1
EXHIBIT 99.1
--------------------------------------------------------------------------------
CREDIT AGREEMENT
Dated as of December 29, 2000
Among
AMERICAN COIN MERCHANDISING, INC.,
as Borrower,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
and
COMERICA BANK
as Revolving Credit Agent and Lender
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
Page
----
1. AMOUNT AND TERMS OF CREDIT....................................................................................1
1.1 Credit Facilities.........................................................................................1
1.2 Letters of Credit.........................................................................................3
1.3 Prepayments...............................................................................................3
1.4 Use of Proceeds...........................................................................................5
1.5 Interest and Applicable Margins...........................................................................5
1.7 Fees......................................................................................................8
1.8 Receipt of Payments.......................................................................................8
1.9 Application and Allocation of Payments....................................................................8
1.10 Loan Account and Accounting..............................................................................9
1.11 Indemnity................................................................................................9
1.12 Access..................................................................................................10
1.13 Taxes...................................................................................................10
1.14 Capital Adequacy; Increased Costs; Illegality...........................................................11
1.15 Single Loan.............................................................................................12
2. CONDITIONS PRECEDENT.........................................................................................12
2.1 Conditions to the Initial Loans..........................................................................12
2.2 Further Conditions to Each Loan..........................................................................13
3. REPRESENTATIONS AND WARRANTIES...............................................................................13
3.1 Corporate Existence; Compliance with Law.................................................................13
3.2 Executive Offices; FEIN..................................................................................14
3.3 Corporate Power, Authorization, Enforceable Obligations..................................................14
3.4 Financial Statements and Projections.....................................................................14
3.5 Material Adverse Effect..................................................................................15
3.6 Ownership of Property; Liens.............................................................................15
3.7 Labor Matters............................................................................................15
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness................................16
3.9 Government Regulation....................................................................................16
3.10 Margin Regulations......................................................................................16
3.11 Taxes...................................................................................................16
3.12 ERISA...................................................................................................17
3.13 No Litigation...........................................................................................17
-i-
3
3.14 Brokers.................................................................................................17
3.15 Intellectual Property...................................................................................17
3.16 Full Disclosure.........................................................................................18
3.17 Environmental Matters...................................................................................18
3.18 Insurance...............................................................................................18
3.19 Deposit Accounts........................................................................................19
3.20 Government Contracts....................................................................................19
3.21 Customer and Trade Relations............................................................................19
3.22 Agreements and Other Documents..........................................................................19
3.23 Solvency................................................................................................19
3.24 Status of Guarantors....................................................................................19
3.25 Subordinated Debt.......................................................................................19
4. FINANCIAL STATEMENTS AND INFORMATION.........................................................................19
4.1 Reports and Notices......................................................................................19
4.2 Communication with Accountants...........................................................................20
5. AFFIRMATIVE COVENANTS........................................................................................20
5.1 Maintenance of Existence and Conduct of Business.........................................................20
5.2 Payment of Obligations...................................................................................20
5.3 Books and Records........................................................................................20
5.4 Insurance; Damage to or Destruction of Collateral........................................................20
5.5 Compliance with Laws.....................................................................................21
5.6 Supplemental Disclosure..................................................................................21
5.7 Intellectual Property....................................................................................22
5.8 Environmental Matters....................................................................................22
5.9 Landlords' Agreements, Mortgagee Agreements and Bailee Letters...........................................22
5.10 Further Assurances......................................................................................22
6. NEGATIVE COVENANTS...........................................................................................23
6.1 Mergers, Subsidiaries, Etc...............................................................................23
6.2 Investments; Loans and Advances..........................................................................25
6.3 Indebtedness.............................................................................................25
6.4 Employee Loans and Affiliate Transactions................................................................26
6.5 Capital Structure and Business...........................................................................26
6.6 Guaranteed Indebtedness..................................................................................26
6.7 Liens....................................................................................................26
6.8 Sale of Stock and Assets.................................................................................27
6.9 ERISA....................................................................................................27
-ii-
4
6.10 Financial Covenants.....................................................................................27
6.11 Hazardous Materials.....................................................................................27
6.12 Sale Leasebacks.........................................................................................27
6.13 Cancellation of Indebtedness............................................................................27
6.14 Restricted Payments.....................................................................................27
6.15 Change of Corporate Name or Location; Change of Fiscal Year.............................................28
6.16 No Impairment of Intercompany Transfers.................................................................28
6.17 No Speculative Transactions.............................................................................28
6.18 Leases..................................................................................................28
6.19 Changes Relating to Subordinated Debt...................................................................28
7. TERM.........................................................................................................28
7.1 Termination..............................................................................................28
7.2 Survival of Obligations Upon Termination of Financing Arrangements.......................................28
8. EVENTS OF DEFAULT: RIGHTS AND REMEDIES.......................................................................29
8.1 Events of Default........................................................................................29
8.2 Remedies.................................................................................................30
8.3 Waivers by Credit Parties................................................................................31
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT..........................................................31
9.1 Assignment and Participations............................................................................31
9.2 Appointment of Agent.....................................................................................32
9.3 Agent's Reliance, Etc....................................................................................33
9.4 GE Capital and Affiliates................................................................................33
9.5 Lender Credit Decision...................................................................................34
9.6 Indemnification..........................................................................................34
9.7 Successor Agent..........................................................................................34
9.8 Setoff and Sharing of Payments...........................................................................35
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.................................35
10. SUCCESSORS AND ASSIGNS......................................................................................37
10.1 Successors and Assigns..................................................................................37
11. MISCELLANEOUS...............................................................................................37
11.1 Complete Agreement; Modification of Agreement...........................................................37
11.2 Amendments and Waivers..................................................................................37
11.3 Fees and Expenses.......................................................................................38
-iii-
5
11.4 No Waiver...............................................................................................39
11.5 Remedies................................................................................................39
11.6 Severability............................................................................................40
11.7 Conflict of Terms.......................................................................................40
11.8 Confidentiality.........................................................................................40
11.9 GOVERNING LAW...........................................................................................40
11.10 Notices................................................................................................41
11.11 Section Titles.........................................................................................41
11.12 Counterparts...........................................................................................41
11.13 WAIVER OF JURY TRIAL...................................................................................41
11.14 Press Releases.........................................................................................42
11.15 Reinstatement..........................................................................................42
11.16 Advice of Counsel......................................................................................42
11.17 No Strict Construction.................................................................................42
-iv-
6
INDEX OF APPENDICES
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) - Form of Term Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Responsible Individual
Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Schedule 3.2 - Executive Offices; FEIN
Schedule 3.4(A) - Financial Statements
Schedule 3.4(B) - Pro Forma
Schedule 3.6 - Real Estate and Leases
Schedule 3.7 - Labor Matters
Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Schedule 3.11 - Tax Matters
Schedule 3.12 - ERISA Plans
Schedule 3.13 - Litigation
Schedule 3.14 - Brokers
Schedule 3.15 - Intellectual Property
Schedule 3.17 - Hazardous Materials
Schedule 3.18 - Insurance
Schedule 3.19 - Deposit Accounts
Schedule 3.20 - Government Contracts
Schedule 3.22 - Material Agreements
Schedule 5.1 - Trade Names
Schedule 6.2 - Investments
Schedule 6.3 - Indebtedness
Schedule 6.4(a) - Transactions with Affiliates
Schedule 6.7 - Existing Liens
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C - Intentionally Omitted
Annex D (Section 2.1(a)) - Schedule of Additional Closing Documents
Annex E (Section 4.1) - Financial Statements and Projections -- Reporting
Annex F - Intentionally Omitted
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A-
Commitments definition) - Commitments as of Closing Date
-v-
7
CREDIT AGREEMENT, dated as of December 29, 2000 among AMERICAN COIN
MERCHANDISING, INC., a Delaware corporation ("Borrower"); GENERAL ELECTRIC
CAPITAL CORPORATION, a New York 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; and COMERICA BANK, a Michigan
banking corporation ("Comerica"), for itself, as Lender, and as Revolving Credit
Agent for the Revolving Lenders.
RECITALS
WHEREAS, Borrower desires that Lenders extend revolving and term credit
facilities to Borrower of up to Fifty-Five Million Dollars ($55,000,000) in the
aggregate for the purpose of refinancing certain indebtedness of Borrower and to
provide (a) working capital financing for Borrower, and (b) funds for other
general corporate purposes of Borrower; and for these purposes, Lenders are
willing to make certain loans and other extensions of credit to Borrower of up
to such amount upon the terms and conditions set forth herein; and
WHEREAS, Borrower desires to secure all of its 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 its existing and after-acquired
personal property and a lien upon after-acquired real property as required at
Agent's reasonable request; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A. All Annexes, Disclosure Schedules,
Exhibits and other attachments (collectively, "Appendices") hereto, or expressly
identified to this Agreement, are incorporated herein by reference, and taken
together, 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 and in accordance with the terms and
conditions hereof, each Revolving Lender agrees to make available to
Borrower from time to time until the Commitment Termination Date its
Pro Rata Share of advances of money in immediately available funds
(each, a "Revolving Credit Advance") comprising a Revolving Loan. 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. The aggregate amount of Revolving Credit Advances outstanding
shall not exceed the Maximum Amount. Until the Commitment Termination
Date, Borrower may from time to time borrow, repay and reborrow under
this Section 1.1(a). Each Revolving Credit Advance shall be made on
notice by Borrower to the representative of Revolving Credit Agent
identified on Schedule 1.1 at the address specified thereon. Those
notices must be given no later than (1) 12:00 p.m./noon (New York time)
on the Business Day of the proposed Revolving Credit Advance, in the
case of a Base Rate Loan, or (2) 12:00 p.m./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 required by Agent. If Borrower
desires to have the Revolving Credit Advances bear interest by
reference to a LIBOR Rate, it must comply with Section 1.5(e).
(ii) Borrower 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 Borrower to pay
the amount of each
1
8
Revolving Lender's Revolving Loan Commitment or, if less, the
applicable Revolving Lender's Pro Rata Share of the aggregate unpaid
principal amount of all Revolving Credit Advances to Borrower together
with interest thereon as prescribed in Section 1.5. The entire unpaid
balance of the Revolving Loan shall be immediately due and payable in
full in immediately available funds on the Commitment Termination Date.
(b) Term Loan.
(i) Subject to and in accordance with the terms and
conditions hereof, each Term Lender agrees to make a term loan on the
Closing Date to Borrower (the "Term Loan") in the original principal
amount of its Term Loan Commitment. The obligations of each Term Lender
hereunder shall be several and not joint. The Term Loan shall be
evidenced by promissory notes substantially in the form of Exhibit
1.1(b) (each a "Term Note" and collectively the "Term Notes"), and
Borrower shall execute and deliver a Term Note to each Term Lender.
Each Term Note shall represent the obligation of Borrower to pay the
amount of the applicable Term Lender's Term Loan Commitment, together
with interest thereon as prescribed in Section 1.5.
(ii) Borrower shall pay the principal amount of the
Term Loan in eighteen (18) consecutive quarterly installments on the
first day of January, April, July and October of each year, commencing
April 1, 2001, as follows:
Payment Date Installment Amount
------------ ------------------
April 1, 2001 $1,500,000
July 1, 2001 $1,500,000
October 1, 2001 $1,500,000
January 1, 2002 $1,500,000
April 1, 2002 $2,000,000
July 1, 2002 $2,000,000
October 1, 2002 $2,000,000
January 1, 2003 $2,000,000
April 1, 2003 $2,500,000
July 1, 2003 $2,500,000
October 1, 2003 $2,500,000
January 1, 2004 $2,500,000
April 1, 2004 $3,100,000
July 1, 2004 $3,100,000
October 1, 2004 $3,100,000
January 1, 2005 $3,100,000
April 1, 2005 $3,700,000
June 30, 2005 The entire unpaid balance of the Term Loan.
2
9
Notwithstanding the foregoing, the aggregate
outstanding principal balance of the Term Loan shall be due and payable
in full in immediately available funds on the Term Loan Termination
Date, if not sooner paid in full.
(iii) Each payment of principal with respect to the
Term Loan shall be paid to Agent for the ratable benefit of each Term
Lender, ratably in proportion to each such Term Lender's respective
Term Loan Commitment.
1.2. Letters of Credit. Subject to and in accordance with the terms and
conditions contained herein and in Annex B, Borrower shall have the right to
request Letters of Credit, and Revolving Credit Agent agrees to issue Letters of
Credit.
1.3. Prepayments
(a) Voluntary Prepayments. Borrower may at any time on at
least five (5) days' prior written notice to Agent voluntarily prepay
all or part of the Term Loan; provided that any such prepayments shall
be in a minimum amount of $500,000 and integral multiples of $250,000
in excess of such amount. In addition, Borrower may at any time on at
least five (5) days' prior written notice to Agent and to Revolving
Credit Agent terminate the Revolving Loan Commitment; provided that
upon such termination, all Loans and other Obligations shall be
immediately due and payable in full. Any such voluntary prepayment and
any such termination of the Revolving Loan Commitment must be
accompanied by the 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 prepayment and termination of the
Revolving Loan Commitment, Borrower's right to request Revolving Credit
Advances, or request that Letters of Credit be issued on its behalf,
shall simultaneously be terminated. Any partial prepayments of the Term
Loan made by Borrower shall be applied to prepay first, to Fees and
reimbursable expenses of Agent and Revolving Credit Agent then due and
payable pursuant to any of the Loan Documents; second, ratably to
interest then due and payable on the Term Loan; and third, ratably to
prepay the outstanding principal balance of the Term Loan which such
prepayment shall be applied to the scheduled installments of such Term
Loan in inverse order of maturity.
(b) Mandatory Prepayments.
(i) If at any time the outstanding balance of the
Revolving Loan exceeds the Maximum Amount, Borrower shall immediately
repay the aggregate outstanding Revolving Credit Advances to the extent
required to eliminate such excess.
(ii) Within two (2) Business Days of receipt by
Borrower of proceeds of any asset disposition (including condemnation
proceeds, but excluding proceeds of asset dispositions permitted by
Section 6.8(a) or (c)) or any sale of Stock of any Subsidiary of
Borrower, Borrower shall prepay the Loans in an amount equal to all
such proceeds, net of (A) commissions and other reasonable and
customary transaction costs, fees and expenses properly attributable to
such transaction and payable by Borrower in connection therewith (in
each case, paid to non-Affiliates), (B) transfer taxes, (C) amounts
payable to holders of senior Liens (to the extent such Liens constitute
Liens permitted under Section 6.7), if any, and (D) an appropriate
reserve for income taxes in accordance with GAAP in connection
therewith; provided, however, that net proceeds shall be excluded from
the requirements of this Section 1.3(b)(ii) to the extent such proceeds
(A) do not exceed $1,250,000 in aggregate for all such dispositions
during the then current
3
10
Fiscal Year of Borrower or (B) are reinvested in assets, acceptable to
Agent, and used by Borrower in the conduct of its business within 180
days after receipt of such proceeds (provided that Agent shall be
granted a first priority Lien on all such assets, and shall have
received evidence reasonably satisfactory to Agent that such lien has
attached, is perfected and has first priority) and Borrower shall have,
within two (2) Business Days of the receipt by Borrower of such net
proceeds, delivered to Agent an officer's certificate signed by a
Responsible Financial Officer of Borrower setting forth the amount of
such net proceeds and the amount of the mandatory prepayment to be
made, if any, pursuant to this Section 1.3(b)(ii) and setting forth in
reasonable detail the calculations from which such amounts were
derived, and, with respect to any net proceeds to be reinvested as
provided in this Section 1.3(b)(ii), a general description of the
intended application thereof and a general estimate of the costs of the
reinvestment). In the event that any portion of net proceeds received
by Borrower are excluded from the mandatory prepayment requirement in
accordance with this Section 1.3(b)(ii) are not expended for the
general purposes specified in the officer's certificate delivered by
Borrower in connection therewith within the 180-day time period,
Borrower shall, within one (1) Business Day following the expiration of
the 180-day time period, make a mandatory prepayment of the Loans as
specified in the first sentence of this Section 1.3(b)(ii) in an amount
equal to such unexpended portion. Any such prepayment shall be applied
in accordance with clause (c) below.
(iii) If Borrower issues Stock, (other than Stock
issued by Borrower (A) to existing or new investors in connection with
the financing and consummation of a Permitted Acquisition or other
investment permitted under Section 6.2 and (B) to officers and
employees of Borrower or any of its Subsidiaries pursuant to an equity
option or incentive plan approved by Borrower's board of directors) no
later than two (2) Business Days following the date of receipt of the
proceeds thereof, Borrower shall prepay the Loans in an amount equal to
fifty percent (50%) of such proceeds, net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in
connection therewith. Any such prepayment shall be applied in
accordance with clause (c) below.
(iv) If Borrower issues or sells any Debt Securities
(other than Debt Securities (A) to existing or new investors in
connection with the financing and consummation of a Permitted
Acquisition or other investment permitted under Section 6.2 , or (B)
issued to Agent, Revolving Credit Agent or other Lenders under the Loan
Documents or (C) permitted under Section 6.3) no later than the second
(2nd) Business Day following the date of receipt of the proceeds
thereof, Borrower shall prepay the Loans in an amount equal to all such
proceeds, net of underwriting discounts and commissions and other
reasonable costs paid to non-Affiliates in connection therewith. Any
such prepayment shall be applied in accordance with clause (c) below.
(v) Until the Termination Date, Borrower shall,
commencing January 1, 2002 for Borrower's Fiscal Year ending December
31, 2001, prepay the Obligations on the earlier of the date which is
ten (10) days after (A) the date on which Borrower's annual audited
Financial Statements for the immediately preceding Fiscal Year are
delivered pursuant to Annex E or (B) the date on which such annual
audited Financial Statements were required to be delivered pursuant to
Annex E, in an amount equal to the Excess Cash Flow Percentage of
Excess Cash Flow for the immediately preceding Fiscal Year. Any
prepayments from Excess Cash Flow paid pursuant to this clause (v)
shall be applied in accordance with clause (c) below. Each such
prepayment shall be accompanied by a certificate signed by a
Responsible Financial Officer of Borrower certifying the manner in
which Excess Cash Flow and the resulting prepayment were calculated,
which certificate shall be in form and substance satisfactory to Agent.
(c) Application of Certain Mandatory Prepayments. Any
prepayments made by Borrower pursuant to clauses (b)(ii), (b)(iii),
(b)(iv), or (b)(v) above 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
Term Loan; third, to prepay the scheduled installments of the Term Loan
in inverse order of maturity, until such Loan shall have been prepaid
in full; fourth, to interest then due and payable on the Revolving
Credit Advances; fifth, to the outstanding principal balance of
Revolving Credit Advances until the same shall have been repaid in full
(the amount of any such mandatory prepayment of the Revolving Credit
Advances shall reduce the Maximum Amount by a corresponding amount and
each Revolving Lenders' Revolving Loan Commitment shall be reduced by
such Revolving Lender's Pro Rata Share of such reduction); sixth, to
any Letter of Credit Obligations until all such Letter of
4
11
Credit Obligations have been fully cash collateralized in the manner
reasonably satisfactory to Revolving Credit Agent.
(d) Application of Prepayments from Insurance Proceeds.
Prepayments from insurance proceeds in accordance with Section 5.4(c)
shall be applied as follows: insurance proceeds from casualties or
losses to any asset of Borrower shall be applied first to amounts due
to holders of senior Liens (to the extent such Liens constitute Liens
permitted under Section 6.7), if any, and then as set forth in clause
(c) above.
(e) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any
transaction referred to in clauses (b)(ii) and (b)(iii) above which is
not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4. Use of Proceeds. Borrower shall utilize the proceeds of the Loans
solely for the Refinancing (and to pay any related transaction expenses) and for
the financing of Borrower's ordinary working capital and general corporate needs
(but excluding in any event the making of any Restricted Payment not
specifically permitted by Section 6.14). Disclosure Schedule (1.4) contains a
description of Borrower's sources and uses of funds as of the Closing Date,
including Loans and Letters of Credit to be made or issued 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) Borrower shall pay interest to Agent, or Revolving Credit
Agent, as appropriate, for the ratable benefit of Lenders in accordance
with the various Loans being made by each Lender, in arrears on each
applicable Interest Payment Date, at the following rates: (i) with
respect to the Revolving Credit Advances, the Base Rate plus the
Applicable Revolver Base Margin per annum or, at the election of
Borrower, the applicable LIBOR Rate plus the Applicable Revolver LIBOR
Margin per annum, based on the aggregate Revolving Credit Advances
outstanding from time to time; and (ii) with respect to the Term Loan,
the Base Rate plus the Applicable Term Loan Base Margin per annum or,
at the election of Borrower, the applicable LIBOR Rate plus the
Applicable Term Loan LIBOR Margin per annum.
As of the Closing Date, the Applicable Revolver Base Margin,
Applicable Term Loan Base Margin, Applicable Revolver LIBOR Margin,
Applicable Term Loan LIBOR Margin, and Applicable L/C Margin will be
2.00%, 2.00%, 3.50%, 3.50%, and 3.50% per annum, respectively. The
Applicable Margins will be adjusted (up or down) prospectively on a
quarterly basis as determined by Borrower's consolidated financial
performance, commencing with the first day of the first calendar month
that occurs more than three (3) Business Days after delivery of
Borrower's quarterly Financial Statements to Lenders for the Fiscal
Quarter ending June 30, 2001. Adjustments in Applicable Margins will be
determined by reference to the following grids:
LEVEL OF
IF SENIOR FUNDED DEBT RATIO IS: APPLICABLE MARGINS:
------------------------------- -------------------
> or = 2.75:1 Level I
> or = 2.50:1, but <2.75:1 Level II
> or = 2.25:1, but <2.50:1 Level III
> or = 2.00:1, but <2.25:1 Level IV
> or = 1.75:1, but <2.00:1 Level V
<1.75:1 Xxxxx XX
0
00
XXXXX X XXXXX XX XXXXX XXX LEVEL IV LEVEL V LEVEL VI
------- -------- --------- -------- ------- --------
Applicable 2.25% 2.00% 1.75% 1.50% 1.25% 1.00%
Revolver Base
Margin
Applicable 3.75% 3.50% 3.25% 3.00% 2.75% 2.50%
Revolver LIBOR
Margin
Applicable Term 2.25% 2.00% 1.75% 1.50% 1.25% 1.00%
Loan Base Margin
Applicable Term 3.75% 3.50% 3.25% 3.00% 2.75% 2.50%
Loan LIBOR Margin
Applicable L/C 3.75% 3.50% 3.25% 3.00% 2.75% 2.50%
Margin
Concurrently with the delivery of those Financial Statements,
Borrower shall deliver to Agent and Lenders a certificate, signed by a
Responsible Financial Officer of Borrower, setting forth in reasonable
detail the basis for the continuance of, or any change in, the
Applicable Margins. Failure to timely deliver such Financial Statements
shall, in addition to any other remedy provided for in this Agreement,
result in an increase in the Applicable Margins to the highest level
set forth in the foregoing grid applicable to such Loan, until the
first day of the first calendar month following the delivery of those
Financial Statements demonstrating that such an increase is not
required. If a Default or an Event of Default shall have occurred or be
continuing at the time any reduction in the Applicable Margins is to be
implemented, that reduction shall be deferred until the first day of
the first calendar month following the date on which such Default or
Event of Default is waived or cured.
(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.
(c) All computations of Fees calculated on a per annum basis
and interest shall be made by Agent on the basis of a three hundred and
sixty (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 Base Rate shall be determined each day based upon the Base Rate as
in effect each day. Each determination by Agent of an interest rate and
Fees hereunder shall be conclusive, absent manifest error.
(d) So long as an Event of Default shall have occurred and be
continuing under Section 8.1(a), (h) or (i), or so long as any other
Default or Event of Default shall have occurred and be continuing and
at the election of Agent (or upon the written request of Requisite
Lenders) confirmed by written notice from Agent to Borrower, the
interest rates applicable to the Loans and the Letter of Credit Fees
shall be increased by two percent (2%) per annum above the rates of
interest or the rate of such Fees otherwise
6
13
applicable hereunder ("Default Rate"), and all outstanding 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 Default or Event of Default until that
Default or Event of Default is cured or waived and shall be payable
upon demand.
(e) So long as no Default or Event of Default shall have
occurred and be continuing, and subject to the additional conditions
precedent set forth in Section 2.2, Borrower shall have the option to
(i) request that any Revolving Credit Advances be made as a LIBOR Loan,
(ii) convert at any time all or any part of outstanding Loans from Base
Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to a Base 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 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 last day of the LIBOR Period of
the Loan to be continued. Any Loan 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 $100,000 in excess of such amount. Any such
election must be made by 12:00 p.m./noon (New York time) on the third
(3rd) 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 wishes to convert any Base Rate Loan to a LIBOR
Loan for a LIBOR Period designated by Borrower in such election. If no
election is received with respect to a LIBOR Loan by 12:00 p.m./noon
(New York time) on the third (3rd) Business Day prior to the end of the
LIBOR Period with respect thereto (or if a Default or an Event of
Default shall have occurred and be continuing or the additional
conditions precedent set forth in Section 2.2 shall not have been
satisfied), that LIBOR Loan shall be converted to a Base Rate Loan at
the end of its LIBOR Period. Borrower 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 may be made as or converted into a LIBOR Loan
until three (3) Business Days after the Closing.
(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 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,
Borrower 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 which 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. Thereafter,
interest hereunder shall be paid at the rate(s) of interest and in the
manner provided in Sections 1.5(a) through (e) above, unless and until
the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total
interest received by any Lender pursuant to the terms hereof exceed the
amount which such Lender could lawfully have received had the interest
due hereunder been calculated for the full term hereof at the Maximum
Lawful Rate. If the Maximum Lawful Rate is calculated pursuant to this
paragraph, such interest shall be calculated at a daily rate equal to
the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made. If, notwithstanding the provisions of
this Section 1.5(f), a court of competent jurisdiction shall finally
determine that a Lender has received interest hereunder in excess of
the Maximum Lawful Rate, Agent shall, to the extent permitted by
applicable law, promptly apply such excess in the order specified in
Section 1.9 and thereafter shall refund any excess to Borrower or as a
court of competent jurisdiction may otherwise order.
1.6. Intentionally Omitted.
7
14
1.7. Fees.
(a) Borrower shall pay to GE Capital, individually, the Fees
specified in that certain fee letter dated as of even date herewith
between Borrower and GE Capital and shall pay to Comerica,
individually, the Fees specified in that certain fee letter dated as of
even date herewith between Borrower and Comerica (collectively, the
"Fee Letters"), at the times specified for payment therein.
(b) As additional compensation for the Revolving Lenders,
Borrower agrees to pay to Revolving Credit Agent, for the ratable
benefit of such Lenders, in arrears, on the first Business Day of each
calendar quarter prior to the Commitment Termination Date and on the
Commitment Termination Date, a fee for Borrower's non-use of available
funds in an amount equal to the Commitment Fee of 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
Revolving Loan outstanding during the period for which the such fee is
due.
(c) If Borrower prepays all or any portion of the Term Loan,
whether voluntarily or involuntarily and whether before or after
acceleration of the Obligations, Borrower 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
determined by multiplying the Applicable Percentage (as defined below)
by the principal amount of the Term Loan prepaid. As used herein, the
term "Applicable Percentage" shall mean (x) one and one-half percent
(1.5%), in the case of a prepayment on or prior to the first
anniversary of the Closing Date, (y) three-quarters percent (0.75%), in
the case of a prepayment after the first anniversary of the Closing
Date but on or prior to the second anniversary, and (z) zero percent
(0%), in the case of a prepayment after the second anniversary of the
Closing Date. Notwithstanding the foregoing, no prepayment fee shall be
payable by Borrower upon a mandatory prepayment made pursuant to
Sections 1.3(b) or 1.14(c); provided that in the case of prepayments
made pursuant to Section 1.3(b)(ii) or (b)(iii), the transaction giving
rise to the applicable prepayment is expressly permitted under Section
6.
1.8. Receipt of Payments. Borrower 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 applicable Collection Account. For
purposes of computing interest and Fees as of any date, all payments shall be
deemed received on the day of receipt of immediately available funds therefor in
the applicable 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 shall be deemed to
have been received on the following Business Day.
1.9. Application and Allocation of Payments.
(a) So long as no Default or Event of Default shall have
occurred and be continuing, (i) payments matching specific scheduled
payments then due shall be applied to those scheduled payments; (ii)
voluntary prepayments shall be applied as determined by Borrower,
subject to the provisions of Section 1.3(a); and (iii) mandatory
prepayments shall be applied as set forth in Sections 1.3(c) and
1.3(d). 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 each other payment, and as to
all payments made when a Default or Event or Default shall have
occurred and be continuing or following the Commitment Termination Date
with respect to payments under the Revolving Loan, or the Term Loan
Termination Date with respect to payments under the Term Loan, Borrower
hereby irrevocably waives the right to direct the application of any
and all payments received from or on behalf of Borrower, and Borrower
hereby irrevocably agrees that Agent shall have the continuing
exclusive right to apply any and all such payments against the
Obligations 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
following order: (1) to Fees and reimbursable expenses of Agent and
Revolving Credit Agent due and payable pursuant to any of the Loan
Documents; (2) to interest on the Loans, ratably in proportion to the
interest accrued as to each Loan; (3) to principal payments on the
Loans and to provide cash collateral for Letter of Credit Obligations
in the manner reasonably requested by Revolving Credit Agent, ratably
to the aggregate, combined
8
15
principal balance of the Loans and outstanding Letter of Credit
Obligations; and (4) to all other Obligations including expenses of
Lenders to the extent reimbursable under Section 11.3.
(b) Upon direction of Agent, Revolving Credit Agent shall,
notwithstanding anything herein to the contrary, charge to the
Revolving Loan balance on behalf of Borrower and cause to be paid all
Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 5.4(a)) and interest and principal, other than
principal of the Revolving Loan, owing by Borrower under this Agreement
or any of the other Loan Documents if and to the extent Borrower fails
to promptly pay any such amounts as and when due, except to the extent
such charges would cause the aggregate balance of the Revolving Loan to
exceed the Maximum Amount. 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 shall maintain a loan account
(the "Term Loan Account") on its books to record the Term Loan, all payments
made by Borrower, and all other debits and credits as provided in this Agreement
with respect to the Term Loan. Revolving Credit Agent shall maintain a loan
account (the "Revolving Loan Account"; the Term Loan Account and the Revolving
Loan Account collectively the "Loan Account") on its books to record all
Advances, all payments made to Borrower, and all other debits to credits as
provided in this Agreement with respect to the Revolving Loan. All entries in
the Loan Account shall be made in accordance with Agent's or Revolving Credit
Agent's (as applicable) customary accounting practices as in effect from time to
time. The balance in the Loan Account, as recorded on Agent's or Revolving
Credit Agent's (as applicable) most recent printout or other written statement,
shall, absent manifest error, be presumptive evidence of the amounts due and
owing to Agent, Revolving Credit Agent and Lenders by Borrower; provided that
any failure to so record or any error in so recording shall not limit or
otherwise affect Borrower's duty to pay the Obligations. Upon written request by
Borrower to Agent or Revolving Credit Agent (as applicable), Agent or Revolving
Credit Agent shall render to Borrower a monthly accounting of transactions with
respect to the Loans setting forth the balance of the Loan Account. Unless
Borrower notifies Agent or Revolving Credit Agent (as applicable) in writing of
any objection to any such accounting (specifically describing the basis for such
objection), within ninety (90) days after the date thereof, each and every such
accounting shall, absent manifest error, be deemed final, binding and conclusive
upon Borrower in all respects as to all matters reflected therein. Absent
manifest error, only those items expressly objected to in such notice shall be
deemed to be disputed by Borrower. 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) Borrower shall indemnify and hold harmless each of Agent,
Revolving Credit 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) which 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 reasonable 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 no such Borrower 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. 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
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
9
16
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 is the result of acceleration, by operation of
law or otherwise); (ii) Borrower shall default in payment when due of
the principal amount of or interest on any LIBOR Loan; (iii) Borrower
shall default in making any borrowing of, conversion into or
continuation of LIBOR Loans after Borrower has given notice requesting
the same in accordance herewith; or (iv) Borrower shall fail to make
any prepayment of a LIBOR Loan after Borrower has given a notice
thereof in accordance herewith, Borrower shall indemnify and hold
harmless each Lender from and against all losses, costs and expenses
resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or
expense arising from the reemployment of funds obtained by it or from
fees payable to terminate deposits from which such funds were obtained.
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, however, 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 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 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 shall object in writing within
twenty (20) Business Days of receipt thereof, specifying the basis for
such objection in detail.
1.12. Access. Borrower shall, during normal business hours, from time
to time upon one (1) Business Day's prior notice as frequently as Agent
determines to be appropriate: (a) provide Agent and any of its officers,
employees and agents access to its properties, facilities, advisors and
employees (including officers) of each Borrower and each of its Subsidiaries and
to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Borrower'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 Borrower. Notwithstanding the
foregoing, so long as no Event of Default shall have occurred or is continuing
Agent shall conduct comprehensive Collateral audits no more than twice a year.
If a Default or Event of Default shall have occurred and be continuing or if
access is necessary to preserve or protect the Collateral as determined by the
Agent, Borrower 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
shall have occurred and be continuing, Borrower shall provide Agent and each
Lender with access to its suppliers and customers. Borrower shall make available
to Agent and its counsel, as quickly as is practicable under the circumstances,
originals or copies of all books and records which Agent may reasonably request.
Borrower 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 which maintains records for Borrower, and shall maintain
duplicate records or supporting documentation on media, including computer tapes
and discs owned by Borrower. Agent will give Lenders at least ten (10) 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 Borrower.
1.13. Taxes.
(a) Any and all payments by Borrower hereunder 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 Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder 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, Revolving
Credit Agent or Lenders, as applicable, receive an amount equal to the
sum they would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall pay the
full amount deducted to the relevant taxing or other authority in
accordance with
10
17
applicable law. Within thirty (30) days after the date of any payment
of Taxes, Borrower shall furnish to Agent or Revolving Credit Agent as
applicable, the original or a certified copy of a receipt evidencing
payment thereof.
(b) Borrower shall indemnify and, within ten (10) days of
demand therefor, pay Agent, Revolving Credit Agent and each Lender for
the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this Section 1.13) paid by Agent,
Revolving Credit Agent or such Lender, as appropriate, and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes were
correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction
outside the United States (a "Foreign Lender") as to which payments to
be made under this Agreement or under the Notes are exempt from United
States withholding tax under an applicable statute or tax treaty shall
provide to Borrower and Agent a properly completed and executed IRS
Form W-8BEN or Form W-8ECI 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 foreign Person that seeks to become a Lender under
this Agreement shall provide a Certificate of Exemption to Borrower and
Agent prior to becoming a Lender hereunder. No foreign Person may
become a Lender hereunder if such Person is unable to deliver a
Certificate of Exemption.
1.14. Capital Adequacy; Increased Costs; Illegality.
(a) If any Lender shall have determined that 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 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 Borrower 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. A certificate as to the amount of that reduction and
showing the basis of the computation thereof submitted by such Lender
to Borrower and to Agent shall, absent manifest error, be final,
conclusive and binding for all purposes.
(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 Borrower 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. A certificate as to
the amount of such increased cost, submitted to Borrower and to Agent
by such Lender, shall be conclusive and binding on Borrower for all
purposes, absent manifest error. 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 Borrower 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 opinion,
adversely affecting it or its Loans or the income obtained therefrom,
on
11
18
notice thereof and demand therefor by such Lender to Borrower 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)
Borrower shall forthwith prepay in full all outstanding LIBOR Loans
owing to such Lender, together with interest accrued thereon, unless
Borrower, within five (5) Business Days after the delivery of such
notice and demand, converts all such Loans into a Loan bearing interest
based on the Base Rate.
(d) Within fifteen (15) days after receipt by Borrower of
written notice and demand from any Lender (an "Affected Lender") for
payment of additional amounts or increased costs as provided in Section
1.13(a), 1.14(a) or 1.14(b), Borrower may, at its option, notify Agent,
Revolving Credit Agent and such Affected Lender of its intention to
replace the Affected Lender. So long as no Default or Event of Default
shall have occurred and be continuing, Borrower, with the consent of
Agent and Revolving Credit Agent, may obtain, at Borrower's expense, a
replacement Lender ("Replacement Lender") for the Affected Lender,
which Replacement Lender must be satisfactory to Agent. If Borrower
obtains a Replacement Lender within ninety (90) days following notice
of its 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, provided that Borrower 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, Borrower shall not have the right to
obtain a Replacement Lender if the Affected Lender rescinds its demand for
increased costs or additional amounts within fifteen (15) days following its
receipt of Borrower's notice of intention to replace such Affected Lender.
Furthermore, if Borrower gives a notice of intention to replace and does not so
replace such Affected Lender within ninety (90) days thereafter, Borrower's
rights under this Section 1.14(d) shall terminate and Borrower shall promptly
pay all increased costs or additional amounts demanded by such Affected Lender
pursuant to Sections 1.13(a), 1.14(a) and 1.14(b).
1.15. Single Loan. All Loans to Borrower and all of the other
Obligations of Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrower secured, until the
Termination Date, by all of its Collateral.
2. CONDITIONS PRECEDENT
2.1. Conditions to the Initial Loans.
No Lender shall be obligated to make any Loan or incur any obligation
with respect to any Letter of Credit 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 satisfactory to Agent, or waived in
writing by Agent and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrower, Agent, Revolving Credit 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 satisfactory to Agent.
(b) Repayment of Prior Lender Obligations; Satisfaction of
Outstanding L/C's. (i) Agent shall have received a fully executed
original of a pay-off letter satisfactory to Agent confirming that all
of the Prior Lender Obligations will be repaid in full from the
proceeds of the Term Loan and the initial Revolving Credit Advance and
all Liens upon any of the property of Borrower or any of its
Subsidiaries in favor of Prior Lender shall be terminated by Prior
Lender immediately upon such payment; and (ii) all letters of credit
issued or guaranteed by Prior Lender and remaining available and
undrawn shall have been cash collateralized or replaced by a Letter of
Credit of Revolving Credit Agent.
12
19
(c) Approvals. Agent shall have received (i) satisfactory
evidence that Borrower has obtained all required consents and approvals
of all Persons including all requisite Governmental Authorities, to the
execution, delivery and performance of this Agreement and the other
Loan Documents or (ii) an officer's certificate in form and substance
satisfactory to Agent affirming that no such consents or approvals are
required.
(d) Payment of Fees. Borrower 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 Fee
Letters), and shall have reimbursed Agent for all fees, costs and
expenses of closing presented as of the Closing Date.
(e) Capital Structure: Other Indebtedness. The capital
structure of Borrower and the terms and conditions of all Indebtedness
of Borrower shall be acceptable to Agent in its sole discretion.
2.2. Further Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Loan, 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 Borrower contained
herein or in any of the other Loan Documents shall be untrue or
incorrect as of such date, 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; or
(b) Any event or circumstance having a Material Adverse Effect
shall have occurred since the date hereof; or
(c) (i) Any Event of Default shall have occurred and be
continuing or would result after giving effect to any Loan, (or the
incurrence of any obligation with respect to any Letter of Credit), or
(ii) a Default shall have occurred and be continuing or would result
after giving effect to any Loan, and Agent or Requisite Revolving
Lenders shall have determined not to make any Loan or incur any Letter
of Credit Obligation so long as that Default is continuing; or
(d) After giving effect to any Advance (or the incurrence of
any obligation with respect to any Letter of Credit), the outstanding
principal amount of the Revolving Loan would exceed the Maximum Amount.
The request and acceptance by Borrower of the proceeds of any Loan, the
incurrence by any Lender of any obligation with respect to any Letter of Credit
or the conversion or continuation of any Loan into, or as, a LIBOR Loan, as the
case may be, shall be deemed to constitute, as of the date of such request or
acceptance, (i) a representation and warranty by Borrower that the conditions in
this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrower 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 Loans and to incur obligations with
respect to Letters of Credit, Borrower makes the following representations and
warranties to Agent and each Lender with respect to Borrower and each of its
Subsidiaries, each and all of which shall survive the execution and delivery of
this Agreement.
3.1. Corporate Existence; Compliance with Law. Borrower and each of its
Subsidiaries (a) is a corporation or business trust, as the case may be, duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization; (b) is duly qualified to conduct business or
perform the function for which it was organized and is in good standing in each
other jurisdiction where its ownership or lease of property or the conduct of
its business or other activities requires such qualification, except where the
failure to be so qualified would result in exposure to losses, damages or
liabilities which would reasonably be expected to have a Material Adverse
Effect; (c) has the requisite power and authority (either corporate or
otherwise) and the legal right to own, pledge, mortgage
13
20
or otherwise encumber and operate its properties, to lease the property it
operates under lease and to conduct its business as now, heretofore and 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 filings with, and has given all notices to, all Governmental Authorities,
having jurisdiction, to the extent required for such ownership, operation and
conduct, except to the extent that the failure to have any of such licenses,
permits, consents or approvals would not reasonably be expected to have a
Material Adverse Effect; (e) is in compliance with its charter and by-laws (or
equivalent organizational documents); 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 (including,
without limitation, applicable gaming laws) except where the failure to comply,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect.
3.2. Executive Offices; FEIN. As of the Closing Date, the current
location of Borrower's chief executive office and principal place of business is
set forth in Disclosure Schedule (3.2), and such location has not changed within
the twelve (12) months preceding the Closing Date. In addition, Disclosure
Schedule (3.2) lists Borrower's federal employer identification number.
3.3. Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by Borrower of the Loan Documents to which
it is a party and the creation of all Liens provided for therein: (a) are within
Borrower's corporate power; (b) have been duly authorized by all necessary or
proper corporate and shareholder action on the part of Borrower; (c) do not
contravene any provision of Borrower's charter or bylaws; (d) do not violate any
law or regulation (including, without limitation, gaming laws), or any order or
decree of any court or Governmental Authority, except to the extent that any
such violation would not reasonably be expected to have a Material Adverse
Effect; (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 Borrower is a party or by which Borrower
or any of its property is bound, except to the extent that any such conflict,
breach or termination would not reasonably be expected to have a Material
Adverse Effect; (f) do not result in the creation or imposition of any Lien upon
any of the property of Borrower 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, except
those referred to in Section 2.1(c), all of which will have been duly obtained,
made or complied with prior to the Closing Date. On or prior to the Closing
Date, each of the Loan Documents to which Borrower is a party shall have been
duly executed and delivered by Borrower and each such Loan Document shall then
constitute a legal, valid and binding obligation of Borrower enforceable against
it in accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency or other laws affecting the enforcement of creditors'
rights generally and by general principles of equity, including concepts of
materiality, reasonableness, good faith and fair dealing (regardless of whether
considered in proceeding at law or in equity and the availability of the remedy
of specific performance).
3.4. Financial Statements and Projections. Except for the Projections,
all Financial Statements concerning Borrower and its Subsidiaries which are
referenced 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) The following Financial Statements attached hereto as
Disclosure Schedule (3.4(A)) have been delivered on the date hereof:
(i) The audited consolidated and consolidating
balance sheets at December 31, 1999 and the related statements of
income and cash flows of Borrower and its Subsidiaries for the Fiscal
Years then ended, certified by KPMG, LLP.
(ii) The unaudited balance sheet(s) at September 30,
2000 and the related statement(s) of income and cash flows of Borrower
and its Subsidiaries for the Fiscal Quarter then ended.
14
21
(b) Pro Forma. The Pro Forma delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(B)) was prepared by
Borrower giving pro forma effect to the funding of the Term Loan and
the initial Revolving Credit Advances on the Closing Date and the
repayment of the Prior Lender Obligations, was based on the unaudited
consolidated balance sheets of Borrower and its Subsidiaries dated
September 30, 2000, and was prepared consistent with past practices.
(c) Projections. The Projections delivered on or prior to date
hereof to each of the Lenders have been prepared by Borrower in light
of the past operations of its businesses, but including future payments
of known contingent liabilities, and reflect projections for the three
(3) year period beginning on January 1, 2001 on a month by month basis
for the first year and on a year by year basis thereafter. The
Projections are based upon estimates and assumptions stated therein,
all of which Borrower believes to be reasonable and fair in light of
current conditions and current facts known to Borrower and, as of the
Closing Date, reflect Borrower's good faith and reasonable estimates of
the future financial performance of Borrower and of the other
information projected therein for the period set forth therein.
3.5. Material Adverse Effect. Between December 31, 1999 and the Closing
Date, (a) neither Borrower nor any of its Subsidiaries has incurred any
obligations, contingent or non-contingent liabilities, liabilities for Charges,
long-term leases or unusual forward or long-term commitments which are not
reflected in the Pro Forma and which, alone or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, (b) no contract, lease
or other agreement or instrument has been entered into by Borrower or any of its
Subsidiaries or has become binding upon Borrower's or any of its Subsidiaries'
assets and no law or regulation applicable to Borrower or any of its
Subsidiaries has been adopted which has had or would reasonably be expected to
have a Material Adverse Effect, and (c) neither Borrower nor any of its
Subsidiaries is in default and to the best of Borrower's knowledge no third
party is in default under any material contract, lease or other agreement or
instrument, which alone or in the aggregate would reasonably be expected to have
a Material Adverse Effect. Between December 31, 1999 and the Closing Date no
event has occurred, which alone or together with other events, would 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 on Disclosure Schedule (3.6) constitutes all of
the real property owned, leased, subleased, or operated by Borrower or any of
its Subsidiaries. Borrower and each of its Subsidiaries 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 copies of all such leases or a summary of terms
thereof to the extent reasonably requested by Agent and satisfactory to Agent in
its reasonable discretion have been delivered to Agent. Disclosure Schedule
(3.6) further describes any Real Estate with respect to which Borrower or any of
its Subsidiaries is a lessor, sublessor or assignor as of the Closing Date.
Borrower and each of its Subsidiaries also has good and marketable title to, or
valid leasehold interests in, all of its personal properties and assets. As of
the Closing Date, none of the properties and assets of Borrower or any of its
Subsidiaries are subject to any Liens other than Liens permitted under Section
6.7, and there are no facts, circumstances or conditions known to Borrower that
may result in any Liens (including Liens arising under Environmental Laws) other
than Liens permitted under Section 6.7.
3.7. Labor Matters. As of the Closing Date (a) no strikes or other
material labor disputes against Borrower or any of its Subsidiaries are pending
or, to Borrower's or any of its Subsidiaries' knowledge, threatened; (b) hours
worked by and payment made to employees of Borrower and each of its Subsidiaries
complies in all material respects with the Fair Labor Standards Act and each
other federal, state, local or foreign law applicable to such matter; (c) all
payments due from Borrower and each of its Subsidiaries for employee health and
welfare insurance have been paid or accrued as a liability on the books of
Borrower and each of its Subsidiaries, except to the extent that the failure to
make any such payment would not reasonably be expected to have a Material
Adverse Effect; (d) except as set forth in Disclosure Schedule (3.7), neither
Borrower nor any of its Subsidiaries is a party to or bound by any collective
bargaining agreement, management agreement, consulting agreement or any
employment agreement (and 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 Borrower or any of its Subsidiaries pending or, to
Borrower's or any of its Subsidiaries' knowledge, threatened by any labor union
or group of employees; (f) there are no representation proceedings pending or,
to Borrower's or any of its Subsidiaries' knowledge, threatened with the
National Labor Relations Board, and no labor organization or group of employees
of Borrower or any of its Subsidiaries has made a pending demand for
recognition; and (g) except as set forth in Disclosure Schedule (3.7),
15
22
there are no complaints or charges against Borrower or any of its Subsidiaries
pending or, to the knowledge of Borrower or any of its Subsidiaries, 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 Borrower or any of its Subsidiaries of any individual which
would reasonably be expected to result in a Material Adverse Effect.
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date Borrower does not have any Subsidiaries, is not engaged in any
joint venture or partnership with any other Person, and is not an Affiliate of
any other Person. All of the issued and outstanding Stock of each Subsidiary
listed on Disclosure Schedule (3.8) is owned Borrower. There are no outstanding
rights to purchase, options, warrants or similar rights or agreements pursuant
to which Borrower 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 of Borrower and each of its
Subsidiaries as of the Closing Date is described in Section 6.3 (including
Disclosure Schedule (6.3)). As of the Closing Date, except as set forth on
Disclosure Schedule (3.8), none of the Subsidiaries of Borrower has any assets
or any Indebtedness or Guaranteed Indebtedness.
3.9. Government Regulation. Borrower is not 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 as amended. Borrower is not 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
Borrower, the incurrence of any obligation with respect to any Letter of Credit
on behalf of Borrower, the application of the proceeds thereof and repayment
thereof will not violate any provision of any such statute or any rule,
regulation or order issued by the Securities and Exchange Commission applicable
to Borrower or the Loans, except to the extent such violation would not
reasonably be expected to have a Material Adverse Effect,.
3.10. Margin Regulations. Borrower is not 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 security" 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"). Borrower does not own 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 which was
originally incurred to purchase or carry any Margin Stock or for any other
purpose which might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulation T, U or X of the Federal Reserve Board. Borrower will not take or
permit to be taken any action which might cause any Loan Document to violate any
regulation of the Federal Reserve Board applicable to Borrower or the Loans.
3.11. Taxes. Except to the extent failure to do so would not reasonably
be expected to have a Material Adverse Effect, all tax returns, reports and
statements, including information returns, required by any Governmental
Authority to be filed by Borrower 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 nonpayment
thereof (or any such fine, penalty, interest, late charge or loss has been
paid), excluding Charges or other amounts being contested in accordance with
Section 5.2(b). Proper and accurate amounts have been withheld by Borrower from
its employees for all periods in full and complete compliance with all
applicable federal, state, local and foreign law and such withholdings have been
timely paid to the respective Governmental Authorities except to the extent that
the failure to do so would not reasonably be expected to have a Material Adverse
Effect. Disclosure Schedule (3.11) sets forth as of the Closing Date those
taxable years for which Borrower'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 on Disclosure Schedule (3.11), Borrower has not
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. Except to the extent such liabilities
would not reasonably result in a Material Adverse Effect, neither Borrower nor
any of its Subsidiaries are liable for any Charges remaining outstanding and due
and payable: (a) under any agreement (including any tax sharing agreements) or
(b) to Borrower's knowledge, as a
16
23
transferee. As of the Closing Date, Borrower has not 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 have a Material Adverse Effect.
3.12. ERISA.
(a) Disclosure Schedule (3.12) lists and separately identifies
all Title IV Plans, Multiemployer Plans, ESOPs and Retiree Welfare
Plans as of the Closing Date. Copies of all such listed Plans, together
with a copy of the latest form 5500 for each such Plan, have been
delivered to Agent. Except with respect to Multiemployee Plans, or
except as otherwise set forth on Disclosure Schedule (3.12), each
Qualified Plan has been determined by the IRS to qualify under Section
401 of the IRC, and 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 which would cause the loss of such
qualification or tax-exempt status. Each Plan is in compliance with the
applicable provisions of ERISA and the IRC, including the filing of
reports required under the IRC or ERISA except to the extent that the
failure to so comply would not reasonably be expected to have a
Material Adverse Effect. Neither Borrower nor any ERISA Affiliate has
failed to make any contribution or pay any amount due as required by
either Section 412 of the IRC or Section 302 of ERISA or the terms of
any such Plan except to the extent that the failure to do so would not
reasonably be expected to have a Material Adverse Effect. Neither
Borrower nor any ERISA Affiliate has engaged in a prohibited
transaction, as defined in Section 4975 of the IRC, in connection with
any Plan, which would subject Borrower to a material tax on prohibited
transactions imposed by Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event
or event described in Section 4062(e) of ERISA with respect to any
Title IV Plan has occurred or is reasonably expected to occur; (iii)
there are no pending, or to the knowledge of Borrower, threatened
claims (other than claims for benefits in the normal course),
sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Person as fiduciary or sponsor of any Plan; (iv) neither
Borrower nor any ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal
from a Multiemployer Plan; (v) within the last five years no Title IV
Plan with Unfunded Pension Liabilities has been transferred outside of
the "controlled group" (within the meaning of Section 4001(a)(14) of
ERISA) of Borrower or any ERISA Affiliate; and (vi) no liability under
any Title IV Plan has been satisfied with the purchase of a contract
from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or the equivalent by another nationally recognized
rating agency except to the extent that any of the foregoing events
under clauses (i) through (vi) would reasonably be expected to have a
Material Adverse Effect.
3.13. No Litigation. No action, claim, lawsuit, demand, investigation
or proceeding is now pending or, to the knowledge of Borrower, threatened
against Borrower or any of its Subsidiaries, before any Governmental Authority
or before any arbitrator or panel of arbitrators (collectively, "Litigation"),
(a) which challenges Borrower'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)
which has a reasonable risk of being determined adversely to Borrower or any of
its Subsidiaries and which, if so determined, would 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 threatened
which seeks damages in excess of $100,000 in excess of insurance which has been
tendered to the insurance carrier, or injunctive relief or alleges criminal
misconduct of Borrower.
3.14. Brokers. Except as set forth on Disclosure Schedule (3.14), no
broker or finder acting on behalf of Borrower brought about the obtaining,
making or closing of the Loans, and Borrower has no 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, Borrower and each
of its Subsidiaries owns or has rights to use all Intellectual Property
necessary to continue to conduct its business as now conducted by it, and each
Patent, registered Trademark (and applications therefor), registered Copyright
and material License is listed, together with application or registration
numbers, as applicable, in Disclosure Schedule (3.15) hereto. Borrower and
17
24
each of its Subsidiaries conducts its business and affairs without infringement
of or interference with any Intellectual Property of any other Person except to
the extent that the failure to do so would not reasonably be expected to have a
Material Adverse Effect.
3.16. Full Disclosure. No written projection, Financial Statement or
other reports made by Borrower or a senior officer thereof to Agent or any
Lender in connection with this Agreement, or in connection with any Loan, as of
the date thereof contained any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statement made not
materially misleading in light of all the circumstances existing at the date the
statement was made. The Liens granted to Agent, on behalf of itself and Lenders,
pursuant to the Collateral Documents will at all times be fully perfected first
priority Liens in and to the Collateral described therein, subject as to
priority, only to the Liens permitted under Section 6.7.
3.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of
the Closing Date: (i) to Borrower's knowledge 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 Borrower's or any Subsidiaries' interest in such Real
Estate and which would not result in Environmental Liabilities which
would reasonably be expected to result in a Material Adverse Effect;
(ii) neither Borrower nor any of its Subsidiaries has caused or
suffered to occur any Release of Hazardous Materials on, at, in, under,
above, to, from or about any of its Real Estate in violation of any
Environmental Law, except to the extent such violation would not
reasonably be expected to have a Material Adverse Effect; (iii)
Borrower and its Subsidiaries are and have been in compliance with all
Environmental Laws, except for such noncompliance which would not
result in Environmental Liabilities which would reasonably be expected
to result in a Material Adverse Effect; (iv) Borrower and its
Subsidiaries 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
which would reasonably be expected to result in a Material Adverse
Effect, and all such Environmental Permits are valid, uncontested and
in good standing; (v) neither Borrower nor any of its Subsidiaries 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 Person which
would reasonably be expected to result in a Material Adverse Effect;
(vi) there is no Litigation arising under or related to any
Environmental Laws, Environmental Permits or Hazardous Material which
seeks damages, penalties, fines, injunctive relief, costs or expenses
which if obtained would reasonably be expected to result in a Material
Adverse Effect; or which alleges criminal misconduct by Borrower or any
of its Subsidiaries; (vii) no notice has been received by any Borrower
or any of its Subsidiaries identifying it as a "potentially responsible
party" or requesting information under CERCLA or analogous state
statutes, and to the knowledge of Borrower, there are no facts,
circumstances or conditions that would make it reasonably likely that
Borrower would be identified as a "potentially responsible party" under
CERCLA or analogous state statutes; and (viii) Borrower has provided to
Agent copies of all existing environmental reports, reviews and audits
and all written information pertaining to actual or potential
Environmental Liabilities relating to the Real Estate reasonably
requested by Agent.
(b) Borrower hereby acknowledges and agrees that Agent (i) is
not now, and has not ever been, in control of any of the Real Estate or
Borrower's or any of its Subsidiaries' affairs, and (ii) does not have
the capacity through the provisions of the Loan Documents or otherwise
to influence Borrower's or any of its Subsidiaries' 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 Borrower and each of its Subsidiaries, as well as a summary of
the terms of each such policy.
18
25
3.19. Deposit Accounts. Disclosure Schedule (3.19) lists all banks and
other financial institutions at which Borrower maintains deposits and/or other
accounts as of the Closing Date and such Schedule correctly identifies the name,
address and telephone number of each depository, the name in which the account
is held, a description of the purpose of the account, and the complete account
number.
3.20. Government Contracts. Except as set forth in Disclosure Schedule
(3.20), as of the Closing Date, Borrower is not a party to any contract or
agreement with any Governmental Authority which generates or may generate a
receivable and Borrower's Accounts are not subject to the Federal Assignment of
Claims Act, as amended (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 Borrower, threatened termination or
cancellation of, or any material adverse modification or change in the business
relationship of Borrower or any Subsidiary with any party to a Material Customer
Contract, or (to the extent not otherwise included therein) a customer or group
of customers whose purchases during the preceding twelve (12) months caused them
to be ranked among the ten largest customers of such Person; or the business
relationship of Borrower or any of its Subsidiaries with any supplier material
to its operations.
3.22. Agreements and Other Documents. As of the Closing Date, Borrower
has provided to Agent or its counsel, on behalf of Lenders, copies (or
summaries) of all of the following agreements or documents to which it is
subject and each of which are listed on Disclosure Schedule (3.22): supply
agreements and purchase agreements not terminable by Borrower or any of its
Subsidiaries within sixty (60) days following written notice issued by such
Person and involving transactions in excess of $1,000,000 per annum; any lease
of Equipment having a remaining term of one year or longer and requiring
aggregate rental and other payments in excess of $1,000,000 per annum; licenses
and permits held by such Person, the absence of which would be reasonably likely
to have a Material Adverse Effect; and instruments or documents evidencing
Indebtedness of such Person and any security interest granted by such Person
with respect thereto.
3.23. Solvency. Both before and after giving effect to (a) the Loans
and Letters of Credit to be made or issued on the Closing Date or such other
date as Loans and Letters of Credit requested hereunder are made or issued, (b)
the disbursement of the proceeds of such Loans pursuant to the instructions of
Borrower, (c) the Refinancing, and (d) the payment and accrual of all
transaction costs in connection with the foregoing, Borrower and each of its
Subsidiaries is Solvent.
3.24. Status of Guarantors. Intentionally omitted.
3.25. Subordinated Debt. As of the Closing Date, Borrower has delivered
to Agent a complete and correct copy of the Subordinated Notes (including all
schedules, exhibits, amendments, supplements, modifications, assignments and
other material documents delivered pursuant thereto or in connection therewith).
Borrower has the corporate power and authority to incur the Indebtedness
evidenced by the Subordinated Notes. The subordination provisions of the
Subordinated Notes are enforceable against the holders of the Subordinated Notes
by Agent and Lenders. All Obligations, including the Obligations to pay
principal of and interest on the Loans and the Letter of Credit Obligations,
constitute senior Indebtedness entitled to the benefits of the subordination
provisions contained in the Subordinated Notes. The principal of and interest on
the Notes, all Letter of Credit Obligations and all other Obligations will
constitute "senior debt" as that or any similar term is or may be used in any
other instrument evidencing or applicable to any other Subordinated Debt.
Borrower acknowledges that Agent and each Lender are entering into this
Agreement and are extending the Commitments in reliance upon the subordination
provisions of the Subordinated Notes and this Section 3.25.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1. Reports and Notices. Borrower hereby agrees that from and after
the Closing Date and until the Termination Date, it shall deliver to Agent
and/or 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.
19
26
4.2. Communication with Accountants. Borrower authorizes Agent and, so
long as a Default or Event of Default shall have occurred and be continuing,
each Lender, to communicate directly with its independent certified public
accountants including KPMG, LLP, and authorizes and shall instruct those
accountants and advisors to disclose and make available to Agent and each Lender
any and all Financial Statements and other supporting financial documents,
schedules and information relating to Borrower and its Subsidiaries (including
copies of any issued management letters) with respect to the business, financial
condition and other affairs of such Person.
5. AFFIRMATIVE COVENANTS
Borrower agrees that from and after the date hereof and until the
Termination Date:
5.1. Maintenance of Existence and Conduct of Business. Borrower shall,
and shall cause each of its Subsidiaries to: do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and its rights and franchises except to the extent that the failure to do so
would not reasonably be expected to have a Material Adverse Effect; continue to
conduct its business substantially as now conducted or as otherwise permitted
hereunder; at all times maintain, preserve and protect 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 except to the extent that the failure to do
so would not reasonably be expected to have a Material Adverse Effect; and
transact business only in such corporate and trade names as are set forth in
Disclosure Schedule (5.1).
5.2. Payment of Obligations.
(a) Subject to Section 5.2(b), Borrower shall and shall cause
each of its Subsidiaries to pay and discharge or cause to be paid and
discharged before the same shall become delinquent all material Charges
payable by it, including (A) Charges imposed upon it, its income and
profits, or any of its property (real, personal or mixed) and all
material Charges with respect to tax, social security and unemployment
withholding with respect to its employees, and (B) lawful claims for
labor, materials, supplies and services or otherwise, before any
thereof shall become past due.
(b) Borrower or such Subsidiary may in good faith contest, by
appropriate proceedings, the validity or amount of any material Charges
or claims described in Section 5.2(a); provided, that (i) adequate
reserves with respect to such contest are maintained on the books of
Borrower or such Subsidiary, in accordance with GAAP, (ii) no Lien
shall be imposed to secure payment of such Charges that is superior to
any of the Liens securing payment of the Obligations and such contest
is maintained and prosecuted 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, (iv)
and shall promptly pay or discharge such contested Charges or claims
and all additional charges, interest, penalties and expenses, if any,
and shall deliver to Agent evidence acceptable to Agent of such
compliance, payment or discharge, if such contest is terminated or
discontinued adversely to Borrower or such Subsidiary or the conditions
set forth in this Section 5.2(b) are no longer met, and (v) Agent has
not advised Borrower in writing that Agent reasonably believes that
nonpayment or nondischarge thereof would have or result in a Material
Adverse Effect.
5.3. Books and Records. Borrower shall and shall cause each of its
Subsidiaries to 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) Borrower shall, at its 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 acceptable to Agent. If Borrower at any time or times
hereafter shall fail to obtain or maintain any
20
27
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 which Agent deems advisable. Agent
shall have no obligation to obtain insurance for Borrower or pay any
premiums therefor. By doing so, Agent shall not be deemed to have
waived any Default or Event of Default arising from Borrower'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 Borrower to
Agent and shall be additional Obligations hereunder secured by the
Collateral.
(b) Agent reserves the right at any time upon any change in
Borrower's risk profile (including any change in the product mix
maintained by Borrower or any laws affecting the potential liability of
Borrower) to require additional forms and limits of insurance to, in
Agent's reasonable opinion, adequately protect both Agent's and
Lender's interests in all or any portion of the Collateral and to
ensure that Borrower is protected by insurance in amounts and with
coverage customary for its industry. If requested by Agent, but, so
long as no Default or Event of Default has occurred or is continuing,
no more frequently than annually, Borrower shall deliver to Agent from
time to time a report of a reputable insurance broker, satisfactory to
Agent, with respect to its insurance policies.
(c) Borrower shall deliver to Agent, in form and substance
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. Borrower irrevocably makes, constitutes and appoints Agent
(and all officers, employees or agents designated by Agent), so long as
any Default or Event of Default shall have occurred and be continuing,
as Borrower'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 Borrower 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 shall promptly notify Agent of any loss,
damage, or destruction to the Collateral in the amount of $100,000 or
more, whether or not covered by insurance. After deducting from such
proceeds the expenses, if any, incurred by Agent in the collection or
handling thereof, so long as an Event of Default has not occurred and
is continuing, Agent shall permit or require Borrower 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 process would not reasonably be
expected to have a Material Adverse Effect, Agent shall permit Borrower
to replace, restore, repair or rebuild the property; provided that if
Borrower has not completed or entered into binding agreements to
complete such replacement, restoration, repair or rebuilding within 180
days of such casualty, Agent may apply such insurance proceeds to the
Obligations in accordance with Section 1.3(d). All insurance proceeds
which are to be made available to Borrower to replace, repair, restore
or rebuild the Collateral shall be applied by Revolving Credit 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 Borrower shall forthwith proceed with diligence
to replace, repair, restore or rebuild the Collateral. 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(d).
5.5. Compliance with Laws. Borrower shall comply with and shall cause
each of its Subsidiaries to comply with all federal, state, local and foreign
laws and regulations applicable to it, including those relating to gaming, ERISA
and labor matters and Environmental Laws and Environmental Permits, except to
the extent that the failure to comply, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect.
5.6. Supplemental Disclosure. From time to time as may be requested by
Agent (which request will not be made more frequently than once each year absent
the occurrence and continuance of a Default or an Event of Default), Borrower
shall supplement each Disclosure Schedule hereto, or any representation herein
or in any other Loan Document, with respect to any matter hereafter arising
which, 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
21
28
such representation or which 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 be or be deemed a waiver of any Default or 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 as to
representations and warranties that relate solely to the Closing Date.
5.7. Intellectual Property. Borrower will and shall cause each of its
Subsidiaries to conduct its business and affairs without infringement of or
interference with any Intellectual Property of any other Person except to the
extent such infringement or interference would not reasonably be expected to
result in a Material Adverse Effect.
5.8. Environmental Matters. Borrower 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 Environmental Permits other
than noncompliance which would not reasonably be expected to have a Material
Adverse Effect; (b) notify Agent promptly after Borrower 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 which is reasonably likely
to result in Environmental Liabilities which would reasonably be expected to
result in a Material Adverse Effect; and (c) promptly forward to Agent a copy of
any written order, notice, request for information or any communication or
report received by such Person in connection with any such violation or Release
or any other matter relating to any Environmental Laws or Environmental Permits
that would reasonably be expected to result in Environmental Liabilities which
would reasonably result in a Material Adverse Effect, 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 Borrower or
any of its Subsidiaries 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, which, in each case, would reasonably be expected to have a
Material Adverse Effect, then such Person 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 Borrower's 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 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. Borrower
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 and Bailee Letters.
Borrower shall use its best efforts to obtain a landlord's agreement from the
lessor of each leased property of Borrower located in Boulder, Colorado
(Borrower's headquarters facility), Kent, Washington (warehouse) and Denver,
Colorado (refurbishing facility), which agreement or letter shall contain a
waiver or subordination of all Liens or claims that the landlord may assert
against the Inventory or Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to Agent. After the Closing Date,
no material real property or warehouse space shall be leased or acquired by
Borrower or any of its Subsidiaries and no material Inventory shall be shipped
to a processor or converter under arrangements established after the Closing
Date without the prior written consent of Agent or, unless and until a
satisfactory landlord or mortgagee agreement or bailee letter, as appropriate,
shall first have been obtained with respect to such location. Borrower and each
of its Subsidiaries shall timely and fully pay and perform its obligations under
all leases and other agreements with respect to each leased location or public
warehouse where any Collateral is or may be located.
5.10. Further Assurances. Borrower agrees that it shall and shall cause
each of its Subsidiaries, at such Person's expense and upon 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 or any other Loan
Document including, without limitation, the pledging of Borrower's Stock in its
Subsidiaries, to Agent.
22
29
6. NEGATIVE COVENANTS
Borrower agrees that, without the prior written consent of Agent and
the Requisite Lenders, from and after the date hereof until the Termination
Date:
6.1. Mergers, Subsidiaries, Etc. Borrower shall not, nor shall it
permit any of its Subsidiaries to, directly or indirectly, by operation of law
or otherwise, (a) form or acquire any Subsidiary (b) merge with, consolidate
with, acquire all or substantially all of the assets or capital stock of, or
otherwise combine with or acquire, any Person (provided that any Subsidiary of
Borrower may be merged into Borrower with Borrower being the surviving entity
and provided that ACMI Canada, Inc. may be wound up and dissolved in accordance
with the applicable laws of the State of Colorado), or (c) make Capital
Expenditures (subject to the limits set forth in Section (a) of Annex G).
Notwithstanding the foregoing, Borrower, may acquire all or substantially all of
the assets or capital Stock of any Person (the "Target") (in each case, a
"Permitted Acquisition") subject to the satisfaction of each of the following
conditions:
(i) The Target must be a franchisee of Borrower on
the Closing Date;
(ii) Agent shall receive at least twenty (20)
Business Days prior written notice of such proposed Permitted
Acquisition, which notice shall include a reasonably detailed
description of such proposed Permitted Acquisition;
(iii) such Permitted Acquisition shall only involve
assets located in the United States and/or Canada and comprising a
business, or those assets of a business, of or substantially related or
incidental to the type engaged in by Borrower as of the Closing Date,
and which business would not subject Agent or any Lender to regulatory
or third party approvals in connection with the exercise of its rights
and remedies under this Agreement or any other Loan Documents other
than approvals applicable to the exercise of such rights and remedies
with respect to Borrower prior to such Permitted Acquisition;
(iv) such Permitted Acquisition shall be consensual
and shall have been approved by the Target's board of directors;
(v) no additional Indebtedness, Guaranteed
Indebtedness, contingent obligations or other liabilities shall be
incurred, assumed or otherwise be reflected on a consolidated balance
sheet of Borrower and Target after giving effect to such Permitted
Acquisition, except (A) Loans made hereunder, (B) ordinary course trade
payables, accrued expenses and unsecured Indebtedness of the Target to
the extent no Default or Event of Default shall have occurred and be
continuing or would result after giving effect to such Permitted
Acquisition, and (C) Subordinated Debt in favor of the seller;
(vi) the sum of all amounts payable in connection
with all Permitted Acquisitions (including all transaction costs and
all Indebtedness, liabilities and contingent obligations incurred or
assumed in connection therewith or otherwise reflected on a
consolidated balance sheet of Borrower and Target) other than the
Senarc Acquisition, shall not exceed $1,000,000 during any Fiscal Year.
(vii) the sum of all amounts payable in connection
with the Senarc Acquisition (including all transaction costs and all
Indebtedness, liabilities and contingent obligations incurred or
assumed in connection therewith or otherwise reflected on a
consolidated balance sheet of Borrower and Target), shall not exceed
$1,300,000 and the portion of the amount payable in connection with the
Senarc Acquisition in cash (including lease buyouts) shall not exceed
$500,000;
(viii) the Target shall not have incurred an
operating loss for the trailing twelve-month period preceding the date
of the Permitted Acquisition, as determined based upon the Target's
Financial Statements for its most recently completed fiscal year and
its most recent interim financial period completed within sixty (60)
days prior to the date of consummation of such Permitted Acquisition;
23
30
(ix) the business and assets acquired in such
Permitted Acquisition shall be free and clear of all Liens (other than
Liens permitted under Section 6.7));
(x) at or prior to the closing of any Permitted
Acquisition, Agent will be granted a first priority perfected Lien
(subject to Liens permitted under Section 6.7) in the assets acquired
pursuant thereto or in the assets and capital stock of the Target, and
Borrower and the Target shall have executed such documents and taken
such actions as may be required by Agent in connection therewith;
(xi) Concurrently with delivery of the notice
referred to in clause (i) above, Borrower shall have delivered to
Agent, in form and substance satisfactory to Agent:
(A) a pro forma consolidated balance sheet,
income statement and cash flow statement of Borrower
and its Subsidiaries (the "Acquisition Pro Forma"),
based on recent financial statements, which shall be
complete and shall fairly present in all material
respects the assets, liabilities, financial condition
and results of operations of Borrower and its
Subsidiaries in accordance with GAAP, but taking into
account such Permitted Acquisition and the funding of
all Loans in connection therewith, and such
Acquisition Pro Forma shall reflect that (x) on a pro
forma basis, no Event of Default shall have occurred
and be continuing or would result after giving effect
to such Permitted Acquisition and (y) Borrower would
have been in compliance with the financial covenants
set forth in Annex G for the four quarter period
reflected in the Compliance Certificate most recently
delivered to Agent pursuant to Annex E prior to the
consummation of such Permitted Acquisition (giving
effect to such Permitted Acquisition and all Loans
funded in connection therewith as if made on the
first day of such period);
(B) updated versions of the most recently
delivered Projections covering the one (1) year
period commencing on the date of such Permitted
Acquisition and otherwise prepared in accordance with
the Projections (the "Acquisition Projections") and
based upon historical financial data of a recent date
satisfactory to Agent, taking into account such
Permitted Acquisition; and
(C) a certificate of the chief financial
officer of Borrower to the effect that: (w) Borrower
will be Solvent upon the consummation of the
Permitted Acquisition; (x) the Acquisition Pro Forma
fairly presents the financial condition of Borrower
as of the date thereof after giving effect to the
Permitted Acquisition; (y) the Acquisition
Projections are reasonable estimates of the future
financial performance of Borrower subsequent to the
date thereof based upon the historical performance of
Borrower and the Target and show that Borrower shall
continue to be in compliance with the financial
covenants set forth in Annex G for the three (3) year
period thereafter; and (z) Borrower has completed
their due diligence investigation with respect to the
Target and such Permitted Acquisition, which
investigation was conducted in a manner similar to
that which would have been conducted by a prudent
purchaser of a comparable business and the results of
which investigation were delivered to Agent and
Lenders;
(xii) on or prior to the date of such Permitted
Acquisition, Agent shall have received, in form and substance
satisfactory to Agent, copies of the acquisition agreement and related
agreements and instruments, and all opinions, certificates, lien search
results and other documents reasonably requested by Agent;
(xiii) with respect to the Senarc Acquisition only,
such Permitted Acquisition must be completed on or before June 30,
2001; and
(xiv) at the time of such Permitted Acquisition and
after giving effect thereto, no Default or Event of Default shall have
occurred and be continuing.
24
31
Notwithstanding anything herein to the contrary, if Borrower, at any time,
desires to make an acquisition which is not a Permitted Acquisition solely by
reason of the fact that such acquisition would cause the limit set forth in
Section 6.1(vi) to be exceeded, Borrower shall deliver written notice of its
desire, along with all relevant documentation available in connection with such
proposed acquisition, to Agent, Revolving Credit Agent and each Lender. Agent,
Revolving Credit Agent and each of the Lenders shall use their best efforts to
review such information and provide written notice of approval or disapproval of
such acquisition to Agent within ten (10) Business Days following receipt of the
initial request from Borrower. Agent will use its best efforts to respond with
the Lenders' approval or disapproval to Borrower within a time period ending on
the date which is ten (10) Business Days following the latest delivery of such
request to Agent, Revolving Credit Agent or any of the Lenders. If Agent,
Revolving Credit Agent and all of the Lenders approve such acquisition as
presented, and written notice of approval is delivered to Borrower by Agent
within such ten (10) Business Day period, such acquisition shall be deemed a
Permitted Acquisition. If any Lender disapproves such acquisition, or fails to
respond to Agent or if Agent shall fail to respond to Borrower for any reason,
in either case before the expiration of such ten (10) Business Day period,
Borrower shall be prohibited from pursuing such acquisition. Failure to deliver
notice of approval shall, for all purposes, be deemed a denial of Borrower's
request for approval of such acquisition. Neither Agent, Revolving Credit Agent
or any Lender shall have any liability to Borrower or any other Person for any
failure to (i) approve any such proposed acquisition, or (ii) failure to provide
notice to Borrower of approval or disapproval of such proposed acquisition
within such ten (10) Business Day period.
6.2. Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, Borrower shall not, nor shall it permit its
Subsidiaries to 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 that (a)
Borrower may hold investments comprised of notes payable, or stock or other
securities issued by Account Debtors to Borrower pursuant to negotiated
agreements with respect to settlement of such Account Debtor's Accounts in the
ordinary course of business, so long as the aggregate amount of such Accounts so
settled by Borrower does not exceed $100,000; (b) Borrower may maintain its
existing investments in its Subsidiaries as of the Closing Date; and (c)
Borrower may make investments subject to Control Letters in favor of Agent for
the benefit of Lenders as may reasonably requested by Agent in cash and Cash
Equivalents, (d) Borrower may maintain its existing unsecured junior
subordinated Indebtedness to American Coin Merchandising Trust I in the form of
an intracompany junior subordinated debenture in the original principal amount
equal to the aggregate original principal amount of $17,000,000, (e) Permitted
Acquisitions satisfying the conditions set forth in and consummated pursuant to
Section 6.1, (f) extensions of credit in the form of Guaranteed Obligations to
the extent expressly permitted by Section 6.6, (g) subject to Section
1.3(b)(iii), investments of the net proceeds of new cash equity raised by
Borrower subsequent to the Closing Date; provided that such net proceeds are
invested in the business of Borrower, (h) loans and advances to employees of
Borrower and its Subsidiaries as permitted in Section 6.4(b), (i) investments in
the form of any interest rate protection or hedging contract entered into with
any Lender as counterparty and approved by Agent, (j) investments set forth on
Schedule (6.2), (k) additional investments by Borrower in the aggregate amount
invested after the Closing Date not to exceed at any time outstanding
$200,000,and (l) investments received in connection with the bankruptcy or
reorganization of customers or clients and in settlement of delinquent
obligations of, and other disputes with, customers or clients.
6.3. Indebtedness.
(a) Borrower shall not, nor shall it permit its Subsidiaries
to, create, incur, assume or permit to exist any Indebtedness, except
(without duplication) (i) Indebtedness secured by purchase money
security interests and Capitalized Leases permitted in clause (c) of
Section 6.7, (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
thereof which do not have the effect of increasing the principal amount
thereof or changing the amortization thereof (other than to extend the
same) and which are otherwise on terms and conditions no less favorable
in any material respect to Borrower or any Subsidiary, Agent or any
Lender, as determined by Agent, than the terms of the Indebtedness
being refinanced, amended or modified, (v) Indebtedness specifically
permitted under Section 6.1, (vi) Indebtedness incurred pursuant to any
interest rate protection or hedging contract entered into with any
Lender as counterparty and approved by Agent, (vii) Indebtedness
secured by Liens permitted by Section 6.7(c), (d) or (e), (viii)
endorsements for collection or deposit in the ordinary course of
business,
25
32
(viii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument drawn
against insufficient funds in the ordinary course of Business provided
that such Indebtedness is extinguished with five (5) Business Days of
its incurrence, (ix) Indebtedness of any Subsidiary to Borrower which
constitutes Investments permitted under Section 6.2 and (x) other
unsecured Indebtedness of Borrower not to exceed $500,000 in the
aggregate principal amount outstanding at any time.
(b) Borrower shall not, nor shall it permit any of its
Subsidiaries to, directly or indirectly, voluntarily purchase, (other
than at stated maturity) redeem, defease or prepay any principal of,
premium, if any, interest or other amount payable in respect of any
Subordinated Debt.
6.4. Employee Loans and Affiliate Transactions.
(a) Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into or be a party to any transaction with any
Affiliate thereof except in the ordinary course of and pursuant to the
reasonable requirements of such Person's business and upon fair and
reasonable terms that are no less favorable to such Person than would
be obtained in a comparable arm's length transaction with a Person not
an Affiliate of such Person. In addition, if any such transaction or
series of related transactions involves payments in excess of $100,000
in the aggregate to any Person other than Borrower or any Subsidiary
thereof, the terms of these transactions must be disclosed in advance
to Agent and Lenders. All such transactions existing as of the date
hereof are described on Disclosure Schedule (6.4(a)).
(b) Borrower shall not and shall not permit any of its
Subsidiaries to enter into any lending or borrowing transaction with
any employees of any such Person, except loans to its respective
employees on an arm's-length basis in the ordinary course of business
consistent with past practices for travel expenses, relocation costs
and similar purposes.
6.5. Capital Structure and Business. Borrower shall not (a) make any
changes in any of its business objectives, purposes or operations which would
reasonably be expected to have or result in a Material Adverse Effect, or (b)
amend its charter or bylaws in a manner which would materially and adversely
affect Agent, Revolving Credit Agent or Lenders or Borrower's duty or ability to
repay the Obligations. Borrower shall not engage in any business other than the
businesses currently engaged in by it or businesses reasonably related or
incidental thereto.
6.6. Guaranteed Indebtedness. Borrower shall not, and shall not permit
any of its Subsidiaries to create, incur, assume or permit to exist any
Guaranteed Indebtedness except by endorsement of instruments or items of payment
for deposit to the general account of such Person.
6.7. Liens. Borrower shall not, and shall not permit any of its
Subsidiaries to 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 Disclosure Schedule (6.7), (c)
purchase-money security interests in goods or software acquired or held by
Borrower in the ordinary course of business comprising purchase-money collateral
securing purchase-money obligations not to exceed $500,000 outstanding at any
one time for all such Liens, incurred or assumed solely for the purpose of
financing all or any part of the cost of acquiring such property; provided that
(i) any such Lien attaches to such property and is perfected within the
statutory period for the temporary perfection of purchase-money security
interests provided in the Code in effect in the applicable jurisdiction and (ii)
such Lien attaches solely to the property so acquired in such transaction; (d)
Liens in the form of Capitalized Leases entered into by Borrower, provided that
such Lien attaches solely to the property so acquired in such transaction on
property subject to such Capitalized Lease, and provided further that the
aggregate principal amount of the Indebtedness secured by such Liens shall not
exceed at any one time $1,000,000; (e) Liens arising out of conditional sale,
title retention, consignment or similar arrangements for sale of goods entered
into by Borrower in the ordinary course of business not materially interfering
with the conduct of the business of Borrower; (f) non-exclusive licenses or
sublicenses of Intellectual Property by Borrower granted to other Persons in the
ordinary course of business not materially interfering with the conduct of the
business of Borrower and its Subsidiaries taken as a whole; (g) any interest of
a
26
33
licensor or sublicensor under any license or sublicense as to which Borrower is
the licensee or sublicensee; and (h) other Liens securing the Obligations. In
addition, Borrower shall not, and shall not permit any of its Subsidiaries to,
become a party to any agreement, note, indenture or instrument, or take any
other action, which 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. Borrower shall not, and shall not permit
any of its Subsidiaries to, sell, transfer, convey, assign or otherwise dispose
of any of its properties or other assets, including the capital Stock of any of
its Subsidiaries (whether in a public or a private offering or otherwise) or any
of their Accounts, other than (a) the sale of Inventory in the ordinary course
of business, and (b) the sale, transfer, conveyance or other disposition by such
Person of assets that are obsolete or no longer used or useful in such Person's
business, provided that the proceeds received for such sale, transfer,
conveyance or other disposition must be cash, Indebtedness permitted under
Section 6.3(vii), or new fixed assets received in trade. All cash proceeds
received shall be applied as set forth in Section 1.3 above, and all new fixed
assets received must, notwithstanding anything herein to the contrary, (i) be
free and clear of all Liens including purchase money Liens other than a Lien in
favor of Agent, (ii) be subject, in a manner satisfactory to Agent in Agent's
sole discretion, to a first priority security interest in favor of Agent for the
benefit of Lenders, and (c) other Equipment and Fixtures; provided that assets
which are sold as permitted under clauses (b) and (c) above shall not exceed
$1,250,000 in the aggregate in any Fiscal Year of Borrower . With respect to any
disposition of assets or other properties permitted pursuant to clause (b) and
clause (c) above, Agent agrees on reasonable prior written notice to release its
Lien on such assets or other properties in order to permit Borrower to effect
such disposition and shall execute and deliver to Borrower, at Borrower's
expense, appropriate UCC-3 termination statements and other releases as
reasonably requested by Borrower.
6.9. ERISA. Borrower shall not, nor shall it cause or permit any ERISA
Affiliate to, cause or permit to occur an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
would reasonably be expected to have a Material Adverse Effect.
6.10. Financial Covenants. Borrower shall not breach or fail to comply
with any of the Financial Covenants (the "Financial Covenants") set forth in
Annex G.
6.11. Hazardous Materials. Borrower shall not, and shall not permit any
of its Subsidiaries, to cause or permit a Release of any Hazardous Material on,
at, in, under, above, to, from or about any of the Real Estate where such
Release would (a) violate in any respect, or form the basis for any
Environmental Liabilities under, any Environmental Laws or Environmental Permits
or (b) otherwise adversely impact the value or marketability of any of the Real
Estate or any of the Collateral, other than such violations or Environmental
Liabilities which individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect.
6.12. Sale Leasebacks. Borrower shall not, and shall not permit any of
its Subsidiaries to, engage in any sale-leaseback, synthetic lease or similar
transaction involving any of its assets.
6.13. Cancellation of Indebtedness. Borrower shall not, and shall not
permit any of its Subsidiaries to, cancel any claim or debt owing to it in
excess of $100,000 except for reasonable consideration negotiated on an
arm's-length basis and in the ordinary course of its business consistent with
past practices.
6.14. Restricted Payments. Borrower shall not, and shall not permit any
of its Subsidiaries to, make any Restricted Payment, except (a) dividends and
distributions by Subsidiaries of Borrower paid to Borrower, (b) dividends
payable solely in Stock of Borrower or rights to purchase Stock of Borrower; (c)
the repurchase or redemption of Stock of Borrower held by any employee, officer
or director upon the death, disability, or termination of employment of such
Person by Borrower or any its Subsidiaries; (d) employee loans permitted under
Section 6.4(b) above, and (e) scheduled payments of principal and interest with
respect to the Subordinated Debt, provided no payment under clauses (c), (d) and
(e) may be made at any time a Default or Event of Default exists.
27
34
6.15. Change of Corporate Name or Location; Change of Fiscal Year.
Borrower shall not, and shall not permit any of its Subsidiaries to, (a) change
its corporate name, (b) change its chief executive office or principal place of
business, the location of its records concerning the Collateral or jurisdiction
of organization, or (c) corporate offices or warehouses or locations at which
Collateral is held or stored (other than retail stores or other establishments
in which Borrower's Equipment is exposed to the public), in the any case without
at least thirty (30) days prior written notice to Agent (except for action taken
under clause (c) in which case notice must be made to Agent prior to such
change) 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 or jurisdiction
of organization shall be in the continental United States. Without limiting the
foregoing, Borrower shall not change its name, identity or corporate structure
in any manner which might make any financing or continuation statement filed in
connection herewith seriously misleading within the meaning of Section 9-402(7)
of the Code or any other then applicable provision of the Code except upon prior
written notice to Agent and Lenders 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. Borrower shall not change its
Fiscal Year.
6.16. No Impairment of Intercompany Transfers. Borrower shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly enter into
or become bound by any agreement, instrument, indenture or other obligation
(other than this Agreement and the other Loan Documents) which could directly or
indirectly restrict, prohibit or require the consent of any Person with respect
to the payment of dividends or distributions or the making or repayment of
intercompany loans by a Subsidiary of Borrower to Borrower.
6.17. No Speculative Transactions. Borrower shall not, and shall not
permit any of its Subsidiaries to, engage in any transaction involving commodity
options, futures contracts or similar transactions, except solely to hedge
against fluctuations in the prices of commodities owned or purchased by it and
the values of foreign currencies receivable or payable by it and interest swaps,
caps or collars.
6.18. Leases. Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any operating lease for Equipment or Real Estate, if
the aggregate of all such operating lease payments payable in any year for
Borrower and its Subsidiaries on a consolidated basis would exceed $3,000,000.
6.19. Changes Relating to Subordinated Debt. Borrower shall not, and
shall not permit any of its Subsidiaries to, change or amend the terms of any
Subordinated Debt (or any indenture or agreement in connection therewith) if the
effect of such amendment is to: (a) increase the interest rate on such
Subordinated Debt; (b) change the dates upon which payments of principal or
interest are due on such Subordinated Debt other than to extend such dates; (c)
change any default or event of default other than to delete or make less
restrictive any default provision therein, or add any covenant with respect to
such Subordinated Debt; (d) change the redemption or prepayment provisions of
such Subordinated Debt other than to extend the dates therefor or to reduce the
premiums payable in connection therewith; (e) grant any security or collateral
to secure payment of such Subordinated Debt; or (f) change or amend any other
term if such change or amendment would materially increase the obligations of
the obligor or confer additional material rights to the holder of such
Subordinated Debt in a manner materially adverse to Borrower, any of its
Subsidiaries, Agent, Revolving Credit Agent or any Lender.
7. TERM
7.1. Termination. The financing arrangements contemplated hereby, other
than Revolving Lenders' obligation to make Revolving Credit Advances or to incur
obligations with respect to Letters of Credit (which such obligations shall
terminate on the Commitment Termination Date), shall be in effect until the Term
Loan Termination Date, and the Term Loan 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
28
35
of Borrower 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 or the Term Loan 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 Borrower, 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 however, that in all events 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:
(a) Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse
Agent, Revolving Credit Agent or Lenders for any expense reimbursable
hereunder or under any other Loan Document within ten (10) days
following Agent's demand for such reimbursement or payment of expenses.
(b) Borrower shall fail or neglect to perform, keep or observe
any of the provisions of Sections 1.4, 5.4 or 6, or any of the
provisions set forth in Annex G.
(c) Borrower shall fail or neglect to perform, keep or observe
any of the provisions of Section 4 or any provisions set forth in Annex
E, and the same shall remain unremedied for five (5) Business Days or
more.
(d) Borrower shall fail or neglect 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 (20) days or more.
(e) A default or breach shall occur under any other agreement,
document or instrument to which Borrower or any of its Subsidiaries is
a party which is not cured within any applicable grace period, and such
default or breach (i) involves the failure to make any payment when due
in respect of any Indebtedness (other than the Obligations) of any such
Person in excess of $5,000,000 in the aggregate, or (ii) causes, or
permits any holder of such Indebtedness or a trustee to cause,
Indebtedness or a portion thereof in excess of $5,000,000 in the
aggregate to become due prior to its stated maturity or prior to its
regularly scheduled dates of payment, regardless of whether such
default is waived, or such right is exercised, by such holder or
trustee.
(f) Assets of Borrower or any of its Subsidiaries with a fair
market value of $100,000 or more shall be 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 such Person and such condition continues for
thirty (30) days or more.
(g) A case or proceeding shall have been commenced against
Borrower or any of its Subsidiaries seeking a decree or order in
respect of such Person (i) under Title 11 of the United States Code, as
now constituted or hereafter amended 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 Person or of any substantial part of any
such Person's assets, or (iii) ordering the winding-up or liquidation
of the affairs of such Person (other than any voluntary winding-up of
ACMI Canada, Inc., by Borrower under the laws of the State of
Colorado), and such case or proceeding shall remain undismissed or
unstayed for sixty (60) days or more or such court shall enter a decree
or order granting the relief sought in such case or proceeding.
29
36
(h) Borrower or any of its Subsidiaries (i) shall file a
petition seeking relief under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other applicable federal,
state or foreign bankruptcy or other similar law, (ii) shall fail to
contest in a timely and appropriate manner or shall consent to the
institution of proceedings thereunder or to the filing of any such
petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar
official) of Borrower or any of its Subsidiaries or of any substantial
part of any such Person's assets, (iii) shall make an assignment for
the benefit of creditors, or (iv) shall take any corporate action in
furtherance of any of the foregoing, or (v) shall admit in writing its
inability to, or shall be generally unable to, pay its debts as such
debts become due.
(i) A final judgment or judgments for the payment of money to
the extent not covered by independent third party insurance in excess
of $500,000 in the aggregate at any time outstanding shall be rendered
against Borrower or any of its Subsidiaries and the same shall not,
within thirty (30) days after the entry thereof, have been discharged
or execution thereof stayed or bonded pending appeal, or shall not have
been discharged prior to the expiration of any such stay.
(j) Any material provision of any Loan Document shall for any
reason cease to be valid, binding and enforceable in accordance with
its terms (or Borrower 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 security interest
created under any Loan Document shall cease to be a valid and perfected
first priority security interest or Lien (except as otherwise permitted
herein or therein) in any of the Collateral purported to be covered
thereby.
(k) Any Change of Control shall occur.
(l) Any event shall occur, whether or not insured or
insurable, as a result of which revenue-producing activities cease or
are substantially curtailed at any facility of Borrower generating more
than ten percent (10%) of Borrower's revenues for the Fiscal Year
preceding such event and such cessation or curtailment continues for
more than 20 days.
8.2. Remedies.
(a) If any Event of Default shall have occurred and be
continuing, or if a Default shall have occurred and be continuing and
Agent or Requisite Revolving Lenders shall have determined not to make
any Advances or incur any obligations with respect to any Letter of
Credit so long as that specific Default is continuing, Agent may (and
at the written request of the Requisite Revolving Lenders shall),
without notice, suspend the Revolving Loan facility with respect to
further Advances and/or the incurrence of further obligations with
respect to Letters of Credit whereupon any further Advances and
obligations with respect to Letters of Credit shall be made or extended
in Agent's sole discretion (or in the sole discretion of the Requisite
Revolving Lenders, if such suspension occurred at their direction) so
long as such Default or Event of Default is continuing. If any Default
or Event of Default shall have occurred and be 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 shall have occurred and be
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
obligations with respect to Letters of Credit; (ii) 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 as reasonably requested by Revolving
Credit Agent, all without presentment, demand, protest or further
notice of any kind, all of which are expressly waived by Borrower; and
(iii) exercise any rights and remedies provided to Agent under the Loan
Documents and/or at law or equity, including all remedies provided
under the Code; provided, however, that upon the occurrence of an Event
of Default specified in Sections 8.1(g) or (h), the
30
37
Revolving Loan facility shall be immediately terminated and all of the
Obligations, including the Revolving Loan, shall become immediately due
and payable without declaration, notice or demand by any Person.
8.3. Waivers by Borrower. Except as otherwise provided for in this
Agreement or by applicable law, Borrower waives: (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 Borrower 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
which 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) Borrower hereby consents to any Lender's assignment of,
and/or sale of participations in, at any time or times, the Loan
Documents, Loans, Letter of Credit Obligations and any Commitment or of
any portion thereof or interest therein, including any Lender's rights,
title, interests, remedies, powers or duties thereunder, whether
evidenced by a writing or not. Any assignment by a Lender shall (i)
require the consent of Agent (which shall not be unreasonably withheld
or delayed) 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 satisfactory to, and
acknowledged by, Agent; (ii) be conditioned on such assignee Lender
representing to the assigning Lender and 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) if a partial assignment, be in an amount at least equal to
$5,000,000 and, after giving effect to any such partial assignment, the
assigning Lender shall have retained Commitments in an amount at least
equal to $5,000,000; and (iv) include a payment to Agent of an
assignment fee of $3,500. 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 it would if it
were a Lender hereunder. The assigning Lender shall be relieved of its
obligations hereunder with respect to its Commitments or assigned
portion thereof from and after the effective date of such assignment.
Borrower hereby acknowledges and agrees that any assignment will give
rise to a direct obligation of Borrower 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 Borrower and Borrower 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), 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, and 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, however, 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.
(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 Borrower 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
31
38
other Loan Documents). Solely for purposes of Sections 1.11, 1.13, 1.14
and 9.8, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender". Except as set forth
in the preceding sentence Borrower shall not 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.
(c) Except as expressly provided in this Section 9.1, no
Lender shall, as between Borrower 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) Borrower 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 requested and the preparation of informational materials for,
and the participation of management in meetings with, potential
assignees or participants.
(e) Borrower and each of its Subsidiaries shall, in connection
with the further syndication and sale by GE Capital of a portion of its
Commitments, provide a certification of the material correctness and
accuracy of written information and materials which are either provided
by Borrower or prepared with Borrower's input and assistance and which
are to be used in connection with the sale of such Commitments, except
that any Projections delivered by Borrower shall only be certified by
Borrower a having been prepared by Borrower in compliance with the
representations contained in Section 3.4(c).
(f) Subject to Section 11.8, a Lender may furnish any
information concerning Borrower in the possession of such Lender from
time to time to assignees and participants (including prospective
assignees and participants). Each Lender shall obtain from assignees or
participants confidentiality covenants substantially equivalent to
those contained in Section 11.8.
(g) So long as no Event of Default shall have occurred and be
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(a).
9.2. Appointment of Agent and Revolving Credit Agent.
(a) 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 neither Borrower 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, 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 Borrower 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. 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.
32
39
(b) If Agent shall request instructions from Requisite
Lenders, Requisite 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,
Requisite 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, Requisite Revolving Lenders, or all affected
Lenders, as applicable.
(c) Comerica is hereby appointed to act on behalf of the
Revolving Lenders as Revolving Credit Agent under this Agreement and
the other Loan Documents. Revolving Credit Agent shall have the powers
and rights specifically set forth herein with respect to the Revolving
Loan only (subject to the qualifications hereinafter listed), and Agent
shall have no responsibility or liability, of any type or nature, with
respect to the performance of such agency by Revolving Credit Agent.
Notwithstanding anything herein to the contrary, Revolving Credit Agent
shall have no right to act in any capacity, except as a Lender (i) with
respect to the Term Loan, or (ii) to take any action in connection with
any situation which involves the Loans, or (iii) which involves any
action in connection with any Collateral, or (iv) which involves any
waiver, amendment, modification, Default or Event of Default, or the
exercise of any remedy under this Agreement, any of the Loan Documents,
or otherwise. The Requisite Revolving Lenders may, at any time, or from
time to time, rescind such appointment by notice to the then current
Revolving Credit Agent and appoint a successor agent to act as
Revolving Credit Agent.
9.3. Agent's Reliance, Etc. Neither Agent nor any of its Affiliates nor
Revolving Credit 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 limitation of the generality of the
foregoing, Agent and Revolving Credit Agent: (a) may treat the payee of any Note
as the holder thereof until Agent or Revolving Credit Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
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 in good faith by it 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
Borrower or to inspect the Collateral (including the books and records) of
Borrower; (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, Comerica and Affiliates. With respect to their
Commitments hereunder, GE Capital and Comerica 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 they were not Agent and the Revolving Credit
Agent, respectively; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include GE Capital and Comerica in their individual
capacity. GE Capital, Comerica and their Affiliates may lend money to, invest
in, and generally engage in any kind of business with, Borrower, any of their
Affiliates and any Person who may do business with or own securities of Borrower
or any such Affiliate, all as if GE Capital and Comerica were not Agent and
Revolving Credit Agent, respectively, and without any duty to account therefor
to Lenders. GE Capital, Comerica and their Affiliates may accept fees and other
consideration from Borrower for services in connection with this Agreement or
33
40
otherwise without having to account for the same to Lenders. Each Lender
acknowledges the potential conflict of interest between GE Capital and Comerica
as Lenders holding disproportionate interests in the Loans and GE Capital and
Comerica as Agent and Revolving Credit Agent, respectively.
9.5. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent, Revolving Credit 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 Borrower and its Subsidiaries and its own
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon Agent, Revolving Credit 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 and Revolving
Credit Agent (to the extent not reimbursed by Borrower and without limiting the
obligations of Borrower 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 which may be imposed on, incurred by, or
asserted against Agent or Revolving Credit Agent in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted by Agent or Revolving Credit Agent in connection therewith; provided,
however, 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 or Revolving Credit Agent's
gross negligence or willful misconduct. Without limiting the foregoing, each
Lender agrees to reimburse Agent or Revolving Credit Agent (as applicable)
promptly upon demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by Agent or Revolving Credit 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 or Revolving Credit Agent is not reimbursed for such expenses
by Borrower.
9.7. Successor Agent. Agent or Revolving Credit Agent may resign at any
time by giving not less than thirty (30) days' prior written notice thereof to
Lenders and Borrower. Upon any such resignation of Agent, the Requisite Lenders
shall have the right to appoint a successor Agent. Upon any such resignation of
Revolving Credit Agent, the Requisite Revolving Lenders shall have the right to
appoint a successor Revolving Credit Agent. If no successor Agent or Revolving
Credit Agent shall have been so appointed by the Requisite Lenders or the
Requisite Revolving Lenders and shall have accepted such appointment within 30
days after the resigning Agent's or Revolving Credit Agent's giving notice of
resignation, then the resigning Agent or Revolving Credit Agent may, on behalf
of Lenders or the Revolving Lenders, appoint a successor Agent or Revolving
Credit Agent, which shall be a Lender or a Revolving Lender as the case may be,
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 or Revolving Credit Agent has been appointed pursuant to the foregoing, by
the 30th day after the date such notice of resignation was given by the
resigning Agent or Revolving Credit Agent, such resignation shall become
effective and the Requisite Lenders shall thereafter perform all the duties of
Agent or the Revolving Lender with the largest Revolving Loan Commitment shall
perform the duties of the Revolving Credit Agent hereunder until such time, if
any, as the Requisite Lenders or the Requisite Revolving Lenders appoint a
successor Agent or Revolving Credit Agent as provided above. Any successor Agent
or Revolving Credit Agent appointed by Requisite Lenders hereunder shall be
subject to the approval of Borrower, 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 shall have occurred and be continuing. Upon the
acceptance of any appointment as Agent or Revolving Credit Agent hereunder by a
successor Agent or Revolving Credit Agent, such successor Agent or Revolving
Credit Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Agent or Revolving Credit Agent. Upon the
earlier of the acceptance of any appointment as Agent or Revolving Credit Agent
hereunder by a successor Agent or Revolving Credit Agent or the effective date
of the resigning Agent's or Revolving Credit Agent's resignation, the resigning
Agent or Revolving Credit Agent shall be discharged from its duties and
obligations under this Agreement
34
41
and the other Loan Documents, except that any indemnity rights or other rights
in favor of such resigning Agent or Revolving Credit Agent shall continue. After
any resigning Agent's or Revolving Credit 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 Agent or Revolving Credit 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,
each Lender and each holder of any Note is hereby authorized at any time or from
time to time, without notice to Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all balances held by it at any of its offices for the account of Borrower
(regardless of whether such balances are then due to Borrower) and any other
properties or assets any time held or owing by that Lender or that holder to or
for the credit or for the account of Borrower against and on account of any of
the Obligations which are not paid when due. Any Lender or holder of any Note
exercising a right to set off 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 set off or otherwise
received with each other Lender or holder in accordance with their respective
Pro Rata Shares. Borrower agrees, to the fullest extent permitted by law, that
(a) any Lender or holder may exercise its right to set off with respect to
amounts in excess of its Pro Rata Share of the Obligations and may sell
participations in such amount so set off to other Lenders and holders and (b)
any Lender or holders so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of set-off,
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 set-off amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
set-off, the purchase of participations by that Lender shall be rescinded and
the purchase price restored without interest.
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) Each Revolving Lender shall make the amount of
such Lender's Pro Rata Share of such Revolving Credit Advance available
to Revolving Credit Agent in same day funds by wire transfer to
Revolving Credit Agent's account as set forth in Annex H not later than
3:00 p.m. (New York time) on the requested funding date, in the case of
a Base Rate Loan and not later than 11:00 a.m. (New York time) on the
requested funding date in the case of a LIBOR Loan. After receipt of
such wire transfers (or, in the Revolving Credit Agent's sole
discretion, before receipt of such wire transfers), subject to the
terms hereof, Revolving Credit Agent shall make the requested Revolving
Credit Advance to Borrower. All payments by each Revolving Lender shall
be made without setoff, counterclaim or deduction of any kind.
(ii) To the extent that any Lender (a "Non-Funding
Lender") has failed to fund any required payments and Advances or
failed to fund the purchase of any required participations, Revolving
Credit 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 Borrower.
(b) Availability of Lender's Pro Rata Share. Revolving Credit
Agent may assume that each Revolving Lender will make its Pro Rata
Share of each Revolving Credit Advance available to Revolving Credit
Agent on each funding date. If such Pro Rata Share is not, in fact,
paid to Revolving Credit Agent by such Revolving Lender when due,
Revolving Credit Agent will be entitled to recover such amount on
demand from such Revolving Lender without set-off, counterclaim or
deduction of any kind. If any Revolving Lender fails to pay the amount
of its Pro Rata Share forthwith upon Revolving Credit Agent's demand,
Revolving Credit Agent shall promptly notify Borrower and Borrower
shall immediately repay such amount to Revolving Credit Agent. Nothing
in this Section 9.9(b) or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require Revolving Credit Agent to advance
funds on behalf of any Revolving Lender or to relieve any Revolving
Lender from its obligation to fulfill its Commitments
35
42
hereunder or to prejudice any rights that Borrower may have against any
Revolving Lender as a result of any default by such Revolving Lender
hereunder. To the extent that Revolving Credit Agent advances funds to
Borrower on behalf of any Revolving Lender and is not reimbursed
therefor on the same Business Day as such Advance is made, Revolving
Credit 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 or Revolving Credit 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 or Revolving
Credit Agent from Borrower and such related payment is not received by
Agent or Revolving Credit Agent, then Agent or Revolving Credit Agent
will be entitled to recover such amount from such Lender on demand
without set-off, counterclaim or deduction of any kind.
(ii) If Agent or Revolving Credit Agent determines at
any time that any amount received by Agent or Revolving Credit Agent
under this Agreement must be returned to 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 or Revolving Credit Agent will not be
required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent or Revolving Credit Agent on demand any
portion of such amount that Agent or Revolving Credit Agent has
distributed to such Lender, together with interest at such rate, if
any, as Agent or Revolving Credit Agent is required to pay to Borrower
or such other Person, without set-off, 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, shall not relieve any other Revolving 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 or to purchase a participation
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 "Requisite Revolving Lenders" hereunder) for
any voting or consent rights under or with respect to any Loan
Document.
(e) Dissemination of Information. Agent will use reasonable
efforts to provide Lenders with any notice of Default or Event of
Default received by Agent from, or delivered by Agent to, Borrower,
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, however, that Agent shall not be 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 Borrower is 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 set-off) 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.
(g) Notice of Change of Prime Rate. So long as Comerica is the
Revolving Credit Agent, Comerica shall deliver written notice of any
change in the Prime Rate to Agent.
36
43
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
Borrower, Agent, Revolving Credit Agent, Lenders and their respective
successors and assigns (including, in the case of Borrower, a
debtor-in-possession on behalf of Borrower), except as otherwise
provided herein or therein. Borrower may not 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, Revolving Credit Agent and
Lenders. Any such purported assignment, transfer, hypothecation or
other conveyance by Borrower without the prior express written consent
of Agent, Revolving Credit 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 Borrower, Agent, Revolving Credit
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 below. Any letter of interest, commitment letter, and/or
fee letter (other than the Fee Letters) and/or confidentiality agreement between
Borrower 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.
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 Agreement or any of the Notes, or any consent to any
departure by Borrower therefrom, shall in any event be effective unless
the same shall be in writing and signed by Agent, Revolving Credit
Agent and Borrower, and by Requisite Lenders, or Requisite 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 which waives
compliance with the conditions precedent set forth in Section 2.2 to
the making of any Loan or the incurrence of any obligation with respect
to any Letters of Credit shall be effective unless the same shall be in
writing and signed by Agent, Requisite Revolving Lenders and Borrower.
Notwithstanding anything contained in this Agreement to the contrary,
no waiver or consent with respect to any Default (if in connection
therewith Agent or Requisite Revolving Lenders, as the case may be,
have exercised its or their right to suspend the making or incurrence
of further Advances or obligations with respect to Letters of Credit
pursuant to Section 8.2(a)) or any Event of Default shall be effective
for purposes of the conditions precedent to the making of Loans or the
incurrence of obligations with respect to Letters of Credit set forth
in Section 2.2 unless the same shall be in writing and signed by Agent,
Revolving Credit Agent, Requisite Revolving Lenders and Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected
thereby, do any of the following: (i) increase the principal amount of
any Lender's Commitment (which action shall be deemed to directly
affect all Lenders); (ii) reduce the principal of, rate of interest on
or Fees payable with respect to any Loan or Letter of Credit of any
affected Lender; (iii) extend any scheduled payment date 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
Borrower 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
which shall be required for Lenders or any of them to take any action
hereunder; (vii) amend or waive this Section 11.2 or the definitions of
the terms "Requisite Lenders" or "Requisite Revolving Lenders" insofar
as such definitions
37
44
affect the substance of this Section 11.2; and (viii) waive or modify
any provision of Sections 6.1 or 6.14 (which action shall be deemed to
directly affect all Lenders. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or
Revolving Credit Agent under this Agreement or any other Loan Document
shall be effective unless in writing and signed by Agent or Revolving
Credit Agent, 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 Borrower in any case shall entitle
Borrower 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 (a "Proposed Change"):
(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 this clause (i) and in
clauses (ii) and (iii) below being referred to as a "Non-Consenting
Lender"), or
(ii) requiring the consent of Requisite Revolving
Lenders, the consent of Revolving Lenders holding 51% or more of the
aggregate Revolving Loan Commitments is obtained, but the consent of
Requisite 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's request
Agent, or a Person 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 Lender for an amount equal to the
principal balance of all Loans held by the Non-Consenting 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) Upon full, final and complete payment in full in cash and
performance of all of the Obligations (other than indemnification
Obligations under Section 1.11), 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 Borrower
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. Borrower shall reimburse Agent and Revolving
Credit Agent for all out-of-pocket expenses incurred in connection with the
preparation of the Loan Documents (including the reasonable fees and expenses of
all of its special loan counsel, advisors, consultants and auditors retained in
connection with the Loan Documents and advice in connection therewith). Borrower
shall reimburse Agent and Revolving Credit Agent (and, with respect to clauses
(c) and (d) below, all Lenders) for all fees, costs and expenses, including the
reasonable fees, costs and expenses of counsel or other advisors (including
environmental and management consultants and appraisers) for advice, assistance,
or other representation in connection with:
(a) the forwarding to Borrower or any other Person on behalf
of Borrower by Agent of the proceeds of the Loans;
38
45
(b) any amendment, modification or waiver of, or consent with
respect to, any of the Loan Documents or advice in connection with the
administration of the Loans made pursuant hereto or its rights
hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, Borrower or any other
Person) in any way relating to the Collateral, any of the Loan
Documents or any other agreement to be executed or delivered in
connection therewith or herewith, whether as party, witness, or
otherwise, 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 Borrower 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 and
Revolving Credit Agent, such reimbursement shall be limited to one
counsel for all such Lenders;
(d) any attempt to enforce any remedies of Agent or any Lender
against Borrower 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 and Revolving Credit Agent, such reimbursement
shall be limited to one counsel for all such Lenders;
(e) any work-out or restructuring of the Loans during the
pendency of one or more Events of Default;
(f) efforts, subject to limitations set forth in Section 1.12,
to (i) monitor the Loans or any of the other Obligations, (ii)
evaluate, observe or assess Borrower or its 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 (f) above, all reasonable attorneys' and other
professional and service providers' fees arising from such services,
including those in connection with any appellate proceedings; and all
reasonable expenses, costs, charges and other fees incurred by such
counsel and others in any way or respect arising in connection with or
relating to any of the events or actions described in this Section 11.3
shall be payable, on demand, by Borrower to Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may
include: reasonable 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.
11.4. No Waiver. Agent's, Revolving Credit Agent's or any Lender's
failure, at any time or times, to require strict performance by Borrower of any
provision of this Agreement and any of the other Loan Documents shall not waive,
affect or diminish any right of such party thereafter to demand strict
compliance and performance 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 Borrower contained in
this Agreement or any of the other Loan Documents and no Default or Event of
Default by Borrower shall be deemed to have been suspended or waived by Agent,
Revolving Credit 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 Borrower specifying
such suspension or waiver.
11.5. Remedies. Agent's, Revolving Credit Agent's and Lenders' rights
and remedies under this Agreement shall be cumulative and nonexclusive of any
other rights and remedies which Agent, Revolving Credit 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.
39
46
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
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
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 is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
11.8. Confidentiality. Agent, Revolving Credit Agent and each Lender
agrees to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information identified as "confidential" by
Borrower and provided to it by or on behalf of Borrower in connection with this
Agreement or any other Loan Document for a period of three (3) years following
receipt thereof, and neither it nor any of its Affiliates shall, during such
three (3) year period after receipt, use any such information for any purpose or
in any manner other than pursuant to the terms contemplated by this Agreement,
except to the extent such information (i) was or becomes generally available to
the public other than as a result of a disclosure by such Person, or (ii) was or
becomes available on a non-confidential basis from a source other than Borrower,
provided that such source is not bound by a confidentiality agreement with
Borrower known to such Person; provided, however, that such Person may disclose
such information (A) at the request or pursuant to any requirement of any
Governmental Authority to which such Person is subject or in connection with an
examination of such Person by such Governmental Authority; (B) pursuant to
subpoena or other court process; (C) when required to do so in accordance with
the provisions of any applicable requirement of law; and (D) to such Person's
independent auditors and other professional advisors, provided that such
auditors and professional advisors are not presently, nor have been in the past,
direct competitors of Borrower and such auditors and professional advisors shall
be required to similarly protect the confidentiality of such information.
Notwithstanding the foregoing, Borrower authorizes each Lender, during such
three (3) year period after receipt, to disclose to any participant or assignee
(each a "Transferee") and to any prospective Transferee, in each case, other
than any Transferees or prospective Transferees that are presently, or have been
in the past, direct competitors of Borrower, such financial and other
information in such Lender's possession concerning Borrower or any of its
Subsidiaries which has been delivered to Agent, Revolving Credit Agent or the
Lenders pursuant to this Agreement, or which has been delivered to Agent,
Revolving Credit Agent or the Lenders by or on behalf of Borrower in connection
with the Lender's credit evaluation of Borrower prior to entering into this
Agreement, provided that, unless otherwise agreed by Borrower, such Transferee
or prospective Transferee agrees in writing to such Lender to keep such
information confidential to the same extent required of the Lenders hereunder.
For purposes of this Section 11.8, Agent, Revolving Credit Agent and the Lenders
acknowledge and agree that all budgets, forecasts and pro forma financial
statements and other "forward looking" financial information concerning Borrower
and/or any of its Subsidiaries, including, without limitation, the Projections
and Pro Forma, delivered by Borrower to Agent, Revolving Credit Agent or any
Lender shall be deemed to be identified by Borrower as "confidential" when
delivered, irrespective of whether such information, statements or documents are
marked confidential by Borrower when delivered to Agent, Revolving Credit Agent
or any Lender.
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 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. BORROWER HEREBY CONSENTS
AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX, XXXX XX
XXX XXXX, XXX XXXX SHALL HAVE NON- EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE
ANY CLAIMS OR DISPUTES BETWEEN BORROWER, AGENT, REVOLVING CREDIT 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, REVOLVING CREDIT AGENT, LENDERS AND BORROWER
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE
40
47
OF NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK AND, PROVIDED, FURTHER 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. BORROWER EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND BORROWER HEREBY WAIVES ANY OBJECTION WHICH BORROWER 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. BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE
SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO BORROWER AT THE ADDRESS SET FORTH IN
ANNEX I OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF BORROWER'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER
DEPOSIT IN THE U.S. 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 on Annex I 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 or Agent) designated on Annex I
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, REVOLVING CREDIT AGENT, LENDERS AND
BORROWER ARISING 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.
41
48
11.14. Press Releases. Borrower 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, Comerica or their affiliates or
referring to this Agreement or the other Loan Documents without at least two (2)
Business Days' prior notice to GE Capital and Comerica and without the prior
written consent of GE Capital and Comerica unless (and only to the extent that)
Borrower or Affiliate is required to do so under law and then, in any event,
Borrower or Affiliate will consult with GE Capital and Comerica before issuing
such press release or other public disclosure. Borrower consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement.
Agent or such Lender shall provide a draft of any such tombstone or similar
advertising material to Borrower for review, comment and approval (not to be
unreasonably withheld or delayed) 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 with
Borrower's consent which shall not be unreasonably withheld or delayed.
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
Borrower for liquidation or reorganization, should Borrower 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 Borrower'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.
SIGNATURES ON FOLLOWING PAGE
42
49
IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
BORROWER: AMERICAN COIN MERCHANDISING, INC.
By:
--------------------------------------
Title:
-----------------------------------
AGENT AND LENDER: GENERAL ELECTRIC CAPITAL
CORPORATION
By:
--------------------------------------
Title:
-----------------------------------
REVOLVING CREDIT AGENT AND LENDER: COMERICA BANK
By:
--------------------------------------
Title:
-----------------------------------
LENDERS: KEY BANK NATIONAL ASSOCIATION
By:
--------------------------------------
Title:
-----------------------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
--------------------------------------
Title:
-----------------------------------
50
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 section references in the following definitions shall refer to
Sections of the Agreement:
"Account Debtor" shall mean any Person who may become obligated to
Borrower under, with respect to, or on account of, an Account.
"Accounts" shall mean all "accounts," as such term is defined in the
Code, now owned or hereafter acquired by Borrower and, in any event, including
(a) all accounts receivable, other receivables, book debts and other forms of
obligations (other than forms of obligations evidenced by Chattel Paper,
Documents or Instruments) now owned or hereafter received or acquired by or
belonging or owing to Borrower, whether arising out of goods sold or services
rendered by it or from any other transaction (including any such obligations
which may be characterized as an account or contract right under the Code), (b)
all of Borrower's rights in, to and under all purchase orders or receipts now
owned or hereafter acquired by it for goods or services, (c) all of Borrower'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 monies due or to
become due to Borrower, under all purchase orders and contracts for the sale of
goods or the performance of services or both by Borrower or in connection with
any other transaction (whether or not yet earned by performance on the part of
Borrower) now or hereafter in existence, including the right to receive the
proceeds of said purchase orders and contracts, and (e) all collateral security
and guarantees of any kind, now or hereafter in existence, given by any Person
with respect to any of the foregoing.
"Advance" shall mean any Revolving Credit Advance.
"Affiliate" shall mean, 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, ten percent (10%) or more of the Stock
having ordinary voting power in the election of directors of such Persons, (b)
each Person that controls, is controlled by or is under common control with such
Person, and (c) each of such Person's executive officers and directors. 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 the term "Affiliate" shall
specifically exclude Agent and each Lender.
"Agent" shall mean GE Capital or its successor appointed pursuant to
Section 9.7.
"Agreement" shall mean the Credit Agreement by and among Borrower, GE
Capital, as Agent and Lender, Comerica, as Revolving Credit Agent and Lender and
the other Lenders signatory from time to time to the Agreement.
"Appendices" shall have the meaning assigned to it in the recitals to
the Agreement.
"Applicable L/C Margin" shall mean 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 Revolver Base Margin, the Applicable Term Loan Base Margin, the
Applicable Revolver LIBOR Margin and the Applicable Term Loan LIBOR Margin.
A-1
51
"Applicable Revolver Base Margin" shall mean the per annum interest
rate margin from time to time in effect and payable in addition to the Base Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a)
of the Agreement.
"Applicable Revolver LIBOR Margin" shall mean 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)
of the Agreement.
"Applicable Term Loan Base Margin" shall mean the per annum interest
rate from time to time in effect and payable in addition to the Base Rate
applicable to the Term Loan, as determined by reference to Section 1.5(a) of the
Agreement.
"Applicable Term Loan LIBOR Margin" shall mean the per annum interest
rate from time to time in effect and payable in addition to the LIBOR Rate
applicable to the Term Loan, as determined by reference to Section 1.5(a) of the
Agreement.
"Assignment Agreement" shall have the meaning assigned to it in Section
9.1(a).
"Base Rate" shall mean, for any day, a floating rate equal to the
higher of (i) the Prime Rate, and (ii) the Federal Funds Rate plus fifty (50)
basis points per annum. Each change in any interest rate provided for in the
Agreement based upon the Base Rate shall take effect at the time of such change
in the Base Rate.
"Base Rate Loan" shall mean a Loan or portion thereof bearing interest
by reference to the Base Rate.
"Borrower" shall have the meaning assigned thereto in the recitals to
the Agreement.
"Business Day" shall mean 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 New
York, the State of Michigan or the State of Colorado and in reference to LIBOR
Loans shall mean any such day that is also a LIBOR Business Day.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness,
without duplication) 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.
"Capital Lease" shall mean, 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" shall mean, 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.
"Cash Equivalents" shall mean:
(a) securities issued or unconditionally and fully guaranteed
or insured by the Unites States Government of any agency or
instrumentality thereof or any state thereof and backed by the full
faith and credit of the United States or such state having maturities
of not more than one (1) year from the date of acquisition;
(b) certificates of deposit, time deposits, Eurodollar time
deposits, demand deposits or bankers' acceptances having, in each case,
a tenor of not more than six (6) months, issued by any Lender, or by
any nationally or state chartered commercial bank or any branch or
agency of a foreign bank licensed to conduct business in the United
States having combined A-1 (or the then equivalent grade) by Standard &
Poor's Rating Group and P-1 (or the then equivalent grade) by Xxxxx'x
Investors Service, Inc.;
A-2
52
(c) repurchase or reverse repurchase obligations with a tenor
of not more than ninety (90) days for underlying securities of the
types described in clause (a) (entered into with any bank meeting the
qualifications specified in clause (b));
(d) commercial paper issued by any corporation organized under
the laws of any state of the Unites States and rated at lease A-1 (or
the then equivalent grade) by Standard & Poor's Rating Group and P-1
(or the then equivalent grade) by Xxxxx'x Investors Service, Inc. and
in either case having a tenor of not more than two hundred and seventy
(270) days; and
(e) investments, classified in accordance with GAAP as current
assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended, which are administered by
financial institutions that have the highest rating obtainable from
either Xxxxx'x Investors Services, Inc. or Standard & Poor's Rating
Group and the portfolios of which are limited solely to investments of
the character, quality and maturity described in clauses (a), (b), (c)
and (d) above.
"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, as
amended) 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, as amended) of 25% or more of the issued and outstanding
shares of capital Stock of Borrower having the right to vote for the election of
directors of Borrower under ordinary circumstances; (b) during any period of
twenty-four consecutive calendar months, individuals who at the beginning of
such period constituted the board of directors of Borrower (together with any
new directors whose election by the board of directors of Borrower or whose
nomination for election by the stockholders of Borrower 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 elections 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)
Borrower shall cease to own and control all of the economic and voting rights
associated with all of the outstanding capital Stock of any of its Subsidiaries
(except to the extent that ACMI Canada, Inc., is, after the Closing Date,
dissolved or wound-up).
"Charges" shall mean 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 Borrower, (d) Borrower's
ownership or use of any properties or other assets, or (e) any other aspect of
Borrower's business.
"Chattel Paper" shall mean any "chattel paper," as such term is defined
in the Code, now owned or hereafter acquired by Borrower, wherever located.
"Closing Date" shall mean December 29, 2000.
"Closing Checklist" shall mean 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" shall mean the Uniform Commercial Code as the same may, from
time to time, be enacted and in effect in the State of New York; provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Agent's or any Lender's security
interest in 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, from
time to time in such other jurisdiction solely for purposes of the provisions
hereof relating to such attachment, perfection or priority and for purposes of
definitions related to such provisions.
"Collateral" shall mean 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
A-3
53
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" shall mean the Security Agreement, the Trademark
Security Agreement and all similar agreements entered into granting a Lien upon
property as security for payment of, the Obligations.
"Collection Account" shall mean those certain accounts as follows:
With respect to all payments of every type made with respect
to the Revolving Loan, including all Fees and expenses payable to, or
for the account of the Revolving Credit Agent:
Comerica Bank
Detroit, MI
ABA: 000000000
Attn: Commercial Lending Services - Service Unit #8
Ref: American Coin Merchandising, Inc.
With respect to all payments of every type made with respect
to the Term Loan including all Fees and expenses payable to or for the
account of Agent:
Bankers Trust
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Account# 00-000-000
ABA#000-000-000
Reference Capital Funding, Inc./American Coin
"Commitment Fee" shall mean one half percent (0.5%) per annum
(calculated on the basis of a 360 day year for actual days lapsed).
"Commitment Termination Date" shall mean the earliest of (a) December
31, 2003, (b) the date of termination of Lenders' obligations to make Advances
and/or incur obligations with respect to Letters of Credit or permit existing
Loans to remain outstanding pursuant to Section 8.2(b), and (c) the date of
full, final and complete prepayment by Borrower of the Revolving Loan and the
cancellation and return (or stand-by guarantee) of all Letters of Credit or the
cash collateralization of all Letter of Credit Obligations in a manner
reasonably requested by Revolving Credit Agent, and the permanent reduction of
the Revolving Loan Commitment to zero dollars ($0).
"Commitments" shall mean (a) as to any Lender, the aggregate of such
Lender's Revolving Loan Commitment and Term Loan Commitment as set forth on
Annex J to the Agreement or in the most recent Assignment Agreement executed by
such Lender and (b) as to all Lenders, the aggregate of all Lenders' Revolving
Loan Commitments and Term Loan Commitments, which aggregate commitment shall be
Fifty-Five Million and 00/100 Dollars ($55,000,000.00) 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" shall have the meaning assigned to it in Annex
E.
"Contracts" shall mean all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by Borrower, in any event, including all
contracts, undertakings, or agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which Borrower 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) 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 Borrower, (ii) a futures commission merchant
or clearing house with respect to commodity accounts and commodity contracts
held by Borrower, whereby, among other things, the issuer, securities
A-4
54
intermediary or futures commission merchant disclaims any security interest in
the applicable financial assets other than in respect to customary account
charges, 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 Borrower.
"Copyright License" shall mean any and all rights now owned or
hereafter acquired by Borrower under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyright Security Agreements" shall mean the Copyright Security
Agreements, if any made in favor of Agent, on behalf of itself and Lenders, by
Borrower.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by Borrower: (a) all copyrights and general intangibles of like nature
(whether registered or unregistered), now owned or existing or hereafter adopted
or acquired, 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.
"Debt Securities" shall mean, any securities, instruments and
agreements evidencing or documenting a debt obligation including, without
limitation, notes, debentures, bonds, credit agreements and loan agreements.
"Default" shall mean any event which, with the passage of time or
notice or both, would, unless cured or waived, become an Event of Default.
"Default Rate" shall have the meaning assigned to it in Section 1.5(d).
"Disclosure Schedules" shall mean the Schedules prepared by Borrower
and denominated as Disclosure Schedules 1.4 through 6.7 in the Index to the
Agreement.
"Documents" shall mean any "documents," as such term is defined in the
Code, now owned or hereafter acquired by Borrower, wherever located.
"Dollars" or "$" shall mean lawful currency of the United States of
America.
"EBITDA" shall mean, with respect to any fiscal period, the sum of (a)
Net Income for that period, plus (b) any non-operating non-recurring loss
reflected in such Net Income, minus (c) any non-operating non-recurring gain
reflected in such Net Income, plus a(d) Interest Expense of Borrower and its
Subsidiaries for that period, plus (e) the aggregate amount of federal and state
taxes on or measured by income of Borrower and its Subsidiaries for that period
(whether or not payable during that period), plus (f) depreciation, amortization
and all other non-cash expenses of Borrower and its Subsidiaries for that
period, in each case as determined in accordance with GAAP, consistently
applied; provided that, following a Permitted Acquisition, each component of
EBITDA shall also include the results of operations of the Person that is the
subject of such Permitted Acquisition as of the beginning of such fiscal period.
"Environmental Laws" shall mean, with respect to any Person or any real
property owned, leased or operated by such Person, all applicable federal,
state, local and foreign laws, statutes, ordinances, codes, rules, standards and
regulations, now or hereafter in effect, and in each case as amended or
supplemented from time to time, 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 human health,
safety, the environment and natural resources (including ambient air, surface
water, groundwater, wetlands, land surface or subsurface strata, wildlife,
aquatic species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Section Section 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. Sections 2601 et seq.); the
A-5
55
Clean Air Act (42 U.S.C. Sections 7401 et seq.); the Federal Water Pollution
Control Act (33 U.S.C. Sections 1251 et seq.); the Occupational Safety and
Health Act (29 U.S.C. Sections 651 et seq.); and the Safe Drinking Water Act (42
U.S.C. Sections 300(f) et seq.), each as from time to time amended, and any and
all regulations promulgated thereunder, and all analogous state, local and
foreign counterparts or equivalents and any transfer of ownership notification
or approval statutes.
"Environmental Liabilities" shall mean, 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 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, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute or common law, including any arising under
or related to any Environmental Law, Environmental Permit, or in connection with
any Release or threatened Release or presence of a Hazardous Material whether
on, at, in, under, from or about or in the vicinity of any real or personal
property.
"Environmental Permits" shall mean, with respect to any Person or any
real property owned, leased or operated by such Person, all permits, licenses,
authorizations, certificates, approvals or registrations required by any
Governmental Authority under any Environmental Law.
"Equipment" shall mean all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by Borrower, wherever located and, in any
event, including all of Borrower's machinery and equipment, including processing
equipment, conveyors, machine tools, data processing and computer equipment with
software and peripheral equipment (other than software constituting part of the
Accounts), 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, all
whether now owned or hereafter acquired, and wherever situated, 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" shall mean the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time, and any
regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to Borrower, any trade or
business (whether or not incorporated) which, together with Borrower, is treated
as a single employer within the meaning of Sections 414(b), (c), (m) or (o) of
the IRC.
"ERISA Event" shall mean, with respect to Borrower or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan; (b) the withdrawal of Borrower 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 Borrower or any ERISA Affiliate from any
Multiemployer Plan; (d) the filing of a notice of intent to terminate a Title IV
Plan 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) the failure by Borrower or ERISA Affiliate
to make when due required contributions to a Multiemployer Plan or Title IV Plan
unless such failure is cured within 30 days; (g) any other event or condition
which might 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; (h) the termination of a Multiemployer Plan
under Section 4041A of ERISA or the reorganization or insolvency of a
Multiemployer Plan under Section 4241 of ERISA; (i) the loss of a Qualified
Plan's qualification or tax exempt status; or (j) the termination of a Plan
described in Section 4064 of ERISA.
"ESOP" shall mean a Plan which is intended to satisfy the requirements
of Section 4975(e)(7) of the IRC.
A-6
56
"Event of Default" shall have the meaning assigned to it in Section
8.1.
"Excess Cash Flow" shall mean, without duplication, with respect to any
Fiscal Year of Borrower and its Subsidiaries, EBITDA, minus (a) Capital
Expenditures during such Fiscal Year (excluding the financed portion thereof and
excluding any Capital Expenditures in such Fiscal Year to the extent in excess
of the amount permitted to be made in such Fiscal Year pursuant to clause (a) of
Annex G), minus (b) Interest Expense paid or accrued (excluding any original
issue discount, interest paid in kind or amortized debt discount, to the extent
included in determining Interest Expense) and scheduled principal payments paid
or payable in respect of Funded Debt, minus (c) mandatory prepayments paid in
cash pursuant to Section 1.3 other than mandatory prepayments made pursuant to
Section 1.3(b)(i), plus (d) taxes deducted in determining consolidated net
income to the extent not paid for in cash, minus (e) taxes deducted in
determining consolidated new income to the extent paid for in cash.
"Excess Cash Flow Percentage" shall mean that percentage calculated in
accordance to the following table:
IF SENIOR FUNDED DEBT RATIO IS: EXCESS CASH FLOW PERCENTAGE:
------------------------------- ---------------------------
>2.00:1 75%
>1.00:1, but < or = 2.00:1 50%
< or = 1.00:1 0%
"Federal Funds Rate" shall mean, 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 and Revolving
Credit Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fees" shall mean any and all fees payable to Agent, Revolving Credit
Agent or any Lender pursuant to the Agreement or any of the other Loan
Documents.
"Financial Statements" shall mean the consolidated income statements,
statements of cash flows and balance sheets of Borrower delivered in accordance
with Section 3.4 of the Agreement and Annex E to the Agreement.
"Fiscal Month" shall mean any of the monthly accounting periods of
Borrower.
"Fiscal Quarter" shall mean any of the quarterly accounting periods of
Borrower, ending on March 31, June 30, September 30 and December 31 of each
year.
"Fiscal Year" shall mean any of the annual accounting periods of
Borrower ending on December 31 of each year.
"Fixed Charges" shall mean, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or accrued during such
period, plus (b) scheduled payments of principal with respect to Funded Debt
during such period.
"Fixed Charge Coverage Ratio" shall mean, as measured for Borrower and
its Subsidiaries on a consolidated basis as of the last day of each Fiscal
Quarter of Borrower on a rolling four (4) Fiscal Quarter basis, the ratio of
EBITDA less Capital Expenditures (excluding the financed portion thereof) to
Fixed Charges. In computing Fixed Charges for any fiscal period, interest and
principal payments that are due within one week after the end of that fiscal
period, without duplication, shall be deemed to have been paid on the last day
of that fiscal period. For the specific purpose of calculating the Fixed Charge
Coverage Ratio in Item (b) of Annex G, and notwithstanding anything herein to
the contrary (i) for the Fiscal Quarter ending March 31, 2001, Capital
Expenditures shall mean
A-7
57
the actual amount of Capital Expenditures for such Fiscal Quarter multiplied by
four; (ii) for the Fiscal Quarter ending June 30, 2001, Capital Expenditures
shall mean the actual amount of Capital Expenditures for the previous six months
multiplied by two; and (iii) for the Fiscal Quarter ending September 30, 2001,
Capital Expenditures shall mean the actual amount of Capital Expenditures for
the Fiscal Year 2001 to date multiplied by one and one third (1 1/3).
"Fixtures" shall mean any "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by Borrower.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness
for borrowed money evidenced by notes, bonds, debentures, or similar evidences
of Indebtedness with an original term of one year or more, specifically
including Capital Lease Obligations, current maturities of long-term debt and
revolving credit, and also including, in the case of Borrower, the Obligations
and, without duplication, Guaranteed Indebtedness consisting of guaranties of
Funded Debt of other Persons.
"GAAP" shall mean generally accepted accounting principles in the
United States of America, consistently applied, as such term is further defined
in Annex G to the Agreement.
"Fee Letters" shall have the meaning set forth in Section 1.7(a) of the
Agreement.
"General Intangibles" shall mean any "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by Borrower, and,
in any event, including all right, title and interest which Borrower may now or
hereafter have in or under any Contract, all 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 of indemnification, all books and
records, correspondence, credit files, invoices and other papers, including
without limitation all tapes, cards, computer runs and other papers and
documents in the possession or under the control of or any computer bureau or
service company from time to time acting for Borrower.
"Governmental Authority" shall mean 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" shall mean, as to any Person, any obligation
of such Person guaranteeing any indebtedness, lease, dividend, or other
obligation ("primary obligations") of any other Person (the "primary obligor")
in any manner, including any obligation or arrangement of such Person (a) to
purchase or repurchase any such primary obligation, (b) to 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) to 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, or (d) to
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
made 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.
A-8
58
"Hazardous Material" shall mean any substance, material or waste which
is regulated by or forms the basis of liability now or hereafter under, any
Environmental Law, including any material or substance which 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 Law, (b) petroleum or any
fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCBs), or
any radioactive substance.
"Indebtedness" of any Person shall mean without duplication (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred six (6) months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (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 Base 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" shall have the meaning assigned to it in
Section 1.11.
"Instruments" shall mean any "instrument," as such term is defined in
the Code, now owned or hereafter acquired by Borrower, wherever located, and, in
any event, including all certificated securities, all certificates of deposit,
and all notes and other, without limitation, evidences of indebtedness, other
than instruments that constitute, or are a part of a group of writings that
constitute, Chattel Paper.
"Intellectual Property" shall mean any and all Licenses, Patents,
Copyrights, Trademarks, trade secrets and customer lists.
"Interest Expense" shall mean, 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, in any event, 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 Base Rate Loan, the first
Business Day of each calendar quarter to occur while such Loan is outstanding,
(b) as to any LIBOR Loan, the last day of the applicable LIBOR Period; provided,
that in the case of any LIBOR Period greater than three months in duration,
interest shall be payable at three month intervals and on the last day of such
LIBOR Period; and provided further 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 which is
then accrued under the Agreement.
"Inventory" shall mean any "inventory," as such term is defined in the
Code, now or hereafter owned or acquired by Borrower, wherever located, and in
any event including inventory, merchandise, goods and other personal property
which are held by or on behalf of Borrower for sale or lease or are furnished or
are to be furnished under a contract of service, or which constitute raw
materials, work in process or materials used or consumed or to be used or
consumed in such Borrower's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including other
supplies.
A-9
59
"Investment Property" shall have the meaning ascribed thereto, in the
Code in those jurisdictions in which such definition has been adopted and shall
include (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 Borrower, including the rights of Borrower 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 held by Borrower; (iv) all commodity contracts held by Borrower; and
(v) all commodity accounts held by Borrower.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and any
successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor
thereto.
"Issuing Office" shall mean Revolving Credit Agent's office located at
One Detroit Center, 000 Xxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000 or such other
office as Revolving Credit Agent shall designate as its Issuing Office.
"Lease Expenses" shall mean, with respect to any Person for any fiscal
period, the aggregate rental obligations of such Person determined in accordance
with GAAP which are payable in respect of such period under leases of real
and/or personal property (net of income from subleases thereof, but including
taxes, insurance, maintenance and similar expenses which the lessee is obligated
to pay under the terms of such leases), whether or not such obligations are
reflected as liabilities or commitments on a consolidated balance sheet of such
Person or in the notes thereto, excluding, however, any such obligations under
Capital Leases.
"Lenders" shall mean GE Capital, the other Lenders named on the
signature page of the Agreement, and, if any such Lender shall decide to assign
all or any portion of the Obligations, such term shall include such assignee.
"Letter of Credit Fee" shall mean the fee payable to Revolving Credit
Agent for the accounts of the Revolving Lenders in connection with Letters of
Credit pursuant to the terms set forth in Annex B.
"Letter of Credit Agreement" shall mean, in respect of each Letter of
Credit, the application and related documentation satisfactory to the Revolving
Credit Agent of Borrower requesting Revolving Credit Agent to issue such Letter
of Credit, as amended from time to time.
"Letter of Credit Maximum Amount" shall mean as of any date of
determination the lesser of: (a) Ten Million Dollars ($10,000,000); or (b) the
Revolving Loan Commitment of all Revolving Lenders as of such date, minus the
aggregate principal amount of Advances outstanding as of such date under the
Revolving Notes.
"Letter of Credit Obligation(s)" shall mean the obligation, whether
direct, indirect contingent or otherwise, due or not due, of Borrower under each
Letter of Credit and each Letter of Credit Agreement to reimburse or (with
respect to outstanding undrawn Letters of Credit) potentially reimburse, now or
in the future, the Revolving Credit Agent for each payment made, to be made or
which may be potentially made by the Revolving Credit Agent under any Letter of
Credit including all undrawn portions thereof, together with all other sums,
fees, charges and amounts which may be owing to the Revolving Credit Agent under
such Letter of Credit and Letter of Credit Agreement.
"Letter of Credit Payment" shall mean any amount paid or required to be
paid by the Revolving Credit Agent in its capacity hereunder as issuer of a
Letter of Credit as a result of a draft or other demand for payment under any
Letter of Credit.
"Letters of Credit" shall mean standby or documentary letters of credit
issued by Revolving Credit Agent at the request of or for the account of
Borrower pursuant to Annex B hereof.
"LIBOR Business Day" shall mean a Business Day on which banks in the
city of London are generally open for interbank or foreign exchange
transactions.
A-10
60
"LIBOR Loan" shall mean a Loan or any portion thereof bearing interest
by reference to the LIBOR Rate.
"LIBOR Period" shall mean, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower pursuant to the
Agreement and ending one, two, three or six months thereafter, as selected by
Borrower's irrevocable notice to Agent as set forth in Section 1.5(e); provided,
however that prior to the earlier of (i) the sale by GE Capital of $10,000,000
of GE Capital's Commitments following the Closing Date, or (ii) ninety (90) days
following the Closing Date, Borrower may only select LIBOR Periods ending one
month thereafter; and provided further 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 (for purposes of the Revolving Loan) or the
Term Loan Termination Date (for purposes of the Term Loan) shall end on
such date;
(c) any LIBOR Period pertaining to a LIBOR Loan 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 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 shall select LIBOR Periods so that there shall be
no more than three (3) separate LIBOR Loans with respect to the
Revolving Loan and three (3) separate LIBOR Loans with respect to the
Term Loan, in existence at any one time.
"LIBOR Rate" shall mean 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 which 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 each LIBOR Period (unless such date is not a
Business Day, in which event the next preceding 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 which 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 Board of Governors of the Federal Reserve system 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 such Board
which are required to be maintained by a member bank of the Federal
Reserve System.
If such interest rates shall cease to be available from
Telerate News Service, the LIBOR Rate shall be determined from such
financial reporting service or other information as shall be mutually
acceptable to Agent, Revolving Credit Agent and Borrower.
"License" shall mean any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by Borrower.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
arrangement of any kind or nature whatsoever (including any title retention
agreement, any financing lease having
A-11
61
substantially the same economic effect as any of the foregoing, and the filing
of, or agreement to give or file, any financing statement perfecting a security
interest under the Code or comparable law of any jurisdiction).
"Litigation" shall have the meaning assigned to it in Section 3.13.
"Loan Account" shall have the meaning assigned to it in Section 1.10.
"Loan Documents" shall mean the Agreement, the Notes, the Collateral
Documents and all other agreements, instruments, documents and certificates
identified in the Closing Checklist executed and delivered to, or in favor of,
Agent and/or Lenders and including all other pledges, powers of attorney,
consents, assignments, contracts, notices, and all other written matter whether
heretofore, now or hereafter executed by or on behalf of Borrower, or any
employee of Borrower in the name and on behalf of Borrower, and delivered to
Agent or any Lender in connection with the Agreement or the transactions
contemplated hereby. 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 such Agreement as the same may be in effect at any and all
times such reference becomes operative.
"Loans" shall mean the Revolving Loan and the Term Loan.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, prospects, financial or other condition of
Borrower or any of its Subsidiaries taken as a whole, (b) 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 the perfection or priority of
Agent's Liens, on behalf of itself and Lenders, on the Collateral, or (d)
Agent's or any Lender's rights and remedies under the Agreement and the other
Loan Documents.
"Material Customer Contract" shall mean a contract between Borrower and
a customer providing for the installation of Borrower's Equipment on the
premises of the customer, which customer accounted for ten percent (10%) or more
of the gross revenues of Borrower during the Fiscal Year then most recently
ended.
"Maximum Amount" shall mean, at any particular time, an amount equal to
the Revolving Loan Commitment of all Lenders.
"Mortgages" shall mean each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by Borrower or any of its Subsidiaries
to Agent with respect o any Real Property, if any, all in form and substance
satisfactory to Agent.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which Borrower or ERISA Affiliate is making,
is obligated to make, has made or been obligated to make, contributions on
behalf of participants who are or were employed by any of them.
"Net Income" shall mean, with respect to any fiscal period, the
consolidated net income of Borrower and its Subsidiaries for that period,
determined in accordance with GAAP.
"Non-Funding Lender" shall have the meaning assigned to it in Section
9.9(a)(ii).
"Notes" shall mean the Revolving Notes and the Term Notes,
collectively.
"Notice of Conversion/Continuation" shall have the meaning assigned to
it in Section 1.5(e).
"Notice of Revolving Credit Advance" shall have the meaning assigned to
it in Section 1.1(a).
"Obligations" shall mean 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 Borrower to
Agent, Revolving Credit Agent or any Lender, and all covenants and duties
regarding such amounts, of any kind or nature, present or future,
A-12
62
whether or not evidenced by any note, agreement or other instrument, arising
under the Agreement or any of the other Loan Documents. This term includes all
principal, interest (including all interest which accrues after the commencement
of any case or proceeding in bankruptcy after the insolvency of, or for the
reorganization of Borrower, whether or not allowed in such proceeding), Fees,
Charges (to the extent paid by Agent, Revolving Credit Agent or any Lender on
behalf or for the benefit of Borrower), expenses, attorneys' fees and any other
sum chargeable to Borrower under the Agreement or any of the other Loan
Documents.
"Patent Security Agreements" shall mean the Patent Security Agreements,
if any, made in favor of Agent, on behalf of itself and Lenders, by Borrower.
"Patent License" shall mean rights under any written agreement now
owned or hereafter acquired by Borrower granting any right with respect to any
invention on which a Patent is in existence.
"Patents" shall mean all of the following in which Borrower now holds
or hereafter acquires any interest: (a) all letters patent of the United States
or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or 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,
any State or Territory thereof, or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Acquisitions" shall have the meaning assigned to it in
Section 6.1.
"Permitted Encumbrances" shall mean the following encumbrances: (a)
Liens for taxes or assessments or other governmental Charges not yet delinquent
or 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 Borrower or any of its Subsidiaries 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 and securing liabilities so long as such Liens
attach only to Inventory; (f) deposits securing, or in lieu of, surety, appeal
or customs bonds in proceedings to which Borrower or any of its Subsidiaries is
a party; (g) any attachment or judgment lien not constituting an Event of
Default under Section 8.1(f); (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 hereinafter created Liens in favor of Agent, on behalf of
Lenders; (j) rights of offset or statutory banker's liens on bank deposit
accounts maintained in the ordinary course of business; and (k) Liens expressly
permitted under clauses (b) and (c) of Section 6.7 of the Agreement.
"Person" shall mean 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).
"Plan" shall mean, at any time, an employee benefit plan, as defined in
Section 3(3) of ERISA, which Borrower maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by Borrower.
"Prime Rate" shall mean, so long as Comerica is the Revolving Credit
Agent, the prime rate as announced by Comerica, from time to time, and at all
other times, 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
base rate of the type described, 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).
A-13
63
"Prior Lender" shall mean Xxxxx Fargo Bank, National Association for
itself, as lender, and as agent for certain other lenders.
"Prior Lender Obligations" shall mean the Reducing Revolving Loan
Agreement dated June 10, 1998 (as amended) among Borrower, the lenders party
thereto and Xxxxx Fargo Bank, National Association for itself as a lender and as
agent for the other lenders.
"Proceeds" shall mean "proceeds," as such term is defined in the Code
and, in any event, shall include (a) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to Borrower 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 Borrower 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 Borrower 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 Borrower against third parties with respect to any litigation or
dispute concerning any of the Collateral, and (e) any and all other amounts from
time to time paid or payable under or in connection with any of the Collateral,
upon disposition or otherwise.
"Pro Forma" means the unaudited consolidated and consolidating balance
sheet of Borrower and its Subsidiaries as of Closing Date after giving pro forma
effect to the funding of the Term Loans and the initial Advances on the Closing
Date and the Repayment of the Prior Lender Obligations.
"Projections" means Borrower's forecasted consolidated: (a) balance
sheets; (b) profit and loss statements; (c) cash flow statements; and (d)
capitalization statements, and otherwise consistent with the historical
Financial Statements of Borrower, together with appropriate supporting details
and a statement of underlying assumptions.
"Pro Rata Share" shall mean with respect to all matters relating to any
Lender (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment, by (ii) the aggregate Revolving Loan
Commitments, (b) with respect to the Term Loan, the percentage obtained by
dividing (i) the Term Loan Commitment of that Lender by (ii) the aggregate Term
Loan Commitments of all Lenders, as any such percentages may be adjusted by
assignments permitted pursuant to Section 9.1, (c) with respect to all Loans,
the percentage obtained by dividing (i) the aggregate Commitments of that Lender
by (ii) the aggregate Commitments of all Lenders, and (d) 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.
"Qualified Plan" shall mean a Plan which is intended to be
tax-qualified under Section 401(a) of the IRC.
"Real Estate" shall have the meaning assigned to it in Section 3.6.
"Refinancing" shall mean the repayment in full by Borrower of the Prior
Lender Obligations on the Closing Date.
"Release" shall mean any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment, including the movement of
Hazardous Material through or in the air, soil, surface water, ground water or
property.
"Responsible Financial Officer" shall mean Borrower's Chief Financial
Officer, Treasurer or Controller.
"Requisite Lenders" shall mean (a) Lenders having more than sixty-six
and two-thirds percent (66 2/3%) of the Commitments of all Lenders, or (b) if
the Commitments have been terminated, more than sixty-six and two-thirds percent
(66 2/3%) of the aggregate outstanding amount of the Loans.
A-14
64
"Requisite Revolving Lenders" shall mean (a) Lenders having more than
sixty-six and two-thirds percent (66 2/3%) of the Revolving Loan Commitments of
all Lenders, or (b) if the Revolving Loan Commitments have been terminated, more
than sixty-six and two-thirds percent (66 2/3%) of the aggregate outstanding
amount of the Revolving Loan.
"Restricted Payment" shall mean (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 a Person's Stock,
(b) any payment on account of the purchase, redemption, defeasance, sinking fund
or other retirement of a Person'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 Person 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
Person'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 Person other than payment of compensation in the ordinary
course to stockholders who are employees of such Person; and (g) any payment of
management fees (or other fees of a similar nature) by such Person to any
Stockholder of such Person or their Affiliates.
"Retailer Agreements" shall mean any agreement between Borrower and any
other entity whereby such entity agrees to allow Borrower to operate Borrower's
amusement vending machines and equipment in exchange for a fixed fee or a
percentage of proceeds from such machines or equipment.
"Retiree Welfare Plan" shall mean, at any time, a Plan that is a
"welfare plan" as defined in Section 3(2) of ERISA, that provides for continuing
coverage or benefits for any participant or any beneficiary of a participant
after such participant's termination of employment, other than continuation
coverage provided pursuant to Section 4980B of the IRC and at the sole expense
of the participant or the beneficiary of the participant.
"Revolving Credit Advance" shall have the meaning assigned to it in
Section 1.1(a)(i).
"Revolving Credit Agent" shall mean Comerica or its successor appointed
pursuant to Section 9.7.
"Revolving Lenders" shall mean, as of any date of determination,
Lenders having a Revolving Loan Commitment.
"Revolving Loan" shall mean, 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 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 Account" shall have the meaning set forth in Section
1.10.
"Revolving Loan Commitment" shall mean (a) as to any Revolving Lender,
the aggregate commitment of such Revolving Lender to make Revolving Credit
Advances and/or incur obligations with respect to Letters of Credit as set forth
on Annex J to the Agreement or in the most recent Assignment Agreement executed
by such Revolving Lender and (b) as to all Revolving Lenders, the aggregate
commitment of all Revolving Lenders to make Revolving Credit Advances and/or
incur obligations with respect to Letters of Credit, which aggregate commitment
shall be Ten Million Dollars ($10,000,000) on the Closing Date, as such amount
may be adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Note" shall have the meaning assigned to it in Section
1.1(a)(ii).
A-15
65
"Security Agreement" shall mean the Security Agreement of even date
herewith entered into between Agent, on behalf of itself and Lenders, and
Borrower.
"Senarck Acquisition" shall mean that certain Permitted Acquisition of
Borrower to acquire substantially all of the assets of Senarck, Inc, as the
Target, in accordance with the terms of Section 6.1.
"Senior Funded Debt" shall mean Funded Debt less Subordinated Debt.
"Senior Funded Debt Ratio" shall mean, as measured for Borrower and its
Subsidiaries, on a consolidated basis as of the last day of each Fiscal Quarter,
the ratio of (a) Senior Funded Debt as of any date of determination, to (b)
EBITDA as measured on a rolling four(4) Fiscal Quarter basis ending on the date
of determination.
"Solvent" shall mean, 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 probably 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
(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, guarantees and pension plan liabilities) at any time shall
be computed as the amount which, in light of all the facts and circumstances
existing at the time, represents the amount which can be reasonably be expected
to become an actual or matured liability.
"Stock" shall mean all shares, options, warrants, general or limited
partnership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership 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, as amended).
"Subordinated Debt" shall mean the Indebtedness of Borrower evidenced
by the Subordinated Notes and any other Indebtedness of Borrower 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.
"Subordinated Notes" shall mean (a) those certain trust preferred
securities due December 15, 2028 issued by American Coin Merchandising Trust I
in the aggregate original principal amount of $17,000,000, the guaranties of
Borrower related thereto and junior subordinated debentures of Borrower, and (b)
those certain notes and agreements relating to Indebtedness of Borrower existing
as of the Closing Date which Lender requires to be subordinated to the prior
payment of the Obligations.
"Subsidiary" shall mean, with respect to any Person, (a) any
corporation of which an aggregate of more than fifty percent (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 and/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 more than fifty percent (50%) 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 fifty
percent (50%) of which any such Person is a general partner or may exercise the
powers of a general partner.
"Tangible Net Worth" shall mean, with respect to any Person as of any
date of determination, shareholders equity on a consolidated basis, plus
Subordinated Debt, minus the amount by which the purchase price of tangible net
assets exceeds fair market value of such tangible net assets, net of accumulated
amortization.
A-16
66
"Taxes" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding franchise fees
and taxes imposed on or measured by the net income of Agent, Revolving Credit
Agent or a Lender by the jurisdictions under the laws of which Agent, Revolving
Credit Agent and Lenders are organized or any political subdivision thereof.
"Term Lenders" shall mean those Lenders having Term Loan Commitments.
"Term Loan" shall have the meaning assigned to it in Section 1.1(b)(i).
"Term Loan Account" shall have the meaning assigned to it in Section
1.10.
"Term Loan Commitment" shall mean (a) as to any Term Lender, the
commitment of such Term Lender to make its Pro Rata Share of the Term Loan as
set forth on Annex J to the Agreement or in the most recent Assignment Agreement
executed by such Term Lender, and (b) as to all Term Lenders, the aggregate
commitment of all Term Lenders to make the Term Loan, which aggregate commitment
shall be Forty-Five Million Dollars ($45,000,000) on the Closing Date, as to
each of clauses (a) and (b), as such Term Loan Commitments may be reduced,
amortized or adjusted from time to time in accordance with the Agreement.
"Term Loan Termination Date" shall mean the earliest of (a) June 30,
2005, (b) the date of any declaration by Agent that the Loans are forthwith due
and payable pursuant to Section 8.2(b), and (c) the date of full, final and
complete payment by Borrower of the Term Loan.
"Term Note" shall have the meaning assigned to it in Section 1.1(b)(i).
"Termination Date" shall mean the date on which the Loans have been
fully, finally and completely repaid in full and all other Obligations under the
Agreement and the other Loan Documents have been completely discharged and
Letter of Credit Obligations have been cash collateralized, canceled or backed
by stand-by Letters of Credit in accordance in a manner reasonably required by
Revolving Credit Agent, and Borrower shall not have any further right to borrow
any monies under the Agreement.
"Third Party Interactives" shall mean all Persons with whom Borrower
exchanges data electronically in the ordinary course of business, including,
without limitation, customers, suppliers, third-party vendors, subcontractors,
processors-converters, shippers and warehousemen.
"Title IV Plan" shall mean an employee pension benefit plan, as defined
in Section 3 (2) of ERISA (other than a Multiemployer Plan), which is covered by
Title IV of ERISA, and which Borrower or any ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
"Total Funded Debt Ratio" shall mean, as measured for Borrower and its
Subsidiaries, on a consolidated basis as of the last day of each Fiscal Quarter
of Borrower, the ratio of (a) Funded Debt as of any date of determination, to
(b) the EBITDA as measured on a rolling four (4) Fiscal Quarter basis ending on
that date of determination.
"Trademark Security Agreement" shall mean the Trademark Security
Agreement made in favor of Agent, on behalf of Lenders, by Borrower.
"Trademark License" shall mean rights under any written agreement now
owned or hereafter acquired by Borrower granting any right to use any Trademark.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by Borrower: (a) all trademarks, trade names, corporate names, business
names, trade styles, service marks, logos, other source or business identifiers,
prints and labels on which any of the foregoing have appeared or appear, designs
and general intangibles of like nature (whether registered or unregistered), now
owned or existing or hereafter adopted or acquired, all registrations and
recordings thereof, and all applications in connection therewith, including
A-17
67
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.
"Unfunded Pension Liability" shall mean, 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
Borrower or any ERISA Affiliate as a result of such transaction.
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 as in effect in the State of New York to the extent the same are used or
defined therein. 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
"include" shall be deemed to be followed by the words "without limitation";
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. Whenever
any provision in any Loan Document refers to the knowledge (or an analogous
phrase) of Borrower, such words are intended to signify that Borrower has actual
knowledge or awareness of a particular fact or circumstance or that Borrower, if
it had exercised reasonable diligence, would have known or been aware of such
fact or circumstance.
X-00
00
XXXXX X (SECTION 1.2)
TO
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Letters of Credit. Subject to the terms and conditions of
this Agreement, Revolving Credit Agent may through its Issuing Office, at any
time and from time to time from and after the date hereof until thirty (30) days
prior to the Commitment Termination Date, upon the written request of Borrower
accompanied by a duly executed Letter of Credit Agreement and such other
documentation related to the requested Letter of Credit as Revolving Credit
Agent may reasonably require, issue standby or documentary Letters of Credit for
the account of Borrower, in an aggregate undrawn amount for all Letters of
Credit issued hereunder at any one time outstanding, not to exceed the Letter of
Credit Maximum Amount. Each Letter of Credit shall have an expiration date not
later than one (1) year from its date of issuance; provided that each Letter of
Credit (including any renewal thereof) shall expire not later than ten (10)
Business Days prior to the Commitment Termination Date in effect on the date of
issuance thereof. The submission of all applications in respect of and the
issuance of each Letter of Credit hereunder shall be subject in all respects to
the Uniform Customs and Practices for Documentary Credits of the International
Chamber of Commerce, 1993 Revisions, ICC Publication No. 500 or, if applicable,
ISP 98, and any successor documentation thereto, as selected by Revolving Credit
Agent. In the event of any conflict between this Agreement and any document
relating to any Letter of Credit other than any Letter of Credit, this Agreement
shall control.
(b) Conditions to Issuance. No Letter of Credit shall be
issued at the request and for the account of Borrower unless, as of the date of
issuance of such Letter of Credit:
(i) the face amount of the Letter of Credit requested, plus
the aggregate amount of all unpaid Letter of Credit Obligations, does
not exceed the Letter of Credit Maximum Amount;
(ii) the face amount of the Letter of Credit requested, plus
the aggregate principal amount of all Advances, plus the principal
amount of all Advances requested but not yet funded, plus the aggregate
amount of all unpaid Letter of Credit Obligations, does not exceed the
aggregate Revolving Loan Commitment;
(iii) both immediately before and immediately after issuance
of the Letter of Credit requested, no Default or Event of Default
exists;
(iv) the execution of the Letter of Credit Agreement with
respect to the Letter of Credit requested will not violate the terms
and conditions of any material contract, agreement or other borrowing
of Borrower;
(v) the Borrower shall have delivered to Revolving Credit
Agent at its Issuing Office, not less than five (5) Business Days prior
to the requested date for issuance (or such shorter time as the
Revolving Credit Agent, in its sole discretion, may permit), the Letter
of Credit Agreement related thereto, together
B-1
69
with such other documents and materials as may be reasonably required
pursuant to the terms thereof, and the terms of the proposed Letter of
Credit shall be satisfactory to Revolving Credit Agent and its Issuing
Office in the exercise of its reasonable discretion;
(vi) no order, judgment or decree of any court, arbitrator or
governmental authority having competent jurisdiction shall purport by
its terms to enjoin or restrain Revolving Credit Agent from issuing the
Letter of Credit, or any Revolving Lender from taking an assignment of
Pro Rata Share pursuant to clause (f) hereof, and no law, rule,
regulation, request or directive (whether or not having the force of
law) shall prohibit or request that Revolving Credit Agent refrain from
issuing, or any Revolving Lender refrain from taking an assignment of
its Pro Rata Share of, the Letter of Credit requested or letters of
credit generally;
(vii) there shall have been no introduction of or change in
the interpretation of any law or regulation that would make it unlawful
or unduly burdensome for Revolving Credit Agent to issue the requested
Letter of Credit, no general suspension of trading on the New York
Stock Exchange or any other national securities exchange, no
declaration of a general banking moratorium by banking authorities in
the United States, Michigan or the respective jurisdictions in which
the Revolving Lenders, the Borrower and the beneficiary of the
requested Letter of Credit are located, and no establishment of any new
restrictions on transactions involving letters of credit or on banks
materially affecting the extension of credit by banks; and
(viii) Revolving Credit Agent shall have received the issuance
fee required in connection with the issuance of such Letter of Credit
pursuant to clause (e) hereof.
Each Letter of Credit Agreement submitted to Revolving Credit Agent pursuant
hereto shall constitute the certification by the Borrower of the matters set
forth in this clause (b) (i) through (viii). The Revolving Credit Agent shall be
entitled to rely on such certification without any duty of inquiry.
(c) Notice. Revolving Credit Agent shall give notice,
substantially in the form attached as Exhibit C, to each Revolving Lender of the
issuance of each Letter of Credit, not later than three (3) Business Days after
issuance of each Letter of Credit, specifying the amount thereof and the amount
of such Revolving Lender's Pro Rata Share thereof.
(d) Letter of Credit Fees. Borrower shall pay to Revolving
Credit Agent for distribution to the Revolving Lenders in accordance with their
Pro Rata Shares, Letter of Credit Fees as follows:
A per annum Letter of Credit Fee (which shall be prorated with respect
to any Letter of Credit with an original or renewal term of less than a
full year) with respect to the undrawn amount of each Letter of Credit
at a rate equal to Applicable L/C Margin, exclusive of the issuance fee
of one-eighth of one
B-2
70
percentage point (1/8%) per annum on the face amount thereof to be paid
to Revolving Credit Agent under clause (e) hereof.
If any change in any law or regulation or in the interpretation thereof by any
court or administrative or governmental authority charged with the
administration thereof shall either (i) impose, modify or cause to be deemed
applicable any reserve, special deposit, limitation or similar requirement
against letters of credit issued by, or assets held by, or deposits in or for
the account of, Revolving Credit Agent or any of the Revolving Lenders or (ii)
impose on Revolving Credit Agent or any of the Revolving Lenders any other
condition regarding this Agreement or the Letters of Credit, and the result of
any event referred to in clause (i) or (ii) above shall be to increase in an
amount deemed material by Revolving Credit Agent or the Revolving Lenders the
cost or expense to Revolving Credit Agent or the Revolving Lenders of issuing or
maintaining or participating in any of the Letters of Credit (which increase in
cost or expense shall be determined by the Revolving Credit Agent's or such
Revolving Lender's reasonable allocation of the aggregate of such cost increases
and expense resulting from such events), then, upon written demand by Revolving
Credit Agent or such Revolving Lender, as the case may be, the Borrower shall,
within ten days following demand for payment, pay to Revolving Credit Agent or
such Revolving Lender, as the case may be, from time to time as specified by
Revolving Credit Agent or such Revolving Lender, additional amounts which shall
be sufficient to compensate Revolving Credit Agent or such Revolving Lender for
such increased cost and expense, together with interest on each such amount from
ten days after the date demanded until payment in full thereof at the Base Rate
plus the Applicable Revolver Base Margin. A certificate as to such increased
cost or expense incurred by Revolving Credit Agent or such Revolving Lender, as
the case may be, as a result of any event mentioned in clause (i) or (ii) above,
shall be promptly submitted to the Borrower setting forth in reasonable detail
the basis for determining such additional amount and shall be conclusively
presumed to be correct, absent manifest error, as to the amount thereof.
All payments by the Borrower to Revolving Credit Agent or the Revolving Lenders
under this clause (d) shall be made in Dollars and in immediately available
funds at Revolving Credit Agent's Issuing Office or such other office of
Revolving Credit Agent as may be designated from time to time by written notice
to the Borrower by Revolving Credit Agent. The aforesaid fees shall be
nonrefundable under all circumstances, shall be payable quarterly in advance on
the first day of each calendar quarter, beginning January 1, 2001 and shall be
calculated on the basis of a 360 day year and assessed for the actual number of
days from the date of the issuance thereof to the stated expiration thereof.
(e) Issuance Fees. In connection with the Letters of Credit,
Borrower shall pay to Revolving Credit Agent a letter of credit issuance fee of
one-eighth percentage point (1/8%) per annum on the face amount of all Letters
of Credit (prorated as provided in clause(d)). In addition to the Letter of
Credit Fees, Borrower shall pay, for the sole account of the Revolving Credit
Agent, standard documentation, administration, payment and cancellation charges
assessed by Revolving Credit Agent or its Issuing Office, at the times, in the
amounts and on the terms set forth or to be set forth from time to time in the
standard fee schedule of Revolving Credit Agent's Issuing Office in effect from
time to time.
B-3
71
(f) Draws and Demands for Payment Under Letters of Credit.
(i) Borrower agrees to pay to the Revolving Credit Agent, on
the day on which the Revolving Credit Agent shall honor a draft or
other demand for payment presented or made under any Letter of Credit,
an amount equal to the amount paid by the Revolving Credit Agent in
respect of such draft or other demand under such Letter of Credit and
all expenses paid or incurred by the Revolving Credit Agent relative
thereto. Unless Borrower shall have made such payment to Revolving
Credit Agent on such day, upon each such payment by Revolving Credit
Agent, Revolving Credit Agent shall be deemed to have disbursed to
Borrower, and Borrower shall be deemed to have elected to substitute
for its reimbursement obligation, an Advance from the Revolving Lenders
in an amount equal to the amount so paid by the Revolving Credit Agent
in respect of such draft or other demand under such Letter of Credit.
Such Advance shall be disbursed notwithstanding any failure to satisfy
any conditions for disbursement of any Advance set forth in Article 1
hereof and, to the extent of the Advance so disbursed, the
reimbursement obligation of the Borrower to the Revolving Credit Agent
under this clause (f) shall be deemed satisfied.
(ii) If Revolving Credit Agent shall honor a draft or other
demand for payment presented or made under any Letter of Credit,
Revolving Credit Agent shall provide notice thereof to the Borrower on
the date such draft or demand is honored, and to each Revolving Lender
on such date unless the Borrower shall have satisfied its reimbursement
obligation hereunder by payment to Revolving Credit Agent on such date.
Revolving Credit Agent shall further use reasonable efforts to provide
notice to the Borrower prior to honoring any such draft or other demand
for payment, but such notice, or the failure to provide such notice,
shall not affect the rights or obligations of Revolving Credit Agent
with respect to any Letter of Credit or the rights and obligations of
the parties hereto, including without limitation the obligations of
Borrower hereunder.
(iii) Upon issuance by Revolving Credit Agent of each Letter
of Credit hereunder and upon execution of this Agreement with respect
to the Existing Letters of Credit, each Revolving Lender shall
automatically acquire a pro rata risk participation interest in such
Letter of Credit and related Letter of Credit Payment based on its
respective Pro Rata Share. Each Revolving Lender, on the date a draft
or demand under any Letter of Credit is honored, shall make its Pro
Rata Share of the amount paid by Revolving Credit Agent, and not
reimbursed by Borrower by payment to Revolving Credit Agent on such
day, available in immediately available funds at the principal office
of Revolving Credit Agent for the account of Revolving Credit Agent. If
and to the extent such Revolving Lender shall not have made such pro
rata portion available to Revolving Credit Agent, such Revolving
Lender, Borrower severally agree to pay to Revolving Credit Agent
forthwith on demand such amount together with interest thereon, for
each day from the date such amount was paid by Revolving Credit Agent
until such amount is so made available to Revolving Credit Agent at a
per annum rate equal to the interest rate applicable during such period
to the related Advance
B-4
72
disbursed hereunder in respect of the reimbursement obligation of
Borrower for Letters of Credit. If such Revolving Lender shall pay such
amount to Revolving Credit Agent together with such interest, such
amount so paid with respect to Letters of Credit shall constitute an
Advance by such Revolving Lender disbursed in respect of the
reimbursement obligation of the Borrower under clause (f)(i) for
purposes of this Agreement, effective as of the date such amount was
paid by Revolving Credit Agent. The failure of any Revolving Lender to
make its pro rata portion of any such amount paid by Revolving Credit
Agent available to the Revolving Credit Agent shall not relieve any
other Revolving Lender of its obligation to make available its pro rata
portion of such amount, but no Revolving Lender shall be responsible
for failure of any other Revolving Lender to make such pro rata portion
available to Revolving Credit Agent.
(iv) Nothing in this Agreement shall be construed to require
or authorize any Revolving Lender to issue any Letter of Credit, it
being recognized that Revolving Credit Agent shall be the sole issuer
of Letters of Credit under this Agreement.
(g) Obligations Irrevocable. The obligations of Borrower to
make payments to Revolving Credit Agent or the Revolving Lenders with respect to
Letter of Credit Obligations under clause (f) hereof, shall be unconditional and
irrevocable and not subject to any qualification or exception whatsoever,
including, without limitation:
(i) Any lack of validity or enforceability of any Letter of
Credit or any documentation relating to any Letter of Credit or to any
transaction related in any way to such Letter of Credit (the "Letter of
Credit Documents");
(ii) Any amendment, modification, waiver, consent, or any
substitution, exchange or release of or failure to perfect any interest
in collateral or security, with respect to any of the Letter of Credit
Documents;
(iii) The existence of any claim, setoff, defense or other
right which Borrower may have at any time against any beneficiary or
any transferee of any Letter of Credit (or any persons or entities for
whom any such beneficiary or any such transferee may be acting),
Revolving Credit Agent or any Revolving Lender or any other person or
entity, whether in connection with any of the Letter of Credit
Documents, the transactions contemplated herein or therein or any
unrelated transactions;
(iv) Any draft or other statement or 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;
(v) Payment by Revolving Credit Agent to the beneficiary under
any Letter of Credit against presentation of documents which do not
comply with the terms of the Letter of Credit, including failure of any
documents to bear any reference or adequate reference to such Letter of
Credit;
B-5
73
(vi) Any failure, omission, delay or lack on the part of
Revolving Credit Agent or any Revolving Lender or any party to any of
the Letter of Credit Documents to enforce, assert or exercise any
right, power or remedy conferred upon Revolving Credit Agent, any
Revolving Lender or any such party under this Agreement, any of the
Loan Documents or any of the Letter of Credit Documents, or any other
acts or omissions on the part of Revolving Credit Agent, any Revolving
Lender or any such party; or
(vii) Any other event or circumstance that would, in the
absence of this clause (g), result in the release or discharge by
operation of law or otherwise of Borrower from the performance or
observance of any obligation, covenant or agreement contained in clause
(f).
No setoff, counterclaim, reduction or diminution of any obligation or any
defense of any kind or nature which Borrower has or may have against the
beneficiary of any Letter of Credit shall be available hereunder to Borrower
against Revolving Credit Agent or any Revolving Lender. Nothing contained in
this clause (g) shall be deemed a waiver of any claim or to prevent Borrower,
after satisfaction in full of the absolute and unconditional obligations of
Borrower hereunder, from asserting in a separate action any claim, defense, set
off or other right which they (or any of them) may have against Revolving Credit
Agent or any Revolving Lender.
(h) Risk Under Letters of Credit.
(i) In assigning and the handling of Letters of Credit and any
security therefor, or any documents or instruments given in connection
therewith, Revolving Credit Agent shall have the sole right to take or
refrain from taking any and all actions under or upon the Letters of
Credit.
(ii) Subject to other terms and conditions of this Agreement,
Revolving Credit Agent shall issue the Letters of Credit and shall hold
the documents related thereto in its own name and shall make all
collections thereunder and otherwise administer the Letters of Credit
in accordance with Revolving Credit Agent's regularly established
practices and procedures and Revolving Credit Agent will have no
further obligation with respect thereto. In the administration of
Letters of Credit, Revolving Credit Agent shall not be liable for any
action taken or omitted on the advice of counsel, accountants,
appraisers or other experts selected by Revolving Credit Agent with due
care and Revolving Credit Agent may rely upon any notice,
communication, certificate or other statement from Borrower,
beneficiaries of Letters of Credit, or any other Person which Revolving
Credit Agent believes to be authentic. Revolving Credit Agent will,
upon request, furnish the Revolving Lenders with copies of Letter of
Credit Agreements, Letters of Credit and documents related thereto.
(iii) In connection with the issuance and administration of
Letters of Credit and the assignments hereunder, Revolving Credit Agent
makes no representation and shall, subject to clause (g) hereof, have
no responsibility with respect to (A) the obligations of Borrower or,
the validity, sufficiency or enforceability of any document or
instrument given in connection therewith, (B)
B-6
74
the financial condition of, any representations made by, or any act or
omission of Borrower or any other Person, or (C) any failure or delay
in exercising any rights or powers possessed by Revolving Credit Agent
in its capacity as issuer of Letters of Credit in the absence of its
gross negligence or willful misconduct. Each of the Revolving Lenders
expressly acknowledge that they have made and will continue to make
their own evaluations of Borrower's creditworthiness without reliance
on any representation of Revolving Credit Agent or Revolving Credit
Agent's officers, Revolving Credit Agents and employees.
(iv) If at any time Revolving Credit Agent shall recover any
part of any unreimbursed amount for any draw or other demand for
payment under a Letter of Credit, or any interest thereon, Revolving
Credit Agent shall receive same for the pro rata benefit of the
Revolving Lenders in accordance with their respective Pro Rata Share
therein and shall promptly deliver to each Revolving Lender its share
thereof, less such Revolving Lender's pro rata share of the costs of
such recovery, including court costs and attorney's fees. If at any
time any Revolving Lender shall receive from any source whatsoever any
payment on any such unreimbursed amount or interest thereon in excess
of such Revolving Lender's Pro Rata Share of such payment, such
Revolving Lender will promptly pay over such excess to Revolving Credit
Agent, for redistribution in accordance with this Agreement.
(i) Indemnification.
(i) Borrower hereby indemnifies and agrees to hold harmless
the Revolving Lenders and the Revolving Credit Agent, and their
respective officers, directors, employees and agents, from and against
any and all claims, damages, losses, liabilities, costs or expenses of
any kind or nature whatsoever which the Revolving Lenders or the
Revolving Credit Agent or any such person may incur or which may be
claimed against any of them by reason of or in connection with any
Letter of Credit, and neither any Revolving Lender nor the Revolving
Credit Agent or any of their respective officers, directors, employees
or agents shall be liable or responsible for: (A) the use which may be
made of any Letter of Credit or for any acts or omissions of any
beneficiary in connection therewith; (B) the validity, sufficiency or
genuineness of documents or of any endorsement thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (C) payment by Revolving Credit
Agent to the beneficiary under any Letter of Credit against
presentation of documents which do not comply with the terms of any
Letter of Credit (unless such payment resulted from the gross
negligence or willful misconduct of Revolving Credit Agent), including
failure of any documents to bear any reference or adequate reference to
such Letter of Credit; (D) any error, omission, interruption or delay
in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit; or (E) any other
event or circumstance whatsoever arising in connection with any Letter
of Credit; provided, however, that Borrower shall not be required to
indemnify the Revolving Lenders and Revolving Credit Agent and such
other persons, and the Revolving Lenders and Revolving Credit Agent
shall be liable to Borrower to the extent, but only to the
B-7
75
extent, of any direct, as opposed to consequential or incidental,
damages suffered by Borrower which were caused by Revolving Credit
Agent's gross negligence, willful misconduct or wrongful dishonor of
any Letter of Credit after the presentation to it by the beneficiary
thereunder of a draft or other demand for payment and other
documentation strictly complying with the terms and conditions of such
Letter of Credit.
(ii) It is understood that in making any payment under a
Letter of Credit Revolving Credit Agent will rely on documents
presented to it under such Letter of Credit as to any and all matters
set forth therein without further investigation and regardless of any
notice or information to the contrary. It is further acknowledged and
agreed that Borrower may have rights against the beneficiary or others
in connection with any Letter of Credit with respect to which the
Revolving Lenders are alleged to be liable and it shall be a condition
of the assertion of any liability of the Revolving Lenders under this
Section that Borrower shall contemporaneously pursue all remedies in
respect of the alleged loss against such beneficiary and any other
parties obligated or liable in connection with such Letter of Credit
and any related transactions.
(j) Right of Reimbursement. Each Revolving Lender agrees to
reimburse Revolving Credit Agent on demand, pro rata in accordance with their
Pro Rata Shares, for (i) the out-of-pocket costs and expenses of Revolving
Credit Agent to be reimbursed by Borrower pursuant to any Letter of Credit
Agreement or any Letter of Credit, to the extent not reimbursed by Borrower and
(ii) any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, fees, expenses or disbursements of any kind and nature
whatsoever which may be imposed on, incurred by or asserted against Revolving
Credit Agent (in its capacity as issuer of any Letter of Credit) in any way
relating to or arising out of this Agreement, any Letter of Credit, any
documentation or any transaction relating thereto, or any Letter of Credit
Agreement, except to the extent that such liabilities, losses, costs or expenses
were incurred by Revolving Credit Agent solely as a result of Revolving Credit
Agent's gross negligence or willful misconduct.
B-8
76
ANNEX C (SECTION 1.8)
TO
CREDIT AGREEMENT
INTENTIONALLY OMITTED
X-0
00
XXXXX X (SECTION 2.1(a))
TO
CREDIT AGREEMENT
SCHEDULE OF ADDITIONAL CLOSING DOCUMENTS
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 Term Notes. Duly executed originals of the
Revolving Notes and the Term Notes 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 including any and all powers of attorneys required by
Agent.
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 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 subject to Liens permitted under Section 6.7 of the
Credit Agreement, including (i) such documents duly executed by Borrower
(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 reasonably 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 Borrower as debtor, together with copies of such
financing statements, none of which shall cover the Collateral, except for those
relating to the Prior Lender Obligations (all of which shall be terminated on
the Closing Date).
(b) Evidence satisfactory to Agent, including copies, of all
UCC-1 and other financing statements filed in favor of Borrower with respect to
each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all securities intermediaries
with respect to all securities accounts and securities entitlements of Borrower,
and (ii) all futures commission agents and clearing houses with respect to all
commodities contracts and commodities accounts held by Borrower.
F. Payoff Letter; Termination Statements. Copies of a duly executed
payoff letter, in form and substance satisfactory to Agent, by and between all
parties to the Prior Lender loan documents evidencing repayment in full of all
Prior Lender Obligations, together with (a) UCC-3 or other appropriate
termination statements, in form and substance satisfactory to Agent, manually
signed by the Prior Lender releasing all liens of Prior Lender upon any of the
personal property of Borrower, and (b) termination of all blocked account
agreements, bank agency agreements or other similar agreements or arrangements
or arrangements in favor of Prior Lender or relating to the Prior Lender
Obligations.
G. Trademark Security Agreement. Duly executed original of the
Trademark Security Agreement, dated the Closing Date and signed by Borrower, all
in form and substance satisfactory to Agent, together with all instruments,
documents and agreements executed pursuant thereto.
X-0
00
X. 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 on the Closing
Date.
I. Letter of Direction. Duly executed originals of a letter of
direction from Borrower addressed to Agent, on behalf of itself and Lenders,
with respect to the disbursement on the Closing Date of the proceeds of the Term
Loan and the initial Revolving Credit Advance.
J. Charter and Good Standing. For Borrower, 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.
K. Bylaws and Resolutions. For Borrower, (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.
L. Incumbency Certificates. For Borrower, 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.
M. Opinions of Counsel. Duly executed originals of opinions of Xxxxxx
Godward, LLP, special counsel for Borrower, which opinion shall include an
express statement to the effect that Agent and Lenders are authorized to rely on
such opinion.
N. Accountants' Letters. A letter from Borrower to its independent
auditors authorizing the independent certified public accountants of Borrower to
communicate with Agent in accordance with Section 4.2.
O. Fee Letters. Duly executed originals of the Fee Letters.
P. Appointment of Agent for Service. An appointment of CT Corporation
as Borrower's agent for service of process.
Q. Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the President of Borrower in the name and on
behalf of Borrower, dated the Closing Date, stating that, since September 30,
2000 (a) no event or condition has occurred or is existing which could
reasonably be expected to have a Material Adverse Effect; (b) there has been no
material adverse change in the industry in which Borrower operates; (c) no
Litigation has been commenced which, 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) there have been no Restricted
Payments made by Borrower except as permitted under Section 6.14 of the Credit
Agreement; and (e) there has been no material increase in liabilities,
liquidated or contingent, and no material decrease in assets of Borrower or any
of its Subsidiaries.
R. 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 and to the extent
required pursuant to Section 5.9.
S. Subordination and Intercreditor Agreements. Agent and Lenders shall
have received any and all subordination and/or intercreditor agreements, all in
form and substance reasonably satisfactory to Agent as Agent shall have
reasonably deemed necessary or appropriate with respect to any Indebtedness of
Borrower.
X-0
00
X. Environmental Reports. Agent shall have received Phase I
Environmental Site Assessment Reports, consistent with American Society of
Testing and Materials (ASTM) Standard E 1527-94, and applicable state
requirements, on such of the Real Estate as Agent shall have reasonably
requested, dated no more than 6 months prior to the Closing Date, prepared by
environmental engineers reasonably satisfactory to Agent, all in form and
substance satisfactory to Agent; and Agent shall have further received such
environmental review and audit reports, including Phase II reports, with respect
to the Real Estate of Borrower as Agent shall have reasonably requested, and
Agent shall be satisfied 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 satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports.
U. Appraisals. Agent shall have received appraisals as to such of the
Equipment owned by Borrower as Agent shall have reasonably requested, which
shall be in form and substance satisfactory to Agent.
V. Audited Financials; Financial Condition. Agent shall have received
Borrower's final Financial Statements for its Fiscal Year ended December 31,
1999, audited by KPMG, LLP. Borrower shall have provided Agent with its current
operating statements, a consolidated balance sheet and statement of income, the
Pro Forma and Projections, in each case in form and substance satisfactory to
Agent, and Agent shall be satisfied, in its sole discretion, with all of the
foregoing. Agent shall have further received a certificate of the Chief
Financial Officer of Borrower, in the name and on behalf of Borrower, based on
such Pro Forma and Projections, to the effect that (a) Borrower will be Solvent
upon the consummation of the transactions contemplated herein; (b) the Pro Forma
fairly presents the financial condition of Borrower as of the date thereof after
giving effect to the transactions contemplated by the Loan Documents; and (c)
the Projections are based upon estimates and assumptions stated therein, all of
which Borrower believes to be reasonable and fair in light of current conditions
and current facts known to Borrower and, as of the Closing Date, reflect
Borrower's good faith and reasonable estimates of its future financial
performance and of the other information projected therein for the period set
forth therein.
W. Other Documents. Such other certificates, documents and agreements
respecting Borrower as Agent may reasonably request.
D-4
80
ANNEX E (SECTION 4.1)
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS -- REPORTING
Borrower shall deliver or cause to be delivered to Agent or to Agent,
Revolving Credit Agent and Lenders, as indicated, the following:
(a) Quarterly Financials. To Agent, Revolving Credit Agent and
Lenders, within forty-five (45) days after the end of each Fiscal Quarter,
consolidated financial information regarding Borrower and its Subsidiaries,
certified by the Chief Financial Officer of Borrower, in the name and on behalf
of Borrower, including (i) unaudited balance sheets as of the close of such
Fiscal Quarter and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Quarter and
(ii) unaudited statements of income and cash flows for such Fiscal Quarter, in
each case setting forth in comparative form the figures for the corresponding
period in the prior year, all prepared in accordance with GAAP (subject to the
absence of footnotes and normal year-end adjustments). Such financial
information shall be accompanied by (A) a statement in reasonable detail (each,
a "Compliance Certificate") showing the calculations used in determining
compliance with each of the financial covenants set forth on Annex G which is
tested on a quarterly basis and (B) the certification of the Chief Financial
Officer of Borrower, in the name and on behalf of Borrower, that (i) such
financial information presents fairly in accordance with GAAP (subject to the
absence of footnotes and normal year-end adjustments) the financial position,
results of operations and statements of cash flows of Borrower and its
Subsidiaries, on a consolidated basis, as at the end of such Fiscal Quarter and
for the period then ended, (ii) any other information presented is true, correct
and complete in all material respects and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default shall
have occurred and be continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default. Notwithstanding anything to
the contrary contained in this clause (a), the delivery of Borrower's Quarterly
Report on Form 10-Q prepared in compliance with the requirement therefor and
filed with the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this clause (a) if such Quarterly Report complies with the
timing and information requirements of this clause (a);
(b) Operating Plan. To Agent, Revolving Credit Agent and
Lenders, as soon as available, but not later than thirty (30) days after the end
of each Fiscal Year, an annual operating plan for Borrower, approved by the
Board of Directors of Borrower, for the following year, which will include a
statement of all of the material assumptions on which such plan is based, will
include quarterly balance sheets and a quarterly monthly budget for the
following year and will integrate sales, gross profits, operating expenses,
operating profit and cash flow 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, Revolving Credit
Agent and Lenders, within ninety (90) days after the end of each Fiscal Year,
audited Financial Statements for Borrower and its Subsidiaries on a consolidated
(and, as to balance sheets and statements of income only, unaudited
consolidating) 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, certified without qualification, by KPMG, LLP,
or another independent certified public accounting firm of national standing or
otherwise reasonably acceptable to Agent. Notwithstanding anything to the
contrary contained in this clause (c), the delivery within the time period
specified in this clause (b) of Borrower's Annual Report on Form 10-K for such
Fiscal Year (together with Borrowers' annual report to shareholders prepared
pursuant to Rule 14a-3 under the Securities Exchange Act of 1934, as amended)
prepared in accordance with the requirements therefor and filed with the
Securities and Exchange Commission, together with the Accountants' Statement
described below, shall be deemed to satisfy the requirements of this clause (c)
if such Annual Report complies with the timing and information requirements of
this clause (c). Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in
determining compliance with each of the
E-1
81
financial covenants set forth on Annex G, (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 a Default or Event of
Default has occurred (or specifying those Defaults and 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 Defaults or 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
Borrower that all such Financial Statements present fairly in accordance with
GAAP the financial position, results of operations and statements of cash flows
of Borrower and its Subsidiaries on a consolidated and consolidating basis, as
at the end of such year and for the period then ended, and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default;
provided, that the delivery of the Accountants' Statement prepared by Borrower's
independent public accountants in connection with the Borrower's Annual Report
on Form 10-K for such Fiscal Year and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this clause (c)(iv) to
the extent such Accountants' Statement complies with the timing and information
requirements of this clause (c)(iv).
(d) Management Letters. To Agent, Revolving Credit Agent and
Lenders, within five (5) Business Days after receipt thereof by Borrower, copies
of all management letters, exception reports or similar letters or reports
received by Borrower from its independent certified public accountants;
(e) Default Notices. To Agent, Revolving Credit Agent and
Lenders, as soon as practicable, and in any event within five (5) Business Days
after an executive officer of Borrower has actual knowledge of the existence of
any Default, Event of Default or other event which has had a Material Adverse
Effect, telephonic or telecopied notice specifying the nature of such Default or
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, Revolving Credit
Agent and Lenders, promptly upon their becoming available, copies of: (i) all
Financial Statements, final reports, notices and proxy statements made publicly
available by Borrower to its security holders; (ii) all regular and periodic
reports and all registration statements and prospectuses, if any, filed by
Borrower 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 Borrower to the public
concerning material changes or developments in the business of any such Person;
(g) Subordinated Debt Notices. To Agent, within two (2)
Business Days after Borrower 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 of the Agreement;
(i) Litigation. To Agent in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against Borrower that
(i) seeks damages in excess of $500,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against Borrower or any ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by Borrower or any of its Subsidiaries, (v) alleges
the violation of any law regarding, or seeks remedies in connection with, any
Environmental Liabilities; or (vi) involves any product recall, in each case
under clauses (ii), (iii) or (v) which would reasonably be expected to have a
Material Adverse Effect;
(j) Insurance Notices. To Agent, disclosure of losses or
casualties required by Section 5.4 of the Agreement;
E-2
82
(k) Other Documents. To Agent, Revolving Credit Agent and
Lenders, such other financial and other information respecting Borrower's
business or financial condition as Agent or any Lender shall, from time to time,
reasonably request.
X-0
00
XXXXX X
TO
CREDIT AGREEMENT
INTENTIONALLY OMITTED
F-1
84
ANNEX G (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Borrower 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. Borrower 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 2001 and
Each Fiscal Year thereafter $7,500,000
; 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 (a) 50% of the amount of permitted Capital Expenditures for the
immediately prior period, and (b) 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.
(b) Minimum Fixed Charge Coverage Ratio. Borrower and its Subsidiaries
shall have on a consolidated basis at the end of each Fiscal Quarter set forth
below, a Fixed Charge Coverage Ratio for the rolling four Fiscal Quarters then
ended of not less than the following:
1.05 to 1.00 for the Fiscal Quarter ending March 31, 2001
1.10 to 1.00 for the Fiscal Quarter ending June 30, 2001
1.15 to 1.00 for the Fiscal Quarter ending September 30, 2001
1.20 to 1.00 for each Fiscal Quarter ending thereafter.
(c) Maximum Total Funded Debt Ratio. Borrower and its Subsidiaries on a
consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Total Funded Debt Ratio as of the last day of such Fiscal Quarter and
for the rolling four Fiscal Quarters then ended of not more than the following:
3.50 to 1.00 for each Fiscal Quarter beginning with the Fiscal Quarter
ending March 31, 2001 and continuing through the
Fiscal Quarter ending September 30, 2001;
2.75 to 1.00 for each Fiscal Quarter beginning with the Fiscal Quarter
ending December 31, 2001 and continuing through the
Fiscal Quarter ending September 30, 2002;
2.25 to 1.00 for each Fiscal Quarter beginning with the Fiscal Quarter
ending December 31, 2002 and continuing through the
Fiscal Quarter ending September 30, 2003; and
1.75 to 1.00 for each Fiscal Quarter ending thereafter.
(d) Maximum Senior Funded Debt Ratio. Borrower and its Subsidiaries on
a consolidated basis shall have, at the end of each Fiscal Quarter set forth
below, a Senior Funded Debt Ratio as of the last day of such Fiscal Quarter and
for the rolling four Fiscal Quarters then ended of not more than the following:
G-1
85
2.75 to 1.00 for each Fiscal Quarter beginning with the Fiscal Quarter
ending March 31, 2001 and continuing through the
Fiscal Quarter ending September 30, 2001;
2.00 to 1.00 for each Fiscal Quarter beginning with the Fiscal Quarter
ending December 31, 2001 and continuing through the
Fiscal Quarter ending September 30, 2002;
1.50 to 1.00 for each Fiscal Quarter beginning with the Fiscal Quarter
ending December 31, 2002 and continuing through the
Fiscal Quarter ending September 30, 2003; and
1.0 to 1.00 for each Fiscal Quarter ending thereafter.
(e) Tangible Net Worth. Borrower and its Subsidiaries on a consolidated
basis shall maintain a Tangible Net Worth of not less than the sum of (i)
$6,000,000; provided, however, that if the Senarc Acquisition is not closed and
concluded on or before June 30, 2001, such amount shall, from and after June 30,
2001, be $6,900,000, plus (ii) 90% of Net Income for the Fiscal Quarter ending
March 31, 2001 and for each Fiscal Quarter thereafter, plus (iii) 75% of the
proceeds of any issuance by Borrower of Stock (except to employees, directors or
former employees of Borrower pursuant to an employee stock option plan
maintained by Borrower) subsequent to the Closing Date.
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 Borrower, 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
Borrower's and its 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 (a) 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), (b)
changes in accounting principles concurred in by Borrower's certified public
accountants; (c) purchase accounting adjustments under A.P.B. 16 and/or 17 and
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 (d) 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,
Borrower 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, Borrower 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.
G-2
86
ANNEX H (SECTION 9.9(A)
TO
CREDIT AGREEMENT
LENDERS' WIRE TRANSFER INFORMATION
General Electric Capital Corporation:
Bankers Trust
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Account# 00-000-000
ABA#000-000-000
Reference Capital Funding, Inc./American Coin
Comerica Bank:
Comerica Bank
Detroit, MI
ABA: 07000096
Attn: Commercial Lending Services - Service Unit #8
Ref: American Coin Merchandising, Inc.
Key Bank National Association:
Key Bank N.A.
0000 Xxxxxxxx, Xxx. 000
Xxxxxx, XX 00000
ABA No.: 000000000
Account No:
Account Reference:
Xxxxx Fargo Bank, National Association:
Xxxxx Fargo Bank, N.A.
000 Xxxxxxxxxxx Xxxxxx Xxxxx Xxxxx - Xxxxx Xxxxx
Xxxxxx, XX 00000
ABA No.: 000000000
Account No.: General Ledger 2712507201
Account Reference: American Coin Merchandising, Inc. Colorado
RCBO AU3837
Obligor No. 02468251
Notify Xxxxxxxx Xxxxx at 303.293.5648
H-1
87
ANNEX I (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxx-Xxxxxxx, Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Husch & Eppenberger, LLC
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxxxx X. Rockers, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
Capital Funding, Inc.
000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxx X. Xxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Revolving Credit Agent or Comerica, at
Comerica Bank
000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telecopier No.: (000) 000.0000
Telephone No.: (000) 000.0000
(C) If to Key Bank National Association, at
Key Bank National Association
0000 Xxxxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxxx Xxxxxx
Telecopier No.: (000) 000.0000
Telephone No.: (000) 000.0000
(D) If to Xxxxx Fargo National Association, at
Xxxxx Fargo Bank, N.A.
633 Seventeenth Street Third Floor - Xxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxx Xxxxxxx,VP/SRM
Telecopier No.: (000) 000.0000
Telephone No.: (000) 000.0000
I-1
88
(E) If to Borrower, at
American Coin Merchandising, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: Xxxx Xxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With copies to:
Xxxxxx Godward, LLP
Xxx Xxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-2
89
ANNEX J (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
TERM LOAN REVOLVING LOAN
LENDERS COMMITMENT COMMITMENT COMMITMENT
------- ---------- -------------- ----------
GE CAPITAL $22,500,000 $ 2,500,000 $25,000,000
COMERICA BANK $ 9,400,000 $ 3,100,000 $12,500,000
KEY BANK, NATIONAL ASSOCIATION $ 7,500,000 $ 2,500,000 $10,000,000
XXXXX FARGO BANK, NATIONAL $ 5,600,000 $ 1,900,000 $ 7,500,000
ASSOCIATION
COMMITMENT $45,000,000 $10,000,000 $55,000,000
=========== =========== ===========
I-3
90
EXHIBIT 1.1(a)(1)
FORM OF REQUEST FOR REVOLVING CREDIT ADVANCE
No.
--------------
Dated:
-----------
TO: Comerica Bank ("Revolving Credit Agent")
RE: Credit Agreement dated December 29, 2000 by and among American Coin
Merchandising, Inc. ("Borrower"), General Electric Capital Corporation,
as Agent, Revolving Credit Agent and the Lenders signatory thereto (as
amended or otherwise modified from time to time, the "Credit
Agreement").
Borrower, pursuant to the Credit Agreement, requests a Revolving Credit
Advance from Revolving Credit Agent, as follows:
A. Date of Advance:
--------------
B. Type of Advance (check only one);
[ ] LIBOR Loan
[ ] Base Rate Loan
C. Amount of Advance:
-----------------------
D. Interest Period (not applicable to Base Rate Loans)
________ months (insert 1, 2, 3 or 6)
E. Disbursement Instructions
[ ] Xxxxx Fargo Bank Account No.
-------------------
[ ] Other:
-----------------------------------------
-----------------------------------------------
Borrower certifies to the matters specified in Section 2.2 of the
Credit Agreement.
Capitalized terms used herein, except as defined to the contrary, have
the meanings given them in the Credit Agreement.
I-4
91
AMERICAN COIN MERCHANDISING, INC.,
as Borrower
By:
-------------------------------
Title:
----------------------------
Revolving Credit Agent Approval:
---------------------------
I-5
92
EXHIBIT 1.1(a)(ii)
TO
CREDIT AGREEMENT
FORM OF REVOLVING NOTE
, $
--------------- ------ --------------
FOR VALUE RECEIVED, the undersigned, AMERICAN COIN MERCHANDISING, INC.,
a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
___________________________, a __________________________ ("Revolving Lender"),
at the office of COMERICA BANK, a Michigan banking corporation, as agent for the
Revolving Lenders ("Revolving Credit Agent") at its office at 000 Xxxxxxxx
Xxxxxx, Xxxxxxx, Xxxxxxxx 00000, or at such other place as Revolving Credit
Agent may designate from time to time in writing, in lawful money of the United
States of America and in immediately available funds, the amount of
___________________($__________) or so much thereof as is from time to time
advanced and outstanding. All capitalized terms used but not otherwise defined
herein have the meanings given to them in the Credit Agreement (as hereinafter
defined) or in Annex A thereto.
This Revolving Note is one of the Revolving Notes issued pursuant to
that certain Credit Agreement dated as of December 29, 2000 (including all
annexes, exhibits and schedules thereto and as from time to time amended,
restated, supplemented or otherwise modified, the "Credit Agreement"), by and
among Borrower, General Electric Capital Corporation, as Agent, Revolving Credit
Agent, Revolving Lender and the other Persons signatory thereto from time to
time as Lenders, and is entitled to the benefit and security of the Credit
Agreement, the Security Agreement and all of the other Loan Documents referred
to therein. Reference is hereby made to the Credit Agreement for a statement of
all of the terms and conditions under which the Loans evidenced hereby are made
and are to be repaid. The date and amount of each Revolving Credit Advance made
by Revolving Lenders to Borrower, the rates of interest applicable thereto and
the date and amount of each payment made on account of the principal thereof,
shall be recorded by Revolving Credit Agent on its books; provided that the
failure of Revolving Credit Agent to make any such recordation shall not affect
the obligations of Borrower to make a payment when due of any amount owing under
the Credit Agreement or this Revolving Note in respect of the Revolving Credit
Advances made by Revolving Lender to Borrower.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement.
Interest thereon shall be paid until such principal amount is paid in full at
such interest rates and at such times, and pursuant to such calculations, as are
specified in the Credit Agreement. The terms of the Credit Agreement are hereby
incorporated herein by reference.
If any payment on this Revolving Note becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default, this Revolving
Note may, as provided in the Credit Agreement, and without demand, notice or
legal process of any kind, be declared, and immediately shall become, due and
payable.
Time is of the essence of this Revolving Note. Demand, presentment,
protest and notice of nonpayment and protest are hereby waived by Borrower.
Except as provided in the Credit Agreement, this Revolving Note may not
be assigned by Lender to any Person.
THIS REVOLVING NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE.
AMERICAN COIN MERCHANDISING, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
I-6
93
EXHIBIT 1.1(b)(i)
TO
CREDIT AGREEMENT
FORM OF TERM NOTE
, $
--------------- ------ --------------
FOR VALUE RECEIVED, the undersigned, AMERICAN COIN MERCHANDISING, INC.,
a Delaware corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
__________ ("Lender"), at the office of GENERAL ELECTRIC CAPITAL CORPORATION, a
New York corporation, as agent for the Lenders ("Agent") at its address at 000
Xxxxxxx Xxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxxxxxxxx 00000, or at such other place as
Agent may designate from time to time in writing, in lawful money of the United
States of America and in immediately available funds, the amount of
___________________ ($__________). All capitalized terms used but not otherwise
defined herein have the meanings given to them in the Credit Agreement (as
hereinafter defined) or in Annex A thereto.
This Term Note is one of the Term Notes issued pursuant to that certain
Credit Agreement dated as of December ____, 2000 (including all annexes,
exhibits and schedules thereto and as from time to time amended, restated,
supplemented or otherwise modified, the "Credit Agreement"), by and among
Borrowers, Agent, COMERICA BANK, a Michigan banking corporation, as Revolving
Credit Agent, Lender and the other Persons signatory thereto from time to time
as Lenders, and is entitled to the benefit and security of the Credit Agreement,
the Security Agreement and all of the other Loan Documents referred to therein.
Reference is hereby made to the Credit Agreement for a statement of all of the
terms and conditions under which the Loans evidenced hereby are made and are to
be repaid. The principal balance of the Term Loan, the rates of interest
applicable thereto and the date and amount of each payment made on account of
the principal thereof, shall be recorded by Agent on its books; provided that
the failure of Agent to make any such recordation shall not affect the
obligations of Borrower to make a payment when due of any amount owing under the
Credit Agreement or this Term Note.
The principal amount of the indebtedness evidenced hereby shall be
payable in the amounts and on the dates specified in the Credit Agreement.
Interest thereon shall be paid until such principal amount is paid in full at
such interest rates and at such times, and pursuant to such calculations, as are
specified in the Credit Agreement. The terms of the Credit Agreement are hereby
incorporated herein by reference.
If any payment on this Term Note becomes due and payable on a day other
than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
Upon and after the occurrence of any Event of Default, this Term Note
may, as provided in the Credit Agreement, and without demand, notice or legal
process of any kind, be declared, and immediately shall become, due and payable.
Time is of the essence of this Term Note. Demand, presentment, protest
and notice of nonpayment and protest are hereby waived by Borrower.
Except as provided in the Credit Agreement, this Term Note may not be
assigned by Lender to any Person.
THIS TERM NOTE A SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN
THAT STATE.
AMERICAN COIN MERCHANDISING, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
I-7
94
EXHIBIT 1.5(e)
TO
CREDIT AGREEMENT
FORM OF NOTICE OF CONVERSION/CONTINUATION
Reference is made to that certain Credit Agreement dated as of December 29,
2000, by and among the undersigned ("Borrower"), General Electric Capital
Corporation ("Agent"), Comerica Bank, ("Revolving Credit Agent") and the Lenders
from time to time signatory thereto (including all annexes, exhibits or
schedules thereto, and as from time to time amended, restated, supplemented or
otherwise modified, the "Credit Agreement"). Capitalized terms used herein and
not otherwise defined are so used as defined in the Credit Agreement.
Borrower hereby gives irrevocable notice, pursuant to Section 1.5(e) of the
Credit Agreement, of its request to:
(a) on [ date ] convert $[________]of the aggregate outstanding principal amount
of the [_______] Loan, bearing interest at the [________] Rate, into a(n)
[________] Loan [and, in the case of a LIBOR Loan, having a LIBOR Period of
[_____] month(s)];
[(b) on [ date ] continue $[________]of the aggregate outstanding principal
amount of the [_______] Loan, bearing interest at the LIBOR Rate, as a LIBOR
Loan having a LIBOR Period of [_____] month(s)].
Borrower hereby represents and warrants that all of the conditions contained in
Section 2.2 of the Credit Agreement have been satisfied on and as of the date
hereof, and will continue to be satisfied on and as of the date of the
conversion/continuation requested hereby, before and after giving effect
thereto;
IN WITNESS WHEREOF, the undersigned has caused this Notice of
Conversion/Continuation be executed and delivered on behalf of the Borrower
specified above by its duly authorized officer as of the date first set forth
above.
AMERICAN COIN MERCHANDISING, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
I-8
95
EXHIBIT 9.1(a)
TO
CREDIT AGREEMENT
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Agreement") is made as of ________,
____ by and between __________________________________ ("Assignor Lender") and
________________________ ("Assignee Lender") and acknowledged and consented to
by GENERAL ELECTRIC CAPITAL CORPORATION, as Agent ("Agent"). All capitalized
terms used in this Agreement and not otherwise defined herein will have the
respective meanings set forth in the Credit Agreement as hereinafter defined.
RECITALS:
WHEREAS, AMERICAN COIN MERCHANDISING, INC. a Delaware corporation
("Borrower"), Agent, COMERICA BANK, a Michigan banking corporation, as Revolving
Credit Agent, Lender, Assignor Lender and other Persons signatory thereto as
Lenders have entered into that certain Credit Agreement dated as of December 29,
2000, (as amended, restated, supplemented or otherwise modified from time to
time, the "Credit Agreement") pursuant to which Assignor Lender has agreed to
make certain Loans to Borrowers;
WHEREAS, Assignor Lender desires to assign to Assignee Lender [all/a portion] of
its interest in the Loans (as described below), and the Collateral and to
delegate to Assignee Lender [all/a portion] of its Commitments and other duties
with respect to such Loans [its position as (Agent) (Revolving Credit Agent)],
and Collateral; [and]
[WHEREAS, Assignee Lender desires to become a Lender under the Credit Agreement
and to accept such assignment and delegation from Assignor Lender; and]
WHEREAS, Assignee Lender desires to appoint Agents to serve as agents for
Assignee Lender under the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements, provisions,
and covenants herein contained, Assignor Lender and Assignee Lender agree as
follows:
1. ASSIGNMENT, DELEGATION, AND ACCEPTANCE
1.1 Assignment. Assignor Lender hereby transfers and assigns to
Assignee Lender, without recourse and without representations or warranties of
any kind (except as set forth in Section 3.2 below), [all/such percentage] of
Assignor Lender's right, title, and interest in [the Revolving Loan ], [and the
Term Loan], Loan Documents and Collateral as will result in Assignee Lender
having as of the Effective Date (as hereinafter defined) a Pro Rata Share
thereof, as follows:
Assignee Lender's Loans Principal Amount Pro Rata Share
----------------------- ---------------- --------------
Revolving Loan $____________ ____%
Term Loan $____________ ____%
1.2 Delegation. Assignor Lender hereby irrevocably assigns and
delegates to Assignee Lender [all/a portion] of its Commitments and its other
duties and obligations as a Lender under the Loan Documents equivalent to
[100%/___%] of Assignor Lender's Revolving Loan Commitment (such percentage
representing a commitment of $ ___________), and [100%/___%] of Assignor
Lender's Term Loan Commitment (such percentage representing a commitment of $
______), and [100%/____%].
1.3 Assignment of Agency. [Insert Agency Assignment]
1.4 Acceptance by Assignee Lender. By its execution of this Agreement,
Assignee Lender irrevocably purchases, assumes and accepts such assignment and
delegation and agrees to be a Lender with respect to the delegated interest
under the Loan Documents [and to become ____ Agent under the Loan Documents] and
to be bound by the terms and conditions thereof. By its execution of this
Agreement, Assignor Lender agrees, to the
I-9
96
extent provided herein, to relinquish its rights and be released from its
obligations and duties under the Credit Agreement.
1.5 Effective Date. Such assignment and delegation by Assignor Lender
and acceptance by Assignee Lender will be effective and Assignee Lender will
become a Lender [and _____ Agent] under the Loan Documents as of [the date of
this Agreement] ("Effective Date") and upon payment of the Assigned Amount and
the Assignment Fee (as each term is defined below). [Interest and Fees accrued
prior to the Effective Date are for the account of Assignor Lender, and Interest
and Fees accrued from and after the Effective Date are for the account of
Assignee Lender.]
2. INITIAL PAYMENT AND DELIVERY OF NOTES
2.1 Payment of the Assigned Amount. Assignee Lender will pay to
Assignor Lender, in immediately available funds, not later than 12:00 noon (New
York time) on the Effective Date, an amount equal to its Pro Rata Share of the
then outstanding principal amount of the Loans as set forth above in Section 1.1
[together with accrued interest, fees and other amounts as set forth on Schedule
2.1] (the "Assigned Amount").
2.2 Payment of Assignment Fee. [Assignor Lender and/or Assignee Lender]
will pay to Agent, for its own account in immediately available funds, not later
than 12:00 noon (New York time) on the Effective Date, the assignment fee in the
amount of $3,500 (the "Assignment Fee") as required pursuant to Section 9.1(a)
of the Credit Agreement.
2.3 Execution and Delivery of Notes. Following payment of the Assigned
Amount and the Assignment Fee, Assignor Lender will deliver to Agent the Notes
previously delivered to Assignor Lender for redelivery to Borrowers and Agent
will obtain from Borrowers for delivery to [Assignor Lender and] Assignee
Lender, new executed Notes evidencing Assignee Lender's [and Assignor Lender's
respective] Pro Rata Share[s] in the Loans after giving effect to the assignment
described in Section 1. Each new Note will be issued in the aggregate maximum
principal amount of the [applicable] Commitment [of the Lender to whom such Note
is issued] OR [the Assignee Lender].
3. REPRESENTATIONS, WARRANTIES AND COVENANTS
3.1 Assignee Lender's Representations, Warranties and Covenants.
Assignee Lender hereby represents, warrants, and covenants the following to and
for the benefit of Assignor Lender, Agent and Revolving Credit Agent:
(a) This Agreement is a legal, valid, and binding agreement of
Assignee Lender, enforceable according to its terms;
(b) The execution and performance by Assignee Lender of its
duties and obligations under this Agreement and the Loan Documents will not
require any registration with, notice to, or consent or approval by any
Governmental Authority;
(c) Assignee Lender is familiar with transactions of the kind
and scope reflected in the Loan Documents and in this Agreement;
(d) Assignee Lender has made its own independent investigation
and appraisal of the financial condition and affairs of Borrower, has conducted
its own evaluation of the Loans, the Loan Documents and Borrower's
creditworthiness, has made its decision to become a Lender to Borrower under the
Credit Agreement independently and without reliance upon Assignor Lender or
Agent, and will continue to do so;
(e) Assignee Lender is entering into this Agreement in the
ordinary course of its business, and is acquiring its interest in the Loans for
its own account and not with a view to or for sale in connection with any
subsequent distribution; provided, however, that at all times the distribution
of Assignee Lender's property shall, subject to the terms of the Credit
Agreement, be and remain within its control;
(f) No future assignment or participation granted by Assignee
Lender pursuant to Section 9.1 of the Credit Agreement will require Assignor
Lender, Agent, Revolving Credit Agent or Borrower to file any
I-10
97
registration statement with the Securities and Exchange Commission or to apply
to qualify under the blue sky laws of any state;
(g) As of the Effective Date, Assignee Lender is entitled to
receive payments of principal and interest in respect of the Obligations without
deduction for or on account of any taxes imposed by the United States of America
or any political subdivision thereof and Assignee Lender will indemnify Agent
from and against all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, or expenses that result from Assignee Lender's
failure to fulfill its obligations under the terms of the Credit Agreement.
3.2 Assignor Lender's Representations, Warranties and Covenants.
Assignor Lender hereby represents, warrants and covenants the following to
Assignee Lender:
(a) Assignor Lender is the legal and beneficial owner of the
Assigned Amount;
(b) This Agreement is a legal, valid and binding agreement of
Assignor Lender, enforceable according to its terms;
(c) The execution and performance by Assignor Lender of its
duties and obligations under this Agreement and the Loan Documents will not
require any registration with, notice to or consent or approval by any
Governmental Authority;
(d) Assignor Lender has full power and authority, and has
taken all action necessary to execute and deliver this Agreement and to fulfill
the obligations hereunder and to consummate the transactions contemplated
hereby;
(e) Assignor Lender is the legal and beneficial owner of the
interests being assigned hereby, free and clear of any adverse claim, lien,
encumbrance, security interest, restriction on transfer, purchase option, call
or similar right of a third party; and
(f) This Assignment by Assignor Lender to Assignee Lender
complies, in all material respects, with the terms of the Loan Documents.
4. LIMITATIONS OF LIABILITY
Neither Assignor Lender (except as provided in Section 3.2 above) nor
Agent makes any representations or warranties of any kind, nor assumes any
responsibility or liability whatsoever, with regard to (a) the Loan Documents or
any other document or instrument furnished pursuant thereto or the Loans or
other Obligations, (b) the creation, validity, genuineness, enforceability,
sufficiency, value or collectibility of any of them, (c) the amount, value or
existence of the Collateral, (d) the perfection or priority of any Lien upon the
Collateral, or (e) the financial condition of Borrower or other obligor or the
performance or observance by Borrower of its obligations under any of the Loan
Documents. Neither Assignor Lender nor Agent has or will have any duty, either
initially or on a continuing basis, to make any investigation, evaluation,
appraisal of, or any responsibility or liability with respect to the accuracy or
completeness of, any information provided to Assignee Lender which has been
provided to Assignor Lender or Agent by Borrower. Nothing in this Agreement or
in the Loan Documents shall impose upon the Assignor Lender or Agent any
fiduciary relationship in respect of the Assignee Lender.
5. FAILURE TO ENFORCE
No failure or delay on the part of Agent or Assignor Lender in the exercise of
any power, right, or privilege hereunder or under any Loan Document will impair
such power, right, or privilege or be construed to be a waiver of any default or
acquiescence therein. No single or partial exercise of any such power, right, or
privilege will preclude further exercise thereof or of any other right, power,
or privilege. All rights and remedies existing under this Agreement are
cumulative with, and not exclusive of, any rights or remedies otherwise
available.
6. NOTICES
Unless otherwise specifically provided herein, any notice or other communication
required or permitted to be given will be in writing and addressed to the
respective party as set forth below its signature hereunder, or to such other
address as the party may designate in writing to the other.
I-11
98
7. AMENDMENTS AND WAIVERS
No amendment, modification, termination, or waiver of any provision of this
Agreement will be effective without the written concurrence of Assignor Lender,
Agent and Assignee Lender.
8. SEVERABILITY
Whenever possible, each provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law. In the event any
provision of this Agreement is or is held to be invalid, illegal, or
unenforceable under applicable law, such provision will be ineffective only to
the extent of such invalidity, illegality, or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of the
Agreement. In addition, in the event any provision of or obligation under this
Agreement is or is held to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality, and enforceability of the remaining
provisions or obligations in any other jurisdictions will not in any way be
affected or impaired thereby.
9. SECTION TITLES
Section and Subsection titles in this Agreement are included for convenience of
reference only, do not constitute a part of this Agreement for any other
purpose, and have no substantive effect.
10. SUCCESSORS AND ASSIGNS
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns.
11. APPLICABLE LAW
THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE.
12. COUNTERPARTS
This Agreement and any amendments, waivers, consents, or supplements may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which, when so executed and delivered, will be
deemed an original and all of which shall together constitute one and the same
instrument.
[signature page follows]
I-12
99
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
written above.
ASSIGNEE LENDER: ASSIGNOR LENDER:
----------------------------- -----------------------------
By: By:
-------------------------- --------------------------
Name: Name:
------------------------ ------------------------
Title: Title:
----------------------- -----------------------
Notice Address: Notice Address:
----------------------------- -----------------------------
----------------------------- -----------------------------
----------------------------- -----------------------------
ACKNOWLEDGED AND CONSENTED TO:
GENERAL ELECTRIC CAPITAL CORPORATION
By:
--------------------------
Name:
------------------------
Title:
-----------------------
100
SCHEDULE 2.1
Assignor Lender's Loans
Principal Amount
-----------------------
Revolving Loan $
----------
Term Loan $
----------
Subtotal $
----------
Accrued Interest $
----------
Unused Line Fee $
----------
Other + or - $
----------
Total $
All determined as of the Effective Date.
