Million Dollars ($5,000,000) at any one
time outstanding (including any purchase money Indebtedness incurred to
finance Equipment existing on Closing Date and referred to in clause (v)
immediately below); (B) such Indebtedness when incurred shall not exceed
the purchase price of the Equipment so financed; and (C) no such
Indebtedness shall be refinanced for a principal amount in excess of the
principal balance outstanding thereon at the time of such refinancing;
(iv) obligations of a Credit Party in respect of Hedging Agreements
entered into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;
21
(v) Indebtedness described on Schedule 1.1C and any refinancings of
such Indebtedness; provided that the aggregate principal amount of such
Indebtedness is not increased, the scheduled maturity dates of such
Indebtedness are not shortened and such refinancing is on terms and
conditions no more restrictive than the terms and conditions of the
Indebtedness being refinanced;
(vi) Indebtedness acquired or incurred in connection with any
Permitted Acquisition; and
(vii) other, unsecured Indebtedness, not otherwise permitted in
clauses (i) through (vi) above, not to exceed, however, in aggregate
amount outstanding at any one time, the sum of Five Million Dollars
($5,000,000).
"Permitted Investments" shall mean:
(i) Cash Equivalents;
(ii) interest-bearing demand or time deposits (including
certificates of deposit) which are insured by the Federal Deposit
Insurance Corporation ("FDIC") or a similar federal insurance program;
provided, however, that the Credit Parties may, in the ordinary course of
their respective businesses, maintain in their disbursement accounts from
time to time amounts in excess of then applicable FDIC or other program
insurance limits;
(iii) Investments existing on the Closing Date and set forth on
Schedule 1.1D;
(iv) advances to officers, directors and employees for expenses
incurred or anticipated to be incurred in the ordinary course in an
aggregate amount outstanding not in excess of $50,000 at any time;
(v) loans and Investments by any Credit Party in any other Credit
Party;
(vi) investments (including debt obligations) received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(vii) Permitted Acquisitions; and
(viii) other investments, not described in clauses (i) through (vii)
above, which may be made at any time that no Default or Event of Default
exists, not to exceed, however, in aggregate amount subsequent to the
Closing Date, Five Hundred Thousand Dollars ($500,000).
"Permitted Liens" shall mean:
(i) Liens granted to the Administrative Agent or any Lender by the
Credit Party pursuant to any Security Document;
(ii) Liens on fixed assets securing purchase money Indebtedness
(including Capital Leases) to the extent permitted under Section 9.2;
provided that any such Lien attaches to such assets concurrently with or
within thirty (30) days after the acquisition thereof and only to the
22
assets to be acquired or to other fixed assets (but, in the latter case,
any such Lien shall be subject and subordinate to the Lien of the
Administrative Agent thereon);
(iii) Liens of warehousemen, mechanics, materialmen, workers,
repairmen, fillers, packagers, processors, common carriers, landlords and
other similar Liens arising by operation of law or otherwise, not waived
in connection herewith, for amounts that are not yet due and payable or
which are being diligently contested in good faith by the relevant Credit
Party by appropriate proceedings; provided that in any such case an
adequate reserve is being maintained by such Credit Party for the payment
of same;
(iv) attachment or judgment Liens which individually or in the
aggregate would not result in an Event of Default;
(v) Liens for taxes, assessments or other governmental charges not
yet due and payable or which are being diligently contested in good faith
by a Credit Party by appropriate proceedings; provided that in any such
case an adequate reserve is being maintained by such Credit Party for the
payment of same in accordance with GAAP;
(vi) zoning ordinances, easements, covenants and other customary
restrictions on the use of real property and other title exceptions that
do not interfere in any material respect with the ordinary course of
business;
(vii) deposits or pledges to secure obligations under workmen's
compensation, social security or similar laws, or under unemployment
insurance;
(viii) deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, regulatory or statutory
obligations, surety and appeal bonds and other obligations of like nature
arising in the ordinary course of business;
(ix) Liens on inventory securing purchase money Indebtedness, to the
extent existing on the Closing Date and disclosed on Schedule 1.1C; and
(x) other Liens (if any) listed on Schedule 1.1B.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, entity, party or government (including
any division, agency or department thereof), and, as applicable, the successors,
heirs and assigns of each.
"Plan" shall mean any employee benefit plan, program or arrangement,
whether oral or written, maintained or contributed to by any Credit Party or any
Subsidiary, or with respect to which any Credit Party or any such Subsidiary may
incur liability.
"Pledge Agreement" shall mean the Amended and Restated Pledge Agreement,
of even date herewith, between the Administrative Agent and the Credit Parties,
in the form of Exhibit D.
"Pledged Collateral" shall have the meaning given to such term in the
Pledge Agreement.
"Prime Rate" shall mean the rate of interest per annum publicly announced
from time to time by Bank of America, N.A., as its prime rate for commercial
loans in effect at its principal office in Boston, Massachusetts, which rate is
not necessarily the lowest rate charged by Bank of America, N.A. to its most
23
preferred customers; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"Proprietary Rights" shall have the meaning given to such term in Section
6.17.
"Pro Rata Share" shall have the meaning given to such term in Section
15.7.
"Protective Advances" shall have the meaning given to such term in Section
2.1(f).
"Real Estate" shall mean any real property owned or leased by the Credit
Parties described in Schedule 6.19, together with all Structures thereon.
"Reportable Event" shall mean any of the events described in Section 4043
of ERISA and the regulations thereunder.
"Required Lenders" shall mean those Lenders having Revolving Loans, Letter
of Credit Obligations and unused Revolving Credit Commitments representing more
than 50% of the sum of the aggregate Revolving Loans, Letter of Credit
Obligations and unused Revolving Credit Commitments of all Lenders at such time;
provided that if there is more than one Lender, "Required Lenders" shall consist
of at least two Lenders.
"Restricted Payment" shall mean (i) any cash dividend or other cash
distribution, direct or indirect, on account of any shares of any class of
Capital Stock of any Credit Party or any Subsidiary, as the case may be, now or
hereafter outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of any Credit Party or any Subsidiary now
or hereafter outstanding by such Credit Party or any Subsidiary, as the case may
be, except for any redemption, retirement, sinking funds or similar payment
payable solely in such shares of that class of stock or in any class of stock
junior to that class, (iii) any cash payment made to redeem, purchase,
repurchase or retire, or to obtain the surrender of, any outstanding warrants,
options or other rights to acquire any shares of any class of Capital Stock of
any Credit Party or any Subsidiary now or hereafter outstanding, or (iv) any
payment to any Affiliate of any Credit Party, except to the extent otherwise
expressly permitted in this Agreement.
"Retiree Health Plan" shall mean an "employee welfare benefit plan" within
the meaning of Section 3(1) of ERISA that provides benefits to persons after
termination of employment, other than as required by Section 601 of ERISA.
"Revolving Credit Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make its portion of the Revolving Loans in a
principal amount up to such Lender's Applicable Percentage of the Revolving
Credit Committed Amount.
"Revolving Credit Committed Amount" shall mean the aggregate revolving
credit line extended by the Lenders to the Borrowers for Revolving Loans,
Swingline Loans and Letters of Credit pursuant to and in accordance with the
terms of this Agreement, in an amount up to Seventy-Five Million Dollars
($75,000,000), as such revolving credit line may be increased in accordance with
Section 2.1(e) or reduced in accordance with Section 2.2(c).
"Revolving Loans" shall have the meaning given to such term in Section
2.1(b)(i)) and shall include Revolving Loans made as Base Rate Loans (including
Overadvances and Protective Advances) and Revolving Loans made as LIBOR Loans.
24
"Revolving Notes" shall have the meaning given to such term in Section
2.1(c).
"Security Agreement" shall mean the Amended and Restated Security
Agreement, of even date herewith, between the Administrative Agent and the
Credit Parties, in the form of Exhibit E.
"Security Documents" shall mean, collectively, the Pledge Agreement, the
Security Agreement, Trademark Security Agreement, any Acknowledgment Agreement
and any Lockbox Agreement.
"Sole Lead Arranger" shall mean Banc of America Securities, LLC.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which any Lender is subject with respect to the
Adjusted LIBO Rate, for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D. LIBOR
Borrowings shall be deemed to constitute eurocurrency funding and to be subject
to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Structures" shall mean all plants, offices, manufacturing facilities,
warehouses, administration buildings and related facilities of the Credit
Parties located on the Real Estate described on Schedule 6.19.
"Subsidiary" shall mean, as to any Person, (a) any corporation more than
fifty percent (50%) of whose Capital Stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time, any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (b) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a fifty percent (50%) interest in the total capital,
total income and/or total ownership interests of such entity at any time.
Without limitation of the foregoing, unless otherwise provided herein, the term
"Subsidiary" when used herein shall mean and refer to each Subsidiary of any
Credit Party or each Credit Party, as appropriate.
"Swingline Committed Amount" shall have the meaning given to such term in
Section 2.10(a).
"Swingline Commitment" shall mean the commitment of the Swingline Lender
to make Swingline Loans in up to the Swingline Committed Amount in accordance
with Section 2.10.
"Swingline Lender" shall mean Bank of America, acting in such capacity
pursuant to Section 2.10, or any successor to Bank of America acting in such
capacity.
"Swingline Loan" shall have the meaning given to such term in Section
2.10(a).
"Swingline Note" shall have the meaning given to such term in Section
2.10(d).
"Syndication Agent" means Wachovia, in its capacity as Syndication Agent
for the Lenders hereunder.
25
"Taxes" shall mean any federal, state, local or foreign income, sales,
use, transfer, payroll, personal, property, occupancy, franchise or other tax,
levy, impost, fee, imposition, assessment or similar charge, together with any
interest or penalties thereon.
"Termination Event" shall mean (i) a Reportable Event with respect to any
Benefit Plan or Multiemployer Plan; (ii) the withdrawal of any Credit Party, any
Subsidiary or any ERISA Affiliate from a Benefit Plan during a plan year in
which such entity was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA; (iii) the providing of notice of intent to terminate a Benefit Plan
pursuant to Section 4041 of ERISA; (iv) the institution by the PBGC of
proceedings to terminate a Benefit Plan or Multiemployer Plan; (v) any event or
condition (a) which might constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Benefit Plan
or Multiemployer Plan, or (b) that may result in termination of a Multiemployer
Plan pursuant to Section 4041A of ERISA; or (vi) the partial or complete
withdrawal within the meaning of Sections 4203 and 4205 of ERISA, of any
Borrower, any Subsidiary or any ERISA Affiliate from a Multiemployer Plan.
"Total Gross Availability" shall mean, at any time, the lesser of (i) the
Borrowing Base at such time and (ii) the Revolving Credit Committed Amount at
such time.
"Trademark Security Agreement" shall have the meaning given to such term
in Section 5.1(u).
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the Commonwealth of Massachusetts.
"Unfinanced Capital Expenditures" shall mean, for any applicable period of
computation, capital expenditures made during such period and not financed from
the proceeds of Funded Indebtedness (excluding the Loans).
"Unused Line Fee" shall mean the fee payable to the Administrative Agent
for the account of each Lender in respect of the Revolving Credit Committed
Amount in an aggregate amount equal to (i) the positive difference, if any,
between (A) the Revolving Credit Committed Amount in effect at such time and (B)
the average daily Loans and the Letter of Credit Obligations outstanding during
such calendar month, multiplied by (ii) 0.25% for the number of days in said
calendar month.
"Wachovia" shall have the meaning given to such term in the first
paragraph hereof and shall include its successors and assigns.
"Voting Stock" shall mean, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the absence of
contingencies, entitled to vote for the election of directors (or persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
1.2 ACCOUNTING TERMS AND DETERMINATIONS.
Unless otherwise defined or specified herein, all accounting terms shall
be construed herein and all accounting determinations for purposes of
determining compliance with Article 8 hereof and otherwise to be made under this
Agreement shall be made in accordance with GAAP applied on a basis consistent in
all material respects with the Financials. All financial statements required to
be delivered hereunder from and after the Closing Date and all financial records
shall be maintained in accordance with GAAP. If GAAP shall change from the basis
used in preparing the Financials, the Compliance Certificate required to be
delivered pursuant to Section 7.1(d) shall include calculations setting forth
the adjustments necessary to demonstrate how the Parent and its Subsidiaries are
in compliance with the financial
26
covenants based upon GAAP as in effect on the Closing Date. If the Credit
Parties shall change their method of inventory accounting, all calculations
necessary to determine compliance with the covenants contained herein shall be
made as if such method of inventory accounting had not been so changed.
The Parent shall deliver to the Administrative Agent and each Lender at
the same time as the delivery of any annual financial statements required to be
delivered pursuant to Section 7.1(a), (i) a description in reasonable detail of
any material change in the application of accounting principles employed in the
preparation of such financial statements from those applied in the most recently
preceding annual financial statements and (ii) a reasonable estimate of the
effect on the financial statements on account of such changes in application.
1.3 OTHER DEFINITIONAL TERMS.
Terms not otherwise defined herein which are defined in the UCC shall have
the meanings given them in the UCC. The words "hereof", "herein" and "hereunder"
and words of similar import when used in this Agreement shall refer to the
Credit Agreement as a whole and not to any particular provision of this
Agreement, unless otherwise specifically provided. References in this Agreement
to "Articles", "Sections", "Schedules" or "Exhibits" shall be to Articles,
Sections, Schedules or Exhibits of or to this Agreement unless otherwise
specifically provided. Any of the terms defined in Section 1.1 may, unless the
context otherwise requires, be used in the singular or plural depending on the
reference. "Include", "includes" and "including" shall be deemed to be followed
by "without limitation" whether or not they are in fact followed by such words
or words of like import. "Writing", "written" and comparable terms refer to
printing, typing, computer disk, e-mail and other means of reproducing words in
a visible form. References to any agreement or contract are to such agreement or
contract as amended, modified or supplemented from time to time in accordance
with the terms hereof and thereof. References to any Person include the
successors and permitted assigns of such Person. References "from" or "through"
any date mean, unless otherwise specified, "from and including" or "through and
including", respectively. References to any times herein shall refer to Eastern
Standard or Day Light time, as applicable, in Boston, Massachusetts.
1.4 JOINT AND SEVERAL OBLIGATIONS.
The term "Borrowers" refers to both the Parent and IDG. All Obligations
are joint and several between the Parent and IDG. All representations and
covenants shall apply and be applied to each of the Parent and IDG separately as
well as jointly and are made by each of the Parent and IDG. A breach of this
Agreement by, or the occurrence of an Event of Default with respect to, any one
Borrower shall be deemed to be a breach or an Event of Default (as the case may
be) as to both.
ARTICLE 2
LOANS
2.1 LOANS.
(a) Commitment. Subject to the terms and conditions hereof and in
reliance upon the representations and warranties set forth herein, each of
the Lenders severally agrees to lend to the Borrowers at any time or from
time to time on or after the Closing Date and before the Maturity Date,
such Lender's Applicable Percentage of the Revolving Loans as may be
requested or deemed requested by the Borrowers in accordance with the
terms and conditions of this Agreement. To the extent that any Lender's
Applicable Percentage of the Revolving Credit Committed Amount is
different from its Revolving Credit Commitment Percentage (under and as
27
defined in the Existing Credit Agreement), the Lenders will be deemed to
have assigned Revolving Credit Commitments to each other such that after
such assignments the Applicable Percentages are as set forth in Schedule
1.1A on the Closing Date.
(b) Determination of Borrowing Base.
(i) The Lenders agree severally and not jointly, subject to
the terms and conditions of this Agreement, from time to time, to
make loans and advances to the Borrowers hereunder on a revolving
basis. The aggregate amount of such loans and advances to the
Borrowers (each, a "Revolving Loan"; and collectively, the
"Revolving Loans") together with the Letter of Credit Obligations
outstanding with respect to the Letters of Credit shall not in the
aggregate exceed the lesser of:
(A) the Revolving Credit Committed Amount then in
effect; or
(B) the Borrowing Base.
(ii) No Lender shall be obligated at any time to make
available to the Borrowers its Applicable Percentage of any
requested Revolving Loan if such amount plus its Applicable
Percentage of all Revolving Loans and its Applicable Percentage of
all Letter of Credit Obligations then outstanding would exceed such
Lender's Revolving Credit Commitment at such time. The aggregate
balance of Revolving Loans plus the aggregate amount of all Letter
of Credit Obligations outstanding shall not at any time exceed the
Revolving Credit Committed Amount. No Lender shall be obligated to
make available, nor shall the Administrative Agent make available,
any Revolving Loans to any of the Borrowers to the extent such
Revolving Loan when added to the then outstanding Revolving Loans
and all Letter of Credit Obligations would cause the aggregate
outstanding Revolving Loans and all Letter of Credit Obligations to
exceed the Borrowing Base (except for Overadvances). The Borrowers
shall promptly repay to the Administrative Agent for the account of
the Lenders from time to time the full amount of the excess, if any
of (A) the amount of all Revolving Loans and Letter of Credit
Obligations outstanding over (B) the lesser of (1) the Revolving
Credit Committed Amount and (2) the Borrowing Base subject to the
Administrative Agent's authority, in its sole discretion, to make
Overadvances pursuant to the terms of Section 2.1(f). Revolving
Loans may be repaid and reborrowed in accordance with the provisions
hereof.
(c) Revolving Notes. The obligations of the Borrowers to repay the
Revolving Loans and to pay interest thereon shall be evidenced by separate
promissory notes of the Borrowers to each Lender in substantially the form
of Exhibit F-1 (the "Revolving Notes"), with appropriate insertions, with
one (1) Revolving Note being payable to the order of each Lender in a
principal amount equal to such Lender's Revolving Credit Commitment and
representing the joint and several obligations of the Borrowers to pay
such Lender the amount of such Lender's Revolving Credit Commitment or, if
less, the aggregate unpaid principal amount of all Revolving Loans made by
such Lender hereunder, plus interest accrued thereon, as set forth herein.
The Borrowers irrevocably authorize each Lender to make or cause to be
made appropriate notations on its Revolving Note, or on a record
pertaining thereto, reflecting Revolving Loans and repayments thereof. The
outstanding amount of the Revolving Loans set forth on such Lender's
Revolving Note or record shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Lender, but the failure to make
such notation or record, or any error in such notation or record shall not
limit or otherwise affect the obligations of the Borrowers hereunder or
28
under any Revolving Note to make payments of principal of or interest on
any Revolving Note when due.
(d) Borrowings.
(i) Each request for a borrowing hereunder shall be made by a
notice in the form of Exhibit G from the Parent to the
Administrative Agent (a "Notice of Borrowing"), setting forth all of
the information required to be set forth therein including the Total
Gross Availability as set forth in the most recent Borrowing Base
Certificate delivered to the Administrative Agent, and the amount of
the advance requested, and shall be given not later than 1:00 P.M.,
Boston, Massachusetts time (A) on the Business Day on which the
proposed borrowing is requested to be made, for Revolving Loans that
will be Base Rate Loans and (B) three (3) Business Days prior to the
date of the requested borrowing, for Loans that will be LIBOR Loans.
Each Notice of Borrowing shall be given by telecopy, setting forth
(1) the requested date of such borrowing, (2) the aggregate amount
of such requested borrowing, (3) whether such Loans will be Base
Rate Loans or LIBOR Loans, and if appropriate, the applicable LIBOR
Interest Period, (4) certification by the Parent that the Credit
Parties have complied in all material respects with Article 5, all
of which shall be specified in such manner as is necessary to comply
with all limitations on Loans outstanding hereunder (including
availability under the Borrowing Base) and (5) the account at which
such requested funds should be made available. Each Notice of
Borrowing shall be irrevocable by and binding on the Borrowers.
Loans made as LIBOR Loans shall be made in a minimum principal
amount of Five Hundred Thousand Dollars ($500,000) and integral
multiples of One Hundred Thousand Dollars ($100,000) in excess
thereof; provided, that no more than five (5) LIBOR Loans shall be
outstanding hereunder at any one time.
The Administrative Agent shall give to each Lender prompt
notice (but in no event later than 2:00 P.M. Boston, Massachusetts
time. on the date of the Administrative Agent's receipt of notice
from the Parent) of each Notice of Borrowing by telecopy, telex or
cable (other than any Notice of Borrowing which will be funded by
the Administrative Agent in accordance with subsection (d)(ii)
below). No later than 3:00 P.M. Boston, Massachusetts time on the
date on which a borrowing is requested to be made pursuant to the
applicable Notice of Borrowing, each Lender will make available to
the Administrative Agent at the address of the Administrative Agent
set forth on the signature pages hereto, in immediately available
funds, its Applicable Percentage of such borrowing requested to be
made. Unless the Administrative Agent shall have been notified by
any Lender prior to the date of borrowing that such Lender does not
intend to make available to the Administrative Agent its portion of
the borrowing to be made on such date, the Administrative Agent may
assume that such Lender will make such amount available to the
Administrative Agent as required above and the Administrative Agent
may, in reliance upon such assumption, make available the amount of
the borrowing to be provided by such Lender. Upon fulfillment of the
conditions set forth in Article 5 for such borrowing, the
Administrative Agent will make such funds available to the Borrowers
at the account specified by the Parent in such Notice of Borrowing.
(ii) Because the Borrowers anticipate the possibility of
requesting borrowings of Revolving Loans on a daily basis and
repaying Revolving Loans on a daily basis through the collection of
Accounts and the proceeds of other Collateral, resulting in the
amount of outstanding Revolving Loans fluctuating from day to day,
in order to administer the Revolving Loans in an efficient manner
and to minimize the transfer of
29
funds between the Administrative Agent and the Lenders, with the
Lenders' consent, the Swingline Lender has agreed, subject to the
terms and conditions set forth in Section 2.10, to make Swingline
Loans available to the Borrowers from time to time; without
necessity of giving each Lender prior notice of the proposed
Swingline Loan borrowing, of such Lender's Applicable Percentage of
any resulting Revolving Loan and the other matters covered by the
Notice of Borrowing; provided, however, that the Swingline Lender
shall not make any such Swingline Loan if, prior to the making
thereof, the Swingline Lender has received, either directly or from
the Administrative Agent (if the Swingline Lender is not then the
Administrative Agent) (1) an officer's certificate from the Parent
or any other Borrower pursuant to and in accordance with Section
7.1(i) that a Default or Event of Default is in existence or (2) a
Notice of Borrowing from the Parent wherein the certification
provided therein states that the conditions to the making of the
requested Swingline Loan have not been satisfied or (3) a written
notice from the Administrative Agent that the conditions to such
borrowing specified in Section 5.2 have not been satisfied, which
officer's certificate, Notice of Borrowing or notice, in each case,
shall not have been rescinded; provided that if the Swingline Lender
is the Administrative Agent, the notice specified in subclause (3)
shall be presumed if the Administrative Agent has made such
determination. If the Swingline Lender makes any Swingline Loans, as
provided in the immediately preceding sentence, the amount of
outstanding Revolving Loans and each Lender's Applicable Percentage
thereof shall be computed weekly rather than daily and shall be
adjusted upward or downward on the basis of the amount of
outstanding Revolving Loans as of 5:00 P.M. on the Business Day
immediately preceding the date of each computation, determined in
the manner prescribed below; provided, however, that the
Administrative Agent retains the absolute right at any time or from
time to time to make the aforedescribed adjustments at intervals
more frequently than weekly. The Administrative Agent shall deliver
to each of the Lenders after the end of each week, or such lesser
period or periods as the Administrative Agent shall determine, a
summary statement of the amount of outstanding Revolving Loans for
such period after giving effect to the conversion of then
outstanding Swingline Loans into Revolving Loans in accordance with
Section 2.10 (such week or lesser period or periods being hereafter
referred to as a "Settlement Period"). If the summary statement is
sent by the Administrative Agent and received by the Lenders prior
to 12:00 Noon on any Business Day each Lender shall make the
transfers described in the next succeeding sentence no later than
3:00 P.M. Boston, Massachusetts time on the day such summary
statement was sent; and if such summary statement is sent by the
Administrative Agent and received by the Lenders after 12:00 Noon
Boston, Massachusetts time on any Business Day, each Lender shall
make such transfers no later than 3:00 P.M. Boston, Massachusetts
time on the next succeeding Business Day. If in any Settlement
Period, the amount of a Lender's Applicable Percentage of the
Revolving Loans is in excess of the amount of Revolving Loans
actually funded by such Lender, such Lender shall forthwith (but in
no event later than the time set forth in the next preceding
sentence) transfer to the Administrative Agent by wire transfer in
immediately available funds the amount of such excess; and, on the
other hand, if the amount of a Lender's Applicable Percentage of the
Revolving Loans in any Settlement Period is less than the amount of
Revolving Loans actually funded by such Lender, the Administrative
Agent shall forthwith transfer to such Lender by wire transfer in
immediately available funds the amount of such difference. The
obligation of each of the Lenders to transfer such funds shall be
irrevocable and unconditional and without recourse to or warranty by
the Administrative Agent. Each of the Administrative Agent and the
Lenders agree to xxxx their respective books and records at the end
of each Settlement Period to show at all times the dollar amount of
their respective Applicable Percentages of the outstanding
30
Revolving Loans. All Revolving Loans under this Section 2.1(d)(ii)
shall be made as Base Rate Loans.
(iii) If the amounts described in subsection (d)(i) or (d)(ii)
of this Section 2.1 are not in fact made available to the
Administrative Agent by a Lender (such Lender being hereinafter
referred to as a "Defaulting Lender") and the Administrative Agent
has made such amount available to the Borrowers, the Administrative
Agent shall be entitled to recover such corresponding amount on
demand from such Defaulting Lender. If such Defaulting Lender does
not pay such corresponding amount forthwith upon the Administrative
Agent's demand therefor, the Administrative Agent shall promptly
notify the Parent and the Borrowers shall immediately (but in no
event later than five (5) Business Days after such demand) pay such
corresponding amount to the Administrative Agent. The Administrative
Agent shall also be entitled to recover from such Defaulting Lender
and the Borrowers, (A) interest on such corresponding amount in
respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrowers to the date
such corresponding amount is recovered by the Administrative Agent,
at a rate per annum equal to either (1) if paid by such Defaulting
Lender, the overnight Federal Funds Effective Rate or (2) if paid by
the Borrowers, the then applicable rate of interest, calculated in
accordance with Section 4.1, plus (B) in each case, an amount equal
to any costs (including legal expenses) and losses incurred as a
result of the failure of such Defaulting Lender to provide such
amount as provided in this Agreement. Nothing herein shall be deemed
to relieve any Lender from its obligation to fulfill its commitments
hereunder or to prejudice any rights which the Borrowers may have
against any Lender as a result of any default by such Lender
hereunder, including the right of the Borrowers to seek
reimbursement from any Defaulting Lender for any amounts paid by the
Borrowers under clause (B) above on account of such Defaulting
Lender's default.
(iv) The failure of any Lender to make the Loan to be made by
it as part of any borrowing shall not relieve any other Lender of
its obligation, if any, hereunder to make its Loan on the date of
such borrowing, but no Lender shall be responsible for the failure
of any other Lender to make the Loan to be made by such other Lender
on the date of any borrowing.
(v) Each Lender shall be entitled to earn interest at the then
applicable rate of interest, calculated in accordance with Article
4, on outstanding Revolving Loans which it has funded to the
Administrative Agent from the date such Lender funded such Revolving
Loan to, but excluding, the date on which such Lender is repaid with
respect to such Revolving Loan.
(vi) In the event of any conflict between any terms of this
Section 2.1(d) and those of Section 2.10, the terms of Section 2.10
shall be controlling.
(e) Increase in Revolving Credit Committed Amount.
(i) At any time and from time to time, the Parent may request
that the Lenders (or other financial institutions agreed to by the
Parent and the Administrative Agent) increase the Revolving Credit
Committed Amount to an aggregate amount (the "Total Requested
Revolving Credit Committed Amount") not to exceed One Hundred Ten
Million Dollars ($110,000,000). In connection with any request by
the Parent for an increase in the Revolving Credit Committed Amount:
(i) the Borrowers shall offer each
31
existing Lender the right to increase its Revolving Credit
Commitment in an aggregate amount equal to such existing Lender's
Applicable Percentage of the Total Requested Revolving Credit
Committed Amount, (ii) if any one or more existing Lenders decline
to increase their respective Revolving Credit Commitments in an
aggregate amount equal to the full amount of their respective
Applicable Percentages of the Total Requested Revolving Credit
Committed Amount, the portion of the Total Requested Revolving
Credit Committed Amount for which such existing Lenders decline to
commit (the "Declined Incremental Portion") shall be offered to all
other existing Lenders that have committed to increase their
Revolving Credit Commitments in the full amount of their respective
Applicable Percentages of the Total Requested Revolving Credit
Committed Amount (such Lenders are referred to herein as "100%
Participating Lenders"), and (iii) in the event that the 100%
Participating Lenders decline to commit to make their respective
Applicable Percentages of the Declined Incremental Portion, the
Borrowers shall have the right to offer the uncommitted amount of
the Declined Incremental Portion to one or more other financial
institutions that are not existing Lenders and are reasonably
acceptable to the Parent and the Administrative Agent. Nothing
contained in this paragraph shall constitute an obligation on the
part of any Lender to increase its Revolving Credit Commitment.
(ii) In the event that one or more of the existing Lenders
agree, in their sole discretion, to increase their respective
Revolving Credit Commitments (or if any new financial institution
shall agree to a new Revolving Credit Commitment), and such existing
Lenders (or new financial institutions) and the Parent agree as to
the final amount and allocation of the aggregate increase in the
Revolving Credit Commitment among the respective existing Lenders
that have elected to increase their Revolving Credit Commitments (or
new financial institutions that have agreed to new Revolving Credit
Commitments), the Revolving Credit Committed Amount shall be so
increased, and the Revolving Credit Commitments of the Lenders
electing to participate in such increase (or new financial
institutions electing to make new Revolving Credit Commitments)
shall become effective on the date determined by the Administrative
Agent, and the respective Revolving Credit Commitments and
Applicable Percentages of all Lenders (and new financial
institutions) shall be adjusted on such date to reflect such
increase in the Revolving Credit Committed Amount. Anything herein
to the contrary notwithstanding, the aggregate principal amount of
any increase in the Revolving Credit Committed Amount shall be equal
to at least $5,000,000 or any greater integral multiple of
$5,000,000 and (ii) the aggregate principal amount of all Revolving
Credit Commitments of all Lenders after giving effect to such
increase shall not exceed $110,000,000. In connection with any
increase in the Revolving Credit Commitment Amount pursuant to this
Section 2.1(e), the Borrowers shall pay to the existing Lenders (and
if applicable, any financial institutions) that have assumed any
portion of the Revolving Credit Commitment increase, such fees as
may be agreed upon by the Administrative Agent, the Parent and each
respective Lender and financial institution.
(f) Protective Advances and Overadvances.
(i) Protective Advances. Subject to the limitations set forth
below, if an Event of Default has occurred and is continuing, the
Administrative Agent is authorized by the Borrowers and the Lenders,
from time to time in the Administrative Agent's sole discretion (but
shall have absolutely no obligation to), to make advances to the
Borrowers, on behalf of all Lenders, which the Administrative Agent,
in its discretion, deems necessary or desirable (i) to preserve or
protect the Collateral, or any portion
32
thereof, (ii) to enhance the likelihood of, or maximize the amount
of, repayment of the Loans and other Obligations, or (iii) to pay
any other amount chargeable to or required to be paid by any
Borrower pursuant to the terms of this Agreement, including costs,
fees, and expenses as described in Section 14.6 (any of such
advances are herein referred to as "Protective Advances").
Protective Advances may be made even if the conditions precedent set
forth in Section 5.2 have not been satisfied. The Protective
Advances shall be secured by the Liens in favor of the
Administrative Agent in and to the Collateral and shall constitute
Obligations hereunder. All Protective Advances shall be Base Rate
Loans, shall bear interest at the default rate set forth in Section
4.2 and shall be payable on the earlier of ninety days after the
date of such advance or the Maturity Date. At any time that there is
sufficient Excess Availability and the conditions precedent set
forth in Section 5.2 have been satisfied, the Administrative Agent
may request the Lenders to make a Revolving Loan to repay a
Protective Advance. At any other time the Administrative Agent may
require the Lenders to fund their risk participations described in
Section 2.7.
(ii) Overadvances. Any provision of this Agreement to the
contrary notwithstanding, at the request of the Borrower, the
Administrative Agent may in its sole discretion (but shall have
absolutely no obligation to), make advances to the Borrowers, on
behalf of the Lenders, in amounts that exceed Excess Availability
(any such excess advances are herein referred to collectively as
"Overadvances"); provided that, (i) no such event or occurrence
shall cause or constitute a waiver of the Administrative Agent's or
the Lenders' right to refuse to make any further Overadvances or
Revolving Loans, or issue Letters of Credit, as the case may be, at
any time that an Overadvance exists, and (ii) no Overadvance shall
result in a Default or Event of Default due to Borrower's failure to
comply with Section 2.1(b) (a) for so long as the Administrative
Agent permits such Overadvance to remain outstanding, but solely
with respect to the amount of such Overadvance. All Overadvances
shall constitute Base Rate Loans , shall bear interest at the
default rate set forth in Section 4.2, shall be payable on the
earlier of ninety days after the date of such advance or the
Maturity Date. No Overadvance shall cause any Lender's Revolving
Loans and Letter of Credit Obligations to exceed its Revolving
Credit Commitment or the aggregate Revolving Credit Loans and Letter
of Credit Obligations to exceed the Revolving Credit Committed
Amount.
(iii) The authority of the Administrative Agent to make
Protective Advances and Overadvances hereunder is limited to an
aggregate amount not to exceed $2,500,000 at any time, and no
Protective Advance or Overadvance may remain outstanding for more
than ninety days.
(g) Treatment of Loans and Letters of Credit Outstanding under
Existing Credit Agreement. In the event that any Revolving Loans made
under (and as defined in) the Existing Credit Agreement and/or any Letters
of Credit issued under (and as defined in) the Existing Credit Agreement
shall remain outstanding on the Closing Date, then such "Revolving Loans"
and "Letters of Credit" shall be continued as Revolving Loans and Letters
of Credit hereunder, and the Lenders hereunder shall, on the Closing Date,
take such actions, and make such adjustments among themselves, as shall be
necessary so that such "Revolving Loans" and obligations to purchase risk
participations in respect of such "Letters of Credit" are held hereunder
pro rata in accordance with their Applicable Percentages, including by
purchasing the "Revolving Loans" under the Existing Credit Agreement of
any "Lenders" under the Existing Credit Agreement that are not becoming
Lenders hereunder. On the Closing Date, the Borrowers shall cause to be
paid to each "Lender" party to the Existing Credit Agreement, all amounts
that
33
would be owing to such Lender under Section 4.10 of the Existing Credit
Agreement as if the "Loans" of such Lender under the Existing Credit
Agreement were being repaid on the Closing Date, whether or not any such
"Loans" are actually repaid at the Closing Date.
2.2 OPTIONAL AND MANDATORY PREPAYMENTS; REDUCTION OF COMMITMENTS.
(a) Voluntary Prepayments. The Borrowers shall have the right to
prepay Loans in whole or in part from time to time, but otherwise without
premium or penalty; provided, however, that (i) Loans that are LIBOR Loans
may only be prepaid on three (3) Business Days' prior written notice to
the Administrative Agent specifying the applicable Loans to be prepaid;
(ii) any prepayment of Loans that are LIBOR Loans will be subject to
Section 4.10; (iii) each such partial prepayment of Loans (other than
Swingline Loans) shall be in a minimum principal amount of One Hundred
Thousand Dollars ($100,000) and integral multiples of One Hundred Thousand
Dollars ($100,000). Subject to the foregoing terms, amounts prepaid under
this Section 2.2(a) shall be applied, first, to Swingline Loans, and,
then, to the Revolving Loans. Prepayments on Loans shall be applied first
to Base Rate Loans and then to LIBOR Loans in direct order of LIBOR
Interest Period maturities.
(b) Mandatory Prepayments.
(i) Revolving Credit Committed Amount. Except for Overadvances
permitted pursuant to Section 2.1(f), if at any time, the sum of the
aggregate principal amount of outstanding Loans plus all Letter of
Credit Obligations then outstanding shall exceed the lesser of (A)
the Revolving Credit Committed Amount and (B) the Borrowing Base,
the Borrowers immediately shall prepay the Loans (with Swingline
Loans to be paid first) and (after all Loans have been repaid) cash
collateralize the Letter of Credit Obligations, in an amount
sufficient to eliminate such excess.
(ii) Casualty Loss. To the extent of cash proceeds received by
any Credit Party in connection with a Casualty Loss, the Borrowers
shall prepay the Loans in an amount equal to one hundred percent
(100%) of such cash proceeds if the Administrative Agent shall have
elected to apply the proceeds realized from such Casualty Loss to
the prepayment of the Loans pursuant to Section 7.10 (such
prepayment to be applied as set forth in clause (iv) below).
(iii) Asset Dispositions. Promptly and in any event within
five (5) days following the occurrence of any Asset Disposition by
any Credit Party, the Borrowers shall prepay the Loans in an
aggregate amount equal to the Net Cash Proceeds of the related Asset
Disposition. Such prepayment shall be applied as set forth in clause
(iv) below.
(iv) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 2.2(b) shall be applied
to Loans pro rata (with Swingline Loans, Overadvances and Protective
Advances to be paid first) and (after all Loans have been repaid) to
a cash collateral account held by the Administrative Agent in
respect of Letter of Credit Obligations. Within the parameters of
the applications set forth above for Loans, prepayments shall be
applied first to Base Rate Loans and then to LIBOR Loans in direct
order of LIBOR Interest Period maturities. All prepayments under
this Section 2.2(b) shall be subject to Section 4.10.
34
(c) Reductions of Commitments. The Borrowers may from time to time
permanently reduce or terminate the Revolving Credit Committed Amount in
whole or in part in minimum aggregate amounts of Five Million Dollars
($5,000,000) or in integral multiples of One Million Dollars ($1,000,000)
in excess thereof (or, if less, the full remaining amount of the then
applicable Revolving Credit Committed Amount) upon three (3) Business
Days' prior written notice delivered by the Parent to the Administrative
Agent; provided, however, no such termination or reduction shall be made
which would cause the aggregate principal amount of outstanding Loans plus
Letter of Credit Obligations outstanding to exceed the lesser of (A) the
Revolving Credit Committed Amount and (B) the Borrowing Base, unless,
concurrently with such termination or reduction, the Loans are repaid to
the extent necessary to eliminate such excess (with Swingline Loans to be
paid first). The Administrative Agent shall promptly notify each affected
Lender of the receipt by the Administrative Agent of any notice from the
Parent pursuant to this Section 2.2(c).
(d) Maturity Date. The Revolving Credit Commitment of the Lenders,
the Swingline Commitment of the Swingline Lender, and the Letter of Credit
Commitment of the Issuing Banks shall automatically terminate on the
Maturity Date.
(e) General. The Borrowers shall pay to the Administrative Agent for
the account of the Lenders in accordance with the terms of Section 4.3, on
the date of each termination or reduction of the Revolving Credit
Committed Amount, the Unused Line Fee accrued through the date of such
termination or reduction on the amount of the Revolving Credit Committed
Amount so terminated or reduced.
2.3 PAYMENTS AND COMPUTATIONS.
(a) The Borrowers shall make each payment hereunder and under the
Notes not later than 1:00 P.M. Boston, Massachusetts time on the day when
due. Payments made by the Borrowers shall be in Dollars to the
Administrative Agent at its address referred to in Section 14.4 hereof in
immediately available funds without deduction, withholding, setoff or
counterclaim. Payments shall be applied, first, with respect to
outstanding Swingline Loans and, then, with respect to Revolving Loans.
Payments made with respect to the Revolving Loans shall be applied to
repay Revolving Loans consisting of Base Rate Loans first and then
Revolving Loans consisting of LIBOR Loans. As soon as practicable after
the Administrative Agent receives payment from the Borrowers, but in no
event later than one (1) Business Day after such payment has been made,
subject to Section 2.1(d)(ii), the Administrative Agent will cause to be
distributed like funds relating to the payment of principal, interest, or
Fees (other than amounts payable to the Administrative Agent to reimburse
the Administrative Agent and the Issuing Banks for fees and expenses
payable solely to them pursuant to Article 4 hereof and Swingline Loans,
together with accrued interest thereon, which shall be distributed solely
to the Swingline Lender) or expenses payable to the Administrative Agent
and the Lenders in accordance with Section 14.6 hereof ratably to the
Lenders, and like funds relating to the payment of any other amounts
payable to such Lender. The Borrowers' obligations to the Lenders with
respect to such payments shall be discharged by making such payments to
the Administrative Agent pursuant to this Section 2.3(a) or if not timely
paid or any Event of Default then exists, may be added to the principal
amount of the Revolving Loans outstanding.
(b) (i) The Credit Parties, either individually or through the
Borrowers, shall have each established as of the Closing Date and
thereafter shall maintain one or more lockboxes (each a "Lockbox") with
financial institutions, including Bank of America, selected by the Parent
and acceptable to the Administrative Agent in its commercially reasonable
judgment (each a
35
"Lockbox Bank") and shall instruct all account debtors on the Accounts of
each Credit Party to remit all payments to its respective Lockboxes. All
amounts received by the Credit Parties from any account debtor, in
addition to all other cash received from any other source including but
not limited to proceeds from asset sales and judgments, shall be promptly
deposited into the applicable Lockbox Account (as defined below).
(ii) Each Credit Party, individually or through the Borrowers,
the Administrative Agent and each Lockbox Bank shall enter into
three party agreements substantially in the form of Exhibit H or in
such other form as the Administrative Agent, in its commercially
reasonable judgment, may request or approve from time to time (each
a "Lockbox Agreement"), providing, among other things, for the
following:
(A) The Credit Parties, individually or through the
Parent, will open and establish for the benefit of the
Administrative Agent on behalf of the Lenders an account at
each Lockbox Bank (each a "Lockbox Account"). Notwithstanding
the foregoing, in lieu of establishing a Lockbox Account with
Bank of America, the Bank of America Account will serve as the
Credit Parties' Lockbox Account with respect to the Lockboxes
opened with Bank of America.
(B) All receipts held in the Lockboxes shall be remitted
daily to the appropriate Lockbox Account. All funds deposited
into the Lockbox Accounts on any Business Day shall be
transferred to the Bank of America Account. All funds
deposited on any Business Day to the Bank of America Account
shall be applied by the Administrative Agent on the following
Business Day to reduce the then outstanding balance of the
Loans and to pay accrued interest thereon and to pay any other
outstanding Obligations which are then due and payable
hereunder; provided that for the purpose of determining the
availability of Loans hereunder, such funds deposited into the
Bank of America Account shall be deemed to have reduced the
outstanding Loans on the Business Day such funds were
deposited into such account; and; provided, further, that all
electronic payments made to, or other immediately available
funds deposited into the Bank of America Account shall be
applied by the Administrative Agent on the date received in
such account, if received before 2:00 P.M. on such day. All
amounts received directly by the Credit Parties from any
account debtor, in addition to all other cash received from
any other source including but not limited to proceeds from
asset sales and judgments, shall be held in trust by the
applicable Credit Party and promptly deposited into the
applicable Lockbox Account or, if made by wire transfer,
directly to the Bank of America Account.
(C) Notwithstanding any terms of subsection (B) above to
the contrary, so long as (i) no Event of Default or Default
exists, and (ii) Average Excess Availability exceeds Ten
Million Dollars ($10,000,000), all or portions of any funds
deposited into the Lockbox Accounts on any Business Day may,
at the Parent's option, be transferred to an account of any
Credit Party other than the Bank of America Account,
thereafter to be used by such Credit Party in a manner
consistent with the terms of this Agreement. Should the
Administrative Agent at any time determine that either of the
foregoing conditions is not being met, then, the
Administrative Agent may, or at the direction of the Required
Lenders, the Administrative Agent shall, notify the Parent and
the Lockbox Banks accordingly and the special permission
granted herein to the Credit Parties shall cease to be
effective until such time as the Administrative Agent, by
subsequent notice to the
36
Parent and the Lockbox Banks, determines that each of the
foregoing conditions is being met and that the special
permission granted herein to the Credit Parties may be
restored.
(iii) All funds deposited into the Bank of America Account
shall immediately become the property of the Administrative Agent
and the Credit Parties shall obtain the agreement by the Lockbox
Banks to waive any offset rights against the funds so deposited. The
Administrative Agent assumes no responsibility for the Lockbox
arrangements, including any claim of accord and satisfaction or
release with respect to deposits accepted by the Lockbox Banks
thereunder.
(iv) The Credit Parties may close Lockboxes and/or open new
Lockboxes with the prior written consent of the Administrative Agent
and subject to prior execution and delivery to the Administrative
Agent of Lockbox Agreements consistent with the provisions of this
Section 2.3(b) and in form and substance satisfactory to the
Administrative Agent and its counsel.
(c) The Credit Parties hereby authorize each Lender to charge from
time to time against any or all of the Credit Parties' accounts with such
Lender any of the Obligations which are then due and payable by such
Credit Party. Each Lender receiving any payment as a result of charging
any such account shall promptly notify the Administrative Agent thereof
and make such arrangements as the Administrative Agent shall request to
share the benefit thereof in accordance with Section 2.7.
(d) Except as otherwise provided herein with respect to LIBOR Loans,
any payments falling due under this Agreement on a day other than a
Business Day shall be due and payable on the next succeeding Business Day
and shall accrue interest at the applicable interest rate provided for in
this Agreement to but excluding such Business Day. Except as otherwise
provided herein, computation of interest and fees hereunder shall be made
on the basis of actual number of days elapsed over a 360 day year.
(e) All monies to be applied to the Obligations, whether such monies
represent voluntary payments by the Borrowers or are received pursuant to
acceleration of the Obligations or realized from any disposition of
Collateral, shall be allocated among the Administrative Agent, the Issuing
Banks and such of the Lenders as are entitled thereto (and, with respect
to monies allocated to the Lenders, on a pro rata basis unless and except
to the extent otherwise expressly provided herein), as follows:
(i) to the Issuing Banks, to pay any Issuing Bank Fees then
due and payable;
(ii) to the Issuing Banks, to pay the amount of any drawings
on any portion of the Letters of Credit which the Issuing Banks have
honored then due and payable and for which the Issuing Banks have
not been reimbursed by the Administrative Agent or the Lenders in
accordance with Section 3.4;
(iii) to the Administrative Agent, to fund any depositing of
cash in respect of Letters of Credit then required pursuant to
Section 11.2;
(iv) to the Administrative Agent, to pay principal and accrued
interest on any portion of the Swingline Loans then due and payable
and for which the Administrative Agent has not been reimbursed by
the Lenders in accordance with Section 2.10(b)(ii);
37
(v) to the Administrative Agent, to pay principal and accrued
interest on any portion of the Revolving Loans which the
Administrative Agent may have advanced on behalf of any Lenders
(including Protective Advances and Overadvances) and for which the
Administrative Agent has not been reimbursed by such Lender or the
Borrowers, in accordance with Section 2.1(d),
(vi) to the Administrative Agent, first, and then to the
Lenders, to pay the amount of expenses that have not been
reimbursed, respectively, to the Administrative Agent or the Lenders
by the Borrowers (or the other Lenders, as applicable) in accordance
with the terms of this Agreement, together with any interest accrued
thereon;
(vii) to the Administrative Agent, to pay any amounts owed
under indemnification obligations that have not been paid to the
Administrative Agent by the Lenders or the Borrowers, together with
interest accrued thereon;
(viii) to the Lenders for any amounts owed under
indemnification obligations that they have paid to the
Administrative Agent and for any expenses that they have reimbursed
to the Administrative Agent;
(ix) to the Administrative Agent, to pay any Administrative
Agent's Fees due and payable;
(x) to the Lenders, to pay any Lenders' Fees and any Unused
Line Fees then due and payable;
(xi) to the Lenders, to pay accrued interest on the Revolving
Loans then due and payable;
(xii) to the Lenders, to pay Revolving Loans then due and
payable;
(xiii) to the Lenders, to pay any other Obligations then due
and payable, excluding, however, any arising in respect of Cash
Management Services or Interest Rate Protection Agreements;
(xiv) to any Lender party to any agreement respecting Cash
Management Services, to pay any Obligations then owing thereunder;
and
(xv) to any Lender party to an Interest Rate Protection
Agreement, to pay any Obligations then owing thereunder.
The allocations set forth in this subsection (e) are solely to determine
the rights and priorities of the Issuing Banks, the Administrative Agent and
Lenders as among themselves and may be changed by the Issuing Banks, the
Administrative Agent and Lenders in accordance with Section 14.9 at any time or
from time to time without notice to or the consent or approval of any Credit
Party.
2.4 MAINTENANCE OF ACCOUNT.
The Administrative Agent shall maintain an account on its books in the
name of the Borrowers in which the Borrowers will be charged with all Loans and
advances made by the Lenders to the Borrowers or for the Borrowers' account,
including the Revolving Loans, the Letter of Credit Obligations and any other
Obligations, including any and all costs, expenses and attorney's fees which the
Administrative
38
Agent may incur, including in connection with the exercise by or for the Lenders
of any of the rights or powers herein conferred upon the Administrative Agent
(other than in connection with any assignments or participations by any Lender)
or in the prosecution or defense of any action or proceeding by or against any
Borrowers or the Lenders concerning any matter arising out of, connected with,
or relating to this Agreement or the Accounts, or any Obligations owing to the
Lenders by the Borrowers. The Borrowers will be credited in accordance with
Section 2.3(b)(ii)(B) above, with all amounts received by the Lenders from the
Borrowers' or from others for the Borrowers' account, including, as above set
forth, all amounts received by the Administrative Agent in payment of Accounts.
In no event shall prior recourse to any Accounts or other Collateral be a
prerequisite to the Administrative Agent's right to demand payment of any
Obligation upon its maturity. Further, it is understood that the Administrative
Agent shall have no obligation whatsoever to perform in any respect any of the
Borrowers' contracts or obligations relating to the Accounts.
2.5 STATEMENT OF ACCOUNT.
Within fifteen (15) days after the end of each calendar month, the
Administrative Agent shall send the Parent a statement showing the accounting
for the charges, loans, advances and other transactions occurring between the
Lenders and the Borrowers during that calendar month. Absent manifest error, the
monthly statements shall be deemed correct and binding upon the Borrowers and
shall constitute an account stated between the Borrowers and the Lenders unless
the Administrative Agent receives a written statement of the Parent's exceptions
within thirty (30) days after same is mailed to the Parent.
2.6 TAXES.
(a) Any and all payments by the Borrowers hereunder or under the
Notes to or for the benefit of any Lender shall be made, in accordance
with Section 2.3, free and clear of and without deduction for any and all
present or future Taxes, deductions, charges or withholdings and all
liabilities with respect thereto, excluding, in the case of each such
Lender and the Administrative Agent, Taxes imposed on or measured by the
Administrative Agent's or any Lender's net income or receipts (any such
excluded Taxes, collectively, "Excluded Taxes"). If the Borrowers shall be
required by law to deduct any Taxes (other than Excluded Taxes) from or in
respect of any sum payable hereunder or under any Note to or for the
benefit of any Lender or the Administrative Agent, (i) the sum payable
shall be increased as may be necessary so that after making all required
deductions of Taxes (including deductions of Taxes applicable to
additional sums payable under this Section 2.6) such Lender or the
Administrative Agent, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrowers shall make such deductions and (iii) the Borrowers shall pay the
full amount so deducted to the relevant taxation authority or other
authority in accordance with applicable law; provided, however, that the
Borrowers shall be under no obligation to increase the sum payable to any
Lender not organized under the laws of the United States or a state
thereof (a "Foreign Lender") by an amount equal to the amount of the U.S.
Tax required to be withheld under United States law from the sums paid to
such Foreign Lender, if such withholding is caused by the failure of such
Foreign Lender to be engaged in the active conduct of a trade or business
in the United States or all amounts of interest and fees to be paid to
such Foreign Lender hereunder are not effectively connected with such
trade or business within the meaning of U.S. Treasury Regulation
1.1441-4(a).
(b) Each Foreign Lender agrees that it will deliver to the Parent
and the Administrative Agent (i) two duly completed copies of United
States Internal Revenue Service Form W-8 BEN or W-8 ECI or successor
applicable form(s), as the case may be, and (ii) an
39
Internal Revenue Service Form W-8 or W-9 or successor applicable form,
together with any other certificate or statement of exemption required
under the Internal Revenue Code or regulations issued thereunder. Each
such Lender also agrees to deliver to the Parent and the Administrative
Agent two (2) further copies of the said Form W-8 BEN or W-8 ECI and Form
W-8 or W-9, or successor applicable forms or other manner of
certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to
the Parent, and such extensions or renewals thereof as may reasonably be
requested by the Parent or the Administrative Agent, unless in any such
case an event (including any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent
such Lender from duly completing and delivering any such form with respect
to it and such Lender so advises the Parent and the Administrative Agent.
Such Lender shall certify (A) in the case of a Form W-8 BEN or W-8 ECI,
that it is entitled to receive payments under this Agreement without
deduction or withholding of any U.S. federal income taxes and (B) in the
case of a Form W-8 or W-9, that it is entitled to an exemption from U.S.
backup withholding tax.
(c) In addition, the Borrowers agree to pay any present or future
stamp, documentary, privilege, intangible or similar Taxes or any other
excise or property Taxes, charges or similar levies that arise at any time
or from time to time (other than Excluded Taxes) (i) from any payment made
under any and all Loan Documents, (ii) from the transfer of the rights of
any Lender under any Loan Documents to any other Lender or Lenders or
(iii) from the execution or delivery by the Parent of, or from the filing
or recording or maintenance of, or otherwise with respect to, any and all
Loan Documents (hereinafter referred to as "Other Taxes").
(d) The Credit Parties will indemnify each Lender and the
Administrative Agent for the full amount of Taxes (including and without
duplication, any Taxes imposed by any jurisdiction on amounts payable
under this Section 2.6), subject to (i) the exclusion set out in the first
sentence of Section 2.6(a), (ii) the provisions of Section 2.6(b), and
(iii) the provisions of the proviso set forth in Section 2.6(a), and will
indemnify each Lender and the Administrative Agent for the full amount of
Other Taxes (including and without duplication, any Taxes imposed by any
jurisdiction on amounts payable under this Section 2.6) paid by such
Lender or the Administrative Agent (on its own behalf or on behalf of any
Lender), as the case may be, in respect of payments made or to be made
hereunder, and any liability (including penalties, interest and expenses)
arising solely therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. Payment of this
indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent, as the case may be, makes written
demand therefor, with a description of the applicable Taxes or Other
Taxes.
(e) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes, the Parent shall furnish to the Administrative Agent, at
its address referred to in Section 14.4, the original or certified copy of
a receipt evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement of the
Credit Parties hereunder, the agreements and obligations of the Credit
Parties contained in this Section 2.6 shall survive the payment in full of
all Obligations hereunder and under the Revolving Notes.
2.7 SHARING OF PAYMENTS.
If any Lender shall obtain any payment (whether voluntary, involuntary,
through the exercise of any right of setoff or otherwise) on account of the
Revolving Loans made by it or its participation in
40
Letters of Credit in excess of its pro rata share of such payment as provided
for in this Agreement, such Lender shall forthwith purchase from the other
Lenders such participations in the Revolving Loans made by them or in their
participation in Letters of Credit as shall be necessary to cause such
purchasing Lender to share the excess payment accruing to all Lenders in
accordance with their respective ratable shares as provided for in this
Agreement; provided, however, that if all or any portion of such excess is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and each such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an amount equal to
such Lender's ratable share (according to the proportion of (i) the amount of
such Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) or any interest or other amount paid or payable by the
purchasing Lender in respect to the total amount so recovered. The Borrowers
agree that any Lender so purchasing a participation from another Lender pursuant
to this Section 2.7 may, to the fullest extent permitted by law, exercise all of
its rights of payment (including the right of setoff) with respect to such
participation as fully as if such Lender were the direct creditor of a Borrower
in the amount of such participation.
2.8 PRO RATA TREATMENT.
Each Loan, each payment or prepayment of principal of any Loan or
reimbursement obligations arising from drawings under Letters of Credit, each
payment of interest on the Loans, each payment of the Unused Line Fee, each
payment of the Letter of Credit Fee, each reduction of the Commitments and each
conversion or extension of any Loan, shall be allocated pro rata among the
Lenders in accordance with the respective principal amounts of their outstanding
Revolving Loans and their participation interests in the Letters of Credit;
provided, however, that the foregoing fees payable hereunder to the Lenders
shall be allocated to each Lender based on such Lender's Applicable Percentage.
Upon the making of an Overadvance or a Protective Advance by the Administrative
Agent (whether before or after the occurrence of a Default or Event of Default),
the Administrative Agent shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably sold to each Lender and each
Lender shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably purchased from the Administrative Agent, without
recourse or warranty, an undivided interest and participation in such
Overadvance or Protective Advance, as applicable, in proportion to its
Applicable Percentage. From and after the date, if any, on which any Lender is
required to fund its participation in any Overadvance or Protective Advance
purchased hereunder, the Administrative Agent shall promptly distribute to such
Lender, such Lender's Applicable Percentage of all payments of principal and
interest and all proceeds of Collateral received by the Administrative Agent in
respect of such Loan.
2.9 EXTENSIONS AND CONVERSIONS.
Subject to the terms of Article 5, the Parent shall have the option, on
any Business Day, to extend existing LIBOR Loans into a subsequent permissible
LIBOR Interest Period, to convert Base Rate Loans into LIBOR Loans, or to
convert LIBOR Loans into Base Rate Loans; provided, however, that (i) except as
provided in Section 4.10, LIBOR Loans may be converted into Base Rate Loans only
on the last day of the LIBOR Interest Period applicable thereto, (ii) LIBOR
Loans may be extended, and Base Rate Loans may be converted into LIBOR Loans,
only if no Default or Event of Default is in existence on the date of extension
or conversion, (iii) Loans extended as, or converted into, LIBOR Loans shall be
subject to the terms of the definition of "LIBOR Interest Period" and shall be
in such minimum amounts as provided in Section 2.1(d)(i) with respect to
Revolving Loans, and (iv) no more than five (5) separate LIBOR Loans shall be
outstanding hereunder at any time. Each such extension or conversion shall be
effected by the Parent by delivering a Notice of Extension/Conversion (or
telephone notice promptly confirmed in writing) to the Administrative Agent
prior to 11:00 A.M. on the Business Day of, in the case of the conversion of a
LIBOR Loan into a Base Rate Loan, and on the third Business Day prior to, in the
case of the extension of a LIBOR Loan as, or conversion of a Base Rate Loan
into, a LIBOR Loan, the date of the
41
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable LIBOR
Interest Periods with respect thereto. Each request for extension or conversion
shall constitute a representation and warranty by the Borrowers of the matters
specified in Article 5. In the event the Parent fails to request extension or
conversion of any LIBOR Loan in accordance with this Section, or any such
conversion or extension is not permitted or required by this Section, then such
Loan shall be automatically converted into a Base Rate Loan at the end of the
LIBOR Interest Period applicable thereto. The Administrative Agent shall give
each Lender notice as promptly as practicable of any such proposed extension or
conversion affecting any Loan.
2.10 SWINGLINE LOAN SUBFACILITY.
(a) Swingline Commitment. During the period that the Revolving
Credit Commitments are in effect, subject to the terms and conditions
hereof, the Swingline Lender, in its individual capacity, agrees to make
certain Revolving Loans to the Borrowers (each, a "Swingline Loan" and,
collectively, the "Swingline Loans") for the purposes hereinafter set
forth; provided, however, that: (i) the aggregate amount of Swingline
Loans outstanding at any time shall not exceed Seven Million Five Hundred
Thousand Dollars ($7,500,000) (the "Swingline Committed Amount"), and (ii)
the sum of the aggregate amount of outstanding Revolving Loans plus
Swingline Loans plus Letter of Credit Obligations shall not exceed the
lesser of: (A) the Revolving Credit Committed Amount then in effect; or
(B) the Borrowing Base. Swingline Loans hereunder may be repaid and
reborrowed in accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The Swingline Lender
will make Swingline Loans available to the Borrowers on any Business
Day upon request made by the Borrowers not later than 2:00 P.M.
Boston, Massachusetts time on such Business Day. A notice of request
for Swingline Loan borrowing shall be made in the form of a Notice
of Borrowing, with appropriate modifications. Swingline Loans
hereunder shall be made in minimum amounts of One Hundred Thousand
Dollars ($100,000) and in integral amounts of Fifty Thousand Dollars
($50,000) in excess thereof.
(ii) Repayment of Swingline Loans. Each Swingline Loan shall
be due and payable on the Maturity Date, if not sooner due and
payable in accordance with the terms set forth hereinbelow. Upon
each Business Day set by the Administrative Agent for settlement
among Lenders in respect of Revolving Loans, as prescribed in
Section 2.1(d)(ii) or earlier, on any Business Day on which
Swingline Loans are outstanding, if the Swingline Lender shall so
request, by written notice to the Parent and the Administrative
Agent, the Borrowers shall be deemed to have requested a Revolving
Loan comprised entirely of Base Rate Loans in the amount of such
Swingline Loans on such Business Day; provided, however, that, in
the following circumstances, any such demand shall also be deemed to
have been given one (1) Business Day prior to each of (A) the
Maturity Date, (B) the occurrence of any Event of Default described
in Section 11.1(f), (C) upon acceleration of the Obligations
hereunder, whether on account of an Event of Default described in
Section 11.1(f) or any other Event of Default, and (D) the exercise
of remedies in accordance with the provisions of Section 11.2 hereof
(each such Revolving Loan made on account of any such deemed request
therefor as provided herein being hereinafter referred to as a
"Mandatory Borrowing"). Each Lender hereby irrevocably agrees to
make such Revolving Loans promptly upon any such request or
42
deemed request on account of each Mandatory Borrowing in the amount
and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory Borrowing
then may not comply with the minimum amount for borrowings of
Revolving Loans otherwise required hereunder (ii) whether any
conditions specified in Section 5.2 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) failure
of any such request or deemed request for Revolving Loans to be made
by the time otherwise required in Section 2.1(d), (v) the date of
such Mandatory Borrowing, or (vi) any reduction in the Revolving
Credit Committed Amount or termination of the Revolving Credit
Commitments immediately prior to such Mandatory Borrowing or
contemporaneously therewith. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise
required above (including as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrowers),
then, each Lender hereby agrees that it shall forthwith purchase (as
of the date the Mandatory Borrowing would otherwise have occurred,
but adjusted for any payments received from the Borrowers on or
after such date and prior to such purchase) from the Swingline
Lender such participations in the outstanding Swingline Loans as
shall be necessary to cause each such Lender to share in such
Swingline Loans ratably based upon its respective Applicable
Percentage (determined before giving effect to any termination of
the Commitments pursuant to Section 11.2); provided that (x) all
interest payable on the Swingline Loans shall be for the account of
the Swingline Lender until the date as of which the respective
participation is purchased, and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the
purchasing Lender shall be required to pay to the Swingline Lender
interest on the principal amount of such participation purchased for
each day from and including the day upon which the Mandatory
Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the rate equal to, if paid within
two (2) Business Days of the date of the Mandatory Borrowing, the
Federal Funds Effective Rate, and thereafter at a rate equal to the
Adjusted Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions of
Section 4.2, Swingline Loans shall bear interest at a per annum rate equal
to the Base Rate plus the Applicable Margin for Revolving Loans that are
Base Rate Loans. Interest on Swingline Loans shall be payable in arrears
at the same time or times as prescribed herein for Base Rate Loans.
(d) Swingline Note. The Swingline Loans shall be evidenced by a duly
executed promissory note of the Borrowers to the Swingline Lender (the
"Swingline Note") in the original amount of the Swingline Committed Amount
and substantially in the form of Exhibit F-2.
ARTICLE 3
LETTERS OF CREDIT
3.1 ISSUANCE.
Subject to the terms and conditions hereof and of the Letter of Credit
Documents, if any, and any other terms and conditions which the Issuing Banks
may reasonably require, the Lenders will participate in the issuance by the
Issuing Banks from time to time of such Letters of Credit in Dollars from the
Closing Date until the Maturity Date as the Parent may request, in a form
acceptable to the Issuing Banks; provided, however, that (a) the Letter of
Credit Obligations outstanding shall not at any time exceed Ten Million Dollars
($10,000,000) (the "Letter of Credit Committed Amount") and (b) the sum of the
aggregate principal amount of outstanding Revolving Loans plus Letter of Credit
Obligations outstanding
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shall not at any time exceed the lesser of (i) the Revolving Credit Committed
Amount and (ii) the Borrowing Base. No Letter of Credit shall (x) have an
original expiry date more than one (1) year from the date of issuance or (y) as
originally issued or as extended, have an expiry date extending beyond the
Maturity Date. Each Letter of Credit shall comply with the related Letter of
Credit Documents. The issuance and expiry date of each Letter of Credit shall
comply with the related Letter of Credit Documents. The issuance and expiry date
of each Letter of Credit shall be a Business Day.
3.2 NOTICE AND REPORTS.
The request for the issuance of a Letter of Credit shall be submitted by
the Parent to the Administrative Agent for delivery to the Issuing Banks at
least three (3) Business Days prior to the requested date of issuance. The
Issuing Banks will, upon request, disseminate to each of the Lenders a detailed
report specifying the Letters of Credit which are then issued and outstanding
and any activity with respect thereto which may have occurred since the date of
the prior report, and including therein, among other things, the beneficiary,
the face amount and the expiry date as well as any payment or expirations which
may have occurred.
3.3 PARTICIPATION.
Each Lender, upon issuance of a Letter of Credit, shall be deemed to have
purchased from the respective Issuing Bank that issued such Letter of Credit
without recourse a risk participation in such Letter of Credit and the
obligations arising thereunder, in each case in an amount equal to its
Applicable Percentage of such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary Credit Party and not as
surety, and be obligated to pay to such Issuing Bank therefor and discharge when
due, such Lender's Applicable Percentage of the obligations arising under such
Letter of Credit. Without limiting the scope and nature of each Lender's
participation in any Letter of Credit, to the extent that the respective Issuing
Bank that issued such Letter of Credit, has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Lender shall pay to such
Issuing Bank its Applicable Percentage of such unreimbursed drawing pursuant to
the provisions of Section 3.4. The obligation of each Lender to so reimburse the
Issuing Banks shall be absolute and unconditional and shall not be affected by
the occurrence of a Default, an Event of Default or any other occurrence or
event. Any such reimbursement shall not relieve or otherwise impair the
obligation of the Borrowers to reimburse the Issuing Banks under any Letter of
Credit, together with interest as hereinafter provided.
3.4 REIMBURSEMENT.
In the event of any drawing under any Letter of Credit, the Issuing Bank
that issued such Letter of Credit will promptly notify the Parent. Unless the
Parent shall immediately notify such Issuing Bank that the Borrowers intend to
otherwise reimburse such Issuing Bank for such drawing, the Borrowers shall be
deemed to have requested that the Lenders make a Revolving Loan in the amount of
the drawing as provided in Section 3.5 on the related Letter of Credit, the
proceeds of which will be used to satisfy the related reimbursement obligations.
The Borrowers promise to reimburse the Issuing Banks on the day of drawing under
any Letter of Credit (either with the proceeds of a Revolving Loan obtained
hereunder or otherwise) in same day funds. If the Borrowers shall fail to
reimburse the Issuing Banks as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at the Default Rate. The Borrowers'
reimbursement obligations hereunder shall be absolute and unconditional under
all circumstances irrespective of any rights of setoff, counterclaim or defense
to payment the Borrowers may claim or have against the Issuing Banks, the
Administrative Agent, the Lenders, the beneficiary of the Letter of Credit drawn
upon or any other Person, including any defense based on any failure of the
Borrowers to receive consideration or the legality, validity, regularity or
unenforceability of the Letter of Credit. The Issuing Banks will promptly notify
the other Lenders of the amount of any unreimbursed
44
drawing and each Lender shall promptly pay to the Administrative Agent for the
account of the Issuing Banks in Dollars and in immediately available funds, the
amount of such Lender's Applicable Percentage of such unreimbursed drawing. Such
payment shall be made on the Business Day such notice is received by such Lender
from any Issuing Bank if such notice is received at or before 2:00 P.M. Boston,
Massachusetts time; otherwise, such payment shall be made at or before 12:00
Noon Boston, Massachusetts time on the Business Day next succeeding the day such
notice is received. If such Lender does not pay such amount to such Issuing Bank
in full upon such request, such Lender shall, on demand, pay to the
Administrative Agent for the account of such Issuing Bank interest on the unpaid
amount during the period from the date of such drawing until such Lender pays
such amount to such Issuing Bank in full at a rate per annum equal to, if paid
within two (2) Business Days of the date that such Lender is required to make
payments of such amount pursuant to the preceding sentence, the Federal Funds
Effective Rate and thereafter at a rate equal to the Adjusted Base Rate. Each
Lender's obligation to make such payment to the Issuing Banks, and the rights of
the Issuing Banks to receive the same, shall be absolute and unconditional,
shall not be affected by any circumstance whatsoever and without regard to the
termination of this Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations of the
Borrowers hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such payment by
a Lender to the Issuing Banks, such Lender shall, automatically and without any
further action on the part of the Issuing Banks or such Lender, acquire a
participation in an amount equal to such payment (excluding the portion of such
payment constituting interest owing to the Issuing Banks) in the related
unreimbursed drawing portion of the Letter of Credit Obligation and in the
interest thereon and in the related Letter of Credit Documents, and shall have a
claim against the Borrowers with respect thereto.
3.5 REPAYMENT WITH REVOLVING LOANS.
On any day on which the Borrowers shall have requested, or been deemed to
have requested, a Revolving Loan advance to reimburse a drawing under a Letter
of Credit, the Administrative Agent shall give notice to the Lenders that a
Revolving Loan has been requested or deemed requested by the Borrowers to be
made in connection with a drawing under a Letter of Credit, in which case a
Revolving Loan advance comprised of Base Rate Loans (or LIBOR Loans to the
extent the Borrowers have complied with the procedures of Section 2.1(d)(i) with
respect thereto) shall be immediately made to the Borrowers by all Lenders
(notwithstanding any termination of the Commitments pursuant to Section 11.2)
pro rata based on the respective Applicable Percentages of the Lenders
(determined before giving effect to any termination of the Commitments pursuant
to Section 11.2) and the proceeds thereof shall be paid directly by the
Administrative Agent to the Issuing Banks for application to the respective
Letter of Credit Obligations. Each such Lender hereby irrevocably agrees to make
its Applicable Percentage of each such Revolving Loan immediately upon any such
request or deemed request in the amount, in the manner and on the date specified
in the preceding sentence notwithstanding (i) the amount of such borrowing may
not comply with the minimum amount for advances of Revolving Loans otherwise
required hereunder, (ii) whether any conditions specified in Article 5 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv)
failure for any such request or deemed request for Revolving Loan to be made by
the time otherwise required hereunder, (v) whether the date of such borrowing is
a date on which Revolving Loans are otherwise permitted to be made hereunder or
(vi) any termination of the Commitments relating thereto immediately prior to or
contemporaneously with such borrowing. In the event that any Revolving Loan
cannot for any reason be made on the date otherwise required above (including as
a result of the commencement of a bankruptcy or insolvency proceeding with
respect to any Borrower), then each such Lender hereby agrees that it shall
forthwith purchase (as of the date such borrowing would otherwise have occurred,
but adjusted for any payments received from the Borrowers on or after such date
and prior to such purchase) from the Issuing Banks such participations in the
outstanding Letter of Credit Obligations as shall be necessary to cause each
such Lender to share in such Letter of Credit Obligations ratably (based upon
the respective Applicable Percentages of the
45
Lenders (determined before giving effect to any termination of the Commitments
pursuant to Section 11.2)); provided that at the time any purchase of
participation pursuant to this sentence is actually made, the purchasing Lender
shall be required to pay to the applicable Issuing Bank, to the extent not paid
to such Issuing Bank by the Borrowers in accordance with the terms of Section
3.4, interest on the principal amount of participation purchased for each day
from and including the day upon which such borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at the
rate equal to, if paid within two (2) Business Days of the date of the Revolving
Loan advance, the Federal Funds Effective Rate, and thereafter at a rate equal
to the Adjusted Base Rate.
3.6 RENEWAL, EXTENSION.
The renewal or extension of any Letter of Credit shall, for purposes
hereof, be treated in all respects the same as the issuance of a new Letter of
Credit hereunder.
3.7 UNIFORM CUSTOMS AND PRACTICES.
The Issuing Banks may provide that the Letters of Credit shall be subject
to The Uniform Customs and Practice for Documentary Credits, as published as of
the date of issue by the International Chamber of Commerce (the "UCP"), in which
case the UCP may be incorporated by reference therein and deemed in all respects
to be a part thereof.
3.8 INDEMNIFICATION; NATURE OF DUTIES OF ISSUING BANKS.
(a) In addition to its other obligations under this Article 3, the
Borrowers agree to protect, indemnify, pay and save the Issuing Banks
harmless from and against any and all claims, demands, liabilities,
damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Banks may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any Letter of
Credit or (B) the failure of any Issuing Bank to honor a drawing under a
Letter of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
Governmental Authority (all such acts or omissions, herein called
"Government Acts").
(b) As among the Borrowers and the Issuing Banks, the Borrowers
shall assume all risks of the acts, omissions or misuse of any Letter of
Credit by the beneficiary thereof. The Issuing Banks shall not be
responsible, in the absence of gross negligence or willful misconduct: (i)
for the form, validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the application
for and issuance of any Letter of Credit, even if it should in fact prove
to be in any or all respects invalid, insufficient, inaccurate, fraudulent
or forged; (ii) for the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, that may prove to be invalid or ineffective for any
reason; (iii) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex
or otherwise, whether or not they be in cipher; (iv) for any loss or delay
in the transmission or otherwise of any document required in order to make
a drawing under a Letter of Credit or of the proceeds thereof; and (v) for
any consequences arising from causes beyond the control of the Issuing
Banks, including any Government Acts. None of the above shall affect,
impair, or prevent the vesting of the Issuing Banks' rights or powers
hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
the Issuing Banks, under or in connection
46
with any Letter of Credit or the related certificates, if taken or omitted
in good faith, shall not put such Issuing Bank under any resulting
liability to any Borrower. It is the intention of the parties that this
Agreement shall be construed and applied to protect and indemnify the
Issuing Banks against any and all risks involved in the issuance of the
Letters of Credit, all of which risks are hereby assumed by the Borrowers,
including any and all Government Acts. The Issuing Banks shall not, in any
way, be liable for any failure by the Issuing Banks or anyone else to pay
any drawing under any Letter of Credit as a result of any Government Acts
or any other cause beyond the control of the Issuing Banks.
(d) Nothing in this Section 3.8 is intended to limit the
reimbursement obligations of the Borrowers contained in Section 3.4 above.
The obligations of the Borrowers under this Section 3.8 shall survive the
termination of this Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or impair the
rights of the Issuing Banks to enforce any right, power or benefit under
this Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 3.8, the Borrowers shall have no obligation to indemnify any
Issuing Bank in respect of any liability incurred by such Issuing Bank (i)
to the extent arising out of the gross negligence or willful misconduct of
such Issuing Bank, as determined by a court of competent jurisdiction, or
(ii) caused by such Issuing Bank's failure to pay under any Letter of
Credit after presentation to it of a request strictly complying with the
terms and conditions of such Letter of Credit, as determined by a court of
competent jurisdiction, unless such payment is prohibited by any law,
regulation, court order or decree.
3.9 RESPONSIBILITY OF ISSUING BANKS.
It is expressly understood and agreed that the obligations of the Issuing
Banks hereunder to the Lenders are only those expressly set forth in this
Agreement and that the Issuing Banks shall be entitled to assume that the
conditions precedent set forth in Article 3 or 5 have been satisfied unless the
Issuing Banks shall have acquired actual knowledge that any such condition
precedent has not been satisfied; provided, however, that nothing set forth in
this Article 3 shall be deemed to prejudice the right of any Lender to recover
from any Issuing Bank any amounts made available by such Lender to such Issuing
Bank pursuant to this Article 3 in the event that it is determined by a court of
competent jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of such Issuing
Bank.
3.10 CONFLICT WITH LETTER OF CREDIT DOCUMENTS.
In the event of any conflict between this Agreement and any Letter of
Credit Document (including any letter of credit application), this Agreement
shall control.
ARTICLE 4
INTEREST AND FEES
4.1 INTEREST ON LOANS.
Subject to the provisions of Section 4.2, interest on the Loans shall be
payable (a) for Swingline Loans (all of which shall be Base Rate Loans) and
Revolving Loans that are Base Rate Loans, monthly in arrears on the first day of
each calendar month and the interest rate shall be equal to the Adjusted Base
Rate plus the Applicable Margin on the outstanding amount of each such Base Rate
Loan, and (b) for
47
Revolving Loans that are LIBOR Loans, on the last day of the applicable LIBOR
Interest Period (unless the LIBOR Interest Period is greater than three months,
then, also on the last day of each three-month period during such LIBOR Interest
Period), and the interest rate shall be equal to the Adjusted LIBO Rate plus the
Applicable Margin on the outstanding amount of each such LIBOR Loan. In the
event of any change in the Adjusted Base Rate, the rate hereunder shall change,
effective as of the day the Adjusted Base Rate changes. All interest rates and
fees hereunder shall be calculated based on a 365 day year for the actual number
of days elapsed, unless and except to the extent otherwise expressly provided
herein. If an interest payment date falls on a date which is not a Business Day,
then, such interest payment date shall be deemed to be the next succeeding
Business Day, except that, in the case of LIBOR Loans, where the next succeeding
Business Day falls in the next succeeding calendar month, then, such interest
payment date shall be deemed to be the next preceding Business Day.
4.2 INTEREST AFTER EVENT OF DEFAULT.
Interest on any amount of matured principal under the Loans, and interest
on the amount of principal under the Loans outstanding as of the date an Event
of Default occurs, and at all times thereafter until the earlier of the date
upon which (a) all Obligations have been paid and satisfied in full or (b) such
Event of Default shall have been cured or waived, shall be payable on demand at
a rate equal to the Adjusted Base Rate, plus the highest Applicable Margin, plus
two percent (2%) (the "Default Rate"). Interest shall be payable on any other
amount due hereunder and shall accrue at the Default Rate, from the date due and
payable until paid in full.
4.3 UNUSED LINE FEE.
On the last day of each calendar month, the Borrowers shall pay to the
Administrative Agent for the account of the Lenders the Unused Line Fee due in
respect of such calendar month.
4.4 LENDERS' FEES/ADMINISTRATIVE AGENT'S FEES.
On the Closing Date, the Administrative Agent shall pay to each Lender its
respective Lender's Fees that are required to be paid on the Closing Date
pursuant to the terms of such Lender's fee letter with the Administrative Agent.
The Borrowers shall pay all fees required to be paid to the Administrative Agent
under the Fee Letter at the times and in the amounts set forth therein.
4.5 LETTER OF CREDIT FEES.
(a) Letter of Credit Fees. In consideration of the issuance of
Letters of Credit hereunder, the Borrowers shall pay to the Administrative
Agent for the account of each Lender a fee (the "Letter of Credit Fee") on
such Lender's Applicable Percentage of the average daily maximum amount
available to be drawn under each such standby Letter of Credit computed at
a per annum rate for each day from the date of issuance to the date of
expiration equal to the Applicable Margin for LIBOR Loans in effect at
such time; provided that as of the date an Event of Default occurs, and at
all times thereafter until the earlier of the date upon which (a) all
Obligations have been paid and satisfied in full or (b) such Event of
Default shall have been cured or waived, the per annum rate shall be equal
to the Applicable Margin for LIBOR Loans plus two percent (2%).
(b) Issuing Bank Fees. In addition to the Letter of Credit Fee
payable pursuant to clause (a) above, the Borrowers shall pay to each
Issuing Bank for its own account without sharing by the other Lenders a
letter of credit fronting fee equal to 0.125% per annum of the faces
amount of each Letter of Credit issued by such Issuing Bank and any other
fees agreed to by the
48
Borrowers and such Issuing Bank from time to time and the customary
charges from time to time of such Issuing Bank with respect to the
issuance, amendment, transfer, administration, cancellation and conversion
of, and drawings under, such Letters of Credit (collectively, the "Issuing
Bank Fees").
(c) General. Accrued fees for Letters of Credit shall be computed on
the basis of a year of 365 days and shall be payable for the actual number
of days elapsed (including the first day but excluding the last day), and
shall be payable monthly in arrears on the first day of each month and on
the date the Revolving Credit Commitments terminate, commencing on the
first such date to occur after the date hereof, provided that any such
fees accruing after the date on which the Revolving Credit Commitments
terminate shall be payable on demand.
4.6 AUTHORIZATION TO CHARGE ACCOUNT.
The Borrowers hereby authorize the Administrative Agent to charge the
Borrowers' Loan accounts with the amount of all payments and fees due hereunder
to the Lenders, the Swingline Lender, the Administrative Agent and the Issuing
Banks as and when such payments become due. The Borrowers confirm that any
charges which the Administrative Agent may so make to the Borrowers' Loan
accounts as herein provided will be made as an accommodation to the Borrowers
and solely at the Administrative Agent's discretion.
4.7 INDEMNIFICATION IN CERTAIN EVENTS.
If, after the Closing Date, either (a) any change in or in the
interpretation of any law or regulation is introduced, including with respect to
reserve requirements, applicable to Bank of America or any other banking or
financial institution from whom any of the Lenders borrow funds or obtain credit
(a "Funding Bank") or any of the Lenders, or (b) a Funding Bank or any of the
Lenders complies with any future guideline or request from any central bank or
other Governmental Authority or (c) a Funding Bank or any of the Lenders
determines that the adoption of any applicable law, rule or regulation regarding
capital adequacy, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof has or would
have the effect described below, or a Funding Bank or any of the Lenders
complies with any request or directive regarding capital adequacy (whether or
not having the force of law) of any such authority, central bank or comparable
agency, and in the case of any event set forth in this clause (c), such
adoption, change or compliance has or would have the direct or indirect effect
of reducing the rate of return on any of the Lenders' capital as a consequence
of its obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
the Funding Bank's or Lenders' policies with respect to capital adequacy) by an
amount deemed by such Lender to be material, and the result of any of the
foregoing events described in clauses (a), (b) or (c) is or results in an
increase in the cost to any of the Lenders of funding or maintaining the
Revolving Credit Committed Amount, the Revolving Loans or the Letters of Credit,
then, the Borrowers shall from time to time upon demand by the Administrative
Agent, pay to the Administrative Agent additional amounts sufficient to
indemnify the Lenders against such increased cost (without duplication, however,
of any costs included in the definition of "LIBO Rate"). A certificate as to the
amount of such increased cost shall be submitted to the Parent by the
Administrative Agent and shall be conclusive and binding absent manifest error.
4.8 INABILITY TO DETERMINE INTEREST RATE.
If prior to the first day of any LIBOR Interest Period, (a) the
Administrative Agent shall have determined in good faith (which determination
shall be conclusive and binding upon the Borrowers) that,
49
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the LIBOR Rate for such LIBOR
Interest Period, (b) the Administrative Agent has received notice from the
Required Lenders that the LIBOR Rate determined or to be determined for such
LIBOR Interest Period will not adequately and fairly reflect the cost to such
Lenders of making or maintaining their LIBOR Loans during such LIBOR Interest
Period, or (c) Dollar deposits in the principal amounts of the LIBOR Loans to
which such LIBOR Interest Period is to be applicable are not generally available
in the London interbank market, the Administrative Agent shall give telecopy or
telephonic notice thereof to the Parent and the Lenders as soon as practicable
thereafter, and will also give prompt written notice to the Parent when such
conditions no longer exist. If such notice is given (i) any LIBOR Loans
requested to be made on the first day of such LIBOR Interest Period shall be
made as Base Rate Loans, (ii) any Loans that were to have been converted on the
first day of such LIBOR Interest Period to or continued as LIBOR Loans shall be
converted to or continued as Base Rate Loans and (iii) each outstanding LIBOR
Loan shall be converted, on the last day of the then current LIBOR Interest
Period thereof, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent, no further LIBOR Loans shall be made or continued as such,
nor shall the Borrowers have the right to convert Base Rate Loans to LIBOR
Loans.
4.9 ILLEGALITY.
Notwithstanding any other provision herein, if the adoption of or any
change in any law, treaty, rule or regulation or final, non-appealable
determination of an arbitrator or a court or other Governmental Authority or in
the interpretation or application thereof occurring after the Closing Date shall
make it unlawful for any Lender to make or maintain LIBOR Loans as contemplated
by this Agreement, (a) such Lender shall promptly give written notice of such
circumstances to the Parent and the Administrative Agent (which notice shall be
withdrawn whenever such circumstances no longer exist), (b) the commitment of
such Lender hereunder to make LIBOR Loans, continue LIBOR Loans as such and
convert a Base Rate Loan to LIBOR Loans shall forthwith be canceled and, until
such time as it shall no longer be unlawful for such Lender to make or maintain
LIBOR Loans, such Lender shall then have a commitment only to make a Base Rate
Loan when a LIBOR Loan is requested and (c) such Lender's Loans then outstanding
as LIBOR Loans, if any, shall be converted automatically to Base Rate Loans on
the respective last days of the then current LIBOR Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a LIBOR Loan occurs on a day which is not the last day of the then
current LIBOR Interest Period with respect thereto, the Borrowers shall pay to
such Lender such amounts, if any, as may be required pursuant to Section 4.10.
4.10 FUNDING INDEMNITY.
The Borrowers shall indemnify each Lender and to hold each Lender harmless
from any loss or expense which such Lender may sustain or incur (other than
through such Lender's gross negligence or willful misconduct) as a consequence
of (a) default by the Borrowers in making a borrowing of, conversion into or
extension of LIBOR Loans after the Borrowers have given a notice requesting the
same in accordance with the provisions of this Agreement, (b) default by the
Borrowers in making any prepayment of a LIBOR Loan after the Parent have given a
notice thereof in accordance with the provisions of this Agreement, and (c) the
making of a prepayment of LIBOR Loans on a day which is not the last day of an
LIBOR Interest Period with respect thereto. With respect to LIBOR Loans, such
indemnification may include an amount equal to the excess, if any, of (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or extended, for the period from the date of such prepayment
or of such failure to borrow, convert or extend to the last day of the
applicable LIBOR Interest Period (or, in the case of a failure to borrow,
convert or extend, the LIBOR Interest Period that would have commenced on the
date of such failure) in each case at the applicable rate of interest for such
LIBOR Loans provided for herein (excluding, however, the Applicable Margin
50
included therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank LIBOR market. This covenant shall survive the termination
of this Agreement and the payment of the Loans and all other amounts payable
hereunder.
ARTICLE 5
CONDITIONS PRECEDENT
The obligation of the Lenders to make any Revolving Loan or of the Issuing
Banks to issue or maintain any Letter of Credit hereunder is subject to the
satisfaction of, or waiver of, immediately prior to or concurrently with the
making of such Revolving Loan or issuance of such Letter of Credit the following
conditions precedent:
5.1 CLOSING CONDITIONS.
The obligation of each Lender to make the Loans and/or of the Issuing
Banks to issue and/or maintain Letters of Credit hereunder shall be subject to
the satisfaction, on or prior to the Closing Date, of the following conditions
precedent:
(a) Assignment of Agency. The Prior Administrative Agent shall have
assigned to the Administrative Agent the rights and duties of the Prior
Administrative Agent under the Existing Credit Agreement pursuant to an
assignment and assumption agreement duly executed by the parties thereto
and satisfactory to the Administrative Agent.
(b) Assignment of Existing Credit Agreement Commitments. The
"lenders" under the Existing Credit Agreement that will not be Lenders
shall have assigned to the Lenders their commitments under the Existing
Credit Agreement pursuant to assignment agreements duly executed by the
parties thereto and satisfactory to the Administrative Agent.
(c) Executed Loan Documents. Receipt by the Administrative Agent of
duly executed originals of this Agreement; the Notes; the Security
Documents; and all other Loan Documents, each in form and substance
satisfactory to the Administrative Agent in its sole discretion.
(d) Organizational Documents. Receipt by the Administrative Agent of
the following for each Credit Party:
(i) Charter Documents. Copies of the articles or certificates
of incorporation or other formation or charter documents of each
Credit Party certified to be true and complete as of a recent date
by the appropriate Governmental Authority of the state or other
jurisdiction of its incorporation or organization and certified by a
secretary or assistant secretary of such Credit Party to be true and
correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws or operating agreement or
similar agreement of each Credit Party certified by a secretary or
assistant secretary of such Credit Party to be true and correct as
of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board of
Directors or similar managing body of each Credit Party approving
and adopting the Loan Documents to which it is a party, the
transactions contemplated therein and authorizing execution and
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delivery thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and effect as
of the Closing Date.
(iv) Good Standing. Copies of certificates of good standing,
existence or its equivalent with respect to each Credit Party
certified as of a recent date by the appropriate Governmental
Authorities of the state or other jurisdiction of incorporation or
organization and each other jurisdiction in which the failure to so
qualify and be in good standing could reasonably be expected to have
a Material Adverse Effect.
(v) Incumbency. A certificate of each Credit Party certified
by a secretary or assistant secretary to be true and correct as of
the Closing Date, confirming the incumbency of the officer(s) of
each Credit Party authorized to execute the Loan Documents, together
with the matters disclosed in clauses (i) through (iv) hereinabove;
to be substantially in the form of Exhibit J.
(e) Financial Statements. Receipt by the Administrative Agent and
the Lenders of the Financials and other information described in Section
6.6 and such other information relating to the Credit Parties as the
Administrative Agent may reasonably require in connection with the
structuring and syndication of credit facilities of the type described
herein.
(f) Opinions of Counsel. Receipt by the Administrative Agent of an
opinion, or opinions (which shall cover, among other things, authority,
legality, validity, binding effect, enforceability and attachment and
perfection of liens), satisfactory to the Administrative Agent, addressed
to the Administrative Agent for the benefit of the Lenders and dated the
Closing Date, from legal counsel to the Credit Party, to be substantially
in the form of Exhibit K.
(g) Personal Property Collateral. Receipt by the Administrative
Agent of:
(i) searches of Uniform Commercial Code filings in the
jurisdiction of organization of each Credit Party, the jurisdiction
of the chief executive office of each Credit Party and each
jurisdiction where any Collateral is located or where a filing would
need to be made in order to perfect the Administrative Agent's
security interest in the Collateral, copies of the financing
statements on file in such jurisdictions and evidence that no Liens
exist other than Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Administrative
Agent's commercially reasonable judgment, to perfect the
Administrative Agent's security interest in the Collateral;
(iii) searches of ownership of intellectual property in the
appropriate governmental offices and such patent/trademark/copyright
filings as requested by the Administrative Agent in order to perfect
the Administrative Agent's security interest in the Collateral;
(iv) all stock certificates evidencing the Capital Stock
pledged to the Administrative Agent pursuant to the Pledge
Agreement, together with duly executed in blank undated stock powers
attached thereto;
(v) all instruments and chattel paper in the possession of any
of the Credit Parties, together with allonges or assignments as may
be necessary or appropriate to
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perfect the Administrative Agent's security interest in the
Collateral to the extent required under the Security Agreement; and
(vi) Lockbox Agreements with respect to all deposit accounts
of the Credit Parties, except for xxxxx cash and payroll accounts.
(h) Priority of Liens. Receipt by the Administrative Agent of
satisfactory evidence that (i) the Administrative Agent, on behalf of the
Lenders, holds a perfected, first priority Lien on all Collateral (subject
to clause (ii)) and (ii) none of the Collateral is subject to any other
Liens other than Permitted Liens.
(i) Closing Date Borrowing Base Certificate. Receipt by the
Administrative Agent of a Borrowing Base Certificate, certified by the
chief financial officer of the Parent to be true and correct as of not
earlier than July 18, 2005.
(j) Evidence of Insurance. Receipt by the Administrative Agent of
copies of insurance policies or certificates of insurance of the Credit
Parties evidencing liability and casualty insurance meeting the
requirements set forth in the Loan Documents, including naming the
Administrative Agent as loss payee on behalf of the Lenders and as
additional insured and copies of credit insurance policies insuring
foreign Accounts to be included as Eligible Accounts Receivable. Each loss
payee endorsement shall be substantially in the form of Exhibit L.
(k) Corporate Structure. The corporate capital and ownership
structure of the Parent and its Subsidiaries is described in Schedule 6.9.
Both the corporate capital and ownership structure and the senior
management shall be satisfactory to the Administrative Agent.
(l) Consents. Receipt by the Administrative Agent of evidence that
all governmental, shareholder and third party consents and approvals
required in connection with the transactions and the related financings
contemplated hereby and expiration of all applicable waiting periods
without any action being taken by any authority that could restrain,
prevent or impose any material adverse conditions on such transactions or
that could seek or threaten any of the foregoing, and no law or regulation
shall be applicable which in the judgment of the Administrative Agent
could have such effect.
(m) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against any Credit Party or its
assets that could reasonably be expected to have a Material Adverse
Effect.
(n) Other Indebtedness. Receipt by the Administrative Agent of
evidence that, after giving effect to the making of the Loans made on the
Closing Date, the Credit Parties shall have no Funded Indebtedness other
than the Indebtedness under the Loan Documents and as disclosed on
Schedule 1.1C.
(o) Closing Certificate. Receipt by the Administrative Agent of a
certificate or certificates executed by the president or chief financial
officer of the Parent as of the Closing Date, to be substantially in the
form of Exhibit M, stating that (i) after giving effect to the making of
the Loans and application of the proceeds thereof, each Credit Party is in
compliance with all existing financial obligations, (ii) all governmental,
shareholder and third party consents and approvals, if any, with respect
to the Loan Documents and the transactions contemplated thereby have been
obtained, (iii) no action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect any
53
Credit Party or any transaction contemplated by the Loan Documents, if
such action, suit, investigation or proceeding could reasonably be
expected to have a Material Adverse Effect and (iv) immediately after
giving effect to this Agreement, the other Loan Documents and all the
transactions contemplated therein to occur on such date, (A) each of the
Credit Parties is solvent, (B) no Default or Event of Default exists, (C)
all representations and warranties contained herein and in the other Loan
Documents are true and correct in all material respects, (D) the Credit
Parties are in compliance with each of the financial covenants set forth
in Article 8 and (E) the Borrowers shall have Excess Availability of at
least Twenty-Five Million Dollars ($25,000,000).
(p) Fees and Expenses. Receipt of the Administrative Agent of
payment from the Borrowers of all fees and expenses owed by them to the
Lenders and the Administrative Agent, including payment to the
Administrative Agent of the fees set forth in the Fee Letter.
(q) Account Designation Letter. Receipt by the Administrative Agent
of an account designation letter from the Parent (the "Account Designation
Letter"), in substantially the form of Exhibit N.
(r) Perfection Certificate. Receipt by the Administrative Agent of a
Perfection Certificate from each Credit Party, to be substantially in the
form of Exhibit O.
(s) Authorized Persons Letter. Receipt by the Administrative Agent
of a letter from the Parent regarding the authorization of certain Persons
(individuals) to request financial accommodations hereunder on behalf of
the Borrowers, to be substantially in the form of Exhibit P.
(t) Disbursement Instructions Letter. Receipt by the Administrative
Agent of a letter from the Parent regarding the disposition of the
proceeds of the initial disbursements of Revolving Loans hereunder, to be
substantially in the form of Exhibit Q.
(u) Intellectual Property Agreements. Receipt by the Administrative
Agent of an Amended and Restated Trademark Security Agreement, in
substantially the form of Exhibit R (the "Trademark Security Agreement"),
executed by each Credit Party owning trademarks registered with the U.S.
Patent & Trademark Office ("USPTO") on the Closing Date.
(v) Material Adverse Change. No Material Adverse Change, or
development reasonably likely to have a Material Adverse Effect, shall
have occurred since Xxxxx 00, 0000, (xx) no occurrence or event which is
reasonably likely to have a Material Adverse Effect shall have occurred
since March 31, 2005, and be continuing.
(w) Other. Receipt by the Administrative Agent of such other
documents, instruments, agreements or information as reasonably requested
by any Lender, including information regarding litigation, tax,
accounting, labor, insurance, pension liabilities (actual or contingent),
real estate leases, material contracts, debt agreements, property
ownership and contingent liabilities of the Borrowers.
5.2 CONDITION TO ALL LOANS AND LETTERS OF CREDIT.
(a) On the date of the making of any Loan or the issuance of any
Letter of Credit, both before and after giving effect thereto and to the
application of the proceeds therefrom, the following statements shall be
true to the satisfaction of the Administrative Agent (and each request for
a Loan and request for a Letter of Credit, and the acceptance by the
Borrowers of the
54
proceeds of such Loan or issuance of such Letter of Credit, shall
constitute a representation and warranty by the Borrowers that on the date
of such Loan or issuance of such Letter of Credit before and after giving
effect thereto and to the application of the proceeds therefrom, such
statements are true):
(i) the representations and warranties contained in this
Agreement are true and correct in all material respects on and as of
the date of such Loan or issuance of such Letter of Credit as though
made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier
date (in which case such representations and warranties shall have
been true and complete in all material respects on and as of such
earlier date);
(ii) no event has occurred and is continuing, or would result
from such Loan or issuance of such Letter of Credit or the
application of the proceeds thereof, which would constitute a
Default or an Event of Default under this Agreement; and
(iii) no Material Adverse Change, or development reasonably
likely to have a Material Adverse Effect shall have occurred and be
continuing.
(b) Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing to the extent such Notice of Borrowing is
required to be given pursuant to Section 2.1(d)(i) with respect to the
making of such Revolving Loan.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and the
Issuing Banks to issue and maintain the Letters of Credit, and to make available
the credit facilities contemplated hereby, each Credit Party hereby represents
and warrants to the Lenders and the Issuing Banks as of the Closing Date, the
Closing Date and on the date of each extension of credit hereunder, as follows:
6.1 ORGANIZATION AND QUALIFICATION.
Such Credit Party and each of its Domestic Subsidiaries (i) is a
corporation or limited liability company duly organized, validly existing and in
good standing under the laws of the state of its organization, (ii) has the
power and authority to own its properties and assets and to transact the
businesses in which it is presently, or proposes to be, engaged, and (iii) is
duly qualified and is authorized to do business and is in good standing in every
jurisdiction in which the failure to be so qualified could reasonably be
expected to have a Material Adverse Effect. Schedule 6.1 contains a true,
correct and complete list of all jurisdictions in which such Credit Party and
its Domestic Subsidiaries are qualified to do business as a foreign corporation
or foreign limited liability company as of the Closing Date.
6.2 SOLVENCY.
The fair saleable value of such Credit Party's assets exceeds all probable
liabilities, including those to be incurred pursuant to this Agreement. Such
Credit Party (i) does not have unreasonably small capital in relation to the
business in which it is or proposes to be engaged or (ii) has not incurred, and
does not believe that it will incur after giving effect to the transactions
contemplated by this Agreement, debts beyond its ability to pay such debts as
they become due.
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6.3 LIENS; INVENTORY.
There are no Liens in favor of third parties with respect to any of the
Collateral, including with respect to the Inventory, wherever located, other
than Permitted Liens. To the best of each Credit Party's knowledge, no lessor,
warehouseman, filler, processor or packer of such Credit Party has been granted
any Lien with respect to the Inventory maintained by such Credit Party at the
property of any such lessor, warehousemen, filler, processor or packer (other
than Permitted Liens). Upon the proper filing of financing statements and the
proper recordation of other applicable documents with the appropriate filing or
recordation offices in each of the necessary jurisdictions, the security
interests granted pursuant to the Loan Documents constitute, and shall at all
times, constitute valid and enforceable first priority and perfected Liens on
the Collateral (subject to Permitted Liens). The Credit Parties are, or will be,
at the time additional Collateral is acquired by them, the absolute owners of
the Collateral with full right to pledge, sell, consign, transfer and create a
Lien therein, free and clear of any and all Liens in favor of third parties,
except Permitted Liens. The Credit Parties and the Subsidiaries will, at their
expense, until payment in full of the Obligations and termination of the
Commitments, and, at the Administrative Agent's request, defend the Collateral
from any and all Liens (other than Permitted Liens) of any third party. The
Credit Parties will not, and will not permit any of their Subsidiaries to,
grant, create or permit to exist, any Lien upon the Collateral, or any proceeds
thereof, in favor of any third party (other than Permitted Liens). To the best
of each Credit Party's knowledge, no Inventory of any Credit Party has been
delivered to, or is being held by, any Customer for the purpose of the sale of
such Inventory by such Customer to third parties (expect that such Inventory may
be sold by any such Customer in the ordinary course of business when it becomes
obsolete or unnecessary).
6.4 NO CONFLICT.
The execution and delivery by such Credit Party of this Agreement and each
of the other Loan Documents executed and delivered in connection herewith and
the performance of the obligations of such Credit Party hereunder and thereunder
and the consummation by such Credit Party of the transactions contemplated
hereby and thereby: (i) are within the corporate or other organizational, as the
case may be, powers of such Credit Party; (ii) are duly authorized by the board
of directors or similar managing body of such Credit Party; (iii) are not in
contravention of the terms of the organizational documents of such Credit Party
or of any indenture, contract, lease, agreement instrument or other commitment
to which such Credit Party is a party or by which such Credit Party or any of
its properties are bound; (iv) do not require the consent, registration or
approval of any Governmental Authority or any other Person (except such as have
been duly obtained, made or given, and are in full force and effect); (v) do not
contravene any statute, law, ordinance regulation, rule, order or other
governmental restriction applicable to or binding upon such Credit Party; and
(vi) will not, except as contemplated herein for the benefit of the
Administrative Agent on behalf of the Lenders, result in the imposition of any
Liens upon any property of such Credit Party under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other material agreement or
instrument to which such Credit Party is a party or by which it or any of its
property may be bound or affected.
6.5 ENFORCEABILITY.
This Agreement and all of the other Loan Documents are the legal, valid
and binding obligations of such Credit Party, and with respect to those Loan
Documents executed and delivered by any Subsidiary, of each such Subsidiary, and
are enforceable against such Credit Party and such Subsidiaries, as the case may
be, in accordance with their terms except as such enforceability may be limited
by (i) the effect of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and (ii)
general principles of equity.
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6.6 FINANCIAL DATA; MATERIAL ADVERSE CHANGE.
(a) The Credit Parties have furnished to the Lenders the following
financial statements (the "Financials"): (i) the balance sheet of the
Credit Parties as of, and statements of income, retained earnings and cash
flows for, the fiscal year ended December 31, 2004 audited by independent
certified public accountants, and (ii) the unaudited balance sheet of the
Credit Parties as of, and statement of income, retained earnings and cash
flows for the period ending March 31, 2005 prepared by the chief financial
officer of the Parent. The Financials are, and the financial statements to
be furnished to the Lenders in accordance with Section 7.1 below will be,
prepared, in accordance with the books and records of the Credit Parties
and their Subsidiaries and fairly present the financial condition of the
Credit Parties and their Subsidiaries at the dates thereof and the results
of operations for the periods indicated (subject, in the case of unaudited
financial statements, to normal year-end adjustments), and such financial
statements have been and will be prepared in conformity with GAAP
consistently applied throughout the periods involved.
(b) Since the date of the Financials, there have been no changes in
the condition, financial or otherwise, of any of the Credit Parties or
their Subsidiaries as shown on the respective balance sheets of such
predecessor corporations and each of the Credit Parties and their
Subsidiaries described above, except (a) as contemplated herein and (b)
for changes in the ordinary course of business (none of which individually
or in the aggregate constitutes a Material Adverse Change).
(c) The Credit Parties have furnished to the Lenders projected
consolidated balance sheets, statements of operations and cash flows for
the Credit Parties and all Subsidiaries on a quarterly basis for fiscal
year 2005.
Except as disclosed on Schedule 6.6, such financial statements (except for
the projections) present fairly, in all material respects, the respective
consolidated financial position and results of operations and cash flows of the
respective entities as of such respective dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of such unaudited or pro forma statements. The projections
were prepared by the Parent in good faith based on the same accounting
principles as those used in preparation of the Financials and were based on
assumptions that were reasonable when made.
6.7 LOCATIONS OF OFFICES, RECORDS AND INVENTORY.
The Credit Parties' and their Domestic Subsidiaries' principal places of
business and chief executive offices are set forth in Schedule 6.7 and the books
and records of the Credit Parties and all chattel paper and all records of
accounts are located at the principal places of business and chief executive
offices of the Credit Parties and their Domestic Subsidiaries. There is no
jurisdiction in which any Credit Party or any of its Subsidiaries has any
Collateral (except for vehicles, Inventory held for shipment by third Persons,
Inventory in transit, Inventory held for processing by third Persons, or
immaterial quantities of assets, equipment or Inventory) other than those
jurisdictions listed on Schedule 6.7. Schedule 6.7 is a true, correct and
complete list of (i) the legal names and addresses of each warehouseman, filler,
processor and packer at which Inventory is stored, (ii) the address of the chief
executive offices of the Credit Parties and each of their Domestic Subsidiaries
and (iii) the address of all offices where records and books of account of the
Credit Parties and each of their Domestic Subsidiaries are kept. None of the
receipts received by any of the Credit Parties from any warehouseman, filler,
processor or packer states that the goods covered thereby are to be delivered to
bearer or to the order of a named person or to a named person and such named
person's assigns.
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6.8 FICTITIOUS BUSINESS NAMES.
Neither such Credit Party nor any of its Domestic Subsidiaries has used
any corporate or fictitious name during the five (5) years preceding the date
hereof, other than the name shown on its or such Subsidiary's articles or
certificate of incorporation or formation and as set forth on Schedule 6.8.
6.9 SUBSIDIARIES.
The only direct or indirect Subsidiaries of the Credit Parties are those
listed on Schedule 6.9. The Credit Parties are the record and beneficial owners
of all of the shares of Capital Stock of each of the Subsidiaries listed on
Schedule 6.9 as being owned by the Credit Parties, there are no proxies,
irrevocable or otherwise, with respect to such shares, and no equity securities
of any of the Subsidiaries are or may become required to be issued by reason of
any options, warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights convertible into
or exchangeable for, shares of any Capital Stock of any Subsidiary, and there
are no contracts, commitments, understandings or arrangements by which any
Subsidiary is or may become bound to issue additional shares of its Capital
Stock or securities convertible into or exchangeable for such shares. All of
such shares so owned by the Credit Parties are owned by them free and clear of
any Liens other than Permitted Liens.
6.10 NO JUDGMENTS OR LITIGATION.
Except as set forth on Schedule 6.10, no judgments, orders, writs or
decrees are outstanding against such Credit Party or any of its Subsidiaries nor
is there now pending or, to the best of such Credit Party's knowledge after
diligent inquiry, threatened any litigation, contested claim, investigation,
arbitration, or governmental proceeding by or against such Credit Party or any
of its Subsidiaries except judgments and pending or threatened litigation,
contested claims, investigations, arbitrations and governmental proceedings
which could not reasonably be expected to have a Material Adverse Effect.
6.11 NO DEFAULTS.
Neither such Credit Party nor any of its Subsidiaries is in default under
any term of any indenture, contract, lease, agreement, instrument or other
commitment to which any of them is a party or by which any of them is bound
which default has had or could be reasonably expected to have a Material Adverse
Effect. Such Credit Party knows of no dispute regarding any indenture, contract,
lease, agreement, instrument or other commitment to which it is a party or by
which it is bound which could reasonably be expected to have a Material Adverse
Effect.
6.12 NO EMPLOYEE DISPUTES.
There are no controversies pending or, to the best of such Credit Party's
knowledge after diligent inquiry, threatened between such Credit Party or any of
its Subsidiaries and any of their respective employees, other than those arising
in the ordinary course of business which could not, in the aggregate, reasonably
be expected to have a Material Adverse Effect.
6.13 COMPLIANCE WITH LAW.
Neither such Credit Party nor any of its Subsidiaries has violated or
failed to comply with any statute, law, ordinance, regulation, rule or order of
any foreign, federal, state or local government, or any other Governmental
Authority or any self regulatory organization, or any judgment, decree or order
of any court, applicable to its business or operations except where the
aggregate of all such violations or
58
failures to comply could not reasonably be expected to have a Material Adverse
Effect. The conduct of the business of such Credit Party and each of the
Subsidiaries is in conformity with all securities, commodities, energy, public
utility, zoning, building code, health, OSHA and environmental requirements and
all other foreign, federal, state and local governmental and regulatory
requirements and requirements of any self regulatory organizations, except where
such non-conformities could not reasonably be expected to have a Material
Adverse Effect. Neither such Credit Party nor any of its Subsidiaries has
received any notice to the effect that, or otherwise been advised that, it is
not in compliance with, and neither such Credit Party nor any of its
Subsidiaries has any reason to anticipate that any currently existing
circumstances are likely to result in the violation of any such statute, law,
ordinance, regulation, rule, judgment, decree or order which failure or
violation could reasonably be expected to have a Material Adverse Effect.
6.14 ERISA.
None of such Credit Party, any Subsidiary or any ERISA Affiliate maintains
or contributes to any Benefit Plan other than those listed on Schedule 6.14.
Each Benefit Plan has been and is being maintained and funded in accordance with
its terms and in compliance in all material respects with all provisions of
ERISA and the Internal Revenue Code applicable thereto. Such Credit Party, each
of its Subsidiaries and each ERISA Affiliate has fulfilled all obligations
related to the minimum funding standards of ERISA and the Internal Revenue Code
for each Benefit Plan, is in compliance in all material respects with the
currently applicable provisions of ERISA and of the Internal Revenue Code and
has not incurred any liability (other than routine liability for premiums) under
Title IV of ERISA, except where such liability could not reasonably be expected
to have a Material Adverse Effect. No Termination Event has occurred nor has any
other event occurred that may result in such a Termination Event, which could
reasonably be expected to have a Material Adverse Effect. No event or events
have occurred in connection with which such Credit Party, any of its
Subsidiaries, any ERISA Affiliate, any fiduciary of a Benefit Plan or any
Benefit Plan, directly or indirectly, would be subject to any material
liability, individually or in the aggregate, under ERISA, the Internal Revenue
Code or any other law, regulation or governmental order or under any agreement,
instrument, statute, rule of law or regulation pursuant to or under which any
such entity has agreed to indemnify or is required to indemnify any person
against material liability incurred under, or for a material violation or
failure to satisfy the requirements of, any such statute, regulation or order.
6.15 COMPLIANCE WITH ENVIRONMENTAL LAWS.
Except as disclosed on Schedule 6.15, (a) the operations of such Credit
Party and each of its Subsidiaries comply in all material respects with all
applicable federal, state or local environmental, health and safety statutes,
regulations, or ordinance and (b) none of the operations of such Credit Party or
any of its Subsidiaries is the subject of any judicial or administrative
proceeding alleging the violation of any federal, state or local environmental,
health or safety statute, regulation or ordinance, which, if determined
adversely to such Credit Party, could reasonably be expected to have a Material
Adverse Effect. Except as disclosed on Schedule 6.15, none of the operations of
such Credit Party or any of its Subsidiaries is the subject of any federal or
state investigation evaluating whether such Credit Party or any of its
Subsidiaries disposed any hazardous or toxic waste, substance or constituent or
other substance at any site that may require remedial action, or any federal or
state investigation evaluating whether any remedial action is needed to respond
to a release of any hazardous or toxic waste, substance or constituent, or other
substance into the environment, which could reasonably be expected to have a
Material Adverse Effect. Except as disclosed on Schedule 6.15, neither such
Credit Party nor any of its Subsidiaries have filed any notice under any federal
or state law indicating past or present treatment, storage or disposal of a
hazardous waste or reporting a spill or release of a hazardous or toxic waste,
substance or constituent, or other substance into the environment. Except as
disclosed on Schedule 6.15,
59
neither such Credit Party nor any of its Subsidiaries have any material
contingent liability of which such Credit Party has knowledge or reasonably
should have knowledge in connection with any release of any hazardous or toxic
waste, substance or constituent, or other substance into the environment, nor
has such Credit Party or any of its Subsidiaries received any notice, letter or
other indication of potential material liability arising from the disposal of
any hazardous or toxic waste, substance or constituent or other substance into
the environment.
6.16 USE OF PROCEEDS.
All proceeds of the Loans will be used only in accordance with Section
7.13.
6.17 INTELLECTUAL PROPERTY.
Such Credit Party and each of its Domestic Subsidiaries possesses adequate
assets, licenses, patents, patent applications, copyrights, service marks,
trademarks and trade names to continue to conduct its business as heretofore
conducted by it. Schedule 6.17 sets forth (a) all of the federal, state and
foreign registrations of trademarks, service marks and other marks, trade names
or other trade rights of such Credit Party and its Domestic Subsidiaries, and
all pending applications for any such registrations, (b) all of the patents and
copyrights of such Credit Party and its Domestic Subsidiaries and all pending
applications therefor and (c) all other trademarks, service marks and other
marks, trade names and other trade rights used by such Credit Party or any of
its Domestic Subsidiaries in connection with their businesses (collectively, the
"Proprietary Rights"). Such Credit Party and its Domestic Subsidiaries are
collectively the owners of each of the trademarks listed on Schedule 6.17 as
indicated on such schedule, and no other Person has the right to use any of such
marks in commerce either in the identical form or in such near resemblance
thereto as may be likely to cause confusion or to cause mistake or to deceive.
Each of the trademarks listed on Schedule 6.17 is a federally registered
trademark of such Credit Party or its Domestic Subsidiaries having the
registration number and issue date set forth on Schedule 6.17. Except as
disclosed on Schedule 6.17, no person has a right to receive any royalty or
similar payment in respect of any Proprietary Rights pursuant to any contractual
arrangements entered into by such Credit Party, or any of its Domestic
Subsidiaries and no person otherwise has a right to receive any royalty or
similar payment in respect of any such Proprietary Rights except as disclosed on
Schedule 6.17. Neither such Credit Party nor any of its Domestic Subsidiaries
has granted any license or sold or otherwise transferred any interest in any of
the Proprietary Rights to any other person. The use of each of the Proprietary
Rights by such Credit Party and its Domestic Subsidiaries does not infringe upon
or otherwise violate the rights of any third party in or to such Proprietary
Rights, and no proceeding has been instituted against or notice received by such
Credit Party or any of its Domestic Subsidiaries that are presently outstanding
alleging that the use of any of the Proprietary Rights infringes upon or
otherwise violates the rights of any third party in or to any of the Proprietary
Rights, except where such infringement or other violation could not reasonably
be expected to have a Material Adverse Effect. Neither such Credit Party nor any
of its Domestic Subsidiaries have given notice to any Person that it is
infringing on any of the Proprietary Rights and to the best of such Credit
Party's knowledge, no Person is infringing on any of the Proprietary Rights. All
of the Proprietary Rights of such Credit Party and its Domestic Subsidiaries are
valid and enforceable rights of such Credit Party and its Domestic Subsidiaries
and will not cease to be valid and in full force and effect by reason of the
execution and delivery of this Agreement or the Loan Documents or the
consummation of the transactions contemplated hereby or thereby.
6.18 LICENSES AND PERMITS.
Such Credit Party and each of its Subsidiaries have obtained and hold in
full force and effect, all material franchises, licenses, leases, permits,
certificates, authorizations, qualifications, easements, rights of way and other
rights and approvals which are necessary or appropriate for the operation of
their
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businesses as presently conducted and as proposed to be conducted. Neither of
such Credit Party nor any of its Subsidiaries is in violation of the terms of
any such franchise, license, lease, permit, certificate, authorization,
qualification, easement, right of way, right or approval except in any such case
which could not reasonably be expected to have a Material Adverse Effect.
6.19 TITLE TO PROPERTY.
Such Credit Party has (i) good and marketable fee simple title to or valid
leasehold interests in all of its real property, including the Real Estate (all
such real property and the nature of such Credit Party's or any Subsidiary's
interest therein is disclosed on Schedule 6.19) and (ii) good and marketable
title to all of its other property (including all real and other property in
each case as reflected in the Financials delivered to the Administrative Agent
hereunder), other than, with respect to properties described in clause (ii)
above, properties disposed of in the ordinary course of business or in any
manner otherwise permitted under this Agreement since the date of the most
recent audited consolidated balance sheet of such Credit Party, and in each case
subject to no Liens other than Permitted Liens. Such Credit Party and its
Subsidiaries enjoy peaceful and undisturbed possession of all its real property,
including the Real Estate, and there is no pending or, to the best of their
knowledge, threatened condemnation proceeding relating to any such real
property. The leases with respect to the leased property, together with any
leases of real property entered into by such Credit Party after the date hereof,
are referred to collectively as the "Leases". None of the Leases contains
provisions which have or could reasonably be expected to have a Material Adverse
Effect. No material default exists under any Lease. All of the Structures and
other tangible assets owned, leased or used by such Credit Party or any of its
Subsidiaries in the conduct of their respective businesses are (a) insured to
the extent and in a manner customary in the industry in which such Credit Party
or such Subsidiaries are engaged, (b) structurally sound with no known defects
which have or could reasonably be expected to have a Material Adverse Effect,
(c) in good operating condition and repair, subject to ordinary wear and tear,
(d) not in need of maintenance or repair except for ordinary, routine
maintenance and repair the cost of which is immaterial, (e) sufficient for the
operation of the businesses of such Credit Party and its Subsidiaries as
currently conducted and (f) in conformity with all applicable laws, ordinances,
orders, regulations and other requirements (including applicable zoning,
environmental, motor vehicle safety, occupational safety and health laws and
regulations) relating thereto, except where the failure to conform could not
reasonably be expected to have a Material Adverse Effect.
6.20 LABOR MATTERS.
Neither such Credit Party nor any of its Subsidiaries is engaged in any
material unfair labor practice. There is (a) no material unfair labor practice
complaint pending against such Credit Party or any of its Subsidiaries or, to
the best knowledge of such Credit Party, threatened against any of them, before
the National Labor Relations Board, and no grievance or arbitration proceeding
arising out of or under collective bargaining agreements that has or could
reasonably be expected to have a Material Adverse Effect is so pending against
such Credit Party or any of its Subsidiaries or, to the best knowledge of such
Credit Party, threatened against any of them, (b) no strike, labor dispute,
slowdown or stoppage pending against either of such Credit Party or any of its
Subsidiaries or, to the best knowledge of such Credit Party, threatened against
any of them which could reasonably be expected to have a Material Adverse
Effect, and (c) no union representation questions with respect to the employees
of such Credit Party or any Subsidiaries and no union organizing activities
which could reasonably be expected to have a Material Adverse Effect.
6.21 INVESTMENT COMPANY.
Neither such Credit Party nor any of its Subsidiaries is (a) an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act
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of 1940, as amended, (b) a "holding company" or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company," within the meaning of the Public Utility
Holding Company Act of 1935, as amended, or (c) subject to any other law which
purports to regulate or restrict its ability to borrow money or to consummate
the transactions contemplated by this Agreement or the other Loan Documents or
to perform its obligations hereunder or thereunder.
6.22 MARGIN SECURITY.
Such Credit Party does not own any margin stock and no portion of the
proceeds of any Loans or Letters of Credit shall be used by the Credit Parties
for the purpose of purchasing or carrying any "margin stock" (as defined in
Regulation U of the Board of Governors of the Federal Reserve System) or for any
other purpose which violates the provisions or Regulation T, U or X of said
Board of Governors or for any other purpose in violation of any applicable
statute or regulation, or of the terms and conditions of this Agreement.
6.23 NO EVENT OF DEFAULT.
No Default or Event of Default has occurred and is continuing.
6.24 TAXES AND TAX RETURNS.
Each Credit Party has filed, or caused to be filed, all material tax
returns (federal, state, local and foreign) required to be filed and paid all
amounts of taxes shown thereon to be due (including interest and penalties) and
has paid all other material taxes, fees, assessments and other governmental
charges (including mortgage recording taxes, documentary stamp taxes and
intangibles taxes) owing by it, except for such taxes (a) that are not yet
delinquent or (b) that are being contested in good faith and by proper
proceedings, and against which adequate reserves are being maintained in
accordance with GAAP. None of the Credit Parties is aware of any proposed
material tax assessments against it or any other Credit Party.
6.25 NO OTHER INDEBTEDNESS.
Such Credit Party has no Indebtedness that is senior, pari passu or
subordinated in right of payment to their Indebtedness to the Lenders hereunder,
except for Permitted Indebtedness.
6.26 STATUS OF ACCOUNTS.
Each Account is based on an actual and bona fide sale and delivery of
goods or rendition of services to customers, made by such Credit Party in the
ordinary course of its business; the goods and inventory being sold and the
Accounts created are its exclusive property and are not and shall not be subject
to any Lien, consignment arrangement, encumbrance, security interest or
financing statement whatsoever, other than the Permitted Liens; and such Credit
Party's customers have accepted the goods or services, owe and are obligated to
pay the full amounts stated in the invoices according to their terms, without
any dispute, offset, defense, counterclaim or contra that could reasonably be
expected to have, when aggregated with any such other disputes, offsets,
defenses, counterclaims or contras, a Material Adverse Effect. Such Credit Party
confirms to the Lenders that any and all taxes or fees relating to its business,
its sales, the Accounts or the goods relating thereto, are its sole
responsibility and that same will be paid by such Credit Party when due (unless
duly contested and adequately reserved for) and that none of said taxes or fees
is or will become a lien on or claim against the Accounts.
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6.27 REPRESENTATIONS AND WARRANTIES.
As of the Closing Date, each of the representations and warranties made in
the Loan Documents by each of the Credit Parties and their Subsidiaries, and to
the knowledge of each such Credit Party and its Subsidiaries, each other party
thereto is true and correct in all material respects, and such representations
and warranties are hereby incorporated herein by reference with the same effect
as though set forth in their entirety herein, as qualified therein.
6.28 SURVIVAL OF REPRESENTATIONS.
All representations made by such Credit Party in this Agreement and in any
other Loan Document shall survive the execution and delivery hereof and thereof.
6.29 AFFILIATE TRANSACTIONS.
Except as set forth on Schedule 6.29, neither such Credit Party nor any of
its Subsidiaries is a party to or bound by any agreement or arrangement (whether
oral or written) to which any Affiliate of such Credit Party or Subsidiary is a
party except (a) in the ordinary course of, and pursuant to the reasonable
requirements of, such Credit Party's or such Subsidiary's business and (b) upon
fair and reasonable terms no less favorable to such Credit Party and such
Subsidiary than it could obtain in a comparable arm's-length transaction with an
unaffiliated Person.
6.30 ACCURACY AND COMPLETENESS OF INFORMATION.
All factual information heretofore, contemporaneously or hereafter
furnished by or on behalf of the Credit Parties or any of their respective
Subsidiaries in writing to the Administrative Agent, any Lender, or the
Independent Accountant for purposes of or in connection with this Agreement or
any Loan Documents, or any transaction contemplated hereby or thereby is or will
be true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information not misleading at such time.
There is no fact now known to any officer of any Credit Party or any of its
Subsidiaries which has, or would have, a Material Adverse Effect which fact has
not been set forth herein, in the Financials, or any certificate, opinion or
other written statement made or furnished by any Credit Party to the
Administrative Agent.
6.31 OFAC.
No Credit Party, nor any Subsidiary of any Credit Party (i) is a person
whose property or interest in property is blocked or subject to blocking
pursuant to Section 1 of Executive Order 13224 of September 23, 2001 Blocking
Property and Prohibiting Transactions With Persons Who Commit, Threaten to
Commit, or Support Terrorism (66 Fed. Reg. 49079 (2001)), (ii) engages in any
dealings or transactions prohibited by Section 2 of such executive order, or is
otherwise associated with any such person in any manner violative of Section 2
of such executive order, or (iii) is a person on the list of Specially
Designated Nationals and Blocked Persons or subject to the limitations or
prohibitions under any other U.S. Department of Treasury's Office of Foreign
Assets Control regulation or executive order. The regulations and executive
orders described in clauses (i) through (iii) of the preceding sentence are
referred to herein as "OFAC Regulations".
6.32 PATRIOT ACT.
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The Credit Parties are in compliance, in all material respects, with the
(i) the Trading with the Enemy Act, as amended, and each of the foreign assets
control regulations of the United States Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) and any other enabling legislation or executive order
relating thereto (collectively, the "FAC Regulations"), and (ii) the Uniting And
Strengthening America By Providing Appropriate Tools Required To Intercept And
Obstruct Terrorism (USA Patriot Act of 2001). No part of the proceeds of the
Loans will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in violation
of the United States Foreign Corrupt Practices Act of 1977, as amended (the
"FCPA").
ARTICLE 7
AFFIRMATIVE COVENANTS
Until termination of this Agreement and the Commitments hereunder and
payment and satisfaction of all Obligations (other than then contingent
indemnification obligations) due or to become due hereunder, each Credit Party
agrees that, unless the Required Lenders shall have otherwise consented in
writing:
7.1 FINANCIAL INFORMATION.
The Parent will furnish to the Lenders the following information within
the following time periods:
(a) within ninety (90) days after the close of the fiscal year of
the Parent, (i) the audited consolidated and unaudited consolidating
balance sheets and statements of income and retained earnings and of
changes in cash flow of the Parent and its Subsidiaries, for such year,
each in reasonable detail, each setting forth in comparative form the
corresponding figures for the preceding year, prepared in accordance with
GAAP, and accompanied by a report and unqualified opinion of Ernst & Young
LLP, or other Independent Accountant selected by the Parent and approved
by the Administrative Agent.
(b) within forty-five (45) days after the end of each fiscal quarter
of the Parent other than the final fiscal quarter, unaudited consolidated
and consolidating financial statements as of the end of such period and
for such period then ended and for the period from the beginning of the
current fiscal year to the end of such period, setting forth in
comparative form the corresponding figures for the comparable period in
the preceding fiscal year, prepared in accordance with GAAP (except that
such quarterly statements need not include footnotes and subject to
year-end audit adjustments) and certified by any officer described in
paragraph (d) below;
(c) within forty-five (45) days after the end of each fiscal month
of January or February of each fiscal year of the Parent and within thirty
(30) days after the end of each other fiscal month of the Parent other
than the final month of each fiscal quarter, unaudited consolidated and
consolidating financial statements as of the end of such period and for
such period then ended and for the period from the beginning of the
current fiscal year to the end of such period, setting forth in
comparative form the corresponding figures for the comparable period in
the preceding fiscal year, prepared in accordance with GAAP (except that
such monthly
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statements need not include footnotes and subject to year-end audit
adjustments) and certified by an Authorized Officer of the Parent;
(d) at the time of delivery of each monthly, quarterly and annual
statement, a Compliance Certificate, executed by an Authorized Officer of
the Parent;
(e) not later than 12:00 Noon on the second Business Day of each
week, a certificate, to be substantially in the form of Exhibit T (the
"Borrowing Base Certificate"), duly completed and certified by an
Authorized Officer of the Parent, detailing the Credit Parties' Eligible
Accounts Receivable as of the most recent date of determination (which
shall be determined not less frequently than monthly) and Eligible
Inventory as of each Friday of the immediately preceding week (unless the
Administrative Agent requires otherwise, in its commercially reasonable
judgment). Notwithstanding the foregoing, if (i) no Event of Default or
Default exists, and (ii) Average Excess Availability is at least Ten
Million Dollars ($10,000,000), the Parent, at its election, may defer the
reporting of the Borrowing Base from weekly to monthly, in which event
such report shall be due not later than the thirtieth (30th) day of each
month (or if such day is not a Business Day, then, on the next succeeding
Business Day). In addition, on the thirtieth (30th) day of each month (or
if such day is not a Business Day, then on the next succeeding Business
Day), the Parent shall furnish a written report to the Lenders setting
forth (i) the accounts receivable aged trial balance at the immediately
preceding month end for each account debtor, aged by due date, which aging
reports shall indicate which Accounts are current, up to 30, 30-to-60 and
over 60 days past due and shall list the names and addresses of all
applicable account debtors, (ii) a monthly accounts payable aging with
such aging to be in form satisfactory to the Administrative Agent, (iii) a
schedule of Inventory owned by each Credit Party by location and category,
in summary form, together with, on at least a quarterly basis, a detailed
report in respect thereof, and (iv) a monthly report on the addition of
any new locations of Inventory (including ISA Sites) and the entry into
any new ISA. The Administrative Agent may, but shall not be required to,
rely on each Borrowing Base Certificate delivered hereunder as accurately
setting forth the available Borrowing Base for all purposes of this
Agreement until such time as a new Borrowing Base Certificate is delivered
to the Administrative Agent in accordance herewith; Borrowing Base
Certificates may be prepared and submitted to the Lenders on a more
frequent basis than weekly (or, in the Administrative Agent's discretion,
less frequently, but in no case less than monthly); provided, however,
that such certificate complies with the requirements set forth elsewhere
herein;
(f) promptly upon receipt thereof, copies of all management letters
and other material reports which are submitted to any Credit Party by its
Independent Accountant in connection with any annual or interim audit of
the books of such Credit Party made by such accountants;
(g) as soon as practicable but, in any event, within ten (10)
Business Days after the issuance thereof, copies of such other financial
statements and reports as the Parent shall send to its stockholders as
such, and copies of all regular and periodic reports which the Parent may
be required to file with the Securities and Exchange Commission or any
similar or corresponding governmental commission, department or agency
substituted therefor, or any similar or corresponding Governmental
Authority;
(h) no later than the last Business Day of January during each year
when this Agreement is in effect, a business plan and budget for the
current fiscal year of the Parent which includes projected consolidated
and consolidating balance sheets, statements of income and
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statements of cash flows on a monthly basis for such fiscal year, together
with projections of Loan usage and Excess Availability for such fiscal
year;
(i) promptly and in any event within two (2) Business Days after
becoming aware of the occurrence of a Default or Event of Default, a
certificate of Authorized Officer of the Parent specifying the nature
thereof and the Credit Parties' proposed response thereto, each in
reasonable detail; and
(j) with reasonable promptness, such other data as the
Administrative Agent or any of the Lenders may reasonably request.
7.2 INVENTORY.
Within thirty (30) days after the end of each month, upon the request of
the Administrative Agent from time to time, the Credit Parties will provide to
the Administrative Agent written statements listing items of Inventory in
reasonable detail as requested by the Administrative Agent.
7.3 CORPORATE EXISTENCE.
Each Credit Party and each of its Subsidiaries (a) will maintain its
current corporate or other organizational existence, will maintain in full force
and effect all material licenses, bonds, franchise, leases, trademarks and
qualifications to do business, (b) will obtain or maintain patents, contracts
and other rights necessary or desirable to the profitable conduct of their
businesses, (c) will continue in, and limit their operations to, the same
general lines of business as that presently conducted by them and (d) will
comply with all applicable laws and regulations of any federal, state or local
Governmental Authority, except where noncompliance could not reasonably be
expected to have a Material Adverse Effect.
7.4 ERISA.
The Credit Parties will deliver to the Administrative Agent, at the Credit
Parties' expense, the following information at the times specified below:
(a) within ten (10) Business Days after any Credit Party, any
Subsidiary or any ERISA Affiliate knows or has reason to know that a
Termination Event has occurred which could reasonably be expected to have
a Material Adverse Effect, a written statement of the chief financial
officer or controller of the Parent describing such Termination Event and
the action, if any, which the Credit Parties or other such entities have
taken, are taking or propose to take with respect thereto, and when known,
any action taken or threatened by the Internal Revenue Service, DOL or
PBGC with respect thereto;
(b) within ten (10) Business Days after any Credit Party, any
Subsidiary or any ERISA Affiliate knows or has reason to know that a
prohibited transaction (as defined in Section 406 of ERISA and Section
4975 of the Internal Revenue Code) has occurred which could reasonably be
expected to have a Material Adverse Effect, a statement of the chief
financial officer or controller of the Parent describing such transaction
and the action which the Credit Parties or other such entities have taken,
are taking or propose to take with respect thereto;
(c) within three (3) Business Days after the filing thereof with the
Internal Revenue Service, a copy of each funding waiver request filed with
respect to any Benefit Plan and all
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communications received by any Credit Party, involving a sum in excess of
Five Hundred Thousand Dollars ($500,000) any Subsidiary or any ERISA
Affiliate with respect to such request;
(d) within three (3) Business Days after receipt by any Credit
Party, any Subsidiary or any ERISA Affiliate of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice;
(e) within ten (10) Business Days after receipt by any Credit Party,
any Subsidiary or any ERISA Affiliate of a notice regarding the imposition
of withdrawal liability involving a sum in excess of Five Hundred Thousand
Dollars ($500,000), copies of each such notice;
(f) within ten (10) Business Days after any Credit Party, any
Subsidiary or any ERISA Affiliate fail to make a required installment or
any other required payment under Section 412 of the Internal Revenue Code
on or before the due date for such installment or payment, a notification
of such failure; and
(g) within three (3) Business Days after any Credit Party, any
Subsidiary or any ERISA Affiliate know (a) a Multiemployer Plan has been
terminated, (b) the administrator or plan sponsor of a Multiemployer Plan
intends to terminate a Multiemployer Plan, or (c) the PBGC has instituted
or will institute proceedings under Section 4042 of ERISA to terminate a
Multiemployer Plan, a written statement setting forth any such event or
information, except where such termination under clauses (a), (b) or (c)
could not reasonably be expected to have a Material Adverse Effect.
For purposes of this Section 7.4, any Credit Party, any Subsidiary and any
ERISA Affiliate shall be deemed to know all facts known by the administrator of
any Plan of which such entity is the plan sponsor.
The Credit Parties will establish, maintain and operate all Plans to
comply in all material respects with the provisions of ERISA, the Internal
Revenue Code, and all other applicable laws, and the regulations and
interpretations thereunder other than to the extent that the Credit Parties are
in good faith contesting by appropriate proceedings the validity or implication
of any such provision, law, rule, regulation or interpretation.
7.5 PROCEEDINGS OR ADVERSE CHANGES.
The Credit Parties will as soon as possible, and in any event within five
(5) Business Days after any Credit Party learns of the following, give written
notice to the Administrative Agent of (i) any material proceeding(s) in which
the Credit Parties are alleged to have liability in excess of Five Hundred
Thousand Dollars ($500,000) being instituted or threatened to be instituted by
or against any Credit Party or any of its Subsidiaries in any federal, state,
local or foreign court or before any commission or other regulatory body
(federal, state, local or foreign), and (ii) any Material Adverse Change.
Provision of such notice by the Credit Parties will not constitute a waiver or
excuse of any Default or Event of Default occurring as a result of such changes
or events.
7.6 ENVIRONMENTAL MATTERS.
Each Credit Party will conduct its business and the businesses of each of
the Subsidiaries so as to comply in all material respects with all environmental
laws, regulations, and ordinances in all jurisdictions in which any of them is
or may at any time be doing business including environmental land use,
occupational safety or health laws, regulations, ordinances, or permits in all
jurisdictions in which
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any of them is or may at any time be doing business, except to the extent that
any Credit Party or any of its Subsidiaries are contesting, in good faith by
appropriate legal proceedings, any such law, regulation, direction, ordinance,
or permit or the interpretation thereof or application thereof; provided,
further, that each Credit Party and each of the Subsidiaries will materially
comply with the order of any court or other governmental body of the applicable
jurisdiction relating to such laws unless such Credit Party or the Subsidiaries
shall currently be prosecuting an appeal or proceedings for review and shall
have secured a stay of enforcement or execution or other arrangement postponing
enforcement or execution pending such appeal or proceedings for review. If any
Credit Party or any of its Subsidiaries shall (a) receive written notice that
any material violation of any federal, state or local environmental law,
regulation, ordinance may have been committed or is about to be committed by
such Credit Party or any of its Subsidiaries, (b) receive written notice from a
governmental agency that any administrative or judicial complaint or order has
been filed or is about to be filed against such Credit Party or any of its
Subsidiaries alleging material violations of any federal, state or local
environmental law, regulation, ordinance or permit, or requiring such Credit
Party or any of its Subsidiaries to take action in connection with the release
of toxic or hazardous substances into the environment or (c) receive any written
notice from a federal, state, or local governmental agency alleging that such
Credit Party or any of its Subsidiaries may be materially liable or responsible
for costs associated with a response to or cleanup of a release of a toxic or
hazardous substance into the environment or any damages caused thereby, the
Credit Parties will provide the Administrative Agent with a copy of such notice
within forty-five (45) days after the receipt thereof by the applicable Credit
Party or any of its Subsidiaries. Within forty-five (45) days after any Credit
Party learns of the enactment or promulgation of any federal, state or local
environmental law, regulation, ordinance, which could reasonably have a Material
Adverse Effect, such Credit Party will provide the Administrative Agent with
notice thereof. Each Credit Party will promptly take all actions necessary to
prevent the imposition of any Liens on any of its properties arising out of or
related to any environmental matters.
7.7 BOOKS AND RECORDS; INSPECTION.
Each Credit Party will, and will cause each of its Subsidiaries to,
maintain books and records pertaining to the Collateral in such detail, form and
scope as is consistent with good business practice. Each Credit Party agrees
that upon at least three (3) Business Days advance notice (which notice
requirement shall be deemed waived during any time that an Event of Default
exists), the Administrative Agent or its agents may enter upon the premises of
each Credit Party or any of its Subsidiaries at any time and from time to time,
during normal business hours, to enable the Administrative Agent's internal
auditors or outside third-party designees:
(a) to conduct field examinations and inspections of the Collateral
and facilities, books and records of the Credit Parties; provided that (i)
if Average Excess Availability is greater than or equal to Ten Million
Dollars ($10,000,000) and if no Event of Default has occurred and is then
continuing, not more than one such field examination and inspection shall
be conducted in each fiscal year or (ii) if Average Excess Availability is
less than Ten Million Dollars ($10,000,000) or if an Event of Default has
occurred and is then continuing, the frequency of such field examinations
and inspections shall be determined by the Administrative Agent in its
commercially reasonable judgment, and, in each case covered by clause (i)
or (ii) above, the cost of such field examinations and inspections shall
be borne by the Credit Parties; and
(b) to appraise the Inventory; provided that (i) if Average Excess
Availability is greater than or equal to Ten Million Dollars ($10,000,000)
and if no Event of Default has occurred and is then continuing, not more
than one such appraisal may be conducted in each 18 consecutive calendar
month period, and the cost of such appraisal shall be borne by the
Administrative Agent, (ii) if Average Excess Availability is less than Ten
Million Dollars
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($10,000,000) and if no Event of Default has occurred and is then
continuing, the frequency of Inventory appraisals shall be determined by
the Administrative Agent in its commercially reasonable judgment and the
costs of such appraisals shall be borne as follows: (A) the Credit Parties
shall bear the costs of not more than one such appraisal in any twelve
consecutive calendar month period and (B) the Administrative Agent shall
bear the cost of any such appraisals in excess of one appraisal in any
twelve consecutive calendar month period, or (iii) if an Event of Default
has occurred and is then continuing, the frequency of Inventory appraisals
shall be determined by the Administrative Agent in its commercially
reasonable judgment and the cost of all such appraisals shall be borne by
the Credit Parties.
The Lenders, in the reasonable discretion of the Administrative Agent, may
accompany the Administrative Agent at their sole expense in connection with the
foregoing examinations, inspections and appraisals. In addition to such
examinations, inspections and appraisals, the Administrative Agent shall have
the right at any time to inspect and/or copy (at the Credit Parties' expense)
any and all records pertaining to the Collateral, to discuss the affairs,
finances and business of any Credit Party with any officers, employees and
directors of any Credit Party or with the Independent Accountant, and to verify
(in the name of a Credit Party) Eligible Accounts Receivable and Eligible
Inventory.
Each Credit Party agrees to afford the Administrative Agent at least
thirty (30) days' prior written notice of any change in the location of any
Collateral (other than Inventory held for shipment by third Persons, Inventory
in transit, Inventory held for processing by third Persons or immaterial
quantities of assets, equipment or Inventory) or in the location of its chief
executive office or place of business from the locations specified in Schedule
6.7, and to execute in advance of such change, cause to be filed and/or
delivered to the Administrative Agent any financing statements or other
documents required by the Administrative Agent, all in form and substance
satisfactory to the Administrative Agent. Each Credit Party agrees to advise the
Administrative Agent promptly, in sufficient detail, of any substantial change
relating to the type, quantity or quality of the Collateral or any event which
could reasonably be expected to have a Material Adverse Effect. Each Credit
Party agrees to furnish any Lender with such other information regarding its
business affairs and financial condition as such Lender may reasonably request
from time to time.
7.8 COLLATERAL RECORDS.
Each Credit Party will execute and deliver to the Administrative Agent,
from time to time, solely for the Administrative Agent's convenience in
maintaining a record of the Collateral, such written statements and schedules as
the Administrative Agent may reasonably require, including those described in
Section 7.1, designating, identifying or describing the Collateral pledged to
the Lenders hereunder. Each Credit Party's failure, however, to promptly give
the Administrative Agent such statements or schedules shall not affect,
diminish, modify or otherwise limit the Lenders' security interests in the
Collateral. Such Credit Party agrees to maintain such books and records
regarding Accounts and the other Collateral as the Administrative Agent may
reasonably require, and agrees that such books and records will reflect the
Lenders' interest in the Accounts and such other Collateral.
7.9 SECURITY INTERESTS.
Each Credit Party will defend the Collateral against all claims and
demands of all Persons at any time claiming the same or any interest therein.
Each Credit Party agrees to comply with the requirements of all state and
federal laws in order to grant to, and maintain for the benefit of, the Lenders
valid and perfected security interests in the Collateral. The Administrative
Agent is hereby authorized by each Credit Party to file any financing statements
covering the Collateral. Each Credit Party agrees to do whatever the
Administrative Agent may reasonably request, from time to time, by way of:
filing notices
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of liens, financing statements, fixture filings and amendments, renewals and
continuations thereof; cooperating with the Administrative Agent's custodians;
keeping stock records; using commercially reasonable efforts to obtain waivers
from landlords and mortgagees and from warehousemen, fillers, processors and
packers and their respective landlords and mortgagees; paying claims, which
might if unpaid, become a Lien (other than a Permitted Lien) on the Collateral;
assigning its rights to the payment of Accounts pursuant to the Assignment of
Claims Act of 1940, as amended (31 U.S.C. Section. 3727 et seq.) (the failure of
which so to assign will permit the Administrative Agent to exclude such Accounts
from the Borrowing Base); and performing such further acts as the Administrative
Agent may reasonably require in order to effect the purposes of this Agreement
and the other Loan Documents. Any and all fees, costs and expenses of whatever
kind and nature (including any Taxes, reasonable attorneys' fees or costs for
insurance in accordance with Section 7.10), which the Administrative Agent may
incur with respect to the Collateral or the Obligations: in filing public
notices; in preparing or filing documents; making title examinations or
rendering opinions; in protecting, maintaining, or preserving the Collateral or
its interest therein; in enforcing or foreclosing the Liens hereunder, whether
through judicial procedures or otherwise; or in defending or prosecuting any
actions or proceedings arising out of or relating to its transactions with any
Credit Party or any of its Subsidiaries under this Agreement or any other Loan
Document, will be borne and paid by the Credit Parties. If same are not promptly
paid by the Credit Parties, the Administrative Agent may pay same on the Credit
Parties' behalf, and the amount thereof shall be an Obligation secured hereby
and due to the Administrative Agent on demand.
7.10 INSURANCE; CASUALTY LOSS.
Each Credit Party will, and will cause each of the Domestic Subsidiaries
to, maintain public liability insurance, business interruption insurance, third
party property damage insurance and replacement value insurance on the
Collateral under such policies of insurance, with such insurance companies, in
such amounts and covering such risks as are at all times and in each case
satisfactory to the Administrative Agent in its commercially reasonable
judgment. All policies covering the Collateral shall name the Administrative
Agent as mortgagee/loss payee in case of loss, as its interests may appear, and
shall contain such other provisions as the Administrative Agent may reasonably
require to fully protect the Administrative Agent's interest in the Collateral
and to any payments to be made under such policies. All liability insurance
policies shall name the Administrative Agent as additional insured. True copies
of all original insurance policies or certificates of insurance evidencing such
insurance covering the Collateral shall be delivered to the Administrative Agent
on or prior to the Closing Date, premium prepaid, with the loss payable
endorsement in the Administrative Agent's favor, and shall provide for not less
than thirty (30) days prior written notice to the Administrative Agent, of the
exercise of any right of cancellation. In the event any Credit Party or any of
its Domestic Subsidiaries fail to respond in a timely and appropriate manner (as
determined by the Administrative Agent in its commercially reasonable judgment)
with respect to collecting under any insurance policies required to be
maintained under this Section 7.10, the Administrative Agent shall have the
right, in the name of the Administrative Agent, any Credit Party or any Domestic
Subsidiary, to file claims under such insurance policies, to receive and give
acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies. Each Credit Party
will provide written notice to the Lenders of the occurrence of any of the
following events within five (5) Business Days after it receives knowledge or
notice of the occurrence of such event: any asset or property owned or used by
any Credit Party or any of its Domestic Subsidiaries is (i) materially damaged
or destroyed, or suffers any other loss or (ii) is condemned, confiscated or
otherwise taken, in whole or in part, or the use thereof is otherwise diminished
so as to render impracticable or unreasonable the use of such asset or property
for the purpose to which such asset or property were used immediately prior to
such condemnation, confiscation or taking, by exercise of the powers of
condemnation or eminent domain or otherwise, and in either case the amount of
the damage, destruction, loss or diminution in value of the
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Collateral which is in excess of Five Hundred Thousand Dollars ($500,000)
(collectively, a "Casualty Loss"). Each Credit Party will diligently file and
prosecute its claim or claims for any award or payment in connection with a
Casualty Loss. In the event of a Casualty Loss, the Credit Parties will pay to
the Administrative Agent, promptly upon receipt thereof, any and all insurance
proceeds and payments received by any Credit Party or any of its Domestic
Subsidiaries on account of damage, destruction or loss of all or any portion of
the Collateral. The Administrative Agent may, at its election and in its
commercially reasonable judgment, either (a) apply the proceeds realized from
Casualty Losses to payment of accrued and unpaid interest or outstanding
principal of the Revolving Loans or (b) pay such proceeds to the Credit Parties
to be used to repair, replace or rebuild the asset or property or portion
thereof that was the subject of the Casualty Loss. After the occurrence and
during the continuance of an Event of Default, (i) no settlement on account of
any such Casualty Loss shall be made without the consent of the Lenders and (ii)
the Administrative Agent may participate in any such proceedings and the Credit
Parties will deliver to the Administrative Agent such documents as may be
requested by the Administrative Agent to permit such participation and will
consult with the Administrative Agent, its attorneys and agents in the making
and prosecution of such claim or claims. Each Credit Party hereby irrevocably
authorizes and appoints the Administrative Agent its attorney-in-fact, after the
occurrence and during the continuance of an Event of Default, to collect and
receive for any such award or payment and to file and prosecute such claim or
claims, which power of attorney shall be irrevocable and shall be deemed to be
coupled with an interest, and each Credit Party shall, upon demand of the
Administrative Agent, make, execute and deliver any and all assignments and
other instruments sufficient for the purpose of assigning any such award or
payment to the Administrative Agent for the benefit of the Lenders, free and
clear of any encumbrances of any kind or nature whatsoever.
7.11 TAXES.
Each Credit Party will, and will cause each of the Subsidiaries to, pay,
when due and in any event prior to delinquency, all Taxes lawfully levied or
assessed against any Credit Party, any Subsidiary or any of the Collateral;
provided, however, that unless such Taxes have become a federal tax or ERISA
Lien on any of the assets of any Credit Party or any Subsidiary, no such Tax
need be paid if the same is being contested in good faith, by appropriate
proceedings promptly instituted and diligently conducted and if an adequate
reserve or other appropriate provision shall have been made therefor as required
in order to be in conformity with GAAP.
7.12 COMPLIANCE WITH LAWS.
Each Credit Party will, and will cause each of the Subsidiaries to, comply
with all acts, rules, regulations, orders, directions and ordinances of any
legislative, administrative or judicial body or official applicable to the
Collateral or any part thereof, or to the operation of its business, except
where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
7.13 USE OF PROCEEDS.
The proceeds of any Revolving Loan advances made hereunder shall be used
by the Credit Parties solely to (a) finance the working capital needs of the
Credit Parties and their Subsidiaries, (b) repay existing Indebtedness, (c)
finance the issuance of letters of credit, (d) finance capital expenditures, and
(e) finance other general corporate purposes of the Credit Parties and their
Subsidiaries; provided, however, that in any event, no portion of the proceeds
of any such advances shall be used by the Credit Parties for the purpose of
purchasing or carrying any "margin stock" (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) or for any other purpose which
violates the provisions or Regulation T, U or X of said Board of Governors or
for any other purpose in violation of any applicable statute or regulation, or
of the terms and conditions of this Agreement.
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7.14 FISCAL YEAR.
Each Credit Party agrees that it will not change its fiscal year from a
year ending December 31 unless required by law, in which case such Credit Party
will give the Administrative Agent at least thirty (3) days' prior written
notice thereof.
7.15 NOTIFICATION OF CERTAIN EVENTS.
Each Credit Party agrees that it will promptly notify the Administrative
Agent of the occurrence of any of the following events:
(a) any order, judgment or decree in excess of Five Hundred Thousand
Dollars ($500,000) shall have been entered against any Credit Party or any
of its Subsidiaries or any of their respective properties or assets, or
(b) any notification of violation of any law or regulation or any
inquiry shall have been received by any Credit Party or any of its
Subsidiaries from any local, state, federal or foreign Governmental
Authority or agency which violation could reasonably be expected to have a
Material Adverse Effect.
7.16 ADDITIONAL GUARANTORS.
Upon any Person becoming a direct or indirect Domestic Subsidiary of any
Credit Party, such Credit Party will provide the Administrative Agent with
written notice thereof setting forth information in reasonable detail describing
all of the assets of such Person and shall (a) cause such Person (excluding any
such Person not organized under the laws of the United States or any state
thereof) to execute a Joinder Agreement in substantially the form of Exhibit U,
(b) cause such Person (excluding any such Person not organized under the laws of
the United States or any state thereof) to pledge all of its assets to the
Administrative Agent pursuant to a security agreement in substantially the form
of the Security Agreement and otherwise in a form and substance acceptable to
the Administrative Agent, (c) cause all of its Capital Stock (or in the case of
any Person not organized under the laws of the United States or any state
thereof, sixty-five percent (65%) of its Capital Stock) to be delivered to the
Administrative Agent (together with undated stock powers signed in blank and
pledged to the Administrative Agent pursuant to an appropriate pledge
agreement(s) in substantially the form of the Pledge Agreement and otherwise in
form acceptable to the Administrative Agent, and (d) deliver such other
documentation as the Administrative Agent may reasonably request in connection
with the foregoing, including appropriate UCC-1 financing statements,
Acknowledgment Agreements, certified resolutions and other organizational and
authorizing documents of such Person and favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above), all in form,
content and scope reasonably satisfactory to the Administrative Agent.
7.17 SCHEDULES OF ACCOUNTS AND PURCHASE ORDERS.
In furtherance of the continuing assignment and security interest in the
Accounts of each Credit Party granted pursuant to the Security Agreement, upon
the creation of Accounts, each Credit Party will execute and deliver to the
Administrative Agent in such form and manner as the Administrative Agent may
require in its commercially reasonable judgment, solely for its convenience in
maintaining records of collateral, such confirmatory schedules of Accounts, and
other appropriate reports designating, identifying and describing the Accounts
as the Administrative Agent may require in its commercially reasonable judgment.
In addition, upon the Administrative Agent's request, each Credit Party will
provide the Administrative Agent with copies of agreements with, or purchase
orders from, the customers
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of each Credit Party and its Domestic Subsidiaries, and copies of invoices to
customers, proof of shipment or delivery and such other documentation and
information relating to said Accounts and other collateral as the Administrative
Agent may require. Failure to provide the Administrative Agent with any of the
foregoing shall in no way affect, diminish, modify or otherwise limit the
security interests granted herein. Each Credit Party hereby authorizes the
Administrative Agent to regard such Credit Party's or any Domestic Subsidiary's
printed name or rubber stamp signature on assignment schedules or invoices as
the equivalent of a manual signature by such Credit Party's or such Domestic
Subsidiary's authorized officers or agents.
7.18 COLLECTION OF ACCOUNTS.
(a) Unless an Event of Default shall have occurred and be
continuing, each Credit Party may and will enforce, collect and receive
all amounts owing on the Accounts, for the Lenders' benefit and on the
Lenders' behalf but at the Credit Parties' expense in accordance with the
provisions of Section 2.3; such privilege shall terminate automatically,
however, without notice to the Credit Parties which is hereby expressly
waived by the Credit Parties, upon the occurrence and during the
continuance of any Event of Default, and the Administrative Agent shall be
entitled to enforce, collect and receive all amounts owing on the Accounts
and all other amounts for the Lenders' benefit and on the Lenders' behalf
(but at the Credit Party's expense) pursuant to cash management
arrangements satisfactory to the Administrative Agent and in accordance
with the Security Agreement.
(b) Any checks, cash, notes or other instruments or property
received by any Credit Party or any of its Domestic Subsidiaries with
respect to any Accounts shall be held by such Credit Party or such
Subsidiary in trust for the benefit of the Lenders, separate from such
Credit Party's or Subsidiary's own property and funds, and immediately
turned over to the Administrative Agent with proper assignments or
endorsements. No checks, drafts or other instruments received by the
Administrative Agent shall constitute final payment unless and until such
instruments have actually been collected.
7.19 NOTICE; CREDIT MEMORANDA; AND RETURNED GOODS.
Each Credit Party will notify the Administrative Agent promptly of any
matters materially affecting the value, enforceability or collectability of any
Account, and of all material customer disputes, offsets, defenses,
counterclaims, returns and rejections, and all reclaimed or repossessed
merchandise or goods; provided, however, that such notice shall only be required
as to any such matter that affects Accounts outstanding at any one time from any
account debtor, which affected Accounts have a value greater than Two Hundred
Fifty Thousand Dollars ($250,000). Each Credit Party will issue credit memoranda
promptly (with duplicates to the Administrative Agent upon its request for same)
upon accepting returns or granting allowances, and may continue to do so until
the occurrence of an Event of Default which continues beyond the expiration of
the applicable grace or cure period, or which has not otherwise been waived by
the Required Lenders. After the occurrence and during the continuance of an
Event of Default, each Credit Party agrees that all returned, reclaimed or
repossessed merchandise or goods shall be set aside by such Credit Party, marked
with the Lenders' name and held by such Credit Party for the Lenders' account as
owner and assignee.
7.20 ACKNOWLEDGMENT AGREEMENTS.
Each Credit Party will assist the Administrative Agent in attempting to
obtain executed Acknowledgment Agreements from each of the warehousemen,
processors, packers, fillers, landlords and mortgagees with whom such Credit
Party conducts business from time to time.
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7.21 TRADEMARKS.
Each Credit Party will do and cause to be done all things necessary to
preserve and keep in full force and effect all registrations of trademarks,
service marks and other marks, trade names or other trade rights.
7.22 MAINTENANCE OF PROPERTY.
Each Credit Party will, and will cause each of the Domestic Subsidiaries
to, keep all property useful and necessary to its respective business in good
working order and condition (ordinary wear and tear excepted) in accordance with
their past operating practices and not to commit or suffer any waste with
respect to any of its properties, except for properties which either
individually or in the aggregate are not material.
7.23 REVISIONS OR UPDATES TO SCHEDULES.
If any of the information or disclosures provided on any of Schedules 6.7,
6.8, 6.9, 6.17 or 6.19, originally attached hereto become outdated or incorrect
in any material respect, the Credit Parties shall deliver to the Administrative
Agent and the Lenders as part of the Compliance Certificate required to be
delivered pursuant to Section 7.1(d) such revision or updates to such
Schedule(s) as may be necessary or appropriate to update or correct such
Schedule(s), which revisions shall be effective from the date accepted in
writing by the Administrative Agent, such acceptance not to be unreasonably
withheld; provided, that no such revisions or updates to any such Schedule(s)
shall be deemed to have cured any breach of warranty or misrepresentation
occurring prior to the delivery of such revision or update by reason of the
inaccuracy or incompleteness of any such Schedule(s) at the time such warranty
or representation previously was made or deemed to be made.
7.24 LETTERS OF CREDIT.
No later than 90 days after the Closing Date, the Borrowers shall cause
all Letters of Credit issued by Wachovia for the account of any Borrower to be
replaced with Letters of Credit issued by Bank of America, and all such Letters
of Credit issued by Wachovia shall be terminated and returned to Wachovia.
Notwithstanding the foregoing to the contrary, the Borrowers shall not be deemed
to be in default of this Section 7.24 if they shall fail to replace the Letter
of Credit issued by Wachovia for the benefit of Pilot Resources LLC (Wachovia
LC# SM208851) prior to the expiration of such 90-day period, and, except for
such Letter of Credit, all Letters of Credit issued after the Closing Date shall
be issued by Bank of America.
7.25 THIRD PARTY CONSENTS.
No later than 90 days after the Closing Date with respect to all Third
Party Property where Inventory is situated (except for such Third Party Property
listed on Schedule 7.25), the Borrowers shall cause to be delivered to the
Administrative Agent, (A) Acknowledgement Agreements, in form and substance
satisfactory in the commercial judgment of the Administrative Agent in regard
thereto, and for each Acknowledgement Agreement delivered to the Administrative
Agent that was in effect under the Existing Credit Agreement (or any credit
agreement prior to the Existing Credit Agreement), a letter, in form and
substance satisfactory to the Administrative Agent, from the Customer or the
landlord party to such Acknowledgement Agreement acknowledging that such
Acknowledgement Agreement is still in effect with respect to the Loans and this
Agreement, (B) to the extent any such Inventory is on consignment (as defined in
the UCC), copies of the "consignment notice" UCC financing statements filed by
the Credit Parties as referenced Section 5(h) of the Security Agreement in
regard thereto and (C) if
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such Third Party Property is leased, a copy of the lease therefor and all
amendments thereto, between the Credit Party and the landlord party thereto.
ARTICLE 8
FINANCIAL COVENANTS
Until termination of this Agreement and the Commitments hereunder and
payment and satisfaction of all Obligations (other than then contingent
indemnification obligations) due or to become due hereunder, the Credit Parties
agree that, unless the Required Lenders shall have otherwise consented in
writing:
8.1 FIXED CHARGE COVERAGE RATIO.
The Credit Parties shall report the Fixed Charge Coverage Ratio in each
Compliance Certificate delivered pursuant to Section 7.1(d). If at any time
Average Excess Availability is less than $15,000,000, the Credit Parties shall
maintain a Fixed Charge Coverage Ratio of not less than 1.10 to 1 thereafter
unless and until such time as (a) Average Excess Availability as of the end of
the most recently ended calendar month shall equal or exceed $15,000,000 and (b)
the Credit Parties have complied with this Section 8.1 for a period of not less
than three consecutive fiscal months. For avoidance of doubt, if, the Credit
Parties' obligation to maintain a Fixed Charge Coverage Ratio of not less than
1.10 to 1 has ceased (on one or more occasions) because the Credit Parties have
satisfied the requirements of clauses (a) and (b) of the immediately preceding
sentence, and, at any time or times thereafter, Average Excess Availability
shall again fall below $15,000,000, then the Credit Parties shall be required to
maintain a Fixed Charge Coverage Ratio of not less than 1.10 to 1 until such
time as the Credit Parties shall have again satisfied the requirements of
clauses (a) and (b) of the immediately preceding sentence.
ARTICLE 9
NEGATIVE COVENANTS
Until termination of the Credit Agreement and the Commitments hereunder
and payment and satisfaction of all Obligations (other than then contingent
indemnification obligations) due or to become due hereunder, each Credit Party
agrees that, unless the Required Lenders shall have otherwise consented in
writing, it will not, and will not permit any of the Domestic Subsidiaries to:
9.1 RESTRICTIONS ON LIENS.
Mortgage, assign, pledge, transfer or otherwise permit any Lien or
judgment (whether as a result of a purchase money or title retention
transaction, or other security interest, or otherwise) to exist on any of its
assets or properties, whether real, personal or mixed, whether now owned or
hereafter acquired, except for Permitted Liens.
9.2 RESTRICTIONS ON ADDITIONAL INDEBTEDNESS.
Incur or create any Indebtedness, other than Permitted Indebtedness.
9.3 RESTRICTIONS ON SALE OF ASSETS.
Sell, lease, assign, transfer or otherwise dispose of any assets
(including the Capital Stock of any Domestic Subsidiary of the Parent) other
than (a) sales of Inventory in the ordinary course of business, (b)
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sales or other dispositions in the ordinary course of business of assets or
properties that are obsolete or that are no longer used or useful in the conduct
of such Credit Party's or Domestic Subsidiary's business, (c) sales in the
ordinary course of business of assets or properties (other than Inventory) used
in such Credit Party's or Domestic Subsidiary's business that are worn out or in
need of replacement and that are replaced with assets of reasonably equivalent
value or utility or (d) except when any Default or Event of Default exists,
disposition of the assets of any Credit Party (or 100% of the stock of any
Credit Party) or any division or business line thereof, so long as the aggregate
consideration for such obligations does not exceed Two Million Five Hundred
Thousand Dollars ($2,500,000) in any twelve (12) month period exclusive of the
sale transactions listed on Schedule 9.3; provided, however, that, in addition
to the foregoing, to the extent that any such asset disposition governed by this
clause (d) shall include the sale of any Inventory or any Accounts, then, the
Parent shall submit to the Administrative Agent not later than three (3)
Business Days prior to such disposition occurring, a pro forma Borrowing Base
Certificate reflecting the impact of such disposition on the Borrowing Base and
demonstrating the Credit Parties' compliance with Section 2.1(b) both before and
after giving effect to such disposition as a condition precedent thereto.
9.4 NO CORPORATE CHANGES.
(a) Merge or consolidate with any Person except that, so long as no
Event of Default exists, any Guarantor may merge or consolidate with any
other Guarantor or; provided that a Borrower is the survivor of any such
merger or consolidation, with a Borrower, upon first giving the
Administrative Agent at least ten (10) days' advance written notice to
such effect; or
(b) alter or modify any Credit Party's or any Domestic Subsidiary's
Articles or Certificate of Incorporation or other equivalent
organizational document or form of organization in any manner that is
adverse to the interests of any Lender; or
(c) alter or modify any legal names, principal places of business,
structure, status or existence except upon at least thirty (30) days
advance written notice to the Administrative Agent; or
(d) enter into or engage in any business, operation or activity
other than those being conducted by the Credit Parties on the Closing Date
or any other business, operation or activity reasonably related thereto.
9.5 NO GUARANTEES.
Assume, guarantee, endorse, or otherwise become liable upon the
obligations of any other Person, including any Subsidiary or Affiliate of any
Credit Party, except (a) by the endorsement of negotiable instruments in the
ordinary course of business, (b) by the giving of indemnities in connection with
the sale of Inventory or other asset dispositions permitted hereunder and (c) in
connection with the incurrence of Permitted Indebtedness.
9.6 NO RESTRICTED PAYMENTS.
Make any Restricted Payment, other than to pay dividends from any
Subsidiary to any Credit Party; provided, however, that, notwithstanding, the
foregoing, the Parent may from time to time make dividends, repurchase its
Capital Stock from any shareholders who are directors, officers, managers or
employees of any Credit Party or who acquired their Capital Stock in connection
with the initial public offering of the Parent, through its direct share
program, or in connection with an Acquisition by a Credit
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Party (or the estates of any of them, if then deceased), subject, however, to
compliance with each of the following conditions:
(a) the aggregate amount of cash paid by the Parent for all such
dividends and repurchases made during any fiscal year shall not exceed (A)
Five Million Dollars ($5,000,000) if Average Excess Availability on a pro
forma basis, after giving effect to each such Restricted Payment is
greater than Ten Million Dollars ($10,000,000) or (B) Twenty-Five Million
Dollars ($25,000,000) if Average Excess Availability, on a pro forma
basis, after giving effect to each such Restricted Payment is greater than
Twenty Million Dollars ($20,000,000); and
(b) no Default or Event of Default otherwise then shall exist or be
caused thereby.
9.7 NO INVESTMENTS.
Make any Investment other than
(a) Permitted Investments and
(b) Investments in Subsidiaries that are not Credit Parties not in
excess of $7,500,000 in the aggregate at any time outstanding during the
term of this Agreement.
9.8 NO AFFILIATE TRANSACTIONS.
Enter into any transaction with, including the purchase, sale or exchange
of property or the rendering of any service to, any Subsidiary or Affiliate of
any Credit Party except (a) in the ordinary course of and pursuant to the
reasonable requirements of such Credit Party's business and upon fair and
reasonable terms no less favorable to such Credit Party than could be obtained
in a comparable arm's-length transaction with an unaffiliated Person and (b) as
may be permitted under Section 9.6.
9.9 NO PROHIBITED TRANSACTIONS UNDER ERISA.
Except where a violation otherwise prohibited below (other than a
violation of Section 9.9(i) which could not reasonably be expected to have a
Material Adverse Effect:
(a) Engage, or permit any ERISA Affiliate to engage, in any
prohibited transaction which could result in a civil penalty or excise tax
described in Section 406 of ERISA or Section 4975 of the Internal Revenue
Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtained from the DOL;
(b) permit to exist with respect to any Benefit Plan any accumulated
funding (as defined in Sections 302 of ERISA and 412 of the Internal
Revenue Code), whether or not waived;
(c) fail, or permit any ERISA Affiliate to fail, to pay timely
required contributions or annual installments due with respect to any
waived funding deficiency to any Benefit Plan;
(d) terminate, or permit any ERISA Affiliate to terminate, any
Benefit Plan where such event would result in any liability of the Credit
Party, any Subsidiary or any ERISA Affiliate under Title IV of ERISA;
(e) fail, or permit any ERISA Affiliate to fail to make any required
contribution or payment to any Multiemployer Plan;
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(f) fail, or permit any ERISA Affiliate to fail, to pay any required
installment or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or
other payment;
(g) amend, or permit any ERISA Affiliate to amend, a Benefit Plan
resulting in an increase in current liability for the plan year such that
either of the Credit Parties, any Subsidiary or any ERISA Affiliate is
required to provide security to such Benefit Plan under Section 401(a)(29)
of the Internal Revenue Code;
(h) withdraw, or permit any ERISA Affiliate to withdraw, from any
Multiemployer Plan where such withdrawal may result in any liability of
any such entity under Title IV of ERISA; or
(i) allow any representation made in Section 6.14 to be untrue in
any material respect at any time during the term of this Agreement.
9.10 NO ADDITIONAL BANK ACCOUNTS.
Open, maintain or otherwise have any checking, savings or other accounts
at any bank or other financial institution, or any other account where money is
or may be deposited or maintained with any Person, other than the accounts set
forth on Schedule 9.10 and xxxxx cash and payroll accounts and after the Closing
Date, such other accounts so long as each such account is subject to a Lockbox
Agreement satisfactory to the Administrative Agent.
9.11 NO EXCESS CASH.
Maintain in the aggregate in all of the checking, savings or other
accounts of the Credit Parties, excepting, however, therefrom, Lockbox Accounts
(and related overnight accounts), total cash balances and Permitted Investments
in excess of Two Hundred Fifty Thousand Dollars ($250,000) at any time during
which any Loans are outstanding hereunder.
9.12 RESTRICTIONS ON SALE OF CAPITAL STOCK OF THE DOMESTIC SUBSIDIARIES.
Except in connection with any transaction permitted under Section 9.4,
sell, transfer or otherwise dispose of any shares of Capital Stock in any
Domestic Subsidiary.
9.13 ISSUANCE OF STOCK BY DOMESTIC SUBSIDIARIES.
Permit any Domestic Subsidiary to issue or distribute any Capital Stock,
except that a Domestic Subsidiary whose Capital Stock have been pledged to the
Administrative Agent pursuant hereto may issue and distribute additional such
Capital Stock from time to time hereafter; provided that such Capital Stock are
also pledged to the Administrative Agent promptly upon their issuance on terms
and conditions satisfactory to the Administrative Agent in its commercially
reasonable judgment.
9.14 ADDITIONAL NEGATIVE PLEDGES.
Create or otherwise cause or suffer to exist or become effective, or
permit any of the Domestic Subsidiaries to create or otherwise cause or suffer
to exist or become effective, directly or indirectly, (i) any prohibition or
restriction (including any agreement to provide equal and ratable security to
any other Person in the event a Lien is granted to or for the benefit of the
Administrative Agent and the Lenders) on
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the creation or existence of any Lien upon the assets of any Credit Party or the
Domestic Subsidiaries, other than Permitted Liens or (ii) any Contractual
Obligation which may restrict or inhibit the Administrative Agent's rights or
ability to sell or otherwise dispose of the Collateral or any part thereof after
the occurrence of an Event of Default (except customary non-assignment
provisions contained in leases and purchase agreements for assets secured by a
purchase money security interest).
9.15 INDEBTEDNESS.
Effect or permit any change in or amendment to any document or instrument
pertaining to the subordination, terms of payment or required prepayments of any
Indebtedness, effect or permit any change in or amendment to any document or
instrument pertaining to the covenants or events of default of any Indebtedness
if the effect of any such change or amendment is to make such covenants or
events of default more restrictive, give any notice of optional redemption or
optional prepayment or offer to repurchase under any such document or
instrument, or, directly or indirectly, make any payment of principal of or
interest on or in redemption, retirement or repurchase of any Indebtedness,
except for the scheduled payments required by the terms of the documents and
instruments evidencing such Indebtedness and except as permitted under Section
9.6.
9.16 SALE AND LEASEBACK.
Except in connection with asset dispositions permitted under Section
9.3(d), enter into any arrangement, directly or indirectly, whereby the Parent
or any Domestic Subsidiary shall sell or transfer any property owned by it to a
Person (other than the Borrowers or any Subsidiary) in order then or thereafter
to lease such property or lease other property which the Borrowers or any
Domestic Subsidiary intends to use for substantially the same purpose as the
property being sold or transferred.
9.17 LICENSES, ETC.
Enter into licenses of, or otherwise restrict the use of, any patents,
trademarks or copyrights which would prevent the Borrowers or any Domestic
Subsidiary from selling, transferring, encumbering or otherwise disposing of any
such patent, trademark or copyright.
9.18 LIMITATIONS.
Create, nor will it permit any of its Domestic Subsidiaries to, directly
or indirectly, create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any such Person to (a) pay dividends or make any other
distribution on any of such Person's Capital Stock, (b) pay any Indebtedness
owed to the Credit Parties, (c) make loans or advances to any other Credit Party
or (d) transfer any of its property to any other Credit Party, except for
encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest (or
purchase agreements for assets secured by a purchase money security interest),
(ii) any agreement or other instrument of a Person existing at the time it
becomes a Subsidiary of a Credit Party; provided that such encumbrance or
restriction is not applicable to any other Person, or any property of any other
Person, other than such Person becoming a Subsidiary of a Credit Party and was
not entered into in contemplation of such Person becoming a Subsidiary of a
Credit Party, and (iii) this Agreement and the other Loan Documents.
ARTICLE 10
POWERS
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10.1 APPOINTMENT AS ATTORNEY-IN-FACT.
Each Credit Party hereby irrevocably authorizes and appoints the
Administrative Agent, or any Person or agent the Administrative Agent may
designate, as such Credit Party's attorney-in-fact, at the Credit Parties' cost
and expense, to exercise, subject to the limitations set forth in Section 10.2,
all of the following powers, which being coupled with an interest, shall be
irrevocable until all of the Obligations to the Lenders have been paid and
satisfied in full and all of the Commitments have been terminated:
(a) To receive, take, endorse, sign, assign and deliver, all in the
name of the Administrative Agent, the Lenders or such Credit Party, as the
case may be, any and all checks, notes, drafts, and other documents or
instruments relating to the Collateral;
(b) To receive, open and dispose of all mail addressed to such
Credit Party and to notify postal authorities to change the address for
delivery thereof to such address as the Administrative Agent may
designate;
(c) To request at any time from customers indebted on Accounts, in
the name of such Credit Party or a third party designee of the
Administrative Agent, information concerning the Accounts and the amounts
owing thereon;
(d) To give customers indebted on Accounts notice of the Lenders'
interest therein, and/or to instruct such customers to make payment
directly to the Administrative Agent for such Credit Party's account;
(e) To take or bring, in the name of the Administrative Agent, the
Lenders or such Credit Party, all steps, actions, suits or proceedings
deemed by the Administrative Agent necessary or desirable to enforce or
effect collection of the Accounts; and
(f) To file, record and register any or all of the Lenders' security
interest in intellectual property of any Credit Party with the United
States Patent and Trademark Office.
10.2 LIMITATION ON EXERCISE OF POWER.
Notwithstanding anything hereinabove to the contrary, the powers set forth
in subparagraphs (b), (d) and (e) above may only be exercised by the
Administrative Agent on and after the occurrence of an Event of Default and
during its continuation which has not otherwise been waived by the
Administrative Agent. The powers set forth in subparagraphs (a), (c) and (f)
above may be exercised by the Administrative Agent at any time.
ARTICLE 11
EVENTS OF DEFAULT AND REMEDIES
11.1 EVENTS OF DEFAULT.
The occurrence of any of the following events shall constitute an "Event
of Default" hereunder:
(a) failure of the Borrowers to pay (i) any interest or Fees
hereunder within three (3) Business Days of when due hereunder, in each
case whether at stated maturity, by acceleration, or otherwise, (ii) any
principal of the Revolving Loans or the Letter of Credit Obligations when
due, whether at stated maturity, by acceleration or otherwise, or (iii)
any expenses hereunder within
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ten (10) Business Days after receipt by the Parent from the Administrative
Agent or any applicable Lender of notice that such expenses are payable or
(iv) any other Obligations, within ten (10) Business Days after the stated
due date for the payment thereof;
(b) any representation or warranty of any Credit Party contained in
this Agreement, the other Loan Documents or any other agreement, document,
instrument or certificate among any Credit Party, the Administrative Agent
and the Lenders or executed by any Credit Party in favor of the
Administrative Agent or the Lenders shall prove untrue in any material
respect on or as of the date it was made or was deemed to have been made;
(c) failure of any Credit Party to perform, comply with or observe
any term, covenant or agreement applicable to it contained in Section 7.1,
Section 7.3, Section 7.5, Section 7.7, Article 8 or Article 9;
(d) failure to comply with any other covenant contained in this
Agreement (except for Section 7.25), the other Loan Documents or any other
agreement, document, instrument or certificate among any Credit Party, the
Administrative Agent and the Lenders or executed by any Credit Party in
favor of the Administrative Agent or the Lenders and, in the event such
breach or failure to comply is capable of cure, such breach or failure to
comply is not cured within thirty (30) days of its occurrence;
(e) dissolution, liquidation, winding up or cessation of the
business of any Credit Party or any Subsidiary, or the failure of any
Credit Party or any Subsidiary to meet its debts generally as they mature,
or the calling of a meeting of any Credit Party's or any Subsidiary's
creditors for purposes of compromising any Credit Party's or any
Subsidiary's debts, or the admission by any Credit Party or its inability
to pay its debts as they become due;
(f) the commencement by or against any Credit Party or any
Subsidiary of any bankruptcy, insolvency, arrangement, reorganization,
receivership or similar proceedings with respect to it under any federal
or state law and, in the event any such proceeding is commenced against
any Credit Party of any Subsidiary, such proceeding is not dismissed
within sixty (60) days;
(g) the occurrence of a Change in Control;
(h) the occurrence of a default or event of default (in each case
which shall continue beyond the expiration of any applicable grace
periods) under, or the occurrence of any event that results in or would
permit the acceleration of the maturity of any note, agreement or
instrument evidencing any other Indebtedness of any Credit Party or any of
its Subsidiaries and the aggregate principal amount of all such other
Indebtedness with respect to which a default or an event of default has
occurred, or the maturity of which is accelerated or permitted to be
accelerated, exceeds One Million Dollars ($1,000,000) or any counterparty
to an Interest Rate Protection Agreement shall terminate such agreement
and such termination shall result in a liability of a Credit Party in
excess of $1,000,000;
(i) any covenant, agreement or obligation of any party contained in
or evidenced by any of the Loan Documents shall cease to be enforceable in
accordance with its terms, or any party (other than the Administrative
Agent or the Lenders) to any Loan Document shall deny or disaffirm its
obligations under any of the Loan Documents, or any Loan Document shall be
canceled, terminated, revoked or rescinded without the express prior
written consent of the Administrative Agent, or any action or proceeding
shall have been commenced by any Person
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(other than the Administrative Agent or any Lender) seeking to cancel,
revoke, rescind or disaffirm the obligations of any party to any Loan
Document, or any court or other Governmental Authority shall issue a
judgment, order, decree or ruling to the effect that any of the
obligations of any party to any Loan Document are illegal, invalid or
unenforceable;
(j) one or more judgments or decrees shall be entered against one or
more of the Credit Parties or any Subsidiary involving a liability of One
Million Dollars ($1,000,000) or more in the aggregate (to the extent not
paid or fully covered by insurance provided by a carrier who has
acknowledged coverage and has the ability to perform) and any such
judgments or decrees shall not have been vacated, discharged or stayed or
bonded pending appeal within thirty (30) days from the entry thereof;
(k) any Termination Event with respect to a Benefit Plan shall have
occurred and be continuing thirty (30) days after notice thereof shall
have been given to the Parent by the Administrative Agent or any Lender,
and the then current value of such Benefit Plan's benefits guaranteed
under Title IV of ERISA exceeds the then current value of such Benefit
Plan's assets allocable to such benefits by more than One Million Dollars
($1,000,000) (or in the case of a Termination Event involving the
withdrawal of a substantial employer, the withdrawing employer's
proportionate share of such excess exceeds such amount);
(l) any Guarantor shall assert that its obligations hereunder or
under any other Loan Document shall be invalid or unenforceable; or
(m) any other Loan Document shall fail to be in full force and
effect or to give the Administrative Agent and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be created
thereby (except as such documents may be terminated or no longer in force
and effect in accordance with the terms thereof, other than those
indemnities and provisions which by their terms shall survive).
11.2 ACCELERATION.
Upon the occurrence and during the continuance of an Event of Default, at
the direction of the Required Lenders, the Administrative Agent shall, upon the
written, telecopied or telex request of the Required Lenders, and by delivery of
written notice to the Parent from the Administrative Agent, take any or all of
the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against any
Borrower: (a) declare all Obligations (excluding Obligations under any Interest
Rate Protection Agreement) to be immediately due and payable (except with
respect to any Event of Default set forth in Section 11.1(f) in which case all
Obligations (excluding Obligations under any Interest Rate Protection Agreement)
shall automatically become immediately due and payable without the necessity of
any notice or other demand) without presentment, demand, protest or any other
action or obligation of the Administrative Agent or any Lender, (b) immediately
terminate this Agreement and the Commitments hereunder; and (c) enforce any and
all rights and interests created and existing under the Loan Documents or
arising under applicable law, including all rights and remedies existing under
the Security Documents and all rights of setoff. The enumeration of the
foregoing rights is not intended to be exhaustive and the exercise of any right
shall not preclude the exercise of any other rights, all of which shall be
cumulative.
In addition, upon demand by the Administrative Agent or the Required
Lenders upon the occurrence of any Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(in accordance with the voting requirements of Section 14.9), the Borrowers
shall deposit with the Administrative Agent for the benefit of the Lenders with
respect to each
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Letter of Credit then outstanding, promptly upon such demand, cash or Cash
Equivalents in an amount equal to the greatest amount for which such Letter of
Credit may be drawn. Such deposit shall be held by the Administrative Agent for
the benefit of the Issuing Banks and the other Lenders as security for, and to
provide for the payment of, outstanding Letters of Credit.
ARTICLE 12
TERMINATION
Except as otherwise provided in Article 11 of this Agreement, the
Commitments made hereunder shall terminate on the Maturity Date and all then
outstanding Loans shall be immediately due and payable in full. Unless sooner
demanded, all Obligations shall become due and payable as of any termination
hereunder or under Article 11 and, pending a final accounting, the
Administrative Agent may withhold any balances in the Borrowers' Loan accounts,
in an amount sufficient, in the Administrative Agent's sole discretion, to cover
all of the Obligations, whether absolute or contingent, unless supplied with a
satisfactory indemnity to cover all of such Obligations. All of the
Administrative Agent's and the Lenders' rights, liens and security interests
shall continue after any termination until all Obligations (other than then
contingent indemnification obligations) have been paid and satisfied in full.
ARTICLE 13
THE ADMINISTRATIVE AGENT
13.1 APPOINTMENT AND AUTHORIZATION. Each of the Lenders and the Issuing
Banks hereby irrevocably appoints the Administrative Agent as its Administrative
Agent and authorizes the Administrative Agent to take such actions on its behalf
and to exercise such powers as are delegated to the Administrative Agent by the
terms of this Agreement and the other Loan Documents, together with such actions
and powers as are reasonably incidental thereto.
13.2 ADMINISTRATIVE AGENT'S RIGHTS AS LENDER. The Lender or other
financial institution serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender hereunder as any other
Lender and may exercise the same as though it were not the Administrative Agent,
and such institution and its Affiliates may accept deposits from, lend money to
and generally engage in any kind of business with any Credit Party or any
Subsidiary or other Affiliate thereof as if it were not the Administrative
Agent.
13.3 DUTIES AS EXPRESSLY STATED. The Administrative Agent shall not have
any duties or obligations except those expressly set forth in this Agreement and
the other Loan Documents. Without limiting the generality of the foregoing, (a)
the Administrative Agent shall not be subject to any fiduciary or other implied
duties, regardless of whether a Default has occurred and is continuing, (b) the
Administrative Agent shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated by this Agreement and the other Loan Documents that the
Administrative Agent is required to exercise in writing by the Required Lenders
(or such other number or percentage of the Lenders as is required hereunder with
respect to such action), and (c) except as expressly set forth herein and in the
other Loan Documents, the Administrative Agent shall not have any duty to
disclose, or shall be liable for the failure to disclose, any information
relating to any Credit Party or any of their respective Subsidiaries that is
communicated to or obtained by the financial institution serving as the
Administrative Agent or any of its Affiliates or Approved Funds in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as is required hereunder with respect to
such action) or all of the Lenders if expressly
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required, or in the absence of its own gross negligence or willful misconduct.
The Administrative Agent shall not be deemed to have knowledge of any Default
other than a Default of the types specified in Section 11.1(a) unless and until
written notice thereof is given to the Administrative Agent by the Parent or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in, or in connection with, this Agreement or the other Loan Documents, (ii)
the contents of any certificate, report or other document delivered hereunder or
under any of the other Loan Documents or in connection herewith of therewith,
(iii) the performance or observance of any of the covenants, agreements or other
terms or conditions set forth herein or in any other Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement, the
other Loan Documents or any other agreement, instrument or document, or (v) the
satisfaction of any condition set forth in Article 6 or elsewhere herein, other
than to confirm receipt of items expressly required to be delivered to the
Administrative Agent. The Administrative Agent shall not, except to the extent
the Administrative Agent expressly instructed by the Required Lenders with
respect to collateral security hereunder and under the other Loan Documents, be
required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document; provided, however, that the
Administrative Agent shall not be required to take any action which exposes the
Administrative Agent to personal liability or which is contrary to the Loan
Documents or applicable law.
13.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any
notice, request, certificate, consent, statement, instrument, document or other
writing believed by it to be genuine and to have been signed or sent by the
proper Person. The Administrative Agent also may rely upon any statement made to
it orally or by telephone and believed by it to be made by the proper Person,
and shall not incur any liability for relying thereon. The Administrative Agent
may consult with legal counsel (who may be counsel for the Credit Parties),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this Agreement, all
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action (it
being understood that this provision shall not release the Administrative Agent
from performing any action with respect to the Borrowers expressly required to
be performed by it pursuant to the terms hereof) under this Agreement. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Lenders (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
13.5 ACTION THROUGH SUB-ADMINISTRATIVE AGENTS. The Administrative Agent
may perform any and all of its duties, and exercise its rights and powers, by or
through any one or more sub-Administrative Agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-Administrative
Agent may perform any and all its duties and exercise its rights and powers
through its Related Parties. The exculpatory provisions of the preceding
paragraphs shall apply to any such sub-Administrative Agent and to the Related
Parties of the Administrative Agent and any such sub-Administrative Agent, and
shall apply to its activities in connection with the syndication of the credit
facilities provided for herein as well as activities of the Administrative
Agent.
13.6 RESIGNATION OF ADMINISTRATIVE AGENT AND APPOINTMENT OF SUCCESSOR
ADMINISTRATIVE AGENT. Subject to the appointment and acceptance of a successor
Administrative Agent, as provided in this paragraph, the Administrative Agent
may resign at any time by
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notifying the Lenders, the Issuing Banks and the Credit Parties. Upon any such
resignation, the Required Lenders shall have the right, in consultation with the
Credit Parties, to appoint a successor Administrative Agent. If no successor
shall have been so appointed and shall have accepted such appointment within 30
days after such retiring Administrative Agent gives notice of its resignation,
then such retiring Administrative Agent may, on behalf of the Lenders and the
Issuing Banks, appoint a successor Administrative Agent, which shall be a bank
with an office in Boston, Massachusetts or New York, New York, or an Affiliate
of any such bank. Upon the acceptance of its appointment as Administrative Agent
hereunder, by a successor, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under the other Loan Documents.
The fees payable by the Borrowers to a successor Administrative Agent shall be
the same as those payable to its predecessor unless otherwise agreed between the
Parent and such successor. After an Administrative Agent's resignation
hereunder, the provisions of this Article and Section 14.6 shall continue in
effect for the benefit of such retiring Administrative Agent, its
sub-Administrative Agents and their respective Related Parties in respect of any
actions taken or omitted to be taken by any of them while it was acting as
Administrative Agent.
13.7 LENDERS' INDEPENDENT DECISIONS. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the Issuing
Banks or any other Lender and based on such documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent, the Issuing Banks or any other Lender
and based on such documents and information as it shall from time to time deem
appropriate, continue to make its own decisions in taking or not taking action
under or based upon this Agreement and the other Loan Documents, any related
agreement or any document furnished hereunder or thereunder. Except as
explicitly provided herein, the Administrative Agent does not have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect to such operations, business,
property, condition or creditworthiness, whether such information comes into its
possession on or before the first Event of Default or at any time thereafter.
The Administrative Agent shall not be deemed a trustee or other fiduciary on
behalf of any party.
13.8 INDEMNIFICATION. Each Lender agrees to indemnify and hold harmless
the Administrative Agent and the Issuing Banks (to the extent not reimbursed
under Section 14.6, but without limiting the obligations of the Borrowers under
Section 14.6), ratably in accordance with the aggregate principal amount of the
respective Commitments of and/or Loans and Letter of Credit Obligations held by
the Lenders (or, if all of the Commitments shall have been terminated or
expired, ratably in accordance with the aggregate outstanding amount of the
Loans and Letter of Credit Obligations held by the Lenders), for any and all
liabilities (including pursuant to any Environmental Law), obligations, losses,
damages, penalties, actions, judgments, deficiencies, suits, costs, expenses
(including reasonable attorney's fees) or disbursements of any kind and nature
whatsoever that may be imposed on, incurred by or asserted against the
Administrative Agent or the Issuing Banks (including by any Lender) arising out
of or by reason of any investigation in or in any way relating to or arising out
of any Loan Document or any other documents contemplated by or referred to
therein for any action taken or omitted to be taken by the Administrative Agent
or the Issuing Banks under or in respect of any of the Loan Documents or other
such documents or the transactions contemplated thereby (including the costs and
expenses that the Borrowers are obligated to pay under Section 14.6, but
excluding, unless a Default has occurred and is continuing, normal
administrative costs and expenses incident to the performance of its agency
duties hereunder) or the enforcement of any of the terms hereof or thereof or of
any such other documents; provided, however, that no Lender shall be liable for
any of the foregoing to the extent they are determined by a court of competent
jurisdiction in a final and nonappealable judgment to have resulted from the
gross negligence or willful misconduct of the party to be indemnified. The
agreements set forth
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in this Section 13.8 shall survive the payment of all Loans and other
obligations hereunder and shall be in addition to and not in lieu of any other
indemnification agreements contained in any other Loan Document.
13.9 CONSENTS UNDER OTHER LOAN DOCUMENTS. Except as otherwise provided in
this Agreement and the other Loan Documents, the Administrative Agent may, with
the prior consent of the Required Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the other Loan Documents.
13.10 COLLATERAL MATTERS.
(a) Each Lender authorizes and directs the Administrative Agent to
act as its collateral agent and, in such capacity, to enter into the
Security Documents for the benefit of the Lenders. Each Lender authorizes
and directs the Administrative Agent to make such changes to the forms
Acknowledgment Agreement attached hereto as Exhibits B and C as the
Administrative Agent deems necessary in order to obtain any Acknowledgment
Agreement from any customer, landlord, warehouseman, filler, packer or
processor of any Credit Party. Each Lender also authorizes and directs the
Administrative Agent to review and approve all agreements regarding the
Lockboxes and the Lockbox Accounts (including the Lockbox Accounts
Agreements) on such terms as the Administrative Agent deems necessary.
Each Lender hereby agrees, and each holder of any Note by the acceptance
thereof will be deemed to agree, that, except as otherwise set forth
herein, any action taken by the Required Lenders or each of the Lenders,
as applicable, in accordance with the provisions of this Agreement or the
Security Documents, and the exercise by the Required Lenders or each of
the Lenders, as applicable, of the powers set forth herein or therein,
together with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders. The
Administrative Agent is hereby authorized on behalf of all of the Lenders,
without the necessity of any notice to or further consent from any Lender,
from time to time prior to an Event of Default, to take any action with
respect to any Collateral or Security Document which may be necessary or
appropriate to perfect and maintain perfected the security interest in and
liens upon the Collateral granted pursuant to the Security Documents.
(b) The Lenders hereby authorize the Administrative Agent, at its
option and in its discretion, to release any Lien granted to or held by
the Administrative Agent upon any Collateral (i) upon termination of the
Commitments and payment in cash and satisfaction of all of the Obligations
(including the Letter of Credit Obligations) at any time arising under or
in respect of this Agreement or the Loan Documents or the transactions
contemplated hereby or thereby, (ii) constituting property being sold or
disposed of upon receipt of the proceeds of such sale by the
Administrative Agent if the applicable Credit Party certifies to the
Administrative Agent that the sale or disposition is made in compliance
with Section 9.3 (and the Administrative Agent may rely conclusively on
any such certificate, without further inquiry) or (iii) if approved,
authorized or ratified in writing by the Required Lenders, unless such
release is required to be approved by all of the Lenders hereunder. Upon
request by the Administrative Agent at any time, the Lenders will confirm
in writing the Administrative Agent's authority to release particular
types or items of Collateral pursuant to this Section 13.10(b).
(c) Upon any sale and transfer of Collateral which is expressly
permitted pursuant to the terms of this Agreement, or consented to in
writing by the Required Lenders or all of the Lenders, as applicable, and
upon at least five (5) Business Days' prior written request by the
applicable Credit Party, the Administrative 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
Administrative Agent for the benefit of the Lenders herein or pursuant
hereto upon
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the Collateral that was sold or transferred; provided that (i) the
Administrative Agent shall not be required to execute any such document on
terms which, in the Administrative Agent's opinion, would expose the
Administrative Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or
warranty and (ii) such release shall not in any manner discharge, affect
or impair the Obligations or any Liens upon (or obligations of such Credit
Party or any Subsidiary in respect of) all interests retained by such
Credit Party or any Subsidiary, including the proceeds of the sale, all of
which shall continue to constitute part of the Collateral. In the event of
any sale or transfer of Collateral, or any foreclosure with respect to any
of the Collateral, the Administrative Agent shall be authorized to deduct
all of the expenses reasonably incurred by the Administrative Agent from
the proceeds of any such sale, transfer or foreclosure.
(d) The Administrative Agent shall have no obligation whatsoever to
the Lenders or to any other Person to assure that the Collateral exists or
is owned by the Credit Parties or any Subsidiary or is cared for,
protected or insured or that the liens granted to the Administrative Agent
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 or to continue exercising at all or in
any manner or under any duty of care, disclosure or fidelity any of the
rights, authorities and powers granted or available to the Administrative
Agent in this Section 13.10 or in any of the Security Documents, it being
understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Administrative Agent may act in any
manner it may deem appropriate, in its sole discretion, given the
Administrative Agent's own interest in the Collateral as one of the
Lenders and that the Administrative Agent shall have no duty or liability
whatsoever to the Lenders, except for its gross negligence or willful
misconduct.
13.11 ACTIONS WITH RESPECT TO DEFAULTS.
In addition to the Administrative Agent's right to take actions on its own
accord as permitted under this Agreement, the Administrative Agent shall take
such action with respect to a Default or Event of Default as shall be directed
by the Required Lenders or all of the Lenders, as the case may be; provided,
however, that, until the Administrative Agent shall have received such
directions, the Administrative Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best interests of the
Lenders.
13.12 SYNDICATION AGENT.
The Syndication Agent shall not have any duties or obligations under this
Agreement and the other Loan Documents, express or implied. The Syndication
Agent shall incur no personal liability by reason of being named the Syndication
Agent hereunder.
ARTICLE 14
MISCELLANEOUS
14.1 WAIVERS.
Each Credit Party hereby waives due diligence, demand, presentment and
protest and any notices thereof as well as notice of nonpayment. No delay or
omission of the Administrative Agent or the Lenders to exercise any right or
remedy hereunder, whether before or after the happening of any Event of Default,
shall impair any such right or shall operate as a waiver thereof or as a waiver
of any such Event
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of Default. No single or partial exercise by the Administrative Agent or the
Lenders of any right or remedy shall preclude any other or further exercise
thereof, or preclude any other right or remedy.
14.2 JURY TRIAL.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH CREDIT PARTY, THE
ADMINISTRATIVE AGENT AND THE LENDERS EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY
JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT, THE LOAN
DOCUMENTS OR ANY OTHER AGREEMENTS OR TRANSACTIONS RELATED HERETO OR THERETO.
14.3 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS. Any legal action or proceeding with respect
to this Agreement or any other Loan Document shall be brought in the
courts of the Commonwealth of Massachusetts in Suffolk County and, by
execution and delivery of this Agreement, each of the Credit Parties
hereby irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the Credit Parties further irrevocably consents to the
service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to it at the address set out for notices
pursuant to Section 14.4, such service to become effective three (3) days
after such mailing. Nothing herein shall affect the right of the
Administrative Agent or any Lender to serve process in any other manner
permitted by law or to commence legal proceedings or to otherwise proceed
against any Credit Party in any other jurisdiction.
(b) Each of the Credit Parties hereby irrevocably waives any
objection which it may now or hereafter have to the laying of venue of any
of the aforesaid actions or proceedings arising out of or in connection
with this Agreement or any other Loan Document brought in the courts
referred to in subsection (a) above and hereby further irrevocably waives
and agrees not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
14.4 NOTICES.
Except as otherwise provided herein, all notices and correspondences
hereunder shall be in writing and sent by certified or registered mail return
receipt requested, or by overnight delivery service, with all charges prepaid,
to the parties at the following addresses:
If to the Administrative Agent, then to:
Bank of America, N.A.
One Federal Street
Mail Stop MAS-503-07-19
Xxxxxx, XX, 00000
Attention: Xxxxxxx X. X'Xxxxx
Tel: 000-000-0000
Fax: 000-000-0000
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with a copy to:
Xxxxxx & Dodge LLP
000 Xxxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Tel: 000-000-0000
Fax: 000-0000-0000
If to the Credit Parties, then to:
Industrial Distribution Group, Inc.
000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to:
Xxxxxxxxxx Xxxxxxxx LLP
Suite 2800
0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
If to any Lender, to such Lender at the address set forth beneath the
signature of such Lender contained herein.
All such notices and correspondence shall be deemed given (i) if sent by
certified or registered mail, three (3) Business Days after being postmarked,
(ii) if sent by overnight delivery service, when received at the above stated
addresses or when delivery is refused and (iii) if sent by facsimile
transmission, when receipt of such transmission is acknowledged; provided that
notices to the Administrative Agent shall not be effective until received.
14.5 ASSIGNABILITY.
(a) No Credit Party shall have the right to assign this Agreement or
any interest therein except with the prior written consent of the Lenders.
(b) Notwithstanding subsection (c) of this Section, nothing herein
shall restrict, prevent or prohibit any Lender from (i) pledging its Loans
hereunder to a Federal Reserve Bank in support of borrowings made by such
Lender from such Federal Reserve Bank or (ii) granting assignments or
participations in such Lender's Loans and/or Commitments hereunder to its
parent company and/or to any affiliate of such Lender or to any existing
Lender or affiliate thereof. Any Lender may make, carry or transfer Loans
at, to or for the account of, any of its branch offices or
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the office of an affiliate of such Lender except to the extent such
transfer would result in increased costs to the Credit Parties.
(c) Each Lender may, assign to one or more banks or other financial
institutions all or a portion of its rights and obligations under this
Agreement and the Notes; provided, however, that (i) unless the assignee
is another Lender or an affiliate of the assignor Lender, then, each of
the Administrative Agent and the Parent shall have given its prior consent
to such assignment (neither such consent to be unreasonably withheld,
conditioned or delayed); provided that if a Default or Event of Default
then exists, the Parent's consent shall be deemed waived (but concurrent
notice of such assignment shall be given to the Parent), (ii) for each
such assignment, the parties thereto shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register (as
defined below), an Assignment and Acceptance, together with any Note or
Notes subject to such assignment and a processing and recordation fee of
Three Thousand Five Hundred Dollars ($3,500) to be paid by the assignee,
(iii) no such assignment shall be for less than Five Million Dollars
($5,000,000) or, if less, the entire remaining Commitments of such Lender
of the Commitments, (iv) if such assignee is a Foreign Lender, all of the
requirements of Section 2.6(b) shall have been satisfied as a condition to
such assignment and (v) each such assignment shall be of a uniform, and
not a varying, percentage of all rights and obligations under and in
respect of both the Revolving Credit Commitment of such Lender and all
Loans of such Lender. Upon such execution and delivery of the Assignment
and Acceptance to the Administrative Agent, from and after the date
specified as the effective date in the Assignment and Acceptance (the
"Acceptance Date"), (x) the assignee thereunder shall be a party hereto,
and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, such assignee
shall have the rights and obligations of a Lender hereunder and (y) the
assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (other than any rights it may have
pursuant to Section 14.6 which will survive) and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be
a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
assignee thereunder confirms and agrees as follows: (i) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection
with this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the Notes or any
other instrument or document furnished pursuant hereto, (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Credit
Parties or the performance or observance by the Credit Parties of any of
its obligations under this Agreement or any other instrument or document
furnished pursuant hereto, (iii) such assignee confirms that it has
received a copy of this Agreement, together with copies of the financial
statements referred to in Section 7.1 and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance, (iv) such
assignee will, independently and without reliance upon the Administrative
Agent, such assigning Lender or any other Lender and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement, (v) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to
exercise such powers under this Agreement as are delegated to the
Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto and (vi) such assignee agrees that it will
perform in accordance with
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their terms all of the obligations which by the terms of this Agreement
are required to be performed by it as a Lender.
(e) The Administrative Agent shall maintain at its address referred
to in Section 14.4 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amount of
the Loans owing to, each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Credit Parties, the Administrative Agent
and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The
Register and copies of each Assignment and Acceptance shall be available
for inspection by the Credit Parties or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, together with the Note or Notes subject to such
assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register and (iii)
give prompt notice thereof to the Credit Parties. Within five (5) Business
Days after its receipt of such notice, the Credit Parties shall execute
and deliver to the Administrative Agent in exchange for the surrendered
Note or Notes (which the assigning Lender agrees to promptly deliver to
the Parent) a new Note or Notes to the order of the assignee in an amount
equal to the Commitment or Commitments assumed by it pursuant to such
Assignment and Acceptance and, if the assigning Lender has retained a
Commitment or Commitments hereunder, a new Note or Notes to the order of
the assigning Lender in an amount equal to the Commitment or Commitments
retained by it hereunder. Such new Note or Notes shall re-evidence the
indebtedness outstanding under the old Notes or Notes and shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the Closing Date and shall
otherwise be in substantially the form of the Note or Notes subject to
such assignments.
(g) Each Lender may sell participations (without the consent of the
Administrative Agent, the Credit Parties or any other Lender) to one or
more parties in or to all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitments, the Loans
owing to it and the Note or Notes held by it); provided that (i) such
Lender's obligations under this Agreement (including its Commitments to
the Credit Parties hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder
of any such Note for all purposes of this Agreement, (iv) the Credit
Parties, the Administrative 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 (v) such Lender shall not
transfer, grant, assign or sell any participation under which the
participant shall have rights to approve any amendment or waiver of this
Agreement except to the extent such amendment or waiver would (A) extend
the final maturity date or the date for the payments of any installment of
fees or principal or interest of any Loans or Letter of Credit
reimbursement obligations in which such participant is participating, (B)
reduce the amount of any installment of principal of the Loans or Letter
of Credit reimbursement obligations in which such participant is
participating, (C) except as otherwise expressly provided in this
Agreement, reduce the interest rate applicable to the Loans or Letter of
Credit reimbursement obligations in which such participant is
participating, or (D) except as otherwise expressly provided in this
Agreement, reduce any Fees payable hereunder.
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(h) Each Lender agrees that, without the prior written consent of
the Credit Parties and the Administrative Agent, it will not make any
assignment or sell a participation hereunder in any manner or under any
circumstances that would require registration or qualification of, or
filings in respect of, any Loan, Note or other Obligation under the
securities laws of the United States of America or of any jurisdiction.
(i) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may
disclose any information in its possession regarding the Credit Parties in
accordance with Section 14.7.
(j) Anything in this Section to the contrary notwithstanding, any
Lender may assign and pledge all or any portion of the Loans and/or
obligations owing to it to any Federal Reserve Bank or the United States
Treasury as collateral security pursuant to Regulation A of the Board of
Governors of the Federal Reserve System and any Operating Circular issued
by such Federal Reserve Bank; provided that any payment in respect of such
assigned Loans and/or obligations made by the Borrowers to the assigning
and/or pledging Lender in accordance with the terms of this Agreement
shall satisfy the Borrowers' obligations hereunder in respect of such
assigned Loans and/or obligations to the extent of such payment. No such
assignment shall release the assigning and/or pledging Lender from its
obligations hereunder.
14.6 PAYMENT OF EXPENSES; INDEMNIFICATION.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket costs
and expenses of (i) the Administrative Agent and the Sole Lead Arranger in
connection with (A) the negotiation, preparation, syndication, execution and
delivery and administration of this Agreement and the other Loan Documents and
the documents and instruments referred to therein (including the reasonable fees
and expenses of special counsel to the Administrative Agent and the Sole Lead
Arranger and the fees and expenses of counsel for the Administrative Agent in
connection with collateral issues), and (B) any amendment, waiver or consent
relating hereto and thereto including any such amendments, waivers or consents
resulting from or related to any work-out, re-negotiation or restructure
relating to the performance by the Credit Parties under this Agreement and (ii)
the Administrative Agent, the Issuing Banks and the Lenders in connection with
enforcement of the Loan Documents and the documents and instruments referred to
therein, including any work-out, re-negotiation or restructure relating to the
performance by the Credit Parties under this Agreement, including, in connection
with any such enforcement, the reasonable fees and disbursements of counsel for
the Administrative Agent, the Issuing Banks and each of the Lenders (including
the allocated costs of internal counsel). The Credit Parties shall indemnify,
defend and hold harmless the Agents, the Issuing Banks and each of the Lenders
and their respective directors, officers, agents, employees, counsel and
Affiliates from and against (x) any and all losses, claims, damages,
liabilities, deficiencies, judgments or expenses incurred by any of them (except
to the extent that it is finally judicially determined to have resulted from
their own gross negligence or willful misconduct) arising out of or by reason of
any litigation, investigation, claim or proceeding which arises out of or is in
any way related to (i) this Agreement, any Letter of Credit, any other Loan
Documents or the transactions contemplated hereby or thereby, (ii) any actual or
proposed use by any Credit Party of the proceeds of the Loans or (iii) the
Agents', the Issuing Banks' or the Lenders' entering into this Agreement, the
other Loan Documents or any other agreements and documents relating hereto,
including amounts paid in settlement, court costs and the fees and disbursements
of counsel incurred in connection with any such litigation, investigation, claim
or proceeding or any advice rendered in connection with any of the foregoing and
(y) any such losses, claims, damages, liabilities, deficiencies, judgments or
expenses incurred in connection with any remedial or other action taken by any
Credit Party or any of the Lenders in connection with compliance by any Credit
Party or any of its Subsidiaries, or any of their respective properties, with
any federal, state or local environmental laws, acts, rules, regulations,
orders, directions, ordinances, criteria
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or guidelines. If and to the extent that the obligations of any Credit Party
hereunder are unenforceable for any reason, such Credit Party hereby agrees to
make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law. The Credit Parties'
obligations under this Section shall survive any termination of this Agreement
and the other Loan Documents and the payment in full of the Obligations, and are
in addition to, and not in substitution of, any other of their Obligations set
forth in this Agreement. In addition, the Credit Parties shall, upon demand, pay
to the Administrative Agent, the Issuing Banks and any Lender all costs and
expenses (including the reasonable fees and disbursements of counsel and other
professionals) paid or incurred by the Administrative Agent, the Issuing Banks
or such Lender in (A) enforcing or defending its rights under or in respect of
this Agreement, any Letter of Credit the other Loan Documents or any other
document or instrument now or hereafter executed and delivered in connection
herewith, (B) in collecting the Loans, (C) in foreclosing or otherwise
collecting upon the Collateral or any part thereof and (D) obtaining any legal,
accounting or other advice in connection with any of the foregoing. Without
limitation of the foregoing, Credit Parties shall pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
its obtaining, from time to time, as it shall determine in its commercially
reasonable judgment, appraisals of Credit Parties' Inventory subject to the
limitations set forth in Section 7.7.
14.7 CONFIDENTIALITY.
Each Lender agrees to keep confidential information obtained by it
pursuant hereto and the other Loan Documents confidential in accordance with
such Lender's customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's
employees, representatives, directors, attorneys, auditors, agents, professional
advisors, trustees or Affiliates who are advised of the confidential nature of
such information or to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section 14.7), (b) to
the extent such information presently is or hereafter becomes available to such
Lender on a non-confidential basis from any source of such information that is
in the public domain at the time of disclosure, (c) to the extent disclosure is
required by law (including applicable securities law), regulation, subpoena or
judicial order or process (provided that notice of such requirement or order
shall be promptly furnished to the Parent unless such notice is legally
prohibited) or requested or required by bank, securities, insurance or
investment company regulators or auditors or any administrative body or
commission to whose jurisdiction such Lender may be subject, (d) to any rating
agency to the extent required in connection with any rating to be assigned to
such Lender, (e) to assignees or participants or prospective assignees or
participants who agree to be bound by the provisions of this Section 14.7, (f)
to the extent required in connection with any litigation between any Credit
Party and the Administrative Agent or the Lenders with respect to the Loans or
this Agreement and the other Loan Documents or (g) with the Parent's prior
written consent.
14.8 ENTIRE AGREEMENT, SUCCESSORS AND ASSIGNS.
This Agreement along with the other Loan Documents and the Fee Letter
constitutes the entire agreement among the Credit Parties, the Administrative
Agent and the Lenders, supersedes any prior agreements among them, and shall
bind and benefit the Credit Parties and the Lenders and their respective
successors and permitted assigns.
14.9 AMENDMENTS, ETC.
Neither the amendment or waiver of any provision of this Agreement or any
other Loan Document, nor the consent to any departure by any Credit Party
therefrom, shall in any event be effective
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unless the same shall be in writing and signed by the Required Lenders (or if
the Lenders shall not be parties thereto, by the parties thereto and consented
to by the Administrative Agent) and the Parent, and each such amendment, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given; provided that no amendment, waiver or consent shall
unless in writing and signed by all the Lenders, do any of the following:
(a) increase the Commitments of the Lenders or subject the Lenders to any
additional obligations (other than pursuant to Section 2.1(e) which requires
only the consent of each Lender increasing its Revolving Credit Commitment),
(b) except as otherwise expressly provided in this Agreement, reduce the
principal of, or interest on, any Note or any Letter of Credit reimbursement
obligations or any fees hereunder,
(c) postpone any date fixed for any payment or mandatory prepayment in
respect of principal of, or interest on, any Note or any Letter of Credit
reimbursement obligations or any fees hereunder,
(d) change the percentage of the Commitments, or any minimum requirement
necessary for the Lenders or the Required Lenders to take any action hereunder,
(e) amend or waive Section 2.3(b), Section 2.3(e), Section 2.7, Section
2.8, Section 2.9, Section 7.16, Section 13.6 or this Section 14.9, or change the
definition of Required Lenders,
(f) except as otherwise expressly provided in this Agreement, and other
than in connection with the financing, refinancing, sale or other disposition of
any asset of the Credit Parties permitted under this Agreement, release any
Liens in favor of the Lenders on any material portion of the Collateral,
(g) release any guaranties of the Obligations, or
(h) increase the advance rates used to calculate the Borrowing Base beyond
that in effect on the Closing Date or amend the definition of Borrowing Base or
any component definition contained therein (except that this provision will not
restrict the authority of the Administrative Agent to impose or remove reserves
on the Borrowing Base or to increase any advance rate that was previously
decreased such that the advanced rate as increased does not exceed the advance
rate in effect on the Closing Date); and
provided, further, that no amendment, waiver or consent affecting the
rights or duties of the Administrative Agent or any Issuing Bank under any Loan
Document shall in any event be effective, unless in writing and signed by the
Administrative Agent and/or such Issuing Bank, as applicable, in addition to the
Lenders required hereinabove to take such action. No amendment of any provision
of this Agreement relating to the Swingline Loans, the Overadvances or the
Protective Advances shall be effective without the written consent of the
Administrative Agent.
Notwithstanding any of the foregoing to the contrary, the consent of the
Credit Parties shall not be required for any amendment, modification or waiver
of the provisions of Article 13 (other than the provisions of Section 13.6). In
addition, the Credit Parties and the Lenders hereby authorize the Administrative
Agent to modify this Agreement by unilaterally amending or supplementing
Schedule 1.1A from time to time in the manner requested by the Credit Parties,
the Administrative Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder; provided, however, that the
Administrative Agent shall promptly deliver a copy of any such modification to
the Credit Parties and each Lender.
14.10 NONLIABILITY OF ADMINISTRATIVE AGENT AND LENDERS.
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The relationship between any Credit Party on the one hand and the Lenders
and the Administrative Agent on the other hand shall be solely that of Credit
Party and lender. Neither the Administrative Agent nor any Lender shall have any
fiduciary responsibilities to any Credit Party. Neither the Administrative Agent
nor any Lender undertakes any responsibility to any Credit Party to review or
inform such Credit Party of any matter in connection with any phase of such
Credit Party's business or operations.
14.11 INDEPENDENT NATURE OF LENDERS' RIGHTS.
The amounts payable at any time hereunder to each Lender under such
Lender's Note or Notes shall be a separate and independent debt.
14.12 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by the
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.
14.13 EFFECTIVENESS.
This Agreement shall become effective at such time when all of the
conditions set forth in Section 5.1 have been satisfied or waived by the Lenders
and it shall have been executed by each Credit Party and the Administrative
Agent, and the Administrative Agent shall have received copies hereof (telefaxed
or otherwise) which, when taken together, bear the signatures of each Lender,
and thereafter this Agreement shall be binding upon and inure to the benefit of
each Credit Party, the Administrative Agent and each Lender and their respective
successors and assigns.
14.14 SEVERABILITY.
In case any provision in or obligation under this Agreement or the Notes
or the other Loan Documents shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
14.15 HEADINGS DESCRIPTIVE.
The headings of the several sections and subsections of this Agreement,
and the Table of Contents, are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
14.16 MAXIMUM RATE.
Notwithstanding anything to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Credit Parties, the Administrative
Agent and the Lenders hereby agree that all agreements among them under this
Agreement and the other Loan Documents, whether now existing or hereafter
arising and whether written or oral, are expressly limited so that in no
contingency or event whatsoever shall the amount paid, or agreed to be paid, to
the Administrative Agent or any Lender for the use, forbearance, or detention of
the money loaned to any Credit Party and evidenced hereby or thereby or for the
performance or payment of any covenant or obligation contained herein or
therein, exceed the Highest Lawful Rate. If due to any circumstance whatsoever,
fulfillment of any provisions of this Agreement or any of the other Loan
Documents at the time performance of such provision shall be due
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shall exceed the Highest Lawful Rate, then, automatically, (unless otherwise
prohibited under applicable law) the obligation to be fulfilled shall be
modified or reduced to the extent necessary to limit such interest to the
Highest Lawful Rate, and if from any such circumstance any Lender should ever
receive anything of value deemed interest by applicable law which would exceed
the Highest Lawful Rate, such excessive interest shall be applied (unless
otherwise prohibited under applicable law) to the reduction of the principal
amount then outstanding hereunder or on account of any other then outstanding
Obligations and not to the payment of interest, or if such excessive interest
exceeds the principal unpaid balance then outstanding hereunder and such other
then outstanding Obligations, such excess shall be refunded to the applicable
Credit Party. All sums paid or agreed to be paid to the Administrative Agent or
any Lender for the use, forbearance, or detention of the Obligations and other
indebtedness of the Credit Parties to the Administrative Agent or any Lender
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full term of such indebtedness until payment
in full so that the actual rate of interest on account of all such indebtedness
does not exceed the Highest Lawful Rate throughout the entire term of such
indebtedness. The terms and provisions of this Section shall control every other
provision of this Agreement and all agreements among the Credit Parties, the
Administrative Agent and the Lenders.
14.17 RIGHT OF SETOFF.
In addition to and not in limitation of all rights of offset that any
Lender or other holder of a Note may have under applicable law, each Lender or
other holder of a Note shall, if any Event of Default has occurred and is
continuing and whether or not such Lender or such holder has made any demand or
the Obligations of any Credit Party are matured, have the right to appropriate
and apply to the payment of the Obligations of such Credit Party all deposits
(general or special, time or demand, provisional or final) then or thereafter
held by and other indebtedness or property then or thereafter owing by such
Lender or other holder, including any and all amounts in the Bank of America
Account. Any amount received as a result of the exercise of such rights shall be
reallocated among the Lenders as set forth in Section 2.7.
14.18 APPOINTMENT OF PARENT AS AGENT AND ATTORNEY.
(a) Each Credit Party appoints the Parent and all senior officers of
the Parent, to be its attorneys ("its Attorneys") and in its name and on
its behalf and as its act and deed or otherwise to sign all documents and
carry out all such acts as are necessary or appropriate in connection with
executing any Notice of Borrowing, Notice of Extension/Conversion or any
Borrowing Base Certificate, any security documents or in connection with
the receiving and giving of any other notices, requests, instructions,
reports, schedules, revisions, financial statements or any other written
or oral communications hereunder or under the Loan Documents
(collectively, the "Documents") in connection with this Agreement;
provided that such Documents are in substantially the form provided
therefor in the applicable exhibits thereto. This Power of Attorney shall
be valid for the duration of the term of this Agreement. Each Subsidiary
Credit Party hereby undertakes to ratify everything which either of its
Attorneys shall do in order to execute the Documents mentioned herein.
(b) The Administrative Agent and the Lenders are hereby entitled to
rely on any communications given or transmitted by the Parent as if such
communication were given or transmitted by each and every Borrower;
provided, however, that any communication given or transmitted by any
Borrower other than the Parent shall be binding with respect to such
Borrower. Any communication given or transmitted by the Administrative
Agent or and Lender to the Parent shall be deemed given and transmitted to
each and every Borrower.
14.19 REPLACEMENT LENDERS.
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Within thirty (30) days after receipt by the Parent of written notice and
demand from any Lender (an "Affected Lender") (i) for payment of additional
amounts or increased costs as provided in Section 4.7 or (ii) or of the
inability of a Lender to make LIBOR Loans under Section 4.9, the Parent may, at
its option, notify the Administrative Agent and such Affected Lender of its
intention to replace the Affected Lender. So long as no Event of Default shall
have occurred and be continuing, the Borrowers, with the consent of the
Administrative Agent (such consent not to be unreasonably withheld), may obtain,
at the Borrowers' expense, a replacement Lender ("Replacement Lender") for the
Affected Lender. If the Borrowers obtain a Replacement Lender within ninety (90)
days following notice of its intention to do so, the Affected Lender must sell
and assign its Loans and commitments to such Replacement Lender for an amount
equal to the principal balance of all Loans held by the Affected Lender and all
accrued interest and fees with respect thereto through the date of such sale;
provided that the Borrowers shall have reimbursed such Affected Lender for the
additional amounts or increased costs that it is entitled to receive under this
Agreement through the date of such sale and assignment.
14.20 LIMITATION ON ATTORNEYS FEES AND EXPENSES.
Notwithstanding any other provision of this Agreement or any other Loan
Document, or any agreement or other document executed in connection herewith or
therewith, any reimbursement, indemnity, or other Obligation of the Credit
Parties for the attorneys' fees and expenses of the Administrative Agent, the
Issuing Banks, or any Lender shall be determined without the benefit of any
statutory presumption and shall be limited to the reasonable, actually incurred
attorneys' fees and expenses of such Person.
14.21 SEALS.
To the extent that in this Agreement or any other Credit Agreement, in
reference to the execution of such Loan Documents by any Person, provision is
made for affixation of a seal, the word "seal" or the symbol "L.S." shall itself
be sufficient to connote such affixation.
14.22 CONTINUED EFFECTIVENESS; NO NOVATION.
Notwithstanding anything contained herein, the terms of this Agreement are
not intended to and do not serve to effect a novation of the obligations,
liabilities or indebtedness of the Credit Parties under the Existing Credit
Agreement. Instead, it is the express intention of the parties hereto to
reaffirm, amend and restate the obligations, liabilities and indebtedness
created under or otherwise evidenced by the Existing Credit Agreement that is
evidenced by the notes provided for therein and secured by the collateral
contemplated thereby and hereby. The Credit Parties acknowledge and confirm that
the liens and security interests granted pursuant to the Loan Documents secure
the obligations, liabilities and indebtedness of the Credit Parties to the
Lenders under the Existing Credit Agreement, as amended and restated hereby, and
that the term "Secured Obligations" used in certain of the Loan Documents (or
any other term used herein to describe or refer to the obligations, liabilities
and indebtedness of the Credit Parties) describes and refers to the Credit
Parties' obligations, liabilities and indebtedness hereunder and under the
Existing Credit Agreement, as amended and restated hereby, as the same had been
amended, modified, supplemented or restated prior to the date hereof and as the
same may be further amended, modified, supplemented or restated from time to
time. The Loan Documents and all agreements, documents and instruments executed
and delivered in connection with any of the foregoing shall each be deemed to be
amended to the extent necessary to give effect to the provisions of this
Agreement. Cross-references in the Loan Documents to particular section or
subsection numbers in the Existing Credit Agreement shall be deemed to be
cross-references to the corresponding sections or subsections, as applicable, of
this Agreement.
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ARTICLE 15
AFFILIATE GUARANTY
15.1 THE GUARANTEE.
The Guarantors hereby jointly and severally guarantee to the
Administrative Agent and the Lenders the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of all Obligations
(such Obligations herein called, collectively, the "Guaranteed Obligations"), in
each case strictly in accordance with the terms hereof. The Guarantors hereby
further jointly and severally agree that if the Borrowers shall fail to pay in
full when due (whether at stated maturity, by acceleration or otherwise) any of
the Guaranteed Obligations, the Guarantors will promptly pay the same, without
any demand or notice whatsoever, and that in the case of any extension of time
of payment or renewal of any of the Guaranteed Obligations, the same will be
promptly paid in full when due (whether at extended maturity, by acceleration or
otherwise) in accordance with the terms of such extension or renewal.
15.2 OBLIGATIONS UNCONDITIONAL.
The obligations of the Guarantors hereunder are absolute and
unconditional, joint and several, irrespective of the value, genuineness,
validity, regularity or enforceability of the obligations of Borrowers under
this Agreement, the Notes or any other Loan Document or any substitution,
release or exchange of any other guarantee of or security for any of the
Guaranteed Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor
(other than full payment and satisfaction of all Guaranteed Obligations), it
being the intent of this Section that the obligations of the Guarantors
hereunder shall be absolute and unconditional, joint and several, under any and
all circumstances. Without limiting the generality of the foregoing, it is
agreed that, unless otherwise prohibited by applicable law, the occurrence of
any one or more of the following shall not alter or impair the liability of the
Guarantors hereunder which shall remain absolute and unconditional as described
above: (i) at any time or from time to time, without notice to any of the
Guarantors, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived; (ii) any of the acts mentioned in any of the provisions of this
Agreement or the Notes or any other Loan Document shall fail to be done or be
omitted; (iii) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement or the
Notes or any other Loan Document shall be waived or any other guarantee of any
of the Guaranteed Obligations or any security therefor shall be released or
exchanged in whole or in part or otherwise dealt with; or (iv) any lien or
security interest granted to, or in favor of, the Administrative Agent as
security for any of the Guaranteed Obligations shall fail to be perfected. The
Guarantors further hereby expressly waive diligence, presentment, demand of
payment, protest and all notices whatsoever, and any requirement that
Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against Borrowers under this Agreement or the Notes or any other Loan Document,
or against any other Person under any other Guaranty of, or security for, any of
the Guaranteed Obligations.
15.3 REINSTATEMENT.
The obligations of the Guarantors hereunder shall be automatically
reinstated if and to the extent that for any reason any payment by or on behalf
of the Borrowers in respect of the Guaranteed Obligations is rescinded or must
be otherwise restored by any holder of any of the Guaranteed Obligations,
whether as a result of any proceedings in bankruptcy or reorganization or
otherwise and the Guarantors jointly and severally agree that they will
indemnify each Administrative Agent and Lender on
98
demand for all reasonable costs and expenses (including reasonable fees and
disbursements of legal counsel) incurred by Administrative Agent or such Lender
in connection with such rescission or restoration, including any such costs and
expenses incurred in defending against any claim alleging that such payment
constituted a preference, fraudulent transfer or similar payment under any
bankruptcy, insolvency or similar law.
15.4 DEFERRAL OF SUBROGATION RIGHTS.
Each Guarantor hereby subordinates to Administrative Agent and the Lenders
all rights of subrogation or contribution against the Borrowers, whether arising
by contract or operation of law (including any such right arising under the
Bankruptcy Code) or otherwise by reason of any payment by it pursuant to the
provisions hereof until all Obligations (other than any constituting contingent
indemnity obligations) are fully paid and satisfied and all Commitments are
terminated.
15.5 REMEDIES.
The Guarantors jointly and severally agree that, as between the Guarantors
and Administrative Agent and Lenders, the Guaranteed Obligations may be declared
to be forthwith due and payable as provided herein (and shall be deemed to have
become automatically due and payable in the circumstances provided herein) for
purposes hereof, notwithstanding any stay, injunction or other prohibition
preventing such declaration (or such obligations from becoming automatically due
and payable) as against the Borrowers and that, in the event of such declaration
in accordance with the terms hereof (whether or not due and payable by the
Borrowers) shall forthwith become due and payable by the Guarantors for purposes
hereof.
15.6 CONTINUING GUARANTY.
The guaranty set forth herein is a continuing guaranty, and shall apply to
all Guaranteed Obligations, whenever and howsoever arising.
15.7 RIGHTS OF CONTRIBUTION.
The Guarantors hereby agree, as between themselves, that if any Guarantor
shall become an "Excess Funding Guarantor" (as defined below) by reason of the
payment by such Guarantor of any Guaranteed Obligations, each other Guarantor
shall, on demand of such Excess Funding Guarantor (but subject to the next
sentence), pay to such Excess Funding Guarantor an amount equal to such
Guarantor's "Pro Rata Share" (as defined below and determined, for this purpose,
without reference to the properties, debts and liabilities of such Excess
Funding Guarantor) of the "Excess Payment" (as defined below) in respect of such
Guaranteed Obligations. The payment obligation of an Guarantor to any Excess
Funding Guarantor under this Section shall be subordinate and subject in right
of payment to the prior payment in full of the obligations of such Guarantor
under the other provisions of this Section and such Excess Funding Guarantor
shall not exercise any right or remedy with respect to such excess until payment
and satisfaction in full of all such obligations. For purposes hereof, (i)
"Excess Funding Guarantor" means, in respect of any Guaranteed Obligations, an
Guarantor that has paid an amount in excess of its Pro Rata Share of such
Guaranteed Obligations, (ii) "Excess Payment" means, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed Obligations and (iii) "Pro Rata Share"
means, for any Guarantor, the ratio (expressed as a percentage) of (x) the
amount by which the aggregate present fair saleable value of all assets of such
Guarantor (excluding any shares of stock of any other Guarantor) exceeds the
amount of all the debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder and any obligations of any other
Guarantor
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that have been guaranteed by such Guarantor) to (y) the amount by which the
aggregate fair saleable value of all assets of all of the Guarantors exceeds the
amount of all the debts and liabilities (including contingent, subordinated,
unmatured and unliquidated liabilities, but excluding the obligations of the
Guarantor hereunder) of the Guarantors, determined (A) with respect to any
Guarantor that is a party hereto on the Closing Date, as of the Closing Date,
and (B) with respect to any other Guarantor, as of the date such Guarantor
becomes an Guarantor hereunder.
15.8 LIMITATION ON GUARANTEED OBLIGATIONS.
In any action or proceeding involving any state corporate law, or any
state or federal bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of the Guarantors
hereunder, after giving effect to the contribution rights provided herein above,
would otherwise be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability hereunder, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by any
Guarantor, Administrative Agent, any Lender or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
15.9 SUBORDINATION.
In the event that any Guarantor shall advance any sums to the Borrowers,
or in the event the Borrowers has heretofore or shall hereafter become indebted
to any Guarantor before the Obligations have been paid in full and this
Agreement is terminated, all such advances and indebtedness shall be subordinate
in all respects to the Obligations (the foregoing herein called the "Guarantor
Subordinated Debt"). Any payment to any Guarantors on account of the Guarantor
Subordinated Debt shall be collected and received by the Guarantors in trust for
the Lenders and shall be paid over to the Administrative Agent on account of the
Obligations without impairing or releasing the obligations of the Guarantors
hereunder. Without limitation of the forgoing, without the prior written consent
of the Required Lenders, the Guarantors shall not ask, demand, receive, accept,
xxx for, set off, collect or enforce the Guarantor Subordinated Debt or any
collateral and security therefor until all of the Obligations have been paid in
full and this Agreement is terminated. In the event of any sale, receivership,
insolvency or bankruptcy proceeding, or assignment for the benefit of creditors,
or any proceeding by or against the Borrowers for any relief under any
bankruptcy or insolvency law or other laws relating to the relief of debtors,
readjustment of indebtedness, reorganizations, compositions or extensions, then
and in any such event any payment or distribution of any kind or character,
either in cash ,securities or other property, which shall be payable or
deliverable upon, or with respect to, all or any part of the Guarantor
Subordinated Debt or otherwise shall be paid or delivered directly to the
Administrative Agent for application to the obligations and liabilities of the
Guarantors under this Agreement (whether due or not due and in such order and
manner as the Administrative Agent may determine in the exercise of its sole
discretion) until the obligations of the Guarantors hereunder shall have been
fully paid and satisfied. The Guarantors hereby irrevocably authorize and
empower the Administrative Agent to demand, xxx for, collect and receive every
such payment or distribution on account of the Guarantor Subordinated Debt and
give acquittance therefor and to file claims and take such other proceedings in
the Administrative Agent's own name or in the name of the Guarantors or
otherwise, as the Administrative Agent may deem necessary or advisable to carry
out the provisions of this Agreement. The Guarantors hereby agree to execute and
deliver to the Administrative Agent such powers of attorney, assignments,
endorsements or other instruments as may be requested by the Administrative
Agent in order to enable the Administrative Agent to enforce any and all claims
upon, or with respect to, the Guarantor Subordinated Debt, and to collect and
receive any and all payments or distributions which may be payable or
deliverable at any time upon or with respect thereto. So as to secure the
performance by the Guarantors
100
of the provisions hereof, each Guarantor assigns, pledges and grants to the
Administrative Agent a security interest in, and lien on, the Guarantor
Subordinated Debt, all proceeds thereof and all any security and collateral
therefor. Upon the request of the Administrative Agent, the Guarantors shall
endorse, assign and deliver to the Administrative Agent all notes, instruments
and agreements evidencing, securing, guarantying or made in connection with the
Guarantor Subordinated Debt.
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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed under seal and delivered by their proper and duly authorized officers
as of the date set forth above.
BORROWERS:
INDUSTRIAL DISTRIBUTION GROUP, INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx, Senior Vice
President
IDG USA, LLC, a Georgia limited
liability company
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx, Vice President
GUARANTORS:
CARDINAL MACHINERY, INC., a
Tennessee corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx, Vice President
IDG-MEXICO, INC., a Georgia
corporation
By: /s/ Xxxx X. Xxxxxx
--------------------------------
Xxxx X. Xxxxxx, Vice President
103
ADMINISTRATIVE AGENT AND LENDER:
BANK OF AMERICA, N.A.
as Administrative Agent and as a
Lender
By: /s/ Xxxxxxx X. X'Xxxxx
-------------------------------
Xxxxxxx X. X'Xxxxx
Senior Vice President
Lending Office:
Address: One Federal Street
Mail Stop: MA5-503-07-19
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Notice Address:
Address: Xxx Xxxxxxx Xxxxxx
Mail Stop: MA5-503-07-19
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
104
DOCUMENTATION AGENT AND LENDER:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Syndication Agent and as a Lender
By: /s/ Xxxxxx X. Xxxx
-----------------------------
Name: Xxxxxx X. Xxxx
Title: Director
Lending Office:
Address: One Wachovia Center
000 X. Xxxxxxx Xxxxxx,
XX 0820
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice Address:
Address: One Wachovia Center
000 X. Xxxxxxx Xxxxxx, XX
0479
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
105
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxxx X. Xxxxx
-----------------------------
Name: Xxxxx X. Xxxxx
Title: Assistant Vice President
Lending Office:
Address: Xxx Xxxxx Xxxxxx - 0xx
Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Notice Address:
Address: Xxx Xxxxx Xxxxxx - 0xx
Xxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
106
XXXXXXX BUSINESS CREDIT CORPORATION,
as a Lender
By: /s/ Xxxxxxxxxxx Xxxx
----------------------------
Name: Xxxxxxxxxxx Xxxx
Title: Vice President
Lending Office:
Address: Xxx Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 212-806-4530
Notice Address:
Address: Xxx Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
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