EXHIBIT 10.3
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CREDIT AGREEMENT
Dated as of October 15, 2003
among
PRESSTEK, INC.,
as Borrower,
LASERTEL INC.,
as Guarantor,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
CITIZENS BANK NEW HAMPSHIRE
as Administrative Agent and Lender,
and
KEYBANK NATIONAL ASSOCIATION
as Documentation Agent and Lender
TABLE OF CONTENTS
RECITALS.......................................................................1
1. DEFINITIONS................................................................2
2. AMOUNT AND TERMS OF CREDIT................................................23
2.1 CREDIT FACILITIES.....................................................23
2.2 PREPAYMENTS...........................................................27
2.3 USE OF PROCEEDS.......................................................28
2.4 INTEREST AND APPLICABLE MARGINS.......................................28
2.5 CASH MANAGEMENT SYSTEMS...............................................31
2.6 FEES..................................................................31
2.7 RECEIPT OF PAYMENTS...................................................32
2.8 APPLICATION AND ALLOCATION OF PAYMENTS................................32
2.9 LOAN ACCOUNT AND ACCOUNTING...........................................33
2.10 INDEMNITY............................................................33
2.11 ACCESS...............................................................35
2.12 TAXES................................................................35
2.13 CAPITAL ADEQUACY; INCREASED COSTS: ILLEGALLY.........................36
2.14 SINGLE LOAN..........................................................37
2.15 LETTERS OF CREDIT....................................................37
2.15.1 LETTERS OF CREDIT...............................................37
2.15.2 ISSUING A LETTER OF CREDIT......................................38
2.15.3 LETTER OF CREDIT PARTICIPATIONS.................................38
2.15.4 REIMBURSEMENT AND OTHER PAYMENTS................................38
2.15.5 OBLIGATIONS ABSOLUTE............................................40
2.15.6 THE UNIFORM CUSTOMS AND PRACTICE................................40
2.15.7 MODIFICATION, CONSENT, ETC......................................41
2.15.8 LIABILITY OF THE AGENT AND THE LENDERS..........................41
2.16 GUARANTY.............................................................41
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3. CONDITIONS PRECEDENT; CONDITIONS SUBSEQUENT...............................43
3.1 CONDITIONS TO THE INITIAL LOANS.......................................43
3.2 FURTHER CONDITIONS TO EACH LOAN.......................................43
4. REPRESENTATIONS AND WARRANTIES............................................44
4.1 CORPORATE EXISTENCE; COMPLIANCE WITH LAW..............................45
4.2 EXECUTIVE OFFICES; FEIN...............................................45
4.3 CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS...............45
4.4 FINANCIAL STATEMENTS AND PROJECTIONS..................................46
4.5 MATERIAL ADVERSE EFFECT...............................................46
4.6 OWNERSHIP OF PROPERTY: LIENS..........................................46
4.7 LABOR MATTERS.........................................................47
4.8 VENTURES, SUBSIDIARIES AND AFFILIATES: OUTSTANDING STOCK AND
INDEBTEDNESS..........................................................48
4.9 GOVERNMENTAL REGULATION...............................................48
4.10 MARGIN REGULATIONS...................................................48
4.11 TAXES................................................................48
4.12 ERISA................................................................49
4.13 NO LITIGATION........................................................50
4.14 BROKERS..............................................................50
4.15 INTELLECTUAL PROPERTY................................................50
4.16 FIRST PRIORITY.......................................................50
4.17 ENVIRONMENTAL MATTERS................................................50
4.18 INSURANCE............................................................51
4.19 DEPOSIT AND DISBURSEMENT ACCOUNTS....................................52
4.20 GOVERNMENT CONTRACTS.................................................52
4.21 CUSTOMER AND TRADE RELATIONS.........................................52
4.22 AGREEMENTS AND OTHER DOCUMENTS.......................................52
4.23 SOLVENCY.............................................................53
5. FINANCIAL SATEMENTS AND INFORMATION.......................................53
5.1 REPORTS AND NOTICES...................................................53
5.2 COMMUNICATION WITH ACCOUNTANTS........................................53
6. AFFIRMATIVE COVENANTS.....................................................53
6.1 MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS......................53
6.2 PAYMENT OF OBLIGATIONS................................................54
6.3 BOOKS AND RECORDS.....................................................54
6.4 INSURANCE: DAMAGE TO OR DESTRUCTION OF COLLATERAL.....................54
6.5 COMPLIANCE WITH LAWS..................................................56
6.6 SUPPLEMENTAL DISCLOSURE...............................................56
6.7 INTELLECTUAL PROPERTY..................................................57
6.8 ENVIRONMENTAL MATTERS.................................................57
6.9 LANDLORDS' AGREEMENTS, MORTGAGEE AGREEMENTS AND BAILEE LETTERS........58
6.10 OPERATING ACCOUNTS...................................................58
6.11 FURTHER ASSURANCES...................................................58
7. NEGATIVE COVENANTS........................................................58
7.1 MERGERS, SUBSIDIARIES, ETC............................................58
7.2 INVESTMENTS: LOANS AND ADVANCES.......................................60
7.3 INDEBTEDNESS..........................................................60
7.4 EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS.............................61
7.5 CAPITAL STRUCTURE AND BUSINESS........................................62
7.6 GUARANTEED INDEBTEDNESS...............................................62
7.7 LIENS.................................................................62
7.8 SALE OF STOCK AND ASSETS..............................................63
7.9 ERISA.................................................................63
7.10 FINANCIAL COVENANTS..................................................63
7.11 HAZARDOUS MATERIALS...................................................63
7.12 SALE-LEASEBACKS......................................................63
7.13 CANCELLATION OF INDEBTEDNESS..........................................64
7.14 RESTRICTED PAYMENTS..................................................64
7.15 CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL YEAR..........64
7.16 NO IMPAIRMENT OF INTERCOMPANY TRANSFERS..............................64
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7.17 NO SPECULATIVE TRANSACTIONS..........................................65
7.18 LEASES...............................................................65
8 TERM.......................................................................65
8.1 TERMINATION...........................................................65
8.2 SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING
ARRANGEMENTS..........................................................65
9. EVENTS OF DEFAULT: RIGHTS AND REMEDIES....................................66
9.1 EVENTS OF DEFAULT.....................................................66
9.2 REMEDIES..............................................................68
9.3 WAIVERS BY BORROWER AND GUARANTOR.....................................68
10 ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT.......................69
10.1 ASSIGNMENT AND PARTICIPATIONS........................................69
10.2 APPOINTMENT OF AGENT.................................................70
10.3 AGENT'S RELANCE, ETC.................................................71
10.4 CITIZENS BANK NEW HAMPSHIRE AND AFFILIATES...........................72
10.5 LENDER CREDIT DECISION...............................................72
10.6 INDEMNIFICATION......................................................72
10.7 SUCCESSOR AGENT......................................................73
10.8 SETOFF AND SHARING OF PAYMENTS.......................................74
10.9 ADVANCES; PAYMENTS; NON-FUNDING LENDERS; INFORMATION;
ACTIONS IN CONCERT...................................................74
11 SUCCESSORS AND ASSIGNS....................................................76
11.1 SUCCESSORS AND ASSIGNS...............................................76
12 MISCELLANEOUS.............................................................77
12.1 COMPLETE AGREEMENT: MODIFICATION OF AGREEMENT........................77
12.2 AMENDMENTS AND WAIVERS...............................................77
12.4 FEES AND EXPENSES....................................................79
12.4 NO WAIVER............................................................80
12.5 REMEDIES.............................................................81
12.6 SEVERABILITY.........................................................81
12.7 CONFLICT OF TERMS....................................................81
12.8 CONFIDENTIALITY......................................................81
12.9 GOVERNING LAW........................................................82
12.10 NOTICES.............................................................82
12.11 SECTION TITLES......................................................83
12.12 COUNTERPARTS........................................................83
12.13 WAIVER OF JURY TRIAL................................................83
12.14 REINSTATEMENT.......................................................84
12.15 ADVICE OF COUNSEL....................................................84
12.16 NO STRICT CONSTRUCTION..............................................84
12.17. JOINT AND SEVERAL OBLIGATIONS.......................................84
13. INTEREST RATE PROTECTION AGREEMENTS......................................84
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Schedules
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Disclosure Schedule (4.2) Federal Employer Identification
Disclosure Schedule (4.4) Financial Statements
Disclosure Schedule (4.6) Real Property owned, Leased, Subleased or used
by Borrower & Guarantor
Disclosure Schedule (4.7) Collective Bargaining Agreement
Disclosure Schedule (4.8) Ventures, Indebtedness
Disclosure Schedule (4.11) Taxes - None
Disclosure Schedule (4.12) ERISA - None
Disclosure Schedule (4.13) No Litigation
Disclosure Schedule (4.14) No Finder's or Brokerage Fees - None
Disclosure Schedule (4.15) Patent, Trademark, Copyright and Material License
Disclosure Schedule (4.17) Environmental Issues - None
Disclosure Schedule (4.18) Insurance Policies
Disclosure Schedule (4.19) Banks and Financial Institutions for
maintaining deposits and/or other accounts
Disclosure Schedule (4.22) Supply Agreements and Purchase Agreements Not
Terminable
Disclosure Schedule (6.1) Conduct of Business
Disclosure Schedule (7.3) Indebtedness
Disclosure Schedule (7.4(a)) Employee Loans and Affiliated Transactions - None
Disclosure Schedule (7.7) Liens
Annexes
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Annex A Closing Agenda
Annex B Financial Statements and Projections - Reporting
Annex C Financial Covenants
Annex D Wire Transfer Information
Annex E Notice Addresses
Annex F Lenders Commitment Amounts
Exhibits
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Exhibit 2.1(a)(i) Notice of Revolving Credit Advance
Exhibit 2.1(a)(ii) Form of Revolving Note
Exhibit 2.1(b)(ii) Form of Term Note
Exhibit 2.1(c)(ii) Form of Swing Line Note
Exhibit 2.4(e) Form of Notice of Conversion/Continuation
Exhibit 10.1(a) Assignment Agreement
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THIS CREDIT AGREEMENT (the "Agreement") made as of the 15th day of
October, 2003, is by and among PRESSTEK, INC, a Delaware corporation having its
chief executive offices at 00 Xxxxxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxxxxx 00000
(hereinafter referred to as "Borrower"); its wholly-owned subsidiary, LASERTEL
INC., an Arizona corporation with a principal place of business at 0000 Xxxxx
Xxxx Xxxxxx Xxxxxxx, Xxxxxx, Xxxx Xxxxxx, Xxxxxxx 00000 (hereinafter referred to
as "Guarantor"); CITIZENS BANK NEW HAMPSHIRE, a guaranty savings bank chartered
under the laws of the State of New Hampshire, with a place of business at 000
Xxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxxxxx 00000, for itself, as Lender, and as
Administrative Agent for Lenders; KEYBANK NATIONAL ASSOCIATION, a national
banking association organized under the laws of the United States of America
with a place of business Xxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxx 00000, for itself, as
Lender and as Documentation Agent for Lenders; and the other Lenders signatory
hereto from time to time.
RECITALS
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WHEREAS, the Borrower, Guarantor, and Administrative Agent are parties
to a certain Loan Agreement dated December 18, 1996, as amended to date
(collectively, as amended, the "Existing Credit Agreement") pursuant to which
the Administrative Agent provided to the Borrower a revolving loan commitment of
$16,000,000, a mortgage term loan in the original principal amount of
$6,900,000, and a second mortgage term loan in the original principal amount of
$4,000,000 (the "Existing Credit Facilities");
WHEREAS, the Borrower has requested, and the Lenders have agreed to
extend to the Borrower, (i) a revolving credit facility of up to $35,000,000 to
refinance borrowings under the revolving line of credit included in the Existing
Credit Facilities and to continue to provide working capital and capital
expenditure financing to the Borrower, and (ii) a term loan in the amount of
$15,000,000 to refinance the existing mortgage term loans and a portion of
borrowings under the revolving credit facility included in the Existing Credit
Facilities and to payoff certain lease line financing provided by the
Documentation Agent, all under the terms and conditions of this Agreement and
the other Loan Documents;
WHEREAS, the Borrower shall secure all of its obligations under the
Loan Documents by granting to Administrative Agent, for the benefit of
Administrative Agent and Lenders, a security interest in and mortgage or other
lien upon all of its existing and after-acquired assets (including real estate);
WHEREAS, a condition to the obligations of the Lenders under this
Agreement is for the Guarantor to provide an unconditional guaranty of all of
the obligations of the Borrower under the Loan Documents in favor of the
Administrative Agent and the Lenders and for the Guarantor to secure all of its
obligations under the Loan Documents by granting to Administrative Agent, for
the benefit of Administrative Agent and Lenders, a security interest in and
mortgage or other lien upon all of its existing and after-acquired assets
(including real estate); and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them herein below. 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 contained herein, and for other good and valuable consideration, the
parties hereto agree as follows:
1. DEFINITIONS
Capitalized terms used in this Agreement and the other 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 this Agreement:
"Account Debtor" shall mean any Person who may become obligated to the
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 the 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 the 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 the 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
the 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 the Borrower, under all purchase orders and
contracts for the sale of goods or the performance of services or both by the
Borrower or in connection with any other transaction (whether or not yet earned
by performance on the part of the 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 or Swing Line
Advance, as the context may require.
"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, five percent (5%) 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, (c) each of such Person's officers, directors, joint venturers and
partners and (d) in
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the case of the Borrower, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of the Borrower. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Administrative Agent and each Lender.
"Administrative Agent" shall mean Citizens Bank New Hampshire or its
successor appointed pursuant to Section 10.7.
"Agreement" shall mean the Credit Agreement dated as of the Closing
Date by and among Borrower, the Guarantor, Citizens Bank New Hampshire, as
Administrative Agent and Lender, and the other Lenders signatory from time to
time thereto.
"Appendices" shall have the meaning assigned to it in the recitals to
the Agreement.
"Applicable Margins" means collectively the Applicable LIBOR Margin and
the Applicable Prime Margin.
"Applicable LIBOR Margin" shall mean the per annum interest rate from
time to time in effect and payable in addition to the LIBOR Rate as determined
by reference to Section 2.4(a) of the Agreement.
"Applicable Prime Rate Margin" shall mean the per annum interest rate
from time to time in effect and payable in addition to the Prime Rate, as
determined by reference to Section 2.4(a) of the Agreement.
"Applicable Unused Line Fee Margin" shall mean the per annum percentage
used to determine the fee payable under Section 2.6(c), which percentage shall
be determined in accordance with the follow:
IF REVOLVER UTILIZATION AS A THEN APPLICABLE UNUSED
PERCENTAGE OF THE MAXIMUM AMOUNT IS: LINE FEE MARGIN IS:
------------------------------------ ----------------------
> 66% 0.25%
-
> 33% BUT < 66% 0.375%
<33% 0.5%
"Assignment Agreement" shall have the meaning assigned to it in Section
10.1 (a).
"Borrower" shall mean Presstek, Inc., a Delaware corporation.
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"Borrowing Availability" shall have the meaning assigned to it in
Section 2.1 (a)(i).
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"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
Hampshire 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) 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 Management System" shall have the meaning assigned to it in
Section 2.5.
"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 the Borrower, (d) the
Borrower's ownership or use of any properties or other assets, or (e) any other
aspect of the Borrower's business.
"Chattel Paper" shall mean any "chattel paper," as such term is defined
in the Code, now owned or hereafter acquired by the Borrower, wherever located.
"Closing Date" shall mean the date first set forth in this Agreement.
"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 A.
"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 Hampshire; provided,
however, in the event that, by reason of mandatory provisions of law, any or all
of the attachment, perfection or priority of Administrative 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 Hampshire, the term "Code" shall mean the Uniform Commercial Code as
enacted and in effect
4
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
Agreements, the Mortgages and the other Collateral Documents and any other
property, real or personal, tangible or intangible, now existing or hereafter
acquired, that may at any time be or become subject to a security interest or
Lien in favor of Administrative Agent, on behalf of itself and Lenders, to
secure the Obligations. Collateral shall also mean and include any and all
"Collateral" under the Existing Credit Agreement.
"Collateral Documents" shall mean the Security Agreements, the
Mortgages, and all similar agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.
"Commitment Termination Date" shall mean the earliest of (a) September
30, 2008, (b) the date of termination of Lenders' obligations to make Advances
or permit existing Loans to remain outstanding pursuant to Section 9.2(b), and
(c) the date of indefeasible prepayment in full by Borrower of the Loans and the
permanent reduction of the Revolving Loan Commitment and the Swing Line
Commitment to zero dollars ($0), in accordance with the provisions of Section
2.2(a).
"Commitments" shall mean (a) as to any Lender, the aggregate of such
Lender's Revolving Loan Commitment (including without duplication the Swing Line
Lender's Swing Line Commitment) and Term Loan Commitment as set forth on Annex F
of the Agreement, as such Annex F may be amended from time to time, 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 (including
without duplication the Swing Line Lender's Swing Line Commitment) and Term
Loan, which aggregate commitment shall be Fifty Million Dollars ($50,000,000) on
the Closing Date, as such amount may be adjusted or amortized from time to time
in accordance with the Agreement.
"Compliance Certificate" shall have the meaning assigned to it in Annex
B.
"Contracts" shall mean all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by the Borrower, in any event, including
all contracts, undertakings, or agreements (other than rights evidenced by
Chattel Paper, Documents or Instruments) in or under which the 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 Administrative Agent
and (i) the issuer of uncertificated securities with respect to uncertificated
securities in the name of the Borrower, (ii) a securities intermediary with
respect to securities, whether certificated or uncertificated, securities
entitlements and other financial assets held in a securities account in the name
of the Borrower, (iii) a futures commission merchant or clearing house with
respect to commodity accounts and commodity contracts held by the Borrower,
whereby, among other
5
things, the issuer, securities intermediary or futures commission merchant
disclaims any security interest in the applicable financial assets, acknowledges
the Lien of Administrative Agent, on behalf of itself and Lenders, on such
financial assets, and agrees to follow the instructions or entitlement orders of
Administrative Agent without further consent by the Borrower.
"Copyright License" shall mean any and all rights now owned or
hereafter acquired by the Borrower under any written agreement granting any
right to use any Copyright or Copyright registration.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by the 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.
"Current Assets" shall mean, with respect to Borrower and its
Subsidiaries, an amount to current assets as at the date of determination, all
as determined in accordance with GAAP from Borrower's balance sheet included in
the Financial Statements.
"Current Liabilities" shall mean, with respect to Borrower and its
Subsidiaries, an amount equal to all current liabilities as at the date of
determination, all as determined in accordance with GAAP from Borrower's balance
sheet included in the Financial Statements.
"Current Ratio" shall mean, with respect to the Borrower and its
Subsidiaries on a consolidated basis the ratio of Current Assets to Current
Liabilities, determined as of the last day of each Fiscal Quarter and each
Fiscal Year.
"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 2.4(d).
"Disclosure Schedules" shall mean the Schedules prepared by the
Borrower and denominated as Disclosure Schedules 4.2 through 7.7in the Index to
the Agreement.
"Documentation Agent" shall mean KeyBank National Assocation.
"Documents" shall mean any "documents," as such term is defined in the
Code, now owned or hereafter acquired by the Borrower, wherever located.
"Dollars" or "$" shall mean lawful currency of the United States of
America.
6
"EBITDA" shall mean, with respect to the Borrower for any fiscal
period, an amount equal to (a) consolidated Net Income of the Borrower and it
Subsidiaries for such period, , plus (b) the sum of (i) accrued income taxes,
(ii) Interest Expense, and (iii) the amount of non-cash charges (including
depreciation and amortization) for such period, in each case to the extent
included in the calculation of consolidated Net Income of Borrower and its
Subsidiaries for such period in accordance with GAAP, but without duplication.
For purposes of the calculation of consolidated Net Income of Borrower and its
Subsidiaries for such period, income, gain, or loss from extraordinary items for
such period shall be excluded from the calculation.
"Environmental Laws" shall mean 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.
xx.xx. 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. xx.xx. 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. xx.xx. 136 et seq ); the
Solid Waste Disposal Act (42 U.S.C. xx.xx. 6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. xx.xx. 2601 et seq.); the Clean Air Act (42 U.S.C. xx.xx.
7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C. xx.xx. 1251 et
seq.); the Occupational Safety and Health Act (29 U.S.C. xx.xx. 651 et seq.);
and the Safe Drinking Water Act (42 U.S.C. xx.xx. 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 Laws, Environmental Permits, 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 all permits, licenses,
authorizations, certificates, approvals, registrations required by any
Governmental Authority under any Environmental Laws.
"Equipment" shall mean all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by the Borrower, wherever located and, in
any event, including all
7
such 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 the Borrower, any trade
or business (whether or not incorporated) which, together with the Borrower, are
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 the 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 the 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 the 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 the 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; or (i) the loss
of a Qualified Plan's qualification or tax exempt status.
"ESOP" shall mean a Plan which is intended to satisfy the requirements
of Section 4975(e)(7) of the IRC.
"Event of Default" shall have the meaning assigned to it in Section
9.1.
"Existing Credit Agreement" shall have the meaning assigned thereto in
the recitals to the Agreement.
8
"Existing Credit Facilities" shall have the meaning assigned thereto in
the recitals to the Agreement.
"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 Administrative 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 Administrative Agent or
any Lender pursuant to the Agreement or any of the other Loan Documents.
"Financial Statement Date" shall have the meaning assigned to it in
Section 4.5.
"Financial Statements" shall mean the consolidated and consolidating
income statements, statements of cash flows and balance sheets of the Borrower
and its Subsidiaries delivered in accordance with Section 4.4 of the Agreement
and Annex B to the Agreement.
"Fiscal Month" shall mean any of the twelve (12) fiscal accounting
periods which comprise the Borrower's Fiscal Year.
"Fiscal Quarter" shall mean any of the four (4) quarterly accounting
periods which comprise the Borrower's Fiscal Year.
"Fiscal Year" shall mean any of the annual fiscal accounting periods of
the Borrower.
"Fixed Charge Coverage Ratio" shall mean, with respect to the Borrower
and its Subsidiaries on a consolidated basis the ratio of (a) EBITDA determined
as of the last day of each Fiscal Quarter and each Fiscal Year for the four
Fiscal Quarters then ending, less income taxes paid in cash, dividends paid, and
Capital Expenditures in such period to (b) the sum of (i) Interest Expense paid
in cash, and (ii) scheduled principal payments on Funded Debt during such
period.
"Fixtures" shall mean any "fixtures" as such term is defined in the
Code, now owned or hereafter acquired by the Borrower.
"Foreign Subsidiary" shall mean a Subsidiary that is not organized
under the laws of one of the states of the United States of America.
"Funded Debt" shall mean, with respect to any Person, all Indebtedness
for borrowed money evidenced by notes, bonds, debentures, or similar evidences
of Indebtedness and which by its terms matures more than one (1) year from, or
is directly or indirectly renewable or extendible at such Person's option under
a revolving credit or similar agreement obligating the lender or lenders to
extend credit over a period of more than one (1) year from the date of creation
thereof,
9
and specifically including Capital Lease Obligations, current maturities of
long-term debt, revolving credit and short-term debt extendible beyond one (1)
year at the option of the debtor, and also including, in the case of the
Borrower, the Obligations. For purposes of the determining consolidated Funded
Debt of Borrower and its Subsidiaries, outstanding standby Letters of Credit
which have not been drawn upon by the beneficiary thereunder and any lease which
does not constitute a Capital Lease shall be excluded.
"Funded Debt to EBITDA Ratio" shall mean, with respect to the Borrower
and its Subsidiaries on a consolidated basis as of any date of determination,
the ratio of (a) the Funded Debt to (b) EBITDA determined as of the last day of
each Fiscal Quarter and each Fiscal Year for the four (4) Fiscal Quarters then
ended.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect on the Closing Date, consistently applied
as such term is further defined in Annex C to the Agreement.
"General Intangibles" shall mean any "general intangibles," as such
term is defined in the Code, now owned or hereafter acquired by the Borrower,
and, in any event, including all right, title and interest which the 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, 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 the
Borrower or any computer bureau or service company from time to time acting for
the 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
10
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.
"Guarantor" shall mean individually and collectively each of Lasertel
Inc., an Arizona corporation, and each future Subsidiary of the Borrower and of
any Subsidiary of the Borrower that becomes a Guarantor pursuant to the
provisions of Section 2.16 of this Agreement.
"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 Laws, 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" under
any Environmental Laws, (b) petroleum or any fraction or by-product thereof,
asbestos, polychlorinated biphenyls (PCB's), 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, (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.
11
"Indemnified Liabilities" shall have the meaning assigned to it in
Section 2.10.
"Indemnified Persons" shall have the meaning assigned to it in Section
2.10.
"Instruments" shall mean any "instrument," as such term is defined in
the Code, now owned or hereafter acquired by the 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 and including
financing commitment fees) 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.
"Interest Payment Date" means (a) as to any Prime Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided, that,
in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid in full, (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, and (z)
interest with respect to any LIBOR Loan shall be paid at least every ninety (90)
days notwithstanding the applicable LIBOR Period.
"Interest Rate Protection Agreement" shall mean any foreign exchange
contracts, interest rate swap, cap, floor or hedging agreements, or similar
agreements between the Borrower and the Administrative Agent or any Lender, or
any Affiliate of the Administrative Agent or any Lender.
"Inventory" shall mean any "inventory," as such term is defined in the
Code, now or hereafter owned or acquired by the Borrower wherever located, and
in any event including inventory, merchandise, goods and other personal property
which are held by or on behalf of the 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 the Borrower's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including other
supplies.
"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 the Borrower, including the rights of the 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 the Borrower; (iv) all commodity contracts held by the
Borrower; and (v) all commodity accounts held by the Borrower.
12
"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.
"L/C Commitment" shall mean with respect to each Lender the amount of a
Letter of Credit equal to the product obtained by multiplying the face amount of
the Letter of Credit by such Lender's Pro Rata Share of the aggregate Revolving
Loan Commitment.
"L/C Notice" shall have the meaning assigned to it in Section 2.15.2.
"L/C Participant" shall have the meaning assigned to it in Section
2.15.3.
"Lenders" shall mean Citizens Bank New Hampshire, 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.
"Letters of Credit" shall mean Letters of Credit of the Administrative
Agent issued for the account of the Borrower in accordance with the provisions
of Section 2.15.
"Letter of Credit Fee" shall have the meaning assigned to it in Section
2.15.4 (b).
"Letter of Credit Commission Fee Rate" shall mean the annual percentage
rate equal to the then Applicable LIBOR Margin.
"Letter of Credit Participation Amount" shall have the meaning assigned
to it in Section 2.15.4 (c).
"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.
"LIBOR Loan" shall mean a Loan or any portion thereof bearing interest
by reference to the LIBOR Rate.
"LIBOR Period" shall mean each period commencing on a LIBOR Business
Day selected by the Borrower pursuant to the Agreement and ending one (1), two
(2), three (3) or six (6) months thereafter, as selected by the Borrower's
irrevocable notice to Administrative Agent as set forth in Section 2.4(e);
provided that the foregoing provision relating to LIBOR Periods is subject to
the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next succeeding
LIBOR Business Day unless the
13
result of such extension would be to carry such LIBOR Period into another
calendar month in which event such LIBOR Period shall end on the immediately
preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Commitment
Termination Date shall end two (2) LIBOR Business Days prior to such date;
(c) any LIBOR Period 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) the 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) the Borrower shall select LIBOR Periods so that there shall be no
more than ten (10) separate LIBOR Loans in existence at any one time.
"LIBOR Rate" shall mean for each LIBOR Period, a rate of interest
determined by Administrative Agent equal to the rate per annum as determined on
the basis of the offered rates for deposits in U.S. Dollars, for a period of
time comparable to such LIBOR Loan, which the British Bankers' Association fixes
as its LIBOR rate and which appears on the Telerate page 3750 as of 11:00 a.m.
London time on the day that is two (2) LIBOR Business Days preceding the first
day of such LIBOR Loan; provided, however, if the rate described above does not
appear on the Telerate System on any applicable interest determination date, the
LIBOR rate shall be the rate (rounded upward, if necessary, to the nearest one
hundred-thousandth of a percentage point), determined on the basis of the
offered rates for deposits in U.S. dollars for a period of time comparable to
such LIBOR Loan which are offered by four major banks in the London interbank
market at approximately 11:00 a.m. London time, on the day that is two (2) LIBOR
Business Days preceding the first day of such LIBOR Loan as selected by
Administrative Agent. The principal London office of each of the four (4) major
London banks will be requested to provide a quotation of its U.S. Dollar deposit
offered rate. If at least two such quotations are provided, the rate for that
date will be the arithmetic mean of the quotations. If fewer than two quotations
are provided as requested, the rate for that date will be determined on the
basis of the rates quoted for loans in U.S. dollars to leading European banks
for a period of time comparable to such LIBOR Loan offered by major banks in New
York City at approximately 11:00 a.m. New York City time, on the day that is two
(2) LIBOR Business Days preceding the first day of such LIBOR Loan. In the event
that Administrative Agent is unable to obtain any such quotation as provided
above, it will be deemed that LIBOR pursuant to a LIBOR Loan cannot be
determined. In the event that the Board of Governors of the Federal Reserve
System shall impose a Reserve Percentage with respect to LIBOR deposits of any
Lender, then for any period during which such Reserve Percentage shall apply,
LIBOR shall be equal to the amount determined above divided by an amount equal
to 1 minus the Reserve Percentage. "Reserve Percentage" shall mean, relative to
any day of any LIBOR Period for the LIBOR Loan, the maximum aggregate (without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements (including all basic, emergency, supplemental, marginal and other
reserves and taking into account any
14
transitional adjustments or other scheduled changes in reserve requirements)
under any regulations of the Board of Governors of the Federal Reserve System
(the "Board") or other governmental authority having jurisdiction with respect
thereto as issued from time to time and then applicable to assets or liabilities
consisting of "Eurocurrency Liabilities", as currently defined in Regulation D
of the Board, having a term approximately equal or comparable to such LIBOR
Period.
"License" shall mean any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by the 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
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Litigation" shall have the meaning assigned to it in Section 4.13.
"Loan Account" shall have the meaning assigned to it in Section 2.9.
"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,
Administrative 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 the
Borrower, or any employee of the Borrower, and delivered to Administrative 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.
"Loan" shall mean individually the Revolving Loan, the Swing Line Loan,
or the Term Loan, as the case may be.
"Loans" shall mean collectively the Revolving Loan, the Swing Line
Loan, and the Term Loan.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets (taken as a whole), operations or financial or other
condition of the Borrower or the Guarantor, (b) the Borrower's or the
Guarantor'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 Administrative
Agent's Liens, on behalf of itself and Lenders, on the Collateral or the
priority of such Liens, or (d) Administrative Agent's or any Lender's rights and
remedies under the Agreement and the other Loan Documents.
15
"Maximum Amount" shall mean, at any particular time, an amount equal to
the Revolving Loan Commitment of all Lenders.
"Mortgage" shall mean each Mortgage and Security Agreement, entered
into between Administrative Agent, on behalf of itself and Lenders, and each of
the Borrower and the Guarantor on the Closing Date.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which the 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 the Borrower for any fiscal
period, an amount equal to consolidated net income of the Borrower and its
Subsidiaries for such period as determined in accordance with GAAP from the
Financial Statements..
"Non-Consenting Lender" shall have the meaning assigned to it in
Section 12.2 (d).
"Non-Funding Lender" shall have the meaning assigned to it in Section
10.9 (d).
"Notes" shall mean the Revolving Notes, the Swing Line Note, and the
Term Notes, collectively.
"Notice of Conversion/Continuation" shall have the meaning assigned to
it in Section 2.4(e).
"Notice of Revolving Credit Advance" shall have the meaning assigned to
it in Section 2.l(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 the
Borrower to Administrative Agent or any Lender, or to an Affiliate of the
Administrative Agent or any Lender, and all covenants and duties regarding such
amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement, any of the
other Loan Documents, or any Interest Rate Protection Agreement. 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 the Borrower, whether or not allowed in such
proceeding), Fees, Charges, expenses, attorneys' fees and any other sum
chargeable to the Borrower under the Agreement or any of the other Loan
Documents.
16
"Patents" shall mean all of the following in which the Borrower or any
of its Subsidiaries 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 of 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 Encumbrances" shall mean the following encumbrances: (a)
Liens for taxes or assessments or other governmental Charges not yet due and
payable or being contested in accordance with Section 6.2(b) of the Agreement;
(b) pledges or deposits of money securing obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation; (c) pledges or deposits of money securing bids, tenders,
contracts (other than contracts for the payment of money) or leases to which the
Borrower is a party as lessee made in the ordinary course of business; (d)
deposits of money securing statutory obligations of the Borrower for workers
compensation and similar charges; (e) 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; (f)
carriers', warehousemen's, suppliers' or other similar possessory liens arising
in the ordinary course of business and securing liabilities in an outstanding
aggregate amount not in excess of $25,000 at any time, so long as such Liens
attach only to Inventory; (g) deposits securing, or in lieu of, surety, appeal
or customs bonds in proceedings to which the Borrower is a party; (h) any
attachment or judgment lien not constituting an Event of Default under Section
9.1(j), so long as such Lien only attaches to Real Estate; (i) 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; (j) presently existing or hereinafter created
Liens in favor of Administrative Agent, on behalf of Lenders; and (k) Liens
expressly permitted under clauses (b) and (c) of Section 7.7 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 the Borrower maintains, contributes to or has an
obligation to contribute to on behalf of participants who are or were employed
by the Borrower.
"Prime Rate" shall mean the variable per annum rate of interest so
designated from time to time by Citizens Bank New Hampshire as its prime rate.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate being charged to any customer. Changes in the rate of interest
resulting from changes in the Prime Rate shall take place immediately without
notice or demand of any kind.
17
"Prime Rate Loan" shall mean a Loan or portion thereof bearing interest
by reference to the Prime Rate.
"Proceeds" shall mean all "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 the 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 the 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
the 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 the 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.
"Proposed Change" shall have the meaning assigned to it in Section 12.2
(d).
"Pro Rata Share" shall mean with respect to all matters relating to any
Lender (a) with respect to the Revolving Loan or the Swing Line Loan, the
percentage obtained by dividing (i) the Revolving Loan Commitment, including the
Swing Line Commitment of that Lender by (ii) the aggregate Revolving Loan
Commitments, including the Swing Line Commitment of all Lenders, and (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 10.1.
"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 4.6.
"Refunded Swing Line Loan" shall have the meaning assigned to it in
Section 2.1(c)(iii).
"Reimbursement Amount" shall have the meaning assigned to it in Section
2.15.4 (a).
"Reimbursement Date" shall have the meaning assigned to it in Section
2.15.4 (c).
"Release" shall mean any 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.
18
"Requisite Lenders" shall mean Lenders with an aggregate of not less
than 100% of the Revolving Loan Commitments.
"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 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; (d) 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; (e) any payment, loan, contribution, or other transfer of
funds or other property to any Stockholder of such Person; and (f) any payment
of management fees (or other fees of a similar nature) by such Person to any
Stockholder of such Person or their Affiliates.
"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.
"Revolver Utilization" shall mean the average for any Fiscal Quarter of
the daily closing balances of the aggregate Revolving Loan, Swing Line Loan, and
Letters of Credit outstanding during such Fiscal Quarter.
"Revolving Credit Advance" shall have the meaning assigned to it in
Section 2.1(a)(i).
"Revolving Lenders" shall mean, as of any date of determination,
Lenders having a Revolving Loan Commitment.
"Revolving Loan" shall mean as the context may require, at any time,
the aggregate amount of outstanding Revolving Credit Advances.
"Revolving Loan Commitment" shall mean (a) as to any Lender, the
aggregate commitment of such Lender to make Revolving Credit Advances (including
without duplication Swing Line Advances) or in the most recent Assignment
Agreement executed by such Lender and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Revolving Credit Advances (including without
duplication Swing Line Advances) which aggregate commitment shall be Thirty-five
Million Dollars ($35,000,000) on the Closing Date, as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement. The
Revolving Loan Commitment of all Lenders may be increased to Forty-five Million
Dollars ($45,000,000) upon the written request of the Borrower, subject to
credit approval by the Lenders and such terms, conditions, limitations, and
restrictions as the Lenders may require.
19
"Revolving Note" and "Revolving Notes" shall have the respective
meanings assigned thereto in Section 2.1(a)(ii).
"Security Agreement" shall mean each Security Agreement, entered into
between Administrative Agent, on behalf of itself and Lenders, and each of the
Borrower and the Guarantor on the Closing Date.
"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 probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(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).
"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 fifty percent (50%) or more of such Stock
whether by proxy, agreement, operation of law or otherwise, and (b) any
partnership or limited liability company in which such Person and/or one or more
Subsidiaries of such Person shall have an interest (whether in the form of
voting or participation in profits or capital contribution) of more than fifty
percent (50%) or of which any such Person is a general partner or may exercise
the powers of a general partner.
"Swing Line Advance" has the meaning assigned to it in Section
2.1(c)(i).
20
"Swing Line Availability" has the meaning assigned to it in Section
2.1(c)(i).
"Swing Line Commitment" shall mean, as to the Swing Line Lender, the
commitment of the Swing Line Lender to make Swing Line Loans as set forth on
Annex F to the Agreement, which commitment constitutes a subfacility of the
Revolving Loan Commitment of the Swing Line Lender and shall equal $1,000,000 as
of the Closing Date.
"Swing Line Lender" shall mean Citizens Bank New Hampshire.
-----------------
"Swing Line Loan" shall mean, as the context may require, at any time,
the aggregate amount of Swing Line Advances outstanding to the Borrower.
"Swing Line Loan Participation Certificate" shall mean a certificate
delivered pursuant to Section 2.1(c)(iv).
"Swing Line Note" has the meaning assigned to it in Section 2.1(c)(ii).
"Tangible Capital Base" shall mean, with respect to the Borrower as of
any date of determination, the sum of (a) total stockholders' equity, minus (b)
all intangible assets (including, without limitation, all goodwill, patent and
patent rights), plus (c) the amount of intangible assets acquired in an
acquisition permitted without the requirement of the consent of the
Administrative Agent and the Requisite Lenders under the provisions of
subsection (b) of Section 7.1 of this Agreement (but only to the extent such
intangible assets would otherwise be excluded under clause (b) above), all as
determined in accordance with GAAP from Borrower's balance sheet included in the
Financial Statements.
"Taxes" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Administrative Agent or a Lender by the
jurisdictions under the laws of which Administrative 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 2.1
(b)(i).
"Term Loan Commitment" shall mean (a) as to any Lender with a Term Loan
Commitment, the commitment of such Lender to make or hold its Pro Rata Share of
Term Loan as set forth on Annex F to the Agreement or in the most recent
Assignment Agreement executed by such Lender, and (b) as to all Lenders with a
Term Loan Commitment, the aggregate commitment of all Lenders to make or hold
Term Loan, which aggregate commitment shall be Fifteen Million Dollars
($15,000,000.00) on the Closing Date.
"Term Note" and "Term Notes" shall have the respective meanings
assigned thereto in Section 2.1 (b)(i).
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"Termination Date" shall mean the date on which the Loans have been
indefeasibly repaid in full and all other Obligations under the Agreement and
the other Loan Documents have been completely discharged and the Borrower shall
have no further right to borrow any monies under the Agreement.
"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 the Borrower or 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.
"Trademark License" shall mean rights under any written agreement now
owned or hereafter acquired by the Borrower granting any right to use any
Trademark.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by the 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 registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar of rice 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 the
Borrower or any ERISA Affiliate as a result of such transaction.
"Yield Maintenance Fee" shall mean an amount computed as follows: The
current rate for United States Treasury securities (bills on a discounted basis
shall be converted to a bond equivalent) with a maturity date closest to the
LIBOR Period chosen for the LIBOR Loan as to which the prepayment is made, shall
be subtracted from the LIBOR Rate plus the Applicable Margin in effect for such
LIBOR Loan at the time of prepayment. If the result is zero or a negative
number, there shall be no yield maintenance fee. If the result is a positive
number, then the resulting percentage shall be multiplied by the amount of the
principal balance being prepaid. The resulting amount shall be divided by 360
and multiplied by the number of days remaining in the LIBOR Period chosen for
the LIBOR Loan as to which the prepayment is made. Said amount shall be reduced
to present value calculated by using the above referenced United States Treasury
securities rate and the number of days remaining in the LIBOR Period chosen for
the LIBOR Loan as to which prepayment is made. The resulting amount shall be the
yield maintenance fee due to Bank upon the prepayment of a LIBOR Loan.
22
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 Hampshire 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 the Borrower, such words are intended to signify that such Borrower
has actual knowledge or awareness of a particular fact or circumstance or that
such Borrower, if it had exercised reasonable diligence, would have known or
been aware of such fact or circumstance.
2. AMOUNT AND TERMS OF CREDIT
2.1. Credit Facilities.
(a) Revolving Credit Facility. (i) Subject to the terms and conditions
hereof, each Revolving Lender agrees to make available from time to time until
the Commitment Termination Date its Pro Rata Share of advances (each, a
"Revolving Credit Advance"). The Pro Rata Share of the Revolving Loan of any
Revolving Lender shall not at any time exceed its separate Revolving Loan
Commitment. The obligations of each Revolving Lender hereunder shall be several
and not joint. The aggregate amount of Revolving Credit Advances outstanding
shall not exceed at any time the Maximum Amount less the amount of the Swing
Line Loan and Letter of Credits outstanding at such time ("Borrowing
Availability"). Borrower shall make payments of principal from time to time
under the Revolving Loan so that the aggregate amount of Revolving Advances does
not at any time exceed the then Borrowing Availability. Until the Commitment
Termination Date, Borrower may from time to time borrow, repay and reborrow
under this Section 2.1 (a). Each Revolving Credit Advance shall be made either
pursuant (a) to the Administrative Agent's Cash Management System (Prime Rate
Loans only) or (b) on notice by
23
the Borrower to the Administrative Agent. Notices by the Borrower must be given
no later than (1) 12:00 p.m. (Manchester, New Hampshire time) on the Business
Day of the proposed Revolving Credit Advance, in the case of a Prime Rate Loan,
or (2) 11:00 a.m. (Manchester, New Hampshire 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
attached hereto as Exhibit 2.1(a)(i) and shall include such information as may
be required by Administrative Agent and Borrower's certification as to
Borrower's and Guarantor's compliance as of the date thereof with all of the
representations, covenants, and conditions of this Agreement. If the Borrower
desires to have the Revolving Credit Advances bear interest by reference to a
LIBOR Rate, the Borrower must comply with Section 2.4(e).
(ii) The 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 2.1(a)(ii) (each a "Revolving Note" and,
collectively, the "Revolving Notes"). Each Revolving Note shall represent the
obligation of the Borrower to pay the amount of each 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
2.4. The entire unpaid balance of the aggregate Revolving Loan and all other
non-contingent Obligations shall be immediately due and payable in full in
immediately available funds on the Commitment Termination Date.
(b) Term Loan. (i) Subject to the terms and conditions hereof, each
Term Lender agrees to make a term loan on the Closing Date to the Borrower in
the original principal amount of its Term Loan Commitment (the "Term Loan"). 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 2.1 (b)(i) (each a "Term Note" and collectively the "Term Notes"), and
the Borrower shall execute and deliver a separate Term Note to each Term Lender
in the original amount of each Lender's Term Loan Commitment. Each Term Note
shall represent the obligation of the Borrower to pay the applicable Term
Lender's Term Loan Commitment, together with interest thereon as prescribed in
Section 2.4. Notwithstanding the foregoing, the Term Loan shall constitute a
re-finance of the existing term loan to the Borrower by the Administrative Agent
under the Existing Credit Facilities, and the Term Lenders shall only be
required to advance additional funds in respect of the Term Loan Commitment in
the aggregate amount of $15,000,000.
(ii) The Borrower shall repay the principal amount of the Term Loan in
nineteen (19) consecutive quarterly installments due on the last business day of
December, March, June, and September of each year, commencing December 31, 2003,
each in the amount of $535,714, with a final installment of all remaining
principal, and accrued and unpaid interest, due on September 30, 2008.
24
(iii) Notwithstanding the foregoing clause (ii), the aggregate
outstanding principal balance of the Term Loan shall be due and payable in full
in immediately available funds on the Commitment Termination Date, if not sooner
paid in full.
(iv) Each payment of principal with respect to the Term Loan shall be
paid to Administrative Agent for the ratable benefit of each Term Lender making
or holding the Term Loan, ratably in proportion to each such Term Lender's
respective Term Loan Commitment.
(c) Swing Line Facility. (i) Administrative Agent shall notify the
Swing Line Lender upon Administrative Agent's receipt of any Notice of Revolving
Credit Advance. Subject to the terms and conditions hereof, the Swing Line
Lender may, in its discretion, make available from time to time until the
Commitment Termination Date advances (each, a "Swing Line Advance") in
accordance with any such notice or pursuant to Administrative Agent's Cash
Management System. The aggregate amount of Swing Line Advances outstanding shall
not exceed the lesser of (A) the Swing Line Commitment and (B) the Maximum
Amount less the outstanding balance of the Revolving Loan at such time ("Swing
Line Availability"). Until the Commitment Termination Date, Borrower may from
time to time borrow, repay and reborrow under this Section 2.1(c). Each Swing
Line Advance shall be made either pursuant (a) to the Administrative Agent's
Cash Management System or (b) to a Notice of Revolving Credit Advance delivered
to Administrative Agent by the Borrower in accordance with Section 1.1 (a). A
Notice of Revolving Credit Advance must be given no later than 12:00 p.m.
(Manchester, New Hampshire time) on the Business Day of the proposed Swing Line
Advance. Notwithstanding any other provision of this Agreement or the other Loan
Documents, the Swing Line Loan shall constitute a Prime Rate Loan. Borrower
shall repay the aggregate outstanding principal amount of the Swing Line Loan
upon demand therefor by Administrative Agent.
(ii) Swing Line Note. The Borrower shall execute and deliver to the
Swing Line Lender a promissory note to evidence the Swing Line Commitment. Such
note shall be in the principal amount of the Swing Line Commitment of the Swing
Line Lender, dated the Closing Date and substantially in the form of Exhibit 2.1
(c)(ii) (the "Swing Line Note"). The Swing Line Note shall represent the joint
and several obligation of the Borrower to pay the amount of the Swing Line
Commitment or, if less, the aggregate unpaid principal amount of all Swing Line
Advances together with interest thereon as prescribed in Section 2.4. The entire
unpaid balance of the Swing Line Loan and all other non-contingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date if not sooner paid in full.
(iii) Refunding of Swing Line Loans. The Swing Line Lender, at any time
and from time to time in its sole and absolute discretion, shall on behalf of
the Borrower (and Borrower hereby irrevocably authorizes the Swing Line Lender
to so act on its behalf) request each Revolving Lender (including the Swing Line
Lender) to make a Revolving Credit Advance to the Borrower (which shall be a
Prime Rate Loan) in an amount equal to such Revolving Lender's Pro Rata Share of
the principal amount of the Swing Line Loan (the "Refunded Swing Line Loan")
outstanding on the date such notice is given. Unless any of the events described
in Sections 9.1 (h) or 9.1 (i) shall have occurred (in which event the
procedures of Section 2.1(c)(iv) shall
25
apply), and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied, each
Revolving Lender shall disburse directly to Administrative Agent, such Revolving
Lender's Pro Rata Share of a Revolving Credit Advance on behalf of the Swing
Line Lender, prior to 4:00 p.m. (Manchester, New Hampshire time), in immediately
available funds on the same Business Day on which such notice is given. The
proceeds of such Revolving Credit Advances shall be immediately paid to the
Swing Line Lender and applied to repay the Refunded Swing Line Loan of the
Borrower.
(iv) Participation in Swing Line Loans. If, prior to refunding a Swing
Line Loan with a Revolving Credit Advance pursuant to Section 2.1(c)(iii), one
of the events described in Sections 9.1(h) or 9.1(i) shall have occurred, then,
subject to the provisions of Section 2.1(c)(v) below, each Revolving Lender
will, on the date such Revolving Credit Advance was to have been made, purchase
from the Swing Line Lender an undivided participation interest in the Swing Line
Loan in an amount equal to its Pro Rata Share of such Swing Line Loan. Upon
request, each Revolving Lender will promptly transfer to the Swing Line Lender,
in immediately available funds, the amount of its participation and upon receipt
thereof the Swing Line Lender will deliver to such Revolving Lender a
certificate evidencing such participation, dated the date of receipt of such
funds and in such amount.
(v) Revolving Lenders' Obligations Unconditional. Each Revolving
Lender's obligation to make Revolving Credit Advances in accordance with Section
2.1(c)(iii) and to purchase participating interests in accordance with Section
2.1(c)(iv) shall be absolute and unconditional and shall not be affected by any
circumstance, including (A) any setoff, counterclaim, recoupment, defense or
other right which such Revolving Lender may have against the Swing Line Lender,
the Borrower or any other Person for any reason whatsoever; (B) the occurrence
or continuance of any Default or Event of Default; (C) any inability of the
Borrower to satisfy the conditions precedent to borrowing set forth in this
Agreement on the date upon which such participating interest is to be purchased,
or (D) any other circumstance, happening or event whatsoever, whether or not
similar to any of the foregoing. If any Revolving Lender does not make available
to Administrative Agent or the Swing Line Lender, as applicable, the amount
required pursuant to Section 2.1(c)(iii) or 2.1(c)(iv), as the case may be, the
Swing Line Lender shall be entitled to recover such amount on demand from such
Revolving Lender, together with interest thereon for each day from the date of
non-payment until such amount is paid in full at the Federal Funds Rate for the
first two (2) Business Days and at the Prime Rate thereafter.
(d) Reliance on Notices. Administrative Agent shall be entitled to rely
upon, and shall be fully protected in relying upon, any Notice of Revolving
Credit Advance, Notice of Conversion/Continuation or similar notice believed by
Administrative Agent to be genuine. Administrative Agent may assume that each
Person executing and delivering such a notice was duly authorized, unless the
responsible individual acting thereon for Administrative Agent has actual
knowledge to the contrary.
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2.2. Prepayments.
(a) Voluntary Prepayments. Borrower may at any time on at least five
(5) days' prior written notice by Borrower to Administrative Agent voluntarily
prepay all or part of the Term Loan; provided that any such prepayments or
reductions shall be in a minimum amount of $50,000. In addition, Borrower may at
any time on at least ten (10) days' prior written notice by Borrower to
Administrative 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 of the Term Loan, and any such
termination of the Revolving Loan Commitment, must be accompanied by the payment
of any LIBOR Loan funding breakage costs in accordance with Section 2.10(b).
Upon any such prepayment and termination of the Revolving Loan Commitment, each
Borrower's right to request Revolving Credit Advances, or request Swing Line
Advances, shall simultaneously be terminated. Any partial prepayments of the
Term Loan shall be applied to prepay the scheduled installments of the Term Loan
in inverse order of maturity.
(b) Mandatory Prepayments. (i) If at any time the outstanding balance
of the aggregate Revolving Loan exceeds the Maximum Amount, less, the aggregate
outstanding Swing Line Loan and Letters of Credit at such time, Borrower shall
immediately repay the aggregate outstanding Revolving Credit Advances to the
extent required to eliminate such excess.
(ii) Immediately upon receipt by the Borrower of proceeds of any asset
disposition (including condemnation proceeds, but excluding proceeds of asset
dispositions permitted by Section 7.8 (a), (b), and (c)), Borrower shall prepay
the Loans within three (3) Business Days of receipt of such proceeds in an
amount equal to 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 Permitted Encumbrances hereunder), if
any, and (D) an appropriate reserve for income taxes in accordance with GAAP in
connection therewith. Any such prepayment shall be applied in accordance with
clause (c) below.
(c) Application of Certain Mandatory Prepayments. Any prepayments made
by Borrower pursuant to clause (b)(ii) above shall be applied as follows: first,
to Fees and reimbursable expenses of Administrative 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 principal of
the Term Loan, ratably in inverse order of maturity, until such Term Loan shall
have been prepaid in full; fourth, to interest then due and payable on such
Borrower's Swing Line Loan; fifth, to the principal balance of the Swing Line
Loan outstanding to such Borrower until the same shall have been repaid in full;
sixth, to interest then due and payable on Revolving Credit Advances made to
such Borrower; and seventh, to the principal balance of Revolving Credit
Advances outstanding to such Borrower until the same shall have been paid in
full. Neither the Revolving Loan Commitment nor the Swing Line Commitment shall
be permanently reduced by the amount of any such prepayment.
27
(d) Application of Prepayments from Insurance Proceeds. Prepayments
from insurance proceeds in accordance with Section 6.4(c) shall be applied as
follows: insurance proceeds from casualties or losses to cash or Inventory shall
be applied first to the Swing Line Loans and second to the Revolving Credit
Advances; insurance proceeds from casualties or losses to Equipment, Fixtures
and Real Estate shall be applied ratably to scheduled installments of principal
of the Term Loan in inverse order of maturity. Neither the Revolving Loan
Commitment nor the Swing Line Loan Commitment shall be permanently reduced by
the amount of any such prepayments. If the precise amount of insurance proceeds
allocable to Inventory as compared to Equipment, Fixtures and Real Estate are
not otherwise determined, the allocation and application of those proceeds shall
be determined by Administrative Agent, subject to the approval of Requisite
Lenders.
(e) No Consent. Nothing in this Section 2.2 shall be construed to
constitute Administrative 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.
2.3. Use of Proceeds.
Borrower shall utilize the proceeds of the Term Loan, the Revolving
Loan and the Swing Line Advances solely to refinance the Existing Credit
Facilities, to payoff Borrower's lease line facility with the Documentation
Agent, for the financing of Borrower' ordinary working capital and Expenditures
Capital needs, and future acquisitions permitted under this Agreement (but
excluding in any event the making of any Restricted Payment not specifically
permitted by Section 7. 14).
2.4. Interest and Applicable Margins.
(a) Borrower shall pay interest to Administrative Agent, 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 Prime
Rate plus the Applicable Prime Rate Margin per annum or, at the election of
Borrower, the applicable LIBOR Rate plus the Applicable LIBOR Margin per annum,
based on the aggregate Revolving Credit Advances outstanding from time to time;
(ii) with respect to Term Loan, the Prime Rate plus the Applicable Prime Rate
Margin per annum or, at the election of Borrower, the applicable LIBOR Rate plus
the Applicable LIBOR Margin per annum based on the aggregate principal amount of
the Term Loan outstanding from time to time; and (iii) with respect to the Swing
Line Loan, the Prime Rate plus the Applicable Prime Rate Margin per annum, based
on the aggregate principal amount of the Swing Line Loan outstanding from time
to time.
As of the Closing Date, the Applicable Margins shall be as follows:
Applicable LIBOR Margin 1.25%
Applicable Prime Rate Margin 0.00%
28
The Applicable Margins will be adjusted (up or down) prospectively on a
Fiscal Quarterly basis as determined by Borrower's Funded Debt to EBITDA Ratio
for the four Fiscal Quarters then ending. The initial adjustment of the
Applicable Margins shall be effective, commencing with the first day of the
first calendar month that occurs more than five (5) days after delivery of
Borrower's unaudited Financial Statements to Lenders for the Fiscal Quarter
ending September 30, 2003. Adjustments in Applicable Margins will be determined
by reference to the following grids:
-----------------------------------------------------------------
If Funded Debt to EBITDA Ratio is: Level of
--------------------------------- --------
Applicable Margins:
------------------
-----------------------------------------------------------------
=> 2.25 Level I
-----------------------------------------------------------------
=> 1.75, but < 2.25 Level II
-----------------------------------------------------------------
=> 1.25, but < 1.75 Level III
-----------------------------------------------------------------
=> 0.75, but < 1.25 Level IV
-----------------------------------------------------------------
< 0.75 Level V
-----------------------------------------------------------------
------------------------------------------------------------------------------
Applicable Margins
------------------------------------------------------------------------------
Xxxxx X Xxxxx XX Xxxxx XXX Xxxxx XX Level V
------------------------------ -------- --------- ---------- --------- --------
Applicable LIBOR Margin 2.50% 2.25% 1.75% 1.25% 0.75%
------------------------------ -------- --------- ---------- --------- --------
Applicable Prime Rate Margin 0.25% 0% 0% 0% 0%
-------------------------------------------------------------------------------
All adjustments in the Applicable Margins after the Fiscal Quarter
ending September 30, 2003, will be implemented with respect to each Fiscal
Quarter on a prospective basis, for each calendar month commencing at least five
(5) days after the date of delivery to Lenders of the quarterly unaudited or
annual audited (as applicable) Financial Statements of Borrower evidencing the
need for an adjustment. Concurrently with the delivery of those Financial
Statements, Borrower shall deliver to Administrative Agent and Lenders a
certificate, signed by its chief financial officer, 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, 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 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
29
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 based upon the Prime Rate shall be made by Administrative Agent on the
basis of a three hundred sixty-five (365) or three hundred sixty-six (366) day
year as the case may be. All computations of interest based upon LIBOR shall be
made by Administrative Agent on the basis of a three hundred sixty (360) day
year for the actual number of days occurring in the period for which such
interest and Fees are payable. The Prime Rate shall be determined each day based
upon the Prime Rate as in effect each day. Each determination by Administrative
Agent of an interest rate hereunder shall be conclusive, absent manifest error.
(d) So long as any Event of Default shall have occurred and be
continuing, and at the election of Administrative Agent (or upon the written
request of Requisite Lenders) confirmed by written notice from Administrative
Agent to Borrower, the interest rates applicable to the Loans shall be increased
by two percentage points (2%) per annum above the rates of interest or the rate
of such Fees otherwise applicable hereunder ("Default Rate"), and all
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest at the Default Rate shall accrue from the initial
date of such Event of Default until that Event of Default is cured or waived and
shall be payable upon demand. Borrower shall pay, upon billing therefor, a "Late
Charge" equal to five percent (5%) of the amount of any payment of principal,
other than principal due at the Commitment Termination Date, interest, or both,
which is not paid within ten (10) days of the due date thereof. Late charges
are: (i) payable in addition to, and not in limitation of, the Default Rate,
(ii) intended to compensate Lenders for administrative and processing costs
incident to late payments, (iii) are not interest, and (iv) shall not be subject
to refund or rebate or credited against any other amount due.
(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 3.2, 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 of the
Term Loan, or all or any part of outstanding Revolving Credit Advances, from
Prime Rate Loans to LIBOR Loans, (iii) convert any LIBOR Loan to a Prime Rate
Loan, subject to payment of LIBOR breakage costs in accordance with Section
2.10(b) if such conversion is made prior to the expiration of the LIBOR Period
applicable thereto, or (iv) continue all of the Term Loan, or all or any portion
of any Revolving Credit Advance, 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 $250,000 and, with respect to Revolving Credit Advances,
integral multiples of $50,000 in excess of such amount. The Borrower may only
elect a three (3) month LIBOR Period for any LIBOR Loan under the Term Loan and
may only convert or continue the Term Loan as a LIBOR Loan with respect to all
of the outstanding principal balance of the Term Loan. Any such election must be
made by 11:00 a.m. (Manchester, New Hampshire 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
30
continued as such, or (3) the date on which Borrower wishes to convert any Prime
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 11:00 a.m.
(Manchester, New Hampshire 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 if the additional conditions
precedent set forth in Section 3.2 shall not have been satisfied), that LIBOR
Loan shall be converted to a Prime Rate Loan at the end of its LIBOR Period.
Borrower must make such election by notice to Administrative 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 2.4(e).
(f) Notwithstanding anything to the contrary set forth in this Section
2.4, 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 Administrative
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 2.4(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 2.4(f),
a court of competent jurisdiction shall finally determine that a Lender has
received interest hereunder in excess of the Maximum Lawful Rate, Administrative
Agent shall, to the extent permitted by applicable law, promptly apply such
excess in the order specified in Section 2.8 and thereafter shall refund any
excess to Borrower or as a court of competent jurisdiction may otherwise order.
0.0.Xxxx Management Systems.
Borrower shall maintain the use of a cash management system with
Administrative Agent or with another Lender (the "Cash Management System").
2.6. Fees.
(a) Borrower shall pay to Citizens Bank New Hampshire, individually, an
arrangement fee in an amount established by separate agreement of the
Administrative Agent and the Borrower, the balance of which is payable in full
on the Closing Date.
31
(b) Borrower shall pay to Citizens Bank New Hampshire, individually, an
annual Administrative Agent's fee in an amount established by separate agreement
of the Administrative Agent and the Borrower, payable on the Closing Date and on
or before September 30th of each year.
(c) As additional compensation for the Revolving Lenders, Borrower
agrees to pay to Administrative Agent, for the ratable benefit of such Lenders,
in arrears, on the first Business Day of each Fiscal 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 Applicable
Unused Line Fee Margin per annum (calculated on the basis of a 360 day year for
actual days elapsed) of the difference between (x) the Maximum Amount (as it may
be reduced or increased from time to time) and (y) Revolver Utilization during
the immediately preceding Fiscal Quarter.
(d) As additional compensation for the Lenders, Borrower agrees to pay
to Administrative Agent, for the ratable benefit of the Lenders, on the Closing
Date a facility fee equal to 0.25% of the aggregate Lenders' Commitment.
2.7. Receipt of Payments.
Borrower shall make each payment under this Agreement not later than
2:00 p.m. (Manchester, New Hampshire time) on the day when due in immediately
available funds in Dollars to the Administrative Agent unless Administrative
Agent has automatically debited such payments against Borrower's account(s) with
Administrative Agent. For purposes of computing interest and Fees and
determining Borrowing Availability as of any date, all payments shall be deemed
received on the day of receipt of immediately available funds therefore in the
Collection Account prior to 2:00 p.m. Manchester, New Hampshire time. Payments
received after 2:00 p.m. Manchester, New Hampshire time on any Business Day
shall be deemed to have been received on the following Business Day.
2.8. Application and Allocation of Payments.
(a) So long as no Default or Event of Default shall have occurred and
be continuing, (i) payments consisting of proceeds of Accounts received in the
ordinary course of business shall be applied to the Swing Line Loan and the
Revolving Loan; (ii) payments matching specific scheduled payments then due
shall be applied to those scheduled payments; (iii) voluntary prepayments shall
be applied as determined by Borrower, subject to the provisions of Section
2.2(a); and (iv) mandatory prepayments shall be applied as set forth in Section
2.2(c). As to each other payment, and as to all payments made when a Default or
Event of Default shall have occurred and be continuing or following the
Commitment Termination Date, 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 Administrative Agent shall
have the continuing exclusive right to apply any and all such payments against
the Obligations of Borrower as Administrative Agent may deem advisable
notwithstanding any previous entry by Administrative Agent in the Loan Account
or any other books and records. In the absence of a
32
specific determination by Administrative Agent with respect thereto, payments
shall be applied to amounts then due and payable in the following order: (1) to
Fees and Administrative Agent's expenses reimbursable hereunder; (2) to interest
on the Swing Line Loan; (3) to principal payments on the Swing Line Loan; (4) to
interest on the other Loans, ratably in proportion to the interest accrued as to
each Loan; (5) to principal payments on the other Loans ratably to the
aggregate, combined principal balance of the other Loans; and (6) to all other
Obligations including expenses of Lenders to the extent reimbursable under
Section 12.3.
(b) Administrative Agent is authorized to, and at its sole election
may, 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 6.4(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, even if such charges would cause the balance of
the aggregate Revolving Loan and the Swing Line Loan to exceed Borrowing
Availability. At Administrative Agent's option and to the extent permitted by
law, any charges so made shall constitute part of the Revolving Loan hereunder.
2.9. Loan Account and Accounting.
Administrative Agent shall maintain a loan account (the "Loan Account")
on its books to record: all Advances and the Term Loans, all payments made by
Borrower, and all other debits and credits as provided in this Agreement with
respect to the Loans or any other Obligations. All entries in the Loan Account
shall be made in accordance with Administrative Agent's customary accounting
practices as in effect from time to time. The balance in the Loan Account, as
recorded on Administrative Agent's most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the amounts
due and owing to Administrative Agent and Lenders by Borrower; provided that any
failure to so record or any error in so recording shall not limit or otherwise
affect the Borrower's duty to pay the Obligations. Administrative Agent shall
render to Borrower a monthly accounting of transactions with respect to the
Loans setting forth the balance of the Loan Account as to Borrower. Unless
Borrower notifies Administrative Agent in writing of any objection to any such
accounting (specifically describing the basis for such objection), within thirty
(30) days after the date thereof, each and every such accounting shall (absent
manifest error) be deemed final, binding and conclusive upon Borrower in all
respects as to all matters reflected therein. Only those items expressly
objected to in such notice shall be deemed to be disputed by Borrower.
2.10. Indemnity.
(a) Borrower shall indemnify and hold harmless each of Administrative
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
33
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "Indemnified Liabilities"); provided, that Borrower shall not 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 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) the Borrower
shall default in payment when due of the principal amount of or interest on any
LIBOR Loan; (iii) the 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) the Borrower shall fail to
make any prepayment of a LIBOR Loan after Borrower has given a notice thereof in
accordance herewith, Borrower shall pay each Lender a Yield Maintenance Fee with
respect to such prepayment and, but without duplication of the Yield Maintenance
Fee, 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 and any costs associated
with marking to market under any Interest Rate Protection Agreements that (in
the reasonable determination of the affected Lender) are required to be
terminated as a result of any conversion, repayment or prepayment of the
principal amount of the LIBOR Loan on a date other than the scheduled last day
of the LIBOR Period applicable thereto. 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
34
Section 2.10(b), and such calculation shall be binding on the parties hereto
unless Borrower shall object in writing within ten (10) Business Days of receipt
thereof, specifying the basis for such objection in detail. The Borrower
acknowledges that additional obligations may be associated with prepayment, in
accordance with the terms and conditions of any applicable Interest Rate
Protection Agreement.
2.11. Access.
Borrower shall, during normal business hours, from time to time upon
three (3) Business Days' prior notice as frequently as Administrative Agent
determines to be appropriate: (a) provide Administrative Agent and any of its
officers, employees and agents access to its properties, facilities, advisors
and employees (including officers) of each Borrower and to the Collateral, (b)
permit Administrative Agent, and any of its officers, employees and agents, to
inspect, audit and make extracts from the Borrower's books and records, and (c)
permit Administrative 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 the Borrower. If a Default or Event of Default
shall have occurred and be continuing, each such Borrower shall provide such
access to Administrative 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 Administrative Agent and each Lender
with access to their suppliers and customers. Borrower shall make available to
Administrative Agent and its counsel, as quickly as is possible under the
circumstances, originals or copies of all books and records which Administrative
Agent may request. Borrower shall deliver any document or instrument necessary
for Administrative Agent, as it may from time to time 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 consistent with past
practices. Administrative Agent will give Lenders at least ten (10) days' prior
written notice of regularly scheduled audits. Representatives of other Lenders
may accompany Administrative Agent's representatives on regularly scheduled
audits at no charge to Borrower.
2.12. Taxes.
(a) Any and all payments by each Borrower hereunder or under the Notes
shall be made, in accordance with this Section 2. 12, free and clear of and
without deduction for any and all present or future Taxes. If the 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 2. 12)
Administrative 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 applicable
law. Within thirty (30) days after the date of any payment of Taxes, Borrower
shall furnish to Administrative Agent the original or a certified copy of a
receipt evidencing payment thereof.
35
(b) Borrower shall indemnify and, within ten (10) days of demand
therefor, pay Administrative Agent and each Lender for the full amount of Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section 2. 12) paid by Administrative 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.
2.13. Capital Adequacy: Increased Costs: Illegality.
(a) If any Lender shall have determined that the adoption of 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) 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 Administrative Agent) pay to Administrative
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 Administrative Agent shall, absent manifest
error, be final, conclusive and binding for all purposes.
(b) If, due to the introduction of or any change in any law or
regulation (or any change in the interpretation thereof), 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 Administrative Agent), pay to
Administrative 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
Administrative 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 2.13(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 notice thereof and demand therefor by such Lender to Borrower through
Administrative Agent, (i) the obligation of such Lender to agree to
36
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 by Borrower 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 affected Loans into a Loan bearing interest based on
the Prime 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 Sections 2.13(a) or
2.13(b), Borrower may, at its option, notify Administrative 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 Administrative Agent (which may not be unreasonably withheld
or delayed), may obtain, at Borrower' expense, a replacement Lender
("Replacement Lender") for the Affected Lender, which Replacement Lender must be
satisfactory to Administrative Agent. If Borrower obtains a Replacement Lender
within ninety (90) days following notice of their intention to do so, the
Affected Lender must sell and assign its Loans and Commitments to such
Replacement Lender for an amount equal to the principal balance of all Loans
held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale, 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' notice of intention to replace such Affected Lender.
Furthermore, if Borrower give a notice of intention to replace and do not so
replace such Affected Lender within ninety (90) days thereafter, Borrower'
rights under this Section 2.13(d) shall terminate and Borrower shall promptly
pay all increased costs or additional amounts demanded by such Affected Lender
pursuant to Sections 2.13(a) and 2.13(b).
2.14. Single Loan.
All Loans to the Borrower and all of the other Obligations of Borrower
arising under this Agreement and the other Loan Documents shall constitute one
general obligation of the Borrower and shall be secured, until the Termination
Date, by all of the Collateral.
2.15. Letters of Credit.
2.15.1. Letters of Credit. Subject to the terms and conditions hereof,
including satisfaction of the conditions set forth in Section 3.2 hereof, and
provided no Default has occurred and that the Administrative Agent is generally
issuing letters of credit for the account of customers in its ordinary banking
business, the Administrative Agent agrees upon the request of the Company
pursuant to Section 2.15.2 hereof, to issue Letters of Credit, provided that:
(a) the outstanding stated amount of the Letters of Credit shall not exceed
$10,000,000; (b) the sum of (i) the outstanding stated amount of all Letters of
Credit and (ii) the aggregate principal amount
37
of all outstanding Revolving Line Advances and Swing Line Advances shall not
exceed the Maximum Amount; and (c) each Letter of Credit shall expire on or
before ten (10) days prior to the Revolving Loan Commitment Termination Date.
All letters of credit issued by the Administrative Agent in favor of the
Borrower and outstanding on the date of this Agreement shall be deemed to be
Letters of Credit issued and outstanding under this Agreement. All fees with
respect to such Letters of Credit shall be adjusted by the Administrative Agent
to reflect the terms and conditions of this Agreement and the fees payable with
respect to Letters of Credit hereunder. Borrower shall pay to the Administrative
Agent all such adjusted fees upon receipt of a statement from Administrative
Agent for such adjusted fees.
2.15.2. Issuing a Letter of Credit. The Borrower may request that the
Administrative Agent issue a Letter of Credit by written notice (the "L/C
Notice") given to the Administrative Agent not less than two (2) Business Days
prior to the proposed date of issuance of such Letter of Credit. The L/C Notice
shall specify the proposed date of issuance and the beneficiary and amount of
such Letter of Credit, and shall be accompanied by a letter of credit
application completed to the satisfaction of, and with such amendments and
modifications as may be deemed necessary by, the Administrative Agent.
2.15.3. Letter of Credit Participations.
(a) The Administrative Agent shall notify the Lenders on a monthly
basis and report the issuance or any amendment or extension of any Letter of
Credit. Immediately upon the issuance by the Administrative Agent of any Letter
of Credit, the Administrative Agent shall be deemed to have sold to each Lender
(each such Lender, in its capacity under this Section 2.15.3, an "L/C
Participant"), and each such L/C Participant shall be deemed irrevocably and
unconditionally to have purchased and received from the Administrative Agent,
without recourse or warranty, an undivided interest and participation (each an
"L/C Participation") equal to such L/C Participant's L/C Commitment in such
Letter of Credit, any substitute Letter of Credit, each draw made thereunder and
the obligations of the Borrower under the Loan Documents with respect thereto,
and any security therefor or any pertaining thereto.
(b) In determining whether to pay under any Letter of Credit, the
Administrative Agent shall have no obligation relative to the L/C Participants
other than to confirm that any documents required to be delivered under such
Letter of Credit have been delivered and that they appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by the Administrative Agent under or in connection with any Letter
of Credit, if taken or omitted to be taken in the absence of gross negligence or
willful misconduct, shall not create for the Administrative Agent any resulting
liability.
2.15.4. Reimbursement and Other Payments.
(a) Borrower hereby agrees to pay to the Administrative Agent, for the
ratable accounts of the Lenders, on the date on which the Administrative Agent
shall be required to pay any draft presented under any Letter of Credit, a sum
(the "Reimbursement Amount") equal to: (i) the amount so paid under such Letter
of Credit, plus (ii) interest on any amount remaining unpaid by
38
the Borrower to the Lenders under clause (i) from and including the date on
which such amount becomes payable pursuant to clause (i) until payment in full,
payable on demand, at a per annum rate of interest equal to the rate applicable
to Revolving Credit Advances. If the Borrower shall fail to pay to the
Administrative Agent the Reimbursement Amount on the date on which the
Administrative Agent shall be required to pay any draft presented under any
Letter of Credit, the Administrative Agent shall, to the extent the Borrower
have availability to request a Revolving Credit Advance, consider such failure
to be a request for a Revolving Credit Advance in the amount of the
Reimbursement Amount. In the event any such Loan is made pursuant to this
Section 2.15.4(a), the Administrative Agent shall notify each Lender of such
Lender's Revolving Loan Commitment of such Loan, and such Lender shall make
available promptly to the Administrative Agent the corresponding amount of such
Loan, all in accordance with Section 2.1(a) hereof. The Borrower agrees that the
Administrative Agent may make any such Loan, and each Lender agrees to deliver
such Lender's Revolving Loan Commitment of such Loan, even if the making of such
Loan causes the outstanding balance of all Loans to exceed the limits set forth
in Section 2.1(a) hereof, and the Borrower further agrees that the making of
such Loan by the Administrative Agent in excess of the limits set forth in
Section 2.1(a) hereof shall constitute an automatic Default hereunder, entitling
the Administrative Agent and the Lenders to exercise all rights and remedies
available to them under the Lender Documents and applicable law.
(b) The Borrower shall pay a fee (in each case, a "Letter of Credit
Fee") to the Administrative Agent in respect of each Letter of Credit on the
date such Letter of Credit is issued, extended or renewed at the request of the
Borrower equal to the face amount of such Letter of Credit multiplied by the
Letter of Credit Commission Fee Rate per annum for the term of such Letter of
Credit. The Administrative Agent shall, in turn, remit to each Lender its pro
rata portion of such Letter of Credit Fee. In addition, the Borrower shall,
jointly and severally, pay to the Administrative Agent, for its own account, on
the date of issuance, or any extension or renewal of any Letter of Credit and at
such other time or times as such charges are customarily made by the
Administrative Agent, the Administrative Agent's standard issuance, processing,
negotiation, amendment and administrative fees, determined in accordance with
customary fees and charges for similar facilities.
(c) If prior to the time a Loan would have otherwise been made pursuant
to Section 2.15.4(a), one of the events described in Section 9.1(h) or (i) below
shall have occurred and be continuing, each Lender shall, on the date such Loan
was to have been made pursuant to the provisions of paragraph (a) above (the
"Reimbursement Date"), purchase an undivided participating interest in an amount
equal to (i) such Lender's Pro Rata Share of the Revolving Loan Commitment times
(ii) the aggregate principal amount of the Reimbursement Amount then outstanding
which was to have been repaid with such Loan (the "Letter of Credit
Participation Amount"). On the Reimbursement Date, each Lender shall transfer to
the Administrative Agent, in immediately available funds, such Lender's Letter
of Credit Participation Amount and upon receipt thereof the Administrative Agent
shall deliver to such Lender a Letter of Credit Loan Participation Certificate
dated the date of the Lender's receipt of such funds and in such Letter of
Credit Participation Amount.
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2.15.5. Obligations Absolute. The obligations of the Borrower with
respect to the Letters of Credit shall be unconditional and irrevocable, and
shall be paid strictly in accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following circumstances:
(a) any lack of validity or enforceability of the Letters of Credit or
this Agreement;
(b) any amendment or waiver of or any consent to or actual departure
from this Agreement;
(c) the existence of any claim, set-off, defense or other right which
the Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any persons or entities for which any such beneficiary or
any such transferee may be acting), the Administrative Agent, the Lenders or any
other person or entity, whether in connection with this Agreement, the
transactions contemplated herein or in any other agents or any unrelated
transaction;
(d) any statement or any other document presented under a 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;
(e) payment by the Administrative Agent under a Letter of Credit
against presentation by the beneficiary thereof of a draft or certificate which
does not comply with terms of such Letter of Credit; or
(f) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing.
2.15.6. The Uniform Customs and Practice. The Uniform Customs and
Practice for Documentary Credits (ICC Publication No. 500) shall be binding on
the Borrower and the Administrative Agent. The Borrower assumes all risks of the
acts or omissions of the beneficiary of each Letter of Credit with respect to
such Letter of Credit. In furtherance of, and not in limitation of the
Administrative Agent's rights and powers under the Uniform Customs and Practice,
but subject to all other provisions of this Section 2.15.6, it is understood and
agreed that the Administrative Agent shall not have any liability for, and that
the Borrower assume all responsibility for: (a) the genuineness of any
signature; (b) the form, correctness, validity, sufficiency, genuineness,
falsification and legal effect of any draft, certification or other document
required by a Letter of Credit or the authority of the person signing the same;
(c) the failure of any instrument to bear any reference or adequate reference to
a Letter of Credit or the failure of any persons to note the amount of any
instrument on the reverse of a Letter of Credit or to surrender a Letter of
Credit or otherwise to comply with the terms and conditions of a Letter of
Credit; (d) the good faith or acts of any person other than the Administrative
Agent and its agents and employees; (e) the existence, form, sufficiency or
breach of or default under any agreement or instrument of any nature whatsoever;
(f) any delay in giving or failure to give any notice, demand or protest; and
(g) any error, omission, delay in or non-delivery of any notice or other
communication, however sent. The determination as to whether the required
documents are
40
presented prior to the expiration of a Letter of Credit and whether such other
documents are in proper and sufficient form for compliance with a Letter of
Credit shall be made by the Administrative Agent in its sole discretion, which
determination shall be conclusive and binding upon the Borrower. It is agreed
that the Administrative Agent may honor, as complying with the terms of the
Letters of Credit and this Agreement, any documents otherwise in order and
signed or issued by the beneficiary thereof. Any action, inaction or omission on
the part of the Administrative Agent under or in connection with the Letters of
Credit or any related instruments or documents, if in good faith and in
conformity with such laws, regulations or commercial or banking customs as the
Administrative Agent may reasonably deem to be applicable, shall be binding upon
the Borrower, shall not place the Administrative Agent or the Lenders under any
liability to the Borrower, and shall not affect, impair or prevent the vesting
of any of the Administrative Agent's or the Lenders' rights or powers hereunder
or the Borrower' obligation to make full reimbursement.
2.15.7. Modification, Consent, etc. If the Borrower, either in writing
or orally, request or consent to any modification or extension of a Letter of
Credit or waives failure of any draft, certificate or other documents to comply
with the terms of a Letter of Credit, the Administrative Agent shall be entitled
to rely and shall be deemed to have relied on such request, consent or waiver
with respect to any action taken or omitted by the Administrative Agent pursuant
to any such request, consent or waiver, and such extension, modification or
waiver binding upon the Borrower.
2.15.8. Liability of the Administrative Agent and the Lenders. Neither
the Administrative Agent, the Lenders nor any of their officers or directors
shall be liable or responsible for: (a) the use which may be made of the Letters
of Credit or any acts or omissions of any beneficiary or transferee in
connection therewith; (b) the validity, sufficiency or genuineness of documents,
or of any endorsement thereon, even if such documents should prove to be in any
or all respects invalid, insufficient, fraudulent or forged; (c) payment by the
Administrative Agent against presentation of documents which do not comply with
the terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to a Letter of Credit; or (d) any other
circumstances whatsoever in making or failure to make payment under a Letter of
Credit, except that notwithstanding anything in this Section 2.15.8 to the
contrary, the Borrower shall have a claim against the Administrative Agent, and
the Administrative Agent shall be liable to the Borrower, to the extent but only
to the extent, of any direct, as opposed to consequential, damages suffered by
the Borrower which were caused by the Administrative Agent's failure to conform
to the standards of the Uniform Customs and Practice. In furtherance and not in
limitation of the foregoing, the Administrative Agent may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary. Nothing
contained in this Section 2.15.8 shall affect the Administrative Agent's
responsibilities under Section 2.15.8.
2.16. Guaranty. The Guarantor hereby unconditionally guaranties to the
Administrative Agent and the Lenders the prompt payment and performance of (a)
all liabilities and obligations and Indebtedness, direct or indirect, matured or
unmatured, primary or secondary, certain or contingent, of the Borrower
(including without limitation, costs and expenses incurred by the
41
Administrative Agent and the Lenders in attempting to collect or enforce any of
the foregoing), accrued in each case to the date of payment, and (b) the
performance of all other agreements, covenants and conditions of the Borrower
with respect thereto set forth in this Agreement and all other Loan Documents.
The responsibilities and obligations of the Borrower to the Administrative Agent
and the Lenders described in the preceding sentence are hereinafter referred to
collectively as the "Guaranteed Obligations." The guaranty pursuant to this
Section 2.16 is an absolute, unconditional and continuing guaranty of the full
and punctual payment and performance by the Borrower of the Guaranteed
Obligations and not of collectability of the Guaranteed Obligations, and is in
no way conditioned upon any requirement that the Administrative Agent or the
Lenders first attempt to collect any of the Guaranteed Obligations from the
Borrower or resort to any security or other means of obtaining payment of any of
the Guaranteed Obligations which the Administrative Agent or the Lenders now has
or may acquire after the date hereof, or upon any other contingency whatsoever.
Upon any default by the Borrower in the full and punctual payment and
performance of the Guaranteed Obligations, the liabilities and obligations of
the Guarantor hereunder shall, at the option of the Administrative Agent, become
forthwith due and payable to the Administrative Agent and the Lenders without
demand or notice of any nature, all of which are expressly waived by the
Guarantor. Payments by the Guarantor under this Section 2.16 may be required by
the Administrative Agent or the Lenders on any number of occasions. The
Guarantor waives presentment, demand, protest, notice of acceptance, notice of
Guaranteed Obligations incurred and all other notices of any kind, all defenses
which may be available by virtue of any valuation, stay, moratorium law or other
similar law now or hereafter in effect, any right to require the marshaling of
assets of the Borrower, and all suretyship defenses generally. Without limiting
the generality of the foregoing, the Guarantor agrees to the provisions of any
instrument evidencing, securing or otherwise executed in connection with any
Guaranteed Obligations and agrees that the obligations of the Guarantor
hereunder shall not be released or discharged, in whole or in part, or otherwise
affected by any rescissions, waivers, amendments or modifications of any of the
terms or provisions of any agreement evidencing securing or otherwise executed
in connection with any Guaranteed Obligation. Until the payment and performance
in full of all Guaranteed Obligations and any and all obligations of the
Borrower to any affiliate of the Administrative Agent or the Lenders, the
Guarantor shall not exercise any rights against the Borrower arising as a result
of payment by the Guarantor hereunder, by way of subrogation or otherwise. The
payment of any amounts due with respect to any indebtedness of the Borrower now
or hereafter held by the Guarantor is hereby subordinated to the prior payment
in full of the Guaranteed Obligations. All of the Guaranteed Obligations shall
at all times be secured by first priority, perfected Liens upon all of the real
and personal property of the Guarantor included in the Collateral. At such time
as any Person becomes a Subsidiary of the Borrower (other than a Foreign
Subsidiary as provided below), or of any existing Subsidiary of the Borrower,
such Person shall become a party to this Agreement as a Guarantor and shall
execute and deliver all documents and instruments to Administrative Agent as
Administrative Agent may reasonably request in order for such party to become a
Guarantor, to guaranty the Guaranteed Obligations under this Agreement, and to
secure such guaranty with all of the real and personal property of such Person.
Notwithstanding the foregoing, any Subsidiary that is a Foreign Subsidiary shall
only be required to become a Guarantor hereunder at such time as the annualized
gross income of such Foreign Subsidiary exceeds $10,000,000. In such event, such
Foreign Subsidiary shall become a Guarantor
42
hereunder upon such terms as the Administrative Agent and the Borrower shall
agree in order to minimize any adverse federal income tax consequences to
Borrower resulting from such Foreign Subsidiary guaranteeing the Guaranteed
Obligations and securing such guaranty with all of the real and personal
property of such Foreign Subsidiary. The obligations of the Guarantor under this
Section 2.16 shall be joint and several.
3. CONDITIONS PRECEDENT; CONDITIONS SUBSEQUENT
3.1. Conditions to the Initial Loans.
No Lender shall be obligated to make any Loan 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
Administrative Agent, or waived in writing by Administrative Agent on behalf of
the Lenders:
(a) Credit Agreement: Loan Documents. This Agreement or counterparts
hereof shall have been duly executed by, and delivered to, Borrower,
Administrative Agent and Lenders; and Administrative Agent shall have received
such documents, instruments, agreements and legal opinions as Administrative
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 A, each in form and substance
satisfactory to Administrative Agent.
(b) Approvals. Administrative Agent shall have received (i)
satisfactory evidence that the Borrower have 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 and the consummation of the Related Transactions or (ii) an officer's
certificate in form and substance satisfactory to Administrative Agent affirming
that no such consents or approvals are required.
(c) Financial Covenant Compliance. Administrative Agent shall have
received satisfactory evidence that the Borrower shall be in compliance with
each of the financial covenants set forth in Annex C as of the Closing Date.
(d) Payment of Fees. Borrower shall have paid the Fees required to be
paid on the Closing Date, and shall have reimbursed Administrative Agent for all
fees, costs and expenses of closing presented as of the Closing Date.
3.2. Further Conditions to Each Loan.
Except as otherwise expressly provided herein, no Lender shall be
obligated to fund any Loan, or convert or continue any Loan as a LIBOR Loan, if,
as of the date thereof:
43
(a) Any representation or warranty by the Borrower contained herein or
in any of the other Loan Documents shall be untrue or incorrect in any material
respect 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 (ii) a Default shall have
occurred and be continuing or would result after giving effect to any Loan, and
Administrative Agent or Requisite Revolving Lenders shall have determined not to
make any Loan so long as that Default is continuing; or
(d) After giving effect to any Advance, the outstanding principal
amount of the aggregate Revolving Loan would exceed the Maximum Amount less all
then outstanding principal under the Swing Line Loan and the aggregate face
amount of all then outstanding Letters of Credit; or
(e) After giving effect to any Swing Line Advance, the outstanding
principal amount of the Swing Line Loan would exceed Swing Line Availability.
Additionally, after the Closing Date no Lender shall be obligated to fund any
Loan, or convert or continue any Loan as a LIBOR Loan, unless, within five (5)
Business Days after the Closing Date, Borrower shall have entered into an
Interest Rate Protection Agreement with the Administrative Agent, a Lender, or
one of their Affiliates fixing the interest rate with respect to all or a
portion of the principal amount of the Term Loan upon such terms and conditions
as are acceptable to the Administrative Agent, such Lender, or such Affiliate,
as the case may be, and Borrower.
The request and acceptance by the Borrower of the proceeds of any Loan, or the
conversion or continuation of any Loan into, or as, a LIBOR Loan, 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 3.2
have been satisfied and (ii) a reaffirmation by Borrower of the granting and
continuance of Administrative Agent's Liens, on behalf of itself and Lenders,
pursuant to the Collateral Documents.
4. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans, the Borrower and Guarantor
executing this Agreement, jointly and severally, make the following
representations and warranties to Administrative Agent and each Lender with
respect to Borrower and, where applicable, Guarantor, each and all of which
shall survive the execution and delivery of this Agreement.
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4.1. Corporate Existence; Compliance with Law.
Each of Borrower and Guarantor (a) is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation; (b) is duly qualified to conduct business and is in good standing
in each other jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification except where the failure to
be so qualified would not have a Material Adverse Effect; (c) has the requisite
corporate power and authority and the legal right to own, pledge, mortgage or
otherwise encumber and operate its properties, to lease the property it operates
under lease and to conduct its business as now, heretofore and proposed to be
conducted; (d) subject to specific representations set forth herein 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; (e) is in compliance with its charter and by-laws; and
(f) subject to specific representations set forth herein regarding ERISA,
Environmental Laws, tax and other laws, is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
4.2. Executive Offices; FEIN.
As of the Closing Date, the current location of Borrower's and
Guarantor's chief executive office and principal place of business is set forth
in Disclosure Schedule (4.2), and none of such locations have changed within the
twelve (12) months preceding the Closing Date. In addition, Disclosure Schedule
(4.2) lists the federal employer identification number of each of Borrower and
Guarantor.
4.3. Corporate Power; Authorization; Enforceable Obligations.
The execution, delivery and performance by each of Borrower and
Guarantor of the Loan Documents to which it is a party and the creation of all
Liens provided for therein: (a) are within such Person's corporate or
partnership power; (b) have been duly authorized by all necessary or proper
corporate, shareholder and other action; (c) do not contravene any provision of
such Person's charter, bylaws or partnership agreement; (d) do not violate any
law or regulation, or any order or decree of any court or Governmental
Authority; (e) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, instrument, mortgage, deed of trust, or
any material lease or other agreement to which such Person is a party or by
which such Person or any of its property is bound; (f) do not result in the
creation or imposition of any Lien upon any of the property of such Person other
than those in favor of Administrative 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 3.1 (b), 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 shall have been duly executed and delivered by Borrower and
Guarantor, where applicable, and each such Loan Document shall then constitute a
legal, valid and binding obligation enforceable in accordance with its terms.
45
4.4. Financial Statements.
All Financial Statements concerning Borrower and Guarantor 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.
The following Financial Statements attached hereto as Disclosure Schedule (4.4)
have been delivered on the date hereof:
(i) The audited consolidated balance sheets of the Borrower
and Guarantor as of December, 2002 and the related statements of income and cash
flows of the Guarantor and Borrower for their Fiscal Year then ended.
(ii) The unaudited balance sheet at June 30, 2003 of the
Borrower and Guarantor and the related statement(s) of income and cash flows of
the Borrower and Guarantor for the period then ended.
4.5. Material Adverse Effect.
Between the date of the most recent financial statements of the
Borrower and Guarantor delivered to the Administrative Agent (the "Financial
Statement Date") and the Closing Date, (a) neither Guarantor nor Borrower 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 such financial statements and which, alone or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, (b)
no contract, lease or other agreement or instrument has been entered into by
Guarantor or Borrower or has become binding upon any Guarantor or the Borrower's
assets and no law or regulation applicable to Guarantor or the Borrower has been
adopted which has had or could reasonably be expected to have a Material Adverse
Effect, and (c) neither Guarantor nor the Borrower is in default and to the best
of Guarantor's and Borrower' knowledge no third party is in default under any
material contract, lease or other agreement or instrument, which alone or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
Between the Financial Statement Date and the Closing Date no event has occurred,
which alone or together with other events, could reasonably be expected to have
a Material Adverse Effect.
4.6. Ownership of Property: Liens.
As of the Closing Date, the real estate ("Real Estate") listed on
Disclosure Schedule (4.6) constitutes all of the real property owned, leased,
subleased, or used by the Borrower and the Guarantor. Each of Borrower and
Guarantor 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,
46
all as described on Disclosure Schedule (4.6), and copies of all such leases or
a summary of terms thereof satisfactory to Administrative Agent have been
delivered to Administrative Agent. Disclosure Schedule (4.6) further describes
any Real Estate with respect to which the Borrower and Guarantor is a lessor,
sublessor or assignor as of the Closing Date. Each of Borrower and Guarantor
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 the Borrower or Guarantor are subject to any Liens
other than Permitted Encumbrances, and there are no facts, circumstances or
conditions known to the Borrower or Guarantor that may result in any Liens
(including Liens arising under Environmental Laws) other than Permitted
Encumbrances. Each of Borrower and Guarantor has received all deeds,
assignments, waivers, consents, non-disturbance and recognition or similar
agreements, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect the Borrower's and Guarantor's right, title and interest in and to all
such Real Estate and other properties and assets. Disclosure Schedule (4.6) also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate. As of the Closing Date, no
portion of the Borrower's or Guarantor's Real Estate has suffered any material
damage by fire or other casualty loss which has not heretofore been repaired and
restored in all material respects to its original condition or otherwise
remedied. As of the Closing Date, all material permits required to have been
issued to enable the Real Estate to be lawfully occupied and used for all of the
purposes for which they are currently occupied and used have been lawfully
issued and are in full force and effect.
4.7. Labor Matters.
As of the Closing Date (a) no strikes or other material labor disputes
against any Borrower or the Guarantor are pending or, to Borrower or the
Guarantor's knowledge, threatened; (b) hours worked by and payment made to
employees of Borrower and Guarantor comply with the Fair Labor Standards Act and
each other federal, state, local or foreign law applicable to such matter; (c)
all payments due from any Borrower and Guarantor for employee health and welfare
insurance have been paid or accrued as a liability on the books of Borrower and
Guarantor ; (d) except as set forth in Disclosure Schedule (4.7), neither
Borrower nor the Guarantor is a party to or bound by any collective bargaining
agreement or management agreement, any consulting agreement involving payments
by Borrower of greater than $200,000 per annum, or any employment agreement
under which compensation is payable to the employee thereunder of greater than
$200,000 per annum (and true and complete copies of any agreements described on
Disclosure Schedule (4.7) have been delivered to Administrative Agent); (e)
there is no organizing activity involving Borrower or the Guarantor pending or,
to Borrower or the Guarantor's knowledge, threatened by any labor union or group
of employees; (f) there are no representation proceedings pending or, to
Borrower or the Guarantor's knowledge, threatened with the National Labor
Relations Board, and no labor organization or group of employees of Borrower or
the Guarantor has made a pending demand for recognition; and (g) except as set
forth in Disclosure Schedule (4.7), there are no complaints or charges against
Borrower or the Guarantor pending or, to the knowledge of Borrower or the
Guarantor, 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 the Guarantor of any
individual.
47
4.8. Ventures, Indebtedness.
Except as set forth in Disclosure Schedule (4.8), neither Borrower nor
the Guarantor has any Subsidiaries, is engaged in any joint venture or
partnership with any other Person, or is, to the best of its knowledge, an
Affiliate of any Person other than the Borrower and the Guarantor. As of the
Closing Date, the Borrower and Guarantor have no Indebtedness or Guaranteed
Indebtedness except as set forth in Section 7.3 and Disclosure Schedule (7.3).
4.9. Government Regulation.
Neither Borrower nor the Guarantor is an "investment company" or an
"affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940, as amended. Neither Guarantor nor the Borrower is subject to regulation
under the Public Utility Holding Company Act of 1935, as amended, the Federal
Power Act, as amended, or any other federal or state statute that restricts or
limits its ability to incur Indebtedness or to perform its obligations
hereunder. The borrowings by Borrower, and 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 Guarantor.
4.10. Margin Regulations.
Neither Borrower nor the Guarantor is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin security" as
such terms are defined in Regulation U or G of the Federal Reserve Board as now
and from time to time hereafter in effect (such securities being referred to
herein as "Margin Stock"). Neither Borrower nor Guarantor owns any Margin Stock,
and none of the proceeds of the Loans or other extensions of credit under this
Agreement will be used, directly or indirectly, for the purpose of purchasing or
carrying any Margin Stock, for the purpose of reducing or retiring any
Indebtedness 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 G, T, U or X of the Federal Reserve Board. Neither
Borrower nor the Guarantor will take or permit to be taken any action which
might cause any Loan Document to violate any regulation of the Federal Reserve
Board.
4.11. Taxes.
All tax returns, reports and statements, including information returns,
required by any Governmental Authority to be filed by Borrower or the Guarantor
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
48
such fine, penalty, interest, late charge or loss has been paid), excluding
Charges or other amounts being contested in accordance with Section 6.2(b).
Proper and accurate amounts have been withheld by Borrower and the Guarantor
from its respective 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. Disclosure
Schedule (4.11 ) sets forth as of the Closing Date those taxable years for which
Borrower or the Guarantor'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 (4.11), neither Borrower nor
Guarantor has executed or filed with the IRS or any other Governmental Authority
any agreement or other document extending, or having the effect of extending,
the period for assessment or collection of any Charges. None of the Borrower or
the Guarantor and their respective predecessors are liable for any Charges: (a)
under any agreement (including any tax sharing agreements) or (b) to Borrower's
or Guarantor's knowledge, as a transferee. As of the Closing Date, neither
Borrower nor Guarantor has agreed or been requested to make any adjustment under
IRC Section 481(a), by reason of a change in accounting method or otherwise,
which would have a Material Adverse Effect.
4.12. ERISA.
(a) Disclosure Schedule (4.12) lists and separately identifies all
Title IV Plans, Multiemployer Plans, ESOPs and Retiree Welfare Plans. 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. Neither
Borrower, Guarantor nor any ERISA Affiliate has failed to make any contribution
or pay any amount due as required by either Section 4~12 of the IRC or Section
302 of ERISA or the terms of any such Plan. Neither Borrower, Guarantor 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 or
the Guarantor to a material tax on prohibited transactions imposed by Section
4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (4.12): (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 of the Guarantor, 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, Guarantor, 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, the
Guarantor or 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.
49
4.13. No Litigation.
No action, claim, lawsuit, demand, investigation or proceeding is now
pending or, to the knowledge of Borrower or the Guarantor, threatened against
Borrower or the Guarantor, before any Governmental Authority or before any
arbitrator or panel of arbitrators (collectively, "Litigation"), (a) which
challenges Borrower's or the Guarantor'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
the Guarantor and which, if so determined, could reasonably be expected to have
a Material Adverse Effect. Except as set forth on Disclosure Schedule (4. 13),
as of the Closing Date there is no Litigation pending or threatened which seeks
damages in excess of $1,000,000 or injunctive relief or alleges criminal
misconduct of Borrower or the Guarantor.
4.14. Brokers.
Except as set forth on Disclosure Schedule (4.14), no broker or finder
acting on behalf of Borrower or the Guarantor brought about the obtaining,
making or closing of the Loans or the Related Transactions, and neither Borrower
nor the Guarantor has any obligation to any Person in respect of any finder's or
brokerage fees in connection therewith.
4.15. Intellectual Property.
As of the Closing Date, Borrower and Guarantor each owns or has rights
to use all Intellectual Property necessary to continue to conduct its business
as now or heretofore conducted by it or proposed to be conducted by it, and each
Patent, Trademark, Copyright and each material License is listed, together with
application or registration numbers, as applicable, in Disclosure Schedule (4.
15) hereto. To the best of its knowledge, Borrower and Guarantor conducts its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person.
4.16. First Priority.
The Liens granted to Administrative 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 Permitted Encumbrances with respect to the
Collateral other than Accounts.
4.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule (4.17), as of the
Closing Date: (i) to the best of Borrower's and Guarantor's knowledge, the Real
Estate is free of contamination from any
51
Hazardous Material except for such contamination that would not result in
Environmental Liabilities which could reasonably be expected to have a Material
Adverse Effect; (ii) neither Borrower nor Guarantor 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, except for such Releases as would not result in
Environmental Liabilities which could reasonably be expected to have a Material
Adverse Effect; (iii) Borrower and the Guarantor are and have been in compliance
with all Environmental Laws, except for such noncompliance which would not
result in Environmental Liabilities which could reasonably be expected to have a
Material Adverse Effect; (iv) Borrower and the Guarantor 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
could reasonably be expected to have a Material Adverse Effect, and all such
Environmental Permits are valid, uncontested and in good standing; (v) neither
Borrower nor the Guarantor 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 Borrower or the
Guarantor which could reasonably be expected to have a Material Adverse Effect,
and neither Borrower nor the Guarantor has permitted any current or former
tenant or occupant of the Real Estate to engage in any such operations; (vi)
there is no Litigation arising under or related to any Environmental Laws,
Environmental Permits or Hazardous Material which seeks damages, penalties,
fines, costs or expenses in excess of $1,000,000 or injunctive relief, or which
alleges criminal misconduct by the Borrower or Guarantor; (vii) no notice has
been received by Guarantor nor the Borrower identifying it as a "potentially
responsible party" or requesting information under CERCLA or analogous state
statutes, and to the knowledge of the Borrower and Guarantor, there are no
facts, circumstances or conditions that may result in Borrower or the Guarantor
being identified as a "potentially responsible party" under CERCLA or analogous
state statutes; and (viii) the Borrower and Guarantor have provided to
Administrative Agent copies of all existing environmental reports and audits in
their possession pertaining to actual or potential Environmental Liabilities, in
each case relating to any Real Estate.
(b) Borrower and each Guarantor hereby acknowledges and agrees that
Administrative Agent (i) is not now, and has not ever been, in control of any of
the Real Estate or any of Borrower's and Guarantor's affairs, and (ii) does not
have the capacity through the provisions of the Loan Documents or otherwise to
influence Borrower's or the Guarantor's conduct with respect to the ownership,
operation or management of any of its Real Estate or compliance with
Environmental Laws or Environmental Permits.
4.18. Insurance.
Disclosure Schedule (4.18) lists all insurance policies of any nature
maintained, as of the Closing Date, for current occurrences by Borrower and
Guarantor, as well as a summary of the terms of each such policy.
51
4.19. Deposit and Disbursement Accounts.
Disclosure Schedule (4.19) lists all banks and other financial
institutions at which Borrower and the Guarantor maintains deposits and/or other
accounts as of the Closing Date, including any disbursement accounts, and such
Schedule correctly identifies the name and address of each depository, the name
in which the account is held, a description of the purpose of the account, and
the complete account number.
4.20. Government Contracts.
Neither Borrower nor the Guarantor is a party to any contract or
agreement with any Governmental Authority involving payments in an aggregate
amount of greater than $250,000, and no Borrower's or Guarantor's Accounts are
subject to the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 3727), or any similar state or local law.
4.21. Customer and Trade Relations.
There exists no actual or, to the knowledge of the Borrower or
Guarantor, threatened termination or cancellation of, or any material adverse
modification or change in: the business relationship of, the Borrower or
Guarantor with any customer or group of customers whose purchases during the
preceding twelve (12) months caused them to be ranked among the ten (10) largest
customers of such Borrower or Guarantor; or the business relationship of the
Borrower or Guarantor with any supplier material to its operations.
4.22. Agreements and Other Documents.
As of the Closing Date, Borrower and Guarantor have provided to
Administrative Agent or its counsel, on behalf of Lenders, accurate and complete
copies (or summaries) of all of the following agreements or documents to which
any it is subject and each of which are listed on Disclosure Schedule (4.22):
supply agreements and purchase agreements which are required to be disclosed by
Borrower under applicable federal securities laws or regulations; any lease of
Equipment having a remaining term of one year or longer and requiring aggregate
rental and other payments in excess of $500,000 per annum; licenses and permits
held by the Borrower and Guarantor, the absence of which could be reasonably
likely to have a Material Adverse Effect; instruments or documents evidencing
Indebtedness of Borrower and Guarantor and any security interest granted by
Borrower and Guarantor with respect thereto; and instruments and agreements
evidencing the issuance of any equity securities, warrants, rights or options to
purchase equity securities of Borrower or Guarantor.
52
4.23. Solvency.
Both before and after giving effect to (a) the Loans to be made or
extended on the Closing Date or such other date as Loans requested hereunder are
made or extended, (b) the disbursement of the proceeds of such Loans pursuant to
the instructions of Borrower, and (c) the payment and accrual of all transaction
costs in connection with the foregoing, Borrower is Solvent.
5. FINANCIAL STATEMENTS AND INFORMATION
5.1. Reports and Notices.
Borrower hereby agrees that from and after the Closing Date and until
the Termination Date, it shall deliver to Administrative 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 B.
5.2. Communication with Accountants.
Borrower authorizes Administrative 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, and
authorizes and shall instruct those accountants and advisors to disclose and
make available to Administrative Agent and each Lender any and all Financial
Statements and other supporting financial documents, schedules and information
relating to the Borrower (including copies of any issued management letters)
with respect to the business, financial condition and other affairs of Borrower
and the Guarantor in a manner consistent with the policies of such accountants
and advisors.
6. AFFIRMATIVE COVENANTS
Borrower and Guarantor, jointly and severally, agrees as to Borrower
and Guarantor (where applicable) that from and after the date hereof and until
the Termination Date:
6.1. Maintenance of Existence and Conduct of Business.
Borrower and Guarantor shall: 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; continue to conduct its business substantially as
now conducted or as otherwise permitted hereunder; at all times maintain,
preserve and protect all of its assets and properties used or useful in the
conduct of its business, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and transact business only in such corporate and trade names
as are set forth in Disclosure Schedule (6.1).
53
6.2. Payment of Obligations.
(a) Subject to Section 6.2(b), Borrower and Guarantor shall pay and
discharge or cause to be paid and discharged promptly all 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 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 and Guarantor may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges or claims described in
Section 6.2(a); provided, that (i) at the time of commencement of any such
contest no Default or Event of Default shall have occurred and be continuing,
(ii) adequate reserves with respect to such contest are maintained on the books
of Borrower, in accordance with GAAP, (iii) such contest is maintained and
prosecuted continuously and with diligence and operates to suspend collection or
enforcement of such Charges or claims or any Lien in respect thereof, (iv) none
of the Collateral becomes subject to forfeiture or loss as a result of such
contest, (v) no Lien shall be imposed to secure payment of such Charges or
claims other than Permitted Encumbrances, (vi) Borrower and Guarantor shall
promptly pay or discharge such contested Charges or claims and all additional
charges, interest, penalties and expenses, if any, and shall deliver to
Administrative Agent evidence acceptable to Administrative Agent of such
compliance, payment or discharge, if such contest is terminated or discontinued
adversely to Borrower or Guarantor or the conditions set forth in this Section
6.2(b) are no longer met, and (vii) Administrative Agent has not advised
Borrower or Guarantor in writing that Administrative Agent reasonably believes
that nonpayment or non-discharge thereof could have or result in a Material
Adverse Effect.
6.3. Books and Records.
Borrower and Guarantor shall keep adequate books and records with
respect to its business activities in which proper entries, reflecting all
financial transactions, are made in accordance with GAAP and on a basis
consistent with the Financial Statements attached as Disclosure Schedule (4.4).
6.4. Insurance: Damage to or Destruction of Collateral.
(a) Borrower and Guarantor shall, at their sole cost and expense,
maintain the policies of insurance described on Disclosure Schedule (4.18) as in
effect on the date hereof in form and with insurers acceptable to Administrative
Agent. If the Borrower or Guarantor at any time or times hereafter shall fail to
obtain or maintain any of the policies of insurance required above or to pay all
premiums relating thereto, Administrative 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 Administrative Agent deems
advisable. Administrative Agent shall have no obligation to obtain insurance for
the Borrower or Guarantor, or pay any premiums therefor. By doing so,
Administrative Agent shall not be deemed to have waived any Default or
54
Event of Default arising from the Borrower's or Guarantor's failure to maintain
such insurance or pay any premiums therefor. All sums so disbursed, including
attorneys' fees, court costs and other charges related thereto, shall be payable
on demand by Borrower and Guarantor to Administrative Agent and shall be
additional Obligations hereunder secured by the Collateral.
(b) Administrative Agent reserves the right at any time upon any change
in the Borrower's or Guarantor's risk profile (including any change in the
product mix maintained by the Borrower or Guarantor or any laws affecting the
potential liability of Borrower or Guarantor) to require additional forms and
limits of insurance to, in Administrative Agent's reasonable opinion, adequately
protect both Administrative Agent's and Lender's interests in all or any portion
of the Collateral and to ensure that Borrower and Guarantor is protected by
insurance in amounts and with coverage customary for its industry. If requested
by Administrative Agent, Borrower and Guarantor shall deliver to Administrative
Agent from time to time a report of a reputable insurance broker, reasonably
satisfactory to Administrative Agent, with respect to its insurance policies.
(c) Borrower and Guarantor shall deliver to Administrative Agent, in
form and substance satisfactory to Administrative Agent, endorsements to (i) all
"All Risk" and business interruption insurance naming Administrative Agent, on
behalf of itself and Lenders, as loss payee, and (ii) all general liability and
other liability policies naming Administrative Agent, on behalf of itself and
Lenders, as additional insured. Borrower and Guarantor irrevocably makes,
constitutes and appoints Administrative Agent (and all officers, employees or
agents designated by Administrative Agent), so long as any Default or Event of
Default shall have occurred and be continuing, as Borrower's and Guarantor's
true and lawful agent and attorney-in-fact for the purpose of making, settling
and adjusting claims under such "All Risk" policies of insurance, endorsing the
name of such Borrower or Guarantor 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. Administrative Agent shall have no duty to exercise any rights or
powers granted to it pursuant to the foregoing power-of-attorney. Borrower and
Guarantor shall promptly notify Administrative Agent of any loss, damage, or
destruction to the Collateral in the amount of $500,000 or more, whether or not
covered by insurance. After deducting from such proceeds the expenses, if any,
incurred by Administrative Agent in the collection or handling thereof,
Administrative Agent may, at its option, apply such proceeds to the reduction of
the Obligations in accordance with Section 2.3(d), or permit or require the
applicable Borrower or Guarantor 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,
(a) if the casualty giving rise to such insurance proceeds would not reasonably
be expected to have a Material Adverse Effect and such insurance proceeds do not
exceed $500,000.00 in the aggregate, Administrative Agent shall permit the
applicable Borrower or Guarantor to replace, restore, repair or rebuild the
property, and (b) if the casualty giving rise to such insurance proceeds would
not reasonably be expected to have a Material Adverse Effect and such insurance
proceeds exceed $500,000.00 in the aggregate, Administrative Agent shall permit
the applicable Borrower or Guarantor to replace, restore, repair or rebuild the
property, provided that if Borrower or Guarantor shall not have
55
completed such replacement, restoration, repair or rebuilding within 180 days of
such casualty, Administrative Agent may apply such insurance proceeds to the
Obligations in accordance with Section 2.3(d). All insurance proceeds which are
to be made available to the Borrower or Guarantor to replace, repair, restore or
rebuild the Collateral shall be applied by Administrative Agent to reduce the
outstanding principal balance of the Revolving Loan of Borrower (which
application shall not result in a permanent reduction of the Revolving Loan
Commitment) and upon such application, Administrative Agent shall establish a
Reserve in an amount equal to the amount of such proceeds so applied or a cash
collateral account subject to a Control Letter. Thereafter, such funds shall be
made available to that Borrower or Guarantor to provide funds to replace,
repair, restore or rebuild the Collateral as follows: (i) Borrower shall request
a Revolving Credit Advance or a release from such cash collateral account be
made to Borrower in the amount requested to be released; (ii) so long as the
conditions set forth in Section 3.2 have been met, Revolving Lenders shall make
such Revolving Credit Advance or release from such cash collateral account; and
(iii) the Reserve established with respect to such insurance proceeds shall be
reduced by the amount of such Revolving Credit Advance. To the extent not used
to replace, repair, restore or rebuild the Collateral, such insurance proceeds
shall be applied in accordance with Section 2.2(d).
6.5. Compliance with Laws.
Borrower and Guarantor shall comply with all federal, state, local and
foreign laws and regulations applicable to it, including without limitation
those relating to licensing, ERISA and labor matters, except to the extent that
the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
6.6. Supplemental Disclosure.
From time to time as may be requested by Administrative 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 and
Guarantor 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 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 Administrative 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.
56
6.7. Intellectual Property.
Each of Borrower and Guarantor will use its best efforts to conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person which could reasonably be expected to
have a Material Adverse Effect.
6.8. Environmental Matters.
Each of Borrower and Guarantor 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 could not reasonably be expected to have a Material Adverse
Effect; (b) implement any and all investigation, remediation, removal and
response actions which are necessary to comply with Environmental Laws and
Environmental Permits pertaining to the presence, generation, treatment,
storage, use, disposal, transportation or Release of any Hazardous Material on,
at, in, under, above, to, from or about any of its Real Estate; (c) notify
Administrative Agent promptly after Borrower or Guarantor 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 in excess of $500,000; and (d) promptly
forward to Administrative Agent a copy of any order, notice, request for
information or any communication or report received by Borrower or Guarantor in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $500,000 in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
violation or Release. If Administrative Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by the Borrower or Guarantor 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,
could reasonably be expected to have a Material Adverse Effect, then each of
Borrower and Guarantor shall, upon Administrative 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' expense, as Administrative Agent may from time to time reasonably
request, which shall be conducted by reputable environmental consulting firms
reasonably acceptable to Administrative Agent and shall be in form and substance
acceptable to Administrative Agent, and (ii) permit Administrative Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Administrative Agent deems reasonably
appropriate, including subsurface sampling of soil and groundwater. Borrower
shall reimburse Administrative Agent for the costs of such audits and tests and
the same will constitute a part of the Obligations secured hereunder.
57
6.9. Landlords' Agreements; Mortgagee Agreements and Bailee Letters.
Each of Borrower and Guarantor shall use its best efforts to obtain a
landlord's agreement, mortgagee agreement or bailee letter, as applicable, from
the lessor of each leased property or mortgagee of owned property or with
respect to any warehouse, processor or converter facility or other location
where Collateral is located, which agreement or letter shall contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or bailee may
assert against the Inventory or Collateral at that location, and shall otherwise
be satisfactory in form and substance to Administrative Agent. Each of Borrower
and Guarantor 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. If the Borrower or
Guarantor obtains an ownership interest in any real property following the
Closing Date, Borrower or Guarantor, as the case may be, shall execute and
deliver all documents and instruments necessary to grant Administrative Agent a
fully perfected first priority security interest in such real property.
6.10. Operating Accounts.
Borrower shall maintain its primary operating and deposit accounts with
Citizens Bank New Hampshire.
6. 11. Further Assurances.
Each of Borrower and Guarantor agrees that it shall, at Borrower's and
Guarantor's expense and upon request of Administrative Agent, duly execute and
deliver, or cause to be duly executed and delivered, to Administrative 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 Administrative Agent to carry
out more effectively the provisions and purposes of this Agreement or any other
Loan Document.
7. NEGATIVE COVENANTS
Borrower and Guarantor, jointly and severally, agree as to each of
Borrower and Guarantor (where applicable) that, without the prior written
consent of Administrative Agent and the Requisite Lenders, from and after the
date hereof until the Termination Date:
7.1. Mergers, Subsidiaries, Etc.
(a) Neither Borrower nor the Guarantor, except as specifically
permitted under subsections (b) and (d) of this Section 7.1 below, shall
directly or indirectly, by operation of law or otherwise, (i) form or acquire
any Subsidiary; (ii) merge with, consolidate with, acquire all or substantially
all of the assets or capital stock of, or otherwise combine with or acquire, any
Person; or (iii) acquire all or substantially all of the assets of any Person.
Borrower may engage
58
in a transaction described in this subsection (a) with the prior written consent
of the Requisite Lenders, subject to Borrower's compliance with subsection (c)
of this Section 7.1 below.
(b) Subject to Borrower's compliance with the provisions of subsection
(c) of this Section 7.1 below, Borrower may engage in transactions described in
subsection (a) of this Section 7.1 above without the prior written consent of
Administrative Agent and the Requisite Lenders if (i) any such single
transaction does not involve consideration of greater than $7,500,000 and (ii)
all such transactions collectively do not involve consideration of greater than
$15,000,000 in the aggregate.
(c) In no event shall Borrower or Guarantor engage in any transaction
described in subsections (a) or (b) of this Section 7.1 above with any Person
unless:
(i) Borrower and Guarantor is then in compliance, and shall
after giving effect to such transaction be in compliance,
with all representations, warranties and covenants under
this Agreement;
(ii) Borrower shall provide to Administrative Agent not less than
ten (10) Business Days prior to closing of the proposed
transaction a pro forma financial covenant compliance
certification which demonstrates compliance with the financial
covenants of Borrower hereunder after giving effect to such
transaction;
(iii) such Person is engaged in the same or a substantially similar
business as that of the Borrower; and
(iv) such Person has twelve (12) months of positive EBITDA for the
fiscal period ending immediately prior to the date of such
transaction.
(d) Notwithstanding the provisions of subsection (a) of this Section
7.1 above, Borrower may form Subsidiaries without the requirement of consent of
Administrative Agent or any of the Lenders and without compliance with the
provisions of subsection (c) of this Section 7.1 above in accordance with the
following provisions:
(i) Borrower may form domestic United States Subsidiaries provided
that (A) the Borrower's investment in any such Subsidiary does
not exceed $5,000, and (B) such Subsidiary does not engage in
any business or engage in any of the transactions described in
subsection (a) of this Section 7.1 above without complying
with the provisions subsections (a), (b) and (c) of this
Section 7.1 above; and
(ii) Borrower may form a Foreign Subsidiary solely for purposes of
conducting business in Europe provided that at no time shall
Borrower's investment in such Foreign Subsidiary exceed
$5,000,000 and such Foreign Subsidiary shall become a
Guarantor hereunder at such time as it is required to do so
under the provisions of Section 2.16 above. Borrower shall
provide written notice to Administrative Agent within ten (10)
Business Days of the formation of a Foreign Subsidiary within
ten (10) Business Days of the formation of a Foreign
Subsidiary.
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7.2. Investments: Loans and Advances.
Except as otherwise expressly permitted by this Section 7.2, neither
Borrower nor the Guarantor shall make or permit to exist any investment in, or
make, accrue or permit to exist loans or advances of money to, any Person,
through the direct or indirect lending of money, holding of securities or
otherwise, except that (a) investments comprised of notes payable, or stock or
other securities issued by Account Debtors to the Borrower or Guarantor 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 $1,000,000; (b) Borrower
may own investment in overnight repurchase obligations issued by Administrative
Agent; (c) Borrower may own any or all of the capital stock of Guarantor and of
any future Subsidiary permitted under the provisions of Section 7.1 above; and
(d) provided that no Event of Default shall have occurred and be continuing and
that Administrative Agent, for itself and the benefit of Lenders, has a first
priority perfected security interest therein pursuant to a Control Letter, and
(x) that if there are outstanding Revolving Credit Advances, the amount of such
investments does not exceed $1,000,000 in the aggregate or (y) that if there are
no outstanding Revolving Credit Advances (in which case the amount of such
investments is not subject to any limitation), Borrower may make and own
investments in (i) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof maturing within
one year from the date of acquisition thereof, (ii) commercial paper maturing no
more than one year from the date of creation thereof and having an investment
grade rating from either Standard & Poor's Ratings Group or Xxxxx'x Investors
Service, Inc., (iii) certificates of deposit maturing no more than one year from
the date of creation thereof issued by commercial banks incorporated under the
laws of the United States of America, each having combined capital, surplus and
undivided profits of not less than $200,000,000 and having a senior unsecured
rating of "A" or better by a nationally recognized rating agency, provided that
the aggregate amount invested in such certificates of deposit shall not at any
time exceed $2,500,000 for any one such certificate of deposit and $5,000,000
for any one such bank, (iv) time deposits, maturing no more than thirty (30)
days from the date of creation thereof with commercial banks or savings and loan
associations each having membership either in the Federal Deposit Insurance
Corporation or in the Federal Savings and Loan Insurance Corporation and in
amounts not exceeding the maximum amounts of insurance thereunder, and (v) any
other type of investment not exceeding $1,000,000 in the aggregate at any time
outstanding.
7.3. Indebtedness.
(a) Neither Borrower nor Guarantor shall create, incur, assume or
permit to exist any Indebtedness, except (without duplication) (i) Indebtedness
secured by purchase money security interests permitted in clause (c) of Section
7.7, (ii) the Loans and the other Obligations, (iii) deferred taxes, (iv)
unfunded pension fund and other employee benefit plan obligations and
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liabilities to the extent they are permitted to remain unfunded under applicable
law, (v) existing Indebtedness described in Disclosure Schedule (7.3) and
refinancing thereof or amendments or modifications thereto 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 to Borrower, the Guarantor, Administrative Agent or
any Lender, as reasonably determined by Administrative Agent, than the terms of
the Indebtedness being refinanced, amended or modified, (vi) Indebtedness
consisting of intercompany loans and advances made by the Borrower to Guarantor,
provided that (A) each obligor of such loans or advances shall have executed and
delivered to the Borrower on the Closing Date, a demand note (collectively, the
"Intercompany Notes") to evidence any such intercompany Indebtedness owing at
any time by Guarantor to Borrower, which Intercompany Notes shall be in form and
substance satisfactory to Administrative Agent and shall be pledged and
delivered to Administrative Agent pursuant to the applicable Security Agreement
as additional collateral security for the Obligations; (B) Borrower and
Guarantor shall record all intercompany transactions on its books and records in
a manner satisfactory to Administrative Agent; (C) at the time any such
intercompany loan or advance is made by the Borrower to Guarantor and after
giving effect thereto, Borrower shall be Solvent; and (D) no Default or Event of
Default would occur and be continuing after giving effect to any such proposed
intercompany loan.
(b) Neither Borrower nor Guarantor shall, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any principal of, premium, if
any, interest or other amount payable in respect of any Indebtedness, other than
(i) the Obligations, (ii) Indebtedness secured by a Permitted Encumbrance if the
asset securing such Indebtedness has been sold or otherwise disposed of in
accordance with Sections 7.8(b), or (iii) other Indebtedness not in excess of
$1,000,000.
7.4. Employee Loans and Affiliate Transactions.
(a) Except as otherwise expressly permitted in this Section 7.4 with
respect to Affiliates, neither Borrower nor Guarantor shall enter into or be a
party to any transaction with Borrower, Guarantor or any Affiliate thereof
except (i) transfers of equipment and sales of inventory between Borrower and
Guarantor in the ordinary course of business; provided that such assets are
physically moved to the premises of the transferee and Borrower continues to be
Solvent after giving effect to any such transfer; and (ii) other transactions in
the ordinary course of and pursuant to the reasonable requirements of Borrower's
and Guarantor's business (but expressly excluding any Restricted Payments except
as expressly permitted in Section 7.14) and, in each case, upon fair and
reasonable terms that are no less favorable to Borrower and Guarantor than would
be obtained in a comparable arm's length transaction with a Person not an
Affiliate of Borrower or Guarantor. In addition, if any such transaction or
series of related transactions involves payments in excess of $1,000,000 in the
aggregate, the terms of these transactions must be disclosed in advance to
Administrative Agent and Lenders. All such transactions existing as of the date
hereof are described on Disclosure Schedule (7.4(a)).
(b) Neither Borrower nor Guarantor shall enter into any lending or
borrowing transaction with any employees of Borrower or the Guarantor, except
loans to their respective employees on
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an arms-length basis in the ordinary course of business consistent with past
practices for travel expenses, relocation costs and similar purposes up to a
maximum of $100,000 to any employee and up to a maximum of $500,000 in the
aggregate at any one time outstanding.
7.5. Capital Structure and Business.
Neither Borrower nor the Guarantor shall (a) make any changes in any of
its business objectives, purposes or operations which could in any way adversely
affect the repayment of the Loans or any of the other Obligations or could
reasonably be expected to result in a Material Adverse Effect, (b) make any
change in its capital structure, including the issuance of any shares of Stock,
warrants or other securities convertible into Stock or any revision of the terms
of its outstanding Stock, except that Borrower may issue shares to Borrower'
employees and other eligible persons upon exercise of options or pursuant to
Borrower's Stock Option Plan, Stock Purchase Plan, and Employee Stock Ownership
Plan, or (c) amend its charter or bylaws in a manner which would adversely
affect Administrative Agent or Lenders or Borrower's or Guarantor's duty or
ability to repay the Obligations. Neither Borrower nor Guarantor shall engage in
any business other than the businesses currently engaged in by it or businesses
reasonably related thereto.
7.6. Guaranteed Indebtedness.
Neither Borrower nor Guarantor shall create, incur, assume or permit to
exist any Guaranteed Indebtedness except (a) by endorsement of instruments or
items of payment for deposit to the general account of the Borrower or the
Guarantor, and (b) for Guaranteed Indebtedness incurred for the benefit of the
Borrower or the Guarantor if the primary obligation is expressly permitted by
this Agreement.
7.7. Liens.
Neither Borrower nor the Guarantor shall create, incur, assume or
permit to exist any Lien on or with respect to its Accounts or any of its other
properties or assets (whether now owned or hereafter acquired) except for (a)
Permitted Encumbrances; (b) Liens in existence on the date hereof and summarized
on Disclosure Schedule (7.7); and (c) Liens created after the date hereof by
conditional sale or other title retention agreements (including Capital Leases)
or in connection with purchase money Indebtedness, with respect to Equipment and
Fixtures acquired by the Borrower or Guarantor in the ordinary course of
business, involving the incurrence of an aggregate amount of purchase money
Indebtedness and Capital Lease Obligations of not more than $1,000,000
outstanding at any one time for all such Liens (provided that such Liens attach
only to the assets subject to such purchase money debt and such Indebtedness is
incurred within twenty (20) days following such purchase and does not exceed
100% of the purchase price of the subject assets). In addition, neither Borrower
nor the Guarantor shall 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 Administrative 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.
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7.8. Sale of Stock and Assets.
Neither Borrower nor the Guarantor shall sell, transfer, convey, assign
or otherwise dispose of any of its properties or other assets, including the
capital Stock of any of its Subsidiaries and 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 a Borrower or Guarantor of
Equipment or Fixtures having a value not exceeding $1,000,000 in any, single
transaction or $3,000,000 in the aggregate in any Fiscal Year. With respect to
any disposition of assets or other properties permitted pursuant to clause (b)
above, Administrative Agent agrees on reasonable prior written notice to release
its Lien on such assets or other properties in order to permit the 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.
7.9. ERISA.
Neither Borrower nor the Guarantor shall, or shall 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.
7.10. Financial Covenants.
Borrower shall not breach or fail to comply with any of the Financial
Covenants (the "Financial Covenants") set forth in Annex C.
7.11. Hazardous Materials.
Neither Borrower nor Guarantor shall 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 violate, or form the basis for Environmental
Liabilities under, any Environmental Laws or Environmental Permits, other than
such violations or Environmental Liabilities which could not reasonably be
expected to have a Material Adverse Effect.
7.12. Sale-Leasebacks.
Neither Borrower nor the Guarantor shall engage in any sale-leaseback,
synthetic lease or similar transaction involving any of its assets.
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7.13. Cancellation of Indebtedness.
Neither Borrower nor the Guarantor shall cancel any claim or debt owing
to it, except for reasonable consideration negotiated on an arms-length basis
and in the ordinary course of its business consistent with past practices.
7.14. Restricted Payments.
Neither Borrower nor the Guarantor shall make any Restricted Payment,
except (a) intercompany loans and advances between Borrower and Guarantor to the
extent permitted by Section 7.3 above; (b) dividends and distributions by
Guarantor to Borrower; and (c) employee loans permitted under Section 7.4(b)
above.
7.15. Change of Corporate Name or Location; Change of Fiscal Year.
Neither Borrower nor the Guarantor shall (a) change its corporate name,
(b) change its corporate domicile, (c) change its fiscal year, or (d) change its
chief executive office, principal place of business, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral, in any case without at least thirty
(30) days prior written notice to Administrative Agent and after Administrative
Agent's written acknowledgment that any reasonable action requested by
Administrative Agent in connection therewith, including to continue the
perfection of any Liens in favor of Administrative Agent, on behalf of Lenders,
in any Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States. Without limiting the
foregoing, neither Borrower nor the Guarantor shall change its name, identity,
corporate domicile, or corporate structure in any manner which might make any
financing or continuation statement filed in connection herewith either
ineffective or seriously misleading within the meaning of the Code except upon
prior written notice to Administrative Agent and Lenders and after
Administrative Agent's written acknowledgment that any reasonable action
requested by Administrative Agent in connection therewith, including to continue
the perfection of any Liens in favor of Administrative Agent, on behalf of
Lenders, in any Collateral, has been completed or taken.
7.16. No Impairment of Intercompany Transfers.
Neither Borrower nor the Guarantor shall directly or indirectly enter
into or become bound by any agreement, instrument, indenture or other obligation
(other than this Agreement and the other Loan Documents) 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 Guarantor to Borrower.
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7.17. No Speculative Transactions.
Neither Borrower nor Guarantor shall 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 to be
purchased by it and the values of foreign currencies receivable or payable by it
and interest swaps, caps or collars.
7.18. Leases.
Neither Borrower nor the Guarantor shall enter into any operating lease
for Equipment or Real Estate, if the aggregate of all such operating lease
payments payable in any Fiscal Year for Borrower on a consolidated basis would
exceed $1,000,000.
8. TERM
8.1. Termination.
The financing arrangements contemplated hereby shall be in effect until
each retroactive Commitment Termination Date, and each of Loans and all other
Obligations incident thereto shall be automatically due and payable in full on
its respective Commitment Termination Date.
8.2. Survival of Obligations Upon Termination of Financing
Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no
termination or cancellation (regardless of cause or procedure) of any financing
arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Borrower or the Guarantor, or the
rights of Administrative Agent and Lenders, relating to any unpaid portion of
the Loans or any other Obligations, due or not due, liquidated, contingent or
unliquidated or any transaction or event occurring prior to such termination, or
any transaction or event, the performance of which is required after the
Commitment Termination Date. Except as otherwise expressly provided herein or in
any other Loan Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Borrower and Guarantor, and all rights of
Administrative 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 12, the
payment obligations under Sections 2.12 and 2.13, and the indemnities contained
in the Loan Documents shall survive the Termination Date.
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9. EVENTS OF DEFAULT: RIGHTS AND REMEDIES
9.1. 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) The Borrower (i) fails to make any payment of principal of or
interest on any of the Loans or any of the other Obligations when due and
payable, whether by acceleration or otherwise, or (ii) fails to pay or reimburse
Administrative Agent or Lenders for any Fees payable or any expenses
reimbursable hereunder or under any other Loan Document within ten (10) Business
Days following Administrative Agent's notice of or demand for such reimbursement
or payment of such Fees or expenses.
(b) Borrower or the Guarantor shall fail or neglect to perform, keep or
observe any of the provisions of Sections 2.4, 2.6, 6.4 or 7, or any of the
provisions set forth in Annex C, respectively.
(c) Borrower or the Guarantor shall fail or neglect to perform, keep or
observe any of the provisions of Section 5 or any provisions set forth in Annex
B, respectively, and the same shall remain unremedied for five (5) Business Days
or more after notice to Borrower by Administrative Agent.
(d) Borrower or the Guarantor 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 9.1) and the same shall remain unremedied for thirty (30) days
or more after notice to Borrower by Administrative Agent.
(e) A default or breach shall occur under any other agreement, document
or instrument to which Borrower or the Guarantor 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 Guarantor or the Borrower in excess of $500,000 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 $2,000,000 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) Any information, representation or warranty herein or in any Loan
Document or in any written statement, report, financial statement or certificate
made or delivered to Administrative Agent or any Lender by Borrower or the
Guarantor is untrue or incorrect in any material respect as of the date when
made or deemed made.
(g) Assets of Borrower or the Guarantor with a fair market value of
$1,000,000 or more shall be seized, levied upon or subjected to a writ or
distress warrant, or come within the
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possession of any receiver, trustee, custodian or assignee for the benefit of
creditors of the Borrower and such condition continues for thirty (30) days or
more.
(h) A case or proceeding shall have been commenced against Borrower or
the Guarantor seeking a decree or order in respect of Borrower or the Guarantor
(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 examiner (or similar official) for Borrower or the Guarantor or of
any substantial part of any such Person's assets, or (iii) ordering the winding
up or liquidation of the affairs of Borrower or the Guarantor, 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.
(i) Borrower or the Guarantor (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 examiner (or similar official) of
Borrower or the Guarantor or of any substantial part of any such Person's
assets, (iii) shall make an assignment for the benefit of creditors, (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.
(j) An attachment, or a final judgment or judgments for the payment of
money, in excess of $1,000,000 in the aggregate at any time outstanding shall be
rendered against Borrower, the Guarantor, or any of their assets 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.
(k) 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 or the Guarantor 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.
(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 or Guarantor generating more than 10% of
Borrower' consolidated revenues for the Fiscal Year preceding such event and
such cessation or curtailment continues for more than thirty (30) days.
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9.2. Remedies.
(a) If any Event of Default shall have occurred and be continuing or if
a Default shall have occurred and be continuing and Administrative Agent or
Requisite Lenders shall have determined not to make any Advances so long as that
specific Default is continuing, Administrative Agent may (and at the written
request of the Requisite Lenders shall), without notice, suspend this facility
with respect to further Advances whereupon any further Advances shall be made or
extended in Administrative Agent's sole discretion (or in the sole discretion of
the Requisite 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, Administrative 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 to the Default Rate.
(b) If any Event of Default shall have occurred and be continuing,
Administrative Agent may (and at the written request of the Requisite Lenders
shall), without any additional notice (other than as described in clause (iv)
below), (i) terminate this facility with respect to further Advances; (ii)
declare all or any portion of the Obligations, including all or any portion of
any Loan to be forthwith due and payable, all without presentment, demand,
protest or further notice of any kind, all of which are expressly waived by
Borrower and Guarantor; (iii) exercise any rights and remedies provided to
Administrative 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 9.1(g), (h) or (i), all
of the Obligations, including the aggregate Revolving Loan, shall become
immediately due and payable without declaration, notice or demand by any Person;
and (iv) with fifteen (15) days prior written notice to Borrower, have appointed
a receiver (or similar official) for the Borrower and Borrower hereby
irrevocably consents to any such appointment.
9.3. Waivers by Borrower and Guarantor.
Except as otherwise provided for in this Agreement or by applicable
law, after the occurrence of an Event of Default, Borrower and each Guarantor
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 (other than under this
Agreement), documents, instruments, chattel paper and guaranties at any time
held by Administrative Agent on which Borrower or the Guarantor may in any way
be liable, and hereby ratifies and confirms whatever Administrative Agent may do
in this regard, (b) all rights to notice and a hearing prior to Administrative
Agent's taking possession or control of, or to Administrative Agent's replevy,
attachment or levy upon, the Collateral or any bond or security which might be
required by any court prior to allowing Administrative Agent to exercise any of
its remedies, and (c) the benefit of all valuation, appraisal, marshaling and
exemption laws.
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10. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
10.1. Assignment and Participations.
(a) Any Lender may sell participations in, or assign at any time or
times, the Loan Documents, Loans, 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 Administrative Agent and
Borrower (which shall not be unreasonably withheld or delayed and which consent
shall not be required after an Event of Default) and the execution of an
assignment agreement (an "Assignment Agreement") substantially in the from
attached hereto as Exhibit 10.1 (a) and otherwise in form and substance
satisfactory to, and acknowledged by, Administrative Agent; (ii) be conditioned
on such assignee Lender representing to the assigning Lender and Administrative
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 Administrative Agent of an assignment
fee of $3,500.00. In the case of an assignment by a Lender under this Section
10.1, 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 date of such
assignment. Borrower and Guarantor 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 Administrative Agent or any Lender assigns or otherwise transfers
all or any part of a Note, Administrative Agent or any such Lender shall so
notify Borrower and Borrower shall, upon the request of Administrative Agent or
such Lender, execute new Notes in exchange for the Notes being assigned.
Notwithstanding the foregoing provisions of this Section 10.1 (a), any Lender
may at any time pledge or assign all or any portion of such Lender's rights
under this Agreement and the other Loan Documents to a Federal Reserve Bank;
provided, however, that no such pledge or assignment 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 other Loan
Documents). Solely for purposes of Sections 2.10, 2.12, 2.13 and 10.8, Borrower
acknowledges
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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 Administrative 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 10.1, no Lender shall,
as between Borrower and that Lender, or Administrative 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 and Guarantor shall assist any Lender permitted to sell
assignments or participations under this Section 10.1 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, if
requested by Administrative Agent, the preparation of informational materials
for, and the participation of management in meetings with, potential assignees
or participants. Borrower and Guarantor shall certify the correctness,
completeness and accuracy of all descriptions of the Borrower and Guarantor and
their affairs contained in any selling materials provided by them and all other
information provided by them and included in such materials.
(e) A Lender may furnish any information concerning Borrower and
Guarantor 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 12.8.
(f) 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 2.13(a),
increased costs under Section 2.13(b), or an inability to fund LIBOR Loans or
BAR Loans under Section 2.13(c).
10.2. Appointment of Administrative Agent.
Citizens Bank New Hampshire is hereby appointed to act on behalf of all
Lenders as Administrative Agent under this Agreement and the other Loan
Documents. The provisions of this Section 10.2 are solely for the benefit of
Administrative Agent and Lenders and neither Guarantor, the 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, Administrative 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 the Borrower,
Guarantor, or any other Person. Administrative Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
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other Loan Documents. The duties of Administrative Agent shall be mechanical and
administrative in nature and Administrative 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 Administrative 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 solely
caused by its or their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
If Administrative Agent shall request instructions from Requisite
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 Administrative Agent shall be entitled to refrain from such act or taking
such action unless and until Administrative Agent shall have received
instructions from Requisite Lenders or all affected Lenders, as the case may be,
and Administrative Agent shall not incur liability to any Person by reason of so
refraining. Administrative 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 Administrative 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 Administrative Agent, expose Administrative Agent to Environmental
Liabilities, or (c) if Administrative 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 Administrative Agent as a result of Administrative Agent acting or
refraining from acting hereunder or under any other Loan Document in accordance
with the instructions of Requisite Lenders or all affected Lenders, as
applicable.
10.3. Administrative Agent's Reliance. Etc.
Neither Administrative 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, Administrative Agent: (a) may treat the payee of
any Note as the holder thereof until Administrative Agent receives written
notice of the assignment or transfer thereof signed by such payee and in form
satisfactory to Administrative 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 the Guarantor or to inspect the Collateral
(including the books and records) of the Borrower; (e) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement
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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 e-mail,
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
10.4. Citizens Bank New Hampshire and Affiliates.
With respect to its Commitments hereunder, Citizens Bank New Hampshire
shall have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
Administrative Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include Citizens Bank New Hampshire in its individual
capacity. Citizens Bank New Hampshire and its Affiliates may lend money to,
invest in, and generally engage in any kind of business with Guarantor and the
Borrower, any of their Affiliates and any Person who may do business with or own
securities of Guarantor, the Borrower or any such Affiliate, all as if Citizens
Bank New Hampshire were not Administrative Agent and without any duty to account
therefor to Lenders. Citizens Bank New Hampshire and its Affiliates may accept
fees and other consideration from Guarantor and the Borrower for services in
connection with this Agreement or otherwise without having to account for the
same to Lenders. Each Lender acknowledges the potential conflict of interest
between Citizens Bank New Hampshire as a Lender holding disproportionate
interests in the Loans and Citizens Bank New Hampshire as Administrative Agent.
10.5. Lender Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon Administrative Agent or any other Lender and based on the
Financial Statements referred to in Section 4.4 and such other documents and
information as it has deemed appropriate, made its own credit and financial
analysis of the Borrower and its own decision to enter into this Agreement. Each
Lender also acknowledges that it will, independently and without reliance upon
Administrative Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this 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.
10.6. Indemnification.
Lenders agree to indemnify Administrative Agent (to the extent not
reimbursed by the Borrower and without limiting the obligations of the 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
Administrative Agent in any way relating to or arising out of this Agreement or
any other Loan Document or any action taken or omitted by Administrative Agent
in connection therewith; provided, however,
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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 Administrative Agent's gross negligence or willful
misconduct. Without limiting the foregoing, each Lender agrees to reimburse
Administrative Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by Administrative 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 Administrative Agent is not reimbursed for such expenses by the
Borrower.
10.7. Successor Administrative Agent.
Administrative 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, the Requisite Lenders shall have the right to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Requisite Lenders and shall have accepted such
appointment within thirty (30) days after the resigning Administrative Agent's
giving notice of resignation, then the resigning Administrative Agent may, on
behalf of Lenders, appoint a successor Administrative Agent, which shall be a
Lender, if a Lender is willing to accept such appointment, or otherwise shall be
a commercial bank or financial institution or a subsidiary of a commercial bank
or financial institution if such commercial bank or financial institution is
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $1,000,000,000. If no
successor Administrative Agent has been appointed pursuant to the foregoing by
the 30th day after the date such notice of resignation was given by the
resigning Administrative Agent, such resignation shall become effective and the
Requisite Lenders shall thereafter perform all the duties of Administrative
Agent hereunder until such time, if any, as the Requisite Lenders appoint a
successor Administrative Agent as provided above. Any successor Administrative
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
Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the resigning Administrative Agent.
Upon the earlier of the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent or the effective date of the
resigning Administrative Agent's resignation, the resigning Administrative Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents, except that any indemnity rights or other rights in favor
of such resigning Administrative Agent shall continue. After any resigning
Administrative Agent's resignation hereunder, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Administrative Agent under this Agreement and the other Loan
Documents. Administrative Agent may be removed at the written direction of the
holders (other than Administrative Agent) of two-thirds or more of the
Commitments (excluding Administrative Agent's Commitment); provided that in so
doing, such Lenders shall be deemed to have waived and released any and all
claims they may have against Administrative Agent.
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10.8. 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, each Lender and each holder of
any Note is hereby authorized at any time or from time to time, without notice
to Borrower, the Guarantor 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 or the
Guarantor (regardless of whether such balances are then due to Borrower or
Guarantor) 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 or the
Guarantor 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. Each Lender's obligation under
this Section 10.8 shall be in addition to and not limitation of its obligations
to purchase a participation in an amount equal to its Pro Rata Share of the
Swing Line Loans under Section 2.1. Borrower and Guarantor agree, 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.
10.9. Advances; Payments; Non-Funding Lenders; Information: Actions in
Concert.
(a) Advances: Payments. (i) Revolving Lenders shall refund or
participate in the Swing Line Loan in accordance with clauses (iii) and (iv) of
Section 2.1 (c). If the Swing Line Lender declines to make a Swing Line Loan or
if Swing Line Availability is zero, Administrative Agent shall notify Revolving
Lenders, promptly after receipt of a Notice of Revolving Credit Advance and in
any event prior to 4:00 p.m. (Manchester, New Hampshire time) on the date such
Notice of Revolving Advance is received, by e-mail, telecopy, telephone or other
similar form of transmission. Each Revolving Lender shall make the amount of
such Lender's Pro Rata Share of each Revolving Credit Advance available to
Administrative Agent in same day funds by wire transfer to Administrative
Agent's account as set forth in Annex D not later than 4:00 p.m. (Manchester,
New Hampshire time) on the requested funding date, in the case of a Prime Rate
Loan and not later than 10:00 a.m. (Manchester, New Hampshire time) on the
requested funding date in the case of a LIBOR Loan. After receipt of such wire
transfers (or, in the Administrative
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Agent's sole discretion, before receipt of such wire transfers), subject to the
terms hereof, Administrative Agent shall make the requested Revolving Credit
Advance to the Borrower. All payments by each Revolving Lender shall be made
without setoff, counterclaim or deduction of any kind.
(ii) Each Business Day (each, a "Settlement Date"),
Administrative Agent will advise each Lender by e-mail, telephone or telecopy of
the amount of such Lender's Pro Rata Share of principal, interest and Fees paid
for the benefit of Lenders with respect to each applicable Loan. Provided that
such Lender has made all payments required to be made by it and has purchased
all participations required to be purchased by it under this Agreement and the
other Loan Documents as of such Settlement Date, Administrative Agent will pay
to each Lender such Lender's Pro Rata Share of principal, interest and Fees paid
by Borrower since the previous Settlement Date for the benefit of that Lender on
the Loans held by it. Such payments shall be made by wire transfer to such
Lender's account (as specified by such Lender in Annex D or the applicable
Assignment Agreement) not later than 1:00 p.m. (Manchester, New Hampshire time)
on the next Business Day following each Settlement Date.
(b) Availability of Lender's Pro Rata Share. Administrative Agent may
assume that each Revolving Lender will make its Pro Rata Share of each Revolving
Credit Advance available to Administrative Agent on each funding date. If such
Pro Rata Share is not, in fact, paid to Administrative Agent by such Revolving
Lender when due, Administrative 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 Administrative Agent's demand, Administrative Agent shall
promptly notify Borrower and Borrower shall immediately repay such amount to
Administrative Agent. Nothing in this Section 10.9(b) or elsewhere in this
Agreement or the other Loan Documents shall be deemed to require Administrative
Agent to advance funds on behalf of any Revolving Lender or to relieve any
Revolving Lender from its obligation to fulfill its Commitments hereunder or to
prejudice any rights that Borrower may have against any Revolving Lender as a
result of any default by such Revolving Lender hereunder. To the extent that
Administrative Agent advances funds to the Borrower on behalf of any Revolving
Lender and is not reimbursed therefor on the same Business Day as such Advance
is made, Administrative 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 Administrative 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 Administrative Agent from Borrower and such
related payment is not received by Administrative Agent, then Administrative
Agent will be entitled to recover such amount from such Lender on demand without
set-off, counterclaim or deduction of any kind.
(ii) If Administrative Agent determines at any time that any amount
received by Administrative Agent under this Agreement must be returned to the
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, Administrative Agent will not be
75
required to distribute any portion thereof to any Lender. In addition, each
Lender will repay to Administrative Agent on demand any portion of such amount
that Administrative Agent has distributed to such Lender, together with interest
at such rate, if any, as Administrative Agent is required to pay to the Borrower
or such other Person, without set-off, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Revolving Lender (such
Revolving Lender, a "Non-Funding Lender") to make any Revolving Credit Advance
or to purchase any participation in any Swing Line Loan to be made or purchased
by it on the date specified therefor shall not relieve any other 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 Administrative Agent shall be responsible for the failure
of any Non-Funding Lender to make an Advance to be made, or to purchase a
participation to be purchased, by such Non-Funding Lender. 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 Lenders" hereunder) for any voting or
consent rights under or with respect to any Loan Document.
(e) Dissemination of Information. Administrative Agent will use
reasonable efforts to provide Lenders with any notice of Default or Event of
Default received by Administrative Agent from, or delivered by Administrative
Agent to, the Borrower, with notice of any Event of Default of which
Administrative Agent has actually become aware and with notice of any action
taken by Administrative Agent following any Event of Default; provided, however,
that Administrative Agent shall not be liable to any Lender for any failure to
do so, except to the extent that such failure is attributable solely to
Administrative Agent's gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction. Lenders acknowledge that
Borrower are required to provide Financial Statements to Lenders in accordance
with Annex B hereto and agree that Administrative 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 Administrative 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 Administrative Agent.
11. SUCCESSORS AND ASSIGNS
11.1. Successors and Assigns.
This Agreement and the other Loan Documents shall be binding on and
shall inure to the benefit of Borrower, Guarantor, Administrative Agent, Lenders
and their respective successors
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and assigns (including, in the case of Borrower or the Guarantor, a
debtor-in-possession on behalf of Borrower or such Guarantor), except as
otherwise provided herein or therein. Neither Borrower nor the Guarantor may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Administrative Agent and Requisite Lenders.
Any such purported assignment, transfer, hypothecation or other conveyance by
Borrower or the Guarantor without the prior express written consent of
Administrative Agent and Requisite Lenders shall be void. The terms and
provisions of this Agreement are for the purpose of defining the relative rights
and obligations of Borrower, Guarantor, Administrative 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.
12. MISCELLANEOUS
12.1. 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 12.2 below. Any letter of
interest, commitment letter, and/or fee letter (other than the Citizens Bank New
Hampshire fee letter) between Borrower, the Guarantor and Administrative 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.
12.2. Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by
Administrative 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 the Borrower or Guarantor therefrom, shall in any event be effective unless
the same shall be in writing and signed by Administrative Agent, Borrower and
Guarantor, and by Requisite 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 3.2 to the making of any Loan shall be
effective unless the same shall be in writing and signed by Administrative
Agent, Requisite Lenders, Borrower and Guarantor. Notwithstanding anything
contained in this Agreement to the contrary, no waiver or consent with respect
to any Default (if in connection therewith Administrative Agent or Requisite
Lenders, as the case may be, have exercised its or their right to suspend the
making or incurrence of further Advances pursuant to Section9.2(a)) or any Event
of Default shall be effective for purposes of the conditions precedent to the
making of Loans set forth in Section 3.2 unless the same shall be in writing and
signed by Administrative Agent, Requisite Lenders, Borrower and Guarantor.
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(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by Administrative 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 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, permit the Borrower to sell or otherwise dispose of
any Collateral with a value exceeding $100,000 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)
terminate or release the guaranty of Guarantor with respect to the Obligations
of Borrower; and (viii) amend or waive this Section 12.2 or the definitions of
the terms "Requisite Lenders" insofar as such definitions affect the substance
of this Section 12.2. Furthermore, no amendment, modification, termination or
waiver affecting the rights or duties of Administrative Agent under this
Agreement or any other Loan Document shall be effective unless in writing and
signed by Administrative Agent, 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 Administrative 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 or the Guarantor in any
case shall entitle Borrower or Guarantor 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 12.2
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 Lenders is obtained, or
(iii) requiring the consent of Requisite Lenders, but the consent of
Requisite Lenders is not obtained,
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then, so long as Administrative Agent is not a Non-Consenting Lender, at
Borrower's request, Administrative Agent or a Person acceptable to
Administrative Agent shall have the right with Administrative Agent's consent
and in Administrative 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 Administrative Agent's request, sell and assign to
Administrative 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 indefeasible payment in full in cash and performance of all of
the Obligations (other than indemnification Obligations under Section 2),
termination of the Commitments and a release of all claims against
Administrative 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, Administrative
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.
12.4. Fees and Expenses.
Borrower shall reimburse Administrative 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 loan counsel,
advisors, consultants and auditors retained in connection with the Loan
Documents and advice in connection therewith). Borrower shall reimburse
Administrative Agent (and, with respect to clauses (c), (d) and (e) 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 Administrative Agent of the proceeds of the Loans;
(b) any amendment, modification or waiver of, or consent with respect
to, any of the Loan Documents or Related Transactions 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 Administrative Agent, any Lender, the Borrower,
Guarantor, 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 any or all of the Borrower, Guarantor, or any other Person that may be
obligated to Administrative 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 Administrative Agent, such reimbursement shall be
limited to one counsel for all such Lenders;
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(d) any attempt to enforce any remedies of Administrative Agent against
any or all of the Borrower, Guarantor, or any other Person that may be obligated
to Administrative 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 Administrative 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 to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Borrower or Guarantor, or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral (provided
that with respect to field audits or other access reviews pursuant to Section
2.11 conducted while there are no outstanding Events of Default, Borrower shall
only be obligated to reimburse Administrative Agent for expenses incurred with
respect to one (1) such field audit per Fiscal Year); including all attorneys'
and other professional and service providers' fees arising from such services,
including those in connection with any appellate proceedings; and all 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 12.3 shall be payable, on demand, by Borrower to
Administrative Agent. Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: fees, costs and expenses of
accountants, environmental advisors, appraisers, field auditors, 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.
12.4. No Waiver.
Administrative Agent's or any Lender's failure, at any time or times,
to require strict performance by the Guarantor or Borrower of any provision of
this Agreement and any of the other Loan Documents shall not waive, affect or
diminish any right of Administrative Agent or such Lender 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 12.2, none of the
undertakings, agreements, warranties, covenants and representations of Guarantor
or the Borrower contained in this Agreement or any of the other Loan Documents
and no Default or Event of Default by Guarantor or the Borrower shall be deemed
to have been suspended or waived by Administrative 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 Administrative Agent and the applicable required
Lenders, and directed to Guarantor and Borrower specifying such suspension or
waiver.
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12.5. Remedies.
Administrative Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and non-exclusive of any other rights and remedies
which Administrative 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.
12.6. 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.
12.7. 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.
12.8. Confidentiality.
Administrative Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Administrative Agent or such
Lender applies to maintaining the confidentiality of its own confidential
information) to maintain as confidential all confidential information provided
to them by the Borrower and designated as confidential for a period of two (2)
years following receipt thereof, except that Administrative Agent and any Lender
may disclose such information (a) to Persons employed or engaged by
Administrative Agent or such Lender in evaluating, approving, structuring or
administering the Loans and the Commitments; (b) to any bona fide assignee or
participant or potential assignee or participant that has agreed to comply with
the covenant contained in this Section 12.8 (and any such bona fide assignee or
participant or potential assignee or participant may disclose such information
to Persons employed or engaged by them as described in clause (a) above); (c) as
required or requested by any Governmental Authority or reasonably believed by
Administrative Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, in the opinion of
Administrative Agent's or such Lender's counsel, required by law; (e) in
connection with the exercise of any right or remedy under the Loan Documents or
in connection with any Litigation to which Administrative Agent or such Lender
is a party; or (f) which ceases to be confidential through no fault of
Administrative Agent or such Lender.
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12.9. 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 HAMPSHIRE APPLICABLE
TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE
UNITED STATES OF AMERICA. BORROWER AND GUARANTOR HEREBY CONSENT AND AGREE THAT
THE STATE OR FEDERAL COURTS LOCATED IN HILLSBOROUGH COUNTY, CITY OF MANCHESTER,
NEW HAMPSHIRE SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
OR DISPUTES BETWEEN THE BORROWER, GUARANTOR, ADMINISTRATIVE 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 ADMINISTRATIVE AGENT, LENDERS, GUARANTOR AND THE BORROWER
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT
LOCATED OUTSIDE OF HILLSBOROUGH COUNTY, CITY OF MANCHESTER, NEW HAMPSHIRE AND,
PROVIDED, FURTHER NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE ADMINISTRATIVE 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
ADMINISTRATIVE AGENT. BORROWER AND GUARANTOR EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND GUARANTOR AND BORROWER HEREBY WAIVE ANY OBJECTION WHICH GUARANTOR OR
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. GUARANTOR AND BORROWER
HEREBY WAIVE 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
GUARANTOR OR BORROWER AT THE ADDRESS SET FORTH IN ANNEX E OF THIS AGREEMENT AND
THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF GUARANTOR'S
OR BORROWER'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S.
MAILS, PROPER POSTAGE PREPAID.
12.10. 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
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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 12. 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 E 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 Administrative
Agent) designated on Annex E to receive copies shall in no way adversely affect
the effectiveness of such notice, demand, request, consent, approval,
declaration or other communication.
12.11. 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.
12.12. Counterparts.
This Agreement may be executed in any number of separate counterparts,
each of which shall collectively and separately constitute one agreement.
12.13. 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 ADMINISTRATIVE AGENT, LENDERS, BORROWER AND THE GUARANTOR
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.
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12.14. Reinstatement.
This Agreement shall remain in full force and effect and continue to be
effective should any petition be filed by or against Borrower or the Guarantor
for liquidation or reorganization, should Borrower or the Guarantor 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 or the Guarantor'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.
12.15. 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 12.9 and
12.13, with its counsel.
12.16. 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.
12.17. Joint and Several Obligations.
The Revolving Loan, the Term Loan, Swing Line Loan, and the other
Obligations shall constitute the joint and several obligations of the Borrower
and Guarantor.
13. INTEREST RATE PROTECTION AGREEMENTS.
From time to time hereafter, the Borrower may enter into other Interest
Rate Protection Agreements with the Administrative Agent or any Lender (or
Affiliates thereof) and the obligations of the Borrower under all such Interest
Rate Protection Agreements shall be secured pari passu with the Loans and other
Obligations.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
BORROWER:
PRESSTEK, INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
----------------------------- --------------------------------
Witness Xxxxx X. Xxxxx,Vice President -
Finance/Chief Financial Officer
GUARANTOR:
LASERTEL INC.
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxx
----------------------------- --------------------------------
Witness Xxxxx X. Xxxxx,Vice President -
Finance/Chief Financial Officer
ADMINISTRATIVE AGENT:
CITIZENS BANK NEW HAMPSHIRE
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- --------------------------------
Witness Xxxxxxx X. Xxxxxxxx, Vice President
DOCUMENTATION AGENT:
KEYBANK National Association
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxx
----------------------------- --------------------------------
Witness Xxxx X. Xxxxxxx,
Senior Vice President
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LENDERS:
CITIZENS BANK NEW HAMPSHIRE
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------- --------------------------------
Witness Xxxxxxx X. Xxxxxxxx, Vice President
KEYBANK National Association
/s/ Xxxxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxx
----------------------------- --------------------------------
Witness Xxxx X. Xxxxxxx,
Senior Vice President
ANNEX C (SECTION 7.10)
----------------------
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) Minimum Fixed Charge Coverage Ratio. Borrower shall have
on a consolidated basis with its Subsidiaries at the end of each Fiscal Quarter
and Fiscal Year, a Fixed Charge Coverage Ratio for the four (4) Fiscal Quarters
then ended of not less than 1.5:1.
(b) Maximum Funded Debt to EBITDA Ratio. Borrower shall have
on a consolidated basis with its Subsidiaries at the end of each Fiscal Quarter
and Fiscal Year, a Funded Debt to EBITDA Ratio for the four (4) Fiscal Quarters
then ended of not greater than 2.5:1.
(c) Minimum Tangible Capital Base. Borrower shall have on a
consolidated basis with its Subsidiaries at the end of each Fiscal Quarter and
Fiscal Year, a Tangible Capital Base of not less than $68,000,000. As of the end
of each Fiscal Year commencing December 31, 2003, and as of the end of each of
Borrower's second Fiscal Quarter in each Fiscal Year, the minimum Tangible
Capital Base requirement hereunder shall increase (but on no event shall it
decrease) by an amount equal to fifty percent (50%) of the amount of Borrower's
Net Income for the six (6) month period then ending. Such increases to the
minimum Tangible Capital Base requirement hereunder shall be cumulative and
shall be carried forward and included in the minimum Tangible Capital Base
requirement for each subsequent Fiscal Quarter and Fiscal Year, subject to
further increase in accordance with the provisions of this paragraph (c).
(d) Current Ratio. Borrower shall have on a consolidated basis
with its Subsidiaries at the end of each Fiscal Quarter and Fiscal Year, a
Current Ratio of not less than 1.2:1.
Unless otherwise specially 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 convenants, standards or terms used in the Agreement any other Loan
Document, then Borrower, Administrative 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 financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that
Annex Page 10
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 principals required by the promulgation of any rule, regulation,
pronouncement or opinion by the Financial Accounting Standard 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 any 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 for the in FASB 109, including the establishment of
reserves pursuant thereto any subsequent reversal (8n whole or in part) of such
reserves; and (d) the reversal of any reserves established as a result of
purchase accounting adjustments. All such adjustment 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 Administrative 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 given effect to the
implementation of such Accounting Change. If Administrative 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 other Loan
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change.
Annex Page 11
