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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of February 7, 2003
Among
STANDARD MOTOR PRODUCTS, INC.,
MARDEVCO CREDIT CORP., and
STANRIC, INC.,
as Borrowers,
THE OTHER CREDIT PARTIES SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender,
BANK OF AMERICA, N.A.,
as Lender and Syndication Agent,
and
GMAC COMMERICAL FINANCE LLC (as successor by
merger to GMAC Commercial Credit LLC),
as Lender and as Documentation Agent
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TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT.............................................................................2
1.1. Credit Facilities...............................................................................2
1.2. Letters of Credit...............................................................................6
1.3. Prepayments.....................................................................................6
1.4. Use of Proceeds.................................................................................8
1.5. Interest and Applicable Margins.................................................................8
1.6. Eligible Accounts..............................................................................12
1.7. Eligible Inventory.............................................................................15
1.8. Cash Management Systems........................................................................16
1.9. Fees...........................................................................................16
1.10. Receipt of Payments............................................................................18
1.11. Application and Allocation of Payments.........................................................18
1.12. Loan Account and Accounting....................................................................19
1.13. Indemnity......................................................................................19
1.14. Access ......................................................................................20
1.15. Taxes..........................................................................................21
1.16. Capital Adequacy; Increased Costs; Illegality..................................................21
1.17. Single Loan....................................................................................23
2. CONDITIONS PRECEDENT..................................................................................23
2.1. Conditions to the Initial Loans................................................................23
2.2. Further Conditions to Each Loan................................................................24
2.3. Conditions to Acquisition Facility.............................................................25
3. REPRESENTATIONS AND WARRANTIES........................................................................25
3.1. Corporate Existence; Compliance with Law.......................................................25
3.2. Executive Offices, Collateral Locations, FEIN..................................................26
3.3. Corporate Power, Authorization, Enforceable Obligations........................................26
3.4. Financial Statements and Projections...........................................................26
3.5. Material Adverse Effect........................................................................27
3.6. Ownership of Property; Liens...................................................................27
3.7. Labor Matters..................................................................................28
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness......................28
3.9. Government Regulation..........................................................................29
3.10. Margin Regulations.............................................................................29
3.11. Taxes..........................................................................................29
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3.12. ERISA..........................................................................................30
3.13. No Litigation..................................................................................30
3.14. Brokers........................................................................................31
3.15. Intellectual Property..........................................................................31
3.16. Full Disclosure................................................................................31
3.17. Environmental Matters..........................................................................31
3.18. Insurance......................................................................................32
3.19. Deposit and Disbursement Accounts..............................................................32
3.20. Government Contracts...........................................................................32
3.21. Customer and Trade Relations...................................................................33
3.22. Agreements and Other Documents.................................................................33
3.23. Solvency.......................................................................................33
3.24. Subordinated Debt..............................................................................33
4. FINANCIAL STATEMENTS AND INFORMATION..................................................................34
4.1. Reports and Notices............................................................................34
4.2. Communication with Accountants.................................................................34
5. AFFIRMATIVE COVENANTS.................................................................................34
5.1. Maintenance of Existence and Conduct of Business...............................................34
5.2. Payment of Charges.............................................................................34
5.3. Books and Records..............................................................................35
5.4. Insurance; Damage to or Destruction of Collateral..............................................35
5.5. Compliance with Laws...........................................................................37
5.6. Supplemental Disclosure........................................................................37
5.7. Intellectual Property..........................................................................37
5.8. Environmental Matters..........................................................................38
5.9. Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate Purchases..........38
5.10. Further Assurances.............................................................................39
6. NEGATIVE COVENANTS....................................................................................39
6.1. Mergers, Subsidiaries, Etc.....................................................................39
6.2. Investments; Loans and Advances................................................................42
6.3. Indebtedness...................................................................................43
6.4. Employee Loans and Affiliate Transactions......................................................44
6.5. Capital Structure and Business.................................................................44
6.6. Guaranteed Indebtedness........................................................................44
6.7. Liens..........................................................................................45
6.8. Sale of Stock and Assets.......................................................................45
6.9. ERISA..........................................................................................46
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6.10. Financial Covenants............................................................................46
6.11. Hazardous Materials............................................................................46
6.12. Sale-Leasebacks................................................................................46
6.13. Cancellation of Indebtedness...................................................................46
6.14. Restricted Payments............................................................................46
6.15. Change of Corporate Name or Location; Change of Fiscal Year....................................47
6.16. No Impairment of Intercompany Transfers........................................................47
6.17. No Speculative Transactions....................................................................47
6.18. Leases; Real Estate Purchases..................................................................47
6.19. Changes Relating to Subordinated Debt; Material Contracts......................................48
6.20. Inactive Subsidiaries..........................................................................48
7. TERM..................................................................................................48
7.1. Termination....................................................................................48
7.2. Survival of Obligations Upon Termination of Financing Arrangements.............................48
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES................................................................48
8.1. Events of Default..............................................................................49
8.2. Remedies.......................................................................................50
8.3. Waivers by Credit Parties......................................................................51
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT...................................................51
9.1. Assignment and Participations..................................................................51
9.2. Appointment of Agent...........................................................................54
9.3. Agent's Reliance, Etc..........................................................................54
9.4. GE Capital and Affiliates......................................................................55
9.5. Lender Credit Decision.........................................................................55
9.6. Indemnification................................................................................55
9.7. Successor Agent................................................................................56
9.8. Setoff and Sharing of Payments.................................................................57
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.......................57
9.10. Syndication and Documentation Agents...........................................................59
10. SUCCESSORS AND ASSIGNS................................................................................60
10.1. Successors and Assigns.........................................................................60
11. MISCELLANEOUS.........................................................................................60
11.1. Complete Agreement; Modification of Agreement..................................................60
11.2. Amendments and Waivers.........................................................................60
11.3. Fees and Expenses..............................................................................62
11.4. No Waiver......................................................................................64
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11.5. Remedies.......................................................................................64
11.6. Severability...................................................................................64
11.7. Conflict of Terms..............................................................................64
11.8. Confidentiality................................................................................64
11.9. GOVERNING LAW..................................................................................65
11.10. Notices........................................................................................65
11.11. Section Titles.................................................................................66
11.12. Counterparts...................................................................................66
11.13. WAIVER OF JURY TRIAL...........................................................................66
11.14. Press Releases and Related Matters.............................................................66
11.15. Reinstatement..................................................................................67
11.16. Advice of Counsel..............................................................................67
11.17. No Strict Construction.........................................................................67
12. CROSS-GUARANTY........................................................................................67
12.1. Cross-Guaranty.................................................................................67
12.2. Waivers by Borrowers...........................................................................68
12.3. Benefit of Guaranty............................................................................68
12.4. Subordination of Subrogation, Etc..............................................................68
12.5. Election of Remedies...........................................................................68
12.6. Limitation.....................................................................................69
12.7. Contribution with Respect to Guaranty Obligations..............................................69
12.8. Liability Cumulative...........................................................................70
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INDEX OF APPENDICES
Annex A (Recitals) - Definitions
Annex B (Section 1.2) - Letters of Credit
Annex C (Section 1.8) - Cash Management System
Annex D-1 (Section 2.1(a)) - Closing Checklist
Annex D-2 (Section 2.3) - Acquisition Conditions
Annex E (Section 4.1(a)) - Financial Statements and Projections--Reporting
Annex F (Section 4.1(b)) - Collateral Reports
Annex G (Section 6.10) - Financial Covenants
Annex H (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex I (Section 11.10) - Notice Addresses
Annex J (from Annex A - Commitments as of Closing Date
Commitments definition)
Exhibit 1.1(a)(i)(A) - Form of Notice of Tranche A Revolving Credit Advance
Exhibit 1.1(a)(C) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Exhibit B-1 - Application for Standby Letter of Credit
Exhibit B-2 - Application and Agreement for Documentary Letter of Credit
Exhibit B-3 - Application for Documentary Letter of Credit
Schedule 1.1 - Agent's Representatives
Schedule 6.1 - Permitted Acquisition Conditions if no Acquisition from Xxxx
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(a) - Financial Statements
Disclosure Schedule 3.4(b) - Pro Forma
Disclosure Schedule 3.4(c) - Projections
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Agreements and Other Documents
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Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.2 - Investments
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
Disclosure Schedule D - Equipment subject to Capital Leases
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This AMENDED AND RESTATED CREDIT AGREEMENT (this "Agreement"), dated
as of February 7, 2003 among STANDARD MOTOR PRODUCTS, INC. a New York
corporation ("SMP"), STANRIC, INC., a Delaware corporation ("SI") and MARDEVCO
CREDIT CORP., a New York corporation ("MCC") (SMP, SI and MCC are sometimes
collectively referred to herein as the "Borrowers" and individually as a
"Borrower"); the other Credit Parties signatory hereto; GENERAL ELECTRIC CAPITAL
CORPORATION, a Delaware corporation (in its individual capacity, "GE Capital"),
for itself, as Lender, and as Agent for Lenders, BANK OF AMERICA, N.A., for
itself, as Lender, and as Syndication Agent, GMAC COMMERCIAL FINANCE LLC (as
successor by merger to GMAC Commercial Credit LLC), for itself as Lender, and as
Documentation Agent, and the other Lenders signatory hereto from time to time.
RECITALS
WHEREAS, Credit Parties and Original Lenders were parties to the
Original Credit Agreement pursuant to which Original Lenders extended revolving
credit facilities to Borrowers of up to Two Hundred and Twenty Five Million
Dollars ($225,000,000) in the aggregate; and
WHEREAS, Borrowers have requested that Lenders extend revolving credit
facilities to Borrowers of up to Three Hundred and Five Million Dollars
($305,000,000) in the aggregate for the purpose of funding a portion of the
Acquisition and to provide (a) working capital financing for Borrowers, (b)
funds for other general corporate purposes of Borrowers and (c) funds for other
purposes permitted hereunder; and for these purposes, Lenders are willing to
make certain loans and other extensions of credit to Borrowers of up to such
amount upon the terms and conditions set forth herein; and
WHEREAS, Credit Parties have agreed to secure all of their obligations
under the Loan Documents by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon substantially all of their
existing and after-acquired personal and real property; and
WHEREAS, capitalized terms used in this Agreement shall have the
meanings ascribed to them in Annex A and, for purposes of this Agreement and the
other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
AMENDED AND RESTATED
As of the date of this Agreement, the terms, conditions, covenants,
agreements, representations and warranties contained in the Original Credit
Agreement shall be deemed amended and restated in their entirety as follows and
the Original Credit Agreement shall be consolidated with and into and superceded
by this Agreement without breaking continuity; provided, however, that nothing
contained in this Agreement shall impair, limit or affect the
security interests heretofore granted, pledged and or assigned to Agent as
security for the Obligations under the Original Credit Agreement and this
Agreement does not constitute a novation of the Original Credit Agreement or the
security interests granted in connection therewith. Outstanding Revolving Credit
Advances under the Original Credit Agreement shall constitute Tranche A
Revolving Credit Advances under this Agreement. Outstanding Letter of Credit
Obligations under the Original Credit Agreement shall constitute Letter of
Credit Obligations under this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and for other good and valuable consideration,
the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1. Credit Facilities.
(a) Revolving Credit Facility.
(i) (A) Subject to the terms and conditions hereof, prior to
the Acquisition Closing Date, each Tranche A Revolving Lender agrees to make
available to Borrowers from time to time until the Commitment Termination Date
its Pro Rata Share of advances (each, a "Tranche A Revolving Credit Advance").
The Pro Rata Share of the Revolving Loan of any Tranche A Revolving Lender shall
not at any time exceed its separate Tranche A Revolving Loan Commitment. The
obligations of each Tranche A Revolving Lender hereunder shall be several and
not joint. Until the earlier of the Acquisition Closing Date or the Commitment
Termination Date, Borrowers may borrow, repay and reborrow under this Section
1.1(a)(i)(A); provided that the amount of any Tranche A Revolving Credit Advance
to be made at any time shall not exceed Borrowing Availability at such time.
Borrowing Availability may be reduced by Reserves imposed by Agent in its
reasonable credit judgment. Moreover, the Tranche A Revolving Loan outstanding
to any Borrower shall not exceed at any time that Borrower's separate Borrowing
Base. Each Tranche A Revolving Credit Advance shall be made on notice by
Borrower Representative on behalf of the applicable Borrower to one of the
representatives of Agent identified in Schedule 1.1 at the address specified
therein. Any such notice must be given no later than (1) noon (New York time) on
the Business Day of the proposed Tranche A Revolving Credit Advance, in the case
of an Index Rate Loan, or (2) noon (New York time) on the date which is three
(3) Business Days prior to the proposed Tranche A Revolving Credit Advance, in
the case of a LIBOR Loan. Each such notice (a "Notice of Tranche A Revolving
Credit Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i)(A), and shall include the
information required in such Exhibit and such other information as may be
reasonably required by Agent. If any Borrower desires to have the Tranche A
Revolving Credit Advances bear interest by reference to a LIBOR Rate, Borrower
Representative must comply with Section 1.5(e).
(B) Subject to the terms and conditions hereof, each Tranche
B Revolving Lender agrees to make advances (each, a "Tranche B Revolving Credit
Advance") on the Acquisition Closing Date to SMP in the original principal
amount of its Tranche B Revolving Loan Commitment. The obligations of each
Tranche B Revolving Lender hereunder shall be
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several and not joint. The Tranche B Revolving Credit Advances shall all be made
on the Acquisition Closing Date as part of the Revolving Credit Advances under
Section 1.1(a)(i)(C) and, therefore, SMP may not repay and reborrow under this
Section 1.1(a)(i)(B). If SMP desires to have the Tranche B Revolving Credit
Advances bear interest by reference to a LIBOR Rate, it must comply with Section
1.5(e). Prior to the Acquisition Closing Date, Borrowers shall have the right to
notify the Agent that it does not require the funding of Tranche B Revolving
Credit Advances and, effective upon receipt of such by Agent, the Tranche B
Revolving Loan Commitments of each Tranche B Revolving Lender shall be reduced
to $0.
(C) Following the closing of the Acquisition on the
Acquisition Closing Date, but subject to the terms and conditions hereof,
Tranche A Revolving Credit Advances shall be combined with Tranche B Revolving
Credit Advances and each Revolving Lender agrees to make available to Borrowers
from time to time until the Commitment Termination Date its Pro Rata Share of
advances (each, a "Revolving Credit Advance"). The Pro Rata Share of the
Revolving Loans 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. On and after the Acquisition Closing
Date, Borrowers may borrow, repay and reborrow under this Section 1.1(a)(i)(C);
provided that the amount of any Revolving Credit Advance to be made at any time
shall not exceed Borrowing Availability at such time. Borrowing Availability may
be reduced by Reserves imposed by Agent in its reasonable credit judgment.
Moreover, the Revolving Loan outstanding to any Borrower shall not exceed at any
time that Borrower's separate Borrowing Base. Each Revolving Credit Advance
shall be made on notice by Borrower Representative on behalf of the applicable
Borrower to one of the representatives of Agent identified in Schedule 1.1 at
the address specified therein. Any such notice must be given no later than (1)
noon (New York time) on the Business Day of the proposed Revolving Credit
Advance, in the case of an Index Rate Loan, or (2) noon (New York time) on the
date which is three (3) Business Days prior to the proposed Revolving Credit
Advance, in the case of a LIBOR Loan. Each such notice (a "Notice of Revolving
Credit Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i)(C), and shall include the
information required in such Exhibit and such other information as may be
reasonably required by Agent. If any Borrower desires to have the Revolving
Credit Advances bear interest by reference to a LIBOR Rate, Borrower
Representative must comply with Section 1.5(e).
(ii) Except as provided in Section 1.12, each Borrower shall
execute and deliver to each Revolving Lender a note to evidence the Revolving
Loan Commitment of that Revolving Lender. Each note shall be in the principal
amount of the Revolving Loan Commitment of the applicable Revolving Lender,
dated the Closing Date and substantially in the form of Exhibit 1.1(a)(ii) (each
a "Revolving Note" and, collectively, the "Revolving Notes"). Each Revolving
Note shall represent the obligation of the applicable Borrower to pay the amount
of the applicable Revolving Lender's Revolving Loan Commitment or, if less, such
Revolving Lender's Pro Rata Share of the aggregate unpaid principal amount of
all Revolving Credit Advances to such Borrower together with interest thereon as
prescribed in Section 1.5. 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. Notwithstanding the foregoing, prior to the Acquisition Closing Date, the
Revolving Notes held by the Tranche B Revolving Lenders shall reflect only its
Tranche B
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Revolving Loan Commitment, not the Revolving Loan Commitment of such Tranche B
Revolving Lender. On or after the Acquisition Closing Date, the Revolving Notes
held by the Tranche B Revolving Lenders shall represent the Revolving Loan
Commitments of the Tranche B Revolving Lenders.
(iii) (A) Anything in this Agreement to the contrary
notwithstanding, at the request of Borrower Representative, in its discretion
Agent may (but shall have absolutely no obligation to), prior to the Acquisition
Closing Date, make Tranche A Revolving Credit Advances to Borrowers on behalf of
Tranche A Revolving Lenders in amounts that cause the outstanding balance of the
aggregate Tranche A Revolving Loan to exceed the Aggregate Borrowing Base or
which cause the outstanding balance of the Tranche A Revolving Loan owing by any
Borrower to exceed that Borrower's separate Borrowing Base (any such excess
Tranche A Revolving Credit Advances are herein referred to collectively as
"Tranche A Overadvances") which the Agent, in its reasonable business judgment,
deems necessary or desirable (a) to preserve or protect the Collateral, or any
portion thereof, (b) to enhance the likelihood of, or maximize the amount of,
repayment of the Tranche A Revolving Loans and other Obligations, or (c) to pay
any other amount chargeable to the Borrowers pursuant to the terms of this
Agreement; provided that (A) no such event or occurrence shall cause or
constitute a waiver of Agent's or Tranche A Revolving Lenders' right to refuse
to make any further Tranche A Overadvances or Tranche A Revolving Credit
Advances, or incur any Letter of Credit Obligations, as the case may be, at any
time that a Tranche A Overadvance exists, and (B) no Tranche A Overadvance shall
result in a Default or Event of Default based on Borrowers' failure to comply
with Section 1.3(b)(i) for so long as Agent permits such Tranche A Overadvance
to be outstanding, but solely with respect to the amount of such Tranche A
Overadvance. In addition, Tranche A Overadvances may be made even if the
conditions to lending set forth in Section 2 have not been met. All Tranche A
Overadvances shall constitute Index Rate Loans, shall bear interest at the
Default Rate and shall be payable on the earlier of demand or the Commitment
Termination Date. Except as otherwise provided in Section 1.11(b), the authority
of Agent to make Tranche A Overadvances is limited to an aggregate amount not to
exceed $10,000,000 at any time, shall not cause the aggregate Tranche A
Revolving Loan to exceed the Maximum Amount, and may be revoked prospectively by
a written notice to Agent signed by Requisite Lenders.
(B) Anything in this Agreement to the contrary
notwithstanding, at the request of Borrower Representative, in its discretion
Agent may (but shall have absolutely no obligation to), on and after the
Acquisition Closing Date, make Revolving Credit Advances to Borrowers on behalf
of Revolving Lenders in amounts that cause the outstanding balance of the
aggregate Revolving Loan to exceed the Aggregate Borrowing Base or which cause
the outstanding balance of the Revolving Loan owing by any Borrower to exceed
that Borrower's separate Borrowing Base (any such excess Revolving Credit
Advances are herein referred to collectively as "Overadvances") which the Agent,
in its reasonable business judgment, deems necessary or desirable (a) to
preserve or protect the Collateral, or any portion thereof, (b) to enhance the
likelihood of, or maximize the amount of, repayment of the Revolving Loans and
other Obligations, or (c) to pay any other amount chargeable to the Borrowers
pursuant to the terms of this Agreement; provided that (A) no such event or
occurrence shall cause or constitute a waiver of Agent's or Revolving Lenders'
right to refuse to make any further Overadvances or Revolving Credit Advances,
or incur any Letter of Credit Obligations, as the
4
case may be, at any time that an Overadvance exists, and (B) no Overadvance
shall result in a Default or Event of Default based on Borrowers' failure to
comply with Section 1.3(b)(i) for so long as Agent permits such Overadvances to
be outstanding, but solely with respect to the amount of such Overadvance. In
addition, Overadvances may be made even if the conditions to lending set forth
in Section 2 have not been met. All Overadvances shall constitute Index Rate
Loans, shall bear interest at the Default Rate and shall be payable on the
earlier of demand or the Commitment Termination Date. Except as otherwise
provided in Section 1.11(b), the authority of Agent to make Overadvances is
limited to an aggregate amount not to exceed $15,000,000 at any time, shall not
cause the aggregate Revolving Loan to exceed the Maximum Amount, and may be
revoked prospectively by a written notice to Agent signed by Requisite Lenders.
(iv) In no event, at any time, shall (x) the Aggregate Amortizing
Availability included in determining the Aggregate Borrowing Base exceed
$35,000,000, and (y) the amount included in Aggregate Amortizing Availability
based upon the Fair Market Value of Eligible Real Estate exceed 50% of such
Aggregate Amortizing Availability.
(b) INTENTIONALLY OMITTED.
(c) INTENTIONALLY OMITTED.
(d) Reliance on Notices; Appointment of Borrower Representative. Agent
shall be entitled to rely upon, and shall be fully protected in relying upon,
any Notice of Tranche A Revolving Credit Advance prior to the Acquisition
Closing Date, any Notice of Tranche B Revolving Credit Advance on the
Acquisition Closing Date, any Notice of Revolving Credit Advance on and after
the Acquisition Closing Date, any Notice of Conversion/Continuation or any
similar notice believed by Agent to be genuine. Agent may assume that each
Person executing and delivering any notice in accordance herewith was duly
authorized, unless the responsible individual acting thereon for Agent has
actual knowledge to the contrary. Each Borrower hereby designates SMP as its
representative and agent on its behalf for the purposes of issuing Notices of
Tranche A Revolving Credit Advances, Notices of Tranche B Revolving Credit
Advances, Notices of Revolving Credit Advances and Notices of
Conversion/Continuation, giving instructions with respect to the disbursement of
the proceeds of the Loans, selecting interest rate options, requesting Letters
of Credit, giving and receiving all other notices and consents hereunder or
under any of the other Loan Documents and taking all other actions (including in
respect of compliance with covenants) on behalf of any Borrower or Borrowers
under the Loan Documents. Borrower Representative hereby accepts such
appointment. Agent and each Lender may regard any notice or other communication
pursuant to any Loan Document from Borrower Representative as a notice or
communication from all Borrowers, and may give any notice or communication
required or permitted to be given to any Borrower or Borrowers hereunder to
Borrower Representative on behalf of such Borrower or Borrowers. Each Borrower
agrees that each notice, election, representation and warranty, covenant,
agreement and undertaking made on its behalf by Borrower Representative shall be
deemed for all purposes to have been made by such Borrower and shall be binding
upon and enforceable against such Borrower to the same extent as if the same had
been made directly by such Borrower.
5
1.2. Letters of Credit. Subject to and in accordance with the terms and
conditions contained herein and in Annex B, Borrower Representative, on behalf
of the applicable Borrower, shall have the right to request, and (x) prior to
the Acquisition Closing Date, Tranche A Revolving Lenders, and (y) on and after
the Acquisition Closing Date, Revolving Lenders, agree to incur, or purchase
participations in, Letter of Credit Obligations in respect of each Borrower. On
and after the Acquisition Closing Date, each Tranche B Revolving Lender shall
purchase a participation in the Letter of Credit Obligations of each Tranche A
Revolving Lender so that, after giving effect to such purchase, each Revolving
Lender shall have its Pro Rata Share of the Letter of Credit Obligations in
respect of each Borrower.
1.3. Prepayments.
(a) Voluntary Prepayments. Borrowers may at any time on at least ten
(10) days' prior written notice by Borrower Representative to Agent terminate
the Revolving Loan Commitment; provided that upon such termination, all Loans
and other Obligations shall be immediately due and payable in full and all
Letter of Credit Obligations shall be cash collateralized or otherwise satisfied
in accordance with Annex B. Any such termination of the Revolving Loan
Commitment must be accompanied by the payment of the Fee required by Section
1.9(c), if any, plus the payment of any LIBOR funding breakage costs in
accordance with Section 1.13(b). Upon any termination of the Revolving Loan
Commitment, each Borrower's right to request Revolving Credit Advances, or
request that Letter of Credit Obligations be incurred on its behalf shall
simultaneously be terminated.
(b) Mandatory Prepayments.
(i) If at any time the aggregate outstanding balances of the
Revolving Loan exceed the lesser of (A) the Maximum Amount and (B) the Aggregate
Borrowing Base, Borrowers shall immediately repay the aggregate outstanding
Revolving Credit Advances to the extent required to eliminate such excess. If
any such excess remains after repayment in full of the aggregate outstanding
Revolving Credit Advances, Borrowers shall provide cash collateral for the
Letter of Credit Obligations in the manner set forth in Annex B to the extent
required to eliminate such excess. Furthermore, if, at any time, the outstanding
balance of the Revolving Loan of any Borrower exceeds that Borrower's separate
Borrowing Base, the applicable Borrower shall immediately repay its Revolving
Credit Advances in the amount of such excess (and, if necessary, shall provide
cash collateral for its Letter of Credit Obligations as described above).
Notwithstanding the foregoing, any Overadvance made pursuant to Section
1.1(a)(iii) shall be repaid in accordance with Section 1.1(a)(iii).
(ii) Within three (3) Business Days after receipt by any Credit
Party of cash proceeds of any asset disposition (excluding proceeds of asset
dispositions permitted by Section 6.8 (a)) or any sale of Stock of any
Subsidiary of any Credit Party (other than a sale to any Credit Party),
Borrowers shall prepay the Loans in an amount equal to all such proceeds, net of
(A) commissions and other reasonable and customary transaction costs, fees and
expenses properly attributable to such transaction and payable by Borrowers in
connection therewith (in each case, paid to non-Affiliates), (B) transfer taxes,
(C) amounts payable to holders of senior Liens on such assets (to the extent
such Liens constitute Permitted Encumbrances hereunder), if
6
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
Section 1.3(c).
(iii) If any Borrower issues Stock, no later than the Business
Day following the date of receipt of the proceeds thereof, the issuing Borrower
shall prepay the Loans (and cash collateralize Letter of Credit Obligations) in
an amount equal to all such proceeds, net of underwriting discounts and
commissions and other reasonable costs paid to non-Affiliates in connection
therewith. Any such prepayment shall be applied in accordance with Section
1.3(c) provided that proceeds of the issuance of Stock in connection with the
Additional Capitalization Requirement shall be applied solely to the outstanding
balance of Revolving Credit Advances until the same have been paid in full.
(c) Application of Certain Mandatory Prepayments. Any prepayments made
by any Borrower pursuant to Sections 1.3(b)(ii) or (b)(iii) above shall be
applied as follows: first, to Fees and reimbursable expenses of Agent then due
and payable pursuant to any of the Loan Documents; second, to interest then due
and payable on Revolving Credit Advances made to that Borrower; third, to the
principal balance of Revolving Credit Advances outstanding to that Borrower
until the same has been paid in full; fourth, to any Letter of Credit
Obligations of such Borrower to provide cash collateral therefor in the manner
set forth in Annex B, until all such Letter of Credit Obligations have been
fully cash collateralized in the manner set forth in Annex B; fifth, to interest
then due and payable on the Revolving Credit Advances outstanding to each other
Borrower, pro rata; sixth, to the principal balance of the Revolving Credit
Advances made to each other Borrower, pro rata, until the same has been paid in
full; seventh, to any Letter of Credit Obligations of each other Borrower, pro
rata, to provide cash collateral therefore in the manner set forth in Annex B,
until all such Letter of Credit Obligations have been fully cash collateralized;
eighth, to any Rate Protection Obligations which may be due and payable by such
Borrower until the same has been paid in full; and ninth, to any Rate Protection
Obligations which may be due and payable by each other Borrower, pro rata, until
the same has been paid in full. The Revolving Loan Commitment shall not be
permanently reduced by the amount of any such prepayments.
(d) Application of Prepayments from Insurance and Condemnation
Proceeds. Prepayments from insurance or condemnation proceeds in accordance with
Section 5.4(c) and the Mortgage(s), respectively, shall be applied, to the
Revolving Credit Advances of the Borrower that incurred such casualties or
losses. The Revolving Loan Commitment shall not be permanently reduced by the
amount of any such prepayments. If insurance or condemnation proceeds received
by a particular Borrower exceed the outstanding principal balances of the Loans
to that Borrower, or if the precise amount of insurance or condemnation 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 Agent, subject to the approval of Requisite Lenders.
(e) No Implied Consent. Nothing in this Section 1.3 shall be construed
to constitute Agent's or any Lender's consent to any transaction that is not
permitted by other provisions of this Agreement or the other Loan Documents.
7
1.4. Use of Proceeds. Borrowers shall utilize the proceeds of the Loans
solely for the Acquisition (and to pay any related transaction expenses), and
for the financing of Borrowers' ordinary working capital and general corporate
needs. Disclosure Schedule (1.4) contains a description of Borrowers' sources
and uses of funds as of the Closing Date, including Loans and Letter of Credit
Obligations to be made or incurred on that date, and a funds flow memorandum
directing the Agent how funds from each source are to be transferred to
particular uses.
1.5. Interest and Applicable Margins.
(a) (i) Prior to the Acquisition Closing Date, Borrowers shall pay
interest to 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: the Index Rate plus the Applicable
Revolver Index Margin per annum or, at the election of Borrower Representative,
the applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum,
based on the aggregate Revolving Credit Advances outstanding from time to time.
As of the Closing Date, the Applicable Margins are set at Level II of
the Applicable Margin grid set forth below.
Prior to the Acquisition Closing Date, the Applicable Margins shall be
adjusted (up or down) prospectively on a quarterly basis as determined by
Borrowers' consolidated financial performance, commencing with the first day of
the first calendar month that occurs more than five (5) days after delivery of
Borrowers' quarterly Financial Statements to Lenders for the Fiscal Quarter
ending December 31, 2002, and continuing thereafter as hereinafter provided.
Adjustments in Applicable Margins shall be determined by reference to the
following grids (which are in effect prior to the Acquisition Closing Date):
--------------------------------------------------------------------------------------------
IF EXCESS FORMULA LEVEL OF
AVAILABILITY: OR APPLICABLE MARGINS:
--------------------------------------------------------------------------------------------
>$75,000,000 As of any date of determination, Level I
(a) Borrowers and their
Subsidiaries on a consolidated
basis, with respect to the 12-month
period then ended, have EBITDA of
not less than $63,000,000 and (b)
Excess Formula Availability is
greater than $50,000,000
--------------------------------------------------------------------------------------------
>$50,000,000, but <=$75,000,000 As of any date of determination, Level II
(a) Borrowers and their
Subsidiaries on a consolidated
basis, with respect to the 12-month
period then ended, have a minimum
EBITDA of not less than $63,000,000
and (b)
--------------------------------------------------------------------------------------------
8
--------------------------------------------------------------------------------------------
IF EXCESS FORMULA LEVEL OF
AVAILABILITY: OR APPLICABLE MARGINS:
--------------------------------------------------------------------------------------------
Excess Formula Availability
is greater than $25,000,000
--------------------------------------------------------------------------------------------
>$25,000,000, but <=$50,000,000 N/A Level III
--------------------------------------------------------------------------------------------
>$10,000,000, but <=$25,000,000 N/A Level IV
--------------------------------------------------------------------------------------------
< $10,000,000 N/A Level V
--------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
APPLICABLE MARGINS
---------------------------------------------------------------------------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
---------------------------------------------------------------------------------------
Applicable Revolver Index Margin 0.0% 0.25% 0.50% 0.75% 1.00%
---------------------------------------------------------------------------------------
Applicable Revolver LIBOR Margin 1.75% 2.00% 2.25% 2.50% 2.75%
---------------------------------------------------------------------------------------
Applicable Unused Line Fee Margin 0.25% 0.25% 0.375% 0.50% 0.50%
---------------------------------------------------------------------------------------
(ii) On and after the Acquisition Closing Date, Borrowers shall
pay interest to 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: the Index Rate plus the Applicable
Revolver Index Margin per annum or, at the election of Borrower Representative,
the applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum,
based on the aggregate Revolving Credit Advances outstanding from time to time.
As of the Acquisition Closing Date, the Applicable Margins are
set at Level III of the Applicable Margin grid set forth below.
After the first anniversary of the Acquisition Closing Date, the
Applicable Margins, would be subject to adjustment (up or down) prospectively
based on Borrower's consolidated financial performance for the trailing four
quarters most recently ended in accordance with the following grids which will
be in effect on and after the Acquisition Closing Date:
--------------------------------------------------------------------------------------------
IF EXCESS FORMULA LEVEL OF
AVAILABILITY: OR APPLICABLE MARGINS:
--------------------------------------------------------------------------------------------
>$75,000,000 As of any date of determination, (a) Level I
Borrowers and their subsidiaries on
a consolidated basis, with respect
to the 12-month period then ended,
have EBITDA greater than $75,000,000
and
--------------------------------------------------------------------------------------------
9
--------------------------------------------------------------------------------------------
IF EXCESS FORMULA LEVEL OF
AVAILABILITY: OR APPLICABLE MARGINS:
--------------------------------------------------------------------------------------------
(b) Excess Formula Availability
is greater than $60,000,000
--------------------------------------------------------------------------------------------
>$60,000,000, but <=$75,000,000 As of any date of determination, (a) Level II
Borrowers and their subsidiaries on
a consolidated basis, with respect
to the 12-month period then ended,
have a minimum EBITDA greater than
$75,000,000 and (b) Excess Formula
Availability is greater than
$35,000,000
--------------------------------------------------------------------------------------------
>$35,000,000, but <=$60,000,000 N/A Level III
--------------------------------------------------------------------------------------------
>$20,000,000, but <=$35,000,000 N/A Level IV
--------------------------------------------------------------------------------------------
<=$20,000,000 N/A Level V
--------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------
APPLICABLE MARGINS
---------------------------------------------------------------------------------------
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
---------------------------------------------------------------------------------------
Applicable Revolver Index Margin 0.25% 0.50% 0.75% 1.00% 1.25%
---------------------------------------------------------------------------------------
Applicable Revolver LIBOR Margin 2.00% 2.25% 2.50% 2.75% 3.00%
---------------------------------------------------------------------------------------
Applicable Unused Line Fee Margin 0.25% 0.25% 0.375% 0.50% 0.50%
---------------------------------------------------------------------------------------
(iii) All adjustments in the Applicable Margins shall be
implemented quarterly 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 evidencing the
need for an adjustment. Concurrently with the delivery of those Financial
Statements, Borrower Representative shall deliver to Agent and Lenders a
certificate, signed by its chief financial officer or treasurer, 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 has occurred and is 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.
10
(b) If any payment on any Loan becomes due and payable on a day other
than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis and
interest shall be made by Agent on the basis of a 360-day year, in each case for
the actual number of days occurring in the period for which such interest and
Fees are payable. The Index Rate is a floating rate determined for each day.
Each determination by Agent of an interest rate and Fees hereunder shall be
final, binding and conclusive on Borrowers, absent manifest error.
(d) So long as an Event of Default has occurred and is continuing
under Section 8.1(a), (h) or (i) or so long as any other Event of Default has
occurred and is continuing and at the election of Agent (or upon the written
request of Requisite Lenders) confirmed by written notice from Agent to Borrower
Representative, the interest rates applicable to the Loans and the Letter of
Credit Fees shall be increased by two percentage points (2%) per annum above the
rates of interest or the rate of such Letter of Credit Fees otherwise applicable
hereunder unless Agent (not having received any prior written request of
Requisite Lenders and, in any event, subject to the consent of Requisite
Lenders) elects to impose a smaller increase ("Default Rate"), and all
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest and Letter of Credit Fees at the Default Rate shall
accrue from the initial date of such Event of Default until that Event of
Default is cured or waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in Section 2.2,
Borrower Representative shall have the option to (i) request that any Revolving
Credit Advance be made as a LIBOR Loan, (ii) convert at any time all or any part
of outstanding Loans from Index Rate Loans to LIBOR Loans, (iii) convert any
LIBOR Loan to an Index Rate Loan, subject to payment of LIBOR breakage costs in
accordance with Section 1.13(b) if such conversion is made prior to the
expiration of the LIBOR Period applicable thereto, or (iv) continue all or any
portion of any Loan as a LIBOR Loan upon the expiration of the applicable LIBOR
Period and the succeeding LIBOR Period of that continued Loan shall commence on
the first day after the last day of the LIBOR Period of the Loan to be
continued. Any Loan or group of Loans having the same proposed LIBOR Period to
be made or continued as, or converted into, a LIBOR Loan must be in a minimum
amount of $1,000,000 and integral multiples of $500,000 in excess of such
amount. Any such election must be made by noon (New York time) on the third
Business Day prior to (1) the date of any proposed Advance which is to bear
interest at the LIBOR Rate, (2) the end of each LIBOR Period with respect to any
LIBOR Loans to be continued as such, or (3) the date on which Borrower
Representative wishes to convert any Index Rate Loan to a LIBOR Loan for a LIBOR
Period designated by Borrower Representative in such election. If no election is
received with respect to a LIBOR Loan by noon (New York time) on the third
Business Day prior to the end of the LIBOR Period with respect thereto (or if a
Default or an Event of Default has occurred and is continuing or if the
additional conditions precedent set forth in Section 2.2 shall not have been
satisfied), that LIBOR Loan shall be converted to an Index Rate Loan at the end
of its LIBOR Period. Borrower Representative must make such election by notice
to Agent in writing, by telecopy or overnight courier. In the case of any
conversion or
11
continuation, such election must be made pursuant to a written notice (a "Notice
of Conversion/Continuation") in the form of Exhibit 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this Section
1.5, if a court of competent jurisdiction determines in a final order that the
rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrowers shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.5(a) through (e), 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 that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by law, promptly apply such excess in the order specified in Section
1.11 and thereafter shall refund any excess to Borrowers or as a court of
competent jurisdiction may otherwise order.
1.6. Eligible Accounts. All of the Accounts owned by each Borrower (with
Accounts owned by SMP Canada being deemed, for purposes of this Section, to be
Accounts owned by SMP) and reflected in the most recent Borrowing Base
Certificate delivered by each Borrower to Agent shall be "Eligible Accounts" for
purposes of this Agreement, except (i) to the extent Accounts which are
permitted to be paid after 90 days following their original invoice date but
within 210 days following their original invoice date exceed $115,000,000 in the
aggregate at any time or from time to time such Accounts shall not constitute
Eligible Accounts to the extent of such excess, or (ii) any Account to which any
of the exclusionary criteria set forth below applies. Agent shall have the right
to establish, modify or eliminate Reserves against Eligible Accounts from time
to time in its reasonable credit judgment. In addition, Agent reserves the
right, at any time and from time to time after the Closing Date, to adjust any
of the criteria set forth below, to establish new criteria and to adjust advance
rates with respect to Eligible Accounts, in its reasonable credit judgment,
subject to the approval of Supermajority Revolving Lenders in the case of
adjustments or new criteria or changes in advance rates (subject to Section
11.2(c)(vii)) or the elimination of Reserves (except no such approval shall be
required with respect to (a) the reduction or elimination of Reserves which may
be established and maintained from time to time by Agent with respect to Rate
Protection Obligations under Rate Protection Agreements or (b) the Asbestos
Reserve (so long as such Reserves are calculated in the same manner as was
utilized on the Closing Date)) which have the effect of making more credit
available. Eligible Accounts shall not include any Account of any Borrower:
12
(a) that does not arise from the sale of goods or the performance of
services by such Borrower in the ordinary course of its business;
(b) (i) upon which such Borrower's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which such Borrower is not able to bring suit or otherwise enforce
its remedies against the Account Debtor through judicial process or (iii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to such Borrower's completion
of further performance under such contract or is subject to the equitable lien
of a surety bond issuer;
(c) to the extent that any defense, counterclaim, setoff or dispute is
asserted as to such Account or to the extent that any credits which have been
issued have not been applied to an Account Debtor's statement or account, but
only to the extent of such defense, counterclaim, setoff, dispute, or credit;
(d) that is not a true and correct statement of bona fide indebtedness
incurred in the amount of the Account for merchandise sold to or services
rendered and accepted by the applicable Account Debtor, including pre-billed
items;
(e) with respect to which an invoice, reasonably acceptable to Agent
in form and substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by such Borrower or (ii) is subject to any
Lien of any other Person, other than Liens in favor of Agent, on behalf of
itself and Lenders;
(g) that arises from a sale to any director, officer, other employee
or Affiliate of any Credit Party, or to any entity that has any common officer
or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the United
States government or a political subdivision thereof, or any state, county or
municipality or department, agency or instrumentality thereof unless Agent, in
its sole discretion, has agreed to the contrary in writing and such Borrower, if
necessary or desirable, has complied with respect to such obligation with the
Federal Assignment of Claims Act of 1940, or any applicable state, county or
municipal law restricting assignment thereof.
(i) that is the obligation of an Account Debtor located in a foreign
country other than Canada unless payment thereof is assured by a letter of
credit assigned and delivered to Agent, reasonably satisfactory to Agent as to
form, amount and issuer.
(j) to the extent such Borrower or any Subsidiary thereof is liable
for goods sold or services rendered by the applicable Account Debtor to such
Borrower or any Subsidiary thereof but only to the extent of the potential
offset;
13
(k) that arises with respect to goods that are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default; provided, that, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within the earlier of: sixty (60)
days following its due date or two hundred ten (210) days following its original
invoice date, provided, that, so long as such scheduled payments are being made
on a timely basis, Car Quest Long Term Accounts shall not be considered
ineligible under this criterion except to the extent of any amount thereof in
excess of the next seven (7) monthly installments which are scheduled to be
paid;
(ii) the Account Debtor obligated upon such Account suspends
business, makes a general assignment for the benefit of creditors or fails to
pay its debts generally as they come due; or
(iii) a petition is filed by or against any Account Debtor
obligated upon such Account under any bankruptcy law or any other federal, state
or foreign (including any provincial) receivership, insolvency relief or other
law or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor if fifty percent (50%)
or more of the Dollar amount of all Accounts owing by that Account Debtor are
ineligible under the other criteria set forth in this Section 1.6 other than
with respect to Car Quest Long Term Accounts;
(n) as to which Agent's Lien thereon, on behalf of itself and Lenders,
is not a first priority perfected Lien;
(o) as to which any of the representations or warranties in the Loan
Documents are untrue;
(p) to the extent such Account is evidenced by a judgment, Instrument
or Chattel Paper;
(q) to the extent such Account exceeds any credit limit established by
Agent, in its reasonable credit judgment;
(r) to the extent that such Account, together with all other Accounts
owing by such Account Debtor and its Affiliates as of any date of determination
exceed twenty-five (25%) of all Eligible Accounts;
(s) that is payable in any currency other than Dollars; or
(t) that is otherwise unacceptable to Agent in its reasonable credit
judgment.
14
For purposes of this Section 1.6, the SunTrust Drafts received by SMP
from AutoZone in connection with the AutoZone/SunTrust Program shall be treated
as if they constituted "Accounts" so long as Agent or its designee has
possession of such SunTrust Drafts.
1.7. Eligible Inventory. All of the Inventory owned by the Borrowers (with
Inventory owned by SMP Canada being deemed, for purposes of this Section, to be
Inventory owned by SMP) and reflected in the most recent Borrowing Base
Certificate delivered by each Borrower to Agent shall be "Eligible Inventory"
for purposes of this Agreement, except any Inventory to which any of the
exclusionary criteria set forth below applies. Agent shall have the right to
establish or modify or eliminate Reserves against Eligible Inventory from time
to time in its reasonable credit judgment. In addition, Agent reserves the
right, at any time and from time to time after the Closing Date, to adjust any
of the criteria set forth below, to establish new criteria and to adjust advance
rates with respect to Eligible Inventory, in its reasonable credit judgment,
subject to the approval of Supermajority Revolving Lenders in the case of
adjustments or new criteria or changes in advance rates (subject to Section
11.2(c)(vii)) or the elimination of Reserves (except no such approval shall be
required with respect to (a) the reduction or elimination of Reserves which may
be established and maintained from time to time by Agent with respect to Rate
Protection Obligations under Rate Protection Agreements or (b) the Asbestos
Reserve (so long as such Reserves are calculated in the same manner as was
utilized on the Closing Date)) which have the effect of making more credit
available. Eligible Inventory shall not include any Inventory of any Borrower
that:
(a) is not owned by such Borrower free and clear of all Liens and
rights of any other Person (including the rights of a purchaser that has made
progress payments and the rights of a surety that has issued a bond to assure
such Borrower's performance with respect to that Inventory), except the Liens in
favor of Agent, on behalf of itself and Lenders, and Permitted Encumbrances in
favor of landlords and bailees to the extent permitted in Section 5.9 hereof
(subject to Reserves established by Agent in accordance with Section 5.9
hereof);
(b) (i) is not located on premises owned, leased or rented by such
Borrower and set forth in Disclosure Schedule (3.2) or identified pursuant to
Section 6.15, or (ii) is stored at a leased location, unless Agent has given its
prior consent thereto and unless either (x) a reasonably satisfactory landlord
waiver has been delivered to Agent, or (y) Reserves reasonably satisfactory to
Agent have been established with respect thereto or (iii) is stored with a
bailee or warehouseman unless a reasonably satisfactory, acknowledged bailee
letter has been received by Agent or Reserves reasonably satisfactory to Agent
have been established with respect thereto, or (iv) is located at an owned
location subject to a mortgage in favor of a lender other than Agent unless a
reasonably satisfactory mortgagee waiver has been delivered to Agent or Reserves
reasonably satisfactory to Agent have been established with respect thereto, or
(v) other than with respect to 3 locations which Borrowers may designate in
writing to Agent from time to time, is located at any site if the aggregate book
value of Inventory at any such location is less than $100,000; or (vi) is
located outside of the United States of America, its territories or Canada;
(c) is placed on consignment or is in transit, except for Inventory in
transit between domestic locations of Credit Parties as to which Agent's Liens
have been perfected at origin and destination.
15
(d) is covered by a negotiable document of title, unless such document
has been delivered to Agent with all necessary endorsements, free and clear of
all Liens except those in favor of Agent and Lenders;
(e) is excess, obsolete, unsalable, shopworn, seconds (excluding
cores), damaged or unfit for sale;
(f) consists of display items or packing or shipping materials,
manufacturing supplies, work-in-process Inventory or replacement parts;
(g) consists of goods which have been returned by the buyer unless
such returned goods consist of (i) cores or (ii) goods which have been restored
to Inventory as first quality, saleable merchandise;
(h) is not of a type held for sale in the ordinary course of such
Borrower's business;
(i) is not subject to a first priority lien in favor of Agent on
behalf of itself and Lenders;
(j) breaches any of the representations or warranties pertaining to
Inventory set forth in the Loan Documents;
(k) consists of any costs associated with "freight-in" charges or
favorable purchase price variances;
(l) consists of Hazardous Materials or goods that can be transported
or sold only with licenses that are not readily available;
(m) is not covered by casualty insurance reasonably acceptable to
Agent; or
(n) is subject to any patent or trademark license requiring the
payment of royalties or fees or requiring the consent of the licensor for a sale
thereof by Agent (where such consent has not been obtained); or
(o) is otherwise unacceptable to Agent in its reasonable credit
judgment.
1.8. Cash Management Systems. On or prior to the Closing Date, Borrowers
will establish and will maintain until the Termination Date, the cash management
systems described in Annex C (the "Cash Management Systems").
1.9. Fees.
(a) Borrowers shall pay to GE Capital, individually, the Fees
specified in that certain fee letter dated as of October 1, 2002 between
Borrower Representative and GE Capital (as amended, the "GE Capital Fee
Letter"), at the times specified for payment therein.
16
(b) (i) As additional compensation for the Tranche A Revolving
Lenders, Borrowers shall pay to Agent, for the ratable benefit of such Lenders,
in arrears, on the first Business Day of each month prior to the earliest of (1)
the Acquisition Closing Date, (2) the date Borrower Representative notifies
Agent that Borrowers do not require the Acquisition Loan Facility and (3) the
Commitment Termination Date, a Fee for Borrowers' non-use of available funds in
an amount equal to the Applicable Unused Line Fee Margin per annum (calculated
on the basis of a 360 day year for actual days elapsed) multiplied by the
difference between (x) $225,000,000 and (y) the average for the period of the
daily closing balances of the aggregate Tranche A Revolving Credit Advances
outstanding during the period for which such Fee is due.
(ii) As additional compensation for the Tranche B Revolving
Lenders, Borrowers shall pay to Agent, for the ratable benefit of Tranche B
Revolving Lenders, in arrears, on the first Business Day of each month prior to
the earliest of (x) the Acquisition Closing Date, (y) the date Borrower
Representative notifies Agent that Borrowers do not require the Acquisition Loan
Facility and (2) the Commitment Termination Date, a Fee in an amount equal to
three-eighths of one percent (.375%) per annum (calculated on the basis of a 360
day year for actual days elapsed) multiplied by the Tranche B Revolving Loan
Commitments.
(iii) On and after the earlier of (x) the Acquisition Closing
Date, and (y) the date Borrower Representative notifies Agent that Borrowers do
not require the Acquisition Loan Facility, as additional compensation for the
Revolving Lenders, Borrowers shall pay to Agent, for the ratable benefit of such
Lenders, in arrears, on the first Business Day of each month prior to the
Commitment Termination Date and on the Commitment Termination Date, a Fee for
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) multiplied by the difference between (x) the Maximum
Amount, and (y) the average for the period of the daily closing balances of the
aggregate Revolver Loan outstanding during the period for which such Fee is due.
(c) If Borrowers pay after acceleration or prepay the Revolving Loan
and terminate the Revolving Loan Commitment, whether voluntarily or
involuntarily and whether before or after acceleration of the Obligations, or if
any of the Commitments are otherwise terminated, Borrowers shall pay to Agent,
for the benefit of Lenders as liquidated damages and compensation for the costs
of being prepared to make funds available hereunder an amount equal to the
Applicable Percentage (as defined below) multiplied by the amount of the
Revolving Loan Commitment. As used herein, the term "Applicable Percentage"
shall mean, with respect to Revolving Credit Advances (i) one percent (1.00%),
in the case of a prepayment on or prior to the first anniversary of the Closing
Date and (ii) one-half of one percent (0.50%), in the case of a prepayment after
the first anniversary of the Closing Date but on or prior to the second
anniversary thereof. The Credit Parties agree that the Applicable Percentages
are a reasonable calculation of Lenders' lost profits in view of the
difficulties and impracticality of determining actual damages resulting from an
early termination of the Commitments. Notwithstanding the foregoing, no
prepayment fee shall be payable by Borrowers if prepayment occurs within 6
months following (a) Agent's reduction of the Eligible Accounts or Eligible
Inventory advance rates by greater than five percentage points from the advance
rates which were in effect 6 months prior to the date of such reduction or (b)
Agent's increase of Reserves by greater than ten percentage points of the amount
of Reserves outstanding 6 months prior to the time of such
17
increase, or (c) any combination of reductions of the Eligible Accounts advance
rate and increases in the amount of Reserves due to any increase in dilution of
Accounts during any 6 month period by greater than ten percentage points in the
aggregate, or (d) the Asbestos Reserve exceeding $20,000,000.
(d) Borrowers shall pay to Agent, for the ratable benefit of Revolving
Lenders, the Letter of Credit Fee as provided in Annex B.
1.10. Receipt of Payments. Borrowers shall make each payment under this
Agreement not later than 2:00 p.m. (New York time) on the day when due in
immediately available funds in Dollars to the Collection Account. For purposes
of computing interest and Fees and determining Borrowing Availability as of any
date, all payments shall be deemed received on the Business Day on which
immediately available funds therefor are received in the Collection Account
prior to 2:00 p.m. New York time. Payments received after 2:00 p.m. New York
time on any Business Day or on a day that is not a Business Day shall be deemed
to have been received on the following Business Day.
1.11. Application and Allocation of Payments.
(a) So long as no Default or Event of Default has occurred and is
continuing, (i) payments consisting of proceeds of Accounts received in the
ordinary course of business shall be applied to, the Revolving Loan; (ii)
voluntary prepayments shall be applied in accordance with the provisions of
Section 1.3(a); and (iii) mandatory prepayments shall be applied as set forth in
Sections 1.3(c) and 1.3(d). All payments and prepayments applied to a particular
Loan shall be applied ratably to the portion thereof held by each Lender as
determined by its Pro Rata Share. As to any other payment, and as to all
payments made when a Default or Event of Default has occurred and is continuing
or following the Commitment Termination Date, each Borrower hereby irrevocably
waives the right to direct the application of any and all payments received from
or on behalf of such Borrower, and each Borrower hereby irrevocably agrees that
Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations of Borrowers as Agent may deem advisable
notwithstanding any previous entry by Agent in the Loan Account or any other
books and records. In the absence of a specific determination by Agent with
respect thereto, payments shall be applied to amounts then due and payable in
the following order: (1) to Fees and Agent's expenses reimbursable hereunder;
(2) to interest on the Revolving Loans, (3) to principal payments on the
Revolving Loans and to provide cash collateral for Letter of Credit Obligations
in the manner described in Annex B, ratably to the aggregate, combined principal
balance of the Revolving Loans and outstanding Letter of Credit Obligations; and
(4) to all other Obligations, including expenses of Lenders to the extent
reimbursable under Section 11.3.
(b) Agent is authorized to, and at its sole election may, charge to
the Revolving Loan balance on behalf of each Borrower and cause to be paid all
Fees, expenses, Charges, costs (including insurance premiums in accordance with
Section 5.4(a)) and interest and principal, other than principal of the
Revolving Loan, owing by Borrowers under this Agreement or any of the other Loan
Documents if and to the extent Borrowers fail to pay promptly any such amounts
as and when due, even if the amount of such charges would exceed Borrowing
Availability at such time or would cause the balance of the Revolving Loan to
any
18
Borrower to exceed such Borrower's separate Borrowing Base after giving effect
to such charges. At Agent's option and to the extent permitted by law, any
charges so made shall constitute part of the Revolving Loan hereunder.
1.12. Loan Account and Accounting. Agent shall maintain a loan account (the
"Loan Account") on its books to record: all Advances, all payments made by
Borrowers, and all other debits and credits as provided in this Agreement with
respect to the Loans or any other Obligations. All entries in the Loan Account
shall be made in accordance with Agent's customary accounting practices as in
effect from time to time. The balance in the Loan Account, as recorded on
Agent's most recent printout or other written statement, shall, absent manifest
error, be presumptive evidence of the amounts due and owing to Agent and Lenders
by each Borrower; provided that any failure to so record or any error in so
recording shall not limit or otherwise affect any Borrower's duty to pay the
Obligations. Agent shall render to Borrower Representative a monthly accounting
of transactions with respect to the Loans setting forth the balance of the Loan
Account as to each Borrower for the immediately preceding month. Unless Borrower
Representative notifies Agent in writing of any objection to any such accounting
(specifically describing the basis for such objection), within sixty (60) days
after the date thereof, each and every such accounting shall (absent manifest
error) be deemed final, binding and conclusive on Borrowers 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 Borrowers. Notwithstanding any
provision herein contained to the contrary, any Lender may elect (which election
may be revoked) to dispense with the issuance of Notes to that Lender and may
rely on the Loan Account as evidence of the amount of Obligations from time to
time owing to it.
1.13. Indemnity.
(a) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "Indemnified
Person"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents
(collectively, "Indemnified Liabilities"); provided, that no such Credit Party
shall be liable for any indemnification to an Indemnified Person to the extent
that any such suit, action, proceeding, claim, damage, loss, liability or
expense results from that Indemnified Person's gross negligence or willful
misconduct. 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
19
HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS A
RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the terms
provided herein, if (i) any LIBOR Loans are repaid in whole or in part prior to
the last day of any applicable LIBOR Period (whether that repayment is made
pursuant to any provision of this Agreement or any other Loan Document or occurs
as a result of acceleration, by operation of law or otherwise); (ii) any
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) any Borrower shall refuse to accept any
borrowing of, or shall request a termination of, any borrowing of, conversion
into or continuation of, LIBOR Loans after Borrower Representative has given
notice requesting the same in accordance herewith; or (iv) any Borrower shall
fail to make any prepayment of a LIBOR Loan after Borrower Representative has
given a notice thereof in accordance herewith, then Borrowers shall jointly and
severally indemnify and hold harmless each Lender from and against all losses,
costs and expenses resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained. For the purpose of
calculating amounts payable to a Lender under this subsection, each Lender shall
be deemed to have actually funded its relevant LIBOR Loan through the purchase
of a deposit bearing interest at the LIBOR Rate in an amount equal to the amount
of that LIBOR Loan and having a maturity comparable to the relevant LIBOR
Period; provided, 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 Representative with its
written calculation of all amounts payable pursuant to this Section 1.13(b), and
(absent manifest error) such calculation shall be binding on the parties hereto
unless Borrower Representative shall object in writing within ten (10) Business
Days of receipt thereof, specifying the basis for such objection in detail.
1.14. Access. Each Credit Party that is a party hereto shall, during normal
business hours, from time to time upon at least two (2) Business Days' prior
notice as frequently as Agent reasonably determines to be appropriate: (a)
provide Agent and any of its officers, employees and agents access to its
properties, facilities, advisors and employees (including officers) of each
Credit Party and to the Collateral, (b) permit Agent, and any of its officers,
employees and agents, to inspect, audit and make extracts from any Credit
Party's books and records, and (c) permit Agent, and its officers, employees and
agents, to inspect, review, evaluate and make test verifications and counts of
the Accounts, Inventory and other Collateral of any Credit Party; provided,
however, that unless a Default or Event of Default has occurred and is
continuing, Borrowers' obligation to pay for such audits shall be limited to
three per calendar year. If a Default or Event of Default has occurred and is
continuing or if access is necessary to preserve or protect the Collateral as
determined by Agent, each such Credit Party shall provide such access to Agent
and to each Lender at all times and without advance notice. Furthermore, so long
as any Event of Default has occurred and is continuing, Borrowers shall provide
Agent and each Lender with access to their suppliers and customers. Each Credit
Party shall make available to Agent and its counsel, as quickly as is possible
under the circumstances, originals or copies of
20
all books and records that Agent may reasonably request. Each Credit Party shall
deliver any document or instrument necessary for Agent, as it may from time to
time reasonably request, to obtain records from any service bureau or other
Person that maintains records for such Credit Party, and shall maintain
duplicate records or supporting documentation on media, including computer tapes
and discs owned by such Credit Party. Agent will give Lenders at least five (5)
days' prior written notice of regularly scheduled audits. Representatives of
other Lenders may accompany Agent's representatives on regularly scheduled
audits at no charge to Borrowers.
1.15. Taxes.
(a) Any and all payments by each Borrower hereunder (including any
payments made pursuant to Section 12) or under the Notes shall be made, in
accordance with this Section 1.15, free and clear of and without deduction for
any and all present or future Taxes. If any Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder (including any
sum payable pursuant to Section 12) or under the Notes, (i) the sum payable
shall be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 1.15) Agent or Lenders, as applicable, receive an amount
equal to the sum they would have received had no such deductions been made, (ii)
such Borrower shall make such deductions, and (iii) such Borrower shall pay the
full amount deducted to the relevant taxing or other authority in accordance
with applicable law. Within thirty (30) days after the date of any payment of
Taxes, Borrower Representative shall furnish to Agent the original or a
certified copy of a receipt evidencing payment thereof. Agent and Lenders shall
not be obligated to return or refund any amounts received pursuant to this
Section.
(b) Each Credit Party that is a signatory hereto shall jointly and
severally indemnify and, within ten (10) days of demand therefor, pay Agent and
each Lender for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this Section 1.15) paid by Agent or such
Lender, as appropriate, and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside the
United States (a "Foreign Lender") as to which payments to be made under this
Agreement or under the Notes are exempt from United States withholding tax under
an applicable statute or tax treaty shall provide to Borrower Representative and
Agent a properly completed and executed IRS Form W-8ECI or Form W-8BEN or other
applicable form, certificate or document prescribed by the IRS or the United
States certifying as to such Foreign Lender's entitlement to such exemption (a
"Certificate of Exemption"). Any foreign Person that seeks to become a Lender
under this Agreement shall provide a Certificate of Exemption to Borrower
Representative and Agent prior to becoming a Lender hereunder. No foreign Person
may become a Lender hereunder if such Person fails to deliver a Certificate of
Exemption in advance of becoming a Lender.
1.16. Capital Adequacy; Increased Costs; Illegality.
21
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrowers
shall from time to time upon demand by such Lender (with a copy of such demand
to Agent) pay to Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower Representative and to Agent shall, absent
manifest error, be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any law
or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrowers shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower
Representative and to Agent by such Lender, shall be conclusive and binding on
Borrowers 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 Borrowers pursuant to this Section 1.16(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 Representative
through Agent, (i) the obligation of such Lender to agree to make or to make or
to continue to fund or maintain LIBOR Loans shall terminate and (ii) each
Borrower shall forthwith prepay in full all outstanding LIBOR Loans owing by
such Borrower to such Lender, together with interest accrued thereon, unless
Borrower Representative on behalf of such Borrower, within five (5) Business
Days after the delivery of such notice and demand, converts all LIBOR Loans into
Index Rate Loans.
(d) Within fifteen (15) days after receipt by Borrower Representative
of written notice and demand from any Lender (an "Affected Lender") for payment
of additional amounts or increased costs as provided in Sections 1.15(a),
1.16(a) or 1.16(b), Borrower Representative may, at its option, notify Agent and
such Affected Lender of its intention to
22
replace the Affected Lender. So long as no Default or Event of Default has
occurred and is continuing, Borrower Representative, with the consent of Agent,
may obtain, at Borrowers' expense, a replacement Lender ("Replacement Lender")
for the Affected Lender, which Replacement Lender must be reasonably
satisfactory to Agent. If Borrowers obtain a Replacement Lender within ninety
(90) days following notice of their intention to do so, the Affected Lender must
sell and assign its Loans and Commitments to such Replacement Lender for an
amount equal to the principal balance of all Loans held by the Affected Lender
and all accrued interest and Fees with respect thereto through the date of such
sale and such assignment shall not require the payment of an assignment fee to
Agent; provided, that Borrowers shall have reimbursed such Affected Lender for
the additional amounts or increased costs that it is entitled to receive under
this Agreement through the date of such sale and assignment. Notwithstanding the
foregoing, Borrowers shall not have the right to obtain a Replacement Lender if
the Affected Lender rescinds its demand for increased costs or additional
amounts (effective retroactively to the date of such demand) within fifteen (15)
days following its receipt of Borrowers' notice of intention to replace such
Affected Lender. Furthermore, if Borrowers give a notice of intention to replace
and do not so replace such Affected Lender within ninety (90) days thereafter,
Borrowers' rights under this Section 1.16(d) shall terminate with respect to
such Affected Lender and Borrowers shall promptly pay all increased costs or
additional amounts demanded by such Affected Lender pursuant to Sections
1.15(a), 1.16(a) and 1.16(b).
1.17. Single Loan. All Loans to each Borrower and all of the other
Obligations of each Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of that Borrower secured,
until the Termination Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1. Conditions to the Initial Loans. No Lender shall be obligated to make
any Loan or incur any Letter of Credit Obligations on the Closing Date, or to
take, fulfill, or perform any other action hereunder, until the following
conditions have been satisfied or provided for in a manner satisfactory to
Agent, or waived in writing by Agent and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or counterparts
hereof shall have been duly executed by Borrowers and each other Credit Party,
and delivered to Agent and Lenders; and Agent shall have received such
documents, instruments, agreements and legal opinions as Agent shall reasonably
request in connection with the transactions contemplated by this Agreement and
the other Loan Documents, including all those listed in the Closing Checklist
attached hereto as Annex D-1, each in form and substance reasonably satisfactory
to Agent.
(b) Intentionally Omitted.
(c) Approvals. Agent shall have received (i) satisfactory evidence
that the Credit Parties 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 (other than consents and approvals from
all requisite Governmental Authorities with respect to the Acquisition and the
issuance of additional equity in connection with the Additional
23
Capitalization Requirement), or (ii) an officer's certificate in form and
substance reasonably satisfactory to Agent affirming that no such consents or
approvals are required.
(d) Payment of Fees. Borrowers shall have paid the Fees required to be
paid on the Closing Date in the respective amounts specified in Section 1.9
(including the Fees specified in the GE Capital Fee Letter), and shall have
reimbursed Agent for all fees, costs and expenses of closing presented as of the
Closing Date.
(e) Capital Structure: Other Indebtedness. The capital structure of
each Credit Party and the terms and conditions of all Indebtedness of each
Credit Party not being repaid shall be acceptable to Agent in its reasonable
discretion.
(f) Due Diligence. Agent shall have completed its business and legal
due diligence, including a roll forward of its previous Collateral audit, with
results reasonably satisfactory to Agent.
(g) Subordinated Debt. No less than $90,000,000 shall be outstanding
under the Subordinated Debt Documents after giving effect to the Related
Transactions.
(h) Material Adverse Events. As of the Closing Date, there will have
been (i) since December 31, 2001, no material adverse change, individually or in
the aggregate, in the business, financial or other condition of Borrowers taken
as a whole, the industry in which Borrowers operate, or the Collateral which
will be subject to the security interest granted to Agent or in the prospects or
projections of Borrowers taken as a whole, (ii) no litigation commenced which,
if successful, would have a material adverse impact on Borrowers taken as a
whole, their businesses, or their ability to repay the loans, or which would
challenge the transactions under consideration, and (iii) since December 31,
2001, no material increase in the liabilities, liquidated or contingent, of
Borrowers taken as a whole, or a material decrease in the assets of Borrowers
taken as a whole.
2.2. Further Conditions to Each Loan. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Advance, convert or
continue any Loan as a LIBOR Loan or incur any Letter of Credit Obligation, if,
as of the date thereof:
(a) any representation or warranty by any Credit Party contained
herein or in any other Loan Document is untrue or incorrect 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 and Agent or Requisite Lenders have determined
not to make such Advance, convert or continue any Loan as LIBOR Loan or incur
such Letter of Credit Obligation as a result of the fact that such warranty or
representation is untrue or incorrect;
(b) any event or circumstance having a Material Adverse Effect has
occurred since the date hereof as determined by the Requisite Lenders and Agent
or Requisite Lenders have determined not to make such Advance, convert or
continue any Loan as a LIBOR Loan or incur such Letter of Credit Obligation as a
result of the fact that such event or circumstance has occurred;
24
(c) any Default or Event of Default has occurred and is continuing or
would result after giving effect to any Advance (or the incurrence of any Letter
of Credit Obligation), and Agent or Requisite Lenders shall have determined not
to make any Advance, convert or continue any Loan as a LIBOR Loan or incur any
Letter of Credit Obligation as a result of that Default or Event of Default; or
(d) after giving effect to any Advance (or the incurrence of any
Letter of Credit Obligations), (i) the outstanding principal amount of the
aggregate Revolving Loan would exceed the lesser of the Aggregate Borrowing Base
and the Maximum Amount or (ii) the outstanding principal amount of the Revolving
Loan of the applicable Borrower would exceed such Borrower's separate Borrowing
Base.
The request and acceptance by any Borrower of the proceeds of any Advance, the
incurrence of any Letter of Credit Obligations or the conversion or continuation
of any Loan into, or as, a LIBOR Loan shall be deemed to constitute, as of the
date thereof, (i) a representation and warranty by Borrowers that the conditions
in this Section 2.2 have been satisfied and (ii) a reaffirmation by Borrowers of
the cross-guaranty provisions set forth in Section 12 and of the granting and
continuance of Agent's Liens, on behalf of itself and Lenders, pursuant to the
Collateral Documents.
2.3. Conditions to Acquisition Loan Facility. No Lender shall be obligated
to fund any Tranche B Revolving Credit Advance until the following conditions
have been satisfied or provided for in a manner satisfactory to Agent, or waived
in writing by Agent and Lenders:
(a) the conditions of Section 2.2 are satisfied after giving effect to
the Acquisition; and
(b) the Acquisition Conditions are satisfied.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans and to incur Letter of Credit
Obligations, the Credit Parties executing this Agreement, jointly and severally,
make the following representations and warranties to Agent and each Lender with
respect to all Credit Parties, each and all of which shall survive the execution
and delivery of this Agreement.
3.1. Corporate Existence; Compliance with Law. Each Credit Party (a) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization set forth in Disclosure Schedule
(3.1); (b) is duly qualified to conduct business and is in good standing in each
other jurisdiction where its ownership or lease of property or the conduct of
its business requires such qualification, except where the failure to be so
qualified would not result in exposure to losses, damages or liabilities in
excess of $100,000; (c) has the requisite power and authority and the legal
right to own, pledge, mortgage or otherwise encumber and operate its properties,
to lease the property it operates under lease and to conduct its business as
now, heretofore and proposed to be conducted; (d) subject to specific
representations regarding Environmental Laws and any scheduled exceptions
thereto, has all material licenses, permits,
25
consents or approvals from or by, and has made all material filings with, and
has given all material 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 bylaws or partnership or operating
agreement, as applicable; and (f) subject to specific representations and any
scheduled exceptions thereto set forth herein regarding ERISA, Environmental
Laws, tax and other laws, is in compliance with all applicable provisions of
law, except where the failure to comply, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
3.2. Executive Offices, Collateral Locations, FEIN. As of the Closing Date,
the current location of each Credit Party's chief executive office and the
warehouses and premises at which any Collateral is located are set forth in
Disclosure Schedule (3.2), and, except as set forth in Disclosure Schedule
(3.2), none of such locations has changed within the twelve (12) months
preceding the Closing Date. In addition, Disclosure Schedule (3.2) lists the
federal employer identification number of each Credit Party.
3.3. Corporate Power, Authorization, Enforceable Obligations. The
execution, delivery and performance by each Credit Party of the Loan Documents
to which it is a party and the creation of all Liens provided for therein: (a)
are within such Person's power; (b) have been duly authorized by all necessary
corporate, limited liability company or limited partnership action; (c) do not
contravene any provision of such Person's charter, bylaws or partnership or
operating agreement as applicable; (d) do not violate any law or regulation, or
any order or decree of any court or Governmental Authority; (e) do not conflict
with or result in the breach or termination of, constitute a default under or
accelerate or permit the acceleration of any performance required by, any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which such Person is a party or by which such Person or any of its property is
bound; (f) do not result in the creation or imposition of any Lien upon any of
the property of such Person other than those in favor of Agent, on behalf of
itself and Lenders, pursuant to the Loan Documents; and (g) do not require the
consent or approval of any Governmental Authority or any other Person, except
those referred to in Section 2.1(c), all of which will have been duly obtained,
made or complied with prior to the Closing Date. Each of the Loan Documents
shall be duly executed and delivered by each Credit Party that is a party
thereto and each such Loan Document shall constitute a legal, valid and binding
obligation of such Credit Party enforceable against it in accordance with its
terms.
3.4. Financial Statements and Projections. Except for the Projections, all
Financial Statements concerning Borrowers and their respective Subsidiaries that
are referred to below have been prepared in accordance with GAAP consistently
applied throughout the periods covered (except as disclosed therein and except,
with respect to unaudited Financial Statements, for the absence of footnotes and
normal year-end audit adjustments) and present fairly in all material respects
the financial position of the Persons covered thereby as at the dates thereof
and the results of their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial Statements attached
hereto as Disclosure Schedule (3.4(a)) have been delivered on the date hereof:
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(i) The audited consolidated and consolidating balance sheets at
December 31, 2001 and the related statements of income and cash flows of
Borrowers and their Subsidiaries for the Fiscal Years then ended, certified by
KPMG LLP.
(ii) The unaudited balance sheet(s) at November 30, 2002 and the
related statement(s) of income and cash flows of Borrowers and their
Subsidiaries for the eleven months then ended.
(b) Pro Forma. The Pro Forma delivered on the date hereof and attached
hereto as Disclosure Schedule (3.4(b)) was prepared by Borrowers giving pro
forma effect to the Related Transactions, was based on the projected
consolidated and consolidating balance sheets of Borrowers and their
Subsidiaries delivered January 28, 2003, and was prepared in accordance with
GAAP, with only such adjustments thereto as would be required in accordance with
GAAP.
(c) Projections. The Projections delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(c)) have been prepared by Borrowers
in light of the past operations of their businesses and reflect projections for
the five year period beginning on January 1, 2003 on a quarterly basis for the
first year and on a year-by-year basis thereafter. The Projections are based
upon the same accounting principles as those used in the preparation of the
financial statements described above and the estimates and assumptions stated
therein, all of which Borrowers believe to be reasonable and fair in light of
current conditions and current facts known to Borrowers and, as of the Closing
Date, reflect Borrowers' good faith and reasonable estimates of the future
financial performance of Borrowers.
3.5. Material Adverse Effect. Between December 31, 2001 and the Closing
Date: (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Pro Forma and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party's
assets and no law or regulation applicable to any Credit Party has been adopted
that in either case has had or could reasonably be expected to have a Material
Adverse Effect, and (c) no Credit Party is in default and to the best of
Borrowers' knowledge no third party is in default under any material contract,
lease or other agreement or instrument, which defaults alone or in the aggregate
could reasonably be expected to have a Material Adverse Effect. Between December
31, 2001 and the Closing Date no event has occurred, that alone or together with
other events, could reasonably be expected to have a Material Adverse Effect.
3.6. Ownership of Property; Liens. As of the Closing Date, the real estate
("Real Estate") listed in Disclosure Schedule (3.6) constitutes all of the real
property owned, leased, subleased, or used by any Credit Party. Each Credit
Party owns good and marketable fee simple title to all of its owned Real Estate,
and valid leasehold interests in all of its leased Real Estate, all as described
on Disclosure Schedule (3.6), and copies of all such leases or a summary of
terms thereof reasonably satisfactory to Agent have been delivered to Agent.
Disclosure Schedule (3.6) further describes any Real Estate with respect to
which any Credit Party is a lessor, sublessor or assignor as of the Closing
Date. Each Credit Party also has good and marketable title to, or valid
leasehold interests in, all of its personal property and assets. As of
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the Closing Date, none of the properties and assets of any Credit Party are
subject to any Liens other than Permitted Encumbrances, and except as disclosed
on Disclosure Schedule 3.17, there are no facts, circumstances or conditions
known to any Credit Party that may result in any Liens (including Liens arising
under Environmental Laws) other than Permitted Encumbrances. Each Credit Party
has received all deeds, assignments, waivers, consents, nondisturbance and
attornment or similar agreements, bills of sale and other documents, and has
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect such Credit Party's right, title and interest in and to all
such Real Estate and other properties and assets. Disclosure Schedule (3.6) also
describes any purchase options, rights of first refusal or other similar
contractual rights pertaining to any Real Estate. As of the Closing Date, no
portion of any Credit Party's Real Estate has suffered any material damage by
fire or other casualty loss that has not heretofore been repaired and restored
in all material respects to its original condition or otherwise remedied. As of
the Closing Date, all material permits required to have been issued or
appropriate to enable the Real Estate to be lawfully occupied and used for all
of the purposes for which it is currently occupied and used have been lawfully
issued and are in full force and effect.
3.7. Labor Matters. As of the Closing Date (a) no strikes or other material
labor disputes against any Credit Party are pending or, to any Credit Party's
knowledge, threatened; (b) hours worked by and payment made to employees of each
Credit Party comply with the Fair Labor Standards Act and each other federal,
state, local or foreign law applicable to such matters; (c) all payments due
from any Credit Party for employee health and welfare insurance have been paid
or accrued as a liability on the books of such Credit Party; (d) except as set
forth in Disclosure Schedule (3.7), no Credit Party is a party to or bound by
any collective bargaining agreement, management agreement, consulting agreement,
employment agreement, bonus, restricted stock, stock option, or stock
appreciation plan or agreement or any similar plan, agreement or arrangement
(and true and complete copies of any agreements described on Disclosure Schedule
(3.7) have been delivered to Agent); (e) there is no organizing activity
involving any Credit Party pending or, to any Credit Party's knowledge,
threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g) except as set forth in Disclosure Schedule (3.7), there are
no material complaints or charges against any Credit Party pending or, to the
knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by any Credit
Party of any individual.
3.8. Ventures, Subsidiaries and Affiliates; Outstanding Stock and
Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party is owned by
each of the Stockholders and in the amounts set forth in Disclosure Schedule
(3.8). Except as set forth in Disclosure Schedule (3.8), there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed
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Indebtedness of each Credit Party as of the Closing Date (except for the
Obligations) is described in Section 6.3 (including Disclosure Schedule (6.3)).
None of the Credit Parties or their Subsidiaries identified on Disclosure
Schedule (3.8) as "inactive" has any material assets (except Stock of their
Subsidiaries) or any Indebtedness or Guaranteed Indebtedness or conducts any
trade or business.
3.9. Government Regulation. No Credit Party is an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940. No Credit Party is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, or any other federal or state
statute that restricts or limits its ability to incur Indebtedness or to perform
its obligations hereunder. The making of the Loans by Lenders to Borrowers, the
incurrence of the Letter of Credit Obligations on behalf of Borrowers, the
application of the proceeds thereof and repayment thereof and the consummation
of the Related Transactions will not violate any provision of any such statute
or any rule, regulation or order issued by the Securities and Exchange
Commission.
3.10. Margin Regulations. No Credit Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
"Margin Stock"). No Credit Party owns any Margin Stock, and none of the proceeds
of the Loans or other extensions of credit under this Agreement will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any Indebtedness that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11. Taxes. All tax returns, reports and statements, including information
returns, required by any Governmental Authority to be filed by any Credit Party
have been filed with the appropriate Governmental Authority and all Charges have
been paid prior to the date on which any fine, penalty, interest or late charge
may be added thereto for nonpayment thereof (or any such fine, penalty,
interest, late charge or loss has been paid), excluding (a) Charges or other
amounts being contested in accordance with Section 5.2(b) and (b) filings
relating to local qualifications to do business where the exposure to losses,
damages or liabilities is less than $25,000 in the aggregate for all
jurisdictions. Proper and accurate amounts have been withheld by each Credit
Party from its respective employees for all periods in full and complete
compliance with all applicable federal, state, local and foreign laws and such
withholdings have been timely paid to the respective Governmental Authorities.
Disclosure Schedule (3.11) sets forth as of the Closing Date those taxable years
for which any Credit Party's tax returns are currently being audited by the IRS
or any other applicable Governmental Authority, and any assessments or
threatened assessments in connection with such audit, or otherwise currently
outstanding. Except as described in Disclosure Schedule (3.11), no Credit Party
has executed or filed with the IRS or any other Governmental Authority any
agreement or other document
29
extending, or having the effect of extending, the period for assessment or
collection of any Charges. None of the Credit Parties and their respective
predecessors are liable for any Charges: (a) under any agreement (including any
tax sharing agreements) or (b) to each Credit Party's knowledge, as a
transferee. As of the Closing Date, no Credit Party has agreed or been requested
to make any adjustment under IRC Section 481(a), by reason of a change in
accounting method or otherwise, which would reasonably be expected to have a
Material Adverse Effect.
3.12. ERISA.
(a) Disclosure Schedule (3.12) lists (i) all ERISA Affiliates and (ii)
all Plans and separately identifies all Pension Plans, including Title IV Plans,
Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree Welfare
Plans. Copies of all such listed Plans, together with a copy of the latest form
IRS/DOL 5500-series, as applicable, for each such Plan, have been made available
to Agent. Except with respect to Multiemployer Plans, each Qualified Plan has
been determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax-exempt status. Each Plan is in compliance
with the applicable provisions of ERISA, the IRC and its terms, including the
timely filing of all reports required under the IRC or ERISA, including the
statement required by 29 CFR Section 2520.104-23. Neither any Credit Party nor
ERISA Affiliate has failed to make any contribution or pay any amount due as
required by either Section 412 of the IRC or Section 302 of ERISA or the terms
of any such Plan. No "prohibited transaction," as defined in Section 406 of
ERISA and Section 4975 of the IRC, has occurred with respect to any Plan, that
would subject any Credit Party to a material tax on prohibited transactions
imposed by Section 502(i) of ERISA or Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (3.12): (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
any Credit Party, 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) no Credit Party
or 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 of any Credit Party or ERISA
Affiliate has been terminated, whether or not in a "standard termination" as
that term is used in Section 4041(b)(1) of ERISA, nor has any Title IV Plan of
any Credit Party or any ERISA Affiliate (determined at any time within the last
five years) with Unfunded Pension Liabilities been transferred outside of the
"controlled group" (within the meaning of Section 4001(a)(14) of ERISA) of any
Credit Party or ERISA Affiliate (determined at such time); (vi) except in the
case of any ESOP, Stock of all Credit Parties and their ERISA Affiliates makes
up, in the aggregate, no more than 10% of fair market value of the assets of any
Plan measured on the basis of fair market value as of the latest valuation date
of any Plan; and (vii) 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 an equivalent rating by another
nationally recognized rating agency.
3.13. No Litigation. No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of any Credit Party, threatened
against any Credit Party,
30
before any Governmental Authority or before any arbitrator or panel of
arbitrators (collectively, "Litigation"), (a) that challenges any Credit Party's
right or power to enter into or perform any of its obligations under the Loan
Documents to which it is a party, or the validity or enforceability of any Loan
Document or any action taken thereunder, or (b) that, excluding Asbestos Claims
in an aggregate amount equal to the Asbestos Reserve, has a reasonable risk of
being determined adversely to any Credit Party and that, if so determined, could
be reasonably be expected to have a Material Adverse Effect. Except as set forth
on Disclosure Schedule (3.13), as of the Closing Date there is no Litigation
pending or, to any Credit Party's knowledge, threatened, that seeks damages in
excess of $100,000 or injunctive relief against, or alleges criminal misconduct
of, any Credit Party.
3.14. Brokers. No broker or finder brought about the obtaining, making or
closing of the Loans or the Related Transactions (other than Xxxxxxx Xxxxx in
connection with the Acquisition and the issuance of additional equity in
connection with the Additional Capitalization Requirement), and no Credit Party
or Affiliate thereof has any obligation to any Person in respect of any finder's
or brokerage fees in connection therewith (other than Xxxxxxx Sachs).
3.15. Intellectual Property. As of the Closing Date, each Credit Party owns
or has rights to use all Intellectual Property necessary to continue to conduct
its business as now or heretofore conducted by it or proposed to be conducted by
it, and each Patent, Trademark, Copyright and License is listed, together with
application or registration numbers, as applicable, in Disclosure Schedule
(3.15). Each Credit Party uses reasonable commercial efforts to conduct its
business and affairs so as to avoid infringement of or interference with any
Intellectual Property of any other Person in any material respect. Except as set
forth in Disclosure Schedule (3.15), no Credit Party is aware of any
infringement claim by any other Person with respect to any Intellectual
Property.
3.16. Full Disclosure. No information contained in this Agreement, any of
the other Loan Documents, any Projections, Financial Statements or Collateral
Reports or other written reports from time to time prepared by any Credit Party
and delivered hereunder or any written statement prepared by any Credit Party
and furnished by or on behalf of any Credit Party to Agent or any Lender
pursuant to the terms of this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading in
light of the circumstances under which they were made. The Liens granted to
Agent, on behalf of itself and Lenders, pursuant to the Collateral Documents
will at all times be fully perfected first priority Liens in and to the
Collateral described therein, subject, as to priority, only to Permitted
Encumbrances.
3.17. Environmental Matters.
(a) Except as set forth in Disclosure Schedule (3.17), as of the
Closing Date: (i) the Real Estate is free of contamination from any Hazardous
Material except for such contamination that would not adversely impact the value
or marketability of such Real Estate and that would not result in Environmental
Liabilities that could reasonably be expected to exceed $200,000; (ii) no Credit
Party has caused or suffered to occur any Release of Hazardous Materials on, at,
in, under, above, to, from or about any of its Real Estate in violation of
31
Environmental Laws and Environmental Permits; (iii) the Credit Parties are and
have been in compliance with all Environmental Laws, except for such
noncompliance that would not result in Environmental Liabilities which could
reasonably be expected to exceed $200,000; (iv) the Credit Parties have
obtained, and are in compliance with, all Environmental Permits required by
Environmental Laws for the operations of their respective businesses as
presently conducted or as proposed to be conducted, except where the failure to
so obtain or comply with such Environmental Permits would not result in
Environmental Liabilities that could reasonably be expected to exceed $200,000,
and all such Environmental Permits are valid, uncontested and in good standing;
(v) no Credit Party is involved in operations or knows of any facts,
circumstances or conditions, including any Releases of Hazardous Materials, that
are likely to result in any Environmental Liabilities of such Credit Party which
could reasonably be expected to exceed $200,000, and no Credit Party has
consented to any current or former tenant or occupant of the Real Estate
engaging in any such operations; (vi) there is no Litigation arising under or
related to any Environmental Laws, Environmental Permits or Hazardous Material
that seeks damages, penalties, fines, costs or expenses in excess of $200,000 or
injunctive relief against, or that alleges criminal misconduct by, any Credit
Party; (vii) no notice has been received by any Credit Party identifying it as a
"potentially responsible party" or requesting information under CERCLA or
analogous state statutes, and to the knowledge of the Credit Parties, there are
no facts, circumstances or conditions that may result in any Credit Party being
identified as a "potentially responsible party" under CERCLA or analogous state
statutes; and (viii) the Credit Parties have provided to Agent copies of all
existing environmental reports, reviews and audits and all written information
pertaining to actual or potential Environmental Liabilities, in each case
relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that Agent (i) is
not now, and has not ever been, in control of any of the Real Estate or any
Credit Party's affairs, and (ii) does not have the capacity through the
provisions of the Loan Documents or otherwise to influence any Credit Party's
conduct with respect to the ownership, operation or management of any of its
Real Estate or compliance with Environmental Laws or Environmental Permits.
3.18. Insurance. Disclosure Schedule (3.18) lists all insurance policies of
any nature maintained, as of the Closing Date, for current occurrences by each
Credit Party, as well as a summary of the terms of each such policy.
3.19. Deposit and Disbursement Accounts. Disclosure Schedule (3.19) lists
all banks and other financial institutions at which any Credit Party maintains
deposit or other accounts as of the Closing Date, including any Disbursement
Accounts, and such Schedule correctly identifies the name, address and telephone
number of each depository, the name in which the account is held, a description
of the purpose of the account, and the complete account number therefor.
3.20. Government Contracts. Except as set forth in Disclosure Schedule
(3.20), as of the Closing Date, no Credit Party is a party to any contract or
agreement with any Governmental Authority and no Credit Party's Accounts are
subject to the Federal Assignment of Claims Act (31 U.S.C. Section 3727) or any
similar state or local law.
32
3.21. Customer and Trade Relations. As of the Closing Date, there exists no
actual or, to the knowledge of any Credit Party, threatened termination or
cancellation of, or any material adverse modification or change in: the business
relationship of any Credit Party with any customer or group of customers whose
purchases during the preceding 12 months caused them to be ranked among the ten
largest customers of such Credit Party; or the business relationship of any
Credit Party with any supplier material to its operations.
3.22. Agreements and Other Documents. Disclosure Schedule (3.22) accurately
lists each of the following agreements or documents to which any Credit Party is
subject as of the Closing Date: supply agreements and purchase agreements not
terminable by such Credit Party within 60 days following written notice issued
by such Credit Party and involving transactions in excess of $3,000,000 with
respect to vendor supply agreements and $6,000,000 with respect to customer
purchase agreements, in each case per annum; leases 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; any surety bond agreement or bonding
requirement with respect to products or services sold by it or any trademark or
patent license agreement with respect to products sold by it; any other licenses
and permits held by the Credit Parties, the absence of which could be reasonably
likely to have a Material Adverse Effect; instruments and documents evidencing
any Indebtedness or Guaranteed Indebtedness of such Credit Party and any Lien
granted by such Credit Party with respect thereto; and instruments and
agreements evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of such Credit Party.
3.23. Solvency. Both before and after giving effect to (a) the Loans and
Letter of Credit Obligations to be made or incurred on the Closing Date or such
other date as Loans and Letter of Credit Obligations requested hereunder are
made or incurred, (b) the disbursement of the proceeds of such Loans pursuant to
the instructions of Borrower Representative; (c) the consummation of the other
Related Transactions; and (d) the payment and accrual of all transaction costs
in connection with the foregoing, each Credit Party is and will be Solvent.
3.24. Subordinated Debt. As of the Closing Date, Borrowers have delivered
to Agent a complete and correct copy of the Subordinated Debt Documents then in
effect (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other documents delivered pursuant thereto or
in connection therewith). SMP has the corporate power and authority to incur the
Indebtedness evidenced by such Subordinated Debt Documents. The subordination
provisions of such Subordinated Debt Documents are enforceable against the
holders of such Subordinated Debt Documents by Agent and Lenders. All
Obligations, including the Letter of Credit Obligations, constitute senior
Indebtedness entitled to the benefits of the subordination provisions contained
in such Subordinated Debt Documents. Borrowers acknowledge that Agent and each
Lender are entering into this Agreement and are extending the Commitments in
reliance upon the subordination provisions of such Subordinated Debt Documents
and this Section 3.24.
Notwithstanding the foregoing references in this Section 3 to "the Closing
Date", such representations and warranties shall be deemed amended to refer to
"the Acquisition Closing
33
Date" when and if the Acquisition is consummated and as amended shall be subject
to Sections 2.2 and 2.3 of this Agreement.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1. Reports and Notices.
(a) Each Credit Party executing this Agreement hereby agrees that from
and after the Closing Date and until the Termination Date, it shall deliver to
Agent or to Agent and Lenders, as required, the Financial Statements, notices,
Projections and other information at the times, to the Persons and in the manner
set forth in Annex E.
(b) Each Credit Party executing this Agreement hereby agrees that,
from and after the Closing Date and until the Termination Date, it shall deliver
to Agent or to Agent and Lenders, as required, the various Collateral Reports
(including Borrowing Base Certificates in the form of Exhibit 4.1(b)) at the
times, to the Persons and in the manner set forth in Annex F.
4.2. Communication with Accountants. Each Credit Party executing this
Agreement authorizes (a) Agent and (b) so long as an Event of Default has
occurred and is continuing, each Lender, to communicate directly with its
independent certified public accountants, including KPMG LLP, and authorizes
and, at Agent's request, shall instruct those accountants and advisors to
disclose and make available to Agent and each Lender any and all Financial
Statements and other supporting financial documents, schedules and information
relating to any Credit Party (including copies of any issued management letters)
with respect to the business, financial condition and other affairs of any
Credit Party. Unless an Event of Default has occurred which is then continuing,
Agent shall (i) notify SMP at least two (2) Business Days prior to any such
communication with its accountants, and (ii) permit Borrowers to participate in
any such discussions or meetings.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1. Maintenance of Existence and Conduct of Business. Each Credit Party
shall: do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence 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 (5.1) or
reported in accordance with Section 6.15.
5.2. Payment of Charges.
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(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax, social
security and unemployment withholding with respect to its employees, (ii) lawful
claims for labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen or bailees, in each case,
before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges, Taxes or claims described in
Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of such Credit Party, in accordance with
GAAP; (ii) no Lien shall be imposed to secure payment of such Charges (other
than payments to warehousemen and/or bailees) that is superior to any of the
Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; and (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met.
5.3. Books and Records. Each Credit Party shall keep adequate books and
records with respect to its business activities in which proper entries,
reflecting all financial transactions, are made in accordance with GAAP and on a
basis consistent with the Financial Statements attached as Disclosure Schedule
(3.4(a)).
5.4. Insurance; Damage to or Destruction of Collateral.
(a) The Credit Parties shall, at their sole cost and expense, maintain
the policies of insurance described on Disclosure Schedule (3.18) as in effect
on the date hereof or otherwise in form and amounts and with insurers reasonably
acceptable to Agent. Such policies of insurance (or the loss payable and
additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide thirty (30) days prior written
notice (or 10 days in the case of non-payment of premiums) to Agent in the event
of any non-renewal, cancellation or amendment of any such insurance policy. If
any Credit Party at any time or times hereafter shall fail to obtain or maintain
any of the policies of insurance required above, or to pay all premiums relating
thereto, Agent may at any time or times thereafter obtain and maintain such
policies of insurance and pay such premiums and take any other action with
respect thereto that Agent deems advisable. Agent shall have no obligation to
obtain insurance for any Credit Party or pay any premiums therefor. By doing so,
Agent shall not be deemed to have waived any Default or Event of Default arising
from any Credit Party's failure to maintain such insurance or pay any premiums
therefor. All sums so disbursed, including reasonable attorneys' fees, court
costs and other charges related thereto, shall be payable on demand by Borrowers
to Agent and shall be additional Obligations hereunder secured by the
Collateral.
35
(b) Agent reserves the right at any time upon any change in any Credit
Party's risk profile (including any change in the product mix maintained by any
Credit Party or any laws affecting the potential liability of such Credit Party)
to require additional forms and limits of insurance to, in Agent's opinion,
adequately protect both Agent's and Lenders' interests in all or any portion of
the Collateral and to ensure that each Credit Party is protected by insurance in
amounts and with coverage customary for its industry. If reasonably requested by
Agent, each Credit Party shall deliver to Agent from time to time a report of a
reputable insurance broker, reasonably satisfactory to Agent, with respect to
its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and substance
reasonably satisfactory to Agent, endorsements to (i) all "All Risk" and
business interruption insurance naming Agent, on behalf of itself and Lenders,
as loss payee, and (ii) all general liability and other liability policies
naming Agent, on behalf of itself and Lenders, as additional insured. Each
Credit Party irrevocably makes, constitutes and appoints Agent (and all
officers, employees or agents designated by Agent), so long as any Event of
Default has occurred and is continuing or the anticipated insurance proceeds
exceed $500,000, as such Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower Representative shall promptly notify Agent of any
loss, damage, or destruction to the Collateral in the amount of $250,000 or
more, whether or not covered by insurance. After deducting from such proceeds
(i) the expenses, if any, incurred by Agent in the collection or handling
thereof, and (ii) the amounts required to be paid to creditors (other than
Lenders) having Permitted Encumbrances, Agent may, at its option, apply such
proceeds to the reduction of the Obligations in accordance with Section 1.3(d)
(provided that in the case of insurance proceeds pertaining to any Credit Party
that is not a Borrower, such insurance proceeds shall be applied ratably to all
of the Loans owing by each Borrower), or permit or require the applicable Credit
Party to use such money, or any part thereof, to replace, repair, restore or
rebuild the Collateral in a diligent and expeditious manner with materials
and workmanship of substantially the same quality as existed before the
loss, damage or destruction. Notwithstanding the foregoing, if the casualty
giving rise to such insurance proceeds could not reasonably be expected to have
a Material Adverse Effect and such insurance proceeds do not exceed $500,000 in
the aggregate, Agent shall permit the applicable Credit Party to replace,
restore, repair or rebuild the property; provided that if such Credit Party
shall not have completed or entered into binding agreements to complete such
replacement, restoration, repair or rebuilding within 180 days of such casualty,
Agent may apply such insurance proceeds to the Obligations in accordance with
Section 1.3(d); provided, further, that in the case of insurance proceeds
pertaining to any Credit Party that is not a Borrower, such insurance proceeds
shall be applied ratably to all of the Loans owing by each Borrower. All
insurance proceeds that are to be made available to any Borrower to replace,
repair, restore or rebuild the Collateral shall be applied by Agent to reduce
the outstanding principal balance of the Revolving Loan of such Borrower (which
application shall not result in a permanent reduction of the Revolving Loan
Commitment) and upon such application, Agent shall establish a Reserve against
the separate Borrowing Base of the affected Borrower in an amount equal to the
amount of such proceeds so applied. All insurance proceeds made available to any
Credit Party that is not a Borrower to replace, repair,
36
restore or rebuild Collateral shall be deposited in a cash collateral account.
Thereafter, such funds shall be made available to that Borrower or Credit Party
to provide funds to replace, repair, restore or rebuild the Collateral as
follows: (i) Borrower Representative shall request a Revolving Credit Advance
or a release from the cash collateral account be made to such Borrower or
Credit Party in the amount requested to be released; (ii) so long as the
conditions set forth in Section 2.2 have been met, Revolving Lenders shall
make such Revolving Credit Advance or Agent shall release funds from the cash
collateral account; and (iii) in the case of insurance proceeds applied against
the Revolving Loan, the Reserve established with respect to such insurance
proceeds shall be reduced by the amount of such Revolving Credit Advance. To
the extent not used to replace, repair, restore or rebuild the Collateral,
such insurance proceeds shall be applied in accordance with Section 1.3(d);
provided that in the case of insurance proceeds pertaining to any Credit Party
that is not a Borrower, such insurance proceeds shall be applied ratably to
all of the Loans owing by each Borrower.
5.5. Compliance with Laws. Each Credit Party shall comply with all federal,
state, local and foreign laws and regulations applicable to it, including those
relating to ERISA, labor laws and Environmental Laws and Environmental Permits,
except to the extent that the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
5.6. Supplemental Disclosure. From time to time as may be reasonably
requested by Agent (which request will not be made more frequently than once
each year absent the occurrence and continuance of a Default or an Event of
Default) or at Credit Parties' election, the Credit Parties shall supplement
each Disclosure Schedule hereto, or any representation herein or in any other
Loan Document, with respect to any matter hereafter arising that, if existing or
occurring at the date of this Agreement, would have been required to be set
forth or described in such Disclosure Schedule or as an exception to such
representation or that is necessary to correct any information in such
Disclosure Schedule or representation which has been rendered inaccurate thereby
(and, in the case of any supplements to any Disclosure Schedule, such Disclosure
Schedule shall be appropriately marked to show the changes made therein);
provided that (a) except as provided below, no such supplement to any such
Disclosure Schedule or representation shall amend, supplement or otherwise
modify any Disclosure Schedule or representation, or be or be deemed a waiver of
any Default or Event of Default resulting from the matters disclosed therein,
except as consented to by Agent and Requisite Lenders in writing, and (b) no
supplement shall be required or permitted as to representations and warranties
that relate solely to the Closing Date. Borrowers shall be permitted to amend
the Disclosure Schedules to this Agreement in contemplation of the Acquisition
to become effective on the Acquisition Closing Date if the information contained
in any such Disclosure Schedule is no longer true and correct (x) solely due to
Borrowers giving effect to the Acquisition, or (y) as a result of the new
effective date of the representation to which the Disclosure Schedule relates
becoming the Acquisition Closing Date as provided for pursuant to the last
paragraph of Section 3, but only if the new information disclosed would not have
otherwise given rise to a Default or Event of Default.
5.7. Intellectual Property. Each Credit Party will conduct its business and
affairs without infringement of or interference with any Intellectual Property
of any other Person in any material respect and shall comply in all material
respects with the terms of its Licenses.
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5.8. Environmental Matters. Each Credit Party shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate in compliance with all Environmental Laws and Environmental
Permits other than noncompliance that could not reasonably be expected to have a
Material Adverse Effect; (b) implement any and all investigation, remediation,
removal and response actions that are appropriate or 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 Agent promptly after such Credit Party becomes aware of any
violation of Environmental Laws or Environmental Permits or any Release on, at,
in, under, above, to, from or about any Real Estate that is reasonably likely to
result in Environmental Liabilities in excess of $25,000; and (d) promptly
forward to Agent a copy of any order, notice, request for information or any
written communication or report received by such Credit Party in connection with
any such violation or Release or any other matter relating to any Environmental
Laws or Environmental Permits that could reasonably be expected to result in
Environmental Liabilities in excess of $25,000, in each case whether or not the
Environmental Protection Agency or any Governmental Authority has taken or
threatened any action in connection with any such violation, Release or other
matter. If Agent at any time has a reasonable basis to believe that there may be
a violation of any Environmental Laws or Environmental Permits by any Credit
Party or any Environmental Liability arising thereunder, or a Release of
Hazardous Materials on, at, in, under, above, to, from or about any of its Real
Estate, that, in each case, could reasonably be expected to have a Material
Adverse Effect, then each Credit Party shall, upon Agent's written request, and
subject to the requirements and restrictions imposed by any Person from which
such Credit Party leases the applicable Real Estate, (i) cause the performance
of such environmental audits including subsurface sampling of soil and
groundwater, and preparation of such environmental reports, at Borrowers'
expense, as Agent may from time to time reasonably request, which shall be
conducted by reputable environmental consulting firms reasonably acceptable to
Agent and shall be in form and substance reasonably acceptable to Agent, and
(ii) permit Agent or its representatives to have reasonable access to all Real
Estate for the purpose of conducting such environmental audits and testing as
Agent deems appropriate, including subsurface sampling of soil and groundwater.
Borrowers shall reimburse Agent for the costs of such audits and tests and the
same will constitute a part of the Obligations secured hereunder.
5.9. Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real
Estate Purchases. Each Credit Party shall obtain a landlord's agreement,
mortgagee agreement or bailee letter, as applicable, from the lessor of each
leased property, mortgagee of owned property or bailee with respect to any
warehouse, processor or converter facility or other location where Collateral is
stored or 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 Collateral at that location, and shall otherwise be
reasonably satisfactory in form and substance to Agent. With respect to such
locations or warehouse space leased or owned as of the Closing Date and
thereafter, if Agent has not received a landlord or mortgagee agreement or
bailee letter as of the Closing Date (or, if later, as of the date such location
is acquired or leased), any Borrower's Eligible Inventory at that location
shall, in Agent's discretion, be excluded from the Borrowing Base or be subject
to such Reserves as may be established by Agent in its reasonable credit
judgment. After the Closing Date, no real property or warehouse space shall be
leased by any Credit Party and no Inventory shall be shipped to a processor or
converter under
38
arrangements established after the Closing Date without the prior written
consent of Agent (which consent, in Agent's discretion, may be conditioned upon
the exclusion from the Borrowing Base of Eligible Inventory at that location or
the establishment of Reserves acceptable to Agent) or, unless and until a
reasonably satisfactory landlord agreement or bailee letter, as appropriate,
shall first have been obtained with respect to such location. Each Credit Party
shall timely and fully pay and perform its obligations under all leases and
other agreements with respect to each leased location or public warehouse where
any Collateral is or may be located. To the extent otherwise permitted
hereunder, if any Credit Party proposes to acquire a fee ownership interest in
Real Estate after the Closing Date, it shall first provide to Agent a mortgage
or deed of trust granting Agent a first priority Lien on such Real Estate,
together with environmental audits, mortgage title insurance commitment, real
property survey, local counsel opinion(s), and, if required by Agent,
supplemental casualty insurance and flood insurance, and such other documents,
instruments or agreements reasonably requested by Agent, in each case, in form
and substance reasonably satisfactory to Agent. With respect to the Real Estate
located in Long Island City, New York, the applicable Credit Party shall provide
to Agent on or before August 31, 2003 a mortgage granting Agent a first priority
Lien on such Real Estate to secure Indebtedness in an amount equal to the Fair
Market Value of such Real Estate at such time; provided, however, Agent shall
not require any Lien on such Real Estate if a Lien on such Real Estate has been
granted prior to such date in accordance with the provisions of Section
6.7(c)(iv).
5.10. Further Assurances. Each Credit Party executing this Agreement agrees
that it shall and shall cause each other Credit Party to, at such Credit Party's
expense and upon request of Agent, duly execute and deliver, or cause to be duly
executed and delivered, to Agent such further instruments and do and cause to be
done such further acts as may be necessary or proper in the reasonable opinion
of Agent to carry out more effectively the provisions and purposes of this
Agreement and each Loan Document.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and severally
agrees as to all Credit Parties that from and after the date hereof until the
Termination Date:
6.1. Mergers, Subsidiaries, Etc. No Credit Party shall directly or
indirectly, by operation of law or otherwise, (a) except as otherwise permitted
in connection with a Permitted Acquisition, form any Subsidiary, or (b) merge
with, consolidate with, acquire all or substantially all of the assets or Stock
of, or otherwise combine with or acquire, any Person, except that subject to
satisfaction with the Acquisition Conditions, SMP may consummate the Acquisition
and any Borrower may merge with another Borrower and any other Credit Party may
merge into any Borrower, provided that Borrower Representative shall be the
survivor of any such merger to which it is a party. Notwithstanding the
foregoing clause (b) and subject to the second to last paragraph in this Section
6.1, commencing two years following the closing of the Acquisition, any
Borrower, may acquire or, subject to the next paragraph of this Section 6.1,
form a Subsidiary to acquire, all or substantially all of the assets or Stock of
any Person (the "Target") (in each case, a "Permitted Acquisition") subject to
the satisfaction of each of the following conditions.
39
(i) Agent shall receive at least fifteen (15) Business Days'
prior written notice of such proposed Permitted Acquisition, which notice shall
include a reasonably detailed description of such proposed Permitted
Acquisition;
(ii) such Permitted Acquisition shall only involve assets
comprising a business, or those assets of a business, of the types engaged in by
Borrowers as of the Closing Date, and which business would not subject Agent or
any Lender to regulatory or third party approvals in connection with the
exercise of its rights and remedies under this Agreement or any other Loan
Documents other than approvals applicable to the exercise of such rights and
remedies with respect to Borrowers prior to such Permitted Acquisition;
(iii) such Permitted Acquisition shall be consensual and shall
have been approved by the Target's board of directors;
(iv) the purchase price consideration (inclusive of any
assumption of liabilities) shall not exceed $5,000,000 with respect to any
Permitted Acquisition and $25,000,000 for all such Permitted Acquisitions;
(v) Concurrently with delivery of the notice referred to in
clause (i) above, with respect to any Permitted Acquisition, Borrowers shall
have delivered to Agent, in form and substance reasonably satisfactory to Agent:
(A) a pro forma consolidated balance sheet, income statement
and cash flow statement of Borrowers and their respective Subsidiaries
(the "Acquisition Pro Forma"), based on recent financial statements,
which shall be complete and shall fairly present in all material
respects the assets, liabilities, financial condition and results of
operations of Borrowers and their respective Subsidiaries in
accordance with GAAP consistently applied, but taking into account
such Permitted Acquisition and the funding of all Loans in connection
therewith, and such Acquisition Pro Forma shall reflect that (x)
average daily Borrowing Availability of all Borrowers for the 30-day
period preceding the consummation of such Permitted Acquisition would
have exceeded the greater of (i) 7.5% of the Maximum Amount, and (ii)
$22,875,000 on a pro forma basis (after giving effect to such
Permitted Acquisition and all Loans funded in connection therewith as
if made on the first day of such period) and (y) on a pro forma basis,
no Event of Default has occurred and is continuing or would result
after giving effect to such Permitted Acquisition;
(B) updated versions of the most recently delivered
Projections covering the 1-year period commencing on the date of such
Permitted Acquisition and otherwise prepared in accordance with the
Projections (the "Acquisition Projections") and based upon historical
financial data of a recent date reasonably satisfactory to Agent,
taking into account such Permitted Acquisition; and
(C) a certificate of the chief financial officer or
treasurer of each Borrower to the effect that: (w) each Borrower
(after taking into consideration all rights of contribution and
indemnity such Borrower has against
40
each other Subsidiary of each Borrower) will be Solvent upon the
consummation of the Permitted Acquisition; (x) the Acquisition Pro
Forma fairly presents the financial condition of Borrowers (on a
consolidated basis) as of the date thereof after giving effect to the
Permitted Acquisition; (y) the Acquisition Projections are reasonable
estimates of the future financial performance of Borrowers subsequent
to the date thereof based upon the historical performance of Borrowers
and the Target and show that Borrowers shall continue to be in
compliance with the financial covenants set forth in Annex G for the
3-year period thereafter; and (z) Borrowers have completed their due
diligence investigation with respect to the Target and such Permitted
Acquisition, which investigation was conducted in a manner similar to
that which would have been conducted by a prudent purchaser of a
comparable business and the results of which investigation were
delivered to Agent and Lenders;
(vi) on or prior to the date of such Permitted Acquisition, Agent
shall have received copies of the acquisition agreement and related agreements
and instruments, and all opinions, certificates, lien search results and other
documents relating thereto; and
(vii) at the time of such Permitted Acquisition and after giving
effect thereto, (x) Borrowing Availability of all Borrowers exceeds the greater
of (i) 7.5% of the Maximum Amount, and (ii) $22,875,000 and (y) no Default or
Event of Default has occurred and is continuing.
Notwithstanding the foregoing, (a) the Accounts, Inventory, Equipment
and Real Estate of the Target shall not be included in Eligible Accounts,
Eligible Inventory, Eligible Equipment and Eligible Real Estate until (x) Agent
determines, on the basis of any field examinations and appraisals conducted by
it in connection with such Permitted Acquisition, the appropriate advance rates
and Reserves applicable thereto and (y) such assets become subject to the first
priority perfected security interests of Agent and otherwise meet the
eligibility criteria which apply to such assets and (b) whether or not the
assets thereof become part of the Borrowing Base, if a new Subsidiary is formed
in connection with any Permitted Acquisition, or, if the Permitted Acquisition
is of Stock of a Person which, upon consummation thereof, would become a
Subsidiary, such Subsidiary shall (i) if a domestic Subsidiary, (x) become a
Credit Party hereunder, (y) enter into a guaranty and a security agreement, each
in form and substance identical to the Subsidiary Guaranty and the Security
Agreement, and (z) take such other action as may be reasonably requested by
Agent to have the assets of such Subsidiary become subject to the first priority
perfected security interests of Agent, and (ii) if a foreign Subsidiary, take
such action as may be reasonably requested by Agent to have 51% of the Stock of
such foreign Subsidiary to be pledged to Agent and subject to the first priority
perfected security interest of Agent; provided that if such foreign Subsidiary
is a "check the box" subsidiary, 100% of the stock shall be pledged to Agent and
subject to the first priority perfected security interest of Agent.
In addition, notwithstanding the foregoing two year period
restriction, Borrowers shall be permitted to acquire the Canadian or Mexican
operations of Xxxx Corporation's Aftermarket Engine Management Division prior to
the second anniversary of the Acquisition Closing Date provided that (i) the
purchase price consideration (inclusive of any assumption of
41
liabilities and any deferred purchase price) from either or both acquisitions
does not reduce the amount available to be borrowed by Borrowers under the
Revolving Loan facility by more than $3,500,000 from the amounts available to be
borrowed without giving effect to the Closing of either or both acquisitions,
(ii) no Default or Event of Default has occurred and is continuing or would
occur as a result of such proposed acquisition, and (iii) each such acquisition
otherwise complies with the provisions of this Section 6.1.
After the earlier of (x) June 30, 2003 or (y) the day upon which the
Borrower Representative notifies Agent that the Acquisition Agreement has been
terminated, in the event the Acquisition has not occurred, then the provisions
of Section 6.1 of the Original Credit Agreement (as set forth on Schedule 6.1)
shall be the operative provisions for purposes of this Agreement.
6.2. Investments; Loans and Advances. Except as otherwise expressly
permitted by this Section 6, no Credit Party shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except that: (a) Borrowers may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to any Borrower pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary course of business,
so long as the aggregate amount of such Accounts so settled by Borrowers does
not exceed, without the prior written approval of Agent, $1,500,000, plus those
in existence on the Closing Date which are set forth on Disclosure Schedule
(6.2); (b) each Credit Party may maintain its existing investments in its
Subsidiaries, and joint ventures identified on Disclosure Schedule (6.2), as of
the Closing Date plus up to the sum of $5,000,000 during each Fiscal Year (with
respect to such joint ventures), so long as after giving effect thereto (x)
Borrowing Availability of all Borrowers exceeds $16,000,000 and (y) no Default
or Event of Default has occurred and is continuing; (c) SI and SMP HK may
maintain deposits of cash and investments in cash equivalents in an amount not
to exceed $10,000,000 at anytime in the case of SI and $5,000,000 in the case of
SMP HK; (d) MCC may maintain deposits of cash and investments in cash
equivalents in an amount not to exceed at any time the sum of $3,000,000; (e)
Borrowers may make overnight investments of credit balances with respect to
Index Rate Loans in Permitted Overnight Investments; (f) Borrowers may make
loans to its Subsidiaries, so long as after giving effect thereto (x) Borrowing
Availability of all Borrowers exceeds $16,000,000 and (y) no Default or Event of
Default has occurred and is continuing, up to the sum of $20,000,000 at any time
outstanding in the aggregate, less the amount of loans converted to equity
pursuant to clause (h) hereinbelow; (g) Borrowers may increase their investments
in Subsidiaries, and/or purchase a minority stock interest in other entities,
not earlier than fifteen (15) Business Days after delivering to Agent a notice
similar to that required under Section 6.1(a)(i) together with financial
statements substantially similar to an Acquisition Pro Forma described in
Section 6.1(a)(iv)(A) indicating that (x) average daily Borrowing Availability
of all Borrowers for the 30-day period preceding the consummation of such
investment would have exceeded $16,000,000 on a pro forma basis (after giving
effect to such investment and all Loans funded in connection therewith as if
made on the first day of such period) and (y) on a pro forma basis, no Event of
Default has occurred and is continuing or would result after giving effect to
such investment, and (h) Borrowers may convert to equity up to an aggregate
amount of $5,000,000 of loans due from Subsidiaries. In the event the Borrower
Representative notifies Agent that the Acquisition Agreement has been terminated
and the
42
Revolving Loan Commitments of the Tranche B Revolving Loan Lenders have been
reduced to $0, then all references to "$16,000,000" in this Section 6.2 shall be
amended to read "$11,500,000".
6.3. Indebtedness.
(a) No Credit Party shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication) (i) Indebtedness secured by purchase
money security interests and Capital Leases permitted in Section 6.7(c) or as
otherwise permitted in Section 6.7(c), (ii) the Loans and the other Obligations,
(iii) unfunded pension fund and other employee benefit plan obligations and
liabilities to the extent they are permitted to remain unfunded under applicable
law, (iv) existing Indebtedness described in Disclosure Schedule (6.3) and
refinancings thereof or amendments or modifications thereto that do not have the
effect of increasing the principal amount thereof or changing the amortization
thereof (other than to extend the same) and that are otherwise on terms and
conditions no less favorable to any Credit Party, Agent or any Lender, as
determined by Agent, than the terms of the Indebtedness being refinanced,
amended or modified, (v) Indebtedness consisting of intercompany loans and
advances made by SMP Canada or any Borrower to any other Borrower or to SMP
Canada as the case may be; provided, that: (A) each Borrower and SMP Canada
shall have executed and delivered to each other Borrower or SMP Canada as the
case may be, on the Closing Date, a demand note (collectively, the "Intercompany
Notes") to evidence any such intercompany Indebtedness owing at any time by such
Borrower or SMP Canada to such other Borrowers or SMP Canada, as the case may
be, which Intercompany Notes shall be in form and substance reasonably
satisfactory to Agent and shall be pledged and delivered to Agent pursuant to
the applicable Pledge Agreement or Security Agreement as additional collateral
security for the Obligations; (B) each Borrower and SMP Canada shall record all
intercompany transactions on its books and records in a manner reasonably
satisfactory to Agent; (C) the obligations of each Borrower and SMP Canada under
any such Intercompany Notes shall be subordinated to the Obligations of such
Borrower or SMP Canada hereunder in a manner reasonably satisfactory to Agent;
(D) at the time any such intercompany loan or advance is made by any Borrower to
any other Borrower or SMP Canada and after giving effect thereto, each such
Borrower shall be Solvent; (E) no Default or Event of Default would occur and be
continuing after giving effect to any such proposed intercompany loan; and (F)
in the case of any intercompany Indebtedness, the Borrower advancing such funds
shall have Borrowing Availability under its separate Borrowing Base of not less
than (x) $1,850,000 in the case of SMP, (y) $350,000 in the case of SI and (z)
$50,000 in the case of MCC, each after giving effect to such intercompany loan,
(vi) Indebtedness consisting of intercompany loans and advances made by a
Subsidiary of any Credit Party which is not itself a Credit Party to any other
Credit Party, (vii) Subordinated Debt to Xxxx Corporation on and after the
Acquisition, and (viii) after the Acquisition Closing Date, Capital Leases to
the extent they are permitted in Section 6.7(a).
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness prior to its scheduled
maturity, other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Encumbrance if the asset securing such Indebtedness has been sold or
otherwise disposed of in accordance with Sections 6.8(b) or (c); (iii)
Indebtedness
43
permitted by Section 6.3(a)(iv) upon any refinancing thereof in accordance with
Section 6.3(a)(iv); and (iv) as otherwise permitted in Section 6.14.
6.4. Employee Loans and Affiliate Transactions.
(a) Except as otherwise expressly permitted in this Section 6 with
respect to Affiliates, no Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's business and upon fair and reasonable terms that are no less favorable
to such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. In addition, if
any such transaction or series of related transactions not otherwise permitted
under Article 6 involves payments in excess of $50,000 for any single
transaction or $250,000 in the aggregate for all Credit Parties, the terms of
these transactions must be disclosed in advance to Agent and Lenders. All such
transactions existing as of the date hereof are described in Disclosure Schedule
(6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except (i) loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, (ii) loans to its respective
employees in an amount not to exceed for each employee 25% of the employee's
compensation to finance such employee's purchase of SMP Stock, (iii) loans to
executive officers to finance their purchase of SMP Stock in which under Credit
Parties' policies such officers are to have invested at any time an amount equal
to 50% of their current compensation, and (iv) loans to employees who have been
relocated at a Credit Party's request to assist them in financing the purchase
of a new residence and related moving expenses pending the sale of their former
residence, not to exceed, in the aggregate with respect to all such employee or
executive officer loans described in clauses (i), (ii), (iii) and (iv) of this
subsection (b), a maximum of $500,000 to any employee or executive officer and
up to a maximum of $2,000,000 in the aggregate at any one time outstanding for
all employees and executive officers.
6.5. Capital Structure and Business. No Credit Party shall (a) make any
changes in any of its business objectives, purposes or operations that could
reasonably be expected to have or result in a Material Adverse Effect, (b) make
any change in its capital structure as described in Disclosure Schedule (3.8),
including the issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock; provided that (i) any Credit Party may issue or sell shares
of its stock to any other Credit Party, (ii) SMP may buy or sell shares of its
Stock for cash so long as (x) the proceeds thereof are applied in prepayment of
the Obligations as required by Section 1.3(b)(iii), and (y) no Change of Control
occurs after giving effect thereto, and (iii) SMP may issue shares of its Stock
to Seller (or its designee) as part of the purchase price in connection with the
Acquisition, or (c) amend its charter or bylaws in a manner that would adversely
affect Agent or Lenders or such Credit Party's duty or ability to repay the
Obligations. No Credit Party shall engage in any business other than the
businesses currently engaged in by it or businesses reasonably related thereto.
6.6. Guaranteed Indebtedness. No Credit Party shall create, incur, assume
or permit to exist any Guaranteed Indebtedness except (a) by endorsement of
instruments or items of payment for deposit to the general account of any Credit
Party, and (b) for Guaranteed
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Indebtedness incurred for the benefit of any other Credit Party if the primary
obligation is expressly permitted by this Agreement other than Indebtedness, if
any, of a Target (including the operations of the business which is the subject
of the Acquisition) existing at the time such Target is acquired.
6.7. Liens. No Credit Party shall create, incur, assume or permit to exist
any Lien on or with respect to its Accounts or any of its other properties or
assets (whether now owned or hereafter acquired) except for (a) Permitted
Encumbrances; (b) Liens in existence on the date hereof and summarized on
Disclosure Schedule (6.7) securing the Indebtedness described on Disclosure
Schedule (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property; and (c) Liens created after the date hereof (i) by
conditional sale or other title retention agreements (including Capital Leases),
(ii) in connection with purchase money Indebtedness with respect to Equipment,
Fixtures and Real Estate acquired by any Credit Party in the ordinary course of
business, involving the incurrence of an aggregate amount of purchase money
Indebtedness and Capital Lease Obligations of not more than $10,000,000
outstanding at any one time for all such Liens, (iii) solely to secure purchase
money Indebtedness of not more than $5,500,000 incurred in connection with the
acquisition of Real Estate, Equipment and other assets from SAGEM, Inc., a South
Carolina corporation, upon the Real Estate acquired from SAGEM, Inc. (provided
that all such Liens described in this subsection 6.7(c)(ii) and (iii) attach
only to the assets subject to such purchase money debt and such Indebtedness is
incurred within 20 days following such purchase and does not exceed 100% of the
purchase price of the subject assets) or (iv) Liens upon the Real Estate of SMP
located in Long Island City, New York (provided that such Liens are granted in
connection with the incurrence of mortgage financing (A) in amounts not less
than 50% of the appraised value of thereof (as indicated in an appraisal in form
and substance satisfactory to Agent by an appraiser reasonably satisfactory to
Agent), (B) upon terms and conditions reasonably satisfactory to Agent and (C)
where the mortgagee has entered into a mortgagee waiver and consent with Agent
in form and substance satisfactory to Agent, and Agent shall subordinate any
Liens it may have upon such Real Estate in Long Island City to the Liens on such
Real Estate of the mortgagee.
6.8. Sale of Stock and Assets. No Credit Party shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the Stock of any of its Subsidiaries (whether in a public or a private
offering or otherwise) or any of its Accounts, other than (a) the sale of
Inventory in the ordinary course of business, and (b) the sale, transfer,
conveyance or other disposition by a Credit Party of Equipment, Fixtures or Real
Estate that are obsolete or no longer used or useful in such Credit Party's
business and having a net book value, not exceeding $2,000,000 in the aggregate
in any Fiscal Year; (c) other Equipment and Fixtures having a net book value not
exceeding $5,000,000 in the aggregate in any Fiscal Year (d) the sale of
approximately 8 acres of vacant land located in Coppell, Texas; (e) licenses of
Intellectual Property for uses not pursued by Credit Parties or in geographic
markets not served by Credit Parties or in order to enable a supplier to
manufacture Inventory for a Credit Party as long as the proceeds from such
licenses are remitted to Agent for application to the Loans; (f) the sale of any
SunTrust Drafts pursuant to the AutoZone/SunTrust Program; and (g) the sale to
Seller (or its designee) of Accounts generated by the Aftermarket Engine
Management Division purchased from Seller as a one time adjustment to the
Purchase Price (as defined in Annex D-2) pursuant to
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Section 3.3(h)(ii) of the Acquisition Agreement as in effect on the Closing
Date. With respect to any disposition of assets or other properties permitted
pursuant to clauses (b), (c) and (d) above, subject to Section 1.3(b), Agent
agrees on reasonable prior written notice to release its Lien on such assets or
other properties in order to permit the applicable Credit Party to effect such
disposition and shall execute, if necessary, and deliver to Borrowers, at
Borrowers' expense, appropriate UCC-3 termination statements and other releases
as reasonably requested by Borrowers.
6.9. ERISA. No Credit Party shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur (i) an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (ii) cause or permit to occur an ERISA Event to the extent such ERISA
Event could reasonably be expected to have a Material Adverse Effect.
6.10. Financial Covenants. Borrowers shall not breach or fail to comply
with any of the Financial Covenants.
6.11. Hazardous Materials. No Credit Party 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 (a) violate in any respect, or form the
basis for any Environmental Liabilities under, any Environmental Laws or
Environmental Permits or (b) otherwise adversely impact the value or
marketability of any of the owned Real Estate or any of the Collateral, other
than such violations or Environmental Liabilities that could not reasonably be
expected to have a Material Adverse Effect.
6.12. Sale-Leasebacks. No Credit Party shall engage in any sale-leaseback,
synthetic lease or similar transaction involving any of its assets.
6.13. Cancellation of Indebtedness. No Credit Party shall cancel any claim
or debt owing to it, except for reasonable consideration negotiated on an arm's
length basis and in the ordinary course of its business consistent with past
practices.
6.14. Restricted Payments. No Credit Party shall make any Restricted
Payment, except (a) intercompany loans and advances between Borrowers to the
extent permitted by Section 6.3, (b) dividends and distributions by Subsidiaries
of any Borrower paid to such Borrower, (c) employee loans permitted under
Section 6.4(b), (d) payments of principal and interest of Intercompany Notes
issued in accordance with Section 6.3 and, to the extent not prohibited by any
applicable subordination provisions, payments of interest on Subordinated Debt;
(e) prior to the Acquisition Closing Date, subject to the proviso which follows,
SMP may (i) pay cash dividends, (ii) make payments on account of the purchase or
redemption of its common stock, and (iii) at any date following three (3) months
from the Closing Date make payments to repurchase subordinated debentures
pursuant to the terms of the Indenture in an amount not to exceed $20,000,000 in
the aggregate during the term of this Agreement; provided, that (i) no Default
or Event of Default has occurred and is continuing or would result after giving
effect to any Restricted Payment pursuant to clause (e) above, (ii) Borrowers
collectively shall have Borrowing Availability of at least $11,500,000 after
giving effect to any Restricted Payment pursuant to clause (e) above; and (iii)
the timing of the Restricted Payments referred to in clause (e) above shall be
set at dates that permit the delivery of Financial Statements necessary to
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determine current compliance with the Financial Covenants prior to each such
payment; and (f) on and after the Acquisition Closing Date, subject to the
provisos which follow in each of subsections (i) and (ii) below, SMP may (i) pay
cash dividends up to $9,000,000 in any twelve (12) month period provided that
(x) Borrowers shall have Excess Formula Availability on a pro forma basis of not
less than the greater of (1) five percent (5%) of the Maximum Amount or (2)
$15,250,000 and (y) no Default or Event of Default shall have occurred and be
continuing or would occur as a result of the payment of such cash dividend, and
(ii) beginning on July 1, 2004, make payments on account of the purchase or
redemption of its common stock, or repurchase subordinated debentures pursuant
to the terms of the Indenture, or repurchase unsecured subordinated indebtedness
owing to Seller in connection with the Acquisition, provided that (x) the
aggregate cash utilized to effectuate such purchases or redemptions shall not
exceed $20,000,000 during the term of this Agreement (such dollar amount to be
reduced by repurchases under Section 6.14(e)), (y) Borrowers shall have Excess
Formula Availability on a pro forma basis of not less than the greater of (1)
ten percent (10%) of the Maximum Amount or (2) $30,500,000, and (z) no Default
or Event of Default shall have occurred and be continuing or would occur as a
result of such purchases or redemptions.
6.15. Change of Corporate Name, State of Incorporation or Location; Change
of Fiscal Year. No Credit Party shall (a) change its corporate name or trade
name or (b) change its chief executive office, principal place of business,
corporate offices or warehouses or locations at which Collateral is held or
stored, or the location of its records concerning the Collateral, in each case
without at least thirty (30) days prior written notice to Agent and after
Agent's written acknowledgment that any reasonable action requested by Agent in
connection therewith, including to continue the perfection of any Liens in favor
of Agent, on behalf of Lenders, in any Collateral, has been completed or taken,
and provided that any such new location shall be in the continental United
States or, with respect to SMP Canada, Canada. No Credit Party shall change its
Fiscal Year.
6.16. No Impairment of Intercompany Transfers. No Credit Party shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) that could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or distributions
or the making or repayment of intercompany loans by a Subsidiary of any Borrower
to any Borrower or between Borrowers.
6.17. No Speculative Transactions. No Credit Party 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 purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars, so long as such
proposed hedging transaction is upon prior notice of same to Agent and the
agreements effectuating such proposed hedging transaction are satisfactory to
Agent in form and substance.
6.18. Leases. No Credit Party 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 all Credit Parties on a consolidated basis would
exceed One Hundred and Twenty percent (120%) of the aggregate of all such
payments in the prior Fiscal Year.
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6.19. Changes Relating to Subordinated Debt; Material Contracts.
(a) No Credit Party shall change or amend the terms of any
Subordinated Debt (or any indenture or agreement in connection therewith) if the
effect of such amendment is to: (a) increase the interest rate on such
Subordinated Debt; (b) change the dates upon which payments of principal or
interest are due on such Subordinated Debt other than to extend such dates; (c)
change any default or event of default other than to delete or make less
restrictive any default provision therein, or add any covenant with respect to
such Subordinated Debt; (d) change the redemption or prepayment provisions of
such Subordinated Debt other than to extend the dates therefor or to reduce the
premiums payable in connection therewith; (e) grant any security or collateral
to secure payment of such Subordinated Debt; or (f) change or amend any other
term if such change or amendment would materially increase the obligations of
the Credit Party thereunder or confer additional material rights on the holder
of such Subordinated Debt in a manner adverse to any Credit Party, Agent or any
Lender.
(b) No Credit Party shall change or amend the terms of any of purchase
or sale agreement involving the acquisition or disposition of any business of
such Credit Party relating to indemnity provisions or deferred purchase
payments.
6.20. Inactive Subsidiaries. None of the Credit Parties or their
Subsidiaries identified on Disclosure Schedule (3.8) as "inactive" shall engage
in any trade or business, or own any assets (other than Stock of their
Subsidiaries) or incur any Indebtedness or Guaranteed Indebtedness (other than
the Obligations).
7. TERM
7.1. Termination. The financing arrangements contemplated hereby shall be
in effect until the Commitment Termination Date, and the Loans and all other
Obligations shall be automatically due and payable in full on such date.
7.2. Survival of Obligations Upon Termination of Financing Arrangements.
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Credit Parties or the rights of Agent and Lenders
relating to any unpaid portion of the Loans or any other Obligations, due or not
due, liquidated, contingent or unliquidated, or any transaction or event
occurring prior to such termination, or any transaction or event, the
performance of which is required after the Commitment Termination Date. Except
as otherwise expressly provided herein or in any other Loan Document, all
undertakings, agreements, covenants, warranties and representations of or
binding upon the Credit Parties, and all rights of Agent and each Lender, all as
contained in the Loan Documents, shall not terminate or expire, but rather shall
survive any such termination or cancellation and shall continue in full force
and effect until the Termination Date; provided, that the provisions of Section
11, the payment obligations under Sections 1.15 and 1.16, and the indemnities
contained in the Loan Documents shall survive the Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
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8.1. Events of Default. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) Any Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan Document
within ten (10) days following Agent's demand for such reimbursement or payment
of expenses.
(b) Any Credit Party fails or neglects to perform, keep or observe any
of the provisions of Sections 1.4, 1.8, 5.4(a) or 6, or any of the provisions
set forth in Annexes C or G, respectively.
(c) Any Borrower fails or neglects to perform, keep or observe any of
the provisions of Section 4 or any provisions set forth in Annexes E or F,
respectively, and the same shall remain unremedied for three (3) days or more.
(d) Any Credit Party fails or neglects to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents (other
than any provision embodied in or covered by any other clause of this Section
8.1) and the same shall remain unremedied for thirty (30) days or more.
(e) A default or breach occurs under any other agreement, document or
instrument to which any Credit Party is a party that is not cured or waived
within any applicable grace period therefor, and such default or breach (i)
involves the failure to make any payment when due in respect of any Indebtedness
or Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $500,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness or
Guaranteed Indebtedness or a portion thereof in excess of $500,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in respect thereof to be
demanded, in each case, regardless of whether such default is waived beyond any
applicable cure period, or such right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base Certificate is
untrue or incorrect in any respect (other than inadvertent, immaterial errors
not exceeding $50,000 in the aggregate in any Borrowing Base Certificate), or
any representation or warranty herein or in any Loan Document or in any written
statement, report, financial statement or certificate (other than a Borrowing
Base Certificate) made or delivered to Agent or any Lender by any Credit Party
is untrue or incorrect in any material respect as of the date when made or
deemed made.
(g) Assets of any Credit Party with a fair market value of $100,000 or
more are attached, seized, levied upon or subjected to a writ or distress
warrant, or come within the possession of any receiver, trustee, custodian or
assignee for the benefit of creditors of any Credit Party and such condition
continues for thirty (30) days or more.
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(h) A case or proceeding is commenced against any Credit Party seeking
a decree or order in respect of such Credit Party (i) under the Bankruptcy Code,
or any other applicable federal, state or foreign bankruptcy or other similar
law, (ii) appointing a custodian, receiver, liquidator, assignee, trustee or
sequestrator (or similar official) for such Credit Party or for any substantial
part of any such Credit Party's assets, or (iii) ordering the winding-up or
liquidation of the affairs of such Credit Party, and such case or proceeding
shall remain undismissed or unstayed for sixty (60) days or more or a decree or
order granting the relief sought in such case or proceeding is granted by a
court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) consents to or fails to contest in a timely and
appropriate manner the institution of proceedings thereunder or the filing of
any such petition or the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee or sequestrator (or similar official)
for such Credit Party or for any substantial part of any such Credit Party's
assets, (iii) makes an assignment for the benefit of creditors, (iv) takes any
action in furtherance of any of the foregoing; or (v) admits in writing its
inability to, or is generally unable to, pay its debts as such debts become due.
(j) A final judgment or judgments for the payment of money in excess
of $500,000 in the aggregate at any time are outstanding against one or more of
the Credit Parties and the same are not, within thirty (30) days after the entry
thereof, discharged or execution thereof stayed or bonded pending appeal, or
such judgments are not discharged prior to the expiration of any such stay.
(k) Any material provision of any Loan Document for any reason ceases
to be valid, binding and enforceable in accordance with its terms (or any Credit
Party shall challenge the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such assertion, that
any provision of any of the Loan Documents has ceased to be or otherwise is not
valid, binding and enforceable in accordance with its terms), or any Lien
created under any Loan Document (other than due to the gross negligence or
willful misconduct of Agent or any Lender following timely compliance by each
Credit Party with all of the requirements of each relevant Loan Document) ceases
to be a valid and perfected first priority Lien (except as otherwise permitted
herein or therein) in any of the Collateral purported to be covered thereby.
(l) Any Change of Control occurs.
(m) Any event occurs, whether or not insured or insurable, as a result
of which revenue-producing activities cease or are substantially curtailed at
facilities of Borrowers generating more than 10% of Borrowers' consolidated
revenues for the Fiscal Year preceding such event and 10% of Borrowers' EBITDA
for the preceding twelve Fiscal Months and such cessation or curtailment
continues for more than ninety (90) days.
8.2. Remedies.
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(a) If any Event of Default has occurred and is continuing, Agent may
(and at the written request of the Requisite Lenders shall), without notice,
suspend the Revolving Loan facility with respect to additional Advances and/or
the incurrence of additional Letter of Credit Obligations, whereupon any
additional Advances and additional Letter of Credit Obligations shall be made or
incurred in Agent's sole discretion (or in the sole discretion of the Requisite
Lenders, if such suspension occurred at their direction) so long as such Default
or Event of Default is continuing. If any Event of Default has occurred and is
continuing, Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans and the Letter of Credit Fees to the Default
Rate.
(b) If any Event of Default has occurred and is continuing, Agent may
(and at the written request of the Requisite Lenders shall), upon written
notice: (i) terminate the Revolving Loan facility with respect to further
Advances or the incurrence of further Letter of Credit Obligations; (ii) reduce
the Revolving Loan Commitment from time to time; (iii) declare all or any
portion of the Obligations, including all or any portion of any Loan to be
forthwith due and payable, and require that the Letter of Credit Obligations be
cash collateralized in the manner set forth in Annex B, all without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by Borrowers and each other Credit Party; or (iv) exercise any rights and
remedies provided to Agent under the Loan Documents or at law or equity,
including all remedies provided under the Code; provided, that upon the
occurrence of an Event of Default specified in Sections 8.1(h) or (i), the
Revolving Loan facility shall be immediately terminated and all of the
Obligations, including the aggregate Revolving Loan, shall become immediately
due and payable without declaration, notice or demand by any Person.
8.3. Waivers by Credit Parties. Except as otherwise provided for in this
Agreement or by applicable law, each Credit Party waives (including for purposes
of Section 12): (a) presentment, demand and protest and notice of presentment,
dishonor, notice of intent to accelerate, notice of acceleration, protest,
default, nonpayment, maturity, release, compromise, settlement, extension or
renewal of any or all commercial paper, accounts, contract rights, documents,
instruments, chattel paper and guaranties at any time held by Agent on which any
Credit Party may in any way be liable, and hereby ratifies and confirms whatever
Agent may do in this regard, (b) all rights to notice and a hearing prior to
Agent's taking possession or control of, or to Agent's replevy, attachment or
levy upon, the Collateral or any bond or security that might be required by any
court prior to allowing Agent to exercise any of its remedies, and (c) the
benefit of all valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1. Assignment and Participations.
(a) Subject to the terms of this Section 9.1, any Lender may make an
assignment to a Qualified Assignee of, or sell participations in, at any time or
times, the Loan Documents, Loans, Letter of Credit Obligations and any
Commitment or any portion thereof or interest therein, including any Lender's
rights, title, interests, remedies, powers or duties thereunder. Any assignment
by a Lender shall: (i) require the consent of Agent (which consent shall not be
unreasonably withheld or delayed with respect to a Qualified Assignee) and the
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execution of an assignment agreement (an "Assignment Agreement") substantially
in the form attached hereto as Exhibit 9.1(a) and otherwise in form and
substance reasonably satisfactory to, and acknowledged by, Agent; (ii) be
conditioned on such assignee Lender representing to the assigning Lender and
Agent that it is purchasing the applicable Loans to be assigned to it for its
own account, for investment purposes and not with a view to the distribution
thereof; (iii) after giving effect to any such partial assignment, the assignee
Lender shall have Commitments in an amount at least equal to $5,000,000 and the
assigning Lender shall have retained Commitments in an amount at least equal to
$5,000,000; and (iv) include a payment to Agent of an assignment fee of $3,500,
except no assignment fee is payable for assignments to an Affiliate of such
assigning Lender. In the case of an assignment by a Lender under this Section
9.1, the assignee shall have, to the extent of such assignment, the same rights,
benefits and obligations as all other Lenders hereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its Commitments
or assigned portion thereof from and after the date of such assignment. Each
Borrower hereby acknowledges and agrees that any assignment shall give rise to a
direct obligation of Borrowers to the assignee and that the assignee shall be
considered to be a "Lender". In all instances, each Lender's liability to make
Loans hereunder shall be several and not joint and shall be limited to such
Lender's Pro Rata Share of the applicable Commitment. In the event Agent or any
Lender assigns or otherwise transfers all or any part of the Obligations, Agent
or any such Lender shall so notify Borrowers and Borrowers shall, upon the
request of Agent or such Lender, execute new Notes in exchange for the Notes, if
any, being assigned. Notwithstanding the foregoing provisions of this Section
9.1(a), any Lender may at any time pledge the Obligations held by it and such
Lender's rights under this Agreement and the other Loan Documents to a Federal
Reserve Bank, and any Lender that is an investment fund may assign the
Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to another investment fund managed by the same investment
advisor; provided, that no such pledge to a Federal Reserve Bank shall release
such Lender from such Lender's obligations hereunder or under any other Loan
Document.
(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrowers hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.13,
1.15, 1.16 and 9.8, each Borrower acknowledges and agrees that a participation
shall give rise to a direct obligation of Borrowers to the participant and the
participant shall be considered to be a "Lender"; provided, however, that a
participant shall not be entitled to receive any greater payment under Sections
1.13, 1.15 or 1.16 than the Lender from which such participant acquired its
participation would be entitled to receive in respect of the amount of the
participation. Except as set forth in the preceding sentence no Borrower or
Credit Party shall have any obligation or duty to any participant. Neither Agent
nor any Lender (other than the Lender selling a participation) shall have any
duty to any participant and may continue to deal solely with the Lender selling
a participation as if no such sale had occurred.
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(c) Except as expressly provided in this Section 9.1, no Lender shall,
as between Borrowers and that Lender, or Agent and that Lender, be relieved of
any of its obligations hereunder as a result of any sale, assignment, transfer
or negotiation of, or granting of participation in, all or any part of the
Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist any Lender
permitted to sell assignments or participations under this Section 9.1 as
reasonably required to enable the assigning or selling Lender to effect any such
assignment or participation, including the execution and delivery of any and all
agreements, notes and other documents and instruments as shall be requested and,
if requested by Agent, the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their respective affairs contained in any selling materials provided by them
and all other information provided by them and included in such materials,
except that any Projections delivered by Borrowers shall only be certified by
Borrowers as having been prepared by Borrowers in compliance with the
representations contained in Section 3.4(c).
(e) Any Lender may furnish any information concerning Credit Parties
in the possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants); provided that such Lender
shall obtain from assignees or participants confidentiality covenants
substantially equivalent to those contained in Section 11.8.
(f) So long as no Event of Default has occurred and is continuing, no
Lender shall assign or sell participations in any portion of its Loans or
Commitments to a potential Lender or participant, if, as of the date of the
proposed assignment or sale, the assignee Lender or participant would be subject
to capital adequacy or similar requirements under Section 1.16(a), increased
costs under Section 1.16(b), an inability to fund LIBOR Loans under Section
1.16(c), or withholding taxes in accordance with Section 1.15(a) to an extent
greater than that applicable to the assigning or selling Lender.
(g) Notwithstanding anything to the contrary contained herein, any
Lender (a "Granting Lender"), may grant to a special purpose funding vehicle (an
"SPC"), identified as such in writing by the Granting Lender to Agent and
Borrowers, the option to provide to Borrowers all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrowers pursuant
to this Agreement; provided that (i) nothing herein shall constitute a
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, Borrowers and Agent and without paying any processing fee therefor
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by Borrowers and Agent) providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Loans and (ii) disclose on a confidential basis any
non-public
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information relating to its Loans to any rating agency, commercial paper dealer
or provider of any surety, guarantee or credit or liquidity enhancement to such
SPC. This Section 9.1(g) may not be amended without the prior written consent of
each Granting Lender, all or any of whose Loans are being funded by an SPC at
the time of such amendment. For the avoidance of doubt, the Granting Lender
shall for all purposes, including without limitation, the approval of any
amendment or waiver of any provision of any Loan Document or the obligation to
pay any amount otherwise payable by the Granting Lender under the Loan
Documents, continue to be the Lender of record hereunder.
9.2. Appointment of Agent. GE Capital is hereby appointed to act on behalf
of all Lenders as Agent under this Agreement and the other Loan Documents. The
provisions of this Section 9.2 are solely for the benefit of Agent and Lenders
and no Credit Party nor any other Person shall have any rights as a third party
beneficiary of any of the provisions hereof. In performing its functions and
duties under this Agreement and the other Loan Documents, Agent shall act solely
as an agent of Lenders and does not assume and shall not be deemed to have
assumed any obligation toward or relationship of agency or trust with or for any
Credit Party or any other Person. Agent shall have no duties or responsibilities
except for those expressly set forth in this Agreement and the other Loan
Documents. The duties of Agent shall be mechanical and administrative in nature
and Agent shall not have, or be deemed to have, by reason of this Agreement, any
other Loan Document or otherwise a fiduciary relationship in respect of any
Lender. Except as expressly set forth in this Agreement and the other Loan
Documents, Agent shall not have any duty to disclose, and shall not be liable
for failure to disclose, any information relating to any Credit Party or any of
their respective Subsidiaries or any Account Debtor that is communicated to or
obtained by GE Capital or any of its Affiliates in any capacity. Neither Agent
nor any of its Affiliates nor any of their respective officers, directors,
employees, agents or representatives shall be liable to any Lender for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document, or in connection herewith or therewith, except for damages caused by
its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders,
Supermajority Revolving Lenders or all affected Lenders with respect to any act
or action (including failure to act) in connection with this Agreement or any
other Loan Document, then Agent shall be entitled to refrain from such act or
taking such action unless and until Agent shall have received instructions from
Requisite Lenders, Supermajority Revolving Lenders or all affected Lenders, as
the case may be, and Agent shall not incur liability to any Person by reason of
so refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders, Supermajority Revolving Lenders or all affected Lenders,
as applicable.
9.3. Agent's Reliance, Etc. Neither Agent nor any of its Affiliates nor any
of their respective directors, officers, agents or employees shall be liable for
any action taken or omitted
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to be taken by it or them under or in connection with this Agreement or the
other Loan Documents, except for damages caused by its or their own gross
negligence or willful misconduct. Without limiting the generality of the
foregoing, Agent: (a) may treat the payee of any Note as the holder thereof
until Agent receives written notice of the assignment or transfer thereof signed
by such payee and in form reasonably satisfactory to Agent; (b) may consult with
legal counsel, independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, warranties or representations made
in or in connection with this Agreement or the other Loan Documents; (d) unless
specifically directed, in writing, by the Requisite Lenders shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement or the other Loan Documents
on the part of any Credit Party or to inspect the Collateral (including the
books and records) of any Credit Party; (e) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or the other Loan Documents or any other
instrument or document furnished pursuant hereto or thereto; and (f) shall incur
no liability under or in respect of this Agreement or the other Loan Documents
by acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopy, telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
9.4. GE Capital and Affiliates. With respect to its Commitments hereunder,
GE Capital shall have the same rights and powers under this Agreement and the
other Loan Documents as any other Lender and may exercise the same as though it
were not Agent; and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated, include GE Capital in its individual capacity. GE Capital
and its Affiliates may lend money to, invest in, and generally engage in any
kind of business with, any Credit Party, any of their Affiliates and any Person
who may do business with or own securities of any Credit Party or any such
Affiliate, all as if GE Capital were not Agent and without any duty to account
therefor to Lenders. GE Capital and its Affiliates may accept fees and other
consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Agent or any other Lender and based on
the Financial Statements referred to in Section 3.4(a) and such other documents
and information as it has deemed appropriate, made its own credit and financial
analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6. Indemnification. Lenders agree to indemnify Agent (to the extent not
reimbursed by Credit Parties and without limiting the obligations of Credit
Parties hereunder), ratably
55
according to their respective Pro Rata Shares, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever that may be
imposed on, incurred by, or asserted against Agent in any way relating to or
arising out of this Agreement or any other Loan Document or any action taken or
omitted to be taken by Agent in connection therewith; provided, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from Agent's gross negligence or willful misconduct. Without limiting
the foregoing, each Lender agrees to reimburse Agent promptly upon demand for
its ratable share of any out-of-pocket expenses (including reasonable counsel
fees) incurred by Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement and each other Loan Document,
to the extent that Agent is not reimbursed for such expenses by Credit Parties.
9.7. Successor Agent. Agent may resign at any time by giving not less than
thirty (30) days' prior written notice thereof to Lenders and Borrower
Representative. Upon any such resignation, the Requisite Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Requisite Lenders and shall have accepted such appointment
within thirty (30) days after the resigning Agent's giving notice of
resignation, then the resigning Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a Lender, if a Lender is willing to accept such
appointment, or otherwise shall be a commercial bank or financial institution or
a subsidiary of a commercial bank or financial institution if such commercial
bank or financial institution is organized under the laws of the United States
of America or of any State thereof and has a combined capital and surplus of at
least $300,000,000. If no successor Agent has been appointed pursuant to the
foregoing, within thirty (30) days after the date such notice of resignation was
given by the resigning Agent, such resignation shall become effective and the
Requisite Lenders shall thereafter perform all the duties of Agent hereunder
until such time, if any, as the Requisite Lenders appoint a successor Agent as
provided above. Any successor Agent appointed by Requisite Lenders or the
resigning Agent hereunder shall be subject to the approval of Borrower
Representative, such approval not to be unreasonably withheld or delayed;
provided that such approval shall not be required if a Default or an Event of
Default has occurred and is continuing. Upon the acceptance of any appointment
as Agent hereunder by a successor Agent, such successor Agent shall succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the earlier of the acceptance of any appointment as Agent
hereunder by a successor Agent or the effective date of the resigning Agent's
resignation, the resigning Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Agent shall
continue. After any resigning Agent's resignation hereunder, the provisions of
this Section 9 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was acting as Agent under this Agreement and the other
Loan Documents.
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9.8. Setoff and Sharing of Payments. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default
and subject to Section 9.9(f), each Lender is hereby authorized at any time or
from time to time, without prior notice to any Credit Party or to any Person
other than Agent, any such notice being hereby expressly waived, to offset and
to appropriate and to apply any and all balances held by it at any of its
offices for the account of any Borrower or Guarantor (regardless of whether such
balances are then due to such Borrower or Guarantor) and any other properties or
assets at any time held or owing by that Lender or that holder to or for the
credit or for the account of any Borrower or Guarantor against and on account of
any of the Obligations that are not paid when due, provided that the Lender
exercising such offset rights shall give notice thereof to the affected Credit
Party promptly after exercising such rights. Any Lender exercising a right of
setoff or otherwise receiving any payment on account of the Obligations in
excess of its Pro Rata Share thereof shall purchase for cash (and the other
Lenders or holders shall sell) such participations in each such other Lender's
or holder's Pro Rata Share of the Obligations as would be necessary to cause
such Lender to share the amount so offset or otherwise received with each other
Lender or holder in accordance with their respective Pro Rata Shares (other than
offset rights exercised by any Lender with respect to Sections 1.13, 1.15 or
1.16). Each Credit Party that is a Borrower or Guarantor agrees, to the fullest
extent permitted by law, that (a) any Lender may exercise its right to offset
with respect to amounts in excess of its Pro Rata Share of the Obligations and
may sell participations in such amounts so offset to other Lenders and holders
and (b) any Lender so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of offset,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the offset amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
offset, the purchase of participations by that Lender shall be rescinded and the
purchase price restored without interest.
9.9. Advances; Payments; Non-Funding Lenders; Information; Actions in
Concert.
(a) Advances; Payments.
(i) Each Revolving Lender shall make the amount of such Lender's
Pro Rata Share of such Revolving Credit Advance available to Agent in same day
funds by wire transfer to Agent's account as set forth in Annex H not later than
3:00 p.m. (New York time) on the requested funding date, in the case of an Index
Rate Loan, and not later than 11:00 a.m. (New York time) on the requested
funding date, in the case of a LIBOR Loan. After receipt of such wire transfers
(or, in the Agent's sole discretion, before receipt of such wire transfers),
subject to the terms hereof, Agent shall make the requested Revolving Credit
Advance to the Borrower designated by Borrower Representative in the Notice of
Revolving Credit Advance. All payments by each Revolving Lender shall be made
without setoff, counterclaim or deduction of any kind.
(ii) On the 2nd Business Day of each calendar week or more
frequently at Agent's election (each, a "Settlement Date"), Agent shall advise
each Lender by telephone, or telecopy of the amount of such Lender's Pro Rata
Share of principal, interest and Fees paid for
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the benefit of Lenders with respect to each applicable Loan. Provided that each
Lender has funded all payments or Advances required to be made by it and has
purchased all participations required to be purchased by it under this Agreement
and the other Loan Documents as of such Settlement Date, Agent shall pay to each
Lender such Lender's Pro Rata Share of principal, interest and Fees paid by
Borrowers since the previous Settlement Date for the benefit of such Lender on
the Loans held by it. To the extent that any Lender (a "Non-Funding Lender") has
failed to fund all such payments and Advances or failed to fund the purchase of
all such participations, Agent shall be entitled to set off the funding
short-fall against that Non-Funding Lender's Pro Rata Share of all payments
received from Borrowers. Such payments shall be made by wire transfer to such
Lender's account (as specified by such Lender in Annex H or the applicable
Assignment Agreement) not later than 2:00 p.m. (New York time) on the next
Business Day following each Settlement Date.
(b) Availability of Lender's Pro Rata Share. Agent may assume that
each Revolving Lender will make its Pro Rata Share of each Revolving Credit
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without setoff,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower Representative and Borrowers shall immediately repay such amount
to Agent. Nothing in this Section 9.9(b) or elsewhere in this Agreement or the
other Loan Documents shall be deemed to require Agent to advance funds on behalf
of any Revolving Lender or to relieve any Revolving Lender from its obligation
to fulfill its Commitments hereunder or to prejudice any rights that Borrowers
may have against any Revolving Lender as a result of any default by such
Revolving Lender hereunder. To the extent that Agent advances funds to any
Borrower on behalf of any Revolving Lender and is not reimbursed therefor on the
same Business Day as such Advance is made, Agent shall be entitled to retain for
its account all interest accrued on such Advance until reimbursed by the
applicable Revolving Lender.
(c) Return of Payments.
(i) If Agent pays an amount to a Lender under this Agreement in
the belief or expectation that a related payment has been or will be received by
Agent from Borrowers and such related payment is not received by Agent, then
Agent will be entitled to recover such amount from such Lender on demand without
setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount received by
Agent under this Agreement must be returned to any Borrower or paid to any other
Person pursuant to any insolvency law or otherwise, then, notwithstanding any
other term or condition of this Agreement or any other Loan Document, Agent will
not be required to distribute any portion thereof to any Lender. In addition,
each Lender will repay to Agent on demand any portion of such amount that Agent
has distributed to such Lender, together with interest at such rate, if any, as
Agent is required to pay to any Borrower or such other Person, without setoff,
counterclaim or deduction of any kind.
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(d) Non-Funding Lenders. The failure of any Non-Funding Lender to make
any Revolving Credit Advance or any payment required by it hereunder shall not
relieve any other Lender (each such other Revolving Lender, an "Other Lender")
of its obligations to make such Advance or purchase such participation on such
date, but neither any Other Lender nor Agent shall be responsible for the
failure of any Non-Funding Lender to make an Advance, purchase a participation
or make any other payment required hereunder. Notwithstanding anything set forth
herein to the contrary, a Non-Funding Lender shall not have any voting or
consent rights under or with respect to any Loan Document or constitute a
"Lender" or a "Revolving Lender" (or be included in the calculation of
"Requisite Lenders" or "Supermajority Revolving Lenders" hereunder) for any
voting or consent rights under or with respect to any Loan Document. At Borrower
Representative's request, Agent or a Person reasonably acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from any Non-Funding Lender, and each
Non-Funding Lender agrees that it shall, at Agent's request, sell and assign to
Agent or such Person, all of the Commitments of that Non-Funding Lender for an
amount equal to the principal balance of all Loans held by such Non-Funding
Lender and all accrued interest and fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
(e) Dissemination of Information. Agent shall use commercially
reasonable efforts to provide Lenders with any notice of Default or Event of
Default received by Agent from, or delivered by Agent to, any Credit Party, with
notice of any Event of Default of which Agent has actually become aware and with
notice of any action taken by Agent following any Event of Default; provided,
that Agent shall not be liable to any Lender for any failure to do so, except to
the extent that such failure is attributable to Agent's gross negligence or
willful misconduct. Lenders acknowledge that Borrowers are required to provide
Financial Statements and Collateral Reports to Lenders in accordance with
Annexes E and F hereto and agree that Agent shall have no duty to provide the
same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the contrary
notwithstanding, each Lender hereby agrees with each other Lender that no Lender
shall take any action to protect or enforce its rights arising out of this
Agreement or the Notes (including exercising any rights of setoff) without first
obtaining the prior written consent of Agent and Requisite Lenders, it being the
intent of Lenders that any such action to protect or enforce rights under this
Agreement and the Notes shall be taken in concert and at the direction or with
the consent of Agent or Requisite Lenders.
9.10. Syndication and Documentation Agents. The entities identified on the
cover page of this Agreement as the "Syndication Agent" and the "Documentation
Agent", respectively, shall, in each case, not have any right, power,
obligation, liability, responsibility or duty under this Agreement (or any other
Loan Document) other than those applicable to all Lenders as such. Without
limiting the foregoing, the entities so identified as the "Syndication Agent"
and the "Documentation Agent", respectively, shall not have or be deemed to have
any fiduciary relationship with any Lender. Each Lender acknowledges that it has
not relied, and will not rely, on the entities so identified as the "Syndication
Agent" and the "Documentation Agent", respectively, in deciding to enter into
this Agreement and each other Loan Document to which it is a party or in taking
or not taking action hereunder or thereunder.
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10. SUCCESSORS AND ASSIGNS
10.1. Successors and Assigns. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Credit Party, Agent,
Lenders and their respective successors and assigns (including, in the case of
any Credit Party, a debtor-in-possession on behalf of such Credit Party), except
as otherwise provided herein or therein. No Credit Party may assign, transfer,
hypothecate or otherwise convey its rights, benefits, obligations or duties
hereunder or under any of the other Loan Documents without the prior express
written consent of Agent and Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by any Credit Party without the prior express
written consent of Agent and Lenders shall be void. The terms and provisions of
this Agreement are for the purpose of defining the relative rights and
obligations of each Credit Party, Agent and Lenders with respect to the
transactions contemplated hereby and no Person shall be a third party
beneficiary of any of the terms and provisions of this Agreement or any of the
other Loan Documents.
11. MISCELLANEOUS
11.1. Complete Agreement; Modification of Agreement. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in Section 11.2. Any letter of interest, commitment letter, or fee letter
(other than the GE Capital Fee Letter) or confidentiality agreement between any
Credit Party and Agent or any Lender or any of their respective Affiliates,
predating this Agreement and relating to a financing of substantially similar
form, purpose or effect shall be superseded by this Agreement.
11.2. Amendments and Waivers.
(a) Except for actions expressly permitted to be taken by Agent, no
amendment, modification, termination or waiver of any provision of this
Agreement or any other Loan Document, or any consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall be
in writing and signed by Agent and Borrowers, and by Requisite Lenders,
Supermajority Revolving Lenders, Requisite Tranche B 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. All
amendments, modifications or waivers with respect to Tranche B Revolving Credit
Advances prior to the Acquisition Closing Date shall require the written consent
of Requisite Tranche B Lenders.
(b) No amendment, modification, termination or waiver of or consent
with respect to any provision of this Agreement that makes less restrictive the
nondiscretionary criteria for exclusion from Eligible Accounts and Eligible
Inventory set forth in Sections 1.6 and 1.7, shall be effective unless the same
shall be in writing and signed by Agent, Supermajority Revolving Lenders and
Borrowers. No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement that waives compliance with the
conditions precedent set forth in (i) Section 2.2 to the making of any Loan or
the incurrence of any Letter of Credit Obligations shall be effective unless the
same shall be in writing and signed by Agent, Requisite Lenders and Borrowers
and (ii) Section 2.3 to the making of the
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Acquisition Loan shall be effective unless the same shall be in writing and
signed by Agent, Requisite Tranche A Lenders, Requisite Tranche B Lenders and
Borrowers. Notwithstanding anything contained in this Agreement to the contrary,
no waiver or consent with respect to any Default or any Event of Default shall
be effective for purposes of the conditions precedent to the making of Loans or
the incurrence of Letter of Credit Obligations set forth in Section 2.2 unless
the same shall be in writing and signed by Agent, Requisite Lenders and
Borrowers.
(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by Agent and each Lender directly affected thereby: (i)
increase the principal amount of any Lender's Commitment (which action shall be
deemed to directly affect all Lenders); (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan or Letter of Credit
Obligations of any affected Lender; (iii) extend any scheduled payment date
(other than payment dates of mandatory prepayments under Section
1.3(b)(ii)-(iii)) 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) release any Guaranty (except
in connection with a sale of the Stock of the applicable Guarantor which is not
in violation of the terms of this Agreement) or, except as otherwise permitted
herein or in the other Loan Documents, release, subordinate the Agent's Lien or
permit any Credit Party to sell or otherwise dispose of, any Collateral with a
value exceeding $5,000,000 in the aggregate (which action shall be deemed to
directly affect all Lenders); (vi) change the percentage of the Commitments or
of the aggregate unpaid principal amount of the Loans that shall be required for
Lenders or any of them to take any action hereunder; (vii) increase the
percentage advance rates set forth in the definition of the SMP Borrowing Base,
the SI Borrowing Base, or the MCC Borrowing Base, or the percentage in Section
1.1(a)(iv)(y) beyond the rates in effect on the Closing Date, or the aggregate
amount of Overadvances permitted pursuant to Section 1.1(a)(iii); (viii) amend
the definition of Additional Capitalization Requirement to reduce the amount of
net cash proceeds from the issuance of new equity; and (ix) amend or waive this
Section 11.2 or the definitions of the terms "Requisite Lenders" or
"Supermajority Revolving Lenders" insofar as such definitions affect the
substance of this Section 11.2. Furthermore, no amendment, modification,
termination or waiver affecting the rights or duties of Agent or L/C Issuer
under this Agreement or any other Loan Document shall be effective unless in
writing and signed by Agent or L/C Issuer, as the case may be, in addition to
Lenders required hereinabove to take such action. Each amendment, modification,
termination or waiver shall be effective only in the specific instance and for
the specific purpose for which it was given. No amendment, modification,
termination or waiver shall be required for Agent to take additional Collateral
pursuant to any Loan Document. No amendment, modification, termination or waiver
of any provision of any Note shall be effective without the written concurrence
of the holder of that Note. No notice to or demand on any Credit Party in any
case shall entitle such Credit Party or any other Credit Party to any other or
further notice or demand in similar or other circumstances. Any amendment,
modification, termination, waiver or consent effected in accordance with this
Section 11.2 shall be binding upon each Lender at such time and each future
Lender.
(d) If, in connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change"):
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(i) requiring the consent of all affected Lenders, the consent of
Requisite Lenders is obtained, but the consent of other Lenders whose consent is
required is not obtained (any such Lender whose consent is not obtained as
described in this clause (i) and in clauses (ii), (iii) and (iv) below being
referred to as a "Non-Consenting Lender"),
(ii) requiring the consent of Supermajority Revolving Lenders,
the consent of Requisite Lenders is obtained, but the consent of Supermajority
Revolving Lenders is not obtained,
(iii) requiring the consent of Requisite Lenders or Requisite
Tranche B Lenders, the consent of Lenders holding 51% or more of the aggregate
applicable Commitments is obtained, but the consent of Requisite Lenders or
Requisite Tranche B Lenders, as applicable, is not obtained, or
(iv) requiring the consent of Requisite Lenders, the consent of
Lenders holding 51% or more of the aggregate Commitments is obtained, but the
consent of the Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower
Representative's request, Agent or a Person reasonably acceptable to Agent shall
have the right with Agent's consent and in Agent's sole discretion (but shall
have no obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Agent's request, sell and
assign to Agent or such Person, all of the Commitments of such Non-Consenting
Lenders for an amount equal to the principal balance of all Loans held by the
Non-Consenting Lenders and all accrued interest and Fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment Agreement within 180 days from the time such consent is
requested.
(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders (other than
claims for gross negligence or willful misconduct), and so long as no suits,
actions, proceedings or claims are pending or threatened against any Indemnified
Person asserting any damages, losses or liabilities that are Indemnified
Liabilities, Agent shall deliver to Borrowers termination statements, mortgage
releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
11.3. Fees and Expenses. Borrowers shall reimburse (i) Agent for all fees,
costs and expenses (including the reasonable fees and expenses of all of its
counsel, advisors, consultants and auditors) and (ii) Agent (and, with respect
to clauses (c) and (d) below, all Lenders) for all fees, costs and expenses,
including the reasonable fees, costs and expenses of counsel or other advisors
(including environmental and management consultants and appraisers), incurred in
connection with the negotiation and preparation of the Loan Documents and
incurred in connection with:
(a) the forwarding to Borrowers or any other Person on behalf of
Borrowers by Agent of the proceeds of any Loan (including a wire transfer fee of
$10 per wire transfer);
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(b) any amendment, modification or waiver of, consent with respect to,
or termination of, any of the Loan Documents or Related Transactions Documents
or advice in connection with the syndication and administration of the Loans
made pursuant hereto or its rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action
(whether instituted by Agent, any Lender, any Borrower or any other Person and
whether as a party, witness or otherwise) in any way relating to the Collateral,
any of the Loan Documents or any other agreement to be executed or delivered in
connection herewith or therewith, including any litigation, contest, dispute,
suit, case, proceeding or action, and any appeal or review thereof, in
connection with a case commenced by or against any or all of the Borrowers or
any other Person that may be obligated to Agent by virtue of the Loan Documents;
including any such litigation, contest, dispute, suit, proceeding or action
arising in connection with any work-out or restructuring of the Loans during the
pendency of one or more Events of Default; provided that in the case of
reimbursement of counsel for Lenders other than Agent, such reimbursement shall
be limited to one counsel for all such Lenders; provided, further, that no
Person shall be entitled to reimbursement under this clause (c) in respect of
any litigation, contest, dispute, suit, proceeding or action to the extent any
of the foregoing results from such Person's gross negligence or willful
misconduct;
(d) any attempt to enforce any remedies of Agent against any or all of
the Credit Parties or any other Person that may be obligated to Agent or any
Lender by virtue of any of the Loan Documents, including any such attempt to
enforce any such remedies in the course of any work-out or restructuring of the
Loans during the pendency of one or more Events of Default; provided, that in
the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(e) any workout or restructuring of the Loans during the pendency of
one or more Events of Default; and
(f) efforts to (i) monitor the Loans or any of the other Obligations,
(ii) evaluate, observe or assess any of the Credit Parties or their respective
affairs, and (iii) verify, protect, evaluate, assess, appraise, collect, sell,
liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all reasonable expenses,
costs, charges and other fees incurred by such counsel and others in connection
with or relating to any of the events or actions described in this Section 11.3,
all of which shall be payable, on demand, by Borrowers to Agent. Without
limiting the generality of the foregoing, such expenses, costs, charges and fees
may include: fees, costs and expenses of accountants, environmental advisors,
appraisers, investment bankers, management and other consultants and paralegals;
court costs and expenses; photocopying and duplication expenses; court reporter
fees, costs and expenses; long distance telephone charges; air express charges;
telegram or telecopy charges; secretarial overtime charges; and expenses for
travel, lodging and
63
food paid or incurred in connection with the performance of such legal or other
advisory services.
11.4. No Waiver. Agent's or any Lender's failure, at any time or times, to
require strict performance by the Credit Parties of any provision of this
Agreement or any other Loan Document shall not waive, affect or diminish any
right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders, and directed to Borrowers specifying
such suspension or waiver.
11.5. Remedies. Agent's and Lenders' rights and remedies under this
Agreement shall be cumulative and nonexclusive of any other rights and remedies
that Agent or any Lender may have under any other agreement, including the other
Loan Documents, by operation of law or otherwise. Recourse to the Collateral
shall not be required.
11.6. Severability. Wherever possible, each provision of this Agreement and
the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
or any other Loan Document shall be prohibited by or invalid under applicable
law, such provision shall be ineffective only to the extent of such prohibition
or invalidity without invalidating the remainder of such provision or the
remaining provisions of this Agreement or such other Loan Document.
11.7. Conflict of Terms. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement
conflicts with any provision in any of the other Loan Documents, the provision
contained in this Agreement shall govern and control.
11.8. Confidentiality. Agent and each Lender agree to use commercially
reasonable efforts (equivalent to the efforts Agent or such Lender applies to
maintaining the confidentiality of its own confidential information) to maintain
as confidential all confidential information provided to them by the Credit
Parties and designated as confidential for a period of two (2) years following
receipt thereof, except that Agent and any Lender may disclose such information
(a) to Persons employed or engaged by 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 11.8 (and any
such bona fide assignee or participant or potential assignee or participant may
disclose such information to Persons employed or engaged by them as described in
clause (a) above); (c) as required or requested by any Governmental Authority or
reasonably believed by Agent or such Lender to be compelled by any court decree,
subpoena or legal or administrative order or process; (d) as, on the advice of
Agent's or such Lender's counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the
64
Loan Documents or in connection with any Litigation to which Agent or such
Lender is a party; or (f) that ceases to be confidential through no fault of
Agent or any Lender.
11.9. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY
CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN XXX XXXX XXXXXX,
XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND
DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS
PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER
ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS;
PROVIDED, THAT AGENT, LENDERS AND THE CREDIT PARTIES ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY X XXXXX XXXXXXX XXXXXXX XX XXX
XXXX XXXXXX; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY
OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH CREDIT PARTY HEREBY
WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN
ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND
OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH
CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I OF THIS AGREEMENT AND THAT
SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT
PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED
STATES MAILS, PROPER POSTAGE PREPAID.
11.10. Notices. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this
65
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be deemed to have been validly
served, given or delivered: (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10); (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated in Annex I or to such other address
(or facsimile number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Borrower Representative or Agent)
designated in Annex I to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
11.11. Section Titles. The Section titles and Table of Contents contained
in this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
11.12. Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR
DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO
ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF
ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT PARTY 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.
11.14. Press Releases and Related Matters. Each Credit Party executing this
Agreement agrees that neither it nor its Affiliates will in the future issue any
press releases or other public disclosure using the name of GE Capital or its
affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least two (2) Business Days' prior
notice to GE Capital and without the prior written consent of GE Capital unless
(and only to the extent that) such Credit Party or Affiliate is required to do
so under law and then, in any event, such Credit Party or Affiliate will consult
with GE Capital before issuing such press
66
release or other public disclosure. Each Credit Party consents to the
publication by Agent or any Lender of a tombstone or similar advertising
material relating to the financing transactions contemplated by this Agreement
using Borrowers' name, product photographs, logo or trademark. Agent or such
Lender shall provide a draft of any advertising material to each Credit Party
for review and comment prior to the publication thereof. Agent reserves the
right to provide to industry trade organizations information necessary and
customary for inclusion in league table measurements.
11.15. Reinstatement. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against any
Borrower for liquidation or reorganization, should any Borrower become insolvent
or make an assignment for the benefit of any creditor or creditors or should a
receiver or trustee be appointed for all or any significant part of any
Borrower's assets, and shall continue to be effective or to be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
11.16. Advice of Counsel. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 11.9 and 11.13, with its counsel.
11.17. No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
12. CROSS-GUARANTY
12.1. Cross-Guaranty. Each Borrower hereby agrees that such Borrower is
jointly and severally liable for, and hereby absolutely and unconditionally
guarantees to Agent and Lenders and their respective successors and assigns, the
full and prompt payment (whether at stated maturity, by acceleration or
otherwise) and performance of, all Obligations owed or hereafter owing to Agent
and Lenders by each other Borrower. Each Borrower agrees that its guaranty
obligation hereunder is a continuing guaranty of payment and performance and not
of collection, that its obligations under this Section 12 shall not be
discharged until payment and performance, in full, of the Obligations has
occurred, and that its obligations under this Section 12 shall be absolute and
unconditional, irrespective of, and unaffected by,
(a) the genuineness, validity, regularity, enforceability or any
future amendment of, or change in, this Agreement, any other Loan Document or
any other agreement, document or instrument to which any Borrower is or may
become a party;
67
(b) the absence of any action to enforce this Agreement (including
this Section 12) or any other Loan Document or the waiver or consent by Agent
and Lenders with respect to any of the provisions thereof;
(c) the existence, value or condition of, or failure to perfect its
Lien against, any security for the Obligations or any action, or the absence of
any action, by Agent and Lenders in respect thereof (including the release of
any such security);
(d) the insolvency of any Credit Party; or
(e) any other action or circumstances that might otherwise constitute
a legal or equitable discharge or defense of a surety or guarantor.
Each Borrower shall be regarded, and shall be in the same position, as principal
debtor with respect to the Obligations guaranteed hereunder.
12.2. Waivers by Borrowers. Each Borrower expressly waives all rights it
may have now or in the future under any statute, or at common law, or at law or
in equity, or otherwise, to compel Agent or Lenders to marshal assets or to
proceed in respect of the Obligations guaranteed hereunder against any other
Credit Party, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower, Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but for
the provisions of this Section 12 and such waivers, Agent and Lenders would
decline to enter into this Agreement.
12.3. Benefit of Guaranty. Each Borrower agrees that the provisions of this
Section 12 are for the benefit of Agent and Lenders and their respective
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between any other Borrower and Agent or Lenders, the
obligations of such other Borrower under the Loan Documents.
12.4. Subordination of Subrogation, Etc. Notwithstanding anything to the
contrary in this Agreement or in any other Loan Document, and except as set
forth in Section 12.7, each Borrower hereby expressly and irrevocably
subordinates to payment of the Obligations any and all rights at law or in
equity to subrogation, reimbursement, exoneration, contribution, indemnification
or set off and any and all defenses available to a surety, guarantor or
accommodation co-obligor until the Obligations are indefeasibly paid in full in
cash. Each Borrower acknowledges and agrees that this subordination is intended
to benefit Agent and Lenders and shall not limit or otherwise affect such
Borrower's liability hereunder or the enforceability of this Section 12, and
that Agent, Lenders and their respective successors and assigns are intended
third party beneficiaries of the waivers and agreements set forth in this
Section 12.4.
12.5. Election of Remedies. If Agent or any Lender may, under applicable
law, proceed to realize its benefits under any of the Loan Documents giving
Agent or such Lender a Lien upon any Collateral, whether owned by any Borrower
or by any other Person, either by judicial foreclosure or by non-judicial sale
or enforcement, Agent or any Lender may, at its sole option, determine which of
its remedies or rights it may pursue without affecting any of its rights
68
and remedies under this Section 12. If, in the exercise of any of its rights and
remedies, Agent or any Lender shall forfeit any of its rights or remedies,
including its right to enter a deficiency judgment against any Borrower or any
other Person, whether because of any applicable laws pertaining to "election of
remedies" or the like, each Borrower hereby consents to such action by Agent or
such Lender and waives any claim based upon such action, even if such action by
Agent or such Lender shall result in a full or partial loss of any rights of
subrogation that each Borrower might otherwise have had but for such action by
Agent or such Lender. Any election of remedies that results in the denial or
impairment of the right of Agent or any Lender to seek a deficiency judgment
against any Borrower shall not impair any other Borrower's obligation to pay the
full amount of the Obligations. In the event Agent or any Lender shall bid at
any foreclosure or trustee's sale or at any private sale permitted by law or the
Loan Documents, Agent or such Lender may bid all or less than the amount of the
Obligations and the amount of such bid need not be paid by Agent or such Lender
but shall be credited against the Obligations. The amount of the successful bid
at any such sale, whether Agent, Lender or any other party is the successful
bidder, shall be conclusively deemed to be the fair market value of the
Collateral and the difference between such bid amount and the remaining balance
of the Obligations shall be conclusively deemed to be the amount of the
Obligations guaranteed under this Section 12, notwithstanding that any present
or future law or court decision or ruling may have the effect of reducing the
amount of any deficiency claim to which Agent or any Lender might otherwise be
entitled but for such bidding at any such sale.
12.6. Limitation. Notwithstanding any provision herein contained to the
contrary, each Borrower's liability under this Section 12 (which liability is in
any event in addition to amounts for which such Borrower is primarily liable
under Section 1) shall be limited to an amount not to exceed as of any date of
determination the greater of:
(a) the net amount of all Loans advanced to any other Borrower under
this Agreement and then re-loaned or otherwise transferred to, or for the
benefit of, such Borrower; and
(b) the amount that could be claimed by Agent and Lenders from such
Borrower under this Section 12 without rendering such claim voidable or
avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
Act or similar statute or common law after taking into account, among other
things, such Borrower's right of contribution and indemnification from each
other Borrower under Section 12.7.
12.7. Contribution with Respect to Guaranty Obligations
(a) To the extent that any Borrower shall make a payment under this
Section 12 of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a "Guarantor Payment") that, taking
into account all other Guarantor Payments then previously or concurrently made
by any other Borrower, exceeds the amount that such Borrower would otherwise
have paid if each Borrower had paid the aggregate Obligations
69
satisfied by such Guarantor Payment in the same proportion that such Borrower's
"Allocable Amount" (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the Obligations
and termination of the Commitments, such Borrower shall be entitled to receive
contribution and indemnification payments from, and be reimbursed by, each other
Borrower for the amount of such excess, pro rata based upon their respective
Allocable Amounts in effect immediately prior to such Guarantor Payment.
(b) As of any date of determination, the "Allocable Amount" of any
Borrower shall be equal to the maximum amount of the claim that could then be
recovered from such Borrower under this Section 12 without rendering such claim
voidable or avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or
under any applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent
Conveyance Act or similar statute or common law.
(c) This Section 12.7 is intended only to define the relative rights
of Borrowers and nothing set forth in this Section 12.7 is intended to or shall
impair the obligations of Borrowers, jointly and severally, to pay any amounts
as and when the same shall become due and payable in accordance with the terms
of this Agreement, including Section 12.1. Nothing contained in this Section
12.7 shall limit the liability of any Borrower to pay the Loans made directly or
indirectly to that Borrower and accrued interest, Fees and expenses with respect
thereto for which such Borrower shall be primarily liable.
(d) The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Borrower to which such
contribution and indemnification is owing.
(e) The rights of the indemnifying Borrowers against other Credit
Parties under this Section 12.7 shall be exercisable upon the full and
indefeasible payment of the Obligations and the termination of the Commitments.
12.8. Liability Cumulative. The liability of Borrowers under this Section
12 is in addition to and shall be cumulative with all liabilities of each
Borrower to Agent and Lenders under this Agreement and the other Loan Documents
to which such Borrower is a party or in respect of any Obligations or obligation
of the other Borrower, without any limitation as to amount, unless the
instrument or agreement evidencing or creating such other liability specifically
provides to the contrary.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the
date first written above.
STANDARD MOTOR PRODUCTS, INC.
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Treasurer
-----------------------------
MARDEVCO CREDIT CORP.
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Treasurer
-----------------------------
STANRIC, INC.
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Treasurer
-----------------------------
GENERAL ELECTRIC CAPITAL
CORPORATION,
as Agent and Lender
By: /s/ XXXXXX XXXXXXXX
--------------------------------
Name: Xxxxxx Xxxxxxxx
------------------------------
Duly Authorized Signatory
71
GMAC COMMERCIAL FINANCE LLC
(as successor by merger to
GMAC Commercial Credit LLC),
as Documentation Agent and Lender
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
------------------------------
Title: Senior Vice President
-----------------------------
BANK OF AMERICA, N.A.,
as Syndication Agent and Lender
By: /s/ XXXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxxx X. Xxxxxx
------------------------------
Title: Vice President
-----------------------------
TRANSAMERICA BUSINESS CAPITAL
CORPORATION,
as Lender
By: /s/ XXXXXXXXXXX X. NERRITO
--------------------------------
Name: Xxxxxxxxxxx X. Nerrito
------------------------------
Title: VP
-----------------------------
CONGRESS FINANCIAL CORPORATION,
as Lender
By: /s/ XXXXXX X. XXXX
--------------------------------
Name: Xxxxxx X. Xxxx
------------------------------
Title: AVP
-----------------------------
JPMORGAN CHASE BANK,
as Lender
By: /s/ XXXXXXX XXXXXX
--------------------------------
Name: Xxxxxxx Xxxxxx
------------------------------
Title: Vice President
-----------------------------
72
HSBC BANK USA,
as Lender
By: /s/ XXXXXX X. XXXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxxx
------------------------------
Title: Vice President
-----------------------------
FOOTHILL CAPITAL CORPORATION,
as Lender
By: /s/ XXXX XXXXXXX
--------------------------------
Name: Xxxx Xxxxxxx
------------------------------
Title: Vice President
-----------------------------
XXXXXXX XXXXX CAPITAL, a Division of
XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC., as Lender
By: /s/ T. BUROWSKY
--------------------------------
Name: T. Burowsky
------------------------------
Title: Director
-----------------------------
73
The following Persons are
signatories to this Agreement in
their capacity as Credit Parties and
not as Borrowers.
SMP MOTOR PRODUCTS LTD.
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Treasurer
-----------------------------
RENO STANDARD INCORPORATED
By: /s/ XXXXXX X. XXXXXX
--------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------
Title: Treasurer
-----------------------------
74
ANNEX A (Recitals)
to
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless
otherwise provided elsewhere in the Loan Documents) the following respective
meanings, and all references to Sections, Exhibits, Schedules or Annexes in the
following definitions shall refer to Sections, Exhibits, Schedules or Annexes of
or to the Agreement:
"Account Debtor" means any Person who may become obligated to any
Credit Party under, with respect to, or on account of, an Account, Chattel Paper
or General Intangibles (including a payment intangible).
"Accounting Changes" has the meaning ascribed thereto in Annex G.
"Accounts" means all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, including (a) all accounts
receivable, other receivables, book debts and other forms of obligations (other
than forms of obligations evidenced by Chattel Paper or Instruments) (including
any such obligations that may be characterized as an account or contract right
under the Code), (b) all of each Credit Party's rights in, to and under all
purchase orders or receipts for goods or services, (c) all of each Credit
Party's rights to any goods represented by any of the foregoing (including
unpaid sellers' rights of rescission, replevin, reclamation and stoppage in
transit and rights to returned, reclaimed or repossessed goods), (d) all rights
to payment due to any Credit Party for property sold, leased, licensed, assigned
or otherwise disposed of, for a policy of insurance issued or to be issued, for
a secondary obligation incurred or to be incurred, for energy provided or to be
provided, for the use or hire of a vessel under a charter or other contract,
arising out of the use of a credit card or charge card, or for services rendered
or to be rendered by such Credit Party or in connection with any other
transaction (whether or not yet earned by performance on the part of such Credit
Party), (e) all health care insurance receivables and (f) all collateral
security of any kind, given by any Account Debtor or any other Person with
respect to any of the foregoing.
"Acquisition" means the acquisition of all or substantially all of the
assets of Xxxx Corporation's Aftermarket Engine Management Division.
"Acquisition Agreement" means the Asset Purchase Agreement, dated as
of February 7, 2003, by and among Xxxx Corporation, a Virginia corporation,
Automotive Controls Corp., a Connecticut corporation, BWD Automotive
Corporation, a Delaware corporation, Pacer Industries, Inc., a Missouri
corporation, Ristance Corporation, an Indiana corporation, Engine Controls
Distribution Services, Inc., a Delaware corporation, as sellers, and SMP, as
buyer.
"Acquisition Closing Date" means the date the Acquisition is
effectuated.
A-1
"Acquisition Conditions" means the conditions set forth on Annex D-2
to the Agreement.
"Acquisition Loan Facility" means the Tranche B Revolving Credit
Advances.
"Additional Capitalization Requirement" means, based upon the
$94,000,000 cash portion of the consideration to be paid in connection with the
Acquisition (the "Cash Purchase Price") the receipt by SMP of no less than
$59,000,000 of net cash proceeds from the issuance of new equity prior to the
closing of the Acquisition on accepted terms. If the Cash Purchase Price is less
than $94,000,000, then the Additional Capitalization Requirement shall be
reduced by one dollar for every two dollar reduction in the Cash Purchase Price.
"Additional MCC Amortizing Availability" means (i) as to any Eligible
Real Estate purchased by MCC after the Closing Date fifty percent (50%) of the
Fair Market Value of such Eligible Real Estate and as to Eligible Equipment
purchased by MCC after the Closing Date 85% of the Net Orderly Liquidation Value
of such Eligible Equipment less (ii) one-twenty eighth of the amount determined
under clause (i) for each full Fiscal Quarter occurring after the purchase of
such Eligible Real Estate or Eligible Equipment, as the case may be.
"Additional SI Amortizing Availability" means as to each item of
Eligible Equipment purchased by SI after the Closing Date, (i) 85% of the Net
Orderly Liquidation Value of such Eligible Equipment less (ii) one-twenty eighth
of the amount determined under clause (i) for each full Fiscal Quarter occurring
after the purchase of such Eligible Equipment.
"Additional SMP Amortizing Availability" means (i) as to any Eligible
Real Estate purchased by SMP after the Closing Date fifty percent (50%) of the
Fair Market Value of such Eligible Real Estate and as to Eligible Equipment
purchased by SMP after the Closing Date 85% of the Net Orderly Liquidation Value
of such Eligible Equipment less (ii) one-twenty eighth of the amount determined
under clause (i) for each full Fiscal Quarter occurring after the purchase of
such Eligible Real Estate or Eligible Equipment, as the case may be.
"Advance" means any Revolving Credit Advance.
"Affiliate" means, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, 5% or more of the Stock having ordinary voting
power in the election of directors of such Person, (b) each Person that
controls, is controlled by or is under common control with such Person, (c) each
of such Person's officers, directors, joint venturers and partners and (d) in
the case of Borrowers, the immediate family members, spouses and lineal
descendants of individuals who are Affiliates of any Borrower. For the purposes
of this definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise; provided, however, that the term "Affiliate" shall specifically
exclude Agent and each Lender and, to the extent Seller would be an Affiliate
due solely to the closing of the Acquisition, Seller.
"Agent" means GE Capital in its capacity as Agent for Lenders or its
successor appointed pursuant to Section 9.7.
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"Aggregate Amortizing Availability" means the sum of MCC Amortizing
Availability, SI Amortizing Availability and SMP Amortizing Availability,
subject to the limitation in Section 1.1(a)(iv).
"Aggregate Borrowing Base" means as of any date of determination, an
amount equal to (i) the sum of the MCC Borrowing Base, the SMP Borrowing Base
and the SI Borrowing Base; less (ii) any Reserves except to the extent already
deducted therefrom.
"Agreement" means the Amended and Restated Credit Agreement by and
among Borrowers, the other Credit Parties party thereto, GE Capital, as Agent
and Lender and the other Lenders from time to time party thereto, as the same
may be amended, supplemented, restated or otherwise modified from time to time.
"Appendices" has the meaning ascribed to it in the recitals to the
Agreement.
"Applicable Margins" means collectively the Applicable Unused Line Fee
Margin, the Applicable Revolver Index Margin, the Applicable Revolver LIBOR
Margin.
"Applicable Revolver Index Margin" means the per annum interest rate
margin from time to time in effect and payable in addition to the Index Rate
applicable to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Revolver LIBOR Margin" means the per annum interest rate
from time to time in effect and payable in addition to the LIBOR Rate applicable
to the Revolving Loan, as determined by reference to Section 1.5(a).
"Applicable Unused Line Fee Margin" means the per annum fee, from time
to time in effect, payable in respect of Borrowers' non-use of committed funds
pursuant to Section 1.9(b), which fee is determined by reference to Section
1.5(a).
"Asbestos Claims" means claims seeking to impose liability on SMP in
connection with any alleged exposure to asbestos.
"Asbestos Reserve" means, as of the date of determination by Agent, an
amount equal to (1) in the event that Borrowers have obtained an insurance
policy from an insurer, and in form and substance, acceptable to Agent, covering
Borrowers' asbestos liability claims, the sum of (A) all unpaid premiums with
respect thereto and (B) the amount of the deductible for such policy, less, on a
dollar-for-dollar basis, the amount of any payment made by any Borrower after
the Closing Date against such deductible, or (2) in the event that Borrowers
have not obtained an insurance policy as described in clause (1) above: the
greater of (i) $7,000,000, (ii) an amount equal to Borrowers' medium five year
expected asbestos liability (based upon the most recent actuarial study received
by Agent), or (iii) at Agent's discretion, an amount which reflects the
aggregate amount of unsettled claims at any time and from time to time, on and
after the Closing Date and continuing until the earlier of: (A) such time that
Borrowers elect, if at all, to obtain the insurance policy referred to in clause
(1) above (in which case, the Asbestos Reserve shall be as provided in clause
(1) above) and (B) the Commitment Termination Date.
"Assignment Agreement" has the meaning ascribed to it in Section
9.1(a).
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"AutoZone/SunTrust Program" means the Vendor Program established
between AutoZone, Inc. and SunTrust Bank pursuant to which AutoZone, Inc.
consolidates multiple invoices from a supplier into a single large payment and
issues a negotiable draft to the supplier, which draft is purchased by SunTrust
from the supplier at an agreed upon purchase price.
"Bankruptcy Code" means the provisions of Title 11 of the United
States Code, 11 U.S.C. 'SS''SS'101 et seq.
"Blocked Accounts" has the meaning ascribed to it in Annex C.
"Borrower Representative" means SMP in its capacity as Borrower
Representative pursuant to the provisions of Section 1.1(d).
"Borrowers" and "Borrower" have the respective meanings ascribed
thereto in the preamble to the Agreement.
"Borrowing Availability" means as of any date of determination (a) as
to all Borrowers, the lesser of (i) the Maximum Amount and (ii) the Aggregate
Borrowing Base, in each case, less the aggregate Revolving Credit Advances then
outstanding, or (b) as to an individual Borrower, the lesser of (i) the Maximum
Amount less the Revolving Loan outstanding to all other Borrowers and (ii) that
Borrower's separate Borrowing Base, less the Revolving Credit Advances
outstanding to that Borrower; provided that an Overadvance in accordance with
Section 1.1(a)(iii) may cause the Revolving Loan to exceed the Aggregate
Borrowing Base or a Borrower's separate Borrowing Base by the amount of such
permitted Overadvance. Borrowing Availability for purposes of clauses (a) and
(b) shall be determined with trade payables being paid consistent with past
practices, with expenses and liabilities being paid in the ordinary course of
business, without acceleration of sales and without deterioration of working
capital.
"Borrowing Base" means as the context may require, the MCC Borrowing
Base, the SMP Borrowing Base, and the SI Borrowing Base or any such Borrowing
Base. Notwithstanding anything contained herein to the contrary, for purposes of
determining any Borrowing Base, (a) the value of Eligible Inventory acquired by
any Borrower from any other Borrower shall be the lower of cost (determined on a
first-in, first-out basis) or market of either the selling Borrower or the
purchasing Borrower, whichever is lower and (b) the Net Orderly Liquidation
Value of any Eligible Equipment or Eligible Inventory and the Fair Market Value
of any Eligible Real Estate may be adjusted by Agent from time to time to
reflect the results of the most recent appraisal thereof.
"Borrowing Base Certificate" means a certificate to be executed and
delivered from time to time by each Borrower in the form attached to the
Agreement as Exhibit 4.1(b).
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which banks are required or permitted to be closed in the State New York and
in reference to LIBOR Loans shall mean any such day that is also a LIBOR
Business Day.
"Capital Expenditures" means, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions
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thereto that have a useful life of more than one year and that are required to
be capitalized under GAAP.
"Capital Lease" means, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" means, with respect to any Capital Lease of
any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
"Car Quest Long Term Accounts" means Accounts owed by General Parts
Inc. that provide for extended dating for the initial stocking orders that arose
from such Account Debtor's acquisition of certain assets of APS, Inc.
"Cash Collateral Account" has the meaning ascribed to it Annex B.
"Cash Equivalents" has the meaning ascribed to it in Annex B.
"Cash Management Systems" has the meaning ascribed to it in Section
1.8.
"Cash Purchase Price" has the meaning ascribed to it in the definition
of Additional Capitalization Requirement.
"Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934,)
other than the Existing Stockholder Group shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934,) of 30% or more
of the issued and outstanding shares of capital Stock of SMP having the right to
vote for the election of directors of SMP under ordinary circumstances; (b)
during any period of twelve consecutive calendar months, individuals who at the
beginning of such period constituted the board of directors of SMP (together
with any new directors whose election by the board of directors of SMP or whose
nomination for election by the Stockholders of SMP was approved by a vote of at
least two-thirds of the directors then still in office who either were directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason other than death or disability to
constitute a majority of the directors then in office; or (c) SMP ceases to own
and control all of the economic and voting rights associated with all of the
outstanding capital Stock of any of its Subsidiaries other than as set forth on
Disclosure Schedule (3.8).
"Charges" means all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Collateral, (b) the Obligations, (c)
the employees, payroll, income or gross receipts of any Credit Party, (d) any
Credit Party's ownership or use of any properties or other assets, or (e) any
other aspect of any Credit Party's business.
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"Chattel Paper" means any "chattel paper," as such term is defined in
the Code, including electronic chattel paper, now owned or hereafter acquired by
any Credit Party.
"Closing Date" means February 7, 2003.
"Closing Checklist" means the schedule, including all appendices,
exhibits or schedules thereto, listing certain documents and information to be
delivered in connection with the Agreement, the other Loan Documents and the
transactions contemplated thereunder, substantially in the form attached hereto
as Annex D.
"Code" means the Uniform Commercial Code as the same may, from time to
time, be enacted and in effect in the State of New York; provided, that to the
extent that the Code is used to define any term herein or in any Loan Document
and such term is defined differently in different Articles or Divisions of the
Code, the definition of such term contained in Article or Division 9 shall
govern; provided, further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection or priority of, or
remedies with respect to, Agent's or any Lender's Lien on any Collateral is
governed by the Uniform Commercial Code as enacted and in effect in a
jurisdiction other than the State of New York, the term "Code" shall mean the
Uniform Commercial Code as enacted and in effect in such other jurisdiction
solely for purposes of the provisions thereof relating to such attachment,
perfection, priority or remedies and for purposes of definitions related to such
provisions.
"Collateral" means the property covered by the Security Agreement, 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
Agent, on behalf of itself and Lenders, to secure the Obligations.
"Collateral Documents" means the Security Agreement, the Pledge
Agreements, the Guaranties, the Mortgages, the Intellectual Property Security
Agreement, and all similar agreements entered into guaranteeing payment of, or
granting a Lien upon property as security for payment of, the Obligations.
"Collateral Reports" means the reports with respect to the Collateral
referred to in Annex F.
"Collection Account" means that certain account of Agent, account
number 000-000-00 in the name of Agent at DeutscheBank Trust Company Americas in
New York, New York ABA No. 021 001 033, or such other account as may be
specified in writing by Agent as the "Collection Account."
"Commitment Termination Date" means the earliest of (a) February 7,
2008, (b) the date of termination of Lenders' obligations to make Advances and
to incur Letter of Credit Obligations or permit existing Loans to remain
outstanding pursuant to Section 8.2(b), and (c) the date of indefeasible
prepayment in full by Borrowers of the Loans and the cancellation and return (or
stand-by guarantee) of all Letters of Credit or the cash collateralization of
all Letter of Credit Obligations pursuant to Annex B, and the permanent
reduction of all Commitments to zero dollars ($0).
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"Commitments" means (a) as to any Lender, the aggregate of such
Lender's Tranche A Revolving Loan Commitment and Tranche B Revolving Loan
Commitment as set forth on Annex J to the Agreement or in the most recent
Assignment Agreement executed by such Lender and (b) as to all Lenders, the
aggregate of all Lenders' Tranche A Revolving Loan Commitments and Tranche B
Revolving Loan Commitments which aggregate commitment shall be Three Hundred and
Five Million Dollars ($305,000,000) on the Closing Date, as to each of clauses
(a) and (b), as such Commitments may be reduced, amortized or adjusted from time
to time in accordance with the Agreement. On and after the Acquisition Closing
Date, references to Tranche A Revolving Loan Commitments and Tranche B Revolving
Loan Commitments shall be references to the Revolving Loan Commitments as set
forth in Annex J or in the most recent Assignment Agreement executed by such
Lender.
"Compliance Certificate" has the meaning ascribed to it in Annex E.
"Concentration Account" has the meaning ascribed to it in Annex C.
"Contracts" means all "contracts," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, in any event,
including all contracts, undertakings, or agreements (other than rights
evidenced by Chattel Paper, Documents or Instruments) in or under which any
Credit Party may now or hereafter have any right, title or interest, including
any agreement relating to the terms of payment or the terms of performance of
any Account.
"Control Letter" means a letter agreement between Agent and (i) the
issuer of uncertificated securities with respect to uncertificated securities in
the name of any Credit Party, (ii) a securities intermediary with respect to
securities, whether certificated or uncertificated, securities entitlements and
other financial assets held in a securities account in the name of any Credit
Party, (iii) a futures commission merchant or clearing house, as applicable,
with respect to commodity accounts and commodity contracts held by any Credit
Party, whereby, among other things, the issuer, securities intermediary or
futures commission merchant disclaims any security interest in the applicable
financial assets, acknowledges the Lien of Agent, on behalf of itself and
Lenders, on such financial assets, and agrees to follow the instructions or
entitlement orders of Agent without further consent by the affected Credit
Party.
"Copyright License" means any and all rights now owned or hereafter
acquired by any Credit Party under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyright Security Agreements" means the Copyright Security
Agreements made in favor of Agent, on behalf of itself and Lenders, by each
applicable Credit Party, as amended, modified or supplemented from time to time.
"Copyrights" means all of the following now owned or hereafter adopted
or acquired by any Credit Party: (a) all copyrights and General Intangibles of
like nature (whether registered or unregistered), all registrations and
recordings thereof, and all applications in connection therewith, including all
registrations, recordings and applications in the United States Copyright Office
or in any similar office or agency of the United States, any state or territory
A-7
thereof, or any other country or any political subdivision thereof, and (b) all
reissues, extensions or renewals thereof.
"Credit Parties" means each Borrower, RSI and SMP Canada.
"Xxxx Amortizing Availability" means $3,835,000 less $136,965 per
Fiscal Quarter commencing with the Fiscal Quarter ending December 31, 2002.
"Default" means any event that, with the passage of time or notice or
both, would, unless cured or waived, become an Event of Default.
"Default Rate" has the meaning ascribed to it in Section 1.5(d).
"Deposit Accounts" means all "deposit accounts" as such term is
defined in the Code, now or hereafter held in the name of any Credit Party
including, without limitation, all checking accounts.
"Disbursement Accounts" has the meaning ascribed to it in Annex C.
"Disclosure Schedules" means the Schedules prepared by Borrowers and
denominated as Disclosure Schedules (1.4) through (6.7) in the Index to the
Agreement.
"Documents" means all "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located.
"Dollars" or "$" means lawful currency of the United States of America
and, solely for purposes of Section 1.6, of Canada.
"EBITDA" means, with respect to any Person for any fiscal period,
without duplication, an amount equal to (a) consolidated net income of such
Person for such period determined in accordance with GAAP, minus (b) the sum of
(i) income tax credits (ii) gain from extraordinary items for such period, (iii)
any aggregate net gain (but not any aggregate net loss) during such period
arising from the sale, exchange or other disposition of capital assets by such
Person (including any fixed assets, whether tangible or intangible, all
inventory sold in conjunction with the disposition of fixed assets and all
securities), and (iv) any other non-operating, non-cash gains that have been
added in determining consolidated net income, in each case to the extent
included in the calculation of consolidated net income of such Person for such
period in accordance with GAAP, but without duplication, plus (c) the sum of (i)
any provision for income taxes, (ii) Interest Expense, (iii) loss from
extraordinary items for such period, (iv) the amount of non-cash charges
(including depreciation and amortization) for such period, (v) amortized debt
discount for such period, and (vi) the amount of any deduction to consolidated
net income as the result of any grant to any members of the management of such
Person of any Stock, in each case to the extent included in the calculation of
consolidated net income of such Person for such period in accordance with GAAP,
but without duplication. For purposes of this definition, the following items
shall be excluded in determining consolidated net income of a Person: (1) the
income (or deficit) of any other Person accrued prior to the date it became a
Subsidiary of, or was merged or consolidated into, such Person or any of such
Person's Subsidiaries; (2) the undistributed earnings of any Subsidiary of such
Person to the extent that
A-8
the declaration or payment of dividends or similar distributions by such
Subsidiary is not at the time permitted by the terms of any contractual
obligation or requirement of law applicable to such Subsidiary; (3) any
restoration to income of any reserve established for specific non-recurring
items, except to the extent that provision for such reserve was made out of
income accrued during such period; (4) any write-up of any asset; (5) any net
gain from the collection of the proceeds of life insurance policies; (6) any net
gain arising from the acquisition of any securities, or the extinguishment,
under GAAP, of any Indebtedness, of such Person; (7) in the case of a successor
to such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets; (8) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary; and (9) Restructuring
Charges. The amount of Restructuring Charges shall not exceed $3,000,000 for the
three month period ending June 30, 2003, $7,000,000 for the six month period
ending September 30, 2003, $10,000,000 for the nine month period ending December
31, 2003 and $11,000,000 for the twelve month period ending March 31, 2004.
"Eligible Accounts" has the meaning ascribed to it in Section 1.6.
"Eligible Equipment" means, as to any Borrower, Equipment which is
subject to a first priority Lien in favor of Agent, for its benefit and for the
ratable benefit of Lenders, and which is appraised by an appraiser satisfactory
to Agent.
"Eligible Inventory" has the meaning ascribed to it in Section 1.7.
"Eligible Real Estate" means as to any Borrower, real estate with
respect to which Agent shall have received (a) Mortgages covering all of such
real estate together with (i) title insurance policies, current as-built
surveys, zoning letters and certificates of occupancy, in each case reasonably
satisfactory in form and substance to Agent, (ii) evidence that counterparts of
the Mortgages have been recorded in all places to the extent necessary or
desirable, in the judgment of Agent, to create a valid and enforceable first
priority Lien (subject to Permitted Encumbrances) on such real estate in favor
of Agent for the benefit of itself and Lenders (or in favor of such other
trustee as may be required or desired under local law); and (iii) an opinion of
counsel in each state in which any such real estate is located in form and
substance and from counsel reasonably satisfactory to Agent, (b) Phase I
Environmental Site Assessment Reports, consistent with American Society for
Testing and Materials (ASTM) Standard E 1527-00 and applicable state
requirements, on all of such real estate, dated no more than 6 months prior to
the date of purchase of such real estate, prepared by environmental engineers
reasonably satisfactory to Agent, all in form and substance reasonably
satisfactory to Agent, in its sole discretion and Agent shall have further
received (i) such environmental review and audit reports, including Phase II
reports, with respect to such real estate as Agent may request, and Agent shall
be satisfied in its sole discretion, with the contents of all such environmental
reports, and (ii) letters executed by the environmental firms preparing such
environmental reports, in form and substance reasonably satisfactory to Agent,
authorizing Agent and Lenders to rely on such reports, and (c) appraisals of
such real estate which shall be in form and substance, and prepared by
appraisers, reasonably satisfactory to Agent.
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"Environmental Laws" means all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and any legally binding 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 (i)
human health or safety from exposure to Hazardous Material or (ii) 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.
'SS''SS'9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. 'SS''SS'5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. 'SS''SS'136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. 'SS''SS'6901 et seq.); the Toxic Substance
Control Act (15 U.S.C. 'SS''SS'2601 et seq.); the Clean Air Act (42 U.S.C.
'SS''SS'7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
'SS''SS'1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
'SS''SS'651 et seq.); and the Safe Drinking Water Act (42 U.S.C.
'SS''SS'300(f) et seq.), 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" means, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim, suit, action, investigation, proceeding or demand by
any Person, 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" means all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" means all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located and,
in any event, including all such Credit Party's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment, including embedded software and peripheral equipment and all
engineering, processing and manufacturing equipment, office machinery,
furniture, materials handling equipment, tools, attachments, accessories,
automotive equipment, trailers, trucks, forklifts, molds, dies, stamps, motor
vehicles, rolling stock and other equipment of every kind and nature, trade
fixtures and fixtures not forming a part of real property, together with all
additions and accessions thereto, replacements therefor, all parts therefor, all
substitutes for any of the foregoing, fuel therefor, and all manuals, drawings,
instructions, warranties and rights with respect thereto, and all products and
proceeds thereof and condemnation awards and insurance proceeds with respect
thereto.
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"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations promulgated thereunder.
"ERISA Affiliate" means, with respect to any Credit Party, any trade
or business (whether or not incorporated) that, together with such Credit Party,
are treated as a single employer within the meaning of Sections 414(b), (c), (m)
or (o) of the IRC.
"ERISA Event" means, with respect to any Credit Party or any ERISA
Affiliate, (a) with respect to a Title IV Plan, any event described in Section
4043(c) of ERISA for which notice to the PBGC has not been waived; (b) the
withdrawal of any Credit Party or ERISA Affiliate from a Title IV Plan subject
to Section 4063 of ERISA during a plan year in which it was a substantial
employer, as defined in Section 4001(a)(2) of ERISA; (c) the complete or partial
withdrawal of any Credit Party or any ERISA Affiliate from any Multiemployer
Plan; (d) the filing of a notice of intent to terminate a Title IV Plan in a
distress termination described in Section 4041(c) of ERISA or the treatment of a
plan amendment as a termination under Section 4041 of ERISA; (e) the institution
of proceedings to terminate a Title IV Plan or Multiemployer Plan by the PBGC;
(f) with respect to a Title IV Plan, the existence of an "accumulated funding
deficiency" (as defined in Section 412 of the IRC or Section 302 of ERISA
whether or not waived, or the failure to make by its due date a required
installment under Section 412(m) of the IRC or the failure to make any required
contribution to a Multiemployer Plan; (g) the filing pursuant to Section 412(d)
of the IRC or Section 303(d) of ERISA of an application for the waiver of the
minimum funding standard with respect to a Title IV Plan; (h) the making of any
amendment to any Title IV Plan which could result in the imposition of a lien or
the posting of a bond or other security; (i) with respect to a Title IV Plan or
event described in Section 4062(e) of ERISA, (j) any other event or condition
that 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; (k) the termination of a Multiemployer Plan
under Section 4041A of ERISA or the reorganization or insolvency of a
Multiemployer Plan under Section 4241 or 4245 of ERISA; or (l) the loss of a
Qualified Plan's qualification or tax exempt status; or (m) the termination of a
Plan described in Section 4064 of ERISA.
"ESOP" means a Plan that is intended to satisfy the requirements of
Section 4975(e)(7) of the IRC.
"Event of Default" has the meaning ascribed to it in Section 8.1.
"Excess Formula Availability" means the average daily difference for
the prior Fiscal Quarter between (a) the Aggregate Borrowing Base and (b) the
total outstanding balance of Revolving Loans (with trade payables being paid
consistent with past practices, expenses and liabilities being paid in the
ordinary course of business, without acceleration of sales and without
deterioration of working capital).
"Existing Stockholder Group" means Xxxxxx X. Xxxxx, Xxxxxxxx X. Xxxxx,
Xxxxx Xxxxx, the Xxxxx Family Foundation, Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxx,
Xxxxx X. Xxxxx and the various Fife family trusts for which any of the foregoing
are trustees.
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"Fair Labor Standards Act" means the Fair Labor Standards Act, 29
U.S.C. 'SS''SS'201 et seq.
"Fair Market Value" means the fair market value of the asset being
valued based upon an appraisal, in form and substance satisfactory to Agent, by
an appraiser satisfactory to Agent.
"Federal Funds Rate" means, for any day, a floating rate equal to the
weighted average of the rates on overnight Federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System.
"Fees" means any and all fees payable to Agent or any Lender pursuant
to the Agreement or any of the other Loan Documents.
"Financial Covenants" means the financial covenants set forth in Annex
G.
"Financial Statements" means the consolidated and consolidating income
statements, statements of cash flows and balance sheets of Borrowers delivered
in accordance with Section 3.4 and Annex E.
"Fiscal Month" means any of the monthly accounting periods of
Borrowers.
"Fiscal Quarter" means any of the quarterly accounting periods of
Borrowers, ending on or about the last day of March, June, September and
December of each year.
"Fiscal Year" means any of the annual accounting periods of Borrowers
ending on or about December 31 of each year.
"Fixed Charges" means with respect to any Person for any fiscal period
(a) the aggregate of all Interest Expense paid or accrued during such period,
plus (b) scheduled payments of principal with respect to Indebtedness during
such period, plus (c) Capital Expenditures during such period, plus (d)
dividends paid during such period, plus (e) cash taxes paid during such period,
plus (f) amounts paid in accordance with Section 6.14(f)(ii).
"Fixed Charge Coverage Ratio" means, with respect to any Person for
any fiscal period, the ratio of EBITDA to Fixed Charges.
"Fixtures" means all "fixtures" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party.
"Funded Debt" means, with respect to any Person, without duplication,
all Indebtedness for borrowed money evidenced by notes, bonds, debentures, or
similar evidences of Indebtedness that by its terms matures more than one year
from, or is directly or indirectly renewable or extendible at such Person's
option under a revolving credit or similar agreement
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obligating the lender or lenders to extend credit over a period of more than one
year from the date of creation thereof, and specifically including Capital Lease
Obligations, current maturities of long-term debt, revolving credit and
short-term debt extendible beyond one year at the option of the debtor, and also
including, in the case of Borrowers, the Obligations and, without duplication,
Guaranteed Indebtedness consisting of guaranties of Funded Debt of other
Persons.
"GAAP" means generally accepted accounting principles in the United
States of America consistently applied, as such term is further defined in Annex
G to the Agreement.
"GE Capital" means General Electric Capital Corporation, a Delaware
corporation.
"GE Capital Fee Letter" means that certain letter, dated as of October
1, 2002, as amended by an amendment letter dated January 27, 2003, between GE
Capital and Borrowing Representative with respect to certain Fees to be paid
from time to time by Borrowers to GE Capital.
"General Intangibles" means all "general intangibles," as such term is
defined in the Code, now owned or hereafter acquired by any Credit Party,
including all right, title and interest that such Credit Party may now or
hereafter have in or under any Contract, all payment intangibles, customer
lists, Licenses, Copyrights, Trademarks, Patents, and all applications therefor
and reissues, extensions or renewals thereof, rights in Intellectual Property,
interests in partnerships, joint ventures and other business associations,
licenses, permits, copyrights, trade secrets, proprietary or confidential
information, inventions (whether or not patented or patentable), technical
information, procedures, designs, knowledge, know-how, software, data bases,
data, skill, expertise, experience, processes, models, drawings, materials and
records, goodwill (including the goodwill associated with any Trademark or
Trademark License), all rights and claims in or under insurance policies
(including insurance for fire, damage, loss and casualty, whether covering
personal property, real property, tangible rights or intangible rights, all
liability, life, key man and business interruption insurance, and all unearned
premiums), choses in action, rights to receive tax refunds and other payments,
rights to receive dividends, distributions, cash, Instruments and other property
in respect of or in exchange for pledged Stock and Investment Property, rights
of indemnification, all books and records, correspondence, credit files,
invoices and other papers, including without limitation all tapes, cards,
computer runs and other papers and documents in the possession or under the
control of such Credit Party or any computer bureau or service company from time
to time acting for such Credit Party.
"Goods" means all "goods" as defined in the Code, now owned or
hereafter acquired by any Credit Party, wherever located, including embedded
software to the extent included in "goods" as defined in the Code, manufactured
homes, standing timber that is cut and removed for sale and unborn young of
animals.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
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"Guaranteed Indebtedness" means as to any Person, any obligation of
such Person guaranteeing, providing comfort or otherwise supporting any
Indebtedness, lease, dividend, or other obligation ("primary obligation") of any
other Person (the "primary obligor") in any manner, including any obligation or
arrangement of such Person to (a) purchase or repurchase any such primary
obligation, (b) advance or supply funds (i) for the purchase or payment of any
such primary obligation or (ii) to maintain working capital or equity capital of
the primary obligor or otherwise to maintain the net worth or solvency or any
balance sheet condition of the primary obligor, (c) purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, (d) protect the beneficiary of such arrangement from
loss (other than product warranties given in the ordinary course of business) or
(e) indemnify the owner of such primary obligation against loss in respect
thereof. The amount of any Guaranteed Indebtedness at any time shall be deemed
to be an amount equal to the lesser at such time of (x) the stated or
determinable amount of the primary obligation in respect of which such
Guaranteed Indebtedness is incurred and (y) the maximum amount for which such
Person may be liable pursuant to the terms of the instrument embodying such
Guaranteed Indebtedness, or, if not stated or determinable, the maximum
reasonably anticipated liability (assuming full performance) in respect thereof.
"Guaranties" means, collectively, each Subsidiary Guaranty and any
other guaranty executed by any Guarantor in favor of Agent and Lenders in
respect of the Obligations.
"Guarantors" means each Subsidiary of each Borrower, and each other
Person, if any, that executes a guaranty or other similar agreement in favor of
Agent, for itself and the ratable benefit of Lenders, in connection with the
transactions contemplated by the Agreement and the other Loan Documents.
"Hazardous Material" means any substance, material or waste that is
regulated by, or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance that is (a) defined as a
"solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, or (b) petroleum or
any fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's),
or any radioactive substance.
"Indebtedness" means, with respect to any Person, without duplication,
(a) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property payment for which is deferred 6 months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are unsecured and not overdue by more than 6 months unless being
contested in good faith, (b) all reimbursement and other obligations with
respect to letters of credit, bankers' acceptances and surety bonds, whether or
not matured, (c) all obligations evidenced by notes, bonds, debentures or
similar instruments, (d) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Capital Lease Obligations and the present
value (discounted at the Index Rate as in effect on the Closing Date) of future
rental payments under all synthetic leases, (f) all obligations of
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such Person under commodity purchase or option agreements or other commodity
price hedging arrangements, in each case whether contingent or matured, (g) all
obligations of such Person under any foreign exchange contract, currency swap
agreement, interest rate swap, cap or collar agreement or other similar
agreement or arrangement designed to alter the risks of that Person arising from
fluctuations in currency values or interest rates, in each case whether
contingent or matured, (h) all Indebtedness referred to above secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property or other assets
(including accounts and contract rights) owned by such Person, even though such
Person has not assumed or become liable for the payment of such Indebtedness,
and (i) the Obligations.
"Indemnified Liabilities" has the meaning ascribed to it in Section
1.13.
"Indemnified Person" has the meaning ascribed to in Section 1.13.
"Index Rate" means, for any day, a floating rate equal to the higher
of (i) the rate publicly quoted from time to time by The Wall Street Journal as
the "prime rate" (or, if The Wall Street Journal ceases quoting a prime rate,
the highest per annum rate of interest published by the Federal Reserve Board in
Federal Reserve statistical release H.15 (519) entitled "Selected Interest
Rates" as the Bank prime loan rate or its equivalent), and (ii) the Federal
Funds Rate plus 50 basis points per annum. Each change in any interest rate
provided for in the Agreement based upon the Index Rate shall take effect at the
time of such change in the Index Rate.
"Index Rate Loan" means a Loan or portion thereof bearing interest by
reference to the Index Rate.
"Instruments" means all "instruments," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located,
and, in any event, including all certificates of deposit, and all promissory
notes and other evidences of indebtedness, other than instruments that
constitute, or are a part of a group of writings that constitute, Chattel Paper.
"Intellectual Property" means any and all Licenses, Patents,
Copyrights, Trademarks, and the goodwill associated with such Trademarks.
"Intercompany Notes" has the meaning ascribed to it in Section 6.3.
"Interest Expense" means, with respect to any Person for any fiscal
period, interest expense (whether cash or non-cash) of such Person determined in
accordance with GAAP for the relevant period ended on such date, including,
interest expense with respect to any Funded Debt of such Person and interest
expense for the relevant period that has been capitalized on the balance sheet
of such Person.
"Interest Payment Date" means (a) as to any Index Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, and (b) as
to any LIBOR Loan, the last day of the applicable LIBOR Period; provided that,
in addition to the foregoing, each of (x) the date upon which all of the
Commitments have been terminated and the Loans have been paid
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in full and (y) the Commitment Termination Date shall be deemed to be an
"Interest Payment Date" with respect to any interest that has then accrued under
the Agreement.
"Inventory" means all "inventory," as such term is defined in the
Code, now owned or hereafter acquired by any Credit Party, wherever located, and
in any event including inventory, merchandise, goods and other personal property
that are held by or on behalf of any Credit Party for sale or lease or are
furnished or are to be furnished under a contract of service, or that constitute
raw materials, work in process, finished goods, returned goods, or materials or
supplies of any kind, nature or description used or consumed or to be used or
consumed in such Credit Party's business or in the processing, production,
packaging, promotion, delivery or shipping of the same, including other supplies
and embedded software.
"Investment Property" means all "investment property" as such term is
defined in the Code now owned or hereafter acquired by any Credit Party,
wherever located, including (i) all securities, whether certificated or
uncertificated, including stocks, bonds, interests in limited liability
companies, partnership interests, treasuries, certificates of deposit, and
mutual fund shares; (ii) all securities entitlements of any Credit Party,
including the rights of any Credit Party to any securities account and the
financial assets held by a securities intermediary in such securities account
and any free credit balance or other money owing by any securities intermediary
with respect to that account; (iii) all securities accounts of any Credit Party;
(iv) all commodity contracts of any Credit Party; and (v) all commodity accounts
held by any Credit Party.
"IRC" means the Internal Revenue Code of 1986 and all regulations
promulgated thereunder.
"IRS" means the Internal Revenue Service.
"L/C Issuer" has the meaning ascribed to it in Annex B.
"L/C Sublimit" has the meaning ascribed to it in Annex B.
"Lenders" means GE Capital, the other Lenders named on the signature
pages of the Agreement, and, if any such Lender shall decide to assign all or
any portion of the Obligations, such term shall include any assignee of such
Lender.
"Letter of Credit Fee" has the meaning ascribed to it in Annex B.
"Letter of Credit Obligations" means all outstanding obligations
incurred by Agent and Lenders at the request of Borrower Representative, whether
direct or indirect, contingent or otherwise, due or not due, in connection with
the issuance of Letters of Credit by Agent or another L/C Issuer or the purchase
of a participation as set forth in Annex B with respect to any Letter of Credit.
The amount of such Letter of Credit Obligations shall equal the maximum amount
that may be payable at such time or at any time thereafter by Agent or Lenders
thereupon or pursuant thereto.
"Letter of Credit Rights" means letter of credit rights as such term
is defined in the Code, now owned or hereafter acquired by any Credit Party,
including rights to payment or
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performance under a letter of credit, whether or not such Credit Party, as
beneficiary, has demanded or is entitled to demand payment or performance.
"Letters of Credit" means documentary or standby letters of credit
issued for the account of any Borrower by any L/C Issuer.
"LIBOR Business Day" means a Business Day on which banks in the City
of London are generally open for interbank or foreign exchange transactions.
"LIBOR Loan" means a Loan or any portion thereof bearing interest by
reference to the LIBOR Rate.
"LIBOR Period" means, with respect to any LIBOR Loan, each period
commencing on a LIBOR Business Day selected by Borrower Representative pursuant
to the Agreement and ending one, two or three months thereafter, as selected by
Borrower Representative's irrevocable notice to Agent as set forth in Section
1.5(e); provided, that the foregoing provision relating to LIBOR Periods is
subject to the following:
(a) if any LIBOR Period would otherwise end on a day that is not a
LIBOR Business Day, such LIBOR Period shall be extended to the next succeeding
LIBOR Business Day unless the result of such extension would be to carry such
LIBOR Period into another calendar month in which event such LIBOR Period shall
end on the immediately preceding LIBOR Business Day;
(b) any LIBOR Period that would otherwise extend beyond the Commitment
Termination Date shall end on the immediately preceding LIBOR Business Day;
(c) any LIBOR Period that begins on the last LIBOR Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such LIBOR Period) shall end on the last
LIBOR Business Day of a calendar month;
(d) Borrower Representative shall select LIBOR Periods so as not to
require a payment or prepayment of any LIBOR Loan during a LIBOR Period for such
Loan; and
(e) Borrower Representative shall select LIBOR Periods so that there
shall be no more than ten (10) separate LIBOR Loans in existence at any one
time.
"LIBOR Rate" means for each LIBOR Period, a rate of interest
determined by Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable LIBOR Period that appears on Telerate Page 3750 as of 11:00 a.m.
(London time), on the second full LIBOR Business Day next preceding the first
day of such LIBOR Period; divided by
(b) a number equal to 1.0 minus the aggregate (but without
duplication) of the rates (expressed as a decimal fraction) of reserve
requirements in effect on the day that is two (2) LIBOR Business Days prior to
the beginning of such LIBOR Period (including basic,
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supplemental, marginal and emergency reserves under any regulations of the
Federal Reserve Board or other Governmental Authority having jurisdiction with
respect thereto, as now and from time to time in effect) for Eurocurrency
funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of
the Federal Reserve Board that are required to be maintained by a member bank of
the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the LIBOR Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Agent and
Borrower Representative.
"License" means any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Credit Party.
"Lien" means any mortgage or deed of trust, pledge, hypothecation,
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" has the meaning ascribed to it in Section 3.13.
"Loan Account" has the meaning ascribed to it in Section 1.12.
"Loan Documents" means the Agreement, the Notes, the Collateral
Documents, the Master Standby Agreement, the Master Documentary Agreement, the
Rate Protection Agreement and all other agreements, instruments, documents and
certificates identified in the Closing Checklist executed and delivered to, or
in favor of, Agent or any Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, and all other written
matter whether heretofore, now or hereafter executed by or on behalf of any
Credit Party, or any employee of any Credit Party, and delivered to Agent or any
Lender in connection with the Agreement or the transactions contemplated
thereby. Any reference in the Agreement or any other Loan Document to a Loan
Document shall include all appendices, exhibits or schedules thereto, and all
amendments, restatements, supplements or other modifications thereto, and shall
refer to the Agreement or such Loan Document as the same may be in effect at any
and all times such reference becomes operative.
"Loans" means, prior to the Acquisition Closing Date, the Tranche A
Revolving Credit Advances, and on and after the Acquisition Closing Date, the
Revolving Loan.
"Lock Boxes" has the meaning ascribed to it in Annex C.
"Margin Stock" has the meaning ascribed to in Section 3.10.
"Master Documentary Agreement" means the Master Agreement for
Documentary Letters of Credit dated as of the Closing Date among Borrowers, as
Applicant(s), and GE Capital.
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"Master Standby Agreement" means the Master Agreement for Standby
Letters of Credit dated as of the Closing Date among Borrowers, as Applicant(s),
and GE Capital, as issuer.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of any
Credit Party or the Credit Parties considered as a whole, (b) any Borrower's
ability to pay any of the Loans or any of the other Obligations in accordance
with the terms of the Agreement, (c) the Collateral or Agent's Liens, on behalf
of itself and Lenders, on the Collateral or the priority of such Liens, or (d)
Agent's or any Lender's rights and remedies under the Agreement and the other
Loan Documents. Without limiting the generality of the foregoing, any event or
occurrence adverse to one or more Credit Parties which results or could
reasonably be expected to result in costs, damages, liabilities, expenditures or
net loss of revenues, individually or in the aggregate, to any Credit Party in
any 20-day period in excess of (x) $20,000,000 prior to the Acquisition Closing
Date and (y) $30,000,000 on and after the Acquisition Closing Date, shall
constitute a Material Adverse Effect.
"Maximum Amount" means, as of any date of determination, an amount
equal to the Revolving Loan Commitment of all Lenders as of that date.
"MCC" means Mardevco Credit Corp., a New York corporation.
"MCC Amortizing Availability" means (A) $3,536,000 less $160,714 per
Fiscal Quarter commencing with the Fiscal Quarter ending December 31, 2002, plus
(B) the Additional MCC Amortizing Availability, minus (C) an amount equal to (i)
50% of the Fair Market Value of any Eligible Real Estate as of the Closing Date
or the date it is purchased by MCC or 85% of the Net Orderly Liquidation Value
of any Eligible Equipment as of the Closing Date or the date it is purchased by
MCC, which is the basis of MCC Amortizing Availability, and which is subject to
a loss, sale, destruction or other disposition, less (ii) the product of
one-twenty eighth of the amount determined under the preceding clause (i) and
the number of full Fiscal Quarters that have occurred since the Closing Date or
the purchase of such Eligible Real Estate or Eligible Equipment to the date of
such loss, sale, destruction or other disposition, as the case may be.
"MCC Borrowing Base" means, as of any date of termination by Agent,
from time to time, an amount equal to the sum, at such time of:
(a) up to 85% of the book value of MCC's Eligible Accounts; and
(b) up to the lesser of (i) 60% of the book value of MCC's Eligible
Inventory valued at the lower of cost (determined on a first-in, first-out
basis) or market or (ii) 85% of the Net Orderly Liquidation Value of MCC's
Eligible Inventory as set forth in the most recent appraisal prepared by an
independent appraisal firm acceptable to Agent, in each case valued at the lower
of cost (determined on a first-in, first-out basis) or market; and
(c) with respect to documentary Letters of Credit opened solely for
the purposes of purchasing Eligible Inventory and having an expiry date of 90
days or less from the date of issuance, a percentage equal to inventory advance
rate in effect at the time of issuance of any such Letter of Credit multiplied
by the cost of the goods constituting Eligible Inventory being purchased under
such documentary Letters of Credit (so long as such Eligible Inventory is
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(i) fully insured, (ii) is subject to a first priority security interest in and
lien upon such goods in favor of Agent and (iii) is evidenced or deliverable
pursuant to documents, notices, instruments, statements and bills of lading that
have been delivered to Agent or an agent acting on its behalf), and
(d) MCC Amortizing Availability; less
(e) Letter of Credit Obligations incurred on behalf of MCC,
in each case less any Reserves established by Agent at such time in
its reasonable credit judgment.
"Mortgaged Properties" has the meaning assigned to it in Annex D.
"Mortgages" means each of the mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, collateral assignments of leases or other
real estate security documents delivered by any Credit Party to Agent on behalf
of itself and Lenders with respect to the Mortgaged Properties, as amended,
modified or supplemented from time to time, all in form and substance reasonably
satisfactory to Agent.
"Multiemployer Plan" means a "multiemployer plan" as defined in
Sections 3(37) or 4001(a)(3) of ERISA, and to which any Credit Party or ERISA
Affiliate is making, is obligated to make or has made or been obligated to make,
contributions on behalf of participants who are or were employed by any of them.
"Net Orderly Liquidation Value" means the orderly liquidation value of
the asset being valued based upon an appraisal, in form and substance
satisfactory to Agent, by an appraiser satisfactory to Agent.
"Net Worth" means, with respect to any Person as of any date of
determination, the book value of the assets of such Person, minus the sum of (a)
reserves applicable thereto, and (b) all of such Person's liabilities on a
consolidated basis (including accrued and deferred income taxes), all as
determined in accordance with GAAP.
"Non-Funding Lender" has the meaning ascribed to it in Section
9.9(a)(ii).
"Notes" means the Revolving Notes.
"Notice of Conversion/Continuation" has the meaning ascribed to it in
Section 1.5(e).
"Notice of Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a).
"Obligations" means all loans, advances, debts, liabilities and
obligations for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any Credit
Party to Agent or any Lender, and all covenants and duties regarding such
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amounts, of any kind or nature, present or future, whether or not evidenced by
any note, agreement or other instrument, arising under the Agreement or any of
the other Loan Documents or pursuant to any cash management services provided by
any Lender to any Credit Party. This term includes all principal, interest
(including all interest that accrues after the commencement of any case or
proceeding by or against any Credit Party in bankruptcy, whether or not allowed
in such case or proceeding), Fees, Charges, expenses, attorneys' fees and any
other sum chargeable to any Credit Party under the Agreement or any of the other
Loan Documents.
"Original Closing Date" means April 27, 2001.
"Original Credit Agreement" means the Credit Agreement dated as of
April 27, 2001 by and among Borrowers, the other Credit Parties party thereto,
GE Capital as Agent and Lender and the other Original Lenders party thereto, as
same was amended, supplemented or otherwise modified prior to the Closing Date.
"Original Lenders" means the Lenders who were Lenders under the
Original Credit Agreement.
"Overadvance" has the meaning ascribed to it in Section 1.1(a)(iii).
"Patent License" means rights under any written agreement now owned or
hereafter acquired by any Credit Party granting any right with respect to any
invention on which a Patent is in existence.
"Patent Security Agreements" means the Patent Security Agreements made
in favor of Agent, on behalf of itself and Lenders, by each applicable Credit
Party, as amended, modified or supplemented from time to time.
"Patents" means all of the following in which any Credit Party now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or of any other country, all registrations and recordings thereof, and
all applications for letters patent of the United States or of any other
country, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any State, or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" means a Plan described in Section 3(2) of ERISA.
"Permitted Acquisition" has the meaning ascribed to it in Section 6.1.
"Permitted Encumbrances" means the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or which are being contested in accordance with Section 5.2(b); (b) pledges or
deposits of money securing statutory obligations under workmen's compensation,
unemployment insurance, social security or public liability laws or similar
legislation (excluding Liens under ERISA); (c) pledges or deposits of money
securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Credit Party is a party as lessee made in the
ordinary course of business; (d)
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inchoate and unperfected workers', mechanics' or similar liens arising in the
ordinary course of business, so long as such Liens attach only to Equipment,
Fixtures and/or Real Estate; (e) carriers', warehousemen's, suppliers' or other
similar possessory liens arising in the ordinary course of business and securing
liabilities in an outstanding aggregate amount not in excess of $100,000 at any
time, so long as such Liens attach only to Inventory; (f) deposits securing, or
in lieu of, surety, appeal or customs bonds in proceedings to which any Credit
Party is a party; (g) any attachment or judgment lien not constituting an Event
of Default under Section 8.1(j); (h) zoning restrictions, easements, licenses,
or other restrictions on the use of any Real Estate or other minor
irregularities in title (including leasehold title) thereto, so long as the same
do not materially impair the use, value, or marketability of such Real Estate;
(i) presently existing or hereafter created Liens in favor of Agent, on behalf
of Lenders; (j) Liens expressly permitted under clauses (b) and (c) of Section
6.7 of the Agreement; (k) liens on SMP's publicly-held stock which is held in
trust for SMP's ESOP and (l) following the Acquisition Closing Date, "Permitted
Encumbrances" shall include Capital Leases of up to $13,000,000 in the aggregate
as described in the projections provided to Agent and Lenders on or about
January 28, 2003.
"Permitted Overnight Investments" means investments in a money market
fund which invests in (a) marketable direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof; (b)
investments in commercial paper maturing within six months from the date of
acquisition thereof and having, at such date of acquisition, a rating of at
least "P2" or the equivalent thereof from S&P or of at least "A2" or the
equivalent thereof from Xxxxx'x; (c) investments in certificates of deposit,
banker's acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money market
deposit accounts issued or offered by, any domestic office of any commercial
bank organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of not
less than $250,000,000; and (d) repurchase agreements with a term of not more
than 90 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above.
"Person" means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation, limited
liability company, institution, public benefit corporation, other entity or
government (whether federal, state, county, city, municipal, local, foreign, or
otherwise, including any instrumentality, division, agency, body or department
thereof).
"Plan" means, at any time, an "employee benefit plan", as defined in
Section 3(3) of ERISA, that any Credit Party or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to or has maintained,
contributed to or had an obligation to contribute to at any time within the past
7 years on behalf of participants who are or were employed by any Credit Party
or ERISA Affiliate.
"Pledge Agreements" means, collectively, the SMP Pledge Agreement and
any pledge agreements entered into after the Closing Date by any Credit Party
(as required by the
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Agreement or any other Loan Document), as amended, modified or supplemented from
time to time.
"Pledged Cash" means cash, which may at any time be pledged by SI in
favor of Agent, pursuant to documentation satisfactory to Agent, which cash is
or shall be on deposit at Banco Popular, or any other bank reasonably acceptable
to Agent, in the form of a time deposit.
"Pledged Securities" means marketable securities, which may at any
time be pledged by SI in favor of Agent, pursuant to documentation satisfactory
to Agent.
"Proceeds" means "proceeds," as such term is defined in the Code,
including (a) any and all proceeds of any insurance, indemnity, warranty or
guaranty payable to any Credit Party from time to time with respect to any of
the Collateral, (b) any and all payments (in any form whatsoever) made or due
and payable to any Credit Party from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any Governmental Authority (or any Person acting under
color of governmental authority), (c) any claim of any Credit Party against
third parties (i) for past, present or future infringement of any Patent or
Patent License, or (ii) for past, present or future infringement or dilution of
any Copyright, Copyright License, Trademark or Trademark License, or for injury
to the goodwill associated with any Trademark or Trademark License, (d) any
recoveries by any Credit Party against third parties with respect to any
litigation or dispute concerning any of the Collateral including claims arising
out of the loss or nonconformity of, interference with the use of, defects in,
or infringement of rights in, or damage to, Collateral, (e) all amounts
collected on, or distributed on account of, other Collateral, including
dividends, interest, distributions and Instruments with respect to Investment
Property and pledged Stock, and (f) any and all other amounts, rights to payment
or other property acquired upon the sale, lease, license, exchange or other
disposition of Collateral and all rights arising out of Collateral or otherwise.
"Pro Forma" means the unaudited consolidated and consolidating balance
sheet of Borrowers and their Subsidiaries as of December 31, 2002 after giving
pro forma effect to the Related Transactions.
"Projections" means Borrowers' forecasted consolidated and
consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash flow
statements; and (d) capitalization statements, all prepared on a Subsidiary by
Subsidiary or division-by-division basis, if applicable, and otherwise
consistent with the historical Financial Statements of the Borrowers, together
with appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share" means with respect to all matters relating to any
Lender, (a) with respect to the Revolving Loan, the percentage obtained by
dividing (i) the Revolving Loan Commitment of that Lender by (ii) the aggregate
Revolving Loan Commitments of all Lenders, and (b) with respect to all Revolving
Loans on and after the Commitment Termination Date, the percentage obtained by
dividing (i) the aggregate outstanding principal balance of the Revolving Loans
held by that Lender, by (ii) the outstanding principal balance of the Revolving
Loans held by all Lenders. Notwithstanding the foregoing, prior to the
Acquisition Closing Date, the Pro Rata Share of Tranche B Revolving Lenders
shall be 0% and the Pro Rata share of Tranche A
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Revolving Loans shall be based upon the Tranche A Revolving Loan Commitment of
such Lender and the aggregate Tranche A Revolving Loan Commitments of all
Lenders.
"Qualified Plan" means a Pension Plan that is intended to be
tax-qualified under Section 401(a) of the IRC.
"Qualified Assignee" means (a) any Lender, any Affiliate of any Lender
or any entity (whether a corporation, partnership, trust or otherwise) that is
engaged in making, purchasing, holding or otherwise investing in bank loans and
similar extensions of credit in the ordinary course of its business and is
administered or managed by a Lender or an Affiliate of such Lender and, with
respect to any Lender that is an investment fund that invests in commercial
loans, any other investment fund that invests in commercial loans and that is
managed or advised by the same investment advisor as such Lender or by an
Affiliate of such investment advisor, and (b) any commercial bank, savings and
loan association or savings bank or any other entity which is an "accredited
investor" (as defined in Regulation D under the Securities Act of 1933) which
extends credit or buys loans as one of its businesses, including insurance
companies, mutual funds, lease financing companies and commercial finance
companies, in each case, which has a rating of BBB or higher from S&P and a
rating of Baa2 or higher from Xxxxx'x at the date that it becomes a Lender and
which, through its applicable lending office, is capable of lending to Borrowers
without the imposition of any withholding or similar taxes; provided that no
Person proposed to become a Lender after the Closing Date and determined by
Agent to be acting in the capacity of a vulture fund or distressed debt
purchaser shall be a Qualified Assignee, and no Person or Affiliate of such
Person that holds Subordinated Debt or Stock issued by any Credit Party shall be
a Qualified Assignee.
"Rate Protection Agreement" means, collectively, any interest rate,
swap, cap, collar or similar agreement entered into by any Borrower or any of
its Subsidiaries under which the counterparty of such agreement is (or at the
time such agreement was entered into, was) a Lender or an Affiliate of a Lender.
"Rate Protection Obligations" means Obligations which arise under any
Rate Protection Agreement.
"Real Estate" has the meaning ascribed to it in Section 3.6.
"Related Transactions" means the initial borrowing under the Revolving
Loan on the Closing Date, the Acquisition, the issuance of additional equity in
connection with the Additional Capitalization Requirement, the payment of all
fees, costs and expenses associated with all of the foregoing and the execution
and delivery of all of the Related Transactions Documents.
"Related Transactions Documents" means the Loan Documents, the
Acquisition Agreement, the Subordinated Debt Documents and all other agreements
or instruments executed in connection with the Related Transactions.
"Release" means any release, threatened release, spill, emission,
leaking, pumping, pouring, emitting, emptying, escape, injection, deposit,
disposal, discharge, dispersal, dumping, leaching or migration of Hazardous
Material in the indoor or outdoor environment,
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including the movement of Hazardous Material through or in the air, soil,
surface water, ground water or property.
"Requisite Lenders" means Revolving Lenders having (a) 66-2/3% of the
Revolving Loan Commitments of all Revolving Lenders, or (b) if the Revolving
Loan Commitments have been terminated, 66-2/3% of the aggregate outstanding
amount of the Revolving Loan.
"Requisite Tranche A Lenders" means Tranche A Revolving Lenders having
66-2/3% of the Tranche A Revolving Loan Commitments.
"Requisite Tranche B Lenders" means Tranche B Revolving Lenders having
66-2/3% of the Tranche B Revolving Loan Commitments.
"Reserves" means (a) reserves established by Agent from time to time
against Eligible Inventory pursuant to Section 5.9, (b) reserves established
pursuant to Section 5.4(c), and (c) the Asbestos Reserve established by Agent
from time to time, and (d) such other reserves against Eligible Accounts,
Eligible Inventory or Borrowing Availability of any Borrower that Agent may, in
its reasonable credit judgment, establish from time to time. Without limiting
the generality of the foregoing, Reserves established to ensure the payment of
accrued Interest Expenses or Indebtedness shall be deemed to be a reasonable
exercise of Agent's credit judgment.
"Restricted Payment" means, with respect to any Credit Party (a) the
declaration or payment of any dividend or the incurrence of any liability to
make any other payment or distribution of cash or other property or assets in
respect of Stock; (b) any payment on account of the purchase, redemption,
defeasance, sinking fund or other retirement of such Credit Party's Stock or any
other payment or distribution made in respect thereof, either directly or
indirectly; (c) any payment or prepayment of principal of, premium, if any, or
interest, fees or other charges on or with respect to, and any redemption,
purchase, retirement, defeasance, sinking fund or similar payment and any claim
for rescission with respect to, any Subordinated Debt; (d) any payment made to
redeem, purchase, repurchase or retire, or to obtain the surrender of, any
outstanding warrants, options or other rights to acquire Stock of such Credit
Party now or hereafter outstanding; (e) any payment of a claim for the
rescission of the purchase or sale of, or for material damages arising from the
purchase or sale of, any shares of such Credit Party's Stock or of a claim for
reimbursement, indemnification or contribution arising out of or related to any
such claim for damages or rescission; (f) any loan, contribution, or other
transfer of funds or other property to any Stockholder of such Credit Party who
has filed Form 13-G other (i) than payment of compensation in the ordinary
course of business to Stockholders who have filled a Form 13-G and who are
employees of or consultants to such Person and (ii) payment of trade payables
incurred in the ordinary course of such Credit Party's business; and (g) any
payment of management fees (or other fees of a similar nature) by such Credit
Party to any Stockholder of such Credit Party or its Affiliates.
"Restructuring Charges" means expenses incurred on the income
statements of SMP during Fiscal Year 2003 and the first Fiscal Quarter of Fiscal
Year 2004 associated with the
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integration of the operations being acquired pursuant to the Acquisition and
specifically identified on the projections delivered on January 28, 2003 by SMP.
"Retiree Welfare Plan" means, at any time, a welfare plan (within the
meaning of Section 3(1) 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 or other similar state law and at
the sole expense of the participant or the beneficiary of the participant.
"Revolving Credit Advance" has the meaning ascribed to it in Section
1.1(a)(i)(C) and, prior to the Acquisition Closing Date, shall have the same
meaning as Tranche A Revolving Credit Advance.
"Revolving Lenders" means, as of any date of determination, Lenders
having a Revolving Loan Commitment.
"Revolving Loan" means, at any time, the sum of (i) the aggregate
amount of Revolving Credit Advances outstanding to Borrowers (which, prior to
the Acquisition Closing Date, shall consist solely of Tranche A Revolving Credit
Advances) plus (ii) the aggregate Letter of Credit Obligations incurred on
behalf of Borrowers. Unless the context otherwise requires, references to the
outstanding principal balance of the Revolving Loan shall include the
outstanding balance of Letter of Credit Obligations.
"Revolving Loan Commitment" means (i) as to any Revolving Lender, the
aggregate commitment of such Lender to make Revolving Credit Advances or incur
Letter of Credit Obligations as set forth on Annex J to the Agreement or in the
most recent Assignment Agreement executed by such Lender and (ii) as to all
Revolving Lenders, the aggregate commitment of all Revolving Lenders to make
Revolving Credit Advances or incur Letter of Credit Obligations, which aggregate
commitment shall be Three Hundred and Five Million Dollars ($305,000,000) (it
being understood and agreed by each Credit Party and Lender that prior to the
Acquisition Closing Date the Tranche B Revolving Lenders shall not be obligated
to make any Tranche B Revolving Credit Advance) as such amount may be adjusted,
if at all, from time to time in accordance with the Agreement.
"Revolving Note" has the meaning ascribed to it in Section 1.1(a)(ii).
"RSI" means Reno Standard Incorporated, a Nevada corporation.
"Security Agreement" means the Security Agreement dated the Original
Closing Date herewith entered into by and among Agent, on behalf of itself and
Lenders, and each Credit Party that is a signatory thereto, as amended,
supplemented or modified from time to time.
"Seller" means Xxxx Corporation, a Virginia corporation.
"SI" means Stanric, Inc., a Delaware corporation.
"SI Amortizing Availability" means (A) $1,700,000 less $77,250 per
Fiscal Quarter commencing with the Fiscal Quarter ending December 31, 2002, plus
(B) the Additional
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SI Amortizing Availability, minus (C) an amount equal to (i) 85% of the Net
Orderly Liquidation Value of any Eligible Equipment, as of the Closing Date or
the date it is purchased by SI, which is the basis of SI Amortizing
Availability, and which is subject to a loss, sale, destruction or other
disposition, less (ii) the product of one-twenty eighth of the amount determined
under the preceding clause (i) and the number of full Fiscal Quarters that have
occurred since the Closing Date or the purchase of such Eligible Equipment to
the date of such loss, sale, destruction or other disposition, as the case may
be.
"SI Borrowing Base" means, as of any date of termination by Agent,
from time to time, an amount equal to the sum, at such time of:
(a) up to 85% of the book value of SI's Eligible Accounts; and
(b) up to the lesser of (i) 60% of the book value of SI's Eligible
Inventory valued at the lower of cost (determined on a first-in, first-out
basis) or market; or (ii) 85% of the Net Orderly Liquidation Value of SI's
Eligible Inventory as set forth in the most recent appraisal prepared by an
independent appraisal firm acceptable to Agent; and
(c) up to the lesser of (i) $15,000,000 and (ii) the sum of (A) 95% of
the Pledged Cash and (B) 50% of the market value of the Pledged Securities; and
(d) with respect to documentary Letters of Credit opened solely for
the purposes of purchasing Eligible Inventory and having an expiry date of 90
days or less from the date of issuance, a percentage equal to the inventory
advance rate in effect at the time of issuance of any such Letter of Credit
multiplied by the cost of the goods constituting Eligible Inventory being
purchased under such documentary Letters of Credit (so long as such Eligible
Inventory is (i) fully insured, (ii) is subject to a first priority security
interest in and lien upon such goods in favor of Agent and (iii) is evidenced or
deliverable pursuant to documents, notices, instruments, statements and bills of
lading that have been delivered to Agent or an agent acting on its behalf); and
(e) SI Amortizing Availability; less
(f) Letter of Credit Obligations incurred on behalf of SI,
in each case less any Reserves established by Agent at such time in
its reasonable credit judgment.
"SMP" means Standard Motor Products, Inc., a New York corporation.
"SMP Amortizing Availability" means (A) $13,808,500 less $618,493 per
Fiscal Quarter commencing with the Fiscal Quarter ending December 31, 2002, plus
(B) the Additional SMP Amortizing Availability, plus (C) on and after the
Acquisition Closing Date, the Xxxx Amortizing Availability, minus (D) an amount
equal to (i) 50% of the Fair Market Value of any Eligible Real Estate as of the
Closing Date or the date it is purchased by SMP or 85% of the Net Orderly
Liquidation Value of any Eligible Equipment as of the Closing Date or the date
it is purchased by SMP, which is the basis of SMP Amortizing Availability, and
which is subject to a loss, sale, destruction or other disposition, less (ii)
the product of one-twenty eighth of the
A-27
amount determined under the preceding clause (i) and the number of full Fiscal
Quarters that have occurred since the Closing Date or the purchase of such
Eligible Real Estate or Eligible Equipment to the date of such loss, sale,
destruction or other disposition, as the case may be.
"SMP Borrowing Base" means, as of any date of determination by Agent,
from time to time, an amount equal to the sum at such time of:
(a) up to 85% of the book value of SMP's Eligible Accounts; and
(b) up to the lesser of (i) 60% of the book value of SMP's Eligible
Inventory valued at the lower of cost (determined on a first-in, first-out
basis) or market; or (ii) 85% of the Net Orderly Liquidation Value of SMP's
Eligible Inventory as set forth in the most recent appraisal prepared by an
independent appraisal firm acceptable to Agent; and
(c) with respect to documentary Letters of Credit opened solely for
the purposes of purchasing Eligible Inventory and having an expiry date of 90
days or less from the date of issuance, a percentage equal to the inventory
advance rate in effect at the time of issuance of any such Letter of Credit
multiplied by the cost of the goods constituting Eligible Inventory being
purchased under such documentary Letters of Credit (so long as such Eligible
Inventory is (i) fully insured, (ii) is subject to a first priority security
interest in and lien upon such goods in favor of Agent and (iii) is evidenced or
deliverable pursuant to documents, notices, instruments, statements and bills of
lading that have been delivered to Agent or an agent acting on its behalf); and
(d) SMP Amortizing Availability; less
(e) Letter of Credit Obligations incurred on behalf of SMP,
in each case less any Reserves established by Agent at such time in
its reasonable credit judgment.
"SMP Canada" means SMP Motor Products, Ltd., a Canadian corporation.
"SMP HK" means Standard Motor Products (Hong Kong) Limited, a Hong
Kong Corporation.
"SMP Pledge Agreement" means the Pledge Agreement dated the Original
Closing Date executed by SMP in favor of Agent, on behalf of itself and Lenders,
pledging all Stock of its Subsidiaries (except with respect to foreign
Subsidiaries other than a "check the box" subsidiary, 51% of the capital stock
shall be pledged), if any, and all Intercompany Notes owing to or held by it, as
amended, modified or supplemented from time to time.
"Software" means all "software" as such term is defined in the Code,
now owned or hereafter acquired by any Credit Party, other than software
embedded in any category of goods, including all computer programs and all
supporting information provided in connection, with a transaction related to any
program.
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"Solvent" means, with respect to any Person on a particular date, that
on such date (a) the fair value of the property of such Person is greater than
the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature; and
(d) such Person is not engaged in a business or transaction, and is not about to
engage in a business or transaction, for which such Person's property would
constitute an unreasonably small capital. The amount of contingent liabilities
(such as litigation, guaranties and pension plan liabilities) at any time shall
be computed as the amount that, in light of all the facts and circumstances
existing at the time, represents the amount that can be reasonably be expected
to become an actual or matured liability.
"Stock" means all shares, options, warrants, general or limited
partnership interests, membership interests or other equivalents (regardless of
how designated) of or in a corporation, partnership, limited liability company
or equivalent entity whether voting or nonvoting, including common stock,
preferred stock or any other "equity security" (as such term is defined in Rule
3a11-1 of the General Rules and Regulations promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934).
"Stockholder" means, with respect to any Person, each holder of Stock
of such Person.
"Subordinated Debt" means the Indebtedness of SMP evidenced by the
Subordinated Debt Documents and any other Indebtedness of any Credit Party
subordinated to the Obligations in a manner and form satisfactory to Agent and
Lenders in their sole discretion, as to right and time of payment and as to any
other rights and remedies thereunder.
"Subordinated Debt Documents" means (a) that certain Indenture dated
as of July 26, 1999 between SMP and HSBC Bank USA, as trustee and any documents,
agreements or instruments executed in connection therewith, and (b) on and after
the Acquisition Closing Date, the subordinated note payable to the Seller in
connection with the Acquisition.
"Subsidiary" means, with respect to any Person, (a) any corporation of
which an aggregate of more than 50% of the outstanding Stock having ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether, at the time, Stock of any other class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time, directly or indirectly, owned
legally or beneficially by such Person or one or more Subsidiaries of such
Person, or with respect to which any such Person has the right to vote or
designate the vote of 50% or more of such Stock whether by proxy, agreement,
operation of law or otherwise, and (b) any partnership or limited liability
company in which such Person and/or one or more Subsidiaries of such Person
shall have an interest (whether in the form of voting or participation in
profits or capital contribution) of more than 50% or of which any such Person is
a general partner or may exercise the powers of a general partner. Unless the
context otherwise requires, each reference to a Subsidiary shall be a reference
to a Subsidiary of a Borrower.
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"Subsidiary Guaranty" means the Subsidiary Guaranty dated the Original
Closing Date executed by each domestic Subsidiary of each Borrower and by SMP
Canada, each in favor of Agent, on behalf of itself and Lenders, as amended,
modified or supplemented from time to time.
"SunTrust Drafts" means the negotiable drafts issued by AutoZone, Inc.
in connection with the AutoZone/SunTrust Program.
"Supermajority Revolving Lenders" means Lenders having (a) 80% or more
of the Revolving Loan Commitments of all Lenders, or (b) if the Revolving Loan
Commitments have been terminated, 80% or more of the aggregate outstanding
amount of the Revolving Loan and Letter of Credit Obligations.
"Supporting Obligations" means all supporting obligations as such term
is defined in the Code, including letters of credit and guaranties issued in
support of Accounts, Chattel Paper, Documents, General Intangibles, Instruments
or Investment Property.
"Tangible Net Worth" means, with respect to any Person at any date,
the Net Worth of such Person at such date, excluding, however, from the
determination of the total assets at such date, (a) all goodwill, capitalized
organizational expenses, capitalized research and development expenses,
trademarks, trade names, copyrights, patents, patent applications, licenses and
rights in any thereof, and other intangible items, (b) all unamortized debt
discount and expense, (c) treasury Stock, and (d) any write-up in the book value
of any asset resulting from a revaluation thereof.
"Target" has the meaning ascribed to it in Section 3.6.
"Taxes" means taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income of Agent or a Lender by the jurisdictions under
the laws of which Agent and Lenders are organized or conduct business or any
political subdivision thereof.
"Termination Date" means the date on which (a) the Loans have been
indefeasibly repaid in full, (b) all other Obligations under the Agreement and
the other Loan Documents have been completely discharged (c) all Letter of
Credit Obligations have been cash collateralized, canceled or backed by standby
letters of credit in accordance with Annex B, and (d) none of Borrowers shall
have any further right to borrow any monies under the Agreement.
"Title IV Plan" means a Pension Plan (other than a Multiemployer
Plan), that is subject to Title IV of ERISA or Section 412 of the IRC, and that
any Credit Party 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" means rights under any written agreement now owned
or hereafter acquired by any Credit Party granting any right to use any
Trademark.
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"Trademark Security Agreements" means the Trademark Security
Agreements made in favor of Agent, on behalf of Lenders, by each applicable
Credit Party, as amended, modified or supplemented from time to time.
"Trademarks" means all of the following now owned or hereafter
existing or adopted or acquired by any Credit Party: (a) all trademarks, trade
names, corporate names, business names, trade styles, 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), all registrations and recordings
thereof, and all applications in connection therewith, including registrations,
recordings and applications in the United States Patent and Trademark Office or
in any similar office or agency of the United States, any state or territory
thereof, or any other country or any political subdivision thereof; (b) all
reissues, extensions or renewals thereof; and (c) all goodwill associated with
or symbolized by any of the foregoing.
"Tranche A Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a)(i)(A).
"Tranche A Revolving Lenders" means as of any date of determination,
Lenders having a Tranche A Revolving Loan Commitment.
"Tranche A Revolving Loan Commitment" means (a) as to any Tranche A
Revolving Lender, the aggregate commitment of such Tranche A Revolving Lender to
make Tranche A Revolving Credit Advances or incur Letter of Credit Obligations
as set forth on Annex J to the Agreement or in the most recent Assignment
Agreement executed by such Tranche A Revolving Lender and (b) as to all Tranche
A Revolving Lenders, the aggregate commitment of all Tranche A Revolving Lenders
to make Tranche A Revolving Credit Advances or incur Letter of Credit
Obligations, which aggregate commitment shall be Two Hundred and Twenty-Five
Million Dollars ($225,000,000) on the Closing Date, as such amount may be
adjusted, if at all, from time to time in accordance with the Agreement.
"Tranche B Revolving Credit Advance" has the meaning ascribed to it in
Section 1.1(a)(i)(B).
"Tranche B Revolving Lenders" means, as of any date of determination,
Lenders having a Tranche B Revolving Loan Commitment.
"Tranche B Revolving Loan Commitment" means (a) as to any Tranche B
Revolving Lender, the aggregate commitment of such Tranche B Revolving Lender to
make Tranche B Revolving Credit Advances as set forth on Annex J to the
Agreement or in the most recent Assignment Agreement executed by such Tranche B
Revolving Lender and (b) as to all Tranche B Revolving Lenders, the aggregate
commitment of all Tranche B Revolving Lenders to make Tranche B Revolving Credit
Advances, which aggregate commitment shall be Eighty Million Dollars
($80,000,000) on the Closing Date, as such amount may be adjusted, if at all,
from time to time in accordance with the Agreement.
"Tranche A Revolving Note" has the meaning ascribed to it in Section
1.1(a)(ii).
A-31
"Tranche B Revolving Note" has the meaning ascribed to it in Section
1.1(c)(ii).
"Unfunded Pension Liability" means, at any time, the aggregate amount,
if any, of the sum of (a) the amount by which the present value of all accrued
benefits under each Title IV Plan exceeds the fair market value of all assets of
such Title IV Plan allocable to such benefits in accordance with Title IV of
ERISA, all determined as of the most recent valuation date for each such Title
IV Plan using the actuarial assumptions for funding purposes in effect under
such Title IV Plan, and (b) for a period of 5 years following a transaction
which might reasonably be expected to be covered by Section 4069 of ERISA, the
liabilities (whether or not accrued) that could be avoided by any Credit Party
or any ERISA Affiliate as a result of such transaction.
"Uniform Commercial Code jurisdiction" means any jurisdiction that had
adopted all or substantially all of article 9 as contained in the 2000 Official
Text of the Uniform Commercial Code, as recommended by the National Conference
of Commissioners on Uniform State Laws and the American Law Institute, together
with any subsequent amendments or modification to the Official Text.
"Welfare Plan" means a Plan described in Section 3(i) of ERISA.
Rules of construction with respect to accounting terms used in the
Agreement or the other Loan Documents shall be as set forth in Annex G. All
other undefined terms contained in any of the Loan Documents shall, unless the
context indicates otherwise, have the meanings provided for by the Code as in
effect in the State of New York to the extent the same are used or defined
therein. Unless otherwise specified, references in the Agreement or any of the
Appendices to a Section, subsection or clause refer to such Section, subsection
or clause as contained in the Agreement. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to the Agreement as a whole,
including all Annexes, Exhibits and Schedules, as the same may from time to time
be amended, restated, modified or supplemented, and not to any particular
section, subsection or clause contained in the Agreement or any such Annex,
Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation"; the
word "or" is not exclusive; references to Persons include their respective
successors and assigns (to the extent and only to the extent permitted by the
Loan Documents) or, in the case of governmental Persons, Persons succeeding to
the relevant functions of such Persons; and all references to statutes and
related regulations shall include any amendments of the same and any successor
statutes and regulations. Whenever any provision in any Loan Document refers to
the knowledge (or an analogous phrase) of any Credit Party, such words are
intended to signify that such Credit Party has actual knowledge or awareness of
a particular fact or circumstance or that such Credit Party, if it had exercised
reasonable diligence, would have known or been aware of such fact or
circumstance.
A-32
ANNEX B (Section 1.2)
to
CREDIT AGREEMENT
LETTERS OF CREDIT
(a) Issuance. Subject to the terms and conditions of the Agreement,
Agent and Revolving Lenders agree to incur, from time to time prior to the
Commitment Termination Date, upon the request of Borrower Representative on
behalf of the applicable Borrower and for such Borrower's account, Letter of
Credit Obligations by causing Letters of Credit to be issued by GE Capital or a
Subsidiary thereof or a bank or other legally authorized Person selected by
Agent or by Borrower Representative and acceptable to Agent in its sole
discretion (each, an "L/C Issuer") for such Borrower's account and guaranteed by
Agent; provided, that if the L/C Issuer is a Revolving Lender, then such Letters
of Credit shall not be guaranteed by Agent but rather each Revolving Lender
shall, subject to the terms and conditions hereinafter set forth, purchase (or
be deemed to have purchased) risk participations in all such Letters of Credit
issued with the written consent of Agent, as more fully described in paragraph
(b)(ii) below. The aggregate amount of all such Letter of Credit Obligations
shall not at any time exceed the least of (i) Fifteen Million Dollars
($15,000,000) prior to the Acquisition Closing Date and Twenty-Five Million
Dollars ($25,000,000) on and after the Acquisition Closing Date (the "L/C
Sublimit") and (ii) the Maximum Amount less the aggregate outstanding principal
balance of the Revolving Credit Advances, and (iii) the Aggregate Borrowing Base
(adjusted as if no Letters of Credit are outstanding) less the aggregate
outstanding principal balance of the Revolving Credit Advances. Furthermore, the
aggregate amount of any Letter of Credit Obligations incurred on behalf of any
Borrower shall not at any time exceed such Borrower's separate Borrowing Base
less the aggregate principal balance of the Revolving Credit Advances to such
Borrower. No such Letter of Credit shall have an expiry date that is more than
one year following the date of issuance thereof, unless otherwise determined by
the Agent, in its sole discretion (including with respect to customary evergreen
provisions), and neither Agent nor Revolving Lenders shall be under any
obligation to incur Letter of Credit Obligations in respect of, or purchase risk
participations in, any Letter of Credit having an expiry date that is later than
the Commitment Termination Date.
(b) (i) Advances Automatic; Participations. In the event that Agent or
any Revolving Lender shall make any payment on or pursuant to any Letter of
Credit Obligation, such payment shall then be deemed automatically to constitute
a Revolving Credit Advance to the applicable Borrower under Section 1.1(a) of
the Agreement regardless of whether a Default or Event of Default has occurred
and is continuing and notwithstanding any Borrower's failure to satisfy the
conditions precedent set forth in Section 2, and each Revolving Lender shall be
obligated to pay its Pro Rata Share thereof in accordance with the Agreement.
The failure of any Revolving Lender to make available to Agent for Agent's own
account its Pro Rata Share of any such Revolving Credit Advance or payment by
Agent under or in respect of a Letter of Credit shall not relieve any other
Revolving Lender of its obligation hereunder to make available to Agent its Pro
Rata Share thereof, but no Revolving Lender shall be responsible for the failure
of any other Revolving Lender to make available such other Revolving Lender's
Pro Rata Share of any such payment.
B-1
(ii) If it shall be illegal or unlawful for any Borrower to incur
Revolving Credit Advances as contemplated by paragraph (b)(i) above because of
an Event of Default described in Sections 8.1(h) or (i) or otherwise or if it
shall be illegal or unlawful for any Revolving Lender to be deemed to have
assumed a ratable share of the reimbursement obligations owed to an L/C Issuer,
or if the L/C Issuer is a Revolving Lender, then (A) immediately and without
further action whatsoever, each Revolving Lender shall be deemed to have
irrevocably and unconditionally purchased from Agent (or such L/C Issuer, as the
case may be) an undivided interest and participation equal to such Revolving
Lender's Pro Rata Share (based on the Revolving Loan Commitments) of the Letter
of Credit Obligations in respect of all Letters of Credit then outstanding and
(B) thereafter, immediately upon issuance of any Letter of Credit, each
Revolving Lender shall be deemed to have irrevocably and unconditionally
purchased from Agent (or such L/C Issuer, as the case may be) an undivided
interest and participation in such Revolving Lender's Pro Rata Share (based on
the Revolving Loan Commitments) of the Letter of Credit Obligations with respect
to such Letter of Credit on the date of such issuance. Each Revolving Lender
shall fund its participation in all payments or disbursements made under the
Letters of Credit in the same manner as provided in the Agreement with respect
to Revolving Credit Advances.
(c) Cash Collateral.
(i) If Borrowers are required to provide cash collateral for any
Letter of Credit Obligations pursuant to the Agreement, including Section 8.2 of
the Agreement, prior to the Commitment Termination Date, each Borrower will pay
to Agent for the ratable benefit of itself and Revolving Lenders cash or cash
equivalents acceptable to Agent ("Cash Equivalents") in an amount equal to 105%
of the maximum amount then available to be drawn under each applicable Letter of
Credit outstanding for the benefit of such Borrower. Such funds or Cash
Equivalents shall be held by Agent in a cash collateral account (the "Cash
Collateral Account") maintained at a bank or financial institution acceptable to
Agent. The Cash Collateral Account shall be in the name of the applicable
Borrower and shall be pledged to, and subject to the control of, Agent, for the
benefit of Agent and Lenders, in a manner satisfactory to Agent. Each Borrower
hereby pledges and grants to Agent, on behalf of itself and Lenders, a security
interest in all such funds and Cash Equivalents held in the Cash Collateral
Account from time to time and all proceeds thereof, as security for the payment
of all amounts due in respect of the Letter of Credit Obligations and other
Obligations, whether or not then due. The Agreement, including this Annex B,
shall constitute a security agreement under applicable law.
(ii) If any Letter of Credit Obligations, whether or not then due and
payable, shall for any reason be outstanding on the Commitment Termination Date,
Borrowers shall either (A) provide cash collateral therefor in the manner
described above, or (B) cause all such Letters of Credit and guaranties thereof,
if any, to be canceled and returned, or (C) deliver a stand-by letter (or
letters) of credit in guaranty of such Letter of Credit Obligations, which
stand-by letter (or letters) of credit shall be of like tenor and duration (plus
thirty (30) additional days) as, and in an amount equal to 105% of, the
aggregate maximum amount then available to be drawn under, the Letters of Credit
to which such outstanding Letter of Credit Obligations relate and shall be
issued by a Person, and shall be subject to such terms and conditions, as are be
satisfactory to Agent in its sole discretion.
B-2
(iii) From time to time after funds are deposited in the Cash
Collateral Account by any Borrower, whether before or after the Commitment
Termination Date, Agent may apply such funds or Cash Equivalents then held in
the Cash Collateral Account to the payment of any amounts, and in such order as
Agent may elect, as shall be or shall become due and payable by such Borrower to
Agent and Lenders with respect to such Letter of Credit Obligations of such
Borrower and, upon the satisfaction in full of all Letter of Credit Obligations
of such Borrower, to any other Obligations of any Borrower then due and payable.
(iv) No Borrower nor any Person claiming on behalf of or through any
Borrower shall have any right to withdraw any of the funds or Cash Equivalents
held in the Cash Collateral Account, except that upon the termination of all
Letter of Credit Obligations and the payment of all amounts payable by Borrowers
to Agent and Lenders in respect thereof, any funds remaining in the Cash
Collateral Account shall be applied to other Obligations then due and owing and
upon payment in full of such Obligations, any remaining amount shall be paid to
Borrowers or as otherwise required by law. Interest earned on deposits in the
Cash Collateral Account shall be for the account of Agent.
(d) Fees and Expenses. Borrowers agree to pay to Agent for the benefit
of Revolving Lenders, as compensation to such Lenders for Letter of Credit
Obligations incurred hereunder, (i) all costs and expenses incurred by Agent or
any Lender on account of such Letter of Credit Obligations, and (ii) for each
month during which any Letter of Credit Obligation shall remain outstanding, a
fee (the "Letter of Credit Fee") in an amount equal to one and one-half percent
(1.50%) per annum multiplied by the maximum amount available from time to time
to be drawn under the applicable Letter of Credit. Such fee shall be paid to
Agent for the benefit of the Revolving Lenders in arrears, on the first day of
each month and on the Commitment Termination Date. In addition, Borrowers shall
pay to any L/C Issuer, on demand, such fees (including all per annum fees),
charges and expenses of such L/C Issuer in respect of the issuance, negotiation,
acceptance, amendment, transfer and payment of such Letter of Credit or
otherwise payable pursuant to the application and related documentation under
which such Letter of Credit is issued.
(e) Request for Incurrence of Letter of Credit Obligations. Borrower
Representative shall give Agent at least two (2) Business Days' prior written
notice requesting the incurrence of any Letter of Credit Obligation. The notice
shall be accompanied by the form of the Letter of Credit (which shall be
acceptable to the L/C Issuer) and a completed Application for Standby Letter of
Credit or Application and Agreement for Documentary Letter of Credit or
Application for Documentary Letter of Credit, as applicable, in the form of
Exhibit B-1, or B-2 or B-3 attached hereto. Notwithstanding anything contained
herein to the contrary, Letter of Credit applications by Borrower Representative
and approvals by Agent and the L/C Issuer may be made and transmitted pursuant
to electronic codes and security measures mutually agreed upon and established
by and among Borrower Representative, Agent and the L/C Issuer.
(f) Obligation Absolute. The obligation of Borrowers to reimburse
Agent and Revolving Lenders for payments made with respect to any Letter of
Credit Obligation shall be absolute, unconditional and irrevocable, without
necessity of presentment, demand, protest or other formalities, and the
obligations of each Revolving Lender to make payments to Agent with respect to
Letters of Credit shall be unconditional and irrevocable. Such obligations of
B-3
Borrowers and Revolving Lenders shall be paid strictly in accordance with the
terms hereof under all circumstances including the following:
(i) any lack of validity or enforceability of any Letter of Credit or
the Agreement or the other Loan Documents or any other agreement;
(ii) the existence of any claim, setoff, defense or other right that
any Borrower or any of their respective Affiliates or any Lender may at any time
have against a beneficiary or any transferee of any Letter of Credit (or any
Persons or entities for whom any such transferee may be acting), Agent, any
Lender, or any other Person, whether in connection with the Agreement, the
Letter of Credit, the transactions contemplated herein or therein or any
unrelated transaction (including any underlying transaction between any Borrower
or any of their respective Affiliates and the beneficiary for which the Letter
of Credit was procured);
(iii) any draft, demand, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect;
(iv) payment by Agent (except as otherwise expressly provided in
paragraph (g)(ii)(C) below) or any L/C Issuer under any Letter of Credit or
guaranty thereof against presentation of a demand, draft or certificate or other
document that does not comply with the terms of such Letter of Credit or such
guaranty;
(v) any other circumstance or event whatsoever, that is similar to any
of the foregoing; or
(vi) the fact that a Default or an Event of Default has occurred and
is continuing.
(g) Indemnification; Nature of Lenders' Duties.
(i) In addition to amounts payable as elsewhere provided in the
Agreement, Borrowers hereby agree to pay and to protect, indemnify, and save
harmless Agent and each Lender from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees and allocated costs of internal counsel) that Agent or any
Lender may incur or be subject to as a consequence, direct or indirect, of (A)
the issuance of any Letter of Credit or guaranty thereof, or (B) the failure of
Agent or any Lender seeking indemnification or of any L/C Issuer to honor a
demand for payment under any Letter of Credit or guaranty thereof as a result of
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or Governmental Authority, in each case other than
to the extent solely as a result of the gross negligence or willful misconduct
of Agent or such Lender (as finally determined by a court of competent
jurisdiction).
(ii) As between Agent and any Lender and Borrowers, Borrowers assume
all risks of the acts and omissions of, or misuse of any Letter of Credit by
beneficiaries, of any Letter of Credit. In furtherance and not in limitation of
the foregoing, to the fullest extent permitted by law, neither Agent nor any
Lender shall be responsible for: (A) the form, validity, sufficiency, accuracy,
genuineness or legal effect of any document issued by any party in
B-4
connection with the application for and issuance of any Letter of Credit, even
if it should in fact prove to be in any or all respects invalid, insufficient,
inaccurate, fraudulent or forged; (B) the validity or sufficiency of any
instrument transferring or assigning or purporting to transfer or assign any
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, that may prove to be invalid or ineffective for any reason;
(C) failure of the beneficiary of any Letter of Credit to comply fully with
conditions required in order to demand payment under such Letter of Credit;
provided, that in the case of any payment by Agent under any Letter of Credit or
guaranty thereof, Agent shall be liable to the extent such payment was made
solely as a result of its gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction) in determining that the demand
for payment under such Letter of Credit or guaranty thereof complies on its face
with any applicable requirements for a demand for payment under such Letter of
Credit or guaranty thereof; (D) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex or
otherwise, whether or not they may be in cipher; (E) errors in interpretation of
technical terms; (F) any loss or delay in the transmission or otherwise of any
document required in order to make a payment under any Letter of Credit or
guaranty thereof or of the proceeds thereof; (G) the credit of the proceeds of
any drawing under any Letter of Credit or guaranty thereof; and (H) any
consequences arising from causes beyond the control of Agent or any Lender. None
of the above shall affect, impair, or prevent the vesting of any of Agent's or
any Lender's rights or powers hereunder or under the Agreement.
(iii) Nothing contained herein shall be deemed to limit or to expand
any waivers, covenants or indemnities made by Borrowers in favor of any L/C
Issuer in any letter of credit application, reimbursement agreement or similar
document, instrument or agreement between or among Borrowers and such L/C
Issuer, including an Application and Agreement For Documentary Letter of Credit,
a Master Documentary Agreement and a Master Standby Agreement entered into with
Agent.
B-5
ANNEX C (Section 1.8)
to
CREDIT AGREEMENT
CASH MANAGEMENT SYSTEM
Each Borrower shall, and shall cause its Subsidiaries to, establish
and maintain the Cash Management Systems described below:
(a) On or before the Closing Date and until the Termination Date, each
Borrower shall (i) establish lock boxes ("Lock Boxes") or at Agent's discretion,
blocked accounts ("Blocked Accounts") at one or more of the banks set forth in
Disclosure Schedule (3.19), and shall request in writing and otherwise take such
reasonable steps to ensure that all Account Debtors forward payment directly to
such Lock Boxes, and (ii) deposit and cause its Subsidiaries to deposit or cause
to be deposited promptly, and in any event no later than the first Business Day
after the date of receipt thereof, all cash, checks, drafts or other similar
items of payment relating to or constituting payments made in respect of any and
all Collateral (whether or not otherwise delivered to a Lock Box) into one or
more Blocked Accounts in such Borrower's name or any such Subsidiary's name and
at a bank identified in Disclosure Schedule (3.19) (each, a "Relationship
Bank"). On or before the Closing Date, Borrower Representative shall have
established a concentration account in its name (a "Concentration Account") at
the bank that shall be designated as the Concentration Account bank in
Disclosure Schedule (3.19) (a "Concentration Account Bank"), which bank shall be
reasonably satisfactory to Agent.
(b) Each Borrower may maintain, in its name, one or more accounts
(each a "Disbursement Account" and collectively, the "Disbursement Accounts") at
a bank reasonably acceptable to Agent into which Agent shall, from time to time,
deposit proceeds of Revolving Credit Advances made to such Borrower pursuant to
Section 1.1 for use by such Borrower solely in accordance with the provisions of
Section 1.4.
(c) On or before the Closing Date (or such later date as Agent shall
consent to in writing), Concentration Account Bank, each bank where a
Disbursement Account is maintained and all other Relationship Banks, shall have
entered into tri-party blocked account agreements with Agent, for the benefit of
itself and Lenders, and the applicable Borrower and Subsidiaries thereof, as
applicable, in form and substance reasonably acceptable to Agent, which shall
become operative on or prior to the Closing Date. Each such blocked account
agreement shall provide, among other things, that (i) all items of payment
deposited in such account and proceeds thereof deposited in the Concentration
Account are held by such bank as agent or bailee-in-possession for Agent, on
behalf of itself and Lenders, (ii) the bank executing such agreement has no
rights of setoff or recoupment or any other claim against such account, as the
case may be, other than for payment of its service fees and other charges
directly related to the administration of such account and for returned checks
or other items of payment, and (iii) from and after the Closing Date (A) with
respect to banks at which a Blocked Account is maintained, such bank agrees to
forward immediately all amounts in each Blocked Account to the Concentration
Account Bank and to commence the process of daily sweeps from such Blocked
C-1
Account into the Concentration Account and (B) with respect to Concentration
Account Bank, such bank agrees to immediately forward all amounts received in
the Concentration Account to the Collection Account through daily sweeps from
such Concentration Account into the Collection Account. No Borrower shall, or
shall cause or permit any Subsidiary thereof to, accumulate or maintain cash in
Disbursement Accounts or payroll accounts as of any date of determination in
excess of checks outstanding against such accounts as of that date and amounts
necessary to meet minimum balance requirements.
(d) So long as no Default or Event of Default has occurred and is
continuing, Borrowers may amend Disclosure Schedule (3.19) to add or replace a
Relationship Bank, Lock Box or Blocked Account or to replace the Concentration
Account or any Disbursement Account; provided, that (i) Agent shall have
consented in writing in advance to the opening of such account or Lock Box with
the relevant bank and (ii) prior to the time of the opening of such account or
Lock Box, the applicable Borrower or its Subsidiaries, as applicable, and such
bank shall have executed and delivered to Agent a tri-party blocked account
agreement, in form and substance reasonably satisfactory to Agent; provided,
further, that Borrowers shall (x) amend Disclosure Schedule (3.19) to reflect
any bank account which is transferred to SMP in connection with the Acquisition,
and (y) obtain the necessary tri-party blocked account agreement(s) required
pursuant to clause (ii) above with respect to each such account. Borrowers shall
close any of their accounts (and establish replacement accounts in accordance
with the foregoing sentence) promptly and in any event within thirty (30) days
following notice from Agent that the creditworthiness of any bank holding an
account is no longer acceptable in Agent's reasonable judgment, or as promptly
as practicable and in any event within sixty (60) days following notice from
Agent that the operating performance, funds transfer or availability procedures
or performance with respect to accounts or Lock Boxes of the bank holding such
accounts or Agent's liability under any tri-party blocked account agreement with
such bank is no longer acceptable in Agent's reasonable judgment.
(e) The Lock Boxes, Blocked Accounts, Disbursement Accounts and the
Concentration Account shall be cash collateral accounts, with all cash, checks
and other similar items of payment in such accounts securing payment of the
Loans and all other Obligations, and in which each Borrower and each Subsidiary
thereof shall have granted a Lien to Agent, on behalf of itself and Lenders,
pursuant to the Security Agreement.
(f) All amounts deposited in the Collection Account shall be deemed
received by Agent in accordance with Section 1.10 and shall be applied (and
allocated) by Agent in accordance with Section 1.11. In no event shall any
amount be so applied unless and until such amount shall have been credited in
immediately available funds to the Collection Account.
(g) Each Borrower shall and shall cause its Affiliates, officers,
employees, agents, directors or other Persons acting for or in concert with such
Borrower (each a "Related Person") to (i) hold in trust for Agent, for the
benefit of itself and Lenders, all checks, cash and other items of payment
received by such Borrower or any such Related Person, and (ii) within one (1)
Business Day after receipt by such Borrower or any such Related Person of any
checks, cash or other items of payment, deposit the same into a Blocked Account
of such Borrower. Each Borrower on behalf of itself and each Related Person
thereof acknowledges and agrees that all cash, checks or other items of payment
constituting proceeds of Collateral are part of the
C-2
Collateral. All proceeds of the sale or other disposition of any Collateral,
shall be deposited directly into the applicable Blocked Accounts.
C-3
ANNEX D-1 (Section 2.1(a))
to
CREDIT AGREEMENT
CLOSING CHECKLIST
In addition to, and not in limitation of, the conditions described in
Section 2.1 of the Agreement, pursuant to Section 2.1(a), the following items
must be received by Agent in form and substance satisfactory to Agent on or
prior to the Closing Date (each capitalized term used but not otherwise defined
herein shall have the meaning ascribed thereto in Annex A to the Agreement):
A. Appendices. All Appendices to the Agreement, in form and substance
satisfactory to Agent.
B. Notes. Duly executed originals of the Notes for each applicable
Lender, dated the Closing Date.
C. Security Agreement / Intellectual Property Security Agreements.
Duly executed originals of the amended and restated forms of the Security
Agreement, Trademark Security Agreement, Copyright Security Agreement and Patent
Security Agreement, dated the Closing Date.
D. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as requested by Agent, in favor of Agent, on behalf of Lenders.
E. Security Interests and Code Filings.
(a) Evidence satisfactory to Agent that Agent (for the benefit of
itself and Lenders) has a valid and perfected first priority security interest
in the Collateral other than Equipment subject to Capital Leases and set forth
on Disclosure Schedule D, including (i) such documents duly executed by each
Credit Party (including financing statements under the Code and other applicable
documents under the laws of any jurisdiction with respect to the perfection of
Liens) as Agent may request in order to perfect its security interests in the
Collateral and (ii) copies of Code search reports listing all effective
financing statements that name any Credit Party as debtor, together with copies
of such financing statements, none of which shall cover the Collateral.
(b) Evidence satisfactory to Agent, including copies, of all UCC-1 and
other financing statements filed in favor of any Credit Party with respect to
each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated securities
and financial assets held by each Borrower, (ii) all securities intermediaries
with respect to all securities
D-1
accounts and securities entitlements of each Borrower, and (iii) all futures
commission agents and clearing houses with respect to all commodities contracts
and commodities accounts held by any Borrower.
F. Subsidiary Guaranties. Amended and restated Guaranties executed by
each direct and indirect domestic Subsidiary of any Borrower that is not a
Borrower and a Guaranty by SMP Canada, each in favor of Agent, for the benefit
of itself and Lenders.
G. Borrowing Base Certificate. Duly executed originals of Borrowing
Base Certificate from each Borrower, dated the Closing Date, reflecting
information concerning Eligible Accounts, Eligible Inventory, Eligible Equipment
and Eligible Real Estate of such Borrower as of a date not more than 7 days
prior to the Closing Date.
H. Notice of Revolving Credit Advance. Duly executed originals of a
Notice of Tranche A Revolving Credit Advance, dated the Closing Date, with
respect to the Tranche A Revolving Credit Advance to be requested by Borrower
Representative on the Closing Date.
I. Letter of Direction. Duly executed originals of a letter of
direction from Borrower Representative addressed to Agent, on behalf of itself
and Lenders, with respect to the disbursement on the Closing Date of the
proceeds of the Revolving Credit Advance to be made on the Closing Date.
J. Charter and Good Standing. For each Credit Party, such Person's (a)
charter and all amendments thereto, (b) good standing certificates (including
verification of tax status) in its state of incorporation and (c) good standing
certificates (including verification of tax status) and certificates of
qualification to conduct business in each jurisdiction where its ownership or
lease of property or the conduct of its business requires such qualification,
each dated a recent date prior to the Closing Date and certified by the
applicable Secretary of State or other authorized Governmental Authority.
K. Bylaws and Resolutions. For each Credit Party, (a) such Person's
bylaws, together with all amendments thereto and (b) resolutions of such
Person's Board of Directors and stockholders, approving and authorizing the
execution, delivery and performance of the Loan Documents to which such Person
is a party and the transactions to be consummated in connection therewith, each
certified as of the Closing Date by such Person's corporate secretary or an
assistant secretary as being in full force and effect without any modification
or amendment.
L. Incumbency Certificates. For each Credit Party, signature and
incumbency certificates of the officers of each such Person executing any of the
Loan Documents, certified as of the Closing Date by such Person's corporate
secretary or an assistant secretary as being true, accurate, correct and
complete.
M. Opinions of Counsel. Duly executed originals of opinions of Xxxxxx
Xxxx & Xxxxxx, LLP, counsel for the Credit Parties, together with any local
and/or foreign counsel opinions reasonably requested by Agent, each in form and
substance reasonably satisfactory to Agent and its counsel, dated the Closing
Date.
D-2
N. Pledge Agreements. Duly executed originals of the amended and
restated Pledge Agreements.
O. Accountants' Letters. A letter from the Credit Parties to their
independent auditors authorizing the independent certified public accountants of
the Credit Parties to communicate with Agent and Lenders in accordance with
Section 4.2.
P. Acquisition Agreement. Duly executed originals of the Acquisition
Agreement.
Q. Officer's Certificate. Agent shall have received duly executed
originals of a certificate of the chief executive officer and chief financial
officer or treasurer of each Borrower, dated the Closing Date, stating that,
since December 31, 2001 (a) no event or condition has occurred or is existing
which could reasonably be expected to have a Material Adverse Effect; (b) there
has been no material adverse change in the industry in which any Borrower
operates; (c) no Litigation has been commenced which, if successful, would have
a Material Adverse Effect or could challenge any of the transactions
contemplated by the Agreement and the other Loan Documents; (d) except as
disclosed in the Schedule to such Officer's Certificate, there have been no
Restricted Payments made by any Credit Party; (e) before and after giving effect
to the transactions contemplated by the Agreement, each Credit Party will be
Solvent, and (f) there has been no material increase in liabilities, liquidated
or contingent, and no material decrease in assets of any Borrower or any of its
Subsidiaries.
R. Waivers. Agent, on behalf of Lenders, shall have received landlord
waivers and consents and mortgagee agreements in form and substance reasonably
satisfactory to Agent, in each case as required pursuant to Section 5.9.
S. Mortgages. Mortgage Modifications covering all of the Real Estate
(the "Mortgaged Properties") together with: (a) evidence that counterparts of
the Mortgage Modifications have been recorded in all places to the extent
necessary or desirable, in the judgment of Agent, to create a valid and
enforceable first priority lien (subject to Permitted Encumbrances) on each
Mortgaged Property in favor of Agent for the benefit of itself and Lenders (or
in favor of such other trustee as may be required or desired under local law);
and (b) an opinion of counsel in each state in which any Mortgaged Property is
located in form and substance and from counsel reasonably satisfactory to Agent.
T. Subordination and Intercreditor Agreements. Agent and Lenders shall
have received any and all subordination and/or intercreditor agreements, all in
form and substance reasonably satisfactory to Agent, in its sole discretion, as
Agent shall have deemed necessary or appropriate with respect to any
Indebtedness of any Credit Party.
U. Financials. Agent shall have received Acquisition Target's
unaudited consolidated and consolidating financial statement for November, 2002,
together with a reconciliation of such financial statements to the operating
assets of the Acquisition Target which are the subject of the Acquisition.
V. Audited Financials; Financial Condition. Agent shall have received
the Financial Statements, Projections and other materials set forth in Section
3.4, certified by
D-3
Borrower Representative's chief financial officer or treasurer, in each case in
form and substance reasonably satisfactory to Agent, and Agent shall be
satisfied, in its sole discretion, with all of the foregoing. Agent shall have
further received a certificate of the chief executive officer and the chief
financial officer or treasurer of each Borrower, based on such Pro Forma and
Projections, to the effect that (a) such Borrower will be Solvent upon the
consummation of the transactions contemplated herein; (b) the Pro Forma fairly
presents the financial condition of Borrowers and their Consolidated
Subsidiaries as of the date thereof after giving effect to the transactions
contemplated by the Loan Documents; (c) the Projections are based upon estimates
and assumptions stated therein, all of which such Borrower believes to be
reasonable and fair in light of current conditions and current facts known to
such Borrower and, as of the Closing Date, reflect such Borrower's good faith
and reasonable estimates of its future financial performance and of the other
information projected therein for the period set forth therein; (d) containing
such other statements with respect to the solvency of such Borrower and matters
related thereto as Agent shall request.
W. Master Standby Agreement. A Master Agreement for Standby Letters of
Credit among Borrowers and GE Capital.
X. Master Documentary Agreement. A Master Agreement for Documentary
Letters of Credit among Borrowers and GE Capital.
Y. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Agent may reasonably request.
X-0
XXXXX X-0 (Section 2.3)
to
CREDIT AGREEMENT
ACQUISITION CONDITIONS
In addition to, and not in limitation of, the conditions described in Section
2.2 of the Agreement, pursuant to Section 2.3, the following items must be
received by Agent in form and substance satisfactory to Agent on or prior to the
Acquisition Closing Date (each capitalized term used but not otherwise defined
herein shall have the meaning ascribed thereto in Annex A to the Agreement):
A. Acquisition. The Acquisition shall have occurred on or before June
30, 2003 and shall have been consummated on the terms and conditions set forth
in the Acquisition Agreement delivered to Agent and Lenders on the Closing Date,
without waiver by SMP of any closing conditions unless such waiver has been
approved by Agent.
B. Defaults. No Default or Event of Default shall have occurred which
is continuing, or would occur after giving effect to the Acquisition.
C. Acquisition Documents. Agent shall have received copies of the
documents and consents required pursuant to the Acquisition Agreement in order
to meet the closing conditions as set forth in the Acquisition Agreements as of
the Closing Date.
D. Purchase Price. The Purchase Price for Xxxx Corporation's
Aftermarket Engine Management Division (the "Acquisition Target") shall not
exceed the Closing Net Book Value (as such term is defined in the Acquisition
Agreement as in effect on the date hereof). The Estimated Purchase Price (as
such term is defined in the Acquisition Agreement as in effect on the date
hereof) for the Acquisition Target to be paid on the Acquisition Closing Date
shall not exceed $125,000,000 (the "Purchase Price") and aggregate fees and
closing costs (including those payable to Lenders on the Closing Date) not to
exceed $11,000,000 plus underwriting fees and expenses incurred in meeting (or
exceeding) the Additional Capitalization Requirement. In addition, the Cash
Purchase Price to be paid on the Acquisition Closing Date shall not exceed
$94,000,000.
E. Additional Capitalization Requirement. Receipt by SMP of the
Additional Capitalization Requirement.
F. Seller Paper. Based on the contemplated Purchase Price, receipt by
Seller of no more than $31,300,000 (subject to the last sentence of this
paragraph F) from unsecured subordinated seller paper and/or equity in SMP
concurrent with the closing of the Acquisition on terms acceptable to Agent
including, without limitation, (i) no principal payments until at least 66
months following the closing of the Acquisition (subject to earlier prepayment
as permitted in Section 6.14(f) of this Agreement), and (ii) standstill
provisions. The final amount of seller paper and/or equity in SMP shall be
determined based on the final Purchase Price and shall be reduced by $1 for each
$4 reduction in the Purchase Price below $125,000,000.
D-5
G. Financial Statements of Target. Delivery of (i) audited Financial
Statements of Target for calendar years 2000, 2001 and the nine month period
ending October 1, 2002 together with any additional fiscal period for which
Financial Statements of Target must be provided to any Governmental Authority in
connection with obtaining the approval to the Acquisition by such Governmental
Authority and (ii) a reconciliation from the audited Financial Statements of
Target by Borrower to the projections previously provided to GE Capital, all of
which to be in form and substance satisfactory to GE Capital.
H. Indenture. No less than $90,000,000 of subordinated debt shall be
outstanding under the terms of the Indenture dated as of July 26, 1999 with HSBC
Bank USA as Trustee (the "Indenture") and the terms of such Indenture shall be
acceptable to Agent. All loans and liens made pursuant to the Financing
documents must be permitted under, and deemed senior indebtedness and senior
liens, as appropriate under, such Indenture. So long as no changes have been
made to this Indenture since April 27, 2001, the subordination terms of the
Indenture are acceptable to GE Capital.
I. Structure. The corporate structure, capital structure, other debt
instruments, material contracts, and governing documents of each Borrower and
their affiliates after giving effect to the Acquisition must be acceptable to
Agent. Additionally, tax effects resulting from the Acquisition must be
acceptable to Agent and Borrowers.
J. Minimum Excess Formula Availability. The Excess Formula
Availability for Borrowers in the aggregate at closing of the Acquisition (on a
pro forma basis with trade payables being paid consistent with past practices,
with expenses and liabilities being paid in the ordinary course of business,
without acceleration of sales and without deterioration of working capital)
shall be at least (x) $52,000,000 if such closing occurs on or before April 30,
2003, or (y) $47,000,000 if such closing occurs during May or June, 2003. For
purposes of calculating Excess Formula Availability, only the portion of the
Additional Capitalization Requirement which exceeds $59,000,000 shall be deemed
to have been applied to reduce the outstanding balance of Revolving Advances
pursuant to Section 1.3(b)(iii).
K. Payables. All payables including intercompany and amounts owing to
affiliates must continue to be paid on a basis consistent with past practice.
L. Insurance. Satisfactory evidence that the insurance policies
required by Section 5.4 are in full force and effect, together with appropriate
evidence showing loss payable and/or additional insured clauses or endorsements,
as reasonably requested by Agent, in favor of Agent, on behalf of Lenders.
M. Security Interests and Code Filings.
(a) Evidence satisfactory to Agent that Agent (for the benefit of
itself and Lenders) has a valid and perfected first priority security interest
in the Collateral (including, without limitation, the Collateral which is
acquired pursuant to the Acquisition), including (i) such documents duly
executed by each Credit Party (including financing statements under the Code and
other applicable documents under the laws of any jurisdiction with respect to
the perfection of Liens) as Agent may request in order to perfect its security
interests in the
D-6
Collateral and (ii) copies of Code search reports listing all effective
financing statements that name any Credit Party or Seller as debtor, together
with copies of such financing statements, none of which shall cover the
Collateral, except for Permitted Encumbrances.
(b) Evidence reasonably satisfactory to Agent, including copies,
of all UCC-1 and other financing statements filed in favor of any Credit Party
with respect to each location, if any, at which Inventory may be consigned.
(c) Control Letters from (i) all issuers of uncertificated
securities and financial assets held by each Borrower, (ii) all securities
intermediaries with respect to all securities accounts and securities
entitlements of each Borrower, and (iii) all futures commission agents and
clearing houses with respect to all commodities contracts and commodities
accounts held by any Borrower.
N. Intellectual Property Security Agreements. Duly executed originals
of Trademark Security Agreements, Copyright Security Agreements and Patent
Security Agreements, each dated the Acquisition Closing Date and signed by each
Credit Party which acquires such Trademarks, Copyrights and/or Patents, as
applicable, pursuant to the Acquisition, all in form and substance reasonably
satisfactory to Agent, together with all instruments, documents and agreements
executed pursuant thereto.
O. Borrowing Base Certificate. Duly executed originals of Borrowing
Base Certificate from each Borrower, dated the Acquisition Closing Date,
reflecting information concerning Eligible Accounts and Eligible Inventory of
such Borrower as of a date not more than seven (7) days prior to the Acquisition
Closing Date and giving effect to the Acquisition.
P. Notice of Revolving Credit Advance. Duly executed originals of a
Notice of Revolving Credit Advance, dated the Acquisition Closing Date, with
respect to the Revolving Credit Advance to be requested by Borrower
Representative on the Acquisition Closing Date.
Q. Letter of Direction. Duly executed originals of a letter of
direction from Borrower Representative addressed to Agent, on behalf of itself
and Lenders, with respect to the disbursement on the Acquisition Closing Date of
the proceeds of the initial Revolving Credit Advance.
R. Opinions of Counsel. Duly executed originals of opinions of Xxxxxx
Xxxx LLP, counsel for the Credit Parties, together with any local counsel
opinions reasonably requested by Agent, each in form and substance reasonably
satisfactory to Agent and its counsel, and which relate to the Acquisition dated
the Acquisition Closing Date, and each accompanied by a letter addressed to such
counsel from the Credit Parties, authorizing and directing such counsel to
address its opinion to Agent, on behalf of Lenders, and to include in such
opinion an express statement to the effect that Agent and Lenders are authorized
to rely on such opinion.
S. Waivers. Agent, on behalf of Lenders, shall have received landlord
waivers and consents, bailee letters and mortgagee agreements in form and
substance reasonably satisfactory to Agent, in each case as required pursuant to
Section 5.9. after giving effect to the Acquisition.
D-7
T. Real Estate. (a) With respect to any real estate collateral, title
commitments and title insurance policies in each case, as applicable, in amount,
form and from an issuer satisfactory to Agent, such items to be received not
later than two weeks prior to the closing of the Acquisition with an endorsement
acceptable to Agent to existing title insurance policies held by Agent being
received upon such closing, together with title insurance policies acceptable to
Agent with respect to any real estate to be acquired in connection with the
Acquisition.
(b) (i) Mortgages or deeds of trust on the real estate to be
acquired in connection with the Acquisition, and (ii) an opinion of counsel in
each state in which any such real estate is located in form and substance and
from counsel reasonably satisfactory to Agent.
U. Blocked Accounts. Borrowers shall be in compliance with the
requirements of Annex C with respect to any bank accounts obtained in connection
with the Acquisition.
V. Subordination and Intercreditor Agreements. Agent and Lenders shall
have received any and all subordination and/or intercreditor agreements, all in
form and substance reasonably satisfactory to Agent, in its sole discretion, as
Agent shall have deemed necessary or appropriate with respect to any
Indebtedness of any Credit Party including, without limitation, from Xxxx
Corporation in connection with the Acquisition.
W. Environmental Reports. Not later than two weeks prior to the
Acquisition Closing Date, Agent shall have received Phase I Environmental Site
Assessment Reports, consistent with American Society for Testing and Materials
(ASTM) Standard E 1527-00 (or the current ASTM standard for Phase I
environmental site assessment reports), and applicable state requirements, on
all of the Real Estate to be acquired in conjunction with the Acquisition, dated
no more than 6 months prior to the Closing Date, prepared by environmental
engineers reasonably satisfactory to Agent, all in form and substance reasonably
satisfactory to Agent, in its sole discretion; and Agent shall have further
received such environmental review and audit reports, including Phase II
reports, with respect to the Real Estate of any Credit Party to be acquired in
conjunction with the Acquisition as Agent shall have requested, and Agent shall
be satisfied, in its sole discretion, with the contents of all such
environmental reports. Agent shall have received letters executed by the
environmental firms preparing such environmental reports, in form and substance
reasonably satisfactory to Agent, authorizing Agent and Lenders to rely on such
reports.
X. Financials. Agent shall have received Acquisition Target's
unaudited consolidated and consolidating financial statements for each month no
later than 45 days from the end of each month or 60 days from the end of each
quarter commencing with December, 2002, together with a reconciliation of such
financial statements to the operating assets of the Acquisition Target which are
the subject of the Acquisition.
Y. Assignment of Representations, Warranties, Covenants, Indemnities
and Rights. Agent shall have received a duly executed copy of an Assignment of
Representations, Warranties, Covenants, Indemnities and Rights in respect of
SMP's rights under the Acquisition
D-8
Agreement, which assignment shall be expressly permitted under the Acquisition
Agreement or shall have been consented to by the Seller in writing.
Z. Material Adverse Change. Since October 1, 2002, there will have
been no material adverse change in the business, financial or other condition of
the Acquisition Target's operations relating to the operating assets which are
the subject of the Acquisition, the industry in which the Acquisition Target
operates, or the Collateral which will be subject to the security interest
granted to Agent, or in the prospects or projections of Borrowers taken as a
whole after giving effect to the closing of the Acquisition.
AA. Other Documents. Such other certificates, documents and agreements
respecting any Credit Party as Agent may reasonably request.
BB. Appraisals. (a) Agent shall have received appraisals as to each
parcel of Real Estate owned by each Credit Party of the Mortgaged Properties
located in Fort Worth, Texas, Edwardsville, Kansas and Disputanta, Virginia,
each of which shall be in form and substance reasonably satisfactory to Agent.
(b) Agent shall have received such appraisals or field
examination reports as it may reasonably request with respect to all other
assets owned by Borrowers or which are to be acquired in connection with the
Acquisition.
D-9
ANNEX E (Section 4.1(a))
to
CREDIT AGREEMENT
FINANCIAL STATEMENTS AND PROJECTIONS--REPORTING
Borrowers shall deliver or cause to be delivered to Agent or to Agent
and Lenders, as indicated, the following:
(a) Monthly Financials. To Agent and Lenders, within thirty (30) days
after the end of each Fiscal Month (other than January), financial information
regarding Borrowers and their Subsidiaries, certified by the chief financial
officer or treasurer of Borrower Representative, consisting of consolidated and
consolidating (i) unaudited balance sheets as of the close of such Fiscal Month
and the related statements of income and cash flows for that portion of the
Fiscal Year ending as of the close of such Fiscal Month; (ii) unaudited
statements of income and cash flows for such Fiscal Month, setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Projections for such Fiscal Year, all prepared
(other than the Projections) in accordance with GAAP (subject to normal year-end
adjustments); and (iii) a summary of the outstanding balance of all Intercompany
Notes as of the last day of that Fiscal Month. Such financial information shall
be accompanied by the certification of the chief financial officer or treasurer
of Borrower Representative that (i) such financial information presents fairly
in accordance with GAAP (subject to normal year-end adjustments) the financial
position and results of operations of Borrowers and their Subsidiaries, on a
consolidated and consolidating basis, in each case as at the end of such Fiscal
Month and for that portion of the Fiscal Year then ended and (ii) any other
information presented is true, correct and complete in all material respects and
that there was no Default or Event of Default in existence as of such time or,
if a Default or Event of Default has occurred and is continuing, describing the
nature thereof and all efforts undertaken to cure such Default or Event of
Default.
(b) Quarterly Financials. To Agent and Lenders, within forty-five (45)
days after the end of each Fiscal Quarter, consolidated and consolidating
financial information regarding Borrowers and their Subsidiaries, certified by
the chief financial officer or treasurer of Borrower Representative, including
(i) unaudited balance sheets as of the close of such Fiscal Quarter and the
related statements of income and cash flow for that portion of the Fiscal Year
ending as of the close of such Fiscal Quarter and (ii) unaudited statements of
income and cash flows for such Fiscal Quarter, in each case setting forth in
comparative form the figures for the corresponding period in the prior year and
the figures contained in the Projections for such Fiscal Year, all prepared
(other than the Projections) in accordance with GAAP (subject to normal year-end
adjustments). Such financial information shall be accompanied by (A) a statement
in reasonable detail (each, a "Compliance Certificate" showing the calculations
used in determining compliance with each of the Financial Covenants that is
tested on a quarterly basis and (B) the certification of the chief financial
officer or treasurer of Borrower Representative that (i) such financial
information presents fairly in accordance with GAAP (subject to normal year-end
adjustments) the financial position, results of operations and statements of
cash flows of
E-1
Borrowers and their Subsidiaries, on both a consolidated and consolidating
basis, as at the end of such Fiscal Quarter and for that portion of the Fiscal
Year then ended and (ii) any other information presented is true, correct and
complete in all material respects and that there was no Default or Event of
Default in existence as of such time or, if a Default or Event of Default has
occurred and is continuing, describing the nature thereof and all efforts
undertaken to cure such Default or Event of Default. In addition, Borrowers
shall deliver to Agent and Lenders, within forty-five (45) days after the end of
each Fiscal Quarter, a management discussion and to the extent not otherwise set
forth on SMP's Form 10Q, analysis that includes a comparison to budget for that
Fiscal Quarter and a comparison of performance for that Fiscal Quarter to the
corresponding period in the prior year.
(c) Operating Plan. To Agent and Lenders, as soon as available, but
not later than thirty (30) days after the end of each Fiscal Year, an annual
operating plan for Borrowers, on a consolidated and consolidating basis,
approved by the Board of Directors of Borrowers, for the following Fiscal Year,
which (i) includes a statement of all of the material assumptions on which such
plan is based, (ii) includes monthly balance sheets, income statements and
statements of cash flows for the following year and (iii) integrates sales,
gross profits, operating expenses, operating profit, cash flow projections and
Borrowing Availability projections, all prepared on the same basis and in
similar detail as that on which operating results are reported (and in the case
of cash flow projections, representing management's good faith estimates of
future financial performance based on historical performance), and including
plans for personnel, Capital Expenditures and facilities.
(d) Annual Audited Financials. To Agent and Lenders, within ninety
(90) days after the end of each Fiscal Year, audited Financial Statements for
Borrowers and their Subsidiaries on a consolidated and (unaudited) consolidating
basis, consisting of balance sheets and statements of income and retained
earnings and cash flows, setting forth in comparative form in each case the
figures for the previous Fiscal Year, which Financial Statements shall be
prepared in accordance with GAAP and certified without qualification, by an
independent certified public accounting firm of national standing or otherwise
acceptable to Agent. Such Financial Statements shall be accompanied by (i) a
statement prepared in reasonable detail showing the calculations used in
determining compliance with each of the Financial Covenants, (ii) a report from
such accounting firm to the effect that, in connection with their audit
examination, nothing has come to their attention to cause them to believe that a
Default or Event of Default has occurred (or specifying those Defaults and
Events of Default that they became aware of), it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) the annual letters to such accountants in connection with their
audit examination detailing contingent liabilities and material litigation
matters, and (iv) the certification of the chief executive officer or chief
financial officer or treasurer of Borrowers that all such Financial Statements
present fairly in accordance with GAAP the financial position, results of
operations and statements of cash flows of Borrowers and their Subsidiaries on a
consolidated and consolidating basis, as at the end of such Fiscal Year and for
the period then ended, and that there was no Default or Event of Default in
existence as of such time or, if a Default or Event of Default has occurred and
is continuing, describing the nature thereof and all efforts undertaken to cure
such Default or Event of Default.
E-2
(e) Management Letters. To Agent and Lenders, within five (5) Business
Days after receipt thereof by any Credit Party, copies of all management
letters, exception reports or similar letters or reports received by such Credit
Party from its independent certified public accountants.
(f) Default Notices. To Agent and Lenders, as soon as practicable, and
in any event within five (5) Business Days after an executive officer of any
Borrower has actual knowledge of the existence of any Default, Event of Default
or other event that has had a Material Adverse Effect, telephonic or telecopied
notice specifying the nature of such Default or Event of Default or other event,
including the anticipated effect thereof, which notice, if given telephonically,
shall be promptly confirmed in writing on the next Business Day.
(g) SEC Filings and Press Releases. To Agent and Lenders, promptly
upon their becoming available, copies of: (i) all Financial Statements, reports,
notices and proxy statements made publicly available by any Credit Party to its
security holders; (ii) all regular and periodic reports and all registration
statements and prospectuses, if any, filed by any Credit Party with any
securities exchange or with the Securities and Exchange Commission or any
governmental or private regulatory authority; including but not limited to all
Form 8-Ks, quarterly 10-Q's and annual 10-K statements and (iii) all press
releases and other statements made available by any Credit Party to the public
concerning material changes or developments in the business of any such Person.
(h) Subordinated Debt and Equity Notices. To Agent, as soon as
practicable, copies of all material written notices given or received by any
Credit Party with respect to any Subordinated Debt or Stock of such Person, and,
within two (2) Business Days after any Credit Party obtains knowledge of any
matured or unmatured event of default with respect to any Subordinated Debt,
notice of such event of default.
(i) Supplemental Schedules. To Agent, supplemental disclosures, if
any, required by Section 5.6.
(j) Litigation. To Agent in writing, promptly upon learning thereof,
notice of any Litigation commenced or threatened against any Credit Party that
(i) seeks damages in excess of $100,000, (ii) seeks injunctive relief, (iii) is
asserted or instituted against any Plan, its fiduciaries or its assets or
against any Credit Party or ERISA Affiliate in connection with any Plan, (iv)
alleges criminal misconduct by any Credit Party, (v) alleges the violation of
any law regarding, or seeks remedies in connection with, any Environmental
Liabilities or (vi) involves any product recall. To the Agent, at the end of
each month, a report of all Asbestos Claims commenced or disposed of during such
month.
(k) Insurance Notices. To Agent, disclosure of losses or casualties
required by Section 5.4.
(l) Lease Default Notices. To Agent, within 2 Business Days after
receipt thereof, copies of (i) any and all default notices received under or
with respect to any leased location or public warehouse where Collateral is
located, and (ii) such other notices or
E-3
documents as Agent may reasonably request with respect to such leased locations
or public warehouses.
(m) Lease Amendments. To Agent, within two (2) Business Days after
receipt thereof, copies of all material amendments to real estate leases specify
leases of particular concern.
(n) Rate Protection Agreements. To Agent, notice of intention to enter
into any Rate Protection Agreement, together with form of proposed Rate
Protection Agreement.
(o) Other Documents. To Agent and Lenders, such other financial and
other information respecting any Credit Party's business or financial condition
as Agent or any Lender shall from time to time reasonably request including,
without limitation, the annual actuarial study required pursuant to the defined
term "Asbestos Reserve" from a firm acceptable to Agent and in a form similar to
that provided pursuant to Section 2.1(j), the costs of which studies shall be
borne by Borrowers.
E-4
ANNEX F (Section 4.1(b))
to
CREDIT AGREEMENT
COLLATERAL REPORTS
Borrowers shall deliver or cause to be delivered the following:
(a) To Agent, upon its request, and in any event no less frequently
than ten (10) Business Days after the end of each Fiscal Month (together with a
copy of all or any part of the following reports requested by any Lender in
writing after the Closing Date), each of the following reports, each of which
shall be prepared by the applicable Borrower as of the last day of the
immediately preceding Fiscal Month or the date two (2) days prior to the date of
any such request:
(i) a Borrowing Base Certificate with respect to each Borrower, in
each case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(ii) with respect to each Borrower, a summary of Inventory by location
and type with a supporting perpetual Inventory report, in each case accompanied
by such supporting detail and documentation as shall be requested by Agent in
its reasonable discretion; and
(iii) with respect to each Borrower, a monthly trial balance showing
Accounts outstanding aged from invoice date as follows: 1 to 30 days, 31 to 60
days, 61 to 90 days, 91 days to 180 days and 181 days or more, accompanied by
such supporting detail and documentation as shall be requested by Agent in its
reasonable discretion.
(b) To Agent, on a weekly basis or at such more frequent intervals as
Agent may request from time to time, including, at Agent's option, on a daily
basis if average daily Borrowing Availability for all Borrowers for any 90 day
period is less than (x) $11,500,000 prior to the Acquisition Closing Date, or
(y) $16,000,000 on and after the Acquisition Closing Date (together with a copy
of all or any part of such delivery requested by any Lender in writing after the
Closing Date), collateral reports with respect to each Borrower, including all
additions and reductions (cash and non-cash) with respect to Accounts of such
Borrower, in each case accompanied by such supporting detail and documentation
as shall be requested by Agent in its reasonable discretion each of which shall
be prepared by the applicable Borrower as of the last day of the immediately
preceding week or the date two (2) days prior to the date of any such request;
(c) To Agent, at the time of delivery of each of the monthly Financial
Statements delivered pursuant to Annex E:
(i) a reconciliation of the Accounts trial balance of each Borrower to
such Borrower's most recent Borrowing Base Certificate, general ledger and
monthly Financial
F-1
Statements delivered pursuant to Annex E, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion;
(ii) a reconciliation of the perpetual inventory by location of each
Borrower to such Borrower's most recent Borrowing Base Certificate, general
ledger and monthly Financial Statements delivered pursuant to Annex E, in each
case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(iii) an aging of accounts payable and a reconciliation of that
accounts payable aging to each Borrower's general ledger and monthly Financial
Statements delivered pursuant to Annex E, in each case accompanied by such
supporting detail and documentation as shall be requested by Agent in its
reasonable discretion;
(iv) a reconciliation of the outstanding Loans as set forth in the
monthly Loan Account statement provided by Agent to each Borrower's general
ledger and monthly Financial Statements delivered pursuant to Annex E, in each
case accompanied by such supporting detail and documentation as shall be
requested by Agent in its reasonable discretion;
(d) To Agent, at the time of delivery of each of the quarterly or
annual Financial Statements delivered pursuant to Annex E, (i) a listing of
government contracts of each Borrower subject to the Federal Assignment of
Claims Act of 1940; and (ii) a list of any applications for the registration of
any Patent, Trademark or Copyright filed by any Credit Party with the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in the prior Fiscal Quarter;
(e) Each Borrower, at its own expense, shall deliver to Agent the
results of each physical verification, if any, that such Borrower or any of its
Subsidiaries may in their discretion have made, or caused any other Person to
have made on their behalf, of all or any portion of their Inventory (and, if a
Default or an Event of Default has occurred and is continuing, each Borrower
shall, upon the request of Agent, conduct, and deliver the results of, such
physical verifications as Agent may require);
(f) Each Borrower, at its own expense, shall deliver to Agent such
appraisals of its assets as Agent may request, no more frequently than once a
year and at any time after the occurrence and during the continuance of a
Default or an Event of Default, such appraisals to be conducted by an appraiser,
and in form and substance reasonably satisfactory to Agent; and
(g) Such other reports, statements and reconciliations with respect to
the Borrowing Base, Collateral or Obligations of any or all Credit Parties as
Agent shall from time to time request in its reasonable discretion, including,
without limitation, an annual actuarial study performed by an actuary acceptable
to Agent.
F-2
ANNEX G (Section 6.10)
to
CREDIT AGREEMENT
FINANCIAL COVENANTS
1. Prior to Acquisition Closing Date, Borrowers shall not breach or
fail to comply with any of the following financial covenants, each of which
shall be calculated in accordance with GAAP consistently applied:
(a) Maximum Capital Expenditures. Borrowers and their Subsidiaries on
a consolidated basis shall not make Capital Expenditures during any Fiscal Year
that exceeds one hundred twenty percent (120%) of the amount set forth in the
Projections for such Fiscal Year; provided, however, that any unused portion of
such sum may be carried over and expended in any subsequent Fiscal Year.
(b) Minimum Tangible Net Worth. Borrowers and their Subsidiaries on a
consolidated basis shall maintain at the end of each Fiscal Quarter commencing
with the Fiscal Quarter ending on or about March 31, 2001 a Tangible Net Worth
equal to or greater than $114,660,000 plus (ii) the amount of additional
Tangible Net Worth added as a result of any pooling of interests in connection
with any acquisition, provided, however, that if Borrowing Availability at any
date of determination exceeds $25,000,000, compliance with this Tangible Net
Worth covenant shall not be required.
2. On and after the Acquisition Closing Date, Borrowers shall not
breach or fail to comply with any of the following financial covenants, each of
which shall be calculated in accordance with GAAP consistently applied:
(a) Minimum EBITDA. Borrowers and their Subsidiaries on a consolidated
basis shall have, at the end of each Fiscal Quarter set forth below, EBITDA
for the 12-month period then ended (or with respect to the Fiscal Quarters
ending on or before December 31, 2003, the period commencing on January 1,
2003 and ending on the last day of such Fiscal Quarter) of not less than
the following:
Fiscal Quarter Ending EBITDA
--------------------- -----------
March 31, 2003 $ 5,000,000
June 30, 2003 $18,000,000
September 30, 2003 $34,000,000
December 31, 2003 $36,000,000
March 31, 2004 $40,000,000
June 30, 2004 $48,500,000
(b) Minimum Fixed Charge Cover Ratio. Borrowers and their Subsidiaries
on a consolidated basis shall have, at the end of each Fiscal Quarter set
forth below, a Fixed
G-1
Charge Coverage Ratio for the 12-month period then ended of not less than
the following:
Fiscal Quarter Ending Fixed Charge Coverage Ratio
----------------------- ---------------------------
September 30, 2004 1.05 to 1.00
December 31, 2004 1.15 to 1.00
March 31, 2005 and each 1.25 to 1.00
Fiscal Quarter ending
thereafter
(c) Maximum Capital Expenditures. Borrowers and their Subsidiaries on
a consolidated basis shall not make Capital Expenditures (excluding Capital
Leases entered into in connection with the Acquisition) during any Fiscal
Year set forth below in excess of the amount set forth below; provided,
however, that twenty-five percent (25%) of the unused portion of such sum
may be carried over and expended in any subsequent Fiscal Year.
Fiscal Year Maximum Capital Expenditure
----------- ---------------------------
2003 $17,000,000
2004 $17,000,000
2005 $17,500,000
2006 $18,000,000
2007 $18,500,000
Unless otherwise specifically provided herein, any accounting term
used in the Agreement shall have the meaning customarily given such term in
accordance with GAAP, and all financial computations hereunder shall be computed
in accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Borrowers, Agent and Lenders agree to enter into negotiations in
order to amend such provisions of the Agreement so as to equitably reflect such
Accounting Changes with the desired result that the criteria for evaluating
Borrowers' and their Subsidiaries' financial condition shall be the same after
such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (i) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (ii)
changes in accounting principles concurred in by any Borrower's certified public
accountants; (iii) purchase accounting adjustments under A.P.B. 16 or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (iv) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments
G-2
resulting from expenditures made subsequent to the Closing Date (including
capitalization of costs and expenses or payment of pre-Closing Date liabilities)
shall be treated as expenses in the period the expenditures are made and
deducted as part of the calculation of EBITDA in such period. If Agent,
Borrowers and Requisite Lenders agree upon the required amendments, then after
appropriate amendments have been executed and the underlying Accounting Change
with respect thereto has been implemented, any reference to GAAP contained in
the Agreement or in any other Loan Document shall, only to the extent of such
Accounting Change, refer to GAAP, consistently applied after giving effect to
the implementation of such Accounting Change. If Agent, Borrowers and Requisite
Lenders cannot agree upon the required amendments within thirty (30) days
following the date of implementation of any Accounting Change, then all
Financial Statements delivered and all calculations of financial covenants and
other standards and terms in accordance with the Agreement and the other Loan
Documents shall be prepared, delivered and made without regard to the underlying
Accounting Change. For purposes of Section 8.1, a breach of a Financial Covenant
contained in this Annex G shall be deemed to have occurred as of any date of
determination by Agent or as of the last day of any specified measurement
period, regardless of when the Financial Statements reflecting such breach are
delivered to Agent.
G-3
ANNEX H (Section 9.9(a))
to
CREDIT AGREEMENT
WIRE TRANSFER INFORMATION
Name: General Electric Capital Corporation
Bank: DeutscheBank Trust Company Americas
New York, New York
ABA #: 000000000
Account #: 00000000
Account Name: GECC/CAF Depository
Reference: CFN 4451
H-1
ANNEX I (Section 11.10)
to
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Agent or GE Capital, at
General Electric Capital Corporation
000 Xxxxxxxxxxx Xxxxxx, Xxx Xxxxx
Xxxxxxx, XX 00000
Attention: Standard Motor Products, Inc. - Account Manager
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Xxxx & Hessen LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
and
General Electric Capital Corporation
000 Xxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Counsel - Commercial Finance
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to any Borrower, to Borrower Representative, at
Standard Motor Products, Inc.
00-00 Xxxxxxxx Xxxxxxxxx
Xxxx Xxxxxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxx
Telecopier No.: (718)
Telephone No.: (718)
with copies to:
Xxxxxx Xxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
I-1
ANNEX J (from Annex A - Commitments definition)
to
CREDIT AGREEMENT
Tranche A Revolver Loan Commitment Lender(s)
---------------------------------- ------------------------------------------------------
$75,000,000 GE Capital Corporation
$41,000,000 Bank of America, N.A.
$37,500,000 GMAC Commercial Finance LLC (as successor by merger to
GMAC Commercial Credit LLC)
$14,500,000 Transamerica Business Capital Corporation
$19,500,000 Congress Financial Corporation
$19,500,000 JPMorgan Chase Bank
$18,000,000 HSBC Bank USA
Tranche B Revolver Loan Commitment Lender(s)
---------------------------------- ------------------------------------------------------
$25,000,000 Foothill Capital Corporation
$25,000,000 Xxxxxxx Xxxxx Capital, a Division of Xxxxxxx Xxxxx
Business Financial Services Inc.
$20,500,000 Congress Financial Corporation
$5,500,000 JPMorgan Chase Bank
$4,000,000 Bank of America, N.A.
Revolving Loan Commitment on and
after the Acquisition Closing Date Lender(s)
---------------------------------- ------------------------------------------------------
$75,000,000 GE Capital Corporation
$45,000,000 Bank of America, N.A.
$37,500,000 GMAC Commercial Finance LLC (as successor by merger to
GMAC Commercial Credit LLC)
$14,500,000 Transamerica Business Capital Corporation
$40,000,000 Congress Financial Corporation
$25,000,000 JPMorgan Chase Bank
$18,000,000 HSBC Bank USA
$25,000,000 Foothill Capital Corporation
$25,000,000 Xxxxxxx Xxxxx Capital, a Division of Xxxxxxx Xxxxx
Business Financial Services Inc.
J-1
