AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF JUNE 30, 2004 AMONG ACTION PERFORMANCE COMPANIES, INC., ACTION RACING COLLECTABLES, INC., ACTION SPORTS IMAGE, L.L.C., FUNLINE MERCHANDISE COMPANY, INC., JEFF HAMILTON COLLECTION, INC. MCARTHUR TOWEL...
EXECUTION COPY
Exhibit 10.73
AMENDED AND RESTATED CREDIT AGREEMENT
DATED AS OF JUNE 30, 2004
AMONG
ACTION PERFORMANCE COMPANIES, INC.,
ACTION RACING COLLECTABLES, INC.,
ACTION SPORTS IMAGE, L.L.C.,
FUNLINE MERCHANDISE COMPANY, INC.,
XXXX XXXXXXXX COLLECTION, INC.
XXXXXXXX TOWEL AND SPORTS, INC.,
RACING COLLECTABLES CLUB OF AMERICA, INC.,
AND
TREVCO TRADING CORP.
AS BORROWERS,
THE LOAN PARTIES PARTY HERETO,
THE LENDERS PARTY HERETO FROM TIME TO TIME,
BANK ONE, NA (MAIN OFFICE CHICAGO),
AS AGENT AND LC ISSUER
AND
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
TABLE OF CONTENTS
ARTICLE I DEFINITIONS | 2 | |||||
ARTICLE II THE FACILITY | 28 | |||||
2.1 |
The Facility | 28 | ||||
2.1.1 Revolving Loans | 28 | |||||
2.1.2 Facility LCs | 31 | |||||
2.1.3 Non-Ratable Loans | 36 | |||||
2.1.4 Protective Advances and Overadvances | 37 | |||||
2.1.5 Term A Loans | 38 | |||||
2.1.6 Term B Loans | 39 | |||||
2.2 |
Ratable Loans; Risk Participation | 39 | ||||
2.3 |
Payment of the Obligations | 40 | ||||
2.4 |
Minimum Amount of Each Advance | 40 | ||||
2.5 |
Funding Account | 40 | ||||
2.6 |
Reliance Upon Authority; No Liability | 40 | ||||
2.7 |
Conversion and Continuation of Outstanding Advances | 40 | ||||
2.8 |
Telephonic Notices | 41 | ||||
2.9 |
Notification of Advances, Interest Rates and Repayments | 41 | ||||
2.10 |
Fees | 41 | ||||
2.11 |
Interest Rates | 42 | ||||
2.12 |
Eurodollar Advances Post Default; Default Rates | 42 | ||||
2.13 |
Interest Payment Dates; Interest and Fee Basis | 43 | ||||
2.14 |
Voluntary Prepayments | 43 | ||||
2.15 |
Mandatory Prepayments | 43 | ||||
2.16 |
Termination of the Facility | 45 | ||||
2.17 |
Method of Payment | 46 | ||||
2.18 |
Apportionment, Application, and Reversal of Payments | 47 | ||||
2.19 |
Settlement | 48 | ||||
2.20 |
Indemnity for Returned Payments | 49 | ||||
2.21 |
Noteless Agreement; Evidence of Indebtedness | 49 | ||||
2.22 |
Lending Installations | 50 | ||||
2.23 |
Non-Receipt of Funds by the Agent; Defaulting Lenders | 50 | ||||
2.24 |
Limitation of Interest | 51 | ||||
2.25 |
Borrower’s Reduction of Commitment | 53 | ||||
ARTICLE III YIELD PROTECTION; TAXES | 53 | |||||
3.1 |
Yield Protection | 53 | ||||
3.2 |
Changes in Capital Adequacy Regulations | 54 | ||||
3.3 |
Availability of Types of Advances | 54 | ||||
3.4 |
Funding Indemnification | 54 | ||||
3.5 |
Taxes | 55 | ||||
3.6 |
Lender Statements; Survival of Indemnity | 57 | ||||
3.7 |
Replacement of Lender | 57 |
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ARTICLE IV CONDITIONS PRECEDENT | 58 | |||||
4.1 |
Effectiveness | 58 | ||||
4.2 |
Each Credit Extension | 61 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES | 61 | |||||
5.1 |
Existence and Standing | 61 | ||||
5.2 |
Authorization and Validity | 62 | ||||
5.3 |
No Conflict; Government Consent | 62 | ||||
5.4 |
Security Interest in Collateral | 62 | ||||
5.5 |
Financial Statements | 62 | ||||
5.6 |
Material Adverse Change | 63 | ||||
5.7 |
Taxes | 63 | ||||
5.8 |
Litigation and Contingent Obligations | 63 | ||||
5.9 |
Capitalization and Subsidiaries | 63 | ||||
5.10 |
ERISA | 64 | ||||
5.11 |
Accuracy of Information | 64 | ||||
5.12 |
Names; Prior Transactions | 64 | ||||
5.13 |
Regulation U | 64 | ||||
5.14 |
Material Agreements | 64 | ||||
5.15 |
Compliance With Laws | 64 | ||||
5.16 |
Ownership of Properties | 65 | ||||
5.17 |
Plan Assets; Prohibited Transactions | 65 | ||||
5.18 |
Environmental Matters | 65 | ||||
5.19 |
Investment Company Act | 65 | ||||
5.20 |
Public Utility Holding Company Act | 65 | ||||
5.21 |
Bank Accounts | 65 | ||||
5.22 |
Indebtedness | 65 | ||||
5.23 |
Affiliate Transactions | 65 | ||||
5.24 |
Real Property; Leases | 66 | ||||
5.25 |
Intellectual Property Rights | 66 | ||||
5.26 |
Insurance | 66 | ||||
5.27 |
Solvency | 66 | ||||
5.28 |
Subordinated Indebtedness | 67 | ||||
5.29 |
Post-Retirement Benefits | 67 | ||||
5.30 |
Common Enterprise | 67 | ||||
5.31 |
Reportable Transaction | 67 | ||||
5.32 |
Labor Disputes | 67 | ||||
ARTICLE VI COVENANTS | 68 | |||||
6.1 |
Financial and Collateral Reporting | 68 | ||||
6.2 |
Use of Proceeds | 71 | ||||
6.3 |
Notices | 71 | ||||
6.4 |
Conduct of Business | 73 | ||||
6.5 |
Taxes | 74 | ||||
6.6 |
Payment of Indebtedness and Other Liabilities | 74 | ||||
6.7 |
Insurance | 74 |
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6.8 |
Compliance with Laws | 76 | ||||
6.9 |
Maintenance of Properties and Intellectual Property Rights | 76 | ||||
6.10 |
Inspection | 76 | ||||
6.11 |
Appraisals | 77 | ||||
6.12 |
Communications with Accountants | 77 | ||||
6.13 |
Collateral Access Agreements and Real Estate Purchases | 77 | ||||
6.14 |
Deposit Account Control Agreements | 77 | ||||
6.15 |
Additional Collateral; Further Assurances | 77 | ||||
6.16 |
Dividends | 79 | ||||
6.17 |
Indebtedness | 79 | ||||
6.18 |
Capital Structure | 81 | ||||
6.19 |
Merger | 81 | ||||
6.20 |
Sale of Assets | 81 | ||||
6.21 |
Investments and Acquisitions | 81 | ||||
6.22 |
Liens | 82 | ||||
6.23 |
Change of Name or Location; Change of Fiscal Year | 84 | ||||
6.24 |
Affiliate Transactions | 84 | ||||
6.25 |
Amendments to Agreements | 84 | ||||
6.26 |
Prepayment of Indebtedness; Subordinated Indebtedness | 84 | ||||
6.27 |
Financial Contracts | 85 | ||||
6.28 |
Capital Expenditures | 85 | ||||
6.29 |
Financial Covenants | 85 | ||||
6.29.1 Fixed Charge Coverage Ratio | 85 | |||||
6.29.2 Minimum Tangible Net Worth | 85 | |||||
6.30 |
Depository Banks | 86 | ||||
6.31 |
Sale of Accounts | 86 | ||||
6.32 |
Convertible Note Xxxxxxxxxx | 00 | ||||
ARTICLE VII DEFAULTS | 86 | |||||
ARTICLE VIII REMEDIES; WAIVERS AND AMENDMENTS | 90 | |||||
8.1 |
Remedies | 90 | ||||
8.2 |
Waivers by Loan Parties | 91 | ||||
8.3 |
Amendments | 91 | ||||
8.4 |
Preservation of Rights | 93 | ||||
ARTICLE IX GENERAL PROVISIONS | 94 | |||||
9.1 |
Survival of Representations | 94 | ||||
9.2 |
Governmental Regulation | 94 | ||||
9.3 |
Headings | 94 | ||||
9.4 |
Entire Agreement | 94 | ||||
9.5 |
Several Obligations; Benefits of this Agreement | 94 | ||||
9.6 |
Expenses; Indemnification | 94 | ||||
9.7 |
Numbers of Documents | 96 | ||||
9.8 |
Accounting | 97 | ||||
9.9 |
Severability of Provisions | 97 | ||||
9.10 |
Nonliability of Lenders | 97 |
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9.11 |
Confidentiality | 97 | ||||
9.12 |
Nonreliance | 98 | ||||
9.13 |
Disclosure | 98 | ||||
9.14 |
Amendment and Restatement | 99 | ||||
ARTICLE X THE AGENT | 99 | |||||
10.1 |
Appointment; Nature of Relationship | 99 | ||||
10.2 |
Powers | 99 | ||||
10.3 |
General Immunity | 99 | ||||
10.4 |
No Responsibility for Credit Extensions, Recitals, etc. | 100 | ||||
10.5 |
Action on Instructions of the Lenders | 100 | ||||
10.6 |
Employment of Agents and Counsel | 100 | ||||
10.7 |
Reliance on Documents; Counsel | 100 | ||||
10.8 |
Agent’s Reimbursement and Indemnification | 101 | ||||
10.9 |
Notice of Default | 101 | ||||
10.10 |
Rights as a Lender | 101 | ||||
10.11 |
Lender Credit Decision | 102 | ||||
10.12 |
Successor Agent | 102 | ||||
10.13 |
Delegation to Affiliates | 103 | ||||
10.14 |
Execution of Loan Documents | 103 | ||||
10.15 |
Collateral Matters | 103 | ||||
10.16 |
Co-Agents, Documentation Agent, Syndication Agent, etc. | 105 | ||||
ARTICLE XI SETOFF; RATABLE PAYMENTS | 105 | |||||
11.1 |
Setoff | 105 | ||||
11.2 |
Ratable Payments | 106 | ||||
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS | 106 | |||||
12.1 |
Successors and Assigns | 106 | ||||
12.2 |
Participations | 107 | ||||
12.3 |
Assignments | 107 | ||||
12.4 |
Dissemination of Information | 109 | ||||
12.5 |
Tax Treatment | 109 | ||||
12.6 |
Assignment by LC Issuer | 109 | ||||
ARTICLE XIII NOTICES | 110 | |||||
13.1 |
Notices; Effectiveness; Electronic Communications | 110 | ||||
13.2 |
Change of Address, Etc. | 111 | ||||
ARTICLE XIV COUNTERPARTS | 111 | |||||
ARTICLE XV GUARANTY | 111 | |||||
15.1 |
Guaranty | 111 | ||||
15.2 |
Guaranty of Payment | 112 | ||||
15.3 |
No Discharge or Diminishment of Guaranty | 112 | ||||
15.4 |
Defenses Waived | 113 | ||||
15.5 |
Rights of Subrogation | 114 |
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15.6 |
Reinstatement; Stay of Acceleration | 114 | ||||
15.7 |
Information | 114 | ||||
15.8 |
Termination | 114 | ||||
15.9 |
Taxes | 114 | ||||
15.10 |
Severability | 115 | ||||
15.11 |
Contribution | 115 | ||||
15.12 |
Lending Installations | 116 | ||||
15.13 |
Liability Cumulative | 116 | ||||
ARTICLE XVI CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL | 116 | |||||
16.1 |
CHOICE OF LAW | 116 | ||||
16.2 |
CONSENT TO JURISDICTION | 116 | ||||
16.3 |
WAIVER OF JURY TRIAL | 117 | ||||
ARTICLE XVII THE BORROWER REPRESENTATIVE | 117 | |||||
17.1 |
Appointment; Nature of Relationship | 117 | ||||
17.2 |
Powers | 117 | ||||
17.3 |
Employment of Agents | 117 | ||||
17.4 |
Notices | 117 | ||||
17.5 |
Successor Borrower Representative | 117 | ||||
17.6 |
Execution of Loan Documents; Aggregate Borrowing Base Certificate | 118 | ||||
17.7 |
Reporting | 118 | ||||
EXHIBIT A BORROWING NOTICE | 1 | |||||
EXHIBIT B CONVERSION/CONTINUATION NOTICE | 1 | |||||
EXHIBIT C REVOLVING NOTE | 1 | |||||
EXHIBIT C-2 TERM A NOTE | 1 | |||||
EXHIBIT C-3 TERM B NOTE | 1 | |||||
EXHIBIT D FORM OF OPINION | 1 | |||||
EXHIBIT E COMPLIANCE CERTIFICATE | 1 | |||||
SCHEDULE I TO COMPLIANCE CERTIFICATE | 1 | |||||
SCHEDULE II TO COMPLIANCE CERTIFICATE | 1 | |||||
SCHEDULE III TO COMPLIANCE CERTIFICATE | 1 | |||||
EXHIBIT F JOINDER AGREEMENT | 1 | |||||
EXHIBIT G ASSIGNMENT AND ASSUMPTION AGREEMENT | 1 | |||||
EXHIBIT H BORROWING BASE CERTIFICATE | 1 | |||||
EXHIBIT I AGGREGATE BORROWING BASE CERTIFICATE | 1 |
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EXHIBIT J FORM OF TOTAL INSTRUMENT INCREASE CERTIFICATE | 1 | |||||
EXHIBIT K FORM OF ADDITIONAL LENDER CERTIFICATE | 1 | |||||
SCHEDULE 5.8 LITIGATION AND CONTINGENT OBLIGATIONS | 1 | |||||
SCHEDULE 5.9 CAPITALIZATION AND SUBSIDIARIES | 1 | |||||
SCHEDULE 5.12 NAMES; PRIOR TRANSACTIONS | 1 | |||||
SCHEDULE 5.14 MATERIAL AGREEMENTS | 1 | |||||
SCHEDULE 5.16 OWNERSHIP OF PROPERTIES | 1 | |||||
SCHEDULE 5.22 INDEBTEDNESS | 1 | |||||
SCHEDULE 5.23 AFFILIATE TRANSACTIONS | 1 | |||||
SCHEDULE 5.24 REAL PROPERTY; LEASES | 1 | |||||
SCHEDULE 5.25 INTELLECTUAL PROPERTY RIGHTS | 1 | |||||
SCHEDULE 5.26 INSURANCE | 1 | |||||
SCHEDULE 5.32 LABOR MATTERS | 1 | |||||
SCHEDULE 6.3(P) MATERIAL LICENSES | 1 | |||||
SCHEDULE 6.21 OTHER INVESTMENTS | 1 | |||||
SCHEDULE 6.22 LIENS | 1 |
vi
AMENEDED AND RESTATED
CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated as of June 30, 2004, is among Action Performance Companies, Inc., an Arizona corporation (“APC” or “Company”), Action Racing Collectables, Inc., an Arizona corporation (“ARC”), Action Sports Image, L.L.C., an Arizona limited liability company (“ASI”), Funline Merchandise Company, Inc., a California corporation (“Funline”), Xxxx Xxxxxxxx Collection, Inc., an Arizona corporation (“Xxxxxxxx”), XxXxxxxx Towel and Sports, Inc., an Arizona corporation (“XxXxxxxx”), Racing Collectables Club of America, Inc., an Arizona corporation (“RCCA”)and Trevco Trading Corp., an Arizona corporation (“Trevco”), each as a Borrower, the other Loan Parties, the Lenders and Bank One, NA, a national banking association with its main office in Chicago, Illinois, as an LC Issuer and as the Agent.
1
ARTICLE I
As used in this Agreement:
“Account” shall have the meaning given to such term in the Security Agreement.
“Account Debtor” means any Person obligated on an Account.
“Acquisition” means any transaction, or any series of related transactions, consummated on or after the Closing Date, by which any Loan Party (a) acquires any going business or all or substantially all of the assets of any Person, whether through purchase of assets, merger or otherwise or (b) directly or indirectly acquires (in one transaction or as the most recent transaction in a series of transactions) at least a majority (in number of votes) of the Capital Stock of a Person which has ordinary voting power for the election of directors or other similar management personnel of a Person (other than Capital Stock having such power only by reason of the happening of a contingency) or a majority of the outstanding Capital Stock of a Person.
“Advance” means a borrowing hereunder, (a) made by some or all of the Lenders on the same Borrowing Date, or (b) converted or continued by the Lenders on the same date of conversion or continuation, consisting, in either case, of the aggregate amount of the several Loans of the same Type and, in the case of Eurodollar Loans, for the same Interest Period. The term Advance shall include Non-Ratable Loans, Overadvances and Protective Advances unless otherwise expressly provided.
“Affected Lender” is defined in Section 3.7.
“Affiliate” of any Person means any other Person directly or indirectly controlling, controlled by or under common control with such Person. A Person shall be deemed to control another Person if the controlling Person owns 15% or more of any class of the voting Capital Stock of the controlled Person or possesses, directly or indirectly, the power to direct or cause the direction of the management or policies of the controlled Person, whether through ownership of Capital Stock, by contract or otherwise.
“Agent” means Bank One in its capacity as contractual representative of the Lenders pursuant to Article X, and not in its individual capacity as a Lender, and any successor Agent appointed pursuant to Article X.
“Aggregate Borrowing Base” means the aggregate of the Borrowing Bases of all of the Borrowers.
“Aggregate Borrowing Base Certificate” means a certificate signed by an Authorized Person of the Borrower Representative in the form of Exhibit I or another form which is acceptable to the Agent in its sole discretion.
“Aggregate Commitment” means the aggregate of the Commitments of all the Lenders, as reduced from time to time pursuant to the terms hereof, which Aggregate Commitment shall
2
on the Closing Date be in the amount of $75,000,000, which may be subsequently increased pursuant to the terms and conditions set forth herein, by an amount not to exceed $20,000,000 as a result of the occurrence of a Revolving Commitment Adjustment Event.
“Aggregate Credit Exposure” means, at any time, the aggregate of the Credit Exposure of all the Lenders.
“Aggregate Revolving Exposure” means, at any time, the aggregate Revolving Exposure of all the Lenders.
“Agreement” means this Amended and Restated Credit Agreement, as it may be amended or modified and in effect from time to time.
“Alternate Base Rate” means, for any day, a rate of interest per annum equal to the higher of (a) the Prime Rate for such day and (b) the sum of the Federal Funds Effective Rate for such day plus 1/2% per annum.
“Applicable Fee Rate” means, at any time, the percentage rate per annum at which fees accrue on Available Revolving Commitment at such time as set forth in the Pricing Schedule.
“Applicable Margin” means, with respect to Advances of any Type at any time, the percentage rate per annum which is applicable at such time with respect to Advances of such Type as set forth in the Pricing Schedule.
“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
“Arranger” means Banc One Capital Markets, Inc., a Delaware corporation, and its successors, in its capacity as Lead Arranger and Sole Book Runner.
“Article” means an article of this Agreement unless another document is specifically referenced.
“Assignment Agreement” is defined in Section 12.3(a).
“Authorized Person” means any of Xxxxx Xxxxxx, Xxxxxxxxx Xxxxxxxx or any other Person from time to time so authorized by Borrower Representative in a writing signed by the Chief Financial Officer of Borrower Representative.
“Availability” means, with respect to all of the Borrowers, at any time, an amount equal to the lesser of (a) the Revolving Commitment and (b) the Aggregate Borrowing Base, in each case, minus the Aggregate Revolving Exposure.
“Available Revolving Commitment” means, at any time, the Revolving Commitment then in effect minus the Aggregate Revolving Exposure at such time.
3
“Bank One” means Bank One, NA, a national banking association, with its main office in Chicago, Illinois, in its individual capacity, and its successors.
“Banking Services” means each and any of the following bank services provided to any Loan Party by Bank One or any of its Affiliates: (a) commercial credit cards, (b) stored value cards and (c) treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services).
“Banking Services Obligations” of the Loan Parties means any and all obligations of the Loan Parties, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor) in connection with Banking Services.
“Banking Services Reserves” means all Reserves which the Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.
“Bankruptcy Code” means Title 11 of the U.S. Code (11 U.S.C. § 101 et seq.) as amended, reformed, or otherwise modified from time to time, and any rule or regulation issued thereunder.
“Borrower” or “Borrowers” means, individually or collectively, the Company, ARC, ASI, Funline, Hamilton, McArthur, RCCA and Trevco and their respective successors and assigns.
“Borrower Representative” means the Company, in its capacity as contractual representative of the Borrowers pursuant to Article XVII.
“Borrowing Base” means, at any time, with respect to each Borrower, the sum of (a) 100% of Eligible Cash Collateral, (b) 85% of such Borrower’s Eligible Accounts at such time, plus (c) 50% of such Borrower’s Eligible Inventory, valued at the lower of cost or market value, determined on a first-in-first-out basis or average cost basis, at such time, minus (d) the amounts outstanding under the Convertible Notes and the Indenture, minus (e) Reserves related to such Borrower. After the occurrence and during the continuation of an Unmatured Default or Default, the Agent may, in its Permitted Discretion, reduce the advance rates set forth above or reduce one or more of the other elements used in computing the Borrowing Base.
“Borrowing Base Certificate” means a certificate, signed by an Authorized Person of a Borrower, in the form of Exhibit H or another form which is acceptable to the Agent in its sole discretion.
“Borrowing Date” means a date on which an Advance or a Loan is made hereunder.
“Borrowing Notice” is defined in Section 2.1.1(b).
“Business Day” means (a) with respect to any borrowing, payment or rate selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago and New York City for the conduct of substantially all of their commercial
4
lending activities, interbank wire transfers can be made on the Fedwire system and dealings in U.S. dollars are carried on in the London interbank market and (b) for all other purposes, a day (other than a Saturday or Sunday) on which banks generally are open in Chicago for the conduct of substantially all of their commercial lending activities and interbank wire transfers can be made on the Fedwire system.
“Capital Expenditures” means, without duplication, any expenditure or commitment to expend money for any purchase or other acquisition of any asset which would be classified as a fixed or capital asset on a consolidated balance sheet of the Company and its Subsidiaries prepared in accordance with GAAP.
“Capital Stock” means any and all corporate stock, units, shares, partnership interests, membership interests, equity interests, rights, securities, or other equivalent evidences of ownership (howsoever designated) issued by any Person.
“Capitalized Lease” of a Person means any lease of Property by such Person as lessee which would be capitalized on a balance sheet of such Person prepared in accordance with GAAP.
“Capitalized Lease Obligations” of a Person means the aggregate amount of the obligations of such Person under Capitalized Leases which would be shown as a liability on a balance sheet of such Person prepared in accordance with GAAP.
“Cash Equivalent Investments” means (a) short-term obligations of, or fully guaranteed by, the U.S., (b) commercial paper rated A-1 or better by S&P or P-1 or better by Moody’s, (c) demand deposit accounts maintained in the ordinary course of business with any domestic office of any commercial bank organized under the laws of the U.S. or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000, and (d) certificates of deposit issued by and time deposits with any domestic office of any commercial bank organized under the laws of the U.S. or any State thereof that has a combined capital and surplus and undivided profits of not less than $500,000,000; provided that, in each case, the same provides for payment of both principal and interest (and not principal alone or interest alone) and is not subject to any contingency regarding the payment of principal or interest.
“Change in Control” means (a) the acquisition by any Person, or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 25% or more of the outstanding voting Capital Stock of the Company; or (b) the Company shall cease to own, free and clear of all Liens or other encumbrances, at least 80% of the outstanding voting Capital Stock of the other Borrowers on a fully diluted basis.
“Closing Date” means the date of this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended, reformed or otherwise modified from time to time, and any rule or regulation issued thereunder.
“Collateral” means any and all Property covered by the Collateral Documents and any and all other Property of any Loan Party, now existing or hereafter acquired, that may at any
5
time be or become subject to a security interest or Lien in favor of the Agent, on behalf of itself and the Lenders, to secure the Secured Obligations.
“Collateral Access Agreement” means any landlord waiver or other agreement, in form and substance satisfactory to the Agent, between the Agent and any third party (including any bailee, consignee, customs broker, or other similar Person) in possession of any Collateral or any landlord of any Loan Party for any real Property where any Collateral is located, as such landlord waiver or other agreement may be amended, restated, or otherwise modified from time to time.
“Collateral Documents” means, collectively, the Security Agreement and any other documents granting a Lien upon the Collateral as security for payment of the Secured Obligations.
“Collateral Shortfall Amount” is defined in Section 2.1.2(l).
“Commercial LC Fee” is defined in Section 2.10(b).
“Commitment” means, for each Lender, the obligation of such Lender to make Loans to the Borrowers, and participate in Facility LCs issued upon the application of any Borrower, in an aggregate amount not exceeding the amount set forth in the Commitment Schedule or as set forth in any Assignment Agreement that has become effective pursuant to Section 12.3(c), as such amount may be increased, subject to the terms and conditions set forth herein, as a result of a Revolving Commitment Adjustment Event or otherwise modified from time to time pursuant to the terms hereof.
“Commitment Schedule” means the Schedule attached hereto identified as such.
“Company” means Action Performance Companies, Inc., an Arizona corporation and its successors and assigns.
“Compliance Certificate” is defined in Section 6.1(e).
“Consolidated Capital Expenditures” means, with reference to any period, the Capital Expenditures of the Company and its Subsidiaries calculated on a consolidated basis for such period.
“Consolidated EBITDA” means Consolidated Net Income plus, to the extent deducted from revenues in determining Consolidated Net Income, (a) Consolidated Interest Expense, (b) expense for taxes paid or accrued, net of tax refunds, (c) depreciation, (d) amortization and other non-cash charges and (e) extraordinary losses (as determined in accordance with GAAP) incurred other than in the ordinary course of business, minus, to the extent included in Consolidated Net Income, extraordinary gains (as determined in accordance with GAAP) realized other than in the ordinary course of business, all calculated for the Company and its Subsidiaries on a consolidated basis.
“Consolidated Fixed Charges” means, with reference to any period, without duplication, cash Consolidated Interest Expense, plus scheduled principal payments on Indebtedness made during such period (excluding mandatory prepayments based upon Excess Cash Flow in
6
accordance with Section 2.15(d)), plus expense for federal income taxes paid in cash, plus dividends or distributions paid in cash (excluding dividends paid by a non-Wholly-Owned Subsidiary of any Loan Party to holders of Capital Stock that are not Loan Parties), plus Capitalized Lease payments, plus cash contributions to any Plan, all calculated for the Company and its Subsidiaries on a consolidated basis.
“Consolidated Interest Expense” means, with reference to any period, the interest expense of the Company and its Subsidiaries calculated on a consolidated basis for such period.
“Consolidated Net Income” means, with reference to any period, the net income (or loss) of the Company and its Subsidiaries calculated on a consolidated basis for such period.
“Consolidated Net Worth” means at any time the consolidated stockholders’ equity of the Company and its Subsidiaries calculated on a consolidated basis as of such time.
“Consolidated Tangible Net Worth” means Consolidated Net Worth, minus Intangibles.
“Contingent Obligation” of a Person means any agreement, undertaking or arrangement by which such Person assumes, guarantees, endorses, contingently agrees to purchase or provide funds for the payment of, or otherwise becomes or is contingently liable upon, the obligation or liability of any other Person, or agrees to maintain the net worth or working capital or other financial condition of any other Person, or otherwise assures any creditor of such other Person against loss, including, without limitation, any comfort letter, operating agreement, take or pay contract or the obligations of any such Person as general partner of a partnership with respect to the liabilities of the partnership.
“Controlled Group” means all members of a controlled group of corporations or other business entities and all trades or businesses (whether or not incorporated) under common control which, together with the Company or any of its Subsidiaries, are treated as a single employer under Section 414 of the Code.
“Conversion/Continuation Notice” is defined in Section 2.7.
“Convertible Note Repurchase” means the repurchase by the Company of all the outstanding Convertible Notes and the termination of the Indenture.
“Convertible Notes” means those certain 4-3/4% Convertible Subordinated Notes of the Company issued pursuant to the Indenture, due April 1, 2005.
“Copyrights” shall have the meaning given to such term in the Security Agreement.
“Credit Exposure” means, as to any Lender at any time, the sum of (a) such Lender’s Revolving Exposure at such time, plus (b) an amount equal to the aggregate principal amount of its Term Loans outstanding at such time, plus (c) an amount equal to its Pro Rata Share, if any, of the aggregate principal amount of Protective Advances outstanding at such time.
“Credit Extension” means the making of an Advance or the issuance of a Facility LC hereunder.
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“Credit Extension Date” means the Borrowing Date for an Advance or the issuance date for a Facility LC.
“Current Assets” means, at any time, the total assets of the Loan Parties which would be shown as current assets on a balance sheet of the Loan Parties prepared in accordance with GAAP.
“Current Liabilities” means, at any time, the total liabilities of the Loan Parties which would be shown as current liabilities on a balance sheet of the Loan Parties prepared in accordance with GAAP.
“Customer List” means a list of a Borrower’s customers, specifying each customer’s name, mailing address and phone number.
“Default” means an event described in Article VII.
“Defaulting Lender” is defined in Section 2.23(b).
“Deposit Account Control Agreement” means an agreement, in form and substance satisfactory to the Agent, among any Loan Party, a banking institution holding such Loan Party’s funds, and the Agent with respect to collection and control of all deposits and balances held in a deposit account maintained by any Loan Party with such banking institution.
“Document” shall have the meaning given to such term in the Security Agreement.
“Dollars” or “$” means lawful currency of the United States of America.
“Domestic Subsidiary” means any Subsidiary which is organized under the laws of the U.S. or any state of the U.S.
“Effective Date” means the date that the conditions precedent set forth in Article IV are satisfied.
“Eligible Accounts” means, at any time, the Accounts of a Borrower which the Agent determines in its Permitted Discretion are eligible as the basis for Credit Extensions hereunder. Without limiting the Agent’s discretion provided herein, Eligible Accounts shall not include any Account:
(a) which is not subject to a first priority perfected security interest in favor of the Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of the Agent and (ii) a Permitted Lien which does not have priority over the Lien in favor of the Agent;
(c) with respect to which more than 90 days have elapsed since the date of the original invoice therefor (other than Accounts owing by Academy Corp., Autozone, Bass Proshop, Kmart, Meijer, Pep Boys, Target, Wal-Mart and
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any other Account Debtor so designated by Agent in its Permitted Discretion with respect to which not more than 120 days have elapsed since the date of the original invoice therefor);
(d) which is owing by an Account Debtor for which more than 50% of the Accounts owing from such Account Debtor and its Affiliates are ineligible hereunder;
(e) which is owing by an Account Debtor to the extent the aggregate amount of Accounts owing from such Account Debtor and its Affiliates to all Borrowers exceeds 25% of the aggregate amount of Eligible Accounts of all Borrowers;
(f) with respect to which any covenant, representation, or warranty contained in this Agreement or in the Security Agreement has been breached or is not true;
(g) which (i) does not arise from the sale of goods or performance of services in the ordinary course of business, (ii) is not evidenced by an invoice or other documentation satisfactory to the Agent which has been sent to the Account Debtor, (iii) represents a progress billing, (iv) is contingent upon such Borrower’s completion of any further performance, or (v) represents a sale on a xxxx-and-hold, guaranteed sale, sale-and-return, sale on approval, consignment, cash-on-delivery or any other repurchase or return basis;
(h) for which the goods giving rise to such Account have not been shipped to the Account Debtor or for which the services giving rise to such Account have not been performed by such Borrower;
(i) with respect to which any check or other instrument of payment has been returned uncollected for any reason;
(j) which is owed by an Account Debtor which has (i) applied for, suffered, or consented to the appointment of any receiver, custodian, trustee, or liquidator of its assets, (ii) has had possession of all or a material part of its property taken by any receiver, custodian, trustee or liquidator, (iii) filed, or had filed against it, any request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as bankrupt, winding-up, or voluntary or involuntary case under any state or federal bankruptcy laws, (iv) has admitted in writing its inability, or is generally unable to, pay its debts as they become due, (v) become insolvent, or (vi) ceased operation of its business;
(k) which is owed by any Account Debtor which has sold all or a substantially all of its assets;
(l) which is owed by an Account Debtor which (i) does not maintain its chief executive office in the U.S. or Canada (other than the Province of Newfoundland) or (ii) is not organized under applicable law of the U.S., any state
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of the U.S., Canada, or any province of Canada (other than the Province of Newfoundland) unless, in either case, such Account is backed by a Letter of Credit acceptable to the Agent which is in the possession of the Agent or the payment of which is insured by an insurer organized under the laws of the U.S. and acceptable to Agent pursuant to an insurance policy acceptable to Agent that is assigned to Agent in a manner satisfactory to Agent;
(m) which is owed in any currency other than U.S. dollars;
(n) which is owed by (i) the government (or any department, agency, public corporation, or instrumentality thereof) of any country other than the U.S. unless such Account is backed by a Letter of Credit acceptable to the Agent which is in the possession of the Agent, or (ii) the government of the U.S., or any department, agency, public corporation, or instrumentality thereof, unless the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. § 3727 et seq. and 41 U.S.C. § 15 et seq.), and any other steps necessary to perfect the Lien of the Agent in such Account have been complied with to the Agent’s satisfaction;
(o) which is owed by any Affiliate, employee, or director of any Loan Party;
(p) which, for any Account Debtor, exceeds a credit limit determined by the Agent, to the extent of such excess;
(q) which is owed by an Account Debtor or any Affiliate of such Account Debtor to which any Loan Party is indebted, but only to the extent of such indebtedness;
(r) which is subject to any counterclaim, deduction, defense, setoff or dispute but only to the extent of any such counterclaim, deduction, defense, setoff or dispute;
(s) which is evidenced by any promissory note, chattel paper, or instrument;
(t) which is owed by an Account Debtor located in any jurisdiction which requires filing of a “Notice of Business Activities Report” or other similar report in order to permit such Borrower to seek judicial enforcement in such jurisdiction of payment of such Account, unless such Borrower has filed such report or qualified to do business in such jurisdiction;
(u) with respect to which such Borrower has made any agreement with the Account Debtor for any reduction thereof, other than discounts and adjustments given in the ordinary course of business; or
(v) which the Agent determines may not be paid by reason of the Account Debtor’s inability to pay or which the Agent otherwise determines is unacceptable for any reason whatsoever.
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In the event that an Account which was previously an Eligible Account ceases to be an Eligible Account hereunder, such Borrower or the Borrower Representative shall notify the Agent thereof (i) within three Business Days of the earlier of the date such Borrower or the Borrower Representative has obtained knowledge thereof if any such Account is in excess of $1,000,000 in the aggregate and (ii) on and at the time of submission by the Borrower Representative to the Agent of the next Aggregate Borrowing Base Certificate in all other cases.
“Eligible Cash Collateral” means Dollars on deposit in the Permitted Accounts and reflected in the most recent Borrowing Base Certificate delivered by Borrowers to Agent on which Agent, on behalf of itself and Lenders, has a valid enforceable first priority perfected Lien and security interest; provided, however, that Eligible Cash Collateral shall not include any portion of the foregoing (a) to the extent that any defense, counterclaim, setoff or dispute is asserted with respect thereto; (b) that (i) is not owned by the Borrowers or (ii) is subject to any Lien of any Person, other than Liens in favor of Agent, on behalf of itself and Lenders; or (c) as to which any of the representations or warranties in the Loan Documents are untrue.
“Eligible Equipment” means, at any time, the Equipment of a Borrower which the Agent determines in its Permitted Discretion is eligible as the basis for Credit Extensions hereunder.
“Eligible Inventory” means, at any time, the Inventory of a Borrower which the Agent determines in its Permitted Discretion is eligible as the basis for Credit Extensions hereunder. Without limiting the Agent’s discretion provided herein, Eligible Inventory shall not include any Inventory:
(a) which is not subject to a first priority perfected Lien in favor of the Agent;
(b) which is subject to any Lien other than (i) a Lien in favor of the Agent and (ii) a Permitted Lien which does not have priority over the Lien in favor of the Agent;
(c) which is, in the Agent’s opinion, slow moving, obsolete, unmerchantable, defective, unfit for sale, not salable at prices approximating at least the cost of such Inventory in the ordinary course of business or unacceptable due to age, type, category and/or quantity;
(d) with respect to which any covenant, representation, or warranty contained in this Agreement or the Security Agreement has been breached or is not true;
(e) which does not conform to all standards imposed by any governmental authority;
(f) which is not finished goods to be sold by such Borrower in the ordinary course of business or raw materials used or consumed by such Borrower in the ordinary course of business in the manufacture or production of other inventory which constitutes work-in-process, spare or replacement parts, subassemblies, packaging and shipping material, manufacturing supplies, display
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items, xxxx-and-hold goods, returned or repossessed goods, defective goods, goods held on consignment, or goods which are not of a type held for sale in the ordinary course of business;
(g) which is not located in the U.S. or is in transit with a common carrier from vendors and suppliers;
(h) which is located in any location leased by such Borrower unless the lessor has delivered to the Agent a Collateral Access Agreement;
(i) which is located in any third party warehouse or is in the possession of a bailee and is not evidenced by a Document, unless such warehouseman or bailee has delivered to the Agent a Collateral Access Agreement and such other documentation as the Agent may require;
(j) which is the subject of a consignment by such Borrower as consignor;
(k) which is perishable;
(l) which contains or bears any Intellectual Property Rights licensed to such Borrower unless (i) the Agent is satisfied that it may sell or otherwise dispose of such Inventory without (A) infringing the rights of such licensor, (B) violating any contract with such licensor, or (C) incurring any liability with respect to payment of royalties other than royalties incurred pursuant to sale of such Inventory under the current licensing agreement and (ii) without limiting the foregoing, at any time that Availability is less than $10,000,000, if such Intellectual Property Rights are the subject of a Material License, Agent shall have received such additional documents, instruments and other evidence as Agent shall in its Permitted Discretion shall require of the matters described in clause (i) above, including without limitation (if requested by Agent) an agreement executed by the licensor thereof and in form and substance satisfactory to Agent confirming the matters described in clause (i) above;
(m) which is not reflected in a current perpetual inventory report of such Borrower; or
(n) which the Agent otherwise determines is unacceptable for any reason whatsoever.
In the event that Inventory which was previously Eligible Inventory ceases to be Eligible Inventory hereunder, such Borrower or the Borrower Representative shall notify the Agent thereof (i) within three Business Days of the earlier of the date the Borrower or the Borrower Representative has obtained knowledge thereof if any such Inventory has a value (based on the lower of cost, determined on a first-in, first-out basis, or market) in excess of $1,000,000 in the aggregate and (ii) on and at the time of submission by the Borrower Representative to the Agent of the next Aggregate Borrowing Base Certificate in all other cases.
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“Environmental Laws” means any and all federal, state, local and foreign statutes, laws, judicial decisions, regulations, ordinances, rules, judgments, orders, decrees, plans, injunctions, permits, concessions, grants, franchises, licenses, agreements and other governmental restrictions relating to (a) the protection of the environment, (b) the effect of the environment on human health, (c) emissions, discharges or releases of pollutants, contaminants, hazardous substances or wastes into surface water, ground water or land, or (d) the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of pollutants, contaminants, hazardous substances or wastes or the clean-up or other remediation thereof.
“Equipment” has the meaning specified in the Security Agreement.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any rule or regulation issued thereunder.
“Eurodollar Advance” means an Advance which, except as otherwise provided in Section 2.12, bears interest at the applicable Eurodollar Rate.
“Eurodollar Base Rate” means, with respect to a Eurodollar Advance for the relevant Interest Period, the applicable British Bankers’ Association LIBOR rate for deposits in U.S. dollars as reported by any generally recognized financial information service as of 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, and having a maturity equal to such Interest Period, provided that, if no such British Bankers’ Association LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for the relevant Interest Period shall instead be the rate determined by the Agent to be the rate at which Bank One or one of its Affiliate banks offers to place deposits in U.S. dollars with first-class banks in the interbank market at approximately 11:00 a.m. (London time) two Business Days prior to the first day of such Interest Period, in the approximate amount of Bank One’s relevant Eurodollar Loan and having a maturity equal to such Interest Period.
“Eurodollar Loan” means a Loan which, except as otherwise provided in Section 2.12, bears interest at the applicable Eurodollar Rate.
“Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base Rate applicable to such Interest Period, divided by (ii) one minus the Reserve Requirement (expressed as a decimal) applicable to such Interest Period, plus (b) the Applicable Margin.
“Excess Cash Flow” means, without duplication, with respect to any Fiscal Year of the Company and its Subsidiaries, the lesser of (a) $3,000,000 and (b) Consolidated EBITDA minus Consolidated Interest Expense, minus federal income taxes paid in cash, minus the sum of (i) Consolidated Capital Expenditures, (ii) scheduled principal payments on Indebtedness made during such Fiscal Year (excluding mandatory prepayments based upon Excess Cash Flow in accordance with Section 2.15(d)), (iii) dividends or distributions paid in cash, (iv) Capitalized Lease payments, (v) cash contributions to any Plan and (vi) the increase (if any) of the difference between (A) the Loan Parties’ Current Assets minus Current Liabilities measured as of the Last Business Day of such Fiscal Year and (B) the difference between the Loan Parties’ Current
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Assets and Current Liabilities measured as of the last Business Day of the immediately preceding Fiscal Year.
“Excluded Taxes” means, in the case of each Lender or applicable Lending Installation and the Agent, taxes imposed on its overall revenue or net income, and franchise taxes imposed on it, by (a) the jurisdiction under the laws of which such Lender or the Agent is incorporated or organized or (b) the jurisdiction in which the Agent’s or such Lender’s principal executive office or such Lender’s applicable Lending Installation is located.
“Exhibit” refers to an exhibit to this Agreement, unless another document is specifically referenced.
“Facility” means the credit facility described in Section 2.1 hereof to be provided to the Borrowers on the terms and conditions set forth in this Agreement.
“Facility LC” is defined in Section 2.1.2(a).
“Facility LC Application” is defined in Section 2.1.2(c).
“Facility LC Collateral Account” is defined in Section 2.1.2(j).
“Facility Termination Date” means the Revolver Termination Date or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.
“Federal Funds Effective Rate” means, for any day, an interest 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 on such day, as published for such day (or, if such day is not a Business Day, for the immediately preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago time) on such day on such transactions received by the Agent from three Federal funds brokers of recognized standing selected by the Agent in its sole discretion.
“Fee Letter” is defined in Section 2.10(c).
“Financial Contract” of a Person means (a) any exchange-traded or over-the-counter futures, forward, swap or option contract or other financial instrument with similar characteristics, or (b) any Rate Management Transaction.
“Fiscal Month” means any of the monthly accounting periods of the Company.
“Fiscal Quarter” means any of the quarterly accounting periods of the Company, ending on December 31, March 31, June 30 and September 30 of each year.
“Fiscal Year” means any of the annual accounting periods of the Company ending on September 30 of each year.
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“Fixed Charge Coverage Ratio” means, the ratio, determined as of the end of each Fiscal Quarter of the Company for the then most-recently ended four Fiscal Quarters, of (a) Consolidated EBITDA minus the unfinanced portion of Consolidated Capital Expenditures to (b) Consolidated Fixed Charges, all calculated for the Company and its Subsidiaries on a consolidated basis.
“Fixtures” has the meaning specified in the Security Agreement.
“Floating Rate” means, for any day, a rate per annum equal to (a) the Alternate Base Rate for such day plus (b) the Applicable Margin, in each case changing when and as the Alternate Base Rate changes.
“Floating Rate Advance” means an Advance which, except as otherwise provided in Section 2.12, bears interest at the Floating Rate.
“Floating Rate Loan” means a Loan which, except as otherwise provided in Section 2.12, bears interest at the Floating Rate.
“Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.
“Fund” means any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.
“Funding Account” is defined in Section 2.5.
“GAAP” means generally accepted accounting principles as in effect from time to time, applied in a manner consistent with that used in preparing the financial statements referred to in Section 5.5.
“Guaranteed Obligations” is defined in Section 15.1.
“Guarantor” each Loan Party (other than the Foreign Subsidiaries) and any other Person who becomes a Loan Party pursuant to a Joinder Agreement and their successors and assigns.
“Guaranty” means Article XV of this Agreement.
“Highest Lawful Rate” shall mean, on any day, the maximum nonusurious rate of interest permitted for that day by applicable federal or Texas law stated as a rate per annum. On each day, if any, that Chapter 303 of the Texas Finance Code, as amended (formerly Tex. Rev. Civ. Stat. Xxx. Art. 5069-1D.003) establishes the Highest Lawful Rate, such rate shall be the “indicated (weekly) rate ceiling” (as defined in Chapter 303 of the Texas Finance Code, as amended) for that day.”
“Indebtedness” of a Person means such Person’s (a) obligations for borrowed money, (b) obligations representing the deferred purchase price of Property or services (other than accounts payable arising in the ordinary course of such Person’s business payable on terms customary in the trade), (c) obligations, whether or not assumed, secured by Liens or payable out of the
15
proceeds or production from Property now or hereafter owned or acquired by such Person, (d) obligations which are evidenced by notes, acceptances, or other instruments, (e) obligations of such Person to purchase securities or other Property arising out of or in connection with the sale of the same or substantially similar securities or Property or any other Off-Balance Sheet Obligations, (f) Capitalized Lease Obligations, (g) Contingent Obligations for which the underlying transaction constitutes Indebtedness under this definition, (h) the maximum available stated amount of all letters of credit or bankers’ acceptances created for the account of such Person and, without duplication, all reimbursement obligations with respect to letters of credit, (i) Rate Management Transactions, (j) obligations of such Person under any Sale and Leaseback Transaction, (k) obligations under any liquidated earn-out and (l) any other obligation for borrowed money or other financial accommodation which in accordance with GAAP would be shown as a liability on the consolidated balance sheet of such Person.
“Indenture” means that certain Indenture dated as of March 24, 1998 by and between the Company and First Union National Bank.
“Intangibles” means, as of any date, all of the intangible assets of a Person including, without limitation, (a) any surplus resulting from any write-up of assets subsequent to the Closing Date; (b) deferred assets, other than prepaid insurance and prepaid taxes; (c) Intellectual Property Rights, non-compete agreements, franchises and other similar intangibles; (d) goodwill, including any amounts, however designated on a balance sheet, representing the excess of the purchase price paid for assets or stock over the value assigned thereto on the books of such Person; (e) Investments in Affiliates; (f) unamortized debt discount and expense; and (g) Accounts, notes and other receivables due from Affiliates or employees, all as determined for the Company and its Subsidiaries on a consolidated basis for such period.
“Intellectual Property Rights” means, with respect to any Person, all of such Person’s Patents, Copyrights, Trademarks, and Licenses, all other rights under any of the foregoing, all extensions, renewals, reissues, divisions, continuations and continuations-in-part of any of the foregoing, and all rights to xxx for past, present, and future infringement of any of the foregoing.
“Intercompany Notes” is defined in Section 6.17(e).
“Interest Period” means, with respect to a Eurodollar Advance, a period of one, two, three or six months commencing on a Business Day selected by the Borrower Representative pursuant to this Agreement. Such Interest Period shall end on the day which corresponds numerically to such date one, two, three or six months thereafter, provided however, that if there is no such numerically corresponding day in such next, second, third or sixth succeeding month, such Interest Period shall end on the last Business Day of such next, second, third or sixth succeeding month. If an Interest Period would otherwise end on a day which is not a Business Day, such Interest Period shall end on the next succeeding Business Day, provided however, that if said next succeeding Business Day falls in a new calendar month, such Interest Period shall end on the immediately preceding Business Day.
“Inventory” has the meaning specified in the Security Agreement.
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“Investment” of a Person means any (a) loan, advance, extension of credit (other than accounts receivable arising in the ordinary course of business on terms customary in the trade) or contribution of capital by such Person, (b) stocks, bonds, mutual funds, partnership interests, notes, debentures, securities or other Capital Stock owned by such Person, (c) any deposit accounts and certificate of deposit owned by such Person, and (d) structured notes, derivative financial instruments and other similar instruments or contracts owned by such Person.
“Joinder Agreement” is defined in Section 6.15(a).
“LC Fee” is defined in Section 2.10(b).
“LC Issuer” means Bank One (or any subsidiary or Affiliate of Bank One designated by Bank One) or any other Lender which has a Revolving Commitment and is acceptable to the Agent and the Borrower Representative in its capacity as an issuer of Facility LCs hereunder.
“LC Obligations” means, at any time, the sum, without duplication, of (a) the aggregate undrawn stated amount under all Facility LCs outstanding at such time plus (b) the aggregate unpaid amount at such time of all Reimbursement Obligations.
“LC Payment Date” is defined in Section 2.1.2(d).
“Lenders” means the lending institutions listed on the signature pages of this Agreement and their respective successors and assigns.
“Lending Installation” means, with respect to a Lender, the LC Issuer or the Agent, the office, branch, subsidiary or Affiliate of such Lender, LC Issuer or the Agent listed on the signature pages hereof or on a Schedule or otherwise selected by such Lender, the LC Issuer or the Agent pursuant to Section 2.22.
“Letter of Credit” of a Person means a letter of credit or similar instrument which is issued upon the application of such Person or upon which such Person is an account party or for which such Person is in any way liable.
“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance or preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, the interest of a vendor or lessor under any conditional sale, Capitalized Lease or other title retention agreement).
“Licenses” shall have the meaning given to such term in the Security Agreement.
“Loan Documents” means this Agreement, any Notes, the Facility LC Applications, the Collateral Documents, the Guaranty and all other agreements, instruments, documents and certificates identified in Section 4.1 executed and delivered to, or in favor of, Agent or any Lenders and including all other pledges, powers of attorney, consents, assignments, contracts, notices, letter of credit agreements and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Loan Party, or any employee of any Loan Party, and delivered to the Agent or any Lender in connection with the Agreement or the transactions
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contemplated thereby. Any reference in the Agreement or any other Loan Document to a Loan Document shall include all appendices, exhibits or schedules thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to the Agreement or such Loan Document as the same may be in effect at any and all times such reference becomes operative.
“Loan Parties” means the Borrowers, the Borrowers’ Domestic Subsidiaries and any other Person who becomes a party to this Agreement pursuant to a Joinder Agreement and their successors and assigns.
“Loans” means, with respect to a Lender, such Lender’s loans made pursuant to Article II (or any conversion or continuation thereof), including Non-Ratable Loans, Overadvances and Protective Advances.
“Material Adverse Effect” means a material adverse effect on (a) the business, Property, condition (financial or otherwise), results of operations, or prospects of Borrowers and their Subsidiaries taken as a whole, (b) the ability of any Loan Party to perform its obligations under the Loan Documents to which it is a party, (c) the Collateral, or the Agent’s Liens (on behalf of itself and the Lenders) on the Collateral or the priority of such Liens or (d) the validity or enforceability of any of the Loan Documents or the rights or remedies of the Agent, the LC Issuer or the Lenders thereunder.
“Material Indebtedness” means Indebtedness in an outstanding principal amount of $1,000,000 or more in the aggregate (or the equivalent thereof in any currency other than U.S. dollars).
“Material Indebtedness Agreement” means any agreement under which any Material Indebtedness was created or is governed or which provides for the incurrence of Indebtedness in an amount which would constitute Material Indebtedness (whether or not an amount of Indebtedness constituting Material Indebtedness is outstanding thereunder).
“Material License” means any of the licenses identified on Schedule 6.3(p) hereto and any other license acquired by a Loan Party after the Closing Date deemed material by Agent in its Permitted Discretion.
“Modify” and “Modification” are defined in Section 2.1.2(a).
“Moody’s” means Xxxxx’x Investors Service, Inc.
“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining agreement or any other arrangement to which the Company or any member of the Controlled Group is a party to which more than one employer is obligated to make contributions.
“Net Cash Proceeds” means, if in connection with (a) an asset disposition, cash proceeds net of (i) commissions and other reasonable and customary transaction costs, fees and expenses properly attributable to such transaction and payable by such Loan Party in connection therewith (in each case, paid to non-Affiliates), (ii) transfer taxes, (iii) amounts payable to holders of senior Liens on such asset (to the extent such Liens constitute Permitted Liens hereunder), if any, and
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(iv) an appropriate reserve for income taxes in accordance with GAAP established in connection therewith, (b) the issuance or incurrence of Indebtedness, cash proceeds net of attorneys’ fees, investment banking fees, accountants’ fees, underwriting discounts and commissions and other customary fees and expenses actually incurred in connection therewith or, (c) an equity issuance, cash proceeds net of underwriting discounts and commissions and other reasonable costs paid to non-Affiliates in connection therewith.
“Net Orderly Liquidation Value” means, with respect to Inventory, Equipment or Intangibles of any Person, the orderly liquidation value thereof as determined in a manner acceptable to the Agent by an appraiser acceptable to the Agent, net of all costs of liquidation thereof.
“Non-Ratable Loan” and “Non-Ratable Loans” are defined in Section 2.1.3.
“Non-U.S. Lender” is defined in Section 3.5(d).
“Notes” means, collectively, the Revolving Notes and the Term Notes.
“Obligations” means all unpaid principal of and accrued and unpaid interest on the Loans, all LC Obligations, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations of the Loan Parties to the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified party arising under the Loan Documents.
“Off-Balance Sheet Liability” of a Person means (a) any repurchase obligation or liability of such Person with respect to accounts or notes receivable sold by such Person, (b) any indebtedness, liability or obligation under any Sale and Leaseback Transaction which is not a Capitalized Lease, (c) any indebtedness, liability or obligation under any so-called “synthetic lease” transaction entered into by such Person, or (d) any indebtedness, liability or obligation arising with respect to any other transaction which is the functional equivalent of or takes the place of borrowing but which does not constitute a liability on the balance sheets of such Person, but excluding from this clause (d) Operating Leases.
“Operating Lease” of a Person means any lease of Property (other than a Capitalized Lease) by such Person as lessee which has an original term (including any required renewals and any renewals effective at the option of the lessor) of one year or more.
“Operating Lease Obligations” means, as at any date of determination, the amount obtained by aggregating the present values, determined in the case of each particular Operating Lease by applying a discount rate (which discount rate shall equal the discount rate which would be applied under GAAP if such Operating Lease were a Capitalized Lease) from the date on which each fixed lease payment is due under such Operating Lease to such date of determination, of all fixed lease payments due under all Operating Leases of the Company and its Subsidiaries.
“Original Loan Agreement” means that certain Loan and Security Agreement, dated September 29, 2000, by and among the Borrowers, certain of their Subsidiaries, the lending institutions party thereto as lenders, Bank One, NA, as agent and the other parties thereto, as amended.
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“Other Taxes” is defined in Section 3.5(b).
“Overadvances” has the meaning specified in Section 2.1.4(b).
“Participants” is defined in Section 12.2(a).
“Patents” shall have the meaning given to such term in the Security Agreement.
“Payment Date” means (a) with respect to interest payments due on any Floating Rate Loan, the first day of each calendar month and the Revolver Termination Date, Facility Termination Date or Term B Termination Date, as applicable, (b) with respect to interest payments due on any Eurodollar Loan, (i) the last day of the applicable Interest Period, and (ii) in the case of any Interest Period in excess of three months, the day which is three months after the first day of such Interest Period, and (iii) the Revolver Termination Date, Facility Termination Date or Term B Termination Date, as applicable, and (c) with respect to any payment of LC Fees or Unused Commitment Fees, the first day of each calendar month and the Facility Termination Date.
“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
“Permitted Accounts” means deposit accounts of the Borrowers subject to valid, first-priority liens and security interests in favor of Agent, for the ratable benefit of the Lenders, in accordance with Deposit Account Control Agreements.
“Permitted Acquisition” means any Acquisition by any Loan Party in a transaction that satisfies each of the following requirements:
(a) such Acquisition is not a hostile or contested acquisition;
(b) the business acquired in connection with such Acquisition is (i) located in the U.S., (ii) organized under U.S. and applicable state laws, and (iii) not engaged, directly or indirectly, in any line of business other than the businesses in which the Loan Parties are engaged on the Closing Date and any business activities that are substantially similar, related, or incidental thereto;
(c) both before and after giving effect to such Acquisition and the Loans (if any) requested to be made in connection therewith, each of the representations and warranties in the Loan Documents is true and correct (except (i) any such representation or warranty which relates to a specified prior date and (ii) to the extent the Agent and the Lenders have been notified in writing by the Loan Parties that any representation or warranty is not correct and the Required Lenders have explicitly waived in writing compliance with such representation or warranty) and no Default or Unmatured Default exists, will exist, or would result therefrom;
(d) as soon as available, but not less than thirty days prior to such Acquisition, the Borrower Representative has provided the Lenders (i) notice of such Acquisition and (ii) a copy of all business and financial information reasonably requested by the Agent
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including pro forma financial statements, statements of cash flow, and Availability projections;
(e) if the Accounts and Inventory acquired in connection with such Acquisition are proposed to be included in the determination of the Borrowing Base, the Agent shall have conducted an audit and field examination of such Accounts and Inventory to its satisfaction;
(f) if the Acquisition occurs prior to the date upon which the Term Loan B has been paid in full in cash, the purchase price of such Acquisition does not exceed $10,000,000 and the consideration paid for all Acquisitions made during the term of this Agreement shall not exceed $30,000,000;
(g) if the Acquisition occurs after the date upon which the Term Loan B has been paid in full in cash, the purchase price of such Acquisition does not exceed $20,000,000 and the consideration paid for all Acquisitions made during the term of this Agreement shall not exceed $45,000,000;
(h) if such Acquisition is an acquisition of the Capital Stock of a Person, the Acquisition is structured so that the acquired Person shall become a Wholly-Owned Subsidiary of a Borrower and, in accordance with Section 6.15(a), a Loan Party pursuant to the terms of this Agreement;
(i) if such Acquisition is an acquisition of assets, the Acquisition is structured so that a Borrower shall acquire such assets;
(j) if such Acquisition is an acquisition of Capital Stock, such Acquisition will not result in any violation of Regulation U;
(k) no Loan Party shall, as a result of or in connection with any such Acquisition, assume or incur any direct or contingent liabilities (whether relating to environmental, tax, litigation, or other matters) that could have a Material Adverse Effect;
(l) in connection with an Acquisition of the Capital Stock of any Person, all Liens on property of such Person shall be terminated unless the Agent in its sole discretion consents otherwise, and in connection with an Acquisition of the assets of any Person, all Liens on such assets shall be terminated;
(m) the Borrowers shall be in compliance with Section 6.29.1 after giving effect to the consummation of such Acquisition;
(n) the Borrower Representative shall certify (and provide the Agent with a pro forma calculation in form and substance reasonably satisfactory to the Agent), on its behalf and on behalf of the Borrowers, to the Agent and the Lenders that, after giving effect to the completion of such Acquisition, Availability will not be less than ten percent
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(10%) of the Aggregate Borrowing Base on a pro forma basis which includes all consideration given in connection with such Acquisition, other than Capital Stock of a Borrower delivered to the seller(s) in such Acquisition, as having been paid in cash at the time of making such Acquisition;
(o) no Default or Default exists or would result therefrom;
(p) both before and after giving effect to such Acquisition (on a pro forma basis), Availability is not less than $30,000,000; and
(q) both before and after giving effect to such Acquisition (on a pro forma basis), Borrower’s Fixed Charge Coverage Ratio shall be equal to or greater than 1.25 to 1.0.
“Permitted Discretion” means a determination made in good faith and in the exercise of reasonable (from the perspective of a secured asset-based lender) business judgment.
“Permitted Liens” is defined in Section 6.22.
“Person” means any natural person, corporation, firm, joint venture, partnership, limited liability company, association, enterprise, trust or other entity or organization, or any government or political subdivision or any agency, department or instrumentality thereof.
“Plan” means an employee pension benefit plan which is covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code as to which a Loan Party or any member of the Controlled Group may have any liability.
“Prepayment Amount” means, as of any date of termination, the sum of the Revolving Commitment and the aggregate outstanding principal amount of the Term Loans as of such date of termination, immediately prior to giving effect to such termination.
“Prepayment Fee” is defined in Section 2.16(b).
“Pricing Schedule” means the Schedule attached hereto identified as such.
“Prior Agreement” is defined in Section 4.1(j).
“Prime Rate” means a rate per annum equal to the prime rate of interest announced from time to time by Bank One or its parent (which is not necessarily the lowest rate charged to any customer), changing when and as said prime rate changes.
“Projections” is defined in Section 6.1(d).
“Property” of a Person means any and all property, whether real, personal, tangible, intangible, or mixed, of such Person, or other assets owned, leased or operated by such Person.
“Pro Rata Share” means, with respect to any Lender, (a) with respect to Revolving Loans, LC Obligations, Non-Ratable Loans or Overadvances, a portion equal to a fraction the numerator
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of which is such Lender’s Revolving Commitment and the denominator of which is the aggregate Revolving Commitment of all Revolving Lenders, (b) with respect to Term A Loans, a portion equal to a fraction the numerator of which is such Lender’s outstanding principal amount of the Term A Loan and the denominator of which is the aggregate outstanding amount of the Term A Loans of all Term A Lenders, (c) with respect to Term B Loans, a portion equal to a fraction the numerator of which is such Lender’s outstanding principal amount of the Term B Loan and the denominator of which is the aggregate outstanding amount of the Term B Loans of all Term B Lenders, (d) with respect to Protective Advances or with respect to all Credit Extensions in the aggregate prior to the Facility Termination Date, a portion equal to a fraction the numerator of which is such Lender’s Commitment and the denominator of which is the Aggregate Commitment of all Lenders, and (e) with respect to Protective Advances or with respect to all Credit Extensions in the aggregate after the Facility Termination Date, a portion equal to a fraction the numerator of which is such Lender’s Credit Exposure and the denominator of which is the Aggregate Credit Exposure of all Lenders.
“Protective Advances” is defined in Section 2.1.4(a).
“Purchasers” is defined in Section 12.3(a).
“Rate Management Obligations” of a Person means any and all obligations of such Person, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor), under (a) any and all Rate Management Transactions, and (b) any and all cancellations, buy backs, reversals, terminations or assignments of any Rate Management Transactions.
“Rate Management Transaction” means any transaction (including an agreement with respect thereto) now existing or hereafter entered by any Loan Party which is a rate swap, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, forward transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures.
“Regulation D” means Regulation D of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor thereto or other regulation or official interpretation of said Board of Governors relating to reserve requirements applicable to member banks of the Federal Reserve System.
“Regulation U” means Regulation U of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor or other regulation or official interpretation of said Board of Governors relating to the extension of credit by banks for the purpose of purchasing or carrying margin stocks applicable to member banks of the Federal Reserve System.
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“Reimbursement Obligations” means, at any time, the aggregate of all obligations of the Borrowers then outstanding under Section 2.1.2 to reimburse the LC Issuer for amounts paid by the LC Issuer in respect of any one or more drawings under Facility LCs.
“Reportable Event” means a reportable event as defined in Section 4043 of ERISA and the regulations issued under such section, with respect to a Plan, excluding, however, such events as to which the PBGC has by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within thirty days of the occurrence of such event, provided however, that a failure to meet the minimum funding standard of Section 412 of the Code and of Section 302 of ERISA shall be a Reportable Event regardless of the issuance of any such waiver of the notice requirement in accordance with either Section 4043(a) of ERISA or Section 412(d) of the Code.
“Reports” means reports prepared by Bank One or another Person showing the results of appraisals, field examinations or audits pertaining to the Borrowers’ assets from information furnished by or on behalf of the Borrowers, after Bank One has exercised its rights of inspection pursuant to this Agreement, which Reports may be distributed to the Lenders by Bank One.
“Required Lenders” means Lenders in the aggregate having at least 51% of the Aggregate Commitment or, if the Aggregate Commitment has been terminated, Lenders in the aggregate holding at least 51% of the Aggregate Credit Exposure.
“Required Revolving Lenders” means Revolving Lenders in the aggregate having at least 51% of the Revolving Commitment or, if the Revolving Commitment has been terminated, Revolving Lenders in the aggregate holding at least 51% of the Aggregate Revolving Exposure.
“Reserves” means any and all reserves which the Agent deems necessary, in its Permitted Discretion, to maintain (including, without limitation, reserves for accrued and unpaid interest on the Secured Obligations, Banking Services Reserves, reserves for rent at locations leased by any Loan Party and for consignee’s, warehousemen’s and bailee’s charges, reserves for dilution of Accounts, reserves for Inventory shrinkage, reserves for customs charges and shipping charges related to any Inventory in transit, reserves for Rate Management Transactions, reserves for contingent liabilities of any Loan Party, reserves for uninsured losses of any Loan Party and reserves for taxes, fees, assessments, and other governmental charges) with respect to the Collateral or any Loan Party.
“Revolver Termination Date” means, June 29, 2008 or any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof.
“Revolving Commitment” means (a) as to any Revolving Lender, the aggregate commitment of such Revolving Lender to make Revolving Loans or incur LC Obligations as set forth in the Commitment Schedule or in the most recent Assignment Agreement executed by such Revolving Lender and (b) as to all Revolving Lenders, the aggregate commitment of all Revolving Lenders to make Revolving Loans or incur LC Obligations, which aggregate commitment shall be Seventy-Five Million Dollars ($75,000,000) minus the principal amounts outstanding from time to time under the Term Loan A and the Term Loan B, as such amount may be adjusted, if at all, from time to time in accordance with this Agreement, including,
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without limitation, subject to the terms and conditions set forth herein, as a result of a Revolving Commitment Adjustment Event.
“Revolving Commitment Adjustment Event” is defined in Section 2.1.1(a).
“Revolving Exposure” means, as to any Lender at any time, the sum of (a) an amount equal to its Pro Rata Share of the aggregate principal amount of the Revolving Loans outstanding at such time, plus (b) an amount equal to its Pro Rata Share of any LC Obligations at such time, plus (c) an amount equal to its Pro Rata Share of the aggregate principal amount of Non-Ratable Loans and Overadvances outstanding at such time.
“Revolving Lenders” means, as of any date of determination, Lenders having a Revolving Commitment.
“Revolving Loans” means the revolving loans extended by the Lenders to the Borrowers pursuant to Section 2.1.1 hereof.
“Revolving Note” is defined in Section 2.21(d).
“Reserve Requirement” means, with respect to an Interest Period, the maximum aggregate reserve requirement (including all basic, supplemental, marginal and other reserves) which is imposed under Regulation D on Eurocurrency liabilities.
“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill Companies, Inc.
“Sale and Leaseback Transaction” means any sale or other transfer of Property by any Person with the intent to lease such Property as lessee.
“Schedule” refers to a specific schedule to this Agreement, unless another document is specifically referenced.
“Section” means a numbered section of this Agreement, unless another document is specifically referenced.
“Secured Obligations” means, collectively, (i) the Obligations; (ii) all Banking Services Obligations; and (iii) all Rate Management Obligations owing to one or more Lenders or any of their respective Affiliates, provided that at or prior to the time that any Rate Management Transaction relating to such Rate Management Obligation is executed, the Lender party thereto (other than Bank One) shall have delivered written notice to the Agent that such a Rate Management Transaction has been entered into and that it constitutes a Secured Obligation entitled to the benefits of the Collateral Documents.
“Security Agreement” means that certain Pledge and Security Agreement, dated as of the date hereof, between the Loan Parties and the Agent, for the benefit of the Agent and the Lenders, and any other pledge or security agreement entered into, after the Closing Date by any other Loan Party (as required by this Agreement or any other Loan Document), or any other Person, as the same may be amended, restated or otherwise modified from time to time.
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“Single Employer Plan” means a Plan maintained by the Company or any member of the Controlled Group for employees of the Company or any member of the Controlled Group.
“Standby LC Fee” is defined in Section 2.10(b).
“Stated Rate” is defined in Section 2.24.
“Subordinated Indebtedness” of a Person means any Indebtedness of such Person the payment of which is subordinated to payment of the Secured Obligations to the written satisfaction of the Agent.
“Subsidiary” of a Person means, any corporation, partnership, limited liability company, association, joint venture or similar business organization more than 50% of the outstanding Capital Stock having ordinary voting power of which shall at the time be owned or controlled by such Person. Unless otherwise expressly provided, all references herein to a “Subsidiary” shall mean a Subsidiary of a Borrower.
“Substantial Portion” means Property which represents more than 10% of the consolidated assets of the Company and its Subsidiaries or property which is responsible for more than 10% of the consolidated net sales or of the consolidated net income of the Company and its Subsidiaries, in each case, as would be shown in the consolidated financial statements of the Company and its Subsidiaries as at the beginning of the twelve-month period ending with the month in which such determination is made (or if financial statements have not been delivered hereunder for that month which begins the twelve-month period, then the financial statements delivered hereunder for the quarter ending immediately prior to that month).
“Supporting Letter of Credit” is defined in Section 2.1.2(l).
“Taxes” means any and all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and any and all liabilities with respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
“Term A Lenders” means, as of any date of determination, Lenders having a Term A Loan Commitment.
“Term A Loan Commitment” means (a) as to any Term A Lender, the aggregate commitment of such Term A Lender to make Term A Loans as set forth in the Commitment Schedule or in the most recent Assignment Agreement executed by such Term A Lender and (b) as to all Term A Lenders, the aggregate commitment of all Term A Lenders to make Term A Loans, which aggregate commitment shall be One Million Seven Hundred Thousand Dollars ($1,700,000) on the Closing Date. After advancing the Term A Loan, each reference to a Lender’s Term A Loan Commitment shall refer to that Lender’s Pro Rata Share.
“Term A Loans” means the term loans extended by the Lenders to the Borrowers pursuant to Section 2.1.5 hereof.
“Term A Note” is defined in Section 2.21(d).
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“Term B Lenders” means, as of any date of determination, Lenders having a Term B Loan Commitment.
“Term B Loan Commitment” means (a) as to any Term B Lender, the aggregate commitment of such Term B Lender to make Term B Loans as set forth in the Commitment Schedule or in the most recent Assignment Agreement executed by such Term B Lender and (b) as to all Term B Lenders, the aggregate commitment of all Term B Lenders to make Term B Loans, which aggregate commitment shall be Ten Million Dollars ($10,000,000) on the Closing Date. After advancing the Term B Loan, each reference to a Lender’s Term B Loan Commitment shall refer to that Lender’s Pro Rata Share.
“Term B Loans” means the term loans extended by the Lenders to the Borrowers pursuant to Section 2.1.6 hereof.
“Term B Note” is defined in Section 2.21(d).
“Term B Termination Date” means the earliest of: (a) June 29, 2007 (b) any earlier date on which the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to the terms hereof or (c) the Revolver Termination Date.
“Term Notes” means, collectively, the Term A Notes and the Term B Notes.
“Trademarks” shall have the meaning given to such term in the Security Agreement.
“Transferee” is defined in Section 12.4.
“Type” means, with respect to any Advance, its nature as a Floating Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as a Floating Rate Loan or a Eurodollar Loan.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of Texas or any other state the laws of which are required to be applied in connection with the issue of perfection of security interests.
“Unfunded Liabilities” means the amount (if any) by which the present value of all vested and unvested accrued benefits under all Single Employer Plans exceeds the fair market value of all such Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plans using PBGC actuarial assumptions for single employer plan terminations.
“Unliquidated Secured Obligations” means, at any time, any Secured Obligations (or portion thereof) that is contingent in nature or unliquidated at such time, including any Secured Obligation that is: (i) an obligation to reimburse a bank for drawings not yet made under a letter of credit issued by it; (ii) any other obligation (including any guarantee) that is contingent in nature at such time; or (iii) an obligation to provide collateral to secure any of the foregoing types of obligations.
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“Unmatured Default” means an event which but for the lapse of time or the giving of notice, or both, would constitute a Default.
“Unused Commitment Fee” is defined in Section 2.10(a).
“U.S.” means the United States of America.
“Wholly-Owned Subsidiary” of a Person means, any Subsidiary all of the outstanding Capital Stock of which shall at the time be owned or controlled, directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of such Person.
The foregoing definitions shall be equally applicable to both the singular and plural forms of the defined terms.
ARTICLE II
(a) (i) Amount. From and including the Effective Date and prior to the Revolver Termination Date, each Revolving Lender severally agrees, on the terms and conditions set forth in this Agreement, to make revolving loans (the “Revolving Loans”) to the Borrower Representative on behalf of the applicable Borrower and participate in Facility LCs issued to any Borrower as set forth in Section 2.1.2 below, in aggregate amounts not to exceed such Lender’s Pro Rata Share. If any advance of a Revolving Loan or participation in a Facility LC would exceed the Borrowers’ Availability, the Revolving Lenders will refuse to make or may otherwise restrict the making of Revolving Loans or the issuance of Facility LCs as the Required Revolving Lenders determine until such excess has been eliminated, subject to the Agent’s authority, in its sole discretion, to make Protective Advances and Overadvances pursuant to the terms of Section 2.1.4. The Revolving Loans may consist of Floating Rate Advances or Eurodollar Advances, or a combination thereof, selected by the Borrower Representative in accordance with Sections 2.1.1(b) and 2.7. Subject to the terms of this Agreement, the Borrowers may borrow, repay and reborrow Revolving Loans at
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any time prior to the Revolver Termination Date. The Commitments to extend credit under this Section 2.1.1(a) shall expire on the Revolver Termination Date.
(ii) Increase in Revolving Commitment and Aggregate Commitment. In the event that a Lender desires to increase its Commitment, or a bank or other entity that is not a Lender desires to become a Lender and provide an additional Commitment hereunder, and so long as no Unmatured Default or Default shall have occurred and be continuing and with the prior written consent of Agent, the Borrower Representative shall have the right from time to time prior to the Revolver Termination Date with the Agent’s written consent, after not less than thirty (30) days’ prior written notice to Agent, to increase the Revolving Commitment (and thereby also increase the Aggregate Commitment) in whole increments of $5,000,000 by an aggregate amount of up to $20,000,000 (subject to the terms and conditions set forth herein, “Revolving Credit Adjustment Event”); provided, that in no event shall (A) the Revolving Commitment be increased to an amount greater than $95,000,000 or (B) the Aggregate Commitment be increased to an amount greater than $95,000,000; provided, further, that:
(1) If the Borrower Representative elects to increase the Revolving Commitment of a Lender in accordance with this Section 2.1.1(a), the Borrowers and such Lender shall execute and deliver to the Agent a certificate substantially in the form of Exhibit J attached hereto (a “Commitment Increase Certificate,” and the Borrowers shall deliver a new Revolving Note payable to the order of such Lender in the principal amount equal to its Revolving Commitment after giving effect to such increase, and otherwise duly completed;
(2) If the Borrower Representative elects to increase the Revolving Commitment by causing a bank or financial institution that at such time is not a Lender to become a Lender (an “Additional Lender”), the Borrowers and such Additional Lender shall execute and deliver to the Agent, a certificate substantially in the form of Exhibit K hereto) (an “Additional Lender Certificate”), together with an Administrative Questionnaire as referred to in Exhibit G, and the Borrowers shall deliver a Revolving Note payable to the order of such Additional Lender in a principal amount equal to its Revolving Commitment, and otherwise duly completed; provided that, any such Additional Lender shall be approved by the Agent (which approval shall not be unreasonably withheld or delayed) prior to such bank or financial institution becoming an Additional Lender hereunder;
(3) Subject to acceptance and recording thereof pursuant to this Section 2.1.1(a)(ii) hereof, from and after the
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effective date specified in the Commitment Increase Certificate or the Additional Lender Certificate, as applicable (or if any Eurodollar Advance is outstanding, then on the last day of the Interest Period in respect of such Eurodollar Advance, unless the Borrower has paid compensation required with respect to such Eurodollar Advance): (a) the amount of the Aggregate Commitment, the Revolving Commitment and the Commitment, shall be increased by the amount set forth therein, and (b) in the case of an Additional Lender Certificate, any Additional Lender party thereto shall be a party to this Agreement and the other Loan Documents and have the rights and obligations of a Lender under this Agreement and the other Loan Documents. In addition, the Lender or Additional Lender, as applicable, shall purchase a pro rata portion of the outstanding Loans (and participation interests in Letters of Credit) of each of the other lenders (and such Lenders hereby agree to sell and to take all such further action to effectuate such sale) such that each Lender (including any Additional Lender, if applicable) shall hold its respective percentage of the outstanding Loans (and participation interests) after giving effect to the increase in the Aggregate Commitment; and
(4) Upon its receipt of a duly completed Commitment Increase Certificate or an Additional Lender Certificate, as applicable, executed by the Borrowers and the Lender or the Additional Lender party thereto, as applicable, and the Administrative Questionnaire referred to in Exhibit G, the Agent shall accept such Commitment Increase Certificate or Additional Lender Certificate and record the information contained therein in the Register maintained by the Agent pursuant to Section 12.3(d). No increase in the Aggregate Commitment shall be effective for purposes of this Agreement unless it has been recorded in the Register as provided in Section 12.3(d) hereof.
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Borrower Representative shall be deemed to have requested on behalf of the applicable Borrower that such Eurodollar Advance be made with an Interest Period of one month.
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be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the LC Issuer, a participation in such Facility LC (and each Modification thereof) and the related LC Obligations in proportion to its Pro Rata Share. Revolving Lenders and Borrowers acknowledge and agree that letters of credit issued under the Original Loan Agreement and outstanding on the Closing Date constitute Facility LCs under this Agreement, and each Revolving Lender shall be deemed, without further action by any party hereto, to have unconditionally and irrevocably purchased from the LC Issuer, a participation in such Facility LC (and each Modification thereof) and the related LC Obligations in proportion to its Pro Rata Share.
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demand for (i) such Revolving Lender’s Pro Rata Share of the amount of each payment made by the LC Issuer under each Facility LC to the extent such amount is not reimbursed by the Borrowers pursuant to Section 2.1.2(e) below, plus (ii) interest on the foregoing amount to be reimbursed by such Revolving Lender, for each day from the date of the LC Issuer’s demand for such reimbursement (or, if such demand is made after 11:00 a.m. (Chicago time) on such date, from the next succeeding Business Day) to the date on which such Revolving Lender pays the amount to be reimbursed by it, at a rate of interest per annum equal to the Federal Funds Effective Rate for the first three days and, thereafter, at a rate of interest equal to the rate applicable to Floating Rate Advances.
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respect of any Facility LC 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, any of its Affiliates, the beneficiary of any Facility LC or any financing institution or other party to whom any Facility LC may be transferred or any claims or defenses whatsoever of any Borrower or of any of its Affiliates against the beneficiary of any Facility LC or any such transferee. The LC Issuer 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 Facility LC. Each Borrower agrees that any action taken or omitted by the LC Issuer or any Revolving Lender under or in connection with each Facility LC and the related drafts and documents, if done without gross negligence or willful misconduct, shall be binding upon such Borrower and shall not put the LC Issuer or any Revolving Lender under any liability to any Borrower. Nothing in this Section 2.1.2(f) is intended to limit the right of the Borrowers to make a claim against the LC Issuer for damages as contemplated by the proviso to the first sentence of Section 2.1.2(e).
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limitation, any claims, damages, losses, liabilities, costs or expenses which the LC Issuer may incur by reason of or in connection with (i) the failure of any other Revolving Lender to fulfill or comply with its obligations to the LC Issuer hereunder (but nothing herein contained shall affect any rights any Borrower may have against any Defaulting Lender) or (ii) by reason of or on account of the LC Issuer issuing any Facility LC which specifies that the term “Beneficiary” included therein includes any successor by operation of law of the named Beneficiary, but which Facility LC does not require that any drawing by any such successor Beneficiary be accompanied by a copy of a legal document, satisfactory to the LC Issuer, evidencing the appointment of such successor Beneficiary; provided that, the Borrowers shall not be required to indemnify any Revolving Lender, the LC Issuer or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (x) the willful misconduct or gross negligence of the LC Issuer in determining whether a request presented under any Facility LC complied with the terms of such Facility LC or (y) the LC Issuer’s failure to pay under any Facility LC after the presentation to it of a request strictly complying with the terms and conditions of such Facility LC. Nothing in this Section 2.1.2(h) is intended to limit the obligations of the Borrowers under any other provision of this Agreement.
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grants to the Agent, on behalf of and for the ratable benefit of the Lenders and the LC Issuer, a security interest in all of such Borrower’s right, title and interest in and to all funds which may from time to time be on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of the Secured Obligations. The Agent will invest any funds on deposit from time to time in the Facility LC Collateral Account in certificates of deposit of Bank One having a maturity not exceeding thirty days.
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Collateral and shall constitute Obligations hereunder. All Non-Ratable Loans shall be Floating Rate Advances and are subject to the settlement provisions set forth in Section 2.19.
2.1.4 Protective Advances and Overadvances.
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addition, Overadvances may be made even if a Default or Unmatured Default exists, but may not be made if the conditions precedent set forth in Section 4.2 have not been satisfied (other than the condition regarding Availability and Availability). All Overadvances shall constitute Floating Rate Advances, shall bear interest at the default rate set forth in Section 2.12, shall be payable on the earlier of demand or the Revolver Termination Date and are subject to the settlement provisions set forth in Section 2.19. The authority of the Agent to make Overadvances is limited to an aggregate amount outstanding at any time not to exceed ten percent (10%) of the aggregate Revolving Commitment of all Lenders and no Overadvance shall cause any Revolving Lender’s Revolving Credit Exposure to exceed its Revolving Commitment or the Aggregate Credit Exposure to exceed the Aggregate Commitment; provided that, the Required Revolving Lenders may at any time revoke the Agent’s authorization to make Overadvances. Any such revocation must be in writing and shall become effective prospectively upon the Agent’s receipt thereof.
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(b) Initial Funding by Lenders. Each Lender shall make the amount of such Lender’s Term B Loan available to the Agent in immediately available funds at the Agent’s designated account, not later than 2:00 p.m. (Chicago time) on the Effective Date. After the Agent’s receipt of the proceeds of such Term B Loan from the Lenders, the Agent shall make the proceeds of such Term B Loan available to the Borrowers on the Effective Date by transferring immediately available funds equal to the proceeds of such Term B Loans received by the Agent to the Funding Account or as the Borrower Representative shall otherwise instruct in writing.
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Agent, without recourse or warranty, an undivided interest and participation in such Protective Advance in proportion to its Pro Rata Share of the Aggregate Commitment. From and after the date, if any, on which any Lender is required to fund its participation in any Non-Ratable Loan, Overadvance or Protective Advance purchased hereunder, the Agent shall promptly distribute to such Lender, such Lender’s Pro Rata Share of all payments of principal and interest and all proceeds of Collateral received by the Agent in respect of such Loan.
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automatically converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or was repaid in accordance with this Agreement or (y) the Borrower Representative shall have given the Agent a Conversion/Continuation Notice (as defined below) requesting that, at the end of such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance for the same or another Interest Period. Subject to the terms of Section 2.4, the Borrower Representative may elect from time to time to convert all or any part of a Floating Rate Advance into a Eurodollar Advance on behalf of the applicable Borrower. The Borrower Representative shall give the Agent irrevocable notice in the form of Exhibit B (a “Conversion/Continuation Notice”) of each conversion of a Floating Rate Advance into a Eurodollar Advance or continuation of a Eurodollar Advance not later than 11:00 a.m. (Chicago time) at least three Business Days prior to the date of the requested conversion or continuation, specifying (i) the requested date, which shall be a Business Day, of such conversion or continuation, (ii) the aggregate amount and Type of the Advance which is to be converted or continued, and (iii) the amount of such Advance which is to be converted into or continued as a Eurodollar Advance and the duration of the Interest Period applicable thereto.
41
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of the Lenders to reductions in interest rates), declare that (i) each Eurodollar Advance shall bear interest for the remainder of the applicable Interest Period at the rate otherwise applicable to such Interest Period plus 2% per annum, (ii) each Floating Rate Advance shall bear interest at a rate per annum equal to the Floating Rate in effect from time to time plus 2% per annum and (iii) the LC Fee shall be increased by 2% per annum, provided that, during the continuance of a Default under subsection (f) or (g) of Article VII, the interest rates set forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in clause (iii) above shall be applicable to all Credit Extensions without any election or action on the part of the Agent or any Lender.
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Credit for the LC Obligations in the manner set forth in Section 2.1.2(l) to the extent required to eliminate such excess.
(d) Excess Cash Flow. Until the Term B Termination Date, the Borrowers shall prepay the Obligations on the date that is ten days after the earlier of (i) the date on which Borrowers’ annual audited Financial Statements for the immediately preceding Fiscal Year are delivered pursuant to Section 6.1 or (ii) the date on which such annual audited Financial Statements were required to be delivered pursuant to Section 6.1, in an amount equal to fifty percent (50%) of the Borrowers’ Excess Cash Flow for the immediately preceding Fiscal Year. Any such prepayment shall be applied to first, to pay the principal of the Overadvances and Protective Advances, second, to scheduled principal installments of the Term B Loans in inverse order of maturity and third, to pay the principal of the Non-Ratable Loans. Each such prepayment shall be accompanied by a certificate
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signed by the chief financial officer of the Borrower Representative (on behalf of the Borrowers) certifying the manner in which Excess Cash Flow and the resulting prepayment were calculated, which certificate shall be in form and substance satisfactory to the Agent.
(e) Insurance/Condemnation Proceeds. Any insurance or condemnation proceeds to be applied to the Obligations in accordance with Section 6.7(c) shall be applied as follows: (i) insurance proceeds from casualties or losses to cash or Inventory shall be applied, first, to the Overadvances and Protective Advances, pro rata, second, to the Non-Ratable Loans, third, to the Revolving Loans, fourth, to cash collateralize outstanding Facility LCs of the Borrower who received such proceeds, fifth, to the to cash collateralize outstanding Facility LCs of the other Borrowers, and sixth, to scheduled principal installments of the Term A Loans in inverse order of maturity and then, to the Term B Loans in the inverse order of maturity; and (ii) insurance or condemnation proceeds from casualties or losses to Equipment, Fixtures and real Property shall be applied first, to pay the principal of the Overadvances and Protective Advances, second, to scheduled principal installments of the Term A Loans in inverse order of maturity and then to the Term B Loans in the inverse order of maturity, third, to pay the principal of the Non-Ratable Loans, fourth, to pay the principal of the Revolving Loans, and fifth, after the occurrence and during the continuance of an Unmatured Default or a Default, to cash collateralize outstanding Facility LCs. The Revolving Commitment shall not be permanently reduced by the amount of any such prepayments. If the precise amount of insurance or condemnation proceeds allocable to Inventory as compared to Equipment, Fixtures and real Property is not otherwise determined, the allocation and application of those proceeds shall be determined by the Agent, in its Permitted Discretion.
(g) The applicable Borrower shall immediately repay the Term A Loans if at any time the aggregate outstanding principal amount of the Term A Loans relating to such Borrower exceeds 80% of the Net Orderly Liquidation of such Borrower’s Eligible Equipment, to the extent required to eliminate such excess.
2.16 Termination of the Facility.
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(a) Without limiting Section 2.3 or Section 8.1, (i) the Aggregate Commitments shall expire on the Facility Termination Date, (ii) the Aggregate Credit Exposure and all other unpaid Obligations shall be paid in full by the Borrowers on the Facility Termination Date, (iii) the Revolving Commitment shall expire on the Revolver Termination Date, (iv) the aggregate principal amount of the Term A Loans and all other unpaid Obligations related specifically thereto shall be paid in full by the Borrowers on the Facility Termination Date and (v) the aggregate principal amount of the Term B Loans and all other unpaid Obligations related specifically thereto shall be paid in full by the Borrowers on the Term B Termination Date.
(b) The Borrowers may terminate this Agreement with at least ten Business Days’ prior written notice thereof to the Agent and the Lenders, upon (i) the payment in full of all outstanding Loans, together with accrued and unpaid interest thereon, (ii) the cancellation and return of all outstanding Facility LCs (or alternatively, with respect to each such Facility LC, the furnishing to the Agent of a cash deposit or Supporting Letter of Credit as required by Section 2.1.2(l)), (iii) the payment in full of the early termination fee set forth in the following sentence (the “Prepayment Fee”), (iv) the payment in full of all reimbursable expenses and other Obligations together with accrued and unpaid interest thereon, and (v) the payment in full of any amount due under Section 3.4. Subject to Section 2.24, if this Agreement is terminated at any time prior to the Facility Termination Date, whether pursuant to this Section 2.16 or pursuant to Section 8.1, the Borrower shall pay to the Agent, for the account of the Lenders, an early termination fee determined in accordance with the following table:
Period during which early | ||
termination occurs |
Prepayment Fee |
|
On or prior to the first
anniversary of the Closing
Date
|
1.0% of the Prepayment Amount | |
After the first
anniversary of the Closing
Date but on or prior to
the second anniversary of
the Closing Date
|
.50% of the Prepayment Amount | |
After the second
anniversary of the Closing
Date
|
0% of the Prepayment Amount |
No such Prepayment Fee shall be payable in the event this Agreement is terminated in connection with refinancing of the Obligations in a transaction in which Bank One or one of its Affiliates that is a banking institution provides or arranges a replacement bank credit facility for the Borrowers.
(a) All payments of the Obligations hereunder shall be made, without setoff, deduction, or counterclaim, in immediately available funds to the Agent at
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the Agent’s address specified pursuant to Article XIII, or at any other Lending Installation of the Agent specified in writing by the Agent to the Borrower Representative, by noon (local time) on the date when due and shall be applied ratably by the Agent among the Lenders. Any payment received by the Agent after such time shall be deemed to have been received on the following Business Day and any applicable interest or fee shall continue to accrue. Solely for purposes of determining the amount of Loans available for borrowing purposes, checks and cash or other immediately available funds from collections of items of payment and proceeds of any Collateral shall be applied in whole or in part against the Obligations, on the day of receipt, subject to actual collection. Each payment delivered to the Agent for the account of any Lender shall be delivered promptly by the Agent to such Lender in the same type of funds that the Agent received at its address specified pursuant to Article XIII or at any Lending Installation specified in a notice received by the Agent from such Lender.
(b) At the election of the Agent, all payments of principal, interest, reimbursement obligations in connection with Facility LCs, fees, premiums, reimbursable expenses (including, without limitation, all reimbursement for fees and expenses pursuant to Section 9.6), and other sums payable under the Loan Documents, may be paid from the proceeds of Advances made hereunder whether made following a request by the Borrower Representative pursuant to Section 2.1 or a deemed request as provided in this Section 2.17 or may be deducted from the Funding Account or any other deposit account of any Borrower maintained with the Agent. Each Borrower hereby irrevocably authorizes (i) the Agent to make an Advance for the purpose of paying each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents and agrees that all such amounts charged shall constitute Loans (including Non- Ratable Loans , Overadvances and Protective Advances) and that all such Advances shall be deemed to have been requested pursuant to Section 2.1 and (ii) the Agent to charge the Funding Account or any other deposit account of any Borrower maintained with Bank One for each payment of principal, interest and fees as it becomes due hereunder or any other amount due under the Loan Documents.
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Protective Advances, fourth, to pay the principal of the Overadvances and Protective Advances, fifth, to pay interest due in respect of the Non-Ratable Loans, sixth, to pay interest due in respect of the Revolving Loans (other than Non-Ratable Loans, Overadvances and Protective Advances), seventh, to pay or prepay principal of the Non-Ratable Loans, eighth, to pay or prepay principal of the Revolving Loans (other than Non-Ratable Loans, Overadvances and Protective Advances) and unpaid reimbursement obligations in respect of Facility LCs, ninth, to pay an amount to the Agent equal to one hundred five percent (105%) of the aggregate undrawn face amount of all outstanding Facility LCs and the aggregate amount of any unpaid reimbursement obligations in respect of Facility LCs, to be held as cash collateral for such Obligations, tenth, to interest then due and payable on the Term A Loans and then to interest due and payable on the Term B Loans, eleventh, to prepay the scheduled principal installments of the Term A Loans in inverse order of maturity and then to prepay the scheduled principal installments of the Term B Loans in the inverse order of maturity, twelfth, to payment of any amounts owing with respect to Banking Services and Rate Management Obligations, and thirteenth, to the payment of any other Secured Obligation due to the Agent or any Lender by the Borrowers. Notwithstanding anything to the contrary contained in this Agreement, unless so directed by the Borrower Representative, or unless a Default is in existence, neither the Agent nor any Lender shall apply any payment which it receives to any Eurodollar Loan, except (a) on the expiration date of the Interest Period applicable to any such Eurodollar Loan or (b) in the event, and only to the extent, that there are no outstanding Floating Rate Loans and, in any event, the Borrowers shall pay the Eurodollar breakage losses in accordance with Section 3.4. The Agent and the Lenders shall have the continuing and exclusive right to apply and reverse and reapply any and all such proceeds and payments to any portion of the Secured Obligations.
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2.21 Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of the Borrowers to such Lender resulting from each Loan made by such Lender from time to time, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(b) The Agent shall also maintain accounts in which it will record (i) the amount of each Loan extended hereunder, the Type thereof, the name of the Borrower who requested such Loan and the Interest Period with respect thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from the Borrowers to each Lender hereunder, (iii) the original stated amount of each Facility LC and the amount of LC Obligations outstanding at any time, and (iv) the amount of any sum received by the Agent hereunder from the Borrowers and each Lender’s share thereof.
(c) The entries maintained in the accounts maintained pursuant to paragraphs (a) and (b) above shall be prima facie evidence of the existence and amounts of the Obligations therein recorded; provided however, that the failure of the Agent or any Lender to maintain such accounts or any error therein shall not in any manner affect the obligation of the Borrowers to repay the Obligations in accordance with their terms.
(d) Any Lender may request that its Revolving Loans be evidenced by a promissory note in substantially the form of Exhibit C (a “Revolving Note”), that its Term A Loans be evidenced by a promissory note in substantially the form of Exhibit C-2 attached hereto (a “Term A Note”) and that its Term B Loans be evidenced by a promissory note in substantially the form of Exhibit C-3 attached hereto (a “Term B Note”). In such event, each Borrower shall prepare, execute
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and deliver to such Lender such Note payable to the order of such Lender. Thereafter, the Revolving Loans evidenced by such Revolving Note, the Term A Loans evidenced by such Term A Note or the Term B Loans evidenced by the Term B Notes and interest thereon shall at all times (prior to any assignment pursuant to Section 12.3) be represented by one or more Notes payable to the order of the payee named therein, except to the extent that any such Lender subsequently returns any such Note for cancellation and requests that such Revolving Loans, Term A Loans or Term B Loans once again be evidenced as described in paragraphs (a) and (b) above.
2.23 Non-Receipt of Funds by the Agent; Defaulting Lenders.
(a) Unless the Borrower Representative or a Lender, as the case may be, notifies the Agent prior to the date on which it is scheduled to make payment to the Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case of the Borrowers, a payment of principal, interest or fees to the Agent for the account of the Lenders, that it does not intend to make such payment, the Agent may assume that such payment has been made. The Agent may, but shall not be obligated to, make the amount of such payment available to the intended recipient in reliance upon such assumption. If such Lender or the Borrowers, as the case may be, have not in fact made such payment to the Agent, the recipient of such payment shall, on demand by the Agent, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to (x) in the case of payment by a Lender, the Federal Funds Effective Rate for such day for the first three days and, thereafter, the interest rate applicable to the relevant Loan or (y) in the case of payment by the Borrowers, the interest rate applicable to the relevant Loan.
(b) If a payment has not been made by a Lender (a “Defaulting Lender”), the Agent will notify the Borrower Representative of such failure to fund and, upon demand by the Agent, the Borrowers shall pay such amount to the Agent for the Agent’s account, together with interest thereon for each day elapsed since the Borrowing Date at a rate per annum equal to the interest rate applicable
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to the relevant Loan. The Agent shall not be obligated to transfer to a Defaulting Lender any payments made by the Borrowers to the Agent for the Defaulting Lender’s benefit, and, in the absence of such transfer to the Defaulting Lender, the Agent shall transfer any such payments to each other non-Defaulting Lender ratably in accordance with their Pro Rata Share of the Commitments (but only to the extent that such Defaulting Lender’s Advance was funded by the other Lenders) or, if so directed by the Borrower Representative and if no Unmatured Default or Default has occurred and is continuing (and to the extent such Defaulting Lender’s Advance was not funded by the other Lenders), retain the same to be re-advanced to the Borrowers as if such Defaulting Lender had made Advances to the Borrowers. Subject to the foregoing, the Agent may hold and, in its Permitted Discretion, setoff such Defaulting Lender’s funding shortfall against that Defaulting Lender’s Pro Rata Share of all payments received from the Borrowers or re-lend to the Borrowers for the account of such Defaulting Lender the amount of all such payments received and retained by the Agent for the account of such Defaulting Lender. Until a Defaulting Lender cures its failure to fund its Pro Rata Share of any Advance (i) solely for the purposes of voting or consenting to matters with respect to the Loan Documents, such Defaulting Lender shall be deemed not to be a “Lender” and such Defaulting Lender’s Commitment shall be deemed to be zero, (ii) such Defaulting Lender shall not be entitled to any portion of the Unused Commitment Fee and (iii) the Unused Commitment Fee shall accrue in favor of the Lenders which have funded their respective Pro Rata Shares of such requested Advance and shall be allocated among such non-Defaulting Lenders ratably based on their Pro Rata Share of the Commitments. This Section shall remain effective with respect to such Defaulting Lender until (x) the Obligations under this Agreement shall have been declared or shall have become immediately due and payable, (y) the non-Defaulting Lenders, the Agent, and the Borrower Representative shall have waived such Defaulting Lender’s default in writing, or (z) the Defaulting Lender makes its Pro Rata Share of the applicable Advance and pays to the Agent all amounts owing by the Defaulting Lender in respect thereof. The operation of this Section shall not be construed to increase or otherwise affect the Commitment of any Lender, to relieve or excuse the performance by such Defaulting Lender or any other Lender of its duties and obligations hereunder.
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reserve, receive or retain, (a) any interest in excess of the maximum amount of nonusurious interest permitted under the laws of the State of Texas or the applicable laws (if any) of the U.S. or of any other applicable state, or (b) total interest in excess of the amount which such Lender could lawfully have contracted for, reserved, received, retained or charged had the interest been calculated for the full term of the Obligations at the Highest Lawful Rate. On each day, if any, that the interest rate (the “Stated Rate”) called for under this Agreement or any other Loan Document exceeds the Highest Lawful Rate, the rate at which interest shall accrue shall automatically be fixed by operation of this sentence at the Highest Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for each day thereafter until the total amount of interest accrued equals the total amount of interest which would have accrued if there were no such ceiling rate as is imposed by this sentence. Thereafter, interest shall accrue at the Stated Rate unless and until the Stated Rate again exceeds the Highest Lawful Rate when the provisions of the immediately preceding sentence shall again automatically operate to limit the interest accrual rate. The daily interest rates to be used in calculating interest at the Highest Lawful Rate shall be determined by dividing the applicable Highest Lawful Rate per annum by the number of days in the calendar year for which such calculation is being made. None of the terms and provisions contained in this Agreement or in any other Loan Document which directly or indirectly relate to interest shall ever be construed without reference to this Section 2.24, or be construed to create a contract to pay for the use, forbearance or detention of money at an interest rate in excess of the Highest Lawful Rate. If the term of any Obligation is shortened by reason of acceleration of maturity as a result of any Default or by any other cause, or by reason of any required or permitted prepayment, and if for that (or any other) reason any Lender at any time, including but not limited to, the stated maturity, is owed or receives (and/or has received) interest in excess of interest calculated at the Highest Lawful Rate, then and in any such event all of any such excess interest shall be canceled automatically as of the date of such acceleration, prepayment or other event which produces the excess, and, if such excess interest has been paid to such Lender, it shall be credited pro tanto against the then-outstanding principal balance of the Borrowers’ obligations to such Lender, effective as of the date or dates when the event occurs which causes it to be excess interest, until such excess is exhausted or all of such principal has been fully paid and satisfied, whichever occurs first, and any remaining balance of such excess shall be promptly refunded to its payor. Chapter 346 of the Texas Finance Code (which regulates certain revolving credit accounts (formerly Tex. Rev. Civ. Stat. Xxx. Art. 0000, Xx. 15)) shall not apply to this Agreement or to any Loan, nor shall this Agreement or any Loan be governed by or be subject to the provisions of such Chapter 346 in any manner whatsoever.
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ARTICLE III
(a) subjects any Lender or any applicable Lending Installation or the LC Issuer to any Taxes, or changes the basis of taxation of payments (other than with respect to Excluded Taxes) to any Lender or the LC Issuer in respect of its Eurodollar Loans, Facility LCs or participations therein, or
(b) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation or the LC Issuer (other than reserves and assessments taken into account in determining the interest rate applicable to Eurodollar Advances), or
(c) imposes any other condition the result of which is to increase the cost to any Lender or any applicable Lending Installation or the LC Issuer of making, funding or maintaining its Eurodollar Loans, or of issuing or participating in Facility LCs, or reduces any amount receivable by any Lender or any applicable Lending Installation or the LC Issuer in connection with its Eurodollar Loans, Facility LCs or participations therein, or requires any Lender or any applicable Lending Installation or the LC Issuer to make any payment calculated by reference to the amount of Eurodollar Loans, Facility LCs or participations therein held or interest or LC Fees received by it, by an amount deemed material by such Lender or the LC Issuer as the case may be,
and the result of any of the foregoing is to increase the cost to such Lender or applicable Lending Installation or the LC Issuer, as the case may be, of making or maintaining its Eurodollar Loans or Commitment or of issuing or participating in Facility LCs or to reduce the return received by such Lender or applicable Lending Installation or the LC Issuer, as the case may be, in
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connection with such Eurodollar Loans, Commitment, Facility LCs or participations therein, then, within fifteen days of demand by such Lender or the LC Issuer, as the case may be, the Borrowers shall pay such Lender or the LC Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the LC Issuer, as the case may be, for such increased cost or reduction in amount received.
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(a) All payments by the Borrowers to or for the account of any Lender, the LC Issuer or the Agent hereunder or under any Note or Facility LC Application shall be made free and clear of and without deduction for any and all Taxes. If any Borrower shall be required by law to deduct any Taxes from or in respect of any sum payable hereunder to any Lender, the LC Issuer or the Agent, (a) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the case may be) receives an amount equal to the sum it would have received had no such deductions been made, (b) such Borrower shall make such deductions, (c) such Borrower shall pay the full amount deducted to the relevant authority in accordance with applicable law and (d) such Borrower shall furnish to the Agent the original copy of a receipt evidencing payment thereof within thirty days after such payment is made.
(b) In addition, each Borrower hereby agrees to pay any present or future stamp or documentary taxes and any other excise or property taxes, charges or similar levies which arise from any payment made hereunder or under any Note or Facility LC Application or from the execution or delivery of, or otherwise with respect to, this Agreement or any Note or Facility LC Application (“Other Taxes”).
(c) The Borrower hereby agree to, jointly and severally, indemnify the Agent, the LC Issuer and each Lender for the full amount of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes imposed on amounts payable under this Section 3.5) paid by the Agent, the LC Issuer or such Lender as a result of its Commitment, any Loans made by it hereunder, any Facility LC issued hereunder or otherwise in connection with its participation in this Agreement and any liability (including penalties, interest and expenses) arising therefrom or with respect thereto. Payments due under this indemnification shall be made within thirty days of the date the Agent, the LC Issuer or such Lender makes demand therefor pursuant to Section 3.6.
(d) Each Lender that is not incorporated under the laws of the U.S. or a state thereof (each a “Non-U.S. Lender”) agrees that it will, not more than ten Business Days after the date of this Agreement, (i) deliver to the Agent two duly completed copies of U.S. Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any U.S. federal income taxes, and (ii) deliver to the Agent a U.S. Internal Revenue Form W-8 or W-9, as the case may be, and certify that it is entitled to an exemption from U.S. backup withholding tax. Each Non-U.S. Lender further undertakes to deliver to each of the Borrower Representative and the Agent (x) renewals or additional copies of such form (or any successor form) on or before the date that such form expires or becomes obsolete, and (y) after the occurrence of any event requiring a change in
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the most recent forms so delivered by it, such additional forms or amendments thereto as may be reasonably requested by the Borrower Representative or the Agent. All forms or amendments described in the preceding sentence shall certify that such Lender is entitled to receive payments under this Agreement without deduction or withholding of any U.S. federal income taxes, unless an event (including without limitation any change in treaty, law or regulation) has occurred prior to the date on which any such delivery would otherwise be required which renders all such forms inapplicable or which would prevent such Lender from duly completing and delivering any such form or amendment with respect to it and such Lender advises the Borrower Representative and the Agent that it is not capable of receiving payments without any deduction or withholding of U.S. federal income tax.
(e) For any period during which a Non-U.S. Lender has failed to provide the Borrower Representative with an appropriate form pursuant to clause (iv), above (unless such failure is due to a change in treaty, law or regulation, or any change in the interpretation or administration thereof by any governmental authority, occurring subsequent to the date on which a form originally was required to be provided), such Non-U.S. Lender shall not be entitled to indemnification under this Section 3.5 with respect to Taxes imposed by the U.S.; provided that, should a Non-U.S. Lender which is otherwise exempt from or subject to a reduced rate of withholding tax become subject to Taxes because of its failure to deliver a form required under clause (iv), above, the Borrowers shall take such steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption from or reduction of withholding tax with respect to payments under this Agreement or any Note pursuant to the law of any relevant jurisdiction or any treaty shall deliver to the Borrower Representative (with a copy to the Agent), at the time or times prescribed by applicable law, such properly completed and executed documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate.
(g) If the U.S. Internal Revenue Service or any other governmental authority of the U.S. or any other country or any political subdivision thereof asserts a claim that the Agent did not properly withhold tax from amounts paid to or for the account of any Lender (because the appropriate form was not delivered or properly completed, because such Lender failed to notify the Agent of a change in circumstances which rendered its exemption from withholding ineffective, or for any other reason), such Lender shall indemnify the Agent fully for all amounts paid, directly or indirectly, by the Agent as tax, withholding therefor, or otherwise, including penalties and interest, and including taxes imposed by any jurisdiction on amounts payable to the Agent under this subsection, together with all costs and expenses related thereto (including attorneys fees and time charges of attorneys for the Agent, which attorneys may be employees of the Agent). The
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obligations of the Lenders under this Section 3.5(g) shall survive the payment of the Obligations and termination of this Agreement.
3.6 Lender Statements; Survival of Indemnity.
To the extent reasonably possible, each Lender shall designate an alternate Lending Installation with respect to its Eurodollar Loans to reduce any liability of the Borrowers to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of Eurodollar Advances under Section 3.3, so long as such designation is not, in the judgment of such Lender, disadvantageous to such Lender. Each Lender shall deliver a written statement of such Lender to the Borrower Representative (with a copy to the Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in reasonable detail the calculations upon which such Lender determined such amount and shall be final, conclusive and binding on the Borrowers in the absence of manifest error. Determination of amounts payable under such Sections in connection with a Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar Loan through the purchase of a deposit of the type and maturity corresponding to the deposit used as a reference in determining the Eurodollar Rate applicable to such Loan, whether in fact that is the case or not. Unless otherwise provided herein, the amount specified in the written statement of any Lender shall be payable on demand after receipt by the Borrower Representative of such written statement. The obligations of the Borrowers under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and termination of this Agreement.
If the Borrowers are required pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any Lender’s obligation to make or continue, or to convert Floating Rate Advances into, Eurodollar Advances shall be suspended pursuant to Section 3.3 or if any Lender is a Defaulting Lender (any such Lender, an “Affected Lender”), the Borrowers may elect, if such amounts continue to be charged or such suspension is still effective, to replace such Affected Lender as a Lender party to this Agreement, provided that, no Default or Unmatured Default shall have occurred and be continuing at the time of such replacement, and provided further that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers and the Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Affected Lender pursuant to an Assignment Agreement (and a Defaulting Lender shall be deemed to have executed and delivered such Assignment Agreement if it fails to do so) and to become a Lender for all purposes under this Agreement and to assume all obligations of the Affected Lender to be terminated as of such date and to comply with the requirements of Section 12.3 applicable to assignments, and (ii) the Borrowers shall pay to such Affected Lender in same day funds on the day of such replacement (A) all interest, fees and other amounts then accrued but unpaid to such Affected Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 3.4 had the Loans of such Affected Lender been prepaid on such date rather than sold to the replacement Lender.
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ARTICLE IV
(a) This Agreement or counterparts hereof shall have been duly executed by each Loan Party, the Agent and the Lenders; and the Agent shall have received duly executed copies of the Loan Documents and such other documents, instruments, agreements and legal opinions as the Agent shall reasonably request in connection with the transactions contemplated by this Agreement and the other Loan Documents, each in form and substance reasonably satisfactory to the Agent.
(b) Each Loan Party shall have delivered copies of its articles or certificate of incorporation or organization, together with all amendments, and a certificate of good standing, each certified by the appropriate governmental officer in its jurisdiction of incorporation or organization.
(c) Each Loan Party shall have delivered copies, certified by its Secretary or Assistant Secretary, of its by-laws or operating, management or partnership agreement and of its Board of Directors’ resolutions or the resolutions of its members and of resolutions or actions of any other body authorizing the execution, delivery and performance of the Loan Documents to which such Loan Party is a party.
(d) Each Loan Party shall have delivered an incumbency certificate, executed by its Secretary or Assistant Secretary, which shall identify by name and title and bear the signatures of the Authorized Persons and any other officers such Loan Party authorized to sign the Loan Documents to which such Loan Party is a party, upon which certificate the Agent and the Lenders shall be entitled to rely until informed of any change in writing by such Loan Party.
(e) Each Borrower and each other Loan Party shall have delivered a certificate, signed by the chief financial officer of such Borrower and such other Loan Party, on the initial Credit Extension Date (i) stating that no Default or Unmatured Default has occurred and is continuing, (ii) stating that the representations and warranties contained in Article V are true and correct as of such Credit Extension Date, (iii) specifying the deposit account at Bank One which shall be used as the Funding Account and (iv) certifying any other factual matters as may be reasonably requested by the Agent or any Lender.
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(f) The Loan Parties shall have delivered a written opinion of the Loan Parties’ counsel, addressed to the Agent, the LC Issuer and the Lenders in substantially the form of Exhibit D.
(g) The Borrowers shall have delivered any Notes requested by a Lender pursuant to Section 2.21 payable to the order of each such requesting Lender.
(h) The Borrowers shall have delivered money transfer authorizations as the Agent may have reasonably requested.
(i) [reserved]
(j) The Agent shall have received all Lien and other searches that the Agent deems necessary, the Loan Parties shall have delivered UCC termination statements or amendments to existing UCC financing statements with respect to any filings against the Collateral as may be requested by the Agent and shall have authorized the filing of such termination statements or amendments, the Agent shall have been authorized to file any UCC financing statements that the Agent deems necessary to perfect its Liens in the Collateral and Liens creating a first priority security interest in the Collateral in favor of the Agent shall have been perfected.
(k) The Borrower Representative shall have delivered an Aggregate Borrowing Base Certificate which calculates the Aggregate Borrowing Base as of the end of the Business Day immediately preceding the Effective Date and each Borrower shall have delivered a duly executed Borrowing Base Certificate for such Borrower which calculates such Borrower’s Borrowing Base as of the end of the Business Day immediately preceding the Effective Date.
(l) The Borrowers shall have delivered to the Agent and the Lenders the audited consolidated financial statements of the Company and its Subsidiaries for the period ending on September 30, 2003 and unaudited consolidated financial statements of the Company and its Subsidiaries for the period ending on May 31, 2004.
(m) The Agent shall have completed its business due diligence and the Loan Parties’ corporate structure, capital structure, material accounts and governing documents shall be acceptable to the Agent. In addition, the terms and conditions of all Indebtedness of each Loan Party shall be acceptable to the Agent.
(n) All legal (including tax implications) and regulatory matters, including, but not limited to compliance with applicable requirements of Regulations U, T and X of the Board of Governors of the Federal Reserve System, shall be satisfactory to the Agent and the Lenders.
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(o) The Loan Parties shall have delivered (i) Collateral audits, satisfactory to the Agent, prepared by an independent firm engaged directly by the Agent, and (ii) appraisals, prepared by an independent appraiser engaged directly by the Agent, of specific equipment, which audits and appraisals shall be satisfactory to the Agent.
(p) The Loan Parties shall have delivered any requested environmental review reports from firm(s) satisfactory to the Agent, which review reports shall be acceptable to the Agent. Any environmental hazards or liabilities identified in any such environmental review reports shall indicate the Loan Parties’ plans with respect thereto.
(q) The Borrowers shall have delivered evidence of insurance coverage in form, scope, and substance reasonably satisfactory to the Agent and otherwise in compliance with the terms of Section 6.7.
(t) The Agent shall have determined that (i) since May 13, 2004, there is an absence of any material adverse change or disruption in primary or secondary loan syndication markets, financial markets or in capital markets generally that would likely impair syndication of the Credit Extensions hereunder and (ii) the Loan Parties shall have fully cooperated with the Agent’s syndication efforts including, without limitation, by providing the Agent with information regarding the Loan Parties’ operations and prospects and such other information as the Agent deems necessary to successfully syndicate the Credit Extensions hereunder.
(u) The Borrowers shall have delivered a properly completed Facility LC Application if the initial Credit Extension will include the issuance of a Facility LC. The Borrowers shall have executed the LC Issuer’s master agreement for the issuance of Letters of Credit.
(v) After giving effect to all Credit Extensions to be made on the Effective Date and payment of all fees and expenses due hereunder, and with all of the Loan Parties’ indebtedness, liabilities, and obligations current, the Borrowers’ Availability shall not be less than $20,000,000.
(w) The Borrowers shall have paid all of the fees and expenses owing to the Agent, the Arranger, the LC Issuer and the Lenders pursuant to Section 2.10, and Section 9.6(a).
(x) The Loan Parties shall have delivered to the Agent their most recent statement of the Unfunded Liabilities of each Single Employer Plan, certified as correct by an actuary enrolled under ERISA.
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(y) The Agent shall have received evidence that the Borrower has delivered notice under the Indenture of their intention to repurchase all of the outstanding Convertible Notes and terminate the Indenture.
(z) The Loan Parties shall have delivered such other documents as the Agent, the LC Issuer, any Lender or their respective counsel may have reasonably requested.
(a) There exists any Default or Unmatured Default or any Default or Unmatured Default shall result from any such Credit Extension and the Agent or the Required Lenders shall have determined not to make any Credit Extension as a result of such Default or Unmatured Default.
(b) Any representation or warranty contained in Article V is untrue or incorrect as of such Credit Extension Date except to the extent any such representation or warranty is stated to relate solely to an earlier date, and the Agent or the Required Lenders shall have determined not to make any Credit Extension as a result of the fact that such representation or warranty is untrue or incorrect.
(c) After giving effect to any Credit Extension, the Borrowers’ Availability would be less than zero.
Each Borrowing Notice or request for issuance of Facility LC with respect to each such Credit Extension shall constitute a representation and warranty by each Borrower that the conditions contained in Section 4.1 have been satisfied and that none of the conditions set forth in Section 4.2 exist as of the applicable Credit Extension Date. Any Lender may require a duly completed Compliance Certificate as a condition to making a Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Lenders as follows:
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(a) The audited consolidated financial statements of the Company and its Subsidiaries for the period ending on September 30, 2003 heretofore delivered to the Lenders were prepared in accordance with GAAP (as in effect on the date such statements were prepared) and fairly present the consolidated financial condition and operations of the Company and its Subsidiaries at such date and the consolidated results of their operations for the period then ended. The unaudited consolidated financial statements of the Company and its Subsidiaries for the Fiscal Month ended May 31, 2004 heretofore delivered by the Borrowers to the
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Lenders were prepared in accordance with GAAP (as in effect on the date such statements were prepared except for the presentation of footnotes and for applicable normal year-end audit adjustments) and fairly present the consolidated financial condition and operations of the Company and its Subsidiaries at such date and the consolidated results of their operations for the period then ended.
(b) The Projections dated June 24, 2004 and the most recent Projections delivered to the Agent and the Lenders pursuant to Section 6.1(d), represent the Borrowers’ good faith estimate of the future financial performance of the Borrowers for the period set forth therein.
5.6 Material Adverse Change. Since September 30, 2003 there has been no change in the business, Property, prospects, condition (financial or otherwise) or results of operations of the Loan Parties which could reasonably be expected to have a Material Adverse Effect.
5.7 Taxes. The Loan Parties have filed all U.S. federal tax returns and all other tax returns which are required to be filed and have paid all taxes due pursuant to said returns or pursuant to any assessment received by any Loan Party, except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided in accordance with GAAP and as to which no Lien exists. The U.S. income tax returns of the Loan Parties have been audited by the Internal Revenue Service through the Fiscal Year ended 2001. No tax liens have been filed and no claims are being asserted with respect to any such taxes. The charges, accruals and reserves on the books of the Loan Parties in respect of any taxes or other governmental charges are adequate. If any Loan Party is a limited liability company, each such limited liability company qualifies for partnership tax treatment under U.S. federal tax law.
5.8 Litigation and Contingent Obligations. Except as set forth on Schedule 5.8, there is no litigation, arbitration, governmental investigation, proceeding or inquiry pending or, to the knowledge of any of their officers, threatened against or affecting any Loan Party which could reasonably be expected to have a Material Adverse Effect or which seeks to prevent, enjoin or delay the making of any Credit Extensions. Other than any liability incident to any litigation, arbitration or proceeding which (i) could not reasonably be expected to have a Material Adverse Effect or (ii) is set forth on Schedule 5.8, no Loan Party has any material contingent obligations not provided for or disclosed in the financial statements referred to in Section 5.5.
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relevant with respect to such ownership interests) duly authorized and issued and is fully paid and non-assessable.
5.14 Material Agreements. Schedule 5.14 hereto sets forth as of the Closing Date all material agreements and contracts to which any Loan Party is a party or is bound as of the date hereof that were executed after March 31, 2004 or that are not listed in any public filing with the Securities and Exchange Commission. No Loan Party is subject to any charter or other corporate restriction which could reasonably be expected to have a Material Adverse Effect. No Loan Party is in default in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any material agreement to which it is a party (including any such agreement or instrument evidencing or governing Indebtedness).
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businesses or the ownership of their respective Property, except for any failure to comply with any of the foregoing which could not reasonably be expected to have a Material Adverse Effect.
5.23 Affiliate Transactions. Except as set forth on Schedule 5.23, as of the Closing Date, there are no existing or proposed agreements, arrangements, understandings, or transactions between any Loan Party and any of the officers, members, managers, directors, parents, other interest holders, employees, or Affiliates (other than Subsidiaries) of any Loan Party, any holder of five percent (5%) or more of the Capital Stock of any Loan Party, or any
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members of any of the foregoing Persons’ respective immediate families, and none of the foregoing Persons are directly or indirectly indebted to or have any direct or indirect ownership, partnership, or voting interest in any Affiliate of any Loan Party or any Person with which any Loan Party has a business relationship or which competes with any Loan Party.
(a) Immediately after the consummation of the transactions to occur on the date hereof and immediately following the making of each Credit Extension, if any, made on the date hereof and after giving effect to the application of the proceeds of such Credit Extensions, (a) the fair value of the assets of each Loan Party, at a fair valuation, will exceed the debts and liabilities, subordinated, contingent or otherwise, of each Loan Party; (b) the present fair saleable value of the Property of each Loan Party will be greater than the amount that will be required to pay the probable liability of each Loan Party on its debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured; (c) each Loan Party will be able to pay its debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured; and (d) each Loan Party will not have unreasonably small capital with which to conduct the businesses in which it
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is engaged as such businesses are now conducted and are proposed to be conducted after the date hereof.
(b) No Borrower intends to, nor will any Borrower permit any of its Subsidiaries to, and no Borrower believes that it or any of its Subsidiaries will, incur debts beyond its ability to pay such debts as they mature, taking into account the timing of and amounts of cash to be received by it or any such Subsidiary and the timing of the amounts of cash to be payable on or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.
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ARTICLE VI
Each Loan Party executing this Agreement jointly and severally agrees as to all Loan Parties that from and after the date hereof and until the Facility Termination Date:
(a) within ninety days after the close of each Fiscal Year of the Company and its Subsidiaries, an unqualified audit report certified by independent certified public accountants acceptable to the Required Lenders, prepared in accordance with GAAP on a consolidated and consolidating basis (consolidating statements need not be certified by such accountants), including balance sheets as of the end of such Fiscal Year, related profit and loss and reconciliation of surplus statements, and a statement of cash flows, accompanied by (i) any management letter prepared by said accountants and (ii) a certificate of said accountants that, in the course of their examination necessary for their certification of the foregoing, they have obtained no knowledge of any Default or Unmatured Default, or if, in the opinion of such accountants, any Default or Unmatured Default shall exist, stating the nature and status thereof;
(b) within forty-five days after the close of the first three quarterly periods of each Fiscal Year of the Company and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such Fiscal Quarter and consolidated profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of the applicable Fiscal Year to the end of such Fiscal Quarter, all certified by its chief financial officer and prepared in accordance with GAAP (except for exclusion of footnotes and subject to normal year-end audit adjustments);
(c) within thirty days after the close of each Fiscal Month of the Company and its Subsidiaries, consolidated unaudited balance sheets as at the close of each such Fiscal Month and consolidated profit and loss and reconciliation of surplus statements and a statement of cash flows for the period from the beginning of the applicable Fiscal Year to the end of such Fiscal Month, all prepared in accordance with GAAP (except for exclusion of footnotes and subject to normal year-end audit adjustments) and certified by its chief financial officer;
(d) as soon as available, but in any event not more than 60 days prior to the end of each Fiscal Year of the Company, but not less than 30 days prior to the end of such Fiscal Year, a copy of the plan and forecast (including a projected consolidated and consolidating balance sheet, income statement and funds flow
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statement) of the Company for each quarter of such Fiscal Year (the “Projections”) in form reasonably satisfactory to the Agent;
(e) together with each of the financial statements required under Sections 6.1(a) and (c), a compliance certificate in substantially the form of Exhibit E (a “Compliance Certificate”) signed by the chief financial officer of the Borrower Representative showing the calculations necessary to determine compliance with this Agreement and stating that no Default or Unmatured Default exists, or if any Default or Unmatured Default exists, stating the nature and status thereof.
(f) as soon as available but in any event within 20 days of the end of each calendar month, at such other times as may be necessary to re-determine availability of Advances hereunder or as may be requested by the Agent, as of the period then ended, an Aggregate Borrowing Base Certificate, together with a duly executed Borrowing Base Certificate for each Borrower which calculates such Borrower’s Borrowing Base, and supporting information in connection therewith;
(g) as soon as available but in any event within 20 days of the end of each Fiscal Month and at such other times as may be requested by the Agent, as of the period then ended:
(i) a summary aging of the Accounts of each Borrower owing by each of such Borrower’s Account Debtors and, if requested by Agent, a detailed aging of each Borrower’s Accounts including all invoices aged by invoice or due date, in either case reconciled to each such Borrower’s Borrowing Base Certificate delivered as of such date prepared in a manner reasonably acceptable to the Agent;
(ii) a schedule detailing each Borrower’s Inventory, in form satisfactory to the Agent, (1) by class (raw material, work-in-process and finished goods), by product type, and by volume on hand, which Inventory shall be valued at the lower of cost (determined on a first-in, first-out basis or average cost basis) or market and (2) reconciled to each such Borrower’s Borrowing Base Certificate delivered as of such date prepared in a manner reasonably acceptable to the Agent;
(iii) a worksheet of calculations prepared by each Borrower to determine Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts and Inventory excluded from Eligible Accounts and Eligible Inventory and the reason for such exclusion;
(iv) a reconciliation of each Borrower’s Accounts and Inventory between the amounts shown in such Borrower’s general ledger and financial statements and the reports delivered pursuant to clauses (i) and (ii) above; and
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(v) a reconciliation of the loan balance per each Borrower’s general ledger to the loan balance under this Agreement.
(h) as soon as available but in any event within 20 days of the end of each Fiscal Month and at such other times as may be requested by the Agent, as of the month then ended, a schedule and aging of the Borrowers’ accounts payable;
(i) promptly upon the Agent’s request:
(i) copies of invoices in connection with the invoices issued by the Borrowers in connection with any Accounts, credit memos, shipping and delivery documents, and other information related thereto;
(ii) copies of purchase orders, invoices, and shipping and delivery documents in connection with any Inventory or Equipment purchased by any Loan Party; and
(iii) a schedule detailing the balance of all intercompany accounts of the Loan Parties;
(j) as soon as possible and in any event within thirty (30) days of filing thereof, copies of all tax returns filed by any Loan Party with the U.S. Internal Revenue Service (without schedules and other attachments thereto, unless otherwise requested by Agent);
(k) as soon as possible and in any event within two-hundred and seventy days after the close of the Fiscal Year of the Company, a statement of the Unfunded Liabilities of each Single Employer Plan, certified as correct by an actuary enrolled under ERISA;
(l) as soon as possible and in any event within ten days after any Borrower knows that any Reportable Event has occurred with respect to any Plan, a statement, signed by the chief financial officer of such Borrower, describing said Reportable Event and the action which such Borrower proposes to take with respect thereto;
(m) as soon as possible and in any event within thirty (30) days of filing therewith with the PBGC, the U.S. Internal Revenue Service or any other governmental entity, a copy of each annual report or other filing with respect to any Plan;
(n) as soon as possible and in any event within ten days after receipt by any Loan Party, a copy of (i) any notice or claim to the effect that any Loan Party is or may be liable to any Person as a result of the release by any Loan Party, or any other Person of any toxic or hazardous waste or substance into the environment, and (ii) any notice alleging any violation of any federal, state or local environmental, health or safety law or regulation by the any Loan Party;
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(o) [reserved];
(p) concurrently with the furnishing thereof to the shareholders of the Borrowers, copies of all financial statements, reports and proxy statements so furnished;
(q) promptly upon the filing thereof, copies of all registration statements and annual, quarterly, monthly or other regular reports which any Loan Party files with the Securities and Exchange Commission;
(r) as soon as possible and in any event within 20 days after the end of each calendar month, a detailed listing of all advances of proceeds of Loans made by the Borrower Representative to each Borrower during the immediately preceding calendar month and a detailed listing of all intercompany loans made by the Borrowers during such calendar month;
(s) upon the request of Agent, a certificate of good standing for each Loan Party from the appropriate governmental officer in its jurisdiction of incorporation, formation, or organization; and
(t) such other information (including non-financial information) as the Agent or any Lender may from time to time reasonably request.
(a) The Borrowers will use the proceeds of the Credit Extensions (i) to repay the outstanding indebtedness, liabilities and obligations under the Prior Agreement, (ii) for general corporate purposes (not otherwise prohibited by this Agreement), (iii) for the Convertible Note Repurchase and (iv) for Permitted Acquisitions.
(b) No Loan Party will use any of the proceeds of the Credit Extensions to (i) purchase or carry any Margin Stock in violation of Regulation U, (ii) repay or refinance any Indebtedness of any Person incurred to buy or carry any Margin Stock, (iii) acquire any security in any transaction that is subject to Section 13 or Section 14 of the Securities Exchange Act of 1934 (and the regulations promulgated thereunder), or (iv) make any Acquisition other than the Convertible Note Repurchase or Permitted Acquisitions.
6.3 Notices. Each Loan Party will give prompt notice in writing to the Agent and the Lenders of:
(a) the occurrence of any Default or Unmatured Default;
(b) any other development, financial or otherwise, which could reasonably be expected to have a Material Adverse Effect;
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(c) the assertion by the holder of any Capital Stock of any Loan Party or the holder of any Indebtedness of any Loan Party in excess of $1,000,000 that any default exists with respect thereto or that any Loan Party is not in compliance therewith;
(d) receipt of any written notice that any Loan Party is subject to any investigation by any governmental entity with respect to any potential or alleged violation of any applicable Environmental Law or of imposition of any Lien against any Property of any Loan Party for any liability with respect to damages arising from, or costs resulting from, any violation of any Environmental Laws;
(e) receipt of any notice of litigation commenced or threatened against any Loan Party that (i) seeks damages in excess of $1,000,000, (ii) seeks injunctive relief, (iii) is asserted or instituted against any Plan, its fiduciaries or its assets, (iv) alleges criminal misconduct by any Loan Party, (v) alleges the violation of any law regarding, or seeks remedies in connection with, any Environmental Laws; or (vi) involves any product recall;
(f) any Lien (other than Permitted Liens) or claim made or asserted against any of the Collateral;
(g) its decision to change, (i) such Loan Party’s name or type of entity, (ii) such Loan Party’s articles or certificate of incorporation, partnership agreement, certificate of partnership, articles or certificate of organization, by-laws, or operating or other management agreement, and (iii) the location where any Collateral is held or maintained, if the new location is not identified on Exhibit A to the Security Agreement or is a location for which Agent has not received a Collateral Access Agreement; provided that, in no event shall the Agent receive notice of such change less than thirty days prior thereto;
(h) commencement of any proceedings contesting any tax, fee, assessment, or other governmental charge in excess of $1,000,000;
(i) the opening of any new deposit account by any Loan Party with any bank or other financial institution;
(j) any loss, damage, or destruction to the Collateral in the amount of $1,000,000 or more, whether or not covered by insurance;
(k) any and all default notices received under or with respect to any leased location or public warehouse where Collateral is located (which shall be delivered within two Business Days after receipt thereof);
(l) all material amendments to real estate leases, together with a copy of each such amendment;
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(m) immediately after becoming aware of any pending or threatened strike, work stoppage, unfair labor practice claim, or other labor dispute affecting the Borrower or any of its Subsidiaries in a material manner;
(n) evidence of payment of monthly lease or rental payments as to each leased or rented location for which a landlord or bailee waiver has not been obtained (which shall be delivered within three Business Days after payment thereof);
(o) the fact that such Loan Party has entered into a Rate Management Transaction or an amendment to a Rate Management Transaction, together with copies of all agreements evidencing such Rate Management Transactions or amendments thereto (which shall be delivered within two Business Days);
(p) any amendment, modification, non-renewal, default under or termination of any Material License or the acquisition by any Loan Party of any license after the Closing Date; and
(q) any other matter as the Agent may reasonably request.
6.4 Conduct of Business. Each Loan Party will:
(a) carry on and conduct its business in substantially the same manner and in substantially the same fields of enterprise as it is presently conducted;
(b) do all things necessary to remain duly incorporated or organized, validly existing and (to the extent such concept applies to such entity) in good standing as a domestic corporation, partnership or limited liability company in its jurisdiction of incorporation or organization, as the case may be, and maintain all requisite authority to conduct its business in each jurisdiction in which its business is conducted (except for jurisdictions other than its jurisdiction of incorporation or organization where such authority may be retroactively and ministerially obtained and where failure to have such authority could not reasonably be expected to have a Material Adverse Effect);
(c) keep adequate books and records with respect to its business activities in which proper entries, reflecting all financial transactions, are made in accordance with GAAP and on a basis consistent with the Financial Statements delivered to the Agent pursuant to Section 4.1(m);
(d) at all times maintain, preserve and protect all of its assets and properties used or useful in the conduct of its business, and keep the same in good repair, working order and condition in all material respects (taking into consideration ordinary wear and tear) and from time to time make, or cause to be made, all necessary or appropriate repairs, replacements and improvements thereto consistent with industry practices; and
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(e) transact business only in such corporate and trade names as are set forth in Schedule 5.12.
6.5 Taxes. Each Loan Party will timely file complete and correct U.S. federal and applicable foreign, state and local tax returns required by law and pay before delinquent all taxes, assessments and governmental charges and levies upon it or its income, profits, Property or Collateral, except those which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been set aside in accordance with GAAP. At any time that any Loan Party is organized as a limited liability company, each such limited liability company will qualify for partnership tax treatment under U.S. federal tax law.
(a) Each Loan Party shall at all times maintain, with financially sound and reputable carriers having a Financial Strength rating of at least A+ by A.M. Best Company, insurance against: (i) loss or damage by fire and loss in transit; (ii) theft, burglary, pilferage, larceny, embezzlement, and other criminal activities; (iii) business interruption; (iv) general liability and (v) and such other hazards, as is customary in the business of such Loan Party. All such insurance shall be in amounts, cover such assets and be under policies acceptable to the Agent in its Permitted Discretion. In the event any Collateral is located in any area that has been designated by the Federal Emergency Management Agency as a “Special Flood Hazard Area,” the applicable Loan Party shall purchase and maintain flood insurance on such Collateral (including any personal Property which is located on any real Property leased by such Loan Party within a “Special Flood Hazard Area”). The amount of all insurance required by this Section shall at a minimum comply with applicable law, including the Flood Disaster Protection Act of 1973, as amended. All premiums on such insurance shall be paid when due by the applicable Loan Party, and copies of the policies delivered to the Agent. If any Loan Party fails to obtain any insurance as required by this Section, the Agent at the direction of the Required Lenders may obtain such insurance at the Borrowers’ expense. By purchasing such insurance, the Agent shall not be deemed to have waived any Default or Unmatured Default arising from any Loan
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Party’s failure to maintain such insurance or pay any premiums therefor. No Loan Party will use or permit any Property to be used in violation of applicable law or in any manner which might render inapplicable any insurance coverage.
(b) All insurance policies required under Section 6.7(a) shall name the Agent (for the benefit of the Agent and the Lenders) as an additional insured or as loss payee, as applicable, and shall provide that, or contain loss payable clauses or mortgagee clauses, in form and substance satisfactory to the Agent, which provide that:
(i) all proceeds thereunder with respect to any Collateral shall be payable to the Agent;
(ii) no such insurance shall be affected by any act or neglect of the insured or owner of the Property described in such policy; and
(iii) such policy and loss payable clauses may be canceled, amended, or terminated only upon at least thirty days prior written notice given to the Agent.
(c) The Borrowers must give the Agent prior written notice of any change in insurance carriers and any new insurance policy shall comply with the provisions of this Section 6.7 and otherwise be acceptable to the Agent. Without in any way limiting the foregoing, in no event shall the Borrowers change their insurance carrier without first obtaining a loss payable endorsement in form and substance satisfactory to the Agent.
(d) Notwithstanding the foregoing, any insurance or condemnation proceeds received by the Loan Parties shall be immediately forwarded to the Agent and the Agent may, at its option, apply any such proceeds to the reduction of the Obligations in accordance with Section 2.15(e), provided that in the case of insurance proceeds pertaining to any Loan Party other than the Borrowers, such insurance proceeds shall be applied to the Loans owing by the Borrowers. The Agent may permit or require any Loan Party to use such money, or any part thereof, to replace, repair, restore or rebuild the Collateral in a diligent and expeditious manner with materials and workmanship of substantially the same quality as existed before the loss, damage or destruction. Notwithstanding the foregoing, if the casualty giving rise to such insurance proceeds could not reasonably be expected to have a Material Adverse Effect and such insurance proceeds do not exceed $1,000,000 in the aggregate, upon the applicable Loan Party’s request, the Agent shall permit such Loan Party to replace, restore, repair or rebuild the property; provided that, if such Loan Party has not completed or entered into binding agreements to complete such replacement, restoration, repair or rebuilding within ninety days of such casualty, the Agent may apply such insurance proceeds to the Obligations in accordance with Section 2.15. All insurance proceeds that are to be made available to the Borrowers to replace, repair, restore or rebuild the Collateral shall be applied by the Agent to reduce the
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outstanding principal balance of the Revolving Loans (which application shall not result in a permanent reduction of the Revolving Commitment) and upon such application, the Agent shall establish a Reserve against the Aggregate Borrowing Base in an amount equal to the amount of such proceeds so applied. All insurance proceeds made available to any Loan Party that is not a Borrower to replace, repair, restore or rebuild Collateral shall be deposited in a cash collateral account. In either case, thereafter, such funds shall be made available to the applicable Loan Party to provide funds to replace, repair, restore or rebuild the Collateral as follows:
(i) the Borrower Representative, on behalf of the applicable Borrower, shall request a Revolving Loan or the Borrower Representative, on behalf of the applicable Loan Party, shall request a release from the cash collateral account be made in the amount needed;
(ii) so long as the conditions set forth in Section 4.2 have been met, the Revolving Lenders shall make such Revolving Loan or the Agent shall release funds from the cash collateral account; and
(iii) in the case of insurance proceeds applied against the Revolving Loan, the Reserve established with respect to such insurance proceeds shall be reduced by the amount of such Revolving Loan.
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Furthermore, so long as any Default has occurred and is continuing, each Loan Party shall provide the Agent and each Lender with access to its suppliers. Each Loan Party shall promptly make available to the Agent and its counsel originals or copies of all books and records that the Agent may reasonably request. The Loan Parties acknowledge that from time to time the Agent may prepare and may distribute to the Lenders certain audit reports pertaining to the Loan Parties’ assets for internal use by the Agent and the Lenders from information furnished to it by or on behalf of the Loan Parties, after the Agent has exercised its rights of inspection pursuant to this Agreement.
6.15 Additional Collateral; Further Assurances.
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(a) Subject to applicable law, each Loan Party shall, unless the Required Lenders otherwise consent, (i) cause each of its Subsidiaries (excluding any Foreign Subsidiary) to become or remain a Loan Party and a Guarantor and (ii) cause each (excluding any Foreign Subsidiary) formed or acquired after the Closing Date in accordance with the terms of this Agreement to (1) become a party to this Agreement by executing the Joinder Agreement set forth as Exhibit F hereto (the “Joinder Agreement”), and (2) guarantee payment and performance of the Guaranteed Obligations pursuant to the Guaranty.
(b) Upon the request of the Agent, each Loan Party shall (i) grant Liens to the Agent, for the benefit of the Agent and the Lenders, pursuant to such documents as the Agent may reasonably deem necessary and deliver such property, documents, and instruments as the Agent may request to perfect the Liens of the Agent in any Property of such Loan Party which constitutes Collateral, including any parcel of real Property located in the U.S. owned by any Loan Party, and (ii) in connection with the foregoing requirements, or either of them, deliver to the Agent all items of the type required by Section 4.1 (as applicable). Upon execution and delivery of such Loan Documents and other instruments, certificates, and agreements, each such Person shall automatically become a Guarantor hereunder and thereupon shall have all of the rights, benefits, duties, and obligations in such capacity under the Loan Documents.
(c) Each Loan Party will cause (i) 100% of the issued and outstanding Capital Stock of each of its Domestic Subsidiaries and (ii) 65% (or such greater percentage that, due to a change in an applicable law after the date hereof, (1) could not reasonably be expected to cause the undistributed earnings of such Foreign Subsidiary as determined for U.S. federal income tax purposes to be treated as a deemed dividend to such Foreign Subsidiary’s U.S. parent and (2) could not reasonably be expected to cause any material adverse tax consequences) of the issued and outstanding Capital Stock entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) and 100% of the issued and outstanding Capital Stock not entitled to vote (within the meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign Subsidiary directly owned by such Loan Party or any Domestic Subsidiary to be subject at all times to a first priority, perfected Lien in favor of the Agent pursuant to the terms and conditions of the Loan Documents or other security documents as the Agent shall reasonably request.
(d) Without limiting the foregoing, each Loan Party shall, and shall cause each of the Borrowers’ Subsidiaries which is required to become a Loan Party pursuant to the terms of this Agreement to, execute and deliver, or cause to be executed and delivered, to the Agent such documents and agreements, and shall take or cause to be taken such actions as the Agent may, from time to time, reasonably request to carry out the terms and conditions of this Agreement and the other Loan Documents.
(e) Notwithstanding the foregoing, at any time after a Default has occurred, each Loan Party shall, upon the request of the Agent, cause each
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Foreign Subsidiary to become a Loan Party and a Guarantor and to grant Liens to the Agent on its assets and have the balance of its stock pledged to the Agent.
(a) No Loan Party will or will permit any of their Subsidiaries to declare or pay any dividends or make any distributions on its Capital Stock (other than dividends or distributions payable in its own common stock) or redeem, repurchase or otherwise acquire or retire any of its Capital Stock at any time outstanding, except (i) that any Subsidiary may declare and pay dividends or make distributions to the Borrowers or to a Wholly-Owned Subsidiary of the Borrowers or (ii) any Loan Party may declare or pay dividends or make distributions on its Capital Stock or redeem, repurchase or otherwise acquire or retire any of its Capital Stock at any time outstanding and any non-Wholly-Owned Subsidiary may declare or pay dividends or make distributions on its Capital Stock to holders thereof other than Loan Parties, in each case, so long as (x) no Default or Unmatured Default exists or will be caused by the payment of such dividend or distribution, (y) the Borrowers are in compliance with Section 6.29.1 after giving effect to such dividend or distribution and (z) the Availability is greater than ten percent (10%) of the Aggregate Borrowing Base after giving effect to such dividend or distribution.
(b) No Loan Party shall directly or indirectly enter into or become bound by any agreement, instrument, indenture or other obligation (other than this Agreement and the other Loan Documents) that could directly or indirectly restrict, prohibit or require the consent of any Person with respect to the payment of dividends or distributions or the making or repayment of intercompany loans by a Subsidiary of the Borrowers to the Borrowers.
6.17 Indebtedness. No Loan Party will create, incur or suffer to exist any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness existing on the date hereof and described in Schedule 5.22;
(c) purchase money Indebtedness incurred in connection with the purchase of any Equipment; provided that, the amount of such purchase money Indebtedness shall be limited to an amount not in excess of the purchase price of such Equipment and the aggregate of all such purchase money Indebtedness incurred in any Fiscal Year shall not exceed $3,000,000;
(d) Indebtedness which represents an extension, refinancing, or renewal of any of the Indebtedness described in clauses (b) and (c) and (g) hereof; provided that, (i) the principal amount or interest rate of such Indebtedness is not increased, (ii) any Liens securing such Indebtedness are not extended to any additional Property of any Loan Party, (iii) no Loan Party that is not originally
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obligated with respect to repayment of such Indebtedness is required to become obligated with respect thereto, (iv) such extension, refinancing or renewal does not result in a shortening of the average weighted maturity of the Indebtedness so extended, refinanced, renewed, (v) the terms of any such extension, refinancing, or renewal are not less favorable to the obligor thereunder than the original terms of such Indebtedness and (iv) if the Indebtedness that is refinanced, renewed, or extended was subordinated in right of payment to the Obligations, then the terms and conditions of the refinancing, renewal, or extension Indebtedness must include subordination terms and conditions that are at least as favorable to the Agent and the Lenders as those that were applicable to the refinanced, renewed, or extended Indebtedness;
(e) Indebtedness owing by any Loan Party to any other Loan Party with respect to intercompany loans, provided further, that:
(i) the applicable Loan Parties shall have executed and delivered to the other Loan Party, on the Effective Date, a demand note (collectively, the “Intercompany Notes”) to evidence any such intercompany Indebtedness owing at any time by any Loan Party to another Loan Party, which Intercompany Notes shall be in form and substance reasonably satisfactory to the Agent and shall be pledged and delivered to the Agent pursuant to the Security Agreement as additional collateral security for the Secured Obligations;
(ii) the Loan Parties shall record all intercompany transactions on their books and records in a manner reasonably satisfactory to the Agent;
(iii) the obligations of the Loan Parties under any such Intercompany Notes shall be subordinated to the Obligations of the Loan Parties hereunder in a manner reasonably satisfactory to the Agent;
(iv) at the time any such intercompany loan or advance is made by a Loan Party and after giving effect thereto, such Loan Party shall be Solvent;
(v) no Default or Unmatured Default would occur and be continuing after giving effect to any such proposed intercompany loan;
(f) Contingent Obligations (i) by endorsement of instruments for deposit or collection in the ordinary course of business, (ii) consisting of the Reimbursements Obligations and (iii) consisting of the Guaranty and guarantees of Indebtedness incurred for the benefit of any other Loan Party if the primary obligation is expressly permitted elsewhere in this Section 6.17;
(g) Capitalized Lease Obligations which in the aggregate do not exceed $7,500,000 in any Fiscal Year;
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(h) Indebtedness arising under Rate Management Transactions;
(i) Indebtedness assumed in connection with any Permitted Acquisition; provided that, the aggregate amount of Indebtedness assumed under this clause (i) shall not exceed $7,500,000 and provided further that, such Indebtedness is not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and does not attach to any asset of any Borrower or any of its Subsidiaries;
(j) other unsecured Indebtedness in an amount not in excess of $5,000,000 in the aggregate outstanding at any time; and
(k) Indebtedness evidenced by the Convertible Notes.
(a) sales of Inventory in the ordinary course of business;
(b) the sale or other disposition of Equipment that is obsolete or no longer useful in such Loan Party’s business; and
(c) the sale or disposition of other assets having a book value not exceeding $5,000,000 in the aggregate in any Fiscal Year.
The Net Cash Proceeds of any sale or disposition permitted pursuant to this Section (other than pursuant to Section 6.20(a)) shall be delivered to the Agent as required by Section 2.15 and applied to the Obligations as set forth therein.
(a) Cash Equivalent Investments, subject to control agreements in favor of the Agent for the benefit of the Lenders or otherwise subject to a perfected security interest in favor of the Agent for the benefit of the Lenders;
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(b) Investments in Subsidiaries existing as of the Closing Date;
(c) other Investments in existence on the Closing Date and described in Schedule 6.21;
(d) Investments consisting of loans or advances made to employees of such Loan Party on an arms-length basis in the ordinary course of business consistent with past practices for travel and entertainment expenses, relocation costs and similar purposes up to a maximum of $500,000 to any employee and up to a maximum of $2,000,000 in the aggregate at any one time outstanding;
(e) subject to Sections 4.2(a) and 4.4 of the Security Agreement, Investments comprised of notes payable, or stock or other securities issued by Account Debtors to such Loan Party pursuant to negotiated agreements with respect to settlement of such Account Debtor’s Accounts in the ordinary course of business, consistent with past practices;
(f) additional Investments in Wholly-Owned Subsidiaries which are Loan Parties;
(g) Permitted Acquisitions and the formation of Wholly-Owned Subsidiaries of the Borrowers in connection with a Permitted Acquisition;
(h) Investments in Subsidiaries that are not Loan Parties not to exceed $500,000 in the aggregate during the term of this Agreement; and
(i) other Investments not to exceed $5,000,000 in the aggregate during the term of this Agreement.
(a) No Loan Party will create, incur, or suffer to exist any Lien in, of, or on the Property of such Loan Party, except the following (collectively, “Permitted Liens”):
(i) Liens for taxes, fees, assessments, or other governmental charges or levies on the Property of such Loan Party if such Liens (1) shall not at the time be delinquent or (2) subject to the provisions of Section 6.6, do not secure obligations in excess of $1,000,000, are being contested in good faith and by appropriate proceedings diligently pursued, adequate reserves in accordance with GAAP have been set aside on the books of such Loan Party, and a stay of enforcement of such Lien is in effect;
(ii) Liens imposed by law, such as carrier’s, warehousemen’s, and mechanic’s Liens and other similar Liens arising in the ordinary course of business which secure payment of obligations not more than ten days past due;
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(iii) statutory Liens in favor of landlords of real Property leased by such Loan Party; provided that, such Loan Party is current with respect to payment of all rent and other amounts due to such landlord under any lease of such real Property;
(iv) Liens arising out of pledges or deposits under worker’s compensation laws, unemployment insurance, old age pensions, or other social security or retirement benefits, or similar legislation or to secure the performance of bids, tenders, or contracts (other than for the repayment of Indebtedness) or to secure indemnity, performance, or other similar bonds for the performance of bids, tenders, or contracts (other than for the repayment of Indebtedness) or to secure statutory obligations (other than liens arising under ERISA or Environmental Laws) or surety or appeal bonds, or to secure indemnity, performance, or other similar bonds;
(v) utility easements, building restrictions, and such other encumbrances or charges against real Property as are of a nature generally existing with respect to properties of a similar character and which do not in any material way affect the marketability of such real Property or interfere with the use thereof in the business of such Loan Party;
(vi) Liens existing on the Closing Date and described in Schedule 6.22;
(vii) Liens resulting from any extension, refinancing, or renewal of the related Indebtedness as permitted pursuant to Section 6.17(d); provided that, the Liens evidenced thereby are not increased to cover any additional Property not originally covered thereby;
(viii) Liens securing purchase money Indebtedness of such Loan Party permitted pursuant to Section 6.17(c); provided that, such Liens attach only to the Property which was purchased with the proceeds of such purchase money Indebtedness;
(ix) Liens on property or assets (other than Accounts and Inventory) acquired pursuant to a Permitted Acquisition, or on property or assets (other than Accounts and Inventory) of a Loan Party in existence at the time such Loan Party is acquired pursuant to a Permitted Acquisition, provided that (1) any Indebtedness that is secured by such Liens is permitted under Section 6.17, and (2) such Liens are not incurred in connection with, or in contemplation or anticipation of, such Permitted Acquisition and do not attach to any asset of any other Loan Party; and
(x) Liens in favor of the Agent granted pursuant to any Loan Document.
(b) Notwithstanding the foregoing, none of the Liens permitted pursuant to this Section 6.22, other than (1) clauses (i) and (x) above, may at any
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time attach to any Accounts of any Loan Party and (2) clauses (i) through (iii) and (x) above, may at any time attach to any Inventory of any Loan Party.
(c) Other than as provided in the Loan Documents or in connection with the creation or incurrence of any Indebtedness under Section 6.17(c), no Loan Party will enter into or become subject to any negative pledge or other restriction on the right of such Loan Party to grant Liens to the Agent and the Lenders on any of its Property; provided that, any such negative pledge or other restriction entered into in connection with the creation of Indebtedness under Section 6.17(c) shall be limited to the Property securing such purchase money Indebtedness.
6.26 Prepayment of Indebtedness; Subordinated Indebtedness.
(a) No Loan Party shall, directly or indirectly, voluntarily purchase, redeem, defease or prepay any principal of, premium, if any, interest or other amount payable in respect of any Indebtedness prior to its scheduled maturity, other than (i) the Obligations; (ii) Indebtedness secured by a Permitted Lien if the asset securing such Indebtedness has been sold or otherwise disposed of in
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accordance with Section 6.20; (iii) Indebtedness permitted by Section 6.17(d) upon any refinancing thereof in accordance therewith; (iv) Indebtedness permitted by Section 6.17(e); and (v) Indebtedness permitted by Section 6.17(k).
(b) No Loan Party shall make any amendment or modification to the indenture, note or other agreement evidencing or governing any Subordinated Indebtedness, or directly or indirectly voluntarily prepay, defease or in substance defease, purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness other than with respect to the Convertible Note Repurchase.
(b) At all times after the Term B Loan has been paid in full, the Borrowers will not permit the Fixed Charge Coverage Ratio, determined as of the end of each of the Company’s Fiscal Quarter for the then most-recently ended four Fiscal Quarters, to be less than 1.0 to 1.0; provided that (i) for the Fiscal Quarter ending June 30, 2004, the Fixed Charge Coverage Ratio shall be calculated using the most-recently ended Fiscal Quarter, (ii) for the Fiscal Quarter ending September 30, 2004, the Fixed Charge Coverage Ratio shall be calculated using the most-recently ended two Fiscal Quarters and (iii) for the Fiscal Quarter ending December 31, 2004, the Fixed Charge Coverage Ratio shall be calculated using the most-recently ended three Fiscal Quarters.
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6.32 Convertible Note Repurchase.
On or before the 60th day after the Closing Date, the Company shall have completed the Convertible Note Repurchase in a manner reasonably satisfactory to Agent and Lenders.
6.33 Additional Legal Opinions.
On or before the 10th day after the Closing Date, the Agent shall have received a duly executed copy of the legal opinion of Xxxxxxxxx Xxxxxxx LLP opining as to Texas law with respect to enforceability, lien creation, lien perfection and choice of law in connection with the transactions contemplated by this Agreement and the other Loan Documents, in form and substance reasonably satisfactory to the Agent.
ARTICLE VII
The occurrence of any one or more of the following events shall constitute a “Default” hereunder:
(a) any representation or warranty made or deemed made by or on behalf of any Loan Party to any Lender or the Agent under or in connection with this Agreement, any other Loan Document, any Credit Extension, or any certificate or information delivered in connection with any of the foregoing shall be materially false on the date as of which made;
(b) (i) nonpayment, when due (whether upon demand or otherwise), of any principal, or (ii) nonpayment, within three (3) days after the due date (whether upon demand or otherwise), of any interest, fee, Reimbursement Obligation or any other obligation owing under any of the Loan Document;
(c) the breach by any Loan Party of any of the terms or provisions of Section 6.2, 6.3(a), 6.16 through 6.23 or 6.25 through 6.31 which is not remedied within three (3) days after the earlier of such breach or written notice from the Agent or any Lender;
(d) the breach by any Loan Party (other than a breach which constitutes a Default under another Section of this Article VII) of any of the terms
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or provisions of (i) Section 6.1, 6.3 (other than Section 6.3(a)), 6.4 through 6.15 or 6.24 of this Agreement which is not remedied within fifteen (15) days after the earlier of such breach or written notice from the Agent or any Lender or (ii) any other Section of this Agreement which is not remedied within fifteen (15) days after the earlier of such breach or written notice from the Agent or any Lender;
(e) failure of any Loan Party to pay when due any Material Indebtedness or a default, breach or other event occurs under any term, provision or condition contained in any Material Indebtedness Agreement of any Loan Party, the effect of which default, event or condition is to cause, or to permit the holder(s) of such Material Indebtedness or the lender(s) under any Material Indebtedness Agreement to cause, such Material Indebtedness to become due prior to its stated maturity or any commitment to lend under any Material Indebtedness Agreement to be terminated prior to its stated expiration date; any Material Indebtedness of any Loan Party shall be declared to be due and payable or required to be prepaid or repurchased (other than by a regularly scheduled payment) prior to the stated maturity thereof; or any Loan Party shall not pay, or admit in writing its inability to pay, its debts generally as they become due;
(f) any Loan Party shall (i) have an order for relief entered with respect to it under the Bankruptcy Code as now or hereafter in effect, (ii) make an assignment for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any portion of its Property which constitutes a Substantial Portion, (iv) institute any proceeding seeking an order for relief under the Bankruptcy Code as now or hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (v) take any corporate or partnership action to authorize or effect any of the foregoing actions set forth in this subsection (f) or (vi) fail to contest in good faith any appointment or proceeding described in subsection (g) below;
(g) a receiver, trustee, examiner, liquidator or similar official shall be appointed for any Loan Party or any portion of its Property which constitutes a Substantial Portion, or a proceeding described in subsection (f)(iv) of Article VII shall be instituted against any Loan Party and such appointment continues undischarged or such proceeding continues undismissed or unstayed for a period of sixty consecutive days;
(h) any court, government or governmental agency shall condemn, seize or otherwise appropriate, or take custody or control of, all or any portion of the Property of any Loan Party which, when taken together with all other Property of any Loan Party so condemned, seized, appropriated, or taken custody or
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control of, during the twelve-month period ending with the month in which any such action occurs, constitutes a Substantial Portion;
(i) any loss, theft, damage or destruction of any item or items of Collateral or other property of any Loan Party occurs which could reasonably be expected to cause a Material Adverse Effect and is not adequately covered by insurance;
(j) any Loan Party shall fail within thirty days to pay, bond or otherwise discharge one or more (i) judgments or orders for the payment of money in excess of $1,000,000 (or the equivalent thereof in currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary judgments or orders which, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect, which judgments or orders, in any such case, are not stayed on appeal or otherwise being appropriately contested in good faith by proper proceedings diligently pursued;
(k) any Change in Control shall occur;
(l) the Unfunded Liabilities of all Single Employer Plans shall exceed in the aggregate $1,000,000 or any Reportable Event shall occur in connection with any Plan;
(m) any Borrower or any other member of the Controlled Group shall have been notified by the sponsor of a Multiemployer Plan that it has incurred withdrawal liability to such Multiemployer Plan in an amount which, when aggregated with all other amounts required to be paid to Multiemployer Plans by such Borrower or any other member of the Controlled Group as withdrawal liability (determined as of the date of such notification), exceeds $1,000,000 or requires payments exceeding $1,000,000 per annum;
(n) a Borrower or any other member of the Controlled Group shall have been notified by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in reorganization or is being terminated, within the meaning of Title IV of ERISA, if as a result of such reorganization or termination the aggregate annual contributions of such Borrower and the other members of the Controlled Group (taken as a whole) to all Multiemployer Plans which are then in reorganization or being terminated have been or will be increased over the amounts contributed to such Multiemployer Plans for the respective plan years of each such Multiemployer Plan immediately preceding the plan year in which the reorganization or termination occurs by an amount exceeding $1,000,000;
(o) any Loan Party shall (i) be the subject of any proceeding or investigation pertaining to the release by the any Loan Party or any other Person of any toxic or hazardous waste or substance into the environment, or (ii) violate any Environmental Law, which, in the case of an event described in clause (i) or clause (ii), could reasonably be expected to have a Material Adverse Effect;
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(p) the occurrence of any “default,” as defined in any Loan Document (other than this Agreement) or the breach of any of the terms or provisions of any Loan Document (other than this Agreement), which default or breach continues beyond any period of grace therein provided;
(q) the Guaranty shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of the Guaranty, or any Guarantor shall fail to comply with any of the terms or provisions of the Guaranty to which it is a party, or any Guarantor shall deny that it has any further liability under the Guaranty to which it is a party, or shall give notice to such effect;
(r) any Collateral Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, except as permitted by the terms of any Collateral Document, or any Collateral Document shall fail to remain in full force or effect or any action shall be taken to discontinue or to assert the invalidity or unenforceability of any Collateral Document, or any Loan Party shall fail to comply with any of the terms or provisions of any Collateral Document;
(s) any material provision of any Loan Document for any reason ceases to be valid, binding and enforceable in accordance with its terms (or any Loan Party shall challenge the enforceability of any Loan Document or shall assert in writing, or engage in any action or inaction based on any such assertion, that any provision of any of the Loan Documents has ceased to be or otherwise is not valid, binding and enforceable in accordance with its terms);
(t) the representations and warranties set forth in Section 5.17 (Plan Assets; Prohibited Transactions) shall at any time not be true and correct;
(u) any Borrower or any of their Subsidiaries shall fail to pay when due any Operating Lease Obligation in excess of $1,000,000;
(v) nonpayment by any Borrower or any of its Subsidiaries of any Rate Management Obligation when due or the breach by any Borrower or any of its Subsidiaries of any term, provision or condition contained in any Rate Management Transaction or any transaction of the type described in the definition of “Rate Management Transactions,” whether or not any Lender or Affiliate of a Lender is a party thereto;
(w) any default, termination or non-renewal of licenses of the Borrowers which in the aggregate accounted for thirty percent (30%) or more of the revenues of the Borrowers, on a consolidated basis, in the previous Fiscal Year; or
(x) any Loan Party is criminally indicted or convicted under any law that may reasonably be expected to lead to a forfeiture of any Property of such Loan Party having a fair market value in excess of $1,000,000.
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ARTICLE VIII
REMEDIES; WAIVERS AND AMENDMENTS
(a) If any Default occurs and is continuing, the Agent may in its discretion (and at the written request of the Required Lenders, shall) (i) reduce the Aggregate Commitment or the Revolving Commitment, (ii) terminate or suspend the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs, (iii) declare all or any portion of the Obligations to be due and payable, whereupon such Obligations shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which the Borrower hereby expressly waives, (iv) upon notice to the Borrower Representative and in addition to the continuing right to demand payment of all amounts payable under this Agreement, the Agent may either (1) make demand on the Borrowers to pay, and the Borrowers will, forthwith upon such demand and without any further notice or act, pay to the Agent an amount, in immediately available funds (which funds shall be held in the Facility LC Collateral Account), equal to 105% of the Collateral Shortfall Amount or (2) deliver a Supporting Letter of Credit as required by Section 2.1.2(l), whichever the Agent may specify in its sole discretion, (v) increase the rate of interest applicable to the Loans and the LC Fees as set forth in this Agreement and (vi) exercise any rights and remedies provided to the Agent under the Loan Documents or at law or equity, including all remedies provided under the UCC.
(b) If any Default described in subsections (f) or (g) of Article VII occurs with respect to any Loan Party, the obligations of the Lenders to make Loans hereunder and the obligation and power of the LC Issuer to issue Facility LCs shall automatically terminate and all Obligations shall immediately become due and payable without any election or action on the part of the Agent, the LC Issuer or any Lender and the Loan Parties will be and become thereby unconditionally obligated, without any further notice, act or demand, to pay to the Agent an amount equal to 105% of the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account.
(c) If, within thirty days after acceleration of the maturity of the Obligations or termination of the obligations of the Lenders to make Loans and the obligation and power of the LC Issuer to issue Facility LCs hereunder as a result of any Default (other than any Default as described in subsections (f) or (g) of Article VII with respect to any Borrower) and before any judgment or decree for the payment of the Obligations due shall have been obtained or entered, the Required Lenders (in their sole discretion) shall so direct, the Agent shall, by notice to the Borrower Representative, rescind and annul such acceleration and/or termination.
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(d) If at any time while any Default is continuing, the Agent determines that the Collateral Shortfall Amount at such time is greater than zero, the Agent may make demand on the Borrowers (upon notice to the Borrower Representative) to pay, and the Borrowers will, forthwith upon such demand and without any further notice or act, pay to the Agent an amount equal to 105% of the Collateral Shortfall Amount, which funds shall be deposited in the Facility LC Collateral Account. The Borrowers hereby pledge, assign, and grant to the Agent, on behalf of and for the benefit of the Agent, the Lenders, and the LC Issuer, a security interest in all of the Borrowers’ right, title, and interest in and to all funds which may from time to time be on deposit in the Facility LC Collateral Account to secure the prompt and complete payment and performance of the Obligations.
(e) The Agent may at any time or from time to time after funds are deposited in the Facility LC Collateral Account, apply such funds to the payment of the Obligations and any other amounts as shall from time to time have become due and payable by the Borrowers to the Lenders or the LC Issuer under the Loan Documents.
(f) At any time while any Default is continuing, neither the Borrowers nor any Person claiming on behalf of or through the Borrowers shall have any right to withdraw any of the funds held in the Facility LC Collateral Account. After all of the Secured Obligations have been indefeasibly paid in full and the Aggregate Commitment has been terminated, any funds remaining in the Facility LC Collateral Account shall be returned by the Agent to the Borrowers or paid to whomever may be legally entitled thereto at such time.
(a) Subject to the provisions of this Section 8.3, no amendment, waiver or modification of any provision of this Agreement or any other Loan Document, and no consent with respect to any departure by any Loan Party therefrom, shall be effective unless the same shall be in writing and signed by the Required Lenders (or the Agent with the consent in writing of the Required Lenders) and the Loan Parties and then any such waiver or consent shall be
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effective only in the specific instance and for the specific purpose for which given.
(b) Notwithstanding subsection (a) above, no such amendment, waiver or other modification with respect to this Agreement shall, without the consent of all of the Lenders:
(i) extend the final maturity of any (A) Revolving Loan to a date after the Revolver Termination Date, (B) Term A Loan to a date after the Facility Termination Date, (C) Term B Loan to a date after the Term B Termination Date and/or (D) Loan to a date after the Facility Termination Date;
(ii) postpone any regularly scheduled payment of principal of any Loan or reduce or forgive all or any portion of the principal amount of any Loan or any Reimbursement Obligation or reduce the amount or extend the payment date for, the mandatory payments required under Article II;
(iii) reduce the rate or extend the time of payment of interest or fees payable to the Lenders pursuant to any Loan Document;
(iv) reduce the percentage or number of Lenders specified in the definition of Required Lenders;
(v) extend the Facility Termination Date;
(vi) increase the amount of the Aggregate Commitment or the Commitment of any Lender hereunder (other than in connection with a Revolving Credit Adjustment Event or pursuant to Section 12.3);
(vii) increase the advance rates set forth in the definition of Borrowing Base;
(viii) permit any Loan Party to assign its rights under this Agreement;
(ix) amend this Section 8.3;
(x) release any guarantor of any Credit Extension, except as otherwise permitted herein or in the other Loan Documents; or
(xi) except as provided in Section 10.16 or any Collateral Document, release all or substantially all of the Collateral.
(c) No amendment of any provision of this Agreement relating to the Agent or to the Non-Ratable Loans, the Overadvances or the Protective Advances shall be effective without the written consent of the Agent. No amendment of any
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provision relating to the LC Issuer shall be effective without the written consent of the LC Issuer. The Agent may (i) amend the Commitment Schedule to reflect assignments entered into pursuant to Section 12.3, and (ii) waive payment of the fee required under Section 12.3(c) and (iii) after consultation with the Borrower Representative, implement the rights set forth in paragraph 4 of the Fee Letter without obtaining the consent of any other party to this Agreement.
(d) If, in connection with any proposed amendment, waiver or consent (a “Proposed Change”) requiring the consent of all Lenders, the consent of the Required Lenders is obtained, but the consent of other Lenders is not obtained (any such Lender whose consent is not obtained being referred to herein as a “Non-Consenting Lender”), then, so long as the Agent is not a Non-Consenting Lender, the Borrowers may elect to replace such Non-Consenting Lender as a Lender party to this Agreement, provided that, concurrently with such replacement, (i) another bank or other entity which is reasonably satisfactory to the Borrowers and the Agent shall agree, as of such date, to purchase for cash the Advances and other Obligations due to the Non-Consenting Lender pursuant to an Assignment Agreement and to become a Lender for all purposes under this Agreement and to assume all obligations of the Non-Consenting Lender to be terminated as of such date and to comply with the requirements of Section 12.3 applicable to assignments, and (ii) the Borrowers shall pay to such Non-Consenting Lender in same day funds on the day of such replacement (1) all interest, fees and other amounts then accrued but unpaid to such Non-Consenting Lender by the Borrowers hereunder to and including the date of termination, including without limitation payments due to such Non-Consenting Lender under Sections 3.1, 3.2 and 3.5, and (2) an amount, if any, equal to the payment which would have been due to such Lender on the day of such replacement under Section 3.4 had the Loans of such Non-Consenting Lender been prepaid on such date rather than sold to the replacement Lender.
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ARTICLE IX
9.5 Several Obligations; Benefits of this Agreement. The respective obligations of the Lenders hereunder are several and not joint and no Lender shall be the partner or agent of any other lender (except to the extent to which the Agent is authorized to act as administrative agent for the Lenders hereunder). The failure of any Lender to perform any of its obligations hereunder shall not relieve any other Lender from any of its obligations hereunder. This Agreement shall not be construed so as to confer any right or benefit upon any Person other than the parties to this Agreement and their respective successors and assigns, provided, however, that the parties hereto expressly agree that the Arranger shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth therein and shall have the right to enforce such provisions on its own behalf and in its own name to the same extent as if it were a party to this Agreement.
9.6 Expenses; Indemnification.
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negotiation, execution, delivery, syndication, distribution (including, without limitation, via the internet or through a service such as Intralinks), review, amendment, modification, and administration of the Loan Documents. The Borrowers also agree to reimburse the Agent, the Arranger, the LC Issuer and the Lenders for any costs, internal charges and out of pocket expenses (including attorneys’ fees and time charges of attorneys for the Agent, the Arranger, the LC Issuer and the Lenders, which attorneys may be employees of the Agent, the Arranger, the LC Issuer or the Lenders) paid or incurred by the Agent, the Arranger, the LC Issuer or any Lender in connection with the collection and enforcement of the Loan Documents. Expenses being reimbursed by the Borrowers under this Section include, without limitation, costs and expenses incurred in connection with:
(i) appraisals of all or any portion of the Collateral, including each parcel of real Property or interest in real Property described in any Collateral Document, which appraisals shall be in conformity with the applicable requirements of any law or any governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any interpretation thereof, including, without limitation, the provisions of Title XI of the Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended, reformed or otherwise modified from time to time, and any rules promulgated to implement such provisions (including travel, lodging, meals and other out of pocket expenses);
(ii) field examinations and audits and the preparation of Reports at the Agent’s then customary charge (such charge is currently $850 per day (or portion thereof) for each Person retained or employed by the Agent with respect to each field examination or audit) plus travel, lodging, meals and other out of pocket expenses, provided, that Loan Parties’ reimbursement obligations with respect to field examinations shall apply to no more than three field examinations in any calendar year, unless a Default or Unmatured Default shall have occurred in the twelve (12) month period preceding such field examination;
(iii) any amendment, modification, supplement, consent, waiver or other documents prepared with respect to any Loan Document and the transactions contemplated thereby;
(iv) lien and title searches and title insurance;
(v) taxes, fees and other charges for recording the Mortgages, filing financing statements and continuations, and other actions to perfect, protect, and continue the Agent’s Liens (including costs and expenses paid or incurred by the Agent in connection with the consummation of the Agreement);
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(vi) sums paid or incurred to take any action required of any Loan Party under the Loan Documents that such Loan Party fails to pay or take;
(vii) any litigation, contest, dispute, proceeding or action (whether instituted by Agent, the LC Issuer, any Lender, any Loan Party or any other Person and whether as to party, witness or otherwise) in any way relating to the Collateral, the Loan Documents or the transactions contemplated thereby; and
(viii) costs and expenses of forwarding loan proceeds, collecting checks and other items of payment, and establishing and maintaining the Funding Account and lock boxes, and costs and expenses of preserving and protecting the Collateral.
The foregoing shall not be construed to limit any other provisions of the Loan Documents regarding costs and expenses to be paid by the Borrowers. All of the foregoing costs and expenses may be charged to the Borrower’s Loan Account as Revolving Loans or to another deposit account, all as described in Section 2.17(b).
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legal proceeding to which it is a party, (f) to its direct or indirect contractual counterparties in swap agreements or to legal counsel, accountants and other professional advisors to such counterparties, (g) permitted by Section 12.4, and (h) to rating agencies if requested or required by such agencies in connection with a rating relating to the Credit Extensions hereunder. Without limiting Section 9.4, the Borrowers agree that the terms of this Section 9.11 shall set forth the entire agreement between the Borrowers and each Lender (including the Agent) with respect to any confidential information previously or hereafter received by such Lender in connection with this Agreement, and this Section 9.11 shall supersede any and all prior confidentiality agreements entered into by such Lender with respect to such confidential information. Notwithstanding anything herein to the contrary, confidential information shall not include, and each party to any of the Loan Documents and their respective Affiliates (and the respective partners, directors, officers, employees, advisors, representatives and other agents of each of the foregoing and their Affiliates) may disclose to any and all Persons, without limitation of any kind, (i) any information with respect to the U.S. federal and state income tax treatment of the transactions contemplated hereby and any facts that may be relevant to understanding such tax treatment, which facts shall not include for this purpose the names of the parties or any other Person named herein, or information that would permit identification of the parties or such other Persons, or any pricing terms or other nonpublic business or financial information that is unrelated to such tax treatment or facts, and (ii) all materials of any kind (including opinions or other tax analyses) relating to such tax treatment or facts that are provided to any of the Persons referred to above, and it is hereby confirmed that each of the Persons referred to above has been authorized to make such disclosures since the commencement of discussions regarding the transactions contemplated hereby.
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ARTICLE X
10.1 Appointment; Nature of Relationship. Bank One, NA is hereby appointed by each of the Lenders as its contractual representative (herein referred to as the “Agent”) hereunder and under each other Loan Document, and each of the Lenders irrevocably authorizes the Agent to act as the contractual representative of such Lender with the rights and duties expressly set forth herein and in the other Loan Documents. The Agent agrees to act as such contractual representative upon the express conditions contained in this Article X. Notwithstanding the use of the defined term “Agent,” it is expressly understood and agreed that the Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement or any other Loan Document and that the Agent is merely acting as the contractual representative of the Lenders with only those duties as are expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders’ contractual representative, the Agent (a) does not hereby assume any fiduciary duties to any of the Lenders, (b) is a “representative” of the Lenders within the meaning of the term “secured party” as defined in the Texas Uniform Commercial Code and (c) is acting as an independent contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan Documents. Each of the Lenders hereby agrees to assert no claim against the Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims each Lender hereby waives.
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appealable judgment by a court of competent jurisdiction to have arisen from the gross negligence or willful misconduct of such Person.
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(a) The Lenders hereby irrevocably authorize the Agent, at its option and in its sole discretion, to release or subordinate (as applicable) any Liens granted to the Agent by the Loan Parties on any Collateral (i) upon the termination of the Aggregate Commitment, payment and satisfaction in full in cash of all Obligations (other than Unliquidated Secured Obligations), and the cash collateralization of all Unliquidated Secured Obligations in a manner satisfactory to each affected Lender, (ii) constituting Property being sold or disposed of if the Loan Party disposing of such Property certifies to the Agent that the sale or disposition is made in compliance with the terms of this Agreement (and the Agent may rely conclusively on any such certificate, without further inquiry), (iii) constituting Property in which no Loan Party has at any time during the term of this Agreement owned any interest, (iv) constituting property leased to a Loan Party under a lease which has expired or been terminated in a transaction permitted under this Agreement, (v) owned by or leased to an Loan Party which is subject to a purchase money security interest or which is the subject of a Capitalized Lease, in either case, entered into by such Loan Party pursuant to Section 6.17(c), or (vi) as required to effect any sale or other disposition of such Collateral in connection with any exercise of remedies of the Agent and the Lenders pursuant to Section 8.1. Upon request by the Agent at any time, the Lenders will confirm in writing the Agent’s authority to release any Liens upon particular types or items of Collateral pursuant to this Section 10.15. Except as provided in the preceding sentence, the Agent will not release any Liens on Collateral without the prior written authorization of the Required Lenders; provided that, the Agent may in its discretion, release its Liens on Collateral valued in the aggregate not in excess of $6,000,000 during any calendar year without the prior written authorization of the Lenders.
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(b) Upon receipt by the Agent of any authorization required pursuant to Section 10.15(a) from the Required Lenders of the Agent’s authority to release any Liens upon particular types or items of Collateral, and upon at least five Business Days prior written request by the Loan Parties, the Agent shall (and is hereby irrevocably authorized by the Lenders to) execute such documents as may be necessary to evidence the release of its Liens upon such Collateral; provided that, (i) the Agent shall not be required to execute any such document on terms which, in the Agent’s opinion, would expose the Agent to liability or create any obligation or entail any consequence other than the release of such Liens without recourse or warranty and (ii) such release shall not in any manner discharge, affect, or impair the Obligations or any Liens (other than those expressly being released) upon (or obligations of the Loan Parties in respect of) all interests retained by the Loan Parties, including the proceeds of any sale, all of which shall continue to constitute part of the Collateral.
(c) The Agent shall have no obligation whatsoever to any of the Lenders to assure that the Collateral exists or is owned by the Loan Parties or is cared for, protected, or insured or has been encumbered, or that the Liens granted to the Agent therein have been properly or sufficiently or lawfully created, perfected, protected, or enforced or are entitled to any particular priority, or to exercise at all or in any particular manner or under any duty of care, disclosure, or fidelity, or to continue exercising, any of the rights, authorities, and powers granted or available to the Agent pursuant to any of the Loan Documents, it being understood and agreed that in respect of the Collateral, or any act, omission, or event related thereto, the Agent may act in any manner it may deem appropriate, in its sole discretion given the Agent’s own interest in the Collateral in its capacity as one of the Lenders and that the Agent shall have no other duty or liability whatsoever to any Lender as to any of the foregoing.
(d) Each Lender hereby appoints each other Lender as its agent for the purpose of perfecting Liens, for the benefit of the Agent and the Lenders, in assets which, in accordance with Article 9 of the UCC or any other applicable law can be perfected only by possession. Should any Lender (other than the Agent) obtain possession of any such Collateral, such Lender shall notify the Agent thereof, and, promptly upon the Agent’s request therefor shall deliver such Collateral to the Agent or otherwise deal with such Collateral in accordance with the Agent’s instructions.
(e) Each Lender hereby agrees as follows: (a) such Lender is deemed to have requested that the Agent furnish such Lender, promptly after it becomes available, a copy of each Report prepared by or on behalf of the Agent; (b) such Lender expressly agrees and acknowledges that neither Bank One nor the Agent (i) makes any representation or warranty, express or implied, as to the completeness or accuracy of any Report or any of the information contained therein, or (ii) shall be liable for any information contained in any Report; (c) such Lender expressly agrees and acknowledges that the Reports are not comprehensive audits or examinations, that the Agent, Bank One, or any other
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party performing any audit or examination will inspect only specific information regarding the Loan Parties and will rely significantly upon the Loan Parties’ books and records, as well as on representations of the Loan Parties’ personnel and that Bank One undertakes no obligation to update, correct or supplement the Reports; (d) such Lender agrees to keep all Reports confidential and strictly for its internal use, not share the Report with any Loan Party and not to distribute any Report to any other Person except as otherwise permitted pursuant to this Agreement; and (e) without limiting the generality of any other indemnification provision contained in this Agreement, such Lender agrees (i) that neither Bank One nor the Agent shall be liable to such Lender or any other Person receiving a copy of the Report for any inaccuracy or omission contained in or relating to a Report, (ii) to conduct its own due diligence investigation and make credit decisions with respect to the Loan Parties based on such documents as such Lender deems appropriate without any reliance on the Reports or on the Agent or Bank One, (iii) to hold the Agent and any such other Person preparing a Report harmless from any action the indemnifying Lender may take or conclusion the indemnifying Lender may reach or draw from any Report in connection with any Credit Extensions that the indemnifying Lender has made or may make to the Loan Parties, or the indemnifying Lender’s participation in, or the indemnifying Lender’s purchase of, any Obligations and (iv) to pay and protect, and indemnify, defend, and hold the Agent and any such other Person preparing a Report harmless from and against, the claims, actions, proceedings, damages, costs, expenses, and other amounts (including reasonable attorney fees) incurred by the Agent and any such other Person preparing a Report as the direct or indirect result of any third parties who might obtain all or part of any Report through the indemnifying Lender.
10.16 Co-Agents, Documentation Agent, Syndication Agent, etc. Neither any of the Lenders identified in this Agreement as a “co-agent” nor the Documentation Agent or the Syndication Agent shall have any right, power, obligation, liability, responsibility or duty under this Agreement other than those applicable to all Lenders as such. Without limiting the foregoing, none of such Lenders shall have or be deemed to have a fiduciary relationship with any Lender. Each Lender hereby makes the same acknowledgments with respect to such Lenders as it makes with respect to the Agent in Section 10.11.
ARTICLE XI
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12.3 Assignments.
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(a) Permitted Assignments. Any Lender may at any time assign to one or more banks or other entities (“Purchasers”) all or any part of its rights and obligations under the Loan Documents. Such assignment shall be substantially in the form of Exhibit G (an “Assignment Agreement”). Each such assignment with respect to a Purchaser which is not a Lender or an Affiliate of a Lender or an Approved Fund shall either be in an amount equal to the entire applicable Commitment and Credit Extensions of the assigning Lender or (unless each of the Borrower Representative and the Agent otherwise consents) be in an aggregate amount not less than $5,000,000 in the case of any assignment of a Revolving Commitment and $1,000,000 in the case of any assignment of a Term Loan or Term Loan Commitment. The amount of the assignment shall be based on the Commitment or outstanding Credit Extensions (if the Commitment has been terminated) subject to the assignment, determined as of the date of such assignment or as of the “Trade Date,” if the “Trade Date” is specified in the assignment.
(b) Consents. The consent of the Borrower Representative shall be required prior to an assignment becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or an Approved Fund, provided that, the consent of the Borrower Representative shall not be required if a Default has occurred and is continuing. The consent of the Agent shall be required prior to an assignment becoming effective unless the Purchaser is a Lender with a Revolving Commitment (in the case of an assignment of a Revolving Commitment) or is a Lender, an Affiliate of a Lender or an Approved Fund (in the case of an assignment of any other Commitment or Loans). The consent of the LC Issuer shall be required prior to an assignment of a Revolving Commitment becoming effective unless the Purchaser is a Lender with a Revolving Commitment. Any consent required under this Section 12.3(b) shall not be unreasonably withheld or delayed.
(c) Effect; Effective Date. Upon (i) delivery to the Agent of a duly executed Assignment Agreement, together with any consents required by Sections 12.3(a) and 12.3(b), and (ii) payment of a $3,500 fee to the Agent for processing such assignment (unless such fee is waived by the Agent), such Assignment Agreement shall become effective on the effective date specified by the Agent in such Assignment Agreement. The Assignment Agreement shall contain a representation by the Purchaser to the effect that none of the consideration used to make the purchase of the Commitment and Credit Exposure under the applicable Assignment Agreement constitutes “plan assets” as defined under ERISA and that the rights and interests of the Purchaser in and under the Loan Documents will not be “plan assets” under ERISA. On and after the effective date of such Assignment Agreement, such Purchaser shall for all purposes be a Lender party to this Agreement and any other Loan Document executed by or on behalf of the Lenders and shall have all the rights and obligations of a Lender under the Loan Documents, to the same extent as if it were an original party thereto, and the transferor Lender shall be released with respect to the Commitment and Credit Exposure assigned to such Purchaser (but not any other liabilities accrued prior to
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such assignment, unless assumed by such Purchaser) without any further consent or action by the Borrowers, the Lenders or the Agent. In the case of an Assignment Agreement covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a Lender hereunder but shall continue to be entitled to the benefits of, and subject to, those provisions of this Agreement and the other Loan Documents which survive payment of the Obligations and termination of the applicable agreement. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this Section 12.3 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with Section 12.2. Upon the consummation of any assignment to a Purchaser pursuant to this Section 12.3(c), the transferor Lender, the Agent and the Borrowers shall, if the transferor Lender or the Purchaser desires that its Loans be evidenced by Notes, make appropriate arrangements so that new Notes or, as appropriate, replacement Notes are issued to such transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in each case in principal amounts reflecting their respective Commitments, as adjusted pursuant to such assignment.
(d) Register. The Agent, acting solely for this purpose as an agent of the Borrowers, shall maintain at one of its offices in the U.S. a copy of each Assignment Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts of the Credit Extensions owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrowers, the Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
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Lenders, resign as LC Issuer. In the event of any such resignation as LC Issuer, the Borrower Representative shall be entitled to appoint from among the Lenders a successor LC Issuer hereunder; provided however, that no failure by the Borrower Representative to appoint any such successor shall affect the resignation of Bank One as LC Issuer. If Bank One resigns as LC Issuer, it shall retain all the rights and obligations of the LC Issuer hereunder with respect to the Facility LCs outstanding as of the effective date of its resignation as LC Issuer and all LC Obligations with respect thereto (including the right to require the Lenders to make Revolving Loans or fund risk participations in outstanding Reimbursement Obligations pursuant to Section 2.1.2(d)).
ARTICLE XIII
13.1 Notices; Effectiveness; Electronic Communications.
(i) if to any Loan Party, at its address or telecopier number set forth on the signature page hereof;
(ii) if to the Agent, at its address or telecopier number set forth on the signature page hereof;
(iii) if to the LC Issuer, at its address or telecopier number set forth on the signature page hereof;
(iv) if to a Lender, to it at its address or telecopier number set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).
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notified the Agent that it is incapable of receiving notices under such Article by electronic communication. The Agent or any Loan Party may, in its respective discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it or as it otherwise determines, provided that such determination or approval may be limited to particular notices or communications. Notwithstanding the foregoing, in every instance, the Borrower Representative shall be required to provide paper copies of the Compliance Certificates required by Section 6.1(e) to the Agent.
Unless the Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), provided that if such notice or other communication is not given during the normal business hours of the recipient, such notice or communication shall be deemed to have been given at the opening of business on the next Business Day for the recipient, and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor.
ARTICLE XIV
This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. This Agreement shall be effective when it has been executed by the Loan Parties, the Agent, the LC Issuer and the Lenders and each party has notified the Agent by facsimile transmission or telephone that it has taken such action.
ARTICLE XV
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action against, any Borrower, any Guarantor or any other guarantor of all or any part of the Secured Obligations (such costs and expenses, together with the Secured Obligations, collectively the “Guaranteed Obligations”). Each Guarantor further agrees that the Guaranteed Obligations may be extended or renewed in whole or in part without notice to or further assent from it, and that it remains bound upon its guarantee notwithstanding any such extension or renewal.
15.3 No Discharge or Diminishment of Guaranty.
(a) Except as otherwise provided for herein and to the extent provided for herein, the obligations of each Guarantor hereunder are unconditional and absolute and not subject to any reduction, limitation, impairment or termination for any reason (other than the indefeasible payment in full in cash of the Guaranteed Obligations), including:
(i) any claim of waiver, release, extension, renewal, settlement, surrender, alteration, or compromise of any of the Guaranteed Obligations, by operation of law or otherwise;
(ii) any change in the corporate existence, structure or ownership of any Borrower or any other guarantor of or other person liable for any of the Guaranteed Obligations;
(iii) any insolvency, bankruptcy, reorganization or other similar proceeding affecting any Borrower, any Guarantor, or any other guarantor of or other person liable for any of the Guaranteed Obligations, or their assets or any resulting release or discharge of any obligation of any Borrower, any Guarantor, or any other guarantor of or other person liable for any of the Guaranteed Obligations; or
(iv) the existence of any claim, setoff or other rights which any Guarantor may have at any time against any Borrower, any Guarantor, any other guarantor of the Guaranteed Obligations, the Agent, the LC Issuer, any Lender, or any other person, whether in connection herewith or in any unrelated transactions.
(b) The obligations of each Guarantor hereunder are not subject to any defense or setoff, counterclaim, recoupment, or termination whatsoever by reason of the invalidity, illegality, or unenforceability of any of the Guaranteed Obligations or otherwise, or any provision of applicable law or regulation purporting to prohibit payment by any Borrower, any Guarantor or any other
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guarantor of or other person liable for any of the Guaranteed Obligations, of the Guaranteed Obligations or any part thereof.
(c) Further, the obligations of any Guarantor hereunder are not discharged or impaired or otherwise affected by:
(i) the failure of the Agent, the LC Issuer or any Lender to assert any claim or demand or to enforce any remedy with respect to all or any part of the Guaranteed Obligations;
(ii) any waiver or modification of or supplement to any provision of any agreement relating to the Guaranteed Obligations;
(iii) any release, non-perfection, or invalidity of any indirect or direct security for the obligations of any Borrower for all or any part of the Guaranteed Obligations or any obligations of any other guarantor of or other person liable for any of the Guaranteed Obligations;
(iv) any action or failure to act by the Agent, the LC Issuer or any Lender with respect to any collateral securing any part of the Guaranteed Obligations;
(v) any default, failure or delay, willful or otherwise, in the payment or performance of any of the Guaranteed Obligations, or any other circumstance, act, omission or delay that might in any manner or to any extent vary the risk of such Guarantor or that would otherwise operate as a discharge of any Guarantor as a matter of law or equity (other than the indefeasible payment in full in cash of the Guaranteed Obligations).
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and indefeasibly paid in cash. To the fullest extent permitted by applicable law, each Guarantor waives any defense arising out of any such election even though that election may operate, pursuant to applicable law, to impair or extinguish any right of reimbursement or subrogation or other right or remedy of any Guarantor against any Borrower, any other guarantor or any other person liable on any of the Guaranteed Obligations, as the case may be, or any security.
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deductions applicable to additional sums payable under this provision) the Lenders receive an amount equal to the sum it would have received had no such deductions been made, (b) the Guarantors must then make such deductions, and must pay the full amount deducted to the relevant authority in accordance with applicable law, and (c) the Guarantors must furnish to the Lender within forty-five days after their due date certified copies of all official receipts evidencing payment thereof.
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receive any contribution under this Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of payment to the payment in full in cash of the Guaranteed Obligations. This provision is for the benefit of both the Agent, the LC Issuer, the Lenders and the Guarantors and may be enforced by any one, or more, or all of them in accordance with the terms hereof.
ARTICLE XVI
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
16.1 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
16.2 CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR TEXAS STATE COURT SITTING IN DALLAS, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND EACH LOAN PARTY HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY ANY LOAN PARTY AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTION WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DALLAS, TEXAS.
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ARTICLE XVII
THE BORROWER REPRESENTATIVE
17.1 Appointment; Nature of Relationship. APC is hereby appointed by each of the Borrowers as its contractual representative (herein referred to as the “Borrower Representative”) hereunder and under each other Loan Document, and each of the Borrowers irrevocably authorizes the Borrower Representative to act as the contractual representative of such Borrower with the rights and duties expressly set forth herein and in the other Loan Documents. The Borrower Representative agrees to act as such contractual representative upon the express conditions contained in this Article XVII. Additionally, the Borrowers hereby appoint the Borrower Representative as their agent to receive all of the proceeds of the Loans in the Funding Account. The Agent and the Lenders, and their respective officers, directors, agents or employees, shall not be liable to the Borrower Representative or any Borrower for any action taken or omitted to be taken by the Borrower Representative or the Borrowers pursuant to this Section 17.1.
17.2 Powers. The Borrower Representative shall have and may exercise such powers under the Loan Documents as are specifically delegated to the Borrower Representative by the terms of each thereof, together with such powers as are reasonably incidental thereto. The Borrower Representative shall have no implied duties to the Borrowers, or any obligation to the Lenders to take any action thereunder except any action specifically provided by the Loan Documents to be taken by the Borrower Representative.
17.3 Employment of Agents. The Borrower Representative may execute any of its duties as the Borrower Representative hereunder and under any other Loan Document by or through Authorized Persons.
17.4 Notices. Each Borrower shall promptly notify the Borrower Representative of the occurrence of any Default or Unmatured Default hereunder referring to this Agreement describing such Default or Unmatured Default and stating that such notice is a “notice of default.” In the event that the Borrower Representative receives such a notice, the Borrower Representative shall give prompt notice thereof to the Agent and the Lenders. Any notice provided to the Borrower Representative hereunder shall constitute notice to each Borrower on the date received by the Borrower Representative.
17.5 Successor Borrower Representative. Upon the prior written consent of the Agent, the Borrower Representative may resign at any time, such resignation to be effective upon the
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appointment of a successor Borrower Representative. The Agent shall give prompt written notice of such resignation to the Lenders.
17.6 Execution of Loan Documents; Aggregate Borrowing Base Certificate. The Borrowers hereby empower and authorize the Borrower Representative, on behalf of the Borrowers, to execute and deliver to the Agent and the Lenders the Loan Documents and all related agreements, certificates, documents, or instruments as shall be necessary or appropriate to effect the purposes of the Loan Documents, including without limitation, the Aggregate Borrowing Base Certificates and the Compliance Certificates. Each Borrower agrees that any action taken by the Borrower Representative or the Borrowers in accordance with the terms of this Agreement or the other Loan Documents, and the exercise by the Borrower Representative of its powers set forth therein or herein, together with such other powers that are reasonably incidental thereto, shall be binding upon all of the Borrowers.
17.7 Reporting. Each Borrower hereby agrees that such Borrower shall furnish promptly after each Fiscal Month to the Borrower Representative a copy of its Borrowing Base Certificate and any other certificate or report required hereunder or requested by the Borrower Representative on which the Borrower Representative shall rely to prepare the Aggregate Borrowing Base Certificates and Compliance Certificates required pursuant to the provisions of this Agreement.
[Signature Pages Follow]
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BORROWERS: | ||||||
ACTION PERFORMANCE COMPANIES, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Chief Financial Officer | ||||||
ACTION RACING COLLECTABLES, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Vice President | ||||||
ACTION SPORTS IMAGE, L.L.C. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Chief Financial Officer | ||||||
FUNLINE MERCHANDISE COMPANY, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Executive Vice President | ||||||
XXXX XXXXXXXX COLLECTION, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Secretary |
XXXXXXXX TOWEL AND SPORTS, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Vice President | ||||||
RACING COLLECTABLES CLUB OF AMERICA, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Vice President | ||||||
TREVCO TRADING CORP. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Secretary | ||||||
LOAN PARTIES: | ||||||
ACTION CORPORATE SERVICES, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
President | ||||||
AW ACQUISITION CORP. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Vice President | ||||||
CREATIVE MARKETING & PROMOTIONS, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Vice President |
XXXXXXXX.XXX, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Chief Financial Officer | ||||||
GORACING INTERACTIVE SERVICES, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
President | ||||||
RYP, INC. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Vice President | ||||||
THE FAN CLUB COMPANY, L.L.C. | ||||||
By: | /s/ R. Xxxxx Xxxxxx | |||||
R. Xxxxx Xxxxxx | ||||||
Vice President | ||||||
NOTICE ADDRESS FOR ALL BORROWERS AND LOAN PARTIES: | ||||||
c/o ACTION PERFORMANCE COMPANIES, INC. | ||||||
Address: 0000 X. Xxxxxxx Xxxxx Xxxxx, XX 00000 |
||||||
Attention: R. Xxxxx Xxxxxx | ||||||
Telephone: (000) 000-0000 | ||||||
Facsimile: (000) 000-0000 |
with a copy to: | ||||||
Xxxxxxxxx Traurig, LLP | ||||||
0000 Xxxx Xxxxxxxxx Xxxx, Xxxxx 000 | ||||||
Xxxxxxx, XX 00000 | ||||||
Attention: Xxxxxxx X. Xxxxxx, Esq. | ||||||
Telephone: (000) 000-0000 | ||||||
Facsimile: (000) 000-0000 |
AGENT AND LENDER: | ||||||
BANK ONE, NA | ||||||
Individually, as Agent and LC Issuer | ||||||
By: | /s/ Xxxx X. Xxxxxx | |||||
Name: | Xxxx X. Xxxxxx | |||||
Title: | Director | |||||
Address: | ||||||
Bank One, NA | ||||||
0000 Xxxx Xxxxxx, XX0 | ||||||
Xxxxxx, Xxxxx 00000 | ||||||
Attention: Xxxxxx X. Xxxxxxxxx | ||||||
Telephone: (000) 000-0000 | ||||||
Facsimile:(214) 290-____ |