EXECUTION COPY
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CREDIT AGREEMENT
by and among
LUIGINO'S, INC.
as Borrower
LASALLE BANK NATIONAL ASSOCIATION,
as Agent
U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent
and
VARIOUS BANKS
as named herein
as Banks
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Dated September 27, 2002
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.............................................................................. 1
Section 1.1. DEFINITIONS...................................................................... 1
ARTICLE II CREDIT FACILITIES....................................................................... 20
Section 2.1. Commitments as to Revolving Facility and Swingline Facility....................... 20
Section 2.2. Commitments as to Term Facility................................................... 21
Section 2.3. Procedures for Borrowing Under the Revolving Facility and the
Swingline Facility.............................................................. 21
Section 2.4. Converting Floating Rate Fundings to Eurodollar Fundings;
Procedures...................................................................... 23
Section 2.5. Procedures At End of an Interest Period........................................... 23
Section 2.6. Setting and Notice of Rates....................................................... 24
Section 2.7. Commitment to Issue Letters of Credit............................................. 24
Section 2.8. Interest On Notes................................................................. 28
Section 2.9. Obligation to Repay Advances; Representations..................................... 29
Section 2.10. Notes; Amortization............................................................... 30
Section 2.11. Interest Due Dates................................................................ 31
Section 2.12. Computation of Interest and Fees.................................................. 31
Section 2.13. Fees.............................................................................. 31
Section 2.14. Use of Proceeds................................................................... 32
Section 2.15. Voluntary Reduction or Termination of the Commitments;
Prepayments..................................................................... 32
Section 2.16. Payments.......................................................................... 34
Section 2.17. Taxes............................................................................. 35
Section 2.18. Increased Costs; Capital Adequacy; Funding Exceptions............................. 36
Section 2.19. Funding Losses.................................................................... 40
Section 2.20. Right of Banks to Fund Through Other Offices...................................... 40
Section 2.21. Discretion of Banks as to Manner of Funding....................................... 40
Section 2.22. Conclusiveness of Statements; Survival of Provisions.............................. 41
ARTICLE III CONDITIONS OF LENDING.................................................................. 41
Section 3.1. Conditions Precedent to the Initial Advance....................................... 41
Section 3.2. Conditions Precedent to All Advances.............................................. 43
ARTICLE IV REPRESENTATIONS AND WARRANTIES.......................................................... 43
Section 4.1. Legal Existence and Power; Name; Chief Executive Office........................... 43
Section 4.2. Authorization for Borrowings and Letters of Credit; No Conflict
as to Law or Agreements......................................................... 44
Section 4.3. Legal Agreements.................................................................. 44
Section 4.4. Subsidiaries...................................................................... 44
Section 4.5. Financial Condition; No Adverse Change............................................ 44
Section 4.6. Litigation........................................................................ 44
Section 4.7. Regulation U................................................................... 45
Section 4.8. Taxes.......................................................................... 45
Section 4.9. Titles and Liens............................................................... 45
Section 4.10. Plans.......................................................................... 45
Section 4.11. Default........................................................................ 46
Section 4.12. Environmental Compliance....................................................... 46
Section 4.13. Submissions to Banks........................................................... 46
Section 4.14. Financial Solvency............................................................. 46
Section 4.15. Information Regarding Real Estate.............................................. 47
Section 4.16. Intellectual Property Rights................................................... 47
ARTICLE V AFFIRMATIVE COVENANTS OF THE BORROWER................................................. 48
Section 5.1. Reporting Requirements......................................................... 48
Section 5.2. Books and Records; Inspection and Examination.................................. 51
Section 5.3. Compliance With Laws........................................................... 52
Section 5.4. Payment of Taxes and Other Claims.............................................. 52
Section 5.5. Maintenance of Properties...................................................... 52
Section 5.6. Insurance...................................................................... 52
Section 5.7. Preservation of Legal Existence................................................ 52
Section 5.8. Creation of New Credit Parties and Subsidiaries................................ 53
Section 5.9. Minimum Debt Service Coverage Ratio............................................ 53
Section 5.10. Maximum Senior Leverage Ratio.................................................. 53
Section 5.11. Maximum Total Leverage Ratio................................................... 53
Section 5.12. Minimum Tangible Net Worth..................................................... 54
Section 5.13. Establishment and Maintenance of Lockbox and Cash
Management Arrangements...................................................... 54
Section 5.14. Landlord Waivers............................................................... 54
ARTICLE VI NEGATIVE COVENANTS................................................................... 54
Section 6.1. Liens.......................................................................... 55
Section 6.2. Indebtedness................................................................... 56
Section 6.3. Guaranties..................................................................... 57
Section 6.4. Investments.................................................................... 57
Section 6.5. Restricted Payments............................................................ 58
Section 6.6. Restrictions On Sale and Issuance of Subsidiary Stock.......................... 58
Section 6.7. Transactions With Affiliates................................................... 58
Section 6.8. Sale or Transfer of Assets; Suspension of Business Operations.................. 58
Section 6.9. Consolidation and Merger; Asset Acquisitions................................... 59
Section 6.10. Sale and Leaseback............................................................. 59
Section 6.11. Restrictions On Nature of Business............................................. 59
Section 6.12. Accounting..................................................................... 59
Section 6.13. Capital Expenditures........................................................... 59
Section 6.14. Hazardous Substances........................................................... 59
Section 6.15. Subordinated Debt.............................................................. 60
Section 6.16. Amendment of Indenture and Consulting Agreement................................ 60
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ARTICLE VII EVENTS OF DEFAULT; RIGHTS AND REMEDIES ........................................................... 60
Section 7.1. Events of Default .......................................................................... 60
Section 7.2. Rights and Remedies ........................................................................ 63
ARTICLE VIII AGREEMENT AMONG BANKS AND AGENT ................................................................. 64
Section 8.1. Authorization; Powers; Agent for Collateral Purposes ....................................... 64
Section 8.2. Application of Proceeds .................................................................... 64
Section 8.3. Exculpation ................................................................................ 65
Section 8.4. Use of the Term "Agent" .................................................................... 65
Section 8.5. Reimbursement for Costs and Expenses ....................................................... 66
Section 8.6. Payments Received Directly by Banks ........................................................ 66
Section 8.7. Indemnification ............................................................................ 66
Section 8.8. Agent and Affiliates ....................................................................... 67
Section 8.9. Credit Investigation ....................................................................... 67
Section 8.10. Defaults ................................................................................... 67
Section 8.11. Obligations Several ........................................................................ 67
Section 8.12. Sale or Assignment; Addition of Banks ...................................................... 68
Section 8.13. Participation .............................................................................. 69
Section 8.14. Withholding Tax Exemption .................................................................. 69
Section 8.15. Borrower not a Beneficiary or Party ........................................................ 70
ARTICLE IX MISCELLANEOUS ..................................................................................... 70
Section 9.1. No Waiver; Cumulative Remedies ............................................................. 70
Section 9.2. Amendments, Requested Waivers, Etc ......................................................... 70
Section 9.3. Addresses for Notices, Etc ................................................................. 70
Section 9.4. Costs and Expenses ......................................................................... 71
Section 9.5. Indemnity .................................................................................. 71
Section 9.6. Execution in Counterparts .................................................................. 72
Section 9.7. Governing Law; Jurisdiction; Waiver of Jury Trial .......................................... 72
Section 9.8. Integration; Inconsistency ................................................................. 73
Section 9.9. Agreement Effectiveness .................................................................... 73
Section 9.10. Advice From Independent Counsel ............................................................ 73
Section 9.11. Judicial Interpretation .................................................................... 73
Section 9.12. Binding Effect; No Assignment by Borrower .................................................. 73
Section 9.13. Severability of Provisions ................................................................. 73
Section 9.14. Headings ................................................................................... 74
Section 9.15 Counterparts ............................................................................... 74
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Exhibits and Schedules
EXHIBIT A Borrowing Base Certificate
EXHIBIT B Revolving Note
EXHIBIT C Swingline Note
EXHIBIT D Term Note
EXHIBIT E Notice of Borrowing under Revolving Facility
EXHIBIT F Notice of Borrowing under Swingline Facility
EXHIBIT G Notice of Conversion
EXHIBIT H Notice of Rollover
EXHIBIT I Certificate of Officer as to Annual Financial Statements
EXHIBIT J Certificate of Officer as to Quarterly Financial Statements
EXHIBIT K Assignment Certificate
Schedule 4.1 Doing Business Names; Business Locations
Schedule 4.4 Subsidiaries
Schedule 4.6 Litigation
Schedule 4.10 ERISA Plans
Schedule 4.12 Environmental Matters
Schedule 4.15 Information Regarding Real Estate
Schedule 4.16 Intellectual Property
Schedule 6.1 Outstanding Liens
Schedule 6.2 Outstanding Indebtedness
Schedule 6.3 Outstanding Guaranties
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CREDIT AGREEMENT
This Credit Agreement ("Credit Agreement") is dated as of
September 27, 2002, by and among LUIGINO'S, INC., a Minnesota corporation (the
"Borrower"), LASALLE BANK NATIONAL ASSOCIATION, a national banking association
("LaSalle Bank"), in its capacity as administrative agent for the Banks (defined
below)(in such capacity, the "Agent") and each bank named on the execution pages
hereof and such other banks as may from time to time become a party to this
Agreement pursuant to the terms and conditions of Article VIII hereof (each a
"Bank" and collectively the "Banks").
BACKGROUND INFORMATION
The Borrower has requested that the Banks extend certain
revolving and term credit facilities to the Borrower.
The Banks are willing to extend the requested credit facilities
to the Borrower pursuant to the terms and subject to the conditions set forth in
this Agreement.
ACCORDINGLY, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Borrower, the Agent and the Banks hereby agree as follows:
ARTICLE I
Definitions
Section 1.1 . Definitions. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in the preamble have the meanings therein
assigned to them;
(b) the terms defined in this Article have the meanings assigned
to them in this Article, and include the plural as well as the
singular; and
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP.
"Accounts" means the aggregate unpaid obligations of customers
and other account debtors of the Borrower arising out of the sale of goods or
the rendition of services by the Borrower on an open account or deferred payment
basis.
"Adjustment Date" has the meaning specified in Section 8.12.
"Advance" means a loan of funds by a Bank to the Borrower under a
Facility.
"Affiliate" or "Affiliates" means any Person controlled by,
controlling or under common control with the subject Person, including (without
limitation) any Subsidiary of the subject Person. For purposes of this
definition, "control," when used with respect to any specified Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall in no event
include the Agent or any Bank.
"Agency Fee" has the meaning specified in Section 2.13(d).
"Agent" has the meaning specified in the preamble.
"Agreement" means this Credit Agreement and all exhibits,
amendments and supplements hereto and modifications hereof.
"Applicant" has the meaning specified in Section 8.12.
"Assignment Certificate" has the meaning specified in Section
8.12.
"Bank" or "Banks" has the meaning specified in the preamble.
"Base Rate" means, at any time, the higher of (a) the Federal
Funds Rate plus one half of one percent (0.50%), and (b) the Prime Rate.
"Borrower" has the meaning specified in the preamble.
"Borrowing" means a borrowing by the Borrower under a Facility,
consisting of the aggregate of all Advances made by the Banks to the Borrower
pursuant to a request under Section 2.3.
"Borrowing Base" means, at any time, the lesser of:
(a) the Revolving Commitment Amount, or
(b) the sum of:
(i) 80% of all Eligible Accounts less the Dilution Reserve;
and
(ii) 50% of all Eligible Inventory;
in any case, computed in accordance with the most recent Borrowing Base
Certificate submitted to, and accepted by, the Agent.
"Borrowing Base Certificate" means a certificate in substantially
the form attached hereto as Exhibit A, duly completed and certified by the
Borrower, pursuant to which the Borrower sets forth its Accounts, Eligible
Accounts, Inventory and Eligible Inventory and the applicable Borrowing Base as
of a particular date.
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"Business Day" means any day other than a Saturday or Sunday on
which national banks are required to be open for business in Minneapolis,
Minnesota and Chicago, Illinois and, in addition, if such day relates to a
Eurodollar Funding or fixing of a Eurodollar Rate, a day on which dealings in
U.S. dollar deposits are carried on in the London interbank eurodollar market.
"Capital Adequacy Rule" has the meaning specified in Section
2.18(b)(ii).
"Capital Adequacy Rule Change" has the meaning specified in
Section 2.18(b)(iii).
"Capital Expenditures" means the cost of any real property, plant
and equipment, and any other fixed asset or improvement, or replacement,
substitution or addition thereto which is required by GAAP to be included in or
reflected as property, plant and equipment or similar fixed assets on the
balance sheet of a Person, having useful life of more than one (1) year, or any
other payment which is otherwise required to be capitalized, including as a cost
the aggregate amount of expenses, charges, goods exchanged or services rendered
or payments due or arising in connection with the direct or indirect acquisition
of such assets or improvements, replacements, substitutions or additions by way
of increased product or service charges or offset items or barter exchange or in
connection with Capital Leases, and the entire principal amount of any Debt
assumed or incurred in connection therewith, in each case without duplication;
provided, however, that Capital Expenditures shall not include expenditures made
in connection with the replacement, substitution or restoration of assets to the
extent financed (i) from insurance proceeds (or other similar recoveries) paid
on account of the loss of or damage to the assets being replaced or restored or
(ii) with awards of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.
"Capital Expenditures Threshold" means $12,000,000.
"Capital Lease" means, with respect to any Person, any lease of
(or other agreement conveying the right to use) any real or personal property of
such Person that, in conformity with GAAP, is accounted for as a capital lease
on the balance sheet of such Person.
"Capital Lease Payments" of any Person means, with respect to the
applicable Covenant Computation Period, the total expenditures by such Person in
respect of Capital Leases during such period, as determined in accordance with
GAAP.
"Cash Interest Expense" of any Person means, with respect to the
applicable Covenant Computation Period, the total gross interest expense on all
Debt of such Person during such period and shall in any event include, without
limitation and without duplication, (a) accrued interest (whether or not paid)
on all Debt, (b) that portion of any Capital Lease Payment which would
constitute imputed interest as determined in accordance with GAAP, and (c) all
fees and charges with respect to letters of credit issued for the account of
such Person.
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"Change of Control" means any event, circumstance or occurrence
that results in (a) Xxxx X. Xxxxxxxx, or his spouse, his lineal descendants
(including adopted persons), the trustee or trustees of any trust of which one
or more of the foregoing are the only beneficiaries, any partnership of which
one or more of the foregoing are the only partners or the estate or direct heirs
of any of the foregoing natural persons in the event of their death, not being
the owner of at least fifty-one percent (51%) of all issued and outstanding
capital stock of the Borrower entitled to vote or otherwise not having operating
control of the Borrower, or (b) the Borrower not being the owner of all issued
and outstanding capital stock or other equity interests entitled to vote of each
other Credit Party.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means all personal property of each Credit Party in
which the Agent, on behalf of the Banks, has been granted a security interest or
lien pursuant to any Security Document, together with all substitutions and
replacements for and products and proceeds of any of the foregoing.
"Commitment" means, with respect to each Bank, such Bank's
Revolving Commitment, Swingline Commitment or Term Commitment, as the context
may require.
"Commitment Amount" means the Revolving Commitment Amount,
Swingline Commitment Amount or Term Commitment Amount, as the context requires.
"Commitment Fee" has the meaning specified in Section 2.13(b).
"Consolidated Group " means the Borrower and its consolidated
Subsidiaries, including, without limitation, each Guarantor.
"Consulting Agreement" means the Consulting Agreement dated as of
January 1, 1999 between the Borrower and Xxxxxxxx International as amended by
the First Amendment to Consulting Agreement dated December 30, 1999, the Second
Amendment to Consulting Agreement dated May 31, 2000, the Third Amendment to
Consulting Agreement dated December 6, 2000, and the Fourth Amendment to
Consulting Agreement dated March 7, 2002.
"Covenant Computation Date" means the last day of each fiscal
quarter of the Borrower, commencing on October 6, 2002.
"Covenant Computation Period" means the four (4) consecutive
fiscal quarters immediately preceding and ending on a Covenant Computation Date.
"Credit Party" or "Credit Parties" means the Borrower or a
Guarantor, or all of them collectively, as the context may require, including
without limitation each additional Person which becomes a Guarantor after the
Closing Date pursuant to Section 5.9 hereof.
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"Debt" of any Person means, without duplication (a) all
obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (d) all obligations of such Person as lessee under Capital Leases
which have been or should be recorded as liabilities on a balance sheet of such
Person in accordance with GAAP, (e) all indebtedness secured by a lien on any
asset of such Person, whether or not such indebtedness has been assumed by such
Person, (f) all indebtedness and other obligations of others guaranteed by such
Person, (g) all obligations of such Person to pay the deferred purchase price
for goods or services, whether or not delivered or accepted (i.e., take-or-pay
and similar obligations), excluding trade accounts payable incurred in the
ordinary course of business, (h) all obligations of such Person under any
interest rate swap program or any similar agreement, arrangement or undertaking
relating to fluctuations in interest rates, (i) all obligations, contingent or
otherwise, with respect to the face amount of letters of credit (whether or not
drawn) and bankers' acceptances issued for the account of such Person, and (j)
all obligations of such Person to advance funds to, or purchase assets, property
or services from, any other Person in order to maintain the financial condition
of such Person.
"Debt Service Coverage Ratio" of a Person means, with respect to
the applicable Covenant Computation Period, the ratio of (a) such Person's
EBITDA, less such Person's Capital Expenditures (up to the Capital Expenditures
Threshold) and Permitted Distributions, to (b) the sum of (i) all scheduled
principal payments on the Funded Debt of such Person due during such Covenant
Computation Period or on demand, and (ii) such Person's Cash Interest Expense.
"Default" means an event that, with giving of notice or passage
of time or both, would constitute an Event of Default.
"Default Percentage" means, as to any Bank, a fraction determined
as of the Revolving Commitment Termination Date, the numerator of which equals
the principal amount of all Obligations owed to such Bank on such date (which,
with respect to LaSalle, shall include all Permitted Rate Hedging Obligations
owing to it in respect of the termination of all Permitted Rate Hedging
Arrangements, assuming that all Permitted Rate Hedging Arrangements were
terminated on and as of the Revolving Commitment Termination Date) and the
denominator of which equals the principal amount of all Obligations owed to all
Banks on such date (which shall include all Permitted Rate Hedging Obligations
owing in respect of the termination of all Permitted Rate Hedging Arrangements,
assuming that all Permitted Rate Hedging Arrangements were terminated on and as
of the Revolving Commitment Termination Date).
"Default Rate" shall have the meaning specified in Section
2.8(c).
"Dilution Reserve" means, as of any date of determination, the
product of (a) the Borrower's Eligible Accounts as of such date, multiplied by
(b) a percentage determined
5
by the Agent in its commercially reasonable discretion from time to time based
on the results of field examinations conducted by its employees and agents (such
percentage to be communicated by the Agent to the Borrower and the Banks in
writing as and when it changes), such percentage to initially be eleven and
nine-tenths percent (11.9%).
"EBITDA" of any Person means, with respect to the applicable
Covenant Computation Period, the sum of such Person's (a) Pre-Tax Net Income,
(b) Interest Expense and (c) depreciation, depletion, and amortization of
tangible and intangible assets, before (i) income from discontinued operations,
(ii) minority interests, and (iii) extraordinary gains and losses, in each case
for such period, computed and calculated in accordance with GAAP.
"Eligible Accounts" means all unpaid Accounts arising from a bona
fide sale and shipment of Inventory or the rendition of services by the Borrower
in the ordinary course of business on usual and ordinary terms, evidenced by an
invoice and net of any applied or unapplied credits or other allowance (with any
such unapplied credits or other allowances being applied to the most current
Account of the Borrower); provided, however, that the following shall in no
event be deemed Eligible Accounts:
(a) that portion of Accounts over ninety (90) days past invoice
date or sixty (60) days past the specified due date;
(b) Accounts owed by any unit of government, whether foreign or
domestic, unless such Account is a U.S. Government obligation and the
Agent's pledge and assignment of such Account has been confirmed by
duly acknowledged and accepted documents complying with the Assignment
of Claims Act which have been delivered to and approved by the Agent;
(c) that portion of Accounts that are conditional, disputed or
subject to a known claim of offset or a contra account or with respect
to which a defense, counterclaim, right to discount or deduction has
been asserted;
(d) Accounts which are owed by an account debtor whose principal
corporate office is located outside the United States or Canada;
(e) Accounts owed by an account debtor that is the subject of
dissolution, liquidation, bankruptcy proceedings or has gone out of
business;
(f) Accounts owed by an Affiliate of the Borrower (except that
Accounts owed by Xxxxxxxxx Foods, Inc., a Manitoba corporation, shall
not be considered ineligible) and Accounts with account debtors with
whom the Borrower is obligated with respect to goods sold or services
rendered by such account party;
(g) Accounts not subject to a duly perfected security interest in
favor of the Agent or which are subject to any lien, security interest
or claim in favor of any Person other than the Agent;
6
(h) that portion of Accounts that has been restructured,
extended, amended or modified as a result of an account debtor's
inability to pay;
(i) that portion of Accounts constituting a finance charge,
service charge or interest; and
(j) Accounts owed by an account debtor, regardless of whether
otherwise eligible, if twenty-five percent (25%) or more of the total
amount due under Accounts from such account debtor is ineligible under
clauses (a), (c) or (h) above.
"Eligible Inventory" means Inventory, at the lower of cost or
market value as determined in accordance with GAAP; provided, however, that the
following shall in no event be deemed Eligible Inventory:
(a) Inventory that is (i) in transit; (ii) located at any
warehouse or leased premises with respect to which the Agent has not
received an acceptable warehouseman or landlord release and waiver or
other similar documentation acceptable to the Agent; (iii) located
outside of the United States; (iv) covered by any negotiable or
non-negotiable warehouse receipt, xxxx of lading or other document of
title; or (v) on consignment to or from any other Person or subject to
any bailment of any kind or description;
(b) Inventory older than 365 days;
(c) Inventory that, in the commercially reasonable judgment of
the Agent, is or has become unmerchantable, unmarketable, spoiled,
damaged, obsolete or otherwise unfit for sale;
(d) Inventory constituting work-in-process;
(e) Inventory located in vending machines or consigned to vending
machine owners or operators;
(f) Inventory which is not owned by the Borrower free and clear
of all liens, claims and rights of others (including any rights of
reclamation or equitable claims), is subject to a security interest in
favor of any Person other than the Agent or in which the Agent does
not have a valid and perfected first priority security interest;
(g) Inventory which constitutes "xxxx and hold" goods, except to
the extent the Account arising from such "xxxx and hold" sale is not
otherwise included as an Eligible Account; and
(h) Otherwise Eligible Inventory for which a
landlord/warehouseman lien waiver has not been delivered as required
in Section 5.14.
"Environmental Laws" has the meaning specified in Section 4.12.
7
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"ERISA Affiliate" means, with respect to a Credit Party, any
trade or business (whether or not incorporated) that is, along with such Credit
Party, a member of a controlled group of corporations or a controlled group of
trades or businesses, as described in sections 414(b) and 414(c), respectively,
of the Code.
"Eurodollar Advance" means any Advance which bears interest at a
rate determined by reference to a Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to an Interest Period,
the LIBOR Index Rate or if the LIBOR Index Rate cannot be determined, the rate
per annum equal to the rate (rounded up if necessary to the nearest one
one-hundredth of one percent (1/100%)) determined by the Agent in accordance
with Section 2.6 to be a rate at which U.S. dollar deposits are offered to major
banks in the London interbank eurodollar market for funds to be made available
on the first day of such Interest Period and maturing at the end of such
Interest Period.
"Eurodollar Funding" means any Funding which bears interest at a
rate determined by reference to a Eurodollar Rate, including Eurodollar
Advances.
"Eurodollar Rate" means, with respect to an Interest Period, the
rate obtained by adding (a) the applicable Margin to (b) the rate obtained by
dividing (i) the applicable Eurodollar Base Rate by (ii) a percentage equal to
one (1.00) minus the applicable percentage (expressed as a decimal) prescribed
by the Board of Governors of the Federal Reserve System (or any successor
thereto) for determining the maximum reserve requirements applicable to
Eurodollar fundings (currently referred to as "Eurocurrency Liabilities" in
Regulation D) or any other maximum reserve requirements applicable to a member
bank of the Federal Reserve System with respect to such eurodollar fundings.
"Event of Default" has the meaning specified in Section 7.1.
"Excess Cash Flow" of any Person means, with respect to the
applicable Covenant Computation Period, such Person's EBITDA minus such Person's
(a) Capital Expenditures, (b) Permitted Distributions, (c) principal of Funded
Debt due on demand or during such Covenant Computation Period, and (d) Interest
Expense.
"Facility" means the Revolving Facility, the Swingline Facility
or Term Facility, as the context requires.
"Federal Funds Rate" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Bank of New York (including any
such successor publication, "H.15(519)") on the preceding Business Day opposite
the caption "Federal Funds (Effective)"; or, if for any relevant day such rate
is not so published on any such preceding Business Day, the rate
8
for such day will be the arithmetic mean as determined by the Agent of the rates
for the last transaction in overnight federal funds arranged prior to 9:00 a.m.
(New York City time) on that day by each of the three leading brokers of federal
funds transactions in New York City, as selected by the Agent in its discretion.
"Fee Letter" means that certain fee letter by and between the
Agent and the Borrower dated as of July 9, 2002.
"Financial Covenants" means the covenants contained in Sections
5.9 through 5.12 and 6.13.
"Floating Rate" means an annual rate at all times equal to the
sum of (a) the Base Rate and (b) the applicable Margin, which Floating Rate
shall change when and as the Base Rate changes.
"Floating Rate Advance" means any Advance which bears interest at
a rate determined by reference to the Floating Rate.
"Floating Rate Funding" means any Funding which bears interest at
a rate determined by reference to the Floating Rate, including Floating Rate
Advances.
"Funded Debt" of any Person means all interest bearing Debt of
such Person.
"Funding" means a designated portion of outstanding principal
indebtedness evidenced by a Note which bears interest at a rate determined by
reference to a particular Eurodollar Rate or Floating Rate, as the case may be.
"GAAP" means generally accepted accounting principles as in
effect from time to time applied on a basis consistent with the accounting
practices applied in the financial statements referred to in Section 4.5.
"Guarantor" or "Guarantors" means, as the context shall require,
The All American Gourmet Company, a Delaware corporation, together with each and
every additional Person which shall execute and deliver a Guaranty for the
benefit of the Banks pursuant to Section 5.9 hereof.
"Guaranty" or "Guaranties" means a guaranty of a Guarantor made
in favor of the Agent guarantying payment of all Obligations, or all of them
collectively, as the context may require, and all amendments and supplements
thereto and modifications thereof.
"Hazardous Substance" means any asbestos, urea-formaldehyde,
polychlorinated biphenyls, nuclear fuel or material, chemical waste, radioactive
material, explosives, known carcinogens, petroleum products and by-products and
other dangerous, toxic or hazardous pollutants, contaminants, chemicals,
materials or substances listed or identified in, or regulated by, any
Environmental Laws.
"Indemnitees" has the meaning specified in Section 9.5.
9
"Indenture" means the Indenture dated as of February 4, 1999
relating to the Borrower's Series A and Series B 10% Senior Subordinated Notes
due 2006 with U.S. Bank Trust National Association as trustee thereunder, along
with all amendments, supplements and other modifications from time to time made
thereto.
"Intellectual Property Rights" means all actual or prospective
rights arising in connection with any intellectual property or other proprietary
rights, including all rights arising in connection with copyrights, patents,
service marks, trade dress, trade secrets, trademarks, trade names or mask
works.
"Interest Expense" of any Person means, with respect to the
applicable Covenant Computation Period, the total gross interest expense on all
Debt of such Person during such period and shall in any event include, without
limitation and without duplication, (a) accrued interest (whether or not paid)
on all Debt, (b) the amortization of Debt discounts, (c) the amortization of all
fees payable in connection with the incurrence of Debt to the extent included in
interest expense, (d) that portion of any Capital Lease Payment which would
constitute imputed interest as determined in accordance with GAAP and (e) all
fees and charges with respect to letters of credit issued for the account of
such Person.
"Interest Period" means, relative to any Eurodollar Funding, the
period beginning on (and including) the date on which such Eurodollar Funding is
made, or continued as, or converted into, a Eurodollar Funding pursuant to
Sections 2.3, 2.4 or 2.5 and shall end on (but exclude) the day which
numerically corresponds to such date one (1), two (2), three (3) or six (6)
months thereafter (or, if such month has no numerically corresponding day, on
the last Business Day of such month), as the Borrower may select in its relevant
notice pursuant to Sections 2.3, 2.4, or 2.5; provided, however, that:
(a) no more than five (5) different Interest Periods may be
outstanding at any one time with respect to the Term Facility and no
more than five (5) different Interest Periods may be outstanding at
any one time with respect to the Revolving Facility;
(b) if an Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a month, in which case such Interest Period
shall end on the next preceding Business Day);
(c) no Interest Period applicable to a Funding for a Facility may
end later than the applicable Maturity Date for such Facility; and
(d) in no event shall the Borrower select Interest Periods with
respect to Fundings under the Term Facility which, in the aggregate,
would require payment of funding losses under Section 2.19 in order to
make payments of regularly scheduled installments of principal
thereunder.
10
"Inventory" means all inventory of the Borrower, as that term is
defined in the UCC, whether now owned or hereafter acquired, whether consisting
of finished or unfinished goods, processed or unprocessed products, inputs,
parts or components, supplies or materials, whether acquired, held or furnished
for sale, for lease or under service contracts or for manufacture or processing,
and wherever located.
"LaSalle Bank" has the meaning specified in the preamble.
"Letter of Credit" has the meaning specified in Section 2.7.
"Letter of Credit Amount" means the sum of (a) the aggregate
remaining available amount of all issued and outstanding Letters of Credit, and
(b) amounts drawn under Letters of Credit for which the Letter of Credit Bank
has not been reimbursed with proceeds of a Borrowing or otherwise.
"Letter of Credit Bank" means LaSalle Bank (or, as applicable,
one of its affiliates), in its separate capacity as issuer of Letters of Credit
for the account of the Borrower pursuant to Section 2.7.
"Letter of Credit Fee" has the meaning specified in Section
2.7(b).
"Letter of Credit Sublimit" means five million dollars
($5,000,000).
"Level I Status" means a period of time during which the Senior
Leverage Ratio of the Consolidated Group is greater than 1.50 to 1.00.
"Level II Status" means a period of time during which the Senior
Leverage Ratio of the Consolidated Group is greater than 1.00 to 1.00, but less
than or equal to 1.50 to 1.00.
"Level III Status" means a period of time during which the Senior
Leverage Ratio of the Consolidated Group is equal to or less than 1.00 to 1.00.
"LIBOR Index Rate" means relative to any Interest Period, the
rate per annum determined by the Agent as of approximately 11:00 a.m. London
time on the date two (2) Business Days before the commencement of such Interest
Period by reference to the British Bankers' Association Interest Settlement
Rates for deposits in dollars offered on the London interbank dollar market for
a period corresponding to the term of such Interest Period and in an amount
comparable to the aggregate amount of the relevant Funding (as set forth by the
Bloomberg Information Service or any successor thereto or any other service
selected by the Agent that has been nominated by the British Bankers'
Association as an authorized information vendor for the purpose of displaying
such rates).
"Licensed Intellectual Property" has the meaning specified in
Section 4.16(c).
11
"Loan Documents" means this Agreement, the Notes, the Guaranties,
each and every application or other agreement pursuant to which a Letter of
Credit is issued and the Security Documents.
"Local Time" means the local time of day in Minneapolis,
Minnesota.
"Margin" means, with respect to computation of the applicable
interest rate on Fundings under a Facility, or the applicable Letter of Credit
Fee or Commitment Fee, as the case may be, the applicable increment set forth
and described in the table below, established as of the last day of each fiscal
quarter according to the then applicable Status; provided, however, that any
adjustment in the applicable Margin shall not become effective until the first
calendar day of the first month immediately following receipt by the Agent of
financial statements relating to the last day of such fiscal quarter pursuant to
Section 5.1 hereof. If financial statements of the Consolidated Group necessary
to establish the appropriate Margin hereunder are not received by the Agent on
or prior to the date required pursuant to Section 5.1 hereof, the applicable
Margin shall be determined as if Level I Status were in effect and such Level I
Status shall remain in effect until such time as the required financial
statements are received:
STATUS EURODOLLAR BASE RATE COMMITMENT LETTER OF
RATE MARGIN MARGIN FEE MARGIN CREDIT FEE
MARGIN
Level I 2.25% 0.50% 0.50% 2.25%
Status
Level II 2.00% 0.25% 0.375% 2.00%
Status
Level III 1.75% 0.00% 0.25% 1.75%
Status
provided, however, that for the period commencing on the Closing Date and
continuing to the date the Agent receives the Consolidated Group's financial
statements and related officer's certificates specified in Section 5.1(b)
demonstrating the financial performance of the Consolidated Group for the fiscal
quarter ending October 6, 2002, the applicable Margins shall be determined as if
Level II Status were in effect, regardless of the Senior Leverage Ratio of the
Consolidated Group for such period.
"Master Letter of Credit Agreement" shall have the meaning
specified in Section 2.7(a).
"Material Adverse Effect" means, with respect to any event or
circumstance, a material adverse effect on:
(a) the business, financial condition, operations or prospects of
the Credit Parties, taken as a whole;
12
(b) the ability of a Credit Party to perform its obligations
under any Loan Document to which it is a party;
(c) the validity, enforceability or collectibility of any Loan
Document; or
(d) the status, existence, perfection, priority or enforceability
of any lien or security interest granted pursuant to any Security
Document.
"Maturity Date" means January 4, 2006.
"Multiemployer Plan" means a multiemployer plan (as defined in
Section 4001(a)(3) of ERISA) to which any Credit Party or any ERISA Affiliate
contributes or is obligated to contribute.
"Note" or "Notes" means a Revolving Note, Swingline Note or a
Term Note, or all such Notes collectively, as the context may require.
"Obligations" means each and every Debt, liability and other
obligation of every type and description arising under or in connection with any
of the Loan Documents which any Credit Party may now or at any time hereafter
owe to the Agent, one or more Banks or the Agent and one or more Banks, whether
such debt, liability or obligation now exists or is hereafter created or
incurred, whether it is direct or indirect, due or to become due, absolute or
contingent, primary or secondary, liquidated or unliquidated, or sole, joint,
several or joint and several, and including specifically, but not limited to,
the Letter of Credit Amount, any Permitted Rate Hedging Obligations and all
indebtedness, liabilities and obligations of the Borrower arising under or
evidenced by the Notes.
"Off-the-shelf Software" has the meaning specified in Section
4.16(c).
"Origination and Structuring Fees" has the meaning specified in
Section 2.13(a).
"Outstanding Obligations" means, as of the date of determination,
the outstanding principal amount of all Obligations.
"Owned Intellectual Property" has the meaning specified in
Section 4.16(a).
"Xxxxxxxx International" means Xxxxxxxx International Ltd., Inc.,
a Florida corporation.
"Payee" has the meaning specified in Section 2.17.
"Pension Plan" means a pension plan (as defined in Section 3(2)
of ERISA) maintained for employees of any Credit Party or any ERISA Affiliate
and covered by Title IV of ERISA.
13
"Percentage" means, with respect to a Facility and as to any
Bank, the percentage set forth opposite such Bank's signature on the execution
pages hereof, or below such Bank's signature on any Assignment Certificate
executed by such Bank, in relation to such Facility, representing the ratio of
such Bank's Revolving Commitment, Swingline Commitment or Term Commitment, as
the case may be, to the Revolving Commitment Amount, Swingline Commitment Amount
or Term Commitment Amount, respectively.
"Permitted Acquisition" means an acquisition (whether by merger,
consolidation or asset purchase) by the Borrower complying with each of the
following:
(a) such acquisition is completed with the unanimous approval and
recommendation of the board of directors of the Person to be acquired;
(b) the Borrower or a wholly-owned Subsidiary of the Borrower is
the survivor of the merger or consolidation (or transaction similar in
effect to a merger or consolidation);
(c) the Person to be acquired is in a similar line of business to
the Borrower;
(d) the Person to be acquired is profitable on a pro-forma basis
(taking into consideration any immediate cost takeouts);
(e) no Event of Default or Default has occurred on and as of the
date such acquisition is consummated or would result therefrom;
(f) the purchase price for such acquisition (including all
assumed indebtedness and the market value of any non-cash
consideration) does not exceed seven million five-hundred thousand
dollars ($7,500,000) and such purchase price, when added to the
purchase price of all Permitted Acquisitions completed in the same
calendar year as the subject acquisition would not exceed ten million
dollars ($10,000,000) in the aggregate;
(g) the Borrower, has provided the Agent with a certification
which, after giving effect to such acquisition, demonstrates pro-forma
compliance with all Financial Covenants; and
(h) the Borrowing Base, after giving effect to such acquisition,
exceeds the sum of the Revolving Facility Outstanding Amount and the
Swingline Facility Outstanding Amount by not less than ten million
dollars ($10,000,000).
"Permitted Distributions" means Permitted Tax Distributions and
Permitted Excess Cash Flow Distributions.
"Permitted Excess Cash Flow Distributions" means:
14
(a) With respect to the Consolidated Group's fiscal year ending
December 29, 2002:
(i) If the Consolidated Group's EBITDA for such period is
greater than or equal to forty-nine million two-hundred thousand
dollars ($49,200,000), a one time payment of four million dollars
($4,000,000), distributable in a single distribution not less
than thirty (30) Business Days after the Consolidated Group's
audited financial statements for such fiscal year demonstrating
compliance with this subsection (a)(i) have been delivered to the
Agent in accordance with Section 5.1(a) hereof; or
(ii) If the Consolidated Group's EBITDA for such period is
less than forty-nine million two-hundred thousand dollars
($49,200,000), 50% of the Consolidated Group's Excess Cash Flow
for such fiscal year, distributable in a single distribution not
less than thirty (30) Business Days after the Consolidated
Group's audited financial statements for such fiscal year have
been delivered to the Agent in accordance with Section 5.1(a)
hereof; and
(b) With respect to each fiscal year of the Consolidated Group
ending on or after January 1, 2004, 50% of the Consolidated Group's
Excess Cash Flow for the immediately preceding fiscal year,
distributable in a single distribution not less than thirty (30)
Business Days after the Consolidated Group's audited financial
statements for the applicable fiscal year have been delivered to the
Agent in accordance with Section 5.1(a) hereof.
"Permitted Liens" has the meaning specified in Section 6.1.
"Permitted Management Fee Payments" means payments by the
Borrower of the management fees and out-of-pocket expenses payable by one or
more of the Credit Parties to Xxxxxxxx International pursuant to the terms of
the Consulting Agreement.
"Permitted Rate Hedging Arrangements" means any arrangement of a
Credit Party with LaSalle or any affiliate of LaSalle for the hedging of
interest rate or foreign exchange rate exposure, including, but not limited to,
the hedging arrangements between the Borrower and Bank One, N.A. assumed by
LaSalle in connection with the execution and delivery of this Agreement.
"Permitted Rate Hedging Obligations" means any debt, liability or
other obligation of any Credit Party owing to LaSalle or an affiliate of LaSalle
with respect to any Permitted Rate Hedging Arrangements.
"Permitted Tax Distributions" means distributions declared and
paid by the Borrower to its shareholders, or which could have been declared and
paid by the Borrower, in an amount not to exceed Subchapter S Tax Liabilities.
15
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Plan" means an employee benefit plan (as defined in Section 3(3)
of ERISA) maintained for employees of any Credit Party or ERISA Affiliate.
"Pre-Tax Net Income" of a Person means, with respect to the
applicable Covenant Computation Period, such Person's pre-tax net income, as
determined in accordance with GAAP, before any extraordinary or non-recurring
items.
"Prime Rate" means, for any day, the rate of interest in effect
for such day as publicly announced from time to time by the Agent as its "prime
rate" (whether or not such rate is actually charged by the Agent), or if the
Agent ceases to announce such a rate so designated, any similar successor rate
designated by the Agent in its reasonable discretion. Any change in the Prime
Rate announced by the Agent shall take effect at the opening of business on the
day specified in the public announcement of such change.
"Reportable Event" means a reportable event (as defined in
Section 4043 of ERISA), other than an event for which the 30-day notice
requirement under ERISA has been waived in regulations issued by the Pension
Benefit Guaranty Corporation.
"Required Banks" means, at any time, one or more of the Banks
holding at least sixty-six and two thirds percent (66.67%) of the Commitments,
or, if the Commitments have been terminated or have expired, one or more of the
Banks having at least sixty-six and two thirds percent (66.67%) of the
Outstanding Obligations.
"Required Payment" has the meaning specified in Section 2.16(c).
"Return" has the meaning specified in Section 2.18(b)(i).
"Revolving Advance" means a loan of funds by a Bank to the
Borrower under the Revolving Facility, including both Floating Rate Advances and
Eurodollar Advances made thereunder.
"Revolving Commitment" means, with respect to each Bank, the
amount of the Revolving Commitment set forth opposite such Bank's name on the
execution pages hereof, or below such Bank's signature on an Assignment
Certificate executed by such Bank, unless such amount is adjusted pursuant to
Section 2.15(a), in which event it means the amount to which said amount is
adjusted pursuant thereto, or as the context may require, the obligation of such
Bank to make Revolving Advances and provide for issuance of Letters of Credit,
as contemplated in Section 2.1(a).
"Revolving Commitment Amount" shall mean thirty-two million
five-hundred thousand dollars ($32,500,000), being the maximum amount of the
Revolving Commitments of all Banks, in the aggregate, to make Revolving Advances
and provide for the issuance of
16
Letters of Credit pursuant to Section 2.1(a), subject to adjustment in
accordance with Section 2.15(a).
"Revolving Commitment Termination Date" means the earlier of (a)
the Maturity Date with respect to the Revolving Facility or (b) the date on
which the Revolving Commitments are terminated pursuant to Section 7.2 or
reduced to zero pursuant to Section 2.15(a).
"Revolving Facility" means the revolving credit facility being
made available to the Borrower by the Banks pursuant to Section 2.1(a).
"Revolving Facility Outstanding Amount" means, as of the date of
determination, the sum of (a) the aggregate principal amount of all outstanding
Revolving Advances, and (b) the Letter of Credit Amount.
"Revolving Note" means a promissory note of the Borrower payable
to a Bank in the amount of such Bank's Revolving Commitment, in substantially
the form of Exhibit B (as such promissory note may be amended, extended or
otherwise modified from time to time), evidencing the aggregate indebtedness of
the Borrower to such Bank resulting from such Bank's Percentage of each
Borrowing under the Revolving Facility, and also means each promissory note
accepted by such Bank from time to time in substitution therefor or in renewal
thereof.
"Security Agreement" or "Security Agreements" means the security
agreement of a Credit Party in favor of the Agent for the benefit of the Banks
pursuant to which such Credit Party grants the Agent a security interest in
substantially all the personal property of such Credit Party to secure payment
of the Obligations, or all of them collectively, as the context may require, and
all amendments and supplements thereto and modifications thereof.
"Security Documents" means each Security Agreement, Trademark
Security Agreement and each and every additional agreement entered into by any
Credit Party for the benefit of the Banks to secure payment of the Obligations
or otherwise relating to any Collateral.
"Senior Funded Debt" of a Person means all Funded Debt of such
Person not constituting Subordinated Debt.
"Senior Leverage Ratio" of a Person means, with respect to any
Covenant Computation Date, the ratio of (a) such Person's Senior Funded Debt, to
(b) such Person's EBITDA.
"Status" means the financial condition of the Consolidated Group
determined in accordance with the definitions of "Level I Status," "Level II
Status," and "Level III Status."
17
"Subchapter S Tax Liabilities" means an amount equal to the
product of (a) the Pre-Tax Net Income of the Borrower for the period of
determination and (b) forty percent (40%).
"Subordinated Debt" means all indebtedness, if any (including
principal, interest and fees thereon), subordinated to payment of the
Obligations pursuant to a Subordination Agreement.
"Subordination Agreement" or "Subordination Agreements" means one
or more of (a) the subordination provisions and all related provisions of the
Indenture (including, without limitation, all provisions of Article 10 and
Section 4.09 thereof), and (b) any agreement (in form and substance satisfactory
to the Agent) executed and delivered by a holder of Subordinated Debt in favor
of the Agent for the benefit of the Banks pursuant to which such holder
subordinates payment of the Subordinated Debt held by it to payment of the
Obligations, or all of them collectively, as the context may require, and all
amendments and supplements thereto and modifications thereof.
"Subsidiary" of a Person means any corporation, partnership or
limited liability company of which more than fifty percent (50%) of the
outstanding equity or membership interests or shares of capital stock having
general voting power under ordinary circumstances to elect a majority of the
board of directors (or other governing body) of such entity, (irrespective of
whether or not at the time stock or membership interests of any other class or
classes shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned by such Person, by such
Person and one or more Subsidiaries of such Person, or by one or more other
Subsidiaries of such Person.
"Supplemental Fee Letter" means that certain fee letter by and
between the Agent and the Borrower dated as of September 27, 2002.
"Swingline Advance" means an Advance by the Swingline Bank to the
Borrower under the Swingline Facility.
"Swingline Bank" means LaSalle Bank.
"Swingline Commitment" means, with respect to the Swingline Bank,
the amount of the Swingline Commitment set forth opposite such Bank's name on
the execution pages hereof, or below such Bank's signature on an Assignment
Certificate executed by such Bank, unless such amount is reduced pursuant to
Section 2.15(b), in which event it means the amount to which such amount is
reduced pursuant thereto, or as the context may require, the obligation of such
Bank to make Swingline Advances as contemplated in Section 2.1(b).
"Swingline Commitment Amount" shall mean five million dollars
($5,000,000), being the maximum amount of the Swingline Commitment of the
Swingline Bank to make Swingline Advances pursuant to Section 2.1(b) , subject
to reduction in accordance with Section 2.15(b), which commitment constitutes a
part of the Revolving Commitment of the Swingline Bank.
18
"Swingline Facility" means the revolving credit facility being
made available to the Borrower by the Swingline Bank pursuant to Section 2.1(b).
"Swingline Facility Outstanding Amount" means, as of the date of
determination, the aggregate principal amount of all outstanding Swingline
Advances.
"Swingline Note" means a promissory note of the Borrower payable
to the Swingline Bank in the amount of the Swingline Commitment, in
substantially the form of Exhibit C (as such promissory note may be amended,
extended or otherwise modified from time to time), evidencing the aggregate
indebtedness of the Borrower to the Swingline Bank resulting from each Borrowing
under the Swingline Facility, and also means each promissory note accepted by
the Swingline Bank from time to time in substitution therefor or in renewal
thereof.
"Tangible Net Worth" of a Person means, on the applicable
Covenant Computation Date, the difference between (a) the sum of (i) the
tangible assets of such Person, calculated in accordance with GAAP after
deducting adequate reserves in such case where, in accordance with GAAP, a
reserve is proper, plus (ii) such Person's Subordinated Debt, and (b) the total
liabilities of such Person; provided, however, that in no event shall there be
included as tangible assets, patents, trademarks, trade names, copyrights,
licenses, goodwill, receivables due from, or investments in, Affiliates of said
Person, deposits, deferred charges or treasury stock or any securities or debt
instruments of such Person, or any other securities unless such securities are
readily marketable on a public exchange in the United States of America or are
entitled to be used as a credit against federal income tax liabilities, and any
other assets designated from time to time by the Agent, in its reasonable
discretion, as intangible assets.
"Taxes" has the meaning specified in Section 2.17.
"Term Advance" means a loan of funds by a Bank to the Borrower
under the Term Facility, including both Floating Rate Advances and Eurodollar
Advances thereunder.
"Term Commitment" means, with respect to each Bank, the amount of
the Term Commitment set forth opposite such Bank's name on the execution pages
hereof, or below such Bank's signature on an Assignment Certificate, or as the
context may require, the obligation of such Bank to make Term Advances to the
Borrower under Section 2.2.
"Term Commitment Amount" means forty-two million five-hundred
thousand dollars ($42,500,000), being the maximum amount of the Term Commitments
of all Banks, in the aggregate, to make Term Advances to the Borrower pursuant
to Section 2.2.
"Term Facility" means the term loan facility being made available
to the Borrower by the Banks pursuant to Section 2.2.
"Term Note" means a promissory note of the Borrower payable to a
Bank in the amount of such Bank's Term Commitment, in substantially the form of
Exhibit D (as
19
such promissory note may be amended, extended or otherwise modified from time to
time), evidencing the aggregate indebtedness of the Borrower to such Bank
resulting from such Bank's Percentage of the Term Facility, and also means each
other promissory note accepted from time to time in substitution therefor or in
renewal thereof.
"Total Leverage Ratio" of any Person means, with respect to any
Covenant Computation Date, the ratio of (a) the Funded Debt of such Person to
(b) the EBITDA of such Person.
"Trademark Security Agreement" or "Trademark Security Agreements"
means a separate security agreement of a Credit Party in favor of the Agent for
the benefit of the Banks pursuant to which such Credit Party grants the Agent a
security interest in all trademarks now or hereafter held by such Credit Party
to secure payment of the Obligations, or all of them collectively, as the
context may require, and all amendments and supplements thereto and
modifications thereof.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the state designated in Section 9.7(a) as the state whose laws shall
govern this Agreement, or in any other state whose laws are held to govern this
Agreement or any portion hereof.
ARTICLE II
CREDIT FACILITIES
Section 2.1 Commitments as to Revolving Facility and Swingline
Facility.
(a) Revolving Facility. Each Bank hereby agrees, on the terms and
subject to the conditions herein set forth, including specifically
satisfaction of all conditions set forth in Section 3.2 hereof, to
make Revolving Advances to the Borrower from time to time during the
period from the date hereof to and including the Revolving Commitment
Termination Date, in an aggregate amount at any time outstanding not
to exceed such Bank's Percentage of each Borrowing from time to time
requested by the Borrower under the Revolving Facility; provided,
however, that no Bank shall be required to fund its Percentage of any
such Borrowing if, after giving effect to such Borrowing, either (i)
the sum of the Revolving Facility Outstanding Amount and the Swingline
Facility Outstanding Amount would exceed the Borrowing Base, or (ii)
with respect to each Bank, the sum of such Bank's Percentage of the
Revolving Facility Outstanding Amount, and its Percentage, if any, of
the Swingline Facility Outstanding Amount would exceed such Bank's
Revolving Commitment. Within the above limits, the Borrower may obtain
Revolving Advances, prepay Revolving Advances in accordance with the
terms hereof and reborrow Revolving Advances in accordance with the
applicable terms and conditions of this Article II.
(b) Swingline Facility. The Swingline Bank hereby agrees, on the
terms and subject to the conditions herein set forth, including
specifically satisfaction of all conditions set forth in Section 3.2
hereof, to make Swingline Advances to the
20
Borrower from time to time during the period from the date hereof to
and including the Revolving Commitment Termination Date, in an
aggregate amount at any time outstanding not to exceed the Swingline
Commitment Amount, notwithstanding that, after making the requested
Swingline Advances, the sum of the Swingline Bank's Percentage of the
Revolving Facility Outstanding Amount and its Percentage of the
Swingline Facility Outstanding Amount may exceed the Swingline Bank's
Revolving Commitment; provided, however, that the Swingline Bank shall
have no obligation to make a Swingline Advance if, after giving effect
to the requested Swingline Advance, the sum of the Revolving Facility
Outstanding Amount and the Swingline Facility Outstanding Amount would
exceed the Borrowing Base. Within the above limits, the Borrower may
obtain Swingline Advances, repay Swingline Advances in accordance with
the terms hereof and reborrow Swingline Advances in accordance with
the applicable terms and conditions of this Article II.
Section 2.2 Commitments as to Term Facility. Each Bank hereby
agrees, on the terms and subject to the conditions herein set forth, to make a
single Term Advance to the Borrower on the Closing Date in an amount equal to
such Bank's Term Commitment. Initially, the Term Advances shall be funded as
Floating Rate Fundings, subject to conversion pursuant to Section 2.4. The Term
Facility is not a revolving facility and, once the initial Term Advance is made
by a Bank, such Bank shall have no further obligation to make any additional
Term Advances to the Borrower under the Term Facility, whether or not any
amounts are repaid thereunder.
Section 2.3 Procedures for Borrowing Under the Revolving Facility
and the Swingline Facility.
(a) Borrowing Under Revolving Facility. Each Borrowing under the
Revolving Facility shall be funded by the Banks as either Floating
Rate Advances or Eurodollar Advances, as the Borrower shall specify in
the related notice of proposed Borrowing. Floating Rate Advances and
Eurodollar Advances may be outstanding at the same time. It is
understood, however, that the principal amount of any Borrowing under
the Revolving Facility shall be in an amount equal to or greater than
$1,000,000 or a higher integral multiple of $100,000. The Borrower
shall give notice to the Agent of each proposed Borrowing under the
Revolving Facility not later than 11:00 a.m., Local Time, on a
Business Day which, in the case of a Borrowing that is to bear
interest initially at a Floating Rate, is the proposed date of such
Borrowing or, in the case of a Borrowing that is to bear interest
initially at a Eurodollar Rate, is at least three (3) Business Days
prior to the proposed date of such Borrowing. Each such notice shall
be effective upon receipt by the Agent, shall be in writing or by
telephone or telecopy transmission, to be confirmed in writing by the
Borrower if so requested by the Agent (in the form of Exhibit E), and
shall specify whether the Borrowing is to bear interest initially at a
Floating Rate or a Eurodollar Rate, and in the case of a Borrowing
that is to bear interest initially at a Eurodollar Rate, shall specify
the Interest Period to be applicable thereto. Promptly upon receipt of
such notice (but in no event later than 12:00 p.m., Local Time, with
respect to a Floating Rate Advance,
21
and the close of business, with respect to a Eurodollar Advance, in
each case on the Business Day of receipt of such notice), the Agent
shall advise each Bank of the proposed Borrowing. At or before 1:00
p.m., Local Time, on the date of the requested Borrowing, each Bank
shall provide the Agent at the principal office of the Agent in
Chicago, Illinois, with immediately available funds covering such
Bank's Percentage of such Borrowing. Subject to satisfaction of the
conditions precedent set forth in Article III with respect to such
Borrowing, the Agent shall pay over proceeds of such Borrowing to the
Borrower, in immediately available funds, prior to the close of
business, Local Time, on the date of the requested Borrowing.
(b) Borrowing Under Swingline Facility. Each Borrowing under the
Swingline Facility shall be funded by the Swingline Bank as a Floating
Rate Advance. It is understood, however, that the principal amount of
any Borrowing under the Swingline Facility shall be in an amount equal
to $100,000 or a higher integral multiple of $100,000. The Borrower
shall give notice to the Swingline Bank of each proposed Borrowing
under the Swingline Facility not later than 1:00 p.m., Local Time, on
the proposed date of any such Borrowing. Each such notice shall be
effective upon receipt by the Swingline Bank, shall be in writing or
by telephone or telecopy transmission, to be confirmed in writing by
the Borrower if so requested by the Swingline Bank (in the form of
Exhibit F). Subject to satisfaction of the conditions precedent set
forth in Article III with respect to such Borrowing, the Swingline
Bank shall pay over the proceeds of such Borrowing to the Borrower, in
immediately available funds, prior to close of business, Local Time,
on the date of the requested Borrowing.
(c) Refunding of Swingline Advances. The Swingline Bank may, at
any time and from time to time (and, in any event, shall do so no less
frequently than weekly), in its sole and absolute discretion and
otherwise at the Borrower's request, on behalf of the Borrower (and
the Borrower hereby irrevocably authorizes the Swingline Bank to so
act on its behalf), request a Borrowing under the Revolving Facility
pursuant to Section 2.3(a) above (which initially shall be a Floating
Rate Advance, but may be converted to a Eurodollar Advance pursuant to
Section 2.4) in an amount equal to the Swingline Facility Outstanding
Amount on the date such request is made. Unless any of the events
described in Sections 7.1(f) or (g) shall have occurred (in which
event the procedures of Section 2.3(d) below shall apply) and
regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Advance are then satisfied,
each Bank shall provide the Agent at the principal office of the Agent
in Chicago, Illinois, with immediately available funds covering such
Bank's Percentage of such requested Borrowing not later than 1:00
p.m., Local Time, on the date of such Borrowing. The proceeds of any
such Borrowing shall be immediately applied by the Agent to all
Swingline Advances then outstanding.
(d) Participation in Swingline Advances. If, prior to repayment
of outstanding Swingline Advances with a Borrowing under the Revolving
Facility
22
pursuant to Section 2.3(c), one of the events described in Sections
7.1(f) or (g) shall have occurred with respect to the Borrower, each
Bank will, on the date such Borrowing under the Revolving Facility was
to have been made to the Borrower, purchase from the Swingline Bank an
undivided participation interest in all outstanding Swingline Advances
in an amount equal to the product of its Revolving Facility Percentage
multiplied by such outstanding Swingline Advances. Upon request, each
Bank will promptly transfer to the Swingline Bank, in immediately
available funds, the amount of its participation and upon receipt
thereof the Swingline Bank will deliver to such participating Bank a
certificate of participation evidencing such participation interest,
in form and content acceptable to the Swingline Bank and such
participating Bank, dated the date of receipt of such funds and in
such amount.
(e) Obligations Relating to Swingline Facility Unconditional.
Each Bank's obligation to make Revolving Advances in accordance with
Section 2.3(c) and to purchase participating interests in accordance
with Section 2.3(d) shall be absolute and unconditional and shall not
be affected by any of the following: (i) any setoff, counterclaim,
recoupment, defense or other right which such Bank may have against
the Swingline Bank, any Credit Party or any other Person for any
reason whatsoever; (ii) the occurrence or continuance of a Default or
Event of Default; (iii) any inability of the Borrower or any other
Credit Party to satisfy the conditions precedent to a Borrowing as set
forth in this Agreement on the date upon which such participating
interest is to be purchased; and (iv) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing. If any Bank does not make available to the Swingline Bank
the amount required pursuant to Section 2.3(c) or (d), as the case may
be, the Swingline Bank shall be entitled to recover such amount on
demand from such Bank, together with interest for each day from the
date of non-payment until such amount is paid in full at the Federal
Funds Rate then in effect.
Section 2.4. Converting Floating Rate Fundings to Eurodollar
Fundings; Procedures. So long as no Default or Event of Default shall exist, the
Borrower may convert all or any part of any outstanding Floating Rate Funding
under the Revolving Facility or the Term Facility into a Eurodollar Funding by
giving notice to the Agent of such conversion not later than 11:00 a.m., Local
Time, on a Business Day which is at least three (3) Business Days prior to the
date of the requested conversion. Each such notice shall be irrevocable, shall
be effective upon receipt by the Agent, shall be in writing or by telephone or
telecopy transmission, to be confirmed in writing by the Borrower if so
requested by the Agent (in the form of Exhibit G), shall specify the date and
amount of such conversion, the total amount of the Funding to be so converted
and the Interest Period therefor. Each conversion of a Funding shall be on a
Business Day, and the aggregate amount of each such conversion of a Floating
Rate Funding to a Eurodollar Funding shall be in an amount equal to $1,000,000
or a higher integral multiple of $1,000,000.
Section 2.5. Procedures at End of an Interest Period. Unless the
Borrower requests a new Eurodollar Funding in accordance with the procedures set
forth below, or
23
prepays the principal of an outstanding Eurodollar Funding at the expiration of
an Interest Period, each Bank shall automatically and without request of the
Borrower convert each Eurodollar Funding to a Floating Rate Funding on the last
day of the relevant Interest Period. So long as no Default or Event of Default
shall exist, the Borrower may cause all or any part of any outstanding
Eurodollar Funding to continue to bear interest at a Eurodollar Rate after the
end of the then applicable Interest Period by notifying the Agent not later than
11:00 a.m., Local Time, on a Business Day which is at least three (3) Business
Days prior to the first day of the new Interest Period. Each such notice shall
be in writing or by telephone or telecopy transmission, to be confirmed in
writing by the Borrower if so requested by the Agent (in the form of Exhibit H),
shall be irrevocable, effective when received by the Agent, and shall specify
the first day of the applicable Interest Period, the amount of the expiring
Eurodollar Funding to be continued and the Interest Period therefor. Each new
Interest Period shall begin on a Business Day and the amount of each Funding
bearing a new Eurodollar Rate shall be in an amount equal to $1,000,000 or a
higher integral multiple of $1,000,000.
Section 2.6. Setting and Notice of Rates. The applicable
Eurodollar Rate for each Interest Period shall be determined by the Agent on the
second Business Day prior to the beginning of such Interest Period, whereupon
notice thereof (which may be by telephone) shall be given by the Agent to the
Borrower and each Bank. Each such determination of the applicable Eurodollar
Rate shall be conclusive and binding upon the parties hereto, in the absence of
demonstrable error. The Agent, upon written request of the Borrower or any Bank,
shall deliver to the Borrower or such requesting Bank a statement showing the
computations used by the Agent in determining the applicable Eurodollar Rate
hereunder.
Section 2.7. Commitment to Issue Letters of Credit. The Letter of
Credit Bank agrees, from the date hereof to and including the Revolving
Commitment Termination Date, to issue one or more letters of credit for the
account of the Borrower, and the Banks agree to participate in the risk of such
letters of credit issued for the account of the Borrower hereunder, on the terms
and subject to the conditions set forth below:
(a) Each letter of credit issued pursuant to this Section 2.7,
shall be referred to herein as a "Letter of Credit." No Letter of
Credit shall be issued by the Letter of Credit Bank if, after giving
effect to the issuance of such Letter of Credit (i) the Letter of
Credit Amount would exceed the Letter of Credit Sublimit or (ii) the
sum of the Revolving Facility Outstanding Amount and the Swingline
Facility Outstanding Amount would exceed the Borrowing Base. The
expiration date of any Letter of Credit shall not be later than the
earlier of (A) one year after the date of issuance of such Letter of
Credit, or (B) twenty-five (25) days prior to the Revolving Commitment
Termination Date. The Borrower may renew any Letter of Credit with a
one year tenor for additional one year periods upon five (5) days
prior written notice to the Letter of Credit Bank, so long as the
expiry date thereof complies with the preceding sentence upon such
renewal. Each Letter of Credit will be issued under and pursuant to
the terms and conditions of a Master Letter of Credit Agreement by and
between the Borrower and the Letter of Credit Bank (the "Master Letter
of Credit
24
Agreement") governing all Letters of Credit to be issued hereunder,
and upon no less than five (5) Business Days' prior written
application from the Borrower to the Letter of Credit Bank as
contemplated therein. The application requesting issuance of a Letter
of Credit shall be on the Letter of Credit Bank's standard form or
such other form as may be agreed to by the Letter of Credit Bank and
the Borrower. In the event that any of the terms of such application
are inconsistent with the terms and provisions of this Agreement, the
terms and provisions of this Agreement shall govern. The Letter of
Credit Bank shall not be obligated to issue a Letter of Credit unless
on the date of issuance all of the conditions precedent specified in
Section 3.2 shall have been satisfied as fully as if the issuance of
such Letter of Credit were a Revolving Advance. Promptly after
issuance of a Letter of Credit pursuant hereto, the Agent shall so
advise each Bank of all relevant information with respect thereto.
(b) The Borrower agrees to pay to the Agent for the pro rata
account of all Banks, a commission with respect to each Letter of
Credit (herein, the "Letter of Credit Fee") computed as the product of
(i) an annual rate equal to the applicable Margin for Letters of
Credit in effect on the date payment of the Letter of Credit Fee
becomes due and payable hereunder, and (ii) the face amount of the
applicable Letter of Credit outstanding from time to time. The Letter
of Credit Fee shall be payable quarterly in arrears on the last day of
each calendar quarter, or upon such other terms as may be agreed upon
by the Borrower and the Required Banks at the time of issuance of any
such Letter of Credit; provided, however, that from and after the
occurrence of an Event of Default and continuing thereafter until such
Event of Default shall be remedied to the written satisfaction of the
Required Banks, the applicable Letter of Credit Fee payable hereunder
with respect to each Letter of Credit shall be equal to the sum of the
product of (i) the sum of (1) the Margin otherwise in effect with
respect to such Letter of Credit, and (2) two percent (2%), and (ii)
the face amount of the applicable Letter of Credit outstanding from
time to time. If any Letter of Credit Fee so paid is greater than the
amount that actually accrues (as a result of cancellation of the
Letter of Credit prior to the end of its stated term), the Borrower
shall be entitled to a credit for the amount of any such Letter of
Credit Fee not earned. Letter of Credit Fees payable by the Borrower
to the Banks in accordance with this subsection (b) shall be shared
among the Banks pro rata in accordance with their respective
Percentages of the Revolving Facility.
(c) Upon issuance of a Letter of Credit hereunder, and without
any further notice to any Bank, each Bank shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the
Letter of Credit Bank an undivided participating interest in the
Letter of Credit Bank's risk and obligation under such Letter of
Credit and in the obligation of the Letter of Credit Bank to honor
drafts thereunder, and in the amount of any drawing thereunder, and in
all rights of the Letter of Credit Bank to obtain reimbursement from
the Borrower in the amount of such drawing, and all other rights of
the Letter of Credit Bank with respect thereto, in an amount equal to
the product of (i) the maximum amount available to be drawn under such
Letter of Credit and the amount of any drawing thereunder,
respectively
25
and (ii) the Percentage of the Revolving Facility of such Bank.
Whenever a draft submitted under a Letter of Credit is paid by the
Letter of Credit Bank, the Letter of Credit Bank shall so notify the
Agent, the Agent shall so notify each Bank and shall request immediate
reimbursement from the Borrower for the amount of the draft. If
sufficient funds are not immediately paid to the Agent by the
Borrower, the Borrower shall be deemed to have requested a Borrowing
under the Revolving Facility pursuant to Section 2.3(a) and the Banks
shall be notified of such request in accordance with Section 2.3(a)
and shall fund such request for a Borrowing as Floating Rate Advances
(in accordance with their respective Percentages) for purposes of
reimbursing the Letter of Credit Bank for the amount of such draft so
paid by the Letter of Credit Bank (less any amounts realized by the
Letter of Credit Bank pursuant to the second sentence of this Section
2.7(c)). If for any reason or under any circumstance (including,
without limitation, the occurrence of a Default or Event of Default or
the failure to satisfy any of the conditions set forth in Section 3.2)
the Banks do not make such Revolving Advances as contemplated above
and the Borrower does not otherwise reimburse the Letter of Credit
Bank for the amount of the draft so paid by the Letter of Credit Bank,
the Borrower shall nonetheless be obligated to reimburse the amount of
the draft to the Letter of Credit Bank, with interest upon such amount
at the Default Rate from and after the date such draft is paid by the
Letter of Credit Bank until the amount thereof is repaid to the Letter
of Credit Bank in full. If the Letter of Credit Bank shall not have
obtained reimbursement for any drawing under a Letter of Credit
(whether from the Borrower or as proceeds of a Borrowing), upon demand
of the Agent each Bank shall immediately advance the amount of its
participation in such drawing to the Letter of Credit Bank and shall
be entitled to interest on such participating interest at the Default
Rate until reimbursed in full by the Borrower.
(d) Each Bank and the Borrower agree that, in paying any drawing
under a Letter of Credit, the Letter of Credit Bank shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any
such document. The Letter of Credit Bank shall not be liable to any
Bank for: (i) any action taken or omitted in connection herewith at
the request or with the approval of the Banks (including the Required
Banks, as applicable); (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document executed in
connection with a Letter of Credit.
(e) The Borrower hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; provided that this assumption is not intended
to, and shall not, preclude the Borrower's pursuing such rights and
remedies as it may have against the beneficiary or transferee at law
or under any other agreement. The Letter of Credit Bank shall not be
liable or responsible for any of the matters described in clauses (i)
through (vii) of
26
subsection (f) below. In furtherance and not in limitation of the
foregoing: (i) the Letter of Credit Bank may accept documents that
appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the
contrary; and (ii) the Letter of Credit Bank shall not be responsible
for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or
the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason.
(f) The obligation of the Borrower under this Agreement to
reimburse the Letter of Credit Bank for a drawing under a Letter of
Credit shall be unconditional and irrevocable, and shall be paid
strictly in accordance with the terms of this Agreement under all
circumstances, including the following:
(i) any lack of validity or enforceability of this
Agreement, the Master Letter of Credit Agreement or any letter of
credit application;
(ii) any change in the time, manner or place of payment
of, or in any other term of, all or any of the obligations of the
Borrower in respect of any Letter of Credit or any other
amendment or waiver of or any consent to departure from any
letter of credit application;
(iii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may
be acting), the Letter of Credit Bank or any other Person,
whether in connection with this Agreement, the transactions
contemplated hereby or any unrelated transaction;
(iv) any draft, demand, certificate 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; or
any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of
Credit;
(v) any payment by the Letter of Credit Bank under any
Letter of Credit against presentation of a draft or certificate
that does not strictly comply with the terms of any Letter of
Credit; or any payment made by the Letter of Credit Bank under
any Letter of Credit to any Person purporting to be a trustee in
bankruptcy, debtor-in-possession, assignee for the benefit of
creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of any Letter of
Credit, including any arising in connection with any insolvency
proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent
to departure from any other
27
guarantee, for all or any of the obligations of the Borrower in
respect of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, including any other circumstance
that might otherwise constitute a defense available to, or a discharge
of, the Borrower or a guarantor.
(g) Notwithstanding anything in this Section 2.7 to the contrary,
including particularly subsections (e) and (f) above, the Borrower may have
a claim against the Letter of Credit Bank and the Letter of Credit Bank may
be liable to the Borrower, to the extent, but only to the extent, of any
direct, as opposed to consequential or exemplary, damages suffered by the
Borrower which the Borrower proves were caused by the Letter of Credit
Bank's willful misconduct or gross negligence or the willful failure to pay
under any Letter of Credit after the presentation to the Letter of Credit
Bank by the beneficiary of a sight draft and certificate strictly complying
with the terms and conditions of a Letter of Credit.
(h) The Borrower shall indemnify, protect, defend and hold harmless
each Indemnitee from and against all losses, liabilities, claims, damages,
judgments, costs and expenses, including but not limited to all reasonable
attorneys' fees and legal expenses, incurred by the Indemnitees or imposed
upon the Indemnitees at any time by reason of the issuance, demand for
honor or honor of any Letter of Credit or the enforcement, protection or
collection of the Letter of Credit Bank's claims against the Borrower under
this Section 2.7 or by reason of any act or omission of any Indemnitee in
connection with any of the foregoing; provided, however, that such
indemnification shall not extend to losses, liabilities, claims, damages,
judgments, costs and expenses to the extent arising from any act or
omission of an Indemnitee which constitutes gross negligence or willful
misconduct.
(i) The Borrower hereby agrees to pay to the Letter of Credit Bank,
on demand, all administrative fees charged by the Letter of Credit Bank in
the ordinary course of business in connection with the issuance of letters
of credit, honoring of drafts under letters of credit, amendments thereto,
transfers thereof and all other activity with respect to letters of credit,
at the then current rates established by the Letter of Credit Bank from
time to time for such services rendered on behalf of customers of the
Letter of Credit Bank generally.
Section 2.8. Interest on Notes. The Borrower hereby agrees to pay
interest on the unpaid principal amount of each Note for the period commencing
on the date of this Agreement until the unpaid principal amount thereof is paid
in full, in accordance with the following:
(a) Floating Rate Fundings. Subject to subsection (c) below, while
any outstanding principal of a Note constitutes a Floating Rate Funding,
the outstanding
28
principal balance thereof shall bear interest at an annual rate at all
times equal to the Floating Rate applicable to such Floating Rate Funding.
(b) Eurodollar Fundings. Subject to subsection (c) below, while any
outstanding principal of a Note constitutes a Eurodollar Funding, the
outstanding principal balance thereof shall bear interest for the
applicable Interest Period at an annual rate equal to the Eurodollar Rate
established with respect such Eurodollar Funding in accordance with Section
2.3, 2.4 or 2.5 hereof.
(c) Default Rate. From and after the occurrence of an Event of
Default and continuing thereafter until such Event of Default shall be
remedied to the written satisfaction of the Required Banks, the outstanding
principal balance of each Note shall bear interest, until paid in full, at
a rate equal to the sum of (i) the interest rate otherwise in effect with
respect to such outstanding principal and (ii) two percent (2%). In
addition, any unreimbursed amounts payable under Section 2.7 and all fees,
indemnification obligations and other Obligations not paid when due
hereunder shall bear interest, until paid in full, at an annual rate equal
to the sum of (i) the Floating Rate (with the then applicable Revolving
Facility Margin) and (ii) two percent (2%) (each rate described in this
subsection (c) herein a "Default Rate").
(d) Savings Clause. Notwithstanding anything in this Section 2.8 to
the contrary, at no time shall the Borrower be obligated or required to pay
interest on any Obligation at a rate which could subject any Bank to either
civil or criminal liability as a result of being in excess of the maximum
interest rate which the Borrower is permitted by applicable law. If, under
the terms of this Agreement or any other Loan Document, the Borrower is at
any time required or obligated to pay interest on any Obligation at a rate
in excess of such maximum rate, the Floating Rate, Eurodollar Rate or
Default Rate, as the case may be, shall be deemed to be immediately reduced
to such maximum rate and all previous payments in excess of the maximum
rate shall be deemed to have been payments in reduction of principal and
not on account of any interest thereon due hereunder. All sums paid or
agreed to be paid to a Bank for the use, forbearance or detention of any
Obligation, shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full stated term of the
Obligation to which such payment applies until payment in full so that the
rate or amount of interest on account of any such Obligation does not
exceed the maximum lawful rate of interest from time to time in effect and
applicable to such Obligation for so long as the Obligation is outstanding.
Section 2.9. Obligation to Repay Advances; Representations. The
Borrower shall be obligated to repay all Advances under this Article II
notwithstanding the failure of the Agent or the Swingline Bank to receive any
written request therefor or written confirmation thereof and notwithstanding the
fact that the person requesting the same was not in fact authorized to do so.
Any request for a Borrowing under the Revolving Facility or the Swingline
Facility, whether written, telephonic, telecopy or otherwise, shall be deemed to
be a representation by the Borrower that (a) the amount of the requested
Borrowing, when
29
added to the Revolving Facility Outstanding Amount or the Swingline Facility
Outstanding Amount, as applicable, would not cause the sum of the Revolving
Facility Outstanding Amount and the Swingline Facility Outstanding Amount to
exceed the Borrowing Base, and (b) the statements set forth in Section 3.2 are
correct as of the time of the request.
Section 2.10. Notes; Amortization.
(a) Revolving Facility. All Revolving Advances made by a Bank
hereunder shall be evidenced by and repayable in accordance with a
Revolving Note issued by the Borrower to such Bank. The aggregate unpaid
principal amount of each Revolving Note shall bear interest at the
applicable Floating Rate unless a Eurodollar Rate shall become applicable
thereto pursuant to Sections 2.3, 2.4 or 2.5, and shall be payable on the
Maturity Date with respect thereto or earlier in accordance with Section
7.2.
(b) Swingline Facility. All Swingline Advances made by the Swingline
Bank hereunder shall be evidenced by and repayable in accordance with a
Swingline Note issued by the Borrower to the Swingline Bank. The aggregate
unpaid principal amount of the Swingline Note shall bear interest at the
Floating Rate and shall be payable on the Maturity Date with respect
thereto or earlier in accordance with Section 7.2.
(c) Term Facility. All Term Advances made by a Bank hereunder shall
be evidenced by and repayable with interest in accordance with a Term Note
issued by the Borrower to such Bank. The aggregate unpaid principal amount
of each Term Note shall bear interest at the applicable Floating Rate
unless a Eurodollar Rate shall become applicable thereto pursuant to
Sections 2.4 or 2.5.
(d) Amortization of Term Facility. The Term Facility shall be payable
on the dates and in the amounts set forth below:
30
Due Date Amount of Installment
-------- ---------------------
September 30, 2002 $2,500,000
December 29, 2002 $2,500,000
March 31, 2003 $2,500,000
June 30, 2003 $2,500,000
September 30, 2003 $2,500,000
January 1, 2004 $2,500,000
March 31, 2004 $3,125,000
June 30, 2004 $3,125,000
September 30, 2004 $3,125,000
December 31, 2004 $3,125,000
March 31, 2005 $3,750,000
June 30, 2005 $3,750,000
September 30, 2005 $3,750,000
Maturity Date Entire unpaid balance
Section 2.11. Interest Due Dates. Accrued interest on each Eurodollar
Funding shall be payable on the last day of the Interest Period relating to such
Eurodollar Funding; provided, however, that if any Interest Period is longer
than three (3) months, interest shall be payable in arrears (3) three months, or
a whole multiple thereof, after the first day of such Interest Period and on the
last day of the Interest Period. Accrued interest on each Floating Rate Funding
shall be payable monthly in arrears on the last day of each month and at
maturity.
Section 2.12. Computation of Interest and Fees. Interest accruing on
the Notes and on the unreimbursed portion of any Letter of Credit Amount, all
Letter of Credit Fees, Commitment Fees and other fees described in Section 2.13
shall be computed on the basis of the actual number of days elapsed in a year of
three hundred sixty (360) days.
Section 2.13. Fees. The Borrower hereby agrees to pay the following
fees to the Agent and the Banks in accordance with the following:
(a) Origination and Structuring Fees. The Borrower agrees to pay (i)
to the Agent, for the sole and exclusive account of the Agent, the one-time
arrangement and origination fees payable to the Agent as provided in the
Fee Letter, (ii) to each Bank (other than LaSalle Bank), a one-time
origination fee calculated as three-eighths of one percent of such Bank's
aggregate Commitments, and (iii) to U.S. Bank National Association, a
one-time arrangement fee payable to it as provided in the Supplemental Fee
Letter (collectively, (i), (ii) and (iii) being the "Origination and
Structuring Fees").
(b) Commitment Fee. The Borrower agrees to pay to the Agent, for the
pro rata account of the Banks, an ongoing commitment fee (the "Commitment
Fee") computed as the product of an annual rate equal to (i) the applicable
Margin relating
31
to the Commitment Fee and (b) the daily average amount by which (A) the sum
of the Revolving Commitment Amount exceeds (B) the Revolving Facility
Outstanding Amount from the Closing Date to and including the Revolving
Commitment Termination Date, payable quarterly in arrears on the last
Business Day of each calendar quarter. The Swingline Facility Outstanding
Amount shall not in any event constitute a portion of the Revolving
Facility Outstanding Amount for purposes of determining the Commitment Fee.
Any such Commitment Fee remaining unpaid on the Revolving Commitment
Termination Date shall be due and payable on such date. The Commitment Fee
shall be shared by the Banks on the basis of their respective Percentages
of the Revolving Facility.
(c) Audit Fees. The Borrower agrees to pay to the Agent, on written
demand, reasonable fees charged by the Agent in connection with any audits
or inspections by the Agent (or by the employees, agents, consultants or
auditors of the Agent) of any Collateral or the operations or businesses of
any Credit Party, together with actual out-of-pocket costs and expenses
incurred in conducting any such audit or inspection; provided, however,
that until the occurrence of an Event of Default the Borrower shall not be
obligated to reimburse the Agent for more than two (2) such audits or
inspections conducted by the Agent during any fiscal year of the Borrower.
(d) Agency Fees. The Borrower agrees to pay to the Agent, for the
sole and exclusive account of the Agent, the agency fee provided in the Fee
Letter (the "Agency Fee") in accordance with the payment terms thereof.
Section 2.14. Use of Proceeds. Proceeds of the Term Facility shall be
used to refinance and retire all existing term indebtedness owing from the
Borrower to Bank One, N.A. Proceeds of the initial Borrowing under the Revolving
Facility shall be used to refinance and retire all existing revolving
indebtedness owing from the Borrower to Bank One, N.A. Proceeds of each
additional Borrowing under the Revolving Facility and each Borrowing under the
Swingline Facility shall be used by the Borrower for Permitted Acquisitions and
its working capital purposes and general corporate purposes.
Section 2.15. Voluntary Reduction or Termination of the Commitments;
Prepayments.
(a) Reduction or Termination of Revolving Commitments. The Borrower,
from time to time upon not less than thirty (30) Business Days' prior
written notice to the Agent, may permanently reduce the Revolving
Commitment Amount; provided, however, that no such reduction shall reduce
the Revolving Commitment Amount to an amount less than the greater of (i)
the Swingline Commitment Amount or (ii) the Revolving Facility Outstanding
Amount. Any such voluntary reduction shall be pro rata as to all Revolving
Commitments according to each Bank's Percentage of the Revolving Facility
and shall be in an aggregate amount equal to $2,000,000 or a higher
integral multiple of $1,000,000. The Borrower at any time prior to the
Revolving Commitment Termination Date may terminate the Revolving
32
Commitments by (i) providing to the Agent not less than thirty (30)
Business Days' prior written notice of its intention to so terminate
the Revolving Commitments and (ii) making payment in full of all Notes
and all other monetary Obligations and terminating, or making a cash
deposit with respect to, all outstanding Letters of Credit.
(b) Reduction or Termination of Swingline Commitment. The
Borrower, from time to time upon not less than thirty (30) Business
Day's prior written notice to the Swingline Bank, may permanently
reduce the Swingline Commitment Amount; provided, however, that no
such reduction shall reduce the Swingline Commitment Amount to an
amount less than the Swingline Facility Outstanding Amount. Any such
voluntary reduction shall be an aggregate amount equal to $1,000,000
or a higher integral multiple of $500,000. The Borrower at any time
prior to the Revolving Commitment Termination Date may terminate the
Swingline Commitment by (y) providing to the Swingline Bank not less
than thirty (30) Business Days' prior written notice of its intention
to so terminate the Swingline Commitment and (z) making payment in
full of the Swingline Note.
(c) Prepayments. If the sum of the Revolving Facility Outstanding
Amount and the Swingline Facility Outstanding Amount shall at any time
exceed the Borrowing Base, the Borrower shall immediately prepay the
Revolving Advances and Swingline Advances in an amount equal to such
excess, without notice or demand by the Agent, the Swingline Bank or
any Bank. The Borrower from time to time may voluntarily prepay the
Notes in whole or in part. In the event of either mandatory prepayment
or voluntary prepayment hereunder (i) any prepayment of a Facility
shall be applied against outstanding Advances of each Bank under that
Facility pro rata according to each Bank's Percentage of that
Facility, (ii) each prepayment of the Notes shall be made to the Agent
not later than 2:00 p.m. Local Time, on a Business Day, and funds
received after that hour shall be deemed to have been received by the
Agent on the next following Business Day, (iii) each partial
prepayment of Fundings which, at the time of such prepayment, bear
interest at a Eurodollar Rate shall be accompanied by accrued interest
on such partial prepayment through the date of prepayment and
additional compensation calculated in accordance with Section 2.19,
(iv) each partial prepayment of Fundings with respect to a Facility
which, at the time of such prepayment, bear interest at a Eurodollar
Rate, shall be in an aggregate amount equal to the applicable minimum
Funding amount specified in Section 2.5 for such Facility and, after
application of any such prepayment, shall not result in a Eurodollar
Funding remaining outstanding in an amount less than such minimum
Funding amount, (v) each partial prepayment of Fundings with respect
to the Revolving Facility or the Term Facility which, at the time of
such prepayment, bear interest at a Floating Rate, shall be in an
aggregate amount equal to $2,000,000 or a higher integral multiple of
$1,000,000, unless (in either case) the aggregate outstanding balance
of all Notes under the Facility being prepaid is less than such
minimum Funding amount, in which event any such prepayment may be in
such lesser amount, (vi) unless notified by the Borrower in writing to
the contrary, the
33
Agent shall apply all partial prepayments first, to Swingline
Advances, second, to Revolving Advances and, third, to Term Advances
and (vii) each partial prepayment of the Term Facility shall be
applied to principal installments becoming due under Section 2.10 in
inverse order of their respective maturities.
Section 2.16. Payments.
(a) Making of Payments. All payments of principal of and interest
due with respect to a Facility shall be made to the Agent for the
account of the Banks pro rata according to their respective
Percentages of such Facility; provided, that any such payments so
received by the Agent after the occurrence of an Event of Default
hereunder shall be allocated among the Banks pro rata according to
their Default Percentages. All payments of fees pursuant to Section
2.13 shall be made to the Agent for the account of the Agent or the
Banks, as specified in Section 2.13. All payments on account of a
Facility shall be made to the Agent at its office in Chicago, Illinois
not later than 2:00 p.m. Local Time, on the date due, in immediately
available funds, and funds received after that hour shall be deemed to
have been received on the next following Business Day. The Borrower
hereby authorizes the Agent to charge the Borrower's demand deposit
account maintained with the Agent (or with any other Bank) for the
amount of any Obligation on its due date, but the Agent's failure to
so charge any such account shall in no way affect the obligation of
the Borrower to make any such payment. The Agent shall remit to each
Bank in immediately available funds on the same Business Day as
received by the Agent its share of all such payments received by the
Agent for the account of such Bank. All payments under Section 2.17,
2.18 or 2.19 shall be made by the Borrower directly to the Bank
entitled thereto.
(b) Effect of Payments. Each payment by the Borrower to the Agent
for the account of any Bank pursuant to Section 2.16(a) shall be
deemed to constitute payment by the Borrower directly to such Bank,
provided, however, that in the event any such payment by the Borrower
to the Agent is required to be returned to the Borrower for any reason
whatsoever, then the Borrower's obligation to such Bank with respect
to such payment shall be deemed to be automatically reinstated.
(c) Distributions by Agent. Unless the Agent shall have been
notified by a Bank or the Borrower prior to the date on which such
Bank or the Borrower is scheduled to make payment to the Agent of (in
the case of a Bank) the proceeds of an Advance to be made by it
hereunder or (in the case of the Borrower) a payment to the Agent for
the account of one or more of the Banks hereunder (such payment by a
Bank or the Borrower (as the case may be) being herein called a
"Required Payment"), which notice shall be effective upon receipt,
that it does not intend to make the Required Payment to the Agent, the
Agent may assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient(s) on such date
and, if such Bank or the Borrower (as the case may be) has not in fact
made the
34
Required Payment to the Agent, the recipient(s) of such payment shall,
on demand, repay to the Agent the amount so made available together
with interest thereon for each day during the period commencing on the
date such amount was so made available by the Agent until the date the
Agent recovers such amount at a rate (i) equal to the Federal Funds
Rate for such day, in the case of a Required Payment owing by a Bank,
or (ii) equal to the applicable rate of interest as provided in this
Agreement, in the case of a Required Payment owing by the Borrower.
(d) Setoff. The Borrower agrees that each Bank, subject to such
Bank's sharing obligations set forth in Section 8.6, shall have all
rights of setoff and bankers' lien provided by applicable law, and in
addition thereto, the Borrower agrees that if at any time any
Obligation is due and owing by the Borrower under this Agreement to
any Bank at a time when an Event of Default has occurred and is
continuing hereunder, any Bank may apply any and all balances,
credits, and deposits, accounts or moneys of the Borrower then or
thereafter in the possession of such Bank (excluding, however, any
trust or escrow accounts held by the Borrower for the benefit of any
third party) to the payment thereof.
(e) Due Date Extension. Subject to subsection (b) of the
definition of "Interest Period" with respect to Eurodollar Fundings,
if any payment of principal of or interest on any Funding or any fees
payable hereunder falls due on a day which is not a Business Day, then
such due date shall be extended to the next following Business Day,
and (in the case of principal) additional interest shall accrue and be
payable for the period of such extension.
(f) Application of Payments. Except as otherwise provided herein,
so long as no Default or Event of Default has occurred and is
continuing hereunder, each payment received from the Borrower shall be
applied to such Obligation as the Borrower shall specify by notice to
be received by the Agent on or before the date of such payment, or in
the absence of such notice, as the Agent shall determine in its
discretion. Concurrently with each remittance to any Bank of its
appropriate share of any such payment (based upon such Bank's
Percentage of the Facility to which such payment relates), the Agent
shall advise such Bank as to the application of such payment. Except
as otherwise provided in Article VIII, after the occurrence of a
Default or Event of Default, all payments received by the Agent or any
Bank from the Borrower shall be shared on the basis of each Bank's
Default Percentage thereof.
Section 2.17. Taxes. All payments made by the Borrower to the
Agent or any Bank (herein any "Payee") under or in connection with this
Agreement or the Notes shall be made without any setoff or other counterclaim,
and shall be free and clear of and without deduction for or on account of any
present or future taxes now or hereafter imposed by any governmental or other
authority, except to the extent that any such deduction or withholding is
compelled by law. As used herein, the term "Taxes" shall include all income,
excise and other taxes of whatever nature (other than taxes generally assessed
on the overall net income of a Payee by the government or other authority of the
country, state or political subdivision
35
in which such Payee is incorporated or in which the office through which such
Payee is acting is located) as well as all levies, imposts, duties, charges, or
fees of whatever nature. "Taxes" shall not include, however, any foreign
withholding taxes or similar deductions imposed solely as a result of a Bank's
election to fund an Advance through a foreign office of such Bank. If the
Borrower is notified that it is compelled by law to make any deductions or
withholdings on account of any Taxes (including any foreign withholding) it
will:
(a) pay to the relevant authorities the full amount required to
be so withheld or deducted;
(b) pay such additional amounts (including, without limitation,
any penalties, interest or expenses) as may be necessary in order that
the net amount received by the Payee after such deductions or
withholdings (including any required deduction or withholding on such
additional amounts) shall equal the amount the Payee would have
received had no such deductions or withholdings been made; and
(c) promptly forward to the Agent (for delivery to the
appropriate Payee) an official receipt or other documentation
satisfactory to the Agent evidencing such payment to such authorities.
The amount that the Borrower shall be required to pay to any Payee pursuant to
the foregoing clause (b) shall be reduced, to the extent permitted by applicable
law, by the amount of any offsetting tax benefit which such Payee receives as
the result of the Borrower's payment to the relevant authorities as reasonably
determined by such Payee; provided, however, that if such Payee shall
subsequently determine that it has lost the benefit of all or a portion of such
tax benefit, the Borrower shall promptly remit to such Payee the amount
certified by such Payee to be the amount necessary to restore such Payee to the
position it would have been in if no payment had been made pursuant to this
sentence. If any Taxes otherwise payable by the Borrower pursuant to the
foregoing are directly asserted against a Payee, such Payee may pay such taxes
and the Borrower promptly shall reimburse such Payee to the full extent
otherwise required under this Section 2.17. The obligations of the Borrower
under this Section 2.17 shall survive any termination of this Agreement.
Section 2.18. Increased Costs; Capital Adequacy; Funding
Exceptions.
(a) Increased Costs on Eurodollar Advances. If Regulation D of
the Board of Governors of the Federal Reserve System or after the date
of this Agreement the adoption of any applicable law, rule or
regulation, or any change in any existing law, or any change in the
interpretation or administration thereof by any governmental
authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by a Bank with
any request or directive (whether or not having the force of law) of
any such authority, central bank or comparable agency, shall:
(i) subject a Bank to or cause the withdrawal or termination
of any exemption previously granted to a Bank with respect to,
any tax, duty or other
36
charge with respect to its Eurodollar Fundings or its obligation
to make Eurodollar Fundings, or shall change the basis of
taxation of payments to a Bank of the principal of or interest
under this Agreement in respect of its Eurodollar Fundings or its
obligation to make Eurodollar Fundings (except for changes in the
rate of tax on the overall net income of a Bank imposed by the
jurisdictions in which a Bank's principal executive office is
located); or
(ii) impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board
of Governors of the Federal Reserve System, but excluding any
reserve included in the determination of interest rates pursuant
to Section 2.6), special deposit or similar requirement against
assets of, deposits with or for the account of, or credit
extended by, a Bank; or
(iii) impose on a Bank any other condition affecting its
making, maintaining or funding of its Eurodollar Fundings or its
obligation to make Eurodollar Fundings;
and the result of any of the foregoing is to increase the cost to an
affected Bank of making or maintaining any Eurodollar Funding, or to
reduce the amount of any sum received or receivable by such Bank under
this Agreement or under its Notes with respect to a Eurodollar
Funding, then the affected Bank will notify the Borrower and the Agent
of such increased cost and within fifteen (15) days after demand by
such Bank (which demand shall be accompanied by a statement setting
forth the basis of such demand) the Borrower shall pay to such Bank
such additional amount or amounts as will compensate the Bank for such
increased cost or such reduction; provided, however, that no such
increased cost or such reduction shall be payable by the Borrower for
any period longer than ninety (90) days prior to the date on which
notice thereof is delivered to the Borrower. Each Bank will promptly
notify the Borrower of any event of which it has knowledge, occurring
after the date hereof, which will entitle such Bank to compensation
pursuant to this Section 2.18. If the Borrower receives notice from a
Bank of any event which will entitle such Bank to compensation
pursuant to this Section 2.18, the Borrower may prepay any then
outstanding Eurodollar Fundings or notify the affected Bank that any
pending request for a Eurodollar Funding shall be deemed to be a
request for a Floating Rate Funding, in each case subject to the
provisions of Section 2.19.
(b) Capital Adequacy. If a Bank determines at any time that such
Bank's Return has been reduced as a result of any Capital Adequacy
Rule Change, such Bank may require the Borrower to pay to such Bank
the amount necessary to restore such Bank's Return to what it would
have been had there been no Capital Adequacy Rule Change. For purposes
of this Section 2.18(b), the following definitions shall apply:
(i) "Return", for any calendar quarter or shorter period,
means the percentage determined by dividing (A) the sum of
interest and ongoing fees
37
earned by a Bank under this Agreement during such period by (B)
the average capital such Bank is required to maintain during such
period as a result of its being a party to this Agreement, as
determined by such Bank based upon its total capital requirements
and a reasonable attribution formula that takes account of the
Capital Adequacy Rules then in effect. Return may be calculated
for a Bank for each calendar quarter and for the shorter period
between the end of a calendar quarter and the date of termination
in whole of this Agreement.
(ii) "Capital Adequacy Rule" means any generally applicable
law, rule, regulation or guideline regarding capital adequacy
that applies to a Bank, or the interpretation thereof by any
governmental or regulatory authority. Capital Adequacy Rules
include rules requiring financial institutions to maintain total
capital in amounts based upon percentages of outstanding loans,
binding loan commitments and letters of credit.
(iii) "Capital Adequacy Rule Change" means any generally
applicable change in any Capital Adequacy Rule occurring after
the date of this Agreement, but does not include any changes in
applicable requirements that at the date hereof are scheduled to
take place under the existing Capital Adequacy Rules or any
increases in the capital that a Bank is required to maintain to
the extent that the increases are required due to a regulatory
authority's assessment of such Bank's financial condition.
The initial notice sent by a Bank shall be sent as promptly as
practicable after such Bank learns that its Return has been reduced,
shall include a demand for payment of the amount necessary to restore
such Bank's Return for the quarter in which the notice is sent, and
shall state in reasonable detail the cause for the reduction in such
Bank's Return and such Bank's calculation of the amount of such
reduction. Thereafter, a Bank may send a new notice during each
calendar quarter setting forth the calculation of the reduced Return
for that quarter and including a demand for payment of the amount
necessary to restore such Bank's Return for that quarter. A Bank's
calculation in any such notice shall be conclusive and binding absent
demonstrable error.
(c) Basis for Determining Interest Rate Inadequate or Unfair. If
with respect to any Interest Period:
(i) the Agent determines that, or the Required Banks
determine and advise the Agent that, deposits in U.S. dollars (in
the applicable amounts) are not being offered in the London
interbank eurodollar market for such Interest Period; or
(ii) the Agent otherwise determines, or the Required Banks
determine and advise the Agent (which determination shall be
binding and conclusive on all parties), that by reason of
circumstances affecting the
38
London interbank eurodollar market adequate and reasonable means
do not exist for ascertaining the applicable Eurodollar Rate; or
(iii) the Agent determines, or the Required Banks determine
and advise the Agent, that the Eurodollar Rate as determined by
the Agent will not adequately and fairly reflect the cost to the
Banks of maintaining or funding a Eurodollar Funding for such
Interest Period, or that the making or funding of Eurodollar
Fundings has become impracticable as a result of an event
occurring after the date of this Agreement which in the opinion
of such Banks materially affects such Eurodollar Fundings;
then the Agent shall promptly notify the affected parties and (A) in
the event of any occurrence described in the foregoing clause (i) the
Borrower shall enter into good faith negotiations with each affected
Bank in order to determine an alternate method to determine the
Eurodollar Rate for such Bank, and during the pendancy of such
negotiations with any Bank, such Bank shall be under no obligation to
make any new Eurodollar Fundings, and (B) in the event of any
occurrence described in the foregoing clauses (ii) or (iii), for so
long as such circumstances shall continue, no Bank shall be under any
obligation to make any new Eurodollar Fundings.
(d) Illegality. In the event that any change in (including the
adoption of any new) applicable laws or regulations, or any change in
the interpretation of applicable laws or regulations by any
governmental authority, central bank, comparable agency or any other
regulatory body charged with the interpretation, implementation or
administration thereof, or compliance by a Bank with any request or
directive (whether or not having the force of law) of any such
authority, central bank, comparable agency or other regulatory body,
should make it or, in the good faith judgment of the affected Bank,
shall raise a substantial question as to whether it is unlawful for
such Bank to make, maintain or fund Eurodollar Fundings, then (i) the
affected Bank shall promptly notify the Borrower and the Agent, (ii)
the obligation of the affected Bank to make, maintain or convert into
Eurodollar Fundings shall, upon the effectiveness of such event, be
suspended for the duration of such unlawfulness, and (iii) for the
duration of such unlawfulness, any notice by the Borrower pursuant to
Sections 2.3, 2.4 or 2.5 requesting the affected Bank to make or
convert into Eurodollar Fundings shall be construed as a request to
make or to continue making Floating Rate Fundings.
(e) Procedures to Mitigate. If circumstances arise in respect of
any Bank which would or would upon the giving of notice result in any
liability of the Borrower under this Section 2.18 then, without in any
way limiting, reducing or otherwise qualifying the Borrower's
obligations under this Section 2.18, such Bank shall promptly, upon
becoming aware of the same, notify the Agent and the Borrower thereof
and shall, in consultation with the Agent and the Borrower and to the
extent that it can do so without, in its reasonable judgment,
disadvantaging itself, take such reasonable steps as may be available
to it to mitigate the effects of such circumstances
39
(including, without limitation, the designation of an alternate office
or the transfer of its Eurodollar Fundings to another office). If and
so long as a Bank has been unable to take, or has not taken, steps
reasonably acceptable to the Borrower to mitigate the effect of the
circumstances in question, such Bank shall be obliged, at the request
of the Borrower, to assign all its rights and obligations hereunder to
another Person designated by the Borrower with the approval of the
Agent (which shall not be unreasonably withheld) and willing to
participate in the Facilities in place of such Bank; provided that
such Person satisfies all of the requirements of this Agreement,
including, but not limited to, providing the forms and documents
required by Section 8.15 and any such Person shall cover all costs
incurred in connection with effecting such replacement.
Section 2.19. Funding Losses. The Borrower hereby agrees that
upon demand by any Bank (which demand shall be accompanied by a statement
setting forth the basis for the calculations of the amount being claimed) the
Borrower will indemnify such Bank against any loss or expense which such Bank
may have sustained or incurred (including, without limitation, any net loss or
expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund or maintain Eurodollar Fundings) or
which such Bank may be deemed to have sustained or incurred, as reasonably
determined by such Bank, (i) as a consequence of any failure by the Borrower to
make any payment when due of any amount due hereunder in connection with any
Eurodollar Fundings, (ii) due to any failure of the Borrower to borrow or
convert any Eurodollar Fundings on a date specified therefor in a notice thereof
or (iii) due to any payment or prepayment of any Eurodollar Funding on a date
other than the last day of the applicable Interest Period for such Eurodollar
Funding. For this purpose, all notices under Sections 2.3, 2.4 and 2.5 shall be
deemed to be irrevocable.
Section 2.20. Right of Banks to Fund through Other Offices. Each
Bank, if it so elects, may fulfill its agreements hereunder with respect to any
Eurodollar Funding by causing a foreign branch or affiliate of such Bank to make
such Eurodollar Funding; provided, that in such event the obligation of the
Borrower to repay such Eurodollar Funding shall nevertheless be to such Bank and
such Eurodollar Funding shall be deemed held by such Bank for the account of
such branch or affiliate.
Section 2.21. Discretion of Banks as to Manner of Funding.
Notwithstanding any provision of this Agreement to the contrary, each Bank shall
be entitled to fund and maintain all or any part of its Eurodollar Fundings in
any manner it deems fit, it being understood, however, that for the purposes of
this Agreement (specifically including, without limitation, Section 2.19 hereof)
all determinations hereunder shall be made as if each Bank had actually funded
and maintained each Eurodollar Funding during each Interest Period for such
Eurodollar Funding through the purchase of deposits having a maturity
corresponding to such Interest Period and bearing an interest rate equal to the
appropriate Eurodollar Rate for such Interest Period.
40
Section 2.22. Conclusiveness of Statements; Survival of
Provisions. Determinations and statements of a Bank pursuant to Section 2.17,
2.18, or 2.19 shall be conclusive absent demonstrable error. Each Bank may use
reasonable averaging and attribution methods in determining compensation
pursuant to such Sections 2.17, 2.18 or 2.19 and the provisions of Sections
2.17, 2.18 and 2.19 shall survive termination of this Agreement.
ARTICLE III
CONDITIONS OF LENDING
Section 3.1. Conditions Precedent to the Initial Advance. The
obligation of the Banks to fund the initial Advances or issue any Letter of
Credit is subject to the condition precedent that the Agent shall have received
the following, each in form and substance satisfactory to the Required Banks:
(a) The Notes, properly executed on behalf of the Borrower.
(b) The Guaranties, properly executed on behalf of the
appropriate Guarantor.
(c) The Security Documents, properly executed on behalf of the
appropriate Credit Party, together with:
(i) financing statements with respect to each Credit Party
to be filed in all jurisdictions which, in the opinion of the
Agent, are reasonably necessary to perfect the security interests
created by the Security Documents, to the extent such security
interests can be perfected by filing; and
(ii) current searches of appropriate filing offices in each
state (and county, to the extent relevant) in which a Credit
Party has an office or otherwise conducts business (including,
without limitation, patent and trademark offices, secretaries of
state and county recorders) showing that no state or federal tax
liens have been filed and remain in effect against any Credit
Party, and that no financing statements or other notifications or
filings have been filed and remain in effect against any Credit
Party, other than those for which the Agent has received an
appropriate release, termination or satisfaction or those
permitted in accordance with Section 6.1.
(d) Evidence of all insurance required by the terms of any Loan
Document, together with appropriate certificates and loss payable
endorsements showing the Agent as additional insured and loss payee
thereunder.
(e) A certified copy of the executed Indenture, certified by an
appropriate officer of the Borrower.
41
(f) Evidence that all actions which, in the opinion of the
Agent, are reasonably necessary to perfect and protect the security
interests created by the Security Documents have been taken.
(g) Copies of the Articles of Incorporation and Bylaws (or other
comparable organizational documents) of each Credit Party, certified
by the Secretary or Assistant Secretary of such Credit Party as being
true and correct copies thereof.
(h) A certificate of good standing for each Credit Party, dated
not more than thirty (30) days prior to the date hereof, and evidence
satisfactory to the Agent that each Credit Party is qualified to
conduct its business in each state where it presently conducts such
business if failure to obtain any such qualification or licensing
would have a Material Adverse Effect.
(i) A signed copy of a certificate of the Secretary or an
Assistant Secretary of each Credit Party which shall certify the names
of the officers of such Credit Party authorized to sign the Loan
Documents to which such Credit Party is a party and the other
documents or certificates to be delivered pursuant to this Agreement,
including (as to the Borrower) requests for Advances and Eurodollar
Fundings, together with the true signatures of such officers. The
Agent and each Bank may conclusively rely on such certificates until
they shall receive a further certificate of the Secretary of an
Assistant Secretary of a Credit Party canceling or amending the prior
certificate and submitting the signatures of the officers named in
such further certificate.
(j) A Borrowing Base Certificate as of a date not more than ten
(10) days prior to the Closing Date.
(k) Collateral audit reports in all respects satisfactory to the
Agent.
(l) The following financial information: (i) audited financial
statements for the period ended December 30, 2001 for the Consolidated
Group (as of such date), (ii) interim financial statements of the
Consolidated Group for the period from December 30, 2001 through and
including July 14, 2002; and (iii) a business plan for the Borrower's
2002 fiscal year, including a written analysis of the business and
prospects for the Consolidated Group for such year and for each year
thereafter through the Borrower's fiscal year end, 2005, together with
financial projections for the period commencing December 31, 2001, and
ending on January 1, 2006, prepared by management of the Borrower,
together with a summary of key assumptions utilized by management in
the preparation of such projections.
(m) Documentation acceptable to the Banks demonstrating that the
Obligations qualify as "Senior Debt" for all purposes of the
Indenture.
(n) A signed copy of an opinion of counsel for each Credit Party
addressed to the Agent on behalf of the Banks.
42
(o) The Fee Letter and the Supplemental Fee Letter, each
executed on behalf of the Borrower.
(p) An ISDA Master Agreement with all appropriate Schedules and
Confirmations (as each term is defined in such ISDA Master Agreement)
with respect to the Permitted Rate Hedging Arrangements, executed on
behalf of the Borrower.
(q) Payment of all fees and expenses then due and payable
pursuant to Sections 2.13 and 9.4 hereof.
Section 3.2. Conditions Precedent to All Advances. The obligation
of the Banks to make each Advance or issue a Letter of Credit shall be subject
to the further conditions precedent that on such date:
(a) the representations and warranties contained in Article IV
hereof are correct in all material respects on and as of the date of
such Advance or Letter of Credit as though made on and as of such
date;
(b) no event has occurred and is continuing, or would result
from such Advance or Letter of Credit, which constitutes a Default or
an Event of Default; and
(c) there has been no material adverse change in the financial
condition or prospects of any Credit Party since the date of the
financial statements described in Section 4.5.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Banks as follows:
Section 4.1. Legal Existence and Power; Name; Chief Executive
Office. Each Credit Party is a legal entity duly organized, validly existing and
in good standing under the laws of its respective state of organization, and is
duly licensed or qualified to transact business in all jurisdictions where the
character of the property owned or leased or the nature of the business
transacted by it makes such licensing or qualification necessary and where
failure to obtain such licensing or qualification would have a Material Adverse
Effect. Each Credit Party has all requisite power and authority, corporate or
otherwise, to conduct its business, to own its properties and to execute and
deliver, and to perform all of its obligations under, the Loan Documents to
which it is a party. Within the last twelve (12) months, each Credit Party has
done business solely under the names set forth in Schedule 4.1. The state of
organization and the chief executive office and principal place of business of
each Credit Party are designated as such in Schedule 4.1, each other place of
business of each Credit Party is located at the address set forth in Schedule
4.1 and all records relating to their respective businesses are kept at those
locations.
43
Section 4.2. Authorization for Borrowings and Letters of Credit;
No Conflict as to Law or Agreements. The execution, delivery and performance by
each Credit Party of the Loan Documents to which it is a party, and the Letters
of Credit and Advances from time to time obtained hereunder, have been duly
authorized by all necessary corporate action and do not and will not (a) require
any consent or approval which has not been obtained prior to the date hereof,
(b) require any authorization, consent or approval by, or registration,
declaration or filing (other than filing of financing statements as contemplated
hereunder) with, or notice to, any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or any third party,
except such authorization, consent, approval, registration, declaration, filing
or notice as has been obtained, accomplished or given prior to the date hereof,
(c) violate any provision of any law, rule or regulation (including, without
limitation, Regulations T, U or X of the Board of Governors of the Federal
Reserve System) or of any order, writ, injunction or decree presently in effect
having applicability to a Credit Party or of the articles of incorporation,
bylaws or other organizational documents of a Credit Party, (d) result in a
breach of or constitute a default under any indenture (including, without
limitation, the Indenture) or loan or credit agreement or any other material
agreement, lease or instrument to which any Credit Party is a party or by which
it or its properties may be bound or affected, or (e) result in, or require, the
creation or imposition of any mortgage, deed of trust, pledge, lien, security
interest or other charge or encumbrance of any nature upon or with respect to
any of the properties now owned or hereafter acquired by an Credit Party (other
than as required hereunder in favor of the Banks).
Section 4.3. Legal Agreements. Each of the Loan Documents
constitutes the legal, valid and binding obligations and agreements of the
Credit Party which is a party thereto, enforceable against such Credit Party in
accordance its terms, except to the extent that enforcement thereof may be
limited by an applicable bankruptcy, insolvency or similar laws now or hereafter
in effect affecting creditors' rights generally and by general principles of
equity.
Section 4.4. Subsidiaries. All Subsidiaries of each Credit Party
(both direct and indirect) are set forth and described in the organizational
chart in Schedule 4.4.
Section 4.5. Financial Condition; No Adverse Change. The Borrower
has heretofore furnished to the Agent audited financial statements of the
Consolidated Group for its fiscal year ended December 30, 2001 and unaudited
financial statements of the Consolidated Group for the twenty-eight week period
ended July 14, 2002 and those financial statements fairly present the financial
condition of the Consolidated Group on the dates thereof and the results of
operations and cash flows for the periods then ended (subject to year-end audit
adjustments) and were prepared in accordance with GAAP. Since the date of the
financial statements described above, there has not occurred any event or
circumstance that would have a Material Adverse Effect.
Section 4.6. Litigation. There are no actions, suits or
proceedings pending or, to the respective knowledge of the Credit Parties,
threatened against or affecting any Credit
44
Party or the properties of any Credit Party before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, which, if determined adversely to such Person, could reasonably be
expected to have a Material Adverse Effect, except as set forth and described in
Schedule 4.6.
Section 4.7. Regulation U. No Credit Party has engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Advance will be used
to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying any margin stock.
Section 4.8. Taxes. To their respective knowledge, each Credit
Party has paid or caused to be paid to the proper authorities when due all
federal, state and local taxes required to be withheld by it. Each Credit Party
has filed all federal, state and local tax returns which to the knowledge of the
officers of such Credit Party, are required to be filed, and each Credit Party
has paid or caused to be paid to the respective taxing authorities all taxes as
shown on said returns or on any assessment received by it to the extent such
taxes have become due, except for any such tax, assessment, charge or claim
whose amount, applicability or validity is being contested by an Credit Party in
good faith and by proper proceedings and for which such Credit Party shall have
set aside adequate reserves.
Section 4.9. Titles and Liens. A Credit Party has good and
absolute title to all properties and assets reflected in the latest balance
sheet referred to in Section 4.5, free and clear of all mortgages, security
interests, liens and encumbrances, except for (a) mortgages, security interests
and liens permitted by Section 6.1, and (b) covenants, restrictions, rights,
easements and minor irregularities in title which do not (i) materially
interfere with the business or operations of any Credit Party as presently
conducted and (ii) materially impair the value of the property to which they
attach. In addition, no financing statement naming any Credit Party as debtor is
on file in any office except to perfect only security interests permitted by
Section 6.1.
Section 4.10. Plans. Except as disclosed on Schedule 4.10, none
of the Borrower, any other Credit Party or any of their respective ERISA
Affiliates (i) maintains or has maintained any Pension Plan, (ii) contributes or
has contributed to any Multiemployer Plan or (iii) provides or has provided
post-retirement medical or insurance benefits with respect to employees or
former employees (other than benefits required under Section 601 of ERISA,
Section 4980B of the Code or applicable state law). None of the Borrower, any
other Credit Party or any of their respective ERISA Affiliates has received any
notice or has any knowledge to the effect that it is not in full compliance with
any of the requirements of ERISA, the Code or applicable state law with respect
to any Plan. No Reportable Event exists in connection with any Pension Plan.
Each Plan which is intended to qualify under the Code is so qualified, and no
fact or circumstance exists which may have an adverse effect on the Plan's
tax-qualified status. None of the Borrower, any other Credit Party or any of
their respective ERISA Affiliates has (i) any accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Code) under any Plan,
whether or not waived,
45
(ii) any liability under Section 4201 or 4243 of ERISA for any withdrawal,
partial withdrawal, reorganization or other event under any Multiemployer Plan
or (iii) any liability or knowledge of any facts or circumstances which could
result in any liability to the Pension Benefit Guaranty Corporation, the
Internal Revenue Service, the Department of Labor or any participant in
connection with any Plan (other than routine claims for benefits under the
Plan).
Section 4.11. Default. Each Credit Party is in compliance with
all provisions of all agreements, instruments, decrees and orders to which it is
a party or by which it or its property is bound or affected, the breach or
default of which could reasonably be expected to have a Material Adverse Effect.
Section 4.12. Environmental Compliance. Each Credit Party has
obtained all permits, licenses and other authorizations which are required under
federal, state and local laws and regulations relating to emissions, discharges,
releases of pollutants, contaminants, hazardous or toxic materials, or wastes
into ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants or hazardous or toxic
materials or wastes ("Environmental Laws") at their respective facilities or in
connection with the operation of its facilities. Except as disclosed in Schedule
4.12, each Credit Party and all activities of each Credit Party, at its
facilities comply with all material Environmental Laws and with all terms and
conditions of any required permits, licenses and authorizations applicable to
such Person with respect thereto. Except as disclosed in Schedule 4.12, each
Credit Party is in compliance with all limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in Environmental Laws or contained in any plan, order, decree,
judgment or notice of which such Credit Party is aware and with respect to which
noncompliance would have a Material Adverse Effect. Except as disclosed in
Schedule 4.12, no Credit Party is aware of, nor has any Credit Party received
notice of, any events, conditions, circumstances, activities, practices,
incidents, actions or plans which may interfere with or prevent continued
compliance with, or which may give rise to any liability under, any
Environmental Laws.
Section 4.13. Submissions to Banks. All financial and other
information provided to the Agent or any Bank by or on behalf of any Credit
Party in connection with the Borrower's request for the credit facilities
contemplated hereby is true and correct in all material respects and, as to
projections, valuations or pro forma financial statements, present a good faith
opinion as of the date made as to such projections, valuations and pro forma
condition and results.
Section 4.14. Financial Solvency. Both before and after giving
effect to all of the loans, guaranties and other financial accommodations
contemplated herein, each Credit Party:
46
(a) was not and will not be insolvent, as that term is used and
defined in Section 101(32) of the United States Bankruptcy Code and
Section 2 of the Uniform Fraudulent Transfer Act;
(b) does not have unreasonably small capital and is not engaged
or about to engage in a business or a transaction for which any
remaining assets of such Credit Party are unreasonably small;
(c) does not, by executing, delivering or performing its
obligations under the Loan Documents or by taking any action with
respect thereto, intend to, nor believe that it will, incur debts
beyond its ability to pay them as they mature;
(d) does not, by executing, delivering or performing its
obligations under the Loan Documents to which it is a party or by
taking any action with respect thereto, intend to hinder, delay or
defraud either its present or future creditors; and
(e) does not contemplate filing a petition in bankruptcy or for
an arrangement or reorganization or similar proceeding under any law
any jurisdiction or country, and, to the best knowledge of such Credit
Party, is not the subject of any bankruptcy or insolvency proceedings
or similar proceedings under any law of any jurisdiction or country
threatened or pending against such Credit Party;
provided, however, that for purposes of the foregoing representation relating to
a Guarantor, no Guaranty executed by a Guarantor shall be deemed a liability of
such Guarantor.
Section 4.15 Information Regarding Real Estate. Set forth and
described in Schedule 4.15 is a true and accurate description of each parcel of
real estate owned or leased by a Credit Party, together with true and accurate
information with respect to such parcel of real estate as set forth therein.
Section 4.16 Intellectual Property Rights.
(a) Owned Intellectual Property. Schedule 4.16 is a complete
list of all patents, applications for patents, trademarks,
applications for trademarks, service marks, applications for service
marks, mask works, trade dress and copyrights for which any Credit
Party is the registered owner (the "Owned Intellectual Property").
Except as disclosed on Schedule 4.16, (i) a Credit Party owns the
Owned Intellectual Property free and clear of all restrictions
(including covenants not to xxx a third party), court orders,
injunctions, decrees, writs or liens, whether by written agreement or
otherwise, (ii) no Person other than a Credit Party owns or has been
granted any right in the Owned Intellectual Property, (iii) all Owned
Intellectual Property is valid, subsisting and enforceable and (iv)
each Credit Party has taken all commercially reasonable action
necessary to maintain and protect the Owned Intellectual Property
owned by it.
47
(b) Agreements with Employees and Contractors. Each Credit Party
has entered into a legally enforceable agreement with each of its
employees and subcontractors obligating each such Person to assign to
such Credit Party, without any additional compensation, any
Intellectual Property Rights created, discovered or invented by such
Person in the course of such Person's employment or engagement with
such Credit Party (except to the extent prohibited by law), and
further requiring such Person to cooperate with such Credit Party,
without any additional compensation, in connection with securing and
enforcing any Intellectual Property Rights therein; provided, however,
that the foregoing shall not apply with respect to employees and
subcontractors whose job descriptions are of the type such that no
such assignments are reasonably foreseeable.
(c) Intellectual Property Rights Licensed from Others. Schedule
4.16 is a complete list of all agreements under which any Credit Party
has licensed Intellectual Property Rights from another Person
("Licensed Intellectual Property") other than readily available,
non-negotiated licenses of computer software and other intellectual
property used solely for performing accounting, word processing and
similar administrative tasks ("Off-the-shelf Software") and a summary
of any ongoing payments the applicable Credit Party is obligated to
make with respect thereto. Except as disclosed on Schedule 4.16 and in
written agreements copies of which have been given to the Agent, each
Credit Party's licenses to use the Licensed Intellectual Property are
free and clear of all restrictions, liens, court orders, injunctions,
decrees, or writs, whether by written agreement or otherwise. Except
as disclosed on Schedule 4.16, no Credit Party is obligated or under
any liability whatsoever to make any payments of a material nature by
way of royalties, fees or otherwise to any owner of, licensor of, or
other claimant to, any Intellectual Property Rights.
(d) Infringement. Except as disclosed on Schedule 4.16, no
Credit Party has any knowledge of, and has not received any written
claim or notice alleging, any infringement of another Person's
Intellectual Property Rights (including any written claim that a
Credit Party must license or refrain from using the Intellectual
Property Rights of any third party) nor, to the knowledge of any
Credit Party, is there any threatened claim or any reasonable basis
for any such claim.
ARTICLE V
AFFIRMATIVE COVENANTS OF THE BORROWER
So long as any Note or Letter of Credit shall remain unpaid or
outstanding or any Commitment shall be outstanding, the Borrower will comply
with the following requirements, unless the Required Banks shall otherwise
consent in writing:
Section 5.1. Reporting Requirements. The Borrower will deliver,
or cause to be delivered, to each Bank each of the following, which shall be in
form and detail reasonably acceptable to the Required Banks:
48
(a) as soon as available, and in any event within one hundred
twenty (120) days after the end of each fiscal year of the Borrower,
audited annual financial statements of the Consolidated Group with the
unqualified opinion of independent certified public accountants
selected by the Consolidated Group and acceptable to the Agent, which
annual financial statements shall include the balance sheets of the
Consolidated Group as at the end of such fiscal year and the related
statements of income, retained earnings and cash flows of the
Consolidated Group for the fiscal year then ended, prepared on a
consolidating and consolidated basis, all in reasonable detail and
prepared in accordance with GAAP, together with (i) a report signed by
such accountants stating that in making the investigations necessary
for said opinion they obtained no knowledge, except as specifically
stated, of any Default or Event of Default hereunder and all relevant
facts in reasonable detail to evidence, and the computations as to,
whether or not the Borrower is in compliance with the Financial
Covenants; and (ii) a certificate of the chief financial officer of
the Borrower, substantially in the form of Exhibit I, stating that
such financial statements have been prepared in accordance with GAAP
and whether or not such officer has knowledge of the occurrence of any
Default or Event of Default hereunder and, if so, stating in
reasonable detail the facts with respect thereto, and a budget for the
current fiscal year and financial projections for the current fiscal
year and for the immediately succeeding fiscal year;
(b) as soon as available and in any event within forty-five (45)
days after the end of each fiscal quarter of the Borrower, an
unaudited/interim balance sheet and statement of income, cash flow and
retained earnings of the Consolidated Group as at the end of and for
such fiscal quarter and for the year-to-date period then ended,
prepared on a consolidating and consolidated basis, in reasonable
detail and stating in comparative form the budget of the Consolidated
Group for such fiscal quarter and for the year-to-date period then
ended and the figures for the corresponding date and periods in the
previous year, all prepared in accordance with GAAP, subject to
year-end audit adjustments; and accompanied by a certificate of the
chief financial officer of the Borrower, substantially in the form of
Exhibit J, stating (i) that such financial statements have been
prepared in accordance with GAAP, subject to year-end audit
adjustments, (ii) whether or not such officer has knowledge of the
occurrence of any Default or Event of Default hereunder not
theretofore reported and remedied and, if so, stating in reasonable
detail the facts with respect thereto, and (iii) all relevant facts in
reasonable detail to evidence, and the computations as to (A) the
applicable Status for purposes of establishing the appropriate Margins
and (B) whether or not the Borrower is in compliance with the
Financial Covenants;
(c) within fifteen (15) days after the end of each month, a
properly completed and executed Borrowing Base Certificate as at the
end of such month;
(d) not later than January 31 of each fiscal year of the
Borrower, the projected balance sheets, income statements, Capital
Expenditures budget, and cash flow statements for the Consolidated
Group for each month of such year, each in
49
reasonable detail, representing the good faith projections of the
Borrower for each such month, and certified by the Borrower's chief
financial officer as being the most accurate projections available and
identical to the projections used by the Borrower for internal
planning purposes, together with such supporting schedules and
information as the Agent or the Required Banks from time to time may
reasonably request;
(e) from time to time, with reasonable promptness, any and all
receivables schedules, collection reports, deposit records, agings of
accounts receivable and accounts payable and such other material
reports, records or information as the Agent or the Required Banks
from time to time may reasonably request;
(f) immediately after the commencement thereof, notice in
writing of all uninsured litigation and of all proceedings before any
governmental or regulatory agency affecting any Credit Party of the
type described in Section 4.6 or which (i) seek a monetary recovery
against any Credit Party in excess of $250,000 or (ii) if determined
adversely to any Credit Party, could reasonably be expected to have a
Material Adverse Effect;
(g) as promptly as practicable (but in any event not later than
five (5) Business Days) after an officer of the Borrower obtains
knowledge of the occurrence of a Default or Event of Default
hereunder, notice of such occurrence, together with a detailed
statement by a responsible officer of the Borrower setting forth the
steps being taken by the Borrower to cure the effect of such Default
or Event of Default;
(h) as promptly as practicable, and in any event within thirty
(30) days after the Borrower knows or has reason to know that any
Reportable Event with respect to any Pension Plan has occurred, the
Borrower will deliver to the Agent a statement of the Borrower's (or,
as applicable, other Credit Party's) chief financial officer setting
forth details as to such Reportable Event and the action which the
Borrower (or, as applicable, other Credit Party) proposes to take with
respect thereto, together with a copy of the notice of such Reportable
Event to the Pension Benefit Guaranty Corporation;
(i) as promptly as practicable, and in any event within ten (10)
days after any Credit Party fails to make any quarterly contribution
required with respect to any Pension Plan under Section 412(m) of the
Code, the Borrower will deliver to the Agent a statement of the
Borrower's (or, as applicable, other Credit Party's) chief financial
officer setting forth details as to such failure and the action which
the Borrower (or, as applicable, other Credit Party) proposes to take
with respect thereto, together with a copy of any notice of such
failure required to be provided to the Pension Benefit Guaranty
Corporation;
(j) as promptly as practicable, and in any event with ten (10)
days after the Borrower knows or has reason to know that the Borrower
or any other Credit Party has or is reasonably expected to have any
liability under Section 4201 or 4243 of
50
ERISA for any withdrawal, partial withdrawal, reorganization or other
event under any Multiemployer Plan, the Borrower will deliver to the
Agent a statement of the Borrower's (or, as applicable, other Credit
Party's) chief financial officer setting forth details as to such
liability and the action which Borrower (or, as applicable, other
Credit Party) proposes to take with respect thereto;
(k) promptly upon obtaining knowledge thereof, notice of the
violation by any Credit Party of any law, rule or regulation, the
non-compliance with which could reasonably be expected to have a
Material Adverse Effect;
(l) promptly upon their distribution, copies of all financial
statements, reports, proxy statements and other communications which
the Borrower shall have sent to its stockholders;
(m) promptly after the sending or filing thereof, copies of all
regular and periodic financial reports which the Borrower shall file
with the Securities and Exchange Commission or any national securities
exchange;
(n) not later than December 1 of each year, with respect to
property insurance and May 1 of each year with respect to casualty
insurance, updated certificates of insurance in each case
demonstrating coverage for all tangible Collateral and showing the
Agent, on behalf of all Banks, as additional insured, loss payee and
otherwise satisfying all requirements specified in any Loan Document;
(o) promptly upon the execution and/or delivery of any
amendment, supplement or other modification to the Indenture or the
Consulting Agreement, a copy of such amendment, supplement or other
modification;
(p) promptly upon the delivery or other communication thereof,
any assertion that the Obligations do not constitute "Senior Debt"
under the Indenture; and
(q) at least ten (10) days prior to the consummation of a
Permitted Acquisition, such information as the Agent or the Required
Banks shall reasonably require to demonstrate that the proposed
acquisition constitutes a Permitted Acquisition for all purposes of
this Agreement.
Section 5.2. Books and Records; Inspection and Examination. The
Borrower will keep, and will cause each other Credit Party to keep, accurate
books of record and account for itself pertaining to its business and financial
condition and such other matters as the Agent may from time to time request in
which true and complete entries will be made in accordance with GAAP
consistently applied and, upon request of and reasonable notice by the Agent,
will permit any officer, employee, attorney or accountant for any Bank to audit,
review, make extracts from or copy any and all corporate and financial books and
records of any Credit Party at all reasonable times during ordinary business
hours, to send and discuss with account debtors and other obligors requests for
verification of amounts owed to any
51
Credit Party, and to discuss the affairs of any Credit Party with any of its
directors, officers, employees or agents. The Borrower will permit any Bank or
its employees, accountants, attorneys or agents, to examine and inspect any
property of any Credit Party at any time during ordinary business hours;
provided, that each Bank will use reasonable efforts to conduct (or have
conducted) any such examination or inspection so as to minimize disruptions to
the operations of such Credit Party.
Section 5.3. Compliance with Laws. The Borrower will, and will
cause each Credit Party to, (a) comply with the requirements of all applicable
laws and regulations including (but not limited to) all Environmental Laws and
(b) use and keep its assets, and will require that others use and keep its
assets, only for lawful purposes, without violation of any federal, state or
local law, statute or ordinance.
Section 5.4. Payment of Taxes and Other Claims. The Borrower will
pay or discharge, and will cause each other Credit Party to pay or discharge,
when due, (a) all taxes, assessments and governmental charges levied or imposed
upon it or upon its income or profits, upon any properties belonging to it prior
to the date on which penalties attach thereto, (b) all federal, state and local
taxes required to be withheld by it, and (c) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien or charge
upon any properties of a Credit Party; provided, that no Credit Party shall be
required to pay any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings and for which such Credit Party has set aside adequate reserves in
accordance with GAAP.
Section 5.5. Maintenance of Properties. The Borrower will keep
and maintain, and will cause each other Credit Party to keep and maintain, all
of its properties necessary or useful in its business in good condition, repair
and working order (normal wear and tear excepted); provided, however, that
nothing in this Section 5.5 shall prevent a Credit Party from discontinuing the
operation and maintenance of any of its properties if such discontinuance is, in
the reasonable judgment of such Credit Party, desirable in the conduct of such
Credit Party's business and not disadvantageous in any material respect to the
Banks. The Borrower will and will cause each other Credit Party to take all
commercially reasonable steps necessary to protect and maintain its Intellectual
Property Rights. The Borrower will and will cause each other Credit Party to
take all commercially reasonable steps necessary to prosecute any Person
infringing its Intellectual Property Rights and to defend itself against any
Person accusing it of infringing any Person's Intellectual Property Rights.
Section 5.6. Insurance. The Borrower will obtain and at all times
maintain, and will cause each other Credit Party to obtain and at all times
maintain, insurance with insurers believed by it to be responsible and reputable
in such amounts and against such risks as is usually carried by companies
engaged in similar business and owning similar properties in the same general
areas in which it operates.
Section 5.7. Preservation of Legal Existence. The Borrower will
preserve and maintain, and will cause each other Credit Party to preserve and
maintain, its legal existence
52
and all of its rights, privileges and franchises necessary or desirable in the
normal conduct of its business and shall conduct its business in an orderly,
efficient and regular manner.
Section 5.8 Creation of New Credit Parties and Subsidiaries. Except
as required to facilitate a Permitted Acquisition, the Borrower will not create
any Subsidiary, nor will it acquire any business which would constitute a
Subsidiary, without first obtaining the prior written approval of the Required
Banks. The Borrower will cause each new Subsidiary (whether created in
connection with a Permitted Acquisition or otherwise created with the approval
of the Required Banks) to execute and deliver to the Agent, for the benefit of
the Banks, a Guaranty, a Security Agreement and a Trademark Security Agreement,
each in form and content acceptable to the Agent, whereupon such Subsidiary
shall constitute a Credit Party hereunder. In the event that any such Subsidiary
is organized under a jurisdiction other than the United States of America or a
state thereof, the Agent and the Banks will negotiate in good faith with the
Borrower and such Subsidiary to include provisions in such Subsidiary's Guaranty
designed to prevent deemed distributions to the Borrower under Section 956 of
the Code; provided, however, that such provisions shall preserve the maximum
security in such Subsidiary and its assets for the Agent and the Banks possible
in connection with such considerations; provided, further, that neither the
Agent nor any Bank shall be responsible to the Borrower, any Credit Party, any
such Subsidiary or any other Person for the sufficiency of such provisions to
accomplish their stated purpose.
Section 5.9 Minimum Debt Service Coverage Ratio. As of each Covenant
Computation Date occurring during the period specified in the table below, the
Borrower will maintain the Debt Service Coverage Ratio of the Consolidated Group
at not less than the ratio set forth opposite the applicable period below:
Period Ratio
------ -----
Closing Date through and including 1.05 to 1.00
January 4, 2004
January 5, 2004 and thereafter 1.25 to 1.00
Section 5.10 Maximum Senior Leverage Ratio. As of each Covenant
Computation Date, the Borrower will maintain the Senior Leverage Ratio of the
Consolidated Group at not more than 2.00 to 1.00.
Section 5.11 Maximum Total Leverage Ratio. As of each Covenant
Computation Date occurring during the period specified in the table below, the
Borrower will maintain the Total Leverage Ratio of the Consolidated Group at not
more than the ratio set forth opposite the applicable period below:
53
Period Ratio
------ -----
Closing Date through and including July 3.25 to 1.00
13, 2003
July 14, 2003 and thereafter 3.00 to 1.00
Section 5.12. Minimum Tangible Net Worth. As of each Covenant
Computation Date occurring during the period specified in the table below, the
Borrower will maintain the Tangible Net Worth of the Consolidated Group at not
less than the amount set forth opposite the applicable period below:
Period Amount
------ ------
Closing Date through and including July $35,000,000
13, 2003
July 14, 2003 through and including $40,000,000
January 4, 2004
January 5, 2004 through and including $50,000,000
January 2, 2005
January 3, 2005 and thereafter $60,000,000
Section 5.13 Establishment and Maintenance of Lockbox and Cash
Management Arrangements. Not later than ninety (90) days following the Closing
Date, the Borrower shall have established and thereafter shall maintain lockbox
and cash management arrangements satisfactory to the Agent with one or more
financial institutions satisfactory to the Agent and shall, concurrently with
the establishment thereof, provide documentation satisfactory to the Agent
evidencing such arrangements.
Section 5.14 Landlord Waivers. Not later than ninety (90) days
following the Closing Date, the Borrower will have obtained and delivered to the
Agent landlord and/or warehouseman lien waivers, as appropriate, for each
location where any Collateral is located that is not owned by a Credit Party,
such waivers to be in form and substance satisfactory to the Agent. After the
expiration of such ninety (90) day period, all otherwise Eligible Inventory
located at any such non-owned location for which an appropriate waiver has not
been obtained will no longer constitute Eligible Inventory and will continue not
to constitute Eligible Inventory unless and until such waiver is obtained.
ARTICLE VI
54
NEGATIVE COVENANTS
So long as any Note or any Letter of Credit shall remain unpaid or
outstanding or any Commitment shall be outstanding, the Borrower will comply
with the following requirements, unless the Required Banks shall otherwise
consent in writing:
Section 6.1. Liens. The Borrower will not, and will not permit any
other Credit Party to, create, incur or suffer to exist any mortgage, deed of
trust, pledge, lien, security interest, assignment or transfer upon or of any
assets of any Credit Party, now owned or hereafter acquired, to secure any
indebtedness; excluding from the operation of the foregoing (herein "Permitted
Liens"):
(a) mortgages, deeds of trust, pledges, liens, security interests and
assignments in existence on the date hereof and listed in Schedule 6.1
(including any subsequent extension or renewal of such mortgages, deeds of
trust, pledges, liens, security interests and assignments to the extent (i)
the related extension or renewal of the Debt secured thereby is otherwise
permitted under this Agreement, (ii) the principal amount secured thereby
is not increased above the amount outstanding immediately prior to such
extension or renewal, and (iii) the property subject thereto is not
increased);
(b) liens for taxes or assessments or other governmental charges to
the extent not required to be paid by Section 5.4;
(c) materialmen's, merchants', carriers', worker's, repairer's, or
other like liens arising in the ordinary course of business to the extent
not required to be paid by Section 5.4;
(d) pledges or deposits to secure obligations under worker's
compensation laws, unemployment insurance and social security laws, or to
secure the performance of bids, tenders, contracts (other than for the
repayment of borrowed money) or leases or to secure statutory obligations
or surety or appeal bonds, or to secure indemnity, performance or other
similar bonds in the ordinary course of business;
(e) zoning restrictions, easements, licenses, restrictions on the use
of real property or minor irregularities in title thereto, which do not
materially impair the use of such property in the operation of the business
of any Credit Party or the value of such property for the purpose of such
business;
(f) liens and security interests granted to the Banks pursuant to any
of the Security Documents;
(g) purchase money mortgages, liens or security interests, including
conditional sale agreements, capital lease liabilities or other title
retention agreements and leases which are in the nature of title retention
agreements, upon or in property
55
acquired after the date hereof by a Credit Party, or mortgages, liens or
security interests existing in such property at the time of the acquisition
thereof, provided that:
(i) no such mortgage, lien or security interest extends or shall
extend to or cover any property of a Credit Party other than the
property then being acquired; and
(ii) the aggregate principal amount of the indebtedness secured
by any such mortgage, lien or security interest shall not exceed the
cost of such property so acquired in connection therewith;
(h) bankers' liens, rights of set off or similar rights as to
accounts maintained with a financial institution;
(i) licenses, leases or subleases granted to other Persons if and to
the extent such licenses, leases and subleases do not interfere in any
material respect with the business of any Credit Party or any of their
respective Subsidiaries and does not diminish the value of, or impair any
right of the Agent or the Banks in or to any Collateral (as such term is
defined in the applicable Security Agreement); and
(j) liens in addition to those described in Section 6.1(a) through
(i) securing an aggregate principal Debt amount not at any time exceeding
$250,000.
Section 6.2. Indebtedness. The Borrower will not, and will not permit
any other Credit Party to, incur, create, assume, permit or suffer to exist, any
indebtedness or liability on account of deposits or advances or any indebtedness
for borrowed money, or any other indebtedness or liability evidenced by notes,
bonds, debentures or similar obligations, except:
(a) Obligations arising hereunder;
(b) Subordinated Debt; together with any extension, renewal or
replacement thereof (so long as such indebtedness is not increased above
the amount outstanding immediately prior to giving effect to any such
extension, renewal or replacement);
(c) indebtedness in existence on the date hereof and listed in
Schedule 6.2; together with any extension, renewal or replacement thereof
(so long as such indebtedness is not increased above the amount outstanding
immediately prior to giving effect to any such extension, renewal or
replacement);
(d) Capital Leases and indebtedness of a Credit Party secured by
security interests permitted by Section 6.1(g), not to exceed $5,000,000 in
the aggregate at any time outstanding;
56
(e) other indebtedness which, when added to the outstanding principal
balance of the indebtedness described in subsection (c) above does not
exceed $2,000,000 in the aggregate at any time outstanding;
(f) intercompany loans by and between the Credit Parties; and
(g) Permitted Rate Hedging Obligations (whether contingent or
otherwise).
Section 6.3. Guaranties. The Borrower will not, and will not permit
any other Credit Party to, assume, guarantee, endorse or otherwise become
directly or contingently liable in connection with any obligations of any other
Person, except:
(a) the Guaranties;
(b) the endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business; and
(c) guaranties, endorsements and other direct or contingent
liabilities in connection with the obligations of other Persons in
existence on the date hereof and listed in Schedule 6.3; together with any
extension, renewal or replacement thereof (so long as such indebtedness is
not increased above the amount outstanding immediately prior to giving
effect to any such extension, renewal or replacement).
Section 6.4. Investments. The Borrower will not, and will not permit
any other Credit Party to, purchase or hold beneficially any stock or other
securities or evidences of indebtedness of, make or permit to exist any loans or
advances to, or create or acquire any Subsidiary or make any investment or
acquire any interest whatsoever in, any other Person, except:
(a) investments in direct obligations of the United States of America
or any agency or instrumentality thereof whose obligations constitute the
full faith and credit obligations of the United States of America having a
maturity of one (1) year or less, commercial paper issued by a U.S.
corporation rated "A-1" or "A-2" by Standard & Poors Rating Group or "P-1"
or "P-2" by Xxxxx'x Investors Service, investments in money market mutual
funds whose underlying assets are exclusively investments which would
otherwise be permitted investments under this Section 6.4(a), or repurchase
agreements, certificates of deposit or bankers' acceptances having a
maturity of one (1) year or less issued by members of the Federal Reserve
System having deposits in excess of $500,000,000 (which certificates of
deposit or bankers' acceptances are fully insured by the Federal Deposit
Insurance Corporation);
(b) travel advances or loans to officers and employees of any Credit
Party not exceeding at any one time an aggregate for all members of the
Consolidated Group of $100,000;
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(c) advances in the form of progress payments, prepaid rent or
security deposits;
(d) investments by any Credit Party in another Credit Party,
including intercompany transfers, advances, loans, guarantees or other
financial accommodations; and
(e) investments constituting Permitted Acquisitions.
Section 6.5. Restricted Payments. The Borrower will not declare or pay
any dividends on any shares of any class of its stock, or directly or indirectly
apply any assets to the redemption, retirement, purchase or other acquisition of
any shares of any class of stock of the Borrower or make any payments or
distributions for any reason to or for the account or benefit of any Affiliate,
except (a) Permitted Distributions, (b) Permitted Management Fee Payments, and
(c) payments owing under transactions with affiliates otherwise permitted by
Section 6.7 hereof.
Section 6.6 Restrictions on Sale and Issuance of Subsidiary Stock. The
Borrower will not:
(a) permit any of its Subsidiaries to issue or sell any shares of any
class of such Subsidiary's stock to any other Person (other than to the
Borrower or a wholly-owned Subsidiary of the Borrower); or
(b) sell, transfer or otherwise dispose of any shares of any class of
stock of any of its Subsidiaries to any other Person (except to a wholly
owned Subsidiary of the Borrower); or
(c) permit any of its Subsidiaries to sell, transfer or otherwise
dispose of any shares of any class of stock of any other Subsidiary of the
Borrower to any other Person (other than to the Borrower or a wholly-owned
Subsidiary of the Borrower);
provided, however, that the foregoing shall not otherwise prohibit a Permitted
Acquisition.
Section 6.7 Transactions With Affiliates. The Borrower will not, and
will not permit any other Credit Party to enter into or be a party to any
transaction with any Affiliate of the Borrower or any such Credit Party that is
not also a Credit Party except in the ordinary course of and pursuant to the
reasonable requirements of such Credit Party's business and upon fair and
reasonable terms that are no less favorable to such Credit Party than would be
obtained in a comparable arms-length transaction with a Person not an Affiliate
of such Credit Party; provided, however, that the foregoing restrictions shall
not prevent any Permitted Distributions or Permitted Management Fee Payments.
Section 6.8. Sale or Transfer of Assets; Suspension of Business
Operations. The Borrower will not, and will not permit any other Credit Party
to, sell, lease, assign, transfer or otherwise dispose of all or a substantial
part of the assets of the Consolidated
58
Group (other than the sale of Inventory in the ordinary course of business),
whether in one transaction or in a series of transactions, to any other Person
and will not liquidate, dissolve or suspend its business operations. For
purposes of the foregoing, a "substantial part" of the Consolidated Group's
assets shall mean assets in excess of 10% of the book value of the Consolidated
Group's assets, determined in accordance with GAAP.
Section 6.9. Consolidation and Merger; Asset Acquisitions. The
Borrower will not, and will not permit any other Credit Party to, consolidate
with or merge into any Person, or permit any other Person to merge into it, or
acquire (in a transaction analogous in purpose or effect to a consolidation or
merger) all or substantially all the assets of any other Person, except for the
merger of any Credit Party into another Credit Party or any Subsidiary into a
Credit Party; provided that such Credit Party survives as the sole remaining
entity.
Section 6.10. Sale and Leaseback. The Borrower will not, and will not
permit any other Credit Party to, enter into any arrangement, directly or
indirectly, with any other Person whereby any Credit Party shall sell or
transfer any real or personal property, whether now owned or hereafter acquired,
and then or thereafter rent or lease as lessee such property or any part thereof
or any other property which a Credit Party intends to use for substantially the
same purpose or purposes as the property being sold or transferred; provided,
however, that, the foregoing shall not prohibit the Borrower's sale and
leaseback of certain real and personal property located in Parkersburg, Ohio
with an aggregate fair market value of not more than two million dollars
($2,000,000).
Section 6.11. Restrictions on Nature of Business. The Borrower will
not, and will not permit any other Credit Party to, engage in any line of
business materially different from that presently engaged in by the Borrower or
any such Credit Party and will not purchase, lease or otherwise acquire assets
not related to its business.
Section 6.12. Accounting. The Borrower will not, and will not permit
any other Credit Party to, adopt any material change in accounting principles,
other than as required by GAAP, and will not adopt, permit or consent to any
change in its fiscal year.
Section 6.13. Capital Expenditures. The Borrower will not, and will
not permit any other Credit Party to, make Capital Expenditures during any
fiscal year of the Borrower in an aggregate amount (for the entire Consolidated
Group) in excess of the Capital Expenditures Threshold; provided, however, that
no such Capital Expenditures shall be permitted to the extent they would result
in a failure of the Borrower to comply with any Financial Covenant or any other
covenant or agreement of the Borrower hereunder.
Section 6.14. Hazardous Substances. The Borrower will not cause or
permit, and will not permit any other Credit Party to cause or permit, any
Hazardous Substances to be disposed of in any manner which might result in any
material liability to any Credit Party on, under or at any real property which
is operated by any Credit Party or in which any Credit Party has any interest.
59
Section 6.15. Subordinated Debt. The Borrower will not, and will not
permit any other Credit Party to, issue any Subordinated Debt without first
obtaining the prior written consent of the Required Banks (it being understood
that any Subordinated Debt for which a Subordination Agreement has been
delivered on and as of the Closing Date shall be deemed permitted by the
Required Banks without further action of the Required Banks) and, if obtained,
shall not (i) make any payment of any principal, interest or fees due under or
acquire any Subordinated Debt in violation of the Subordination Agreement
related thereto, (ii) give security for all or any part of any Subordinated
Debt, (iii) take any action whereby the subordination of any Subordinated Debt
or any part thereof to the Obligations might be terminated, impaired or
adversely affected, (iv) omit to give the Agent prompt written notice of any
default under any Subordinated Debt by reason whereof any Subordinated Debt
might become or be declared to be immediately due and payable, (v) make any
payment in respect of Subordinated Debt other than regularly scheduled principal
or interest payments, (vi) make any payment of any kind in respect of
Subordinated Debt if, after giving effect thereto, such payment would violate
the terms of the Credit Agreement or the Indenture, or (vii) purchase or
otherwise acquire any Subordinated Debt (including, without limitation, any
acquisition of Subordinated Debt pursuant to a Change of Control Offer (as
defined in the Indenture)).
Section 6.16 Amendment of Indenture and Consulting Agreement. The
Borrower will not and will not permit any other Credit Party or any Subsidiary
of the Borrower or any other Credit Party to:
(a) amend, supplement or otherwise modify the Indenture such that
(i) the Obligations fail to constitute Senior Debt (as defined in the
Indenture) for all purposes of the Indenture, or (ii) the subordination
provisions contained therein are otherwise amended to the detriment of the
Agent or any Bank; or
(b) amend, supplement or otherwise modify the Consulting Agreement
if a Default or Event of Default has occurred and is then continuing or,
at any time, amend, supplement or otherwise modify the Consulting
Agreement such that amounts payable by any one or more of the Credit
Parties thereunder increases by more than 10% per annum.
ARTICLE VII
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
Section 7.1. Events of Default. "Event of Default", wherever used
herein, means any one of the following events:
(a) default in the payment of any principal of any Note when it
becomes due and payable, including, without limitation, any such payment
becoming due and payable under Section 2.15(c); or
60
(b) default in the payment of any interest on any Note or in the
payment of any fees, costs or expenses required to be paid by the
Borrower under any Loan Document and the continuation of such default
for more than three (3) Business Days; or
(c) default in the performance, or breach, of Section 5.1, any
Financial Covenant or any covenant or agreement on the part of the
Borrower contained in Article VI; or
(d) the Obligations or any portion thereof shall cease to
constitute "Senior Debt" for all purposes of the Indenture or shall
otherwise cease to have the benefit of the subordination provisions in
Article 10 of the Indenture; or
(e) default in the performance, or breach, of any covenant or
agreement of the Borrower in this Agreement (other than a covenant or
agreement a default in whose performance or whose breach is elsewhere
in this Section 7.1 specifically dealt with) or default in the
performance, or breach, of any covenant or agreement of any Credit
Party in any other Loan Document and the continuance of such default
or breach for a period of thirty (30) calendar days after the Borrower
or any such Credit Party has or should reasonably have had notice
thereof; or
(f) any Credit Party shall be or become insolvent, or admit in
writing its inability to pay its debts as they mature, or make an
assignment for the benefit of creditors; or any Credit Party shall
apply for or consent to the appointment of any receiver, trustee, or
similar officer for it or for all or any substantial part of its
property; or such receiver, trustee or similar officer shall be
appointed without the application or consent of such Credit Party; or
any Credit Party shall institute (by petition, application, answer,
consent or otherwise) any insolvency, reorganization, arrangement,
readjustment of debt, dissolution, liquidation or similar proceeding
relating to it under the laws of any jurisdiction; or any such
proceeding shall be instituted (by petition, application or otherwise)
against such Credit Party; or any judgment, writ, warrant of
attachment or execution or similar process shall be issued or levied
against a substantial part of the property of an Credit Party and such
judgment, writ, or similar process shall not be released, vacated or
fully bonded within sixty (60) calendar days after its issue or levy;
or
(g) a petition naming any Credit Party as debtor shall be filed
under the United States Bankruptcy Code; or
(h) any representation or warranty made by any Credit Party in
any Loan Document or by the Borrower (or any of its officers) in any
request for a Borrowing, or in any other certificate, instrument, or
statement contemplated by or made or delivered pursuant to or in
connection with any Loan Document, shall prove to have been incorrect
in any material respect when made; or
61
(i) the rendering against any Credit Party of a final judgment,
decree or order for the payment of money in excess of $2,000,000
(unless the payment of such judgment is fully insured) and the
continuance of such judgment, decree or order unsatisfied and in
effect for any period of thirty (30) consecutive calendar days without
a stay of execution; or
(j) a writ of attachment, garnishment, levy or similar process
shall be issued against or served on the Agent or any Bank with
respect to (i) any property of any Credit Party in the possession of
the Agent or any such Bank, or (ii) any indebtedness of the Agent or
any such Bank to any Credit Party; or
(k) a default shall occur under the Indenture and any applicable
period of grace, if any, specified therein shall expire; or
(l) a default under any material credit agreement, security
agreement, mortgage or deed of trust, bond, debenture, note,
securitization agreement or other evidence of indebtedness or similar
obligation of any Credit Party or under any indenture or other
instrument under which any such evidence of indebtedness or similar
obligation has been issued or by which it is governed (other than one
for which a default in the performance thereof or whose breach is
elsewhere in this Section 7.1 specifically dealt with) and the
expiration of the applicable period of grace, if any, specified in
such evidence of indebtedness, indenture or other instrument; or
(m) any Guarantor shall attempt to reject, terminate or rescind
its Guaranty or shall contest in any manner the validity, binding
nature or enforceability of its Guaranty; or
(n) any Reportable Event, which the Agent or the Required Banks
determine in good faith may constitute grounds for the termination of
any Pension Plan or for the appointment by the appropriate United
States District Court of a trustee to administer any Pension Plan,
shall have occurred and be continuing thirty (30) days after written
notice to such effect shall have been given to the Borrower by the
Agent; or a trustee shall have been appointed by an appropriate United
States District Court to administer any Pension Plan; or the Pension
Benefit Guaranty Corporation shall have instituted proceedings to
terminate any Pension Plan or to appoint a trustee to administer any
Pension Plan; or the Borrower, any other Credit Party or any of their
respective ERISA Affiliates shall have filed for a distress
termination of any Pension Plan under Title IV of ERISA; or the
Borrower, any other Credit Party or any of their respective ERISA
Affiliates shall have failed to make any quarterly contribution
required with respect to any Pension Plan under Section 412(m) of the
Code, which the Agent or the Required Banks determine in good faith
may by itself, or in combination with any such failures that the Agent
or the Required Banks may determine are likely to occur in the future,
result in the imposition of a lien on the Borrower's or any other
Credit Party's assets in favor of the Pension Plan;
62
or any withdrawal, partial withdrawal, reorganization or other event
occurs with respect to a Multiemployer Plan which results or could
reasonably be expected to result in a material liability of the
Borrower or any other Credit Party to the Multiemployer Plan under
Title IV of ERISA; or
(o) any Credit Party shall liquidate, dissolve, terminate or
suspend its business operations or otherwise fail to operate its
business in the ordinary course, or shall sell all or substantially
all of its assets, unless such Credit Party is merged into, or its
business becomes part of, another Credit Party; or
(p) any Change of Control shall occur.
Section 7.2. Rights and Remedies. Upon the occurrence of an Event
of Default or at any time thereafter until such Event of Default is cured or
waived to the written satisfaction of the Required Banks, the Agent or the
Required Banks may (and, upon written request of the Required Banks the Agent
shall) exercise any or all of the following rights and remedies:
(a) by notice to the Borrower, declare the Commitments to be
terminated, whereupon the same shall forthwith terminate;
(b) by notice to the Borrower, declare the entire unpaid
principal amount of the Notes, all interest accrued and unpaid
thereon, and all other amounts payable under this Agreement to be
forthwith due and payable, whereupon the Notes, all such accrued
interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower;
(c) by notice to the Borrower, demand payment by the Borrower of
funds with respect to each outstanding Letter of Credit in an amount
sufficient to fund a cash escrow equal to the Letter of Credit Amount,
which cash escrow will be held by the Agent (or its designee), without
interest, as a pledged cash collateral account and applied to
reimbursement of all drafts submitted under outstanding Letters of
Credit;
(d) without notice to the Borrower and without further action,
apply any and all monies owing by any Bank to any Credit Party to the
payment of the Notes, including interest accrued thereon, and of all
other Obligations then owing by the Borrower hereunder;
(e) exercise and enforce the rights and remedies available to
the Banks under any Loan Document;
(f) exercise any other rights and remedies available to any Bank
by law or agreement.
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Notwithstanding the foregoing, upon the occurrence of an Event of Default
described in Section 7.1(f), (g) or (j) the entire unpaid principal amount of
the Notes, all interest accrued and unpaid thereon, and all other amounts
payable under this Agreement shall be immediately due and payable without
presentment, demand, protest or notice of any kind.
ARTICLE VIII
AGREEMENT AMONG BANKS AND AGENT
Section 8.1. Authorization; Powers; Agent for Collateral
Purposes. Each Bank irrevocably appoints and authorizes the Agent to act as
administrative agent for and on behalf of such Bank to the extent provided
herein, in any Loan Documents or in any other document or instrument delivered
hereunder or in connection herewith, and to take such other actions as may be
reasonably incidental thereto. The Agent agrees to act as administrative agent
for each Bank upon the express conditions contained in this Article VIII, but in
no event shall the Agent constitute a fiduciary of any Bank, nor shall the Agent
have any fiduciary responsibilities in respect of any Bank. In furtherance of
the foregoing, and not in limitation thereof, each Bank irrevocably (a)
authorizes the Agent to execute and deliver and perform those obligations under
each of the Loan Documents to which the Agent is a party as are specifically
delegated to the Agent, and to exercise all rights, powers and remedies as may
be specifically delegated hereunder or thereunder, together with such additional
powers as may be reasonably incidental thereto, (b) appoints the Agent as
nominal beneficiary or nominal secured party, as the case may be, under the Loan
Documents and all related UCC financing statements, and (c) authorizes the Agent
to act as collateral agent of and for such Bank for purposes of holding,
perfecting and disposing of Collateral under the Loan Documents. As to any
matters not expressly provided for by the Loan Documents, the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Required Banks or, if so
required pursuant to Section 9.2, upon the instructions of all Banks; provided,
however, that except for action expressly required of the Agent hereunder, the
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall be indemnified to its satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action, and the Agent shall not in any
event be required to take any action which is contrary to the Loan Documents or
applicable law.
Section 8.2. Application of Proceeds. The Agent, after deduction
of any costs of collection, as provided in Section 8.5, shall remit to each Bank
(to the extent a Bank is to share therein) that Bank's pro rata share of all
payments of principal, interest and fees payable hereunder in accordance with
such Bank's appropriate Percentage with respect to the Facility under which such
payments are received; provided, however, that all payments received after the
occurrence of an Event of Default, after application to the costs and expenses
incurred by the Agent or any Bank in collection thereof (as contemplated in
Section 8.5), shall be allocated to the Banks in accordance with their Default
Percentages. Notwithstanding anything to the contrary in this Agreement or any
other Loan Document (i)
64
all payments received by the Agent or any Bank prior to the occurrence of an
Event of Default in respect of Permitted Rate Hedging Obligations shall be
remitted directly to LaSalle and no other Bank shall be entitled to any portion
thereof, and (ii) all payments received by the Agent or any Bank on and after
the occurrence of an Event of Default shall constitute payment on the
Obligations, with each Bank entitled to their respective Default Percentage
thereof. Each Bank's interest under the Loan Documents shall be payable solely
from payments, collections and proceeds actually received by the Agent under the
Loan Documents; and the Agent's only liability to a Bank with respect to any
such payments, collections and proceeds shall be to account for such Bank's
Percentage (or Default Percentage, as the case may be) of such payments,
collections and proceeds in accordance with this Agreement. If the Agent is
required for any reason to refund any such payments, collections or proceeds,
each Bank will refund to the Agent, upon demand, its Percentage (or Default
Percentage, as the case may be) of such payments, collections or proceeds,
together with its Percentage (or Default Percentage, as the case may be) of
interest or penalties, if any, payable by the Agent in connection with such
refund. If any Bank has wrongfully refused to fund its Percentage of any
Borrowing, or if the outstanding principal balance of the Advances made by any
Bank under a Facility is for any other reason less than its respective
Percentage of the aggregate principal balance of all Advances under that
Facility, the Agent may remit payments received by it to the other Banks until
such payments have reduced the aggregate amounts owed by the Borrower to the
extent that the aggregate amount of the Advances owing to such Bank hereunder
are equal to its Percentage of the aggregate amounts of the Advances owing under
the applicable Facility to all of the Banks hereunder. The foregoing provision
is intended only to set forth certain rules for the application of payments,
proceeds and collections in the event that a Bank has breached its obligations
hereunder and shall not be deemed to excuse any Bank from such obligations.
Section 8.3. Exculpation. The Agent shall not be liable for any
action taken or omitted to be taken by the Agent in connection with the Loan
Documents, except for its own gross negligence or willful misconduct. The Agent
shall be entitled to rely upon advice of counsel concerning legal matters, the
advice of independent public accountants with respect to accounting matters and
advice of other experts as to any other matters and upon any Loan Document and
any schedule, certificate, statement, report, notice or other writing which it
reasonably believes to be genuine or to have been presented by a proper Person.
Neither the Agent nor any of its directors, officers, employees or agents shall
be responsible or in any way liable for (a) any recitals, representations or
warranties contained in, or for the execution, validity, genuineness,
effectiveness or enforceability of any Loan Document, or any other instrument or
document delivered hereunder or in connection herewith, (b) the validity,
genuineness, perfection, effectiveness, enforceability, existence, value or
enforcement of any Collateral or (c) any action taken or omitted by it. The
designation of LaSalle Bank as administrative agent hereunder shall in no way
impair or affect any of the rights and powers of, or impose any duties or
obligations upon, LaSalle Bank in its individual capacity as a Bank hereunder.
Section 8.4. Use of the Term "Agent". The term "Agent" is used
herein in reference to the Agent merely as a matter of custom. It is intended to
reflect only an
65
administrative relationship between the Agent and the Banks as an independent
contracting party. However, the obligations of the Agent shall be limited to
those expressly set forth herein and in no event shall the use of such term
create or imply any fiduciary relationship or any other obligation arising under
the general law of agency.
Section 8.5. Reimbursement for Costs and Expenses. All payments,
collections and proceeds received or effected by the Agent may be applied first
to pay or reimburse the Agent for all reasonable costs and expenses at any time
incurred by or imposed upon the Agent in connection with this Agreement or any
other Loan Document (including but not limited to all reasonable attorney's fees
(including allocated costs of in-house counsel), foreclosure expenses and
advances made to protect the security of any Collateral, but excluding any
costs, expenses, damages or liabilities arising from the gross negligence or
willful misconduct of the Agent. If the Agent does not receive payments,
collections or proceeds sufficient to cover any such costs and expenses within
five (5) days after their incurrence or imposition, each Bank shall, upon
demand, remit to the Agent such Bank's Default Percentage of the difference
between (i) such costs and expenses and (ii) such payments, collections and
proceeds, together with interest on such amount for each day following the
thirtieth day after demand therefor until so remitted at a rate equal to the
Federal Funds Rate for each such day.
Section 8.6. Payments Received Directly by Banks. If any Bank
shall obtain any payment or other recovery (whether voluntary, involuntary, by
application of offset or otherwise) on account of any Facility or on account of
any fees under this Agreement (other than through distributions made in
accordance with Section 8.2 hereof) in excess of such Bank's applicable
Percentage with respect to such Facility (or such Bank's Default Percentage, if
applicable), such Bank shall promptly give notice of such fact to the Agent and
shall promptly remit to the Agent such amount as shall be necessary to cause the
remitting Bank to share such excess payment or other recovery ratably with each
of the Banks in accordance with their respective Percentages, (or Default
Percentages, as the case may be) together with interest for each day on such
amount until so remitted at a rate equal to the Federal Funds Rate for each such
day; provided, however, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such remitting Bank or holder, the
remittance shall be restored to the extent of such recovery.
Section 8.7. Indemnification. Each Bank severally (but not
jointly) hereby agrees to indemnify and hold harmless the Agent, as well as the
Agent's employees, officers and directors, ratably according to their respective
Default Percentages from and against any and all losses, liabilities (including
liabilities for penalties), actions, suits, judgment, demands, damages, costs,
disbursements, or expenses (including attorneys' fees and expenses) (including
allocated costs of in-house counsel)) of any kind or nature whatsoever, which
are imposed on, incurred by, or asserted against the Agent's employees, officers
or directors in any way relating to or arising out of the Loan Documents, or as
a result of any action taken or omitted to be taken by the Agent; provided,
however, that no Bank shall be liable for any portion of any such losses,
liabilities (including liabilities for penalties), actions, suits, judgments,
demands, damages, costs disbursements, or expenses resulting
66
from the gross negligence or willful misconduct of the Agent. Notwithstanding
any other provision of the Loan Documents, the Agent shall in all cases be fully
justified in failing or refusing to act hereunder unless it shall be indemnified
to its satisfaction by the Banks against any and all liability and expense that
may be incurred by it by reason of taking or continuing to take any such action.
Section 8.8. Agent and Affiliates. LaSalle Bank shall have the
same rights and powers in its capacity as Bank hereunder as any other Bank, and
may exercise or refrain from exercising the same as though it were not the Agent
hereunder and LaSalle Bank and its affiliates may accept deposits from and
generally engage in any kind of business with any Credit Party or any Affiliate
of any Credit Party as fully as if LaSalle Bank were not the Agent hereunder.
Section 8.9. Credit Investigation. Each Bank acknowledges that
it has made such inquiries and taken such care on its own behalf as would have
been the case had its Commitments been granted and its Advances made directly by
such Bank to the Borrower without the intervention of the Agent or any other
Bank. Each Bank agrees and acknowledges that neither the Agent nor any other
Bank makes any representations or warranties about the creditworthiness of any
Credit Party or any other party to this Agreement or with respect to the
legality, validity, sufficiency or enforceability of this Agreement, any Loan
Document, any Collateral or any other instrument or document delivered hereunder
or in connection herewith.
Section 8.10. Defaults. The Agent shall have no duty to inquire
into any performance or failure to perform by the Borrower and shall not be
deemed to have knowledge of the occurrence of a Default or an Event of Default
(other than under Sections 7.1(a) or 7.1(b)) hereof unless the Agent has
received notice from a Bank or the Borrower specifying the occurrence of such
Default or Event of Default. In the event that the Agent receives such a notice
of the occurrence of a Default or an Event of Default, the Agent shall give
prompt notice thereof to the Banks. In the event of any Default, the Agent shall
(subject to Section 8.7 hereof) (a) in the case of a Default that constitutes an
Event of Default, not take any the actions referred to in Section 7.2(b) hereof
unless so directed by the Required Banks, and (b) in the case of any Default,
take such actions with respect to such Default as shall be directed by the
Required Banks; provided that, unless and until the Agent shall have received
such directions, the Agent may take any action, or refrain from taking any
action, with respect to such Default of Event of Default as it shall deem
advisable in the best interest of the Banks.
Section 8.11. Obligations Several. The obligations of each Bank
hereunder are the several obligations of such Bank, and neither any Bank nor the
Agent shall be responsible for the obligations of any other Bank hereunder, nor
will the failure by the Agent or any Bank to perform any of its obligations
hereunder relieve the Agent or any other Bank from the performance of its
respective obligations hereunder. Nothing contained in this Agreement, and no
action taken by any Bank or the Agent pursuant hereto or in connection herewith
or pursuant to or in connection with the Loan Documents shall be deemed to
67
constitute the Banks, together or with or without the Agent, as a partnership,
association, joint venture, or other entity.
Section 8.12. Sale or Assignment; Addition of Banks. Except as
permitted under the terms and conditions of this Section 8.12 or, with respect
to participations, under Section 8.13, no Bank may sell, assign or transfer its
rights or obligations under this Agreement or its interest in any Note. Any
Bank, with the prior written consent of the Agent and, so long as no Event of
Default shall then have occurred and be continuing, the Borrower (which consent
neither the Agent nor the Borrower will unreasonably withhold), may assign all
or a portion (provided such portion is not less than $5,000,000) of such Bank's
Notes, Advances, and Commitments to a domestic or foreign bank (having a branch
office in the United States), an insurance company or other financial
institution (an "Applicant") on any date (the "Adjustment Date") selected by
such Bank. Upon receipt of such approval and to confirm the status of each
additional Bank as a party to this Agreement and to evidence the assignment in
accordance herewith:
(a) the Agent, the Borrower, the assigning Bank and such
Applicant shall, on or before the Adjustment Date, execute and deliver
to the Agent an Assignment Certificate in substantially the form of
Exhibit K (an "Assignment Certificate");
(b) the Borrower will execute and deliver to the Agent, for
delivery by the Agent in accordance with the terms of the Assignment
Certificate, (i) new Notes payable to the order of the Applicant in
amounts corresponding to the applicable Commitments acquired by such
Applicant and (ii) new Notes payable to the order of the assigning
Bank in amounts corresponding to the retained Commitments. Such new
Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of the Notes to be replaced by such new Notes, shall
be dated the effective date of such assignment and shall otherwise be
in the form of the Notes to be replaced thereby. Such new Notes shall
be issued in substitution for, but not in satisfaction or payment of,
the Notes being replaced thereby and such new Notes shall be treated
as Notes for purposes of this Agreement; and
(c) the assigning Bank shall pay to the Agent an administrative
fee of $3,500.
Upon the execution and delivery of such Assignment Certificate and such new
Notes, and effective as of the effective date thereof (i) this Agreement shall
be deemed to be amended to the extent, and only to the extent, necessary to
reflect the addition of such additional Bank and the resulting adjustment of the
Percentages arising therefrom, (ii) the assigning Bank shall be relieved of all
obligations hereunder to the extent of the reduction of the assigning Bank's
Percentages, and (iii) the Applicant shall become a party hereto and shall be
entitled to all rights, benefits and privileges accorded to a Bank herein and in
each other Loan Document or other document or instrument executed pursuant
hereto and subject to all obligations of a Bank hereunder, including, without
limitation, the right to approve or disapprove actions which, in accordance with
the terms hereof, require the approval of the
68
Required Banks or all Banks. In order to facilitate the addition of additional
Banks hereto, the Borrower (with respect to itself and with respect to each
other Credit Party) and the Banks shall cooperate fully with the Agent in
connection therewith and shall provide all reasonable assistance requested by
the Agent relating thereto, including, without limitation, the furnishing of
such written materials and financial information regarding the Credit Parties as
the Agent may reasonably request, the execution of such documents as the Agent
may reasonably request with respect thereto, and the participation by officers
of the Borrower and the Banks in a meeting or teleconference call with any
Applicant upon the request of the Agent.
Section 8.13. Participation. In addition to the rights granted in
Section 8.12, each Bank may grant participations in all or a portion of its
Notes, Advances and Commitments to any domestic or foreign commercial bank
(having a branch office in the United States), insurance company, financial
institution or an affiliate of such Bank. No holder of any such participation
shall be entitled to require any Bank to take or omit to take any action
hereunder. The Banks shall not, as among the Borrower, the Agent and the Banks,
be relieved of any of their respective obligations hereunder as a result of any
such granting of a participation. The Borrower hereby acknowledges and agrees
that any participant described in this Section 8.13 may rely upon, and possess
all rights under, any opinions, certificates, or other instruments or documents
delivered under or in connection with any Loan Document. Except as set forth in
this Section 8.13, no Bank may grant any participation in the Notes, Advances or
Commitments.
Section 8.14. Withholding Tax Exemption. At least five (5)
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Bank, each Bank that is not incorporated under
the laws of the United States of America, or a state thereof, agrees that it
will deliver to each of the Borrower and the Agent two duly completed copies of
United States Internal Revenue Service Form W8ECI or W8BEN, certifying in either
case that such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Bank which so delivers a Form W8ECI or W8BEN further undertakes to
deliver to each of the Borrower and the Agent two additional copies of such form
(or a successor form) on or before the date that such form expires (currently,
three successive calendar years for Form W8ECI and one calendar year for Form
W8BEN) or becomes obsolete or after the occurrence of any event requiring a
change in the most recent forms so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the Borrower
or the Agent, in each case certifying that such Bank is entitled to receive
payments under this Agreement and the Notes without deduction or withholding of
any United States federal income taxes, unless an event (including without
limitation any change in treaty, law or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Bank from duly completing
and delivering any such form with respect to it and such Bank advises the
Borrower and the Agent that it is not capable of receiving payments without any
deduction or withholding of United States federal income tax.
69
Section 8.15. Borrower not a Beneficiary or Party. Except with
respect to the limitation of liability applicable to the Banks under Section
8.11, and the Borrower's duties and obligations owing to the Agent and the Banks
under Sections 8.12 and 8.13, the provisions and agreements in this Article VIII
are solely among the Banks and the Agent and the Borrower shall not be
considered a party thereto or a beneficiary thereof.
ARTICLE IX
MISCELLANEOUS
Section 9.1. No Waiver; Cumulative Remedies. No failure or delay
on the part of the Agent or any Bank in exercising any right, power or remedy
under the Loan Documents shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy
under the Loan Documents. The remedies provided in the Loan Documents are
cumulative and not exclusive of any remedies provided by law.
Section 9.2. Amendments, Requested Waivers, Etc. No amendment,
modification, termination or waiver of any provision of any Loan Document or
consent to any departure by the Borrower therefrom shall be effective unless the
same shall be in writing and signed by the Required Banks and, if the rights or
duties of the Agent, the Swingline Bank or Letter of Credit Bank are affected
thereby, by the Agent, the Swingline Bank or the Letter of Credit Bank, as the
case may be; provided, however, that no amendment, modification, termination,
waiver or consent shall do any of the following unless the same shall be in
writing and signed by the Agent and each Bank affected thereby (and, as to
clauses (e), (f), (g) and (h) hereof, all Banks shall be deemed affected): (a)
change the amount of any Commitment (except as permitted in accordance with
Section 8.12), (b) increase any Commitment Amount, (c) reduce the amount of any
principal of or interest due on any Advances, the Commitment Fees or any Letter
of Credit Fees payable to a Bank hereunder, (d) postpone any date fixed for any
payment of principal of or interest on any outstanding Advances or the
Commitment Fees or Letter of Credit Fees payable to a Bank hereunder, (e) change
the definition of "Required Banks," (f) amend this Section 9.2 or any other
provision of this Agreement requiring the consent or other action of the
Required Banks or any particular Bank, (g) release any Guaranty or (h) release,
subordinate or terminate any security interest in or mortgage lien on any
Collateral if the fair market value of all Collateral so affected during any
calendar year exceeds $1,000,000 in the aggregate. Any waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given. No notice to or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.
Section 9.3. Addresses for Notices, Etc. Except as otherwise
expressly provided herein, all notices, requests, demands and other
communications provided for under the Loan Documents shall be in writing and
mailed or delivered to the applicable parties at their respective addresses set
forth on the execution pages hereto, or as to each party, at such
70
other address as shall be designated by such party in a written notice to the
other party complying as to delivery with the terms of this Section 9.3. All
such notices, requests, demands and other communications, when delivered, shall
be effective upon actual delivery and when mailed, shall be effective one
Business Day after the date sent by nationally recognized overnight mail courier
or delivery service, addressed as aforesaid, except that notices or requests to
the Agent or any Bank pursuant to any of the provisions of Article II shall not
be effective until received by the Agent or such Bank.
Section 9.4. Costs and Expenses. The Borrower will reimburse the
Agent for (a) any and all reasonable out-of-pocket costs and expenses, including
without limitation attorneys' fees and expenses (including allocated costs of
in-house counsel), lien and UCC searches, title and recording expenses and other
similar expenses, environmental audit, appraisal and other underwriting related
expenses, paid or incurred by the Agent in connection with the preparation,
filing or recording of the Loan Documents, the syndication of loans under this
Agreement and any other document or agreement related hereto or thereto, and the
transactions contemplated hereby (which amount shall be paid on the Closing Date
or as soon thereafter as demand is made therefor) and the negotiation of any
amendments, modifications or extensions to or of any of the foregoing documents,
instruments or agreements and the preparation of any and all documents necessary
or desirable to effect such amendments, modifications or extensions, (b)
customary transaction fees of the Agent incurred in connection with the loans
contemplated hereby, (c) reasonable fees in connection with any audits or
inspections by the Agent of any Collateral or the operations or business of the
Borrower or any other Credit Party, whether conducted at the Borrower's
premises, any other Credit Party's premises or at the Agent's premises (subject
to the limitations imposed in Section 2.13(c)), and (d) any and all other
reasonable out-of-pocket costs and expenses incurred by the Agent in connection
with any of the transactions contemplated hereby. In addition to the foregoing,
the Borrower will reimburse the Agent and each Bank for any and all costs and
expenses incurred by the Agent or any Bank in connection with the enforcement of
any of the rights or remedies of the Agent or the Banks under any of the Loan
Documents or under applicable law, whether or not suit is filed with respect
thereto.
Section 9.5. Indemnity. In addition to the payment of expenses
pursuant to Section 9.4, the Borrower agrees to indemnify, defend and hold
harmless the Agent, each Bank and each of their respective participants, parent
corporations, subsidiary corporations, affiliated corporations, successor
corporations, and all present and future officers, directors, employees and
Agent (the "Indemnitees"), from and against (i) any claim, loss or damage to
which any Indemnitee may be subjected as a result of any past, present or future
existence, use, handling, storage, transportation or disposal of any Hazardous
Substance by any Credit Party or with respect to any property owned, leased or
controlled by any Credit Party, (ii) any and all transfer taxes, documentary
taxes, assessments or charges made by any governmental authority (excluding
income or gross receipts taxes) by reason of the execution and delivery of this
Agreement and the other Loan Documents or the making of any Advances and (iii)
any and all liabilities, losses, damages, penalties, judgments, suits, claims,
costs and expenses of any kind or nature whatsoever (including, without
limitation, the reasonable fees
71
and disbursements of counsel) in connection with any investigative,
administrative or judicial proceedings, whether or not such Indemnitee shall be
designated a party thereto, which may be imposed on, incurred by or asserted
against such Indemnitee, in any manner relating to or arising out of or in
connection with, the making of any Advances or entering into this Agreement or
any other Loan Documents or the use or intended use of the proceeds of the
Advances, excepting, however, from the foregoing any such liabilities, losses,
damages, penalties, judgments, suits, claims, costs and expenses resulting from
the willful misconduct or gross negligence of any Indemnitee. If any
investigative, judicial or administrative proceeding arising from any of the
foregoing is brought against any Indemnitee, upon request of such Indemnitee,
the Borrower, or counsel designated by the Borrower and satisfactory to the
Indemnitee, will resist and defend such action, suit or proceeding to the extent
and in the manner directed by the Indemnitee, at the Borrower's sole cost and
expense. Each Indemnitee will use its best efforts to cooperate in the defense
of any such action, suit or proceeding. If the foregoing undertaking to
indemnify, defend and hold harmless may be held to be unenforceable because it
violates any law or public policy, the Borrower shall nevertheless make the
maximum contribution to the payment and satisfaction of each of the indemnified
liabilities contemplated hereby which is permissible under applicable law. The
obligations of the Borrower under this Section 9.5 shall survive termination of
this Agreement and the discharge of the Obligations.
Section 9.6. Execution in Counterparts. This Agreement and other
Loan Documents may be executed in any number of counterparts, each of which when
so executed and delivered shall be deemed to be an original and all of which
counterparts, taken together, shall constitute but one and the same instrument.
Section 9.7. Governing Law; Jurisdiction; Waiver of Jury Trial.
(a) Governing Law. The Loan Documents shall be governed by, and
construed in accordance with, the laws of the State of Minnesota
(other than its conflicts of laws rules), except to the extent the law
of any other jurisdiction applies as to the perfection or enforcement
of the Banks' security interest in or lien on any Collateral and
except to the extent expressly provided to the contrary in any Loan
Document.
(b) Jurisdiction. The Borrower hereby irrevocably submits to the
jurisdiction of any state or federal court sitting in Minneapolis or
St. Xxxx, Minnesota in any action or proceeding arising out of or
relating to this Agreement or any of the other Loan Documents, and the
Borrower hereby irrevocably agrees that all claims in respect of such
action or proceeding may be heard and determined in such state or
federal court. The Borrower hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum
to the maintenance of such action or proceeding. The Borrower
irrevocably consents to the service of copies of the summons and
complaint and any other process which may be served in any such action
or proceeding by the mailing of copies of such process to the Borrower
at its addresses specified in Section 9.3 above. The Borrower agrees
that a final judgment
72
in any such action or proceeding may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law. Nothing in this Section 9.7(b) shall affect the right of the
Agent or any Bank to serve legal process in any other manner permitted
by law or affect the right of the Agent or any Bank to bring any
action or proceeding against the Borrower or their property in the
courts of other jurisdictions.
(c) WAIVER OF JURY TRIAL. THE BORROWER AND THE BANKS HEREBY
IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT OR ANY
INSTRUMENT OR DOCUMENT DELIVERED THEREUNDER.
Section 9.8. Integration; Inconsistency. This Agreement,
together with the Loan Documents, comprise the final and complete integration of
all prior expressions by the parties hereto with respect to the subject matter
hereof and shall constitute the entire agreement among the parties hereto with
respect to such subject matter, superseding all prior oral or written
understandings. If any provision of a Loan Document is inconsistent with or
conflicts with a comparable or similar provision appearing in this Agreement,
the comparable or similar provision in this Agreement shall govern.
Section 9.9. Agreement Effectiveness. This Agreement shall
become effective upon delivery of fully executed counterparts hereof to each of
the parties hereto.
Section 9.10. Advice from Independent Counsel. The parties hereto
understand that this Agreement is a legally binding agreement that may affect
such party's rights. Each party hereto represents to the other that it has
received legal advice from counsel of its choice regarding the meaning and legal
significance of this Agreement and that it is satisfied with its legal counsel
and the advice received from it.
Section 9.11. Judicial Interpretation. Should any provision of
this Agreement require judicial interpretation, it is agreed that a court
interpreting or construing the same shall not apply a presumption that the terms
hereof shall be more strictly construed against any person by reason of the rule
of construction that a document is to be construed more strictly against the
person who itself through its agent prepared the same, it being agreed that all
parties hereto have participated in the preparation of this Agreement.
Section 9.12. Binding Effect; No Assignment by Borrower. This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Banks, the Agent and their respective successors and assigns; provided, except
that the Borrower may not assign any or all of its rights or obligations
hereunder or any of its interest herein without the prior written consent of all
Banks.
Section 9.13. Severability of Provisions. Any provision of this
Agreement which is prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
73
Section 9.14. Headings. Article and Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose.
Section 9.15 Counterparts. This Agreement and the other Loan
Documents may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts of this Agreement or such other Loan Document, as the case may be,
taken together, shall constitute but one and the same instrument.
[Signature Pages Follow]
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.
Address: LUIGINO'S, INC.
000 Xxxx Xxxxxx Xxxxx By /s/ Xxxxxx X. Xxxxxxx
Xxxxxx, Xxxxxxxxx 00000 -------------------------------
Attn: Xxxxxx X. Xxxxxxx, Chief Financial Name Xxxxxx X. Xxxxxxx
Officer --------------------------
Telecopy No. (000) 000-0000 Title Chief Financial Officer
--------------------------
[Signature Page 1 of 5 to Credit Agreement]
Address: LASALLE BANK NATIONAL
00 Xxxxx Xxxxx Xxxxxx ASSOCIATION, as Bank, Letter of Credit
Suite 1400 Bank, Swingline Bank and Agent
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attn: Division Manager By /s/ Xxxx X. Xxxxxxxx
------------------------- ----------------------------------
Telecopy No. (000) 000-0000 Name Xxxx X. Xxxxxxxx
-----------------------------
Title Senior Vice President
-----------------------------
Revolving Commitment: $10,833,333.33
Revolving Percentage: 33.333333333%
Swingline Commitment: $5,000,000
Swingline Percentage: 100%
Term Commitment: $14,166,666.67
Term Percentage: 33.333333333%
[Signature Page 2 of 5 to Credit Agreement]
Address: U.S. BANK NATIONAL ASSOCIATION
BC-MN-H03P
000 Xxxxxxxx Xxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxx, Commercial By /s/ Xxxxx X. Xxxxxxxx
Banking Officer ---------------------------------
Telecopy No. 000-000-0000 Name Xxxxx X. Xxxxxxxx
---------------------------
Title Commercial Banking Officer
---------------------------
Revolving Commitment: $9,750,000
Revolving Percentage: 30%
Term Commitment: $12,750,000
Term Percentage: 30%
[Signature Page 3 of 5 to Credit Agreement]
Address: NATIONAL CITY BANK OF
One North Franklin MICHIGAN/ILLINOIS
Suite 3600
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx Xxxxx By /s/ Xxxxxxx X. Xxxxx
--------------------- ------------------------------
Telecopy No. (000)000-0000 Name Xxxxxxx X. Xxxxx
--------------------------
Title Vice President
--------------------------
Revolving Commitment: $6,500,000
Revolving Percentage: 20%
Term Commitment: $8,500,000
Term Percentage: 20%
[Signature Page 4 of 5 to Credit Agreement]
Address: THE NORTHERN TRUST COMPANY
00 X. XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: X. Xxxxx By /s/ Xxxxxxx X. Xxxxx
----------------------- --------------------------------
Telecopy No. 000-000-0000 Name Xxxxxxx X. Xxxxx
---------------------------
Title Vice President
---------------------------
Revolving Commitment: $5,416,666.67
Revolving Percentage: 16.666666667%
Term Commitment: $7,083,333.33
Term Percentage: 16.666666667%
[Signature Page 5 of 5 to Credit Agreement]
