CREDIT AGREEMENT
BY AND AMONG
HUTTIG BUILDING PRODUCTS, INC.,
AND
THE DOMESTIC SUBSIDIARIES OF HUTTIG BUILDING PRODUCTS, INC.
PARTY HERETO,
AS BORROWERS,
THE GUARANTORS FROM TIME TO TIME PARTY HERETO,
THE LENDING INSTITUTIONS PARTY HERETO,
AS LENDERS,
X.X. XXXXXX BUSINESS CREDIT CORP., AS ADVISOR,
JPMORGAN CHASE BANK,
AS ADMINISTRATIVE AND COLLATERAL AGENT, ISSUING BANK AND ARRANGER,
BANK OF AMERICA, N.A.
AS SYNDICATION AGENT,
LASALLE BANK NATIONAL ASSOCIATION,
AS A MANAGING AGENT,
GENERAL ELECTRIC CAPITAL CORPORATION,
AS A MANAGING AGENT,
TRANSAMERICA BUSINESS CAPITAL CORPORATION,
AS CO-AGENT
AND
CONGRESS FINANCIAL CORPORATION (CENTRAL)
AS DOCUMENTATION AGENT
Dated as of August 12, 2002
ARTICLE 1 DEFINITIONS; ACCOUNTING TERMS
Section 1.01 Definitions........................................................................... 1
Section 1.02 Accounting Principles................................................................. 23
Section 1.03 Directly or Indirectly................................................................ 24
Section 1.04 Construction.......................................................................... 24
Section 1.05 Joint and Several Obligations; Borrowers' Agent....................................... 24
Section 1.06 Times of Day.......................................................................... 24
ARTICLE 2 THE CREDIT
Section 2.01 The Revolving Credit Loans and Letters of Credit...................................... 24
Section 2.02 Funding of Revolving Credit Loans..................................................... 25
Section 2.03 Principal Repayment of Revolving Credit Loans......................................... 26
Section 2.04 Mandatory Prepayments................................................................. 26
Section 2.05 Interest.............................................................................. 28
Section 2.06 Eurodollar Interest Periods........................................................... 29
Section 2.07 Conversions........................................................................... 29
Section 2.08 Voluntary Prepayments................................................................. 30
Section 2.09 Uncollected Funds Compensation........................................................ 30
Section 2.10 Voluntary Termination of Revolving Credit Commitments................................. 30
Section 2.11 Certain Notices....................................................................... 30
Section 2.12 Calculation of Borrowing Base......................................................... 30
Section 2.13 Letters of Credit..................................................................... 31
Section 2.14 Settlement Between Agent and Lenders.................................................. 32
Section 2.15 Fees. ............................................................................. 32
Section 2.16 Payments Generally.................................................................... 33
Section 2.17 Purpose ............................................................................. 34
Section 2.18 Extension of Revolving Credit Termination Date........................................ 34
Section 2.19 Commitment Increases.................................................................. 36
ARTICLE 3 YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs...................................................................... 37
Section 3.02 Limitation on Types of Loans.......................................................... 38
Section 3.03 Illegality............................................................................ 39
Section 3.04 Certain Base Rate Loans pursuant to Sections 3.01 and 3.03............................ 39
Section 3.05 Certain Compensation.................................................................. 39
Section 3.06 Mitigation Obligations................................................................ 40
2
Section 3.07 Taxes................................................................................. 40
ARTICLE 4 CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to the Initial Loans............................................. 40
Section 4.02 Additional Conditions Precedent....................................................... 44
Section 4.03 Deemed Representations................................................................ 44
ARTICLE 5 REPRESENTATIONS AND WARRANTIES
Section 5.01 Incorporation, Good Standing and Due Qualification.................................... 45
Section 5.02 Corporate Power and Authority; No Conflicts........................................... 45
Section 5.03 Legally Enforceable Agreements........................................................ 45
Section 5.04 Litigation............................................................................ 45
Section 5.05 Financial Statements.................................................................. 45
Section 5.06 Ownership and Liens................................................................... 47
Section 5.07 Existing Indebtedness................................................................. 47
Section 5.08 Taxes................................................................................. 47
Section 5.09 ERISA................................................................................. 47
Section 5.10 Subsidiaries and Affiliates........................................................... 47
Section 5.11 Operation of Business................................................................. 48
Section 5.12 No Default on Outstanding Judgments or Orders......................................... 48
Section 5.13 No Defaults on Other Agreements....................................................... 48
Section 5.14 Labor Matters......................................................................... 49
Section 5.15 Investment Company Act; Holding Company Act........................................... 49
Section 5.16 Environmental Matters................................................................. 49
Section 5.17 Regulation U.......................................................................... 49
Section 5.18 No Guaranties or Indemnities.......................................................... 50
Section 5.19 Bank Accounts......................................................................... 50
Section 5.20 Trade Relations....................................................................... 50
Section 5.21 True and Complete Disclosure.......................................................... 50
ARTICLE 6 AFFIRMATIVE COVENANTS
Section 6.01 Maintenance of Existence.............................................................. 50
Section 6.02 Conduct of Business................................................................... 50
Section 6.03 Maintenance of Properties............................................................. 51
Section 6.04 Maintenance of Records; Fiscal Year................................................... 51
3
Section 6.05 Maintenance of Insurance.............................................................. 51
Section 6.06 Compliance with Laws; Payment of Taxes................................................ 51
Section 6.07 Right of Inspection................................................................... 51
Section 6.08 Reporting Requirements................................................................ 51
Section 6.09 Special Periodic Reports.............................................................. 53
Section 6.10 [Intentionally Omitted]............................................................... 54
Section 6.11 Field Audits; Inventory Appraisals.................................................... 54
Section 6.12 Cooperation and Further Assurance..................................................... 54
Section 6.13 Deposits Into Collateral Account...................................................... 54
Section 6.14 Lock Box Operation.................................................................... 54
Section 6.15 Landlords Waivers..................................................................... 54
Section 6.16 Real Property Financing............................................................... 55
Section 6.17 Existing Leases....................................................................... 55
ARTICLE 7 NEGATIVE COVENANTS
Section 7.01 Sale of Assets........................................................................ 55
Section 7.02 Stock of Subsidiaries, Etc............................................................ 55
Section 7.03 Mergers, Etc.......................................................................... 55
Section 7.04 Dividends and Stock Repurchases; Management Fees...................................... 55
Section 7.05 Liens ............................................................................. 55
Section 7.06 Transactions with Affiliates.......................................................... 57
Section 7.07 Hazardous Materials; Indemnification.................................................. 58
Section 7.08 Acquisitions.......................................................................... 58
Section 7.09 Subsidiaries.......................................................................... 59
Section 7.10 Certain Investments................................................................... 59
Section 7.11 Indebtedness.......................................................................... 60
Section 7.12 Guaranties, Etc....................................................................... 60
Section 7.13 Other Indebtedness.................................................................... 60
Section 7.14 Restrictive Agreements................................................................ 61
ARTICLE 8 FINANCIAL COVENANTS
Section 8.01 Minimum Fixed Charge Coverage Ratio................................................... 61
Section 8.02 Minimum Revolving Availability........................................................ 61
ARTICLE 9 EVENTS OF DEFAULT
4
Section 9.01 Events of Default..................................................................... 61
Section 9.02 Remedies.............................................................................. 63
Section 9.03 Application of Funds.................................................................. 63
ARTICLE 10 GUARANTY
Section 10.01 The Guarantee........................................................................ 64
Section 10.02 Obligations Unconditional............................................................ 64
Section 10.03 Reinstatement........................................................................ 65
Section 10.04 Subrogation; Subordination........................................................... 66
Section 10.05 Remedies............................................................................. 66
Section 10.06 Instrument for the Payment of Money.................................................. 66
Section 10.07 Continuing Guarantee................................................................. 66
Section 10.08 General Limitation on Guarantee Obligations.......................................... 66
ARTICLE 11 RELATIONS AMONG AGENT AND LENDERS
Section 11.01 Appointment, Powers and Immunities of Agent.......................................... 67
Section 11.02 Reliance by Agent.................................................................... 67
Section 11.03 Defaults............................................................................. 67
Section 11.04 Rights of Agent as a Lender.......................................................... 68
Section 11.05 Indemnification of Agent............................................................. 68
Section 11.06 Documents............................................................................ 68
Section 11.07 Non-Reliance on Agent and Other Lenders.............................................. 68
Section 11.08 Failure of Agent to Act.............................................................. 69
Section 11.09 Resignation or Removal of Agent...................................................... 69
Section 11.10 Amendments Concerning Agency Function................................................ 69
Section 11.11 Liability of Agent................................................................... 69
Section 11.12 Transfer of Agency Function.......................................................... 70
Section 11.13 Non-Receipt of Funds by the Agent.................................................... 70
Section 11.14 Withholding Taxes.................................................................... 70
Section 11.15 Several Obligations and Rights of Lenders............................................ 70
Section 11.16 Pro Rata Treatment of Loans, Etc..................................................... 71
Section 11.17 Sharing of Payments Among Lenders.................................................... 71
Section 11.18 Enforcement of Facility Documents.................................................... 71
Section 11.19 Borrowing Base Statements, Etc....................................................... 72
Section 11.20 Field Audits and Inventory Appraisals................................................ 72
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Section 11.21 Collateral and Guaranty Matters...................................................... 72
Section 11.22 Other Agents; Arrangers and Managers................................................. 73
ARTICLE 12 MISCELLANEOUS
Section 12.01 Amendments and Waivers............................................................... 73
Section 12.02 Usury................................................................................ 74
Section 12.03 Expenses; Indemnification............................................................ 74
Section 12.04 Survival............................................................................. 75
Section 12.05 Assignment; Participations........................................................... 75
Section 12.06 Confidentiality...................................................................... 78
Section 12.07 Table of Contents; Headings.......................................................... 78
Section 12.08 Severability......................................................................... 78
Section 12.09 Counterparts......................................................................... 78
Section 12.10 Governing Law........................................................................ 78
Section 12.11 Incorporation By Reference; Conflicts................................................ 79
Section 12.12 Jurisdiction, Venue and Service...................................................... 79
Section 12.13 Waiver of Jury Trial................................................................. 79
EXHIBITS AND SCHEDULES
Exhibit A - Form of Note
Exhibit B - Form of Authorization Letter
Exhibit C - Form of Monthly Borrowing Base Certificate
Exhibit D - [Intentionally Omitted]
Exhibit E - Form of Security and Pledge Agreement
Exhibit F - Form of Solvency Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Compliance Certificate
Exhibit I - Form of Weekly Collateral Certificate
Schedule 2.01(a) - Lenders and Commitments
Schedule 2.17 - Indebtedness to be Refinanced
Schedule 4.01(b) - Foreign Jurisdictions
Schedule 5.04 - Litigation
Schedule 5.07 - Outstanding Indebtedness
Schedule 5.09 - Pension Plans
Schedule 5.10 - Subsidiaries and Affiliates; Capitalization
Schedule 5.11 - Properties
6
Schedule 5.14 - Labor and Employment Matters
Schedule 5.16 - Environmental Matters
Schedule 5.19 - Bank Accounts
Schedule 7.01 - New Hampshire Transfer
Schedule 7.05 - Outstanding Liens
Schedule 7.06 - Transactions with Affiliates
Schedule 7.11 - Certain Indebtedness Permitted to Remain Outstanding
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CREDIT AGREEMENT
CREDIT AGREEMENT dated as of August 12, 2002 among Huttig Building
Products, Inc., a Delaware corporation ("HUTTIG"), the domestic subsidiaries of
Huttig party hereto (the "DOMESTIC SUBSIDIARIES"), as joint and several
borrowers, the Guarantors from time to time party hereto, the Lenders from time
to time party hereto, X.X. Xxxxxx Business Credit Corp., as Advisor, JPMorgan
Chase Bank, as administrative and collateral agent for the Lenders (in such
capacities, together with its successors in such capacities, the "AGENT") and as
Issuing Bank, Bank of America, N.A. , as syndication agent (in such capacity,
together with its successors in such capacity, the "SYNDICATION AGENT") LaSalle
Bank National Association, as a managing agent, General Electric Capital
Corporation, as a managing agent (each in such capacity, together with its
successors in such capacity, a "MANAGING AGENT"), Transamerica Business Capital
Corporation, as co-agent (in such capacity together with its successors in such
capacity (the "CO-AGENT"), and Congress Financial Corporation, as Documentation
Agent (in such capacity, together with its successors in such capacity, the
"DOCUMENTATION AGENT"; and together with the Syndication Agent, the "OTHER
AGENTS").
ARTICLE 1
DEFINITIONS; ACCOUNTING TERMS
Section 1.01 Definitions. As used in this Agreement the following terms
have the following meanings (terms defined in the singular to have a correlative
meaning when used in the plural and vice versa):
"ACCOUNT" means (i) all "accounts" as defined in Article 9 of the UCC
(as defined in the Security and Pledge Agreement) of the Borrowers and their
Subsidiaries and (ii) shall include any account receivable or right of the
Borrowers or any of their Subsidiaries to payment for goods sold or leased or
for services rendered (whether secured or unsecured), regardless of whether
classified as an account under the UCC and regardless of how such right is
evidenced and whether or not it has been earned by performance, now existing or
hereafter arising, and all interest, late charges, penalties, collection fees
and other sums which shall be due and payable in connection with any Account and
the proceeds thereof.
"ACCOUNT DEBTOR" means each Person obligated in any way on or in
connection with an Account.
"ACQUISITION" means any transaction pursuant to which the Borrowers or
any of their Subsidiaries: (a) acquires a majority of the equity securities
(including warrants, options or other rights to acquire such securities) of any
Person (other than the Borrowers or any Person that is then a Wholly-Owned
Subsidiary of any Borrower), pursuant to a solicitation of tenders therefor, or
in one or more negotiated block, market or other transactions not involving a
tender offer, or a combination of any of the foregoing; (b) makes any Person a
Subsidiary of any Borrower or any of its Subsidiaries, or causes any such Person
to be merged into any Borrower or any of its Subsidiaries, in any case pursuant
to a merger, purchase of assets or any reorganization providing for the delivery
or issuance to the holders of such Person's then outstanding securities, in
exchange for such securities, of cash or securities of any Borrower or any of
its Subsidiaries, or a combination thereof; or (c) purchase any portion of the
business or assets of any Person, other
HUTTIG CREDIT AGREEMENT
than equity securities (including warrants, options or other rights to acquire
such securities) and other than purchases of assets in the ordinary course of
business.
"ADJUSTED BASE RATE" means, for any day, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate in effect on such day, and (b) the Federal Funds Rate in
effect on such day plus one-half of 1%. Any change in the Adjusted Base Rate due
to a change in the Prime Rate or the Federal Funds Rate shall be effective from
and including the effective date of such change in the Prime Rate or the Federal
Funds Rate, respectively.
"ADJUSTED EURODOLLAR RATE" means, with respect to any Borrowing for any
Eurodollar Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the Eurodollar Rate for such
Eurodollar Interest Period multiplied by (b) the Statutory Reserve Rate.
"AFFECTED LOAN" has the meaning set forth in Section 3.04.
"AFFECTED PARTY" has the meaning set forth in Section 3.01(a).
"AFFECTED TYPE" has the meaning set forth in Section 3.04.
"AFFILIATE" means any Person which directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under common Control
with, any other Person.
"AGENT" has the meaning set forth in the preamble to this Agreement.
"AGREEMENT" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified from time to time. References to Articles,
Sections, Exhibits, Schedules and the like refer to the Articles, Sections,
Exhibits, Schedules and the like of this Agreement unless otherwise indicated.
"APPLICABLE COMMITMENT FEE RATE" means a percentage rate per year
(expressed in basis points), equal to:
(a) For the period from the date hereof through the Fiscal Quarter
ended September 30, 2002, thirty-seven and one-half (37.5) basis points; and
(b) For each Fiscal Quarter thereafter, the Applicable Commitment Fee
Rate set forth below which corresponds to the Percent Utilization as of the last
day of the prior Fiscal Quarter (as such Percent Utilization is set forth in the
Borrowing Base Certificate delivered for the Fiscal Month ending concurrently
with such prior Fiscal Quarter and approved by the Agent):
APPLICABLE COMMITMENT FEE
PERCENT UTILIZATION RATE IN BASIS POINTS PER YEAR
------------------- -----------------------------
Less than 50% 50
Equal to or greater than 50% 37.5
but less than 75%
Equal to or greater than 75% 25
2
HUTTIG
CREDIT AGREEMENT
Anything in the Agreement to the contrary notwithstanding, after the
occurrence and during the continuance of any Event of Default, the Applicable
Commitment Fee Rate shall equal fifty (50) basis points.
"APPLICABLE MARGIN" means the Base Rate Margin in respect of each Base
Rate Loan and the Eurodollar Margin in respect of each Eurodollar Loan.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee and accepted by the Agent in
accordance with Section 12.05 and in substantially the form of Exhibit G.
"AUTHORIZATION LETTER" means the letter agreement executed by the
Borrowers in the form of Exhibit B.
"AVAILABLE FUNDS" means all deposits in the Collateral Account which
shall have been made by 2:00 p.m. on a Banking Day, or such later time in any
Banking Day as the Agent shall have expressly consented to.
"BANK PRODUCT OBLIGATIONS" means all obligations of the Borrowers or
their Subsidiaries pursuant to and under any Lock Box Agreement or Controlled
Account Agreement and all obligations of the Borrowers or their Subsidiaries
pursuant to and under any cash management service agreement between any of the
Borrowers or Guarantors and the Agent or any Lender.
"BANKING DAY" means any day on which commercial banks are not
authorized or are not required to be closed in
New York,
New York and whenever
such day relates to a Eurodollar Loan or notice with respect to any Eurodollar
Loan, a day on which dealings in Dollar deposits are also carried out in the
London interbank market.
"BASE RATE LOAN" means any Loan hereunder bearing interest at a rate
based upon the Adjusted Base Rate.
"BASE RATE MARGIN" means a rate of interest per year (expressed in
basis points) equal to:
(a) For the period from the date hereof through the first Banking Day
on which the Agent receives the financial statements required to be delivered by
the Borrowers pursuant to Section 6.08(b) of this Agreement for the Fiscal
Quarter ended September 30, 2002, fifty (50) basis points; and
(b) For each Base Rate Margin Period thereafter, the Base Rate Margin
set forth below which corresponds to the Trailing Average Collateral
Availability as of the commencement of such Base Rate Margin Period (provided
that if a Borrowing Base Certificate is not delivered when due in accordance
with Section 6.09(a)(ii) as contemplated by the definition of "Base Rate Margin
Period", then the Trailing Average Collateral Availability will be deemed to be
less than $20,000,000 as of the commencement of such Base Rate Margin Period and
at all times thereafter until the date on which such Borrowing Base Certificate
is delivered to the Agent):
3
HUTTIG
CREDIT AGREEMENT
BASE RATE MARGIN IN
TRAILING AVERAGE COLLATERAL AVAILABILITY BASIS POINTS PER YEAR
---------------------------------------- ---------------------
Greater than or equal to $40,000,000 25
Greater than or equal to $30,000,000 but less than $40,000,000 50
Greater than or equal to $20,000,000 but less than $30,000,000 75
Less than $20,000,000 125
Anything in the Agreement to the contrary notwithstanding, after the
occurrence and during the continuance of any Event of Default and following a
written demand of the Agent to the Borrowers at the request of the Required
Lenders, interest shall accrue on all Loans at the Default Rate.
"BASE RATE MARGIN PERIOD" means each period beginning on the first
Banking Day of the month following the date on which the Agent receives the
Borrowing Base Certificate required to be delivered by the Borrowers pursuant to
Section 6.09(a)(ii) for the prior month and ending on the day immediately
preceding the commencement of the next Base Rate Margin Period.
"BORROWERS" means Huttig and each of its domestic Subsidiaries, jointly
and severally, together with (i) any Subsidiary of Huttig which, upon the
request of Huttig and upon the approval of the Agent and the Required Lenders,
becomes a co-borrower hereunder pursuant to such documentation as the Agent
shall reasonably request, and (ii) all of their respective successors and
assigns; and "Borrower" means any one of the Borrowers.
"BORROWERS' AGENT" has the meaning set forth in Section 1.05.
"BORROWING BASE" means the sum in United States Dollars of the
following determined as of the latest Borrowing Base Certificate delivered to
the Agent:
(a) up to 85% of the aggregate amount of Eligible Accounts; plus
(b) the lesser of (i) up to 65% of the cost of Eligible Inventory and
(ii) 85% of the appraised net liquidation value of Eligible Inventory based on
the most recent inventory appraisal conducted by the Agent (it being understood
and agreed that such net liquidation value shall be net of liquidation expenses
as estimated by the appraiser); minus
(c) the aggregate amount of reserves established from time to time by
the Agent for Interest Rate Protection Obligations and Foreign Exchange
Obligations that are secured by the Collateral pursuant to this Agreement or the
other Facility Documents;
in each case as calculated by the Agent from time to time; PROVIDED,
HOWEVER, that the Agent, in its reasonable discretion, may on five (5) Banking
Days prior written notice to the Borrowers' Agent from time to time adjust the
Borrowing Base by reducing the percentages of Eligible Accounts or Eligible
Inventory by setting up such reserves or other reductions in the amount of the
Borrowing Base as the Agent deems appropriate in its reasonable credit judgment
from time to time.
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HUTTIG
CREDIT AGREEMENT
"BORROWING BASE CERTIFICATE" means and includes the monthly borrowing
base certificate delivered by the Borrowers' Agent pursuant to Section
6.09(a)(ii) to the Agent in substantially the form of Exhibit C.
"CAPITAL EXPENDITURES" means, for any period, the sum for the Borrowers
(determined on a consolidated basis without duplication in accordance with GAAP)
of the aggregate amount of expenditures made or liabilities incurred during such
period (including the aggregate amount of Capital Lease Obligations incurred
during such period) to acquire or construct fixed assets, plant and equipment
(including renewals, improvements and replacements, but excluding repairs)
computed in accordance with GAAP; PROVIDED that such term shall not include any
such expenditures in connection with any replacement or repair of property that
has suffered a Casualty Event.
"CAPITAL LEASE OBLIGATIONS" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and
for purposes hereof, the amount of any such obligation shall be the Capitalized
Rentals thereunder.
"CAPITALIZED LEASE" means any lease of property, the obligation for
Rentals with respect to which, is required to be capitalized on a consolidated
or combined balance sheet of the lessee and its subsidiaries or related entities
in accordance with GAAP.
"CAPITALIZED RENTALS" of any Person shall mean as of the date of any
determination thereof, the amount at which the aggregate present value of future
Rentals due and to become due under all Capitalized Leases under which such
Person is a lessee would be reflected as a liability on a consolidated or
combined balance sheet of such Person in accordance with GAAP.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS" means any of the following, to the extent owned by
the Borrowers or any of their Subsidiaries free and clear of all Liens other
than Liens created under the Security Documents: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States having a maturity of not
greater than 360 days from the date of issuance thereof; (b) insured
certificates of deposit of, or time deposits having a maturity of not greater
than 360 days from the date of issuance thereof with, any commercial bank that
is a Lender or a member of the Federal Reserve System, that issues (or the
parent of which issues) commercial paper rated as described in clause (c), that
is organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1 billion; or (c) commercial paper
having a maturity of not greater than 180 days from the date of issuance thereof
in an aggregate amount of no more than $4,000,000 per issuer outstanding at any
time, issued by any corporation organized under the laws of any State of the
United States and rated at least "Prime-1" (or the then equivalent grade) by
Xxxxx'x Investors Service, Inc. or "A-1" (or the then equivalent grade) by
Standard & Poor's Ratings Group.
"CASUALTY EVENT" means with respect to any property of any Person, any
loss of or damage to, or any condemnation or other taking of, such property for
which such Person receives insurance proceeds, or proceeds of a condemnation
award or other compensation.
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HUTTIG
CREDIT AGREEMENT
"CHANGE OF CONTROL" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT")), excluding Rugby, shall become, or obtain rights (whether by means of
warrants, options or otherwise) to become, the "beneficial owner", directly or
indirectly, of more than 25% of the outstanding Voting Stock of Huttig; (b) the
board of directors of Huttig shall cease to consist of a majority of Continuing
Directors; (c) Rugby shall become, or obtain rights (whether by means of
warrants, options or otherwise) to become, the "beneficial owner" directly or
indirectly, of more than 35% of the outstanding common stock of Huttig; (d)
Rugby shall obtain control of, or obtain rights to obtain control of, whether
through ownership of common stock, by contract or otherwise, a majority of the
seats on Huttig's board of directors; or (e) Huttig shall cease to own, directly
or indirectly, 100% of the outstanding capital stock or other equity interests
of any other Borrower. As used in this definition, "beneficial owner" has the
meaning provided in Rules 13(d)-3 and 13(d)-5 of the Exchange Act.
"CLOSING DATE" means August 12, 2002.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COLLATERAL" means, collectively, all of the property (including
capital stock and other beneficial interests) in which Liens are purported to be
granted pursuant to the Security Documents as security for all Obligations of
the Borrowers and the Guarantors hereunder.
"COLLATERAL ACCOUNT" means, collectively, any account of the Borrowers
maintained at the Agent or at another financial institution reasonably
acceptable to the Agent as an account into which all proceeds of Collateral
shall be deposited pursuant to any of the Security Documents, and pursuant to
any Lock Box Agreement or Controlled Account Agreement which the Borrowers or
any of their Subsidiaries may enter into with the Agent or at another financial
institution reasonably acceptable to the Agent.
"COLLATERAL AVAILABILITY" means, as of any date of determination
thereof, the amount by which (a) the Borrowing Base at such time exceeds (b) the
Total Exposure at such time.
"CONTINUING DIRECTORS" means individuals who constituted the board of
directors of Huttig at the Closing Date (together with any new directors whose
election or whose nomination for election by the equity holders of Huttig was
approved by a vote of at least a majority of the directors then still in office
or whose election or nomination for election was previously so approved or whose
election or nomination for election was approved or designated by Rugby pursuant
to the Registration Rights Agreement, dated as of December 16, 1999, between
Rugby and Huttig, as amended).
"CONTROL" and "CONTROLS" means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
a Person, whether through the ownership of Voting Stock, by contract or holding
or owning the power to vote, or possessing the power to direct any right to
vote, or as an officer, director, employee or management consultant or other
arrangement where there is the power to direct or cause the direction of the
management and policies of a Person, and "Controlled" means to be under the
Control of another Person. Without limiting the generality of the foregoing, a
Person shall be deemed to be Controlled by another Person if such other Person
possesses, directly or indirectly, power to vote 10% or more of the securities
having ordinary voting power for the election of directors, managing general
partners or the equivalent.
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HUTTIG
CREDIT AGREEMENT
"CONTROLLED ACCOUNT" means any deposit or other bank account maintained
by any of the Borrowers or any of their Subsidiaries with (i) the Agent, or (ii)
any financial institution other than the Agent that is the subject of a
Controlled Account Agreement in favor of the Agent.
"CONTROLLED ACCOUNT AGREEMENT" means with respect to any deposit or
other bank account maintained by any of the Borrowers or any of their
Subsidiaries, an agreement among such Borrower or such Subsidiary, the
depository institution at which such account is maintained and the Agent in form
and substance satisfactory to the Agent that provides for the financial
institution at which such account is maintained to comply with instructions
originated by the Agent with respect to the funds from time to time on deposit
in such account without further consent of such Borrower or such Subsidiary or
any other Person.
"CONTROLLED DISBURSEMENTS ACCOUNT" means, collectively, each account
identified on Schedule III to the Security and Pledge Agreement and any
subsequent account of the Borrowers at a financial institution acceptable to the
Agent, or at the Agent as a zero balance, cash management account pursuant to
and under controlled disbursement service agreements between the Borrowers and
the Agent or such other financial institution, and through which all
disbursements by the Borrowers and any designated Subsidiaries are made and
settled on a daily basis with no uninvested balance remaining overnight.
"COPYRIGHTS" has the meaning set forth in the Security and Pledge
Agreement.
"DEFAULT" means any event, condition or act which, with the giving of
notice or lapse of time, or both, would become an Event of Default.
"DEFAULT RATE" means (i) for any principal of any Loan, a rate per
annum equal to the rate which is then in effect for such Loan plus two percent
(2%) and (b) for any other amount due or payable hereunder, a rate per annum
equal to the Adjusted Base Rate plus two percent (2%).
"DESIGNATED FINANCIAL OFFICERS" has the meaning set forth in Section
1.05.
"DOLLARS" and the sign "$" mean lawful money of the United States of
America.
"DOMESTIC SUBSIDIARIES" has the meaning set forth in the preamble
hereto.
"EARN OUT OBLIGATIONS" means the obligations of the Borrowers or their
Subsidiaries to make payments in cash or cash equivalents in respect of any
Acquisition after the consummation of such Acquisition to any Person(s) who
previously owned or controlled the assets or capital stock of the business
acquired by the Borrowers or such Subsidiaries pursuant to such Acquisition.
"EBITDA" means for any fiscal period and in respect of any Person, the
sum of (a) the net income of such Person for such period computed in accordance
with GAAP, plus (b) the interest expense, of such Person for such period as
reported on such Person's financial statements for such period, plus (c) the
income tax expense of such Person for such period as reported on such Person's
financial statements for such period, plus (d) the amount reported on the
financial statements of such Person as the depreciation of the assets of such
Person for such period computed in accordance with GAAP, plus (e) the amount
reported on the financial statements of such Person as the amortization of
intangibles assets of such Person for such period computed in accordance with
GAAP, plus (f) the amount reported on the financial statements of such Person as
the write-down of intangibles assets of such Person that consist of goodwill for
such period
7
HUTTIG CREDIT AGREEMENT
computed in accordance with GAAP, and plus (g) all cash and non-cash
extraordinary or non-operating expenses and losses of such Person for such
period computed in accordance with GAAP, minus (h) all cash and non-cash
extraordinary or non-operating income and gains of such Person for such period,
in each case as such item is used in the computation of such Person's net income
for such period.
"EFFECTIVE DATE" means the date on which all conditions under Article 4
shall be fully satisfied or waived.
"ELIGIBLE ACCOUNTS" means Accounts (excluding all interest, late
charges, penalties, collection fees and other similar sums) owing to any
Borrower, now existing or hereafter arising, each of which Accounts met the
following specifications at the time it came into existence and continues to
meet the same until it is collected in full:
(a) An invoice (in form and substance reasonably satisfactory to the
Agent) with respect to such Account has been sent to the applicable Account
Debtor and bears an invoice date contemporaneous with or later than the date of
the sale of goods or rendering of services giving rise to such invoice;
(b) The Account is due and payable in full, is not subject to any xxxx
and hold arrangement, and not more than 90 days have elapsed since the invoice
date of such Account and not more than 60 days have elapsed since the due date
for payment of such Account;
(c) The Account arose from the sale of goods or the provision of
services to the Account Debtor by a Borrower and not by any other Person (in
whole or in part); such services or goods have been performed or provided in
full; the Account is evidenced by such invoices, shipping documents or other
instruments ordinarily used in the trade as shall be reasonably satisfactory to
the Agent; and no rejection or dispute has occurred with respect to such
Account;
(d) The Account Debtor is organized under the laws of the United States
or any political subdivision thereof and has its chief executive office in the
United States;
(e) The Account is not subject to any assignment, claim, lien, or
security interest, except in favor of the Agent and the Lenders;
(f) The Account is a valid and legally enforceable obligation of the
Account Debtor and is not subject to any claim for credit, defense, offset,
deduction, chargeback, counterclaim or adjustment by the Account Debtor, other
than any discount allowed for prompt payment;
(g) The Account arose in the ordinary course of business of the
Borrowers and no notice of the bankruptcy, insolvency, failure, or suspension or
termination of business of the Account Debtor has been received by the
Borrowers;
(h) The Account Debtor is not an Affiliate of the Borrowers or any of
their Subsidiaries or a supplier (or an Affiliate of a supplier) of goods or
services to the Borrowers or any of their Subsidiaries;
(i) The Account otherwise conforms to all representations, warranties
and other provisions of this Agreement relating to Accounts;
(j) The Account Debtor is not an individual or Governmental Authority;
8
HUTTIG CREDIT AGREEMENT
(k) The Account is denominated and payable only in United States
dollars in the United States;
(l) The Account is not evidenced by a promissory note, warrant or other
instrument or chattel paper;
(m) The Account is subject to an enforceable, perfected, first priority
Lien in favor of the Agent;
(n) The Account does not by its terms or the terms of any related
documentation require the consent of the Account Debtor to the transfer, sale or
assignment of such Account;
(o) The Account does not include fees charged for services or goods
that exceed limitations imposed by applicable law, or regulation;
(p) The Account Debtor is not the holder of any indebtedness or other
obligations due from or payable by any of the Borrowers;
(q) The Account is not due from an Account Debtor for which more than
50% (subject to periodic adjustment by the Agent) of the total Accounts due from
such Account Debtor fail to meet the other eligibility criteria set forth in
this definition; PROVIDED, that if the aggregate amount of Accounts due from any
Account Debtor exceeds 25% of all Accounts of the Borrowers at such time, all
Accounts due from such Account Debtor shall be excluded from Eligible Accounts
if more than 35% of the Accounts due from such Account Debtor do not meet the
other eligibility criteria set forth in this definition;
(r) The Agent in its reasonable discretion has not deemed the credit
worthiness of the Account or Account Debtor unsatisfactory; and
(s) The Account has not been determined by the Agent in its reasonable
discretion to be unusual or not customary for the Borrowers' type of business or
otherwise ineligible for inclusion in the Borrowing Base.
For purposes of determining the Borrowing Base at any time there shall
be excluded from Eligible Accounts, the portion, if any, of the aggregate amount
of Accounts owing from any single Account Debtor that exceeds 35% of the
aggregate balance of all Accounts of the Borrowers at such time.
"ELIGIBLE ASSIGNEE" means: (a) a Lender; (b) an Affiliate of a Lender;
(c) a commercial bank organized under the laws of the United States, or any
State thereof, and having total assets in excess of $1,000,000,000; (d) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof, and having total assets in excess of
$1,000,000,000; (e) a commercial bank organized under the laws of any other
country that is a member of the OECD or has concluded special lending
arrangements with the International Monetary Fund associated with its General
Arrangements to Borrow or of the Cayman Islands, or a political subdivision of
any such country, and having total assets in excess of $1,000,000,000, so long
as such bank is acting through a branch or agency located in the United States;
(f) the central bank of any country that is a member of the OECD; (g) a finance
company, insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) that is engaged in making,
purchasing or otherwise investing in commercial loans in the ordinary course of
its business and having total assets in excess of $1,000,000,000; and (h) any
9
HUTTIG CREDIT AGREEMENT
other Person approved by the Agent; PROVIDED that none of the Borrowers or any
of their Affiliates shall qualify as an Eligible Assignee under this definition.
"ELIGIBLE INVENTORY" means raw material and finished goods inventory of
the Borrowers, valued at the most recent purchase price paid by the Borrowers
for such item of inventory, excluding:
(a) slow moving, obsolete or unmerchantable inventory, as reasonably
determined by the Agent;
(b) inventory located outside of the United States;
(c) inventory that is not located at premises owned or leased by a
Borrower;
(d) work in process, spare parts, packaging and shipping materials,
supplies, returned, damaged or defective inventory;
(e) inventory that is subject to any Lien, except Liens in favor of the
Agent;
(f) inventory that is not subject to an enforceable, perfected, first
priority Lien in favor of the Agent;
(g) inventory held for return to vendors;
(h) goods held by any Borrower on consignment from another Person;
(i) inventory that the Agent, in its good faith discretion, has deemed
to be otherwise ineligible; and
(j) non-stock inventory (other than non-stock inventory with an
aggregate value equal to or less than $6,000,000).
In addition, unless the Agent has received a Landlord's Waiver and
Consent, in form and substance satisfactory to the Agent, with respect to a
Leasehold Property, the Agent shall have the right in its discretion to (x)
exclude all or any portion of the inventory located at such location from
Eligible Inventory and/or (y) establish reserves under the Borrowing Base in
respect of such inventory; PROVIDED, FURTHER, that the Agent shall not exercise
such right with respect to any Leasehold Properties in existence at the Closing
Date prior to October 12, 2002.
"ENVIRONMENTAL LAW" shall mean the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601-9657, as
amended by the Superfund Amendments and Reauthorization Act of 1986, Pub. L. No.
99-499, 100 Stat. 1613 (October 17, 1986), the Resource Conservation and
Recovery Act, 42 U.S.C. Sections 6991-6991i, as amended by the Superfund
Amendments and Reauthorization Act of 1986, Pub. L. No. 99-499, 100 Stat. 1613
(October 17, 1986), as the same may be amended from time to time, and any other
presently existing or hereafter enacted or decided federal, state or local
statutory or common laws relating to pollution or protection of the environment,
including without limitation, any common law of nuisance or trespass, and any
law or regulation relating to emissions, discharges, releases or threatened
release of pollutants, contaminants or chemicals or industrial, toxic or
hazardous substances or wastes into the environment (including without
limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or otherwise relating to the manufacture,
10
HUTTIG CREDIT AGREEMENT
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants or chemicals, or industrial, toxic or
hazardous substances or wastes.
"EQUITY RIGHTS" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, or securities convertible into, any additional shares of capital stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, including any rules and regulations promulgated
thereunder.
"ERISA AFFILIATE" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as any Borrower or is under common control (within
the meaning of Section 414(c) of the Code) with any Borrower.
"EURODOLLAR INTEREST PAYMENT DATE" means with respect to any Eurodollar
Loan the last day of the Eurodollar Interest Period applicable to such
Eurodollar Loan.
"EURODOLLAR INTEREST PERIOD" means the period of time commencing on the
day a Eurodollar Rate is made applicable to a Loan Tranche and ending on the
numerically corresponding day in the first, second or third calendar month
thereafter, as the Borrowers may select pursuant to Sections 2.07 and 2.08,
PROVIDED that each such Eurodollar Interest Period which commences on the last
Banking Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Banking Day of the appropriate calendar month.
"EURODOLLAR LOAN" means any Loan Tranche when and to the extent the
interest rate therefor is determined on the basis of the "Eurodollar Rate."
"EURODOLLAR MARGIN" means a rate of interest per year (expressed in
basis points) equal to:
(a) For the period from the date hereof through the first Banking Day
on which the Agent receives the financial statements required to be delivered by
the Borrowers pursuant to Section 6.08(b) of this Agreement and for the Fiscal
Quarter ended September 30, 2002, 225 basis points; and
(b) For each Eurodollar Margin Period thereafter, the Eurodollar Margin
set forth below which corresponds to the Trailing Average Collateral
Availability as of the commencement of such Eurodollar Margin Period (provided
that if a Borrowing Base Certificate is not delivered when due in accordance
with Section 6.09(a)(ii) as contemplated by the definition of "Eurodollar Margin
Period", then the Trailing Average Collateral Availability will be deemed to be
less than $20,000,000 as of the commencement of such Eurodollar Margin Period
and at all times thereafter until the date on which such Borrowing Base
Certificate is delivered to the Agent):
11
HUTTIG CREDIT AGREEMENT
EURODOLLAR MARGIN IN
TRAILING AVERAGE COLLATERAL AVAILABILITY BASIS POINTS PER YEAR
---------------------------------------- ---------------------
Greater than or equal to $40,000,000 200
Greater than or equal to $30,000,000 but less than $40,000,000 225
Greater than or equal to $20,000,000 but less than $30,000,000 250
Less than $20,000,000 300
To the extent that a Eurodollar Margin Period commences during the
pendency of a Eurodollar Interest Period for an existing Eurodollar Loan, the
Eurodollar Margin shall remain the same for the remainder of the Eurodollar
Interest Period for such existing Eurodollar Loan. Anything in this Agreement to
the contrary notwithstanding, after the occurrence and during the continuance of
any Event of Default and following a written demand of the Agent to the
Borrowers at the request of the Required Lenders, interest shall accrue on all
Loans at the Default Rate.
"EURODOLLAR MARGIN PERIOD" means each period beginning on the first
Banking Day of the month following the date on which the Agent receives the
Borrowing Base Certificate required to be delivered by the Borrowers pursuant to
Section 6.09(a)(ii) for the prior month, and ending on the day immediately
preceding the commencement of the next Eurodollar Margin Period.
"EURODOLLAR RATE" means, with respect to any Eurodollar Loan for any
Eurodollar Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or on any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently PROVIDED on such page of such Service, as
determined by the Agent from time to time for purposes of providing quotations
of interest rates applicable to dollar deposits in the London interbank market)
at approximately 11:00 a.m., London time, two Banking Days prior to the
commencement of such Eurodollar Interest Period, as the rate for dollar deposits
with a maturity comparable to such Eurodollar Interest Period. In the event that
such rate is not available at such time for any reason, then the "Eurodollar
Rate" with respect to such Eurodollar Loan for such Eurodollar Interest Period
shall be the rate at which dollar deposits of $5,000,000 and for a maturity
comparable to such Eurodollar Interest Period are offered by the Agent's
principal London office in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Banking Days prior to the
commencement of such Eurodollar Interest Period.
"EVENT OF DEFAULT" has the meaning given such term in Section 9.01.
"EXCLUDED TAXES" means, with respect to any and all payments to the
Agent, any Lender or any recipient of any payment to be made by or on account of
any obligation of the Borrowers under the Facility Documents, net income taxes,
branch profits taxes, franchise and excise taxes (to the extent imposed in lieu
of net income taxes), and all interest, penalties and liabilities with respect
thereto, imposed on the Agent or any Lender.
12
HUTTIG CREDIT AGREEMENT
"FACILITY DOCUMENTS" means this Credit Agreement, the Notes, the
Authorization Letter, all Letter of Credit documents, all Security Documents,
all foreign exchange contracts and Interest Rate Protection Agreements between
any of the Borrowers or Guarantors and the Agent or any of the Lenders, all Lock
Box Agreements and Controlled Account Agreements, all cash management service
agreements entered into from time to time between any of the Borrowers or
Guarantors and the Agent or any of the Lenders and any other agreement, document
or instrument between any of the Borrowers or Guarantors and the Agent or the
Lenders that is executed or delivered pursuant to or in connection with this
Agreement.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (expressed
on a 360 day basis of calculation) equal to the weighted average of the rates on
overnight federal funds transactions as published by the Federal Reserve Bank of
New York for such day (or for any day that is not a Banking Day, for the
immediately preceding Banking Day).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Security Document, that such Lien,
subject to Permitted Liens (other than Permitted Liens described in Section
7.05(f)), is the most senior Lien to which such Collateral is subject.
"FISCAL MONTH" means each fiscal month of the Borrowers.
"FISCAL QUARTER" means each of the fiscal three month periods
commencing on the first day of the Fiscal Year and on the first day of each
subsequent fiscal three month period.
"FISCAL YEAR" means the fiscal year period of the Borrowers, each of
which shall end on the 31st day of December of each year.
"FIXED CHARGE COVERAGE RATIO" means, as of any date, the ratio of (a)
(i) EBITDA of the Borrowers and their Subsidiaries for the period of twelve
months most recently ended on or prior to such date (determined on a
consolidated basis without duplication in accordance with GAAP), plus (ii) the
aggregate amount of cash payments in respect of rental expense paid during such
period, minus (iii) the aggregate amount paid by the Borrowers and their
Subsidiaries in cash in respect of the current portion of all income taxes for
such period, minus (iv) the aggregate amount of all Non-Financed Capital
Expenditures of the Borrower and their Subsidiaries during such period, to (b)
the sum for the Borrowers and their Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), of (i) the aggregate amount
of Interest Expense for such period, (ii) the aggregate amount of regularly
scheduled payments of principal in respect of long-term Indebtedness for
borrowed money (including the principal component of any payments in respect of
Capital Lease Obligations) paid or required to be paid during such period, and
(iii) the aggregate amount of cash payments in respect of rental expense paid
during such period.
"FOREIGN EXCHANGE OBLIGATIONS" means all obligations of the Borrowers
or their Subsidiaries pursuant to and under any and all foreign exchange
contracts and agreements to which any Borrower or any Subsidiary is a party as
of any date of computation as if such foreign exchange agreement were to be
terminated or declared to be in default on such date (after giving effect to any
netting provisions).
"FOREIGN SUBSIDIARY" means any Subsidiary of any of the Borrowers or
their Subsidiaries that is not organized under the laws of the United States or
any political subdivision thereof.
13
HUTTIG CREDIT AGREEMENT
"FUNDED INDEBTEDNESS" means, in respect of any Person, (a) all
Indebtedness of such Person for borrowed money or which has been incurred in
connection with the acquisition of assets (excluding leases defined as
"operating leases" under GAAP), (b) all payments in respect of item (a) above
that were required to be made within one year prior to the date of any
determination of Funded Indebtedness, if the obligation to make such payments
shall constitute a current liability of the obligor under GAAP, (c) all
Capitalized Rentals of such Person, and (d) any and all other interest-bearing
Indebtedness for borrowed money (other than undrawn Letters of Credit).
"GAAP" means, subject to Section 1.02, generally accepted accounting
principles in the United States of America as in effect from time to time,
applied on a basis consistent with those used in the preparation of the
financial statements referred to in Section 5.05.
"GOVERNMENTAL AUTHORITY" means the government of the United States of
America, any other nation or any political subdivision thereof, whether state or
local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government and the National Association of Insurance Commissioners.
"GUARANTIES" by any Person shall mean all obligations (other than
endorsements in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing, or in effect guaranteeing,
any Indebtedness, dividend or other obligation of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, all obligations incurred through an agreement, contingent or
otherwise, by such Person: (a) to purchase such Indebtedness or obligation or
any property constituting security therefor, (b) to advance or supply funds (i)
for the purchase or payment of such Indebtedness or obligation, or (ii) to
maintain working capital or other balance sheet condition or otherwise to
advance or make available funds for the purchase or payment of such Indebtedness
or obligation, (c) to lease property or to purchase securities or other property
or services primarily for the purpose of assuring the owner of such Indebtedness
or obligation of the ability of the primary obligor to make payment of the
Indebtedness or obligation, or (d) otherwise to assure the owner of the
Indebtedness or obligation of the primary obligor against loss in respect
thereof. For the purposes of all computations made under this Agreement, a
Guaranty in respect of any Indebtedness for borrowed money shall be deemed to be
Indebtedness equal to the principal amount of such Indebtedness for borrowed
money which has been guaranteed, and a Guaranty in respect of any other
obligation or liability or any dividend shall be deemed to be Indebtedness equal
to the maximum aggregate amount of such obligation, liability or dividend.
"GUARANTORS" means any direct or indirect domestic Subsidiary of Huttig
who is not a Borrower hereunder and who from time to time agrees to guaranty the
obligations of the Borrowers hereunder pursuant to Article 10 hereof by
executing and delivering to the Agent counterpart signature page to this
Agreement or such other documentation acceptable to the Agent, together with all
of their successors and assigns.
"HAZARDOUS MATERIALS" means any contaminants, hazardous substances,
regulated substances, or hazardous wastes which may be the subject of liability
pursuant to any Environmental Law.
"HUTTIG" has the meaning set forth in the preamble hereto.
14
HUTTIG CREDIT AGREEMENT
"INDEBTEDNESS" of any Person means and includes all obligations of such
Person which in accordance with GAAP shall be classified upon a balance sheet of
such Person as liabilities of such Person, and in any event shall include all
(a) obligations of such Person for borrowed money or which have been incurred in
connection with the acquisition of property, (b) obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (c) all
obligations and liabilities, contingent or otherwise, of such Person in respect
of letters of credit, acceptances and similar facilities, (d) obligations
secured by any Lien upon property owned by such Person, even though such Person
has not assumed or become liable for the payment of such obligations, (e)
obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person,
notwithstanding the fact that the rights and remedies of the seller, lender or
lessor under such agreement in the event of default are limited to repossession
or sale of property, (f) Capitalized Rentals, (g) Guaranties of obligations of
others of the character referred to in this definition, (h) Interest Rate
Protection Obligations, and (i) Foreign Exchange Obligations.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INTEREST EXPENSE" means, for any period, the sum, without duplication,
for the Borrowers and their Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) all interest
in respect of Indebtedness paid in cash during such period, but excluding
capitalized debt acquisition costs (including capitalized fees and expenses
related to this Agreement) plus (b) the net amounts paid (or minus the net
amounts received) in cash in respect of Foreign Exchange Obligations or Interest
Rate Protection Agreements during such period excluding reimbursement of legal
fees and other similar transaction costs and excluding payments required by
reason of the early termination of Foreign Exchange Obligations or Interest Rate
Protection Agreements in effect on the date hereof plus (c) all fees, including
letter of credit fees and expenses, (but excluding reimbursement of legal fees)
paid in cash in pursuant to this Agreement during such period.
"INTEREST RATE PROTECTION AGREEMENT" means any interest rate cap, swap,
collar or other, similar protection agreement, foreign currency exchange
agreement, commodity price protection agreement or other interest or currency
exchange rate or commodity price hedging arrangement to which any Borrower or
any of its Subsidiaries is a party or for which any Borrower or any of its
Subsidiaries is liable.
"INTEREST RATE PROTECTION OBLIGATION" means obligations of the
Borrowers and their Subsidiaries pursuant to and under any and all Interest Rate
Protection Agreements to which any Borrower or any of its Subsidiaries is a
party as of any date of computation as if such Interest Rate Protection
Agreement were to be terminated or declared to be in default on such date (after
giving effect to any netting provisions).
"IP COLLATERAL" means, collectively, the Copyrights, Patents,
Trademarks and other Collateral relating to intellectual property rights of the
Borrowers or the Guarantors under the Security Documents.
"ISSUING BANK" has the meaning set forth in Section 2.01(c).
"JPMORGAN" means JPMorgan Chase Bank, a
New York banking corporation.
"JPMORGAN CHASE OFFICE" means the office of the Agent at Xxx Xxxxx
Xxxxxx XX-0, Xxxxxxxxx, Xxx Xxxx, 00000.
15
HUTTIG CREDIT AGREEMENT
"LANDLORD'S WAIVER AND CONSENT" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, in form approved by the Agent in its sole discretion.
"LEASEHOLD PROPERTY" means any leasehold interest of any Borrower or
Guarantor as lessee under any lease of real property.
"LENDERS" means, collectively, each entity identified as "Lender" on
the signature pages hereto and each Person, if any, that shall become a Lender
hereunder pursuant to Section 12.05 other than any Person that ceases to be a
party hereto pursuant to an Assignment and Acceptance.
"LENDING OFFICE" means, for each Lender and for each type of Loan, the
lending office of such Lender (or of an Affiliate of such Lender) designated by
such Lender on Schedule 2.01(a) (or, if applicable, its Assignment and
Acceptance), as the lending office of such Lender for such type of Loan, or such
other office of such Lender (or of an Affiliate of such Lender) as such Lender
may from time to time specify to the Agent and the Borrowers as the office by
which such Lender's Loans of such type are to be made and maintained.
"LETTER OF CREDIT" means any letter of credit issued from time to time
by JPMorgan, in its capacity as Issuing Bank for any Borrower as the account
party.
"LETTER OF CREDIT EXPOSURE" means the maximum amount available to be
drawn under all outstanding Letters of Credit (converted to U.S. Dollars based
on the exchange rate in effect at the time the Letter of Credit Exposure is
determined).
"LETTER OF CREDIT SUBLIMIT" means $10,000,000.
"LEVERAGE RATIO" means, as of any date, the ratio of (a) the aggregate
amount of Funded Indebtedness (including all Loans made hereunder and all
outstanding Subordinated Indebtedness) of the Borrowers and their Subsidiaries
(determined on a consolidated basis without duplication in accordance with GAAP)
as of such date for the period of twelve consecutive months most recently ended
on or prior to such date to (b) EBITDA of the Borrowers and their Subsidiaries
for such period.
"LIEN" means any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on the common law, statute, or contract, and including but not
limited to the security interest or lien arising from a mortgage, encumbrance,
pledge, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Agreement, the Borrowers and their Subsidiaries shall be deemed to be the owner
of any property which they have acquired or hold subject to a conditional sale
agreement, Capitalized Lease or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.
"LOAN TRANCHE" means any portion of the Loans outstanding under the
Notes as Base Rate Loans or any portion of the Loans outstanding under the Notes
as a Eurodollar Loan having a particular Eurodollar Interest Period. Each
Eurodollar Loan outstanding under the Notes having
16
HUTTIG CREDIT AGREEMENT
a different Eurodollar Interest Period shall constitute a separate Loan Tranche,
and all Base Rate Loans shall constitute a single Loan Tranche.
"LOANS" means and includes the Revolving Credit Loans and the
Reimbursement Obligations under Section 2.01(c); and "Loan" means any of the
Loans.
"LOCK BOX" means, a post office box established by the Agent or such
other financial institutions as shall be acceptable to the Agent pursuant to a
Lock Box Agreement with the Borrowers or their Subsidiaries into which Account
Debtors of the Borrowers are directed to remit payments.
"LOCK BOX AGREEMENT" means an agreement pursuant to which the Agent or
another financial institution acceptable to the Agent maintains a post office
box into which Account Debtors of the Borrowers and certain of their
Subsidiaries remit payments of Accounts, and which payments are deposited into a
Controlled Account.
"MATERIAL ADVERSE EFFECT" means: (a) a material adverse effect on the
business, operations or condition (financial or otherwise) of the Borrowers and
their Subsidiaries taken as a whole; (b) a material adverse effect on the
ability of the Borrowers or any Guarantor to perform or comply with any of the
terms and conditions contained herein or in any other Facility Document; (c) a
material adverse effect on the legality, validity, binding effect,
enforceability or admissibility into evidence of any Facility Document, or the
ability of the Agent or the Lenders to enforce any rights or remedies under or
in connection with any Facility Document; or (d) a material adverse effect on
the validity, perfection or priority of any Lien in favor of the Agent and the
Lenders on any of the Collateral.
"MATERIAL INDEBTEDNESS" means (i) Indebtedness (other than the Loans or
Letters of Credit), or (ii) obligations in respect of one or more Interest Rate
Protection Agreements, in the case of (i) and (ii) of any one or more of the
Borrowers or their Subsidiaries in an aggregate principal amount exceeding
$1,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of any Foreign Exchange
Obligation or Interest Rate Protection Agreement at any time shall be the
maximum aggregate amount (giving effect to any netting agreements) that such
Person would be required to pay if such Foreign Exchange Obligation or Interest
Rate Protection Agreement were terminated at such time.
"MATURITY DATE" means August 12, 2005, as such date may be extended in
accordance with Section 2.18.
"MORTGAGEE'S WAIVER AND CONSENT" means, with respect to any owned real
property of the Borrowers or any of their Subsidiaries that is subject to a
mortgage, a letter, certificate or other instrument in writing from the
mortgagee under the related mortgage, in form approved by the Agent in its sole
discretion.
"MULTIEMPLOYER PLAN" means a Plan defined as such in Section 3(37) of
ERISA to which contributions have been made by any Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"NET CASH PAYMENTS" means:
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HUTTIG CREDIT AGREEMENT
(a) with respect to any Casualty Event, the aggregate amount of
proceeds of insurance, condemnation awards and other compensation received by
the Borrowers or any of their Subsidiaries in respect of such Casualty Event net
of (A) reasonable expenses incurred by the Borrowers or any of their
Subsidiaries in connection therewith and (B) contractually required repayments
of Indebtedness to the extent secured by a Permitted Lien on such property and
any income and transfer taxes paid by the Borrowers or any of their Subsidiaries
in respect of such Casualty Event;
(b) with respect to any sale or other disposition of assets, the
aggregate amount of all cash payments received by the Borrowers or any of their
Subsidiaries directly or indirectly in connection with such sale or other
disposition, whether at the time of such sale or disposition or thereafter under
deferred payment arrangements, including all cash payments received in respect
of investments entered into or received in connection with any such sale or
other disposition of assets; PROVIDED that
(i) Net Cash Payments shall be net of (A) the amount of any
legal, title, transfer and recording tax expenses, commissions and
other fees and expenses paid by the Borrowers or any of their
Subsidiaries in connection with such sale or other disposition and (B)
any federal, state and local income or other taxes paid by the
Borrowers or any of their Subsidiaries as a result of such sale or
other disposition; and
(ii) Net Cash Payments shall be net of any repayments by the
Borrowers or any of their Subsidiaries of Indebtedness to the extent
that (I) such Indebtedness is secured by a Permitted Lien on the
property that is the subject of such sale or other disposition and (II)
the transferee of (or holder of such Permitted Lien on) such property
requires that such Indebtedness be repaid as a condition to the
purchase of such property; and
(c) with respect to any sale of debt or equity securities or
any incurrence of Indebtedness, the aggregate amount of all cash
proceeds received by the Borrowers or any of their Subsidiaries
directly or indirectly in connection with such sale or incurrence,
(and, in the case of a sale, whether at the time of such sale or
thereafter under deferred payment arrangements, including all cash
payments received in respect of investments entered into or received in
connection with any such sale), less all reasonable legal,
underwriting, and similar fees and expenses incurred in connection
therewith.
"NEW HAMPSHIRE TRANSFER" means the transactions contemplated on
Schedule 7.01.
"NON-FINANCED CAPITAL EXPENDITURES" means Capital Expenditures paid in
cash and not financed with Indebtedness for borrowed money; PROVIDED that
Capital Expenditures financed with the proceeds of Revolving Credit Loans shall
be deemed to constitute "Non-Financed Capital Expenditures" for purposes of this
Agreement.
"NOTES" means the promissory notes of the Borrowers issued to the
Lenders and evidencing the Loans hereunder; and "Note" means any one of the
Notes. Each Note shall be substantially in the form of Exhibit A.
"OBLIGATIONS" means all obligations of the Borrowers and the Guarantors
to the Lenders and the Agent under this Agreement or any of the other Facility
Documents, including, without limitation, all indebtedness evidenced by the
Notes, all obligations under or in respect of the Letters of Credit and all
Reimbursement Obligations, and all Foreign Exchange Obligations
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HUTTIG CREDIT AGREEMENT
and Interest Rate Protection Obligations of the Borrowers to the Lenders or the
Agent, all Bank Product Obligations, together with all accrued and unpaid
interest (including, without limitation, all interest that, but for the filing
of a petition in, or commencement of a case, proceeding or other action relating
to, bankruptcy, insolvency or reorganization of any Borrower or any of its
Subsidiaries, would have accrued, whether or not a claim is allowed against such
Borrower or Subsidiary for such interest in the related bankruptcy proceeding),
fees, expenses and charges payable by Borrowers or the Guarantors hereunder or
under any of the other Facility Documents.
"OECD" means the Organization for Economic Cooperation and Development.
"OTHER AGENT" has the meaning set forth in the preamble hereto.
"OTHER TAXES" means any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made under any Facility Document or from the execution,
delivery or enforcement of, or otherwise with respect to, any Facility Document.
"PATENTS" has the meaning set forth in the Security and Pledge
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"PERCENT UTILIZATION" means, at any time, the percentage amount
determined by dividing (a) the daily average aggregate principal amount of
Revolving Credit Loans (including Reimbursement Obligations) and Letters of
Credit outstanding during the most recently ended Fiscal Quarter, by (b) the
aggregate Revolving Credit Commitments of the Lenders at such time.
"PERMITTED ACQUISITIONS" has the meaning set forth in Section 7.08.
"PERMITTED LIENS" has the meaning set forth in Section 7.05.
"PERMITTED STOCK REPURCHASE" means a repurchase by Huttig of its
outstanding common stock (a) pursuant to and in accordance with its stock
repurchase program approved by the board of directors of Huttig on August 20,
2001 for a maximum amount of $15,000,000 and as in effect on the Closing Date
(it being understood that the date specified therein for completion of such
purchases may be extended) so long as no Default or Event of Default shall have
occurred and be continuing immediately before or after consummation of such
repurchase or (b) in any other case, so long as: (i) immediately before and
after consummation of such repurchase, no Default or Event of Default shall have
occurred and be continuing, (ii) immediately before and after consummation of
such repurchase, the Borrowers and their Subsidiaries shall have pro forma
Collateral Availability of not less than $35,000,000, a pro forma Fixed Charge
Coverage Ratio of not less than 1.25 to 1.00 and a pro forma Leverage Ratio not
in excess of 3.5 to 1.00 and (iii) if, upon consummation of such repurchase, the
aggregate purchase price paid would exceed $5,000,000 for all repurchases of
Huttig's common stock consummated since the date the most recent certificate was
delivered pursuant to this definition (or, in the case of the initial
$5,000,000, since the Closing Date), then no later than the date on which such
repurchase is to be consummated, the Borrowers and their Subsidiaries shall
submit a certificate of the chief financial officer of Huttig which shall set
forth reasonably detailed calculations demonstrating compliance with the
required pro forma Collateral Availability, Fixed Charge Coverage Ratio and
Leverage Ratio described in the foregoing clause (ii) of this definition;
PROVIDED, HOWEVER, that in no event
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HUTTIG CREDIT AGREEMENT
shall the aggregate purchase price paid for all repurchase pursuant to clauses
(a) and (b) above occurring after the Closing Date exceed $35,000,000.
"PERSON" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"PLAN" means an employee benefit or other plan established or
maintained, or to which contributions have been made, by any Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA or to which Section
412 of the Code applies.
"PRIME RATE" means that the rate of interest from time to time
announced by the Agent at its principal office as its prime commercial lending
rate. The Prime Rate is a reference rate and does not necessarily represent the
lowest or best rate being charged to any customer of the Agent.
"PROHIBITED TRANSACTION" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"PROPERTY" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"REAL PROPERTY ASSET" means, at any time of determination, any fee
ownership or leasehold interest owned by any Borrower or any Subsidiary of any
Borrower in any real property.
"REGISTER" has the meaning specified in Section 12.05(d).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as in effect from time to time.
"REGULATORY CHANGE" means, with respect to the Agent, any Lender or the
Issuing Bank, any adoption of, or change in, after the date of this Agreement,
United States federal, state, municipal or foreign laws or regulations
(including Regulation D) or the adoption or making of, or change in, after such
date, any interpretations, directives, guidelines or requests applying to a
class of banks including such Lender of or under any United States federal,
state, municipal or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"REIMBURSEMENT OBLIGATION" means any obligation of the Borrowers to
reimburse the issuer of a Letter of Credit for any amount paid by such issuer
from time to time pursuant to and under any Letter of Credit.
"RENTALS" means and includes as of the date of any determination
thereof all payments (including as such all payments which the lessee is
obligated to make to the lessor on termination of the lease or surrender of the
property, and all payments, if any, required to be paid by the lessee regardless
of sales volume or gross revenues) payable by the Borrowers or any of their
Subsidiaries, as lessee or sublessee under a lease of real or personal property,
but shall be exclusive of any amounts required to be paid by the Borrowers or
any of their Subsidiaries (whether or not designated as rents or additional
rents) on account of maintenance, repairs, insurance, taxes and similar charges.
20
HUTTIG CREDIT AGREEMENT
"REPORTABLE EVENT" has the same meaning as defined in ERISA.
"REQUIRED LENDERS" means, (i) at any time when more than two Lenders
are party to this Agreement, Lenders having Loans and unused Revolving Credit
Commitments representing at least 66 2/3% of the aggregate amount of all Loans
and unused Revolving Credit Commitments outstanding at such time and (ii) at all
other times, all of the Lenders.
"REVOLVING AVAILABILITY" means, as of any date of determination
thereof, the amount by which (a) the lesser of (i) the Borrowing Base at such
time and (ii) the aggregate amount of the Revolving Credit Commitments at such
time, exceeds (b) the Total Exposure at such time.
"REVOLVING CREDIT COMMITMENT AMOUNT" means, with respect to each
Lender, the commitment of such Lender to make Revolving Credit Loans hereunder,
as such commitment may be (a) reduced or increased from time to time pursuant to
assignments by or to such Lender pursuant to Section 12.05 and (b) reduced from
time to time pursuant to Section 2.10. The initial Revolving Credit Commitment
Amount of each lender is the amount set forth opposite such Lender's name as
such Lender's "Revolving Credit Commitment Amount" on Schedule 2.01(a) hereto,
or in the Assignment and Acceptance pursuant to which such Lender shall have
assumed its Revolving Credit Commitment, as applicable.
"REVOLVING CREDIT COMMITMENT PERCENTAGE" means for each Lender the
percentage determined by dividing such Lender's Revolving Credit Commitment
Amount by the aggregate amount of Revolving Credit Commitments, as such
Revolving Credit Commitments may be reduced from time to time pursuant to
Section 2.10. The initial Revolving Credit Commitment Percentage of each Lender
is as set forth opposite such Lender's name on Schedule 2.01(a) hereto, or in
the Assignment and Acceptance pursuant to which such Lender shall have assumed
its Revolving Credit Commitment, as applicable.
"REVOLVING CREDIT COMMITMENTS" means the commitments of the Lenders to
make Revolving Credit Loans to the Borrowers as in effect from time to time
hereunder. The aggregate amount of the Revolving Credit Commitments shall
initially equal $150,000,000 and may be reduced pursuant to Section 2.10.
"REVOLVING CREDIT LOAN" means a Base Rate Loan or a Eurodollar Loan
made pursuant to Section 2.01.
"REVOLVING CREDIT OBLIGATIONS" means all Obligations of the Borrowers
hereunder in respect of the Revolving Credit Loans and the Revolving Credit
Commitments.
"REVOLVING CREDIT TERMINATION DATE" means the earliest of (a) the
Maturity Date, provided that if such date is not a Banking Day, such date shall
be the next succeeding Banking Day (or, of such next succeeding Banking Day
falls in the next calendar month, the immediately preceding Banking Day), and
(b) the date on which the Revolving Credit Commitments are reduced to zero or
terminated in full pursuant to Section 2.10 or 9.02.
"RUGBY" means The Rugby Group, Limited, an entity organized under the
laws of England, together with its successors and Affiliates.
"SECURITY AND PLEDGE AGREEMENT" means the Security and Pledge
Agreement substantially in the form of Exhibit E, executed and delivered by each
of the Borrowers and
21
HUTTIG CREDIT AGREEMENT
Guarantors on the Effective Date, as such agreement may be amended, restated,
supplemented or otherwise modified from time to time.
"SECURITY DOCUMENTS" means the Security and Pledge Agreement, the
Trademark Security Agreement, and all other instruments or documents delivered
by any Borrower or any Guarantor or any shareholder or other equityholder of a
Borrower or Guarantor pursuant to this Agreement or any of the other Facility
Documents in order to grant to the Agent, on behalf of the Lenders, a Lien on
any property of that Borrower or Guarantor as security for any of the
Obligations of the Borrowers and Guarantors hereunder, as any of the same may be
amended, restated, supplemented or otherwise modified from time to time.
"SETTLEMENT AMOUNT" has the meaning set forth in Section 2.14.
"SETTLEMENT DATE" has the meaning set forth in Section 2.14.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board of Governors of the Federal Reserve to which the Agent
is subject with respect to the Adjusted Eurodollar Rate for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D of the
Board of Governors of the Federal Reserve). Such reserve percentages shall
include those imposed pursuant to such Regulation D. Eurodollar Loans shall be
deemed to constitute eurocurrency funding and to be subject to such reserve
requirements without benefit of or credit for proration, exemptions or offsets
that may be available from time to time to any Lender under such Regulation D or
any comparable regulation. The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Borrowers or
their Subsidiaries incurred after the Effective Date which matures in its
entirety later than the Loans and by its terms (or by the terms of a
subordination agreement) is made subordinate and junior as to exercise of
remedies and in right of payment to the Loans and all other Obligations of the
Borrowers and their Subsidiaries under the Facility Documents on, and is
otherwise subject to, terms and conditions, approved in writing by the Agent.
"SUBSIDIARY" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held by the parent, or (b) that is, as of
such date, otherwise Controlled by the parent or one or more subsidiaries of the
parent or by the parent and one or more subsidiaries of the parent. As used
herein without reference to any "parent", the terms "Subsidiary" and
"Subsidiaries" shall mean a Subsidiary or Subsidiaries, respectively, of the
Borrowers.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, fees, deductions, charges or withholdings imposed by any Governmental
Authority.
22
HUTTIG CREDIT AGREEMENT
"TOTAL EXPOSURE" means, at any time, the sum of the aggregate
outstanding principal amount of Revolving Credit Loans, accrued and unpaid
interest, fees and charges, Letter of Credit Exposure and Reimbursement
Obligations, Foreign Exchange Obligations and Interest Rate Protection
Obligations owing from the Borrowers to the Lenders and the Agent at such time.
"TRADEMARKS" has the meaning set forth in the Security and Pledge
Agreement.
"TRADEMARK SECURITY AGREEMENT" has the meaning set forth in the
Security and Pledge Agreement.
"TRAILING AVERAGE COLLATERAL AVAILABILITY" means, as of any date of
determination thereof, the amount by which (a) the Borrowing Base at such time
exceeds (b) the Total Exposure on a daily average basis over the period of three
months most recently ended on or prior to such date; PROVIDED, that for purposes
of the first such calculation to be made hereunder, Total Exposure shall be
measured over the period commencing on, and including, the Closing Date and
ending on September 30, 2002.
"UNCOLLECTED FUNDS" means all deposits of items which shall be on
deposit in the Collateral Account from time to time during the period from the
date on which such deposits became Available Funds to the beginning of the
second following Banking Day.
"UNCOLLECTED FUNDS COMPENSATION" means the compensation payable to the
Agent pursuant to Section 2.09.
"UNUSED FACILITY AMOUNT" means, at any time of determination, the
difference between (a) the aggregate Revolving Credit Commitments of the Lenders
at such time and (b) the sum of the outstanding principal amount of all Loans
and Letter of Credit Exposure at such time.
"VOTING STOCK" means, with respect to any Person, Capital Stock issued
by such Person the holders of which are ordinarily, the absence of
contingencies, entitled to vote for the election of directors (or Persons
performing similar functions) of such Person, even though the right so to vote
has been suspended by the happening of such a contingency.
"WEEKLY COLLATERAL CERTIFICATE" means a certificate substantially in
the form of Exhibit I, setting forth sales and collection data with respect to
the Accounts.
"WHOLLY-OWNED SUBSIDIARY" means, with respect to any Person, any
corporation, partnership, limited liability company or other entity of which all
of the Voting Stock or other equity interest is at the time of determination
owned directly or indirectly by such Person.
Section 1.02 Accounting Principles. Where the character or amount of
any asset or liability or item of income or expense is required to be
determined, or any consolidation, combination or other accounting computation is
required to be made, for the purposes of this Agreement, the same shall be done
in accordance with GAAP, to the extent applicable, except where such principles
are inconsistent with the requirements of this Agreement. If at any time any
change in GAAP would affect the computation of any financial ratio or
requirement set forth in any Facility Document, and either the Borrowers' Agent
or the Required Lenders shall so request, the Agent, the Lenders and the
Borrowers shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Lenders); PROVIDED THAT, until so amended, (i) such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change
23
HUTTIG CREDIT AGREEMENT
therein and (ii) the Borrowers shall provide to the Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.
Section 1.03 Directly or Indirectly. Where any provision in this
Agreement refers to action to be taken or not to be taken by any Person, such
provision shall be applicable whether the action in question is taken directly
or indirectly by such Person.
Section 1.04 Construction. In the event of any inconsistency between
the covenants contained in the Security Documents and the covenants contained in
this Agreement, the provisions of this Agreement shall govern and be
controlling.
Section 1.05 Joint and Several Obligations; Borrowers' Agent.
(a) All obligations of the Borrowers hereunder shall be joint and
several. Any notice, request, waiver, consent or other action made, given or
taken by any Borrower shall bind all of the Borrowers. In any action or
proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Borrower would otherwise be held
or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its joint and several
liability hereunder, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by any
Borrower, any Lender, the Agent or any other Person, be automatically limited
and reduced to the highest amount that is valid and enforceable and not
subordinated to the claims of other creditors as determined in such action or
proceeding.
(b) Each of the Borrowers hereby authorizes Huttig to act as
agent (the "BORROWERS' AGENT") for the Borrowers, and to execute and deliver on
behalf of any Borrower such notices, requests, waivers, consents, certificates,
and other documents, and to take any and all actions, required or permitted to
be delivered or taken by the Borrowers hereunder. The Borrowers' Agent hereby
designates the financial officers of the Borrowers' Agent identified in the
Authorization Letter (the "DESIGNATED FINANCIAL OFFICERS") to act for and on
behalf of the Borrowers' Agent and each of the Borrowers, and to execute and
deliver on behalf of the Borrowers' Agent and each of the Borrowers such
notices, requests, waivers, consents, certificates, and other documents, and to
take any and all actions, required or permitted to be delivered or taken by the
Borrowers' Agent and each of the Borrowers hereunder. The Borrowers' Agent and
each of the Borrowers hereby agrees that the Agent and the Lenders shall be
entitled to exclusively rely on any instrument, certificate, notice, agreement
or other document that is signed by any of the Designated Financial Officers.
Section 1.06 Times of Day. Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).
ARTICLE 2
THE CREDIT
Section 2.01 The Revolving Credit Loans and Letters of Credit.
24
HUTTIG CREDIT AGREEMENT
(a) Subject to the terms and conditions of this Agreement, each
of the Lenders severally agrees to make Revolving Credit Loans to the Borrowers
from time to time from and including the date hereof to but excluding the
Revolving Credit Termination Date in an aggregate principal amount at any one
time outstanding up to but not exceeding its Revolving Credit Commitment Amount;
PROVIDED that the obligation of each Lender to make Revolving Credit Loans
hereunder is subject to the condition that the Total Exposure (after giving
effect to the funding of such Revolving Credit Loans) shall not exceed the
lesser of the Borrowing Base and the aggregate Revolving Credit Commitments.
(b) Any Lender may request that the Revolving Credit Loans made
by it be evidenced by a promissory note. In such event, the Borrowers shall
issue to such Lender, a Note, dated as of the Effective Date, payable to the
order of such Lender in the aggregate principal amount equal to the Revolving
Credit Commitment Amount of such Lender.
(c) Subject to the provisions of Section 2.13 and the other terms
and conditions of this Agreement, at the request of the Borrowers' Agent, the
Agent, on behalf of the Lenders, shall issue Letters of Credit (in its capacity
as issuer of Letters of Credit, the "ISSUING BANK") from time to time from and
including the date hereof to but excluding the Revolving Credit Termination Date
up to but not exceeding the lesser of (i) the difference between (A) the lesser
of (x) the aggregate amount of all Revolving Credit Commitments and (y) the
Borrowing Base and (B) the Total Exposure immediately prior to the issuance of
such Letter of Credit and (ii) the difference between (A) the Letter of Credit
Sublimit and (B) the aggregate amount of the Letter of Credit Exposure which
exists immediately prior to the issuance of such Letter of Credit.
Section 2.02 Funding of Revolving Credit Loans.
(a) Until such time as the Borrowers shall have established a
Controlled Disbursements Account with the Agent, to request the funding of any
Revolving Credit Loans hereunder, the Borrowers' Agent shall deliver to the
Agent notice in accordance with Section 2.11 setting forth the amount of the
requested Revolving Credit Loans to be funded, the Collateral Availability as
set forth in the most recent Borrowing Base Certificate delivered to Agent,
whether such Revolving Credit Loans are to be Base Rate Loans or Eurodollar
Loans and, if such Revolving Credit Loans are to be Eurodollar Loans, the
respective Eurodollar Interest Period for such Eurodollar Loans. Following
receipt of such notice, the Agent shall, not later than 2:00 p.m. on (i) the
same Banking Day that such notice is given, if such Revolving Credit Loans are
to be Base Rate Loans, or (ii) on the third Banking Day after such notice is
given, if such Revolving Credit Loans are to be Eurodollar Loans, subject to the
conditions of this Agreement, make available to the Borrowers by a credit to an
account of the Borrowers maintained at the Agent the amount of such requested
Revolving Credit Loans. The Revolving Credit Loans shall be deemed to be made by
each Lender and to be outstanding to each Lender under the Note issued to such
Lender as of the date that such credit is made available to the Borrowers
without regard to the settlement procedures between the Agent and the Lenders
pursuant to Section 2.14.
(b) After such time as the Borrowers shall have established a
Controlled Disbursements Account with the Agent, not later than 2:00 p.m. on
each Banking Day, the Agent shall, subject to the conditions of this Agreement
(but without any further written notice required), make available to the
Borrowers by a credit to an account of the Borrowers maintained at the Agent the
proceeds of Base Rate Loans to the extent necessary to pay items to be drawn on
the Controlled Disbursements Account that day after giving effect to all
Available Funds to be deposited to the Collateral Account on that day. All other
Revolving Credit Loans and all requests for the making of Eurodollar Loans, or
for the conversion of Base Rate Loans into
25
HUTTIG CREDIT AGREEMENT
Eurodollar Loans, shall be made upon notice given in accordance with Section
2.11. The Revolving Credit Loans shall be deemed to be made by each Lender and
to be outstanding to each Lender under the Note issued to such Lender as of the
date that such credit is made available to the Borrowers without regard to the
settlement procedures between the Agent and the Lenders pursuant to Section
2.14.
Section 2.03 Principal Repayment of Revolving Credit Loans.
(a) Each Revolving Credit Loan shall mature and be payable in
full on the Revolving Credit Termination Date.
(b) Except to the extent otherwise expressly provided in any
Security Document, the Agent shall, not later than as of 2:00 p.m. on each
Banking Day when any Revolving Credit Loans shall be outstanding, transfer out
of the Collateral Account all moneys remitted to the Agent by Account Debtors of
the Borrowers or by financial institutions at which Controlled Accounts are
maintained, first making payments of the outstanding principal amount of the
Revolving Credit Loans (including all Revolving Credit Loans made or to be made
that day) by a debit to the Collateral Account in an amount equal to the balance
of the Collateral Account after giving effect to all Available Funds deposited
to the Collateral Account on that day and prior to any other transfers from the
Collateral Account. All such payments shall be applied first to the outstanding
principal amount of all Base Rate Loans. Except upon the occurrence and during
the continuance of an Event of Default, no payment of a Eurodollar Loan shall be
made under this Section 2.03(b) on a date other than the last day of a
Eurodollar Interest Period or the Revolving Credit Termination Date. To the
extent that a payment hereunder creates a credit balance under the Revolving
Credit Obligations, such credit balance shall bear interest and Agent shall
credit the Revolving Credit Obligations at a rate per annum equal to the greater
of (x) zero percent (0%) and (y) the Prime Rate minus three percent (3%).
(c) If at any time (i) the Total Exposure exceeds (ii) the
Borrowing Base, then immediately upon demand by the Agent, the Borrowers shall
prepay the Revolving Credit Loans by an amount equal to such excess, and in the
event that the Total Exposure exceeds the Borrowing Base when the aggregate
outstanding balance of the Revolving Loans equals zero, immediately upon demand
by the Agent, the Borrowers shall provide the Agent and the Lenders with Cash
Equivalents as security for the payment of such excess.
Section 2.04 Mandatory Prepayments. In addition to the payments
required under Section 2.03(c), the Borrowers shall make the following mandatory
prepayments of the Loans:
(a) Casualty Events. Within 180 days following the receipt by the
Borrowers or any of their Subsidiaries of the proceeds of insurance,
condemnation award or other compensation in respect of any Casualty Event
affecting any property of the Borrowers or any of their Subsidiaries (or upon
such earlier date as the Borrowers or any of their Subsidiaries, as the case may
be, shall have determined not to repair or replace the property affected by such
Casualty Event), the Borrowers shall prepay the Revolving Credit Loans by an
aggregate amount, if any, equal to 100% of the Net Cash Payments from such
Casualty Event not theretofore applied or committed to be applied to the repair
or replacement of such property (it being understood that (i) if Net Cash
Payments committed to be applied are not in fact applied within 180 days of the
respective Casualty Event, or the Borrowers or any of their Subsidiaries have
not entered into binding contractual agreements as of such 180th day requiring
payment of amounts at least equal to such funds in repair or replacement of the
property affected by the Casualty Event, then such Net Cash Payments, or such
lesser amount that is not required to be paid pursuant to such binding
26
HUTTIG CREDIT AGREEMENT
contractual commitment, shall be applied to the prepayment of the Revolving
Credit Loans as provided in this clause (a) at the expiration of such 180 day
period and (ii) if an Event of Default shall have occurred and be continuing on
the date such Net Cash Payments are received by the Borrowers or any of their
Subsidiaries or at any time during such 180 day period, then the Borrowers shall
prepay the outstanding Loans in an amount equal to 100% of such Net Cash
Payments (or, if any portion of such proceeds shall have been reinvested prior
to the occurrence of such Event of Default, 100% of such remaining amount of Net
Cash Payments not so reinvested) on the later of the date such Net Cash Payments
are received by the Borrowers or any of their Subsidiaries or the date of the
occurrence of such Event of Default), such prepayment to be effected in each
case in the manner and to the extent specified in paragraph (e) of this Section
2.04.
(b) Sale of Equity Securities. Without limiting the obligation of
the Borrowers to obtain the consent of the Lenders in accordance with Section
12.01 with respect to any sale of equity securities not otherwise permitted
hereunder, the Borrowers agree, on or prior to the closing of any sale of equity
securities by the Borrowers or any of their Subsidiaries (other than the
issuance of equity securities to employees in accordance with stock option and
related employee benefit programs), to deliver to the Agent a statement
certified by the chief financial officer of the Borrowers' Agent, in form and
detail reasonably satisfactory to the Agent, of the estimated amount of the Net
Cash Payments of such sale of equity securities that will (on the date of such
sale) be received by the Borrowers or their Subsidiaries, and, upon the date of
such sale of equity securities, the Borrowers shall prepay the Revolving Credit
Loans by an aggregate amount equal to 100% of the Net Cash Payments of such sale
of equity securities received by the Borrowers or their Subsidiaries, such
prepayment to be effected in each case in the manner and to the extent specified
in paragraph (e) of this Section 2.04.
(c) Incurrence of Indebtedness. Without limiting the obligation
of the Borrowers to obtain the consent of the Lenders in accordance with Section
12.01 with respect to the incurrence of any Indebtedness not otherwise permitted
hereunder, the Borrowers agree, on or prior to the closing of any sale of debt
securities or the incurrence of any Indebtedness by the Borrowers or any of
their Subsidiaries (other than purchase money Indebtedness permitted under
Sections 7.11(a), 7.11(b), 7.11(d) and 7.11(f)), to deliver to the Agent a
statement certified by the chief financial officer of the Borrowers' Agent, in
form and detail reasonably satisfactory to the Agent, of the estimated amount of
the Net Cash Payments of such sale of debt securities or incurrence of
Indebtedness that will (on the date of such sale or incurrence) be received by
the Borrowers or their Subsidiaries, and, upon the date of such sale or
incurrence, the Borrowers shall prepay the Revolving Credit Loans by an
aggregate amount equal to 100% of the Net Cash Payments of such sale or
incurrence received by the Borrowers or their Subsidiaries, such prepayment to
be effected in each case in the manner and to the extent specified in paragraph
(e) of this Section 2.04.
(d) Sale of Assets. Without limiting the obligation of the
Borrowers to obtain the consent of the Lenders in accordance with Section 12.01
with respect to any sale or other disposition of assets not otherwise expressly
permitted hereunder, the Borrowers agree, on or prior to the occurrence of any
sale or other disposition of assets by the Borrowers or any of their
Subsidiaries (other than dispositions permitted under Sections 7.01(a) or
7.01(b)), to deliver to the Agent a statement certified by the chief financial
officer of the Borrower's Agent, in form and detail reasonably satisfactory to
the Agent, of the estimated amount of the Net Cash Payments of such sale or
other disposition that will (on the date of such sale or other disposition) be
received by the Borrowers or their Subsidiaries and the Borrowers shall prepay
the Revolving Credit Loans within ten (10) days of the date of such sale or
other disposition, by an aggregate
27
HUTTIG CREDIT AGREEMENT
amount equal to 100% of the portion of such estimated amount of the Net Cash
Payments of such sale or other disposition received by the Borrowers or their
Subsidiaries.
Prepayments of the Loans resulting from any sale or other disposition of assets
shall be effected in each case in the manner and to the extent specified in
paragraph (e) of this Section 2.04.
(e) Application. In the event of any mandatory prepayment
pursuant to this Section 2.04, such prepayment shall be applied, first, to the
payment of accrued interest in respect of outstanding Base Rate Loans, second,
to the principal amount of outstanding Base Rate Loans, third, to accrued
interest in respect of outstanding Eurodollar Loans, fourth, to the principal
amount of outstanding Eurodollar Loans and fifth to all other outstanding
Obligations, PROVIDED, that except upon the occurrence and during the
continuance of an Event of Default, no payment of a Eurodollar Loan shall be
made under this Section 2.04(e) on a date other than the last day of a
Eurodollar Interest Period or the Revolving Credit Termination Date. The
Revolving Credit Commitments shall be automatically and permanently reduced as a
result of any mandatory prepayment made pursuant to Section 2.04(c) or (d) by an
amount corresponding to the amount of such prepayment, except that no reduction
shall occur in connection with a prepayment made (A) as a result of the
incurrence of Indebtedness under Section 7.11(c), (B) as a result of the
incurrence of the first $15,000,000 of Indebtedness under Section 7.11(g), (C)
as a result of the incurrence of up to an additional $20,000,000 of Indebtedness
after the first $15,000,000 of Indebtedness under Section 7.11(g) so long as the
proceeds of such Indebtedness are used to consummate Permitted Stock Repurchases
and (D) as a result of the sale or other disposition of assets under Section
7.01(c) or (d) so long as (x) the aggregate fair market value of the assets
subject to such sale or disposition, when combined with the aggregate fair
market value of all assets sold or otherwise disposed of during the then current
Fiscal Year, does not exceed $30,000,000 and (y) the proceeds from the sale or
disposition of assets with a fair market value which, when combined with the
aggregate fair market value of all assets sold or otherwise disposed of during
the then current Fiscal Year, exceeds $15,000,000 are reinvested by the
Borrowers and their Subsidiaries within 180 days of the receipt of such proceeds
in assets used or useful in the business of the Borrowers and their
Subsidiaries. The Revolving Credit Commitments shall not be subject to permanent
reduction as result of any other mandatory prepayment made pursuant to Section
2.04.
(f) Prepayment Penalties. The Borrower shall not be required to
pay any prepayment premiums or penalties in connection with any mandatory
prepayment pursuant to this Section 2.04, other than payments required to be
paid pursuant to Section 3.05 in connection with any prepayment of any
Eurodollar Loan.
Section 2.05 Interest.
(a) Interest shall accrue on the outstanding and unpaid principal
amount of each Loan for the period from and including the date of such Loan to
but excluding the date such Loan is repaid, at the following rates per year: (i)
for a Loan Tranche which is outstanding as a Base Rate Loan, at a variable rate
per annum equal to the Adjusted Base Rate plus the Applicable Margin; and (ii)
for a Loan Tranche which is outstanding as a Eurodollar Loan, at a fixed rate
during the applicable Eurodollar Interest Period equal to the corresponding
Adjusted Eurodollar Rate plus the Applicable Margin; PROVIDED, HOWEVER, that
after the occurrence and during the continuance of any Event of Default, and
following a written demand of the Agent to the Borrowers at the request of the
Required Lenders, interest shall accrue on all Loans and all other amounts
payable hereunder (including, to the extent permitted by law, interest on
overdue interest) at the Default Rate.
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HUTTIG CREDIT AGREEMENT
(b) Interest on each Eurodollar Loan shall be calculated on the
basis of a year of 360 days for the actual number of days elapsed. Interest on
each Base Rate Loan shall be calculated on the basis of a year of 360 days for
the actual number of days elapsed.
(c) Subject to paragraph (f) below, accrued interest on each Base
Rate Loan shall be due and payable to the Agent for account of each Lender in
arrears on the first Banking Day of each calendar month, regardless of any
payment of the principal thereof.
(d) Subject to paragraph (f) below, accrued interest on each
Eurodollar Loan shall be due and payable to the Agent for account of each Lender
in arrears upon any payment of principal and on each corresponding Eurodollar
Interest Payment Date.
(e) The Agent shall determine the Adjusted Base Rate, the
Adjusted Eurodollar Rate and the Eurodollar Rate and such determination shall be
conclusive absent manifest error. Promptly after the determination of any
interest rate provided for herein or any change therein, the Agent shall notify
the Borrowers and the Lenders thereof.
(f) Notwithstanding the foregoing, (i) interest accrued pursuant
to the proviso to paragraph (a) above shall be payable on demand, (ii) in the
event of any repayment or prepayment of any Loan, accrued interest on the
principal amount repaid or prepaid shall be payable on the date of such
repayment or prepayment and (iii) in the event of any conversion of any
Eurodollar Loan prior to the end of the current Eurodollar Interest Period
therefor, accrued interest on such Loan shall be payable on the effective date
of such conversion.
Section 2.06 Eurodollar Interest Periods. In the case of each Loan
other than a Base Rate Loan, the Borrowers shall select a Eurodollar Interest
Period of any duration in accordance with the definition of Eurodollar Interest
Period in Section 1.01, subject to the following limitations: (a) no Eurodollar
Interest Period shall have a duration of less than one month, and if any such
proposed Eurodollar Interest Period would otherwise be for a shorter period (as
a result of the Revolving Credit Termination Date or otherwise), such Eurodollar
Interest Period shall not be available; and (b) if a Eurodollar Interest Period
would end on a day which is not a Banking Day, such Eurodollar Interest Period
shall be extended to the next Banking Day, unless such next Banking Day would
fall in the next calendar month in which event such Eurodollar Interest Period
shall end on the immediately preceding Banking Day. All elections of a
Eurodollar Interest Period shall be made by the Borrowers' Agent upon three
Banking Days' notice to the Agent in accordance with Section 2.11, and the Agent
shall quote to the Borrowers the actual Eurodollar Rate to take effect for such
Eurodollar Interest Period (based upon the rate quotation described in the
definition of Eurodollar Rate) on the next Banking Day. Notwithstanding anything
to the contrary set forth herein, the Borrowers shall not be permitted to
request any Eurodollar Loans until the Agent has completed its initial
syndication of the credit facilities hereunder.
Section 2.07 Conversions. Except to the extent specified to the Agent
prior to the Effective Date, each Loan shall be a Base Rate Loan unless and
until converted to a Eurodollar Loan in accordance with terms of this Section
2.07. The Borrowers shall have the right to make payments of principal, or to
convert a Loan Tranche from a Base Rate Loan to a Eurodollar Loan or from a
Eurodollar Loan to a Base Rate Loan at any time or from time to time, PROVIDED
that: (a) if the Loan Tranche is outstanding as a Eurodollar Loan, it may be
converted only on the last day of the applicable Eurodollar Interest Period; (b)
if the Loan Tranche is outstanding as a Eurodollar Loan, it shall automatically
convert to a Base Rate Loan on the last day of the applicable Eurodollar
Interest Period, unless the Borrowers' Agent gives notice to the Agent in
29
HUTTIG CREDIT AGREEMENT
accordance with Section 2.11 three (3) Banking Days prior to the last day of the
corresponding Eurodollar Interest Period specifying a new Eurodollar Interest
Period to apply to such Loan Tranche; (c) no Loan Tranche comprising a
Eurodollar Loan may be in a principal amount less than $500,000; (d) there may
be no more than eight (8) Loan Tranches comprising Eurodollar Loans outstanding
at any one time; and (e) no Loan Tranche comprising a Eurodollar Loan may be
created (or continued after the last day of the applicable Eurodollar Interest
Period) while any Default or Event of Default exists and continues.
Section 2.08 Voluntary Prepayments. In addition to repayments made
pursuant to Section 2.03(b), the Borrowers shall have the right to prepay Loans
at any time or from time to time; PROVIDED that: (i) the Borrowers' Agent shall
give the Agent notice of each such prepayment as provided in Section 2.11; and
(ii) the Borrowers shall be responsible for the payment of such amounts as
provided in Section 3.05 with respect to the prepayment of any Eurodollar Loans
prepaid on any date other than the last day of the corresponding Eurodollar
Interest Period. In addition, but subject to the foregoing, as a condition to
giving effect to any termination of the Revolving Credit Commitments pursuant to
Section 2.10, the aggregate principal of all Revolving Credit Loans shall be
fully prepaid, together with interest thereon accrued to the date of such
payment and all amounts payable pursuant to Section 2.13(c) and/or Section 3.05
in connection therewith.
Section 2.09 Uncollected Funds Compensation. Any credit extended by the
Agent to the Borrowers by allowing the Uncollected Funds in the Collateral
Account maintained by the Borrowers at the Agent to be immediately available
funds to the Borrowers shall not be deemed to be Loans hereunder. Uncollected
Funds Compensation to the Agent shall accrue on the amount of the Uncollected
Funds in existence from time to time at a variable rate per annum equal to the
Adjusted Base Rate plus the Applicable Margin for Base Rate Loans for two (2)
full days. Upon making such computation, the Agent is authorized to make a
Revolving Credit Loan to the Borrowers for the amount thereof (or during the
continuance of an Event of Default, debit the Collateral Account) for the
payment thereof to the Agent. The Agent shall notify the Borrowers of the amount
of the Uncollected Funds Compensation for the preceding calendar month in the
next monthly statement rendered by the Agent to the Borrowers.
Section 2.10 Voluntary Termination of Revolving Credit Commitments. The
Borrowers shall have the right to terminate the amount of Revolving Credit
Commitments in whole or in part at any time, to an amount (which may be zero)
not less than the Total Exposure then outstanding PROVIDED that (a) the
Borrowers' Agent shall give notice of such termination to the Agent as PROVIDED
in Section 2.11 and (b) each reduction of the Revolving Credit Commitments shall
be in an amount that is at least equal to $1,000,000 or any greater multiple of
$1,000,000. Any portion of the Revolving Credit Commitments that has been
terminated may not be reinstated.
Section 2.11 Certain Notices. Notices by the Borrowers' Agent to the
Agent of borrowings other than pursuant to Section 2.02(b), notice of conversion
of any Base Rate Loans to Eurodollar Loans pursuant to Section 2.07, and notice
of each prepayment of a Loan pursuant to Section 2.08 (which does not include
repayments pursuant to Section 2.03(b)) or of termination of the Revolving
Credit Commitments pursuant to Section 2.10 shall be irrevocable and shall be
effective only if received by the Agent in writing on a Banking Day and (a) in
the case of Base Rate Loans and prepayments of Base Rate Loans given not later
than 11:00 a.m. on the date of such Base Rate Loan or such prepayment; (b) in
the case of Eurodollar Loans and prepayments of Eurodollar Loans, given not
later than 11:00 a.m. three (3) Banking Days prior to the date of such
Eurodollar Loan or such prepayment and (c) in the case of termination of the
Revolving Credit
30
HUTTIG CREDIT AGREEMENT
Commitments, given not later than 12:00 noon time four Banking Days prior
thereto. Each such notice of borrowing or prepayment shall specify the amount of
the Loans to be borrowed or prepaid and the date of borrowing or prepayment
(which shall be a Banking Day). The Agent shall promptly notify the Lenders of
the contents of each such notice.
Section 2.12 Calculation of Borrowing Base. The Agent shall calculate
from time to time the amount of the Borrowing Base, based upon the most recent
Borrowing Base Certificate, and such amount shall be the "Borrowing Base"
hereunder; PROVIDED, however, that the Agent, in its reasonable discretion, may
on five (5) Banking Days prior written notice to the Borrowers, establish
additional reserves against the Borrowing Base, taking into account, among other
things, but without limitation in any way, increases in receivables dilution as
shown in periodic field examinations.
Section 2.13 Letters of Credit.
(a) Subject to the terms and conditions set forth herein, the
Borrowers' Agent may request the issuance of Letters of Credit for the account
of any of the Borrowers or their Subsidiaries, in a form reasonably acceptable
to the Agent, by delivering to the Agent by electronic or facsimile transmission
(reasonably in advance of the requested date of issuance, amendment, renewal or
extension) a letter of credit application in the form required by the Agent. A
Letter of Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit, the
Borrowers shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the Total Exposure at such
time does not exceed the lesser of (x) the Borrowing Base at such time or (y)
the aggregate Revolving Credit Commitments at such time, and (ii) the Letter of
Credit Exposure at such time does not exceed the Letter of Credit Sublimit at
such time.
(b) Each Letter of Credit shall expire at or prior to the close
of business on the earlier of (i) the date 360 days, in the case of standby
Letters of Credit, or 180 days, in the case of commercial or documentary Letters
of Credit, after the date of the issuance of such Letter of Credit (or, in the
case of any renewal or extension of any standby Letter of Credit, 360 days after
such renewal or extension) PROVIDED that any such standby Letter of Credit may
provide for automatic extensions thereof to a date not later than 360 days
beyond its current expiration date, and (ii) the date that is five (5) Banking
Days prior to the Revolving Credit Termination Date. No Letter of Credit may be
extended beyond the date that is five (5) Banking Days prior to the Revolving
Credit Termination Date.
(c) By the issuance of a Letter of Credit (or an amendment to a
Letter of Credit increasing the amount thereof) and without any further action
on the part of the Agent or the Lenders, the Agent hereby grants to each Lender,
and each Lender hereby acquires from the Agent, a participation in such Letter
of Credit equal to such Lender's Revolving Credit Commitment Percentage of the
aggregate amount available to be drawn under such Letter of Credit. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstances whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrences and
continuance of a Default or Event of Default or reduction or termination of the
aggregate Revolving Credit Commitments. If the Agent shall make any disbursement
in respect of any Letter of Credit, the resulting Reimbursement Obligation
created thereby shall be deemed to be a Revolving Credit Loan from each of the
Lenders in accordance with each Lender's Revolving Credit Commitment Percentage.
31
HUTTIG CREDIT AGREEMENT
The Agent shall notify the Lenders of the creation of any Reimbursement
Obligation within two Banking Days of any disbursement made by the Agent
pursuant to or under any Letter of Credit.
(d) The Borrowers' Reimbursement Obligations with respect to
Letters of Credit shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms of this Agreement under any and
all circumstances whatsoever and irrespective of (i) any lack of validity or
enforceability of any Letter of Credit, or any term or provision therein, (ii)
any draft or other document presented under a Letter of Credit proving to be
forged, fraudulent or invalid in any respect or any statement therein being
untrue or inaccurate in any respect, (iii) payment by the Agent to the
beneficiary under a Letter of Credit against presentation of a draft or other
document that does not strictly comply with the terms of such Letter of Credit,
(iv) the existence of any claim, setoff, defense or other right that any
Borrower or any other Person may at any time have against the beneficiary under
any Letter of Credit, the Agent, or any Lender or any other Person, whether in
connection with this Agreement, any other Facility Document or otherwise; and
(v) any other event or circumstance whatsoever (other than gross negligence or
willful misconduct of the Agent), whether or not similar to any of the
foregoing, that might, but for the provisions of this Section 2.13, constitute a
legal or equitable discharge of the Borrowers' obligations hereunder.
(e) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by the
Agent under or in connection with Letters of Credit issued by it or any related
certificates shall not, in the absence of gross negligence or willful
misconduct, put the Agent under any resulting liability to any Borrower or any
of their Subsidiaries or relieve any Borrower of any of its obligations
hereunder to the Agent or the Lenders.
Section 2.14 Settlement Between Agent and Lenders. The Agent and the
Lenders shall settle on an aggregated and netted basis (the "SETTLEMENT AMOUNT")
on a weekly basis or with such greater frequency as the Agent may determine
(each such date on which such a settlement occurs being a "SETTLEMENT DATE") for
all amounts which shall have become due to and due from the Agent and the
Lenders since the immediately preceding Settlement Date with respect to any
Obligations, other than the Settlement Amount which became due on the
immediately preceding Settlement Date. The Agent shall notify the Lenders by
11:00 A.M. on each Settlement Date of the Settlement Amount which is payable by
the Agent or the Lenders, and the Agent or the Lenders, as the case may be,
shall make payment of the Settlement Amount by an electronic funds transfer not
later than 5:00 P.M. on the Settlement Date. Nothing in this Section 2.14 or the
settlement procedures made pursuant to this Section 2.14 shall be deemed to
change, as between the Borrowers and the Lenders, the amount of the Loans which
are outstanding under the Notes to each of the Lenders or the accrual of
interest due to each of the Lenders on such Loans.
Section 2.15 Fees.
(a) The Borrowers agree to pay to the Agent quarterly after the
date hereof through the Revolving Credit Termination Date and on the Revolving
Credit Termination Date for the account of each of the Lenders a commitment fee
which shall accrue on the daily average Unused Facility Amount for the period
from and including the date hereof through the Revolving Credit Termination
Date. The commitment fee shall be calculated on the basis of a 360 day year for
the actual number of days elapsed at a rate per year equal to the Applicable
Commitment Fee Rate. The commitment fee shall be due and payable in arrears
quarterly on the first Banking Day of each calendar quarter and shall be
computed by Agent. On each such payment date, the Agent
32
HUTTIG CREDIT AGREEMENT
is authorized to make a Revolving Credit Loan to the Borrowers for the amount
thereof (or during the continuance of an Event of Default, debit the Collateral
Account) for the payment thereof to the Lenders. The Agent shall notify the
Borrowers of the amount of the commitment fee for the preceding quarter in the
next monthly statement rendered by the Agent to the Borrowers.
(b) The Borrowers agree to pay, with respect to Letters of Credit
issued hereunder, the following fees quarterly after the date hereof: (i) to the
Agent for the benefit of the Lenders (according to each Lender's Revolving
Credit Commitment Percentage), a letter of credit fee in respect of each standby
Letter of Credit issued hereunder which accrues at a rate equal to (x) the face
amount of such Letter of Credit multiplied by (y) the applicable Eurodollar
Margin, such fees to be calculated on the basis of a 360 day year for actual
number of days elapsed and paid by the Borrowers quarterly in advance on the
first Banking Day of each Fiscal Quarter, (ii) to the Agent for the benefit of
the Lenders (according to each Lender's Revolving Credit Commitment Percentage),
a letter of credit fee in respect of each documentary Letter of Credit issued
hereunder which accrues at a rate equal to (x) the greater of (a) the applicable
Eurodollar Margin less 50 basis points or (b) 100 basis points per annum
multiplied by (y) the face amount of such Letter of Credit, such fees to be
calculated on the basis of a 360 day year for actual number of days elapsed and
paid by the Borrowers quarterly in advance on the first Banking Day of each
calendar quarter, (iii) to the Agent for its own account, a letter of credit
fronting fee payable in respect of each Letter of Credit issued hereunder which
accrues at a rate equal to (x) the face amount of such Letter of Credit
multiplied by (y) twelve and one-half (12.5) basis points per annum, such fees
to be calculated on the basis of a 360 day year for the actual number of days
elapsed and paid by the Borrowers quarterly in advance on the first Banking Day
of each calendar quarter and (iv) to the Agent for its customary processing fees
and expenses charged by the Agent for issuing, amending, modifying or extending
any Letter of Credit. Upon making a computation of the amount of such Letter of
Credit fee, the Agent is authorized to make a Revolving Credit Loan to the
Borrowers for the amount thereof. The Agent shall notify the Borrowers of the
amount of such Letter of Credit fee in the next monthly statement rendered by
the Agent to the Borrowers.
(c) In the event that the Revolving Credit Commitments are
terminated in their entirety by the Borrowers prior to the second anniversary of
the Effective Date, the Borrowers shall pay to the Agent for the account of each
of the Lenders an early termination fee in an amount equal to (i) 1.00% of the
aggregate amount of the Revolving Credit Commitments of the Lenders as in effect
on the Closing Date, if the Revolving Credit Commitments are terminated prior to
the first anniversary of the Effective Date and (ii) 0.50% of the aggregate
amount of the Revolving Credit Commitments of the Lenders as in effect on the
Closing Date, if the Revolving Credit Commitments are terminated on or after the
first anniversary of the Effective Date but prior to the second anniversary of
the Effective Date; PROVIDED, HOWEVER, that no such prepayment fee shall be
payable under this paragraph (c) if the Revolving Credit Commitments are
terminated in connection with a refinancing of the Loans by the Agent or any of
its affiliates.
(d) The Borrowers agree to pay the Agent (for its own account)
such fees payable in such amounts and at the times separately agreed to in
writing between the Borrowers and the Agent.
Section 2.16 Payments Generally. All payments under this Agreement or
the Notes shall be made in United States Dollars in funds which are immediately
available not later than 1:00 p.m. on the relevant dates specified herein at the
JPMorgan Chase Office for the account of each Lender and any payment made after
such time on such due date will be deemed to have been
33
HUTTIG CREDIT AGREEMENT
made on the next succeeding Banking Day. In the event that any payment (other
than with respect to the principal of the Revolving Credit Loans) under this
Agreement becomes due, the Agent, at its discretion without the requirement of
obtaining the consent of or giving prior notice to the Borrowers, may make a
Revolving Credit Loan to the Borrowers for the amount thereof (or during the
continuance of an Event of Default, debiting the Collateral Account for the
payment thereof to the Lenders). The Agent, or any Lender (subject to Section
11.17) for whose account any such payment is to be made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time to any ordinary deposit account of the Borrowers with the Agent or such
Lender, as the case may be, and any Lender so doing shall promptly notify the
Agent. Subject to Section 11.16, the Borrowers shall, at the time of making each
payment under this Agreement or the Notes, specify to the Agent the principal or
other amount payable by the Borrowers under this Agreement or the Notes to which
such payment is to be applied and in the event that it fails to so specify, or
if a Default or Event of Default has occurred and is continuing, the Agent may,
subject to Section 11.16, apply such payment as it may elect in its sole
discretion. If the due date of any payment under this Agreement or the Notes
would otherwise fall on a day which is not a Banking Day, such date shall be
extended to the next succeeding Banking Day and interest shall be payable for
any principal so extended for the period of such extension. Each payment
received by the Agent hereunder or under any Note for the account of a Lender
shall be paid promptly to such Lender, in immediately available funds, for the
account of such Lender's Lending Office.
Section 2.17 Purpose. The Borrowers shall use the proceeds of the Loans
solely (a) to refinance the Indebtedness of the Borrowers listed on Schedule
2.17 hereto, (b) for working capital requirements of the Borrowers and their
Subsidiaries, (c) to finance transaction costs associated with the closing of
the transactions contemplated by the Facility Documents, (d) to support Letters
of Credit up to the Letter of Credit Sublimit, (e) for Permitted Acquisitions,
and (f) for other general corporate purposes (including the Permitted Stock
Repurchases).
Section 2.18 Extension of Revolving Credit Termination Date.
(a) Subject to the other provisions of this Agreement and
provided that no Event of Default has occurred and is continuing, the aggregate
Revolving Credit Commitments shall be effective for an initial period from the
Effective Date to the Maturity Date; PROVIDED that the Maturity Date, and
concomitantly the aggregate Revolving Credit Commitments, may be extended upon
the Borrowers' request for an additional one-year period expiring on the date
that is one year from the then scheduled Maturity Date, PROVIDED FURTHER, that
the Borrower may request only two extensions pursuant to this Section 2.18. The
Borrowers' Agent shall make any such request on behalf of the Borrowers at least
30 days, but no more than 60 days, prior to the then scheduled Maturity Date.
(b) Upon receipt of the Borrowers' request to extend the Maturity
Date, the Agent shall promptly notify each Lender of such request and each
Lender shall notify the Agent, no later than 15 days after such Lender's receipt
of notice, whether such Lender, in the exercise of its sole discretion, will
extend the Maturity Date for an additional one year period. Any Lender which
shall not timely notify the Agent whether it will extend the Maturity Date shall
be deemed to have declined to extend the Maturity Date and its Revolving Credit
Commitment. No Lender shall have any obligation whatsoever to agree to extend
the Maturity Date. Any agreement to extend the Maturity Date by any Lender shall
be irrevocable, except as provided in clause (d) of this Section 2.18.
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HUTTIG CREDIT AGREEMENT
(c) If all Lenders notify the Agent pursuant to clause (b) of
this Section 2.18 of their agreement to extend the Maturity Date, then the Agent
shall so notify each Lender and the Borrowers' Agent, and such extension shall
be effective without other or further action by any party hereto for such
additional one year period.
(d) If Lenders constituting at least the Required Lenders approve
the extension of the then scheduled Maturity Date (such Lenders agreeing to
extend the Maturity Date herein called the "ACCEPTING LENDERS") and if one or
more Lenders shall notify, or be deemed to notify, the Agent pursuant to clause
(b) of this Section 2.18 that they will not extend the then scheduled Maturity
Date (such Lenders herein called the "DECLINING LENDERS"), then (A) the Agent
shall promptly so notify the Borrowers' Agent and the Accepting Lenders, (B) the
Accepting Lenders shall, upon the Borrowers' election to extend the then
scheduled Maturity Date in accordance with clause (i) or (ii) below, extend the
then scheduled Maturity Date, and (C) the Borrowers' Agent shall, pursuant to a
notice delivered to the Agent, the Accepting Lenders and the Declining Lenders,
no later than the tenth (10th) day following the date by which each Lender is
required, pursuant to clause (b) of this Section 2.18 to approve or disapprove
the requested extension of the Maturity Date, either:
(i) elect to extend the Maturity Date and direct
the Declining Lenders to terminate their Revolving Credit
Commitments, which termination shall become effective on the date
that would have been the Maturity Date except for the operation
of this Section 2.18. On the date that would have been the
Maturity Date except for the operation of this Section 2.18, (x)
the Borrowers' Agent shall deliver a notice of the effectiveness
of such termination to the Declining Lenders with a copy to the
Agent and (y) the Borrowers shall pay in full in immediately
available funds all Obligations of the Borrowers owing to the
Declining Lenders, including any amounts required pursuant to
Article 3, and (z) upon the occurrence of the events set forth in
clauses (x) and (y), the Declining Lenders shall each cease to be
a Lender hereunder for all purposes, other than for purposes of
Article 3 and Section 12.03, and shall cease to have any
obligations or any Revolving Credit Commitment hereunder, other
than to the Agent pursuant to Article 11, and the Agent shall
promptly notify the Accepting Lenders and the Borrowers' Agent of
the new Revolving Credit Commitments; or
(ii) elect to extend the Maturity Date and, prior
to or no later than the then scheduled Maturity Date, (A) to
replace one or more of the Declining Lenders with another lender
or lenders that is an Eligible Assignee and otherwise reasonably
acceptable to the Agent (such lenders herein called the
"REPLACEMENT LENDERS") and (B) the Borrowers shall pay in full in
immediately available funds all Obligations of the Borrowers
owing to any Declining Lenders that are not being replaced, as
provided in clause (i) above; PROVIDED that (x) any Replacement
Lender shall purchase, and any Declining Lender shall sell, such
Declining Lender's rights and obligations hereunder without
recourse or expense to, or warranty by, such Declining Lender for
a purchase price equal to the aggregate outstanding principal
amount of the Obligations payable to such Declining Lender plus
any accrued but unpaid interest on such Obligations and accrued
but unpaid fees or other amounts owing in respect of such
Declining Lender's Loans and Revolving Credit Commitments
hereunder, and (y) upon the payment of such amounts referred to
in clause (x) and the execution of an Assignment and Acceptance
by such
35
HUTTIG CREDIT AGREEMENT
Replacement Lender and such Declining Lender, such Replacement
Lender shall constitute a Lender hereunder and such Declining
Lender being so replaced shall no longer constitute a Lender
(other than for purposes of Article 3 and Section 12.03), and
shall no longer have any obligations hereunder, other than to the
Agent pursuant to Article 11; or
(iii) elect to revoke and cancel the extension
request by giving notice of such revocation and cancellation to
the Agent (which shall promptly notify the Lenders thereof) no
later than the tenth (10th) day following the date by which each
Lender is required, pursuant to clause (b) of this Section 2.18,
to approve or disapprove the requested extension of the Maturity
Date, and concomitantly the total Revolving Credit Commitments.
(iv) If the Borrowers' Agent fails to timely
provide the election notice referred to in this clause (d), the
Borrowers shall be deemed to have revoked and cancelled the
extension request in and to have elected not to extend the
Maturity Date.
(e) The Borrowers request for any extension under this Section
2.18 shall be deemed to be a representation and warranty that no Default or
Event of Default then exists or will exist on the proposed effective date for
any extension of the Maturity Date and that all representations and warranties
of the Borrowers and Guarantors contained herein and in each other Facility
Document are true and correct on the date of such request and the proposed
effective date for any extension of the Maturity Date.
Section 2.19 Commitment Increases. (a) At any time and from time to
time, the Borrowers may request an increase in the aggregate Revolving Credit
Commitments, PROVIDED, that (i) the Agent shall consent to any such increase,
(ii) the aggregate Revolving Credit Commitments hereunder at no time shall
exceed $200,000,000, (iii) an increase in the aggregate Revolving Credit
Commitments may only be made when no Default or Event of Default shall have
occurred and be continuing; and (iv) each existing Lender shall be offered an
opportunity to share in any requested increase of the aggregate Revolving Credit
Commitments. In the event that the Borrowers shall desire to increase the
aggregate Revolving Credit Commitments, the Borrowers' Agent shall provide
written notice thereof to the Agent, which notice shall constitute an offer to
each existing Lender to share in the requested increase and shall specify the
amount of the requested increase, the requested effective date of such increase
(the "INCREASE DATE"), and the time period within which each Lender is requested
to respond to such offer. Upon receipt of any such notice, the Agent shall
promptly notify the Lenders and each Lender shall notify the Agent within the
specified period whether or not it agrees to increase its Revolving Credit
Commitment. Any Lender not responding within such time period shall be deemed to
have declined to increase its Revolving Credit Commitment. The Agent shall
notify the Borrowers' Agent of each Lender's response to each request made
hereunder. In the event that any Lender agrees to increase its Revolving Credit
Commitment, the amount of its Revolving Credit Commitment shall be set at a
level agreed to by the Borrowers and such Lender, and the Borrowers, the Agent
and each such Lender shall enter into an amendment to this Agreement setting
forth the amount of such Lender's Revolving Credit Commitment, as so increased
and evidencing such Lender's agreement to increase its Revolving Credit
Commitment. No such amendment shall require the approval or consent of any
Lender whose Revolving Commitment is not being increased.
36
HUTTIG CREDIT AGREEMENT
(b) If requested, the Borrowers shall furnish a new Note to each
Lender that increases its Revolving Credit Commitment hereunder, PROVIDED that
such Lender shall first surrender its existing Notes (which Notes shall be
marked "cancelled") to the Agent for delivery to the Borrowers' Agent. Promptly
after each Increase Date, the Agent shall distribute to the Borrowers' Agent and
the Lenders an amended Schedule 2.01(a) to reflect changes therein resulting
from the increase in the aggregate Revolving Credit Commitments. If and to the
extent any Revolving Credit Loans are outstanding on the Increase Date, the
Agent shall reallocate the outstanding Revolving Credit Loans ratably among the
Lenders after giving effect to such increase so that each Lender's pro rata
share of the then outstanding Revolving Loans is based on the increased
aggregate Revolving Credit Commitments then in effect.
ARTICLE 3
YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs.
(a) The Borrowers shall pay directly to each Lender and the Issuing
Bank, as applicable (each any "AFFECTED PARTY") from time to time on demand
therefor such amounts as such Affected Party may reasonably determine to be
necessary to compensate it for any increased costs which such Affected Party
determines are attributable to its making or maintaining any Eurodollar Loans
under this Agreement or its Note or its obligation to make any such Loans
hereunder or issuing, participating in or maintaining any Letter of Credit, or
to compensate it for any reduction in any amount receivable by such Affected
Party hereunder in respect of any such Loans, obligation to make such Loans or
any Letters of Credit (such increases in costs and reductions in amounts
receivable being herein called "ADDITIONAL COSTS"), resulting from any
Regulatory Change which: (i) changes the basis of taxation of any amounts
payable to such Affected Party under this Agreement or its Note in respect of
any of such Loans or Letters of Credit (other than taxes imposed on the overall
net income of such Affected Party or of its Lending Office for any of such Loans
or Letters of Credit by the jurisdiction in which such Affected Party has its
principal office or such Lending Office); or (ii) imposes or modifies any
reserve, special deposit, deposit insurance or assessment, minimum capital,
capital ratio or similar requirements relating to any extensions of credit or
other assets of, or any deposits with or other liabilities of, such Affected
Party; or (iii) imposes any other condition affecting this Agreement, the
Eurodollar Loans made by such Lender or its Note or the Letters of Credit
issued, participated in or maintained by such Affected Party (or any of such
extensions of credit or liabilities). Each Affected Party will notify the
Borrowers' Agent of any event occurring after the date of this Agreement which
will entitle such Affected Party to compensation pursuant to this Section
3.01(a) as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, PROVIDED that the failure to so notify
the Borrowers' Agent shall not affect the obligations of the Borrowers under
this Section 3.01(a). If any Affected Party requests compensation from the
Borrowers under this Section 3.01(a), or under Section 3.01(c), the Borrowers'
Agent may, by notice to such Affected Party with a copy to the Agent, suspend
the obligation of such Affected Party to make Loans of the type with respect to
which such compensation is requested (in which case the provisions of Section
3.04 shall be applicable).
(b) Without limiting the effect of the foregoing provisions of this
Section 3.01, in the event that, by reason of any Regulatory Change, any
Affected Party either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category of deposits or other
liabilities of such Affected Party which includes deposits by
37
HUTTIG CREDIT AGREEMENT
reference to which the interest rate on Eurodollar Loans is determined as
provided in this Agreement or a category of extensions of credit or other assets
of such Affected Party which includes Eurodollar Loans or (ii) becomes subject
to restrictions on the amount of such a category of liabilities or assets which
it may hold, then, if such Affected Party so elects by notice to the Borrowers'
Agent with a copy to the Agent, the obligation of such Affected Party to make
Loans of such type hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (in which case the provisions of Section 3.04
shall be applicable).
(c) Without limiting the effect of the foregoing provisions of
this Section 3.01 (but without duplication), the Borrowers shall pay directly to
each Affected Party from time to time on demand therefor such amounts as such
Affected Party may determine to be necessary to compensate such Affected Party
for any costs which it determines are attributable to the maintenance by such
Affected Party or its bank holding company or any of its Affiliates, pursuant to
any law or regulation of any jurisdiction or any interpretation, directive,
guideline or request (whether or not having the force of law) of any court or
governmental or monetary authority, whether in effect on the date of this
Agreement or thereafter, of capital in respect of its Loans hereunder or its
obligation to make Loans hereunder or in respect of its issuance, participation
in, or maintenance of Letters of Credit (such compensation to include, without
limitation, an amount equal to any reduction in return on assets or equity of
such Affected Party or its bank holding company or any of its Affiliates to a
level below that which it could have achieved but for such law, regulation,
interpretation, directive or request). Each Affected Party will notify the
Borrowers' Agent if such Affected Party is entitled to compensation pursuant to
this Section 3.01(c) as promptly as practicable after it determines to request
such compensation, PROVIDED that the failure to so notify the Borrowers' Agent
shall not affect the obligations of the Borrowers under this Section 3.01(c).
(d) Determinations and allocations by a Lender or the Issuing
Bank (as applicable) for purposes of this Section 3.01 of the effect of any
Regulatory Change pursuant to subsections (a) or (b), or of the effect of
capital maintained pursuant to subsection (c), on its costs of making or
maintaining Loans or its obligation to make Loans or in respect of the Letters
of Credit or its issuance, participation in, or maintenance of Letters of
Credit, or on amounts receivable by, or the rate of return to, it in respect of
Loans or such obligation or in respect of the Letters of Credit or its issuance,
participation in, or maintenance of Letters of Credit, and of the additional
amounts required to compensate such Lender or the Issuing Bank (as applicable)
under this Section 3.01, shall be conclusive, PROVIDED that such determinations
and allocations are made on a reasonable basis. Each Lender or the Issuing Bank
(as applicable) demanding payment from the Borrowers pursuant to this Section
3.01 shall furnish to the Borrowers at the time of such demand a statement
showing the basis for and the method of calculation of such demand.
Section 3.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if:
(a) the Agent reasonably determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits referred
to in the definition of "Eurodollar Rate" in Section 1.01 are not being provided
in the relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for any type of Eurodollar Loans as PROVIDED in
this Agreement; or
(b) any Lender reasonably determines (which determination shall
be conclusive) and notifies the Agent that the relevant rates of interest
referred to in the definition of "Eurodollar Rate" in Section 1.01 upon the
basis of which the rate of interest for any type of
38
HUTTIG CREDIT AGREEMENT
Eurodollar Loans is to be determined do not adequately cover the cost to such
Lender of making or maintaining such Loans;
then the Agent shall give the Borrowers' Agent and each Lender prompt notice
thereof, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make Loans of such type.
Section 3.03 Illegality. Notwithstanding any other provision in this
Agreement, in the event that it becomes unlawful for any Lender or its Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then such Lender shall promptly notify the Borrowers' Agent thereof (with a copy
to the Agent) and such Lender's obligation to make or maintain Eurodollar Loans
hereunder shall be suspended until such time as such Lender may again make and
maintain such affected Loans (in which case the provisions of Section 3.04 shall
be applicable).
Section 3.04 Certain Base Rate Loans pursuant to Sections 3.01 and
3.03. If the obligations of any Lender to make Loans of a particular type (Loans
of such type being herein called "AFFECTED LOANS" and such type being herein
called the "AFFECTED TYPE") shall be suspended pursuant to Sections 3.01 or
3.03, all Loans which would otherwise be made by such Lender as Loans of the
Affected Type shall be made instead as Base Rate Loans and, if an event referred
to in Section 3.01(b) or 3.03 has occurred and such Lender so requests by notice
to the Borrowers with a copy to the Agent, all Affected Loans of such Lender
then outstanding shall be automatically converted into Base Rate Loans on the
date specified by such Lender in such notice, and, to the extent that Affected
Loans are so made as (or converted into) Base Rate Loans, all payments of
principal which would otherwise be applied to such Lender's Affected Loans shall
be applied instead to its Base Rate Loans.
Section 3.05 Certain Compensation. The Borrowers shall pay to the Agent
for the account of each Lender, upon the request of such Lender through the
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost or expense which such Lender
determines is attributable to:
(a) any payment or conversion of a Eurodollar Loan made by the
Borrowers on a date other than the last day of a Eurodollar Interest Period or
the maturity date, respectively, for such Loan (whether by reason of
acceleration or otherwise); or
(b) any failure by the Borrowers to borrow any Loan to be made by
such Lender on the date specified therefor in the relevant notice under Section
2.11 or to convert any Loan to a Eurodollar Loan or to continue a Eurodollar
Loan on the date specified therefor in the relevant notice under Section 2.11;
or
(c) the failure to make any prepayment of any Eurodollar Loan on
the date specified therefor in the relevant notice under Section 2.11.
Without limiting the foregoing, such compensation shall include an amount equal
to the excess, if any, of (i) the amount of interest which otherwise would have
accrued on the principal amount so paid or converted (in the case of clause (a)
above) or not borrowed, converted or continued (in the case of clause (b) above)
or not prepaid (in the case of clause (c) above), for the period from and
including the date of such payment or failure but excluding the last day of the
Eurodollar Interest Period for such Loan (or, in the case of a failure to
borrow, convert, continue or prepay, to but excluding the last day of the
Eurodollar Interest Period for such Loan which would have
39
HUTTIG CREDIT AGREEMENT
commenced on the date specified therefor in the relevant notice) at the
applicable rate of interest for such Loan provided for herein over (ii) the
amount of interest (as reasonably determined by such Lender) such Lender would
have bid in the London interbank market for Dollar deposits for amounts
comparable to such principal amount and maturities comparable to such period. A
determination of any Lender as to the amounts payable pursuant to this Section
3.05 shall be conclusive, absent manifest error.
Section 3.06 Mitigation Obligations. If any Lender requests
compensation under Section 3.01, then such Lender shall use reasonable efforts
to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the sole judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant
to Section 3.01 in the future and (ii) would not subject such Lender to any
unreimbursed cost or expense and would not otherwise be disadvantageous to such
Lender. The Borrowers hereby agree to pay all reasonable costs and expenses
incurred by any Lender in connection with any such designation or assignment.
Section 3.07 Taxes.
(a) All payments with respect to the Loans to the Agent, the
Issuing Bank or any Lender shall be made free and clear of, and without
deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if the
Borrowers shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased by the amount
necessary so that after making all required deductions (including deductions
applicable to additional sums described in this paragraph) the Agent, the
Issuing Bank or any Lender, as the case may be, receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the Borrowers
shall make such deductions and (iii) the Borrowers shall pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law. In addition, to the extent not paid in accordance with the preceding
sentence, the Borrowers shall pay any Other Taxes to the relevant Governmental
Authority in accordance with applicable law.
(b) The Borrowers shall indemnify the Agent, the Issuing Bank and
each Lender for Indemnified Taxes and Other Taxes paid by such Person, PROVIDED,
HOWEVER, that the Borrowers shall not be obligated to make payment to the Agent,
the Issuing Bank or any Lender in respect of penalties, interest and other
similar liabilities attributable to such Indemnified Taxes or Other Taxes if
such penalties, interest or other similar liabilities are attributable to the
gross negligence or willful misconduct of the Person seeking indemnification.
ARTICLE 4
CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to the Initial Loans. The obligations
of the Lenders to make the Loans constituting the initial borrowings are subject
to the condition precedent that on or before the Effective Date each of the
following documents shall have been delivered to the Agent in form and substance
satisfactory to the Agent and its counsel, and each of the following actions
shall have been performed to the satisfaction of the Agent and its counsel:
40
HUTTIG CREDIT AGREEMENT
(a) The Agent shall have received the Facility Documents
(including this Agreement, the Notes, the Security and Pledge Agreement, the
Trademark Security Agreement and Controlled Account Agreements for each account
(other than the Initial Accounts as defined in the Security and Pledge
Agreement) listed on Schedule III to the Security and Pledge Agreement under the
heading "Deposit Accounts"), duly executed by each of the parties thereto, and
in full force and effect.
(b) The Agent shall have received good standing certificates for
each Borrower and each Guarantor from the Secretaries of State (or the
equivalent thereof) of such Borrower's and Guarantor's jurisdiction of
organization and each other state in which each of them is required to be
qualified to transact business (other than those listed on Schedule 4.01(b)),
each to be dated a recent date prior to the Closing Date and a bring-down good
standing certificate or telephonic confirmation from the appropriate Secretary
of State in each jurisdiction of organization of each Borrower and Guarantor
dated or telephonically received on the Closing Date.
(c) The Agent shall have received a certificate of the Secretary
or Assistant Secretary (or equivalent thereof) of each Borrower and each
Guarantor and dated the Closing Date certifying as to (i) a copy of its
certificate of incorporation, certificate of limited partnership or other
similar organizational document as amended, modified or supplemented to the
Closing Date (which copy shall be certified to be true, correct and complete by
the appropriate Secretary of State as of a recent date prior to the Closing
Date), (ii) the By-Laws, limited partnership agreement or other similar
organizational document of such Person as in effect on the Closing Date, (iii)
the resolutions of such Person's Board of Directors (or other governing body, as
applicable) approving and authorizing the execution, delivery and performance of
all Facility Documents to which such Person is a party and each other document
to be executed or delivered by such Person pursuant to this Agreement and (iv)
the names and true signatures of the incumbent officers of such Person
authorized to sign the Facility Documents and the other documents to be executed
and delivered by such Person under this Agreement.
(d) The Agent shall have received evidence satisfactory to it
that the Borrowers and the Guarantors shall have taken or caused to be taken all
such actions, executed and delivered or caused to be executed and delivered all
such agreements, documents and instruments, and made or caused to be made all
such filings and recordings that may be necessary or, in the opinion of the
Agent, desirable in order to create in favor of the Agent, for the benefit of
the Lenders, a valid and perfected First Priority security interest in the
entire Collateral. Such actions shall include, without limitation, the
following:
(i) delivery to the Lender of all the Security
Documents, duly executed by the applicable Borrower or Guarantor,
together with accurate and complete schedules to all such
Security Documents;
(ii) delivery to the Agent of (A) certificates
(which certificates shall be accompanied by irrevocable undated
stock powers, duly endorsed in blank and otherwise satisfactory
in form and substance to the Agent) representing all capital
stock and other equity interests pledged pursuant to the Security
Documents and (B) all promissory notes or other instruments (duly
endorsed, where appropriate, in a manner satisfactory to the
Agent) evidencing any Collateral;
41
HUTTIG CREDIT AGREEMENT
(iii) delivery to the Agent of (A) the results of a
recent search, by one or more Persons satisfactory to the Agent,
of all effective UCC financing statements and fixture filings and
all judgment and tax lien filings which may have been made with
respect to any Collateral, together with copies of all such
filings disclosed by such search, (B) UCC termination statements
duly executed by all applicable Persons for filing in all
applicable jurisdictions as may be necessary to terminate any
effective UCC financing statements, fixture filings or comparable
filings disclosed in such search (other than any such financing
statements or fixture filings in respect of Liens permitted to
remain outstanding pursuant to the terms of this Agreement), and
(C) UCC financing statements duly authorized and/or executed by
each applicable Borrower and Guarantor with respect to all
Collateral of such party, for filing in all jurisdictions as may
be necessary or, in the opinion of the Agent, desirable to
perfect the security interests created in such Collateral
pursuant to the Security Documents;
(iv) delivery to the Agent of all cover sheets or
other documents or instruments required to be filed in order to
create or perfect Liens in respect of any IP Collateral; and
(v) delivery to the Agent of opinions of counsel
(which counsel shall be reasonably satisfactory to the Agent and
the Lenders) under the local laws of each jurisdiction where the
Borrowers and the Guarantor is organized with respect to the
creation and perfection of the security interests in favor of the
Agent in the Collateral and such other matters governed by the
laws of such jurisdiction regarding such security interests as
the Agent may request, in each case in form and substance
satisfactory to the Agent.
(e) The Borrowers shall have obtained all required environmental
permits, licenses, authorizations and consents that are necessary in connection
with the transactions contemplated by the Facility Documents from the
appropriate Governmental Authorities, and each of the foregoing permits,
licenses, authorizations and consents shall be in full force and effect. The
Borrowers shall have also obtained all other permits, licenses, authorizations
and consents from all other Governmental Authorities and all consents of other
Persons with respect to Material Indebtedness, Liens and agreements, in each
case that are necessary or advisable in connection with the transactions
contemplated by the Facility Documents, and each of the foregoing shall be in
full force and effect.
(f) The Agent shall have received and shall be satisfied with (i)
the certified financial statements referred to in Section 5.05 hereof,
including, without limitation, the audited consolidated financial statements of
the Borrowers for the Fiscal Years of Huttig ended December 31, 1999, 2000 and
2001, (ii) the unaudited consolidated financial statements of Huttig for the
Fiscal Quarter ended March 31, 2002 and the Fiscal Quarter ended June 30, 2002
(or, to the extent such financial statements for the Fiscal Quarter ended June
30, 2002 have not been completed by the Closing Date, drafts thereof with
appropriate footnotes) and (iii) any and all written materials, reports, and/or
management letters prepared by the Borrowers' current independent auditors. All
such financial statements shall consist of at least a balance sheet, income
statement and statement of cash flows in accordance with GAAP.
(g) The Agent shall have received and shall be satisfied with its
review of (i) estimated opening balance sheets for the Borrowers and their
Subsidiaries, prepared in accordance with GAAP, (ii) consolidated monthly
balance sheet projections and profit and loss statements and cash flow
projections for the Borrowers and their Subsidiaries, prepared in accordance
with GAAP, for the 2002 Fiscal Year and the first two Fiscal Quarters of 2003
Fiscal
42
HUTTIG CREDIT AGREEMENT
Year (demonstrating projected financial results for the subsequent 12-month
period), and (iii) consolidated annual balance sheet projections and profit and
loss statements and cash flow projections for the Borrowers and their
Subsidiaries, prepared in accordance with GAAP, for the third and fourth Fiscal
Quarters of 2003 Fiscal Year and for Fiscal Years 2004 and 2005 (demonstrating
projected financial results for the subsequent 12-month period), in each case,
together with the written assumptions on which such projections are based.
(h) The Agent shall have received a certificate of a duly
authorized officer of the Borrowers dated the Effective Date, stating that the
representations and warranties in Article 5 are true and correct on such date
and that no event has occurred and is continuing which constitutes a Default or
Event of Default.
(i) The Agent shall have received (i) a favorable opinion of
Xxxxxxxxxxx and Xxxxxxxx LLP, counsel for the Borrowers, (ii) a favorable
opinion of Hawk, Haynie, Xxxxxx & Chickedantz, LLP, special Indiana counsel to
the Borrowers, and (iii) a favorable opinion of Xxxx X. Xxxxxx, General Counsel
to the Borrowers, in each case, dated the Effective Date, and covering such
matters as the Agent or any Lender may reasonably request.
(j) The Agent shall have received a certificate of a duly
authorized officer of Huttig in the form of Exhibit F, certifying as to the
solvency of the Borrowers and their Subsidiaries after giving effect to the
funding of the initial Loans.
(k) The Agent shall have received insurance certificates in form
reasonably satisfactory to the Agent evidencing casualty, all-risk, product
liability and other insurance of the Borrowers, their Subsidiaries and their
properties and assets having coverages and issued by insurance companies
reasonably satisfactory to the Agent and naming the Agent as a lender's loss
payee and (as appropriate) an additional insured.
(l) The Agent shall have received an initial Borrowing Base
Certificate, remittance, debit and credit reports, and a statement of accounts
in a form reasonably acceptable to the Agent with respect to the Borrowers and
consistent with the requirements of Section 6.09 hereof, dated as of not more
than 30 days prior to the date of the initial Loans.
(m) The Borrowers shall have delivered to the Agent evidence
reasonably satisfactory to the Agent that no material liability to the Borrowers
under any Environmental Law exists with respect to the Leasehold Properties.
(n) The Agent shall be satisfied with its due diligence review of
the Borrowers and their Subsidiaries, including, but not limited to,
satisfactory review by the Agent of the projections of the Borrowers and their
Subsidiaries.
(o) The Agent shall be satisfied with the cash management
arrangements (including domestic lock box arrangements) and management
information systems in place with respect to the Borrowers and their
Subsidiaries and the Agent shall have received counterparts of a Lockbox
Agreements and Controlled Account Agreements with respect to all lockboxes and
accounts that receive the proceeds of Collateral, duly executed by all parties
thereto and such Lockbox Agreements and Controlled Account Agreements shall be
in full force and effect and in form and substance reasonably satisfactory to
the Agent.
(p) The Agent shall have received a duly executed release and
termination, together with proper UCC-3 termination statements in form and
substance satisfactory to the
43
HUTTIG CREDIT AGREEMENT
Agent, evidencing the termination of the Indebtedness set forth on Schedule 2.17
and the release of all Liens securing such Indebtedness; and immediately
following the funding of the initial loans hereunder, the Borrowers shall have
caused to be repaid in full all such outstanding Indebtedness and shall have
caused to be released all liens in favor of the holders of such Indebtedness.
(q) The Agent and the Lenders shall have received all fees and
other amounts due and payable to such Persons at or prior to the Effective Date,
including, to the extent invoiced, reimbursement or payment of all out-of-pocket
expenses required to be reimbursed or paid by the Borrowers hereunder; and
(r) The Agent shall have received copies of all material
contracts and such other documents as the Agent shall have reasonably requested
and the same shall be reasonably satisfactory to each of them.
(s) The Agent shall have received and be satisfied with an
appraisal, performed by a third party appraiser acceptable to the Agent, of the
Borrowers' inventory.
(t) The Borrowers' shall have a minimum Revolving Availability as
of the Effective Date (after giving effect to the funding of all Loans and the
issuance of all Letters of Credit to be funded or issued on the Effective Date)
of not less than $25,000,000.
Section 4.02 Additional Conditions Precedent. The obligations of the
Lenders to make any Loans (including the initial Loans) and the obligation of
the Issuing Bank to issue, amend, renew or extend any Letter of Credit shall be
subject to the further conditions precedent that on the date of such Loan or
Letter of Credit:
(a) The following statements shall be true:
(i) the representations and warranties contained
in Article 5 of this Agreement are true and correct (or, in the
case of the making of any Loan after the initial Loan, true and
correct in all material respects) on and as of the date of such
Loan or Letter of Credit as though made on and as of such date;
and
(ii) No Default or Event of Default has occurred
and is continuing, or would result from such Loan or Letter of
Credit;
(b) The Agent shall have received such approvals, certificates
and other documents as the Agent or any Lender may reasonably request;
(c) At or before the time of making the first Revolving Credit
Loans hereunder and as of the date of each subsequent Revolving Credit Loan
hereunder, the Agent shall determine that the making of such Revolving Credit
Loan will not cause the amounts outstanding hereunder to exceed the Borrowing
Base;
(d) The Borrowers shall have paid to the Agent all accrued fees
and expenses payable to the Agent in connection with this Agreement, including
all reasonable fees and disbursements of legal counsel to the Agent.
44
HUTTIG CREDIT AGREEMENT
Section 4.03 Deemed Representations. Each notice of a Loan and
acceptance by the Borrowers of the proceeds of such Loan and request and
acceptance of a Letter of Credit shall constitute a representation and warranty
that the conditions set forth in Subsection (a) of Section 4.02 are true and
correct as of the date of each such Loan or Letter of Credit. The Agent may from
time to time require certificate(s) of duly authorized officer(s) of the
Borrowers, stating that the representations and warranties in Article 5 are true
and correct on such date as though made on and as of such date and that no event
has occurred and is continuing which constitutes a Default or an Event of
Default.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES
The Borrowers and the Guarantors hereby jointly and severally represent
and warrant, as of the date hereof and as of the date of each Loan, that:
Section 5.01 Incorporation, Good Standing and Due Qualification. Each
of the Borrowers and each of their respective Subsidiaries is an entity which is
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, has the corporate or other equivalent power
and authority to own its assets and to transact the business in which it is now
engaged or proposed to be engaged, and is duly qualified as a foreign
corporation and in good standing under the laws of each other jurisdiction in
which the nature of its business requires such qualification except where the
failure to so qualify could not reasonably be expected to have a Material
Adverse Effect.
Section 5.02 Corporate Power and Authority; No Conflicts. The
execution, delivery and performance of the Facility Documents: (a) have been
duly authorized by all necessary corporate or partnership action by the
Borrowers and the Guarantors party thereto and do not and will not require any
consent or approval of the equityholders of the Borrowers or the Guarantors or
contravene their charters or by-laws or limited partnership agreement; (b) will
not violate any provision of, or require any filing, registration, consent or
approval under, any law, rule, regulation (including, without limitation,
Regulation U), order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to the Borrowers or any of their
Subsidiaries; (c) will not result in a breach of or constitute a default under
or require any consent which has not been obtained under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which the
Borrowers or the Guarantors is a party or by which the properties of the
Borrowers or the Guarantors may be bound or affected; (d) will not result in, or
require, the creation or imposition of any Lien, upon or with respect to any of
the properties now owned or hereafter acquired by the Borrowers or any of their
Subsidiaries, except as provided in the Security Documents; and (e) will not
cause the Borrowers or any Guarantor, as the case may be, to be in default under
any such law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award or any such indenture, agreement, lease or instrument.
Section 5.03 Legally Enforceable Agreements. Each Facility Document is
a legal, valid and binding obligation of the Borrowers and each Guarantor,
enforceable against the Borrowers and each Guarantor party thereto, in
accordance with its terms, except to the extent that enforceability may be
subject to limitations imposed by general principles of equity or applicable
bankruptcy, insolvency and other similar laws affecting creditors' rights
generally.
45
HUTTIG CREDIT AGREEMENT
Section 5.04 Litigation. Except as set forth on Schedule 5.04 hereto,
there are no actions, suits or proceedings pending or, to the knowledge of the
Borrowers, threatened, against or affecting the Borrowers or any of their
Subsidiaries before any court, governmental agency or arbitrator, which could
reasonably be expected to, in any one case or in the aggregate, result in a
Material Adverse Effect.
Section 5.05 Financial Statements. (a) The Borrowers have heretofore
delivered to the Lenders the following financial statements:
(i) the consolidated balance sheets and statements of operations,
shareholders' equity and cash flows of the Borrowers and their
Subsidiaries, as of and for the fiscal years ended December 31,
1999, December 31, 2000, and December 31, 2001, audited and
accompanied by an opinion of the Borrowers' independent public
accountants;
(ii) the unaudited consolidated balance sheet and
statement of operations of the Borrowers and their Subsidiaries,
as of and for the Fiscal Quarter ended March 31, 2002 and the
Fiscal Quarter ended June 30, 2002 (or, to the extent such
financial statements for the Fiscal Quarter ended June 30, 2002
have not been completed by the Closing Date, drafts thereof),
certified by the chief financial officer of Huttig that such
financial statements fairly present the financial condition of
the Borrowers and their Subsidiaries as at such dates and the
results of the operations of the Borrowers and their Subsidiaries
for the period ended on such dates and that all such financial
statements, including the related schedules and notes thereto
have been prepared in all material respects in accordance with
GAAP (subject to normal year-end audit adjustments) applied
consistently throughout the periods involved;
(iii) consolidated monthly balance sheet
projections and profit and loss statements and cash flow
projections for the Borrowers and their Subsidiaries (including
all Foreign Subsidiaries), prepared in accordance with GAAP
(subject to normal year-end audit adjustments and the absence of
footnotes), for the Fiscal Year ended 2002 and the first two
Fiscal Quarters of Fiscal Year 2003 (demonstrating projected
financial results for the subsequent 12-month period), together
with the written assumptions on which such projections are based;
and
(iv) consolidated annual balance sheet projections
and profit and loss statements and cash flow projections for the
Borrowers and their Subsidiaries (including all Foreign
Subsidiaries), prepared in accordance with GAAP (subject to
normal year-end audit adjustments and the absence of footnotes),
for the third and fourth Fiscal Quarters of Fiscal Year 2003 and
for Fiscal Years 2004 and 2005 (demonstrating projected financial
results for the subsequent 12-month period), together with the
written assumptions on which such projections are based.
Such financial statements (except for the projections) present fairly,
in all material respects, the respective consolidated financial position and
results of operations and cash flows of the respective entities as of such
respective dates and for such periods in accordance with GAAP, subject to
year-end audit adjustments and the absence of footnotes in the case of such
unaudited
46
HUTTIG CREDIT AGREEMENT
or pro forma statements. The projections were prepared by the Borrowers in good
faith and were based on assumptions that were reasonable when made.
(b) Since December 31, 2001, there has been no material adverse
change in the business, assets, operations or condition, financial or otherwise,
of the Borrowers and their Subsidiaries, taken as a whole, from that set forth
in the December 31, 2001 financial statements referred to in clause (i) of
paragraph (a) above.
(c) None of the Borrowers or any of their Subsidiaries has on the
date hereof any contingent liabilities, liabilities for taxes, forward or
long-term commitments (other than those entered into in the ordinary course of
business) or unrealized or anticipated losses from any unfavorable commitments
in each case that are material to the Borrowers and their Subsidiaries taken as
a whole, except as referred to or reflected or provided for in the balance
sheets as at the end of their respective fiscal years ended in 2001, referred to
above, or as otherwise permitted pursuant to this Agreement, or as referred to
or reflected or provided for in the financial statements described in this
Section 5.05.
Section 5.06 Ownership and Liens. The Borrowers and their Subsidiaries
have title to, or valid leasehold interests in, all of its properties and
assets, real and personal, including the properties and assets, and leasehold
interests reflected in the financial statements for the period ended June 30,
2002 referred to in Section 5.05 (other than any properties or assets disposed
of in the ordinary course of business), and none of the properties and assets
owned by the Borrowers or any of their Subsidiaries (excluding any of its
leasehold interests) is subject to any Lien, except as for Permitted Liens. The
Security Documents create, as security for the Obligations, valid and
enforceable Liens on all of the Collateral in favor of the Agent, subject to no
other Liens, except for Permitted Liens. Upon the satisfaction of the conditions
precedent set forth in Section 4.01, the filing of the Trademark Security
Agreement in the U.S. Patent and Trademark Office and the filing of the UCC
financing statements in the filing offices identified on Schedule I(D) to the
Security and Pledge Agreement, such Liens on the Collateral shall be
First-Priority Liens, and no further recordings or filings are or will be
required in connection with the creation, perfection or enforcement of such
Liens.
Section 5.07 Existing Indebtedness. None of the Borrowers nor any of
their Subsidiaries owes Indebtedness as of the Effective Date for borrowed money
or under any title retention agreements (including conditional sale contracts
and Capitalized Leases) except as listed on Schedule 5.07 hereto.
Section 5.08 Taxes. The Borrowers and each of their Subsidiaries have
filed all tax returns and other material reports (federal, state and local)
required to be filed and have paid all taxes, assessments and governmental
charges and levies imposed upon the Borrowers or their Subsidiaries or their
respective properties which are due and payable, including interest and
penalties, except for such taxes which are being contested by the Borrowers in
good faith in appropriate proceedings and for which adequate reserves have been
set aside on the books of the Borrowers and their Subsidiaries in accordance
with GAAP.
Section 5.09 ERISA. Except as set forth on Schedule 5.09 hereto (i) the
Borrowers and their Subsidiaries have no Plans; (ii) the Borrowers and their
Subsidiaries are in compliance in all material respects with all applicable
provisions of ERISA; (iii) neither a Reportable Event nor a Prohibited
Transaction has occurred with respect to any Plan; (iv) no notice of intent to
terminate a Plan has been filed nor has any Plan been terminated; (v) no
circumstance exists which constitutes grounds under Section 4042 of ERISA
entitling the PBGC to institute
47
HUTTIG CREDIT AGREEMENT
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings; (vi) none of the Borrowers nor any
ERISA Affiliate has completely or partially withdrawn under Sections 4201 or
4204 of ERISA from a Multiemployer Plan; (vii) the Borrowers and each of their
ERISA Affiliates have met all minimum funding requirements under ERISA with
respect to all of their Plans; and (viii) none of the Borrowers nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA in excess of
$1,000,000.
Section 5.10 Subsidiaries and Affiliates. Set forth on Schedule 5.10 is
a complete and correct list of all Subsidiaries of Huttig as of the date hereof,
together with, for each such Subsidiary, (a) the jurisdiction of organization of
such Subsidiary, (b) each Person holding ownership interests in such Subsidiary
and (c) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule 5.10, (i) each Borrower and its
respective Subsidiaries owns, free and clear of Liens (other than Liens
permitted hereunder), and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Schedule 5.10, (ii)
all of the issued and outstanding capital stock of each such Person organized as
a corporation is validly issued, fully paid and nonassessable and (iii) there
are no outstanding Equity Rights with respect to such Person. As of the
Effective Date, the authorized, issued and outstanding capital stock of the
Borrowers and their Subsidiaries consists of the capital stock described on
Schedule 5.10, all of which is duly and validly issued and outstanding, fully
paid and nonassessable.
Section 5.11 Operation of Business.
(a) The Borrowers and each of their Subsidiaries possesses all
licenses, permits, franchises, Patents, Copyrights, Trademarks and trade names,
or rights thereto, necessary to conduct their business substantially as now
conducted and as presently proposed to be conducted, and none of the Borrowers
nor any of their Subsidiaries is in violation of any rights of others with
respect to any of the foregoing except any such violation that, individually or
in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
(b) As of the date hereof, Schedule 5.11 contains a true,
accurate and complete list of (i) all Real Property Assets, whether owned or
leased, and (ii) all leases, subleases or assignments of leases (together with
all amendments, modifications, supplements, renewals or extensions of any
thereof) affecting each Leasehold Property, regardless of whether such Borrower
or Guarantor is the landlord or tenant (whether directly or as an assignee or
successor in interest) under such lease, sublease or assignment. Each agreement
listed in clause (ii) of the immediately preceding sentence is in full force and
effect and no default has occurred and is continuing thereunder, and each such
agreement constitutes the legal, valid and binding obligation of each applicable
Borrower, enforceable against such Borrower in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
(c) No Collateral (or any portion thereof) is or will be located
at any of the locations indicated on Schedule 5.11 as vacant properties or
properties subleased to a third party.
(d) As of the date hereof, the total assets of Huttig FSC, Inc.
do not exceed $500,000].
48
HUTTIG CREDIT AGREEMENT
Section 5.12 No Default on Outstanding Judgments or Orders. The
Borrowers and each of their Subsidiaries have satisfied all judgments against
them and none of the Borrowers nor any of their Subsidiaries is in default with
respect to any judgment, writ, injunction, decree, rule or regulation of any
court, arbitrator or federal, state, municipal or other governmental authority,
commission, board, bureau, agency or instrumentality, domestic or foreign.
Section 5.13 No Defaults on Other Agreements. None of the Borrowers nor
any of their Subsidiaries is a party to any indenture, loan or credit agreement
or any lease or other agreement or instrument or subject to any charter or
corporate restriction which could reasonably be expected to have a Material
Adverse Effect. None of the Borrowers nor any of their Subsidiaries is in
default in any respect in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any agreement or
instrument material to its business to which it is a party.
Section 5.14 Labor Matters.
(a) Except as set forth on Schedule 5.14 as of the Effective
Date, (i) no employee of any Borrower or any Subsidiary is represented by a
labor union, no labor union has been certified or recognized as a representative
of any such employee, and no Borrower or Subsidiary has any obligation under any
collective bargaining agreement or other agreement with any labor union or any
obligation to recognize or deal with any labor union, and there are no such
contracts or other agreements pertaining to or which determine the terms or
conditions of employment of any employee of any Borrower or Subsidiary thereof;
(ii) there are no pending or threatened representation campaigns, elections or
proceedings; (iii) no Borrower has any knowledge of any strikes, slowdowns or
work stoppages of any kind, or threats thereof, and no such activities occurred
during the 24-month period preceding the date hereof; (iv) no Borrower or
Subsidiary has engaged in, admitted committing or been held to have committed
any unfair labor practice; and (v) no claims have been filed against any
Borrower or Subsidiary by any employees or representatives thereof that could
reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth on Schedule 5.14, each of the Borrowers
and their Subsidiaries has at all times complied in all material respects, and
are in material compliance with, all applicable laws, rules and regulations
respecting employment, wages, hours, compensation, benefits, and payment and
withholding of taxes in connection with employment.
(c) Except as set forth on Schedule 5.14, the Borrowers and their
Subsidiaries have at all times complied in all material respects, and are in
material compliance with, all applicable laws, rules and regulations respecting
occupational health and safety, whether now existing or subsequently amended or
enacted, including, without limitation, the Occupational Safety & Health Act of
1970, 29 U.S.C. Section 651 et seq. and the state analogies thereto, all as
amended or superseded from time to time, and any common law doctrine relating to
worker health and safety.
Section 5.15 Investment Company Act; Holding Company Act. None of the
Borrowers nor any of their Subsidiaries (a) is an "investment company" within
the meaning of, or subject to regulation under, the United States Investment
Company Act of 1940, as amended or (b) a "holding company" within the meaning
of, or subject to regulation under, the Public Utility Holding Company Act of
1935, as amended.
49
HUTTIG CREDIT AGREEMENT
Section 5.16 Environmental Matters. Except as set forth on Schedule
5.16 hereto, to the knowledge of the Borrowers and their Subsidiaries, no real
property currently or previously owned or leased by the Borrowers or any of
their Subsidiaries is in material violation of any Environmental Laws, and no
Hazardous Materials are present on said real property other than Hazardous
Materials used, generated, treated, stored, disposed of or otherwise introduced
in material compliance with all applicable Environmental Laws. Except as set
forth on Schedule 5.16 hereto, none of the Borrowers nor any of their
Subsidiaries has been identified in any litigation, administrative proceedings
or investigation as a responsible party or potentially responsible party for any
liability under any Environmental Laws.
Section 5.17 Regulation U. None of the Borrowers nor any of their
Subsidiaries owns, directly or indirectly any "margin stock" (as defined in
Regulation U of the Board of Governors of the Federal Reserve System, as
supplemented from time to time). The proceeds of the Loans are not being used
for the purpose, whether immediate, incidental or ultimate, of buying or
carrying any "margin stock".
Section 5.18 No Guaranties or Indemnities. Except as set forth on
Schedule 5.07 hereto, none of the Borrowers nor any of their Subsidiaries is
obligated on any Guaranty or any indemnification of any kind for the debts,
liabilities or obligations of any Person, including without limitation any
Affiliate, other than indemnities and hold harmless provisions entered into in
favor of customers, bonding agencies and sureties in the ordinary course of
business.
Section 5.19 Bank Accounts. Schedule 5.19 lists all banks and other
financial institutions at which any Borrower maintains deposits and/or other
accounts as of the Closing Date, and such Schedule correctly identifies the
name, address and telephone number of each depository, the name in which the
account is held, a description of the purpose of the account, and the complete
account number.
Section 5.20 Trade Relations. There exists no actual or, to the
knowledge of the Borrowers and their Subsidiaries, threatened termination,
cancellation or limitation of, or any modification or change in, the business
relationship between any Borrower or any Subsidiary and any customer or any
group of customers whose purchases of goods or services individually or in the
aggregate are material to the business of such Borrower or such Subsidiary, or
with any material supplier, and, to the knowledge of the Borrowers and their
Subsidiaries, there exists no present condition or state of facts or
circumstances which would materially adversely affect the Borrowers or their
Subsidiaries or prevent the Borrowers or their Subsidiaries from conducting
their businesses after the consummation of the transactions contemplated by this
Agreement in substantially the same manner in which such businesses heretofore
have been conducted.
Section 5.21 True and Complete Disclosure. All factual information
(taken as a whole) furnished by or on behalf of the Borrowers and their
Subsidiaries to the Agent or any Lender on or prior to the Effective Date, for
purposes of or in connection with this Agreement or any of the transactions
contemplated hereby is, and all other such factual information hereafter
furnished by or on behalf of the Borrowers and their Subsidiaries to the Agent
or any Lender will be, true and accurate in all material respects on the date as
of which such information is dated or furnished and not incomplete by omitting
to state any fact necessary to make such information (taken as a whole) not
misleading at such time.
50
HUTTIG CREDIT AGREEMENT
ARTICLE 6
AFFIRMATIVE COVENANTS
So long as any of the Loans or Letters of Credit remain outstanding or
any Lender shall have any Revolving Credit Commitment under this Agreement, each
of the Borrowers shall, and shall cause each of its Subsidiaries to:
Section 6.01 Maintenance of Existence. Except as permitted by Section
7.03, preserve and maintain its legal existence and good standing in the
jurisdiction of its organization, and qualify and remain qualified as a foreign
organization in each jurisdiction in which the nature of its business requires
such qualification.
Section 6.02 Conduct of Business. Continue to engage in an efficient
and commercially reasonable manner in a business of the same general type as
conducted by it on the date of this Agreement.
Section 6.03 Maintenance of Properties. Except as permitted by Section
7.01, maintain, keep and preserve all of its properties (tangible and
intangible) necessary or useful in the proper conduct of its business in good
working order and condition, ordinary wear and tear excepted.
Section 6.04 Maintenance of Records; Fiscal Year. Keep adequate records
and books of account, in which complete entries will be made in accordance with
GAAP, reflecting all financial transactions of the Borrowers and their
Subsidiaries. To enable the ready and consistent determination of compliance
with the covenants set forth in Article 8 of this Agreement, each of the
Borrowers shall maintain, and shall cause each of their Subsidiaries (including
each Foreign Subsidiary) to maintain, December 31 of each year as the end of
such Borrower's or such Subsidiary's Fiscal Year.
Section 6.05 Maintenance of Insurance. Maintain insurance with
financially sound and reputable insurance companies or associations in such
amounts and covering such risks as the Agent deems reasonably appropriate. The
Agent will be named "Lender's Loss Payable" and/or "Additional Named Insured,"
as appropriate, on all insurance policies.
Section 6.06 Compliance with Laws; Payment of Taxes.
(a) Comply in all respects with all applicable laws, rules,
regulations and orders (including ERISA and Environmental Laws) except where the
failure to so comply could not reasonably be expected to have a Material Adverse
Effect.
(b) Pay all taxes, assessments and governmental charges imposed
upon it or upon its property before the same become delinquent, except for such
taxes, assessments, and governmental charges which are being contested by the
Borrowers in appropriate proceedings and for which adequate reserves have been
set aside on the books of the Borrowers and their Subsidiaries in accordance
with GAAP.
Section 6.07 Right of Inspection. From time to time during regular
business hours and upon reasonable prior notice (except that no such prior
notice shall be required after the occurrence and during the continuance of any
Default or Event of Default), permit the Agent or any agent or representative
thereof, to examine and make copies and abstracts from the records
51
HUTTIG CREDIT AGREEMENT
and books of account of, and visit the properties of, the Borrowers and any of
their Subsidiaries, and the Borrowers hereby give to the Agent and to any of its
agents or representatives the Borrowers' irrevocable permission to discuss to
the extent necessary the affairs, finances and accounts of the Borrowers and any
of their Subsidiaries with the Borrowers' or their Subsidiaries' respective
officers and directors and the Borrowers' independent accountants.
Section 6.08 Reporting Requirements. Furnish to the Agent (which shall
in turn furnish to each of the Lenders):
(a) As soon as available and in any event within 90 days after
the end of each Fiscal Year of the Borrowers, consolidated and consolidating
balance sheets of the Borrowers and their Subsidiaries as of the end of such
Fiscal Year and consolidated and consolidating statements of income, cash flows
and stockholders' equity of the Borrowers and their Subsidiaries for such Fiscal
Year, all in reasonable detail and all prepared in accordance with GAAP, and as
to the consolidated statements, accompanied by an opinion thereon by Deloitte &
Touche LLP or other independent accountants of national standing selected by the
Borrowers and reasonably acceptable to Agent, which opinion shall not be
qualified by reason of audit limitations imposed by the Borrowers;
(b) As soon as available and in any event within 45 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year of the
Borrowers, consolidated and consolidating balance sheets of the Borrowers and
their Subsidiaries as of the end of such Fiscal Quarter and consolidated and
consolidating statements of income, and cash flows of the Borrowers and their
Subsidiaries for the period commencing at the end of the previous Fiscal Year
and ending with the end of such Fiscal Quarter, all in reasonable detail and
stating in comparative form the respective consolidated figures for the
corresponding date in the current Fiscal Quarter, and all prepared in accordance
with GAAP and certified by the chief financial officer of Huttig (subject to
normal year-end adjustments);
(c) As soon as available and in any event within 15 Banking Days
after the end of each Fiscal Month of the Borrowers, consolidated and
consolidating balance sheets of the Borrowers and their Subsidiaries as of the
end of such Fiscal Month and consolidated and consolidating statements of
income, and cash flows of the Borrowers and their Subsidiaries for the period
commencing at the end of the previous Fiscal Year and ending with the end of
such Fiscal Month, all in reasonable detail and stating in comparative form the
respective consolidated figures for the corresponding date in the current Fiscal
Year, and all prepared in accordance with GAAP and certified by the chief
financial officer of Huttig (subject to year-end adjustments and the absence of
footnotes);
(d) Simultaneously with the delivery of the financial statements
referred to above for each Fiscal Year, each Fiscal Quarter and each Fiscal
Month of the Borrowers, a certificate of the chief financial officer of Huttig
in substantially the form of Exhibit H (a "COMPLIANCE CERTIFICATE") (i)
certifying that to the best of his knowledge no Default or Event of Default has
occurred and is continuing or, if a Default or Event of Default has occurred and
is continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto, (ii) with computations set forth in
reasonable detail satisfactory to the Lenders which demonstrate compliance with
the covenants contained in Article 8, (iii) with a schedule listing all Liens of
which they have knowledge on the assets of the Borrowers and their Subsidiaries
which are in addition to those in favor of the Agent and Lenders or those listed
on Schedule 7.05 hereto and (iv) listing all capital assets acquired by the
Borrowers and their Subsidiaries since the date of the last such Compliance
Certificate with the proceeds of asset sales
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HUTTIG CREDIT AGREEMENT
permitted by Sections 7.01(c) and (d) and constituting reinvestments as
contemplated by Section 2.04(e).
(e) (i) Promptly after the commencement thereof, written notice
of all actions, suits, and proceedings before any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, against any of the Borrowers or any of their Subsidiaries which,
individually or in the aggregate, if determined adversely to the Borrowers or
their Subsidiaries, could reasonably be expected to have a Material Adverse
Effect; and (ii) promptly, written notice of any material development in any
action, suit or proceeding previously disclosed pursuant to clause (i) above or
in Schedule 5.04.
(f) As soon as possible and in any event within three (3) days
after the occurrence of each Default or Event of Default, a written notice
setting forth the details of such Default or Event of Default and the action
which is proposed to be taken by the Borrowers with respect thereto;
(g) Promptly after the receiving thereof, copies of all reports
and notices which the Borrowers or any of their Subsidiaries receives from the
PBGC or the U.S. Department of Labor under ERISA; and as soon as possible and in
any event within 10 days after the Borrowers or any of their Subsidiaries know
or have reason to know that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or that the PBGC or the Borrowers or any of
their Subsidiaries have instituted or will institute proceedings under Title IV
of ERISA to terminate any Plan, the Borrowers will deliver to each of the
Lenders a certificate of the chief financial officer of Huttig setting forth
details as to such Reportable Event or Prohibited Transaction or Plan
termination and the action the Borrowers propose to take with respect thereto;
(h) Not later than 30 days prior to the end of each Fiscal Year,
a forecast of the balance sheet, income statement and statement of cash flows
for the subsequent Fiscal Year of the Borrowers and their Subsidiaries in a form
reasonably acceptable to the Agent and prepared on a monthly basis by management
in accordance with GAAP;
(i) Contemporaneously with the filing, copies of all materials
and reports filed with the Securities and Exchange Commission; and
(j) Such other information respecting the condition or
operations, financial or otherwise, of the Borrowers or any of their
Subsidiaries as the Agent or any Lender may from time to time reasonably
request.
Section 6.09 Special Periodic Reports. Execute and deliver to the
Agent, the following documents compiled as of the last day of the applicable
fiscal period (and the Borrowers acknowledge that the Agent and the Lenders will
rely on such documents in making Loans hereunder):
(a) Monthly (or with such greater frequency as the Agent may
reasonably request), by the fifteenth (15th) Banking Day of the following month
(or by such other date as the Agent may reasonably specify in the event the
Agent requests that such information be provided more frequently):
(i) a declaration or statement of (A) the aging of
Accounts and (B) inventory (identifying Eligible Inventory and
ineligible
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HUTTIG CREDIT AGREEMENT
inventory); all as of the prior month end and certified by the
chief financial officer of Huttig and in form reasonably
acceptable to the Agent; and
(ii) a Borrowing Base Certificate.
(b) Weekly, on Wednesday of each week (as of the immediately
preceding Saturday), a Weekly Collateral Certificate, certified by the chief
financial officer.
(c) At the Agent's reasonable request, and within ten (10) days
of any such request, (i) certified true copies of customer's invoices, or the
equivalent, for all services rendered and goods provided and (ii) a declaration
or statement of the aging of accounts payable and order backlog; and
(d) At the Agent's reasonable request, and within a reasonable
time period, certified true copies of all contracts, security agreements,
mortgages and other documents executed by the customers in connection with all
services rendered and any other information, reports, reconciliations, Account
debtor's addresses or documents the Agent may call upon the Borrowers to submit
from time to time.
The failure by the Agent or the Lenders to request any or all of the foregoing
or the failure of the Borrowers to perform the same shall not affect the
security interest of the Agent or the Lenders in or rights to any of the
Collateral.
Section 6.10 [Intentionally Omitted].
Section 6.11 Field Audits; Inventory Appraisals. Permit the Agent to
conduct field audit examinations of, among other things, the Borrowers' and
their Subsidiaries' assets, liabilities, books, records, billing and collection
processes and management information systems twice each Fiscal Year and
inventory appraisals annually (or, in each case, with such greater frequency as
the Agent may reasonably require); PROVIDED FURTHER that the Borrowers will
permit the Agent to conduct such examinations and appraisal at any time and from
time to time upon the occurrence and during the continuance of a Default. The
Other Agents will have the right, upon request, to participate on an alternating
basis in field audit examinations and inventory appraisals. The Borrowers will
reimburse the Agent for the expense of each field audit examination and
inventory appraisal at the Agent's standard per diem rate per person, plus
actual out-of-pocket expenses. In connection with such field audits, the
Borrowers will permit the Agent to make test verifications of the Accounts with
the Borrowers' and their Subsidiaries' customers.
Section 6.12 Cooperation and Further Assurance. Cooperate with the
Agent and the Lenders to effectuate the intent and purposes of the Facility
Documents. Without limiting the foregoing, the Borrowers agree to execute and
deliver any financing statements or other instruments and do such other acts and
things, as Agent may reasonably deem necessary or advisable to effectuate the
intent and purposes of this Agreement, and shall cause their Subsidiaries to do
likewise.
Section 6.13 Deposits Into Collateral Account. (i) Remit to the Agent
promptly following receipt, and hold in trust for the Agent and the Lenders
until so remitted, any and all moneys received from any source for deposit into
the Collateral Account, including without limitation any proceeds from any
equity investment or extraordinary transaction, and (ii) direct all financial
institutions at which any Controlled Accounts are maintained to remit to the
Agent on a daily basis (or at such other frequency as the Agent, in its
discretion shall specify to the
54
HUTTIG CREDIT AGREEMENT
Borrowers), all collected funds in such Controlled Accounts. At all times from
and after the date hereof, the Borrowers shall take all actions necessary to
maintain, preserve and protect the rights and interests of the Agent with
respect to all cash deposits of the Borrowers and all other proceeds of
Collateral and shall not, without the Agent's prior written consent, open any
new or additional deposit or other bank accounts.
Section 6.14 Lock Box Operation. At all times direct their Account
Debtors to make all payments directly to Lock Boxes or Controlled Accounts under
the control of the Agent or under the control of another financial institution
reasonably acceptable to the Agent that has entered into a Controlled Account
Agreement with the Agent.
Section 6.15 Landlords Waivers. (a) No later than October 12, 2002,
deliver to the Agent a Landlord's Waiver and Consent with respect to Leasehold
Properties at which inventory of the Borrowers and their Subsidiaries is
located, which together with inventory located at owned Real Property Assets,
constitutes, an aggregate inventory value at least equal to 85% of the aggregate
inventory value of all inventory of the Borrowers and their Subsidiaries as of
the Closing Date, and where required by the terms of any related lease, the
consent of the mortgagee, ground lessor or other party; and (b) with respect to
any Leasehold Property acquired after the Closing Date, use best efforts to
deliver to the Agent a Landlord's Waiver and Consent with respect thereto and
where required by the terms of the related leases, the consent of the mortgagee,
ground lessor or other party, together with a copy of all related leases, in
each case, prior to or concurrent with acquiring such Leasehold Property.
Section 6.16 Real Property Financing. Concurrently with the
consummation of any non-recourse mortgage financing permitted by Section
7.11(g), if requested by the Agent, deliver fixture filings, duly authorized
and/or executed by each applicable Borrower and Guarantor with respect to all
Collateral constituting fixtures, for filing in all jurisdictions as may be
necessary or, in the opinion of the Agent, desirable to perfect the security
interests created in such Collateral pursuant to the Security Documents.
Section 6.17 Existing Leases. No later than September 12, 2002, deliver
to the Agent, copies of all leases between any Borrower or its Subsidiaries and
any landlord relating to any Leasehold Property of the Borrowers and their
Subsidiaries as of the Closing Date.
ARTICLE 7
NEGATIVE COVENANTS
So long as any of the Loans or Letters of Credit shall remain
outstanding or any Lender shall have any Revolving Credit Commitment under this
Agreement, each of the Borrowers covenants and agrees that it shall not, and
shall not permit any of its Subsidiaries to, (unless waived in accordance with
the provisions of Section 12.01):
Section 7.01 Sale of Assets. Sell, lease, assign, transfer or otherwise
dispose of any of its now owned or hereafter acquired assets (including, without
limitation, shares of stock and indebtedness of any Subsidiary, receivables and
leasehold interests); except: (a) for inventory disposed of, or other assets
consumed, in the ordinary course of business; (b) any sale, lease, assignment or
other transfer (i) by any Borrower (other than Huttig) of its assets to any
other
55
HUTTIG CREDIT AGREEMENT
Borrower or (ii)(x) by Huttig to any other Borrower in connection with the New
Hampshire Transfer or (y) by Huttig to any other Borrower (excluding the
transactions contemplated by the foregoing clause (x)), PROVIDED that the
aggregate fair market value of all assets subject to such sales, leases,
assignments and transfers made from and after the Closing Date pursuant to this
clause (y), plus the aggregate amount of investments made from and after the
Closing Date pursuant to clause (ii) of Section 7.10(a)(ii), shall not exceed
$10,000,000; (c) any sale or other disposition of assets no longer used or
useful in the conduct of its business; and (d) any other sale, lease,
assignment, or other transfer of assets (other than Accounts and inventory) by
any Borrower or any Subsidiary, PROVIDED that (i) after giving effect to any
sale, lease, assignment or other transfer pursuant to Section 7.01(d), the
Borrowers are in compliance with the covenants set forth in Article 8, (ii) 100%
of the Net Cash Payments received from dispositions under Sections 7.01(c) or
7.01(d) shall be applied to prepay the Revolving Credit Loans in accordance with
Section 2.04(d), and (iii) after giving effect to any sale, lease, assignment or
other transfer pursuant to Section 7.01(d), the aggregate fair market value of
all assets sold, leased, assigned or otherwise transferred pursuant to Section
7.01(d) during the same Fiscal Year does not exceed $15,000,000.
Section 7.02 Stock of Subsidiaries, Etc. Sell or otherwise dispose of
any shares of capital stock or other equity interest of any Subsidiary, except
in connection with a transaction permitted under Section 7.03, or permit any
Subsidiary to issue any additional share of its capital stock or other equity
interests, except (a) directors' qualifying shares, and (b) the issuance of
shares by any Subsidiary to any Borrower, PROVIDED that such Borrower shall
forthwith deliver to the Agent pursuant to the applicable Security Documents the
certificates evidencing such shares of stock or other equity interests,
accompanied by undated stock powers executed in blank, and shall take such other
action as the Agent shall request to create a valid and enforceable First
Priority Lien on such shares pursuant to such Security Documents.
Section 7.03 Mergers, Etc. Merge or consolidate with, or sell, assign,
lease or otherwise dispose of (whether in one transaction or in a series of
transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to, any Person, except that (a) any Wholly-Owned Subsidiary
(other than a Foreign Subsidiary) and any Borrower (other than Huttig) may merge
into any Borrower (so long as such Borrower or a Borrower is the surviving
corporation) and (b) any Borrower may transfer assets to any other Borrower.
Section 7.04 Dividends and Stock Repurchases; Management Fees. Declare
or pay any dividends, purchase, redeem, retire or otherwise acquire for value
any of its capital stock or other equity interests now or hereafter outstanding,
or make any distribution of assets to its equityholders as such whether in cash,
assets or in obligations of the Borrowers or their Subsidiaries, or allocate or
otherwise set apart any sum for the payment of any dividend or distribution on,
or for the purchase, redemption or retirement of any shares of its capital stock
or other equity interests or any warrants, options or other rights to acquire
such, or make any other distribution by reduction of capital or otherwise in
respect of any shares of its capital stock or other equity interests or permit
any Subsidiary to purchase or otherwise acquire for value any stock of the
Borrowers or another Subsidiary, or pay any management fees or any other fees or
expenses pursuant to any management, consulting or other services arrangement to
any of the equityholders of any Borrower or any of its Subsidiaries or other
Affiliates, except that: (a) Huttig may declare and deliver dividends and make
distributions payable solely in common stock of Huttig, (b) Huttig may purchase
or otherwise acquire shares of its capital stock from employees or directors in
connection with the termination of their employment or affiliation with Huttig
and pursuant to employee stock redemption plans, PROVIDED that the aggregate
cash
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HUTTIG CREDIT AGREEMENT
consideration paid by Huttig for all such shares does not exceed $1,500,000
during any Fiscal Year and (c) Huttig may consummate the Permitted Stock
Repurchases.
Section 7.05 Liens. Create, incur, assume or suffer to exist, any Lien,
upon or with respect to any of its properties, now owned or hereafter acquired,
except (the following being called "PERMITTED LIENS"):
(a) Liens in favor of the Agent on behalf of the Lenders securing
the Loans hereunder;
(b) Liens for taxes or assessments or other government charges or
levies if not yet due and payable or, if due and payable, if they are being
contested in good faith by appropriate proceedings and for which appropriate
reserves in accordance with GAAP are maintained;
(c) Liens imposed by law, such as mechanic's, materialmen's,
landlord's, warehousemen's and carrier's Liens, and other similar Liens arising
in the ordinary course of business, securing obligations (other than debt for
borrowed money) incurred in the ordinary course of business which are not past
due for more than 30 days, or which are being contested in good faith by
appropriate proceedings and for which appropriate reserves in accordance with
GAAP have been established;
(d) Liens under workmen's compensation, unemployment insurance,
social security or similar legislation (other than ERISA);
(e) Liens, deposits or pledges to secure the performance of bids,
tenders, contracts (other than contracts for the payment of money), leases
(permitted under the terms of this Agreement), public or statutory obligations,
surety, stay, appeal, indemnity, performance or other similar bonds, or other
similar obligations arising in the ordinary course of business;
(f) Judgment and other similar Liens arising in connection with
court proceedings; PROVIDED that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings and for which appropriate
reserves have been established on the books of the Borrowers and their
Subsidiaries in accordance with GAAP;
(g) Easements, rights-of-way, restrictions and other similar
encumbrances that do not secure obligations for the payment of money and which,
in the aggregate, do not materially interfere with the occupation, use and
enjoyment by the Borrower or any of its Subsidiaries of the property or assets
encumbered thereby in the normal course of its business or materially impair the
value of the property subject thereto;
(h) Liens in existence on the Effective Date and listed on
Schedule 7.05;
(i) Liens on fixed or capital assets (other than real property),
acquired, constructed or improved by any Borrower or any of its Subsidiaries,
PROVIDED that (A) such Liens secure Indebtedness (including Capitalized Leases)
permitted by Section 7.11(b), (B) such Liens and the Indebtedness secured
thereby are incurred prior to or within 90 days after such acquisition or the
completion of such construction or improvement or were in effect at the time the
Borrowers or their Subsidiaries acquired the assets or stock, (C) the
Indebtedness secured thereby does not exceed the cost of acquiring, constructing
or improving such fixed or capital assets,
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HUTTIG CREDIT AGREEMENT
(D) such security interests shall not apply to any other property or assets of
any Borrower or any of its Subsidiaries; and (E) the Borrowers shall be in
compliance with Article 8 of this Agreement after giving effect to such
transactions; or
(j) Liens to secure Indebtedness permitted by Section 7.11(g).
Section 7.06 Transactions with Affiliates. Except as expressly
permitted by this Agreement, take any of the following actions: (a) make any
loan, advance or investment in an Affiliate; (b) transfer, sell, lease, assign
or otherwise dispose of any property to an Affiliate; (c) merge into or
consolidate with an Affiliate, or purchase or acquire property from an
Affiliate; or (d) enter into any other transaction directly or indirectly with
or for the benefit of an Affiliate (including, without limitation, guarantees
and assumptions of obligations of an Affiliate); PROVIDED that the Borrowers may
engage in and continue the transactions with or for the benefit of Affiliates
which are described in Schedule 7.06 so long as the terms of such transactions
are not less favorable to the Borrowers than the terms of a commercially
reasonable, arms' length transaction between non-affiliated parties.
Section 7.07 Hazardous Materials; Indemnification. Use, generate,
treat, store, dispose of or otherwise introduce any Hazardous Materials into or
on any real property owned or leased by any of them and will not cause, suffer,
allow or permit anyone else to do so, except in material compliance with all
applicable Environmental Laws.
Section 7.08 Acquisitions. Make any Acquisition, except that the
Borrowers shall be permitted to make Acquisitions which meet the following
criteria (collectively, "PERMITTED ACQUISITIONS"):
(a) each such Acquisition shall have been approved by the board
of directors (and, if required under applicable law, the equityholders) of the
entity to be acquired; and the entity to be acquired is engaged in, or the
assets or business to be acquired relate to, the same line of business as the
Borrowers (i.e., building products distribution);
(b) if the aggregate purchase price (including cash and non-cash
consideration and all potential payments in respect of Earn-Out Obligations as
estimated by the Borrowers to the reasonable satisfaction of the Agent) for any
single Acquisition is less than $5,000,000, the Borrowers and their Subsidiaries
(including the entity to be acquired) shall have pro forma Collateral
Availability after giving effect to such Acquisition of not less than
$25,000,000;
(c) if the aggregate purchase price (including cash and non-cash
consideration and all potential payments in respect of Earn-Out Obligations as
estimated by the Borrowers to the reasonable satisfaction of the Agent) for any
single Acquisition equals or exceeds $5,000,000, the Borrowers and their
Subsidiaries (including the entity to be acquired) shall have pro forma
Collateral Availability after giving effect to such Acquisition of not less than
$35,000,000 (PROVIDED that, for purposes of determining compliance with such pro
forma Collateral Availability, the valuation of Accounts and inventory of the
entity to be acquired shall be based on audited financial statements or other
financial information reasonably satisfactory to the Agent and shall be subject
to such pro forma adjustments as the Agent shall deem reasonably necessary) and
a pro forma Fixed Charge Coverage Ratio of not less than 1.25 to 1.00 (PROVIDED
that, for purposes of determining compliance with such pro forma Fixed Charge
Coverage Ratio, (i) the actual EBITDA of the acquired entity for the most
recently ended twelve month period, based on audited financial statements or
other financial information satisfactory to the Agent,
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HUTTIG CREDIT AGREEMENT
shall be included and (ii) such ratio shall be subject to such other pro forma
adjustments as the Agent shall deem reasonably necessary);
(d) in connection with each Acquisition, the Borrowers shall
submit to the Agent, at least seven (7) Banking Days prior to the closing of
such Acquisition a certificate of the chief financial officer of Huttig which
shall include the following: (i) reasonably detailed calculations demonstrating
compliance with the required pro forma Collateral Availability or Fixed Charge
Coverage Ratio (as applicable) under clauses (b) or (c) above; and (ii) a
representation and warranty as to compliance with the requirement set forth in
clause (f) below;
(e) no Default or Event of Default shall have occurred and be
continuing under the Facility Documents immediately prior to and after giving
effect to the proposed Acquisition;
(f) the Borrowers and their Subsidiaries, immediately prior to
and after giving effect to any proposed Acquisition, shall be in compliance with
all terms and provisions of the Facility Documents, including, without
limitation, the covenants set forth in Article 8;
(g) each business acquired shall be organized under the laws of
the United States and have its chief executive office and principal place of
business within the United States; and
(h) if the Acquisition is structured as a merger involving any
Borrower, such Borrower shall be the surviving corporation.
PROVIDED, HOWEVER, that (i) the Borrowers and their Subsidiaries shall not
consummate from and after the date hereof, Acquisitions with an aggregate
purchase price in excess of $15,000,000 without the prior written consent of the
Agent and the Lenders and (ii) (x) the Accounts and inventory of any business
acquired by any Borrower or Subsidiary shall not be included in the Borrowing
Base unless such Accounts and inventory, respectively, satisfy all criteria set
forth in the definitions of Eligible Accounts and Eligible Inventory,
respectively, set forth in Section 1.01 and (y) if the aggregate amount of the
Accounts and inventory of any business acquired by any Borrower or Subsidiary
generates more than $5,000,000 of Collateral Availability, such Accounts and
inventory shall not be included in the Borrowing Base until the Agent shall have
conducted, and be satisfied with, a new field audit examination of the type
described in Section 6.11, including a review of such Accounts and inventory.
Section 7.09 Subsidiaries. Create any Subsidiary after the date hereof
unless the Borrowers shall as soon as possible but in any case not later than
fifteen (15) days subsequent to the creation of such Subsidiary, (i) in the case
of a domestic Subsidiary, cause such Subsidiary to (x) execute and deliver to
the Agent a counterpart to this Agreement (and thereby to become a party to this
Agreement, as a "Borrower" or "Guarantor" hereunder), a counterpart to the
Security and Pledge Agreement and such other documentation in such form as the
Lenders may reasonably require, (y) take such other action as shall be necessary
to create and perfect valid and enforceable First Priority Liens in favor of the
Agent on all or substantially all of the assets of such Subsidiary consistent
with the provisions of the applicable Security Documents and (z) deliver proof
of corporate action, incumbency of officers and other documents and opinions as
is consistent with those delivered by each Borrower pursuant to Section 4.01 as
of the Effective Date and (ii) execute and deliver to the Agent such amendments
to the Security and Pledge Agreement or such new pledge agreements and take such
other actions (including delivering the certificates representing such shares of
stock or other equity interests to the Agent) as shall be
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HUTTIG CREDIT AGREEMENT
necessary to create and perfect valid and enforceable First Priority Liens in
favor of the Agent on all of the issued and outstanding stock or other equity
interests of such Subsidiary (or, in the case of a Foreign Subsidiary, such
percentage of its issued and outstanding stock or other equity interests as
contemplated by the Security and Pledge Agreement) and deliver to the Agent such
proof of corporate action, incumbency certificates and opinions of counsel as
are consistent with those delivered under Section 4.01 with respect to those
Subsidiaries whose stock or other equity interests are pledged to the Agent on
the Effective Date, all of the foregoing to be in form and substance reasonably
satisfactory to the Agent.
Section 7.10 Certain Investments. Make after the date of this Agreement
or permit to remain outstanding any loans, advances or investments of any kind
in, or make any distributions of cash or other assets of any kind (other than as
expressly permitted by Section 7.04) to, any other Person, except that (a)(i)
any Borrower (other than Huttig) may make loans to or investments in any other
Borrower, (ii) Huttig may make loans to or investments in any other Borrower,
PROVIDED that the aggregate amount of loans and investments made from and after
the Closing Date pursuant to this clause (ii), plus the aggregate fair market
value of all assets sold, leased, assigned or otherwise transferred from and
after the Closing Date pursuant to Section 7.01(b)(ii)(y), shall not exceed
$10,000,000, (b) the Borrowers may make or permit to remain outstanding
advances, loans and extensions of credit to any director, officer or employee of
the Borrowers or any of their Subsidiaries, if the aggregate outstanding amount
of all such advances, loans and extensions of credit (excluding travel advances
in the ordinary course of business) does not at any time exceed $250,000.
Section 7.11 Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except:
(a) Indebtedness of the Borrowers under this Agreement or the
Notes;
(b) other Indebtedness of the Borrowers (determined on a
consolidated basis without duplication in accordance with GAAP) consisting of
Capitalized Leases and/or secured by Liens permitted under Section 7.05, in an
aggregate principal amount at any time outstanding not in excess of $10,000,000
at any one time outstanding, PROVIDED that the Borrowers shall be in compliance
with Article 8 of this Agreement after giving effect to such transactions;
(c) Subordinated Indebtedness;
(d) Trade debt incurred in the ordinary course of business;
(e) Indebtedness existing on the date hereof which is set forth
on Schedule 7.11 annexed hereto and has been designated on such schedule as
Indebtedness that will remain outstanding following the funding of the initial
Loans;
(f) Indebtedness in respect of Foreign Exchange Obligations and
Interest Rate Protection Obligations owing to the Agent or any of the Lenders;
and
(g) Indebtedness incurred as a non-recourse mortgage financing of
the real property of the Borrowers and their Subsidiaries on terms (including
the amount), and pursuant to documentation, reasonably acceptable to the Agent
and the Required Lenders.
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HUTTIG CREDIT AGREEMENT
Section 7.12 Guaranties, Etc. Except expressly permitted by Section
7.06 assume, enter into or otherwise be or become directly or contingently
responsible or liable under, any Guaranty, except (a) Guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business and (b) Guaranties by any Subsidiary of
Indebtedness of the Borrowers permitted hereunder.
Section 7.13 Other Indebtedness. Purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or other acquisition of,
or make, in respect of any voluntary payment or prepayment of the principal of
or interest on, or other amount owing in respect of, any Indebtedness other than
the Obligations.
Section 7.14 Restrictive Agreements. Enter into, incur or permit to
exist any agreement or other arrangement that prohibits, restricts or imposes
any condition upon (a) the ability of any Borrower or any Subsidiary to create,
incur or permit to exist any Lien upon any of its property or assets in favor of
the Agent or the Lenders, or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its capital stock or to
make or repay loans or advances to the Borrowers or the ability of the
Guarantors to guarantee Indebtedness of the Borrowers; PROVIDED that the
foregoing shall not apply to restrictions and conditions imposed by law or by
this Agreement.
ARTICLE 8
FINANCIAL COVENANTS
So long as any of the Loans or Letters of Credit shall remain
outstanding or any Lender shall have any Revolving Credit Commitment under this
Agreement:
Section 8.01 Minimum Fixed Charge Coverage Ratio. The Borrowers shall
not permit the Fixed Charge Coverage Ratio as of the end of any Fiscal Month to
be less than 1.25 to 1.00 during any time when Collateral Availability is less
than $25,000,000.
Section 8.02 Minimum Revolving Availability. The Borrowers shall not
permit the Revolving Availability at any time to be less than $10,000,000.
ARTICLE 9
EVENTS OF DEFAULT
Section 9.01 Events of Default. The occurrence of any of the following
events shall be an "Event of Default":
(a) The Borrowers shall fail to pay any principal of or interest
on the Loans or any Reimbursement Obligation or any fee or other amount due
hereunder when the same shall become due and payable, whether at the due date
thereof or at a date fixed for prepayment thereof, by acceleration of such due
or prepayment date, or otherwise;
(b) Any representation or warranty made or deemed made by the
Borrowers or any of their Subsidiaries in this Agreement or in any other
Facility Document or
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which is contained in any certificate, document, opinion, financial or other
statement furnished at any time under or in connection with any Facility
Document shall prove to have been incorrect in any material respect on or as of
the date made or deemed made;
(c) The Borrowers or any of their Subsidiaries shall fail to
perform or observe (i) any of the covenants set forth in Sections 6.01, 6.05,
6.07 through 6.09, 6.11, 6.13 or 6.14 or in Articles 7 or 8 or (ii) any term,
covenant or agreement contained in this Agreement (other than those referred to
elsewhere in this Section 9.01) or fail to perform or observe any term, covenant
or agreement on its part to be performed or observed in any other Facility
Document, and, in the case of this clause (ii), such failure shall continue for
15 consecutive days;
(d) Any Borrower or any Subsidiary shall: (i) fail to make any
payment (whether of principal or interest and regardless of amount) in respect
of any Material Indebtedness of the Borrowers or such Subsidiary when due
(whether by scheduled maturity, required prepayment, demand or otherwise); or
(ii) fail to perform or observe any term, covenant or condition on its part to
be performed or observed under any agreement or instrument relating to any such
Material Indebtedness, when required to be performed or observed, if the effect
of such failure to pay, perform or observe is to accelerate the maturity of such
Material Indebtedness (or, after the giving of applicable notice or passage of
time, or both, to permit the acceleration of the maturity of such Material
Indebtedness), or any such Material Indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof;
(e) Any Borrower or any Subsidiary: (i) shall generally not, or
be unable to, or shall admit in writing its inability to, pay its debts as such
debts become due; or (ii) shall make an assignment for the benefit of creditors,
petition or apply to any tribunal for the appointment of a custodian, receiver
or trustee for it or a substantial part of its assets; or (iii) shall commence
any proceeding under any bankruptcy, reorganization, arrangement, readjustment
of debt, dissolution or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; or (iv) shall have had any such petition or
application filed or any such proceeding shall have been commenced, against it,
in which an adjudication or appointment is made or order for relief is entered,
or which petition, application or proceeding remains undismissed for a period of
60 days or more; or (v) by any act or omission shall indicate its consent to,
approval of or acquiescence in any such petition, application or proceeding or
order for relief or the appointment of a custodian, receiver or trustee for all
or any substantial part of its property; or (vi) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for a period
of 60 days or more;
(f) One or more judgments, decrees or orders for the payment of
money in excess of $1,000,000 in the aggregate shall be rendered against any
Borrower or any Subsidiary and such judgments, decrees or orders shall continue
unsatisfied and in effect for a period of 60 consecutive days without being
vacated, discharged, satisfied or stayed or bonded pending appeal;
(g) Any of the following events shall occur or exist with respect
to any Borrower or any ERISA Affiliate: (i) any Prohibited Transaction involving
any Plan; or (ii) any Reportable Event shall occur with respect to any Plan; or
(iii) the filing under Section 4041 of ERISA of a notice of intent to terminate
any Plan or the termination of any Plan; or (iv) any event or circumstance
exists which might constitute grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA for the termination of, or for the
appointment of a trustee to administer, any Plan, or the institution by the PBGC
of any such proceedings; or (v) complete or
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HUTTIG CREDIT AGREEMENT
partial withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan
or the reorganization, insolvency, or termination of any Multiemployer Plan; and
in each case above, such event or condition, together with all other events or
conditions, if any, could subject the Borrower to any tax, penalty, or other
liability to a Plan, Multiemployer Plan, the PBGC, or otherwise (or any
combination thereof) which in the aggregate exceed or may exceed $1,000,000;
(h) A Change of Control shall occur;
(i) The Security Documents shall at any time or for any reason
cease: (i) to create a valid and perfected security interest or lien in and to
the property purported to be subject to the same with the priority contemplated
thereby; or (ii) to be in full force and effect or shall be declared null and
void, or the validity or enforceability thereof shall be contested by any party
thereto or any party thereto shall deny it has any further liability or
obligations to the secured parties thereunder;
(j) Any Facility Document shall at any time or for any reason
cease to be in full force and effect or shall be declared null and void, or the
validity or enforceability thereof shall be contested by any Borrower or any
Subsidiary, or any Borrower or any Subsidiary shall deny it has any further
liability or obligations thereunder;
(k) The Agent shall have reasonably determined that an event or
condition has occurred which has had, or which could reasonably be expected to
have, a Material Adverse Effect; or
(l) Any Borrower or Subsidiary shall (i) withdraw or attempt to
withdraw any funds or other items on deposit in any Lock Box or any Controlled
Account; (ii) direct or attempt to direct any bank at which any Lock Box or
Controlled Account is maintained not to make, or to cease making, transfers of
any funds or other items (x) from a Lock Box to a Controlled Account, or (y)
from a Controlled Account to the Agent or at the direction of the Agent; or
(iii) direct any Account Debtor not to make payments to a Lock Box.
Section 9.02 Remedies. If any Event of Default shall occur and be
continuing, the Agent shall, upon request of the Required Lenders, by a written
notice to the Borrowers: (a) declare the Revolving Credit Commitments to be
terminated, whereupon the same shall forthwith terminate, and (b) declare the
outstanding principal of the Loans, all interest thereon and all other amounts
payable under this Agreement and the other Facility Documents and the Loans to
be forthwith due and payable, whereupon the Loans, all such interest and all
such amounts shall become and be forthwith due and payable, without presentment,
demand, protest or further notice of any kind, all of which are hereby expressly
waived by the Borrowers; PROVIDED that, in the case of an Event of Default
referred to in Section 9.01(e) above, the Revolving Credit Commitments shall be
automatically and immediately terminated without further action of any Person,
and the Loans, all interest thereon and all other amounts payable under this
Agreement and the Notes shall be automatically and immediately due and payable
without notice, presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Borrowers. Further, upon the
occurrence and during the continuance of an Event of Default, the Agent, acting
on behalf of and at the direction of the Required Lenders, may then exercise any
and all rights and remedies available under the Facility Documents or at law or
in equity.
Section 9.03 Application of Funds. After the exercise of remedies
provided for in Section 9.02 (or after the Revolving Credit Loans have become
immediately due and payable,
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whether by acceleration or otherwise) any amounts received on account of the
Obligations shall be applied by the Agent in the following order:
First, to payment of that portion of the Obligations constituting
fees, expenses and indemnities (other than Reimbursement Obligations, Foreign
Exchange Obligations, Interest Rate Protection Obligations and Bank Product
Obligations) payable to the Agent and the Lenders, ratably among them in
proportion to the amounts described in this clause First payable to them;
Second, to payment of that portion of the Obligations
constituting accrued and unpaid interest on the Revolving Credit Loans, ratably
among the Lenders in proportion to the respective amounts described in this
clause Second payable to them;
Third, to payment of that portion of the Obligations constituting
unpaid principal of the Revolving Credit Loans and Letter of Credit Exposure and
Reimbursement Obligations and to cash collateralize the undrawn amounts of
Letters of Credit, ratably among the Lenders in proportion to the respective
amounts described in this clause Third held by them;
Fourth, to payment of that portion of the Obligations
constituting unpaid Foreign Exchange Obligations, Interest Rate Protection
Obligations, Bank Product Obligations and all other Obligations, ratably among
the Lender in proportion to the respective amounts described in this clause
Fourth held by them; and
Last, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrowers or as otherwise required by law.
Amounts used to cash collateralize the aggregate undrawn amount of Letters of
Credit pursuant to clause Third above shall be applied to satisfy drawings under
such Letters of Credit as they occur. If any amount remains on deposit as cash
collateral after all Letters of Credit have either been fully drawn or expired,
such remaining amount shall be applied to the other Obligations, if any, in the
order set forth above.
ARTICLE 10
GUARANTY
Section 10.01 The Guarantee. Each Person who may from time to time
become a Guarantor hereunder, hereby jointly and severally guarantees to each
Lender and the Agent and its respective successors and assigns the prompt
payment in full when due (whether at stated maturity, by acceleration or
otherwise) of the principal of and interest (including, without limitation, all
interest that accrues after the commencement of any case, proceeding or other
action relating to bankruptcy, insolvency or reorganization of any Borrower or
any of its Subsidiaries) on the Loans made by the Lenders to the Borrowers, all
fees and other amounts from time to time owing from the Borrowers to the Lenders
hereunder, all other Obligations of the Borrowers and each of their Subsidiaries
under the Facility Documents and all costs and expenses incurred by the Agent or
the Lenders in the protection or enforcement of any right or remedies under the
guarantee provided in this Article 10 (such obligations being herein
collectively called the "GUARANTEED OBLIGATIONS"). Each Guarantor hereby further
agrees that if any Obligations shall be due and payable (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, such
Guarantor shall promptly pay the same upon
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demand therefor by the Agent or the Lenders, without any further demand or
notice whatsoever, and that in the case of any extension of time of payment or
renewal of any of the Guaranteed Obligations, the same will be promptly paid in
full when due (whether at extended maturity, by acceleration or otherwise) in
accordance with the terms of such extension or renewal. This guarantee is a
guarantee of payment and not collection and each Guarantor hereby waives, to the
extent permitted by law, any right to require that any action on or in respect
of any Guaranteed Obligations be brought against any Borrower or any other
Person or that resort be had to any direct or indirect security for the
Guaranteed Obligations or any other remedy.
Section 10.02 Obligations Unconditional. The obligations of each
Guarantor under Section 10.01 are absolute and unconditional irrespective of the
value, genuineness, validity, regularity or enforceability of this Agreement,
the other Facility Documents or any other agreement or instrument referred to
herein or therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Guaranteed Obligations, and, to the
fullest extent permitted by applicable law, irrespective of any other
circumstance whatsoever that might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor, it being the intent of this
Section 10.02 that the obligations of each Guarantor hereunder shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, it is agreed that the occurrence of any one or more
of the following shall not, to the extent permitted by applicable law, alter or
impair the liability of each Guarantor and each other Guarantor under this
Article 10 which shall remain absolute and unconditional as described above:
(a) at any time or from time to time, without notice to such
Guarantor, the time for any performance of or compliance with any of the
Guaranteed Obligations shall be extended, or such performance or compliance
shall be waived;
(b) any of the acts mentioned in any of the provisions hereof or
of the other Facility Documents or any other agreement or instrument referred to
herein or therein shall be done or omitted;
(c) the maturity of any of the Guaranteed Obligations shall be
accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right hereunder or under the
other Facility Documents or any other agreement or instrument referred to herein
or therein shall be waived or any other guarantee of any of the Guaranteed
Obligations or any security therefor shall be released or exchanged in whole or
in part or otherwise dealt with; or
(d) any lien or security interest granted to, or in favor of, the
Agent or the Lenders as security for any of the Guaranteed Obligations shall
fail to be perfected.
Each Guarantor hereby expressly waives, to the extent permitted by applicable
law, diligence, presentment, demand of payment, protest and all notices
whatsoever, and any requirement that the Agent or the Lenders exhaust any right,
power or remedy or proceed against the Borrowers hereunder or under the other
Facility Documents or any other agreement or instrument referred to herein or
therein, or against any other Person under other guarantee of, or security for,
any of the Guaranteed Obligations.
Section 10.03 Reinstatement. The obligations of each Guarantor under
this Article 10 shall be automatically reinstated if and to the extent that for
any reason any payment in respect of the Guaranteed Obligations is rescinded or
must be otherwise restored by any holder of
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HUTTIG CREDIT AGREEMENT
any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise, and each Guarantor agrees that it
will indemnify the Agent and each Lender on demand for all reasonable costs and
expenses (including reasonable fees and expenses of counsel) incurred by the
Agent or any Lender in connection with such rescission or restoration, including
any such costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or similar
payment under any bankruptcy, insolvency or similar law.
Section 10.04 Subrogation; Subordination. Unless and until all of the
Loans have been repaid in full and the Revolving Credit Commitments have been
irrevocably terminated, (i) no Guarantor shall have any rights of subrogation,
whether arising by contract or operation of law (including, without limitation,
any such right arising under the Federal Bankruptcy Code of 1978, as amended) or
otherwise by reason of any payment by it pursuant to the provisions of this
Article 10; (ii) no Guarantor will claim any setoff, recoupment or counterclaim
against any Borrower or other Guarantor in respect of any liability of such
Person to such Guarantor; and (iii) each Guarantor subordinates the payment of
any amounts due with respect to any indebtedness of any Borrower or other
Guarantor now or hereafter owed to such Guarantor in right of payment and
exercise of remedies the prior payment in full of all of the Obligations.
Section 10.05 Remedies. Each Guarantor agrees that, as between such
Guarantor and the Lenders, the obligations of the Borrowers hereunder may be
declared to be forthwith due and payable as provided in Section 9.01 hereof (and
shall be deemed to have become automatically due and payable in the
circumstances provided in Section 9.01) for purposes of Section 10.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrowers and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrowers) shall forthwith
become due and payable by such Guarantor for purposes of Section 10.01.
Section 10.06 Instrument for the Payment of Money. Each Guarantor
hereby acknowledges that the guarantee in this Article 10 constitutes an
instrument for the payment of money, and consents and agrees that the Agent and
the Lenders, in the event of a dispute by any Guarantor in the payment of any
moneys due hereunder, shall have the right to summary judgment or such other
expedited procedure as may be available for a suit on a note or other instrument
for the payment of money.
Section 10.07 Continuing Guarantee. The guarantee in this Article 10 is
a continuing guarantee, and shall apply to all Guaranteed Obligations whenever
arising.
Section 10.08 General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Guarantor under Section 10.01
would otherwise, taking into account the provisions of Section 10.08, be held or
determined to be void, invalid or unenforceable, or subordinated to the claims
of any other creditors, on account of the amount of its liability under Section
10.01, then, notwithstanding any other provision hereof to the contrary, the
amount of such liability shall, without any further action by any Guarantor, any
Lender, the Agent or any other Person, be automatically limited and reduced to
the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.
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ARTICLE 11
RELATIONS AMONG AGENT AND LENDERS
Section 11.01 Appointment, Powers and Immunities of Agent. Each Lender
hereby irrevocably (but subject to removal by the Required Lenders pursuant to
Section 11.09) appoints and authorizes the Agent to act as its agent hereunder
and under any other Facility Document with such powers as are specifically
delegated to the Agent by the terms of this Agreement and any other Facility
Document, together with such other powers as are reasonably incidental thereto.
The Agent shall have no duties or responsibilities except those expressly set
forth in this Agreement and any other Facility Document, and shall not by reason
of this Agreement be a trustee or fiduciary for any Lender. The Agent shall not
be responsible to the Lenders for any recitals, statements, representations or
warranties made by the Borrowers or any officer or official of the Borrowers or
any other Person contained in this Agreement or any other Facility Document, or
in any certificate or other document or instrument referred to or provided for
in, or received by any of them under or in connection with, this Agreement or
any other Facility Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Facility Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any collateral
security for the Loans, or for any failure by the Borrowers to perform any of
their obligations hereunder or thereunder. The Agent may employ agents and
attorneys-in-fact and shall not be responsible for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it with reasonable care.
Neither the Agent nor any of its directors, officers, employees or agents shall
be liable or responsible for any action taken or omitted to be taken by it or
them hereunder or under any other Facility Document or in connection herewith or
therewith, except for its or their own gross negligence or willful misconduct.
Section 11.02 Reliance by Agent. The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram, telecopier or cable) believed by it to be genuine
and correct and to have been signed or sent by or on behalf of the proper Person
or Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the Agent. The Agent may deem and
treat each Lender as the holder of the Loans made by it for all purposes hereof
unless and until a notice of the assignment or transfer thereof satisfactory to
the Agent signed by such Lender shall have been furnished to the Agent but the
Agent shall not be required to deal with any Person who has acquired a
participation in any Loan from a Lender. As to any matters not expressly
provided for by this Agreement or any other Facility Document, the Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions signed by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in Section 12.01), and such instructions of the
Required Lenders (or such other percentage) and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders and any other holder
of all or any portion of any Loan.
Section 11.03 Defaults. The Agent shall not be deemed to have knowledge
of the occurrence of a Default or an Event of Default (other than the
non-payment of principal of or interest on the Loans to the extent the same is
required to be paid to the Agent for the account of the Lenders) unless the
Agent has received notice from a Lender or the Borrowers specifying such Default
or Event of Default and stating that such notice is a "Notice of Default." In
the event that the Agent receives such a notice of the occurrence of a Default
or Event of Default, the Agent shall give prompt notice thereof to the Lenders
(and shall give each Lender prompt notice of each such non-payment). The Agent
shall (subject to Section 11.08) take such action with
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HUTTIG CREDIT AGREEMENT
respect to such Default or Event of Default which is continuing as shall be
directed by the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in Section
12.01); PROVIDED that, unless and until the Agent shall have received such
directions, the Agent may take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Lenders; and PROVIDED, FURTHER, that the Agent shall
not be required to take any such action which it determines to be contrary to
law.
Section 11.04 Rights of Agent as a Lender. With respect to any
Revolving Credit Commitment and the Loans made by it, the Agent in its capacity
as a Lender hereunder shall have the same rights and powers hereunder as any
other Lender and may exercise the same as though it were not acting as the
Agent, and the term "Lenders" shall, unless the context otherwise indicates,
include the Agent in its capacity as a Lender. The Agent and its Affiliates may
(without having to account therefor to any Lender) accept deposits from, lend
money to (on a secured or unsecured basis), and generally engage in any kind of
banking, trust or other business with, the Borrowers (and any of their
Affiliates) as if it were not acting as the Agent, and the Agent may accept fees
and other consideration from the Borrowers for services in connection with this
Agreement or otherwise without having to account for the same to the Lenders.
Although the Agent and its Affiliates may in the course of such relationships
and relationships with other Persons acquire information about the Borrowers,
their Affiliates and such other Persons, the Agent shall have no duty to
disclose such information to the Lenders.
Section 11.05 Indemnification of Agent. The Lenders agree to indemnify
the Agent (to the extent not reimbursed under Section 12.03 or under the
applicable provisions of any other Facility Document, but without limiting the
obligations of the Borrower under Section 12.03 or such provisions), ratably in
accordance with the aggregate unpaid principal amount of the Loans made by the
Lenders (without giving effect to any participations, in all or any portion of
such Loans, sold by them to any other Person) (or, if no Loans are at the time
outstanding, ratably in accordance with their respective Revolving Credit
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement, any
other Facility Document or any other documents contemplated by or referred to
herein or the transactions contemplated hereby or thereby (including, without
limitation, the costs and expenses which the Borrowers are obligated to pay
under Section 12.03 or under the applicable provisions of any other Facility
Document but excluding, unless a Default or Event of Default has occurred,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents or instruments; PROVIDED that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent.
Section 11.06 Documents. The Agent will forward to each Lender,
promptly after the Agent's receipt thereof, a copy of each report, notice or
other document required by this Agreement or any other Facility Document to be
delivered to the Agent for such Lender.
Section 11.07 Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrowers and their
Subsidiaries and its own decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own
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HUTTIG CREDIT AGREEMENT
analysis and decisions in taking or not taking action under this Agreement or
any other Facility Document. The Agent shall not be required to keep itself
informed as to the performance or observance by the Borrowers of this Agreement
or any other Facility Document or any other document referred to or provided for
herein or therein or to inspect the properties or books of the Borrowers or any
Subsidiary. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the affairs, financial condition or
business of the Borrowers or any of their Subsidiaries which may come into the
possession of the Agent or any of its Affiliates. The Agent shall not be
required to file this Agreement, any other Facility Document or any document or
instrument referred to herein or therein, for record or give notice of this
Agreement, any other Facility Document or any document or instrument referred to
herein or therein, to anyone.
Section 11.08 Failure of Agent to Act. Except for action expressly
required of the Agent hereunder, the Agent shall in all cases be fully justified
in failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Lenders under Section 11.05 in respect of any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
Section 11.09 Resignation or Removal of Agent. Subject to the
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrowers, and the Agent may be removed at any time with or without cause by the
Required Lenders; PROVIDED that the Borrowers and the other Lenders shall be
promptly notified thereof. Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Agent's giving of notice of
resignation or the Required Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a bank which has an office in the United States and total assets in
excess of $1,000,000,000. The Required Lenders or the retiring Agent, as the
case may be, shall upon the appointment of a successor Agent promptly so notify
the Borrower and the other Lenders. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder. After any retiring Agent's resignation or
removal hereunder as Agent, the provisions of this Article 11 shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent.
Section 11.10 Amendments Concerning Agency Function. The Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Facility Document which affects its duties hereunder or
thereunder unless it shall have given its prior consent thereto.
Section 11.11 Liability of Agent. The Agent shall not have any
liabilities or responsibilities to the Borrowers on account of the failure of
any Lender to perform its obligations hereunder or to any Lender on account of
the failure of the Borrowers to perform their obligations hereunder or under any
other Facility Document. The Agent shall have no liability to the Borrowers or
to any Lender by reason of any error in the computation of the Borrowing Base.
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Section 11.12 Transfer of Agency Function. Without the consent of the
Borrowers or any Lender, the Agent may at any time or from time to time transfer
its functions as Agent hereunder to any of its offices wherever located,
PROVIDED that the Agent shall promptly notify the Borrowers and the Lenders
thereof.
Section 11.13 Non-Receipt of Funds by the Agent. Unless the Agent shall
have been notified by a Lender or the Borrowers (any such party as appropriate
being the "PAYOR") prior to the date on which such Lender is to make payment
hereunder to the Agent of the proceeds of a Loan or the Borrowers are to make
payment to the Agent, as the case may be (either such payment being a "REQUIRED
PAYMENT"), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, the recipient of such payment (and if such recipients are
the Borrowers and the Payor Lender fails to pay the amount thereof to the Agent
upon demand, the Borrowers) shall, on demand, repay to the Agent the amount made
available to the Borrowers together with interest thereon for the period from
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 (i) in the case of any Payor
that is a Lender, the Federal Funds Rate for such period (provided that if such
amount is not paid by such Lender to the Agent, within 3 Business Days of the
date such amount was so made available by the Agent, the applicable interest
rate shall be the Adjusted Base Rate from and after such third Business Day
until such amounts are paid to the Agent); and (ii) in the case of any Payor
that is a Borrower, the Adjusted Base Rate for such period; PROVIDED, that as
used in this Section 11.13, "Required Payment" does not include any amounts due
from a Lender to the Agent which are to be settled on the next Settlement Date
pursuant to Section 2.13, but "Required Payment" shall include as of each
Settlement Date any amounts due from a Lender to the Agent as part of the
Settlement Amount to be paid on such Settlement Date pursuant to Section 2.13.
Section 11.14 Withholding Taxes. Each Lender represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to the Agent such forms, certifications,
statements and other documents as the Agent may request from time to time to
evidence such Lender's exemption from the withholding of any tax imposed by any
jurisdiction or to enable the Agent to comply with any applicable laws or
regulations relating thereto. Without limiting the effect of the foregoing, if
any Lender is not created or organized under the laws of the United States of
America or any state thereof, in the event that the payment of interest by the
Borrowers is treated for U.S. income tax purposes as derived in whole or in part
from sources from within the U.S., such Lender will furnish to the Agent Form
4224 or Form 1001 of the Internal Revenue Service, or such other forms,
certifications, statements or documents, duly executed and completed by such
Lender as evidence of such Lender's exemption from the withholding of U.S. tax
with respect thereto. The Agent shall not be obligated to make any payments
hereunder to such Lender in respect of any Loan or such Lender's Revolving
Credit Commitment until such Lender shall have furnished to the Agent the
requested form, certification, statement or document.
Section 11.15 Several Obligations and Rights of Lenders. The failure of
any Lender to make any Loan to be made by it on the date specified therefor
shall not relieve any other Lender of its obligation to make its Loan on such
date, but no Lender shall be responsible for the failure of any other Lender to
make a Loan to be made by such other Lender. The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled to, subject to Section 11.18, protect and enforce its
rights arising out of
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this Agreement, and it shall not be necessary for any other Lender to be joined
as an additional party in any proceeding for such purpose.
Section 11.16 Pro Rata Treatment of Loans, Etc.
(a) Each Lender shall at all times maintain a uniform, and not a
varying, undivided percentage of all rights and obligations under and in respect
of the Revolving Credit Commitments and Revolving Credit Loans.
(b) Except to the extent otherwise provided, (i) each borrowing
under Section 2.02 shall be made from the Lenders and each payment of commitment
fees accruing under Section 2.15 shall be made for the account of the Lenders,
pro rata according to the relative amounts of the Revolving Credit Commitments
of each Lender and (ii) each prepayment and payment of principal of or interest
on Revolving Credit Loans shall be made for the account of the Lenders, pro rata
according to each Lender's proportionate share of the principal amount of all
Revolving Credit Loans then outstanding.
(c) If the Agent receives funds for application to the
Obligations under the Facility Documents under circumstances for which the
Facility Documents do not specify the Loans or other Obligations to which, or
the manner in which, such funds are to be applied, the Agent may, but shall not
be obligated to, elect to distribute such funds to each Lender ratably in
accordance with such Lender's Revolving Credit Commitment Percentage, in
repayment or prepayment of such of the outstanding Loans or other Obligations
owed to such Lender, and for application to such principal installments, as the
Agent shall direct.
Section 11.17 Sharing of Payments Among Lenders. If a Lender shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means (including any receipt of proceeds from the Collateral Account), it
shall promptly purchase from the other Lenders participations in (or, if and to
the extent specified by such Lender, direct interests in) the Loans made by the
other Lenders in such amounts, and make such other adjustments from time to time
as shall be equitable to the end that all the Lenders shall share the benefit of
such payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Loans held by each of them. To such end the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. The Borrowers agree that any Lender so purchasing a participation
(or direct interest) in the Loans made by other Lenders may exercise all rights
of setoff, banker's lien, counterclaim or similar rights with respect to such
participation (or direct interest). Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness of the Borrowers.
Section 11.18 Enforcement of Facility Documents. After the Agent has
received written notice from any Lender that an Event of Default has occurred
and is continuing, the Agent shall, subject to the other provisions of this
Article 11 and to the terms of the Facility Documents (and subject to the
rights, if any, of other persons holding liens on, security interests in or
claims to the Collateral which are prior to those of the Security Agreement),
take such steps toward collection or enforcement of any Facility Document and
the Collateral (or any portion thereof), including without limitation an action
to enforce the Security Documents, as may be instructed in writing by the
Required Lenders, PROVIDED, HOWEVER, that in no event shall the Agent be
required,
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and in all cases it shall be fully justified in failing or refusing, to take any
action under or pursuant to this Agreement (including without limitation this
Section 11.18) which, in the reasonable opinion of the Agent, would be contrary
to law or to the terms of this Agreement or any Facility Document or would
subject it or its officers, employees or directors to liability, unless and
until the Agent shall be indemnified or tendered security to its satisfaction by
the Lenders, ratably as provided in Section 11.05, against any and all loss,
cost, expense or liability in connection therewith, anything herein or elsewhere
contained to the contrary notwithstanding. Except as expressly provided in this
Section 11.18, the Agent shall not be required to take steps toward the
collection of any amounts becoming payable upon any Collateral, or to take any
action towards enforcing any Facility Document or to institute, appear in or
defend any action, suit or other proceeding in connection therewith. The
foregoing provisions of this paragraph shall not be construed to limit the power
of the Agent to take any action permitted under any Facility Document to be
taken by the Agent, and the Agent may, in accordance with this Agreement, take
any aforesaid action without the receipt of indemnity or security or any request
therefor and the taking of any such action shall not be construed as a waiver of
any provision of this Agreement. Each Lender agrees with the other Lenders and
the Agent that (i) such Lender will not take any action whatsoever to enforce
any term or provision of any Facility Document or otherwise to realize the
benefits of the Collateral, except through the Agent in accordance with this
Agreement, and (ii) if the Required Lenders shall instruct the Agent pursuant to
this Section 11.18 to commence action to enforce any Facility Document, such
Lender (a) shall not thereafter commence any proceeding of its own seeking
payment of the Loans and/or any other Obligation held by such Lender so long as
such enforcement action is ongoing, and (b) if such a proceeding shall be
pending at the time such instructions are given to the Agent, shall promptly
(but in no event later than the commencement of such enforcement action) cause
such proceeding to be discontinued, PROVIDED that if such Lender shall fail to
discontinue such proceeding, the Agent is hereby authorized and directed by such
Lender and the other Lenders to commence and maintain such foreclosure action on
behalf of such other Lenders (excluding such Lender) and any distribution of
amounts required by this Agreement or the Facility Documents shall be made only
to such other Lenders and/or the Agent as provided therein and, notwithstanding
anything herein or in any Security Document to the contrary, such Lender shall
not be entitled to share therein.
Section 11.19 Borrowing Base Statements, Etc. Promptly after receipt
thereof, the Agent shall provide to the Lenders copies of the Borrowing Base
Certificate and Weekly Collateral Certificate (as amended, if any, by the
Agent), and, upon the reasonable request of any Lender, the Agent shall provide
such other supporting information, reports, reconciliations or documents
provided by the Borrowers pursuant to Section 6.09; PROVIDED, HOWEVER, that the
Agent shall not be liable to the Lenders for the accuracy of any information
contained in any Borrowing Base Certificate, Weekly Collateral Certificate or
any such other information, report, reconciliation or document.
Section 11.20 Field Audits and Inventory Appraisals. The Required
Lenders may, by written notice to the Agent, accelerate the timing of any
scheduled field audit examination or inventory appraisal to be conducted by the
Agent and require the Agent to conduct such field audit examination or inventory
appraisal before the next scheduled date of performance.
Section 11.21 Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Agent, at its option and in its discretion,
(a) to release any Lien on any property granted to or held by the
Agent under any Facility Document (i) upon termination of the Revolving Credit
Commitments and payment in full of all Obligations (other than contingent
indemnification obligations) and the
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HUTTIG CREDIT AGREEMENT
expiration or termination of all Letters of Credit, (ii) that is transferred or
to be transferred as part of, or in connection with, any disposition of assets
permitted hereunder or under any other Facility Document, or (iii) subject to
Section 12.01, if approved, authorized or ratified in writing by the Required
Lenders; and
(b) to subordinate any Lien on any property granted to or held by
the Agent under any Facility Document to the holder of any Lien on such property
that is permitted by Section 7.05(i).
(c) to release any Guarantor from its obligations under the
Guaranty if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder.
Upon request by the Agent at any time, the Required Lenders will confirm in
writing the Agent's authority to release or subordinate its interest in
particular types or items of property, or to release any Guarantor from its
obligations under the Guaranty pursuant to this Section 11.21.
Section 11.22 Other Agents; Arrangers and Managers. Except as provided
in Section 6.11, none of the Lenders or other Persons identified on the facing
page or signature pages of this Agreement as a "syndication agent,"
"documentation agent," "co-agent," "advisor," or "managing agent," shall have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other Persons so identified in deciding to enter
into this Agreement or in taking or not taking action hereunder.
ARTICLE 12
MISCELLANEOUS
Section 12.01 Amendments and Waivers. Except as otherwise expressly
provided in this Agreement, any provision of this Agreement or any of the other
Facility Documents may be amended or modified only by an instrument in writing
signed by the Borrowers, the Agent and the Required Lenders, or by the Borrowers
and the Agent acting with the consent of the Required Lenders, and any provision
of this Agreement or the other Facility Documents for the benefit of the Lenders
or the Agent may be waived (including, without limitation, the release of any
lien on Collateral not expressly permitted to be sold or otherwise disposed of
pursuant to this Agreement) by the Required Lenders or by the Agent acting with
the consent of the Required Lenders; PROVIDED that no amendment, modification or
waiver shall:
(a) increase the Revolving Credit Commitment of any Lender
without the written consent of such Lender and the Agent;
(b) reduce the principal amount of any Loan or Reimbursement
Obligation or reduce the rate of interest thereon (other than the decision not
to charge, or to cease to charge, interest at the Default Rate), or reduce any
fees payable hereunder, without the written consent of each Lender directly
affected thereby;
(c) except as provided in Section 2.18, postpone the scheduled
date of payment of the principal amount of any Loan or Reimbursement Obligation
other than mandatory
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prepayments of the Loans required under Section 2.04, or any interest thereon,
or any fees payable hereunder, or reduce the amount of any such payment, change
the maturity date of any Loan, or postpone the scheduled date of expiration of
any Revolving Credit Commitment, or extend the ultimate expiration date of any
Letter of Credit beyond the Revolving Credit Termination Date, without the
written consent of each Lender directly affected thereby;
(d) change any of the provisions of this Section 12.01 or the
definition of "Required Lenders", or any other provision hereof specifying the
number or percentage of Lenders required to waive, amend or modify any rights
hereunder or under any other Facility Document or make any determination or
grant any consent hereunder or thereunder, without the written consent of each
Lender;
(e) release any Guarantor from its obligations in respect of its
guarantee under Article 10 or release all or substantially all of the Collateral
(or terminate all or substantially all of the Liens in favor of the Agent on the
Collateral), except as expressly permitted in this Agreement, without the
written consent of each Lender; or
(f) modify the Borrowing Base to increase the advance rate
percentages applicable to any category of Collateral included therein, to add
new categories of eligible Collateral or to make less restrictive the
eligibility criteria applicable to any category of Collateral (other than the
adjustment or elimination of reserves in the Agent's reasonable discretion),
without the written consent of each Lender and the Agent;
(g) PROVIDED, further, that any amendment of Article 11 hereof or
any amendment which increases the obligations of the Agent hereunder shall
require the consent of the Agent. No failure by any party (Agent, any Lender or
the Borrowers) to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof or preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law.
Section 12.02 Usury. Anything herein to the contrary notwithstanding,
the obligations of the Borrowers under this Agreement and the Notes shall be
subject to the limitation that payments of interest shall not be required to the
extent that receipt thereof would be contrary to provisions of law applicable to
a Lender limiting rates of interest which may be charged or collected by such
Lender.
Section 12.03 Expenses; Indemnification. The Borrowers and the
Guarantors jointly and severally agree to pay, or to reimburse the Agent or the
Lenders, as applicable, for paying: (a) all reasonable out-of-pocket expenses
incurred by the Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel to the Agent, in connection with the preparation
and administration of this Agreement and the other Facility Documents or any
amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions contemplated hereby or thereby shall be
consummated), (b) all reasonable out-of-pocket expenses incurred by the Agent in
connection with the issuance, amendment, renewal or extension of any Letter of
Credit or any demand for payment thereunder, (c) all out-of-pocket costs and
expenses incurred by the Agent or any Lender, including the reasonable fees,
charges and disbursements of any counsel for the Agent or any Lender, in
connection with the investigation, enforcement or protection of its rights in
connection with this Agreement and the other Facility Documents, including its
rights under this Section 12.03, or in connection with the Loans made or Letters
of Credit issued hereunder following a Default or Event of Default, including in
connection with any workout, restructuring or negotiations in respect thereof;
(d) all
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HUTTIG CREDIT AGREEMENT
actual out-of-pocket costs and reasonable expenses and advances incurred by the
Agent in the protection of its security interests (including but not limited to
reasonable fees and out-of-pocket expenses incurred in perfection of, or
checking the status of such security interests and examinations to determine the
value of Accounts), (e) all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or from the execution, delivery or enforcement of, or
otherwise with respect to this Agreement and the other Facility Documents, all
costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording, perfection or termination of any
security interest contemplated hereby or by any other Facility Document or any
other document referred to therein; and (f) the amount of any and all
out-of-pocket expenses which Agent or any Lender may incur in connection with
the collection of any item deposited in any Controlled Disbursement Account or
received by Agent in connection with any Collateral, together with interest on
any of the above from the date of such expenditure to the date of repayment in
full to Agent at the Adjusted Base Rate. The Borrowers agree, jointly and
severally, to indemnify, reimburse, defend and hold harmless the Agent
(including in its capacity as Issuing Bank) and each Lender and their respective
directors, officers, employees and agents (each, an "INDEMNIFIED PARTY") from
and against, any and all losses, liabilities, claims, damages or expenses
(including reasonable attorneys' fees and fees and expenses incurred in
enforcing this indemnity) asserted against, imposed on or incurred by any of
them arising out of or by reason of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of any of the transactions contemplated hereby, (ii) any actual or proposed use
by the Borrowers or any of their Subsidiaries of the proceeds of any Loan, (iii)
the application of any Environmental Law to acts or omissions occurring at any
time on or in connection with any real estate owned or leased by the Borrowers
or any Subsidiary or any business conducted thereon and (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnified Party is a party thereto; but excluding
any such losses, liabilities, claims, damages or expenses incurred by reason of
the gross negligence or willful misconduct of any Indemnified Party. At its
option, Agent may charge such costs, expenses and amounts as a Revolving Credit
Loan pursuant to this Agreement.
Section 12.04 Survival. The obligations of the Borrowers under Section
12.03 shall survive the repayment of the Loans and the termination of the
Revolving Credit Commitments.
Section 12.05 Assignment; Participations.
(a) Each Lender may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or an undivided portion of all of its Revolving Credit
Commitment, Revolving Credit Loans, and all Notes held by it); PROVIDED,
HOWEVER, that (i) each such assignment shall be of a uniform, and not a varying,
undivided percentage of all rights and obligations under and in respect of the
Revolving Credit Commitments and Revolving Credit Loans; (ii) except in the case
of an assignment to a Person that, immediately prior to such assignment, was a
Lender or an assignment of all of a Lender's rights and obligations under this
Agreement, the amount of the Revolving Credit Commitment of the assigning Lender
being assigned pursuant to each such assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no event
be less than $5,000,000; (iii) each such assignment shall be to an Eligible
Assignee; (iv) no such assignments shall be permitted without the consent of the
Agent (except that the Agent's consent shall not be required for any assignment
by a Lender to an Affiliate of such Lender); and (v) the parties to each such
assignment shall execute and deliver to
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the Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note or Notes subject to such assignment and a
processing and recordation fee of $3,500, provided that such fee shall not apply
to any assignment by a Lender to an Affiliate of such Lender.
(b) Upon such execution, delivery, acceptance and recording, from
and after the effective date specified in such Assignment and Acceptance, (i)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Lender hereunder and (ii)
the Lender assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(c) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of, or the perfection or priority of any lien
or security interest created or purported to be created under or in connection
with, this Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; (ii) such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrowers or any of their Subsidiaries or the
performance or observance by the Borrowers or their Subsidiaries of any of their
obligations under any Facility Document or any other instrument or document
furnished pursuant thereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Section 6.08 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (v) such assignee confirms that it is an Eligible
Assignee; (vi) such assignee appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers and discretion under
the Facility Documents as are delegated to the Agent by the terms hereof,
together with such powers and discretion as are reasonably incidental thereto;
and (vii) such assignee agrees that it will perform in accordance with their
terms all of the obligations which by the terms of this Agreement are required
to be performed by it as a Lender.
(d) The Agent shall maintain at its address referred to in
Section 12.06 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lenders and the Revolving Credit Commitment and principal amount of the Loans
owing to each Lender from time to time (the "REGISTER"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrowers, the Agent and the Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
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HUTTIG CREDIT AGREEMENT
(e) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with any Note or Notes subject to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed, (i) accept such Assignment and Acceptance; (ii) record the
information contained therein in the Register; and (iii) give prompt notice
thereof to the Borrowers. In the case of any assignment by a Lender, within five
Banking Days after its receipt of such notice, the Borrowers, at their own
expense, shall execute and deliver to the Agent in exchange for the surrendered
Notes, new Notes to the order of such Eligible Assignee in amounts equal to the
Revolving Credit Commitment assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Revolving Credit
Commitment hereunder, new Notes to the order of the assigning Lender in amounts
equal to the Revolving Credit Commitment retained by it hereunder. Such new Note
or Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Note or Notes, shall be dated the effective
date of such Assignment and Acceptance and shall otherwise be in substantially
the form of Exhibit A hereto.
(f) Each Lender may sell participations to one or more Persons
(other than the Borrowers or any of their Affiliates) in or to all or any
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Revolving Credit Commitments or Revolving
Credit Loans and any Note or Notes held by it); PROVIDED, HOWEVER, that (i) such
Lender's obligations under this Agreement (including, without limitation, its
Revolving Credit Commitment) shall remain unchanged; (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations; (iii) such Lender shall remain the holder of any such Note for
all purposes of this Agreement; (iv) the Borrowers, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement; (v)
no participant under any such participation shall have any right to approve any
amendment or waiver of any provision of any Facility Document, or any consent to
any departure by the Borrowers or any of their Subsidiaries therefrom, except to
the extent that such amendment, waiver or consent would reduce the principal of,
or interest on, the Notes or any fees or other amounts payable hereunder, in
each case to the extent subject to such participation, postpone any date fixed
for any payment of principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, or release all or substantially all of the Collateral; and (vi)
the identity of the participant shall have been approved by the Agent in writing
to such Lender.
(g) Subject to the provisions of Section 12.06, any Lender may,
in connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 12.05, disclose to the assignee or
participant or proposed assignee or participant, any information relating to the
Borrowers furnished to such Lender by or on behalf of the Borrowers.
(h) Notwithstanding any other provision set forth in this
Agreement, any Lender may at any time create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Loans owing to it and the Note or Notes held by it) in favor of any Federal
Reserve Bank in accordance with Regulation A of the Board of Governors of the
Federal Reserve System.
(i) Notices. All notices and other communications PROVIDED for
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made in writing and,
telecopied, mailed or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature page hereof or, as
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HUTTIG CREDIT AGREEMENT
to any party, at such other address as shall be designated by such party in a
notice to each other party. Except as otherwise PROVIDED in this Agreement, all
such communications shall be deemed to have been duly given when transmitted by
telecopier, personally delivered or, in the case of a mailed notice, upon
receipt, in each case given or addressed as aforesaid.
Section 12.06 Confidentiality. Each of the Agent and each Lender agrees
to maintain the confidentiality of all information provided to it by the
Borrowers relating to the Borrowers or their business and designated as
confidential for a period of 2 years following receipt thereof, except that the
Agent and each Lender may disclose such information (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors; (b) to any assignee of or participant in, or
any prospective assignee of or participant in, any of its rights or obligations
under this Agreement that has agreed to maintain the confidentiality of such
information on terms described in this Section 12.06 (and any such assignee,
participant, potential assignee or potential participant may disclose such
information to its directors, officers, employees and agents, including
accountants, legal counsel and other advisors; (c) to the extent required or
requested by any Governmental Authority; (d) to the extent required by
applicable laws or regulations or by any subpoena, court decree or similar legal
process; (e) in connection with the exercise of any right or remedy under the
Facility Documents or at law or equity or in connection with any litigation to
which the Agent or such Lender is a party; (f) to any other party to this
Agreement; (g) with the consent of the Borrowers' Agent; (h) to the extent such
information (i) becomes publicly available other than as a result of a breach of
this Section 12.06 or (ii) becomes available to the Agent or any Lender on a
non-confidential basis from a source other than the Borrowers. Any Person
required to maintain the confidentiality of information as provided in this
Section 12.06 shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such information as such Person would accord to its own
confidential information.
Section 12.07 Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 12.08 Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.09 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart. Delivery of an executed counterpart of a signature page to
this Agreement by telecopier shall be effective as delivery of a manually
executed counterpart of this Agreement.
Section 12.10 Governing Law. Pursuant to Section 5-1401 of the
New York
General Obligations Law, the whole of this Agreement and the rights and
obligations of the parties hereto shall be governed, construed and interpreted
in accordance with, the laws of the State of
New York without regard to any
conflicts-of-laws rules which would require the application of the laws of any
other jurisdiction.
78
HUTTIG CREDIT AGREEMENT
Section 12.11 Incorporation By Reference; Conflicts. The rights and
remedies of Agent and the Lenders under the other Facility Documents are
incorporated herein by reference and the rights and remedies of the Agent and
the Lenders under this Agreement and all of the terms of this Agreement, are
likewise incorporated in the other Facility Documents by reference. In the case
of any conflict between the terms of this Agreement and the terms of any other
Facility Document, the terms of this Agreement shall govern.
Section 12.12 Jurisdiction, Venue and Service. For purposes of this
Agreement, each of the Borrower hereby irrevocably consents and submits to the
nonexclusive jurisdiction and venue of all federal and state courts located in
the County of
New York, State of
New York and consents that any order, process,
notice of motion or other application to or by any of said courts or a judge
thereof may be served within or without such court's jurisdiction by registered
mail or by personal service, provided a reasonable time for appearance is
allowed, in connection with any action or proceeding arising out of, under or
relating to this Agreement or the Facility Documents. At the option of the
Agent, upon the instructions of the Required Lenders, the Borrowers may be
joined in any action or proceeding commenced by the Agent or the Lenders against
any Borrower or Guarantor in connection with or based on the Security Documents,
and recovery may be had against the Borrowers in such action or proceeding or in
any independent action or proceeding against the Borrowers, without any
requirement that the Agent or the Lenders first assert, prosecute or exhaust any
remedy or claim against any Borrower or Guarantor. Each of the Borrowers hereby
irrevocably waives (to the fullest extent permitted by applicable law) any
objection that it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of, under or relating to this Agreement or any
Facility Document brought in any federal or state court located in the County of
New York, State of
New York, and hereby further irrevocably waives (to the
fullest extent permitted by applicable law) any claim that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
forum.
Section 12.13 Waiver of Jury Trial. EACH OF THE AGENT, THE OTHER
AGENTS, THE LENDERS, THE GUARANTORS AND THE BORROWERS HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVES (TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING
UNDER OR RELATING TO THIS AGREEMENT OR ANY FACILITY DOCUMENT, AND AGREES THAT
ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY. IN
ADDITION, EACH OF THE AGENT, THE LENDERS, THE GUARANTORS AND THE BORROWERS
WAIVES THE RIGHT TO INTERPOSE ANY DEFENSE BASED UPON ANY STATUTE OF LIMITATIONS
OR ANY CLAIM OF LACHES AND ANY SET-OFF OR COUNTER CLAIM OF ANY NATURE OR
DESCRIPTION. EACH OF THE AGENT, THE OTHER AGENTS, THE LENDERS, THE GUARANTORS
AND THE BORROWERS ACKNOWLEDGE THAT THE FOREGOING WAIVERS ARE FREELY MADE.
(Signature Pages Follow)
79
HUTTIG CREDIT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
BORROWERS:
HUTTIG BUILDING PRODUCTS, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. XxXxxx
-----------------------------------
Name: Xxxxxx X. XxXxxx
Title: Vice President - Finance
Address for Notices:
000 Xxxxxxxxx Xxxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Attention:
Facsimile:
HUTTIG, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. XxXxxx
-----------------------------------
Name: Xxxxxx X. XxXxxx
Title: Treasurer
Address for Notices:
000 Xxxxxxxxx Xxxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Attention:
Facsimile:
HUTTIG INDIANA, INC.,
a Delaware corporation
By: /s/ Xxxxxx X. XxXxxx
-----------------------------------
Name: Xxxxxx X. XxXxxx
Title: Treasurer
Address for Notices:
000 Xxxxxxxxx Xxxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Attention:
Facsimile:
S-1
HUTTIG CREDIT AGREEMENT
HUTTIG INDIANA PARTNERSHIP LP,
an Indiana limited partnership
By: Huttig Indiana, Inc.
Its: General Partner
By: /s/ Xxxxxx X. XxXxxx
----------------------------
Name: Xxxxxx X. XxXxxx
Title: Treasurer
Address for Notices:
000 Xxxxxxxxx Xxxxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Attention:
Facsimile:
S-2
HUTTIG CREDIT AGREEMENT
JPMORGAN CHASE BANK,
as Administrative and Collateral Agent and
Arranger and as a Lender
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Vice President
Address for Notices:
X.X. Xxxxxx Business Credit Corp.
Xxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000
Attention: Huttig Relationship Manager
Facsimile: (000) 000-0000
S-3
HUTTIG CREDIT AGREEMENT
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By: /s/ Xxx Xxxxxx
----------------------------------
Name: Xxx Xxxxxx
Title: Vice President
Address for Notices:
Bank of America, N.A.
000 Xxxxx XxXxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention:
Facsimile:
S-4
HUTTIG CREDIT AGREEMENT
CONGRESS FINANCIAL CORPORATION
(CENTRAL),
as Documentation Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
Address for Notices:
000 X. Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
S-5
HUTTIG CREDIT AGREEMENT
LASALLE BANK NATIONAL ASSOCIATION,
as a Managing Agent and as a Lender
By: /s/ Xxxx Frenckiewicz
-------------------------------------
Name: Xxxx Frenckiewicz
Title: Assistant Vice President
Address for Notices:
000 Xxxxx Xxxxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Frenckiewicz
Facsimile: (000) 000-0000
S-6
HUTTIG CREDIT AGREEMENT
TRANSAMERICA BUSINESS CAPITAL
CORPORATION,
as Co-Agent and as a Lender
By: /s/ Xxxxxxx Xxxxxxxxxx
Name: Xxxxxxx Xxxxxxxxxx
Title: Senior Vice President
Address for Notices:
000 Xxxxxxxx Xxxxx Xxx., Xxx X000
Xxx, XX 00000
Attention: Xxxx Xxx
Facsimile: (000) 000-0000
S-7
HUTTIG CREDIT AGREEMENT
GENERAL ELECTRIC CAPITAL
CORPORATION,
as a Managing Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Duly Authorized Signatory
Address for Notices:
000 Xxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, XX 00000
Attention: Huttig Account Manager
Facsimile: (000) 000-0000
S-8
HUTTIG CREDIT AGREEMENT
PNC BANK, NATIONAL ASSOCIATION,
as a Lender
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Assistant Vice President
Address for Notices:
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxx
Facsimile: (000) 000-0000
S-9
EXHIBIT A
FORM OF
REVOLVING CREDIT NOTE
$[________] [Date]
Huttig Building Products, Inc., a Delaware corporation ("HUTTIG") and
the domestic Subsidiaries of Huttig party hereto (the "DOMESTIC SUBSIDIARIES",
and collectively with Huttig, the "BORROWERS"), for value received, hereby
jointly and severally promise to pay to the order of [NAME OF LENDER] (the
"LENDER") at the office of Lender at [ADDRESS], for the account of the Lender,
the principal sum of
[___________]MILLION AND 00/100 DOLLARS ($_________)
or, if less, the amount of Revolving Credit Loans loaned by the Lender to the
Borrowers pursuant to the Credit Agreement referred to below, in lawful money of
the United States of America and in immediately available funds, on the date(s)
and in the manner provided in said Credit Agreement. The Borrowers also jointly
and severally promise to pay interest on the unpaid principal balance hereof,
for the period such balance is outstanding, at said principal office for the
account of the Lender, in like money, at the rates of interest as provided in
the Credit Agreement described below, on the date(s) and in the manner provided
in such Credit Agreement.
This is one of the Notes referred to in, and is entitled to the benefits
of, that certain Credit Agreement dated as of August 12, 2002 among the
Borrowers, the Guarantors from time to time party thereto (including the
Lender), JPMorgan Chase Bank, as Administrative and Collateral Agent, Issuing
Bank and Arranger, X.X. Xxxxxx Business Credit Corp., as Advisor, Bank of
America, N.A., as Syndication Agent, LaSalle Bank, National Association, as a
Managing Agent, General Electric Capital Corporation, as a Managing Agent,
Transamerica Business Capital Corporation, as Co-Agent, and Congress Financial
Corporation (Central), as Documentation Agent (as amended, restated,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
and evidences the Revolving Credit Loans made by the Lender to the Borrowers
thereunder. All terms not defined herein shall have the meanings given to them
in the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
principal upon the occurrence and during the continuance of certain Events of
Default and for prepayments on the terms and conditions specified herein.
The Borrowers waive presentment, notice of dishonor, protest and any
other notice or formality with respect to this Note.
In any action or proceeding involving any state corporate law, or any
state or Federal bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Borrower would
otherwise be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its joint and several liability hereunder, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by any Borrower or Lender or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
Pursuant to Section 5-1401 of the New York General Obligations law, this
Note, including the validity hereof and the rights of the Lender and obligations
of the Borrowers hereunder, shall be governed by, and interpreted and construed
in accordance with, the laws of the State of New York.
BORROWERS:
HUTTIG BUILDING PRODUCTS, INC.,
a Delaware corporation
By:
--------------------------------
Name:
Title:
HUTTIG, INC.,
a Delaware corporation
By:
--------------------------------
Name:
Title:
HUTTIG INDIANA, INC.,
a Delaware corporation
By:
--------------------------------
Name:
Title:
HUTTIG INDIANA PARTNERSHIP LP,
an Indiana limited partnership
By: Huttig Indiana, Inc.
Its: General Partner
By:
--------------------------------
Name:
Title:
Exhibit A-2
EXHIBIT B
FORM OF AUTHORIZATION LETTER
AUTHORIZATION LETTER
August 12, 2002
JPMorgan Chase Bank
Xxx Xxxxx Xxxxxx, XX-0
Xxxxxxxxx, XX 00000
Attention: Huttig Building Products, Inc., Account Representative
Re: Credit Agreement dated as of August 12, 2002 (as amended,
restated, supplemented or otherwise modified from time to time,
the "Credit Agreement") among Huttig Building Products, Inc.,
("Huttig") and certain domestic Subsidiaries of Huttig as joint
and several borrowers (such Subsidiaries, together with Huttig,
the "Borrowers"), the Guarantors from time to time party thereto,
the Lenders from time to time party thereto, JPMorgan Chase Bank,
as Agent and as Issuing Bank, Bank of America, N.A., as
Syndication Agent, General Electric Capital Corporation, as a
Managing Agent, LaSalle Bank National Association, as a Managing
Agent, Transamerica Business Capital Corporation, as Co-Agent and
Congress Financial Corporation (Central), as Documentation Agent.
Capitalized terms used herein and not defined herein shall have
the respective meanings set forth in the Credit Agreement.
Ladies and Gentlemen:
In connection with the captioned Credit Agreement, we hereby designate
any one of the following persons to give to you instructions, including notices
required pursuant to the Agreement, orally or by telephone or teleprocess:
Xxxxx X. Xxxxx
Xxxxxx X. XxXxxx
Xxxxxxx Xxxxx
Instructions may be honored on the oral, telephonic or facsimile
instructions of anyone purporting to be any one of the above designated persons
even if the instructions are for the benefit of the person delivering them. We
will furnish you with confirmation of each such instruction in writing signed by
any person designated above (including any telecopy which appears to bear the
signature of any person designated above) on the same day that the instruction
is provided to you but your responsibility with respect to any instruction shall
not be affected by your failure to receive such confirmation or by its contents.
You shall be fully protected in, and shall incur no liability to us for,
acting upon any instructions which you reasonably and in good faith believe to
have been given by any person designated above, and
in no event shall you be liable for special, consequential or punitive damages.
In addition, we agree to hold you and your agents harmless from any and all
liability, loss and expense arising directly or indirectly out of instructions
that we provide to you in connection with the Credit Agreement except for
liability, loss or expense occasioned by the gross negligence or willful
misconduct of you or your agents.
Upon notice to us, you may, at your option, refuse to execute any
instruction, or part thereof, without incurring any responsibility for any loss,
liability or expense arising out of such refusal if you reasonably and in good
faith believe that the person delivering the instruction is not one of the
persons designated above or if the instruction is not accompanied by an
authentication method that we have agreed to in writing.
We will promptly notify you in writing of any change in the persons designated
above and, until you have actually received such written notice and have had a
reasonable opportunity to act upon it, you are authorized to act upon
instructions, even though the person delivering them may no longer be
authorized.
Exhibit B-2
Very truly yours,
HUTTIG BUILDING PRODUCTS, INC.,
a Delaware corporation
By:
Name:
Title:
HUTTIG, INC.,
a Delaware corporation
By:
Name:
Title:
HUTTIG INDIANA, INC.,
a Delaware corporation
By:
Name:
Title:
HUTTIG INDIANA PARTNERSHIP LP,
an Indiana limited partnership
By: Huttig Indiana, Inc.
Its: General Partner
By:
Name:
Title:
Exhibit B-3
EXHIBIT C
FORM OF BORROWING BASE CERTIFICATE
[JPMORGANCHASE LOGO]
JPMORGAN CHASE BANK
MONTHLY BORROWING BASE CERTIFICATE
HUTTIG BUILDING PRODUCTS, INC.
FOR THE MONTH OF:
------------
ACCOUNTS RECEIVABLE RECONCILIATION
HUTTIG PRINEVILLE TOTAL
------------- ------------- -------------
Total Accounts Receivable as the date of last submitted Certificate
+ Sales
------------- ------------- -------------
- Collections
------------- ------------- -------------
- Credits
------------- ------------- -------------
+ Debits
------------- ------------- -------------
Accounts Receivable as of
------------ ------------- ------------- -------------
ACCOUNTS RECEIVABLE AGING AS OF
-----------
TOTAL A/R CURRENT 1-30 DAYS P/D 31-60 DAYS P/D 61 + DAYS P/D
Huttig
Prineville
-------------- -------------- -------------- -------------- -------------
Total
- - ## - - -
ACCOUNTS RECEIVABLE
Total Gross Accounts Receivable dated: 07/31/02
-------------
HUTTIG PRINEVILLE TOTAL
------------- ------------- -------------
Total Accounts Receivable(as shown on aging)
LESS:
Over 60 Days Past Due
------------- ------------- -------------
Credits over 60 Past Due
------------- ------------- -------------
Over 90 Days Past Invoice Date
------------- ------------- -------------
50% Rule or Cross Aging
------------- ------------- -------------
25% Concentration
------------- ------------- -------------
Service Charges
------------- ------------- -------------
Affiliate A/R
------------- ------------- -------------
Contra Accounts
------------- ------------- -------------
Government
------------- ------------- -------------
Finance charges
------------- ------------- -------------
C.O.D.
------------- ------------- -------------
Foreign Receivables
------------- ------------- -------------
Unreconciled G/L differences
------------- ------------- -------------
Other:Cash sales
------------- ------------- -------------
Other:
------------- ------------- -------------
Total Ineligible Receivables 0 0 0
------------- ------------- -------------
(as of date): 7/31/02
------------
TOTAL ELIGIBLE ACCOUNTS RECEIVABLE 0 0 0
------------- ------------- -------------
TOTAL AVAILABLE AT ADVANCE RATE OF: 85%
-
-----------
Exhibit C-2
INVENTORY
Gross Inventory as of the Month ended: 07/01/02
-----------------------
HUTTIG PRINEVILLE TOTAL
------------- ------------- -------------
Total Gross Inventory (see next page)
------------- ------------- -------------
LESS:
In Transit
------------- ------------- -------------
Non-stock
------------- ------------- -------------
WIP
------------- ------------- -------------
Slow Moving/Obsolete
------------- ------------- -------------
------------- ------------- -------------
Other: Prineville
------------- ------------- -------------
Consigned
------------- ------------- -------------
Other:_Returned to vendor
------------ ------------- ------------- -------------
Total Ineligibles
------------- ------------- -------------
Total Eligible Inventory(as of date):
------------ ------------- ------------- -------------
TOTAL INVENTORY 60% 0
-----------
Exhibit C-3
TOTAL AVAILABILITY
RESERVES
Total of outstanding Letter of Credits
-------------
Interest Rate Protection Obligation (Xxxxxx or MTM)
-------------
Other:
-------------
TOTAL RESERVES
-----------
TOTAL AVAILABILITY 0
===========
(MINIMUM REQUIREMENT OF $10MM IN EXCESS AVAILABILITY AFTER DEDUCTING LOAN BALANCE)
AUTHORIZED SIGNATURE: DATE:
------------------------------------- ---------------
Adhesives & Sealants
------------
Bathroom Fixtures
------------
Builder Hardware
------------
Caulks
------------
Cedar Products
------------
Ceiling
------------
Exhibit C-4
Columns
------------
Composite Panel- Cement
------------
Concrete
------------
Connectors
------------
Corrugated Fg panels
------------
Countertops
------------
Decking
------------
Door Construction Hardware
------------
Drainage
------------
Dry Wall
------------
Engineered Wood
------------
Ext Door Composite
------------
Ext Door Steel
------------
Ext Door Wood
------------
Fasteners
------------
Fencing
------------
Fireplace Accessories
------------
Flashing
------------
Flooring
------------
Frames - Door
------------
Frames - Window
------------
Garage Doors
------------
Hardwood Lumber
------------
House Wrap
------------
Insulation
------------
Int Door Flush
------------
Int Door Moulded
------------
Int Door Wood
------------
Interior Paneling
------------
Kitchen Products
------------
Landscapeing items
------------
Lighting
------------
Locksets
------------
Lumber Products
------------
Misc. Stucconetting
------------
Exhibit C-5
Mouldings
------------
Other
------------
Paints & Stains
------------
Panel Products
------------
Railings
------------
Roofing- Commercial
------------
Roofing Residential
------------
Screen Doors
------------
Shutters
------------
Siding
------------
Specialty Wood Products
------------
Skylights
------------
Stairs
------------
Storm Doors
------------
Tools & Consumables
------------
Ventilation
------------
Windows
------------
Non Stock
------------
Prineville
------------
Pre- Paid
------------
Direct
------------
Other
------------
Total Gross Inventory
============
Exhibit C-6
EXHIBIT D
INTENTIONALLY OMITTED
EXHIBIT E
FORM OF SECURITY AND PLEDGE AGREEMENT
This SECURITY AND PLEDGE AGREEMENT, dated as of August 12, 2002, is
among Huttig Building Products, Inc., a Delaware corporation ("HBP"), Huttig,
Inc., a Delaware corporation ("Huttig"), Huttig Indiana, Inc., a Delaware
corporation ("Huttig Indiana"), Huttig Indiana Partnership, LP, an Indiana
limited partnership ("HIP") and each Person that becomes a Grantor hereunder
pursuant to Section 11.17 (each such Person, HBP, Huttig, Huttig Indiana and HIP
are collectively referred to herein as the "Grantors" and each individually as a
"Grantor"), and JPMorgan Chase Bank, a New York banking corporation, as the
Agent (as hereinafter defined) for the benefit of the Secured Parties (as
hereinafter defined).
RECITALS:
WHEREAS, reference is made to that certain Credit Agreement dated as of
August 12, 2002, among each of the Grantors, certain other Persons from time to
time party thereto, as guarantors (the "Guarantors"), the financial institutions
from time to time party thereto, as lenders (the "Lenders"), X.X. Xxxxxx
Business Credit Corp., as Advisor, and JPMorgan Chase Bank, as administrative
and collateral agent for the Lenders (in such capacities, together with its
successors in such capacities, the "Agent") and as Issuing Bank and Arranger,
Bank of America, N.A., as syndication agent (in such capacity, together with its
successors in such capacity, the "Syndication Agent"), LaSalle Bank National
Association, as a Managing Agent, General Electric Capital Corporation, as a
Managing Agent, Transamerica Business Capital Corporation, as Co-Agent, and
Congress Financial Corporation (Central), as documentation agent (in such
capacity, together with its successors in such capacity, the "Documentation
Agent") (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement").
WHEREAS, in consideration of the extensions of credit as set forth in
the Credit Agreement each Grantor has agreed to secure all obligations under the
Credit Agreement and the other Facility Documents as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, each Grantor and the Agent agree as
follows:
SECTION 1 DEFINITIONS
1.1 General Definitions. Capitalized terms used herein but not otherwise
defined shall have the meanings given such terms in the Credit Agreement. In
addition, as used herein, the following terms shall have the following meanings:
"Accounts" shall mean (i) all "accounts" as defined in Article 9 of the
UCC and (ii) shall include any account receivable or right of any Grantor to
payment for goods sold or leased or for services rendered (whether secured or
unsecured), regardless of whether classified as an account under the UCC, and
all interest, late charges, penalties, collection fees and other sums which
shall be due and payable in connection with any Account.
"Agreement" shall mean this Security and Pledge Agreement, as amended,
restated, supplemented or otherwise modified from time to time.
"Authenticate" shall mean "authenticate" as defined in Article 9 of the
UCC.
"Bankruptcy Code" shall mean Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"Cash Proceeds" shall mean all proceeds of any Collateral consisting of
cash, checks and other near-cash items.
"Chattel Paper" shall mean all "chattel paper" as defined in Article 9
of the UCC, including, without limitation, "electronic chattel paper" or
"tangible chattel paper", as each term is defined in the UCC.
"Collateral" shall have the meaning set forth in Section 2.1 hereof.
"Collateral Records" shall mean books, records, ledger cards, files,
correspondence, customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and other electronic storage
media and related data processing software and similar items that at any time
evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon.
"Collateral Support" shall mean all property (real or personal)
assigned, hypothecated or otherwise securing any Collateral and shall include
any security agreement or other agreement granting a lien or security interest
in such real or personal property.
"Commercial Tort Claims" shall mean all "commercial tort claims" as
defined in the UCC, including, without limitation, all commercial tort claims
listed and described with specification on Schedule VII hereto (as such schedule
may be amended or supplemented from time to time).
"Commodities Accounts" (i) shall mean all "commodity accounts" as
defined in Article 9 of the UCC and (ii) shall include, without limitation, all
of the accounts listed on Schedule III hereto under the heading "Commodities
Accounts" (as such schedule may be amended or supplemented from time to time).
"Copyright Licenses" shall mean any and all agreements granting any
right in, to or under Copyrights (whether the applicable Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule VI (as such schedule may be amended or supplemented from time to
time).
"Copyrights" shall mean all United States and foreign copyrights,
including but not limited to copyrights in software and databases, and Mask
Works (as defined under 17 U.S.C. 901 of the U.S. Copyright Act), whether
registered or unregistered, and, with respect to any and all of the foregoing:
(i) all registrations and applications therefor including, without limitation,
the registrations and applications referred to in Schedule VI (as such schedule
may be amended or supplemented from time to time), (ii) all extensions and
renewals thereof, (iii) all rights corresponding thereto throughout the world,
(iv) all rights to xxx for past, present and future infringements thereof, (v)
all licenses, claims, damages, and proceeds of suit arising therefrom, and (vi)
all payments and rights to payments arising out of the sale, lease, license,
assignment, or other disposition thereof.
"Credit Agreement" shall have the meaning set forth in the recitals.
"Deposit Accounts" (i) shall mean all "deposit accounts" as defined in
Article 9 of the UCC and (ii) shall include, without limitation, all of the
accounts listed on Schedule III hereto under the heading "Deposit Accounts" (as
such schedule may be amended or supplemented from time to time).
Exhibit E-2
"Documents" shall mean all "documents" as defined in Article 9 of the
UCC.
"Documents Evidencing Goods" shall mean all Documents evidencing,
representing or issued in connection with Goods.
"Equipment" shall mean: (i) all "equipment" as defined in the UCC, (ii)
all machinery, manufacturing equipment, data processing equipment, computers,
office equipment, furnishings, furniture, appliances, and tools (in each case,
regardless of whether characterized as equipment under the UCC), (iii) all
Fixtures, and (iv) all accessions or additions thereto, all parts thereof,
whether or not at any time of determination incorporated or installed therein or
attached thereto, and all replacements therefor, wherever located, now or
hereafter existing.
"Fixtures" shall mean all "fixtures" as defined in Article 9 of the UCC
other than heating, ventilation and cooling systems, alarms and other security
or alert devices or systems, fire sprinklers and other fire retarding devices or
systems, and lighting fixtures.
"General Intangibles" (i) shall mean all "general intangibles" as
defined in Article 9 of the UCC and (ii) shall include, without limitation, all
interest rate or currency protection or hedging arrangements, all tax refunds
and all licenses, permits, concessions, franchises and authorizations, contracts
(including leases of real and personal property, vendor or customer contracts
and all franchise, distribution, design, consulting, construction engineering,
management and advertising and related agreements) and all websites and, in each
case, regardless of whether characterized as general intangibles under the UCC.
"Goods" (i) shall mean all "goods" as defined in Article 9 of the UCC
and (ii) shall include, without limitation, all Inventory, Equipment, Documents
Evidencing Goods, and Software Embedded In Goods.
"Indemnitee" shall mean the Agent and its Affiliates and each of their
officers, partners, directors, trustees, employees, and agents.
"Instruments" shall mean all "instruments" as defined in Article 9 of
the UCC.
"Insurance" shall mean: (i) all insurance policies covering any or all
of the Collateral (regardless of whether the Agent is the loss payee thereof)
and (ii) any key man life insurance policies.
"Intellectual Property" shall mean, collectively, the Copyrights,
Patents, Trademarks, Trade Secrets, and Intellectual Property Licenses and the
entire goodwill of any Grantor or other general intangible connected with the
use of or symbolized by any of the foregoing.
"Intellectual Property Licenses" shall mean, collectively, the Copyright
Licenses, Patent Licenses, Trademark Licenses, and Trade Secret Licenses.
"Inventory" shall mean: (i) all "inventory" as defined in the UCC, (ii)
all goods held for sale or lease or to be furnished under contracts of service
or so leased or furnished, (iii) all raw materials, work in process, finished
goods, supplies, merchandise and materials used or consumed in the manufacture,
packing, shipping, advertising, selling, leasing, furnishing or production of
such inventory or otherwise used or consumed in any Grantor's business, (iv) all
goods in which any Grantor has an interest in mass or a joint or other interest
or right of any kind, and (v) all goods which are returned to or repossessed by
any Grantor, and in each case, all accessions thereto and products thereof
(regardless of whether characterized as inventory under the UCC).
Exhibit E-3
"Investment Accounts" shall mean the Collateral Account, Securities
Accounts, Commodities Accounts, and Deposit Accounts.
"Investment Related Property" shall mean: (a) all "investment property"
(as such term is defined in Article 9 of the UCC) and (b) all of the following
(regardless of whether classified as investment property under the UCC): all (i)
Pledged Equity Interests, (ii) Pledged Debt, (iii) Investment Accounts, and (iv)
Certificates of Deposit.
"Letter of Credit Right" shall mean "letter-of-credit right" as defined
in the UCC.
"Material Account Debtor" shall mean each Person who is obligated on any
one or more Receivables or any Supporting Obligation related thereto in excess
of $150,000 in the aggregate.
"Material Contract" shall mean (i) each contract listed on Schedule IV
hereto, and (ii) any other contract or other arrangement to which any Grantor is
a party which is material to the business, operations or condition, financial or
otherwise, of such Grantor.
"Money" shall mean "money" as defined in the UCC.
"Non-Assignable Contract" shall mean any Material Contract to which any
Grantor is a party that by its terms purports to restrict or prevent or penalize
the assignment or granting of a security interest therein (either by its terms
or by any federal or state statutory prohibition or otherwise irrespective of
whether such prohibition or restriction is enforceable under Sections 9-406
through 409 of the UCC).
"Non-payment Contract" shall mean any contract or agreement to which any
Grantor is a party other than any contract where the account debtor's principal
obligation is a monetary obligation; provided, however that Non-payment
Contracts shall not include any Receivables.
"Patent Licenses" shall mean all agreements granting any right in, to,
or under Patents (whether the applicable Grantor is licensee or licensor
thereunder) including without limitation, each agreement referred to in Schedule
VI hereto (as such schedule may be amended or supplemented from time to time).
"Patents" shall mean all United States, state and foreign patents and
certificates of invention, or similar industrial property rights, including, but
not limited to, each patent referred to in Schedule VI hereto (as such schedule
may be amended or supplemented from time to time), and with respect to any and
all of the foregoing, (i) all applications therefore including, without
limitations, the patent applications referred to in Schedule VI hereto (as such
schedule may be amended or supplemented from time to time), (ii) all reissues,
divisions, continuations, continuations-in-part, extensions, renewals, and
reexaminations thereof, (iii) all rights corresponding thereto throughout the
world, (iv) all inventions and improvements described therein, (v) all rights to
xxx for past, present and future infringements thereof, (vi) all licenses,
claims, damages, and proceeds of suit arising therefrom, and (vii) all payments
and rights to payments arising out of the sale, lease, license, assignment, or
other disposition thereof.
"Payment Intangible" shall have the meaning specified in the UCC.
"Pledged Alternative Equity Interests" shall mean all participation or
other interests in any equity or profits of any business entity and the
certificates, if any, representing such interests, all dividends, distributions,
cash, warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such interests, and any other
warrant, right or option to acquire any of the foregoing; provided, however,
Exhibit E-4
that Pledged Alternative Equity Interests shall not include any Pledged Stock,
Pledged Partnership Interests, Pledged LLC Interests and Pledged Trust
Interests.
"Pledged Debt" shall mean all indebtedness for borrowed money owed to
any Grantor, whether or not evidenced by any instrument or promissory note,
including, without limitation, all indebtedness described on Schedule III hereto
under the heading "Pledged Debt" (as such schedule may be amended or
supplemented from time to time), all monetary obligations owing to any Grantor
from any other Grantor, the instruments evidencing any of the foregoing, and all
interest, cash, instruments and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the foregoing.
"Pledged Equity Interests" shall mean all Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests, Pledged Trust Interests and Pledged
Alternative Equity Interests.
"Pledged LLC Interests" shall mean all interests in any limited
liability company owned by any Grantor including, without limitation, all
limited liability company interests listed on Schedule III hereto under the
heading "Pledged LLC Interests" (as such schedule may be amended or supplemented
from time to time) and the certificates, if any, representing such limited
liability company interests and any interest of such Grantor on the books and
records of such limited liability company or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such limited
liability company interests and any other warrant, right or option to acquire
any of the foregoing.
"Pledged Partnership Interests" shall mean all interests in any general
partnership, limited partnership, limited liability partnership or other
partnership owned by any Grantor including, without limitation, all partnership
interests listed on Schedule III hereto under the heading "Pledged Partnership
Interests" (as such schedule may be amended or supplemented from time to time)
and the certificates, if any, representing such partnership interests and any
interest of such Grantor on the books and records of such partnership or on the
books and records of any securities intermediary pertaining to such interest and
all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in exchange for any or all of such
partnership interests and any other warrant, right or option to acquire any of
the foregoing.
"Pledged Stock" shall mean all shares of capital stock owned by any
Grantor, including, without limitation, all shares of capital stock described on
Schedule III hereto under the heading "Pledged Stock" (as such schedule may be
amended or supplemented from time to time), and the certificates, if any,
representing such shares and any interest of such Grantor in the entries on the
books of the issuer of such shares or on the books of any securities
intermediary pertaining to such shares, and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares and any other warrant,
right or option to acquire any of the foregoing.
"Pledged Trust Interests" shall mean all interests in a Delaware
business trust or other trust owned by any Grantor including, without
limitation, all trust interests listed on Schedule III hereto under the heading
"Pledged Trust Interests" (as such schedule may be amended or supplemented from
time to time) and the certificates, if any, representing such trust interests
and any interest of such Grantor on the books and records of such trust or on
the books and records of any securities intermediary pertaining to such interest
and all dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received, receivable
or otherwise distributed in respect of or in
Exhibit E-5
exchange for any or all of such trust interests and any other warrant, right or
option to acquire any of the foregoing.
"Proceeds" shall mean: (i) all "proceeds" as defined in Article 9 of the
UCC, (ii) all payments or distributions made with respect to any Investment
Related Property, and (iii) whatever is receivable or received when Collateral
or proceeds are sold, leased, licensed, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary.
"Receivables" shall mean all (i) Accounts, (ii) Chattel Paper, (iii)
Payment Intangibles, (iv) Instruments, and (v) to the extent not otherwise
covered above, all other rights to payment, whether or not earned by
performance, for goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered, regardless of how
classified under the UCC together with all of each Grantor's rights, if any, in
any goods or other property giving rise to such right to payment and all
Collateral Support and Supporting Obligations related thereto and all
Receivables Records; provided, however, that Receivables shall not include any
Investment Related Property.
"Receivables Records" shall mean (i) all original copies of all
documents, instruments or other writings or electronic records or other Records
evidencing the Receivables, (ii) all books, correspondence, credit or other
files, Records, ledger sheets or cards, invoices, and other papers relating to
Receivables, including, without limitation, all tapes, cards, computer tapes,
computer discs, computer runs, record keeping systems and other papers and
documents relating to the Receivables, whether in the possession or under the
control of any Grantor or any computer bureau or agent from time to time acting
for any Grantor or otherwise, (iii) all evidences of the filing of financing
statements and the registration of other instruments in connection therewith,
and amendments, supplements or other modifications thereto, notices to other
creditors or agents thereof, and certificates, acknowledgments, or other
writings, including, without limitation, lien search reports, from filing or
other registration officers, (iv) all credit information, reports and memoranda
relating thereto, and (v) all other written or non-written forms of information
related in any way to the foregoing or any Receivable.
"Record" shall have the meaning specified in the UCC.
"Representation Date" shall mean each of (i) the date hereof and (ii)
each day on which a borrowing is made.
"Secured Obligations" shall mean (i) all Obligations of every nature of
each Grantor from time to time owed to the Agent or any Secured Party hereunder
or under any Facility Document, and (ii) all other obligations of every nature
of each Grantor from time to time owed to any Affiliate of the Agent.
"Secured Party" shall mean each of the Lenders, the Agent, each
Affiliate of the Agent, the beneficiaries of each indemnification obligation
undertaken by the Grantors under any of the Facility Documents, and the
successors and assigns of each of the foregoing.
"Securities" shall mean any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
Exhibit E-6
"Securities Accounts" (i) shall mean all "securities accounts" as
defined in Article 8 of the UCC and (ii) shall include, without limitation, all
of the accounts listed on Schedule III hereto under the heading "Securities
Accounts" (as such schedule may be amended or supplemented from time to time).
"Software Embedded in Goods" means, with respect to any Goods, any
computer program embedded in Goods and any supporting information provided in
connection with a transaction relating to the program if (i) the program is
associated with the Goods in such a manner that it customarily is considered
part of the Goods or (ii) by becoming the owner of the Goods a person acquires a
right to use the program in connection with the Goods.
"State" shall mean a State of the United States, the District of
Columbia, Puerto Rico, the United States Virgin Islands, or any territory or
insular possession subject to the jurisdiction of the United States.
"Supporting Obligation" shall mean all "supporting obligations" as
defined in the UCC.
"Tax Code" shall mean the United States Internal Revenue Code of 1986,
as amended to the date hereof and from time to time hereafter, and any successor
statute.
"Trade Secret Licenses" shall mean any and all agreements granting any
right in, to, or under Trade Secrets (whether such Grantor is licensee or
licensor thereunder) including, without limitation, each agreement referred to
in Schedule VI hereto (as such schedule may be amended or supplemented from time
to time).
"Trade Secrets" shall mean all trade secrets and all other confidential
or proprietary information and know-how (including, without limitation, customer
lists, inventions, procedures, methods and formulae), whether or not reduced to
a writing or other tangible form, including, without limitation, with respect to
any and all of the foregoing: (i) all documents and things embodying,
incorporating, or referring in any way thereto, (ii) all rights to xxx for past,
present and future infringement thereof, (iii) all licenses, claims, damages,
and proceeds of suit arising therefrom, and (iv) all payments and rights to
payments arising out of the sale, lease, license, assignment, or other
dispositions thereof.
"Trademark Licenses" shall mean any and all agreements granting any
right in, to, or under Trademarks (whether a Grantor is licensee or licensor
thereunder) including, without limitation, each agreement referred to in
Schedule VI hereto (as such schedule may be amended or supplemented from time to
time).
"Trademarks" shall mean all United States, state and foreign trademarks,
service marks, certification marks, collective marks, trade names, corporate
names, d/b/as, business names, fictitious business names, Internet domain names,
trade styles, logos, other source or business identifiers, designs and general
intangibles of a like nature, rights of publicity and privacy pertaining to the
names, likeness, signature and biographical data of natural persons, and, with
respect to any and all of the foregoing: (i) all registrations and applications
therefor including, but not limited to, the registrations and applications
referred to in Schedule VI hereto (as such schedule may be amended or
supplemented from time to time) but excluding intent to use applications unless
and until statements of use or amendments to allege use are filed with respect
to such applications, (ii) the goodwill of the business symbolized thereby,
(iii) all rights corresponding thereto throughout the world, (iv) all rights to
xxx for past, present and future infringement or dilution thereof or for any
injury to goodwill, (v) all licenses, claims, damages, and proceeds of suit
arising therefrom, and (vi) all payments and rights to payments arising out of
the sale, lease, license assignment or other disposition thereof.
Exhibit E-7
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York.
1.2 Definitions; Interpretation. All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Credit Agreement or, if not
defined therein, in the UCC. References to "Sections," "Annexes" and "Schedules"
shall be to Sections, Annexes and Schedules, as the case may be, of this
Agreement unless otherwise specifically provided. Section headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect. Any of the terms defined herein may, unless the context
otherwise requires, be used in the singular or the plural, depending on the
reference. The use herein of the word "include" or "including", when following
any general statement, term or matter, shall not be construed to limit such
statement, term or matter to the specific items or matters set forth immediately
following such word or to similar items or matters, whether or not nonlimiting
language (such as "without limitation" or "but not limited to" or words of
similar import) is used with reference thereto, but rather shall be deemed to
refer to all other items or matters that fall within the broadest possible scope
of such general statement, term or matter. If any conflict or inconsistency
exists between this Agreement and the Credit Agreement, the Credit Agreement
shall govern. All references herein to provisions of the UCC shall include all
successor provisions under any subsequent version or amendment to any Article of
the UCC.
SECTION 2 GRANT OF SECURITY
2.1 Grant of Security. Each Grantor hereby grants to the Agent a
security interest and continuing lien on all of such Grantor's right, title and
interest in, to and under all personal property of such Grantor including, but
not limited to, the following, in each case whether now owned or existing or
hereafter acquired or arising and wherever located (all of which being
hereinafter collectively referred to as the "Collateral"):
(i) Documents;
(ii) Goods (including Documents Representing Goods and Software
Embedded in Goods);
(iii) Insurance;
(iv) Intellectual Property;
(v) Investment Related Property;
(vi) Letter of Credit Rights;
(vii) Money;
(viii) Non-payment Contracts;
(ix) Receivables and Receivables Records;
(x) Commercial Tort Claims;
Exhibit E-8
(xi) to the extent not otherwise included above, all General
Intangibles, motor vehicles, rolling stock and other personal property of any
kind and all Collateral Records, Collateral Support and Supporting Obligations
relating to any of the foregoing; and
(xii) to the extent not otherwise included above, all Proceeds,
products, accessions, rents and profits of or in respect of any of the
foregoing.
2.2 Certain Limited Exclusions. Notwithstanding anything herein to the
contrary, in no event shall the security interest granted under Section 2.1
hereof attach to (a) any lease, license, contract, property rights or agreement
to which any Grantor is a party or any of its rights or interests thereunder if
and for so long as the grant of such security interest shall constitute or
result in (i) the abandonment, invalidation or unenforceability of any right,
title or interest of any Grantor therein or (ii) in a breach or termination
pursuant to the terms of, or a default under, any such lease, license, contract,
property rights or agreement (other than to the extent that any such term would
be rendered ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the
UCC (or any successor provision or provisions) of any relevant jurisdiction or
any other applicable law (including the Bankruptcy Code) or principles of
equity), provided, however, that such security interest shall attach immediately
at such time as the condition causing such abandonment, invalidation or
unenforceability shall be remedied and, to the extent severable, shall attach
immediately upon the execution hereof to any portion of such lease, license,
contract, property rights or agreement that does not result in any of the
consequences specified in (i) or (ii); or (b) in any of the outstanding capital
stock of a Foreign Subsidiary in excess of 65% of the voting power of all
classes of capital stock of such Foreign Subsidiary entitled to vote; provided,
that immediately upon the amendment of the Tax Code to allow the pledge of a
greater percentage of the voting power of capital stock in a Foreign Subsidiary
without adverse tax consequences, the Collateral shall include, and the security
interest granted by each Grantor shall attach to, such greater percentage of
capital stock of each Foreign Subsidiary.
SECTION 3 SECURITY FOR OBLIGATIONS.
3.1 Security for Obligations. This Agreement secures, and the Collateral
is collateral security for, the prompt and complete payment or performance in
full when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. Section 362(a) (and any successor provision
thereof)), of all Secured Obligations.
3.2 Continuing Liability under Collateral. Notwithstanding anything
herein to the contrary, (i) each Grantor shall remain liable for all obligations
under the Collateral and nothing contained herein is intended as or shall be a
delegation of duties to the Agent or any Secured Party, (ii) each Grantor shall
remain liable under each of the agreements included in the Collateral,
including, without limitation, any agreements relating to Pledged Partnership
Interests or Pledged LLC Interests, to perform all of the obligations undertaken
by it thereunder all in accordance with and pursuant to the terms and provisions
thereof and neither the Agent nor any Secured Party shall have any obligation or
liability under any of such agreements by reason of or arising out of this
Agreement or any other document related thereto nor shall the Agent nor any
Secured Party have any obligation to make any inquiry as to the nature or
sufficiency of any payment received by it or have any obligation to take any
action to collect or enforce any rights under any agreement included in the
Collateral, including, without limitation, any agreements relating to Pledged
Partnership Interests or Pledged LLC Interests, and (iii) the exercise by the
Agent of any of its rights hereunder shall not release any Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral.
Exhibit E-9
SECTION 4 REPRESENTATIONS AND WARRANTIES AND COVENANTS.
4.1 Generally.
(a) Representations and Warranties. Each Grantor hereby represents and
warrants, on each Representation Date, that:
(i) it owns the Collateral purported to be owned by it or otherwise
has the rights it purports to have in each item of Collateral and, as to all
Collateral whether now existing or hereafter acquired, will continue to own or
have such rights in each item of the Collateral, in each case free and clear of
any and all Liens, rights or claims of all other Persons other than Permitted
Liens, including, without limitation, liens arising as a result of such Grantor
becoming bound (as a result of merger or otherwise) as debtor under a security
agreement entered into by another Person;
(ii) it has been duly organized as a corporation, limited liability
company or limited partnership, as the case may be, solely under the laws of the
jurisdiction identified on Schedule IA hereto opposite its name, as the case may
be, and remains duly existing as such, and such Grantor has not filed any
certificates of domestication, transfer or continuance in any other
jurisdiction;
(iii) the execution and delivery of this Agreement by such Grantor
and the performance by it of its obligations under this Agreement are within its
corporate or other powers and have been duly authorized by all necessary
corporate or other action;
(iv) upon (A) the filing of all UCC financing statements naming such
Grantor as "debtor" and the Agent as "secured party" and describing the
Collateral in the filing offices set forth opposite such Grantor's name on
Schedule I(D) hereof (as such schedule may be amended or supplemented from time
to time), (B) the execution and delivery of the Controlled Account Agreements by
the Grantors party thereto, and (C) the recording of the Trademark Security
Agreement in the form set forth in Exhibit A in the U.S. Patent and Trademark
Office within three (3) months of the date hereof against the U.S. issued
Trademarks included in the Collateral, the security interests granted to the
Agent hereunder constitute valid and perfected Liens, which Liens other than in
the case of Fixtures are first priority Liens (subject in all cases only to
Permitted Liens);
(v) other than the financing statements filed in favor of the Agent
and financing statements for which such Grantor has delivered proper UCC
termination statements to the Agent, no effective UCC financing statement,
fixture filing or other instrument similar in effect under any applicable law
covering all or any part of the Collateral is on file in any filing or recording
office except for financing statements filed in connection with Permitted Liens;
(vi) no authorization, approval or other action by, and no notice to
or filing with, any Governmental Authority or regulatory body is required for
either (y) the pledge or grant by any Grantor of the Liens purported to be
created in favor of the Agent hereunder or (z) the exercise by Agent of any
rights or remedies in respect of any Collateral (whether specifically granted or
created hereunder or created or provided for by applicable law), except (A) for
the filings contemplated by clause (iv) above and (B) as may be required, in
connection with the disposition of any Investment Related Property, by laws
generally affecting the offering and sale of Securities and as may be required
under federal laws pertaining to Intellectual Property;
Exhibit E-10
(vii) all actions and consents, including all filings, notices,
registrations and recordings necessary or desirable for the exercise by the
Agent of the voting or other rights provided for in this Agreement or the
exercise of remedies in respect of the Collateral have been made or obtained;
(viii) it has indicated on Schedule I(A) hereto (as such schedule
may be amended or supplemented from time to time): (w) the type of organization
of such Grantor, (x) the jurisdiction of organization of such Grantor, (y) its
organizational identification number and (z) the jurisdiction where the chief
executive office or its sole place of business is (or, if such Grantor is a
natural person, principal residence and principal place of business), and for
the one-year period preceding the date hereof has been, located;
(ix) the full legal name of such Grantor is as set forth on Schedule
I(A) and it has not done in the last five (5) years, and does not do, business
under any other name (including any trade-name or fictitious business name)
except for those names set forth on Schedule I(B) (as such schedule may be
amended or supplemented from time to time);
(x) except as provided on Schedule I(C), it has not changed its
name, jurisdiction of organization, chief executive office or sole place of
business (or, if such Grantor is a natural person, principal residence or
principal place of business) or its corporate structure in any way (e.g. by
merger, consolidation, change in corporate form or otherwise) within the past
five (5) years;
(xi) such Grantor has not within the last five (5) years become
bound (whether as a result of merger or otherwise) as debtor under a security
agreement entered into by another Person other than any such security agreement
which has heretofore been terminated or which creates a Permitted Lien;
(xii) all information supplied by such Grantor with respect to any
of the Collateral (in each case taken as a whole with respect to any particular
Collateral) is accurate and complete in all material respects;
(xiii) none of the Collateral constitutes, or is the Proceeds of,
"farm products" (as defined in the UCC); and
(xiv) all Collateral Records are and will be kept at one or more of
the addresses identified on Schedule II hereto.
(b) Covenants and Agreements. Each Grantor hereby covenants and agrees
that:
(i) except for the security interest created by this Agreement, it
shall not create or suffer to exist any Lien upon or with respect to any of the
Collateral, except Permitted Liens, and it shall defend the Collateral against
all Persons at any time claiming any interest therein;
(ii) it shall not produce, use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;
(iii) it shall not change its name, identity, corporate structure
(e.g. by merger, consolidation, change in corporate form or otherwise), sole
place of business (or principal residence if such Grantor is a natural person),
chief executive office, type of organization or jurisdiction of organization or
establish any trade names unless it shall have (a) notified the Agent in
writing, at least thirty (30) days prior to any such change or establishment,
identifying such new proposed name, identity,
Exhibit E-11
corporate structure, sole place of business (or principal residence if such
Grantor is a natural person), chief executive office, jurisdiction of
organization or trade name and providing such other information in connection
therewith as the Agent may reasonably request and (b) taken all actions
necessary or advisable to maintain the continuous validity, perfection and the
same or better priority of the Agent's security interest in the Collateral
granted or intended to be granted and agreed to hereby;
(iv) it shall pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith by
appropriate proceedings and for which adequate reserves have been set aside on
such Grantor's books in accordance with GAAP; provided, such Grantor shall in
any event pay such taxes, assessments, charges, levies or claims not later than
five (5) days prior to the date of any proposed sale under any judgment, writ or
warrant of attachment entered or filed against such Grantor or any of the
Collateral as a result of the failure to make such payment;
(v) upon such Grantor or any officer of such Grantor obtaining
knowledge thereof, it shall promptly notify the Agent in writing of any event
that may materially and adversely affect the value of the Collateral or any
material portion thereof, the ability of such Grantor or the Agent to dispose of
the Collateral or any material portion thereof, or the rights and remedies of
the Agent in relation thereto, including, without limitation, the levy of any
legal process against the Collateral or any material portion thereof;
(vi) it shall not take or permit any action which could impair the
Agent's rights in the Collateral;
(vii) except as expressly permitted by the Credit Agreement, it
shall not sell, transfer or assign (by operation of law or otherwise) any
Collateral; and
(viii) such Grantor will take, and will cause each of its
Subsidiaries to take, all action or actions as may be necessary to prevent any
of the Collateral from becoming fixtures.
4.2 Equipment and Inventory.
(a) Representations and Warranties. Each Grantor represents and
warrants, on each Representation Date, that:
(i) all of the Equipment and Inventory included in the Collateral is
currently kept, and since April 25, 2000, has been kept, only at the locations
specified in Schedule II hereto (as such schedule may be amended or supplemented
from time to time);
(ii) any Inventory previously or hereafter produced by such Grantor
included in the Collateral was and will be produced in material compliance with
the requirements of the Fair Labor Standards Act, as amended; and
(iii) no Inventory or Equipment with a value in excess of $750,000
in the aggregate is in the possession of one or more issuers of negotiable
documents (as defined in Section 7-104 of the UCC) therefor or otherwise in the
possession or control of any one or more third parties, including, without
limitation, any warehouseman, bailee or agent.
(b) Covenants and Agreements. Each Grantor covenants and agrees that:
Exhibit E-12
(i) it shall keep the Equipment and Inventory in the locations
specified on Schedule II hereto (as such schedule may be amended or supplemented
from time to time) unless it shall have (a) notified the Agent in writing, at
least thirty (30) days prior to any change in locations, identifying such new
locations and to the extent required by the Credit Agreement providing
Landlord's Waivers and Consents with respect to such new location and such other
information in connection therewith as the Agent may reasonably request and (b)
taken all actions necessary or advisable to maintain the continuous validity,
perfection and the same or better priority of the Agent's security interest in
the Collateral intended to be granted and agreed to hereby, or to enable the
Agent to exercise and enforce its rights and remedies hereunder, with respect to
such Equipment and Inventory;
(ii) it shall keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory, such
Grantor's cost therefor and (where applicable) the current list prices for the
Inventory, in each case, in reasonable detail;
(iii) it shall not deliver any Document Evidencing Goods to any
Person other than (x) the issuer of such Document to claim the Goods evidenced
therefor or (y) the Agent;
(iv) if any Equipment or Inventory is in possession or control of
any one or more third parties, including, without limitation, any warehouseman,
bailee or agent, such Grantor shall join with the Agent in notifying such third
parties of the Agent's security interest and obtaining an Authenticated
acknowledgment from such third parties that it is holding the Equipment and
Inventory for the benefit of the Agent and will act upon the instructions of the
Agent without further consent from any Grantor or any other Person; provided,
however, that this Section 4.2(b)(iv) shall not be applicable with respect to
Equipment and Inventory in possession or control of any one or more third
parties with a value of less than $750,000 in the aggregate; and
(v) with respect to any item of Equipment which is covered by a
certificate of title under a statute of any jurisdiction under the law of which
indication of a security interest on such certificate is required as a condition
of perfection thereof, upon the request of the Agent, (A) provide information
with respect to any such Equipment, (B) execute and file with the registrar of
motor vehicles or other appropriate authority in such jurisdiction an
application or other document requesting the notation or other indication of the
security interest created hereunder on such certificate of title, and (C)
deliver to the Agent copies of all such applications or other documents filed
and copies of all such certificates of title issued indicating the security
interest created hereunder and the items of Equipment covered thereby.
4.3 Receivables.
(a) Representations and Warranties. Each Grantor represents and
warrants, on each Representation Date, that:
(i) each Receivable (a) is and will be the legal, valid and binding
obligation of the Account Debtor in respect thereof, representing an unsatisfied
obligation of such Account Debtor, (b) is and will be enforceable in accordance
with its terms, (c) is not and will not be subject to any setoffs, defenses,
taxes, counterclaims (except for discounts required by contract or agreement
made in the ordinary course of business, corrections of billing errors in the
ordinary course of business and discounts, credits and allowances expressly
permitted by Section 4.3(b)(v)) and (d) is and will be in compliance with all
applicable laws, whether federal, state, local or foreign;
(ii) none of the Account Debtors in respect of any Receivable that
is included in the Borrowing Base calculation set forth on any Borrowing Base
Certificate is the government of the United
Exhibit E-13
States, any agency or instrumentality thereof, any state or municipality, or any
foreign sovereign. No Receivable requires the consent of the Account Debtor in
respect thereof in connection with the pledge hereunder, except any consent
which has been obtained;
(iii) no Receivable is evidenced by, or constitutes, an Instrument
or Chattel Paper which has not been delivered to, or otherwise subjected to the
control of, the Agent in accordance with Section 4.3(c); and
(iv) with respect to Accounts: (A) each existing Account represents,
and each future Account shall represent, a bona fide sale or lease and delivery
of goods or rendition of services by such Grantor in the ordinary course of
business; (B) each existing Account is, and each future Account shall be, at the
time any such Account arose and at the time any such Account is billed, for a
liquidated amount payable by the Account Debtor thereon on the terms set forth
in the invoice therefor, without offset, deduction, defense, or counterclaim,
other than discounts required by contract or agreement made in the ordinary
course of business, corrections of billing errors in the ordinary course of
business, and discounts, credits and allowances expressly permitted by Section
4.3(b)(v); (C) each copy of an invoice or claim form delivered to the Agent by
such Grantor shall be a genuine copy of the original invoice or claim form sent
to the Account Debtor named therein; (D) all goods described in any invoice or
claim form representing a sale of goods shall have been delivered to the Account
Debtor and all services of such Grantor described in any invoice or claim form
shall have been performed; and (E) no direction of any Grantor or any other
Person is in effect directing any Account Debtor to make payments in respect of
the Accounts other than to a Lock Box or a Controlled Account.
(b) Covenants and Agreements: Each Grantor hereby covenants and agrees
that:
(i) it shall keep and maintain at its own cost and expense
satisfactory and complete records of the Receivables, including, but not limited
to, the originals of all documentation with respect to all Receivables and
records of all payments received and all credits granted on the Receivables, all
merchandise returned and all other dealings therewith;
(ii) it shall perform in all material respects all of its
obligations with respect to the Receivables;
(iii) it shall not (w) grant any extension or renewal of the time of
payment of any Receivable, (x) release, wholly or partially, any Person liable
for the payment of any Receivable, (y) other than as expressly permitted by
Section 4.3(b)(v), compromise or settle any dispute, claim or legal proceeding
with respect to any Receivable for less than the total unpaid balance thereof,
or (z) other than as expressly permitted by Section 4.3(b)(v), allow any credit
or discount on any Receivable;
(iv) it shall xxxx conspicuously, in form and manner reasonably
satisfactory to the Agent, all Chattel Paper, Instruments and other evidence of
Receivables (other than any delivered to the Agent as provided herein), as well
as the Receivables Records with an appropriate reference to the fact that the
Agent has a security interest therein;
(v) with respect to Accounts: (A) it shall not re-date any invoice,
claim form or sale relating to any Account; (B) if it becomes aware of any
matter that is reasonably likely to materially adversely affect any Material
Account Debtor, including information regarding such Material Account Debtor's
creditworthiness, such Grantor shall promptly so advise the Agent; (C) it shall
not accept any note, warrant or other instrument (except a check or other
instrument for the immediate payment of money) with respect to any Account
without the written consent of the Agent (it being understood that if the Agent
consents to the acceptance of any such note, warrant or other instrument, it
shall be considered
Exhibit E-14
as evidence of the Account and not payment thereof, and such Grantor shall
promptly deliver such note, warrant or instrument to the Agent appropriately
endorsed and regardless of the form of presentment, demand, notice of dishonor,
protest, and notice of protest with respect thereto, the Grantors shall remain
liable thereon until such note, warrant or instrument is paid in full); (D) it
shall notify the Agent promptly of all disputes and claims (other than as to
discounts required by contract or agreement made in the ordinary course of
business and corrections of billing errors in the ordinary course of business)
with any Account Debtor, involving in excess of fifty thousand dollars ($50,000)
for any single dispute or claim and in excess of one hundred thousand dollars
($100,000) for all such disputes and claims, whether any such Account Debtor is
acting in its capacity as an Account Debtor or in its individual capacity; (E)
it shall not grant any discount, credit or allowance with respect to any Account
to any Account Debtor without the consent of the Agent, except for: (i)
discounts required by contract or agreement made in the ordinary course of
business and corrections of billing errors in the ordinary course of business;
and (ii) any other discount which does not exceed fifty thousand dollars
($50,000), provided that the aggregate amount of discounts permitted pursuant to
this clause (ii) during any calendar year with respect to any single Account
Debtor shall not exceed one hundred thousand dollars ($100,000); (F) if an
Account Debtor returns any inventory to such Grantor when no Event of Default
exists, then such Grantor shall promptly determine the reason for such return
and shall issue a credit memorandum to the Account Debtor in the appropriate
amount; provided that such Grantor shall immediately report to the Agent in the
event that the aggregate amount of such returns exceed one hundred thousand
dollars ($100,000) during any year with respect to any single Account Debtor
(which report shall indicate the reasons for the returns and the locations and
condition of the returned inventory; and (G) if an Account Debtor returns any
inventory to such Grantor when an Event of Default exists and such inventory is
returned in a condition that makes it unfit for resale in the ordinary course of
business, such Grantor shall: (i) hold such returned inventory in trust for the
Agent; (ii) segregate all such returned inventory from all of its other
Property; (iii) dispose of such returned inventory solely according to the
written instructions of the Agent; and (iv) not issue any credits or allowances
with respect thereto without the prior written consent of the Required Lenders.
All returned inventory shall remain subject to the Agent's security interest.
Whenever any inventory is returned for which an Account had been created, such
Account shall be credited to the extent of such returned Inventory, with the
credit reported in the Weekly Collateral Certificate; and
(vi) it shall use its best efforts to keep in full force and effect
any Supporting Obligation or Collateral Support relating to any Receivable.
(c) Delivery and Control of Receivables. With respect to any Receivable
in excess of $25,000 individually or $50,000 in the aggregate that is evidenced
by, or constitutes, tangible Chattel Paper or Instruments, each Grantor shall
cause each originally executed copy thereof to be delivered to the Agent (or its
agent or designee) appropriately indorsed to the Agent or indorsed in blank: (i)
with respect to any such Receivables in existence on the date hereof, on or
prior to the date hereof and (ii) with respect to any such Receivables hereafter
arising, within ten (10) days of such Grantor acquiring rights therein. With
respect to any Receivable in excess of $25,000 individually or $50,000 in the
aggregate which would constitute "electronic chattel paper" under the UCC, each
Grantor shall take all steps necessary to give the Agent control over such
Receivables (within the meaning of Section 9-105 of the UCC): (i) with respect
to any such Receivables in existence on the date hereof, on or prior to the date
hereof and (ii) with respect to any such Receivables hereafter arising, within
ten (10) days of such Grantor acquiring rights therein. Any Receivable not
otherwise required to be delivered or subjected to the control of the Agent in
accordance with this subsection (c) shall be delivered or subjected to such
control upon request of the Agent.
(d) Collection of Accounts.
Exhibit E-15
(i) On or before the Closing Date, each Grantor shall (A) direct all
of its Account Debtors to make all payments on Accounts directly to one or more
Lock Boxes or Controlled Accounts, (B) establish Controlled Accounts with the
Agent or such other financial institutions as shall be acceptable to the Agent,
into which all payments received in the Lock Boxes shall be deposited, and into
which the Grantors will promptly deposit all payments made for inventory or
services sold or rendered by the Grantors and received by the Grantors in the
identical form in which such payments were made, whether by cash or check;
provided that any cash payments received by any Grantor may be deposited into
one of the deposit accounts listed on Schedule VIII (the "Initial Accounts") and
such deposit accounts shall not be required to be subject to Controlled Account
Agreements prior to October 12, 2002, provided, further, that the amount on
deposit in the Initial Accounts in the aggregate shall not at any time exceed
$100,000 and all amounts on deposit in the Initial Accounts shall be transferred
no less frequently than weekly to a Controlled Account, and (C) cause each
Subsidiary and Affiliate, and any other Person acting for or in concert with the
Grantors or their Subsidiaries that receives any monies, checks, notes, drafts
or other payments relating to or as proceeds of Accounts or other Collateral, to
promptly remit the same (or cause the same to be remitted) in hand to the
Controlled Accounts.
(ii) The Grantors agree to pay all reasonable fees, costs and
expenses which the Grantors and their Subsidiaries incur in connection with
opening and maintaining any Lock Box and Controlled Account. All of such fees,
costs and expenses which remain unpaid pursuant to any Lock Box or Controlled
Account Agreement, to the extent same shall have been paid by the Agent
hereunder, shall constitute Loans under the Credit Agreement, shall be payable
to the Agent by the Grantors upon demand, and, until paid, shall bear interest
at the highest rate then applicable to Base Rate Loans. All checks, drafts,
instruments and other items of payment or proceeds of Collateral delivered to
the Agent in kind shall be endorsed by the Grantors and their Subsidiaries, to
the Agent, and, if that endorsement of any such item shall not be made for any
reason, the Agent is hereby irrevocably authorized to endorse the same on behalf
of the Grantors and their Subsidiaries, notwithstanding the inclusion on any
such item of restrictive notations such as "paid in full", "balance of account",
or other restrictions.
(iii) Without limiting Section 6.1, for the purpose of this Section
4.3(d), and effective so long as this Agreement shall remain in force and
effect, each of the Grantors, on behalf of itself and its Subsidiaries,
irrevocably hereby makes, constitutes and appoints the Agent (and all Persons
designated by the Agent for that purpose) as such Grantor's or such Subsidiary's
true and lawful attorney and agent-in-fact (A) to endorse the name of such
Grantor or its Subsidiary upon said items of payment and/or proceeds of
Collateral of the Grantors and upon any chattel paper, document, instrument,
invoice or similar document or agreement relating to any account receivable of
the Grantors and their Subsidiaries or goods pertaining thereto; (B) to take
control in any manner of any item of payment or proceeds thereof; (C) to have
access to any Lock Box or postal box into which any checks or other forms of
payment in respect of accounts receivable of the Grantors and their Subsidiaries
are remitted; and (D) open all mail containing checks and other forms of payment
in respect of accounts receivable of the Grantors and their Subsidiaries and
process such checks and other forms of payment.
(iv) The Agent (and all Persons designated by the Agent for such
purpose) may, at any time and from time to time after the occurrence and during
the continuance of an Event of Default, whether before or after notification to
any Account Debtor and whether before or after the maturity of any of the
Secured Obligations, (A) enforce collection of any accounts receivable or
contract rights of the Grantors and their Subsidiaries by suit or otherwise; (B)
exercise all of the rights and remedies of the Grantors and their Subsidiaries
with respect to proceedings brought to collect any accounts receivable; (C)
surrender, release or exchange all or any part of any accounts receivable of the
Grantors and their Subsidiaries, or compromise or extend or renew for any period
(whether or not longer than the original period) any indebtedness thereunder;
(D) sell or assign any account receivable of the Grantors and their Subsidiaries
upon such terms, for such amount and at such time or times as the Agent deems
advisable;
Exhibit E-16
(E) prepare, file and sign the names of the Grantors and their Subsidiaries on
any proof of claim in bankruptcy or other similar document against any account
debtor indebted on an account receivable of the Grantors and their Subsidiaries;
and (F) do all other acts and things which are necessary, in the Agent's sole
discretion, to fulfill the Secured Obligations and to allow the Agent to collect
the accounts receivable. In addition to any other provision hereof or in any of
the other Facility Documents, the Agent may at any time on or after the
occurrence of an Event of Default, at the sole expense of Grantors and their
Subsidiaries, notify any parties obligated on any of the accounts receivable of
the Grantors and their Subsidiaries to make payment directly to the Agent of any
amounts due or to become due thereunder.
(v) In the event that any Account Debtor remits any payments
directly to such Grantor rather than to a Lock Box or a Controlled Account, such
Grantor shall immediately take all steps, if any, necessary or advisable to
ensure the validity, perfection, priority and, if applicable, control of the
Agent over such payments (including, without limitation, delivery thereof to the
Agent) and pending any such action such Grantor shall be deemed to hold such
payments in trust for the benefit of the Agent and such payments shall be
segregated from all other property of such Grantor.
4.4 Investment Related Property.
4.4.1. Pledged Equity Interests
(a) Representations and Warranties. Each Grantor hereby represents and
warrants, on each Representation Date, that:
(i) Schedule III hereto (as such schedule may be amended or
supplemented from time to time) sets forth under the headings "Pledged Stock,"
"Pledged LLC Interests," "Pledged Partnership Interests" and "Pledged Trust
Interests," respectively, all of the Pledged Stock, Pledged LLC Interests,
Pledged Partnership Interests and Pledged Trust Interests owned by such Grantor
and such Pledged Equity Interests constitute the percentage of issued and
outstanding shares of stock, percentage of membership interests, percentage of
partnership interests or percentage of beneficial interest of the respective
issuers thereof indicated on such Schedule;
(ii) it is the record and beneficial owner of the Pledged Equity
Interests free of all Liens, rights or claims of other Persons other than
Permitted Liens and there are no outstanding warrants, options or other rights
to purchase, or shareholder, voting trust or similar agreements outstanding with
respect to, or property that is convertible into, or that requires the issuance
or sale of, any Pledged Equity Interests;
(iii) without limiting the generality of Section 4.1(a)(vi), no
consent of any Person including any other general or limited partner, any other
member of a limited liability company, any other shareholder or any other trust
beneficiary is necessary or desirable in connection with the creation,
perfection or first priority status of the security interest of the Agent in any
Pledged Equity Interests or the exercise by the Agent of the voting or other
rights provided for in this Agreement or the exercise of remedies in respect
thereof;
(iv) none of the Pledged LLC Interests or the Pledged Partnership
Interests are or represent interests in issuers that are: (a) registered as
investment companies, (b) are dealt in or traded on securities exchanges or
markets, or (c) have opted to be treated as securities under the uniform
commercial code of any jurisdiction;
(b) Covenants and Agreements. Each Grantor hereby covenants and agrees
that:
Exhibit E-17
(i) without the prior written consent of the Agent, it shall not
vote to enable or take any other action to: (a) other than as permitted under
the Credit Agreement, amend or terminate any partnership agreement, limited
liability company agreement, certificate of incorporation, by-laws or other
organizational documents in any way that materially changes the rights of such
Grantor with respect to any Investment Related Property or adversely affects the
validity, perfection or priority of the Agent's security interest, (b) other
than as permitted under the Credit Agreement, permit any issuer of any Pledged
Equity Interest to issue any additional stock, partnership interests, limited
liability company interests or other equity interests of any nature or to issue
securities convertible into or granting the right of purchase or exchange for
any stock or other equity interest of any nature of such issuer, (c) other than
as permitted under the Credit Agreement, permit any issuer of any Pledged Equity
Interest to dispose of all or a material portion of its assets, (d) waive any
default under or breach of any terms of any organizational document relating to
the issuer of any Pledged Equity Interest or the terms of any Pledged Debt, or
(e) cause any issuer of any Pledged Partnership Interests or Pledged LLC
Interests which are not securities (for purposes of the UCC) on the date hereof
to elect or otherwise take any action to cause such Pledged Partnership
Interests or Pledged LLC Interests to be treated as securities for purposes of
the UCC;
(ii) it shall comply with all of its obligations under any
partnership agreement or limited liability company agreement relating to Pledged
Partnership Interests or Pledged LLC Interests and shall enforce all of its
rights with respect to any Investment Related Property;
(iii) without the prior written consent of the Agent, it shall not
permit any issuer of any Pledged Equity Interest to merge or consolidate unless
such merger or consolidation is permitted by the Credit Agreement and (A) such
issuer creates a security interest in favor of the Agent that is perfected by a
filed financing statement (that is not effective solely under section 9-508 of
the UCC) in collateral in which such new debtor has or acquires rights, and (B)
all the outstanding capital stock or other equity interests of the surviving or
resulting corporation, limited liability company, partnership or other entity
is, upon such merger or consolidation, pledged hereunder and no cash, securities
or other property is distributed in respect of the outstanding equity interests
of any other constituent Grantors; provided, that if the surviving or resulting
corporation upon any such merger or consolidation constitutes an issuer which is
a Foreign Subsidiary, then such Grantor shall only be required to pledge equity
interests in accordance with Section 2.2; and
(iv) each Grantor consents to the grant by each other Grantor of a
security interest in all Investment Related Property to the Agent and, without
limiting the foregoing, consents to the transfer of any Pledged Partnership
Interest and any Pledged LLC Interest to the Agent or its nominee following an
Event of Default and to the substitution of the Agent or its nominee as a
partner in any partnership or as a member in any limited liability company with
all the rights and powers related thereto.
4.4.2. Pledged Debt
(a) Representations and Warranties. Each Grantor hereby represents and
warrants, on each Representation Date, that Schedule III hereto (as such
schedule may be amended or supplemented from time to time) sets forth under the
heading "Pledged Debt" all of the Pledged Debt owned by such Grantor and all of
such Pledged Debt (i) to the knowledge of such Grantor, (x) has been duly
authorized, authenticated or issued and delivered and (y) is the legal, valid
and binding obligation of the issuers thereof, (ii) is not in default and (iii)
constitutes all of the issued and outstanding inter-company indebtedness
evidenced by an instrument or certificated security of the respective issuers
thereof owing to such Grantor.
Exhibit E-18
(b) Covenants and Agreements. Each Grantor hereby covenants and agrees
that it shall notify the Agent of any default under any Pledged Debt that has
caused, either in any case or in the aggregate, a Material Adverse Effect.
4.4.3. Investment Accounts
(a) Representations and Warranties. Each Grantor hereby represents and
warrants, on each Representation Date, that:
(i) Schedule III hereto (as such schedule may be amended or
supplemented from time to time) sets forth under the headings "Securities
Accounts" and "Commodities Accounts," respectively, all of the Securities
Accounts and Commodities Accounts in which such Grantor has an interest. Such
Grantor is the sole entitlement holder of each such Securities Account and
Commodities Account, and such Grantor has not consented to, and is not otherwise
aware of, any Person (other than the Agent pursuant hereto) having "control"
(within the meanings of Sections 8-106 and 9-106 of the UCC) over, or any other
interest in, any such Securities Account or Commodity Account or any securities
or other property credited thereto;
(ii) Schedule III hereto (as such schedule may be amended or
supplemented from time to time) sets forth under the heading "Deposit Accounts"
all of the Deposit Accounts in which such Grantor has an interest and such
Grantor is the sole account holder of each such Deposit Account and such Grantor
has not consented to, and is not otherwise aware of, any Person (other than the
Agent pursuant hereto) having either sole dominion and control (within the
meaning of common law) or "control" (within the meaning of Section 9-104 of the
UCC) over, or any other interest in, any such Deposit Account or any money or
other property deposited therein; and
(iii) each Grantor has taken all actions necessary or desirable,
including those specified in Sections 4.4.3(b) and 4.4.4(b), to: (a) establish
the Agent's "control" (within the meanings of Sections 8-106 and 9-106 of the
UCC) over any portion of the Investment Related Property constituting
Certificated Securities, Uncertificated Securities, Securities Accounts,
Securities Entitlements or Commodity Accounts (each as defined in the UCC); (b)
establish the Agent's "control" (within the meaning of Section 9-104 of the UCC)
over all Deposit Accounts; and (c) deliver all Instruments to the Agent.
(b) Delivery and Control
(i) Each Grantor agrees that with respect to any Investment Related
Property owned by such Grantor consisting of Securities Accounts or Securities
Entitlements, it shall cause the securities intermediary maintaining such
Securities Account or Securities Entitlement to enter into an agreement
substantially in the form of Exhibit C hereto pursuant to which it shall agree
to comply with the Agent's "entitlement orders" without further consent by such
Grantor. Each Grantor also agrees that with respect to any Investment Related
Property owned by such Grantor that is a "Deposit Account," it shall cause the
depositary institution maintaining such account to enter into a Controlled
Account Agreement, pursuant to which the Agent shall have both sole dominion and
control over such Deposit Account (within the meaning of the common law) and
"control" (within the meaning of Section 9-104 of the UCC) over such Deposit
Account. Each Grantor shall have entered into such control agreement or
agreements with respect to: (i) any Securities Accounts, Securities Entitlements
or Deposit Accounts that exist on the Representation Date, as of or prior to the
Representation Date and (ii) any Securities Accounts, Securities Entitlements or
Deposit Accounts that are created or acquired after the Representation Date, as
of or prior to the deposit or transfer of any such Securities Entitlements or
funds, whether constituting moneys or investments, into such Securities Accounts
or Deposit Accounts.
Exhibit E-19
4.4.4. Investment Related Property Generally
(a) Covenants and Agreements. Each Grantor hereby covenants and agrees
that:
(i) in the event it acquires rights in any Investment Related
Property after the date hereof, it shall immediately notify the Agent thereof
and deliver to the Agent supplements to Schedules hereto identifying such new
Investment Related Property and all other Investment Related Property.
Notwithstanding the foregoing, it is understood and agreed that the security
interest of the Agent shall attach to all Investment Related Property
immediately upon any Grantor's acquisition of rights therein and shall not be
affected by the failure of any Grantor to deliver a supplement to Schedule III
as required hereby;
(ii) in the event such Grantor receives any dividends, interest or
distributions on any Investment Related Property, or any securities or other
property upon the merger, consolidation, liquidation or dissolution of any
issuer of any Investment Related Property, then (a) such dividends, interest or
distributions and securities or other property shall be included in the
definition of Collateral without further action and (b) such Grantor shall
immediately take all steps, if any, necessary or advisable to ensure the
validity, perfection, priority and, if applicable, control of the Agent over
such Investment Related Property (including, without limitation, delivery
thereof to the Agent) and pending any such action such Grantor shall be deemed
to hold such dividends, interest, distributions, securities or other property in
trust for the benefit of the Agent and shall be segregated from all other
property of such Grantor; and
(iii) if any issuer of any Investment Related Property is located in
a jurisdiction outside of the United States, such Grantor shall, upon the
request of the Agent, take such additional actions, including, without
limitation, causing the issuer to register the pledge on its books and records
or making such filings or recordings, in each case as may be necessary or
advisable, under the laws of such issuer's jurisdiction to insure the validity,
perfection and priority of the security interest of the Agent. Upon the
occurrence of an Event of Default and during the continuance thereof, the Agent
shall have the right, without notice to any Grantor, to transfer all or any
portion of the Investment Related Property to its name or the name of its
nominee or agent. In addition, the Agent shall have the right at any time,
without notice to any Grantor, to exchange any certificates or instruments
representing any Investment Related Property for certificates or instruments of
smaller or larger denominations.
(b) Delivery and Control.
(i) Each Grantor agrees that with respect to any Investment Related
Property in which it currently has rights it shall comply with the provisions of
this Section 4.4.4(b) on or before the Representation Date and with respect to
any Investment Related Property hereafter acquired by such Grantor it shall
comply with the provisions of this Section 4.4.4(b) immediately upon acquiring
rights therein, in each case in form and substance satisfactory to the Agent.
Each Grantor agrees that with respect to any Investment Related Property that is
represented by a certificate or that is an "instrument" (other than any
Investment Related Property credited to a Securities Account) it shall cause
such certificate or instrument to be delivered to the Agent, indorsed in blank
by an "effective indorsement" (as defined in Section 8-107 of the UCC),
regardless of whether such certificate constitutes a "certificated security" for
purposes of the UCC. With respect to any Investment Related Property that is an
"uncertificated security" for purposes of the UCC (other than any
"uncertificated securities" credited to a Securities Account), it shall cause
the issuer of such uncertificated security to either (i) register the Agent as
the registered owner thereof on the books and records of the issuer or (ii)
execute an agreement in the
Exhibit E-20
form and substance satisfactory to the Agent, pursuant to which such issuer
agrees to comply with the Agent's instructions with respect to such
uncertificated security without further consent by such Grantor.
(c) Voting and Distributions.
(i) So long as no Event of Default shall have occurred and be
continuing:
(A) except as otherwise provided under the covenants and
agreements relating to Investment Related Property in this Agreement or
elsewhere herein or in the Credit Agreement, each Grantor shall be entitled to
exercise or refrain from exercising any and all voting and other consensual
rights pertaining to the Investment Related Property or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Credit
Agreement; provided, no Grantor shall exercise or refrain from exercising any
such right if the Agent shall have notified such Grantor that, in the Agent's
reasonable judgment, such action would have a Material Adverse Effect on the
value of the Investment Related Property or any part thereof; and provided
further, such Grantor shall give the Agent at least five (5) Business Days prior
written notice of the manner in which it intends to exercise, or the reasons for
refraining from exercising, any such right; it being understood, however, that
neither the voting by such Grantor of any Pledged Stock for, or such Grantor's
consent to, the election of directors (or similar governing body) at a regularly
scheduled annual or other meeting of stockholders or with respect to incidental
matters at any such meeting, nor such Grantor's consent to or approval of any
action otherwise permitted under this Agreement and the Credit Agreement, shall
be deemed inconsistent with the terms of this Agreement or the Credit Agreement
within the meaning of this Section 4.4.4(c)(i)(A), and no notice of any such
voting or consent need be given to the Agent; and
(B) the Agent shall promptly execute and deliver (or cause to be
executed and delivered) to each Grantor all proxies, and other instruments as
such Grantor may from time to time reasonably request for the purpose of
enabling such Grantor to exercise the voting and other consensual rights when
and to the extent which it is entitled to exercise pursuant to clause (A) above;
(ii) Upon the occurrence and during the continuation of an Event of
Default:
(A) all rights of each Grantor to exercise or refrain from
exercising the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant hereto shall cease and all such rights shall
thereupon become vested in the Agent who shall thereupon have the sole right to
exercise such voting and other consensual rights; and
(B) in order to permit the Agent to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions which it may be entitled to
receive hereunder: (1) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to the Agent all proxies, dividend payment orders
and other instruments as the Agent may from time to time reasonably request and
(2) each Grantor acknowledges that the Agent may utilize the power of attorney
set forth in Section 6.
4.5 Material Contracts.
(a) Representations and Warranties. Each Grantor hereby represents and
warrants, on each Representation Date, that:
(i) Schedule IV hereto (as such schedule may be amended or
supplemented from time to time) sets forth all of the Material Contracts to
which such Grantor has rights;
Exhibit E-21
(ii) the Material Contracts, true and complete copies (including
any amendments or supplements thereof) of which have been furnished to the
Agent, have been duly authorized, executed and delivered by all parties thereto,
are in full force and effect and are binding upon and enforceable against all
parties thereto in accordance with their respective terms. There exists no
default under any Material Contract by such Grantor or, to the knowledge of such
Grantor, any other party thereto and neither such Grantor, nor to its knowledge,
any other Person party thereto is likely to become in default thereunder and no
Person party thereto has any defenses, counterclaims or right of set-off with
respect to any Material Contract. Each Person party to a Material Contract
(other than any Grantor) has executed and delivered to the applicable Grantor a
consent to the assignment of such Material Contract to the Agent pursuant to
this Agreement; and
(iii) other than as indicated on Schedule IV hereto, no Material
Contract prohibits assignment or requires consent of or notice to any Person in
connection with the assignment to the Agent hereunder, except such as has been
given or made.
(b) Covenants and Agreements. Each Grantor hereby covenants and agrees
that:
(i) in addition to any rights under the Section of this Agreement
relating to Receivables, the Agent may at any time notify, or require any
Grantor to so notify, the counterparty on any Material Contract of the security
interest of the Agent therein. In addition, after the occurrence and during the
continuance of an Event of Default, the Agent may upon written notice to the
applicable Grantor, notify, or require any Grantor to notify, the counterparty
that such counterparty is to make all payments under the Material Contracts
directly to the Agent;
(ii) each Grantor shall deliver promptly to the Agent a copy of
each material demand, notice or document received by it relating in any way to
any Material Contract;
(iii) each Grantor shall deliver promptly to the Agent, and in
any event within ten (10) Business Days, after (1) any Material Contract of such
Grantor is terminated or amended in a manner that is materially adverse to such
Grantor or (2) any new Material Contract is entered into by such Grantor, a
written statement describing such event, with copies of such material amendments
or new contracts, provided that if any such Material Contract contains
restrictions on the disclosure of the terms thereof, the Agent shall agree to
keep the terms of such Material Contract confidential in accordance with the
terms thereof;
(iv) it shall perform in all material respects all of its
obligations with respect to the Material Contracts;
(v) it shall promptly and diligently in accordance with its
reasonable business judgment exercise each material right (except the right of
termination) it may have under any Material Contract, any Supporting Obligation
or Collateral Support, in each case, at its own expense, and in connection with
such collections and exercise, such Grantor shall take such action as such
Grantor or the Agent may deem necessary or advisable;
(vi) it shall use its best efforts to keep in full force and
effect any Supporting Obligation or Collateral Support relating to any Material
Contract; and
(vii) with respect to any Non-Assignable Contract, each Grantor
shall, unless the relevant restrictions on transfer are overridden by Section
9-406 of the UCC, within thirty (30) days of the date hereof with respect to any
Non-Assignable Contract in effect on the date hereof and within thirty (30) days
after entering into any Non-Assignable Contract after the Closing Date, request
in writing the
Exhibit E-22
consent of the counterparty or counterparties to the Non-Assignable Contract
pursuant to the terms of such Non-Assignable Contract or applicable law to the
assignment or granting of a security interest in such Non-Assignable Contract to
Agent and use its best efforts to obtain such consent as soon as practicable
thereafter.
4.6 Letter of Credit Rights.
(a) Representations and Warranties. Each Grantor hereby represents and
warrants, on each Representation Date, that:
(i) all letters of credit to which such Grantor has rights are
listed on Schedule V (as such schedule may be amended or supplemented from time
to time); and
(ii) it has obtained the consent of each issuer of any letter of
credit to the assignment of the proceeds of the letter of credit to the Agent.
(b) Covenants and Agreements. Each Grantor hereby covenants and agrees
that with respect to any letter of credit hereafter arising it shall use its
best efforts to obtain the consent of the issuer thereof to the assignment of
the proceeds of the letter of credit to the Agent and shall immediately notify
the Agent thereof and deliver to the Agent supplements to Schedules hereto.
4.7 Intellectual Property.
(a) Representations and Warranties. Except as disclosed in Schedule
VI(H) (as such schedule may be amended or supplemented from time to time), each
Grantor hereby represents and warrants, on each Representation Date, that:
(i) Schedule VI (as such schedule may be amended or supplemented
from time to time) sets forth a true and complete list of (i) all United States,
state and foreign registrations of and applications for Patents, Trademarks, and
Copyrights owned by each Grantor, (ii) all registrations for Internet domain
names owned by each Grantor, and (iii) all Patent Licenses, Trademark Licenses,
Copyright Licenses, and Trade Secret Licenses (A) granting rights to any third
party to use any Intellectual Property owned by or licensed to any Grantor or
(B) granting rights to any Grantor to use Intellectual Property owned by a third
party and that is material to the business of such Grantor;
(ii) it is listed in the records of the applicable United States,
state or foreign office or agency as the sole owner of record for each of its
issued Patents and registrations and applications for other Intellectual
Property included in the Collateral;
(iii) it is the sole and exclusive owner of the entire right,
title, and interest in and to all Intellectual Property on Schedule VI (as such
schedule may be amended or supplemented from time to time), and owns or has the
valid right to use all other Intellectual Property used in or necessary to
conduct its business free and clear of all Liens, claims, encumbrances and
material licenses, granted by such Grantor, except for Permitted Liens and the
Intellectual Property Licenses set forth on Schedule VI (as such schedule may be
amended or supplemented from time to time);
(iv) all Intellectual Property owned by such Grantor and, to the
best of such Grantor's knowledge, licensed to such Grantor: (i) is subsisting,
(ii) to the best of such Grantor's knowledge is valid and enforceable, and (iii)
has not been adjudged invalid or unenforceable, in whole or in part, and such
Grantor has performed all acts and has paid all renewal, maintenance, and other
fees and taxes required to maintain each item of Intellectual Property set forth
on Schedule VI in full force and effect;
Exhibit E-23
(v) no action or proceeding before any court or administrative
authority is pending or, to the best of Grantor's knowledge, threatened against
such Grantor challenging the validity of any Intellectual Property, or such
Grantor's rights to register, own, use, or license any Intellectual Property;
(vi) such Grantor has been using statutory notices of
registration in connection with its use of registered Trademarks, proper marking
practices in connection with the use of Patents, and appropriate notices of
copyright in connection with the publication of Copyrights material to the
business of such Grantor;
(vii) such Grantor uses adequate and consistent standards of
quality in the manufacture, distribution, and sale of all products and services
sold under or in connection with each Trademark owned by such Grantor and has
taken all action necessary to insure that licensees of each such Trademark use
such adequate and consistent standards of quality;
(viii) to the knowledge of such Grantor, the conduct of its
business does not infringe upon any trademark, patent, copyright, trade secret
or similar intellectual property right owned or controlled by a third party; and
no claim has been made, is pending, or to the best of such Grantor's knowledge,
threatened, that the conduct of such Grantor's business or the use of any
Intellectual Property owned or used by Grantor violates the asserted rights of
any third party;
(ix) no third party is, to the best of such Grantor's knowledge,
infringing upon any Intellectual Property owned or used by such Grantor and no
claims of infringement have been asserted by such Grantor that remain
unresolved;
(x) no settlements or consents, covenants not to xxx,
nonassertion assurances, or releases have been entered into by such Grantor, or
to which such Grantor is bound, that adversely effect any Grantor's rights to
own or use any Intellectual Property;
(xi) such Grantor has not entered into any contracts to assign,
sell, transfer, or grant an option to assign, sell or transfer any Intellectual
Property, that has not been terminated or released;
(xii) such Grantor is not a party to any contract pursuant to
which it has obtained the exclusive rights to use any third party's Copyrights,
except as set forth on Schedule VI, and no license of Intellectual Property to
which such Grantor is a party is reasonably likely to be construed as an
assignment of such licensed Intellectual Property to such Grantor; and
(xiii) there is no effective financing statement or other
document or instrument now executed, or on file or recorded in any public
office, granting a security interest in or otherwise encumbering any part of the
Intellectual Property, other than in favor of the Agent or for which such
Grantor has delivered proper termination statements to the Agent.
(b) Covenants and Agreements. Each Grantor hereby covenants and agrees
as follows:
(i) except for Intellectual Property that is not in use and has
no material value as determined by such Grantor in its reasonable business
judgment, such Grantor shall not do any act or omit to do any act whereby any of
the Intellectual Property included in the Collateral may lapse, or become
abandoned, dedicated to the public, or unenforceable;
(ii) except for Copyrights of no material value, such Grantor
shall, within thirty (30) days of the creation or acquisition of any
Copyrightable work, apply to register the Copyright in the
Exhibit E-24
United States Copyright Office and such Grantor shall record its interest in any
exclusive license of a Copyright to such Grantor in the U.S. Copyright Office
within thirty (30) days of the execution of such license;
(iii) such Grantor shall promptly notify the Agent if it knows or
has reason to know that any item of Intellectual Property included in the
Collateral that is in use or has more than negligible value may become (A)
abandoned or dedicated to the public or placed in the public domain, (B) invalid
or unenforceable, or (C) subject to any adverse determination or development
(including the institution of proceedings) in any action or proceeding in the
United States Patent and Trademark Office, the United States Copyright Office,
any state registry, any foreign counterpart of the foregoing, or any court
arbitral tribunal or regulatory agency, and such event could be reasonably
expected to have a Material Adverse Effect;
(iv) such Grantor shall take all reasonable steps in the United
States Patent and Trademark Office, the United States Copyright Office, any
state registry or any foreign counterpart of the foregoing, including the
payment of applicable fees, to pursue any application for, and maintain any
issued Patent and registration of, each Trademark, Patent, and Copyright owned
by such Grantor that is now or shall become included in the Collateral
including, but not limited to, those items on Schedule VI (as such schedule may
be amended or supplemented from time to time) except for those items of
Intellectual Property that are no longer in use and have no material value;
(v) in the event that any Intellectual Property owned by or
exclusively licensed to such Grantor is infringed, misappropriated, diluted or
otherwise violated by a third party, such Grantor shall promptly take all
actions deemed advisable in its reasonable business judgment to stop such
infringement, misappropriation, dilution or other violation and to protect its
exclusive rights in such Intellectual Property including, but not limited to,
the initiation of a suit for injunctive relief and to recover damages;
(vi) such Grantor shall maintain the quality of products and
services sold under any Trademark owned by such Grantor at a level that is at
least substantially consistent to that prevailing as of the date hereof, and
such Grantor shall take all steps necessary to insure that licensees of such
Trademarks observe the standards of quality contained in their related license
agreements;
(vii) such Grantor shall take all steps reasonably necessary to
protect the secrecy of all material Trade Secrets;
(viii) such Grantor shall promptly (but in any event within
thirty (30) days) report to the Agent any and all of the following: (i) the
filing by such Grantor or on its behalf of any application to register any
Intellectual Property owned by such Grantor in whole or in part, with the United
States Patent and Trademark Office, the United States Copyright Office, any
state registry or foreign counterpart of the foregoing, (ii) the registration of
any Intellectual Property owned by such Grantor in whole or in part by any such
office, (iii) the acquisition by such Grantor of any issued Patent, or
application or registration of any other Intellectual Property, or (iv) the
existence of any contract granting an Intellectual Property license which is in
the nature of a contract described in Section 4.7(a)(xii), and, in each case,
such Grantor shall immediately notify the Agent thereof and deliver to the Agent
supplements to Schedules hereto and signed counterparts of a Trademark Security
Agreement, substantially in the form of Exhibit A or such other document
suitable for recording a security interest in the applicable type of
Intellectual Property, together with all supplements to the schedules thereto;
(ix) except with the prior consent of the Agent or as permitted
under the Credit Agreement, such Grantor shall not execute, and there will not
be on file in any public office, any
Exhibit E-25
financing statement or other document or instrument, except financing statements
or other documents or instruments filed or to be filed in favor of the Agent and
such Grantor shall not sell, assign, transfer, license, grant any option with
respect to, or create any Lien upon, any Intellectual Property, except for
Permitted Liens and the Liens created by and under this Security Agreement and
the other Facility Documents;
(x) it shall use commercially reasonable efforts to avoid the
inclusion in any Patent License, Copyright License, Trademark License, Trade
Secret License or any other Contract regarding Intellectual Property to which it
hereafter becomes a party, of provisions that would impair or prevent the
creation of a security interest in, or the assignment of, such Grantor's rights
and interests under such Contract or in, any Intellectual Property acquired
under such Contracts;
(xi) it shall use statutory notices of registration in connection
with its use of any of any registered Trademarks, proper marking practices in
connection with the use of Patents, if any, and appropriate notices of copyright
in connection with the publication of material Copyrighted works; and
(xii) it shall continue to collect, at its own expense, all
amounts due or to become due to such Grantor in respect of any Intellectual
Property. In connection with such collections, such Grantor may take (and, at
the Agent's reasonable direction, shall take) such action as such Grantor or the
Agent may deem reasonably necessary or advisable to enforce collection of such
amounts. Notwithstanding the foregoing, the Agent shall have the right at any
time, to notify, or require any Grantor to notify, any obligors with respect to
any such amounts of the existence of the security interest created hereby.
4.8 Commercial Tort Claims.
(a) Representations and Warranties. Each Grantor hereby represents and
warrants, on each Representation Date, that Schedule VII (as such schedule may
be amended or supplemented from time to time) sets forth all Commercial Tort
Claims of such Grantor in excess of $100,000 individually or $250,000 in the
aggregate; and
(b) Covenants and Agreements. Each Grantor hereby covenants and agrees
that with respect to any Commercial Tort Claim in excess of $100,000
individually or $250,000 in the aggregate hereafter arising it shall immediately
notify the Agent thereof and deliver to the Agent supplements to Schedules
hereto identifying such new Commercial Tort Claim.
4.9 Cash Proceeds. In addition to the rights of the Agent specified in
the Section of this Agreement relating to Receivables with respect to payments
of Receivables, Cash Proceeds shall be held by each Grantor in trust for the
Agent, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Agent in the exact form received
by such Grantor (duly indorsed by such Grantor to the Agent, if required).
SECTION 5 ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES.
5.1 Access; Right of Inspection. The Agent shall at all times have full
and free access during regular business hours and upon reasonable prior notice
(except that no such prior notice shall be required after the occurrence and
during the continuance of any Default or Event of Default) to all the books,
correspondence and records of each Grantor, and the Agent and its
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and each Grantor agrees to render to the Agent, at such
Grantor's cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. The Agent and its representatives
shall at all times also have the right to
Exhibit E-26
enter any premises of each Grantor during regular business hours and upon
reasonable prior notice (except that no such prior notice shall be required
after the occurrence and during the continuance of any Default or Event of
Default) and inspect any property of each Grantor where any of the Collateral of
such Grantor granted pursuant to this Agreement is located for the purpose of
inspecting the same, observing its use or otherwise protecting its interests
therein.
5.2 Further Assurances.
(a) Each Grantor agrees that from time to time, at the expense of such
Grantor, it shall promptly Authenticate, execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Agent may reasonably request, in order to create and/or
maintain the validity, perfection or priority of and protect any security
interest granted or purported to be granted hereby or to enable the Agent to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor
shall:
(i) file such financing or continuation statements, or amendments
thereto, and execute and deliver such other agreements, instruments,
endorsements, powers of attorney or notices, as may be necessary or desirable,
or as the Agent may reasonably request, in order to perfect and preserve the
security interests granted or purported to be granted hereby;
(ii) take all actions necessary to ensure the recordation of
appropriate evidence of the liens and security interest granted hereunder in
Intellectual Property with any intellectual property registry in which said
Intellectual Property is registered or in which an application for registration
is pending including, without limitation, the United States Patent and Trademark
Office, the United States Copyright Office, the various Secretaries of State,
and the foreign counterparts of any of the foregoing;
(iii) at any reasonable time, upon request by the Agent, allow
inspection of the Collateral by the Agent, or persons designated by the Agent;
(iv) at the Agent's request, appear in and defend any action or
proceeding that may affect such Grantor's title to or the Agent's security
interest in all or any part of the Collateral; and
(v) deliver to the Agent warehouse receipts covering any portion
of the Collateral located in warehouses and for which warehouse receipts are
issued and transfer inventory to warehouses designated by the Agent from time to
time.
(b) Each Grantor hereby authorizes the Agent to take all steps it deems
reasonably necessary to maintain and preserve the Collateral, consistent with
each Grantor's obligations to do so hereunder, including, with respect to
Intellectual Property included in the Collateral, the making of additional
filings, the payment of maintenance fees, and the defense of challenges to such
Grantor's title or validity, all at such Grantor's expense.
(c) Each Grantor hereby authorizes the filing of any financing
statements or continuation statements, and amendments to financing statements,
or any similar document in any jurisdictions and with any filing offices as the
Agent may determine, in its sole discretion, are necessary or advisable to
perfect the security interest granted to the Agent herein. Such financing
statements may describe the Collateral in the same manner as described herein or
may contain an indication or description of collateral that describes such
property in any other manner as the Agent may determine, in its sole discretion,
is necessary, advisable or prudent to ensure the perfection of the security
interest in the Collateral granted to the Agent herein, including, without
limitation, describing such property as "all personal property," whether now
owned or hereafter acquired. Each Grantor shall furnish to the Agent from time
to time
Exhibit E-27
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Agent may reasonably
request, all in reasonable detail.
(d) Each Grantor hereby authorizes the Agent to modify this Agreement
after obtaining such Grantor's approval of or signature to such modification by
amending Schedule VI hereto (as such schedule may be amended or supplemented
from time to time) to include reference to any right, title or interest in any
existing Intellectual Property or any Intellectual Property acquired or
developed by any Grantor after the execution hereof.
SECTION 6 AGENT APPOINTED ATTORNEY-IN-FACT.
6.1 Power of Attorney. Each Grantor hereby irrevocably appoints the
Agent (such appointment being coupled with an interest) as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, the Agent or otherwise, from time to time in the
Agent's discretion to take any action and to execute any instrument that the
Agent may deem reasonably necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation, the following:
(a) to prepare, sign, and file for recordation in any Intellectual
Property registry, appropriate evidence of the lien and security interest
granted herein in the Intellectual Property in the name of such Grantor as
assignor or pledgor;
(b) to take or cause to be taken all actions necessary to perform or
comply or cause performance or compliance with the terms of this Agreement,
including, without limitation, access to pay or discharge taxes or Liens (other
than Permitted Liens) levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same to be determined by the Agent in its sole discretion, any
such payments made by the Agent to become obligations of such Grantor to the
Agent, due and payable immediately without demand;
(c) to ask for, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(d) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (b) above;
(e) to file any claims or take any action or institute any proceedings
that the Agent may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Agent with respect to any
of the Collateral; and
(f) upon the occurrence and during the continuance of any Event of
Default:
(i) to obtain and adjust insurance required to be maintained by
such Grantor or paid to the Agent pursuant to the Facility Documents; and
(ii) to sell, transfer, assign, lease, license, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Agent were the absolute owner thereof for all
purposes, and to do, at the Agent's option and such Grantor's expense, at any
time or from time-to-time, all acts and things that the Agent deems reasonably
necessary to protect, preserve, or realize upon the Collateral and the Agent's
security interest therein as fully and effectively as such Grantor might do.
Exhibit E-28
The powers conferred on the Agent hereunder are solely to protect its interest
in the Collateral and the interests of the Secured Parties and shall not impose
any duty upon it to exercise any such powers. Except for the exercise of
reasonable care in the custody of any Collateral in its possession and the
accounting for moneys or other Collateral actually received by it hereunder, the
Agent shall have no duty as to any Collateral or as to the taking of any
necessary steps to preserve rights against prior parties or any other rights
pertaining to any Collateral. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which the
Agent accords its own property. Neither the Agent nor any of its directors,
officers, employees or agents shall be liable for failure to demand, collect or
realize upon all or any part of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or otherwise. If any Grantor fails to perform
any agreement contained herein, the Agent may itself perform, or cause
performance of, such agreement, and the expenses of the Agent incurred in
connection therewith shall be payable by each Grantor under the Section in this
Agreement relating to the payment of expenses (Section 11.2 hereof).
SECTION 7 REMEDIES.
7.1 Generally.
(a) If any Event of Default shall have occurred and be continuing, the
Agent may exercise in respect of the Collateral, in addition to all other rights
and remedies provided for herein or otherwise available to it at law or in
equity, all the rights and remedies of the Agent on default under the UCC
(whether or not the UCC applies to the affected Collateral) to collect, enforce
or satisfy any Secured Obligations then owing, whether by acceleration or
otherwise, and also may pursue any of the following separately, successively or
simultaneously:
(i) require any Grantor to, and each Grantor hereby agrees that
it shall at its expense and promptly upon request of the Agent forthwith,
assemble all or part of the Collateral as directed by the Agent and make it
available to the Agent at a place to be designated by the Agent that is
reasonably convenient to both parties or transfer any information related to the
Collateral to the Agent by electronic medium;
(ii) enter onto the property where any Collateral is located and
take possession thereof with or without judicial process and thereafter hold,
store and/or use, operate, manage and control the same;
(iii) prior to the disposition of the Collateral, store, process,
repair or recondition the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent the Agent deems appropriate; provided
that processed, reconditioned, or repaired products that are sold under any
Grantor's Trademarks shall be of at least substantially comparable quality to
the same products sold under such Trademarks at the time of the Event of
Default, and shall, if applicable, be labeled as "reconditioned", or the like,
to the extent required by law; and
(iv) without notice, except as specified below or under the UCC,
sell, assign, lease, license (on an exclusive or nonexclusive basis, to the
extent the Grantor has the lawful right to do so), or otherwise dispose of the
Collateral or any part thereof in one or more parcels at public or private sale,
at any of the Agent's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as the Agent may deem commercially reasonable.
Exhibit E-29
(b) The Agent or any Secured Party may be the purchaser of any or all of
the Collateral at any public or private (to the extent the portion of the
Collateral being privately sold is of a kind that is customarily sold on a
recognized market or the subject of widely distributed standard price
quotations) sale in accordance with the UCC and the Agent, as collateral agent
for and representative of the Secured Parties, shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such sale made in accordance
with the UCC, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Collateral payable by the Agent at such
sale. Each purchaser at any such sale shall hold the property sold absolutely
free from any claim or right on the part of any Grantor, and each Grantor hereby
waives (to the extent permitted by applicable law) all rights of redemption,
stay and/or appraisal which it now has or may at any time in the future have
under any rule of law or statute now existing or hereafter enacted. Each Grantor
agrees that, to the extent notice of sale shall be required by law, at least ten
(10) days notice to such Grantor of the time and place of any public sale or the
time after which any private sale is to be made shall constitute reasonable
notification. The Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Agent may adjourn any public
or private sale from time to time by announcement at the time and place fixed
therefor, and such sale may, without further notice, be made at the time and
place to which it was so adjourned. Each Grantor agrees that it would not be
commercially unreasonable for the Agent to dispose of the Collateral or any
portion thereof by using Internet sites that provide for the auction of assets
of the types included in the Collateral or that have the reasonable capability
of doing so, or that match buyers and sellers of assets. Each Grantor hereby
waives any claims against the Agent arising by reason of the fact that the price
at which any Collateral may have been sold at such a private sale was less than
the price which might have been obtained at a public sale, even if the Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, each Grantor shall be
liable for the deficiency and the fees of any attorneys employed by the Agent to
collect such deficiency. Each Grantor further agrees that a breach of any of the
covenants contained in this Section will cause irreparable injury to the Agent,
that the Agent has no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section shall be
specifically enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no default has occurred giving rise
to the Secured Obligations becoming due and payable prior to their stated
maturities. Nothing in this Section shall in any way alter the rights of the
Agent hereunder.
(c) The Agent may sell the Collateral without giving any warranties as
to the Collateral. The Agent may specifically disclaim or modify any warranties
of title or the like. This procedure will not be considered to adversely effect
the commercial reasonableness of any sale of the Collateral.
(d) The Agent shall have no obligation to xxxxxxxx any of the
Collateral.
7.2 Application of Proceeds. Except as expressly provided elsewhere in
this Agreement, all proceeds received by the Agent in respect of any sale, any
collection from, or other realization upon all or any part of the Collateral
shall be applied in full or in part by the Agent against, the Secured
Obligations in the following order of priority: first, to the payment of all
costs and expenses of such sale, collection or other realization, including
reasonable compensation to the Agent and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by the Agent in connection
therewith, and all amounts for which the Agent is entitled to indemnification
hereunder (in its capacity as the Agent) and all advances made by the Agent
hereunder for the account of any Grantor, and to the payment of all costs and
expenses paid or incurred by the Agent in connection with the exercise of any
right or remedy hereunder or under any Facility Document, all in accordance with
the terms hereof or thereof; second, to the extent of any excess of such
proceeds, to the payment of all other Secured Obligations (other than
obligations
Exhibit E-30
owed to any Affiliate of the Agent) as outlined in Section 9.03 of the Credit
Agreement; third, to the extent of any excess of such proceeds, to the payment
of all Secured Obligations constituting obligations owed to any Affiliate of the
Agent; and fourth, to the extent of any excess of such proceeds, to the payment
to or upon the order of the Grantors or to whosoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.
7.3 Sales on Credit. If the Agent sells any of the Collateral upon
credit, the Grantors will be credited only with payments actually made by the
purchaser and received by the Agent and applied to indebtedness of the
purchaser. In the event the purchaser fails to pay for the Collateral, the Agent
may resell the Collateral and the Grantors shall be credited with proceeds of
the sale in accordance with the provisions of this Section 7.
7.4 Investment Related Property.
(a) Each Grantor recognizes that, by reason of certain prohibitions
contained in the Securities Act of 1933 and applicable state securities laws,
the Agent may be compelled, with respect to any sale of all or any part of the
Investment Related Property conducted without prior registration or
qualification of such Investment Related Property under the Securities Act
and/or such state securities laws, to limit purchasers to those who will agree,
among other things, to acquire the Investment Related Property for their own
account, for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges that any such private sale may be at prices
and on terms less favorable than those obtainable through a public sale without
such restrictions (including a public offering made pursuant to a registration
statement under the Securities Act) and, notwithstanding such circumstances,
each Grantor agrees that any such private sale shall be deemed to have been made
in a commercially reasonable manner and that the Agent shall have no obligation
to engage in public sales and no obligation to delay the sale of any Investment
Related Property for the period of time necessary to permit the issuer thereof
to register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would, or should, agree to so register it. If the Agent determines to exercise
its right to sell any or all of the Investment Related Property, upon written
request, each Grantor shall and shall cause each issuer of any Pledged Equity
Interests to be sold hereunder to furnish to the Agent all such information as
the Agent may request in order to determine the number and nature of interests,
shares or other instruments included in the Investment Related Property which
may be sold by the Agent in exempt transactions under the Securities Act and the
rules and regulations of the Securities and Exchange Commission thereunder, as
the same are from time to time in effect.
(b) Upon the occurrence and during the continuation of an Event of
Default, the Agent shall have the right to apply the balance from any Deposit
Account or instruct the bank at which any Deposit Account is maintained to pay
the balance of any Deposit Account to or for the benefit of the Agent.
7.5 Intellectual Property.
(a) Anything contained herein to the contrary notwithstanding, upon the
occurrence and during the continuation of an Event of Default:
(i) the Agent shall have the right (but not the obligation) to
bring suit or otherwise commence any action or proceeding in the name of any
Grantor, the Agent or otherwise, in the Agent's sole discretion, to enforce any
Intellectual Property which is included in the Collateral, in which event, each
Grantor shall, at the request of the Agent, do any and all lawful acts and
execute any and all documents required by the Agent in aid of such enforcement
and each Grantor shall promptly, upon demand, reimburse and indemnify the Agent
as provided in the Section in this Agreement relating to indemnity and expenses
(Section 10 hereof) in connection with the exercise of its rights under this
Exhibit E-31
Section, and, to the extent that the Agent shall elect not to bring suit to
enforce any Intellectual Property as provided in this Section, each Grantor
agrees to take all reasonable measures, whether by action, suit, proceeding or
otherwise, to prevent the infringement of any of the Intellectual Property by
others, and for that purpose, agrees to diligently maintain any action, suit or
proceeding against any Person so infringing as shall be necessary to prevent
such infringement;
(ii) upon written demand from the Agent, each Grantor shall
assign, convey or otherwise transfer to the Agent, or such Agent's designee, all
of such Grantor's right, title and interest in and to the Intellectual Property
included in the Collateral, and shall execute and deliver to the Agent such
documents as are necessary to effectuate and record such assignment, conveyance,
or transfer of, or other evidence of foreclosure upon, such Intellectual
Property;
(iii) in the event of any assignment, conveyance or other
transfer of any of the Trademarks included in the Collateral, the goodwill
symbolized by any such Trademarks shall be included in such sale or transfer,
and such Grantor shall supply to the Agent or its designee such Grantor's
manufacturing, advertising, and distribution know-how, and copies of records
embodying such know-how, relating to products and services theretofore sold
under such Trademarks;
(iv) each Grantor agrees that an assignment, conveyance, or
transfer of any Intellectual Property included in the Collateral shall be
applied to reduce the Secured Obligations outstanding only to the extent that
the Agent receives cash proceeds in respect of such assignment, conveyance, or
other transfer of the Intellectual Property;
(v) within five (5) Business Days after written notice from the
Agent, each Grantor shall make available to the Agent, to the extent within such
Grantor's power and authority, such personnel in such Grantor's employ on the
date of such Event of Default as the Agent may reasonably designate, by name,
title or job responsibility, to permit such Grantor to continue, directly or
indirectly, to produce, advertise, and sell the products and services sold or
delivered by such Grantor under Intellectual Property included in the Collateral
on the Agent's behalf and to be compensated by the Agent (at such Grantor's
expense) in a manner consistent with the salary and benefit structure applicable
to each, as of the date of such Event of Default;
(vi) the Agent shall have the right to notify, or require each
Grantor to notify, any obligors with respect to payments due or to become due to
such Grantor in respect of the Intellectual Property, of the existence of the
security interest created herein, to direct such obligors to make payment of all
such amounts directly to the Agent, and, upon such notification and at the
expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount of such payment, to the same extent as
such Grantor could have done;
(vii) all amounts and proceeds (including checks and other
instruments) received by any Grantor in respect of amounts due to such Grantor
in respect of the Collateral or any portion thereof shall be received in trust
for the benefit of the Agent hereunder, shall be segregated from other funds of
such Grantor and shall be forthwith paid over or delivered to the Agent in the
same form as so received (with any necessary endorsement); and
(viii) the Grantors shall not adjust, settle or compromise the
amount or payment of any such amount or release wholly or partly any obligor
with respect thereto or allow any credit or discount thereon.
(b) If (i) an Event of Default shall have occurred and, by reason of
cure, waiver, modification, amendment or otherwise, no longer be continuing,
(ii) no other Event of Default shall have
Exhibit E-32
occurred and be continuing, (iii) an assignment or other transfer to the Agent
of any rights, title and interests in and to the Intellectual Property shall
have been previously made and shall have become absolute and effective, and (iv)
the Secured Obligations shall not have become immediately due and payable, upon
the written request of any Grantor, the Agent shall promptly execute and deliver
to such Grantor, at such Grantor's sole cost and expense, such assignments or
other transfers as may be necessary to reassign to such Grantor any such rights,
title and interests as may have been assigned to the Agent as aforesaid, subject
to any disposition thereof (including a lease or license) that may have been
made by the Agent; provided, after giving effect to such reassignment, the
Agent's security interest granted pursuant hereto, as well as all other rights
and remedies of the Agent granted hereunder, shall continue to be in full force
and effect; and provided further, the rights, title and interests so reassigned
shall be free and clear of any Liens granted by or on behalf of the Agent and
the Lenders.
(c) Solely for the purpose of enabling the Agent to exercise its rights
and remedies under this Section 7, at such time as the Agent shall be lawfully
entitled to exercise such rights and remedies, each Grantor hereby grants to the
Agent, to the extent it has the lawful right to do so, an irrevocable,
non-exclusive worldwide license (exercisable without payment of royalty or other
compensation to such Grantor), to use, operate under, license, or sublicense any
Intellectual Property now or hereafter owned by or licensed to such Grantor,
subject, in the case of Trademarks, to the maintenance of quality standards with
respect to the products and services sold under such Trademarks at a level at
least substantially comparable to that prevailing at the time of Event of
Default. The foregoing license grant to the Agent is in addition to, and not in
limitation of, the Agent's rights under Section 7.1 or the Power of Attorney
granted under Section 6.
SECTION 8 AGENT.
The Agent has been appointed to act as collateral agent hereunder by
each Secured Party either pursuant to the Facility Documents or by their
acceptance of the benefits hereof. The Agent shall be obligated, and shall have
the right hereunder, to make demands, to give notices, to exercise or refrain
from exercising any rights, and to take or refrain from taking any action
(including, without limitation, the release or substitution of Collateral),
solely in accordance with this Agreement and the Credit Agreement. Without the
written consent of each Secured Party that would be affected thereby, no
amendment, modification, termination, or consent shall be effective if the
effect thereof would release all or substantially all of the Collateral except
as expressly provided herein. In furtherance of the foregoing provisions of this
Section, each Secured Party, by its acceptance of the benefits hereof, agrees
that it shall have no right individually to realize upon any of the Collateral
hereunder, it being understood and agreed by such Secured Party that all rights
and remedies hereunder may be exercised solely by the Agent for the benefit of
each Secured Party in accordance with the terms of this Section. The Agent may
resign or be removed in accordance with Section 11.09 of the Credit Agreement.
Upon the acceptance of any appointment as Administrative Agent under the terms
of the Credit Agreement by a successor Administrative Agent, that successor
Administrative Agent shall thereby also be deemed the successor Agent and such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring or removed Agent under
this Agreement, and the retiring or removed Agent under this Agreement shall
promptly (i) transfer to such successor Agent all sums, Securities and other
items of Collateral held hereunder, together with all records and other
documents necessary or appropriate in connection with the performance of the
duties of the successor Agent under this Agreement, and (ii) execute and deliver
to such successor Agent such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Agent of the security interests created hereunder,
whereupon such retiring or removed Agent shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Agent's
resignation or removal hereunder as the Agent, the provisions of this
Exhibit E-33
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Agreement while it was the Agent hereunder.
SECTION 9 CONTINUING SECURITY INTEREST; TRANSFER OF SECURED OBLIGATIONS
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations, the cancellation or termination of the commitments
and any other contingent obligation included in the Secured Obligations, be
binding upon each Grantor, its successors and assigns, and inure, together with
the rights and remedies of the Agent hereunder, to the benefit of the Agent and
its successors, transferees and assigns. Without limiting the generality of the
foregoing, but subject to the terms of the Facility Documents, including,
without limitation, Section 12.05 of the Credit Agreement, each Secured Party
may assign or otherwise transfer any Secured Obligations held by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to each Secured Party herein or otherwise.
Upon the payment in full of all Secured Obligations, the cancellation or
termination of the commitments and any other contingent obligation included in
the Secured Obligations and the termination of the Credit Agreement, the
security interest granted hereby shall terminate hereunder and all rights to the
Collateral shall revert and be deemed reassigned to the Grantors. Upon any such
termination, the Agent shall, at the Grantors' request and expense, execute and
deliver to the Grantors such documents as the Grantors shall reasonably request
to evidence such termination, reversions and/or reassignment, without recourse,
representation, or warranty of any kind.
This Agreement shall continue to be effective or shall be
automatically reinstated, as the case may be, if at any time payment, in whole
or in part, of any of the Secured Obligations is rescinded or must otherwise be
restored or returned by the Agent or any Secured Party as a preference,
fraudulent conveyance or otherwise under any bankruptcy, insolvency or similar
law or otherwise, all as though such payment had not been made; provided that in
the event payment of all or any part of the Secured Obligations is rescinded or
must be restored or returned, all costs and expenses (including without
limitation the fees and expenses of counsel) incurred by the Agent or any
Secured Party in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Secured Obligations.
SECTION 10 INDEMNITY AND EXPENSES.
(a) Each Grantor agrees:
(i) to defend, indemnify, pay and hold harmless each Indemnitee,
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including without limitation enforcement of this
Agreement), except to the extent such claims, losses or liabilities result from
such Indemnitee's gross negligence or willful misconduct; and
(ii) to pay to the Agent promptly following written demand the
amount of any and all costs and expenses, including the fees and expenses of its
counsel and of any experts and agents in accordance with the terms and
conditions of the Credit Agreement.
(b) The obligations of each Grantor in this Section 10 shall survive the
termination of this Agreement and the discharge of such Grantor's other
obligations under this Agreement, the Credit Agreement and any other Facility
Documents.
Exhibit E-34
SECTION 11 MISCELLANEOUS.
11.1 Notices. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given to a Grantor or
Agent shall be in writing and given as provided in Section 12.05(i) the Credit
Agreement.
11.2 Expenses. Without limiting Section 12.03 of the Credit Agreement,
whether or not the transactions contemplated under the Facility Documents shall
be consummated, Grantors agree to pay all the actual costs and reasonable
expenses of creating and perfecting Liens in favor of the Agent, for the benefit
of each Secured Party pursuant hereto, including filing and recording fees,
expenses and taxes, stamp or documentary taxes, search fees, title insurance
premiums and reasonable fees, expenses and disbursements of counsel to the Agent
and of counsel providing any opinions that Agent may request in respect of the
Collateral or the Liens created pursuant to the Security Documents; all the
actual costs and reasonable fees, expenses and disbursements of any auditors,
accountants, consultants or appraisers; all the actual costs and reasonable
expenses (including the reasonable fees, expenses and disbursements of any
appraisers, consultants, advisors and agents employed or retained by the Agent
and its counsel) in connection with the custody or preservation of any of the
Collateral; and after the occurrence of a Default or an Event of Default, all
costs and expenses, including reasonable attorneys' fees (including allocated
costs of internal counsel) and costs of settlement, incurred by the Agent in
enforcing any Secured Obligations of or in collecting any payments due from any
Grantor hereunder or under the other Facility Documents by reason of such
Default or Event of Default (including in connection with the sale of,
collection from, or other realization upon any of the Collateral).
11.3 Amendments and Waivers.
(a) Agent's Consent. Subject to Section 11.3(b), no amendment,
modification, termination or waiver of any provision of this Agreement, or
consent to any departure by any Grantor therefrom, shall in any event be
effective without the written concurrence of the Agent.
(b) No Waiver; Remedies Cumulative. No failure or delay on the part of
the Agent in the exercise of any power, right or privilege hereunder or under
any other Facility Document shall impair such power, right or privilege or be
construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other power, right or privilege. All
rights, powers and remedies existing under this Agreement and the other Facility
Documents are cumulative, and not exclusive of, any rights or remedies otherwise
available. Any forbearance or failure to exercise, and any delay in exercising,
any right, power or remedy hereunder shall not impair any such right, power or
remedy or be construed to be a waiver thereof, nor shall it preclude the further
exercise of any such right, power or remedy.
11.4 General Limitation on Secured Obligations.
(a) Subject to paragraph (c) of this Section 11.4, each of the Grantors
is accepting joint and several liability hereunder in consideration of the
financial accommodation to be provided by the Lenders under the Credit
Agreement, for the mutual benefit, directly and indirectly, of each of the
Grantors and in consideration of the undertakings of each of the Grantors to
accept joint and several liability for the obligations of each of them.
(b) Subject to paragraph (c) of this Section 11.4, each of the Grantors
jointly and severally hereby irrevocably and unconditionally accepts, not merely
as a surety but also as a co-debtor, joint and
Exhibit E-35
several liability with the other Grantors with respect to the payment and
performance of all of the Secured Obligations arising under this Agreement and
the other Facility Documents, it being the intention of the parties hereto that
all the Secured Obligations shall be the joint and several obligations of each
of the Grantors without preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained herein or in
any other Facility Document (including, without limitation, paragraphs (a) and
(b) of this Section 11.4), if the obligations of any Grantor under this
Agreement would otherwise, taking into account the provisions of this Section
11.4, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability hereunder, then the amount of such liability shall, without any
further action by any Grantor, any Lender, the Agent or any other Person, be
automatically limited and reduced to the highest amount that is valid and
enforceable and not subordinated to the claims of other creditors as determined
in such action or proceeding.
11.5 Successors and Assigns. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns including all persons
who become bound as debtor to this Agreement. No Grantor shall, without the
prior written consent of the Agent, assign any right, duty or obligation
hereunder.
11.6 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
11.7 Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof. Notwithstanding anything herein or implied by law
to the contrary, the agreements of each Grantor set forth in Sections 10 and
11.2 shall survive the payment of the Secured Obligations and the termination
hereof.
11.8 Marshalling; Payments Set Aside. The Agent shall not be under any
obligation to xxxxxxxx any assets in favor of any Grantor or any other Person or
against or in payment of any or all of the Secured Obligations.
11.9 Severability. In case any provision hereof or obligation hereunder
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
11.10 Headings. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
11.11 APPLICABLE LAW. PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL
OBLIGATIONS LAW, THE WHOLE OF THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS-OF-LAWS
RULES WHICH WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
11.12 CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
ANY GRANTOR ARISING OUT OF OR RELATING HERETO OR ANY OTHER FACILITY DOCUMENT, OR
ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE
Exhibit E-36
OR FEDERAL COURT OF COMPETENT JURISDICTION LOCATED IN THE CITY OF NEW YORK. BY
EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; WAIVES
ANY DEFENSE OF FORUM NON CONVENIENS; AGREES THAT SERVICE OF ALL PROCESS IN ANY
SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO THE APPLICABLE GRANTOR AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 11.1; AGREES THAT SERVICE AS PROVIDED ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER SUCH GRANTOR IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING
SERVICE IN EVERY RESPECT; AND AGREES THAT THE AGENT RETAINS THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY
GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.
11.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER FACILITY DOCUMENTS.
THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL
DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF
THIS TRANSACTION, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS
AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP,
THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND
THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS.
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS
WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING
(OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION
11.13 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO. IN
THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
11.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
11.15 Effectiveness. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
the Grantors and the Agent of written or telephonic notification of such
execution and authorization of delivery thereof.
11.16 Entire Agreement. This Agreement and the other Facility Documents
embody the entire agreement and understanding between the Grantors and the Agent
and supersede all prior agreements and understandings between such parties
relating to the subject matter hereof and thereof. Accordingly, the Facility
Documents may not be contradicted by evidence of prior, contemporaneous or
subsequent oral agreements of the parties. There are no unwritten oral
agreements between the parties.
Exhibit E-37
11.17 Joinder. Any other Person may become a Grantor under and become
bound by the terms and provisions hereof by executing and delivering to the
Agent a supplement hereto substantially in the form of Exhibit B hereto (each a
"Joinder Supplement"), accompanied by such documentation as the Agent may
request to establish, among other things, the due organization, valid existence
and good standing of such Person, its qualification to engage in business in
each jurisdiction in which it is required to be so qualified, its authority to
execute, deliver and perform its obligations hereunder, and the identity,
authority and capacity of each officers thereof authorized to act on its behalf.
The rights and obligations of each Grantor hereunder shall remain in full force
and effect notwithstanding the addition of any new Grantor as a party hereto.
[Signature pages follow.]
Exhibit E-38
IN WITNESS WHEREOF, each Grantor and the Agent have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
HUTTIG BUILDING PRODUCTS, INC.
By:
-------------------------------------
Name:
Title:
HUTTIG, INC.
By:
-------------------------------------
Name:
Title:
HUTTIG INDIANA, INC.
By:
-------------------------------------
Name:
Title:
HUTTIG INDIANA PARTNERSHIP LP
By: Huttig Indiana, Inc.
Its: General Partner
By:
-------------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
as the Agent
By:
-------------------------------------
Name:
Title:
Exhibit E-39
Exhibit E-40
EXHIBIT A TO SECURITY AND PLEDGE AGREEMENT
FORM OF TRADEMARK SECURITY AGREEMENT
TRADEMARK SECURITY AGREEMENT
This TRADEMARK SECURITY AGREEMENT (this "Agreement"), dated as of August
[ ], 2002, is entered into between [Huttig Building Products, Inc.], a Delaware
corporation, located at 000 Xxxxxxxxx Xxxxxxxxxx Xxxxx, Xx. Xxxxx, XX, 00000
(the "Assignor"), and XX Xxxxxx Xxxxx Bank, a New York banking corporation,
located at c/o X. X. Xxxxxx Business Credit Corporation, Xxx Xxxxx Xxxxxx, XX-0,
Xxxxxxxxx, XX, 00000, as the Agent for the benefit of the Secured Parties (the
"Assignee"). Capitalized terms not otherwise defined herein have the meanings
set forth in the Security and Pledge Agreement.
WHEREAS, pursuant to the Security and Pledge Agreement, dated as of
August 12, 2002, between Assignor, among other grantors, and Assignee (the
"Security and Pledge Agreement"), Assignor is granting to Assignee a security
interest and continuing lien on all of Assignor's right, title and interest in,
to and under certain collateral, including the Trademarks (as defined below).
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Assignor and the Assignee hereby agree as follows:
1. Grant of Security Interest
A. Assignor hereby grants to the Assignee a security interest and
continuing lien on all of Assignor's right, title and interest in, to and under
the Trademarks, whether now owned or existing or hereafter acquired or arising
and the proceeds, products, accessions, rents and products of or in respect of
any Trademarks. For purposes of this Agreement, "Trademarks" shall mean all
United States, state and foreign trademarks, service marks, certification marks,
collective marks, trade names, corporate names, d/b/as, business names,
fictitious business names, Internet domain names, trade styles, logos, other
source or business identifiers, designs and general intangibles of a like
nature, rights of publicity and privacy pertaining to the names, likeness,
signature and biographical data of natural persons, and, with respect to any and
all of the foregoing: (i) all registrations and applications therefor including,
but not limited to, the registrations and applications referred to in Schedule A
hereto (as such schedule may be amended or supplemented from time to time) but
excluding intent to use applications unless and until statements of use or
amendments to allege use are filed with respect to such applications, (ii) the
goodwill of the business symbolized thereby, (iii) all rights corresponding
thereto throughout the world, (iv) all rights to xxx for past, present and
future infringement or dilution thereof or for any injury to goodwill, (v) all
licenses, claims, damages, and proceeds of suit arising therefrom, and (vi) all
payments and rights to payments arising out of the sale, lease, license
assignment or other disposition thereof.
B. The security interest granted hereby is granted in conjunction
with the security interest and continuing lien granted to the Assignee under the
Security and Pledge Agreement, which is deemed incorporated by reference herein.
The rights and remedies of the Assignee with respect to the security interest
and continuing lien granted hereby are in addition to those rights and remedies
set forth in the Security and Pledge Agreement and the other loan documents, and
those rights and remedies which are now or hereafter available to the Assignee
as a matter of law or equity. The exercise by the Assignee of any one or more of
the rights or remedies provided for in this Agreement, the Security and Pledge
Exhibit E-41
Agreement, the other loan documents, or now or hereafter existing at law or in
equity, shall not preclude the simultaneous or later exercise by any person,
including Assignee, of any or all other rights or remedies.
2. Modification of Agreement
Neither this Agreement, nor any provision hereof may be amended,
modified, waived, or terminated, except in accordance with the "Amendments and
Waivers" provisions of the Security and Pledge Agreement. Notwithstanding the
foregoing, Assignor authorizes the Assignee, upon notice to Assignor, to modify
this Agreement in the name of and on behalf of the Assignor without obtaining
the Assignor's signature to such modification, to the extent that such
modification constitutes an amendment of Schedule A hereto in order to add any
right, title, or interest in any Trademarks owned or subsequently acquired by
Assignor. Assignor additionally agrees to execute any additional agreement or
amendment hereto, as may be required by the Assignee from time to time, to
subject any such owned or subsequently-acquired right, title, or interest in any
Trademarks to the security interest and continuing liens and perfection created
or contemplated hereby, or by the Security and Pledge Agreement.
3. Termination of Agreement
Upon the payment in full of all Secured Obligations, the cancellation or
termination of the commitments and any other contingent obligation included in
the Secured Obligations and the termination of the Credit Agreement, the
security interest and continuing lien granted hereby shall terminate hereunder
and all rights to the Trademarks shall revert and be deemed reassigned to the
Assignor. Upon any such termination, the Assignee shall, at the Assignor's
request and expense, execute and deliver to the Assignor such documents as the
Assignor shall reasonably request to evidence such termination, reversions
and/or reassignment, without recourse, representation, or warranty of any kind.
4. Governing Law
PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, THE
WHOLE OF THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO
SHALL BE GOVERNED, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS-OF-LAWS RULES WHICH WOULD
REQUIRE THE APPLICATION OF THE LAWS OF ANY OTHER JURISDICTION.
5. Counterparts
This Agreement may be executed in any number of counterparts, each of
which, when so executed and delivered, shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, Assignor and Assignee have caused this TRADEMARK
SECURITY AGREEMENT to be duly executed and delivered by their respective
officers duly authorized as of the date first above written.
[HUTTIG BUILDING PRODUCTS, INC.],
as the Assignor
By:
-------------------------------------
Exhibit E-42
Name:
Title:
XX XXXXXX XXXXX BANK, as Agent,
as the Assignee
By:
-------------------------------------
Name:
Title:
Exhibit X-00
XXXXX XX XXX XXXX )
)
COUNTY OF NEW YORK )
ss:
I, a notary public in and for the county and state aforesaid, do
hereby certify that ____________________, personally known to me (or proved to
me on the basis of satisfactory evidence), to be the person who executed the
within instrument as the ___________________ , of Huttig Building Products,
Inc., a Delaware corporation, appeared before me in person and acknowledged that
(s)he signed the within instrument as his/her free and voluntary act and as the
free and voluntary act of said corporation pursuant to its bylaws or a
resolution of its board of directors.
IN WITNESS WHEREOF, I have hereunto set my hand as notarial seal this
___ day of August, 2002.
(NOTARIAL STAMP OR SEAL)
-------------------------
Notary Public
My Commission Expires:
-------------------------
Exhibit E-44
SCHEDULE A
TO TRADEMARK
SECURITY AGREEMENT
TRADEMARKS
Exhibit E-45
EXHIBIT B TO SECURITY AND PLEDGE AGREEMENT
JOINDER SUPPLEMENT
This JOINDER SUPPLEMENT, dated [mm/dd/yy], is delivered by [NAME OF NEW
GRANTOR] a [NAME OF STATE OF INCORPORATION] [Corporation] (the "New Grantor")
pursuant to the Security and Pledge Agreement, dated as of August 12, 2002 (as
it may be from time to time amended, restated, modified or supplemented, the
"Security Agreement"), among Huttig Building Products, Inc., a Delaware
corporation ("HBP"), Huttig, Inc., a Delaware corporation ("Huttig"), Huttig
Indiana, Inc., a Delaware corporation ("Huttig Indiana"), Huttig Indiana
Partnership, LP, an Indiana limited partnership ("HIP") and each Person that
becomes a Grantor thereunder pursuant to Section 11.17 (each such Person, HBP,
Huttig, Huttig Indiana and HIP are collectively referred to as the "Grantors"
and each individually as a "Grantor"), and JPMorgan Chase Bank, a New York
banking corporation, as the Agent for the benefit of the Secured Parties.
Capitalized terms used herein not otherwise defined herein shall have the
meanings ascribed thereto in the Security Agreement.
New Grantor hereby confirms the grant to the Collateral Agent set forth
in the Security Agreement of, and does hereby grant to the Collateral Agent, a
security interest in all of New Grantor's right, title and interest in and to
all Collateral to secure the Secured Obligations, in each case whether now or
hereafter existing or in which New Grantor now has or hereafter acquires an
interest and wherever the same may be located. From and after the date hereof,
New Grantor shall be a "Grantor" for all purposes of the Security Agreement. New
Grantor hereby makes all of the representations and warranties set forth in the
Security Agreement. New Grantor represents and warrants that the attached
Supplements to Schedules accurately and completely set forth all additional
information required pursuant to the Security Agreement and hereby agrees that
such Supplements to Schedules shall constitute part of the Schedules to the
Security Agreement.
IN WITNESS WHEREOF, New Grantor has caused this Joinder Supplement to be
duly executed and delivered by its duly authorized officer as of [mm/dd/yy].
[NAME OF NEW GRANTOR]
By:
-----------------------------------
Name:
Title:
Exhibit E-46
EXHIBIT C TO SECURITY AND PLEDGE AGREEMENT
FORM OF SECURITIES ACCOUNT CONTROL AGREEMENT
SECURITIES ACCOUNT CONTROL AGREEMENT
This Securities Account Control Agreement, dated as of [?] (this
"Agreement"), among ________________ (the "Debtor"), JPMorgan Chase Bank, as
Administrative Agent and as Collateral Agent (in such capacities, the "Agent"),
and ________________ (the "Securities Intermediary"). Capitalized terms used but
not defined herein shall have the meaning assigned in the Security Agreement,
dated as of August 12, 2002, among the Debtor, the various other parties thereto
and the Agent (as amended, restated, supplemented, or otherwise modified from
time to time, the "Security Agreement").
Section 1. Establishment of Securities Account. The Securities
Intermediary hereby confirms and agrees that:
(a) The Securities Intermediary has established account number
[identify account number] in the name "[identify exact title of account]" (such
account and any successor account, the "Securities Account") and the Securities
Intermediary shall not change the name or account number of the Securities
Account without the prior written consent of the Agent;
(b) All securities or other property underlying any financial
assets credited to the Securities Account shall be registered in the name of the
Securities Intermediary, indorsed to the Securities Intermediary or in blank or
credited to another securities account maintained in the name of the Securities
Intermediary and in no case will any financial asset credited to the Securities
Account be registered in the name of the Debtor, payable to the order of the
Debtor or specially indorsed to the Debtor except to the extent the foregoing
have been specially indorsed to the Securities Intermediary or in blank;
(c) All property delivered to the Securities Intermediary
pursuant to the Security Agreement will be promptly credited to the Securities
Account; and
(d) The Securities Account is an account to which financial
assets are or may be credited, and the Securities Intermediary shall, subject to
the terms of this Agreement, treat the Debtor as entitled to exercise the rights
that comprise any financial asset credited to the account.
Section 2. "Financial Assets" Election. The Securities Intermediary
hereby agrees that each item of property (including, without limitation, any
investment property, financial assets, securities, instruments, general
intangibles or cash) credited to the Securities Account shall be treated as a
"financial asset" within the meaning of Section 8-102(a)(9) of the UCC.
Section 3. Entitlement Orders. If at any time the Securities
Intermediary shall receive any order directing transfer or redemption of any
financial asset relating to the Securities Account (any such order, an
"Entitlement Order") from the Agent, the Securities Intermediary shall comply
with such Entitlement Order without further consent by the Debtor or any other
Person. If the Debtor is otherwise entitled to issue Entitlement Orders and such
orders conflict with any Entitlement Order issued by the Agent, the Securities
Intermediary shall follow the orders issued by the Agent.
Section 4. Subordination of Lien; Waiver of Set-Off. In the event that
the Securities Intermediary has or subsequently obtains by agreement, operation
of law or otherwise a security interest in the Securities Account or any
security entitlement credited thereto, the Securities Intermediary hereby
Exhibit E-47
agrees that such security interest shall be subordinate to the security interest
of the Agent. The financial assets and other items deposited to the Securities
Account will not be subject to deduction, set-off, banker's lien, or any other
right in favor of any Person other than the Agent (except that the Securities
Intermediary may set off (i) all amounts due to the Securities Intermediary in
respect of customary fees and expenses for the routine maintenance and operation
of the Securities Account and (ii) the face amount of any checks which have been
credited to the Securities Account but are subsequently returned unpaid because
of uncollected or insufficient funds).
Section 5. Choice of Law. This Agreement shall be governed by the laws
of the State of New York. Regardless of any provision in any other agreement,
for purposes of the UCC, New York shall be deemed to be the Securities
Intermediary's jurisdiction (within the meaning of Section 8-110 of the UCC).
The Securities Account (as well as the securities entitlements related thereto)
shall be governed by the laws of the State of New York.
Section 6. Conflict with Other Agreements.
(a) In the event of any conflict between this Agreement (or any portion
hereof) and any other agreement now existing or hereafter entered into, the
terms of this Agreement shall prevail;
(b) No amendment or modification of this Agreement or waiver of any
right hereunder shall be binding on any party hereto unless it is in writing and
is signed by all of the parties hereto;
(c) The Securities Intermediary hereby confirms and agrees that:
(i) There are no other agreements entered into between the
Securities Intermediary and the Debtor with respect to the Securities Account;
(ii) It has not entered into, and until the termination of the
this Agreement will not enter into, any agreement with any other Person relating
to the Securities Account and/or any financial assets credited thereto pursuant
to which it has agreed to comply with Entitlement Orders of such other Person;
and
(iii) It has not entered into, and until the termination of this
agreement will not enter into, any agreement with the Debtor or the Agent
purporting to limit or condition the obligation of the Securities Intermediary
to comply with Entitlement Orders of the Agent as set forth in Section 3 hereof.
Section 7. Adverse Claims. Except for the claims and interest of the
Agent and of the Debtor in the Securities Account, the Securities Intermediary
does not know of any claim to, or interest in, the Securities Account or in any
"financial asset" (as defined in Section 8-102(a) of the UCC) credited thereto.
If any person asserts any lien, encumbrance or adverse claim (including any
writ, garnishment, judgment, warrant of attachment, execution or similar
process) against the Securities Account or in any financial asset carried
therein, the Securities Intermediary will promptly notify the Agent and the
Debtor thereof.
Section 8. Maintenance of Securities Account. In addition to, and not in
lieu of, the obligation of the Securities Intermediary to honor Entitlement
Orders of the Agent as agreed in Section 3 hereof, the Securities Intermediary
agrees to maintain the Securities Account as follows:
(a) Notice of Sole Control. If at any time the Agent delivers to the
Securities Intermediary a Notice of Sole Control in substantially the form set
forth in Exhibit A hereto, the Securities Intermediary
Exhibit E-48
agrees that after receipt of such notice, it will take all instruction with
respect to the Securities Account solely from the Agent.
(b) Voting Rights. Until such time as the Securities Intermediary
receives a Notice of Sole Control pursuant to subsection (a) of this Section 8,
the Debtor shall direct the Securities Intermediary with respect to the voting
of any financial assets credited to the Securities Account.
(c) Permitted Investments. Until such time as the Securities
Intermediary receives a Notice of Sole Control signed by the Agent, the Debtor
shall direct the Securities Intermediary with respect to the selection of
investments to be made; provided, however, that the Securities Intermediary
shall not honor any instruction to purchase any investments other than
[investments of a type described on Exhibit B hereto]/ [any "Permitted
Investments" (as defined in the Security Agreement)].
(d) Statements and Confirmations. The Securities Intermediary will
promptly send copies of all statements, confirmations and other correspondence
concerning the Securities Account and/or any financial assets credited thereto
simultaneously to each of the Debtor and the Agent at the address for each set
forth in Section 12 of this Agreement.
(e) Tax Reporting. All items of income, gain, expense and loss
recognized in the Securities Account shall be reported to the Internal Revenue
Service and all state and local taxing authorities under the name and taxpayer
identification number of the Debtor.
Section 9. Representations, Warranties and Covenants of the Securities
Intermediary. The Securities Intermediary hereby makes the following
representations, warranties and covenants:
(a) The Securities Account has been established as set forth in Section
1 above and the Securities Account will be maintained in the manner set forth
herein until termination of this Agreement; and
(b) This Agreement is the valid and legally binding obligation of the
Securities Intermediary.
Section 10. Indemnification of Securities Intermediary. The Debtor and
the Agent hereby agree that (a) the Securities Intermediary is released from any
and all liabilities to the Debtor and the Agent arising from the terms of this
Agreement and the compliance of the Securities Intermediary with the terms
hereof, except to the extent that such liabilities arise from the Securities
Intermediary's negligence or willful misconduct and (b) the Debtor and its
successors and assigns shall at all times indemnify and save harmless the
Securities Intermediary from and against any and all claims, actions and suits
of others arising out of the terms of this Agreement or the compliance of the
Securities Intermediary with the terms hereof, except to the extent that such
arises from the Securities Intermediary's negligence or willful misconduct, and
from and against any and all liabilities, losses, damages, costs, charges,
counsel fees and other expenses of every nature and character arising by reason
of the same, until the termination of this Agreement.
Section 11. Successors; Assignment. The terms of this Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors or heirs and personal representatives who obtain such
rights solely by operation of law. The Agent may assign its rights hereunder
only with the express written consent of the Securities Intermediary and by
sending written notice of such assignment to the Debtor; provided, that the
Securities Intermediary will not unreasonably withhold or delay its consent to
any assignment by Agent to any successor Agent under the Security Agreement.
Exhibit E-49
Section 12. Notices. Any notice, request or other communication required
or permitted to be given under this Agreement shall be in writing and deemed to
have been properly given when delivered in person, or when sent by telecopy or
other electronic means and electronic confirmation of error free receipt is
received or two days after being sent by certified or registered United States
mail, return receipt requested, postage prepaid, addressed to the party at the
address set forth below.
Debtor:
Agent:
Securities Intermediary:
Any party may change his address for notices in the manner set
forth above.
Section 13. Termination. The obligations of the Securities Intermediary
to the Agent pursuant to this Agreement shall continue in effect until the
security interests of the Agent in the Securities Account have been terminated
pursuant to the terms of the Security Agreement and the Agent has notified the
Securities Intermediary of such termination in writing. The Agent agrees to
provide Notice of Termination in substantially the form of Exhibit C hereto to
the Securities Intermediary upon the request of the Debtor on or after the
termination of the Agent's security interest in the Securities Account pursuant
to the terms of the Security Agreement. The termination of this Agreement shall
not terminate the Securities Account or alter the obligations of the Securities
Intermediary to the Debtor pursuant to any other agreement with respect to the
Securities Account.
Section 14. Counterparts. This Agreement may be executed in any number
of counterparts, all of which shall constitute one and the same instrument, and
any party hereto may execute this Agreement by signing and delivering one or
more counterparts.
Exhibit E-50
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by their duly authorized officers as of the day and year first above
written.
[NAME OF DEBTOR]
By:
-------------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
as Agent
By:
-------------------------------------
Name:
Title:
[NAME OF INSTITUTION SERVING AS
SECURITIES INTERMEDIARY]
By:
-------------------------------------
Name:
Title:
Exhibit E-51
EXHIBIT A TO SECURITIES ACCOUNT CONTROL AGREEMENT
[Letterhead of Agent]
[Date]
[Name and Address of Securities Intermediary]
Attention:
---------------------
Re: Notice of Sole Control
Ladies and Gentlemen:
As referenced in the Securities Account Control Agreement, dated
[-], among [insert name of the Debtor], you and the undersigned (a copy of which
is attached) we hereby give you notice of our sole control over securities
account number ____________ (the "Securities Account") and all financial assets
credited thereto. You are hereby instructed not to accept any direction,
instructions or Entitlement Orders with respect to the Securities Account or the
financial assets credited thereto from any Person other than the undersigned,
unless otherwise ordered by a court of competent jurisdiction.
You are instructed to deliver a copy of this notice by facsimile
transmission to [insert name of the Debtor].
Very truly yours,
[Name of Agent]
By:
--------------------------
Title
cc: [Name of Debtor]
Exhibit E-52
EXHIBIT B TO SECURITIES ACCOUNT CONTROL AGREEMENT
Permitted Investments
Exhibit E-53
EXHIBIT C TO SECURITIES ACCOUNT CONTROL AGREEMENT
[Letterhead of Agent]
[Date]
[Name and Address of Securities Intermediary]
Attention:
Re: Termination of Control Agreement
You are hereby notified that the Securities Account Control
Agreement between you, [the Debtor] and the undersigned (a copy of which is
attached) is terminated and you have no further obligations to the undersigned
pursuant to such Agreement. Notwithstanding any previous instructions to you,
you are hereby instructed to accept all future directions with respect to
Securities Account number from [the Debtor]. This notice terminates any
obligations you may have to the undersigned with respect to such account,
however nothing contained in this notice shall alter any obligations which you
may otherwise owe to [the Debtor] pursuant to any other agreement.
You are instructed to deliver a copy of this notice by facsimile
transmission to [the Debtor].
Very truly yours,
[Name of Agent]
By:
Title:
Exhibit E-54
EXHIBIT F
FORM OF SOLVENCY CERTIFICATE
The undersigned principal financial officer of Huttig Building Products, Inc., a
Delaware corporation ("HUTTIG") and each of the domestic Subsidiaries of Huttig
party hereto (the "DOMESTIC SUBSIDIARIES", and collectively with Huttig, the
"BORROWERS"), is duly authorized to execute this certificate on behalf of each
of the Borrowers under the Credit Agreement defined below.
WITNESSETH
WHEREAS, the Borrowers have entered into a Credit Agreement, dated as of
the date hereof (as amended, restated, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT"; capitalized terms used but not otherwise
defined herein shall have the meanings provided in the Credit Agreement), with
the Guarantors from time to time party thereto, the Lenders from time to time
party thereto, JPMorgan Chase Bank, as Administrative and Collateral Agent,
Issuing Bank and Arranger, X.X. Xxxxxx Business Credit Corp., as Advisor, Bank
of America, N.A., as Syndication Agent, LaSalle Bank National Association, as a
Managing Agent, General Electric Capital Corporation, as a Managing Agent,
Transamerica Business Capital Corporation, as Co-Agent and Congress Financial
Corporation (Central), as Documentation Agent, pursuant to which the Lenders
have established credit facilities in the aggregate principal amount of
$150,000,000 (the "CREDIT FACILITIES") in favor of the Borrowers;
WHEREAS, certain subsidiaries of the Borrowers (the "GUARANTORS" and,
collectively with the Borrowers, the "CREDIT PARTIES") may hereafter guarantee
the obligations of the Borrowers under the Credit Agreement as provided in the
Credit Agreement.
WHEREAS, each of the Credit Parties will benefit substantially and
directly from the establishment of the Credit Facilities in favor of the
Borrowers;
WHEREAS, to secure their respective obligations under and relating to
the Credit Facilities the Credit Parties have executed and delivered to the
Agent the other Facility Documents referenced in the Credit Agreement (the grant
of security interests, transfers, incurrence of obligations and other
transactions relating to the execution, delivery and performance of the
obligations under the Facility Documents, and any other transactions and
transfers related thereto, shall be referred to herein collectively as the
"TRANSACTIONS");
WHEREAS, the undersigned in his capacity as principal financial officer
of each of the Borrowers has carefully reviewed the Credit Agreement and the
various other Facility Documents, and also the contents of this Certificate, and
in connection herewith in such capacity has made such investigations and
inquiries as he has deemed necessary and prudent therefor, including those
described below, and further acknowledges that the Agent and the Lenders are
relying on the truth and accuracy of this Certificate in connection with the
establishment of the Credit Facilities;
WHEREAS, the following terms, as used in this Certificate, shall have
the following meanings:
"fair value" shall mean the amount at which the assets of an
entity would change hands between a willing buyer and a willing seller,
within a commercially reasonable
Exhibit F-1
period of time, each having knowledge of the relevant facts, neither
being under any compulsion to act, with equity to both;
"indebtedness" shall mean all obligations and liabilities,
whether matured or unmatured, liquidated or unliquidated, disputed or
undisputed, secured or unsecured, or subordinated, including without
duplication, all identified contingent liabilities;
"identified contingent liabilities" shall mean the maximum
reasonably estimated liabilities that may result from pending
litigation, asserted claims and assessments, guaranties, environmental
conditions, uninsured risks, and other contingent obligations known to
management;
"present fair saleable value" shall mean the amount that may be
realized within a reasonable time, considered to be six months to one
year, either through collection or sale at the regular market value,
conceiving the latter as the amount which could be obtained for such
properties within such period by a capable and diligent businessman from
an interested buyer who is willing to purchase under ordinary selling
conditions;
NOW, THEREFORE, ON THE BASIS OF THE FOREGOING, and the inquiries and
considerations set forth below, the undersigned in his capacity as principal
financial officer of each of the Borrowers hereby certifies that, both before
and after giving effect to the consummation of the Transactions:
1. I am, and at all pertinent times mentioned herein, have been, the
duly qualified and acting principal financial officer of each of the Borrowers
and have responsibility for the overall management of the financial affairs of
the Credit Parties, and the preparation of the financial statements of the
Credit Parties.
2. The financial information, projections and assumptions which underlie
and form the basis for the representations made in this Certificate were fair
and reasonable when made, were accurately computed and were made in good faith
and continue to be reasonable as of the date hereof.
3. In connection with preparing for the consummation of the
Transactions, I have in my capacity as principal financial officer of each of
the Borrowers carefully reviewed the contents of this Certificate, and I have
conferred with counsel for the purpose of discussing the meaning of this
Certificate.
4. To the best of my knowledge, the fair value and present fair saleable
value on a going concern basis of all assets and property of the Credit Parties,
on a consolidated basis, is greater than the total amount of indebtedness of the
Credit Parties, on a consolidated basis.
5. To the best of my knowledge, as of the Effective Date and after
giving effect to the consummation of the Transactions, the fair value and
present fair saleable value on a going concern basis of the assets of the Credit
Parties, on a consolidated basis, exceeds the amount that will be required to
pay the probable liabilities of the Credit Parties, on a consolidated basis, on
their indebtedness, as such indebtedness becomes absolute and matured.
Exhibit F-2
6. The Credit Parties, on a consolidated basis, do not have an
unreasonably small capital for them to carry on their business as now conducted
and as proposed to be conducted after the closing of the Transactions. The
undersigned recognizes that "unreasonably small capital" is dependent upon the
nature of the particular business or businesses conducted or to be conducted,
and the statement made in the preceding sentence is based upon the current and
anticipated future capital requirements for the current and anticipated future
conduct of the business of the Credit Parties.
7. To the best of my knowledge, as of the Effective Date and after
giving effect to the consummation of the Transactions, the Credit Parties, on a
consolidated basis, will have sufficient cash flow to enable them to pay their
debts as they mature.
8. To the best of my knowledge, as of the Effective Date and after
giving effect to the consummation of the Transactions, the Credit Parties , on a
consolidated basis, are able to pay their indebtedness as it matures in the
normal course of business.
9. The Credit Parties, on a consolidated basis, do not intend, in
consummating the Transactions, to hinder, delay, or defraud either present or
future creditors or any other person to which the Credit Parties, on a
consolidated basis, are indebted.
10. In reaching the conclusions set forth in this Certificate I have in
my capacity as principal financial officer of each of the Borrowers considered
and relied upon, among other things, the following, to the extent that I
considered appropriate:
(a) the realizable market values of the real property, equipment,
inventory, accounts receivable, customer lists, supply contracts,
joint venture interests, intellectual property and other
intangible assets, and all other property of the Credit Parties,
real and personal, tangible and intangible;
(b) the experience of management of the Credit Parties in acquiring
and disposing of their assets;
(c) all indebtedness of the Credit Parties known to me, including,
among other things, any claims arising out of pending or
threatened litigation against the Credit Parties;
(d) historical and anticipated growth in the sales volume of the
Credit Parties;
(e) the customary terms of trade payables of the Credit Parties;
(f) other financial information available and known to the
undersigned relating to any matters addressed herein; and
(g) the Facility Documents.
Exhibit F-3
IN WITNESS WHEREOF, the undersigned has executed this Solvency
Certificate as of August [-] 2002, on behalf of, and in his capacity as
principal financial officer of, each of the Borrowers.
HUTTIG BUILDING PRODUCTS, INC.
By:
----------------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Vice President -- Finance, Treasurer
and Chief Financial Officer
HUTTIG, INC.
By:
----------------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Treasurer
HUTTIG INDIANA, INC.
By:
----------------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Treasurer
HUTTIG INDIANA PARTNERSHIP LP
By: Huttig Indiana, Inc.
Its: General Partner
By:
----------------------------------------------
Name: Xxxxxx X. XxXxxx
Title: Treasurer
EXHIBIT G
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of August 12, 2002
(as amended, restated, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"; the terms defined therein being used herein as therein
defined) among Huttig Building Products, Inc., a Delaware corporation
("HUTTIG"), certain domestic Subsidiaries of Huttig party hereto, as borrower
(the "DOMESTIC SUBSIDIARIES", and collectively with Huttig, the "BORROWERS"),
the Guarantors from time to time party thereto, the Lenders from time to time
party thereto, JPMorgan Chase Bank, as Administrative and Collateral Agent,
Issuing Bank and Arranger, X.X. Xxxxxx Business Credit Corp., as Advisor, Bank
of America, N.A., as Syndication Agent, LaSalle Bank, National Association, as a
Managing Agent, General Electric Capital Corporation, as a Managing Agent,
Transamerica Business Capital Corporation, as Co-Agent, and Congress Financial
Corporation, as Documentation Agent.
The "Assignor" and the "Assignee" referred to on Schedule 1 hereto agree
as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, an interest in and to
the Assignor's rights and obligations under the Credit Agreement as of the date
hereof equal to the percentage interests specified on Schedule 1 hereto of all
outstanding rights and obligations under the Credit Agreement in respect of the
Revolving Credit Loans, as specified on Schedule 1 hereto. After giving effect
to such sale and assignment, the Assignee's Revolving Credit Commitment, the
amount of the Revolving Credit Loans owing to the Assignee will be as set forth
on Schedule 1 hereto.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Facility
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, the
Facility Documents or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no responsibility
with respect to the financial condition of the Borrowers or the Guarantors or
the performance or observance by the Borrowers or the Guarantors of any of their
obligations under any Facility Document or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Notes held by the Assignor and
requests that the Agent exchange such Notes for new Notes payable to the order
of the Assignee in amounts equal to the Revolving Credit Commitment, assumed by
the Assignee pursuant hereto and, to the extent the Assignor has retained any
Revolving Credit Commitment, to the order of the Assignor in amounts equal to
the Revolving Credit Commitment, respectively, retained by the Assignor under
the Credit Agreement as specified on Schedule 1 hereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Agent, the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not
taking action under the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Agent to take such action as agent on
its behalf and to exercise such powers and discretion under the Facility
Documents as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms all of the obligations that by the
terms of the Credit Agreement are required to be performed by it as a Lender;
(vi) represents that it is entitled to receive any payments to be made to it
under the Credit Agreement without the withholding of any tax and will furnish
to the Agent such forms, certifications, statements and other documents as the
Agent may request from time to time to evidence such Lender's exemption from the
withholding of any tax imposed by any jurisdiction or to enable the Agent to
comply with any applicable laws or regulations relating thereto; and (vii)
attaches any U.S. Internal Revenue Service forms or other forms required under
the Credit Agreement.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for approval by the Agent and acceptance and recording by
the Agent. The effective date for this Assignment and Acceptance (the "Effective
Date") shall be the date of acceptance hereof by the Agent, unless otherwise
specified on Schedule 1 hereto.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
8. This Assignment and Acceptance shall be governed and construed by the
laws of the State of New York.
Exhibit G-2
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed by their officers thereunto duly
authorized as of the date specified on Schedule 1 annexed hereto.
[Assignor] [Assignee]
By: By:
--------------------------------- ---------------------------------
Name: Name:
Title: Title:
Acknowledged and Approved:
JPMORGAN CHASE BANK,
as Agent
By:
---------------------------------
Name:
Title:
Exhibit G-3
Schedule I
to Assignment and Acceptance
relating to Credit Agreement, dated as of August 12 2002,
among Huttig Building Products, Inc.,
certain of its direct and indirect subsidiaries as co-borrowers,
the Lenders party thereto and JPMorgan Chase Bank, as Agent
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Principal Amount of Revolving Principal Amount of Revolving Percentage of Facility
Credit Commitment Assigned Credit Commitment Retained Assigned
----------------------------- ----------------------------- ----------------------
$ $ %
Exhibit G-4
EXHIBIT H
FORM OF WEEKLY COLLATERAL CERTIFICATE
[JPMORGAN CHASE BANK LOGO]
--------------------------------------------------------------------------------
JPMORGAN CHASE BANK
WEEKLY COLLATERAL CERTIFICATE
HUTTIG BUILDING PRODUCTS, INC.
DATE: SCHEDULE #
-------------------- -------------------
HUTTIG PRINEVILLE TOTAL
------------- ------------- -------------
BEGINNING ACCOUNTS RECEIVABLE
PLUS GROSS SALES
------------- ------------- -------------
LESS GROSS COLLECTIONS
DEPOSIT DATE:
------------ ------------- ------------- -------------
LESS CREDITS
------------- ------------- -------------
PLUS/(MINUS) ADJUSTMENTS
------------- ------------- -------------
CLOSING ACCOUNTS RECEIVABLE
============= ============= =============
GROSS COLLECTIONS
------------- ------------- -------------
DEPOSIT DATE:
------------ ------------- ------------- -------------
LESS DEDUCTIONS
------------- ------------- -------------
PLUS NON A/R CASH
------------- ------------- -------------
PLUS/(MINUS) ADJUSTMENTS
------------- ------------- -------------
NET COLLECTIONS
============= ============= =============
Exhibit H-2
THE UNDERSIGNED CERTIFIES THE INFORMATION IN THIS REPORT TO THE JPMORGAN CHASE
BANK IS ACCURATE BASED ON THE ACCOUNT RECORDS OF THE RESPECTIVE COMPANY.
AUTHORIZED SIGNATURE:
-------------------------------------------
Exhibit H-3
