AMENDED AND RESTATED
CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is dated as of June 16, 1999
and is made by and among STANDARD AUTOMOTIVE CORPORATION, a Delaware corporation
(the "Borrower"), each of the GUARANTORS (as hereinafter defined), the BANKS (as
hereinafter defined) and PNC BANK, NATIONAL ASSOCIATION, in its capacity as
agent for the Banks under this Agreement (hereinafter referred to in such
capacity as the "Agent"). Unless otherwise defined herein, all capitalized terms
used herein and defined in Section 1 are used herein as so defined.
WITNESSETH:
WHEREAS, the Borrower has requested the Banks to:
(a) amend and restate the terms of the Credit Agreement, dated as of
July 21, 1998 (the "Existing Credit Agreement"), among the Borrower, the
guarantors party thereto, the banks party thereto (the "Existing Banks") and PNC
Bank, as agent thereunder, on the terms and provisions set forth herein;
(b) continue Term Loans (as defined in the Existing Credit
Agreement) outstanding under the Existing Credit Agreement hereunder and to
continue the Existing Banks' commitments to make such Term Loans under the
Existing Credit Agreement as Term Loan Commitments hereunder;
(c) cause ING (U.S.) Capital LLC to make an additional $25,000,000
term loan hereunder;
(d) continue Revolving Credit Loans (as defined in the Existing
Credit Agreement) outstanding under the Existing Credit Agreement hereunder and
to continue the Existing Banks' commitments to make such Revolving Loans under
the Existing Credit Agreement as Revolving Credit Commitments hereunder; and
(e) to increase by $5,000,000 the Existing Banks' commitments to
make Revolving Loans (as defined in the Existing Credit Agreement) under the
Existing Credit Agreement as Revolving Credit Commitments hereunder;
WHEREAS, the Banks are willing on the terms and subject to the
conditions hereinafter set forth, to:
(a) amend, restate, consolidate, evidence and substitute for, but
not be a prepayment, satisfaction or cancellation of, the terms and conditions
of the Existing Credit Agreement as set forth herein;
(b) to continue such loans and such commitments hereunder as Loans
and Commitments;
(c) make such additional loans; and
(d) increase such revolving credit commitment hereunder as Revolving
Credit Commitments;
WHEREAS, the Borrower, Critical Components Corp., a Delaware corporation
("CCC"), Ranor, Inc., a Delaware corporation ("Ranor" or the "Purchaser", as the
case may be, and collectively with the Borrower and CCC, the "Purchasers"),
Ranor, Inc., a Massachusetts corporation (the "Company"), Xxxxxx Xxxxxxxxx,
Xxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx and Xxxxx Xxxxxxxxx (the "Shareholders") and
Five N Leasing Company, a Massachusetts general partnership ("Five N" and
collectively with the Company and the Shareholders, the "Sellers") have entered
into an Asset Purchase Agreement, dated as of April 16, 1999 (including the
annexes, exhibits and schedules thereto, as the same may be supplemented or
amended from time to time, the "Ranor Purchase Agreement"), pursuant to which
the Purchaser will purchase from the Sellers and the Sellers will sell to the
Purchaser, substantially all the assets used in the Business (as such term is
defined in the Ranor Purchase Agreement) on the terms and conditions set forth
in the Ranor Purchase Agreement (the asset acquisition described in this recital
is the "Acquisition");
WHEREAS, consideration for the Acquisition shall consist of (a) the
payment by the Purchasers of cash equal to (1) $21,200,000 plus (ii) the
Addition Adjustment (as such term is defined in the Ranor Purchase Agreement),
minus (iii) the adjustments set forth in Section 3.3 of the Ranor Purchase
Agreement minus (iv) any Deposit (as such term is defined in the Ranor Purchase
Agreement) which is applied against the Purchase Price (as such term is defined
in the Ranor Purchase Agreement), and (b) the delivery by the Purchaser to the
Company of four Notes (as such term is defined in the Ranor Purchase Agreement),
in the aggregate principal amount of $5,300,000, subject to reduction or
increase in accordance with Section 3.3 of the Ranor Purchase Agreement and (c)
the delivery by the Purchaser to the Company of any Additional Notes (as such
term is defined in the Ranor Purchase Agreement) provided for in Section 7.8 of
the Ranor Purchase Agreement. Simultaneously with the Acquisition, the Purchaser
shall enter into an employment agreement with each of the Shareholders, in the
form attached as Appendix 3.2(b) to the Ranor Purchase Agreement;
WHEREAS, CCC, its shareholders and Borrower have entered into a stock
purchase agreement dated as of April 1, 1999 (including the annexes, exhibits
and schedules thereto, as the same may be supplemented, amended or clarified
from time to time, the "CCC/Borrower Stock Purchase Agreement"), pursuant to
which Borrower will acquire 100% of CCC's capital stock on the terms and
conditions set forth in the CCC/Borrower Stock Purchase Agreement. Consideration
for CCC's capital stock shall consist of up to 300,000 shares of Borrower's
common stock. Further, Borrower shall pay financial advisors to CCC a cash fee
equal to 3% of the purchase price of companies under letter of intent or under
contract with CCC when each are closed and as provided for under the
CCC/Borrower Stock Purchase Agreement.
WHEREAS, the Borrower shall use a portion of the credit facilities
provided for herein to make a capital contribution to CCC (the "CCC Capital
Contribution") on the Closing Date, which
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CCC shall use to make a capital contribution to Ranor (the "Ranor Capital
Contribution) on the Closing Date to be used by the Purchaser to finance the
Acquisition;
WHEREAS, CCC Capital Contribution, the Ranor Capital Contribution and the
Acquisition are sometimes collectively referred to herein as the "Transaction";
WHEREAS, the Borrower will pledge all of the capital stock of CCC and CCC
will pledge all of the capital stock of the Purchaser to secure the payment and
performance of the Borrower's obligations hereunder;
WHEREAS, CCC will execute a Subsidiary Guarantee, secured by a pledge of
all of the capital stock of the Purchaser, guaranteeing the Borrower's
obligations hereunder;
WHEREAS, the Purchaser will execute a Subsidiary Guarantee, secured by a
security interest in and lien on all assets of the Purchaser, guaranteeing the
Borrower's obligations hereunder; and
WHEREAS, the Banks are willing to make available the credit facilities
provided for herein.
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree to amend and restate the Existing Credit Agreement as
follows:
1. CERTAIN DEFINITIONS
1.1 Certain Definitions.
In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:
Account shall mean any account, contract right, general
intangible, chattel paper, instrument or document representing any right to
payment for goods sold or services rendered, whether or not earned by
performance and whether or not evidenced by a contract, instrument or document,
which is now owned or hereafter acquired by any Loan Party.
Account Debtor shall mean any person which is or which may
become obligated to any Loan Party under, with respect to, or on account of, an
Account.
Acquisition means the consummation of the transactions
contemplated to be performed in connection with the Ranor Purchase Agreement.
Acquisition Date means the date of consummation of the
Acquisition.
Acquisition Documents means, with respect to the Acquisition,
the asset purchase agreement or similar agreement regarding such Acquisition and
all other agreements,
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instruments and documents delivered in connection with the consummation thereof
(including, without limitation, any equity financing documents related thereto).
Affiliate as to any Person shall mean any other Person (i)
which directly or indirectly controls, is controlled by, or is under common
control with such Person, (ii) which beneficially owns or holds 5% or more of
any class of the voting or other equity interests of such Person, or (iii) 5% or
more of any class of voting interests or other equity interests of which is
beneficially owned or held, directly or indirectly, by such Person. Control, as
used in this definition, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise, including the power to elect a majority of the directors or trustees
of a corporation or trust, as the case may be.
Agent shall mean PNC Bank, National Association, and its
successors and assigns.
Agent's Fee shall have the meaning assigned to that term in
Section 10.15.
Agent's Letter shall have the meaning assigned to that term in
Section 7.1.6.
Agent's Office means the office of the Agent located at Xxx
Xxxxx Xxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx 00000, or such other office as the
Agent may designate in writing as such to the other parties hereto.
Agreement shall mean this Amended and Restated Credit
Agreement, as the same may be supplemented or amended from time to time,
including all schedules and exhibits.
Ajax Manufacturing means Ajax Manufacturing Co.
Amended and Restated Collateral Assignment of Lease shall mean
the Amended and Restated Collateral Assignment of Lease, dated as of June 16,
1999, executed and delivered by Ajax Manufacturing to the Agent for the benefit
of the Banks.
Amended and Restated Subordination, Non-Disturbance and
Attornment Agreement, dated as of June 16, 1999, executed and delivered by CPS
Trailer, CPS Enterprises and the Agent for the benefit of the Banks.
Applicable Margin shall mean with reference to Revolving Loans
and Term Loan A Loans to which the Base Rate Option or the Euro-Rate Option
applies, an amount in excess of the Base Rate or the Euro-Rate, as the case may
be, calculated in respect of the most-recently reported Leverage Ratio according
to the table set forth below. Applicable Margin shall be at "Level IV" in the
following table until delivery of the financial statements due pursuant to
Section 8.3.2 [Quarterly Financial Statements] for the period ending December
31, 1999. Thereafter, Applicable Margin shall change on the day financial
statements are due to be delivered pursuant to Sections 8.3.2 [Quarterly
Financial Statements] and 8.3.3 [Annual Financial Statements] and if information
necessary to make such determination is not timely delivered
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pursuant to such sections, Applicable Margin shall be at "Level IV" in the
following table until such information is delivered.
APPLICABLE MARGIN
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Level Leverage Applicable Margin for Applicable Margin for
Coverage Ratio Base Rate Loans (%) Euro-Rate Loans (%)
--------------------------------------------------------------------------------
I less than or equal to .25 2.25
2.00-to-1.0
II greater than 2.00-to-1.0 but .50 2.50
less than or equal to
2.50-to-1.0
III greater than 2.50-to-1.0 but .75 2.75
less than or equal to
3.00-to-1.0
IV greater than 3.00-to-1.0 1.00 3.00
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Applicable Margin shall mean, with reference to Term Loan B Loans to which the
Base Rate Option applies, 1.75% and, with reference to Term Loan B Loans to
which the Euro-Rate Option applies, 3.50%.
The rate on Base Rate Loans and Euro-Rate Loans shall change the date the
Applicable Margin changes.
Assignee Bank shall have the meaning assigned to such term in
Section 2.10.2.
Assignment and Assumption Agreement shall mean an Assignment
and Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and
the Agent, as Agent and on behalf of the remaining Banks, substantially in the
form of Exhibit 1.1(A).
Assignments of Leases shall mean, collectively, and Assignment
of Leases shall mean, separately:
(i) that certain Amended and Restated Assignment of Leases and
Rents, dated of even date herewith, from R&S Truck Body Company, Inc. to the
Agent for the benefit of the Banks;
(ii) that certain Amended and Restated Assignment of Leases
and Rents, dated of even date herewith, from CPS Trailer Co. to the Agent for
the benefit of the Banks ;
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(iii) that certain Amended and Restated Assignment of Leases
and Rents, dated of even date herewith, from CPS Enterprises, Inc. to the Agent
for the benefit of the Banks;
(iv) that certain Assignment of Leases and Rents, dated of
even date herewith, from Ranor, Inc. to the Agent for the benefit of the Banks;
and
(v) those certain assignments of leases and rents which may be
delivered by the Loan Parties to the Agent for the benefit of the Banks,
all as the same may be supplemented, amended or restated from
time to time in accordance herewith or therewith.
Authorized Officer shall mean those individuals, designated by
written notice to the Agent from the Borrower, authorized to execute notices,
reports and other documents on behalf of the Loan Parties required hereunder.
The Borrower may amend such list of individuals from time to time by giving
written notice of such amendment to the Agent.
Bank to be Terminated shall have the meaning assigned to such
term in Section 2.10.2.
Banks shall mean the financial institutions named on Schedule
1.1(B) and their respective successors and assigns as permitted hereunder, each
of which is referred to herein as a Bank.
Xxxxxxx shall mean Xxxxxxx Investments, Inc., a New Jersey
corporation.
Barclay/SAC Purchase Agreement shall mean the Stock Purchase
Agreement, dated February 24, 1998, between Barclay and Standard Automotive
Corporation, as amended, modified or supplemented from time to time.
Base Net Worth shall mean the sum (measured as of the end of
each fiscal year) of $27,823,000 plus 50% of consolidated net income of the
Borrower and its Subsidiaries for each fiscal year in which net income (net of
preferred dividends) was earned (as opposed to a net loss) during the period
from April 1, 1999 through the date of determination.
Base Rate shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Effective Rate plus
1/2% per annum.
Base Rate Option shall mean either the Revolving Credit Base
Rate Option or the Term Loan Base Rate Option.
Benefit Arrangement shall mean at any time an "employee
benefit plan," within the meaning of Section 3(3) of ERISA, which is neither a
Plan nor a Multiemployer Plan
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and which is maintained, sponsored or otherwise contributed to by any member of
the ERISA Group.
Borrower shall mean Standard Automotive Corporation, a
corporation organized and existing under the laws of the State of Delaware.
Borrower Statements shall have the meaning assigned to that
term in Section 6.1.9(b)(i).
Borrowing Base shall mean at any time the sum of (i)
eighty-five percent (85%) of Qualified Accounts plus (ii) fifty-five percent
(55%) of Qualified Inventory (in any event not to exceed with respect to
Qualified Inventory the sum of $10,000,000), as any of the foregoing is modified
from time to time pursuant to Section 2.1. Each such advance rate is subject to
periodic review and analysis by the Banks and is therefore subject to change
from time to time or any time.
Borrowing Base Certificate shall mean the Borrowing Base
Certificate given by the Borrower to the Banks on the Closing Date and from time
to time pursuant to Section 8.3.3A in the form of Exhibit 1.1(B).
Borrowing Date shall mean, with respect to any Loan, the date
for the making thereof or the renewal or conversion thereof at or to the same or
a different Interest Rate Option, which shall be a Business Day.
Borrowing Tranche shall mean specified portions of Loans
outstanding as follows: (i) any Loans to which a Euro-Rate Option applies which
become subject to the same Interest Rate Option under the same Loan Request by
the Borrower and which have the same Interest Period shall constitute one
Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies shall
constitute one Borrowing Tranche.
Business Day shall mean any day other than a Saturday or
Sunday or a legal holiday on which commercial banks are authorized or required
to be closed for business in New Jersey and if the applicable Business Day
relates to any Loan to which the Euro-Rate Option applies, such day must also be
a day on which dealings are carried on in the London interbank market.
Cabore means Cabore Resources, Inc.
CCC shall have the meaning assigned to such term in the
recitals.
CCC/Borrower Stock Purchase Agreement shall have the meaning
ascribed to such term in the recitals.
Clayfort means Clayfort Industries, Inc.
Closing Date shall mean the Business Day on which the first
Loan shall be made, which shall be June 17, 1999 or, if all the conditions
specified in Section 7 have not been satisfied or waived by such date, not later
than June 30, 1999, as designated by the Borrower by
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at least three Business Days' advance notice to the Agent at its Principal
Office, or such other date as the parties agree. The closing shall take place at
10:00 a.m., Eastern time, on the Closing Date at the offices of Xxxxxxxx
Ingersoll, 000 Xxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, or at such other
time and place as the parties agree.
Collateral shall mean the Pledged Collateral, the UCC
Collateral and the Real Property.
Commercial Letter of Credit shall mean a Letter of Credit
issued in respect of the purchase of goods or services by the Borrower or one of
its Subsidiaries in the ordinary course of business.
Commitment shall mean as to any Bank the aggregate of its
Revolving Credit Commitment, Term Loan A Commitment and Term Loan B Commitment,
and Commitments shall mean the aggregate of the Revolving Credit Commitments,
the Term Loan A Commitments and the Term Loan B Commitments of all of the Banks.
Commitment Fee shall have the meaning assigned to that term in
Section 2.4.
Company shall have the meaning ascribed to such term in the
recitals.
Consolidated Capital Expenditures of any Person means, for any
period, the aggregate gross increase during that period, in the property, plant
or equipment reflected in the consolidated balance sheet of such Person and its
consolidated Subsidiaries, in conformity with GAAP, but excluding expenditures
made in connection with the replacement, substitution or restoration of assets
(i) to the extent financed from insurance proceeds paid on account of the loss
of or damage to the assets being replaced or restored, or from indemnity
payments received pursuant to the Acquisition Documents, (ii) with awards of
compensation arising from the taking by eminent domain or condemnation of the
assets being replaced or (iii) with regard to equipment that is purchased
simultaneously with the trade-in of existing equipment, fixed assets or
improvements, the credit granted by the seller of such equipment for the
trade-in of such equipment, fixed assets or improvements; provided, however,
that Consolidated Capital Expenditures shall in any event exclude the following:
(i) up to $9,900,000 in the aggregate of capital expenditures in respect of the
purchase or acquisition of fixed or capital assets by R&S in fiscal years 1998
and 1999 to be used in connection with the acquisition and development of a new
manufacturing plant in Xxxxx County, Kentucky and (ii)(a) up to $4,000,000 in
the aggregate of capital expenditures in respect of the purchase or acquisition
of fixed or capital assets by the Loan Parties to be used in connection with the
acquisition and development of a West Coast manufacturing facility, (b) up to
$1,500,000 in the aggregate of capital expenditures in respect of the purchase
or acquisition of fixed or capital assets by the Loan Parties at the Ajax
manufacturing facility located in Hillsborough, New Jersey, in each case for
fiscal years 1999 and 2000 and (c) up to $5,000,000 in the aggregate of capital
expenditures for fiscal years 1999 and 2000 for the 25,000 square foot addition
(including related machinery and equipment) at Ranor.
Consolidated Lease Expense shall mean for any period, the
aggregate amount of fixed and contingent rentals payable by the Borrower and its
Subsidiaries, determined
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on a consolidated basis in accordance with GAAP, for such period with respect to
leases of real and personal property.
Consolidated Net Worth shall mean as of any date of
determination total stockholders' equity of the Borrower and its Subsidiaries as
of such date determined and consolidated in accordance with GAAP.
Contingent Obligations means, as to any Person, without
duplication, any obligation of such person guaranteeing or intended to guarantee
any Indebtedness, leases, dividends or other obligations ("primary obligations")
of any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (a) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (b) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (c) 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 (d) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business and amounts that are permitted by Section 8.2.3. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the maximum
amount that such Person may be obligated to expend pursuant to the terms of such
Contingent Obligation or, if such Contingent Obligation is not so limited, the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
Control Group means Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx and Xxxx
Xxxxxxx.
CPS means, collectively, CPS Enterprises and CPS Trailer.
CPS Enterprises means CPS Enterprises, Inc., a Missouri
corporation.
CPS Trailer means CPS Trailer Co., a Missouri corporation.
Dollar, Dollars, U.S. Dollars and the symbol $ shall mean
lawful money of the United States of America.
Drawing Date shall have the meaning assigned to that term in
Section 2.9.3.2.
EBITDA shall mean (i) the sum of net income (before (a)
extraordinary expenses and (b) owners compensation related expenses, excess CEO
compensation and private company related expenses not to exceed $300,000, in
each case as approved by the Agent in writing, in its sole discretion),
depreciation, amortization, interest expense, income tax expense minus (ii)
non-cash credits to net income, in each case of the Borrower and its
Subsidiaries determined and consolidated in accordance with GAAP (x) for the
four fiscal quarters ended
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March 31, 1999 and (y) at the end of each fiscal quarter thereafter calculated
for the four quarters then ended. EBITDA shall also include certain non-cash
charges related to purchase accounting adjustments to be agreed upon between the
Borrower and the Banks, in the Banks' sole discretion.
Environmental Complaint shall mean any written complaint
setting forth a cause of action for personal or property damage or natural
resource damage or equitable relief, order, notice of violation, citation,
request for information issued pursuant to any Environmental Laws by an Official
Body, subpoena or other written notice of any type relating to, arising out of,
or issued pursuant to, any of the Environmental Laws or any Environmental
Conditions, as the case may be.
Environmental Conditions shall mean any conditions of the
environment, including the workplace, the ocean, natural resources (including
flora or fauna), soil, surface water, groundwater, any actual or potential
drinking water supply sources, substrata or the ambient air, relating to or
arising out of, or caused by, the use, handling, storage, treatment, recycling,
generation, transportation, release, spilling, leaking, pumping, emptying,
discharging, injecting, escaping, leaching, disposal, dumping, threatened
release or other management or mismanagement of Regulated Substances resulting
from the use of, or operations on, any Property.
Environmental Laws shall mean all federal, state, local and
foreign Laws and regulations, including permits, licenses, authorizations,
bonds, orders, judgments, and consent decrees issued, or entered into, pursuant
thereto, relating to pollution or protection of human health or the environment
or employee safety in the workplace.
ERISA shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
ERISA Group shall mean, at any time, the Borrower and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrower, are treated as a single employer under Section 414
of the Internal Revenue Code.
Euro-Rate shall mean, with respect to the Loans comprising any
Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period,
the interest rate per annum determined by the Agent by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum)
(i) the rate of interest determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the average of the London interbank offered rates for U.S. Dollars quoted by the
British Bankers' Association as set forth on Dow Xxxxx Markets Service (formerly
known as Telerate) display page 3750 (or appropriate successor or, if the
British Bankers' Association or its successor ceases to provide such quotes, a
comparable replacement determined by the Agent) two (2) Business Days prior to
the first day of such Interest
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Period for an amount comparable to such Borrowing Tranche and having a borrowing
date and a maturity comparable to such Interest Period by (ii) a number equal to
1.00 minus the Euro-Rate Reserve Percentage. The Euro-Rate may also be expressed
by the following formula:
Average of London interbank offered rates on Dow Xxxxx Markets
Service display page 3750 as quoted by
Euro-Rate = British Bankers' Association or appropriate successor
-----------------------------------------------------
1.00 - Euro-Rate Reserve Percentage
The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrower of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error.
Euro-Rate Option shall mean either the Revolving Credit
Euro-Rate Option or the Term Loan Euro-Rate Option.
Euro-Rate Reserve Percentage shall mean the maximum percentage
(expressed as a decimal rounded upward to the nearest 1/100 of 1%) as determined
by the Agent which is in effect during any relevant period, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the reserve requirements (including supplemental, marginal and
emergency reserve requirements) with respect to eurocurrency funding (currently
referred to as "Eurocurrency Liabilities") of a member bank in such System.
Event of Default shall mean any of the events described in
Section 9.1 and referred to therein as an "Event of Default."
Excess Cash Flow shall be computed as of the close of each
fiscal year by taking the difference between (i) EBITDA for such fiscal year and
(ii) Fixed Charges, plus Consolidated Capital Expenditures, plus voluntary
prepayments to Term Loan A Loans, in each case for such fiscal year. All
determinations of Excess Cash Flow shall be based on the immediately preceding
fiscal year and shall be made following the delivery by the Borrower to the
Agent of the Borrower's audited financial statements for such preceding year.
Existing Banks shall have the meaning specified in the
recitals hereto.
Existing Credit Agreement shall have the meaning specified in
the recitals hereto.
Existing Debt means the Indebtedness of the Borrower and its
Subsidiaries set forth on Schedule 8.2.1.
Existing Lender shall mean any lender under an Existing
Financing Document.
Existing Financing Documents shall mean all credit agreements,
indentures, notes, guarantees and other financing documents, in each case, as
amended to the extent permitted hereunder, evidencing or governing the
Indebtedness listed on Schedule 8.2.1.
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Expiration Date shall mean, with respect to the Revolving
Credit Commitments, July 20, 2002, unless otherwise extended in accordance with
the provisions of Section 2.10.
Extending Bank shall have the meaning assigned to such term in
Section 2.10.2.
Federal Funds Effective Rate for any day shall mean the rate
per annum (based on a year of 360 days and actual days elapsed and rounded
upward to the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New
York (or any successor) on such day as being the weighted average of the rates
on overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.
Financial Projections shall have the meaning assigned to that
term in Section 6.1.9(b)(ii).
Five N shall have the meaning ascribed to such term in the
recitals.
Fixed Charge Coverage Ratio shall mean the ratio of (x) EBITDA
minus Consolidated Capital Expenditures to (y) Fixed Charges.
Fixed Charges shall mean the sum of cash interest expense,
cash income taxes, scheduled principal installments on Indebtedness (as adjusted
for prepayments), cash dividends and payments under capitalized leases, in each
case of the Borrower and its Subsidiaries determined and consolidated in
accordance with GAAP and measured as of the end of each fiscal quarter.
GAAP shall mean generally accepted accounting principles as
are in effect from time to time, subject to the provisions of Section 1.3, and
applied on a consistent basis both as to classification of items and amounts.
Governmental Acts shall have the meaning assigned to that term
in Section 2.9.8.
Governmental Authority means any federal, state, local,
foreign or other governmental or administrative (including self-regulatory)
body, instrumentality, department or agency or any court, tribunal,
administrative hearing body, arbitration panel, commission, or other similar
dispute-resolving panel or body including, without limitation, those governing
the regulation and protection of the environment, whether now or hereafter in
existence, or any officer or official thereof.
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Guarantor shall mean each of the parties to this Agreement
which is designated as a "Guarantor" on the signature page hereof and each other
Person which joins this Agreement as a Guarantor after the date hereof pursuant
to Section 11.19.
Guarantor Joinder shall mean a joinder by a Person as a
Guarantor under this Agreement, the Guaranty Agreement and the other Loan
Documents in the form of Exhibit 1.1(G)(1).
Guaranty of any Person shall mean any obligation of such
Person guaranteeing or in effect guaranteeing any liability or obligation of any
other Person in any manner, whether directly or indirectly, including, without
limitation, any agreement to indemnify or hold harmless any other Person, any
performance bond or other suretyship arrangement and any other form of assurance
against loss, except endorsement of negotiable or other instruments for deposit
or collection in the ordinary course of business.
Guaranty Agreements shall mean each Continuing Agreement of
Guaranty and Suretyship Agreement executed and delivered by each of the
Guarantors to the Agent for the benefit of the Banks, together with any
amendments thereto.
Xxxxx means Xxxxx Industries, Inc.
Historical Statements shall have the meaning assigned to that
term in Section 6.1.9(b)(i).
Indebtedness shall mean, as to any Person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device;
provided, however, that the face amount of any letters of credit which are
secured with cash or cash equivalents pledged to the Banks through an escrow
account in form acceptable to the Agent and the Banks shall be excluded from the
amounts included in determining the amount of Indebtedness outstanding at any
given time, (iv) any other transaction (including forward sale or purchase
agreements, capitalized leases and conditional sales agreements) having the
commercial effect of a borrowing of money entered into by such Person to finance
its operations or capital requirements (but not including trade payables and
accrued expenses incurred in the ordinary course of business which are not
represented by a promissory note or other evidence of indebtedness and which are
not more than thirty (30) days past due), (v) any Guaranty of Indebtedness for
borrowed money or (vi) mandatory redeemable preferred stock.
Indemnity shall mean the Amended and Restated Environmental
Indemnity Agreement, dated as of the date hereof, from the Loan Parties to the
Agent for the benefit of the Banks, relating to possible environmental
liabilities associated with any of the Properties.
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Ineligible Security shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.
ING Barings shall mean ING (U.S.) Capital LLC, a Delaware
limited liability company.
Insolvency Proceeding shall mean, with respect to any Person,
(a) a case, action or proceeding with respect to such Person (i) before any
court or any other Official Body under any bankruptcy, insolvency,
reorganization or other similar Law now or hereafter in effect, or (ii) for the
appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any Loan Party or otherwise
relating to the liquidation, dissolution, winding-up or relief of such Person,
or (b) any general assignment for the benefit of creditors, composition,
marshaling of assets for creditors, or other, similar arrangement in respect of
such Person's creditors generally or any substantial portion of its creditors;
undertaken under any Law.
Intercompany Subordination Agreement shall mean the Amended
and Restated Subordination Agreement, dated the date hereof, among the Loan
Parties.
Interest Period shall have the meaning assigned to such term
in Section 4.2
Interest Rate Option shall mean any Euro-Rate Option or Base
Rate Option.
Internal Revenue Code shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.
Inventory shall mean any and all inventory of a Loan Party,
including, without limitation, goods in transit, wheresoever located and whether
now owned or hereafter acquired by a Loan Party which are or may at any time be
held as raw materials, finished goods, work-in-process, supplies or materials
used or consumed in a Loan Party's business or held for sale or lease,
including, without limitation, (i) all such property the sale or other
disposition of which has given rise to Accounts and which has been returned to
or repossessed or stopped in transit by a Loan Party, and (ii) all packing,
shipping and advertising materials relating to all or any such property.
Kylan means Kylan Industries, Inc.
Labor Contracts shall mean all employment agreements,
employment contracts, collective bargaining agreements and other agreements
among any Loan Party or Subsidiary of a Loan Party and its employees.
Landlord's Waiver shall mean that certain Landlord's Waiver,
dated July 21, 1998, made by Xxxx Xxxxxxx in favor of the Agent for the benefit
of the Banks.
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Law shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree or award of any Official Body.
L/C Fee Payment Date shall mean each September 30, December
31, March 31 and June 30 of each year.
Leasehold Mortgage shall mean each Leasehold Mortgage to be
executed and delivered by any Loan Party, as the same may be amended,
supplemented or otherwise modified from time to time.
Letter of Credit shall have the meaning assigned to that term
in Section 2.9.1.
Letter of Credit Borrowing shall mean an extension of credit
resulting from a drawing under any Letter of Credit which shall not have been
reimbursed on the date when made and shall not have been converted into a
Revolving Credit Loan under Section 2.9.3.2.
Letter of Credit Fee shall mean the fees referred to in
Section 2.9.2.
Letters of Credit Outstanding shall mean at any time the sum
of (i) the aggregate undrawn face amount of outstanding Letters of Credit and
(ii) the aggregate amount of all unpaid and outstanding Reimbursement
Obligations.
Leverage Ratio shall mean the ratio of (x) the sum of the
Borrower's consolidated Indebtedness, excluding the Notes (as defined in the
Ranor Purchase Agreement) to (y) EBITDA.
Lien shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).
LLC Interests shall have the meaning given to such term in
Section 6.1.3.
Loan Documents shall mean this Agreement, the Agent's Letter,
the Amended and Restated Collateral Assignment of Lease, the Amended and
Restated Subordination, Non-Disturbance and Attornment Agreement, the
Assignments of Leases, the Guaranty Agreements, the Indemnity, the Landlord
Waiver, the Intercompany Subordination Agreement, the Mortgages, the Notes, the
Pledge Agreements, the Security Agreements and any other instruments,
certificates or documents delivered or contemplated to be delivered hereunder or
thereunder or in connection herewith or therewith, as the same may be
supplemented or amended from time to time in accordance herewith or therewith,
and Loan Document shall mean any of the Loan Documents.
Loan Parties shall mean the Borrower and the Guarantors.
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Loan Request shall have the meaning given to such term in
Section 2.5.
Loans shall mean collectively and Loan shall mean separately
all Revolving Credit Loans and the Term Loans or any Revolving Credit Loan or
any Term Loan.
Mandatory Prepayment Date shall have the meaning assigned to
that term in Section 5.5.1.
Mandatory Prepayment of Excess Cash Flow shall have the
meaning assigned to that term in Section 5.5.1.
Xxxxxxx/SAC Purchase Agreement shall mean the Stock Purchase
Agreement, dated August 11, 1997, between Xxxx Xxxxxxx and Standard Automotive
Corporation, as amended, modified or supplemented from time to time.
Material Adverse Change shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Loan Document, (b) is or could reasonably be expected to be
material and adverse to the business, properties, assets, financial condition,
results of operations or prospects of the Loan Parties taken as a whole, (c)
impairs materially or could reasonably be expected to impair materially the
ability of the Loan Parties taken as a whole to duly and punctually pay or
perform its Indebtedness, or (d) impairs materially or could reasonably be
expected to impair materially the ability of the Agent or any of the Banks, to
the extent permitted, to enforce their legal remedies pursuant to this Agreement
or any other Loan Document.
Month, with respect to an Interest Period under the Euro-Rate
Option, shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any
Euro-Rate Interest Period begins on a day of a calendar month for which there is
no numerically corresponding day in the month in which such Interest Period is
to end, the final month of such Interest Period shall be deemed to end on the
last Business Day of such final month.
Mortgages shall mean, collectively, and Mortgage shall mean,
separately:
(i) that certain Amended and Restated Mortgage and
Security Agreement, dated of even date herewith, from R&S Truck Body Company,
Inc. to the Agent for the benefit of the Banks;
(ii) that certain Amended and Restated Deed of Trust and
Security Agreement, dated of even date herewith, from CPS Trailer Co. to the
Trustee named therein for the benefit of the Agent on behalf of the Banks ;
(iii) that certain Amended and Restated Deed of Trust
and Security Agreement, dated of even date herewith, from CPS Enterprises, Inc.
to the Trustee named therein for the benefit of the Agent on behalf of the
Banks;
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(iv) that certain Open-End Mortgage and Security
Agreement, from Ranor, Inc. to the Agent for the benefit of the Banks; and
(v) those certain mortgage and security agreements and
deed of trust and security agreements which may be delivered by the Loan Parties
to the Agent for the benefit of the Banks or to a trustee for the benefit of the
Agent on behalf of the Banks.
Multiemployer Plan shall mean any employee benefit plan which
is a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and
to which the Borrower or any member of the ERISA Group is then making or
accruing an obligation to make contributions or, within the preceding five Plan
years, has made or had an obligation to make such contributions.
Multiple Employer Plan shall mean a Plan which has two or more
contributing sponsors (including the Borrower or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.
Net Proceeds shall mean: (i) the aggregate cash consideration
received by the Borrower or a Subsidiary in connection with any transaction
referred to in Section 5.5.2 or Section 5.5.3 less (ii) the expenses (including
out-of-pocket expenses) incurred by the Borrower or such Subsidiary in
connection with such transaction and the amount of any federal and state taxes
incurred in connection with such transaction, in each case as certified by an
Authorized Officer to the Agent at the time of such transaction.
Noray means Noray Resources, Inc.
Notes shall mean, collectively, the Revolving Credit Notes and
the Term Notes.
Notices shall have the meaning assigned to that term in
Section 11.6.
Obligation shall mean any obligation or liability of any of
the Loan Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
the Notes, the Letters of Credit, the Agent's Letter or any other Loan Document.
Official Body shall mean any national, federal, state, local
or other government or political subdivision or any agency, authority, bureau,
central bank, commission, department or instrumentality of either, or any court,
tribunal, grand jury or arbitrator, in each case whether foreign or domestic.
Participation Advance shall mean, with respect to any Bank,
such Bank's payment in respect of its participation in a Letter of Credit
Borrowing according to its Ratable Share pursuant to Section 2.9.3.
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Partnership Interests shall have the meaning given to such
term in Section 6.1.3.
PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.
Permitted Investments shall mean:
(i) direct obligations of the United States of America
or any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in twelve (12) months or
less from the date of acquisition;
(ii) marketable general obligations issued by any state
of the United States of America or any political subdivision of any such state
or any public instrumentality thereof maturing within six months from the date
of acquisition thereof and, at the time of acquisition, having one of the two
highest ratings generally obtainable from either Standard & Poor's or Xxxxx'x
Investors Service, Inc.;
(iii) commercial paper maturing in 180 days or less
rated not lower than A-1, by Standard & Poor's or P-1 by Xxxxx'x Investors
Service, Inc. on the date of acquisition; and
(iv) demand deposits, time deposits or certificates of
deposit maturing within one year in commercial banks whose obligations are rated
A-1, A or the equivalent or better by Standard & Poor's on the date of
acquisition.
Permitted Liens shall mean:
(i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;
(ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance, old-age
pensions or other social security programs;
(iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;
(iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;
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(v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;
(vi) Liens, security interests and mortgages in favor of
the Agent for the benefit of the Banks;
(vii) Liens on property leased by any Loan Party or
Subsidiary of a Loan Party under capital and operating leases permitted in
Section 8.2.15 securing obligations of such Loan Party or Subsidiary to the
lessor under such leases;
(viii) Any Lien existing on the date of this Agreement
and described on Schedule 1.1(P) to the Existing Credit Agreement, provided that
the principal amount secured thereby is not hereafter increased, and no
additional assets become subject to such Lien;
(ix) Purchase Money Security Interests, provided that
the aggregate amount of loans and deferred payments secured by such Purchase
Money Security Interests shall not exceed $250,000 (excluding for the purpose of
this computation any loans or deferred payments secured by Liens described on
Schedule 1.1(P));
(x) The Lien granted to Summit Bank on the Municipal
Bond Stafford Township Board of Education Coupon due September 1, 2001, as
evidenced by UCC filing #1838942; and
(xi) The following, (A) if the validity or amount
thereof is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been stayed and
continue to be stayed or (B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and in either case they do not
affect the Collateral or, in the aggregate, materially impair the ability of any
Loan Party to perform its Obligations hereunder or under the other Loan
Documents:
(1) Claims or Liens for taxes, assessments or charges due and
payable and subject to interest or penalty, provided that the
applicable Loan Party maintains such reserves or other appropriate
provisions as shall be required by GAAP and pays all such taxes,
assessments or charges forthwith upon the commencement of
proceedings to foreclose any such Lien;
(2) Claims, Liens or encumbrances upon, and defects of title
to, real or personal property other than the Collateral, including
any attachment of personal or real property or other legal process
prior to adjudication of a dispute on the merits; or
(3) Claims or Liens of mechanics, materialmen, warehousemen,
carriers, or other statutory nonconsensual Liens.
-19-
(4) Liens resulting from final judgments or orders described
in Section 9.1.6.
Person shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.
Plan shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.
Pledge Agreement shall mean each Pledge Agreement executed and
delivered by each of the Borrower, Xxxxxxx, Haile, Wyner, CCC, Noray, Clayfort,
Kylan and Cabore to the Agent for the benefit of the Banks, together with any
amendments thereto.
Pledged Collateral shall mean the property of the Loan Parties
in which security interests are to be granted under the Pledge Agreements.
PNC Bank shall mean PNC Bank, National Association, its
successors and assigns.
Potential Default shall mean any event or condition which with
notice, passage of time or a determination by the Agent or the Required Banks,
or any combination of the foregoing, would constitute an Event of Default.
Principal Office shall mean the main banking office of the
Agent in East Brunswick, New Jersey.
Prior Security Interest shall mean a valid and enforceable
perfected first-priority security interest under the Uniform Commercial Code in
the UCC Collateral and the Pledged Collateral which is subject only to Liens for
taxes not yet due and payable to the extent such prospective tax payments are
given priority by statute or Purchase Money Security Interests as permitted
hereunder.
Proforma Statement shall have the meaning ascribed to that
term in Section 6.1.9(b)(i).
Prohibited Transaction shall mean any prohibited transaction
as defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA
for which neither an individual nor a class exemption has been issued by the
United States Department of Labor.
Property shall mean all real property, both owned and leased,
of any Loan Party or Subsidiary of a Loan Party.
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Purchase Agreements shall mean the Xxxxxxx/SAC Purchase
Agreement, the R&S Purchase Agreement, the Xxxxxxx/SAC Purchase Agreement and
the Ranor Purchase Agreement.
Purchase Money Security Interest shall mean Liens upon
tangible personal property securing loans to any Loan Party or Subsidiary of a
Loan Party or deferred payments by such Loan Party or Subsidiary for the
purchase of such tangible personal property.
Purchaser shall have the meaning assigned to such term in the
recitals.
Purchasers shall have the meaning assigned to such term in the
recitals.
Purchasing Bank shall mean a Bank which becomes a party to
this Agreement by executing an Assignment and Assumption Agreement.
Qualified Account shall mean any Account which the Banks
(other than ING Barings), in their sole discretion, determine to have met all of
the following minimum requirements:
(i) The Account represents a complete bona fide transaction
for goods sold and delivered or services rendered (but excluding any amount in
the nature of a service charge added to the amount due on an invoice because the
invoice has not been paid when due) which requires no further act under any
circumstances on the part of the Loan Parties to make such Account payable by
the Account Debtor; and the Account arises from an arm's length transaction in
the ordinary course of the Loan Parties' business between a Loan Party and an
Account Debtor which is not an Affiliate, officer, or employee of a Loan Party,
or a member of the family of an Affiliate, officer, or employee of a Loan Party;
(ii) The Account shall not (a) be delinquent more than ninety
(90) days past the original invoice date and is not subject to "dating" terms,
or (b) be payable by an Account Debtor (1) more than fifty percent (50%) of
whose Accounts are delinquent more than ninety (90) days from the date of the
original invoice therefor, or (2) whose Accounts constitute, in the Banks'
determination, an unduly high percentage of the aggregate amount of all
outstanding Accounts;
(iii) The goods the sale of which gave rise to the Account
were shipped or delivered or provided to the Account Debtor on an absolute sale
basis and not on a xxxx-and-hold sale basis, a consignment sale basis, a
guaranteed sale basis, a sale-or-return basis, or on the basis of any other
similar understanding, and no part of such goods has been returned or rejected;
(iv) The Account is not evidenced by chattel paper or an
instrument of any kind;
(v) The Account Debtor with respect to the Account (a) is not
insolvent, (b) is not the subject of any bankruptcy or insolvency proceedings of
any kind or of any other proceeding or action, threatened or pending, which
might have a materially adverse effect
-21-
on its business, and (c) is not, in the sole discretion of the Banks, deemed
ineligible for credit for other reasons (including, without limitation,
unsatisfactory past experience of a Loan Party or the Banks with the Account
Debtor or unsatisfactory reputation of the Account Debtor);
(vi) (a) The Account Debtor is not located outside of the
continental United States of America, or (b) if the Account Debtor is located
outside of the continental United States, the Account is supported by letters of
credit or FCIA insurance deemed adequate and acceptable by the Banks;
(vii) (a) The Account Debtor shall not be a foreign
Governmental Authority and (b) if the Account is an Account a security interest
in which would be subject to the Federal Assignment of Claims Act of 1940, as
amended (31 U.S.C. ss. 3727 et seq.), then the Federal Assignment of Claims Act
(or applicable similar legislation) has been fully complied with so as to
validly perfect the Banks' prior security interest to the Banks' satisfaction;
(viii) The Account is a valid, legally enforceable obligation
of the Account Debtor with respect thereto and is not pursuant to any progress
billing or warranty billing arrangement or subject to any dispute, condition,
contingency, offset, recoupment, reduction, claim for credit, allowance,
adjustment, counterclaim or defense on the part of such Account Debtor, and no
facts exist which may provide a basis for any of the foregoing in the present or
future;
(ix) The Account is not subject to any Lien, claim,
encumbrance or security interest whatsoever other than Permitted Liens;
(x) The Account is evidenced by an invoice or other
documentation in form acceptable to the Banks and arises from a contract which
is in form and substance satisfactory to the Banks;
(xi) Accounts with respect to which the Account Debtor is
located in any state (including, without limitation, New Jersey, Minnesota and
Indiana) denying creditor's access to its courts in the absence of a Notice of
Business Activities Report or other similar filing, unless a Borrower has either
qualified as a foreign corporation authorized to transact business in such state
or has filed a Notice of Business Activities Report or similar filing with the
applicable state agency for the then current year;
(xii) The Account is not subject to any provision prohibiting
its assignment or requiring notice of or consent to such assignment;
(xiii) The goods giving rise to the Account were not, at the
time of sale thereof, subject to any Lien or encumbrance except the Banks' prior
security interest;
(xiv) The Account is payable in freely transferable United
States Dollars;
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(xv) The Account is not, or should not be, disqualified for
any other reason generally accepted in the commercial finance business; and
(xvi) The Account is not owing by an Account Debtor to the
extent its obligations to a Loan Party exceed 40% of all Qualified Accounts
unless such excess is supported by letters of credit or FCIA insurance deemed
adequate and acceptable by the Banks or owing by an Account Debtor unacceptable
to the Banks in their sole discretion.
In addition to the foregoing requirements, Accounts of any Account Debtor which
are otherwise qualified shall be reduced to the extent of any "contra" accounts
or accounts payable (including, without limitation, the Banks' good faith
estimate of any contingent liabilities) by a Loan Party to such Account Debtor,
provided that the Banks, in their sole discretion, may determine that none of
the Accounts in respect to such Account Debtor shall be Qualified Accounts in
the event that such contra accounts or accounts payable represent an
unreasonably large amount owing to such Account Debtor. In addition, the Banks
may in their sole discretion exclude Accounts owing to one or more particular
Account Debtors based on the creditworthiness or other characteristics of such
Account Debtor.
Qualified Inventory shall mean any Inventory which the Banks
(other than ING Barings), in their sole discretion, determines to have met all
of the following minimum requirements:
(i) the Inventory is either (a) finished goods, (b) completed
components or (c) raw materials other than shipping and packing supplies and
racking, but excluding in all cases any work in process and any goods which have
been shipped, delivered, provided to, purchased or sold by a Loan Party on a
xxxx-and-hold sale, consignment sale (except to the extent such Inventory is the
subject of an enforceable consignment agreement with the consignee protecting a
Loan Party's exclusive rights in such Inventory and with respect to which there
are filed UCC-1 financing statements providing notice of such Loan Party's
interests therein), guaranteed sale, or sale-or-return basis, or any other
similar basis or understanding other than an absolute sale;
(ii) the Inventory is of new, good and merchantable quality
and which is of a type which has been purchased by a Loan Party within the prior
twelve (12) months;
(iii) the Inventory is not stored with a bailee, warehouseman,
or similar party unless the Banks have given their prior written consent and a
Loan Party has caused such bailee, warehouseman, consignee or similar party to
issue and deliver to the Banks, in form and substance acceptable to the Banks,
warehouse receipts or similar type of documentation therefor in the Banks' name;
(iv) the Inventory is intended for sale or lease by a Loan
Party in the ordinary course of business at regular prices;
(v) the Inventory is otherwise acceptable to the Banks in
their sole discretion;
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(vi) the Inventory is not subject to any Lien, claim,
encumbrance or security interest whatsoever other than Permitted Liens;
(vii) the Inventory has not been manufactured in violation of
any federal minimum wage or overtime laws, including, without limitation, the
Fair Labor Standards Act, 29 U.S.C. ss. 215(a)(1); and
(viii) the Inventory is not located outside of the United
States.
Ranor Purchase Agreement shall have the meaning set forth in
the recitals hereto.
Ratable Share shall mean, with respect to the Revolving Credit
Commitment, Term Loan A Commitment or Term Loan B Commitment, the proportion
that a Bank's Revolving Credit Commitment, Term Loan A Commitment or Term Loan B
Commitment, respectively, bears to the Revolving Credit Commitment, Term Loan A
Commitment or Term Loan B Commitment, respectively, of all of the Banks.
Real Property shall mean the real estate owned by Ranor, which
is located in the State of Massachusetts and which shall be encumbered by a
Mortgage and any other property owned by a Loan Party which shall be encumbered
by a Mortgage or Leasehold Mortgage.
Redemption Note shall mean the $3,401,905.00 aggregate
original principal amount of Redemption Note issued by Ajax in favor of Xxxx
Xxxxxxx, dated January 27, 1998.
Regulated Substances shall mean any substance, including any
solid, liquid, semisolid, gaseous, thermal, thoriated or radioactive material,
refuse, garbage, wastes, chemicals, petroleum products, by-products, coproducts,
impurities, dust, scrap, heavy metals, defined as a "hazardous substance,"
"pollutant," "pollution," "contaminant," "hazardous or toxic substance,"
"extremely hazardous substance," "toxic chemical," "toxic waste," "hazardous
waste," "industrial waste," "residual waste," "solid waste," "municipal waste,"
"mixed waste," "infectious waste," "chemotherapeutic waste," "medical waste," or
"regulated substance" or any related materials, substances or wastes as now or
hereafter defined pursuant to any Environmental Laws, ordinances, rules,
regulations or other directives of any Official Body, the generation,
manufacture, extraction, processing, distribution, treatment, storage, disposal,
transport, recycling, reclamation, use, reuse, spilling, leaking, dumping,
injection, pumping, leaching, emptying, discharge, escape, release or other
management or mismanagement of which is regulated by the Environmental Laws.
Regulation U shall mean Regulation G, T, U or X as promulgated
by the Board of Governors of the Federal Reserve System, as amended from time to
time.
Reimbursement Obligation shall have the meaning assigned to
such term in Section 2.9.3.2.
-24-
Reportable Event shall mean a reportable event described in
Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.
Required Banks shall mean
(i) if there are no Loans, Reimbursement Obligations or
Letter of Credit Borrowings outstanding, Banks whose Commitments aggregate at
least 66 2/3% of the Commitments of all of the Banks, or
(ii) if there are Loans, Reimbursement Obligations, or
Letter of Credit Borrowings outstanding, any Bank or group of Banks if the sum
of the Loans, Reimbursement Obligations and Letter of Credit Borrowings of such
Banks then outstanding aggregates at least 66 2/3% of the total principal amount
of all of the Loans , Reimbursement Obligations and Letter of Credit Borrowings
then outstanding. Reimbursement Obligations and Letter of Credit Borrowings
shall be deemed, for purposes of this definition, to be in favor of the Agent
and not a participating Bank if such Bank has not made its Participation Advance
in respect thereof and shall be deemed to be in favor of such Bank to the extent
of its Participation Advance if it has made its Participation Advance in respect
thereof.
Revolving Credit Base Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1(i).
Revolving Credit Commitment shall mean, as to any Bank the
amount initially set forth opposite its name on Schedule 1.1 (B) in the column
labeled "Amount of Commitment for Revolving Credit Loans," and thereafter on
Schedule 1 to the most recent Assignment and Assumption Agreement, and Revolving
Credit Commitments shall mean the aggregate Revolving Credit Commitments of all
of the Banks.
Revolving Credit Euro-Rate Option shall mean the option of the
Borrower to have Revolving Credit Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1(ii).
Revolving Credit Loans shall mean collectively and Revolving
Credit Loan shall mean separately all Revolving Credit Loans or any Revolving
Credit Loan made by the Banks or one of the Banks to the Borrower pursuant to
Section 2.1 or 2.9.3.
Revolving Credit Notes shall mean collectively and Revolving
Credit Note shall mean separately all the Revolving Credit Notes of the Borrower
in the form of Exhibit 1.1(R) evidencing the Revolving Credit Loans together
with all amendments, extensions, renewals, replacements, refinancings or
refundings thereof in whole or in part.
Revolving Facility Usage shall mean at any time the sum of the
Revolving Credit Loans outstanding and the Letters of Credit Outstanding.
R&S shall mean R&S Truck Body Company, Inc.
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Section 20 Subsidiary shall mean the Subsidiary of the bank
holding company controlling any Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.
Security Agreement shall mean the Security Agreement executed
and delivered by each of the Borrower, Xxxxxxx, Ajax Manufacturing, CPS
Enterprises, R&S and CPS Trailer, Haile, Wyner, CCC, Ranor, Noray, Clayfort,
Kylan, Cabore, Denore and Mecox to the Agent for the benefit of the Banks,
together with any amendments thereto.
Security Documents means each of the Security Agreements, the
Pledge Agreements, the Landlord Waiver, and any other documents utilized to
pledge as Collateral for the Obligations any property or assets of whatever kind
or nature.
Seller shall have the meaning assigned to such term in the
recitals.
Sellers shall have the meaning assigned to such term in the
Recitals.
Shareholders shall have the meaning assigned to such term in
the recitals.
Shares shall have the meaning assigned to that term in Section
6.1.2.
Standard & Poor's shall mean Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc.
Standby Letter of Credit shall mean a Letter of Credit issued
to support obligations of one or more of the Loan Parties, contingent or
otherwise, which finance the working capital and business needs of the Loan
Parties incurred in the ordinary course of business.
Subsidiary of any Person at any time shall mean (i) any
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, (ii) any partnership of which such Person is
a general partner or of which 50% or more of the partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, (iii) any limited liability company of which such Person is a
member or of which 50% or more of the limited liability company interests is at
the time directly or indirectly owned by such Person or one or more of such
Person's Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled or capable of being
controlled by such Person or one or more of such Person's Subsidiaries.
Subsidiary Shares shall have the meaning assigned to that term
in Section 6.1.3.
Syndications Period shall mean the period between the Closing
Date and the date which is ninety (90) days after the Closing Date.
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Term Loan shall mean either a Term Loan A Loan, a Term Loan
A-1 Loan or a Term Loan B Loan.
Term Loan A Loan shall have the meaning assigned to that term
in Section 3.1.
Term Loan A Loans shall mean collectively all of the Term Loan
A Loans.
Term Loan A-1 Loan shall have the meaning assigned to that
term in Section 3.1.
Term Loan A-1 Loans shall mean collectively all of the Term
Loan A-1 Loans.
Term Loan B Loan shall have the meaning assigned to that term
in Section 3.1.
Term Loan B Loans shall mean collectively all of the Term Loan
B Loans.
Term Loan Base Rate Option shall mean the option of the
Borrower to have Term Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.1.2(i).
Term Loan A Commitment shall mean, as to any Bank the amount
initially set forth opposite its name on Schedule 1.1(B) in the columns labeled
"Amount of Commitment for Term Loan A," and Term Loan A-1 Commitment shall mean,
as to any Bank the amount initially set forth opposite its name on Schedule
1.1(B) in the columns labeled "Amount of Commitment for Term Loan A-1" and
thereafter on Schedule 1 to the most recent Assignment and Assumption Agreement,
and Term Loan A Commitments shall mean the aggregate Term Loan A Commitments and
Term Loan A-1 Commitments of all of the Banks.
Term Loan B Commitment shall mean, as to any Bank the amount
initially set forth opposite its name on Schedule 1.1(B) in the columns labeled
"Amount of Commitment for Term Loan B," and thereafter on Schedule 1 to the most
recent Assignment and Assumption Agreement, and Term Loan B Commitments shall
mean the aggregate Term Loan B Commitments of all of the Banks.
Term Loan Euro-Rate Option shall mean the option of the
Borrower to have Term Loans bear interest at the rate and under the terms and
conditions set forth in Section 4.1.2(ii).
Term Loan A Maturity Date shall have the meaning given to such
term in Section 3.3.
Term Loan A-1 Maturity Date shall have the meaning given to
such term in Section 3.3.
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Term Loan B Maturity Date shall have the meaning given to such
term in Section 3.3.
Term Loans shall mean collectively all of the Term Loans.
Term Notes shall mean collectively and Term Note shall mean
separately all of the Term Notes of the Borrower in the form of Exhibits
1.1(T-1), 1.1(T-2) and 1.1(T-3) evidencing the Term Loans together with all
amendments, extensions, renewals, replacements, refinancings or refunds thereof
in whole or in part.
Transaction shall have the meaning set forth in the recitals.
Transferor Bank shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.
UCC Collateral shall mean the property of the Loan Parties in
which security interests are to be granted under the Security Agreement.
Uniform Commercial Code shall have the meaning assigned to
that term in Section 6.1.16.
Wholly Owned Subsidiary of any Person means any Subsidiary of
such Person to the extent all of the capital stock or other ownership interests
in such Subsidiary, other than directors' or nominees' qualifying shares or
shares of capital stock required to be owned by foreign nationals under
applicable law, is owned directly or indirectly by such Person.
Xxxxx means Xxxxx Industries, Inc.
Year 2000 Problem shall have the meaning assigned to that term
in Section 6.1.27.
1.2 Construction.
Unless the context of this Agreement otherwise clearly requires, the
following rules of construction shall apply to this Agreement and each of the
other Loan Documents:
1.2.1 Number; Inclusion.
references to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";
1.2.2 Determination.
references to "determination" of or by the Agent or the Banks
shall be deemed to include good-faith estimates by the Agent or the Banks (in
the case of quantitative determinations) and good-faith beliefs by the Agent or
the Banks (in the case of qualitative determinations) and such determination
shall be conclusive absent manifest error;
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1.2.3 Documents Taken as a Whole.
the words "hereof," "herein," "hereunder," "hereto" and
similar terms in this Agreement or any other Loan Document refer to this
Agreement or such other Loan Document as a whole and not to any particular
provision of this Agreement or such other Loan Document;
1.2.4 Headings.
the section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents (if any), preceding this
Agreement or such other Loan Document are for reference purposes only and shall
not control or affect the construction of this Agreement or such other Loan
Document or the interpretation thereof in any respect;
1.2.5 Implied References to this Agreement.
article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may be,
unless otherwise specified;
1.2.6 Persons.
reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement or such other Loan Document, as the case may be, and reference to
a Person in a particular capacity excludes such Person in any other capacity;
1.2.7 Modifications to Documents.
reference to any agreement (including this Agreement and any
other Loan Document together with the schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;
1.2.8 From, To and Through.
relative to the determination of any period of time, "from"
means "from and including," "to" means "to but excluding," and "through" means
"through and including"; and
1.2.9 Shall; Will.
references to "shall" and "will" are intended to have the same
meaning.
1.3 Accounting Principles.
Except as otherwise provided in this Agreement, all computations and
determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP; provided, however, that all accounting terms
used in
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Section 8.2 [Negative Covenants] (and all defined terms used in the definition
of any accounting term used in Section 8.2 shall have the meaning given to such
terms (and defined terms) under GAAP as in effect on the date hereof applied on
a basis consistent with those used in preparing the annual statements referred
to in Section 6.1.9(i) [Historical Statements]. In the event of any change after
the date hereof in GAAP, and if such change would result in the inability to
determine compliance with the financial covenants set forth in Section 8.2 based
upon the Borrower's regularly prepared financial statements by reason of the
preceding sentence, then the parties hereto agree to endeavor, in good faith, to
agree upon an amendment to this Agreement that would adjust such financial
covenants in a manner that would not affect the substance thereof, but would
allow compliance therewith to be determined in accordance with the Borrower's
financial statements at that time.
2. REVOLVING CREDIT FACILITY
2.1 Revolving Credit Commitments.
Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Revolving Credit Loans to the Borrower at any time or from time to time on
or after the date hereof to the Expiration Date provided that after giving
effect to such Loan the aggregate amount of Loans from such Bank shall not
exceed (x) the lesser of (i) such Bank's Revolving Credit Commitment or (ii)
such Bank's Ratable Share of the Borrowing Base minus (y) such Bank's Ratable
Share of the Letters of Credit Outstanding. Within such limits of time and
amount and subject to the other provisions of this Agreement, the Borrower may
borrow, repay and reborrow pursuant to this Section 2.1. Notwithstanding
anything to the contrary herein, the Banks may, in their sole discretion at any
time hereafter, decrease the ratio of their advances against Qualified Inventory
and Qualified Accounts, or increase the level of any reserves, or create or
maintain such other reserves, as the Banks may deem necessary or appropriate.
Any such change shall become effective immediately for the purpose of
calculating new advances hereunder.
2.2 Voluntary Reduction of Commitment.
The Borrowers shall have the right at any time and from time to time
upon five (5) Business Days' prior written notice to the Agent to permanently
reduce, in a minimum amount of $1,000,000 and whole multiples of $100,000 of
principal, or terminate the Commitment, without penalty or premium except as
hereinafter set forth, provided that any such reduction or termination shall be
accompanied by prepayment of the Notes, together with the full amount of
interest accrued on the principal sum to be prepaid (and all amounts referred to
in Section 5.6.2 hereof), to the extent that the aggregate amount thereof then
outstanding exceeds the Commitment as so reduced or terminated.
2.3 Nature of Banks' Obligations with Respect to Revolving Credit
Loans.
Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.5 [Revolving Credit Loan Requests]
in accordance with its Ratable Share. The aggregate of each Bank's Revolving
Credit Loans outstanding hereunder to the Borrower at any time shall never
exceed its Revolving Credit Commitment minus its Ratable
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Share of the Letter of Credit Outstandings. The obligations of each Bank
hereunder are several. The failure of any Bank to perform its obligations
hereunder shall not affect the Obligations of the Borrower to any other party
nor shall any other party be liable for the failure of such Bank to perform its
obligations hereunder. The Banks shall have no obligation to make Revolving
Credit Loans hereunder on or after the Expiration Date.
2.4 Commitment Fees.
Accruing from the date hereof until the Expiration Date, the
Borrower agrees to pay to the Agent for the account of each Bank, as
consideration for such Bank's Revolving Credit Commitment hereunder, a
nonrefundable commitment fee (the "Commitment Fee") equal to (x) the percentage
per annum determined in reference to the Borrower's Leverage Ratio according to
the table set forth below (computed on the basis of a year of 360 days and
actual days elapsed) multiplied by (y) the average daily difference between the
amount of (i) such Bank's Revolving Credit Commitment as the same may be
constituted from time to time and (ii) the sum of such Bank's Revolving Credit
Loans outstanding plus its Ratable Share of Letters of Credit Outstanding.
Commitment Fees shall be at "Level IV" in the following table until delivery of
the financial statements due pursuant to Section 8.3.2 [Quarterly Financial
Statements] for the period ending December 31, 1999. Thereafter, Commitment Fees
shall change on the day financial statements are due to be delivered pursuant to
Sections 8.3.2 [Quarterly Financial Statements] and 8.3.3 [Annual Financial
Statements] and if information necessary to make such determination is not
timely delivered pursuant to such sections, the "Commitment Fee Percentage" in
the following table shall be at "Level IV" until such information is delivered.
COMMITMENT FEE PERCENTAGE
----------------------------------------------------------------
Level Leverage Ratio Commitment Fee
Percentage (%)
------------------------------------------------------
I less than or equal to 2.00-to-1.0 .375
II greater than 2.00-to-1.0 but less .50
than or equal to 2.50-to-1.0
III greater than 2.50-to-1.0 but less .50
than or equal to 3.00 to 1
IV greater than 3.00-to-1.0 .50
----------------------------------------------------------------
All Commitment Fees shall be payable in arrears on the first Business Day of
each October, January, April and July after the date hereof and on the
Expiration Date or upon acceleration of the Notes.
2.4A Revolving Credit Amendment Fees.
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The Borrower agrees to pay on the Closing Date to the Agent for the
account of each Bank, as consideration for such Bank's Revolving Credit
Commitment, nonrefundable amendment fees, as more particularly described on
Schedule 2.4.
2.5 Revolving Credit Loan Requests.
Except as otherwise provided herein, the Borrower may from time to
time prior to the Expiration Date request the Banks to make Revolving Credit
Loans, or renew or convert the Interest Rate Option applicable to existing
Revolving Credit Loans or Term Loans pursuant to Section 4.2 [Interest Periods],
by delivering to the Agent, not later than 10:00 a.m., Eastern time, (i) three
(3) Business Days prior to the proposed Borrowing Date with respect to the
making of Revolving Credit Loans to which the Euro-Rate Option applies or the
conversion to or the renewal of the Euro-Rate Option for any Loans; and (ii) on
the proposed Borrowing Date with respect to the making of a Revolving Credit
Loan to which the Base Rate Option applies or the last day of the preceding
Interest Period with respect to the conversion to the Base Rate Option for any
Loan, of a duly completed request therefor substantially in the form of Exhibit
2.5 or a request by telephone immediately confirmed in writing by letter,
facsimile or telex in such form (each, a "Loan Request"), it being understood
that the Agent may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date; (ii) the aggregate amount of the proposed Loans
comprising each Borrowing Tranche, which shall be in integral multiples of
$100,000 and not less than $2,000,000 for each Borrowing Tranche to which the
Euro-Rate Option applies and not less than the lesser of $100,000 or the maximum
amount available for Borrowing Tranches to which the Base Rate Option applies;
(iii) whether the Euro-Rate Option or Base Rate Option shall apply to the
proposed Loans comprising the applicable Borrowing Tranche; and (iv) in the case
of a Borrowing Tranche to which the Euro-Rate Option applies, an appropriate
Interest Period for the Loans comprising such Borrowing Tranche.
2.6 Making Revolving Credit Loans.
The Agent shall, promptly after receipt by it of a Loan Request
pursuant to Section 2.5 [Revolving Credit Loan Requests], notify the Banks of
its receipt of such Loan Request specifying: (i) the proposed Borrowing Date and
the time and method of disbursement of the Revolving Credit Loans requested
thereby; (ii) the amount and type of each such Revolving Credit Loan and the
applicable Interest Period (if any); and (iii) the apportionment among the Banks
of such Revolving Credit Loans as determined by the Agent in accordance with
Section 2.2 [Nature of Banks' Obligations]. Each Bank shall remit the principal
amount of each Revolving Credit Loan to the Agent such that the Agent is able
to, and the Agent shall, to the extent the Banks have made funds available to it
for such purpose and subject to Section 7.2 [Each Additional Loan], fund such
Revolving Credit Loans to the Borrower in U.S. Dollars and immediately available
funds at the Principal Office prior to 2:00 p.m., Eastern time, on the
applicable Borrowing Date, provided that if any Bank fails to remit such funds
to the Agent in a timely manner, the Agent may elect in its sole discretion to
fund with its own funds the Revolving Credit Loans of such Bank on such
Borrowing Date, and such Bank shall be subject to the repayment obligation in
Section 10.16 [Availability of Funds].
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2.7 Revolving Credit Notes.
The Obligation of the Borrower to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Bank, together
with interest thereon, shall be evidenced by a Revolving Credit Note dated the
Closing Date payable to the order of such Bank in a face amount equal to the
Revolving Credit Commitment of such Bank.
2.8 Use of Proceeds.
The proceeds of the Revolving Credit Loans shall be used in
accordance with Section 8.1.10 [Use of Proceeds].
2.9 Letter of Credit Subfacility.
2.9.1 Issuance of Letters of Credit.
Borrower may request the issuance of a letter of credit (each
a "Letter of Credit") on behalf of itself or another Loan Party by delivering to
the Agent a completed application and agreement for letters of credit in such
form as the Agent may specify from time to time by no later than 10:00 a.m.,
Eastern time, at least three (3) Business Days, or such shorter period as may be
agreed to by the Agent, in advance of the proposed date of issuance. Each Letter
of Credit shall be either a Commercial Letter of Credit or a Standby Letter of
Credit. Subject to the terms and conditions hereof and in reliance on the
agreements of the other Banks set forth in this Section 2.9, the Agent will
issue a Letter of Credit provided that each Letter of Credit shall (A) have a
maximum maturity of twelve (12) months from the date of issuance, and (B) in no
event expire later than ten (10) Business Days prior to the Expiration Date and
providing that in no event shall (i) the Letters of Credit Outstanding exceed,
at any one time, $2,000,000 or (ii) the Revolving Facility Usage exceed, at any
one time, the Revolving Credit Commitments.
2.9.2 Letter of Credit Fees.
(a) The Borrower shall pay to the Agent a fronting fee with
respect to each Letter of Credit in an amount equal to .125% of the face amount
of such Letter of Credit. Such fronting fee shall be payable in advance on the
date of issuance of each Letter of Credit and shall be nonrefundable.
(b) The Borrower shall pay to the Agent, for the ratable
account of the Banks, a letter of credit commission with respect to each Standby
Letter of Credit, computed for the period from the date of such payment to the
date upon which the next such payment is due hereunder at the rate equal to the
Applicable Margin for Eurodollar Loans then in effect, calculated on the basis
of the actual days elapsed over a 360 day year, of the aggregate amount
available to be drawn under such Standby Letter of Credit on the date on which
such fee is calculated. Such commissions shall be payable in advance on the date
of issuance of each Standby Letter of Credit and on each L/C Fee Payment Date to
occur thereafter and shall be nonrefundable.
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(c) In addition, the Borrower shall pay to the Agent for the
Agent's sole account the Agent's then in effect customary fees and
administrative expenses payable with respect to the Letters of Credit as the
Agent may generally charge or incur from time to time in connection with the
issuance, maintenance, modification (if any), assignment or transfer (if any),
negotiation, and administration of Letters of Credit.
2.9.3 Disbursements, Reimbursement.
2.9.3.1 Immediately upon the Issuance of each Letter of
Credit, each Bank with a Revolving Credit Commitment shall be deemed to, and
hereby irrevocably and unconditionally agrees to, purchase from the Agent a
participation in such Letter of Credit and each drawing thereunder in an amount
equal to such Bank's Ratable Share of the maximum amount available to be drawn
under such Letter of Credit and the amount of such drawing, respectively.
2.9.3.2 In the event of any request for a drawing under
a Letter of Credit by the beneficiary or transferee thereof, the Agent will
promptly notify the Borrower. Provided that it shall have received such notice,
the Borrower shall reimburse (such obligation to reimburse the Agent shall
sometimes be referred to as a "Reimbursement Obligation") the Agent prior to
12:00 noon, Eastern time on each date that an amount is paid by the Agent under
any Letter of Credit (each such date, an "Drawing Date") in an amount equal to
the amount so paid by the Agent. In the event the Borrower fails to reimburse
the Agent for the full amount of any drawing under any Letter of Credit by 12:00
noon, Eastern time, on the Drawing Date, the Agent will promptly notify each
Bank thereof, and the Borrower shall be deemed to have requested that Revolving
Credit Loans be made by the Banks under the Base Rate Option to be disbursed on
the Drawing Date under such Letter of Credit, subject to the amount of the
unutilized portion of the Revolving Credit Commitment and subject to the
conditions set forth in Section 7.2 [Each Additional Loan] other than any notice
requirements. Any notice given by the Agent pursuant to this Section 2.9.3.2 may
be oral if immediately confirmed in writing; provided that the lack of such an
immediate confirmation shall not affect the conclusiveness or binding effect of
such notice.
2.9.3.3 Each Bank shall upon any notice pursuant to
Section 2.9.3.2 make available to the Agent an amount in immediately available
funds equal to its Ratable Share of the amount of the drawing, whereupon the
participating Banks shall (subject to Section 2.9.3.4) each be deemed to have
made a Revolving Credit Loan under the Base Rate Option to the Borrower in that
amount. If any Bank so notified fails to make available to the Agent for the
account of the Agent the amount of such Bank's Ratable Share of such amount by
no later than 2:00 p.m., Eastern time on the Drawing Date, then interest shall
accrue on such Bank's obligation to make such payment, from the Drawing Date to
the date on which such Bank makes such payment (i) at a rate per annum equal to
the Federal Funds Effective Rate during the first three days following the
Drawing Date and (ii) at a rate per annum equal to the rate applicable to Loans
under the Revolving Credit Base Rate Option on and after the fourth day
following the Drawing Date. The Agent will promptly give notice of the
occurrence of the Drawing Date, but failure of the Agent to give any such notice
on the Drawing Date or in sufficient time to enable any Bank to effect such
payment on such date shall not relieve such Bank from its obligation under this
Section 2.9.3.3.
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2.9.3.4 With respect to any unreimbursed drawing that is
not converted into Revolving Credit Loans under the Base Rate Option to the
Borrower in whole or in part as contemplated by Section 2.9.3.2 because of the
Borrower's failure to satisfy the conditions set forth in Section 7.2 [Each
Additional Loan] other than any notice requirements or for any other reason, the
Borrower shall be deemed to have incurred from the Agent a Letter of Credit
Borrowing in the amount of such drawing. Such Letter of Credit Borrowing shall
be due and payable on demand (together with interest) and shall bear interest at
the rate per annum applicable to the Revolving Credit Loans under the Base Rate
Option. Each Bank's payment to the Agent pursuant to Section 2.9.3.3 shall be
deemed to be a payment in respect of its participation in such Letter of Credit
Borrowing and shall constitute a Participation Advance from such Bank in
satisfaction of its participation obligation under this Section 2.9.3.
2.9.4 Repayment of Participation Advances.
2.9.4.1 Upon (and only upon) receipt by the Agent for
its account of immediately available funds from the Borrower (i) in
reimbursement of any payment made by the Agent under the Letter of Credit with
respect to which any Bank has made a Participation Advance to the Agent, or (ii)
in payment of interest on such a payment made by the Agent under such a Letter
of Credit, the Agent will pay to each Bank, in the same funds as those received
by the Agent, the amount of such Bank's Ratable Share of such funds, except the
Agent shall retain the amount of the Ratable Share of such funds of any Bank
that did not make a Participation Advance in respect of such payment by Agent.
2.9.4.2 If the Agent is required at any time to return
to any Loan Party, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by any
Loan Party to the Agent pursuant to Section 2.9.4.1 in reimbursement of a
payment made under the Letter of Credit or interest or fee thereon, each Bank
shall, on demand of the Agent, forthwith return to the Agent the amount of its
Ratable Share of any amounts so returned by the Agent plus interest thereon from
the date such demand is made to the date such amounts are returned by such Bank
to the Agent, at a rate per annum equal to the Federal Funds Effective Rate in
effect from time to time.
2.9.5 Documentation.
Each Loan Party agrees to be bound by the terms of the Agent's
application and agreement for letters of credit and the Agent's written
regulations and customary practices relating to letters of credit, though such
interpretation may be different from the such Loan Party's own. In the event of
a conflict between such application or agreement and this Agreement, this
Agreement shall govern. It is understood and agreed that, except in the case of
gross negligence or willful misconduct, the Agent shall not be liable for any
error, negligence and/or mistakes, whether of omission or commission, in
following any Loan Party's instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.
2.9.6 Determinations to Honor Drawing Requests.
In determining whether to honor any request for drawing under
any Letter of Credit by the beneficiary thereof, the Agent shall be responsible
only to determine that the
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documents and certificates required to be delivered under such Letter of Credit
have been delivered and that they comply on their face with the requirements of
such Letter of Credit.
2.9.7 Nature of Participation and Reimbursement Obligations.
The Obligations of the Borrower to reimburse the Agent upon a
draw under a Letter of Credit, shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms of this Section 2.9
under all circumstances, including the following circumstances:
(i) any set-off, counterclaim, recoupment, defense or
other right which such Bank may have against the Agent, the Borrower or any
other Person for any reason whatsoever;
(ii) the failure of any Loan Party or any other Person
to comply, in connection with a Letter of Credit Borrowing, with the conditions
set forth in Section 2.1 [Revolving Credit Commitments], 2.5 [Revolving Credit
Loan Requests], 2.6 [Making Revolving Credit Loans] or 7.2 [Each Additional
Loan] or as otherwise set forth in this Agreement for the making of a Revolving
Credit Loan, it being acknowledged that such conditions are not required for the
making of a Letter of Credit Borrowing and the obligation of the Banks to make
Participation Advances under Section 2.9.3;
(iii) any lack of validity or enforceability of any
Letter of Credit;
(iv) the existence of any claim, set-off, defense or
other right which any Loan Party or any Bank may have at any time against a
beneficiary or any transferee of any Letter of Credit (or any Persons for whom
any such transferee may be acting), the Agent or any Bank or any other Person
or, whether in connection with this Agreement, the transactions contemplated
herein or any unrelated transaction (including any underlying transaction
between any Loan Party or Subsidiaries of a Loan Party and the beneficiary for
which any Letter of Credit was procured);
(v) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(vi) payment by the Agent under any Letter of Credit
against presentation of a demand, draft or certificate or other document which
does not comply with the terms of such Letter of Credit;
(vii) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any Loan
Party or Subsidiaries of a Loan Party;
(viii) any breach of this Agreement or any other Loan
Document by any party thereto;
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(ix) the occurrence or continuance of an Insolvency
Proceeding with respect to any Loan Party;
(x) the fact that an Event of Default or a Potential
Default shall have occurred and be continuing;
(xi) the fact that the Expiration Date shall have passed
or this Agreement or the Commitments hereunder shall have been terminated; and
(xii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.
2.9.8 Indemnity.
In addition to amounts payable as provided in Section 10.5
[Reimbursement of Agent by Borrower, Etc.], the Borrower hereby agrees to
protect, indemnify, pay and save harmless the Agent from and against any and all
claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which the Agent may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of Credit,
other than as a result of (A) the gross negligence or willful misconduct of the
Agent as determined by a final judgment of a court of competent jurisdiction or
(B) subject to the following clause (ii), the wrongful dishonor by the Agent of
a proper demand for payment made under any Letter of Credit, or (ii) the failure
of the Agent to honor a drawing under any such Letter of Credit as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
2.9.9 Liability for Acts and Omissions.
As between any Loan Party and the Agent, such Loan Party
assumes all risks of the acts and omissions of, or misuse of the Letters of
Credit by, the respective beneficiaries of such Letters of Credit. In
furtherance and not in limitation of the foregoing, the Agent shall not be
responsible for: (i) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any document submitted by any party in connection with the
application for an issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged (even if the Agent shall have been notified thereof); (ii)
the validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any such Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason; (iii) the failure of the beneficiary
of any such Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of any Loan Party against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party and any beneficiary of any Letter of Credit or
any such transferee; (iv) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they be in cipher; (v) errors in interpretation of
technical terms; (vi) any loss or
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delay in the transmission or otherwise of any document required in order to make
a drawing under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of the Agent, including any Governmental Acts,
and none of the above shall affect or impair, or prevent the vesting of, any of
the Agent's rights or powers hereunder. Nothing in the preceding sentence shall
relieve the Agent from liability for the Agent's gross negligence or willful
misconduct in connection with actions or omissions described in such clauses (i)
through (viii) of such sentence.
In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Agent
under or in connection with the Letters of Credit issued by it or any documents
and certificates delivered thereunder, if taken or omitted in good faith, shall
not put the Agent under any resulting liability to the Borrower or any Bank.
2.10 Extension by Banks of the Expiration Date.
2.10.1 Requests; Approval by All Banks.
Upon or promptly after delivery by the Borrower of the annual
financial statements to be provided under Section 8.3.3 [Annual Financial
Statements] for the fiscal year ending March 31, 2000 or any subsequent fiscal
year, the Borrower may request a one-year extension of the Expiration Date, for
a maximum extension period of two years, by written notice to the Banks, and the
Banks agree to respond to the Borrower's request for an extension by the later
of sixty (60) days following receipt of the request; provided, however, that (i)
the failure of any Bank to respond within such time period shall not in any
manner constitute an agreement by such Bank to extend the Expiration Date and
(ii) in no event shall the Expiration Date be extended beyond June 30, 2004. If
all Banks elect to extend, the Expiration Date shall be extended for a period of
one year. If one or more Banks decline to extend or do not respond to Borrower's
request, the provisions of Section 2.10.2 shall apply.
2.10.2 Approval by Required Banks.
In the event that one or more Banks do not agree to extend the
Expiration Date or do not respond to Borrower's request for an extension within
the time required under Section 2.10.1 (each a "Bank to be Terminated"), but the
Required Banks agree to such extension within such time, then the Banks which
have agreed to such extension within the time required under Section 2.10.1
(each an "Extending Bank") may, with the prior written approval of the Borrower
and the Agent, arrange to have one or more other banks (each an "Assignee Bank")
purchase all of the outstanding Loans, if any, of the Bank to be Terminated and
succeed to and assume the Commitments and all other rights, interests and
obligations of the Bank to be Terminated under this Agreement and the other Loan
Documents. Any such purchase and assumption shall be (1) pursuant to an
Assignment and Assumption Agreement, (2) subject to and in accordance with
Section 11.11 [Successors and Assigns], and (3) effective on the last day of the
Interest Period if any Loans are outstanding under the Euro-Rate Option. The
Borrower shall pay all amounts due and payable to the Bank to be Terminated on
the effective date of such Assignment and Assumption Agreement. In the event
that the Agent shall become a Bank to be Terminated, the provisions of this
Section 2.10 shall be subject to Section 10.14 [Successor
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Agent]. In the event that the Loans and Commitments of a Bank to be Terminated
are not fully assigned and assumed pursuant to Section 2.10.2, then the
Expiration Date shall not be extended for any Bank.
3. TERM LOANS
3.1 Term Loan Commitments.
Subject to the terms and conditions hereof, and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make a term loan to the Borrower on the Closing Date in such principal amount as
the Borrower shall request up to, but not exceeding, such Bank's Term Loan A
Commitment, Term Loan A-1 Commitment or Term Loan B Commitment (each such Term
Loan being referred to herein as a "Term Loan A Loan", "Term Loan A-1 Loan" or a
"Term Loan B Loan", as the case may be).
3.2 Nature of Banks' Obligations with Respect to Term Loans.
Schedule 1 hereto contains an allocation for each Bank of (i) the
amount of its Commitment representing its Term Loan A Commitment, (ii) the
amount of its Commitment representing its Term Loan A-1 Commitment and (iii) the
amount of its Commitment representing its Term Loan B Commitment. The Loan
Parties, the Agent and the Banks have approved all such allocations. The failure
of any Bank to make a Term Loan shall not relieve any other Bank of its
obligations to make a Term Loan nor shall it impose any additional liability on
any other Bank hereunder. The Banks shall have no obligation to make Term Loans
hereunder after the Closing Date. The Term Loan Commitments are not revolving
credit commitments, and the Borrower shall not have the right to borrow, repay
and reborrow under Section 3.1 [Term Loan Commitments].
3.3 Maturity
The Term Loan A Loan's shall be repaid in their entirety, together
with all interest accrued thereon on June 30, 2004 (the "Term Loan A Maturity
Date"), unless due earlier by acceleration, prepayment or otherwise.
The Term Loan A-1 Loan's shall be repaid in their entirety, together
with all interest accrued thereon on June 30, 2004 (the "Term Loan A-1 Maturity
Date"), unless due earlier by acceleration, prepayment or otherwise.
The Term Loan B Loan's shall be repaid in their entirety, together
with all interest accrued thereon on June 14, 2005 (the "Term Loan B Maturity
Date"), unless due earlier by acceleration, prepayment or otherwise.
3.4 Term Loan Notes.
The Obligation of the Borrower to repay the unpaid principal amount
of the Term Loans made to it by each Bank, together with interest thereon, shall
be evidenced by a Term Note dated the Closing Date payable to the order of each
Bank in a face amount equal to the Term
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Loan of such Bank. Each Term Note shall (a) be dated the Closing Date, (b) be
stated to mature in installments in amounts equal to such Bank's Ratable Share
of the Term Loan Commitment of the amounts, and payable on the dates, set forth
on Schedule 2.2(A), Schedule 2.2(A-1) and Schedule 2.2(B), as the case may be,
and (c) bear interest for the period from the date thereof on the unpaid
principal amount thereof at the applicable interest rates per annum specified in
Section 4. Interest on the Term Notes shall be payable on the dates specified in
Section 5.3.
3.5 Use of Proceeds.
The proceeds of the Term Loans shall be used in accordance with
Section 8.1.10 [Use of Proceeds].
3.6 Term Loan Amendment Fees.
The Borrower agrees to pay on the Closing Date to the Agent for the
account of each Bank, as consideration for such Bank's Term Loan A Commitment,
Term Loan A-1 Commitment and Term Loan B Commitment, as applicable,
nonrefundable amendment fees, as more particularly described on Schedule 2.4.
4. INTEREST RATES
4.1 Interest Rate Options.
The Borrower shall pay interest in respect of the outstanding unpaid
principal amount of the Loans as selected by it from the Base Rate Option or
Euro-Rate Option set forth below applicable to the Loans, it being understood
that, subject to the provisions of this Agreement, the Borrower may select
different Interest Rate Options and different Interest Periods to apply
simultaneously to the Loans comprising different Borrowing Tranches and may
convert to or renew one or more Interest Rate Options with respect to all or any
portion of the Loans comprising any Borrowing Tranche, provided that there shall
not be at any one time outstanding more than five (5) Borrowing Tranches in the
aggregate among all of the Loans. If at any time the designated rate applicable
to any Loan made by any Bank exceeds such Bank's highest lawful rate, the rate
of interest on such Bank's Loan shall be limited to such Bank's highest lawful
rate.
4.1.1 Revolving Credit Interest Rate Options.
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Revolving Credit Loans:
(i) Revolving Credit Base Rate Option: A fluctuating
rate per annum (computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed) equal to the Base Rate plus the Applicable
Margin, such interest rate to change automatically from time to time effective
as of the effective date of each change in the Base Rate; or
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(ii) Revolving Credit Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to
the Euro-Rate plus the Applicable Margin.
4.1.2 Term Loan Interest Rate Options.
The Borrower shall have the right to select from the following
Interest Rate Options applicable to the Term Loans:
(i) Term Loan Base Rate Option: A fluctuating rate per
annum (computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed) equal to the Base Rate plus the Applicable Margin, such
interest rate to change automatically from time to time effective as of the
effective date of each change in the Base Rate; or
(ii) Term Loan Euro-Rate Option: A rate per annum
(computed on the basis of a year of 360 days and actual days elapsed) equal to
the Euro-Rate plus the Applicable Margin.
4.1.3 Rate Quotations.
The Borrower may call the Agent on or before the date on which
a Loan Request is to be delivered to receive an indication of the rates then in
effect, but it is acknowledged that such projection shall not be binding on the
Agent or the Banks nor affect the rate of interest which thereafter is actually
in effect when the election is made.
4.2 Interest Periods.
At any time when the Borrower shall select, convert to or renew a
Euro-Rate Option, the Borrower shall notify the Agent thereof at least three (3)
Business Days prior to the effective date of such Euro-Rate Option by delivering
a Loan Request. The notice shall specify an interest period (the "Interest
Period") during which such Interest Rate Option shall apply, such Interest
Period to be (i) one Month if Borrower selects the Euro-Rate Option during the
Syndications Period and (ii) one, two, three or six Months if Borrower selects
the Euro-Rate Option after the Syndications Period has ended. Notwithstanding
the preceding sentence, the following provisions shall apply to any selection
of, renewal of, or conversion to a Euro-Rate Option:
4.2.1 Ending Date and Business Day.
any Interest Period which would otherwise end on a date which
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in the next calendar month, in which case such
Interest Period shall end on the next preceding Business Day;
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4.2.2 Amount of Borrowing Tranche.
each Borrowing Tranche of Euro-Rate Loans shall be in integral
multiples of $100,000 and not less than $2,000,000;
4.2.3 Termination Before Expiration Date.
the Borrower shall not select, convert to or renew an Interest
Period for any portion of the Loans that would end after the Expiration Date;
and
4.2.4 Renewals.
in the case of the renewal of a Euro-Rate Option at the end of
an Interest Period, the first day of the new Interest Period shall be the last
day of the preceding Interest Period, without duplication in payment of interest
for such day.
4.3 Interest After Default.
To the extent permitted by Law, upon the occurrence of an Event of
Default and until such time such Event of Default shall have been cured or
waived:
4.3.1 Interest Rate, Other Obligations.
the rate of interest for each Loan otherwise applicable
pursuant to 4.1 [Interest Rate Options] shall be increased by 2.0% per annum and
each other Obligation hereunder if not paid when due shall bear interest at a
rate per annum equal to the sum of the rate of interest applicable under the
Revolving Credit Base Rate Option or Term Loan Base Rate Option, as the case may
be, plus an additional 2.0% per annum from the time such Obligation becomes due
and payable and until it is paid in full.
4.3.2 Acknowledgment.
The Borrower acknowledges that the increase in rates referred
to in this Section 4.3 reflects, among other things, the fact that such Loans or
other amounts have become a substantially greater risk given their default
status and that the Banks are entitled to additional compensation for such risk;
and all such interest shall be payable by Borrower upon demand by Agent.
4.4 Euro-Rate Unascertainable; Illegality; Increased Costs; Deposits
Not Available.
4.4.1 Unascertainable.
If on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined that:
(i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or
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(ii) a contingency has occurred which materially and
adversely affects the London interbank eurodollar market relating to the
Euro-Rate, the Agent shall have the rights specified in Section 4.4.3.
4.4.2 Illegality; Increased Costs; Deposits Not Available.
If at any time any Bank shall have determined that:
(i) the making, maintenance or funding of any Loan to
which a Euro-Rate Option applies has been made impracticable or unlawful by
compliance by such Bank in good faith with any Law or any interpretation or
application thereof by any Official Body or with any request or directive of any
such Official Body (whether or not having the force of Law), or
(ii) such Euro-Rate Option will not adequately and
fairly reflect the cost to such Bank of the establishment or maintenance of any
such Loan, or
(iii) after making all reasonable efforts, deposits of
the relevant amount in Dollars for the relevant Interest Period for a Loan to
which a Euro-Rate Option applies, respectively, are not available to such Bank
with respect to such Loan, in the London interbank market, then the Agent shall
have the rights specified in Section 4.4.3.
4.4.3 Agent's and Bank's Rights.
In the case of any event specified in Section 4.4.1 above, the
Agent shall promptly so notify the Banks and the Borrower thereof, and in the
case of an event specified in Section 4.4.2 above, such Bank shall promptly so
notify the Agent and endorse a certificate to such notice as to the specific
circumstances of such notice, and the Agent shall promptly send copies of such
notice and certificate to the other Banks and the Borrower. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the obligation of (A) the Banks, in the case of such notice
given by the Agent, or (B) such Bank, in the case of such notice given by such
Bank, to allow the Borrower to select, convert to or renew a Euro-Rate Option
shall be suspended until the Agent shall have later notified the Borrower, or
such Bank shall have later notified the Agent, of the Agent's or such Bank's, as
the case may be, determination that the circumstances giving rise to such
previous determination no longer exist. If at any time the Agent makes a
determination under Section 4.4.1 and the Borrower has previously notified the
Agent of its selection of, conversion to or renewal of a Euro-Rate Option and
such Interest Rate Option has not yet gone into effect, such notification shall
be deemed to provide for selection of, conversion to or renewal of the Base Rate
Option otherwise available with respect to such Loans. If any Bank notifies the
Agent of a determination under Section 4.4.2, the Borrower shall, subject to the
Borrower's indemnification Obligations under Section 5.6.2 [Indemnity], as to
any Loan of the Bank to which a Euro-Rate Option applies, on the date specified
in such notice either convert such Loan to the Base Rate Option otherwise
available with respect to such Loan or prepay such Loan in accordance with
Section 5.4 [Voluntary Prepayments]. Absent due notice from the Borrower of
conversion or prepayment, such Loan shall automatically be converted to the Base
Rate Option otherwise available with respect to such Loan upon such specified
date.
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4.5 Selection of Interest Rate Options.
If the Borrower fails to select a new Interest Period to apply to
any Borrowing Tranche of Loans under the Euro-Rate Option at the expiration of
an existing Interest Period applicable to such Borrowing Tranche in accordance
with the provisions of Section 4.2 [Interest Periods], the Borrower shall be
deemed to have converted such Borrowing Tranche to the Revolving Credit Base
Rate Option or Term Loan Base Rate Option, as applicable, commencing upon the
last day of the existing Interest Period.
5. PAYMENTS
5.1 Payments.
All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Agent's Fee, closing fees or
other fees or amounts due from the Borrower hereunder shall be payable prior to
11:00 a.m., Eastern time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrower, and without set-off, counterclaim or other deduction of any nature,
and an action therefor shall immediately accrue. Such payments shall be made to
the Agent at the Principal Office for the ratable accounts of the Banks with
respect to the Loans in U.S. Dollars and in immediately available funds, and the
Agent shall promptly distribute such amounts to the Banks in immediately
available funds, provided that in the event payments are received by 11:00 a.m.,
Eastern time, by the Agent with respect to the Loans and such payments are not
distributed to the Banks on the same day received by the Agent, the Agent shall
pay the Banks the Federal Funds Effective Rate with respect to the amount of
such payments for each day held by the Agent and not distributed to the Banks.
The Agent's and each Bank's statement of account, ledger or other relevant
record shall, in the absence of manifest error, be conclusive as the statement
of the amount of principal of and interest on the Loans and other amounts owing
under this Agreement and shall be deemed an "account stated."
5.2 Pro Rata Treatment of Banks.
Each borrowing shall be allocated to each Bank according to its
Ratable Share, and each selection of, conversion to or renewal of any Interest
Rate Option and each payment or prepayment by the Borrower with respect to
principal, interest, Commitment Fees, Letter of Credit Fees, closing fees, or
other fees (except for the Agent's Fee) or amounts due from the Borrower
hereunder to the Banks with respect to the Loans, shall (except as provided in
Section 4.4.3 [Agent's and Bank's Rights] in the case of an event specified in
Section 4.4 [Euro-Rate Unascertainable; Etc.], 5.4.2 [Replacement of a Bank] or
5.6 [Additional Compensation in Certain Circumstances]) be made in proportion to
the applicable Loans outstanding from each Bank and, if no such Loans are then
outstanding, in proportion to the Ratable Share of each Bank.
5.3 Interest Payment Dates.
Interest on Loans to which the Base Rate Option applies shall be due
and payable in arrears on September 30, December 31, March 31 and June 30 of
each year after the date hereof and on the Expiration Date or upon acceleration
of the Notes. Interest on Loans to which
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the Euro-Rate Option applies shall be due and payable on the last day of each
Interest Period for those Loans and, if such Interest Period is longer than
three (3) Months, also on the 90th day of such Interest Period. Interest on
mandatory prepayments of principal under Section 5.5 [Mandatory Prepayments]
shall be due on the date such mandatory prepayment is due. Interest on the
principal amount of each Loan or other monetary Obligation shall be due and
payable on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated maturity date, upon acceleration
or otherwise).
5.4 Voluntary Prepayments.
5.4.1 Right to Prepay.
The Borrower shall have the right at its option from time to
time to prepay the Loans in whole or part without premium or penalty (except as
provided in Section 5.4.2 below or in Section 5.6 [Additional Compensation in
Certain Circumstances]):
(i) at any time with respect to any Loan to which the
Base Rate Option applies,
(ii) on the last day of the applicable Interest Period
with respect to Loans to which a Euro-Rate Option applies,
(iii) on the date specified in a notice by any Bank
pursuant to Section 4.4 [Euro-Rate Unascertainable, Etc.] with respect to any
Loan to which a Euro-Rate Option applies.
Whenever the Borrower desires to prepay any part of the Loans,
it shall provide a prepayment notice to the Agent and the Banks by 1:00 p.m. at
least three (3) Business Days prior to the date of prepayment of Loans setting
forth the following information:
(x) the date, which shall be a Business Day, on which the
proposed prepayment is to be made;
(y) a statement indicating the application of the prepayment
between the Revolving Credit Loans and the Term Loans in accordance
with the terms hereof; and
(z) the total principal amount of such prepayment, which
shall, in the case of Revolving Credit Loans, not be less than
$1,000,000 and, in the case of Term Loans, not be less than
$250,000.
All prepayment notices shall be irrevocable. The principal
amount of the Loans for which a prepayment notice is given, together with
interest on such principal amount except with respect to Loans to which the Base
Rate Option applies, shall be due and payable on the date specified in such
prepayment notice as the date on which the proposed prepayment is to be made.
All Term Loan prepayments permitted pursuant to this Section 5.4.1 shall be
applied to the unpaid installments of principal of the Term Loans prorata as
between Term Loan A Loans, Term Loan A-1 Loans and Term Loan B Loans and prorata
to all remaining payments, provided
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that if any holder of the Term Loan B Loans shall elect, by written notice to
the Agent and the Borrower, to reject any portion of such proposed prepayment,
the rejected portion of the proposed prepayment shall be applied first to the
unpaid installments of principal of the Term Loan A Loans or the Term A-1 Loans,
at the option of the Borrower, pro rata relative to the then remaining payments
on such Term Loan A Loans, as applicable, until all the Term Loan A Loans and
the Term Loan A-1 Loans have been paid in full, and second to the unpaid
installments of principal of the Term Loan B Loans, pro rata, until paid in
full. Except as provided in Section 4.4.3 [Agent's and Bank's rights], if the
Borrower prepays a Loan but fails to specify the applicable Borrowing Tranche
which the Borrower is prepaying, the prepayment shall be applied (i) first to
Revolving Credit Loans, and then to the Term Loans on a pro-rata basis; and (ii)
after giving effect to the allocations in clause (i) above and in the preceding
sentence, first to Loans to which the Base Rate Option applies, then to Loans to
which the Euro-Rate the Option applies. Any prepayment hereunder shall be
subject to the Borrower's Obligation to indemnify the Banks under Section 5.6.2
[Indemnity].
5.4.2 Replacement of a Bank.
In the event any Bank (i) gives notice under Section 4.4
[Euro-Rate Unascertainable, Etc.] or Section 5.6.1 [Increased Costs, Etc.], (ii)
does not fund Revolving Credit Loans because the making of such Loans would
contravene any Law applicable to such Bank, (iii) does not approve any action as
to which consent of the Required Banks is requested by the Borrower and obtained
hereunder, or (iv) becomes subject to the control of an Official Body (other
than normal and customary supervision), then the Borrower shall have the right
at its option, with the consent of the Agent, which shall not be unreasonably
withheld, to prepay the Loans of such Bank in whole, together with all interest
accrued thereon, and terminate such Bank's Commitment within ninety (90) days
after (w) receipt of such Bank's notice under Section 4.4 [Euro-Rate
Unascertainable, Etc.] or 5.6.1 [Increased Costs, Etc.], (x) the date such Bank
has failed to fund Revolving Credit Loans because the making of such Loans would
contravene Law applicable to such Bank, (y) the date of obtaining the consent
which such Bank has not approved, or (z) the date such Bank became subject to
the control of an Official Body, as applicable; provided that the Borrower shall
also pay to such Bank at the time of such prepayment any amounts required under
Section 5.6 [Additional Compensation in Certain Circumstances] and any accrued
interest due on such amount and any related fees; provided, however, that the
Commitment and any Term Loan of such Bank shall be provided by one or more of
the remaining Banks or a replacement bank acceptable to the Agent; provided,
further, the remaining Banks shall have no obligation hereunder to increase
their Commitments. Notwithstanding the foregoing, the Agent may only be replaced
subject to the requirements of Section 10.14 [Successor Agent] and provided that
all Letters of Credit have expired or been terminated or replaced.
5.4.3 Change of Lending Office.
Each Bank agrees that upon the occurrence of any event giving
rise to increased costs or other special payments under Section 4.4.2
[Illegality, Etc.] or 5.6.1 [Increased Costs, Etc.] with respect to such Bank,
it will if requested by the Borrower, use reasonable efforts (subject to overall
policy considerations of such Bank) to designate another lending office for any
Loans or Letters of Credit affected by such event, provided that such
designation is made on such
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terms that such Bank and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section. Nothing is this Section
5.4.3 shall affect or postpone any of the Obligations of the Borrower or any
other Loan Party or the rights of the Agent or any Bank provided in this
Agreement.
5.5 Mandatory Prepayments.
5.5.1 Excess Cash Flow.
Within five (5) Business Days of delivery of the Borrower's
annual financial statements pursuant to Section 8.3.3 [Annual Financial
Statements], but in any event no later than July 5 of each year during the term
hereof (each, a "Mandatory Prepayment Date"), the Borrower shall make a
mandatory prepayment of principal on the Term Loans equal to 75% of Excess Cash
Flow for the immediately preceding fiscal year, beginning on July 1, 2000 and
continuing on each July 1 thereafter for the immediately preceding fiscal year
or portion thereof, together with accrued interest on such principal amount
(each, a "Mandatory Prepayment of Excess Cash Flow") until the Loan Parties
Leverage Ratio, calculated as of the Mandatory Prepayment Date for the fiscal
year then ended, shall be less than 2.00 to 1 for such year of determination. At
such time as the Loan Parties Leverage Ratio, determined in accordance with this
Section 5.5.1, is less than 2.00 to 1 for such year, mandatory prepayments of
principal on the Term Loans shall equal 50% of Excess Cash Flow for the
immediately preceding fiscal year or portion thereof, together with accrued
interest on such principal amount. Each Mandatory Prepayment of Excess Cash Flow
shall be applied to payment in full of the principal amount of the Term Loans by
application to the unpaid installments of principal prorata (without giving
effect to any voluntary prepayments made on any Term Loan A Loans during the
preceding fiscal year) to all remaining payments. To the extent that a Mandatory
Prepayment of Excess Cash Flow exceeds the outstanding principal amount of the
Term Loans, such prepayment shall be limited to the amount necessary to prepay
the Term Loans in full.
5.5.2 Sale of Assets.
(a) Within five (5) Business Days of any sale of assets
authorized by Section 8.2.7(v) [Disposition of Assets or Subsidiaries]
(including, without limitation, but subject to clause (b) of this Section 5.5.2,
insurance proceeds paid as a result of any destruction, casualty or taking of
any property of the Borrower or any Subsidiary and the proceeds of key man life
insurance required by the terms hereof), the Borrower shall make a mandatory
prepayment of principal on the Term Loan A Loans and the Term Loan B Loans equal
to the Net Proceeds of such sale (as estimated in good faith by the Borrower),
together with accrued interest on such principal amount. All prepayments
pursuant to this Section 5.5.2 shall be applied to payment in full of the
principal amount of the Term Loans by application to the unpaid installments of
principal prorata to all remaining payments.
(b) Net Proceeds received by the Borrower or any Subsidiary as
proceeds of insurance upon any destruction, casualty or taking with respect to
any property of the Borrower or any Subsidiary need not be applied as set forth
in clause (a) of this Section 5.5.2 to the extent that such Net Proceeds are
applied to the repair, rebuilding or replacement of the
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property which was the subject of such destruction, casualty or taking within 60
days after the receipt of such Net Proceeds. If required by the Agent, such Net
Proceeds shall be held in a special collateral account, subject to the sole
dominion and control of the Agent and in a manner reasonably satisfactory to the
Agent, as additional Collateral for the Obligations and the Subsidiaries
Guarantee, until such time as it is to be applied to such repair, rebuilding or
replacement.
5.5.3 Sale or Issuance of Debt or Equity Securities
Unless the Required Banks otherwise agree, the Borrower shall
prepay the Loans and reduce the Commitments in an amount equal to (i) 100% of
the Net Proceeds of any sale or issuance of debt securities, and 75% of the Net
Proceeds of any sale or issuance of any equity securities in either case by the
Borrower or any Subsidiary, whether in a public offering, a private placement or
otherwise, in any such case no later than three Business Days following receipt
by the Borrower or such Subsidiary of such proceeds, together with accrued
interest to such date on the amount prepaid. Amounts prepaid pursuant to this
5.5.3 shall be applied first to the Term Loan A Loans and the Term Loan B Loans,
pro rata, until paid in full, and second to the reduction of the Revolving
Credit Commitments and the prepayment of the Revolving Credit Loans and/or cash
collateralization of the Letters of Credit. Prepayments of installments of Term
Loans shall be applied in the inverse order of maturity and such amounts so
prepaid may not be reborrowed. Nothing in this Section 5.5.3 shall be construed
to derogate any restriction or limitation contained in any Loan Document imposed
on any transaction of the types described in this Section 5.5.3, including
without limitation the restrictions set forth in Section 8.2.1, 8.2.6 and 8.2.7
hereof.
5.5.4 Application Among Interest Rate Options.
All prepayments required pursuant to this Section 5.5 shall
first be applied among the Interest Rate Options to the principal amount of the
Loans subject to the Base Rate Option, then to Loans subject to a Euro-Rate
Option. In accordance with Section 5.6.2 [Indemnity], the Borrower shall
indemnify the Banks for any loss or expense, including loss of margin, incurred
with respect to any such prepayments applied against Loans subject to a
Euro-Rate Option on any day other than the last day of the applicable Interest
Period.
5.6 Additional Compensation in Certain Circumstances.
5.6.1 Increased Costs or Reduced Return Resulting from Taxes,
Reserves, Capital Adequacy Requirements, Expenses, Etc.
If any Law, guideline or interpretation or any change in any
Law, guideline or interpretation or application thereof by any Official Body
charged with the interpretation or administration thereof or compliance with any
request or directive (whether or not having the force of Law) of any central
bank or other Official Body:
(i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Notes, the Loans or payments by the
Borrower of principal, interest, Commitment Fees, or other amounts due from the
Borrower hereunder or under the Notes (except for taxes on the overall net
income of such Bank),
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(ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Bank, or
(iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended by,
any Bank, or (B) otherwise applicable to the obligations of any Bank under this
Agreement which is not otherwise included in the determination of the Eurodollar
Rate hereunder,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank with respect to this Agreement, the Notes or the making, maintenance or
funding of any part of the Loans (or, in the case of any capital adequacy or
similar requirement, to have the effect of reducing the rate of return on any
Bank's capital, taking into consideration such Bank's customary policies with
respect to capital adequacy) by an amount which such Bank in its sole discretion
deems to be material, such Bank shall from time to time notify the Borrower and
the Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank to be necessary to
compensate such Bank for such increase in cost, reduction of income, additional
expense or reduced rate of return. Such notice shall set forth in reasonable
detail the basis for such determination. Such amount shall be due and payable by
the Borrower to such Bank ten (10) Business Days after such notice is given.
5.6.2 Indemnity.
In addition to the compensation required by Section 5.6.1
[Increased Costs, Etc.], the Borrower shall indemnify each Bank against all
liabilities, losses or expenses (including loss of margin, any loss or expense
incurred in liquidating or employing deposits from third parties and any loss or
expense incurred in connection with funds acquired by a Bank to fund or maintain
Loans subject to a Euro-Rate Option) which such Bank sustains or incurs as a
consequence of any
(i) payment, prepayment, conversion or renewal of any
Loan to which a Euro-Rate Option applies on a day other than the last day of the
corresponding Interest Period (whether or not such payment or prepayment is
mandatory, voluntary or automatic and whether or not such payment or prepayment
is then due),
(ii) attempt by the Borrower to revoke (expressly, by
later inconsistent notices or otherwise) in whole or part any Loan Requests
under Section 2.5 [Revolving Credit Loan Requests] or Section 4.2 [Interest
Periods] or notice relating to prepayments under Section 5.4 [Voluntary
Prepayments], or
(iii) default by the Borrower in the performance or
observance of any covenant or condition contained in this Agreement or any other
Loan Document, including any failure of the Borrower to pay when due (by
acceleration or otherwise) any principal, interest, Commitment Fee or any other
amount due hereunder.
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If any Bank sustains or incurs any such loss or expense, it shall
from time to time notify the Borrower of the amount determined in good faith by
such Bank (which determination may include such assumptions, allocations of
costs and expenses and averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify such Bank for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrower to such Bank
ten (10) Business Days after such notice is given.
6. REPRESENTATIONS AND WARRANTIES
6.1 Representations and Warranties.
The Loan Parties, jointly and severally, represent and warrant to
the Agent and each of the Banks as follows (with the execution and delivery of
this Agreement and the making of each Loan thereafter being deemed to constitute
a representation and warranty that the matters specified in this Section 6 are
true and correct in all material respects both before and after giving effect to
the Transaction and the related transactions and as of the date of each such
Loan unless such representation and warranty expressly indicates that it is
being made as of any specific date):
6.1.1 Organization and Qualification.
Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in each
jurisdiction listed on Schedule 6.1.1 and in all other jurisdictions where the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary.
6.1.2 Capitalization and Ownership.
The authorized capital stock of the Borrower consists of (i)
10,000,000 shares of common stock of which 3,500,124 shares (referred to herein
as the "Common Shares") and (ii) 3,000,000 shares of preferred stock, of which
1,150,000 preferred shares (referred to herein as the "Preferred Shares") (the
Common Shares and the Preferred Shares are herein referred to as the "Shares")
are issued and outstanding and are owned as indicated on Schedule 6.1.2. All of
the Shares have been validly issued and are fully paid and nonassessable. There
are no options, warrants or other rights outstanding to purchase any such shares
except as indicated on Schedule 6.1.2.
6.1.3 Subsidiaries.
Schedule 6.1.3 states the name of each of the Borrower's
Subsidiaries, its jurisdiction of incorporation, its authorized capital stock,
the issued and outstanding shares (referred to herein as the "Subsidiary
Shares") and the owners thereof if it is a corporation, its outstanding
partnership interests (the "Partnership Interests") if it is a partnership and
its
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outstanding limited liability company interests, interests assigned to managers
thereof and the voting rights associated therewith (the "LLC Interests") if it
is a limited liability company, in each case as they exist on the Closing Date
after giving effect to the Transaction. The Borrower and each subsidiary of the
Borrower has good and marketable title to all of the Subsidiary Shares,
Partnership Interests and LLC Interests it purports to own, free and clear in
each case of any Lien. All Subsidiary Shares, Partnership Interests and LLC
Interests have been validly issued, and all Subsidiary Shares are fully paid and
nonassessable. All capital contributions and other consideration required to be
made or paid in connection with the issuance of the Partnership Interests and
LLC Interests have been made or paid, as the case may be. There are no options,
warrants or other rights outstanding to purchase any such Subsidiary Shares,
Partnership Interests or LLC Interests except as indicated on Schedule 6.1.3.
Xxxxxxx, Ajax, CPS Enterprises, Xxxxx, Xxxxx and CCC are each Wholly Owned
Subsidiaries of the Borrower. R&S and CPS Trailer are each Wholly Owned
Subsidiaries of Xxxxxxx. Ranor is a Wholly Owned Subsidiary of CCC. Noray and
Clayfort are each Wholly Owned Subsidiaries of Xxxxx. Xxxxx and Cabore are each
Wholly Owned Subsidiaries of Xxxxx. Denore is owned 50% by Noray and 50% by
Clayfort. Mecox is owned 50% by Kylan and 50% by Cabore.
6.1.4 Power and Authority; Business.
(a) Each Loan Party has full power to enter into, execute,
deliver and carry out this Agreement and the other Loan Documents to which it is
a party, to incur the Indebtedness contemplated by the Loan Documents and to
perform its Obligations under the Loan Documents to which it is a party, and all
such actions have been duly authorized by all necessary proceedings on its part.
(b) The Borrower was incorporated on January 2, 1997. Prior to
the Closing Date, the Borrower will not have engaged in any business or incurred
any liabilities except for activities, expenses and liabilities incident to its
organization, the acquisition and operation of Xxxxxxx, Ajax, CPS Enterprises,
Xxxxx, Xxxxx and CCC and to the carrying out of the transactions contemplated by
the Loan Documents. The Borrower's business is the ownership of all of the
capital stock of Xxxxxxx, Ajax, CPS Enterprises, Xxxxx, Xxxxx and CCC.
6.1.5 Validity and Binding Effect.
This Agreement has been duly and validly executed and
delivered by each Loan Party, and each other Loan Document which any Loan Party
is required to execute and deliver on or after the date hereof will have been
duly executed and delivered by such Loan Party on the required date of delivery
of such Loan Document. This Agreement and each other Loan Document constitutes,
or will constitute, legal, valid and binding obligations of each Loan Party
which is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.
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6.1.6 No Conflict.
Neither the execution and delivery of this Agreement or the
other Loan Documents by any Loan Party nor the consummation of the transactions
herein or therein contemplated or compliance with the terms and provisions
hereof or thereof by any of them will conflict with, constitute a default under
or result in any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents of any Loan Party or (ii) any Law (except to the
extent that the failure to comply therewith could not have a Material Adverse
Effect) or any material agreement or instrument or order, writ, judgment,
injunction or decree to which any Loan Party or any of its Subsidiaries is a
party or by which it or any of its Subsidiaries is bound or to which it is
subject, or result in the creation or enforcement of any Lien, charge or
encumbrance whatsoever upon any property (now or hereafter acquired) of any Loan
Party or any of its Subsidiaries (other than Liens granted under the Loan
Documents).
6.1.7 Litigation.
Except as described on Schedule 6.1.7, there are no actions,
suits, proceedings or investigations pending or, to the knowledge of any Loan
Party, threatened against such Loan Party or any Subsidiary of such Loan Party
at law or equity before any Official Body which individually or in the aggregate
may result in any Material Adverse Change. None of the Loan Parties or any
Subsidiaries of any Loan Party is in violation of any order, writ, injunction or
any decree of any Official Body which may result in any Material Adverse Change.
6.1.8 Title to Properties.
The real property owned or leased by each Loan Party and each
Subsidiary of each Loan Party is described on Schedule 6.1.8. Each Loan Party
and each Subsidiary of each Loan Party has good record and marketable title in
fee simple to, or a valid leasehold interest in, all its real property, and good
title to, or a valid leasehold interest in, all its other properties, assets and
other rights which it purports to own or lease or which are reflected as owned
or leased on its books and records, free and clear of all Liens and encumbrances
except Permitted Liens, and subject to the terms and conditions of the
applicable leases. All leases of property are in full force and effect without
the necessity for any consent which has not previously been obtained upon
consummation of the transactions contemplated hereby.
6.1.9 Financial Condition; Financial Statements; Projections.
(a) No Loan Party is entering into the arrangements
contemplated hereby and by the other Loan Documents, or intends to make any
transfer or incur any obligations hereunder or thereunder with actual intent to
hinder, delay or defraud either present or future creditors. On and as of the
Closing Date, on a pro forma basis after giving effect to the Transaction and to
all Indebtedness incurred and Liens and Guarantees created, or to be created, by
each Loan Party in connection with the Transaction, (w) the Borrower does not
expect that final judgments against any Loan Party in actions for money damages
with respect to pending or threatened litigation will be rendered at a time
when, or in an amount such that, such Loan Party will be unable to satisfy any
such judgments promptly in accordance with their terms
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(taking into account the maximum reasonable amount of such judgments in any such
actions and the earliest reasonable time at which such judgments might be
rendered and the cash available to each Loan Party, after taking into account
all other anticipated uses of the cash of such Loan Party (including the
payments on or in respect of debts (including their Contingent Obligations));
(x) no Loan Party will have incurred or intends to, or believes that it will,
incur debts beyond its ability to pay such debts as such debts mature (taking
into account the timing and amounts of cash to be received by such Loan Party
from any source, and amounts to be payable on or in respect of debts of such
Loan Party and the amounts referred to in the preceding clause (w)); (y) each
Loan Party, after taking into account all other anticipated uses of the cash of
such Loan Party, anticipates being able to pay all amounts on or in respect of
debts of such Loan Party when such amounts are required to be paid; and (z) each
Loan Party will have sufficient capital with which to conduct its present and
proposed business and the property of such Loan Party does not constitute
unreasonably small capital with which to conduct its present or proposed
business. For purposes of this Section 6.1.9, "debt" means any liability on a
claim, and "claim" means a (i) right to payment whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured; or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. On the date of each borrowing hereunder (and after giving effect
to all borrowings as of such date), the representations set forth in this
Section 6.1.9(a) shall be true and correct with respect to each Loan Party on
such date.
(b) (i) Historical Statements. The Borrower has
delivered to the Agent copies of (x) (i) the audited year end financial
statements of Ajax, including a balance sheet and statement of income and
shareholder's equity and cashflows, for and as of the end of March 31, 1996 and
1997 (the "Ajax Statements") and (ii) the Borrower's audited consolidated and
consolidating year-end financial statements, including a balance sheet and
statement of income and shareholder's equity and cash flows, for and as of the
end of the fiscal year March 31, 1998 (the "Borrower Statements") (the Ajax
Statements and the Borrower Statements being collectively referred to herein as
the "Historical Statements"). In addition, the Borrower has delivered to the
Agent copies of the pro forma (after giving effect to the Transaction, the
related financing of the Acquisition, the borrowings under this Agreement and
the Notes) consolidated balance sheet for the Borrower and its consolidated
Subsidiaries as of March 31, 1999 (the "Pro Forma Statement"), which presents a
good faith estimate of the consolidated pro forma condition of the Borrower and
its consolidated Subsidiaries at the date thereof. The Historical Statements
were compiled from the books and records maintained by the Borrower's
management, are correct and complete and fairly represent the consolidated
financial condition of the Borrower and its Subsidiaries as of their dates and
the results of operations for the fiscal periods then ended and have been
prepared in accordance with GAAP consistently applied, subject (in the case of
the Interim Statements) to normal year-end audit adjustments.
(ii) Financial Projections. The Borrower has delivered
to the Agent pro forma financial projections of the Borrower and its
consolidated Subsidiaries on a quarterly basis for the fiscal year ending March
31, 1999 and on an annual basis thereafter through March 31, 2004, inclusive,
which projections have been derived from various assumptions of the Borrower's
management which give effect to the Transaction and all Indebtedness and Liens
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incurred or created in connection with the Acquisitions (the "Financial
Projections"). The Financial Projections represent a reasonable range of
possible results in light of the history of the business, present and
foreseeable conditions and the intentions of the Borrower's management. The
Financial Projections accurately reflect the liabilities of the Borrower and its
consolidated Subsidiaries upon consummation of the transactions (including the
Transaction) contemplated hereby as of the Closing Date.
(iii) Accuracy of Financial Statements. Neither the
Borrower nor any Subsidiary of the Borrower has any liabilities, contingent or
otherwise, or forward or long-term commitments that are not disclosed in the
Historical Statements or in the notes thereto, and except as disclosed therein
there are no unrealized or anticipated losses from any commitments of the
Borrower or any Subsidiary of the Borrower which may cause a Material Adverse
Change. Since March 31, 1998 (on a pro forma basis after giving effect to the
Transaction and the financing related to the Acquisitions), no event or events
have occurred that are likely to result in a Material Adverse Change.
6.1.10 Use of Proceeds; Margin Stock; Section 20 Subsidiaries.
6.1.10.1 General.
The Loan Parties intend to use the proceeds of the Loans in
accordance with Section 8.1.10.
6.1.10.2 Margin Stock.
None of the Loan Parties or any Subsidiaries of any Loan Party
engages or intends to engage principally, or as one of its important activities,
in the business of extending credit for the purpose, immediately, incidentally
or ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U). No part of the proceeds of any Loan has been or will be used,
immediately, incidentally or ultimately, to purchase or carry any margin stock
or to extend credit to others for the purpose of purchasing or carrying any
margin stock or to refund Indebtedness originally incurred for such purpose, or
for any purpose which entails a violation of or which is inconsistent with the
provisions of the regulations of the Board of Governors of the Federal Reserve
System. None of the Loan Parties or any Subsidiary of any Loan Party holds or
intends to hold margin stock.
6.1.10.3 Section 20 Subsidiaries.
The Loan Parties do not intend to use and shall not use any
portion of the proceeds of the Loans, directly or indirectly (i) knowingly to
purchase any Ineligible Securities from a Section 20 Subsidiary during any
period in which such Section 20 Subsidiary makes a market in such Ineligible
Securities, (ii) knowingly to purchase during the underwriting or placement
period Ineligible Securities being underwritten or privately placed by a Section
20 Subsidiary, or (iii) to make payments of principal or interest on Ineligible
Securities underwritten or privately placed by a Section 20 Subsidiary and
issued by or for the benefit of any Loan Party or any Affiliate of any Loan
Party.
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6.1.11 Full Disclosure.
Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished to the Agent or
any Bank in connection herewith or therewith, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to any Loan Party
which materially adversely affects the business, property, assets, financial
condition, results of operations or prospects of any Loan Party or Subsidiary of
any Loan Party which has not been set forth in this Agreement or in the
certificates, statements, agreements or other documents furnished in writing to
the Agent and the Banks prior to or at the date hereof in connection with the
transactions contemplated hereby.
6.1.12 Taxes.
All federal, state, local and other tax returns required to
have been filed with respect to each Loan Party and each Subsidiary of each Loan
Party have been filed, and payment or adequate provision has been made for the
payment of all taxes, fees, assessments and other governmental charges which
have or may become due pursuant to said returns or to assessments received,
except to the extent that such taxes, fees, assessments and other charges are
being contested in good faith by appropriate proceedings diligently conducted
and for which such reserves or other appropriate provisions, if any, as shall be
required by GAAP shall have been made. There are no agreements or waivers
extending the statutory period of limitations applicable to any federal income
tax return of any Loan Party or Subsidiary of any Loan Party for any period.
6.1.13 Consents and Approvals.
(a) Except for the filing of financing statements and the
Mortgages in the state and county filing offices, no consent, approval,
exemption, order or authorization of, or a registration or filing with, any
Official Body or any other Person is required by any Law or any agreement in
connection with the execution, delivery and carrying out of this Agreement and
the other Loan Documents by any Loan Party, except as listed on Schedule 6.1.13,
all of which shall have been obtained or made on or prior to the Closing Date
except as otherwise indicated on Schedule 6.1.13.
(b) At the time of making the initial Loans, all necessary
governmental and third-party approvals (except as set forth on Schedule 6.1.13
hereto) in connection with the transactions contemplated by the Purchase
Agreements and otherwise referred to therein, including, without limitation, any
approval, consent or filing required by the provisions of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvement Act of 1976, as amended, have been or, prior to the time
when required, will have been, obtained and remain in effect, and all applicable
waiting periods have or, prior to the time when required, will have, expired
without, in all such cases, any action being taken by any competent authority
which may result in a Material Adverse Change on the transactions contemplated
by the Purchase Agreements. At the time of the making of the initial Loans,
there does not exist any adverse judgment, order, injunction or other restraint
issued or filed with respect to the transactions contemplated by the Purchase
Agreements and the
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consummation of the Acquisitions or the making of Loans or the performance by
the Loan Parties of their obligations under the Loan Agreements or the Purchase
Agreements.
6.1.14 No Event of Default; Compliance with Instruments.
No event has occurred and is continuing and no condition
exists or will exist after giving effect to the borrowings or other extensions
of credit to be made on the Closing Date under or pursuant to the Loan Documents
which constitutes an Event of Default or Potential Default. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of (i) any term of
its certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents or (ii) any agreement, lease or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material Adverse
Change.
6.1.15 Patents, Trademarks, Copyrights, Licenses, Etc.
Each Loan Party and each Subsidiary of each Loan Party owns or
possesses all the material patents, trademarks, service marks, trade names,
copyrights, licenses, registrations, franchises, permits and rights necessary to
own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by such Loan Party or Subsidiary, without
known possible, alleged or actual conflict with the rights of others. All
material patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises and permits of each Loan Party and each Subsidiary of
each Loan Party are listed and described on Schedule 6.1.15.
6.1.16 Security Interests.
The Liens and security interests granted to the Agent for the
benefit of the Banks pursuant to the Collateral Assignment, the Pledge
Agreements and the Security Agreements in the Collateral (other than the Real
Property) constitute and will continue to constitute Prior Security Interests
under the Uniform Commercial Code as in effect in each applicable jurisdiction
(the "Uniform Commercial Code") or other applicable Law entitled to all the
rights, benefits and priorities provided by the Uniform Commercial Code or such
Law. Upon the filing of financing statements relating to said security interests
in each office and in each jurisdiction where required in order to perfect the
security interests described above, taking possession of any stock certificates
or other certificates evidencing the Pledged Collateral, as applicable, all such
action as is necessary or advisable to establish such rights of the Agent will
have been taken, and there will be upon execution and delivery of the Collateral
Assignment, the Pledge Agreements and the Security Agreements, such filings and
such taking of possession, no necessity for any further action in order to
preserve, protect and continue such rights, except the filing of continuation
statements with respect to such financing statements within six months prior to
each five-year anniversary of the filing of such financing statements. All
filing fees and other expenses in connection with each such action have been or
will be paid by the Borrower.
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6.1.17 Mortgage Liens.
The Liens granted to the Agent for the benefit of the Banks
pursuant to the Mortgages constitute a valid first priority Lien under
applicable law. All such action as will be necessary or advisable to establish
such Lien of the Agent and its priority as described in the preceding sentence
will be taken at or prior to the time required for such purpose, and there will
be as of the date of execution and delivery of the Mortgages no necessity for
any further action in order to protect, preserve and continue such Lien and such
priority.
6.1.18 Status of the Pledged Collateral.
All the shares of capital stock, Partnership Interests or LLC
Interests included in the Pledged Collateral to be pledged pursuant to the
Pledge Agreements are or will be upon issuance validly issued and nonassessable
and owned beneficially and of record by the pledgor free and clear of any Lien
or restriction on transfer, except as otherwise provided by the Pledge
Agreements and except as the right of the Banks to dispose of the Shares,
Partnership Interests or LLC Interests may be limited by the Securities Act of
1933, as amended, and the regulations promulgated by the Securities and Exchange
Commission thereunder and by applicable state securities laws. There are no
shareholder, partnership, limited liability company or other agreements or
understandings with respect to the shares of capital stock, Partnership
Interests or LLC Interests included in the Pledged Collateral except for the
partnership agreements and limited liability company agreements described on
Schedule 6.1.18. The Loan Parties have delivered true and correct copies of such
partnership agreements and limited liability company agreements to the Agent.
6.1.19 Insurance.
Schedule 6.1.19 lists all insurance policies and other bonds
to which any Loan Party or Subsidiary of any Loan Party is a party, all of which
are valid and in full force and effect. No notice has been given or claim made
and no grounds exist to cancel or avoid any of such policies or bonds or to
reduce the coverage provided thereby. Such policies and bonds provide adequate
coverage from reputable and financially sound insurers in amounts sufficient to
insure the assets and risks of each Loan Party and each Subsidiary of each Loan
Party in accordance with prudent business practice in the industry of the Loan
Parties and their Subsidiaries.
6.1.20 Compliance with Laws.
The Loan Parties and their Subsidiaries are in compliance in
all material respects with all applicable Laws (other than Environmental Laws
which are specifically addressed in Section 6.1.25 [Environmental Matters]) in
all jurisdictions in which any Loan Party or Subsidiary of any Loan Party is
presently or will be doing business except where the failure to do so would not
constitute a Material Adverse Change.
6.1.21 Material Contracts; Burdensome Restrictions.
Schedule 6.1.21 lists all material contracts relating to the
business operations of each Loan Party and each Subsidiary of any Loan Party,
including all employee
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benefit plans and Labor Contracts. All such material contracts are valid,
binding and enforceable upon such Loan Party or Subsidiary and each of the other
parties thereto in accordance with their respective terms, and there is no
default thereunder, to the Loan Parties' knowledge, with respect to parties
other than such Loan Party or Subsidiary. None of the Loan Parties or their
Subsidiaries is bound by any contractual obligation, or subject to any
restriction in any organization document, or any requirement of Law which could
result in a Material Adverse Change.
6.1.22 Investment Companies; Regulated Entities.
None of the Loan Parties or any Subsidiaries of any Loan Party
is an "investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control." None of the Loan
Parties or any Subsidiaries of any Loan Party is subject to any other Federal
state statute or regulation limiting its ability to incur Indebtedness for
borrowed money.
6.1.23 Plans and Benefit Arrangements.
Except as set forth on Schedule 6.1.23:
(i) Each Loan Party and each other member of the ERISA
Group are in compliance in all material respects with any applicable provisions
of ERISA with respect to all Benefit Arrangements, Plans and Multiemployer
Plans. There has been no Prohibited Transaction with respect to any Benefit
Arrangement or any Plan or, to the best knowledge of each Loan Party, with
respect to any Multiemployer Plan or Multiple Employer Plan, which could result
in any material liability of the Borrower or any other member of the ERISA
Group. Each Loan Party and all other members of the ERISA Group have made when
due any and all payments required to be made under any agreement relating to a
Multiemployer Plan or a Multiple Employer Plan or any Law pertaining thereto.
With respect to each Plan and Multiemployer Plan, each Loan Party and each other
member of the ERISA Group (i) have fulfilled in all material respects their
obligations under the minimum funding standards of ERISA, (ii) have not incurred
any liability to the PBGC, and (iii) have not had asserted against them any
penalty for failure to fulfill the minimum funding requirements of ERISA.
(ii) To the best of each Loan Party's knowledge, each
Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder
when due.
(iii) Neither any Loan Party nor any other member of the
ERISA Group has instituted or intends to institute proceedings to terminate any
Plan.
(iv) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which security is required
under Section 307 of ERISA has been made or is reasonably expected to be made to
any Plan.
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(v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a plan
termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Plan, does not exceed the aggregate fair market value
of the assets of such Plan.
(vi) Neither any Loan Party nor any other member of the
ERISA Group has incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.
Neither any Loan Party nor any other member of the ERISA Group has been notified
by any Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan
or Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the best knowledge of each Loan Party, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.
(vii) To the extent that any Benefit Arrangement is
insured, each Loan Party and all other members of the ERISA Group have paid when
due all premiums required to be paid for all periods through the Closing Date.
To the extent that any Benefit Arrangement is funded other than with insurance,
each Loan Party and all other members of the ERISA Group have made when due all
contributions required to be paid for all periods through the Closing Date.
(viii) All Plans, Benefit Arrangements and Multiemployer
Plans have been administered in accordance with their terms and applicable Law.
6.1.24 Employment Matters.
Each of the Loan Parties and each of their Subsidiaries is in
compliance with the Labor Contracts and all applicable federal, state and local
labor and employment Laws including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, where
the failure to comply would constitute a Material Adverse Change. There are no
outstanding grievances, arbitration awards or appeals therefrom arising out of
the Labor Contracts or current or threatened strikes, picketing, handbilling or
other work stoppages or slowdowns at facilities of any of the Loan Parties or
any of their Subsidiaries which in any case would constitute a Material Adverse
Change. The Borrower has delivered to the Agent true and correct copies of each
of the Labor Contracts.
6.1.25 Environmental Matters.
Except as disclosed on Schedule 6.1.25:
(i) None of the Loan Parties or any Subsidiaries of any
Loan Party has received any Environmental Complaint from any Official Body or
private Person alleging that such Loan Party or Subsidiary or any prior or
subsequent owner of any of the Property is a potentially responsible party under
the Comprehensive Environmental Response, Cleanup and Liability Act, 42 U.S.C.
ss. 9601, et seq., and none of the Loan Parties has any reason to believe that
such an Environmental Complaint might be received. There are no pending or, to
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any Loan Party's knowledge, threatened Environmental Complaints relating to any
Loan Party or Subsidiary of any Loan Party or, to any Loan Party's knowledge,
any prior or subsequent owner of any of the Property pertaining to, or arising
out of, any Environmental Conditions.
(ii) There are no circumstances at, on or under any of
the Property that constitute a breach of or non-compliance with any of the
Environmental Laws, and there are no past or present Environmental Conditions
at, on or under any of the Property or, to any Loan Party's knowledge, at, on or
under adjacent property, that prevent compliance with the Environmental Laws at
any of the Property.
(iii) Neither any of the Property nor any structures,
improvements, equipment, fixtures, activities or facilities thereon or
thereunder contain or use Regulated Substances except in compliance with
Environmental Laws. There are no processes, facilities, operations, equipment or
other activities at, on or under any of the Property, or, to any Loan Party's
knowledge, at, on or under adjacent property, that currently result in the
release or threatened release of Regulated Substances onto any of the Property,
except to the extent that such releases or threatened releases are not a breach
of or otherwise not a violation of the Environmental Laws.
(iv) There are no aboveground storage tanks, underground
storage tanks or underground piping associated with such tanks, used for the
management of Regulated Substances at, on or under any of the Property that (a)
do not have, to the extent required by Environmental Laws, a full operational
secondary containment system in place, and (b) are not otherwise in compliance
with all Environmental Laws. There are no abandoned underground storage tanks or
underground piping associated with such tanks, previously used for the
management of Regulated Substances at, on or under any of the Property that have
not either been closed in place in accordance with Environmental Laws or removed
in compliance with all applicable Environmental Laws and no contamination
associated with the use of such tanks exists on any of the Property that is not
in compliance with Environmental Laws.
(v) Each Loan Party and each Subsidiary of any Loan
Party has all material permits, licenses, authorizations, plans and approvals
necessary under the Environmental Laws for the conduct of the business of such
Loan Party or Subsidiary as presently conducted. Each Loan Party and each
Subsidiary of any Loan Party has submitted all material notices, reports and
other filings required by the Environmental Laws to be submitted to an Official
Body which pertain to past and current operations on any of the Property.
(vi) All past and present on-site generation, storage,
processing, treatment, recycling, reclamation, disposal or other use or
management of Regulated Substances at, on, or under any of the Property and all
off-site transportation, storage, processing, treatment, recycling, reclamation,
disposal or other use or management of Regulated Substances have been done in
accordance with the Environmental Laws.
6.1.26 Senior Debt Status.
The Obligations of each Loan Party under this Agreement, the
Notes, the Guaranty Agreements and each of the other Loan Documents to which it
is a party do rank and
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will rank at least pari passu in priority of payment with all other Indebtedness
of such Loan Party except (i) Indebtedness of such Loan Party to the extent
secured by Permitted Liens and (ii) if required by such Person, Indebtedness
owing to a Person providing interest rate hedging as (and to the extent)
required under Section 8.1. There is no Lien upon or with respect to any of the
properties or income of any Loan Party or Subsidiary of any Loan Party which
secures indebtedness or other obligations of any Person except for Permitted
Liens.
6.1.27 Year 2000.
The Borrower and each Loan Party have reviewed the areas
within their business and operations which could be adversely affected by, and
will have developed by December 31, 1998 a program to address on a timely basis,
the risk that certain computer applications used by the Borrower or any Loan
Party (or any of their respective material suppliers, customers or vendors) may
be unable to recognize and perform date-sensitive functions involving dates
prior to and after December 31, 1999 (the "Year 2000 Problem"). The Year 2000
Problem will not result in any Material Adverse Change.
6.1.28 Solvency.
After giving effect to the Transaction, the contemplated
borrowings of the full amount of the Term Loan Commitments and the Revolving
Loan Commitments, the Borrower and its Subsidiaries will not be insolvent, will
not be rendered insolvent by the indebtedness incurred in connection therewith,
will not be left with unreasonably small capital with which to engage in their
respective businesses and will not have incurred debts, including Contingent
Obligations, beyond their respective ability to pay such debts as they mature.
6.1.29 [Reserved].
6.1.30 Representations and Warranties in the Purchase
Agreement
As of the Closing Date, all representations and warranties of
the Borrower and, to the best knowledge of the Borrower, of the Sellers set
forth in the Purchase Agreements, were true and correct in all material respects
as of the time as of which such representations and warranties were made and
shall be true and correct in all material respects as of the Closing Date as if
such representations and warranties were made on and as of such date, unless
such representation and warranty expressly indicates that it is being made as of
any other specific date.
6.2 Updates to Schedules.
Should any of the information or disclosures provided on any
of the Schedules attached hereto become outdated or incorrect in any material
respect, the Borrower shall promptly provide the Agent in writing with such
revisions or updates to such Schedule as may be necessary or appropriate to
update or correct same; provided, however, that no Schedule shall be deemed to
have been amended, modified or superseded by any such correction or update, nor
shall any breach of warranty or representation resulting from the inaccuracy or
incompleteness of any such Schedule be deemed to have been cured thereby, unless
and until the Required Banks,
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in their sole and absolute discretion, shall have accepted in writing such
revisions or updates to such Schedule.
7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT
The obligation of each Bank to make Loans and of the Agent to issue
Letters of Credit hereunder is subject to the performance by each of the Loan
Parties of its Obligations to be performed hereunder at or prior to the making
of any such Loans or issuance of such Letters of Credit and to the satisfaction
of the following further conditions:
7.1 First Loans and Letters of Credit.
On the Closing Date:
7.1.1 Officer's Certificate.
The representations and warranties of each of the Loan Parties
contained in Section 6 and in each of the other Loan Documents shall be true and
accurate on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and each of the Loan Parties shall
have performed and complied with all covenants and conditions hereof and
thereof, no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; and there shall be delivered to the Agent for the
benefit of each Bank a certificate of each of the Loan Parties, dated the
Closing Date and signed by the Chief Executive Officer, President or Chief
Financial Officer of each of the Loan Parties, to each such effect.
7.1.2 Secretary's Certificate.
There shall be delivered to the Agent for the benefit of each
Bank a certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Loan Parties, certifying as appropriate as
to:
(i) all action taken by each Loan Party in connection
with this Agreement, the Transaction and the other Loan Documents;
(ii) the names of the officer or officers authorized to
sign this Agreement and the other Loan Documents and the true signatures of such
officer or officers and specifying the Authorized Officers permitted to act on
behalf of each Loan Party for purposes of this Agreement and the Transaction,
and the true signatures of such officers, on which the Agent and each Bank may
conclusively rely; and
(iii) copies of its organizational documents, including
its certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement as in effect on the Closing Date certified by the appropriate state
official where such documents are filed in a state office together
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with certificates from the appropriate state officials as to the continued
existence and good standing of each Loan Party in each state where organized or
qualified to do business and a bring-down certificate by facsimile dated the
Closing Date.
7.1.3 Delivery of Documents.
7.1.3.1 Acquisition Documents.
All terms of the Acquisition Documents (including,
without limitation, the amount and form of consideration included in the
purchase price and conditions contained therein) and any amendments thereto
shall be in form and substance satisfactory to the Agent; and at the Closing
Date each of the conditions to purchase contained in the Acquisition Documents
shall have been satisfied in all material respects (or waived in writing, such
waiver to be satisfactory to the Agent) to the satisfaction of the Agent.
7.1.3.2 Loan Documents.
The Assignments of Leases, Guaranty Agreements,
Indemnity, the Landlord Waiver, Mortgages, Notes, Pledge Agreements,
Intercompany Subordination Agreement, Security Agreements and other Loan
Documents shall have been duly executed and delivered to the Agent for the
benefit of the Banks, together with all appropriate financing statements and
appropriate stock powers and certificates evidencing the Shares, the Partnership
Interests and the LLC Interests.
7.1.3.3 Consummation of Acquisition.
The Acquisition shall have been, or shall be
concurrently with the making of the Loans hereunder, consummated in accordance
with the terms of the Acquisition Documents therefor, without any material
amendment thereto or modification or waiver thereof, except with the consent of
the Required Lenders and with notice of all amendments thereto and modifications
and waivers thereof, and the Agent shall have received evidence satisfactory to
it to that effect.
7.1.4 Opinion of Counsel.
There shall be delivered to the Agent for the benefit of each
Bank a written opinion of Phillips, Nizer, Xxxxxxxx, Xxxx & Ballon, LLP, counsel
for the Loan Parties, dated the Closing Date and in form and substance
satisfactory to the Agent and its counsel as to such matters incident to the
transactions contemplated herein as the Agent may request.
7.1.5 Legal Details.
All legal details and proceedings in connection with the
transactions contemplated by this Agreement, the Transaction and the other Loan
Documents shall be in form and substance satisfactory to the Agent and counsel
for the Agent, and the Agent shall have received all such other counterpart
originals or certified or other copies of such documents and proceedings in
connection with such transactions, in form and substance satisfactory to the
Agent and said counsel, as the Agent or said counsel may reasonably request.
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7.1.6 Payment of Fees.
(a) All reasonable costs, fees and expenses (including,
without limitation, reasonable legal fees and expenses) payable to PNC Bank by
the Borrower pursuant to the letter agreement between Standard Automotive
Corporation and PNC Bank, dated May 13, 1999, as amended from time to time (the
"Agent's Letter"), shall have been paid in full and the Borrower shall have paid
or have caused to be paid the commitment, closing and other fees and expenses
(including, without limitation, reasonable legal fees and expenses) contemplated
hereby and/or in connection with any other documents executed in connection
herewith.
(b) The Borrower shall have provided evidence reasonably
satisfactory in form and substance to the Agent that the aggregate fees and
expenses payable by the Borrower in connection with this Agreement and the
Transaction (including fees and expenses payable to CCC or any of CCC's
Affiliates) shall not exceed $2,750,000 without the prior written consent of the
Agent.
7.1.7 Environmental Audit.
The Loan Parties shall cause to be performed and completed an
environmental audit with respect to the Real Property by consultants
satisfactory to the Agent and shall provide all reports and results of such
audit in writing to the Agent. Such reports shall meet the Agent's minimum
requirements for phase I environmental assessments and any other requirements of
the Agent or the Banks. The environmental condition of the Loan Parties' and
their Subsidiaries' assets, as substantiated by such audit, shall be
satisfactory to the Agent in all respects. On the Closing Date the appropriate
officers of the applicable Loan Parties shall have delivered to the Agent in
form and substance satisfactory to the Agent a certificate to the effect that
the Loan Parties have made known to the Agent all information known to them and
their Subsidiaries concerning Environmental Conditions and Environmental
Complaints and the Loan Parties and their Subsidiaries' compliance with the
Environmental Laws relating to any of the Property and any other site for which
any Loan Party or Subsidiary of a Loan Party has received notice that it is
potentially responsible for Environmental Conditions.
7.1.8 Appraisals.
The Agent shall have received appraisals or valuations of the
Loan Parties' and their Subsidiaries' assets as the Agent may require in form
and substance satisfactory to the Agent in all respects.
7.1.9 Consents.
All material consents required to effectuate the transactions
contemplated hereby as set forth on Schedule 6.1.13, and in connection with the
Transaction, shall have been obtained and remain in effect, and all applicable
waiting periods shall have expired without any action being taken by competent
authority which restrains, prevents or imposes, in the judgment of the Agent or
any Bank, materially adverse conditions upon the consummation of the
Acquisition.
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7.1.10 Officer's Certificate Regarding MACs.
Since March 31, 1998, no Material Adverse Change shall have
occurred; prior to the Closing Date, there shall have been no material change in
the management of any Loan Party or Subsidiary of any Loan Party; and there
shall have been delivered to the Agent for the benefit of each Bank a
certificate dated the Closing Date and signed by the Chief Executive Officer,
President or Chief Financial Officer of each Loan Party to each such effect.
7.1.11 No Violation of Laws.
The making of the Loans and the issuance of the Letters of
Credit shall not contravene any Law applicable to any Loan Party or any of the
Banks.
7.1.12 No Actions or Proceedings.
No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or which, in the
Agent's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any of the other Loan Documents.
7.1.13 Insurance Policies; Certificates of Insurance;
Endorsements.
The Loan Parties shall have delivered evidence acceptable to
the Agent that adequate insurance in compliance with Section 8.1.3 [Maintenance
of Insurance] is in full force and effect and that all premiums then due thereon
have been paid, together with a certified copy of each Loan Party's casualty
insurance policy or policies evidencing coverage satisfactory to the Agent, with
additional insured, mortgagee and lender loss payable special endorsements
attached thereto in form and substance satisfactory to the Agent and its counsel
naming the Agent as additional insured, mortgagee and lender loss payee.
7.1.14 Title Insurance.
The Loan Parties shall deliver a title insurance policy or
policies or binder or binders in favor of the Agent for the benefit of the
Banks, in customary ALTA current mortgagee's form, and in amounts not less than
$6,000,000 with respect to property located in Worcester County, Massachusetts
which is owned by Five N and with respect to other properties no less than fair
market value thereof, with premiums paid thereon, issued by a title insurance
company acceptable to the Agent and insuring the Mortgages as a valid first
priority Lien upon the applicable Loan Parties' fee simple title to, or
leasehold interest in, the Real Property Collateral and all improvements and all
appurtenances thereto (including such easements and appurtenances as may be
required by the Agent), free and clear of any and all defects and encumbrances
whatsoever, subject only to such exceptions as may be approved in writing by the
Agent, with endorsements thereto as to such matters as the Agent may designate.
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7.1.15 Filing Receipts.
The Agent shall have received (1) copies of all filing
receipts and acknowledgments issued by any governmental authority to evidence
any recordation or filing necessary to perfect the Lien of the Banks on the
Collateral or other satisfactory evidence of such recordation and filing and (2)
evidence in a form acceptable to the Agent that such Lien constitutes a Prior
Security Interest in favor of the Banks and, in the case of the Mortgage, a
valid and perfected first priority Lien.
7.1.16 [Reserved].
7.1.17 Administrative Questionnaire. Each of the Banks and the
Borrower shall have completed and delivered to the Agent the Agent's form of
administrative questionnaire.
7.1.18 Proceedings; Receipt of Documents.
All proceedings in connection with the transactions
contemplated in connection with (a) the acquisition by the Borrower of the
assets of the Sellers and (b) any actions against the Loan Parties or any of
their respective Subsidiaries pending at the National Labor Relations Board, and
all documents incidental thereto, shall be satisfactory to the Agent and its
counsel, and the Agent and such counsel shall have received all such information
and such counterpart originals or certified or other copies of such documents as
the Agent or such counsel may reasonably request, and if requested by the Agent,
the Borrower shall use its best efforts to obtain reliance letters from counsel
rendering opinions pursuant to any such acquisitions.
7.1.19 Audit.
The Agent shall have obtained an audit of the assets and
liabilities of the Borrower and its Subsidiaries (including Ranor) and the Agent
shall be satisfied (in its sole discretion) with the results of such audit.
7.1.20 Financial Statements.
The Agent and the Banks shall have received a copy of (A) the
Historical Statements and the Pro Forma Statements together with a certificate
of the Chief Executive Officer or Chief Financial Officer of the Borrower
setting forth (x) all existing Indebtedness, guarantees, pending or threatened
litigation or claims and other contingent liabilities of the Borrower and its
Subsidiaries, and (y) all dividends declared or paid since the date of such
Historical Statements and all intercompany payments made or obligations incurred
to Affiliates outside the ordinary course of the Borrower business since such
date and (B) the preliminary combined balance sheets and combined statements of
income and retained earnings of the Borrower and its Subsidiaries as of March
31, 1998 and (C) the Financial Projections described in Section 6.1.9(b)(ii)
hereof.
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7.1.21 Cancellation of Existing Credit Facilities.
The Agent shall have received the following from each of the
Existing Lenders: (A) terminations (including UCC-3 terminations) of all rights
of the Existing Lenders under the Existing Financing Documents and all related
security documents and other related agreements and (B) a termination of any
existing collateral assignment of the key man life insurance policy on the life
of Xxxx Xxxxxxx.
7.1.22 Key Man Life Insurance Policy.
The Agent shall have received a copy of a key man life
insurance policy on the life of Xxxx Xxxxxxx from a responsible and reputable
life insurance company in the amount of $2,000,000 together with a collateral
assignment of such life insurance policy to the Agent for the benefit of the
Banks (in a form acceptable to the Agent in its sole discretion), duly executed
by the Borrower, and acknowledged by the home office of the insurance company.
7.1.23 [Reserved].
7.1.24 Debt of Acquired Companies.
The Company's indebtedness of $1,505,166.68 shall be repaid on
the Closing Date.
7.1.25 Purchase Agreement.
Full, complete and accurate copies of the Purchase Agreements
(including all annexes, schedules and exhibits thereto) shall have been provided
to the Agent. The Purchase Agreements shall be satisfactory to the Agent and
shall have been duly authorized, executed and delivered by each of the parties
thereto and shall be in full force and effect. No term or provisions of the
Purchase Agreements, after the execution and delivery of this Agreement, shall
have been modified, and no condition to the consummation of the transactions
contemplated thereby shall have been waived (unless waived in a writing which is
satisfactory to the Agent), by any of the parties thereto.
7.1.26 Work Papers.
The Agent shall have reviewed Xxxxxx Xxxxxxxx'x work papers
regarding its review of the financial statements of the Company, including any
audits of the Company, and the Agent shall be satisfied (in its sole discretion)
with the results of such review.
7.1.27 Management Letters.
The Agent shall have received and reviewed copies of
management letter(s), if any, for each of the past two years of independent
certified public accountants for each Loan Party or letter(s) from each such
independent certified public accountant confirming that no management letter was
prepared for the respective Loan Party and the Agent shall be satisfied (in its
sole discretion) with the results of such review.
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7.1.28 Material Contracts.
The Agent shall have received and reviewed copies, certified
by the Chief Executive Officer of the Borrower, of each material contract which
each Loan Party has with its respective customers and vendors.
7.1.29 Borrowing Base Certificate.
On or prior to the Closing Date, the Agent and the Banks shall
have received and the Agent and the Banks shall be satisfied (both as to form
and substance) with a pro forma Borrowing Base Certificate which shall be
prepared as of a date prior to the Closing Date and which shall indicate that
the Borrowing Base on the Closing Date will exceed the initial borrowings under
the Revolving Loan Facility by not less than $4,000,000.
7.1.30 Maximum Indebtedness; Maximum Leverage Ratio.
On the Closing Date, the Company's Indebtedness outstanding
shall not exceed $60,000,000 and the Company's Leverage Ratio shall not exceed
3.10 to 1.0.
7.2 Each Additional Loan or Letter of Credit.
At the time of making any Loans or issuing any Letters of Credit
other than Loans made or Letters of Credit issued on the Closing Date and after
giving effect to the proposed extensions of credit: (a) the representations and
warranties of the Loan Parties contained in Section 6 and in the other Loan
Documents shall be true on and as of the date of such additional Loan or Letter
of Credit with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein) and the Loan Parties shall have performed and complied with
all covenants and conditions hereof; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; the making of the Loans or
issuance of such Letter of Credit shall not contravene any Law applicable to any
Loan Party or Subsidiary of any Loan Party or any of the Banks; and the Borrower
shall have delivered to the Agent a duly executed and completed Loan Request or
application for a Letter of Credit as the case may be; (b) the Agent shall have
received such documentation and opinion or opinions, addressed to each of the
Banks from (i) such counsel to each Loan Party as reasonably requested by the
Agent and (ii) appropriate local counsel, which opinions shall cover such
matters as reasonably requested by, and be in form and substance reasonably
satisfactory to, the Agent; and (c) the Agent and the Banks shall have received
and shall be reasonably satisfied (both as to form and substance) with the
Borrowing Base Certificate last delivered to the Banks.
The acceptance of the proceeds of each borrowing of Loans shall
constitute a representation and warranty by each Loan Party to each of the Banks
that all of the applicable conditions specified in Section 7.2 (in each case
disregarding any reference therein that such condition be deemed satisfactory by
the Agent and/or the Banks) have been satisfied or waived.
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All of the certificates, legal opinions and other documents and
papers referred to in this Section 7.2, unless otherwise specified, shall be
delivered to the Agent at the Agent's Office (or such other location as may be
specified by the Agent) for the account of each of the Banks and in sufficient
counterparts for each of the Banks and shall be satisfactory in form and
substance to the Agent.
8. COVENANTS
8.1 Affirmative Covenants.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings, and interest thereon, expiration or termination of all
Letters of Credit, satisfaction of all of the Loan Parties' other Obligations
under the Loan Documents and termination of the Commitments, the Loan Parties
shall comply at all times with the following affirmative covenants:
8.1.1 Preservation of Existence, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain its legal existence as a corporation, limited
partnership or limited liability company and its license or qualification and
good standing in each jurisdiction in which its ownership or lease of property
or the nature of its business makes such license or qualification necessary,
except as otherwise expressly permitted in Section 8.2.6 [Liquidations, Mergers,
Etc.].
8.1.2 Payment of Liabilities, Including Taxes, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, duly pay and discharge all liabilities to which it is subject
or which are asserted against it, promptly as and when the same shall become due
and payable, including all taxes, assessments and governmental charges upon it
or any of its properties, assets, income or profits, prior to the date on which
penalties attach thereto, except to the extent that such liabilities, including
taxes, assessments or charges, are being contested in good faith and by
appropriate and lawful proceedings diligently conducted and for which such
reserve or other appropriate provisions, if any, as shall be required by GAAP
shall have been made, but only to the extent that failure to discharge any such
liabilities would not result in any additional liability which would adversely
affect to a material extent the financial condition of any Loan Party or
Subsidiary of any Loan Party or which would affect the Collateral, provided that
the Loan Parties and their Subsidiaries will pay all such liabilities forthwith
upon the commencement of proceedings to foreclose any Lien which may have
attached as security therefor.
8.1.3 Maintenance of Insurance.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, insure its properties and assets against loss or damage by fire
and such other insurable hazards as such assets are commonly insured (including
fire, extended coverage, property damage, workers' compensation, public
liability and business interruption insurance) and against other risks
(including errors and omissions) in such amounts as similar properties and
assets are insured by
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prudent companies in similar circumstances carrying on similar businesses, and
with reputable and financially sound insurers, including self-insurance to the
extent customary, all as reasonably determined by the Agent. At the request of
the Agent, the Loan Parties shall deliver to the Agent and each of the Banks (x)
on the Closing Date and annually thereafter an original certificate of insurance
signed by the Loan Parties' independent insurance broker describing and
certifying as to the existence of the insurance on the Collateral required to be
maintained by this Agreement and the other Loan Documents, together with a copy
of the endorsement described in the next sentence attached to such certificate
and (y) from time to time a summary schedule indicating all insurance then in
force with respect to each of the Loan Parties. Such policies of insurance shall
contain special endorsements, in form and substance acceptable to the Agent,
which shall (i) specify the Agent as an additional insured, mortgagee and lender
loss payee as its interests may appear, with the understanding that any
obligation imposed upon the insured (including the liability to pay premiums)
shall be the sole obligation of the applicable Loan Parties and not that of the
insured, (ii) provide that the interest of the Banks shall be insured regardless
of any breach or violation by the applicable Loan Parties of any warranties,
declarations or conditions contained in such policies or any action or inaction
of the applicable Loan Parties or others insured under such policies, (iii)
provide a waiver of any right of the insurers to set off or counterclaim or any
other deduction, whether by attachment or otherwise, (iv) provide that any and
all rights of subrogation which the insurers may have or acquire shall be, at
all times and in all respects, junior and subordinate to the prior payment in
full of the Indebtedness hereunder and that no insurer shall exercise or assert
any right of subrogation until such time as the Indebtedness hereunder has been
paid in full and the Commitments have terminated, (v) provide, except in the
case of public liability insurance and workmen's compensation insurance, that
all insurance proceeds for losses of less than $150,000 shall be adjusted with
and payable to the applicable Loan Parties and that all insurance proceeds for
losses of $150,000 or more shall be adjusted with and payable to the Agent, (vi)
include effective waivers by the insurer of all claims for insurance premiums
against the Agent, (vii) provide that no cancellation of such policies for any
reason (including non-payment of premium) nor any change therein shall be
effective until at least thirty (30) days after receipt by the Agent of written
notice of such cancellation or change, (viii) be primary without right of
contribution of any other insurance carried by or on behalf of any additional
insureds with respect to their respective interests in the Collateral, and (ix)
provide that inasmuch as the policy covers more than one insured, all terms,
conditions, insuring agreements and endorsements (except limits of liability)
shall operate as if there were a separate policy covering each insured. The
applicable Loan Parties shall notify the Agent promptly of any occurrence
causing a material loss or decline in value of the Collateral and the estimated
(or actual, if available) amount of such loss or decline. Any monies received by
the Agent constituting insurance proceeds or condemnation proceeds (pursuant to
the Mortgage) may, at the option of the Agent, (i) be applied by the Agent to
the payment of the Loans in such manner as the Agent may reasonably determine,
or (ii) be disbursed to the applicable Loan Parties on such terms as are deemed
appropriate by the Agent for the repair, restoration and/or replacement of
property in respect of which such proceeds were received.
8.1.4 Maintenance of Properties and Leases.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in good repair, working order and condition (ordinary
wear and tear excepted) in accordance with the general practice of other
businesses of similar character and size, all of those properties useful
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or necessary to its business, and from time to time, such Loan Party will make
or cause to be made all appropriate repairs, renewals or replacements thereof.
8.1.5 Maintenance of Patents, Trademarks, Etc.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, maintain in full force and effect all patents, trademarks,
service marks, trade names, copyrights, licenses, franchises, permits and other
authorizations necessary for the ownership and operation of its properties and
business if the failure so to maintain the same would constitute a Material
Adverse Change.
8.1.6 Visitation Rights.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, permit any of the officers or authorized employees or
representatives of the Agent or any of the Banks to visit and inspect any of its
properties and to examine and make excerpts from its books and records and
discuss its business affairs, finances and accounts with its officers, all in
such detail and at such times and as often as any of the Banks may reasonably
request, provided that each Bank shall provide the Borrower and the Agent with
reasonable notice prior to any visit or inspection. In the event any Bank
desires to conduct an audit of any Loan Party, such Bank shall make a reasonable
effort to conduct such audit contemporaneously with any audit to be performed by
the Agent.
8.1.7 Keeping of Records and Books of Account.
The Borrower shall, and shall cause each Subsidiary of the
Borrower to, maintain and keep proper books of record and account which enable
the Borrower and its Subsidiaries to issue financial statements in accordance
with GAAP and as otherwise required by applicable Laws of any Official Body
having jurisdiction over the Borrower or any Subsidiary of the Borrower, and in
which full, true and correct entries shall be made in all material respects of
all its dealings and business and financial affairs.
8.1.8 Plans and Benefit Arrangements.
The Borrower shall, and shall cause each other member of the
ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, the
Borrower shall cause all of its Plans and all Plans maintained by any member of
the ERISA Group to be funded in accordance with the minimum funding requirements
of ERISA and shall make, and cause each member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.
8.1.9 Compliance with Laws.
Each Loan Party shall, and shall cause each of its
Subsidiaries to, comply with all applicable Laws, including all Environmental
Laws, in all respects, provided that it shall not be deemed to be a violation of
this Section 8.1.9 if any failure to comply with any Law would
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not result in fines, penalties, remediation costs, other similar liabilities or
injunctive relief which in the aggregate would constitute a Material Adverse
Change.
8.1.10 Use of Proceeds.
(a) All the proceeds of Term Loan A made hereunder shall
be utilized to refinance the Borrower's existing term loan with the Agent.
(b) All the proceeds of Term Loan B made hereunder shall
be utilized to provide the financing required to consummate the Acquisition, to
fund the CCC/Ranor Capital Contribution and the Ranor Capital Contribution, and
to pay related fees and expenses.
(c) Up to $2,000,000 of Letters of Credit may be used by
the Borrower for financing purposes in the ordinary course of the business of
the Borrower and its Subsidiaries and the remaining availability of Revolving
Loans may be utilized to finance the ongoing working capital requirements of the
Borrower and its Subsidiaries and to fund a portion of the financing required to
consummate the Acquisition. The Loan Parties shall not use the Letters of Credit
and the proceeds of the Loans for any purposes which contravenes any applicable
Law or any provision hereof.
8.1.11 Further Assurances.
Each Loan Party shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security Interest
in the Collateral as a continuing first priority perfected Lien, subject only to
Permitted Liens, and shall do such other acts and things as the Agent in its
sole discretion may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.
8.1.12 Subordination of Intercompany Loans.
Each Loan Party shall cause any intercompany Indebtedness,
loans or advances owed by any Loan Party to any other Loan Party to be
subordinated pursuant to the terms of the Intercompany Subordination Agreement.
8.1.13 Interest Rate Protection.
The Borrower shall, no later than 60 days after the Closing
Date and in respect of 50% of the outstanding Term Loans as in effect from time
to time, enter into Interest Rate Protection Agreements to the extent available
on commercially reasonable terms, reasonably acceptable to the Agent.
8.1.14 Additional Collateral.
In the event that the Borrower or any Subsidiary acquires any
property or interest in property (including, without limitation, real property)
that is not subject to a perfected Lien in favor of the Agent pursuant to, the
Security Documents, the Borrower shall, and shall cause any such Subsidiary to,
notify the Agent within 10 days of the occurrence of such event and
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the Borrower shall, and shall cause any such Subsidiary to, take such action
(including, without limitation, the preparation and filing of mortgages or deeds
of trust in form and substance satisfactory to the Agent) as the Agent shall
request in order to create and/or perfect a Lien in favor of the Agent on such
property.
8.1.15 Compliance with Mortgage, Grant Agreement and Note.
The Borrower shall cause R&S to comply with the terms of that
certain Mortgage, dated October 23, 1997, from R&S to the Xxxxx County
Development Authority ("FCDA"), that certain Grant Agreement, dated August 4,
1995, among the Kentucky Economic Development Finance Authority, Xxxxx County
Fiscal Court, FCDA and R&S and that certain Promissory Note, dated October 23,
1997 from R&S to the FCDA, and in particular, shall cause R&S to comply with the
"Jobs Requirement", as defined in such Grant Agreement.
8.2 Negative Covenants.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations hereunder
and termination of the Commitments, the Loan Parties shall comply with the
following negative covenants:
8.2.1 Indebtedness.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness under the Loan Documents;
(ii) Existing Indebtedness as set forth on Schedule
8.2.1 (including any extensions or renewals thereof, provided there is no
increase in the amount thereof or other significant change in the terms thereof
unless otherwise specified on Schedule 8.2.1);
(iii) Capitalized and operating leases as and to the
extent permitted under Section 8.2.15 [Capital Expenditures and Leases];
(iv) Indebtedness secured by Purchase Money Security
Interests not exceeding $250,000;
(v) Other Indebtedness for interest rate hedging
arrangements required by Section 8.1.13;
(vi) Indebtedness of a Loan Party to another Loan Party
which is subordinated in accordance with the provisions of Section 8.1.12
[Subordination of Intercompany Loans]; and
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(vii) Indebtedness under the Notes (as such term is
defined in Ranor Purchase Agreement) having terms approved by the Required
Lenders which is subordinated on terms approved by the Required Lenders in each
case in their sole discretion.
8.2.2 Liens.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except Permitted Liens.
8.2.3 Guaranties.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time, directly or indirectly, become or be liable
in respect of any Contingent Obligation, or assume, guarantee, become surety
for, endorse (other than endorsements of instruments for deposit or collection
in the ordinary course of business); or otherwise agree, become or remain
directly or contingently liable upon or with respect to any obligation or
liability of any other Person, except for Guaranties of Indebtedness of the Loan
Parties permitted hereunder.
8.2.4 Loans and Investments.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, at any time make or suffer to remain outstanding any
loan or advance to, or purchase, acquire or own any stock, bonds, notes or
securities of, or any partnership interest (whether general or limited) or
limited liability company interest in, or any other investment or interest in,
or make any capital contribution to, any other Person, or agree, become or
remain liable to do any of the foregoing, except:
(i) trade credit extended on usual and customary terms
in the ordinary course of business;
(ii) advances to employees to meet expenses incurred by
such employees in the ordinary course of business not to exceed $150,000 in the
aggregate outstanding at any time;
(iii) Permitted Investments;
(iv) loans, advances and investments in other Loan
Parties; and
(v) investments by the Borrower in assets located
outside the United States provided that any such investment shall not exceed
$4,000,000 in the aggregate at any one time outstanding.
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8.2.5 Dividends and Related Distributions.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, make or pay, or agree to become or remain liable to make
or pay, any dividend or other distribution of any nature (whether in cash,
property, securities or otherwise) on account of or in respect of its shares of
capital stock, partnership interests or limited liability company interests on
account of the purchase, redemption, retirement or acquisition of its shares of
capital stock (or warrants, options or rights therefor), partnership interests
or limited liability company interests, except (i) dividends or other
distributions payable to another Loan Party and (ii) dividends on existing
preferred stock of the Borrower, provided that (a) any such dividends paid from
and after July 21, 1998 do not exceed $1,173,000 per year, (b) after giving
effect to any such dividends, no Potential Default or Event of Default shall
exist hereunder and (c) no payment of any such dividend shall violate any Law.
8.2.6 Liquidations, Mergers, Consolidations, Acquisitions.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a
party to any merger or consolidation, or acquire by purchase, lease or otherwise
all or substantially all of the assets or capital stock of any other Person,
provided that any Subsidiary of the Borrower may be merged or consolidated with
or into (i) the Borrower, if the Borrower is the continuing or surviving
corporation or (ii) any other such Subsidiary if the continuing or surviving
corporation is a Wholly-Owned Subsidiary of the Borrower.
8.2.7 Dispositions of Assets or Subsidiaries.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise
transfer or dispose of, voluntarily or involuntarily, any of its properties or
assets, tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial
interest, partnership interests or limited liability company interests of a
Subsidiary of such Loan Party), except:
(i) transactions involving the sale of inventory in the
ordinary course of business;
(ii) any sale, transfer or lease of assets in the
ordinary course of business which are no longer necessary or required in the
conduct of such Loan Party's or such Subsidiary's business;
(iii) any sale, transfer or lease of assets by any
wholly owned Subsidiary of such Loan Party to another Loan Party;
(iv) any sale, transfer or lease of assets in the
ordinary course of business which are replaced by substitute assets acquired or
leased within the parameters of Section 8.2.15 [Capital Expenditures and
Leases], provided such substitute assets are subject to the Banks' Prior
Security Interest; or
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(v) any sale, transfer or lease of assets, other than
those specifically excepted pursuant to clauses (i) through (iv) above, which is
approved by the Required Banks so long as the Net Proceeds are applied as a
mandatory prepayment of the Term Loans in accordance with the provisions of
Section 5.5.2 [Sale of Assets] above.
8.2.8 Affiliate Transactions.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, enter into or carry out any transaction (including
purchasing property or services from or selling property or services to any
Affiliate of any Loan Party or other Person) unless such transaction is not
otherwise prohibited by this Agreement, is entered into in the ordinary course
of business upon fair and reasonable arm's-length terms and conditions which are
fully disclosed to the Agent and is in accordance with all applicable Law.
8.2.9 Subsidiaries, Partnerships and Joint Ventures.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, own or create directly or indirectly any Subsidiaries
other than (i) any Subsidiary which has joined this Agreement as Guarantor on
the Closing Date; and (ii) any Subsidiary formed after the Closing Date which
joins this Agreement as a Guarantor pursuant to Section 11.19 [Joinder of
Guarantors], provided that the Required Banks shall have consented to such
formation and joinder and that such Subsidiary and the Loan Parties, as
applicable, shall grant and cause to be perfected first priority Liens to the
Agent for the benefit of the Banks in the assets held by, and stock of or other
ownership interests in, such Subsidiary. Each of the Loan Parties shall not
become or agree to (1) become a general or limited partner in any general or
limited partnership, except that the Loan Parties may be general or limited
partners in other Loan Parties, (2) become a member or manager of, or hold a
limited liability company interest in, a limited liability company, except that
the Loan Parties may be members or managers of, or hold limited liability
company interests in, other Loan Parties, or (3) become a joint venturer or hold
a joint venture interest in any joint venture.
8.2.10 Continuation of or Change in Business.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, engage in any business other than the manufacturing of
new trailer chassis, bottom dump and grain xxxxxx trailers, dump truck bodies,
other specialty, trailers and dumpsters and remanufacturing of used trailer
chassis, and the cutting, forming, rolling, welding, assembling, testing and
finishing of machine parts, substantially as conducted and operated by such Loan
Party or Subsidiary during the present fiscal year, and such Loan Party or
Subsidiary shall not permit any material change in such business.
8.2.11 Plans and Benefit Arrangements.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to:
(i) fail to satisfy the minimum funding requirements of
ERISA and the Internal Revenue Code with respect to any Plan;
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(ii) request a minimum funding waiver from the Internal
Revenue Service with respect to any Plan;
(iii) engage in a Prohibited Transaction with any Plan,
Benefit Arrangement or Multiemployer Plan which, alone or in conjunction with
any other circumstances or set of circumstances resulting in liability under
ERISA, would constitute a Material Adverse Change;
(iv) permit the aggregate actuarial present value of all
benefit liabilities (whether or not vested) under each Plan, determined on a
plan termination basis, as disclosed in the most recent actuarial report
completed with respect to such Plan, to exceed, as of any actuarial valuation
date, the fair market value of the assets of such Plan;
(v) fail to make when due any contribution to any
Multiemployer Plan that the Borrower or any member of the ERISA Group may be
required to make under any agreement relating to such Multiemployer Plan, or any
Law pertaining thereto;
(vi) withdraw (completely or partially) from any
Multiemployer Plan or withdraw (or be deemed under Section 4062(e) of ERISA to
withdraw) from any Multiple Employer Plan, where any such withdrawal is likely
to result in a material liability of the Borrower or any member of the ERISA
Group;
(vii) terminate, or institute proceedings to terminate,
any Plan, where such termination is likely to result in a material liability to
the Borrower or any member of the ERISA Group;
(viii) make any amendment to any Plan with respect to
which security is required under Section 307 of ERISA; or
(ix) fail to give any and all notices and make all
disclosures and governmental filings required under ERISA or the Internal
Revenue Code, where such failure is likely to result in a Material Adverse
Change.
8.2.12 Fiscal Year.
The Borrower shall not, and shall not permit any Subsidiary of
the Borrower to, change its fiscal year from the twelve-month period beginning
April 1 and ending March 31.
8.2.13 Issuance of Stock.
Except as otherwise set forth on Schedule 8.2.13, each of the
Loan Parties shall not, and shall not permit any of its Subsidiaries to, issue
any additional shares of its capital stock or any options, warrants or other
rights in respect thereof, other than options to employees not to exceed
$1,000,000 in value issued pursuant to the Borrower's existing Incentive Stock
Option Plan.
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8.2.14 Changes in Organizational Documents.
Each of the Loan Parties shall not, and shall not permit any
of its Subsidiaries to, amend in any respect its certificate of incorporation
(including any provisions or resolutions relating to capital stock), by-laws,
certificate of limited partnership, partnership agreement, certificate of
formation, limited liability company agreement or other organizational documents
without providing at least thirty (30) calendar days' prior written notice to
the Agent and the Banks and, in the event such change would be adverse to the
Banks as determined by the Agent in its sole discretion, obtaining the prior
written consent of the Required Banks.
8.2.15 Capital Expenditures and Leases.
(a) Each of the Loan Parties shall not, and shall not permit
any of its Subsidiaries to, make or commit to make (by way of the acquisition of
securities of a Person or otherwise) any Consolidated Capital Expenditures
except for expenditures not exceeding, in the aggregate for the Borrower and its
Subsidiaries, $3,500,000 during any fiscal year of the Borrower; provided, that
up to 25% of any such amount, if not expended in the fiscal year for which it is
permitted above, may be carried over for expenditure in the next following
fiscal year.
(b) Each of the Loan Parties shall not permit Consolidated
Lease Expense for any fiscal year of the Borrower to exceed $1,500,000.
8.2.16 Minimum Fixed Charge Coverage Ratio.
The Loan Parties shall not permit the Fixed Charge Coverage
Ratio, calculated as of the end of each fiscal quarter for the four fiscal
quarters then ended, to exceed the ratio set forth below for the periods
specified below:
Period Ratio
------ -----
Closing Date to 6/29/02 1.25 to 1.0
6/30/02 to 6/29/03 1.10 to 1.0
6/30/03 and thereafter 1.25 to 1.0
8.2.17 Maximum Leverage Ratio.
The Loan Parties shall not at any time permit its Leverage
Ratio to exceed the ratio set forth below for the periods specified below:
Period Ratio
------ -----
Closing Date to 3/30/00 3.25 to 1.0
3/31/00 to 3/30/01 3.00 to 1.0
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3/31/01 to 3/30/02 2.75 to 1.0
3/31/02 and thereafter 2.25 to 1.0
8.2.18 Minimum Interest Coverage Ratio.
The Loan Parties shall not permit its ratio of EBITDA to
consolidated interest expense of the Borrower and its Subsidiaries, calculated,
on a pro forma basis (after giving effect to the Transaction and the related
financing of the Acquisition), as of the end of each fiscal quarter for the four
fiscal quarters then ended, to be less than 3.00 to 1.0.
8.2.19 Minimum Consolidated Net Worth.
The Borrower shall not at any time permit Consolidated Net
Worth to be less than the Base Net Worth.
8.2.20 Amendments or Waivers of Certain Documents.
(a) The Borrower will not, and will not permit any of its
Subsidiaries to, amend or otherwise change the terms of any Existing Debt,
including the Notes (as defined in the Ranor Purchase Agreement).
(b) After the Closing Date, the Borrower will not, and will
not permit any of its Subsidiaries to, amend or otherwise change the terms of
any of the Acquisition Documents in any manner adverse to the Banks without the
prior consent of the Agent.
8.2.21 Restrictions on Transfer of Shares by Members of the
Control Group.
The Borrower shall not permit, and shall not permit any of its
Subsidiaries to permit, any member of the Control Group to sell any of the
Shares currently owned by such member until the earlier to occur of (i)
twenty-four (24) months from the Closing Date or (ii) the date upon which the
Borrower has achieved a Leverage Ratio of no greater than 2.50 to 1.0,
calculated as of the end of each fiscal quarter for any period of four
consecutive quarters following the Closing Date; provided however that no such
sale shall be permitted in any event at such time if there shall be any
Potential Default or Event of Default hereunder.
8.2.22 Payments on Ranor Notes.
The Borrower shall not make, nor permit to be made, any
payment on the Notes (as defined in the Ranor Purchase Agreement) unless (i) the
Loan Parties shall be in compliance with the covenants provided for in Section
8.2.16, 8.2.17, 8.2.18 and 8.2.19 (collectively, the "Financial Covenants") for
the most recent period of four consecutive fiscal quarters preceding such
proposed payment (calculated on a pro-forma basis as if such proposed payment
had been made as of the first day of such four quarter period) and (ii) no later
than five Business Days prior to any such proposed payment, the Agent shall have
received a certificate of
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an Authorized Officer with detailed calculations establishing to the reasonable
satisfaction of the Agent that the foregoing requirements have been satisfied.
8.3 Reporting Requirements.
The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations hereunder
and under the other Loan Documents and termination of the Commitments, the Loan
Parties will furnish or cause to be furnished to the Agent and each of the
Banks:
8.3.1 [Reserved].
8.3.2 Quarterly Financial Statements.
As soon as available and in any event within forty-five (45)
calendar days after the end of each of the first three fiscal quarters in each
fiscal year, financial statements of the Borrower, consisting of a consolidated
and consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, stockholders' equity and
cash flows for the fiscal quarter then ended and the fiscal year through that
date, all in reasonable detail and certified (subject to normal year-end audit
adjustments) by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower as having been prepared in accordance with GAAP,
consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year.
8.3.3 Annual Financial Statements.
As soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Borrower, financial statements of the
Borrower consisting of a consolidated and consolidating balance sheet as of the
end of such fiscal year, and related consolidated and consolidating statements
of income, stockholders' equity and cash flows for the fiscal year then ended,
all in reasonable detail and setting forth in comparative form the financial
statements as of the end of and for the preceding fiscal year, and certified by
independent certified public accountants of nationally recognized standing
satisfactory to the Agent. The certificate or report of accountants shall be
free of qualifications (other than any consistency qualification that may result
from a change in the method used to prepare the financial statements as to which
such accountants concur) and shall not indicate the occurrence or existence of
any event, condition or contingency which would materially impair the prospect
of payment or performance of any covenant, agreement or duty of any Loan Party
under any of the Loan Documents. The Loan Parties shall deliver with such
financial statements and certification by their accountants a letter of such
accountants to the Agent and the Banks substantially (i) to the effect that,
based upon their ordinary and customary examination of the affairs of the
Borrower, performed in connection with the preparation of such consolidated
financial statements, and in accordance with generally accepted auditing
standards, they are not aware of the existence of any condition or event which
constitutes an Event of Default or Potential Default or, if they are aware of
such condition or event, stating the nature thereof and confirming the
Borrower's calculations with respect to the
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certificate to be delivered pursuant to Section 8.3.4 [Certificate of the
Borrower] with respect to such financial statements and (ii) to the effect that
the Banks are intended to rely upon such accountant's certification of the
annual financial statements and that such accountants authorize the Loan Parties
to deliver such reports and certificate to the Banks on such accountants' behalf
(as expressed in a privity or reliance letter acceptable to the Agent).
8.3.3A Borrowing Base Certificate.
On or before the fifteenth (15th) calendar day of each
calendar month, the Borrower shall deliver to the Bank a Borrowing Base
Certificate. The Borrowing Base Certificate shall reflect Borrower's calculation
of the Borrowing Base as of the last day of the preceding calendar month, and a
comparison of such number to the Commitment and to the amount of outstanding
Obligations.
8.3.4 Certificate of the Borrower.
Concurrently with the financial statements of the Borrower
furnished to the Agent and to the Banks pursuant to Sections 8.3.2 [Quarterly
Financial Statements] and 8.3.3 [Annual Financial Statements], a certificate of
the Borrower signed by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower, in the form of Exhibit 8.3.4, to the effect that,
except as described pursuant to Section 8.3.5 [Notice of Default], (i) the
representations and warranties of the Borrower contained in Section 8.3.5 and in
the other Loan Documents are true on and as of the date of such certificate with
the same effect as though such representations and warranties had been made on
and as of such date (except representations and warranties which expressly
relate solely to an earlier date or time) and the Loan Parties have performed
and complied with all covenants and conditions hereof, (ii) no Event of Default
or Potential Default exists and is continuing on the date of such certificate
and (iii) containing calculations in sufficient detail to demonstrate compliance
as of the date of such financial statements with all financial covenants
contained in Section 8.2 [Negative Covenants]. The certificate delivered with
the annual financial statements pursuant to Section 8.3.3 shall include a
determination in reasonable detail of the Excess Cash Flow and the amount of the
Mandatory Prepayment of Excess Cash Flow applicable to such fiscal year.
8.3.5 Notice of Default.
Promptly after any officer of any Loan Party has learned of
the occurrence of an Event of Default or Potential Default, a certificate signed
by the Chief Executive Officer, President or Chief Financial Officer of such
Loan Party setting forth the details of such Event of Default or Potential
Default and the action which the such Loan Party proposes to take with respect
thereto.
8.3.6 Notice of Litigation.
Promptly after the commencement thereof, notice of all
actions, suits, proceedings or investigations before or by any Official Body or
any other Person against any Loan Party or Subsidiary of any Loan Party which
relate to the Collateral, involve a claim or series of claims in excess of
$100,000 (not covered by insurance) or which if adversely determined would
constitute a Material Adverse Change.
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8.3.7 Certain Events.
Written notice to the Agent:
(i) at least thirty (30) calendar days prior thereto,
with respect to any proposed sale or transfer of assets pursuant to Section
8.2.7 (iv) or (v),
(ii) within the time limits set forth in Section 8.2.14
[Changes in Organizational Documents], any amendment to the organizational
documents of any Loan Party; and
(iii) at least thirty (30) calendar days prior thereto,
with respect to any change in any Loan Party's locations from the locations set
forth in Schedule A to the Security Agreement.
8.3.8 Budgets, Forecasts, Other Reports and Information.
Promptly upon their becoming available to the Borrower:
(i) the annual budget and any forecasts or projections
of the Borrower, to be supplied not later than ten (10) days prior to
commencement of the fiscal year to which any of the foregoing may be applicable,
together with budgets and forecasts, including a comparison of actual to budget
financial statements, to be supplied not later than sixty (60) days after the
end of each of the first three fiscal quarters to which any of the foregoing may
be applicable,
(ii) any reports including management letters submitted
to the Borrower by independent accountants in connection with any annual,
interim or special audit,
(iii) any reports, notices or proxy statements generally
distributed by the Borrower to its stockholders on a date no later than the date
supplied to such stockholders,
(iv) regular or periodic reports, including Forms 10-K,
10-Q and 8-K, registration statements and prospectuses, filed by the Borrower
with the Securities and Exchange Commission,
(v) a copy of any order in any proceeding to which the
Borrower or any of its Subsidiaries is a party issued by any Official Body,
(vi) (a) on or prior to the Closing Date and within 90
days after the commencement of each fiscal year, a complete and accurate list of
the officers and directors of the Borrower and (b) within 30 days of any change
in personnel affecting the accuracy of such list, a notice specifying such
change in personnel,
(vii) with reasonable promptness, such other information
and data with respect to the Borrower or any of its Subsidiaries or any other
similar entity in
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which the Borrower or any Subsidiary has an investment, as from time to time may
be reasonably requested by any Bank and may be reasonably available to the
Borrower,
(viii) as soon as available and in any event within 90
days of the Closing Date, an opening balance sheet of the Borrower and its
Subsidiaries as of the Closing Date, after giving effect to the Transaction, the
borrowings hereunder and the other transactions contemplated hereby, accompanied
by an auditor's report thereon from Xxxxxx Xxxxxxxx or such other nationally
recognized accounting firm as shall be acceptable to the Agent, and
(ix) the Borrower shall also notify the Banks promptly
of the enactment or adoption of any Law which may result in a Material Adverse
Change.
8.3.9 Notices Regarding Plans and Benefit Arrangements.
8.3.9.1 Certain Events.
Promptly upon becoming aware of the occurrence thereof,
notice (including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:
(i) any Reportable Event with respect to the Borrower or
any other member of the ERISA Group (regardless of whether the obligation to
report said Reportable Event to the PBGC has been waived),
(ii) any Prohibited Transaction which could subject the
Borrower or any other member of the ERISA Group to a civil penalty assessed
pursuant to Section 502 (i) of ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Plan, any Benefit Arrangement or
any trust created thereunder,
(iii) any assertion of material withdrawal liability
with respect to any Multiemployer Plan,
(iv) any partial or complete withdrawal from a
Multiemployer Plan by the Borrower or any other member of the ERISA Group under
Title IV of ERISA (or assertion thereof), where such withdrawal is likely to
result in material withdrawal liability,
(v) any cessation of operations (by the Borrower or any
other member of the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA,
(vi) withdrawal by the Borrower or any other member of
the ERISA Group from a Multiple Employer Plan,
(vii) a failure by the Borrower or any other member of
the ERISA Group to make a payment to a Plan required to avoid imposition of a
Lien under Section 302(f) of ERISA,
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(viii) the adoption of an amendment to a Plan requiring
the provision of security to such Plan pursuant to Section 307 of ERISA, or
(ix) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or obligation to
make periodic contributions.
8.3.9.2 Notices of Involuntary Termination and Annual Reports.
Promptly after receipt thereof, copies of (a) all notices
received by the Borrower or any other member of the ERISA Group of the PBGC's
intent to terminate any Plan administered or maintained by the Borrower or any
member of the ERISA Group, or to have a trustee appointed to administer any such
Plan; and (b) at the request of the Agent or any Bank each annual report (IRS
Form 5500 series) and all accompanying schedules, the most recent actuarial
reports, the most recent financial information concerning the financial status
of each Plan administered or maintained by the Borrower or any other member of
the ERISA Group, and schedules showing the amounts contributed to each such Plan
by or on behalf of the Borrower or any other member of the ERISA Group in which
any of their personnel participate or from which such personnel may derive a
benefit, and each Schedule B (Actuarial Information) to the annual report filed
by the Borrower or any other member of the ERISA Group with the Internal Revenue
Service with respect to each such Plan.
8.3.9.3 Notice of Voluntary Termination.
Promptly upon the filing thereof, copies of any Form 5310, or
any successor or equivalent form to Form 5310, filed with the PBGC in connection
with the termination of any Plan.
9. DEFAULT
9.1 Events of Default.
An Event of Default shall mean the occurrence or existence of any
one or more of the following events or conditions (whatever the reason therefor
and whether voluntary, involuntary or effected by operation of Law):
9.1.1 Payments Under Loan Documents.
The Borrower shall fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity), Reimbursement Obligation or Letter of Credit Borrowing; or shall fail
to pay any interest on any Loan , Reimbursement Obligation or Letter of Credit
Borrowing or any other amount owing hereunder or under the other Loan Documents
within five days after such interest or other amount becomes due in accordance
with the terms hereof or thereof;
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9.1.2 Breach of Warranty.
Any representation or warranty made at any time by any of the
Loan Parties herein or by any of the Loan Parties in any other Loan Document, or
in any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading in
any material respect as of the time it was made or furnished;
9.1.3 Breach of Negative Covenants or Visitation Rights.
Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Section 8.2 [Negative Covenants];
9.1.4 Breach of Other Covenants.
Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of thirty
(30) days after any officer of any Loan Party becomes aware of the occurrence
thereof (such grace period to be applicable only in the event such default can
be remedied by corrective action of the Loan Parties as determined by the Agent
in its sole discretion);
9.1.5 Defaults in Other Agreements or Indebtedness.
A default or event of default shall occur at any time under
the terms of any other agreement involving borrowed money or the extension of
credit or any other Indebtedness under which any Loan Party or Subsidiary of any
Loan Party may be obligated as a borrower or guarantor in excess of $250,000 in
the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not) any indebtedness when due (whether at stated maturity, by
acceleration or otherwise) or if such breach or default permits or causes the
acceleration of any indebtedness (whether or not such right shall have been
waived) or the termination of any commitment to lend;
9.1.6 Final Judgments or Orders.
Any final judgments or orders for the payment of money in
excess of $100,000 in the aggregate shall be entered against any Loan Party by a
court having jurisdiction in the premises, which judgment is not discharged,
vacated, bonded or stayed pending appeal within a period of thirty (30) days
from the date of entry;
9.1.7 Loan Document Unenforceable.
Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against the party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged or contested or cease to give or
provide the respective Liens, security interests, rights, titles, interests,
remedies, powers or privileges intended to be created thereby;
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9.1.8 Uninsured Losses; Proceedings Against Assets.
There shall occur any material uninsured damage to or loss,
theft or destruction of any of the Collateral in excess of $100,000 or the
Collateral or any other of the Loan Parties' or any of their Subsidiaries'
assets are attached, seized, levied upon or subjected to a writ or distress
warrant; or such come within the possession of any receiver, trustee, custodian
or assignee for the benefit of creditors and the same is not cured within thirty
(30) days thereafter;
9.1.9 Notice of Lien or Assessment.
A notice of Lien or assessment in excess of $100,000 which is
not a Permitted Lien is filed of record with respect to all or any part of any
of the Loan Parties' or any of their Subsidiaries' assets by the United States,
or any department, agency or instrumentality thereof, or by any state, county,
municipal or other governmental agency, including the PBGC, or any taxes or
debts owing at any time or times hereafter to any one of these becomes payable
and the same is not paid within thirty (30) days after the same becomes payable;
9.1.10 Material Adverse Change; Insolvency.
There shall occur any Material Adverse Change or any Loan
Party or any Subsidiary of a Loan Party ceases to be solvent or admits in
writing its inability to pay its debts as they mature;
9.1.11 Events Relating to Plans and Benefit Arrangements.
Any of the following occurs: (i) any Reportable Event, which
the Agent determines in good faith constitutes grounds for the termination of
any Plan by the PBGC or the appointment of a trustee to administer or liquidate
any Plan, shall have occurred and be continuing; (ii) proceedings shall have
been instituted or other action taken to terminate any Plan, or a termination
notice shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in good faith
that the amount of the Borrower's liability is likely to exceed 10% of its
Consolidated Tangible Net Worth; (v) the Borrower or any member of the ERISA
Group shall fail to make any contributions when due to a Plan or a Multiemployer
Plan; (vi) the Borrower or any other member of the ERISA Group shall make any
amendment to a Plan with respect to which security is required under Section 307
of ERISA; (vii) the Borrower or any other member of the ERISA Group shall
withdraw completely or partially from a Multiemployer Plan; (viii) the Borrower
or any other member of the ERISA Group shall withdraw (or shall be deemed under
Section 4062(e) of ERISA to withdraw) from a Multiple Employer Plan; or (ix) any
applicable Law is adopted, changed or interpreted by any Official Body with
respect to or otherwise affecting one or more Plans, Multiemployer Plans or
Benefit Arrangements and, with respect to any of the events specified in (v),
(vi), (vii), (viii) or (ix), the Agent determines in good faith that any such
occurrence would be reasonably likely to materially and adversely affect the
total enterprise represented by the Borrower and the other members of the ERISA
Group;
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9.1.12 Cessation of Business.
Any Loan Party or Subsidiary of a Loan Party ceases to conduct
its business as contemplated, except as expressly permitted under Section 8.2.6
[Liquidations, Mergers, Etc.] or 8.2.7, or any Loan Party or Subsidiary of a
Loan Party is enjoined, restrained or in any way prevented by court order from
conducting all or any material part of its business and such injunction,
restraint or other preventive order is not dismissed within thirty (30) days
after the entry thereof;
9.1.13 Ownership.
(i) Any Person or "group" (within the meaning of Section
13(d) or 14(d) of the Securities Exchange Act of 1934, as amended) other than
Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx or Xxxx Xxxxxxx shall obtain the power (whether or
not exercised) to elect a majority of the Borrower's directors or (ii) the Board
of Directors of the Borrower shall not consist of a majority of Continuing
Directors; "Continuing Directors" shall mean the directors of the Borrower on
the Closing Date and each other director, if such other director's nomination
for election to the Board of Directors of the Borrower is recommended by a
majority of the then Continuing Directors, provided that notwithstanding
anything in this Section 9.1.13 to the contrary, the transfer of Capital Stock
owned by any of Xxxxxx Xxxxxx, Xxxxxxx Xxxxxx or Xxxx Xxxxxxx upon their death
shall not be deemed an Event of Default hereunder;
9.1.14 Involuntary Proceedings.
A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party or Subsidiary of a Loan Party in an involuntary case under any
applicable bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or similar official) of any Loan
Party or Subsidiary of a Loan Party for any substantial part of its property, or
for the winding-up or liquidation of its affairs, and such proceeding shall
remain undismissed or unstayed and in effect for a period of sixty (60)
consecutive days or such court shall enter a decree or order granting any of the
relief sought in such proceeding; or
9.1.15 Voluntary Proceedings.
Any Loan Party or Subsidiary of a Loan Party shall commence a
voluntary case under any applicable bankruptcy, insolvency, reorganization or
other similar law now or hereafter in effect, shall consent to the entry of an
order for relief in an involuntary case under any such law, or shall consent to
the appointment or taking possession by a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or other similar official) of
itself or for any substantial part of its property or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its
debts as they become due, or shall take any action in furtherance of any of the
foregoing.
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9.2 Consequences of Event of Default.
9.2.1 Events of Default Other Than Bankruptcy, Insolvency or
Reorganization Proceedings.
If an Event of Default specified under Sections 9.1.1 through
9.1.13 shall occur and be continuing, the Banks and the Agent shall be under no
further obligation to make Loans or issue Letters of Credit, as the case may be,
and the Agent may, and upon the request of the Required Banks, shall (i) by
written notice to the Borrower, declare the unpaid principal amount of the Notes
then outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness of the Borrower to the Banks hereunder and thereunder to be
forthwith due and payable, and the same shall thereupon become and be
immediately due and payable to the Agent for the benefit of each Bank without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived, and (ii) require the Borrower to, and the Borrower
shall thereupon, deposit in a non-interest-bearing account with the Agent, as
cash collateral for its Obligations under the Loan Documents, an amount equal to
the maximum amount currently or at any time thereafter available to be drawn on
all outstanding Letters of Credit, and the Borrower hereby pledges to the Agent
and the Banks, and grants to the Agent and the Banks a security interest in, all
such cash as security for such Obligations. Upon the curing of all existing
Events of Default to the satisfaction of the Required Banks, the Agent shall
return such cash collateral to the Borrower; and
9.2.2 Bankruptcy, Insolvency or Reorganization Proceedings.
If an Event of Default specified under Section 9.1.14
[Involuntary Proceedings] or 9.1.15 [Voluntary Proceedings] shall occur, the
Banks shall be under no further obligations to make Loans hereunder and the
unpaid principal amount of the Loans then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness of the Borrower to the Banks
hereunder and thereunder shall be immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived; and
9.2.3 Set-off.
If an Event of Default shall occur and be continuing, any Bank
to whom any Obligation is owed by any Loan Party hereunder or under any other
Loan Document or any participant of such Bank which has agreed in writing to be
bound by the provisions of Section 10.13 [Equalization of Banks] and any branch,
Subsidiary or Affiliate of such Bank or participant anywhere in the world shall
have the right, in addition to all other rights and remedies available to it,
without notice to such Loan Party, to set-off against and apply to the then
unpaid balance of all the Loans and all other Obligations of the Borrower and
the other Loan Parties hereunder or under any other Loan Document any debt owing
to, and any other funds held in any manner for the account of, the Borrower or
such other Loan Party by such Bank or participant or by such branch, Subsidiary
or Affiliate, including all funds in all deposit accounts (whether time or
demand, general or special, provisionally credited or finally credited, or
otherwise) now or hereafter maintained by the Borrower or such other Loan Party
for its own account (but not including funds held in custodian or trust
accounts) with such Bank or participant or such branch, Subsidiary or Affiliate.
Such right shall exist whether or not any Bank or the Agent shall have
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made any demand under this Agreement or any other Loan Document, whether or not
such debt owing to or funds held for the account of the Borrower or such other
Loan Party is or are matured or unmatured and regardless of the existence or
adequacy of any Collateral, Guaranty or any other security, right or remedy
available to any Bank or the Agent; and
9.2.4 Suits, Actions, Proceedings.
If an Event of Default shall occur and be continuing, and
whether or not the Agent shall have accelerated the maturity of Loans pursuant
to any of the foregoing provisions of this Section 9.2, the Agent or any Bank,
if owed any amount with respect to the Loans, may proceed to protect and enforce
its rights by suit in equity, action at law and/or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement or the other Loan Documents, including as permitted by applicable
Law the obtaining of the ex parte appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Agent or such Bank;
and
9.2.5 Application of Proceeds.
From and after the date on which the Agent has taken any
action pursuant to this Section 9.2 and until all Obligations of the Loan
Parties have been paid in full, any and all proceeds received by the Agent from
any sale or other disposition of the Collateral, or any part thereof, or the
exercise of any other remedy by the Agent, shall be applied as follows:
(i) first, to reimburse the Agent and the Banks for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys'
and paralegals' fees and legal expenses, incurred by the Agent or the Banks in
connection with realizing on the Collateral or collection of any Obligations of
any of the Loan Parties under any of the Loan Documents, including advances made
by the Banks or any one of them or the Agent for the reasonable maintenance,
preservation, protection or enforcement of, or realization upon, the Collateral,
including advances for taxes, insurance, repairs and the like and reasonable
expenses incurred to sell or otherwise realize on, or prepare for sale or other
realization on, any of the Collateral;
(ii) second, to the repayment of all Indebtedness then
due and unpaid of the Loan Parties to the Banks incurred under this Agreement or
any of the other Loan Documents, whether of principal, interest, fees, expenses
or otherwise, on a pro-rata basis; and
(iii) the balance, if any, to the applicable Loan Party
or as otherwise required by Law.
9.2.6 Other Rights and Remedies.
In addition to all of the rights and remedies contained in
this Agreement or in any of the other Loan Documents (including the Mortgage),
the Agent shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code or other applicable Law, all of which rights and
remedies shall be cumulative and non-exclusive, to the extent
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permitted by Law. The Agent may, and upon the request of the Required Banks
shall, exercise all post-default rights granted to the Agent and the Banks under
the Loan Documents or applicable Law.
9.3 Notice of Sale.
Any notice required to be given by the Agent of a sale, lease, or
other disposition of the Collateral or any other intended action by the Agent,
if given ten (10) days prior to such proposed action, shall constitute
commercially reasonable and fair notice thereof to the Borrower.
10. THE AGENT
10.1 Appointment.
Each Bank hereby irrevocably designates, appoints and authorizes PNC
Bank to act as Agent for such Bank under this Agreement and to execute and
deliver or accept on behalf of each of the Banks the other Loan Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize, the Agent to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and any other instruments and agreements referred to herein, and
to exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. PNC Bank agrees to act as the Agent
on behalf of the Banks to the extent provided in this Agreement.
10.2 Delegation of Duties. The Agent may perform any of its duties
hereunder by or through agents or employees (provided such delegation does not
constitute a relinquishment of its duties as Agent) and, subject to Sections
10.5 [Reimbursement of Agent by Borrower, Etc.] and 10.6, shall be entitled to
engage and pay for the advice or services of any attorneys, accountants or other
experts concerning all matters pertaining to its duties hereunder and to rely
upon any advice so obtained.
10.3 Nature of Duties; Independent Credit Investigation.
The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this Agreement a
fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Without limiting the generality of the foregoing,
the use of the term "agent" in this Agreement with reference to the Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. Each
Bank expressly acknowledges (i) that the Agent has not made any
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representations or warranties to it and that no act by the Agent hereafter
taken, including any review of the affairs of any of the Loan Parties, shall be
deemed to constitute any representation or warranty by the Agent to any Bank;
(ii) that it has made and will continue to make, without reliance upon the
Agent, its own independent investigation of the financial condition and affairs
and its own appraisal of the creditworthiness of each of the Loan Parties in
connection with this Agreement and the making and continuance of the Loans
hereunder; and (iii) except as expressly provided herein, that the Agent shall
have no duty or responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information with respect thereto,
whether coming into its possession before the making of any Loan or at any time
or times thereafter.
10.4 Actions in Discretion of Agent; Instructions From the Banks.
The Agent agrees, upon the written request of the Required Banks (or
such greater number of Banks as may be required hereunder, including Section
11.1), to take or refrain from taking any action of the type specified as being
within the Agent's rights, powers or discretion herein, provided that the Agent
shall not be required to take any action which exposes the Agent to personal
liability or which is contrary to this Agreement or any other Loan Document or
applicable Law. In the absence of a request by the Required Banks, the Agent
shall have authority, in its sole discretion, to take or not to take any such
action, unless this Agreement specifically requires the consent of the Required
Banks or all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
10.6 [Exculpatory Provisions, Etc.]. Subject to the provisions of Section 10.6,
no Bank shall have any right of action whatsoever against the Agent as a result
of the Agent acting or refraining from acting hereunder in accordance with the
instructions of the Required Banks, or in the absence of such instructions, in
the absolute discretion of the Agent.
10.5 Reimbursement and Indemnification of Agent by the Borrower.
The Borrower unconditionally agrees to pay or reimburse the Agent
and hold the Agent harmless against (a) liability for the payment of all
reasonable out-of-pocket costs, expenses and disbursements, including fees and
expenses of counsel (including the allocated costs of staff counsel), appraisers
and environmental consultants, incurred by the Agent (i) in connection with the
development, negotiation, preparation, printing, execution, administration,
syndication, interpretation and performance of this Agreement and the other Loan
Documents, (ii) relating to any requested amendments, waivers or consents
pursuant to the provisions hereof, (iii) in connection with the enforcement of
this Agreement or any other Loan Document or collection of amounts due hereunder
or thereunder or the proof and allowability of any claim arising under this
Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (iv) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, and
(b) 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 the Agent,
in its capacity as such, in any way relating to or arising out of this Agreement
or any other Loan Documents or any action taken or omitted by the Agent
hereunder or thereunder, provided that the Borrower shall not be liable for
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any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements if the same results
from the Agent's gross negligence or willful misconduct, or if the Borrower was
not given notice of the subject claim and the opportunity to participate in the
defense thereof, at its expense (except that the Borrower shall remain liable to
the extent such failure to give notice does not result in a loss to the
Borrower), or if the same results from a compromise or settlement agreement
entered into without the consent of the Borrower, which shall not be
unreasonably withheld. In addition, the Borrower agrees to reimburse and pay all
reasonable out-of-pocket expenses of the Agent's regular employees and agents
engaged periodically to perform audits of the Loan Parties' books, records and
business properties.
10.6 Exculpatory Provisions; Limitation of Liability.
Neither the Agent nor any of its directors, officers, employees,
agents, attorneys or Affiliates shall (a) be liable to any Bank for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused by its or their own gross
negligence or willful misconduct, (b) be responsible in any manner to any of the
Banks for the effectiveness, enforceability, genuineness, validity or the due
execution of this Agreement or any other Loan Documents or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Agreement or any other Loan
Documents, or (c) be under any obligation to any of the Banks to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Loan Parties, or the financial
condition of the Loan Parties, or the existence or possible existence of any
Event of Default or Potential Default. No claim may be made by any of the Loan
Parties, any Bank, the Agent or any of their respective Subsidiaries against the
Agent, any Bank or any of their respective directors, officers, employees,
agents, attorneys or Affiliates, or any of them, for any special, indirect or
consequential damages or, to the fullest extent permitted by Law, for any
punitive damages in respect of any claim or cause of action (whether based on
contract, tort, statutory liability, or any other ground) based on, arising out
of or related to any Loan Document or the transactions contemplated hereby or
any act, omission or event occurring in connection therewith, including the
negotiation, documentation, administration or collection of the Loans, and each
of the Loan Parties, (for itself and on behalf of each of its Subsidiaries), the
Agent and each Bank hereby waive, releases and agree never to xxx upon any claim
for any such damages, whether such claim now exists or hereafter arises and
whether or not it is now known or suspected to exist in its favor. Each Bank
agrees that, except for notices, reports and other documents expressly required
to be furnished to the Banks by the Agent hereunder or given to the Agent for
the account of or with copies for the Banks, the Agent and each of its
directors, officers, employees, agents, attorneys or Affiliates shall not have
any duty or responsibility to provide any Bank with an credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Loan Parties which may come
into the possession of the Agent or any of its directors, officers, employees,
agents, attorneys or Affiliates.
10.7 Reimbursement and Indemnification of Agent by Banks.
Each Bank agrees to reimburse and indemnify the Agent (to the extent
not reimbursed by the Borrower and without limiting the Obligation of the
Borrower to do so) in
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proportion to its Ratable Share of the Commitments from and against all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements, including attorneys' fees and disbursements
(including the allocated costs of staff counsel), and costs of appraisers and
environmental consultants, of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against the Agent, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by the Agent hereunder or thereunder, provided that
no Bank shall be liable for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements (a) if the same results from the Agent's gross negligence or
willful misconduct, or (b) if such Bank was not given notice of the subject
claim and the opportunity to participate in the defense thereof, at its expense
(except that such Bank shall remain liable to the extent such failure to give
notice does not result in a loss to the Bank), or (c) if the same results from a
compromise and settlement agreement entered into without the consent of such
Bank, which shall not be unreasonably withheld. In addition, each Bank agrees
promptly upon demand to reimburse the Agent (to the extent not reimbursed by the
Borrower and without limiting the Obligation of the Borrower to do so) in
proportion to its Ratable Share for all amounts due and payable by the Borrower
to the Agent in connection with the Agent's periodic audit of the Loan Parties'
books, records and business properties.
10.8 Reliance by Agent.
The Agent shall be entitled to rely upon any writing, telegram,
telex or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
10.9 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Bank or the Borrower referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."
10.10 Notices.
The Agent shall promptly send to each Bank a copy of all notices
received from the Borrower pursuant to the provisions of this Agreement or the
other Loan Documents promptly upon receipt thereof. The Agent shall promptly
notify the Borrower and the other Banks of each change in the Base Rate and the
effective date thereof.
10.11 Banks in Their Individual Capacities.
With respect to its Revolving Credit Commitment, the Revolving
Credit Loans, the Term Loan Commitment and the Term Loan made by it and any
other rights and powers given to
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it as a Bank hereunder or under any of the other Loan Documents, the Agent shall
have the same rights and powers hereunder as any other Bank and may exercise the
same as though it were not the Agent, and the term "Banks" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. PNC
Bank and its Affiliates and each of the Banks and their respective Affiliates
may, without liability to account, except as prohibited herein, make loans to,
accept deposits from, discount drafts for, act as trustee under indentures of,
and generally engage in any kind of banking or trust business with, the Loan
Parties and their Affiliates, in the case of the Agent, as though it were not
acting as Agent hereunder and in the case of each Bank, as though such Bank were
not a Bank hereunder. The Banks acknowledge that, pursuant to such activities,
the Agent or its Affiliates may (i) receive information regarding the Loan
Parties (including information that may be subject to confidentiality
obligations in favor of the Loan Parties) and acknowledge that the Agent shall
be under no obligation to provide such information to them, and (ii) accept fees
and other consideration from the Loan Parties for services in connection with
this Agreement and otherwise without having to account for the same to the
Banks.
10.12 Holders of Notes.
The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
10.13 Equalization of Banks.
The Banks and the holders of any participations in any Notes agree
among themselves that, with respect to all amounts received by any Bank or any
such holder for application on any Obligation hereunder or under any Note or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Banks and such holders
in proportion to their interests in payments under the Notes, except as
otherwise provided in Section 4.4.3 [Agent's and Bank's Rights], 5.4.2
[Replacement of a Bank] or 5.6 [Additional Compensation in Certain
Circumstances]. The Banks or any such holder receiving any such amount shall
purchase for cash from each of the other Banks an interest in such Bank's Loans
in such amount as shall result in a ratable participation by the Banks and each
such holder in the aggregate unpaid amount under the Notes, provided that if all
or any portion of such excess amount is thereafter recovered from the Bank or
the holder making such purchase, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, together with interest
or other amounts, if any, required by law (including court order) to be paid by
the Bank or the holder making such purchase.
10.14 Successor Agent.
The Agent may resign as Agent by giving not less than thirty (30)
days' prior written notice to the Borrower. If the Agent shall resign under this
Agreement, then either (a) the
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Required Banks shall appoint from among the Banks a successor agent for the
Banks, subject to the consent of the Borrower, such consent not to be
unreasonably withheld, or (b) if a successor agent shall not be so appointed and
approved within the thirty (30) day period following the Agent's notice to the
Banks of its resignation, then the Agent shall appoint, with the consent of the
Borrower, such consent not to be unreasonably withheld, a successor agent who
shall serve as Agent until such time as the Required Banks appoint and the
Borrower consents to the appointment of a successor agent. Upon its appointment
pursuant to either clause (a) or (b) above, such successor agent shall succeed
to the rights, powers and duties of the Agent, and the term "Agent" shall mean
such successor agent, effective upon its appointment, and the former Agent's
rights, powers and duties as Agent shall be terminated without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement. After the resignation of any Agent hereunder, the provisions of
this Section 10 shall inure to the benefit of such former Agent and such former
Agent shall not by reason of such resignation be deemed to be released from
liability for any actions taken or not taken by it while it was an Agent under
this Agreement.
10.15 Agent's Fee.
The Borrower shall pay to the Agent a periodic nonrefundable fee
(the "Agent's Fee") under the terms of the Agent's Letter.
10.16 Availability of Funds.
The Agent may assume that each Bank has made or will make the
proceeds of a Loan available to the Agent unless the Agent shall have been
notified by such Bank on or before the later of (1) the close of Business on the
Business Day preceding the Borrowing Date with respect to such Loan or two (2)
hours before the time on which the Agent actually funds the proceeds of such
Loan to the Borrower (whether using its own funds pursuant to this Section 10.16
or using proceeds deposited with the Agent by the Banks and whether such funding
occurs before or after the time on which Banks are required to deposit the
proceeds of such Loan with the Agent). The Agent may, in reliance upon such
assumption (but shall not be required to), make available to the Borrower a
corresponding amount. If such corresponding amount is not in fact made available
to the Agent by such Bank, the Agent shall be entitled to recover such amount on
demand from such Bank (or, if such Bank fails to pay such amount forthwith upon
such demand from the Borrower) together with interest thereon, in respect of
each day during the period commencing on the date such amount was made available
to the Borrower and ending on the date the Agent recovers such amount, at a rate
per annum equal to (i) the Federal Funds Effective Rate during the first three
(3) days after such interest shall begin to accrue and (ii) the applicable
interest rate in respect of such Loan after the end of such three-day period.
10.17 Calculations.
In the absence of gross negligence or willful misconduct, the Agent
shall not be liable for any error in computing the amount payable to any Bank
whether in respect of the Loans, fees or any other amounts due to the Banks
under this Agreement. In the event an error in computing any amount payable to
any Bank is made, the Agent, the Borrower and each affected Bank shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to
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correct such error, and any compensation therefor will be calculated at the
Federal Funds Effective Rate.
10.18 Beneficiaries.
Except as expressly provided herein, the provisions of this Section
10 are solely for the benefit of the Agent and the Banks, and the Loan Parties
shall not have any rights to rely on or enforce any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for any
of the Loan Parties.
11. MISCELLANEOUS
11.1 Modifications, Amendments or Waivers.
With the written consent of the Required Banks, the Agent, acting on
behalf of all the Banks, and the Borrower, on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Banks or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the Obligations of the
Loan Parties hereunder or thereunder. Any such agreement, waiver or consent made
with such written consent shall be effective to bind all the Banks and the Loan
Parties; provided, that, without the written consent of all the Banks, no such
agreement, waiver or consent may be made which will:
11.1.1 Increase of Commitment; Extension or Expiration Date.
Increase the amount of the Revolving Credit Commitment, Term
Loan A Commitment or Term Loan B Commitment of any Bank hereunder or extend the
Expiration Date;
11.1.2 Extension of Payment; Reduction of Principal Interest
or Fees; Modification of Terms of Payment.
Whether or not any Loans are outstanding, subordinate any of
the Loans to any Indebtedness, extend the time for payment of principal or
interest of any Loan (excluding the due date of any mandatory prepayment of a
Loan or any mandatory Commitment reduction in connection with such a mandatory
prepayment hereunder except for mandatory reductions of the Commitments on the
Expiration Date), the Commitment Fee or any other fee payable to any Bank, or
reduce the principal amount of or the rate of interest borne by any Loan or
reduce the Commitment Fee or any other fee payable to any Bank, or otherwise
affect the terms of payment of the principal of or interest of any Loan, the
Commitment Fee or any other fee payable to any Bank;
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11.1.3 Release of Collateral or Guarantor.
Except for sales of assets permitted by Section 8.2.7
[Disposition of Assets or Subsidiaries], release any Collateral consisting of
capital stock or other ownership interests of any Loan Party or its Subsidiary
or any material portion of the assets of any Loan Party, any Guarantor from its
Obligations under the Guaranty Agreement or any other security for any of the
Loan Parties' Obligations; or
11.1.4 Miscellaneous
Amend Section 5.2 [Pro Rata Treatment of Banks], 10.6
[Exculpatory Provisions, Etc.] or 10.13 [Equalization of Banks] or this Section
11.1 alter any provision regarding the pro rata treatment of the Banks, change
the definition of Required Banks, or change any requirement providing for the
Banks or the Required Banks to authorize the taking of any action hereunder;
provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity as Agent or as the
issuer of Letters of Credit shall be effective without the written consent of
the Agent.
11.2 No Implied Waivers; Cumulative Remedies; Writing Required.
No course of dealing and no delay or failure of the Agent or any
Bank in exercising any right, power, remedy or privilege under this Agreement or
any other Loan Document shall affect any other or future exercise thereof or
operate as a waiver thereof, nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power,
remedy or privilege preclude any further exercise thereof or of any other right,
power, remedy or privilege. The rights and remedies of the Agent and the Banks
under this Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of any Bank of
any breach or default under this Agreement or any such waiver of any provision
or condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.
11.3 Reimbursement and Indemnification of Banks by the Borrower;
Taxes.
The Borrower agrees unconditionally upon demand to pay or reimburse
to each Bank (other than the Agent, as to which the Borrower's Obligations are
set forth in Section 10.5 [Reimbursement of Agent By Borrower, Etc.]) and to
save such Bank harmless against (i) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements (including fees and expenses of
counsel (including allocated costs of staff counsel) for each Bank except with
respect to (a) and (b) below), incurred by such Bank (a) in connection with the
administration and interpretation of this Agreement, and other instruments and
documents to be delivered hereunder, (b) relating to any amendments, waivers or
consents pursuant to the provisions hereof, (c) in connection with the
enforcement of this Agreement or any other Loan Document, or collection of
amounts due hereunder or thereunder or the proof and allowability of any claim
arising under this Agreement or any other Loan Document, whether in bankruptcy
or receivership proceedings or otherwise, and (d) in any workout or
restructuring or in connection with the protection,
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preservation, exercise or enforcement of any of the terms hereof or of any
rights hereunder or under any other Loan Document or in connection with any
foreclosure, collection or bankruptcy proceedings, or (ii) 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 such Bank, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by such Bank hereunder or thereunder, provided that
the Borrower shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (A) if the same results from such Bank's gross
negligence or willful misconduct, or (B) if the Borrower was not given notice of
the subject claim and the opportunity to participate in the defense thereof, at
its expense (except that the Borrower shall remain liable to the extent such
failure to give notice does not result in a loss to the Borrower), or (C) if the
same results from a compromise or settlement agreement entered into without the
consent of the Borrower, which shall not be unreasonably withheld. The Banks
will attempt to minimize the fees and expenses of legal counsel for the Banks
which are subject to reimbursement by the Borrower hereunder by considering the
usage of one law firm to represent the Banks and the Agent if appropriate under
the circumstances. The Borrower agrees unconditionally to pay all stamp,
document, transfer, recording or filing taxes or fees and similar impositions
now or hereafter determined by the Agent or any Bank to be payable in connection
with this Agreement or any other Loan Document, and the Borrower agrees
unconditionally to save the Agent and the Banks harmless from and against any
and all present or future claims, liabilities or losses with respect to or
resulting from any omission to pay or delay in paying any such taxes, fees or
impositions.
11.4 Holidays.
Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next
Business Day and such extension of time shall be included in computing interest
and fees, except that the Loans shall be due on the Business Day preceding the
Expiration Date if the Expiration Date is not a Business Day. Whenever any
payment or action to be made or taken hereunder (other than payment of the
Loans) shall be stated to be due on a day which is not a Business Day, such
payment or action shall be made or taken on the next following Business Day
(except as provided in Section 4.2 [Interest Periods] with respect to Interest
Periods under the Euro-Rate Option), and such extension of time shall not be
included in computing interest or fees, if any, in connection with such payment
or action.
11.5 Funding by Branch, Subsidiary or Affiliate.
11.5.1 Notional Funding.
Each Bank shall have the right from time to time, without
notice to the Borrower, to deem any branch, Subsidiary or Affiliate (which for
the purposes of this Section 11.5 shall mean any corporation or association
which is directly or indirectly controlled by or is under direct or indirect
common control with any corporation or association which directly or indirectly
controls such Bank) of such Bank to have made, maintained or funded any Loan to
which the Euro-Rate Option applies at any time, provided that immediately
following (on the assumption that a payment were then due from the Borrower to
such other office), and as a result
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of such change, the Borrower would not be under any greater financial obligation
pursuant to Section 5.6 [Additional Compensation in Certain Circumstances] than
it would have been in the absence of such change. Notional funding offices may
be selected by each Bank without regard to such Bank's actual methods of making,
maintaining or funding the Loans or any sources of funding actually used by or
available to such Bank.
11.5.2 Actual Funding.
Each Bank shall have the right from time to time to make or
maintain any Loan by arranging for a branch, Subsidiary or Affiliate of such
Bank to make or maintain such Loan subject to the last sentence of this Section
11.5.2. If any Bank causes a branch, Subsidiary or Affiliate to make or maintain
any part of the Loans hereunder, all terms and conditions of this Agreement
shall, except where the context clearly requires otherwise, be applicable to
such part of the Loans to the same extent as if such Loans were made or
maintained by such Bank, but in no event shall any Bank's use of such a branch,
Subsidiary or Affiliate to make or maintain any part of the Loans hereunder
cause such Bank or such branch, Subsidiary or Affiliate to incur any cost or
expenses payable by the Borrower hereunder or require the Borrower to pay any
other compensation to any Bank (including any expenses incurred or payable
pursuant to Section 5.6 [Additional Compensation in Certain Circumstances])
which would otherwise not be incurred.
11.6 Standard Automotive Corporation as Agent for Loan Parties.
Each Loan Party hereby irrevocably appoints Standard
Automotive Corporation as the borrowing agent and attorney-in-fact for the Loan
Parties (the "Administrative Borrower") which appointment shall remain in full
force and effect unless and until the Agent shall have received prior written
notice signed by all of the Loan Parties that such appointment has been revoked
and that another Loan Party has been appointed Administrative Borrower. Each
Loan Party hereby irrevocably appoints and authorizes the Administrative
Borrower (i) to provide the Agent with all notices with respect to Loans
obtained for the benefit of any Loan Party and all other notices and
instructions under this Agreement and (ii) to take such action as the
Administrative Borrower deems appropriate on its behalf to obtain Loans and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. Each Loan Party hereby irrevocably appoints and
authorizes the Administrative Borrower to provide the Agent with all notices and
to take all action as the Administrative Borrower deems appropriate with respect
to all Letters of Credit under this Agreement. It is understood that the
handling of the loan account and Collateral of the Loan Parties in a combined
fashion, as more fully set forth herein, is done solely as an accommodation to
the Loan Parties in order to utilize the collective borrowing powers of the Loan
Parties in the most efficient and economical manner and at their request, and
that neither the Agent nor any Bank shall incur liability to the Loan Parties as
a result hereof. Each of the Loan Parties expects to derive benefit, directly or
indirectly, from the handling of the loan account and the Collateral in a
combined fashion since the successful operation of each Loan Party is dependent
on the continued successful performance of the integrated group. To induce the
Agent and the Banks to do so, and in consideration thereof, each of the Loan
Parties hereby jointly and severally agrees to indemnify the Agent and the Banks
and hold the Agent and the Banks harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Agent or such Banks
by any of the Loan Parties or by any third party whosoever, arising from or
incurred by reason of (a) the handling of the loan account
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and Collateral of the Loan Parties as herein provided, (b) the Agent and the
Banks relying on any instructions of the Administrative Borrower, or (c) any
other action taken by the Agent or any Bank hereunder or under the other Loan
Documents.
11.7 Notices.
All notices, requests, demands, directions and other communications
(as used in this Section 11.7, collectively referred to as "notices") given to
or made upon any party hereto under the provisions of this Agreement shall be by
telephone or in writing (including telex or facsimile communication) unless
otherwise expressly permitted hereunder and shall be delivered or sent by telex
or facsimile to the respective parties at the addresses and numbers set forth
under their respective names on Schedule 1.1(B) hereof or in accordance with any
subsequent unrevoked written direction from any party to the others. All notices
shall, except as otherwise expressly herein provided, be effective (a) in the
case of telex or facsimile, when received, (b) in the case of hand-delivered
notice, when hand-delivered, (c) in the case of telephone, when telephoned,
provided, however, that in order to be effective, telephonic notices must be
confirmed in writing no later than the next day by letter, facsimile or telex,
(d) if given by mail, four (4) days after such communication is deposited in the
mail with first-class postage prepaid, return receipt requested, and (e) if
given by any other means (including by air courier), when delivered; provided,
that notices to the Agent shall not be effective until received. Any Bank giving
any notice to any Loan Party shall simultaneously send a copy thereof to the
Agent, and the Agent shall promptly notify the other Banks of the receipt by it
of any such notice.
11.8 Severability.
The provisions of this Agreement are intended to be severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole
or in part in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without in
any manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.
11.9 Governing Law.
Each Letter of Credit and Section 2.9 [Letter of Credit Subfacility]
shall be subject to the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce Publication No. 500, as the
same may be revised or amended from time to time, and to the extent not
inconsistent therewith, the internal laws of the State of New Jersey without
regard to its conflict of laws principles and the balance of this Agreement
shall be deemed to be a contract under the Laws of the State of New Jersey and
for all purposes shall be governed by and construed and enforced in accordance
with the internal laws of the State of New Jersey without regard to its conflict
of laws principles.
11.10 Prior Understanding.
This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the
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transactions provided for herein and therein, including any prior
confidentiality agreements and commitments.
11.11 Duration; Survival.
All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the Agent or the Banks, the
making of Loans, issuance of Letters of Credit, or payment in full of the Loans.
All covenants and agreements of the Loan Parties contained in Sections 8.1
[Affirmative Covenants], 8.2 [Negative Covenants] and 8.3 [Reporting
Requirements] herein shall continue in full force and effect from and after the
date hereof so long as the Borrower may borrow or request Letters of Credit
hereunder and until termination of the Commitments and payment in full of the
Loans and expiration or termination of all Letters of Credit. All covenants and
agreements of the Borrower contained herein relating to the payment of
principal, interest, premiums, additional compensation or expenses and
indemnification, including those set forth in the Notes, Section 5 [Payments]
and Sections 10.5 [Reimbursement of Agent by Borrower, Etc.], 10.7
[Reimbursement of Agent by Banks, Etc.] and 11.3 [Reimbursement of Banks by
Borrower; Etc.], shall survive payment in full of the Loans, expiration or
termination of the Letters of Credit and termination of the Commitments.
11.12 Successors and Assigns.
(i) This Agreement shall be binding upon and shall inure
to the benefit of the Banks, the Agent, the Loan Parties and their respective
successors and assigns, except that none of the Loan Parties may assign or
transfer any of its rights and Obligations hereunder or any interest herein.
Each Bank may, at its own cost, make assignments of or sell participations in
all or any part of its Commitments and the Loans made by it to one or more banks
or other entities, subject to the consent of the Borrower and the Agent with
respect to any assignee, such consent not to be unreasonably withheld, provided
that (1) no consent of the Borrower shall be required (A) if an Event of Default
exists and is continuing, or (B) in the case of an assignment by a Bank to an
Affiliate of such Bank, and (2) any assignment by a Bank to a Person other than
an Affiliate of such Bank may not be made in amounts less than the lesser of
$2,500,000 or the amount of the assigning Bank's Commitment. In the case of an
assignment, upon receipt by the Agent of the Assignment and Assumption
Agreement, the assignee shall have, to the extent of such assignment (unless
otherwise provided therein), the same rights, benefits and obligations as it
would have if it had been a signatory Bank hereunder, the Commitments shall be
adjusted accordingly, and upon surrender of any Note subject to such assignment,
the Borrower shall execute and deliver a new Note to the assignee in an amount
equal to the amount of the Revolving Credit Commitment or Term Loan assumed by
it and a new Revolving Credit Note or Term Note to the assigning Bank in an
amount equal to the Revolving Credit Commitment or Term Loan retained by it
hereunder. Any Bank which assigns any or all of its Commitment or Loans to a
Person other than an Affiliate of such Bank shall pay to the Agent a service fee
in the amount of $3,000 for each assignment. In the case of a participation, the
participant shall only have the rights specified in Section 9.2.3 [Set-off] (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto and not to include any voting rights except with
respect to
-101-
changes of the type referenced in Sections 11.1.1 [Increase of Commitment,
Etc.], 11.1.2 [Extension of Payment, Etc.], or 11.1.3 [Release of Collateral or
Guarantor], all of such Bank's obligations under this Agreement or any other
Loan Document shall remain unchanged, and all amounts payable by any Loan Party
hereunder or thereunder shall be determined as if such Bank had not sold such
participation.
(ii) Any assignee or participant which is not
incorporated under the Laws of the United States of America or a state thereof
shall deliver to the Borrower and the Agent the form of certificate described in
Section 11.17 [Tax Withholding Clause] relating to federal income tax
withholding. Each Bank may furnish any publicly available information concerning
any Loan Party or its Subsidiaries and any other information concerning any Loan
Party or its Subsidiaries in the possession of such Bank from time to time to
assignees and participants (including prospective assignees or participants),
provided that such assignees and participants agree to be bound by the
provisions of Section 11.13 [Confidentiality].
(iii) Notwithstanding any other provision in this
Agreement, any Bank may at any time pledge or grant a security interest in all
or any portion of its rights under this Agreement, its Note and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of the FRB
or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or consent
of the Borrower or the Agent. No such pledge or grant of a security interest
shall release the transferor Bank of its obligations hereunder or under any
other Loan Document.
11.13 Confidentiality.
11.13.1 General.
The Agent and the Banks each agree to keep confidential all
information obtained from any Loan Party or its Subsidiaries which is designated
by the Borrower in writing to be confidential, except as provided below, and to
use such information only in connection with their respective capacities under
this Agreement and for the purposes contemplated hereby. The Agent and the Banks
shall be permitted to disclose such information (i) to outside legal counsel,
accountants and other professional advisors who need to know such information in
connection with the administration and enforcement of this Agreement, subject to
agreement of such Persons to maintain the confidentiality, (ii) to assignees and
participants as contemplated by Section 11.12, (iii) to the extent requested by
any bank regulatory authority or, with notice to the Borrower, as otherwise
required by applicable Law or by any subpoena or similar legal process, or in
connection with any investigation or proceeding arising out of the transactions
contemplated by this Agreement, (iv) if it becomes publicly available other than
as a result of a breach of this Agreement or becomes available from a source not
known to be subject to confidentiality restrictions, or (v) if the Borrower
shall have consented to such disclosure.
11.13.2 Sharing Information With Affiliates of the Banks.
Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Borrower or one or more of its Affiliates (in connection with this Agreement
or otherwise) by any Bank or by one or
-102-
more Subsidiaries or Affiliates of such Bank and each of the Loan Parties hereby
authorizes each Bank to share any information delivered to such Bank by such
Loan Party and its Subsidiaries pursuant to this Agreement, or in connection
with the decision of such Bank to enter into this Agreement, to any such
Subsidiary or Affiliate of such Bank, it being understood that any such
Subsidiary or affiliate of any Bank receiving such information shall be bound by
the provisions of Section 11.12.1 as if it were a Bank hereunder. Such
Authorization shall survive the repayment of the Loans and other Obligations and
the termination of the Commitments.
11.14 Counterparts.
This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.
11.15 Agent's or Bank's Consent.
Whenever the Agent's or any Bank's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a condition
to any action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
and to condition its consent upon the giving of additional collateral, the
payment of money or any other matter.
11.16 Exceptions.
The representations, warranties and covenants contained herein shall
be independent of each other, and no exception to any representation, warranty
or covenant shall be deemed to be an exception to any other representation,
warranty or covenant contained herein unless expressly provided, nor shall any
such exceptions be deemed to permit any action or omission that would be in
contravention of applicable Law.
11.17 CONSENT TO FORUM; WAIVER OF JURY TRIAL.
EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE STATE COURTS OF MIDDLESEX COUNTY, NEW JERSEY AND THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY, AND WAIVES PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF
PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN PARTY AT
THE ADDRESSES PROVIDED FOR IN SECTION 11.7 AND SERVICE SO MADE SHALL BE DEEMED
TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. EACH LOAN PARTY, THE AGENT AND THE BANKS HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE
COLLATERAL TO THE FULL EXTENT PERMITTED BY LAW.
-103-
11.18 Tax Withholding Clause.
Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
agrees that it will deliver to each of the Borrower and the Agent two (2) duly
completed copies of the following: (i) Internal Revenue Service Form W-9, 4224
or 1001, or other applicable form prescribed by the Internal Revenue Service,
certifying that such Bank, assignee or participant is entitled to receive
payments under this Agreement and the other Loan Documents without deduction or
withholding of any United States federal income taxes, or is subject to such tax
at a reduced rate under an applicable tax treaty, or (ii) Internal Revenue
Service Form W-8 or other applicable form or a certificate of such Bank,
assignee or participant indicating that no such exemption or reduced rate is
allowable with respect to such payments. Each Bank, assignee or participant
required to deliver to the Borrower and the Agent a form or certificate pursuant
to the preceding sentence shall deliver such form or certificate as follows: (A)
each Bank which is a party hereto on the Closing Date shall deliver such form or
certificate at least five (5) Business Days prior to the first date on which any
interest or fees are payable by the Borrower hereunder for the account of such
Bank; (B) each assignee or participant shall deliver such form or certificate at
least five (5) Business Days before the effective date of such assignment or
participation (unless the Agent in its sole discretion shall permit such
assignee or participant to deliver such form or certificate less than five (5)
Business Days before such date in which case it shall be due on the date
specified by the Agent). Each Bank, assignee or participant which so delivers a
Form W-8, W-9, 4224 or 1001 further undertakes to deliver to each of the
Borrower and the Agent two (2) additional copies of such form (or a successor
form) on or before the date that such form expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form so
delivered by it, and such amendments thereto or extensions or renewals thereof
as may be reasonably requested by the Borrower or the Agent, either certifying
that such Bank, assignee or participant is entitled to receive payments under
this Agreement and the other Loan Documents without deduction or withholding of
any United States federal income taxes or is subject to such tax at a reduced
rate under an applicable tax treaty or stating that no such exemption or reduced
rate is allowable. The Agent shall be entitled to withhold United States federal
income taxes at the full withholding rate unless the Bank, assignee or
participant establishes an exemption or that it is subject to a reduced rate as
established pursuant to the above provisions.
11.19 Joinder of Guarantors.
Any Subsidiary of the Borrower which is required to join this
Agreement as a Guarantor pursuant to Section 8.2.9 [Subsidiaries, Partnerships
and Joint Ventures] shall execute and deliver to the Agent (i) a Guarantor
Joinder in substantially the form attached hereto as Exhibit 1.1(G)(1) pursuant
to which it shall join as a Guarantor each of the documents to which the
Guarantors are parties; (ii) documents in the forms described in Section 7.1
[First Loans] modified as appropriate to relate to such Subsidiary; and (iii)
documents necessary to grant and perfect Prior Security Interests to the Agent
for the benefit of the Banks in all Collateral held by such Subsidiary. The Loan
Parties shall deliver such Guarantor Joinder and related documents to the Agent
within five (5) Business Days after the date of the filing of such Subsidiary's
articles of incorporation if the Subsidiary is a corporation, the date of the
filing of its certificate of limited partnership if it is a limited partnership
or the date of its organization if it is an entity other than a limited
partnership or corporation.
-104-
11.20 Contribution.
(a) On any date a payment in respect of the Obligations is
made, the right of contribution, if any, of the Borrower and each Guarantor
(each an "Obligor") against each Contributor shall be determined as provided in
the immediately succeeding sentence, with the right of contribution of each
Obligor to be revised and restated as of each such date. At any time that a
payment (a "Relevant Payment") is made by an Obligor in respect of the
Obligations and results in the aggregate payments made by such Obligor in
respect of the Obligations to and including the date of such Relevant Payment to
exceed such Obligor's Contribution Percentage of the aggregate payments made by
all Obligors in respect of the Obligations to and including such date (such
excess, the "Aggregate Excess Amount"), each such Obligor shall have a right of
contribution against each Contributor who has made payments in respect of the
Obligations to and including such date in an aggregate amount less than such
Contributor's Contribution Percentage of the aggregate payments made to and
including such date by all Obligors in respect of the Obligations (the aggregate
amount of such deficit, the "Aggregate Deficit Amount") in an amount equal to
(x) a fraction the numerator of which is the Aggregate Excess Amount of such
Obligor and the denominator of which is the sum of the Aggregate Excess Amounts
of all Obligors multiplied by (y) the Aggregate Deficit Amount of such
Contributor. An Obligor's right of contribution, if any, pursuant to this
paragraph shall arise at the time of each computation, subject to adjustment at
the time of subsequent computations, provided that such Obligor may not take any
action to enforce such right until the Obligations have been paid in full, it
being expressly recognized and agreed by all Obligors that any Obligor's right
of contribution arising pursuant hereto against any Contributor shall be
expressly junior and subordinate to such Contributor's obligations and
liabilities in respect of the Obligations. As used in this Section 11.20(i)
"Contributor" shall mean each Obligor required to make any payment to any other
Obligor pursuant to this Section 11.20, (ii) the "Contribution Percentage" of
each Obligor shall mean the percentage obtained by dividing (x) the Benefit
Amount of such Obligor by (y) the aggregate Benefit Amount of all Obligors and
(iii) the "Benefit Amount" of each Obligor shall mean the net value of the
benefits to such Obligor from the credit extensions made under the Loan
Documents.
(b) Each of the Obligors recognizes and agrees that, except
for any right of contribution arising pursuant to Section 11.20(a), each Obligor
which makes any payment in respect of the Obligations shall have no right of
contribution, reimbursement or subrogation against any other Obligor in respect
of such payment, any such right of contribution, reimbursement or subrogation
arising under law or otherwise being expressly waived by all Obligors.
(c) Each of the Obligors recognizes and acknowledges that the
rights to contribution arising hereunder shall constitute an asset in favor of
the party entitled to such contribution. In this connection each Obligor has the
right to waive its contribution right against any Contributor to the extent that
after giving effect to such waiver such Obligor would remain solvent in the
determination of the Agent.
[Signature Page Follows]
-105-
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly
authorized, have executed this Agreement as of the day and year first above
written.
WITNESS: STANDARD AUTOMOTIVE
CORPORATION
____________________________________ By:___________________________________
Title:________________________________
GUARANTORS
WITNESS: XXXXXXX INVESTMENTS, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: AJAX MANUFACTURING COMPANY, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: CPS ENTERPRISES, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: XXXXX INDUSTRIES, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: XXXXX INDUSTRIES, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: CRITICAL COMPONENTS CORP.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: R&S TRUCK BODY COMPANY, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: CPS TRAILER CO.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: RANOR, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: NORAY RESOURCES, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: CLAYFORT INDUSTRIES, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: KYLAN INDUSTRIES, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: CABORE RESOURCES, INC.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: DENORE RESOURCES S.R.L. de C.V.
____________________________________ By:___________________________________
Title:________________________________
WITNESS: MECOX S.A. de C.V.
____________________________________ By:___________________________________
Title:________________________________
BANKS
PNC BANK, NATIONAL ASSOCIATION,
individually and as Agent
By:___________________________________
Title:________________________________
ING (U.S.) CAPITAL LLC
By:___________________________________
Title:________________________________
FIRSTAR BANK, N.A.
By:___________________________________
Title:________________________________
SUMMIT BANK
By:___________________________________
Title:________________________________
SCHEDULE 1.1(B)
COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
Page 1 of 8
Part 1 - Commitments of Banks and Addresses for Notices to Banks
------------------------------------------------------------------------------------------------------------------------------------
Ratable
Amount of Share of
Commitment Revolving
for Amount of Amount of Amount of Credit Ratable
Revolving Commitment Commitment Commitment Loans and Share of
Credit for Term for Term for Term Total Term Loan A Term Loan
Bank Loans Loans A Loan A-1 Loans B Commitment Loans B Loans
---- ----- ------- -------- ------- ---------- ----- -------
------------------------------------------------------------------------------------------------------------------------------------
Name: PNC Bank, N.A.
Address: One PNC Plaza - 22nd Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxx Xxxxx
Telephone (000) 000-0000 $12,000,000 $5,439,000 $8,436,000 $0 $25,875,000 60% 0%
Telecopy: (000) 000-0000
With a copy to:
Name: PNC Bank, N.A.
Address: Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxxx Xxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000
------------------------------------------------------------------------------------------------------------------------------------
Name: ING (U.S.) Capital LLC $0 $0 $0 $25,000,000 $25,000,000 0% 100%
Address: 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1.1(B)
Page 2 of 8
------------------------------------------------------------------------------------------------------------------------------------
Name: Firstar Bank $3,500,000 $1,586,375 $2,460,500 $0 $7,546,875 17.5% 0%
Address: 000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Mr. Xxxxx Xxxxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000
------------------------------------------------------------------------------------------------------------------------------------
Name: Summit Bank $4,500,000 $2,039,625 $3,163,500 $0 $9,703,125 22.5% 0%
Address: Raritan Center Plaza II
00 Xxxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xx. Xxxxxxx Xxxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000
------------------------------------------------------------------------------------------------------------------------------------
Totals $20,000,000 $9,065,000 $14,060,000 $25,000,000 $68,125,000 100% 100%
------------------------------------------------------------------------------------------------------------------------------------
SCHEDULE 1.1(B)
Page 3 of 8
Part 2 - Addresses for Notices to Borrower and Guarantors:
AGENT
Name: PNC Bank, National Association
Address: One PNC Plaza - 22nd Floor
000 Xxxxx Xxxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Xx. Xxxxxx Xxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000
With a copy to:
Name: PNC Bank, National Association
Address: Xxx Xxxxx Xxxxxx Xxxxxxxxx
Xxxx Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
Name: Xxxxxxxx Ingersoll Professional Corporation
Address: 000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: ING (U.S.) Capital LLC
Address: 00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxx Xxxxxxx
Telephone (000) 000-0000
Telecopy: (000) 000-0000
SCHEDULE 1.1(B)
Page 4 of 8
Name: Firstar Bank
Address: 000 Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: Summit Bank
Address: Raritan Center Plaza II
00 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx: Xxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Summit Bank
Raritan Center Plaza II
00 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
BORROWER:
Name: STANDARD AUTOMOTIVE CORPORATION
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy to: Xxxxx XxXxxx, Esq.
Phillips, Nizer, Xxxxxxxx, Krim & Ballon, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
GUARANTORS:
Name: XXXXXXX INVESTMENTS, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
SCHEDULE 1.1(B)
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SCHEDULE 1.1(B)
Page 5 of 8
Name: AJAX MANUFACTURING COMPANY, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: CPS ENTERPRISES, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: XXXXX INDUSTRIES, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: XXXXX INDUSTRIES, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: CRITICAL COMPONENTS CORP.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SCHEDULE 1.1(B)
Page 6 of 8
Name: R&S TRUCK BODY COMPANY, INC.
Address: Xxxxx 0000, X.X. Xxx 000
Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: CPS TRAILER CO.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: RANOR, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: NORAY RESOURCES, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: CLAYFORT INDUSTRIES, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SCHEDULE 1.1(B)
Page 7 of 8
Name: KYLAN INDUSTRIES, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: CABORE RESOURCES, INC.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: DENORE RESOURCES S.R.L. de C.V.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Name: MECOX S.A. de C.V.
Address: 000 Xxxxx 000 Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
With a copy in each case to: Xxxxx XxXxxx, Esq.
Phillips, Nizer, Xxxxxxxx, Krim & Ballon, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
SCHEDULE 1.1(B)
Schedule 2.2(A)
SCHEDULED TERM LOAN A REPAYMENTS
------------------------------------------------
Installment Date Installment Amount
---------------- ------------------
------------------------------------------------
6/30/99 $245,000.00
9/30/99 $367,500.00
12/31/99 $367,500.00
3/31/00 $367,500.00
6/30/00 $367,500.00
9/30/00 $367,500.00
12/31/00 $367,500.00
3/31/01 $367,500.00
6/30/01 $367,500.00
9/30/01 $490,000.00
12/31/01 $490,000.00
3/31/02 $490,000.00
6/30/02 $490,000.00
9/30/02 $490,000.00
12/31/02 $490,000.00
3/31/03 $490,000.00
6/30/03 $490,000.00
9/30/03 $490,000.00
12/31/03 $490,000.00
3/31/04 $490,000.00
6/30/04 $490,000.00
------------------------------------------------
SCHEDULE 2.2(A)
Schedule 2.2(A-1)
SCHEDULE TERM LOAN A-1 REPAYMENTS
------------------------------------------------
Installment Date Installment Amount
---------------- ------------------
------------------------------------------------
6/30/99 $380,000.00
9/30/99 $570,000.00
12/31/99 $570,000.00
3/31/00 $570,000.00
6/30/00 $570,000.00
9/30/00 $570,000.00
12/31/00 $570,000.00
3/31/01 $570,000.00
6/30/01 $570,000.00
9/30/01 $760,000.00
12/31/01 $760,000.00
3/31/02 $760,000.00
6/30/02 $760,000.00
9/30/02 $760,000.00
12/31/02 $760,000.00
3/31/03 $760,000.00
6/30/03 $760,000.00
9/30/03 $760,000.00
12/31/03 $760,000.00
3/31/04 $760,000.00
6/30/04 $760,000.00
------------------------------------------------
SCHEDULE 2.2(A-1)
Schedule 2.2(B)
SCHEDULED TERM LOAN B REPAYMENTS
------------------------------------------------
Installment Date Installment Amount
---------------- ------------------
------------------------------------------------
9/30/99 $62,500
12/31/99 $62,500
3/31/00 $62,500
6/30/00 $62,500
9/30/00 $62,500
12/31/00 $62,500
3/31/01 $62,500
6/30/01 $62,500
9/30/01 $62,500
12/31/01 $62,500
3/31/02 $62,500
6/30/02 $62,500
9/30/02 $62,500
12/31/02 $62,500
3/31/03 $62,500
6/30/03 $62,500
9/30/03 $62,500
12/31/03 $62,500
3/31/04 $62,500
6/30/04 $62,500
9/30/04 $62,500
12/31/04 $62,500
3/31/05 $62,500
6/14/05 $23,562,500
------------------------------------------------
SCHEDULE 2.2(B)
SCHEDULE 2.4
--------------------------------------------------------------
Installment Date Installment Amount
---------------- ------------------
--------------------------------------------------------------
ING (U.S.) Capital LLC $375,000.00
-----------------------------------
Summit Bank $49,042.97
-----------------------------------
Firstar Bank, N.A. $38,144.53
-----------------------------------
PNC Bank, N.A. $81,738.28
--------------------------------------------------------------
SCHEDULE 2.4
