EXHIBIT 10.2
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LOAN AND SECURITY AGREEMENT
BY AND AMONG
XXXXX RIVER COAL COMPANY
XXXXX RIVER COAL SERVICE COMPANY
LEECO, INC.
BLUE DIAMOND COAL COMPANY
XXXXXXX COAL CORPORATION
XXXXX ELKHORN COAL CORPORATION
XXXX COUNTY COAL CORPORATION
XXXXX RIVER COAL SALES, INC.
XXXXX CREEK COAL COMPANY
AS BORROWERS,
LEECO PROCESSING COMPANY
XXXXXXXXXXX PROCESSING COMPANY
XXXXXXX COAL LEASING COMPANY
XXXXXXX PROCESSING COMPANY
BDCC HOLDING COMPANY, INC.
BLUE DIAMOND COAL EXPORT CO.
EOLIA RESOURCES, INC.
SHAMROCK COAL COMPANY, INCORPORATED
PIKE COUNTY RESOURCES, INC.
PRIMARY ENERGIES CORPORATION
XXXXX CREEK PROCESSING COMPANY
XXXXX CREEK ELKHORN COAL CORPORATION
XXXXXXX PROCESSING COMPANY
AS CREDIT PARTIES,
AND
THE LENDERS THAT ARE SIGNATORIES HERETO
AS LENDERS,
AND
XXXXX FARGO FOOTHILL, INC.
AS ARRANGER AND ADMINISTRATIVE AGENT
AND
XXXXXX XXXXXXX SENIOR FUNDING, INC
AS SYNDICATION AGENT AND SOLE LEAD ARRANGER AND BOOK RUNNER FOR THE TERM LOAN
DATED AS OF MAY 6, 2004
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TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION.........................................................................2
1.1. Definitions...................................................................................2
1.2. Accounting Terms.............................................................................33
1.3. Code.........................................................................................33
1.4. Construction.................................................................................33
1.5. Schedules and Exhibits.......................................................................34
2. LOAN AND TERMS OF PAYMENTS..........................................................................34
2.1. Revolver Advances............................................................................34
2.2. Term Loan....................................................................................35
2.3. Borrowing Procedures and Settlements.........................................................36
2.4. Payments.....................................................................................42
2.5. Overadvances.................................................................................49
2.6. Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations..................49
2.7. Cash Management..............................................................................51
2.8. Crediting Payments...........................................................................52
2.9. Designated Account...........................................................................53
2.10. Maintenance of Loan Account; Statements of Obligations.......................................53
2.11. Fees.........................................................................................53
2.12. Letters of Credit............................................................................54
2.13. LIBOR Option.................................................................................57
2.14. Capital Requirements.........................................................................60
2.15. Joint and Several Liability of Borrowers.....................................................60
2.16. Registered Loan..............................................................................62
3. CONDITIONS; TERM OF AGREEMENT.......................................................................63
3.1. Conditions Precedent to the Initial Extension of Credit......................................63
3.2. Conditions Subsequent to the Initial Extension of Credit.....................................66
3.3. Conditions Precedent to all Extensions of Credit.............................................67
3.4. Term.........................................................................................67
3.5. Effect of Termination........................................................................67
3.6. Early Termination by Borrowers...............................................................68
4. CREATION OF SECURITY INTEREST.......................................................................69
4.1. Grant of Security Interest...................................................................69
4.2. Negotiable Collateral........................................................................69
4.3. Collection of Accounts, General Intangibles, and Negotiable Collateral.......................69
4.4. Filing of Financing Statements; Commercial Tort Claims; Delivery of Additional
Documentation Required.......................................................................69
4.5. Power of Attorney............................................................................71
4.6. Right to Inspect.............................................................................71
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4.7. Control Agreements...........................................................................71
5. REPRESENTATIONS AND WARRANTIES......................................................................71
5.1. No Encumbrances..............................................................................72
5.2. Eligible Accounts............................................................................72
5.3. Eligible Inventory...........................................................................72
5.4. Equipment....................................................................................72
5.5. Location of Inventory and Equipment..........................................................72
5.6. Inventory Records............................................................................72
5.7. State of Incorporation; Location of Chief Executive Office; Organizational Identification
Number; Commercial Tort Claims...............................................................72
5.8. Due Organization and Qualification; Subsidiaries.............................................73
5.9. Due Authorization; No Conflict...............................................................73
5.10. Litigation...................................................................................74
5.11. No Material Adverse Change...................................................................74
5.12. Fraudulent Transfer..........................................................................75
5.13. Employee Benefits............................................................................75
5.14. Environmental Condition......................................................................75
5.15. Brokerage Fees...............................................................................75
5.16. Intellectual Property........................................................................75
5.17. Leases.......................................................................................75
5.18. Deposit Accounts and Securities Accounts.....................................................75
5.19. Complete Disclosure..........................................................................76
5.20. Indebtedness.................................................................................76
5.21. Mining Leases................................................................................76
6. AFFIRMATIVE COVENANTS...............................................................................76
6.1. Accounting System............................................................................76
6.2. Collateral Reporting.........................................................................76
6.3. Financial Statements, Reports, Certificates..................................................78
6.4. Intentionally Omitted........................................................................80
6.5. Returns......................................................................................80
6.6. Maintenance of Properties....................................................................80
6.7. Taxes........................................................................................80
6.8. Insurance....................................................................................80
6.9. Location of Inventory and Equipment..........................................................81
6.10. Compliance with Laws.........................................................................81
6.11. Leases.......................................................................................81
6.12. Existence....................................................................................81
6.13. Environmental................................................................................81
6.14. Disclosure Updates...........................................................................82
6.15. Formation of Subsidiaries....................................................................82
6.16. Mining.......................................................................................82
7. NEGATIVE COVENANTS..................................................................................83
7.1. Indebtedness.................................................................................83
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7.2. Liens........................................................................................83
7.3. Restrictions on Fundamental Changes..........................................................84
7.4. Disposal of Assets...........................................................................84
7.5. Change Name..................................................................................84
7.6. Nature of Business...........................................................................84
7.7. Prepayments and Amendments...................................................................84
7.8. Change of Control............................................................................85
7.9. Consignment..................................................................................85
7.10. Distributions................................................................................85
7.11. Accounting Methods...........................................................................85
7.12. Investments..................................................................................85
7.13. Transactions with Affiliates.................................................................85
7.14. Suspension...................................................................................85
7.15. Intentionally Omitted........................................................................85
7.16. Use of Proceeds..............................................................................86
7.17. Inventory and Equipment with Bailees.........................................................86
7.18. Financial Covenants..........................................................................86
8. EVENTS OF DEFAULT...................................................................................92
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..............................................................95
9.1. Rights and Remedies..........................................................................95
9.2. Remedies Cumulative..........................................................................97
10.TAXES AND EXPENSES..................................................................................97
11.WAIVERS; INDEMNIFICATION............................................................................97
11.1. Demand; Protest; etc.........................................................................97
11.2. The Lender Group's Liability for Company Collateral..........................................98
11.3. Indemnification..............................................................................98
12.NOTICES.............................................................................................98
13.CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.........................................................100
14.ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.........................................................101
14.1. Assignments and Participations..............................................................101
14.2. Successors..................................................................................104
15.AMENDMENTS; WAIVERS................................................................................105
15.1. Amendments and Waivers......................................................................105
15.2. Replacement of Holdout Lender...............................................................106
15.3. No Waivers; Cumulative Remedies.............................................................106
16.AGENT; THE LENDER GROUP............................................................................107
16.1. Appointment and Authorization of Agent......................................................107
16.2. Delegation of Duties........................................................................108
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16.3. Liability of Agent..........................................................................108
16.4. Reliance by Agent...........................................................................108
16.5. Notice of Default or Event of Default.......................................................109
16.6. Credit Decision.............................................................................109
16.7. Costs and Expenses; Indemnification.........................................................110
16.8. Agent in Individual Capacity................................................................110
16.9. Successor Agent.............................................................................111
16.10. Lender in Individual Capacity...............................................................111
16.11. Withholding Taxes...........................................................................112
16.12. Collateral Matters..........................................................................114
16.13. Restrictions on Actions by Lenders; Sharing of Payments.....................................114
16.14. Agency for Perfection.......................................................................115
16.15. Payments by Agent to the Lenders............................................................115
16.16. Concerning the Collateral and Related Loan Documents........................................115
16.17. Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information.....................................................................116
16.18. Several Obligations; No Liability...........................................................117
16.19. Bank Product Providers......................................................................117
16.20. Legal Representation of Agent...............................................................117
16.21. Syndication Agent...........................................................................117
17.GENERAL PROVISIONS.................................................................................118
17.1. Effectiveness...............................................................................118
17.2. Section Headings............................................................................118
17.3. Interpretation..............................................................................118
17.4. Severability of Provisions..................................................................118
17.5. Counterparts; Electronic Execution..........................................................118
17.6. Revival and Reinstatement of Obligations....................................................118
17.7. Confidentiality.............................................................................119
17.8. Integration.................................................................................119
17.9. JRCC as Agent for Borrowers.................................................................119
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit C-1 Form of Compliance Certificate
Exhibit L-1 Form of LIBOR Notice
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule E-1 Eligible Inventory Locations
Schedule K-1 Real Property Transaction
Schedule P-1 Permitted Liens
Schedule P-2 Permitted Holders
Schedule R-1 Real Property Collateral
Schedule W-1 Wachovia L/Cs
Schedule 2.7(a) Cash Management Banks
Schedule 5.5 Locations of Inventory and Equipment
Schedule 5.7(a) States of Organization
Schedule 5.7(b) Chief Executive Offices
Schedule 5.7(c) Organizational Identification Numbers
Schedule 5.7(d) Commercial Tort Claims
Schedule 5.8(b) Capitalization of Borrowers
Schedule 5.8(c) Capitalization of Borrowers' Subsidiaries
Schedule 5.10 Litigation
Schedule 5.13 Employee Benefits
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.18 Deposit Accounts and Securities Accounts
Schedule 5.20 Permitted Indebtedness
Schedule 5.21 Mining Leases
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT (this "AGREEMENT"), is entered into as
of May 6, 2004, by and among, on the one hand, the lenders identified on the
signature pages hereof (such lenders, together with their respective successors
and permitted assigns, are referred to hereinafter each individually as a
"Lender" and collectively as the "LENDERS"), and XXXXX FARGO FOOTHILL, INC., a
California corporation, as the arranger and administrative agent for the Lenders
(in such capacity, together with its successors and assigns in such capacity,
"AGENT"), XXXXXX XXXXXXX SENIOR FUNDING, INC., a Delaware corporation, as the
syndication agent for the Lenders (in such capacity, together with its
successors and assigns in such capacity, "SYNDICATION AGENT") and Sole Lead
Arranger and Book Runner for the Term Loan, and, on the other xxxx, XXXXX RIVER
COAL COMPANY, a Virginia corporation ("JRCC"), XXXXX RIVER COAL SERVICE COMPANY,
a Kentucky corporation ("SERVICE"), LEECO, INC., a Kentucky corporation
("LEECO"), BLUE DIAMOND COAL COMPANY, a Delaware corporation ("BLUE DIAMOND"),
XXXXXXX COAL CORPORATION, a Kentucky corporation ("XXXXXXX"), XXXXX ELKHORN COAL
CORPORATION, a Kentucky corporation ("XXXXX"), XXXX COUNTY COAL CORPORATION, a
Delaware corporation ("XXXX"), XXXXX RIVER COAL SALES, INC., a Delaware
corporation ("SALES"), XXXXX CREEK COAL COMPANY, a Tennessee corporation ("XXXXX
CREEK"; JRCC, Service, Leeco, Blue Diamond, Bledsoe, McCoy, Bell, Sales and
Xxxxx Creek, are referred to hereinafter each individually as a "BORROWER", and
individually and collectively, jointly and severally, as the "BORROWERS"), LEECO
PROCESSING COMPANY, a Delaware corporation ("PROCESSING"), XXXXXXXXXXX
PROCESSING COMPANY, a Delaware corporation ("XXXXXXXXXXX"), XXXXXXX COAL LEASING
COMPANY, a Delaware corporation ("LEASING"), XXXXXXX PROCESSING COMPANY, a
Delaware corporation ("BPC"), BDCC HOLDING COMPANY, INC., a Delaware corporation
("BDCC"), BLUE DIAMOND COAL EXPORT CO., a Delaware corporation ("EXPORT"), EOLIA
RESOURCES, INC., a North Carolina corporation ("EOLIA"), SHAMROCK COAL COMPANY,
INCORPORATED, a Delaware corporation ("SCCI"), PIKE COUNTY RESOURCES, INC., a
Kentucky corporation ("PIKE"), PRIMARY ENERGIES CORPORATION, a Kentucky
corporation ("PRIMARY"), XXXXX CREEK PROCESSING COMPANY, a Delaware corporation
("JCPC"), XXXXX CREEK ELKHORN COAL CORPORATION, a Delaware corporation ("JCEC"),
XXXXXXX PROCESSING COMPANY, a Delaware corporation ("XXXXXXX"; Processing,
Xxxxxxxxxxx, Leasing, BPC, BDCC, Export, Eolia, SCCI, Pike, Primary, JCPC, JCEC
and Xxxxxxx, are referred to hereinafter each individually as a "CREDIT PARTY",
and individually and collectively, jointly and severally, as the "CREDIT
PARTIES"; the Borrowers and Credit Parties are referred to hereinafter each
individually as a "COMPANY" and individually and collectively, jointly and
severally, as the "COMPANIES").
The parties agree as follows:
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1. DEFINITIONS AND CONSTRUCTION.
1.1. DEFINITIONS. As used in this Agreement, the following terms
shall have the following definitions:
"ACCOUNT" means an account (as that term is defined in the
Code).
"ACCOUNT DEBTOR" means any Person who is obligated on an
Account, chattel paper, or a General Intangible.
"ACH TRANSACTIONS" means any cash management or related services
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) provided by a Bank Product
Provider for the account of a Company.
"ADDITIONAL DOCUMENTS" has the meaning set forth in SECTION
4.4(C).
"ADMINISTRATIVE BORROWER" has the meaning set forth in SECTION
17.9.
"ADVANCES" has the meaning set forth in SECTION 2.1(A).
"AFFILIATE" means, as applied to any Person, any other Person
who, directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such Person. For purposes of
this definition, "control" means the possession, directly or indirectly through
one or more intermediaries, of the power to direct the management and policies
of a Person, whether through the ownership of Stock, by contract, or otherwise;
PROVIDED, HOWEVER, that, for purposes of the definition of Eligible Accounts and
SECTION 7.13 hereof: (a) any Person which owns directly or indirectly 10% or
more of the Stock having ordinary voting power for the election of directors or
other members of the governing body of a Person or 10% or more of the
partnership or other ownership interests of a Person (other than as a limited
partner of such Person) shall be deemed an Affiliate of such Person, (b) each
director (or comparable manager) of a Person shall be deemed to be an Affiliate
of such Person, and (c) each partnership or joint venture in which a Person is a
partner or joint venturer shall be deemed an Affiliate of such Person.
"AGENT" has the meaning set forth in the preamble to this
Agreement.
"AGENT ADVANCES" has the meaning set forth in SECTION 2.3(E)(I).
"AGENT-RELATED PERSONS" means Agent, together with its
Affiliates, officers, directors, employees, attorneys, and agents.
"AGENT'S ACCOUNT" means the Deposit Account of Agent identified
on SCHEDULE A-1.
"AGENT'S LIENS" means the Liens granted by Companies to Agent
under this Agreement or the other Loan Documents.
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"AGREEMENT" has the meaning set forth in the preamble hereto.
"AGREEMENT AMONG LENDERS" means that certain Agreement Among
Lenders, dated as of even date herewith, by and among the Lenders and Agent, in
form and substance reasonably satisfactory to the Lenders and Agent.
"AIRCRAFT MORTGAGE" means the First Priority Security Agreement
of even date herewith, in form and substance reasonably satisfactory to Agent,
between Services and Agent.
"AMORTIZATION" means, with respect to any period, the sum of all
amortization charges of JRCC and its Subsidiaries for such period as determined
in accordance with GAAP, on a consolidated basis.
"APPLICABLE PREPAYMENT PREMIUM" means, as of any date of
determination, an amount equal to (a) during the period from and after the date
of the execution and delivery of this Agreement up to the date that is the first
anniversary of the Closing Date, 2.5% TIMES the Maximum Revolver Amount on the
date immediately prior to the date of determination, (b) during the period from
and including the date that is the first anniversary of the Closing Date up to
the date that is the second anniversary of the Closing Date, 2% TIMES the
Maximum Revolver Amount on the date immediately prior to the date of
determination, (c) during the period from and including the date that is the
second anniversary of the Closing Date up to the date that is the third
anniversary of the Closing Date, 1.5% TIMES the Maximum Revolver Amount on the
date immediately prior to the date of determination, and (d) during the period
from and including the date that is the third anniversary of the Closing Date up
to the date that is the fourth anniversary of the Closing Date, 0.5% TIMES the
Maximum Revolver Amount on the date immediately prior to the date of
determination; PROVIDED, that in the event the Obligations are repaid in full
and this Agreement is terminated in connection with a refinancing provided by
Xxxxx Fargo, the Applicable Prepayment Premium shall be zero.
"APPLICABLE TERM LOAN PREPAYMENT PREMIUM" means, as of any date
of determination, an amount equal to (a) during the period from and after the
date of the execution and delivery of this Agreement up to April 30, 2007, 1.0%,
and (b) thereafter, zero.
"AS-EXTRACTED COLLATERAL" means as-extracted collateral (as that
term is defined in the Code).
"ASSIGNEE" has the meaning set forth in SECTION 14.1(A).
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance
Agreement substantially in the form of EXHIBIT A-1.
"AUTHORIZED PERSON" means any officer or employee of
Administrative Borrower.
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"AVAILABILITY" means, as of any date of determination, the
amount that Borrowers are entitled to borrow as Advances hereunder (after giving
effect to all then outstanding Obligations (other than Bank Product Obligations)
and all sublimits and reserves then applicable hereunder).
"BANK PRODUCT" means any financial accommodation extended to any
Company by a Bank Product Provider (other than pursuant to this Agreement)
including: (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) transactions under Hedge
Agreements.
"BANK PRODUCT AGREEMENTS" means those agreements entered into
from time to time by a Company with a Bank Product Provider in connection with
the obtaining of any of the Bank Products.
"BANK PRODUCT OBLIGATIONS" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Companies to
any Bank Product Provider pursuant to or evidenced by the Bank Product
Agreements and irrespective of whether for the payment of money, whether direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all such amounts that Companies are obligated
to reimburse to Agent or any member of the Lender Group as a result of Agent or
such member of the Lender Group purchasing participations from, or executing
indemnities or reimbursement obligations to, a Bank Product Provider with
respect to the Bank Products provided by such Bank Product Provider to any
Company.
"BANK PRODUCT PROVIDER" means Xxxxx Fargo or any of its
Affiliates.
"BANK PRODUCT RESERVE" means, as of any date of determination,
the lesser of (a) $3,000,000 and (b) the amount of reserves that Agent has
established (based upon the Bank Product Providers' reasonable determination of
the credit exposure of Companies in respect of Bank Products) in respect of Bank
Products then provided or outstanding, PROVIDED, HOWEVER, that in order to
qualify as Bank Product Reserves, such reserves must be established at or about
the time that the Bank Product Provider first provides the applicable Bank
Product.
"BANKRUPTCY CASE" means Case No. 303-04095 of the Companies
filed in the Bankruptcy Court.
"BANKRUPTCY CODE" means title 11 of the United States Code, as
in effect from time to time.
"BANKRUPTCY COURT" means the United States Bankruptcy Court for
the Middle District of Tennessee, Nashville Division.
"BASE LIBOR RATE" means the rate per annum, determined by Agent
in accordance with its customary procedures, and utilizing such electronic or
other quotation sources as it considers appropriate (rounded upwards, if
necessary, to the next 1/100%), to be
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the rate at which Dollar deposits (for delivery on the first day of the
requested Interest Period) are offered to major banks in the London interbank
market 2 Business Days prior to the commencement of the requested Interest
Period, for a term and in an amount comparable to the Interest Period and the
amount of the LIBOR Rate Loan requested (whether as an initial LIBOR Rate Loan
or as a continuation of a LIBOR Rate Loan or as a conversion of a Base Rate Loan
to a LIBOR Rate Loan) by Administrative Borrower in accordance with this
Agreement, which determination shall be conclusive in the absence of manifest
error.
"BASE RATE" means, the rate of interest announced, from time to
time, within Xxxxx Fargo at its principal office in San Francisco as its "prime
rate", with the understanding that the "prime rate" is one of Xxxxx Fargo's base
rates (not necessarily the lowest of such rates) and serves as the basis upon
which effective rates of interest are calculated for those loans making
reference thereto and is evidenced by the recording thereof after its
announcement in such internal publications as Xxxxx Fargo may designate.
"BASE RATE LOAN" means the portion of the Advances or the Term
Loan that bears interest at a rate determined by reference to the Base Rate.
"BASE RATE MARGIN" means 1 percentage point.
"BASE RATE TERM LOAN MARGIN" means 3.85 percentage points.
"BENEFIT PLAN" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which any Company or ERISA Affiliate of any Company
has been an "employer" (as defined in Section 3(5) of ERISA) within the past six
years.
"BOARD OF DIRECTORS" means the board of directors (or comparable
managers) of JRCC or any committee thereof duly authorized to act on behalf of
the board of directors (or comparable managers).
"BOOKS" means all of Companies' now owned or hereafter acquired
books and records (including all of their Records indicating, summarizing, or
evidencing their assets (including the Collateral) or liabilities, all of
Companies' Records relating to their business operations or financial condition,
and all of their goods or General Intangibles related to such information).
"BORROWING" means a borrowing hereunder consisting of Advances
(or term loans, in the case of the Term Loan) made on the same day by the
Lenders (or Agent on behalf thereof), or by Swing Lender in the case of a Swing
Loan, or by Agent in the case of an Agent Advance, in each case, to
Administrative Borrower.
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"BORROWING BASE" means, as of any date of determination, the
result of:
(a) the lesser of
(i) 85% of the amount of Eligible Accounts
(provided, that Advances predicated upon Premium Grade
Accounts shall not exceed $2,000,000), LESS the amount,
if any, of the Dilution Reserve, and
(ii) an amount equal to Borrowers' Collections with
respect to Accounts for the immediately preceding 75 day
period, PLUS
(b) the lowest of
(i) $10,000,000,
(ii) 65% of the value of Eligible Inventory,
(iii) 80% TIMES the Net Liquidation Percentage TIMES
the value of Eligible Inventory, and
(iv) 50% of the amount of credit availability created
by CLAUSE (A) above, PLUS
(c) the Fixed Asset Portion, MINUS
(d) the sum of (i) the Bank Product Reserve, and (ii) the
aggregate amount of reserves, if any, established by Agent under SECTION 2.1(B).
"BUSINESS DAY" means any day that is not a Saturday, Sunday, or
other day on which banks are authorized or required to close in the State of
Georgia, except that, if a determination of a Business Day shall relate to a
LIBOR Rate Loan, the term "Business Day" also shall exclude any day on which
banks are closed for dealings in Dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means Maintenance Capital Expenditures
and Mine No. 15 Capital Expenditures.
"CAPITALIZED LEASE OBLIGATION" means that portion of the
obligations under a Capital Lease that is required to be capitalized in
accordance with GAAP.
"CAPITAL LEASE" means a lease that is required to be capitalized
for financial reporting purposes in accordance with GAAP.
"CASH EQUIVALENTS" means (a) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
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maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either
Standard & Poor's Rating Group ("S&P") or Xxxxx'x Investors Service, Inc.
("MOODY'S"), (c) commercial paper maturing no more than 270 days from the date
of creation thereof and, at the time of acquisition, having a rating of at least
A-1 from S&P or at least P-1 from Moody's, (d) certificates of deposit or
bankers' acceptances maturing within 1 year from the date of acquisition thereof
issued by any bank organized under the laws of the United States or any state
thereof having at the date of acquisition thereof combined capital and surplus
of not less than $250,000,000, (e) Deposit Accounts maintained with (i) any bank
that satisfies the criteria described in clause (d) above, or (ii) any other
bank organized under the laws of the United States or any state thereof so long
as the amount maintained with any such other bank is less than or equal to
$100,000 and is insured by the Federal Deposit Insurance Corporation, and (f)
Investments in money market funds substantially all of whose assets are invested
in the types of assets described in clauses (a) through (e) above.
"CASH MANAGEMENT ACCOUNT" has the meaning set forth in SECTION
2.7(A).
"CASH MANAGEMENT AGREEMENTS" means those certain cash management
agreements, in form and substance reasonably satisfactory to Agent, each of
which is among a Company, Agent, and one of the Cash Management Banks.
"CASH MANAGEMENT BANK" has the meaning set forth in SECTION
2.7(A).
"CHANGE OF CONTROL" means that (a) any "person" or "group"
(within the meaning of Sections 13(d) and 14(d) of the Exchange Act), other than
Permitted Holders, becomes the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of 25%, or more, of the Stock of JRCC
having the right to vote for the election of members of the Board of Directors,
(b) if at any time, individuals who at the date hereof constituted the Board of
Directors of JRCC (together with any new directors whose election by such Board
of Directors or whose nomination for election by the shareholders of JRCC, as
the case may be, was approved by a vote of the majority of the directors then
still in office who were either directors at the date hereof or whose election
or nomination for election was previously so approved) cease for any reason to
constitute a majority of the Board of Directors of JRCC then in office, or (c)
JRCC ceases to own, directly or indirectly, and control 100% of the outstanding
Stock of each of its Subsidiaries in existence as of the Closing Date, other
than in connection with a Permitted Corporate Transaction.
"CLOSING DATE" means the date of the making of the initial
Advance (or other extension of credit) hereunder.
"CLOSING DATE BUSINESS PLAN" means the set of Projections of
Companies for the 3 year period following the Closing Date (on a year by year
basis, and for the period commencing May 1, 2004, and ending December 31, 2004,
on a month by month basis), in form and substance (including as to scope and
underlying assumptions) reasonably satisfactory to Agent.
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"COAL GRADE RESERVE" means a reserve established by Agent with
respect to credits generated against Accounts owed by any Account Debtor as a
result of a determination that coal sold to such Account Debtor is, with respect
to any given Account, below the grade contracted for by such Account Debtor.
"CODE" means the New York Uniform Commercial Code, as in effect
from time to time; PROVIDED, HOWEVER, that in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection, priority,
or remedies with respect to Agent'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.
"COLLATERAL" means all assets and interests in assets and
proceeds thereof now owned or hereafter acquired by any Company in or upon which
a Lien is granted under any of the Loan Documents.
"COLLATERAL ACCESS AGREEMENT" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor, warehouseman, processor,
consignee, or other Person in possession of, having a Lien upon, or having
rights or interests in any Company's Books, Equipment or Inventory, in each
case, in form and substance reasonably satisfactory to Agent.
"COLLECTIONS" means ALL cash, checks, notes, instruments, and
other items of payment (including insurance proceeds, proceeds of cash sales,
rental proceeds, and tax refunds but excluding proceeds of Advances).
"COMMERCIAL TORT CLAIM ASSIGNMENT" has the meaning set forth in
SECTION 4.4(B).
"COMMITMENT" means, with respect to each Lender, its Revolver
Commitment, its Term Loan Commitment or its Total Commitment, as the context
requires, and, with respect to all Lenders, their Revolver Commitments, their
Term Loan Commitments or their Total Commitments, as the context requires, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on SCHEDULE C-1 or in the Assignment and Acceptance
pursuant to which such Lender became a Lender hereunder, as such amounts may be
reduced or increased from time to time pursuant to assignments made in
accordance with the provisions of SECTION 14.1.
"COMPANY COLLATERAL" means all of each Company's now owned or
hereafter acquired right, title, and interest in and to each of the following:
(a) all of its Accounts,
(b) all of its Books,
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(c) all of its commercial tort claims described on SCHEDULE
5.7(D),
(d) all of its Deposit Accounts,
(e) all of its Equipment,
(f) all of its General Intangibles,
(g) all of its Inventory,
(h) all of its As-extracted Collateral;
(i) all of its Investment Property (including all of its
securities and Securities Accounts),
(j) all of its Negotiable Collateral,
(k) all of its Supporting Obligations,
(l) money or other assets of each such Company that now or
hereafter come into the possession, custody, or control of any member of the
Lender Group, and
(m) the proceeds and products, whether tangible or
intangible, of any of the foregoing, including proceeds of insurance covering
any or all of the foregoing, and any and all Accounts, Books, Deposit Accounts,
Equipment, General Intangibles, Inventory, As-extracted Collateral, Investment
Property, Negotiable Collateral, Real Property, Supporting Obligations, money,
or other tangible or intangible property resulting from the sale, exchange,
collection, or other disposition of any of the foregoing, or any portion thereof
or interest therein, and the proceeds thereof; PROVIDED, HOWEVER, that Company
Collateral shall exclude any item of General Intangibles that is now or
hereafter held by such Company but only to the extent that such item of General
Intangibles (or any agreement evidencing such item of General Intangibles)
contains a term or is subject to a rule of law, statute or regulation that
restricts, prohibits, or requires a consent (that has not been obtained) of a
Person (other than such Company) to, the creation, attachment or perfection of
the security interest granted herein, and any such restriction, prohibition
and/or requirement of consent is effective and enforceable under applicable law
and is not rendered ineffective by applicable law (including, without
limitation, pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the Code)
(collectively, "Excluded Property"); PROVIDED, FURTHER, however, that (x)
Excluded Property shall not include, any Proceeds of any item of General
Intangibles or any As-extracted Collateral, and (y) any leasehold interest in
Real Property or item of General Intangibles that at any time ceases to satisfy
the criteria for Excluded Property (whether as a result of the applicable
Grantor obtaining any necessary consent, any change in any rule of law, statute
or regulation, or otherwise), shall no longer be Excluded Property; PROVIDED,
FURTHER, HOWEVER, Company Collateral shall not include (a) the "Trust Causes of
Action" (as defined in the Plan of Reorganization), (b) the "Rabbi Trust Assets"
(as defined in the Plan of Reorganization), and (c) the "Coal Act Refund" (as
defined in the Plan of Reorganization).
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For avoidance of doubt, leasehold interests in Real Property do not constitute
Company Collateral.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C-1 delivered by the chief financial officer of
Administrative Borrower to Agent.
"CONSOLIDATED FIXED CHARGES" means, with respect to any period,
the sum of Consolidated Interest Expense for such period plus Capital
Expenditures for such period PLUS all scheduled principal payments made on Debt
of JRCC and its Subsidiaries during such period, including, without limitation,
on the Term Loan and any principal outstanding under the Subordinated Debt
Documents, but not including any payment of principal made in connection with
any refinancing thereof.
"CONSOLIDATED INTEREST EXPENSE" means, with respect to any
period, the gross interest expense, whether paid or accrued (including the
interest component of Capital Lease obligations) of JRCC and its Subsidiaries on
a consolidated basis for such period, including, without limitation or
duplication, (i) interest expense in respect of the Advances, the Term Loan, the
Indebtedness under the Subordinated Debt Documents and all other outstanding
Debt, (ii) amortization of the discount or issuance cost of any Debt (including,
without limitation, any original issue discount attributable to any issuance of
debt securities), (iii) commissions, discounts and other fees and charges
payable in connection with letters of credit, (iv) net payments payable in
connection with all Hedge Obligations (including amortization of any discount),
and (v) any interest which is capitalized, all as determined in accordance with
GAAP.
"CONSOLIDATED NET INCOME" means, with respect to any period, the
Net Income of JRCC and its Subsidiaries determined on a consolidated basis for
such period, excluding (i) extraordinary items, (ii) any equity interests of
JRCC or any Subsidiary in the unremitted earnings of any Person that is not a
Subsidiary, except to the extent of the amount of dividends or other
distributions actually paid to JRCC or any of its Subsidiaries by such Person
during such period, (iii) the income of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by that Subsidiary
of its income is not at the time permitted by operation of the terms of its
charter or any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Subsidiary, and (iv) the income (or
loss) of any Person that ceases to be a Subsidiary or who sells or otherwise
disposes of all or substantially all of its assets during period; and including
the income (or loss) of any Person that becomes a Subsidiary of a JRCC, is
merged into or consolidated with JRCC or any of its Subsidiaries or all of
substantially all of whose assets are acquired by JRCC or any of its
Subsidiaries during such period.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any date of
determination, stockholders' equity as determined in accordance with GAAP LESS
the sum of the value, as set forth or reflected on the most recent consolidated
balance sheet of JRCC and its Subsidiaries, prepared in accordance with GAAP,
of:
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(a) All assets which would be treated as intangible assets
for balance sheet presentation purposes under GAAP, including without limitation
goodwill (whether representing the excess of cost over book value of assets
acquired, or otherwise), trademarks, tradenames, copyrights, patents and
technologies, and unamortized debt discount and expense;
(b) To the extent not included in (a) of this definition,
any amount at which shares of Stock of JRCC appear as an asset on the balance
sheet of JRCC and its Subsidiaries;
(c) Loans or advances to stockholders, directors, officers
or employees; and
(d) To the extent not included in (a) of this definition,
deferred expenses.
For purposes of this definition, coal rights shall be deemed to be tangible
property.
"CONSOLIDATED TOTAL DEBT" means, at any date of determination,
the Debt of JRCC and its Subsidiaries, determined on a consolidated basis as of
such date in accordance with GAAP.
"CONSOLIDATED TOTAL EBITDA" means, with respect to any period,
as to JRCC and its Subsidiaries determined on a consolidated basis and in
accordance with GAAP, without duplication, the sum of (a) Consolidated Net
Income for such period, PLUS (b) Consolidated Interest Expense (to the extent
subtracted from Consolidated Net Income for such period), PLUS (c) Amortization
(to the extent subtracted from Consolidated Net Income for such period), PLUS
(d) Depreciation (to the extent subtracted from Consolidated Net Income for such
period), PLUS (e) depletion (to the extent subtracted from Consolidated Net
Income for such period), PLUS (f) other non-cash expenses (to the extent
subtracted from Consolidated Net Income for such period), PLUS (g) extraordinary
losses (to the extent subtracted from Consolidated Net Income for such period),
PLUS (h) any non-recurring charge or restructuring charge (to the extent
subtracted from Consolidated Net Income), including without limitation, the
uncapitalized restructuring and transaction expenses incurred in connection with
the Bankruptcy Case on or before the first anniversary of the "Effective Date"
of the Plan of Reorganization up to an aggregate amount of such expenses not to
exceed $20,000,000 which, in accordance with GAAP, has been deducted from
operating income, PLUS (i) the cumulative effect of any change in accounting
principles as shown on Borrower's consolidated statement of income for such
period, PLUS or MINUS (j) to the extent included in determining Consolidated Net
Income, provisions for taxes on income for such period (subtract if net benefits
are recognized), MINUS (k) the amount of cash expended in such period in respect
of any amount which, under clauses (f) through (h) above, was added back in
determining Consolidated Total EBITDA for such or any prior period (other than
cash restructuring and transaction expenses incurred in connection with the
Bankruptcy Case through the first anniversary of the "Effective Date" of the
Plan of Reorganization in an aggregate amount not to exceed $20,000,000), and
PLUS the (l) Synfuel EBITDA Adjustment.
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"CONTROL AGREEMENT" means a control agreement, in form and
substance reasonably satisfactory to Agent, executed and delivered by a Company,
Agent, and the applicable securities intermediary (with respect to a Securities
Account) or bank (with respect to a Deposit Account).
"COPYRIGHT SECURITY AGREEMENT" means a copyright security
agreement executed and delivered by each Company and Agent, the form and
substance of which is reasonably satisfactory to Agent.
"DAILY BALANCE" means, as of any date of determination and with
respect to any Obligation, the amount of such Obligation owed at the end of such
day.
"DEBT" of any Person, means at any date, without duplication,
Indebtedness of such Person.
"DEFAULT" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"DEFAULTING LENDER" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
"DEFAULTING LENDER RATE" means (a) for the first 3 days from and
after the date the relevant payment is due, the Base Rate, and (b) thereafter,
the interest rate then applicable to Advances that are Base Rate Loans
(inclusive of the Base Rate Margin applicable thereto).
"DEPRECIATION" means for any period the sum of all depreciation
expenses of JRCC and its Subsidiaries for such period, as determined in
accordance with GAAP.
"DEPOSIT ACCOUNT" means any deposit account (as that term is
defined in the Code).
"DESIGNATED ACCOUNT" means the Deposit Account of Administrative
Borrower identified on SCHEDULE D-1.
"DESIGNATED ACCOUNT BANK" has the meaning ascribed thereto on
SCHEDULE D 1.
"DILUTION" means, as of any date of determination, a percentage,
based upon the experience of the immediately prior 12 months, that is the result
of dividing the Dollar amount of (a) bad debt write-downs, discounts,
advertising allowances, credits, or other dilutive items with respect to
Borrowers' Accounts during such period, by (b) Borrowers' xxxxxxxx with respect
to Accounts during such period.
"DILUTION RESERVE" means, as of any date of determination, an
amount sufficient to reduce the advance rate against Eligible Accounts by 1
percentage point for each percentage point by which Dilution is in excess of 5%.
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"DISBURSEMENT LETTER" means an instructional letter executed and
delivered by Borrowers to Agent regarding the extensions of credit to be made on
the Closing Date, the form and substance of which is satisfactory to Agent.
"DOLLARS" or "$" means United States dollars.
"ELIGIBLE ACCOUNTS" means those Accounts created by the
Companies in the ordinary course of its business, that arise out of its sale of
coal or its sale of, or providing services with respect to, synthetic fuel, that
comply with each of the representations and warranties respecting Eligible
Accounts made in the Loan Documents, and that are not excluded as ineligible by
virtue of one or more of the excluding criteria set forth below; PROVIDED,
HOWEVER, that such criteria may be revised from time to time by Agent in Agent's
Permitted Discretion to address the results of any audit performed by Agent from
time to time after the Closing Date. In determining the amount to be included,
Eligible Accounts shall be calculated net of customer deposits and unapplied
cash. Eligible Accounts shall not include the following:
(a) Accounts that the Account Debtor has failed to pay
within 90 days of original invoice date or within 60 days of due date, or
Accounts with selling terms of more than 30 days,
(b) Accounts owed by an Account Debtor (or its Affiliates)
where 50% or more of all Accounts owed by that Account Debtor (or its
Affiliates) are deemed ineligible under clause (a) above,
(c) Accounts with respect to which the Account Debtor is an
Affiliate of any Company or an employee or agent of any Company or any Affiliate
of any Company,
(d) Accounts arising in a transaction wherein goods are
placed on consignment or are sold pursuant to a guaranteed sale, a sale or
return, a sale on approval, a xxxx and hold, or any other terms by reason of
which the payment by the Account Debtor may be conditional,
(e) Accounts that are not payable in Dollars or Accounts
that are not evidenced by an invoice in the amount of such Accounts (except for
Premium Grade Accounts),
(f) Accounts with respect to which the Account Debtor either
(i) does not maintain its chief executive office in the United States or
Ontario, Canada, or (ii) is not organized under the laws of the United States or
any state thereof or under the laws of Ontario, Canada, or (iii) is the
government of any foreign country or sovereign state, or of any state, province,
municipality, or other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof, unless (y) the
Account is supported by an irrevocable letter of credit reasonably satisfactory
to Agent (as to form, substance, and issuer or domestic confirming bank) that
has been delivered to Agent and is
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directly drawable by Agent, or (z) the Account is covered by credit insurance in
form, substance, and amount, and by an insurer, reasonably satisfactory to
Agent,
(g) Accounts with respect to which the Account Debtor is
either (i) the United States or any department, agency, or instrumentality of
the United States (exclusive, however, of Accounts with respect to which the
applicable Company has complied, to the reasonable satisfaction of Agent, with
the Assignment of Claims Act, 31 USC ss. 3727), or (ii) any state of the United
States which, in accordance with its laws, requires certain governmental
approvals prior to a Person taking a security interest in Accounts owing by such
state (exclusive, however, of Accounts with respect to which the applicable
Company has complied, to the reasonable satisfaction of Agent, with such laws),
(h) Accounts with respect to which the Account Debtor is a
creditor of any Company, has or has asserted a right of setoff, or has disputed
its obligation to pay all or any portion of the Account, to the extent of such
credit, claim, right of setoff, or dispute,
(i) Accounts with respect to an Account Debtor whose total
obligations owing to the Companies exceed 20% (such percentage, as applied to a
particular Account Debtor, being subject to reduction by Agent in its Permitted
Discretion if the creditworthiness of such Account Debtor materially
deteriorates) of all Eligible Accounts (except with respect to up to six Account
Debtors specified by Administrative Borrower and acceptable to Agent in its
Permitted Discretion, in which case the total obligations of any such specified
Account Debtor shall not exceed 35% (such percentage, as applied to a particular
Account Debtor, being subject to reduction by Agent in its Permitted Discretion
if the creditworthiness of such Account Debtor materially deteriorates) of all
Eligible Accounts and the total obligations of any three such specified Account
Debtors shall not exceed 90% of all Eligible Accounts), to the extent of the
obligations owing by such Account Debtor in excess of such percentage; PROVIDED,
HOWEVER, that, in each case, the amount of Eligible Accounts that are excluded
because they exceed the foregoing percentage shall be determined by Agent based
on all of the otherwise Eligible Accounts prior to giving effect to any
eliminations based upon the foregoing concentration limit,
(j) Accounts with respect to which the Account Debtor is
subject to an Insolvency Proceeding, is not Solvent, has gone out of business,
or as to which a Company has received notice of an imminent Insolvency
Proceeding or a material impairment of the financial condition of such Account
Debtor,
(k) Accounts with respect to which the Account Debtor is
located in a state or jurisdiction (e.g., New Jersey, Minnesota, and West
Virginia) that requires, as a condition to access to the courts of such
jurisdiction, that a creditor qualify to transact business, file a business
activities report or other report or form, or take one or more other actions,
unless the applicable Company has so qualified, filed such reports or forms, or
taken such actions (and, in each case, paid any required fees or other charges),
except to the extent that such Company may qualify subsequently as a foreign
entity authorized to transact business in such state or jurisdiction and gain
access to such courts, without incurring any cost or penalty
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reasonably viewed by Agent to be significant in amount, and such later
qualification cures any access to such courts to enforce payment of such
Account,
(l) Accounts, the collection of which, Agent, in its
Permitted Discretion, believes to be doubtful by reason of the Account Debtor's
financial condition,
(m) Accounts that are not subject to a valid and perfected
first priority Agent's Lien, subject only to Permitted Liens,
(n) Accounts with respect to which (i) the goods giving rise
to such Account have not been shipped and billed to the Account Debtor, or (ii)
the services giving rise to such Account have not been performed and billed to
the Account Debtor, or
(o) Accounts that represent the right to receive progress
payments or other advance xxxxxxxx that are due prior to the completion of
performance by the applicable Borrower of the subject contract for goods or
services.
"ELIGIBLE INVENTORY" means Inventory of the Companies consisting
of goods held for sale in the ordinary course of the Companies' business, that
complies with each of the representations and warranties respecting Eligible
Inventory made in the Loan Documents, and that is not excluded as ineligible by
virtue of one or more of the excluding criteria set forth below; provided,
however, that such criteria may be revised from time to time by Agent in Agent's
Permitted Discretion to address the results of any audit or appraisal performed
by Agent from time to time after the Closing Date. In determining the amount to
be so included, Inventory shall be valued at the lower of cost or market on a
basis consistent with the Companies' historical accounting practices. An item of
Inventory shall not be included in Eligible Inventory if:
(a) a Company does not have good, valid, and marketable
title thereto,
(b) such Inventory does not consist of clean or raw coal
extracted from a mine,
(c) it is not located at one of the locations in the
continental United States set forth on SCHEDULE E-1 (or in-transit from one such
location to another such location),
(d) it is located on real property leased by a Borrower or
in a contract warehouse, in each case, unless either it is subject to a
Collateral Access Agreement executed by the lessor, or warehouseman, as the case
may be, or the Agent has established a reserve against the Borrowing Base in an
amount not to exceed 4 months rent under such lease or warehouse agreement
(provided, that no such reserve shall be established for the failure to obtain
an particular Collateral Access Agreement if Companies have used their
commercially reasonable efforts to obtain such Collateral Access Agreement), and
unless it is segregated or otherwise separately identifiable from goods of
others, if any, stored on the premises,
(e) it is not subject to a valid and perfected first
priority Agent's Lien, subject only to Permitted Liens,
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(f) it consists of goods returned or rejected by a Company's
customers,
(g) it is not of good and merchantable quality, or is not
free from known defects (other than impurities arising naturally, to the extent
such impurities do not materially hinder the Companies from selling such
Inventory in the ordinary course of their business), or
(h) it consists of goods that are obsolete or slow moving,
restrictive or custom items, or goods that constitute spare parts, packaging and
shipping materials, supplies used or consumed in a Borrower's business, xxxx and
hold goods, defective goods, "seconds," or Inventory acquired on consignment.
"ELIGIBLE TRANSFEREE" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $250,000,000, (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development or a political subdivision of any such country and
which has total assets in excess of $250,000,000, provided that such bank is
acting through a branch or agency located in the United States, (c) a finance
company, insurance company, or other financial institution or fund that is
engaged in making, purchasing, or otherwise investing in commercial loans in the
ordinary course of its business and having (together with its Affiliates) total
assets in excess of $250,000,000, (d) any Affiliate (other than individuals) of
a Lender and any Lender's Related Funds, (e) so long as no Event of Default has
occurred and is continuing, any other Person approved by Agent and
Administrative Borrower (which approval of Administrative Borrower shall not be
unreasonably withheld, delayed, or conditioned), and (f) during the continuation
of an Event of Default, any other Person approved by Agent.
"ENVIRONMENTAL ACTIONS" means any complaint, summons, citation,
notice, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter, or other communication from any
Governmental Authority, or any third party involving violations of Environmental
Laws or releases of Hazardous Materials from (a) any assets, properties, or
businesses of any Company, or any of their predecessors in interest, (b) from
adjoining properties or businesses, or (c) from or onto any facilities which
received Hazardous Materials generated by any Company, or any of their
predecessors in interest.
"ENVIRONMENTAL LAW" means any applicable federal, state,
provincial, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy or
rule of common law now or hereafter in effect and in each case as amended, or
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, in each case, to the extent
binding on any Company, relating to the environment, the effect of the
environment on employee health, or Hazardous Materials, including the
Comprehensive Environmental Response Compensation and Liability Act, 42 USC
ss.9601 ET SEQ. ("CERCLA"); the Resource Conservation and Recovery Act, 42 USC
ss.6901 ET SEQ. ("RCRA"); the Federal Water Pollution Control Act, 33 USC ss.
1251 ET SEQ; the Toxic Substances Control Act, 15
-16-
USC ss. 2601 ET SEQ; the Clean Air Act, 42 USC ss. 7401 ET SEQ.; the Safe
Drinking Water Act, 42 USC ss. 3803 ET SEQ.; the OIL Pollution Act of 1990, 33
USC ss. 2701 ET SEQ.; the Emergency Planning and the Community Right-to-Know Act
of 1986, 42 USC ss. 11001 ET SEQ.; the Hazardous Material Transportation Act, 49
USC ss. 1801 ET SEQ.; and the OccupationAL Safety and Health Act, 29 USC ss.651
ET SEQ. (to the extent it regulates occupational exposure to Hazardous
Materials); any state and local or foreign counterparts or equivalents, in each
case as amended from time to time.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities,
monetary obligations, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including all reasonable fees, disbursements
and expenses of counsel, experts, or consultants, and costs of investigation and
feasibility studies), fines, penalties, sanctions, and interest incurred as a
result of any claim or demand, or Remedial Action required, by any Governmental
Authority or any third party, and which relate to any Environmental Action.
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"EQUIPMENT" means equipment (as that term is defined in the
Code), and includes machinery, machine tools, motors, furniture, furnishings,
fixtures, vehicles (including motor vehicles), computer hardware, tools, parts,
and goods (other than consumer goods, farm products, or Inventory), wherever
located, including all attachments, accessories, accessions, replacements,
substitutions, additions, and improvements to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA AFFILIATE" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Company under IRC Section 414(b), (b) any trade or business subject to ERISA
whose employees are treated as employed by the same employer as the employees of
a Company under IRC Section 414(c), (c) solely for purposes of Section 302 of
ERISA and Section 412 of the IRC, any organization subject to ERISA that is a
member of an affiliated service group of which a Company is a member under IRC
Section 414(m), or (d) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any Person subject to ERISA that is a party to an arrangement
with a Company and whose employees are aggregated with the employees of a
Company under IRC Section 414(o).
"EVENT OF DEFAULT" has the meaning set forth in SECTION 8.
"EXCESS AVAILABILITY" means, as of any date of determination,
the amount equal to the sum of Availability and Qualified Cash (excluding
Qualified Cash in the Designated Account), MINUS the aggregate amount, if any,
of all trade payables of Companies more than 60 days past due date and all book
overdrafts of Companies in excess of their
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historical practices with respect thereto, in each case as determined by Agent
in its Permitted Discretion.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as in
effect from time to time.
"EXISTING LENDER" means Wachovia Bank, National Association
("WACHOVIA"), in its capacity as Agent under that certain Secured Super-Priority
Debtor-in-Possession Revolving Credit Agreement dated as of March 27, 2003,
among the Administrative Borrower, the "Lenders" party thereto and Wachovia, as
agent.
"EXTRAORDINARY RECEIPTS" means any Collections received by a
Company not in the ordinary course of business (and not consisting of proceeds
described in SECTION 2.4(C)(II) hereof), including, (a) foreign, United States,
state or local tax refunds, (b) pension plan reversions, (c) proceeds of
insurance (including proceeds of key man life insurance policies), (d) proceeds
of judgments, proceeds of settlements, or other consideration of any kind in
connection with any cause of action, (e) condemnation awards (and payments in
lieu thereof), (f) indemnity payments, and (g) any purchase price adjustment
received in connection with any purchase agreement.
"FEE LETTER" means that certain fee letter, dated as of even
date herewith, between JRCC and Agent, in form and substance reasonably
satisfactory to Agent.
"FILING AUTHORIZATION LETTER" means a letter duly executed by
each Company authorizing Agent to file appropriate financing statements, in such
office or offices as may be necessary or, in the opinion of Agent, desirable to
perfect the security interests purported to be created by the Loan Documents.
"FIXED ASSET PORTION" means an amount equal to $3,500,000;
PROVIDED, that the Fixed Asset Portion shall be reduced (i) on the first day of
each month (commencing June 1, 2004) by $58,333 until reduced to zero and (ii)
by the amount of any prepayment pursuant to SECTION 2.4(C)(II) or (III)
attributable to proceeds of Equipment.
"FIXED CHARGE COVERAGE RATIO" means, with respect to any period,
the ratio of the sum of Consolidated Total EBITDA for such period to
Consolidated Fixed Charges for such period.
"FUNDING DATE" means the date on which a Borrowing occurs.
"FUNDING LOSSES" has the meaning set forth in SECTION
2.13(B)(II).
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"GENERAL INTANGIBLES" means general intangibles (as that term is
defined in the Code), including payment intangibles, contract rights, rights to
payment, rights arising under common law, statutes, or regulations, choses or
things in action, goodwill, patents, trade
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names, trade secrets, trademarks, servicemarks, copyrights, blueprints,
drawings, purchase orders, customer lists, monies due or recoverable from
pension funds, route lists, rights to payment and other rights under any royalty
or licensing agreements, infringement claims, computer programs, information
contained on computer disks or tapes, software, literature, reports, catalogs,
insurance premium rebates, tax refunds, and tax refund claims and any other
personal property other than Accounts, Deposit Accounts, goods, Investment
Property, and Negotiable Collateral.
"GOVERNING DOCUMENTS" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"GOVERNMENTAL AUTHORITY" means any federal, state, local, or
other governmental or administrative body, instrumentality, board, department,
or agency or any court, tribunal, administrative hearing body, arbitration
panel, commission, or other similar dispute-resolving panel or body.
"GUARANTY" means that certain general continuing guaranty
executed and delivered by each Credit Party in favor of Agent, in form and
substance reasonably satisfactory to Agent.
"HAZARDOUS MATERIALS" means (a) substances that are defined or
listed in, or otherwise classified pursuant to, any applicable laws or
regulations as "hazardous substances," "hazardous materials," "hazardous
wastes," "toxic substances," or any other formulation intended to define, list,
or classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"HEDGE AGREEMENT" means any and all agreements, or documents now
existing or hereafter entered into by a Company that provide for an interest
rate, credit, commodity or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar transactions,
for the purpose of hedging a Company's exposure to fluctuations in interest or
exchange rates, loan, credit exchange, security or currency valuations or
commodity prices.
"HOLDOUT LENDER" has the meaning set forth in SECTION 15.2(A).
"INDEBTEDNESS" means (a) all obligations for borrowed money, (b)
all obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect of letters of
credit, bankers acceptances, or other financial products, (c) all obligations as
a lessee under Capital Leases, (d) all
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obligations or liabilities of others secured by a Lien on any asset of a Person
or its Subsidiaries, irrespective of whether such obligation or liability is
assumed, (e) all obligations to pay the deferred purchase price of assets (other
than trade payables incurred in the ordinary course of business and repayable in
accordance with customary trade practices), (f) all obligations owing under
Hedge Agreements, and (g) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person that constitutes
Indebtedness under any of clauses (a) through (f) above.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION
11.3.
"INDEMNIFIED PERSON" has the meaning set forth in SECTION 11.3.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"INTERCOMPANY SUBORDINATION AGREEMENT" means a subordination
agreement executed and delivered by Companies and Agent, the form and substance
of which is reasonably satisfactory to Agent.
"INTERCREDITOR AGREEMENT" means the Subordination and
Intercreditor Agreement of even date herewith among Companies, the agent for the
holders of the Subordinated Debt, and Agent.
"INTEREST PERIOD" means, with respect to each LIBOR Rate Loan, a
period commencing on the date of the making of such LIBOR Rate Loan (or the
continuation of a LIBOR Rate Loan or the conversion of a Base Rate Loan to a
LIBOR Rate Loan) and ending 1, 2, or 3 months thereafter; PROVIDED, HOWEVER,
that (a) if any Interest Period would end on a day that is not a Business Day,
such Interest Period shall be extended (subject to clauses (c)-(e) below) to the
next succeeding Business Day, (b) interest shall accrue at the applicable rate
based upon the LIBOR Rate from and including the first day of each Interest
Period to, but excluding, the day on which any Interest Period expires, (c) any
Interest Period that would end on a day that is not a Business Day shall be
extended to the next succeeding Business Day unless such Business Day falls in
another calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (d) with respect to an Interest Period that begins on
the last 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 Interest
Period), the Interest Period shall end on the last Business Day of the calendar
month that is 1, 2, or 3 months after the date on which the Interest Period
began, as applicable, and (e) Borrowers (or Administrative Borrower on behalf
thereof) may not elect an Interest Period which will end after the Maturity
Date.
"INVENTORY" means inventory (as that term is defined in the
Code).
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"INVESTMENT" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising in the
ordinary course of business consistent with past practice), purchases or other
acquisitions of Indebtedness, Stock, or all or substantially all of the assets
of such other Person (or of any division or business line of such other Person),
and any other items that are or would be classified as investments on a balance
sheet prepared in accordance with GAAP.
"INVESTMENT PROPERTY" means investment property (as that term is
defined in the Code).
"IRC" means the Internal Revenue Code of 1986, as in effect from
time to time.
"ISSUING LENDER" means WFF or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent, agrees, in
such Lender's sole discretion, to become an Issuing Lender for the purpose of
issuing L/Cs or L/C Undertakings pursuant to SECTION 2.12.
"L/C" has the meaning set forth in SECTION 2.12(A).
"L/C DISBURSEMENT" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C UNDERTAKING" has the meaning set forth in SECTION 2.12(A).
"LENDER" and "LENDERS" have the respective meanings set forth in
the preamble to this Agreement, and shall include any other Person made a party
to this Agreement in accordance with the provisions of SECTION 14.1.
"LENDER GROUP" means, individually and collectively, each of the
Lenders (including the Issuing Lender) and Agent.
"LENDER GROUP EXPENSES" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by a Company under
any of the Loan Documents that are paid, advanced, or incurred by the Lender
Group, (b) fees or charges paid or incurred by Agent in connection with the
Lender Group's transactions with any Company, including, fees or charges for
photocopying, notarization, couriers and messengers, telecommunication, public
record searches (including tax lien, litigation, and UCC searches and including
searches with the patent and trademark office, the copyright office, or the
department of motor vehicles), filing, recording, publication, appraisal
(including periodic collateral appraisals or business valuations to the extent
of the fees and charges (and up to the amount of any limitation) contained in
this Agreement, real estate surveys, real estate title policies and
endorsements, and environmental audits, (c) costs and expenses incurred by Agent
in the disbursement of funds to or for the account of Borrowers or other members
-21-
of the Lender Group (by wire transfer or otherwise), (d) charges paid or
incurred by Agent resulting from the dishonor of checks, (e) reasonable costs
and expenses paid or incurred by the Lender Group to correct any default or
enforce any provision of the Loan Documents, or in gaining possession of,
maintaining, handling, preserving, storing, shipping, selling, preparing for
sale, or advertising to sell the Collateral, or any portion thereof,
irrespective of whether a sale is consummated, (f) audit fees and expenses of
Agent related to audit examinations of the Books to the extent of the fees and
charges (and up to the amount of any limitation) contained in this Agreement,
(g) reasonable costs and expenses of third party claims or any other suit paid
or incurred by the Lender Group in enforcing or defending the Loan Documents or
in connection with the transactions contemplated by the Loan Documents or the
Lender Group's relationship with any Company, (h) Agent's and each Lender's
reasonable costs and expenses (including attorneys fees) incurred in advising,
structuring, drafting, reviewing, administering, syndicating, or amending the
Loan Documents, and (i) Agent's and each Lender's reasonable costs and expenses
(including attorneys, accountants, consultants, and other advisors fees and
expenses) incurred in terminating, enforcing (including attorneys, accountants,
consultants, and other advisors fees and expenses incurred in connection with a
"workout," a "restructuring," or an Insolvency Proceeding concerning any Company
or in exercising rights or remedies under the Loan Documents), or defending the
Loan Documents, irrespective of whether suit is brought, or in taking any
Remedial Action concerning the Collateral.
"LENDER-RELATED PERSON" means, with respect to any Lender, such
Lender, together with such Lender's Affiliates, officers, directors, employees,
attorneys, and agents.
"LETTER OF CREDIT" means an L/C or an L/C Undertaking, as the
context requires.
"LETTER OF CREDIT USAGE" means, as of any date of determination,
the aggregate undrawn amount of all outstanding Letters of Credit.
"LEVERAGE RATIO" means, as of any date, the ratio of (a)
Consolidated Total Debt as of such date to (b) Consolidated Total EBITDA for 4
fiscal quarters ending on or immediately prior to such date.
"LIBOR DEADLINE" has the meaning set forth in SECTION
2.13(B)(I).
"LIBOR NOTICE" means a written notice in the form of EXHIBIT
L-1.
"LIBOR OPTION" has the meaning set forth in SECTION 2.13(A).
"LIBOR RATE" means, for each Interest Period for each LIBOR Rate
Loan, the rate per annum determined by Agent (rounded upwards, if necessary, to
the next 1/100%) by DIVIDING (a) the Base LIBOR Rate for such Interest Period,
by (b) 100% MINUS the Reserve Percentage. The LIBOR Rate shall be adjusted on
and as of the effective day of any change in the Reserve Percentage.
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"LIBOR RATE LOAN" means each portion of an Advance or the Term
Loan that bears interest at a rate determined by reference to the LIBOR Rate.
"LIBOR RATE MARGIN" means 2.50 percentage points.
"LIBOR RATE TERM LOAN MARGIN" means 5.25 percentage points.
"LIEN" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset,
irrespective of whether (a) such interest is based on the common law, statute,
or contract, (b) such interest is recorded or perfected, and (c) such interest
is contingent upon the occurrence of some future event or events or the
existence of some future circumstance or circumstances. Without limiting the
generality of the foregoing, the term "Lien" includes the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also includes reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"LOAN ACCOUNT" has the meaning set forth in SECTION 2.10.
"LOAN DOCUMENTS" means this Agreement, the Aircraft Mortgage,
the Bank Product Agreements, the Cash Management Agreements, the Control
Agreements, the Copyright Security Agreement, the Disbursement Letter, the Fee
Letter, the Guaranty, the Intercompany Subordination Agreement, the Letters of
Credit, the Mortgages, the Stock Pledge Agreement, any note or notes executed by
a Company in connection with this Agreement and payable to a member of the
Lender Group, and any other agreement entered into, now or in the future, by any
Company and the Lender Group in connection with this Agreement.
"MAINTENANCE CAPITAL EXPENDITURES" means, with respect to any
Person for any period, the aggregate of all expenditures incurred (whether paid
in cash or accrued as a liability) during such period by such Person and its
Subsidiaries that are capital expenditures as determined in accordance with
GAAP, whether such expenditures are paid in cash or financed; PROVIDED, that
Maintenance Capital Expenditures shall exclude Mine No. 15 Capital Expenditures.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change in
the business, prospects, operations, results of operations, assets, liabilities
or condition (financial or otherwise) of the Companies, taken as a whole, (b) a
material impairment of the ability of the Companies, taken as a whole, to
perform their obligations under the Loan Documents to which it is a party or of
the Lender Group's ability to enforce the Obligations or realize upon the
Collateral, or (c) a material impairment of the enforceability or priority of
the Agent's Liens with respect to the Collateral as a result of an action or
failure to act on the part of a Company.
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"MATURITY DATE" has the meaning set forth in SECTION 3.4.
"MAXIMUM REVOLVER AMOUNT" means $30,000,000, as such amount may
be permanently reduced by Administrative Borrower pursuant to SECTION 2.1(E).
"MINE NO. 15 CAPITAL EXPENDITURES" means, with respect to any
Person for any period, the aggregate of all expenditures incurred (whether paid
in cash or accrued as a liability) in connection with Mine No. 15 during such
period by such Person and its Subsidiaries that are capital expenditures as
determined in accordance with GAAP, whether such expenditures are paid in cash
or financed.
"XXXXXX XXXXXXX" means Xxxxxx Xxxxxxx Senior Funding, Inc., a
Delaware corporation.
"MORTGAGES" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by a
Company in favor of Agent, in form and substance reasonably satisfactory to
Agent, that encumber the Real Property Collateral.
"NEGOTIABLE COLLATERAL" means letters of credit, letter of
credit rights, instruments, promissory notes, drafts, documents, and chattel
paper (including electronic chattel paper and tangible chattel paper).
"NET CASH PROCEEDS" means, (i) with respect to any sale or
disposition by any Company of property or assets, the amount of Collections
received (directly or indirectly) from time to time (whether as initial
consideration or through the payment of deferred consideration) by or on behalf
of such Person, in connection therewith after deducting therefrom only (A) the
amount of any Indebtedness secured by any Permitted Lien on any asset (other
than (1) Indebtedness owing to Agent or any Lender under this Agreement or the
other Loan Documents and (2) Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection with such
disposition, (B) reasonable expenses related thereto incurred by such Person in
connection therewith, and (C) taxes paid or payable to any taxing authorities by
such Person in connection therewith and (ii) with respect to the issuance or
incurrence of any Indebtedness by any Company, or the sale or issuance by any
Person of any shares of its Stock, the aggregate amount of cash received
(directly or indirectly) from time to time (whether as initial consideration or
through the payment or disposition of deferred compensation) by or on behalf of
such Person in connection therewith, after deducting therefrom only (A)
reasonable expenses related thereto incurred by such Person in connection
therewith, (B) transfer taxes paid by such Person in connection therewith and
(C) net income taxes to be paid in connection therewith (after taking into
account any tax credits or deductions and any tax sharing arrangements); in each
case of clause (i) and (ii) to the extent, but only to the extent, that the
amounts so deducted are (1) actually paid to a Person that, except in the case
of reasonable out-of-pocket expenses, is not an Affiliate of such Person or any
of its Subsidiaries and (2) properly attributable to such transaction or to the
asset that is the subject thereof.
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"NET INCOME" means, with respect to any period, for any Person,
the aggregate amount of net income of such Person, after taxes, for such period,
as determined in accordance with GAAP.
"NET LIQUIDATION PERCENTAGE" means the percentage of the book
value of Borrowers' Inventory that is estimated to be recoverable in an orderly
liquidation of such Inventory net of all associated costs and expenses of such
liquidation, such percentage to be as determined from time to time by a
qualified appraisal company selected by Agent.
"OBLIGATIONS" means (a) all loans, Advances (including the Term
Loan), debts, principal, interest (including any interest that, but for the
commencement of an Insolvency Proceeding, would have accrued), contingent
reimbursement obligations with respect to outstanding Letters of Credit,
premiums, liabilities (including all amounts charged to Borrowers' Loan Account
pursuant hereto), obligations (including indemnification obligations), fees
(including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that, but for the commencement of
an Insolvency Proceeding, would have accrued), lease payments, guaranties,
covenants, and duties of any kind and description owing by Companies to the
Lender Group pursuant to or evidenced by the Loan Documents and irrespective of
whether for the payment of money, whether direct or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, and
including all interest not paid when due and all Lender Group Expenses that
Companies are required to pay or reimburse by the Loan Documents, by law, or
otherwise, and (b) all Bank Product Obligations. Any reference in this Agreement
or in the Loan Documents to the Obligations shall include all extensions,
modifications, renewals, or alterations thereof, both prior and subsequent to
any Insolvency Proceeding.
"ORIGINATING LENDER" has the meaning set forth in SECTION
14.1(E).
"OVERADVANCE" has the meaning set forth in SECTION 2.5.
"PARTICIPANT" has the meaning set forth in SECTION 14.1(E).
"PAY-OFF LETTER" means a letter, in form and substance
satisfactory to Agent, from Existing Lender to Agent respecting the amount
necessary to repay in full all of the obligations of all of the Companies owing
to Existing Lender and obtain a release of all of the Liens existing in favor of
Existing Lender in and to the assets of all of the Companies, other than with
respect to the Existing Lender's Lien on the Companies' cash in the amount of
$8,258,205.30 currently held by Existing Lender as cash collateral for the
Companies' obligations relating to the Wachovia L/Cs.
"PERMITTED CORPORATE TRANSACTIONS" means (a) the merger of
Processing into Leeco, with Leeco being the surviving entity; (b) Eolia into
Export or BDDC, with Export or BDDC being the surviving entity; (c) the merger
of Export into BDDC, with BDDC being the surviving entity; (d) the merger of
Xxxxxxxxxxx into Blue Diamond, with Blue Diamond being the surviving entity; (e)
the merger of BPC into SCCI, with SCCI being the surviving entity; (f) the
merger of JCPC into XxXxx, with XxXxx being the surviving entity; (g) the
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merger of Primary into XxXxx, with XxXxx being the surviving entity; (h) the
merger of Xxxxxxx into Xxxx, with Xxxx being the surviving entity; (i) the
merger of BDDC into JRCC, with JRCC being the surviving entity; (j) the merger
of SCCI into Xxxxxxx, with Xxxxxxx being the surviving entity; (k) the merger of
Xxxxx Creek and Pike into JCEC, with JCEC being the surviving entity; and (l)
the merger of JCEC into JRCC, with JRCC being the surviving entity.
"PERMITTED DISCRETION" means a determination made in the
exercise of reasonable (from the perspective of a secured asset-based lender)
business judgment.
"PERMITTED DISPOSITIONS" means (a) sales or other dispositions
of Equipment that is substantially worn, damaged, or obsolete in the ordinary
course of business in an aggregate amount not to exceed $1,000,000 in any
calendar year, (b) sales of Inventory to buyers in the ordinary course of
business, (c) the use or transfer of money or Cash Equivalents in a manner that
is not prohibited by the terms of this Agreement or the other Loan Documents,
(d) the licensing, on a non-exclusive basis, of patents, trademarks, copyrights,
and other intellectual property rights in the ordinary course of business, (e)
so long as no Event of Default exists, the sale or transfer of real or personal
property from one Company to another Company consistent with past practices, (f)
dispositions made pursuant to the Real Property Transaction, and (g)
dispositions made pursuant to a Permitted Corporate Transaction.
"PERMITTED HOLDERS" means the Persons listed on SCHEDULE P-2.
"PERMITTED INVESTMENTS" means (a) Investments in cash and Cash
Equivalents, (b) Investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, (d) advances by a Company to another Company, and (e)
Investments received in settlement of amounts due to a Company effected in the
ordinary course of business or owing to a Company as a result of Insolvency
Proceedings involving an Account Debtor or upon the foreclosure or enforcement
of any Lien in favor of a Company.
"PERMITTED LIENS" means (a) Liens held by Agent, (b) Liens for
unpaid taxes that either (i) are not yet delinquent, or (ii) do not constitute
an Event of Default hereunder and are the subject of Permitted Protests, (c)
Liens set forth on SCHEDULE P-1, (d) the interests of lessors under operating
leases, (e) purchase money Liens or the interests of lessors under Capital
Leases to the extent that such Liens or interests secure Permitted Purchase
Money Indebtedness and so long as such Lien attaches only to the asset purchased
or acquired and the proceeds thereof, (f) Liens arising by operation of law in
favor of warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of Companies' business and not in
connection with the borrowing of money, and which Liens either (i) are for sums
not yet delinquent, or (ii) are the subject of Permitted Protests, (g) Liens on
amounts deposited in connection with obtaining worker's compensation or other
unemployment insurance, or obtaining land reclamation or other environmental
bonds to the extent related to Real Property, (h) Liens on amounts deposited in
connection with the making or entering into of bids, tenders, or leases in the
ordinary
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course of business and not in connection with the borrowing of money, (i) Liens
on amounts deposited as security for surety or appeal bonds in connection with
obtaining such bonds in the ordinary course of business, (j) Liens resulting
from any judgment or award that is not an Event of Default hereunder, (k) with
respect to any Real Property, easements, rights of way, and zoning restrictions
that do not materially interfere with or impair the use or operation thereof,
and (l) Liens under the Subordinated Debt Documents to the extent subordinated
to Agent's Liens pursuant to the Intercreditor Agreement.
"PERMITTED PROTEST" means the right of any Company to protest
any Lien (other than any Lien that secures the Obligations), taxes (other than
payroll taxes or taxes that are the subject of a United States federal tax
lien), or rental payment, provided that (a) a reserve with respect to such
obligation is established on the Books in such amount as is required under GAAP,
(b) any such protest is instituted promptly and prosecuted diligently by any
Company in good faith, and (c) Agent is reasonably satisfied that, while any
such protest is pending, there will be no impairment of the enforceability,
validity, or priority of any of the Agent's Liens.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means, as of any date of
determination, Purchase Money Indebtedness incurred after the Closing Date in an
aggregate amount outstanding at any one time not in excess of $5,000,000.
"PERSON" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
"PLAN OF REORGANIZATION" means that certain Debtors' Second
Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code,
dated April 20, 2004, filed with the Bankruptcy Court in Case No. 303-04095
(jointly administered).
"POST-CLOSING RESERVE" means a reserve in the amount of
Post-Closing Reserve Amount which shall be established on the 30th day following
the Closing Date; PROVIDED, that such reserve shall not be established (or if
established shall be released) if Agent has received acknowledgment copies of
its financing statements (which financing statements shall (i) contain the
record owners and legal descriptions for the Real Property which contain 90% of
the coal reserves owned or leased by the Companies which the Companies mine or
intend to mine and (ii) be in form and substance reasonably satisfactory to
Agent) filed in the appropriate jurisdictions covering As-extracted Collateral
of each Company.
"POST-CLOSING RESERVE AMOUNT" means, on the Closing Date, an
amount equal to $500,000; provided, HOWEVER, that to the extent Agent receives
acknowledgement copies of its financing statements from time to time which, in
the aggregate among all such acknowledgement copies, cover more than 67% of the
coal reserves owned or leased by the Companies which the Companies mine or
intend to mine, the $500,000 reserve established above shall be reduced (until
zero) by $21,739.13 for each such percentage point in excess of
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67%; PROVIDED, FURTHER, that all such acknowledgement copies of financing
statements on which any reduction is determined (a) must contain the record
owners and legal descriptions of the Real Property which contain the coal
reserves; (b) must otherwise be in form and substance reasonably satisfactory to
Agent; and (c) must be filed in the appropriate jurisdictions covering
As-extracted Collateral of each Company, as applicable.
"PREMIUM GRADE ACCOUNTS" means any portion of any Account that
relates to an additional amount due from an Account Debtor as a result of a
determination that the coal sold to such Account Debtor is of a grade higher
than that contracted for by such Account Debtor.
"PROJECTIONS" means JRCC's forecasted (a) balance sheets, (b)
profit and loss statements, and (c) cash flow statements, all prepared on a
basis consistent with JRCC's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"PRO RATA SHARE" means, as of any date of determination:
(a) with respect to a Lender's obligation to make Advances
and receive payments of principal, interest, fees, costs, and expenses with
respect thereto, (i) prior to the Revolver Commitments being terminated or
reduced to zero, the percentage obtained by dividing (y) such Lender's Revolver
Commitment, by (z) the aggregate Revolver Commitments of all Lenders, and (ii)
from and after the time that the Revolver Commitments have been terminated or
reduced to zero, the percentage obtained by dividing (y) the aggregate
outstanding principal amount of such Lender's Advances by (z) the aggregate
outstanding principal amount of all Advances,
(b) with respect to a Lender's obligation to participate in
Letters of Credit, to reimburse the Issuing Lender, and to receive payments of
fees with respect thereto, (i) prior to the Revolver Commitments being
terminated or reduced to zero, the percentage obtained by dividing (y) such
Lender's Revolver Commitment, by (z) the aggregate Revolver Commitments of all
Lenders, and (ii) from and after the time that the Revolver Commitments have
been terminated or reduced to zero, the percentage obtained by dividing (y) the
aggregate outstanding principal amount of such Lender's Advances by (z) the
aggregate outstanding principal amount of all Advances,
(c) with respect to a Lender's obligation to make the Term
Loan and receive payments of interest, fees, and principal with respect thereto,
(i) prior to the making of Term Loan, the percentage obtained by dividing (y)
such Lender's Term Loan Commitment, by (z) the aggregate amount of all Lenders'
Term Loan Commitments, and (ii) from and after the making of Term Loan, the
percentage obtained by dividing (y) the principal amount of such Lender's
portion of Term Loan, by (z) the principal amount of Term Loan, and
(d) with respect to all other matters as to a particular
Lender (including the indemnification obligations arising under SECTION 16.7),
the percentage obtained by dividing
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(i) such Lender's Revolver Commitment plus the outstanding principal amount of
such Lender's portion of the Term Loan, by (ii) the aggregate amount of Revolver
Commitments of all Lenders plus the outstanding principal amount of the Term
Loan; PROVIDED, HOWEVER, that in the event the Revolver Commitments have been
terminated or reduced to zero, Pro Rata Share under this clause shall be the
percentage obtained by dividing (A) the outstanding principal amount of such
Lender's Advances plus such Lender's ratable portion of the Risk Participation
Liability with respect to outstanding Letters of Credit plus the outstanding
principal amount of such Lender's portion of the Term Loan, by (B) the
outstanding principal amount of all Advances plus the aggregate amount of the
Risk Participation Liability with respect to outstanding Letters of Credit plus
the outstanding principal amount of the Term Loan.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness (other than the
Obligations, but including Capitalized Lease Obligations), incurred at the time
of, or within 20 days after, the acquisition of any fixed assets for the purpose
of financing all or any part of the acquisition cost thereof.
"QUALIFIED CASH" means, as of any date of determination, the
amount of unrestricted cash and Cash Equivalents of Companies that is in Deposit
Accounts or in Securities Accounts, or any combination thereof, and which such
Deposit Account or Securities Account is the subject of a Control Agreement and
is maintained by a branch office of the bank or securities intermediary located
within the United States.
"REAL PROPERTY" means any estates or interests (including
leasehold interests) in real property now owned or hereafter acquired by any
Company and the improvements thereto.
"REAL PROPERTY COLLATERAL" means all Real Property from time to
time subject to a Mortgage, including without limitation the Real Property
identified on SCHEDULE R-1.
"REAL PROPERTY TRANSACTION" means the sale or transfer within 60
days of the date hereof of all or some portion of the Real Property described on
SCHEDULE K-1 for proceeds of more than $3,000,000 (a) to Kentucky River
Properties LLC or its Affiliates in whole or partial satisfaction of certain
obligations owing by the Companies to Kentucky River Properties LLC or its
Affiliates, and (b) to one or more other Persons, with the proceeds thereof
being paid over to Kentucky River in satisfaction of such obligations.
"RECORD" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"REGISTERED LOAN" has the meaning set forth in SECTION 2.16.
"RELATED FUND" means a fund, money market account, investment
account or other account managed by a Lender or an Affiliate of such Lender or
its investment manager.
"REMEDIAL ACTION" means all actions taken to (a) clean up,
remove, remediate, contain, treat, monitor, assess, evaluate, or in any way
address Hazardous Materials in the
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indoor or outdoor environment, (b) prevent or minimize a release or threatened
release of Hazardous Materials so they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment, (c)
restore or reclaim natural resources or the environment, (d) perform any
pre-remedial studies, investigations, or post-remedial operation and maintenance
activities, or (e) conduct any other actions with respect to Hazardous Materials
authorized by Environmental Laws.
"REPLACEMENT LENDER" has the meaning set forth in SECTION
15.2(A).
"REPORT" has the meaning set forth in SECTION 16.17.
"REQUIRED AVAILABILITY" means that the sum of (a) Excess
Availability, PLUS (b) Qualified Cash wire transferred to Agent exceeds
$10,000,000.
"REQUIRED LENDERS" means Required Revolver Lenders and Required
Term Loan Lenders.
"REQUIRED REVOLVER LENDERS" means, as of any date of
determination, Lenders whose aggregate Pro Rata Shares (calculated under clause
(a) of the definition of Pro Rata Shares) equal or exceed 50.1%.
"REQUIRED TERM LOAN LENDERS" means, as of any date of
determination, Lenders whose aggregate Pro Rata Shares (calculated under clause
(c) of the definition of Pro Rata Shares) equal or exceed 50.1%.
"RESERVE PERCENTAGE" means, on any day, for any Lender, the
maximum percentage prescribed by the Board of Governors of the Federal Reserve
System (or any successor Governmental Authority) for determining the reserve
requirements (including any basic, supplemental, marginal, or emergency
reserves) that are in effect on such date with respect to eurocurrency funding
(currently referred to as "eurocurrency liabilities") of that Lender, but so
long as such Lender is not required or directed under applicable regulations to
maintain such reserves, the Reserve Percentage shall be zero.
"REVOLVER COMMITMENT" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on SCHEDULE C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of SECTION 14.1.
"REVOLVER USAGE" means, as of any date of determination, the sum
of (a) the amount of outstanding Advances, PLUS (b) the amount of the Letter of
Credit Usage.
"RISK PARTICIPATION LIABILITY" means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the
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Underlying Issuer to the extent not reimbursed by Borrowers, whether by the
making of an Advance or otherwise, and (c) all accrued and unpaid interest,
fees, and expenses payable with respect thereto.
"ROLLING FOUR QUARTERS" means, with respect to any date of
determination, the fiscal quarter then ended and the 3 immediately preceding
fiscal quarters considered as a single period.
"SEC" means the United States Securities and Exchange Commission
and any successor thereto.
"SECURITIES ACCOUNT" means a "securities account" as that term
is defined in the Code.
"SETTLEMENT" has the meaning set forth in SECTION 2.3(F)(I).
"SETTLEMENT DATE" has the meaning set forth in SECTION
2.3(F)(I).
"SOLVENT" means, with respect to any Person on a particular
date, that, at fair valuations, the sum of such Person's assets is greater than
all of such Person's debts.
"STOCK" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, 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 SEC under the Exchange Act).
"STOCK PLEDGE AGREEMENT" means a stock pledge agreement, in form
and substance reasonably satisfactory to Agent, executed and delivered by each
Company.
"SUBORDINATED DEBT" means the Indebtedness owing under the
Subordinated Debt Documents.
"SUBORDINATED DEBT DOCUMENTS" means the $75,000,000 Term Loan
Agreement of even date herewith (the "SUBORDINATED LOAN AGREEMENT") among JRCC,
as borrower, the other Companies, as guarantors, the lenders from time to time a
party thereto, and BNY Asset Solutions, LLC, as agent, the "Security Documents"
(as defined in the Subordinated Loan Agreement) and other agreements,
instruments and documents executed in connection therewith.
"SUBSIDIARY" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
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"SUPPORTING OBLIGATION" means a letter-of-credit right or
secondary obligation that supports the payment or performance of an Account,
chattel paper, document, General Intangible, instrument, or Investment Property.
"SWING LENDER" means WFF or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become the Swing Lender under SECTION 2.3(D).
"SWING LOAN" has the meaning set forth in SECTION 2.3(D)(I).
"SYNDICATION AGENT" has the meaning set forth in the preamble to
this Agreement.
"SYNFUEL EBITDA ADJUSTMENT" means the amount, if any, for any
measuring period, that is equal to the product of $291,667 times the number of
full months (not to exceed 12) in each such measuring period that end after the
repeal or expiration of Section 29 of the IRCC ("Credits for producing fuel from
unconventional sources") but prior to December 31, 2007; PROVIDED, that if in
connection with such repeal or expiration, any benefits are enacted or inure in
favor of the Companies, the amount of $291,667 shall be reduced based on good
faith negotiations between the Companies and Required Lenders to take into
account such benefits.
"TAXES" has the meaning set forth in SECTION 16.11.
"TERM LOAN" has the meaning set forth in SECTION 2.2.
"TERM LOAN AMOUNT" means $20,000,000.
"TERM LOAN COMMITMENT" means, with respect to each Lender, its
Term Loan Commitment, and, with respect to all Lenders, their Term Loan
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on SCHEDULE C-1 or in the Assignment
and Acceptance pursuant to which such Lender became a Lender hereunder, as such
amounts may be reduced or increased from time to time pursuant to assignments
made in accordance with the provisions of SECTION 14.1.
"TOTAL COMMITMENT" means, with respect to each Lender, its Total
Commitment, and, with respect to all Lenders, their Total Commitments, in each
case as such Dollar amounts are set forth beside such Lender's name under the
applicable heading on SCHEDULE C-1 attached hereto or on the signature page of
the Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder, as such amounts may be reduced or increased from time to time
pursuant to assignments made in accordance with the provisions of SECTION 14.1.
"UNDERLYING ISSUER" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the benefit of Borrowers.
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"UNDERLYING LETTER OF CREDIT" means a letter of credit that has
been issued by an Underlying Issuer.
"UNITED STATES" means the United States of America.
"VOIDABLE TRANSFER" has the meaning set forth in SECTION 17.6.
"WACHOVIA L/CS" means those letters of credit listed on SCHEDULE
W-1, issued by Wachovia Bank, National Association for the Companies' account,
as the same may be amended, restated, supplemented, or otherwise modified from
time to time.
"XXXXX FARGO" means Xxxxx Fargo Bank, National Association, a
national banking association.
"WFF" means Xxxxx Fargo Foothill, Inc., a California
corporation.
1.2. ACCOUNTING TERMS. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Companies" or the term "JRCC" is used in respect of a financial
covenant or a related definition, it shall be understood to mean JRCC and its
Subsidiaries on a consolidated basis unless the context clearly requires
otherwise.
1.3. CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein, PROVIDED, HOWEVER, that to the extent that the Code is used to
define any term herein and such term is defined differently in different
Articles of the Code, the definition of such term contained in Article 9 shall
govern.
1.4. CONSTRUCTION. Unless the context of this Agreement or any other
Loan Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the terms "includes"
and "including" are not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in the other Loan
Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to the
satisfaction or repayment in full of the Obligations shall mean the repayment in
full in cash (or cash collateralization in accordance with the terms hereof) of
all Obligations other than contingent indemnification Obligations
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and other than any Bank Product Obligations that, at such time, are allowed by
the applicable Bank Product Provider to remain outstanding and are not required
to be repaid or cash collateralized pursuant to the provisions of this
Agreement. Any reference herein to any Person shall be construed to include such
Person's successors and assigns. Any requirement of a writing contained herein
or in the other Loan Documents shall be satisfied by the transmission of a
Record and any Record transmitted shall constitute a representation and warranty
as to the accuracy and completeness of the information contained therein.
1.5. SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1. REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement,
and during the term of this Agreement, each Lender with a Revolver Commitment
agrees (severally, not jointly or jointly and severally) to make advances
("ADVANCES") to Borrowers in an amount at any one time outstanding not to exceed
such Lender's Pro Rata Share of an amount equal TO THE LESSER OF (i) the Maximum
Revolver Amount LESS the Letter of Credit Usage, or (ii) the Borrowing Base LESS
the Letter of Credit Usage.
(b) Anything to the contrary in this SECTION 2.1
notwithstanding, Agent shall have the right to establish, without duplication,
reserves in such amounts, and with respect to such matters, as Agent in its
Permitted Discretion shall deem necessary or appropriate, against the Borrowing
Base, including the Coal Grade Reserve, the Post-Closing Reserve and reserves
with respect to (i) sums that Companies are required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased properties, rents or
other amounts payable under such leases) and have failed to pay under any
Section of this Agreement or any other Loan Document, (ii) amounts estimated by
Agent to be the costs to convert raw coal to clean coal, and (iii) amounts owing
by Companies to any Person to the extent secured by a Lien on, or trust over,
any of the Collateral, which Lien or trust, in the Permitted Discretion of Agent
likely would have a priority superior to the Agent's Liens (such as Liens or
trusts in favor of landlords, warehousemen, carriers, mechanics, materialmen,
laborers, or suppliers, or Liens or trusts for AD VALOREM, excise, sales, or
other taxes where given priority under applicable law) in and to such item of
the Collateral; PROVIDED, that Agent shall not establish a reserve for royalty
payments under mining leases unless such royalty payments are past due. In
addition to the foregoing, Agent shall have the right to have the Borrowers'
Inventory reappraised by a qualified appraisal company selected by Agent from
time to time after the Closing Date on an annual basis for the purpose of
re-determining the Net Liquidation Percentage of Borrowers' Inventory and, as a
result, re-determining the Borrowing Base.
(c) The Lenders with Revolver Commitments shall have no
obligation to make additional Advances hereunder to the extent such additional
Advances would cause the Revolver Usage to exceed the Maximum Revolver Amount.
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(d) Amounts borrowed pursuant to this SECTION 2.1 may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed at
any time during the term of this Agreement.
(e) Administrative Borrower may, without premium or penalty,
permanently reduce the Maximum Revolver Amount to an amount not less than
$25,000,000 upon 5 days prior written notice to Agent so long as after giving
effect to such reduction, the Obligations do not exceed the Maximum Revolver
Amount. Once reduced, the Maximum Revolver Amount may not be increased.
2.2. TERM LOAN. Subject to the terms and conditions of this
Agreement, on the Closing Date each Lender with a Term Loan Commitment agrees
(severally, not jointly or jointly and severally) to make term loans
(collectively, the "TERM LOAN") to Borrowers in an amount equal to such Lender's
Pro Rata Share of the Term Loan Amount. The Term Loan shall be repaid on the
following dates and in the following amounts (each, an "INSTALLMENT PAYMENT"):
=========================== ============================
Date Installment Payment
=========================== ============================
April 1, 2005 $900,000
--------------------------- ----------------------------
July 1, 2005 $900,000
--------------------------- ----------------------------
October 1, 2005 $900,000
--------------------------- ----------------------------
January 1, 2006 $900,000
--------------------------- ----------------------------
April 1, 2006 $900,000
--------------------------- ----------------------------
July 1, 2006 $900,000
--------------------------- ----------------------------
October 1, 2006 $900,000
--------------------------- ----------------------------
January 1, 2007 $900,000
--------------------------- ----------------------------
April 1, 2007 $900,000
--------------------------- ----------------------------
July 1, 2007 $900,000
--------------------------- ----------------------------
October 1, 2007 $900,000
--------------------------- ----------------------------
January 1, 2008 $900,000
--------------------------- ----------------------------
April 1, 2008 $900,000
--------------------------- ----------------------------
July 1, 2008 $900,000
--------------------------- ----------------------------
October 1, 2008 $900,000
--------------------------- ----------------------------
January 1, 2009 $900,000
--------------------------- ----------------------------
April 1, 2009 $900,000
--------------------------- ----------------------------
Maturity Date the outstanding principal
balance of the Term Loan
=========================== ============================
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The outstanding unpaid principal balance and all accrued and unpaid
interest under the Term Loan shall be due and payable on the date of termination
of this Agreement, whether by its terms, by prepayment, or by acceleration. Upon
5 Business Days prior written notice to Agent, Companies may prepay all or a
portion of the Term Loan so long as (i) no Event of Default exists or would be
caused thereby, (ii) the Fixed Asset Portion has been reduced to zero, and (iii)
after giving effect to such prepayment, Excess Availability is at least
$8,000,000. All amounts outstanding under the Term Loan shall constitute
Obligations.
2.3. BORROWING PROCEDURES AND SETTLEMENTS.
(A) PROCEDURE FOR BORROWING. Each Borrowing shall be made by
an irrevocable written request by an Authorized Person delivered to Agent. Such
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day prior to the date that is the requested Funding Date specifying
(i) the amount of such Borrowing, and (ii) the requested Funding Date, which
shall be a Business Day; PROVIDED, HOWEVER, that in the case of a request for a
Swing Loan in an amount of $5,000,000, or less, such notice will be timely
received if it is received by Agent no later than 10:00 a.m. (California time)
on the Business Day that is the requested Funding Date. At Agent's election, in
lieu of delivering the above-described written request, any Authorized Person
may give Agent telephonic notice of such request by the required time. In such
circumstances, Borrowers agree that any such telephonic notice will be confirmed
in writing within 24 hours of the giving of such telephonic notice, but the
failure to provide such written confirmation shall not affect the validity of
the request.
(B) AGENT'S ELECTION. Promptly after receipt of a request
for a Borrowing pursuant to SECTION 2.3(A), Agent shall elect, in its
discretion, (i) to have the terms of SECTION 2.3(C) apply to such requested
Borrowing, or (ii) if the Borrowing is for an Advance, to request Swing Lender
to make a Swing Loan pursuant to the terms of SECTION 2.3(D) in the amount of
the requested Borrowing; provided, however, that if Swing Lender declines in its
sole discretion to make a Swing Loan pursuant to SECTION 2.3(D), Agent shall
elect to have the terms of SECTION 2.3(C) apply to such requested Borrowing.
(C) MAKING OF LOANS.
(i) In the event that Agent shall elect to have the
terms of this SECTION 2.3(C) apply to a requested Borrowing as described in
SECTION 2.3(B), then promptly after receipt of a request for a Borrowing
pursuant to SECTION 2.3(A), Agent shall notify the Lenders, not later than 1:00
p.m. (California time) on the Business Day immediately preceding the Funding
Date applicable thereto, by telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender shall make the amount of
such Lender's Pro Rata Share of the requested Borrowing available to Agent in
immediately available funds, to Agent's Account, not later than 10:00 a.m.
(California time) on the
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Funding Date applicable thereto. After Agent's receipt of the proceeds of such
Advances (or Term Loan, as applicable), Agent shall make the proceeds thereof
available to Administrative Borrower on the applicable Funding Date by
transferring immediately available funds equal to such proceeds received by
Agent to Administrative Borrower's Designated Account; PROVIDED, HOWEVER, that,
subject to the provisions of SECTION 2.3(I), Agent shall not request any Lender
to make, and no Lender shall have the obligation to make, any Advance (or its
portion of the Term Loan) if Agent shall have actual knowledge that (1) one or
more of the applicable conditions precedent set forth in SECTION 3 will not be
satisfied on the requested Funding Date for the applicable Borrowing unless such
condition has been waived, or (2) the requested Borrowing would exceed the
Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender on or
prior to the Closing Date or, with respect to any Borrowing after the Closing
Date, prior to 9:00 a.m. (California time) on the date of such Borrowing, that
such Lender will not make available as and when required hereunder to Agent for
the account of Borrowers the amount of that Lender's Pro Rata Share of the
Borrowing, Agent may assume that each Lender has made or will make such amount
available to Agent in immediately available funds on the Funding Date and Agent
may (but shall not be so required), in reliance upon such assumption, make
available to Borrowers on such date a corresponding amount. If and to the extent
any Lender shall not have made its full amount available to Agent in immediately
available funds and Agent in such circumstances has made available to Borrowers
such amount, that Lender shall on the Business Day following such Funding Date
make such amount available to Agent, together with interest at the Defaulting
Lender Rate for each day during such period. A notice submitted by Agent to any
Lender with respect to amounts owing under this subsection shall be conclusive,
absent manifest error. If such amount is so made available, such payment to
Agent shall constitute such Lender's Advance (or portion of the Term Loan) on
the date of Borrowing for all purposes of this Agreement. If such amount is not
made available to Agent on the Business Day following the Funding Date, Agent
will notify Administrative Borrower of such failure to fund and, upon demand by
Agent, Borrowers shall pay such amount to Agent for Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate applicable at the time to the
Advances (or portion of the Term Loan) composing such Borrowing. The failure of
any Lender to make any Advance (or portion of the Term Loan) on any Funding Date
shall not relieve any other Lender of any obligation hereunder to make an
Advance on such Funding Date, but no Lender shall be responsible for the failure
of any other Lender to make the Advance (or portion of the Term Loan) to be made
by such other Lender on any Funding Date.
(iii) Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by Borrowers to Agent for the Defaulting
Lender's benefit, and, in the absence of such transfer to the Defaulting Lender,
Agent shall transfer any such payments to each other non-Defaulting Lender
member of the Lender Group ratably in accordance with their Commitments (but
only to the extent that such Defaulting Lender's Advance was funded by the other
members of the Lender Group) or, if so directed by Administrative
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Borrower and if no Default or Event of Default had occurred and is continuing
(and to the extent such Defaulting Lender's Advance was not funded by the Lender
Group), retain same to be re-advanced to Borrowers as if such Defaulting Lender
had made Advances to Borrowers. Subject to the foregoing, Agent may hold and, in
its Permitted Discretion, re-lend to Borrowers for the account of such
Defaulting Lender the amount of all such payments received and retained by Agent
for the account of such Defaulting Lender. Solely for the purposes of voting or
consenting to matters with respect to the Loan Documents, such Defaulting Lender
shall be deemed not to be a "Lender" and such Lender's Commitment shall be
deemed to be zero. This Section shall remain effective with respect to such
Lender until (x) the Obligations under this Agreement shall have been declared
or shall have become immediately due and payable, (y) the non-Defaulting
Lenders, Agent, and Administrative Borrower shall have waived such Defaulting
Lender's default in writing, or (z) the Defaulting Lender makes its Pro Rata
Share of the applicable Advance and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this Section shall not be
construed to increase or otherwise affect the Commitment of any Lender, to
relieve or excuse the performance by such Defaulting Lender or any other Lender
of its duties and obligations hereunder, or to relieve or excuse the performance
by Borrowers of their duties and obligations hereunder to Agent or to the
Lenders other than such Defaulting Lender. Any such failure to fund by any
Defaulting Lender shall constitute a material breach by such Defaulting Lender
of this Agreement and shall entitle Administrative Borrower at its option, upon
written notice to Agent, to arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender, such substitute Lender to be acceptable to
Agent. In connection with the arrangement of such a substitute Lender, the
Defaulting Lender shall have no right to refuse to be replaced hereunder, and
agrees to execute and deliver a completed form of Assignment and Acceptance in
favor of the substitute Lender (and agrees that it shall be deemed to have
executed and delivered such document if it fails to do so) subject only to being
repaid its share of the outstanding Obligations (other than Bank Product
Obligations, but including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind whatsoever;
provided however, that any such assumption of the Commitment of such Defaulting
Lender shall not be deemed to constitute a waiver of any of the Lender Groups'
or Borrowers' rights or remedies against any such Defaulting Lender arising out
of or in relation to such failure to fund.
(D) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the consent
of Swing Lender, as a Lender, to have the terms of this SECTION 2.3(D) apply to
a requested Borrowing as described in SECTION 2.3(B), Swing Lender as a Lender
shall make such Advance in the amount of such Borrowing (any such Advance made
solely by Swing Lender as a Lender pursuant to this SECTION 2.3(D) being
referred to as a "SWING LOAN" and such Advances being referred to collectively
as "SWING LOANS") available to Borrowers on the Funding Date applicable thereto
by transferring immediately available funds to Administrative Borrower's
Designated Account. Each Swing Loan shall be deemed to be an Advance hereunder
and shall be subject to all the terms and conditions applicable to other
Advances, except that no such Swing Loan shall be eligible to be a LIBOR Rate
Loan and all payments on any Swing
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Loan shall be payable to Swing Lender as a Lender solely for its own account
(and for the account of the holder of any participation interest with respect to
such Swing Loan). Subject to the provisions of SECTION 2.3(I), Agent shall not
request Swing Lender as a Lender to make, and Swing Lender as a Lender shall not
make, any Swing Loan if Agent has actual knowledge that (i) one or more of the
applicable conditions precedent set forth in SECTION 3 will not be satisfied on
the requested Funding Date for the applicable Borrowing unless such condition
has been waived, or (ii) the requested Borrowing would exceed the Availability
on such Funding Date. Swing Lender as a Lender shall not otherwise be required
to determine whether the applicable conditions precedent set forth in SECTION 3
have been satisfied on the Funding Date applicable thereto prior to making, in
its sole discretion, any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's
Liens, constitute Obligations hereunder, and bear interest at the rate
applicable from time to time to Advances that are Base Rate Loans.
(E) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrowers and the
Lenders, from time to time in Agent's sole discretion, (1) after the occurrence
and during the continuance of a Default or an Event of Default, or (2) at any
time that any of the other applicable conditions precedent set forth in SECTION
3 have not been satisfied, to make Advances to Borrowers on behalf of the
Lenders that Agent, in its Permitted Discretion deems necessary or desirable (A)
to preserve or protect the Collateral, or any portion thereof, (B) to enhance
the likelihood of repayment of the Obligations (other than the Bank Product
Obligations), or (C) to pay any other amount chargeable to Companies pursuant to
the terms of this Agreement, including Lender Group Expenses and the costs,
fees, and expenses described in SECTION 10 (any of the Advances described in
this SECTION 2.3(E) shall be referred to as "AGENT ADVANCES"); PROVIDED,
HOWEVER, that notwithstanding anything to the contrary contained in this SECTION
2.3(E), the aggregate principal amount of Agent Advances outstanding at any
time, when taken together with the aggregate principal amount of Overadvances
made in accordance with SECTION 2.3(I) hereof outstanding at such time, shall
not exceed an amount equal to the lesser of (x) 10% of the Borrowing Base then
in effect and (y) $3,000,000. Each Agent Advance shall be deemed to be an
Advance hereunder, except that no such Agent Advance shall be eligible to be a
LIBOR Rate Loan and all payments thereon shall be payable to Agent solely for
its own account.
(ii) The Agent Advances shall be repayable on demand,
secured by the Agent's Liens granted to Agent under the Loan Documents,
constitute Obligations hereunder, and bear interest at the rate applicable from
time to time to Advances that are Base Rate Loans.
(F) SETTLEMENT. It is agreed that each Lender's funded
portion of the Advances is intended by the Lenders to equal, at all times, such
Lender's Pro Rata Share of the outstanding Advances. Such agreement
notwithstanding, Agent, Swing Lender, and the other Lenders agree (which
agreement shall not be for the benefit of or enforceable by Borrowers) that in
order to facilitate the administration of this Agreement and the other Loan
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Documents, settlement among them as to the Advances, the Swing Loans, and the
Agent Advances shall take place on a periodic basis in accordance with the
following provisions:
(i) Agent shall request settlement ("SETTLEMENT")
with the Lenders on a weekly basis, or on a more frequent basis if so determined
by Agent, (1) on behalf of Swing Lender, with respect to each outstanding Swing
Loan, (2) for itself, with respect to each Agent Advance, and (3) with respect
to Collections of Companies received, as to each by notifying the Lenders by
telecopy, telephone, or other similar form of transmission, of such requested
Settlement, no later than 2:00 p.m. (California time) on the Business Day
immediately prior to the date of such requested Settlement (the date of such
requested Settlement being the "SETTLEMENT DATE"). Such notice of a Settlement
Date shall include a summary statement of the amount of outstanding Advances,
Swing Loans, and Agent Advances for the period since the prior Settlement Date.
Subject to the terms and conditions contained herein (including SECTION
2.3(C)(III)): (y) if a Lender's balance of the Advances (including Swing Loans
and Agent Advances) exceeds such Lender's Pro Rata Share of the Advances
(including Swing Loans and Agent Advances) as of a Settlement Date, then Agent
shall, by no later than 12:00 p.m. (California time) on the Settlement Date,
transfer in immediately available funds to a Deposit Account of such Lender (as
such Lender may designate), an amount such that each such Lender shall, upon
receipt of such amount, have as of the Settlement Date, its Pro Rata Share of
the Advances (including Swing Loans and Agent Advances), and (z) if a Lender's
balance of the Advances (including Swing Loans and Agent Advances) is less than
such Lender's Pro Rata Share of the Advances (including Swing Loans and Agent
Advances) as of a Settlement Date, such Lender shall no later than 12:00 p.m.
(California time) on the Settlement Date transfer in immediately available funds
to the Agent's Account, an amount such that each such Lender shall, upon
transfer of such amount, have as of the Settlement Date, its Pro Rata Share of
the Advances (including Swing Loans and Agent Advances). Such amounts made
available to Agent under clause (z) of the immediately preceding sentence shall
be applied against the amounts of the applicable Swing Loans or Agent Advances
and, together with the portion of such Swing Loans or Agent Advances
representing Swing Lender's Pro Rata Share thereof, shall constitute Advances of
such Lenders. If any such amount is not made available to Agent by any Lender on
the Settlement Date applicable thereto to the extent required by the terms
hereof, Agent shall be entitled to recover for its account such amount on demand
from such Lender together with interest thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the
Advances, Swing Loans, and Agent Advances is less than, equal to, or greater
than such Lender's Pro Rata Share of the Advances, Swing Loans, and Agent
Advances as of a Settlement Date, Agent shall, as part of the relevant
Settlement, apply to such balance the portion of payments actually received in
good funds by Agent with respect to principal, interest, fees payable by
Borrowers and allocable to the Lenders hereunder, and proceeds of Collateral. To
the extent that a net amount is owed to any such Lender after such application,
such net amount shall be distributed by Agent to that Lender as part of such
next Settlement.
(iii) Between Settlement Dates, Agent, to the extent
no Agent Advances or Swing Loans are outstanding, may pay over to Swing Lender
any payments
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received by Agent, that in accordance with the terms of this Agreement would be
applied to the reduction of the Advances, for application to Swing Lender's Pro
Rata Share of the Advances. If, as of any Settlement Date, Collections of
Companies received since the then immediately preceding Settlement Date have
been applied to Swing Lender's Pro Rata Share of the Advances other than to
Swing Loans, as provided for in the previous sentence, Swing Lender shall pay to
Agent for the accounts of the Lenders, and Agent shall pay to the Lenders, to be
applied to the outstanding Advances of such Lenders, an amount such that each
Lender shall, upon receipt of such amount, have, as of such Settlement Date, its
Pro Rata Share of the Advances. During the period between Settlement Dates,
Swing Lender with respect to Swing Loans, Agent with respect to Agent Advances,
and each Lender (subject to the effect of agreements between Agent and
individual Lenders) with respect to the Advances other than Swing Loans and
Agent Advances, shall be entitled to interest at the applicable rate or rates
payable under this Agreement on the daily amount of funds employed by Swing
Lender, Agent, or the Lenders, as applicable.
(G) NOTATION. Agent shall record on its books the principal
amount of the Advances (or portion of the Term, as applicable) owing to each
Lender, including the Swing Loans owing to Swing Lender, and Agent Advances
owing to Agent, and the interests therein of each Lender, from time to time and
such records shall, absent manifest error, conclusively be presumed to be
correct and accurate. In addition, each Lender is authorized, at such Lender's
option, to note the date and amount of each payment or prepayment of principal
of such Lender's Advances (or portion of the Term, as applicable) in its books
and records, including computer records.
(H) LENDERS' FAILURE TO PERFORM. All Advances (other than
Swing Loans and Agent Advances) shall be made by the Lenders contemporaneously
and in accordance with their Pro Rata Shares. It is understood that (i) no
Lender shall be responsible for any failure by any other Lender to perform its
obligation to make any Advance (or other extension of credit) hereunder, nor
shall any Commitment of any Lender be increased or decreased as a result of any
failure by any other Lender to perform its obligations hereunder, and (ii) no
failure by any Lender to perform its obligations hereunder shall excuse any
other Lender from its obligations hereunder.
(I) OPTIONAL OVERADVANCES. Any contrary provision of this
Agreement notwithstanding, the Lenders hereby authorize Agent or Swing Lender,
as applicable, and Agent or Swing Lender, as applicable, may, but is not
obligated to, knowingly and intentionally, continue to make Advances (including
Swing Loans) to Borrowers notwithstanding that an Overadvance exists or thereby
would be created, so long as (i) the aggregate principal amount of Overadvances
made pursuant to this SECTION 2.3(I) when taken together with the aggregate
principal amount of Agent Advances made pursuant to SECTION 2.3(E) does not
exceed at any time an amount equal to the lesser of (x) 10% of the Borrowing
Base then in effect, and (y) $3,000,000, (ii) after giving effect to such
Advances, the outstanding Revolver Usage (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender Group Expenses) does
not exceed the Maximum Revolver Amount, and (iii) at the time of the making of
any such Advance, Agent does not believe, in good faith, that the Overadvance
created by such Advance will be outstanding for more than
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90 days. The foregoing provisions are for the exclusive benefit of Agent, Swing
Lender, and the Lenders and are not intended to benefit Borrowers in any way.
The Advances and Swing Loans, as applicable, that are made pursuant to this
SECTION 2.3(I) shall be subject to the same terms and conditions as any other
Advance or Swing Loan, as applicable, except that they shall not be eligible for
the LIBOR Option and the rate of interest applicable thereto shall be the rate
applicable to Advances that are Base Rate Loans under SECTION 2.6(C) hereof
without regard to the presence or absence of a Default or Event of Default.
(A) In the event Agent obtains actual
knowledge that the Revolver Usage exceeds the amounts permitted by the preceding
paragraph, regardless of the amount of, or reason for, such excess, Agent shall
notify the Lenders as soon as practicable (and prior to making any (or any
additional) intentional Overadvances (except for and excluding amounts charged
to the Loan Account for interest, fees, or Lender Group Expenses) unless Agent
determines that prior notice would result in imminent harm to the Collateral or
its value), and the Lenders with Revolver Commitments thereupon shall, together
with Agent, jointly determine the terms of arrangements that shall be
implemented with Borrowers intended to reduce, within a reasonable time, the
outstanding principal amount of the Advances to Borrowers to an amount permitted
by the preceding paragraph. In the event Agent or any Lender disagrees over the
terms of reduction or repayment of any Overadvance, the terms of reduction or
repayment thereof shall be implemented according to the determination of the
Required Lenders.
(B) Each Lender with a Revolver Commitment
shall be obligated to settle with Agent as provided in SECTION 2.3(F) for the
amount of such Lender's Pro Rata Share of any unintentional Overadvances by
Agent reported to such Lender, any intentional Overadvances made as permitted
under this SECTION 2.3(I), and any Overadvances resulting from the charging to
the Loan Account of interest, fees, or Lender Group Expenses.
2.4. PAYMENTS.
(A) PAYMENTS BY BORROWERS.
(i) Except as otherwise expressly provided herein,
all payments by Borrowers shall be made to Agent's Account for the account of
the Lender Group and shall be made in immediately available funds, no later than
11:00 a.m. (California time) on the date specified herein. Any payment received
by Agent later than 11:00 a.m. (California time), shall be deemed to have been
received on the following Business Day and any applicable interest or fee shall
continue to accrue until such following Business Day.
(ii) Unless Agent receives notice from Administrative
Borrower prior to the date on which any payment is due to the Lenders that
Borrowers will not make such payment in full as and when required, Agent may
assume that Borrowers have made (or will make) such payment in full to Agent on
such date in immediately available funds and Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender on such
due date an amount equal to the amount then due such Lender. If and to the
extent Borrowers do not make such payment in full to Agent on the date when due,
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each Lender severally shall repay to Agent on demand such amount distributed to
such Lender, together with interest thereon at the Defaulting Lender Rate for
each day from the date such amount is distributed to such Lender until the date
repaid.
(B) APPORTIONMENT AND APPLICATION.
(i) Except as otherwise provided with respect to
Defaulting Lenders and except as otherwise provided in the Loan Documents
(including agreements between Agent and individual Lenders), aggregate principal
and interest payments shall be apportioned ratably among the Lenders (according
to the unpaid principal balance of the Obligations to which such payments relate
held by each Lender) and payments of fees and expenses (other than fees or
expenses that are for Agent's separate account, after giving effect to any
agreements between Agent and individual Lenders) shall be apportioned ratably
among the Lenders having a Pro Rata Share of the type of Commitment or
Obligation to which a particular fee relates. Except as otherwise specifically
provided in SECTION 2.4(B)(III) or SECTION 2.4(D), all payments shall be
remitted to Agent and all such payments, and all proceeds of Collateral received
by Agent, shall be applied as follows:
(A) FIRST, to pay any Lender Group Expenses
then due to Agent under the Loan Documents, until paid in full,
(B) SECOND, to pay any Lender Group Expenses
then due to the Lenders under the Loan Documents, on a ratable basis, until paid
in full,
(C) THIRD, to pay any fees then due to Agent
(for its separate account, after giving effect to any agreements between Agent
and the individual Lenders) under the Loan Documents until paid in full,
(D) FOURTH, to pay any fees then due to any
or all of the Lenders (after giving effect to any agreements between Agent and
individual Lenders) under the Loan Documents, on a ratable basis, until paid in
full, PROVIDED, HOWEVER, that, if an Event of Default has occurred and is
continuing, the priority of the payment of any fee payable to any Lender in
respect of the Term Loan shall, unless the Required Revolver Lenders agree in
their sole discretion to forgo deferring such payment, be deferred to item
"fourteenth" below, PROVIDED, FURTHER, that if an Event of Default has occurred
and is continuing, the priority of the payment of any fee payable to any Lender
in respect of the Applicable Prepayment Premium or the Applicable Term Loan
Prepayment Premium shall be deferred to item "SEVENTEENTH" and item "EIGHTEENTH"
below, respectively,
(E) FIFTH, to pay interest due in respect of
all Agent Advances, until paid in full,
(F) SIXTH, ratably to pay interest due in
respect of the Advances (other than Agent Advances) and the Swing Loans until
paid in full,
(G) SEVENTH, so long as no Event of Default
has occurred and is continuing or, if an Event of Default has occurred and is
continuing and the Required
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Revolver Lenders agree in their sole discretion, ratably to pay interest due in
respect of the Term Loan, until paid in full (if an Event of Default has
occurred and is continuing and the Required Revolving Lenders have not agreed to
allow the payment of interest due in respect of the Term Loan, the priority of
the payment of interest on the Term Loan shall be deferred to item "fifteenth"
below),
(H) EIGHTH, to pay the principal of all
Agent Advances until paid in full,
(I) NINTH, so long as no Event of Default
has occurred and is continuing or, if an Event of Default has occurred and is
continuing and the Required Revolver Lenders agree in their sole discretion,
ratably to pay all principal amounts then due and payable (other than as a
result of an acceleration thereof) with respect to the Term Loan, until paid in
full (if an Event of Default has occurred and is continuing and the Required
Revolving Lenders have not agreed to allow the payment of principal due in
respect of the Term Loan, the priority of the payment of principal then due with
respect to the Term Loan shall be deferred to item "sixteenth" below),
(J) TENTH, to pay the principal of all Swing
Loans until paid in full,
(K) ELEVENTH, so long as no Event of Default
has occurred and is continuing and at Agent's election (which election will not
be made if an Overadvance would be created thereby), to pay amounts then due and
owing by Companies in respect of Bank Products until paid in full,
(L) TWELFTH, so long as no Event of Default
has occurred and is continuing, to pay the principal of all Advances until paid
in full,
(M) THIRTEENTH, if an Event of Default has
occurred and is continuing, ratably (i) to pay the principal of all Advances
until paid in full, (ii) to Agent, to be held by Agent, for the ratable benefit
of Issuing Lender and those Lenders having a Revolver Commitment, as cash
collateral in an amount up to 105% of the Letter of Credit Usage until paid in
full, and (iii) to Agent, to be held by Agent, for the benefit of the Bank
Product Providers, as cash collateral in an amount up to the amount of the Bank
Product Reserve established substantially contemporaneous with the date the Bank
Product Provider first provides the applicable Bank Product, and not in
contemplation of, the subject Event of Default until Companies' obligations in
respect of Bank Products have been paid in full or the cash collateral amount
has been exhausted,
(N) FOURTEENTH, if an Event of Default has
occurred and is continuing, to pay fees (other than the Applicable Term Loan
Prepayment Premium) due in respect of the Term Loan, until paid in full,
(O) FIFTEENTH, if an Event of Default has
occurred and is continuing, to pay interest due in respect of the Term Loan,
until paid in full,
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(P) SIXTEENTH, if an Event of Default has
occurred and is continuing, to pay the outstanding principal balance of the Term
Loan until the Term Loan is paid in full,
(Q) SEVENTEENTH, if an Event of Default has
occurred and is continuing, to pay the Applicable Prepayment Premium then due
and payable to any Lender, until paid in full,
(R) EIGHTEENTH, if an Event of Default has
occurred and is continuing, to pay the Applicable Term Loan Prepayment Premium
then due and payable to any Lender, until paid in full,
(S) NINETEENTH, to pay amounts to Agent, to
be held by Agent, for the benefit of the Bank Product Providers, as cash
collateral in an amount up to the amount determined by Agent in its Permitted
Discretion as the amount necessary to secure Companies' obligations in respect
of the then extant Bank Products,
(T) TWENTIETH, to pay for any other
Obligations, and
(U) TWENTY-FIRST, to Borrowers (to be wired
to the Designated Account) or such other Person entitled thereto under
applicable law.
(ii) Agent promptly shall distribute to each Lender,
pursuant to the applicable wire instructions received from each Lender in
writing, such funds as it may be entitled to receive, subject to a Settlement
delay as provided in SECTION 2.3(F).
(iii) In each instance, so long as no Event of Default
has occurred and is continuing or would result therefrom, this SECTION 2.4(B)
shall not apply to any payment made by Borrowers to Agent and specified by
Borrowers to be for the payment of specific Obligations then due and payable (or
prepayable to the extent such prepayment is expressly permitted under this
Agreement) under any provision of this Agreement.
(iv) For purposes of the foregoing (other than clause
(T)), "paid in full" means payment of all amounts owing under the Loan Documents
according to the terms thereof, including loan fees, service fees, professional
fees, interest (and specifically including interest accrued after the
commencement of any Insolvency Proceeding), default interest, interest on
interest, and expense reimbursements, except to the extent that default or
overdue interest (but not any other interest) and loan fees, each arising from
or related to a default, are disallowed in any Insolvency Proceeding; PROVIDED,
HOWEVER, that for the purposes of clause (T), "paid in full" means payment of
all amounts owing under the Loan Documents according to the terms thereof,
including loan fees, service fees, professional fees, interest (and specifically
including interest accrued after the commencement of any Insolvency Proceeding),
default interest, interest on interest, and expense reimbursements, whether or
not any of the foregoing would be or is allowed or disallowed in whole or in
part in any Insolvency Proceeding.
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(v) In the event of a direct conflict between the
priority provisions of this SECTION 2.4 and other provisions contained in any
other Loan Document, it is the intention of the parties hereto that such
priority provisions in such documents shall be read together and construed, to
the fullest extent possible, to be in concert with each other. In the event of
any actual, irreconcilable conflict that cannot be resolved as aforesaid, the
terms and provisions of this SECTION 2.4 shall control and govern.
(C) MANDATORY PREPAYMENTS.
(i) [INTENTIONALLY OMITTED].
(ii) Immediately upon any voluntary or involuntary
sale or disposition by any Company of property or assets (other than sales or
dispositions which qualify as Permitted Dispositions), Borrowers shall (unless
the obligation to make such payment is waived in writing by the Required Lenders
prior to the date on which such payment is required to be made) prepay the
outstanding Obligations in accordance with clause (d) below in an amount equal
to 100% of the Net Cash Proceeds received by such Person in connection with such
sales or dispositions to the extent that the aggregate amount of Net Cash
Proceeds received by JRCC and its Subsidiaries (and not paid to Agent as a
prepayment of the Obligations) for all such sales or dispositions shall exceed
$1,000,000 in any fiscal year. Nothing contained in this subclause (ii) shall
permit any of JRCC or its Subsidiaries to sell or otherwise dispose of any
property or assets other than in accordance with SECTION 7.4.
(iii) Immediately upon the receipt by any JRCC or any
of its Subsidiaries of any Extraordinary Receipts, Borrowers shall (unless the
obligation to make such payment is waived in writing by the Required Lenders
prior to the date on which such payment is required to be made) prepay the
outstanding Obligations in accordance with clause (d) below in an amount equal
to 100% of such Extraordinary Receipts, net of any reasonable expenses incurred
in collecting such Extraordinary Receipts.
(iv) Immediately upon the issuance or incurrence by
JRCC or any of its Subsidiaries of any Indebtedness (other than Indebtedness
permitted under SECTION 7.1), Borrowers shall (unless the obligation to make
such payment is waived in writing by the Required Term Loan Lenders prior to the
date on which such payment is required to be made) prepay the outstanding
principal of the Obligations in accordance with clause (d) in an amount equal to
100% of the Net Cash Proceeds received by JRCC or its Subsidiaries in connection
with such sale, issuance, or incurrence. The provisions of this subsection (iv)
shall not be deemed to be implied consent to any such issuance or incurrence
otherwise prohibited by the terms and conditions of this Agreement.
(D) APPLICATION OF PAYMENTS.
(i) [INTENTIONALLY OMITTED].
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(ii) Each prepayment pursuant to subclauses (c)(ii)
above and (c)(iii) above, shall, (A) so long as no Event of Default shall have
occurred and be continuing, be applied as follows:
(1) if the proceeds are from any sale or
disposition of any Equipment, Accounts or Inventory or any
insurance policy or condemnation award with respect to Inventory
or otherwise constitute proceeds of Equipment, Accounts or
Inventory, such proceeds shall be applied, first, to the
outstanding principal amount of the Advances, until paid in
full, second, to cash collateralize the Letters of Credit in an
amount equal to 105% at the then extant Letter of Credit Usage,
until paid in full, and third, to the outstanding principal
amount of the Term Loan, until paid in full; PROVIDED, that the
proceeds of Equipment applied to Advances and the cash
collateralization Letters of Credit shall not exceed the amount
of the Fixed Asset Portion. Each such prepayment of the Term
Loan shall be without penalty or premium and shall be applied
against the remaining installments of principal of the Term Loan
in the inverse order of maturity.
(2) subject to clause (3) below, if the
proceeds are from the sale or disposition of any other assets or
any insurance policy or condemnation award not described in
clause (1) above, such proceeds shall be applied, to the
outstanding principal amount of the Term Loan. Each such
prepayment of the Term Loan shall be without penalty or premium
and shall be applied against the remaining installments of
principal of the Term Loan in the inverse order of maturity;
PROVIDED, HOWEVER, that, except during the continuance of an
Event of Default, such proceeds shall not be required to be so
applied to the extent that such proceeds are used to replace,
repair, or restore the properties or assets in respect of which
such proceeds were paid if (i) the amount of proceeds received
in respect of such sales, dispositions, insurance policies, or
condemnation awards are less than $1,000,000 in the aggregate
during the term of this Agreement, (ii) Administrative Borrower
delivers a certificate to Agent within 10 days after such sale
or loss, destruction, or taking, stating that such proceeds
shall be used to replace, repair, or restore such properties or
assets within a period specified in such certificate not to
exceed the earlier of (x) 180 days after the receipt of such
proceeds, and (y) the Maturity Date (which certificate shall set
forth estimates of the proceeds to be so expended), and (iii)
such proceeds are immediately deposited in a Deposit Account
subject to a Control Agreement in favor of Agent. If all or any
portion of such proceeds not so applied to the prepayment of the
Obligations in accordance with this clause (2) are not used in
accordance with the preceding sentence within the period
specified in the relevant certificate furnished pursuant hereto,
such remaining portion shall be applied to the Obligations in
accordance with this clause (2) on the last day of such
specified period; and
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(3) if the proceeds are from a sale or
disposition of all or substantially all of the assets or Stock
of any Person or any insurance, which sale, disposition, or
proceeds of insurance includes both Equipment, Accounts or
Inventory and other assets, such proceeds shall be applied as
follows: (x) an amount equal to the net book value of such
Accounts and Inventory (determined at the time of such sale or
disposition or event resulting in such insurance proceeds) and
an amount equal to the lesser of the amount of the Fixed Asset
Portion and the proceeds attributable to such Equipment, shall
be applied first, to the outstanding principal amount of the
Advances, until paid in full, second, to cash collateralize the
Letters of Credit in an amount equal to 105% at the then extant
Letter of Credit Usage, Advances, until paid in full, and third,
to the outstanding principal balance of the Term Loan, and (y)
the remaining proceeds shall be applied to the outstanding
principal amount of the Term Loan. Each such prepayment of the
Term Loan shall be without penalty or premium and shall be
applied against the remaining installments of principal of the
Term Loan in the inverse order of maturity;
(4) subject to clauses (1), (2) and (3)
above, any other prepayment pursuant to subclauses (c)(ii) and
(iii) above shall, (A) so long as no Event of Default shall have
occurred and be continuing, be applied, to the outstanding
principal amount of the Term Loan (and shall be accompanied by
the payment of the Applicable Term Loan Prepayment Premium), and
(B) if an Event of Default shall have occurred and be
continuing, be applied in the manner set forth in SECTION
2.4(B)(I). Each such prepayment of the Term Loan shall be
applied against the remaining installments of principal of the
Term Loan in the inverse order of maturity; and
(5) if an Event of Default shall have
occurred and be continuing, be applied in the manner set forth
in SECTION 2.4(B)(I).
(iii) Each prepayment pursuant to subclause (c)(iv)
above shall, (A) so long as no Event of Default shall have occurred and be
continuing, be applied, to the outstanding principal amount of the Term Loan
(and shall be accompanied by the payment of the Applicable Term Loan Prepayment
Premium), and (B) if an Event of Default shall have occurred and be continuing,
be applied in the manner set forth in SECTION 2.4(B)(I). Each such prepayment of
the Term Loan shall be applied against the remaining installments of principal
of the Term Loan in the inverse order of maturity.
(iv) Intentionally Omitted.
(v) Notwithstanding anything to the contrary
contained in this SECTION 2.4(D), if Excess Availability either (x) is less than
or equal to $8,000,000 immediately prior to the date of a prepayment of the Term
Loan required under SECTION 2.4(C), or (y) would be less than or equal to
$8,000,000 immediately after giving effect to any prepayment required under
SECTION 2.4(C) (a "PREPAYMENT BLOCKAGE CONDITION"), then so
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long as such Prepayment Blockage Condition exists, the prepayments of the Term
Loan required under SECTION 2.4(C) which come due shall be subject to the
following provisions:
(A) with respect to any and all prepayments
of the Term Loan required under SECTION 2.4(C) while a Prepayment Blockage
Condition exists, such prepayments shall not be deemed to be due and payable for
purposes of the application of SECTION 2.4(B) and Borrowers' obligation to make
such prepayment shall be deemed satisfied by Agent establishing, and Agent shall
establish and maintain, a reserve against the Borrowing Base and the Maximum
Revolver Amount in an amount equal to such prepayment (the "PREPAYMENT
RESERVE"),
(B) so long as a Prepayment Blockage
Condition exists, an Event of Default shall not be deemed to have occurred
solely as a result of application of the provisions in (A) above, unless the
establishment of the Prepayment Reserve results in an Overadvance.
Notwithstanding the foregoing, at such time as a Prepayment Blockage Condition
no longer exists (calculated without regard to Prepayment Reserves and no Event
of Default then exists), then the amount of the Prepayment Reserve shall be
released and Agent shall apply the amount of the Prepayment Reserve to the
missed prepayment of the Term Loan required under SECTION 2.4(C) in respect of
the Term Loan. All prepayments of the Term Loan required under SECTION 2.4(C)
that are not paid when due shall continue to accrue interest at the rate then
applicable to the Term Loan.
2.5. OVERADVANCES. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrowers to the
Lender Group pursuant to SECTION 2.1 or SECTION 2.12 is greater than any of the
limitations set forth in SECTION 2.1 or SECTION 2.12, as applicable (an
"OVERADVANCE"), Borrowers immediately shall pay to Agent, in cash, the amount of
such excess, which amount shall be used by Agent to reduce the Obligations in
accordance with the priorities set forth in SECTION 2.4(B). In addition,
Borrowers hereby promise to pay the Obligations (including principal, interest,
fees, costs, and expenses) in Dollars in full as and when due and payable under
the terms of this Agreement and the other Loan Documents.
2.6. INTEREST RATES AND LETTER OF CREDIT FEE: RATES, PAYMENTS, AND
CALCULATIONS.
(A) INTEREST RATES. Except as provided in clause (c) below,
all Obligations (except for undrawn Letters of Credit and except for Bank
Product Obligations) that have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance thereof as follows (i) if
the relevant Obligation is an Advance that is a LIBOR Rate Loan, at a per annum
rate equal to the LIBOR Rate plus the LIBOR Rate Margin, (ii) if the relevant
Obligation is a portion of the Term Loan that is a LIBOR Rate Loan, at a per
annum rate equal to the LIBOR Rate plus the LIBOR Rate Term Loan Margin, (iii)
if the relevant Obligation is a portion of the Term Loan that is a Base Rate
Loan, at a per annum
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rate equal to the Base Rate plus the Base Rate Term Loan Margin, and (iv)
otherwise, at a per annum rate equal to the Base Rate plus the Base Rate Margin.
(B) LETTER OF CREDIT FEE. Borrowers shall pay Agent (for the
ratable benefit of the Lenders with a Revolver Commitment, subject to any
agreements between Agent and individual Lenders), a Letter of Credit fee (in
addition to the charges, commissions, fees, and costs set forth in SECTION
2.12(E)) which shall accrue at a rate equal to 2.50% per annum times the Daily
Balance of the undrawn amount of all outstanding Letters of Credit.
(C) DEFAULT RATE. Upon the occurrence and during the
continuation of an Event of Default,
(i) at the election of the Required Revolver
Lenders, all Obligations (except for undrawn Letters of Credit, Bank Product
Obligations and Obligations in respect of the Term Loan) that have been charged
to the Loan Account pursuant to the terms hereof shall bear interest on the
Daily Balance thereof at a per annum rate equal to 2 percentage points above the
per annum rate otherwise applicable hereunder,
(ii) at the election of the Required Revolver
Lenders, the Letter of Credit fee provided for above shall be increased to 2
percentage points above the per annum rate otherwise applicable hereunder, and
(iii) at the election of the Required Term Loan
Lenders, all Obligations in respect of the Term Loan that have been charged to
the Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof at a per annum rate equal to 2 percentage points above the per
annum rate otherwise applicable hereunder.
(D) PAYMENT. Except as provided to the contrary in SECTION
2.11 or SECTION 2.13(A), interest, Letter of Credit fees, and all other fees
payable hereunder shall be due and payable, in arrears, on the first day of each
month at any time that Obligations or Commitments are outstanding. Borrowers
hereby authorize Agent, from time to time, without prior notice to Borrowers, to
charge all interest and fees (when due and payable), all Lender Group Expenses
(as and when incurred), all charges, commissions, fees, and costs provided for
in SECTION 2.12(E) (as and when accrued or incurred), all fees and costs
provided for in SECTION 2.11 (as and when accrued or incurred), and all other
payments as and when due and payable under any Loan Document (including the
amounts due and payable with respect to the Term Loans and including any amounts
due and payable to the Bank Product Providers in respect of Bank Products up to
the amount of the Bank Product Reserve) to Borrowers' Loan Account, which
amounts thereafter shall constitute Advances hereunder and shall accrue interest
at the rate then applicable to Advances hereunder; PROVIDED, HOWEVER, that if,
at the time that any amounts due in respect of the Term Loan are charged to
Borrower's Loan Account an Event of Default or Overadvance exists or would
result from such charge to the Loan Account, such amounts shall not constitute
Advances but instead shall continue to remain outstanding as amounts due in
respect of the Term Loan and such amounts that constitute interest shall be
compounded and added to the outstanding principal
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balance of the Term Loan; PROVIDED FURTHER, HOWEVER, that the failure to make
any such payment and the compounding of such interest shall nonetheless
constitute an Event of Default under SECTION 8.1. Any interest not paid when due
shall be compounded by being charged to Borrowers' Loan Account and shall
thereafter constitute Advances hereunder and shall accrue interest at the rate
then applicable to Advances that are Base Rate Loans hereunder; PROVIDED,
HOWEVER, that if, at the time that any amounts due in respect of interest on the
Term Loan are charged to Borrowers' Loan Account an Event of Default or
Overadvance exists or would result from such charge to the Loan Account, such
amounts shall not constitute Advances but instead shall continue to remain
outstanding as amounts due in respect of the Term Loan and such amounts shall be
compounded and added to the outstanding principal balance of the Term Loan,
PROVIDED FURTHER, HOWEVER, that the failure to make any such payment and the
compounding of such interest shall nonetheless constitute an Event of Default
under SECTION 8.1.
(E) COMPUTATION. All interest and fees chargeable under the
Loan Documents shall be computed on the basis of a 360 day year for the actual
number of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(F) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no
event shall the interest rate or rates payable under this Agreement, plus any
other amounts paid in connection herewith, exceed the highest rate permissible
under any law that a court of competent jurisdiction shall, in a final
determination, deem applicable. Borrowers and the Lender Group, in executing and
delivering this Agreement, intend legally to agree upon the rate or rates of
interest and manner of payment stated within it; PROVIDED, HOWEVER, that,
anything contained herein to the contrary notwithstanding, if said rate or rates
of interest or manner of payment exceeds the maximum allowable under applicable
law, then, IPSO FACTO, as of the date of this Agreement, Borrowers are and shall
be liable only for the payment of such maximum as allowed by law, and payment
received from Borrowers in excess of such legal maximum, whenever received,
shall be applied to reduce the principal balance of the Obligations to the
extent of such excess.
2.7. CASH MANAGEMENT.
(a) Companies shall (i) establish and maintain cash
management services of a type and on terms satisfactory to Agent at one or more
of the banks set forth on SCHEDULE 2.7(A) (each a "CASH MANAGEMENT BANK"), and
shall request in writing and otherwise take such reasonable steps to ensure that
all of their Account Debtors forward payment of the amounts owed by them
directly to such Cash Management Bank, and (ii) 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 of their Collections (including those sent directly by
their Account Debtors to Companies) into a bank account in Agent's name (a "CASH
MANAGEMENT ACCOUNT") at one of the Cash Management Banks.
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(b) Each Cash Management Bank shall establish and maintain
Cash Management Agreements with Agent and Companies, in form and substance
reasonably acceptable to Agent. Each such Cash Management Agreement shall
provide, among other things, that (i) the Cash Management Bank will comply with
any instructions originated by Agent directing the disposition of the funds in
such Cash Management Account without further consent by Companies, (ii) the Cash
Management Bank has no rights of setoff or recoupment or any other claim against
the applicable Cash Management Account, other than for payment of its service
fees and other charges directly related to the administration of such Cash
Management Account and for returned checks or other items of payment, and (iii)
it will forward by daily sweep all amounts in the applicable Cash Management
Account to the Agent's Account.
(c) So long as no Default or Event of Default has occurred
and is continuing, Administrative Borrower may amend SCHEDULE 2.7(A) to add or
replace a Cash Management Bank or Cash Management Account; PROVIDED, HOWEVER,
that (i) such prospective Cash Management Bank shall be reasonably satisfactory
to Agent, and (ii) prior to the time of the opening of such Cash Management
Account, a Company and such prospective Cash Management Bank shall have executed
and delivered to Agent a Cash Management Agreement. Companies shall close any of
their Cash Management Accounts (and establish replacement cash management
accounts in accordance with the foregoing sentence) promptly and in any event
within 30 days of notice from Agent that the creditworthiness of any Cash
Management Bank is no longer acceptable in Agent's reasonable judgment, or as
promptly as practicable and in any event within 60 days of notice from Agent
that the operating performance, funds transfer, or availability procedures or
performance of the Cash Management Bank with respect to Cash Management Accounts
or Agent's liability under any Cash Management Agreement with such Cash
Management Bank is no longer acceptable in Agent's reasonable judgment.
(d) The Cash Management Accounts shall be cash collateral
accounts subject to Control Agreements.
2.8. CREDITING PAYMENTS. The receipt of any payment item by Agent
(whether from transfers to Agent by the Cash Management Banks pursuant to the
Cash Management Agreements or otherwise) shall not be considered a payment on
account unless such payment item is a wire transfer of immediately available
federal funds made to the Agent's Account or unless and until such payment item
is honored when presented for payment. Should any payment item not be honored
when presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
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2.9. DESIGNATED ACCOUNT. Agent is authorized to make the Advances and
the Term Loan, and Issuing Lender is authorized to issue the Letters of Credit,
under this Agreement based upon telephonic or other instructions received from
anyone purporting to be an Authorized Person or, without instructions, if
pursuant to SECTION 2.6(d). Administrative Borrower agrees to establish and
maintain the Designated Account with the Designated Account Bank for the purpose
of receiving the proceeds of the Advances requested by Borrowers and made by
Agent or the Lenders hereunder. Unless otherwise agreed by Agent and
Administrative Borrower, any Advance, Agent Advance, or Swing Loan requested by
Borrowers and made by Agent or the Lenders hereunder shall be made to the
Designated Account.
2.10. MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrowers (the "LOAN
ACCOUNT") on which Borrowers will be charged with the Term Loans, all Advances
(including Agent Advances and Swing Loans) made by Agent, Swing Lender, or the
Lenders to Borrowers or for Borrowers' account, the Letters of Credit issued by
Issuing Lender for Borrowers' account, and with all other payment Obligations
hereunder or under the other Loan Documents (except for Bank Product
Obligations), including, accrued interest, fees and expenses, and Lender Group
Expenses. In accordance with SECTION 2.8, the Loan Account will be credited with
all payments received by Agent from Borrowers or for Borrowers' account,
including all amounts received in the Agent's Account from any Cash Management
Bank. Agent shall render statements regarding the Loan Account to Administrative
Borrower, including principal, interest, fees, and including an itemization of
all charges and expenses constituting Lender Group Expenses owing, and such
statements, absent manifest error, shall be conclusively presumed to be correct
and accurate and constitute an account stated between Borrowers and the Lender
Group unless, within 30 days after receipt thereof by Administrative Borrower,
Administrative Borrower shall deliver to Agent written objection thereto
describing the error or errors contained in any such statements.
2.11. FEES. Borrowers shall pay to Agent the following fees and
charges, which fees and charges shall be non-refundable when paid (irrespective
of whether this Agreement is terminated thereafter) and shall be apportioned
among the Lenders in accordance with the terms of agreements between Agent and
individual Lenders:
(A) UNUSED LINE FEE. On the first day of each month during
the term of this Agreement, payable in arrears, an unused line fee in an amount
equal to 0.375% per annum times the result of (i) the Maximum Revolver Amount,
less (ii) the sum of (A) the average Daily Balance of Advances that were
outstanding during the immediately preceding month, plus (B) the average Daily
Balance of the Letter of Credit Usage during the immediately preceding month,
(B) FEE LETTER FEES. As and when due and payable under the
terms of the Fee Letter, the fees set forth in the Fee Letter, and
(C) AUDIT, APPRAISAL, AND VALUATION CHARGES. Audit,
appraisal, and valuation fees and charges as follows (i) a fee of $950 per day,
per auditor, plus out-of-pocket
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expenses for each financial audit of a Company performed by personnel employed
by Agent, (ii) if implemented, a fee of $950 per day, per applicable individual,
plus out of pocket expenses for the establishment of electronic collateral
reporting systems, and (iii) the actual charges paid or incurred by Agent if it
elects to employ the services of one or more third Persons to perform financial
audits of Companies, to establish electronic collateral reporting systems, or to
appraise the Collateral, or any portion thereof.
2.12. LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this Agreement,
the Issuing Lender agrees to issue letters of credit for the account of
Borrowers (each, an "L/C") or to purchase participations or execute indemnities
or reimbursement obligations (each such undertaking, an "L/C UNDERTAKING") with
respect to letters of credit issued by an Underlying Issuer (as of the Closing
Date, the prospective Underlying Issuer is to be Xxxxx Fargo) for the account of
Borrowers. Each request for the issuance of a Letter of Credit or the amendment,
renewal, or extension of any outstanding Letter of Credit shall be made in
writing by an Authorized Person and delivered to the Issuing Lender and Agent
via hand delivery, telefacsimile, or other electronic method of transmission
reasonably in advance of the requested date of issuance, amendment, renewal, or
extension. Each such request shall be in form and substance satisfactory to the
Issuing Lender in its Permitted Discretion and shall specify (i) the amount of
such Letter of Credit, (ii) the date of issuance, amendment, renewal, or
extension of such Letter of Credit, (iii) the expiration of such Letter of
Credit, (iv) the name and address of the beneficiary thereof (or the beneficiary
of the Underlying Letter of Credit, as applicable), and (v) such other
information (including, in the case of an amendment, renewal, or extension,
identification of the outstanding Letter of Credit to be so amended, renewed, or
extended) as shall be necessary to prepare, amend, renew, or extend such Letter
of Credit. If requested by the Issuing Lender, Borrowers also shall be an
applicant under the application with respect to any Underlying Letter of Credit
that is to be the subject of an L/C Undertaking. The Issuing Lender shall have
no obligation to issue a Letter of Credit if any of the following would result
after giving effect to the issuance of such requested Letter of Credit:
(i) the Letter of Credit Usage would exceed the
Borrowing Base LESS the outstanding amount of Advances, or
(ii) the Letter of Credit Usage would exceed
$29,000,000, or
(iii) the Letter of Credit Usage would exceed the
Maximum Revolver Amount LESS the outstanding amount of Advances.
Borrowers and the Lender Group acknowledge and agree that
certain Underlying Letters of Credit may be issued to support the Wachovia L/Cs.
Each Letter of Credit (and corresponding Underlying Letter of Credit) shall be
in form and substance acceptable to the Issuing Lender (in the exercise of its
Permitted Discretion), including the requirement that the amounts payable
thereunder must be payable in Dollars. If Issuing Lender is obligated to advance
funds under a Letter of Credit, Borrowers immediately shall
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reimburse such L/C Disbursement to Issuing Lender by paying to Agent an amount
equal to such L/C Disbursement not later than 11:00 a.m., California time, on
the date that such L/C Disbursement is made, if Administrative Borrower shall
have received written or telephonic notice of such L/C Disbursement prior to
10:00 a.m., California time, on such date, or, if such notice has not been
received by Administrative Borrower prior to such time on such date, then not
later than 11:00 a.m., California time, on the Business Day that Administrative
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
California time, on the date of receipt, and, in the absence of such
reimbursement, the L/C Disbursement immediately and automatically shall be
deemed to be an Advance hereunder and, thereafter, shall bear interest at the
rate then applicable to Advances that are Base Rate Loans under SECTION 2.6. To
the extent an L/C Disbursement is deemed to be an Advance hereunder, Borrowers'
obligation to reimburse such L/C Disbursement shall be discharged and replaced
by the resulting Advance. Promptly following receipt by Agent of any payment
from Borrowers pursuant to this paragraph, Agent shall distribute such payment
to the Issuing Lender or, to the extent that Lenders have made payments pursuant
to SECTION 2.12(C) to reimburse the Issuing Lender, then to such Lenders and the
Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to SECTION 2.12(A), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Borrowers had requested such
Advance and Agent shall promptly pay to Issuing Lender the amounts so received
by it from the Lenders. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Lender or the Lenders with Revolver
Commitment, the Issuing Lender shall be deemed to have granted to each Lender
with a Revolver Commitment, and each Lender with a Revolver Commitment shall be
deemed to have purchased, a participation in each Letter of Credit, in an amount
equal to its Pro Rata Share of the Risk Participation Liability of such Letter
of Credit, and each such Lender agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing
Lender under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender,
such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender
and not reimbursed by Borrowers on the date due as provided in clause (a) of
this Section, or of any reimbursement payment required to be refunded to
Borrowers for any reason. Each Lender with a Revolver Commitment acknowledges
and agrees that its obligation to deliver to Agent, for the account of the
Issuing Lender, an amount equal to its respective Pro Rata Share of each L/C
Disbursement made by the Issuing Lender pursuant to this SECTION 2.12(B) shall
be absolute and unconditional and such remittance shall be made notwithstanding
the occurrence or continuation of an Event of Default or Default or the failure
to satisfy any condition set forth in SECTION 3 hereof. If any such Lender fails
to make available to Agent the amount of such Lender's Pro Rata Share of each
L/C Disbursement made by the Issuing Lender in respect of such Letter of Credit
as provided in this Section, such Lender shall be deemed to be a Defaulting
Lender and Agent (for the account of the Issuing Lender) shall be
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entitled to recover such amount on demand from such Lender together with
interest thereon at the Defaulting Lender Rate until paid in full.
(c) Each Borrower hereby agrees to indemnify, save, defend, and hold
the Lender Group harmless from any loss, cost, expense, or liability, and
reasonable attorneys fees incurred by the Lender Group arising out of or in
connection with any Letter of Credit; PROVIDED, HOWEVER, that no Borrower shall
be obligated hereunder to indemnify for any loss, cost, expense, or liability to
the extent that it is caused by the gross negligence or willful misconduct of
the Issuing Lender or any other member of the Lender Group. Each Borrower agrees
to be bound by the Underlying Issuer's regulations and reasonable
interpretations of any Underlying Letter of Credit or by Issuing Lender's
interpretations of any L/C issued by Issuing Lender to or for such Borrower's
account, even though this interpretation may be different from such Borrower's
own, and each Borrower understands and agrees that the Lender Group shall not be
liable for any error, negligence, or mistake, whether of omission or commission,
in following Borrowers' instructions or those contained in the Letter of Credit
or any modifications, amendments, or supplements thereto. Each Borrower
understands that the L/C Undertakings may require Issuing Lender to indemnify
the Underlying Issuer for certain costs or liabilities arising out of claims by
Borrowers against such Underlying Issuer. Each Borrower hereby agrees to
indemnify, save, defend, and hold the Lender Group harmless with respect to any
loss, cost, expense (including reasonable attorneys fees), or liability incurred
by the Lender Group under any L/C Undertaking as a result of the Lender Group's
indemnification of any Underlying Issuer; PROVIDED, HOWEVER, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability to the extent that it is caused by the gross negligence or willful
misconduct of the Issuing Lender or any other member of the Lender Group. Each
Borrower hereby acknowledges and agrees that neither the Lender Group nor the
Issuing Lender shall be responsible for delays, errors, or omissions resulting
from the malfunction of equipment in connection with any Letter of Credit.
(d) Each Borrower hereby authorizes and directs any Underlying
Issuer to deliver to the Issuing Lender all instruments, documents, and other
writings and property received by such Underlying Issuer pursuant to such
Underlying Letter of Credit and to accept and rely upon the Issuing Lender's
instructions with respect to all matters arising in connection with such
Underlying Letter of Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred by
the Issuing Lender relating to Underlying Letters of Credit shall be Lender
Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is .825% per annum
times the face amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
(f) If by reason of (i) any change after the Closing Date in any
applicable law, treaty, rule, or regulation or any change in the interpretation
or application thereof by
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any Governmental Authority, or (ii) compliance by the Underlying Issuer or the
Lender Group with any direction, request, or requirement (irrespective of
whether having the force of law) of any Governmental Authority or monetary
authority including, Regulation D of the Federal Reserve Board as from time to
time in effect (and any successor thereto):
(i) any reserve, deposit, or similar requirement is
or shall be imposed or modified in respect of any Letter of Credit issued
hereunder, or
(ii) there shall be imposed on the Underlying Issuer
or the Lender Group any other condition regarding any Underlying Letter of
Credit or any Letter of Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Base Rate Loans hereunder. The determination by Agent of any
amount due pursuant to this Section, as set forth in a certificate setting forth
the calculation thereof in reasonable detail, shall, in the absence of manifest
or demonstrable error, be final and conclusive and binding on all of the parties
hereto.
2.13. LIBOR OPTION.
(A) INTEREST AND INTEREST PAYMENT DATES. In lieu of having
interest charged at the rate based upon the Base Rate, Borrowers shall have the
option (the "LIBOR OPTION") to have interest on all or a portion of the Advances
or the Term Loan be charged at a rate of interest based upon the LIBOR Rate.
Interest on LIBOR Rate Loans shall be payable on the earliest of (i) the last
day of the Interest Period applicable thereto, (ii) the occurrence of an Event
of Default in consequence of which the Required Lenders or Agent on behalf
thereof have elected to accelerate the maturity of all or any portion of the
Obligations, or (iii) termination of this Agreement pursuant to the terms
hereof. On the last day of each applicable Interest Period, unless
Administrative Borrower properly has exercised the LIBOR Option with respect
thereto, the interest rate applicable to such LIBOR Rate Loan automatically
shall convert to the rate of interest then applicable to Base Rate Loans of the
same type hereunder. At any time that an Event of Default has occurred and is
continuing, Borrowers no longer shall have the option to request that Advances
or the Term Loan bear interest at a rate based upon the LIBOR Rate and Agent
shall have the right to convert the interest rate on all outstanding LIBOR Rate
Loans to the rate then applicable to Base Rate Loans hereunder.
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(B) LIBOR ELECTION.
(i) Administrative Borrower may, at any time and
from time to time, so long as no Event of Default has occurred and is
continuing, elect to exercise the LIBOR Option by notifying Agent prior to 11:00
a.m. (California time) at least 3 Business Days prior to the commencement of the
proposed Interest Period (the "LIBOR DEADLINE"). Notice of Administrative
Borrower's election of the LIBOR Option for a permitted portion of the Advances
or the Term Loan and an Interest Period pursuant to this Section shall be made
by delivery to Agent of a LIBOR Notice received by Agent before the LIBOR
Deadline, or by telephonic notice received by Agent before the LIBOR Deadline
(to be confirmed by delivery to Agent of a LIBOR Notice received by Agent prior
to 5:00 p.m. (California time) on the same day). Promptly upon its receipt of
each such LIBOR Notice, Agent shall provide a copy thereof to each of the
Lenders having a Revolver Commitment.
(ii) Each LIBOR Notice shall be irrevocable and
binding on Borrowers. In connection with each LIBOR Rate Loan, each Borrower
shall indemnify, defend, and hold Agent and the Lenders harmless against any
loss, cost, or expense incurred by Agent or any Lender as a result of (a) the
payment of any principal of any LIBOR Rate Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any LIBOR Rate Loan other than on the last day
of the Interest Period applicable thereto, or (c) the failure to borrow,
convert, continue or prepay any LIBOR Rate Loan on the date specified in any
LIBOR Notice delivered pursuant hereto (such losses, costs, and expenses,
collectively, "FUNDING LOSSES"). Funding Losses shall, with respect to Agent or
any Lender, be deemed to equal the amount determined by Agent or such Lender to
be the excess, if any, of (i) the amount of interest that would have accrued on
the principal amount of such LIBOR Rate Loan had such event not occurred, at the
LIBOR Rate that would have been applicable thereto, for the period from the date
of such event to the last day of the then current Interest Period therefor (or,
in the case of a failure to borrow, convert or continue, for the period that
would have been the Interest Period therefor), MINUS (ii) the amount of interest
that would accrue on such principal amount for such period at the interest rate
which Agent or such Lender would be offered were it to be offered, at the
commencement of such period, Dollar deposits of a comparable amount and period
in the London interbank market. A certificate of Agent or a Lender delivered to
Administrative Borrower setting forth any amount or amounts that Agent or such
Lender is entitled to receive pursuant to this SECTION 2.13 shall be conclusive
absent manifest error.
(iii) Borrowers shall have not more than 10 LIBOR Rate
Loans in effect at any given time. Borrowers only may exercise the LIBOR Option
for LIBOR Rate Loans of at least $1,000,000 and integral multiples of $500,000
in excess thereof.
(C) PREPAYMENTS. Borrowers may prepay LIBOR Rate Loans at
any time; PROVIDED, HOWEVER, that in the event that LIBOR Rate Loans are prepaid
on any date that is not the last day of the Interest Period applicable thereto,
including as a result of any automatic prepayment through the required
application by Agent of proceeds of Borrowers' and their Subsidiaries'
Collections in accordance with SECTION 2.4(B) or for any other reason, including
early termination of the term of this Agreement or acceleration of all or any
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portion of the Obligations pursuant to the terms hereof, each Borrower shall
indemnify, defend, and hold Agent and the Lenders and their Participants
harmless against any and all Funding Losses in accordance with clause (b)(ii)
above.
(D) SPECIAL PROVISIONS APPLICABLE TO LIBOR RATE.
(i) The LIBOR Rate may be adjusted by Agent with
respect to any Lender on a prospective basis to take into account any additional
or increased costs to such Lender of maintaining or obtaining any eurodollar
deposits or increased costs, in each case, due to changes in applicable law
occurring subsequent to the commencement of the then applicable Interest Period,
including changes in tax laws (except changes of general applicability in
corporate income tax laws) and changes in the reserve requirements imposed by
the Board of Governors of the Federal Reserve System (or any successor),
excluding the Reserve Percentage, which additional or increased costs would
increase the cost of funding loans bearing interest at the LIBOR Rate. In any
such event, the affected Lender shall give Administrative Borrower and Agent
notice of such a determination and adjustment and Agent promptly shall transmit
the notice to each other Lender and, upon its receipt of the notice from the
affected Lender, Administrative Borrower may, by notice to such affected Lender
(y) require such Lender to furnish to Administrative Borrower a statement
setting forth the basis for adjusting such LIBOR Rate and the method for
determining the amount of such adjustment, or (z) repay the LIBOR Rate Loans
with respect to which such adjustment is made (together with any amounts due
under clause (b)(ii) above).
(ii) In the event that any change in market
conditions or any law, regulation, treaty, or directive, or any change therein
or in the interpretation of application thereof, shall at any time after the
date hereof, in the reasonable opinion of any Lender, make it unlawful or
impractical for such Lender to fund or maintain LIBOR Advances or to continue
such funding or maintaining, or to determine or charge interest rates at the
LIBOR Rate, such Lender shall give notice of such changed circumstances to Agent
and Administrative Borrower and Agent promptly shall transmit the notice to each
other Lender and (y) in the case of any LIBOR Rate Loans of such Lender that are
outstanding, the date specified in such Lender's notice shall be deemed to be
the last day of the Interest Period of such LIBOR Rate Loans, and interest upon
the LIBOR Rate Loans of such Lender thereafter shall accrue interest at the rate
then applicable to Base Rate Loans, and (z) Borrowers shall not be entitled to
elect the LIBOR Option with respect to any Advances of such Lender or such
Lender's portion of the Term Loan until such Lender determines that it would no
longer be unlawful or impractical to do so.
(E) NO REQUIREMENT OF MATCHED FUNDING. Anything to the
contrary contained herein notwithstanding, neither Agent, nor any Lender, nor
any of their Participants, is required actually to acquire eurodollar deposits
to fund or otherwise match fund any Obligation as to which interest accrues at
the LIBOR Rate. The provisions of this Section shall apply as if each Lender or
its Participants had match funded any Obligation as to which interest is
accruing at the LIBOR Rate by acquiring eurodollar deposits for each Interest
Period in the amount of the LIBOR Rate Loans.
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2.14. CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), has the effect of reducing the return on such Lender's or
such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof. Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
2.15. JOINT AND SEVERAL LIABILITY OF BORROWERS.
(a) Each Borrower is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender Group under this Agreement, for the
mutual benefit, directly and indirectly, of each Borrower and in consideration
of the undertakings of the other Borrowers to accept joint and several liability
for the Obligations.
(b) Each Borrower, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrowers, with respect to the
payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this SECTION 2.15), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each Borrower without preferences or distinction among
them.
(c) If and to the extent that any Borrower shall fail to
make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Borrowers will make such payment with respect to, or
perform, such Obligation.
(d) The Obligations of each Borrower under the provisions of
this SECTION 2.15 constitute the absolute and unconditional, full recourse
Obligations of each Borrower enforceable against each Borrower to the full
extent of its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstances whatsoever.
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(e) Except as otherwise expressly provided in this
Agreement, each Borrower hereby waives notice of acceptance of its joint and
several liability, notice of any Advances or Letters of Credit issued under or
pursuant to this Agreement, notice of the occurrence of any Default, Event of
Default, or of any demand for any payment under this Agreement, notice of any
action at any time taken or omitted by Agent or Lenders under or in respect of
any of the Obligations, any requirement of diligence or to mitigate damages and,
generally, to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). Each Borrower hereby assents to, and
waives notice of, any extension or postponement of the time for the payment of
any of the Obligations, the acceptance of any payment of any of the Obligations,
the acceptance of any partial payment thereon, any waiver, consent or other
action or acquiescence by Agent or Lenders at any time or times in respect of
any default by any Borrower in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all other
indulgences whatsoever by Agent or Lenders in respect of any of the Obligations,
and the taking, addition, substitution or release, in whole or in part, at any
time or times, of any security for any of the Obligations or the addition,
substitution or release, in whole or in part, of any Borrower. Without limiting
the generality of the foregoing, each Borrower assents to any other action or
delay in acting or failure to act on the part of any Agent or Lender with
respect to the failure by any Borrower to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
SECTION 2.15 afford grounds for terminating, discharging or relieving any
Borrower, in whole or in part, from any of its Obligations under this SECTION
2.15, it being the intention of each Borrower that, so long as any of the
Obligations hereunder remain unsatisfied, the Obligations of each Borrower under
this SECTION 2.15 shall not be discharged except by performance and then only to
the extent of such performance. The Obligations of each Borrower under this
SECTION 2.15 shall not be diminished or rendered unenforceable by any winding
up, reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to any Borrower or any Agent or Lender.
(f) Each Borrower represents and warrants to Agent and
Lenders that such Borrower is currently informed of the financial condition of
Borrowers and of all other circumstances which a diligent inquiry would reveal
and which bear upon the risk of nonpayment of the Obligations. Each Borrower
further represents and warrants to Agent and Lenders that such Borrower has read
and understands the terms and conditions of the Loan Documents. Each Borrower
hereby covenants that such Borrower will continue to keep informed of Borrowers'
financial condition, the financial condition of other guarantors, if any, and of
all other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.
(g) The provisions of this SECTION 2.15 are made for the
benefit of Agent, Lenders and their respective successors and assigns, and may
be enforced by it or them from time to time against any or all Borrowers as
often as occasion therefor may arise and without requirement on the part of any
such Agent, Lender, successor or assign first to marshal any
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of its or their claims or to exercise any of its or their rights against any
Borrower or to exhaust any remedies available to it or them against any Borrower
or to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
SECTION 2.15 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Agent or Lender upon the insolvency,
bankruptcy or reorganization of any Borrower, or otherwise, the provisions of
this SECTION 2.15 will forthwith be reinstated in effect, as though such payment
had not been made.
(h) Each Borrower hereby agrees that it will not enforce any
of its rights of contribution or subrogation against any other Borrower with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to Agent or Lenders with respect to any of
the Obligations or any collateral security therefor until such time as all of
the Obligations have been paid in full in cash. Any claim which any Borrower may
have against any other Borrower with respect to any payments to any Agent or
Lender hereunder or under any other Loan Documents are hereby expressly made
subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.
(i) Each Borrower hereby agrees that, after the occurrence
and during the continuance of any Default or Event of Default, the payment of
any amounts due with respect to the indebtedness owing by any Borrower to any
other Borrower is hereby subordinated to the prior payment in full in cash of
the Obligations. Each Borrower hereby agrees that after the occurrence and
during the continuance of any Default or Event of Default, such Borrower will
not demand, xxx for or otherwise attempt to collect any indebtedness of any
other Borrower owing to such Borrower until the Obligations shall have been paid
in full in cash. If, notwithstanding the foregoing sentence, such Borrower shall
collect, enforce or receive any amounts in respect of such indebtedness, such
amounts shall be collected, enforced and received by such Borrower as trustee
for Agent, and such Borrower shall deliver any such amounts to Agent for
application to the Obligations in accordance with SECTION 2.4(B).
(j) The Credit Parties have guaranteed the Obligations of
Borrower pursuant to the Guaranty.
2.16. REGISTERED LOAN. Administrative Borrower agrees to record the
Term Loan on the Register referred to in SECTION 14.1(H). The Term Loan recorded
on the Register (the "REGISTERED LOAN") shall not be evidenced by promissory
notes. Once recorded on the Register, the Term Loan may not be removed from the
Register so long as it remains outstanding.
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3. CONDITIONS; TERM OF AGREEMENT.
3.1. CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of each Lender to make its initial extension of credit provided for
hereunder, is subject to the fulfillment, to the satisfaction of Agent and each
Lender (the making of such initial extension of credit by a Lender being
conclusively deemed to be its satisfaction or waiver of the following), of each
of the following conditions precedent:
(a) the Closing Date shall occur on or before May 7, 2004;
(b) Agent shall have received a Filing Authorization Letter,
duly executed by each Company, together with appropriate financing statements
duly filed in such office or offices as may be necessary or, in the opinion of
Agent, desirable to perfect the Agent's Liens in and to the Collateral, and
Agent shall have received searches reflecting the filing of all such financing
statements;
(c) Agent shall have received title searches with respect to
the Real Property identified on Schedule 5.21, the results of which shall be
reasonably satisfactory to Agent;
(d) Agent shall have received each of the following
documents, in form and substance satisfactory to Agent, duly executed, and each
such document shall be in full force and effect:
(i) the Aircraft Mortgage,
(ii) the Cash Management Agreements,
(iii) the Control Agreements,
(iv) the Disbursement Letter,
(v) the Fee Letter,
(vi) the Guaranty,
(vii) the Intercompany Subordination Agreement,
(viii) the Intercreditor Agreement between Agent and
the holders of the Subordinated Debt,
(ix) the Mortgages with respect to the Real
Properties identified on SCHEDULE R-1,
(x) the Pay-Off Letter, together with termination
statements and other documentation evidencing the termination by Existing Lender
of its Liens in and to the properties and assets of Companies (other than Liens
on cash collateral in an amount not to exceed $8,258,205.30 securing the
Companies' obligations under the Wachovia L/Cs), and
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(xi) the Stock Pledge Agreement, together with all
certificates representing the shares of Stock pledged thereunder, as well as
Stock powers with respect thereto endorsed in blank;
(e) Agent shall have received a certificate from the
Secretary of each Company (i) attesting to the resolutions of such Company's
board of directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Company is a party, (ii)
authorizing specific officers of such Company to execute the same, and (iii)
attesting to the incumbency and signatures of such specific officers of such
Company;
(f) Agent shall have received copies of each Company's
Governing Documents, as amended, modified, or supplemented to the Closing Date,
certified by the Secretary of such Company;
(g) Agent shall have received a certificate of status with
respect to each Company, dated within 10 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Company, which certificate shall indicate that such Company
is in good standing in such jurisdiction;
(h) Agent shall have received certificates of status with
respect to each Company, each dated within 30 days of the Closing Date, such
certificates to be issued by the appropriate officer of the jurisdictions (other
than the jurisdiction of organization of such Company) in which its failure to
be duly qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that such Company is in good standing in such
jurisdictions;
(i) Agent shall have received a certificate of insurance,
together with the endorsements thereto, as are required by SECTION 6.8, the form
and substance of which shall be satisfactory to Agent;
(j) Intentionally Omitted;
(k) Agent shall have received opinions of Companies' counsel
in form and substance satisfactory to Agent;
(l) Agent shall have received satisfactory evidence
(including a certificate of the chief financial officer of JRCC) that all tax
returns required to be filed by Companies have been timely filed and all taxes
upon Companies or their properties, assets, income, and franchises (including
Real Property taxes, sales taxes, and payroll taxes) have been paid prior to
delinquency, except such taxes that are the subject of a Permitted Protest;
(m) Borrowers shall have the Required Availability after
giving effect to the initial extensions of credit hereunder and the payment of
all fees and expenses required to be paid by Borrowers on the Closing Date under
this Agreement or the other Loan Documents;
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(n) Agent shall have completed its business, legal, and
collateral due diligence, including (i) a review of regulatory matters
applicable to Companies and a review of Companies' (A) deferment of tax
liability associated with forgiveness of Indebtedness and (B) material
agreements, and the results thereof shall be satisfactory to Agent, (ii) a
collateral audit and review of Companies' books and records and verification of
Companies' representations and warranties to the Lender Group, the results of
which shall be satisfactory to Agent, (iii) a review of Borrowers' January 31,
2004, February 29, 2004 and March 31, 2004 financial statements, the results of
which shall be satisfactory to Agent, and (iv) an inspection of each of the
locations where Companies' Inventory is located, the results of which shall be
satisfactory to Agent;
(o) Agent shall have received completed reference checks
with respect to the chief executive officer and chief financial officer of the
Companies, the results of which are satisfactory to Agent in its sole
discretion;
(p) Agent shall have received the Inventory physical, the
results of which shall be satisfactory to Agent;
(q) Agent shall have received any modification to the
Closing Date Business Plan (which business plan has previously been delivered to
Agent) and any such modification shall be satisfactory to Agent;
(r) Borrowers shall have paid all Lender Group Expenses
incurred in connection with the transactions evidenced by this Agreement;
(s) Agent shall have received from the Companies' copies of
all environmental reports which Agent has requested to inspect, and the results
thereof shall be satisfactory to Agent;
(t) Agent shall have received copies of each of the
agreements listed on SCHEDULE 6(I) of the Representations and Warranties of
Officers of JRCC, together with a certificate of the Secretary of the applicable
Company certifying each such document as being a true, correct, and complete
copy thereof;
(u) Companies shall have received all licenses, approvals or
evidence of other actions required by any Governmental Authority in connection
with the execution and delivery by Companies of the Loan Document or with the
consummation of the transactions contemplated thereby;
(v) Companies shall have obtained confirmation of the Plan
of Reorganization; any modification of such Plan of Reorganization shall contain
terms and provisions reasonably acceptable to Agent and shall otherwise be in
form and substance reasonably acceptable to Agent;
(w) the Plan of Reorganization shall have been confirmed by
a final non-appealable order entered by the Bankruptcy Court (the "Confirmation
Order"), in form and substance reasonably acceptable to Agent, and which has not
been stayed by the Bankruptcy
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Court or by any other court having jurisdiction to issue any such stay; the
Confirmation Order shall have been entered upon proper notice to all parties to
be bound by the Plan of Reorganization, all as may be required by the Bankruptcy
Code, the Federal Rules of Bankruptcy Procedure and any applicable local
bankruptcy rules; and in addition to the foregoing, unless waived by Agent, the
time to appeal the Confirmation Order or to seek review, rehearing, or
certiorari with respect to the Confirmation Order must have expired, no appeal
or petition for review, rehearing or certiorari with respect to the provisions
of the Confirmation Order may be pending, and the Confirmation Order must
otherwise be in full force and effect;
(x) the conditions precedent to the confirmation of the Plan
of Reorganization set forth in Article 5.1(a) of the Plan of Reorganization
shall have occurred and the conditions precedent to the "Effective Date" set
forth in Article 5.1(b) of the Plan of Reorganization shall have occurred; in
each case, none of such conditions precedent shall have been waived by Companies
or the Creditors Committee (as defined in the Plan of Reorganization) without
the prior written consent of Agent; with respect to such conditions precedent to
the confirmation of the Plan of Reorganization and Effective Date, Companies
shall have confirmed to Agent in writing that such conditions precedent have
been satisfied or Companies;
(y) Agent shall have verified compliance with the Patriot
Act;
(z) Agent shall have received a duly executed Agreement
Among Lenders; and
(aa) all other documents and legal matters in connection with
the transactions contemplated by this Agreement shall have been delivered,
executed, or recorded and shall be in form and substance satisfactory to Agent.
3.2. CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to continue to make
Advances (or otherwise extend credit hereunder) is subject to the fulfillment,
on or before the date applicable thereto, of each of the conditions subsequent
set forth below (the failure by Companies to so perform or cause to be performed
constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to Agent
certified copies of the policies of insurance, together with the endorsements
thereto, as are required by SECTION 6.8, the form and substance of which shall
be satisfactory to Agent and its counsel;
(b) within 60 days of the Closing Date, Agent shall have
received Mortgages on the Real Property identified on SCHEDULE K-1 that was not
transferred or sold in connection with the Real Property Transaction;
(c) Companies shall use their commercially reasonable
efforts to deliver to Agent, no later 90 days after the Closing Date, Collateral
Access Agreements from each of
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any lessor, warehouseman, processor, consignee, or other Person in possession
of, having a Lien upon, or having rights or interests in any Company's Books,
Equipment or Inventory;
(d) Companies shall deliver to Agent, no later than 60 days
after the Closing Date, lien releases, in form and substance reasonably
acceptable to the Required Lenders, of all Liens on the aircraft engines
attached to the aircraft subject to the Aircraft Mortgage; and
(e) Companies shall deliver to Agent, no later than 30 days
after the Closing Date, an Attornment, Subordination and Non-Disturbance
Agreement, duly executed by DTE Clover, LLC, Xxxxxxx Processing Company and
Agent.
3.3. CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation
of the Lender Group (or any member thereof) to make any Advances hereunder at
any time (or to extend any other credit hereunder) shall be subject to the
following conditions precedent:
(a) the representations and warranties contained in this
Agreement and the other Loan Documents shall be true and correct in all material
respects on and as of the date of such extension of credit, as though made on
and as of such date (except to the extent that such representations and
warranties relate solely to an earlier date);
(b) no Default or Event of Default shall have occurred and
be continuing on the date of such extension of credit, nor shall either result
from the making thereof;
(c) no injunction, writ, restraining order, or other order
of any nature restricting or prohibiting, directly or indirectly, the extending
of such credit shall have been issued and remain in force by any Governmental
Authority against any Company, Agent, any Lender, or any of their Affiliates;
and
(d) no Material Adverse Change shall have occurred.
3.4. TERM. This Agreement shall continue in full force and effect for
a term ending on May 6, 2009 (the "MATURITY DATE"). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders,
shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.
3.5. EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrowers with respect to outstanding Letters of Credit and including all Bank
Product Obligations) immediately shall become due and payable without notice or
demand (including (a) either (i) providing cash collateral to be held by Agent
for the benefit of those Lenders with a Revolver Commitment in an amount equal
to 105% of the Letter of Credit Usage, or (ii) causing the original Letters of
Credit to be returned to the Issuing Lender, and (b) providing cash collateral
(in an amount determined by Agent as sufficient to satisfy the reasonably
estimated credit exposure) to be held by Agent for the benefit of the Bank
Product Providers with respect to the Bank Product Obligations). No termination
of this Agreement, however, shall relieve or discharge
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Companies of their duties, Obligations, or covenants hereunder or under any
other Loan Document and the Agent's Liens in the Collateral shall remain in
effect until all Obligations have been paid in full and the Lender Group's
obligations to provide additional credit hereunder have been terminated. When
this Agreement has been terminated and all of the Obligations have been paid in
full and the Lender Group's obligations to provide additional credit under the
Loan Documents have been terminated irrevocably, Agent will, at Borrowers' sole
expense, execute and deliver any termination statements, lien releases, mortgage
releases, re-assignments of trademarks, discharges of security interests, and
other similar discharge or release documents (and, if applicable, in recordable
form) as are reasonably necessary to release, as of record, the Agent's Liens
and all notices of security interests and liens previously filed by Agent with
respect to the Obligations.
3.6. EARLY TERMINATION BY BORROWERS. Borrowers have the option, at
any time upon 90 days prior written notice by Administrative Borrower to Agent,
to terminate this Agreement by paying to Agent, in cash, the Obligations
(including (a) either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender, and (b) providing cash collateral (in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Agent for the benefit of the Bank Product
Providers with respect to the Bank Product Obligations), in full, together with
the Applicable Prepayment Premium (to be allocated based upon agreements between
Agent and individual Lenders) and the Applicable Term Loan Prepayment Premium
times the amount of the Term Loan prepaid (to be allocated to the Lenders
holding the Term Loan). If Administrative Borrower has sent a notice of
termination pursuant to the provisions of this Section, then the Commitments
shall terminate and Borrowers shall be obligated to repay the Obligations
(including (a) either (i) providing cash collateral to be held by Agent for the
benefit of those Lenders with a Revolver Commitment in an amount equal to 105%
of the Letter of Credit Usage, or (ii) causing the original Letters of Credit to
be returned to the Issuing Lender, and (b) providing cash collateral (in an
amount determined by Agent as sufficient to satisfy the reasonably estimated
credit exposure) to be held by Agent for the benefit of the Bank Product
Providers with respect to the Bank Product Obligations), in full, together with
the Applicable Prepayment Premium (to be allocated based upon agreements between
Agent and individual Lenders) and the Applicable Term Loan Prepayment Premium
times the amount of the Term Loan prepaid (to be allocated to the Lenders
holding the Term Loan), on the date set forth as the date of termination of this
Agreement in such notice. In the event of the termination of this Agreement and
repayment of the Obligations at any time prior to the Maturity Date, for any
other reason, including (a) termination upon the election of the Required
Lenders to terminate after the occurrence and during the continuation of an
Event of Default, (b) foreclosure and sale of Collateral, (c) sale of the
Collateral in any Insolvency Proceeding, or (d) restructure, reorganization or
compromise of the Obligations by the confirmation of a plan of reorganization or
any other plan of compromise, restructure, or arrangement in any Insolvency
Proceeding, then, in view of the impracticability and extreme difficulty of
ascertaining the actual amount of damages to the Lender Group or profits lost by
the Lender Group as a result of such early termination, and by mutual agreement
of the parties as to a
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reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrowers shall pay to Agent the Applicable Prepayment Premium (to
be allocated based upon agreements between Agent and individual Lenders),
measured as of the date of such termination and the Applicable Term Loan
Prepayment Premium times the amount of the Term Loan prepaid (to be allocated to
the Lenders holding the Term Loan).
4. CREATION OF SECURITY INTEREST.
4.1. GRANT OF SECURITY INTEREST. Each Company hereby grants to Agent,
for the benefit of the Lender Group and the Bank Product Providers, a continuing
security interest in all of its right, title, and interest in all currently
existing and hereafter acquired or arising Company Collateral in order to secure
prompt repayment of any and all of the Obligations in accordance with the terms
and conditions of the Loan Documents and in order to secure prompt performance
by Companies of each of their covenants and duties under the Loan Documents. The
Agent's Liens in and to the Company Collateral shall attach to all Company
Collateral without further act on the part of Agent or Companies. Anything
contained in this Agreement or any other Loan Document to the contrary
notwithstanding, except for Permitted Dispositions, Companies have no authority,
express or implied, to dispose of any item or portion of the Collateral.
4.2. NEGOTIABLE COLLATERAL. In the event that any Company Collateral,
including proceeds, is evidenced by or consists of Negotiable Collateral, and if
and to the extent that Agent determines that perfection or priority of Agent's
security interest is dependent on or enhanced by possession, the applicable
Company, promptly upon the request of Agent, shall endorse and deliver physical
possession of such Negotiable Collateral to Agent.
4.3. COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE
COLLATERAL. At any time after the occurrence and during the continuation of an
Event of Default, Agent or Agent's designee may (a) notify Account Debtors of
Companies that Companies' Accounts, chattel paper, or General Intangibles have
been assigned to Agent or that Agent has a security interest therein, or (b)
collect Companies' Accounts, chattel paper, or General Intangibles directly and
charge the collection costs and expenses to the Loan Account. Each Company
agrees that it will hold in trust for the Lender Group, as the Lender Group's
trustee, any of its or its Subsidiaries' Collections that it receives and
immediately will deliver such Collections to Agent or a Cash Management Bank in
their original form as received by such Company.
4.4. FILING OF FINANCING STATEMENTS; COMMERCIAL TORT CLAIMS; DELIVERY
OF ADDITIONAL DOCUMENTATION REQUIRED.
(a) Companies authorize Agent to file any financing
statement necessary or desirable to effectuate the transactions contemplated by
the Loan Documents, and any continuation statement or amendment with respect
thereto, in any appropriate filing office without the signature of Borrowers
where permitted by applicable law. Companies hereby ratify the filing of any
financing statement filed without the signature of Companies prior to the date
hereof.
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(b) If Companies acquire any commercial tort claims after
the date hereof and if the Companies reasonably believe their aggregate recovery
under such claim will exceed $100,000, Companies shall promptly (but in any
event within 5 days after the date on which the applicable Company files its
claim with a court with a view to prosecuting such claim) deliver to Agent a
written description of such commercial tort claim and shall deliver a written
agreement, in form and substance reasonably satisfactory to Agent, pursuant to
which such Company, as applicable, shall grant a perfected security interest in
all of its right, title and interest in and to such commercial tort claim to
Agent, as security for the Obligations (a "COMMERCIAL TORT CLAIM ASSIGNMENT").
(c) At any time upon the request of Agent, Companies shall
execute or deliver to Agent any and all financing statements, original financing
statements in lieu of continuation statements, amendments to financing
statements, fixture filings, security agreements, pledges, assignments,
Commercial Tort Claim Assignments, endorsements of certificates of title, and
all other documents (collectively, the "ADDITIONAL DOCUMENTS") that Agent may
request in its Permitted Discretion, in form and substance reasonably
satisfactory to Agent, to create, perfect, and continue perfected or to better
perfect the Agent's Liens in the assets of Companies (whether now owned or
hereafter arising or acquired, tangible or intangible, real or personal), to
create and perfect Liens in favor of Agent in any owned Real Property acquired
after the Closing Date, and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, each Company authorizes Agent to execute any such
Additional Documents in the applicable Company's name and authorizes Agent to
file such executed Additional Documents in any appropriate filing office. In
addition, on such periodic basis as Agent shall require, Companies shall (i)
provide Agent with a report of all new material patentable, copyrightable, or
trademarkable materials acquired or generated by any Company during the prior
period, (ii) cause all material patents, copyrights, and trademarks acquired or
generated by Companies that are not already the subject of a registration with
the appropriate filing office (or an application therefor diligently prosecuted)
to be registered with such appropriate filing office in a manner sufficient to
impart constructive notice of such Company's ownership thereof, and (iii) cause
to be prepared, executed, and delivered to Agent supplemental schedules to the
applicable Loan Documents to identify such patents, copyrights, and trademarks
as being subject to the security interests created thereunder; PROVIDED,
HOWEVER, that none of Companies shall register with the U.S. Copyright Office
any unregistered copyrights (whether in existence on the Closing Date or
thereafter acquired, arising, or developed) unless (i) the applicable Person
provides Agent with written notice of its intent to register such copyrights not
less than 30 days prior to the date of the proposed registration, and (ii) prior
to such registration, the applicable Person executes and delivers to Agent a
copyright security agreement in form and substance reasonably satisfactory to
Agent, supplemental schedules to any existing copyright security agreement, or
such other documentation as Agent reasonably deems necessary in order to perfect
and continue perfected Agent's Liens on such copyrights following such
registration.
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4.5. POWER OF ATTORNEY. Each Company hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as such Company's true and lawful attorney, with
power to (a) if such Company refuses to, or fails timely to execute and deliver
any of the documents described in SECTION 4.4, sign the name of such Company on
any of the documents described in SECTION 4.4, (b) at any time that an Event of
Default has occurred and is continuing, sign such Company's name on any invoice
or xxxx of lading relating to the Company Collateral, drafts against Account
Debtors, or notices to Account Debtors, (c) send requests for verification of
Companies' Accounts, (d) endorse such Company's name on any of its payment items
(including all of its Collections) that may come into the Lender Group's
possession, (e) at any time that an Event of Default has occurred and is
continuing, make, settle, and adjust all claims under such Company's policies of
insurance and make all determinations and decisions with respect to such
policies of insurance, and (f) at any time that an Event of Default has occurred
and is continuing, settle and adjust disputes and claims respecting Companies'
Accounts, chattel paper, or General Intangibles directly with Account Debtors,
for amounts and upon terms that Agent determines to be reasonable, and Agent may
cause to be executed and delivered any documents and releases that Agent
determines to be necessary. The appointment of Agent as each Company's attorney,
and each and every one of its rights and powers, being coupled with an interest,
is irrevocable until all of the Obligations have been fully and finally repaid
and performed and the Lender Group's obligations to extend credit hereunder are
terminated.
4.6. RIGHT TO INSPECT. Agent (through any of its officers, employees,
or agents) shall have the right, from time to time hereafter to inspect the
Books and make copies or abstracts thereof and to check, test, and appraise the
Collateral, or any portion thereof, in order to verify Companies' financial
condition or the amount, quality, value, condition of, or any other matter
relating to, the Collateral. Representatives of each Lender will be permitted to
participate in each such inspection, check, test or appraisal conducted by Agent
as described in the immediately preceding sentence. Agent agrees that it will
conduct an inspection, check, test or appraisal if so reasonably requested by
the Required Term Loan Lenders.
4.7. CONTROL AGREEMENTS. Companies agree that they will take any or
all reasonable steps in order for Agent to obtain control in accordance with
Sections 8-106, 9-104, 9-105, 9-106, and 9-107 of the Code with respect to
(subject to the proviso contained in SECTION 7.12) all of their Securities
Accounts, Deposit Accounts, electronic chattel paper, Investment Property, and
letter-of-credit rights. Upon the occurrence and during the continuance of a
Default or Event of Default, Agent may notify any bank or securities
intermediary to liquidate the applicable Deposit Account or Securities Account
or any related Investment Property maintained or held thereby and remit the
proceeds thereof to the Agent's Account.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement, each
Company makes the following representations and warranties to the Lender Group
which shall be true, correct, and complete, in all material respects, as of the
date hereof, and shall be
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true, correct, and complete, in all material respects, as of the Closing Date,
and at and as of the date of the making of each Advance (or other extension of
credit) made thereafter, as though made on and as of the date of such Advance
(or other extension of credit) (except to the extent that such representations
and warranties relate solely to an earlier date) and such representations and
warranties shall survive the execution and delivery of this Agreement:
5.1. NO ENCUMBRANCES. Each Company has good and indefeasible title
to, or a valid leasehold interest in, their personal property assets and good
and marketable title to, or a valid leasehold interest in, their Real Property,
in each case, free and clear of Liens except for Permitted Liens.
5.2. ELIGIBLE ACCOUNTS. As to each Account that is identified by a
Borrower as an Eligible Account in a borrowing base report submitted to Agent,
such Account (or the portion of such Account identified as an Eligible Account
in such borrowing base report) is (a) a bona fide existing payment obligations
of the applicable Account Debtors created by the sale and delivery of Inventory
or the rendition of services to such Account Debtors in the ordinary course of
Borrowers' business, (b) owed to Borrowers without any known defenses, disputes,
offsets, counterclaims, or rights of return or cancellation, and (c) not
excluded as ineligible by virtue of one or more of the excluding criteria set
forth in the definition of Eligible Accounts.
5.3. ELIGIBLE INVENTORY. As to each item of Inventory that is
identified by Administrative Borrower as Eligible Inventory in a borrowing base
report submitted to Agent, such Inventory is not excluded as ineligible by
virtue of one or more of the excluding criteria set forth in the definition of
Eligible Inventory.
5.4. EQUIPMENT. All of the Equipment of Companies is used or held for
use in their business and is fit for such purposes.
5.5. LOCATION OF INVENTORY AND EQUIPMENT. The Inventory and Equipment
of Companies are not stored with a bailee, warehouseman, or similar party and
are located only at, or in-transit between, the locations identified on SCHEDULE
5.5 (as such Schedule may be updated pursuant to SECTION 6.9).
5.6. INVENTORY RECORDS. Each Company keeps correct and accurate
records itemizing and describing the type, quality, and quantity of its
Inventory and the book value thereof.
5.7. STATE OF INCORPORATION; LOCATION OF CHIEF EXECUTIVE OFFICE;
ORGANIZATIONAL IDENTIFICATION NUMBER; COMMERCIAL TORT CLAIMS.
(a) The jurisdiction of organization of each Company and
each of its Subsidiaries is set forth on SCHEDULE 5.7(A).
(b) The chief executive office of each Company and each of
its Subsidiaries is located at the address indicated on SCHEDULE 5.7(B) (as such
Schedule may be updated pursuant to SECTION 6.9).
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(c) Each Company's organizational identification number, if
any, are identified on SCHEDULE 5.7(C).
(d) As of the Closing Date, Companies do not hold any
commercial tort claims, except as set forth on SCHEDULE 5.7(D).
5.8. DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Each Company is duly organized and existing and in good
standing under the laws of the jurisdiction of its organization and qualified to
do business in any state where the failure to be so qualified reasonably could
be expected to result in a Material Adverse Change.
(b) Set forth on SCHEDULE 5.8(B), is a complete and accurate
description of the authorized capital Stock of each Company (prior to the
Permitted Corporate Transactions), by class, and, as of the Closing Date, a
description of the number of shares of each such class that are issued and
outstanding. Other than as described on SCHEDULE 5.8(B), there are no
subscriptions, options, warrants, or calls relating to any shares of each
Company's capital Stock, including any right of conversion or exchange under any
outstanding security or other instrument. No Company is subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any shares of its capital Stock or any security convertible into or
exchangeable for any of its capital Stock.
(c) Set forth on SCHEDULE 5.8(C), is a complete and accurate
list of each Company's direct and indirect Subsidiaries (prior to the Permitted
Corporate Transactions), showing: (i) the jurisdiction of their organization,
(ii) the number of shares of each class of common and preferred Stock authorized
for each of such Subsidiaries, and (iii) the number and the percentage of the
outstanding shares of each such class owned directly or indirectly by the
applicable Company. All of the outstanding capital Stock of each such Subsidiary
has been validly issued and is fully paid and non-assessable.
(d) Except as set forth on SCHEDULE 5.8(C), there are no
subscriptions, options, warrants, or calls relating to any shares of any
Company's Subsidiaries' capital Stock, including any right of conversion or
exchange under any outstanding security or other instrument. No Company or any
of its respective Subsidiaries is subject to any obligation (contingent or
otherwise) to repurchase or otherwise acquire or retire any shares of any
Company's Subsidiaries' capital Stock or any security convertible into or
exchangeable for any such capital Stock.
5.9. DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Company, the execution, delivery, and
performance by such Company of this Agreement and the other Loan Documents to
which it is a party have been duly authorized by all necessary action on the
part of such Company.
(b) As to each Company, the execution, delivery, and
performance by such Company of this Agreement and the other Loan Documents to
which it is a party do not and
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will not (i) violate any provision of federal, state, or local law or regulation
applicable to any Company, the Governing Documents of any Company, or any order,
judgment, or decree of any court or other Governmental Authority binding on any
Company, (ii) conflict with, result in a breach of, or constitute (with due
notice or lapse of time or both) a default under any material contractual
obligation of any Company, (iii) result in or require the creation or imposition
of any Lien of any nature whatsoever upon any properties or assets of Company,
other than Permitted Liens, or (iv) require any approval of any Company's
interestholders or any approval or consent of any Person under any material
contractual obligation of any Company, other than consents or approvals that
have been obtained and that are still in force and effect.
(c) Other than the filing of financing statements, the
recordation of the Mortgages, and the recordation of other documents as is
customary in connection with secured transactions involving collateral such as
the Collateral, the execution, delivery, and performance by each Company of this
Agreement and the other Loan Documents to which such Company is a party do not
and will not require any registration with, consent, or approval of, or notice
to, or other action with or by, any Governmental Authority, other than consents
or approvals that have been obtained and that are still in force and effect.
(d) As to each Company, this Agreement and the other Loan
Documents to which such Company is a party, and all other documents contemplated
hereby and thereby, when executed and delivered by such Company will be the
legally valid and binding obligations of such Company, enforceable against such
Company in accordance with their respective terms, except as enforcement may be
limited by equitable principles or by bankruptcy, insolvency, reorganization,
moratorium, or similar laws relating to or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, perfected, and
first priority Liens, subject only to Permitted Liens
5.10. LITIGATION. Other than those matters disclosed on SCHEDULE 5.10,
and other than matters arising after the Closing Date that reasonably could not
be expected to result in a Material Adverse Change, there are no actions, suits,
or proceedings pending or, to the best knowledge of each Company, threatened
against any Company.
5.11. NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Companies that have been delivered by Companies to the Lender Group have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, Companies' financial
condition as of the date thereof and results of operations for the period then
ended. There has not been a Material Adverse Change with respect to Companies
since the date of the latest financial statements submitted to Agent on or
before the Closing Date.
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5.12. FRAUDULENT TRANSFER.
(a) Each Company is Solvent.
(b) No transfer of property is being made by any Company and
no obligation is being incurred by any Company in connection with the
transactions contemplated by this Agreement or the other Loan Documents with the
intent to hinder, delay, or defraud either present or future creditors of
Companies.
5.13. EMPLOYEE BENEFITS. Other than as set forth in SCHEDULE 5.13,
none of Companies or any of their ERISA Affiliates maintains or contributes to
any Benefit Plan.
5.14. ENVIRONMENTAL CONDITION. Except as set forth on SCHEDULE 5.14,
(a) to Companies' knowledge, none of Companies' properties or assets has ever
been used by Companies or by previous owners or operators in the disposal of, or
to produce, store, handle, treat, release, or transport, any Hazardous
Materials, where such production, storage, handling, treatment, release or
transport was in violation, in any material respect, of applicable Environmental
Law, (b) to Companies' knowledge, none of Companies' properties or assets has
ever been designated or identified in any manner pursuant to any environmental
protection statute as a Hazardous Materials disposal site, (c) none of Companies
have received notice that a Lien arising under any Environmental Law has
attached to any revenues or to any Real Property owned or operated by Companies,
and (d) none of Companies have received a summons, citation, notice, or
directive from the United States Environmental Protection Agency or any other
federal or state governmental agency concerning any action or omission by any
Company resulting in the releasing or disposing of Hazardous Materials into the
environment.
5.15. BROKERAGE FEES. Companies have not utilized the services of any
broker or finder in connection with obtaining financing from the Lender Group
under this Agreement and no brokerage commission or finders fee is payable by
Companies in connection herewith.
5.16. INTELLECTUAL PROPERTY. Each Company owns, or holds licenses in,
all trademarks, trade names, copyrights, patents, patent rights, and licenses
that are necessary to the conduct of its business as currently conducted, and
attached hereto as SCHEDULE 5.16 (as updated from time to time) is a true,
correct, and complete listing of all material patents, patent applications,
trademarks, trademark applications, copyrights, and copyright registrations as
to which each Company is the owner or is an exclusive licensee.
5.17. LEASES. Companies enjoy peaceful and undisturbed possession
under all or substantially all leases material to their business and to which
they are parties or under which they are operating and all or substantially all
of such leases are valid and subsisting and no material default by Companies
exists under any of them.
5.18. DEPOSIT ACCOUNTS AND SECURITIES ACCOUNTS. Set forth on SCHEDULE
5.18 is a listing of all of Companies' Deposit Accounts and Securities Accounts
as of the Closing
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Date, including, with respect to each bank or securities intermediary (a) the
name and address of such Person, and (b) the account numbers of the Deposit
Accounts or Securities Accounts maintained with such Person.
5.19. COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of Companies in writing to Agent or any Lender
(including all information contained in the Schedules hereto or in the other
Loan Documents) for purposes of or in connection with this Agreement, the other
Loan Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of Companies in writing to Agent or any Lender will be, true and accurate
in all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided. On the Closing Date, the Closing Date Projections represent, and as of
the date on which any other Projections are delivered to Agent, such additional
Projections represent Companies good faith best estimate of their future
performance for the periods covered thereby.
5.20. INDEBTEDNESS. Set forth on SCHEDULE 5.20 is a true and complete
list of all Indebtedness of each Company outstanding immediately prior to the
Closing Date that is to remain outstanding after the Closing Date and such
Schedule accurately reflects the aggregate principal amount of such Indebtedness
and describes the principal terms thereof.
5.21. MINING LEASES. Not less 75% of the coal to be mined by the
Companies during the calendar year ending December 31, 2004 is to be mined from
the Real Property set forth on SCHEDULE 5.21.
6. AFFIRMATIVE COVENANTS.
Each Company covenants and agrees that, until termination of all of the
Commitments and payment in full of the Obligations, Companies shall do all of
the following:
6.1. ACCOUNTING SYSTEM. Maintain a system of accounting that enables
Companies to produce financial statements in accordance with GAAP and maintain
records pertaining to the Collateral that contain information as from time to
time reasonably may be requested by Agent. Companies also shall keep a reporting
system that shows all additions, sales, claims, returns, and allowances with
respect to their sales.
6.2. COLLATERAL REPORTING. Provide Agent (and if so requested by
Agent, with copies for each Lender) with the following documents at the
following times in form satisfactory to Agent:
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======================= ========================================================
Weekly (a) a sales journal, collection journal, and credit
register since the last such schedule, a report
regarding credit memoranda that have been issued
since the last such report, and a calculation of
the Borrowing Base as of such date, and
(b) notice of all claims, offsets, or disputes
asserted by Account Debtors with respect to
Companies' Accounts.
----------------------- --------------------------------------------------------
Monthly (not later (c) Inventory coal reports of Companies' Inventory,
than the 15th day of by category, with additional detail showing
each month) additions to and deletions therefrom, and
perpetual and general ledger reconciliations,
(d) a detailed calculation of the Borrowing Base
(including detail regarding those Accounts of
Borrowers that are not Eligible Accounts),
(e) a detailed aging, by total, of the Accounts of
Borrowers, together with a reconciliation to the
detailed calculation of the Borrowing Base
previously provided to Agent,
(f) a summary aging, by vendor, of Companies'
accounts payable and any book overdraft,
(g) certification as to payment of all royalty and
other amounts under mining leases, together with
proof of such payments,
(h) a certificate that at least 75% of the coal
mined during the previous month was mined from
Real Property with respect to which Agent has
received title searches, the results of which
are satisfactory to Agent,
(i) a detailed report regarding Companies' cash and
Cash Equivalents including an indication of
which amounts constitute Qualified Cash,
(j) a calculation of Dilution for the month most
recently ended, and.
(k) a report regarding each Company's accrued, but
unpaid, AD VALOREM taxes.
----------------------- --------------------------------------------------------
Quarterly (k) a detailed list of each Company's customers, and
----------------------- --------------------------------------------------------
Upon request by Agent (l) copies of invoices in connection with Borrowers'
Accounts, credit memos, remittance advices,
deposit slips, shipping and delivery documents
in connection with Borrowers' Accounts and, for
Inventory and Equipment acquired by Companies,
purchase orders and invoices, and
(m) such other reports as to the Collateral or the
financial condition of Companies, as Agent may
reasonably request.
======================= ========================================================
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In addition, each Company agrees to cooperate fully with Agent
to facilitate and implement a system of electronic collateral reporting in order
to provide electronic reporting of each of the items set forth above.
6.3. FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent,
with copies to each Lender:
(a) as soon as available, but in any event within 30 days
(45 days in the case of a month that is the end of one of JRCC's fiscal
quarters) after the end of each month during each of JRCC's fiscal years,
(i) an unaudited consolidated and consolidating
balance sheet, income statement, and statement of cash flow covering JRCC's and
its Subsidiaries' operations during such period, and
(ii) a Compliance Certificate,
(b) as soon as available, but in any event within 90 days
after the end of each of JRCC's fiscal years,
(i) consolidated and consolidating financial
statements of JRCC and its Subsidiaries for each such fiscal year, audited by
independent certified public accountants reasonably acceptable to Agent and
certified, without any qualifications, (including any (A) "going concern" or
like qualification or exception, (B) qualification or exception as to the scope
of such audit, or (C) qualification which relates to the treatment or
classification of any item and which, as a condition to the removal of such
qualification, would require an adjustment to such item, the effect of which
would be to cause any noncompliance with the provisions of SECTION 7.18), by
such accountants to have been prepared in accordance with GAAP (such audited
financial statements to include a balance sheet, income statement, and statement
of cash flow and, if prepared, such accountants' letter to management),
(ii) a certificate of such accountants addressed to
Agent and the Lenders stating that such accountants do not have knowledge of the
existence of any Default or Event of Default under SECTION 7.18, and
(iii) a Compliance Certificate,
(c) as soon as available, but in any event within 30 days
prior to the start of each of JRCC's fiscal years, copies of Companies'
Projections, in form and substance (including as to scope and underlying
assumptions) satisfactory to Agent, in its Permitted Discretion, for the
forthcoming 3 years, year by year, and for the forthcoming fiscal year, month by
month, certified by the chief financial officer of JRCC as being such officer's
good faith estimate of the financial performance of JRCC and its Subsidiaries
during the period covered thereby,
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(d) if and when filed by any Company,
(i) Form 10-Q quarterly reports, Form 10-K annual
reports, and Form 8-K current reports (provided, however, that if such reports
are available publicly via XXXXX or any equivalent on-line service, Companies
shall be required to provide notice of such reports only),
(ii) any other filings made by any Company with the
SEC (provided, however, that if such filings are available publicly via XXXXX or
any equivalent on-line service, Companies shall be required to provide notice of
such filings only), and
(iii) any other information that is provided by JRCC
to its shareholders generally,
(e) upon the request of Agent, copies of Companies' federal
income tax returns, and any amendments thereto, filed with the Internal Revenue
Service;
(f) promptly, but in any event within 5 days after any
Company has knowledge of any event or condition that constitutes a Default or an
Event of Default, notice thereof and a statement of the curative action that
Companies propose to take with respect thereto,
(g) promptly after the commencement thereof, but in any
event within 5 days after the service of process with respect thereto on any
Company, notice of all actions, suits, or proceedings brought by or against any
Company before any Governmental Authority which, if determined adversely to such
Company, reasonably could be expected to result in a Material Adverse Change,
(h) as soon as available, but in any event within 90 days
prior to the start of each calendar year, a certificate of the chief financial
officer of Administrative Borrower identifying the Real Property from which the
Companies expect to mine not less 75% of the coal to be mined by the Companies
during such calendar year, the estimated volume with respect to each such parcel
of Real Property and, with respect to each such leased parcel of Real Property,
the applicable lessor and a copy of the applicable lease,
(i) as soon as available, but in any event within 30 days
prior to the start of each calendar year, title searches with respect to the
Real Property from which the Companies expect to mine not less 75% of the coal
to be mined by the Companies during such calendar year, the results of which
shall be satisfactory to Agent, and
(j) upon the request of Agent, any other information
reasonably requested relating to the financial condition of Companies.
In addition, JRCC agrees that no Subsidiary of JRCC will have a
fiscal year different from that of JRCC. Companies agree to cooperate with Agent
to allow Agent to consult with their independent certified public accountants if
Agent reasonably requests the right to do so and that, in such connection, their
independent certified public accountants are
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authorized to communicate with Agent and to release to Agent whatever financial
information concerning Companies that Agent reasonably may request.
6.4. INTENTIONALLY OMITTED.
6.5. RETURNS. Cause returns and allowances as between Companies and
their Account Debtors, to be substantially on the same basis and in accordance
with the usual customary practices of Companies, as they exist at the time of
the execution and delivery of this Agreement.
6.6. MAINTENANCE OF PROPERTIES. Maintain and preserve all of their
properties which are material to the proper conduct to their business in good
working order and condition, ordinary wear and tear excepted, and comply at all
times with the provisions of all leases to which it is a party as lessee, so as
to prevent any loss or forfeiture thereof or thereunder.
6.7. TAXES. Cause all assessments and taxes, whether real, personal,
or otherwise, due or payable by, or imposed, levied, or assessed against
Companies or any of their respective assets to be paid in full, before
delinquency or before the expiration of any extension period, except to the
extent that the validity of such assessment or tax shall be the subject of a
Permitted Protest. Companies will make timely payment or deposit of all tax
payments and withholding taxes required of them by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes (unless such payment or deposit is subject to a
Permitted Protest), and will, upon request, furnish Agent with proof reasonably
satisfactory to Agent indicating that the applicable Company has made such
payments or deposits.
6.8. INSURANCE.
(a) At Borrowers' expense, maintain insurance respecting
Companies' assets wherever located, covering loss or damage by fire, theft,
explosion, and all other hazards and risks as ordinarily are insured against by
other Persons engaged in the same or similar businesses. Companies also shall
maintain business interruption, public liability, and product liability
insurance, as well as insurance against larceny, embezzlement, and criminal
misappropriation. All such policies of insurance shall be in such amounts and
with such insurance companies as are reasonably satisfactory to Agent. Companies
shall deliver copies of all such policies to Agent with an endorsement naming
Agent as the sole loss payee (under a satisfactory lender's loss payable
endorsement) or additional insured, as appropriate. Each policy of insurance or
endorsement shall contain a clause requiring the insurer to give not less than
30 days prior written notice to Agent in the event of cancellation of the policy
for any reason whatsoever.
(b) Administrative Borrower shall give Agent prompt notice
of any loss covered by such insurance. Agent shall have the exclusive right to
adjust any losses claimed under any such insurance policies in excess of
$250,000 (or in any amount after the occurrence and during the continuation of
an Event of Default), without any liability to
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Companies whatsoever in respect of such adjustments. Any monies received as
payment for any loss under any insurance policy mentioned above (other than
liability insurance policies) or as payment of any award or compensation for
condemnation or taking by eminent domain, shall be paid over to Agent to be
applied in accordance with SECTION 2.4(D).
(c) Companies will not take out separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained under this SECTION 6.8, unless Agent is included thereon as an
additional insured or loss payee under a lender's loss payable endorsement.
Administrative Borrower promptly shall notify Agent whenever such separate
insurance is taken out, specifying the insurer thereunder and full particulars
as to the policies evidencing the same, and copies of such policies promptly
shall be provided to Agent.
6.9. LOCATION OF INVENTORY AND EQUIPMENT. Keep Companies' Inventory
and Equipment only at the locations identified on SCHEDULE 5.5 (or in transit
from one such location to another such location) and their chief executive
offices only at the locations identified on SCHEDULE 5.7(B); PROVIDED, HOWEVER,
that Administrative Borrower may amend SCHEDULE 5.5 and SCHEDULE 5.7 so long as
such amendment occurs by written notice to Agent not less than 30 days prior to
the date on which such Inventory or Equipment is moved to such new location or
such chief executive office is relocated, so long as such new location is within
the continental United States, and so long as, at the time of such written
notification, either (x) the applicable Company provides Agent a Collateral
Access Agreement with respect thereto or (y) the Agent establishes a reserve
against the Borrowing Base in such amounts as Agent in its Permitted Discretion
shall deem necessary or appropriate in respect of amounts at any time payable by
such Company with respect to such location.
6.10. COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Change.
6.11. LEASES. Pay when due all rents and other amounts payable under
any leases or other agreements pertaining to the mining of coal and material
leases to which any Company is a party or by which any Company's properties and
assets are bound, unless such payments are the subject of a Permitted Protest.
6.12. EXISTENCE. At all times preserve and keep in full force and
effect each Company's valid existence and good standing and any rights and
franchises material to their businesses.
6.13. ENVIRONMENTAL. Keep any property either owned or operated by any
Company free of any Environmental Liens or post bonds or other financial
assurances sufficient to satisfy the obligations or liability evidenced by such
Environmental Liens, (b) comply, in all material respects, with Environmental
Laws and provide to Agent documentation of such compliance which Agent
reasonably requests, (c) promptly notify Agent of any release of a Hazardous
Material in any reportable quantity from or onto
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property owned or operated by any Company and take any Remedial Actions required
to xxxxx said release or otherwise to come into compliance with applicable
Environmental Law, and (d) promptly, but in any event within 5 days of its
receipt thereof, provide Agent with written notice of any of the following: (i)
notice that an Environmental Lien has been filed against any of the real or
personal property of any Company, (ii) commencement of any Environmental Action
or notice that an Environmental Action will be filed against any Company, and
(iii) notice of a violation, citation, or other administrative order which
reasonably could be expected to result in a Material Adverse Change.
6.14. DISCLOSURE UPDATES. Promptly and in no event later than 5
Business Days after obtaining knowledge thereof, notify Agent if any written
information, exhibit, or report furnished to the Lender Group contained, at the
time it was furnished, any untrue statement of a material fact or omitted to
state any material fact necessary to make the statements contained therein not
misleading in light of the circumstances in which made. The foregoing to the
contrary notwithstanding, any notification pursuant to the foregoing provision
will not cure or remedy the effect of the prior untrue statement of a material
fact or omission of any material fact nor shall any such notification have the
affect of amending or modifying this Agreement or any of the Schedules hereto.
6.15. FORMATION OF SUBSIDIARIES. Contemporaneously with any Company's
formation or acquisition of any direct or indirect Subsidiary or acquires any
direct or indirect Subsidiary after the Closing Date, such Company shall (a)
cause such new Subsidiary to provide to Agent a joinder to this Agreement and
the Guaranty, together with such other security documents (including Mortgages
with respect to any Real Property (other than leasehold interests) of such new
Subsidiary and, to the extent requested by Agent, with respect to any Real
Property consisting of leasehold interests of such new Subsidiary), as well as
appropriate financing statements (and with respect to all property subject to a
Mortgage, fixture filings), all in form and substance reasonably satisfactory to
Agent (including being sufficient to grant Agent a first priority Lien (subject
to Permitted Liens) in and to the assets of such newly formed or acquired
Subsidiary), (b) provide to Agent a pledge agreement and appropriate
certificates and powers or financing statements, hypothecating all of the direct
or beneficial ownership interest in such new Subsidiary, in form and substance
reasonably satisfactory to Agent, and (c) provide to Agent all other
documentation, including one or more opinions of counsel satisfactory to Agent,
which in its opinion is appropriate with respect to the execution and delivery
of the applicable documentation referred to above (including policies of title
insurance or other documentation with respect to all property subject to a
Mortgage). Any document, agreement, or instrument executed or issued pursuant to
this SECTION 6.15 shall be a Loan Document. Companies acknowledge that no
Company may form a new Subsidiary without the prior written consent of Requisite
Lenders and nothing contained herein constitutes such a consent.
6.16. MINING. Mine at least 75% of the coal mined by Companies from
Real Property with respect to which Agent has previously received title
searches, the results of which shall have been satisfactory to Agent.
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7. NEGATIVE COVENANTS.
Each Company covenants and agrees that, until termination of all
of the Commitments and payment in full of the Obligations, Companies will not do
any of the following:
7.1. INDEBTEDNESS. Create, incur, assume, suffer to exist, guarantee,
or otherwise become or remain, directly or indirectly, liable with respect to
any Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other
Loan Documents, together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit,
(b) Indebtedness set forth on SCHEDULE 5.20,
(c) Permitted Purchase Money Indebtedness,
(d) refinancings, renewals, or extensions of Indebtedness
permitted under clauses (b) and (c) of this SECTION 7.1 (and continuance or
renewal of any Permitted Liens associated therewith) so long as: (i) the terms
and conditions of such refinancings, renewals, or extensions do not, in Agent's
reasonable judgment, materially impair the prospects of repayment of the
Obligations by Companies or materially impair Companies' creditworthiness, (ii)
such refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended or add one or more Companies as liable with
respect thereto if such additional Companies were not liable with respect to the
original Indebtedness, (iii) such refinancings, renewals, or extensions do not
result in a shortening of the average weighted maturity of the Indebtedness so
refinanced, renewed, or extended, nor are they on terms or conditions, that,
taken as a whole, are materially more burdensome or restrictive to the
applicable Company, (iv) if the Indebtedness that is refinanced, renewed, or
extended was subordinated in right of payment to the Obligations, then the terms
and conditions of the refinancing, renewal, or extension Indebtedness must
include subordination terms and conditions that are at least as favorable to the
Lender Group as those that were applicable to the refinanced, renewed, or
extended Indebtedness, and (v) the Indebtedness that is refinanced, renewed, or
extended is not recourse to any Person that is liable on account of the
Obligations other than those Persons which were obligated with respect to the
Indebtedness that was refinanced, renewed, or extended,
(e) endorsement of instruments or other payment items for
deposit,
(f) Indebtedness composing Permitted Investments, and
(g) Indebtedness evidenced by the Subordinated Debt
Documents.
7.2. LIENS. Create, incur, assume, or suffer to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens
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that are replacements of Permitted Liens to the extent that the original
Indebtedness is refinanced, renewed, or extended under SECTION 7.1(D) and so
long as the replacement Liens only encumber those assets that secured the
refinanced, renewed, or extended Indebtedness).
7.3. RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock, other than pursuant to any Permitted
Corporate Transactions.
(b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution), other than pursuant to any Permitted Corporate
Transaction.
(c) Convey, sell, lease, license, assign, transfer, or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its assets, other than in connection with any Permitted
Corporate Transaction or Real Property Transaction.
7.4. DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey,
sell, lease, license, assign, transfer, or otherwise dispose of any of the
assets of any Company.
7.5. CHANGE NAME. Change any Company's name, organizational
identification number, state of organization, or organizational identity;
PROVIDED, HOWEVER, that a Company may change its name upon at least 30 days
prior written notice by Administrative Borrower to Agent of such change and so
long as, at the time of such written notification, such Company provides any
financing statements necessary to perfect and continue perfected the Agent's
Liens.
7.6. NATURE OF BUSINESS. Make any change in the principal nature of
their business.
7.7. PREPAYMENTS AND AMENDMENTS. Except in connection with a
refinancing permitted by SECTION 7.1(D),
(a) optionally prepay, redeem, defease, purchase, or
otherwise acquire any Indebtedness of any Company, other than the Obligations in
accordance with this Agreement,
(b) make any payment on account of the Subordinated Debt
that is not permitted at such time under the terms and conditions of the
Intercreditor Agreement,
(c) directly or indirectly, amend, modify, alter, increase,
or change any of the terms or conditions of the Subordinated Debt Documents
except to the extent permitted under the Intercreditor Agreement, or
(d) directly or indirectly, amend, modify, alter, increase,
or change any of the terms or conditions of the Plan of Reorganization or any
agreement, instrument,
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document, indenture, or other writing evidencing or concerning Indebtedness
permitted under SECTION 7.1(B) or (C).
7.8. CHANGE OF CONTROL. Cause, permit, or suffer, directly or
indirectly, any Change of Control.
7.9. CONSIGNMENTS. Consign any of their Inventory or sell any of
their Inventory on xxxx and hold, sale or return, sale on approval, or other
conditional terms of sale.
7.10. DISTRIBUTIONS. Other than distributions or declaration and
payment of dividends by a Company to another Company, make any distribution or
declare or pay any dividends (in cash or other property, other than common
Stock) on, or purchase, acquire, redeem, or retire any of any Company's Stock,
of any class, whether now or hereafter outstanding.
7.11. ACCOUNTING METHODS. Modify or change their fiscal year or their
method of accounting (other than as may be required to conform to GAAP) or enter
into, modify, or terminate any agreement currently existing, or at any time
hereafter entered into with any third party accounting firm or service bureau
for the preparation or storage of Companies' accounting records without said
accounting firm or service bureau agreeing to provide Agent information
regarding Companies' financial condition.
7.12. INVESTMENTS. Except for Permitted Investments, directly or
indirectly, make or acquire any Investment, or incur any liabilities (including
contingent obligations) for or in connection with any Investment; PROVIDED,
HOWEVER, that Companies shall not have Permitted Investments (other than in the
Cash Management Accounts) in Deposit Accounts or Securities Accounts in an
aggregate amount in excess of $100,000 at any one time unless Companies, and the
applicable securities intermediary or bank have entered into Control Agreements
governing such Permitted Investments in order to perfect (and further establish)
the Agent's Liens in such Permitted Investments. Subject to the foregoing
proviso, Companies shall not establish or maintain any Deposit Account or
Securities Account unless contemporaneously with the establishment thereof Agent
shall have received a Control Agreement in respect of such Deposit Account or
Securities Account.
7.13. TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into
or permit to exist any transaction with any Affiliate of any Company except for
the Permitted Corporate Transactions, the Subordinated Debt and other
transactions that (a) are in the ordinary course of Companies' business, (b) are
upon fair and reasonable terms, (c) if they involve one or more payments by any
Company in excess of $100,000, are fully disclosed to Agent, and (d) are no less
favorable to Companies than would be obtained in an arm's length transaction
with a non-Affiliate.
7.14. SUSPENSION. Suspend or go out of a substantial portion of their
business other than in connection with a Permitted Corporate Transaction.
7.15. INTENTIONALLY OMITTED.
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7.16. USE OF PROCEEDS. Use the proceeds of the Advances and the Term
Loan for any purpose other than (a) on the Closing Date, (i) to repay in full
the outstanding principal, accrued interest, and accrued fees and expenses owing
to Existing Lender, and (ii) to pay transactional fees, costs, and expenses
incurred in connection with this Agreement, the other Loan Documents, and the
transactions contemplated hereby and thereby, and (b) thereafter, consistent
with the terms and conditions hereof, for its lawful and permitted purposes.
7.17. INVENTORY AND EQUIPMENT WITH BAILEES. Store the Inventory or
Equipment of Companies at any time now or hereafter with a bailee, warehouseman,
or similar party unless either (x) the applicable Company provides Agent a
Collateral Access Agreement executed by such bailee, warehouseman or similar
party or (y) the Agent establishes a reserve against the Borrowing Base in such
amounts as Agent in its Permitted Discretion shall deem necessary or appropriate
in respect of amounts at any time payable by such Company to such bailee,
warehouseman or similar party.
7.18. FINANCIAL COVENANTS.
(a) Fail to maintain or achieve:
(I) FIXED CHARGE COVERAGE RATIO. For each Rolling
Four Quarters period ending on the last day of the fiscal quarter indicated
below, Fixed Charge Coverage Ratio of at least the corresponding ratio set forth
below; provided, that (A) with respect to the second fiscal quarter of JRCC's
fiscal year ending December 31, 2004, in calculating such ratio, each of
Consolidated Total EBITDA, Consolidated Interest Expense, Capital Expenditures
and scheduled principal payments will be determined for the first 2 fiscal
quarters of such fiscal year on an annualized basis and (B) with respect to the
third fiscal quarter of JRCC's fiscal year ending December 31, 2004, in
calculating such ratio, each of Consolidated Total EBITDA, Consolidated Interest
Expense, Capital Expenditures and scheduled principal payments will be
determined for the first 3 fiscal quarters of such fiscal year on an annualized
basis:
----------------------------------------------------------- ----------------------
Fiscal Quarter Minimum Fixed Charge
Coverage Ratio
----------------------------------------------------------- ----------------------
Each fiscal quarter ending during the period commencing 0.80
June 30, 2004 and ending March 31, 2005
----------------------------------------------------------- ----------------------
Fiscal quarter ending June 30, 2005 0.85
----------------------------------------------------------- ----------------------
Fiscal quarter ending September 30, 2005 0.95
----------------------------------------------------------- ----------------------
Each fiscal quarter ending during the period commencing 1.00
December 31, 2005 and ending September 30, 2008
----------------------------------------------------------- ----------------------
Fiscal quarter ending December 31, 2008 and each fiscal 0.95
quarter thereafter
----------------------------------------------------------- ----------------------
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(II) LEVERAGE RATIO. For each Rolling Four Quarters
ending on the last day of the fiscal quarter indicated below the Leverage Ratio
of not more than the corresponding ratio set forth below; PROVIDED, that (A)
with respect to the second fiscal quarter of JRCC's fiscal year ending December
31, 2004, in calculating such ratio, Consolidated Total EBITDA will be
determined for the first 2 fiscal quarters of such fiscal year on an annualized
basis and (B) with respect to the third fiscal quarter of JRCC's fiscal year
ending December 31, 2004, in calculating such ratio, Consolidated Total EBITDA
will be determined for the first 3 fiscal quarters of such fiscal year on an
annualized basis:
----------------------------------------------------------- ----------------
Fiscal Quarter Leverage Ratio
----------------------------------------------------------- ----------------
Each fiscal quarter ending during the period commencing 2.75
June 30, 2004 and ending December 31, 2005
----------------------------------------------------------- ----------------
Fiscal quarter ending March 31, 2006 and each fiscal 2.50
quarter thereafter
----------------------------------------------------------- ----------------
(III) MINIMUM CONSOLIDATED TANGIBLE NET WORTH. As of
the last day of each fiscal quarter during the term of this Agreement, the
Consolidated Tangible Net Worth of at least $25,000,000.
(IV) MINIMUM QUARTERLY CONSOLIDATED TOTAL EBITDA. For
each Rolling Four Quarters period ending on the last day of the fiscal quarter
indicated below, Consolidated Total EBITDA of at least the corresponding amount
set forth below; PROVIDED, that (A) with respect to the second fiscal quarter of
JRCC's fiscal year ending December 31, 2004, Consolidated Total EBITDA will be
determined for the first 2 fiscal quarters of such fiscal year on an annualized
basis and (B) with respect to the third fiscal quarter of JRCC's fiscal year
ending December 31, 2004, Consolidated Total EBITDA will be determined for the
first 3 fiscal quarters of such fiscal year on an annualized basis:
-------------------------------------------- ---------------
Fiscal Quarter Amount
-------------------------------------------- ---------------
Fiscal quarter ending June 30, 2004 $47,500,000
-------------------------------------------- ---------------
Fiscal quarter ending September 30, 2004 $47,500,000
-------------------------------------------- ---------------
Fiscal quarter ending December 31, 2004 $47,000,000
-------------------------------------------- ---------------
Fiscal quarter ending March 31, 2005 $50,100,000
-------------------------------------------- ---------------
Fiscal quarter ending June 30, 2005 $52,600,000
-------------------------------------------- ---------------
Fiscal quarter ending September 30, 2005 $54,800,000
-------------------------------------------- ---------------
Fiscal quarter ending December 31, 2005 $57,000,000
-------------------------------------------- ---------------
Fiscal quarter ending March 31, 2006 $57,000,000
-------------------------------------------- ---------------
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-------------------------------------------- ---------------
Fiscal Quarter Amount
-------------------------------------------- ---------------
Fiscal quarter ending June 30, 2006 $57,000,000
-------------------------------------------- ---------------
Fiscal quarter ending September 30, 2006 $57,000,000
-------------------------------------------- ---------------
Fiscal quarter ending December 31, 2006 $57,000,000
-------------------------------------------- ---------------
Fiscal quarter ending March 31, 2007 $55,000,000
-------------------------------------------- ---------------
Fiscal quarter ending June 30, 2007 $54,000,000
-------------------------------------------- ---------------
Fiscal quarter ending September 30, 2007 $53,000,000
-------------------------------------------- ---------------
Fiscal quarter ending December 31, 2007 $52,000,000
-------------------------------------------- ---------------
Fiscal quarter ending March 31, 2008 $50,000,000
-------------------------------------------- ---------------
Fiscal quarter ending June 30, 2008 $46,000,000
-------------------------------------------- ---------------
Fiscal quarter ending September 30, 2008 $43,000,000
-------------------------------------------- ---------------
Fiscal quarter ending December 31, 2008
and each fiscal quarter thereafter $40,000,000
-------------------------------------------- ---------------
Companies shall not be required to comply with the foregoing covenant for any
fiscal quarter if Companies are required to comply with the covenant set forth
in SECTION 7.18(A)(V) for any month in such fiscal quarter.
(V) MINIMUM MONTHLY CONSOLIDATED TOTAL EBITDA. If
and only if Companies fail to maintain average daily Excess Availability of at
least $10,000,000 for the 90 day period ending on the last day of the most
recently ended fiscal quarter (such average daily Excess Availability to be
based on the weekly Borrowing Base Certificates provided to Agent during such 90
day period) and Excess Availability of at least $10,000,000 on the last day of
the most recently ended fiscal quarter, Consolidated total EBITDA for each
period set forth below of at least the corresponding amount set forth below:
----------------------------------------------------------- -------------------------------
Fiscal Month Amount
----------------------------------------------------------- -------------------------------
The 4 month period ending July 31, 2004 $15,000,000
----------------------------------------------------------- -------------------------------
The 5 month period ending August 31, 2004 $19,500,000
----------------------------------------------------------- -------------------------------
The 6 month period ending September 30, 2004 $24,100,000
----------------------------------------------------------- -------------------------------
The 7 month period ending October 31, 2004 $28,600,000
----------------------------------------------------------- -------------------------------
The 8 month period ending November 30, 2004 $32,600,000
----------------------------------------------------------- -------------------------------
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----------------------------------------------------------- -------------------------------
Fiscal Month Amount
----------------------------------------------------------- -------------------------------
The 9 month period ending December 31, 2004 $35,600,000
----------------------------------------------------------- -------------------------------
The 10 month period ending January 31, 2005 $40,000,000
----------------------------------------------------------- -------------------------------
The 11 month period ending February 28, 2005 $44,300,000
----------------------------------------------------------- -------------------------------
The 12 month period ending March 31, 2005 $50,100,000
----------------------------------------------------------- -------------------------------
The 12 month period ending April 30, 2005 $50,600,000
----------------------------------------------------------- -------------------------------
The 12 month period ending May 31, 2005 $51,500,000
----------------------------------------------------------- -------------------------------
The 12 month period ending June 30, 2005 $52,600,000
----------------------------------------------------------- -------------------------------
The 12 month period ending July 31, 2005 $53,300,000
----------------------------------------------------------- -------------------------------
The 12 month period ending August 31, 2005 $54,200,000
----------------------------------------------------------- -------------------------------
The 12 month period ending September 30, 2005 $54,800,000
----------------------------------------------------------- -------------------------------
The 12 month period ending October 31, 2005 $55,700,000
----------------------------------------------------------- -------------------------------
The 12 month period ending November 30, 2005 $56,700,000
----------------------------------------------------------- -------------------------------
The 12 month period ending December 31, 2005 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending January 31, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending February 28, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending March 31, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending April 30, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending May 31, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending June 30, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending July 31, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending August 31, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
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----------------------------------------------------------- -------------------------------
Fiscal Month Amount
----------------------------------------------------------- -------------------------------
The 12 month period ending September 30, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending October 31, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending November 30, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending December 31, 2006 $57,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending January 31, 2007 $56,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending February 28, 2007 $56,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending March 31, 2007 $55,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending April 30, 2007 $55,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending May 31, 2007 $55,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending June 30, 2007 $54,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending July 31, 2007 $54,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending August 31, 2007 $54,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending September 30, 2007 $53,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending October 31, 2007 $53,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending November 30, 2007 $52,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending December 31, 2007 $52,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending January 31, 2008 $51,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending February 29, 2008 $51,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending March 31, 2008 $50,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending April 30, 2008 $49,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending May 31, 2008 $47,000,000
----------------------------------------------------------- -------------------------------
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----------------------------------------------------------- -------------------------------
Fiscal Month Amount
----------------------------------------------------------- -------------------------------
The 12 month period ending June 30, 2008 $46,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending July 31, 2008 $45,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending August 31, 2008 $44,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending September 30, 2008 $43,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending October 31, 2008 $42,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending November 30, 2008 $41,000,000
----------------------------------------------------------- -------------------------------
The 12 month period ending December 31, 2008 and each 12 $40,000,000
month period thereafter
----------------------------------------------------------- -------------------------------
(B) MAINTENANCE CAPITAL EXPENDITURES. Permit Maintenance
Capital Expenditures (other than Capital Expenditures in connection with Mine
No. 15) in any fiscal year to be in excess of the amount set forth in the
following table for the applicable period:
----------------------------------------------------------- -------------------------------
Fiscal Year Amount
----------------------------------------------------------- -------------------------------
Fiscal Year ending December 31, 2004 $35,318,000
----------------------------------------------------------- -------------------------------
Fiscal Year ending December 31, 2005 $35,177,000
----------------------------------------------------------- -------------------------------
Fiscal Year ending December 31, 2006 $35,254,000
----------------------------------------------------------- -------------------------------
Fiscal Year ending December 31, 2007 $27,438,000
----------------------------------------------------------- -------------------------------
Fiscal Year ending December 31, 2008 and each Fiscal Year $25,800,000
thereafter
----------------------------------------------------------- -------------------------------
If Companies do not utilize the entire amount of Maintenance Capital
Expenditures permitted above in any fiscal year, Companies may carry forward to
the immediately succeeding fiscal year only, 100% of such unutilized amount
(with Maintenance Capital Expenditures made by Companies in such succeeding
fiscal year applied first to such unutilized amount).
(C) MINE NO. 15 CAPITAL EXPENDITURES. Permit Mine No. 15
Capital Expenditures in any fiscal year to be in excess of the amount set forth
in the following table for the applicable period:
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----------------------------------------------------------- -------------------------------
Fiscal Year Amount
----------------------------------------------------------- -------------------------------
Fiscal Year ending December 31, 2004 $18,583,000
----------------------------------------------------------- -------------------------------
Fiscal Year ending December 31, 2005 $8,704,000
----------------------------------------------------------- -------------------------------
Fiscal Year ending December 31, 2006 and each Fiscal Year $0
thereafter
----------------------------------------------------------- -------------------------------
If Companies do not utilize the entire amount of Mine No. 15 Capital
Expenditures permitted above in the fiscal year ending December 31, 2004,
Companies may carry forward to either the fiscal year ending December 31, 2005
or the fiscal year December 31, 2006, 100% of all or any portion of such
utilized amount, and if Companies do not utilize the entire amount of Mine No.
15 Capital Expenditures permitted in the fiscal year ending December 31, 2005,
Companies may carry forward to the fiscal year ending December 31, 2006, 100% of
such unutilized amount (with Mine No. 15 Capital Expenditures made by Companies
in fiscal year ending December 31, 2006 applied first to such unutilized
amount).
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "EVENT OF DEFAULT") under this Agreement:
8.1. If Companies fail to pay when due and payable or when declared
due and payable, all or any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due the Lender
Group, reimbursement of Lender Group Expenses, or other amounts constituting
Obligations); PROVIDED, HOWEVER, that in the case of Overadvances that are
caused by the charging of interest, fees, or Lender Group Expenses to the Loan
Account, such event shall not constitute an Event of Default if, within 3
Business Days of its receipt of telephonic notice of such Overadvance, Borrower
eliminates such Overadvance;
8.2. If Companies
(a) fail to perform, keep, or observe any term, provision,
covenant, or agreement contained in SECTIONS 2.7, 3.2, 4.2, 4.4, 4.6, 6.8, 6.12,
6.15, 6.16, and 7.1 through 7.18 of this Agreement;
(b) fail or neglect to perform, keep, or observe any term,
provision, covenant, or agreement contained in SECTIONS 4.5, 6.2, 6.3, 6.5, 6.6,
6.7, 6.9, 6.10, 6.11, and 6.14 of this Agreement and such failure continues for
a period of 5 Business Days; or
(c) fail or neglect to perform, keep, or observe any other
term, provision, covenant, or agreement contained in this Agreement, or in any
of the other Loan Documents (giving effect to any grace periods, cure periods,
or required notices, if any, expressly provided for in such Loan Documents); in
each case, other than any such term, provision, covenant, or agreement that is
the subject of another provision of this SECTION 8 (in which
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event such other provision of this SECTION 8 shall govern), and such failure
continues for a period of 10 Business Days;
8.3. If any material portion of any Company's assets is attached,
seized, subjected to a writ or distress warrant, levied upon, or comes into the
possession of any third Person and the same is not discharged before the earlier
of 30 days after the date it first arises or 5 days prior to the date on which
such property or asset is subject to forfeiture by such Company;
8.4. If an Insolvency Proceeding is commenced by any Company;
8.5. If an Insolvency Proceeding is commenced against any Company,
and any of the following events occur: (a) the applicable Company consents to
the institution of the Insolvency Proceeding against it, (b) the petition
commencing the Insolvency Proceeding is not timely controverted; provided,
however, that, during the pendency of such period, each member of the Lender
Group shall be relieved of its obligations to extend credit hereunder, (c) the
petition commencing the Insolvency Proceeding is not dismissed within 45
calendar days of the date of the filing thereof; provided, however, that, during
the pendency of such period, each member of the Lender Group shall be relieved
of its obligation to extend credit hereunder, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
any Company, or (e) an order for relief shall have been entered therein;
8.6. If any Company is enjoined, restrained, or in any way prevented
by court order from continuing to conduct all or any material part of its
business affairs;
8.7. (a) If a notice of Lien is filed of record with respect to any
Company's or any of its Subsidiaries' assets by the United States or any
department, agency, or instrumentality thereof (a "FEDERAL LIEN"), or by any
state, county, municipal, or governmental agency and such state, county,
municipal, or governmental agency Lien has priority over the Liens of Agent in
and to the Collateral or any portion thereof (a "NON-FEDERAL PRIORITY Lien"); or
(b) If a notice of Lien is filed of record with respect to
any Company's assets or any of its Subsidiaries' assets by any state, county,
municipal, or governmental agency that is not a Non-Federal Priority Lien (a
"NON-FEDERAL NON-PRIORITY LIEN"); PROVIDED, HOWEVER, that, if the aggregate
amount claimed with respect to any such Non-Federal Non-Priority Liens, or
combination thereof, is less than $100,000, an Event of Default shall not occur
under this subsection if the claims that are the subject of such Liens are the
subject of Permitted Protests and if the Liens are released, discharged, or
bonded against within 30 days of each such Lien first being filed of record or,
if earlier, at least 5 days prior to the date on which assets that are subject
to such Liens are subject to being sold or forfeited and, in any such case,
Agent shall have the absolute right to establish and maintain a reserve against
the Borrowing Base and the Maximum Revolver Amount in an amount equal to the
aggregate amount of the underlying claims (determined by Agent, in its Permitted
Discretion, and irrespective of any Permitted Protests with respect thereto and
including any penalties or
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interest that are estimated by Agent, in its Permitted Discretion, to arise in
connection therewith);
8.8. If one or more judgments or other claims involving an aggregate
amount of $100,000, or more, in excess of the amount covered by insurance,
becomes a Lien or encumbrance upon any of any Company's assets and the same is
not released, discharged, bonded against, or stayed pending appeal before the
earlier of 30 days after the date it first arises or 5 days prior to the date on
which such asset is subject to being forfeited by such Company;
8.9. If there is a default under any of the Subordinated Debt
Documents; or if there is a default, in any material agreement to which any
Company is a party and such default (a) occurs at the final maturity of the
obligations thereunder, or (b) results in a right by the other party thereto,
irrespective of whether exercised, to accelerate the maturity of the applicable
Company's obligations thereunder, or to terminate such agreement;
8.10. If any Company makes any payment on account of Indebtedness that
has been contractually subordinated in right of payment to the payment of the
Obligations, except to the extent such payment is permitted by the terms of the
subordination provisions applicable to such Indebtedness;
8.11. If any material misstatement or misrepresentation exists as of
the date when made or deemed made, in any warranty, representation, statement,
or Record made to the Lender Group by any Company or any officer, employee,
agent, or director of any Company;
8.12. If the obligation of any Credit Party under the Guaranty is
limited or terminated by operation of law or by such Credit Party thereunder;
8.13. If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby, except as a result of a disposition of the applicable Collateral in a
transaction permitted under this Agreement;
8.14. Any provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Company, or a proceeding shall be commenced by
any Company, or by any Governmental Authority having jurisdiction over any
Company, seeking to establish the invalidity or unenforceability thereof, or any
Company shall deny that it has any liability or obligation purported to be
created under any Loan Document; or
8.15. If the Companies fail to make any royalty or other payments
under mining leases when due (a) with respect to any mining lease, in an
aggregate amount in excess of $50,000 or (b) with respect to all mining leases,
in an aggregate amount in excess of $150,000, excluding in each case amounts
subject to a Permitted Protest.
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9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1. RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), all of which are authorized by
Companies:
(a) Declare all or any portion of the Obligations, whether
evidenced by this Agreement, by any of the other Loan Documents, or otherwise,
immediately due and payable;
(b) Cease advancing money or extending credit to or for the
benefit of Borrowers under this Agreement, under any of the Loan Documents, or
under any other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent's Liens in the Collateral and without
affecting the Obligations;
(d) Settle or adjust disputes and claims directly with
Companies' Account Debtors for amounts and upon terms which Agent considers
advisable, and in such cases, Agent will credit the Loan Account with only the
net amounts received by Agent in payment of such disputed Accounts after
deducting all Lender Group Expenses incurred or expended in connection
therewith;
(e) Cause Companies to hold all of their returned Inventory
in trust for the Lender Group and segregate all such Inventory from all other
assets of Companies or in Companies' possession;
(f) Without notice to or demand upon any Company, make such
payments and do such acts as Agent considers necessary or reasonable to protect
its security interests in the Collateral. Each Company agrees to assemble the
Collateral if Agent so requires, and to make the Collateral available to Agent
at a place that Agent may designate which is reasonably convenient to both
parties. Each Company authorizes Agent to enter the premises where the
Collateral is located, to take and maintain possession of the Collateral, or any
part of it, and to pay, purchase, contest, or compromise any Lien that in
Agent's determination appears to conflict with the priority of the Agent's Liens
in and to the Collateral and to pay all expenses incurred in connection
therewith and to charge Borrowers' Loan Account therefor. With respect to any of
Companies' owned or leased premises, each Company hereby grants Agent a license
to enter into possession of such premises and to occupy the same, without
charge, in order to exercise any of the Lender Group's rights or remedies
provided herein, at law, in equity, or otherwise;
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(g) Without notice to any Company (such notice being
expressly waived), and without constituting an acceptance of any collateral in
full or partial satisfaction of an obligation (within the meaning of the Code),
set off and apply to the Obligations any and all (i) balances and deposits of
any Company held by the Lender Group (including any amounts received in the Cash
Management Accounts), or (ii) Indebtedness at any time owing to or for the
credit or the account of any Company held by the Lender Group;
(h) Hold, as cash collateral, any and all balances and
deposits of any Company held by the Lender Group, and any amounts received in
the Cash Management Accounts, to secure the full and final repayment of all of
the Obligations;
(i) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Company Collateral. Each Company hereby grants to Agent a license or
other right to use, without charge, such Company's labels, patents, copyrights,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any property of a similar nature, as it pertains to the Company Collateral,
in completing production of, advertising for sale, and selling any Company
Collateral and such Company's rights under all licenses and all franchise
agreements shall inure to the Lender Group's benefit;
(j) Sell the Company Collateral at either a public or
private sale, or both, by way of one or more contracts or transactions, for cash
or on terms, in such manner and at such places (including Companies' premises)
as Agent determines is commercially reasonable. It is not necessary that the
Company Collateral be present at any such sale;
(k) Except in those circumstances where no notice is
required under the Code, Agent shall give notice of the disposition of the
Company Collateral as follows:
(i) Agent shall give Administrative Borrower (for
the benefit of the applicable Company) a notice in writing of the time and place
of public sale, or, if the sale is a private sale or some other disposition
other than a public sale is to be made of the Company Collateral, the time on or
after which the private sale or other disposition is to be made; and
(ii) The notice shall be personally delivered or
mailed, postage prepaid, to Administrative Borrower as provided in SECTION 12,
at least 10 days before the earliest time of disposition set forth in the
notice; no notice needs to be given prior to the disposition of any portion of
the Company Collateral that is perishable or threatens to decline speedily in
value or that is of a type customarily sold on a recognized market;
(l) Agent, on behalf of the Lender Group may credit bid and
purchase at any public sale;
(m) Agent may seek the appointment of a receiver or keeper
to take possession of all or any portion of the Company Collateral or to operate
same and, to the maximum extent permitted by law, may seek the appointment of
such a receiver without the requirement of prior notice or a hearing; and
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(n) The Lender Group shall have all other rights and
remedies available at law or in equity or pursuant to any other Loan Document.
The foregoing to the contrary notwithstanding, upon the occurrence of any Event
of Default described in SECTION 8.4 or SECTION 8.5, in addition to the remedies
set forth above, without any notice to Companies or any other Person or any act
by the Lender Group, the Commitments shall automatically terminate and the
Obligations then outstanding, together with all accrued and unpaid interest
thereon and all fees and all other amounts due under this Agreement and the
other Loan Documents, shall automatically and immediately become due and
payable, without presentment, demand, protest, or notice of any kind, all of
which are expressly waived by Companies.
9.2. REMEDIES CUMULATIVE. The rights and remedies of the Lender Group
under this Agreement, the other Loan Documents, and all other agreements shall
be cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If any Company fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to any Company, may do any or all of the following: (a)
make payment of the same or any part thereof, (b) set up such reserves against
the Borrowing Base or the Maximum Revolver Amount as Agent deems necessary to
protect the Lender Group from the exposure created by such failure, or (c) in
the case of the failure to comply with SECTION 6.8 hereof, obtain and maintain
insurance policies of the type described in SECTION 6.8 and take any action with
respect to such policies as Agent deems prudent. Any such amounts paid by Agent
shall constitute Lender Group Expenses and any such payments shall not
constitute an agreement by the Lender Group to make similar payments in the
future or a waiver by the Lender Group of any Event of Default under this
Agreement. Agent need not inquire as to, or contest the validity of, any such
expense, tax, or Lien and the receipt of the usual official notice for the
payment thereof shall be conclusive evidence that the same was validly due and
owing.
11. WAIVERS; INDEMNIFICATION.
11.1. DEMAND; PROTEST; ETC. Each Company waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of documents, instruments, chattel paper, and guarantees at any time
held by the Lender Group on which any such Company may in any way be liable.
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11.2. THE LENDER GROUP'S LIABILITY FOR COMPANY COLLATERAL. Each
Company hereby agrees that: (a) so long as Agent complies with its obligations,
if any, under the Code, the Lender Group shall not in any way or manner be
liable or responsible for: (i) the safekeeping of the Company Collateral, (ii)
any loss or damage thereto occurring or arising in any manner or fashion from
any cause, (iii) any diminution in the value thereof, or (iv) any act or default
of any carrier, warehouseman, bailee, forwarding agency, or other Person, and
(b) all risk of loss, damage, or destruction of the Company Collateral shall be
borne by Companies.
11.3. INDEMNIFICATION. Each Company shall pay, indemnify, defend, and
hold the Agent-Related Persons, the Lender-Related Persons, and each Participant
(each, an "INDEMNIFIED PERSON") harmless (to the fullest extent permitted by
law) from and against any and all claims, demands, suits, actions,
investigations, proceedings, and damages, and all reasonable attorneys fees and
disbursements and other costs and expenses actually incurred in connection
therewith or in connection with the enforcement of this indemnification (as and
when they are incurred and irrespective of whether suit is brought), at any time
asserted against, imposed upon, or incurred by any of them (a) in connection
with or as a result of or related to the execution, delivery, enforcement,
performance, or administration (including any restructuring or workout with
respect hereto) of this Agreement, any of the other Loan Documents, or the
transactions contemplated hereby or thereby or the monitoring of Companies'
compliance with the terms of the Loan Documents, and (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of whether any Indemnified Person is a party thereto), or any act,
omission, event, or circumstance in any manner related thereto (all the
foregoing, collectively, the "INDEMNIFIED LIABILITIES"). The foregoing to the
contrary notwithstanding, Companies shall have no obligation to any Indemnified
Person under this SECTION 11.3 with respect to any Indemnified Liability that a
court of competent jurisdiction finally determines to have resulted from the
gross negligence or willful misconduct of such Indemnified Person. This
provision shall survive the termination of this Agreement and the repayment of
the Obligations. If any Indemnified Person makes any payment to any other
Indemnified Person with respect to an Indemnified Liability as to which
Companies were required to indemnify the Indemnified Person receiving such
payment, the Indemnified Person making such payment is entitled to be
indemnified and reimbursed by Companies with respect thereto. WITHOUT
LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH INDEMNIFIED PERSON WITH
RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE OR IN PART ARE CAUSED BY OR
ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH INDEMNIFIED PERSON OR OF ANY
OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Companies or Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent
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by registered or certified mail (postage prepaid, return receipt requested),
overnight courier, electronic mail (at such email addresses as Administrative
Borrower or Agent, as applicable, may designate to each other in accordance
herewith), or telefacsimile to Companies in care of Administrative Borrower or
to Agent, as the case may be, at its address set forth below:
If to Administrative Borrower c/o Xxxxx River Coal Company
or any other Company: Corporate Xxxxxx
000 X. Xxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxx X. Xxxxx
Fax No.: 000-000-0000
with copies to: Xxxxxxxxxx Xxxxxxxx LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Fax No.: 000-000-0000
If to Agent: XXXXX FARGO FOOTHILL, INC.
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Manager
Fax No.: 000-000-0000
XXXXX FARGO FOOTHILL, INC.
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Business Finance Manager
Fax No.: 000-000-0000
with copies to: XXXXXXXX XXXX XXXX BLACK
XXXXXXXXXX & MORITZ, LTD.
00 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxxxxx, Esq.
Fax No.: 000-000-0000
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If to Syndication Agent to: XXXXXX XXXXXXX SENIOR FUNDING,
INC.
0000 Xxxxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx Xxxxxx
Fax No.: 000-000-0000
with copies to: PAUL, HASTINGS, XXXXXXXX &
XXXXXX LLP
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx-Xxxxx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxxxx, Esq.
Fax No.: 000-000-0000
Agent and Companies may change the address at which they are to receive notices
hereunder, by notice in writing in the foregoing manner given to the other
party. All notices or demands sent in accordance with this SECTION 12, other
than notices by Agent in connection with enforcement rights against the Company
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Company acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Company Collateral under the provisions of the Code shall be deemed sent when
deposited in the mail or personally delivered, or, where permitted by law,
transmitted by telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(A) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
(UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT
OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT
HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO WITH
RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
(B) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND
LITIGATED ONLY IN THE STATE AND TO THE EXTENT PERMITTED BY APPLICABLE LAW,
FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, PROVIDED,
HOWEVER, THAT ANY SUIT SEEKING
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ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. COMPANIES AND
EACH MEMBER OF THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 13(B).
(C) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, COMPANIES AND
EACH MEMBER OF THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY
TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF ANY OF THE
LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN, INCLUDING
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR
STATUTORY CLAIMS. COMPANIES AND EACH MEMBER OF THE LENDER GROUP REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1. ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may assign and delegate to one or more
assignees (each an "ASSIGNEE") that are Eligible Transferees all, or any ratable
part of all, of the Obligations, the Commitments and the other rights and
obligations of such Lender hereunder and under the other Loan Documents, in a
minimum amount of $1,000,000 (except that such minimum amount shall not apply to
an Affiliate of a Lender or to a Related Fund); PROVIDED, HOWEVER, that (i) with
respect to assignments of the Revolver Commitment, Companies and Agent may
continue to deal solely and directly with such Lender in connection with the
interest so assigned to an Assignee until (A) written notice of such assignment,
together with payment instructions, addresses, and related information with
respect to the Assignee, have been given to Administrative Borrower and Agent by
such Lender and the Assignee, (B) such Lender and its Assignee have delivered to
Administrative Borrower and Agent an Assignment and Acceptance, and (C) the
assignor Lender or Assignee has paid to Agent for Agent's separate account a
processing fee in the amount of $5,000, and (ii) with respect to assignments of
the Term Loan, Companies, Agent and Syndication Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (A) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Administrative Borrower, Syndication Agent and
Agent by such Lender and the Assignee, (B) such Lender
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and its Assignee have delivered to Administrative Borrower, Syndication Agent
and Agent an Assignment and Acceptance, and (C) the assignor Lender or Assignee
has paid to Agent for Agent's separate account a processing fee in the amount of
$3,500 (PROVIDED, that no processing fee shall be payable in connection with the
first five assignments of any portion of the Term Loan hereunder). Anything
contained herein to the contrary notwithstanding, consent of Agent shall not be
required and payments of any fees shall not be required if (x) such assignment
is in connection with any merger, consolidation, sale, transfer, or other
disposition of all or any substantial portion of the business or loan portfolio
of such Lender or (y) the assignee is an Affiliate (other than an individual) of
a Lender or a Related Fund.
(b) From and after the date that Agent notifies the
assigning Lender (with a copy to Administrative Borrower) that it has received
an executed Assignment and Acceptance and payment of the above-referenced
processing fee (to the extent such fee is applicable), (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, shall have the rights and obligations of a Lender under the Loan
Documents, and (ii) the assigning Lender shall, to the extent that rights and
obligations hereunder and under the other Loan Documents have been assigned by
it pursuant to such Assignment and Acceptance, relinquish its rights (except
with respect to SECTION 11.3 hereof) and be released from any future obligations
under this Agreement (and in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under this Agreement and the other Loan Documents, such Lender shall cease to be
a party hereto and thereto), and such assignment shall effect a novation between
Companies and the Assignee; PROVIDED, HOWEVER, that nothing contained herein
shall release any assigning Lender from obligations that survive the termination
of this Agreement, including such assigning Lender's obligations under ARTICLE
16 and SECTION 17.7 of this Agreement. Notwithstanding anything contained in
this SECTION 14.1(B) to the contrary, a Lender may assign any or all of its
rights hereunder to an Affiliate of such Lender or a Related Fund without
delivering an executed Assignment and Acceptance to Agent or to Borrower;
PROVIDED, HOWEVER, that (x) Borrower and Agent may continue to deal solely and
directly with the assigning Lender until an Assignment and Acceptance has been
delivered to Agent, and (y) the failure of such assigning Lender to deliver an
Assignment and Acceptance to Agent shall not affect the legality, validity or
binding effect of such assignment.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (1) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Companies or the performance or observance by Companies of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (3) such Assignee confirms that it has received a copy
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of this Agreement, together with such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance, (4) such Assignee will, independently and
without reliance upon Agent, such assigning Lender or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement, (5) such Assignee appoints and authorizes Agent to take
such actions and to exercise such powers under this Agreement as are delegated
to Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon Agent's receipt of the required
processing fee payment and the fully executed Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Commitments arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitments of the assigning Lender PRO TANTO.
(e) Any Lender may at any time, with the written consent of
Agent, sell to one or more commercial banks, financial institutions, or other
Persons not Affiliates of such Lender (a "PARTICIPANT") participating interests
in its Obligations, the Commitment, and the other rights and interests of that
Lender (the "ORIGINATING LENDER") hereunder and under the other Loan Documents
(provided that no written consent of Agent shall be required in connection with
any sale of any such participating interests by a Lender to an Eligible
Transferee); PROVIDED, HOWEVER, that (i) the Originating Lender shall remain a
"Lender" for all purposes of this Agreement and the other Loan Documents and the
Participant receiving the participating interest in the Obligations, the
Commitments, and the other rights and interests of the Originating Lender
hereunder shall not constitute a "Lender" hereunder or under the other Loan
Documents and the Originating Lender's obligations under this Agreement shall
remain unchanged, (ii) the Originating Lender shall remain solely responsible
for the performance of such obligations, (iii) Companies, Agent, and the Lenders
shall continue to deal solely and directly with the Originating Lender in
connection with the Originating Lender's rights and obligations under this
Agreement and the other Loan Documents, (iv) no Lender shall transfer or grant
any participating interest under which the Participant has the right to approve
any amendment to, or any consent or waiver with respect to, this Agreement or
any other Loan Document, except to the extent such amendment to, or consent or
waiver with respect to this Agreement or of any other Loan Document would (A)
extend the final maturity date of the Obligations hereunder in which such
Participant is participating, (B) reduce the interest rate applicable to the
Obligations hereunder in which such Participant is participating, (C) release
all or substantially all of the Collateral or guaranties (except to the extent
expressly provided herein or in any of the Loan Documents) supporting the
Obligations hereunder in which such Participant is participating, (D) postpone
the payment of, or reduce the amount of, the interest or fees payable to such
Participant through such Lender, or (E) change the amount or due dates of
scheduled principal repayments or prepayments or premiums, and (v) all amounts
payable by Companies
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hereunder shall be determined as if such Lender had not sold such participation,
except that, if amounts outstanding under this Agreement are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to have the
right of set off in respect of its participating interest in amounts owing under
this Agreement to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under this Agreement. The rights of any
Participant only shall be derivative through the Originating Lender with whom
such Participant participates and no Participant shall have any rights under
this Agreement or the other Loan Documents or any direct rights as to the other
Lenders, Agent, Companies, the Collections of Companies, the Collateral, or
otherwise in respect of the Obligations. No Participant shall have the right to
participate directly in the making of decisions by the Lenders among themselves.
(f) In connection with any such assignment or participation
or proposed assignment or participation, a Lender may, subject to the provisions
of SECTION 17.7, disclose all documents and information which it now or
hereafter may have relating to Companies and their respective businesses.
(g) Any other provision in this Agreement notwithstanding,
(i) any Lender may at any time create a security interest in, or pledge, all or
any portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank
or U.S. Treasury Regulation 31 CFR ss. 203.24, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law, and (ii) any Lender may at any time pledge or grant a security
interest in all or any portion of its rights under this Agreement, the other
Loan Documents and the loans made by it as collateral security to secure
obligations of such Lender.
(h) Agent shall, on behalf of Borrowers, maintain, or cause
to be maintained, a register (the "REGISTER") on which it enters the names of
the Lenders as the registered owner of the Term Loan held by such Lender and the
principal and interest owing thereto. A Registered Loan may be assigned or sold
in whole or in part only by registration of such assignment or sale on the
Register. Prior to the registration of assignment or sale of any Registered
Loan, Agent, Syndication Agent and Companies shall treat the Person in whose
name such Registered Loan is registered as the owner thereof for the purpose of
receiving all payments thereon and for all other purposes, notwithstanding
notice to the contrary.
14.2. SUCCESSORS. This Agreement shall bind and inure to the benefit
of the respective successors and assigns of each of the parties; PROVIDED,
HOWEVER, that Companies may not assign this Agreement or any rights or duties
hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void AB INITIO. No consent to assignment by the
Lenders shall release any Company from its Obligations. A Lender may assign this
Agreement and the other Loan Documents and its rights and duties hereunder and
thereunder pursuant to SECTION 14.1 hereof and, except as expressly required
pursuant to
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SECTION 14.1 hereof, no consent or approval by any Company is required in
connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1. AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document (other than Bank Product
Agreements), and no consent with respect to any departure by Companies
therefrom, shall be effective unless the same shall be in writing and signed by
the Required Lenders (or by Agent at the written request of the Required
Lenders) and Administrative Borrower (on behalf of all Companies) and then any
such waiver or consent shall be effective, but only in the specific instance and
for the specific purpose for which given; PROVIDED, HOWEVER, that no such
waiver, amendment, or consent shall, unless in writing and signed by all of the
Lenders affected thereby and Administrative Borrower (on behalf of all
Companies) and acknowledged by Agent, do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees, or other
amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any
loan or other extension of credit hereunder, or reduce any fees or other amounts
payable hereunder or under any other Loan Document,
(d) change the Pro Rata Share that is required to take any
action hereunder,
(e) amend or modify this Section or any provision of the
Agreement providing for consent or other action by all Lenders,
(f) other than as permitted by SECTION 16.12, release
Agent's Lien in and to any of the Collateral,
(g) change the definition of "Required Lenders" or "Pro Rata
Share",
(h) contractually subordinate any of the Agent's Liens,
(i) release any Companies from any obligation for the
payment of money,
(j) change the definition of Applicable Prepayment Premium,
Applicable Term Loan Prepayment Premium, Bank Product Reserve, Borrowing Base,
Dilution, Dilution Reserve, Eligible Accounts, Eligible Inventory, Excess Cash
Flow, Fixed Asset Portion, Maximum Revolver Amount, Net Liquidation Percentage,
Premium Grade Accounts, the Term Loan Amount or change SECTION 2.1(B), or
(k) amend any of the provisions of SECTION 16.
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and, PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or Swing
Lender, as applicable, under this Agreement or any other Loan Document. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Companies, shall not require consent by or the agreement of Companies.
The Agent and each Lender have executed an Agreement Among
Lenders on the Closing Date pursuant to which the Agent and each Lender have
agreed, among other things, to certain arrangements amongst themselves. The
rights and duties of the Agent and each Lender with respect to such matters, are
subject to such agreement.
15.2. REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or Agent
hereunder requires the unanimous consent, authorization, or agreement of all
Lenders, and a Lender ("HOLDOUT LENDER") fails to give its consent,
authorization, or agreement, then Agent, upon at least 5 Business Days prior
irrevocable notice to the Holdout Lender, may permanently replace the Holdout
Lender with one or more substitute Lenders (each, a "REPLACEMENT LENDER"), and
the Holdout Lender shall have no right to refuse to be replaced hereunder. Such
notice to replace the Holdout Lender shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.
(b) Prior to the effective date of such replacement, the
Holdout Lender and each Replacement Lender shall execute and deliver an
Assignment and Acceptance, subject only to the Holdout Lender being repaid its
share of the outstanding Obligations (including an assumption of its Pro Rata
Share of the Risk Participation Liability) without any premium or penalty of any
kind whatsoever. If the Holdout Lender shall refuse or fail to execute and
deliver any such Assignment and Acceptance prior to the effective date of such
replacement, the Holdout Lender shall be deemed to have executed and delivered
such Assignment and Acceptance. The replacement of any Holdout Lender shall be
made in accordance with the terms of SECTION 14.1. Until such time as the
Replacement Lenders shall have acquired all of the Obligations, the Commitments,
and the other rights and obligations of the Holdout Lender hereunder and under
the other Loan Documents, the Holdout Lender shall remain obligated to make the
Holdout Lender's Pro Rata Share of Advances and to purchase a participation in
each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.
15.3. NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement or any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or
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diminish Agent's and each Lender's rights thereafter to require strict
performance by Companies of any provision of this Agreement. Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.
16. AGENT; THE LENDER GROUP.
16.1. APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints WFF as its representative under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes Agent to
execute and deliver each of the other Loan Documents on its behalf and to take
such other action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this SECTION 16.
The provisions of this SECTION 16 (other than the proviso to SECTION 16.11(A))
are solely for the benefit of Agent, and the Lenders, and Companies shall have
no rights as a third party beneficiary of any of the provisions contained
herein. Any provision to the contrary contained elsewhere in this Agreement or
in any other Loan Document notwithstanding, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent have
or be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Agent; it being expressly understood and agreed that the use of the word
"Agent" is for convenience only, that WFF is merely the representative of the
Lenders, and only has the contractual duties set forth herein. Except as
expressly otherwise provided in this Agreement, Agent shall have and may use its
sole discretion with respect to exercising or refraining from exercising any
discretionary rights or taking or refraining from taking any actions that Agent
expressly is entitled to take or assert under or pursuant to this Agreement and
the other Loan Documents. Without limiting the generality of the foregoing, or
of any other provision of the Loan Documents that provides rights or powers to
Agent, Lenders agree that Agent shall have the right to exercise the following
powers as long as this Agreement remains in effect: (a) maintain, in accordance
with its customary business practices, ledgers and records reflecting the status
of the Obligations, the Collateral, the Collections of Companies, and related
matters, (b) execute or file any and all financing or similar statements or
notices, amendments, renewals, supplements, documents, instruments, proofs of
claim, notices and other written agreements with respect to the Loan Documents,
(c) make Advances, for itself or on behalf of Lenders as provided in the Loan
Documents, (d) exclusively receive, apply, and distribute the Collections of
Companies as provided in the Loan Documents, (e) open and maintain such bank
accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral and the Collections of Companies, (f) perform,
exercise, and enforce any and all other rights and remedies of the Lender Group
with respect to Companies, the Obligations, the Collateral, the Collections of
Companies, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group
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Expenses as Agent may deem necessary or appropriate for the performance and
fulfillment of its functions and powers pursuant to the Loan Documents.
16.2. DELEGATION OF DUTIES. Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys in fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney in fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
Without limiting the foregoing, Lenders acknowledge and agree that Agent may
select Xxxxxx Xxxxxxx as its agent pursuant to the terms of the Agreement Among
Lenders to take enforcement actions under the Loan Documents and such selection
shall not constitute gross negligence or willful misconduct.
16.3. LIABILITY OF AGENT. None of the Agent Related Persons shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by any Company or any Affiliate of
any Company, or any officer or director thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of any Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No Agent
Related Person shall be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the Books or properties of Companies or the books or records or properties of
any of Companies' Affiliates.
16.4. RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, telefacsimile or other electronic
method of transmission, telex or telephone message, statement or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent, or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to Companies or counsel to any
Lender), independent accountants and other experts selected by Agent. Agent
shall be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless Agent shall first receive such
advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the requisite Lenders and such request
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and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
16.5. NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders
and, except with respect to Defaults and Events of Default of which Agent has
actual knowledge, unless Agent shall have received written notice from a Lender
or Administrative Borrower referring to this Agreement, describing such Default
or Event of Default, and stating that such notice is a "notice of default."
Agent promptly will notify the Lenders of its receipt of any such notice or of
any Defaults and Event of Default of which Agent has actual knowledge. If any
Lender obtains actual knowledge of any Defaults and Event of Default, such
Lender promptly shall notify the other Lenders and Agent of such Defaults and
Event of Default. Each Lender shall be solely responsible for giving any notices
to its Participants, if any. Subject to SECTION 16.4, Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Required Lenders in accordance with SECTION 9; PROVIDED, HOWEVER, that if an
event occurs or a circumstance exists that materially and imminently threatens
the ability of the Agent and the Lenders to realize upon any material part of
the Collateral, such as, without limitation, fraudulent removal, concealment or
abscondment thereof, destruction (other than to the extent covered by insurance)
or material waste thereof, or failure of JRCC or any of its Subsidiaries after
reasonable demand to maintain or reinstate adequate casualty insurance coverage
with respect thereto, Agent may (but shall not be obligated to) take such action
with respect to such Default or Event of Default as it shall deem advisable;
PROVIDED, Agent shall, to the extent practicable, first use commercially
reasonable efforts to contact the Syndication Agent regarding the taking of such
action and in any event shall use commercially reasonable efforts to contact the
Syndication Agent regarding the taking of such action contemporaneously with the
taking of such action.
16.6. CREDIT DECISION. Each Lender acknowledges that none of the Agent
Related Persons has made any representation or warranty to it, and that no act
by Agent hereinafter taken, including any review of the affairs of Companies and
their Affiliates, shall be deemed to constitute any representation or warranty
by any Agent-Related Person to any Lender. Each Lender represents to Agent that
it has, independently and without reliance upon any Agent-Related Person and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of Companies and
any other Person party to a Loan Document, and all applicable bank regulatory
laws relating to the transactions contemplated hereby, and made its own decision
to enter into this Agreement and to extend credit to Borrowers. Each Lender also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition
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and creditworthiness of Companies and any other Person party to a Loan Document.
Except for notices, reports, and other documents expressly herein required to be
furnished to the Lenders by Agent, Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, prospects, operations, property, financial and other
condition or creditworthiness of Companies and any other Person party to a Loan
Document that may come into the possession of any of the Agent Related Persons.
16.7. COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, attorneys
fees and expenses, fees and expenses of financial accountants, advisors,
consultants, and appraisers, costs of collection by outside collection agencies,
auctioneer fees and expenses, and costs of security guards or insurance premiums
paid to maintain the Collateral, whether or not Companies are obligated to
reimburse Agent or Lenders for such expenses pursuant to this Agreement or
otherwise. Agent is authorized and directed to deduct and retain sufficient
amounts from the Collections of Companies received by Agent to reimburse Agent
for such out-of-pocket costs and expenses prior to the distribution of any
amounts to Lenders. In the event Agent is not reimbursed for such costs and
expenses from the Collections of Companies received by Agent, each Lender hereby
agrees that it is and shall be obligated to pay to or reimburse Agent for the
amount of such Lender's Pro Rata Share thereof. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand the
Agent Related Persons (to the extent not reimbursed by or on behalf of Companies
and without limiting the obligation of Companies to do so), according to their
Pro Rata Shares, from and against any and all Indemnified Liabilities; PROVIDED,
HOWEVER, that no Lender shall be liable for the payment to any Agent Related
Person of any portion of such Indemnified Liabilities resulting solely from such
Person's gross negligence or willful misconduct nor shall any Lender be liable
for the obligations of any Defaulting Lender in failing to make an Advance or
other extension of credit hereunder. Without limitation of the foregoing, each
Lender shall reimburse Agent upon demand for such Lender's Pro Rata Share of any
costs or out of pocket expenses (including attorneys, accountants, advisors, and
consultants fees and expenses) 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,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Companies. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
16.8. AGENT IN INDIVIDUAL CAPACITY. WFF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other business with Companies their and
Affiliates and any other Person party to any Loan Documents as though WFF were
not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group. The other members of the Lender Group
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acknowledge that, pursuant to such activities, WFF or its Affiliates may receive
information regarding Companies or their Affiliates and any other Person party
to any Loan Documents that is subject to confidentiality obligations in favor of
Companies or such other Person and that prohibit the disclosure of such
information to the Lenders, and the Lenders acknowledge that, in such
circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver Agent will use its reasonable best efforts to obtain),
Agent shall not be under any obligation to provide such information to them. The
terms "Lender" and "Lenders" include WFF in its individual capacity.
16.9. SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice
to the Lenders. If Agent resigns under this Agreement, the Required Lenders
shall appoint a successor Agent for the Lenders. If no successor Agent is
appointed prior to the effective date of the resignation of Agent, Agent may
appoint, after consulting with the Lenders, a successor Agent. If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Required Lenders may agree in writing to
remove and replace Agent with a successor Agent from among the Lenders. In any
such event, upon the acceptance of its appointment as successor Agent hereunder,
such successor Agent shall succeed to all the rights, powers, and duties of the
retiring Agent and the term "Agent" shall mean such successor Agent and the
retiring Agent's appointment, powers, and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this SECTION 16 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. If no successor Agent
has accepted appointment as Agent by the date which is 45 days following a
retiring Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Lenders appoint a
successor Agent as provided for above.
16.10. LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Companies and their Affiliates and any other Person party to any Loan Documents
as though such Lender were not a Lender hereunder without notice to or consent
of the other members of the Lender Group. The other members of the Lender Group
acknowledge that, pursuant to such activities, such Lender and its respective
Affiliates may receive information regarding Companies or their Affiliates and
any other Person party to any Loan Documents that is subject to confidentiality
obligations in favor of Companies or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them. With respect to the Swing Loans and Agent Advances, Swing
Lender shall have the same rights and powers under this Agreement as any other
Lender and may exercise the same as though it were not the sub-agent of Agent.
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16.11. WITHHOLDING TAXES.
(a) All payments made by any Company hereunder or under any
note or other Loan Document will be made without setoff, counterclaim, or other
defense. In addition, all such payments will be made free and clear of, and
without deduction or withholding for, any present or future Taxes, and in the
event any deduction or withholding of Taxes is required, each Company shall
comply with the penultimate sentence of this SECTION 16.11(A). "TAXES" shall
mean, any taxes, levies, imposts, duties, fees, assessments or other charges of
whatever nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such payments
(but excluding any tax imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein measured by or based on the
net income or net profits of Lender) and all interest, penalties or similar
liabilities with respect thereto. If any Taxes are so levied or imposed, each
Company agrees to pay the full amount of such Taxes and such additional amounts
as may be necessary so that every payment of all amounts due under this
Agreement, any note, or Loan Document, including any amount paid pursuant to
this SECTION 16.11(A) after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein; provided, however,
that Companies shall not be required to increase any such amounts if the
increase in such amount payable results from Agent's or such Lender's own
willful misconduct or gross negligence (as finally determined by a court of
competent jurisdiction). Each Company will furnish to Lender as promptly as
possible after the date the payment of any Tax is due pursuant to applicable law
certified copies of tax receipts evidencing such payment by any Company.
(b) If a Lender claims an exemption from United States
withholding tax, Lender agrees with and in favor of Agent and any Company, to
deliver to Agent:
(i) if such Lender claims an exemption from United
States withholding tax pursuant to its portfolio interest exception, (A) a
statement of the Lender, signed under penalty of perjury, that it is not a (I) a
"bank" as described in Section 881(c)(3)(A) of the IRC, (II) a 10% shareholder
of any Company (within the meaning of Section 871(h)(3)(B) of the IRC), or (III)
a controlled foreign corporation related to any Company within the meaning of
Section 864(d)(4) of the IRC, and (B) a properly completed and executed IRS Form
W-8BEN, before receiving its first payment under this Agreement and at any other
time reasonably requested by Agent or any Company;
(ii) if such Lender claims an exemption from, or a
reduction of, withholding tax under a United States tax treaty, properly
completed and executed IRS Form W-8BEN before receiving its first payment under
this Agreement and at any other time reasonably requested by Agent or any
Company;
(iii) if such Lender claims that interest paid under
this Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such Lender, two
properly completed and executed copies of IRS Form W-8ECI before receiving its
first payment under this Agreement and at any other time reasonably requested by
Agent or any Company; or
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(iv) such other form or forms, including IRS Form
W-9, as may be required under the IRC or other laws of the United States as a
condition to exemption from, or reduction of, United States withholding or
backup withholding tax before receiving its first payment under this Agreement
and at any other time reasonably requested by Agent or any Company.
Lender agrees promptly to notify Agent and Administrative Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.
(c) If a Lender claims an exemption from withholding tax in
a jurisdiction other than the United States, Lender agrees with and in favor of
Agent and Companies, to deliver to Agent any such form or forms, as may be
required under the laws of such jurisdiction as a condition to exemption from,
or reduction of, foreign withholding or backup withholding tax before receiving
its first payment under this Agreement and at any other time reasonably
requested by Agent or Administrative Borrower.
Lender agrees promptly to notify Agent and Administrative Borrower of any change
in circumstances which would modify or render invalid any claimed exemption or
reduction.
(d) If any Lender claims exemption from, or reduction of,
withholding tax and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of Companies to such Lender,
such Lender agrees to notify Agent and Administrative Borrower of the percentage
amount in which it is no longer the beneficial owner of Obligations of Companies
to such Lender. To the extent of such percentage amount, Agent and Companies
will treat such Lender's documentation provided pursuant to SECTIONS 16.11(B) or
16.11(C) as no longer valid. With respect to such percentage amount, Lender may
provide new documentation, pursuant to SECTIONS 16.11(B) or 16.11(C), if
applicable.
(e) If any Lender is entitled to a reduction in the
applicable withholding tax, Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable withholding tax after taking into
account such reduction. If the forms or other documentation required by
subsection (b) or (c) of this SECTION 16.11 are not delivered to Agent, then
Agent may withhold from any interest payment to such Lender not providing such
forms or other documentation an amount equivalent to the applicable withholding
tax.
(f) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender due to a
failure on the part of the Lender (because the appropriate form was not
delivered, was not properly executed, or because such Lender failed to notify
Agent of a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason) such Lender
shall indemnify and hold Agent harmless for all amounts paid, directly or
indirectly, by Agent, as tax or otherwise, including penalties and interest, and
including any taxes imposed by any jurisdiction on the amounts payable to Agent
under this SECTION 16.11, together with all costs and expenses (including
attorneys fees and expenses). The obligation of the Lenders under
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this subsection shall survive the payment of all Obligations and the resignation
or replacement of Agent.
16.12. COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
Companies of all Obligations, (ii) constituting property being sold or disposed
of if a release is required or desirable in connection therewith and if
Administrative Borrower certifies to Agent that the sale or disposition is
permitted under SECTION 7.4 of this Agreement or the other Loan Documents (and
Agent may rely conclusively on any such certificate, without further inquiry),
(iii) constituting property in which no Company owned any interest at the time
the Agent's Lien was granted nor at any time thereafter, or (iv) constituting
property leased to a Company under a lease that has expired or is terminated in
a transaction permitted under this Agreement. Except as provided above, Agent
will not execute and deliver a release of any Lien on any Collateral without the
prior written authorization of (y) if the release is of all or substantially all
of the Collateral, all of the Lenders, or (z) otherwise, the Required Lenders.
Upon request by Agent or Administrative Borrower at any time, the Lenders will
confirm in writing Agent's authority to release any such Liens on particular
types or items of Collateral pursuant to this SECTION 16.12; PROVIDED, HOWEVER,
that (1) Agent shall not be required to execute any document necessary to
evidence such release on terms that, in Agent's opinion, would expose Agent to
liability or create any obligation or entail any consequence other than the
release of such Lien without recourse, representation, or warranty, and (2) such
release shall not in any manner discharge, affect, or impair the Obligations or
any Liens (other than those expressly being released) upon (or obligations of
Companies in respect of) all interests retained by Companies, including, the
proceeds of any sale, all of which shall continue to constitute part of the
Collateral.
(b) Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by Companies or is
cared for, protected, or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent's own interest in the Collateral in its capacity as
one of the Lenders and that Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing, except as otherwise
provided herein.
16.13. RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without
the express written consent of Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the
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written request of Agent, set off against the Obligations, any amounts owing by
such Lender to Companies or any deposit accounts of Companies now or hereafter
maintained with such Lender. Each of the Lenders further agrees that it shall
not, unless specifically requested to do so in writing by Agent, take or cause
to be taken any action, including, the commencement of any legal or equitable
proceedings, to foreclose any Lien on, or otherwise enforce any security
interest in, any of the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations, except for any such proceeds or
payments received by such Lender from Agent pursuant to the terms of this
Agreement, or (ii) payments from Agent in excess of such Lender's ratable
portion of all such distributions by Agent, such Lender promptly shall (1) turn
the same over to Agent, in kind, and with such endorsements as may be required
to negotiate the same to Agent, or in immediately available funds, as
applicable, for the account of all of the Lenders and for application to the
Obligations in accordance with the applicable provisions of this Agreement, or
(2) purchase, without recourse or warranty, an undivided interest and
participation in the Obligations owed to the other Lenders so that such excess
payment received shall be applied ratably as among the Lenders in accordance
with their Pro Rata Shares; provided, however, that to the extent that such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases of participations shall be rescinded in whole or in part, as
applicable, and the applicable portion of the purchase price paid therefor shall
be returned to such purchasing party, but without interest except to the extent
that such purchasing party is required to pay interest in connection with the
recovery of the excess payment.
16.14. AGENCY FOR PERFECTION. Agent hereby appoints each other Lender
as its agent (and each Lender hereby accepts such appointment) for the purpose
of perfecting the Agent's Liens in assets which, in accordance with Article 8 or
Article 9, as applicable, of the Code can be perfected only by possession or
control. Should any Lender obtain possession or control of any such Collateral,
such Lender shall notify Agent thereof, and, promptly upon Agent's request
therefor shall deliver possession or control of such Collateral to Agent or in
accordance with Agent's instructions.
16.15. PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer of immediately
available funds pursuant to such wire transfer instructions as each party may
designate for itself by written notice to Agent. Concurrently with each such
payment, Agent shall identify whether such payment (or any portion thereof)
represents principal, premium, fees, or interest of the Obligations.
16.16. CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents. Each member of the Lender Group agrees
that any action taken by Agent in accordance with the terms of this Agreement or
the other Loan Documents relating to the Collateral and the exercise by Agent of
its powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
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16.17. FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "REPORT" and collectively, "REPORTS") prepared by
Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not
(i) make any representation or warranty as to the accuracy of any Report, and
(ii) shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are
not comprehensive audits or examinations, that Agent or other party performing
any audit or examination will inspect only specific information regarding
Companies and will rely significantly upon the Books, as well as on
representations of Companies' personnel,
(d) agrees to keep all Reports and other material,
non-public information regarding Companies and their operations, assets, and
existing and contemplated business plans in a confidential manner in accordance
with SECTION 17.7, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or fail to take or any conclusion the indemnifying
Lender may reach or draw from any Report in connection with any loans or other
credit accommodations that the indemnifying Lender has made or may make to
Companies, or the indemnifying Lender's participation in, or the indemnifying
Lender's purchase of, a loan or loans of Companies; and (ii) to pay and protect,
and indemnify, defend and hold Agent, and any such other Lender preparing a
Report harmless from and against, the claims, actions, proceedings, damages,
costs, expenses, and other amounts (including, attorneys fees and costs)
incurred by Agent and any such other Lender preparing a Report as the direct or
indirect result of any third parties who might obtain all or part of any Report
through the indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Companies to Agent that has not been contemporaneously
provided by Companies to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Companies, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender's notice to Agent, whereupon Agent promptly shall request of
Administrative Company the additional reports or information reasonably
specified by such Lender, and, upon receipt thereof from Administrative
Borrower, Agent promptly shall provide a copy of same to such Lender, and (z)
any time that Agent renders to Administrative Borrower a
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statement regarding the Loan Account, Agent shall send a copy of such statement
to each Lender.
16.18. SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain
of the Loan Documents now or hereafter may have been or will be executed only by
or in favor of Agent in its capacity as such, and not by or in favor of the
Lenders, any and all obligations on the part of Agent (if any) to make any
credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in SECTION 16.7, no member of the Lender Group shall
have any liability for the acts or any other member of the Lender Group. No
Lender shall be responsible to any Company or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
16.19. BANK PRODUCT PROVIDERS. Each Bank Product Provider shall be
deemed a party hereto for purposes of any reference in a Loan Document to the
parties for whom Agent is acting; it being understood and agreed that the rights
and benefits of such Bank Product Provider under the Loan Documents consist
exclusively of such Bank Product Provider's right to share in payments and
collections out of the Collateral as more fully set forth herein. In connection
with any such distribution of payments and collections, Agent shall be entitled
to assume no amounts are due to any Bank Product Provider unless such Bank
Product Provider has notified Agent in writing of the amount of any such
liability owed to it prior to such distribution.
16.20. LEGAL REPRESENTATION OF AGENT. In connection with the
negotiation, drafting, and execution of this Agreement and the other Loan
Documents, or in connection with future legal representation relating to loan
administration, amendments, modifications, waivers, or enforcement of remedies,
Xxxxxxxx Xxxx Xxxx Black Xxxxxxxxxx & Xxxxxx, Ltd. ("GK") only has represented
and only shall represent WFF in its capacity as Agent and as a Lender. Each
other Lender hereby acknowledges that GK does not represent it in connection
with any such matters.
16.21. SYNDICATION AGENT. Xxxxxx Xxxxxxx, in its capacity as
Syndication Agent shall not have any right, power, obligation, liability,
responsibility, or duty under this Agreement other than those applicable to it
in its capacity as a Lender. Without limiting the foregoing, Xxxxxx Xxxxxxx, in
its capacity as Syndication Agent 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 Syndication Agent in deciding to enter into
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this Agreement or in taking or not taking action hereunder. Syndication Agent
shall be entitled to resign at any time by giving notice to Agent and
Administrative Borrower.
17. GENERAL PROVISIONS.
17.1. EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Companies, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
17.2. SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3. INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed against the Lender Group or Companies,
whether under any rule of construction or otherwise. On the contrary, this
Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
17.4. SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
17.5. COUNTERPARTS; ELECTRONIC EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile or other electronic method of transmission shall be equally as
effective as delivery of an original executed counterpart of this Agreement. Any
party delivering an executed counterpart of this Agreement by telefacsimile or
other electronic method of transmission also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document MUTATIS
MUTANDIS.
17.6. REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Company or the transfer to the Lender Group of
any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "VOIDABLE TRANSFER"), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the
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liability of Companies automatically shall be revived, reinstated, and restored
and shall exist as though such Voidable Transfer had never been made.
17.7. CONFIDENTIALITY. Agent and Lenders each individually (and not
jointly or jointly and severally) agree that material, non-public information
regarding Companies, their operations, assets, and existing and contemplated
business plans shall be treated by Agent and the Lenders in a confidential
manner, and shall not be disclosed by Agent and the Lenders to Persons who are
not parties to this Agreement, except: (a) to attorneys for and other advisors,
accountants, auditors, and consultants to any member of the Lender Group, (b) to
Subsidiaries and Affiliates of any member of the Lender Group (including the
Bank Product Providers), provided that any such Subsidiary or Affiliate shall
have agreed to receive such information hereunder subject to the terms of this
SECTION 17.7, (c) as may be required by statute, decision, or judicial or
administrative order, rule, or regulation, (d) as may be agreed to in advance by
Companies or as requested or required by any Governmental Authority pursuant to
any subpoena or other legal process, (e) as to any such information that is or
becomes generally available to the public (other than as a result of prohibited
disclosure by Agent or the Lenders), (f) in connection with any assignment,
prospective assignment, sale, prospective sale, participation or prospective
participations, or pledge or prospective pledge of any Lender's interest under
this Agreement, provided that any such assignee, prospective assignee,
purchaser, prospective purchaser, participant, prospective participant, pledgee,
or prospective pledgee shall have agreed in writing to receive such information
hereunder subject to the terms of this Section, and (g) in connection with any
litigation or other adversary proceeding involving parties hereto which such
litigation or adversary proceeding involves claims related to the rights or
duties of such parties under this Agreement or the other Loan Documents. The
provisions of this SECTION 17.7 shall survive for 2 years after the payment in
full of the Obligations.
17.8. INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.9. JRCC AS AGENT FOR BORROWERS. Each Borrower hereby irrevocably
appoints JRCC as the borrowing agent and attorney-in-fact for all Borrowers (the
"Administrative Borrower") which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide Agent with
all notices with respect to Advances and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
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economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group's relying on any instructions of the
Administrative Borrower, or (c) any other action taken by the Lender Group
hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under
this SECTION 17.9 with respect to any liability that has been finally determined
by a court of competent jurisdiction to have resulted solely from the gross
negligence or willful misconduct of such Agent-Related Person or Lender-Related
Person, as the case may be.
[Signature pages to follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
BORROWERS:
XXXXX RIVER COAL COMPANY
a Virginia corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXX RIVER COAL SERVICE COMPANY,
a Kentucky corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
LEECO, INC.,
a Kentucky corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
BLUE DIAMOND COAL COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
[Signatures continued on next page]
XXXXXXX COAL CORPORATION,
a Kentucky corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXX ELKHORN COAL CORPORATION,
a Kentucky corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXX COUNTY COAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXX RIVER COAL SALES, INC., a Delaware
corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXX CREEK COAL COMPANY,
a Tennessee corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
[Signatures continued on next page]
CREDIT PARTIES:
LEECO PROCESSING COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXXXXXXXX PROCESSING COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXXXX COAL LEASING COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXXXX PROCESSING COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
BDCC HOLDING COMPANY, INC.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
[Signatures continued on next page]
BLUE DIAMOND COAL EXPORT CO.,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
EOLIA RESOURCES, INC.,
a North Carolina corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
SHAMROCK COAL COMPANY, INCORPORATED,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
PIKE COUNTY RESOURCES, INC.,
a Kentucky corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
PRIMARY ENERGIES CORPORATION,
a Kentucky corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
[Signatures continued on next page]
XXXXX CREEK PROCESSING COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXX CREEK ELKHORN COAL CORPORATION,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
XXXXXXX PROCESSING COMPANY,
a Delaware corporation
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title:
----------------------------------
[Signatures continued on next page]
ADMINISTRATIVE AGENT:
XXXXX FARGO FOOTHILL, INC.,
a California corporation, as
Administrative Agent and as a Lender
By: /s/ Xxx Xxxxx
-------------------------------------
Title: Vice President
----------------------------------
[Signatures continued on next page]
SYNDICATION AGENT:
XXXXXX XXXXXXX SENIOR FUNDING, INC.,
a Delaware corporation, as Syndication
Agent and Sole Lead Arranger and Book
Runner for the Term Loan, and as a
Lender
By: /s/ Xxx X. Xxxxx
-------------------------------------
Name: Xxx X. Xxxxx
-----------------------------------
Title: Vice President
----------------------------------
