[EXECUTION COPY]
CREDIT AGREEMENT
among
ANCHOR ADVANCED PRODUCTS, INC.,
as Borrower,
and
THE GUARANTORS FROM TIME TO TIME PARTIES HERETO,
as Guarantors,
THE LENDERS IDENTIFIED HEREIN,
and
NATIONSBANK, N.A.,
as Agent
DATED AS OF APRIL 2, 1997
TABLE OF CONTENTS
SECTION 1 DEFINITIONS AND ACCOUNTING TERMS.......................................................................1
1.1 Definitions..........................................................................................1
1.2 Computation of Time Periods and Other Definitional Provisions.......................................23
1.3 Accounting Terms....................................................................................23
SECTION 2 CREDIT FACILITIES ....................................................................................24
2.1 Loans...............................................................................................24
2.2 Letter of Credit Subfacility........................................................................25
2.3 Continuations and Conversions.......................................................................30
2.4 Minimum Amounts.....................................................................................31
2.5 Notes...............................................................................................31
SECTION 3 GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT..........................................31
3.1 Interest............................................................................................31
3.2 Place and Manner of Payments........................................................................32
3.3 Prepayments.........................................................................................32
3.4 Fees................................................................................................33
3.5 Payment in full at Maturity.........................................................................34
3.6 Computations of Interest and Fees...................................................................34
3.7 Pro Rata Treatment..................................................................................35
3.8 Allocation of Payments After Event of Default.......................................................36
3.9 Sharing of Payments.................................................................................37
3.10 Capital Adequacy...................................................................................38
3.11 Inability To Determine Interest Rate...............................................................38
3.12 Illegality.........................................................................................38
3.13 Requirements of Law................................................................................39
3.14 Taxes..............................................................................................40
3.15 Indemnity..........................................................................................42
SECTION 4 GUARANTY .............................................................................................43
4.1 Guaranty of Payment.................................................................................43
4.2 Obligations Unconditional...........................................................................43
4.3 Modifications.......................................................................................44
4.4 Waiver of Rights....................................................................................44
4.5 Reinstatement.......................................................................................45
4.6 Remedies............................................................................................45
4.7 Limitation of Guaranty..............................................................................45
4.8 Rights of Contribution..............................................................................46
SECTION 5 CONDITIONS PRECEDENT..................................................................................46
5.1 Closing Conditions..................................................................................46
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5.2 Conditions to All Extensions of Credit..............................................................50
SECTION 6 REPRESENTATIONS AND WARRANTIES........................................................................51
6.1 Financial Condition.................................................................................51
6.2 No Material Change..................................................................................52
6.3 Organization and Good Standing......................................................................52
6.4 Due Authorization...................................................................................52
6.5 No Conflicts........................................................................................53
6.6 Consents............................................................................................53
6.7 Enforceable Obligations.............................................................................53
6.8 No Default..........................................................................................53
6.9 Ownership...........................................................................................53
6.10 Indebtedness.......................................................................................54
6.11 Litigation.........................................................................................54
6.12 Taxes..............................................................................................54
6.13 Compliance with Law................................................................................54
6.14 ERISA..............................................................................................54
6.15 Subsidiaries.......................................................................................55
6.16 Use of Proceeds; Margin Stock......................................................................56
6.17 Government Regulation..............................................................................56
6.18 Environmental Matters..............................................................................56
6.19 Intellectual Property..............................................................................57
6.20 Solvency...........................................................................................58
6.21 Investments........................................................................................58
6.22 Location of Collateral.............................................................................58
6.23 Disclosure.........................................................................................58
6.24 Licenses, etc......................................................................................58
6.25 No Burdensome Restrictions.........................................................................58
6.26 Labor Matters......................................................................................59
6.27 Nature of Business.................................................................................59
SECTION 7 AFFIRMATIVE COVENANTS.................................................................................59
7.1 Information Covenants...............................................................................59
7.2 Preservation of Existence and Franchises............................................................62
7.3 Books and Records...................................................................................62
7.4 Compliance with Law.................................................................................62
7.5 Payment of Taxes and Other Indebtedness.............................................................62
7.6 Insurance...........................................................................................63
7.7 Maintenance of property.............................................................................63
7.8 Performance of Obligations..........................................................................63
7.9 Collateral..........................................................................................63
7.10 Use of Proceeds....................................................................................64
7.11 Audits/Inspections.................................................................................64
7.12 Financial Covenants................................................................................65
7.13 Additional Credit Parties..........................................................................66
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SECTION 8 NEGATIVE COVENANTS ...................................................................................66
8.1 Indebtedness........................................................................................67
8.2 Liens...............................................................................................67
8.3 Nature of Business..................................................................................67
8.4 Consolidation and Merger............................................................................68
8.5 Asset Dispositions..................................................................................68
8.6 Investments.........................................................................................69
8.7 Restricted Payments.................................................................................69
8.8 Transactions with Affiliates........................................................................70
8.9 Restrictions on the Parent; Ownership of Subsidiaries...............................................70
8.10 Fiscal Year; Organizational Documents..............................................................70
8.11 Prepayment or Modification of Indebtedness.........................................................71
8.12 Limitations........................................................................................71
8.13 Sale Leasebacks....................................................................................71
8.14 Capital Expenditures...............................................................................72
8.15 No Further Negative Pledges........................................................................72
8.16 Operating Lease Obligations........................................................................72
8.17 Foreign Subsidiaries...............................................................................72
SECTION 9 EVENTS OF DEFAULT ....................................................................................73
9.1 Events of Default...................................................................................73
9.2 Acceleration; Remedies..............................................................................75
SECTION 10 AGENCY PROVISIONS ...................................................................................76
10.1 Appointment........................................................................................76
10.2 Delegation of Duties...............................................................................76
10.3 Exculpatory Provisions.............................................................................77
10.4 Reliance on Communications.........................................................................77
10.5 Notice of Default..................................................................................78
10.6 Non-Reliance on Agent and Other Lenders............................................................78
10.7 Indemnification....................................................................................78
10.8 Agent in Its Individual Capacity...................................................................79
10.9 Successor Agent....................................................................................79
SECTION 11 MISCELLANEOUS .......................................................................................80
11.1 Notices............................................................................................80
11.2 Right of Set-Off...................................................................................80
11.3 Benefit of Agreement...............................................................................80
11.4 To Waiver; Remedies Cumulative.....................................................................83
11.5 Payment of Expenses; Indemnification...............................................................83
11.6 Amendments, Waivers and Consents...................................................................84
11.7 Counterparts.......................................................................................85
11.8 Pleadings..........................................................................................85
11.9 Defaulting Lender..................................................................................85
11.10 Survival of Indemnification and Representations and Warranties....................................85
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11.11 Governing Law; Venue..............................................................................85
11.12 Waiver of Jury Trial..............................................................................86
11.13 Time..............................................................................................86
11.14 Severability......................................................................................86
11.15 Entirety..........................................................................................87
11.16 Binding Effect....................................................................................87
11.17 Confidentiality...................................................................................87
SCHEDULES
---------
Schedule 1.1A Commitment Percentages
Schedule 1.1B Existing Investments
Schedule 1.1C Existing Liens
Schedule 5.1(d) Form of Opinion of Xxxxxxxx, Xxxxxxx & Xxxxxxx
Schedule 6.6 Consents, Approvals and Authorizations
Schedule 6.10 Existing Indebtedness
Schedule 6.11 Litigation
Schedule 6.15 Existing Subsidiaries
Schedule 6.18 Environmental Matters
Schedule 6.19 Intellectual Property
Schedule 6.22(a) Personal Property Locations
Schedule 6.22(b) Chief Executive Offices
Schedule 7.6 Existing Insurance Coverage
Schedule 11.1 Addresses for Notice
EXHIBITS
--------
Exhibit 2.1 Form of Notice of Borrowing
Exhibit 2.3 Form of Notice of Continuation/Conversion
Exhibit 2.5(a) Form of Note
Exhibit 7.1(c) Form of Officer's Certificate
Exhibit 7.1(d) Form of Borrowing Base Report
Exhibit 7.13 Form of Joinder Agreement
Exhibit 11.3 Form of Assignment Agreement
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of April 2, 1997 (as amended, modified,
restated or supplemented from time to time, the "Credit Agreement"), is by and
among ANCHOR ADVANCED PRODUCTS, INC., a Delaware corporation (the "Borrower"),
the Guarantors (as defined herein), the Lenders (as defined herein) and
NATIONSBANK, N.A., as Agent for the Lenders (in such capacity, the "Agent").
RECITALS
WHEREAS, the Borrower has requested that the Lenders provide a
$15,000,000 revolving credit facility with a sublimit of the $5,000,000 for
letters of credit to the Borrower; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set forth.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS AND ACCOUNTING TERMS
--------------------------------
1.1 Definitions.
As used herein, the following terms shall have the meanings herein
specified unless the context otherwise requires. Defined terms herein shall
include in the singular number the plural and in the plural the singular:
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date, as provided in Section 7.13.
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Affiliate" means, with respect to any Person, any other
Person directly or indirectly controlling (including but not limited to
all directors and officers of such Person), controlled by or under
direct or indirect common control with such Person. A Person shall be
deemed to control a corporation if such Person possesses, directly or
indirectly, the power (i) to vote 10% or more of the securities having
ordinary voting power for the election of directors of
such corporation or (ii) to direct or cause direction of the management
and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise.
"Agency Services Address" means NationsBank, N.A.,
NC-001-15-04, Independence Center, 15th Floor, 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx 00000, Attn: Agency Services, or such other address as may be
identified by written notice from the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the
heading hereof, together with any successors or assigns.
"Applicable Percentage" means for the Loans, Standby Letter of
Credit Fee and Commitment Fees, the appropriate applicable percentages
corresponding to the Leverage Ratio in effect as of the most recent
Calculation Date as shown below:
=======================================================================================================================
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Applicable Applicable
Applicable Applicable Percentage For Percentage For
Percentage For Percentage For Standby Letter Commitment Fees
Pricing Leverage Eurodollar Base Rate of Credit Fee
Level Ratio Loans Loans
-----------------------------------------------------------------------------------------------------------------------
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I greater than or equal 2.25% 1.25% 2.25% 0.50%
to 4.75 to 1.00
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II less than 4.75 to 2.00% 1.00% 2.00% 0.50%
1.00 but
greater than or equal
to 3.50 to 1.00
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
III less than 3.50 to 1.75% 0.75% 1.75% 0.50%
1.00 but
greater than or equal
to 3.00 to 1.00
-----------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------
IV less than 3.00 to 1.00 1.50% 0.50% 1.50% 0.50%
=======================================================================================================================
The Applicable Percentages shall be determined and adjusted quarterly
on the date (each a "Calculation Date") five Business Days after the
date by which the Borrower is required to provide the officer's
certificate in accordance with the provisions of Section 7.1(c);
provided, however, that (i) the initial Applicable Percentages shall be
based on Pricing Level II until the first Calculation Date to occur
after the Closing Date, and, thereafter, the Applicable Percentages
shall be determined by the Leverage Ratio as of the fiscal quarter end
immediately preceding the applicable Calculation Date; provided
further, however, that, if the Applicable Percentages determined
pursuant to the foregoing terms of this clause (i) as of any
Calculation Date occurring during the period from the Closing Date
until the first Calculation Date to occur subsequent to September 30,
1998 shall be based on Pricing Level III or Pricing Level IV, then the
Applicable Percentages shall be based instead on Pricing Level II until
the next succeeding Calculation Date to occur, and
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(ii) if the Borrower fails to provide the officer's certificate to the
Agency Services Address as required by Section 7.1(c) on or before the
most recent Calculation Date, the Applicable Percentages from such
Calculation Date shall be based on Pricing Level I until such time as
an appropriate officer's certificate is provided, whereupon the Pricing
Level shall be determined by the Leverage Ratio as of the fiscal
quarter end immediately preceding the applicable Calculation Date.
Except as set forth above, each Applicable Percentage shall be
effective from one Calculation Date until the next Calculation Date.
Any adjustment in the Applicable Percentages shall be applicable to all
existing Loans and Letters of Credit as well as any new Loans made or
Letters of Credit issued.
"Application Period" shall have the meaning assigned to such
term in Section 8.5.
"Asset Disposition" means the disposition of any or all of the
assets (including without limitation the Capital Stock of a Subsidiary)
of any Consolidated Party whether by sale, lease, transfer or
otherwise. The term "Asset Disposition" shall include any "Asset Sale"
under and as defined in the Senior Note Indenture.
"Asset Disposition Prepayment Event" means, with respect to
any Asset Disposition other than an Excluded Asset Disposition, the
failure of the Borrower to apply (or cause to be applied) the Net Cash
Proceeds of such Asset Disposition to the purchase, acquisition or
construction of Eligible Assets during the Application Period for such
Asset Disposition.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment
or taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its property or
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make any general assignment for the benefit of creditors; or (iv) such
Person shall be unable to, or shall admit in writing its inability to,
pay its debts generally as they become due.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus 1/2 of 1% or (b) the Prime Rate in effect on such day. If for
any reason the Agent shall have determined (which determination shall
be conclusive absent manifest error) that it is unable after due
inquiry to ascertain the Federal Funds Rate for any reason, including
the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition
until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Borrowing Base" means, as of any day, the sum of (a) 80% of
Eligible Receivables, (b) 50% of Eligible Inventory which is not
work-in-process inventory and (c) 25% of Eligible Inventory which is
work-in-process inventory, in each case as set forth in the most recent
Borrowing Base Certificate delivered to the Agent and the Lenders in
accordance with the terms of Section 7.1(d); provided, however, that
subject to the further requirements of clause (vi) of the definition of
"Eligible Receivables" set forth in this Section 1.1, Receivables owing
by an account debtor located outside of the United States shall not at
any time constitute for more than 20% of the Borrowing Base.
"Business Day" means any day other than a Saturday, a Sunday,
a legal holiday or a day on which banking institutions are authorized
or required by law or other governmental action to close in Charlotte,
North Carolina or New York, New York; provided that in the case of
Eurodollar Loans, such day is also a day on which dealings between
banks are carried on in U.S. dollar deposits in the London interbank
market.
"Calculation Date" has the meaning set forth in the definition
of Applicable Percentage.
"Capital Expenditures" means all expenditures of the
Consolidated Parties which, in accordance with GAAP, would be
classified as capital expenditures.
"Capital Lease" means, as applied to any Person, any lease of
any property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
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"Capital Lease Obligations" means, with respect to any Person
as of any date, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a
balance sheet of such Person as of such date in accordance with GAAP.
"Capital Stock" means (i) in the case of a corporation,
capital stock, (ii) in the case of an association or business entity,
any and all shares, interests, participations, rights or other
equivalents (however designated) of capital stock, (iii) in the case of
a partnership, partnership interests (whether general or limited), (iv)
in the case of a limited liability company, membership interests and
(v) any other interest or participation that confers on a Person the
right to receive a share of the profits and losses of, or distributions
of assets of, the issuing Person.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition, (b) U.S. dollar denominated time deposits and certificates
of deposit of (i) any Lender, (ii) any domestic commercial bank of
recognized standing having capital and surplus in excess of
$500,000,000 or (iii) any bank whose short-term commercial paper rating
from S&P is at least A-1 or the equivalent thereof or from Xxxxx'x is
at least P-1 or the equivalent thereof (any such bank being an
"Approved Bank"), in each case with maturities of not more than one
year from the date of acquisition, (c) commercial paper and variable or
fixed rate notes issued by any Approved Bank (or by the parent company
thereof) or any variable rate notes issued by, or guaranteed by, any
domestic corporation rated A-1 (or the equivalent thereof) or better by
S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within one year of the date of acquisition, (d) repurchase
agreements with a bank or trust company (including any of the Lenders)
or recognized securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by
the United States of America in which the applicable Credit Party shall
have a perfected first priority security interest (subject to no other
Liens) and having, on the date of purchase thereof, a fair market value
of at least 100% of the amount of the repurchase obligations and (e)
Investments, classified in accordance with GAAP as current assets, in
money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $500,000,000 and the
portfolios of which are limited to Investments of the character
described in the foregoing subdivisions (a) through (d).
"Cash Taxes" means, with respect to any Person for any period,
the aggregate of all taxes of such Person, as determined in accordance
with GAAP, to the extent the same are paid in cash during such period.
"Change of Control" means any of the following events:
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(i) the failure of the Parent to own all of the
Capital Stock of the Borrower;
(ii) during any period of up to 24 consecutive
months, commencing after the Closing Date, individuals who at
the beginning of such 24 month period were directors of the
Parent (together with any new director whose election by the
Parent's Board of Directors or whose nomination for election
by the Parent's shareholders was approved by a vote of at
least two-thirds of the directors then still in office who
either were directors at the beginning of such period or whose
election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
directors of the Parent then in office;
(iii) at any time prior to an Initial Public
Offering, (a) the failure of the members of the Sponsor Group
to own at least 51%, in the aggregate, of the Capital Stock of
the Parent or (b) a Person or group (as such term is defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended) other than the Sponsor Group shall have acquired
beneficial ownership, directly or indirectly, of, or shall
have acquired by contract or otherwise, or shall have entered
into a contract or arrangement that, upon consummation, will
result in its or their acquisition of, control over, 35% or
more of the Capital Stock of the Parent;
(iv) at any time after an Initial Public Offering,
(a) the failure of the Sponsor Group to own, directly or
indirectly, at least 30%, in the aggregate, of the Capital
Stock of the Parent (or, subsequent to a merger or
consolidation between the Parent and the Borrower in
connection with such Initial Public Offering, then of the
continuing or surviving corporation of such merger or
consolidation) or (b) a Person or group (as such term is
defined in Section 13(d)(3) of the Securities Exchange Act of
1934, as amended) other than the Sponsor Group shall have
acquired beneficial ownership, directly or indirectly, of, or
shall have acquired by contract or otherwise, or shall have
entered into a contract or arrangement that, upon
consummation, will result in its or their acquisition of,
control over, a greater percentage of the Capital Stock of the
Parent (or in the case of a merger or consolidation between
the Parent and the Borrower in connection with such Initial
Public Offering, then of the continuing or surviving
corporation of such merger or consolidation) than the
percentage of such Capital Stock owned by the Sponsor Group;
or
(v) a "Change of Control" shall occur under and as
defined in the Senior Note Indenture.
As used herein, "beneficial ownership" shall have the meaning provided
in Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
"Closing Date" means the date hereof.
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"Code" means the Internal Revenue Code of 1986, as amended,
and any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Collateral" means all collateral referred to in and covered
by the Collateral Documents.
"Collateral Documents" means the Security Agreements and such
other documents executed and delivered in connection with the
attachment and perfection of the Lenders' security interests in the
Collateral, including without limitation, UCC financing statements and
patent and trademark filings.
"Commitment Fees" means the fees payable to the Lenders
pursuant to Section 3.4(a).
"Commitment Percentage" means, for each Lender, the percentage
identified as its Commitment Percentage on Schedule 1.1A, as such
percentage may be modified in connection with any assignment made in
accordance with the provisions of Section 11.3.
"Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Commitment Percentage of the
Committed Amount, (i) to make Loans in accordance with the provisions
of Section 2.1(a) and (ii) to purchase Participation Interests in
Letters of Credit in accordance with the provisions of Section 2.2(c).
"Committed Amount" means FIFTEEN MILLION DOLLARS ($15,000,000)
or such lesser amount as the Committed Amount may be reduced pursuant
to Section 2.1(d) or Section 3.3(b).
"Consolidated EBITDA" means, for any period, with respect to
the Consolidated Parties on a consolidated basis, the sum of (i)
Consolidated Net Income for such period (excluding the effect of (a)
any extraordinary or other non-recurring gains or losses outside of the
ordinary course of business and (b) any non-recurring charges, non-cash
charges or documented cash charges, in each case deducted in
determining Consolidated Net Income for such period and related to the
issuance of the Senior Notes) plus (ii) an amount which, in the
determination of Consolidated Net Income for such period, has been
deducted for (A) Interest Expense, (B) total Federal, state, foreign or
other income taxes and (C) depreciation and amortization expense and
any other non-cash charges deducted in determining Consolidated Net
Income for such period, all as determined in accordance with GAAP.
"Consolidated Net Income" means, for any period, the net
income after taxes for such period of the Consolidated Parties on a
consolidated basis, as determined in accordance with GAAP.
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"Consolidated Parties" means the Parent and its Subsidiaries,
and "Consolidated Party" means any one of them.
"Consolidated Net Worth" means, at any time, shareholders'
equity or net worth of the Consolidated Parties on a consolidated
basis, as determined in accordance with GAAP.
"Credit Documents" means this Credit Agreement, the Notes, any
Joinder Agreement, the Collateral Documents, the LOC Documents and all
other related agreements and documents issued or delivered hereunder or
thereunder or pursuant hereto or thereto.
"Credit Parties" means the Borrower and the Guarantors, and
"Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (a) all
of the obligations of the Credit Parties to the Lenders (including the
Issuing Lender) and the Agent, whenever arising, under this Credit
Agreement, the Notes, the Collateral Documents or any of the other
Credit Documents to which the Borrower or any other Credit Party is a
party and (b) all Hedging Obligations owing from a Credit Party to any
Lender, or any Affiliate of a Lender.
"Default" means any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a)
has failed to make a Loan or purchase a Participation Interest required
pursuant to the term of this Credit Agreement within one Business Day
of when due, (b) other than as set forth in (a) above, has failed to
pay to the Agent or any Lender an amount owed by such Lender pursuant
to the terms of this Credit Agreement within one Business Day of when
due, unless such amount is subject to a good faith dispute or (c) has
been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any
of assets of which) a receiver, trustee or similar official has been
appointed.
"Dollars" and "$" means dollars in lawful currency of the
United States of America.
"Domestic Credit Party" means any one of the Parent, the
Borrower and each of the Guarantors which is a Domestic Subsidiary of
the Borrower.
"Domestic Subsidiary" means, with respect to any Person, any
Subsidiary of such Person which is incorporated or organized under the
laws of any State of the United States or the District of Columbia.
"Eligible Assets" means another business or any substantial
part of another business or other long-term assets, in each case, in,
or used or useful in, the same or a
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similar line of business as the Consolidated Parties were engaged in on
the Closing Date or any reasonable extensions or expansions thereof.
"Eligible Inventory" means, as of any date of determination
and without duplication, the lower of the aggregate book value (based
on a FIFO or a moving average cost valuation, consistently applied) or
fair market value of all raw materials, work-in-process and finished
goods inventory owned by the Borrower less appropriate reserves
determined in accordance with GAAP but excluding in any event (i)
inventory which is (a) not subject to a perfected, first priority Lien
in favor for the Agent to secure the Credit Party Obligations or (b)
subject to any other Lien that is not a Permitted Lien, (ii) inventory
which is not in good condition or fails to meet standards for sale or
use imposed by governmental agencies, departments or divisions having
regulatory authority over such goods, (iii) inventory which is not
useable or salable at prices approximating their cost in the ordinary
course of the business (including without duplication the amount of any
reserves for obsolescence, unsalability or decline in value), (iv)
inventory located outside of the United States other than (subject to
the requirements of Section 7.9(b)) inventory of the Borrower located
for less than 90 days at a manufacturing facility operated by the
Borrower or the Mexican Subsidiary in Mexico, (v) inventory located at
a leased location with respect to which the Agent shall not have
received a landlord's waiver satisfactory to the Agent and (vi)
inventory which is leased or on consignment.
"Eligible Receivables" means, as of any date of determination
and without duplication, the aggregate book value of all accounts
receivable, receivables, and obligations for payment created or arising
from the sale of inventory or the rendering of services in the ordinary
course of business (collectively, the "Receivables"), owned by or owing
to the Borrower, net of allowances and reserves for doubtful or
uncollectible accounts and sales adjustments consistent with the
Borrower's internal policies and in any event in accordance with GAAP,
but excluding in any event (i) any Receivable which is (a) not subject
to a perfected, first priority Lien in favor for the Agent to secure
the Credit Party Obligations or (b) subject to any other Lien that is
not a Permitted Lien, (ii) Receivables which are more than 90 days past
due (net of reserves for bad debts in connection with any such
Receivables), (iii) any Receivable not otherwise excluded by clause
(ii) above if more than 50% of the total Receivables owing from the
applicable account debtor are then excluded by such clause (ii), (iv)
Receivables evidenced by notes, chattel paper or other instruments,
unless such notes, chattel paper or instruments have been delivered to
and are in the possession of the Agent, (v) Receivables owing by an
account debtor which is not solvent or is subject to any bankruptcy or
insolvency proceeding of any kind, (vi) Receivables owing by an account
debtor located outside of the United States unless (a) such account
debtor is, or is a Foreign Subsidiary of, a Person which is
incorporated or organized under the laws of any State of the United
States or the District of Columbia or (b) payment for the goods shipped
is secured by an irrevocable letter of credit in a form and from an
institution acceptable to the Agent, (vii) Receivables which are
contingent or subject to offset, deduction, counterclaim, dispute or
other defense to payment, in each case to the extent of such offset,
deduction, counterclaim, dispute or other defense, (viii) Receivables
for which any direct or indirect Subsidiary or
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any Affiliate of the Borrower is the account debtor and (ix) to the
extent that such Receivables exceed $250,000 in aggregate amount,
Receivables representing a sale to the government of the United States
of America or any subdivision thereof unless the Federal Assignment of
Claims Act has been complied with to the satisfaction of the Agent with
respect to the granting of a security interest in such Receivable, with
or other similar applicable law.
"Environmental Claim" means any investigation, written notice,
violation, written demand, written allegation, action, suit,
injunction, judgment, order, consent decree, penalty, fine, lien,
proceeding, or written claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an
actual or alleged violation of, any Environmental Law, (b) in
connection with any Hazardous Material, (c) from any assessment,
abatement, removal, remedial, corrective, or other response action in
connection with an Environmental Law or other order of a Governmental
Authority or (d) from any actual or alleged damage, injury, threat, or
harm to health, safety, natural resources, or the environment.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial,
toxic or hazardous substances or wastes.
"Equity Issuance" means any issuance by any Consolidated Party
to any Person which is not a Credit Party of (a) shares of its Capital
Stock, (b) any shares of its Capital Stock pursuant to the exercise of
options or warrants or (c) any shares of its Capital Stock pursuant to
the conversion of any debt securities to equity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common
control with any Consolidated Party within the meaning of Section
4001(a)(14) of ERISA, or is a member of a group which includes any
Consolidated Party and which is treated as a single employer under
Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the
occurrence of a Reportable Event or the substantial cessation of
operations (within the meaning of Section 4062(e) of ERISA); (ii) the
withdrawal by any Consolidated Party from a Multiple Employer Plan
during a plan year in which it was a substantial employer (as such term
is defined in Section
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4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA;
(iv) the institution of proceedings to terminate or the actual
termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any
event or condition which could reasonably be expected to constitute
grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan; (vi) the complete or
partial withdrawal of any Consolidated Party from a Multiemployer Plan;
(vii) the conditions for imposition of a lien under Section 302(f) of
ERISA exist with respect to any Plan; or (vii) the adoption of an
amendment to any Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA.
"Eurodollar Loan" means a Loan bearing interest based at a
rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = Interbank Offered Rate
----------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as such regulation may be amended
from time to time or any successor regulation, as the maximum reserve
requirement (including, without limitation, any basic, supplemental,
emergency, special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurodollar Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" has the meaning specified in Section 9.1.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Excluded Asset Disposition" means (i) any Asset Disposition
consisting of a sale, transfer or other disposition of inventory by a
Consolidated Party in the ordinary course of such Person's business,
(ii) any Asset Disposition by any Consolidated Party to any Credit
Party other than the Parent if (a) the Credit Parties shall cause to be
executed and delivered
-11-
such documents, instruments and certificates as the Agent may request
so as to cause the Credit Parties to be in compliance with the terms of
Section 7.9 after giving effect to such Asset Disposition and (b) after
giving effect such Asset Disposition, no Default or Event of Default
exists, (iii) any Asset Disposition by any Consolidated Party which is
not a Credit Party to any other Consolidated Party which is not a
Credit Party if after giving effect such Asset Disposition, no Default
or Event of Default exists and (iv) other Asset Dispositions provided
that the Net Cash Proceeds of all such Asset Dispositions by all of the
Consolidated Parties during any fiscal year of the Borrower does not
exceed $500,000.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, executive vice
president, chief financial officer or treasurer or such Person.
"Exempt Affiliate Transactions" means (a) transactions between
or among the Borrower and/or its wholly-owned Subsidiaries, (b) fees
and compensation paid to and indemnity provided on behalf of directors,
officers or employees of any Consolidated Party in the ordinary course
of business, (c) any employment agreement that is in effect on the
Closing Date and any such agreement entered into by any Consolidated
Party after the Closing Date in the ordinary course of business of such
Consolidated Party, (d) payments by the Consolidated Parties to Xxxxxx
X. Xxx Company of (i) management fees of up to $180,000 annually and
(ii) reasonable expenses from time to time of Xxxxxx X. Xxx Company and
(e) any Restricted Payment that is not prohibited by Section 8.7
"Extension of Credit" means, as to any Lender, the making of a
Loan or the purchase of a Participation Interest by such Lender.
"Federal Funds Rate" means, for any day, the rate of interest
per annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding
such day, provided that (A) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions
on the next preceding Business Day and (B) if no such rate is so
published on such next preceding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Agent on such day
on such transactions as determined by the Agent.
"Foreign Subsidiary", of any Person, means any Subsidiary of
such Person which is not a Domestic Subsidiary of such Person.
"Funded Indebtedness" means, with respect to any Person,
without duplication, (a) all Indebtedness of such Person other than
Indebtedness of the types referred to in clause (e), (f), (g), (i), (k)
and (n) of the definition of "Indebtedness" set forth in this Section
1.1, (b) all Indebtedness of another Person of the type referred to in
clause (a) above secured by (or for which the holder of such Funded
Indebtedness has an existing right, contingent or
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otherwise, to be secured by) any Lien on, or payable out of the
proceeds of production from, property owned or acquired by such Person,
whether or not the obligations secured thereby have been assumed,, (c)
all Guaranty Obligations of such Person with respect to Indebtedness of
the type referred to in clause (a) above of another Person and (d)
Indebtedness of the type referred to in clause (a) above of any
partnership or unincorporated joint venture in which such Person is
legally obligated or has a reasonable expectation of being liable with
respect thereto.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to Section 1.3.
"Governmental Authority" means any Federal, state, local,
provincial or foreign court or governmental agency, authority,
instrumentality or regulatory body.
"Guarantor" means each of those Persons identified as a
"Guarantor" on the signature pages hereto, and each Additional Credit
Party which may hereafter execute a Joinder Agreement, together with
their successors and permitted assigns.
"Guaranty Obligations" means, with respect to any Person,
without duplication, any obligations of such Person (other than
endorsements in the ordinary course of business of negotiable
instruments for deposit or collection) guaranteeing or intended to
guarantee any Indebtedness of any other Person in any manner, whether
direct or indirect, and including without limitation any obligation,
whether or not contingent, (i) to purchase any such Indebtedness or any
property constituting security therefor, (ii) to advance or provide
funds or other support for the payment or purchase of any such
Indebtedness or to maintain working capital, solvency or other balance
sheet condition of such other Person (including without limitation keep
well agreements, maintenance agreements, comfort letters or similar
agreements or arrangements) for the benefit of any holder of
Indebtedness of such other Person, (iii) to lease or purchase property,
securities or services primarily for the purpose of assuring the holder
of such Indebtedness, or (iv) to otherwise assure or hold harmless the
holder of such Indebtedness against loss in respect thereof. The amount
of any Guaranty Obligation hereunder shall (subject to any limitations
set forth therein) be deemed to be an amount equal to the outstanding
principal amount (or maximum principal amount, if larger) of the
Indebtedness in respect of which such Guaranty Obligation is made.
"Hazardous Materials" means any substance, material or waste
defined or regulated in or under any Environmental Laws.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person entered into in the ordinary course of
business under interest rate swap agreements, interest rate cap
agreements and interest rate collar agreements and other similar
financial agreements or arrangements designed to protect such Person
against, or manage the exposure of such Person to, fluctuations in
interest rates and entered into in order to manage existing or
anticipated interest rate or exchange rate risks and not for
speculative purposes.
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"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations
of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (c)
all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of property or services purchased by such
Person (other than trade debt incurred in the ordinary course of
business and due within six months of the incurrence thereof) which
would appear as liabilities on a balance sheet of such Person, (e) all
obligations of such Person under take-or-pay or similar arrangements or
under commodities agreements, (f) all Indebtedness of others secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (g) all Guaranty Obligations of such Person, (h) the principal
portion of all obligations of such Person under Capital Leases, (i) all
obligations of such Person under Hedging Agreements, (j) the maximum
amount of all standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person and required by
the terms thereof to be redeemed, or for which mandatory sinking fund
payments are due, on or before the Maturity Date, (l) the principal
portion of all obligations of such Person under TROLS and (n) the
Indebtedness of any partnership or unincorporated joint venture in
which such Person is a general partner or a joint venturer. The term
"Indebtedness" shall not include trade payables or accrued expenses, in
either case arising in the ordinary course of business.
"Initial Public Offering" means a public offering of common
equity of the Parent (or in the case of a merger or consolidation
between the Parent and the Borrower in connection with such public
offering, then of the continuing or surviving corporation of such
merger or consolidation).
`
"Interbank Offered Rate" means, for the Interest Period for
each Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
(rounded upwards, if necessary, to the nearest whole multiple of 1/100
of 1%) equal to the rate of interest, determined by the Agent on the
basis of the offered rates for deposits in dollars for a period of time
corresponding to such Interest Period (and commencing on the first day
of such Interest Period), appearing on Telerate Page 3750 (or, if, for
any reason, Telerate Page 3750 is not available, the Reuters Screen
LIBO Page) as of approximately 11:00 A.M. (London time) two (2)
Business Days before the first day of such Interest Period. As used
herein, "Telerate Page 3750" means the display designated as page 3750
by Dow Xxxxx Telerate, Inc. (or such other page as may replace such
page on that service for the purpose of displaying the British Bankers
Association London interbank offered rates) and "Reuters Screen LIBO
Page" means the
-14-
display designated as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page as may replace the LIBO page on that
service for the purpose of displaying London interbank offered rates of
major banks).
"Interest Expense" means, for any period, with respect to the
Consolidated Parties on a consolidated basis, all net interest expense,
including the interest component under Capital Leases, as determined in
accordance with GAAP.
"Interest Coverage Ratio" means, with respect to the
Consolidated Parties on a consolidated basis for the twelve month
period ending on the last day of any fiscal quarter of the Consolidated
Parties, the ratio of (a) Consolidated EBITDA for such period to (b)
Interest Expense for such period.
"Interest Payment Date" means (a) as to Base Rate Loans, the
last Business Day of each fiscal quarter of the Borrower and the
Maturity Date and (b) as to Eurodollar Loans, the last day of each
applicable Interest Period and the Maturity Date and in addition where
the applicable Interest Period for a Eurodollar Loan is greater than
three months, then also the date three months from the beginning of the
Interest Period and each three months thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of
one, two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day),
(b) no Interest Period shall extend beyond the Maturity Date and (c)
where an Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month.
"Investment" in any Person means (a) the acquisition (whether
for cash, property, services, assumption of Indebtedness, securities or
otherwise) of assets, shares of Capital Stock, bonds, notes,
debentures, partnership, joint ventures or other ownership interests or
other securities of such other Person or (b) any deposit with, or
advance, loan or other extension of credit to, such Person (other than
deposits made in connection with the purchase of equipment or other
assets in the ordinary course of business) or (c) any other capital
contribution to or investment in such Person, including, without
limitation, any Guaranty Obligation (including any support for a letter
of credit issued on behalf of such Person) incurred for the benefit of
such Person, but excluding any Restricted Payment to such Person.
"Issuing Lender" means NationsBank, N.A.
"Issuing Lender Fees" has the meaning set forth in Section
3.4(b)(iii).
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"Joinder Agreement" means a Joinder Agreement substantially in
the form of Exhibit 7.13, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 7.13.
"Lender" means any of the Persons identified as a "Lender" on
the signature pages hereto, and any Person which may become a Lender by
way of assignment in accordance with the terms hereof, together with
their successors and permitted assigns.
"Letter of Credit" means a Letter of Credit issued for the
account of the Borrower or one of its Subsidiaries by the Issuing
Lender pursuant to Section 2.2, as such Letter of Credit may be
amended, modified, extended, renewed or replaced.
"Leverage Ratio" means, with respect to the Consolidated
Parties on a consolidated basis for the twelve month period ending on
the last day of any fiscal quarter of the Borrower, the ratio of (a)
Funded Indebtedness of the Consolidated Parties on a consolidated basis
on the last day of such period to (b) Consolidated EBITDA for such
period.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind, including,
without limitation, any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any financing or
similar statement or notice filed under the Uniform Commercial Code as
adopted and in effect in the relevant jurisdiction or other similar
recording or notice statute, and any lease in the nature thereof.
"Loans" means the Loans made to the Borrower pursuant to
Section 2.1 (or a portion of any Loan bearing interest at the Adjusted
Base Rate or the Adjusted Eurodollar Rate), individually or
collectively, as appropriate.
"LOC Documents" means, with respect to any Letter of Credit,
such Letter of Credit, any amendments thereto, any documents delivered
in connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing or
providing for (a) the rights and obligations of the parties concerned
or at risk or (b) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (a) the
maximum amount which is, or at any time thereafter may become,
available to be drawn under Letters of Credit then outstanding,
assuming compliance with all requirements for drawings referred to in
such Letters of Credit plus (b) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"Mandatory Borrowing" has the meaning set forth in Section
2.2(e).
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"Material Adverse Effect" means a material adverse effect on
(a) the operations, financial condition, business or prospects of any
Consolidated Party, (b) the ability of a Credit Party to perform its
respective obligations under this Credit Agreement or any of the other
Credit Documents, or (c) the validity or enforceability of this Credit
Agreement, any of the other Credit Documents, or the rights and
remedies of the Lenders hereunder or thereunder taken as a whole.
"Maturity Date" means March 31, 2003.
"Mexican Subsidiary" means Cepillos xx Xxxxxxxxx, a direct
Subsidiary of the Parent organized and existing under the laws of
Mexico.
"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business
of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer
plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which any Consolidated
Party and at least one employer other than the Consolidated Parties are
contributing sponsors.
"Net Cash Proceeds" means the aggregate cash proceeds
(including, without limitation, cash payments on non-cash consideration
and any cash received upon the sale or other disposition of any
non-cash consideration) received by any Consolidated Party in respect
of any Asset Disposition, net of (a) direct costs (including, without
limitation, legal, accounting and investment banking fees, and sales
commissions), (b) taxes paid or payable as a result thereof and (c) any
reserve for adjustment in respect of the sale price of such asset or
assets established in accordance with GAAP; it being understood that
"Net Cash Proceeds" shall include, without limitation, any cash
received upon the sale or other disposition of any non-cash
consideration received by a Consolidated Party in any Asset
Disposition.
"Non-Excluded Taxes" has the meaning set forth in Section
3.14.
"Note" or "Notes" means the promissory notes of the Borrower
in favor of each of the Lenders evidencing the Loans provided pursuant
to Section 2.1, individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented, extended,
renewed or replaced from time to time and as evidenced in the form of
Exhibit 2.5(a).
"Notice of Borrowing" means a request by the Borrower for a
Loan, in the form of Exhibit 2.1.
-17-
"Notice of Continuation/Conversion" means a request by the
Borrower to continue an existing Eurodollar Loan to a new Interest
Period or to convert a Eurodollar Loan to a Base Rate Loan or a Base
Rate Loan to a Eurodollar Loan, in the form of Exhibit 2.3.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Parent" means Anchor Holdings, Inc., a Delaware corporation,
together with any permitted successors and assigns.
"Participation Interest" means a purchase by a Lender of a
participation in Letters of Credit or LOC Obligations as provided in
Section 2.2 or in any Loans as provided in Section 3.9.
"PBGC" means the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA and any
successor thereto.
"Permitted Investments" means Investments which are (a) cash
or Cash Equivalents, (b) accounts receivable created, acquired or made
in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms or otherwise in the prudent
judgment of a Consolidated Party, (c) inventory, raw materials and
general intangibles (to the extent such general intangible is not a
Capital Expenditure) acquired in the ordinary course of business, (d)
Investments existing as of the Closing Date and set forth in Schedule
1.1B, (e) additional Investments in any Credit Party other than the
Parent, (f) additional Investments in (i) the Mexican Subsidiary, (ii)
Anchor Advanced Products Foreign Sales Corp. and (iii) Subsidiaries of
the Borrower which are not Credit Parties, provided that (A) the
aggregate amount of all Investments in Anchor Advanced Products Foreign
Sales Corp. pursuant to subclause (ii) shall not exceed $2,000,000 at
any time outstanding and (B) the aggregate amount of all Investments
pursuant to this clause (f) shall not exceed $7,500,000 at any time
outstanding, (g) Guaranty Obligations permitted by Section 8.1, (h)
loans to directors, officers, employees, agents, customers or suppliers
in the ordinary course of business for reasonable business expenses,
not to exceed in the aggregate $250,000 at any one time, (i) loans to
shareholders of the Parent to finance the exercise of warrants, options
or other rights to acquire shares of Capital Stock of the Parent in
connection with the Refinancing, provided that, concurrently with the
consummation of the Refinancing, such loans are repaid in full with
amounts withheld from the distribution on the Closing Date to
shareholders of the Parent referred to in Section 5.1(o) and (j)
Investments in dealers and customers received in connection with any
bankruptcy or reorganization of such dealer or customer.
"Permitted Liens" means:
(i) Liens in favor of the Agent on behalf of the
Lenders;
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(ii) Liens (other than Liens created or imposed under
ERISA) for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes being contested in good
faith by appropriate proceedings for which adequate reserves
determined in accordance with GAAP have been established (and
as to which the property subject to any such Lien is not yet
subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics, materialmen and suppliers
and other Liens imposed by law or pursuant to customary
reservations or retentions of title arising in the ordinary
course of business, provided that such Liens (A) secure only
amounts not yet due and payable or, if due and payable, are
unfiled and no other action has been taken to enforce the
same, (B) have been in existence for less than 90 days or (c)
are being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP
have been established (and as to which the property subject to
any such Lien is not yet subject to foreclosure, sale or loss
on account thereof);
(iv) Liens (other than Liens created or imposed under
ERISA) incurred or deposits made by any Consolidated Party in
the ordinary course of business in connection with workers'
compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory
obligations, bids, leases, government contracts, performance
and return-of-money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money);
(v) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the
judgments secured shall, within 30 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 30 days
after the expiration of any such stay;
(vi) Liens on property securing purchase money
Indebtedness (including Capital Leases) to the extent
permitted under Section 8.1(c), provided that any such Lien
attaches to such property concurrently with or within 45 days
after the acquisition thereof;
(vii) Liens deemed to exist in connection with
Investments in repurchase agreements permitted under Section
8.6;
(ix) normal and customary rights of setoff upon
deposits of cash in favor of banks or other depository
institutions; and
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(x) Liens existing as of the Closing Date and set
forth on Schedule 1.1C; provided that no such Lien shall at
any time be extended to or cover any property other than the
property subject thereto on the Closing Date.
"Person" means any individual, partnership, joint venture,
firm, corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated), or any Governmental
Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which any
Consolidated Party is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" within
the meaning of Section 3(5) of ERISA.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by the Agent as its prime rate in effect at
its principal office in Charlotte, North Carolina, with each change in
the Prime Rate being effective on the date such change is publicly
announced as effective (it being understood and agreed that the Prime
Rate is a reference rate used by the Agent in determining interest
rates on certain loans and is not intended to be the lowest rate of
interest charged on any extension of credit by the Agent to any
debtor).
"Property" means any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"Real Properties" means each of facilities and properties
owned, leased or operated by any Credit Party.
"Refinancing" has the meaning specified in Section 7.10.
"Register" shall have the meaning given such term in Section
11.3(d).
"Regulation G, T, U, or X" means Regulation G, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion
thereof.
"Reportable Event" means a "reportable event" as defined in
Section 4043(c) of ERISA, other than those events as to which the
notice requirements or penalties for failure to provide notice have
been waived by regulation or administrative action of the PBGC.
"Required Lenders" means, at any time, Lenders (other than
Defaulting Lenders) holding in the aggregate at least 51% of (i) the
Commitments) or (ii) if the Commitments have been terminated, the
outstanding Loans and Participation Interests (including the
Participation Interests of the Issuing Lender in any Letters of Credit
and LOC Obligations).
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"Requirement of Law" means, as to any Person, the articles or
certificate of incorporation and by-laws or other organizational or
governing documents of such Person, and any law, treaty, rule or
regulation or final, non-appealable determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or to which any of its material property is
subject.
"Restricted Payment" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of any Consolidated Party, now or hereafter
outstanding, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any shares of any class of Capital Stock of any Consolidated Party,
now or hereafter outstanding or (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other
rights to acquire shares of any class of Capital Stock of any
Consolidated Party, now or hereafter outstanding.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Sale and Leaseback Transaction" means any direct or indirect
arrangement with any Person or to which any such Person is a party,
providing for the leasing to any Consolidated Party of any property,
whether owned by such Consolidated Party as of the Closing Date or
later acquired, which has been or is to be sold or transferred by such
Consolidated Party to such Person or to any other Person from whom
funds have been or are to be advanced by such Person on the security of
such property.
"Scheduled Funded Indebtedness Payments" means, as of the end
of each fiscal quarter of the Consolidated Parties, for the
Consolidated Parties on a consolidated basis, the sum of all scheduled
payments of principal on Funded Indebtedness for the applicable period
ending on such date (including the principal component of payments due
on Capital Leases during the applicable period ending on such date); it
being understood that Scheduled Funded Indebtedness Payments shall not
include voluntary prepayments or the mandatory prepayments required
pursuant to Section 3.3.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Security Agreement" means any Security Agreement executed and
delivered by a Credit Party in favor of the Agent for the benefit of
the Lenders to secure its obligations under the Credit Documents, as
such may be amended, modified, extended, renewed, restated or replaced
from time to time.
"Senior Note" means any one of the 11-3/4% Senior Notes due
April 1, 2004 in an aggregate original principal amount of
$100,000,000, issued by the Borrower in favor of the
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Senior Noteholders, as such Senior Notes may be restated, extended,
renewed, amended or otherwise modified and in effect from time to time.
"Senior Note Indenture" means that certain Indenture
Agreement, dated as of the Closing Date, by and among the Borrower and
Fleet National Bank, as trustee for the Senior Noteholders, as the same
may be restated, extended, renewed, amended or otherwise modified and
in effect from time to time.
"Senior Note Purchase Agreements" means those certain Purchase
Agreements dated as of the date hereof by and between the Borrower and
each of the initial purchasers of the Senior Notes, as the same may be
restated, extended, renewed, amended or otherwise modified and in
effect from time to time.
"Senior Noteholders" means any one of the holders from time to
time of the Senior Notes.
"Single Employer Plan" means any Plan which is covered by
Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" means, with respect to any Person as of a particular
date, that on such date (a) such Person is able to pay its debts and
other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (b) such Person does not
intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and
liabilities mature in their ordinary course, (c) such Person is not
engaged in a business or a transaction, and is not about to engage in a
business or a transaction, for which such Person's assets would
constitute unreasonably small capital after giving due consideration to
the prevailing practice in the industry in which such Person is engaged
or is to engage, (d) the fair value of the assets of such Person is
greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person and (e) the present
fair salable value of the assets of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured. In computing
the amount of contingent liabilities at any time, it is intended that
such liabilities will be computed at the amount which, in light of all
the facts and circumstances existing at such time, represents the
amount that can reasonably be expected to become an actual or matured
liability.
"Sponsor Group" means any of (i) Xxxxxx X. Xxx Company or any
officer, employee or material consultant of Xxxxxx X. Xxx Company,
Xxxxxx X. Xxx Equity Partners, L.P., XX-Xxx Acquisition Fund II, L.P.,
XX-Xxx Acquisition Fund (Retirement Accounts) II, L.P. or any limited
or general partner, stockholder, officer, employee or material
consultant of any of such entities and (ii) any of the officers,
directors or employees of the Parent or any Subsidiary of the Parent.
"Standby Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.4(b)(i).
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"Subsidiary" means, as to any Person, (a) any corporation more
than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time, any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by
such Person directly or indirectly through Subsidiaries, and (b) any
partnership, association, joint venture or other entity in which such
Person directly or indirectly through Subsidiaries has more than a 50%
equity interest at any time.
"Trade Letter of Credit Fee" shall have the meaning assigned
to such term in Section 3.4(b)(ii).
"TROL" means any synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing
product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease
in accordance with GAAP. The term "TROL" shall not include any lease
classified as an operating lease in accordance with GAAP which is not
considered borrowed money indebtedness for tax purposes.
"Unused Committed Amount" means, for any period, the amount by
which (a) the then applicable aggregate Committed Amount exceeds (b)
the daily average sum for such period of the outstanding aggregate
principal amount of all Loans plus the aggregate amount of LOC
Obligations outstanding.
1.2 Computation of Time Periods and Other Definitional Provisions.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding." References in this Credit Agreement to "Articles", "Sections",
"Schedules" or "Exhibits" shall be to Articles, Sections, Schedules or Exhibits
of or to this Credit Agreement unless otherwise specifically provided.
1.3 Accounting Terms.
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All financial statements delivered to the Lenders hereunder shall be
accompanied by a statement from the Borrower that GAAP has not changed since the
most recent financial statements delivered by the Credit Parties to the Lenders
or if GAAP has changed describing such changes in detail and explaining how such
changes affect the financial statements. All calculations made for the purposes
of determining compliance with this Credit Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 7.1 (or, prior to the delivery of the first
financial statements pursuant to Section 7.1,
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consistent with the December 31, 1996 financial statements of the Consolidated
Parties); provided, however, if (a) the Credit Parties shall object to
determining such compliance on such basis at the time of delivery of such
financial statements due to any change in GAAP or the rules promulgated with
respect thereto or (b) the Agent or the Required Lenders shall so object in
writing within 60 days after delivery of such financial statements (or after the
Lenders have been informed of the change in GAAP affecting such financial
statements, if later), then such calculations shall be made on a basis
consistent with the most recent financial statements delivered by the Credit
Parties to the Lenders as to which no such objection shall have been made.
SECTION 2
CREDIT FACILITIES
-----------------
2.1 Loans.
(a) Loan Commitment. Subject to the terms and conditions set
forth herein, each Lender severally agrees to make revolving loans
(each a "Loan" and collectively the "Loans") to the Borrower, in
Dollars, at any time and from time to time, during the period from and
including the Closing Date to but not including the Maturity Date (or
such earlier date if the Committed Amount has been terminated as
provided herein); provided, however, that the sum of the aggregate
principal amount of outstanding Loans shall not exceed the lesser of
(i) the Committed Amount and (ii) the Borrowing Base; provided,
further, that (i) the sum of the aggregate amount of Loans outstanding
plus the aggregate amount of LOC Obligations outstanding shall not
exceed the Committed Amount and (ii) with respect to each individual
Lender, the Lender's pro rata share of outstanding Loans plus such
Lender's pro rata share of outstanding LOC Obligations shall not exceed
such Lender's Commitment Percentage of the Committed Amount. Subject to
the terms of this Credit Agreement (including Section 3.3), the
Borrower may borrow, repay and reborrow Loans.
(b) Method of Borrowing for Loans. By no later than 11:00 a.m.
(i) on the date of the requested borrowing of Loans that will be Base
Rate Loans or (ii) three Business Days prior to the date of the
requested borrowing of Loans that will be Eurodollar Loans, the
Borrower shall submit a written Notice of Borrowing in the form of
Exhibit 2.1 to the Agent setting forth (A) the amount requested, (B)
whether such Loans shall accrue interest at the Adjusted Base Rate or
the Adjusted Eurodollar Rate, (C) with respect to Loans that will be
Eurodollar Loans, the Interest Period applicable thereto and (D)
certification that the Borrower has complied in all respects with
Section 5.2;
(c) Funding of Loans. Upon receipt of a Notice of Borrowing,
the Agent shall promptly inform the applicable Lenders as to the terms
thereof. Each such Lender shall make its Commitment Percentage of the
requested Loans available to the Agent by 1:00 p.m. on the date
specified in the Notice of Borrowing by deposit, in Dollars, of
immediately available funds at the offices of the Agent at its
principal office in Charlotte, North Carolina or at such other address
as the Agent may designate in writing. The amount of the
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requested Loans will then be made available to the Borrower by the
Agent by crediting the account of the Borrower on the books of such
office of the Agent, to the extent the amount of such Loans are made
available to the Agent.
No Lender shall be responsible for the failure or delay by any
other Lender in its obligation to make Loans hereunder; provided,
however, that the failure of any Lender to fulfill its obligations
hereunder shall not relieve any other Lender of its obligations
hereunder. Unless the Agent shall have been notified by any Lender
prior to the time of any such Loan that such Lender does not intend to
make available to the Agent its portion of the Loans to be made on such
date, the Agent may assume that such Lender has made such amount
available to the Agent on the date of such Loans, and the Agent in
reliance upon such assumption, may (in its sole discretion but without
any obligation to do so) make available to the Borrower a corresponding
amount. If such corresponding amount is not in fact made available to
the Agent, the Agent shall be able to recover such corresponding amount
from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Agent's demand therefor, the Agent will promptly
notify the Borrower, and the Borrower shall immediately pay such
corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Lender or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower to
the date such corresponding amount is recovered by the Agent at a per
annum rate equal to (i) from the Borrower at the applicable rate for
such Loan pursuant to the Notice of Borrowing and (ii) from a Lender at
the Federal Funds Rate.
(d) Reductions of Committed Amount. Upon at least three
Business Days' notice, the Borrower shall have the right to permanently
terminate or reduce the aggregate unused amount of the Committed Amount
at any time or from time to time; provided that (i) each partial
reduction shall be in an aggregate amount at least equal to $500,000
and in integral multiples of $50,000 above such amount and (ii) no
reduction shall be made which would reduce the Committed Amount to an
amount less than the aggregate amount of outstanding Loans plus the
aggregate amount of outstanding LOC Obligations. Any reduction in (or
termination of) the Committed Amount shall be permanent and may not be
reinstated.
2.2 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof and
of the LOC Documents, if any, and any other terms and conditions which
the Issuing Lender may reasonably require, the Issuing Lender shall
from time to time upon request issue, in Dollars, and the Lenders shall
participate in, letters of credit (the "Letters of Credit") for the
account of the Borrower or any of its Subsidiaries, from the Closing
Date until the date five (5) days prior to the Maturity Date, in a form
reasonably acceptable to the Issuing Lender; provided, however, that
(i) the aggregate amount of LOC Obligations shall not at any time
exceed FIVE MILLION DOLLARS ($5,000,000), (ii) the sum of the aggregate
amount of LOC Obligations outstanding plus Loans outstanding shall not
exceed the Committed
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Amount and (iii) with respect to each individual Lender, such Lender's
pro rata share of outstanding Loans plus its pro rata share of
outstanding LOC Obligations shall not exceed such Lender's Commitment
Percentage of the Committed Amount. The issuance and expiry date of
each Letter of Credit shall be a Business Day. No Letter of Credit
shall have an original expiry date more than one year from the date of
issuance, or as extended, shall have an expiry date extending beyond
the date five (5) days prior to the Maturity Date. Each Letter of
Credit shall be either (x) a standby letter of credit issued to support
the obligations (including pension or insurance obligations),
contingent or otherwise, of the Borrower or any of its Subsidiaries, or
(y) a commercial letter of credit in respect of the purchase of goods
or services by the Borrower or any of its Subsidiaries in the ordinary
course of business. Each Letter of Credit shall comply with the related
LOC Documents.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender at least
three Business Days prior to the requested date of issuance. The
Issuing Lender will, at least quarterly and more frequently upon
request, provide to the Agent for dissemination to the Lenders a
detailed report specifying the Letters of Credit which are then issued
and outstanding and any activity with respect thereto which may have
occurred since the date of the prior report, and including therein,
among other things, the account party, the beneficiary, the face
amount, and the expiry date as well as any payments or expirations
which may have occurred. The Issuing Lender will further provide to the
Agent, promptly upon request, copies of the Letters of Credit.
(c) Participations. Each Lender, upon issuance of a Letter of
Credit, shall be deemed to have purchased without recourse a risk
participation from the Issuing Lender in such Letter of Credit and the
obligations arising thereunder and any collateral relating thereto, in
each case in an amount equal to its Commitment Percentage of the
obligations under such Letter of Credit, and shall absolutely,
unconditionally and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Issuing Lender therefor and
discharge when due, its Commitment Percentage of the obligations
arising under such Letter of Credit. Without limiting the scope and
nature of each Lender's participation in any Letter of Credit, to the
extent that the Issuing Lender has not been reimbursed as required
hereunder or under any such Letter of Credit, each such Lender shall
pay to the Issuing Lender its Commitment Percentage of such
unreimbursed drawing in same day funds on the day of notification by
the Issuing Lender of an unreimbursed drawing pursuant to the
provisions of subsection (d) hereof. The obligation of each Lender to
so reimburse the Issuing Lender shall be absolute and unconditional and
shall not be affected by the occurrence of a Default, an Event of
Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of the Borrower or any
other Credit Party to reimburse the Issuing Lender under any Letter of
Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify the Borrower.
Unless the Borrower shall immediately notify the Issuing Lender of its
intent to otherwise reimburse the Issuing Lender, the Borrower shall be
deemed to have requested a Loan at the Adjusted Base Rate in the
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amount of the drawing as provided in subsection (e) hereof, the
proceeds of which will be used to satisfy the reimbursement
obligations. The Borrower shall reimburse the Issuing Lender on the day
of drawing under any Letter of Credit either with the proceeds of a
Loan obtained hereunder or otherwise in same day funds as provided
herein or in the LOC Documents. If the Borrower shall fail to reimburse
the Issuing Lender as provided hereinabove, the unreimbursed amount of
such drawing shall bear interest at a per annum rate equal to the Base
Rate plus the Applicable Percentage for the Base Rate Loans that are
Loans plus two percent (2%). The Borrower's reimbursement obligations
hereunder shall be absolute and unconditional under all circumstances
irrespective of (but without waiver of) any rights of set-off,
counterclaim or defense to payment the applicable account party or the
Borrower may claim or have against the Issuing Lender, the Agent, the
Lenders, the beneficiary of the Letter of Credit drawn upon or any
other Person, including without limitation, any defense based on any
failure of the applicable account party, the Borrower or any other
Credit Party to receive consideration or the legality, validity,
regularity or unenforceability of the Letter of Credit. The Issuing
Lender will promptly notify the Lenders of the amount of any
unreimbursed drawing and each Lender shall promptly pay to the Agent
for the account of the Issuing Lender, in Dollars and in immediately
available funds, the amount of such Lender's Commitment Percentage of
such unreimbursed drawing. Such payment shall be made on the day such
notice is received by such Lender from the Issuing Lender if such
notice is received at or before 2:00 p.m., otherwise such payment shall
be made at or before 12:00 Noon on the Business Day next succeeding the
day such notice is received. If such Lender does not pay such amount to
the Issuing Lender in full upon such request, such Lender shall, on
demand, pay to the Agent for the account of the Issuing Lender interest
on the unpaid amount during the period from the date the Lender
received the notice regarding the unreimbursed drawing until such
Lender pays such amount to the Issuing Lender in full at a rate per
annum equal to, if paid within two Business Days of the date of
drawing, the Federal Funds Rate and thereafter at a rate equal to the
Base Rate. Each Lender's obligation to make such payment to the Issuing
Lender, and the right of the Issuing Lender to receive the same, shall
be absolute and unconditional, shall not be affected by any
circumstance whatsoever and without regard to the termination of this
Credit Agreement or the Commitments hereunder, the existence of a
Default or Event of Default or the acceleration of the obligations
hereunder and shall be made without any offset, abatement, withholding
or reduction whatsoever. Simultaneously with the making of each such
payment by a Lender to the Issuing Lender, such Lender shall,
automatically and without any further action on the part of the Issuing
Lender or such Lender, acquire a participation in an amount equal to
such payment (excluding the portion of such payment constituting
interest owing to the Issuing Lender) in the related unreimbursed
drawing portion of the LOC Obligation and in the interest thereon and
in the related LOC Documents, and shall have a claim against the
Borrower and the other Credit Parties with respect thereto.
Notwithstanding anything to the contrary contained in this subsection
(D), the Borrower shall have no obligation to reimburse the Issuing
Lender in respect of any wrongful payment made by the Issuing Lender
under a Letter of Credit solely as a result of acts or omissions
constituting gross negligence or willful misconduct by the Issuing
Lender, as determined by a court of competent jurisdiction.
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(e) Repayment with Loans. On any day on which the Borrower
shall have requested, or been deemed to have requested, a Loan
borrowing to reimburse a drawing under a Letter of Credit, the Agent
shall give notice to the applicable Lenders that a Loan has been
requested or deemed requested in connection with a drawing under a
Letter of Credit, in which case a Loan borrowing comprised solely of
Base Rate Loans (each such borrowing, a "Mandatory Borrowing") shall be
immediately made from all applicable Lenders (without giving effect to
any termination of the Commitments pursuant to Section 9.2) pro rata
based on each Lender's respective Commitment Percentage and the
proceeds thereof shall be paid directly to the Issuing Lender for
application to the respective LOC Obligations. Each such Lender hereby
irrevocably agrees to make such Loans immediately upon any such request
or deemed request on account of each such Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the
same such date notwithstanding (i) the amount of Mandatory Borrowing
may not comply with the minimum amount for borrowings of Loans
otherwise required hereunder, (ii) whether any conditions specified in
Section 5 are then satisfied, (iii) whether a Default or Event of
Default then exists, (iv) failure of any such request or deemed request
for Loans to be made by the time otherwise required hereunder, (v) the
date of such Mandatory Borrowing, or (vi) any reduction in the
Committed Amount or any termination of the Commitments. In the event
that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of
the commencement of a proceeding under the Bankruptcy Code with respect
to the Borrower or any other Credit Party), then each such Lender
hereby agrees that it shall forthwith fund (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to
such purchase) its Participation Interest in the outstanding LOC
Obligations; provided further, that in the event any Lender shall fail
to fund its Participation Interest on the day the Mandatory Borrowing
would otherwise have occurred, then the amount of such Lender's
unfunded Participation Interest therein shall bear interest payable to
the Issuing Lender upon demand, at the rate equal to, if paid within
two Business Days of such date, the Federal Funds Rate, and thereafter
at a rate equal to the Base Rate.
(f) Designation of Subsidiaries as Account Parties.
Notwithstanding anything to the contrary set forth in this Credit
Agreement, a Letter of Credit issued hereunder may contain a statement
to the effect that such Letter of Credit is issued for the account of a
Subsidiary of the Borrower; provided that notwithstanding such
statement, the Borrower shall be the actual account party for all
purposes of this Credit Agreement for such Letter of Credit and such
statement shall not affect the Borrower's reimbursement obligations
hereunder with respect to such Letter of Credit.
(g) Modification and Extension. The issuance of any
supplement, modification, amendment, renewal, or extensions to any
Letter of Credit shall, for purposes hereof, be treated in all respects
the same as the issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. The Issuing Lender may have
the Letters of Credit be subject to The Uniform Customs and Practice
for Documentary Credits, as
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published as of the date of issue by the International Chamber of
Commerce (Publication No. 500 or the most recent publication, the
"UCP"), in which case the UCP may be incorporated therein and deemed in
all respects to be a part thereof.
(i) Responsibility of Issuing Lender. It is expressly
understood and agreed that the obligations of the Issuing Lender
hereunder to the Lenders are only those expressly set forth in this
Credit Agreement and that the Issuing Lender shall be entitled to
assume that the conditions precedent set forth in Section 5 have been
satisfied unless it shall have acquired actual knowledge that any such
condition precedent has not been satisfied; provided, however, that
nothing set forth in this Section 2.2 shall be deemed to prejudice the
right of any Lender to recover from the Issuing Lender any amounts made
available by such Lender to the Issuing Lender pursuant to this Section
2.2 in the event that it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit
constituted gross negligence or willful misconduct on the part of the
Issuing Lender.
(j) Conflict with LOC Documents. In the event of any conflict
between this Credit Agreement and any LOC Document, this Credit
Agreement shall govern.
(k) Indemnification of Issuing Lender.
(i) In addition to its other obligations under this
Credit Agreement, the Borrower hereby agrees to protect,
indemnify, pay and save the Issuing Lender harmless from and
against any and all claims, demands, liabilities, damages,
losses, costs, charges and expenses (including reasonable
attorneys' fees) that the Issuing Lender may incur or be
subject to as a consequence, direct or indirect, of (A) the
issuance of any Letter of Credit or (B) the failure of the
Issuing Lender to honor a drawing under a Letter of Credit as
a result of any act or omission, whether rightful or wrongful,
of any present or future Governmental Authority (all such acts
or omissions, herein called "Government Acts").
(ii) As between the Borrower and the Issuing Lender,
the Borrower shall assume all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. The
Issuing Lender shall not be responsible for: (A) the form,
validity, sufficiency, accuracy, genuineness or legal effect
of any document submitted by any party in connection with the
application for and issuance of any Letter of Credit, even if
it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the
validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds
thereof, in whole or in part, that may prove to be invalid or
ineffective for any reason; (C) 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; (D) any loss or delay in the
transmission or otherwise of any document required in order to
make a drawing under a Letter of Credit or of the proceeds
thereof; and (E) any consequences arising from causes beyond
the control of the Issuing Lender,
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including, without limitation, any Government Acts. None of
the above shall affect, impair, or prevent the vesting of the
Issuing Lender's rights or powers hereunder.
(iii) In furtherance and extension and not in
limitation of the specific provisions hereinabove set forth,
any action taken or omitted by the Issuing Lender, under or in
connection with any Letter of Credit or the related
certificates, if taken or omitted in good faith, shall not put
the Issuing Lender under any resulting liability to the
Borrower or any other Credit Party. It is the intention of the
parties that this Credit Agreement shall be construed and
applied to protect and indemnify the Issuing Lender against
any and all risks involved in the issuance of the Letters of
Credit, all of which risks are hereby assumed by the Borrower,
including, without limitation, any and all risks of the acts
or omissions, whether rightful or wrongful, of any present or
future Government Acts. The Issuing Lender shall not, in any
way, be liable for any failure by the Issuing Lender or anyone
else to pay any drawing under any Letter of Credit as a result
of any Government Acts or any other cause beyond the control
of the Issuing Lender.
(iv) Nothing in this subsection (k) is intended to
limit the reimbursement obligation of the Borrower contained
in this Section 2.2. The obligations of the Borrower under
this subsection (k) shall survive the termination of this
Credit Agreement. No act or omission of any current or prior
beneficiary of a Letter of Credit shall in any way affect or
impair the rights of the Issuing Lender to enforce any right,
power or benefit under this Credit Agreement.
(v) Notwithstanding anything to the contrary
contained in this subsection (k), the Borrower shall have no
obligation to indemnify the Issuing Lender in respect of any
liability incurred by the Issuing Lender arising solely out of
the gross negligence or willful misconduct of the Issuing
Lender, as determined by a court of competent jurisdiction.
2.3 Continuations and Conversions.
Subject to the terms of Section 5.2, the Borrower shall have the
option, on any Business Day, to continue existing Eurodollar Loans for a
subsequent Interest Period, to convert Base Rate Loans into Eurodollar Loans or
to convert Eurodollar Loans into Base Rate Loans; provided, however, that (a)
each such continuation or conversion must be requested by the Borrower pursuant
to a written Notice of Continuation/Conversion, in the form of Exhibit 2.3, in
compliance with the terms set forth below, (b) except as provided in Section
3.12, Eurodollar Loans may only be continued or converted into Base Rate Loans
on the last day of the Interest Period applicable hereto, (c) Eurodollar Loans
may not be continued nor may Base Rate Loans be converted into Eurodollar Loans
during the existence and continuation of a Default or Event of Default and (d)
any request to extend a Eurodollar Loan that fails to comply with the terms
hereof or any failure to request an extension of a Eurodollar Loan at the end of
an Interest Period shall constitute a conversion to a Base Rate Loan on the last
day of the applicable Interest Period. Each continuation or conversion must be
requested by the Borrower no later than 11:00 a.m. (i) on the date for a
requested
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conversion of a Eurodollar Loan to a Base Rate Loan or (ii) three Business Days
prior to the date for a requested continuation of a Eurodollar Loan or
conversion of a Base Rate Loan to a Eurodollar Loan, in each case pursuant to a
written Notice of Continuation/Conversion submitted to the Agent which shall set
forth (A) whether the Borrower wishes to continue or convert such Loans and (B)
if the request is to continue a Eurodollar Loan or convert a Base Rate Loan to a
Eurodollar Loan, the Interest Period applicable thereto.
2.4 Minimum Amounts.
Each request for a borrowing, conversion or continuation shall be
subject to the requirements that (a) each Eurodollar Loan shall be in a minimum
amount of $500,000 and in integral multiples of $50,000 in excess thereof, (b)
each Base Rate Loan shall, subject to the terms of Section 2.2(e), be in a
minimum amount of the lesser of $500,000 (and integral multiples of $250,000 in
excess thereof) or the remaining amount available under the Committed Amount and
(c) no more than 5 Eurodollar Loans shall be outstanding hereunder at any one
time. For the purposes of this Section, all Eurodollar Loans with the same
Interest Periods shall be considered as one Eurodollar Loan, but Eurodollar
Loans with different Interest Periods, even if they begin on the same date,
shall be considered as separate Eurodollar Loans.
2.5 Notes.
The Loans made by each Lender shall be evidenced by a duly executed
promissory note of the Borrower to each applicable Lender in the face amount of
its Commitment Percentage of the Committed Amount in substantially the form of
Exhibit 2.5(a).
SECTION 3
GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT
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3.1 Interest.
(a) Interest Rate. All Base Rate Loans shall accrue interest
at the Adjusted Base Rate and all Eurodollar Loans shall accrue
interest at the Adjusted Eurodollar Rate.
(b) Default Rate of Interest. Upon the occurrence, and during
the continuance, of an Event of Default, the principal of and, to the
extent permitted by law, interest on the Loans and any other amounts
owing (but not timely paid) hereunder or under the other Credit
Documents (including without limitation fees and expenses) shall bear
interest, payable on demand, at a per annum rate equal to 2% plus the
rate which would otherwise be applicable (or if no rate is applicable,
then the Adjusted Base Rate plus two percent (2%) per annum).
(c) Interest Payments. Interest on Loans shall be due and
payable in arrears on each Interest Payment Date. If an Interest
Payment Date falls on a date which is not a
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Business Day, such Interest Payment Date shall be deemed to be the next
succeeding Business Day, except that in the case of Eurodollar Loans
where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day.
3.2 Place and Manner of Payments.
All payments of principal, interest, fees, expenses and other amounts
to be made by a Credit Party under this Credit Agreement shall be received not
later than 3:00 p.m. on the date when due, in Dollars and in immediately
available funds, by the Agent at its offices at 000 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000. Payments received after such time shall be
deemed to have been received on the next Business Day. The Borrower shall, at
the time it makes any payment under this Credit Agreement, specify to the Agent,
the Loans, Letters of Credit, fees or other amounts payable by the Borrower
hereunder to which such payment is to be applied (and in the event that it fails
to specify, or if such application would be inconsistent with the terms hereof,
the Agent shall, subject to Section 3.7, distribute such payment to the Lenders
in such manner as the Agent may deem appropriate). The Agent will distribute. on
the same day of receipt, such payments to the applicable Lenders if any such
payment is received prior to 2:00 p.m.; otherwise the Agent will distribute such
payment to the applicable Lenders on the next succeeding Business Day. Whenever
any payment hereunder shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would cause the
payment to be made in the next following calendar month, then such payment shall
instead be made on the next preceding Business Day.
3.3 Prepayments.
(a) Voluntary Prepayments. The Borrower shall have the right
to prepay Loans in whole or in part from time to time without premium
or penalty; provided, however, that (i) Eurodollar Loans may only be
prepaid on three Business Days' prior written notice to the Agent and
any prepayment of Eurodollar Loans will be subject to Section 3.15 and
(ii) each such partial prepayment of Loans shall be in the minimum
principal amount of $500,000 and integral multiples of $50,000 in
excess thereof. Subject to the foregoing terms, amounts prepaid under
this Section 3.3(a) shall be applied as the Borrower may elect;
provided that if the Borrower fails to specify a voluntary prepayment
then such prepayment shall be applied first to Base Rate Loans and then
to Eurodollar Loans in direct order of Interest Period maturities.
Subject to the terms of Section 5.2, amounts prepaid under this Section
3.3(a) may be reborrowed. All prepayments pursuant to this Section
3.3(a) shall be subject to Section 3.15.
(b) Mandatory Prepayments.
(i) Committed Amount. If at any time the sum of the
aggregate amount of Loans outstanding plus LOC Obligations
outstanding exceeds the Committed Amount, the Borrower shall
immediately prepay the Loans and cash collateralize
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the LOC Obligations, in the manner and in an amount necessary
to be in compliance with Section 2.1 (such prepayment to be
applied as set forth in clause (iii) below). Subject to the
terms of Section 5.2, amounts prepaid under this Section
3.3(b)(i) may be reborrowed.
(ii) Asset Dispositions. Immediately upon the
occurrence of any Asset Disposition Prepayment Event, the
Borrower shall immediately prepay the Loans and cash
collateralize the LOC Obligations (with a corresponding
reduction in the Committed Amount in an amount equal to all
amounts so applied) in an aggregate amount equal to the Net
Cash Proceeds of the related Asset Disposition not applied (or
caused to be applied) by the Borrower during the related
Application Period to the purchase, acquisition or
construction of Eligible Assets as contemplated by the terms
of Section 8.5(v) (such prepayment to be applied as set forth
in clause (iii) below).
(iii) Application of Mandatory Prepayments. All
amounts required to be paid pursuant to this Section 3.3(b)
shall be applied to outstanding Loans and (after all
outstanding Loans have been repaid) to a cash collateral
account in respect of LOC Obligations. Prepayments of Loans
shall be applied first to Base Rate Loans and then to
Eurodollar Loans in direct order of Interest Period
maturities. All prepayments pursuant to this Section 3.3(b)
shall be subject to Section 3.15.
3.4 Fees.
(a) Commitment Fees.
In consideration of the Committed Amount being made available
by the Lenders hereunder, the Borrower agrees to pay to the Agent, for
the pro rata benefit of each applicable Lender (based on each Lender's
Commitment Percentage of the Committed Amount), a per annum fee equal
to the Applicable Percentage of the Unused Committed Amount (the
"Commitment Fees"). The accrued Commitment Fees shall commence to
accrue on the Closing Date and shall be due and payable in arrears on
the last Business Day of each fiscal quarter of the Borrower (as well
as on the Maturity Date and on any date that the Committed Amount is
reduced) for the immediately preceding fiscal quarter (or portion
thereof), beginning with the first of such dates to occur after the
Closing Date.
(b) Letter of Credit Fees.
(i) Standby Letter of Credit Issuance Fee. In
consideration of the issuance of standby Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Standby Letter of Credit
Fee") on such Lender's Commitment Percentage of the average
daily maximum amount available to be drawn under each such
standby Letter of Credit computed at a per annum rate for each
day from the date of issuance to the date of expiration equal
to the Applicable Percentage. The Standby Letter of Credit Fee
shall be payable
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quarterly in arrears 15 days after the end of each fiscal
quarter of the Borrower and on the Maturity Date.
(ii) Trade Letter of Credit Drawing Fee. In
consideration of the issuance of trade Letters of Credit
hereunder, the Borrower promises to pay to the Agent for the
account of each Lender a fee (the "Trade Letter of Credit
Fee") of one-eighth of one percent (1/8%) on such Lender's
Commitment Percentage of the amount of each drawing under any
such trade Letter of Credit. The Trade Letter of Credit Fee
will be payable on each date of drawing under a trade Letter
of Credit.
(iii) Issuing Lender Fees. In addition to the Standby
Letter of Credit Fee and the Trade Letter of Credit Fee
payable pursuant to subsections (i) and (ii) above, the
Borrower shall pay to the Issuing Lender for its own account,
without sharing by the other Lenders, the letter of credit
fronting and negotiation fees agreed to by the Borrower and
the Agent from time to time and the customary charges from
time to time to the Issuing Lender for its services in
connection with the issuance, amendment, payment, transfer,
administration, cancellation and conversion of, and drawings
under, such Letters of Credit (collectively, the "Issuing
Lender Fees").
(c) Administrative Fees. The Borrower agrees to pay to the
Agent, for its own account, an annual administrative fee of $15,000,
such fee to be payable in advance on the Closing Date and on each
anniversary date of the Closing Date thereafter, until the termination
of this Credit Agreement.
3.5 Payment in full at Maturity.
On the Maturity Date, the entire outstanding principal balance
of all Loans, together with accrued but unpaid interest and all other
sums owing with respect thereto, shall be due and payable in full,
unless accelerated sooner pursuant to Section 9.
3.6 Computations of Interest and Fees.
(a) Except for Base Rate Loans, in which case interest shall
be computed on the basis of a 365 or 366 day year as the case may be
(unless the Base Rate is determined by reference to the Federal Funds
Rate), all computations of interest and fees hereunder shall be made on
the basis of the actual number of days elapsed over a year of 360 days.
Interest shall accrue from and include the date of borrowing (or
continuation or conversion) but exclude the date of payment.
(b) It is the intent of the Lenders and the Credit Parties to
conform to and contract in strict compliance with applicable usury law
from time to time in effect. All agreements between the Lenders and the
Borrower are hereby limited by the provisions of this paragraph which
shall override and control all such agreements, whether now existing or
hereafter arising and whether written or oral. In no way, nor in any
event or contingency (including but not limited to prepayment or
acceleration of the maturity of any obligation),
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shall the interest taken, reserved, contracted for, charged, or
received under this Credit Agreement, under the Notes or otherwise,
exceed the maximum non-usurious amount permissible under applicable
law. If, from any possible construction of any of the Credit Documents
or any other document, interest would otherwise be payable in excess of
the maximum non-usurious amount, any such construction shall be subject
to the provisions of this paragraph and such documents shall be
automatically reduced to the maximum non-usurious amount permitted
under applicable law, without the necessity of execution of any
amendment or new document. If any Lender shall ever receive anything of
value which is characterized as interest on the Loans under applicable
law and which would, apart from this provision, be in excess of the
maximum lawful amount, an amount equal to the amount which would have
been excessive interest shall, without penalty, be applied to the
reduction of the principal amount owing on the Loans and not to the
payment of interest, or refunded to the Borrower or the other payor
thereof if and to the extent such amount which would have been
excessive exceeds such unpaid principal amount of the Loans. The right
to demand payment of the Loans or any other indebtedness evidenced by
any of the Credit Documents does not include the right to receive any
interest which has not otherwise accrued on the date of such demand,
and the Lenders do not intend to charge or receive any unearned
interest in the event of such demand. All interest paid or agreed to be
paid to the Lenders with respect to the Loans shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full stated term (including any renewal or
extension) of the Loans so that the amount of interest on account of
such indebtedness does not exceed the maximum non-usurious amount
permitted by applicable law.
3.7 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan borrowing (including, without limitation,
each Mandatory Borrowing), each payment or prepayment of principal of
any Loan, each payment of fees (other than the Issuing Lender Fees
retained by the Issuing Lender for its own account and the
Administrative Fees retained by the Agent for its own account), each
reduction of the Committed Amount, and each conversion or continuation
of any Loan, shall (except as otherwise provided in Section 3.3(c)) be
allocated pro rata among the relevant Lenders in accordance with the
respective Commitment Percentages of such Lenders (or, if the
Commitments of such Lenders have expired or been terminated, in
accordance with the respective principal amounts of the outstanding
Loans and Participation Interests of such Lenders); provided that, if
any Lender shall have failed to pay its applicable pro rata share of
any Loan, then any amount to which such Lender would otherwise be
entitled pursuant to this subsection (a) shall instead be payable to
the Agent; provided further, that in the event any amount paid to any
Lender pursuant to this subsection (a) is rescinded or must otherwise
be returned by the Agent, each Lender shall, upon the request of the
Agent, repay to the Agent the amount so paid to such Lender, with
interest for the period commencing on the date such payment is returned
by the Agent until the date the Agent receives such repayment at a rate
per annum equal to, during the period to but excluding the date two
Business Days after such request, the Federal Funds Rate, and
thereafter, the Base Rate plus two percent (2%) per annum; and
(b) Letters of Credit. Each payment of unreimbursed drawings
in respect of LOC Obligations shall be allocated to each Lender pro
rata in accordance with its Commitment Percentage; provided that, if
any Lender shall have failed to pay its applicable pro rata share of
any drawing under any Letter of Credit, then any amount to which such
Lender would otherwise be entitled pursuant to this subsection (b)
shall instead be payable to the Issuing Lender; provided further, that
in the event any amount paid to any Lender pursuant to this subsection
(b) is rescinded or must otherwise be returned by the Issuing Lender,
each Lender shall, upon the request of the Issuing Lender, repay to the
Agent for the account of the Issuing Lender the amount so paid to such
Lender, with interest for the period commencing on the date such
payment is returned by the Issuing Lender until the date the Issuing
Lender receives such repayment at a rate per annum equal to, during the
period
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to but excluding the date two Business Days after such request, the
Federal Funds Rate, and thereafter, the Base Rate plus two percent (2%)
per annum.
3.8 Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement, after
the occurrence and during the continuance of an Event of Default, all amounts
collected or received by the Agent or any Lender on account of amounts
outstanding under any of the Credit Documents or in respect of the Collateral
shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents and any protective advances made by the
Agent with respect to the Collateral under or pursuant to the terms of
the Collateral Documents;
SECOND, to payment of any fees owed to the Agent or the
Issuing Lender;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including, without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents;
FOURTH, to the payment of all accrued fees and interest
payable to the Lenders hereunder;
FIFTH, to the payment of the outstanding principal amount of
the Loans, to the payment or cash collateralization of the outstanding
LOC Obligations, and, in the case of any proceeds of Collateral, to the
outstanding principal portion of any Hedging Obligations, pro rata, as
set forth below;
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SIXTH, to all other obligations which shall have become due
and payable under the Credit Documents and not repaid pursuant to
clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans, LOC
Obligations and Hedging Obligations held by such Lender bears to the aggregate
then outstanding Loans, LOC Obligations and Hedging Obligations held by all of
the Lenders) of amounts available to be applied pursuant to clauses "THIRD",
"FOURTH," "FIFTH," and "SIXTH" above; and (c) to the extent that any amounts
available for distribution pursuant to clause "FIFTH" above are attributable to
the issued but undrawn amount of an outstanding Letter of Credit, such amounts
shall be held by the Agent in a cash collateral account and applied (x) first,
to reimburse the Issuing Lender from time to time for any drawings under such
Letter of Credit and (y) then, following the expiration of such Letter of
Credit, to all other obligations of the types described in clauses "FIFTH" and
"SIXTH" above in the manner provided in this Section 3.8.
3.9 Sharing of Payments.
The Lenders agree among themselves that, except to the extent otherwise
provided herein, in the event that any Lender shall obtain payment in respect of
any Loan, unreimbursed drawing with respect to any LOC Obligations or any other
obligation owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a secured
claim under Section 506 of the Bankruptcy Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly pay in cash or purchase
from the other Lenders a participation in such Loans, LOC Obligations, and other
obligations in such amounts, and make such other adjustments from time to time,
as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by payment in cash or a repurchase of a participation
theretofore sold, return its share of that benefit (together with its share of
any accrued interest payable with respect thereto) to each Lender whose payment
shall have been rescinded or otherwise restored. The Borrower agrees that any
Lender so purchasing such a participation may, to the fullest extent permitted
by law, exercise all rights of payment, including setoff, banker's lien or
counterclaim, with respect to such participation as fully as if such Lender were
a holder of such Loan, LOC Obligation or other obligation in the amount of such
participation. Except as otherwise expressly provided in this Credit Agreement,
if any Lender or the Agent shall fail to remit to the Agent or any other Lender
an amount payable by such Lender or the Agent to the Agent or such other Lender
pursuant to this Credit Agreement on the date when
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such amount is due, such payments shall be made together with interest thereon
for each date from the date such amount is due until the date such amount is
paid to the Agent or such other Lender at a rate per annum equal to the Federal
Funds Rate. If under any applicable bankruptcy, insolvency or other similar law,
any Lender receives a secured claim in lieu of a setoff to which this Section
3.9 applies, such Lender shall, to the extent practicable, exercise its rights
in respect of such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.9 to share in the benefits of any recovery on such
secured claim.
3.10 Capital Adequacy.
If, after the date hereof, any Lender has determined that the adoption
or the becoming effective of, or any change in, or any change by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof in the interpretation or administration
of, any applicable law, rule or regulation regarding capital adequacy, or
compliance by such Lender, or its parent corporation, with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's (or parent corporation's)
capital or assets as a consequence of its commitments or obligations hereunder
to a level below that which such Lender, or its parent corporation, could have
achieved but for such adoption, effectiveness, change or compliance (taking into
consideration such Lender's (or parent corporation's) policies with respect to
capital adequacy), then, upon notice from such Lender to the Borrower, the
Borrower shall be obligated to pay to such Lender such additional amount or
amounts as will compensate such Lender for such reduction. This covenant shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
3.11 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent shall have
determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, the Agent shall give telecopy or telephonic notice
thereof to the Borrower and the Lenders as soon as practicable thereafter. If
such notice is given (a) any Eurodollar Loans requested to be made on the first
day of such Interest Period shall be made as Base Rate Loans, (b) any Loans that
were to have been converted on the first day of such Interest Period to or
continued as Eurodollar Loans shall be converted to or continued as Base Rate
Loans and (c) any outstanding Eurodollar Loans shall be converted, on the first
day of such Interest Period, to Base Rate Loans. Until such notice has been
withdrawn by the Agent, no further Eurodollar Loans shall be made or continued
as such, nor shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.
3.12 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or application thereof
occurring after the Closing Date
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shall make it unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly give
written notice of such circumstances to the Borrower and the Agent (which notice
shall be withdrawn whenever such circumstances no longer exist), (b) the
commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall
forthwith be canceled and, until such time as it shall no longer be unlawful for
such Lender to make or maintain Eurodollar Loans, such Lender shall then have a
commitment only to make a Base Rate Loan when a Eurodollar Loan is requested and
(c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be
converted automatically to Base Rate Loans on the respective last days or the
then current Interest Periods with respect to such Loans or within such earlier
period as required by law. If any such conversion of a Eurodollar Loan occurs on
a day which is not the last day of the then current Interest Period with respect
thereto, the Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to Section 3.15.
3.13 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or compliance by
any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority, in each case made
subsequent to the Closing Date (or, if later, the date on which such Lender
becomes a Lender):
(a) shall subject such Lender to any tax of any kind
whatsoever with respect to any Letter of Credit, any Eurodollar Loans
made by it or its obligation to make Eurodollar Loans, or change the
basis of taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes covered by Section 3.14 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Lender to comply
with its obligations under Section 3.14(b)) and changes in taxes
measured by or imposed upon the overall net income, or franchise tax
(imposed in lieu of such net income tax), of such Lender or its
applicable lending office, branch, or any affiliate thereof);
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurodollar Rate
hereunder; or
(c) shall impose on such Lender any other condition (excluding
any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, upon notice to the Borrower from such Lender,
through the Agent, in accordance herewith, the Borrower shall be obligated to
promptly pay such
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Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable, provided that, in
any such case, the Borrower may elect to convert the Eurodollar Loans made by
such Lender hereunder to Base Rate Loans by giving the Agent at least one
Business Day's notice of such election, in which case the Borrower shall
promptly pay to such Lender, upon demand, without duplication, such amounts, if
any, as may be required pursuant to Section 3.15. If any Lender becomes entitled
to claim any additional amounts pursuant to this Section 3.13, it shall provide
prompt notice thereof to the Borrower, through the Agent, certifying (x) that
one of the events described in this Section 3.13 has occurred and describing in
reasonable detail the nature of such event, (y) as to the increased cost or
reduced amount resulting from such event and (z) as to the additional amount
demanded by such Lender and a reasonably detailed explanation of the calculation
thereof. Such a certificate as to any additional amounts payable pursuant to
this Section 3.13 submitted by such Lender, through the Agent, to the Borrower
shall be conclusive and binding on the parties hereto in the absence of manifest
error. This covenant shall survive the termination of this Credit Agreement and
the payment of the Loans and all other amounts payable hereunder.
3.14 Taxes.
(a) Except as provided below in this Section 3.14, all
payments made by the Borrower under this Credit Agreement and any Notes
shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any court, or governmental body, agency or other official,
excluding taxes measured by or imposed upon the overall net income of
any Lender or its applicable lending office, or any branch or affiliate
thereof, and all franchise taxes, branch taxes, taxes on doing business
or taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each
case imposed in lieu of net income taxes, imposed: (i) by the
jurisdiction under the laws of which such Lender, applicable lending
office, branch or affiliate is organized or is located, or in which its
principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof; or (ii)
by reason of any connection between the jurisdiction imposing such tax
and such Lender, applicable lending office, branch or affiliate other
than a connection arising solely from such Lender having executed,
delivered or performed its obligations, or received payment under or
enforced, this Credit Agreement or any Notes. If any such non-excluded
taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("Non-Excluded Taxes") are required to be withheld from
any amounts payable to the Agent or any Lender hereunder or under any
Notes, (A) the amounts so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender
(after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in
this Credit Agreement and any Notes, provided, however, that the
Borrower shall be entitled to deduct and withhold any Non-Excluded
Taxes and shall not be required to increase any such amounts payable to
any Lender that is not organized under the laws of the United States of
America or a state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this Section 3.14 whenever any
Non-Excluded Taxes are
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payable by the Borrower, and (B) as promptly as possible thereafter the
Borrower shall send to the Agent for its own account or for the account
of such Lender, as the case may be, a certified copy of an original
official receipt received by the Borrower, if any, showing payment
thereof. If the Borrower fails to pay any Non-Excluded Taxes when due
to the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the Borrower
shall indemnify the Agent and any Lender for any incremental taxes,
interest or penalties that may become payable by the Agent or any
Lender as a result of any such failure. The agreements in this
subsection shall survive the termination of this Credit Agreement and
the payment of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(i) (A) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such Lender,
deliver to the Borrower and the Agent (x) two duly completed
copies of United States Internal Revenue Service Form 1001 or
4224, or successor applicable form, as the case may be,
certifying that it is entitled to receive payments under this
Credit Agreement and any Notes without deduction or
withholding of any United States federal income taxes and (y)
an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding
tax;
(B) deliver to the Borrower and the Agent two further
copies of any such form or certification on or before the date
that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a
change in the most recent form previously delivered by it to
the Borrower; and
(C) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrower or the Agent; or
(ii) in the case of any such Lender that is not a
"bank" within the meaning of Section 881(c)(3)(A) of the
Internal Revenue Code, (A) represent to the Borrower (for the
benefit of the Borrower and the Agent) that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (B) agree to furnish to the Borrower, on or
before the date of any payment by the Borrower, with a copy to
the Agent, two accurate and complete original signed copies of
Internal Revenue Service Form W-8, or successor applicable
form certifying to such Lender's legal entitlement at the date
of such certificate to an exemption from U.S. withholding tax
under the provisions of Section 881(c) of the Internal Revenue
Code with respect to payments to be made under this Credit
Agreement and any Notes (and to deliver to the Borrower and
the Agent two further copies of such form on or before the
date it expires or becomes obsolete and after the occurrence
of any event requiring a change in the most recently provided
form and, if necessary,
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obtain any extensions of time reasonably requested by the
Borrower or the Agent for filing and completing such forms),
and (C) agree, to the extent legally entitled to do so, upon
reasonable request by the Borrower, to provide to the Borrower
(for the benefit of the Borrower and the Agent) such other
forms as may be reasonably required in order to establish the
legal entitlement of such Lender to an exemption from
withholding with respect to payments under this Credit
Agreement and any Notes.
Notwithstanding the above, if any change in treaty, law or regulation
has occurred after the date such Person becomes a Lender hereunder
which renders all such forms (including successor forms) inapplicable
or which would prevent such Lender from duly completing and delivering
any such form with respect to it and such Lender so advises the
Borrower and the Agent then such Lender shall be exempt from such
requirements. Each Person that shall become a Lender or a participant
of a Lender pursuant to Section 11.3 shall, upon the effectiveness of
the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection (b);
provided that in the case of a participant of a Lender, the obligations
of such participant of a Lender pursuant to this subsection (b) shall
be determined as if the participant of a Lender were a Lender except
that such participant of a Lender shall furnish all such required
forms, certifications and statements to the Lender from which the
related participation shall have been purchased.
3.15 Indemnity.
The Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct) as a
consequence of (a) default by the Borrower in making a borrowing of, conversion
into or continuation of Eurodollar Loans after the Borrower has given a written
notice requesting the same in accordance with the provisions of this Credit
Agreement, (b) default by the Borrower in making any prepayment of a Eurodollar
Loan after the Borrower has given a written notice thereof in accordance with
the provisions of this Credit Agreement and (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest Period with
respect thereto. Such indemnification may include an amount equal to (i) the
amount of interest which would have accrued on the amount so prepaid, or not so
borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
the applicable Interest Period (or, in the case of a failure to borrow, convert
or continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Eurodollar
Loans provided for herein (excluding, however, the Applicable Percentage
included therein, if any) minus (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on such
amount by placing such amount on deposit for a comparable period with leading
banks in the interbank Eurodollar market. The agreements in this Section shall
survive the termination of this Credit Agreement and the payment of the Loans
and all other amounts payable hereunder.
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SECTION 4
GUARANTY
--------
4.1 Guaranty of Payment.
Subject to Section 4.7 below, each of the Guarantors hereby, jointly
and severally, unconditionally guarantees to each Lender, each Affiliate of
Lender that enters into any agreement with a Credit Party giving rise to Hedging
Obligations of such Credit Party and the Agent the prompt payment of the Credit
Party Obligations in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration or otherwise). The Guarantors additionally, jointly
and severally, unconditionally guarantee to each Lender the timely performance
of all other obligations under the Credit Documents and any agreements giving
rise to Hedging Obligations of any Credit Party. This guaranty is a guaranty of
payment and not of collection and is a continuing guaranty and shall apply to
all Credit Party Obligations whenever arising.
4.2 Obligations Unconditional.
The obligations of the Guarantors hereunder are absolute and
unconditional, irrespective of the value, genuineness, validity, regularity or
enforceability of any of the Credit Documents or any agreements giving rise to
Hedging Obligations on the part of any Credit Party, or any other agreement or
instrument referred to therein, to the fullest extent permitted by applicable
law, irrespective of any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor.
Each Guarantor agrees that this guaranty may be enforced by the Lenders without
the necessity at any time of resorting to or exhausting any other security or
collateral and without the necessity at any time of having recourse to the Notes
or any other of the Credit Documents or any collateral, if any, hereafter
securing the Credit Party Obligations or otherwise and each Guarantor hereby
waives the right to require the Lenders to proceed against the Borrower or any
other Person (including a co-guarantor) or to require the Lenders to pursue any
other remedy or enforce any other right. Each Guarantor further agrees that it
shall have no right of subrogation, indemnity, reimbursement or contribution
against the Borrower or any other Guarantor of the Credit Party Obligations for
amounts paid under this guaranty until such time as the Lenders (and any
Affiliates of Lenders entering into any agreement with any Credit Party giving
rise to Hedging Obligations of such Credit Party) have been paid in full, all
Commitments under the Credit Agreement have been terminated and no Person or
Governmental Authority shall have any right to request any return or
reimbursement of funds from the Lenders in connection with monies received under
the Credit Documents. Each Guarantor further agrees that nothing contained
herein shall prevent the Lenders from suing on the Notes or any of the other
Credit Documents or any agreements giving rise to Hedging Obligations on the
part of any Credit Party or foreclosing its security interest in or Lien on any
collateral, if any, securing the Credit Party Obligations or from exercising any
other rights available to it under this Credit Agreement, the Notes, any other
of the Credit Documents, or any other instrument of security, if any, and the
exercise of any of the aforesaid rights and the completion of any foreclosure
proceedings shall not constitute a discharge of any of any Guarantor's
obligations hereunder; it being the purpose and intent of each Guarantor that
its obligations hereunder shall be
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absolute, independent and unconditional under any and all circumstances. Neither
any Guarantor's obligations under this guaranty nor any remedy for the
enforcement thereof shall be impaired, modified, changed or released in any
manner whatsoever by an impairment, modification, change, release or limitation
of the liability of the Borrower or by reason of the bankruptcy or insolvency of
the Borrower. Each Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Credit Party Obligations and notice of or
proof of reliance of by the Agent or any Lender upon this Guarantee or
acceptance of this Guarantee. The Credit Party Obligations, and any of them,
shall conclusively be deemed to have been created, contracted or incurred, or
renewed, extended, amended or waived, in reliance upon this Guarantee. All
dealings between the Borrower and any of the Guarantors, on the one hand, and
the Agent and the Lenders, on the other hand, likewise shall be conclusively
presumed to have been had or consummated in reliance upon this Guarantee.
4.3 Modifications.
Each Guarantor agrees that (a) all or any part of the security now or
hereafter held for the Credit Party Obligations, if any, may be exchanged,
compromised or surrendered from time to time; (b) the Lenders shall not have any
obligation to protect, perfect, secure or insure any such security interests,
liens or encumbrances now or hereafter held, if any, for the Credit Party
Obligations or the properties subject thereto; (c) the time or place of payment
of the Credit Party Obligations may be changed or extended, in whole or in part,
to a time certain or otherwise, and may be renewed or accelerated, in whole or
in part; (d) the Borrower and any other party liable for payment under the
Credit Documents may be granted indulgences generally; (e) any of the provisions
of the Notes or any of the other Credit Documents may be modified, amended or
waived; (f) any party (including any co-guarantor) liable for the payment
thereof may be granted indulgences or be released; and (g) any deposit balance
for the credit of the Borrower or any other party liable for the payment of the
Credit Party Obligations or liable upon any security therefor may be released,
in whole or in part, at, before or after the stated, extended or accelerated
maturity of the Credit Party Obligations, all without notice to or further
assent by such Guarantor, which shall remain bound thereon, notwithstanding any
such exchange, compromise, surrender, extension, renewal, acceleration,
modification, indulgence or release.
4.4 Waiver of Rights.
Each Guarantor expressly waives to the fullest extent permitted by
applicable law: (a) notice of acceptance of this guaranty by the Lenders and of
all extensions of credit to the Borrower by the Lenders; (b) presentment and
demand for payment or performance of any of the Credit Party Obligations; (c)
protest and notice of dishonor or of default (except as specifically required in
the Credit Agreement) with respect to the Credit Party Obligations or with
respect to any security therefor; (d) notice of the Lenders obtaining, amending,
substituting for, releasing, waiving or modifying any security interest, lien or
encumbrance, if any, hereafter securing the Credit Party Obligations, or the
Lenders' subordinating, compromising, discharging or releasing such security
interests, liens or encumbrances, if any; (e) all other notices to which such
Guarantor might otherwise be entitled; and (f) demand for payment under this
guaranty. Without limiting the generality of any other provision of this Section
4, each Guarantor hereby specifically waives the
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benefits of N.C. Gen. Stat. Sections 26-7 through 26-9, inclusive. Each
Guarantor further agrees that such Guarantor shall have no right of recourse to
security for the Credit Parties' Obligations, except through the exercise of the
rights of subrogation pursuant to Section 4.2 and through the exercise of rights
of contribution pursuant to Section 4.8.
4.5 Reinstatement.
The obligations of the Guarantors under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any payment by
or on behalf of any Person in respect of the Credit Party Obligations is
rescinded or must be otherwise restored by any holder of any of the Credit Party
Obligations, whether as a result of any proceedings in bankruptcy or
reorganization or otherwise, and each Guarantor agrees that it will indemnify
the Agent and each Lender on demand for all reasonable costs and expenses
(including, without limitation, reasonable fees of counsel) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.6 Remedies.
The Guarantors agree that, as between the Guarantors, on the one hand,
and the Agent and the Lenders, on the other hand, the Credit Party Obligations
may be declared to be forthwith due and payable as provided in Section 9 (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9) notwithstanding any stay, injunction or
other prohibition preventing such declaration (or preventing such Credit Party
Obligations from becoming automatically due and payable) as against any other
Person and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and payable), such
Credit Party Obligations (whether or not due and payable by any other Person)
shall forthwith become due and payable by the Guarantors. The Guarantors
acknowledge and agree that their obligations hereunder are secured in accordance
with the terms of the Security Agreements and the other Collateral Documents and
that the Lenders may exercise their remedies thereunder in accordance with the
terms thereof.
4.7 Limitation of Guaranty.
Notwithstanding any provision to the contrary contained herein or in
any of the other Credit Documents, to the extent the obligations of any
Guarantor shall be adjudicated to be invalid or unenforceable for any reason
(including, without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations of such
Guarantor hereunder shall be limited to the maximum amount that is permissible
under applicable law (whether federal or state and including, without
limitation, the Bankruptcy Code).
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4.8 Rights of Contribution.
The Guarantors hereby agree, as among themselves, that if any Guarantor
shall become an Excess Funding Guarantor (as defined below), each other
Guarantor shall, on demand of such Excess Funding Guarantor (but subject to the
next sentence hereof), pay to such Excess Funding Guarantor an amount equal to
such Guarantor's Pro Rata Share (as defined below and determined, for this
purpose, without reference to the properties, assets, liabilities and debts of
such Excess Funding Guarantor) of such Excess Payment (as defined below). The
payment obligation of any Guarantor to any Excess Funding Guarantor under this
Section 4.8 shall be subordinate and subject in right of payment to the prior
payment in full of the obligations of such Guarantor under the other provisions
of this Section 4, and such Excess Funding Guarantor shall not exercise any
right or remedy with respect to such excess until payment and satisfaction in
full of all of such obligations. For purposes hereof, (i) "Excess Funding
Guarantor" shall mean, in respect of any obligations arising under the other
provisions of this Section 4 (hereafter, the "Guaranteed Obligations"), a
Guarantor that has paid an amount in excess of its Pro Rata Share of the
Guaranteed Obligations; (ii) "Excess Payment" shall mean, in respect of any
Guaranteed Obligations, the amount paid by an Excess Funding Guarantor in excess
of its Pro Rata Share of such Guaranteed Obligations; and (iii) "Pro Rata
Share", for the purposes of this Section 4.8, shall mean, for any Guarantor, the
ratio (expressed as a percentage) of (a) the amount by which the aggregate
present fair salable value of all of its assets and properties exceeds the
amount of all debts and liabilities of such Guarantor (including contingent,
subordinated, unmatured, and unliquidated liabilities, but excluding the
obligations of such Guarantor hereunder) to (b) the amount by which the
aggregate present fair salable value of all assets and other properties of the
Borrower and all of the Guarantors exceeds the amount of all of the debts and
liabilities (including contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrower and the Guarantors
hereunder) of the Borrower and all of the Guarantors, all as of the Closing Date
(if any Guarantor becomes a party hereto subsequent to the Closing Date, then
for the purposes of this Section 4.8 such subsequent Guarantor shall be deemed
to have been a Guarantor as of the Closing Date and the information pertaining
to, and only pertaining to, such Guarantor as of the date such Guarantor became
a Guarantor shall be deemed true as of the Closing Date Notwithstanding the
foregoing, all rights of contribution against any Guarantor shall terminate from
and after such time, if ever, that such Guarantor shall be relieved of its
obligations pursuant to Section 8.4.
SECTION 5
CONDITIONS PRECEDENT
--------------------
5.1 Closing Conditions.
The obligation of the Lenders to enter into this Credit Agreement and
make the initial Extension of Credit is subject to satisfaction of the following
conditions:
(a) Executed Credit Documents. Receipt by the Agent of duly
executed copies of (i) this Credit Agreement, (ii) the Notes, (iii) the
Collateral Documents and (iv) all other
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Credit Documents, each in form and substance acceptable to the Lenders
in their sole discretion.
(b) Corporate Documents. Receipt by the Agent of the
following:
(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of
each Credit Party certified to be true and complete as of a
recent date by the appropriate Governmental Authority of the
state or other jurisdiction of its incorporation and certified
by a secretary or assistant secretary of such Credit Party to
be true and correct as of the Closing Date.
(ii) Bylaws. A copy of the bylaws of each Credit
Party certified by a secretary or assistant secretary of such
Credit Party to be true and correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Board
of Directors of each Credit Party approving and adopting the
Credit Documents to which it is a party, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary of
such Credit Party to be true and correct and in force and
effect as of the Closing Date.
(iv) Good Standing. Copies of (A) certificates of
good standing, existence or its equivalent with respect to
each Credit Party certified as of a recent date by the
appropriate Governmental Authorities of the state or other
jurisdiction of incorporation and each other jurisdiction in
which the failure to so qualify and be in good standing would
have a Material Adverse Effect on the business or operations
of a Credit Party in such jurisdiction and (B) to the extent
available, a certificate indicating payment of all corporate
franchise taxes certified as of a recent date by the
appropriate governmental taxing authorities.
(v) Incumbency. An incumbency certificate of each
Credit Party certified by a secretary or assistant secretary
to be true and correct as of the Closing Date.
(c) Personal Property Collateral. Receipt by the Agent of the
following:
(i) searches of Uniform Commercial Code ("UCC")
filings in the jurisdiction of the chief executive office of
each Credit Party and such other jurisdictions where
Collateral is located (as reasonably determined by the Agent),
copies of the financing statements on file in such
jurisdictions and evidence that no Liens exist other than
Permitted Liens;
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Agent's sole
discretion, to perfect the Lenders' security interest in the
Collateral;
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(iii) searches of ownership of trademarks in the
appropriate governmental offices and such
patent/trademark/copyright filings as requested by the Agent
in order to perfect the Agent's security interest in the
Collateral; and
(iv) all duly executed consents as are necessary, in
the Agent's sole discretion, to perfect the Lenders' security
interest in the Collateral.
(c) Legal Opinion. Receipt by the Agent of a legal opinion of
Xxxxxxxx, Xxxxxxx & Xxxxxxx, counsel for the Credit Parties, dated as
of the Closing Date and substantially in the form of Schedule 5.1(d).
(e) Payoff Letter. Receipt by the Agent of a payoff letter
from The First National Bank of Boston in form and substance
satisfactory to the Agent.
(f) Evidence of Insurance. Receipt by the Agent of copies of
insurance policies or certificates of insurance of the Consolidated
Parties evidencing liability and casualty insurance meeting the
requirements set forth in the Credit Documents, including, but not
limited to, naming the Agent as sole loss payee on behalf of the
Lenders.
(g) Officer's Certificates.
(i) Receipt by the Agent of a certificate or
certificates executed by an Executive Officer of the Borrower
as of the Closing Date stating that (A) each Consolidated
Party is in compliance with all existing financial
obligations, (B) all governmental, shareholder and third party
consents and approvals, if any, with respect to the Credit
Documents and the transactions contemplated thereby have been
obtained, (C) no action, suit, investigation or proceeding is
pending or threatened in any court or before any arbitrator or
governmental instrumentality that purports to affect any
Consolidated Party or any transaction contemplated by the
Credit Documents, if such action, suit, investigation or
proceeding could have or could be reasonably expected to have
a Material Adverse Effect and (D) immediately after giving
effect to this Credit Agreement, the other Credit Documents
and all the transactions contemplated therein to occur on such
date, (1) each of the Credit Parties is Solvent, (2) no
Default or Event of Default exists, (3) all representations
and warranties contained herein and in the other Credit
Documents are true and correct in all material respects, and
(4) the Credit Parties are in compliance with each of the
financial covenants set forth in Section 7.12.
(ii) Receipt by the Agent of a certificate or
certificates executed by an Executive Officer of the Parent as
of the Closing Date stating that (A) the Parent is in
compliance with all existing financial obligations and (B)
immediately after giving effect to this Credit Agreement, the
other Credit Documents and all the transactions contemplated
therein, the Parent is Solvent.
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(h) Government Consent. Receipt by the Agent of evidence that
all governmental, shareholder and material third party consents in
connection with the financings and other transactions contemplated
hereby and the absence of any action being taken by any authority that
could reasonably be likely to restrain, prevent or impose any material
adverse conditions on such financings and other transactions or that
could reasonably be likely to seek or threaten any of the foregoing,
and no law or regulation shall be applicable which in the judgment of
the Agent could reasonably be likely to have such effect.
(i) Litigation. There shall not exist any pending or
threatened action, suit, investigation or proceeding against a
Consolidated Party that would have or would reasonably be expected to
have a Material Adverse Effect.
(j) Material Adverse Effect. There shall not have occurred a
change since December 31, 1996 that has had or could reasonably be
expected to have a Material Adverse Effect.
(k) Senior Notes. (i) The Borrower shall have entered into the
Senior Note Indenture and a Senior Note Purchase Agreement with each of
the Senior Noteholders, (ii) the Borrower shall have executed the
Senior Notes in accordance with the terms of the Senior Note Indenture
and the Senior Note Purchase Agreements and (iii) the Agent shall have
received a copy, certified by an officer of the Borrower as true and
complete, of the Senior Note Indenture, each of the Senior Note
Purchase Agreements and each of the Senior Notes, in each case as
originally executed and delivered, and no amendment or modification
thereof which could have a materially adverse effect on the Lenders and
to which any of the Lenders shall have objected shall have been entered
into on or prior to the Closing Date;
(l) Proceeds of Senior Notes. The Borrower shall have received
proceeds from the sale of the Senior Notes in an aggregate principal
amount of up to $100,000,000.
(m) Solvency Opinion. Receipt by the Agent, with a copy for
each Lender, of an opinion letter from Xxxxxx, Xxxxxx & Co., addressed
to the Agent and each Lender and dated the Closing Date, as to the
Solvency of the Borrower on a consolidated basis immediately after
giving effect to the Loans to be made and the Letters of Credit, if
any, to be issued on the Closing Date which opinion shall be in form
and substance reasonably acceptable to the Agent.
(n) Availability. After giving effect to the initial Loans
made and Letters of Credit issued hereunder on the Closing Date,
consummation of the Refinancing and the other transactions contemplated
by this Credit Agreement to occur on the Closing Date, there shall be
at least $7,500,000 of availability existing under the Committed
Amount.
(o) Consummation of Refinancing. Receipt by the Agent of
evidence that (i) all Indebtedness of the Consolidated Parties
outstanding immediately prior to giving effect to
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the issuance of the Senior Notes and the initial Extensions of Credit
hereunder (other than Indebtedness set forth in Schedule 6.10) shall
have been repaid in full, (ii) the distribution to all shareholders of
the Parent (including Xxxxxx X. Xxx Company and affiliates thereof)
does not exceed $30,000,000 and (iii) the aggregate amount of fees and
expenses paid and payable in connection with the Refinancing does not
exceed $6,000,000.
(p) Credit Agreement Fees and Expenses. Payment by the
Borrower of all fees and expenses owed by it to the Lenders and the
Agent.
(q) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by any
Lender, including, but not limited to, information regarding
litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), real estate leases, material contracts, debt
agreements, property ownership and contingent liabilities of the
Consolidated Parties.
5.2 Conditions to All Extensions of Credit.
In addition to the conditions precedent stated elsewhere herein, the
Lenders shall not be obligated to make, continue or convert Loans nor shall an
Issuing Lender be required to issue or extend a Letter of Credit unless:
(a) Notice. The Borrower shall have delivered (i) in the case
of any new Loan, a Notice of Borrowing, duly executed and completed, by
the time specified in Section 2.1, (ii) in the case of any Letter of
Credit, the Issuing Lender shall have received an appropriate request
for issuance in accordance with the provisions of Section 2.2 and (iii)
in the case of any continuation or conversion of a Loan, a duly
executed and completed Notice of Continuation/Conversion by the time
specified in Section 2.3;
(b) Representations and Warranties. The representations and
warranties made by the Credit Parties in any Credit Document are true
and correct in all material respects at and as if made as of such date
except to the extent they expressly relate to an earlier date;
(c) No Default. No Default or Event of Default shall exist or
be continuing either prior to or after giving effect thereto;
(d) No Bankruptcy Event. No Bankruptcy Event with respect to
any Consolidated Party shall have occurred and remain undismissed,
undischarged or unbonded;
(e) No Material Adverse Effect. No Material Adverse Effect
shall have occurred since December 31, 1996; and
(f) Availability. Immediately after giving effect to the
making of a Loan (and the application of the proceeds thereof) or to
the issuance of a Letter of Credit, as the case
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may be, the sum of the Loans outstanding plus LOC Obligations
outstanding shall not exceed the Committed Amount.
The delivery of each Notice of Borrowing, each Notice of Extension/Conversion
and each request for a Letter of Credit shall constitute a representation and
warranty by the Borrower of the correctness of the matters specified in
subsections (b), (c), (d), (e) and (f) above.
SECTION 6
REPRESENTATIONS AND WARRANTIES
------------------------------
The Credit Parties hereby represent to the Agent and each Lender that:
6.1 Financial Condition.
(a) The audited consolidated and consolidating balance sheet
of Consolidated Parties as of December 31, 1996 and the audited
consolidated and consolidating statements of earnings and statements of
cash flows for the years ended December 31, 1994 and December 31, 1995
have heretofore been furnished to each Lender. Such financial
statements (including the notes thereto) (i) have been audited by
Coopers & Xxxxxxx L.L.P., (ii) have been prepared in accordance with
GAAP consistently, applied throughout the periods covered thereby and
(iii) present fairly (on the basis disclosed in the footnotes to such
financial statements) the consolidated and consolidating financial
condition, results of operations and cash flows of the Consolidated
Parties as of such date and for such periods. The unaudited interim
balance sheets of the Consolidated Parties as at the end of, and the
related unaudited interim statements of earnings and of cash flows for,
each fiscal month and quarterly period ended after December 31, 1996
and prior to the Closing Date have heretofore been furnished to each
Lender. Such interim financial statements for each such quarterly
period, (i) have been prepared in accordance with GAAP consistently
applied throughout the periods covered thereby and (ii) present fairly
(on the basis disclosed in the footnotes to such financial statements)
the consolidated and consolidating financial condition, results of
operations and cash flows of the Consolidated Parties as of such date
and for such periods. During the period from December 31, 1996 to and
including the Closing Date, there has been no sale, transfer or other
disposition by any Consolidated Party of any material part of the
business or property of the Consolidated Parties, taken as a whole, no
purchase or other acquisition by any Consolidated Party of any business
or property (including any capital stock of any other Person) material
in relation to the consolidated financial condition of the Consolidated
Parties, taken as a whole, no declaration, payment or making or any
dividends or other distributions upon, nor any redemption, retirement,
purchase or other acquisition for value of, any of the Capital Stock of
any Consolidated Party, in each case except as reflected in the
foregoing financial statements or in the notes thereto or as otherwise
disclosed in writing to the Lenders on or prior to the Closing Date.
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(b) The financial statements delivered to the Lenders pursuant
to Section 7.1(a) and (b), (a) have been prepared in accordance with
GAAP (except as may otherwise be permitted under Section 7.1(a) and
(b)) and (b) present fairly (on the basis disclosed in the footnotes to
such financial statements) the consolidated and consolidating (as
applicable) financial condition, results of operations and cash flows
of the Consolidated Parties as of such date and for such periods. Since
December 31, 1996, there has been no sale, transfer or other
disposition by any Consolidated Party of any material part of the
business or property of the Consolidated Parties, taken as a whole, and
no purchase or other acquisition by any of them of any business or
property (including any Capital Stock of any other Person) material in
relation to the consolidated financial condition of the Consolidated
Parties, taken as a whole, in each case, which, is not (x) reflected in
the most recent financial statements delivered to the Lenders pursuant
to Section 7.1 or in the notes thereto or (y) otherwise permitted by
the terms of this Credit Agreement and communicated to the Agent.
(c) The pro forma consolidated balance sheet of the
Consolidated Parties as of the Closing Date has heretofore been
furnished to each Lender. Such pro forma balance sheet is based upon
reasonable assumptions made known to the Lenders and upon information
not know to be incorrect or misleading in any material respect.
6.2 No Material Change.
Since December 31, 1996, there has been no development or event
relating to or affecting a Consolidated Party which has had or would be
reasonably expected to have a Material Adverse Effect.
6.3 Organization and Good Standing.
Each Consolidated Party (a) is a corporation duly incorporated, validly
existing and in good standing under the laws of the State (or other
jurisdiction) of its incorporation, (b) is duly qualified and in good standing
as a foreign corporation and authorized to do business in every jurisdiction
unless the failure to be so qualified, in good standing or authorized would not
have a Material Adverse Effect and (c) has the requisite corporate power and
authority to own its properties and to carry on its business as now conducted
and as proposed to be conducted.
6.4 Due Authorization.
Each Credit Party (a) has the requisite corporate power and authority
to execute, deliver and perform this Credit Agreement and the other Credit
Documents to which it is a party and to incur the obligations herein and therein
provided for and (b) is duly authorized to, and has been authorized by all
necessary corporate action, to execute, deliver and perform this Credit
Agreement and the other Credit Documents to which it is a party.
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6.5 No Conflicts.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by such Credit Party will (a)
violate or conflict with any provision of its articles or certificate of
incorporation or bylaws or other organizational or governing documents of such
Person, (b) violate, contravene or materially conflict with any Requirement of
Law or any other law, regulation (including, without limitation, Regulation U or
Regulation X), order, writ, judgment, injunction, decree or permit applicable to
it, (c) violate, contravene or conflict with contractual provisions of, or cause
an event of default under, any indenture, loan agreement, mortgage, deed of
trust, contract or other agreement or instrument to which it is a party or by
which it may be bound, the violation of which would have or might be reasonably
expected to have a Material Adverse Effect, or (d) result in or require the
creation of any Lien (other than those contemplated in or created in connection
with the Credit Documents) upon or with respect to its properties.
6.6 Consents.
Except for consents, approvals and authorizations (a) which have been
obtained or (b) which are listed on Schedule 6.6, no consent, approval,
authorization or order of, or filing, registration or qualification with, any
court or Governmental Authority or third party in respect of any Credit Party is
required in connection with the execution, delivery or performance of this
Credit Agreement or any of the other Credit Documents by such Credit Party.
6.7 Enforceable Obligations.
This Credit Agreement and the other Credit Documents have been duly
executed and delivered and constitute legal, valid and binding obligations of
each Credit Party enforceable against such Credit Party in accordance with their
respective terms, except as may be limited by bankruptcy or insolvency laws or
similar laws affecting creditors' rights generally or by general equitable
principles.
6.8 No Default.
No Consolidated Party is in default in any respect under any contract,
lease, loan agreement, indenture, mortgage, security agreement or other
agreement or obligation to which it is a party or by which any of its properties
is bound which default would have or would be reasonably expected to have a
Material Adverse Effect. No Default or Event of Default has occurred or exists
except as previously disclosed in writing to the Lenders.
6.9 Ownership.
Each Consolidated Party is the owner of, and has good and marketable
title to, all of its respective assets and none of such assets is subject to any
Lien other than Permitted Liens.
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6.10 Indebtedness.
The Consolidated Parties have no Indebtedness except (a) as disclosed
in the financial statements referenced in Section 6.1, (b) as set forth on
Schedule 6.10 and (c) as otherwise permitted by this Credit Agreement.
6.11 Litigation.
Except as disclosed in Schedule 6.11, there are no actions, suits or
legal, equitable, arbitration or administrative proceedings, pending or, to the
knowledge of any Credit Party, threatened against any Consolidated Party which
will have or might be reasonably expected to have a Material Adverse Effect.
6.12 Taxes.
Each Consolidated Party has filed, or caused to be filed, all tax
returns (federal, state, local and foreign) required to be filed and paid (a)
all amounts of taxes shown thereon to be due (including interest and penalties)
and (b) all other taxes, fees, assessments and other governmental charges
(including mortgage recording taxes, documentary stamp taxes and intangibles
taxes) owing by it, except for such taxes (i) which are not yet delinquent or
(ii) that are being contested in good faith and by proper proceedings, and
against which adequate reserves are being maintained in accordance with GAAP. No
Credit Party is aware as of the Closing Date of any proposed tax assessments
against it or any other Consolidated Party.
6.13 Compliance with Law.
Each Consolidated Party is in compliance with all Requirements of Law
and all other laws, rules, regulations, orders and decrees (including without
limitation Environmental Laws) applicable to it, or to its properties, unless
such failure to comply would not have or would not be reasonably expected to
have a Material Adverse Effect. No Requirement of Law would be reasonably
expected to cause a Material Adverse Effect.
6.14 ERISA.
Except as would not result or be reasonably expected to result in a
Material Adverse Effect:
(a) During the five-year period prior to the date on which
this representation is made or deemed made: (i) no ERISA Event has
occurred, and, to the best knowledge of the Credit Parties, no event or
condition has occurred or exists as a result of which any ERISA Event
could reasonably be expected to occur, with respect to any Plan; (ii)
no "accumulated funding deficiency," as such term is defined in Section
302 of ERISA and Section 412 of the Code, whether or not waived, has
occurred with respect to any Plan; (iii) each Plan has been maintained,
operated, and funded in compliance with its own terms and in material
compliance with the provisions of ERISA, the Code, and any other
applicable federal or
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state laws; and (iv) no lien in favor of the PBGC or a Plan has arisen
or is reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities"
(as defined in Section 4001(a)(16) of ERISA), whether or not vested,
under each Single Employer Plan, as of the last annual valuation date
prior to the date on which this representation is made or deemed made
(determined, in each case, utilizing the actuarial assumptions used in
such Plan's most recent actuarial valuation report), did not exceed as
of such valuation date the fair market value of the assets of such
Plan, or by more than $250,000 in the aggregate as to all such Plans.
(c) Neither any Consolidated Party nor any ERISA Affiliate has
incurred, or, to the best knowledge of the Credit Parties, could be
reasonably expected to incur, any withdrawal liability under ERISA to
any Multiemployer Plan or Multiple Employer Plan. No Consolidated Party
would become subject to any withdrawal liability under ERISA if any
Consolidated Party or any ERISA Affiliate were to withdraw completely
from all Multiemployer Plans and Multiple Employer Plans as of the
valuation date most closely preceding the date on which this
representation is made or deemed made. Neither any Consolidated Party
nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the best knowledge of the
Credit Parties, reasonably expected to be in reorganization, insolvent,
or terminated.
(d) No prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject any Consolidated Party nor any ERISA Affiliate to any
liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any Person against any such
liability.
(e) Neither any Consolidated Party nor any ERISA Affiliate has
any material liability with respect to "expected post-retirement
benefit obligations" within the meaning of the Financial Accounting
Standards Board Statement 106.
6.15 Subsidiaries.
Set forth on Schedule 6.15 is a complete and accurate list of all
Subsidiaries of each Consolidated Party as of the Closing Date. Information on
Schedule 6.15 includes jurisdiction of incorporation, the number of shares of
each class of Capital Stock outstanding, the number and percentage of
outstanding shares of each class owned (directly or indirectly) by such
Consolidated Party; and the number and effect, if exercised, of all outstanding
options, warrants, rights of conversion or purchase and all other similar rights
with respect thereto. The outstanding Capital Stock of all such Subsidiaries is
validly issued, fully paid and non-assessable and is owned by each
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such Consolidated Party, directly or indirectly, free and clear of all Liens
(other than those arising under or contemplated in connection with the Credit
Documents). Other than as set forth in Schedule 6.15, as of the Closing Date no
Consolidated Party has outstanding any securities convertible into or
exchangeable for its Capital Stock nor does any such Person have outstanding any
rights to subscribe for or to purchase or any options for the purchase of, or
any agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to its Capital Stock.
6.16 Use of Proceeds; Margin Stock.
The proceeds of the Loans hereunder will be used solely for the
purposes specified in Section 7.10. None of the proceeds of the Loans will be
used for the purpose of purchasing or carrying any "margin stock" as defined in
Regulation G, Regulation U or Regulation X, or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
"margin stock" or any "margin security" or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of Regulation
G, T, U, or X. No Consolidated Party owns any "margin stock".
6.17 Government Regulation.
No Consolidated Party is subject to regulation under the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Investment Company Act
of 1940 or the Interstate Commerce Act, each as amended. In addition, No
Consolidated Party is an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, or a "holding
company," or a "Subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "Subsidiary" or a "holding company," within the
meaning of the Public Utility Holding Company Act of 1935, as amended. No
director, executive officer or principal shareholder of any Consolidated Party
is a director, executive officer or principal shareholder of any Lender. For the
purposes hereof the terms "director", "executive officer" and "principal
shareholder" (when used with reference to any Lender) have the respective
meanings assigned thereto in Regulation O issued by the Board of Governors of
the Federal Reserve System.
6.18 Environmental Matters.
Except as set forth on Schedule 6.18 or except as would not have or be
reasonably expected to have a Material Adverse Effect:
(i) Each of the Real Properties and all operations of
any Consolidated Party at the Real Properties are in
compliance with all applicable Environmental Laws, and there
is no violation of any applicable Environmental Law with
respect to the Real Properties or the businesses operated by
any Consolidated Party (the "Businesses"), and there are no
conditions relating to Businesses or Real Properties that
would be reasonably expected to give rise to liability under
any applicable Environmental Laws.
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(ii) None of the Real Properties contains, or, to the
knowledge of the Credit Parties, has previously contained, any
Hazardous Materials at, on or under the Real Properties in
amounts or concentrations that, if released, constitute or
constituted a violation of, or could give rise to liability
under, Environmental Laws.
(iii) No Consolidated Party has received any written
or oral notice of, or inquiry from any Governmental Authority
regarding, any violation, alleged violation, non-compliance,
liability or potential liability regarding Hazardous Materials
or compliance with Environmental Laws with regard to any of
the Real Properties or the Businesses, nor does any Credit
Party have knowledge or reason to believe that any such notice
is being threatened
(iv) Hazardous Materials have not been transported or
disposed of from the Real Properties, or generated, treated,
stored or disposed of at, on or under any of the Real
Properties or any other location, in each case by, or on
behalf or with the permission of, any Consolidated Party in a
manner that would reasonably be expected to give rise to
liability on the part of any Consolidated Party under any
applicable Environmental Law.
(v) No judicial proceeding or governmental or
administrative action is pending or, to the knowledge of any
Credit Party, threatened, under any applicable Environmental
Law to which any Consolidated Party is or will be named as a
party, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding
under any Environmental Law with respect to any Consolidated
Party, the Real Properties or the Businesses.
(vi) There has been no release or threat of release
of Hazardous Materials at or from the Real Properties, or
arising from or related to the operations (including, without
limitation, disposal) of any Consolidated Party in connection
with the Real Properties or otherwise in connection with the
Businesses.
(vii) No Consolidated Party has assumed any liability
of any Person under any applicable Environmental Law.
6.19 Intellectual Property.
Each Consolidated Party owns, or has the legal right to use, all
trademarks, tradenames, copyrights, technology, know-how and processes (the
"Intellectual property") necessary for each of them to conduct its business as
currently conducted except for those the failure to own or have such legal right
to use would not have or be reasonably expected to have a Material Adverse
Effect. Set forth on Schedule 6.19 is a list of all Intellectual property owned
by each Consolidated Party or that any Consolidated Party has the right to use
as of the Closing Date. Except as provided on Schedule 6.19, no claim has been
asserted and is pending by any Person challenging or questioning the use of any
such Intellectual property or the validity or effectiveness of any such
Intellectual property, nor
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does any Credit Party know of any such claim, and to the Credit Parties'
knowledge the use of such Intellectual property by any Consolidated Party does
not infringe on the rights of any Person, except for such claims and
infringements that in the aggregate, would not have or be reasonably expected to
have a Material Adverse Effect.
6.20 Solvency.
Each Credit Party is (after consummation of the Refinancing and the
other transactions contemplated by this Credit Agreement to occur on the Closing
Date and at all times thereafter), Solvent.
6.21 Investments.
All Investments of each Consolidated Party are Permitted Investments.
6.22 Location of Collateral.
Set forth on Schedule 6.22(a) is a list of all locations where, as of
the Closing Date, any tangible personal property of a Consolidated Party is
located, including county and state where located. Set forth on Schedule 6.22(b)
is a list of the chief executive office and principal place of business of each
Consolidated Party as of the Closing Date.
6.23 Disclosure.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of any Consolidated Party in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein or herein not misleading.
6.24 Licenses, etc.
The Consolidated Parties have obtained and hold in full force and
effect, all material franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other rights, consents and approvals which are necessary for the operation of
their respective businesses as presently conducted.
6.25 No Burdensome Restrictions.
No Consolidated Party is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction or any
provision of any applicable law, rule or regulation which, individually or in
the aggregate, would have or be reasonably expected to have a Material Adverse
Effect.
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6.26 Labor Matters.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of a Consolidated Party as of the Closing Date and none
of the Consolidated Parties has suffered any strikes, walkouts, work stoppages
or other material labor difficulty within the last five years.
6.27 Nature of Business.
As of the Closing Date, the Borrower is engaged principally in the
business of designing, manufacturing and packaging molded plastics and metal
products.
SECTION 7
AFFIRMATIVE COVENANTS
---------------------
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest, fees and other obligations hereunder, have been paid in full and
the Commitments and Letters of Credit hereunder shall have terminated:
7.1 Information Covenants.
The Credit Parties will furnish, or cause to be furnished, to the Agent
and each of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 90 days after the close of each fiscal year
(commencing with the fiscal year ending December 31, 1997) of the
Borrower, a consolidated and consolidating balance sheet and income
statement of the Consolidated Parties, as of the end of such fiscal
year, together with related consolidated and consolidating statements
of operations and retained earnings and of cash flows for such fiscal
year, setting forth in comparative form consolidated figures for the
preceding fiscal year, all such financial information described above
to be in reasonable form and detail and audited (with respect to
consolidated financial statements only) by Coopers & Xxxxxxx L.L.P. (or
other independent certified public accountants of recognized national
standing reasonably acceptable to the Agent), whose opinion shall be to
the effect that such financial statements have been prepared in
accordance with GAAP (except for changes with which such accountants
concur) and shall not be limited as to the scope of the audit or
qualified in any manner.
(b) Quarterly Financial Statements. As soon as available, and
in any event within 45 days after the close of each fiscal quarter
(commencing with the fiscal quarter ending in March, 1997) of the
Borrower (other than the fourth fiscal quarter) a consolidated and
consolidating balance sheet and income statement of the Consolidated
Parties as of the
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end of such fiscal quarter, together with related consolidated and
consolidating statements of operations and retained earnings and of
cash flows for such fiscal quarter in each case setting forth in
comparative form consolidated and consolidating figures for the
corresponding period of the preceding fiscal year, all such financial
information described above to be in reasonable form and detail and
reasonably acceptable to the Agent, and accompanied by a certificate of
an Executive Officer of the Borrower to the effect that such quarterly
financial statements fairly present in all material respects the
financial condition of the Consolidated Parties and have been prepared
in accordance with GAAP (except for the absence of footnotes), subject
to changes resulting from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 7.1(a) and 7.1(b) above,
a certificate of an Executive Officer of the Borrower substantially in
the form of Exhibit 7.1(c), (i) demonstrating compliance with the
financial covenants contained in Section 7.12 by calculation thereof as
of the end of each such fiscal period and (ii) stating that no Default
or Event of Default exists, or if any Default or Event of Default does
exist, specifying the nature and extent thereof and what action the
Borrower proposes to take with respect thereto.
(d) Borrowing Base Certificates. As soon as available and in
any event within 20 days (or 30 days in the case of the report for the
twelfth fiscal month) after the end of each fiscal month of the
Borrower, a report on the Borrowing Base, in each case as of the end of
the immediately preceding month, substantially in the form of Exhibit
7.1(d), certified by the chief financial officer of Borrower to be true
and correct as of such date.
(e) Annual Business Plan and Budgets. Within 60 days after the
end of each fiscal year of the Borrower, beginning with the fiscal year
ending December 31, 1997, an annual business plan and budget of the
Consolidated Parties on a consolidated basis containing, among other
things, pro forma financial statements for the next fiscal year.
(f) Compliance With Certain Provisions of the Credit
Agreement. Within 90 days after the end of each fiscal year of the
Borrower, the Borrower shall deliver a certificate, containing
information regarding the amount of all Asset Dispositions that were
made during the prior fiscal year.
(g) Accountant's Certificate. Within the period for delivery
of the annual financial statements provided in Section 7.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Credit Agreement and stating further whether,
in the course of their audit, they have become aware of any Default or
Event of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(h) Auditor's Reports. Promptly upon receipt thereof, a copy
of any "management letter" submitted by independent accountants to any
Consolidated Party in connection with any annual, interim or special
audit of the books of any Consolidated Party.
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(i) Reports. Promptly upon transmission or receipt thereof,
(a) copies of any filings and registrations with, and reports to or
from, the Securities and Exchange Commission, or any successor agency,
and copies of all financial statements, proxy statements, notices and
reports as any Consolidated Party shall send to its shareholders
generally or to a holder of any Indebtedness owed by any Consolidated
Party in its capacity as such a holder and (b) upon the written request
of the Agent, all reports and written information to and from the
United States Environmental Protection Agency, or any state or local
agency responsible for environmental matters, the United States
Occupational Health and Safety Administration, or any state or local
agency responsible for health and safety matters, or any successor
agencies or authorities concerning environmental, health or safety
matters.
(j) Notices. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, such Credit Party will give written notice
to the Agent promptly of (a) the occurrence of an event or condition
consisting of a Default or Event of Default, specifying the nature and
existence thereof and what action the Borrower proposes to take with
respect thereto, and (b) the occurrence of any of the following with
respect to any Consolidated Party (i) the pendency or commencement of
any litigation, arbitral or governmental proceeding against any
Consolidated Party which if adversely determined would have or would be
reasonably expected to have a Material Adverse Effect, (ii) the
institution of any proceedings against any Consolidated Party with
respect to, or the receipt of notice by such Person of potential
liability or responsibility for violation, or alleged violation of any
federal, state or local law, rule or regulation, including but not
limited to, Environmental Laws, which violation would have or would be
reasonably expected to have a Material Adverse Effect or (iii) any
notice or determination concerning the imposition of any withdrawal
liability by a Multiemployer Plan against such Person or any ERISA
Affiliate, the determination that a Multiemployer Plan is, or is
expected to be, in reorganization within the meaning of Title IV of
ERISA or the termination of any Plan. Upon its receipt of any notice
pursuant to this Section 7.1(i), the Agent will promptly notify each of
the Lenders.
(k) ERISA. Upon any Executive Officer of a Credit Party
obtaining knowledge thereof, the Borrower will give written notice to
the Agent promptly (and in any event within five Business Days) of: (i)
of any event or condition, including, but not limited to, any
Reportable Event, that constitutes, or might reasonably lead to, an
ERISA Event, (ii) with respect to any Multiemployer Plan, the receipt
of notice as prescribed in ERISA or otherwise of any withdrawal
liability assessed against any Consolidated Party or any ERISA
Affiliate, or of a determination that any Multiemployer Plan is in
reorganization or insolvent (both within the meaning of Title IV of
ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which any
Consolidated Party or any ERISA Affiliate is required to contribute to
each Plan pursuant to its terms and as required to meet the minimum
funding standard set forth in ERISA and the Code with respect thereto;
(iv) any event has occurred or failed to occur with respect to a Single
Employer Plan, Multiemployer Plan or Multiple Employer Plan sponsored,
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maintained or contributed to by an ERISA Affiliate of any Consolidated
Party which would have or would be reasonably expected to have a
Material Adverse Effect or (v) any change in the funding status of any
Plan that could have a Material Adverse Effect, together with a
description of any such event or condition or a copy of any such notice
and a statement by an Executive Officer of the Borrower briefly setting
forth the details regarding such event, condition, or notice, and the
action, if any, which has been or is being taken or is proposed to be
taken by the Consolidated Parties with respect thereto. Promptly upon
request, the Borrower shall furnish the Agent and the Lenders with such
additional information concerning any Plan as may be reasonably
requested, including, but not limited to, copies of each annual
report/return (Form 5500 series), as well as all schedules and
attachments thereto required to be filed with the Department of Labor
and/or the Internal Revenue Service pursuant to ERISA and the Code,
respectively, for each "plan year" (within the meaning of Section 3(39)
of ERISA).
(l) Other Information. With reasonable promptness upon any
such request, such other information regarding the business, properties
or financial condition of the Consolidated Parties as the Agent or the
Required Lenders may reasonably request.
7.2 Preservation of Existence and Franchises.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, do all things necessary to preserve and keep in full force and
effect its existence, rights, franchises and authority, except where the failure
to do so would not have a Material Adverse Effect or except as otherwise
permitted by Section 8.4 or Section 8.5.
7.3 Books and Records.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
7.4 Compliance with Law.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, comply with all material laws, rules, regulations and orders,
and all applicable material restrictions imposed by all Governmental
Authorities, applicable to it and its property (including, without limitation,
Environmental Laws).
7.5 Payment of Taxes and Other Indebtedness.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, pay, settle or discharge all taxes, assessments and
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its properties, before they shall become delinquent, all lawful
claims (including claims for labor, materials and supplies) which, if unpaid,
might give rise to a Lien upon any of its properties, and except as prohibited
hereunder, all of its other Indebtedness as
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it shall become due; provided, however, that a Consolidated Party shall not be
required to pay any such tax, assessment, charge, levy, claim or Indebtedness
which is being contested in good faith by appropriate proceedings and as to
which adequate reserves therefor have been established in accordance with GAAP,
unless the failure to make any such payment (i) would give rise to an immediate
right to foreclose on a Lien securing such amounts or (ii) would have a Material
Adverse Effect.
7.6 Insurance.
Each of the Credit Parties will, and will cause each of its
Subsidiaries to, at all times maintain in full force and effect insurance
(including worker's compensation insurance, liability insurance, casualty
insurance and business interruption insurance) in such amounts, covering such
risks and liabilities and with such deductibles or self-insurance retentions as
are in accordance with normal industry practice. All liability policies shall
have the Agent, on behalf of the Lenders, as an additional insured and all
casualty policies shall have the Agent, on behalf of the Lenders, as loss payee.
The present insurance coverage of the Consolidated Parties is outlined as to
carrier, policy number, expiration date, type and amount on Schedule 7.6.
7.7 Maintenance of property.
Each of the Credit Parties will maintain and preserve its properties
and equipment in good repair, working order and condition, normal wear and tear
excepted.
7.8 Performance of Obligations.
Each of the Consolidated Parties will, and will cause each of its
Subsidiaries to, perform in all respects all of its obligations under the terms
of all agreements, indentures, mortgages, security agreements or other debt
instruments to which it is a party or by which it is bound unless the failure to
do so will not have or be reasonably expected to have a material adverse effect
on the ability of a Credit Party to perform its obligations under this Credit
Agreement or the other Credit Documents.
7.9 Collateral.
(a) Each Credit Party will, and will cause each of its
Subsidiaries to, cause all of its personal property located in the
United States of the nature and type described in Section 2 of the
Security Agreement to be subject at all times to first priority,
perfected Liens in favor of the Agent pursuant to the terms and
conditions of the Collateral Documents or, with respect to any such
property acquired subsequent to the Closing Date, such other additional
security documents as the Agent shall reasonably request.
(b) Within 60 days after receipt by the Agent and the Lenders
of a Borrowing Base Certificate delivered pursuant to Section 7.1(d)
indicating that inventory of the Borrower located in Mexico constitutes
for more than 7.5% of the Borrowing Base as set forth in such Borrowing
Base Certificate, the Credit Parties will (i) cause all of the
inventory of the Borrower located at such facility to be subject at all
times to a first
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priority, perfected Lien in favor of the Agent to secure the Credit
Party Obligations pursuant to the terms and conditions of the Security
Agreement or such other additional security documents as the Agent
shall reasonably request and (ii) deliver such other documentation as
the Agent may reasonably request in connection with the foregoing,
including, without limitation, waivers and/or consents of third Persons
(including without the Mexican Subsidiary) necessary or desirable to
establish and protect a first priority, perfected Lien in favor of the
Agent (to secure the Credit Party Obligations) in such inventory,
certified resolutions of the Borrower and other authorizing documents
of the Borrower, favorable opinions of special Mexican counsel with
respect to the perfection of the Agent's Liens in such inventory, all
in form, content and scope reasonably satisfactory to the Agent.
(c) If, subsequent to the Closing Date, the Borrower shall
acquire ownership of any trademarks used in connection with any of its
inventory, the Borrower shall promptly notify the Agent of thereof and
shall cause to be taken, at its own expense, such action as requested
by the Agent to ensure that the Agent has a first priority perfected
Lien therein to secure the Credit Party Obligations.
(d) Within 7 days after the Closing Date, the Credit Parties
will cause to be delivered to the Agent a bailment agreement
satisfactory in form and substance to the Agent executed by the
Borrower, The First National Bank of Boston and/or its affiliates, as
appropriate, and the Agent with respect to lockbox accounts maintained
by the Borrower with The First National Bank of Boston and/or its
affiliates, as appropriate.
7.10 Use of Proceeds.
The Credit Parties will use proceeds of the Loans solely (a) to
refinance existing indebtedness of the Borrower existing as the Closing Date and
to finance up to $1.9 million of a distribution of approximately $30 million on
the Closing Date to shareholders of the Parent, including Xxxxxx X. Xxx Company
and affiliates thereof (such refinancing and distribution being collectively
referred to as the "Refinancing"), (b) to pay fees and expenses incurred in
connection with this Credit Agreement, (c) to provide for the working capital
needs of the Borrower and its Subsidiaries, (d) to finance Permitted Investments
by the Borrower and its Subsidiaries, (e) to enable the Borrower to make
Restricted Payments to the Parent permitted under Section 8.7(vi) and (f) for
general corporate purposes of the Borrower and its Subsidiaries. The Borrower
will use the Letters of Credit solely for the purposes set forth in Section
2.2(a).
7.11 Audits/Inspections.
(a) Upon reasonable notice and during normal business hours,
each Consolidated Party will, and will cause each of its Subsidiaries
to, permit representatives appointed by the Agent, including, without
limitation, independent accountants, agents, attorneys and appraisers
to visit and inspect such Person's property, including its books and
records, its accounts receivable and inventory, its facilities and its
other business assets, and to make photocopies or photographs thereof
and to write down and record any information
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such representative obtains and shall permit the Agent or its
representatives to investigate and verify the accuracy of information
provided to the Lenders and to discuss all such matters with the
officers, employees and representatives of the Consolidated Parties.
The Credit Parties agree that the Agent, and its representatives, may
conduct an annual audit of the Collateral, at the expense of the
Borrower.
(b) Without limiting the generality of Section 7.11(a), the
Credit Parties agree that the Agent's examination staff shall be
permitted to conduct, at the expense of the Credit Parties, an annual
field examination of the components of the Borrowing Base of such scope
as shall in each instance be reasonably satisfactory the Agent.
7.12 Financial Covenants.
The Credit Parties hereby agree that:
(a) Interest Coverage Ratio. The Interest Coverage Ratio, as
of the last day of each fiscal quarter of the Consolidated Parties,
shall be greater than or equal to:
(i) for the period from the Closing Date to and
including the next to last day of the fiscal quarter of the
Borrower ending in March, 1998, 1.50 to 1.00;
(ii) for the period from the last day of the fiscal
quarter of the Borrower ending in March, 1998 to and including
the next to last day of the fiscal quarter of the Borrower
ending in March, 1999, 1.60 to 1.00;
(iii) for the period from the last day of the fiscal
quarter of the Borrower ending in March, 1999 to and including
the next to last day of the fiscal quarter of the Borrower
ending in March, 2000, 1.70 to 1.00;
(iv) for the period from the last day of the fiscal
quarter of the Borrower ending in March, 2000 to and including
the next to last day of the fiscal quarter of the Borrower
ending in March, 2001, 1.85 to 1.00; and
(v) for the period from the last day of the fiscal
quarter of the Borrower ending in March, 2001 and at all times
thereafter, 2.00 to 1.00.
(b) Leverage Ratio. The Leverage Ratio, as of the last day of
each fiscal quarter of the Consolidated Parties, shall be less than or
equal to:
(i) for the period from the Closing Date to and
including the next to last day of the fiscal quarter of the
Borrower ending in March, 1998, 5.75 to 1.00;
(ii) for the period from the last day of the fiscal
quarter of the Borrower ending in March, 1998 to and including
the next to last day of the fiscal quarter of the Borrower
ending in March, 1999, 5.25 to 1.00;
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(iii) for the period from the last day of the fiscal
quarter of the Borrower ending in March, 1999 to and including
the next to last day of the fiscal quarter of the Borrower
ending in March, 2000, 5.00 to 1.00;
(iv) for the period from the last day of the fiscal
quarter of the Borrower ending in March, 2000 to and including
the next to last day of the fiscal quarter of the Borrower
ending in March, 2001, 4.50 to 1.00; and
(v) for the period from the last day of the fiscal
quarter of the Borrower ending in March, 2001 and at all times
thereafter, 4.00 to 1.00.
(c) Minimum Net Worth. At all times Consolidated Net Worth
shall be greater than or equal to the sum of ($7,000,000), increased on
a cumulative basis as of the end of each fiscal quarter of the
Borrower, commencing with the fiscal quarter of the Borrower ending in
September, 1997 by an amount equal to 50% of Consolidated Net Income
(to the extent positive) for the fiscal quarter then ended
7.13 Additional Credit Parties.
As soon as practicable and in any event within 30 days after any Person becomes
a direct or indirect Subsidiary of the Parent, the Borrower shall provide the
Agent with written notice thereof setting forth information in reasonable detail
describing all of the assets of such Person and shall (a) if such Person is a
Domestic Subsidiary of the Parent, cause such Person to execute a Joinder
Agreement in substantially the same form as Exhibit 7.13, and deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, environmental reports, landlord's waivers, certified resolutions and
other organizational and authorizing documents of such Person, favorable
opinions of counsel to such Person (which shall cover, among other things, the
legality, validity, binding effect and enforceability of the documentation
referred to above and the perfection of the Agent's liens thereunder) and other
items of the types required to be delivered pursuant to Section 5.1(c), all in
form, content and scope reasonably satisfactory to the Agent.
SECTION 8
NEGATIVE COVENANTS
Each Credit Party hereby covenants and agrees that so long as this
Credit Agreement is in effect and until the Loans and LOC Obligations, together
with interest and fees hereunder, have been paid in full and the Commitments and
Letters of Credit hereunder shall have terminated:
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8.1 Indebtedness.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) Indebtedness set forth in Schedule 6.10 (and renewals,
refinancings and extensions thereof on terms and conditions no less
favorable to such Person than such existing Indebtedness);
(c) purchase money Indebtedness (including any Capital Lease,
but excluding any Operating Lease which is not a TROL) or TROLS
hereafter incurred by the Borrower to finance the purchase of fixed
assets provided that (i) the total of all such Indebtedness shall not
exceed an aggregate principal amount of $1,000,000 at any one time
outstanding (including any such Indebtedness referred to in subsection
(b) above); (ii) such Indebtedness when incurred shall not exceed the
purchase price of the asset(s) financed; and (iii) no such Indebtedness
shall be refinanced for a principal amount in excess of the principal
balance outstanding thereon at the time of such refinancing;
(d) Hedging Obligations of the Borrower;
(e) intercompany Indebtedness arising out of loans and
advances permitted under Section 8.6;
(f) Indebtedness arising under the Senior Note Indenture, the
Senior Note Purchase Agreements and the Senior Notes (including without
limitation Guaranty Obligations of any Guarantor arising thereunder or
in respect thereof); and
(g) other Indebtedness of the Borrower not otherwise permitted
under this Section 8.1 provided that the aggregate principal amount of
all such Indebtedness does not exceed $2,000,000 at any time
outstanding;
8.2 Liens.
The Credit Parties will not permit any Consolidated Party to contract,
create, incur, assume or permit to exist any Lien with respect to any
Collateral, whether now owned or after acquired, except for Permitted Liens.
8.3 Nature of Business.
The Credit Parties will not permit any Consolidated Party to alter the
character of its business from that conducted as of the Closing Date or engage
in any business other than the business conducted as of the Closing Date.
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8.4 Consolidation and Merger.
Except in connection with an Asset Disposition permitted by the terms
of Section 8.5, the Credit Parties will not permit any Consolidated Party to
enter into any transaction of merger or consolidation or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution); provided that,
notwithstanding the foregoing provisions of this Section 8.4, (a) the Borrower
may merge or consolidate with any of its Subsidiaries provided that (i) the
Borrower shall be the continuing or surviving corporation, (ii) the Credit
Parties shall cause to be executed and delivered such documents, instruments and
certificates as the Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 7.9 after giving effect to such transaction
and (iii) after giving effect to such transaction, no Default or Event of
Default would exist, (b) any Credit Party other than the Parent or the Borrower
may merge or consolidate with any other Credit Party other than the Parent or
the Borrower provided that (i) the Credit Parties shall cause to be executed and
delivered such documents, instruments and certificates as the Agent may request
so as to cause the Credit Parties to be in compliance with the terms of Section
7.9 after giving effect to such transaction and (ii) after giving effect to such
transaction, no Default or Event of Default would exist, (c) any Consolidated
Party which is not a Credit Party may be merged or consolidated with or into any
Credit Party other than the Parent provided that (i) such Credit Party shall be
the continuing or surviving corporation, (ii) the Credit Parties shall cause to
be executed and delivered such documents, instruments and certificates as the
Agent may request so as to cause the Credit Parties to be in compliance with the
terms of Section 7.9 after giving effect to such transaction and (iii) after
giving effect to such transaction, no Default or Event of Default would exist,
(d) any Consolidated Party which is not a Credit Party may be merged or
consolidated with or into any other Consolidated Party which is not a Credit
Party provided after giving effect to such transaction, no Default or Event of
Default would exist, (e) the Borrower and the Parent may merge or consolidate
with one another in connection with an Initial Public Offering if (i) the Credit
Parties shall cause to be executed and delivered such documents, instruments and
certificates as the Agent may request so as to cause the Credit Parties to be in
compliance with the terms of Section 7.9 after giving effect to such transaction
and (ii) after giving effect to such transaction, no Default or Event of Default
would exist and (f) any wholly-owned Subsidiary of the Borrower may dissolve,
liquidate or wind up its affairs at any time.
8.5 Asset Dispositions.
The Credit Parties will not permit any Consolidated Party to make any
Asset Disposition (including, without limitation, any Sale and Leaseback
Transaction) other than Excluded Asset Dispositions, unless (i) the
consideration paid in connection therewith is cash or Cash Equivalents, (ii) if
such transaction is a Sale and Leaseback Transaction, such transaction is
permitted by the terms of Section 8.13, (iii) except for the issuance of Capital
Stock by the Parent (or in the case of a merger or consolidation between the
Parent and the Borrower in connection therewith, by the continuing or surviving
corporation of such merger or consolidation) in connection with an Initial
Public Offering permitted by the definition of "Change of Control" set forth in
Section 1.1, such transaction does not involve the sale or other disposition of
a minority equity interest in any Consolidated Party other than the Parent and
(iv) no later than 14 days prior to such Asset
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Disposition, the Agent and the Lenders shall have received a certificate of an
Executive Officer of the Borrower specifying the anticipated or actual date of
such Asset Disposition, briefly describing the assets to be sold or otherwise
disposed of and setting forth the net book value of such assets, the aggregate
consideration and the Net Cash Proceeds to be received for such assets in
connection with such Asset Disposition, and thereafter the Borrower shall,
within the period of 270 days (or such longer period of time as the Required
Lenders shall otherwise agree in writing with respect to the proceeds of a
particular Asset Disposition) following the consummation of such Asset
Disposition (with respect to any such Asset Disposition, the "Application
Period"), apply (or cause to be applied) an amount equal to the Net Cash
Proceeds of such Asset Disposition to (A) the purchase, acquisition or, in the
case of improvements to real property, construction of Eligible Assets or (B) to
the prepayment of the Loans in accordance with the terms of Section 3.3(b)(iii).
Upon a sale of assets or the sale of Capital Stock of a Consolidated
Party permitted by this Section 8.5, the Agent shall (to the extent applicable
and provided that such Consolidated Party (and all of the assets of such
Consolidated Party) is concurrently released from all of its obligations in
respect of the Senior Note Indenture, the Senior Note Purchase Agreements and
the Senior Notes) deliver to the Borrower, upon the Borrower's request and at
the Borrower's expense, such documentation as is reasonably necessary to
evidence the release of the Agent's security interest, if any, in such assets or
Capital Stock, including, without limitation, amendments or terminations of UCC
financing statements, if any, the return of stock certificates, if any, and the
release of such Subsidiary from all of its obligations, if any, under the Credit
Documents.
8.6 Investments.
The Credit Parties will not permit any Consolidated Party to make any
Investments except for Permitted Investments.
8.7 Restricted Payments.
The Credit Parties will not permit any Consolidated Party to directly
or indirectly, declare, order, make or set apart any sum for or pay any
Restricted Payment, except (i) in connection with the Refinancing (a) a dividend
payment of up to $25,000,000 by the Borrower to the Parent and (b) dividend
payments of up to $30,000,000 by the Parent to its shareholders, (ii) to make
dividends payable solely in the same class of Capital Stock of such Person,
(iii) to make dividends or other distributions payable to any Credit Party, (iv)
to redeem Senior Notes in accordance with the terms of Section 3.07(b) of the
Senior Note Indenture in connection with an Initial Public Offering, (v) to
redeem Capital Stock of the Parent held by directors and employees pursuant to
employment arrangements provided that all such Restricted Payments pursuant to
this clause (v) shall not in aggregate amount exceed $1,500,000 in any fiscal
year, (vi) dividends or other distributions by the Borrower to the Parent which
are used by the Parent to make Investments of the type described in clause
(f)(i) of the definition of "Permitted Investments" set forth in Section 1.1 and
(vii) as permitted by Section 8.8 or Section 8.11.
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8.8 Transactions with Affiliates.
The Credit Parties will not permit any Consolidated Party to enter into
or permit to exist any transaction or series of transactions with any officer,
director, shareholder, Subsidiary or Affiliate of such Person other than (i)
Exempt Affiliate Transactions, (ii) advances of working capital to any Credit
Party, (iii) transfers of cash and assets to any Credit Party, (iv) transactions
permitted by Section 8.1(b), Section 8.4, Section 8.5, Section 8.6 or Section
8.7, (v) normal compensation and reimbursement of expenses of officers and
directors and (vi) except as otherwise specifically limited in this Credit
Agreement, other transactions which are entered into in the ordinary course of
such Person's business on terms and conditions substantially as favorable to
such Person as would be obtainable by it in a comparable arms-length transaction
with a Person other than an officer, director, shareholder, Subsidiary or
Affiliate.
8.9 Restrictions on the Parent; Ownership of Subsidiaries.
(a) The Parent shall (i) not hold any assets other than the
Capital Stock of the Borrower and its other direct Subsidiaries, (ii)
not have any liabilities other than (A) the liabilities under the
Credit Documents, (B) tax liabilities in the ordinary course of
business, (C) loans and advances permitted under Section 8.7 and (D)
corporate, administrative and operating expenses in the ordinary course
of business and (iii) not engage in any business other than (A) owning
the Capital Stock of the Borrower and its other direct Subsidiaries and
activities incidental or related thereto, (B) acting as a Guarantor
hereunder and pledging certain of its assets to the Agent, for the
benefit of the Lenders, in connection herewith and (C) acting as a
guarantor in respect of the Indebtedness arising under the Senior Note
Indenture, the Senior Note Purchase Agreements and the Senior Notes and
pledging certain of its assets to the Senior Noteholders in connection
therewith.
(b) The Borrower (i) will not permit any Person (other than
the Borrower or any wholly-owned Subsidiary of the Borrower) to own any
Capital Stock of any Subsidiary of the Borrower, (ii) will not permit
any Subsidiary of the Borrower to issue Capital Stock (except to the
Borrower or to a wholly-owned Subsidiary of the Borrower), (iii) will
not permit create, incur, assume or suffer to exist any Lien thereon,
in each case except (a) directors' qualifying shares, (b) if such
Subsidiary merges with another Subsidiary of the Borrower, (c) if such
Subsidiary ceases to be a Subsidiary of the Borrower (as a result of
the sale of 100% of the Capital Stock of such Subsidiary) or (d)
Permitted Liens and (iv) notwithstanding anything to the contrary
contained in clause (ii) above, will not permit any Subsidiary of the
Borrower to issue any shares of preferred Capital Stock.
8.10 Fiscal Year; Organizational Documents.
The Credit Parties will not permit any Consolidated Party to change its
fiscal year or materially change its articles or certificate of incorporation
without the prior written consent of the Required Lenders.
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8.11 Prepayment or Modification of Indebtedness.
If any Default or Event of Default has occurred and is continuing or
would be directly or indirectly caused as a result thereof, the Credit Parties
will not permit any Consolidated Party to (a) after the issuance thereof, amend
or modify (or permit the amendment or modification of) any of the terms of any
Indebtedness if such amendment or modification would add or change any terms in
a manner adverse to the Lenders, including, but not limited to, shortening the
final maturity or average life to maturity or requiring any payment to be made
sooner than originally scheduled or increasing the interest rate applicable
thereto or changing any subordination provision thereof, or (b) make (or give
any notice with respect thereto) any voluntary or optional payment or any
prepayment or any redemption or any acquisition for value or any defeasance of
(including without limitation, by way of depositing money or securities with the
trustee with respect thereto before due for the purpose of paying when due),
refund, refinance or exchange of any other Indebtedness.
8.12 Limitations.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Person to (a) pay
dividends or make any other distributions to any Credit Party on its Capital
Stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any Indebtedness or other obligation owed to any Credit
Party, (c) make loans or advances to any Credit Party, (d) sell, lease or
transfer any of its properties or assets to any Credit Party, or (e) act as a
Guarantor and pledge its assets pursuant to the Credit Documents or any
renewals, refinancings, exchanges, refundings or extension thereof, except (in
respect of any of the matters referred to in clauses (a)-(d) above) for such
encumbrances or restrictions existing under or by reason of (i) this Credit
Agreement and the other Credit Documents, (ii) the Senior Note Indenture, the
Senior Note Purchase Agreements and the Senior Notes, in each case as in effect
as of the Closing Date, (iii) applicable law or (iv) any document or instrument
governing Indebtedness incurred pursuant to Section 8.1(c), provided that any
such restriction contained therein relates only to the asset or assets
constructed or acquired in connection therewith.
8.13 Sale Leasebacks.
The Credit Parties will not permit any Consolidated Party to, directly
or indirectly, become or remain liable as lessee or as guarantor or other surety
with respect to any lease, whether an Operating Lease or a Capital Lease, of any
property (whether real or personal or mixed), whether now owned or hereafter
acquired, (a) which such Consolidated Party has sold or transferred or is to
sell or transfer to a Person which is not a Consolidated Party or (b) which such
Consolidated Party intends to use for substantially the same purpose as any
other property which has been sold or is to be sold or transferred by such
Consolidated Party to another Person which is not a Consolidated Party in
connection with such lease.
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8.14 Capital Expenditures.
The Credit Party will not permit Capital Expenditures for any fiscal
year of the Borrower to exceed $10,000,000, plus (for any fiscal year other than
fiscal year 1997) the unused portion of permitted Capital Expenditures for the
immediately preceding fiscal year (without giving effect to any carry forward
from a prior fiscal year).
8.15 No Further Negative Pledges.
Except (a) pursuant to this Credit Agreement and the other Credit
Documents, (b) pursuant to the Senior Note Indenture, the Senior Note Purchase
Agreements and the Senior Notes, in each case as in effect as of the Closing
Date, in each case as in effect as of the Closing Date and (c) pursuant to any
document or instrument governing Indebtedness incurred pursuant to Section
8.1(c), provided that any such restriction contained therein relates only to the
asset or assets constructed or acquired in connection therewith, the Credit
Parties will not permit any Consolidated Party to enter into, assume or become
subject to any agreement prohibiting or otherwise restricting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired, or requiring the grant of any security for such obligation
if security is given for some other obligation.
8.16 Operating Lease Obligations.
The Credit Parties will not permit any Consolidated Party to enter
into, assume or permit to exist any obligations for the payment of rental under
Operating Leases which in the aggregate for all such Persons would exceed
$1,500,000 in any fiscal year.
8.17 Foreign Subsidiaries.
(a) None of the Credit Party will create, acquire or permit to
exist any direct or indirect Foreign Subsidiary other than the Mexican
Subsidiary and Anchor Advanced Products Foreign Sales Corp., a direct
Subsidiary of the Borrower organized and existing under the laws of
Barbados.
(b) The Borrower will not maintain any of its inventory in
Mexico at any location other than Xxxxxxxxx, Mexico unless the Borrower
shall have caused to be executed and delivered such documents,
instruments and certificates, if any, as are required (in the
reasonable determination of the Agent) to ensure that the Credit
Parties are at all times in compliance with the terms of Section
7.9(b).
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SECTION 9
EVENTS OF DEFAULT
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9.1 Events of Default.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. Any Credit Party shall:
(i) default in the payment when due of any principal
of any of the Loans or of any reimbursement obligation arising
from drawings under Letters of Credit; or
(ii) default, and such default shall continue for
three or more Business Days, in the payment when due of any
interest on the Loans, or on any reimbursement obligations
arising from drawings under Letters of Credit or of any fees
or other amounts owing hereunder, under any of the other
Credit Documents or in connection herewith.
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was made or deemed
to have been made.
(c) Covenants. Any Credit Party shall:
(i) default in the due performance or observance of
any term, covenant or agreement contained in Sections 7.2,
7.4, 7.5, 7.6, 7.9, 7.10, 7.12, 7.13 or 8.1 through 8.17,
inclusive; or
(ii) default in the due performance or observance by
it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) of this Section
9.1) contained in this Credit Agreement and such default shall
continue unremedied for a period of at least 30 days after the
earlier of an Executive Officer of a Credit Party becoming
aware of such default or notice thereof given by the Agent.
(d) Other Credit Documents. (i) Any Consolidated Party shall
default in the due performance or observance of any term, covenant or
agreement in any of the other Credit Documents and such default shall
continue unremedied for a period of at least 30 days after the earlier
of an Executive Officer of a Credit Party becoming aware of such
default or notice thereof given by the Agent, (ii) except pursuant to
the terms thereof, any Credit Document shall fail to be in full force
and effect or any Credit Party shall so assert or (iii) except pursuant
to the terms thereof, any Credit
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Document shall fail to give the Agent and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be created
thereby.
(e) Guaranties. The guaranty hereunder given by any Guarantor
or any provision thereof shall, except pursuant to the terms thereof,
cease to be in full force and effect, or any guarantor thereunder or
any Person acting by or on behalf of such Guarantor shall deny or
disaffirm such Guarantor's obligations under such guaranty.
(f) Bankruptcy Events. Any Bankruptcy Event shall occur with
respect to any Consolidated Party.
(g) Defaults under Other Agreements. With respect to any
Indebtedness (other than Indebtedness outstanding under this Credit
Agreement) of one or more of the Consolidated Parties in an aggregate
principal amount in excess of $250,000 (i) a Consolidated Party shall
(A) default in any payment (beyond the applicable grace period with
respect thereto, if any) with respect to any such Indebtedness, or (B)
default (after giving effect to any applicable grace period) in the
observance or performance relating to such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto,
or any other event or condition shall occur or condition exist, the
effect of which default or other event or condition is to cause, or
permit, the holder or holders of such Indebtedness (or trustee or agent
on behalf of such holders) to cause (determined without regard to
whether any notice or lapse of time is required) any such Indebtedness
to become due prior to its stated maturity; or (ii) any such
Indebtedness shall be declared due and payable prior to the stated
maturity thereof.
(h) Judgments. One or more judgments, orders, or decrees shall
be entered against any one or more of the Consolidated Parties
involving a liability of $250,000 or more, in the aggregate, (to the
extent not paid or covered by insurance provided by a carrier who has
acknowledged coverage) and such judgments, orders or decrees (i) are
the subject of any enforcement proceeding commenced by any creditor or
(ii) shall continue unsatisfied, undischarged and unstayed for 30 days
following the last day on which such judgment, order or decree becomes
final and unappealable.
(i) ERISA. Any of the following events or conditions, if such
event or condition would cause or be reasonably expected to cause a
Material Adverse Effect: (1) any "accumulated funding deficiency," as
such term is defined in Section 302 of ERISA and Section 412 of the
Code, whether or not waived, shall exist with respect to any Plan, or
any lien shall arise on the assets of any Consolidated Party or any
ERISA Affiliate in favor of the PBGC or a Plan; (2) an ERISA Event
shall occur with respect to a Single Employer Plan, which is, in the
reasonable opinion of the Agent, likely to result in the termination of
such Plan for purposes of Title IV of ERISA; (3) an ERISA Event shall
occur with respect to a Multiemployer Plan or Multiple Employer Plan,
which is, in the reasonable opinion of the Agent, likely to result in
(i) the termination of such Plan for purposes of Title IV of
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ERISA, or (ii) any Consolidated Party or any ERISA Affiliate incurring
any liability in connection with a withdrawal from, reorganization of
(within the meaning of Section 4241 of ERISA), or insolvency or (within
the meaning of Section 4245 of ERISA) such Plan; (4) any event
occurring or failing to occur with respect to a Single Employer Plan,
Multiemployer or Multiple Employer Plan sponsored, maintained or
contributed to by an ERISA Affiliate of any Consolidated Party; or (5)
any prohibited transaction (within the meaning of Section 406 of ERISA
or Section 4975 of the Code) or breach of fiduciary responsibility
shall occur which may any Consolidated Party or any ERISA Affiliate to
any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or
Section 4975 of the Code, or under any agreement or other instrument
pursuant to which any Consolidated Party or any ERISA Affiliate has
agreed or is required to indemnify any Person against any such
liability.
(j) Senior Note Indenture. There shall occur and be continuing
any Event of Default under and as defined in the Senior Note Indenture.
(k) Ownership. There shall occur a Change of Control.
9.2 Acceleration; Remedies.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived in writing by the
Required Lenders (or the Lenders as may be required hereunder), the Agent shall,
upon the request and direction of the Required Lenders, by written notice to the
Borrower, take any of the following actions without prejudice to the rights of
the Agent or any Lender to enforce its claims against the Credit Parties, except
as otherwise specifically provided for herein:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration of Loans. Declare the unpaid principal of and
any accrued interest in respect of all Loans, any reimbursement
obligations arising from drawings under Letters of Credit and any and
all other indebtedness or obligations of any and every kind owing by a
Credit Party to any of the Lenders hereunder to be due whereupon the
same shall be immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by
the Credit Parties.
(c) Cash Collateral. Direct the Borrower to pay (and the
Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default under Section 9.1(f), it will
immediately pay) to the Agent additional cash, to be held by the Agent,
for the benefit of the Lenders, in a cash collateral account as
additional security for the LOC Obligations in respect of subsequent
drawings under all then outstanding Letters of Credit in an amount
equal to the maximum aggregate amount which may be drawn under all
Letters of Credits then outstanding.
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(d) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents, including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against a Guarantor and
all rights of set-off.
Notwithstanding the foregoing, if an Event of Default specified in Section
9.1(f) shall occur, then the Commitments shall automatically terminate and all
Loans, all reimbursement obligations under Letters of Credit, all accrued
interest in respect thereof, all accrued and unpaid fees and other indebtedness
or obligations owing to the Lenders hereunder shall immediately become due and
payable without the giving of any notice or other action by the Agent or the
Lenders, which notice or other action is expressly waived by the Credit Parties.
Notwithstanding the fact that enforcement powers reside primarily with the
Agent, each Lender has, to the extent permitted by law, a separate right of
payment and shall be considered a separate "creditor" holding a separate "claim"
within the meaning of Section 101(5) of the Bankruptcy Code or any other
insolvency statute.
SECTION 10
AGENCY PROVISIONS
-----------------
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as Agent
of such Lender to act as specified herein and the other Credit Documents, and
each such Lender hereby authorizes the Agent, as the agent for such Lender, to
take such action on its behalf under the provisions of this Credit Agreement and
the other Credit Documents and to exercise such powers and perform such duties
as are expressly delegated by the terms hereof and of the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein and in the other
Credit Documents, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein and therein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Credit Agreement or any of the other Credit Documents, or shall otherwise exist
against the Agent. The provisions of this Section are solely for the benefit of
the Agent and the Lenders and no Consolidated Party shall have any rights as a
third party beneficiary of the provisions hereof. In performing its functions
and duties under this Credit Agreement and the other Credit Documents, the Agent
shall act solely as an agent of the Lenders and does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for any Consolidated Party.
10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all
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matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
10.3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be liable for any action lawfully
taken or omitted to be taken by it or such Person under or in connection
herewith or in connection with any of the other Credit Documents (except for its
or such Person's own gross negligence or willful misconduct) or responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by any of the Credit Parties contained herein or in any of
the other Credit Documents or in any certificate, report, document, financial
statement or other written or oral statement referred to or provided for in, or
received by the Agent under or in connection herewith or in connection with the
other Credit Documents, or enforceability or sufficiency therefor of any of the
other Credit Documents, or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Agent shall not be responsible to any
Lender for the effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Credit Agreement, or any of the other
Credit Documents or for any representations, warranties, recitals or statements
made herein or therein or made by any Credit Party in any written or oral
statement or in any financial or other statements, instruments, reports,
certificates or any other documents in connection herewith or therewith
furnished or made by the Agent to the Lenders or by or on behalf of the Credit
Parties to the Agent or any Lender or be required to ascertain or inquire as to
the performance or observance of any of the terms, conditions, provisions,
covenants or agreements contained herein or therein or as to the use of the
proceeds of the Loans or the use of the Letters of Credit or of the existence or
possible existence of any Default or Event of Default or to inspect the
properties, books or records of the Consolidated Parties. The Agent is not
trustee for the Lenders and owes no fiduciary duty to the Lenders.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to any of the Credit Parties, independent accountants and
other experts selected by the Agent with reasonable care). The Agent may deem
and treat the Lenders as the owner of its interests hereunder for all purposes
unless a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent in accordance with Section 11.3(b). The Agent
shall be fully justified in failing or refusing to take any action under this
Credit Agreement or under any of the other Credit Documents unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder or under any
of the other Credit Documents in accordance with a request of the Required
Lenders (or to the extent specifically provided in Section 11.6, all the
Lenders) and such request
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and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders (including their successors and assigns).
10.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received notice from a Lender or a Credit Party referring to the Credit
Document, describing such Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall take such action with respect to such Default or Event of Default as shall
be reasonably directed by the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or affiliates has
made any representations or warranties to it and that no act by the Agent or any
affiliate thereof hereinafter taken, including any review of the affairs of any
Consolidated Party, shall be deemed to constitute any representation or warranty
by the Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Credit
Parties and made its own decision to make its Loans hereunder and enter into
this Credit Agreement. Each Lender also represents that it will, independently
and without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Credit Agreement, and to make such investigation as it deems
necessary to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the Credit
Parties. Except for notices, reports and other documents expressly required to
be furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, assets, property, financial or
other conditions, prospects or creditworthiness of the Credit Parties which may
come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Agent in its capacity as such (to
the extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), ratably according to their respective Commitments (or if
the Commitments have expired or been terminated, in accordance with the
respective principal amounts of outstanding Loans and Participation Interest of
the Lenders), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following payment in
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full of the Credit Party Obligations) 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 Credit Agreement or the other Credit Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the Agent under
or in connection with any of the foregoing; provided that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the Agent. If any
indemnity furnished to the Agent for any purpose shall, in the opinion of the
Agent, be insufficient or become impaired, the Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished; provided that the Agent shall not be
indemnified for any event caused by its gross negligence or willful misconduct.
The agreements in this Section shall survive the payment of the Credit Party
Obligations and all other amounts payable hereunder and under the other Credit
Documents.
10.8 Agent in Its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any other
Credit Party as though the Agent were not the Agent hereunder. With respect to
the Loans made and Letters of Credit issued and all obligations owing to it, the
Agent shall have the same rights and powers under this Credit Agreement as any
Lender and may exercise the same as though it were not the Agent, and the terms
"Lender" and "Lenders" shall include the Agent in its individual capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 20 days written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have the right to
appoint a successor Agent. If no successor Agent shall have been so appointed by
the Required Lenders, and shall have accepted such appointment, within 45 days
after the notice of resignation, then the retiring Agent shall select a
successor Agent provided such successor is a Lender hereunder or a commercial
bank organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $400,000,000. Upon
the acceptance of any appointment as the Agent hereunder by a successor, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations as the Agent, as
appropriate, under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was the Agent under this Credit
Agreement.
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SECTION 11
MISCELLANEOUS
-------------
11.1 Notices.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address or telecopy numbers set forth on Schedule
11.1, or at such other address as such party may specify by written notice to
the other parties hereto.
11.2 Right of Set-Off.
In addition to any rights now or hereafter granted under applicable law
or otherwise, and not by way of limitation of any such rights, upon the
occurrence of an Event of Default and the commencement of remedies described in
Section 9.2, each Lender is authorized at any time and from time to time,
without presentment, demand, protest or other notice of any kind (all of which
rights being hereby expressly waived), to set-off and to appropriate and apply
any and all deposits (general or special) and any other indebtedness at any time
held or owing by such Lender (including, without limitation, branches, agencies
or Affiliates of such Lender wherever located) to or for the credit or the
account of any Credit Party against obligations and liabilities of such Credit
Party to the Lenders hereunder, under the Notes, the other Credit Documents or
otherwise, irrespective of whether the Agent or the Lenders shall have made any
demand hereunder and although such obligations, liabilities or claims, or any of
them, may be contingent or unmatured, and any such set-off shall be deemed to
have been made immediately upon the occurrence of an Event of Default even
though such charge is made or entered on the books of such Lender subsequent
thereto. The Credit Parties hereby agree that to the extent permitted by law any
Person purchasing a participation in the Loans and Commitments hereunder
pursuant to Section 11.3(c) or 3.9 may exercise all rights of set-off with
respect to its participation interest as fully as if such Person were a Lender
hereunder.
11.3 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding upon and
inure to the benefit of and be enforceable by the respective successors
and assigns of the parties hereto; provided that no Credit Party may
assign and transfer any of its interests without the prior written
consent of the Lenders; and provided further that the rights of each
Lender to transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth below in
subsections (b) and (c) of this Section 11.3. Notwithstanding the above
(including anything set forth in subsections (b) and (c) of this
Section 11.3), nothing herein shall restrict, prevent or prohibit any
Lender from (A) pledging its Loans
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hereunder to a Federal Reserve Bank in support of borrowings made by
such Lender from such Federal Reserve Bank, or (B) granting assignments
or participations in such Lender's Loans and/or Commitments hereunder
to its parent company and/or to any Affiliate of such Lender or to any
existing Lender or Affiliate thereof.
(b) Assignments. Each Lender may assign all or a portion of
its rights and obligations hereunder, pursuant to an assignment
agreement substantially in the form of Exhibit 11.3, to (i) any Lender,
or any Affiliate or Subsidiary of a Lender, or (ii) any other
commercial bank, financial institution or "accredited investor" (as
defined in Regulation D of the Securities and Exchange Commission)
reasonably acceptable to the Agent and, so long as no Default or Event
of Default has occurred and is continuing, the Borrower; provided that
any such assignment shall (i) unless to a Lender or an Affiliate of a
Lender, be in a minimum aggregate amount of $5,000,000 of the
Commitments and in integral multiples of $1,000,000 above such amount
(or the remaining amount of Commitments held by such Lender) and (ii)
be of a constant, not varying, percentage of all of the assigning
Lender's rights and obligations under the Commitment being assigned.
Any assignment hereunder shall be effective upon satisfaction of the
conditions set forth above and delivery to the Agent of a duly executed
assignment agreement together with a transfer fee of $3,500 payable to
the Agent for its own account. Upon the effectiveness of any such
assignment, the assignee shall become a "Lender" for all purposes of
this Credit Agreement and the other Credit Documents and, to the extent
of such assignment, the assigning Lender shall be relieved of its
obligations hereunder to the extent of the Loans and Commitment
components being assigned. Along such lines the Borrower agrees that
upon notice of any such assignment and surrender of the appropriate
Note or Notes, it will promptly provide to the assigning Lender and to
the assignee separate promissory notes in the amount of their
respective interests substantially in the form of the original Note or
Notes (but with notation thereon that it is given in substitution for
and replacement of the original Note or Notes or any replacement notes
thereof). Notwithstanding the above, a Lender may assign all or a
portion of its Commitments to another Lender without the consent of the
Borrower and without regard to any minimum amount of such assignment.
By executing and delivering an assignment agreement in accordance with
this Section 11.3(b), the assigning Lender thereunder and the assignee
thereunder shall be deemed to confirm to and agree with each other and
the other parties hereto as follows: (i) such assigning Lender warrants
that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim and the assignee
warrants that it is an Eligible Assignee; (ii) except as set forth in
clause (i) above, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Credit
Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto, or the execution,
legality, validity, enforceability, genuineness, sufficiency or value
of this Credit Agreement, any of the other Credit Documents or any
other instrument or document furnished pursuant hereto or thereto or
the financial condition of any Credit Party or the performance or
observance by any Credit Party of any of its obligations under this
Credit Agreement, any of the other Credit Documents or any other
instrument or
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document furnished pursuant hereto or thereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into
such assignment agreement; (iv) such assignee confirms that it has
received a copy of this Credit Agreement, the other Credit Documents
and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such
assignment agreement; (v) such assignee will independently and without
reliance upon the Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement and the other Credit
Documents; (vi) such assignee appoints and authorizes the Agent to take
such action on its behalf and to exercise such powers under this Credit
Agreement or any other Credit Document as are delegated to the Agent by
the terms hereof or thereof, together with such powers as are
reasonably incidental thereto; and (vii) such assignee agrees that it
will perform in accordance with their terms all the obligations which
by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Participations. Each Lender may sell, transfer, grant or
assign participations in all or any part of such Lender's interests and
obligations hereunder; provided that (i) such selling Lender shall
remain a "Lender" for all purposes under this Credit Agreement (such
selling Lender's obligations under the Credit Documents remaining
unchanged) and the participant shall not constitute a Lender hereunder,
(ii) no such participant shall have, or be granted, rights to approve
any amendment or waiver relating to this Credit Agreement or the other
Credit Documents except to the extent any such amendment or waiver
would (A) reduce the principal of or rate of interest on or fees in
respect of any Loans in which the participant is participating or
increase any Commitments with respect thereto, (B) postpone the date
fixed for any payment of principal (including the extension of the
final maturity of any Loan or the date of any mandatory prepayment
pursuant to Section 2.2(d)), interest or fees in which the participant
is participating, or (C) release all or substantially all of the
collateral or guaranties (except as expressly provided in the Credit
Documents) supporting any of the Loans or Commitments in which the
participant is participating and (iii) sub-participations by the
participant (except to an Affiliate, parent company or Affiliate of a
parent company of the participant) shall be prohibited. In the case of
any such participation, the participant shall not have any rights under
this Credit Agreement or the other Credit Documents (the participant's
rights against the selling Lender in respect of such participation to
be those set forth in the participation agreement with such Lender
creating such participation) and all amounts payable by the Borrower
hereunder shall be determined as if such Lender had not sold such
participation; provided, however, that such participant shall be
entitled to receive additional amounts under Section 3.15 to the same
extent that the Lender from which such participant acquired its
participation would be entitled to the benefit of such cost protection
provisions.
(d) Registration. The Agent, acting for this purpose solely on
behalf of the Borrower, shall maintain a register (the "Register") for
the recordation of the names and addresses of the Lenders and the
principal amount of the Loans owing to each Lender from time to time.
The entries in the Register shall be conclusive, in the absence of
manifest
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error, and the Borrower, the Agent and the Lenders shall treat each
Person whose name is recorded in the Register as the owner of a Loan or
other obligation hereunder for all purposes of this Credit Agreement
and the other Credit Documents, notwithstanding notice to the contrary.
Any assignment of any Loan or other obligation hereunder shall be
effective only upon appropriate entries with respect thereto being made
in the Register. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time
upon reasonable prior notice.
11.4 To Waiver; Remedies Cumulative.
No failure or delay on the part of the Agent or any Lender in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between any Consolidated Party and the Agent
or any Lender shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Credit
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights and remedies
provided herein are cumulative and not exclusive of any rights or remedies which
the Agent or any Lender would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Agent or the Lenders to any other or further action in any
circumstances without notice or demand.
11.5 Payment of Expenses; Indemnification.
The Credit Parties agree to: (a) pay all reasonable out-of-pocket
costs and expenses of (i) the Agent in connection with (A) the negotiation,
preparation, execution and delivery and administration of this Credit Agreement
and the other Credit Documents and the documents and instruments referred to
therein (including, without limitation, the reasonable fees and expenses of
Xxxxx & Xxx Xxxxx, special counsel to the Agent and the fees and expenses of
counsel for the Agent in connection with collateral issues), and (B) any
amendment, waiver or consent relating hereto and thereto including, but not
limited to, any such amendments, waivers or consents resulting from or related
to any work-out, renegotiation or restructure relating to the performance by the
Credit Parties under this Credit Agreement and (ii) the Agent and the Lenders in
connection with (A) enforcement of the Credit Documents and the documents and
instruments referred to therein, including, without limitation, in connection
with any such enforcement, the reasonable fees and disbursements of counsel for
the Agent and each of the Lenders, and (B) any bankruptcy or insolvency
proceeding of a Credit Party and (b) indemnify the Agent and each Lender, its
officers, directors, employees, representatives and agents from and hold each of
them harmless against any and all losses, liabilities, claims, damages or
expenses incurred by any of them as a result of, or arising out of, or in any
way related to, or by reason of, any investigation, litigation or other
proceeding (whether or not the Agent or any Lender is a party thereto) related
to (i) the entering into and/or performance of any Credit Document or the use of
proceeds of any Loans (including other extensions of credit) hereunder or the
consummation of any other transactions contemplated in any Credit Document,
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding (but excluding any such losses, liabilities, claims, damages or
expenses to the extent incurred by reason
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of gross negligence or willful misconduct on the part of the Person to be
indemnified), (ii) any Environmental Claim and (iii) any claims for Non-Excluded
Taxes.
11.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing and signed by the Required Lenders and the then Credit Parties; provided
that no such amendment, change, waiver, discharge or termination shall without
the consent of each Lender affected thereby,
(a) without the consent of each Lender affected thereby,
(i) extend the Maturity Date,
(ii) reduce the rate or extend the time of payment of interest
(other than as a result of waiving the applicability of any
post-default increase in interest rates) thereon or fees hereunder,
(iii) reduce or waive the principal amount of any Loan,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver of any
Default or Event of Default or mandatory reduction in the Commitments
shall not constitute a change in the terms of any Commitment of any
Lender),
(v) except as the result of or in connection with an Asset
Dissolution permitted by Section 8.5, release all or substantially all
of the Collateral securing the Credit Party Obligations hereunder,
(vi) except as the result of or in connection with a
dissolution, merger or disposition of a Subsidiary permitted under
Section 8.4, release the Borrower or substantially all of the other
Credit Parties from its obligations under the Credit Documents
(provided that the Agent may, without consent from any other Lender,
release any Guarantor that is sold or transferred in conformance with
Section 8.5),
(vii) amend, modify or waive any provision of this Section or
Section 3.4(a), 3.4(b)(i), 3.4(b)(ii), 3.7, 3.8, 3.9, 3.10, 3.11, 3.12,
3.13, 3.14, 3.15, 9.1(a), 11.2, 11.3 or 11.5,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders or
(ix) consent to the assignment or transfer by the Borrower (or
substantially all of the other Credit Parties) of any of its rights and
obligations under (or in respect of) the Credit Documents except as
permitted thereby; and
-84-
(b) without the consent of the Agent, no provision of the second
paragraph of Section 2.1(c), Section 3.4(c) or Section 10 may be amended;
(c) without the consent of the Issuing Lender, no provision of Section
2.2 or Section 3.4(b)(iii) may be amended.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans or the Letters of Credit, and each Lender acknowledges that the provisions
of Section 1126(c) of the Bankruptcy Code supersedes the unanimous consent
provisions set forth herein and (y) the Required Lenders may consent to allow a
Credit Party to use cash collateral in the context of a bankruptcy or insolvency
proceeding.
11.7 Counterparts.
This Credit Agreement may be executed in any number of counterparts,
each of which where so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart.
11.8 Pleadings.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
11.9 Defaulting Lender.
Each Lender understands and agrees that if such Lender is a Defaulting
Lender then notwithstanding the provisions of Section 11.6 it shall not be
entitled to vote on any matter requiring the consent of the Required Lenders or
to object to any matter requiring the consent of all the Lenders adversely
affected thereby; provided, however, that all other benefits and obligations
under the Credit Documents shall apply to such Defaulting Lender.
11.10 Survival of Indemnification and Representations and Warranties.
All indemnities set forth herein and all representations and warranties
made herein shall survive the execution and delivery of this Credit Agreement,
the making of the Loans, the issuance of the Letters of Credit and the repayment
of the Loans, LOC Obligations and other obligations and the termination of the
Commitments hereunder.
11.11 Governing Law; Venue.
(a) THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES
-85-
HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
Any legal action or proceeding with respect to this Credit Agreement or
any other Credit Document may be brought in the courts of the State of
North Carolina, or of the United States for the Western District of
North Carolina, and, by execution and delivery of this Credit
Agreement, each Credit Party hereby irrevocably accepts for itself and
in respect of its property, generally and unconditionally, the
jurisdiction of such courts. Each Credit Party further irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the
address for notices pursuant to Section 11.1, such service to become
effective 3 days after such mailing. Nothing herein shall affect the
right of a Lender to serve process in any other manner permitted by law
or to commence legal proceedings or to otherwise proceed against a
Credit Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with
this Credit Agreement or any other Credit Document brought in the
courts referred to in subsection (a) hereof and hereby further
irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been
brought in an inconvenient forum.
11.12 Waiver of Jury Trial.
TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES TO THIS
CREDIT AGREEMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT
AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
11.13 Time.
All references to time herein shall be references to Eastern Standard
Time or Eastern Daylight time, as the case may be, unless specified otherwise.
11.14 Severability.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
-86-
11.15 Entirety.
This Credit Agreement together with the other Credit Documents
represent the entire agreement of the parties hereto and thereto, and supersede
all prior agreements and understandings, oral or written, if any, including any
commitment letters or correspondence relating to the Credit Documents or the
transactions contemplated herein and therein.
11.16 Binding Effect.
This Credit Agreement shall become effective at such time when all of
the conditions set forth in Section 5.1 have been satisfied or waived by the
Lenders and it shall have been executed by the Borrower, the Guarantors and the
Agent, and the Agent shall have received copies hereof (telefaxed or otherwise)
which, when taken together, bear the signatures of each Lender, and thereafter
this Credit Agreement shall be binding upon and inure to the benefit of the
Borrower, the Guarantors, the Agent and each Lender and their respective
successors and assigns.
11.17 Confidentiality.
Each Lender agrees that it will use its reasonable best efforts to keep
confidential and to cause any representative designated under Section 7.11 to
keep confidential any non-public information from time to time supplied to it
under any Credit Document; provided, however, that nothing herein shall affect
the disclosure of any such information to (i) the extent such Lender in good
faith believes is required by statute, rule, regulation or judicial process,
(ii) counsel for such Lender or to its accountants, (iii) bank examiners or
auditors or comparable Persons, (iv) any affiliate of such Lender, (v) any other
Lender, or any assignee, transferee or participant, or any potential assignee,
transferee or participant, of all or any portion of any Lender's rights under
this Credit Agreement who is notified of the confidential nature of the
information and agrees to be bound by this provision or provisions reasonably
comparable hereto, or (vi) any other Person in connection with any litigation to
which any one or more of the Lenders is a party; and provided further that no
Lender shall have any obligation under this Section 11.17 to the extent any such
information becomes available on a non-confidential basis from a source other
than a Credit Party or that any information becomes publicly available other
than by a breach of this Section 11.17. Each Lender agrees it will use all
confidential information exclusively for the purpose of evaluating, monitoring,
selling, protecting or enforcing its Loans and other rights under the Credit
Documents. Without affecting any other rights of the Borrower and the Credit
Parties, each Lender acknowledges that the Borrower shall be entitled to seek
the remedies of injunction, specific performance and other equitable relief for
any breach of the provisions of this Section 11.17.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
-87-
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: ANCHOR ADVANCED PRODUCTS, INC.,
-------- a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Title: Chief Executive Officer and President
-------------------------------------
GUARANTORS: ANCHOR HOLDINGS, INC.,
---------- a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx, Xx.
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx, Xx.
-------------------------------------
Title: Chief Executive Officer and President
-------------------------------------
[Signatures continued]
Each of the parties hereto has caused a counterpart of this Credit
Agreement to be duly executed and delivered as of the date first above written.
LENDER:
------ NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ Xxxx X. Xxxx
--------------------------------
Name: Xxxx X. Xxxx
-----------------------------
Title: Senior Vice President
-----------------------------
SCHEDULE 1.1A
Commitment Percentages
Loan
Name of Lender Commitment Percentage Loans
-------------- --------------------- -----
NationsBank, N.A. 100% $15,000,000
TOTAL: 100.00% $15,000,000.00
SCHEDULE 1.1B
-------------
Existing Investments
--------------------
None.
SCHEDULE 1.1C
-------------
Existing Liens
--------------
1. See Schedule 6.10.
2. Until May 15, 1997, the Company will continue to maintain a lockbox with The
First National Bank of Boston for certain accounts receivable.
DRAFT
Schedule 5.1(d)
---------------
Form of Opinion of Xxxxxxxx, Xxxxxxx & Xxxxxxx
----------------------------------------------
DRAFT
Schedule 5.1(e)
---------------
Form of Local Counsel Corporate Opinion
---------------------------------------
DRAFT
Schedule 5.1(f)
---------------
Form of Local Counsel Corporate Opinion
---------------------------------------
Schedule 6.6
------------
Consents, Approvals and Authorizations
--------------------------------------
None.
Schedule 6.10
-------------
Existing Indebtedness
---------------------
1. Connecticut Notes and Grant. The Company has outstanding notes (the
"Connecticut Notes") to the Connecticut Development Authority in the
aggregate principal amount of $541,966.97. Each note has a maturity of six
years and bears interest at a rate of 5% per annum. The Company has also
received a grant of $1,000,000 from the State of Connecticut, Department of
Economic Development. The grant is subject to certain requirements, among
other things, that the Company: (i) retain operations in Connecticut for no
less than 10 years and (ii) fund at least 50% of the entire project.
Failure to meet these conditions would require immediate repayment of all
amounts advanced to the Company ($1,000,000 as of December 31, 1996) and
further, such failure would constitute an event of default under the
Connecticut Notes.
Schedule 6.11
-------------
Litigation
----------
None.
Schedule 6.15
-------------
Existing Subsidiaries
---------------------
1. Anchor Advanced Products Foreign Sales Corporation
--------------------------------------------------
Jurisdiction of Incorporation: Barbados
Outstanding Stock: 100 shares of common stock
Percentage of Outstanding Shares held by a Consolidated Party: 100%
2. Cepillos xx Xxxxxxxxx, X.X. de C.V.
-----------------------------------
Jurisdiction of Incorporation: Mexico
Outstanding Stock: 1,000 shares of Series A Stock
444,398 shares of Series B Stock
Percentage of Outstanding Shares held by a Consolidated Party: 100%
Schedule 6.18
-------------
Environmental Matters
---------------------
None.
Schedule 6.19
-------------
Intellectual Property
---------------------
1. U.S. Patents for Anchor Advanced Products, Inc.
-----------------------------------------------
Date of Patent Patent Number Assignee/Inventor Claims
-------------- ------------- ----------------- ------
3/29/88 4,733,425 Xxxxxxxxx-XxXxxx Twisted wire brush made with hollow or
Filed 6/16/86 irregularly shaped filament.
1/13/87 4,635,313 NAP/Xxxxxxxxx Xxxxxxx, Brush-making process which securely
Xxxxx Xxxxxxxxx, anchors the bristles in an injection
Xxxxx Xxxxxx molded body without using staples, inserts,
or any other supplementary bristle
retaining members.
12/30/86 4,632,136 Plough, Inc./ Mascara application system.
Filed 11/2/83 Xxx Xxxxxxxxx Container. Mascara. With a twisted
wire brush of 75 to 150 strands per
1/4" (about 15 to 00 xxxxxxx xxxxxxx per
turn). Brush with irregular (twisted)
strands. Arrowhead shaped brush.
5/6/86 4,586,520 Plough, Inc./ Mascara application system with twisted
Filed 11/2/83 Xxxxx Xxxxxxxx wire brush with different length bristles
and container/wiper/closure.
9/20/83 4,404,977 Bridgeport Metal Flexible tip with bristles attached.
Filed 9/14/81 Goods
7/28/81 4,280,629 Anchor/Xxxxx Container for nail polish or the like.
Filed 5/9/80 Xxxxxxxxx
7/1/75 3,892,248 Plough, Inc./ Tri-Comb.
Filed 5/9/80 Xxx Xxxxxxxxx
6/1/71 3,582,140 Vistron Corporation Twisted wire cleaning brush with
Filed 8/7/69 protected tip.
4/23/63 3,086,820 Anchor/X.X. Nail polish applicator and method of
Filed 9/2/58 Xxxxxxxxxxx making the same.
Date of Patent Patent Number Assignee/Inventor Claims
-------------- ------------- ----------------- ------
In process Application Anchor Monofilament Nylon Dental Floss
053229-0017 Advanced/Kenan
Bible, Xxxxxx Xxxxxxx,
Xxxxx Xxxxx,
Xxx Xxxxxx
Filed 9/21/95 08/532/228 Anchor Wax-filled Dental Floss
(pending) Advanced/Kenan
Bible, Xxxxxx Xxxxxxx,
Xxxxx Xxxxx
Filed 9/21/95 08/532/004 Anchor Braided Dental Floss
(pending) Advanced/Kenan
Bible, Xxxxxx Xxxxxxx,
Xxxxx Xxxxx
Filed 9/09/95 08/526/005 Anchor Advanced/ Adjustable Toothbrush
Xxxxxxx Xxxxx
7/4/95 D360,057 Xxxxx Bow "Smooth Move" package for lipsticks or
Filed 3/14/94 other solid cosmetic products with
improved operating mechanism
Filed 1/12/95 08/489/607 Anchor Advanced/ Grooved staple wire to improve tuft
Pending Xxxxxxx Xxxxxxx retention in brushes
3/12/91 4,998,779 NAP/Xxxxx Xxxxxx Apparatus & methodology for producing
Filed 12/26/89 rounded brush tips.
5/22/90 4,927,281 L'Oreal/Gueret Twisted wire brush with mixed filament
Filed 2/10/89 shapes/sizes
12/19/89 4,887,622 L/Oreal/Gueret Twisted wire brush with bristle diameter
Filed 11/30/87 .10 to .25mm (.004"-.010") w/approx.
10-40 bristles per turn. TWB with
varying bristle density. Brush with
hollow or irregularly shaped bristles.
2. U.S. Trademarks for Anchor Advanced Products, Inc.
--------------------------------------------------
Date of Trademark Registration Number Assignee/Inventor Description
----------------- ------------------- ----------------- -----------
In process Anchor/Xxxxx Bow Smooth Move trademark
Filed 11/20/95
9/20/55 612,523 Anchor Ancodent trademark
Filed 11/17/54
(next renewal date
9/20/2005)
1,114,131 Anchor Anchor design
1,404,994 Anchor Anchor
3. Foreign Patents and Annuities for Anchor Advanced Products, Inc.
----------------------------------------------------------------
Patent Patent Number & Date of Foreign Patent
Description Description Renewal Country Number Annuity #
----------- ----------- ------- ------- ------ ---------
Apparatus & 4,998,779
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 12/28/95 Austrian 0438935 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 02/29/96 Belgian 0438935 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 01/16/96 Swiss P438935.9 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 01/25/96 German P69003523.3 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Patent Patent Number & Date of Foreign Patent
Description Description Renewal Country Number Annuity #
----------- ----------- ------- ------- ------ ---------
Apparatus & 4,998,779 02/19/96 Danish 0438935 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 01/23/96 Spanish 0438935 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 01/02/96 French 0438935 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 12/11/96 Great Britain 0438935 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 03/05/96 Greek 3009372 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 01/26/96 Italian 0438935 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 03/15/96 Luxembourg 0438935 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Patent Patent Number & Date of Foreign Patent
Description Description Renewal Country Number Annuity #
----------- ----------- ------- ------- ------ ---------
Apparatus & 4,998,779 12/22/95 Swedish 90403571.4 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 01/19/96 Canada 2072361 6
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Apparatus & 4,998,779 03/19/96 Netherlands 0438935 3
methodology for (ref. #3697-005-25)
producing Base date 12/13/90
rounded brush
tips
Brush with Self- 4,635,313 Japan 240403/84 not
Retaining (ref. #3697-013-25) extended
Bristles
Schedule 6.22(a)
----------------
Personal Property Locations
---------------------------
1. Elk Grove, Xxxx County, IL
2. Harlingen, Cameron County, TX
3. Knoxville, Xxxx County, TN
4. Xxxxxxxxx, Xxxxxx
0. Morristown, Xxxxxxx County, TN
6. Round Rock, Xxxxxxxxxx County, TX
7. Xxxxxxx, Xxx County, NC
8. Seagrove, NC
9. Waterbury, New Haven County, CT
Schedule 6.22(b)
----------------
Chief Executive Offices
-----------------------
1. Anchor Advanced Products, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx X-000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
2. Anchor Advanced Products Foreign Sales Corporation
c/o Weston International Management Limited
The Financial Centre
Xxxxxx'x Court Xxxx
St. Xxxxxxx, Barbados
3. Cepillos xx Xxxxxxxxx, X.X. de X.X.
Xxx. Xxxxxxx y Avenue, Xxxxx Xxxxxx Km. 4
X. Xxxxxxxxx, Xxx. Mexico
Schedule 7.6
------------
Existing Insurance Coverage
---------------------------
See attached.
[RISK MANAGEMENT SERVICES, INC. LOGO]
X.X. Xxx 0000 000 X. Xxxxxx Xxxx. Xxxxxxxxxx, XX 00000-0000
Phone 000-000-0000 Fax 000-000-0000
ANCHOR ADVANCED PRODUCTS, INC.
Property Coverage
-----------------
See Attached List of Locations & Coverage.
General Liability Coverage
--------------------------
See Attached Summary.
Automobile Coverage
-------------------
Policy Provides Comprehensive Automobile Liability.
$1,000,000 Combined Single Limit of Liability
$1,000,000 Uninsured Motorist Protection
$ 5,000 Medical Payments
$ 1,000 Deductible Comp. & Coll. Physical Damage
Hired & Non-Owned Physical Damage $30,000 Maximum
Personal Injury Protection in No Fault States.
Workers Compensation
--------------------
Benefits Per Legislative Statute.
Employers Liability
$500,000 Each Accident
$500,000 Policy Limit
$500,000 Each Employee
Policy Written on a $250,000 Deductible Per Loss.
Maximum Any One Year $2,274,000.
Charges of $785 Per Indemnity and $125 Medical in Addition to Paid Claims.
D&O
$3,000,000.
Crime Coverage
--------------
Policy Provides Form A Employee Dishonesty $2,000,000 with a $25,000 Deductible.
Fiduciary Liability
-------------------
Policy Provides Trustees and Fiduciary Liability $5,000,000 Per Policy and
Employee Benefits Administration Liability $5,000,000 Per Policy.
Covers:
Anchor Advanced Products Salaried & Hourly Pension Plan
Anchor Advanced Products Employee Savings Plan
Selected Executive Retirement Plan
Anchor Advanced Products Health Insurance Plan
Anchor Advanced Products Dental Plan
Anchor Advanced Products Long Term Disability Plan
Anchor Advanced Products Accidental Death & Dismemberment Plan
Anchor Advanced Products Term Life Plan
Mid-State Plastics Group Health Plan
Mid-State Plastics 401K Retirement Plan
Flood Coverage
--------------
Provides Coverage Per Federal Flood Coverage
Texas Harlington Plant
Limits
------
Building $200,000 $1,000 Deductible
Contents $200,000 $1,000 Deductible
Umbrella & Liability Coverage
-----------------------------
Policy Provides $25,000,000 Each Occurrence and Aggregate Over Underlying
Liability Coverage.
$100,000 Self Insured Retention - Texas and New York
Excess Liability Coverage
-------------------------
Policy Provides $10,000,000 Each Occurrence and Aggregate Over Umbrella
Coverage.
[RISK MANAGEMENT SERVICES, INC. LOGO]
X.X. Xxx 0000 000 X. Xxxxxx Xxxx. Xxxxxxxxxx, XX 00000-0000
Phone 000-000-0000
ANCHOR ADVANCED PRODUCTS, INC.
Mexico
Property Coverage
-----------------
$ 4,678,114 Building
$20,885,824 Contents
$24,500,000 Business Interruption
"All Risk" Coverage - $5,000 Deductible
Flood - 3% Insured Value
Earthquake - 2% Insured Value (10% Co-insurance)
Business Interruption - 5 Days
Comprehensive General Liability
-------------------------------
Premises Liability $1,000,000 Combined Single Limit
Auto in Excess of Primary Policy $100,000
Sudden Pollution $1,000,000 - 20% Deductible
Loading and Unloading
Deductible 10% Claim
Burglary
--------
$20,000 - 10% Deductible of Loss
Money & Securities
------------------
$50,000 - 10% Deductible of Loss
Transit
-------
$200,000 Each Vehicle
5% Deductible of Shipment
20% Theft Deductible
The terms set forth above are hereby agreed to:
-------------------------, as Assignor
By:
Name:
Title:
-------------------------, as Assignee
By:
Name:
Title:
Notice address of Assignee:
{{Assignee}}
__________________________
__________________________
Attn: ____________________
Telephone: (___) ________
Telecopy: (___) ________
CONSENTED TO (IF REQUIRED BY THE TERMS OF SECTION 11.3(b)):
NATIONSBANK, N.A.,
as Agent
By:
Name:
Title:
ANCHOR ADVANCED PRODUCTS, INC.
By:
Name:
Title:
Automobile
----------
Bodily Injury $50,000 - Per Person $100,000 - Per Accident
Property Damage $100,000 - Per Accident
Medical $5,000 - Per Person $25,000 - Per Accident
Comprehensive 2% Deductible - Minimum $200.00
Collision 5% Deductible - Minimum $400.00
Private Passenger Auto $18,000 Maximum Per Vehicle
Trucks $50,000 Maximum Per Vehicle
Trailer $16,000 Maximum Per Unit
Premium Based on 8 Autos.
Fidelity Coverage
-----------------
Comprehensive Dishonesty, Disappearance and Destruction Policy Form A
$500,000 Agreement I
ANCHOR ADVANCED PRODUCTS CORPORATION
POLICY TERM January 1, 1997 to January 1, 1998.
FORM IRI Comprehensive All Risk 9/90 Edition.
COVERAGE PARTS Property Damage, Business Interruption
Item 1, and Extra Expense.
ENDORSEMENTS Boiler and Machinery (including
Production Equipment), Earthquake, Flood,
Transit, Replacement Coverage, and Agreed
Amount.
LOCATIONS AND VALUES See Exhibit 1.
LIMITS OF LIABILITY
Policy Limit In no event shall liability for loss under
this policy arising out of one Occurrence
exceed $220,508,000, nor shall liability
exceed any specific sublimit of liability
applying to any insured loss, coverage or
location(s).
All Other Parts (AOP) Liability for loss under this policy arising
Sublimit out of one Occurrence shall not exceed
$220,508,000 unless loss is caused by Fire,
Lightning, Removal, Wind and Hail, Leakage
From Fire Protective Equipment, Explosion,
Smoke, Aircraft and Vehicles, Sonic Shock
Wave, Riot, Civil Commotion and Vandalism,
Motion Material, or Civil or Military
Authority as defined herein in which case
such loss is subject to the Policy Limit
shown above.
$ 50,000,000 Earthquake at all locations
$ 50,000,000 Flood at all locations except Nos. 040,080 &
910.
$ 5,000,000 Flood at Location No. 040.
$ 50,000,000 In the Aggregate at all locations.
$ 300,000 Transit
Policy Amount Boiler and Machinery
$ 1,000,000 "Class I Newly Acquired Property": A
building or group of buildings situated at a
common location including related structures
and the contents of such buildings or
structures which are protected by automatic
sprinklers or other fire suppression systems
which have been designed and installed in
accordance with the National Fire Protection
Association Codes. Such automatic protection
to be provided in all areas which have
combustible construction or combustible
occupancy. No more than 10% of the building
area to be of frame construction. The site
of such property must be situated in an area
which qualifies for a Town Class Code of at
least 8 or its equivalent.
Page 2
LIMITS OF LIABIITY
(continud)
$ 1,000,000 "Class II Newly Acquired Property". Any
Newly Acquired Property which does not
qualify as a Class I Newly Acquired property.
$ 100,000 Media Replacement at all locations except
Nos. 900 A and 900 B.
$ 40,000 Media Replacement at Location No. 900 A
$ 1,000,000 Media Replacement at Location No. 900 B
$ 100,000 Temporary Removal of Property - 90 Days
The greater of 25% Debris Removal
of loss payable or
$ 5,000,000
$ 25,000 Pollutant cleanup and removal from land or
water confined to described premises
(excluding Newly Acquired Property and
Miscellaneous Uninsured Locations). (Annual
Aggregate Limit)
$ 25,000 Expediting Expenses
$ 100,000 Personal property of the insured at any
exhibition, exposition, fair or trade show
within the United States, Puerto Rico or
Canada.
$ 1,200,000 Extra Expenses at Location No. 040 only.
$ 1,000,000 Miscellaneous Unnamed Locations
$ 1,000,000 Miscellaneous Named Locations
See Exhibit No. 2 Location Limits
DEDUCTIBLES
$ 50,000 Earthquake at all locations
$ 50,000 Flood at all locations except No. 040
$ 100,000 Flood at Location No. 040
$ 5,000 Transit
$ 25,000 Boiler and Machinery
See Exhibit No. 3 Wind
$ 25,000 For each loss otherwise insured against.
Page 3
COMMERCIAL GENERAL LIABILITY
----------------------------
Limits of Liability
-------------------
a. General Aggregate Limit $2,000,000
b. Products/Completed Operations -
Aggregate Limit $2,000,000
c. Personal & Advertising Injury Limit $1,000,000
d. Each Occurrence Limit $1,000,000
e. Fire Damage Legal Liability Limit $ 50,000 Any One Fire
f. Medical Expense Limit $ 5,000 Any One Person
Coverages
---------
a. Premises/Operations
b. Independent Contractors
c. Products/Completed Operations
d. Personal & Advertising Operations
e. Medical Payments
f. Foreign Products Liability
g. Broad Form Vendors Coverage
Exclusions
----------
a. Absolute Pollution
b. Asbestos Exclusion
c. Employment-Related Acts
Foreign General Liability Exclusions
------------------------------------
a. Asbestos Exclusion
b. Pollution Exclusion
x. Xxxxx Form Securities
d. Professional Services and Errors & Omissions
e. Aircraft Products and Grounding
f. Excess and Difference in Conditions Provisions
g. Nuclear Energy Liability (Broad Form)
Coverage Form 1993 Occurrence Form
-------------
Rating Plan $25,000 Deductible (including Bodily Injury, Property
----------- Damage, Medical Payments and Allocated Loss Adjustment
Expense)
Anchor Advanced 12/19/96
SCHEDULE 11.1
Addresses for Notice
Name and Address
----------------
Anchor Advanced Products, Inc.
0000 Xxxxxxxxxx Xxxxx, Xxxxx X-000 Xxxxxxxxx,
Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxx
Senior Vice President,
Treasury & Logistics
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Anchor Advanced Holdings Co.
0000 Xxxxxxxxxx Xxxxx, Xxxxx X-000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxx
Senior Vice President,
Treasury &Logistics
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
NationsBank, N.A.
000 X. Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx Xxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
EXHIBIT 2.1
-----------
FORM OF NOTICE OF BORROWING
NationsBank, N.A.,
as Agent for the Lenders
NC-001-15-04
Independence Center, 15th Floor
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, ANCHOR ADVANCED PRODUCTS, INC. (the "Borrower"),
refers to the Credit Agreement dated as of April 2, 1997 (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the other Credit Parties party thereto, the Lenders party thereto and
NationsBank, N.A., as Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Borrower hereby gives notice pursuant to Section 2.1(b) of the
Credit Agreement that it requests a Loan advance under the Credit Agreement, and
in connection therewith sets forth below the terms on which such Loan advance is
requested to be made:
(A) Date of Borrowing
(which is a Business Day) ------------------
(B) Principal Amount of
Borrowing ------------------
(C) Interest rate basis ------------------
(D) Interest Period and the
last day thereof ------------------
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
Very truly yours,
ANCHOR ADVANCED PRODUCTS,
INC.
By:
Name:
Title:
EXHIBIT 2.3
-----------
FORM OF NOTICE OF CONTINUATION/CONVERSION
NationsBank, N.A.,
as Agent for the Lenders
NC-001-15-04
Independence Center, 15th Floor
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx 00000
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, ANCHOR ADVANCED PRODUCTS, INC. (the "Borrower"), refers
to the Credit Agreement dated as of April 2, 1997 (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the other Credit Parties party thereto, the Lenders party thereto and
NationsBank, N.A., as Agent. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in the Credit
Agreement. The Borrower hereby gives notice pursuant to Section 2.3 of the
Credit Agreement that it requests a continuation or conversion of a Loan
outstanding under the Credit Agreement, and in connection therewith sets forth
below the terms on which such continuation or conversion is requested to be
made:
(A) Date of Continuation or Conversion
(which is the last day of the
the applicable Interest Period) -----------------
(B) Principal Amount of
Continuation or Conversion -----------------
(C) Interest rate basis -----------------
(D) Interest Period and the
last day thereof -----------------
In accordance with the requirements of Section 5.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d), (e) and (f) of such Section, are true and
correct.
Very truly yours,
ANCHOR ADVANCED PRODUCTS, INC.
By:
Name:
Title:
EXHIBIT 2.5(a)
--------------
FORM OF NOTE
$15,000,000 April 2, 1997
FOR VALUE RECEIVED, ANCHOR ADVANCED PRODUCTS, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of
NationsBank, N.A., its successors and permitted assigns (the "Lender"), at the
office of NationsBank, N.A., as Agent (the "Agent"), at Independence Center,
15th Floor, 000 Xxxxx Xxxxx Xxxxxx (or at such other place or places as the
holder hereof may designate in writing to the Borrower pursuant to the terms of
the Credit Agreement), at the times set forth in the Credit Agreement dated as
of the date hereof among the Borrower, the other Credit Parties party thereto,
the Lenders party thereto and the Agent (as it may be amended, modified,
extended or restated from time to time, the "Credit Agreement"; all capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Credit Agreement), but in no event later than the Maturity Date, in Dollars and
in immediately available funds, the principal amount of FIFTEEN MILLION DOLLARS
($15,000,000) or, if less than such principal amount, the aggregate unpaid
principal amount of all Loans made by the Lender to the Borrower pursuant to the
Credit Agreement, and to pay interest from the date hereof on the unpaid
principal amount hereof, in like money, at said office, on the dates and at the
rates provided in the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default,
the balance outstanding hereunder shall bear interest as provided in Section
3.1(b) of the Credit Agreement. Further, in the event the payment of all sums
due hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the principal
and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments
of the principal hereof and interest hereon and the respective dates thereof
shall be endorsed by the holder hereof on Schedule A attached hereto and
incorporated herein by reference, or on a continuation thereof which shall be
attached hereto and made a part hereof; provided, however, that any failure to
endorse such information on such schedule or continuation thereof shall not in
any manner affect the obligation of the Borrower to make payments of principal
and interest in accordance with the terms of this Note.
This Note and the Loans evidenced hereby may be transferred in whole or
in part only by registration of such transfer on the Register maintained by or
on behalf of the Borrower as provided in Section 11.3(d) of the Credit
Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
ANCHOR ADVANCED PRODUCTS,
INC.
By:
Name:
Title:
SCHEDULE A TO THE
REVOLVING NOTE
OF ANCHOR ADVANCED PRODUCTS, INC.
DATED APRIL 2, 1997
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
---- ---- ------ --------- -------- --------- --------
EXHIBIT 7.1(c)
--------------
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, ____.
I, ______________________, [Title] of ANCHOR ADVANCED PRODUCTS, INC.
(the "Borrower") hereby certify that, to the best of my knowledge and belief,
with respect to that certain Credit Agreement dated as of April 2, 1997 (as
amended, modified, extended or restated from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are incorporated
herein by reference) among the Borrower, the other Credit Parties party thereto,
the Lenders party thereto and NationsBank, N.A., as Agent:
a. The company-prepared financial statements which accompany this certificate
are true and correct in all material respects and have been prepared in
accordance with GAAP applied on a consistent basis, subject to changes resulting
from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar certification, or, if none,
the Closing Date) no Default or Event of Default has occurred and is continuing
under the Credit Agreement; and
Delivered herewith are detailed calculations demonstrating compliance by the
Credit Parties with the financial covenants contained in Section 7.12 of the
Credit Agreement as of the end of the fiscal period referred to above.
This ______ day of ___________, ____.
ANCHOR ADVANCED PRODUCTS,
INC.
By:
Name:
Title:
Attachment to Officer's Certificate
-----------------------------------
Computation of Financial Covenants
EXHIBIT 7.1(d)
--------------
FORM OF BORROWING BASE REPORT
EXHIBIT 7.13
------------
FORM OF JOINDER AGREEMENT
THIS JOINDER AGREEMENT (the "Agreement"), dated as of _____________,
____, is by and between _____________________, a ___________________ (the
"Subsidiary"), and NATIONSBANK, N.A., in its capacity as Agent under that
certain Credit Agreement (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"), dated as of April 2, 1997, by and
among Anchor Advanced Products, Inc., a Delaware corporation (the "Borrower"),
the other Credit Parties party thereto, the Lenders party thereto and
NationsBank, N.A., as Agent. All of the defined terms in the Credit Agreement
are incorporated herein by reference.
The Subsidiary is an Additional Credit Party, and, consequently, the
Credit Parties are required by Section 7.13 of the Credit Agreement to cause the
Subsidiary to become a "Guarantor". ---------
Accordingly, the Subsidiary hereby agrees as follows with the Agent, for
the benefit of the Lenders:
1. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Credit Agreement and a "Guarantor" for all purposes of the Credit Agreement, and
shall have all of the obligations of a Guarantor thereunder as if it had
executed the Credit Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Guarantors contained in the Credit Agreement. Without limiting
the generality of the foregoing terms of this paragraph 1, the Subsidiary
hereby, jointly and severally together with the other Guarantors, guarantees to
each Lender and the Agent, as provided in Section 4 of the Credit Agreement, the
prompt payment and performance of the Borrower's Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by acceleration or
otherwise) strictly in accordance with the terms thereof.
2. The Subsidiary hereby acknowledges, agrees and confirms that, by its
execution of this Agreement, the Subsidiary will be deemed to be a party to the
Security Agreement and an "Obligor" for all purposes of the Security Agreement,
and shall have all of the obligations of an Obligor thereunder as if it had
executed the Security Agreement. The Subsidiary hereby ratifies, as of the date
hereof, and agrees to be bound by, all of the terms, provisions and conditions
applicable to the Obligors contained in the Security Agreement. Without limiting
the generality of the foregoing terms of this paragraph 2, the Subsidiary hereby
grants to the Agent, for the benefit of the Lenders, a continuing security
interest in, and a right of set off against, any and all right, title and
interest of the Subsidiary in and to the Collateral (as such term is defined in
Section 2 of the Security Agreement) of the Subsidiary. The Subsidiary hereby
represents and warrants to the Agent that:
(i) The Subsidiary's chief executive office and chief place of
business are (and for the prior four months have been) located at the
locations set forth in Schedule 1 attached hereto and the Subsidiary
keeps its books and records at such locations.
(ii) The type of Collateral owned by the Subsidiary and the
location of all Collateral owned by the Subsidiary is as shown on
Schedule 2 attached hereto.
(iii) The Subsidiary's legal name is as shown in this Agreement
and the Subsidiary has not changed its name, been party to a merger,
consolidation or other change in structure or used any tradenames
except as set forth in Schedule 3 attached hereto.
3. The address of the Subsidiary for purposes of all notices and other
communications is ____________________, ____________________________, Attention
of ______________ (Facsimile No. ____________).
4. The Subsidiary hereby waives acceptance by the Agent and the Lenders
of the guaranty by the Subsidiary under Section 4 of the Credit Agreement upon
the execution of this Agreement by the Subsidiary.
5. This Agreement may be executed in two or more counterparts, each of
which shall constitute an original but all of which when taken together shall
constitute one contract.
6. This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of North Carolina.
IN WITNESS WHEREOF, the Subsidiary has caused this Joinder Agreement to
be duly executed by its authorized officers, and the Agent, for the benefit of
the Lenders, has caused the same to be accepted by its authorized officer, as of
the day and year first above written.
[SUBSIDIARY]
By:
Name:
Title:
Acknowledged and accepted:
NATIONSBANK, N.A., as Agent
By:
Name:
Title:
EXHIBIT 11.3
------------
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of _______________, ____ is
entered into between ________________ ("Assignor") and ____________________
("Assignee").
Reference is made to the Credit Agreement dated as of April 2, 1997, as
amended and modified from time to time thereafter (the "Credit Agreement") among
Anchor Advanced Products, Inc., the other Credit Parties party thereto, the
Lenders party thereto and NationsBank, N.A., as Agent. Terms defined in the
Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
effective as of the Effective Date set forth below, the interests set forth
below (the "Assigned Interest") in the Assignor's rights and obligations under
the Credit Agreement, including, without limitation, the interests set forth
below in the Commitments and outstanding Loans of the Assignor on the effective
date of the assignment designated below (the "Effective Date"), together with
unpaid fees accrued on the assigned Commitments to the Effective Date and unpaid
interest accrued on the assigned Loans to the Effective Date. Each of the
Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 11.3(b) of the
Credit Agreement, a copy of which has been received by the Assignee. From and
after the Effective Date (i) the Assignee, if it is not already a Lender under
the Credit Agreement, shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests purchased and assumed by
the Assignee under this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of
the interests sold and assigned by the Assignor under this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement.
2. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of North Carolina.
3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Commitment Percentage Assigned
(expressed as a percentage set forth
to at least 8 decimals) %
(f) Commitment Percentage of Assignee
after giving effect to this Assignment
and Acceptance as of the Effective
Date (set forth to at least 8 decimals) %
(g) Commitment Percentage of Assignor
after giving effect to this Assignment
and Acceptance as of the Effective
Date (set forth to at least 8 decimals) %
(h) Committed Amount
as of Effective Date $_____________
(i) Dollar Amount of Assignor's
Commitment Percentage as of the
Effective Date (the amount set forth in
(h) multiplied by the percentage
set forth in (g)) $_____________
(j) Dollar Amount of Assignee's
Commitment Percentage as of
the Effective Date (the amount
set forth in (h) multiplied by
the percentage set forth in (f)) $_____________
4. This Assignment and Acceptance shall be effective only upon consent of the
Borrower and the Agent, if applicable, delivery to the Agent of this Assignment
and Acceptance together with the transfer fee payable pursuant to Section
11.3(b) in connection herewith and recordation in the Register pursuant to
Section 11.3(d) of the terms hereof.
5. This Assignment and Acceptance may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Assignment and Acceptance to
produce or account for more than one such counterpart.
[The remainder of this page has been left blank intentionally.]
The terms set forth above are hereby agreed to:
____________________, as Assignor
By:
Name:
Title:
_____________________, as Assignee
By:
Name:
Title:
Notice address of Assignee:
{{Assignee}}
__________________________
__________________________
Attn: ____________________
Telephone: (___) ________
Telecopy: (___) ________
CONSENTED TO (IF REQUIRED BY THE TERMS OF SECTION 11.3(b)):
NATIONSBANK, N.A.,
as Agent
By:
Name:
Title:
ANCHOR ADVANCED PRODUCTS, INC.
By:
Name:
Title:
