1
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
Dated as of April 17, 1996
and amended and restated
as of July 27, 1998
among
CML GROUP, INC.,
NORDICTRACK, INC., NORDIC ADVANTAGE, INC.
AND XXXXX & XXXXXX, LTD.
AS BORROWERS
BANKBOSTON, N.A.
(F/K/A THE FIRST NATIONAL BANK OF BOSTON)
AND THE OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1 HERETO
AS LENDERS
and
BANKBOSTON, N.A.
(F/K/A THE FIRST NATIONAL BANK OF BOSTON),
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION.....................................
1.1. DEFINITIONS.........................................................
1.2. RULES OF INTERPRETATION.............................................
2. THE REVOLVING CREDIT FACILITIES.............................................
2.1. COMMITMENT TO LEND..................................................
2.1.1. COMMITMENT TO LEND NORDICTRACK LOANS......................
2.1.2. INTENTIONALLY OMITTED.....................................
2.1.3. COMMITMENT TO LEND S&H LOANS..............................
2.1.4. INTENTIONALLY OMITTED.....................................
2.1.5. OVERADVANCE FACILITY......................................
2.2. UNUSED LINE FEE.....................................................
2.3. REALLOCATION AND REDUCTION OF TOTAL COMMITMENT......................
2.3.1. REALLOCATION OF TOTAL COMMITMENT..........................
2.3.2. REDUCTION OF SUB-COMMITMENT...............................
2.3.3. MANDATORY REDUCTION OF TOTAL COMMITMENT...................
2.4. THE NOTES...........................................................
2.4.1. THE NORDICTRACK NOTES.....................................
2.4.2. INTENTIONALLY OMITTED.....................................
2.4.3. THE S&H NOTES.............................................
2.4.4. INTENTIONALLY OMITTED.....................................
2.5. INTEREST ON LOANS...................................................
2.6. REQUESTS FOR LOANS..................................................
2.6.1. LOAN REQUESTS.............................................
2.6.2. DAILY BORROWINGS..........................................
2.7. INTENTIONALLY OMITTED...............................................
2.7.1. INTENTIONALLY OMITTED.....................................
2.7.2. INTENTIONALLY OMITTED.....................................
2.7.3. INTENTIONALLY OMITTED.....................................
2.8. SETTLEMENT; FAILURE TO MAKE FUNDS AVAILABLE.........................
2.8.1. SETTLEMENT AND FUNDING PROCEDURES.........................
2.8.2. ADVANCES BY ADMINISTRATIVE AGENT..........................
2.8.3. FAILURE TO MAKE FUNDS AVAILABLE...........................
2.9. CHANGE IN BORROWING BASES...........................................
3. REPAYMENT OF THE LOANS......................................................
3.1. MATURITY............................................................
3.2. MANDATORY REPAYMENTS OF LOANS.......................................
3.2.1. NORDICTRACK LOANS.........................................
3.2.2. INTENTIONALLY OMITTED.....................................
3.2.3. S&H LOANS.................................................
3.2.4. REPAYMENTS FROM NET CASH PROCEEDS.........................
3.3. DEPOSITORY ARRANGEMENTS.............................................
3.3.1. THE BORROWERS' DEPOSITORY ARRANGEMENTS....................
3.3.2. CML'S DEPOSITORY ARRANGEMENTS.............................
3.3.3. THE OTHER GUARANTORS' DEPOSITORY ARRANGEMENTS.............
3.3.4. FEES AND EXPENSES; APPLICATION OF PAYMENT.................
3.4. OPTIONAL REPAYMENTS OF LOANS........................................
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4. LETTERS OF CREDIT...........................................................
4.1. LETTER OF CREDIT COMMITMENTS.......................................
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT....................
4.1.2. LETTER OF CREDIT APPLICATIONS............................
4.1.3. TERMS OF LETTERS OF CREDIT...............................
4.1.4. REIMBURSEMENT OBLIGATIONS OF LENDERS.....................
4.1.5. PARTICIPATIONS OF LENDERS................................
4.2. REIMBURSEMENT OBLIGATION OF CML AND THE BORROWERS..................
4.3. LETTER OF CREDIT PAYMENTS..........................................
4.4. OBLIGATIONS ABSOLUTE...............................................
4.5. RELIANCE BY ISSUER.................................................
5. CERTAIN GENERAL PROVISIONS..................................................
5.1. CLOSING FEE........................................................
5.2. ADMINISTRATIVE AGENT'S FEE.........................................
5.3. FUNDS FOR PAYMENTS.................................................
5.3.1. PAYMENTS TO ADMINISTRATIVE AGENT.........................
5.3.2. NO OFFSET, ETC...........................................
5.4. COMPUTATIONS.......................................................
5.5. INTENTIONALLY OMITTED..............................................
5.6. INTENTIONALLY OMITTED..............................................
5.7. ADDITIONAL COSTS, ETC..............................................
5.8. CAPITAL ADEQUACY...................................................
5.9. CERTIFICATE........................................................
5.10. INTENTIONALLY OMITTED..............................................
5.11. INTEREST AFTER DEFAULT.............................................
5.11.1. OVERDUE AMOUNTS.........................................
5.11.2. AMOUNTS NOT OVERDUE.....................................
6. COLLATERAL SECURITY AND GUARANTIES..........................................
6.1. SECURITY OF BORROWERS..............................................
6.2. GUARANTY, FOREIGN GUARANTIES AND SECURITY OF GUARANTORS............
7. GUARANTY....................................................................
7.1. GUARANTY OF PAYMENT AND PERFORMANCE................................
7.2. GUARANTORS' AGREEMENT TO PAY ENFORCEMENT COSTS, ETC................
7.3. WAIVERS BY THE GUARANTORS; LENDERS' FREEDOM TO ACT.................
7.4. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWERS..................
7.5. SUBROGATION; SUBORDINATION.........................................
7.5.1. POSTPONEMENT OF RIGHTS AGAINST BORROWERS.................
7.5.2. SUBORDINATION............................................
7.5.3. PROVISIONS SUPPLEMENTAL..................................
7.6. SECURITY; SETOFF...................................................
7.7. FURTHER ASSURANCES.................................................
7.8. TERMINATION........................................................
7.9. SUCCESSORS AND ASSIGNS.............................................
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8. REPRESENTATIONS AND WARRANTIES..............................................
8.1. CORPORATE AUTHORITY................................................
8.1.1. INCORPORATION; GOOD STANDING.............................
8.1.2. AUTHORIZATION............................................
8.1.3. ENFORCEABILITY...........................................
8.2. GOVERNMENTAL APPROVALS.............................................
8.3. TITLE TO PROPERTIES; LEASES........................................
8.4. FINANCIAL STATEMENTS AND PROJECTIONS...............................
8.4.1. FINANCIAL STATEMENTS.....................................
8.4.2. PROJECTIONS..............................................
8.5. NO MATERIAL CHANGES, ETC.; SOLVENCY................................
8.5.2. SOLVENCY................................................
8.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC...............................
8.7. LITIGATION.........................................................
8.8. NO MATERIALLY ADVERSE CONTRACTS, ETC...............................
8.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC.......................
8.10. TAX STATUS.........................................................
8.11. NO EVENT OF DEFAULT................................................
8.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS........................
8.13. ABSENCE OF FINANCING STATEMENTS, ETC...............................
8.14. PERFECTION OF SECURITY INTEREST....................................
8.15. CERTAIN AFFILIATE TRANSACTIONS.....................................
8.16. EMPLOYEE BENEFIT PLANS.............................................
8.16.1. IN GENERAL..............................................
8.16.2. TERMINABILITY OF WELFARE PLANS..........................
8.16.3. GUARANTEED PENSION PLANS................................
8.16.4. MULTIEMPLOYER PLANS.....................................
8.17. REGULATIONS U, X AND G.............................................
8.18. ENVIRONMENTAL COMPLIANCE...........................................
8.19. SUBSIDIARIES, ETC..................................................
8.20. BANK ACCOUNTS......................................................
8.21. CHIEF EXECUTIVE OFFICES............................................
8.22. FISCAL YEAR........................................................
8.23. DISCLOSURE.........................................................
8.24. INSURANCE..........................................................
8.25. EQUITY DOCUMENTS, WISCONSIN DOCUMENTS..............................
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9. AFFIRMATIVE COVENANTS OF CML AND THE BORROWERS..............................
9.1. PUNCTUAL PAYMENT...................................................
9.2. MAINTENANCE OF OFFICE..............................................
9.3. RECORDS AND ACCOUNTS...............................................
9.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION.................
9.5. NOTICES............................................................
9.5.1. DEFAULTS.................................................
9.5.2. ENVIRONMENTAL EVENTS.....................................
9.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL.................
9.5.4. NOTICE OF LITIGATION AND JUDGMENTS.......................
9.5.5. NOTICE OF TAX REFUNDS....................................
9.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES.....................
9.7. INSURANCE..........................................................
9.8. TAXES..............................................................
9.9. INSPECTION OF PROPERTIES AND BOOKS, ETC............................
9.9.1. GENERAL..................................................
9.9.5. ENVIRONMENTAL ASSESSMENTS................................
9.9.6. COMMUNICATIONS WITH ACCOUNTANTS..........................
9.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS.............
9.11. INVENTORY RESTRICTIONS.............................................
9.12. USE OF PROCEEDS....................................................
9.13. ADDITIONAL MORTGAGED PROPERTY......................................
9.14. AGENCY ACCOUNT AGREEMENTS..........................................
9.15. INVESTMENTS IN BORROWERS...........................................
9.16. OWNERSHIP OF SUBSIDIARIES..........................................
9.17. COLLATERAL NOTES...................................................
9.18. FURTHER ASSURANCES; ADDITIONAL LOCATIONS...........................
9.18.1. FURTHER ASSURANCES......................................
9.18.2. ADDITIONAL LOCATIONS....................................
9.19. FURTHER ASSURANCES AS TO TRUST.....................................
9.20. SALE OF S&H........................................................
10. CERTAIN NEGATIVE COVENANTS OF CML AND THE BORROWERS.........................
10.1 RESTRICTIONS ON INDEBTEDNESS.......................................
10.2 RESTRICTIONS ON LIENS..............................................
10.3 RESTRICTIONS ON INVESTMENTS........................................
10.4 DISTRIBUTIONS AND RESTRICTED PAYMENTS..............................
10.4.1. INTERCOMPANY DISTRIBUTIONS AND RESTRICTED PAYMENTS......
10.4.2. CML DISTRIBUTIONS.......................................
10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS....................
10.5.1. MERGERS AND ACQUISITIONS................................
10.5.2. DISPOSITION OF ASSETS...................................
10.6. SALE AND LEASEBACK.................................................
10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS.................................
10.8. SUBORDINATED DEBT..................................................
10.9. EMPLOYEE BENEFIT PLANS.............................................
10.10. BANK ACCOUNTS......................................................
10.11. TRANSACTIONS WITH AFFILIATES.......................................
10.12. RESTRICTIVE OR INCONSISTENT AGREEMENTS.............................
10.13. BUSINESS ACTIVITIES................................................
10.14. PRIVATE LABEL CREDIT CARD PROGRAMS.................................
10.15. ISSUANCE OF CAPITAL STOCK..........................................
10.16. WISCONSIN DOCUMENTS................................................
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11. FINANCIAL COVENANTS OF CML AND THE BORROWERS...............................
11.1. CAPITAL EXPENDITURES..............................................
11.2. MAXIMUM MONTHLY BORROWER EXPOSURE.................................
12. CLOSING CONDITIONS.........................................................
12.1. LOAN DOCUMENTS....................................................
12.2. CERTIFIED COPIES OF CHARTER DOCUMENTS.............................
12.3. CORPORATE ACTION..................................................
12.4. INCUMBENCY CERTIFICATE............................................
12.5. VALIDITY OF LIENS.................................................
12.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS....................
12.7. APPRAISALS; TAXES.................................................
12.8. TITLE INSURANCE...................................................
12.9. CERTIFICATES OF INSURANCE.........................................
12.10. AGENCY ACCOUNT AGREEMENTS.........................................
12.11. BORROWING BASE REPORT.............................................
12.12. ACCOUNTS RECEIVABLE AGING REPORT..................................
12.13. HAZARDOUS WASTE ASSESSMENTS.......................................
12.14. SOLVENCY CERTIFICATE..............................................
12.15. OPINION OF COUNSEL................................................
12.16. PAYMENT OF FEES...................................................
12.17. PAYOFF LETTER.....................................................
12.18. DISBURSEMENT INSTRUCTIONS.........................................
12.19. UPDATED COLLATERAL EXAMINATIONS...................................
12.20. LANDLORD LIEN WAIVERS.............................................
12.21. BORROWING AVAILABILITY............................................
13. CONDITIONS TO ALL BORROWINGS...............................................
13.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT.........................
13.2. NO LEGAL IMPEDIMENT...............................................
13.3. GOVERNMENTAL REGULATION...........................................
13.4. PROCEEDINGS AND DOCUMENTS.........................................
13.5. BORROWING BASE REPORT.............................................
14. EVENTS OF DEFAULT; ACCELERATION; ETC.......................................
14.1. EVENTS OF DEFAULT AND ACCELERATION................................
14.2. TERMINATION OF COMMITMENTS........................................
14.3. REMEDIES..........................................................
14.4. DISTRIBUTION OF COLLATERAL PROCEEDS...............................
15. SETOFF.....................................................................
16. THE ADMINISTRATIVE AGENT...................................................
16.1. AUTHORIZATION.....................................................
16.2. EMPLOYEES AND AGENTS..............................................
16.3. NO LIABILITY......................................................
16.4. NO REPRESENTATIONS................................................
16.5. PAYMENTS..........................................................
16.5.1. PAYMENTS TO ADMINISTRATIVE AGENT.......................
16.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT...................
16.5.3. DELINQUENT LENDERS.....................................
16.6. HOLDERS OF NOTES..................................................
16.7. INDEMNITY.........................................................
16.8. ADMINISTRATIVE AGENT AS LENDER....................................
16.9. RESIGNATION.......................................................
16.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT....................
16.11. DUTIES IN THE CASE OF ENFORCEMENT.................................
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17. EXPENSES...................................................................
18. INDEMNIFICATION............................................................
19. SURVIVAL OF COVENANTS, ETC.................................................
20. ASSIGNMENT AND PARTICIPATION...............................................
20.1. CONDITIONS TO ASSIGNMENT BY LENDERS...............................
20.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS....
20.3. REGISTER..........................................................
20.4. NEW NOTES.........................................................
20.5. PARTICIPATIONS....................................................
20.6. DISCLOSURE........................................................
20.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS.............
20.8. MISCELLANEOUS ASSIGNMENT PROVISIONS...............................
20.9. ASSIGNMENT BY BORROWERS OR GUARANTORS.............................
21. NOTICES, ETC...............................................................
22. GOVERNING LAW..............................................................
23. HEADINGS...................................................................
24. COUNTERPARTS...............................................................
25. ENTIRE AGREEMENT, ETC......................................................
26. WAIVER OF JURY TRIAL.......................................................
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.........................................
28. SEVERABILITY...............................................................
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SCHEDULES AND EXHIBITS
Schedule 1 Lenders and Commitments
Schedule 2 Permitted Inventory Locations
Schedule 2.1.5 Sub-Overadvance Amounts
Schedule 8.3 Title to Properties; Leases
Schedule 8.5 Distributions since Balance Sheet Date
Schedule 8.7 Litigation
Schedule 8.10 Tax Status
Schedule 8.18 Environmental Matters
Schedule 8.19 Subsidiaries; Joint Ventures
Schedule 8.20 Bank Accounts
Schedule 8.21 Chief Executive Offices
Schedule 8.24 Insurance
Schedule 10.1 Existing Indebtedness
Schedule 10.2 Existing Liens
Schedule 10.3 Existing Investments
Schedule 10.5.2 Assets to be Sold
Schedule 10.6 Sales and Leasebacks
Schedule 11.2 Maximum Monthly Borrower Exposure
Exhibit A-1 Form of NordicTrack Note
Exhibit A-2 Form of S&H Note
Exhibit B Form of Loan Request
Exhibit C Form of Borrowing Base Report
Exhibit D Form of Compliance Certificate
Exhibit E Form of Agency Account Agreement
Exhibit F Form of Landlord Waiver
Exhibit G Form of Assignment and Acceptance
Exhibit H-2 Form of Commitment Reallocation Request
Exhibit I Form of Supplement to Schedule 2
Annex A Monthly Budget
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AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
April 17, 1996 and restated as of July 27, 1998, by and among (a) CML GROUP,
INC., a Delaware corporation ("CML"), (b) NORDICTRACK, INC., a Minnesota
corporation ("NT"), NORDIC ADVANTAGE, INC., a Minnesota corporation ("NA" and,
on a consolidated basis with NT, "NORDICTRACK"), and XXXXX & HAWKEN, LTD., a
Delaware corporation ("S&H" and, together with NordicTrack, the "BORROWERS"),
(c) BANKBOSTON, N.A (f/k/a The First National Bank of Boston), a national
banking association ("BKB"), B III CAPITAL PARTNERS, L.P., a Delaware limited
partnership ("BIII"), MELLON BANK, N.A. solely in its capacity as trustee for
GENERAL MOTORS EMPLOYEES DOMESTIC GROUP PENSION TRUST, a trust ("GM"), and the
other lending institutions that may become Lenders hereunder, and (d) BKB as
administrative, collateral and documentation agent for the Lenders (the
"ADMINISTRATIVE AGENT").
RECITALS
CML, the Borrowers, certain of their Subsidiaries, BKB and BIII
(collectively, the "EXISTING LENDERS"), and the Administrative Agent are party
to a Revolving Credit Agreement, dated as of April 17, 1996, and amended and
restated as of August 28, 1997, and as further amended as of March 11, 1998, as
of March 30, 1998 and as of April 1, 1998, as supplemented as of June 15, 1998,
and as amended as of July 10, 1998, as of July 13, 1998, and as of July 15, 1998
(as amended, restated and supplemented, the "EXISTING CREDIT AGREEMENT")
pursuant to which the Existing Lenders made Loans and issued Letters of Credit
to the Borrowers (the "EXISTING CREDIT EXTENSIONS").
The Borrowers and CML have requested the Lenders and the
Administrative Agent to amend and restate the Existing Credit Agreement in its
entirety to, among other things,
(a) increase the Total Commitment;
(b) increase the Maximum Overadvance Amount;
(c) revise the interest rate provisions applicable to the
Loans;
(d) revise certain of the financial covenants set forth in
ss.11 of the Existing Credit Agreement; and
(e) make certain other changes to the terms and provisions of
the Existing Credit Agreement.
The Existing Lenders and the Administrative Agent are willing, on the
terms set forth in this Agreement and subject to the conditions and in reliance
on the representations set forth herein, to amend and restate the Existing
Credit Agreement so as to accomplish the foregoing.
Accordingly, in consideration of the premises and the mutual
agreements herein contained, the parties hereto hereby agree that, from and
after the Restatement Effective Date, the Existing Credit Agreement (including
all the SCHEDULES, EXHIBITS and ANNEXES thereto) is amended and restated in its
entirety to read as set forth above and as follows (and, in the case of the
SCHEDULES, EXHIBITS and ANNEXES, in the forms attached hereto). All Loans made
and Letters of Credit issued under the Existing Credit Agreement shall continue
as Loans and Letters of Credit under this Credit Agreement and shall be governed
by this Credit Agreement and secured by all the Collateral.
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DEFINITIONS AND RULES OF INTERPRETATION.
1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred
to below:
ACCOUNTS PAYABLE. At any time with respect to any Person, the
aggregate accounts payable of such Person and its Subsidiaries determined in
accordance with generally accepted accounting principles.
ACCOUNTS RECEIVABLE. All rights of any of the Borrowers to payment
for goods sold, leased or otherwise marketed in the ordinary course of business
and all rights of any of the Borrowers to payment for services rendered in the
ordinary course of business and all sums of money or other proceeds due thereon
pursuant to transactions with account debtors, except for that portion of the
sum of money or other proceeds due thereon that relate to sales, use or property
taxes in conjunction with such transactions, recorded on books of account in
accordance with generally accepted accounting principles.
ACCRUED EXPENSES. At any time with respect to any Person, the
aggregate accrued expenses of such Person and its Subsidiaries determined in
accordance with generally accepted accounting principles.
ADMINISTRATIVE AGENT. As defined in the preamble hereto.
ADMINISTRATIVE AGENT'S HEAD OFFICE. The Administrative Agent's head
office located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such
other location as the Administrative Agent may designate from time to time.
ADMINISTRATIVE AGENT'S SPECIAL COUNSEL. Xxxxxxx Xxxx LLP or such
other counsel as may be approved by the Administrative Agent.
AFFILIATE. With respect to any Person (a) any Person which directly,
or indirectly, controls or is controlled by, or is under common control with,
the Person specified, or (b) any other Person who is a Relative, director,
officer or general partner of such Person or of any Person described in clause
(a). For purposes of this definition, control of a Person shall include the
power, whether direct or indirect, (x) to vote five percent (5%) or more of the
equity securities having ordinary voting power for the election of directors or
other managers of such Person or (y) to direct or cause the direction, of the
management and policies of such Person whether by contract or otherwise.
AEI CORP. See ss.10.1(n).
AGENCY ACCOUNT AGREEMENTS. The several Agency Account Agreements in
the form of EXHIBIT E hereto (or a form otherwise approved by the Administrative
Agent in its sole discretion) entered into by any of the Borrowers, any of the
Guarantors, the Administrative Agent and the Agency Account Institutions or
other depository institutions satisfactory to the Administrative Agent.
AGENCY ACCOUNT INSTITUTIONS. NorWest Bank Minnesota, N.A., Fifth
Third Bank and any other financial institutions which receive deposits directly
or indirectly (as a result of interim concentration of depository accounts),
from an aggregate eight or more retail stores of the Borrowers and their
Subsidiaries.
AGENCY ACCOUNTS. The depository accounts maintained by the Borrowers
and the Guarantors with the Agency Account Institutions or other depository
institutions satisfactory to the Administrative Agent, the funds from which are
periodically transferred to the applicable Concentration Account pursuant to the
Agency Account Agreements.
AGGREGATE BORROWING BASE. The sum of the NordicTrack Borrowing Base
and the S&H Borrowing Base.
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AMENDMENT AGREEMENT. The Amendment Agreement, dated as of July 27,
1998, among the parties to the Existing Credit Agreement.
AMENDMENT NO. 1 TO COMMON STOCK PURCHASE WARRANT. Amendment No. 1 to
Common Stock Purchase Warrant, dated as of the Restatement Effective Date,
between CML and BKB.
AMENDMENT NO. 1 TO CREDIT AGREEMENT. Amendment No. 1 to Credit
Agreement and Limited Waiver, dated as of March 11, 1998, among CML, the
Borrowers, the Lenders, the Issuing Bank and the Administrative Agent.
APPROVED BUDGETED EXPENSES. Expenses incurred by CML in the ordinary
course of business for itself or for the benefit of any of the Borrowers or
their Subsidiaries, in each case which were previously included in the
applicable CML Budget or, in the case of expenses incurred for the benefit of
any of the Borrowers or their Subsidiaries, in the Monthly Budget, prepared in
each case by CML and submitted to and approved by the Majority Lenders.
ASSIGNMENT AND ACCEPTANCE. See ss.20.1.
BALANCE SHEET DATE. July 31, 1997, the date of the most recent
audited financial statements of CML and its Subsidiaries, as of the Restatement
Effective Date.
BASE RATE. The higher of (i) the annual rate of interest announced
from time to time by BKB at its head office in Boston, Massachusetts, as its
"base rate" and (ii) one-half of one percent (0.50%) above the Federal Funds
Effective Rate. For the purposes of this definition, "FEDERAL FUNDS EFFECTIVE
RATE" shall mean for any day, the rate per annum 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, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day that is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three funds brokers of
recognized standing selected by the Administrative Agent.
BKB. As defined in the preamble hereto.
BORROWER EXPOSURE. At any time with respect to any Borrower, the sum
of (a) the outstanding amount of Loans made to such Borrower PLUS (b) the
aggregate Letter of Credit Exposure of such Borrower.
BORROWERS. As defined in the preamble hereto.
BORROWING BASE. The NordicTrack Borrowing Base and the S&H Borrowing
Base.
BORROWING BASE REPORT. A Borrowing Base Report signed by the chief
financial officer of CML in substantially the form of EXHIBIT C hereto.
BIII. As defined in the preamble hereto.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
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CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by any
Person or any of its Subsidiaries in connection with the purchase or lease by
any such Person or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles.
CAPITALIZED LEASES. Leases under which CML or any of its Subsidiaries
is the lessee or obligor, the discounted future rental payment obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with generally accepted accounting principles.
CAPITAL STOCK. Any shares, interests, participations, rights or other
equivalents (howsoever designated) of capital stock of a corporation (including
common or preferred stock) or any equivalent ownership interests in a Person
other than a corporation.
CERCLA. See ss.8.18.
CHANGE IN CONTROL. Any person or group of persons (within the meaning
of Section 13 or 14 of the Securities Exchange Act of 1934, as amended) shall
have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated
by the Securities and Exchange Commission under said Act) of thirty percent
(30%) or more of the outstanding shares of common stock of CML; or, during any
period of twelve (12) consecutive calendar months, a majority of the seats
(other than vacant seats) on the board of directors of CML shall at any time be
occupied by Persons other than (i) directors on the Original Closing Date or
(ii) directors initially nominated or appointed by action of a majority of CML's
directors.
CITIBANK. Citibank, N.A., in its capacity as agent for the lenders
under the Citibank Facility.
CITIBANK FACILITY. The revolving credit facility among CML, certain
lenders party thereto and Citibank as agent for such lenders.
CLOSING DATE. The first date on which the conditions set forth
in ss.12 have been satisfied and any Loans are to be made or any Letter of
Credit is to be issued hereunder.
CML. As defined in the preamble hereto.
CML BUDGETS. Each of the monthly operating budget of CML for each of
the months of July 1998 through July 1999 delivered to the Administrative Agent
and the Lenders prior to the Restatement Effective Date.
CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of CML and its
Subsidiaries that are or are intended to be subject to the security interests
and mortgages created by the Security Documents.
COLLATERAL AGENCY AGREEMENT. The Collateral Agency and Intercreditor
Agreement, dated as of the date hereof, between BKB, Wisconsin, CML, the
Borrowers, the Guarantors and the Foreign Guarantors, in form and substance
satisfactory to the Lenders and the Administrative Agent.
COLLATERAL AGENT. BKB, as collateral agent under the Collateral
Agency Agreement.
COLLATERAL NOTES. Any promissory notes issued by one or more of the
Borrowers in favor of BKB as agent under such notes, executed and delivered
pursuant to ss.9.17, and assigned to the Administrative Agent, each of which
such notes shall be secured by one of the Mortgages.
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COMMITMENT. With respect to each Lender, the amount set forth on
SCHEDULE 1 hereto as the amount of such Lender's commitment to make Loans to,
and to participate in the issuance, extension and renewal of Letters of Credit
for the account of, the Borrowers, as the same may be reduced from time to time;
or if such commitment is terminated pursuant to the provisions hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Lender, the percentage
set forth on SCHEDULE 1 hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders.
COMMITMENT REALLOCATION DATE. The date on which any reallocation of
the Sub-Commitments among the Borrowers is made or is to be made by CML in
accordance with ss.2.3.1.
COMMITMENT REALLOCATION REQUEST. See ss.2.3.1.
COMPLIANCE CERTIFICATE. See ss.9.4(d).
CONCENTRATION ACCOUNT. With respect to any Borrower or any Guarantor,
such Borrower's or such Guarantor's, as the case may be, depository account with
BKB under the control of the Administrative Agent for the benefit of the Lenders
and the Administrative Agent.
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of a Person and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
CONSOLIDATED ADJUSTED NET INCOME. With respect to any Person and its
Subsidiaries, for any period, an amount equal to consolidated net income for
such period, after deduction of all expenses, taxes and other proper charges,
determined in accordance with generally accepted accounting principles and after
eliminating therefrom all extraordinary nonrecurring items of income including,
without limitation (a) income from unusual transactions, (b) income from the
sale of Capital Assets and (c) income from the write-up in the book value of any
assets of such Person or its Subsidiaries; PROVIDED, HOWEVER, for the purposes
of determining Consolidated Adjusted Net Income, it shall include the estimated
deferred tax benefits for prior and current period losses which CML has been
including since the Original Closing Date regardless of whether or not generally
accepted accounting principles would permit such inclusion in the computation of
Consolidated Adjusted Net Income.
CONSOLIDATED EBITDA. With respect to any Person and its Subsidiaries,
for any period, Consolidated Adjusted Net Income plus, to the extent deducted in
determining Consolidated Adjusted Net Income, the sum of interest, taxes,
depreciation and amortization of such Person and its Subsidiaries for such
period on a consolidated basis, all determined in accordance with generally
accepted accounting principles.
CONSOLIDATED TANGIBLE NET WORTH. With respect to any Person, the
excess of Consolidated Total Assets over Consolidated Total Liabilities, and
less the sum of:
(a) the total book value of all assets of such Person and its
Subsidiaries properly classified as intangible assets under generally
accepted accounting principles, including such items as good will,
the purchase price of acquired assets in excess of the fair market
value thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the
foregoing; PLUS
(b) all amounts representing any write-up in the book value of
any assets of such Person or its Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date; PLUS
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(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any subscriptions receivable
relating to Capital Stock.
CONSOLIDATED TOTAL ASSETS. All assets of a Person and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles; PROVIDED, HOWEVER, for the purposes of
determining Consolidated Total Assets, it shall include the estimated deferred
tax benefits for prior and current period losses which CML has been including
since the Original Closing Date regardless of whether or not generally accepted
accounting principles would permit such inclusion in the computation of
Consolidated Total Assets.
CONSOLIDATED TOTAL INTEREST EXPENSE. With respect to any Person for
any period, the aggregate amount of interest required to be paid or accrued by
such Person and its Subsidiaries during such period on all Indebtedness of such
Person and its Subsidiaries outstanding during all or any part of such period,
whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in respect of
Capitalized Leases and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money, PROVIDED that Consolidated Total Interest Expense shall not
include amortization of fees and expenses paid in connection with the
transactions contemplated by the Credit Agreement.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of a Person and its
Subsidiaries determined on a consolidated basis that in accordance with
generally accepted accounting principles should be classified upon the obligor's
balance sheet as liabilities.
CONTROLLED DISBURSEMENT ACCOUNT. With respect to any Borrower or CML,
such Borrower's or CML's, as the case may be, controlled disbursement account
with BKB, listed on SCHEDULE 8.20 hereto.
COPYRIGHT MORTGAGE. The Memorandum of Copyrights, dated as of the
Original Closing Date, made by the Borrowers and the Guarantors in favor of the
Administrative Agent, as amended by the First Amendment to Copyright Mortgage
and the Second Amendment to Copyright Mortgage, and in form and substance
satisfactory to the Lenders and the Administrative Agent.
CREDIT AGREEMENT. This Amended and Restated Revolving Credit
Agreement, including the Schedules, Exhibits and Annexes hereto.
DEFAULT. See ss.14.1.
DELINQUENT LENDER. See ss.16.5.3.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of Capital Stock of a Person, other than
dividends payable solely in shares of common stock or similar non-preferred
equity interests of such Person; the purchase, redemption, or other retirement
of any shares of any class of Capital Stock or other equity interests of a
Person, directly or indirectly through a Subsidiary of such Person or otherwise;
the return of capital by a Person to its shareholders or equity holders as such;
or any other distribution on or in respect of any shares of any class of Capital
Stock or other equity interest of such Person.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC LENDING OFFICE. Initially, the office of each Lender
designated as such in SCHEDULE 1 hereto; thereafter, such other office of such
Lender, if any, located within the United States that will be making or
maintaining Loans.
DRAWDOWN DATE. The date on which any Loan is made or is to be made.
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ELIGIBLE ACCOUNTS RECEIVABLE. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (i) that such Borrower reasonably and in good faith
determines to be collectible; (ii) that are with account debtors that (A) are
not Affiliates of CML or any of its Subsidiaries, (B) purchased the goods or
services giving rise to the relevant Account Receivable in an arm's length
transaction, (C) are not insolvent or the subject of any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction and (D) are, in the Administrative Agent's reasonable
judgment, creditworthy; (iii) that are in payment of obligations that have been
fully performed and are not subject to dispute or any other similar claims that
would reduce the cash amount payable therefor; (iv) that are not subject to any
pledge, restriction, security interest or other lien or encumbrance other than
those created by the Loan Documents; (v) in which the Administrative Agent has a
valid and perfected first priority security interest; (vi) that are not
outstanding for more than (A) sixty (60) days past the date payment thereof is
due or (B) ninety (90) days past the earlier to occur of (x) the date of the
respective invoices therefor and (y) the date of shipment therefor in the case
of goods or the end of the calendar month following the provision thereof in the
case of services; (vii) that are not due from an account debtor located in
Indiana, Minnesota or New Jersey unless such Borrower (A) has received a
certificate of authority to do business and is in good standing in such state or
(B) has filed a notice of business activities report with the appropriate office
or agency of such state for the current year; (viii) that are not due from any
single account debtor if more than twenty-five percent (25%) of the aggregate
amount of all Accounts Receivable owing from such account debtor would otherwise
not be Eligible Accounts Receivable (after applying co-op advertising credits,
if any, to the balances more than sixty (60) days past the date payment thereof
is due); (ix) that are payable in Dollars; (x) that are not payable from an
office outside of the United States or Canada; (xi) that are not secured by a
letter of credit unless the Administrative Agent has a prior, perfected security
interest in such letter of credit; (xii) that are not "xxxx-and-hold",
guaranteed sale, sale-or-return, sale on approval or consignment basis
receivables; (xiii) that are not receivables arising under any Private Label
Credit Card Program or any other credit card receivables; (xiv) that are not due
from any single account debtor (other than American Express Company, Sears
Xxxxxxx and Company and Target Stores, a division of Xxxxxx Xxxxxx Corporation
if and to the extent that, after inclusion of such Account Receivable in
Eligible Accounts Receivable, the aggregate amount of Eligible Accounts
Receivable owing from such account debtor would exceed twenty percent (20%) of
the aggregate amount of all Eligible Accounts Receivable; (xv) in the case of
NordicTrack, that are not due from NorWest Bank Minnesota, N.A.; and (xvi) in
the case of S&H, that do not arise from the sale of mailing lists or are due
from Felissimo Corporation.
ELIGIBLE ASSIGNEE. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) any other
bank, insurance company, commercial finance company or other financial
institution or other Person approved by the Administrative Agent, such approval
not to be unreasonably withheld and to be based only on the creditworthiness of
the potential assignee and the Administrative Agent's satisfaction that such
potential assignee's obligations hereunder will be enforceable.
ELIGIBLE INVENTORY. With respect to S&H, finished goods owned by such
Borrower; PROVIDED that Eligible Inventory shall not include any inventory (i)
held on consignment, or not otherwise owned by such Borrower, or of a type no
longer sold by such Borrower; (ii) which has been returned by a customer or is
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damaged or subject to any legal encumbrance other than Permitted Liens; (iii)
which is not in the possession of such Borrower unless (A) such inventory is
subject to a documentary letter of credit issued by a lender approved by the
Administrative Agent and the Administrative Agent has possession of and a first
priority, perfected security interest in the documents of title relating to such
inventory, (B) such inventory is in transit from one Permitted Inventory
Location of such Borrower within the United States of America to another
Permitted Inventory Location of such Borrower within the United States of
America or (C) the aggregate gross book value of such inventory does not exceed
$6,000,000 with respect to inventory located at such Borrower's distribution
center and warehouse located at 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx and
operated by The Discovery Channel Store, Inc. pursuant to the Cooperation and
Services Agreement between The Discovery Channel Store, Inc. and such Borrower,
and $1,750,000 with respect to all other inventory locations and the
Administrative Agent has received (x) a waiver in form and substance
satisfactory to the Administrative Agent from the possessor of such inventory,
(y) financing statements in form and substance satisfactory to the
Administrative Agent executed and delivered by such Borrower as secured
party/xxxxxx and the possessor of such inventory as debtor/bailee, for filing in
the appropriate jurisdictions PROVIDED, HOWEVER, that the Administrative Agent
may, with the consent of the Majority Lenders, waive the foregoing requirement
with respect to financing statements, and (z) an assignment in form and
substance satisfactory to the Administrative Agent by the secured party/xxxxxx
to the Administrative Agent of the aforementioned financing statements; (iv) in
which the Administrative Agent does not have a valid and perfected first
priority security interest; (v) which has been shipped to a customer of such
Borrower regardless of whether such shipment is on a consignment basis; (vi)
which is not located at a Permitted Inventory Location of such Borrower within
the United States of America, unless (A) such inventory is subject to a
documentary letter of credit issued by a lender approved by the Administrative
Agent and the Administrative Agent has possession of and a first priority,
perfected security interest in the documents of title relating to such inventory
or (B) such inventory is in transit from one Permitted Inventory Location of
such Borrower within the United States of America to another Permitted Inventory
Location of such Borrower within the United States of America; (vii) which the
Majority Lenders reasonably deem to be obsolete or not marketable; (viii) which
is located in California unless the Administrative Agent has received a legal
opinion in form and substance satisfactory to the Administrative Agent that the
Loan Documents comply with the provisions of ss.9102(5)(b) of the Uniform
Commercial Code as in effect in California, or (ix) which consists of live
plantings.
ELIGIBLE NORDICTRACK INVENTORY. With respect to NordicTrack, finished
goods owned by NordicTrack; PROVIDED that Eligible NordicTrack Inventory shall
not include any inventory (i) consisting of work-in-progress or raw materials;
(ii) held on consignment, or not otherwise owned by NordicTrack, or of a type no
longer sold by NordicTrack; (iii) which has been returned by a customer or is
damaged or subject to any legal encumbrance other than Permitted Liens; (iv)
which is not in the possession of NordicTrack unless (A) such inventory is
subject to a documentary letter of credit issued by a lender approved by the
Administrative Agent and the Administrative Agent has possession of and a first
priority, perfected security interest in the documents of title relating to such
inventory, (B) such inventory is in transit from one Permitted Inventory
Location of NordicTrack within the United States of America to another Permitted
Inventory Location of NT or NA, as applicable, within the United States of
America or (C) the aggregate gross book value of such inventory does not exceed
$4,250,000 and the Administrative Agent has received (x) a waiver in form and
substance satisfactory to the Administrative Agent from the possessor of such
inventory, (y) financing statements in form and substance satisfactory to the
Administrative Agent executed and delivered by NT or NA, as applicable, as
secured party/xxxxxx and the possessor of such inventory as debtor/bailee, for
filing in the appropriate jurisdictions PROVIDED, HOWEVER, that the
Administrative Agent may, with the consent of the Majority Lenders, waive the
foregoing requirement with respect to financing statements, and (z) an
assignment in form and substance satisfactory to the Administrative Agent by the
secured party/xxxxxx to the Administrative Agent of the aforementioned financing
statements; (v) in which the Administrative Agent does not have a valid and
perfected first priority security interest; (vi) which has been shipped to a
customer of NordicTrack regardless of whether such shipment is on a consignment
basis; (vii) which is not located at a Permitted Inventory Location of NT or NA,
as applicable, within the United States of America, unless (A) such inventory is
subject to a
17
documentary letter of credit issued by a lender approved by the Administrative
Agent and the Administrative Agent has possession of and a first priority,
perfected security interest in the documents of title relating to such inventory
or (B) such inventory is in transit from one Permitted Inventory Location of NT
or NA, as applicable, within the United States of America to another Permitted
Inventory Location of NT or NA, as applicable, within the United States of
America; (viii) which the Majority Lenders reasonably deem to be obsolete or not
marketable or (ix) which is located in California unless the Administrative
Agent has received a legal opinion in form and substance satisfactory to the
Administrative Agent that the Loan Documents comply with the provisions of
ss.9102(5)(b) of the Uniform Commercial Code as in effect in California.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning
of ss.3(3) of ERISA maintained or contributed to by CML, any of the Borrowers,
or any ERISA Affiliate, other than a Multiemployer Plan.
ENVIRONMENTAL LAWS. See ss.8.18(a).
EQUITY DOCUMENTS. Collectively, (a) the Stock Purchase Agreement, (b)
the Registration Rights Agreement, (c) the Amendment No. 1 to Common Stock
Purchase Warrant, (d) the Warrant Purchase Agreement, and (e) the Warrants.
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer
with CML or any of the Borrowers under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of ss.4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has not
been waived.
EVENT OF DEFAULT. See ss.14.1.
EXISTING CREDIT AGREEMENT. As defined in the Recitals.
EXISTING LENDERS. As defined in the Recitals.
EXISTING LETTERS OF CREDIT. See ss.4.7.
FEE LETTER. The letter agreement, dated as of the Restatement
Effective Date, among CML, the Borrowers, the Administrative Agent, BKB and
BIII.
FIRST AMENDMENT TO COPYRIGHT MORTGAGE. Amendment No. 1 to the
Memorandum of Grant of Security Interest in Copyrights, dated as of February 27,
1998, among CML, the Borrowers, the Guarantors and the Administrative Agent and
in form and substance satisfactory to the Lenders and the Administrative Agent.
FIRST AMENDMENT TO SECURITY DOCUMENTS AGREEMENT. First Amendment to
Security Documents Agreement, dated as of the Restatement Effective Date, among
CML, the Borrowers, the Guarantors and the Administrative Agent and in form and
substance satisfactory to the Lenders and the Administrative Agent.
FISCAL AGENCY AGREEMENT. The Fiscal Agency Agreement dated as of
January 20, 1993 between CML and Chemical Bank (now known as The Chase Manhattan
Bank), as fiscal agent.
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FOREIGN GUARANTIES. The several foreign subsidiary guaranties, as
amended by the First Amendment to Security Documents, made by each of the
Foreign Guarantors in favor of the Administrative Agent pursuant to which each
Foreign Guarantor guaranties to the Administrative Agent for the benefit of the
Lenders and the Administrative Agent the payment and performance of the
Obligations.
FOREIGN GUARANTORS. CML International (FSC), Ltd., The Nature Company
Limited, NordicTrack (U.K.) Ltd., NordicTrack GmbH and Nordic Advantage of
Ontario, Inc.
FOREIGN PLEDGE AGREEMENT. Collectively, (a) the share pledge
agreement dated as of April 24, 1996 among NT and the Lenders pledging the
shares of NordicTrack GmbH, (b) the charge over securities dated as of April 29,
1996 between The Nature Company (now known as OTNC, Inc.) and the Administrative
Agent pledging the securities of The Nature Company Limited and (c) the charge
over securities dated as of April 29, 1996 between NT and the Administrative
Agent, pledging the securities of NordicTrack (U.K.) Ltd., in each case as
amended by the First Amendment to Security Documents, and in form and substance
satisfactory to the Lenders and the Administrative Agent.
GE CAPITAL CREDIT CARD PROGRAM. The credit card program made
available to customers of NordicTrack in accordance with the GE Capital Credit
Card Program Agreement.
GE CAPITAL CREDIT CARD PROGRAM AGREEMENT. The Account Purchase and
Consumer Credit Card Program Agreement, dated as of December 10, 1996, among
General Electric Capital Corporation and NordicTrack.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (i) When used in ss.11,
whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent consistent with such principles, the accounting practice of
CML and the Borrowers reflected in their financial statements for the year ended
on the Balance Sheet Date, and (ii) when used in general, other than as provided
above, means principles that are (A) consistent with the principles promulgated
or adopted by the Financial Accounting Standards Board and its predecessors, as
in effect from time to time, and (B) consistently applied with past financial
statements of CML and the Borrowers adopting the same principles, provided that
in each case referred to in this definition of "GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
GM. As defined in the preamble hereto.
XXXXXX XXXXXXXX REPORT. The Xxxxxx Xxxxxxxx Partners, Inc. Inventory
Valuation and Review Report dated in May 1997 relating to the Borrowers'
inventory, or any subsequent appraisal thereof prepared in a manner consistent
with such report and in form and substance satisfactory to the Administrative
Agent.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by CML or any of the
Borrowers or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
GUARANTORS. CML, each Borrower and the direct and indirect
Subsidiaries of CML listed on the signature pages hereto as Guarantors.
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GUARANTY. The Guaranty made by each of the Guarantors in favor of the
Lenders and the Administrative Agent pursuant to ss.7 hereof, pursuant to which
each Guarantor guaranties to the Lenders and the Administrative Agent the
payment and performance of the Obligations.
HAZARDOUS SUBSTANCES. See ss.8.18(b).
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (i) all debt and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (iii) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
INITIAL LENDERS. BIII, BKB and GM.
INTERCOMPANY SUBORDINATION AGREEMENT. The Intercompany Subordination
Agreement, dated as of the Original Closing Date, among CML, the Borrowers, and
their Subsidiaries and in form and substance satisfactory to the Lenders and the
Administrative Agent.
INTERCREDITOR AGREEMENT. The Intercreditor Agreement, dated as of the
Restatement Effective Date, between CML, the Borrowers, the Guarantors, the
Foreign Guarantors, Wisconsin and the Administrative Agent and in form and
substance satisfactory to the Lenders and the Administrative Agent.
INTEREST PAYMENT DATE. As to any Loan, the first day after the last
day of the Interest Period with respect thereto, beginning with the first such
day after the Restatement Effective Date.
INTEREST PERIOD. With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of the
calendar month, and (ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Loan and ending on the
last day of the calendar month, PROVIDED that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(a) if any Interest Period with respect to a Loan would end on
a day that is not a Business Day, that Interest Period shall end on
the next succeeding Business Day;
(b) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution);
20
(iv) there shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends, interest or
otherwise, except that accrued interest included as provided in the foregoing
clause (ii) may be deducted when paid; and (v) there shall not be deducted from
the aggregate amount of Investments any decrease in the value thereof.
ISSUING BANK. With respect to any Letter of Credit, BKB and any
successor Issuing Bank.
KEY MAN LIFE INSURANCE POLICIES. Collectively, (i) the life insurance
policy issued on the life of Xxxxxxx X. Xxxxxxxx for the benefit of CML in the
face amount of $400,000 by The New England Mutual Life Insurance Company, Life
Policy number 8698540, (ii) the life insurance policy issued on the life of
Xxxxxxx X. Xxxxxxxx for the benefit of CML in the face amount of $800,000 by The
New England Mutual Life Insurance Company, Life Policy number 8672183, (iii) the
life insurance policy issued on the life of G. Xxxxxx Xxx for the benefit of CML
in the face amount of $408,000 by The New England Mutual Life Insurance Company,
Life Policy number 8698541, and (iv) the life insurance policy issued on the
life of G. Xxxxxx Xxx for the benefit of CML in the face amount of $800,000 by
The New England Mutual Life Insurance Company, Life Policy number 8672184.
KIOSK. Any temporary seasonal lease (not in excess of twelve (12)
months in any event) by any Borrower of space provided that not more than
$50,000 of Capital Expenditures may be expended by CML and its Subsidiaries in
respect of any one kiosk.
LANDLORD LIEN RESERVE. With respect to any Eligible Inventory or
Eligible NordicTrack Inventory which is located at a premises subject to a
Specified Lease, the Landlord Lien Reserve shall be the lesser of (a) the sum of
(i) all rent past due for more than thirty (30) days under such Specified Lease
at such time and (ii) all rent which may become due under such Specified Lease
during the twelve (12) month period commencing at the Original Closing Date, in
each case, unless otherwise requested by the Administrative Agent, calculated on
June 17, 1996 and at the end of each fiscal quarter thereafter by reference to
the average monthly rent on such Specified Lease during the immediately
preceding calendar year and (b) the net book value (determined on a first-in
first-out basis at lower of cost or market) of such Eligible Inventory or
Eligible NordicTrack Inventory.
LANDLORD WAIVER. A waiver from the lessor or sublessor of property
leased by any of the Borrowers as lessee in substantially the form of EXHIBIT F
hereto or otherwise approved by the Administrative Agent in its sole discretion.
LENDERS. BIII, GM and BKB, and any other Person who becomes a Lender
pursuant to ss.20.
LENDER REPRESENTATIVE. See ss.9.9.7.
LETTER OF CREDIT. See ss.4.1.1.
LETTER OF CREDIT APPLICATION. See ss.4.1.1.
LETTER OF CREDIT EXPOSURE. At any time, and with respect to any
Borrower or CML, the sum of (a) the Maximum Drawing Amount with respect to all
Letters of Credit issued at the request of such Borrower or, in the case of CML,
any Borrower and (b) all Unpaid Reimbursement Obligations of such Borrower or,
as the case may be, CML.
LETTER OF CREDIT PARTICIPATION. See ss.4.1.4.
LIFE INSURANCE COLLATERAL ASSIGNMENTS. The collateral assignments of
the Key Man Life Insurance Polices executed and delivered by CML to the
Administrative Agent.
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LOAN DOCUMENTS. This Credit Agreement, the Notes, the Letter of
Credit Applications, the Letters of Credit, the Fee Letter, the Intercompany
Subordination Agreement, the Amendment Agreement, the Intercreditor Agreement,
the Collateral Agency Agreement and the Security Documents.
LOAN REQUEST. See ss.2.6.1.
LOANS. The NordicTrack Loans and the S&H Loans.
MAJORITY LENDERS. As of any date, the Lenders (excluding any
Delinquent Lenders) holding at least fifty-one percent (51%) of the outstanding
principal amount of the Notes on such date; and if no such principal is
outstanding, the Lenders (excluding any Delinquent Lenders) whose aggregate
Commitments constitutes at least fifty-one percent (51%) of the Total
Commitment.
MATURITY DATE. August 1, 1999.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
MAXIMUM OVERADVANCE AMOUNT. $49,896,000.
MONOGRAM CREDIT CARD PROGRAM. The credit card program made available
to customers of NordicTrack pursuant to the Monogram Credit Card Program
Agreement.
MONOGRAM CREDIT CARD PROGRAM AGREEMENT. The Consumer Credit Card
Program Agreement dated as of November 29, 1995 among Monogram Credit Card Bank
of Georgia and NordicTrack as amended prior to the Restatement Effective Date in
the form delivered to the Administrative Agent on or prior to the Restatement
Effective Date.
MONTHLY BUDGET. The monthly operating budget of CML and its
Subsidiaries for the period from July 1, 1998 through July 31, 1999 delivered to
the Administrative Agent and the Lenders on or prior to the Restatement
Effective Date and attached as ANNEX A hereto, such Monthly Budget including a
report of each Borrower's projected monthly outstandings (including Loans and
Letter of Credit Exposure), Overadvances, Borrowing Base availability, Accounts
Payable and Accrued Expenses.
MORTGAGED PROPERTY. Any Real Estate which is subject to any Mortgage.
MORTGAGES. Collectively (a) the Mortgage Deeds, Assignments of Leases
and Security Agreements dated as of the Original Closing Date, from NordicTrack
to BKB as agent under the Collateral Note and assigned to the Administrative
Agent in accordance with the terms and provisions of (i) that certain Pledge
Agreement dated as of the Original Closing Date by and among NT, BKB as agent
and the Administrative Agent and (ii) that certain Assignment of Mortgage dated
as of the Original Closing Date by and between BKB as agent and the
Administrative Agent, with respect to the fee interest of NordicTrack in its
owned real properties, in each case in form and substance satisfactory to the
Administrative Agent and (b) such other mortgages and deeds of trust from any of
the Borrowers or Guarantors to the Administrative Agent, or amendments or
restatements thereof, which have been executed and delivered to the
Administrative Agent or which are required to be executed or delivered to the
Administrative Agent pursuant to ss.9.13 or ss.9.18 or Amendment No. 1 to
Credit Agreement.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by CML, any of the Borrowers or
any ERISA Affiliate.
NA. As defined in the preamble hereto.
22
NT. As defined in the preamble hereto.
NT SPIN-OFF. See ss.10.4.2.
NET CASH PROCEEDS. With respect to any (a) sale of any assets
(including Capital Stock of any Subsidiary of CML) of any of CML, any of the
Borrowers or any of their Subsidiaries, or (b) issuance by CML of any Capital
Stock, the gross consideration received by CML, such Borrower, or such
Subsidiary (in cash) from such sale or issuance, net of commissions,
underwriting costs, direct sales costs, normal closing adjustments, income taxes
attributable to such sale and professional fees and expenses incurred directly
in connection therewith, to the extent the foregoing are actually paid in
connection with such sale or issuance.
NORDICTRACK. As defined in the preamble hereto.
NORDICTRACK BORROWING BASE. At the time of reference thereto, an
amount determined by the Administrative Agent by reference to the most recent
Borrowing Base Report, which is equal to the sum of:
(a) 80.00% of NordicTrack's Eligible Accounts Receivable for which
invoices have been issued and are payable; PLUS
(b) 55.00% of the net book value (determined on a first-in first-out
basis at lower of cost or market) of Eligible NordicTrack Inventory; MINUS
(c) the amount of any Landlord Lien Reserve with respect to
NordicTrack;
PROVIDED, HOWEVER, the Administrative reserves its rights, upon prior written
notice to the Borrowers, and with the consent of the Majority Lenders, to add
reserves and decrease the advance rates set forth herein, if, in the
Administrative Agent's judgment, the results of commercial finance examinations,
inventory appraisals or other credit or collateral considerations indicate a
deterioration in NordicTrack's Eligible Accounts Receivable or Eligible
NordicTrack Inventory, such that additional reserves or a lower advance rate for
NordicTrack's Eligible Accounts Receivable and/or Eligible NordicTrack Inventory
is warranted.
NORDICTRACK LOANS. Revolving credit loans made or to be made by the
Lenders to NordicTrack pursuant to ss.2.1.1.
NORDICTRACK NOTE RECORD. A record with respect to a NordicTrack Note.
NORDICTRACK NOTES. See ss.2.4.1.
NOTE RECORDS. Collectively, the NordicTrack Note Records and the S&H
Note Records.
NOTES. Collectively, the Collateral Notes, the NordicTrack Notes and
the S&H Notes.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
CML, the Borrowers and their Subsidiaries to any of the Lenders and the
Administrative Agent, individually or collectively, existing on the date of this
Credit Agreement or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Credit Agreement or any of the other Loan
Documents or in respect of any of the Loans made or Reimbursement Obligations
incurred or any of the Notes, Letter of Credit Applications, Letter of Credits
or other instruments at any time evidencing any thereof.
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OPERATING ACCOUNT. With respect to any Borrower or CML, such
Borrower's or CML's as the case may be, demand deposit account(s) with BKB,
listed on SCHEDULE 8.20 hereto.
ORIGINAL CLOSING DATE. April 17, 1996.
OUTSTANDING. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
OVERADVANCE. As of any date of determination, with respect to any
Borrower, Loans, the unpaid principal thereof which exceeds an amount equal to
such Borrower's Borrowing Base MINUS such Borrower's Letter of Credit Exposure.
PATENT ASSIGNMENT. The Patent Collateral Assignment and Security
Agreement, dated as of the Original Closing Date, and restated as of the
Restatement Effective Date, made by the Borrowers and the Guarantors in favor of
the Administrative Agent and in form and substance satisfactory to the Lenders
and the Administrative Agent.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERFECTION CERTIFICATES. The Perfection Certificates as defined in
the Security Agreement.
PERMITTED CAPITAL STOCK. Capital Stock of the Borrower with respect
to which CML has no obligation to make any Distributions prior to the payment in
full in cash of all the Obligations.
PERMITTED DISPOSITION. Any disposition of assets of any Person
described in and permitted by ss.10.5.2.
PERMITTED EMPLOYEE ISSUANCE. Any issuance by CML of its common stock
to employees, officers or directors of CML or any of the Borrowers pursuant to
stock option plans and employee stock purchase plans of CML or any of the
Borrowers in compliance with ss.10.15.
PERMITTED INVENTORY LOCATIONS. The retail stores, distribution
centers and manufacturing facilities of the Borrowers located in the United
States of America and listed on SCHEDULE 2 hereto, as such SCHEDULE 2 may be
supplemented from time to time in accordance with the provisions of ss.9.4(j).
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by ss.10.2.
PERSON. Any individual, corporation, partnership, limited liability
company, limited liability partnership, trust, unincorporated association,
business, or other legal entity, and any government or any governmental agency
or political subdivision thereof.
PIK DATE. See ss.2.5.
PIK EVENT DATE. The failure of the Borrowers, by April 1, 1999, to
(a) permanently reduce the Total Commitment to not more than $35,000,000, and
(b) prepay all outstanding Loans such that, as of April 1, 1999, the outstanding
Loans and Letter of Credit Exposure of CML and the Borrowers does not exceed
$35,000,000 in the aggregate.
PIK NOTES. Promissory notes issued in payment of interest on the
Loans pursuant to ss.2.5, in form and substance satisfactory to the
Administrative Agent.
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PRIVATE LABEL CREDIT CARD PROGRAMS. The Monogram Credit Card Program,
the GE Capital Credit Card Program and all other credit card programs provided
to customers of NordicTrack by Persons other than CML, NordicTrack or their
Subsidiaries or Affiliates, together with all associated documentation.
REAL ESTATE. All real property now, or in the future, owned or leased
(as lessee or sublessee) by CML, any of the Borrowers or any of their
Subsidiaries.
RECORD. The grid attached to a Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by any
Lender with respect to any Loan referred to in such Note.
REFERENCE BANK. BKB.
REGISTRATION RIGHTS AGREEMENT. The Registration Rights Agreement,
dated as of the Restatement Effective Date, between CML, BIII and GM, in form
and substance satisfactory to the Lenders, whereby CML shall agree to effect the
registration, under the Securities Act of 1933, of the common stock of CML
issued to BIII and GM.
REIMBURSEMENT OBLIGATION. Each of CML's and each Borrower's
obligation to reimburse the Issuing Bank and the Lenders on account of any
drawing under any Letter of Credit issued on behalf of (a) in the case of CML,
any Borrower, and (b) in the case of any Borrower, such Borrower, all as
provided in ss.4.2.
RELATIVE. In relation to any Person, any spouse, parent, grandparent,
child, grandchild, brother or sister of such Person, or the spouse of any of the
foregoing.
RESTATEMENT EFFECTIVE DATE. As defined in the Amendment Agreement.
RESTRICTED PAYMENTS. In relation to CML, the Borrowers and their
Subsidiaries, (a) any Distribution or (b) any payment or prepayment by any
Borrower or its Subsidiaries to CML or to any other Affiliate of any of the
Borrowers or CML other than payments to Affiliates (other than CML) for goods
and services in the ordinary course of business on terms equivalent to those
obtainable in arms length transactions.
S&H. As defined in the preamble hereto.
S&H BORROWING BASE. At the relevant time of reference thereto, an
amount determined by the Administrative Agent by reference to the most recent
Borrowing Base Report, which is equal to the sum of:
(a) 80.00% of S&H's Eligible Accounts Receivable for which
invoices have been issued and are payable; PLUS
(b) 55.00% of the net book value (determined on a first-in
first-out basis at lower of cost or market) of S&H's Eligible
Inventory; MINUS
(c) the amount of any Landlord Lien Reserve with respect to
S&H;
PROVIDED, HOWEVER, the Administrative Agent reserves its rights, upon prior
written notice to the Borrowers, and with the consent of the Majority Lenders,
to add reserves and decrease the advance rates set forth herein, if, in the
Administrative Agent's judgment, the results of commercial finance examinations,
inventory appraisals or other credit or collateral considerations indicate a
deterioration in S&H's Eligible Accounts Receivable or Eligible Inventory, such
that additional reserves or a lower advance rate for S&H's Eligible Accounts
Receivable and/or Eligible Inventory is warranted.
25
S&H LOANS. Revolving credit loans made or to be made by the Lenders
to S&H pursuant to ss.2.1.3.
S&H NOTE RECORD. A Record with respect to an S&H Note.
S&H NOTES. See ss.2.4.3.
SECOND AMENDMENT TO COPYRIGHT MORTGAGE. The Amendment No. 2 to the
Memorandum of Grant of Security Interest in Copyrights, dated as of the
Restatement Effective Date, among CML, the Borrowers, the Guarantors and the
Administrative Agent and in form and substance satisfactory to the Lenders and
the Administrative Agent.
SECURITY AGREEMENT. The Security Agreement, dated as of the Original
Closing Date, and restated as of the Restatement Effective Date, among the
Borrowers, the Guarantors and the Administrative Agent.
SECURITY DOCUMENTS. The Guaranty, the Foreign Guaranties, the
Security Agreement, the Mortgages, the Life Insurance Collateral Assignments,
the Patent Assignment, the Trademark Assignment, the Copyright Mortgage, the
First Amendment to Copyright Mortgage, the Second Amendment to Copyright
Mortgage, the Agency Account Agreements, the Stock Pledge Agreement, the Foreign
Pledge Agreements, the Collateral Agency Agreement, and the First Amendment to
Security Documents Agreement.
SETTLEMENT. Among the Lenders, the making or receiving of payments in
immediately available funds to the extent necessary to cause each Lender's
actual share of the outstanding amount of Loans (after giving effect to any Loan
Request) to be equal to each Lender's Commitment Percentage of the outstanding
amount of such Loans, in any case where, prior to such event or action, the
actual share is not so equal.
SETTLEMENT AMOUNT. See ss.2.8.
SETTLEMENT DATE. (a) The Drawdown Date relating to any Loan Request,
(b) Friday of each week, or if Friday is not a Business Day, the Business Day
immediately following such Friday, (c) the Business Day immediately following
the day the Agent becomes aware of the existence of an Event of Default, (d) the
Business Day immediately following any Business Day on which the amount of Loans
outstanding from BKB is equal to or greater than BKB's Commitment, (e) the
Business Day immediately following any Business Day on which the amount of Loans
outstanding increases or decreases by more than $1,000 as compared to the
previous Settlement Date, or (f) any Business Day on which (i) the amount of
outstanding Loans decreases and (ii) the amount of BKB's Loans outstanding
equals zero Dollars ($0).
SETTLING LENDER. See ss.2.8.
SPECIFIED LEASE. A lease by any of the Borrowers as lessee of Real
Estate at which Eligible Inventory or, in the case of NordicTrack, Eligible
NordicTrack Inventory, is held and as to which at any time the Administrative
Agent has not received evidence, in form and substance satisfactory to the
Administrative Agent, that based upon then existing law (as determined by the
Administrative Agent in the exercise of its reasonable discretion and on the
advice of counsel), the landlord of such property would not have a lien on
inventory superior to the security interest granted under the Security
Documents, securing rent obligations more than thirty (30) days past due or
securing future rent obligations accruing after the Original Closing Date;
PROVIDED, HOWEVER, that no lease for which the applicable Borrower and the
Administrative Agent have received a Landlord Waiver shall be a Specified Lease.
26
STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement, dated as of the
Original Closing Date, and restated as of the Restatement Effective Date, among
CML, certain of the Borrowers and the Administrative Agent, as amended and in
effect from time to time, in form and substance satisfactory to the Lenders and
the Administrative Agent.
STOCK PURCHASE AGREEMENT. The Stock Purchase Agreement, dated as of
the Restatement Effective Date, among CML, BIII and GM, in form and substance
satisfactory to the Lenders.
SUB-COMMITMENT. See ss.2.3.1.
SUB-OVERADVANCE AMOUNT. See ss.2.1.5(b).
SUBORDINATED DEBENTURES. The 5 1/2% Convertible Debentures due 2003
issued by CML pursuant to the Fiscal Agency Agreement.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
TITLE INSURANCE COMPANY. Chicago Title Insurance Company.
TITLE POLICY. In relation to each Mortgaged Property, an ALTA
standard form title insurance policy issued by the Title Insurance Company (with
such reinsurance or co-insurance as the Administrative Agent may require, any
such reinsurance to be with direct access endorsements) in such amount as may be
determined by the Administrative Agent insuring the priority of the Mortgage of
such Mortgaged Property and that one of the Borrowers or one of the Guarantors
holds marketable fee simple title to such Mortgaged Property, subject only to
the encumbrances permitted by such Mortgage and which shall not contain
exceptions for mechanics liens or persons in occupancy (except as may be
permitted by such Mortgage), shall not insure over any matter except to the
extent that any such affirmative insurance is acceptable to the Administrative
Agent in its sole discretion, and shall contain such endorsements and
affirmative insurance as the Administrative Agent in its discretion may require,
including but not limited to (i) comprehensive endorsement, (ii) variable rate
of interest endorsement, (iii) usury endorsement, (iv) revolving credit
endorsement, (v) tie-in endorsement, (vi) doing business endorsement and (vii)
ALTA form 3.1 zoning endorsement.
TOTAL COMMITMENT. The sum of the Commitments of the Lenders, as in
effect from time to time.
TRADEMARK ASSIGNMENT. The Trademark Collateral Security and Pledge
Agreement, dated as of the Original Closing Date, and restated as of the
Restatement Effective Date, made by the Borrowers and the Guarantors in favor of
the Administrative Agent and in form and substance satisfactory to the Lenders
and the Administrative Agent.
TRUST. The Trust, as such term is defined in the Trust Agreement.
TRUST AGREEMENT. The Trust Agreement dated as of June 28, 1989,
between CML and Indian Head National Bank, pursuant to which CML has established
a "rabbi trust" for the benefit of certain executive employees of CML.
27
TRUST ASSETS. Any assets or properties from time to time heretofore
or hereafter transferred to the Trust pursuant to the terms of the Trust
Agreement and constituting assets held in trust for the benefit of certain
executive employees of CML.
UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Issuing Bank in the ordinary course of its business as a letter of credit
issuer and in effect at the time of issuance of such Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for
which the applicable Borrower does not reimburse the Issuing Bank and the
Lenders on the date specified in, and in accordance with, ss.4.2.
UNUSED LINE FEE. See ss.2.2.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
WARRANT PURCHASE AGREEMENT. The Warrant Purchase Agreement, dated as
of Xxxxx 00, 0000, xxxxx XXX, XXX and Rothschild Recovery Fund, L.P.
WARRANTS. The Common Stock Purchase Warrants of CML issued to BKB
pursuant to the terms of the Warrant Purchase Agreement, and as amended by the
Amendment No. 1 to Common Stock Purchase Warrant, in form and substance
satisfactory to BKB.
WISCONSIN. The State of Wisconsin Investment Board.
WISCONSIN DOCUMENTS. The Wisconsin Note Purchase Agreement, the
Wisconsin Subordinated Note, the Wisconsin Guaranties, the Intercreditor
Agreement and each other document, instrument or other agreement related
thereto.
WISCONSIN GUARANTIES. The several subordinated subsidiary guaranties,
made by each of the Subsidiaries of CML in favor of Wisconsin pursuant to which
each Subsidiary guaranties to Wisconsin the payment and performance of CML's
obligations under the Wisconsin Documents.
WISCONSIN NOTE PURCHASE AGREEMENT. The Note Purchase Agreement, dated
as of the date hereof, between Wisconsin and CML, pursuant to which the
Wisconsin Subordinated Note is issued, in form and substance satisfactory to the
Lenders.
WISCONSIN SUBORDINATED NOTE. The Secured Convertible Subordinated
Note in the principal amount of $20,000,000, dated as of the date hereof, issued
by CML to Wisconsin pursuant to the Wisconsin Note Purchase Agreement, in form
and substance satisfactory to the Lenders.
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1. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings
assigned to them by generally accepted accounting principles applied on a
consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the Commonwealth of Massachusetts, have the meanings assigned to
them therein, with the term "instrument" being that defined under Article 9 of
the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of this
Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Credit Agreement as a whole and not to any particular
section or subdivision of this Credit Agreement.
(j) BKB acts as Collateral Agent for the Secured Parties (as defined in
the Collateral Agency Agreement) pursuant to the Collateral Agency Agreement
with respect to the Collateral granted to the Collateral Agent pursuant to (i)
the Security Agreement, (ii) the Mortgages, (iii) the Patent Assignment, (iv)
the Trademark Assignment, (v) the Copyright Mortgage, and (vi) the Stock Pledge
Agreement. Accordingly, references in this Credit Agreement to BKB as
Administrative Agent with respect to such Collateral and such Security Documents
shall be deemed references to BKB as Collateral Agent. BKB acts as
Administrative Agent for the Lenders and the Administrative Agent pursuant to
this Credit Agreement with respect to (i) the Guaranty, (ii) the Foreign
Guaranties, (iii) the Life Insurance Collateral Assignments, and (iv) the
Foreign Pledge Agreements. All references in this Credit Agreement and in such
Security Documents to BKB as Administrative Agent shall be to BKB in such
capacity and not in its capacity as Collateral Agent. References in ss.8.14 and
in ss.10.2(j) to the Administrative Agent shall be deemed references to BKB in
its capacity as Administrative Agent and as Collateral Agent.
29
1. THE REVOLVING CREDIT FACILITIES.
2. COMMITMENT TO LEND.
Subject to the terms and conditions set forth in this Credit Agreement
(including without limitation, the provisions of ss.11.4), each of the Lenders
severally agrees, in reliance upon the representations and warranties of
NordicTrack contained herein, to lend to NordicTrack and NordicTrack may borrow,
repay, and reborrow from time to time between the Restatement Effective Date and
the Maturity Date upon notice by NordicTrack to the Administrative Agent given
in accordance with ss.2.6, such sums as are requested by NordicTrack, PROVIDED
that the sum of the outstanding amount of the NordicTrack Loans (after giving
effect to all amounts requested) PLUS NordicTrack's Letter of Credit Exposure
shall not at any time exceed the lesser of (a) NordicTrack's Sub-Commitment and
(b) the NordicTrack Borrowing Base PLUS NordicTrack's Sub-Overadvance Amount in
effect at such time. The NordicTrack Loans shall be made PRO RATA in accordance
with each Lender's Commitment Percentage. Each request for a NordicTrack Loan
hereunder shall constitute a representation and warranty by NordicTrack that the
conditions set forth in ss.12 and ss.13, in the case of the initial
NordicTrack Loans to be made on the Restatement Effective Date, and ss.13, in
the case of all other NordicTrack Loans, have been satisfied on the date of such
request.
INTENTIONALLY OMITTED.
COMMITMENT TO LEND S&H LOANS. Subject to the terms and conditions set
forth in this Credit Agreement (including without limitation, the provisions
of ss.11.4), each of the Lenders severally agrees, and in reliance upon the
representations and warranties of S&H contained herein, to lend to S&H and
S&H may borrow, repay, and reborrow from time to time between the
Restatement Effective Date and the Maturity Date upon notice by S&H to the
Administrative Agent given in accordance with ss.2.6, such sums as are
requested by S&H, PROVIDED that the sum of the outstanding amount of the S&H
Loans (after giving effect to all amounts requested) PLUS S&H's Letter of
Credit Exposure shall not at any time exceed the lesser of (a) S&H's
Sub-Commitment and (b) the S&H Borrowing Base PLUS S&H's Sub-Overadvance
Amount in effect at such time. The S&H Loans shall be made PRO RATA in
accordance with each Lender's Commitment Percentage. Each request for a S&H
Loan hereunder shall constitute a representation and warranty by S&H that
the conditions set forth in ss.12 and ss.13, in the case of the initial
S&H Loans to be made on the Restatement Effective Date, and ss.13, in the
case of all other S&H Loans, have been satisfied on the date of such
request.
INTENTIONALLY OMITTED.
OVERADVANCE FACILITY.
2.1.5(A). MAXIMUM OVERADVANCE AMOUNT. As of any date of
determination, the sum of the Overadvances shall not exceed the Maximum
Overadvance Amount then in effect. Each Overadvance outstanding from
time to time shall bear interest calculated pursuant to ss.2.5.
2.1.5(B). SUB-OVERADVANCE AMOUNTS. The sum of the Overadvances
made to any Borrower shall not exceed, (i) as of the end of any month
described in SCHEDULE 2.1.5 hereto, the amount for such Borrower set
forth opposite such month in such SCHEDULE 2.1.5, or (ii) during any
month described in SCHEDULE 2.1.5 hereto, the greater of (A) the amount
for such month in such SCHEDULE 2.1.5 and (B) the amount for such
Borrower set
30
forth opposite the month immediately preceding the month referred to in
clause (A) above (such amount being referred to herein as a
"SUB-OVERADVANCE AMOUNT" for such Borrower and such period). The
Administrative Agent shall keep a record of the Sub-Overadvance Amount
of each Borrower as in effect on each date and such record shall be
conclusive, in the absence of manifest error. The sum of the Borrowers'
Sub-Overadvance Amounts shall not at any time exceed the Maximum
Overadvance Amount.
1. UNUSED LINE FEE. Each Borrower agrees to pay to the Administrative
Agent for the accounts of the Lenders in accordance with their respective
Commitment Percentages an unused line fee (the "UNUSED LINE FEE") calculated at
the rate of one-half percent (0.50%) per annum on the average daily amount
during each calendar quarter or portion thereof from the date hereof to the
Maturity Date by which such Borrower's Sub-Commitment MINUS such Borrower's
Letter of Credit Exposure exceeds the outstanding amount of such Borrower's
Loans during such calendar quarter. The Unused Line Fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the
immediately preceding calendar quarter commencing on the first such date
following the date hereof, with a final payment on the Maturity Date or any
earlier date on which the Commitments shall terminate.
REALLOCATION AND REDUCTION OF TOTAL COMMITMENT.
REALLOCATION OF TOTAL COMMITMENT. On the Restatement Effective
Date, CML shall by written notice to the Administrative Agent allocate
the Total Commitment among the Borrowers (such amount allocated to any
Borrower and set forth on SCHEDULE 1, a "Sub-Commitment"), PROVIDED
that the sum of the Borrowers' Sub-Commitments shall not exceed the
Total Commitment. CML shall have the right, no more frequently than
once in any calendar month (unless otherwise permitted by the
Administrative Agent) to request that the Lenders reallocate the
unborrowed and unused portion of the Total Commitment. Concurrently
with its delivery of the Borrowing Base Report for the previous month
pursuant to ss.9.4(f), CML shall give to the Administrative Agent
written notice in the form of EXHIBIT H-2 hereto of each reallocation
requested under this ss.2.3.1 (a "COMMITMENT REALLOCATION REQUEST").
Each such notice shall specify (i) each Borrower's Sub-Commitment as of
the date of such notice, (ii) each Borrower's Sub-Commitment after
giving effect to such notice, and (iii) the effective date of such
reallocation, which date shall be no less than two (2) Business Days
after the date of such notice (the "COMMITMENT REALLOCATION DATE").
Upon giving effect to a Commitment Reallocation Request, the sum of the
Borrowers' Sub-Commitments shall not exceed the Total Commitment in
effect at that time. On the Commitment Reallocation Date, the
Sub-Commitment of each of the Borrowers shall be reallocated in
accordance with the Commitment Reallocation Request and SCHEDULE 1
shall be deemed revised to reflect the reallocation. The Administrative
Agent shall keep a record of each Commitment Reallocation Request and
the Sub-Commitment of each Borrower as in effect on each date and such
record shall be conclusive, in the absence of manifest error. A
reallocation of the Total Commitment under this ss.2.3.1 shall not be
deemed to be a reduction of the Total Commitment.
REDUCTION OF SUB-COMMITMENT. Each of the Borrowers and CML shall
have the right at any time and from time to time upon five (5) Business
Days prior written notice to the Administrative Agent to reduce by
$500,000 or an integral multiple thereof or terminate entirely its
Sub-Commitment or, in the case of CML, any Borrower's Sub-Commitment,
whereupon the Total Commitment shall be reduced by the amount specified
in such notice or, as the case may be, terminated and the Commitments
of the Lenders shall be reduced PRO RATA in accordance with their
respective Commitment Percentages of the amount specified in such
notice or, as the case may be, terminated. Promptly after receiving any
notice of any Borrower or CML delivered pursuant to this ss.2.3.2, the
Administrative Agent will notify the Lenders of the substance thereof.
Upon the effective date of any such reduction or termination, the
applicable Borrower shall pay to the Administrative Agent for the
respective accounts of the Lenders the full amount of any Unused
31
Line Fee then accrued on the amount of the reduction. No reduction or
termination of the Commitments may be reinstated.
MANDATORY REDUCTION OF TOTAL COMMITMENT. Without limiting the
obligations of CML, the Borrowers and their Subsidiaries to comply with
the provisions of ss.10.5.2 of the Credit Agreement, in the event of
any (a) disposition of assets (including Capital Stock of any
Subsidiary of CML) by CML or any of its Subsidiaries (other than a
Permitted Disposition; PROVIDED that, for purposes of this ss.2.3.3,
the sale or other disposition by CML of Capital Stock of NT, or an NT
Spin-Off shall be treated as if it were not a Permitted Disposition,
and the requirements of this ss.2.3.3 shall apply in the case of any
such sale or other disposition or spin-off) or (b) issuance by CML of
any of its Capital Stock (other than a Permitted Employee Issuance),
the Total Commitment shall be permanently reduced on the date of
receipt by CML or any of its Subsidiaries of any Net Cash Proceeds from
such disposition or issuance (it being understood that the parties
hereto do not expect the conversion of the Wisconsin Note into common
stock of CML to result in any Net Cash Proceeds) by an amount equal to
such Net Cash Proceeds. On or prior to the date of any such sale,
disposition, issuance or spin-off, CML shall (i) allocate the reduction
of the Total Commitment among the Sub-Commitments of the Borrowers as
CML and the Lenders agree and (ii) give to the Administrative Agent
written notice setting forth the Total Commitment allocation after
giving effect to any reduction pursuant to this ss.2.3.3. In the event
CML fails, by the date of the receipt by CML or any of its Subsidiaries
of any Net Cash Proceeds from such sale, disposition, issuance or
spin-off, to reallocate the Sub-Commitments of the Borrowers to give
effect to such reductions, the Administrative Agent shall reallocate
the Sub-Commitments of the Borrowers in its sole discretion.
1. THE NOTES.
THE NORDICTRACK NOTES. The NordicTrack Loans shall be evidenced by
promissory notes of NordicTrack in substantially the form of EXHIBIT
A-1 hereto (each a "NORDICTRACK NOTE"), dated as of the Restatement
Effective Date (or other such date on which a Lender may become a party
hereto in accordance with ss.20 hereof) and completed with appropriate
insertions. One NordicTrack Note shall be payable to the order of each
Lender in a principal amount equal to such Lender's Commitment or, if
less, the outstanding amount of all NordicTrack Loans made by such
Lender, plus interest accrued thereon, as set forth below. NordicTrack
irrevocably authorizes each Lender to make or cause to be made, at or
about the time of the Drawdown Date of any NordicTrack Loan or at the
time of receipt of any payment of principal on such Lender's
NordicTrack Note, an appropriate notation on such Lender's NordicTrack
Note Record reflecting the making of such NordicTrack Loan or (as the
case may be) the receipt of such payment. The outstanding amount of the
NordicTrack Loans set forth on such Lender's NordicTrack Note Record
shall be PRIMA FACIE evidence of the principal amount thereof owing and
unpaid to such Lender, but the failure to record, or any error in so
recording, any such amount on such Lender's NordicTrack Note Record
shall not limit or otherwise affect the obligations of NordicTrack
hereunder or under any NordicTrack Note to make payments of principal
of or interest on any NordicTrack Note when due.
INTENTIONALLY OMITTED.
THE S&H NOTES. The S&H Loans shall be evidenced by promissory
notes of S&H in substantially the form of EXHIBIT A-2 hereto (each an
"S&H NOTE"), dated as of the Restatement Effective Date (or other such
date on which a Lender may become a party hereto in accordance with
ss.20 hereof) and completed with appropriate insertions. One S&H Note
shall be payable to the order of each Lender in A principal amount
equal to such Lender's Commitment or, if less, the outstanding amount
of all S&H Loans made by such Lender, plus interest accrued thereon, as
set forth below. S&H irrevocably authorizes each Lender to make or
cause to be made, at or about
32
the time of the Drawdown Date of any S&H Loan or at the time of receipt
of any payment of principal on such Lender's S&H Note, an appropriate
notation on such Lender's S&H Note Record reflecting the making of such
S&H Loan or (as the case may be) the receipt of such payment. The
outstanding amount of the S&H Loans set forth on such Lender's S&H Note
Record shall be PRIMA FACIE evidence of the principal amount thereof
owing and unpaid to such Lender, but the failure to record, or any
error in so recording, any such amount on such Lender's S&H's Note
Record shall not limit or otherwise affect the obligations of S&H
hereunder or under any S&H Note to make payments of principal of or
interest on any S&H Note when due.
INTENTIONALLY OMITTED.
1. INTEREST ON LOANS. Except as otherwise provided in ss.5.11.
(a) During the period from the Restatement Effective Date through
the earlier to occur of (i) the Maturity Date, or (ii) the PIK Event
Date (such earlier date being referred to herein as the "PIK DATE"),
each Loan shall bear interest at the rate of four percent (4.00%) per
annum above the Base Rate. On the PIK Date (A) each Borrower shall
issue to each Lender a PIK Note in the principal amount equal to
interest which would have accrued at the rate of one and one-half of
one percent (1.50%) per month, compounded monthly, on the outstanding
principal amount of the Loans of such Lender to such Borrower during
the period commencing on January 1, 1999 and ending on the PIK Date,
and (B) all Loans will from and after the PIK Date bear interest at the
rate equal to (x) the annual rate equal to the Base Rate plus four
percent (4.00%), payable monthly in arrears on each Interest Payment
Date in cash, plus (y) one and one-half of one percent (1.50%) per
month, payable monthly in arrears on each Interest Payment Date by the
issuance of PIK Notes on such Interest Payment Date in the principal
amount of such accrued unpaid interest at the rate of one and one-half
of one percent (1.50%) per month. Each PIK Note issuable pursuant to
this ss.2.5(a) shall bear interest, from and after the date that such
PIK Note was required by this ss.2.5 to be issued, at the rate of one
and one-half of one percent (1.50%) per month, compounded monthly, and
shall be payable upon the earlier to occur of (a) the Maturity Date, or
(b) the acceleration or payment in full of all the other Loans. In the
event that any Borrower fails to issue any PIK Note on any PIK Date or
within five (5) Business Days after any Interest Payment Date or on any
other date as required by this ss.2.5, (i) such failure shall be an
immediate and automatic Event of Default hereunder, and (ii) without
derogation or waiver of any of the rights and remedies of the
Administrative Agent or the Lenders as a result of such Event of
Default, interest shall accrue on the Obligations as if all PIK Notes
required to be issued pursuant to this ss.2.5 had been timely issued
in accordance with the requirements of this ss.2.5.
(b) Each of the Borrowers promises to pay interest on each of its
Loans in arrears on each Interest Payment Date with respect thereto.
1. REQUESTS FOR LOANS.
LOAN REQUESTS. Each of the Borrowers shall give to the
Administrative Agent written notice in the form of EXHIBIT B hereto (or
telephonic notice confirmed in a writing in the form of EXHIBIT B
hereto) of each Loan requested by such Borrower hereunder (a "LOAN
REQUEST") not later than (i) 10:00 a.m. (Boston time) on the proposed
Drawdown Date of any Loan. Each such notice shall specify (A) the
principal amount of the Loan requested, (B) the proposed Drawdown Date
of such Loan, (C) the Interest Period for such Loan, and (D) the
Borrower requesting such Loan. Promptly upon receipt of any such
notice, the Administrative Agent shall notify each of the Lenders
thereof. Each Loan Request shall be irrevocable and binding on the
requesting Borrower and shall obligate the requesting Borrower to
accept the Loan requested from the Lenders on the
33
proposed Drawdown Date. Each Loan Request shall be in a minimum
aggregate amount of $100,000 or a larger integral multiple thereof.
DAILY BORROWINGS. Notwithstanding the notice and minimum amount
requirements set forth in ss.2.6.1 but otherwise in accordance with
the terms and conditions of this Credit Agreement, the Administrative
Agent may, in its sole discretion and without conferring with the
Lenders, make Loans to each Borrower (i) by entry of credits to such
Borrower's Controlled Disbursement Account to cover checks or other
charges which such Borrower has drawn or made against such account or
(ii) in an amount as otherwise requested by such Borrower. Each
Borrower hereby requests and authorizes the Administrative Agent to
make from time to time such Loans by means of appropriate entries of
such credits sufficient to cover checks and other charges then
presented. Each Borrower acknowledges and agrees that the making of
such Loans shall, in each case, be subject in all respects to the
provisions of this Credit Agreement as if they were Loans covered by a
Loan Request including, without limitation, the limitations set forth
in ss.2.1 and the requirements that the applicable provisions of
secs.12 and 13 (in the case of Loans made on the Restatement Effective
Date) and ss.13 (in all other cases) be satisfied. All actions taken
by the Administrative Agent pursuant to the provisions of this
ss.2.6.2 shall be conclusive and binding on the applicable Borrower
absent the Administrative Agent's gross negligence or willful
misconduct.
1. INTENTIONALLY OMITTED.
2. INTENTIONALLY OMITTED.
3. INTENTIONALLY OMITTED.
4. INTENTIONALLY OMITTED.
2.7.4. INTENTIONALLY OMITTED.
SETTLEMENT; FAILURE TO MAKE FUNDS AVAILABLE.
SETTLEMENT AND FUNDING PROCEDURES. On each Settlement Date, the
Administrative Agent shall, not later than 11:30 a.m. (Boston time),
give telephonic or facsimile notice (i) to the Lenders and the
Borrowers of the respective outstanding amount of Loans made by the
Administrative Agent on behalf of the Lenders from the immediately
preceding Settlement Date through the close of business on the prior
day and (ii) to the Lenders of the amount (a "SETTLEMENT AMOUNT") that
each Lender (the "SETTLING LENDER") shall pay to effect a Settlement of
any Loan. A statement of the Administrative Agent submitted to the
Lenders and the applicable Borrower or to the Lenders with respect to
any amounts owing under this ss.2.8.1 shall be PRIMA FACIE evidence of
the amount due and owing. The Settling Lender shall, not later than
3:00 p.m. (Boston time) on such Settlement Date, effect a wire transfer
of immediately available funds to the Administrative Agent in the
amount of such Lender's Settlement Amount. All funds advanced by any
Lender as a Settling Lender pursuant to this ss.2.8.1 shall for all
purposes be treated as a Loan made by such Settling Lender to the
applicable Borrower and all funds received by any Lender pursuant to
this ss.2.8.1 shall for all purposes be treated as repayment of
amounts owed with respect to Loans made by such Lender. In the event
that any bankruptcy, reorganization, liquidation, receivership or
similar cases or proceedings in which any of the Borrowers is a debtor
prevent a Settling Lender from making any Loan to effect a Settlement
as contemplated hereby, such Settling Lender will make such disposition
and arrangements with the other Lenders with respect to such Loans,
either by way of purchase of participations, distribution, PRO TANTO
assignment of claims, subrogation or otherwise as shall result in each
Lender's share of the outstanding Loans being equal, as nearly as
34
may be, to such Lender's Commitment Percentage of the outstanding
amount of the Loans. Each Lender's obligation to fund its Settlement
Amount in connection with any Settlement pursuant to this ss.2.8.1
shall be absolute and unconditional and shall not be affected by any
circumstance, including (v) any set-off, counterclaim, recoupment,
defense or other right which such Lender may have against the
Administrative Agent, any Borrower or any other Person for any reason
whatsoever; (w) the occurrence and continuation of any Default or Event
of Default; (x) any adverse change in the condition (financial or
otherwise) of any of CML or its Subsidiaries or any other Lender;
(y) any breach of any of the Loan Documents by any of CML or its
Subsidiaries or any other Lender; or (z) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing.
ADVANCES BY ADMINISTRATIVE AGENT. The Administrative Agent may,
unless notified to the contrary by any Lender prior to a Settlement
Date, assume that such Lender has made or will make available to the
Administrative Agent on such Settlement Date the amount of such
Lender's Settlement Amount, and the Administrative Agent may (but it
shall not be required to), in reliance upon such assumption, make
available to the applicable Borrower a corresponding amount. If any
Lender makes available to the Administrative Agent such amount on a
date after such Settlement Date, such Lender shall pay to the
Administrative Agent on demand an amount equal to the product of (i)
the average computed for the period referred to in clause (iii) below,
of the weighted average interest rate paid by the Administrative Agent
for federal funds acquired by the Administrative Agent during each day
included in such period, TIMES (ii) the amount of such Settlement
Amount, TIMES (iii) a fraction, the numerator of which is the number of
days that elapse from and including such Settlement Date to the date on
which the amount of such Settlement Amount shall become immediately
available to the Administrative Agent, and the denominator of which is
360. A statement of the Administrative Agent submitted to such Lender
with respect to any amounts owing under this paragraph shall be PRIMA
FACIE evidence of the amount due and owing to the Administrative Agent
by such Lender. If such Lender's Settlement Amount is not made
available to the Administrative Agent by such Lender within three (3)
Business Days following such Settlement Date, the Administrative Agent
shall be entitled to recover such amount from the applicable Borrower
on demand, with interest thereon at the rate per annum applicable to
the Loans (but not PIK Notes) as of such Settlement Date.
FAILURE TO MAKE FUNDS AVAILABLE. The failure or refusal of any
Lender to make available to the Administrative Agent at the aforesaid
time and place on any Settlement Date the amount of its Settlement
Amount (i) shall not relieve any other Lender from its several
obligations hereunder to make available to the Administrative Agent the
amount of such other Lender's Settlement Amount and (ii) shall not
impose upon such other Lender any liability with respect to such
failure or refusal or otherwise increase the Commitment of such other
Lender.
1. CHANGE IN BORROWING BASES. Each Borrowing Base shall be determined
weekly (or at such other interval as may be specified pursuant to ss.9.4(f)) by
the Administrative Agent by reference to the Borrowing Base Report. The
Administrative Agent shall give to the Lenders and the applicable Borrower(s)
written notice of any change in such Borrower's Borrowing Base determined by the
Administrative Agent resulting from the Administrative Agent's determination to
add reserves or decrease the advance rates with respect to such Borrowing Base
based on commercial finance examinations, inventory appraisals or other credit
or collateral considerations, which notice shall be effective upon receipt by
the applicable Borrower(s). The Administrative Agent will not give any such
notice to the applicable Borrower(s) without the consent of the Majority
Lenders. Prior to such time as the applicable Borrower receives such notice,
such Borrower's Borrowing Base shall be the amount in effect in the absence of
such notice. For purposes of this Credit Agreement and the other Loan Documents,
the Administrative Agent may assume, subject to adjustment based upon the
provisions of this Credit Agreement, that each Borrower's Borrowing Base in
effect on any given date is such Borrower's Borrowing Base as indicated on
35
the most recent Borrowing Base Report delivered on a timely basis to the Lenders
and the Administrative Agent in accordance with the provisions of ss.9.4(f)
hereof.
1. REPAYMENT OF THE LOANS.
2. MATURITY. Each Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all of its
Loans outstanding on such date, together with any and all accrued and unpaid
interest thereon.
1. MANDATORY REPAYMENTS OF LOANS.
NORDICTRACK LOANS. If at any time the sum of the outstanding
amount of the NordicTrack Loans and NordicTrack's Letter of Credit
Exposure exceeds the lesser of (i) NordicTrack's Sub-Commitment in
effect at such time and (ii) the NordicTrack Borrowing Base plus
NordicTrack's Sub-Overadvance Amount in effect at such time, then
NordicTrack shall immediately pay the amount of such excess to the
Administrative Agent for the respective accounts of the Lenders for
application: FIRST, to any Unpaid Reimbursement Obligations in respect
of Letters of Credit issued at the request of NordicTrack; SECOND, to
the NordicTrack Loans; and THIRD, to provide to the Administrative
Agent cash collateral for Reimbursement Obligations in respect of
Letters of Credit issued at the request of NordicTrack as contemplated
by ss.4.2(b) and (c). Each payment of any Unpaid Reimbursement
Obligations or prepayment of NordicTrack Loans shall be allocated among
the Lenders, in proportion, as nearly as practicable, to each Unpaid
Reimbursement Obligation or (as the case may be) the respective unpaid
principal amount of each Lender's NordicTrack Note, with adjustments to
the extent practicable to equalize any prior payments or repayments not
exactly in proportion.
3.2.2. INTENTIONALLY OMITTED.
3.2.3. S&H LOANS. If at any time the sum of the outstanding amount
of the S&H Loans and S&H's Letter of Credit Exposure exceeds the lesser
of (i) S&H's Sub-Commitment in effect at such time and (ii) the S&H
Borrowing Base PLUS S&H's Sub-Overadvance Amount in effect at such
time, then S&H shall immediately pay the amount of such excess to the
Administrative Agent for the respective accounts of the Lenders for
application: FIRST, to any Unpaid Reimbursement Obligations in respect
of Letters of Credit issued at the request of S&H; SECOND, to the S&H
Loans; and THIRD, to provide to the Administrative Agent cash
collateral for Reimbursement Obligations in respect of Letters of
Credit issued at the request of S&H as contemplated by ss.4.2(b) and
(c). Each payment of any Unpaid Reimbursement Obligations or prepayment
of S&H Loans shall be allocated among the Lenders, in proportion, as
nearly as practicable, to each Unpaid Reimbursement Obligation or (as
the case may be) the respective unpaid principal amount of each
Lender's S&H Note, with adjustments to the extent practicable to
equalize any prior payments or repayments not exactly in proportion.
3.2.4. REPAYMENTS FROM NET CASH PROCEEDS.
(a) CML shall, not later than the Business Day next following
each day any Net Cash Proceeds arising from any (i) sale or other
disposition by CML of the Capital Stock of any Subsidiary of CML, or
(ii) issuance by CML of any Capital Stock (other than a Permitted
Employee Issuance), are received by CML, pay to the Administrative
Agent the full amount of such Net Cash Proceeds for application to the
Loans.
36
(b) The Borrowers and its Subsidiaries shall, not later than the
Business Day next following each day any Net Cash Proceeds arising from
(i) a Permitted Disposition set forth in ss.10.5.2(c), or (ii) an NT
Spin-Off are received by the any Borrower or its Subsidiaries, pay to
the Administrative Agent the full amount of such Net Cash Proceeds for
application to the Loans.
(c) On or prior to the date of any prepayment made pursuant to
ss.3.2.4, CML shall (a) allocate the payment of the Loans among the
respective Loans of NordicTrack and S&H as CML and the Lenders agree
and (b) give to the Administrative Agent written notice setting forth
the allocation of such prepayment after giving effect to any prepayment
pursuant to ss.3.2.4. In the event CML fails, by the date of such
prepayment, to allocate the payments to the Loans of the Borrowers to
give effect to such payments the Administrative Agent shall allocate
the payments in its sole discretion. Each prepayment of Loans, pursuant
to ss.3.2.4 shall be allocated among the Lenders, in proportion, as
nearly as practicable, to the respective unpaid principal amount of
each Lender's respective Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.
(d) The Borrowers shall be permitted, subject to (i) any
mandatory reductions in the Total Commitment required under ss.2.3.3,
and (ii) borrowing availability requirements under this Credit
Agreement, to reborrow all amounts repaid under this ss.3.2.4, in
compliance with the provisions of this Credit Agreement.
1. DEPOSITORY ARRANGEMENTS.
THE BORROWERS' DEPOSITORY ARRANGEMENTS. Each of the Borrowers will
(i) on or prior to the Original Closing Date, maintain a depository
concentration account (such Borrower's "CONCENTRATION ACCOUNT") with
and under the control of the Administrative Agent, as contemplated by
the terms of this Credit Agreement, (ii) direct each Agency Account
Institution pursuant to the Agency Account Agreements (whereby such
Agency Account Institution shall, among other things, waive any right
of set off, other than for service charges and returns incurred in
connection therewith), to cause all funds held by such Agency Account
Institution in the Agency Accounts to be transferred daily (or such
other period as the Administrative Agent requests) to, and only to, the
Administrative Agent for deposit in such Borrower's Concentration
Account and (iii) direct its account debtors and obligors on
instruments or other obligors of such Borrower with respect to any of
the Collateral to make all payments on or with respect to any of the
Collateral due or to become due to such Borrower directly to such
Borrower's Concentration Account or the Agency Accounts. If,
notwithstanding the requirements of the foregoing sentence, any of the
Borrowers receives any cash proceeds of any of the Collateral, whether
in the form of money, checks or otherwise, such Borrower will hold such
cash proceeds in trust for the benefit of the Administrative Agent and
the Lenders and turn such cash proceeds promptly over to the
Administrative Agent in the identical form received by deposit to any
Agency Account or Concentration Account. The Administrative Agent
shall, (i) with respect to all funds and cash proceeds in the form of
money, checks and like items received in any Borrower's Concentration
Account, on the same Business Day on which the Administrative Agent
determines that good collected funds have been received, and prior to
the final collection of good collected funds, on a provisional basis
until such final collection, (ii) with respect to all funds and cash
proceeds in the form of a wire transfer received in any Borrower's
Concentration Account, on the same Business Day as the Administrative
Agent's receipt of such amounts (or such later date as the
Administrative Agent determines that good collected funds have been
received) and (iii) with respect to all funds and cash proceeds in the
form of an automated clearing house transfer received in any Borrower's
Concentration Account, on the next Business Day following the
Administrative Agent's receipt of such amounts (or such later date as
the Administrative Agent determines that good collected funds have been
received), in each case, apply to the principal of the applicable
Borrower's Loans all such funds and cash proceeds which were deposited
to such
37
Borrower's Concentration Account and, so long as no Default or Event of
Default has occurred and is continuing, the Administrative Agent shall
cause any excess to be credited to the applicable Borrower's Operating
Account. From and after the occurrence and during the continuance of a
Default or an Event of Default, the Administrative Agent may, from time
to time in the Administrative Agent's discretion, retain any or all of
such excess to pay any Obligations then due and payable in accordance
with ss.14.4 and to provide cash collateral for any Obligations not
then due and payable, including an amount equal to 105% of the Maximum
Drawing Amount to secure Reimbursement Obligations with respect to
Letters of Credit issued at the request of the applicable Borrower,
with the Administrative Agent causing any surplus, subject to the
rights of any other persons entitled thereto, to be credited to the
applicable Borrower's Operating Account. For purposes of the foregoing
provisions of this ss.3.3.1, the Administrative Agent shall not be
deemed to have received any such cash proceeds on any day unless
received by the Administrative Agent before 4:00 p.m. (Boston time) on
such day. Each of the Borrowers further acknowledges and agrees that
any such provisional credit by the Administrative Agent shall be
subject to reversal if final collection in good collected funds of the
related item is not received by the Administrative Agent in accordance
with the Administrative Agent's customary procedures and practices for
collecting provisional items.
CML'S DEPOSITORY ARRANGEMENTS. CML will (i) on or prior to the
Original Closing Date, maintain a depository concentration account
(CML's "CONCENTRATION ACCOUNT") with and under the control of the
Administrative Agent, as contemplated by the terms of this Credit
Agreement, (ii) direct each Agency Account Institution pursuant to the
Agency Account Agreements (whereby such Agency Account Institution
shall, among other things, waive any right of set off, other than for
service charges and returns incurred in connection therewith), to cause
all funds held by such Agency Account Institution in the Agency
Accounts to be transferred daily (or such other period as the
Administrative Agent requests) to, and only to, the Administrative
Agent for deposit in such Borrower's Concentration Account, (iii)
direct its account debtors and obligors on instruments or other
obligors of CML with respect to any of the Collateral to make all
payments on or with respect to any of the Collateral due or to become
due to CML directly to CML's Concentration Account or the Agency
Accounts and (iv) cause any and all tax refunds received by CML to be
immediately deposited into CML's Concentration Account. If,
notwithstanding the requirements of the foregoing sentence, CML
receives any cash proceeds of any of the Collateral, whether in the
form of money, checks or otherwise, CML will hold such cash proceeds in
trust for the benefit of the Administrative Agent and the Lenders and
turn such cash proceeds promptly over to the Administrative Agent in
the identical form received by deposit to any Agency Account or
Concentration Account. The Administrative Agent shall, (i) with respect
to all funds and cash proceeds in the form of money, checks and like
items received in CML's Concentration Account, on the same Business Day
on which the Administrative Agent determines that good collected funds
have been received, and prior to the final collection of good collected
funds, on a provisional basis until such final collection, (ii) with
respect to all funds and cash proceeds in the form of a wire transfer
received in CML's Concentration Account, on the same Business Day as
the Administrative Agent's receipt of such amounts (or such later date
as the Administrative Agent determines that good collected funds have
been received), and (iii) with respect to all funds and cash proceeds
in the form of an automated clearing house transfer received in CML's
Concentration Account, on the next Business Day following the
Administrative Agent's receipt of such amounts (or such later date as
the Administrative Agent determines that good collected funds have been
received), in each case, apply to the principal of the Borrowers' Loans
in such proportions as the Administrative Agent shall determine in its
sole discretion all such funds and cash proceeds which were deposited
to CML's Concentration Account and, so long as no Default or Event of
Default has occurred and is continuing, the Administrative Agent shall
cause any excess to be credited to CML's Operating Account. From and
after the occurrence and during the continuance of a Default or an
Event of Default, the Administrative Agent may, from time to time in
the Administrative Agent's discretion, retain any or all of such excess
to pay any
38
Obligations then due and payable in accordance with ss.14.4 and to
provide cash collateral for any Obligations not then due and payable,
including an amount equal to 105% of the Maximum Drawing Amount to
secure Reimbursement Obligations of the Borrowers and CML, with the
Administrative Agent causing any surplus, subject to the rights of any
other persons entitled thereto, to be credited to CML's Operating
Account. For purposes of the foregoing provisions of this ss.3.3.2,
the Administrative Agent shall not be deemed to have received any such
cash proceeds on any day unless received by the Administrative Agent
before 4:00 p.m. (Boston time) on such day. CML further acknowledges
and agrees that any such provisional credit by the Administrative Agent
shall be subject to reversal if final collection in good collected
funds of the related item is not received by the Administrative Agent
in accordance with the Administrative Agent's customary procedures and
practices for collecting provisional items.
THE OTHER GUARANTORS' DEPOSITORY ARRANGEMENTS. Each of the
Guarantors not subject to secs.3.3.1 or 3.3.2 will (i) direct each
Agency Account Institution pursuant to the Agency Account Agreements
(whereby such Agency Account Institution shall, among other things,
waive any right of set off, other than for service charges and returns
incurred in connection therewith), to cause all funds held by such
Agency Account Institution in the Agency Accounts to be transferred
daily (or such other period as the Administrative Agent requests) to,
and only to, the Administrative Agent for deposit in the Concentration
Account of the Borrower which is such Guarantor's direct or indirect
parent, in accordance with this ss.3.3.3 and (ii) direct its account
debtors and obligors on instruments or other obligors of such Guarantor
with respect to any of the Collateral to make all payments on or with
respect to any of the Collateral due or to become due to such Guarantor
directly to the Concentration Account of such Guarantor's direct or
indirect parent or the Agency Accounts of such Guarantor or such
Guarantor's direct or indirect parent. If, notwithstanding the
requirements of the foregoing sentence, any of the Guarantors receives
any cash proceeds of any of the Collateral, whether in the form of
money, checks or otherwise, such Guarantor will hold such cash proceeds
in trust for the benefit of the Administrative Agent and the Lenders
and turn such cash proceeds promptly over to the Administrative Agent
in the identical form received by deposit to any Agency Account or
Concentration Account. The Administrative Agent shall, (i) with respect
to all funds and cash proceeds in the form of money checks and like
items received in any Borrower's or CML's Concentration Account, on the
same Business Day on which the Administrative Agent determines that
good collected funds have been received, and prior to the final
collection of good collected funds, on a provisional basis until such
final collection, (ii) with respect to all funds and cash proceeds in
the form of a wire transfer received in any Borrower's or CML's
Concentration Account, on the same Business Day as the Administrative
Agent's receipt of such amounts (or such later date as the
Administrative Agent determines that good collected funds have been
received), and (iii) with respect to all funds and cash proceeds in the
form of an automated clearing house transfer received in any Borrower's
or CML's Concentration Account, on the next Business Day following the
Administrative Agent's receipt of such amounts (or such later date as
the Administrative Agent determines that good collected funds have been
received), in each case, apply, in accordance with the provisions of
ss.3.3.1 or ss.3.3.2, as the case may be, all such funds and cash
proceeds so long as no Default or Event of Default has occurred and is
continuing, the Administrative Agent shall cause any excess to be
credited in accordance with the provisions of ss.3.3.1 or ss.3.3.2,
as the case may be. From and after the occurrence and during the
continuance of a Default or an Event of Default, the Administrative
Agent may, from time to time in the Administrative Agent's discretion,
retain any or all of such excess to pay any Obligations then due and
payable in accordance with ss.14.4 and to provide cash collateral for
any Obligations not then due and payable, including an amount equal to
105% of the Maximum Drawing Amount to secure Reimbursement Obligations
of the Borrowers, with the Administrative Agent causing any surplus,
subject to the rights of any other persons entitled thereto, to be
credited in accordance with the provisions of ss.3.3.1 or ss.3.3.2,
as the case may be. For purposes of the foregoing provisions of this
ss.3.3.3, the Administrative Agent shall not be deemed to have
received any such cash proceeds on any day unless received by the
39
Administrative Agent before 4:00 p.m. (Boston time) on such day. Each
of the Guarantors subject to this ss.3.3.3 further acknowledges and
agrees that any such provisional credit by the Administrative Agent
shall be subject to reversal if final collection in good collected
funds of the related item is not received by the Administrative Agent
in accordance with the Administrative Agent's customary procedures and
practices for collecting provisional items.
FEES AND EXPENSES; APPLICATION OF PAYMENT. Each of the Borrowers
and the Guarantors agrees to pay to the Administrative Agent any and
all reasonable fees, costs and expenses which the Administrative Agent
incurs in connection with the opening and maintaining of the
Concentration Accounts, the Controlled Disbursement Accounts and the
depositing for collection by the Administrative Agent of any check or
other item of payment. Absent gross negligence or willful misconduct by
the Administrative Agent, each of the Borrowers and each of the
Guarantors agrees to indemnify the Administrative Agent and to hold the
Administrative Agent harmless from and against any loss, cost or
expense sustained or incurred by the Administrative Agent on account of
any claims of third parties arising in connection with the
Administrative Agent's operation of the Concentration Account. Each
partial prepayment of Loans under this ss.3.3 shall be allocated among
the Lenders in proportion, as nearly as practicable, to the respective
unpaid principal amount of each Lender's applicable Note, with
adjustments to the extent practicable to equalize any prior repayments
not exactly in proportion.
1. OPTIONAL REPAYMENTS OF LOANS. Each Borrower shall have the right, at
its election, to repay the outstanding amount of its Loans, as a whole or in
part, at any time without penalty or premium. The applicable Borrower shall give
the Administrative Agent, no later than 1:00 p.m., (Boston time), at least one
(1) Business Day prior written notice of any proposed prepayment pursuant to
this ss.3.4 of Loans, in each case specifying the proposed date of prepayment
of its Loans and the principal amount to be prepaid. Each such partial
prepayment of the Loans shall be in an integral multiple of $500,000 and shall
be applied to the principal of the applicable Borrower's Loans. Each partial
prepayment shall be allocated among the Lenders, in proportion, as nearly as
practicable, to the respective unpaid principal amount of each Lender's
applicable Note, with adjustments to the extent practicable to equalize any
prior repayments not exactly in proportion. Any prepayment of the Loans made
pursuant to ss.3.3 shall not be subject to the provisions of this ss.3.4.
1. LETTERS OF CREDIT.
2. LETTER OF CREDIT COMMITMENTS.
3. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the terms and
conditions hereof and the execution and delivery by any of the
Borrowers and CML of a letter of credit application on the Issuing
Bank's customary form (a "LETTER OF CREDIT Application"), the Issuing
Bank on behalf of the Lenders and in reliance upon the agreement of the
Lenders set forth in ss.4.1.4 and upon the representations and
warranties of the applicable Borrower and CML contained herein, agrees,
in its individual capacity, to issue, extend and renew for the account
of such Borrower and CML one or more standby or documentary letters of
credit (individually, a "LETTER OF CREDIT"), in such form as may be
requested from time to time by the applicable Borrower and agreed to by
the Issuing Bank; PROVIDED, HOWEVER, that, after giving effect to such
request, (a) the sum of the aggregate Letter of Credit Exposure of the
Borrowers shall not exceed $10,000,000 at any one time and (b) the sum
of (i) each Borrower's Letter of Credit Exposure and (ii) the amount of
all Loans of such Borrower outstanding shall not exceed the lesser of
(A) such Borrower's Sub-Commitment and (B) such Borrower's Borrowing
Base PLUS such Borrower's Sub-Overadvance Amount.
40
1. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Issuing Bank.
In the event that any provision of any Letter of Credit Application
shall be inconsistent with any provision of this Credit Agreement, then
the provisions of this Credit Agreement shall, to the extent of any
such inconsistency, govern.
1. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide
for the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, (ii) subject to clause (iii) hereof, with respect to
documentary Letters of Credit, have a term of not more than one hundred
eighty (180) days from the date of issuance, extension or renewal
thereof (unless the Issuing Bank, in its sole discretion, shall have
agreed to a longer term of up to but not exceeding two hundred seventy
(270) days) and with respect to standby Letters of Credit, have a term
of not more than one (1) year from the date of issuance, extension or
renewal thereof, and (iii) have an expiry date no later than July 24,
1999.
1. REIMBURSEMENT OBLIGATIONS OF LENDERS. Each Lender severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Lender's Commitment
Percentage, to reimburse the Issuing Bank on demand for the amount of
each draft paid by the Issuing Bank under each Letter of Credit to the
extent that such amount is not reimbursed by the Borrowers or CML
pursuant to ss.4.2 (such agreement for a Lender being called herein
the "LETTER OF CREDIT PARTICIPATION" of such Lender).
1. PARTICIPATIONS OF LENDERS. Each such payment made by a Lender
shall be treated as the purchase by such Lender of a participating
interest in CML's and the Borrowers' Reimbursement Obligations under
ss.4.2 in an amount equal to such payment. Each Lender shall share in
accordance with its participating interest in any interest which
accrues pursuant to ss.4.2.
1. REIMBURSEMENT OBLIGATION OF CML AND THE BORROWERS. In order to
induce the Issuing Bank to issue, extend and renew each Letter of Credit and the
Lenders to participate therein, each Borrower and CML hereby agrees to reimburse
or pay to the Issuing Bank, for the account of the Issuing Bank or (as the case
may be) the Lenders, with respect to each Letter of Credit issued, extended or
renewed by the Issuing Bank hereunder at the request of such Borrower and CML,
(a) except as otherwise expressly provided in ss.4.2(b) and (c),
on each date that any draft presented under such Letter of Credit is
honored by the Issuing Bank, or the Issuing Bank otherwise makes a
payment with respect thereto, (i) the amount paid by the Issuing Bank
under or with respect to such Letter of Credit, and (ii) the amount of
any taxes, fees, charges or other costs and expenses whatsoever
incurred by the Issuing Bank or any Lender in connection with any
payment made by the Issuing Bank or any Lender under, or with respect
to, such Letter of Credit,
(b) upon the reduction (but not termination) of such Borrower's
Sub-Commitment to an amount less than the Maximum Drawing Amount with
respect to Letters of Credit issued at the request of such Borrower, an
amount equal to 105% of such difference, which amount
41
shall be held by the Issuing Bank for the benefit of the Lenders, the
Issuing Bank and the Administrative Agent as cash collateral for all
Reimbursement Obligations with respect to Letters of Credit issued at
the request of such Borrower, and
(c) upon the termination of the such Borrower's Sub-Commitment, or
the acceleration of the Reimbursement Obligations with respect to
Letters of Credit issued at the request of such Borrower in accordance
with ss.14, an amount equal to 105% of the then Maximum Drawing Amount
with respect to Letters of Credit issued at the request of such
Borrower, which amount shall be held by the Issuing Bank for the
benefit of the Lenders, the Issuing Bank and the Administrative Agent
as cash collateral for all Reimbursement Obligations with respect to
Letters of Credit issued at the request of such Borrower.
Each such payment shall be made to the Issuing Bank at the Issuing Bank's head
office located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx in immediately
available funds. Interest on any and all amounts remaining unpaid by the
Borrowers under this ss.4.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Issuing Bank on demand at the rate specified in ss.5.11 for overdue principal
on the Loans.
1. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Issuing Bank
shall notify the applicable Borrower of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to pay
such draft or honor such demand for payment. If the applicable Borrower or CML
fails to reimburse the Issuing Bank as provided in ss.4.2 on or before the date
that such draft is paid or other payment is made by the Issuing Bank, the
Issuing Bank may at any time thereafter notify the Lenders of the amount of any
such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on
the Business Day next following the receipt of such notice, each Lender shall
make available to the Issuing Bank, at its head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, in immediately available funds, such Lender's
Commitment Percentage of such Unpaid Reimbursement Obligation, together with an
amount equal to the product of (i) the average, computed for the period referred
to in clause (iii) below, of the weighted average interest rate paid by the
Issuing Bank for federal funds acquired by the Issuing Bank during each day
included in such period, TIMES (ii) the amount equal to such Lender's Commitment
Percentage of such Unpaid Reimbursement Obligation, TIMES (iii) a fraction, the
numerator of which is the number of days that elapse from and including the date
the Issuing Bank paid the draft presented for honor or otherwise made payment to
the date on which such Lender's Commitment Percentage of such Unpaid
Reimbursement obligation shall become immediately available to the Issuing Bank,
and the denominator of which is 360. The responsibility of the Issuing Bank to
CML, the Borrowers and the Lenders shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.
1. OBLIGATIONS ABSOLUTE. Each Borrower's and CML's obligations under
this ss.4 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which any Borrower or CML may have or have had against the Issuing Bank, any
Lender, any Agent or any beneficiary of a Letter of Credit. Each Borrower and
CML further agrees with the Issuing Bank and the Lenders that the Issuing Bank
and the Lenders shall not be responsible for, and each Borrower's and CML's
Reimbursement Obligations under ss.4.2 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among any Borrower,
CML, the beneficiary of any Letter of Credit or any financing institution or
other party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of any Borrower against the beneficiary of any Letter of
Credit or any such transferee. The Issuing Bank and the Lenders shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. Each Borrower and CML agrees that any action taken or
omitted by the Issuing Bank or any Lender under or in connection with each
Letter of Credit and the related drafts and documents, if done in good faith,
shall be binding upon such Borrower and CML and shall not result in any
liability on the part of the Issuing Bank or any Lender to such Borrower.
42
1. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4, the
Issuing Bank shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document 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, independent accountants and
other experts selected by the Issuing Bank. The Issuing Bank shall be fully
justified in failing or refusing to take any action under this Credit Agreement
unless it shall first have received such advice or concurrence of the Majority
Lenders as it reasonably deems appropriate or it shall first be indemnified to
its reasonable 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 Issuing Bank shall in all cases be fully protected in
acting, or in refraining from acting, under this Credit Agreement in accordance
with a request of the Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Lenders and all future
holders of the Notes or of a Letter of Credit Participation.
4.6 LETTER OF CREDIT FEE. Each Borrower shall, on the date of issuance,
or any extension or renewal of any Letter of Credit, pay a fee (in each case, a
"LETTER OF CREDIT FEE") to the Issuing Bank (i) in respect of each standby
Letter of Credit issued at the request of such Borrower equal to four percent
(4.00%) per annum of the face amount of such standby Letter of Credit, and (ii)
in respect of each documentary Letter of Credit issued at the request of such
Borrower equal to four percent (4.00%) per annum of the face amount of such
documentary Letter of Credit. The Issuing Bank shall, in turn, remit to each
Lender its PRO RATA portion of such Letter of Credit Fee. In addition, the
applicable Borrower shall pay to the Issuing Bank, for its own account, on the
date of issuance, or any extension or renewal of any Letter of Credit and at
such other time or times as such charges are customarily made by the Issuing
Bank, a fronting fee equal to one-half percent (0.50%) per annum of the face
amount of such Letter of Credit and the Issuing Bank's standard issuance,
processing, negotiation, amendment and administrative fees, determined in
accordance with customary fees and charges for similar facilities. For all
Letters of Credit issued prior to the Restatement Effective Date, the provisions
contained in ss.4.6 prior to the Restatement Effective Date shall govern.
4.7 EXISTING LETTERS OF CREDIT. CML, the Borrowers and the Lenders each
agree that (a) all letters of credit which have previously been issued by BKB
under the Existing Credit Agreement (the "EXISTING LETTERS OF CREDIT") for the
account of CML or any Borrower, shall be deemed Letters of Credit issued under
and governed by this Credit Agreement, (b) this Credit Agreement supersedes any
and all prior agreements between CML and the Borrowers and BKB with respect to
the Existing Letters of Credit, other than as specifically provided for in
ss.4.6, and (c) all the Existing Letters of Credit, from and after the
Restatement Effective Date, shall be subject to and governed by the terms of
this Credit Agreement.
1. CERTAIN GENERAL PROVISIONS.
2. COMMITMENT FEES. The Borrowers jointly and severally agree to pay to
the Administrative Agent the commitment and other fees described in the Fee
Letter as and when due and payable under the Fee Letter.
1. ADMINISTRATIVE AGENT'S FEE. The Borrowers jointly and severally
shall pay to the Administrative Agent an Administrative Agent's fee as provided
in the Fee Letter.
1. FUNDS FOR PAYMENTS.
2. PAYMENTS TO ADMINISTRATIVE AGENT. All payments of principal,
interest, Reimbursement Obligations, Unused Line Fees, Letter of Credit
Fees and any other amounts due
43
hereunder or under any of the other Loan Documents shall be made to the
Administrative Agent, for the respective accounts of the Lenders and
the Administrative Agent, at the Administrative Agent's Head Office or
at such other location in the Boston, Massachusetts area that the
Administrative Agent may from time to time designate, in each case in
immediately available funds.
1. NO OFFSET, ETC. All payments by the Borrowers hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless any
Borrower is compelled by law to make such deduction or withholding. If
any such obligation is imposed upon any Borrower with respect to any
amount payable by it hereunder or under any of the other Loan
Documents, such Borrower will pay to the Administrative Agent, for the
account of the Lenders or (as the case may be) the Administrative
Agent, on the date on which such amount is due and payable hereunder or
under such other Loan Document, such additional amount in Dollars as
shall be necessary to enable the Lenders or the Administrative Agent to
receive the same net amount which the Lenders or the Administrative
Agent would have received on such due date had no such obligation been
imposed upon such Borrower. Such Borrower will deliver promptly to the
Administrative Agent certificates or other valid vouchers for all taxes
or other charges deducted from or paid with respect to payments made by
such Borrower hereunder or under such other Loan Document.
1. COMPUTATIONS. All computations of interest on the Loans and of
Unused Line Fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 360-day year and paid for the actual
number of days elapsed. Whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension. The outstanding amount of the Loans as
reflected on the Note Records from time to time shall be considered correct and
binding on the applicable Borrower unless within five (5) Business Days after
receipt of any notice by the Administrative Agent or any of the Lenders of such
outstanding amount, the Administrative Agent or such Lender shall notify such
Borrower to the contrary.
1. INTENTIONALLY OMITTED.
2. INTENTIONALLY OMITTED.
3. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Administrative Agent by any central bank
or other fiscal, monetary or other authority (whether or not having the force of
law), shall:
(a) subject any Lender or the Administrative Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Credit Agreement, the other Loan Documents, any
Letters of Credit, such Lender's Commitment or the Loans (other than
taxes based upon or measured by the income or profits of such Lender or
the Administrative Agent), or
(b) materially change the basis of taxation (except for changes in
taxes on income or profits) of payments to any Lender of the principal
of or the interest on any Loans or any other
44
amounts payable to any Lender or the Administrative Agent under this
Credit Agreement or any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Lender, or
(d) impose on any Lender or the Administrative Agent any other
conditions or requirements with respect to this Credit Agreement, the
other Loan Documents, any Letters of Credit, the Loans, such Lender's
Commitment, or any class of loans, letters of credit or commitments of
which any of the Loans or such Lender's Commitment forms a part, and
the result of any of the foregoing is
(i) to increase the cost to any Lender of making, funding,
issuing, renewing, extending or maintaining any of the Loans or
such Lender's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Lender
or the Administrative Agent hereunder on account of such Lender's
Commitment, any Letter of Credit or any of the Loans, or
(iii) to require such Lender or the Administrative Agent to
make any payment or to forgo any interest or Reimbursement
Obligation or other sum payable hereunder, the amount of which
payment or forgone interest or Reimbursement Obligation or other
sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the
Administrative Agent from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Lender
or (as the case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the Administrative Agent for such additional cost, reduction,
payment or forgone interest or Reimbursement Obligation or other sum.
1. CAPITAL ADEQUACY. If after the date hereof any Lender or the
Administrative Agent determines that (i) the adoption of or change in any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital requirements for banks or bank
holding companies or any change in the interpretation or application thereof by
a court or governmental authority with appropriate jurisdiction, or (ii)
compliance by such Lender or the Administrative Agent or any corporation
controlling such Lender or the Administrative Agent with any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) of any such entity regarding capital adequacy, has the effect of
reducing the return on such Lender's or the Administrative Agent's capital as a
result of such Lender's obligations hereunder to a level below that which such
Lender or the Administrative Agent could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or the
Administrative Agent's then existing policies with respect to capital adequacy
and assuming full utilization of such entity's capital) by any amount deemed by
such Lender or (as the case may be) the Administrative Agent to be material,
then such Lender or the Administrative Agent may notify the Borrowers of such
fact. To the extent that the amount of such reduction in the return on capital
is not reflected in the Base Rate, the Borrowers agree to pay such Lender or (as
the case may be) the Administrative Agent for the amount of such reduction in
the return on capital as and when such reduction is determined upon presentation
by such Lender or (as the case may be) the Administrative
45
Agent of a certificate in accordance with ss.5.9 hereof. Each Lender shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
1. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to secs.5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Lender or the Administrative Agent to the
Borrowers, shall be conclusive, absent manifest error, that such amounts are due
and owing.
1. INTENTIONALLY OMITTED.
2. INTEREST AFTER DEFAULT.
3. OVERDUE AMOUNTS. Overdue principal and (to the extent permitted
by applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and payable on demand at a rate per annum
equal to two percent (2.00%) above the rate of interest otherwise
applicable thereto until such amount shall be paid in full (after as
well as before judgment).
1. AMOUNTS NOT OVERDUE. During the continuance of an Event of
Default the principal of the Loans and any of the PIK Notes not overdue
shall, until such Event of Default has been cured or remedied or such
Event of Default has been waived by the Majority Lenders pursuant to
ss.27, bear interest at a rate per annum equal to the rate of interest
applicable to overdue principal pursuant to ss.5.11.1.
1. COLLATERAL SECURITY AND GUARANTIES.
2. SECURITY OF BORROWERS. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of the
Borrowers, (with such exceptions as are acceptable to the Majority Lenders),
including, without limitation, the stock of all Borrowers, Guarantors (other
than CML) and Foreign Guarantors, and all intercompany obligations owing to the
Borrowers, in each case wherever located and whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which any of such
Borrower is a party.
1. GUARANTY, FOREIGN GUARANTIES AND SECURITY OF GUARANTORS. The
Obligations shall also be guaranteed pursuant to the terms of the Guaranty and
the Foreign Guaranties. The obligations of the Guarantors under the Guaranty
shall be in turn secured by a perfected first priority security interest
(subject only to Permitted Liens entitled to priority under applicable law) in
all of the assets of each such Guarantor (with such exceptions as are acceptable
to the Majority Lenders) and all intercompany obligations owing to the
Guarantors, in each case wherever located and whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which such
Guarantor is a party.
GUARANTY.
1. GUARANTY OF PAYMENT AND PERFORMANCE. Each of the Guarantors hereby
jointly and severally guarantees to the Lenders, the Issuing Bank and the
Administrative Agent the full and punctual payment when due (whether at stated
maturity, by required pre-payment, by acceleration or otherwise), as well as the
performance, of all of the Obligations including all such which would become due
but for the operation of the automatic stay pursuant to ss.362(a) of the
Federal Bankruptcy Code and the operation of secs.502(b) and 506(b) of the
Federal Bankruptcy Code. This Guaranty is an absolute, unconditional and
continuing guaranty of the full and punctual payment and performance of all of
the Obligations and not of their collectability only and is in no way
conditioned upon any requirement that any Agent, the Issuing Bank or any Lender
first attempt to collect any of the Obligations from the applicable Borrower or
resort to any collateral security or other means of obtaining payment. Should
any of the Borrowers default in the
46
payment or performance of any of the Obligations, the obligations of the
Guarantors hereunder with respect to such Obligations in default shall, upon
demand by the Administrative Agent, become immediately due and payable to the
Administrative Agent, for the benefit of the Lenders, the Issuing Bank and the
Administrative Agent, without demand or notice of any nature, all of which are
expressly waived by each of the Guarantors. Payments by the Guarantors hereunder
may be required by the Administrative Agent on any number of occasions. All
payments by any of the Guarantors hereunder shall be made to the Administrative
Agent, in the manner and at the place of payment specified therefor in ss.5
hereof, for the account of the Lenders, the Issuing Bank and the Administrative
Agent.
1. GUARANTORS' AGREEMENT TO PAY ENFORCEMENT COSTS, ETC. Each of the
Guarantors further jointly and severally agrees, as the principal obligor and
not as a guarantor only, to pay to the Administrative Agent, on demand, all
reasonable costs and expenses (including court costs and legal expenses,
including the allocated cost of staff counsel) incurred or expended by any
Agent, the Issuing Bank or any Lender in connection with the Obligations, this
Guaranty and the enforcement thereof, together with interest on amounts
recoverable under this ss.7 from the time when such amounts become due until
payment, whether before or after judgment, at the rate of interest for overdue
principal set forth in ss.5.11 hereof, PROVIDED that if such interest exceeds
the maximum amount permitted to be paid under applicable law, then such interest
shall be reduced to such maximum permitted amount.
1. WAIVERS BY THE GUARANTORS; LENDERS' FREEDOM TO ACT. Each of the
Guarantors agrees that the Obligations will be paid and performed strictly in
accordance with their respective terms, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any Agent, the Issuing Bank or any Lender with respect thereto.
Each of the Guarantors waives promptness, diligence, presentment, demand,
protest, notice of acceptance, notice of any Obligations incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshalling of assets of the applicable Borrower or any
other entity or other Person primarily or secondarily liable with respect to any
of the Obligations, and all suretyship defenses generally. Without limiting the
generality of the foregoing, each of the Guarantors agrees to the provisions of
any instrument evidencing, securing or otherwise executed in connection with any
Obligation and agrees that the obligations of such Guarantor hereunder shall not
be released or discharged, in whole or in part, or otherwise affected by (i) the
failure of any Agent, the Issuing Bank or any Lender to assert any claim or
demand or to enforce any right or remedy against the applicable Borrower or any
other entity or other person primarily or secondarily liable with respect to any
of the Obligations; (ii) any extensions, compromise, refinancing, consolidation
or renewals of any Obligation; (iii) any change in the time, place or manner of
payment of any of the Obligations or any rescissions, waivers, compromise,
refinancing, consolidation or other amendments or modifications of any of the
terms or provisions of this Credit Agreement, the other Loan Documents or any
other agreement evidencing, securing or otherwise executed in connection with
any of the Obligation, (iv) the addition, substitution or release of any entity
or other person primarily or secondarily liable for any Obligation; (v) the
adequacy of any rights which any Agent, the Issuing Bank or any Lender may have
against any collateral security or other means of obtaining repayment of any of
the Obligations; (vi) the impairment of any collateral securing any of the
Obligations, including without limitation the failure to perfect or preserve any
rights which any Agent, the Issuing Bank or any Lender might have in such
collateral security or the substitution, exchange, surrender, release, loss or
destruction of any such collateral security; or (vii) any other act or omission
which might in any manner or to any extent vary the risk of such Guarantor or
otherwise operate as a release or discharge of such Guarantor, all of which may
be done without notice to such Guarantor. To the fullest extent permitted by
law, each of the Guarantors hereby expressly waives any and all rights or
defenses arising by reason of (A) any "one action" or "anti-deficiency" law
which would otherwise prevent any Agent, the Issuing Bank or any Lender from
bringing any action, including any claim for a deficiency, or exercising any
other right or remedy (including any right of set-off), against such Guarantor
before or after such Agent's, the Issuing Bank's or such Lender's commencement
or completion of any foreclosure action, whether judicially, by exercise of
power of sale or otherwise, or (B)
47
any other law which in any other way would otherwise require any election of
remedies by any Agent, the Issuing Bank or any Lender.
1. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWERS. If for any reason
any of the Borrowers has no legal existence or is under no legal obligation to
discharge any of the Obligations, or if any of the Obligations have become
irrecoverable from such Borrower by reason of such Borrower's insolvency,
bankruptcy or reorganization or by other operation of law or for any other
reason, this Guaranty shall nevertheless be binding on each of the Guarantors to
the same extent as if each such Guarantor at all times had been the principal
obligor on all such Obligations. In the event that acceleration of the time for
payment of any of the Obligations is stayed upon the insolvency, bankruptcy or
reorganization of such Borrower, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of this Credit Agreement, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any Obligation shall be immediately due and payable
by each of the Guarantors.
1. SUBROGATION; SUBORDINATION.
POSTPONEMENT OF RIGHTS AGAINST BORROWERS. Until the final payment
and performance in full in cash of all of the Obligations: none of the
Guarantors shall exercise any rights against any Borrower arising as a
result of payment by each such Guarantor hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise, and
will not prove any claim in competition with any Agent, the Issuing
Bank or any Lender in respect of any payment hereunder in any
bankruptcy, insolvency or reorganization case or proceedings of any
nature; none of the Guarantors will claim any setoff, recoupment or
counterclaim against any Borrower in respect of any liability of any
such Guarantor to such Borrower; and each of the Guarantors waives any
benefit of and any right to participate in any collateral security
which may be held by any Agent, the Issuing Bank or any Lender.
SUBORDINATION. The payment of any amounts due with respect to any
indebtedness of the Borrowers for money borrowed or credit received now
or hereafter owed to any of the Guarantors is hereby subordinated to
the prior payment in full in cash of all of the Obligations. Each of
the Guarantors agrees that, after the occurrence of any default in the
payment or performance of any of the Obligations, such Guarantor will
not demand, xxx for or otherwise attempt to collect any such
indebtedness of any Borrower to such Guarantor until all of the
Obligations shall have been paid in full. If, notwithstanding the
foregoing sentence, any of the Guarantors shall collect, enforce or
receive any amounts in respect of such indebtedness while any
Obligations are still outstanding, such amounts shall be collected,
enforced and received by such Guarantor as trustee for the Lenders, the
Issuing Bank and the Administrative Agent and be paid over to the
Administrative Agent, for the benefit of the Lenders, the Issuing Bank
and the Administrative Agent, on account of the Obligations without
affecting in any manner the liability of the Guarantors under the other
provisions of this Guaranty.
PROVISIONS SUPPLEMENTAL. The provisions of this ss.7.5 shall be
supplemental to and not in derogation of any rights anD remedies of the
Lenders, the Issuing Bank and the Administrative Agent under any
separate subordination agreement which the Administrative Agent may at
any time and from time to time enter into with any of the Guarantors
for the benefit of the Lenders, the Issuing Bank and the Administrative
Agent.
1. SECURITY; SETOFF. Each of the Guarantors grants to each of the
Administrative Agent, the Issuing Bank and the Lenders, as security for the full
and punctual payment and performance of all of the Guarantors' obligations
hereunder, a continuing lien on and security interest in all securities or other
property belonging to each such Guarantor now or hereafter held by such Agent,
the Issuing Bank or such
48
Lender and in all deposits (general or special, time or demand, provisional or
final) and other sums credited by or due from such Agent, the Issuing Bank or
such Lender to such Guarantor or subject to withdrawal by such Guarantor.
Regardless of the adequacy of any collateral security or other means of
obtaining payment of any of the Obligations, each of the Administrative Agent,
the Issuing Bank and the Lenders is hereby authorized at any time and from time
to time, without notice to any of the Guarantors (any such notice being
expressly waived by each of the Guarantors) and to the fullest extent permitted
by law, to set off and apply such deposits and other sums against the
obligations of such Guarantor under this Guaranty, whether or not such Agent,
the Issuing Bank or such Lender shall have made any demand under this Guaranty
and although such obligations may be contingent or unmatured.
1. FURTHER ASSURANCES. Each of the Guarantors agrees that it will from
time to time, at the request of the Administrative Agent, do all such things and
execute all such documents as the Administrative Agent may consider necessary or
desirable to give full effect to this Guaranty and to perfect and preserve the
rights and powers of the Lenders, the Issuing Bank and the Administrative Agent
hereunder. Each of the Guarantors acknowledges and confirms that such Guarantor
itself has established its own adequate means of obtaining from the Borrowers on
a continuing basis all information desired by such Guarantor concerning the
financial condition of the Borrowers and that such Guarantor will look to the
Borrowers and not to any Agent, the Issuing Bank or any Lender in order for such
Guarantor to keep adequately informed of changes in any of the Borrowers'
financial condition.
1. TERMINATION. Notwithstanding any termination of this Guaranty, this
Guaranty shall continue to be effective or be reinstated, if at any time any
payment made or value received with respect to any Obligation is rescinded or
must otherwise be returned by any Agent, the Issuing Bank or any Lender upon the
insolvency, bankruptcy or reorganization of any Borrower, or otherwise, all as
though such payment had not been made or value received.
1. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon each of
the Guarantors, its successors and assigns, and shall inure to the benefit of
the Administrative Agent, the Issuing Bank and the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing sentence, each Lender may, in accordance with the provisions of
ss.20, assign or otherwise transfer this Credit Agreement, the other Loan
Documents or any other agreement or note held by it evidencing, securing or
otherwise executed in connection with the Obligations, or sell participations in
any interest therein, to any other entity or other person, and such other entity
or other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to such Lender herein. None of the Guarantors
may assign any of its obligations hereunder.
1. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers and, to the extent the representation relates to
CML, CML represents and warrants to the Lenders and the Administrative Agent as
follows:
1. CORPORATE AUTHORITY.
2. INCORPORATION; GOOD STANDING. Each of CML, the Borrowers and
each of their Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation, (ii) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation
and is duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified
would not have a materially adverse effect on the business, assets or
financial condition of CML, such Borrower or such Subsidiary.
49
1. AUTHORIZATION. The execution, delivery and performance of this
Credit Agreement and the other Loan Documents to which CML, any of the
Borrowers or any of their Subsidiaries is or is to become a party and
the transactions contemplated hereby and thereby (i) are within the
corporate authority of such Person, (ii) have been duly authorized by
all necessary corporate proceedings, (iii) do not conflict with or
result in any breach or contravention of any provision of law, statute,
rule or regulation to which CML, any of the Borrowers or any of their
Subsidiaries is subject or any judgment, order, writ, injunction,
license or permit applicable to CML, any of Borrower or any of their
Subsidiaries and (iv) do not conflict with any provision of the
corporate charter or bylaws of, or any agreement or other instrument
binding upon, CML, any of the Borrowers or any of their Subsidiaries.
1. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which CML, any of the
Borrowers or any of their Subsidiaries is or is to become a party will
result in valid and legally binding obligations of such Person
enforceable against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights
and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
1. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
CML, any of the Borrowers and any of their Subsidiaries of this Credit Agreement
and the other Loan Documents to which CML, any of the Borrowers or any of their
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
1. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 8.3
hereto, CML, the Borrowers and their Subsidiaries own all of the assets
reflected in the consolidated balance sheet of CML, the Borrowers and their
Subsidiaries as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
1. FINANCIAL STATEMENTS AND PROJECTIONS.
2. FINANCIAL STATEMENTS. There has been furnished to each of the
Lenders (a) the consolidated balance sheet of CML, the Borrowers and
their Subsidiaries as at the Balance Sheet Date, and the consolidated
statements of income and cash flows of CML, the Borrowers and their
Subsidiaries for the fiscal year then ended, certified by Deloitte and
Touche LLP and (b) the consolidated balance sheet of CML, the Borrowers
and their Subsidiaries as at May 2, 1998 and the consolidated
statements of income and cash flows of CML, the Borrowers and their
Subsidiaries for the fiscal quarters then ended. All such balance
sheets, statements of income and statements of cash flows have been
prepared in accordance with generally accepted accounting principles
and fairly present the consolidated financial condition of CML, the
Borrowers and their Subsidiaries as at the close of business on the
dates thereof and the results of operations for the fiscal year or
quarter, as the case may be, then ended. There are no contingent
liabilities of CML, any of the Borrowers or any of their Subsidiaries
as of May 2, 1998 involving material amounts, known to the officers of
CML or any the Borrowers, which were not disclosed in the balance sheet
as of May 2, 1998 or the notes related thereto.
1. PROJECTIONS. The projections of the annual operating budgets of
CML, the Borrowers and their Subsidiaries on a consolidated basis,
balance sheets and cash flow statements for the
50
1998 to 1999 fiscal years, copies of which have been delivered to each
Lender, disclose all assumptions made with respect to general economic,
financial and market conditions used in formulating such projections.
To the knowledge of CML, any of Borrowers or any of their Subsidiaries,
no facts exist that (individually or in the aggregate) would result in
any material change in any of such projections. The projections are
based upon reasonable estimates and assumptions, have been prepared on
the basis of the assumptions stated therein and reflect the reasonable
estimates of CML, the Borrowers and its Subsidiaries of the results of
operations and other information projected therein.
1. NO MATERIAL CHANGES, ETC.; SOLVENCY.
CHANGES. Since May 2, 1998 there has occurred no materially
adverse change in the condition (financial or otherwise), operations,
assets, liabilities and/or prospects of CML, the Borrowers and their
Subsidiaries other than as disclosed to the Administrative Agent and
the Lenders in writing (including the Monthly Budget attached as ANNEX
A hereto) on or prior to the Restatement Effective Date.
8.5.2. SOLVENCY. CML, each of the Borrowers and each of their
Subsidiaries, taken as a whole (after giving effect to the transactions
contemplated by this Credit Agreement and the other Loan Documents), is
Solvent. As used herein, "SOLVENT" shall mean such Person, (i) has
assets having a fair value in excess of its liabilities, (ii) has
assets having a fair value in excess of the amount required to pay its
liabilities on existing debts as such debts become absolute and
matured, and (iii) has, and expects to continue to have, access to
adequate capital for the conduct of its business and the ability to pay
its debts from time to time incurred in connection with the operation
of its business as such debts mature.
1. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of CML, the Borrowers and
their Subsidiaries possesses all franchises, patents, copyrights, trademarks,
trade names, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
1. LITIGATION. Except as set forth in SCHEDULE 8.7 hereto, there are no
actions, suits, proceedings or investigations of any kind pending or threatened
against CML, any of the Borrowers or any of their Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of CML, the Borrowers and
their Subsidiaries or materially impair the right of CML, the Borrowers and
their Subsidiaries, considered as a whole, to carry on business substantially as
now conducted by them, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not maintained on the
consolidated balance sheet of CML, the Borrowers and their Subsidiaries, or
which question the validity of this Credit Agreement or any of the other Loan
Documents, or any action taken or to be taken pursuant hereto or thereto.
1. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of CML, any of the
Borrowers nor any of their Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation that
has or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of CML, any of the Borrowers or any of
their Subsidiaries. None of CML, any of the Borrowers nor any of their
Subsidiaries is a party to any contract or agreement that has or is expected, in
the judgment of CML's officers, to have any materially adverse effect on the
business of CML, any of the Borrowers or any of their Subsidiaries.
1. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of CML, any of
the Borrowers nor any of their Subsidiaries is in violation of any provision of
its charter documents, bylaws, or any agreement
51
or instrument to which it may be subject or by which it or any of its properties
may be bound or any decree, order, judgment, statute, license, rule or
regulation, in any of the foregoing cases in a manner that could result in the
imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of CML, any of the Borrowers or any
of their Subsidiaries.
1. TAX STATUS. Each of CML, the Borrowers and their Subsidiaries (i)
have made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which any of them is
subject, (ii) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (iii)
have set aside on their books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. Except as set forth on SCHEDULE 8.10, there are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and none of the officers of CML or any of the Borrowers knows of
any basis for any such claim.
1. NO EVENT OF DEFAULT. No Default or Event of Default has occurred and
is continuing.
1. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of CML, any of the
Borrowers nor any of their Subsidiaries is a "holding company", or a "subsidiary
company" of a "holding company", or an affiliate" of a "holding company", as
such terms are defined in the Public Utility Holding Company Act of 1935; nor is
it an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.
1. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of CML, any of the Borrowers or any of their
Subsidiaries or any rights relating thereto.
1. PERFECTION OF SECURITY INTEREST. All filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Administrative Agent's security interest in the
Collateral (with such exceptions as are acceptable to the Majority Lenders). The
Collateral and the Administrative Agent's rights with respect to the Collateral
are not subject to any setoff, claims, withholdings or other defenses. CML, one
of the Borrowers or one of their Subsidiaries, as specified in the Security
Documents, is the owner of the Collateral free from any lien, security interest,
encumbrance and any other claim or demand, except for Permitted Liens.
1. CERTAIN AFFILIATE TRANSACTIONS. None of CML, any of the Borrowers
nor any of their Subsidiaries is a party to any transaction in violation of
ss.10.11. None of CML, any of Borrowers nor any of their Subsidiaries is a
party to any tax sharing agreement.
1. EMPLOYEE BENEFIT PLANS.
2. IN GENERAL. Each Employee Benefit Plan has been maintained and
operated in compliance in all material respects with the provisions of
ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited
transactions. The Borrowers have heretofore delivered to the
Administrative Agent the most recently completed annual report, Form
5500, with all required attachments, and actuarial statement required
to be submitted under ss.103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
52
1. TERMINABILITY OF WELFARE PLANS. Under each Employee Benefit
Plan which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, no benefits are due unless the event
giving rise to the benefit entitlement occurs prior to plan termination
(except as required by Title I, Subtitle B, Part 6 of ERISA). Any of
CML, the Borrowers or an ERISA Affiliate, as appropriate, may terminate
each such Plan at any time (or at any time subsequent to the expiration
of any applicable bargaining agreement) in the discretion of CML, such
Borrower or such ERISA Affiliate without liability to any Person other
than for benefits accrued prior to such termination.
1. GUARANTEED PENSION PLANS. None of CML, any of the Borrowers nor
any ERISA Affiliate maintains or operates a Guaranteed Pension Plan.
1. MULTIEMPLOYER PLANS. None of CML, any of the Borrowers nor any
ERISA Affiliate maintains or operates a Multiemployer Plan.
1. REGULATIONS U, X AND G. The proceeds of the Loans shall be used
solely to (a) pay in full, on the Restatement Effective Date, (i) all exit fees
and reimbursable expenses required to be paid under the Existing Credit
Agreement, and (ii) the Commitment Fee, the Agency Fee (each as defined in the
Fee Letter), and all other amounts required by the Amendment Agreement to be
paid on the Restatement Effective Date, and (b) for working capital and general
corporate purposes of the Borrowers. Each of the Borrowers will obtain Letters
of Credit solely for working capital purposes. No portion of any Loan is to be
used, and no portion of any Letter of Credit is to be obtained, for the purpose
of purchasing or carrying any "margin security" or "margin stock" as such terms
are used in Regulations U, X and G of the Board of Governors of the Federal
Reserve System, 12 C.F.R. Parts 221 and 224.
1. ENVIRONMENTAL COMPLIANCE. The Borrowers have taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and have determined that:
(a) none of CML, any Borrower, any of their Subsidiaries nor any
of their operations is in violation, or alleged violation, of any
judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising
under the Resource Conservation and Recovery Act ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act of
1980 as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the
Federal Clean Air Act, the Toxic Substances Control Act, or any state
or local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter "ENVIRONMENTAL LAWS"),
which violation could have a material adverse effect on the environment
or the business, assets or financial condition of CML, any of the
Borrowers or any of their Subsidiaries;
(b) except as set forth on SCHEDULE 8.18 attached hereto, none of
CML, any of the Borrowers nor any of their Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has
been identified by the United States Environmental Protection Agency
("EPA") as a potentially responsible party under CERCLA with respect to
a site listed on the National Priorities List, 40 C.F.R. Part 000
Xxxxxxxx X; (ii) that any hazardous waste, as defined by 42 U.S.C.
ss.6903(5), any hazardous substances as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental LawS
("HAZARDOUS SUBSTANCES") which any one of them has generated,
transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or
has ordered that CML, any Borrower or any
53
of their Subsidiaries conduct a remedial investigation, removal or
other response action pursuant to any Environmental Law; or (iii) that
it is or shall be a named party to any claim, action, cause of action,
complaint, or legal or administrative proceeding (in each case,
contingent or otherwise) arising out of any third party's incurrence of
costs, expenses, losses or damages of any kind whatsoever in connection
with the release of Hazardous Substances;
(c) except as set forth on SCHEDULE 8.18 attached hereto: (i) no
portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by CML, the Borrowers, their Subsidiaries or operators of
their properties, no Hazardous Substances have been generated or are
being used on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of CML, the Borrowers or their Subsidiaries, which releases
would have a material adverse effect on the value of any of the Real
Estate or adjacent properties or the environment; (iv) to the best of
CML's and the Borrowers' knowledge, there have been no releases on,
upon, from or into any real property in the vicinity of any of the Real
Estate which, through soil or groundwater contamination, may have come
to be located on, and which would have a material adverse effect on the
value of, the Real Estate; and (v) in addition, to the best of CML's
and the Borrowers' knowledge, any Hazardous Substances that have been
generated on any of the Real Estate have been transported offsite only
by carriers having an identification number issued by the EPA, treated
or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of CML's and
each Borrowers' knowledge, operating in compliance with such permits
and applicable Environmental Laws; and
(d) except as set forth on SCHEDULE 8.18 attached hereto, none of
CML, the Borrowers and their Subsidiaries, any Mortgaged Property or
any of the other Real Estate is subject to any applicable environmental
law requiring the performance of Hazardous Substances site assessments,
or the removal or remediation of Hazardous Substances, or the giving of
notice to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or as a
condition to the recording of any Mortgage or to the effectiveness of
any other transactions contemplated hereby.
1. SUBSIDIARIES, ETC. Set forth on SCHEDULE 8.19 hereto is a complete
and accurate list of all Subsidiaries of CML, each Borrower and each of their
Subsidiaries, showing as of the Restatement Effective Date (as to each such
Subsidiary) the jurisdiction of its incorporation, the number of shares of each
class of Capital Stock authorized and the number outstanding on the Restatement
Effective Date and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by CML, such Borrower or such Subsidiary at the
Restatement Effective Date and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar rights at the
date hereof. All of the outstanding Capital Stock of all such Subsidiaries has
been validly issued, is fully paid and non-assessable and is owned by CML or one
or more of its Subsidiaries free and clear of all liens except those created by
the Security Documents. Except as set forth on SCHEDULE 8.19 hereto, none of
CML, any of the Borrowers nor any of their Subsidiaries is engaged in any joint
venture or partnership with any other Person. None of the Guarantors (other than
the Borrowers and CML) or the Foreign Guarantors has assets having an aggregate
net book value in excess of $1,000,000.
54
1. BANK ACCOUNTS. SCHEDULE 8.20 sets forth the account numbers,
location and a description of all bank accounts of CML, each of the Borrowers
and each of their Subsidiaries.
1. CHIEF EXECUTIVE OFFICES. Set forth on SCHEDULE 8.21 hereto is a
complete and accurate list of the chief executive office of each of CML, each
Borrower and each of their Subsidiaries, at which location such Person keeps its
books and records.
FISCAL YEAR. Each of CML, each Borrower and each of their Subsidiaries
has a fiscal year which is the twelve (12) months ending on July 31 of each
year.
DISCLOSURE No representation or warranty made by CML or any of the
Borrowers in this Credit Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to any Agent or any Lender by or on
behalf of CML and the Borrowers in connection with any of the transactions
contemplated by any of the Loan Documents contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which they are made.
INSURANCE. CML, the Borrowers and each of their Subsidiaries maintains
with financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices, with the details of such coverage
being more fully described on SCHEDULE 8.24 hereto.
EQUITY DOCUMENTS, WISCONSIN DOCUMENTS. All representations and
warranties (a) (except by Wisconsin) set forth in the Wisconsin Documents and
(b) (except by a Lender) set forth in the Equity Documents and, to the knowledge
of CML and the Borrowers and each of their Subsidiaries, all representations and
warranties of Wisconsin and any Lender set forth, respectively, in the Wisconsin
Documents and the Equity Documents, were true and correct in all material
respects as of the Restatement Effective Date as if made on and as of such date,
except to the extent that such representations and warranties expressly relate
to an earlier date.
1. AFFIRMATIVE COVENANTS OF CML AND THE BORROWERS.
Each of CML and each of the Borrowers covenants and agrees that, so
long as any Loan, Unpaid Reimbursement Obligation, Letter of Credit, Note or any
other Obligation is outstanding or any Lender has any obligation to make any
Loans or the Issuing Bank has any obligation to issue, extend or renew any
Letters of Credit:
1. PUNCTUAL PAYMENT. Each Borrower will duly and punctually pay or
cause to be paid the principal and interest on its Loans, all Reimbursement
Obligations in respect of letters of credit issued at the request of such
Borrower, the Letter of Credit Fees relating to such Letters of Credit, its
Unused Line Fees, the Administrative Agent's fee and all other amounts provided
for in this Credit Agreement and the other Loan Documents to which CML, any of
the Borrowers or any of their Subsidiaries is a party, all in accordance with
the terms of this Credit Agreement and such other Loan Documents.
1. MAINTENANCE OF OFFICE. Each of CML and each of the Borrowers will
maintain its chief executive office at the location set forth on SCHEDULE 8.21
hereto, or at such other place in the United States of America as CML or such
Borrower shall designate upon prior written notice to the Administrative Agent,
where notices, presentations and demands to or upon such Person in respect of
the Loan Documents to which such Person is a party may be given or made.
1. RECORDS AND ACCOUNTS. Each of CML and each of the Borrowers will (i)
keep, and cause each of its Subsidiaries to keep, true and accurate records and
books of account in which full, true and
55
correct entries will be made in accordance with generally accepted accounting
principles and (ii) maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence and amortization
of its properties and the properties of its Subsidiaries, contingencies, and
other reserves.
1. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. CML and the
Borrowers will deliver to each of the Lenders:
(a) as soon as practicable, but in any event not later than ninety
(90) days after the end of each fiscal year of CML, the consolidated
balance sheet of CML and its Subsidiaries and the consolidating balance
sheets of CML and its Subsidiaries, each as at the end of such year,
and the related consolidated statement of income and consolidated
statement of cash flow and consolidating statements of income and
consolidating statements of cash flow for such year, each setting forth
in comparative form the figures for the previous fiscal year and all
such consolidated and consolidating statements to be in reasonable
detail, prepared in accordance with generally accepted accounting
principles, and all such consolidated statements to be certified
without qualification by Deloitte and Touche LLP or by other
independent certified public accountants satisfactory to the
Administrative Agent, together with a written statement from such
accountants to the effect that they have read a copy of this Credit
Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event
of Default, or, if such accountants shall have obtained knowledge of
any then existing Default or Event of Default they shall disclose in
such statement any such Default or Event of Default; PROVIDED that such
accountants shall not be liable to the Lenders for failure to obtain
knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal
quarters in each fiscal year of CML, copies of the unaudited
consolidated balance sheet of CML and its Subsidiaries and the
unaudited consolidating balance sheets of CML and its Subsidiaries,
each as at the end of such quarter, and the related consolidated
statement of income and consolidated statement of cash flow and
consolidating statements of income and consolidating statements of cash
flow for the portion of CML's fiscal year then elapsed, all in
reasonable detail and prepared in accordance with generally accepted
accounting principles, together with a certification by the principal
financial or accounting officer of CML that the information contained
in such financial statements fairly presents the financial position of
CML and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(c) as soon as practicable, but in any event within twenty (20)
days after the end of the first eleven months in each fiscal year of
CML, copies of the unaudited monthly consolidated balance sheet of CML
and its Subsidiaries and the unaudited consolidating balance sheets of
CML and its Subsidiaries, each as at the end of such month and the
related consolidated statement of income, consolidated statement of
cash flow, consolidating statements of income and consolidating
statements of cash flow for such month, each prepared in accordance
with generally accepted accounting principles, together with a
certification by the principal financial or accounting officer of CML
that the information contained in such financial statements fairly
presents the financial condition of CML and its Subsidiaries on the
date thereof (subject to quarter and year-end adjustments);
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a), (b) and (c) above, a statement
certified by the principal financial or accounting officer of CML in
substantially the form of EXHIBIT D hereto (a "COMPLIANCE CERTIFICATE")
and setting forth in reasonable detail computations evidencing
compliance with the covenants contained in ss.11 and (iF applicable)
reconciliations to reflect changes in generally accepted accounting
principles since the Balance Sheet Date;
56
(e) contemporaneously with the filing or mailing thereof, copies
of all material of a financial nature filed with the Securities and
Exchange Commission or sent to the stockholders of CML;
(f) (i) within three (3) Business Days after the end of each
calendar week or at such earlier time as the Administrative Agent may
reasonably request, a Borrowing Base Report setting forth the Borrowing
Bases as at the end of such calendar week or other date so requested by
the Administrative Agent and (ii) within fifteen (15) days after the
end of each calendar month, a Borrowing Base Report setting forth the
Borrowing Bases as at the end of such calendar month, containing such
adjustments to the applicable weekly Borrowing Base Reports as may be
appropriate;
(g) within fifteen (15) days after the end of each calendar month,
an Accounts Receivable aging report with respect to the Borrowers;
(h) from time to time as the Administrative Agent may request
detailed management prepared reports summarizing the Borrowers'
inventory, including information on the aging and obsolescence of such
inventory;
(i) as soon as practicable, but in any event not later than thirty
(30) days prior to the beginning of each fiscal year, management-
prepared financial forecasts of CML and its Subsidiaries with respect
to such fiscal year;
(j) prior to the opening by any Borrower of any new retail store,
distribution center or manufacturing facility at which Eligible
Inventory or Eligible NordicTrack Inventory, as the case may be, is to
be located, a supplement to SCHEDULE 2 hereto in the form of EXHIBIT I
hereto, listing any additions or deletions to the list of retail
stores, distribution centers and manufacturing facilities of the
Borrowers located in the United States, which supplement, together with
SCHEDULE 2 hereto and any prior supplements, shall be deemed to
constitute SCHEDULE 2 for all purposes of this Credit Agreement;
(k) when completed, copies of final or substantially final drafts
of any offering memorandum or prospectus prepared by or for CML or any
Borrower and relating to any proposed sale of stock or assets of CML or
any Borrower or any other Subsidiary of CML;
(l) from time to time at the request of any Agent or any Lender,
any current list of prospective purchasers of any stock or assets of
CML or any Borrower or any other Subsidiary of CML;
(m) any proposal letter or letter of intent or purchase agreement
or similar writing received or signed by CML or any Borrower or any
other Subsidiary of CML relating to the proposed sale of any stock or
assets of CML or any Borrower or any other Subsidiary of CML;
(n) from time to time at the request of the Administrative Agent
or any Lender, periodic updates on the status of any efforts to sell
the stock or assets of CML or any Borrower or any other Subsidiary of
CML;
(o) within three (3) Business Day after the end of each calendar
week, a report of the sales of each of the Borrowers for the
immediately preceding calendar week;
(p) as soon as practicable, but in any event within twenty (20)
days after the end of each month (commencing on August 20, 1998), a
report of the Capital Expenditures of each of the Borrowers for the
immediately preceding month;
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(q) as soon as practicable, but in any event within twenty (20)
days after the end of each month (commencing on August 20, 1998), a
report containing a comparison of (i) each Borrower's forecasted
monthly outstandings (including Loans and Letter of Credit Exposure),
Overadvances, and Borrowing Base availability to (ii) each Borrower's
actual monthly outstandings (including Loans and Letter of Credit
Exposure), Overadvances, and Borrowing Base availability, each for the
immediately preceding month; and
(r) from time to time such other financial data and information
(including accountants' management letters) as the Administrative Agent
or any Lender may reasonably request.
1. NOTICES.
2. DEFAULTS. The Borrowers and CML will promptly notify the
Administrative Agent and each of the Lenders in writing of the
occurrence of any Default or Event of Default. If any Person shall give
any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under (a) this Credit
Agreement or (b) any other note, evidence of indebtedness, indenture or
other obligation to which or with respect to which CML, any Borrower or
any of their Subsidiaries is a party or obligor, whether as principal,
guarantor, surety or otherwise and the aggregate amount of such
obligations referred to in this clause (b) in default is in excess of
$1,000,000, the Borrowers and CML shall forthwith give written notice
thereof to the Administrative Agent and each of the Lenders, describing
the notice or action and the nature of the claimed default.
1. ENVIRONMENTAL EVENTS. The Borrowers and CML will promptly give
notice to the Administrative Agent and each of the Lenders (i) of any
violation of any Environmental Law that CML, any of the Borrowers or
any of their Subsidiaries reports in writing or is reportable by such
Person in writing (or for which any written report supplemental to any
oral report is made) to any federal, state or local environmental
agency and (ii) upon becoming aware thereof, of any inquiry,
proceeding, investigation, or other action, including a notice from any
agency of potential environmental liability, of any federal, state or
local environmental agency or board, that has the potential to
materially affect the assets, liabilities, financial conditions or
operations of CML, any of the Borrowers or any of their Subsidiaries,
or the Administrative Agent's mortgages, deeds of trust or security
interests pursuant to the Security Documents.
1. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrowers and CML
will, immediately upon becoming aware thereof, notify the
Administrative Agent and each of the Lenders in writing of any setoff,
claims (including, with respect to the Real Estate, environmental
claims), withholdings or other defenses to which any of the Collateral,
or the Administrative Agent's rights with respect to the Collateral,
are subject.
1. NOTICE OF LITIGATION AND JUDGMENTS. CML and each of the
Borrowers will, and will cause each of their Subsidiaries to, give
notice to the Administrative Agent and each of the Lenders in writing
within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and
proceedings affecting CML, any of the Borrowers or any of their
Subsidiaries or to which CML, any of the Borrower or any of their
Subsidiaries is or becomes a party involving an uninsured claim against
CML, any of the Borrowers or any of their Subsidiaries that could
reasonably be expected to have a materially adverse effect on CML, any
of the Borrowers or any of their Subsidiaries and stating the nature
and status of such litigation or proceedings. Each of CML and each of
the Borrowers will, and will cause each of its Subsidiaries to, give
notice to the Administrative Agent and each of the Lenders, in writing,
in form and detail satisfactory to the Administrative Agent, within ten
(10)
58
days of any judgment not covered by insurance, final or otherwise,
against CML, any of the Borrowers or any of their Subsidiaries in an
amount in excess of $1,000,000.
1. NOTICE OF TAX REFUNDS. CML and each of the Borrowers will give
notice promptly to the Administrative Agent of such Person's receipt of
any federal or state tax refund in excess of $1,000,000 and will,
within fifteen (15) days of the end of each fiscal quarter, give notice
to the Administrative Agent of the aggregate amount of federal and
state tax refunds received by such Person during such fiscal quarter.
1. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. CML and the
Borrowers will do or cause to be done all things necessary to preserve and keep
in full force and effect their corporate existence, rights and franchises and
those of their Subsidiaries and will not, and will not cause or permit any of
their Subsidiaries to, convert to a limited liability company or a limited
liability partnership. They (i) will cause all of their properties and those of
their Subsidiaries used or useful in the conduct of their business or the
business of their Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (ii) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of CML or the Borrowers, may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (iii) will, and will
cause each of their Subsidiaries to, continue to engage primarily in the
businesses now conducted by them and in related businesses; PROVIDED that
nothing in this ss.9.6 shall prevent CML or the Borrowers from discontinuing the
operation and maintenance of any of their properties or any of those of their
Subsidiaries if such discontinuance is, in the judgment of CML or the Borrowers
as the case may be, desirable in the conduct of its or their business and that
do not in the aggregate materially adversely affect the business of CML, the
Borrowers and their Subsidiaries on a consolidated basis.
1. INSURANCE. Each of CML and each Borrower will, and will cause each
of their Subsidiaries to, maintain with financially sound and reputable insurers
having an A.M. Best rating of not less than A- (or an equivalent rating
reasonably satisfactory to the Administrative Agent) (except that NordicTrack's
workers' compensation insurance may be self-insured) insurance with respect to
its properties and business against such casualties and contingencies as shall
be in accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as described on SCHEDULE 8.24 hereto and as may
be reasonable and prudent and in accordance with the terms of the Security
Agreement. Each of CML and each Borrower will, and will cause each of their
Subsidiaries to, maintain insurance on the Mortgaged Properties in accordance
with the terms of the Mortgages.
1. TAXES. Each of CML and each Borrower will, and will cause each of
their Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if CML, such Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and PROVIDED FURTHER that CML, each
Borrower and each Subsidiary of such Persons will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
59
1. INSPECTION OF PROPERTIES AND BOOKS, ETC.
2. GENERAL. Each of CML and each Borrower shall permit the
Lenders, through the Administrative Agent or any of the Lenders' other
designated representatives, to visit and inspect any of the properties
of CML, any of the Borrowers or any of their Subsidiaries, to examine
the books of account of CML, the Borrowers and their Subsidiaries (and
to make copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of the Borrowers and their Subsidiaries
with, and to be advised as to the same by, its and their officers, all
at such reasonable times and intervals as the Administrative Agent or
any Lender may reasonably request.
9.9.2. INVENTORY REPORTS AND APPRAISALS. From time to time, upon
the request of the Administrative Agent, the Borrowers will obtain and
deliver to the Administrative Agent a report of an independent
collateral auditor or appraiser satisfactory to the Administrative
Agent (which may be affiliated with one of the Lenders) with respect to
the inventory components included in the Borrowing Bases, which report
(i) shall indicate whether or not the information set forth in the
Borrowing Base Report most recently delivered is accurate and complete
in all material respects based upon a review by such auditors of the
inventory (including verification as to the value, location and
respective types) and (ii) shall, in any event, be not less extensive
in scope than the Xxxxxx Xxxxxxxx Report delivered to the
Administrative Agent prior to the Restatement Effective Date. All such
collateral value reports shall be conducted and made at the expense of
the applicable Borrower.
9.9.3. COMMERCIAL FINANCE EXAMINATIONS. From time to time, upon
the Administrative Agent's request, CML and the Borrowers shall permit
the Administrative Agent's commercial finance examiners to conduct
commercial finance examinations of CML's, the Borrowers' and their
Subsidiaries' property, all at such reasonable times and intervals as
the Administrative Agent may reasonably request. All such commercial
finance examinations shall be conducted and made at the expense of the
Borrowers.
9.9.4. APPRAISALS. From time to time, upon the request of the
Administrative Agent, the Borrowers will obtain and deliver to the
Administrative Agent appraisal reports in form and substance and from
appraisers satisfactory to the Administrative Agent, stating the then
current fair market, orderly liquidation and forced liquidation values
of all or any portion of the equipment or real estate owned by CML, any
of the Borrowers or any of their Subsidiaries. From time to time, upon
the request of the Administrative Agent, the Borrowers will obtain and
deliver to the Administrative Agent appraisal reports in form and
substance and from appraisers satisfactory to the Administrative Agent
stating the then current business value of each of CML, each Borrower
and their Subsidiaries. No later than June 30th of each year, the
Borrowers will obtain and deliver to the Administrative Agent appraisal
reports in form and substance and from appraisers satisfactory to the
Administrative Agent, stating the then current fair market value of (i)
NordicTrack's Mortgaged Property and (ii) NordicTrack's machinery and
equipment. All such appraisals referred to in this ss.9.9.4 shall be
conducted and made at the expense of the Borrowers.
9.9.5. ENVIRONMENTAL ASSESSMENTS. Whether or not an Event of
Default shall have occurred, upon prior notice to CML and the
Borrowers, the Administrative Agent may, from time to time, in its
discretion for the purpose of assessing and ensuring the value of any
Mortgaged Property, obtain one or more environmental assessments or
audits of such Mortgaged Property prepared by a hydrogeologist, an
independent engineer or other qualified consultant or expert approved
by the Administrative Agent to evaluate or confirm (i) whether any
Hazardous Materials are present in the soil or water at such Mortgaged
Property and (ii) whether the use and operation of such Mortgaged
Property complies with all Environmental Laws. Environmental
assessments may include without limitation detailed visual inspections
of such Mortgaged Property including any and all storage areas, storage
tanks, drains, dry xxxxx and leaching areas, and the taking of soil
samples, surface water samples and ground water samples, as well as
such other investigations or analyses as the Administrative Agent deem
appropriate. All such environmental assessments shall be
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conducted and made at the expense of the Borrowers. Prior to requiring
that such inspections be performed, the Administrative Agent shall
discuss with CML and the Borrowers the views of CML and the Borrowers
as to whether the results of such inspections would be confidential and
would be required to be reported to governmental authorities and the
consequences of potential findings from such inspections.
9.9.6. COMMUNICATIONS WITH ACCOUNTANTS. Each of CML and each
Borrower authorizes the Administrative Agent and, if accompanied by the
Administrative Agent, the Lenders to communicate directly with CML's
and the Borrowers' independent certified public accountants and
authorizes such accountants to disclose to the Administrative Agent and
the Lenders any and all financial statements and other supporting
financial documents and schedules including copies of any management
letter with respect to the business, financial condition and other
affairs of CML, any of the Borrowers or any of their Subsidiaries. At
the request of the Administrative Agent, CML and the Borrowers shall
deliver a letter addressed to such accountants instructing them to
comply with the provisions of this ss.9.9.6.
9.9.7. COMMUNICATIONS WITH OTHER REPRESENTATIVES. CML and each of
the Borrowers hereby irrevocably authorizes each Lender and its
representatives, agents and counsel (each referred to in this ss.9.9.7
as a "LENDER REPRESENTATIVE") to have discussions directly witH any
representatives or agents (including Xxxxxx Brothers) engaged by CML or
any Borrower to assist in selling any of the stock or assets of CML or
any Borrower or any other Subsidiary of CML, and has authorized and
directed and will continue to authorize and direct such representatives
and agents to have such discussions with the Lenders and their Lender
Representatives. Any such discussions between any Lender or its Lender
Representative and any such representative or agent engaged by CML or
any Borrower shall be subject to prior notice given by such Lender or
its Lender Representative to CML or such Borrower, and an opportunity
given to CML or such Borrower to participate in such discussions.
1. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of CML
and each Borrower will, and will cause each of their Subsidiaries to, comply
with (i) the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws, (ii) the provisions of its charter documents
and by-laws, (iii) all agreements and instruments by which it or any of its
properties may be bound and (iv) all applicable decrees, orders, and judgments.
If any authorization, consent, approval, permit or license from any officer,
agency or instrumentality of any government shall become necessary or required
in order that CML, any of the Borrowers or any of their Subsidiaries may fulfill
any of its obligations hereunder or any of the other Loan Documents to which
CML, such Borrower or such Subsidiary is a party, CML or such Borrower will, or
(as the case may be) will cause such Subsidiary to, immediately take or cause to
be taken all reasonable steps within the power of CML or such Borrower or such
Subsidiary to obtain such authorization, consent, approval, permit or license
and furnish the Administrative Agent and the Lenders with evidence thereof.
1. INVENTORY RESTRICTIONS. Each of the Borrowers shall cause all
Eligible Inventory and, in the case of NordicTrack, all Eligible NordicTrack
Inventory, to be located at all times solely at Permitted Inventory Locations,
and to be sold or otherwise disposed of in the ordinary course of such
Borrower's business, consistent with past practices or as required pursuant to
the terms of this Credit Agreement.
1. USE OF PROCEEDS. Each Borrower will use the proceeds of its Loans
and will obtain Letters of Credit solely for the purposes set forth in ss.8.17.
1. ADDITIONAL MORTGAGED PROPERTY. If, after the Original Closing Date,
CML, any of the Borrowers or any of their Subsidiaries acquires real estate used
as a manufacturing or warehouse facility, CML or such Borrower shall, or shall
cause such Subsidiary to, forthwith deliver to the Administrative Agent a fully
executed mortgage or deed of trust over such real estate, in form and substance
satisfactory to the Administrative
61
Agent, together with title insurance policies, surveys, evidences of insurance
with the Administrative Agent named as loss payee and additional insured, legal
opinions and other documents and certificates with respect to such real estate
as was required for Real Estate of NordicTrack as of the Original Closing Date.
CML and each Borrower further agrees that, following the taking of such actions
with respect to such real estate, the Administrative Agent shall have for the
benefit of the Lenders and the Administrative Agent a valid and enforceable
first priority mortgage or deed of trust over such real estate, free and clear
of all title defects and encumbrances except for Permitted Liens.
AGENCY ACCOUNT AGREEMENTS. The Borrowers have delivered to the
Administrative Agent Agency Account Agreements in form and substance
satisfactory to the Administrative Agent from each of the Agency Account
Institutions. Each of CML and the Borrowers will, and will cause each of their
Subsidiaries to, use its best efforts to obtain Agency Account Agreements from
each other depository institution with which any of the Borrowers or any of the
Guarantors has an account.
INVESTMENTS IN BORROWERS. Within five (5) Business Days of receipt by
CML of any tax refund from any governmental authority or any other funds
received by CML from a third party, CML will invest all such refunds and other
funds in the Borrowers as subordinated loans or as contributions to capital.
1. OWNERSHIP OF SUBSIDIARIES. Except as otherwise permitted by
ss.10.4.2, ss.10.5.2 or ss.10.15 of this Credit Agreement, (a) CML will maintain
legal and beneficial ownership of one hundred percent (100%) of the equity
interests of each of the Guarantors (other than CML and NA) and (b) NT will
maintain legal and beneficial ownership of one hundred percent (100%) of the
equity interests of NA.
1. COLLATERAL NOTES. In addition to the NordicTrack Notes and the S&H
Notes, the Borrowers agree that with respect to any or all of the Mortgaged
Properties, they will execute and deliver or cause to be executed and delivered
such Collateral Notes as the Administrative Agent may request, it being
understood, however, that (a) the aggregate of all payments or recoveries on
such Collateral Notes shall not exceed the amount of the Obligations (exclusive
of the Collateral Notes), and (b) any payments or recoveries on such Collateral
Notes shall be credited to the unpaid amount of the Obligations and in such
order of application as may be required by ss.3.3 and ss.14.4 hereof. In the
event that the appraised value of any Mortgaged Property, a lien on which
secures any of the Collateral Notes, exceeds the amount of the Obligations
secured by the applicable Collateral Note, the applicable Borrower will execute
and deliver such amended Collateral Notes, amendments to Mortgages and other
documents, and will obtain such endorsements to the Title Policy covering such
Mortgaged Property, so as to reflect such altered appraised value.
FURTHER ASSURANCES; ADDITIONAL LOCATIONS.
FURTHER ASSURANCES.
(a) CML and each Borrower will, and will cause each of their
Subsidiaries to, cooperate with the Lenders and the Administrative
Agent and execute such further instruments and documents as the Lenders
or the Administrative Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Credit
Agreement and the other Loan Documents.
(b) CML and each Borrower will, and will cause each of their
Subsidiaries to, cooperate with the Lenders and the Administrative
Agent, and execute such further instruments and documents, including
without limitation, the execution and delivery of any amendments to the
Foreign Guaranties and the Foreign Pledge Agreements or any other
instruments or documents
62
related thereto, deemed appropriate by the Administrative Agent or any
of the Lenders as a result of amending and restating the Existing
Credit Agreement.
(c) NordicTrack will, (i) within thirty (30) days following the
Restatement Effective Date, (A) execute and deliver an amended and
restated Mortgage to the Administrative Agent in respect of each of the
Mortgaged Properties located in Minnesota, (B) cause its counsel to
deliver a favorable legal opinion, in form and substance satisfactory
to the Lenders, in connection with the execution and delivery of such
Mortgages, and (ii) within thirty (30) days following the delivery of
such Mortgages, deliver (A) a new Title Policy, or (B) new endorsements
to each existing Title Policy with respect to each such Mortgage, and
(iii) execute such further instruments and documents deemed appropriate
by the Administrative Agent or any of the Lenders as a result of
amending any such Mortgage. The form and substance of each such
Mortgage, and each new Title Policy or endorsement shall be
satisfactory to the Administrative Agent.
(d) CML and each Borrower will, and will cause each of their
Subsidiaries to, (i) within thirty (30) days following the Restatement
Effective Date, deliver (A) a new Title Policy, or (B) a new
endorsements to each existing Title Policy with respect to each
Mortgage, and (ii) execute such further instruments and documents
deemed appropriate by the Administrative Agent or any of the Lenders as
a result of amending the Mortgages. The form and substance of each such
endorsement shall be satisfactory to the Administrative Agent.
ADDITIONAL LOCATIONS. Prior to the opening by any Borrower of any
new retail store, distribution center or manufacturing facility at
which Eligible Inventory or Eligible NordicTrack Inventory, as the case
may be, is to be located, such Borrower shall take all actions
necessary or advisable, under applicable law, to establish and perfect
the Administrative Agent's security interest in the Collateral located
or to be located at such retail store, distribution center or
manufacturing facility (with such exceptions as are acceptable to the
Majority Lenders).
1. FURTHER ASSURANCES AS TO TRUST. CML will take all steps reasonably
requested by the Administrative Agent or any of the Lenders which are necessary
to grant in favor of the Administrative Agent, for the benefit of the Lenders
and the Administrative Agent, a security interest in all of CML's right, title
and interest in and to the Trust and the Trust Assets, and all proceeds thereof,
to the extent that such grant of a security interest by CML would not breach any
of CML's obligations under the Trust Agreement or limit CML's performance of its
obligations under the Trust.
1. SALE OF S&H. On the PIK Date CML shall (a) immediately commence the
sale of S&H, and (b) consummate and complete the sale of S&H within 120 days of
the PIK Date for Net Cash Proceeds from such sale sufficient to cause all the
Loans, PIK Notes, and all other Obligations to be paid in full and all Letters
of Credit to be cash collateralized on terms satisfactory to the Lenders.
1. CERTAIN NEGATIVE COVENANTS OF CML AND THE BORROWERS.
Each of CML and each of the Borrowers covenants and agrees that, so
long as any Loan, Unpaid Reimbursement Obligation, Letter of Credit, Note or any
other Obligation is outstanding or any Lender has any obligation to make any
Loans or the Issuing Bank has any obligations to issue, extend or renew any
Letters of Credit:
10.1 RESTRICTIONS ON INDEBTEDNESS. Neither CML nor any of the Borrowers
will, and none will permit any of their Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
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(a) Indebtedness to the Lenders and the Administrative Agent
arising under any of the Loan Documents;
(b) current liabilities of CML, such Borrower or such Subsidiary
incurred in the ordinary course of business not incurred through (i)
the borrowing of money, or (ii) the obtaining of credit except for
credit on an open account basis customarily extended and in fact
extended in connection with normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be
made in accordance with the provisions of ss.9.8;
(d) Indebtedness in respect of judgments or awards that have been
in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which CML,
such Borrower or such Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which
a stay of execution shall have been obtained pending such appeal or
review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
(f) Subordinated Debt not exceeding $41,593,000 in aggregate
principal amount at any time outstanding;
(g) obligations under Capitalized Leases and purchase money
Indebtedness incurred in connection with the acquisition of any real or
personal property by CML, such Borrower or such Subsidiary, in each
case which were outstanding as of March 6, 1998;
(h) Indebtedness not otherwise permitted by thisss.10.1 existing
on the date hereof and listed and described on SCHEDULE 10.1 hereto;
(i) Indebtedness of a Guarantor which is a Subsidiary of any
Borrower to such Borrower in respect of loans permitted by ss.10.3(e);
(j) Indebtedness of any Borrower to CML in respect of Investments
by CML in such Borrower permitted under ss.10.3(i);
(k) Indebtedness of NordicTrack under the Monogram Credit Card
Program and the GE Capital Credit Card Program;
(l) Indebtedness consisting of guaranties by CML or any of its
Subsidiaries of obligations of any direct or indirect Subsidiaries of
such Person in respect of operating leases of such Subsidiary;
(m) Indebtedness of CML to any Borrower in respect of Investments
by such Borrower in CML permitted under ss.10.3(k);
(n) Indebtedness consisting of the guaranty by CML of the
liabilities of NordicTrack to Air Express International Corporation
("AEI CORP.") for services rendered by AEI Corp. to NT and/or NA under
air waybills or Bills of Lading issued by AEI Corp. prior to September
16, 1998 up to an amount not in excess of $1,500,000; and
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(o) Indebtedness to Wisconsin arising under (i) the Wisconsin
Subordinated Note, in an aggregate principal amount not to exceed
$20,000,000, and (ii) the Wisconsin Guaranties.
10.2 RESTRICTIONS ON LIENS. Neither CML nor any of the Borrowers will,
and none will permit any of their Subsidiaries to, (i) create or incur or suffer
to be created or incurred or to exist any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest of any kind upon any of its
property or assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (ii) transfer any of such property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (iii) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement; (iv)
suffer to exist for a period of more than thirty (30) days after the same shall
have been incurred any Indebtedness or claim or demand against it that if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors; or (v) sell, assign, pledge or
otherwise transfer any accounts, contract rights, general intangibles, chattel
paper or instruments, with or without recourse; PROVIDED that CML, any of the
Borrowers and any of their Subsidiaries may create or incur or suffer to be
created or incurred or to exist:
(a) liens in favor of such Borrower on all or part of the assets
of Subsidiaries of such Borrower securing Indebtedness owing by
Subsidiaries of such Borrower to such Borrower;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties
other than Mortgaged Properties to secure claims for labor, material or
supplies in respect of obligations not overdue;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties other than Mortgaged Properties in respect
of judgments or awards, the Indebtedness with respect to which is
permitted by ss.10.1(d);
(e) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens on properties other than Mortgaged Properties, in
existence less than 120 days from the date of creation thereof in
respect of obligations not overdue;
(f) encumbrances on Real Estate other than the Mortgaged Property
consisting of easements, rights of way, zoning restrictions,
restrictions on the use of real property and defects and irregularities
in the title thereto, landlord's or lessor's liens under leases to
which CML, any of the Borrowers or any of their Subsidiaries is a
party, and other minor liens or encumbrances none of which in the
opinion of CML or such Borrower interferes materially with the use of
the property affected in the ordinary conduct of the business of CML,
such Borrower or their Subsidiaries, as the case may be, which defects
do not individually or in the aggregate have a materially adverse
effect on the business of CML or such Borrower, as the case may be
individually or of CML, the Borrowers and their Subsidiaries on a
consolidated basis;
(g) liens existing on the date hereof and listed on SCHEDULE 10.2
hereto;
(h) liens to secure Capitalized Lease obligations of the type and
amount permitted by ss.10.1(g), so long as such liens cover only the
property subject to such Capitalized Leases, and purchase money
security interests in or purchase money mortgages on real or personal
property other than Mortgaged Properties acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by ss.10.1(g), incurred in connection with the
65
acquisition of such property, which security interests or mortgages
cover only the real or personal property so acquired;
(i) liens and encumbrances on each Mortgaged Property as and to
the extent permitted by the Mortgage applicable thereto;
(j) liens in favor of the Administrative Agent under the Loan
Documents; and
(k) liens on assets of NordicTrack granted in accordance with the
Monogram Credit Card Program and the GE Capital Credit Card Program.
10.3 RESTRICTIONS ON INVESTMENTS. Neither CML nor any of the Borrowers
will, and none will permit any of their Subsidiaries to, make or permit to exist
or to remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by CML or such Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess
of $1,000,000,000 and money market accounts of brokerage firms
acceptable to the Administrative Agent;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States
of America or any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if rated by
Xxxxx'x Investors Services, Inc., and not less than "A 1" if rated by
Standard and Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc.;
(d) Investments existing on the date hereof and listed on SCHEDULE
10.3 hereto;
(e) Investments by any Borrower in any Subsidiary of that Borrower
that is a Guarantor in the form of loans made in cash;
(f) Investments consisting of the Guaranty;
(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by ss.10.5.2;
(h) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the
ordinary course of business not to exceed $2,000,000 in the aggregate
at any time outstanding;
(i) Investments by CML in any of the Borrowers in the form of
contributions to capital, subordinated loans or a repayment of a loan
previously made to such Borrower so long as such entities remain
Borrowers hereunder;
(j) Investments consisting of guaranties by CML or any of its
Subsidiaries of obligations of any direct or indirect Subsidiaries of
such Person in respect of operating leases of such Subsidiary;
(k) Investments by any Borrower in CML in the form of
distributions, subordinated loans or a repayment of a loan previously
made to CML by such Borrower, provided such Investment would be
permitted under ss.10.4 hereof; and
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(l) Investments consisting of the guaranty by CML of the
liabilities of NordicTrack to AEI Corp. for services rendered by AEI
Corp. to NT and/or NA under air waybills or Bills of Lading issued by
AEI Corp. prior to September 16, 1998 up to an amount not in excess of
$1,500,000.
PROVIDED, HOWEVER, that, with the exception of loans and advances referred to in
ss.10.3(h), such Investments will be considered Investments permitted by this
ss.10.3 only if all actions have been taken to the satisfaction of the
Administrative Agent to provide to the Administrative Agent, for the benefit of
the Lenders and the Administrative Agent, a first priority perfected security
interest in all of such Investments free of all encumbrances other than
Permitted Liens.
10.4 DISTRIBUTIONS AND RESTRICTED PAYMENTS.
10.4.1. INTERCOMPANY DISTRIBUTIONS AND RESTRICTED PAYMENTS. The
Borrowers will not make any Restricted Payments, PROVIDED HOWEVER, that
the Borrowers may make Restricted Payments to CML (a) in amounts
required to pay income and other taxes and governmental levies owed or
payable by CML, and (b) in amounts required to pay Approved Budgeted
Expenses, in the case of each of the foregoing clauses (a) and (b),
such amounts to be paid by CML not later than five (5) Business Days
after the date on which the relevant Restricted Payment to CML in
respect thereof is made. CML will not incur any payment obligations or
expenses except for (x) those permitted to be funded by Restricted
Payments in accordance with the provisions of the immediately foregoing
sentence, (y) those permitted to be funded with the net proceeds from
the sale of any of the assets described on SCHEDULE 10.5.2 hereto in
accordance with the provisions of ss.10.5.2(b); PROVIDED that in the
case of any such payment obligations or expenses of CML incurred in
accordance with the foregoing clause (y), the amount of payment
obligations or expenses permitted to be funded by Restricted Payments
in accordance with the provisions of the immediately foregoing sentence
shall be reduced dollar for dollar by the amount of such payment
obligations or expenses incurred in accordance with the foregoing
clause (y). The Borrowers will not make any Restricted Payments to CML
for the purpose of funding (A) payments of interest on the Subordinated
Debentures if any Event of Default is continuing, (B) any prepayment,
redemption or repurchase of any of the Subordinated Debentures, or (C)
any payment, prepayment, redemption or repurchase of, on or in respect
of any Wisconsin Subordinated Note or any other Wisconsin Document, to
the extent that such payment, prepayment, redemption or repurchase
would be prohibited by the Intercreditor Agreement.
10.4.2. CML DISTRIBUTIONS. CML will not make any Distributions
other than
(a) purchases or redemptions by CML of the stock of CML
resulting solely from any holder of any stock option issued by CML
paying (a) all or a portion of the exercise price of such stock
option or (b) any taxes due from such holder as a result of the
exercise of such stock option, by such holder's relinquishment of
rights under such stock option, and
(b) a distribution by CML, to holders of its common stock,
of shares of stock of NT (an "NT SPIN-OFF"), PROVIDED THAT, (i)
prior to any such distribution, CML and the Borrowers have (A)
permanently reduced the Total Commitment to not more than
$35,000,000, and (B) prepaid all outstanding Loans such that, as
of April 1, 1999, the outstanding Loans and Letter of Credit
Exposure of CML and the Borrowers does not exceed $35,000,000 in
the aggregate, (ii) all (if any) Net Cash Proceeds from any such
distribution are applied to prepay the Loans as required by
ss.3.2.4, (iii) concurrently with receipt of any such Net Cash
Proceeds by CML or any of its Subsidiaries, the Total Commitment
shall be permanently reduced as required by ss.2.3.3, (iv) the
terms and documentation for such NT Spin-Off are reasonably
satisfactory to the Majority Lenders,
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and (v) prior to such NT Spin-Off, the Loan Documents shall have
been amended in all respects deemed appropriate by the
Administrative Agent and the Majority Lenders.
10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
10.5.1. MERGERS AND ACQUISITIONS. Neither CML nor any of the
Borrowers will, and none will permit any of their Subsidiaries to,
become a party to any merger or consolidation, or agree to or effect
any asset acquisition or stock acquisition (other than the acquisition
of assets in the ordinary course of business consistent with past
practices).
10.5.2. DISPOSITION OF ASSETS. Neither CML nor any of the
Borrowers will, and none will permit any of their Subsidiaries to,
become a party to or agree to or effect any disposition of assets,
other than (a) the disposition of assets in the ordinary course of
business, consistent with past practices, (b) the disposition of any of
the assets listed and described on SCHEDULE 10.5.2 hereto so long as
such assets are sold on terms consented to by the Administrative Agent
and the Majority Lenders and so long as the net proceeds from the sale
of such assets are deposited in the applicable Concentration Account
and applied to the Obligations in accordance with the applicable
provisions of ss.3.3 hereof; PROVIDED that CML shall be permitted to
pay with such net proceeds, promptly after receipt of such net
proceeds, any expenses (and CML shall be permitted to reduce the amount
of such net proceeds which are required to be applied to the
Obligations by the amount of any such expenses so paid by CML) which
would otherwise be permitted to be funded by Restricted Payments in
accordance with the provisions of ss.10.4.1, (c) the termination or
assignment of store leases of any Borrower or its Subsidiaries;
provided that all Net Cash Proceeds from any such termination or
assignment referred to in this clause (c) are applied to prepay the
Loans of the applicable Borrower, or, in the case of CML, any of the
Borrowers as required by ss.3.2.4, (d) the sale of accounts receivable
of NordicTrack to General Electric Capital Corporation in accordance
with the GE Capital Credit Card Program Agreement, and (e) the sale by
CML of NT; PROVIDED that (i) concurrently with such sale, all principal
of and interest on all NordicTrack Loans and all PIK Notes issued or
then required to be issued pursuant to ss.2.5 are paid in full and all
Letters of Credit issued for the account of NordicTrack are cash
collateralized on terms satisfactory to the Lenders, (ii) any Net Cash
Proceeds from any such sale which are remaining following the payments
made pursuant to the preceding subclause (i) shall be applied to prepay
the S&H Loans as required by ss.3.2.4, (iii) concurrently with receipt
of such Net Cash Proceeds by CML or any of its Subsidiaries, the Total
Commitment shall be permanently reduced as required by ss.2.3.3, (iv)
the terms and documentation for such sale are reasonably satisfactory
to the Majority Lenders, and (v) prior to such sale, the Loan Documents
shall have been amended in all respects deemed appropriate by the
Administrative Agent and the Majority Lenders.
10.6. SALE AND LEASEBACK. Neither CML nor any of the Borrowers will,
and none will permit any of their Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby CML, any of the Borrowers or any of their
Subsidiaries shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that CML, any of the
Borrowers or any of their Subsidiaries intends to use for substantially the same
purpose as the property being sold or transferred, other than the sale and
subsequent leaseback described on Schedule 10.6.
10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Neither CML nor any of the
Borrowers will, and none will permit any of their Subsidiaries to, (i) use any
of the Real Estate or any portion thereof for the handling, processing, storage
or disposal of Hazardous Substances in violation of Environmental Laws, (ii)
cause or permit to be located on any of the Real Estate any underground tank or
other underground storage receptacle for Hazardous Substances in violation of
Environmental Laws, (iii) generate any Hazardous Substances on any of the Real
Estate in violation of Environmental Laws, (iv) conduct any activity at any Real
Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or
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threatened release of Hazardous Substances on, upon or into the Real Estate or
(v) otherwise conduct any activity at any Real Estate or use any Real Estate in
any manner that would violate any Environmental Law or bring such Real Estate in
violation of any Environmental Law.
10.8. SUBORDINATED DEBT. Neither CML nor any of the Borrowers will, and
none will permit any of their Subsidiaries to, amend, supplement or otherwise
modify the terms of any of the Subordinated Debentures or Fiscal Agency
Agreement or prepay, redeem or repurchase any of the Subordinated Debentures.
10.9. EMPLOYEE BENEFIT PLANS. None of CML, any Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code which could result in a material
liability for CML, any of the Borrowers or any of their Subsidiaries;
or
(b) operated or maintain any Guaranteed Pension Plan or
Multiemployer Plan.
10.10. BANK ACCOUNTS. Neither CML nor any of the Borrowers will, and
none will permit any of their Subsidiaries to, (i) establish any bank accounts
other than those listed on SCHEDULE 8.20 (as such may be amended from time to
time to include those depository institutions which have executed and delivered
to the Administrative Agent Agency Account Agreements) unless such new account
is subject to an Agency Account Agreement, (ii) violate directly or indirectly
any Agency Account Agreement in favor of the Administrative Agent for the
benefit of the Lenders and the Administrative Agent with respect to such account
or (iii) deposit into any of the payroll accounts listed on SCHEDULE 8.20 any
amounts in excess of amounts necessary to pay current payroll obligations from
such accounts.
10.11. TRANSACTIONS WITH AFFILIATES. Neither CML nor any of the
Borrowers will, nor will they permit any of their Subsidiaries to, enter into,
or cause, suffer or permit to exist any transaction or agreement with any
Affiliate except:
(a) employment agreements entered into in the ordinary course of
business by CML, any of the Borrowers or any of their Subsidiaries and loans and
advances to employees of CML, any of the Borrowers or any of their Subsidiaries
in the ordinary course of business for travel expenses, drawing accounts or
other similar business related expenses;
(b) any transaction or agreement having terms not less favorable to
CML, the Borrowers and their Subsidiaries than would be the case if such
transaction or agreement had been entered into with a Person that is not an
Affiliate, PROVIDED that the aggregate potential value payable or receivable by
CML, the Borrowers and their Subsidiaries in connection with all such
transactions during any fiscal year of CML (excluding transactions or agreements
exclusively among or between CML, the Borrowers and their Subsidiaries) shall
not exceed $500,000;
(c) tax sharing agreements in form and substance satisfactory to the
Administrative Agent among CML and any of its Subsidiaries;
(d) the Wisconsin Documents, and CML's performance of its obligations
in accordance with the terms of the Wisconsin Documents.
10.12. RESTRICTIVE OR INCONSISTENT AGREEMENTS. Neither CML nor any of
the Borrowers will, nor will they permit any of their Subsidiaries to, enter
into any agreement:
(a) other than the Loan Documents and the Wisconsin Documents, which,
directly or indirectly, prohibits or restrains, or has the effect of prohibiting
or restraining, or otherwise imposes any materially
69
adverse or burdensome condition upon, the declaration or payment of dividends or
distributions, the incurrence of Indebtedness, the granting of liens, the making
of loans or advances to any of CML, any Borrower or any of their Subsidiaries or
the amendment or modification of any of the Loan Documents; or
(b) containing any provision that would be violated or breached by any
Loan or by the performance by CML, any Borrower or any of their Subsidiaries of
their obligations hereunder or under any of the Loan Documents.
10.13. BUSINESS ACTIVITIES. CML will not engage in any business
activity except its ownership of its Subsidiaries, including the Borrowers,
activities reasonably related thereto, its performance from time to time of its
obligations under this Credit Agreement, the other Loan Documents, the
Subordinated Debentures and the Fiscal Agency Agreement and each other
agreement, instrument or document contemplated hereby, whether or not executed
on or before the Original Closing Date.
10.14. PRIVATE LABEL CREDIT CARD PROGRAMS. Neither CML nor NordicTrack
will amend, supplement or otherwise modify any terms or provisions of any
Private Label Credit Card Program without the prior written consent of the
Administrative Agent. Without limitation of the foregoing, neither CML nor
NordicTrack will (a) increase the Credit Review Point (as such term is defined
in the Monogram Credit Card Program Agreement) above $123,000,000 without the
prior written consent of the Administrative Agent or (b) increase the Credit
Review Point (as such term is defined in the GE Capital Credit Card Program
Agreement) above $20,000,000 without the prior written consent of the
Administrative Agent. Notwithstanding anything contained herein to the contrary,
CML and NordicTrack may terminate any Private Label Credit Card Program without
the prior written consent of the Administrative Agent, PROVIDED, that CML and
NordicTrack will promptly notify the Administrative Agent of the termination of
any Private Label Credit Card Program and of the termination of the
Intercreditor Agreement dated as of December 10, 1996 among General Electric
Capital Corporation, the Lenders and the Administrative Agent.
10.15. ISSUANCE OF CAPITAL STOCK. Neither CML nor any of the Borrowers
will, nor will they permit any of their Subsidiaries to, issue any Capital
Stock; PROVIDED, HOWEVER, that
a CML may (i) issue Capital Stock, including the issuance of Capital
Stock pursuant to CML's employee stock option plan and employee
stock purchase program, if (A) such Capital Stock is Permitted
Capital Stock, (B) the issuance of such Capital Stock, or the
exercise or conversion thereof, would not result in a Change in
Control, (C) all Net Cash Proceeds from any such issuance shall be
applied concurrently with receipt of such Net Cash Proceeds by CML
to prepay the Loans to the extent required by ss.3.2.4, (D)
concurrently with receipt of such Net Cash Proceeds by CML, the
Total Commitment shall be permanently reduced to the extent
required by ss.2.3.3, and (E) the terms and documentation for such
issuance (except any Permitted Employee Issuance) are reasonably
satisfactory to the Majority Lenders, (ii) issue Capital Stock
pursuant to the terms of the Wisconsin Note Purchase Agreement,
PROVIDED that (a) such Stock (A) is Permitted Capital Stock, or
(B) preferred stock or other securities issued in exchange for, in
substitution for, or upon the conversion of, any Wisconsin
Subordinated Note; PROVIDED that (1) such preferred stock or other
securities have rights and benefits substantially identical to the
Wisconsin Subordinated Note and are issued on terms and pursuant
to documentation satisfactory to the Lenders, and (2) the Lenders
are satisfied that the Intercreditor Agreement adequately
subordinates any claims of the holders of any such securities to
the Senior Debt (as such term is defined in the Intercreditor
Agreement).
b NT may issue Capital Stock, or options to acquire Capital Stock,
to senior management of NT, if (A) such Capital Stock is Permitted
Capital Stock which is common stock, or such options are to
acquire such Permitted Capital Stock, (B) after giving effect to
any such issuance, the total number of shares of common stock of
NT then or previously issued to
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senior management (on a fully diluted basis, after giving effect
to the exercise of all options granted to senior management) shall
not exceed ten percent (10%) of the issued and outstanding shares
of common stock of NT (on a fully diluted basis, after giving
effect to the exercise of all options granted to senior
management), (C) all Net Cash Proceeds from any such issuance
shall be applied concurrently with receipt of such Net Cash
Proceeds by NT to prepay the Loans pursuant to the provisions
of ss.3.2.4, (D) concurrently with receipt of such Net Cash
Proceeds by NT, the Total Commitment shall be permanently reduced
pursuant to the provisions of ss.2.3.3, and (E) the terms and
documentation for such issuance are reasonably satisfactory to the
Majority Lenders.
10.16. WISCONSIN DOCUMENTS. Neither CML nor any of the Borrowers will,
and none will permit any of their Subsidiaries to, amend, supplement or
otherwise modify the terms of any of the Wisconsin Documents or prepay, redeem
or repurchase any principal of or interest on the Wisconsin Subordinated Note.
1. FINANCIAL COVENANTS OF CML AND THE BORROWERS.
Each of CML and each of the Borrowers covenants and agrees that, so
long as any Loan, Unpaid Reimbursement Obligation, Letter of Credit, Note or any
other Obligation is outstanding or any Lender has any obligation to make any
Loans or the Issuing Bank has any obligation to issue, extend or renew any
Letters of Credit:
1. CAPITAL EXPENDITURES. Neither CML nor any of the Borrowers will
make, nor will they permit any of their Subsidiaries to make, Capital
Expenditures, except that (a) S&H may make Capital Expenditures during the
period from August 1, 1998 through July 31, 1999 not to exceed $9,532,000 in the
aggregate, PROVIDED that the aggregate amount of Capital Expenditures of CML and
its Subsidiaries in connection with S&H opening up to twelve (12) new stores
during the period from August 1, 1998 through July 31, 1999, shall not exceed
$8,000,000 and (b) NordicTrack may make Capital Expenditures during the period
from August 1, 1998 through July 31, 1999 not to exceed $2,815,000 in the
aggregate. During the period from August 1, 1998 through July 31, 1999, S&H
shall have earned an aggregate amount of not less than $1,200,000 in landlord
allowances in connection with S&H's leasehold improvement projects and shall
have collected such amounts in respect of such landlord allowances as are
reflected in the Monthly Budget.
MAXIMUM MONTHLY BORROWER EXPOSURE. Notwithstanding any provision to the
contrary contained herein, CML and the Borrowers will not permit the aggregate
Borrower Exposure of any Borrower at the end of any month set forth in SCHEDULE
11.2 hereto to exceed the amount for such Borrower set forth opposite such month
end in such SCHEDULE 11.2.
1. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Loans and of the
Issuing Bank to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to the Original
Closing Date.
1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed copy of each such
document.
1. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Lenders shall
have received from CML, each of the Borrowers and each of their Subsidiaries a
copy, certified by a duly authorized officer of
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such Person to be true and complete on the Original Closing Date, of each of (i)
its charter or other incorporation documents as in effect on such date of
certification, and (ii) its by-laws as in effect on such date.
1. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by CML, each of the Borrowers and each of
their Subsidiaries of this Credit Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Lenders shall have been provided to
each of the Lenders.
1. INCUMBENCY CERTIFICATE. Each of the Lenders shall have received from
CML, each of the Borrowers and each of their Subsidiaries an incumbency
certificate, dated as of the Original Closing Date, signed by a duly authorized
officer of CML, such Borrower or such Subsidiary, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (i) to
sign, in the name and on behalf of each of CML, such Borrower or such
Subsidiary, each of the Loan Documents to which CML, such Borrower or such
Subsidiary is or is to become a party; (ii) in the case of such Borrower, to
make Loan Requests and Conversion Requests and to apply for Letters of Credit;
and (iii) to give notices and to take other action on its behalf under the Loan
Documents.
1. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Administrative Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under applicable law) security
interest in and lien upon the Collateral (with such exceptions as are acceptable
to the Majority Lenders). All filings, recordings, deliveries of instruments and
other actions necessary or desirable in the opinion of the Administrative Agent
to protect and preserve such security interests shall have been duly effected
(with such exceptions as are acceptable to the Majority Lenders). The
Administrative Agent shall have received evidence thereof in form and substance
satisfactory to the Administrative Agent.
1. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Administrative
Agent shall have received from each of CML, each of the Borrowers and their
Subsidiaries a completed and fully executed Perfection Certificate and the
results of UCC, patent, trademark and copyright searches with respect to the
Collateral, indicating no liens other than Permitted Liens and otherwise in form
and substance satisfactory to the Administrative Agent.
1. APPRAISALS; TAXES. The Administrative Agent shall have received (i)
appraisals of NordicTrack's Mortgaged Property performed by appraisers mutually
agreed upon by the Administrative Agent and the Borrowers and such appraisals
shall be in form and substance satisfactory to the Administrative Agent; and
(ii) evidence of payment of real estate taxes and municipal charges on all Real
Estate not delinquent on or before the Original Closing Date.
1. TITLE INSURANCE. The Administrative Agent shall have received a
Title Policy covering each Mortgaged Property (or commitments to issue such
policies, with all conditions to issuance of the Title Policy deleted by an
authorized agent of the Title Insurance Company) together with proof of payment
of all fees and premiums for such policies, from the Title Insurance Company and
in amounts satisfactory to the Administrative Agent, insuring the interest of
each of the Administrative Agent and each of the Lenders as mortgagee under the
Mortgages.
1. CERTIFICATES OF INSURANCE. The Administrative Agent shall have
received (i) a certificate of insurance from an independent insurance broker
dated as of the Original Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Security Agreement and (ii)
certified copies of all policies evidencing such insurance (or certificates
therefore signed by the insurer or an agent authorized to bind the insurer) and
the Administrative Agent shall be satisfied with the adequacy of all such
insurance.
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1. AGENCY ACCOUNT AGREEMENTS. The Administrative Agent shall have
received an Agency Account Agreement, from each depository institution at which
CML, any of the Borrowers or any of the Guarantors maintains depository accounts
which the Administrative Agent in its sole discretion has identified as a key
concentration account concerning the Administrative Agent's interest for the
benefit of the Lenders and the Administrative Agent in such accounts.
1. BORROWING BASE REPORT. The Administrative Agent shall have received
from the Borrowers the initial Borrowing Base Report dated as of the Original
Closing Date.
1. ACCOUNTS RECEIVABLE AGING REPORT. The Administrative Agent shall
have received from NordicTrack and S&H the most recent Accounts Receivable aging
report of NordicTrack and S&H dated as of a date which shall be no more than
fifteen (15) days prior to the Original Closing Date and, as applicable shall
have notified the Administrative Agent in writing on the Original Closing Date
of any material deviation from the Accounts Receivable values reflected in such
Accounts Receivable aging report and shall have provided the Administrative
Agent with such supplementary documentation as the Administrative Agent may
reasonably request.
1. HAZARDOUS WASTE ASSESSMENTS. The Administrative Agent shall have
received hazardous waste site assessments from environmental engineers and in
form and substance satisfactory to the Administrative Agent, covering (a) all
currently owned real estate and (b), as requested by the Administrative Agent,
all other real property in respect of which CML, any of the Borrowers or any of
their Subsidiaries may have material liability, whether contingent or otherwise,
for dumping or disposal of Hazardous Substances.
1. SOLVENCY CERTIFICATE. Each of the Lenders shall have received an
officer's certificate of CML dated as of the Original Closing Date as to the
solvency of CML and its Subsidiaries following the consummation of the
transactions contemplated herein and in form and substance satisfactory to the
Lenders.
1. OPINION OF COUNSEL. Each of the Lenders and the Administrative Agent
shall have received a favorable legal opinion addressed to the Lenders and the
Administrative Agent, in form and substance satisfactory to the Lenders and the
Administrative Agent, from:
(a) Xxxx and Xxxx, counsel to CML, the Borrowers and the
Guarantors; and
(b) local counsel to CML, the Borrowers and their Subsidiaries in
the United Kingdom, Germany, Canada, the U.S. Virgin Islands and the
states of California and Minnesota, as applicable.
Each of CML, the Borrowers and their Subsidiaries have instructed each
such counsel to deliver its opinion to the Lenders and the Administrative Agent.
1. PAYMENT OF FEES. The Borrowers shall have paid to the Administrative
Agent the Closing Fee and Administrative Agent's fee pursuant to secs.5.1 and
5.2.
1. PAYOFF LETTER. The Administrative Agent shall have received a payoff
letter from Citibank and the other lenders under the Citibank Facility,
indicating the amount of the loan obligations of CML to Citibank to be
discharged on the Original Closing Date and an acknowledgment by Citibank that
upon receipt of such funds it will forthwith execute and deliver to the
Administrative Agent for filing all termination statements and take such other
actions as may be necessary to discharge all mortgages, deeds of trust and
security interests granted by CML, any of the Borrowers or any of their
Subsidiaries in favor of Citibank and the other lenders under the Citibank
Facility.
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1. DISBURSEMENT INSTRUCTIONS. The Administrative Agent shall have
received disbursement instructions from the Borrowers, indicating that a portion
of the proceeds of the Loans, in an amount equal to the aggregate loan
obligations of CML under the Citibank Facility, are paid to Citibank.
1. UPDATED COLLATERAL EXAMINATIONS. The Administrative Agent shall have
reviewed and been satisfied with the update of the commercial finance
examinations performed by the Administrative Agent's field examiners, including
satisfactory review of the Borrowers' books and records in connection with the
calculation of the Borrowing Base and the Administrative Agent's satisfaction
with the components and the Borrowers' method of calculating the Borrowing Base.
1. LANDLORD LIEN WAIVERS. The Administrative Agent shall have received
landlord waivers with respect to material leased locations of the Borrowers
located in Kentucky, Minnesota, South Dakota and Virginia in form and substance
satisfactory to the Administrative Agent.
1. BORROWING AVAILABILITY. The Administrative Agent shall have received
evidence satisfactory to the Administrative Agent that after giving effect to
all transactions to occur on the Original Closing Date and after deducting the
amount of accounts payable of the Borrowers' more than thirty (30) days past
due, the Borrowers shall have aggregate borrowing availability under the Credit
Agreement on the Original Closing Date of not less than $9,000,000.
1. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Loan, and of the Issuing
Bank to issue, extend or renew any Letter of Credit, in each case whether on or
after the Original Closing Date, shall also be subject to the satisfaction of
the following conditions precedent:
1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of CML, the Borrowers and their
Subsidiaries contained in this Credit Agreement, the other Loan Documents or in
any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of such Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent that such representations
and warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing.
1. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Issuing Bank would make it illegal for the Issuing
Bank to issue, extend or renew such Letter of Credit.
1. GOVERNMENTAL REGULATION. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency, the Board of Governors of the
Federal Reserve System or the Securities and Exchange Commission.
1. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Lenders and to the Administrative Agent and the Administrative
Agent's Special Counsel, and the Lenders, the Administrative Agent and such
counsel shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.
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1. BORROWING BASE REPORT. The Administrative Agent shall have received
the most recent Borrowing Base Report required to be delivered to the
Administrative Agent in accordance with ss.9.4(f).
1. EVENTS OF DEFAULT; ACCELERATION; ETC.
2. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("EVENTS OF DEFAULT" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "DEFAULTS") shall occur:
(a) any of the Borrowers shall fail to pay any principal of the
Loans or any Reimbursement Obligation when the same shall become due
and payable, whether at the stated date of maturity or any accelerated
date of maturity or at any other date fixed for payment;
(b) CML, any of the Borrowers or any of their Subsidiaries shall
fail to pay any interest on the Loans, the Unused Line Fees, any Letter
of Credit Fee, the Administrative Agent's fee, or other sums due
hereunder or under any of the other Loan Documents, when the same shall
become due and payable, whether at the stated date of maturity or any
accelerated date of maturity or at any other date fixed for payment;
(c) CML or any of the Borrowers shall fail to comply with any of
its covenants contained in secs.9.1, 9.4, 9.5, 9.7, 9.9, 9.12, 9.14
through 9.20, 10 or 11 or any of the covenants contained in any of the
Mortgages;
(d) CML, any of the Borrowers or any of their Subsidiaries shall
fail to perform any term, covenant or agreement contained herein or in
any of the other Loan Documents (other than those specified elsewhere
in this ss.14.1) for fifteen (15) days after written notice of such
failure has been given to the Borrowers by the Administrative Agent;
(e) any representation or warranty of CML, any of the Borrowers or
any of their Subsidiaries in this Credit Agreement or any of the other
Loan Documents or in any other document or instrument delivered
pursuant to or in connection with this Credit Agreement shall prove to
have been false in any material respect upon the date when made or
deemed to have been made or repeated;
(f) CML, any of the Borrowers or any of their Subsidiaries shall
fail to pay at maturity, or within any applicable period of grace, (i)
any obligation for borrowed money or credit received or in respect of
any Capitalized Leases, and the aggregate amount of such obligations
and Capitalized Leases is in excess of $2,000,000, or (ii) any
Indebtedness under the Wisconsin Documents or the Subordinated Debt, or
fail to observe or perform any term, covenant or agreement contained in
any agreement by which it is bound, evidencing or securing any
indebtedness or obligations described in subclauses (i) or (ii) of this
clause (f), for such period of time as would permit (assuming the
giving of appropriate notice if required) the holder or holders thereof
or of any obligations issued thereunder to accelerate the maturity
thereof;
(g) CML, any of the Borrowers or any of their Subsidiaries shall
make an assignment for the benefit of creditors, or admit in writing
its inability to pay or generally fail to pay its debts as they mature
or become due, or shall petition or apply for the appointment of a
trustee or other custodian, liquidator or receiver of CML, any of the
Borrowers or any of their Subsidiaries or of any substantial part of
the assets of CML, any of the Borrowers or any of their Subsidiaries or
shall commence any case or other proceeding relating to CML, any of the
Borrowers or any of their Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or
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shall take any action to authorize or in furtherance of any of the
foregoing, or if any such petition or application shall be filed or any
such case or other proceeding shall be commenced against CML, any of
the Borrowers or any of their Subsidiaries and CML, any of the
Borrowers or any of their Subsidiaries shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within sixty (60) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating CML, any of the
Borrowers or any of their Subsidiaries bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree
or order for relief is entered in respect of CML, any of the Borrowers
or any of their Subsidiaries in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive,
any final judgment against CML, any of the Borrowers or any of their
Subsidiaries that, with other outstanding final judgments,
undischarged, against CML, any of the Borrowers or any of their
Subsidiaries exceeds in the aggregate $2,000,000;
(j) the holders of (i) any of the Subordinated Debt shall
accelerate prior to the maturity thereof or any of the Subordinated
Debt shall be prepaid, redeemed or repurchased in whole or in part, or
CML shall become obligated to prepay, redeem or repurchase, in whole or
in part, any of the Subordinated Debt, or (ii) any of the Wisconsin
Subordinated Note shall accelerate prior to the maturity thereof or any
of the Wisconsin Subordinated Note shall be prepaid, redeemed or
repurchased in whole or in part, or CML shall become obligated to
prepay, redeem or repurchase, in whole or in part, any of the Wisconsin
Subordinated Note;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Administrative Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall
cease to be perfected, or shall cease to have the priority contemplated
by the Security Documents, in each case otherwise than in accordance
with the terms thereof or with the express prior written agreement,
consent or approval of the Lenders, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of
the Loan Documents shall be commenced by or on behalf of CML, any of
the Borrowers or any of their Subsidiaries party thereto or any of
their respective stockholders, or any court or any other governmental
or regulatory authority or agency of competent jurisdiction shall make
a determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof;
(l) CML, any of the Borrowers or any of their Subsidiaries shall
be enjoined, restrained or in any way prevented by the order of any
court or any administrative or regulatory agency from conducting any
material part of its business and such order shall continue in effect
for more than thirty (30) days;
(m) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute, embargo, condemnation, act of God or public
enemy, or other casualty, which in any such case causes, for more than
fifteen (15) consecutive days, the cessation or substantial curtailment
of revenue producing activities at any facility of CML, any of the
Borrowers or any of their Subsidiaries if such event or circumstance is
not covered by business interruption insurance and would have a
material adverse effect on the business or financial condition of CML,
such Borrower or such Subsidiary;
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(n) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired
by CML, any of the Borrowers or any of their Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material
adverse effect on the business or financial condition of CML, such
Borrower or such Subsidiary;
(o) CML, any of the Borrowers or any of their Subsidiaries shall
be indicted for a state or federal crime, or any civil or criminal
action otherwise shall have been brought against CML, any of the
Borrowers or any of their Subsidiaries, a punishment for which in any
such case could include the forfeiture of any assets of such Person
included in any of the Borrowing Bases or any assets of such Person not
included in the Borrowing Bases but having a fair market value in
excess of $2,000,000;
(p) (i) CML shall at any time, legally or beneficially own less
than one hundred percent (100%) of the shares of Capital Stock of the
Borrowers (other than NA), or (ii) NT shall at any time, legally or
beneficially own less than one hundred percent (100%) of the common
stock of NA; PROVIDED, that (i) the sale of NT by CML in compliance
with the provisions of ss.10.5.2(e), (ii) an NT Spin-Off in compliance
with the provisions of ss.10.4.2, and (iii) the issuance of Capital
Stock of NT to NT's senior management in compliance with the provisions
of ss.10.15, shall not result in an Event of Default under this
paragraph (p),
(q) any Change in Control shall have occurred, or any Change in
Control (as defined in the Subordinated Debentures) shall have
occurred;
(r) there shall have occurred any materially adverse change in the
condition (financial or otherwise), operations, assets, liabilities
and/or prospects of CML and its Subsidiaries since May 2, 1998 other
than as disclosed to the Administrative Agent and the Lenders in
writing (including the Monthly Budget attached hereto) on or prior to
the Restatement Effective Date;
(s) CML shall fail to perform any term, covenant or agreement
contained in any of the Equity Documents;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Majority Lenders shall, by
notice in writing to the Borrowers declare all amounts owing with respect to
this Credit Agreement, the Notes and the other Loan Documents and all
Reimbursement Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrowers; PROVIDED
that in the event of any Event of Default specified in secs.14.1(g), 14.1(h) or
14.1(j), all such amounts shall become immediately due and payable automatically
and without any requirement of notice from the Administrative Agent or any
Lender.
1. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.14.1(g), ss.14.1(h) or ss.14.1(j) shall occur, any
unused portion of the credit hereunder shall forthwith terminate and each of the
Lenders shall be relieved of all further obligations to make Loans to the
Borrowers and the Issuing Bank shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. If any other Event of Default shall
have occurred and be continuing, or if on any Drawdown Date or other date for
issuing, extending or renewing any Letter of Credit the conditions precedent to
the making of the Loans to be made on such Drawdown Date or (as the case may be)
to issuing, extending or renewing such Letter of Credit on such other date are
not satisfied, the Administrative Agent may and, upon the request of the
Majority Lenders, shall, by notice to the Borrowers, terminate the unused
portion of the credit hereunder, and upon such notice being given such unused
portion of the credit hereunder shall terminate immediately and each of the
Lenders shall be relieved of all further obligations to make Loans and the
Issuing Bank shall be relieved of all further obligations to issue, extend or
renew Letters of Credit.
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No termination of the credit hereunder shall relieve CML, any of the Borrowers
or any of their Subsidiaries of any of the Obligations.
1. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to ss.14.1, each Lender, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may, with
the consent of the Majority Lenders but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced,
including as permitted by applicable law the obtaining of the EX PARTE
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. No remedy herein conferred upon any
Lender or the Administrative Agent or the holder of any Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
1. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that following the
occurrence or during the continuance of any Default or Event of Default, the
Administrative Agent or any Lender, as the case may be, receives any monies in
connection with the enforcement of any the Security Documents, or otherwise with
respect to the realization upon any of the Collateral, such monies shall be
distributed for application (x) so long as the Collateral Agency Agreement is in
effect, as provided in the Collateral Agency Agreement, and (y) to the extent
required or permitted by the Collateral Agency Agreement or after the Collateral
Agency Agreement is no longer in effect, as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of the
Administrative Agent's fee payable pursuant to ss.5.2 and all
reasonable costs, expenses, disbursements and losses which shall have
been incurred or sustained by the Administrative Agent in connection
with the collection of such monies by the Administrative Agent, for the
exercise, protection or enforcement by the Administrative Agent of all
or any of the rights, remedies, powers and privileges of the
Administrative Agent under this Credit Agreement or any of the other
Loan Documents or in respect of the Collateral or in support of any
provision of adequate indemnity to the Administrative Agent against any
taxes or liens which by law shall have, or may have, priority over the
rights of the Administrative Agent to such monies;
(b) Second, to all other Obligations in such order or preference
as the Majority Lenders may determine; PROVIDED, HOWEVER, that
distributions in respect of Obligations owing to the Lenders with
respect to each type of Obligation such as interest, principal, fees
and expenses, shall be made among the Lenders PRO RATA; and PROVIDED,
FURTHER, that the Administrative Agent may in its discretion make
proper allowance to take into account any Obligations not then due and
payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the
Administrative Agent of all of the Obligations, as required by the
Collateral Agency Agreement, to the extent then in effect, and
thereafter, to the payment of any obligations required to be paid
pursuant to ss.9-504(1)(c) of the Uniform Commercial Code of the
Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the Borrowers
or to such other Persons as are entitled thereto.
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1. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Lenders to any of the Borrowers and any securities or other property of any
of the Borrowers in the possession of such Lender may be applied to or set off
by such Lender against the payment of Obligations and any and all other
liabilities, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of such Borrower to such Lender. Each of the
Lenders agrees with each other Lender that (i) if an amount to be set off is to
be applied to Indebtedness of such Borrower to such Lender, other than
Indebtedness evidenced by the Notes held by such Lender or constituting
Reimbursement Obligations owed to such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Notes held by such Lender or constituting Reimbursement Obligations owed to such
Lender, and (ii) if such Lender shall receive from such Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, such Lender by proceedings against such
Borrower at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Note or Notes held by, or Reimbursement
Obligations owed to, such Lender any amount in excess of its ratable portion of
the payments received by all of the Lenders with respect to the Notes held by,
and Reimbursement Obligations owed to, all of the Lenders, such Lender will make
such disposition and arrangements with the other Lenders with respect to such
excess, either by way of distribution, PRO TANTO assignment of claims,
subrogation or otherwise as shall result in each Lender receiving in respect of
the Notes held by it or Reimbursement Obligations owed it, its proportionate
payment as contemplated by this Credit Agreement; PROVIDED that if all or any
part of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
1. THE ADMINISTRATIVE AGENT.
2. AUTHORIZATION.
(a) The Administrative Agent is authorized to take such action on
behalf of each of the Lenders and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related
documents delegated to the Administrative Agent, together with such
powers as are reasonably incident thereto, PROVIDED that no duties or
responsibilities not expressly assumed herein or therein shall be
implied to have been assumed by the Administrative Agent.
(b) The relationship between the Administrative Agent and each of
the Lenders is that of an independent contractor. The use of the term
"Administrative Agent" is for convenience only and is used to describe,
as a form of convention, the independent contractual relationship
between the Administrative Agent and each of the Lenders. Nothing
contained in this Credit Agreement nor the other Loan Documents shall
be construed to create an agency, trust or other fiduciary relationship
between the Administrative Agent and any of the Lenders.
(c) As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Administrative Agent
is nevertheless a "representative" of the Lenders, as that term is
defined in Article 1 of the Uniform Commercial Code, for purposes of
actions for the benefit of the Lenders and the Administrative Agent
with respect to all collateral security and guaranties contemplated by
the Loan Documents. Such actions include the designation of the
Administrative Agent as "secured party", "mortgagee" or the like on all
financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to
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secure the payment or performance of any of the Obligations, all for
the benefit of the Lenders and the Administrative Agent.
1. EMPLOYEES AND AGENTS. The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents. The Administrative Agent may utilize the services of such
Persons as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.
1. NO LIABILITY. Neither the Administrative Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.
NO REPRESENTATIONS. The Administrative Agent shall not be responsible
for the execution or validity or enforceability of this Credit Agreement, the
Notes, the Letters of Credit, any of the other Loan Documents or any instrument
at any time constituting, or intended to constitute, collateral security for the
Notes, or for the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect to the
Notes, or for any recitals or statements, warranties or representations made
herein or in any of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of CML, any of the Borrowers or any of
their Subsidiaries, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes or to inspect any of the properties, books or records of
CML, any of the Borrowers or any of their Subsidiaries. The Administrative Agent
shall not be bound to ascertain whether any notice, consent, waiver or request
delivered to it by any of the Borrowers or any holder of any of the Notes shall
have been duly authorized or is true, accurate and complete. The Administrative
Agent has not made nor does it now make any representations or warranties,
express or implied, nor does it assume any liability to the Lenders, with
respect to the credit worthiness or financial conditions of CML, any of the
Borrowers or any of their Subsidiaries. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this Credit
Agreement.
1. PAYMENTS.
2. PAYMENTS TO ADMINISTRATIVE AGENT. A payment by any of the
Borrowers to the Administrative Agent hereunder or any of the other
Loan Documents for the account of any Lender shall constitute a payment
to such Lender. The Administrative Agent agrees promptly to distribute
to each Lender such Lender's PRO RATA share of payments received by the
Administrative Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents.
1. DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the opinion of the
Administrative Agent the distribution of any amount received by it in
such capacity hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
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distributed by the Administrative Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to
the Administrative Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to
such Persons as shall be determined by such court.
1. DELINQUENT LENDERS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents,
any Lender that fails (i) to make available to the Administrative Agent
its PRO RATA share of any Loan or to purchase any Letter of Credit
Participation or (ii) to comply with the provisions of ss.15 with
respect to making dispositions and arrangements with the other Lenders,
where such Lender's share of any payment received, whether by setoff or
otherwise, is in excess of its PRO RATA share of such payments due and
payable to all of the Lenders, in each case as, when and to the full
extent required by the provisions of this Credit Agreement, shall be
deemed delinquent (a "DELINQUENT LENDER") and shall be deemed a
Delinquent Lender until such time as such delinquency is satisfied. A
Delinquent Lender shall be deemed to have assigned any and all payments
due to it from the Borrowers, whether on account of outstanding Loans,
Unpaid Reimbursement Obligations, interest, fees or otherwise, to the
remaining nondelinquent Lenders for application to, and reduction of,
their respective PRO RATA shares of all outstanding Loans and Unpaid
Reimbursement Obligations. The Delinquent Lender hereby authorizes the
Administrative Agent to distribute such payments to the nondelinquent
Lenders in proportion to their respective PRO RATA shares of all
outstanding Loans and Unpaid Reimbursement Obligations. A Delinquent
Lender shall be deemed to have satisfied in full a delinquency when and
if, as a result of application of the assigned payments to all
outstanding Loans and Unpaid Reimbursement Obligations of the
nondelinquent Lenders, the Lenders' respective PRO RATA shares of all
outstanding Loans and Unpaid Reimbursement Obligations have returned to
those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency. Until such
time as its delinquency is satisfied, a Delinquent Lender shall have no
right to vote with respect to any matters under or in respect of the
Credit Agreement and shall not be entitled to receive its portion of
any Unused Line Fee paid in accordance with ss.2.2 of this Credit
Agreement.
1. HOLDERS OF NOTES. The Administrative Agent may deem and treat the
payee of any Note or the purchaser of any Letter of Credit Participation as the
absolute owner or purchaser thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
1. INDEMNITY. The Lenders ratably agree hereby to indemnify and hold
harmless the Administrative Agent from and against any and all claims, actions
and suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Administrative Agent has not been
reimbursed by the Borrowers as required by ss.17), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Administrative Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Administrative Agent's willful misconduct or gross
negligence.
1. ADMINISTRATIVE AGENT AS LENDER. In its individual capacity, BKB
shall have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, and as the holder of any of
the Notes and as the purchaser of any Letter of Credit Participations, as it
would have were it not also the Administrative Agent.
1. RESIGNATION. The Administrative Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Lenders and the
Borrowers. Upon any such resignation, the Majority Lenders shall have the right
to appoint a successor Administrative Agent in such capacity. Unless a Default
or
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Event of Default shall have occurred and be continuing, such successor
Administrative Agent shall be reasonably acceptable to the Borrowers. If no
successor Administrative Agent shall have been so appointed by the Majority
Lenders and shall have accepted such appointment within thirty (30) days after
the retiring Administrative Agent's giving of notice of resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a financial institution having a rating of
not less than A or its equivalent by Standard & Poor's Ratings Group, a division
of XxXxxx-Xxxx, Inc. Upon the acceptance of any appointment as an Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation,
the provisions of this Credit Agreement and the other Loan Documents shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
1. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Lender hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Administrative Agent thereof. The Administrative
Agent hereby agrees that upon receipt of any notice under this ss.16.10 it shall
promptly notify the other Lenders of the existence of such Default or Event of
Default.
1. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Administrative Agent shall, if (i)
so requested by the Majority Lenders and (ii) the Lenders have provided to the
Administrative Agent such additional indemnities and assurances against expenses
and liabilities as the Administrative Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral. The Majority Lenders may direct the Administrative Agent in
writing as to the method and the extent of any such sale or other disposition,
the Lenders hereby agreeing to indemnify and hold the Administrative Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, PROVIDED that the Administrative
Agent need not comply with any such direction to the extent that the
Administrative Agent reasonably believes the Administrative Agent's compliance
with such direction to be unlawful or commercially unreasonable in any
applicable jurisdiction.
1. EXPENSES.
Each of the Borrowers jointly and severally agrees to pay (i) the
reasonable costs of producing and reproducing this Credit Agreement, the other
Loan Documents and the other agreements and instruments mentioned herein, (ii)
any taxes (including any interest and penalties in respect thereto) payable by
the Administrative Agent or any of the Lenders (other than taxes based upon the
Administrative Agent's or any Lender's net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrowers hereby
agreeing to indemnify the Administrative Agent and each Lender with respect
thereto); (iii) the reasonable fees, expenses and disbursements of the
Administrative Agent's Special Counsel or any local counsel to the
Administrative Agent or any counsel to any Initial Lender incurred in connection
with the preparation, administration, interpretation or syndication of the Loan
Documents and other instruments mentioned herein, each closing hereunder, and
amendments, modifications, approvals, consents or waivers hereto or hereunder
(including in each case the allocated cost of staff counsel) and the syndication
and the termination hereof; (iv) the reasonable fees, expenses and disbursements
of the Administrative Agent incurred by the Administrative Agent in connection
with the preparation, administration or interpretation of the Loan Documents and
other instruments mentioned herein, including all title insurance premiums and
surveyor, engineering and appraisal charges and the fees, expenses and
disbursements of the Administrative Agent and the Initial Lenders for waivers
and modifications of the Loan Documents; (v) any reasonable fees, costs,
expenses and bank charges, including bank charges for
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returned checks, incurred by the Administrative Agent in establishing,
maintaining or handling agency accounts, lock box accounts and other accounts
for the collection of any of the Collateral; (vi) all reasonable out-of-pocket
expenses (including without limitation reasonable attorneys' fees and costs,
which attorneys may be employees of any Lender or the Administrative Agent, and
reasonable consulting, accounting, appraisal, investment banking and similar
professional fees and charges) incurred by any Lender or the Administrative
Agent in connection with (A) the enforcement of or preservation of rights under
any of the Loan Documents against CML, any of the Borrowers or any of their
Subsidiaries or the administration thereof after the occurrence of a Default or
Event of Default and (B) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to any Lender's or the Administrative
Agent's relationship with CML, any of the Borrowers or any of their
Subsidiaries; (vii) all reasonable fees, expenses and disbursements of any
Lender or the Administrative Agent incurred in connection with UCC searches, UCC
filings, intellectual property searches, intellectual property filings, or
mortgage recordings and (viii) all reasonable costs of conducting commercial
finance examinations and appraisals of the Borrowers' properties, including the
applicable daily time charges of the Administrative Agent's commercial finance
examiners, agents, consultants and representatives engaged in such examinations
and appraisals as in effect from time to time and reasonable out-of-pocket
travel and other related expenses. The covenants of this ss.17 shall survive
payment or satisfaction of all other Obligations.
1. INDEMNIFICATION.
Each of the Borrowers jointly and severally agrees to indemnify and
hold harmless the Administrative Agent and the Lenders from and against any and
all claims, actions and suits whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(i) any actual or proposed use by CML, any of the Borrowers or any of their
Subsidiaries of the proceeds of any of the Loans or Letters of Credit, (ii) the
reversal or withdrawal of any provisional credits granted by the Administrative
Agent upon the transfer of funds from bank agency or lock box accounts or in
connection with the provisional honoring of checks or other items, (iii) any
actual or alleged infringement of any patent, copyright, trademark, service xxxx
or similar right of CML, any of the Borrowers or any of their Subsidiaries
comprised in the Collateral, (iv) CML, any of the Borrowers or any of their
Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (v) with respect to CML, the Borrowers and their
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Lenders and the Administrative Agent shall be entitled to select
their own counsel and, in addition to the foregoing indemnity, the Borrowers
agree to pay promptly the reasonable fees and expenses of such counsel. If, and
to the extent that the obligations of the Borrowers under this ss.18 are
unenforceable for any reason, the Borrowers hereby agree to make the maximum
contribution to the payment in satisfaction of such obligations which is
permissible under applicable law. The covenants contained in this ss.18 shall
survive payment or satisfaction in full of all other Obligations.
1. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of CML, any of the Borrowers or any of their
Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Lenders and the Administrative Agent, notwithstanding any investigation
heretofore or hereafter made by
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any of them, and shall survive the making by the Lenders of any of the Loans and
the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any Letter
of Credit or any amount due under this Credit Agreement or the Notes or any of
the other Loan Documents remains outstanding or any Lender has any obligation to
make any Loans or the Issuing Bank has any obligation to issue, extend or renew
any Letter of Credit, and for such further time as may be otherwise expressly
specified in this Credit Agreement. All statements contained in any certificate
or other paper delivered to any Lender or the Administrative Agent at any time
by or on behalf of CML, any of the Borrowers or any of their Subsidiaries
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by CML, such Borrower or such
Subsidiary hereunder.
1. ASSIGNMENT AND PARTICIPATION.
2. CONDITIONS TO ASSIGNMENT BY LENDERS. Except as provided herein, each
Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); PROVIDED that (i) the
Administrative Agent shall have given its prior written consent to such
assignment, (ii) so long as BIII holds at least fifty-one percent (51%) of the
outstanding principal amount of the Notes, BIII shall have given its prior
written consent to such assignment, (iii) each such assignment shall be a
constant PRO RATA percentage, and not a varying percentage, of all the assigning
Lender's rights and obligations under this Credit Agreement, (iv) each
assignment shall be in an amount that at least $5,000,000 or, if less, the
entire remaining Commitment of such Lender and (v) the parties to such
assignment shall execute and deliver to the Administrative Agent, for recording
in the Register (as hereinafter defined), an Assignment and Acceptance,
substantially in the form of EXHIBIT G hereto (an "ASSIGNMENT AND ACCEPTANCE"),
together with any Notes subject to such assignment. Upon such execution,
delivery, acceptance and recording, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least five
(5) Business Days after the execution thereof, (i) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder, and (ii) the assigning
Lender shall, to the extent provided in such assignment and upon payment to the
Administrative Agent of the registration fee referred to in ss.20.3, be released
from its obligations under this Credit Agreement. Upon each such consent to an
assignment by BIII given pursuant to this ss.20.1, the assigning Lender agrees
to pay to BIII a consent fee in the sum of $1,000.
1. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Lender makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or
mortgage;
(b) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
CML, the Borrowers and their Subsidiaries or any other Person primarily
or secondarily liable in respect of any of the Obligations, or the
performance or observance by CML, the Borrowers and their Subsidiaries
or any other Person primarily or secondarily liable in respect of any
of the Obligations of any of their obligations
84
under this Credit Agreement or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.8.4 and ss.9.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon
the assigning Lender, the Administrative Agent or any other Lender and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers
under this Credit Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Lender;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Lender satisfactory to such assignee with respect to its
PRO RATA share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
1. REGISTER. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"REGISTER") for the recordation of the names and addresses of the Lenders and
the Commitment Percentage of, and principal amount of the Loans owing to and
Letter of Credit Participations purchased by, the Lenders from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrowers and the Lenders at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the assigning
Lender agrees to pay to the Administrative Agent a registration fee in the sum
of $1,000.
1. NEW NOTES. Upon its receipt of an Assignment and Acceptance executed
by the parties to such assignment, together with each Note subject to such
assignment, the Administrative Agent shall (i) record the information contained
therein in the Register, and (ii) give prompt notice thereof to the Borrowers
and the Lenders (other than the assigning Lender). Within five (5) Business Days
after receipt of such notice, each Borrower, at its own expense, shall execute
and deliver to the Administrative Agent, in exchange for each surrendered Note,
a new Note with respect to such Borrower to the order of such Eligible Assignee
in an amount equal to the amount assumed by such Eligible Assignee pursuant to
such Assignment and Acceptance and, if the assigning Lender has retained some
portion of its obligations hereunder, a new Note to the order of the assigning
Lender in an amount equal to the amount retained by it hereunder. Such new Notes
shall provide that they are replacements for the surrendered Notes, shall be in
an aggregate principal
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amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such in Assignment and Acceptance and shall
otherwise be substantially the form of the assigned Notes. Within five (5) days
of issuance of any new Notes pursuant to this ss.20.4, the Borrowers shall
deliver an opinion of counsel, addressed to the Lenders and the Administrative
Agent, relating to the due authorization, execution and delivery of such new
Notes and the legality, validity and binding effect thereof, in form and
substance satisfactory to the Lenders. The surrendered Notes shall be cancelled
and returned to the Borrowers.
1. PARTICIPATIONS. Each Lender may sell participations to one or more
banks or other entities in all or a portion of such Lender's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (i) each such participation shall be in an amount of not less than
$5,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Lender hereunder to the Borrowers and (iii) the only
rights granted to the participant pursuant to such participation arrangements
with respect to waivers, amendments or modifications of the Loan Documents shall
be the rights to approve waivers, amendments or modifications that would reduce
the principal of or the interest rate on any Loans, extend the term or increase
the amount of the Commitment of such Lender as it relates to such participant,
reduce the amount of any Unused Line Fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
1. DISCLOSURE. CML and each of the Borrowers agrees that in addition to
disclosures made in accordance with standard and customary banking practices any
Lender may disclose information obtained by such Lender pursuant to this Credit
Agreement to assignees or participants and potential assignees or participants
hereunder; PROVIDED that such assignees or participants or potential assignees
or participants shall agree (i) to treat in confidence such information unless
such information otherwise becomes public knowledge, (ii) not to disclose such
information to a third party, except as required by law or legal process and
(iii) not to make use of such information for purposes of transactions unrelated
to such contemplated assignment or participation.
1. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS. If any
assignee Lender (other than BIII or any Affiliate of BIII) is controlled by or
under common control with CML or any Borrower, then any such assignee Lender
shall have no right to vote as a Lender hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Administrative Agent pursuant to ss.14.1
or ss.14.2, and the determination of the Majority Lenders shall for all purposes
of this Credit Agreement and the other Loan Documents be made without regard to
such assignee Lender's interest in any of the Loans. If any Lender sells a
participating interest in any of the Loans or Reimbursement Obligations to a
participant, and such participant is CML, a Borrower or an entity controlled by
or under common control with a Borrower or CML, then such transferor Lender
shall promptly notify the Administrative Agent of the sale of such
participation. A transferor Lender shall have no right to vote as a Lender
hereunder or under any of the other Loan Documents for purposes of granting
consents or waivers or for purposes of agreeing to amendments or modifications
to any of the Loan Documents or for purposes of making requests to the
Administrative Agent pursuant to ss.14.1 or ss.14.2 to the extent that such
participation is beneficially owned by CML, a Borrower or an entity controlled
by or under common control with a Borrower, and the determination of the
Majority Lenders shall for all purposes of this Agreement and the other Loan
Documents be made without regard to the interest of such transferor Lender in
the Loans to the extent of such participation.
1. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Lender shall
retain its rights to be indemnified pursuant to ss.17 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Lender
is not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrowers and the Administrative Agent
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certification as to its exemption from deduction or withholding of any United
States federal income taxes. If the Reference Bank transfers all of its
interest, rights and obligations under this Credit Agreement, the Administrative
Agent shall, in consultation with the Borrowers and with the consent of the
Borrowers and the Majority Lenders, appoint another Lender to act as the
Reference Bank hereunder. Anything contained in this ss.20 to the contrary
notwithstanding, any Lender may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under ss.4 of
the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the enforcement
thereof shall release the pledgor Lender from its obligations hereunder or under
any of the other Loan Documents.
1. ASSIGNMENT BY BORROWERS OR GUARANTORS None of CML, any of the
Borrowers nor any of the Guarantors shall assign or transfer any of its rights
or obligations under any of the Loan Documents without the prior written consent
of each of the Lenders.
1. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to CML, at 000 Xxxx Xxxxxx, Xxxxx, Xxxxxxxxxxxxx 00000,
Attention: Chief Financial Officer, or at such other address for notice
as CML shall last have furnished in writing to the Person giving the
notice;
(b) if to any of the Borrowers, at c/o CML Group, Inc., 000 Xxxx
Xxxxxx, Xxxxx, Xxxxxxxxxxxxx 00000, Attention: Chief Financial Officer,
or at such other address for notice as such Borrower shall last have
furnished in writing to the Person giving the notice with a copy to the
Chief Financial Officer of such Borrower at the address set forth for
such Borrower on SCHEDULE 8.21 hereto;
(c) if to any of the Guarantors or Foreign Guarantors, at c/o CML
Group, Inc., 000 Xxxx Xxxxxx, Xxxxx, Xxxxxxxxxxxxx 00000, Attention:
Chief Financial Officer, or at such other address for notice as such
Guarantor shall last have furnished in writing to the Person giving the
notice with a copy to the Chief Financial Officer of such Guarantor or
Foreign Guarantor at the address set forth for such Guarantor or
Foreign Guarantor on SCHEDULE 8.21 hereto;
(d) if to the Administrative Agent, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxx X. Xxxxx, Vice President, or
such other address for notice as the Administrative Agent shall last
have furnished in writing to the Person giving the notice; and
(e) if to any Lender, at such Lender's address set forth on
SCHEDULE 1 hereto, or such other address for notice as such Lender
shall have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
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1. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). CML, EACH OF THE
BORROWERS AND EACH OF THE GUARANTORS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN
AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON CML, THE BORROWERS AND THE GUARANTORS
BY MAIL AT THE ADDRESS SPECIFIED IN SS.21. CML, EACH OF THE BORROWERS AND EACH
OF THE GUARANTORS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN
AN INCONVENIENT COURT.
1. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
1. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
1. ENTIRE AGREEMENT, ETC.
The Loan Documents express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.27.
1. WAIVER OF JURY TRIAL.
CML, each Borrower and each Guarantor hereby waives its right to a jury
trial with respect to any action or claim arising out of any dispute in
connection with this Credit Agreement, the Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of which rights and obligations. Except as prohibited by law, CML, each Borrower
and each Guarantor hereby waives any right it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. CML, each Borrower and each Guarantor (i) certifies that no
representative, agent or attorney of any Lender or the Administrative Agent has
represented, expressly or otherwise, that such Lender or the Administrative
Agent, would not, in the event of litigation, seek to enforce the foregoing
waivers and (ii) acknowledges that the Administrative Agent and the Lenders have
been induced to enter into this Credit Agreement, the other Loan Documents to
which it is a party by, among other things, the waivers and certifications
contained herein.
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1. CONSENTS, AMENDMENTS, WAIVERS, ETC.
The provisions of this Credit Agreement and the other Loan Documents
may from time to time be amended, modified or waived, and any Collateral may be
released, if such amendment, modification, waiver or release is consented to in
writing by the Majority Lenders and, in the case of any amendment or
modification, CML or its Subsidiaries party to the relevant Loan Document.
Notwithstanding the foregoing, no such amendment, modification, waiver or
release:
(a) which would modify any requirement hereunder that any particular
action be taken by all the Lenders shall be effective unless
consented to by each Lender;
(b) which would modify this ss.27 or change the definition of
"Majority Lenders" shall be effective unless consented to by eacH
Lender;
(c) which would release any Collateral from the lien of the Security
Documents shall be effective unless consented to by each Lender,
unless (i) such release is in connection with the sale of such
Collateral and such sale is permitted by this Credit Agreement,
or such sale is consented to by the Majority Lenders, all Net
Cash Proceeds of such sale are used to prepay the Loans and,
except with respect to Permitted Dispositions (other than the
disposition of the Capital Stock of NT or an NT Spin-Off), the
Total Commitment is reduced, concurrently with such prepayment,
by the amount of such prepayment, as provided for herein, (ii)
such release is of Collateral consisting of cash or cash
equivalents and substantially all such cash or cash equivalents
is used to pay or prepay Obligations in accordance with the
Credit Agreement, (iii) such release is "cash collateral", as
defined in Section 363(a) of the federal Bankruptcy Code, in any
case where CML, a Borrower or a Guarantor is a debtor, and the
release is made under a cash collateral stipulation with the
debtor approved by the Majority Lenders and the Administrative
Agent, (iv) such release is of foreign Collateral and such
release is effected with the approval of the Administrative Agent
pursuant to the last sentence of this ss.27, or (v) such release
is of other Collateral and the aggregate value of all Collateral
releases permitted under this clause (v) from and after the
Restatement Effective Date shall not exceed $1,000,000;
(d) which would increase the Commitment or Commitment Percentage of
any Lender, reduce any Unused Line Fee, Letter of Credit Fee or
other fees payable to any Lender, extend the Maturity Date,
increase the advance rates of any Borrowing Base, or make any
other change which would have the effect of increasing the credit
available to any Borrower hereunder or reduce the principal
amount of or rate of interest on any Loan of any Lender shall be
effective unless consented to by such Lender;
a which would adversely affect the interests, rights or obligations
of the Administrative Agent, in its capacity as the
Administrative Agent, or would amend the provisions of ss.ss.2.1
or 2.8 relating to the transfer of funds between The
Administrative Agent and the Lenders (including the types of
funds or the method of such transfer), shall be effective unless
consented to by the Administrative Agent; or
b which would adversely affect the interests, rights or obligations
of the Issuing Bank, in its capacity as the Issuing Bank, or
would amend the provisions of ss.4.3 relating to the transfer of
funds between the Issuing Bank and the Lenders (including thE
types of funds or the method of such transfer), shall be
effective unless consented to by the Issuing Bank.
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The Guarantors (other than CML and the Borrowers) shall not be deemed a party to
this Credit Agreement for any purpose except for purposes of ss.3.3, ss.7 and
ss.ss.20 through 28. The consent of any Guarantor (other than CML and the
Borrowers) shall not be required for any amendment, modification or waiver of
any provision of this Credit Agreement, unless such amendment, modification or
waiver relates to ss.3.3, ss.7, and ss.ss.20 through 28 and adversely affects
such Guarantor. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Administrative Agent or any Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon CML or any of the Borrowers shall entitle CML or any of
the Borrowers to other or further notice or demand in similar or other
circumstances.
If CML has demonstrated to the reasonable satisfaction of the Administrative
Agent that the pledge of the stock of any foreign Subsidiary of CML (to the
extent greater than sixty-five percent (65%) of the outstanding stock of such
foreign Subsidiary) or the Foreign Guaranty given by any such foreign Subsidiary
will result in material tax obligations for CML and its Subsidiaries, which tax
obligations would not arise if such pledge or guaranty were released by the
Administrative Agent and/or the Lenders, the Administrative Agent and/or the
Lenders, as appropriate, upon ten (10) days' prior written request of CML
delivered to the Administrative Agent and the Lenders shall release such pledge
(to the extent applicable to greater than sixty-five percent (65%) of the
outstanding stock of the relevant foreign Subsidiary) or guaranty; PROVIDED that
(i) no such release shall be required if any Event of Default is continuing and
(ii) no such release shall be required in any event prior to July 15, 1997.
1. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
CML GROUP, INC.
By: ________________________________________
Xxxxx X. Xxxxx, Vice President - Finance
NORDICTRACK, INC.
NORDIC ADVANTAGE, INC.
XXXXX & HAWKEN, LTD.
By: ________________________________________________
Xxxxx X. Xxxxx, Vice President
BANKBOSTON N.A. (f/k/a The First
National Bank of Boston), individually
and as Administrative Agent
By: ________________________________________________
Name:
Title:
B III CAPITAL PARTNERS, L.P.
By: DDJ Capital III, L.L.C., its General Partner
By: DDJ Capital Management, LLC, Manager
By: ________________________________________________
Title:
Member:
For purposes of ss.3.3, ss.7, and ss.ss.20 through 28 hereof:
OCR, INC.
OBW, INC.
WFH GROUP, INC.
OTNC, INC.
BFPI, INC.
By: ___________________________________________
Xxxxx X. Xxxxx, Vice President
