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EXHIBIT 10.1
EXECUTION COPY
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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 10, 1997
Among
AIRXCEL, INC.,
THE GUARANTORS AT ANY TIME PARTY HERETO,
THE LENDERS NAMED HEREIN,
and
THE CHASE MANHATTAN BANK, AS AGENT
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TABLE OF CONTENTS
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I. DEFINITIONS...........................................................1
SECTION 1.01. Certain Defined Terms..................................1
SECTION 1.02. Accounting Terms......................................19
II. THE LOANS............................................................19
SECTION 2.01. Term Loan Commitments and Revolving Credit
Commitments...........................................19
SECTION 2.02. Loans.................................................20
SECTION 2.03. Notice of Loans.......................................22
SECTION 2.04. Notes; Repayment of Loans.............................23
SECTION 2.05. Interest on Loans.....................................24
SECTION 2.06. Fees..................................................24
SECTION 2.07. Termination and Reduction of Revolving Credit
Commitments and Term Loan Commitments.................24
SECTION 2.08. Interest on Overdue Amounts; Alternate Rate of
Interest..............................................25
SECTION 2.09. Prepayment of Loans...................................25
SECTION 2.10. Reserve Requirements; Change in Circumstances.........28
SECTION 2.11. Change in Legality....................................31
SECTION 2.12. Indemnity.............................................31
SECTION 2.13. Pro Rata Treatment; Assumption by and Delegation of
Authority to the Agent................................32
SECTION 2.14. Sharing of Setoffs....................................33
SECTION 2.15. Taxes.................................................34
SECTION 2.16. Payments and Computations.............................36
SECTION 2.17. Issuance of Letters of Credit.........................37
SECTION 2.18. Payment of Letters of Credit; Reimbursement...........38
SECTION 2.19. Agent's Actions with respect to Letters of Credit.....39
SECTION 2.20. Letter of Credit Fees.................................40
III. COLLATERAL SECURITY..................................................40
SECTION 3.01. Security Documents....................................40
SECTION 3.02. Filing and Recording..................................40
IV. REPRESENTATIONS AND WARRANTIES.......................................41
SECTION 4.01. Organization, Legal Existence.........................41
SECTION 4.02. Authorization.........................................41
SECTION 4.03. Governmental Approvals................................42
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SECTION 4.04. Binding Effect........................................42
SECTION 4.05. Material Adverse Change...............................42
SECTION 4.06. Litigation; Compliance with Laws; etc.................42
SECTION 4.07. Financial Statements..................................42
SECTION 4.08. Federal Reserve Regulations...........................43
SECTION 4.09. Taxes.................................................44
SECTION 4.10. Employee Benefit Plans................................44
SECTION 4.11. No Material Misstatements.............................46
SECTION 4.12. Investment Company Act; Public Utility Holding
Company Act...........................................46
SECTION 4.13. Security Interest.....................................46
SECTION 4.14. Use of Proceeds.......................................46
SECTION 4.15. Subsidiaries..........................................46
SECTION 4.16. Title to Properties; Possession Under Leases;
Trademarks............................................46
SECTION 4.17. Solvency..............................................47
SECTION 4.18. Permits, etc..........................................48
SECTION 4.19. Compliance with Environmental Laws....................48
SECTION 4.20. No Change in Credit Criteria or Collection Policies...49
SECTION 4.21. Acquisition...........................................49
SECTION 4.22. Bank Accounts.........................................50
V. CONDITIONS OF CREDIT EVENTS..........................................50
SECTION 5.01. All Credit Events.....................................50
SECTION 5.02. First Borrowing.......................................50
VI. AFFIRMATIVE COVENANTS................................................55
SECTION 6.01. Legal Existence.......................................55
SECTION 6.02. Businesses and Properties.............................55
SECTION 6.03. Insurance.............................................55
SECTION 6.04. Taxes.................................................56
SECTION 6.05. Financial Statements, Reports, etc....................56
SECTION 6.06. Litigation and Other Notices..........................59
SECTION 6.07. ERISA.................................................59
SECTION 6.08. Maintaining Records; Access to Properties and
Inspections; Right to Audit...........................60
SECTION 6.09. Use of Proceeds.......................................61
SECTION 6.10. Fiscal Year-End.......................................61
SECTION 6.11. Further Assurances....................................61
SECTION 6.12. Additional Grantors and Guarantors....................61
SECTION 6.13. Environmental Laws....................................61
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SECTION 6.14. Pay Obligations to Lenders and Perform Other
Covenants.............................................63
SECTION 6.15. Maintain Operating Accounts...........................63
SECTION 6.16. Amendments............................................64
SECTION 6.17. Lock-Box Accounts.....................................64
VII. NEGATIVE COVENANTS...................................................64
SECTION 7.01. Liens.................................................64
SECTION 7.02. Sale and Lease-Back Transactions......................65
SECTION 7.03. Indebtedness..........................................66
SECTION 7.04. Dividends, Distributions and Payments.................66
SECTION 7.05. Consolidations, Mergers and Sales of Assets...........66
SECTION 7.06. Investments...........................................67
SECTION 7.07. [Intentionally Omitted.]..............................67
SECTION 7.08. [Intentionally Omitted.]..............................68
SECTION 7.09. Leverage Ratio........................................68
SECTION 7.10. Interest Coverage Ratio...............................68
SECTION 7.11. Business..............................................68
SECTION 7.12. Sales of Receivables..................................68
SECTION 7.13. Use of Proceeds.......................................68
SECTION 7.14. ERISA.................................................68
SECTION 7.15. Accounting Changes....................................69
SECTION 7.16. Prepayment or Modification of Indebtedness;
Modification of Charter Documents.....................69
SECTION 7.17. Transactions with Affiliates..........................69
SECTION 7.18. Consulting Fees.......................................69
SECTION 7.19. Negative Pledges, Etc.................................69
VIII. EVENTS OF DEFAULT....................................................70
IX. AGENT................................................................73
X. MANAGEMENT, COLLECTION AND STATUS OF RECEIVABLES AND OTHER
COLLATERAL...........................................................76
SECTION 10.01. Collection of Receivables; Management of Collateral...76
SECTION 10.02. Receivables Documentation.............................78
SECTION 10.03. Status of Receivables and Other Collateral............78
SECTION 10.04. Monthly Statement of Account..........................79
SECTION 10.05. Collateral Custodian..................................79
XI. MISCELLANEOUS........................................................80
SECTION 11.01. Notices...............................................80
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SECTION 11.02. Survival of Agreement.................................80
SECTION 11.03. Successors and Assigns; Participations................81
SECTION 11.04. Expenses; Indemnity...................................84
SECTION 11.05. Applicable Law........................................85
SECTION 11.06. Right of Setoff.......................................85
SECTION 11.07. Payments on Business Days.............................86
SECTION 11.08. Waivers; Amendments...................................86
SECTION 11.09. Severability..........................................87
SECTION 11.10. Entire Agreement; Waiver of Jury Trial, etc...........88
SECTION 11.11. Confidentiality.......................................88
SECTION 11.12. Submission to Jurisdiction............................89
SECTION 11.13. Counterparts; Facsimile Signature.....................89
SECTION 11.14. Headings..............................................89
XII. GUARANTEES...........................................................90
EXHIBITS
EXHIBIT A Form of Term Note
EXHIBIT B Form of Revolving Credit Note
EXHIBIT C Form of Opinion of Counsel
EXHIBIT D Form of Pledge Agreement
EXHIBIT E Form of Security Agreement
EXHIBIT F Form of Assignment and Acceptance
EXHIBIT G Form of Security Agreement - Patents and Trademarks
EXHIBIT H Form of Guarantee
EXHIBIT I Form of Assignment of Contract
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SCHEDULES
SCHEDULE 2.01(a) Term Loan Commitments
SCHEDULE 2.01(b) Revolving Credit Commitments
SCHEDULE 2.02 Domestic Lending Offices
SCHEDULE 2.03 Eurodollar Lending Offices
SCHEDULE 2.20 Letter of Credit Fee Schedule
SCHEDULE 4.01 Qualified Jurisdictions
SCHEDULE 4.05 Material Adverse Change
SCHEDULE 4.06(a) Litigation
SCHEDULE 4.06(b) Compliance with Laws
SCHEDULE 4.15 Subsidiaries
SCHEDULE 4.16(a) Defects in Title
SCHEDULE 4.16(c) Pending Claims
SCHEDULE 4.19 Environmental Law Compliance
SCHEDULE 4.22 Bank Accounts
SCHEDULE 6.05(g) Inventory Designations
SCHEDULE 6.05(k) Borrowing Base Certificate
SCHEDULE 7.01 Existing Liens
SCHEDULE 7.03 Existing Indebtedness
SCHEDULE I Management Investors
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AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 10, 1997,
among AIRXCEL, INC. (formerly known as Recreation Vehicle Products,
Inc.), a Delaware corporation (the "Borrower"), the Guarantors at
any time party hereto, the lenders named in Schedules 2.01(a) and
2.01(b) annexed hereto (collectively, the "Lenders"), and THE CHASE
MANHATTAN BANK, as agent for the Lenders (in such capacity, the
"Agent").
The Borrower has applied to the Lenders for Loans (such term and all
other capitalized terms used in this paragraph having the respective meanings
ascribed to such terms above or hereinafter) in the form of Revolving Credit
Loans to the Borrower at any time and from time to time prior to the Revolving
Credit Termination Date in an aggregate principal amount not in excess of
$15,000,000 at any time outstanding. The proceeds of the Revolving Credit Loans
shall be used for working capital and general corporate purposes. The Grantors
will provide Collateral in accordance with the provisions of this Agreement and
the Security Documents. The Lenders are severally, and not jointly, willing to
extend such Loans to the Borrower subject to the terms and conditions
hereinafter set forth. Accordingly, the Borrower, the Guarantors, the Lenders
and the Agent hereby agree as follows:
I. DEFINITIONS
SECTION 1.01 Certain Defined Terms. For purposes hereof, the
following terms shall have the meanings specified below:
"Acquisition" shall mean the purchase by the Borrower of all of the
assets, and the assumption of certain liabilities, of Crispaire Corporation
pursuant to the provisions of the Acquisition Agreement.
"Acquisition Agreement" shall mean the Asset Purchase Agreement
dated as of October 17, 1997, among Crispaire Corporation, as seller, and the
Borrower, as buyer, and Holdings, the parent of Borrower.
"Acquisition Documents" shall mean the Acquisition Agreement and all
agreements, documents and instruments executed and delivered pursuant thereto or
in connection therewith, in each case as in effect on the Closing Date.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Loan
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the product of (i) the LIBO Rate in
effect for such Interest Period and (ii) Statutory Reserves. For purposes
hereof, "Statutory Reserves" shall mean 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
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reserve percentages (including, without limitation, any marginal, special,
emergency, or supplemental reserves) expressed as a decimal established by the
Board and any other banking authority to which any Lender is subject with
respect to the Adjusted LIBO Rate for Eurocurrency Liabilities (as defined in
Regulation D). Such reserve percentages shall include, without limitation, those
imposed under Regulation D. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and as such shall be deemed to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets which may be available from time to time to any Lender under Regulation
D. Statutory Reserves shall be adjusted automatically on and as of the effective
date of any change in any reserve percentage.
"Affiliate" of any person shall mean any other person which,
directly or indirectly, controls or is controlled by or is under common control
with such person and, without limiting the generality of the foregoing, includes
(i) any person which beneficially owns or holds 5% or more of any class of
voting securities of such person or 5% or more of the equity interest in such
person, (ii) any person of which such person benefi cially owns or holds 5% or
more of any class of voting securities or in which such person beneficially owns
or holds 5% or more of the equity interest in such person and (iii) any director
or officer of such person. For the purposes of this definition, the term
"control" (including, with correlative meanings, the terms "controlled by" and
"under common control with"), as used with respect to any person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person, whether through the
ownership of voting securities or by contract or otherwise.
"Agent" shall have the meaning assigned to such term in the preamble
to this Agreement.
"Alternate Base Loan" shall mean a Loan based on the Alternate Base
Rate in accordance with Article II hereof.
"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Prime Rate in effect on such day, (b) the Base CD Rate in effect on such
day plus 1%, and (c) the Federal Funds Effective Rate in effect on such day plus
1/2 of 1%. "Prime Rate" shall mean the rate of interest per annum publicly
announced from time to time by the Agent at its principal office in New York
City as its prime rate in effect at such time. "Base CD Rate" shall mean the sum
of (a) the product of (i) the Three-Month Secondary CD Rate and (ii) Statutory
Reserves and (b) the Assessment Rate. "Three-Month Secondary CD Rate" shall
mean, for any day, the secondary market rate for three-month certificates of
deposit reported as being in effect on such day (or, if such day shall not be a
Business Day, the next preceding Business Day) by the Board through the public
information telephone line of the Federal Reserve Bank of New York (which rate
will, under the current practices of the Board, be published in Federal
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Reserve Statistical Release H.15(519) during the week following such day), or,
if such rate shall not be so reported on such day or such next preceding
Business Day, the average of the secondary market quotations for three-month
certificates of deposit of major money center banks in New York City received at
approximately 10:00 a.m., New York City time, on such day (or, if such day shall
not be a Business Day, on the next preceding Business Day) by the Agent from
three New York City negotiable certificate of deposit dealers of recognized
standing selected by it. "Statutory Reserves" shall mean 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 maximum reserve percentage (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal,
established by the Board and any other banking authority to which the Agent is
subject with respect to the Base CD Rate, for new negotiable nonpersonal time
deposits in dollars of over $100,000 with maturities approximately equal to
three months. Statutory Reserves shall be adjusted automatically on and as of
the effective date of any change in any reserve percentage. "Assessment Rate"
shall mean the annual assessment rate (net of refunds and rounded upwards, if
necessary, to the next 1/16 of 1%) estimated by the Agent (in good faith, but in
no event in excess of statutory or regulatory maximums) to be payable by the
Agent to the Federal Deposit Insurance Corporation (or any successor) for
insurance by such Corporation (or such successor) of time deposits made in
dollars at the Agent's domestic offices during the current calendar year.
"Federal Funds Effective Rate" shall mean, for any day, the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day which is a Business Day, the average of the
quotations for the day of such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by it. If for any reason
the Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Base CD Rate or the Federal
Funds Effective Rate, or both, for any reason, including, the inability or
failure of the Agent to obtain sufficient quotations in accordance with the
terms hereof, the Alternate Base Rate shall be determined without regard to
clause (b) or (c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime Rate,
the Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be
effective on the effective date of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Lending Office" shall mean, with respect to each Lender,
such Lender's Domestic Lending Office in the case of an Alternate Base Loan and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Loan.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee and accepted by the Agent, in
substantially
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the form of Exhibit F annexed hereto.
"Assignment of Contract" shall mean, collectively, the Assignment of
Contract, dated as of the date hereof, between the Borrower and the Agent, for
its own benefit and for the benefit of the Lenders, and the Assignment of
Contract, dated as of the Original Closing Date, between Holdings and the Agent,
for its own benefit and for the benefit of the Lenders, each substantially in
the form of Exhibit I annexed hereto, each as amended, modified or supplemented
from time to time.
"Availability" shall mean at any time (i) the lesser at such time of
(x) the Total Revolving Credit Commitment and (y) the Borrowing Base as set
forth in the most recent certificate delivered pursuant to Section 6.05(j),
minus (ii) the sum at such time of (x) the unpaid principal balance of the
Revolving Credit Loans together with all reserves established pursuant to this
Agreement including, without limitation, Sections 2.01 and 7.01(c) hereof, and
(y) the Letter of Credit Usage.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrower" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Borrowing Base" shall have the meaning assigned to such term in
Section 2.01(b) hereof.
"Business Day" shall mean any day, other than a Saturday, Sunday or
legal holiday in the State of New York, on which banks are open for
substantially all their banking business in New York City except that, if any
determination of a "Business Day" shall relate to a Eurodollar Loan, the term
"Business Day" shall in addition exclude any day on which banks are not open for
dealings in dollar deposits in the London interbank market.
"Capitalized Lease Obligation" shall mean an obligation to pay rent
or other amounts under any lease of (or other arrangement conveying the right to
use) real and/or personal property which obligation is required to be classified
and accounted for as a capital lease on a balance sheet prepared in accordance
with GAAP, and for purposes hereof the amount of such obligation shall be the
capitalized amount thereof determined in accordance with GAAP.
"Cash Interest Expense" shall mean, with respect to any person for
any period, the Interest Expense of such person for such period less all
non-cash items constituting Interest Expense during such period (including,
without limitation, amortization of debt discounts and payments of interest on
Indebtedness by issuance of Indebtedness or by accrual), determined on a
Consolidated basis in accordance with
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GAAP.
"Change of Control" shall mean either (i) Holdings shall cease to
own 100% all classes of the Borrower's outstanding capital stock, free and clear
of any Liens (other than Liens created pursuant to this Agreement), or (ii) the
Investor Group shall cease to own common stock of Holdings representing not less
than 65% of the common equity interest, whether voting or non-voting, in
Holdings on a fully diluted basis assuming the exercise of all securities
exercisable, convertible or exchangeable for or into common stock equity
interests and (B) after a registered initial public offering of the common stock
of Holdings, the Investor Group shall cease to own common stock of Holdings
representing not less than 51% of the common equity interest, whether voting or
non-voting, in Holdings on a fully diluted basis assuming the exercise of all
securities exercisable, convertible or exchangeable for or into common stock
interests.
"Closing Date" shall mean the date of the first borrowing under this
Agreement, but in no event later than November 17, 1997.
"Coast" shall mean The Coast Distribution Systems, Inc., a
California corporation.
"Coast Distribution Agreement" shall mean the Distribution Agreement
dated as of October 11, 1995 between the Borrower and Coast.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral" shall mean all collateral and security as described in
the Security Documents.
"Commitment" shall mean, with respect to each Lender, the sum of the
Term Loan Commitment of such Lender as set forth in Schedule 2.01(a), and the
Revolving Credit Commitment of such Lender as set forth in Schedule 2.01(b), as
each may be adjusted from time to time pursuant to this Agreement including,
without limitation, Section 2.07 hereof.
"Consolidated" shall mean, in respect of any person, as applied to
any financial or accounting term, such term determined on a consolidated basis
in accordance with GAAP (except as otherwise required herein) for the person and
all consolidated subsidiaries thereof.
"Credit Event" shall mean each borrowing and each issuance of a
Letter of Credit hereunder.
"Credits" shall mean each Loan and each Letter of Credit.
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"Customer" shall mean and include the account debtor or obligor with
respect to any Receivable.
"Default" shall mean any condition, act or event which, with notice
or lapse of time or both, would constitute an Event of Default.
"dollars" or the symbol "$" shall mean dollars in lawful currency of
the United States of America.
"Domestic Lending Office" shall mean, with respect to any Lender,
the office of such Lender specified as its "Domestic Lending Office" opposite
its name in Schedule 2.02 annexed hereto, or such other office of such Lender as
such Lender may from time to time specify to the Borrower and the Agent.
"Domestic Subsidiary" means, with respect to any person, any
subsidiary of such person which is incorporated or organized under the laws of
the United States, any State or the District of Columbia or the Commonwealth of
Puerto Rico.
"EBITDA" shall mean with respect to any person for any period the
sum of (i) Net Income, (ii) Interest Expense, (iii) depreciation and
amortization of intangible assets and (iv) federal, state and local income
taxes, in each case of such person for such period, in each case, determined on
a Consolidated basis in accordance with GAAP.
"Eligible Inventory" shall mean the Eligible Raw Materials/Finished
Goods and the Eligible WIP Inventory.
"Eligible Raw Materials/Finished Goods Inventory" shall mean
inventory of the Borrower comprised solely of raw materials and finished goods
which is, in the opinion of the Agent, not obsolete, slow-moving or
unmerchantable and is and at all times shall continue to be acceptable to the
Agent in all respects; provided, however, that Eligible Raw Materials/Finished
Goods Inventory shall in no event include inventory which (i) is not located at
one of the addresses for locations of Collateral set forth on Schedule I to the
Security Agreement and with respect to which the Agent has not been granted and
has not perfected a valid, first priority security interest, (ii) has been
returned or rejected by a Customer or (iii) is Eligible WIP Inventory. Standards
of eligibility may be fixed and revised from time to time solely by the Agent in
the Agent's exclusive judgment exercised in its reasonable commercial
discretion. In determining eligibility, the Agent may, but need not, rely on
reports and schedules furnished by the Borrower, but reliance by the Agent
thereon from time to time shall not be deemed to limit the right of the Agent to
revise standards of eligibility at any time as to both present and future
inventory of the Borrower. If any inventory at any time ceases to be Eligible
Raw Materials/Finished Goods Inventory, such inventory shall promptly be
excluded from the calculation of Eligible Raw Materials/Finished Goods
Inventory.
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"Eligible WIP Inventory" shall mean inventory of the Borrower (but
only the RVP Division) comprised solely of work-in-process consisting of
component parts used in the assembly of air conditioning units, excluding any
work-in-process relating to the assembly of awning products, which is, in the
opinion of the Agent, not obsolete, slow-moving or unmerchantable and is and at
all times shall continue to be acceptable to the Agent in all respects;
provided, however, that Eligible WIP Inventory shall in no event include
inventory which (i) is not located at one of the addresses for locations of
Collateral set forth on Schedule I to the Security Agreement and with respect to
which the Agent has not been granted and has not perfected a valid, first
priority security interest, (ii) has been returned or rejected by a Customer or
(iii) is Eligible Raw Materials/Finished Goods Inventory. Standards of
eligibility may be fixed and revised from time to time solely by the Agent in
the Agent's exclusive judgment exercised in its reasonable commercial
discretion. In determining eligibility, the Agent may, but need not, rely on
reports and schedules furnished by the Borrower, but reliance by the Agent
thereon from time to time shall not be deemed to limit the right of the Agent to
revise standards of eligibility at any time as to both present and future
inventory of the Borrower. If any inventory at any time ceases to be Eligible
WIP Inventory, such inventory shall promptly be excluded from the calculation of
Eligible WIP Inventory.
"Eligible Receivables" shall mean Receivables created by the
Borrower in the ordinary course of business arising out of the sale or lease of
goods or rendition of services by the Borrower, which are and at all times shall
continue to be acceptable to the Agent in all respects. Standards of eligibility
may be fixed and revised from time to time solely by the Agent in the Agent's
exclusive judgment exercised in its reasonable commercial discretion. In
general, without limiting the foregoing, a Receivable shall in no event be
deemed to be an Eligible Receivable unless: (a) all payments due on the
Receivable have been invoiced and the underlying goods shipped or services
performed, as the case may be; (b) the payment due on the Receivable is not more
than 60 days past the invoice date; (c) the payments due on more than 50% of all
Receivables from the same Customer are less than 60 days past the invoice date;
(d) the Receivable arose from a completed and bona fide transaction (and with
respect to a sale of goods, a transaction in which title has passed to the
Customer) which requires no further act under any circumstances on the part of
the Borrower in order to cause such Receivable to be payable in full by the
Customer; (e) the Receivable is in conformity in all material respects with the
representations and warranties made by the Borrower to the Agent and the Lenders
with respect thereto and is free and clear of all security interests and Liens
of any nature whatsoever other than any security interest deemed to be held by
the Borrower or any security interest created pursuant to the Security Documents
or permitted by Section 7.01 hereof; (f) the Receivable constitutes an "account"
or "chattel paper" within the meaning of the Uniform Commercial Code of the
state in which the Receivable is located; (g) the Customer has not asserted that
the Receivable, and the Borrower is not aware that the Receivable, arises out of
a xxxx and hold, consignment or progress billing arrangement or is subject to
any setoff, contras, net-out contract, offset, deduction, dispute, credit,
counterclaim or other defense arising
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out of the transactions represented by the Receivables or independently thereof
and the Customer has finally accepted the goods from the sale out of which the
Receivable arose and has not objected to its liability thereon or returned,
rejected or repossessed any of such goods, except for complaints made or goods
returned in the ordinary course of business for which, in the case of goods
returned, goods of equal or greater value have been shipped in return; (h) the
Receivable arose in the ordinary course of business of the Borrower; (i) the
Customer is not (x) the United States government or the government of any state
or political subdivision thereof or therein, or any agency or department of any
thereof or (y) an Affiliate of Holdings, the Borrower or any subsidiary thereof;
(j) (x) the Customer is a United States or Canadian person or an obligor in the
United States or Canada or (y) such Receivable is secured or payable by a letter
of credit, insurance or guaranty satisfactory to the Agent in its discretion;
(k) the Receivable complies with all material requirements of all applicable
laws and regulations, whether Federal, state or local (including, without
limitation, usury laws and laws, rules and regulations relating to truth in
lending, fair credit billing, fair credit reporting, equal credit opportunity,
fair debt collection practices and privacy); (l) to the knowledge of the
Borrower, the Receivable is in full force and effect and constitutes a legal,
valid and binding obligation of the Customer enforceable in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium and other similar laws affecting the enforcement of
creditors' rights generally and by general equity principles; (m) the Receivable
is denominated in and provides for payment by the Customer in dollars; (n) the
Receivable has not been and is not required to be charged off or written off as
uncollectible in accordance with GAAP or the customary business practices of the
Borrower; (o) the Agent on behalf of the Lenders possesses a valid, perfected
first priority security interest in such Receivable as security for payment of
the Obligations; and (p) the Agent is satisfied with the credit standing of the
Customer (or any guarantor of a Customer, including without limitation, Coast)
in relation to the amount of credit extended.
"Environmental Claim" shall mean any written notice of violation,
claim, demand, abatement or other order by any governmental authority or any
person for personal injury (including sickness, disease or death), tangible or
intangible property damage, damage to the environment, nuisance, pollution,
contamination or other adverse effects on the environment, or for fines,
penalties or deed or use restrictions, resulting from or based upon (i) the
existence, or the continuation of the existence, of a Release (including,
without limitation, sudden or non-sudden, accidental or nonaccidental Releases),
of, or exposure to, any Hazardous Material at, in, by or from any of the
properties of the Borrower or its subsidiaries, (ii) the environmental aspects
of the transportation, storage, treatment or disposal of Hazardous Materials in
connection with the operation of any of the properties of the Borrower or its
subsidiaries or (iii) the violation, or alleged violation by the Borrower or any
of its subsidiaries, of any statutes, ordinances, orders, rules, regulations,
Permits or licenses of or from any governmental authority, agency or court
relating to environmental matters connected with any of the properties of the
Borrower or its subsidiaries, under any applicable
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Environmental Law.
"Environmental Laws" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. ss. 9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C. ss. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. ss. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss. 1251 et seq.), the Oil Pollution Act of
1990 (33 U.S.C. ss.2701 et. seq.), the Safe Drinking Water Act (42 U.S.C. ss.
300f, et seq.), the Clear Air Act (42 U.S.C. ss. 7401 et seq.), the Toxic
Substances Control Act, as amended (15 U.S.C. ss. 2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. ss. 136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C. ss. 651 et seq.), as such laws
have been and hereafter may be amended or supplemented, and any applicable
related or analogous present or future Federal, state or local, statutes, rules,
regulations, ordinances, licenses, permits and orders of regulatory and
administrative bodies.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations promulgated thereunder, as in
effect from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) which together with the Borrower or any of its subsidiaries would
be treated as a single employer under the provisions of Title I or Title IV of
ERISA.
"Eurodollar Lending Office" shall mean, with respect to any Lender,
the office of such Lender specified as its "Eurodollar Lending Office" opposite
its name in Schedule 2.03 annexed hereto (or, if no such office is specified,
its Domestic Lending Office), or such other office of such Lender as such Lender
may from time to time specify to the Borrower and the Agent.
"Eurodollar Loan" shall mean a Loan based on the Adjusted LIBO Rate
in accordance with Article II hereof.
"Event of Default" shall have the meaning assigned to such term in
Article VIII hereof.
"Final Maturity Date" shall mean October 31, 2002.
"Financial Officer" shall mean, with respect to any person, the
chief financial officer or the chief accounting officer of such person.
"Fiscal Year" shall mean the fiscal year of the Borrower for
accounting purposes which ends on December 31 of each year.
"Foreign Subsidiary" means, with respect to any person, any
subsidiary of
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16
such Person which is not a Domestic Subsidiary of such Person. On the Closing
Date, the Borrower's sole Foreign Subsidiary is RVPI.
"Funded Debt" shall mean with respect to any person as of the date
of determination thereof, all Indebtedness of such person and its subsidiaries
on a Consolidated basis outstanding at such time which matures more than one
year after the date of calculation, and any such Indebtedness maturing within
one year from such date of calculation which is renewable or extendable at the
option of the obligor to a date more than one year from such date and including
in any event the Revolving Credit Loans.
"GAAP" shall have the meaning assigned to such term in Section 1.02
hereof.
"Grantor" shall mean any Grantor, Pledgor or Debtor, as such terms
are defined in any of the Security Documents.
"Guarantee" shall mean any obligation, contingent or otherwise, of
any person guaranteeing or having the economic effect of guaranteeing any
Indebtedness or obligation of any other person in any manner, whether directly
or indirectly, and shall include, without limitation, any obligation of such
person, direct or indirect, to (i) purchase or pay (or advance or supply funds
for the purchase or payment of) such Indebtedness or obligation or to purchase
(or to advance or supply funds for the purchase of) any security for the payment
of such Indebtedness or obligation, (ii) purchase property, securities or
services for the purpose of assuring the owner of such Indebtedness or
obligation of the payment of such Indebtedness or obligation, or (iii) maintain
working capital, equity capital, available cash or other financial condition of
the primary obligor so as to enable the primary obligor to pay such Indebtedness
or obligation; provided, however, that the term Guarantee shall not include
endorsements for collection or collections for deposit, in either case in the
ordinary course of business.
"Guarantor" shall mean, collectively, any Domestic Subsidiary of the
Borrower which becomes a guarantor of the Obligations after the date hereof.
"Hazardous Material" shall mean any pollutant, contaminant, or
hazardous, toxic or dangerous waste, substance or material, defined or regulated
as such in (or for purposes of) any Environmental Law and any other toxic,
reactive, or flammable chemicals, including (without limitation) any asbestos,
any petroleum (including crude oil or any fraction), any radioactive substance
and any polychlorinated biphenyls; provided, in the event that any Environmental
Law is amended so as to broaden the meaning of any term defined thereby, such
broader meaning shall apply subsequent to the effective date of such amendment;
and provided, further, to the extent that the applicable laws of any state
establish a meaning for "hazardous material," "hazardous substance," "hazardous
waste," "solid waste" or "toxic substance"
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which is broader than that specified in any Federal Environmental Law, such
broader meaning shall apply.
"Holdings" shall mean Airxcel Holdings, Inc., a Delaware
corporation, together with its successors and assigns.
"Indebtedness" shall mean, with respect to any person, (a) all
obligations of such person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such person evidenced by bonds,
debentures, notes or other similar instruments or upon which interest charges
are customarily paid, (c) all obligations of such person for the deferred
purchase price of property or services, except current accounts payable arising
in the ordinary course of business and not overdue beyond such period as is
commercially reasonable for such person's business, or, if overdue, the validity
of which are being contested in good faith by appropriate proceedings by such
person, (d) all obligations of such person under conditional sale or other title
retention agreements relating to property purchased by such person and all
Capitalized Lease Obligations, (e) all payment obligations of such person with
respect to interest rate or currency protection agreements, (f) all obligations
of such person as an account party under any letter of credit or in respect of
bankers' acceptances, (g) all obligations of any third party secured by property
or assets of such person (regardless of whether or not such person is liable for
repayment of such obligations), (h) all Guarantees of such person and (i) the
redemption price of all redeemable preferred stock of such person, but only to
the extent that such stock is redeemable at the option of the holder or requires
sinking fund or similar payments at any time prior to the Final Maturity Date.
"Indemnitees" shall have the meaning assigned to such term in
Section 11.04(c) hereof.
"Information" shall have the meaning assigned to such term in Sec
tion 11.11 hereof.
"Interest Coverage Ratio" shall mean, with respect to any person for
any four-quarter period, the ratio of (i) (x) EBITDA for the four (or such
lesser number of quarters as shall have elapsed since the Closing Date) most
recent consecutive fiscal quarters ending on or prior to the date of
determination minus (y) capital expenditures [(including, without limitation,
Capitalized Lease Obligations) of such person for such period, to (ii) the Cash
Interest Expense of such person for such four (or such lesser number of quarters
as shall have elapsed since the Closing Date) quarter period, in each case,
determined on a Consolidated basis in accordance with GAAP.
"Interest Expense" shall mean, with respect to any person for any
period, the interest expense of such person during such period determined on a
Consolidated basis in accordance with GAAP, and shall in any event include,
without limitation, (i) the
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amortization of debt discounts, (ii) the amortization of all fees payable in
connection with the incurrence of Indebtedness to the extent included in
interest expense, (iii) the portion of any Capitalized Lease Obligation
allocable to interest expense, (iv) all fixed and all calculable dividend
payments on preferred stock, and (v) payments of interest expense in kind.
"Interest Payment Date" shall mean (i) in the case of an Alternate
Base Loan, the first Business Day of each January, April, July and October,
commencing January 2, 1998, and (ii) with respect to any Eurodollar Loan, the
last day of the Interest Period applicable thereto, and, in addition, in respect
of any Eurodollar Loan of more than three (3) months' duration, each earlier day
which is three (3) months after the first day of such Interest Period.
"Interest Period" shall mean, as to any Eurodollar Loan, the period
commencing on the date of such Eurodollar Loan and ending on the numerically
corresponding day (or, if there is no numerically corresponding day, on the last
day) in the calendar month that is one (1), two (2), three (3) or six (6) months
thereafter, as the Borrower may elect with respect to its Eurodollar Loans;
provided, however, that (x) if an Interest Period would end on a day that is not
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, with respect to Eurodollar Loans, such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, (y) no Interest Period
shall end later than the Final Maturity Date and (z) interest shall accrue from
and including the first day of an Interest Period to but excluding the last day
of such Interest Period.
"Investor Group" shall mean Citicorp Venture Capital, Ltd.,
its Affiliates, their respective employees and the Management Investors.
"Lender" shall have the meaning assigned to such term in the
preamble to this Agreement.
"Letter of Credit" shall have the meaning assigned such term in
Section 2.17 hereof.
"Letter of Credit Usage" shall mean at any time, (i) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (ii) the
unreimbursed drawings at such time under all such Letters of Credit.
"Leverage Ratio" with respect to any person at the end of any fiscal
quarter shall mean the ratio of (i) Funded Debt as at the date of determination
to (ii) EBITDA of such person for the four most recent consecutive fiscal
quarters ending on or prior to the date of determination, in each case,
determined on a Consolidated basis in accordance with GAAP.
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"LIBO Rate" shall mean, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the rate at which dollar deposits approximately
equal in principal amount to the Eurodollar Loan of the Agent and for a maturity
equal to the applicable Interest Period are offered in immediately available
funds to the London branch of the Agent by leading banks in the London interbank
market for Eurodollars at approxi mately 11:00 a.m., London time, two (2)
Business Days prior to the first day of such Interest Period.
"Lien" shall mean, with respect to any asset, (i) any mortgage,
lien, pledge, encumbrance, charge or security interest in or on such asset, (ii)
the interest of a vendor or a lessor under any conditional sale agreement,
capital lease or other title retention agreement relating to such asset, (iii)
in the case of securities, any purchase option, call or similar right of a third
party with respect to such securities or (iv) any other right of or arrangement
with any creditor to have such creditor's claim satisfied out of such assets, or
the proceeds therefrom, prior to the general creditors of the owner thereof.
"Loan" shall mean any Term Loan or any Revolving Credit Loan.
"Loan Documents" shall mean this Agreement, each Security Document,
each Guarantee executed and delivered at any time with respect to the
Obligations, the Notes and each other document, instrument, or agreement now or
hereafter delivered to the Agent or any Lender in connection herewith or
therewith.
"Loan Party" shall mean the Borrower, each Grantor, each Guarantor,
and each subsidiary thereof.
"Management Investors" shall mean the individual investors listed on
Schedule I attached hereto.
"Margin Stock" shall have the meaning assigned to such term in
Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on
(i) the business, assets, prospects, operations or financial or other condition
of any Loan Party, (ii) the ability of any Loan Party to perform or pay the
Obligations in accordance with the terms hereof or of any other Loan Document,
(iii) the rights of, or benefits available to, the Lenders or the Agent under
any Loan Document or (iv) the Agent's Lien on any material portion of the
Collateral or the priority of such Lien.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Sec tion 4001(a)(3) of ERISA.
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"Net Amount of Eligible Inventory" shall mean, at any time, the Net
Amount of Eligible Raw Materials/Finished Goods Inventory and the Net Amount of
Eligible WIP Inventory.
"Net Amount of Eligible Raw Materials/Finished Goods Inventory"
shall mean, at any time, the aggregate value, computed at the lower of cost (on
a FIFO basis) and current market value, of Eligible Raw Materials/Finished Goods
Inventory of the Borrower.
"Net Amount of Eligible Receivables" shall mean and include at any
time, without duplication, the gross amount of Eligible Receivables at such time
less (i) sales, excise or similar taxes and (ii) returns, discounts, claims,
credits and allowances of any nature at any time issued, owing, granted,
outstanding, available or claimed.
"Net Amount of Eligible WIP Inventory" shall mean, at any time,
sixty-five percent (65%) of the aggregate value, computed at the lower of cost
(on a FIFO basis) and current market value, of Eligible WIP Inventory of the
Borrower.
"Net Income" shall mean, with respect to any person for any period,
the aggregate income (or loss) of such person for such period which shall be an
amount equal to net revenues and other proper items of income for such person
less the aggregate for such person of any and all items that are treated as
expenses under GAAP, less Federal, state and local income taxes, plus, to the
extent deducted or added in determining net income, non-cash expenses associated
with Holdings' stock option plans, but excluding any extraordinary gains or
losses or any gains or losses from the sale or disposition of assets other than
in the ordinary course of business, in each case, determined on a Consolidated
basis in accordance with GAAP.
"Notes" shall mean the Term Notes and the Revolving Credit Notes.
"Obligations" shall mean all obligations, liabilities and
Indebtedness of the Borrower to the Lenders and the Agent under or in connection
with the Loan Documents, whether now existing or hereafter created, direct or
indirect, due or not, whether created directly or acquired by assignment,
participation or otherwise, including without limitation all obligations,
liabilities and Indebtedness of the Borrower with respect to the Security
Documents and other Loan Documents, the principal of and interest on the
Revolving Credit Loans, the Term Loans and the payment or performance of all
other obligations, liabilities, and Indebtedness of the Borrower to the Lenders
and the Agent hereunder, under the Letters of Credit or under any one or more of
the other Loan Documents (including the payment of amounts that would become due
but for the operation of the automatic stay under Section 362(a) of the
Bankruptcy Code, and interest that, but for the filing of a petition in
bankruptcy with respect to the Borrower, would accrue on such obligations,
whether or not a claim is allowed against the Borrower for such interest in the
related bankruptcy proceeding), including without
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limitation all fees, costs, expenses and indemnity obligations hereunder and
thereunder.
"Original Closing Date" shall mean August 22, 1996.
"Original Credit Agreement" shall mean the Credit Agreement, dated
as of August 22, 1996, as amended to the Closing Date, among the Borrower, the
lenders and guarantors named therein, and the Agent.
"Other Taxes" shall have the meaning assigned to such term in
Section 2.15(b) hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"Pension Plan" shall mean any Plan which is subject to the
provisions of Title IV of ERISA.
"Permits" shall have the meaning assigned to such term in Section
4.18 hereof.
"person" shall mean any natural person, corporation, limited
liability company, business trust, association, company, joint venture,
partnership or government or any agency or political subdivision thereof.
"Plan" shall mean any employee benefit plan within the meaning of
Section 3(3) of ERISA and which is maintained (in whole or in part) for
employees of the Borrower, any subsidiary or any ERISA Affiliate.
"Pledge Agreement" shall mean the Pledge Agreement dated as of the
Original Closing Date, between the Grantor(s) and the Agent, for its own benefit
and for the benefit of the Lenders, in substantially the form of Exhibit D
annexed hereto, as amended, modified or supplemented from time to time.
"Pledged Stock" shall have the meaning assigned to such term in the
Pledge Agreement.
"Qualified Sale" shall mean any sale or other disposition by any
Loan Party or any of their respective subsidiaries, other than in the ordinary
course of business, of any equipment or property (other than inventory or
Receivables) for (x) cash equal to at least 90% of the fair market value thereof
determined in good faith by the Board of Directors of such Loan Party, (y)
"trade-in" or (z) "trade-up", in each case, of all of the net cash proceeds
thereof (a) within twelve months after the date of such sale shall be applied to
the purchase of capital equipment or property, such purchased equipment or
property to be used in the ordinary course of business of such
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Loan Party or subsidiary, and to have a fair market value in the aggregate of
not less than the amount of such net cash proceeds, or (b) shall be applied to
the payment of Indebtedness incurred in connection with the purchase of any
equipment or property described in clause (a) above, and (c) in the case of
clause (a) above, pending such application, shall be deposited into a cash
collateral account maintained with the Agent, pursuant to agreements in form,
scope and substance reasonably satisfactory to the Agent.
"Receivables" shall mean and include all of the Borrower's accounts,
instruments, documents, chattel paper and general intangibles, whether secured
or unsecured, whether now existing or hereafter created or arising, and whether
or not specifically assigned to the Agent for its own benefit and/or the ratable
benefit of the Lenders.
"Register" shall have the meaning assigned to such term in Section
11.03(e) hereof.
"Regulation D" shall mean Regulation D of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Regulation G" shall mean Regulation G of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Regulation T" shall mean Regulation T of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board, as the same is
from time to time in effect, and all official rulings and interpretations
thereunder or thereof.
"Release" shall mean any releasing, spilling, leaking, seepage,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping, in each case as defined in Environmental Law,
and shall include any "Threatened Release," as defined in Environmental Law.
"Remedial Work" shall mean any investigation, site monitoring,
containment, cleanup, removal, restoration or other remedial work of any kind or
nature with respect to any property of the Borrower or its subsidiaries (whether
such property is owned, leased, subleased or used), including, without
limitation, with respect to Hazardous Materials and the Release thereof.
"Reportable Event" shall mean a Reportable Event as defined in Xxx-
00
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tion 4043(c) of ERISA.
"Required Lenders" shall mean Lenders having 51% of the Total
Commitment.
"Responsible Officer" shall mean, with respect to any person, any
vice president or president, or the chief financial officer or controller, of
such person.
"Revolving Credit Alternate Base Loan" shall mean a Revolving Credit
Loan that is an Alternate Base Loan.
"Revolving Credit Commitment" shall mean, with respect to any
Lender, the Revolving Credit Commitment of such Lender as set forth in Schedule
2.01(b) annexed hereto, as the same may be reduced from time to time pursuant to
this Agreement including, without limitation, Section 2.07 hereof.
"Revolving Credit Commitment Fee" shall have the meaning set forth
in Section 2.06(a) hereof.
"Revolving Credit Eurodollar Loan" shall mean a Revolving
Credit Loan that is a Eurodollar Loan.
"Revolving Credit Loan" shall mean a Revolving Credit Loan made
pursuant to Sections 2.01 and 2.02 hereof.
"Revolving Credit Notes" shall mean the Revolving Credit Notes of
the Borrower, executed and delivered as provided in Section 2.04 hereof, in
substantially the form of Exhibit B annexed hereto, as amended, modified or
supplemented from time to time.
"Revolving Credit Termination Date" shall mean the earlier to occur
of (i) the Final Maturity Date and (ii) such date as the Revolving Credit Loans
shall otherwise be payable in full and the Revolving Credit Commitment shall
terminate, expire or be canceled in accordance with the terms of this Agreement.
"RVPI" shall mean RVP International Sales Corporation, a Barbados
corporation.
"Security Agreement" shall mean the Security Agreement dated as of
the Original Closing Date, between the Grantor(s) and the Agent, for its own
benefit and for the benefit of the Lenders, substantially in the form of Exhibit
E annexed hereto, as amended, modified or supplemented from time to time.
"Security Agreement - Patents and Trademarks" shall mean the
Security
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Agreement and Mortgage - Patents and Trademarks, dated as of the Original
Closing Date, between the Debtor(s), as such term is defined therein, and the
Agent, for its own benefit and for the benefit of the Lenders, substantially in
the form of Exhibit G annexed hereto, as amended, modified or supplemented from
time to time.
"Security Documents" shall mean the Pledge Agreement, the Security
Agreement, the Security Agreement - Patents and Trademarks, the Assignment of
Contract and each other agreement now existing or hereafter created providing
collateral security for the payment or performance of any Obligations.
"Subordinated Indebtedness" shall mean, with respect to the
Borrower, Indebtedness subordinated in right of payment to such person's
monetary obligations under this Agreement upon terms satisfactory to and
approved in writing by the Agent, to the extent it does not by its terms (except
as otherwise approved in writing by the Agent) mature or become subject to any
mandatory prepayment or amortization of principal prior to the Final Maturity
Date, and shall in any event include the Indebtedness of the Borrower pursuant
to the Subordinated Notes.
"Subordinated Notes" shall mean the $125,000,000 principal amount of
Senior Subordinated Notes due 2007, Series A and Series B.
"subsidiary" shall mean, with respect to any person, any
corporation, association or other business entity of which securities or other
ownership interests representing more than 50% of the ordinary voting power are,
at the time as of which any determination is being made, owned or controlled,
directly or indirectly, by the parent of such person or one or more subsidiaries
of the parent of such person.
"Taxes" shall have the meaning assigned to such term in Section
2.15(a) hereof.
"Term Alternate Base Loan" shall mean a Term Loan that is an
Alternate Base Loan.
"Term Eurodollar Loan" shall mean a Term Loan that is a
Eurodollar Loan.
"Term Loan" shall mean the Term Loan made pursuant to Sections 2.01
and 2.02.
"Term Loan Commitment" shall mean, with respect to any Lender, the
Term Loan Commitment of such Lender as set forth in Schedule 2.01(a).
"Term Notes" shall mean the Term Notes executed and delivered as
provided in Section 2.04, in substantially the form of Exhibit A hereto, as
amended, modified or supplemented from time to time.
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"Total Commitment" shall mean the sum of the Lenders' Total Term
Loan Commitment and Total Revolving Credit Commitment, as the same may be
reduced from time to time pursuant to this Agreement including, without
limitation, Section 2.07 hereof.
"Total Revolving Credit Commitment" shall mean the sum of the
Lenders' Revolving Credit Commitments, as the same may be reduced from time to
time pursuant to this Agreement including, without limitation, Section 2.07
hereof.
"Total Term Loan Commitment" shall mean the sum of the Lenders' Term
Loan Commitments, as the same may be reduced from time to time pursuant to this
Agreement including, without limitation, Section 2.07 hereof.
"Transactions" shall have the meaning assigned to such term in Sec
tion 4.02 hereof.
SECTION 1.02 Accounting Terms. Unless otherwise expressly provided
herein, each accounting term used herein shall have the meaning given it under
generally accepted accounting principles in effect from time to time in the
United States applied on a basis consistent with those used in preparing the
financial statements referred to in Section 6.05 hereof ("GAAP"); provided,
however, that each reference to GAAP in Article VII hereof, in the definition of
any term used in Article VII hereof shall mean GAAP as in effect on the date
hereof. In determining compliance with any of the financial ratios which include
the payment of interest on the Notes, payment of interest on the Notes
(excluding fees and expenses payable in connection with this Agreement) (i) made
on or about January 1 in any Fiscal Year shall be deemed to have been made in
the fourth fiscal quarter of the prior Fiscal Year, (ii) made on or about April
1 of any Fiscal Year shall be deemed to have been made in the first fiscal
quarter of such Fiscal Year, (iii) made on or about July 1 in any Fiscal Year
shall be deemed to have been made in the second fiscal quarter of such Fiscal
Year and (iv) made on or about October 1 in any Fiscal Year shall be deemed to
have been made in the third fiscal quarter of such Fiscal Year. In calculating
the financial covenants contained in Sections 7.09 and 7.10, such calculations
shall be made for the Borrower and its subsidiaries on a Consolidated basis in
accordance with GAAP.
II. THE LOANS
SECTION 2.01 Term Loan Commitments and Revolving Credit Commitments.
(a) Subject to the terms and conditions and relying upon the representations and
warranties herein set forth, each Lender, severally and not jointly, agrees to
make a Term Loan to the Borrower, in a principal amount not to exceed the amount
of such Lender's Term Loan Commitment set forth opposite its name in Schedule
2.01(a) hereto. On the Closing Date, the Total Term Loan Commitment shall be
zero.
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(b) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender, severally and not
jointly, agrees to make Revolving Credit Loans to the Borrower, at any time and
from time to time from the date hereof to the Revolving Credit Termination Date,
in an aggregate principal amount at any time outstanding not to exceed the
amount of such Lender's Revolving Credit Commitment set forth opposite its name
in Schedule 2.01(b) annexed hereto, as such Revolving Credit Commitment may be
reduced from time to time in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the aggregate principal amount of Revolving
Credit Loans outstanding at any time to the Borrower shall not exceed (1) the
lesser of (A) the Total Revolving Credit Commitment (as such amount may be
reduced pursuant to this Agreement including, without limitation, Section 2.07
hereof) and (B) an amount equal to the sum of (i) up to eighty-five percent
(85%) of the Net Amount of Eligible Receivables, plus (ii) the lesser of (x)
$7,500,000 or (y) up to sixty percent (60%) of the Net Amount of Eligible
Inventory, plus (iii) cash and equivalents thereof maintained with the Agent on
terms satisfactory to the Agent and in which the Agent shall have a first
priority perfected Lien (this clause 1(B) referred to herein as the "Borrowing
Base") minus (2) the Letter of Credit Usage at such time (not to exceed $500,000
at any time). The Borrowing Base will be computed monthly and a compliance
certificate from a Responsible Officer of the Borrower presenting its
computation will be delivered to the Agent in accordance with Section 6.05(j)
hereof.
Subject to the foregoing and within the foregoing limits, the
Borrower may borrow, repay (or, subject to the provisions of Section 2.09
hereof, prepay) and reborrow Revolving Credit Loans, on and after the date
hereof and prior to the Revolving Credit Termination Date, subject to the terms,
provisions and limitations set forth herein, including, without limitation, the
requirement that no Revolving Credit Loan shall be made hereunder if the amount
thereof exceeds the Availability as set forth in the most recent certificate
delivered to the Agent pursuant to Section 6.05(j) hereof.
SECTION 2.02 Loans. (a) The Revolving Credit Loans made by the
Lenders on any date shall be in integral multiples of $50,000; provided,
however, that the Eurodollar Loans made on any date shall be in a minimum
aggregate principal amount equal to the product of $500,000 times the number of
Lenders on such date.
(b) Loans shall be made ratably by the Lenders in accordance with
their respective Term Loan Commitments or Revolving Credit Commitments, as the
case may be; provided, however, that the failure of any Lender to make any Loan
shall not in itself relieve any other Lender of its obligation to lend
hereunder. The Term Loans shall be made by the Lenders on the date such Loan is
made against delivery of Term Notes, payable to the order of the Lenders, as
referred to in Section 2.04. The initial Revolving Credit Loans shall be made by
the Lenders against delivery of Revolving Credit Notes, payable to the order of
the Lenders, as referred to in Sec tion 2.04 hereof.
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(c) Each Loan shall be either an Alternate Base Loan or a Eurodollar
Loan as the Borrower may request pursuant to Section 2.03 hereof. Each Lender
may fulfill its obligations under this Agreement by causing its Applicable
Lending Office to make such Loan; provided, however, that the exercise of such
option shall not affect the obligation of the Borrower to repay such Loan in
accordance with the term of the applicable Note. Not more than five (5)
Eurodollar Loans may be outstanding at any one time.
(d) Subject to the provisions of paragraph (e) below, each Lender
shall make its Term Loans and Revolving Credit Loans on the proposed dates
thereof by paying the amount required to the Agent in New York, New York in
immediately available funds not later than 12:00 noon, New York City time, and
the Agent shall as soon as practicable, but in no event later than 3:00 p.m.,
New York City time, credit the amounts so received to the general deposit
account of the Borrower with the Agent in immediately available funds or, if
Loans are not to be made on such date because any condition precedent to a
borrowing herein specified is not met, return the amounts so received to the
respective Lenders.
(e) The Borrower shall have the right at any time upon prior
irrevocable written, telex or facsimile notice (promptly confirmed in writing)
to the Agent given in the manner and at the times specified in Section 2.03 with
respect to the Loans into which conversion or continuation is to be made, to
convert all or any portion of Eurodollar Loans into Alternate Base Loans, to
convert all or any portion of Alternate Base Loans into Eurodollar Loans
(specifying the Interest Period to be applicable thereto), to convert the
Interest Period with respect to all or any portion of any Eurodollar Loans to
another permissible Interest Period, and to continue all or any portion of any
Loans into a subsequent Interest Period of the same duration, subject to the
terms and conditions of this Agreement (including the last sentence of Section
2.02(c) hereof) and to the following:
(i) in the case of a conversion or continuation of fewer
than all the Loans, the aggregate principal amount of Loans
converted or continued shall not be less than $50,000 in the case of
Alternate Base Loans or $500,000 times the number of Lenders on such
date in the case of Eurodollar Loans and shall be an integral
multiple of $100,000;
(ii) accrued interest on a Loan (or portion thereof) being
converted or continued shall be paid by the Borrower at the time of
conversion or continuation;
(iii) if any Eurodollar Loan is converted at any time other
than the end of an Interest Period applicable thereto, the Borrower
shall make such payments associated therewith as are required
pursuant to Sec tion 2.12;
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(iv) any portion of a Revolving Credit Loan which is
subject to an Interest Period ending on a date that is less than one
month prior to the Revolving Credit Termination Date may not be
converted into, or continued as, a Eurodollar Loan and shall be
automatically converted at the end of such Interest Period into an
Alternate Base Loan;
(v) any portion of a Term Eurodollar Loan required to be
paid on any Repayment Date occurring less than one month after the
end of the then current Interest Period applicable to such Loan, may
not be converted into, or continued as, a Term Eurodollar Loan and
shall be automatically converted at the end of such Interest Period
into a Term Alternate Base Loan; and
(vi) no unwaived Default or Event of Default shall have
occurred and be continuing.
The Interest Period applicable to any Eurodollar Loan resulting from
a conversion shall be specified by the Borrower in the irrevocable notice of
conversion delivered pursuant to this Section; provided, however, that if no
such Interest Period shall be specified, the Borrower shall be deemed to have
selected an Interest Period of one month's duration. If the Borrower shall not
have given timely notice to continue any Eurodollar Loan into a subsequent
Interest Period (and shall not otherwise have given notice to convert such
Loan), such Loan (unless repaid or required to be repaid pursuant to the terms
hereof) shall, subject to (iv) and (v) above, automatically be converted into an
Alternate Base Loan. The Agent shall promptly advise the Lenders of any notice
given pursuant to this Section and of each Lender's portion of the continuation
or conversion hereunder.
SECTION 2.03 Notice of Loans. The Borrower shall, through a
Responsible Officer of the Borrower, give the Agent irrevocable written, telex
or facsimile notice (promptly confirmed in writing) of each borrowing
(including, without limitation, a conversion as permitted by Section 2.02(e)
hereof) not later than 11:00 a.m., New York City time, (i) three (3) Business
Days before a proposed Eurodollar Loan borrowing or conversion and (ii) on the
Business Day of an Alternate Base Loan borrowing or conversion (except that no
such confirmation will be required, unless requested by the Agent, to the extent
that the proceeds of such borrowing are requested to be disbursed to the
Borrower's controlled disbursement account maintained with the Agent). Such
notice shall specify (w) whether the Loans then being requested are to be
Alternate Base Loans or Eurodollar Loans, (x) the date of such borrowing (which
shall be a Business Day) and amount thereof and (y) if such Loans are to be
Eurodollar Loans, the Interest Period with respect thereto. If no election as to
the type of Loan is specified in any such notice, all such Loans shall be
Alternate Base Loans. If no Interest Period with respect to any Eurodollar Loan
is specified in any such notice, then an Interest Period of three (3) months'
duration shall be deemed to have been selected. The
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Agent shall promptly advise the Lenders of any notice given pursuant to this
Section 2.03 and of each Lender's portion of the requested borrowing.
SECTION 2.04 Notes; Repayment of Loans. (a) The Term Loan if and
when made by a Lender shall be evidenced by a single Term Note, duly executed on
behalf of the Borrower, dated the date such Loan is made, in substantially the
form of Exhibit A annexed hereto, delivered and payable to such Lender in a
principal amount equal to its Term Loan Commitment on such date.
(b) All Revolving Credit Loans made by a Lender to the Borrower
shall be evidenced by a single Revolving Credit Note, duly executed on behalf of
the Borrower, dated the Closing Date, in substantially the form of Exhibit B
annexed hereto, delivered and payable to such Lender in a principal amount equal
to its Revolving Credit Commitment on such date.
(c) Each Revolving Credit Note shall bear interest from its date on
the outstanding principal balance thereof, as provided in Section 2.05 hereof.
(d) Each Term Note shall bear interest from its date on the
outstanding principal balance thereof, as provided in Section 2.05. All
principal payments in respect of the Term Loan shall be accompanied by accrued
interest on the principal amount being repaid to the date of payment. No
scheduled payment of principal in respect of the Term Loan shall be made to the
extent that a lesser principal payment would result in the payment in full of
the outstanding amount of the Term Loan, and such lesser amount is paid.
(e) Each Lender, or the Agent on its behalf, shall, and is hereby
authorized by the Borrower to, endorse on the schedule attached to a Term Note
or Revolving Credit Note, as applicable, of such Lender (or on a continuation of
such schedule attached to such Note and made a part thereof) an appropriate
notation evidencing the date and amount of each Loan to the Borrower from such
Lender, as well as the date and amount of each payment and prepayment with
respect thereto; provided, however, that the failure of any person to make such
a notation on a Note shall not affect any obligations of the Borrower under such
Note. Any such notation shall be conclusive and binding as to the date and
amount of such Loan or portion thereof, or payment or prepayment of principal or
interest thereon, absent manifest error.
SECTION 2.05 Interest on Loans. (a) Subject to the provisions of
Section 2.05(c) and Section 2.08 hereof, each Alternate Base Loan shall bear
interest at a rate per annum equal to the Alternate Base Rate plus one percent
(1%).
(b) Subject to the provisions of Section 2.05(c) and Section 2.08
hereof, each Eurodollar Loan shall bear interest at a rate per annum equal to
the
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Adjusted LIBO Rate plus two and one-half (2 1/2%).
(c) Interest on each Loan shall be payable in arrears on each
applicable Interest Payment Date and on the Final Maturity Date. Interest on
each Alternate Base Loan and Eurodollar Loan shall be computed based on the
number of days elapsed in a year of 360 days. The Agent shall determine each
interest rate applicable to the Loans and shall promptly advise the Borrower and
the Lenders of the interest rate so determined.
SECTION 2.06 Fees. (a) The Borrower shall pay each Lender, through
the Agent, (i) on the first Business Day of each January, April, July and
October commencing January 2, 1998, (ii) on the date of any reduction of the
Revolving Credit Commitments pursuant to this Agreement including, without
limitation, Section 2.07 hereof and (iii) on the Revolving Credit Termination
Date, in immediately available funds, a commitment fee (the "Revolving Credit
Commitment Fee") of one-half of one percent (1/2 of 1%) per annum on the average
daily unused amount of the Revolving Credit Commitment of such Lender, during
the quarter (or shorter period commencing with the date hereof or ending with
the Revolving Credit Termination Date) ending on such date. The Revolving Credit
Commitment Fee due to each Lender under this Sec tion 2.06 shall commence to
accrue on the date hereof and cease to accrue on the earlier of (i) the
Revolving Credit Termination Date and (ii) the termination of the Revolving
Credit Commitment of such Lender pursuant to this Agreement including, without
limitation, pursuant to Section 2.07 hereof. The Revolving Credit Commitment Fee
shall be calculated on the basis of the actual number of days elapsed in a year
of 360 days.
(b) The Borrower shall pay to the Agent for its own account an
administration fee of $15,000 on January 2, 1998 and each anniversary thereof
prior to the Final Maturity Date.
SECTION 2.07 Termination and Reduction of Revolving Credit
Commitments and Term Loan Commitments. (a) Upon at least three (3) Business
Days' prior irrevocable written notice (or facsimile notice promptly confirmed
in writing) to the Agent, the Borrower may at any time in whole permanently
terminate, or from time to time in part permanently reduce, the Total Revolving
Credit Commitment, ratably among the Lenders in accordance with the amounts of
their Revolving Credit Commitments; provided, however, that the Total Revolving
Credit Commitment shall not be reduced at any time to an amount less than the
Revolving Credit Loans outstanding under the Revolving Credit Commitments and
the Letter of Credit Usage at such time. Each partial reduction of the Total
Revolving Credit Commitment shall be in a minimum of $500,000 or an integral
multiple of $100,000.
(b) Simultaneously with any termination or reduction of the Total
Revolving Credit Commitment pursuant to paragraph (a) of this Section 2.07, the
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Borrower shall pay to each Lender, through the Agent, the Revolving Credit
Commitment Fee due and owing through and including the date of such termination
or reduction on the amount of the Revolving Credit Commitment of such Lender so
terminated or reduced.
SECTION 2.08 Interest on Overdue Amounts; Alternate Rate of
Interest. (a) If the Borrower shall default in the payment of the principal of
or interest on any Loan or any other amount becoming due hereunder, by
acceleration or otherwise, the Borrower shall on demand from time to time pay
interest, to the extent permitted by law, on all Obligations outstanding up to
the date of actual payment of such defaulted amount (after as well as before
judgment) at a rate per annum equal to two percent (2%) in excess of the rates
otherwise applicable thereto.
(b) In the event, and on each occasion, that on the day two (2)
Business Days prior to the commencement of any Interest Period for a Eurodollar
Loan the Agent shall have determined that dollar deposits in the amount of each
Eurodollar Loan are not generally available in the London interbank market, or
that the rate at which dollar deposits are being offered will not reflect
adequately and fairly the cost to any Lender of making or maintaining such
Eurodollar Loan during such Interest Period, or that reasonable means do not
exist for ascertaining the Adjusted LIBO Rate, the Agent shall as soon as
practicable thereafter give written notice (or facsimile notice promptly
confirmed in writing) of such determination to the Borrower and the Lenders, and
any request by the Borrower for the making of a Eurodollar Loan pursuant to Sec
tion 2.03 hereof or conversion or continuation of any Loan into a Eurodollar
Loan pursuant to Section 2.02 hereof shall, until the circumstances giving rise
to such notice no longer exist, be deemed to be a request for an Alternate Base
Loan. Each determination by the Agent made hereunder shall be conclusive absent
manifest error.
SECTION 2.09 Prepayment of Loans. (a) Subject to the terms and
conditions contained in this Section 2.09 and elsewhere in this Agreement, the
Borrower shall have the right to prepay any Loan at any time in whole or from
time to time in part (except in the case of a Eurodollar Loan only on the last
day of an Interest Period) without penalty (except as otherwise provided for
herein); provided, however, that each such partial prepayment of a Loan shall be
in an integral multiple of $100,000.
(b) On the date of any termination or reduction of the Total
Revolving Credit Commitment pursuant to Section 2.07(a) hereof or elsewhere in
this Agreement, the Borrower shall pay or prepay so much of the Revolving Credit
Loans as shall be necessary in order that the Availability equals or exceeds
zero following such termination or reduction. Any prepayments required by this
paragraph (b) shall be applied to outstanding Revolving Credit Alternate Base
Loans up to the full amount thereof before they are applied to outstanding
Revolving Credit Eurodollar Loans; provided, however, that the Borrower shall
not be required to make any prepayment of
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any Eurodollar Loan pursuant to this Section until the last day of the Interest
Period with respect thereto so long as an amount equal to such prepayment is
deposited by the Borrower in a cash collateral account with the Agent to be held
in such account on terms satisfactory to the Agent.
(c) The Borrower shall make prepayments of the Revolving Credit
Loans from time to time such that the Availability equals or exceeds zero at all
times. Any prepayments required by this paragraph (c) shall be applied to
outstanding Revolving Credit Alternate Base Loans up to the full amount thereof
before they are applied to outstanding Revolving Credit Eurodollar Loans;
provided, however, that the Borrower shall not be required to make any
prepayment of any Eurodollar Loan pursuant to this Section until the last day of
the Interest Period with respect thereto so long as an amount equal to such
prepayment is deposited by the Borrower in a cash collateral account with the
Agent to be held in such account on terms satisfactory to the Agent.
(d) Within three days of (i) the sale of any assets subject to Sec
tion 7.05 hereof of any Loan Party aggregating for the Borrower and its
subsidiaries in excess of $25,000 in any Fiscal Year (excluding sales of
inventory in the ordinary course of business, Qualified Sales, sales or other
dispositions of obsolete equipment and the license of trademarks and other
intellectual property for fair value in the ordinary course of business to third
parties, or of the capital stock of the Borrower (subject to Section 7.05
hereof) or sales of any stock of Holdings (other than to members of the Investor
Group where the proceeds are invested in the Borrower), or (ii) the consummation
of the issuance of any debt securities of any Loan Party (other than
Indebtedness permitted under Section 7.03 (except subsection (viii) thereof)),
the Borrower shall make a mandatory prepayment of the Loans in an amount equal
to 100% of the cash proceeds (or non-cash proceeds when converted to cash)
received (net of taxes due and any reasonable expenses of sale), which proceeds
shall be applied as set forth in paragraph (g) below. Nothing contained in this
paragraph (d) shall be or be deemed to be a consent to the sale of any assets or
stock or the issuance of any stock or debt securities.
(e) [intentionally omitted].
(f) (i) Except as provided in clause (ii) below, promptly and in any
event not more than two (2) Business Days following the receipt by the Agent or
the Borrower or any of its subsidiaries of any net cash proceeds of (x) any
casualty insurance required to be maintained pursuant to Section 6.03 hereof on
account of each separate loss, damage or injury (each, a "Casualty Event") in
excess of $500,000 (or, if there shall be continuing a Default or an Event of
Default, of the full amount of net proceeds) to any asset of the Borrower or
such subsidiary (including, without limitation, any Collateral), or (y) any
business interruption insurance required to be maintained pursuant to Section
6.03 hereof on account of any business interruption event (each, a
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"BI Event") in excess of $500,000 (or, if there shall be continuing a Default or
Event of Default, of the full amount of net proceeds), the Borrower or such
subsidiary shall notify the Agent of such receipt in writing or by telephone
promptly confirmed in writing, and not later than two (2) Business Days
following receipt by the Agent or the Borrower or such subsidiary of any such
proceeds, there shall become due and payable a prepayment of the Loans in an
amount equal to 100% of such proceeds. Prepayments from such net proceeds shall
be applied as set forth in paragraph (g) below.
(ii) In the case of the receipt of net cash proceeds described
in clause (i) above with respect to a Casualty Event or BI Event, the Borrower
may elect, by written notice delivered to the Agent not later than the day on
which a prepayment would otherwise be required under clause (i), (x) in the case
of proceeds received with respect to a BI Event, to use such proceeds in the
ordinary course of Borrower's business and (y) in the case of proceeds received
with respect to any Casualty Event, to apply all or a portion of such net
proceeds for the purpose of replacing, repairing, restoring or rebuilding
(referred to herein as a "Rebuilding") the relevant tangible property, and, in
any such event, any required prepayment under clause (i) above shall be reduced
dollar for dollar by the amount of such election under clause (x) or clause (y)
of this sentence. An election under this clause (ii) shall not be effective
unless: (x) at the time of such election there is continuing no Default or Event
of Default; (y) the Borrower shall have certified to the Agent that: (i) the net
proceeds of the insurance adjustment with respect to a Casualty Event, together
with other funds available to the Borrower, shall be sufficient to complete such
proposed Rebuilding in accordance with all applicable laws, regulations and
ordinances; and (ii) no Default or Event of Default has arisen or will arise as
a result of such BI Event, Casualty Event or Rebuilding; and (z) if the amount
of net proceeds in question exceeds $500,000, the Borrower shall have obtained
the written consent of the Required Lenders to such election.
(iii) In the event of an election under clause (ii) above,
pending application of the net proceeds to business operations with respect to a
BI Event or to Rebuilding with respect to a Casualty Event, the Borrower shall
not later than the time at which prepayment would have been, in the absence of
such election, required under clause (i) above, apply such net proceeds to the
prepayment of the outstanding principal balance, if any, of the Revolving Credit
Loans (not in permanent reduction of the Revolving Credit Commitment), and
deposit (the "Special Deposit") with the Agent, the balance, if any, of such net
proceeds remaining after such application, pursuant to agreements in form, scope
and substance reasonably satisfactory to the Agent. The Special Deposit,
together with all earnings on such Special Deposit, shall be available to the
Borrower solely for the applicable Rebuilding or ordinary course business
operations, as the case may be; provided, however, that at such time as a
Default or Event of Default shall occur, the balance of the Special Deposit and
earnings thereon may be applied by the Agent to repay the Obligations in such
order as the Agent shall elect. The Agent shall be entitled to require
reasonable proof, as a condition to the making of any withdrawal from the
Special Deposit, that the proceeds of such
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withdrawal are being applied for the purposes permitted hereunder.
(g) When making a prepayment, whether mandatory or otherwise,
pursuant to paragraph (a), (b), (c), (d) or (f) above, the Borrower shall
furnish to the Agent, not later than 11:00 a.m. (New York City time) (i) three
(3) Business Days (or such shorter period of time as provided in the applicable
paragraph above) prior to the date of such prepayment of Alternate Base Loans
and (ii) five (5) Business Days (or such shorter period of time as provided in
the applicable paragraph above) prior to the date of such prepayment of
Eurodollar Loans, written, telex or facsimile notice (promptly confirmed in
writing) of prepayment which shall specify the prepayment date and the principal
amount of each Loan (or portion thereof) to be prepaid, which notice shall be
irrevocable and shall commit the Borrower to prepay such Loan by the amount
stated therein on the date stated therein. All prepayments shall be accompanied
by accrued interest on the principal amount being prepaid to the date of
prepayment. Prepayments made pursuant to paragraph (d) or (f) above shall be
applied as follows: (A) first, to outstanding Term Alternate Base Loans (applied
to scheduled installments of principal thereof on a pro rata basis) up to the
full amount thereof and then to outstanding Term Eurodollar Loans (applied to
scheduled installments of principal thereof on a pro rata basis) up to the full
amount thereof; and (B) second, to outstanding Revolving Credit Alternate Base
Loans up to the full amount thereof and then to Revolving Credit Eurodollar
Loans up to the full amount thereof; provided, however, that the Borrower shall
not be required to make any prepayment of any Term or Revolving Credit
Eurodollar Loan required pursuant to this Section 2.09(g) until the last day of
the Interest Period with respect thereto so long as an amount equal to such
prepayment is deposited by the Borrower into a cash collateral account with the
Agent to be held in such account pursuant to terms satisfactory to the Agent.
(h) All prepayments under this Section 2.09 shall be subject to Sec
tion 2.12 hereof.
(i) Except as otherwise expressly provided in this Section 2.09,
payments with respect to any paragraph of this Section 2.09 are in addition to
payments made or required to be made under any other paragraph of this Section
2.09.
(j) The amount of the Term Loan prepaid may not be reborrowed.
SECTION 2.10 Reserve Requirements; Change in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
(or in the case of any assignee of any Lender, the date of assignment) any
change in applicable law or regulation or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof (whether or not having the force of
law), or any change in GAAP or regulatory accounting principles applicable to
the Agent or any Lender shall: (i) subject the Agent or any Lender (which shall
for the purpose of this Section 2.10 include any assignee or lending office of
the Agent or any
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Lender) to any charge, fee, deduction or withholding of any kind or to any tax
with respect to any amount paid or to be paid by either the Agent or any Lender
with respect to any Eurodollar Loans made by a Lender to the Borrower or with
respect to the obligations of any Lender under Sections 2.17 through 2.20 hereof
or under any Letter of Credit (other than (x) taxes imposed on the overall net
income of the Agent or such Lender and (y) franchise taxes imposed on the Agent
or such Lender, in either case by the jurisdiction in which such Lender or the
Agent has its principal office or its lending office with respect to such
Eurodollar Loan or any political subdivision or taxing authority of either
thereof); (ii) change the basis of taxation of payments to any Lender or the
Agent of the principal of or interest on any Eurodollar Loan or any other fees
or amounts payable with respect to any Letter of Credit or otherwise hereunder
(other than taxes imposed on the overall net income of such Lender or the Agent
by the jurisdiction in which such Lender or the Agent has its principal office
or by any political subdivision or taxing authority therein); (iii) impose,
modify or deem applicable any reserve, special deposit or similar requirement
against assets of, deposits with or for the account of, or loans or loan
commitments extended by, or Letters of Credit issued and maintained by, such
Lender; or (iv) impose on any Lender or, with respect to Eurodollar Loans, the
London interbank market, any other condition affecting this Agreement, Letters
of Credit issued and maintained by or Eurodollar Loans made by such Lender; and
the result of any of the foregoing shall be to increase the cost to any such
Lender of making or maintaining any Eurodollar Loan or Letter of Credit, or to
reduce the amount of any payment (whether of principal, interest, fee,
compensation or otherwise) receivable by such Lender or to require such Lender
to make any payment in respect of any Eurodollar Loan or Letter of Credit, then
the Borrower shall pay to such Lender or the Agent, as the case may be, upon
such Lender's or the Agent's demand, such additional amount or amounts as will
compensate such Lender or the Agent for such additional costs or reduction. The
Agent and each Lender agree to give notice to the Borrower of any such change in
law, regulation, interpretation or administration with reasonable promptness
after becoming actually aware thereof and of the applicability thereof to the
Transactions. Notwith standing anything contained herein to the contrary,
nothing in clause (i) or (ii) of this Section 2.10(a) shall be deemed to (x)
permit the Agent or any Lender to recover any amount thereunder which would not
be recoverable under Section 2.15 hereof or (y) require the Borrower to make any
payment of any amount to the extent that such payment would duplicate any
payment made by the Borrower pursuant to Section 2.15 hereof.
(b) If at any time and from time to time after the date of this
Agreement, any Lender shall determine that the adoption of any applicable law,
rule, regulation or guideline regarding capital adequacy, or any change in any
applicable law, rule, regulation or guideline regarding capital adequacy,
including, without limitation, the July 1988 report of the Basle Committee on
Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards", or any change in the
interpretation or administration of any thereof by any governmental authority,
central bank or comparable agency charged with the
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interpretation or administration thereof, or compliance by such Lender (or its
lending office) 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, has or will have the effect of reducing the rate of return on
such Lender's capital or on the capital of such Lender's holding company, if
any, 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 such Lender's policies and the policies of such
Lender's holding company with respect to capital adequacy), then from time to
time the Borrower shall pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction. Each Lender agrees to give
notice to the Borrower of any adoption of, change in, or change in
interpretation or administration of, any such law, rule, regulation or guideline
with reasonable promptness after becoming actually aware thereof and of the
applicability thereof to the Transactions.
(c) A statement of any Lender or the Agent setting forth such amount
or amounts, supported by calculations in reasonable detail, as shall be
necessary to compensate such Lender (or the Agent) as specified in paragraphs
(a) and (b) above shall be delivered to the Borrower and shall be conclusive
absent manifest error. The Borrower shall pay each Lender or the Agent the
amount shown as due on any such statement within ten (10) days after its receipt
of the same.
(d) Failure on the part of any Lender or the Agent to demand
compensation for any increased costs, reduction in amounts received or
receivable with respect to any Interest Period or any Letter of Credit or
reduction in the rate of return earned on such Lender's capital, shall not
constitute a waiver of such Lender's or the Agent's rights to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in rate of return in such Interest Period or in any
other Interest Period or with respect to such Letter of Credit. The protection
under this Section 2.10 shall be available to each Lender and the Agent
regardless of any possible contention of the invalidity or inapplicability of
any law, regulation or other condition which shall give rise to any demand by
such Lender or the Agent for compensation.
(e) Any Lender claiming any additional amounts payable pursuant to
this Section 2.10 agrees to use reasonable efforts (consistent with legal and
regulatory restrictions) to designate a different Applicable Lending Office if
the making of such a designation would avoid the need for, or reduce the amount
of, any such additional amounts and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender.
SECTION 2.11 Change in Legality. (a) Notwithstanding anything to the
contrary herein contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation
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thereof shall make it unlawful for any Lender to make or maintain any Eurodollar
Loan or to give effect to its obligations to make Eurodollar Loans as
contemplated hereby, then, by written notice to Borrower and to the Agent, such
Lender may:
(i) declare that Eurodollar Loans will not thereafter be
made by such Lender hereunder, whereupon the Borrower shall be
prohibited from requesting Eurodollar Loans from such Lender
hereunder unless such declaration is subsequently withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by
such Lender be converted to Alternate Base Loans, in which event (A)
all such Eurodollar Loans shall be automatically converted to
Alternate Base Loans as of the effective date of such notice as
provided in paragraph (b) below and (B) all payments of principal
which would otherwise have been applied to repay the converted
Eurodollar Loans shall instead be applied to repay the Alternate
Base Loans resulting from the conversion of such Eurodollar Loans.
(b) For purposes of Section 2.11(a) hereof, a notice to the Borrower
by any Lender shall be effective, if lawful, on the last day of the then current
Interest Period or, if there are then two or more current Interest Periods, on
the last day of each such Interest Period, respectively; otherwise, such notice
shall be effective with respect to the Borrower on the date of receipt by the
Borrower.
SECTION 2.12 Indemnity. The Borrower shall indemnify the Agent and
each Lender against any loss or reasonable expense (including, but not limited
to, any loss or reasonable expense sustained or incurred or to be sustained or
incurred by reason of or in connection with the execution and delivery or
assignment of, or payment under, any Letter of Credit, or in liquidating or
employing deposits from third parties acquired to affect or maintain any Loan or
part thereof as a Eurodollar Loan) which the Agent or such Lender may sustain or
incur as a consequence of the following events (regardless of whether such
events occur as a result of the occurrence of an Event of Default or the
exercise of any right or remedy of the Agent or the Lenders under this Agreement
or any other agreement, or at law): any failure of the Borrower to fulfill on
the date of any Credit Event the applicable conditions set forth in Article V
hereof applicable to it; any failure of the Borrower to borrow hereunder after
irrevocable notice of borrowing pursuant to Section 2.03 hereof has been given;
any payment, prepayment or conversion of a Eurodollar Loan on a date other than
the last day of the relevant Interest Period; any default in payment or
prepayment of the principal amount of any Loan or any part thereof or interest
accrued thereon, or with respect to any Letter of Credit, in each case as and
when due and payable (at the due date thereof, by irrevocable notice of
prepayment or otherwise); or the occurrence of an Event of Default. Such loss or
reasonable expense shall include, without limitation, an amount equal to the
excess, if any, of (i) the amount of interest which would have accrued on
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the principal or other amount so paid, prepaid or converted or not borrowed for
the period from the date of such payment, prepayment or conversion or failure to
borrow to, in the case of a Loan, the last day of the Interest Period for such
Loan (or, in the case of a failure to borrow, the Interest Period for such Loan
which would have commenced on the date of such failure to borrow), at the
applicable rate of interest for such Loan provided for herein over (ii) the
amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in reemploying the funds so paid, prepaid or converted
or not borrowed for such period or Interest Period, as the case may be. Any such
Lender shall provide to the Borrower a statement, signed by an officer of such
Lender, explaining any loss or expense and setting forth, if applicable, the
computation pursuant to the preceding sentence, and such statement shall be
conclusive absent manifest error. The Borrower shall pay such Lender the amount
shown as due on any such statement within ten (10) days after the receipt of the
same. The indemnities contained herein shall survive the expiration or
termination of this Agreement and of the Letters of Credit.
SECTION 2.13 Pro Rata Treatment; Assumption by and Delegation of
Authority to the Agent. (a) Except as permitted under Sections 2.10, 2.11 and
2.15 hereof, each borrowing, each payment or prepayment of principal of the
Notes, each payment of interest on the Notes, each payment of any fee or other
amount payable hereunder and each reduction of the Total Revolving Credit
Commitment and Total Term Loan Commitment shall be made pro rata among the
Lenders in the proportions that their Revolving Credit Commitments bear to the
Total Revolving Credit Commitment or that their Term Loan Commitments bears to
the Total Term Loan Commitment, as the case may be.
(b) Notwithstanding the occurrence or continuance of a Default or
Event of Default or other failure of any condition to the making of Loans or
occurrence of other Credit Events hereunder subsequent to the Credit Events on
the Closing Date, unless the Agent shall have been notified in writing by any
Lender in accordance with the provisions of paragraph (c) below prior to the
date of a proposed Credit Event that such Lender will not make the amount that
would constitute its pro rata share of the applicable Credits on such date
available to the Agent, the Agent may assume that such Lender has made such
amount available to the Agent on such date, and the Agent may, in reliance upon
such assumption, make available to the Borrower a corresponding amount. If such
amount is made available to the Agent on a date after such Credit Event date,
such Lender shall pay to the Agent on demand an amount equal to the product of
(i) the daily average Federal funds rate during such period as quoted by the
Agent, times (ii) the amount of such Lender's pro rata share of such Credits,
times (iii) a fraction the numerator of which is the number of days that elapse
from and including such Credit Event date to the date on which such Lender's pro
rata share of such Credits shall have become immediately available to the Agent
and the denominator of which is 360. A certificate of the Agent submitted to any
Lender with respect to any amounts owing under this subsection shall be
conclusive in the absence
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of manifest error. If such Lender's pro rata share of such Credits is not in
fact made available to the Agent by such Lender within three Business Days of
such Credit Event date, the Agent shall be entitled to recover such amount with
interest thereon at the rate per annum applicable to the Loans hereunder, on
demand, from the Borrower.
(c) Unless and until the Agent shall have received written notice
from the Required Lenders as to the existence of a Default, an Event of Default
or some other circumstance which would relieve the Lenders of their respective
obligations to extend Credits hereunder, which notice shall be in writing and
shall be signed by the Required Lenders and shall expressly state that the
Required Lenders do not intend to make available to the Agent such Lenders'
ratable share of Credits extended after the effective date of such notice, the
Agent shall be entitled to continue to make the assumptions described in Section
2.13(b) above. After receipt of the notice described in the preceding sentence,
which shall become effective on the third Business Day after receipt of such
notice by the Agent (unless otherwise agreed by the Agent), the Agent shall be
entitled to make the assumptions described in Section 2.13(b) above as to any
Credits as to which it has not received a written notice to the contrary prior
to 11:00 a.m. (New York time) on the Business Day next preceding the day on
which such Credits are to be extended. The Agent shall not be required to extent
any Credits as to which it shall have received notice by a Lender of such
Lender's intention not to make its ratable portion of such Credits available to
the Agent. Any withdrawal of authorization as described under this Section
2.13(c) shall not affect the validity of any Credits extended prior to the
effectiveness thereof.
SECTION 2.14 Sharing of Setoffs. Each Lender agrees that if it
shall, through the exercise of a right of banker's lien, setoff or counterclaim
against the Borrower, including, but not limited to, a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, obtain
payment (voluntary or involuntary) in respect of a Note held by it as a result
of which the unpaid principal portion of the Notes held by it shall be
proportionately less than the unpaid principal portion of the Notes held by any
other Lender, it shall be deemed to have simultaneously purchased from such
other Lender a participation in the Notes held by such other Lender, so that the
aggregate unpaid principal amount of the Notes and participations in Notes held
by it shall be in the same proportion to the aggregate unpaid principal amount
of all Notes then outstanding as the principal amount of the Notes held by it
prior to such exercise of banker's lien, setoff or counterclaim was to the
principal amount of all Notes outstanding prior to such exercise of banker's
lien, setoff or counterclaim; provided, however, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.14 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustments restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees
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that any Lender holding a participation in a Note deemed to have been so
purchased may exercise any and all rights of banker's lien, setoff or
counterclaim with respect to any and all moneys owing by the Borrower to such
Lender as fully as if such Lender held a Note in the amount of such
participation.
SECTION 2.15 Taxes. (a) Any and all payments by the Borrower
hereunder shall be made, in accordance with Section 2.16 hereof, free and clear
of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholdings in any such case imposed by the
United States or any political subdivision thereof, excluding:
(i) in the case of the Agent and each Lender, taxes imposed or
based on its net income, and franchise or capital taxes imposed on
it, (A) if the Agent or such Lender is organized under the laws of
the United States or any political subdivision thereof and (B) if
the Agent or such Lender is not organized under the laws of the
United States or any political subdivision thereof, and its
principal office or Applicable Lending Office is located in the
United States, and in the case of both (A) and (B), withholding
taxes payable with respect to payments to the Agent or such Lender
at its principal office or Applicable Lending Office under laws
(including, without limitation, any treaty, ruling, determination or
regula tion) in effect on the date hereof, but not any increase in
withholding tax resulting from any subsequent change in such laws
(other than withholding with respect to taxes imposed or based on
its net income or with respect to franchise or capital taxes), and
(ii) taxes (including withholding taxes) imposed by reason of
the failure of the Agent or any Lender, in either case that is
organized outside the United States, to comply with Section 2.15(f)
hereof (or the inaccuracy at any time of the certificates, documents
and other evidence delivered thereunder)
(all such nonexcluded taxes, levies, imposts, deductions, charges, withholdings
and liabilities being hereinafter referred to as "Taxes"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder to the Lenders or the Agent, (x) the sum payable shall be increased by
the amount necessary so that after making all required deductions (including
without limitation deductions applicable to additional sums payable under this
Section 2.15) such Lender or the Agent (as the case may be) receives an amount
equal to the sum it would have received had no such deductions been made, (y)
the Borrower shall make such deduc tions and (z) the Borrower shall pay the full
amount deducted to the relevant tax authority or other authority in accordance
with applicable law.
(b) In addition, the Borrower agrees to pay any present or future
stamp
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or documentary taxes or any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Agent for the
full amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction (except as specified in clauses (a)(i)
and (ii)) on amounts payable under this Section 2.15) paid by such Lender or the
Agent (as the case may be) and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. This indemnification shall
be made within 30 days from the date such Lender or the Agent (as the case may
be) makes written demand therefor. If any Lender receives a refund in respect of
any Taxes or Other Taxes for which such Lender has received payment from the
Borrower hereunder, such Lender shall promptly notify the Borrower of such
refund and such Lender shall, within 30 days of receipt of a request by the
Borrower, repay such refund to the Borrower, provided that the Borrower, upon
the request of such Lender, agrees to return such refund (plus any penalties,
interest or other charges) to such Lender in the event such Lender is required
to repay such refund.
(d) Within 30 days after the date of any payment of Taxes or Other
Taxes withheld by the Borrower in respect of any payment to any Lender, the
Borrower will furnish to the Agent, at its address referred to in Section 11.01
hereof, such certifi xxxxx, receipts and other documents as may be reasonably
required to evidence payment thereof.
(e) Without prejudice to the survival of any other agreement
hereunder, the agreements and obligations contained in this Section 2.15 shall
survive the payment in full of principal and interest hereunder.
(f) Each Lender that is organized outside of the United States shall
deliver to the Borrower on the date hereof (or, in the case of an assignee, on
the date of the assignment) and from time to time as required for renewal under
applicable law duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 (or any successor or additional forms), as appropriate,
indicating in each case that such Lender is entitled to receive payments under
this Agreement without any deduction or withholding of any United States federal
income taxes. The Agent (if the Agent is an entity organized outside the United
States) and each Lender that is organized outside the United States shall
promptly notify the Borrower and the Agent of any change in its Applicable
Lending Office and upon written request of the Borrower such Lender shall, prior
to the immediately following due date of any payment by the Borrower or any
Guarantor hereunder or under any other Loan Document, deliver to the Borrower or
such Guarantor, as the case may be (with copies to the Agent), such
certificates, documents or other evidence, as required by the Code or Treasury
Regulations issued
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pursuant thereto, including without limitation Internal Revenue Service Form
4224, Form 1001 and any other certificate or statement of exemption required by
Treasury Regulation Section 1.1441-4(a) or Section 1.1441-6(c) or any subsequent
version thereof, properly completed and duly executed by such Lender
establishing that such payment is (i) not subject to withholding under the Code
because such payment is effectively connected with the conduct by such Lender of
a trade or business in the United States or (ii) totally exempt from United
States tax under a provision of an applicable tax treaty. The Borrower shall be
entitled to rely on such forms in their possession until receipt of any revised
or successor form pursuant to this Sec tion 2.15(f). If the Agent or a Lender
fails to provide a certificate, document or other evidence required pursuant to
this Section 2.15(f), then (i) the Borrower shall be entitled to deduct or
withhold on payments to the Agent or such Lender as a result of such failure, as
required by law, and (ii) the Borrower shall not be required to make payments of
additional amounts with respect to such withheld Taxes pursuant to clause (x) of
Section 2.15(a) to the extent such withholding is required solely by reason of
the failure of the Agent or such Lender to provide the necessary certificate,
document or other evidence.
(g) Each Lender and the Agent shall use reasonable efforts to avoid
or minimize any amounts which might otherwise be payable pursuant to this
subsection 2.15 (including seeking refunds of any amounts that are reasonably
believed not to have been correctly or legally asserted); provided, however,
that such efforts shall not include the taking of any actions by such Lender or
the Agent that would result in any tax, costs or other expense to such Lender or
the Agent (other than a tax, cost or other expense for which such Lender or the
Agent shall have been reimbursed or indemnified by the Borrower pursuant to this
Agreement or otherwise) or any action which would or might in the reasonable
opinion of such Lender or the Agent have an adverse effect upon its business,
operations or financial condition or otherwise be disadvantageous to such Lender
or the Agent.
SECTION 2.16 Payments and Computations. (a) The Borrower shall make
each payment hereunder and under any instrument delivered hereunder not later
than 12:00 noon (New York City time) on the day when due in lawful money of the
United States (in freely transferable dollars) to the Agent at its offices at
000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 for the account of the Lenders,
in immediately available funds. The Agent may charge, when due and payable, the
Borrower's account with the Agent for all interest, principal and Commitment
Fees or other fees owing to the Agent or the Lenders on or with respect to this
Agreement and/or the Loans and other Loan Documents. If at any time there is not
sufficient Availability to cover any of the payments referred to in the prior
sentence, and in any event upon the occurrence of any Default, the Borrower
shall make any such payments upon demand.
(b) If the Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
the
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Agent from the Borrower and such related payment is not received by the Agent,
then the Agent will be entitled to recover such amount from such Lender without
setoff, counterclaim or deduction of any kind. If the Agent determines at any
time that any amount received by the Agent under this Agreement must be returned
to the Borrower or paid to any other person pursuant to any solvency law or
otherwise, then, notwithstanding any other term or condition of this Agreement,
the Agent will not be required to distribute any portion thereof to any Lender.
In addition, each Lender will repay to the Agent on demand any portion of such
amount that the Agent has distributed to such Lender, together with interest at
such rate, if any, as the Agent is required to pay to the Borrower or such other
person, without setoff, counterclaim or deduction of any kind.
SECTION 2.17 Issuance of Letters of Credit. Upon the request of the
Borrower, and subject to the conditions set forth in Article V hereof and such
other con ditions to the opening of Letters of Credit as the Agent requires of
its customers generally, the Agent shall from time to time open commercial and
standby letters of credit (each, a "Letter of Credit") for the account of the
Borrower, the aggregate undrawn amount of all outstanding Letters of Credit not
at any time to exceed $500,000; provided, however, that the Borrower may not
request the Agent to open a Letter of Credit if after giving effect thereto
(measured by the face amount of such Letter of Credit) Availability would be
less than zero. The issuance of each Letter of Credit shall be made on at least
three (3) Business Days' prior written notice from the Borrower to the Agent, at
its Domestic Lending Office, which written notice shall be an application for a
Letter of Credit on the Agent's customary form completed to the satisfaction of
the Agent, together with the proposed form of the Letter of Credit (which shall
be satisfactory to the Agent) and such other certificates, documents and other
papers and information as the Agent may reasonably request. The Agent shall not
at any time be obligated to issue any Letter of Credit if such issuance would
conflict with, or cause the Agent or any Lender to exceed any limits imposed by,
any applicable requirements of law. The expiration date of any (i) commercial
Letter of Credit shall not be later than 90 days from the date of issuance
thereof and (ii) any standby Letter of Credit shall not be later than 360 days
from the date of issuance thereof, and, in any event, no Letter of Credit shall
have an expiration date later than the Revolving Credit Termination Date. The
Letters of Credit shall be issued with respect of transactions occurring in the
ordinary course of business of the Borrower.
SECTION 2.18 Payment of Letters of Credit; Reimbursement. Upon the
issuance of any Letter of Credit, the Agent shall notify each Lender of the
principal amount, the number, and the expiration date thereof and the amount of
such Lender's participation therein. By the issuance of a Letter of Credit
hereunder and without further action on the part of the Agent or the Lenders,
each Lender hereby accepts from the Agent a participation (which participation
shall be nonrecourse to the Agent) in such Letter
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of Credit equal to such Lender's pro rata (based on its Revolving Credit
Commitment) share of such Letter of Credit, effective upon the issuance of such
Letter of Credit. Each Lender hereby absolutely and unconditionally assumes, as
primary obligor and not as a surety, and agrees to pay and discharge, and to
indemnify and hold the Agent harmless from liability in respect of, such
Lender's pro rata share of the amount of any drawing under a Letter of Credit.
Each Lender acknowledges and agrees that its obligation to acquire
participations in each Letter of Credit issued by the Agent and its obligation
to make the payments specified herein, and the right of the Agent to receive the
same, in the manner specified herein, are absolute and unconditional and shall
not be affected by any circumstance whatsoever, including, without limitation,
the occurrence and continuance of a Default or an Event of Default hereunder,
and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever. The Agent shall review, on behalf of the
Lenders, each draft and any accompanying documents presented under a Letter of
Credit and shall notify each Lender of any such presentment. Promptly after it
shall have ascertained that any draft and any accompanying documents presented
under such Letter of Credit appear on their face to be in substantial conformity
with the terms and conditions of the Letter of Credit, the Agent shall give
telephonic or facsimile notice to the Lenders and the Borrower of the receipt
and amount of such draft and the date on which payment thereon will be made, and
the Lenders shall, by 11:00 a.m., New York City time on the date such payment is
to be made, pay the amounts required to the Agent in New York, New York in
immediately available funds, and the Agent, not later than 3:00 p.m. on such
day, shall make the appropriate payment to the beneficiary of such Letter of
Credit. If in accordance with the prior sentence the Lenders shall pay any draft
presented under a Letter of Credit, then the Agent, on behalf of the Lenders,
shall charge the general deposit account of the Borrower with the Agent for the
amount thereof, together with the Agent's customary overdraft fee in the event
the funds available in such account shall not be sufficient to reimburse the
Lenders for such payment and the Borrower shall not otherwise have discharged
such reimbursement obligation by 11:00 a.m., New York City time, on the date of
such payment. If the Lenders have not been reimbursed with respect to such
drawing as provided above, the Borrower shall pay to the Agent, for the account
of the Lenders, the amount of the drawing together with interest on such amount
at a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the Alternate Base Rate plus two percent (2%),
payable on demand. The obligations of the Borrower under this Section 2.18 to
reimburse the Lenders and the Agent for all drawings under Letters of Credit
shall be joint and several, absolute, unconditional and irrevocable and shall be
satisfied strictly in accordance with their terms, irrespective of:
(a) any lack of validity or enforceability of any Letter of Credit;
(b) the existence of any claim, setoff, defense or other right which
the Borrower or any other person may at any time have against the
beneficiary under any Letter of Credit, the Agent or any Lender (other
than the defense of payment in accordance with the terms of this Agreement
or a defense based on the gross negligence or willful misconduct of the
Agent or any Lender) or any
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other person in connection with this Agreement or any other transaction;
(c) any draft or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect;
(d) payment by the Agent or any Lender under any Letter of Credit
against presentation of a draft or other document which does not comply
with the terms of such Letter of Credit; and
(e) any other circumstance or event whatsoever, whether or not
similar to any of the foregoing.
It is understood that in making any payment under any Letter of
Credit (x) the Agent's and any Lender's exclusive reliance on the documents
presented to it under such Letter of Credit as to any and all matters set forth
therein, including, without limitation, reliance on the amount of any draft
presented under such Letter of Credit, whether or not the amount due to the
beneficiary equals the amount of such draft and whether or not any document
presented pursuant to such Letter of Credit proves to be insufficient in any
respect, if such document on its face appears to be in order, and whether or not
any other statement or any other document presented pursuant to such Letter of
Credit proves to be forged or invalid or any statement therein proves to be
inaccurate or untrue in any respect whatsoever and (y) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, not be deemed willful misconduct or gross
negligence of the Agent or any Lender.
SECTION 2.19 Agent's Actions with respect to Letters of Credit. Any
Letter of Credit may, in the discretion of the Agent or its correspondents, be
interpreted by them (to the extent not inconsistent with such Letter of Credit)
in accordance with the Uniform Customs and Practice for Documentary Credits of
the International Chamber of Commerce, as adopted or amended from time to time,
or any other rules, regulations and customs prevailing at the place where any
Letter of Credit is available or the drafts are drawn or negotiated. The Agent
and its correspondents may accept and act upon the name, signature, or act of
any party purporting to be the executor, administrator, receiver, trustee in
bankruptcy, or other legal representative of any party designated in any Letter
of Credit in the place of the name, signature, or act of such party.
SECTION 2.20 Letter of Credit Fees. The Borrower agrees to pay to
the Agent (a) with respect to each commercial Letter of Credit, (i) for the
ratable benefit of the Lenders, a letter of credit fee equal to two and one-half
percent (2 1/2%) of the face amount thereof per annum payable to the Agent at
its Domestic Lending Office quarterly in advance in immediately available funds,
plus (ii) an issuance fee charged by the Agent for transactions of this nature
and, if applicable, an amendment fee, in
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each case payable to the Agent for its own account at its Domestic Lending
Office on the date of issuance or amendment, as applicable, of such Letter of
Credit in immediately available funds in accordance with Schedule 2.20 hereto
and (b) with respect to standby Letters of Credit, (i) for the ratable benefit
of the Lenders, a letter of credit fee equal to two and one-half percent (2
1/2%) of the face amount thereof per annum payable to the Agent at its Domestic
Lending Office quarterly in advance in immediately available funds, plus (ii) an
issuance fee charged by the Agent for transactions of this nature and, if
applicable, an amendment fee, in each case payable to the Agent for its own
account at its Domestic Lending Office on the date of issuance or amendment, as
applicable, of such Letter of Credit in immediately available funds in
accordance with Schedule 2.20 hereto. The Agent shall disburse to each Lender
such Lender's pro rata share of any payment of the Letter of Credit fees
referred to in clauses (a)(i) and (b)(i) of the first sentence of this paragraph
in immediately available funds within two (2) Business Days of the Agent's
receipt of such payment.
III. COLLATERAL SECURITY
SECTION 3.01 Security Documents. The Obligations shall be secured by
the Collateral described in the Security Documents and are entitled to the
benefits thereof. The Borrower shall duly execute and deliver the Security
Documents, all consents of third parties necessary to permit the effective
granting of the Liens created in such agreements, financing statements pursuant
to the Uniform Commercial Code and other documents, all in form and substance
satisfactory to the Agent, as may be reasonably required by the Agent to grant
to the Lenders a valid, perfected and enforceable first priority Lien on and
security interest in (subject only to the Liens permitted under Section 7.01
hereof) the Collateral, except to the extent permitted by the Security
Documents.
SECTION 3.02 Filing and Recording. The Borrower shall, at its sole
cost and expense, cause all instruments and documents given as evidence of
security pursuant to this Agreement to be duly recorded and/or filed or
otherwise perfected in all places necessary, in the opinion of the Agent, and
take such other actions as the Agent may reasonably request, in order to perfect
and protect the Liens of the Agent and Lenders in the Collateral. The Borrower,
to the extent permitted by law, hereby authorizes the Agent to file any
financing statement in respect of any Lien created pursuant to the Security
Documents which may at any time be required or which, in the opinion of the
Agent, may at any time be desirable although the same may have been executed
only by the Agent or, at the option of the Agent, to sign such financing
statement on behalf of the Borrower and file the same, and the Borrower hereby
irrevocably designates the Agent, its agents, representatives and designees as
its agent and attorney-in-fact for this purpose. In the event that any
re-recording or refiling thereof (or the filing of any statements of
continuation or assignment of any financing statement) is required to protect
and preserve such Lien, the Borrower shall, at the Borrower's cost and expense,
cause the same to be recorded and/or refiled at the time
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and in the manner requested by the Agent.
IV. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that
both before and after giving effect to the consummation of the Transactions
(including, without limitation, under the Acquisition Documents):
SECTION 4.01 Organization, Legal Existence. The Borrower and each of
its subsidiaries are legal entities duly organized, validly existing and in good
standing under the laws of the jurisdiction of their respective organization,
have the requisite power and authority to own their property and assets and to
carry on their business as now conducted and as currently proposed to be
conducted and are qualified to do business in every jurisdiction where such
qualification is required, except where the failure to so qualify would not have
a Material Adverse Effect (all such jurisdictions being listed in Schedule 4.01
annexed hereto). The Borrower has the corporate power to execute, deliver and
perform its obligations under this Agreement and the other Loan Documents to
which it is a party, and to borrow hereunder and to execute and deliver the
Notes.
SECTION 4.02 Authorization. The execution, delivery and performance
by the Borrower of this Agreement and each of the other Loan Documents to which
it is a party, the borrowings hereunder by the Borrower, the execution and
delivery by the Borrower of the Notes, the grant of security interests in the
Collateral created by the Security Documents and the transactions contemplated
to occur under or in connection with the Acquisition Documents (collectively,
the "Transactions") (a) have been duly authorized by all requisite corporate
and, if required, stockholder action and (b) will not (i) violate (A) any
provision of law, statute, rule or regulation or the certificate or articles of
incorporation or other applicable constitutive documents or the by-laws of the
Borrower, or its subsidiaries, as the case may be, (B) any order of any court,
or any rule, regulation or order of any other agency of government binding upon
the Borrower, or its subsidiaries, or (C) any provisions of any material
indenture, agreement or other instrument to which the Borrower, or its
subsidiaries, or any of their respective properties or assets are or may be
bound (which violation would not have a Material Adverse Effect), (ii) be in
conflict with, result in a breach of or constitute (alone or with notice or
lapse of time or both) a default under any material indenture, agreement or
other instrument referred to in (b)(i)(C) above (which conflict, breach or
default would have a Material Adverse Effect) or (iii) result in the creation or
imposition of any Lien of any nature whatsoever (other than in favor of the
Agent, for its own benefit and for the benefit of the Lenders, as contemplated
by this Agreement and the Security Documents) upon any property or assets of the
Borrower, or its subsidiaries.
SECTION 4.03 Governmental Approvals. No registration or filing
(other than the filings necessary to perfect the Liens created by the Security
Documents) with
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consent or approval of, or other action by, any Federal, state or other
governmental agency, authority or regulatory body is or will be required in
connection with the Transactions, other than any which have been made or
obtained or will be made or obtained.
SECTION 4.04 Binding Effect. This Agreement and each of the other
Loan Documents to which it is a party constitutes, and each of the Notes when
duly executed and delivered will constitute, a legal, valid and binding
obligation of the Borrower enforceable in accordance with its terms, subject to
the effect of any applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting creditors' rights generally and the application of
general principles of equity.
SECTION 4.05 Material Adverse Change. Except as set forth in
Schedule 4.05 annexed hereto, there has been no material adverse change in the
business, assets, operations or financial condition of the Borrower or any of
its subsidiaries since December 31, 1996 or with respect to the Crispaire
Corporation since October 31, 1996.
SECTION 4.06 Litigation; Compliance with Laws; etc. (a) Except as
set forth in Schedule 4.06(a) annexed hereto, there are not any actions, suits
or proceedings at law or in equity or by or before any governmental
instrumentality or other agency or regulatory authority now pending or, to the
knowledge of any Responsible Officer of the Borrower, threatened against or
affecting the Borrower or any of its subsidiaries or the businesses, assets or
rights of the Borrower or any of its subsidiaries (i) which involve any of the
Transactions or (ii) as to which it is probable (within the meaning of Statement
of Financial Accounting Standards No. 5) that there will be an adverse
determination and which, if adversely determined, would, individually or in the
aggregate, materially impair the ability of the Borrower to conduct business
substantially as now conducted, or have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.06(b) annexed hereto, neither
the Borrower nor any of its subsidiaries is in violation of any law, or in
default with respect to any judgment, writ, injunction, decree, rule or
regulation of any court or governmental agency or instrumentality, except where
such non-compliance, either individually or in the aggregate, would not have a
Material Adverse Effect.
SECTION 4.07 Financial Statements. (a) The Borrower has heretofore
furnished to the Agent Consolidated balance sheets and statements of income and
cash flows of Crispaire Corporation and its subsidiaries dated as of October 31,
1996 (audited by and accompanied by the opinion of independent public
accountants) and July 31, 1997 (unaudited for the nine-month period ended on
such date). Such balance sheets and statements of income and cash flows present
fairly the Consolidated financial condition and results of operations of
Crispaire Corporation and its subsidiaries as of the dates and for the periods
indicated, and such balance sheets and
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the notes thereto disclose all material liabilities, direct or contingent, of
Crispaire Corporation and its subsidiaries, as of the dates thereof.
(b) The Borrower has heretofore furnished to the Agent projected
income statements, balance sheets and cash flows of the Borrower on a
Consolidated basis on a quarterly basis for the 12 month period ending September
30, 1997 and on an annual basis thereafter through the Final Maturity Date,
together with a schedule confirming the ability of the Borrower to consummate
the Transactions and demonstrating prospective compliance with all financial
covenants contained in this Agreement, such projections disclosing all
assumptions made by the Borrower in formulating such projections and giving
effect to the Transactions. The projections are based upon reasonable estimates
and assumptions, all of which are reasonable in light of the conditions which
existed at the time the projections were made, have been prepared on the basis
of the assumptions stated therein, and reflect as of the Closing Date the
reasonable estimate of the Borrower of the results of operations and other
information projected therein.
(c) The Borrower has heretofore furnished to the Agent a
Consolidated pro forma balance sheet of the Borrower and which sets forth
information before and after giving effect to the Transactions.
(d) The financial statements referred to in this Section 4.07 have
been prepared in accordance with GAAP.
SECTION 4.08 Federal Reserve Regulations. (a) Neither the Borrower
nor any of its subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of the Loans will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, (i)
to purchase or carry Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock or to refund indebtedness originally
incurred for such purpose, or (ii) for any purpose which entails a violation of,
or which is inconsistent with, the provisions of the Regulations of the Board,
including, without limitation, Regulation G, T, U or X thereof. If requested by
any Lender, the Borrower or any of its subsidiaries shall furnish to such Lender
a statement on Federal Reserve Form U-1 referred to in said Regulation .
SECTION 4.09 Taxes. The Borrower and each of its subsidiaries have
filed or caused to be filed all Federal, state, local and foreign tax returns
which are required to be filed by them, on or prior to the date hereof, other
than tax returns in respect of taxes that (x) are not franchise, capital or
income taxes, (y) in the aggregate are not material and (z) would not, if
unpaid, result in the imposition of any material Lien on any property or assets
of the Borrower or any its subsidiaries. The Borrower and its
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subsidiaries have paid or caused to be paid all taxes shown to be due and
payable on such filed returns or on any assessments received by them, other than
(i) any taxes or assessments the validity of which the Borrower or such
subsidiary is contesting in good faith by appropriate proceedings, and with
respect to which the Borrower or such subsidiary shall, to the extent required
by GAAP have set aside on its books adequate reserves and (ii) taxes other than
income, capital or franchise taxes that in the aggregate are not material and
which would not, if unpaid, result in the imposition of any material Lien on any
property or assets of the Borrower or any of its subsidiaries. No Federal income
tax returns of the Borrower or any of its subsidiaries have been audited by the
United States Internal Revenue Service and neither the Borrower nor any of its
subsidiaries has as of the date hereof requested or been granted any extension
of time to file any Federal, state, local or foreign tax return.
SECTION 4.10 Employee Benefit Plans. With respect to the provisions
of ERISA:
(i) No Reportable Event has occurred or is continuing with respect
to any Pension Plan.
(ii) No prohibited transaction (within the meaning of Section 406 of
ERISA or Section 4975 of the Code) has occurred with respect to any Plan subject
to Part 4 of Subtitle B of Title I of ERISA.
(iii) Neither the Borrower nor any ERISA Affiliate is now, or has
been during the preceding five years, obligated to contribute to a Pension Plan
or a Multiemployer Plan. Neither the Borrower nor any ERISA Affiliate has (A)
ceased operations at a facility so as to become subject to the provisions of
Section 4062(e) of ERISA, (B) withdrawn as a substantial employer so as to
become subject to the provisions of Section 4063 of ERISA, (C) ceased making
contributions to any Pension Plan subject to the provisions of Section 4064(a)
of ERISA to which the Borrower, any subsidiary of the Borrower or any ERISA
Affiliate made contributions, (D) incurred or caused to occur a "complete
withdrawal" (within the meaning of Section 4203 of ERISA) or a "partial
withdrawal" (within the meaning of Section 4205 of ERISA) from a Multiemployer
Plan that is a Pension Plan so as to incur withdrawal liability under Sec tion
4201 of ERISA (without regard to subsequent reduction or waiver of such
liability under Section 4207 or 4208 of ERISA), or (E) been a party to any
transaction or agreement under which the provisions of Section 4204 of ERISA
were applicable.
(iv) No notice of intent to terminate a Pension Plan has been filed,
nor has any Plan been terminated pursuant to the provisions of Section 4041(e)
of ERISA.
(v) The PBGC has not instituted proceedings to terminate (or
appoint a trustee to administer) a Pension Plan and no event has occurred or
condition exists which might constitute grounds under the provisions of Section
4042 of ERISA for the
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termination of (or the appointment of a trustee to administer) any such Plan.
(vi) With respect to each Pension Plan that is subject to the
provisions of Title I, Subtitle B, Part 3 of ERISA, the funding method used in
connection with such Plan is acceptable under ERISA, and the actuarial
assumptions and methods used in connection with funding such Pension Plan
satisfy the requirements of Section 302 of ERISA. The assets of each such
Pension Plan (other than the Multiemployer Plans) are at least equal to the
present value of the greater of (i) accrued benefits (both vested and
non-vested) under such Plan, or (ii) "benefit liabilities" (within the meaning
of Sec tion 4001(a)(16) of ERISA) under such Plan, in each case as of the latest
actuarial valuation date for such Plan (determined in accordance with the same
actuarial assumptions and methods as those used by the Plan's actuary in its
valuation of such Plan as of such valuation date). No such Pension Plan has
incurred any "accumulated funding deficiency" (as defined in Section 412 of the
Code), whether or not waived.
(vii) There are no actions, suits or claims pending (other than
routine claims for benefits) or, to the knowledge of the Borrower or any ERISA
Affiliate, which could reasonably be expected to be asserted, against any Plan
or the assets of any such Plan. No civil or criminal action brought pursuant to
the provisions of Title I, Subtitle B, Part 5 of ERISA is pending or threatened
against any fiduciary or any Plan. None of the Plans or any fiduciary thereof
(in its capacity as such) has been the direct or indirect subject of any audit,
investigation or examination by any governmental or quasi-governmental agency.
(viii) All of the Plans comply in all material respects currently,
and have complied in the past, both as to form and operation, with their terms
and with the provisions of ERISA and the Code, and all other applicable laws,
rules and regulations; all necessary governmental approvals for the Plans have
been obtained and a favorable determination as to the qualification under
Section 401(a) of the Code of each of the Plans which is an employee pension
benefit plan (within the meaning of Sec tion 3(2) of ERISA) has been made by the
Internal Revenue Service and a recognition of exemption from federal income
taxation under Section 501(c) of the Code of each of the funded employee welfare
benefit plans (within the meaning of Section 3(1) of ERISA) has been made by the
Internal Revenue Service, and nothing has occurred since the date of each such
determination or recognition letter that would adversely affect such
qualification.
SECTION 4.11 No Material Misstatements. No information, report,
financial statement, exhibit or schedule prepared or furnished by or on behalf
of the Borrower to the Agent or any Lender in connection with any of the
Transactions or this Agreement, the Security Documents, the Notes or any other
Loan Documents or included therein contained or contains any material
misstatement of fact or omitted or omits to state any material fact known to the
Borrower necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
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SECTION 4.12 Investment Company Act; Public Utility Holding Company
Act. Neither the Borrower nor any of its subsidiaries is an "investment company"
as defined in, or is otherwise subject to regulation under, the Investment
Company Act of 1940. Neither the Borrower nor any of its subsidiaries is a
"holding company" as that term is defined in or is otherwise subject to
regulation under, the Public Utility Holding Company Act of 1935.
SECTION 4.13 Security Interest. Each of the Security Documents
creates and grants to the Agent, for its own benefit and for the benefit of the
Lenders, a security interest in the Collateral identified therein and, upon the
due filing of the financing statements, the due filing and recording of
assignments for security in the United States Patent and Trademark Office, the
Canadian Patent Office and the Canadian Trademarks Office and the delivery to
the Agent of the Pledged Stock, will grant to the Agent, for its own benefit and
for the benefit of the Lenders, a legal, valid and perfected first (except as
permitted pursuant to Section 7.01 hereof) priority security interest in the
collateral identified therein, except to the extent permitted by such Security
Documents. Such collateral or property is not subject to any other Liens
whatsoever, except Liens permitted by Section 7.01 hereof and except where
releases of such Liens have been delivered to the Agent.
SECTION 4.14 Use of Proceeds.
All proceeds of each borrowing under the Revolving Credit Commitment
shall be used to provide for working capital and general corporate purposes of
the Borrower.
SECTION 4.15 Subsidiaries. As of the Closing Date, Schedule 4.15
annexed hereto sets forth each subsidiary of the Borrower, its jurisdiction of
incorporation, its capitalization and ownership of capital stock of each such
subsidiary.
SECTION 4.16 Title to Properties; Possession Under Leases;
Trademarks. (a) The Borrower and each of its subsidiaries have good and
marketable title to, or valid leasehold interest in, all of their respective
properties and assets shown on the most recent balance sheet referred to in
Section 4.07(a) hereof and all assets and properties acquired since the date of
such balance sheet, except for such properties as are no longer used or useful
in the conduct of its business or as have been disposed of in the ordinary
course of business, and except as set forth on Schedule 4.16(a) annexed hereto
and for minor defects in title, which scheduled defects do not interfere with
the ability of the Borrower or any of its subsidiaries to conduct its business
as now conducted. All such assets and properties are free and clear of all Liens
other than those permitted by Section 7.01 or as described on Schedule 4.16(b)
hereto.
(b) The Borrower and each of its subsidiaries have complied with all
material obligations under all leases to which they are a party and under which
they are
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in occupancy, and all such leases are in full force and effect and the Borrower
and each of its subsidiaries enjoy peaceful and undisturbed possession under all
such leases.
(c) The Borrower and each of its subsidiaries own or have a valid
license to use all material trademarks, trademark rights, trade names, trade
name rights, copyrights, patents and patent rights which are necessary for the
conduct of the business of the Borrower and each of its subsidiaries. Neither
the Borrower nor any of its subsidiaries is infringing upon or otherwise acting
adversely to any of such trademarks, trademark rights, trade names, trade name
rights, copyrights, patent rights or licenses owned by any other person or
persons, which infringements or actions could reasonably be expected to have a
Material Adverse Effect. Except as set forth in Schedule 4.16(c) annexed hereto,
there is no claim or action by any such other person pending, or to the
knowledge of any Responsible Officer of the Borrower or any subsidiary thereof,
threatened, against the Borrower or any of its subsidiaries with respect to any
of the rights or property referred to in this Section 4.16(c).
SECTION 4.17 Solvency. (a) The fair salable value of the assets of
the Borrower and its Consolidated subsidiaries is not less than the amount that
will be required to be paid on or in respect of the probable liability on the
existing debts and other liabilities (including contingent liabilities) of the
Borrower and its Consolidated subsidiaries, as they become absolute and mature.
(b) The assets of the Borrower and its Consolidated subsidiaries do
not constitute unreasonably small capital for the Borrower and its Consolidated
subsidiaries to carry out their business as now conducted and as proposed to be
conducted including the capital needs of the Borrower and its Consolidated
subsidiaries, taking into account the particular capital requirements of the
business conducted by the Borrower and its Consolidated subsidiaries and
projected capital requirements and capital availability thereof.
(c) Neither the Borrower nor any of its subsidiaries intends to
incur debts beyond its ability to pay such debts as they mature (taking into
account the timing and amounts of cash to be received by the Borrower and any of
its subsidiaries, and of amounts to be payable on or in respect of debt of the
Borrower and any of its subsidiaries). The cash flow of the Borrower and its
Consolidated subsidiaries, after taking into account all anticipated uses of the
cash of the Borrower and its Consolidated subsidiaries, will at all times be
sufficient to pay all such amounts on or in respect of debt of the Borrower and
its Consolidated subsidiaries when such amounts are required to be paid.
(d) Neither the Borrower nor any of its subsidiaries believes that
final judgments against them in actions for money damages presently pending will
be rendered at a time when, or in an amount such that, they will be unable to
satisfy any such judgments promptly in accordance with their terms (taking into
account the
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maximum reasonable amount of such judgments in any such actions and the earliest
reasonable time at which such judgments might be rendered). The cash flow of the
Borrower and its Consolidated subsidiaries, after taking into account all other
anticipated uses of the cash of the Borrower and its Consolidated subsidiaries
(including the payments on or in respect of debt referred to in paragraph (c) of
this Section), will at all times be sufficient to pay all such judgments
promptly in accordance with their terms.
SECTION 4.18 Permits, etc. The Borrower and each of its subsidiaries
possess all licenses, permits, approvals and consents, including, without
limitation, all environmental, health and safety licenses, permits, approvals
and consents (collectively, "Permits") of all Federal, state and local
governmental authorities as required to conduct properly their business, except
for those the absence of which could not reasonably be expect to have a Material
Adverse Effect; each such Permit is and will be in full force and effect, the
Borrower and each of its subsidiaries are in compliance in all material respects
with all such Permits, and no event (including, without limitation, any
violation of any law, rule or regulation) has occurred which would reasonably be
expected to result in the revocation or termination of any such Permit or any
restriction thereon.
SECTION 4.19 Compliance with Environmental Laws. Except as disclosed
in Schedule 4.19 hereto: (i) the operations of the Borrower and its subsidiaries
comply with all applicable Environmental Laws, except as such would not
reasonably be likely to result in liability, either individually or in the
aggregate, to the Borrower or any subsidiary thereof in excess of $100,000; (ii)
the Borrower and its subsidiaries and all of their present facilities or
operations, as well as to the knowledge of the Borrower and its subsidiaries
their past facilities or operations, are not subject to any judicial proceeding
or administrative proceeding or any outstanding written order or agreement with
any governmental authority or private party respecting (a) any Environmental
Law, (b) any Remedial Work, or (c) any Environmental Claims arising from the
Release of a Hazardous Material into the environment; (iii) to the best of the
knowledge of the Borrower and its subsidiaries, none of their operations is the
subject of any Federal or state investigation evaluating whether any Remedial
Work is needed to respond to a Release of any Hazardous Material into the
environment in violation of any Environmental Law; (iv) neither the Borrower nor
to the best knowledge of the Borrower, any of its subsidiaries nor any
predecessor of the Borrower or any of its subsidiaries has filed any notice
under any Environmental Law indicating past or present treatment, storage, or
disposal of a Hazardous Material or reporting a spill or Release of a Hazardous
Material into the environment; (v) to the best of the knowledge of the Borrower
and its subsidiaries, neither the Borrower nor any of its subsidiaries has any
contingent liability in connection with any Release of any Hazardous Material
into the environment, except as such would not reasonably be likely to result in
liability, either individually or in the aggregate, to the Borrower or any
subsidiary thereof in excess of $100,000; (vi) none of the operations of the
Borrower or any of its subsidiaries involves
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the generation, transportation, treatment or disposal of Hazardous Materials;
(vii) neither the Borrower nor any of its subsidiaries has disposed of any
Hazardous Material by placing it in or on the ground or waters of any premises
owned, leased or used by any of them and to the knowledge of the Borrower and
its subsidiaries neither has any lessee, prior owner, or other person, except as
such would not reasonably be likely to result in liability, either individually
or in the aggregate, to the Borrower or any subsidiary thereof in excess of
$100,000; (viii) no underground storage tanks or surface impoundments are on any
property of the Borrower and its subsidiaries; and (ix) no Lien in favor of any
governmental authority for (A) any liability under any Environmental Law or
regulation, or (B) damages arising from or costs incurred by such governmental
authority in response to a Release of a Hazardous Material into the environment,
has been filed or attached to the property of the Borrower and its subsidiaries.
SECTION 4.20 No Change in Credit Criteria or Collection Policies.
There has been no material change in credit criteria or collection policies
concerning account receivables of the Borrower since December 31, 1995. Without
duplication, all Eligible Receivables at the time of their classification as an
Eligible Receivable) of the Borrower are valid, binding and enforceable
obligations of account debtors and are not subject to any claims, defenses or
setoffs, subject to applicable laws of bankruptcy, insolvency and similar laws
affecting creditors' rights generally.
SECTION 4.21 Acquisition. (a)(i) The execution, delivery and
performance by the Borrower and Holdings of the Acquisition Documents have been
duly authorized by all necessary corporate action on the part of the Borrower
and Holdings, (ii) the Acquisition Documents constitute the valid, binding and
enforceable obligation of each such party thereto, subject to the effect of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally, and are in full force and effect without
default or waiver of any of the conditions thereunder and (iii) there are no
governmental consents, filings, approvals or notices required to be made or
obtained in connection with the execution, delivery and performance of the
Acquisition Documents except such as have been duly made, obtained or delivered
or will be obtained, made or delivered.
(b) To the best of Borrower's knowledge, each of the representations
and warranties made by the sellers in the Acquisition Documents is true and
correct in all material respects.
SECTION 4.22 Bank Accounts. Schedule 4.22 hereto sets forth as of
the Closing Date a list of all of the Borrower's bank accounts.
V. CONDITIONS OF CREDIT EVENTS
The obligation of each Lender to make Loans and extend other Credits
hereunder shall be subject to the following conditions precedent:
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SECTION 5.01 All Credit Events. On each date on which a Credit Event
is to occur:
(a) The Agent shall have received a notice of borrowing as required
by Section 2.03 hereof or a request for the issuance of a Letter of Credit
pursuant to Section 2.17 hereof.
(b) The representations and warranties set forth in Article IV
hereof and in any documents delivered herewith, including, without
limitation, the Loan Documents, shall be true and correct in all material
respects with the same effect as though made on and as of such date
(except insofar as such representations and warranties relate expressly to
an earlier date).
(c) The Borrower shall be in compliance with all the terms and
provisions contained herein on its part to be observed or performed, and
at the time of and immediately after such Credit Event no Default or Event
of Default shall have occurred and be continuing.
(d) The Agent shall have received a certificate signed by the
Financial Officer of the Borrower (i) as to the compliance with (b) and
(c) above and (ii) with respect to each Revolving Credit Loan and each
Letter of Credit, demonstrating that after giving effect thereto
Availability is zero or greater.
SECTION 5.02 First Borrowing. The obligations of the Lenders in
respect of the first Credit Event hereunder is subject to the following
additional conditions precedent:
(a) The Lenders shall have received the favorable written opinion of
counsel for the Borrower and each of the Guarantors and Grantors,
substantially in the form of Exhibit C hereto, dated the Closing Date,
addressed to the Lenders and satisfactory to the Agent.
(b) The Lenders shall have received (i) a copy of the certificate or
articles of incorporation or constitutive documents, in each case as
amended to date, of each of the Borrower, the Grantors and the Guarantors,
certified as of a recent date by the Secretary of State or other
appropriate official of the state of its organization, and a certificate
as to the good standing of each from such Secretary of State or other
official, in each case dated as of a recent date; (ii) a certificate of
the Secretary of each of the Borrower, Grantor and Guarantor, dated the
Closing Date and certifying (A) that attached thereto is a true and
complete copy of such person's By-laws as in effect on the date of such
certificate and at all times since a date prior to the date of the
resolution described in item (B) below, (B) that attached thereto is a
true and complete copy of a resolution adopted by such person's Board of
Directors authorizing the
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execution, delivery and performance of this Agreement, the Security
Documents, the Notes, the other Loan Documents and the Credit Events
hereunder, as applicable, and that such resolution has not been modified,
rescinded or amended and is in full force and effect, (C) that such
person's certificate or articles of incorporation or constitutive
documents has not been amended since the date of the last amendment
thereto shown on the certificate of good standing furnished pursuant to
(i) above, and (D) as to the incumbency and specimen signature of each of
such person's officers executing this Agreement, the Notes, each Security
Document or any other Loan Document delivered in connection herewith or
therewith, as applicable; (iii) a certificate of another of such person's
officers as to incumbency and signature of its Secretary; and (iv) such
other documents as the Agent or any Lender may reasonably request.
(c) The Agent shall have received a certificate, dated the Closing
Date and signed by the Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (b) and
(c) of Section 5.01 hereof and the conditions set forth in this Section
5.02.
(d) Each Lender shall have received its Revolving Credit Note (which
Notes shall replace the Revolving Credit Notes issued in connection with
the Original Credit Agreement, such replaced Notes, together with the Term
Notes issued in connection with the Original Credit Agreement, to be
returned to the Borrower by the Lenders holding same, marked "cancelled"
promptly after the Closing Date), each duly executed by the Borrower,
payable to its order and otherwise complying with the provisions of
Section 2.04 hereof.
(e) The Agent shall have received (x) such amendments or
confirmations (as requested by the Agent) of the Security Documents
existing as of the Closing Date, and (y) such additional Security
Documents (as requested by the Agent, including, but not limited to, an
Assignment of Contract relating to the Acquisition Documents) to be
executed and delivered in connection with the Transactions, each duly
executed by the applicable Grantors.
(f) Each document (including, without limitation, each Uniform
Commercial Code financing statement) required by law or reasonably
requested by the Agent to be filed, registered or recorded in order to
create in favor of the Agent for its own benefit and for the benefit of
the Lenders a first priority perfected security interest in the Collateral
acquired pursuant to the Acquisition, except to the extent permitted by
the Security Documents, shall have been properly filed, registered or
recorded in each jurisdiction in which the filing, registration or
recordation thereof is so required or requested. The Agent shall have
received an acknowledgment copy, or other evidence satisfactory to it, of
each such filing, registration or recordation.
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(g) The Agent shall have received the results of a search of tax and
other Liens, and judgments and of the Uniform Commercial Code filings made
with respect to the Borrower and each Grantor in the jurisdictions in
which the Borrower is doing business and/or in which any Collateral
acquired pursuant to the Acquisition is located, and in which Uniform
Commercial Code filings have been made against the Borrower, each
Guarantor and each Grantor pursuant to paragraph (f) above. With respect
to any Liens not permitted pursuant to Section 7.01 hereof, the Agent
shall have received termination statements in form and substance
satisfactory to it.
(h) The Agent shall have received such Uniform Commercial Code
financing statements as reasonably requested by the Agent to be filed,
registered or recorded in order to evidence the Borrower's name change.
(i) The Lenders and the Agent shall have received and determined to
be in form and substance satisfactory to them:
(i) schedules listing (w) the stock ownership of Holdings, (x)
all contingent liabilities of the Borrower and its subsidiaries, as
reportable under GAAP, (y) all pending litigation involving the
Borrower or its subsidiaries or any of their respective businesses,
assets or rights and (z) all operating and capital leases;
(ii) evidence that, immediately after giving effect to the
Credit Events on the Closing Date, the Total Term Loan Commitment is
$0;
(iii) evidence that the Borrower shall have received not less
than $90,000,000 as gross cash proceeds in consideration for the
issuance of the Subordinated Notes;
(iv) a copy of a field examination of the books and records of
Crispaire Corporation;
(v) evidence of the compliance by the Borrower with Section
6.03 hereof;
(vi) the financial statements described in Section 4.07
hereof;
(vii) evidence that the Transactions are in compliance with
all applicable laws and regulations;
(viii) evidence that the Borrower and its subsidiaries are in
compliance with all Environmental Laws;
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(ix) evidence of payment of all fees owed to the Agent and the
Lenders by the Borrower under this Agreement or otherwise;
(x) evidence that all requisite third party consents
(including, without limitation, consents with respect to the
Borrower and each of the Grantors and Guarantors) to the
Transactions have been received;
(xi) evidence that there has been no material adverse change
in the business, assets, operations or financial condition of (x)
the Borrower and its subsidiaries since December 31, 1996 or (y)
Crispaire Corporation and its subsidiaries since October 31, 1996;
and
(xii) evidence that there are no actions, suits or proceedings
at law or in equity or by or before any governmental instrumentality
or other agency or regulatory authority now pending or threatened
against or affecting the Borrower or any of its subsidiaries or any
of their respective businesses, assets or rights which involve any
of the Transactions.
(j) The Agent and the Lenders shall have had the opportunity, if
they so choose, to examine the books of account and other records and
files related to Crispaire Corporation and to make copies thereof, to
conduct customer and supplier checkings and to conduct a pre-closing audit
which shall include, without limitation, verification of Eligible
Receivables related to Crispaire Corporation and formulation of an opening
Borrowing Base, and the results of such examination, checkings and audit
shall have been satisfactory to the Agent and Lenders in all respects.
(k) Messrs. Xxxx, Scholer, Fierman, Xxxx & Handler, LLP, counsel to
the Agent, shall have received payment in full for all legal fees charged,
and all costs and expenses incurred, by such counsel through the Closing
Date in connection with the transactions contemplated under this
Agreement, the Security Documents and the other Loan Documents and
instruments in connection herewith and therewith.
(l) The Agent and the Lenders shall have:
(i) received copies of each of the Acquisition Documents,
including all amendments and schedules thereto, each certified by a
Responsible Officer of the Borrower;
(ii) received evidence that the Acquisition Agreement is in
full force and effect and all consents, filings and approvals
required by applicable law in connection therewith shall have been
obtained and made;
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(iii) received evidence that simultaneously with the
occurrence of the Credit Events on the Closing Date, the Acquisition
has been duly and validly consummated, without modification,
amendment or waiver (except for such as shall have been approved in
writing by the Agent), in accordance with the terms, conditions and
provisions of the Acquisition Agreement and the other Acquisition
Documents; and
(iv) determined that the terms and provisions of all
agreements and documents in connection with the Acquisition,
including without limitation the Acquisition Documents, are
satisfactory in form and substance and the Agent shall have received
such legal opinions, certificates and copies of necessary
governmental filings and consents as the Agent shall have requested
in connection therewith, and shall have determined to its
satisfaction that the consummation of the Acquisition and other
transactions contemplated by the Acquisition Documents are in
compliance with all applicable laws and regulations.
(m) The corporate structure and capitalization of the Borrower shall
be satisfactory to the Lenders in all respects.
(n) All legal matters in connection with the Transactions shall be
satisfactory to the Agent, the Lenders and their respective counsel in
their sole discretion.
(o) The Borrower shall have executed and delivered to the Agent a
disbursement authorization letter with respect to the disbursement of the
proceeds of the Credit Events made on the Closing Date, in form and
substance satisfactory to the Agent.
(p) The Borrower shall have obtained landlords' waivers and bailee's
letters pursuant to documentation satisfactory in form and substance to
the Agent.
(q) A lockbox or other cash management arrangement with respect to
the collection account maintained at NationsBank, N.A. shall be entered
into pursuant to documentation satisfactory in form and substance to the
Agent.
(r) The Agent shall have received such other documents as the
Lenders or the Agent or Agent's counsel shall reasonably deem necessary.
VI. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that until the
principal and interest on all Notes delivered hereunder are paid in full and all
fees,
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expenses or amounts then being due and payable hereunder or in connection with
any of the Transactions shall be paid in full and the Total Revolving Credit
Commitment shall be terminated, it will, and will cause each of its
subsidiaries, to:
SECTION 6.01 Legal Existence. Do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence.
SECTION 6.02 Businesses and Properties. At all times do or cause to
be done all things necessary to preserve, renew and keep in full force and
effect the rights, licenses, Permits, franchises, patents, copyrights,
trademarks and trade names material to the conduct of its businesses; maintain
and operate such businesses in the same general manner in which they are
presently conducted and operated; comply with all laws, rules, regulations and
governmental orders (whether Federal, state or local) applicable to the
operation of such businesses whether now in effect or hereafter enacted
(including, without limitation, all applicable laws, rules, regulations and
governmental orders relating to public and employee health and safety and all
Environmental Laws) and with any and all other applicable laws, rules,
regulations and governmental orders, the lack of compliance with which would
have a Material Adverse Effect; take all actions which may be required to
obtain, preserve, renew and extend all Permits and other authorizations which
are material to the operation of such businesses; and at all times maintain,
preserve and protect all property material to the conduct of such businesses and
keep such property in good repair, working order and condition and from time to
time make, or cause to be made, all needful and proper repairs, renewals,
additions, improvements and replacements thereto necessary in order that the
business carried on in connection therewith may be properly conducted at all
times.
SECTION 6.03 Insurance. (a) Keep its insurable properties adequately
insured at all times by financially sound and reputable insurers, (b) maintain
such other insurance, to such extent and against such risks, including fire and
other risks insured against by extended coverage, as in effect and approved by
the Agent on the Closing Date; provided, however, that such insurance shall
insure the property of the Borrower against all risk of physical damage,
including, without limitation, loss by fire, explosion, theft, fraud and such
other casualties as may be reasonably satisfactory to the Agent, but in no event
at any time in an amount less than the replacement value of the Collateral, (c)
maintain in full force and effect public liability insurance against claims for
personal injury or death or property damage occurring upon, in, about or in
connection with the use of any properties owned, occupied or controlled by the
Borrower or any of its subsidiaries, in such amount as the Agent shall
reasonably deem necessary, (d) maintain business interruption insurance to such
extent as in effect and approved by the Agent on the Closing Date, and (e)
maintain such other insurance as may be required by law or as may be reasonably
requested by the Agent for purposes of assuring compliance with this Section
6.03. All insurance covering tangible personal property subject to a Lien in
favor of the Agent for its own benefit and for the benefit of
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the Lenders granted pursuant to the Security Documents shall provide that, in
the case of each separate loss the full amount of insurance proceeds shall be
payable to the Agent and shall further provide for at least 30 days' prior
written notice to the Agent of the cancellation or substantial modification
thereof.
SECTION 6.04 Taxes. Pay and discharge promptly when due all taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits or in respect of its property before the same shall become
delinquent or in default, except those which are being diligently contested in
good faith by appropriate proceedings and as to which adequate cash reserves
therefor have been established in an amount at least equal to the Lien permitted
by Section 7.01(c), as well as all lawful claims for labor, materials and
supplies or otherwise, which, if unpaid, might give rise to Liens upon such
properties or any part thereof.
SECTION 6.05 Financial Statements, Reports, etc. Furnish to the
Agent, with copies for each of the Lenders:
(a) within 90 days after the end of each Fiscal Year, (i)
Consolidated and consolidating balance sheets and Consolidated and
consolidating income state ments showing the financial condition of the
Borrower and its subsidiaries as of the close of such Fiscal Year and the
results of their operations during such year, and (ii) a Consolidated and
consolidating statement of shareholders' equity and a Con solidated and
consolidating statement of cash flow, as of the close of such Fiscal Year,
comparing such financial condition and results of operations to such
financial condition and results of operations for the comparable period
during the immediately preceding Fiscal Year, all the foregoing
Consolidated financial statements to be audited by a "Big Six" accounting
firm or other independent public accountants acceptable to the Agent
(which report shall not contain any qualification except with respect to
new accounting principles mandated by the Financial Accounting Standards
Board), and to be in form and substance acceptable to the Agent;
(b) within 45 days after the end of each of the first three (3)
fiscal quarters of each Fiscal Year the Borrower, (i) unaudited
Consolidated and consolidating balance sheets and Consolidated and
consolidating income statements showing the financial condition and
results of operations of the Borrower and its subsidiaries as of the end
of each such quarter, (ii) a Consolidated and consolidating statement of
shareholders' equity and (iii) a Consolidated and consolidating statement
of cash flow, in each case for the fiscal quarter just ended and for the
period commencing at the end of the immediately preceding Fiscal Year and
ending with the last day of such quarter, and comparing such financial
condition and results of operations to the projections for the applicable
period provided under paragraph (h) below and to the results for the
comparable period during the immediately preceding Fiscal
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Year, in each case prepared and certified by the Financial Officer of the
Borrower as presenting fairly the financial condition and results of
operations of the Borrower and its subsidiaries and as having been
prepared in accordance with GAAP, in each case subject to normal year-end
audit adjustments;
(c) within 30 days after the end of each month, (i) unaudited
Consolidated and consolidating balance sheets and income statements
showing the financial condition and results of operations of the Borrower
and its subsidiaries as of the end of each such month, (ii) a Consolidated
and consolidating statement of shareholders' equity and (iii) a
Consolidated and consolidating statement of cash flow, in each case for
the month just ended and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the last day of such
month, and comparing such financial condition and results of operations to
the projections for the applicable period provided under paragraph (h)
below and to the results for the comparable period during the immediately
preceding Fiscal Year, prepared and certified by the Financial Officer of
the Borrower as presenting fairly the financial condition and results of
operations of the Borrower and its subsidiaries and as having been
prepared in accordance with GAAP, in each case subject to normal year-end
audit adjustments;
(d) promptly after the same become publicly available, copies of
such registration statements, annual, periodic and other reports, and such
proxy statements and other information, if any, as shall be filed by the
Borrower or any subsidiaries with the Securities and Exchange Commission
pursuant to the requirements of the Securities Act of 1933 or the
Securities Exchange Act of 1934;
(e) concurrently with any delivery under (a) or (b) above, a
certificate of the firm or person referred to therein (x) which
certificate shall, in the case of the certificate of the Financial Officer
of the Borrower, certify that to the best of his or her knowledge no
Default or Event of Default has occurred (including calculations
demonstrating compliance, as of the dates of the financial statements
being furnished, with the covenants set forth in Sections 7.09 and 7.10
hereof) and, if such a Default or Event of Default has occurred, specify
the nature and extent thereof and any corrective action taken or proposed
to be taken with respect thereto and (y) which certificate, in the case of
the certificate furnished by the independent public accountants referred
in paragraph (a) above, may be limited to accounting matters and disclaim
responsibility for legal interpretations, but shall in any event certify
that to the best of such accountants' knowledge, as of the dates of the
financial statements being furnished no Default or Event of Default has
occurred under any of the covenants set forth in Sections 7.09 and 7.10
hereof (such certificate to include calculations demonstrating compliance
with such covenants), and shall in addition certify that
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in the course of preparing the audit and the certificate referred to
herein, such accountants have not become aware of the occurrence of any
other Default or Event of Default and, if such a Default or Event of
Default has occurred, specify the nature thereof; provided, however, that
any certificate delivered concurrently with (a) above shall be signed by
the Financial Officer of the Borrower;
(f) concurrently with any delivery under (a) above, a management
letter prepared by the independent public accountants who reported on the
financial statements delivered under (a) above, with respect to the
internal audit and financial controls of the Borrower and its
subsidiaries;
(g) within 15 days of the end of each fiscal month, an aging
schedule of the Receivables substantially in the form of the aging
schedule of Receivables dated July 31, 1996 previously furnished to the
Agent and a certificate substantially in the form of Schedule 6.05(g)
hereto executed by the Financial Officer of the Borrower with respect to
inventory designations;
(h) within 30 days prior to the beginning of each Fiscal Year, a
summary of business plans and financial operation projections (including,
without limitation, with respect to capital expenditures) for the Borrower
and its respective subsidiaries for such Fiscal Year (including monthly
balance sheets, statements of income and of cash flow) and annual
projections through the Final Maturity Date prepared by management and in
form, substance and detail (including, without limitation, principal
assumptions) satisfactory to the Agent;
(i) as soon as practicable, copies of all reports, forms, filings,
loan documents and financial information submitted to governmental
agencies and/or its shareholders or the holders of any of the Borrower's
Subordinated Indebtedness;
(j) within 15 days after the end of each fiscal month, a certificate
substantially in the form of Schedule 6.05(j) hereto executed by the
Financial Officer of the Borrower demonstrating compliance as at the end
of each month with the Availability requirements;
(k) immediately upon becoming aware thereof, notice to the Agent of
the breach by any party of any material agreement with the Borrower; and
(l) such other information as the Agent or any Lender may reasonably
request.
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SECTION 6.06 Litigation and Other Notices. Give the Agent prompt
written notice of the following:
(a) the issuance by any court or governmental agency or authority of
any injunction, order, decision or other restraint prohibiting, or having
the effect of prohibiting, the making of the Loans or occurrence of other
Credit Events, or invalidating, or having the effect of invalidating, any
provision of this Agreement, the Notes or the other Loan Documents, or the
initiation of any litigation or similar proceeding seeking any such
injunction, order, decision or other restraint;
(b) the filing or commencement of any action, suit or proceeding
against the Borrower or any of its subsidiaries, whether at law or in
equity or by or before any court or any Federal, state, municipal or other
governmental agency or authority, (i) which is material and is brought by
or on behalf of any governmental agency or authority, or in which
injunctive or other equitable relief is sought or (ii) as to which it is
probable (within the meaning of Statement of Financial Accounting
Standards No. 5) that there will be an adverse determination and which, if
adversely determined, would (A) reasonably be expected to result in
liability of one or more Borrower or a subsidiary thereof in an aggregate
amount of $250,000 or more, not reimbursable by insurance, or (B)
materially impair the right of the Borrower or a subsidiary thereof to
perform its obligations under this Agreement, any Note or any other Loan
Document to which it is a party;
(c) any Default or Event of Default, specifying the nature and
extent thereof and the action (if any) which is proposed to be taken with
respect thereto; and
(d) any development in the business or affairs of the Borrower or
any of its subsidiaries which has had or which is likely to have, in the
reasonable judgment of any Responsible Officer of the Borrower, a Material
Adverse Effect.
SECTION 6.07 ERISA. (a) Pay and discharge promptly any liability
imposed upon it pursuant to the provisions of Title IV of ERISA; provided,
however, that neither the Borrower nor any ERISA Affiliate shall be required to
pay any such liability if (1) the amount, applicability or validity thereof
shall be diligently contested in good faith by appropriate proceedings, and (2)
such person shall have set aside on its books reserves which, in the opinion of
the independent certified public accountants of such person, are adequate with
respect thereto.
(b) Deliver to the Agent, promptly, and in any event within 30 days,
after (i) the occurrence of any Reportable Event, a copy of the materials that
are filed with the PBGC, or the materials that would have been required to be
filed if the 30-day notice requirement to the PBGC was not waived, (ii) the
Borrower or any ERISA Affiliate
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or an administrator of any Pension Plan files with participants, beneficiaries
or the PBGC a notice of intent to terminate any such Plan, a copy of any such
notice, (iii) the receipt of notice by the Borrower or any ERISA Affiliate or an
administrator of any Pension Plan from the PBGC of the PBGC's intention to
terminate any Pension Plan or to appoint a trustee to administer any such Plan,
a copy of such notice, (iv) the filing thereof with the Internal Revenue
Service, copies of each annual report that is filed on Treasury Form 5500 with
respect to any Plan, together with certified financial statements (if any) for
the Plan and any actuarial statements on Schedule B to such Form 5500, (v) the
Borrower or any ERISA Affiliate knows or has reason to know of any event or
condition which might constitute grounds under the provisions of Section 4042 of
ERISA for the termination of (or the appointment of a trustee to administer) any
Pension Plan, an explanation of such event or condition, (vi) the receipt by the
Borrower or any ERISA Affiliate of an assessment of withdrawal liability under
Section 4201 of ERISA from a Multiemployer Plan, a copy of such assessment,
(vii) the Borrower or any ERISA Affiliate knows or has reason to know of any
event or condition which might cause any one of them to incur a liability under
Section 4062, 4063, 4064 or 4069 of ERISA or Section 412(n) or 4971 of the Code,
an explanation of such event or condition, and (viii) the Borrower or any ERISA
Affiliate knows or has reason to know that an application is to be, or has been,
made to the Secretary of the Treasury for a waiver of the minimum funding
standard under the provisions of Section 412 of the Code, a copy of such
application, and in each case described in clauses (i) through (iii) and (v)
through (vii) together with a statement signed by the Financial Officer setting
forth details as to such Reportable Event, notice, event or condition and the
action which the Borrower or such ERISA Affiliate proposes to take with respect
thereto.
SECTION 6.08 Maintaining Records; Access to Properties and
Inspections; Right to Audit. Maintain financial records in accordance with
accepted financial practices and, upon reasonable notice (which may be
telephonic), at all reasonable times and as often as any Lender may request,
permit any authorized representative designated by such Lender to visit and
inspect the properties and financial records of the Borrower and its
subsidiaries and to make extracts from such financial records at such Lender's
expense, and permit any authorized representative designated by such Lender to
discuss the affairs, finances and condition of the Borrower and its subsidiaries
with the appropriate Financial Officer and such other officers as the Borrower
shall deem appro priate and the Borrower's independent public accountants, as
applicable. The Agent agrees that it shall schedule any meeting with any such
independent public accountant through the Borrower and a Responsible Officer of
the Borrower shall have the right to be present at any such meeting. At the
Borrower's expense, the Agent shall have the right to audit, during any
twelve-month period, not more often than once during such period (unless a
Default or an Event of Default has occurred and is continuing in which case as
often as the Agent may request), the existence and condition of the accounts
receivables, inventory, books and records of the Borrower and its subsidiaries
and to review their compliance with the terms and conditions of this Agreement
and the other Loan Documents.
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SECTION 6.09 Use of Proceeds. Use the proceeds of the Credit Events
only for the purposes set forth in Section 4.14 hereof.
SECTION 6.10 Fiscal Year-End. Cause its Fiscal Year to end on
December 31 in each year.
SECTION 6.11 Further Assurances. Execute any and all further
documents and take all further actions which may be required under applicable
law, or which the Agent may reasonably request, to grant, preserve, protect and
perfect the first priority security interest created by the Security Documents
in the Collateral.
SECTION 6.12 Additional Grantors and Guarantors. Promptly inform the
Agent of the creation or acquisition of any direct or indirect subsidiary
(subject to the provisions of Section 7.06 hereof) and cause each direct or
indirect subsidiary not in existence on the date hereof (except any Foreign
Subsidiary), to enter into a Guarantee in form and substance satisfactory to the
Agent, and to execute the Security Documents, as applicable, as a Grantor, and
cause the direct parent of each such subsidiary to pledge all of the capital
stock of such subsidiary (or, in the case of a Foreign Subsidiary, 65%) pursuant
to the Pledge Agreement and cause each such subsidiary to pledge its accounts
receivable and all other assets pursuant to the Security Agreement (except any
Foreign Subsidiary).
SECTION 6.13 Environmental Laws. (a) Comply, and cause each of its
subsidiaries to comply, in all material respects with the provisions of all
Environmental Laws, and shall keep its properties and the properties of its
subsidiaries free of any Lien imposed pursuant to any Environmental Law. The
Borrower shall not cause or suffer or permit, and shall not suffer or permit any
of its subsidiaries to cause or suffer or permit, the property of the Borrower
or its subsidiaries to be used for the generation, production, processing,
handling, storage, transporting or disposal of any Hazardous Material, except
for Hazardous Materials used in the ordinary course of business of the Borrower
and in material compliance with Environmental Laws.
(b) Supply to the Agent copies of all material submissions by the
Borrower or any of its subsidiaries to any governmental body and of the reports
of all environmental audits and of all other environmental tests, studies or
assessments (including the data derived from any sampling or survey of asbestos,
soil, or subsurface or other materials or conditions) that have been conducted
or performed (by or on behalf of the Borrower or any of its subsidiaries) on or
regarding the properties owned, operated, leased or occupied by the Borrower or
any of its subsidiaries in response to violations of Environmental Law or
Releases of Hazardous Materials that would reasonably be expected to give rise
to an Environmental Claim in excess of $100,000. The Borrower shall also permit
and authorize, and shall cause its subsidiaries to permit and authorize, the
consultants, attorneys or other persons that prepare such submissions or reports
or perform such audits, tests, studies or assessments to discuss
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such submissions, reports or audits with the Agent and the Lenders.
(c) Promptly (and in no event more than ten Business Days after the
Borrower becomes aware or is otherwise informed of such event) provide oral and
written notice to the Agent upon the happening of any of the following:
(i) the Borrower, any subsidiary of the Borrower, or any
tenant or other occupant of any property of the Borrower or such
subsidiary receives written notice of any claim, complaint, charge
or notice of a violation or potential violation of any Environmental
Law that would reasonably be expected to give rise to a liability or
cost in excess of $30,000;
(ii) there has been a spill or other Release of Hazardous
Materials upon, under or about or affecting any of the properties
owned, operated, leased or occupied by the Borrower or any of its
subsidiaries, in amounts that may have to be reported under
Environmental Law or Hazardous Materials at levels or in amounts
that may have to be reported, remedied or responded to under
Environmental Law are detected on or in the soil or groundwater such
that would reasonably be expected to give rise to a liability or
cost in excess of $30,000;
(iii) the Borrower or any of its subsidiaries is or may be
liable for any costs of cleaning up or otherwise responding to a
Release of Hazardous Materials such that would reasonably be
expected to give rise to a liability or cost in excess of $30,000;
(iv) any part of the properties owned, operated, leased or
occupied by the Borrower or any of its subsidiaries is or may be
subject to a Lien under any Environmental Law; or
(v) the Borrower or any of its subsidiaries undertakes any
Remedial Work with respect to any Hazardous Materials such that
would reasonably be expected to give rise to a liability or cost in
excess of $30,000.
(d) Without in any way limiting the scope of Section 11.04(c) and in
addition to any obligations thereunder, the Borrower hereby indemnifies and
agrees to hold the Agent and the Lenders harmless from and against any
liability, loss, damage, suit, action or proceeding arising out of its business
or the business of its subsidiaries pertaining to Hazardous Materials,
including, but not limited to, claims of any governmental body or any third
person arising under any Environmental Law or under tort, contract or common
law, except to the extent any such liability or loss is found by a court of
final adjudication to have been due to the gross negligence or willful
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misconduct of the Agent or any Lender. To the extent laws of the United States
or any applicable state or local law in which property owned, operated, leased
or occupied by the Borrower or any of its subsidiaries is located provide that a
Lien upon such property of the Borrower or such subsidiary may be obtained for
the removal of Hazardous Materials which have been or may be Released, no later
than sixty days after notice that a Release has occurred is given by the Agent
to the Borrower or such subsidiary, the Borrower or such subsidiary shall
deliver to the Agent a report issued by a qualified third party engineer
assessing the existence and extent of any Hazardous Materials located upon or
beneath the specified property. To the extent any Hazardous Materials located
therein or thereunder either subject the property to Lien or require removal to
safeguard the health of any persons, the removal thereof shall be an affirmative
covenant of the Borrower hereunder.
(e) In the event that any Remedial Work is required to be performed
by the Borrower or any of its subsidiaries under any applicable Environmental
Law, any judicial order, or by any governmental entity, the Borrower or such
subsidiary shall commence all such Remedial Work at or prior to the time
required therefor under such Environmental Law or applicable judicial orders and
thereafter diligently prosecute to completion all such Remedial Work in
accordance with and within the time allowed under such applicable Environmental
Laws or judicial orders.
SECTION 6.14 Pay Obligations to Lenders and Perform Other Covenants.
(a) Make full and timely payment of the Obligations, whether now existing or
hereafter arising, (b) duly comply with all the terms and covenants contained in
this Agreement (including, without limitation, the borrowing limitations and
mandatory prepayments in accordance with Article II hereof) in each of the other
Loan Documents, all at the times and places and in the manner set forth therein,
and (c) except for the filing of continuation statements and the making of other
filings by the Agent as secured party or assignee, at all times take all actions
necessary to maintain the Liens and security interests provided for under or
pursuant to this Agreement and the Security Documents as valid and perfected
first Liens on the property intended to be covered thereby (subject only to
Liens expressly permitted hereunder) and supply all information to the Agent
necessary for such maintenance.
SECTION 6.15 Maintain Operating Accounts. Maintain its principal
disbursement accounts, operating accounts and other depository accounts as set
forth on Schedule 4.22 or as otherwise contemplated by Section 10.01, and notify
the Agent promptly of the closing of any account specified in Schedule 4.22 and
the opening up of any new accounts, in detail satisfactory to the Agent and with
respect to any such new account, provide the Agent with such agreements, in form
and substance satisfactory to the Agent, as the Agent shall request. The
Borrower agrees that if at any time the outstanding balance of the account
maintained by RVPI with the Royal Bank of Canada (or any financial institution
with an office in Barbados) exceeds $10,000.00, the Borrower will provide, or
will cause to be provided. to the Agent such agreements, in
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form and substance satisfactory to the Agent, as the Agent shall request.
SECTION 6.16 Amendments. Promptly supply to the Agent certified
copies of any amendments to the Acquisition Documents.
SECTION 6.17 Lock-Box Accounts. Within 60 days of the Closing Date,
enter into lockbox or other cash management arrangements with respect to
accounts acquired or opened in connection with the Acquisition pursuant to
documentation satisfactory in form and substance to the Agent.
VII. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that until the
principal and interest on all Notes delivered hereunder are paid in full and all
fees, expenses or amounts then being due and payable hereunder or in connection
with any of the Transactions shall be paid in full and the Total Revolving
Credit Commitment shall be terminated, it will not and will not cause or permit
any of its subsidiaries to, either directly or indirectly:
SECTION 7.01 Liens. Incur, create, assume or permit to exist any
Lien on any of its property or assets (including the stock of any direct or
indirect subsidiary), whether owned at the date hereof or hereafter acquired, or
assign or convey any rights to or security interests in any future revenues,
except:
(a) Liens incurred and pledges and deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, old-age pensions and other social security benefits (not
including any lien described in Section 412(m) of the Code);
(b) Liens imposed by law, such as carriers', warehousemen's,
mechanics', materialmen's and vendors' liens and other similar liens,
incurred in good faith in the ordinary course of business and securing
obligations which are not overdue for a period of more than 15 days or
which are being contested in good faith by appropriate proceedings as to
which the Borrower or any of its subsidiaries, as the case may be, shall,
to the extent required by GAAP, have set aside on its books adequate
reserves;
(c) Liens securing the payment of taxes, assessments and
governmental charges or levies, that are not delinquent or are being
diligently contested in good faith by appropriate proceedings and as to
which adequate reserves have been established in accordance with GAAP;
provided, however, that in no event shall the aggregate amount of such
reserves be less than the aggregate amount secured by such Liens;
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(d) zoning restrictions, easements, licenses, reservations,
provisions, covenants, conditions, waivers, restrictions on the use of
property or minor irregulari ties of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent of the
lessee) which do not in the aggregate materially detract from the value of
its property or assets or materially impair the use thereof in the
operation of its business;
(e) Liens upon any equipment acquired through the purchase or lease
(including Capitalized Lease Obligations) by the Borrower or any of its
subsidiaries which are created or incurred contemporaneously with such
acquisition to secure or provide for the payment of any part of the
purchase price of, or lease payments on, such equipment and expenses
relating thereto (but no other amounts and not in excess of the purchase
price or lease payments); provided, however, that any such Lien shall not
apply to any other property of the Borrower or any of its subsidiaries;
and provided, further, that after giving effect to such purchase or lease,
compliance is maintained with Section 7.07 hereof;
(f) Liens existing on the date of this Agreement and set forth in
Schedule 7.01 annexed hereto but not the extension, renewal or refunding
of the Indebtedness secured thereby;
(g) Liens created in favor of the Agent for its own benefit and for
the benefit of the Lenders;
(h) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, surety, customs and appeal bonds and other obligations of
like nature, incurred as an incident to and in the ordinary course of
business; or
(i) Liens securing Indebtedness permitted under clause (x) of
Section 7.03 hereof; provided, that such Lien shall be promptly disclosed
to the Agent.
SECTION 7.02 Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby the Borrower or any
of its subsidiaries shall sell or transfer any property, real or personal, and
used or useful in its business, whether now owned or hereafter acquired, and
thereafter rent or lease such property or other property which the Borrower or
such subsidiary intends to use for substantially the same purpose or purposes as
the property being sold or transferred.
SECTION 7.03 Indebtedness. Incur, create, assume or permit to exist
any Indebtedness other than (i) Indebtedness secured by Liens permitted under
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tion 7.01, (ii) Indebtedness (including, without limitation, Guarantees)
existing on the date hereof and listed in Schedule 7.03 annexed hereto, but not
the extension, renewal or refunding thereof, (iii) Indebtedness incurred
hereunder, (iv) Indebtedness to trade creditors incurred in the ordinary course
of business, (v) Guarantees constituting the endorsement of negotiable
instruments for deposit or collection in the ordinary course of business, (vi)
Guarantees of the Obligations, (vii) purchase money Indebtedness to the extent
permitted by Sections 7.01(e) and 7.07 hereof, (viii) Subordinated Indebtedness,
(ix) Indebtedness for judgments which do not constitute a Default or an Event of
Default under Article VIII(j), (x) contingent obligations (fully reimbursable by
insurance) incurred in respect of product warranties which are provided to
customers of the Borrower or any subsidiary in the ordinary course of business
and (xi) other Indebtedness not to exceed $100,000 in the aggregate at any time
outstanding.
SECTION 7.04 Dividends, Distributions and Payments. Declare or pay,
directly and indirectly, any cash dividends or make any other distribution,
whether in cash, property, securities or a combination thereof, with respect to
(whether by reduction of capital or otherwise) any shares of its capital stock
or directly or indirectly redeem, purchase, retire or otherwise acquire for
value (or permit any subsidiary to purchase or acquire) any shares of any class
of its capital stock or set aside any amount for any such purpose, except that
(i) any subsidiary of the Borrower may pay cash dividends to the Borrower, (ii)
so long as no Default or Event of Default shall have occurred and be continuing,
the Borrower may pay cash dividends to Holdings solely for the purpose of paying
taxes not otherwise immediately payable pursuant to tax sharing arrangements and
which arise from consolidated return filings by Holdings but only as and when
due and payable, and (iii) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower may pay cash dividends to Holdings to
repurchase shares pursuant to written shareholders agreements or employment
arrangements relating to the death, disability, resignation or termination of
employment of any officer or employee; provided, that the aggregate amount
expended for such repurchases during the term of this Agreement shall not,
without the consent of the Required Lenders, exceed $500,000.
SECTION 7.05 Consolidations, Mergers and Sales of Assets.
Consolidate with or merge into any other person, or sell, lease, transfer or
assign to any persons or otherwise dispose of (whether in one transaction or a
series of transactions) any portion of its assets (whether now owned or
hereafter acquired), or sell any of its inventory, aggregating in excess of
$50,000 in any Fiscal Year, other than (i) sales of inventory in the ordinary
course of business, (ii) sales or other dispositions of obsolete equipment,
(iii) the license of trademarks and other intellectual property for fair value
in the ordinary course of business to third parties and (iv) Qualified Sales, or
permit another person to merge into it, or acquire all or substantially all the
capital stock or assets of any other person.
SECTION 7.06 Investments. Own, purchase or acquire any stock,
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obligations, assets (not in the ordinary course of business) or securities of,
or any interest in, or make any capital contribution or loan or advance to, any
other person, or make any other investments, except:
(a) certificates of deposit in dollars of any commercial banks
registered to do business in any state of the United States (i) having
capital and surplus in excess of $1,000,000,000 and (ii) whose long-term
debt rating is at least investment grade as determined by either Standard
& Poor's Ratings Group or Xxxxx'x Investors Service, Inc.;
(b) readily marketable direct obligations of the United States
government or any agency thereof which are backed by the full faith and
credit of the United States;
(c) investments in money market mutual funds having assets in excess
of $2,500,000,000;
(d) commercial paper at the time of acquisition having the highest
rating obtainable from either Standard & Poor's Ratings Group or Xxxxx'x
Investors Service, Inc.;
(e) federally tax exempt securities rated A or better by either
Standard & Poor's Ratings Group or Xxxxx'x Investors Service, Inc.;
(f) loans and advances to officers and employees for business
purposes in an aggregate amount not to exceed $50,000 in the aggregate
outstanding at any time for all loans and advances under this clause (f);
(g) investments in the stock of RVPI existing on the Original
Closing Date, but not any additional investments therein; and
(h) current assets arising from the sale or lease of goods or the
rendition of services in the ordinary course of business of the Borrower;
provided that, in each case mentioned in (a), (b), (d), (e) and (g) above, such
obligations shall mature not more than one year from the date of acquisition
thereof.
SECTION 7.07 [Intentionally Omitted.]
SECTION 7.08 [Intentionally Omitted.]
SECTION 7.09 Leverage Ratio. Permit the Leverage Ratio of the
Borrower and its subsidiaries at the end of each fiscal quarter, commencing the
fiscal quarter ending December 31, 1998 to be greater than 6.25:1.00.
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SECTION 7.10 Interest Coverage Ratio. Permit the Interest Coverage
Ratio of the Borrower and its subsidiaries at the end of each fiscal quarter to
be less than:
Date of Determination Ratio
--------------------- -----
December 31, 1997 1.20:1.00
March 31, 1998 1.20:1.00
June 30, 1998 1.20:1.00
September 30, 1998 1.20:1.00
Each December 31, March 31, 1.25:1.00
June 30 and September 30 thereafter
SECTION 7.11 Business. Alter the nature of its business as operated
on the date of this Agreement other than any businesses or activities
substantially similar or related thereto.
SECTION 7.12 Sales of Receivables. Sell, assign, discount, transfer,
or otherwise dispose of any accounts receivable, promissory notes, drafts or
trade acceptances or other rights to receive payment held by it, with or without
recourse, except (i) for the purpose of collection or settlement in the ordinary
course of business or (ii) the sale of any such accounts to The Chase Manhattan
Bank.
SECTION 7.13 Use of Proceeds. Permit the proceeds of any Credit
Event to be used for any purpose which entails a violation of, or is
inconsistent with, Regulation G, T, U or X of the Board, or for any purpose
other than those set forth in Section 4.14 hereof.
SECTION 7.14 ERISA. (a) Engage in any transaction in connection with
which the Borrower or any ERISA Affiliate could be subject to either a material
civil penalty assessed pursuant to the provisions of Section 502 of ERISA or a
material tax imposed under the provisions of Section 4975 of the Code.
(b) Terminate any Pension Plan in a "distress termination" under Sec
tion 4041 of ERISA, or take any other action which could result in a material
liability of the Borrower or any ERISA Affiliate to the PBGC.
(c) Fail to make payment when due of all amounts which, under the
provisions of any Plan, the Borrower or any ERISA Affiliate is required to pay
as contributions thereto, or, with respect to any Pension Plan, permit to exist
any material "accumulated funding deficiency" (within the meaning of Section 302
of ERISA and
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Section 412 of the Code), whether or not waived, with respect thereto.
(d) Adopt an amendment to any Pension Plan requiring the provision
of security under Section 307 of ERISA or Section 401(a)(29) of the Code.
SECTION 7.15 Accounting Changes. Make, or permit any subsidiary to
make, any change in their accounting treatment or financial reporting practices
except as required or permitted by GAAP.
SECTION 7.16 Prepayment or Modification of Indebtedness;
Modification of Charter Documents. (a) Other than Indebtedness incurred
hereunder, directly or indirectly prepay, redeem, purchase or retire any
Indebtedness, including, without limitation, any Subordinated Indebtedness.
(b) Modify, amend or otherwise alter the terms and provisions of any
Subordinated Indebtedness.
(c) Modify, amend or alter their certificates or articles of
incorporation.
(d) Modify, amend or otherwise alter in any material respect the
terms and provisions of the Coast Distribution Agreement without the consent of
the Agent.
SECTION 7.17 Transactions with Affiliates. Except as otherwise
specifically set forth in this Agreement, including the transactions
contemplated by the Acquisition Documents and the Subordinated Notes, directly
or indirectly purchase, acquire or lease any property from, or sell, transfer or
lease any property to, or enter into any other transaction with, any
stockholder, Affiliate or agent of the Borrower, except at prices and on terms
not less favorable to it than that which would have been obtained in an
arm's-length transaction with a non-affiliated third party.
SECTION 7.18 Consulting Fees. Pay any management, consulting or
other fees of any kind to Holdings, any subsidiary thereof or any subsidiary of
the Borrower, or to any Affiliate of Holdings, any of its subsidiaries or of the
Borrower or any of the Borrower's subsidiaries.
SECTION 7.19 Negative Pledges, Etc. Enter into any agreement
(other than this Agreement, any other Loan Document) which (a) prohibits the
creation or assumption of any Lien upon any of the Collateral, including,
without limitation, any hereafter acquired property, or (b) specifically
prohibits the amendment or other modification of this Agreement or any other
Loan Document.
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VIII. EVENTS OF DEFAULT
In case of the happening of any of the following events (herein
called "Events of Default"):
(a) any representation or warranty made or deemed made in or in
connection with this Agreement, any of the Security Documents, the Notes
or other Loan Documents or any Credit Events hereunder, shall prove to
have been incorrect in any material respect when made or deemed to be
made;
(b) default shall be made in the payment of any principal of any
Note when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or by acceleration
thereof or otherwise;
(c) default shall be made in the payment of any interest on any
Note, or any fee or any other amount payable hereunder, or under the
Notes, Letters of Credit, or any other Loan Document or in connection with
any other Credit Event or the Transactions when and as the same shall
become due and payable, and such default shall continue for five (5)
consecutive days;
(d) default shall be made in the due observance or performance of
any covenant, condition or agreement to be observed or performed on the
part of any Loan Party pursuant to the terms of this Agreement, any of the
Notes, any of the Security Documents or any other Loan Document (and with
respect to defaults under Sections 6.04, 6.06 and 6.07, such default shall
continue for ten (10) consecutive days);
(e) any Loan Party shall (i) voluntarily commence any proceeding or
file any petition seeking relief under Title 11 of the United States Code
or any other Federal, state or foreign bankruptcy, insolvency, liquidation
or similar law, (ii) consent to the institution of, or fail to contravene
in a timely and appropriate manner, any such proceeding or the filing of
any such petition, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator or similar official for any
Loan Party or for a substantial part of its property or assets, (iv) file
an answer admitting the material allegations of a petition filed against
it in any such proceeding, (v) make a general assignment for the benefit
of creditors, (vi) become unable, admit in writing its inability or fail
generally to pay its debts as they become due or (vii) take corporate
action for the purpose of effecting any of the foregoing;
(f) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of any Loan Party, or of a substantial part of the
property or assets of
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any Loan Party, under Title 11 of the United States Code or any other
Federal state or foreign bankruptcy, insolvency, receivership or similar
law, (ii) the appointment of a receiver, trustee, custodian, sequestrator
or similar official for any Loan Party or for a substantial part of the
property of any Loan Party or (iii) the winding-up or liquidation of any
Loan Party; and such proceeding or petition shall continue undismissed for
60 days or an order or decree approving or ordering any of the foregoing
shall continue unstayed and in effect for 60 days;
(g) default shall be made with respect to any Indebtedness (other
than Subordinated Indebtedness) or obligations under a capitalized lease
of any Loan Party (excluding Indebtedness outstanding hereunder), whose
unpaid principal amount exceeds (together with all other Indebtedness or
capitalized leases in default under this clause (g)) $250,000 in the
aggregate at any time, or default shall be made with respect to any
Subordinated Indebtedness, in either case, if the effect of any such
default shall be to accelerate, or to permit the holder or obligee of any
such Indebtedness or obligations under a capitalized lease (or any trustee
on behalf of such holder or obligee) at its option to accelerate, the
maturity of such Indebtedness or obligations under a capitalized lease;
(h) (i) a Reportable Event shall have occurred with respect to a
Pension Plan, (ii) the filing by any Loan Party, any ERISA Affiliate, or
an administrator of any Plan of a notice of intent to terminate such a
Plan in a "distress termination" under the provisions of Section 4041 of
ERISA, (iii) the receipt of notice by any Loan Party, any ERISA Affiliate,
or an administrator of a Plan that the PBGC has instituted proceedings to
terminate (or appoint a trustee to administer) such a Pension Plan, (iv)
any other event or condition exists which might, in the opinion of the
Agent, constitute grounds under the provisions of Section 4042 of ERISA
for the termination of (or the appointment of a trustee to administer) any
Pension Plan by the PBGC, (v) a Pension Plan shall fail to maintain the
minimum funding standard required by Section 412 of the Code for any plan
year or a waiver of such standard is sought or granted under the
provisions of Section 412(d) of the Code, (vi) any Loan Party or any ERISA
Affiliate has incurred, or is likely to incur, a liability under the
provisions of Section 4062, 4063, 4064 or 4201 of ERISA, (vii) any Loan
Party or any ERISA Affiliate fails to pay the full amount of an
installment required under Section 412(m) of the Code, (viii) the
occurrence of any other event or condition with respect to any Plan which
would constitute an event of default under any other agreement entered
into by any Loan Party or any ERISA Affiliate, and in each case in clauses
(i) through (viii) of this subsection (h), such event or condition,
together with all other such events or conditions, if any, could subject
any Loan Party or any ERISA Affiliate to any taxes, penalties or other
liabilities which, in the opinion of the Agent, could have a Material
Adverse Effect on the financial condition of any Loan Party or any ERISA
Affiliate;
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(i) any Loan Party or any ERISA Affiliate (i) shall have been
notified by the sponsor of a Multiemployer Plan that it has incurred any
material with drawal liability to such Multiemployer Plan, and (ii) does
not have reasonable grounds for contesting such withdrawal liability and
is not in fact contesting such withdrawal liability in a timely and
appropriate manner;
(j) a judgment (not reimbursed by insurance policies of any Loan
Party) or decree for the payment of money, a fine or penalty which when
taken together with all other such judgments, decrees, fines and penalties
shall exceed $500,000 shall be rendered by a court or other tribunal
against any Loan Party and (i) shall remain undischarged or unbonded for a
period of 60 consecutive days during which the execution of such judgment,
decree, fine or penalty shall not have been stayed effectively or (ii) any
judgment creditor or other person shall legally commence actions to
collect on or enforce such judgment, decree, fine or penalty;
(k) this Agreement, any Note, any of the Security Documents, any
Guarantee or other Loan Documents shall for any reason cease to be, or
shall be asserted by any Loan Party not to be, a legal, valid and binding
obligation of any Loan Party, enforceable in accordance with its terms, or
the security interest or Lien purported to be created by any of the
Security Documents shall for any reason cease to be, or be asserted by any
Loan Party not to be, a valid, first priority perfected security interest
in any Collateral (except to the extent otherwise permitted under this
Agreement or any of the Security Documents); or
(l) a Change of Control shall occur;
then, and in any such event (other than an event described in paragraph (e) or
(f) above), and at any time thereafter during the continuance of such event, the
Agent may, and upon the written request of the Required Lenders shall, by
written notice (or facsimile notice promptly confirmed in writing) to the
Borrower, take any or all of the following actions at the same or different
times: (i) terminate forthwith all or any portion of the Total Commitment and
the obligations of the Lenders to issue Letters of Credit hereunder; (ii)
declare the Notes and any amounts then owing to the Lenders on account of
drawings under any Letters of Credit to be forthwith due and payable, and (iii)
require that the Borrower remit to the Agent cash collateral in an amount equal
to the aggregate undrawn amount of all outstanding Letters of Credit at such
time, such cash collateral to be held by the Agent for its own benefit and the
benefit of the Lenders in a cash collateral account on terms and conditions
satisfactory to the Agent, whereupon the principal of such Notes, together with
accrued interest and fees thereon and any amounts then owing to the Lenders on
account of drawings under any Letters of Credit and other liabilities of the
Borrower accrued hereunder, shall become forthwith due and payable both as to
principal and interest, without presentment, demand, protest or any other notice
of any kind, all of which are hereby expressly waived by the
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Borrower, anything contained herein or in the Notes to the contrary
notwithstanding; provided, however, that with respect to a default described in
paragraph (e) or (f) above, the Total Commitment and the obligation of the
Lenders to issue Letters of Credit shall automatically terminate and the
principal of the Notes, together with accrued interest and fees thereon and any
amounts then owing to the Lenders on account of drawings under any Letters of
Credit and any other liabilities of the Borrower accrued hereunder shall
automatically become due and payable, both as to principal and interest, without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in the
Notes to the contrary notwithstanding.
IX. AGENT
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank is hereby appointed to act as Agent on
behalf of the Lenders. Each of the Lenders and each subsequent holder of any
Note or issuer of any Letter of Credit by its acceptance thereof, irrevocably
authorizes the Agent to take such action on its behalf and to exercise such
powers hereunder and under the Security Documents and other Loan Documents as
are specifically delegated to or required of the Agent by the terms hereof and
the terms thereof together with such powers as are reasonably incidental
thereto. Neither the Agent nor any of its directors, officers, employees or
agents shall be liable as such for any action taken or omitted to be taken by it
or them hereunder or under any of the Security Documents and other Loan
Documents or in connection herewith or therewith (a) at the request or with the
approval of the Required Lenders (or, if otherwise specifically required
hereunder or thereunder, the consent of all the Lenders) or (b) in the absence
of its or their own gross negligence or willful misconduct.
The Agent is hereby expressly authorized on behalf of the Lenders,
without hereby limiting any implied authority, (a) to receive on behalf of each
of the Lenders any payment of principal of or interest on the Notes outstanding
hereunder and all other amounts accrued hereunder paid to the Agent, and
promptly to distribute to each Lender its proper share of all payments so
received, (b) to distribute to each Lender copies of all notices, agreements and
other material as provided for in this Agreement or in the Security Documents
and other Loan Documents as received by such Agent and (c) to take all actions
with respect to this Agreement and the Security Documents and other Loan
Documents as are specifically delegated to the Agent.
In the event that (a) the Borrower fails to pay when due the
principal of or interest on any Note, any amount payable under any Letter of
Credit, or any fee payable hereunder or (b) the Agent receives written notice of
the occurrence of a Default or an Event of Default, the Agent within a
reasonable time shall give written notice thereof to the Lenders, and shall take
such action with respect to such Event of Default or other condition or event as
it shall be directed to take by the Required
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Lenders; provided, however, that, unless and until the Agent shall have received
such directions, the Agent may take such action or refrain from taking such
action hereunder or under the Security Documents or other Loan Documents with
respect to a Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
The Agent shall not be responsible in any manner to any of the
Lenders for the effectiveness, enforceability, perfection, value, genuineness,
validity or due execution of this Agreement, the Notes or any of the other Loan
Documents or Collateral or any other agreements or certificates, requests,
financial statements, notices or opinions of counsel or for any recitals,
statements, warranties or representations contained herein or in any such
instrument or be under any obligation to ascertain or inquire as to the
performance or observance of any of the terms, provisions, covenants,
conditions, agreements or obligations of this Agreement or any of the other Loan
Documents or any other agreements on the part of the Borrower and, without
limiting the generality of the foregoing, the Agent shall, in the absence of
knowledge to the contrary, be entitled to accept any certificate furnished
pursuant to this Agreement or any of the other Loan Documents as conclusive
evidence of the facts stated therein and shall be entitled to rely on any note,
notice, consent, certificate, affidavit, letter, telegram, teletype message,
statement, order or other document which it believes in good faith to be genuine
and correct and to have been signed or sent by the proper person or persons. It
is understood and agreed that the Agent may exercise its rights and powers under
other agreements and instruments to which it is or may be a party, and engage in
other transactions with the Borrower, as though it were not Agent of the Lenders
hereunder.
The Agent shall promptly give notice to the Lenders of the receipt
or sending of any notice, schedule, report, projection, financial statement or
other document or information pursuant to this Agreement or any of the other
Loan Documents and shall promptly forward a copy thereof to each Lender.
Neither the Agent nor any of its directors, officers, employees or
agents shall have any responsibility to the Borrower on account of the failure
or delay in performance or breach by any Lender other than the Agent of any of
its obligations hereunder or to any Lender on account of the failure of or delay
in performance or breach by any other Lender or the Borrower of any of their
respective obligations hereunder or in connection herewith.
The Agent may consult with legal counsel selected by it in
connection with matters arising under this Agreement or any of the other Loan
Documents and any action taken or suffered in good faith by it in accordance
with the opinion of such counsel shall be full justification and protection to
it. The Agent may exercise any of its powers and rights and perform any duty
under this Agreement or any of the other Loan Documents through agents or
attorneys.
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The Agent and the Borrower may deem and treat the payee of any Note
as the holder thereof until written notice of transfer shall have been delivered
as provided herein by such payee to the Agent and the Borrower.
With respect to the Loans made hereunder, the Notes issued to it and
any other Credit Event applicable to it, the Agent in its individual capacity
and not as an Agent shall have the same rights, powers and duties hereunder and
under any other agreement executed in connection herewith as any other Lender
and may exercise the same as though it were not the Agent, and the Agent and its
affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or other affiliate thereof as if it were not
the Agent. Each of the Lenders hereby acknowledges that the Agent and/or one or
more Affiliates of the Agent may at any time and from time to time be a holder
of equity interests in a Loan Party.
Each Lender agrees (i) to reimburse the Agent in the amount of such
Lender's pro rata share (based on its Commitment hereunder) of any expenses
incurred for its own benefit and for the benefit of the Lenders by the Agent,
including counsel fees and compensation of agents and employees paid for
services rendered on behalf of the Lenders, not reimbursed by the Borrower and
(ii) to indemnify and hold harmless the Agent and any of its directors,
officers, employees or agents, on demand, in the amount of its pro rata share,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against it in its capacity as the Agent or any of them in any way relating to or
arising out of this Agreement or any of the other Loan Documents or any action
taken or omitted by it or any of them under this Agreement or any of the other
Loan Documents, to the extent not reimbursed by the Borrower; provided, however,
that no Lender shall be liable to the Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgment, suits, costs,
expenses or disbursements resulting from the gross negligence or willful
misconduct of the Agent or any of its directors, officers, employees or agents.
Each Lender acknowledges that it has, independently and without
reliance upon the Agent or any other Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and any other Loan Document to which such
Lender is party. Each Lender also acknowledges that it will, independently and
without reliance upon the Agent or any other Lender and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document, any related agreement or any document furnished
hereunder.
Subject to the appointment and acceptance of a successor Agent as
provided below, the Agent may resign at any time by notifying the Lenders and
the
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Borrower. Upon any such resignation, the Lenders shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by such
Lenders and shall have accepted such appointment within 30 days after the
retiring Agent gives notice of its resignation, then the retiring Agent may, on
behalf of the Lenders, appoint a successor Agent which shall be a bank with an
office (or an affiliate with an office) in New York, New York, having a combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor bank, such successor shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent and the retiring Agent shall be discharged from
its duties and obligations hereunder and under each of the other Loan Documents.
After any Agent's resignation hereunder, the provisions of this Article shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.
The Lenders hereby acknowledge that the Agent shall be under no duty
to take any discretionary action permitted to be taken by the Agent pursuant to
the provisions of this Agreement or any of the other Loan Documents unless it
shall be requested in writing to do so by the Required Lenders. The Lenders
hereby further acknowledge that the Agent is not acting as the fiduciary of, or
the trustee for, any of the Lenders.
X. MANAGEMENT, COLLECTION AND STATUS OF RECEIVABLES
AND OTHER COLLATERAL
SECTION 10.01 Collection of Receivables; Management of Collateral.
(a) At the request of the Agent, upon the occurrence and continuance of an Event
of Default, the Borrower will, at its own cost and expense, (i) arrange for
remittances on Receivables to be made directly to lockboxes designated by the
Agent or in such other manner as the Agent may direct, and (ii) promptly deposit
all payments received by the Borrower on account of Receivables, whether in the
form of cash, checks, notes, drafts, bills of exchange, money orders or
otherwise, in one or more accounts designated by the Agent in precisely the form
received (but with any endorsements of the Borrower necessary for deposit or
collection), subject to withdrawal by the Agent only, as hereinafter provided,
and until such payments are deposited, such payments shall be deemed to be held
in trust by the Borrower for and as the Lenders' property and shall not be
commingled with the Borrower's other funds. All remittances and payments that
are deposited in accordance with the foregoing will, after two Business Days (or
three Business Days in the case of deposits that are made after 1:00 p.m. (New
York time), be applied by the Agent to reduce the outstanding balance of the
Revolving Credit Loans, subject to final collection in cash of the item
deposited.
Upon the occurrence and continuance of an Event of Default, the
Agent may send a notice of assignment and/or notice of the Agent's security
interest to any and all Customers or any third party holding or otherwise
concerned with any of the
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Collateral, and thereafter the Agent shall have the sole right to collect the
Receivables and/or take possession of the Collateral and the books and records
relating thereto. The Borrower shall not, without the Agent's prior written
consent, grant any extension of the time of payment of any Receivable,
compromise or settle any Receivable for less than the full amount thereof,
release, in whole or in part, any person or property liable for the payment
thereof, or allow any credit or discount whatsoever thereon except, prior to the
occurrence and continuance of an Event of Default, as permitted by Sec tion
10.03 hereof.
(b) (i) The Borrower hereby constitutes the Agent or the Agent's
designee as the Borrower's attorney-in-fact with power to endorse the Borrower's
name upon any notes, acceptances, checks, drafts, money orders or other
evidences of payment or Collateral that may come into its possession; upon the
occurrence and continuance of an Event of Default, to sign the Borrower's name
on any invoice or xxxx of lading relating to any Receivables, drafts against
Customers, assignments and verifications of Receivables and notices to
Customers; to send verifications of Receivables; upon the occurrence of an Event
of Default, to notify the Postal Service authorities to change the address for
delivery of mail addressed to the Borrower to such address as the Agent may
designate; and to do all other acts and things necessary to carry out this
Agreement. All acts of said attorney or designee are hereby ratified and
approved, and said attorney or designee shall not be liable for any acts of
omission or commission, for any error of judgment or for any mistake of fact or
law, provided that the Agent or its designee shall not be relieved of liability
to the extent it is determined by a final judicial decision that its act, error
or mistake constituted gross negligence or willful misconduct. This power of
attorney being coupled with an interest is irrevocable until all of the
Obligations are paid in full and this Agreement and the Total Commitment is
terminated.
(ii) The Agent, without notice to or consent of the Borrower,
upon the occurrence and during the continuance of an Event of Default, (A) may
xxx upon or otherwise collect, extend the time of payment of, or compromise or
settle for cash, credit or otherwise upon any terms, any of the Receivables or
any securities, instruments or insurance applicable thereto and/or release the
obligor thereon; (B) is authorized and empowered to accept the return of the
goods represented by any of the Receivables; and (C) shall have the right to
receive, endorse, assign and/or deliver in its name or the name of the Borrower
any and all checks, drafts and other instruments for the payment of money
relating to the Receivables, and the Borrower hereby waives notice of
presentment, protest and non-payment of any instrument so endorsed.
(c) Nothing herein contained shall be construed to constitute the
Borrower as agent of the Agent for any purpose whatsoever, and the Agent shall
not be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof (except to the extent it is determined by a
final judicial decision that the Agent's
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or a Lender's act or omission constituted gross negligence or willful
misconduct). The Agent and the Lenders shall not, under any circumstances or in
any event whatsoever, have any liability for any error or omission or delay of
any kind occurring in the settlement, collection or payment of any of the
Receivables or any instrument received in payment thereof or for any damage
resulting therefrom (except to the extent it is determined by a final judicial
decision that the Agent's or such Lender's error, omission or delay constituted
gross negligence or willful misconduct). The Agent and the Lenders do not, by
anything herein or in any assignment or otherwise, assume the Borrower's
obligations under any contract or agreement assigned to the Agent or the
Lenders, and the Agent and the Lenders shall not be responsible in any way for
the performance by the Borrower of any of the terms and conditions thereof.
(d) If any of the Receivables includes a charge for any tax payable
to any governmental tax authority, the Agent is hereby authorized (but in no
event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the account of the Borrower and to charge the Borrower's
account therefor. The Borrower shall notify the Agent if any Receivables include
any tax due to any such taxing authority and, in the absence of such notice, the
Agent shall have the right to retain the full proceeds of such Receivables and
shall not be liable for any taxes that may be due from the Borrower by reason of
the sale and delivery creating such Receivables.
SECTION 10.02 Receivables Documentation. The Borrower will, in
addition to the monthly Receivables agings delivered pursuant to this Agreement,
at such intervals as the Agent may require, furnish such further schedules
and/or information as the Agent may require relating to the Receivables,
including, without limitation, sales invoices. In addition, the Borrower shall
notify the Agent of any non-compliance in respect of the representations,
warranties and covenants contained in Section 10.03 hereof. The items to be
provided under this Section 10.02 are to be in form satisfactory to the Agent
and are to be executed and delivered to the Agent from time to time solely for
its convenience in maintaining records of the Collateral; the Borrower's failure
to give any of such items to the Agent shall not affect, terminate, modify or
otherwise limit the Agent's Lien or security interest in the Collateral.
SECTION 10.03 Status of Receivables and Other Collateral. The
Borrower covenants, represents and warrants that: (a) it shall be the sole
owner, free and clear of all Liens except in favor of the Agent or otherwise
permitted hereunder, of and fully authorized to sell, transfer, pledge and/or
grant a security interest in each and every item of said Collateral owned by it;
(b) each Receivable shall be a good and valid account representing an undisputed
bona fide indebtedness incurred or an amount indisputably owed by the Customer
therein named, for a fixed sum as set forth in the invoice relating thereto with
respect to an absolute sale and delivery upon the specified terms of goods sold
by the Borrower, or work, labor and/or services theretofore rendered by the
Borrower; (c) no Receivable is or shall be subject to any defense,
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offset, counterclaim, discount or allowance (as of the time of its creation)
except as may be stated in the invoice relating thereto or discounts and
allowances as may be customary in the Borrower's business; (d) none of the
transactions underlying or giving rise to any Receivable shall violate any
applicable state or federal laws or regulations, and all documents relating to
any Receivable shall be legally sufficient under such laws or regulations and
shall be legally enforceable in accordance with their terms; (e) all documents
and agreements relating to Receivables shall be true and correct and in all
respects what they purport to be; (f) to the best of its knowledge, all
signatures and endorsements that appear on all documents and agreements relating
to Receivables shall be genuine and all signatories and endorsers with respect
thereto shall have full capacity to contract; (g) it shall maintain books and
records pertaining to the Collateral in such detail, form and scope as the Agent
shall require; (h) it will immediately notify the Agent if any accounts arise
out of contracts with the United States or any department, agency or
instrumentality thereof, and will execute any instruments and take any steps
required by the Agent in order that all monies due or to become due under any
such contract shall be assigned to the Agent and notice thereof given to the
United States Government under the Federal Assignment of Claims Act; (i) it
will, immediately upon learning thereof, report to the Agent any material loss
or destruction of, or substantial damage to, any of the Collateral, and any
other matters affecting the value, enforceability or collectability of any of
the Collateral; (j) if any amount payable under or in connection with any
Receivable is evidenced by a promissory note or other instrument, as such terms
are defined in the Uniform Commercial Code, such promissory note or instrument
shall be immediately pledged, endorsed, assigned and delivered to the Agent as
additional collateral; (k) it shall not re-date any invoice or sale or make
sales on extended dating beyond that customary in the industry; (l) it shall
conduct a physical count of its inventory at such intervals as the Agent may
request and promptly supply the Agent with a copy of such counts accompanied by
a report of the value (based on the lower of cost (on a FIFO basis) or market
value) of such inventory; provided, that the Agent shall not request a physical
count for any twelve-month period, more frequently than once during such period
(unless a Default or an Event of Default has occurred and is continuing in which
case as often as the Agent may request) and (m) it is not nor shall it be
entitled to pledge the Lenders' credit on any purchases or for any purpose
whatsoever.
SECTION 10.04 Monthly Statement of Account. The Agent shall render
to the Borrower each month a statement of the Borrower's account, which shall
constitute an account stated and shall be deemed to be correct and accepted by
and be binding upon the Borrower unless the Agent receives a written statement
of the Borrower's exceptions within 30 days after such statement was rendered to
the Borrower.
SECTION 10.05 Collateral Custodian. Upon the occurrence and
continuance of an Event of Default, the Agent may at any time and from time to
time employ and maintain in the premises of the Borrower a custodian selected by
the Agent who shall have full authority to do all acts necessary to protect the
Agent's and Lenders' interests
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and to report to the Agent thereon. The Borrower hereby agrees to cooperate with
any such custodian and to do whatever the Agent may reasonably request to pre
serve the Collateral. All costs and expenses incurred by the Agent by reason of
the employment of the custodian shall be charged to the Borrower's account and
added to the Obligations.
XI. MISCELLANEOUS
SECTION 11.01 Notices. Notices, consents and other communications
provided for herein shall be in writing and shall be delivered or mailed (or in
the case of telex or facsimile communication, delivered by telex, graphic
scanning, telecopier or other telecommunications equipment, with receipt
confirmed) addressed,
(a) if to the Borrower, Guarantors, or Grantors, at 0000 Xx.
Xxxxxxx, Xxxxxxx, Xxxxxx 00000, Attention: Xxxxxx X. Xxxxx, Chief
Executive Officer, with a copy to Xxxxxxxx & Xxxxx, 000 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx X. Xxxxx, Esq.
(b) if to the Agent, at The Chase Manhattan Bank, Middle Market
Structured Finance Division, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Credit Deputy, with a copy to Kaye, Scholer, LLP, et al., at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxxx,
Esq.; and
(c) if to any Lender, at the address set forth below its name in
Schedule 2.01 annexed hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if hand delivered or three days after being sent by registered
or certified mail, postage prepaid, return receipt requested, if by mail, or
upon receipt if by any telex, facsimile or other telecommunications equipment,
in each case addressed to such party as provided in this Section 11.01 or in
accordance with the latest unrevoked direction from such party.
SECTION 11.02 Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower or any of its subsidiaries
herein and in the certificates or other instruments prepared or delivered in
connection with this Agreement, any of the Security Documents, any Guarantee or
any other Loan Document, shall be considered to have been relied upon by the
Lenders and shall survive the making by the Lenders of the Loans and the
execution and delivery to the Lenders of the Notes and occurrence of any other
Credit Event and shall continue in full force and effect as long as the
principal of or any accrued interest on the Notes or any other fee or amount
payable under the Notes or this Agreement or any other Loan Document is
outstanding and unpaid and so long as the Total Commitment has not
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been terminated.
SECTION 11.03 Successors and Assigns; Participations. (a) Whenever
in this Agreement any of the parties hereto is referred to, such reference shall
be deemed to include the successors and permitted assigns of such party; and all
covenants, promises and agreements by or on behalf of the Borrower, any
Guarantor, any Grantor, any ERISA Affiliate, any subsidiary of any thereof, the
Agent or the Lenders, that are contained in this Agreement shall bind and inure
to the benefit of their respective successors and assigns. Without limiting the
generality of the foregoing, the Borrower specifically confirms that any Lender
may at any time and from time to time pledge or otherwise grant a security
interest in any Loan or any Note (or any part thereof) to any Federal Reserve
Bank. The Borrower may not assign or transfer any of its rights or obligations
hereunder without the written consent of all the Lenders.
(b) Each Lender, without the consent of the Borrower or the Agent,
may sell participations to one or more banks or other entities in all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Revolving Credit Commitment or Term Loan
Commitment) and the Loans owing to it and undrawn Letters of Credit and the
Notes held by it); provided, however, that (i) such Lender's obligations under
this Agreement (including, without limitation, its Revolving Credit Commitment
and Term Loan Commitment) shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) the banks or other entities buying participations shall be
entitled to the cost protection provisions contained in Sections 2.10, 2.12 and
2.15 hereof, but only to the extent any of such Sections would be available to
the Lender which sold such participation, and (iv) the Borrower, the Agent and
the other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement;
provided, further, however, that each Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrower, Grantors and the
Guarantors relating to the Loans, including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this
Agreement, other than amendments, modifications or waivers with respect to
decreasing any fees payable hereunder or the amount of principal or the rate of
interest payable on, or the dates fixed for any payment of principal of or
interest on, the Loans or changing or extending the Commitments or the release
of all Collateral.
(c) Each Lender may assign by novation, to any one or more banks or
other entities with the prior written consent of the Borrower (such consent not
to be unreasonably withheld) and with the prior written consent of the Agent,
all or a portion of its interests, rights and obligations under this Agreement
and the other Loan Documents (including, without limitation, all or a portion of
its Revolving Credit Commitment and Term Loan Commitment and the same portion of
the Loans and undrawn Letters of Credit at the time owing to it and the Note or
Notes held by it), provided, however, that (i) each such assignment shall be of
a constant, and not a
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varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement, which shall include the same percentage interest in the
Loans, Letters of Credit and Notes, (ii) the amount of the Revolving Credit
Commitment and Term Loan Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Agent) shall be
in a minimum principal amount of $5,000,000 in the aggregate for the Revolving
Credit Commitment and Term Loan Commitment of such Lender and the amount of the
Revolving Credit Commitment and Term Loan Commitment of such Lender shall not be
less than $5,000,000 or shall be zero, (iii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance, together with any
Note subject to such assignment and a processing and recordation fee of $3,500
and (iv) the assignee, if it shall not be a Lender, shall deliver to the Agent
an Administrative Questionnaire in the form provided to such assignee by the
Agent. Upon such execution, delivery, acceptance and recording and after receipt
of the written consent of the Agent, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (x) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and under the other Loan
Documents and (y) the Lender which is assignor thereunder shall, to the extent
provided in such Assignment and Acceptance, 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 but shall
continue to be entitled to the benefits of Sections 2.10, 2.12, 2.15 and 11.04,
as well as any fees accrued for its account hereunder and not yet paid).
(d) By executing and delivering an Assignment and Acceptance, the
Lender which is assignor thereunder and the assignee thereunder confirm to, and
agree with, each other and the other parties hereto as follows: (i) other than
the representation and warranty that it is the legal and beneficial owner of the
interest being assigned thereunder free and clear of any adverse claim, and that
its Commitment and the outstanding balance of its Loans and participations in
Letters of Credit, in each case without giving effect to assignments thereof
which have not become effective, are as set forth in such Assignment and
Acceptance, such 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, perfection, genuineness, sufficiency or value of this
Agreement, the other Loan Documents or any Collateral with respect thereto or
any other instrument or document furnished pursuant hereto or thereto; (ii) such
Lender makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower, or any Grantor or Guarantor
or the performance or observance by the Borrower or any Grantor or Guarantor of
any of their respective
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obligations under this Agreement, any Guarantees or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance and confirms that it has
received a copy of this Agreement, any Guarantees and of the other Loan
Documents, together with copies of financial statements 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 Agent, such 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 Agent
to take such action as the Agent on its behalf and to exercise such powers under
this Agreement as are delegated to the 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 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 Agent shall maintain at its address referred to in Section
11.01 hereof a copy of each Assignment and Acceptance delivered to it and a
register for the recordation of the names and addresses of the Lenders and the
Revolving Credit Commitment or Term Loan Commitment, as the case may be, 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, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee together with any Note or Notes subject to such
assignment, any processing and recordation fee and, if required, an
Administrative Questionnaire and the written consent to such assignment, the
Agent shall, if such Assignment and Acceptance has been completed and is
precisely in the form of Exhibit F annexed hereto, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Lenders and the Borrower. Within
five (5) Business Days after receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent in exchange for each surrendered
Note or Notes a new Note or Notes to the order of such assignee in an amount
equal to its portion of the Term Loan Commitment and Revolving Credit
Commitment, assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained any Term Loan Commitment and Revolving Credit
Commitment hereunder, a new Note or Notes to the order of the assigning Lender
in an amount equal to the Term Loan Commitment and Revolving Credit Commitment,
retained by it hereunder. Such new Note or Notes shall be in an aggregate
principal
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amount equal to the aggregate principal amount of such surrendered Note or
Notes, or, with respect to the Term Notes, the principal amount of the Term
Notes outstanding at such time as evidenced by the Term Note or Notes, shall be
dated the effective date of such Assignment and Acceptance and shall otherwise
be in substantially the form of Exhibit A and Exhibit B. Notes surrendered to
the Borrower shall be canceled by the Borrower.
Notwithstanding any other provision herein, any Lender may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 11.03, disclose to the assignee or
participant or proposed assignee or participant, any information, including,
without limitation, any Information, relating to the Borrower furnished to such
Lender by or on behalf of the Borrower in connection with this Agreement;
provided, however, that prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential Information relating to the Borrower
received from such Lender.
SECTION 11.04 Expenses; Indemnity. (a) The Borrower agrees to pay
all reasonable out-of-pocket expenses incurred by the Agent in connection with
the preparation of this Agreement and the other Loan Documents or with any
amendments, modifications, waivers, extensions, renewals, renegotiations or
"workouts" of the provisions hereof or thereof (whether or not the transactions
hereby contemplated shall be consummated) or incurred by the Agent or any of the
Lenders in connection with the enforcement or protection of its rights in
connection with this Agreement or any of the other Loan Documents or with the
Loans made or the Notes or Letters of Credit issued hereunder, or in connection
with any pending or threatened action, proceeding, or investigation relating to
the foregoing, including but not limited to the reasonable fees and
disbursements of counsel for the Agent and ongoing field examination expenses
and charges, and, in connection with such enforcement or protection, the
reasonable fees and disbursements of counsel for the Lenders. The Borrower
further indemnifies the Lenders from and agrees to hold them harmless against
any documentary taxes, assessments or charges made by any governmental authority
by reason of the execution and delivery of this Agreement or the Notes.
(b) The Borrower indemnifies the Agent and each Lender and their
respective directors, officers, employees and agents against, and agrees to hold
the Agent, each Lender and each such person harmless from, any and all losses,
claims, damages, liabilities and related expenses, including reasonable counsel
fees and expenses, incurred by or asserted against the Lender or any such person
arising out of, in any way connected with, or as a result of (i) the use of any
of the proceeds of the Loans, (ii) this Agreement, the Guarantees, any of the
Security Documents, Acquisition Documents or the other documents contemplated
hereby or thereby, (iii) the performance by the parties hereto and thereto of
their respective obligations hereunder and thereunder (including but not limited
to the making of the Total Commitment) and
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consummation of the transactions contemplated hereby and thereby, (iv) breach of
any representation or warranty, or (v) any claim, litigation, investigation or
proceedings relating to any of the foregoing, whether or not the Agent, any
Lender or any such person is a party thereto; provided, however, that such
indemnity shall not, as to the Agent or any Lender, apply to any such losses,
claims, damages, liabilities or related expenses to the extent that they result
from the gross negligence or willful misconduct of the Agent or any Lender.
(c) The Borrower indemnifies, and agrees to defend and hold harmless
the Agent and the Lenders and their respective officers, directors,
shareholders, agents and employees (collectively, the "Indemnitees") from and
against any loss, cost, damage, liability, lien, deficiency, fine, penalty or
expense (including, without limitation, reasonable attorneys' fees and
reasonable expenses for investigation, removal, cleanup and remedial costs)
arising from a violation of, or failure to comply with any Environmental Law and
to remove any Lien arising therefrom except to the extent caused by the gross
negligence or willful misconduct of any Indemnitee, which any of the Indemnitees
may incur or which may be claimed or recorded against any of the Indemnitees by
any person.
(d) The provisions of this Section 11.04 shall remain operative and
in full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby, the
repayment of any of the Loans, the invalidity or unenforceability of any term or
provision of this Agreement or the Notes, or any investigation made by or on
behalf of the Agent or any Lender. All amounts due under this Section 11.04
shall be payable on written demand therefor.
SECTION 11.05 Applicable Law. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK
(OTHER THAN THE CONFLICTS OF LAWS PRINCIPLES THEREOF).
SECTION 11.06 Right of Setoff. If an Event of Default shall have
occurred and be continuing, upon the request of the Required Lenders each Lender
shall and is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of the Borrower against any and all of the obligations of the Borrower
now or hereafter existing under this Agreement and the Notes held by such
Lender, irrespective of whether or not such Lender shall have made any demand
under this Agreement or the Notes and although such obligations may be
unmatured. Each Lender agrees to notify promptly the Agent and the Borrower
after any such setoff and application made by such Lender, but the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of each Lender under this Section are in addition to other rights and
remedies (including, without
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limitation, other rights of setoff) which may be available to such Lender.
SECTION 11.07 Payments on Business Days. (a) Should the principal of
or interest on the Notes or any fee or other amount payable hereunder become due
and payable on other than a Business Day, payment in respect thereof may be made
on the next succeeding Business Day (except as otherwise specified in the
definition of "Interest Period"), and such extension of time shall in such case
be included in computing interest, if any, in connection with such payment.
(b) All payments by the Borrower hereunder and all Loans made by the
Lenders hereunder shall be made in lawful money of the United States of America
in immediately available funds at the office of the Agent set forth in Section
11.01 hereof.
SECTION 11.08 Waivers; Amendments. (a) No failure or delay of any
Lender in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Lenders hereunder are cumulative
and not exclusive of any rights or remedies which they may otherwise have. No
waiver of any provision of this Agreement or the Notes nor consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be authorized as provided in paragraph (b) below, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. No notice to or demand on the Borrower in any case
shall entitle it to any other or further notice or demand in similar or other
circumstances. Each holder of any of the Notes shall be bound by any amendment,
modification, waiver or consent authorized as provided herein, whether or not
such Note shall have been marked to indicate such amendment, modification,
waiver or consent.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) change the principal amount of, or extend or advance
the maturity of or the dates for the payment of principal of or interest on, any
Note or reduce the rate of interest on any Note, (ii) increase the Revolving
Credit Commitment or Term Loan Commitment of any Lender or amend or modify the
provisions of this Section, Section 2.06, Section 2.13, Section 4.14 or Section
11.04 hereof or the defini tion of "Required Lenders," or (iii) release any
material portion of Collateral (except permitted dispositions provided for in
Section 7.05 hereof), in each case without the prior written consent of each
Lender affected thereby and provided, further, however, that no such agreement
shall amend, modify or otherwise affect the rights or duties of the Agent under
this Agreement or the other Loan Documents without the written consent of the
Agent. Each Lender and holder of any Note shall be bound by any
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modification or amendment authorized by this Section regardless of whether its
Notes shall be marked to make reference thereto, and any consent by any Lender
or holder of a Note pursuant to this Section shall bind any person subsequently
acquiring a Note from it, whether or not such Note shall be so marked.
(c) In the event that the Borrower requests, with respect to this
Agreement or any other Loan Document, an amendment, modification or waiver and
such amendment, modification or waiver would require the unanimous consent of
all of the Lenders in accordance with Section 11.08(b) above, and such
amendment, modification or waiver is agreed to in writing by the Borrower and
the Required Lenders but not by all of the Lenders, then notwithstanding
anything to the contrary in Sec tion 11.08(b) above, with the written consent of
the Borrower and such Required Lenders, the Borrower and Required Lenders may,
but shall not be obligated to, amend this Agreement without the consent of the
Lender or Lenders who did not agree to the proposed amendment, modification or
waiver (the "Minority Lenders") solely to provide for (i) the termination of the
Revolving Credit Commitment and Term Loan Commitment of each Minority Lender,
(ii) the assignment in accordance with Section 11.03 hereof to one or more
persons of each Minority Lender's interests, rights and obligations under this
Agreement (including, without limitation, all of such Minority Lender's
Revolving Credit Commitment and Term Loan Commitment as well as its portion of
all outstanding Loans and the Note or Notes held by such Minority Lender) and
the other Loan Documents and/or an increase in the Revolving Credit Commitment
and Term Loan Commitment of one or more Required Lenders, in each case so that
after giving effect thereto the Total Revolving Credit Commitment and Total Term
Loan Commitment shall be in the same amounts as prior to the events described in
this paragraph, (iii) the repayment to the Minority Lenders in full of all Loans
outstanding and accrued interest thereon at the time of the assignment and/or
increase in Commitments described in clause (ii) above with the proceeds of
Loans made by such persons who are to become Lenders by assignment or with the
proceeds of Loans made by Required Lenders who have agreed to increase their
Revolving Credit Commitment and/or Term Loan Commitment, (iv) the payment to the
Minority Lenders by the Borrower of all fees and other compensation due and
owing such Minority Lenders under the terms of this Agreement and the other Loan
Documents and (v) such other modifications as the Required Lenders and Borrower
shall deem necessary in order to effect to changes specified in clauses (i)
through (iv) hereof.
SECTION 11.09 Severability. In the event any one or more of the
provisions contained in this Agreement or in the Notes should be held invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
in any way be affected or impaired thereby.
SECTION 11.10 Entire Agreement; Waiver of Jury Trial, etc. (a) This
Agreement, the Notes and the other Loan Documents constitute the entire contract
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between the parties hereto relative to the subject matter hereof. Any previous
agreement among the parties hereto with respect to the Transactions is
superseded by this Agreement, the Notes and the other Loan Documents. Except as
expressly provided herein or in the Notes or the Loan Documents (other than this
Agreement), nothing in this Agreement, the Notes or in the other Loan Documents,
expressed or implied, is intended to confer upon any party, other than the
parties hereto, any rights, remedies, obligations or liabilities under or by
reason of this Agreement, the Notes or the other Loan Documents.
(b) Except as prohibited by law, each party hereto hereby waives any
right it may have to a trial by jury in respect of any litigation directly or
indirectly arising out of, under or in connection with this Agreement, the
Notes, any of the other Loan Documents or the Transactions.
(c) Except as prohibited by law, each party hereto hereby waives any
right it may have to claim or recover in any litigation referred to in paragraph
(b) of this Section 11.10 any special, exemplary, punitive or consequential
damages or any damages other than, or in addition to, actual damages.
(d) Each party hereto (i) certifies that no representative, agent or
attorney of any Lender has represented, expressly or otherwise, that such Lender
would not, in the event of litigation, seek to enforce the foregoing waivers and
(ii) acknowledges that it has been induced to enter into this Agreement, the
Notes or the other Loan Documents, as applicable, by, among other things, the
mutual waivers and certifications herein.
SECTION 11.11 Confidentiality. The Agent and the Lenders agree to
keep confidential (and to cause their respective officers, directors, employees,
agents and representatives to keep confidential) all information, materials and
documents furnished to the Agent or any Lender (the "Information").
Notwithstanding the foregoing, the Agent and each Lender shall be permitted to
disclose Information (i) to such of its officers, directors, employees, agents
and representatives as need to know such Information in connection with its
participation in any of the Transactions or the administration of this Agreement
or the other Loan Documents (subject to confidentiality obligations equivalent
to those set forth herein); (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by any
governmental agency or authority; (iii) to the extent such Information (A)
becomes publicly available other than as a result of a breach of this Agreement,
(B) becomes available to the Agent or such Lender on a non-confidential basis
from a source other than the Borrower, any Guarantor, any Grantor or any of
their respective subsidiaries or (C) was available to the Agent or such Lender
on a non-confidential basis prior to its disclosure to the Agent or such Lender
by the Borrower, any Guarantor, any Grantor or any of their respective
subsidiaries; (iv) to the extent the Borrower, any Guarantor or any of their
respective subsidiaries shall have consented to such disclosure in writing;
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(v) in connection with the sale of any Collateral pursuant to the provisions of
any of the other Loan Documents; or (vi) pursuant to Section 11.03(g) hereof.
SECTION 11.12 Submission to Jurisdiction. (a) Any legal action or
proceeding with respect to this Agreement or the Notes or any other Loan
Document may be brought in the courts of the State of New York or of the United
States of America for the Southern District of New York, and, by execution and
delivery of this Agreement, the Borrower and each of the Guarantors hereby
accept for themselves and in respect of their property, generally and
unconditionally, the jurisdiction of the aforesaid courts.
(b) The Borrower and each of the Guarantors hereby irrevocably
waive, in connection with any such action or proceeding, any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens, which they may now or hereafter have to the
bringing of any such action or proceeding in such respective jurisdictions.
(c) The Borrower and each of the Guarantors hereby irrevocably
consent to the service of process 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 each such person, as the case may be, at its
address set forth in Section 11.01 hereof.
(d) Nothing herein shall affect the right of the Agent or any Lender
to serve process in any other manner permitted by law or to commence legal
proceedings or otherwise proceed against the Borrower or any Guarantor in any
other jurisdiction.
SECTION 11.13 Counterparts; Facsimile Signature. This Agreement may
be executed in counterparts, each of which shall constitute an original but all
of which when taken together shall constitute but one contract, and shall become
effective when copies hereof which, when taken together, bear the signatures of
each of the parties hereto shall be delivered to the Agent. Delivery of an
executed counterpart of a signature page to this Agreement by telecopier shall
be effective as delivery of a manually executed signature page hereto.
SECTION 11.14 Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only and are not to
affect the construction of, or to be taken into consideration in interpreting,
this Agreement.
XII. GUARANTEES
Each Guarantor unconditionally guarantees, as a primary obligor and
not merely as a surety, jointly and severally with each other Guarantor, the due
and punctual payment of the principal of and interest on each of the Notes, when
and as due, whether at maturity, by acceleration, by notice of prepayment or
otherwise, and the
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due and punctual performance of all other Obligations. Each Guarantor further
agrees that the Obligations may be extended and renewed, in whole or in part,
without notice to or further assent from it, and that it will remain bound upon
its guarantee notwithstanding any extension or renewal of any Obligations.
Each Guarantor waives presentment to, demand of payment from and
protest to the Borrower of any of the Obligations, and also waives notice of
acceptance of its guarantee and notice of protest for nonpayment. The
obligations of a Guarantor hereunder shall not be affected by (a) the failure of
any Lender or the Agent to assert any claim or demand or to enforce any right or
remedy against the Borrower or any other Guarantor under the provisions of this
Agreement, the Notes or any of the other Loan Documents or otherwise; (b) any
rescission, waiver, amendment or modification of any of the terms or provisions
of this Agreement, the Notes, any of the other Loan Documents, any guarantee or
any other agreement; (c) the release of any security held by the Agent for the
Obligations or any of them; or (d) the failure of any Lender to exercise any
right or remedy against any other Guarantor of the Obligations.
Each Guarantor further agrees that its guarantee constitutes a
guarantee of payment when due and not of collection, and waives any right to
require that any resort be had by any Lender to any security (including, without
limitation, any Collateral) held for payment of the Obligations or to any
balance of any deposit account or credit on the books of any Lender in favor of
the Borrower or any other person.
The obligations of each Guarantor hereunder shall not be subject to
any reduction, limitation, impairment or termination for any reason, including,
without limitation, any claim of waiver, release, surrender, alteration or
compromise, and shall not be subject to any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity, illegality or
unenforceability of the Obligations or otherwise. Without limiting the
generality of the foregoing, the obligations of each Guarantor hereunder shall
not be discharged or impaired or otherwise affected by the failure of the Agent
or any Lender to assert any claim or demand or to enforce any remedy under this
Agreement, the Notes or under any other Loan Document, any guarantee or any
other agreement, by any waiver or modification of any provision thereof, by any
default, failure or delay, willful or otherwise, in the performance of the
Obligations, or by any other act or omission which may or might in any manner or
to any extent vary the risk of such Guarantor or otherwise operate as a
discharge of such Guarantor as a matter of law or equity.
Each Guarantor further agrees that its guarantee shall continue to
be effective or be reinstated, as the case may be, if at any time payment, or
any part thereof, of principal of or interest on any Obligation is rescinded or
must otherwise be returned by the Agent or any Lender upon the bankruptcy or
reorganization of the Borrower or otherwise.
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Each Guarantor hereby waives and releases all rights of subrogation
against the Borrower and its property and all rights of indemnification,
contribution and reimbursement from the Borrower and its property, in each case
in connection with this guarantee and any payments made hereunder, and
regardless of whether such rights arise by operation of law, pursuant to
contract or otherwise.
XIII. CONFIRMATION OF SECURITY DOCUMENTS
Each of the Loan Parties hereby irrevocably and unconditionally
confirms in favor of the Agent that it consents to the terms and conditions of
this Agreement as it has been amended and restated as of the date hereof, and
that each Security Document to which such Loan Party is a party shall continue
in full force and effect and is and shall continue to be applicable to all of
the Obligations and to this Agreement.
IN WITNESS WHEREOF, the Borrower, the Guarantors, the Agent and the
Lenders have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
AIRXCEL, INC.
By:
-------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Lender
By:
-------------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Agent
By:
-------------------------------------
Name:
Title:
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SCHEDULE 2.01(a)
TERM LOAN COMMITMENTS
Approximate
Term Loan Percentage of Total
Lender Commitment Term Loan Commitment
------ ---------- --------------------
The Chase Manhattan Bank $ 0
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Credit Deputy
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SCHEDULE 2.01(b)
Revolving Credit Commitments
Approximate
Revolving Percentage of
Credit Total Revolving
Lender Commitment Credit Commitment
------ ---------- -----------------
The Chase Manhattan Bank
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 $15,000,000 100%
Attention: Credit Deputy
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SCHEDULE 2.02
Domestic Lending Offices
Lender Domestic Lending Office
------ -----------------------
The Chase Manhattan Bank The Chase Manhattan Bank
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Credit Deputy
101
SCHEDULE 2.03
Eurodollar Lending Offices
Lender Eurodollar Lending Office
------ -------------------------
The Chase Manhattan Bank The Chase Manhattan Bank
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Credit Deputy
102
SCHEDULE 6.05(g)
INVENTORY DESIGNATION
The Chase Manhattan Bank, as Agent
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
We certify, represent to you and agree with you as follows:
1) As of _____________, the value of our Eligible Inventories was as follows:
(DATE)
______________
(a) Raw materials $______ | __% = ___
(b) Finished goods held for sale to
customers $______ | __% = ___
(c) Eligible WIP $______ | __% = ___
Total $______ | __% = ___ (Loan |____________Value)
and/or as shown on attached schedule(s) or paper(s).
2) Such figures are taken from our inventory records, kept in accordance with
generally accepted accounting principles and used in our business or, if so
indicated, taken from a physical inventory. Such figures are at the lower of
cost or market (unless otherwise indicated), with appropriate allowances for
slow moving, returned or second quality goods. This certificate and agreement is
mailed to you upon the understanding that you will rely upon it in making or
continuing loans to us under the Amended and Restated Credit Agreement dated as
of ________ __, 1997 (as amended, modified or supplemented from time to time,
the "Credit Agreement," the terms defined therein being used herein as therein
defined) among the undersigned, the Lenders named therein, the Guarantors named
therein and The Chase Manhattan Bank, as Agent, and/or advances upon our
receivables, or in otherwise extending credit to us.
3) We confirm that the agreements, warranties and representations contained in
such Credit Agreement apply to all such inventories. We hereby pledge and
consign to you, grant you a continuing general lien upon and designate as
subject to your continuing general lien and security interest all of our
inventories, confirming any lien statements or security agreements given you in
respect to same.
4) Your lien and security interest shall attach to such inventories through all
stages of manufacture to and including the finished product, to all accounts
receivable or other proceeds resulting from the sale thereof, to any merchandise
returned to us, and to all inventories acquired by us from time to time in the
future, whether in substitution for or in addition to this merchandise.
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5) Such inventories are located at the following addresses:
Dated: _____________, 19__ AIRXCEL, INC.
By:
------------------------------------
Name:
Title:
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SCHEDULE 6.05(k)
BORROWING BASE CERTIFICATE
TO: The Chase Manhattan Bank, as Agent Date________________
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
SUBJECT: ______________________________________________________
Borrowing Base Certificate #_________________
We hereby certify the following information:
1. Accounts Receivable as of the
date of the last submitted certificate $_____________
+ Sales $_____________
- Collections $_____________
- Credits $_____________
Accounts Receivable as of __/__/__ $_____________
2. Accounts Receivable Aging as of __/__/__
Total A/R Current 31-60 61-90 Over 90
3. Computation of Borrowing Base:
A. Total Accounts Receivable as of __/__/__ $____
Accounts Receivable Over 60 Days $(____)
Contra Receivables $(____)
Receivables from Affiliated
Companies $(____)
Foreign Receivables (excluding $(____)
Canadian receivables or receivables
secured by L/C, insurance or
receivables covered under
guaranty)
Chargebacks, Debit Memos $(____)
Credits in Past Due $(____)
COD Accounts $(____)
Unassigned Accounts $(____)
Rebate Reserves per GL $(____)
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Total Deductions $(____)
B. Net Eligible Receivables $____
Availability (85% Advance) $____
C. Total Eligible Raw Materials/Finished
Goods Inventory (as of __/__/__) $____
Less: Slow Moving/Obsolete (past
Six months) $(____)
Decals/ Labels Due $(____)
Packaging $(____)
Other Locations not covered
under Credit Documents
(Schedule I of Security Agreement) $(____)
Reworks $(____)
Instruction/Warranty Cards $(____)
GL Reserves $(____)
Net Eligible Raw Materials/
Finished Goods Inventory $_____
Availability (60% Advance) $_____
D. Total Eligible WIP Inventory $_____
(comprised solely of WIP
consisting of component parts
used in assembly of air
conditioning units)
Net Eligible WIP Inventory $_____
(65% of Net)
Availability (lesser of $7,500,000
or 60% Advance) $_____
E. Cash Collateral $_____
F. Total Availability on Accounts Receivable,
Inventory and Cash $_____
F. Loans and Letters of Credit
Presently Outstanding $_____
Amount Requested/Paid $_____
Total Outstanding Loans and
Letters of Credit of this Date $_____
Net Available (if negative, our
check for said amount is attached) $_____
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4. Comments or Other Information:
The undersigned hereby represents and warrants that this is a correct statement
regarding the status of accounts receivable and inventory assigned to The Chase
Manhattan Bank, as Agent, and that the figures set forth herein are completely
accurate. The undersigned further warrants and represents that the Borrower is
in complete compliance with all the terms and conditions contained in the
agreements between us. The undersigned further understands that your loans to
the Borrower will be based upon your reliance on the information contained
herein.
AIRXCEL, INC.
By:
------------------------------------
Name:
Title:
ATTEST:
--------------------------- ----------------------------
(Title) (Title)
