Exhibit 4.1
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CREDIT AGREEMENT
Dated as of May 23, 2003
among
THERMADYNE INDUSTRIES, INC.,
THERMAL DYNAMICS CORPORATION,
TWECO PRODUCTS, INC.,
XXXXXX EQUIPMENT COMPANY,
C & G SYSTEMS, INC.,
STOODY COMPANY,
THERMAL ARC, INC.,
PROTIP CORPORATION and
THERMADYNE INTERNATIONAL CORP.,
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
and
GECC CAPITAL MARKETS GROUP, INC.,
as Lead Arranger
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TABLE OF CONTENTS
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1. AMOUNT AND TERMS OF CREDIT..............................................................................................3
1.1 Credit Facilities.............................................................................................3
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1.2 Letters of Credit.............................................................................................7
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1.3 Prepayments...................................................................................................7
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1.4 Use of Proceeds...............................................................................................8
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1.5 Interest and Applicable Margins...............................................................................8
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1.6 Cash Management Systems......................................................................................10
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1.7 Fees.........................................................................................................10
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1.8 Receipt of Payments..........................................................................................11
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1.9 Application and Allocation of Payments.......................................................................11
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1.10 Loan Account and Accounting..................................................................................11
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1.11 Indemnity....................................................................................................12
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1.12 Access.......................................................................................................14
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1.13 Taxes........................................................................................................14
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1.14 Capital Adequacy; Increased Costs; Illegality................................................................16
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1.15 Single Loan..................................................................................................18
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2. CONDITIONS PRECEDENT...................................................................................................18
2.1 Conditions to the Initial Revolving Credit Advance...........................................................18
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2.2 Further Conditions to Each Loan..............................................................................20
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3. REPRESENTATIONS AND WARRANTIES.........................................................................................20
3.1 Corporate Existence; Compliance with Law; FEIN...............................................................20
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3.2 Executive Offices, Collateral Locations......................................................................21
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3.3 Corporate Power, Authorization, Enforceable Obligations......................................................21
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3.4 Financial Statements and Projections.........................................................................22
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3.5 Material Adverse Effect......................................................................................22
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3.6 Ownership of Property; Liens.................................................................................23
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3.7 Labor Matters................................................................................................23
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3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness....................................24
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3.9 Government Regulation........................................................................................24
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3.10 Margin Regulations...........................................................................................24
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3.11 Taxes........................................................................................................24
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3.12 ERISA........................................................................................................25
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3.13 No Litigation................................................................................................26
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3.14 Brokers......................................................................................................26
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3.15 Intellectual Property........................................................................................26
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3.16 Full Disclosure..............................................................................................26
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3.17 Environmental Matters........................................................................................27
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3.18 Insurance....................................................................................................27
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3.19 Deposit and Disbursement Accounts............................................................................27
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3.20 Government Contracts.........................................................................................28
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3.21 Customer and Trade Relations.................................................................................28
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3.22 Bonding; Licenses............................................................................................28
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3.23 Solvency.....................................................................................................28
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3.24 Status of Holdings...........................................................................................28
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4. FINANCIAL STATEMENTS AND INFORMATION...................................................................................28
4.1 Reports and Notices..........................................................................................28
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4.2 Communication with Accountants...............................................................................28
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5. AFFIRMATIVE COVENANTS..................................................................................................29
5.1 Maintenance of Existence and Conduct of Business.............................................................29
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5.2 Payment of Charges...........................................................................................29
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5.3 Books and Records............................................................................................30
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5.4 Insurance; Damage to or Destruction of Collateral............................................................30
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5.5 Compliance with Laws.........................................................................................31
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5.6 Supplemental Disclosure......................................................................................31
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5.7 Intellectual Property........................................................................................31
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5.8 Environmental Matters........................................................................................31
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5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases........................32
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5.10 Further Assurances...........................................................................................33
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6. NEGATIVE COVENANTS.....................................................................................................33
6.1 Mergers, Subsidiaries, Etc...................................................................................33
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6.2 Investments; Loans and Advances..............................................................................34
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6.3 Indebtedness.................................................................................................35
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6.4 Employee Loans and Affiliate Transactions....................................................................36
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6.5 Capital Structure and Business...............................................................................36
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6.6 Guaranteed Indebtedness......................................................................................36
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6.7 Liens........................................................................................................36
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6.8 Sale of Stock and Assets.....................................................................................37
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6.9 ERISA........................................................................................................37
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6.10 Financial Covenants..........................................................................................37
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6.11 [Intentionally Omitted]......................................................................................37
6.12 Sale-Leasebacks..............................................................................................38
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6.13 Cancellation of Indebtedness.................................................................................38
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6.14 Restricted Payments..........................................................................................38
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6.15 Change of Corporate Name, State of Incorporation or Location; Change of Fiscal Year..........................38
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6.16 No Impairment of Intercompany Transfers......................................................................38
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6.17 Real Estate Purchases........................................................................................39
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6.18 Changes Relating to Senior Notes.............................................................................39
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6.19 Holdings.....................................................................................................39
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7. TERM...................................................................................................................39
7.1 Termination..................................................................................................39
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7.2 Survival of Obligations Upon Termination of Financing Arrangements...........................................39
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8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES.................................................................................39
8.1 Events of Default............................................................................................39
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8.2 Remedies.....................................................................................................41
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8.3 Waivers by Credit Parties....................................................................................42
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9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT....................................................................42
9.1 Assignment and Participations................................................................................42
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9.2 Appointment of Agent.........................................................................................45
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9.3 Agent's Reliance, Etc........................................................................................46
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9.4 GE Capital and Affiliates....................................................................................46
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9.5 Lender Credit Decision.......................................................................................47
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9.6 Indemnification..............................................................................................47
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9.7 Successor Agent..............................................................................................47
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9.8 Setoff and Sharing of Payments...............................................................................48
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9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.....................................49
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10. SUCCESSORS AND ASSIGNS.................................................................................................51
10.1 Successors and Assigns.......................................................................................51
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11. MISCELLANEOUS..........................................................................................................51
11.1 Complete Agreement; Modification of Agreement................................................................51
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11.2 Amendments and Waivers.......................................................................................51
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11.3 Fees and Expenses............................................................................................53
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11.4 No Waiver....................................................................................................55
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11.5 Remedies.....................................................................................................55
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11.6 Severability.................................................................................................55
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11.7 Conflict of Terms............................................................................................55
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11.8 Confidentiality..............................................................................................55
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11.9 GOVERNING LAW................................................................................................56
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11.10 Notices......................................................................................................57
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11.11 Section Titles...............................................................................................57
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11.12 Counterparts.................................................................................................57
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11.13 WAIVER OF JURY TRIAL.........................................................................................57
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11.14 Press Releases and Related Matters...........................................................................58
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11.15 Reinstatement................................................................................................58
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11.16 Advice of Counsel............................................................................................58
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11.17 No Strict Construction.......................................................................................58
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11.18 Limitation on Security Interest with respect to Foreign Subsidiaries.........................................58
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12. CROSS-GUARANTY.........................................................................................................59
12.1 Cross-Guaranty...............................................................................................59
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12.2 Waivers by Credit Parties....................................................................................59
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12.3 Benefit of Guaranty..........................................................................................59
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12.4 Waiver of Subrogation, Etc...................................................................................60
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12.5 Election of Remedies.........................................................................................60
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12.6 Limitation...................................................................................................60
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12.7 Contribution with Respect to Guaranty Obligations............................................................61
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12.8 Liability Cumulative.........................................................................................62
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INDEX OF APPENDICES
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Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
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Annex C (Section 1.8) - Cash Management System
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Annex D (Section 2.1(a)) - Closing Checklist
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Annex E (Section 4.1(a)) - Financial Statements and Projections -- Reporting
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Annex F (Section 6.10) - Financial Covenants
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Annex G (Section 9.9(a)) - Lenders' Wire Transfer Information
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Annex H (Section 11.10) - Notice Addresses
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Annex I (from Annex A -
Commitments definition) Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b)(ii) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit B-1 - Application for Standby Letter of Credit
Exhibit B-2 Master Agreement for Standby Letters
of Credit
Exhibit C Compliance Certificate
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization; FEIN
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations
Disclosure Schedule 3.4(A) - Financial Statements
Disclosure Schedule 3.4(B) - Pro Forma
Disclosure Schedule 3.4(C) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.14 - Brokers
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Bonds; Patent, Trademark Licenses
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
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This CREDIT AGREEMENT (this "Agreement"), dated as of May 23, 2003
among THERMADYNE INDUSTRIES, INC., a Delaware corporation ("Industries"),
THERMAL DYNAMICS CORPORATION, a Delaware corporation ("Dynamics"), TWECO
PRODUCTS, INC., a Delaware corporation ("Tweco"), XXXXXX EQUIPMENT COMPANY, a
Delaware corporation ("Xxxxxx"), C & G SYSTEMS, INC., an Illinois corporation
("C & G"), STOODY COMPANY, a Delaware corporation ("Stoody"), THERMAL ARC, INC.,
a Delaware corporation ("Thermal Arc"), PROTIP CORPORATION, a Missouri
corporation (`ProTip"), and THERMADYNE INTERNATIONAL CORPORATION, a Delaware
corporation ("International") (International, ProTip, Thermal Arc, Stoody, C &
G, Xxxxxx, Tweco, Dynamics and Industries are sometimes collectively referred to
herein as the "Borrowers" and individually as a "Borrower"); the other Credit
Parties signatory hereto; GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation (in its individual capacity, "GE Capital"), for itself, as Lender,
and as Agent for Lenders, and the other Lenders signatory hereto from time to
time.
RECITALS
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WHEREAS, Borrowers have requested that Lenders extend a revolving
credit facility to Borrowers of up to Fifty Million Dollars ($50,000,000) in the
aggregate for the purpose of (i) with respect to Revolving Credit Advances made
on the Closing Date, (a) refinancing certain Postpetition secured Indebtedness
of Borrowers, (b) repaying certain Prepetition obligations of Borrowers and (c)
paying certain fees and expenses incurred by the Borrowers in connection with
the Plan of Reorganization and (ii) with respect to Revolving Credit Advances
made after the Closing Date, (a) providing working capital financing for
Borrowers, (b) repaying certain Prepetition obligations of Holdings and its
Subsidiaries, (c) paying certain fees and expenses incurred by Holdings and its
Subsidiaries in connection with the Plan of Reorganization, (d) providing funds
for other general corporate purposes of Borrowers and (e) providing funds for
other purposes permitted hereunder; and for these purposes, Lenders are willing
to make certain loans and other extensions of credit to Borrowers of up to such
amount upon the terms and conditions set forth herein;
WHEREAS, Borrowers have agreed to secure all of their obligations
under the Loan Documents by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon all of their existing and
after-acquired personal and real property, subject to limitations regarding the
Stock of Foreign Subsidiaries;
WHEREAS, each of Thermadyne Holdings Corporation, a Delaware
corporation ("Holdings"), Thermadyne Receivables, Inc., a Delaware corporation
("Thermadyne Receivables"), MECO Holding Company, a Delaware corporation ("MECO
Holdings"), and C&G Systems Holding, Inc., a Delaware corporation ("C&G
Holdings") is willing to guarantee all of the obligations of Borrowers to Agent
and Lenders under the Loan Documents; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
2
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility.
(i) Subject to the terms and conditions hereof, each Revolving
Lender agrees to make available to Borrowers from time to time until the
Commitment Termination Date its Pro Rata Share of advances (each, a "Revolving
Credit Advance"). The Pro Rata Share of the Revolving Loan of any Revolving
Lender shall not at any time exceed its separate Revolving Loan Commitment. The
obligations of each Revolving Lender hereunder shall be several and not joint.
Until the Commitment Termination Date, Borrowers may borrow, repay and reborrow
under this Section 1.1(a); provided that the amount of any Revolving Credit
Advance to be made at any time shall not exceed Borrowing Availability at such
time. Borrowing Availability may be reduced by Reserves imposed by Agent in its
reasonable credit judgment, including EBITDA Reserves. Each Revolving Credit
Advance shall be made on notice by Borrower Representative on behalf of
Borrowers to one of the representatives of Agent identified in Schedule 1.1 at
the address specified therein. Any such notice must be given no later than (1)
12:00 noon (New York time) on the Business Day of the proposed Revolving Credit
Advance, in the case of an Index Rate Loan, or (2) 12:00 noon (New York time) on
the date which is three (3) Business Days prior to the proposed Revolving Credit
Advance, in the case of a LIBOR Loan. Each such notice (a "Notice of Revolving
Credit Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i), and shall include the
information required in such Exhibit and such other information as may be
reasonably required by Agent. If Borrowers desire to have the Revolving Credit
Advances bear interest by reference to a LIBOR Rate, Borrower Representative
must comply with Section 1.5(e).
(ii) Except as provided in Section 1.12, Borrowers shall execute
and deliver to each Revolving Lender a note to evidence the Revolving Loan
Commitment of that Revolving Lender. Each note shall be in the principal amount
of the Revolving Loan Commitment of the applicable Revolving Lender, dated the
Closing Date and substantially in the form of Exhibit 1.1(a)(ii) (each a
"Revolving Note" and, collectively, the "Revolving Notes"). Each Revolving Note
shall represent the obligation of Borrowers to pay the amount of the applicable
Revolving Lender's Revolving Loan Commitment or, if less, such Revolving
Lender's Pro Rata Share of the aggregate unpaid principal amount of all
Revolving Credit Advances to Borrowers together with interest thereon as
prescribed in Section 1.5. The entire unpaid balance of the aggregate Revolving
3
Loan and all other non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.
(iii) Anything in this Agreement to the contrary
notwithstanding, at the request of Borrower Representative, in its discretion
Agent may (but shall have absolutely no obligation to), make Revolving Credit
Advances to Borrowers on behalf of Revolving Lenders in amounts that cause the
outstanding balance of the aggregate Revolving Loan to exceed the Borrowing Base
(less the Swing Line Loan) (any such excess Revolving Credit Advances are herein
referred to collectively as "Overadvances"); provided that (A) no such event or
occurrence shall cause or constitute a waiver of Agent's, Swing Line Lender's or
Revolving Lenders' right to refuse to make any further Overadvances, Swing Line
Advances or Revolving Credit Advances, or incur any Letter of Credit
Obligations, as the case may be, at any time that an Overadvance exists, and (B)
no Overadvance shall result in an Event of Default based on Borrowers' failure
to comply with Section 1.3(b) for so long as Agent permits such Overadvance to
be outstanding, but solely with respect to the amount of such Overadvance. In
addition, Overadvances may be made even if the conditions to lending set forth
in Section 2 have not been met. All Overadvances shall constitute Index Rate
Loans, shall bear interest at the Default Rate and shall be payable on the
earlier of demand or the Commitment Termination Date. Except as otherwise
provided in Section 1.7(b), the authority of Agent to make Overadvances is
limited to an aggregate amount not to exceed $1,000,000 at any time, shall not
cause the aggregate Revolving Loan to exceed the Maximum Amount, and may be
revoked prospectively by a written notice to Agent signed by Revolving Lenders
holding more than 50% of the Revolving Loan Commitments.
(iv) If average Borrowing Availability for any single month
during the first Loan Year is less than $5,000,000, Borrowers shall promptly
engage an appraiser reasonably acceptable to Agent and deliver or cause to be
delivered to Agent an appraisal of inventory and equipment in form and substance
reasonably acceptable to Agent (an "Appraisal"). If average Borrowing
Availability for any single month during the second Loan Year is less than
$10,000,000, (a) Borrowers shall promptly obtain and deliver an Appraisal and
(b) without limiting Agent's rights to impose Reserves generally, Agent may, at
its election, impose a Reserve against Borrowing Availability of up to
$5,000,000 (an "EBITDA Reserve"). If average Borrowing Availability for any
single month during the third Loan Year is less than $15,000,000 (calculated
without deduction of any EBITDA Reserve imposed during the second Loan Year),
(a) Borrowers shall promptly obtain and deliver an Appraisal as set forth above,
and (b) Agent may, at its election, impose an EBITDA Reserve against Borrowing
Availability of up to $10,000,000; provided that the EBITDA Reserves imposed in
the second Loan Year and the third Loan Year shall not exceed $10,000,000 in the
aggregate.
(b) Swing Line Facility.
(i) Agent shall notify the Swing Line Lender upon Agent's
receipt of any Notice of Revolving Credit Advance. Subject to the terms and
conditions hereof, the Swing Line Lender may, in its discretion, make available
from time to time until the Commitment Termination Date advances (each, a "Swing
Line Advance") in accordance with any such notice. The provisions of this
Section 1.1(b) shall not relieve Revolving Lenders of their obligations to make
Revolving Credit Advances under Section 1.1(a); provided that if the Swing Line
4
Lender makes a Swing Line Advance pursuant to any such notice, such Swing Line
Advance shall be in lieu of any Revolving Credit Advance that otherwise may be
made by Revolving Credit Lenders pursuant to such notice. The aggregate amount
of Swing Line Advances outstanding shall not exceed at any time the lesser of
(A) the Swing Line Commitment and (B) the lesser of the Maximum Amount and
(except for Overadvances) the Borrowing Base, in each case, less the outstanding
balance of the Revolving Loan at such time ("Swing Line Availability"). Until
the Commitment Termination Date, Borrowers may from time to time borrow, repay
and reborrow under this Section 1.1(b). Each Swing Line Advance shall be made
pursuant to a Notice of Revolving Credit Advance delivered to Agent by Borrower
Representative on behalf of the Borrowers in accordance with Section 1.1(a). Any
such notice must be given no later than 12:00 noon (New York time) on the
Business Day of the proposed Swing Line Advance. Unless the Swing Line Lender
has received at least one Business Day's prior written notice from Requisite
Lenders instructing it not to make a Swing Line Advance, the Swing Line Lender
shall, notwithstanding the failure of any condition precedent set forth in
Sections 2.2, be entitled to fund that Swing Line Advance, and to have each
Revolving Lender make Revolving Credit Advances in accordance with Section
1.1(b)(iii) or purchase participating interests in accordance with Section
1.1(b)(iv). Notwithstanding any other provision of this Agreement or the other
Loan Documents, the Swing Line Loan shall constitute an Index Rate Loan.
Borrowers shall repay the aggregate outstanding principal amount of the Swing
Line Loan upon demand therefor by Agent.
(ii) Borrowers shall execute and deliver to the Swing Line
Lender a promissory note to evidence the Swing Line Commitment. Such note shall
be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(b)(ii) (the "Swing Line Note"). Each Swing Line Note shall represent the
obligation of Borrowers to pay the amount of the Swing Line Commitment or, if
less, the aggregate unpaid principal amount of all Swing Line Advances together
with interest thereon as prescribed in Section 1.5. The entire unpaid balance of
the Swing Line Loan and all other noncontingent Obligations shall be immediately
due and payable in full in immediately available funds on the Commitment
Termination Date if not sooner paid in full.
(iii) The Swing Line Lender, at any time and from time to time
no less frequently than once weekly shall on behalf of Borrowers (and each
Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its
behalf) request each Revolving Lender (including the Swing Line Lender) to make
a Revolving Credit Advance to Borrowers (which shall be an Index Rate Loan) in
an amount equal to that Revolving Lender's Pro Rata Share of the principal
amount of the applicable Borrower's Swing Line Loan (the "Refunded Swing Line
Loan") outstanding on the date such notice is given. Unless any of the events
described in Sections 8.1(h) or 8.1(i) has occurred (in which event the
procedures of Section 1.1(b)(iv) shall apply) and regardless of whether the
conditions precedent set forth in this Agreement to the making of a Revolving
Credit Advance are then satisfied, each Revolving Lender shall disburse directly
to Agent, its Pro Rata Share of a Revolving Credit Advance on behalf of the
Swing Line Lender prior to 3:00 p.m. (New York time) in immediately available
funds on the Business Day next succeeding the date that notice is given. The
proceeds of those Revolving Credit Advances shall be immediately paid to the
Swing Line Lender and applied to repay the Refunded Swing Line Loan.
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(iv) If, prior to repaying a Swing Line Loan with a Revolving
Credit Advance pursuant to Section 1.1(b)(iii), one of the events described in
Sections 8.1(h) or 8.1(i) has occurred, then, subject to the provisions of
Section 1.1(b)(v) below, each Revolving Lender shall, on the date such Revolving
Credit Advance was to have been made for the benefit of the Borrowers, purchase
from the Swing Line Lender an undivided participation interest in the Swing Line
Loan in an amount equal to its Pro Rata Share of such Swing Line Loan. Upon
request, each Revolving Lender shall promptly transfer to the Swing Line Lender,
in immediately available funds, the amount of its participation interest.
(v) Each Revolving Lender's obligation to make Revolving Credit
Advances in accordance with Section 1.1(b)(iii) and to purchase participation
interests in accordance with Section 1.1(b)(iv) shall be absolute and
unconditional and shall not be affected by any circumstance, including (A) any
setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the Swing Line Lender, any Borrower or any other Person
for any reason whatsoever; (B) the occurrence or continuance of any Event of
Default; (C) any inability of Borrowers to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time; or (D) any other
circumstance, happening or event whatsoever, whether or not similar to any of
the foregoing. If any Revolving Lender does not make available to Agent or the
Swing Line Lender, as applicable, the amount required pursuant to Sections
1.1(b)(iii) or 1.1(b)(iv), as the case may be, the Swing Line Lender shall be
entitled to recover such amount on demand from such Revolving Lender, together
with interest thereon for each day from the date of non-payment until such
amount is paid in full at the Federal Funds Rate for the first two Business Days
and at the Index Rate thereafter.
(c) Reliance on Notices; Appointment of Borrower Representative.
Agent shall be entitled to rely upon, and shall be fully protected in relying
upon, any Notice of Revolving Credit Advance, Notice of Conversion/Continuation
or similar notice believed by Agent to be genuine. Agent may assume that each
Person executing and delivering any notice in accordance herewith was duly
authorized, unless the responsible individual acting thereon for Agent has
actual knowledge to the contrary. Each Borrower hereby designates Holdings as
its representative and agent on its behalf for the purposes of issuing Notices
of Revolving Credit Advances and Notices of Conversion/Continuation, giving
instructions with respect to the disbursement of the proceeds of the Revolving
Credit Advances, selecting interest rate options, requesting Letters of Credit,
giving and receiving all other notices and consents hereunder or under any of
the other Loan Documents and taking all other actions (including in respect of
compliance with covenants) on behalf of any Borrower or Borrowers under the Loan
Documents. Borrower Representative hereby accepts such appointment. Agent and
each Lender may regard any notice or other communication pursuant to any Loan
Document from Borrower Representative as a notice or communication from all
Borrowers, and may give any notice or communication required or permitted to be
given to any Borrower or Borrowers hereunder to Borrower Representative on
behalf of such Borrower or Borrowers. Each Borrower agrees that each notice,
election, representation and warranty, covenant, agreement and undertaking made
on its behalf by Borrower Representative shall be deemed for all purposes to
have been made by such Borrower and shall be binding upon and enforceable
against such Borrower to the same extent as if the same had been made directly
by such Borrower.
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1.2 Letters of Credit. Subject to and in accordance with the terms
and conditions contained herein and in Annex B, Borrower Representative, on
behalf of the applicable Borrower, shall have the right to request, and
Revolving Lenders agree to incur, or purchase participations in, Letter of
Credit Obligations in respect of each Borrower.
1.3 Prepayments.
(a) Voluntary Prepayments; Reductions in Revolving Loan Commitments.
Borrowers may at any time on at least five (5) days' prior written notice by
Borrower Representative to Agent permanently reduce in part (but not terminate
in whole) the Revolving Loan Commitment; provided that (A) any such prepayments
or reductions shall be in a minimum amount of $5,000,000 and integral multiples
of $1,000,000 in excess of such amount, (B) the Revolving Loan Commitment shall
not be reduced to an amount less than $25,000,000, and (C) after giving effect
to such reductions, Borrowers shall comply with Section 1.3(b). In addition,
Borrowers may at any time on at least ten (10) days' prior written notice by
Borrower Representative to Agent terminate the Revolving Loan Commitment;
provided that upon such termination, the Revolving Loan and other Obligations
shall be immediately due and payable in full and all Letter of Credit
Obligations shall be cash collateralized or otherwise satisfied in accordance
with Annex B hereto. Any voluntary prepayment and corresponding reduction or
termination of the Revolving Loan Commitment must be accompanied by payment of
the Fee required by Section 1.7(c), if any, plus the payment of any LIBOR
funding breakage costs in accordance with Section 1.11(b). Upon any such
reduction or termination of the Revolving Loan Commitment, each Borrower's right
to request Revolving Credit Advances, or request that Letter of Credit
Obligations be incurred on its behalf, or request Swing Line Advances, shall
simultaneously be permanently reduced or terminated, as the case may be;
provided that a permanent reduction of the Revolving Loan Commitment shall
require a corresponding pro rata reduction in the L/C Sublimit.
(b) Mandatory Prepayments. If at any time the aggregate outstanding
balances of the Revolving Loan and the Swing Line Loan exceed the lesser of (A)
the Maximum Amount and (B) the Borrowing Base, Borrowers shall immediately repay
the aggregate outstanding Revolving Credit Advances to the extent required to
eliminate such excess. If any such excess remains after repayment in full of the
aggregate outstanding Revolving Credit Advances, Borrowers shall provide cash
collateral for the Letter of Credit Obligations in the manner set forth in Annex
B to the extent required to eliminate such excess. Notwithstanding the
foregoing, any Overadvance made pursuant to Section 1.1(a)(iii) shall be repaid
in accordance with Section 1.1(a)(iii).
(c) Application of Certain Mandatory Prepayments. Any prepayments
made by any Borrower pursuant to Sections 1.3(b) above or 5.4(b) shall be
applied as follows: first, to Fees and reimbursable expenses of Agent then due
and payable pursuant to any of the Loan Documents; second, to interest then due
and payable on the Swing Line Loan; third, to the principal balance of the Swing
Line Loan until the same has been repaid in full; fourth, to interest then due
and payable on Revolving Credit Advances; fifth, to the principal balance of
Revolving Credit Advances until the same has been paid in full; sixth, to any
Letter of Credit Obligations to provide cash collateral therefor in the manner
set forth in Annex B, until all such Letter of Credit Obligations have been
7
fully cash collateralized in the manner set forth in Annex B; and seventh, to
all other Obligations, including expenses of Lenders reimbursable under Section
11.3.
(d) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 Use of Proceeds. Borrowers shall utilize the proceeds of the
Revolving Loan as follows: (i) with respect to Revolving Credit Advances made on
the Closing Date, (a) funding the Refinancing, (b) repaying certain Prepetition
obligations of Borrowers and (c) paying certain fees and expenses incurred by
the Borrowers in connection with the Plan of Reorganization (as hereinafter
defined) and (ii) with respect to Revolving Credit Advances made after the
Closing Date, (a) providing working capital financing for Borrowers, (b)
providing funds for other general corporate purposes of Borrowers, (c) repaying
certain Prepetition obligations of Holdings and its Subsidiaries, (d) paying
certain fees and expenses incurred by Holdings and its Subsidiaries in
connection with the Plan of Reorganization, and (e) providing funds for other
purposes permitted hereunder. Disclosure Schedule (1.4) contains a description
of Borrowers' sources and uses of funds as of the Closing Date, including
Revolving Credit Advances and Letter of Credit Obligations to be made or
incurred on that date, and a funds flow memorandum detailing how funds from each
source are to be transferred to particular uses.
1.5 Interest and Applicable Margins.
(a) Borrowers shall pay interest to Agent, for the ratable benefit of
Lenders on the Revolving Loan, in arrears on each applicable Interest Payment
Date. The Revolving Loan shall bear interest at the Index Rate plus the
Applicable Revolver Index Margin per annum or, at the election of Borrower
Representative, the applicable LIBOR Rate plus the Applicable Revolver LIBOR
Margin per annum. The Swing Line Loan shall bear interest at the Index Rate plus
the Applicable Revolver Index Margin per annum.
The Applicable Margins are as follows:
Applicable Revolver Index Margin 2.25%
Applicable Revolver LIBOR Margin 3.25%
Applicable L/C Margin 3.00%
Applicable Unused Line Fee Margin 0.75%
(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
8
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a 360-day year, in each case for
the actual number of days occurring in the period for which such interest and
Fees are payable. The Index Rate is a floating rate determined for each day.
Each determination by Agent of an interest rate and Fees hereunder shall be
presumptive evidence of the correctness of such rates and Fees.
(d) So long as an Event of Default has occurred and is continuing
under Section 8.1(a), (h) or (i) or so long as any other Event of Default has
occurred and is continuing and at the election of Agent (or upon the written
request of Requisite Lenders) confirmed by written notice from Agent to Borrower
Representative, the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percentage points (2%) per annum above the
rates of interest or the Letter of Credit Fees otherwise applicable hereunder
unless Agent or Requisite Lenders elect to impose a smaller increase (as finally
determined, the "Default Rate"), and all such Obligations shall bear interest at
the Default Rate applicable to such Obligations. Interest and Letter of Credit
Fees at the Default Rate shall accrue from the initial date of such Event of
Default until that Event of Default is cured or waived and shall be payable upon
demand.
(e) Subject to the conditions precedent set forth in Section 2.2,
Borrower Representative shall have the option to (i) request that any Revolving
Credit Advance be made as a LIBOR Loan, (ii) convert at any time all or any part
of the outstanding Revolving Loans (other than the Swing Line Loan) from Index
Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan,
subject to payment of LIBOR breakage costs in accordance with Section 1.11(b) if
such conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan (other than the Swing
Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR Period
and the succeeding LIBOR Period of that continued Loan shall commence on the
first day after the last day of the LIBOR Period of the Loan to be continued.
Any Loan or group of Loans having the same proposed LIBOR Period to be made or
continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$2,000,000 and integral multiples of $1,000,000 in excess of such amount. Any
such election must be made by 12:00 noon (New York time) on the third Business
Day prior to (1) the date of any proposed Advance which is to bear interest at
the LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans
to be continued as such, or (3) the date on which Borrower Representative wishes
to convert any Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by
Borrower Representative in such election. If no election is received with
respect to a LIBOR Loan by 12:00 noon (New York time) on the third Business Day
prior to the end of the LIBOR Period with respect thereto (or if a Default or an
Event of Default has occurred and is continuing or if the additional conditions
precedent set forth in Section 2.2 shall not have been satisfied), that LIBOR
Loan shall be converted to an Index Rate Loan at the end of its LIBOR Period.
Borrower Representative must make such election by notice to Agent in writing,
by telecopy or overnight courier. In the case of any conversion or continuation,
such election must be made pursuant to a written notice (a "Notice of
Conversion/Continuation") in the form of Exhibit 1.5(e). No Loan shall be made
as or converted into a LIBOR Loan until seven (7) days after the Closing Date.
(f) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
9
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. In no event shall the total interest received by any Lender pursuant
to the terms hereof exceed the amount that such Lender could lawfully have
received had the interest due hereunder been calculated for the full term hereof
at the Maximum Lawful Rate.
1.6 Cash Management Systems. On or prior to the Closing Date,
Borrowers will establish and will maintain until the Termination Date, the cash
management systems described in Annex C (the "Cash Management Systems").
1.7 Fees.
(a) Borrowers shall pay to GE Capital, individually, the Fees
specified in the GE Capital Fee Letter.
(b) As additional compensation for the Revolving Lenders, Borrowers
shall pay to Agent, for the ratable benefit of such Lenders, in arrears, on the
first Business Day of each month prior to the Commitment Termination Date and on
the Commitment Termination Date, a Fee for Borrowers' non-use of available funds
in an amount equal to the Applicable Unused Line Fee Margin per annum
(calculated on the basis of a 360 day year for actual days elapsed) multiplied
by the difference between (x) the Maximum Amount (as it may be reduced from time
to time) and (y) the average for the period of the daily closing balances of the
aggregate Revolving Loan and the Swing Line Loan outstanding during the period
for which such Fee is due.
(c) If Borrowers prepay the Revolving Loan and reduce or terminate
the Revolving Loan Commitment during the first two Loan Years, whether
voluntarily or involuntarily and whether before or after acceleration of the
Obligations, or if any of the Commitments are otherwise terminated, Borrowers
shall pay to Agent, for the benefit of Lenders as liquidated damages and
compensation for the costs of being prepared to make funds available hereunder
an amount equal to the Applicable Percentage (as defined below) multiplied by
the amount of the reduction of the Revolving Loan Commitment. As used herein,
the term "Applicable Percentage" shall mean (x) two percent (2%), in the case of
a prepayment and corresponding reduction or termination of the Revolving Loan
Commitment during the first Loan Year and (y) one percent (1%), in the case of a
prepayment and corresponding reduction or termination of the Revolving Loan
Commitment during the second Loan Year. The Credit Parties agree that the
Applicable Percentages are a reasonable calculation of Lenders' lost profits in
view of the difficulties and impracticality of determining actual damages
resulting from an early termination of the Commitments. Notwithstanding the
10
foregoing, no prepayment fee shall be payable by Borrowers upon a mandatory
prepayment made pursuant to Sections 1.3(b), 1.9, 1.14(c) or 5.4(b); provided
that Borrowers do not permanently reduce or terminate the Revolving Loan
Commitment upon any such prepayment.
(d) Borrowers shall pay to Agent, for the ratable benefit of
Revolving Lenders, the Letter of Credit Fee as provided in Annex B.
1.8 Receipt of Payments. Borrowers shall make each payment under this
Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing Fees and determining Borrowing Availability as of any date, all
payments shall be deemed received on the Business Day on which immediately
available funds therefor are received in the Collection Account prior to 2:00
p.m. (New York time). Payments received after 2:00 p.m. (New York time) on any
Business Day or on a day that is not a Business Day shall be deemed to have been
received on the following Business Day. Solely for purposes of calculating
interest, all payments shall be deemed received on the first Business Day
following the Business Day on which immediately available funds therefor are
received in the Collection Account prior to 2 p.m. (New York time).
1.9 Application and Allocation of Payments.
(a) So long as no Event of Default has occurred and is continuing,
(i) payments consisting of proceeds of Accounts received in the ordinary course
of business shall be applied, first, to the Swing Line Loan and, second, the
Revolving Loan; (ii) payments matching specific scheduled payments then due
shall be applied to those scheduled payments; (iii) voluntary prepayments shall
be applied in accordance with the provisions of Section 1.3(a); and (iv)
mandatory prepayments shall be applied as set forth in Section 1.3(c). All
payments and prepayments applied to a particular Loan shall be applied ratably
to the portion thereof held by each Lender as determined by its Pro Rata Share.
As to any other unscheduled payment, and as to all payments made following the
Commitment Termination Date, each Borrower hereby irrevocably waives the right
to direct the application of any and all payments received from or on behalf of
such Borrower, and each Borrower hereby irrevocably agrees that Agent shall have
the continuing exclusive right to apply any and all such payments against the
Obligations of Borrowers as Agent may deem advisable notwithstanding any
previous entry by Agent in the Loan Account or any other books and records. In
the absence of a specific determination by Agent with respect thereto, payments
shall be applied to amounts then due and payable in the order set forth in
Section 1.3(c).
(b) Agent is authorized to, and at its sole election may, charge to
the Revolving Loan balance on behalf of each Borrower and cause to be paid all
Fees, expenses, Charges, costs (including insurance premiums in accordance with
Section 5.4(a)) and interest, owing by Borrowers under this Agreement or any of
the other Loan Documents if and to the extent Borrowers fail to pay promptly any
such amounts as and when due. At Agent's option and to the extent permitted by
law, any charges so made shall constitute part of the Revolving Loan hereunder.
1.10 Loan Account and Accounting. Agent, acting as agent for the
Lenders and, solely for purposes of Treasury Regulation Section 5f.103-1(c),
each Borrower, shall maintain a loan account (the "Loan Account") on its books
11
to record: all Advances, all Overadvances, all Letter of Credit Obligations, all
participations in the Letter of Credit Obligations, the amount of the
reimbursement obligations of the Borrower for each drawing made under a Letter
of Credit, all payments made by Borrowers, and all other debits and credits as
provided in this Agreement with respect to the Loans or any other Obligations,
and each Borrower and Agent shall treat each Person whose name is entered in the
Loan Account as a Lender or as an L/C Issuer, as the case may be, for all
purposes hereunder. All entries in the Loan Account shall be made in accordance
with Agent's customary accounting practices as in effect from time to time. The
balance in the Loan Account, as recorded on Agent's most recent printout or
other written statement, shall, absent manifest error, be presumptive evidence
of the amounts due and owing to Agent and Lenders by each Borrower; provided
that any failure to so record or any error in so recording shall not limit or
otherwise affect any Borrower's duty to pay the Obligations. Agent shall render
to Borrower Representative a monthly accounting of transactions with respect to
the Revolving Loan and Swing Line Loan setting forth the balance of the Loan
Account for the immediately preceding month. Unless Borrower Representative
notifies Agent in writing of any objection to any such accounting (specifically
describing the basis for such objection), within thirty (30) days after the date
thereof, each and every such accounting shall be presumptive evidence of all
matters reflected therein. Only those items expressly objected to in such notice
shall be deemed to be disputed by Borrowers. Notwithstanding any provision
herein contained to the contrary, any Lender may elect (which election may be
revoked) to dispense with the issuance of Notes to that Lender and may rely on
the Loan Account as evidence of the amount of Obligations from time to time
owing to it.
1.11 Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "Indemnified
Person"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "Indemnified Liabilities"); provided that (i) no such Credit
Party shall be liable for any indemnification to an Indemnified Person to the
extent that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's gross negligence or willful
misconduct and (ii) Indemnified Liabilities shall not include any taxes, levies,
imposts, deductions, charges or withholdings imposed by any Governmental
Authority, or any liabilities with respect thereto, that may be instituted or
asserted or incurred as the result of credit having been extended, suspended or
terminated, the indemnification for which shall be governed solely and
exclusively by Section 1.13. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR
LIABLE TO ANY OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD
PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS
12
DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN
EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or occurs
as a result of acceleration, by operation of law or otherwise); (ii) any
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any Borrower shall refuse to accept any
borrowing of, or shall request a termination of, any borrowing of, conversion
into or continuation of, LIBOR Loans after Borrower Representative has given
notice requesting the same in accordance herewith; or (iv) any Borrower shall
fail to make any prepayment of a LIBOR Loan after Borrower Representative has
given a notice thereof in accordance herewith, then Borrowers shall jointly and
severally indemnify and hold harmless each Lender from and against all losses,
costs and expenses resulting from or arising from any of the foregoing other
than any loss, costs or expenses with respect to taxes, levies, imposts,
deductions, charges or withholdings imposed by any Governmental Authority, or
any liabilities with respect thereto, the indemnification for which shall be
governed solely and exclusively by Section 1.13; provided, that notwithstanding
clause (i) of this Section 1.11(b), if at any time the mandatory prepayment of
any Loan would result, after giving effect to the procedures set forth in this
Agreement, in Borrowers incurring costs as a result of LIBOR Loans ("Affected
LIBOR Loans") being prepaid other than on the last day of a LIBOR Period
applicable thereto, which costs are required to be paid hereunder, then
Borrowers may, in their sole discretion, deposit amounts that otherwise would
have been paid in respect of the Affected LIBOR Loans with Agent (which amount
must be equal in amount to the amount of the Affected LIBOR Loans not
immediately prepaid) to be held as a security for the obligations of Borrowers
to make such mandatory prepayment pursuant to a cash collateral agreement to be
entered into in form and substance reasonably satisfactory to the Agent, with
such cash collateral to be directly applied upon the first occurrence or
occurrences thereafter of the last day of a LIBOR Period applicable to the
relevant Loan that is a LIBOR Loan (or such earlier date or dates as shall be
requested by Borrowers) to repay an aggregate principal amount of such Loan
equal to the Affected LIBOR Loans not initially repaid pursuant to this
sentence. Such indemnification shall include any loss (excluding loss of margin
but including lost opportunity costs) or expense arising from the reemployment
of funds obtained by it or from fees payable to terminate deposits from which
such funds were obtained other than any loss or expense with respect to taxes,
levies, imposts, deductions, charges or withholdings imposed by any Governmental
Authority, or any liabilities with respect thereto, the indemnification for
which shall be governed solely and exclusively by Section 1.13. For the purpose
of calculating amounts payable to a Lender under this subsection, each Lender
shall be deemed to have actually funded its relevant LIBOR Loan through the
purchase of a deposit bearing interest at the LIBOR Rate in an amount equal to
the amount of that LIBOR Loan and having a maturity comparable to the relevant
LIBOR Period; provided that each Lender may fund each of its LIBOR Loans in any
manner it sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection. This covenant shall
13
survive the termination of this Agreement and the payment of the Notes and all
other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower Representative with its
written calculation of all amounts payable pursuant to this Section 1.11(b), and
such calculation shall be binding on the parties hereto unless Borrower
Representative shall object in writing within ten (10) Business Days of receipt
thereof, specifying the basis for such objection in detail.
1.12 Access. Each Credit Party that is a party hereto shall, during
normal business hours, from time to time upon two (2) Business Days' prior
notice as frequently as Agent reasonably determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors, officers and employees of each Credit Party
and to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, and (c) permit Agent, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory and other Collateral of any Credit Party. If an Event of
Default has occurred and is continuing, each such Credit Party shall provide
such access to Agent and to each Lender at all times and without advance notice.
Furthermore, so long as any Event of Default has occurred and is continuing,
Borrowers shall provide Agent and each Lender with access to their suppliers and
customers. Each Credit Party shall make available to Agent and its counsel
reasonably promptly originals or copies of all books and records that Agent may
reasonably request. Each Credit Party shall deliver any document or instrument
necessary for Agent, as it may from time to time reasonably request, to obtain
records from any service bureau or other Person that maintains records for such
Credit Party, and shall maintain duplicate records or supporting documentation
on media, including computer tapes and discs owned by such Credit Party. Agent
will give Lenders at least five (5) days' prior written notice of regularly
scheduled audits. Representatives of other Lenders may accompany Agent's
representatives on regularly scheduled audits at no charge to Borrowers.
1.13 Taxes.
(a) Except as provided in this Section 1.13, any and all payments by
each Borrower hereunder (including any payments made pursuant to Section 12) or
under the Notes shall be made, in accordance with this Section 1.13, free and
clear of and without deduction for any and all present or future Taxes. If any
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable hereunder (including any sum payable pursuant to Section 12) or
under the Notes, (i) the sum payable shall be increased as much as shall be
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 1.13) Agent, Lenders or
L/C Issuers, as applicable, receive an amount equal to the sum they would have
received had no such deductions been made, (ii) such Borrower shall make such
deductions, and (iii) such Borrower shall pay the full amount deducted to the
relevant taxing or other authority in accordance with applicable law. Within
thirty (30) days after the date of any payment of Taxes, Borrower Representative
shall furnish to Agent the original or a certified copy of a receipt evidencing
payment thereof. In addition, each Borrower agrees to pay any Other Taxes.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within ten (10) days of written demand therefore, pay
Agent, each Lender and each L/C Issuer for the full amount of Taxes and Other
14
Taxes (including any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 1.13) paid by Agent or such Lender or such L/C
Issuer, as appropriate, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, provided such written
demand sets forth in reasonable detail the basis and calculation of such amount.
(c)
(i) Each Lender, each L/C Issuer and each Agent that is not a
United States person as defined in Section 7701(a)(30) of the IRC (each, a
"Foreign Lender") as to which payments to be made under this Agreement or under
the Notes are fully exempt from United States withholding tax under an
applicable statute or tax treaty shall provide prior to or on the Closing Date
to Borrower Representative and Agent a properly completed and executed IRS Form
W-8ECI or Form W-8BEN or other applicable form, certificate or document
prescribed by the IRS or the United States certifying as to such Foreign
Lender's entitlement to such exemption (a "Certificate of Exemption"). Any
Person that is not a United States person as defined in Section 7701(a)(30) of
the IRC that seeks to become a Lender, an L/C Issuer or an Agent, as applicable,
under this Agreement shall provide a Certificate of Exemption to Borrower
Representative and Agent prior to becoming a Lender, an L/C Issuer or an Agent,
as applicable, hereunder. No Person that is not a United States person as
defined in Section 7701(a)(30) of the IRC may become a Lender, an L/C Issuer or
an Agent, as applicable, hereunder if such Person fails to deliver a Certificate
of Exemption in advance of becoming a Lender, an L/C Issuer or an Agent, as
applicable. (ii) Each Lender, each L/C Issuer and each Agent that is a United
States person as defined in Section 7701(a)(30) of the IRC (each a "U.S.
Lender") shall provide prior to or on the Closing Date (or on or prior to the
date it becomes a party to this Agreement) to Borrower Representative and Agent
a properly completed and executed IRS Form W-9 (certifying that such U.S. Lender
is entitled to an exemption from United States backup withholding tax) or any
successor form. Solely for purposes of this Section 1.13, a U.S. Lender shall
not include a Lender, an L/C Issuer or an Agent that may be treated as an exempt
recipient based on the indicators described in Treasury Regulation Section
1.6049-4(c)(1)(ii).
(iii) Each Lender, each L/C Issuer and Agent, from time to time
after submitting the forms, certificates or documents referred to in this
Section 1.13, shall submit to the Borrower Representative and the Agent such
additional duly completed and signed copies of one or the other such forms,
certificates or documents (or such successor forms, certificates or other
documents as shall be adopted from time to time by the IRS or relevant taxing
authorities) (A) on or before the date that any such form, certificate, or
document expires or becomes obsolete, (B) after the occurrence of any event
requiring a change in the most recent form, certificate or document previously
delivered by it to the Borrower Representative and Agent, (C) from time to time
thereafter if reasonably requested by the Borrower Representative or Agent and
(D) as may be appropriate under then current United States law or regulations to
avoid United States withholding taxes on payments in respect of any amounts to
be received by such Lender, such L/C Issuer or such Agent pursuant to this
Agreement and/or the Notes.
15
(iv) If Agent, any Lender or any L/C Issuer determines that it
is unable to submit to the Borrower Representative or the Agent any form,
certificate or document that such Agent, such Lender, or such L/C Issuer, as the
case may be, is requested to submit pursuant to this Section 1.13, or that it is
required to withdraw or cancel any such form, certificate or document, or that
any such form, certificate or document previously submitted has otherwise become
ineffective or inaccurate, such Agent, such Lender or such L/C Issuer, as the
case may be, shall promptly notify the Borrower Representative and Agent of such
fact.
(v) No Credit Party shall be required pursuant to this Section
1.13 to pay any additional amount to, or to indemnify, any Lender, any L/C
Issuer or Agent, as the case may be, to the extent that (A) such Lender, such
L/C Issuer or Agent becomes subject to Taxes subsequent to the Closing Date (or,
if applicable, subsequent to the date such Person becomes a party to this
Agreement) as a result of any change in the circumstances of such Lender, such
L/C Issuer or Agent, as the case may be (other than a change in applicable law),
including without limitation a change in the residence, place of incorporation,
principal place of business or a change in the branch or lending office of such
Lender, such L/C Issuer or Agent, as the case may be, or as a result of the sale
by such Lender of participating interests in such Lender's creditor position(s)
hereunder; or (B) such Taxes would not have been incurred but for the failure of
such Lender, such L/C Issuer or Agent, as the case may be, to provide to the
Borrower Representative or Agent any form, certificate or document that it was
required so to do pursuant to Section 1.13 other than any form, certificate or
document required as a result of a change in law.
(d) Each Lender and each L/C Issuer agrees that, upon the occurrence
of any event giving rise to the operation of Section 1.13(a) or Section 1.13(b)
with respect to such Lender or L/C Issuer, as the case may be, it will, if
requested by a Credit Party, use reasonable commercial efforts (subject to such
Lender's or L/C Issuer's overall internal policies of general application) to
designate another lending office for any Loans or Letter of Credit Obligations
affected by such event with the object of avoiding the consequences of such
event; provided that such designation is made on terms that, in the reasonable
judgment of such Lender or such L/C Issuer, as the case may be, cause such
Lender and its lending office(s) or such L/C Issuer and its lending office(s),
as the case may be, to suffer no economic, legal or regulatory disadvantage, and
provided, further, that nothing in this Section shall affect or postpone any of
the obligations of any Credit Party or the rights of any Lender or any L/C
Issuer pursuant to Section 1.13(a) or Section 1.13(b).
(e) Notwithstanding any provision contained herein to the contrary,
any indemnity with respect to taxes, levies, imposts, deductions, charges or
withholdings imposed by any Governmental Authority, or any liabilities with
respect thereto, shall be governed solely and exclusively by this Section 1.13.
1.14 Capital Adequacy; Increased Costs; Illegality.
(a) If any law, treaty, governmental (or quasi-governmental) rule,
regulation, guideline or order regarding capital adequacy, reserve requirements
or similar requirements or compliance by any Lender with any request or
directive regarding capital adequacy, reserve requirements or similar
requirements (whether or not having the force of law), in each case, adopted
16
after the Closing Date, from any central bank or other Governmental Authority
increases or would have the effect of increasing the amount of capital, reserves
or other funds required to be maintained by such Lender and thereby reducing the
rate of return on such Lender's capital as a consequence of its obligations
hereunder, then Borrowers shall from time to time upon demand by such Lender
(with a copy of such demand to Agent) pay to Agent, for the account of such
Lender, additional amounts sufficient to compensate such Lender for such
reduction; provided, however, that Borrowers shall not have any obligation under
this Section 1.14(a) to pay any additional amount with respect to taxes, levies,
imposts, deductions, charges or withholdings imposed by any Governmental
Authority, or any liabilities with respect thereto, indemnification for which
shall be governed solely and exclusively by Section 1.13. A certificate as to
the amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower Representative and to Agent shall be
presumptive evidence of the matters set forth therein.
(b) If, due to either (i) the introduction of or any change in any
law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrowers shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost; provided,
however, that Borrowers shall not have any obligation under this Section 1.14(b)
to pay any additional amount with respect to taxes, levies, imposts, deductions,
charges or withholdings imposed by any Governmental Authority, or any
liabilities with respect thereto, indemnification for which shall be governed
solely and exclusively by Section 1.13. A certificate as to the amount of such
increased cost, submitted to Borrower Representative and to Agent by such
Lender, shall be presumptive evidence of the matters set forth therein. Each
Lender agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to above which would result in any such increased cost,
the affected Lender shall, to the extent not inconsistent with such Lender's
internal policies of general application, use reasonable commercial efforts to
minimize costs and expenses incurred by it and payable to it by Borrowers
pursuant to this Section 1.14(b).
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
reasonable opinion, materially adversely affecting it or its Loans or the income
obtained therefrom, on notice thereof and demand therefor by such Lender to
Borrower Representative through Agent, (i) the obligation of such Lender to
agree to make or to make or to continue to fund or maintain LIBOR Loans shall
terminate and (ii) each Borrower shall forthwith prepay in full all outstanding
LIBOR Loans owing by such Borrower to such Lender, together with interest
accrued thereon, unless Borrower Representative on behalf of such Borrower,
within five (5) Business Days after the delivery of such notice and demand,
converts all LIBOR Loans into Index Rate Loans.
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(d) Within thirty (30) days after receipt by Borrower Representative
of written notice and demand from any Lender (an "Affected Lender") for payment
of additional amounts or increased costs as provided in Sections 1.13, 1.14(a)
or 1.14(b), Borrower Representative may, at its option, notify Agent and such
Affected Lender of its intention to replace the Affected Lender. So long as no
Event of Default has occurred and is continuing, Borrower Representative, with
the consent of Agent, may obtain, at Borrowers' expense, a replacement Lender
("Replacement Lender") for the Affected Lender, which Replacement Lender must be
reasonably satisfactory to Agent. If Borrowers obtain a Replacement Lender
within ninety (90) days following notice of their intention to do so, the
Affected Lender must sell and assign its Loans and Commitments to such
Replacement Lender for an amount equal to the principal balance of all Loans
held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale and such assignment shall not require the
payment of an assignment fee to Agent; provided that Borrowers shall have
reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such
sale and assignment. Notwithstanding the foregoing, Borrowers shall not have the
right to obtain a Replacement Lender if the Affected Lender rescinds its demand
for increased costs or additional amounts within 15 days following its receipt
of Borrowers' notice of intention to replace such Affected Lender. Furthermore,
if Borrowers give a notice of intention to replace and do not so replace such
Affected Lender within ninety (90) days thereafter, Borrowers' rights under this
Section 1.14(d) shall terminate with respect to such Affected Lender and
Borrowers shall promptly pay all increased costs or additional amounts demanded
by such Affected Lender pursuant to Sections 1.13, 1.14(a) and 1.14(b), as
applicable.
1.15 Single Loan. All Loans to Borrowers and all of the other
Obligations of Borrowers arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrowers secured, until
the Termination Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Revolving Credit Advance. No Lender
shall be obligated to make any Loan or incur any Letter of Credit Obligations on
the Closing Date, or to take, fulfill, or perform any other action hereunder,
until the following conditions have been satisfied or provided for in a manner
reasonably satisfactory to Agent, or waived in writing by Agent:
(a) Credit Agreement; Loan Documents. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrowers, each other
Credit Party, Agent and Lenders; and Agent shall have received such documents,
instruments, agreements and legal opinions as Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including all those listed in the Closing Checklist attached
hereto as Annex D, each in form and substance reasonably satisfactory to Agent.
(b) Repayment of DIP Facility Indebtedness; Satisfaction of
Outstanding L/Cs. (i) Agent shall have received a fully executed original of a
pay-off letter reasonably satisfactory to Agent confirming that all of the DIP
Facility Indebtedness will be repaid in full from the proceeds of the initial
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Revolving Credit Advance and all Liens upon any of the property of Borrowers or
any of their Subsidiaries in favor of DIP Facility lenders shall be terminated
immediately upon such payment; and (ii) all letters of credit issued or
guaranteed under the DIP Facility shall have been cash collateralized, or
supported by a Letter of Credit issued pursuant to Annex B, as mutually agreed
upon by Agent, Borrowers and the issuers of those DIP Facility letters of
credit.
(c) Plan of Reorganization. No amendments to the Plan of
Reorganization shall have been filed.
(d) Confirmation Order. The Confirmation Order shall be final,
non-appealable and in full force and effect and shall not have been stayed. The
time to appeal the Confirmation Order or to seek review, rehearing or certiorari
with respect to the Confirmation Order shall have expired and no appeal or
petition for review, rehearing or certiorari with respect thereto shall be
pending.
(e) Opening EBITDA and Opening Availability. Holdings and its
Subsidiaries shall have (i) consolidated EBITDA for the trailing twelve months
ending on the last day of the last full month prior to the Closing Date of not
less than $50,000,000 and (ii) Borrowing Availability as of the close of
business on the Closing Date, after giving effect to the initial Revolving
Credit Advance made to each Borrower and the incurrence of any initial Letter of
Credit Obligations, of at least $14 million, provided that such required
Borrowing Availability shall be increased by an amount equal to any
post-petition trade payables that are more than fifteen (15) days past due, any
other expenses or liabilities that have not been paid in the ordinary course of
business, and any accelerated accounts receivable collections outside of the
ordinary course of business.
(f) Payment of Fees. Borrowers shall have paid the Fees required to
be paid on the Closing Date in the respective amounts specified in Section 1.7
(including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all fees, costs and expenses of closing presented as of the
Closing Date.
(g) Capital Structure: Other Indebtedness. The capital structure of
each Credit Party and the corporate structure and ownership of the Credit
Parties and the terms and conditions of all Indebtedness of each Credit Party
shall be acceptable to Agent in its sole discretion. Without limiting the
generality of the foregoing, (i) Xxxxxx shall have transferred to Holdings all
of the outstanding Stock of Thermadyne Cylinder Co., a California corporation
and (ii) holders of the Senior Notes shall own at least 85% of the outstanding
Stock of Holdings.
(h) Related Transactions. Each of the conditions to effectiveness of
the Plan of Reorganization set forth in the Article XI of the Plan of
Reorganization shall have been met or satisfied, including, (i) payment in full
or discharge of all amounts outstanding under the DIP Facility, concurrently
with the initial Revolving Credit Advance, (ii) issuance of the New Common Stock
(as defined in the Plan of Reorganization) to the holders of the Senior Notes,
and (iii) issuance of the Senior Notes.
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(i) Senior Notes and Capital Leases. The principal amount outstanding
of (i) the Senior Notes shall not exceed $203,000,000, and (ii) Capital Leases
shall not exceed $24,000,000 as of the Closing Date.
2.2 Further Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Advance, convert or
continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation, if,
as of the date thereof:
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect in any material
respect as of such date as determined by Agent or Requisite Lenders, except to
the extent that such representation or warranty expressly relates to an earlier
date and except for changes therein expressly permitted or expressly
contemplated by this Agreement and Agent or Requisite Lenders have determined
not to make such Advance, convert or continue any Loan as LIBOR Loan or incur
such Letter of Credit Obligation as a result of the fact that such warranty or
representation is untrue or incorrect in any material respect;
(b) any Event of Default has occurred and is continuing or would
result after giving effect to any Advance (or the incurrence of any Letter of
Credit Obligation), and Agent or Requisite Lenders shall have determined not to
make any Advance, convert or continue any Loan as a LIBOR Loan or incur any
Letter of Credit Obligation as a result of that Event of Default; or
(c) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), the outstanding principal amount of the aggregate
Revolving Loan would exceed the lesser of the Borrowing Base and the Maximum
Amount, in each case, less the then outstanding principal amount of the Swing
Line Loan.
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrowers of
the cross-guaranty provisions set forth in Section 12 and of the granting and
continuance of Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Revolving Loan and to incur Letter of
Credit Obligations, the Credit Parties executing this Agreement, jointly and
severally, make the following representations and warranties to Agent and each
Lender with respect to all Credit Parties, each and all of which shall survive
the execution and delivery of this Agreement.
3.1 Corporate Existence; Compliance with Law; FEIN. Each Credit Party
(a) is a corporation, limited liability company or limited partnership duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization and each Credit Party's
name as it appears in official filings in its state of incorporation or
20
organization, organization type, organization number, if any, issued by its
state incorporation or organization, and federal employer identification number
are set forth in Disclosure Schedule (3.1); (b) is duly qualified to conduct
business and is in good standing in each other jurisdiction where its ownership
or lease of property or the conduct of its business requires such qualification,
except where the failure to be so qualified could not reasonably be expected to
have a Material Adverse Effect; (c) has the requisite power and authority and
the legal right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease and to conduct its
business as now conducted or proposed to be conducted; (d) subject to specific
representations regarding Environmental Laws, has all licenses, permits,
consents or approvals from or by, and has made all material filings with, and
has given all notices to, all Governmental Authorities having jurisdiction, to
the extent required for such ownership, operation and conduct, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect; (e) is in compliance with its charter and bylaws or partnership or
operating agreement, as applicable; and (f) subject to specific representations
set forth herein regarding ERISA, Environmental Laws, tax and other laws, is in
compliance with all applicable provisions of law, except where the failure to
comply, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.
3.2 Executive Offices, Collateral Locations. As of the Closing Date,
the current location of each Credit Party's chief executive office and the
warehouses and premises at which any Collateral with a fair market value in
excess of $5,000 is located are set forth in Disclosure Schedule (3.2), none of
such locations has changed within the one (1) month preceding the Closing Date
and each Credit Party has only one state of incorporation or organization.
3.3 Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Person's power; (b) have been duly authorized by order of the
Bankruptcy Court or all necessary corporate, limited liability company or
limited partnership action, as applicable; (c) do not contravene any provision
of such Person's charter, bylaws or partnership or operating agreement, as
applicable; (d) do not violate any law or regulation, or any order or decree of
any court or Governmental Authority; (e) do not conflict with or result in the
breach or termination of, constitute a default under or accelerate or permit the
acceleration of any performance required by, any indenture, mortgage, deed of
trust, lease, agreement or other instrument to which such Person is a party or
by which such Person or any of its property is bound; (f) do not result in the
creation or imposition of any Lien upon any of the property of such Person,
other than those in favor of Agent, on behalf of itself and Lenders, pursuant to
the Loan Documents; and (g) do not require the consent or approval of any
Governmental Authority or any other Person. Each of the Loan Documents shall be
duly executed and delivered by each Credit Party that is a party thereto and
each such Loan Document shall constitute a legal, valid and binding obligation
of such Credit Party enforceable against it in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
21
3.4 Financial Statements and Projections. Except for the Projections,
all Financial Statements concerning Holdings and its Subsidiaries that are
referred to below have been prepared in accordance with GAAP consistently
applied throughout the periods covered (except as disclosed therein and except,
with respect to unaudited Financial Statements, for the absence of footnotes and
normal year-end audit adjustments) and present fairly in all material respects
the financial position of the Persons covered thereby as at the dates thereof
and the results of their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial Statements attached
hereto as Disclosure Schedule (3.4(a)) have been delivered on or prior to the
date hereof:
(i) The audited consolidated and unaudited consolidating balance
sheets at December 31, 2002 and the related consolidated and consolidating
statement of income and consolidated statement of cash flows of Holdings and its
Subsidiaries for the Fiscal Year then ended.
(ii) The unaudited balance sheet(s) at April 30, 2003 and the
related statement(s) of income and cash flows of Holdings and its Subsidiaries
for the four months then ended.
(b) Pro Forma. The Pro Forma delivered on or prior to the date hereof
and attached hereto as Disclosure Schedule (3.4(b)) was prepared by Holdings
giving pro forma effect to the Related Transactions, was based on the unaudited
consolidated and consolidating balance sheets of Holdings and its Subsidiaries
dated as of April 30, 2003 and was prepared in accordance with GAAP, with only
such adjustments thereto as would be required in accordance with GAAP.
(c) Projections. The Projections delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(c)) have been prepared by Holdings
in light of the past operations of its business, and reflect projections for the
three year period beginning on January 1, 2003 on a month-by-month basis through
December 31, 2003 (on a consolidated and consolidating basis), quarterly for
2004 (on a consolidated basis only) and on a year-by-year basis thereafter (on a
consolidated basis only). The Projections are based upon the same accounting
principles as those used in the preparation of the financial statements
described above and the estimates and assumptions stated therein, all of which
Borrowers believe to be reasonable and fair in light of current conditions and
current facts known to Borrowers and, as of the Closing Date, reflect Borrowers'
good faith and reasonable estimates of the future financial performance of
Borrowers for the period set forth therein. The Projections are not a guaranty
of future performance, and actual results may differ from the Projections.
3.5 Material Adverse Effect. Between December 31, 2002 and the
Closing Date: (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Pro Forma and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no material contract, lease or other agreement or instrument
has been entered into by any Credit Party or has become binding upon any Credit
Party's assets and to Borrowers' knowledge no law or regulation applicable to
22
any Credit Party has been adopted that has had or could reasonably be expected
to have a Material Adverse Effect, and (c) no Credit Party is in default and to
the best of Borrowers' knowledge no third party is in default under any material
contract, lease or other agreement or instrument, that alone or in the aggregate
could reasonably be expected to have a Material Adverse Effect. Since December
31, 2002 no event has occurred, that alone or together with other events, could
reasonably be expected to have a Material Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the real
estate ("Real Estate") listed in Disclosure Schedule (3.6) constitutes all of
the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Disclosure Schedule (3.6), and, if requested by
Agent, copies of all such leases or a summary of terms thereof reasonably
satisfactory to Agent have been delivered to Agent. Disclosure Schedule (3.6)
further describes any Real Estate with respect to which any Credit Party is a
lessor, sublessor or assignor as of the Closing Date. Each Credit Party also has
good and marketable title to, or valid leasehold interests in, all of its
personal property and assets. As of the Closing Date, none of the properties and
assets of any Credit Party are subject to any Liens other than Permitted
Encumbrances and Liens in existence on the date hereof and summarized on
Disclosure Schedule (6.7), and there are no facts, circumstances or conditions
known to any Credit Party that may result in any Liens (including Liens arising
under Environmental Laws) other than Permitted Encumbrances. Each Credit Party
has received all deeds, assignments, waivers, consents, nondisturbance and
attornment or similar agreements, bills of sale and other documents, and has
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect such Credit Party's right, title and interest in and to all
such Real Estate and other properties and assets. Disclosure Schedule (3.6) also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate. As of the Closing Date, no
portion of any Credit Party's Real Estate has suffered any material damage by
fire or other casualty loss that has not heretofore been repaired and restored
in all material respects to its original condition or otherwise remedied. As of
the Closing Date, all material permits required to have been issued or
appropriate to enable the Real Estate to be lawfully occupied and used for all
of the purposes for which it is currently occupied and used have been lawfully
issued and are in full force and effect.
3.7 Labor Matters. Except as set forth on Disclosure Schedule (3.7),
as of the Closing Date (a) no strikes or other material labor disputes against
any Credit Party are pending or, to any Credit Party's knowledge, threatened;
(b) hours worked by and payment made to employees of each Credit Party
materially comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters; (c) all payments due
from any Credit Party for employee health and welfare insurance have been paid
or accrued as a liability on the books of such Credit Party; (d) no Credit Party
is a party to or bound by any collective bargaining agreement, management
agreement, consulting agreement, employment agreement, bonus, restricted stock,
stock option, or stock appreciation plan or agreement or any similar plan,
agreement or arrangement (and, if requested by Agent, true and complete copies
of any agreements described on Disclosure Schedule (3.7) have been delivered to
Agent); (e) there is no organizing activity involving any Credit Party pending
or, to any Credit Party's knowledge, threatened by any labor union or group of
employees; (f) there are no representation proceedings pending or, to any Credit
23
Party's knowledge, threatened with the National Labor Relations Board, and no
labor organization or group of employees of any Credit Party has made a pending
demand for recognition; and (g) there are no material complaints or charges
against any Credit Party pending or, to the knowledge of any Credit Party,
threatened to be filed with any Governmental Authority or arbitrator based on,
arising out of, in connection with, or otherwise relating to the employment or
termination of employment by any Credit Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party (other than
Holdings) is owned by each of the Stockholders and in the amounts set forth in
Disclosure Schedule (3.8). Except as set forth in Disclosure Schedule (3.8),
there are no outstanding rights to purchase, options, warrants or similar rights
or agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for
the Obligations) is described in Section 6.3 (including Disclosure Schedule
(6.3)).
3.9 Government Regulation. No Credit Party is an "investment company"
or an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940. No Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, or any other federal or state
statute that restricts or limits its ability to incur Indebtedness or to perform
its obligations hereunder. The making of the Loans by Lenders to Borrowers, the
incurrence of the Letter of Credit Obligations on behalf of Borrowers, the
application of the proceeds thereof and repayment thereof and the consummation
of the Related Transactions will not violate any provision of any such statute
or any rule, regulation or order issued by the Securities and Exchange
Commission.
3.10 Margin Regulations. No Credit Party is engaged, nor will it
engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" as such terms are defined in Regulation U of the Federal Reserve Board as
now and from time to time hereafter in effect (such securities being referred to
herein as "Margin Stock"). No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11 Taxes. All federal and other material tax returns, reports and
statements, including information returns, required by any Governmental
Authority to be filed by any Credit Party have been filed with the appropriate
Governmental Authority, and all Charges have been paid prior to the date on
which any fine, penalty, interest or late charge may be added thereto for
24
nonpayment thereof (excluding (i) Charges or other amounts being contested in
accordance with Section 5.2(b) and (ii) any Charges discharged in the Chapter 11
Cases or payable over time in accordance with the Plan of Reorganization),
unless the failure to so file or pay would not reasonably be expected to result
in fines, penalties or interest in excess of $100,000 in the aggregate. Proper
and accurate amounts have been withheld by each Credit Party from its respective
employees for all periods in compliance in all material respects with all
applicable federal, state, local and foreign laws and such withholdings have
been timely paid to the respective Governmental Authorities (except to the
extent discharged in the Chapter 11 Cases or payable over time in accordance
with the Plan of Reorganization). Disclosure Schedule (3.11) sets forth as of
the Closing Date those taxable years for which any Credit Party's tax returns
are currently being audited by the IRS or any other applicable Governmental
Authority, and any assessments or threatened assessments in connection with such
audit, or otherwise currently outstanding. Except as described in Disclosure
Schedule (3.11), as of the Closing Date, no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges for any open periods. Except as set forth on
Disclosure Schedule (3.11), none of the Credit Parties and their respective
predecessors are liable for any Charges: (a) under any agreement (including any
tax sharing agreements) or (b) to each Credit Party's knowledge, as a
transferee. As of the Closing Date, no Credit Party has agreed or been requested
to make any adjustment under IRC Section 481(a), by reason of a change in
accounting method or otherwise, which would reasonably be expected to have a
Material Adverse Effect.
3.12 ERISA.
(a) Disclosure Schedule (3.12) lists, as of the Closing Date, (i) all
ERISA Affiliates and (ii) all Plans, including Title IV Plans, Multiemployer
Plans, and all Retiree Welfare Plans. Copies of all such listed Plans, if
requested by Agent, together with a copy of the latest form IRS/DOL 5500-series,
as applicable, for each such Plan, have been delivered to Agent. Except with
respect to Multiemployer Plans, each Qualified Plan has been determined by the
IRS to qualify under Section 401 of the IRC, the trusts created thereunder have
been determined to be exempt from tax under the provisions of Section 501 of the
IRC, and nothing has occurred that would cause the loss of such qualification or
tax-exempt status. Each Plan is in compliance in all respects with the
applicable provisions of ERISA, the IRC and its terms, including the timely
filing of all reports required under the IRC or ERISA, except for non-compliance
which would not have a Material Adverse Effect. Neither any Credit Party nor
ERISA Affiliate has failed to make any material contribution or pay any material
amount due as required by either Section 412 of the IRC or Section 302 of ERISA
or the terms of any such Plan, except for non-compliance which would not have a
Material Adverse Effect. No "prohibited transaction," as defined in Section 406
of ERISA and Section 4975 of the IRC, has occurred with respect to any Plan,
that would subject any Credit Party to a tax on prohibited transactions imposed
by Section 502(i) of ERISA or Section 4975 of the IRC, which would have a
Material Adverse Effect.
(b) Except as set forth in Disclosure Schedule (3.12) or in the
Company's Financial Statements provided to the Lenders from time to time or as
would not have a Material Adverse Effect: (i) no Title IV Plan has any material
Unfunded Pension Liability; (ii) no ERISA Event has occurred or is reasonably
25
expected to occur; (iii) there are no pending, or to the knowledge of any Credit
Party, threatened material claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Credit Party or ERISA Affiliate as fiduciary or sponsor of any Plan; (iv)
no Credit Party or ERISA Affiliate has incurred or reasonably expects to incur
any material liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan of any
Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041 of ERISA, nor has
any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at any
time within the last five years) with material Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time); and (iv) no Credit Party or ERISA Affiliate has any material liability
with respect to post-retirement benefit obligations within the meaning of the
FASB 106.
3.13 No Litigation. No action, claim, lawsuit, demand, investigation
or proceeding is now pending or, to the knowledge of any Credit Party,
threatened against any Credit Party, before any Governmental Authority or before
any arbitrator or panel of arbitrators (collectively, "Litigation"), (a) that
challenges any Credit Party's right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) that
has a reasonable risk of being determined adversely to any Credit Party and
that, if so determined, could reasonably be expected to have a Material Adverse
Effect. Except as set forth on Disclosure Schedule (3.13), as of the Closing
Date there is no Litigation pending or, to any Credit Party's knowledge,
threatened, that seeks damages in excess of $250,000 or injunctive relief
against, or alleges criminal misconduct of, any Credit Party.
3.14 Brokers. Except as set forth on Disclosure Schedule (3.14), no
broker or finder brought about the obtaining, making or closing of the Loans or
the Related Transactions, and no Credit Party or Affiliate thereof has any
obligation to any Person in respect of any finder's or brokerage fees in
connection therewith.
3.15 Intellectual Property. As of the Closing Date, each Credit Party
owns or has rights to use all Intellectual Property necessary to continue to
conduct its business as now conducted by it or presently proposed to be
conducted by it. Each Patent, Trademark, and registered Copyright existing as of
the Closing Date and each material License in effect as of the Closing Date is
listed, together with application or registration numbers, as applicable, in
Disclosure Schedule (3.15). To its knowledge, each Credit Party conducts its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect. Except as set
forth in Disclosure Schedule (3.15), no Credit Party is aware of any material
infringement claim by any other Person with respect to any Intellectual
Property.
3.16 Full Disclosure. No information contained in this Agreement, any
of the other Loan Documents, Financial Statements or Collateral Reports or other
written reports from time to time prepared by any Credit Party and delivered
hereunder or any written statement prepared by any Credit Party and furnished by
or on behalf of any Credit Party to Agent or any Lender pursuant to the terms of
this Agreement contains or will contain any untrue statement of a material fact
26
or omits or will omit to state a material fact necessary to make the statements
contained herein or therein, taken as a whole, not misleading in light of the
circumstances under which they were made.
3.17 Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of the
Closing Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that would not adversely impact the value
or marketability of such Real Estate and that would not result in Environmental
Liabilities that could reasonably be expected to exceed $100,000; (ii) no Credit
Party has caused or suffered to occur any material Release of Hazardous
Materials on, at, in, under, above, to, from or about any of its Real Estate;
(iii) the Credit Parties are and have been in compliance with all Environmental
Laws, except for such noncompliance that would not result in Environmental
Liabilities which could reasonably be expected to exceed $100,000; (iv) the
Credit Parties have obtained, and are in compliance with, all Environmental
Permits required by Environmental Laws for the operations of their respective
businesses as presently conducted or as proposed to be conducted, except where
the failure to so obtain or comply with such Environmental Permits would not
result in Environmental Liabilities that could reasonably be expected to exceed
$100,000, and all such Environmental Permits are valid, uncontested and in good
standing; (v) no Credit Party is involved in operations or knows of any facts,
circumstances or conditions, including any Releases of Hazardous Materials, that
are likely to result in any Environmental Liabilities of such Credit Party which
could reasonably be expected to exceed $100,000; (vi) there is no Litigation
arising under or related to any Environmental Laws, Environmental Permits or
Hazardous Material that seeks damages, penalties, fines, costs or expenses in
excess of $100,000 or injunctive relief against, or that alleges criminal
misconduct by, any Credit Party; (vii) no notice has been received by any Credit
Party identifying it as a "potentially responsible party" or requesting
information under CERCLA or analogous state statutes, and to the knowledge of
the Credit Parties, there are no facts, circumstances or conditions that may
result in any Credit Party being identified as a "potentially responsible party"
under CERCLA or analogous state statutes; and (viii) the Credit Parties have
made available to Agent copies of all existing material environmental reports,
reviews and audits and all written information pertaining to actual or
potentially material Environmental Liabilities, in each case relating to any
Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent (i)
is not now, and has not ever been, in control of any of the Real Estate or any
Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18 Insurance. Disclosure Schedule (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule (3.19)
lists all banks and other financial institutions at which any Credit Party
maintains deposit or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address
27
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
therefor.
3.20 Government Contracts. Except as set forth in Disclosure Schedule
(3.20), as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party's Accounts are
subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any
similar state or local law.
3.21 Customer and Trade Relations. As of the Closing Date, there
exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of, or any material adverse modification or change
in: the business relationship of any Credit Party with any customer or group of
customers whose purchases during the preceding 12 months caused them to be
ranked among the ten largest customers of such Credit Party; or the business
relationship of any Credit Party with any supplier essential to its operations.
3.22 Bonding; Licenses. Except as set forth on Disclosure Schedule
3.22, as of the Closing Date, no Credit Party is a party to or bound by any
surety bond agreement or binding requirement with respect to products or
services sold by it or any trademark or patent license agreement with respect to
products sold by it.
3.23 Solvency. Following consummation of the Plan of Reorganization,
and giving effect to (a) the Loans and Letter of Credit Obligations to be made
or incurred on the Closing Date or such other date as Loans and Letter of Credit
Obligations requested hereunder are made or incurred, (b) the disbursement of
the proceeds of such Loans pursuant to the instructions of Borrower
Representative; (c) the Refinancing and the consummation of the other Related
Transactions; and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Credit Party is and will be Solvent.
3.24 Status of Holdings. Prior to the Closing Date, Holdings has not
engaged in any trade or business.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees that
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the Financial Statements,
notices, Projections and other information at the times, to the Persons and in
the manner set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby agrees that,
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the Borrowing Base Certificates
in the form of Exhibit 4.1(b).
4.2 Communication with Accountants. Each Credit Party executing this
Agreement authorizes (a) Agent and (b) so long as an Event of Default has
28
occurred and is continuing, each Lender, to communicate directly with its
independent certified public accountants, including Ernst & Young, LLP, and
authorizes those accountants and advisors to communicate to Agent and each
Lender information relating to any Credit Party with respect to the business,
results of operations and financial condition of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each Credit
Party shall: do or cause to be done all things necessary to preserve and keep in
full force and effect its corporate existence in its jurisdiction of formation
or organization, as applicable, and its material rights and franchises; continue
to conduct its business substantially as now conducted or as otherwise permitted
hereunder; at all times take all reasonable action to maintain, preserve and
protect all of its assets and properties used or useful in the conduct of its
business, and keep the same in good repair, working order and condition in all
material respects (taking into consideration ordinary wear and tear) and from
time to time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
transact business only in such corporate and trade names as are set forth in
Disclosure Schedule (5.1).
5.2 Payment of Charges.
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax, social
security and unemployment withholding with respect to its employees, (ii) lawful
claims for labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen or bailees, in each case,
before any thereof shall become past due, except in the case of clauses (ii) and
(iii) where the failure to pay or discharge such Charges would not result in
aggregate liabilities in excess of $200,000.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
Section 5.2(a); provided that (i) adequate reserves with respect to such contest
are maintained on the books of such Credit Party, in accordance with GAAP; (ii)
no Lien shall be imposed to secure payment of such Charges in excess of
$1,000,000 (other than payments to warehousemen and/or bailees) that is superior
to any of the Liens securing the Obligations and such contest is maintained and
prosecuted continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; and (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met.
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5.3 Books and Records. Each Credit Party shall keep adequate books
and records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as Disclosure Schedule
(3.4(a)).
5.4 Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on Disclosure Schedule (3.18) as in
effect on the date hereof or otherwise in form and amounts and with insurers
reasonably acceptable to Agent. Such policies of insurance (or the loss payable
and additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide thirty (30) days prior written
notice to Agent in the event of any non-renewal, cancellation or amendment of
any such insurance policy. If any Credit Party at any time or times hereafter
shall fail to obtain or maintain any of the policies of insurance required
above, or to pay all premiums relating thereto, Agent may at any time or times
thereafter obtain and maintain such policies of insurance and pay such premiums
and take any other action with respect thereto that Agent deems advisable. Agent
shall have no obligation to obtain insurance for any Credit Party or pay any
premiums therefor. By doing so, Agent shall not be deemed to have waived any
Event of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed, including
reasonable attorneys' fees, court costs and other charges related thereto, shall
be payable on demand by Borrowers to Agent and shall be additional Obligations
hereunder secured by the Collateral.
(b) Each Credit Party shall deliver to Agent, in form and substance
reasonably satisfactory to Agent, endorsements to (i) all "All Risk" and
business interruption insurance naming Agent, on behalf of itself and Lenders,
as loss payee, and (ii) all general liability and other liability policies
naming Agent, on behalf of itself and Lenders, as additional insured. Each
Credit Party irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Event of
Default has occurred and is continuing or the anticipated insurance proceeds
exceed $1,000,000, as such Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower Representative shall promptly notify Agent of any
loss, damage, or destruction to the Collateral in the amount of $1,000,000 or
more, whether or not covered by insurance. After deducting from such proceeds
(i) the expenses incurred by Agent in the collection or handling thereof, and
(ii) amounts required to be paid to creditors (other than Lenders) having
Permitted Encumbrances, Agent may, at its option, apply such proceeds to the
reduction of the Obligations in accordance with Section 1.3(c); or permit or
require the applicable Credit Party to use such money, or any part thereof, to
replace, repair, restore or rebuild the Collateral in a diligent and expeditious
manner with materials and workmanship of substantially the same quality as
existed before the loss, damage or destruction. Notwithstanding the foregoing,
if the casualty giving rise to such insurance proceeds could not reasonably be
expected to have a Material Adverse Effect and such insurance proceeds do not
30
exceed $1,000,000 in the aggregate, Agent shall permit the applicable Credit
Party to replace, restore, repair or rebuild the property; provided that if such
Credit Party shall not have completed or entered into binding agreements, within
180 days of such casualty, or in the case of real property, 12 months of such
casualty, to complete such replacement, restoration, repair or rebuilding. Agent
may apply such insurance proceeds to the Obligations in accordance with Section
1.3(c). All insurance proceeds that are to be made available to any Credit Party
to replace, repair, restore or rebuild the Collateral shall be applied by Agent
to reduce the outstanding principal balance of the Revolving Loan (which
application shall not result in a permanent reduction of the Revolving Loan
Commitment) and upon such application, Agent shall establish a Reserve against
the Borrowing Base in an amount equal to the amount of such proceeds so applied.
Thereafter, such funds shall be made available to that Credit Party to provide
funds to replace, repair, restore or rebuild the Collateral as follows: (i)
Borrower Representative shall request a Revolving Credit Advance be made to such
Credit Party in the amount requested to be released; (ii) so long as the
conditions set forth in Section 2.2 have been met, Revolving Lenders shall make
such Revolving Credit Advance; and (iii) the Reserve established with respect to
such insurance proceeds shall be reduced by the amount of such Revolving Credit
Advance. To the extent not used to replace, repair, restore or rebuild the
Collateral, such insurance proceeds shall be applied in accordance with Section
1.3(c).
5.5 Compliance with Laws. Each Credit Party shall comply with all
federal, state, local and foreign laws and regulations applicable to it,
including those relating to ERISA, labor laws, and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.6 Supplemental Disclosure. From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of an Event of Default) or at
Credit Parties' election, the Credit Parties shall supplement each Disclosure
Schedule hereto, or any representation herein or in any other Loan Document,
with respect to any matter hereafter arising that, if existing or occurring at
the date of this Agreement, would have been required to be set forth or
described in such Disclosure Schedule or as an exception to such representation
or that is necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall amend,
supplement or otherwise modify any Disclosure Schedule or representation, or be
or be deemed a waiver of any Event of Default resulting from the matters
disclosed therein, except as consented to by Agent and Requisite Lenders in
writing, and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect and shall
comply in all material respects with the terms of its Licenses.
5.8 Environmental Matters. Each Credit Party shall and shall cause
each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
31
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are necessary to
comply with Environmental Laws and Environmental Permits pertaining to the
presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate in all material respects; (c) notify Agent promptly after
such Credit Party becomes aware of any violation of Environmental Laws or
Environmental Permits or any Release on, at, in, under, above, to, from or about
any Real Estate that is reasonably likely to result in Environmental Liabilities
in excess of $250,000; and (d) promptly forward to Agent a copy of any order,
notice, request for information or any communication or report received by such
Credit Party in connection with any such violation or Release or any other
matter relating to any Environmental Laws or Environmental Permits that could
reasonably be expected to result in Environmental Liabilities in excess of
$250,000, in each case whether or not the Environmental Protection Agency or any
Governmental Authority has taken or threatened any action in connection with any
such violation, Release or other matter. If Agent at any time has a reasonable
basis to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, that, in each case, could reasonably be
expected to have a Material Adverse Effect, then each Credit Party shall, upon
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrowers' expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrowers shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and
Real Estate Purchases. Each Credit Party shall use commercially reasonable
efforts to obtain a landlord's agreement, mortgagee agreement or bailee letter,
as applicable, from the lessor of each leased property, mortgagee of owned
property or bailee with respect to any warehouse or manufacturing, processor or
converter facility where Collateral is stored or located that has an aggregate
fair market value or purchase price (whichever is higher, as determined by
Agent) in excess of $75,000 at any time from and after the date of this
Agreement, which agreement or letter shall contain a waiver or subordination of
all Liens or claims that the landlord, mortgagee or bailee may assert against
the Collateral at that location, and shall otherwise be reasonably satisfactory
in form and substance to Agent. With respect to such locations or warehouse
space leased or owned as of the Closing Date and thereafter, if Agent has not
received a landlord or mortgagee agreement or bailee letter as of the Closing
Date (or, if later, as of the date such location is acquired or leased), Agent
may impose such Reserves against Borrowing Availability in its reasonable credit
judgment. After the Closing Date, no new real property or new warehouse space
shall be leased by any Credit Party and no Inventory shall be shipped to a
processor or converter under arrangements established after the Closing Date if
the Collateral to be stored or located at such location (i) has an aggregate
32
fair market value or purchase price (whichever is higher, as determined by
Agent) in excess of $75,000 or (ii) has an aggregate fair market value or
purchase price (whichever is higher, as determined by Agent) when aggregated
with Collateral which has been stored at new real property or new warehouse
spaces leased after the Closing Date or shipped to a processor or converter
under arrangements established after the Closing Date in excess of $500,000,
without the prior written consent of Agent (which consent, in Agent's reasonable
discretion, may be conditioned upon the establishment of Reserves acceptable to
Agent) or, unless and until a reasonably satisfactory landlord agreement or
bailee letter, as appropriate, shall first have been obtained with respect to
such location. Each Credit Party shall timely and fully pay and perform its
obligations in all material respects under all leases and other agreements with
respect to each leased location or public warehouse where any Collateral is or
may be located. In addition to the foregoing, each of Tweco and Xxxxxx may
store, keep or otherwise maintain (i) Inventory in an amount not to exceed
$8,000,000 in the aggregate, and (ii) other Collateral in an amount not to
exceed $6,000,000 in the aggregate, at any warehouse or facility operated in
Mexico by either Xxxxxx Equipment de Mexico S.A. de C.V. ("Xxxxxx Mexico") or
Tweco de Mexico, S.A. de C.V. ("Tweco Mexico") so long as each of Xxxxxx Mexico
and Tweco Mexico, as applicable, is a wholly owned direct Subsidiary of any
Borrower. To the extent otherwise permitted hereunder, if any Credit Party
proposes to acquire a fee ownership interest in Real Estate after the Closing
Date, it shall first provide to Agent a mortgage or deed of trust granting Agent
a first priority Lien on such Real Estate, together with environmental audits,
mortgage title insurance commitment, real property survey, local counsel
opinion(s), and, if required by Agent, supplemental casualty insurance and flood
insurance, and such other documents, instruments or agreements reasonably
requested by Agent, in each case, in form and substance reasonably satisfactory
to Agent.
5.10 Further Assurances. Each Credit Party executing this Agreement
agrees that it shall and shall cause each other Credit Party to, at such Credit
Party's expense and upon the reasonable request of Agent, duly execute and
deliver, or cause to be duly executed and delivered, to Agent such further
instruments and do and cause to be done such further acts as may be necessary or
proper in the reasonable opinion of Agent to carry out more effectively the
provisions and purposes of this Agreement and each Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof until the
Termination Date:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) form a new Subsidiary, unless
otherwise permitted hereunder, or (b) merge with, consolidate with, acquire all
or substantially all of the assets or Stock of, or otherwise combine with or
acquire, any Person, except (i) any Borrower may merge or consolidate with, or
acquire the assets or Stock of any other Borrower, (ii) any Subsidiary of
Holdings that is not a Credit Party may merge or consolidate with, or acquire
the assets or Stock of another Subsidiary of Holdings that is not a Credit
Party, (iii) any Borrower may merge or consolidate with, or acquire the Stock or
assets of any other Subsidiary of Holdings that is a Credit Party, (iv) any
Credit Party that is not a Borrower may merge or consolidate with, or acquire
the assets or Stock of any other Credit Party that is not a Borrower, and (v)
for transactions otherwise permitted under Sections 6.2 or 6.8; provided, that
33
in the case of clause (iii) above, the continuing or surviving Person, or the
transferee, as the case may be, shall be a Borrower.
6.2 Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except: (a) that Borrowers may hold investments
comprised of notes payable issued by Account Debtors to any Borrower pursuant to
negotiated agreements with respect to settlement of such Account Debtor's
Accounts in the ordinary course of business consistent with past practices; (b)
each Credit Party may maintain its existing investments in its Subsidiaries as
of the Closing Date; (c) any Borrower may make investments in any other
Borrower; (d) any Borrower may make investments in any Credit Party (other than
Holdings) that is not a Borrower; provided that such investments in Credit
Parties shall not exceed $100,000 in the aggregate; (e) any Borrower may make
investments in, or create, any wholly-owned domestic Subsidiary, provided that
such Subsidiary becomes a Borrower, the Stock of such Subsidiary is pledged to
Agent, and such Subsidiary grants Liens to Agent on all of its assets to secure
the Obligations, subject only to Permitted Encumbrances; (f) the Credit Parties
(other than Holdings) may make loans to Holdings, in lieu of distributions
permitted under Section 6.14(d), the proceeds of which shall be used by Holdings
solely to pay out of pocket expenses for administrative, legal and accounting
services provided by third parties that are reasonable and customary and
incurred in the ordinary course of business for such professional services, or
to pay franchise fees, costs and expenses associated with the issuance and
maintenance of its capital stock and similar costs and expenses, in an annual
aggregate amount not to exceed $3,000,000 per Fiscal Year after the Closing
Date; (g) the Credit Parties (other than Holdings) may make loans to Holdings,
in lieu of distributions permitted under Section 6.14(e), the proceeds of which
shall be used by Holdings solely to pay taxes as part of a consolidated,
combined or unitary group, (h) any Borrower may make investments in, or create,
any wholly-owned Foreign Subsidiary, provided that (I) 65% of such stock of such
Foreign Subsidiary shall be pledged to secure the Obligations, and (II) the
aggregate amount of all investments in such Foreign Subsidiaries funded after
the Closing Date shall not exceed $3,000,000 (exclusive of investments permitted
in clause(j) of this Section 6.2); (i) any Credit Party may maintain advances,
loans and investments in any of their Foreign Subsidiaries that are in existence
as of the date hereof, provided such advances, loans and investments are not
increased; (j) any Credit Party may make investments in any of its Foreign
Subsidiaries consisting of the conversion of intercompany loans (but not
intercompany accounts payable) outstanding as of the Closing Date into equity to
the extent required to meet thin capitalization rules in the applicable
jurisdiction; (k) so long as no Event of Default has occurred and is continuing
and there is no outstanding Revolving Loan balance, Borrowers may make
investments, subject to Control Letters in favor of Agent for the benefit of
Lenders or otherwise subject to a perfected security interest in favor of Agent
for the benefit of Lenders, in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof, (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Group or Xxxxx'x Investors Service, Inc., (iii) certificates of deposit
maturing no more than one year from the date of creation thereof issued by
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commercial banks incorporated under the laws of the United States of America,
each having combined capital, surplus and undivided profits of not less than
$300,000,000 and having a senior unsecured rating of "A" or better by a
nationally recognized rating agency (an "A Rated Bank"), (iv) time deposits
maturing no more than thirty (30) days from the date of creation thereof with A
Rated Banks and (v) mutual funds that invest solely in one or more of the
investments described in clauses (i) through (iv) above; (l) other investments
not exceeding $100,000 in the aggregate at any time outstanding; (m) other
investments not exceeding $1,000,000 in the aggregate at any time outstanding
with Agent's prior written approval; (n) transactions permitted pursuant to
Section 6.4; and (o) Capital Expenditures not prohibited by subsection (a) of
Annex F.
6.3 Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist
any Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in Section
6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension fund
and other employee benefit plan obligations and liabilities to the extent they
are permitted to remain unfunded under applicable law, (iv) existing
Indebtedness described in Disclosure Schedule (6.3) and refinancings thereof or
amendments or modifications thereto that do not have the effect of increasing or
decreasing the principal amount thereof or changing the amortization thereof
(other than to extend the same) and that are otherwise on terms and conditions
no less favorable to any Credit Party, Agent or any Lender, as reasonably
determined by Agent, than the terms of the Indebtedness being refinanced,
amended or modified, (v) Indebtedness arising from investments, loans or
advances among the Credit Parties and any other Subsidiary of Holdings that are
permitted under Section 6.2 (including extensions of the maturity thereof), (vi)
Indebtedness consisting of Guaranteed Indebtedness permitted pursuant to Section
6.6, (vii) Indebtedness owed to Bank One, N.A. or any of its banking affiliates
in respect of any liabilities arising from treasury, depository and cash
management services or in connection with any automated clearing house transfers
of funds not to exceed $500,000 in the aggregate at any time outstanding and
(viii) Indebtedness consisting of intercompany loans and advances made by any
Borrower to any other Borrower; provided that: (A) each Borrower shall record
all intercompany transactions on its books and records in a manner reasonably
satisfactory to Agent; (B) the obligations of each Borrower under any such
intercompany loans and advances shall be subordinated in right of payment to the
Obligations of such Borrower hereunder; (C) at the time any such intercompany
loan or advance is made by any Borrower to any other Borrower and after giving
effect thereto, each such Borrower shall be Solvent; and (D) no Event of Default
would occur and be continuing after giving effect to any such proposed
intercompany loan.
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness prior to its scheduled
amortization dates, other than (i) the Obligations; (ii) Indebtedness secured by
a Permitted Encumbrance if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Sections 6.8(b) or (c); (iii)
Indebtedness permitted by Section 6.3(a)(iv) upon any refinancing thereof in
accordance with Section 6.3(a)(iv); (iv) annual prepayments of the Senior Notes
within 90 to 120 days after the end of each Fiscal Year pursuant to Section
2.6(b) of the Senior Notes Agreement as in effect on the date hereof, provided
that such prepayments are limited to an amount not to exceed 50% of Excess Cash
Flow in excess of $3,000,000 of the Borrowers for such Fiscal Year; (v)
prepayments of the Senior Notes pursuant to Sections 2.6(c)(i) through (v) and
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Section 2.6(d) of the Senior Notes Agreement as in effect on the date hereof and
(vi) other prepayments of Indebtedness (excluding any Subordinated Debt) not in
excess of $250,000 in the aggregate.
(c) The Credit Parties shall not make any principal payment with
respect to the Senior Notes (i) during the first Loan Year, (ii) during the
second Loan Year and third Loan Year so long as any Event of Default has
occurred and is continuing or would result after giving effect thereto, (iii)
during the second Loan Year if Borrowing Availability, based on the most recent
Borrowing Base Certificate, would be less than $10,000,000 after giving effect
to any such payments, or (iv) during the third Loan Year if Borrowing
Availability plus the amount of any EBITDA Reserve then in effect would be less
than $15,000,000 after giving effect to any such payment.
6.4 Employee Loans and Affiliate Transactions.
(a) No Borrower shall enter into or be a party to any transaction
with any other Credit Party (other than other Borrowers) or any Affiliate
thereof except in the ordinary course of and pursuant to the reasonable
requirements of such Borrower's business and upon fair and reasonable terms that
are no less favorable to such Borrower than would be obtained in a comparable
arm's length transaction with a Person not an Affiliate of such Borrower (except
for transactions otherwise expressly permitted hereunder). In addition, if any
such transaction or series of related transactions (other than purchases and
sales of Inventory in the ordinary course of business) involves payments in
excess of $500,000 in the aggregate, the terms of these transactions must be
disclosed in advance to Agent and Lenders. All such transactions in excess of
$500,000 existing as of the date hereof are described in Disclosure Schedule
(6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes and stock option financing up to a maximum of $1,000,000 in the
aggregate at any one time outstanding.
6.5 Capital Structure and Business. If all or part of a Credit
Party's Stock is pledged to Agent, that Credit Party shall not issue additional
Stock. No Credit Party shall amend its charter or bylaws in a manner that would
adversely affect Agent or Lenders or such Credit Party's duty or ability to
repay the Obligations. No Credit Party shall engage in any business other than
the businesses currently engaged in by it or businesses reasonably related
thereto.
6.6 Guaranteed Indebtedness. No Credit Party shall create, incur,
assume or permit to exist any Guaranteed Indebtedness except (a) by endorsement
of instruments or items of payment for deposit to the general account of any
Credit Party, and (b) for Guaranteed Indebtedness incurred for the benefit of
any other Credit Party if the primary obligation is expressly permitted by this
Agreement, including, without limitation, the Senior Notes.
6.7 Liens. No Credit Party shall create, incur, assume or permit to
exist any Lien on or with respect to its Accounts or any of its other properties
or assets (whether now owned or hereafter acquired) except for (a) Permitted
Encumbrances; (b) Liens in existence on the date hereof and summarized on
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Disclosure Schedule (6.7) securing the Indebtedness described on Disclosure
Schedule (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property; (c) Liens under any conditional sale or other
title retention agreements (including Capital Leases) or in connection with
purchase money Indebtedness with respect to Equipment and Fixtures acquired by
any Credit Party in the ordinary course of business, involving the incurrence of
an aggregate amount of purchase money Indebtedness and Capital Lease Obligations
of not more than $28,500,000 until June 30, 2004 and not more than $24,000,000
outstanding at any one time thereafter for all such Liens (provided that such
Liens attach only to the assets subject to such purchase money debt and such
Indebtedness is incurred within twenty (20) days following such purchase and
does not exceed 100% of the purchase price of the subject assets); and (d) other
Liens securing Indebtedness not exceeding $250,000 in the aggregate at any time
outstanding, so long as such Liens do not attach to any Accounts or Inventory.
In addition, no Credit Party shall become a party to any agreement, note,
indenture or instrument, or take any other action, that would prohibit the
creation of a Lien on any of its properties or other assets in favor of Agent,
on behalf of itself and Lenders, as additional collateral for the Obligations,
except operating leases, Capital Leases or Licenses which prohibit Liens upon
the assets that are subject thereto.
6.8 Sale of Stock and Assets. No Credit Party shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the Stock of any of its Subsidiaries (whether in a public or a private
offering or otherwise) or any of its Accounts, other than (a) the sale of
Inventory in the ordinary course of business, (b) the sale or other disposition
by a Credit Party of Equipment and Fixtures that are obsolete or no longer used
or useful in such Credit Party's business and having a book value not exceeding
(i) $1,000,000 in the aggregate in any Fiscal Year without Agent's consent and
(ii) $2,000,000 in the aggregate in any Fiscal Year without the consent of the
Requisite Lenders, (c) the sale or discount of overdue accounts receivable
arising in the ordinary course of business, but only in connection with the
compromise or collection thereof, (d) sales of Stock or assets of any Subsidiary
of Holdings in connection with a transaction permitted under Section 6.1(b) or
Sections 6.2(e) or (g), (e) the sale of Equipment and Fixtures by Tweco in
connection with the moving of its facilities in Wichita, Kansas to Denton,
Texas, in an amount not to exceed $500,000, (f) the sale or other disposition of
other Equipment and Fixtures having a book value not exceeding $1,000,000 in the
aggregate in any Fiscal Year and (g) as permitted in Section 6.2(j).
6.9 ERISA. No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur (i) an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (ii) an ERISA Event to the extent such ERISA Event would reasonably be
expected to result in taxes, penalties and other liabilities in an aggregate
amount in excess of $250,000 in the aggregate.
6.10 Financial Covenants. Borrowers shall not breach or fail to
comply with any of the Financial Covenants.
6.11 [Intentionally Omitted].
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6.12 Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback or synthetic lease transaction involving any of its assets.
6.13 Cancellation of Indebtedness. No Credit Party shall cancel any
claim or debt owing to it, except for reasonable consideration negotiated on an
arm's length basis and in the ordinary course of its business consistent with
past practices (other than as permitted under Section 6.2(j)).
6.14 Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) intercompany loans and advances between Borrowers to the
extent permitted by Sections 6.2 and 6.3, (b) dividends and distributions by
Subsidiaries of any Borrower paid to such Borrower, (c) employee loans permitted
under Section 6.4(b), (d) payments of principal and interest on intercompany
loans issued in accordance with Section 6.3, (e) distributions to Holdings, the
proceeds of which shall be applied by Holdings directly to pay out of pocket
expenses, for administrative, legal and accounting services provided by third
parties that are reasonable and customary and incurred in the ordinary course of
business for such professional services, or to pay franchise fees, costs and
expenses associated with the issuance and maintenance of its capital stock and
similar costs and expenses, in an annual aggregate amount not in excess of
$3,000,000 per Fiscal Year, (f) distributions to Holdings in such amounts as are
necessary to enable Holdings to pay income taxes as part of a consolidated group
when and as such income taxes are due; provided that the aggregate amount
distributed to pay such income taxes by Credit Parties shall not exceed their
proportionate share of such income taxes based on the taxable income generated
by the Credit Parties as compared to the taxable income generated by all of
Holdings' Subsidiaries, and (g) distributions to Holdings, the proceeds of which
will be used by Holdings to make payments under the Senior Notes, subject to
Section 6.3(c).
6.15 Change of Corporate Name, State of Incorporation or Location;
Change of Fiscal Year. Without altering the restrictions on mergers involving
Credit Parties herein contained, no Credit Party shall (a) change its name as it
appears in official filings in the state of its incorporation or other
organization, (b) change its chief executive office, principal place of
business, corporate offices or warehouses or locations at which Collateral is
held or stored, or the location of its records concerning the Collateral, (c)
change the type of entity that it is, (d) change its organization identification
number, if any, issued by its state of incorporation or other organization, or
(e) change its state of incorporation or organization or incorporate or organize
in any additional jurisdictions, in each case without at least thirty (30) days
prior written notice to Agent and after Agent's written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States. No Credit Party shall change
its Fiscal Year.
6.16 No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement, the other Loan
Documents, the Senior Notes and any loan documents executed in connection
therewith) that could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
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or the making or repayment of intercompany loans by a Subsidiary of any Borrower
to any Borrower or between Borrowers.
6.17 Real Estate Purchases. No Credit Party shall purchase a fee
simple ownership interest in Real Estate with an aggregate purchase price in
excess of $500,000.
6.18 Changes Relating to Senior Notes. No Credit Party shall change
or amend the terms of the Senior Notes (or any indenture or agreement in
connection therewith) if the effect of such amendment is to: (a) increase the
interest rate on the Senior Notes; (b) change the dates upon which payments of
principal or interest are due on such Senior Notes other than to extend such
dates; or (c) change the redemption or prepayment provisions of the Senior Notes
to accelerate the dates therefor or to increase the premiums payable in
connection therewith.
6.19 Holdings. Holdings shall not engage in any trade or business
other than as a holding company for its Subsidiaries, or own any assets (other
than Stock of its Subsidiaries) or incur any Indebtedness or Guaranteed
Indebtedness (other than the Obligations and the Senior Notes); provided, that
Holdings may guarantee leases and other contractual obligations of its
Subsidiaries.
7. TERM
7.1 Termination. The financing arrangements contemplated hereby shall
be in effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided that the
provisions of Section 11, the payment obligations under Sections 1.13 and 1.14,
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of the
following events (regardless of the reason therefor) shall constitute an "Event
of Default" hereunder:
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(a) Any Borrower (i) fails to make any payment of principal of the
Loans or any of the other Obligations when due and payable, (ii) fails to make
any payment of interest on, or Fees owing in respect of, the Loans or any of the
other Obligations when due and payable, and such default shall continue
unremedied for more than three (3) days, or (iii) fails to pay or reimburse
Agent or Lenders for any expense reimbursable hereunder or under any other Loan
Document within five (5) days following Agent's demand for such reimbursement or
payment of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe
any of the provisions of Sections 1.4, 1.6, 5.4(a) or 6, or any of the
provisions set forth in Annexes C or F, respectively.
(c) Any Borrower fails or neglects to perform, keep or observe any of
the provisions of Section 4.1 or any provisions set forth in Annex E, and the
same shall remain unremedied for three (3) Business Days or more.
(d) Any Credit Party fails or neglects to perform, keep or observe
any other provision of this Agreement or of any of the other Loan Documents
(other than any provision embodied in or covered by any other clause of this
Section 8.1) and the same shall remain unremedied for twenty-five (25) days or
more.
(e) A default or breach occurs under any other agreement, document or
instrument to which any Credit Party is a party that is not cured within any
applicable grace period therefor, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness or
Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $500,000 in the aggregate (including amounts owing to all creditors
under any combined or syndicated credit arrangements), or (ii) causes, or
permits any holder of such Indebtedness or Guaranteed Indebtedness or a trustee
to cause, Indebtedness or Guaranteed Indebtedness or a portion thereof in excess
of $500,000 in the aggregate to become due prior to its stated maturity or prior
to its regularly scheduled dates of payment, or cash collateral in respect
thereof to be demanded, in each case, regardless of whether such default is
waived, or such right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base Certificate is
untrue or incorrect in any respect (other than (i) inadvertent, immaterial
errors not exceeding $250,000 in the aggregate in any Borrowing Base
Certificate, (ii) errors understating the Borrowing Base or (iii) errors
occurring when Borrowing Availability continues to exceed $10,000,000 after
giving effect to the correction of such errors), or any representation or
warranty herein or in any Loan Document or in any written statement, report,
financial statement or certificate (other than a Borrowing Base Certificate)
made or delivered to Agent or any Lender by any Credit Party is untrue or
incorrect in any material respect as of the date when made or deemed made.
(g) Assets of any Credit Party with a fair market value of $250,000
or more are attached, seized, levied upon or subjected to a writ or distress
warrant, or come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors of any Credit Party and such condition
continues for twenty (20) days or more.
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(h) A case or proceeding is commenced against any Credit Party
seeking a decree or order in respect of such Credit Party (i) under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, or (iii) ordering the
winding-up or liquidation of the affairs of such Credit Party, and such case or
proceeding shall remain undismissed or unstayed for sixty (60) days or more or a
decree or order granting the relief sought in such case or proceeding is granted
by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consents to or fails to contest in a timely and
appropriate manner the institution of proceedings thereunder or the filing of
any such petition or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for such Credit Party or for any substantial part of any such Credit Party's
assets, (iii) makes an assignment for the benefit of creditors, (iv) takes any
action in furtherance of any of the foregoing; or (v) admits in writing its
inability to, or is generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in excess
of $1,000,000 in the aggregate at any time are outstanding against one or more
of the Credit Parties, and the same are not, within thirty (30) days after the
entry thereof, discharged or execution thereof stayed or bonded pending appeal,
or such judgments are not discharged prior to the expiration of any such stay.
(k) Any material provision of any Loan Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms (or any Credit
Party shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien
created under any Loan Document ceases to be a valid and perfected first
priority Lien (except as otherwise permitted herein or therein) in any of the
Collateral purported to be covered thereby other than as a result of actions or
omissions of Agent.
(l) Any Change of Control occurs.
(m) Any material uninsured claims relating to exposure to asbestos
shall be asserted against any Credit Party, which claims have a reasonable
likelihood of success.
8.2 Remedies.
(a) If any Event of Default has occurred and is continuing, Agent may
(and at the written request of the Requisite Lenders shall), without notice,
suspend the Revolving Loan facility with respect to additional Advances and/or
the incurrence of additional Letter of Credit Obligations, whereupon any
additional Advances and additional Letter of Credit Obligations shall be made or
incurred in Agent's sole discretion (or in the sole discretion of the Requisite
41
Lenders, if such suspension occurred at their direction) so long as such Event
of Default is continuing. If any Event of Default has occurred and is
continuing, Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans and the Letter of Credit Fees to the Default
Rate.
(b) If any Event of Default has occurred and is continuing, Agent may
(and at the written request of the Requisite Lenders shall), without notice: (i)
terminate the Revolving Loan facility with respect to further Advances or the
incurrence of further Letter of Credit Obligations; (ii) reduce the Revolving
Loan Commitment from time to time; (iii) declare all or any portion of the
Obligations, including all or any portion of any Loan to be forthwith due and
payable, and require that the Letter of Credit Obligations be cash
collateralized in the manner set forth in Annex B, all without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by Borrowers and each other Credit Party; or (iv) exercise any rights and
remedies provided to Agent under the Loan Documents or at law or equity,
including all remedies provided under the Code; provided that upon the
occurrence of an Event of Default specified in Sections 8.1(h) or (i), the
Commitments shall be immediately terminated and all of the Obligations,
including the aggregate Revolving Loan, shall become immediately due and payable
without declaration, notice or demand by any Person.
8.3 Waivers by Credit Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives (including for purposes
of Section 12): (a) presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration, protest,
default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by Agent on which any
Credit Party may in any way be liable, and hereby ratifies and confirms whatever
Agent may do in this regard, (b) all rights to notice and a hearing prior to
Agent's taking possession or control of, or to Agent's replevy, attachment or
levy upon, the Collateral or any bond or security that might be required by any
court prior to allowing Agent to exercise any of its remedies, and (c) the
benefit of all valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may make an
assignment to a Qualified Assignee of, or sell participations in, at any time or
times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any assignment
by a Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and the
execution of an assignment agreement (an "Assignment Agreement") substantially
in the form attached hereto as Exhibit 9.1(a) and otherwise in form and
substance reasonably satisfactory to, and acknowledged by, Agent; (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
42
Agent that it is purchasing the applicable Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iii) after giving effect to any such partial assignment, the assignee
Lender shall have Commitments in an amount at least equal to $2,500,000 and the
assigning Lender shall have retained Commitments in an amount at least equal to
$2,500,000; (iv) include a payment to Agent of an assignment fee of $3,500; and
(v) so long as no Event of Default has occurred and is continuing, require the
consent of Borrower Representative, which shall not be unreasonably withheld or
delayed, provided, further, that an assignment will not be effective unless it
is recorded by Agent in the Loan Account. In the case of an assignment by a
Lender under this Section 9.1, the assignee shall have, to the extent of such
assignment, the same rights, benefits and obligations as all other Lenders
hereunder, provided, however that such assignee shall not be entitled to receive
any greater payment under Section 1.13 than the assigning Lender would have
received had such assignment not occurred. The assigning Lender shall be
relieved of its obligations hereunder with respect to its Commitments or
assigned portion thereof from and after the date of such assignment. Each
Borrower hereby acknowledges and agrees that any assignment shall give rise to a
direct obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender". In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event Agent or any
Lender assigns or otherwise transfers all or any part of the Obligations, Agent
or any such Lender shall so notify Borrowers and Borrowers shall, upon the
request of Agent or such Lender, execute new Notes in exchange for the Notes, if
any, being assigned. Notwithstanding the foregoing provisions of this Section
9.1(a), (i) any Lender may at any time pledge the Obligations held by it and
such Lender's rights under this Agreement and the other Loan Documents to a
Federal Reserve Bank, provided that no such pledge to a Federal Reserve Bank
shall release such Lender from such Lender's obligations hereunder or under any
other Loan Document, and (ii) any Lender that is an investment fund may assign
the Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor, provided further that such Lender shall notify Agent of any such
assignment for purposes of maintaining the Loan Account in accordance with
Section 1.10 hereof, and such assignment will not become effective unless such
assignment is recorded in the Loan Account.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). No Borrower or Credit Party shall have
any obligation or duty to any participant. Neither Agent nor any Lender (other
than the Lender selling a participation) shall have any duty to any participant
and may continue to deal solely with the Lender selling a participation as if no
such sale had occurred. In addition, each Lender granting a participation under
this Section 9.1 shall keep a register, meeting the requirements of Treasury
Regulation Section 5f.103-1(c), of each participant, specifying such
participant's entitlement to payments of principal and interest with respect to
such participation.
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(c) Except as expressly provided in this Section 9.1, no Lender
shall, as between Borrowers and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any
Lender permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be reasonably
requested and, if requested by Agent, the preparation of informational materials
for, and the participation of management in meetings with, potential assignees
or participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy in all material respects of all
descriptions of the Credit Parties and their respective affairs contained in any
selling materials provided by them and all other information provided by them
and included in such materials, except that any Projections delivered by
Borrowers shall only be certified by Borrowers as having been prepared by
Borrowers in compliance with the representations contained in Section 3.4(c) and
shall be subject to confidentiality covenants substantially equivalent to those
contained in Section 11.8.
(e) Any Lender may furnish any information concerning Credit Parties
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 11.8.
(f) So long as no Event of Default has occurred and is continuing, no
Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.14(a), increased
costs under Section 1.14(b), an inability to fund LIBOR Loans under Section
1.14(c), or withholding taxes in accordance with Section 1.13.
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender"), may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and
Borrowers, the option to provide to Borrowers all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrowers pursuant
to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, Borrowers and Agent and assign all or a portion of its interests in
any Loans to the Granting Lender or to any financial institutions (consented to
44
by Borrowers and Agent) providing liquidity and/or credit support to or for the
account of such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating to its
Loans to any rating agency, commercial paper dealer or provider of any surety,
guarantee or credit or liquidity enhancement to such SPC. This Section 9.1(g)
may not be amended without the prior written consent of each Granting Lender,
all or any of whose Loans are being funded by an SPC at the time of such
amendment. For the avoidance of doubt, the Granting Lender shall for all
purposes, including without limitation, the approval of any amendment or waiver
of any provision of any Loan Document or the obligation to pay any amount
otherwise payable by the Granting Lender under the Loan Documents, continue to
be the Lender of record hereunder. In addition, each Granting Lender (i) shall
keep a register, meeting the requirements of Treasury Regulation Section
5f.103-1(c), of each SPC which has funded all or any part of any Loan that such
Granting Lender would otherwise be obligated to make to Borrowers pursuant to
this Agreement, specifying such SPC's entitlement to payments of principal and
interest with respect to such Loan and (ii) shall collect, prior to the time
such SPC receives payments with respect to such funded Loan, from each such SPC
the appropriate forms, certificates and statements described in Section 1.13
(and updated as required by Section 1.13) as if such SPC were a Lender under
Section 1.13.
(h) For purposes of this Section 9.1 with respect to each Letter of
Credit, if an L/C Issuer transfers its rights with respect to a Borrower's
reimbursement obligation with respect to a Letter of Credit, (i) such L/C Issuer
shall give notice of such transfer to the Agent for notation in the Loan
Account, (ii) each such transfer shall be notated in the Loan Account and (iii)
no such transfer will be effective for purposes of this Agreement unless it has
been recorded in the Loan Account.
9.2 Appointment of Agent. GE Capital is hereby appointed to act on
behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, except
to the extent provided in Section 1.10, Agent shall act solely as an agent of
Lenders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for any Credit
Party or any other Person. Agent shall have no duties or responsibilities except
for those expressly set forth in this Agreement and the other Loan Documents.
The duties of Agent shall be mechanical and administrative in nature and Agent
shall not have, or be deemed to have, by reason of this Agreement, any other
Loan Document or otherwise a fiduciary relationship in respect of any Lender.
Except as expressly set forth in this Agreement and the other Loan Documents,
Agent shall not have any duty to disclose, and shall not be liable for failure
to disclose, any information relating to any Credit Party or any of their
respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence or willful misconduct.
45
If Agent shall request instructions from Requisite Lenders,
Supermajority Revolving Lenders or all affected Lenders with respect to any act
or action (including failure to act) in connection with this Agreement or any
other Loan Document, then Agent shall be entitled to refrain from such act or
taking such action unless and until Agent shall have received instructions from
Requisite Lenders, Supermajority Revolving Lenders or all affected Lenders, as
the case may be, and Agent shall not incur liability to any Person by reason of
so refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders, Supermajority Revolving Lenders or all affected Lenders,
as applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its Affiliates
nor any of their respective directors, officers, agents or employees shall be
liable for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for damages
caused by its or their own gross negligence or willful misconduct. Without
limiting the generality of the foregoing, Agent: (a) may treat the payee of any
Note as the holder thereof until Agent receives written notice of the assignment
or transfer thereof signed by such payee and in form reasonably satisfactory to
Agent; (b) may consult with legal counsel, independent public accountants and
other experts selected by it and shall not be liable for any action taken or
omitted to be taken by it in good faith in accordance with the advice of such
counsel, accountants or experts; (c) makes no warranty or representation to any
Lender and shall not be responsible to any Lender for any statements, warranties
or representations made in or in connection with this Agreement or the other
Loan Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Credit Party or to
inspect the Collateral (including the books and records) of any Credit Party;
(e) shall not be responsible to any Lender for the due execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement or
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; and (f) shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy, telegram,
cable or telex) believed by it to be genuine and signed or sent by the proper
party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
46
Person who may do business with or own securities of any Credit Party or any
such Affiliate, all as if GE Capital were not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. GE
Capital owns certain equity interests in Holdings and holds a portion of the
Senior Notes. Each Lender acknowledges the potential conflict of interest
between GE Capital as owner of that equity investment and Senior Notes and GE
Capital as Agent.
9.5 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the extent
not reimbursed by Credit Parties and without limiting the obligations of Credit
Parties hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against Agent
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and each other Loan Document, to the extent that Agent is not
reimbursed for such expenses by Credit Parties.
9.7 Successor Agent. Agent may resign at any time by giving not less
than thirty (30) days' prior written notice thereof to Lenders and Borrower
Representative. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within thirty (30) days after the resigning Agent's giving notice of
resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial institution or
a subsidiary of a commercial bank or financial institution if such commercial
bank or financial institution is organized under the laws of the United States
of America or of any State thereof and has a combined capital and surplus of at
least $300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, within thirty (30) days after the date such notice of resignation was
given by the resigning Agent, such resignation shall become effective and the
Requisite Lenders shall thereafter perform all the duties of Agent hereunder
47
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above. Any successor Agent appointed by Requisite Lenders hereunder
shall be subject to the approval of Borrower Representative, such approval not
to be unreasonably withheld or delayed; provided that such approval shall not be
required if a Default or an Event of Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall succeed to and become vested with all the rights,
powers, privileges and duties of the resigning Agent. Upon the earlier of the
acceptance of any appointment as Agent hereunder by a successor Agent or the
effective date of the resigning Agent's resignation, the resigning Agent shall
be discharged from its duties and obligations under this Agreement and the other
Loan Documents, except that any indemnity rights or other rights in favor of
such resigning Agent shall continue. After any resigning Agent's resignation
hereunder, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was acting as Agent under
this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default
and subject to Section 9.9(f), each Lender is hereby authorized at any time or
from time to time, without prior notice to any Credit Party or to any Person
other than Agent, any such notice being hereby expressly waived, to offset and
to appropriate and to apply any and all balances held by it at any of its
offices for the account of any Borrower or Guarantor (regardless of whether such
balances are then due to such Borrower or Guarantor) and any other properties or
assets at any time held or owing by that Lender or that holder to or for the
credit or for the account of any Borrower or Guarantor against and on account of
any of the Obligations that are not paid when due; provided that the Lender
exercising such offset rights shall give notice thereof to the affected Credit
Party promptly after exercising such rights. Any Lender exercising a right of
setoff or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares (other than
offset rights exercised by any Lender with respect to Sections 1.11, 1.13 or
1.14). Each Lender's obligation under this Section 9.8 shall be in addition to
and not in limitation of its obligations to purchase a participation in an
amount equal to its Pro Rata Share of the Swing Line Loans under Section 1.1.
Each Credit Party that is a Borrower or Guarantor agrees, to the fullest extent
permitted by law, that (a) any Lender may exercise its right to offset with
respect to amounts in excess of its Pro Rata Share of the Obligations and may
sell participations in such amounts so offset to other Lenders and holders and
(b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
offset, the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
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9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) Revolving Lenders shall refund or participate in the Swing
Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(b). If the
Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Revolving Lenders, promptly after
receipt of a Notice of Revolving Credit Advance and in any event prior to 1:00
p.m. (New York time) on the date such Notice of Revolving Advance is received,
by telecopy, telephone or other similar form of transmission. Each Revolving
Lender shall make the amount of such Lender's Pro Rata Share of such Revolving
Credit Advance available to Agent in same day funds by wire transfer to Agent's
account as set forth in Annex G not later than 3:00 p.m. (New York time) on the
requested funding date, in the case of an Index Rate Loan, and not later than
12:00 noon (New York time) on the requested funding date, in the case of a LIBOR
Loan. After receipt of such wire transfers (or, in the Agent's sole discretion,
before receipt of such wire transfers), subject to the terms hereof, Agent shall
make the requested Revolving Credit Advance to the Borrower designated by
Borrower Representative in the Notice of Revolving Credit Advance. All payments
by each Revolving Lender shall be made without setoff, counterclaim or deduction
of any kind.
(ii) Not less than once during each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such Settlement Date, Agent shall pay to each Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrowers since
the previous Settlement Date for the benefit of such Lender on the Loans held by
it. To the extent that any Lender (a "Non-Funding Lender") has failed to fund
all such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender's Pro Rata Share of all payments received from
Borrowers. Such payments shall be made by wire transfer to such Lender's account
(as specified by such Lender in Annex G or the applicable Assignment Agreement)
not later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.
(b) Availability of Lender's Pro Rata Share. Agent may assume that
each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without setoff,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower Representative and Borrowers shall immediately repay such amount
to Agent. Nothing in this Section 9.9(b) or elsewhere in this Agreement or the
other Loan Documents shall be deemed to require Agent to advance funds on behalf
of any Revolving Lender or to relieve any Revolving Lender from its obligation
to fulfill its Commitments hereunder or to prejudice any rights that Borrowers
49
may have against any Revolving Lender as a result of any default by such
Revolving Lender hereunder. To the extent that Agent advances funds to any
Borrower on behalf of any Revolving Lender and is not reimbursed therefor on the
same Business Day as such Advance is made, Agent shall be entitled to retain for
its account all interest accrued on such Advance until reimbursed by the
applicable Revolving Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
Agent from Borrowers and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to any Borrower or paid to any other
Person pursuant to any insolvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement or any other Loan Document, Agent will
not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent
has distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to any Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender to
make any Revolving Credit Advance or any payment required by it hereunder or to
purchase any participation in any Swing Line Loan to be made or purchased by it
on the date specified therefor shall not relieve any other Lender (each such
other Revolving Lender, an "Other Lender") of its obligations to make such
Advance or purchase such participation on such date, but neither any Other
Lender nor Agent shall be responsible for the failure of any Non-Funding Lender
to make an Advance, purchase a participation or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender" or a "Revolving Lender"
(or be included in the calculation of "Requisite Lenders", or "Supermajority
Revolving Lenders" hereunder) for any voting or consent rights under or with
respect to any Loan Document. At Borrower Representative's request, Agent or a
Person reasonably acceptable to Agent shall have the right with Agent's consent
and in Agent's sole discretion (but shall have no obligation) to purchase from
any Non-Funding Lender, and each Non-Funding Lender agrees that it shall, at
Agent's request, sell and assign to Agent or such Person, all of the Commitments
of that Non-Funding Lender for an amount equal to the principal balance of all
Loans held by such Non-Funding Lender and all accrued interest and fees with
respect thereto through the date of sale, such purchase and sale to be
consummated pursuant to an executed Assignment Agreement.
(e) Dissemination of Information. Agent shall use reasonable efforts
to provide Lenders with any notice of an Event of Default received by Agent
from, or delivered by Agent to, any Credit Party, with notice of any Event of
Default of which Agent has actually become aware and with notice of any action
taken by Agent following any Event of Default; provided that Agent shall not be
50
liable to any Lender for any failure to do so, except to the extent that such
failure is attributable to Agent's gross negligence or willful misconduct.
Lenders acknowledge that Borrowers are required to provide Financial Statements
to Lenders in accordance with Annex E hereto and agree that Agent shall have no
duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Lenders and their respective successors and assigns (including, in
the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of Agent and Lenders shall be void.
The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect to
the subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2. Any letter of interest, commitment letter, fee letter
or confidentiality agreement, if any, between any Credit Party and Agent or any
Lender or any of their respective Affiliates, predating this Agreement and
relating to a financing of substantially similar form, purpose or effect shall
be superseded by this Agreement. Notwithstanding the foregoing, the GE Capital
Fee Letter shall survive the execution and delivery of this Agreement and shall
continue to be binding obligations of the parties.
11.2 Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent, no
amendment, modification, termination or waiver of any provision of this
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Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent and Borrowers, and by Requisite Lenders,
Supermajority Revolving Lenders or all affected Lenders, as applicable. Except
as set forth in clauses (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require the
written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement or the Loan Documents that (i)
releases any Guaranty or (ii) increases the multiplier set forth in the
definition of the Borrowing Base or modifies the definition of Adjusted EBITDA
or EBITDA to make more credit available under the Revolving Loan facility, shall
be effective unless the same shall be in writing and signed by Agent,
Supermajority Revolving Lenders and Borrowers. No amendment, modification,
termination or waiver of or consent with respect to any provision of this
Agreement that waives compliance with the conditions precedent set forth in
Section 2.2 to the making of any Loan or the incurrence of any Letter of Credit
Obligations shall be effective unless the same shall be in writing and signed by
Agent, Requisite Lenders and Borrowers. Notwithstanding anything contained in
this Agreement to the contrary, no waiver or consent with respect to any Default
or any Event of Default shall be effective for purposes of the conditions
precedent to the making of Loans or the incurrence of Letter of Credit
Obligations set forth in Section 2.2 unless the same shall be in writing and
signed by Agent, Requisite Lenders and Borrowers.
(c) No amendment, modification, termination or waiver shall, unless
in writing and signed by Agent and each Lender directly affected thereby: (i)
increase the principal amount of any Lender's Commitment (which action shall be
deemed only to affect those Lenders whose Commitments are increased and may be
approved by Requisite Lenders, including those Lenders whose Commitments are
increased); (ii) reduce the principal of, rate of interest on or Fees payable
with respect to any Loan or Letter of Credit Obligations of any affected Lender;
(iii) extend any scheduled payment date (other than payment dates of mandatory
prepayments under Section 1.3(b)) or final maturity date of the principal amount
of any Loan of any affected Lender; (iv) waive, forgive, defer, extend or
postpone any payment of interest or Fees as to any affected Lender; (v) except
as otherwise permitted herein or in the other Loan Documents, release, or permit
any Credit Party to sell or otherwise dispose of, any Collateral with a value
exceeding $5,000,000 in the aggregate (which action shall be deemed to directly
affect all Lenders); (vi) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; and (vii) amend or waive
this Section 11.2 or the definitions of the terms "Requisite Lenders" or
"Supermajority Revolving Lenders" insofar as such definitions affect the
substance of this Section 11.2. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or L/C Issuer
under this Agreement or any other Loan Document shall be effective unless in
writing and signed by Agent or L/C Issuer, as the case may be, in addition to
Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on any Credit Party in any
52
case shall entitle such Credit Party or any other Credit Party to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 11.2 shall be binding upon each holder of the Notes at the time
outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment, modification,
waiver or termination:
(i) requiring the consent of all affected Lenders, the consent
of Requisite Lenders is obtained, but the consent of other Lenders whose consent
is required is not obtained (any such Lender whose consent is not obtained as
described in this clause (i) and in clauses (ii), (iii) and (iv) below being
referred to as a "Non-Consenting Lender");
(ii) requiring the consent of Supermajority Revolving Lenders,
the consent of Requisite Lenders is obtained, but the consent of Supermajority
Revolving Lenders is not obtained; or
(iii) requiring the consent of Requisite Lenders, the consent of
Lenders holding 51% or more of the aggregate Commitments is obtained, but the
consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower
Representative's request, Agent or a Person reasonably acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Agent or such Person, all of the Commitments of such Non-Consenting
Lenders for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lenders and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall deliver to Borrowers termination
statements, mortgage releases and other documents necessary or appropriate to
evidence the termination of the Liens securing payment of the Obligations.
11.3 Fees and Expenses. Borrowers shall reimburse (i) Agent for all
reasonable fees, costs and expenses (including the reasonable fees and expenses
of all of its counsel, advisors, consultants and auditors) and (ii) Agent (and,
with respect to clauses (c) and (d) below, all Lenders) for all reasonable fees,
costs and expenses, including the reasonable fees, costs and expenses of counsel
or other advisors (including environmental and management consultants and
appraisers), incurred in connection with the negotiation, preparation and filing
and/or recordation of the Loan Documents and incurred in connection with:
(a) any amendment, modification or waiver of, consent with respect
to, or termination of, any of the Loan Documents or Related Transactions
53
Documents or advice in connection with the syndication and administration of the
Loans made pursuant hereto or its rights hereunder or thereunder;
(b) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Credit Party or any other Person
and whether as a party, witness or otherwise) in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against any or all of the
Credit Parties or any other Person that may be obligated to Agent by virtue of
the Loan Documents; including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring of
the Loans during the pendency of one or more Events of Default; provided that in
the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders; provided,
further, that no Person shall be entitled to reimbursement under this clause (c)
in respect of any litigation, contest, dispute, suit, proceeding or action to
the extent any of the foregoing results from such Person's gross negligence or
willful misconduct;
(c) any attempt to enforce any remedies of Agent against any or all
of the Credit Parties or any other Person that may be obligated to Agent or any
Lender by virtue of any of the Loan Documents, including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; provided that in the
case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(d) any workout or restructuring of the Loans during the pendency of
one or more Events of Default; and
(e) efforts to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Credit Parties or their respective
affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (e) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrowers to Agent, provided, however,
that Borrowers shall not reimburse Agent or any Lenders for any fees, costs, or
expenses with respect to taxes, levies, imposts, deductions, charges or
withholdings imposed by any Governmental Authority, or any liabilities with
respect thereto, the indemnification for which shall be governed solely and
exclusively by Section 1.13. Without limiting the generality of the foregoing,
such expenses, costs, charges and fees may include: fees, costs and expenses of
accountants, environmental advisors, appraisers, investment bankers, management
and other consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services
54
11.4 No Waiver. Agent's or any Lender's failure, at any time or
times, to require strict performance by the Credit Parties of any provision of
this Agreement or any other Loan Document shall not waive, affect or diminish
any right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Event of
Default by any Credit Party shall be deemed to have been suspended or waived by
Agent or any Lender, unless such waiver or suspension is by an instrument in
writing signed by an officer of or other authorized employee of Agent and the
applicable required Lenders, and directed to Borrowers specifying such
suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
11.8 Confidentiality. Agent and each Lender agree (i) to use any
confidential information provided to them by the Credit Parties only in
connection with the transactions contemplated by this Agreement and (ii) to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information)
to maintain as confidential such confidential information for a period of two
(2) years following payment in full of the Obligations, except that Agent and
any Lender may disclose such information following notice to Borrower
Representative (a) to Persons employed or engaged by Agent or such Lender; (b)
to any bona fide assignee or participant or potential assignee or participant
that has agreed to comply with the covenant contained in this Section 11.8 (and
any such bona fide assignee or participant or potential assignee or participant
may disclose such information to Persons employed or engaged by them as
described in clause (a) above); (c) as required or requested by any Governmental
Authority or reasonably believed by Agent or such Lender to be compelled by any
court decree, subpoena or legal or administrative order or process; (d) as, on
the advice of Agent's or such Lender's counsel, is required by law; (e) in
55
connection with the exercise of any right or remedy under the Loan Documents or
in connection with any Litigation to which Agent or such Lender is a party; or
(f) that ceases to be confidential through no fault of Agent or any Lender.
Notwithstanding anything to the contrary set forth herein or in any other
agreement to which the parties hereto are parties or by which they are bound,
the obligations of confidentiality contained herein and therein, as they relate
to the transactions contemplated by this Agreement, shall not apply to the
federal tax structure or federal tax treatment of such transactions, and each
party hereto (and any employee, representative, or agent of any party hereto)
may disclose to any and all persons, without limitation of any kind, the federal
tax structure and federal tax treatment of such transactions. The preceding
sentence is intended to cause such transactions not to be treated as having been
offered under conditions of confidentiality for purposes of Section
1.6011-4(b)(3) (or any successor provision) of the Treasury regulations
promulgated under IRC Section 6011, and shall be construed in a manner
consistent with such purpose. In addition, each party hereto acknowledges that
it has no proprietary or exclusive rights to the tax structure of such
transactions or any tax matter or tax idea related to such transactions.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF
THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION,
VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE
AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY
HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX
XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS
FROM THOSE COURTS MAY HAVE TO BE HEARD BY X XXXXX XXXXXXX XXXXXXX XX XXX XXXX
XXXXXX; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE
GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH
COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT
56
SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED
OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN
ANNEX H OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered: (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10); (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid; or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated in Annex H or to such other address
(or facsimile number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower Representative or Agent)
designated in Annex H to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION
WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED
BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND
FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT
THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE,
TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY ARISING
57
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER
LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters. Each Credit Party executing
this Agreement agrees that neither it nor its Affiliates will in the future
issue any press releases or other public disclosure using the name of GE Capital
or its affiliates or referring to this Agreement, the other Loan Documents or
the Related Transactions Documents without at least two (2) Business Days' prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult
with GE Capital before issuing such press release or other public disclosure.
Each Credit Party consents to the publication by Agent or any Lender of
advertising material relating to the financing transactions contemplated by this
Agreement using Borrower's name, product photographs, logo or trademark. Agent
or such Lender shall provide a draft of any advertising material to each Credit
Party for review and comment prior to the publication thereof. Agent reserves
the right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.
11.15 Reinstatement. This Agreement shall remain in full force and
effect and continue to be effective should any petition be filed by or against
any Credit Party for liquidation or reorganization, should any Credit Party
become insolvent or make an assignment for the benefit of any creditor or
creditors or should a receiver or trustee be appointed for all or any
significant part of any Credit Party's assets, and shall continue to be
effective or to be reinstated, as the case may be, if at any time payment and
performance of the Obligations, or any part thereof, is, pursuant to applicable
law, rescinded or reduced in amount, or must otherwise be restored or returned
by any obligee of the Obligations, whether as a "voidable preference,"
"fraudulent conveyance," or otherwise, all as though such payment or performance
had not been made. In the event that any payment, or any part thereof, is
rescinded, reduced, restored or returned, the Obligations shall be reinstated
and deemed reduced only by such amount paid and not so rescinded, reduced,
restored or returned.
11.16 Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto and no presumption or
burden of proof shall arise favoring or disfavoring any party by virtue of the
authorship of any provisions of this Agreement.
11.18 Limitation on Security Interest with respect to Foreign
Subsidiaries. No Credit Party shall be required to pledge with respect to any
directly held Foreign Subsidiary more than the sum of (a) 65% of the total
58
combined voting power of all classes of Stock of such Foreign Subsidiary that
are entitled to vote, and (b) 100% of all nonvoting Stock of any such
Subsidiary.
12. CROSS-GUARANTY
12.1 Cross-Guaranty. Each Credit Party hereby agrees that such Credit
Party is jointly and severally liable for, and hereby absolutely and
unconditionally guarantees to Agent and Lenders and their respective successors
and assigns, the full and prompt payment (whether at stated maturity, by
acceleration or otherwise) and performance of, all Obligations owed or hereafter
owing to Agent and Lenders by each other Credit Party. Each Credit Party agrees
that its guaranty obligation hereunder is a continuing guaranty of payment and
performance and not of collection, that its obligations under this Section 12
shall not be discharged until payment and performance, in full, of the
Obligations has occurred, and that its obligations under this Section 12 shall
be absolute and unconditional, irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Credit Party is or may
become a party;
(b) the absence of any action to enforce this Agreement (including
this Section 12) or any other Loan Document or the waiver or consent by Agent
and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by Agent and Lenders in respect thereof (including the release of
any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances that might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor.
Each Credit Party shall be regarded, and shall be in the same position, as
principal debtor with respect to the Obligations guaranteed hereunder.
12.2 Waivers by Credit Parties. Each Credit Party expressly waives
all rights it may have now or in the future under any statute, or at common law,
or at law or in equity, or otherwise, to compel Agent or Lenders to marshal
assets or to proceed in respect of the Obligations guaranteed hereunder against
any other Credit Party, any other party or against any security for the payment
and performance of the Obligations before proceeding against, or as a condition
to proceeding against, such Credit Party. It is agreed among each Credit Party,
Agent and Lenders that the foregoing waivers are of the essence of the
transaction contemplated by this Agreement and the other Loan Documents and
that, but for the provisions of this Section 12 and such waivers, Agent and
Lenders would decline to enter into this Agreement.
12.3 Benefit of Guaranty. Each Credit Party agrees that the
provisions of this Section 12 are for the benefit of Agent and Lenders and their
59
respective successors, transferees, endorsees and assigns, and nothing herein
contained shall impair, as between any other Credit Party and Agent or Lenders,
the obligations of such other Credit Party under the Loan Documents.
12.4 Waiver of Subrogation, Etc. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, and except as set
forth in Section 12.7, each Credit Party hereby expressly and irrevocably waives
any and all rights at law or in equity to subrogation, reimbursement,
exoneration, contribution, indemnification or set off and any and all defenses
available to a surety, guarantor or accommodation co-obligor. Each Credit Party
acknowledges and agrees that this waiver is intended to benefit Agent and
Lenders and shall not limit or otherwise affect such Credit Party's liability
hereunder or the enforceability of this Section 12, and that Agent, Lenders and
their respective successors and assigns are intended third party beneficiaries
of the waivers and agreements set forth in this Section 12.4.
12.5 Election of Remedies. If Agent or any Lender may, under
applicable law, proceed to realize its benefits under any of the Loan Documents
giving Agent or such Lender a Lien upon any Collateral, whether owned by any
Credit Party or by any other Person, either by judicial foreclosure or by
non-judicial sale or enforcement, Agent or any Lender may, at its sole option,
determine which of its remedies or rights it may pursue without affecting any of
its rights and remedies under this Section 12. If, in the exercise of any of its
rights and remedies, Agent or any Lender shall forfeit any of its rights or
remedies, including its right to enter a deficiency judgment against any Credit
Party or any other Person, whether because of any applicable laws pertaining to
"election of remedies" or the like, each Credit Party hereby consents to such
action by Agent or such Lender and waives any claim based upon such action, even
if such action by Agent or such Lender shall result in a full or partial loss of
any rights of subrogation that each Credit Party might otherwise have had but
for such action by Agent or such Lender. Any election of remedies that results
in the denial or impairment of the right of Agent or any Lender to seek a
deficiency judgment against any Credit Parties shall not impair any other Credit
Party's obligation to pay the full amount of the Obligations. In the event Agent
or any Lender shall bid at any foreclosure or trustee's sale or at any private
sale permitted by law or the Loan Documents, Agent or such Lender may bid all or
less than the amount of the Obligations and the amount of such bid need not be
paid by Agent or such Lender but shall be credited against the Obligations. The
amount of the successful bid at any such sale, whether Agent, Lender or any
other party is the successful bidder, shall be conclusively deemed to be the
fair market value of the Collateral and the difference between such bid amount
and the remaining balance of the Obligations shall be conclusively deemed to be
the amount of the Obligations guaranteed under this Section 12, notwithstanding
that any present or future law or court decision or ruling may have the effect
of reducing the amount of any deficiency claim to which Agent or any Lender
might otherwise be entitled but for such bidding at any such sale.
12.6 Limitation. Notwithstanding any provision herein contained to
the contrary, each Credit Party's liability under this Section 12 (which
liability is in any event in addition to amounts for which such Credit Party is
primarily liable under Section 1) shall be limited to an amount not to exceed as
of any date of determination the greater of:
60
(a) the net amount of all Loans advanced to any other Credit Party
under this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Credit Party; and
(b) the amount that could be claimed by Agent and Lenders from such
Credit Party under this Section 12 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Credit Party's right of contribution and indemnification from each
other Credit Party under Section 12.7.
12.7 Contribution with Respect to Guaranty Obligations.
(a) To the extent that any Credit Party shall make a payment under
this Section 12 of all or any of the Obligations (other than Loans made to that
Credit Party for which it is primarily liable) (a "Guarantor Payment") that,
taking into account all other Guarantor Payments then previously or concurrently
made by any other Credit Party, exceeds the amount that such Credit Party would
otherwise have paid if each Credit Party had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such Credit
Party's "Allocable Amount" (as defined below) (as determined immediately prior
to such Guarantor Payment) bore to the aggregate Allocable Amounts of each of
the Credit Parties as determined immediately prior to the making of such
Guarantor Payment, then, following indefeasible payment in full in cash of the
Obligations and termination of the Commitments, such Credit Party shall be
entitled to receive contribution and indemnification payments from, and be
reimbursed by, each other Credit Party for the amount of such excess, pro rata
based upon their respective Allocable Amounts in effect immediately prior to
such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Credit Party shall be equal to the maximum amount of the claim that could then
be recovered from such Credit Party under this Section 12 without rendering such
claim voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy
Code or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law.
(c) This Section 12.7 is intended only to define the relative rights
of Credit Parties and nothing set forth in this Section 12.7 is intended to or
shall impair the obligations of Credit Parties, jointly and severally, to pay
any amounts as and when the same shall become due and payable in accordance with
the terms of this Agreement, including Section 12.1. Nothing contained in this
Section 12.7 shall limit the liability of any Credit Party to pay the Loans made
directly or indirectly to that Credit Party and accrued interest, Fees and
expenses with respect thereto for which such Credit Party shall be primarily
liable.
(d) The parties hereto acknowledge that the rights of contribution
and indemnification hereunder shall constitute assets of the Credit Party to
which such contribution and indemnification is owing.
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(e) The rights of the indemnifying Credit Parties against other
Credit Parties under this Section 12.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.
12.8 Liability Cumulative. The liability of Credit Parties under this
Section 12 is in addition to and shall be cumulative with all liabilities of
each Credit Party to Agent and Lenders under this Agreement and the other Loan
Documents to which such Credit Party is a party or in respect of any Obligations
or obligation of the other Credit Party, without any limitation as to amount,
unless the instrument or agreement evidencing or creating such other liability
specifically provides to the contrary.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
BORROWERS:
THERMADYNE INDUSTRIES, INC.
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
THERMAL DYNAMICS CORPORATION
By:/s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
TWECO PRODUCTS, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
XXXXXX EQUIPMENT COMPANY
By:/s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
[Signature Page to Credit Agreement ]
C & G SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
STOODY COMPANY
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
THERMAL ARC, INC.
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
THERMADYNE INTERNATIONAL CORP.
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
PROTIP CORPORATION
By: /s/ Xxxxx X. Xxxx
----------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
By: /s/ Xxxxx Xxxxxxxx
------------------------------------
Duly Authorized Signatory
[ Signature Page to Credit Agreement ]
The following Persons are signatories to this Agreement in their
capacity as Credit Parties and not as Borrowers.
THERMADYNE HOLDINGS CORPORATION
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
THERMADYNE RECEIVABLES, INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
MECO HOLDING COMPANY
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
C&G SYSTEMS HOLDING, INC.
By: /s/ Xxxxx X. Xxxx
---------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
[Signature Page to Credit Agreement]
The following Person is a signatory to this Agreement in its capacity
as a Credit Party solely with respect to Section 6 of this Agreement and not as
a Borrower.
THERMADYNE WELDING PRODUCTS CANADA LTD.
By: /s/ Xxxxx X. Xxxx
-----------------------------------
Name: Xxxxx X. Xxxx
Title: Senior Vice President and Chief
Financial Officer
[Signature Page to Credit Agreement]
ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
----------------
DEFINITIONS
-----------
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings, and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex F.
"Accounts" means all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper, or Instruments),
(including any such obligations that may be characterized as an account or
contract right under the Code), (b) all of each Credit Party's rights in, to and
under all purchase orders or receipts for goods or services, (c) all of each
Credit Party's rights to any goods represented by any of the foregoing
(including unpaid sellers' rights of rescission, replevin, reclamation and
stoppage in transit and rights to returned, reclaimed or repossessed goods), (d)
all rights to payment due to any Credit Party for property sold, leased,
licensed, assigned or otherwise disposed of, for a policy of insurance issued or
to be issued, for a secondary obligation incurred or to be incurred, for energy
provided or to be provided, for the use or hire of a vessel under a charter or
other contract, arising out of the use of a credit card or charge card, or for
services rendered or to be rendered by such Credit Party or in connection with
any other transaction (whether or not yet earned by performance on the part of
such Credit Party), (e) all health care insurance receivables and (f) all
collateral security of any kind, given by any Account Debtor or any other Person
with respect to any of the foregoing.
"Adjusted EBITDA" means, for any period, 100% of the EBITDA of
Holdings and its domestic Subsidiaries (excluding all Foreign Subsidiaries) and
65% of the EBITDA of Borrowers' Canadian Subsidiaries.
"Advance" means any Revolving Credit Advance or Swing Line Advance,
as the context may require.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 10% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrowers, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of any Borrower. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that neither Agent nor Lender shall be deemed to
be an Affiliate of the Credit Parties.
"Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 9.7.
"Agreement" means the Credit Agreement by and among Borrowers, the
other Credit Parties party thereto, GE Capital, as Agent and Lender and the
other Lenders from time to time party thereto, as the same may be amended,
supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable L/C Margin" means the per annum fee, from time to time in
effect, payable with respect to outstanding Letter of Credit Obligations as
determined by reference to Section 1.5(a).
"Applicable Margins" means collectively the Applicable L/C Margin,
the Applicable Unused Line Fee Margin, the Applicable Revolver Index Margin, and
the Applicable Revolver LIBOR Margin.
"Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Unused Line Fee Margin" means the per annum fee, from
time to time in effect, payable in respect of Borrowers' non-use of committed
funds pursuant to Section 1.7(b), which fee is determined by reference to
Section 1.5(a).
"Assignment Agreement" has the meaning ascribed to it in Section
9.1(a).
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. ss.ss.101 et seq.
"Bankruptcy Court" means, the United States Bankruptcy Court for the
Eastern District of Missouri, Eastern Division, having jurisdiction over the
Chapter 11 Cases, or if such court ceases to exercise jurisdiction over the
Chapter 11 Cases, such other court that exercises jurisdiction over the Chapter
11 Cases.
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"Borrower Representative" means Holdings in its capacity as Borrower
Representative pursuant to the provisions of Section 1.1(c).
"Borrowers" and "Borrower" have the respective meanings ascribed
thereto in the preamble to the Agreement.
"Borrowing Availability" means as of any date of determination, the
lesser of (i) the Maximum Amount and (ii) the Borrowing Base, in each case, less
the sum of the aggregate Revolving Loans and Swing Line Loans then outstanding,
less, in each case, Reserves established by Agent in its reasonable judgment.
"Borrowing Base" shall mean, as of the last day of any Fiscal Month,
an amount (which amount, if not a positive number, shall be deemed to be zero)
equal to the product obtained by multiplying (i) 1.50 times (ii) Adjusted EBITDA
for the trailing twelve months then ended. The Borrowing Base as of the Closing
Date shall be as set forth in the Borrowing Base Certificate delivered to Agent
on the Closing Date pursuant to Section 4.1(b).
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by each Borrower in the form attached to the
Agreement as Exhibit 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the State of
Illinois or New York and in reference to LIBOR Loans shall mean any such day
that is also a LIBOR Business Day.
"C & G" has the meaning ascribed thereto in the preamble to the
Agreement.
"C&G Holdings" has the meaning ascribed thereto in the recitals to
the Agreement.
"Canadian Subsidiary" means each Subsidiary of any Borrower organized
under the laws of Canada or any province of Canada.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto that have a useful life of
more than one year and that are required to be capitalized under GAAP, plus,
without duplication, cash investments in Foreign Subsidiaries.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
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"Cash Collateral Account" has the meaning ascribed to it Annex B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Management Systems" has the meaning ascribed to it in Section
1.6.
"Certificate of Exemption" has the meaning ascribed to it in Section
1.13(c).
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934),
other than Senior Note Holders, shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934) of 30% or more of the issued and
outstanding shares of capital Stock of Holdings having the right to vote for the
election of directors of Holdings under ordinary circumstances; (b) during any
period of twelve consecutive calendar months, individuals who at the beginning
of such period constituted the board of directors of Holdings (together with any
new directors whose election by the board of directors of Holdings or whose
nomination for election by the Stockholders of Holdings was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office; or (c) a
"Change of Control" as defined in the Senior Notes Agreement.
"Chapter 11 Cases" means, the cases under Chapter 11 of the
Bankruptcy Code commenced by, among others, the Borrowers, styled In re
Thermadyne Holdings Corporation, et al., Chapter 11 Case No. 00-00000-000,
Jointly Administered filed in the Bankruptcy Court.
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
"Chattel Paper" means any "chattel paper," as such term is defined in
the Code, including electronic chattel paper, now owned or hereafter acquired by
any Credit Party.
"Closing Date" means May 23, 2003.
"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex D.
"Code" means the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
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Code, the definition of such term contained in Article or Division 9 shall
govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security Agreement and
the other Collateral Documents and any other property, real or personal,
tangible or intangible, now existing or hereafter acquired, that may at any time
be or become subject to a security interest or Lien in favor of Agent, on behalf
of itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreement, the Pledge
Agreements, the Guaranties, the Patent Security Agreement, the Trademark
Security Agreement, and all similar agreements entered into guaranteeing payment
of, or granting a Lien upon property as security for payment of, the
Obligations.
"Collection Account" means that certain account of Agent, account
number 000-000-00 in the name of Agent at Deutsche Bank Trust Company Americas
in New York, New York ABA No. 021 001 033, or such other account as may be
specified in writing by Agent as the "Collection Account."
"Commitment Termination Date" means the earliest of (a) May 19, 2006,
(b) the date of termination of Lenders' obligations to make Advances and to
incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrowers of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of all Commitments to zero dollars ($0).
"Commitments" means (a) as to any Lender, such Lender's Revolving
Loan Commitment (including without duplication the Swing Line Lender's Swing
Line Commitment as a subset of its Revolving Loan Commitment) as set forth on
Annex I to the Agreement or in the most recent Assignment Agreement executed by
such Lender and (b) as to all Lenders, all Lenders' Revolving Loan Commitments
(including without duplication the Swing Line Lender's Swing Line Commitment as
a subset of its Revolving Loan Commitment), which commitment shall be Fifty
Million Dollars ($50,000,000) on the Closing Date, as to each of clauses (a) and
(b), as such Commitments may be reduced, amortized or adjusted from time to time
in accordance with the Agreement.
"Compliance Certificate" means a certificate to be executed and
delivered from time to time by Borrower Representative in the form attached to
the Agreement as Exhibit C.
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"Confirmation Order" means that the Confirmation Order filed in the
Bankruptcy Cases on April 3, 2003.
"Contracts" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"Control Letter" means a letter agreement between Agent and (i) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant limits any security interest in the applicable
financial assets in a manner reasonably satisfactory to Agent, acknowledges the
Lien of Agent, on behalf of itself and Lenders, on such financial assets, and
agrees to follow the instructions or entitlement orders of Agent without further
consent by the affected Credit Party.
"Copyright License" means rights under any written agreement now
owned or herein after acquired by any Credit Party granting any right to use any
Copyright.
"Copyright Security Agreements" means, the Copyright Security
Agreements made in favor of Agent, on behalf of Lenders, by each applicable
Credit Party.
"Copyrights" means all of the following now owned or hereafter
adopted or acquired by any Credit Party: (a) all copyrights and works of
authorship (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof. "Credit Parties" means Holdings,
Thermadyne Receivables, MECO Holdings, C&G Holdings, each Borrower, and each
domestic Subsidiary of a Borrower; provided that for purposes of Section 6 of
the Agreement, Thermadyne Welding Products Canada Ltd. shall also be a Credit
Party.
"Default" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
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"Deposit Accounts" means all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Credit Party.
"DIP Facility" has the meaning ascribed thereto in the Plan of
Reorganization.
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrowers and
denominated as Disclosure Schedules (1.4) through (6.7) in the Index to the
Agreement.
"Documents" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of
America.
"Dynamics" has the meaning ascribed thereto in the preamble to the
Agreement.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period determined in accordance with GAAP, minus (b) the sum of
(i) income tax credits, (ii) interest income, (iii) gain from extraordinary
items for such period, (iv) any aggregate net gain (but not any aggregate net
loss) during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (v) any other non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, plus (c) the sum of (i)
any provision for income taxes, (ii) Interest Expense (including commitment,
agency and letter of credit fees) and deferred financing costs, (iii)
depreciation and amortization for such period, (iv) amortized debt discount for
such period, (v) the amount of any deduction to consolidated net income as the
result of any grant to the management or employees of such Person or its
Subsidiaries of any Stock or stock options, in each case to the extent included
in the calculation of consolidated net income of such Person for such period in
accordance with GAAP, but without duplication, (vi) net periodic post retirement
benefits, (vii) losses from extraordinary items for such period, (viii) the
non-cash portion of any non-recurring expenses, (ix) restructuring expenses
related to, arising out of or in connection with the Chapter 11 Cases and (x)
any non-recurring employee severance expenses and non-recurring cash expenses
related to plant reorganizations, not to exceed $5,000,000 in the aggregate,
plus or minus as applicable (d) the amount of cash received or expended in such
period in respect of any amount which, under clauses (b)(v) and (c)(viii) above,
was taken into account in determining EBITDA for such period or any prior
period. For purposes of this definition, the following items shall be excluded
in determining consolidated net income of a Person: (1) the income (or deficit)
of any other Person accrued prior to the date it became a Subsidiary of, or was
merged or consolidated into, such Person or any of such Person's Subsidiaries;
(2) the income (or deficit) of any other Person (other than a Subsidiary) in
which such Person has an ownership interest, except to the extent any such
income has actually been received by such Person in the form of cash dividends
or distributions; (3) the undistributed earnings of any Subsidiary of such
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Person to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary is not at the time permitted by the terms of
any contractual obligation or requirement of law applicable to such Subsidiary;
(4) any restoration to income of any contingency reserve, except to the extent
that provision for such reserve was made out of income accrued during such
period; (5) any write-up of any asset; (6) any net gain from the collection of
the proceeds of life insurance policies; (7) any net gain arising from the
acquisition of any securities, or the extinguishment, under GAAP, of any
Indebtedness, of such Person; (8) in the case of a successor to such Person by
consolidation or merger or as a transferee of its assets, any earnings of such
successor prior to such consolidation, merger or transfer of assets; and (9) any
deferred credit representing the excess of equity in any Subsidiary of such
Person at the date of acquisition of such Subsidiary over the cost to such
Person of the investment in such Subsidiary.
"EBITDA Reserves" has the meaning ascribed to such term in Section
1.1(a)(iv).
"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any applicable judicial or administrative
interpretation thereof, including any applicable judicial or administrative
order, consent decree, order or judgment, imposing liability or standards of
conduct for or relating to the regulation and protection of the environment and
natural resources (including ambient air, surface water, groundwater, wetlands,
land surface or subsurface strata, wildlife, aquatic species and vegetation) or
human health and safety as it relates to environmental protection. Environmental
Laws include any applicable provision of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (42 U.S.C.ss.ss.9601 et seq.)
("CERCLA"); the Hazardous Materials Transportation Authorization Act of 1994 (49
U.S.C.ss.ss.5101 et seq.); the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C.ss.ss.136 et seq.); the Solid Waste Disposal Act (42 X.X.X.xx.xx.
6901 et seq.); the Toxic Substance Control Act (15 U.S.C.ss.ss.2601 et seq.);
the Clean Air Act (42 U.S.C.ss.ss.7401 et seq.); the Federal Water Pollution
Control Act (33 U.S.C.ss.ss.1251 et seq.); and the Safe Drinking Water Act (42
X.X.X.xx.xx. 300(f) et seq.), and any and all applicable regulations promulgated
thereunder, and all applicable analogous state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes.
"Environmental Liabilities" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person arising under or related to any Environmental Laws, Environmental
Permits, or in connection with any Release of a Hazardous Material at, on, in,
under, to or from any real or personal property whether based in contract, tort,
implied or express warranty, strict liability, criminal or civil statute or
common law.
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"Environmental Permits" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any applicable regulations promulgated
thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any Person
that, together with such Credit Party, are treated as a single employer within
the meaning of Sections 414(b), (c), (m) or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) with respect to a Title IV Plan, any event described in Section
4043(c) of ERISA for which notice to the PBGC has not been waived; (b) the
withdrawal of any Credit Party or ERISA Affiliate from a Title IV Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial
withdrawal of any Credit Party or any ERISA Affiliate from any Multiemployer
Plan; (d) the filing of a notice of intent to terminate a Title IV Plan in a
distress termination described in Section 4041(c) of ERISA or the treatment of a
plan amendment as a termination under Section 4041 of ERISA; (e) the institution
of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(f) with respect to a Title IV Plan, the existence of an "accumulated funding
deficiency" (as defined in Section 412 of the IRC or Section 302 of ERISA)
whether or not waived, or the failure to make by its due date a required
installment under Section 412(m) of the Code or the failure to make any required
contribution to a Multiemployer Plan; (g) the filing pursuant to Section 412(d)
of the Code or Section 303(d) of ERISA of an application for a waiver of the
minimum funding standard with respect to a Title IV Plan; (h) the making of any
amendment to any Title IV Plan which could result in the imposition of a lien or
the posting of a bond or other security; (i) with respect to a Title IV Plan an
event described in Section 4062(e) of ERISA; (j) any other event or condition
that would reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or for the imposition of liability under
Section 4069 or 4212(c) of ERISA; (k) the termination of a Multiemployer Plan
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under Section 4041A of ERISA or the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA; or (l) the loss of a
Qualified Plan's qualification or tax exempt status.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Excess Cash Flow" has the meaning ascribed to it in the Senior Notes
Agreement as in effect on the date hereof.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent or any Lender pursuant
to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in
Annex F.
"Financial Statements" means the consolidated and consolidating
income statements and balance sheets and consolidated statements of cash flows
of Holdings and its Subsidiaries delivered in accordance with Section 3.4(a) and
Annex E (subsections (a) and (c) only).
"Fiscal Month" means any of the monthly accounting periods of
Borrowers.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrowers, ending on March 31, June 30, September 30 and December 31 of each
year.
"Fiscal Year" means any of the annual accounting periods of Borrowers
ending on December 31st of each year.
"Fixed Charges" means, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or accrued (without
duplication) during such period (less any interest income received in cash
during such period), plus (b) scheduled payments of principal with respect to
Indebtedness during such period, plus (c) Capital Expenditures during such
period (other than that portion of such Capital Expenditures financed by lenders
other than the Lenders hereunder), plus (d) income taxes paid or currently
payable in cash with respect to such fiscal period. For purposes of calculating
Fixed Charges for periods ending on or prior to March 31, 2004, the Interest
Expense component of Fixed Charges shall be annualized by multiplying Interest
Expense for the period of July 1, 2003 through September 30, 2003 by 3,
multiplying Interest Expense for the period of July 1, 2003 through December 31,
2003 by 2 and multiplying Interest Expense for the period of July 1, 2003
through March 31, 2004 by 1.333.
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"Fixed Charge Coverage Ratio" means, with respect to any Person for
any fiscal period, the ratio of EBITDA to Fixed Charges.
"Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"Foreign Lender" has the meaning ascribed to it in Section 1.13(c).
"Foreign Subsidiary" shall mean a Subsidiary created or organized
outside the United States or under the law of a jurisdiction other than the
United States or any political subdivision thereof.
"Funded Debt" means, with respect to any Person, without duplication,
all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness, and specifically including Capital Lease
Obligations, revolving credit and short-term debt, and also including, in the
case of Borrowers, the Obligations and, without duplication, Guaranteed
Indebtedness consisting of guaranties of Funded Debt of other Persons.
"GAAP" means generally accepted accounting principles in the United
States of America consistently applied, as such term is further defined in Annex
F to the Agreement.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"GE Capital Fee Letter" means that certain letter, dated as of
January 30, 2003 between GE Capital and Holdings with respect to certain Fees to
be paid from time to time by Borrowers to GE Capital.
"General Intangibles" means all "general intangibles," as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), uncertificated securities, choses in action, deposit, checking and
other bank accounts, rights to receive tax refunds and other payments, rights to
receive dividends, distributions, cash, Instruments and other property in
respect of or in exchange for pledged Stock and Investment Property, rights of
indemnification, all books and records, correspondence, credit files, invoices
and other papers, including without limitation all tapes, cards, computer runs
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and other papers and documents in the possession or under the control of such
Credit Party or any computer bureau or service company from time to time acting
for such Credit Party.
"Goods" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the Code, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" means as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means any guaranty executed by any Guarantor in favor of
Agent and Lenders in respect of the Obligations.
"Guarantors" means each Person, if any, that executes a guaranty or
other similar agreement in favor of Agent, for itself and the ratable benefit of
Lenders, in connection with the transactions contemplated by the Agreement and
the other Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated as hazardous, toxic, pollutant, or words of similar meaning or effect,
under any Environmental Laws, including any material or substance that is (a)
defined as a "solid waste," "hazardous waste," "hazardous material," "hazardous
substance," "extremely hazardous waste," "restricted hazardous waste,"
"pollutant," "contaminant," "hazardous constituent," "special waste," "toxic
substance" or other similar term or phrase under any Environmental Laws, or (b)
petroleum or any fraction or by-product thereof, asbestos, polychlorinated
biphenyls (PCB's), or any radioactive substance.
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"Holdings" has the meaning ascribed thereto in the recitals to the
Agreement.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property payment for which is deferred 6 months or
more, but excluding obligations to trade creditors incurred in the ordinary
course of business that are unsecured and not overdue by more than 6 months
unless being contested in good faith, (b) all reimbursement and other
obligations with respect to letters of credit, bankers' acceptances and surety
bonds, whether or not matured, (c) all obligations evidenced by notes, bonds,
debentures or similar instruments, (d) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of such Person
under commodity purchase or option agreements or other commodity price hedging
arrangements, in each case whether contingent or matured, (g) all obligations of
such Person under any foreign exchange contract, currency swap agreement,
interest rate swap, cap or collar agreement or other similar agreement or
arrangement designed to alter the risks of that Person arising from fluctuations
in currency values or interest rates, in each case whether contingent or
matured, (h) all Indebtedness referred to above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien upon or in property or other assets (including accounts
and contract rights) owned by such Person, even though such Person has not
assumed or become liable for the payment of such Indebtedness, and (i) the
Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section
1.11(a).
"Indemnified Person" has the meaning ascribed to in Section 1.11.
"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "prime rate" (or, if The Wall Street Journal ceases quoting a prime rate,
the highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus 50 basis points per annum. Each change in any interest rate
provided for in the Agreement based upon the Index Rate shall take effect at the
time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"Industries" has the meaning ascribed thereto in the preamble to the
Agreement.
"Instruments" means all "instruments," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificated securities, all certificates of
deposit, and all promissory notes and other evidences of indebtedness, other
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than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intercreditor Agreement" means the Intercreditor Agreement dated as
of the Closing Date between Agent, Borrower Representative and Deutsche Bank
Trust Company Americas as agent for the holders of the Senior Notes.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
without duplication, interest expense with respect to any Funded Debt of such
Person and interest expense for the relevant period that has been capitalized on
the balance sheet of such Person.
"Interest Payment Date" means (a) as to any Index Rate Loan, the
first Business Day of each month to occur while such Loan is outstanding, and
(b) as to any LIBOR Loan, the last day of the applicable LIBOR Period provided
that, in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full and (y)
the Commitment Termination Date shall be deemed to be an "Interest Payment Date"
with respect to any interest that has then accrued under the Agreement.
"International" has the meaning ascribed thereto in the preamble to
the Agreement.
"Inventory" means all "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including all supplies
and embedded software.
"Investment Property" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
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"IRC" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service.
"Joint Account" has the meaning ascribed to it in Annex C.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Lenders" means GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any assignee of such
Lender.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower Representative, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of Letters of Credit by Agent or another L/C Issuer or the purchase
of a participation as set forth in Annex B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of any Borrower by any L/C Issuer, and bankers'
acceptances issued by any Borrower, for which Agent and Lenders have incurred
Letter of Credit Obligations.
"Letter-of-Credit Rights" means "letter-of-credit rights" as such
term is defined in the Code, now owned or hereafter acquired by any Credit
Party, including rights to payment or performance under a letter of credit,
whether or not such Credit Party, as beneficiary, has demanded or is entitled to
demand payment or performance.
"Leverage Ratio" means, with respect to Holdings and its
Subsidiaries, on a consolidated basis, the ratio of (a) Funded Debt (less all
cash and cash equivalents on hand) as of any date of determination (including
the average daily closing balance of the Revolving Loan for the thirty (30) days
preceding and including any date of determination), to (b) EBITDA for the twelve
months ending on that date of determination.
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing
interest by reference to the LIBOR Rate.
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"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower Representative pursuant
to the Agreement and ending one, two or three months thereafter, as selected by
Borrower Representative's irrevocable notice to Agent as set forth in Section
1.5(e); provided that the foregoing provision relating to LIBOR Periods is
subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next succeeding
LIBOR Business Day unless the result of such extension would be to carry such
LIBOR Period into another calendar month in which event such LIBOR Period shall
end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the
Commitment Termination Date shall end two (2) LIBOR Business Days prior to such
date;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such LIBOR Period) shall end on the last
LIBOR Business Day of a calendar month;
(d) Borrower Representative shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan; and
(e) Borrower Representative shall select LIBOR Periods so that there
shall be no more than seven (7) separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the first
day of such LIBOR Period (unless such date is not a Business Day, in which event
the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic, supplemental, marginal and
emergency reserves under any regulations of the Federal Reserve Board or other
Governmental Authority having jurisdiction with respect thereto, as now and from
time to time in effect) for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of the Federal Reserve Board) that
are required to be maintained by a member bank of the Federal Reserve System.
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If such interest rates shall cease to be available from
Telerate News Service (or its successor satisfactory to Agent), the LIBOR Rate
shall be determined from such financial reporting service or other information
as shall be mutually acceptable to Agent and Borrower Representative.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
deposit arrangement, lien, charge, claim, security interest, easement or
encumbrance, or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any lease or title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of, or agreement to give, any
financing statement perfecting a security interest under the Code or comparable
law of any jurisdiction).
"Litigation" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.10.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the Master Standby Agreement, and all other agreements, instruments,
documents and certificates identified in the Closing Checklist executed and
delivered to, or in favor of, Agent or any Lenders and including all other
pledges, powers of attorney, consents, assignments, contracts, notices, letter
of credit agreements and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Credit Party, or any employee of any
Credit Party, and delivered to Agent or any Lender in connection with the
Agreement or the transactions contemplated thereby. Any reference in the
Agreement or any other Loan Document to a Loan Document shall include all
appendices, exhibits or schedules thereto, and all amendments, restatements,
supplements or other modifications thereto, and shall refer to the Agreement or
such Loan Document as the same may be in effect at any and all times such
reference becomes operative.
"Loans" means the Revolving Loan and the Swing Line Loan.
"Loan Year" means each succeeding period of twelve consecutive months
ending on an anniversary of the Closing Date.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Master Disbursement Account" has the meaning ascribed to it in Annex
C.
"Master Standby Agreement" means the Master Agreement for Standby
Letters of Credit dated as of the Closing Date among Borrowers, as Applicant(s),
and GE Capital, as issuer.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of the
Credit Parties considered as a whole (except, with regard to periods prior to
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the Closing Date, for matters relating to the Chapter 11 Cases and related
proceedings), (b) any Borrower's ability to pay any of the Loans or any of the
other Obligations in accordance with the terms of the Agreement, (c) the
Collateral or Agent's Liens, on behalf of itself and Lenders, on the Collateral
or the priority of such Liens, or (d) Agent's or any Lender's rights and
remedies under the Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, any event or occurrence adverse to one or more
Credit Parties which results or could reasonably be expected to result in
losses, costs, damages, liabilities or expenditures in excess of $ 10,000,000
shall constitute a Material Adverse Effect.
"Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.
"MECO Holdings" has the meaning ascribed thereto in the recitals to
the Agreement.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Sections 3(37) or 4001(a)(3) of ERISA, and to which any Credit Party or ERISA
Affiliate has or has had any obligation or liability, contingent or otherwise,
is making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Notes" means, collectively, the Revolving Notes, and the Swing Line
Notes.
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it
in Section 1.1(a).
"Obligations" means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement, letter of credit agreement or other instrument, arising
under the Agreement or any of the other Loan Documents. This term includes all
principal, interest (including all interest that accrues after the commencement
of any case or proceeding by or against any Credit Party in bankruptcy, whether
or not allowed in such case or proceeding), Fees, hedging obligations under
swaps, caps and collar arrangements provided by any Lender, expenses, attorneys'
fees and any other sum chargeable to any Credit Party under the Agreement or any
of the other Loan Documents.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
A-18
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Overadvance" has the meaning ascribed to it in Section 1.1(a)(iii).
"Patent License" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right with respect to any
invention that is claimed in an existing Patent.
"Patent Security Agreements" means the Patent Security Agreements
made in favor of Agent, on behalf of itself and Lenders, by each applicable
Credit Party.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or of any other country, all registrations and recordings thereof, and
all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States or any other country, and (b) all reissues, continuations,
continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d) inchoate and unperfected workers', mechanics'
or similar liens arising in the ordinary course of business, so long as such
Liens attach only to Equipment, Fixtures and/or Real Estate; (e) carriers',
warehousemen's, suppliers' or other similar possessory liens arising in the
ordinary course of business; (f) deposits securing, or in lieu of, surety,
appeal or customs bonds in proceedings to which any Credit Party is a party; (g)
any attachment or judgment lien not constituting an Event of Default under
Section 8.1(j); (h) zoning restrictions, easements, licenses, or other
restrictions on the use of any Real Estate or other minor irregularities in
title (including leasehold title) thereto, so long as the same do not materially
impair the use, value, or marketability of such Real Estate; (i) presently
existing or hereafter created Liens in favor of Agent, on behalf of Lenders; (j)
Liens expressly permitted under clauses (b) and (c) of Section 6.7 of the
Agreement; including, without limitation, the Liens securing the Senior Notes;
and (k) customary Liens and set-off rights in favor of banks maintaining
accounts for the Credit Parties.
"Person" means any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).
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"Petition Date" means, November 19, 2001.
"Plan" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate has or has had
any obligation or liability, contingent or otherwise, maintains, contributes to
or has an obligation to contribute to or has maintained, contributed to or had
an obligation to contribute to at any time within the past 7 years on behalf of
participants who are or were employed by any Credit Party or ERISA Affiliate.
"Plan of Reorganization" means, that certain First Amended and
Restated Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code
dated January 17, 2003, filed in the Chapter 11 Cases including the First
Amended and Restated Disclosure Statement filed in conjunction therewith.
"Pledge Agreements" means Pledge Agreements by Holdings and each
Borrower, pledging to Agent 100% of the Stock of all of their domestic
Subsidiaries (other than Thermadyne Cylinder Co.) and 100% of the non-voting
Stock and 65% of the voting Stock of all Foreign Subsidiaries directly owned by
a domestic Credit Party and any pledge agreements entered into after the Closing
Date by any Credit Party (as required by the Agreement of any other Loan
Document).
"Postpetition" means the time period immediately following the filing
of the Chapter 11 Cases.
"Prepetition" means, the time period ending immediately prior to the
filing of the Chapter 11 Cases.
"Proceeds" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral.
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"Pro Forma" means the unaudited consolidated balance sheet of
Holdings and its Subsidiaries as of April 30, 2003 after giving pro forma effect
to the Related Transactions.
"Projections" means Holdings' and its Subsidiaries' projections as
described in Section 3.4(c) hereto.
"Pro Rata Share" means with respect to all matters relating to any
Lender, (a) the percentage obtained by dividing (i) the aggregate Commitments of
that Lender by (ii) the aggregate Commitments of all Lenders, and (b) with
respect to all Loans on and after the Commitment Termination Date, the
percentage obtained by dividing (i) the aggregate outstanding principal balance
of the Loans held by that Lender, by (ii) the outstanding principal balance of
the Loans held by all Lenders.
"ProTip" has the meaning ascribed thereto in the preamble to the
Agreement.
"Qualified Plan" means a Plan that is intended to be tax-qualified
under Section 401(a) of the IRC.
"Qualified Assignee" means (a) any Lender, any Affiliate of any
Lender and, with respect to any Lender that is an investment fund that invests
in commercial loans, any other investment fund that invests in commercial loans
and that is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor, and (b) any commercial bank, savings
and loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Xxxxx'x at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrowers
without the imposition of any withholding or similar taxes; provided that no
Person proposed to become a Lender after the Closing Date and determined by
Agent to be acting in the capacity of a vulture fund or distressed debt
purchaser shall be a Qualified Assignee, and no Person or Affiliate of such
Person proposed to become a Lender after the Closing Date and that holds
Subordinated Debt or Stock issued by any Credit Party shall be a Qualified
Assignee.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Refinancing" means the repayment in full by Borrowers of the DIP
Facility on the Closing Date.
"Refunded Swing Line Loan" has the meaning ascribed to it in Section
1.1(b)(iii).
"Related Transactions" means the initial borrowing under the
Revolving Loan on the Closing Date, the Refinancing, the issuance of the Senior
Notes, the payment of all fees, costs and expenses associated with all of the
foregoing and the execution and delivery of all of the Related Transactions
Documents.
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"Related Transactions Documents" means the Loan Documents and the
Senior Notes and all other agreements or instruments executed in connection with
the Related Transactions.
"Relationship Bank" has the meaning ascribed to it in Annex C.
"Release" means any release, spill, emission, leaking, pumping,
pouring, emitting, emptying, escape, injection, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Material in the
environment, including the movement of Hazardous Material through or in the air,
soil, surface water, ground water or property.
"Requisite Lenders" means Lenders having (a) more than 66 2/3% of the
Commitments of all Lenders, or (b) if the Commitments have been terminated, more
than 66 2/3% of the aggregate outstanding amount of all Loans; provided that so
long as there are only two Lenders, Requisite Lenders shall mean all Lenders.
"Reserves" means (a) reserves established by Agent from time to time
against Borrowing Availability pursuant to Section 5.9, (b) reserves established
pursuant to Section 5.4(b), and (c) such other reserves against Borrowing
Availability that Agent may, in its reasonable credit judgment, establish from
time to time. Without limiting the generality of the foregoing, Reserves
established to ensure the payment of accrued Interest Expenses and EBITDA
Reserves shall be deemed to be a reasonable exercise of Agent's credit judgment.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt; (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit
Party now or hereafter outstanding; (e) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any shares of such Credit Party's Stock or of a claim for
reimbursement, indemnification or contribution arising out of or related to any
such claim for damages or rescission; (f) any payment, loan, contribution, or
other transfer of funds or other property to any Stockholder of such Credit
Party other than payment of compensation in the ordinary course of business to
Stockholders who are employees of such Person; and (g) any payment of management
fees (or other fees of a similar nature) by such Credit Party to any Stockholder
of such Credit Party or its Affiliates.
"Retiree Welfare Plan" means, at any time, a Plan that is a welfare
plan (within the meaning of Section 3(1) of ERISA) and that provides for
continuing coverage or benefits for any participant or any beneficiary of a
participant after the last day of the calendar month following such
participant's termination of employment, other than continuation coverage
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provided pursuant to Section 4980B of the IRC or other similar state law and at
the sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a)(i).
"Revolving Lenders" means, as of any date of determination, Lenders
having a Revolving Loan Commitment.
"Revolving Loan" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrower plus (ii) the
aggregate Letter of Credit Obligations incurred on behalf of Borrower. Unless
the context otherwise requires, references to the outstanding principal balance
of the Revolving Loan shall include the outstanding balance of Letter of Credit
Obligations.
"Revolving Loan Commitment" means (a) as to any Lender, the aggregate
commitment of such Lender to make Revolving Credit Advances or incur Letter of
Credit Obligations as set forth on Annex I to the Agreement or in the most
recent Assignment Agreement executed by such Lender, and (b) as to all Lenders,
the aggregate commitment of all Lenders to make Revolving Credit Advances or
incur Letter of Credit Obligations, which aggregate commitment shall be Fifty
Million Dollars ($50,000,000) on the Closing Date, as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in Section
1.1(a)(ii).
"Security Agreement" means the Security Agreement of even date
herewith entered into by and among Agent, on behalf of itself and Lenders, and
each Credit Party that is a signatory thereto.
"Senior Notes" means the senior notes issued by Holdings and
guaranteed by other Credit Parties pursuant to the Plan of Reorganization in an
aggregate principal amount not to exceed $203,000,000, as the same may be
amended, supplemented, restated or otherwise modified from time to time.
"Senior Notes Agreement" means that certain Restated Credit and
Guaranty Agreement dated as of the date hereof among Holdings, the guarantors
referred to therein, the new term lenders referred to therein and Deutsche Bank
Trust Company Americas.
"Software" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of Goods, including all computer programs and all
supporting information provided in connection with a transaction related to any
program.
"Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
A-23
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of Stock
of such Person.
"Stoody" has the meaning ascribed thereto in the preamble to the
Agreement.
"Subordinated Debt" means any Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
"Subsidiary" means, with respect to any Person, (a) any corporation
of which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.
"Supermajority Revolving Lenders" means Lenders having (a) 80% or
more of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving
Loan Commitments have been terminated, 80% or more of the aggregate outstanding
amount of the Revolving Loan (with the Swing Line Loan being attributed to the
Lender making such Loan) and Letter of Credit Obligations; provided that so long
as there are only two Lenders, Supermajority Revolving Lenders shall mean all
Lenders.
A-24
"Supporting Obligations" means all "supporting obligations" as such
term is defined in the Code, including letters of credit and guaranties issued
in support of Accounts, Chattel Paper, Documents, General Intangibles,
Instruments, or Investment Property.
"Swing Line Advance" has the meaning ascribed to it in Section
1.1(b)(i).
"Swing Line Availability" has the meaning ascribed to it in Section
1.1(b)(i).
"Swing Line Commitment" means, as to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Advances as set forth on
Annex I to the Agreement, which commitment constitutes a subfacility of the
Revolving Loan Commitment of the Swing Line Lender.
"Swing Line Lender" means GE Capital.
"Swing Line Loan" means, as the context may require, at any time, the
aggregate amount of Swing Line Advances outstanding to any Borrower or to all
Borrowers.
"Swing Line Note" has the meaning ascribed to it in Section
1.1(b)(ii).
"Taxes" means taxes, levies, imposts, deductions, charges or
withholdings imposed by any Governmental Authority, and all liabilities with
respect thereto, excluding franchise taxes and taxes imposed on or measured by
the net income or overall gross receipts of Agent or a Lender or an L/C Issuer
or similar taxes imposed on Agent or a Lender or an L/C Issuer by the
jurisdictions under the laws of which such Agent or such Lender or such L/C
Issuer, as applicable, is organized, conducts business or has a present or
former connection or any political subdivision thereof.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged (c) all Letter of
Credit Obligations have been cash collateralized, canceled or backed by standby
letters of credit in accordance with Annex B, and (d) none of Borrowers shall
have any further right to borrow any monies under the Agreement.
"Thermadyne Receivables" has the meaning ascribed thereto in the
recitals to the Agreement.
"Thermal Arc" has the meaning ascribed thereto in the preamble to the
Agreement.
"Title IV Plan" means a Plan (other than a Multiemployer Plan), that
is subject to Title IV of ERISA or Section 412 of the IRC.
"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of Lenders, by each applicable
Credit Party.
A-25
"Trademark License" means rights under any written agreement now
owned or hereafter acquired by any Credit Party granting any right to use any
Trademark.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, trade dress, service
marks, logos, and other source or business identifiers (whether registered or
unregistered), all registrations and recordings thereof, and all applications in
connection therewith, including registrations, recordings and applications in
the United States Patent and Trademark Office or in any similar office or agency
of the United States, any state or territory thereof, or any other country or
any political subdivision thereof; (b) all reissues, extensions or renewals
thereof; and (c) all goodwill associated with or symbolized by any of the
foregoing.
"Tweco" has the meaning ascribed thereto in the preamble to the
Agreement.
"Tweco Mexico" has the meaning ascribed to it in Section 5.9.
"Unfunded Pension Liability" means, at any time, the aggregate
amount, if any, of the sum of (a) the amount by which the present value of all
accrued benefits under each Title IV Plan exceeds the fair market value of all
assets of such Title IV Plan allocable to such benefits in accordance with Title
IV of ERISA, all determined as of the most recent valuation date for each such
Title IV Plan using the actuarial assumptions for funding purposes in effect
under such Title IV Plan, and (b) for a period of five (5) years following a
transaction which might reasonably be expected to be covered by Section 4069 of
ERISA, the liabilities (whether or not accrued) that could be avoided by any
Credit Party or any ERISA Affiliate as a result of such transaction.
"U.S. Lender" has the meaning ascribed to it in Section 1.13(c).
"Xxxxxx" has the meaning ascribed thereto in the preamble to the
Agreement.
"Xxxxxx Mexico" has the meaning ascribed to it in Section 5.9.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex F. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code to the
extent the same are used or defined therein; in the event that any term is
defined differently in different Articles or Divisions of the Code, the
definition contained in Article or Division 9 shall control. Unless otherwise
specified, references in the Agreement or any of the Appendices to a Section,
subsection or clause refer to such Section, subsection or clause as contained in
the Agreement. The words "herein," "hereof" and "hereunder" and other words of
similar import refer to the Agreement as a whole, including all Annexes,
Exhibits and Schedules, as the same may from time to time be amended, restated,
modified or supplemented, and not to any particular section, subsection or
clause contained in the Agreement or any such Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
A-26
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations.
A-27
ANNEX B (SECTION 1.2)
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TO
CREDIT AGREEMENT
----------------
LETTERS OF CREDIT
-----------------
(a) Issuance. Subject to the terms and conditions of the Agreement,
Agent and Revolving Lenders agree to incur, from time to time prior to the
Commitment Termination Date, upon the request of Borrower Representative on
behalf of the applicable Borrower and for such Borrower's account, Letter of
Credit Obligations by causing Letters of Credit to be issued by GE Capital or a
Subsidiary thereof or a bank or other legally authorized Person selected by or
acceptable to Agent in its sole discretion (each, an "L/C Issuer") for such
Borrower's account and guaranteed by Agent; provided that if the L/C Issuer is a
Revolving Lender, then such Letters of Credit shall not be guaranteed by Agent
but rather each Revolving Lender shall, subject to the terms and conditions
hereinafter set forth, purchase (or be deemed to have purchased) risk
participations in all such Letters of Credit issued with the written consent of
Agent, as more fully described in paragraph (b)(ii) below. The aggregate amount
of all such Letter of Credit Obligations shall not at any time exceed the least
of (i) Twenty Million Dollars ($20,000,000) (the "L/C Sublimit") and (ii) the
Maximum Amount less the aggregate outstanding principal balance of the Revolving
Credit Advances and the Swing Line Loan, and (iii) the Borrowing Base less the
aggregate outstanding principal balance of the Revolving Credit Advances and the
Swing Line Loan. No such Letter of Credit shall have an expiry date that is more
than one year following the date of issuance thereof, unless otherwise
determined by the Agent, in its sole discretion (including with respect to
customary evergreen provisions), and neither Agent nor Revolving Lenders shall
be under any obligation to incur Letter of Credit Obligations in respect of, or
purchase risk participations in, any Letter of Credit having an expiry date that
is later than the Commitment Termination Date.
(b) (i) Advances Automatic; Participations. In the event that Agent
or any Revolving Lender shall make any payment on or pursuant to any Letter of
Credit Obligation, such payment shall then be deemed automatically to constitute
a Revolving Credit Advance to the applicable Borrower under Section 1.1(a) of
the Agreement regardless of whether an Event of Default has occurred and is
continuing and notwithstanding any Borrower's failure to satisfy the conditions
precedent set forth in Section 2, and each Revolving Lender shall be obligated
to pay its Pro Rata Share thereof in accordance with the Agreement. The failure
of any Revolving Lender to make available to Agent for Agent's own account its
Pro Rata Share of any such Revolving Credit Advance or payment by Agent under or
in respect of a Letter of Credit shall not relieve any other Revolving Lender of
its obligation hereunder to make available to Agent its Pro Rata Share thereof,
but no Revolving Lender shall be responsible for the failure of any other
Revolving Lender to make available such other Revolving Lender's Pro Rata Share
of any such payment.
(ii) If it shall be illegal or unlawful for any Borrower to
incur Revolving Credit Advances as contemplated by paragraph (b)(i) above
because of an Event of Default described in Sections 8.1(h) or (i) or otherwise
or if it shall be illegal or unlawful for any Revolving Lender to be deemed to
have assumed a ratable share of the reimbursement obligations owed to an L/C
Issuer, or if the L/C Issuer is a Revolving Lender, then (A) immediately and
without further action whatsoever, each Revolving Lender shall be deemed to have
irrevocably and unconditionally purchased from Agent (or such L/C Issuer, as the
case may be) an undivided interest and participation equal to such Revolving
Lender's Pro Rata Share (based on the Revolving Loan Commitments) of the Letter
of Credit Obligations in respect of all Letters of Credit then outstanding and
(B) thereafter, immediately upon issuance of any Letter of Credit, each
Revolving Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation in such Revolving Lender's Pro Rata Share (based on
the Revolving Loan Commitments) of the Letter of Credit Obligations with respect
to such Letter of Credit on the date of such issuance. Each Revolving Lender
shall fund its participation in all payments or disbursements made under the
Letters of Credit in the same manner as provided in the Agreement with respect
to Revolving Credit Advances.
(c) Cash Collateral.
(i) If Borrowers are required to provide cash collateral for any
Letter of Credit Obligations pursuant to the Agreement, including Section 8.2 of
the Agreement, prior to the Commitment Termination Date, each Borrower will pay
to Agent for the ratable benefit of itself and Revolving Lenders cash or cash
equivalents acceptable to Agent ("Cash Equivalents") in an amount equal to 105%
of the maximum amount then available to be drawn under each applicable Letter of
Credit outstanding for the benefit of such Borrower. Such funds or Cash
Equivalents shall be held by Agent in a cash collateral account (the "Cash
Collateral Account") maintained at a bank or financial institution acceptable to
Agent. The Cash Collateral Account shall be in the name of the applicable
Borrower and shall be pledged to, and subject to the control of, Agent, for the
benefit of Agent and Lenders, in a manner satisfactory to Agent. Each Borrower
hereby pledges and grants to Agent, on behalf of itself and Lenders, a security
interest in all such funds and Cash Equivalents held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all amounts due in respect of the Letter of Credit Obligations and other
Obligations, whether or not then due. The Agreement, including this Annex B,
shall constitute a security agreement under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then
due and payable, shall for any reason be outstanding on the Commitment
Termination Date, Borrowers shall either (A) provide cash collateral therefor in
the manner described above, or (B) cause all such Letters of Credit and
guaranties thereof, if any, to be canceled and returned, or (C) deliver a
stand-by letter (or letters) of credit in guaranty of such Letter of Credit
Obligations, which stand-by letter (or letters) of credit shall be of like tenor
and duration (plus thirty (30) additional days) as, and in an amount equal to
105% of, the aggregate maximum amount then available to be drawn under, the
Letters of Credit to which such outstanding Letter of Credit Obligations relate
and shall be issued by a Person, and shall be subject to such terms and
conditions, as are be satisfactory to Agent in its reasonable discretion.
(iii) From time to time after funds are deposited in the Cash
Collateral Account by any Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, and in such order as
B-2
Agent may elect, as shall be or shall become due and payable by such Borrower to
Agent and Lenders with respect to such Letter of Credit Obligations of such
Borrower and, upon the satisfaction in full of all Letter of Credit Obligations
of such Borrower, to any other Obligations of any Borrower then due and payable.
(iv) No Borrower nor any Person claiming on behalf of or through
any Borrower shall have any right to withdraw any of the funds or Cash
Equivalents held in the Cash Collateral Account, except that upon the
termination of all Letter of Credit Obligations and the payment of all amounts
payable by Borrowers to Agent and Lenders in respect thereof, any funds
remaining in the Cash Collateral Account shall be applied to other Obligations
then due and owing and upon payment in full of such Obligations, any remaining
amount shall be paid to Borrowers or as otherwise required by law. Interest
earned on deposits in the Cash Collateral Account shall be held as additional
collateral.
(d) Fees and Expenses. Borrowers agree to pay to Agent for the
benefit of Revolving Lenders, as compensation to such Lenders for Letter of
Credit Obligations incurred hereunder, (i) all costs and expenses incurred by
Agent or any Lender on account of such Letter of Credit Obligations, and (ii)
for each month during which any Letter of Credit Obligation shall remain
outstanding, a fee (the "Letter of Credit Fee") in an amount equal to the
Applicable L/C Margin from time to time in effect multiplied by the maximum
amount available from time to time to be drawn under the applicable Letter of
Credit. Such fee shall be paid to Agent for the benefit of the Revolving Lenders
in arrears, on the first day of each month and on the Commitment Termination
Date. In addition, Borrowers shall pay to any L/C Issuer, on demand, such fees
(including all per annum fees), charges and expenses of such L/C Issuer in
respect of the issuance, negotiation, acceptance, amendment, transfer and
payment of such Letter of Credit or otherwise payable pursuant to the
application and related documentation under which such Letter of Credit is
issued. Notwithstanding anything to the contrary set forth herein, Borrowers
shall not pay to Agent for the benefit of Revolving Lenders or to any L/C Issuer
any amount pursuant to this clause (d) with respect to taxes, levies, imposts,
deductions, charges or withholdings imposed by any Governmental Authority, or
any liabilities with respect thereto, the indemnification for which shall be
governed solely and exclusively by Section 1.13 of the Agreement.
(e) Request for Incurrence of Letter of Credit Obligations. Borrower
Representative shall give Agent at least two (2) Business Days' prior written
notice requesting the incurrence of any Letter of Credit Obligation. The notice
shall be accompanied by the form of the Letter of Credit (which shall be
acceptable to the L/C Issuer) and a completed Application for Standby Letter of
Credit or Application for Documentary Letter of Credit (as applicable), attached
hereto. Notwithstanding anything contained herein to the contrary, Letter of
Credit applications by Borrower Representative and approvals by Agent and the
L/C Issuer may be made and transmitted pursuant to electronic codes and security
measures mutually agreed upon and established by and among Borrower
Representative, Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrowers to reimburse
Agent and Revolving Lenders for payments made with respect to any Letter of
Credit Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities, and the
B-3
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of
Borrowers and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following:
(i) any lack of validity or enforceability of any Letter of
Credit or the Agreement or the other Loan Documents or any other
agreement;
(ii) the existence of any claim, setoff, defense or other right
that any Borrower or any of their respective Affiliates or any Lender
may at any time have against a beneficiary or any transferee of any
Letter of Credit (or any Persons or entities for whom any such
transferee may be acting), Agent, any Lender, or any other Person,
whether in connection with the Agreement, the Letter of Credit, the
transactions contemplated herein or therein or any unrelated
transaction (including any underlying transaction between any Borrower
or any of their respective Affiliates and the beneficiary for which
the Letter of Credit was procured);
(iii) any draft, demand, certificate or any other document
presented under any Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of
Credit or guaranty thereof against presentation of a demand, draft or
certificate or other document that does not comply with the terms of
such Letter of Credit or such guaranty;
(v) any other circumstance or event whatsoever, that is similar
to any of the foregoing; or
(vi) the fact that a Default or an Event of Default has occurred
and is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in the
Agreement, Borrowers hereby agree to pay and to protect, indemnify, and save
harmless Agent and each Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and allocated costs of internal counsel) that Agent or any
Lender may incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or guaranty thereof, or (B) the failure of
Agent or any Lender seeking indemnification or of any L/C Issuer to honor a
demand for payment under any Letter of Credit or guaranty thereof as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority, in each case other than
(i) to the extent solely as a result of the gross negligence or willful
misconduct of Agent, L/C Issuer or such Lender (as finally determined by a court
B-4
of competent jurisdiction) or (ii) with respect to taxes, levies, imposts,
deductions, charges or withholdings imposed by any Governmental Authority, or
any liabilities with respect thereto, the indemnification for which shall be
governed solely and exclusively by Section 1.13 of the Agreement.
(ii) As between Agent, L/C Issuer and any Lender and Borrowers,
Borrowers assume all risks of the acts and omissions of, or misuse of any Letter
of Credit by beneficiaries, of any Letter of Credit. In furtherance and not in
limitation of the foregoing, to the fullest extent permitted by law, neither
Agent nor any Lender shall be responsible for: (A) the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document issued by any
party in connection with the application for and issuance of any Letter of
Credit, even if it should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged; (B) the validity or sufficiency
of any instrument transferring or assigning or purporting to transfer or assign
any Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in whole or in part, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit;
provided that in the case of any payment by Agent or L/C Issuer under any Letter
of Credit or guaranty thereof, Agent or L/C Issuer shall be liable to the extent
such payment was made solely as a result of its gross negligence or willful
misconduct (as finally determined by a court of competent jurisdiction) in
determining that the demand for payment under such Letter of Credit or guaranty
thereof complies on its face with any applicable requirements for a demand for
payment under such Letter of Credit or guaranty thereof; (D) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they may be in cipher; (E)
errors in interpretation of technical terms; (F) any loss or delay in the
transmission or otherwise of any document required in order to make a payment
under any Letter of Credit or guaranty thereof or of the proceeds thereof; (G)
the credit of the proceeds of any drawing under any Letter of Credit or guaranty
thereof; and (H) any consequences arising from causes beyond the control of
Agent, L/C Issuer or any Lender. None of the above shall affect, impair, or
prevent the vesting of any of Agent's, L/C Issuer's or any Lender's rights or
powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to
expand any waivers, covenants or indemnities made by Borrowers in favor of any
L/C Issuer in any letter of credit application, reimbursement agreement or
similar document, instrument or agreement between or among Borrowers and such
L/C Issuer, including a Master Standby Agreement entered into with Agent.
B-5
ANNEX C (SECTION 1.8)
-----------
TO
CREDIT AGREEMENT
----------------
CASH MANAGEMENT SYSTEM
----------------------
Each Borrower shall, and shall cause its domestic Subsidiaries to,
establish and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date,
each Borrower shall (i) establish lock boxes ("Lock Boxes") at one or more of
the banks set forth in Disclosure Schedule (3.19) (each, a "Relationship Bank"),
which banks shall be reasonably satisfactory to Agent, and shall request in
writing and otherwise take such reasonable steps to ensure that all Account
Debtors forward payment directly to such Lock Boxes, and (ii) deposit and cause
its domestic Subsidiaries to deposit or cause to be deposited promptly, and in
any event no later than the first Business Day after the date of receipt
thereof, all cash, checks, drafts or other similar items of payment relating to
or constituting payments made in respect of any and all Collateral not otherwise
delivered to a Lock Box into the Missouri State Bank accounts listed on
Disclosure Schedule (3.19) (collectively, the "MSB Account"); provided, however
that no more than $200,000 in the aggregate may be maintained in the MSB Account
and, in the event that the balance in MSB Account exceeds $200,000, Borrowers
shall promptly (and in any event within one (1) Business Day) transfer funds to
the Master Disbursement Account (as defined below) at least in the amount of
such excess. On or before the Closing Date, Borrowers shall have established a
master depository account in their name (the "Joint Account") at a Relationship
Bank into which all items deposited into the Lock Boxes are swept on a daily
basis.
(b) Each Borrower may maintain, in its name, an account (each a
"Disbursement Account" and collectively, the "Disbursement Accounts") at a
Relationship Bank. Agent shall, from time to time, deposit into Industries'
Disbursement Account (the "Master Disbursement Account") proceeds of Revolving
Credit Advances and Swing Line Advances made to Borrowers pursuant to Section
1.1 for use by Borrowers solely in accordance with the provisions of Section
1.4. Industries may transfer such proceeds from the Master Disbursement Account
into the Disbursement Accounts of the other Borrowers from time to time, subject
to the limitations set forth herein.
(c) On or before the Closing Date (or such later date as Agent shall
consent to in writing), all Relationship Banks shall have entered into blocked
account agreements with Agent (for the benefit of itself and Lenders), Deutsche
Bank Trust Company Americas (as administrative and collateral agent under the
Senior Notes credit facility for the benefit of the lenders thereunder), and the
applicable Borrower and domestic Subsidiaries thereof, as applicable, in form
and substance reasonably acceptable to Agent, which shall become operative on or
prior to the Closing Date. Each such blocked account agreement shall provide,
among other things, that (i) all items of payment deposited in the account
covered thereby and proceeds thereof deposited therein are held by such
Relationship Bank as agent or bailee-in-possession for Agent, on behalf of
itself and Lenders, (ii) the Relationship Bank executing such agreement has no
rights of setoff or recoupment or any other claim against such account, as the
case may be, other than for payment of its service fees and other charges
directly related to the administration of such account and for returned checks
or other items of payment, but only in the case of non-payment thereof by the
Borrowers or their domestic Subsidiaries, and (iii) from and after the Closing
Date (A) with respect to Relationship Banks at which a Lock Box is maintained,
each such Relationship Bank agrees to forward promptly (and in any event within
one (1) Business Day) all amounts in each such Lock Box to the Joint Account and
commence the process of daily sweeps from the Lock Boxes into the Joint Account
and (B) with respect to the Relationship Bank at which the Joint Account is
maintained, such Relationship Bank agrees to promptly (and in any event within
one (1) Business Day) forward all available funds in the Joint Account to the
Collection Account through daily sweeps from such Joint Account into the
Collection Account. Each of (i) any Relationship Bank at which a Disbursement
Account (including, without limitation, the Master Disbursement Account) is
maintained and (ii) the Missouri State Bank with respect to the MSB Account,
shall have entered into, or, in the case of the MSB Account, will enter into
within 30 days after the Closing Date, a blocked account agreement among such
Relationship Bank, Industries and Agent whereby Agent shall have control over
the Disbursement Accounts or the MSB Account, as applicable, upon notice to that
Relationship Bank so long as any Event of Default has occurred and is
continuing. Borrowers may maintain up to $50,000 in the Joint Account to cover
returned items and other charges imposed by the Relationship Bank. The Borrowers
agree to cause the Relationship Bank at which the Master Disbursement Account is
maintained, to promptly (and in any event within one (1) Business Day) forward
all amounts received in the Master Disbursement Account to the Collection
Account to the extent that amounts on deposit in the Master Disbursement Account
exceed $3,000,000 at any time. Other than in respect of the Master Disbursement
Account and the Joint Account, no Borrower shall, or shall cause or permit any
domestic Subsidiary thereof to, accumulate or maintain cash in its Disbursement
Accounts or payroll accounts as of any date of determination in excess of checks
outstanding against such accounts as of that date and amounts necessary to meet
minimum balance requirements. Notwithstanding the foregoing, Borrowers may
maintain the depository accounts identified under the heading "Payroll Accounts"
on Disclosure Schedule (3.19) and that certain disbursement account numbered
11-03787 at Bank One, NA, which accounts will not be subject to a blocked
account agreement and shall only be used by Borrowers to pay payroll of their
employees.
(d) So long as no Event of Default has occurred and is continuing,
Borrowers may amend Disclosure Schedule (3.19) to add or replace a Relationship
Bank, Lock Box or Joint Account or to replace any Disbursement Account
(including the Master Disbursement Account); provided that (i) Agent shall have
consented in writing in advance to the opening of such account or Lock Box with
the relevant bank and (ii) prior to the time of the opening of such account or
Lock Box, the applicable Borrower or its domestic Subsidiaries, as applicable,
and such bank shall have executed and delivered to Agent a tri-party blocked
account agreement, in form and substance reasonably satisfactory to Agent.
Borrowers shall close any of their accounts (and establish replacement accounts
in accordance with the foregoing sentence) promptly and in any event within
thirty (30) days following notice from Agent that the creditworthiness of any
bank holding an account is no longer acceptable in Agent's reasonable judgment,
or as promptly as practicable and in any event within sixty (60) days following
notice from Agent that the operating performance, funds transfer or availability
C-2
procedures or performance with respect to accounts or Lock Boxes of the bank
holding such accounts or Agent's liability under any tri-party blocked account
agreement with such bank is no longer acceptable in Agent's reasonable judgment.
(e) The Lock Boxes, Joint Account and Disbursement Accounts
(including the Master Disbursement Account) shall be cash collateral accounts,
with all cash, checks and other similar items of payment in such accounts
securing payment of the Loans and all other Obligations, and in which each
Borrower and each domestic Subsidiary thereof shall have granted a Lien to
Agent, on behalf of itself and Lenders, pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed
received by Agent in accordance with Section 1.8 and shall be applied (and
allocated) by Agent in accordance with Section 1.9. In no event shall any amount
be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Each Borrower shall and shall cause its domestic Affiliates,
officers, employees, agents, directors or other Persons acting for or in concert
with such Borrower (each a "Related Person") to (i) hold in trust for Agent, for
the benefit of itself and Lenders, all checks, cash and other items of payment
received by such Borrower or any such Related Person, and (ii) within one (1)
Business Day after receipt by such Borrower or any such Related Person of any
checks, cash or other items of payment, deposit the same into the Missouri State
Bank account identified on Disclosure Schedule (3.19) subject to the limitations
set forth in clause(c) above. Each Borrower on behalf of itself and each Related
Person thereof acknowledges and agrees that all cash, checks or other items of
payment constituting proceeds of Collateral are part of the Collateral. All
proceeds of the sale or other disposition of any Collateral, shall be deposited
directly into the Joint Account.
C-3
ANNEX D (SECTION 2.1(A))
-------------
TO
CREDIT AGREEMENT
----------------
CLOSING CHECKLIST
-----------------
In addition to, and not in limitation of, the conditions described in Section
2.1 of the Agreement, pursuant to Section 2.1(a), the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Closing Date (each capitalized term used but not otherwise defined herein shall
have the meaning ascribed thereto in Annex A to the Agreement):
A. Appendices. All Appendices to the Agreement, in form and
substance satisfactory to Agent.
B. Revolving Notes and Swing Line Note. Duly executed
originals of the Revolving Notes and Swing Line Note for each applicable
Lender, dated the Closing Date.
C. Security Agreement. Duly executed originals of the
Security Agreement, dated the Closing Date, and all instruments,
documents and agreements executed pursuant thereto.
D. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as reasonably requested by Agent, in favor of Agent, on behalf of Lenders.
E. Security Interests and Code Filings.
(a) Evidence satisfactory to Agent that Agent (for the benefit of
itself and Lenders) has a valid and perfected first priority security interest
in the Collateral, including (i) such documents duly executed by each Credit
Party (including financing statements under the Code and other applicable
documents under the laws of any jurisdiction with respect to the perfection of
Liens) as Agent may request in order to perfect its security interests in the
Collateral and (ii) copies of Code search reports listing all effective
financing statements that name any Credit Party as debtor, together with copies
of such financing statements, none of which shall cover the Collateral, except
for those relating to the Existing Credit Facility (as defined in the Plan of
Reorganization), the DIP Facility Indebtedness or in favor of Bankers Trust
Company in connection with the TRI Facility (all of which shall be terminated on
the Closing Date) and Permitted Encumbrances. For purposes hereof, the "TRI
Facility" means (i) that certain Receivables Purchase and Sale Agreement, dated
as of January 31, 2000, among the sellers party thereto and Xxxxxx; (ii) that
certain Receivables Purchase and Sale Agreement, dated as of January 31, 2000,
among Xxxxxx, Thermadyne Receivables and Thermadyne Mfg. LLC, as guarantor; and
(iii) that certain Receivables Participation Agreement, dated as of January 31,
2000, between TRI and Bankers Trust Company, as trustee.
(b) Evidence reasonably satisfactory to Agent, including copies, of
all UCC-1 and other financing statements filed in favor of any Credit Party with
respect to each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated securities
and financial assets held by each Borrower, (ii) all securities intermediaries
with respect to all securities accounts and securities entitlements of each
Borrower, and (iii) all futures commission agents and clearing houses with
respect to all commodities contracts and commodities accounts held by any
Borrower.
F. Payoff Letter; Termination Statements. Copies of a duly executed
payoff letter, in form and substance reasonably satisfactory to Agent, by and
between all parties to the DIP Facility loan documents evidencing repayment in
full of all DIP Facility Indebtedness, together with (a) UCC-3 or other
appropriate termination statements, in form and substance satisfactory to Agent,
manually signed by the Agent for the DIP Facility lenders releasing all liens of
DIP Facility lenders upon any of the personal property of each Credit Party, and
(b) termination of all blocked account agreements, bank agency agreements or
other similar agreements or arrangements or arrangements in favor of the Agent
for the DIP Facility lenders or relating to the DIP Facility Indebtedness.
G. Intellectual Property Security Agreements. Duly executed originals
of Trademark Security Agreements, Copyright Security Agreements and Patent
Security Agreements, each dated the Closing Date and signed by each Credit Party
which owns Trademarks, Copyrights and/or Patents, as applicable, all in form and
substance reasonably satisfactory to Agent, together with all instruments,
documents and agreements executed pursuant thereto.
I. Subsidiary Guaranties. Guaranties executed by and each direct and
indirect domestic Subsidiary of Borrowers in favor of Agent, for the benefit of
Lenders.
J. Initial Borrowing Base Certificate. Duly executed originals of an
initial Borrowing Base Certificate from Borrower Representative, dated the
Closing Date, reflecting Adjusted EBITDA as of a April 30, 2003.
K. Initial Notice of Revolving Credit Advance. Duly executed
originals of a Notice of Revolving Credit Advance, dated the Closing Date, with
respect to the initial Revolving Credit Advance to be requested by Borrower
Representative on the Closing Date.
L. Letter of Direction. Duly executed originals of a letter of
direction from Borrower Representative addressed to Agent, on behalf of itself
and Lenders, with respect to the disbursement on the Closing Date of the
proceeds of the initial Revolving Credit Advance.
M. Cash Management System; Blocked Account Agreements. Evidence
satisfactory to Agent that, as of the Closing Date, Cash Management Systems
complying with Annex C to the Agreement have been established and are currently
being maintained in the manner set forth in such Annex C, together with copies
D-2
of duly executed four party blocked account and lock box agreements, reasonably
satisfactory to Agent, with the banks as required by Annex C.
N. Charter and Good Standing. For each Credit Party, such Person's
(a) charter and all amendments thereto, (b) good standing certificates
(including verification of tax status) in its state of incorporation and (c)
good standing certificates (including verification of tax status) and
certificates of qualification to conduct business in each jurisdiction where its
ownership or lease of property or the conduct of its business requires such
qualification, each dated a recent date prior to the Closing Date and certified
by the applicable Secretary of State or other authorized Governmental Authority.
O. Bylaws and Resolutions. For each Credit Party (except with respect
to (b), which shall only apply to Thermadyne Receivables), (a) such Person's
bylaws, together with all amendments thereto and (b) resolutions of such
Person's Board of Directors, approving and authorizing the execution, delivery
and performance of the Loan Documents to which such Person is a party and the
transactions to be consummated in connection therewith, each certified as of the
Closing Date by such Person's corporate secretary or an assistant secretary as
being in full force and effect without any modification or amendment except as
contemplated in the Plan of Reorganization.
P. Incumbency Certificates. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
Q. Opinions of Counsel. Duly executed originals of opinions of
counsel for the Credit Parties, together with any local counsel opinions
reasonably requested by Agent, each in form and substance reasonably
satisfactory to Agent and its counsel, dated the Closing Date, and to include in
such opinion an express statement to the effect that Agent and Lenders are
authorized to rely on such opinion.
R. Pledge Agreements. Duly executed originals of each of the Pledge
Agreements accompanied by (as applicable) (a) share certificates representing
all of the outstanding Stock being pledged pursuant to such Pledge Agreement and
stock powers for such share certificates executed in blank and (b) any
instruments evidencing Indebtedness being pledged pursuant to such Pledge
Agreement, duly endorsed in blank.
S. Accountants' Letters. A letter from the Credit Parties to their
independent auditors authorizing the independent certified public accountants of
the Credit Parties to communicate with Agent and Lenders in accordance with
Section 4.2.
T. Appointment of Agent for Service. An appointment of CT Corporation
as each Credit Party's agent for service of process.
U. Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the Chief Executive Officer or Chief Financial
Officer of each Borrower, dated the Closing Date, stating that (a) since
December 31, 2002, no event or condition has occurred or is existing which could
D-3
reasonably be expected to have a Material Adverse Effect; (b) since December 31,
2002, there has been no material adverse change in the industry in which any
Borrower operates; (c) since December 31, 2002, no Litigation has been commenced
which has a reasonable likelihood of success and, if successful, would have a
Material Adverse Effect or could challenge any of the transactions contemplated
by the Agreement and the other Loan Documents; (d) since December 31, 2002,
there have been no Restricted Payments made by any Credit Party except those
made concurrent with the transactions contemplated in the Plan of
Reorganization; (e) after giving effect to the transactions contemplated by the
Credit Agreement, each Credit Party will be Solvent, and (f) since December 31,
2002, there has been no material increase in liabilities, liquidated or
contingent, and no material decrease in assets of any Borrower or any of its
Subsidiaries.
V. Waivers. Agent, on behalf of Lenders, shall have received landlord
waivers and consents, bailee letters and mortgagee agreements in form and
substance reasonably satisfactory to Agent, in each case as required pursuant to
Section 5.9.
W. Intercreditor Agreements. Agent, Borrower Representative, and
Deutsche Bank Trust Company Americas as agent for the holders of the Senior
Notes, shall have entered into the Intercreditor Agreement, in form and
substance reasonably satisfactory to Agent.
X. Environmental Reports. Agent shall have received Phase I
Environmental Site Assessment Reports, consistent with American Society for
Testing and Materials (ASTM) Standard E 1527-00 (or the current ASTM standard
for Phase I environmental site assessment reports), and applicable state
requirements, on all of the Real Estate, dated no more than 6 months prior to
the Closing Date, prepared by environmental engineers reasonably satisfactory to
Agent, all in form and substance reasonably satisfactory to Agent, in its sole
discretion; and Agent shall have further received such environmental review and
audit reports, including Phase II reports, with respect to the Real Estate of
any Credit Party as Agent shall have requested, and Agent shall be satisfied, in
its sole discretion, with the contents of all such environmental reports. Agent
shall have received letters executed by the environmental firms preparing such
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports.
Y. Audited Financials; Financial Condition. Agent shall have received
the Financial Statements, Projections and other materials set forth in Section
3.4, certified by Borrower Representative's Chief Financial Officer, in each
case in form and substance reasonably satisfactory to Agent, and Agent shall be
satisfied with all of the foregoing. Agent shall have further received a
certificate of the Chief Executive Officer and/or the Chief Financial Officer of
each Borrower, based on such Pro Forma and Projections, to the effect that (a)
such Borrower will be Solvent upon the consummation of the transactions
contemplated herein; (b) the Pro Forma fairly presents in all material respects
the financial condition of Holdings and its Subsidiaries as of the date thereof
after giving effect to the transactions contemplated by the Loan Documents; (c)
the Projections are based upon estimates and assumptions stated therein, all of
which such Borrower believes to be reasonable and fair in light of current
conditions and current facts known to such Borrower and, as of the Closing Date,
reflect such Borrower's good faith and reasonable estimates of its future
D-4
financial performance and of the other information projected therein for the
period set forth therein; and (d) containing such other statements with respect
to the solvency of such Borrower and matters related thereto as Agent shall
request.
Z. Master Standby Agreement. A Master Agreement for Standby Letters
of Credit among Borrowers and GE Capital.
AA. Other Documents. Such other certificates, documents and
agreements respecting any Credit Party as Agent may reasonably request.
D-5
ANNEX E (SECTION 4.1(A))
--------------
TO
CREDIT AGREEMENT
----------------
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
-------------------------------------------------
Borrowers shall deliver or cause to be delivered to Agent
or to Agent and Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within thirty (30) days
after the end of each Fiscal Month, financial information regarding Holdings and
its Subsidiaries, certified by the Chief Financial Officer of Borrower
Representative, consisting of consolidated and consolidating (i) unaudited
balance sheets as of the close of such Fiscal Month and the related consolidated
and consolidating statement of income and consolidated statement of cash flows
for that portion of the Fiscal Year ending as of the close of such Fiscal Month
and (ii) unaudited statements of income and cash flows for such Fiscal Month,
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections for such Fiscal
Year, all prepared in accordance with GAAP (subject to normal year-end
adjustments). Such financial information shall be accompanied by the
certification of the Chief Financial Officer of Borrower Representative that (i)
such financial information presents fairly in all material respects in
accordance with GAAP (subject to normal year-end adjustments) the financial
position and results of operations of Holdings and its Subsidiaries, on a
consolidated and consolidating basis, in each case as at the end of such Fiscal
Month and for that portion of the Fiscal Year then ended and (ii) any other
information presented is true, correct and complete in all material respects and
that there was no Event of Default in existence as of such time or, if an Event
of Default has occurred and is continuing, describing the nature thereof and all
efforts undertaken to cure such Event of Default. In addition, the financial
information for the last month of each Fiscal Quarter shall be accompanied by
(A) a Compliance Certificate and (B) a management discussion and analysis that
includes a comparison to budget for that Fiscal Quarter and a comparison of
performance for that Fiscal Quarter to the corresponding period in the prior
year.
(b) Operating Plan. To Agent and Lenders, as soon as available, but
not later than thirty (30) days before the end of each Fiscal Year, an annual
operating plan for Holdings and its Subsidiaries, on a consolidated and
consolidating basis, approved by the Board of Directors of Holdings and its
Subsidiaries, for the following Fiscal Year, which (i) includes a statement of
all of the material assumptions on which such plan is based, (ii) includes
monthly balance sheets, income statements and statements of cash flows for the
following year and (iii) integrates sales, gross profits, operating expenses,
operating profit, cash flow projections and Borrowing Availability projections,
all prepared on the same basis and in similar detail as that on which operating
results are reported (and in the case of cash flow projections, representing
management's good faith estimates of future financial performance based on
historical performance), and including plans for personnel, Capital Expenditures
and facilities.
(c) Annual Audited Financials. To Agent and Lenders, within ninety
(90) days after the end of each Fiscal Year, audited Financial Statements for
Holdings and its Subsidiaries on a consolidated basis, consisting of balance
sheets and statements of income and retained earnings and cash flows, setting
forth in comparative form in each case the figures for the previous Fiscal Year,
which Financial Statements shall be prepared in accordance with GAAP and
certified without qualification, by an independent certified public accounting
firm of national standing or otherwise acceptable to Agent. Such Financial
Statements shall be accompanied by (i) a reconciliation of the Compliance
Certificate previously delivered in connection with the financial statements for
December of each year, (ii) a report from such accounting firm to the effect
that, in connection with their audit examination, nothing has come to their
attention to cause them to believe that an Event of Default has occurred with
respect to the Financial Covenants (or specifying those Events of Default that
they became aware of), it being understood that such audit examination extended
only to accounting matters and that no special investigation was made with
respect to the existence of Events of Default, (iii) the annual letters to such
accountants in connection with their audit examination detailing contingent
liabilities and material litigation matters, and (iv) the certification of the
Chief Executive Officer or Chief Financial Officer of Borrowers that all such
Financial Statements present fairly in all material respects in accordance with
GAAP the financial position, results of operations and statements of cash flows
of Borrowers and their Subsidiaries on a consolidated and consolidating basis,
as at the end of such Fiscal Year and for the period then ended, and that there
was no Event of Default in existence as of such time or, if an Event of Default
has occurred and is continuing, describing the nature thereof and all efforts
undertaken to cure such Event of Default.
(d) Management Letters. To Agent and Lenders, within five (5)
Business Days after receipt thereof by any Credit Party, copies of all
management letters, exception reports or similar letters or reports received by
such Credit Party from its independent certified public accountants.
(e) Default Notices. To Agent and Lenders, as soon as practicable,
and in any event within five (5) Business Days after an executive officer of any
Borrower has actual knowledge of the existence of any Event of Default or other
event that has had a Material Adverse Effect, telephonic or telecopied notice
specifying the nature of such Event of Default or other event, including the
anticipated effect thereof, which notice, if given telephonically, shall be
promptly confirmed in writing on the next Business Day.
(f) SEC Filings and Press Releases. To Agent and Lenders, promptly
upon there becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; and (iii) all press releases and
other statements made available by any Credit Party to the public concerning
material changes or developments in the business of any such Person.
(g) Subordinated Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person, and,
E-2
within two (2) Business Days after any Credit Party obtains knowledge of any
matured or unmatured event of default with respect to any Subordinated Debt,
notice of such event of default.
(h) Supplemental Schedules. To Agent, supplemental disclosures, if
any, required by Section 5.6.
(i) Litigation. To Agent in writing, promptly upon learning thereof,
notice of any Litigation commenced or threatened against any Credit Party that
(i) seeks damages in excess of $250,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by any Credit Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities or (vi) involves any product recall.
(j) Insurance Notices. To Agent, disclosure of losses or casualties
required by Section 5.4.
(k) Lease Default Notices. To Agent, (i) within two (2) Business Days
after receipt thereof, copies of any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is
located, (ii) monthly within three (3) Business Days after payment thereof,
evidence of payment of lease or rental payments as to each leased or rented
location for which a landlord or bailee waiver has not been obtained and (iii)
such other notices or documents as Agent may reasonably request.
(l) Lease Amendments. To Agent, within two (2) Business Days after
receipt thereof, copies of all material amendments to real estate leases.
(m) Hedging Agreements. To Agent within two (2) Business Days after
entering into such agreement or amendment, copies of all interest rate,
commodity or currency hedging agreements or amendments thereto.
(n) Good Standing Certificates. Not less frequently than once during
each calendar quarter, each Credit Party shall, unless Agent shall otherwise
consent, provide to Agent a certificate of good standing from its state of
incorporation or organization.
(o) Other Documents. To Agent and Lenders, such other financial and
other information respecting any Credit Party's business or financial condition
as Agent or any Lender shall from time to time reasonably request.
E-3
ANNEX F (SECTION 6.10)
------------
TO
CREDIT AGREEMENT
----------------
FINANCIAL COVENANTS
-------------------
Borrowers shall not breach or fail to comply with any of
the following financial covenants, each of which shall be calculated in
accordance with GAAP consistently applied:
(a) Maximum Capital Expenditures. Holdings and its
Subsidiaries on a consolidated basis shall not make Capital Expenditures
during the following periods that exceed in the aggregate the amounts set forth
opposite each of such periods:
Period Maximum Capital Expenditures per Period
------ ---------------------------------------
Fiscal Year 2003; $18,000,000
Fiscal Year 2004; $17,000,000
Fiscal Year 2005; $15,000,000
Fiscal Year 2006; $15,000,000
;provided, however, that the amount of permitted Capital Expenditures referenced
above will be increased in any period by the positive amount equal to the lesser
of (i) 50% of the amount of permitted Capital Expenditures for the immediately
prior period, and (ii) the amount (if any), equal to the difference obtained by
taking the Capital Expenditures limit specified above for the immediately prior
period minus the actual amount of any Capital Expenditures expended during such
prior period (the "Carry Over Amount"), and for purposes of measuring compliance
herewith, the Carry Over Amount shall be deemed to be the last amount spent on
Capital Expenditures in that succeeding year; provided, further, that the amount
of Capital Expenditures for Fiscal Year 2003 and Fiscal Year 2004 shall not
include up to $5,500,000 of Capital Expenditures made in connection with the
expansion of the real property located in Denton, Texas to the extent financed
with a Capital Lease.
(b) Minimum Fixed Charge Coverage Ratio. Holdings and its
Subsidiaries shall have on a consolidated basis at the end of each Fiscal
Quarter, a Fixed Charge Coverage Ratio for the 12-month period then ended (or
with respect to the Fiscal Quarter ending on September 30, 2003, the period
commencing on January 1, 2003 and ending on the last day of such Fiscal Quarter)
of not less than 1.10 to 1.00.
(c) Minimum EBITDA. Holdings and its Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Quarter set forth below, EBITDA for
the 12-month period then ended (or with respect to the Fiscal Quarter ending on
September 30, 2003, the period commencing on January 1, 2003 and ending on the
last day of such Fiscal Quarter) of not less than the following:
Period EBITDA
------ ------
Fiscal Quarter ending September 30, 2003 $38,000,000
Fiscal Quarter ending December 31, 2003 $51,300,000
Fiscal Quarter ending March 31, 2004 $53,500,000
Fiscal Quarter ending June 30, 2004 $54,700,000
Fiscal Quarter ending September 30, 2004 $55,000,000
Fiscal Quarter ending December 31, 2004 $55,500,000
Fiscal Quarter ending March 31, 2005 $56,000,000
Fiscal Quarter ending June 30, 2005 $57,500,000
Fiscal Quarter ending September 30, 2005 $59,000,000
For each Fiscal Quarter ending thereafter $60,000,000
(d) Maximum Leverage Ratio. Holdings and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Leverage Ratio as of the last day of such Fiscal Quarter and for the
12-month period then ended (or with respect to the Fiscal Quarter ending on
September 30, 2003, the period commencing on January 1, 2003 and ending on the
last day of such Fiscal Quarter) of not more than the following:
6.40 for the Fiscal Quarter ending September 30, 2003;
4.75 for the Fiscal Quarter ending December 31, 2003;
4.10 for the Fiscal Quarter ending March 31, 2004;
3.95 for the Fiscal Quarter ending June 30, 2004;
3.90 for the Fiscal Quarter ending September 30, 2004;
3.80 for the Fiscal Quarter ending December 31, 2004;
3.55 for the Fiscal Quarter ending March 31, 2005;
3.50 for the Fiscal Quarter ending June 30, 2005;
3.45 for the Fiscal Quarter ending September 30, 2005; and
3.40 for each Fiscal Quarter ending thereafter.
Unless otherwise specifically provided herein, any accounting term
used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrowers, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions); (ii)
changes in accounting principles concurred in by any Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
F-2
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the period the expenditures are
made and deducted as part of the calculation of EBITDA in such period. If Agent,
Borrowers and Requisite Lenders agree upon the required amendments, then after
appropriate amendments have been executed and the underlying Accounting Change
with respect thereto has been implemented, any reference to GAAP contained in
the Agreement or in any other Loan Document shall, only to the extent of such
Accounting Change, refer to GAAP, consistently applied after giving effect to
the implementation of such Accounting Change. If Agent, Borrowers and Requisite
Lenders cannot agree upon the required amendments within thirty (30) days
following the date of implementation of any Accounting Change, then all
Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change. For purposes of Section 8.1, a breach of a Financial Covenant
contained in this Annex F shall be deemed to have occurred as of any date of
determination by Agent or as of the last day of any specified measurement
period, regardless of when the Financial Statements reflecting such breach are
delivered to Agent.
F-3
ANNEX G (SECTION 9.9(A))
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to
CREDIT AGREEMENT
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WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: DeutscheBank Trust Company Americas
New York, New York
ABA #: 000000000
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: Thermadyne/CFN 5145
ANNEX H (SECTION 11.10)
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TO
CREDIT AGREEMENT
----------------
NOTICE ADDRESSES
----------------
(A) If to Agent or GE Capital, at:
General Electric Capital Corporation
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Thermadyne, Account Manager
Telecopier No.: (000) 000-0000
with a copy to:
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel - Commercial Finance
Telecopier No.: (000) 000-0000
(B) If to any Borrower, to Borrower Representative, at:
Thermadyne Holdings Corporation
00000 Xxxxxxxx Xxxxx Xx., Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx
Telecopier No.: 000-000-0000
with copies to:
Thermadyne Holdings Corporation
00000 Xxxxxxxx Xxxxx Xx., Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxxxx
Telecopier No.: 000-000-0000
and
Xxxx Xxxxxxx & Xxxxxx LLP
000 Xxxxxxxx Xx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: R. Xxxxx Xxxxx
Telecopier No.: 000-000-0000
ANNEX I (FROM ANNEX A -COMMITMENTS DEFINITION)
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to
CREDIT AGREEMENT
----------------
Lender
------
Revolving Loan Commitment General Electric Capital Corporation
(including a Swing Line Commitment
of $1,000,000)
$50,000,000
