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AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 9, 1998
among
XXXXXX CO., INC.
as Borrower,
XXXXX MACHINE CO., INC.,
as Guarantor,
THE LENDERS NAMED HEREIN
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
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TABLE OF CONTENTS
1. AMOUNT AND TERMS OF CREDIT.............................................1
1.1 Credit Facilities................................................1
1.2 Letters of Credit................................................3
1.3 Prepayment.......................................................3
1.4 Use of Proceeds..................................................5
1.5 Interest.........................................................5
1.6 Eligible Accounts................................................6
1.7 Eligible Inventory...............................................6
1.8 Fees.............................................................7
1.9 Cash Management Systems; Daily Sweep.............................7
1.10 Receipt of Payments..............................................7
1.11 Application and Allocation of Payments...........................8
1.12 Loan Account and Accounting......................................8
1.13 Indemnity........................................................9
1.14 Access...........................................................9
1.15 Taxes...........................................................10
1.16 Capital Adequacy; Increased Costs; Illegality...................11
2. CONDITIONS PRECEDENT..................................................13
2.1 Conditions to Loans on or after Restatement Date................13
2.2 Further Conditions to Each Loan and Credit Advance..............13
3. REPRESENTATIONS AND WARRANTIES........................................14
3.1 Corporate Existence; Compliance with Law........................14
3.2 Executive Offices...............................................14
3.3 Corporate Power, Authorization, Enforceable Obligations 15
3.4 Financial Statements............................................15
3.5 Collateral Reports..............................................16
3.6 Material Adverse Effect.........................................16
3.7 Ownership of Property; Liens....................................16
3.8 Restrictions; No Default........................................17
3.9 Labor Matters...................................................17
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3.10 Ventures, Subsidiaries and Affiliates; Outstanding
Stock and Indebtedness..........................................17
3.11 Government Regulation...........................................18
3.12 Margin Regulations..............................................18
3.13 Taxes...........................................................18
3.14 ERISA...........................................................19
3.15 No Litigation...................................................20
3.16 Brokers.........................................................21
3.17 Employment Matters..............................................21
3.18 Patents, Trademarks, Copyrights and Licenses....................21
3.19 Full Disclosure.................................................21
3.20 Hazardous Materials.............................................22
3.21 Insurance Policies..............................................22
3.22 Deposit and Disbursement Accounts...............................22
3.23 Government Contracts............................................22
3.24 Customer and Trade Relations....................................22
3.25 Agreements and Other Documents..................................22
3.26 FEIN............................................................23
4. FINANCIAL STATEMENTS AND INFORMATION..................................23
4.1 Reports and Notices.............................................23
4.2 Communication with Accountants..................................23
5. AFFIRMATIVE COVENANTS.................................................24
5.1 Maintenance of Existence and Conduct of Business................24
5.2 Payment of Obligations..........................................24
5.3 Books and Records...............................................25
5.4 Litigation......................................................25
5.5 Insurance.......................................................25
5.6 Compliance with Laws............................................26
5.7 Supplemental Disclosure.........................................27
5.8 Employee Plans..................................................27
5.9 Environmental Matters...........................................27
5.10 Landlords' Agreements, Bailee Letters and Mortgagee Agreements..27
5.11 Leased Locations of Collateral..................................28
6. NEGATIVE COVENANTS....................................................28
6.1 Mergers, Subsidiaries, Etc......................................28
6.2 Investments; Loans and Advances.................................28
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6.3 Indebtedness....................................................28
6.4 Employee Loans and Affiliate Transactions.......................29
6.5 Capital Structure and Business..................................29
6.6 Guaranteed Indebtedness.........................................29
6.7 Liens...........................................................29
6.8 Sale of Assets..................................................30
6.9 ERISA...........................................................30
6.10 Financial Covenants.............................................31
6.11 Hazardous Materials.............................................31
6.12 Sale-Leasebacks.................................................31
6.13 Cancellation of Indebtedness....................................31
6.14 Restricted Payments.............................................31
6.15 Leases..........................................................31
6.16 Fiscal Year.....................................................32
6.17 Change of Corporate Name or Location............................32
6.18 Cash Management.................................................32
6.19 Technology Development Arrangements.............................32
7. TERM..................................................................33
7.1 Termination.....................................................33
7.2 Survival of Obligations Upon Termination of
Financing Arrangements..........................................33
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES................................33
8.1 Events of Default...............................................33
8.2 Remedies........................................................36
8.3 Waivers by Borrower and Guarantor...............................36
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT...................37
9.1 Assignment and Participations...................................37
9.2 Appointment of Agent............................................38
9.3 Agent's Reliance, Etc...........................................39
9.4 GE Capital and Affiliates.......................................40
9.5 Lender Credit Decision..........................................40
9.6 Indemnification.................................................41
9.7 Successor Agent.................................................41
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9.8 Setoff and Sharing of Payments..................................42
9.9 Disbursement of Funds...........................................42
9.10 Advances; Payments; Information; Non-Funding Lenders............43
10. SUCCESSORS AND ASSIGNS................................................46
10.1 Successors and Assigns..........................................46
11. MISCELLANEOUS.........................................................46
11.1 Complete Agreement; Modification of Agreement...................46
11.2 Amendments and Waivers..........................................47
11.3 Fees and Expenses...............................................48
11.4 No Waiver.......................................................49
11.5 Remedies........................................................49
11.6 Severability....................................................49
11.7 Conflict of Terms...............................................50
11.8 Authorized Signature............................................50
11.9 GOVERNING LAW...................................................50
11.10 Notices.........................................................51
11.11 Section Titles..................................................51
11.12 Counterparts....................................................51
11.13 WAIVER OF JURY TRIAL............................................51
11.14 Press Releases..................................................52
11.15 Reinstatement...................................................52
12. GUARANTY..............................................................52
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INDEX OF EXHIBITS AND SCHEDULES
Exhibit A - Form of Notice of Revolving Credit Advance
Exhibit B - Form of Borrowing Base Certificate
Exhibit C - Form of Revolving Credit Note
Exhibit D - Form of Term Note
Exhibit E - Form of Security Agreement
Schedule 1.1(a) - Responsible Individual
Schedule 1.9 - List of Bank Accounts
Schedule 3.2 - Executive Offices
Schedule 3.4(A) - Financial Statements
Schedule 3.7 - Real Estate and Leases
Schedule 3.9 - Labor Matters
Schedule 3.10 - Ventures, Subsidiaries and Affiliates;
Outstanding Stock
Schedule 3.13 - Tax Matters
Schedule 3.14 - ERISA Plans
Schedule 3.15 - Litigation
Schedule 3.16 - Brokers Fees
Schedule 3.17 - Employment Matters
Schedule 3.18 - Intellectual Property
Schedule 3.20 - Hazardous Materials
Schedule 3.21 - Insurance Policies
Schedule 3.22 - Deposit and Disbursement Accounts
Schedule 3.23 - Government Contracts
Schedule 3.25 - Material Agreements
Schedule 3.28 - Fein Numbers
Schedule 5.1. - Trade Names
Schedule 6.3. - Indebtedness
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.4(b) - Employee Compensation
Schedule 6.7 - Existing Liens
Schedule 8.1 - Additional Terms
Schedule 11.8 - Authorized Signatures
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Schedule A (Recitals) - Definitions
Schedule B (Section 1.2) - Letters of Credit
Documents
Schedule C (Section 1.6) - Eligible Accounts
Schedule D (Section 1.7) - Eligible Inventory
Schedule E (Section 1.9) - Cash Management Systems
Schedule F (Section 2.1(b)) - Schedule of Additional
Closing Documents
Schedule G (Section 4.1(a)) - Financial Statements --
Reporting
Schedule H (Section 4.1(b)) - Collateral Reports
Schedule I (Section 6.11) - Financial Covenants
Schedule J (Section 11.10) - Notice Addresses
Schedule K (Section 9.10(a)(iii)) - Wire Transfer Account
Information
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This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of March 9, 1998
among XXXXXX CO., INC., a Wisconsin corporation ("Borrower"), XXXXX MACHINE CO.,
INC., a Nevada corporation, as Guarantor ("Guarantor"), GENERAL ELECTRIC CAPITAL
CORPORATION, a New York corporation (in its individual capacity, "GE Capital"),
for itself, as Lender, and as Agent for Lenders, and the other Lenders signatory
hereto.
RECITALS
WHEREAS, Borrower and Guarantor are parties to that certain Credit
Agreement, dated as of June 30, 1995 (as amended through the date hereof, the
"Existing Credit Agreement"); and
WHEREAS, Borrower and Guarantor desire to amend and restate the Existing
Credit Agreement in full; and
WHEREAS, the Loans shall continue to be evidenced by the Notes and the
Obligations shall continue to be secured by the Collateral Documents;
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Schedule A. All Schedules, Exhibits and other attachments
hereto, or expressly identified to this Agreement, are incorporated herein by
reference, and taken together, shall constitute but a single agreement. These
Recitals shall be construed as part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto hereby amend and restate the Existing Credit Agreement in full as
follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility. (i) Upon and subject to the terms and
conditions hereof, each Lender, severally and not jointly, agrees to make
available, from time to time, until the Commitment Termination Date, for
Borrower's use and upon the request of Borrower therefor, its Pro Rata Share of
advances (each, a "Revolving Credit Advance") in an aggregate amount which shall
not at any given time exceed the lesser at such time of (A) the Maximum
Revolving Credit Loan and (B) an amount equal to the Borrowing Base less the
amount of the Letter of Credit Obligations at such time ("Borrowing
Availability"); provided, however, that in no event shall the Revolving Credit
Loan of any Lender exceed its Revolving Credit Loan Commitment less its Pro Rata
Share of the Letter of Credit Obligations at such time. Until all amounts
outstanding in respect of the Revolving Credit Loan shall become due and payable
on the Commitment Termination Date, subject to the terms and conditions hereof
Borrower may from time to time borrow, repay and reborrow under this Section
1.1(a). Each Revolving Credit Advance shall be made on notice by Borrower to the
individual at the Agent identified on Schedule 1.1(a) at the address specified
thereon, given no later than 11:00 a.m. (Chicago time) on the Business Day of
the proposed Revolving Credit Advance. Each such notice (a "Notice of Revolving
Credit Advance") shall be substantially in the form of Exhibit A hereto,
specifying therein the requested date, the amount of such Revolving Credit
Advance, and such other information as may be required by Agent and shall be
given in writing (by telecopy or overnight courier) or by telephone confirmed
immediately in writing. Agent shall be entitled to rely upon, and shall be fully
protected under this Agreement in relying upon, any Notice of Revolving Credit
Advance believed by Agent to be genuine and to assume that each Person executing
and delivering the same was duly authorized unless the responsible individual
acting thereon for Agent shall have, at the time of reliance thereon, actual
knowledge to the contrary.
(ii) Borrower shall execute and deliver to each Lender a note to evidence
the Revolving Credit Loan, such note to be in the principal amount of the
Revolving Credit Loan Commitment of such Lender, dated the Closing Date and
substantially in the form of Exhibit C hereto (each a "Revolving Credit Note"
and, collectively, the "Revolving Credit Notes"). The Revolving Credit Notes
shall represent the obligation of Borrower to pay the amount of the Revolving
Credit Loan Commitment or, if less, the aggregate unpaid principal amount of all
Revolving Credit Advances made by Lenders to Borrower and all other obligations
together with interest thereon as prescribed in Section 1.5. The date and amount
of each Revolving Credit Advance and each payment of principal with respect
thereto shall be recorded on the books and records of Agent, which books and
records shall constitute prima facie evidence of the accuracy of the information
therein recorded. The entire unpaid balance of the Revolving Credit Loan shall
be immediately due and payable on the Commitment Termination Date.
(b) Term Loan. Upon and subject to the terms and conditions hereof, each
Lender having a Term Loan Commitment severally and not jointly agrees to make a
term loan to Borrower on the Closing Date (all such term loans, collectively,
being the "Term Loan") in the original principal amount of its Term Loan
Commitment. The Term Loan shall be evidenced by Term Notes substantially in the
form of Exhibit D, and Borrower shall execute and deliver the same to each such
Lender.
The principal amount of the Term Loan shall be payable in sixteen (16)
consecutive quarterly installments on the last day of March, June, September and
December of each year, commencing
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September 30, 1996, in the following respective scheduled installments:
Installments 1 through 4 $375,000 each;
Installments 5 through 12 $500,000 each; and
Installments 13 through 16 $625,000 each.
Installment 16 shall be due and payable on June 30, 2000 and shall be in the
amount of $625,000 or the then remaining principal balance of the Term Loan if
different than such amount. Amounts paid on the Term Loan may not be reborrowed.
1.2 Letters of Credit. Subject to the terms and conditions of Schedule B,
Agent agrees to issue or guaranty Letters of Credit for the benefit of Borrower
in an aggregate face amount outstanding at any one time not to exceed two
million dollars ($2,000,000).
1.3 Prepayment. (a) In the event that the outstanding balance of the
Revolving Credit Loan shall, at any time, exceed the lesser at such time of (i)
the Maximum Revolving Credit Loan and (ii) the Borrowing Base less the
outstanding amount of the Letter of Credit Obligations, Borrower shall
immediately repay the Revolving Credit Loan in the amount of such excess. In the
event that the sum of the outstanding balance of the Revolving Credit Loan plus
the Letter of Credit Obligations shall at any time exceed the Borrowing Base,
Borrower shall immediately repay the Revolving Credit Loan in the amount of such
excess.
(b) Immediately upon receipt by Borrower of net proceeds (after deducting
all expenses, including commissions, taxes payable, and amounts payable to
holders of prior liens, if any, and an appropriate reserve for income taxes in
connection therewith) of any asset disposition (other than asset dispositions
permitted by Section 6.8), Borrower shall prepay the Loans with such net
proceeds in accordance with clause (e) below.
(c) In the event that Borrower receives proceeds from the issuance of any
Stock or from the exercise of any warrants, options, rights to subscribe or
similar rights to the Borrower's Stock, no later than the third Business Day
following the date of receipt of such proceeds Borrower shall prepay the Loans
in an amount equal to all such proceeds, net of underwriting discounts and
commissions and other reasonable costs associated therewith, which prepayment
shall be applied in accordance with clause (e) below. Notwithstanding the
foregoing, any such proceeds from the IPO or any warrants exercised in
connection with the IPO shall be applied promptly unpon receipt as follows:
first, up to $15,000,000 to make a contribution to Borrower's pension plan,
second, to repay unpaid principal and accrued and unpaid interest on the
Revolving Loan, and third, within 60 days of receipt of such proceeds, to pay
principal and accrued and unpaid interest on the Senior Subordinated Notes and,
pending such application to the Senior
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Subordinated Notes, to be invested in overnight U.S. Treasury obligations.
Notwithstanding any term or provision of this Agreement to the contrary, at any
time that the Borrower has investments permitted under clause third above, and
pending application thereof to the Senior Subordinated Notes, the Borrower shall
not be permitted to obtain further Revolving Credit Advances and in lieu thereof
shall utilize such investments to fund working capital expenditures until the
same have been disbursed in full.
(d) Borrower shall have the right at any time on thirty (30) days' prior
written notice to Agent to voluntarily:
(i) prepay all or part of the Term Loan, provided that any such voluntary
prepayment shall be applied to scheduled installments of the Term Loan in
inverse order of maturity and shall be accompanied by the payment of the fee
required by Section 1.8(c), if any; and
(ii) reduce or terminate the Revolving Credit Commitment and in
connection therewith, prepay all or a portion of the Revolving Credit Loan,
provided that any such voluntary reduction shall be accompanied by the payment
of the fee required by Section 1.8(c) in connection therewith, if any, and
provided further, that if the Revolving Credit Commitment is terminated in
whole, contemporaneously therewith Borrower shall prepay in full the unpaid
principal balance and accrued and unpaid interest of the Term Loan, together
with the fee required by Section 1.8(c) in connection therewith, if any.
(e) Any prepayments required under clauses (b) or (c) above to be applied
under this clause (e) shall be applied in satisfaction of the Obligations as
follows:
(i) First, to accrued interest on the Term Loan and to prepay
scheduled installments of such Term Loan in inverse order of maturity
until the Term Loan shall have been prepaid in full;
(ii) Second, to the principal amount of the Revolving Credit Loan
outstanding and accrued interest with respect thereto until the same
shall have been paid in full, and the Revolving Credit Loan Commitment
shall automatically be permanently reduced by the amount of such
prepayments;
(iii) Third, to cash collateralize the undrawn portion of any
Letters of Credit; and
(iv) Fourth, to all remaining Obligations.
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(f) Any prepayments required under clause (c) above to be applied under
this clause (f) shall be applied in satisfaction of the Obligations as follows:
(i) First, to the principal amount of the Revolving Credit Loan
outstanding and accrued interest with respect thereto until the same
shall have been paid in full;
(ii) Second, to the Term Loan and accrued interest with respect
thereto, to prepay scheduled installments of such Term Loan in inverse
order of maturity until the Term Loan shall have been prepaid in full;
(iii) Third, to cash collateralize the undrawn portion of any
Letters of Credit; and
(iv) Fourth, to all remaining Obligations.
(g) Any cash collateral required by Section 1.3(e)or (f) shall be held by
the Agent in a separate cash collateral account subject to the security interest
and lien of the Security Agreement and the terms of Schedule B. The Borrower
shall have no access to such account.
1.4 Use of Proceeds. Borrower shall utilize the proceeds of Revolving
Credit Advances solely for working capital and general corporate needs (but
excluding in any event any direct or indirect redemption, purchase, repayment or
defeasance of any Stock of Borrower).
1.5 Interest. (a) Borrower shall pay interest to Agent, for the ratable
benefit of Lenders in accordance with the various Loans being made by each
Lender, in arrears on each applicable Interest Payment Date, at a rate equal to:
(A) with respect to the Revolving Credit Loan, the Index Rate plus the
Applicable Margin, based on the amounts outstanding from time to time under the
Revolving Credit Loan; and (B) with respect to the Term Loan, the Index Rate
plus the Applicable Margin.
(b) If any payment on the Loans becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
(c) All computations of interest shall be made by Agent on the basis of a
three hundred and sixty (360) day year, in each case for the actual number of
days occurring in the period for which such interest is payable. The Index Rate
shall be determined each day based upon the Index Rate as in effect for such
day. Each determination by Agent of an interest rate hereunder shall be
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conclusive and binding for all purposes, absent manifest error or bad faith.
(d) So long as any Event of Default shall have occurred and be
continuing, and after written notice from Agent to Borrower, the interest rates
applicable to the Loans and any other Obligations shall be increased by two
percent (2%) per annum above the rate of interest otherwise applicable hereunder
("Default Rate").
(e) Notwithstanding anything to the contrary set forth in this Section
1.5, if, at any time until payment in full of all of the Obligations, the rate
of interest payable hereunder exceeds the highest rate of interest permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable hereto (the "Maximum Lawful Rate"), then in such
event and so long as the Maximum Lawful Rate would be so exceeded, the rate of
interest payable hereunder shall be equal to the Maximum Lawful Rate; provided,
however, that if at any time thereafter the rate of interest payable hereunder
is less than the Maximum Lawful Rate, Borrower shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by Agent, on behalf of Lenders, from the making of such advances
hereunder is equal to the total interest which would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, the interest rate payable hereunder shall be the rate of
interest provided in Sections 1.5(b) through (d) of this Agreement, unless and
until the rate of interest again exceeds the Maximum Lawful Rate, in which event
this paragraph shall again apply. In no event shall the total interest received
by any Lender pursuant to the terms hereof exceed the amount which such Lender
could lawfully have received had the interest due hereunder been calculated for
the full term hereof at the Maximum Lawful Rate. In the event the Maximum Lawful
Rate is calculated pursuant to this paragraph, such interest shall be calculated
at a daily rate equal to the Maximum Lawful Rate divided by the number of days
in the year in which such calculation is made. In the event that a court of
competent jurisdiction, notwithstanding the provisions of this Section 1.5 (e),
shall make a final determination that a Lender has received interest hereunder
or under any of the other Loan Documents in excess of the Maximum Lawful Rate,
Agent shall, to the extent permitted by applicable law, promptly apply such
excess first to any interest due and not yet paid hereunder in respect of the
Loans, then to the outstanding principal of the Loans, then to Fees and any
other unpaid Obligations and thereafter shall refund any excess to Borrower or
as a court of competent jurisdiction may otherwise order.
1.6 Eligible Accounts. Based on the most recent Borrowing Base
Certificate delivered by Borrower to Agent and on
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other information available to Agent, Agent shall determine which of Borrower's
Accounts shall be deemed to be "Eligible Accounts" for purposes of determining
the amounts, if any, to be advanced to Borrower under the Revolving Credit Loan.
In determining whether a particular Account constitutes an Eligible Account,
Agent shall not include any Accounts of Guarantor or any Account which meets any
of the criteria set forth in Schedule C.
1.7 Eligible Inventory. Based on the most recent Borrowing Base
Certificate delivered by Borrower to Agent and on other information available to
Agent, Agent shall determine which of Borrower's Inventory shall be deemed to be
"Eligible Inventory" for purposes of determining the amounts, if any, to be
advanced to Borrower under the Revolving Credit Loan. In determining whether any
particular Inventory constitutes Eligible Inventory, Agent shall not include
Inventory of Guarantor or Inventory which meets any of the criteria set forth in
Schedule D.
1.8 Fees. (a) Borrower has paid to GE Capital, individually, the fees
specified in that certain Fee Letter, dated as of June 30, 1995 (the "GE Capital
Fee Letter"), at the times specified for payment therein.
(b) As additional compensation for Lenders' costs and risks in making the
Revolving Credit Loan available to Borrower, Borrower agrees to pay to Agent,
for the ratable benefit of Lenders, in arrears, on the first Business Day of
each month prior to the Commitment Termination Date and on the Commitment
Termination Date, a fee for Borrower's non-use of available funds (the "Non-use
Fee") in amount equal to one-quarter of one percent (1/4%) per annum (calculated
on the basis of a 360 day year for actual days elapsed) of the difference
between the respective daily averages of (i) the Maximum Revolving Credit Loan
(as it may be adjusted from time to time hereunder) and (ii) the amount of the
Revolving Credit Loan outstanding during the period for which the Non-use Fee is
due.
(c) If, prior to July 1, 1999, Borrower shall prepay the Term Loan or
permanently reduce the amount of the Revolving Credit Loan Commitment pursuant
to Section 1.3(d) or after the occurrence of a voluntary Event of Default by
Borrower, Borrower shall pay to the Agent, for the benefit of Lenders as
liquidated damages and compensation for the costs of being prepared to make
funds available to Borrower hereunder, an amount determined by multiplying one
percent (1%) by the amount of the Term Loan so prepaid or the amount of the
Revolving Credit Commitment so reduced.
1.9 Cash Management Systems; Daily Sweep. On or prior to the Closing
Date, Borrower will establish and will maintain until the Termination Date, the
cash management systems described on Schedule E. The Revolving Credit Loan shall
be repaid at the
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close of each Business Day to the extent of the balance in the Collection
Account as more fully described on Schedule E.
1.10 Receipt of Payments. Borrower shall make each payment under this
Agreement not later than noon (Chicago time) on the day when due in lawful money
of the United States of America in immediately available funds to the Collection
Account. For purposes of computing interest and fees and determining the amount
of funds available for borrowing by Borrower pursuant to Section 1.1(a), (a) all
payments (including cash sweeps) consisting of cash, wire or electronic
transfers in immediately available funds shall be deemed received on the date of
deposit thereof in the Collection Account and notice to Agent of such deposit
before the time specified above, and (b) all payments consisting of checks,
drafts, or similar non-cash items shall be deemed received on the day of receipt
of good funds following deposit of any such payment in the Collection Account
and notice to Agent of such deposit.
1.11 Application and Allocation of Payments. Borrower hereby irrevocably
waives the right to direct the application of any and all payments at any time
or times hereafter received from or on behalf of Borrower, and Borrower hereby
irrevocably agrees that Agent shall have the continuing exclusive right to apply
any and all such payments against the then due and payable Obligations of
Borrower, to cash collateralize the undrawn portion of any Letters of Credit,
and in repayment of the Revolving Credit Loan and Term Loan as Agent may deem
advisable notwithstanding any previous entry by Agent upon the Loan Account or
any other books and records. In the absence of a specific determination by Agent
with respect thereto, the same shall be applied in the following order: (i) to
then due and payable expenses of the Agent and to then due and payable Fees;
(ii) to then due and payable interest payments on the Revolving Credit Loan and
Term Loan; (iii) to principal payments on the Revolving Credit Loan and, in
inverse order of maturities, to installments of the Term Loan; (iv) to cash
collateralize the undrawn portion of any Letters of Credit, and (v) to all other
then due and payable Obligations. Agent is authorized to, and at its option may,
make or cause to be made Revolving Credit Advances on behalf of Borrower for
payment of all Fees, expenses, Charges, costs, principal, interest, or other
Obligations owing by Borrower under this Agreement or any of the other Loan
Documents if and to the extent Borrower fails to promptly pay any such amounts
as and when due, even if such Revolving Credit Advance would cause total
Revolving Credit Advances to exceed Borrowing Availability or the Maximum
Revolving Credit Loan amount. At Agent's option and to the extent permitted by
law, any advances so made shall be deemed Revolving Credit Advances constituting
part of the Revolving Credit Loan hereunder. Any cash collateral required by
this Section 1.11 shall be held by the Agent in a separate cash collateral
account subject to the security interest and lien of the Security Agreement and
the terms of Schedule B. The Borrower shall have no access to such account.
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1.12 Loan Account and Accounting. Agent shall maintain a loan account
(the "Loan Account") on its books to record: (a) all Revolving Credit Advances
and the Term Loan, (b) all payments made by Borrower, and (c) all other
appropriate debits and credits as provided in this Agreement with respect to the
Revolving Credit Loan and Term Loan or any other Obligations. All entries in the
Loan Account shall be made in accordance with Agent's customary accounting
practices as in effect from time to time. Borrower shall pay all Obligations as
such amounts become due or are declared due pursuant to the terms of this
Agreement.
The balance in the Loan Account, as recorded on Agent's most recent
printout or other written statement, shall be presumptive evidence of the
amounts due and owing to Agent and Lenders by Borrower; provided, that, any
failure to so record or any error in so recording shall not limit or otherwise
affect Borrower's obligations to pay the Obligations. Agent shall render to
Borrower a monthly accounting of transactions under the Revolving Credit Loan
and Term Loan setting forth the balance of the Loan Account. Each and every such
accounting shall (absent manifest error) be deemed final, binding and conclusive
upon Borrower in all respects as to all matters reflected therein, unless
Borrower, within thirty (30) days after the date any such accounting is
rendered, shall notify Agent in writing of any objection which Borrower may have
to any such accounting, describing the basis for such objection with
specificity. In that event, only those items expressly objected to in such
notice shall be deemed to be disputed by Borrower.
1.13 Indemnity. (a) Borrower shall jointly and severally indemnify and
hold each of Agent, Lenders, their respective Affiliates, and each such Person's
respective officers, directors, employees, attorneys, agents and representatives
(each, an "Indemnified Person"), harmless from and against any and all suits,
actions, proceedings, claims, damages, losses, liabilities and expenses
(including attorneys' fees and disbursements and other costs of investigation or
defense, including those incurred upon any appeal) which may be instituted or
asserted against or incurred by any such Indemnified Person as the result of
credit having been extended under this Agreement and the other Loan Documents or
in connection with or arising out of the transactions contemplated hereunder and
thereunder or any actions or failures to act in connection therewith, including
any and all Environmental Liabilities and Costs; provided, that Borrower shall
not be liable for any indemnification to such Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results solely from such Indemnified Person's gross negligence or
willful misconduct, as finally determined by a court of competent jurisdiction
after all possible appeals have been exhausted. NEITHER AGENT, ANY LENDER, NOR
ANY OTHER INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER
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PARTY HERETO, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON
OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR
INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF CREDIT HAVING BEEN EXTENDED OR TERMINATED UNDER THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS.
(b) Borrower hereby acknowledges and agrees that Agent (i) is not now,
and has not ever been, in control of any of the Real Estate or Borrower's
affairs, and (ii) does not have the capacity through the provisions of the Loan
Documents to influence Borrower's conduct with respect to the ownership,
operation or management of any of its Real Estate.
1.14 Access. (a) Borrower shall provide full access during normal
business hours, from time to time upon three (3) Business Days' prior notice, to
Agent and any of its officers, employees and agents, as frequently as Agent
determines, in its reasonable discretion, to be appropriate (unless a Default or
Event of Default shall have occurred and be continuing, in which event Agent and
its officers, employees, designees, agents and representatives shall have access
at any and all times and without any advance notice), to the properties,
facilities, books, records, suppliers, customers, advisors and employees
(including officers) of Borrower, to the Collateral, to the accountants
(including Xxxxxx Xxxxxxxx LLP) of Borrower and to the work papers of such
accountants, if available. Without limiting the generality of the foregoing,
Borrower shall (i) permit Agent, and any of its officers, employees, agents and
representatives, to inspect, audit and make extracts from all of Borrower's
records, files and books of account and (ii) permit Agent, and any of its
officers, employees, agents and representatives, to inspect, review and evaluate
the Accounts and Inventory at Borrower's locations and at premises not owned by
or leased to Borrower. Borrower shall make available to Agent and its counsel,
as quickly as is possible under the circumstances, originals or copies of all
books, records, board minutes, contracts, insurance policies, environmental
audits, business plans, files, financial statements (actual and pro forma),
filings with federal, state and local regulatory agencies, and other instruments
and documents which Agent may request. Borrower shall deliver any document or
instrument necessary for Agent, as it may from time to time request, to obtain
records from any service bureau or other Person which maintains records for
Borrower, and shall maintain records or supporting documentation on media,
including computer tapes and discs owned by Borrower. Borrower shall instruct
their certified public accountants to make available to Agent such information
and records as Agent may request. Upon the occurrence and during the continuance
of a Default or Event of Default, Guarantor shall comply with this Section 1.14
with respect to it on the same terms and conditions as required of Borrower.
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(b) A fee of $400 per day per individual (plus all out-of-pocket costs
and expenses) in connection with Agent's field examinations permitted under
Section 1.14(a) above and Section 4(c) of the Security Agreement shall be
charged against the Revolving Credit Facility in connection with each field
audit conducted after the Closing Date.
1.15 Taxes. (a) Any and all payments by Borrower hereunder or under the
Revolving Credit Notes or Term Notes shall be made, in accordance with this
Section 1.15, free and clear of and without deduction for any and all present or
future Taxes. If Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable hereunder or under the Revolving Credit Notes or
Term Notes, (i) the sum payable shall be increased as much as shall be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 1.15) Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had no
such deductions been made, (ii) Borrower shall make such deductions, and (iii)
Borrower shall pay the full amount deducted to the relevant taxing or other
authority in accordance with applicable law.
(b) Borrower shall indemnify and pay, within ten (10) days of demand
therefor, Agent and each Lender for the full amount of Taxes (including any
Taxes imposed by any jurisdiction on amounts payable under this Section 1.15)
paid by Agent or such Lender, as appropriate, and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto.
(c) Within thirty (30) days after the date of any payment of Taxes,
Borrower shall furnish to Agent, at its address referred to in Section 11.10,
the original or a certified copy of a receipt evidencing payment thereof.
1.16 Capital Adequacy; Increased Costs; Illegality. (a) In the event that
any Lender shall have determined that the adoption after the date hereof of any
law, treaty, governmental (or quasi-governmental) rule, regulation, guideline or
order regarding capital adequacy, reserve requirements or similar requirements
or compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law and whether or not failure to comply therewith would be
unlawful) from any central bank or governmental agency or body having
jurisdiction has the effect of increasing the amount of capital, reserves or
other funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder, then Borrower shall from time to time within fifteen (15) days after
notice and demand on Borrower by such Lender (together with the certificate
referred to in the next sentence and with a copy to Agent) pay to Agent, for the
account of such Lender, additional amounts sufficient to compensate such Lender
for such
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reduction. A certificate as to the amount of such cost and showing the basis of
the computation of such cost submitted by such Lender to Borrower and Agent
shall, absent manifest error, be final, conclusive and binding for all purposes,
unless Borrower within ten (10) days after demand for payment of such additional
amount(s) shall notify Agent and such Lender in writing of any objection which
Borrower may have to such computation, describing the basis for such objection
with specificity. In that event, only those items expressly objected to in such
notice shall be deemed to be disputed by Borrower. Such Lender's determination,
based upon the facts available, of the computation shall (absent manifest error)
be final, binding and conclusive on Borrower.
(b) If, due to either (i) the introduction of or any change in or in the
judicial or governmental interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), there shall be
any increase in the cost to any Lender of agreeing to make or making, funding or
maintaining of any Loan, then Borrower shall from time to time, within fifteen
(15) days after notice and demand by such Lender (with a copy of such demand to
Agent), pay to Agent for the account of such Lender additional amounts
sufficient to compensate such Lender for such increased cost. A certificate as
to the amount of such increased cost, submitted to Borrower and Agent by such
Lender, shall be conclusive and binding on Borrower for all purposes, absent
manifest error, unless Borrower within ten (10) days after demand for payment of
such additional amount(s) shall notify Agent and such Lender in writing of any
objection which Borrower may have to such computation, describing the basis for
such objection with specificity. In that event, only those items expressly
objected to in such notice shall be deemed to be disputed by Borrower. Such
Lender's determination, based upon the facts available, of the computation shall
(absent manifest error) be final, binding and conclusive on Borrower. Each
Lender agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to in clause (i) or (ii) above which would result in any
such increased cost to such Lender, such Lender shall, to the extent not
inconsistent with such Lender's internal policies of general application, use
reasonable commercial efforts to minimize costs and expenses incurred by it and
payable to it by Borrower pursuant to this Section 1.16(b).
(c) Upon the Agent obtaining actual knowledge of the occurrence of any of
the events set forth in this Section 1.16, Agent shall promptly notify Borrower
of the occurrence of such event.
(d) Foreign Lenders. Each Lender organized under the laws of a
jurisdiction outside the United States (a "Foreign Lender") as to which payments
to be made under this Agreement or under the Notes are exempt from United States
withholding tax or are subject to United States withholding tax at a reduced
rate
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under an applicable statute or tax treaty shall provide to Borrower and Agent a
properly completed and executed Internal Revenue Service Form 4224 or Form 1001
or other applicable form, certificate or document prescribed by the Internal
Revenue Service or the United States certifying as to such Foreign Lender's
entitlement to such exemption or reduced rate or withholding with respect to
payments to be made to such Foreign Lender under this Agreement and under the
Notes (a "Certificate of Exemption"). Prior to becoming a Lender under this
Agreement and within fifteen (15) days after a reasonable written request of
Borrower or Agent from time to time thereafter, each Foreign Lender that becomes
a Lender under this Agreement shall provide a Certificate of Exemption to
Borrower and Agent. No Person may become a Lender hereunder if such Person is
unable to deliver a Certificate of Exemption.
If a Foreign Lender does not provide a Certificate of Exemption to
Borrower and Agent within the time periods set forth in the preceding paragraph,
Borrower shall withhold taxes from payments to such Foreign Lender at the
applicable statutory rate and Borrower shall not be required to pay any
additional amounts as a result of such withholding; provided, however, that all
such withholding shall cease upon delivery by such Foreign Lender of a
Certificate of Exemption to Borrower and Agent.
20 CONDITIONS PRECEDENT
2.1 Conditions to Loans on or after Restatement Date.
Notwithstanding any other provision of this Agreement and without
affecting in any manner the rights of Agent and Lenders hereunder, Borrower
shall have no rights under this Agreement (but shall have all applicable
obligations hereunder), and no Lender shall be obligated to make any Loan on or
after the Restatement Date, or to take, fulfill, or perform any other action
hereunder, until the Agent has received each of the following in form and
substance satisfactory to it:
(a) Credit Agreement. This Agreement or counterparts hereof shall have
been duly executed by, and delivered to, Borrower, Guarantor, Agent and Lenders.
(b) Resolutions. A copy of the board of directors resolutions for each of
Borrower and Guarantor, certified by the Secretary or Assistant Secretary
thereof, authorizing the execution and delivery of this Agreement and attaching
a copy of the Borrower's and Guarantor's articles of incorporation and by-laws.
(c) Officer's Certificate. A certificate of Borrower's chief financial
officer stating that, after giving effect to this Agreement, no Default or Event
of Default exists and is continuing.
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(d) Counsel Opinion. A written opinion of Borrower's counsel.
2.2 Further Conditions to Each Loan and Credit Advance. It shall be a
further condition to the Term Loan, each subsequent Revolving Credit Advance and
to the incurrence of the initial and any subsequent Letter of Credit Obligations
that the following statements shall be true on the date of each such advance or
funding, as the case may be:
(a) All of Borrower's and Guarantor's representations and warranties
contained herein or in any of the other Loan Documents shall be true and correct
on and as of the Closing Date and the date on which each Revolving Credit
Advance is made (or Letter of Credit Obligation is incurred) as though made on
and as of such date, except to the extent that any such representation or
warranty expressly relates to an earlier date and except for changes therein
expressly permitted or expressly contemplated by this Agreement.
(b) No Material Adverse Effect shall have occurred since the date hereof.
(c) No event shall have occurred and be continuing, or would result from
the making of any Revolving Credit Advance (or the incurrence of any Letter of
Credit Obligations), which constitutes or would constitute a Default or an Event
of Default.
(d) After giving effect to each Revolving Credit Advance (or Letter of
Credit Obligations) the aggregate principal amount of the Revolving Credit Loan
shall not exceed the maximum amount permitted by Section 1.3(a) without
requiring that a payment be made to Agent or any Lender.
The request and acceptance by Borrower of the proceeds of the Term Loan or any
Revolving Credit Advance or the incurrence of any Letter of Credit Obligations
shall be deemed to constitute, as of the date of such request or acceptance, (i)
a representation and warranty by Borrower and Guarantor that the conditions in
this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrower and
Guarantor of the granting and continuance of Agent's Liens, on behalf of itself
and Lenders, pursuant to the Collateral Documents.
30 REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Revolving Credit Loan and Term Loan and to
incur Letter of Credit Obligations, Borrower makes the following representations
and warranties to Agent and each
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Lender, each and all of which shall survive the execution and delivery of this
Agreement:
3.1 Corporate Existence; Compliance with Law. Each of Borrower and
Guarantor (i) is a corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has been duly
qualified to conduct business and is in good standing in each other jurisdiction
where its ownership or lease of property or the conduct of its business requires
such qualification; (ii) has the requisite corporate power and authority and the
legal right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease and to conduct its
business as now, heretofore and proposed to be conducted; (iii) has all
licenses, permits, consents or approvals from or by, and has made all filings
with, and has given all notices to, all Governmental Authorities having
jurisdiction, to the extent required for such ownership, operation and conduct;
(iv) is in compliance with its certificate or articles of incorporation and
by-laws; and (v) is in compliance with all applicable provisions of law.
3.2 Executive Offices. The current location of each of Borrower's and
Guarantor's chief executive office and principal place of business is set forth
in Schedule 3.2 and, as of the Closing Date, none of such locations have changed
within the past six (6) months.
3.3 Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by Borrower and Guarantor of the Loan
Documents and all other instruments and documents to be delivered by Borrower
and Guarantor, and the creation of all Liens provided for therein: (i) are
within Borrower's and Guarantor's corporate power; (ii) have been duly
authorized by all necessary or proper corporate and shareholder action; (iii)
are not in contravention of any provision of Borrower's or Guarantor's
certificate or articles or incorporation or bylaws; (iv) will not violate any
law or regulation, or any order or decree of any court or governmental
instrumentality; (v) will not conflict with or result in the breach or
termination of, constitute a default under or accelerate any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which Borrower or Guarantor is a party or by which Borrower or
Guarantor or any of its property is bound; (vi) will not result in the creation
or imposition of any Lien upon any of the property of Borrower or Guarantor
other than those in favor of Agent, on behalf of itself and Lenders, all
pursuant to the Loan Documents; and (vii) do not require the consent or approval
of any Governmental Authority or any other Person, except those referred to in
Section 2.1(d), all of which will have been duly obtained, made or complied with
prior to the Closing Date. On or prior to the Closing Date, each of the Loan
Documents shall have been duly executed and delivered for the benefit of or on
behalf of Borrower
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or Guarantor, and each Loan Document shall then constitute a legal, valid and
binding obligation of Borrower and Guarantor enforceable against it in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency or other similar laws affecting the rights of creditors
generally or by application of general principles of equity.
3.4 Financial Statements. All financial statements (the "Financial
Statements") concerning Borrower and Guarantor which are referenced below have
been prepared in accordance with GAAP consistently applied throughout the
periods involved (except as disclosed therein and except, with respect to
unaudited financial statements, for the absence of footnotes and normal year-end
audit adjustments) and, to the best of Borrower's and Guarantor's knowledge and
belief after due inquiry, do present fairly in all material respects the
financial condition of the corporations covered thereby as at the dates thereof
and the results of their operations for the periods then ended.
(a) The following financial statements attached hereto as Schedule 3.4(A)
have been delivered on the date hereof:
(i) The audited balance sheet at December 31, 1996 and related
statement of income, certified by Xxxxxx Xxxxxxxx LLP.
(ii) The unaudited balance sheet at September 30, 1997 and the
related statement of income for the Fiscal Quarter then ended.
3.5 Collateral Reports. Borrower has delivered the Collateral Reports
identified on Schedule H and each such Collateral Report complies with the
description thereof contained on Schedule H.
3.6 Material Adverse Effect. Since December 31, 1996, neither Borrower
nor Guarantor has incurred any obligations, contingent liabilities, or
liabilities for Charges, long-term leases or unusual forward or long-term
commitments which could, alone or in the aggregate, have or result in a Material
Adverse Effect. No Material Adverse Effect has occurred between December 31,
1996 and the Closing Date.
3.7 Ownership of Property; Liens. (a) Except as described on Schedule
3.7, the real estate ("Real Estate") listed on Schedule 3.7 constitutes all of
the real property owned, leased, or used in its business by Borrower and
Guarantor. Each of Borrower and Guarantor (i) owns good and marketable fee
simple title to all of its owned real estate, and valid and marketable leasehold
interests in all of its Leases (both as lessor and lessee, sublessee or
assignee), all as described on Schedule 3.7, and (ii) good and marketable title
to, or valid leasehold interests in, all of its other properties and assets, and
none of the properties and assets of Borrower or Guarantor are subject to any
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Liens, except Permitted Encumbrances; and each of Borrower and Guarantor has
received all deeds, assignments, waivers, consents, non-disturbance and
recognition or similar agreements, bills of sale and other documents, and duly
effected all recordings, filings and other actions necessary to establish,
protect and perfect each of Borrower's and Guarantor's right, title and interest
in and to all such real estate and other assets or property. Except as described
on Schedule 3.7, (i) neither Borrower nor Guarantor nor any other party to any
such Lease described on Schedule 3.7 is in default of its obligations thereunder
or has delivered or received any notice of default under any such Lease, and no
event has occurred which, with the giving of notice, the passage of time or
both, would constitute a default under any such Lease; (ii) neither Borrower nor
Guarantor owns or holds nor is obligated under or a party to, any option, right
of first refusal or any other contractual right to purchase, acquire, sell,
assign or dispose of any real property owned or leased by Borrower or Guarantor
except as set forth therein; and (iii) no portion of any real property owned or
leased by Borrower or Guarantor has suffered any material damage by fire or
other casualty loss or a Release which has not heretofore been completely
repaired and restored to its original condition or is being remedied. All
permits required to have been issued or appropriate to enable the real property
owned or leased by Borrower or Guarantor to be lawfully occupied and used for
all of the purposes for which they are currently occupied and used, have been
lawfully issued and are, as of the date hereof, in full force and effect.
3.8 Restrictions; No Default. No contract, lease, agreement or other
instrument to which Borrower or Guarantor is a party or by which it or any of
its properties or assets is bound or affected and no provision of applicable law
or governmental regulation has or results in a Material Adverse Effect, or could
have or result in a Material Adverse Effect. Neither Borrower nor Guarantor is
in default, and to Borrower's and Guarantor's knowledge no third party is in
default, under or with respect to any material contract, agreement, lease or
other instrument to which it is a party.
3.9 Labor Matters. No strikes or other labor disputes against Borrower or
Guarantor are pending or, to Borrower's or Guarantor's knowledge, threatened.
Hours worked by and payment made to employees of Borrower or Guarantor have not
been in violation of the Fair Labor Standards Act or any other applicable
federal, state, local or foreign law dealing with such matters. All payments due
from Borrower or Guarantor on account of employee health and welfare insurance
have been paid or accrued as a liability on the books of Borrower or Guarantor.
Except as set forth in Schedule 3.9, neither Borrower nor Guarantor has any
obligations under any collective bargaining agreement, management agreement,
consulting agreement or any material employment agreement. There is no
organizing activity involving Borrower or
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Guarantor pending or, to Borrower's or Guarantor's knowledge, threatened by any
labor union or group of employees. Except as set forth in Schedule 3.9, there
are no representation proceedings pending or, to Borrower's or Guarantor's
knowledge, threatened with the National Labor Relations Board, and no labor
organization or group of employees of Borrower or Guarantor has made a pending
demand for recognition. Except as set forth in Schedule 3.9, there are no
complaints or charges against Borrower or Guarantor pending or threatened to be
filed with any federal, state, local or foreign court, governmental agency or
arbitrator based on, arising out of, in connection with, or otherwise relating
to the employment or termination of employment by Borrower or Guarantor of any
individual.
3.10 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Borrower has no Subsidiaries other than Guarantor and neither
Borrower nor Guarantor is engaged in any joint venture or partnership with any
other Person, and, except as set forth on Schedule 3.10, is not an Affiliate of
any other Person. Each of Borrower and Guarantor previously has furnished Agent
the identity of each Shareholder known by Borrower or Guarantor to own or
control all the issued and outstanding Stock of Borrower or Guarantor. Except as
set forth in Schedule 3.10, there are no outstanding rights to purchase,
options, warrants or similar rights or agreements pursuant to which Borrower or
Guarantor may be required to issue or sell any Stock or other equity security.
As of the Closing Date, all outstanding Indebtedness of Borrower and Guarantor
is described in Section 6.3 (including Schedule 6.3).
3.11 Government Regulation. Neither Borrower nor Guarantor is an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940 as amended. Neither Borrower nor Guarantor is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, or any other federal or state statute that restricts or
limits its ability to incur Indebtedness or to perform its obligations
hereunder, and the making of the Revolving Credit Advances and Term Loan by
Lenders, the incurrence of the Letter of Credit Obligations, the application of
the proceeds thereof and repayment thereof by Borrower or Guarantor and the
consummation of the transactions contemplated by this Agreement and the other
Loan Documents will not violate any provision of any such statute or any rule,
regulation or order issued by the Securities and Exchange Commission.
3.12 Margin Regulations. Neither Borrower nor Guarantor is engaged, nor
will it engage, principally or as one of its important activities, in the
business of extending credit for the purpose of "purchasing" or "carrying" any
"margin security" as such term is defined in Regulation U or G of the Board of
Governors of the Federal Reserve System (the "Federal Reserve Board") as now and
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from time to time hereafter in effect (such securities being referred to herein
as "Margin Stock"). Neither Borrower nor Guarantor owns any Margin Stock, and
the proceeds of the Revolving Credit Advances and Term Loan will not be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any indebtedness which was
originally incurred to purchase or carry any Margin Stock or for any other
purpose which might cause any of the loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulation G, T, U or X of the Federal Reserve Board.
3.13 Taxes. All federal, state, local and foreign tax returns, reports
and statements, including, but not limited to, information returns required to
be filed by each of Borrower and Guarantor have been filed with the appropriate
Governmental Authority and all Charges and other impositions shown thereon to be
due and payable have been paid prior to the date on which any fine, penalty,
interest or late charge may be added thereto for nonpayment thereof (or any such
fine, penalty, interest, late charge or loss has been paid), and each of
Borrower and Guarantor has paid when due and payable all Charges required to be
paid by it excluding, in each case, Charges or other amounts being contested in
accordance with Section 5.2(b). Proper and accurate amounts have been withheld
by each of Borrower and Guarantor from its respective employees for all periods
in full and complete compliance with the tax, social security and unemployment
withholding provisions of applicable federal, state, local and foreign law and
such withholdings have been timely paid to the respective Governmental
Authorities. Schedule 3.13 sets forth as of the Closing Date those taxable years
for which Borrower's or Guarantor's tax returns are currently being audited by
the IRS or any other applicable Governmental Authority and any assessments or
threatened assessments in connection with such audit, or otherwise currently
outstanding. Except as described on Schedule 3.13, neither Borrower nor
Guarantor has executed or filed with the IRS or any other Governmental Authority
any agreement or other document extending, or having the effect of extending,
the period for assessment or collection of any Charges. Neither Borrower nor
Guarantor is liable for any Charges or the documents delivered in connection
therewith: (i) under any agreement (including, without limitation, any tax
sharing agreements) or (ii) to the best of Borrower's and Guarantor's knowledge,
as a transferee. As of the Closing Date, neither Borrower nor Guarantor has
agreed or been requested to make any adjustment under IRC Section 481(a) by
reason of a change in accounting method or otherwise which would have a Material
Adverse Effect.
3.14 ERISA. (a) Schedule 3.14 lists all Plans maintained or contributed
to by Borrower or Guarantor and all Qualified Plans maintained or contributed to
by any ERISA Affiliate, and separately identifies the Title IV Plans,
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Multiemployer Plans, any multiple employer plans subject to Section 4064 of
ERISA, unfunded Pension Plans, Welfare Plans and Retiree Welfare Plans. Each
Qualified Plan has been determined by the IRS to qualify under Section 401 of
the IRC, and the trusts created thereunder have been determined to be exempt
from tax under the provisions of Section 501 of the IRC, and to the best
knowledge of Borrower and Guarantor nothing has occurred which would cause the
loss of such qualification or tax-exempt status. Each Plan is in compliance with
the applicable provisions of ERISA and the IRC, including the filing of reports
required under the IRC or ERISA, and with respect to each Plan, other than a
Qualified Plan, all required contributions and benefits have been paid in
accordance with the provisions of each such Plan. Neither Borrower, Guarantor
nor any ERISA Affiliate, with respect to any Qualified Plan, has failed to make
any contribution or pay any amount due as required by Section 412 of the IRC or
Section 302 of ERISA or the terms of any such Plan. With respect to all Retiree
Welfare Plans, the present value of future anticipated expenses pursuant to the
latest actuarial projections of liabilities does not exceed $55,000,000 as of
September 30, 1994, and copies of such latest projections have been provided to
Agent. Neither Borrower, Guarantor nor any ERISA Affiliate thereof has engaged
in a prohibited transaction, as defined in Section 4975 of the IRC or Section
406 of ERISA, in connection with any Plan, which would subject Borrower or
Guarantor (after giving effect to any exemption) to a material tax on prohibited
transactions imposed by Section 4975 of the IRC or any other material liability.
(b) Except as set forth in Schedule 3.14 and the Borrower's audited
financial statements for the period ended December 31, 1996: (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described
in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
Borrower or Guarantor, threatened claims, actions or lawsuits (other than claims
for benefits in the normal course), asserted or instituted against (x) any Plan
or its assets, (y) any fiduciary with respect to any Plan or (z) Borrower,
Guarantor nor any ERISA Affiliate with respect to any Plan; (iv) neither
Borrower, Guarantor nor any ERISA Affiliate thereof has incurred or reasonably
expects to incur any withdrawal liability (and no event has occurred which, with
the giving of notice under Section 4219 of ERISA, would result in such
liability) under Section 4201 of ERISA as a result of a complete or partial
withdrawal from a Multiemployer Plan; (v) within the last five years neither
Borrower, Guarantor nor any ERISA Affiliate thereof has engaged in a transaction
which resulted in a Title IV Plan with Unfunded Liabilities being transferred
outside of the "controlled group" (within the meaning of Section 4001(a)(14) of
ERISA) of any such entity; (vi) no Plan which is a Retiree Welfare Plan provides
for continuing benefits or coverage for any participant or any beneficiary of a
participant after such participant's termination
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of employment (except as may be required by Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant); (vii)
Borrower, Guarantor and each ERISA Affiliate have complied with the notice and
continuation coverage requirements of Section 4980B of the IRC and the
regulations thereunder except where the failure to comply could not have or
result in any Material Adverse Effect; and (viii) no liability under any Plan
has been funded, nor has such obligation been satisfied, with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or the equivalent by another nationally recognized rating
agency.
3.15 No Litigation. Except as set forth in Schedule 3.15, no action,
claim or proceeding is now pending or, to the knowledge of Borrower or
Guarantor, threatened against Borrower or Guarantor, before any court, board,
commission, agency or instrumentality of any federal, state, local or foreign
government or of any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators, (i) which challenges Borrower's or Guarantor's right or
power to enter into or perform any of its obligations under the Loan Documents,
or the validity or enforceability of any Loan Document or any action taken
thereunder, or (ii) which, if determined adversely, would have or result in a
Material Adverse Effect, nor to the best knowledge of Borrower and Guarantor
does a state of facts exist which is reasonably likely to give rise to such
proceedings.
3.16 Brokers. Except as set forth in Schedule 3.16, no broker or finder
acting on behalf of Borrower or Guarantor thereof brought about the obtaining,
making or closing of the loans made pursuant to this Agreement or the
transactions contemplated by the Loan Documents and neither Borrower nor
Guarantor has any obligations to any Person in respect of any finder's or
brokerage fees in connection therewith.
3.17 Employment Matters. Except as set forth in Schedules 3.9 and 3.17,
there are no material employment, consulting or management agreements covering
any management employee or Affiliate of Borrower. A true and complete copy of
each such agreement has been furnished to Agent.
3.18 Patents, Trademarks, Copyrights and Licenses. Except as otherwise
set forth in Schedule 3.18, each of Borrower and Guarantor owns all material
licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, and trade names necessary to continue to conduct its
business as heretofore conducted by it or proposed to be conducted by it, each
of which is listed, together with Copyright Office or Patent and Trademark
Office application or registration numbers, where applicable, on Schedule 3.18.
Schedule 3.18 also lists all tradenames or other names under which Borrower or
Guarantor conducts business. To the best of Borrower's and Guarantor's
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knowledge, the conduct of its business does not infringe upon any intellectual
property right of any other Person.
3.19 Full Disclosure. No information contained in this Agreement, any of
the other Loan Documents, the Projections, the Financials, the Collateral
Reports or any written statement furnished by or on behalf of Borrower or
Guarantor pursuant to the terms of this Agreement, which has previously been
delivered to Agent, contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made.
The Liens granted to Agent, on behalf of itself and Lenders, pursuant to the
Collateral Documents will at the Closing Date be fully perfected first priority
Liens in and to the Collateral described therein, subject only to Liens set
forth in Schedule 3.7 and the Liens granted to Agent, on behalf of itself and
Lenders, pursuant to the Mortgages will at the Closing Date be fully protected
first priority Liens in and to the Mortgaged Property described therein and
Permitted Liens.
3.20 Hazardous Materials. Except as set forth in Schedule 3.20, the Real
Property is free of contamination from any Hazardous Material. In addition,
Schedule 3.20 discloses material environmental liabilities of Borrower and
Guarantor of which it has knowledge (i) related to noncompliance with the
Environmental Laws, or (ii) associated with the Real Estate. Neither Borrower
nor Guarantor has caused or suffered to occur any Release with respect to any
Hazardous Material at, under, above or upon any real property which it owns or
leases. Neither Borrower nor Guarantor is involved in operations that are likely
to result in the imposition of any Lien on its assets or any material liability
on Borrower, under any Environmental Law, and neither Borrower nor Guarantor has
permitted any tenant or occupant of such premises to engage in any such
activity. Each of Borrower and Guarantor has provided to Agent copies of all
existing environmental reports, reviews and audits and all written information
pertaining to actual or potential Environmental Liabilities and Costs, in each
case relating to Borrower and Guarantor.
3.21 Insurance Policies. Schedule 3.21 lists all insurance of any nature
maintained for current occurrences by Borrower, as well as a summary of the
terms of such insurance.
3.22 Deposit and Disbursement Accounts. Schedule 3.22 lists all banks and
other financial institutions at which each of Borrower and Guarantor maintains
deposits and/or other accounts, including any disbursement accounts, and such
Schedule correctly identifies the name, address and telephone number of each
depository, the name in which the account is held, a description of the purpose
of the account, and the complete account number.
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3.23 Government Contracts. Except as set forth in Schedule 3.23, neither
Borrower nor Guarantor is a party to any contract or agreement with the federal
government and none of the Accounts are subject to the Federal Assignment of
Claims Act (31 U.S.C. Section 3727).
3.24 Customer and Trade Relations. There exists no actual or threatened
termination or cancellation of, or any material adverse modification or change
in: (a) the business relationship of Borrower or Guarantor with any customer or
group of customers whose purchases during the preceding twelve (12) months
caused them to be ranked among the ten largest customers of Borrower and
Guarantor taken as a whole; or (b) the business relationship of Borrower or
Guarantor with any supplier material to the operations of Borrower or Guarantor.
3.25 Agreements and Other Documents. As of the Closing Date, each of
Borrower and Guarantor have provided to Agent or its counsel, on behalf of
Lenders, accurate and complete copies (or summaries) of all of the following
agreements or documents to which Borrower is subject and each of which are
listed on Schedule 3.25: (a) Plans; (b) supply agreements not terminable by
Borrower or Guarantor, within sixty (60) days following written notice issued by
Borrower or Guarantor; (c) purchase agreements not terminable by Borrower or
Guarantor, within 60 days following written notice issued by Borrower or
Guarantor; (d) Leases; (e) any lease of equipment having a remaining term of one
year or longer and requiring aggregate rental and other payments in excess of
$50,000 per annum; (f) licenses and permits necessary for the conduct of each of
Borrower's and Guarantor's businesses; (g) instruments or documents evidencing
Indebtedness of each of Borrower and Guarantor and any security interest granted
by Borrower or Guarantor with respect thereto; (h) instruments and agreements
evidencing the issuance of any equity securities, warrants, rights or options to
purchase equity securities of Borrower or Guarantor; (i) employment and
consulting agreements; and (j) all agreements providing for compensation of or
payments to senior members of management and/or stockholders of each of Borrower
and Guarantor. On and after the Restatement Date, neither Borrower nor Guarantor
is or shall be party to any agreement for the provision to it of management
services.
3.26 FEIN. Borrower's federal employer identification number is
00-0000000 and Guarantor's federal employer identification number is 00-0000000.
40 FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices. (a) Each of Borrower and Guarantor hereby
covenants and agrees that from and after the Closing Date and until the
Termination Date, it shall deliver to
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Agent and/or Lenders, as required, financial statements, notices and Projections
at the times, to the Persons and in the manner set forth in Schedule G.
(b) Each of Borrower and Guarantor hereby covenants and agrees that from
and after the Closing Date, they shall deliver to Agent and/or Lenders, as
required, the various Collateral Reports at the times, to the Persons and in the
manner set forth in Schedule H.
4.2 Communication with Accountants. Each of Borrower and Guarantor
authorizes Agent and each Lender to communicate directly with its independent
certified public accountants including Xxxxxx Xxxxxxxx LLP, and authorizes those
accountants and advisors to disclose to Agent and each Lender any and all
financial statements and other supporting financial documents and schedules
relating to Borrower (including, without limitation, copies of any issued
management letters) with respect to the business, financial condition and other
affairs of Borrower and Guarantor. On or before the Closing Date, Borrower and
Guarantor shall obtain a letter from such accountants, on which the Agent shall
be designated as a recipient, acknowledging that Borrower and Guarantor intend
the financial statements certified by such accountants to benefit or influence
Lenders and that Lenders may rely upon such certification.
50 AFFIRMATIVE COVENANTS
Each of Borrower and Guarantor covenants and agrees that, unless Agent
shall otherwise consent in writing, from and after the date hereof and until the
Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each of Borrower
and Guarantor shall: (a) do or cause to be done all things necessary to preserve
and keep in full force and effect its corporate existence and its rights and
franchises; (b) continue to conduct its business substantially as now conducted
or as otherwise permitted hereunder; (c) at all times maintain, preserve and
protect all of its copyrights, patents, trademarks, trade names and all other
intellectual property and rights as licensee or licensor thereof and preserve
all the remainder of its assets and properties, used or useful in the conduct of
its business, and keep the same in good repair, working order and condition
(taking into consideration ordinary wear and tear) and from time to time make,
or cause to be made, all necessary or appropriate repairs, replacements and
improvements thereto consistent with industry practices; and (d) transact
business only in such corporate and trade names as are set forth in Schedule
5.1.
5.2 Payment of Obligations. (a) Subject to Section 5.2(b), each of
Borrower and Guarantor shall pay and discharge or
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cause to be paid and discharged promptly all (A) Charges imposed upon it, its
income and profits, or any of its property (real, personal or mixed), and (B)
lawful claims for labor, materials, supplies and services or otherwise, before
any thereof shall become past due.
(b) Borrower and Guarantor may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges or claims described Section
5.2(a); provided, that, at the time of commencement of any such action or
proceeding, and during the pendency thereof (i) no Default or Event of Default
shall have occurred and be continuing, (ii) adequate reserves with respect
thereto are maintained on the books of Borrower and Guarantor, in accordance
with GAAP, (iii) such contest is maintained and prosecuted continuously and with
diligence, (iv) none of the Collateral becomes subject to forfeiture or loss as
a result of such Charges or claims, (v) no Lien shall be imposed to secure
payment of such Charges or claims other than inchoate tax liens, and (vi) each
of Borrower and Guarantor shall promptly pay or discharge such contested Charges
and all additional charges, interest, penalties and expenses, if any, and shall
deliver to Agent evidence acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to Borrower
or Guarantor or the conditions set forth in this Section 5.2(b) are no longer
met.
5.3 Books and Records. Each of Borrower and Guarantor shall keep adequate
records and books of account with respect to Borrower's and Guarantor's business
activities, in which proper entries, reflecting all financial transactions, are
made in accordance with GAAP and on a basis consistent with the Financial
Statements referred to in Schedule 3.4.
5.4 Litigation. Each of Borrower and Guarantor shall notify Agent in
writing, promptly upon learning thereof, of any litigation commenced or
threatened against Borrower or Guarantor, and of the institution against it of
any suit or administrative proceeding that (a) seeks damages in excess of
$100,000 or (b) seeks injunctive relief.
5.5 Insurance. (a) Each of Borrower and Guarantor shall, at its sole cost
and expense, maintain the policies of insurance described on Schedule 3.21 in
form and with insurers rated AA or better by Bests. Such policies shall be in
such amounts as are set forth in Schedule 3.21. Each of Borrower and Guarantor
shall notify Agent promptly of any occurrence causing a material loss or decline
in value of any real or personal property and the estimated (or actual, if
available) amount of such loss or decline. So long as any Event of Default shall
have occurred and be continuing or if the casualty loss exceeds $100,000: each
of Borrower and Guarantor hereby direct all present and future insurers under
its "All Risk" policies of insurance to pay all
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proceeds payable thereunder directly to Agent, on behalf of itself and Lenders
and irrevocably makes, constitutes and appoints Agent (and all officers,
employees or agents designated by Agent) as each of Borrower's and Guarantor's
true and lawful agent and attorney-in-fact for the purpose of making, settling
and adjusting claims under such "All Risk" policies of insurance and endorsing
the name of Borrower or Guarantor on any check or other item of payment for the
proceeds of such "All Risk" policies of insurance. In the event Borrower or
Guarantor at any time or times hereafter shall fail to obtain or maintain any of
the policies of insurance required above or to pay any premium in whole or in
part relating thereto, Agent, without waiving or releasing any Obligations or
Default or Event of Default hereunder, may at any time or times thereafter (but
shall not be obligated to) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which Agent
deems advisable. All sums so disbursed, including attorneys, fees, court costs
and other charges related thereto, shall be payable, on demand, by Borrower and
Guarantor to Agent and shall be additional Obligations hereunder secured by the
Collateral, provided, that, if and to the extent Borrower or Guarantor fails to
promptly pay any of such sums upon demand therefor, Agent is authorized to, and
at its option may, make or cause to be made Revolving Credit Advances on behalf
of Borrower or Guarantor for payment thereof.
(b Agent reserves the right at any time, upon any change in Borrower's or
Guarantor's risk profile (including, without limitation, any change in the
product mix maintained by Borrower or Guarantor or any laws affecting the
potential liability of Borrower or Guarantor), to require additional forms and
limits of insurance to, in Agent's reasonable opinion, adequately protect both
Agent and Lenders' interests in all or any portion of the Collateral and to
ensure that each of Borrower and Guarantor is protected by insurance in amounts
and with coverage customary for its industry. If requested by Agent, each of
Borrower and Guarantor shall deliver to Agent from time to time a report of a
reputable insurance broker, satisfactory to Agent, with respect to its insurance
policies.
(c Each of Borrower and Guarantor shall deliver to Agent endorsements (i)
to all "All Risk" and business interruption insurance naming Agent, on behalf of
itself and Lenders, as loss payee, and (ii) to all general liability and other
liability policies naming Agent, on behalf of itself and Lenders, as additional
insured.
(d The loss, if any, under any property insurance required to be carried
by this Section 5.5 shall be adjusted with the insurance companies or otherwise
collected, including the filing of appropriate proceedings by Borrower or
Guarantor, subject to the reasonable approval of the Agent in the case of claims
in excess of $100,000. If the proceeds payable under any policy of
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property insurance are $100,000 or less, Borrower and Guarantor shall have the
right to use such proceeds to repair or replace the damaged or destroyed
property, provided that a Default or an Event of Default shall not have occurred
and be continuing at the time the proceeds are paid. If a Default or an Event of
Default shall have occurred and be continuing at the time such insurance
proceeds are paid, or if such insurance proceeds are more than $100,000, such
insurance proceeds shall be applied to the Obligations in accordance with
Section 1.3(f) (and, notwithstanding anything else to the contrary in this
Agreement or otherwise, to permanently reduce the Revolving Credit Loan
Commitment by the amount of such proceeds that are, or are available to be,
applied against the Revolving Credit Loan) unless the Requisite Lenders agree to
permit part or all of such insurance proceeds to be used to repair or replace
the damaged or destroyed property.
5.6 Compliance with Laws. (a) Each of Borrower and Guarantor shall comply
in all material respects with all federal, state and local laws and regulations
applicable to it, including those relating to licensing, ERISA and labor
matters.
5.7 Supplemental Disclosure. On the request of Agent (in the event that
such information is not otherwise delivered by Borrower to Agent pursuant to
this Agreement), so long as there are Obligations outstanding hereunder, but not
more frequently than quarterly absent the occurrence and continuance of a
Default or an Event of Default, each of Borrower and Guarantor will supplement
each schedule or representation herein with respect to any matter hereafter
arising which, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in such schedule or as an
exception to such representation or which is necessary to correct any
information in such schedule or representation which has been rendered
inaccurate thereby; provided, however, that such supplement to such schedule or
representation shall not be deemed an amendment thereof unless expressly
consented to in writing by Agent and Requisite Lenders, and no such amendments,
except as the same may be consented to in a writing which expressly includes a
waiver, shall be or be deemed a waiver of any Default or Event of Default
disclosed therein.
5.8 Employee Plans. Each of Borrower and Guarantor shall notify Agent of
(i) any and all claims, actions, or lawsuits asserted or instituted, and of any
threatened litigation or claims, against Borrower, Guarantor or any ERISA
Affiliate, in connection with any Plan maintained, at any time, by Borrower,
Guarantor or such ERISA Affiliate, or to which Borrower, Guarantor or such ERISA
Affiliate has or had at any time any obligation to contribute, or/and against
any such Plan itself, or against any fiduciary of or service provider to any
such Plan and (ii) the occurrence of any material Reportable Event with respect
to any Pension Plan of Borrower, Guarantor or such ERISA Affiliate.
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5.9 Environmental Matters. Each of Borrower and Guarantor shall (i)
comply in all material respects with the Environmental Laws applicable to it,
(ii) notify Agent promptly after Borrower or Guarantor becomes aware of any
Release upon or at any premises owned or occupied by it (other than Releases of
immaterial quantities of cleaning materials, lubricants, solvents and similar
products within any building which can be remediated promptly without any
adverse environmental effect and without any required notification to regulatory
authorities), and (iii) promptly forward to Agent a copy of any order, notice,
permit, application, or any communication or report received by Borrower or
Guarantor in connection with any Release or any other matter relating to the
Environmental Laws that may affect such premises or Borrower or Guarantor. The
provisions of this Section 5.10 shall apply whether or not the Environmental
Protection Agency, any other federal agency or any state, local or foreign
environmental agency has taken or threatened any action in connection with any
Release or the presence of any Hazardous Materials.
5.10 Landlords' Agreements, Bailee Letters and Mortgagee Agreements. Each
of Borrower and Guarantor shall use its best efforts to obtain a landlord's
agreement in form and substance acceptable to Agent from the lessor of its
manufacturing facility in Cythiana, Kentucky. If Borrower or Guarantor is unable
to obtain a landlord's agreement within ninety (90) days after the Closing Date,
Eligible Inventory at that location shall be subject to a reserve equal to two
(2) month's lease payments for purposes of calculating Borrowing Availability.
No real property or warehouse space shall be leased or acquired by Borrower or
Guarantor after the Closing Date, unless and until a landlord or mortgagee
agreement or bailee letter, as appropriate, shall first have been obtained with
respect to such location.
5.11 Leased Locations of Collateral. Each of Borrower and Guarantor shall
timely and fully pay and perform its obligations under all leases and other
agreements with respect to each leased location or public warehouse where any
Collateral is or may be located. Each of Borrower and Guarantor shall promptly
deliver to Agent copies of (i) any and all default notices received under or
with respect to any such leased location or public warehouse, and (ii) such
other notices or documents as Agent may request in its reasonable discretion.
6. NEGATIVE COVENANTS
Each of Borrower and Guarantor covenants and agrees that, without the
prior written consent of Agent and the Requisite Lenders, from and after the
date hereof until the Termination Date:
6.1 Mergers, Subsidiaries, Etc. Neither Borrower nor Guarantor shall
directly or indirectly, by operation of law or
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otherwise, (i) form or acquire any Subsidiary, or (ii) merge with, consolidate
with, acquire all or substantially all of the assets or capital stock of, or
otherwise combine with, any Person.
6.2 Investments; Loans and Advances. Except as otherwise permitted by
Sections 1.3(c), 6.3 or 6.4, neither Borrower nor Guarantor shall make any
investment in, or make or accrue loans or advances of money to any Person,
through the direct or indirect lending of money, holding of securities or
otherwise, provided that Borrower may make loans and advances to Guarantor and
Guarantor may make loans and advances to Borrower, in either case not in excess
of $2,000,000 in the aggregate outstanding at any one time.
6.3 Indebtedness. Neither Borrower nor Guarantor shall create, incur,
assume or permit to exist any Indebtedness, except (i) Indebtedness secured by
Liens permitted under Section 6.7, (ii) the Revolving Credit Loan, the Term Loan
and the other Obligations, (iii) deferred taxes, (iv) unfunded pension fund and
other employee benefit plan obligations and liabilities to the extent they are
permitted to remain unfunded under applicable law, (v) existing Indebtedness set
forth in Schedule 6.3 and refinancings thereof on terms and conditions
acceptable to Agent, in its reasonable discretion, which shall in any event be
on terms no less favorable to Borrower, Guarantor, Agent or any Lender than the
terms of the Indebtedness being refinanced,(vi) Capital Lease Obligations in an
amount outstanding at any one time which, when added to all then remaining lease
obligations under operating leases in which Borrower or Guarantor is lessee and
including all renewal periods at the option of lessor, does not exceed
$2,000,000, and (vii) the Senior Subordinated Notes.
6.4 Employee Loans and Affiliate Transactions. (a) Borrower and Guarantor
shall not enter into or be a party to any transaction with an Affiliate of
Borrower except in the ordinary course of and pursuant to the reasonable
requirements of Borrower's and Guarantor's business and upon fair and reasonable
terms that are fully disclosed to Agent in advance and are no less favorable to
Borrower or Guarantor than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of Borrower. All such transactions
existing as of the date hereof are described on Schedule 6.4(a).
(b) Neither Borrower nor Guarantor shall enter into any lending or
borrowing transaction with any of its employees other than loans to officers
thereof for the exercise by such officers of employee stock options of Borrower,
provided such loans do not exceed $500,000 in the aggregate outstanding at any
one time, are not outstanding for more than 30 days and are not renewed or
refinanced.
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6.5 Capital Structure and Business. Neither Borrower nor Guarantor shall
(i) make any changes in any of its business objectives, purposes or operations
which could in any way adversely affect the repayment of the Revolving Credit
Loan or Term Loan or any of the other Obligations or could have or result in a
Material Adverse Effect, (ii) make any change in its capital structure that is
not acceptable to Agent in its reasonable discretion, or (iii) amend its
certificate or articles of incorporation or bylaws in a manner which would
adversely affect the Lenders or its duty or ability to repay the Obligations,
provided that, notwithstanding the foregoing, the Borrower may consummate the
IPO as long as the proceeds thereof are held and applied in accordance with
Section 1.3(c) hereof. Neither Borrower nor Guarantor shall engage in any
business other than the businesses currently engaged in by Borrower and
Guarantor or businesses reasonably related thereto.
6.6 Guaranteed Indebtedness. Neither Borrower nor Guarantor shall incur
any Guaranteed Indebtedness except (i) by endorsement of instruments or items of
payment for deposit to its general account, and (ii) for Guaranteed Indebtedness
incurred for its benefit if the primary obligation is expressly permitted by
this Agreement.
6.7 Liens. Neither Borrower nor Guarantor shall create, incur, assume or
permit to exist any Lien on or with respect to any of its properties or assets
(including Accounts, instruments, or chattel paper), whether now owned or
hereafter acquired except (i) Permitted Encumbrances, (ii) presently existing or
hereinafter created Liens in favor of Agent, on behalf of Lenders, (iii)
Lessor's interests under Capital Leases permitted by Section 6.3(vi), (iv) Liens
existing on the date hereof and described on Schedule 6.7, and (v) existing
Liens securing the Senior Subordinated Notes.
In addition, neither Borrower nor Guarantor shall become a party to any
agreement, note, indenture or instrument, or take any other action, which would
prohibit the creation of a Lien on any of its properties or other assets in
favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases or intellectual
property licenses which prohibit liens upon the assets that are subject thereto.
6.8 Sale of Assets. Neither Borrower nor Guarantor shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including any of its Accounts, other than (i) the sale of Inventory in the
ordinary course of business, (ii) the sale, transfer, conveyance or other
disposition of assets having a value not exceeding $50,000 in any single
transaction or $250,000 in the aggregate in any Fiscal Year, and (iii) the sale,
transfer, conveyance or other disposition of obsolete or redundant assets,
including the real estate owned by
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Borrower in Houston, Texas. Each of Borrower and Guarantor shall promptly
deliver to Agent all of the cash proceeds (after deducting all expenses,
including commissions, taxes payable, and amounts payable to holders of prior
liens, if any, and an appropriate reserve for income taxes in connection
therewith) of sales or dispositions permitted under clauses (ii) and (iii)
above, which proceeds shall be applied to the repayment of the Obligations. With
respect to any disposition of assets or other properties permitted pursuant to
this Section 6.8, Agent agrees on reasonable prior written notice to release its
Lien on such assets or other properties in order to permit Borrower or Guarantor
to effect such disposition and shall execute and deliver to Borrower or
Guarantor, at Borrower's and Guarantor's expense, appropriate UCC-3 termination
statements and other releases as reasonably requested by Borrower or Guarantor.
6.9 ERISA. Neither Borrower nor Guarantor shall, nor shall it cause or
permit any ERISA Affiliate thereof (without Agent's prior written consent) to,
(i) acquire any ERISA Affiliate that maintains or has an obligation to
contribute to a Pension Plan that has either an "accumulated funding
deficiency", as defined in Section 302 of ERISA, or any "unfunded vested
benefits", as defined in Section 4006(a)(3)(E)(iii) of ERISA, in the case of any
plan other than a Multiemployer Plan, and as defined in Section 4211 of ERISA in
the case of a Multiemployer Plan, in excess of $50,000, (ii) permit or suffer
any representation set forth in Schedule 3.14 to cease to be met and satisfied
at any time, (iii) terminate any Title IV Plan where such termination could
reasonably be anticipated to result in liability in excess of $50,000 to such
Person, (iv) permit any accumulated funding deficiency, as defined in Section
302(a)(2) of ERISA, to be incurred with respect to any Pension Plan, in excess
of $50,000, (v) fail to make any material contributions or fail to pay any
amounts due and owing as required by the terms of any Plan before such
contributions or amounts become delinquent, (vi) make a complete or partial
withdrawal (within the meaning of Section 4201 of ERISA) from any Multiemployer
Plan, or (vii) fail to promptly provide Agent with copies of any Plan documents
or governmental reports or filings, if requested by Agent.
6.10 Financial Covenants. Borrower shall not breach or fail to comply
with any of the Financial Covenants (the "Financial Covenants") set forth in
Schedule I.
6.11 Hazardous Materials. Neither Borrower nor Guarantor shall cause or
permit any other Person within its control to, cause or permit a Release or the
presence, use, generation, manufacture, installation, Release, discharge,
storage or disposal of any Hazardous Materials on, under, in, above or about any
of its real estate or the transportation of any Hazardous Materials to or from
any real estate where such Release or such presence, use, generation,
manufacture, installation, Release, discharge, storage
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or disposal would violate in any material respect, or form the basis for any
material liability under, any Environmental Laws. If a Default or Event of
Default shall have occurred and be continuing, Borrower and Guarantor, at their
own expense, shall cause the performance of such investigation and remediation
and preparation of such environmental reports as Agent may from time to time
request as to any location at which Collateral is then located, by reputable
environmental consulting firms acceptable to Agent, and in form and substance
acceptable to Agent.
6.12 Sale-Leasebacks. Neither Borrower nor Guarantor shall engage in any
sale-leaseback or similar transaction involving any of its assets.
6.13 Cancellation of Indebtedness. Neither Borrower nor Guarantor shall
cancel any claim or debt owing to it, except for reasonable consideration
negotiated on an arm's-length basis and in the ordinary course of its business
consistent with past practices.
6.14 Restricted Payments. Neither Borrower nor Guarantor shall make any
Restricted Payment.
6.15 Leases. (a) Neither Borrower nor Guarantor shall enter into any
lease of real property or similar agreement or arrangement except existing
leases disclosed on Schedule 6.16 and renewals thereof on substantially the same
terms.
(b) Neither Borrower nor Guarantor shall enter into or permit to exist
any operating lease for equipment or personal property, if the aggregate of
operating lease payments remaining to be paid under all outstanding operating
leases in which either of Borrower or Guarantor is lessee, including all renewal
periods at the option of lessor, together with all outstanding Capital Lease
Obligations, at any time exceeds $2,000,000.
6.16 Fiscal Year. Neither Borrower nor Guarantor shall change its Fiscal
Year.
6.17 Change of Corporate Name or Location. (a) Neither Borrower nor
Guarantor shall (i) change its corporate name or (ii) change its chief executive
office, principal place of business, corporate offices or warehouses or
Collateral locations, or the location of its records concerning the Collateral,
in any case without at least thirty (30) days' prior written notice to Agent and
after Agent's written acknowledgment that any reasonable action requested by
Agent in connection therewith, including, without limitation, to continue the
perfection of any Liens in favor of Agent, on behalf of Lenders, in any
Collateral has been completed or taken and provided that any such new location
shall be in the Continental United States; (b) in furtherance of and without
limiting the scope of clause (a) above, neither Borrower nor Guarantor shall
change its name, identity or corporate structure in
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any manner which might make any financing or continuation statement filed in
connection herewith seriously misleading within the meaning of Section 9.402(7)
of the Code or any other then applicable provision of the Code except upon prior
written notice to Agent and Lenders and after Agent's written acknowledgement
that any reasonable action requested by Agent in connection therewith,
including, without limitation, to continue the perfection of any Liens in favor
of Agent, on behalf of Lenders, in any Collateral has been completed or taken.
6.18 Cash Management. Neither Borrower nor Guarantor shall accumulate or
maintain cash in disbursement, imprest or payroll accounts as of any date of
determination in excess of checks outstanding against such accounts as of that
date and amounts necessary to meet minimum balance requirements.
6.19 Technology Development Arrangements. Any term or provision of this
Agreement to the contrary notwithstanding, the Borrower and Guarantor shall be
permitted to enter into technology development arrangements in the ordinary
course of business with Persons other than Affiliates, provided that (i) the
aggregate amount of expenditures and commitments therefor during the term of
this Agreement shall not exceed $100,000 per annum on a non-cumulative basis,
and (ii) such arrangements do not involve the creation of or investment in any
legal entity established under applicable law.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby shall be
in effect until the Commitment Termination Date, and the Revolving Credit Loan,
the Term Loan and all other Obligations shall be automatically due and payable
in full on such date.
7.2 Survival of Obligations Upon Termination of Financing Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of either Borrower or Guarantor or the rights of Agent and
Lenders relating to any unpaid portion of the Revolving Credit Loan, the Term
Loan or any other Obligation, due or not due, liquidated, contingent or
unliquidated or any transaction or event occurring prior to such termination, or
any transaction or event, the performance of which is required after the
Commitment Termination Date. Except as otherwise expressly provided herein or in
any other Loan Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon either Borrower or Guarantor, and all rights
of Agent and each Lender, all as contained in the Loan Documents shall not
terminate or expire,
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but rather shall survive such termination or cancellation and shall continue in
full force and effect until such time as all of the Obligations have been paid
in full in accordance with the terms of the agreements creating such
Obligations.
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a Borrower shall fail to pay any regularly scheduled installment of
principal of, or interest on, the Revolving Credit Loan or the Term Loan when
due and payable, and such failure shall remain unremedied for a period of two
(2) Business Days or more, or Borrower shall fail to make payment of any of the
other Obligations (other than as set forth in clause (b) below) when due and
payable or declared due and payable.
(b Borrower shall fail to pay any Fees, costs or expenses payable or
reimbursable by Borrower under this Agreement or under any other Loan Document,
and such failure shall have remained unremedied for a period of 5 days or more
after Borrower has received notice of such failure from Agent or any Lender.
(c Borrower shall fail or neglect to perform, keep or observe any of the
provisions of (i) Sections 1.9, 5.5 or 6, or any of the provisions set forth in
Schedules E or I, respectively; or (ii) Section 4 or any provisions set forth in
Schedules G or H, respectively, within ten (10) days after written notice from
Agent.
(d Borrower or Guarantor shall fail or neglect to perform, keep or
observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other clause
of this Section 8.1) and the same shall remain unremedied for ten (10) days or
more after Borrower has received written notice of any such failure from Agent
or any Lender.
(e A default or breach shall occur under any other agreement, document or
instrument to which Borrower or Guarantor is a party and such default is not
cured within any applicable grace period and such default or breach (i) involves
the failure to make any payment when due in respect of any Indebtedness (other
than the Obligations) of Borrower or Guarantor in excess of $50,000 in the
aggregate, or (ii) causes such Indebtedness or a portion thereof in excess of
$50,000 in the aggregate to become due prior to its stated maturity or prior to
its regularly scheduled dates of payment, or (iii) entitles any holder of such
Indebtedness or a trustee to cause such Indebtedness or a portion thereof in
excess of $50,000 in the aggregate to become due prior to its stated
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maturity or prior to its regularly scheduled dates of payment, regardless of
whether such right is exercised or waived by such holder or trustee.
(f Any representation or warranty herein or in any Loan Document or in
any written statement, report, financial statement or certificate made or
delivered to any Lender by Borrower or Guarantor shall be untrue or incorrect in
any material respect, as of the date when made or deemed made.
(g Assets of Borrower or Guarantor with a fair market value of $50,000 or
more shall be attached, seized, levied upon or subjected to a writ or distress
warrant, or come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors of Borrower or Guarantor and such
condition shall continue for thirty (30) days or more.
(h A case or proceeding shall have been commenced against Borrower or
Guarantor in a court having competent jurisdiction seeking a decree or order in
respect of Borrower (i) under Title 11 of the United States Code, as now
constituted or hereafter amended or any other applicable federal, state or
foreign bankruptcy or other similar law, (ii) appointing a custodian, receiver,
liquidator, assignee, trustee or sequestrator (or similar official) for Borrower
or Guarantor or for any substantial part of Borrower's or Guarantor's assets, or
(iii) ordering the winding-up or liquidation of the affairs of Borrower or
Guarantor and such case or proceeding shall remain undismissed or unstayed for
forty-five (45) days or more or such court shall enter a decree or order
granting the relief sought in such case or proceeding.
(i Borrower or Guarantor shall (i) file a petition seeking relief under
Title 11 of the United States Code, as now constituted or hereafter amended, or
any other applicable federal, State or foreign bankruptcy or other similar law,
(ii) consent to the institution of proceedings thereunder or to the filing of
any such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official) of
Borrower or Guarantor or of any substantial part of Borrower's or Guarantor's
assets, (iii) make an assignment for the benefit of creditors, or (iv) take any
corporate action in furtherance of any such action.
(j A final judgment or judgments for the payment of money in excess of
$50,000 in the aggregate shall be rendered against Borrower or Guarantor and the
same shall not (i) be fully covered by insurance, or (ii) within thirty (30)
days after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged prior to the expiration of any
such stay.
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(k With respect to any Plan: (i) which is a Defined Contribution Plan or
Welfare Plan, Borrower, Guarantor or any ERISA Affiliate thereof or any other
party-in-interest or disqualified Person shall engage in any transactions which
in the aggregate results in a final assessment to Borrower in excess of $50,000
under Section 409 or 502 of ERISA or IRC Section 4975 which assessment has not
been paid within 30 days of final assessment and which is not being contested
pursuant to Sections 6.2(b) or (c) hereof; (ii) Borrower, Guarantor or any ERISA
Affiliate thereof shall incur any accumulated funding deficiency, as defined in
IRC Section 412, in the aggregate in excess of $50,000, or request a funding
waiver from the IRS for contributions in the aggregate in excess of $50,000;
(iii) Borrower, Guarantor or any ERISA Affiliate thereof shall not pay any
withdrawal liability which involves annual withdrawal liability payments which
exceed $50,000, as a result of a complete or partial withdrawal within the
meaning of Section 4203 or 4205 of ERISA, within 30 days after the date such
payment becomes due, unless such payment is being contested pursuant to Sections
6.2(b) or (c) hereof; (iv) Borrower, Guarantor or any ERISA Affiliate thereof
shall fail to make a required contribution by the due date under Section 412 of
the IRC or Section 302 of ERISA which would result in the imposition of a lien
under Section 412 of the IRC or Section 302 of ERISA within 30 days after the
date such payment becomes due; or (v) an ERISA Event (other than an event
described in 29 CFR '2615.23) with respect to a Plan has occurred, and within
thirty (30) days Borrower has not contested such ERISA Event by appropriate
proceedings.
(l Any material provision of any Loan Document shall for any reason cease
to be valid or enforceable in accordance with its terms, or Borrower or
Guarantor shall challenge the enforceability of any Loan Document, or any
security interest created under any Loan Document shall cease to be a valid and
perfected first priority security interest or Lien (except as otherwise
permitted herein or therein) in any of the Collateral purported to be covered
thereby.
(m Any "Change of Control" shall occur.
(n) Borrower shall fail to pay in full the Senior Subordinated Notes and
obtain the release of all Liens securing the same within ninety (90) days after
the IPO.
8.2 Remedies. If any Default or Event of Default shall have occurred and
be continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice terminate this facility with respect to further Revolving
Credit Advances, whereupon any further Revolving Credit Advances shall be made
in Agent's sole discretion. If any Event of Default shall have occurred and be
continuing, Agent may (and at the written request of the Requisite Lenders
shall), without notice, (a) declare all or
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any portion of the Obligations, including all or any portion of the Revolving
Credit Loan and/or Term Loan, to be forthwith due and payable, and require that
the Letter of Credit Obligations be cash collateralized as provided in Schedule
B, all without presentment, demand, protest or further notice of any kind, all
of which are expressly waived by Borrower and Guarantor; (b) increase the rate
of interest applicable to the Revolving Credit Loan and/or Term Loan to the
Default Rate, as provided in Section 1.5(d); and (c) exercise any rights and
remedies provided to Agent under the Loan Documents and/or at law or equity,
including all remedies provided under the Code; provided, however, that upon the
occurrence of an Event of Default specified in Sections 8.1 (j) or (k), all of
the Obligations, including the Revolving Credit Loan, shall become immediately
due and payable without declaration, notice or demand by any Person.
8.3 Waivers by Borrower and Guarantor. Except as otherwise provided for
in this Agreement or by applicable law, each of Borrower and Guarantor waives:
(i) presentment, demand and protest and notice of presentment, dishonor, notice
of intent to accelerate, notice of acceleration, protest, default, nonpayment,
maturity, release, compromise, settlement, extension or renewal of any or all
commercial paper, accounts, contract rights, documents, instruments, chattel
paper and guaranties at any time held by Agent on which Borrower or Guarantor
may in any way be liable, and hereby ratifies and confirms whatever Agent may do
in this regard, (ii) all rights to notice and a hearing prior to Agent's taking
possession or control of, or to Agent's replevy, attachment or levy upon, the
Collateral or any bond or security which might be required by any court prior to
allowing Agent to exercise any of its remedies, and (iii) the benefit of all
valuation, appraisal and exemption laws. Each of Borrower and Guarantor
acknowledges that it has been advised by counsel of its choice with respect to
this Agreement, the other Loan Documents and the transactions evidenced by this
Agreement and the other Loan Documents.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations. (a) Each of Borrower and Guarantor
hereby consents to Agent's and any Lender's sale of participations, and to
Agent's and any Lender's assignment, at any time or times, of any of the Loan
Documents, any Commitment or of any portion thereof or interest therein,
including, without limitation, Agent's and any Lender's rights, title,
interests, remedies, powers or duties thereunder, whether evidenced by a writing
or not; provided, however, that any assignment by a Lender of all or any part of
its Commitment shall (i) require the consent of Borrower, which consent shall
not be unreasonably withheld, provided such consent shall not be required in
connection with any loan portfolio transfer made by GE Capital; (ii) require the
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consent of Agent and the execution of a Lender Addition Agreement in form and
substance satisfactory to Agent; (iii) be conditioned on such assignee Lender
representing to the assigning Lender and the Agent that it is purchasing the
portion of the Revolving Credit Loan and/or Term Loan to be assigned to it for
its own account, for investment purposes and not with a view to the distribution
thereof; (iv) if a partial assignment, be in an amount at least equal to
$5,000,000 and, after giving effect to any such partial assignment, the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; and (v) include a payment by the assigning Lender to the Agent of an
assignment fee of $3,000; and, provided, further, that any participation by a
Lender of all or any part of its Commitments shall be in an amount at least
equal to $5,000,000, and with the understanding that all amounts payable by
Borrower and Guarantor hereunder shall be determined as if that Lender had not
sold such participation, and that the holder of any such participation shall not
be entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount,
interest rate or fees payable hereunder in which such holder participates, (ii)
any extension of the final scheduled maturity date of the principal amount of
the Revolving Credit Loan and/or Term Loan in which such holder participates,
and (iii) any release of all or substantially all of the Collateral (other than
in accordance with the terms of this Agreement, the Collateral Documents or the
other Loan Documents). Each of Borrower and Guarantor hereby acknowledges and
agrees that any participation will give rise to a direct obligation of Borrower
and Guarantor to the participant and the participant shall for purposes of
Sections 1.15, 1.16 and 9.8 be considered to be a "Lender".
(b In the case of an assignment by a Lender under this Section 9.1, the
assignee shall have, to the extent of such assignment, the same rights, benefits
and obligations as it would if it were a Lender hereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof. Each of Borrower and Guarantor hereby acknowledges
and agrees that any assignment will give rise to a direct obligation of Borrower
and Guarantor to the assignee and that the assignee shall be considered to be a
"Lender". In all instances, each Lender's liability to make Loans hereunder
shall be several and not joint and shall be limited to such Lender's Pro Rata
Share.
(c Except as otherwise provided in this Section 9.1, no Lender shall, as
between Borrower and that Lender, be relieved of any of its obligations
hereunder as a result of any sale, assignment, transfer or negotiation of, or
granting of participation in, all or any part of the Loans, the Notes or other
Obligations owed to such Lender.
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(d Each of Borrower and Guarantor shall assist any Lender permitted to
sell assignments or participations under this Section 9.1 as reasonably required
to enable the assigning or selling Lender to effect any such assignment or
participation, including the execution and delivery of any and all agreements,
notes and other documents and instruments as shall be requested and the
preparation of informational materials for, and the participation of management
in meetings with, potential assignees or participants. Borrower shall certify
the correctness, completeness and accuracy of all descriptions of Borrower and
Guarantor and their respective affairs contained in any selling materials
provided by Borrower and all other information provided by Borrower and
Guarantor and included in such materials, except that any projections delivered
shall only be certified by Borrower as having been prepared by Borrower in good
faith and based on reasonable assumptions consistent with Borrower's and
Guarantor's anticipated business plans.
(e A Lender may furnish any information concerning Borrower and Guarantor
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided, however, that such
Lender shall utilize commercially reasonable procedures to cause such assignees
or participants to maintain the confidentiality of confidential information of
Borrower and Guarantor. In the event Agent or any Lender assigns or otherwise
transfers all or any part of a Note, Agent or any such Lender shall so notify
Borrower and Borrower shall, upon the request of Agent or such Lender, execute
new Notes in exchange for the Notes being assigned.
9.2 Appointment of Agent. GE Capital is hereby appointed Agent to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and Lenders and neither Borrower, Guarantor nor any other Person shall
have any rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement and the other Loan
Documents, Agent shall act solely as an agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for Borrower, Guarantor or any other Person. Agent shall
have no duties or responsibilities except for those expressly set forth in this
Agreement and the other Loan Documents. The duties of Agent shall be mechanical
and administrative in nature and Agent shall not have, or be deemed to have, by
reason of this Agreement, any other Loan Document or otherwise a fiduciary
relationship in respect of any Lender. Neither Agent nor any of its officers,
directors, employees, agents or representatives shall be liable to any Lender
for any action taken or omitted to be taken by it hereunder or under any other
Loan Document, or in connection herewith or therewith, except for damages caused
by its or their own gross negligence or willful misconduct as finally determined
by
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a court of competent jurisdiction after all possible appeals have been
exhausted.
If Agent shall request instructions from Requisite Lenders with respect
to any act or action (including failure to act) in connection with this
Agreement or any other Loan Document, then Agent shall be entitled to refrain
from such act or taking such action unless and until Agent shall have received
instructions from Requisite Lenders, and Agent shall not incur liability to any
Person by reason of so refraining. Agent shall be fully justified in failing or
refusing to take any action hereunder or under any other Loan Document (a) if
such action would, in the opinion of Agent, be contrary to law or the terms of
this Agreement or any other Loan Document or (b) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its directors,
officers, agents or employees shall be liable for any action taken or omitted to
be taken by it or them under or in connection with this Agreement or the other
Loan Documents, except for its or their own gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction after all
possible appeals have been exhausted. Without limitation of the generality of
the foregoing, Agent: (i) may treat the payee of any Revolving Credit Note or
Term Note as the holder thereof until Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form satisfactory to
Agent; (ii) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken in good faith by it in accordance with the advice of such
counsel, accountants or experts; (iii) makes no warranty or representation to
any Lender and shall not be responsible to any Lender for any statements,
warranties or representations made in or in connection with this Agreement or
the other Loan Documents; (iv) shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions of this Agreement or the other Loan Documents on the part of Borrower
or Guarantor or to inspect the Collateral (including the books and records) of
Borrower or Guarantor; (v) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which
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may be by telecopy, telegram, cable or telex) believed by it to be genuine and
signed or sent by the proper party or parties.
9.4 GE Capital and Affiliates. With respect to its commitment hereunder
to make the Term Loan and Revolving Credit Advances, GE Capital shall have the
same rights and powers under this Agreement and the other Loan Documents as any
other Lender and may exercise the same as though it were not Agent; and the term
"Lender" or "Lenders" shall, unless otherwise expressly indicated, include GE
Capital in its individual capacity. GE Capital and its Affiliates may lend money
to, invest in, and generally engage in any kind of business with, Borrower or
any of its Affiliates and any Person who may do business with or own securities
of Borrower or any Affiliate, all as if GE Capital were not Agent and without
any duty to account therefor to Lenders. GE Capital and its Affiliates may
accept fees and other consideration from Borrower or Guarantor for services in
connection with the Agreement or otherwise without having to account for the
same to Lenders.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the financial statements referred to in Section 3.4 and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of Borrower and Guarantor and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of the Lenders holding disproportionate interests in the Loans, and
expressly consents to, and waives any claim based upon, such conflict of
interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Borrower or Guarantor and without limiting the Obligations of
Borrower or Guarantor hereunder), ratably according to their respective Pro Rata
Shares, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against Agent in any way relating to or arising out of this Agreement or any
other Loan Document or any action taken or omitted by Agent in connection
therewith; provided, however, that no Lender shall be liable for any portion of
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from Agent's gross negligence
or wilful misconduct as finally determined by a court of competent jurisdiction
after all possible appeals have been exhausted. Without limiting the foregoing,
each Lender agrees to reimburse Agent promptly upon demand for its ratable
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share of any out-of-pocket expenses (including counsel fees) incurred by Agent
in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent is not reimbursed for such expenses by Borrower or Guarantor.
9.7 Successor Agent. Agent may resign at any time by giving not less than
thirty (30) days' prior written notice thereof to Lenders and Borrower. Upon any
such resignation, the Requisite Lenders shall have the right to appoint a
successor Agent which shall be reasonably acceptable to Borrower. If no
successor Agent shall have been so appointed by the Requisite Lenders and shall
have accepted such appointment, within 30 days after the resigning Agent's
giving notice of resignation then the resigning Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a Lender, if a Lender is
willing to accept such appointment, or otherwise shall be a commercial bank or
financial institution organized under the laws of the United States of America
or of any State thereof having a combined capital and surplus of at least
$300,000,000, which is reasonably acceptable to Borrower. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent, and the resigning Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning Agent shall continue. After any resigning Agent's resignation
hereunder as Agent, the provisions of this Section 9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent under
this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Note is hereby authorized at any time or from
time to time, without notice to Borrower, Guarantor or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all balances held by it at any of its offices for the account of
Borrower (regardless of whether such balances are then due to Borrower) or
Guarantor and any other properties or assets any time held or owing by that
Lender or that holder to or for the credit or for the account of Borrower or
Guarantor against and on account of any of the Obligations which are not paid
when due. Any Lender or holder of any Note having a right to set off shall, to
the extent the amount of any such set off exceeds its Pro Rata Share of the
Obligations, purchase for cash (and the other Lenders or holders shall sell)
such participations in each such other Lender's or holder's Pro Rata Share
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of the Obligations as would be necessary to cause such Lender to share such
excess with each other Lender or holder in accordance with their respective Pro
Rata Shares. Each of Borrower and Guarantor agrees, to the fullest extent
permitted by law, that (a) any Lender or holder may exercise its right to set
off with respect to amounts in excess of its Pro Rata Share of the Obligations
and may sell participations in such excess to other Lenders and holders and (b)
any Lender or holders so purchasing a participation in the Revolving Credit
Advances or Term Loan made or other Obligations held by other Lenders or holders
may exercise all rights of set-off, bankers' lien, counterclaim or similar
rights with respect to such participation as fully as if such Lender or holder
were a direct holder of Revolving Credit Advances, Term Loan and other
Obligations in the amount of such participation.
9.9 Disbursement of Funds. Agent may, on behalf of Lenders, disburse
funds to Borrower for Revolving Credit Advances requested. Each Lender shall
reimburse Agent on demand for all funds disbursed on its behalf by Agent, or if
Agent so requests, each Lender will remit to Agent its Pro Rata Share of any
Revolving Credit Advance before Agent disburses same to Borrower. If any Lender
fails to pay the amount of its Pro Rata Share forthwith upon Agent's demand,
Agent shall promptly notify Borrower and Borrower shall immediately repay such
amount to Agent. Nothing in this Section 9.9 or elsewhere in this Agreement or
the other Loan Documents shall be deemed to require Agent to advance funds on
behalf of any Lender or to relieve any Lender from its obligation to fulfill its
Revolving Credit Loan Commitment hereunder or to prejudice any rights that
Borrower may have against any Lender as a result of any default by such Lender
hereunder.
9.10 Advances; Payments; Information; Non-Funding Lenders.
(a) Revolving Credit Advances; Payments; Fee Payments.
(i) The Revolving Credit Loan balance may fluctuate from day to
day through Agent's disbursement of funds to, and receipt of funds from,
Borrower. In order to minimize the frequency of transfers of funds between Agent
and each Lender, Revolving Credit Advances and payments in respect thereof will
be settled according to the procedures described in Sections 9.10(a)(ii) and
9.10(a)(iii) below. Notwithstanding these procedures, each Lender's obligation
to fund its portion of any advances made by Agent to Borrower will commence on
the date such advances are made by Agent. Such payments will be made by each
Lender without setoff, counterclaim or reduction of any kind.
(ii) Not later than 11:00 a.m. (Chicago time) on the second (2nd)
Business Day of each week, or more frequently (including daily) if Agent so
elects or if Borrower has requested
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a Revolving Credit Advance in excess of $500,000 (each such day being a
"Settlement Date"), Agent will advise each Lender by telephone, telex or
telecopy of the amount of such Lender's Pro Rata Share of the Revolving Credit
Loan balance as of the close of business on the first (1st) Business Day
immediately preceding the Settlement Date. In the event that payments are
necessary to adjust the amount of such Lender's portion of the Revolving Credit
Loan to such Lender's Pro Rata Share of the Revolving Credit Loan as of any
Settlement Date, the party from which such payment is due will pay the other, in
same day funds, by wire transfer to the other's account not later than 2:00 p.m.
(Chicago time) on the Settlement Date. Notwithstanding the foregoing, if Agent
so elects, Agent may require that each Lender make its Pro Rata Share of any
requested Revolving Credit Advance available to Agent for disbursement prior to
the funding of such Revolving Credit Advance. If Agent elects to require that
such funds be so made available, Agent shall advise each Lender by telephone,
telex or telecopy of the amount of such Lender's Pro Rata Share of the requested
Revolving Credit Advance no later than 11:00 a.m. (Chicago time) on the date of
funding thereof, and each such Lender shall pay Agent such Lender's Pro Rata
Share of such requested Revolving Credit Advance, in same day funds, by wire
transfer to the Agent's account not later than 2:00 p.m. (Chicago time) on the
date of funding such Revolving Credit Advance.
(iii) For purposes of this Section 9.10(a)(iii), the following
terms and conditions will have the following meanings:
(A) "Daily Loan Balance" means, with respect to the
Revolving Credit Loan or Term Loan, an amount
calculated as of the end of each calendar day by
subtracting (i) the cumulative principal amount paid
by Agent to a Lender with respect to such Loan from
the Closing Date through and including such calendar
day, from (ii) the cumulative principal amount of
such Loan advanced by such Lender to Agent from the
Closing Date through and including such calendar
day.
(B) "Daily Interest Rate" means, with respect to the
Revolving Credit Loan or Term Loan, an amount
calculated by dividing the interest rate payable to
a Lender on such Loan (as set forth in Section 1.5)
as of each calendar day by three hundred sixty (360)
days.
(C) "Daily Interest Amount" means, with respect to the
Revolving Credit Loan or Term Loan, an amount
calculated by multiplying the Daily
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Loan Balance of such Loan by the associated Daily
Interest Rate applicable to such Loan.
(D) "Interest Ratio" means, with respect to the
Revolving Credit Loan or Term Loan, a number
calculated by dividing the total amount of interest
on such Loan received by Agent during the
immediately preceding month by the total amount of
interest on such Loan due from Borrower during the
immediately preceding month.
On the first (1st) Business Day of each calendar month (an "Interest Settlement
Date"), Agent will advise each Lender by telephone, telex or telecopy of the
amount of such Lender's Pro Rata Share of principal, interest and Fees paid for
the benefit of Lenders on the Revolving Credit Loan and Term Loan as of the end
of the last day of the immediately preceding month. Provided that such Lender
has made all payments required to be made by it under this Agreement and the
other Loan Documents, Agent will pay to such Lender, by wire transfer to such
Lender's account (as specified by such Lender on Schedule K or the applicable
Lender Addition Agreement, as amended by such Lender from time to time after the
date hereof pursuant to the notice provisions contained herein or in the
applicable Lender Addition Agreement) not later than 12:00 noon (Chicago time)
on the next Business Day following the Interest Settlement Date, such Lender's
Pro Rata Share of principal, interest and Fees paid for the benefit of Lenders
on the Revolving Credit Loan and Term Loan, as applicable. Such Lender's Pro
Rata Share of interest on the Revolving Credit Loan and Term Loan, as
applicable, will be calculated by adding together the Daily Interest Amounts for
each calendar day of the prior month for such Loan and multiplying the total
thereof by the Interest Ratio for such Loan.
(b) Availability of Lender's Pro Rata Share.
(i) Agent may assume that each Lender will make its Pro Rata Share of
each Revolving Credit Advance available to Agent on the first (1st) Business Day
following each Settlement Date. If such Pro Rata Share is not, in fact, paid to
Agent by such Lender when due, Agent will be entitled to recover such amount on
demand from such Lender without set-off, counterclaim or deduction of any kind.
(ii) Nothing contained in this Section 9.10(b) will be deemed to relieve
any Lender of its obligation to fulfill its Commitments or to prejudice any
rights Agent or Borrower may have against any Lender as a result of any default
by such Lender under this Agreement.
(c) Return of Payments.
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(i) If Agent pays an amount to a Lender under this Agreement in the
belief or expectation that a related payment has been or will be received by
Agent from Borrower or Guarantor and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without set-off, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by Agent
under this Agreement must be returned to Borrower or Guarantor or paid to any
other Person pursuant to any insolvency law or otherwise, then, notwithstanding
any other term or condition of this Agreement or any other Loan Document, Agent
will not be required to distribute any portion thereof to any Lender. In
addition, each Lender will repay to Agent on demand any portion of such amount
that Agent has distributed to such Lender, together with interest at such rate,
if any, as Agent is required to pay to Borrower, Guarantor or such other Person,
without set-off, counterclaim or deduction of any kind.
(d) Dissemination of Information.
Agent will use reasonable efforts to provide Lenders with any information
received by Agent from Borrower or Guarantor which is required to be provided to
Lenders hereunder, with any notice of Default or Event of Default received by
Agent from Borrower or Guarantor, with any notice of Default or Event of Default
delivered by Agent to Borrower or Guarantor, with notice of any Default or Event
of Default of which Agent has actually become aware and with notice of any
action taken by Agent following any Default or Event of Default; provided,
however, that Agent shall not be liable to any Lender for any failure to do so,
except to the extent that such failure is attributable to Agent's gross
negligence or willful misconduct as finally determined by a court of competent
jurisdiction after all possible appeals have been exhausted.
(f) Non-Funding Lenders. The failure of any Lender (such Lender, a
"Non-Funding Lender") to make any Revolving Credit Advance to be made by it on
the date specified therefor shall not relieve any other Lender (each such other
Lender, an "Other Lender") of its obligations to make its Revolving Credit
Advance on such date, but neither any Other Lender nor Agent shall be
responsible for the failure of any Non-Funding Lender to make a Revolving Credit
Advance to be made by such Non-Funding Lender, and no Non-Funding Lender shall
have any obligation to Agent or any Other Lender for the failure by such
Non-Funding Lender. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender" (or be included in the
calculation of "Required Lenders" hereunder) for any voting or consent rights
under or with to any Loan Document. Anything in this Agreement to the contrary
notwithstanding, each
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Lender hereby agrees with each other Lender that no Lender shall take any action
to protect or enforce its rights arising out of this Agreement or the Notes
(including, without limitation, exercising any rights of set-off) without first
obtaining the prior written consent of Agent or Required Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of the Agent.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of Borrower, Guarantor,
Agent, Lenders and their respective successors and assigns, except as otherwise
provided herein or therein. Neither Borrower nor Guarantor may assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder or under any of the other Loan Documents without the prior express
written consent of Agent and Requisite Lenders. Any such purported assignment,
transfer, hypothecation or other conveyance by Borrower or Guarantor without the
prior express written consent of Agent shall be void. The terms and provisions
of this Agreement are for the purpose of defining the relative rights and
obligations of Borrower, Guarantor, Agent and Lenders with respect to the
transactions contemplated hereby and there shall be no third party beneficiaries
of any of the terms and provisions of this Agreement or any of the other Loan
Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in Section 11.2 below. Any letter of interest or commitment letter and/or
fee letter between Borrower and Agent or any of its affiliates, predating this
Agreement and relating to a financing of substantially similar form, purpose or
effect shall be superseded by this Agreement.
11.2 Amendments and Waivers. (a) Except as otherwise provided herein, no
amendment, modification, termination or waiver of any provision of this
Agreement, any of the Notes, or any of the other Loan Documents or consent to
any departure by Borrower or Guarantor therefrom, shall in any event be
effective unless the same shall be in writing and signed by Agent, Requisite
Lenders and Borrower and, to the extent relating to Guarantor, by Guarantor.
(b) In furtherance of and without limiting the foregoing, no amendment,
modification, termination or waiver of or consent with respect to any provision
of this Agreement which (i)
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increases the percentage advance rates set forth in the definition of Borrowing
Base or (ii) makes less restrictive the nondiscretionary criteria for exclusion
from Eligible Accounts and Eligible Inventory set forth in Schedule C and
Schedule D hereto shall be effective unless the same shall be in writing and
signed by Agent, Requisite Lenders and Borrower.
(c) Notwithstanding the foregoing, except to the extent permitted by any
applicable Lender Addition Agreement, no amendment, modification, termination or
waiver shall, unless in writing and signed by Agent and each affected Lender, do
any of the following: (a) increase the principal amount of the Commitment of any
affected Lender; (b) reduce the principal of, rate of interest on or Fees
payable with respect to any Revolving Credit Advance, Letter of Credit
Obligations or Term Loan; (c) extend the final scheduled maturity date of the
principal amount of any Loan; (d) waive, forgive, defer, extend or postpone any
payment of interest or Fees required hereunder; (e) except as otherwise
contemplated herein or in one of the other Loan Documents, permit Borrower to
sell or otherwise dispose of any Collateral with a value exceeding $5,000,000 in
the aggregate; (f) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans which shall be required for Lenders or any
of them to take any action hereunder; and (g) amend or waive this Section 11.2
or the definitions of the terms used in this Section 11.2 insofar as the
definitions affect the substance of this Section 11.2; and provided, further,
that no amendment, modification, termination or waiver affecting the rights or
duties of Agent under this agreement or any other Loan Document shall in any
event be effective, unless in writing and signed by Agent, in addition to
Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on Borrower or Guarantor in
any case shall entitle Borrower or Guarantor to any other or further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 11.2
shall be binding upon each holder of the Notes at the time outstanding and each
future holder of the Notes.
11.3 Fees and Expenses. Borrower and Guarantor shall reimburse Agent for
all reasonable out-of-pocket expenses incurred in connection with (a) the
preparation of the Loan Documents (including the reasonable fees and expenses of
all of its special loan counsel, advisors, consultants and auditors retained in
connection with the Loan Documents and the transactions contemplated thereby and
advice in connection therewith), and (b)
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wire transfers to the account of Borrower or Guarantor. Borrower and Guarantor
shall reimburse Agent for all fees, costs and expenses, including the fees,
costs and expenses of counsel or other advisors (including environmental and
management consultants) for advice, assistance, or other representation in
connection with:
(i) the forwarding to Borrower, Guarantor or any other Person on behalf
of Borrower or Guarantor by Agent of the proceeds of the Revolving Credit
Advances and Term Loan;
(ii) any amendment, modification or waiver of, or consent with respect
to, any of the Loan Documents or advice in connection with the administration of
the loans made pursuant hereto or its rights hereunder or thereunder;
(iii) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, Borrower, Guarantor or any other
Person) in any way relating to the Collateral, any of the Loan Documents or any
other agreement to be executed or delivered in connection therewith or herewith,
whether as party, witness, or otherwise, including any litigation, contest,
dispute, suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against Borrower or any other Person that
may be obligated to Agent by virtue of the Loan Documents;
(iv) any attempt to enforce any rights of Agent or any Lender against
Borrower, Guarantor or any other Person that may be obligated to Agent or any
Lender by virtue of any of the Loan Documents;
(v) efforts to (A) monitor the Loans or any of the other Obligations, (B)
evaluate, observe, assess Borrower or Guarantor or their respective affairs, and
(C) verify, protect, evaluate, assess, appraise, collect, sell, liquidate or
otherwise dispose of any of the Collateral;
including, without limitation, all the attorneys' and other professional and
service providers' fees arising from such services, including those in
connection with any appellate proceedings; and all expenses, costs, charges and
other fees incurred by such counsel and others in any way or respect arising in
connection with or relating to any of the events or actions described in this
Section 11.3 shall be payable, on demand, by Borrower and Guarantor to Agent.
Without limiting the generality of the foregoing, such expenses, costs, charges
and fees may include: fees, costs and expenses of accountants, environmental
advisors, appraisers, investment bankers, management and other consultants and
paralegals; court costs and expenses; photocopying and duplication expenses;
court reporter fees, costs and expenses; long distance telephone charges; air
express charges; telegram charges; secretarial overtime charges; and expenses
for travel,
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lodging and food paid or incurred in connection with the performance of such
legal or other advisory services.
11.4 No Waiver. Agent's or any Lender's failure, at any time or times, to
require strict performance by Borrower or Guarantor of any provision of this
Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Agent or such Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver of an Event of
Default under this Agreement or any of the other Loan Documents shall not
suspend, waive or affect any other Event of Default under this Agreement and any
of the other Loan Documents whether the same is prior or subsequent thereto and
whether of the same or of a different type. None of the undertakings,
agreements, warranties, covenants and representations of Borrower or Guarantor
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by Borrower or Guarantor under this Agreement and no defaults
by Borrower or Guarantor under any of the other Loan Documents shall be deemed
to have been suspended or waived by Agent or any Lender, unless such waiver or
suspension is by an instrument in writing signed by an officer of or other
authorized employee of Agent and Requisite Lenders and directed to Borrower or
Guarantor, as applicable, specifying such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
which Agent or any Lender may have under any other agreement, including the
other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6 Severability. Wherever possible, each provision of this Agreement
and the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
11.7 Conflict of Terms. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
11.8 Authorized Signature. Until Agent shall be notified by Borrower or
Guarantor to the contrary, the signature upon any document or instrument
delivered pursuant hereto of an officer of Borrower or Guarantor listed on
Schedule 11.8 shall bind Borrower
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or Guarantor, as applicable, and be deemed to be the act of Borrower or
Guarantor, as applicable, affixed pursuant to and in accordance with resolutions
duly adopted by Borrower's or Guarantor's Board of Directors.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF ILLINOIS (WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS) AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH OF BORROWER AND GUARANTOR
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXXX
COUNTY, CITY OF CHICAGO, ILLINOIS, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWER, GUARANTOR, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT EACH OF AGENT, LENDERS, BORROWER AND GUARANTOR ACKNOWLEDGE THAT
ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
XXXX COUNTY, CITY OF CHICAGO, ILLINOIS AND, PROVIDED, THAT NOTHING IN THIS
AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF AGENT. EACH OF BORROWER AND GUARANTOR EXPRESSLY SUBMITS
AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND EACH OF BORROWER AND GUARANTOR HEREBY WAIVES ANY OBJECTION
WHICH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE
OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH OF BORROWER AND
GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO IT AT THE ADDRESS SET FORTH IN SCHEDULE J OF THIS AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF BORROWER'S OR
GUARANTOR'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request,
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consent, approval, declaration or other communication shall or may be given to
or served upon either of the parties by the other party, or whenever either of
the parties desires to give or serve upon the other party any communication with
respect to this Agreement, each such notice, demand, request, consent, approval,
declaration or other communication shall be in writing and shall be deemed to
have been validly served, given or delivered (i) upon the earlier of actual
receipt and three (3) Business Days after deposit in the United States Mail,
registered or certified mail, return receipt requested, with proper postage
prepaid, (ii) upon transmission, when sent by telecopy or other similar
facsimile transmission (with such telecopy or facsimile promptly confirmed by
delivery of a copy by personal delivery or United States Mail as otherwise
provided in this Section 11.10), (iii) one (1) Business Day after deposit with a
reputable overnight courier with all charges prepaid or (iv) when delivered, if
hand-delivered by messenger, all of which shall be addressed to the party to be
notified and sent to the address or facsimile number indicated on Schedule J or
to such other address (or facsimile number) as may be substituted by notice
given as herein provided. The giving of any notice required hereunder may be
waived in writing by the party entitled to receive such notice. Failure or delay
in delivering copies of any notice, demand, request, consent, approval,
declaration or other communication to any Person (other than Borrower, Guarantor
or Agent) designated on Schedule J to receive copies shall in no way adversely
affect the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
11.11 Section Titles. The Section titles and Table of Contents contained
in this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG ANY OF AGENT, LENDERS, BORROWER OR GUARANTOR
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
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11.14 Press Releases. Borrower hereby agrees that it is not on the date
hereof issuing any press releases with respect to this Agreement or the Related
Transactions which mentions or uses the name of General Electric Capital
Corporation or its affiliates. Each of Borrower and Guarantor further agrees
that it will not make in the future any press releases using the name of General
Electric Capital Corporation or its affiliates referring to this Agreement
without the prior written consent of GE Capital unless Borrower or Guarantor is
required to do so under law and then, in any event, Borrower or Guarantor will
consult with GE Capital before issuing such press release.
11.15 Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against Borrower
or Guarantor for liquidation or reorganization, should Borrower or Guarantor
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of Borrower's or Guarantor's assets, and shall continue to be
effective or be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
12. GUARANTY
Guarantor hereby unconditionally guarantees the due and punctual payment
of all Obligations of Borrower from time to time outstanding, including without
limitation the due and punctual payment of the principal of and interest on the
Loans made to Borrower pursuant to this Agreement and the due and punctual
payment of all other amounts payable by Borrower under this Agreement or the
other Loan Documents (collectively, the "Guaranteed Obligations").
The obligations of Guarantor under this Section 12 and under any other
Loan Document executed by Guarantor shall be unconditional and absolute and,
without limiting the generality of the foregoing, shall not be released,
discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release in
respect of any Guaranteed Obligation of Borrower or the Collateral therefor
under this Agreement or the other Loan Documents;
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(b) any modification or amendment of or supplement to this Agreement or
the other Loan Documents unless such modification, amendment or supplement
expressly releases or discharges the Guaranteed Obligations;
(c) any change in the corporate existence, structure or ownership of
Borrower, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting Borrower or its Collateral or assets;
(d) the existence of any claim, set-off or other rights which Borrower
may have at any time against Guarantor, the Agent, any Lender or any other
Person, whether in connection herewith or any unrelated transactions, provided
that nothing herein shall prevent the assertion of any such claim by separate
suit or compulsory counterclaim;
(e) any invalidity or unenforceability for any reason of any provision or
all of this Agreement or the other Loan Documents relating to or against
Borrower, or any provision of applicable law or regulation purporting to
prohibit the payment by Borrower of the principal of or interest on any Note or
any other amount payable by it under this Agreement or the other Loan Documents;
or
(f) any other act or omission to act or delay of any kind by Borrower,
Agent, any Lender or any other Person, or any other circumstance whatsoever
which might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of Borrower's obligations under this Agreement or the other
Loan Documents.
Guarantor's obligations under this Section 12, the other terms and
provisions of this Agreement and under any other Loan Document executed by
Guarantor shall remain in full force and effect until all Guaranteed Obligations
shall have been paid in full and this Agreement and the other Loan Documents
shall have terminated in accordance with their terms. If at any time any payment
of the principal of or interest on any Note made by Borrower or any other amount
payable by Borrower under this or the other Loan Documents is rescinded or must
be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of Borrower or otherwise, Guarantor's obligations under this
Section 12 with respect to such payment shall be revived and continued in full
force and effect.
Guarantor irrevocably waives notice, presentment, protest, notice, demand
or action on delinquency in respect of the Guaranteed Obligations or any part
thereof, including any right to require the Agent or the Lenders to xxx the
Borrower, any other guarantor or any other Person obligated with respect to the
Obligations or any part thereof, or otherwise to enforce payment thereof against
any collateral securing the same.
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Until the Obligations are paid in full, the Guarantor shall not exercise
any right of subrogation, reimbursement, contribution or indemnity with respect
to payments made by the Guarantor pursuant to this Section 12 or under any other
Loan Document executed by Guarantor. In the event that the demand for payment of
any amount payable by Borrower under this Agreement or the other Loan Documents
is stayed upon the insolvency, bankruptcy or reorganization of Borrower, all
such amounts otherwise subject to acceleration under the terms of this Agreement
or the other Loan Documents shall nonetheless be payable by the Guarantor
hereunder forthwith upon demand by the Agent.
If in any action or proceeding involving the state, federal or foreign
bankruptcy, insolvency or other law affecting the rights of creditors generally,
the obligations of Guarantor set forth in this Section 12 or under any other
Loan Document executed by Guarantor would be held or determined to be void,
invalid or unenforceable on account of the amount of the aggregate liability of
Guarantor hereunder, then notwithstanding any other provision of this Section 12
or under any other Loan Document executed by Guarantor to the contrary, the
aggregate amount of Guarantor's liability shall, without any further action of
Agent, Lenders or any other Person, be automatically limited and reduced with
respect to Guarantor to the highest amount which is valid and enforceable as
determined in such action or proceeding.
[signature pages follow]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
XXXXXX CO., INC.,
as Borrower
By: ________________________________
Title:______________________________
By: ________________________________
Title:______________________________
XXXXX MACHINE CO., INC.,
as Guarantor
By: ________________________________
Title: ____________________________
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
By: _______________________________
Title:_____________________________
Revolving Credit Loan
Commitment:
$45,000,000.00
Term Loan Commitment:
$8,000,000.00
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SCHEDULE A (Recitals)
to
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Agreement shall have (unless otherwise
provided elsewhere in the Agreement) the following respective meanings and all
section references in the following definitions shall refer to Sections of the
Agreement:
"Account Debtor" shall mean any Person who may become obligated to
Borrower, or any of its Subsidiaries under, with respect to, or on account of,
an Account.
"Accounts" shall mean all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by Borrower or Guarantor, and, in any
event, including (a) all accounts receivable, other receivables, book debts and
other forms of obligations (other than forms of obligations evidenced by chattel
paper, documents or instruments) now owned or hereafter received or acquired by
or belonging or owing to Borrower or Guarantor, whether arising out of goods
sold or services rendered by it or from any other transaction (including any
such obligations which may be characterized as an account or contract right
under the Code), (b) all of Borrower's or Guarantor's rights in, to and under
all purchase orders or receipts now owned or hereafter acquired by it for goods
or services, (c) all of Borrower's or Guarantor's rights to any goods
represented by any of the foregoing (including unpaid sellers' rights of
rescission, replevin, reclamation and stoppage in transit and rights to
returned, reclaimed or repossessed goods), (d) all monies due or to become due
to Borrower or Guarantor, under all purchase orders and contracts for the sale
of goods or the performance of services or both by Borrower or Guarantor, or in
connection with any other transaction (whether or not yet earned by performance
on the part of Borrower or Guarantor) now or hereafter in existence, including
the right to receive the proceeds of said purchase orders and contracts, and (e)
all collateral security and guarantees of any kind, now or hereafter in
existence, given by any Person with respect to any of the foregoing.
"Affiliate" shall mean, with respect to any Person, (i) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, five percent (5%) or more of the Stock having
ordinary voting power in the election of directors of such Person, (ii) each
Person that
controls, is controlled by or is under common control with such Person or any
Affiliate of such Person or (iii) each of such Person's officers, directors,
joint venturers and partners. For the purposes of this definition, "control" of
a Person shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise; provided, however,
that the term "Affiliate" shall specifically exclude Agent and any Lender.
"Agent" shall mean GE Capital or its successor appointed pursuant to
Section 9.2.
"Agreement" shall mean the Credit Agreement, dated as of June 30, 1995,
as amended and restated as of February __, 1998, by and among Borrower,
Guarantor, GE Capital, as Agent and Lender and the other Lenders signatory from
time to time to the Agreement, and shall include all restatements and
modifications thereof and amendments and supplements thereto and any appendices,
exhibits or schedules to any of the foregoing, and shall refer to the Agreement
as the same may be in effect at any and all times such reference becomes
operative.
"Applicable Margin" shall mean,for Index Rate Loans, until June 1, 1997,
two and one-half percent (2.5%), and thereafter a percentage in effect for the
then applicable Margin Period equal to the percentage shown below opposite the
Borrower's EBITDA for the twelve (12) full consecutive calendar months ending
with the most recent Fiscal Month prior to such Margin Period for which Borrower
has delivered its monthly financial statements to Agent pursuant to clause (a)
of Schedule G ("EBITDA Calculation Period"):
Applicable Margin for
EBITDA for the EBITDA Index Rate Loans for the
Calculation Period Related Margin Period
--------------------- -------------------------
Greater than $23,500,000 2.00%
Greater than $20,750,000 2.50%
but less than or equal to
$23,500,00
Less than or equal to 3.00%
$20,750,000
As used in this definition: "Margin Period" shall mean, on any date of
determination, the period (i) commencing five (5) days after the delivery of its
monthly financial statements by the Borrower to the Agent as required by clause
(a) of Schedule G for its most recent Fiscal Month, and (ii) ending four (4)
days after the delivery of such monthly financial statements for the next
succeeding Fiscal Month.
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"Borrower Accounts" shall have the meaning set forth in Schedule E.
"Borrower" shall have the meaning assigned thereto in the recitals to the
Agreement.
"Borrowing Availability" shall have the meaning assigned to it in Section
1.1(a).
"Borrowing Base" shall mean, as of any date of determination by Agent, in
its discretion from time to time, an amount equal to the sum at such time of:
(a) eighty-five percent (85%) of Eligible Accounts, less reserves;
(b) sixty percent (60%) of the book value of Raw Material and
Finished Goods that constitute Eligible Inventory valued on a first-in,
first-out basis (at the lower of cost or market), less reserves;
(c) forty percent (40%) of the book value of Work-In-Process that
constitutes Eligible Inventory, included on a first-in, first-out basis,
at the lower of cost or market, less reserves.
"Borrowing Base Certificate" shall mean a certificate in the form
attached to the Agreement as Exhibit B.
"Business Day" shall mean any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the State of
Illinois.
"Capital Expenditures" shall mean all payments (including the principal
portion of payments under Capital Leases, installment purchase agreements and
other similar purchase money financing arrangements) for any fixed assets or
improvements or for replacements, substitutions or additions thereto, that have
a useful life of more than one year and that are required to be capitalized
under GAAP.
"Capital Lease" shall mean, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee
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that, in accordance with GAAP, either would be required to be classified and
accounted for as a capital lease on a balance sheet of such Person or otherwise
be disclosed as such in a note to such balance sheet, other than any such lease
under which such Person is the lessor.
"Capital Lease Obligation" shall mean, with respect to any Capital Lease,
the amount of the obligation of the lessee thereunder that, in accordance with
GAAP, would appear on a balance sheet of such lessee in respect of such Capital
Lease or otherwise be disclosed in a note to such balance sheet.
"Carry Over Amount" shall have the meaning assigned thereto on Schedule
I.
"Change of Control" shall mean any event, transaction or occurrence as a
result of which any Person and its Affiliates shall own or control, directly or
indirectly, in the aggregate 51% or more of the Voting Stock, on a fully diluted
basis.
"Charges" shall mean all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including, without limitation, taxes owed
to the PBGC at the time due and payable), levies, assessments, charges, liens,
claims or encumbrances upon or relating to (i) the Collateral, (ii) the
Obligations, (iii) the employees, payroll, income or gross receipts of Borrower,
(iv) Borrower's ownership or use of any properties or other assets, or (v) any
other aspect of Borrower's businesses.
"Chattel Paper" shall mean any "chattel paper," as such term is defined
in the Code, now owned or hereafter acquired by Borrower, wherever located.
"Closing Date" shall mean June 30, 1995, or such later date as the
Borrower and Agent may mutually agree.
"Code" shall mean the Uniform Commercial Code as the same may, from time
to time, be in effect in the State of Illinois; provided, however, in the event
that, by reason of mandatory provisions of law, any or all of the attachment,
perfection or priority of Agent's or any Lender's security interest in any
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of Illinois, the term "Code" shall mean the
Uniform Commercial Code as in effect in such other jurisdiction solely for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.
"Collateral" shall mean the property covered by the Security Agreement,
the Mortgages and the other Collateral Documents and any other property, real or
personal, tangible or intangible, now existing or hereafter acquired, that may
at any time be or become subject to a security interest or Lien in favor of
Agent, on behalf of itself and Lenders, to secure the Obligations.
"Collateral Documents" shall mean the Security Agreement, the Mortgages,
the Patent Security Agreement, the Trademark Security Agreement, the Copyright
Security Agreement, and all similar agreements entered into guarantying payment
of, or granting
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a Lien upon property as security for payment of, the Obligations.
"Collateral Reports" shall mean the reports with respect to the
Collateral referred to in Schedule H.
"Collection Account" shall mean that certain account of Agent, account
number 00000000 in the name of GECC\CF at Bankers Trust Company, 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx, XXX No. 000000000.
"Commitment Termination Date" shall mean the earliest of (i) June 30,
2000, (ii) the date on which the Term Loan is paid in full, (iii) the date of
termination of Lenders' obligations to advance funds or permit existing advances
to remain outstanding pursuant to Section 8.2, and (iv) the date of indefeasible
prepayment in full by Borrower of the Revolving Credit Loan, and the permanent
reduction of the Revolving Credit Loan Commitment to zero dollars ($0), in
accordance with the provisions of Section 1.3.
"Commitments" shall mean (a) as to any Lender, the aggregate commitment
of such Lender to make Revolving Credit Advances and the Term Loan as set forth
on the signature page to the Agreement or in the most recent Lender Addition
Agreement executed by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Revolving Credit Advances and the Term Loan,
as such amount may be further adjusted, if at all, from time to time in
accordance with the Agreement.
"Concentration Account" shall have the meaning assigned to it on Schedule
E.
"Contracts" shall mean all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by Borrower, and, in any event, including
all contracts, undertakings, or agreements (other than rights evidenced by
Chattel Paper, Documents or Instruments) in or under which Borrower, may now or
hereafter have any right, title or interest, including any agreement relating to
the terms of payment or the terms of performance of any Account.
"Copyright License" shall mean any and all rights now owned or hereafter
acquired by Borrower or Guarantor under any written agreement granting any right
to use any Copyright or Copyright registration.
"Copyright Security Agreement" shall mean the Copyright Security
Agreement made in favor of Agent, on behalf of itself and Lenders, by Borrower.
"Copyrights" shall mean any and all of the following now owned or
hereafter acquired by Borrower or Guarantor: (i) all copyrights and general
intangibles of like nature (whether registered or unregistered), now owned or
existing or hereafter
-5-
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, including, without limitation, all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (ii) all
renewals thereof.
"Currency Agreement" shall mean any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement designed to protect the Persons entering into same against
fluctuations in currency values.
"Current Assets" shall mean Borrower's current assets as calculated in
accordance with GAAP, except that debts due from Affiliates shall be excluded
therefrom.
"Current Liabilities" shall mean all liabilities which should, in
accordance with GAAP, be classified as current liabilities, and in any event
shall include all Indebtedness payable on demand or within one year from the
dates of determination without any option on the part of the obligor to extend
or renew beyond such year, all accruals for federal or other taxes based on or
measured by income and payable within such year, and the current portion of
long-term debt required to be paid within one year.
"Default" shall mean any event which, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"Default Rate" shall have the meaning assigned to it in Section 1.5(d).
"Disbursement Account" shall have the meaning set forth in Schedule E.
"Division" shall mean either of the Cudahy Forging or Industrial Products
divisions of Borrower.
"Documents" shall mean any "documents," as such term is defined in the
Code, now owned or hereafter acquired by Borrower or Guarantor, wherever
located.
"DOL" shall mean the United States Department of Labor or any successor
thereto.
"Dollars or $" shall mean, lawful currency of the United States of
America.
"EBITDA" shall mean, with respect to the Borrower for
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any period, the consolidated net income from operations (before extraordinary
items, interest, taxes, depreciation, amortization, and expenses and costs
directly related to the consummation of the transactions contemplated by the
Loan Documents) of Borrower determined in accordance with GAAP and in a manner
consistent with the projections referred to in Section 3.4.
"Eligible Accounts" shall have the meaning assigned to it on Schedule C.
"Eligible Inventory" shall have the meaning assigned to it on Schedule D.
"Environmental Laws" shall mean all federal, state, local and foreign
laws, statutes, ordinances and regulations, now or hereafter in effect, and in
each case as amended or supplemented from time to time, and any applicable
judicial or administrative interpretation thereof, including any applicable
judicial or administrative order, consent decree or judgment, relative to the
applicable real estate, relating to the regulation and protection of human
health, safety, the environment and natural resources (including ambient air,
surface water, groundwater, wetlands, land surface or subsurface strata,
wildlife, aquatic species and vegetation). Environmental Laws include, but are
not limited to, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended (42 U.S.C. ss. 9601 et seq.) ("CERCLA"); the
Hazardous Material Transportation Act, as amended (49 U.S.C. ss. 1801 et seq.);
the Federal Insecticide, Fungicide, and Rodenticide Act, as amended (7 U.S.C.
ss. 136 et seq.); the Resource Conservation and Recovery Act, as amended (42
U.S.C. ss. 6901 et seq.) ("RCRA"); the Toxic Substance Control Act, as amended
(15 U.S.C. ss. 2601 et seq.); the Clean Air Act, as amended (42 U.S.C. ss. 740
et seq.); the Federal Water Pollution Control Act, as amended (33 U.S.C. ss.
1251 et seq.); the Occupational Safety and Health Act, as amended (29 U.S.C. ss.
651 et seq.) ("OSHA"); and the Safe Drinking Water Act, as amended (42 U.S.C.
ss. 300(f) et seq.), and any and all regulations promulgated thereunder, and all
analogous state, local and foreign counterparts or equivalents and any transfer
of ownership notification or approval statutes.
"Environmental Liabilities and Costs" shall mean all liabilities,
obligations, responsibilities, remedial actions, removal actions, losses,
damages, punitive damages, consequential damages, treble damages, costs and
expenses (including all fees, disbursements and expenses of counsel, experts and
consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim, suit,
action or demand by any person or entity, whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute or
common law (including any thereof
-7-
arising under any Environmental Law, permit, order or agreement with any
Governmental Authority) and which relate to any health or safety condition
regulated under any Environmental Law or in connection with any other
environmental matter or Release, threatened Release or the presence of a
Hazardous Material or threatened Release of a Hazardous Material.
"Equipment" shall mean all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by Borrower or Guarantor, wherever located
and, in any event, including all Borrower's or Guarantor's machinery and
equipment, including processing equipment, conveyors, machine tools, data
processing and computer equipment with software and peripheral equipment (other
than software constituting part of the Accounts), and all engineering,
processing and manufacturing equipment, office machinery, furniture, materials
handling equipment, tools, attachments, accessories, automotive equipment,
trailers, trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock
and other equipment of every kind and nature, trade fixtures and fixtures not
forming a part of real property, all whether now owned or hereafter acquired,
and wherever situated, together with all additions and accessions thereto,
replacements therefor, all parts therefor, all substitutes for any of the
foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
and rights with respect thereto, and all products and proceeds thereof and
condemnation awards and insurance proceeds with respect thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time, and any
regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to Borrower, any trade or
business (whether or not incorporated) which, together with Borrower, is treated
as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of
the IRC.
"ERISA Event" shall mean, with respect to Borrower, or any ERISA
Affiliate, (i) a Reportable Event with respect to a Title IV Plan or a
Multiemployer Plan; (ii) the withdrawal of Borrower, or any ERISA Affiliate from
a Title IV Plan subject to Section 4063 of ERISA during a plan year in which it
was a substantial employer as defined in Section 4001(a)(2) of ERISA; (iii) the
complete or partial withdrawal of Borrower or any ERISA Affiliate from any
Multiemployer Plan; (iv) the filing of a notice of intent to terminate a Title
IV Plan or the treatment of a plan amendment as a termination under Section 4041
of ERISA; (v) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (vi) the failure to make required contributions
to a Qualified Plan; or (vii) any other event or condition which might
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to
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administer, any Title IV Plan or Multiemployer Plan or the imposition of any
liability under Title IV of ERISA, other than PBGC premiums due but not
delinquent under Section 4007 of ERISA.
"Event of Default" shall have the meaning assigned to it in Section 8.1.
"Federal Reserve Board" shall have the meaning assigned to it in Section
3.11.
"Fees" shall mean any and all fees payable to Agent or any Lender
pursuant to the Agreement or any of the other Loan Documents.
"Financial Officer" means the chief financial officer of the Borrower or,
in connection with the certificate required by Section 2.1(h), such other
officer designated by the Borrower's Board of Directors as being knowledgeable
as to the overall financial management of Borrower.
"Financial Statements" shall mean the financial statements referred to in
Schedule 3.4.
"Finished Goods" shall mean finished goods included in Borrower's
Inventory as determined in accordance with GAAP.
"Fiscal Month" shall mean any of the monthly accounting periods of
Borrower.
"Fiscal Quarter" shall mean any of the quarterly accounting periods of
Borrower or Guarantor, ending on March, June, September and December of each
year.
"Fiscal Year" shall mean any of the annual accounting periods of Borrower
ending on December 31 of each year.
"Fixtures" shall mean any "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by Borrower or Guarantor.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect on the Closing Date, consistently applied.
"GE Capital Fee Letter" shall mean that certain letter, dated as of June
30, 1995, between GE Capital and Borrower with respect to certain fees to be
paid by Borrower to GE Capital.
"General Intangibles" shall mean any "general intangibles," as such term
is defined in the Code, now owned or hereafter acquired by Borrower or
Guarantor, and, in any event, including, without limitation, all right, title
and interest which
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Borrower or Guarantor may now or hereafter have in or under any Contract, all
customer lists, Copyrights, Trademarks, Patents, service marks, trade names,
business names, corporate names, trade styles, logos and other source or
business identifiers, and all applications therefor and reissues, extensions or
renewals thereof, rights in intellectual property, interests in partnerships,
joint ventures and other business associations, licenses, permits, copyrights,
trade secrets, proprietary or confidential information, inventions (whether or
not patented or patentable), technical information, procedures, designs,
knowledge, know-how, software, data bases, data, skill, expertise, experience,
processes, models, drawings, materials and records, goodwill (including the
goodwill associated with any Trademark, Trademark registration or Trademark
licensed under any Trademark license), all rights and claims in or under
insurance policies (including insurance for fire, damage, loss and casualty,
whether covering personal property, real property, tangible rights or intangible
rights, all liability, life, key man and business interruption insurance, and
all unearned premiums), uncertificated securities, choses in action, deposit,
checking and other bank accounts, rights to receive tax refunds and other
payments and rights of indemnification.
"Goods" shall mean all "goods" as such term is defined in the Code, now
owned or hereafter acquired by Borrower or Guarantor, wherever located.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, and any agency, department or other
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" shall mean, as to any Person, any obligation of
such Person guaranteeing any indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the "primary obligor") in any
manner, including any obligation or arrangement of such Person (i) to purchase
or repurchase any such primary obligation, (ii) to advance or supply funds (a)
for the purchase or payment of any such primary obligation or (b) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor, (iii) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (iv) to
indemnify the owner of such primary obligation against loss in respect thereof.
The amount of any Guaranteed Indebtedness at any time shall be deemed to be an
amount equal to the lesser at such time of (y) the stated or determinable amount
of the primary obligation in respect of which such Guaranteed Indebtedness is
made or (z) the maximum amount for which such Person may be liable pursuant to
the terms of the instrument
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embodying such Guaranteed Indebtedness; or, if not stated or determinable, the
maximum reasonably anticipated liability (assuming full performance) in respect
thereof.
"Guarantor" shall mean Xxxxx Machine Co., Inc., a Nevada corporation.
"Hazardous Material" shall mean any substance, material or waste, the
generation, handling, storage, treatment or disposal of which is regulated by or
forms the basis of liability now or hereafter under, any Government Authority in
any jurisdiction in which Borrower or Guarantor has owned, leased, or operated
real property or disposed of hazardous materials, or by any Federal government
authority, including, without limitation, any material or substance which is (i)
defined as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste" or "restricted hazardous waste" or other
similar term or phrase under any Environmental Laws, (ii) petroleum or any
fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's), any
radioactive substance, methane, volative hydrocarbons or any industrial solvent,
(iii) designated as a "hazardous substance" pursuant to Section 311 of the Clean
Water Act, 33 U.S.C. ss. 1251 et seq. (33 U.S.C. ss. 1321) or listed pursuant to
Section 307 of the Clean Water Act (33 U.S.C. ss. 1317), (iv) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S.C. ss. 6901, et seq. (42 U.S.C. ss. 6903), or (v) defined
as a "hazardous substance" pursuant to Section 1012 of the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss. 9601 et
seq. (42 U.S.C. ss. 9601).
"Indebtedness" of any Person shall mean (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property payment
for which is deferred six (6) months or more, but excluding obligations to trade
creditors incurred in the ordinary course of business that are not overdue by
more than six (6) months unless being contested in good faith, (ii)
reimbursement and all other obligations with respect to letters of credit,
bankers' acceptances and surety bonds, whether or not matured, (iii) all
obligations evidenced by notes, bonds, debentures or similar instruments, (iv)
all indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (v)
all Capital Lease Obligations, (vi) all obligations of such Person under
Interest Rate Agreements, Currency Agreements, commodity purchase or option
agreements or other interest or exchange rate or commodity price hedging
arrangements, (vii) all Indebtedness referred to in clause (i), (ii), (iii),
(iv), (v) or (vi) above secured by (or for which the holder of such
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Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (viii) the Obligations.
"Index Rate" shall mean, for any day, the published rate for the
thirty-day dealer placed commercial paper (sold through the dealers by major
corporations) which normally is published in the "Money Rates" section of The
Wall Street Journal for such day or, in the event such reports shall not so
appear, in such other nationally recognized publications as Agent may, from time
to time, specify to Borrower.
"Instruments" shall mean any "instrument," as such term is defined in the
Code, now owned or hereafter acquired by Borrower or Guarantor, wherever
located, and, in any event, including all certificated securities, all
certificates of deposit, and all notes and other, without limitation, evidences
of indebtedness, other than instruments that constitute, or are a part of a
group of writings that constitute, Chattel Paper.
"Intellectual Property Assignments" shall mean the Patent Security
Agreements, the Trademark Security Agreements and the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by Borrower.
"Interest Payment Date" means the first Business Day of each month;
provided, however, that each of (x) the date upon which both the Commitments
have been terminated and the Loans have been paid in full; and (y) the
Commitment Termination Date shall be deemed to be an "Interest Payment Date"
with respect to any interest which is then accrued hereunder.
"Interest Rate Agreement" shall mean any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
futures contract, interest rate option contract or other similar agreement or
arrangement to which Borrower is a party, designed to protect Borrower or any of
its Subsidiaries against fluctuations in interest rates.
"Inventory" shall mean any "inventory," as such term is defined in the
Code, now or hereafter owned or acquired by, Borrower or Guarantor, wherever
located, and, in any event, including inventory, merchandise, goods and other
personal property which are held by or on behalf of Borrower or Guarantor, for
sale or lease or are furnished or are to be furnished under a contract of
service or which constitute raw materials, work in process or materials used or
consumed or to be used or consumed in Borrower's or Guarantor's businesses or in
the processing, production, packaging, promotion, delivery or shipping of the
same, including other supplies.
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"Investments" shall have the meaning assigned to it in Section 6.2.
"IPO" shall mean substantial consummation of the initial public offering
of the Borrower's common stock under the Securities Act of 1933.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and any
successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor thereto.
"Leases" shall mean all leasehold estates in real property now owned or
hereafter acquired by Borrower or Guarantor, as lessee.
"Lender Addition Agreement" shall mean an agreement in form and substance
satisfactory to, and acknowledged by, Agent whereby a portion of any of the
Commitments of any Lender is assigned to another Lender after the Closing Date.
"Lenders" shall mean GE Capital, the other Lenders named on the signature
page of the Agreement, and, if any such Lender shall decide to assign all or any
portion of the Obligations, such term shall include such assignee.
"Letter of Credit Obligations" shall mean all outstanding obligations
incurred by Agent and Lenders at the request of Borrower, whether direct or
indirect, contingent or otherwise, due or not due, in connection with the
issuance or guaranty, by Agent or another Lender, of Letters of Credit. The
amount of such Letter of Credit Obligations shall equal the maximum amount which
may be payable by Agent or another Lender thereupon or pursuant thereto.
"Letters of Credit" shall mean commercial or standby letters of credit
issued at the request and for the account of Borrower, and bankers' acceptances
issued by Borrower, for which Agent or another Lender has incurred Letter of
Credit Obligations pursuant thereto.
"L/C Issuer" shall have the meaning assigned to such term in Schedule B.
"License" shall mean any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by Borrower or Guarantor.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of
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any kind or nature whatsoever (including any lease or title retention agreement,
any financing lease having substantially the same economic effect as any of the
foregoing, and the filing of, or agreement to give, any financing statement
perfecting a security interest under the Code or comparable law of any
jurisdiction).
"Loan Account" shall have the meaning assigned to it in Section 1.12.
"Loan Documents" shall mean the Agreement, the Revolving Credit Notes,
Term Notes, the Security Agreement, the Mortgages, the other Collateral
Documents and all other agreements, instruments, documents and certificates
identified in the Schedule of Documents in favor of Agent and/or Lenders and
including (without limitation) all other pledges, powers of attorney, consents,
assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of Borrower or any of its
Affiliates, or any employee of Borrower, or any of its Affiliates, and delivered
to Agent or any Lender in connection with the Agreement or the transactions
contemplated hereby.
"Loans" shall mean the Revolving Credit Loan and the Term Loan.
"Lock Box Account" shall have the meaning assigned to it on Schedule E.
"Material Adverse Effect" shall mean a material adverse effect on (i) the
business, assets, operations, prospects or financial or other condition of
Borrower or Guarantor, (ii) Borrower's or Guarantor's ability to pay the
Revolving Credit Loan or any of the other Obligations in accordance with the
terms thereof, (iii) the Collateral or Agent's Liens, on behalf of itself and
Lenders, on the Collateral or the priority of any such Lien, or (iv) Agent's or
any Lender's rights and remedies under the Agreement and the other Loan
Documents.
"Maximum Lawful Rate" shall have the meaning assigned to it in Section
1.5(f).
"Maximum Revolving Credit Loan" shall mean, at any particular time, an
amount equal to the Revolving Credit Loan Commitment of all Lenders less the
then outstanding amount of the Letter of Credit Obligations.
"Mortgaged Properties" shall have the meaning assigned to it in Section
2.1(l).
"Mortgages" shall mean each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents
-14-
delivered by Borrower or Guarantor to Agent, with respect to the Mortgaged
Properties, all in form and substance satisfactory to Agent.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which Borrower or any ERISA Affiliate is
making, is obligated to make, has made or been obligated to make, contributions
on behalf of participants who are or were employed by any of them.
"Non-use Fee" shall have the meaning assigned to it in Section 1.8(b).
"Notes" shall mean the Revolving Credit Notes and the Term Notes,
collectively.
"Notice of Revolving Credit Advance" shall have the meaning assigned to
it in Section 1.1.
"Obligations" shall mean all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or amounts are liquidated or determinable) owing by Borrower or
Guarantor to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents. This term includes all principal, interest (including,
without limitation, all interest which accrues after the commencement of any
case or proceeds in bankruptcy after the insolvency of, or for the
reorganization of, Borrower or Guarantor, whether or not allowed in such
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to Borrower or Guarantor under the Agreement or any of the other Loan
Documents.
"Other Taxes" shall have the meaning assigned to it in Section 1.15.
"Patent License" shall mean any and all rights under any written
agreement now owned or hereafter acquired by Borrower or Guarantor granting any
right with respect to any invention on which a Patent is in existence.
"Patent Security Agreement" shall mean the Patent Security Agreement made
in favor of Agent, on behalf of itself and Lenders, by Borrower.
"Patents" shall mean all of the following in which Borrower or Guarantor
now holds or hereafter acquires any interest: (i) all letters patent of the
United States or any other country, all registrations and recordings thereof,
and all applications for letters patent of the United States or any other
country,
-15-
including, without limitation, registrations, recordings and applications in the
United States Patent and Trademark Office or in any similar office or agency of
the United States, any state or territory thereof, or any other country, and
(ii) all reissues, continuations, continuations-in-part or extensions thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Pension Plan" shall mean an employee pension benefit plan, as defined in
Section 3 (2) of ERISA (other than a Multiemployer Plan), which is not an
individual account plan, as defined in Section 3 (34) of ERISA, and which either
Borrower, if a Title IV Plan, any ERISA Affiliate maintains, contributes to or
has an obligation to contribute to on behalf of participants who are or were
employed by any of them.
"Permitted Encumbrances" shall mean the following encumbrances: (i) Liens
for taxes or assessments or other governmental Charges or levies, not yet due
and payable; (ii) pledges or deposits securing obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (iii) pledges or deposits securing bids, tenders,
contracts (other than contracts for the payment of money) or leases to which
Borrower or Guarantor is a party as lessee made in the ordinary course of
business; (iv) deposits securing statutory obligations of Borrower or Guarantor;
(v) inchoate and unperfected workers', mechanics', suppliers' or similar liens
arising in the ordinary course of business; (vi) carriers', warehousemen's or
other similar possessory liens arising in the ordinary course of business and
securing liabilities in an outstanding aggregate amount not in excess of $25,000
at any time; (vii) deposits securing, or in lieu of, surety, appeal or customs
bonds in proceedings to which Borrower or Guarantor is a party; (viii) any
attachment or judgment lien, unless the judgment it secures shall not, within 30
days after the entry thereof, have been discharged or execution thereof stayed
pending appeal, or shall not have been discharged within 30 days after the
expiration of any such stay; and (ix) zoning restrictions, easements, licenses,
or other restrictions on the use of real property or other minor irregularities
in title (including leasehold title) thereto, so long as the same do not
materially impair the use, value, or marketability of such real property, lease
or leasehold estate.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).
-16-
"Plan" shall mean, with respect to Borrower or any ERISA Affiliate, at
any time, an employee benefit plan, as defined in Section 3(3) of ERISA, which
Borrower or ERISA affiliate maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any of them.
"Proceeds" shall mean "proceeds," as such term is defined in the Code
and, in any event, shall include (i) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to Borrower or Guarantor from time to
time with respect to any of the Collateral, (ii) any and all payments (in any
form whatsoever) made or due and payable to Borrower or Guarantor from time to
time in connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any governmental body,
authority, bureau or agency (or any person acting under color of governmental
authority), (iii) any claim of Borrower or Guarantor against third parties (a)
for past, present or future infringement of any Patent or Patent License, (b)
for past, present or future infringement or dilution of any Copyright or
Copyright License or (c) for past, present or future infringement or dilution of
any Trademark or Trademark License or for injury to the goodwill associated with
any Trademark, Trademark registration or Trademark licensed under any Trademark
License, (iv) any recoveries by Borrower against third parties with respect to
any litigation or dispute concerning any of the Collateral, and (v) any and all
other amounts from time to time paid or payable under or in connection with any
of the Collateral, upon disposition or otherwise.
"Pro Rata Share" shall mean with respect to all matters relating to any
Lender (a) with respect to the Revolving Credit Loan, the percentage obtained by
dividing (i) the Revolving Credit Loan Commitment of that Lender by (ii) the
aggregate Revolving Credit Loan Commitments of all Lenders, and, (b) with
respect to the Term Loan, the percentage obtained by dividing (i) the Term Loan
Commitment of that Lender by (ii) the aggregate Term Loan Commitments of all
Lenders, as all such percentages may be adjusted by assignments permitted
pursuant to Section 9.1.
"Qualified Plan" shall mean an employee pension benefit plan, as defined
in Section 3(2) of ERISA, which is intended to be tax-qualified under Section
401(a) of the IRC, and which Borrower, Guarantor or any ERISA Affiliate
maintains, contributes to or has an obligation to contribute to on behalf of
participants who are or were employed by any of them.
"Raw Materials" shall mean raw materials included in Borrower's or
Guarantor's Inventory in accordance with GAAP.
"Real Estate" shall have the meaning assigned to it in Section 3.7.
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"Release" shall mean, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials in the indoor or outdoor
environment by such Person, including the movement of Hazardous Materials
through or in the air, soil, surface water, ground water or property.
"Reportable Event" shall mean any of the events described in Section
4043(c) (1), (2), (3), (5), (6), (8) or (9) through (12) of ERISA.
"Requisite Lenders" shall mean (a) Lenders having more than sixty-six and
two-thirds percent (66 2/3%) of the Commitments of all Lenders, or (b) if the
Commitments have been terminated, more than sixty-six and two-thirds percent (66
2/3%) of the aggregate outstanding amount of the outstanding Loans and Letter of
Credit Obligations.
"Restatement Date" shall mean February __, 1998, or such later date as
the Borrower and Agent may mutually agree.
"Restricted Payment" shall mean (i) the declaration or payment of any
dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of a Person's Stock,
(ii) any payment on account of the purchase, redemption, defeasance or other
retirement of a Person's Stock or any other payment or distribution made in
respect thereof, either directly or indirectly, or (iii) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder of
such Person.
"Retiree Welfare Plan" shall refer to any Welfare Plan providing for
continuing coverage or benefits for any participant or any beneficiary of a
participant after such participant's termination of employment, other than
continuation coverage provided pursuant to Section 4980B of the IRC and at the
sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" shall have the meaning assigned to it in
Section 1.1(a).
"Revolving Credit Loan" shall mean as the context may require, the
aggregate amount of Revolving Credit Advances outstanding at any time to
Borrower.
"Revolving Credit Loan Commitment" shall mean (a) as to any Lender, the
aggregate commitment of such Lender to make Revolving Credit Advances as set
forth in the signature page to the Agreement or in the most recent Lender
Addition Agreement executed by such Lender and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Revolving Credit Advances, which
aggregate
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commitment shall be Forty-Five Million Dollars ($45,000,000) as of the
Restatement Date, as such amount may be further adjusted, if at all, from time
to time in accordance with the Agreement.
"Revolving Credit Note" shall have the meaning assigned to it in Section
1.1(b) and shall be substantially in the form of Exhibit C.
"Schedule of Documents" shall mean the schedule, including all
appendices, exhibits or schedules thereto, listing certain documents and
information to be delivered in connection with the Agreement, the other Loan
Documents and the transactions contemplated thereunder, substantially in the
form attached hereto as Schedule F.
"Security Agreement" shall mean the Security Agreement dated as of June
30, 1995, entered into among Agent, on behalf of itself and Lenders, Borrower
and Guarantor, including all amendments, restatements, modifications and
supplements thereto, and shall refer to the Security Agreement as the same may
be in effect at the time such reference becomes operative.
"Senior Subordinated Notes" shall mean the Borrower's senior subordinated
notes outstanding on the Closing Date, together with all documents, instruments
or agreements evidencing, governing or securing such notes, but not any
increases thereof or refundings thereof, or amendments or modifications thereto,
not consented to by Agent in writing.
"Solvent" shall mean, with respect to any Person, that (i) the fair
salable value of its assets exceeds the fair present value of its liabilities
(including, without limitation, all contingent or disputed liabilities to that
extent that, in accordance with GAAP, such liabilities should be reflected on or
otherwise noted in connection with Borrower's balance sheet prepared in
accordance with GAAP); (ii) such Person is able to pay its debts when due; and
(iii) such Person has capital sufficient to carry on its current business and
all businesses in which it is about to engage.
"Stock" shall mean all shares, options, warrants, general or limited
partnership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership or equivalent entity whether voting or nonvoting,
including common stock, preferred stock or any other "equity security" (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended).
"Subsidiary" shall mean, with respect to any Person, (i) any corporation
of which an aggregate of more than fifty percent (50%) of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation
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(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person and/or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise and (ii) any partnership,
limited liability company, joint venture or other similar entity in which such
Person and/or one or more Subsidiaries of such Person shall have an interest
(whether in the form of voting or participation in profits or capital
contribution) of more than fifty percent (50%) or of which any such Person is a
general partner, managing member or may exercise the powers of a general partner
or managing member.
"Taxes" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or any political subdivision
thereof.
"Termination Date" shall mean the date on which the Revolving Credit Loan
and Term Loan have been indefeasibly repaid in full and all other Obligations
under the Agreement and the other Loan Documents have been completely discharged
and Borrower shall not have any further right to borrow any monies thereunder.
"Term Loan" shall mean have the meaning assigned to it in Section 1.1(b).
"Term Loan Commitment" shall mean (a) as to any Lender with a Term Loan
Commitment, the aggregate commitment of such Lender to make the Term Loan as set
forth on the signature page to the Agreement or in the most recent Lender
Addition Agreement executed by such Lender and (b) as to all Lenders with a Term
Loan Commitment, the aggregate commitment of all Lenders to make the Term Loan,
which aggregate commitment shall be Eight Million Dollars ($8,000,000) on the
Closing Date.
"Term Note" shall have the meaning assigned to it in Section 1.2(a) and
shall be substantially in the form of Exhibit D.
"Title IV Plan" shall mean a Pension Plan, other than a Multiemployer
Plan, which is covered by Title IV of ERISA.
"Trademark Security Agreements" shall mean the Trademark Security
Agreements made in favor of Agent, on behalf of Lenders, by Borrower, as amended
or modified from time to time.
"Trademark License" shall mean any and all rights now owned or hereafter
acquired by Borrower or Guarantor under any
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written agreement granting any right to use any Trademark or Trademark
registration.
"Trademarks" shall mean any and all of the following now owned or
hereafter acquired by Borrower or Guarantor: (i) all trademarks, trade names,
corporate names, business names, trade styles, service marks, logos, other
source or business identifiers, prints and labels on which any of the foregoing
have appeared or appear, designs and general intangibles of like nature (whether
registered or unregistered), now owned or existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (ii) all
reissues, extensions or renewals thereof.
"Unfunded Pension Liability" shall mean, at any time, the aggregate
amount, if any, of the sum of (i) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions in effect under such Title IV
Plan, and (ii) for a period of five (5) years following a transaction reasonably
likely to be covered by Section 4069 of ERISA, the liabilities (whether or not
accrued) that could be avoided by Borrower, Guarantor or any ERISA Affiliate as
a result of such transaction.
"Voting Stock" shall mean any Stock of Borrower or Guarantor entitled to
vote for the election of directors thereof.
"Welfare Plans" shall mean any welfare plan, as defined in Section 3(1)
of ERISA, which is maintained or contributed to by Borrower or any ERISA
Affiliate.
"Withdrawal Liability" shall mean, at any time, the aggregate amount of
the liabilities, if any, pursuant to Section 4201 of ERISA, and any increase in
contributions pursuant to Section 4243 of ERISA with respect to all
Multiemployer Plans.
"Work-In-Process" shall mean work-in-process included in Borrower's or
Guarantor's Inventory as determined in accordance with GAAP.
Any accounting term used in the Agreement shall have, unless otherwise
specifically provided herein, the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be
computed, unless otherwise specifically provided herein, in accordance with GAAP
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consistently applied. That certain items or computations are explicitly modified
by the phrase "in accordance with GAAP" shall in no way be construed to limit
the foregoing. In the event that any "Accounting Changes" (as defined below)
occur and such changes result in a change in the calculation of the financial
covenants, standards or terms used in the Agreement or any other Loan Document,
then Borrower, Agent and Lenders agree to enter into negotiations in order to
amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating the
Borrower's and its Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (a) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), and (b)
changes in accounting principles concurred in by Borrower's certified public
accountants. In the event, if any, that Agent, Borrower and Requisite Lenders
shall have agreed upon the required amendments, then after such agreement has
been evidenced in writing and the underlying Accounting Change with respect
thereto has been implemented, any reference to GAAP contained in the Agreement
or in any other Loan Document shall, only to the extent of such Accounting
Change, refer to GAAP, consistently applied after giving effect to the
implementation of such Accounting Change. If Agent, Borrower and Requisite
Lenders cannot agree upon the required amendments within thirty (30) days
following the date of implementation of any Accounting Change, then all
financial statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change.
All other undefined terms contained in the Agreement or any of the other
Loan Documents shall, unless the context indicates otherwise, have the meanings
provided for by the Code as in effect in the State of Illinois to the extent the
same are used or defined therein. The words "herein," "hereof" and "hereunder"
and other words of similar import refer to the Agreement as a whole, including
the Exhibits and Schedules hereto, as the same may from time to time be amended,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include"
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shall be deemed to be followed by the words "without limitation"; references to
Persons include their respective successors and assigns (to the extent and only
to the extent permitted by the Loan Documents) or, in the case of governmental
Persons, Persons succeeding to the relevant functions of such Persons; and all
references to statutes and related regulations shall include any amendments of
the same and any successor statutes and regulations.
-23-
AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDMENT NO. 1 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is entered into as of this 1st day of April, 1998 by and among
XXXXXX CO., INC., a Wisconsin corporation ("Borrower"), XXXXX MACHINE CO., INC.,
a Nevada corporation and a wholly-owned subsidiary of Borrower ("Guarantor"),
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation (in its individual
capacity, "GE Capital"), for itself as Lender and as Agent for Lenders, and the
other Lenders signatory hereto. Unless otherwise specified herein, capitalized
terms used in this Amendment shall have the meanings ascribed to them by the
Credit Agreement (as hereinafter defined).
RECITALS
WHEREAS, Borrower, Agent and Lenders have entered into that certain
Amended and Restated Credit Agreement dated as of March 9, 1998 (as amended,
supplemented, restated or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, the parties hereto wish to enter into this Amendment to change
the definition of "Applicable Margin."
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Amendments to the Credit Agreement.
(a) The definition of "Applicable Margin" in Schedule A to the Credit
Agreement is hereby amended and restated in its entirety as follows:
""Applicable Margin" shall mean, for Index Rate Loans, until
receipt by Agent of audited Financial Statements for the Fiscal Year
ending December 31, 1998, one and one-half percent (1.5%), and thereafter
a percentage in effect for the then applicable Margin Period equal to the
percentage shown below opposite the ratio of (i) the average Funded Debt
for the twelve (12) full consecutive calendar months ending with the most
recent Fiscal Quarter prior to such Margin Period for which Borrower has
delivered its monthly financial statements to Agent pursuant to clause
(a) of Schedule G ("Calculation Period") to (ii) Borrower's EBITDA for
such Calculation Period:
Ratio of Funded Debt Applicable Margin for
to EBITDA for the Index Rate Loans for the
Calculation Period Related Margin Period
------------------------ ------------------------
Greater than 2.5 2.00%
Greater or equal to 2.0 1.75%
but less than 2.5
Greater or equal to 1.5 1.50%
but less than 2.0
Greater or equal to 1.0 1.25%
but less than 1.5
Less than 1.0 1.00%
As used in this definition: "Margin Period" shall mean, on any date of
determination, the period (i) commencing five (5) days after the delivery
of its quarterly financial statements by the Borrower to the Agent as
required by clause (a) of Schedule G for its most recent Fiscal Quarter,
and (ii) ending four (4) days after the delivery of such quarterly
financial statements for the next succeeding Fiscal Quarter."
(b) Schedule A to the Credit Agreement is amended by inserting the
following definition in appropriate alphabetical order:
""Funded Debt" shall mean, with respect to Borrower and its
Subsidiaries, on a consolidated and consolidating basis, all of its
Indebtedness which by the terms of the agreement governing or instrument
evidencing such Indebtedness matures more than one year from, or is
directly or indirectly renewable or extendable at its option under a
revolving credit or similar agreement obligating the lender or lenders to
extend credit over a period of more than one year from, the date of
creation thereof, including current maturities of long-term debt,
revolving credit, and short-term debt extendable beyond one year at the
option of the debtor, and shall include the Obligations."
SECTION 2. Ratification and Confirmation. The Guarantor hereby confirms
that, after giving effect to this Amendment, it is a party to the Credit
Agreement and further agrees to be bound by the terms of the Credit Agreement
and each Loan Document to which it is a party.
SECTION 3. Representations and Warranties of Borrower. Borrower
represents and warrants that:
(a) The execution, delivery and performance by Borrower of this
Amendment have been duly authorized by all necessary corporate action and
that this Amendment is a legal, valid and binding obligation of Borrower
enforceable against Borrower in accordance with its terms, except as the
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforcement is sought in a proceeding
in equity or at law);
(b) After giving effect to this Amendment, each of the
representations and warranties contained in the Credit Agreement is true
and correct in all material respects on and as of the date hereof as if
made on the date hereof with respect to Borrower and its Subsidiaries;
(c) Neither the execution, delivery and performance of this
Amendment nor the consummation of the transactions contemplated hereby
does or shall contravene, result in a breach of, or violate (i) any
provision of Borrower's certificate or articles of incorporation or
bylaws, (ii) any law or regulation, or any order or decree of any court
or government instrumentality or (iii) indenture, mortgage, deed of
trust, lease, agreement or other instrument to which Borrower is a party
or by which Borrower or any of its property is bound, except in any such
case to the extent such conflict or breach has been waived by a written
waiver document a copy of which has been delivered to Agent on or before
the date hereof;
(d) After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing.
SECTION 4. Representations and Warranties of Guarantor. Guarantor
represents and warrants that:
(a) The execution, delivery and performance by Guarantor of this
Amendment have been duly authorized by all necessary corporate action and
that this Amendment is a legal, valid and binding obligation of Guarantor
enforceable against Guarantor in accordance with its terms, except as the
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforcement is sought in a proceeding
in equity or at law);
(b) After giving effect to this Amendment, each of the
representations and warranties contained in the Credit Agreement is true
and correct in all material respects on and as of the date hereof as if
made on the date hereof with respect to Guarantor;
(c) Neither the execution, delivery and performance of this
Amendment nor the consummation of the
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transactions contemplated hereby does or shall contravene, result in a
breach of, or violate (i) any provision of Guarantor's certificate or
articles of incorporation or bylaws, (ii) any law or regulation, or any
order or decree of any court or government instrumentality or (iii)
indenture, mortgage, deed of trust, lease, agreement or other instrument
to which Guarantor is a party or by which Guarantor or any of its
property is bound, except in any such case to the extent such conflict or
breach has been waived by a written waiver document a copy of which has
been delivered to Agent on or before the date hereof;
(d) After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing.
SECTION 5. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically amended above, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
(b) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Agent or any Lender under
the Credit Agreement or any Loan Document, nor constitute a waiver of any
provision of the Credit Agreement or any Loan Document, except as specifically
set forth herein. Upon the effectiveness of this Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of similar import shall mean and be a reference to the Credit Agreement as
amended hereby.
SECTION 6. Costs and Expenses. As provided in Section 11.3 of the Credit
Agreement, Borrower and Guarantor each agree to reimburse Agent upon demand for
all costs and expenses, including the fees, costs and expenses of counsel or
other advisors for advice, assistance, or other representation in connection
with this Amendment.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS.
SECTION 8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.
SECTION 9. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so
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executed shall be deemed an original but all such counterparts shall constitute
one and the same instrument.
SECTION 10. Effectiveness. This Amendment shall become effective upon:
(a) the receipt of executed original signature pages to this Amendment by
Lenders, Borrower and Guarantor;
(b) receipt of an executed original certificate from the Secretary of
each of Borrower and Guarantor, certifying as to (i) resolutions of the Board of
Directors of such entity duly authorizing the execution, delivery and
effectiveness of this Amendment and all other instruments and documents to be
delivered by such entity; and (ii) incumbency of qualified officers of such
entity;
(c) receipt of an executed original certificate from an authorized
officer of each of Borrower and Guarantor, certifying that no Default or Event
of Default has occurred and is continuing; and
(d) reimbursement of Agent's costs and expenses as provided in Section 6
hereof.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date and year first above written.
XXXXXX CO., INC.
By:
Title:
XXXXX MACHINE CO., INC.
By:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Agent
for the Lenders
By:
Title:
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AMENDMENT NO. 2 TO AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDMENT NO. 2 TO AMENDED AND RESTATED CREDIT AGREEMENT (this
"Amendment") is entered into as of this 1st day of September, 1998 by and among
XXXXXX CO., INC., a Wisconsin corporation ("Borrower"), XXXXX MACHINE CO., INC.,
a Nevada corporation and a wholly-owned subsidiary of Borrower ("Guarantor"),
GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation (in its individual
capacity, "GE Capital"), for itself as Lender and as Agent for Lenders, and the
other Lenders signatory hereto. Unless otherwise specified herein, capitalized
terms used in this Amendment shall have the meanings ascribed to them by the
Credit Agreement (as hereinafter defined).
RECITALS
WHEREAS, Borrower, Agent and Lenders have entered into that certain
Amended and Restated Credit Agreement dated as of March 9, 1998 (as amended,
supplemented, restated or otherwise modified from time to time, the "Credit
Agreement");
WHEREAS, Borrower wishes to repurchase up to one million shares of its
common Stock; and
WHEREAS, the parties hereto wish to enter into this Amendment to allow
the Borrower to consummate such repurchase under certain conditions.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Amendment to the Credit Agreement. Section 6.14 of the Credit
Agreement is hereby amended and restated in its entirety as follows:
"6.14 Restricted Payments. Borrower shall not make any Restricted
Payment; provided that on or before September 1, 1999, so long as no
Default or Event of Default shall have occurred and be continuing,
Borrower may repurchase up to one million shares in the aggregate of
Borrower's common Stock from its own funds and not from Loans under the
Credit Agreement."
SECTION 2. Ratification and Confirmation. The Guarantor hereby
confirms that, after giving effect to this Amendment, it is a party to
the Credit Agreement and further agrees
to be bound by the terms of the Credit Agreement and each Loan Document to which
it is a party.
SECTION 3. Representations and Warranties of Borrower. Borrower
represents and warrants that:
(a) The execution, delivery and performance by Borrower of this
Amendment have been duly authorized by all necessary corporate action and
that this Amendment is a legal, valid and binding obligation of Borrower
enforceable against Borrower in accordance with its terms, except as the
enforcement thereof may be subject to (i) the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or similar law
affecting creditors' rights generally and (ii) general principles of
equity (regardless of whether such enforcement is sought in a proceeding
in equity or at law);
(b) After giving effect to this Amendment, each of the
representations and warranties contained in the Credit Agreement is true
and correct in all material respects on and as of the date hereof as if
made on the date hereof with respect to Borrower and its Subsidiaries;
(c) Neither the execution, delivery and performance of this
Amendment nor the consummation of the transactions contemplated hereby
does or shall contravene, result in a breach of, or violate (i) any
provision of Borrower's certificate or articles of incorporation or
bylaws, (ii) any law or regulation, or any order or decree of any court
or government instrumentality or (iii) indenture, mortgage, deed of
trust, lease, agreement or other instrument to which Borrower is a party
or by which Borrower or any of its property is bound, except in any such
case to the extent such conflict or breach has been waived by a written
waiver document a copy of which has been delivered to Agent on or before
the date hereof;
(d) After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing.
SECTION 4. Representations and Warranties of Guarantor. Guarantor
represents and warrants that:
(a) The execution, delivery and performance by Guarantor of this
Amendment have been duly authorized by all necessary corporate action and that
this Amendment is a legal, valid and binding obligation of Guarantor enforceable
against Guarantor in accordance with its terms, except as the enforcement
thereof may be subject to (i) the effect of any applicable bankruptcy,
insolvency, reorganization, moratorium or similar law affecting creditors'
rights generally and (ii) general principles of equity (regardless of whether
such enforcement is sought in a proceeding in equity or at law);
(b) After giving effect to this Amendment, each of the
representations and warranties contained in the Credit Agreement is true
and correct in all material respects on and as of the date hereof as if
made on the date hereof with respect to Guarantor;
(c) Neither the execution, delivery and performance of this
Amendment nor the consummation of the transactions contemplated hereby
does or shall contravene, result in a breach of, or violate (i) any
provision of Guarantor's certificate or articles of incorporation or
bylaws, (ii) any law or regulation, or any order or decree of any court
or government instrumentality or (iii) indenture, mortgage, deed of
trust, lease, agreement or other instrument to which Guarantor is a party
or by which Guarantor or any of its property is bound, except in any such
case to the extent such conflict or breach has been waived by a written
waiver document a copy of which has been delivered to Agent on or before
the date hereof;
(d) After giving effect to this Amendment, no Default or Event of
Default has occurred and is continuing.
SECTION 5. Reference to and Effect Upon the Credit Agreement.
(a) Except as specifically amended above, the Credit Agreement and the
other Loan Documents shall remain in full force and effect and are hereby
ratified and confirmed.
(b) The execution, delivery and effectiveness of this Amendment shall not
operate as a waiver of any right, power or remedy of Agent or any Lender under
the Credit Agreement or any Loan Document, nor constitute a waiver of any
provision of the Credit Agreement or any Loan Document, except as specifically
set forth herein. Upon the effectiveness of this Amendment, each reference in
the Credit Agreement to "this Agreement", "hereunder", "hereof", "herein" or
words of similar import shall mean and be a reference to the Credit Agreement as
amended hereby.
SECTION 6. Costs and Expenses. As provided in Section 11.3 of the Credit
Agreement, Borrower and Guarantor each agree to reimburse Agent upon demand for
all costs and expenses, including the fees, costs and expenses of counsel or
other advisors for advice, assistance, or other representation in connection
with this Amendment.
SECTION 7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO CONFLICTS OF LAWS
PROVISIONS) OF THE STATE OF ILLINOIS.
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SECTION 8. Headings. Section headings in this Amendment are included
herein for convenience of reference only and shall not constitute a part of this
Amendment for any other purposes.
SECTION 9. Counterparts. This Amendment may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
such counterparts shall constitute one and the same instrument.
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SECTION 10. Effectiveness. This Amendment shall become effective upon:
(a) the receipt of executed original signature pages to this Amendment by
Lenders, Borrower and Guarantor;
(b) receipt of an executed original certificate from the Secretary of
each of Borrower and Guarantor, certifying as to (i) resolutions of the Board of
Directors of such entity duly authorizing the execution, delivery and
effectiveness of this Amendment and all other instruments and documents to be
delivered by such entity; and (ii) incumbency of qualified officers of such
entity;
(c) receipt of an executed original certificate from an authorized
officer of each of Borrower and Guarantor, certifying that no Default or Event
of Default has occurred and is continuing; and
(d) reimbursement of Agent's costs and expenses as provided in Section 6
hereof.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date and year first above written.
XXXXXX CO., INC.
By:
Title:
XXXXX MACHINE CO., INC.
By:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Agent
for the Lenders
By:
Title:
