Exhibit 10.9
AMENDED AND RESTATED FINANCING AGREEMENT
Amended and Restated Financing Agreement, dated as of June 19,
2001, by and among High Voltage Engineering Corporation, a Massachusetts
corporation (the "PARENT"), Maxima Technologies, Inc., a Pennsylvania
corporation ("MAXIMA"), Xxxxxxx Xxxxxx Instrument Corporation, an Illinois
corporation ("XXXXXXX XXXXXX"), Robicon Corporation, a Pennsylvania corporation
("ROBICON"), Vivirad - High Voltage Corporation, a Massachusetts corporation
("VIVIRAD - HVC"), Physical Electronics, Inc., a Delaware corporation ("PHYSICAL
ELECTRONICS"), and Xxxxxxx Xxxxx & Associates, a California corporation
("XXXXXXX XXXXX" and together with the Parent, Maxima, Xxxxxxx Xxxxxx, Robicon,
Vivirad - HVC and Physical Electronics, each a "BORROWER" and collectively, the
"BORROWERS"), the direct and indirect subsidiaries of the Borrowers named on the
signature pages hereto as "Guarantors" (each a "GUARANTOR" and collectively, the
"GUARANTORS"), the financial institutions from time to time party hereto
(individually a "LENDER" and collectively, the "LENDERS"), Ableco Finance LLC, a
Delaware limited liability company ("ABLECO"), as collateral agent for the
Lenders (in such capacity, the "COLLATERAL Agent"), and Ableco, as
administrative agent for the Lenders (in such capacity, together with any
successor in such capacity, the "ADMINISTRATIVE AGENT" and together with the
Collateral Agent, each an "AGENT" and collectively the "AGENTS").
RECITALS
The Borrowers, the Guarantors, the Lenders and the Collateral
Agent are parties to the Financing Agreement dated as of November 30, 2000 (as
amended prior to the date hereof, the "ORIGINAL FINANCING AGREEMENT"), among
such parties and Foothill Capital Corporation, a California Corporation
("FOOTHILL"). On the date hereof, Foothill has (i) assigned all of its rights
and obligations as a lender under the Original Financing Agreement to Ableco,
and Ableco has assumed all of such rights and obligations, and (ii) Foothill has
resigned in its capacity as Administrative Agent under the Original Financing
Agreement and Ableco has been appointed the new administrative agent. In
connection therewith, the Borrowers and the Guarantors have asked the Lenders to
amend and restate the Original Financing Agreement to provide, among other
things, for a revolving credit facility in an aggregate principal amount not to
exceed $25,000,000 at any time outstanding, $5,000,000 of which may be used for
the issuance of letters of credit. The proceeds of the loans made under the
revolving credit facility shall be used to refinance the existing revolving
credit loans under the Original Financing Agreement, for general working capital
purposes of the Borrowers and the Guarantors and to pay the fees and expenses
related to this Agreement. The letters of credit will be used for general
corporate and working capital purposes, and will include the letters of credit
issued under the Original Financing Agreement. The Lenders are severally, and
not jointly, willing to amend and restate the Original Financing Agreement and
to extend such credit to the Borrowers subject to the terms and conditions
hereinafter set forth.
In consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree that the Original
Financing Agreement shall be amended and restated as follows:
ARTICLE I
DEFINITIONS; CERTAIN TERMS
SECTION 1.01 DEFINITIONS. As used in this Agreement, the following terms
shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:
"ABLECO" has the meaning specified therefor in the preamble hereto.
"ACCOUNT DEBTOR" means each debtor, customer or obligor in any way
obligated on or in connection with any Account Receivable.
"ACCOUNT RECEIVABLE" means any and all rights of any Loan Party to payment
for goods sold and services rendered, including accounts, general intangibles
and any and all such rights evidenced by chattel paper, instruments or
documents, whether due or to become due and whether or not earned by
performance, and whether now or hereafter acquired or arising in the future and
any proceeds arising therefrom or relating thereto.
"ACTION" has the meaning specified therefor in Section 12.12.
"ADMINISTRATIVE AGENT" has the meaning specified therefor in the preamble
hereto.
"ADMINISTRATIVE AGENT'S ACCOUNT" means an account at a bank designated by
the Administrative Agent from time to time as the account into which the
Borrowers shall make all payments to the Administrative Agent for the benefit of
the Agents and the Lenders under this Agreement and the other Loan Documents.
"AFFILIATE" means, as to any Person, any other Person that 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" of a Person means the power, directly or indirectly, either to (i)
vote 10% or more of the Capital Stock having ordinary voting power for the
election of directors of such Person or (ii) direct or cause the direction of
the management and policies of such Person whether by contract or otherwise.
Notwithstanding anything herein to the contrary, in no event shall any Agent or
any Lender be considered an "Affiliate" of any Loan Party.
"AGENTS" has the meaning specified therefor in the preamble hereto.
"AGREEMENT" means this Amended and Restated Financing Agreement, including
all amendments, modifications and supplements and any exhibits or schedules to
any of the foregoing, and shall refer to the Agreement as the same may be in
effect at the time such reference becomes operative.
"AMENDATORY AGREEMENT" means the Amendatory Agreement dated as of the
Effective Date and substantially in the form of Exhibit C hereto, by and between
the Loan Parties and the Collateral Agent, as the same may be amended or
otherwise modified from time to time.
"ANNIVERSARY FEE" has the meaning specified therefor in Section 2.06(b).
-2-
"APPLICABLE LAW" means all applicable laws, rules, regulations (including
proposed, temporary and final income tax regulations), statutes, treaties,
codes, ordinances, permits, certificates, orders and licenses of and
interpretations by any Governmental Authority, and applicable judgments,
decrees, injunctions, writs, orders or like action of any court, arbitrator or
other administrative, judicial or quasi-judicial tribunal or agency of competent
jurisdiction.
"APPLICABLE MARGIN" means 2.5%.
"ASI PERFORMANCE SECURITY DEPOSIT" means the performance security deposit
in the amount of approximately 5 billion Italian Lire which, upon release, is
payable to one or more Loan Parties.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by an assigning Lender and an assignee, and accepted by the Collateral Agent, in
accordance with Section 12.07 hereof and substantially in the form of Exhibit H
hereto, or in such other form as is reasonably acceptable to the Collateral
Agent.
"AUTHORIZED OFFICER" means any officer or employee of the Parent.
"AVAILABILITY" means, at any time, the difference between (i) the lesser of
(A) the Borrowing Base and (B) the Total Revolving Credit Commitment and (ii)
the sum of (A) the aggregate outstanding principal amount of all Revolving Loans
and (B) all Letter of Credit Obligations.
"AVAILABILITY BLOCK" means $7,500,000.
"AVAILABLE COMMITMENT" means the difference between (i) the Total Revolving
Credit Commitment and (ii) the Availability Block.
"BOARD" means the Board of Governors of the Federal Reserve System of the
United States.
"BOOK VALUE" means, as to any Inventory, the lower of (i) cost (as
reflected in the general ledger of the Borrowers before customary (but not
extraordinary) reserves established by the Borrowers in good faith and in
accordance with GAAP) and (ii) market value, in each case determined in
accordance with GAAP calculated on a first in first out basis).
"BORROWERS" has the meaning specified therefor in the preamble hereto.
"BORROWING BASE" means, at any time, the difference between (a) the sum of
(i) 85% of Eligible Receivables at such time, (ii) 50% of Eligible Joint Venture
Receivables at such time, and (iii) the lesser of (A) (x) 60% of the Book Value
of the Borrowers' Eligible Inventory at such time, less (y) $1,128,186.78, which
amount shall be reduced by the Administrative Agent, on each occasion that the
Collateral Agent receives a landlord waiver, mortgagee waiver or collateral
access agreement in accordance with Section 7.01(m) for each location set forth
in Schedule 7.01(m), in the release amount set forth in Schedule 7.01(m)
corresponding to such location, (B) 125% of the appraised orderly liquidation
value of the Borrowers' Eligible Inventory at such time as determined by an
independent third party appraiser acceptable to the Agents and (C)
-3-
$5,000,000, and (b) such reserves as the Administrative Agent may deem
appropriate in its Permitted Discretion.
"BORROWING BASE CERTIFICATE" means a certificate signed by the chief
financial officer of the Parent and setting forth the calculation of the
Borrowing Base in compliance with Section 7.01(a)(vi), substantially in the form
of Exhibit E.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required to close.
"CAPITAL EXPENDITURES" means, with respect to any Person for any period,
the sum of (i) the aggregate of all expenditures by such Person and its
Subsidiaries during such period that in accordance with GAAP are or should be
included in "property, plant and equipment" or similar fixed asset account on
its balance sheet, whether such expenditures are paid in cash or financed and
including all Capitalized Lease Obligations paid or payable during such period,
and (ii) to the extent not covered by clause (i) above, the aggregate of all
expenditures by such Person and its Subsidiaries to acquire by purchase or
otherwise the business or fixed assets of, or the Capital Stock of, any other
Person.
"CAPITAL GUIDELINE" means any law, rule, regulation, policy, guideline or
directive (whether or not having the force of law and whether or not the failure
to comply therewith would be unlawful) (i) regarding capital adequacy, capital
ratios, capital requirements, the calculation of a bank's capital or similar
matters, or (ii) affecting the amount of capital required to be obtained or
maintained by the Lenders, any Person controlling any Lender, or the L/C Issuer
or the manner in which the Lenders, any Person controlling any Lender or the L/C
Issuer allocate capital to any of their contingent liabilities (including
letters of credit), advances, acceptances, commitments, assets or liabilities.
"CAPITALIZED LEASE" means, with respect to any Person, any lease of real or
personal property by such Person as lessee which is required under GAAP to be
capitalized on the balance sheet of such Person.
"CAPITALIZED LEASE OBLIGATIONS" means, with respect to any Person,
obligations of such Person and its Subsidiaries under Capitalized Leases, and,
for purposes hereof, the amount of any such obligation shall be the capitalized
amount thereof determined in accordance with GAAP.
"CAPITAL STOCK" means (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock (including preferred
stock), and (ii) with respect to any Person that is not a corporation, any and
all partnership, membership or other equity interests of such Person.
"CASH AND CASH EQUIVALENTS" means all cash and any presently existing or
hereafter arising deposit account balances, certificates of deposit or other
financial instruments properly classified as cash equivalents under GAAP.
-4-
"CASH COLLATERAL ACCOUNT" means an interest bearing account maintained by
one or more Borrowers with the Cash Collateral Bank pursuant to the terms of the
Cash Collateral Agreement.
"CASH COLLATERAL AGREEMENT" means the Account Control Agreement dated
December 12, 2000, among the Parent, the Collateral Agent and the Cash
Collateral Bank, as the same may be amended or otherwise modified from time to
time.
"CASH COLLATERAL BANK" means Fleet or such other financial institution as
may be appointed by the Collateral Agent from time to time to serve as the Cash
Collateral Bank.
"CASH SWEEP EVENT" has the meaning specified therefor in Section 8.01(a).
"CHANGE OF CONTROL" means each occurrence of any of the following:
(a) the acquisition, directly or indirectly, by any person or group (within
the meaning of Section 13(d)(3) of the Exchange Act), other than the Permitted
Holders, of beneficial ownership of more than 25% of the aggregate outstanding
Voting Stock of the Parent;
(b) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Parent
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Parent was approved by
a vote of at least a majority the directors of the Parent then still in office
who were either directors at the beginning of such period, or whose election or
nomination for election was previously approved) cease for any reason to
constitute a majority of the Board of Directors of the Parent;
(c) the Parent shall cease to have beneficial ownership (as defined in Rule
13d-3 under the Exchange Act) of 100% of the aggregate Voting Stock of the other
Loan Parties, free and clear of all Liens (other than in favor of the Collateral
Agent), PROVIDED that it shall not constitute a Change of Control if the Parent
shall cease to have beneficial ownership of 100% of the aggregate Voting Stock
of any such other Loan Party as result of a disposition, merger or consolidation
permitted by Section 7.02(c);
(d) (i) any Borrower consolidates with or merges into another entity (other
than with or into another Borrower) or conveys, transfers or leases all or
substantially all of its property and assets to another Person (other than to
another Borrower), (ii) any Guarantor consolidates with or merges into another
Person (other than with or into another Loan Party) or conveys, transfers or
leases all or substantially all of its property and assets to any Person (other
than to another Loan Party), or (iii) any entity consolidates with or merges
into any Loan Party in a transaction pursuant to which the outstanding Voting
Stock of such Loan Party is reclassified or changed into or exchanged for cash,
securities or other property, other than any such transaction described in this
clause (iii) in which either (A) in the case of any such transaction involving
the Parent, no person or group (within the meaning of Section 13(d)(3) of the
Exchange Act) (other than the Permitted Holders) has, directly or indirectly,
acquired beneficial ownership of more than 25% of the aggregate outstanding
Voting Stock of the Parent or (B) in the case of any such transaction involving
a Loan Party other than the Parent, the Parent has
-5-
beneficial ownership of 100% of the aggregate Voting Stock of the resulting,
surviving or transferee entity, free and clear of all Liens (other than in favor
of the Collateral Agent) ; or
(e) Xxxxxxx X. Xxxxx, Xx. shall cease to be involved in the day to day
operations and management of the business of the Borrowers and a successor,
reasonably acceptable to the Agents, is not appointed within 180 days of the
cessation of such involvement.
"XXXXXXX XXXXX" has the meaning specified therefor in the preamble hereto.
"CLOSING FEE" has the meaning specified therefor in Section 2.06(a).
"COLLATERAL" means all of the property and assets and all interests therein
and proceeds thereof now owned or hereafter acquired by any Person upon which a
Lien is granted or purported to be granted by such Person as security for all or
any part of the Obligations.
"COLLATERAL AGENT" has the meaning specified therefor in the preamble
hereto.
"COLLATERAL AGENT ADVANCES" has the meaning specified therefor in Section
10.08(a).
"COMMITMENTS" means the Revolving Credit Commitments.
"COLLECTION ACCOUNTS" has the meaning specified therefor in Article VIII
hereof.
"CONSOLIDATED EBITDA" means, with respect to any Person for any period, the
Consolidated Net Income of such Person and its Subsidiaries for such period,
PLUS (i) without duplication, the sum of the following amounts of such Person
and its Subsidiaries for such period and to the extent deducted in determining
Consolidated Net Income of such Person for such period: (A) Consolidated Net
Interest Expense, (B) income tax expense, (C) depreciation expense, (D)
amortization expense, (E) extraordinary or non recurring losses, (F) losses
described in Schedule 1.01(B), (G) restructuring charges and (H) losses from
discontinued operations, so long as each of the foregoing items (E), (F), (G),
and (H) remain reasonably acceptable to the Agents, LESS (ii) without
duplication, the sum of the following amounts of such Person and its
Subsidiaries for such period and to the extent added in determining Consolidated
Net Income of such Person for such period: (A) extraordinary or non recurring
gains, (B) gains described in Schedule 1.01(B), (C) gains from discontinued
operations and (D) interest income (to the extent not deducted from Consolidated
Net Interest Expense), so long as each of the foregoing items remain reasonably
acceptable to the Agents.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, with respect to any Person at any
date, all Indebtedness of such Person, determined on a consolidated basis in
accordance with GAAP, which by its terms matures more than one year after the
date of calculation, and any such Indebtedness maturing within one year from
such date which is renewable or extendable at the option of such Person to a
date more than one year from such date including, in any event, with respect to
the Parent and its Subsidiaries, the Revolving Loans, but excluding (i) any
Indebtedness arising under the Receivable Purchase Documents and (ii) Contingent
Obligations.
-6-
"CONSOLIDATED NET INCOME" means, with respect to any Person for any period,
the net income (loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis and in accordance with GAAP.
"CONSOLIDATED NET INTEREST EXPENSE" means, with respect to any Person for
any period, gross interest expense of such Person and its Subsidiaries for such
period determined in conformity with GAAP (including, without limitation,
interest expense paid to Affiliates of such Person, including the discount under
the Receivable Purchase Facility), LESS (i) the sum of (A) interest income for
such period and (B) gains for such period on Hedging Agreements (to the extent
not included in interest income above and to the extent not deducted in the
calculation of such gross interest expense), PLUS (ii) the sum of (A) losses for
such period on Hedging Agreements (to the extent not included in such gross
interest expense), and (B) the upfront costs or fees for such period associated
with Hedging Agreements (to the extent not included in gross interest expense),
each determined on a consolidated basis and in accordance with GAAP for such
Person and its Subsidiaries.
"CONSOLIDATED TANGIBLE NET WORTH" means, with respect to any Person at any
time, (i) the sum of the following accounts (or their equivalents) set forth on
a consolidated balance sheet of such Person and its Subsidiaries prepared in
accordance with GAAP: the par or stated value of all outstanding Capital Stock,
capital surplus and retained earnings (or less accumulated deficits), LESS (ii)
all intangibles included on the asset side of such balance sheet, including,
without limitation, goodwill (including any amounts, however designated on such
balance sheet, representing the excess of the purchase price paid for assets or
stock acquired over the value assigned thereto on the books of such Person and
its Subsidiaries), patents, trademarks, trade names, copyrights and similar
intangibles.
"CONTINGENT OBLIGATION" means, with respect to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, (i) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of the obligation
of a primary obligor, (ii) the obligation to make take-or-pay or similar
payments, if required, regardless of nonperformance by any other party or
parties to an agreement, (iii) any obligation of such Person, whether or not
contingent, (A) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (B) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (C) to purchase
property, assets, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (D) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
PROVIDED, HOWEVER, that the term "Contingent Obligation" shall not include any
products warranties extended in the ordinary course of business. The amount of
any Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation with respect to which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for
-7-
which such Person may be liable pursuant to the terms of the instrument
evidencing such Contingent Obligation) or, if not stated or determinable, the
maximum reasonably anticipated liability with respect thereto (assuming such
Person is required to perform thereunder), as determined by such Person in good
faith.
"CONTRIBUTION AGREEMENT" means the Contribution Agreement dated the
Original Effective Date, as amended as of the date hereof by Amendment No. 1
thereto and substantially in the form of Exhibit I, among the Borrowers, as such
agreement may be further amended or otherwise modified from time to time.
"DEFAULT" means an event which, with the giving of notice or the lapse of
time or both, would constitute an Event of Default.
"DISPOSITION" means any transaction, or series of related transactions,
pursuant to which any Loan Party or any of its Subsidiaries sells, assigns,
transfers or otherwise disposes of any property or assets (whether now owned or
hereafter acquired) to any other Person, in each case whether or not the
consideration therefor consists of cash, securities or other assets owned by the
acquiring Person, EXCLUDING (i) any sales of Inventory in the ordinary course of
business on ordinary business terms, and (ii) sales or other dispositions of
Permitted Investments.
"DOLLAR," "DOLLARS" and the symbol "$" each means lawful money of the
United States of America.
"DOMESTIC ACCOUNT DEBTOR" means any Account Debtor that is not a Foreign
Account Debtor.
"EFFECTIVE DATE" means the date, on which all of the conditions precedent
set forth in Section 5.01 are satisfied or waived and the initial Loan is made,
which date shall be no later than June , 2001.
"ELIGIBLE INVENTORY" means all finished goods and raw materials Inventory
that meets all of the following specifications: (i) such Inventory is lawfully
owned by a Borrower free and clear of any existing Lien, other than that of the
Collateral Agent for the benefit of the Lenders under the Loan Documents; (ii)
such Inventory is not held on consignment and may be lawfully sold and it
continues to be in full conformity with all representations and warranties made
by such Borrower with respect thereto in the Loan Documents; (iii) such Borrower
has the right to grant Liens on such Inventory; (iv) such Inventory arose or was
acquired in the ordinary course of the business of such Borrower and does not
represent damaged, obsolete or unsalable goods; (v) no Account Receivable or
document of title has been created or issued with respect to such Inventory;
(vi) such Inventory is located in one of the locations in one of the continental
United States listed on Schedule 6.01(ee) or such other locations in the
continental United States as the Collateral Agent may approve in writing from
time to time; (vii) if such Inventory consists of finished goods Inventory sold
under a licensed trademark (A) the Collateral Agent shall have entered into a
waiver letter, in form and substance satisfactory to the Collateral Agent, with
the licensor with respect to the rights of the Collateral Agent to use the
licensed trademark to sell or otherwise dispose of such Inventory or (B) the
Collateral Agent shall otherwise be satisfied, in its sole discretion, that the
Collateral Agent has rights to sell or dispose of such Inventory; (viii) the
-8-
Inventory is not work-in-process, supplies or packaging; and (ix) such Inventory
is and at all times shall continue to be acceptable to the Administrative Agent.
"ELIGIBLE JOINT VENTURE RECEIVABLES" means the distributions and/or
management fees which have become due or payable to a Borrower under the terms
of the Specified Joint Venture Agreement, PROVIDED that (i) the obligation to
make such distribution or pay such fees (A) is not past due by more than 90 days
and (B) would not be deemed ineligible pursuant to clauses (e), (h), (i), (j),
(l), (m) or (j) of the definition of "Eligible Receivables" set forth in this
Section 1.01 (assuming for this purpose that such obligation constitutes an
Account Receivable and the Specified Joint Venture constitutes an Account
Debtor) and (ii) the Parent retains direct or indirect beneficial ownership of
not less than 50% of the outstanding Capital Stock of the Specified Joint
Venture.
"ELIGIBLE RECEIVABLES" means those Accounts Receivable: (i) created by a
Borrower in the ordinary course of its business; (ii) that arise out of such
Borrower's sale of goods or rendition of services; (iii) that comply with each
of the representations and warranties respecting Accounts Receivable made by the
Borrowers in Article VIII hereof; and (iv) that are not excluded as ineligible
by virtue of one or more of the criteria set forth below; PROVIDED, HOWEVER,
that such criteria may be fixed and revised from time to time by the
Administrative Agent in the Administrative Agent's Permitted Discretion to
address the results of any audit performed by any Agent from time to time after
the Effective Date. In determining the amount to be included, Eligible
Receivables shall be calculated net of customer deposits and unapplied cash
remitted to such Borrower by its Account Debtors. The Eligible Receivables of a
Borrower shall not include the following:
(a) (i) Accounts Receivable of a Domestic Account Debtor with selling
terms of more than 90 days or where such Account Debtor has failed to pay within
60 days of original due date or within 90 days of invoice date, or (ii) Accounts
Receivable of a Foreign Account Debtor with selling terms of more than 120 days
or that such account Debtor has failed to pay within 60 days of original due
date or within 120 days of invoice date.
(b) Accounts Receivable owed by an Account Debtor (or its Affiliates)
where 50% or more of all Accounts Receivable owed by that Account Debtor (or its
Affiliates) are deemed ineligible under clause (a) above,
(c) Accounts Receivable with respect to which the Account Debtor is an
employee, affiliate, or agent of a Loan Party,
(d) Accounts Receivable 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 Receivable that are not payable in Dollars,
(f) Accounts Receivable with respect to which the Account Debtor is a
Foreign Account Debtor unless (y) such Accounts Receivable are supported by an
irrevocable
-9-
letter of credit reasonably satisfactory to the Collateral Agent (as to form and
substance, and as to the identity of the issuer or domestic confirming bank)
that has been delivered to Collateral Agent and is directly drawable by the
Collateral Agent, or (z) such Accounts Receivable are covered by credit
insurance in form and substance, and in an amount and by an insurer,
satisfactory to Collateral Agent,
(g) Accounts Receivable with respect to which the Account Debtor is
either (i) the United States or any department, agency, or instrumentality of
the United Sates (exclusive, however, of Accounts Receivable with respect to
which such Borrower has complied, to the reasonable satisfaction of the
Administrative Agent, with the Assignment of Claims Act, 31 USC ss. 3727), or
(ii) any state of the United States (exclusive, however, of (y) Accounts
Receivable owed by any state that does not have a statutory counterpart to the
Assignment of Claims Act, or (z) Accounts Receivable owed by any state that does
have a statutory counterpart to the Assignment of Claims Act as to which such
Borrower has complied to the Collateral Agent's reasonable satisfaction),
(h) Accounts Receivable with respect to which the Account Debtor is a
creditor of such Borrower, has or has asserted a right of setoff, has disputed
its liability, or has made any claim with respect to its obligation to pay such
Accounts Receivable, to the extent of such claim, right of setoff, or dispute,
(i) Accounts Receivable with respect to an Account Debtor whose total
obligations owing to such Borrower exceed 10% of all Eligible Receivables, to
the extent of the obligations owing by such Account Debtor in excess of such
percentage,
(j) Accounts Receivable 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 such Borrower has received notice of an imminent Insolvency
Proceeding,
(k) Accounts Receivable with respect to which the Account Debtor is
located in the states of New Jersey, Minnesota, or West Virginia (or any other
state that requires a creditor to file a business activity report or similar
document in order to bring suit or otherwise enforce its remedies against such
Account Debtor in the courts or through any judicial process of such state),
unless such Borrower has qualified to do business in New Jersey, Minnesota, West
Virginia, or such other states, or has filed a business activities report with
the applicable division of taxation, the department of revenue, or with such
other state offices, as appropriate, for the then-current year, or is exempt
form such filing requirement,
(l) Accounts Receivable, the collection of which, the Administrative
Agent, in its Permitted Discretion, believes to be doubtful by reason of the
Account Debtor's financial condition,
(m) Accounts Receivable that are subject to any Lien (other than any
Lien in favor of the Collateral Agent),
(n) Accounts Receivable with respect to which (i) the goods giving rise
to such Accounts Receivable have not been shipped and billed to the Account
Debtor, or (ii) the
-10-
services giving rise to such Accounts Receivable have not been performed and
billed to the Account Debtor,
(o) Accounts Receivable that represent the right to receive progress
payment or other advance xxxxxxxx that are due prior to the completion of
performance by such Borrower of the subject contract for goods and services, and
(p) Accounts Receivable (or undivided interests in such Accounts
Receivable) that may not be sold under Applicable Law.
"EMPLOYEE PLAN" means an employee benefit plan (other than a Multiemployer
Plan) covered by Title IV of ERISA and maintained (or was maintained at any time
during the six (6) calendar years preceding the date of any borrowing hereunder)
for employees of a Borrower or any of ERISA Affiliates of a Borrower.
"ENVIRONMENTAL ACTIONS" means any complaint, summons, citation, notice,
demand, 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 or threatened Releases of Hazardous Materials (i) onto or from
any assets, properties or businesses presently or formerly owned or operated by
any Loan Party or any of its Subsidiaries or any predecessor in interest; (ii)
onto or from adjoining properties or businesses; or (iii) onto or from any
facilities which received Hazardous Materials generated by any Loan Party or any
of its Subsidiaries or any predecessor in interest.
"ENVIRONMENTAL LAWS" means the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") (42 U.S.C.ss.9601, ET SEQ.), the
Hazardous Materials Transportation Act (49 U.S.C.ss.1801, ET SEQ.), the Resource
Conservation and Recovery Act (42 X.X.X.xx. 6901, ET SEQ.), the Federal Clean
Water Act (33 X.X.X.xx. 1251 ET SEQ.), the Clean Air Act (42 X.X.X.xx. 7401 ET
SEQ.), the Toxic Substances Control AcT (15 X.X.X.xx. 2601 ET SEQ.) and the
Occupational Safety and Health Act (29 X.X.X.xx. 651 ET SEQ.), as such laws may
be amended or otherwise modified from time to time, and any other present or
future federal, state, local or foreign statute, law, ordinance, rule,
regulation, order, judgment, decree, permit, license or other binding
determination of any Governmental Authority imposing liability or establishing
standards of conduct for the protection of the indoor or outdoor environment.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts and consultants and costs of
investigations and feasibility studies), fines, penalties, sanctions and
interest incurred as a result of any Environmental Action.
ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental Authority
for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute of similar import, and regulations
thereunder, in each case as
-11-
in effect from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA AFFILIATE" means, with respect to any Person, any trade or business
(whether or not incorporated) which is a member of a group of which such Person
is a member and which would be deemed to be a "controlled group" within the
meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue Code.
"EVENT OF DEFAULT" means any of the events set forth in Section 9.01.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCLUDED SUBSIDIARIES" means Xxxxxx Corporation, a Massachusetts
corporation, and each of its direct and indirect subsidiaries, so long as any
such Person continues to be an "Unrestricted Subsidiary", as such term is
defined in the Indenture.
"EXISTING LETTERS OF CREDIT" means the letters of credit described in
Schedule 6.01(q)(i) issued under the Original Financing Agreement.
"EXISTING LOCKBOXES" means the lockboxes and related accounts described in
Schedule 8.01.
"EXISTING LOCKBOX BANK" means the bank identified as such in Schedule 8.01.
"EXISTING REVOLVING LOANS" means the revolving loans made by Foothill to
the Borrowers under the Original Financing Agreement.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate per
annum equal for each day during such period of the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published on the next succeeding
Business Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day on such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.
"FIELD EXAMINATION FEES" has the meaning specified for such term in Section
4.01.
"FINAL MATURITY DATE" means October 31, 2003, or such earlier date on which
any Loan shall become due and payable, in whole or in part, in accordance with
the terms of this Agreement and the other Loan Documents.
"FINANCIAL STATEMENTS" means (i) the audited consolidated and consolidating
balance sheet of the Parent and its Subsidiaries for the Fiscal Year ended April
29, 2000 and the related consolidated and consolidating statement of operations
and cash flows and the consolidated statement of shareholders' equity for the
Fiscal Year then ended, (ii) the unaudited consolidated and consolidating
balance sheet of the Parent and its Subsidiaries for the three fiscal quarters
ended January 27, 2001 and (iii) the unaudited consolidated and consolidating
balance
-12-
sheet of the Parent and its Subsidiaries for the three Fiscal Months ended April
28, 2001 and the related consolidated and consolidating statement of operations
and cash flows and the consolidated statement of shareholders' equity for the
three Fiscal Months then ended.
"FISCAL MONTH" means (i) for the 2001 Fiscal Year, the fiscal months of the
Parent and its Subsidiaries set forth on Schedule 1.01(D) hereto, and (ii) for
each Fiscal Year thereafter, the fiscal months set forth in the projections
delivered pursuant to Section 7.01(a)(vii) corresponding to such Fiscal Year.
"FISCAL YEAR" means the fiscal year of the Parent and its Subsidiaries
ending on the last Saturday in April of each year or May 1 of each year if such
date falls on a Saturday.
"FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio of (i)
Consolidated EBITDA of the Parent and its Subsidiaries for such period, to (ii)
the sum of, without duplication (A) all principal of Indebtedness of the Parent
and its Subsidiaries scheduled to be paid or prepaid during such period (not
including (x) prepayments of the Revolving Loans unless such prepayments are
accompanied by a reduction of the Revolving Credit Commitment and (y) the loans
outstanding under the Original Financing Agreement that are repaid on the
Effective Date), PLUS (B) Consolidated Net Interest Expense of the Parent and
its Subsidiaries for such period, PLUS (C) cash income taxes paid or payable by
the Parent and its Subsidiaries during such period, PLUS (D) cash dividends or
distributions paid by the Parent and its Subsidiaries (other than dividends or
distributions paid to the Parent) during such period, PLUS (E) Capital
Expenditures made by the Parent and its Subsidiaries during such period, PLUS
(F) all amounts paid or payable by the Parent and its Subsidiaries on Operating
Lease Obligations having a scheduled due date during such period. In determining
the Fixed Charge Coverage Ratio for a particular period (A) pro forma effect
will be given to: (1) the incurrence, repayment or retirement of any
Indebtedness by the Parent and its Subsidiaries since the first day of such
period as if such Indebtedness was incurred, repaid or retired on the first day
of such period and (2) the acquisition (whether by purchase, merger or
otherwise) or disposition (whether by sale, merger or otherwise) of any property
or assets acquired or disposed of by the Parent and its Subsidiaries since the
first day of such period, as if such acquisition or disposition occurred on the
first day of such period; and (B) the amount of Indebtedness under a revolving
credit facility will be computed based upon the average daily balance of such
Indebtedness during such period.
"FLEET" means Fleet National Bank.
"FLEET LETTERS OF CREDIT" means the letters of credit described in Schedule
6.01(q)(ii) issued by Fleet.
"FOOTHILL" has the meaning specified therefor in the Recitals hereto.
"FOOTHILL ASSIGNMENT" means the Assignment and Acceptance dated the date
hereof, by and between Foothill, as Assignor, and Ableco, as Assignee, pursuant
to which Foothill shall sell and assign to Ableco, and Ableco shall assume, all
of Foothill's right, title and interest in and to the Existing Revolving Loans
and all related obligations under the Original Financing Agreement.
-13-
"FOOTHILL RESIGNATION AGREEMENT" means the Resignation and Appointment
Agreement dated the date hereof, by and between Foothill and Ableco, pursuant to
which Foothill shall resign as administrative agent under the Original Financing
Agreement and Ableco shall be appointed as the new Administrative Agent.
"FOREIGN ACCOUNT DEBTOR" means an Account Debtor that either (i) does not
maintain its chief executive office in the United States, or (ii) or is not
organized under the laws of the United States or any state thereof, 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.
"FUNDING CORP." means High Voltage Funding Corp., a Delaware corporation.
"GAAP" means generally accepted accounting principles in effect from time
to time in the United States, applied on a consistent basis, PROVIDED that for
the purpose of Section 7.03 hereof and the definitions used therein, "GAAP"
shall mean generally accepted accounting principles in effect on the date hereof
and consistent with those used in the preparation of the Financial Statements,
PROVIDED, FURTHER, that if there occurs after the date of this Agreement any
change in GAAP that affects in any respect the calculation of any covenant
contained in Section 7.03 hereof, the Collateral Agent and the Parent shall
negotiate in good faith amendments to the provisions of this Agreement that
relate to the calculation of such covenant with the intent of having the
respective positions of the Lenders and the Parent after such change in GAAP
conform as nearly as possible to their respective positions as of the date of
this Agreement and, until any such amendments have been agreed upon, the
covenants in Section 7.03 hereof shall be calculated as if no such change in
GAAP has occurred.
"GOVERNMENTAL AUTHORITY" means any nation or government, any Federal,
state, city, town, municipality, county, local or other political subdivision
thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or Administrative powers or functions of or
pertaining to government.
"GUARANTIES" means (i) the joint and several guaranty of the Guarantors
contained in Article XI hereof, and (ii) each guaranty substantially in the form
of Exhibit B, made by a Guarantor in favor of the Collateral Agent for the
benefit of the Lenders pursuant to Section 7.01(b).
"GUARANTORS" had the meaning specified for such term in the preamble hereto
and, in addition, means each other Person which guarantees, pursuant to Section
7.01(b) or otherwise, all or any part of the Obligations.
"HAZARDOUS MATERIALS" means (a) any element, compound or chemical that is
defined, listed or otherwise classified as a contaminant, pollutant, toxic
pollutant, toxic or hazardous substance, extremely hazardous substance or
chemical, hazardous waste, special waste, or solid waste under Environmental
Laws; (b) petroleum and its refined products; (c) polychlorinated biphenyls; (d)
any substance exhibiting a hazardous waste characteristic, including but not
limited to, corrosivity, ignitability, toxicity or reactivity as well as any
-14-
radioactive or explosive materials; and (e) any raw materials, building
components, including but not limited to asbestos-containing materials and
manufactured products containing Hazardous Materials.
"HEDGING AGREEMENT" means any interest rate, foreign currency, commodity or
equity swap, collar, cap, floor or forward rate agreement, or other agreement or
arrangement designed to protect against fluctuations in interest rates or
currency, commodity or equity values (including, without limitation, any option
with respect to any of the foregoing and any combination of the foregoing
agreements or arrangements), and any confirmation executed in connection with
any such agreement or arrangement.
"HIGHEST LAWFUL RATE" means, with respect to the Agents or a Lender, the
maximum non-usurions interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the
Obligations under laws applicable to the Agents or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable laws
which may hereafter be in effect and which allow a higher maximum non-usurious
interest rate than applicable laws now allow.
"HIVEC HOLDINGS" means HIVEC Holdings, Inc., a Delaware corporation.
"INDEBTEDNESS" means, without duplication, with respect to any Person, (i)
all indebtedness of such Person for borrowed money; (ii) all obligations of such
Person for the deferred purchase price of property or services (other than trade
payables or other account payables incurred in the ordinary course of such
Person's business and not outstanding for (A) more than 90 days after the date
such payable was created or (B) a longer period if such payable is being
contested in good faith and by appropriate proceedings promptly initiated and
diligently conducted, and a reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor, PROVIDED that the
aggregate amount excluded under this clause (B) shall not exceed $3 million at
any time); (iii) all obligations of such Person evidenced by bonds, debentures,
notes or other similar instruments or upon which interest payments are
customarily made; (iv) all obligations and liabilities of such Person created or
arising under any conditional sales or other title retention agreement with
respect to property used and/or acquired by such Person, even though the rights
and remedies of the lessor, seller and/or lender thereunder are limited to
repossession or sale of such property; (v) all Capitalized Lease Obligations of
such Person; (vi) all obligations and liabilities, contingent or otherwise, of
such Person, in respect of letters of credit, acceptances and similar
facilities; (vii) all obligations and liabilities, calculated on a basis
satisfactory to the Collateral Agent and in accordance with accepted practice,
of such Person under Hedging Agreements; (viii) all Contingent Obligations; (ix)
liabilities incurred under Title IV of ERISA with respect to any plan (other
than a Multiemployer Plan) covered by Title IV of ERISA and maintained for
employees of such Person or any of its ERISA Affiliates; (x) withdrawal
liability incurred under ERISA by such Person or any of its ERISA Affiliates to
any Multiemployer Plan; (xi) all other items which, in accordance with GAAP,
would be included as liabilities on the liability side of the balance sheet of
such Person; and (xii) all obligations referred to in clauses (i) through (xi)
of this definition of another Person secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by) a
Lien upon property owned by such Person, even though such Person has not assumed
or become liable for the payment of such Indebtedness. The Indebtedness of any
-15-
Person shall include the Indebtedness of any partnership of or joint venture in
which such Person is a general partner or a joint venturer.
"INDEMNIFIED MATTERS" has the meaning specified therefor in Section 12.15.
"INDEMNITEES" has the meaning specified therefor in Section 12.15.
"INDENTURE" means the Indenture, dated as August 8, 1997, between the
Parent, as issuer, and the Indenture Trustee, as amended from time to time prior
to the date hereof and as further amended or otherwise modified from time to
time in accordance with this Agreement.
"INDENTURE COLLATERAL" means the Intercompany Notes in the possession of
the Indenture Trustee pursuant to the Indenture Pledge Agreement and the real
property located at 0000 Xxxxxx Xxxxx Xxxxx, Xxxx Xxxxxx, Xxxxxxxxx.
"INDENTURE DOCUMENTS" means the Indenture, the Indenture Notes, the
Indenture Pledge Agreement and any other instrument or document delivered by any
Loan Party to the Indenture Trustee in connection with the Indenture.
"INDENTURE NOTES" means the Parent's 101/2% Senior Notes due 2004, issued
pursuant to the Indenture.
"INDENTURE PLEDGE AGREEMENT" means the Amended and Restated Pledge
Agreement between the Parent and the Indenture Trustee dated December 31, 1999,
relating to the pledge of the Intercompany Notes, as same may be amended or
otherwise modified from time to time in accordance with this Agreement.
"INDENTURE TRUSTEE" means State Street Bank and Trust Company, as trustee
under the Indenture, and any successor trustee.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against any
Person under any provision of the Bankruptcy Code or under any other 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 NOTES" means the Intercompany Notes issued by the direct
Subsidiaries of the Parent evidencing loans made by such Subsidiaries to the
Parent in the following principal amounts: (i) Robicon: $39.5 million; (ii)
Physical Electronics: $39.5 million; (iii) Maxima: $19.0 million; (iv) HIVEC
Holdings: $3.5 million; and (v) Xxxxxxx Xxxxxx: $20.0 million.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
(or any successor statute thereto) and the regulations thereunder.
"INVENTORY" means all goods and merchandise of the Loan Parties, including,
without limitation, all raw materials, work-in-process, packaging, supplies,
materials and finished goods of every nature used or usable in connection with
the shipping, storing,
-16-
advertising or sale of such goods and merchandise, whether now owned or
hereafter acquired, and all such other property the sale or other disposition of
which would give rise to an Account Receivable or cash.
"LEASE" means any lease of real property to which any Loan Party is a party
as lessor or lessee.
"L/C ISSUER" means the bank designated by the Administrative Agent (in its
sole and absolute discretion) to the Parent from time to time as the issuer of
Letters of Credit under this Agreement.
"L/C SUBFACILITY" means that portion of the Total Revolving Credit
Commitment equal to $5 million.
"LENDER" and "LENDERS" have the meanings specified therefor in the preamble
hereto.
"LETTER OF CREDIT" has the meaning specified therefor in Section 3.01(a).
"LETTER OF CREDIT APPLICATION" has the meaning specified therefor in
Section 3.01(a).
"LETTER OF CREDIT FEE" has the meaning specified therefor in Section
3.03(b).
"LETTER OF CREDIT GUARANTY" means one or more guaranties by the
Administrative Agent in favor of the L/C Issuer guaranteeing the Borrowers'
obligations to the L/C Issuer under a reimbursement agreement, Letter of Credit
Application or other like document in respect of any Letters of Credit.
"LETTER OF CREDIT OBLIGATIONS" means, at any time and without duplication,
the sum of (i) the Reimbursement Obligations at such time, PLUS (ii) the
aggregate maximum amount available for drawing under the Letters of Credit
outstanding at such time, PLUS (iii) all amounts for which the Administrative
Agent may be liable to the L/C Issuer pursuant to any Letter of Credit Guaranty.
"LIABILITIES" has the meaning specified therefor in Section 2.07.
"LIEN" means any mortgage, deed of trust, pledge, lien (statutory or
otherwise), security interest, charge or other encumbrance or security or
preferential arrangement of any nature, including, without limitation, any
conditional sale or title retention arrangement, any Capitalized Lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
"LOAN" means any Revolving Loan made by an Agent or a Lender to the
Borrowers pursuant to Article II hereof.
"LOAN ACCOUNT" means an account maintained hereunder by the Administrative
Agent on its books of account, at the Payment Office and with respect to the
Borrowers, in which
-17-
the Borrowers will be charged with all Loans made to, and all other Obligations
incurred by, the Borrowers.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranties, the
Security Agreements, the Pledge Agreement, the Mortgages, the Letter of Credit
Applications, the Contribution Agreement, the Amendatory Agreement, the Cash
Collateral Agreement, the agreements entered into in connection with the
Lockboxes and the Collection Accounts pursuant to Section 8.01 hereof, and all
other agreements, instruments, and other documents executed and delivered
pursuant hereto or thereto or otherwise evidencing or securing any Loan, Letter
of Credit Obligation or other Obligation.
"LOAN PARTIES" means the Borrowers and the Guarantors.
"LOAN SERVICING FEE" has the meaning specified therefor in Section 2.06(d).
"LOCKBOX BANKS" has the meaning specified therefor in Section 8.01(a).
"LOCKBOXES" has the meaning specified therefor in Section 8.01(a).
"MATERIAL ADVERSE EFFECT" means a material adverse effect on any of (i) the
operations, business, assets, properties, condition (financial or otherwise) or
prospects of the Loan Parties (taken as a whole), (ii) the ability of the Loan
Parties (taken as a whole) to perform any of their obligations under any Loan
Document, (iii) the legality, validity or enforceability of this Agreement or
any other Loan Document, (iv) the rights and remedies of the Agents and the
Lenders under any Loan Document, or (v) the validity, perfection or priority of
a Lien in favor of the Collateral Agent for the benefit of the Lenders on any of
the Collateral with an aggregate fair market value in excess of $500,000.
"MATERIAL CONTRACT" means, with respect to any Person, each contract or
agreement to which such Person or its Subsidiary is a party (a) involving
aggregate consideration payable to or by such Person or such Subsidiary of (i)
in the case of the contracts and agreements described in Schedule 1.01(E)
hereto, $500,000 or more, and (ii) in all other cases, $250,000 or more (but
excluding (A) purchase orders in the ordinary course of the business of such
Person and (B) contracts that by their terms may be terminated by such Person or
Subsidiary in the ordinary course of its business upon less than 60 days' notice
without penalty or premium) or (b) otherwise material to the business,
operations, condition (financial or otherwise), performance, prospects or
properties of such Person or such Subsidiary.
"MAXIMA" has the meaning specified therefor in the preamble hereto.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any successor thereto.
"MORTGAGE" means each mortgage, deed of trust or deed to secure debt, in
form and substance satisfactory to the Collateral Agent, made by a Loan Party in
favor of the Collateral Agent for the benefit of the Lenders, securing the
Obligations and delivered to the Collateral Agent pursuant to the Original
Financing Agreement or Section 7.01(b).
-18-
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA for which any Borrower or any ERISA Affiliate of a Borrower
has contributed to, or has been obligated to contribute to, at any time during
the preceding six (6) years.
"NET CASH PROCEEDS" means, (i) with respect to any Disposition by any
Person, the amount of cash 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 or any of its Subsidiaries or
Affiliates, in connection therewith after deducting therefrom only (A) the
principal amount of any Indebtedness secured by any Lien permitted by Section
7.02(a) on any asset (other than Indebtedness assumed by the purchaser of such
asset) which is required to be, and is, repaid in connection with such
Disposition (other than Indebtedness under this Agreement), (B) reasonable
expenses related thereto incurred by such Person or such Affiliate, (C) transfer
taxes paid by such Person or such Affiliate in connection therewith, and (D) net
income taxes to be paid in connection with such Disposition (after taking into
account any tax credits or deductions and any tax sharing arrangements and (ii)
with respect to the issuance or incurrence of any Indebtedness by any Person, or
the sale or issuance by any Person of any shares of its Capital Stock, the
aggregate amount of cash 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 or any of its Subsidiaries or
Affiliates in connection therewith after deducting therefrom reasonable
brokerage commissions, underwriting fees and discounts, legal fees and similar
fees and commissions incurred in connection therewith.
"NOTES" means the Revolving Credit Notes.
"NOTICE OF BORROWING" has the meaning specified therefor in Section
2.02(a).
"OBLIGATIONS" means (i) the joint and several obligations of the Borrowers
to pay, as and when due and payable (by scheduled maturity, required prepayment,
acceleration, demand or otherwise), all amounts from time to time owing by the
Borrowers in respect of the Loan Documents, whether for principal, interest
(including, without limitation, all interest that accrues after the commencement
of any case, proceeding or other action relating to bankruptcy, insolvency or
reorganization of any Borrower), Letter of Credit Obligations, fees,
indemnification payments, expense reimbursements or otherwise, and (ii) the
obligations of the Borrowers and the other Loan Parties to perform or observe
all of their obligations from time to time existing under the Loan Documents.
"OPERATING LEASE OBLIGATIONS" means all obligations for the payment of rent
for any real or personal property under leases or agreements to lease, other
than Capitalized Lease Obligations.
"OPHIR INVESTMENT" means the Capital Stock of Ophir Corporation, a Colorado
corporation, owned by the Parent.
"ORIGINAL FINANCING AGREEMENT" has the meaning specified therefor in the
Recitals hereto.
-19-
"ORIGINAL EFFECTIVE DATE" means November 30, 2000.
"PARENT" has the meaning specified therefore in the Preamble hereto.
"PARTICIPANT REGISTER" has the meaning specified therefor in Section
12.07(b)(v).
"PAYMENT OFFICE" means the Administrative Agent's office located at 000
Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or at such other office or
offices of the Administrative Agent as may be designated in writing from time to
time by the Administrative Agent to the Collateral Agent and the Parent.
"PERMITTED DISCRETION" means a determination made in good faith and in the
exercise of reasonable (from the prospective of a secured asset-based lender)
business judgment.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PERMITTED HOLDERS" means the Persons named on Schedule 1.01(C).
"PERMITTED INDEBTEDNESS" means:
(a) any Indebtedness owing to the Agents and the Lenders under this
Agreement and the other Loan Documents;
(b) any Indebtedness listed on Schedule 7.02(b), including the Indebtedness
evidenced by the Indenture Notes, and the extension of maturity, refinancing or
modification of the terms thereof; PROVIDED, HOWEVER, that (i) such extension,
refinancing or modification is pursuant to terms that are not less favorable to
the Borrowers and the Lenders than the terms of the Indebtedness being extended,
refinanced or modified and (ii) after giving effect to the extension,
refinancing or modification, such Indebtedness is not greater than the amount of
Indebtedness outstanding immediately prior to such extension, refinancing or
modification;
(c) Indebtedness evidenced by Capitalized Lease Obligations entered into
after the Effective Date in order to finance Capital Expenditures made by the
Borrowers in accordance with the provisions of Section 7.02(g), which
Indebtedness, when aggregated with the principal amount of all Indebtedness
incurred under this clause (c) and clause (d) of this definition, does not
exceed $5 million at any time outstanding;
(d) Indebtedness permitted by clause (e) of the definition of "Permitted
Lien" incurred after the Effective Date;
(e) Indebtedness permitted under Section 7.02(e);
(f) Subordinated Indebtedness;
(g) Indebtedness incurred in connection with the W.P. Xxxxx Lease or any
refinancing or replacement thereof not to exceed $9,000,000;
-20-
(h) Indebtedness of foreign Subsidiaries not subject to a guaranty by any
Borrower or Guarantor;
(i) Indebtedness evidenced by the Intercompany Notes, as such notes are in
effect on the date hereof;
(j) other intercompany Indebtedness among the Loan Parties so long as such
Indebtedness is evidenced by promissory notes which are pledged and delivered to
the Collateral Agent as Collateral;
(k) Indebtedness consisting of (i) reimbursement obligations to Fleet with
respect to the Fleet Letters of Credit to the extent such reimbursement
obligations are secured by cash collateral (not to exceed 110% of the stated
amount of such letters of credit), an Existing Letter of Credit or a Letter of
Credit issued under this Agreement, and (ii) reimbursement obligations to Xxxxx
Fargo Bank, N.A. with respect to the Existing Letters of Credit to the extent
such reimbursement obligations are secured by cash collateral (not to exceed
110% of the stated amount of such letters of credit), or a Letter of Credit
issued under this Agreement; and
(l) to the extent permitted under the Indenture, additional Indebtedness
for borrowed money in an aggregate amount outstanding at any time not to exceed
(i) prior to the Effective Date, $1,200,000, and (ii) thereafter, $2,000,000,
PROVIDED that such Indebtedness shall be unsecured and that the terms of such
Indebtedness would not otherwise reasonably be expected to give rise to a
Default or Event of Default under this Agreement.
"PERMITTED INVESTMENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within six months from the date of acquisition thereof; (ii)
commercial paper, maturing not more than 270 days after the date of issue rated
P-1 by Moody's or A-1 by Standard & Poor's; (iii) certificates of deposit
maturing not more than 270 days after the date of issue, issued by commercial
banking institutions and money market or demand deposit accounts maintained at
commercial banking institutions, each of which is a member of the Federal
Reserve System and has a combined capital and surplus and undivided profits of
not less than $500,000,000; (iv) repurchase agreements having maturities of not
more than 90 days from the date of acquisition which are entered into with major
money center banks included in the commercial banking institutions described in
clause (iii) above and which are secured by readily marketable direct
obligations of the Government of the United States of America or any agency
thereof, (v) money market accounts maintained with mutual funds having assets in
excess of $2,500,000,000, and (vi) tax exempt securities rated A or better by
Moody's or A+ or better by Standard & Poor's.
"PERMITTED LIENS" means:
(a) Liens securing the Obligations;
(b) Liens for taxes, assessments and governmental charges the payment of
which is not required under Section 7.01(c);
-21-
(c) Liens imposed by law, such as carriers', warehousemen's, mechanics',
materialmen's and other similar Liens arising (provided they are subordinate to
the Collateral Agent's Liens on Collateral) in the ordinary course of business
and securing obligations (other than Indebtedness for borrowed money) that are
not overdue by more than 30 days or are being contested in good faith and by
appropriate proceedings promptly initiated and diligently conducted, and a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;
(d) Liens described on Schedule 7.02(a), but not the extension of coverage
thereof to other property or the extension of maturity, refinancing or other
modification of the terms thereof or the increase of the Indebtedness secured
thereby;
(e) (i) purchase money Liens on equipment acquired or held by the Borrowers
in the ordinary course of their business to secure the purchase price of such
equipment or Indebtedness incurred solely for the purpose of financing the
acquisition of such equipment or (ii) Liens existing on such equipment at the
time of its acquisition; PROVIDED, HOWEVER, that (A) no such Lien shall extend
to or cover any other property of any Loan Party, and (B) the aggregate
principal amount of Indebtedness secured by any or all such Liens described in
clauses (i) and (ii) above shall not exceed at any one time outstanding $5
million with respect to any such Indebtedness incurred after the Effective Date;
(f) deposits and pledges securing (i) obligations incurred in respect of
workers' compensation, unemployment insurance or other forms of governmental
insurance or benefits, (ii) the performance of bids, tenders, leases, contracts
(other than for the payment of money) and statutory obligations or (iii)
obligations on surety or appeal bonds, but only to the extent such deposits or
pledges are incurred or otherwise arise in the ordinary course of business and
secure obligations not past due;
(g) easements, zoning restrictions and similar encumbrances on real
property and minor irregularities in the title thereto that do not (i) secure
obligations for the payment of money or (ii) materially impair the value of such
property or its use by any Loan Party or any of its Subsidiaries in the normal
conduct of such Person's business;
(h) Liens securing Indebtedness evidencing Capitalized Lease Obligations
described under subsection (c) of the definition of Permitted Indebtedness;
(i) the Liens of the Indenture Trustee on the Indenture Collateral;
(j) Liens to secure the Indebtedness of foreign Subsidiaries permitted by
clause (h) of the definition of "Permitted Indebtedness," provided that such
Liens are limited to the assets of such foreign Subsidiaries; and
(k) Liens in cash collateral to secure Indebtedness permitted under clause
(k) of the definition of "Permitted Indebtedness", PROVIDED that (i) such cash
collateral is limited to the extent set forth in such clause (k) and (ii) upon
the release of any such Lien, such cash collateral is used to prepay the
Revolving Loans in accordance with Section 2.05(c)(ii).
-22-
"PERSON" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or Governmental Authority.
"PHYSICAL ELECTRONICS" has the meaning specified therefor in the preamble
hereto.
"PLEDGE AGREEMENT" means the Pledge and Security Agreement, dated as of the
Original Effective Date, as amended by the Amendatory Agreement, made by the
Parent in favor of the Collateral Agent for the benefit of the Lenders, securing
the Obligations and delivered to the Collateral Agent.
"POST-DEFAULT RATE" means a rate of interest per annum equal to the rate of
interest otherwise in effect from time to time pursuant to the terms of this
Agreement plus 2.0%, or, if a rate of interest is not otherwise in effect, the
Reference Rate plus 2.0%.
"PROPERTY" means any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
"PRO RATA SHARE" means:
(a) with respect to a Lender's obligation to make Revolving Loans and
receive payments of interest, fees, and principal with respect thereto, the
percentage obtained by dividing (i) such Lender's Revolving Credit Commitment,
by (ii) the Total Revolving Commitment, PROVIDED, that, if the Total Revolving
Credit Commitment has been reduced to zero, the numerator shall be the aggregate
unpaid principal amount of such Lender's Revolving Loans (including Collateral
Agent Advances) and its interest in the Letter of Credit Obligations and the
denominator shall be the aggregate unpaid principal amount of all of the
Revolving Loans (including Collateral Agent Advances) and Letter of Credit
Obligations,
(b) with respect to all other matters (including, without limitation, the
indemnification obligations arising under Section 10.05), the percentage
obtained by dividing (i) such Lender's Revolving Credit Commitment, by (ii) the
Total Revolving Credit Commitment PROVIDED, that if such Lender's Revolving
Credit Commitment shall have been reduced to zero, such Lender's Revolving
Credit Commitment shall be deemed to be the aggregate unpaid principal amount of
such Lender's Revolving Loans (including Collateral Agent Advances) and its
interest in Letter of Credit Obligations and if the Total Revolving Credit
Commitment shall have been reduced to zero, the Total Revolving Credit
Commitment shall be deemed to be the aggregate unpaid principal amount of all
Revolving Loan (including Collateral Agent Advances) and Letter of Credit
Obligations.
"RATING AGENCIES" has the meaning specified therefor in Section 2.07.
"RECEIVABLE PURCHASE FACILITY" means that certain $25 million receivable
purchase facility entered into between Foothill, Funding Corp. and the Borrowers
in connection with the Original Financing Agreement.
-23-
"REFERENCE BANK" means The Chase Manhattan Bank, N.A., its successors or
any other commercial bank designated by the Collateral Agent to the Parent from
time to time.
"REFERENCE RATE" means the greater of (i) the rate of interest publicly
announced by the Reference Bank in New York, New York from time to time as its
prime rate or base rate and (ii) 7%. The prime rate or base rate is determined
from time to time by the Reference Bank as a means of pricing some loans to its
borrowers and neither is tied to any external rate of interest or index nor
necessarily reflects the lowest rate of interest actually charged by the
Reference Bank to any particular class or category of customers. Each change in
the Reference Rate shall be effective from and including the date such change is
publicly announced as being effective.
"REGISTER" has the meaning specified therefor in Section 12.07(b)(ii).
"REGISTERED LOAN" has the meaning specified therefor in Section 2.03(e).
"REGISTERED NOTE" has the meaning specified therefor in Section 2.03(e).
"REGULATION T", "REGULATION U" and "REGULATION X" mean, respectively,
Regulations T, U and X of the Board or any successor, as the same may be amended
or supplemented from time to time.
"REIMBURSEMENT OBLIGATIONS" means the joint and several obligation of the
Borrowers to reimburse the Administrative Agent and the Lenders for amounts
payable by the Administrative Agent or the Lenders under a Letter of Credit
Guaranty in respect of any drawing made under any Letter of Credit, together
with interest thereon as provided in Article III.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, seeping, migrating,
dumping or disposing of any Hazardous Material (including the abandonment or
discarding of barrels, containers and other closed receptacles containing any
Hazardous Material) into the indoor or outdoor environment, including ambient
air, soil, surface or ground water.
"REMEDIAL ACTION" means all actions taken to (i) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate or in any other way address
Hazardous Materials in the indoor or outdoor environment; (ii) 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; (iii) perform pre-remedial studies and
investigations and post-remedial operation and maintenance activities; or (iv)
any other actions authorized by 42 U.S.C. 9601.
"REPORTABLE EVENT" means an event described in Section 4043 of ERISA (other
than an event not subject to the provision for 30-day notice to the PBGC under
the regulations promulgated under such Section).
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares aggregate at least
51%.
-24-
"RESTRICTED SUBSIDIARY" means each Subsidiary of the Parent which is a
"Restricted Subsidiary", as such the term is defined in the Indenture.
"REVOLVING CREDIT COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make Revolving Loans to the Borrowers in the amount
set forth opposite such Lender's name in Schedule 1.01(A) hereto, as such amount
may be terminated or reduced from time to time in accordance with the terms of
this Agreement.
"REVOLVING CREDIT NOTE" means a joint and several promissory note of the
Borrowers, substantially in the form of Exhibit A, made payable to the order of
a Lender, evidencing the Indebtedness resulting from the making by such Lender
to the Borrowers of Revolving Loans and delivered to such Lender pursuant to
Article V, as such promissory note may be amended, supplemented, restated,
modified or extended from time to time, and any promissory note or notes issued
in exchange or replacement therefor. The term "Revolving Credit Note" shall
include any Registered Note evidencing the Revolving Loans and delivered
pursuant to Section 2.03(e).
"REVOLVING LOAN" means a loan made by a Lender to the Borrowers pursuant to
Section 2.01(a).
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means the Final Maturity Date,
or such earlier date on which the Revolving Credit Commitment is terminated in
full pursuant to Section 2.05 or 9.01.
"REVOLVING LOAN OBLIGATIONS" means any Obligations with respect to the
Revolving Loans (including without limitation, the principal thereof, the
interest thereon, and fees and expenses specifically related thereto).
"ROBICON" has the meaning specified therefor in the preamble hereto.
"SEC" means the Securities and Exchange Commission or any other similar or
successor agency of the Federal government administering the Securities Act.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the SEC thereunder,
all as the same shall be in effect at the time.
"SECURITIZATION" has the meaning specified therefor in Section 2.07.
"SECURITIZATION PARTIES" has the meaning specified therefor in Section
2.07.
"SECURITY AGREEMENTS" means the Security Agreements, each dated as of the
Original Effective Date, as amended by the Amendatory Agreement, made by each of
the Loan Parties in favor of the Collateral Agent for the benefit of the
Lenders, securing the Obligations and delivered to the Collateral Agent.
"SETTLEMENT PERIOD" has the meaning specified therefor in Section
2.02(d)(i) hereof.
-25-
"SOLVENT" means, with respect to any Person on a particular date, that on
such date (i) the fair value of the property of such Person is not less than the
total amount of the liabilities of such Person, (ii) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its existing debts as
they become absolute and matured, (iii) such Person is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (v) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"SPECIFIED JOINT VENTURE" means ULVAC-PHI, Incorporated, a corporation
organized under the laws of Japan, the Capital Stock of which is owned 50% by
Physical Electronics and 50% by ULVAC Japan, Ltd.
"SPECIFIED JOINT VENTURE AGREEMENT" means the Basic Agreement dated August
1982, between Physical Electronics and ULVAC Japan, Ltd., with respect to the
Specified Joint Venture, as the same may be amended or otherwise modified from
time to time in accordance with this Agreement.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"XXXXXXX XXXXXX" has the meaning specified therefor in the preamble hereto.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of any Loan Party the terms
of which are satisfactory to the Collateral Agent and the Required Lenders and
which has been expressly subordinated in right of payment to all Indebtedness of
the Loan Parties under the Loan Documents (i) by the execution and delivery of a
subordination agreement, in form and substance satisfactory to the Collateral
Agent and the Required Lenders, or (ii) otherwise on terms and conditions
(including, without limitation, subordination provisions, payment terms,
interest rates, covenants, remedies, defaults and other material terms)
satisfactory to the Collateral Agent and the Required Lenders.
"SUBSIDIARY" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
association or other entity (i) the accounts of which would be consolidated with
those of such Person in such Person's consolidated financial statements if such
financial statements were prepared in accordance with GAAP or (ii) of which more
than 50% of (A) the outstanding Capital Stock having (in the absence of
contingencies) ordinary voting power to elect a majority of the board of
directors of such corporation, (B) the interest in the capital or profits of
such partnership or limited liability company or (C) the beneficial interest in
such trust or estate is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person,
PROVIDED, that, notwithstanding the foregoing, the term "Subsidiary" shall not
include any Excluded Subsidiary.
-26-
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Employee Plan, (ii) any event that causes any Borrower or any of ERISA
Affiliates of a Borrower to incur liability under Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975
of the Internal Revenue Code, (iii) the filing of a notice of intent to
terminate an Employee Plan or the treatment of an Employee Plan amendment as a
termination under Section 4041 of ERISA, (iv) the institution of proceedings by
the PBGC to terminate an Employee Plan, or (v) any other event or condition
which might constitute grounds under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Employee Plan.
"TITLE INSURANCE POLICY" means the mortgagee's loan policy, together with
all endorsements made from time to time thereto, issued by or on behalf of a
title insurance company satisfactory in form and substance to the Collateral
Agent, insuring the Lien created by the Mortgages in an amount and on terms
satisfactory to the Collateral Agent, delivered to the Collateral Agent pursuant
to Section 7.01(b) hereof.
"TOTAL COMMITMENT" means the Total Revolving Credit Commitment.
"TOTAL REVOLVING CREDIT COMMITMENT" means the sum of the amounts of the
Lenders' Revolving Credit Commitments.
"UNPAID BALANCE" of any Accounts Receivable means at any time the unpaid
principal amount thereof.
"UNRESTRICTED SUBSIDIARY" means each Subsidiary of the Parent which is as
an "Unrestricted Subsidiary", as such term is defined in the Indenture.
"UNUSED LINE FEE" has the meaning specified therefor in Section 2.06(c).
"VIVIRAD-HVC" has the meaning specified therefore in the preamble hereto.
"VOTING STOCK" means, with respect to any Person and at any time, the
Capital Stock of such Person, of any class or classes (however designated), the
holders of which are at such time entitled, as such holders, to vote for the
election of directors (or Persons performing similar functions) of such Person.
"WARN" has the meaning specified therefor in Section 6.01(i).
"W.P. XXXXX LEASE" means the Lease Agreement by and between Corporate
Property Associates 8, L.P., as landlord, and the Parent, as tenant, dated
November 10, 1988, as amended, for the premises in Sterling, Massachusetts and
the Lease Agreement by and between Corporate Property Associates 8, L.P., as
landlord, and Maxima, as tenant, dated November 10, 1988, as amended, for the
premises located in Lancaster, Pennsylvania.
SECTION 1.02 TERMS GENERALLY. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without
-27-
limitation". The word "will" shall be construed to have the same meaning and
effect as the word "shall". Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document herein
shall be construed as referring to such agreement, instrument or other document
as from time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein),
(b) any reference herein to any Person shall be construed to include such
Person's successors and assigns, (c) the words "herein", "hereof" and
"hereunder", and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision hereof, (d) all
references herein to Articles, Sections, Exhibits and Schedules shall be
construed to refer to Articles and Sections of, and Exhibits and Schedules to,
this Agreement and (e) the words "asset" and "property" shall be construed to
have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and
contract rights. References in this Agreement to "determination" by any Agent
include good faith estimates by such Agent (in the case of quantitative
determinations) and good faith beliefs by such Agent (in the case of qualitative
determinations).
SECTION 1.03 ACCOUNTING AND OTHER TERMS. Unless otherwise expressly
provided herein, each accounting term used herein shall have the meaning given
it under GAAP applied on a basis consistent with those used in preparing the
Financial Statements. All terms used in this Agreement which are defined in
Article 8 or Article 9 of the Uniform Commercial Code in effect in the State of
New York on the date hereof and which are not otherwise defined herein shall
have the same meanings herein as set forth therein.
SECTION 1.04 TIME REFERENCES. Unless otherwise indicated herein, all
references to time of day refer to Eastern standard time or Eastern daylight
saving time, as in effect in New York City on such day. For purposes of the
computation of a period of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding"; PROVIDED, HOWEVER, that with respect to a computation
of fees or interest payable to any Agent, any Lender or the L/C Issuer, such
period shall in any event consist of at least one full day.
ARTICLE II
THE LOANS
SECTION 2.01 COMMITMENTS. (a) Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
severally agrees to make Revolving Loans to the Borrowers at any time and from
time to time from the Effective Date to the Revolving Loan Commitment
Termination Date, or until the earlier reduction of its Revolving Credit
Commitment to zero in accordance with the terms hereof, in an aggregate
principal amount of Revolving Loans at any time outstanding not to exceed the
amount of such Lender's Revolving Credit Commitment.
(b) Notwithstanding the foregoing, the aggregate principal amount of
Revolving Loans outstanding at any time to the Borrowers shall not exceed the
lower of (i) the difference between (A) the Available Commitment and (B) the
aggregate Letter of Credit
-28-
Obligations and (ii) the difference between (A) the then current Borrowing Base
and (B) the aggregate Letter of Credit Obligations. The Revolving Credit
Commitment of each Lender shall automatically and permanently be reduced to zero
on the Revolving Loan Commitment Termination Date. Within the foregoing limits,
the Borrowers may borrow, repay and reborrow, on or after the Effective Date and
prior to the Revolving Loan Commitment Termination Date, subject to the terms,
provisions and limitations set forth herein.
(c) Notwithstanding the foregoing, the aggregate principal amount of
the Loans and Letter of Credit Obligations shall not exceed the maximum
principal amount of Indebtedness which, in accordance with the Indenture, is
permitted to be incurred by the Borrowers.
SECTION 2.02 MAKING THE LOANS. (a) The Parent shall give the Administrative
Agent prior telephone notice (immediately confirmed in writing, in substantially
the form of Exhibit D hereto (a "NOTICE OF BORROWING"), not later than 1:00 p.m.
(New York City time) on the date which is five Business Days prior to the date
of the proposed Loan. Such Notice of Borrowing shall be irrevocable and shall
specify (i) the principal amount of the proposed Loan, (ii) the use of the
proceeds of such proposed Loan, and (iii) the proposed borrowing date, which
must be a Business Day. The Administrative Agent and the Lenders may act without
liability upon the basis of written, telecopied or telephonic notice believed by
the Administrative Agent in good faith to be from the Parent (or from any
Authorized Officer thereof designated in writing purportedly from the Parent to
the Administrative Agent). The Borrowers hereby waive the right to dispute the
Administrative Agent's record of the terms of any such telephonic Notice of
Borrowing. The Administrative Agent and each Lender shall be entitled to rely
conclusively on any Authorized Officer's authority to request a Loan on behalf
of the Parent until the Administrative Agent receives written notice to the
contrary. The Administrative Agent and the Lenders shall have no duty to verify
the authenticity of the signature appearing on any written Notice of Borrowing.
Except as otherwise provided in this Section 2.02, Loans shall be made ratably
by the Lenders in accordance with their respective Revolving Credit Commitments.
(b) Each Notice of Borrowing pursuant to this Section 2.02 shall be
irrevocable and the Borrowers shall be bound to make a borrowing in accordance
therewith. Each Revolving Loan shall be made in a minimum amount of $1,000,000
and shall be in an integral multiple of $100,000. The Borrowers will be limited
to one borrowing per week, subject to the other terms and conditions set forth
herein.
(c) (i) Except as otherwise provided in this subsection 2.02(c), all
Loans under this Agreement shall be made by the Lenders simultaneously and
proportionately to their Pro Rata Shares of the Total Revolving Credit
Commitment, it being understood that no Lender shall be responsible for any
default by any other Lender in that other Lender's obligations to make a Loan
requested hereunder, nor shall the Commitment of any Lender be increased or
decreased as a result of the default by any other Lender in that other Lender's
obligation to make a Loan requested hereunder, and each Lender shall be
obligated to make the Loans required to be made by it by the terms of this
Agreement regardless of the failure by any other Lender.
(ii) Notwithstanding any other provision of this Agreement, and in
order to reduce the number of fund transfers among the Borrowers, the Agents and
the
-29-
Lenders, the Borrowers, the Agents and the Lenders agree that the Administrative
Agent may (but shall not be obligated to), and the Borrowers and the Lenders
hereby irrevocably authorize the Administrative Agent to, fund, on behalf of the
Lenders, Revolving Loans pursuant to Section 2.01, subject to the procedures for
settlement set forth in subsection 2.02(d); PROVIDED, HOWEVER, that (a) the
Administrative Agent shall in no event fund such Loans if the Administrative
Agent shall have received written notice from the Required Lenders on the
Business Day prior to the day of the proposed Loan that one or more of the
conditions precedent contained in Section 5.02 will not be satisfied on the day
of the proposed Loan, and (b) the Administrative Agent shall not otherwise be
required to determine that, or take notice whether, the conditions precedent in
Section 5.02 have been satisfied. If the Parent gives a Notice of Borrowing
requesting a Revolving Loan and the Administrative Agent elects not to fund such
Loan on behalf of the Lenders, then promptly after receipt of the Notice of
Borrowing requesting such Loan, the Administrative Agent shall notify each
Lender of the specifics of the requested Loan and that it will not fund the
requested Loan on behalf of the Lenders. If the Administrative Agent notifies
the Lenders that it will not fund a requested Revolving Loan on behalf of the
Lenders, each Lender shall make its Pro Rata Share of the Loan available to the
Administrative Agent, in immediately available funds, at the Payment Office no
later than 3:00 p.m. (New York City time) (provided that the Administrative
Agent requests payment from such Lender not later than 2:00 p.m.) on the date of
the proposed Loan. The Administrative Agent will make the proceeds of such Loans
available to the Borrowers on the day of the proposed Loan by causing an amount,
in immediately available funds, equal to the proceeds of all such Loans received
by the Administrative Agent at the Payment Office or the amount funded by the
Administrative Agent on behalf of the Lenders to be deposited in an account
designated by the Parent.
(iii) If the Administrative Agent has notified the Lenders that the
Administrative Agent, on behalf of the Lenders, will fund a particular Loan
pursuant to subsection 2.02(c)(ii), the Administrative Agent may assume that
such Lender has made such amount available to the Administrative Agent on such
day and the Administrative Agent, in its sole discretion, may, but shall not be
obligated to, cause a corresponding amount to be made available to the Borrowers
on such day. If the Administrative Agent makes such corresponding amount
available to the Borrowers and such corresponding amount is not in fact made
available to the Administrative Agent by such Lender, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from the date such payment
was due until the date such amount is paid to the Administrative Agent, at the
Federal Funds Rate for three Business Days and thereafter at the Reference Rate.
During the period in which such Lender has not paid such corresponding amount to
the Administrative Agent, notwithstanding anything to the contrary contained in
this Agreement or any other Loan Document, the amount so advanced by the
Administrative Agent to the Borrowers shall, for all purposes hereof, be a
Revolving Loan made by the Administrative Agent for its own account. Upon any
such failure by a Lender to pay the Administrative Agent, the Administrative
Agent shall promptly thereafter notify the Parent of such failure and the
Borrowers shall immediately pay such corresponding amount to the Administrative
Agent for its own account.
(iv) Nothing in this subsection 2.02(c) shall be deemed to relieve
any Lender from its obligations to fulfill its Revolving Credit Commitments
hereunder or
-30-
to prejudice any rights that the Administrative Agent or the Borrowers may have
against any Lender as a result of any default by such Lender hereunder.
(d) (i) With respect to all periods for which the Administrative Agent
has funded Loans pursuant to subsection 2.02(c), on Friday of each week, or if
the applicable Friday is not a Business Day, then on the following Business Day,
or such shorter period as the Administrative Agent may from time to time select
(any such week or shorter period being herein called a "SETTLEMENT PERIOD"), the
Administrative Agent shall notify each Lender of the unpaid principal amount of
the Revolving Loans outstanding as of the last day of each such Settlement
Period. In the event that such amount is greater than the unpaid principal
amount of the Revolving Loans outstanding on the last day of the Settlement
Period immediately preceding such Settlement Period (or, if there has been no
preceding Settlement Period, the amount of the Revolving Loans made on the date
of such Lender's initial funding), each Lender shall promptly (and in any event
not later than 2:00 p.m. if the Administrative Agent requests payment from such
Lender not later than 12:00 noon on such day) make available to the
Administrative Agent its Pro Rata Share of the difference in immediately
available funds. In the event that such amount is less than such unpaid
principal amount, the Administrative Agent shall promptly pay over to each
Lender its Pro Rata Share of the difference in immediately available funds. In
addition, if the Administrative Agent shall so request at any time when a
Default or an Event of Default shall have occurred and be continuing, or any
other event shall have occurred as a result of which the Administrative Agent
shall determine that it is desirable to present claims against the Borrowers for
repayment, each Lender shall promptly remit to the Administrative Agent or, as
the case may be, the Administrative Agent shall promptly remit to each Lender,
sufficient funds to adjust the interests of the Lenders in the then outstanding
Revolving Loans to such an extent that, after giving effect to such adjustment,
each Lender's interest in the then outstanding Revolving Loans will be equal to
its Pro Rata Share thereof. The obligations of the Administrative Agent and each
Lender under this subsection 2.02(d) shall be absolute and unconditional. Each
Lender shall only be entitled to receive interest on its Pro Rata Share of the
Revolving Loans which have been funded by such Lender.
(ii) In the event that any Lender fails to make any payment
required to be made by it pursuant to subsection 2.02(d)(i), the Administrative
Agent shall be entitled to recover such corresponding amount on demand from such
Lender together with interest thereon, for each day from the date such payment
was due until the date such amount is paid to the Administrative Agent, at the
Federal Funds Rate for three Business Days and thereafter at the Reference Rate.
During the period in which such Lender has not paid such corresponding amount to
the Administrative Agent, notwithstanding anything to the contrary contained in
this Agreement or any other Loan Document, the amount so advanced by the
Administrative Agent to the Borrowers shall, for all purposes hereof, be a
Revolving Loan made by the Administrative Agent for its own account. Upon any
such failure by a Lender to pay the Administrative Agent, the Administrative
Agent shall promptly thereafter notify the Parent of such failure and the
Borrowers shall immediately pay such corresponding amount to the Administrative
Agent for its own account. Nothing in this subsection 2.02(d)(ii) shall be
deemed to relieve any Lender from its obligation to fulfill its Revolving Credit
Commitments hereunder or to prejudice any rights that the Administrative Agent
or the Borrowers may have against any Lender as a result of any default by such
Lender hereunder.
-31-
SECTION 2.03 REVOLVING CREDIT NOTE; REPAYMENT OF LOANS. (a) All Revolving
Loans made by a Lender to the Borrowers shall be evidenced by a single Revolving
Credit Note, duly executed on behalf of the Borrowers, dated the Effective Date,
and delivered to and made payable to the order of such Lender in a principal
amount equal to the amount of such Lender's Revolving Credit Commitment.
(b) The outstanding principal of all Revolving Loans shall be due and
payable on the Final Maturity Date.
(c) The Parent agrees to record each Loan on the Register referred to
in Section 12.07(b). Each Loan recorded on the Register (the "REGISTERED LOAN")
may not be evidenced by promissory notes other than a Revolving Credit Note,
which is a Registered Note (as defined below). Upon the registration of any
Loan, any promissory note (other than a Registered Note) evidencing the same
shall be null and void and shall be returned to the Parent. The Borrowers agree,
at the request of any Lender, to execute and deliver to such Lender a promissory
note in registered form to evidence such Registered Loan (i.e. containing the
registered note language set forth in Exhibit A hereto) and registered as
provided in Section 12.07(b) (a "REGISTERED NOTE"), dated the date hereof,
payable to such Lender and otherwise duly completed. Once recorded on the
Register, the Loans evidenced by such Note may not be removed from the Register
so long as it remains outstanding, and a Registered Note may not be exchanged
for a promissory note that is not a Registered Note.
SECTION 2.04 INTEREST. (a) REVOLVING LOANS. Each Revolving Loan shall bear
interest on the principal amount thereof from time to time outstanding, from the
date of such Loan until such principal amount becomes due, at a rate per annum
equal to the Reference Rate plus the Applicable Margin.
(b) DEFAULT INTEREST. To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, the principal of,
and all accrued and unpaid interest on, all Loans, and all fees, indemnities,
outstanding Reimbursement Obligations or any other Obligations of the Borrowers
under this Agreement, the Notes and other Loan Documents shall bear interest,
from the date such Event of Default occurred until such Event of Default is
cured or waived in writing in accordance herewith, at a rate per annum equal at
all times to the Post-Default Rate.
(c) INTEREST PAYMENT. Interest on each Loan shall be payable monthly,
in arrears, on the first day of each month, commencing on the first day of the
month following the month in which such Loan is made and at maturity (whether
upon demand, by acceleration or otherwise). Interest at the Post-Default Rate
shall be payable on demand. The Borrowers hereby authorize the Administrative
Agent to, and the Administrative Agent may, from time to time, charge the Loan
Account pursuant to Section 4.02 with the amount of any interest payment due
hereunder.
(d) GENERAL. All interest shall be computed on the basis of a year of
360 days for the actual number of days, including the first day but excluding
the last day, elapsed.
-32-
SECTION 2.05 REDUCTION OF REVOLVING CREDIT COMMITMENT; PREPAYMENT OF LOANS.
(a) REDUCTION OF REVOLVING CREDIT COMMITMENT. The Total Revolving Credit
Commitment shall terminate on the Revolving Loan Commitment Termination Date.
The Borrowers may, without premium or penalty, reduce the Total Revolving Credit
Commitment to an amount (which may be zero) not less than the sum of (A) the
aggregate unpaid principal amount of all Revolving Loans then outstanding, (B)
the aggregate principal amount of all Revolving Loans not yet made as to which a
Notice of Borrowing has been given by the Parent under Section 2.02, (C) the
Letter of Credit Obligations at such time and (D) the stated amount of all
Letters of Credit not yet issued as to which a request has been made and not
withdrawn. Each such reduction shall be in a minimum amount of $500,000 or an
integral multiple thereof, shall be made by providing not less than three
Business Days' prior written notice to the Administrative Agent and shall be
irrevocable. Once reduced the Total Revolving Credit Commitment may not be
increased. Each such reduction of the Total Revolving Credit Commitment shall
reduce the Revolving Credit Commitment of each Lender proportionately in
accordance with its Pro Rata Share thereof.
(b) OPTIONAL PREPAYMENT. The Borrowers may prepay without penalty or
premium the principal of the Revolving Loans, in whole or in part.
(c) MANDATORY PREPAYMENT.
(i) The Borrowers will immediately prepay the Revolving Loans at
any time when the aggregate principal amount of all Revolving Loans plus the
outstanding amounts of all Letter of Credit Obligations exceeds the lesser of
(A) the Available Commitment and (B) the Borrowing Base, to the full extent of
any such excess. On each day that any Revolving Loans or Letter of Credit
Obligations are outstanding, the Borrowers shall hereby be deemed to represent
and warrant to the Agents and the Lenders that each of the Available Commitment
and the Borrowing Base calculated as of such day equals or exceeds the aggregate
principal amount of all Revolving Loans and Letter of Credit Obligations
outstanding on such day. If at any time after the Borrowers have complied with
the first sentence of this Section 2.05(c), the aggregate Letter of Credit
Obligations is greater than the lesser of (A) the Available Commitment and (B)
the then current Borrowing Base, the Borrowers shall provide cash collateral to
the Administrative Agent in the amount of such excess, which cash collateral
shall be deposited in the Cash Collateral Account and, PROVIDED that no Event of
Default shall have occurred and be continuing, returned to the Borrowers, at
such time as the aggregate Letter of Credit Obligations plus the aggregate
principal amount of all outstanding Revolving Loans no longer exceeds the then
current Borrowing Base.
(ii) If at any time Fleet or Xxxxx Fargo Bank, N.A. releases any
cash collateral pledged to such bank to secure any Fleet Letters of Credit or
Existing Letters of Credit (as applicable), the Borrowers shall cause the cash
collateral so released to be paid directly to the Agent to be applied to prepay
any Revolving Loans outstanding at such time (but the Commitments shall not be
reduced thereby).
(iii) If at any time Foothill releases all or any portion of the
billable reserve paid to Foothill pursuant to Section 8 of the Foothill
Assignment, the Borrowers
-33-
shall cause the amount so released to be paid directly to the Agent to be
applied to prepay any Revolving Loans outstanding at such time (but the
Commitments shall not be reduced thereby).
(iv) Simultaneously with the receipt by any Loan Party of any tax
refund, the Borrowers shall deposit an amount equal to such tax refund into the
Cash Collateral Account.
(v) Simultaneously with the receipt by any Loan Party of proceeds
of any judgment, settlement or other consideration of any kind in connection
with any action, suit, arbitration or proceeding by such Person, the Borrowers
shall deposit an amount equal to the net proceeds received into the Cash
Collateral Account.
(vi) DISPOSITIONS; CASUALTY EVENTS. Immediately upon any
Disposition by any Loan Party, the Borrowers shall deposit an amount equal to
100% of the Net Cash Proceeds received by any Loan Party in connection with such
Disposition into the Cash Collateral Account. Upon the loss, destruction or
taking by condemnation of any Collateral, the Borrowers shall deposit an amount
equal to 100% of the proceeds in excess of $750,000 in the aggregate for any
Fiscal Year received by any Loan Party in connection therewith, net of any
reasonable expenses incurred in collecting such proceeds, into the Cash
Collateral Account.
(vii) Upon the issuance or incurrence by any Loan Party of any
Indebtedness except as permitted by Section 7.02(b), or the sale or issuance by
the Borrowers or any other Loan Party of any shares of its Capital Stock, the
Borrowers shall deposit an amount equal to 100% of the Net Cash Proceeds
received by any Loan Party in connection therewith into the Cash Collateral
Account.
(viii) Simultaneously with the receipt by any Loan Party of
proceeds of the ASI Performance Security Deposit, the Borrowers shall deposit an
amount equal to such proceeds, in Dollars, into the Cash Collateral Account.
(ix) Within 15 days of the occurrence of a "Change of Control" as
such term is defined in the Indenture, the Borrowers shall prepay all
outstanding Obligations at such time and the Total Revolving Credit Commitment
shall be terminated unless prior to such date, the requisite holders of
Indenture Notes have waived their redemption rights resulting from a "Change of
Control" (as defined in the Indenture) as set forth in Section 4.19 of the
Indenture (or any replacement section).
The provisions of this subsection (c) shall not be deemed to be implied
consent to any such issuance, incurrence, disposition , transfer or sale
otherwise prohibited by the terms and conditions hereof.
(d) APPLICATION OF DEPOSITS AND PAYMENTS. In accordance with the Cash
Collateral Agreement, all amounts deposited in the Cash Collateral Account (i)
shall constitute Collateral for the Obligations, (ii) may be withdrawn by the
Parent and used to pay the regularly scheduled interest payments payable by the
Parent pursuant to the Indenture Notes, PROVIDED that, both before and
immediately after giving effect to such payment (A) no Default or Event of
Default has occurred and is continuing and (B) Availability plus the amount of
the Borrowers' cash
-34-
on hand equals or exceeds $1 million, (iii) solely in the case of a deposit made
in connection with the loss, destruction or taking by condemnation of Collateral
in accordance with the second sentence of Section 2.05(c)(vi), may be withdrawn
by the Borrowers to replace, repair or restore such Collateral, PROVIDED that
(A) such withdrawal must be made and such Collateral replaced, repaired or
restored within 180 days after the date of such loss, destruction or taking (or
in the case of a loss or destruction caused by earthquake or other natural
disaster, 360 days), (B) the amount withdrawn may not exceed the amount
deposited in connection with any loss, destruction or taking, and (C) no Default
or Event of Default shall have occurred and be continuing at the time of such
withdrawal and (iv) upon the occurrence and during the continuance of an Event
of Default, may be applied by the Collateral Agent to the Obligations in
accordance with Section 4.04(b). The Collateral Agent agrees to execute any
written consent, promptly following request by the Parent, to enable the
Borrowers to withdraw deposits from the Cash Collateral Account in accordance
with, and to the extent permitted by, this Section 2.05(d).
(e) INTEREST AND FEES. Any prepayment made pursuant to this Section
2.05 (other than payments pursuant to subsection (c)(iii) of this Section 2.05)
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of prepayment, and if such prepayment would reduce the amount of the
outstanding Loans to zero at a time when the Revolving Credit Commitment has
been terminated, such prepayment shall be accompanied by the payment of the fees
accrued to such date pursuant to Section 2.06.
(f) CUMULATIVE PREPAYMENTS. Except as otherwise expressly provided in
this Section 2.05, payments with respect to any subsection of this Section 2.05
are in addition to payments made or required to be made under any other
subsection of this Section 2.05.
SECTION 2.06 FEES. (a) CLOSING FEE. On or prior to the Effective Date, the
Borrowers shall pay to the Administrative Agent for the account of the Lenders a
non-refundable closing fee (the "CLOSING FEE") equal to $175,000 which shall be
deemed fully earned when paid. The Borrowers agree that if at any time the
Agents shall agree to reduce the Availability Block, in addition to such other
terms and conditions as shall be required by the Agents, the Borrowers shall pay
a non-refundable fee equal to 1% of the amount by which the Availability Block
has been reduced.
(b) ANNIVERSARY FEE. On each of November 30, 2001 and November 30, 2002
the Borrowers shall pay to the Administrative Agent for the account of the
Lenders a non-refundable anniversary fee (the "ANNIVERSARY FEE") equal to 1% of
the Available Commitment on such date, payable and fully earned on each such
date.
(c) UNUSED LINE FEE. From and after the Effective Date and until the
Revolving Loan Commitment Termination Date, the Borrowers shall pay to the
Administrative Agent for the account of the Lenders in accordance with their Pro
Rata Shares a non-refundable unused line fee (the "UNUSED LINE FEE"), which
shall accrue at the rate per annum of 0.5% on the excess, if any, of the
Available Commitment over the sum of the average principal amount of Revolving
Loans and Letter of Credit Obligations outstanding from time to time and shall
be payable monthly in arrears on the first day of each month commencing July 1,
2001.
-35-
(d) LOAN SERVICING FEE. From and after the Effective Date and until the
Final Maturity Date, the Borrowers shall pay to the Administrative Agent for the
account of the Agents in accordance with a written agreement between such Agents
a non-refundable loan servicing fee (the "LOAN SERVICING FEE") equal to $20,000
each quarter, payable quarterly in advance on the first day of each calendar
quarter commencing on July 1, 2001.
SECTION 2.07 SECURITIZATION. The Borrowers hereby acknowledge that the
Lenders and any of their Affiliates may sell or securitize the Loans (a
"SECURITIZATION") through the pledge of the Loans as collateral security for
loans to the Lenders or their Affiliates or through the sale of the Loans or the
issuance of direct or indirect interests in the Loans, which loans to the
Lenders or their Affiliates or direct or indirect interests will be rated by
Xxxxx'x, Standard & Poor's or one or more other rating agencies (the "RATING
AGENCIES"). The Borrowers shall cooperate with the Lenders and their Affiliates
to effect the Securitization including, without limitation, by (a) amending this
Agreement and the other Loan Documents, and executing such additional documents,
as reasonably requested by the Lenders in connection with the Securitization,
PROVIDED THAT (i) any such amendment or additional documentation does not impose
material additional costs on the Borrowers and (ii) any such amendment or
additional documentation does not materially adversely affect the rights, or
materially increase the obligations, of the Borrowers under the Loan Documents
or change or affect in a manner adverse to the Borrowers the financial terms of
the Loans, (b) providing such information as may be reasonably requested by the
Lenders in connection with the rating of the Loans or the Securitization, and
(c) providing in connection with any rating of the Loans a certificate (i)
agreeing to indemnify the Lenders and any of their Affiliates, any of the Rating
Agencies, or any party providing credit support or otherwise participating in
the Securitization (collectively, the "SECURITIZATION PARTIES") for any losses,
claims, damages or liabilities (the "LIABILITIES") to which the Lenders, their
Affiliates or such Securitization Parties may become subject insofar as the
Liabilities arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Loan Document made by or
on behalf of, or in any writing delivered by or on behalf of, the Borrowers and
their Affiliates to the Lenders in connection with any Loan Document or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein, or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and such indemnity shall survive any transfer by the Lenders or
their successors or assigns of the Loans and (ii) agreeing to reimburse the
Lenders and any of their Affiliates for any legal or other expenses reasonably
incurred by such Persons in connection with defending the Liabilities.
SECTION 2.08 TAXES. (a) All payments made by the Borrowers hereunder, under
the Notes or under any other Loan Document shall be made without set-off,
counterclaim, deduction or other defense. All such payments shall be made free
and clear of and without deduction for any present or future income, franchise,
sales, use, excise, stamp or other taxes, levies, imposts, deductions, charges,
fees, withholdings, restrictions or conditions of any nature now or hereafter
imposed, levied, collected, withheld or assessed by any jurisdiction (whether
pursuant to United States Federal, state, local or foreign law) or by any
political subdivision or taxing authority thereof or therein, and all interest,
penalties or similar liabilities, excluding taxes on the net income of, and
branch profit taxes of, any Lender, any Agent or the L/C Issuer imposed by the
jurisdiction in which such Lender, such Agent or the L/C Issuer is organized or
any political subdivision thereof or taxing authority thereof or any
jurisdiction in which such Person's principal office or relevant lending office
is located or
-36-
any political subdivision thereof or taxing authority thereof (such nonexcluded
taxes being hereinafter collectively referred to as "TAXES"). If the Borrowers
shall be required by law to deduct or to withhold any Taxes from or in respect
of any amount payable hereunder,
(i) the amount so payable shall be increased to the extent
necessary so that after making all required deductions and withholdings
(including Taxes on amounts payable to the Lenders or the L/C Issuer pursuant to
this sentence) the Lenders or the L/C Issuer receive an amount equal to the sum
they would have received had no such deductions or withholdings been made,
(ii) the Borrowers shall make such deductions or withholdings, and
(iii) the Borrowers shall pay the full amount deducted or withheld
to the relevant taxation authority in accordance with applicable law. Whenever
any Taxes are payable by the Borrowers, as promptly as possible thereafter, the
Parent shall send the Lenders, the L/C Issuer and the Agents an official receipt
(or, if an official receipt is not available, such other documentation as shall
be satisfactory to the Lenders, L/C Issuer or the Agents, as the case may be)
showing payment. In addition, the Borrowers agree to pay any present or future
taxes, charges or similar levies which arise from any payment made hereunder or
from the execution, delivery, performance, recordation or filing of, or
otherwise with respect to, this Agreement, the Revolving Credit Note, the
Letters of Credit or any other Loan Document other than the foregoing excluded
taxes (hereinafter referred to as "OTHER TAXES").
(b) The Borrowers will indemnify the Agents, the Lenders and the L/C
Issuer for the amount of Taxes or Other Taxes (including, without limitation,
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.08) paid by any Agent, Lender or the L/C Issuer and any liability
(including penalties, interest and expenses for nonpayment, late payment or
otherwise) arising therefrom or with respect thereto, whether or not such Taxes
or Other Taxes were correctly or legally asserted. This indemnification shall be
paid within 30 days from the date on which such Agent, Lender or such L/C Issuer
makes written demand which demand shall identify the nature and amount of Taxes
or Other Taxes for which indemnification is being sought and the basis of the
claim.
(c) Each Lender that is organized in a jurisdiction other than the
United States, a State thereof or the District of Columbia hereby agrees that:
(i) it shall, no later than the Effective Date (or, in the case of
a Lender which becomes a party hereto pursuant to Section 12.07 hereof after the
Effective Date, the date upon which such Lender becomes a party hereto) deliver
to the Parent and the Agents: (A) two accurate, complete and signed originals of
U.S. Internal Revenue Service Form 4224 or successor form, or (B) two accurate,
complete and signed originals of U.S. Internal Revenue Service Form 1001 or
successor form, in each case indicating that such Lender is on the date of
delivery thereof entitled to receive payments of principal, interest and fees
for the account of its lending office under this Agreement free from withholding
of United States Federal income tax;
-37-
(ii) if at any time such Lender changes its lending office or
offices or selects an additional lending office it shall, at the same time or
reasonably promptly thereafter, deliver to the Parent through the Agents in
replacement for, or in addition to, the forms previously delivered by it
hereunder: (A) if such changed or additional lending office is located in the
United States, two accurate, complete and signed originals of such Form 4224 or
successor form, or (B) two accurate, complete and signed originals of such Form
1001 or successor form, in each case indicating that such Lender is on the date
of delivery thereof entitled to receive payments of principal, interest and fees
for the account of such changed or additional lending office under this
Agreement free from withholding of United States Federal income tax; and
(iii) it shall, promptly upon the Parent's reasonable request to
that effect, deliver to the Parent such other forms or similar documentation as
may be required from time to time by any applicable law, treaty, rule or
regulation in order to establish such Lender's tax status for withholding
purposes.
(d) If the Borrowers fail to perform their obligations under this
Section 2.08, the Borrowers shall indemnify the Agents, the Lenders and the L/C
Issuer for any taxes, interest or penalties that may become payable as a result
of any such failure.
ARTICLE III
LETTERS OF CREDIT
SECTION 3.01 LETTER OF CREDIT GUARANTY. (a) In order to assist the
Borrowers in establishing or opening standby letters of credit, which shall not
have expiration dates that exceed 180 days from the date of issuance, or such
sooner expiry date as is provided in Section 3.01(b) (the "LETTERS OF CREDIT"),
with the L/C Issuer, the Borrowers have requested the Administrative Agent to
join in the applications for such Letters of Credit, and/or guarantee payment or
performance of such Letters of Credit and any drafts thereunder through the
issuance of a Letter of Credit Guaranty, thereby lending the Administrative
Agent's credit to that of the Borrowers, and the Administrative Agent has agreed
to do so. These arrangements shall be coordinated by the Administrative Agent
subject to the terms and conditions set forth below. The Administrative Agent
shall not be required to be the issuer of any Letter of Credit. The Parent will
be the account party for application for a Letter of Credit, which shall be
substantially in the form of Exhibit G hereto or on a computer transmission
system approved by the Administrative Agent and the L/C Issuer or such other
written form or computer transmission system as may from time to time be
approved by the L/C Issuer and the Administrative Agent, and shall be duly
completed in a manner reasonably acceptable to the Administrative Agent,
together with such other certificates, agreements, documents and other papers
and information as the L/C Issuer or the Administrative Agent may reasonably
request (THE "LETTER OF CREDIT APPLICATION"). In the event of any conflict
between the terms of the Letter of Credit Application and this Agreement, for
purposes of this Agreement, the terms of this Agreement shall control. The
parties hereby agree that the Fleet Letters of Credit and the Existing Letters
of Credit shall not constitute Letters of Credit for purposes of this Agreement
to the extent such Fleet Letters of Credit and Existing Letters of Credit are
supported by cash collateral or other letters of credit in a manner satisfactory
to the Agents.
-38-
(b) The aggregate Letter of Credit Obligations shall not exceed the
lowest of (i) the difference between (A) the Available Commitment and (B) the
aggregate principal amount of Revolving Loans then outstanding, (ii) the
difference between (A) the Borrowing Base and (B) the aggregate principal amount
of the Revolving Loans then outstanding, and (iii) the L/C Subfacility. In
addition, the terms and conditions of all Letters of Credit and all changes or
modifications thereof by the Borrowers and/or the L/C Issuer shall in all
respects be subject to the prior approval of the Administrative Agent in the
reasonable exercise of its sole and absolute discretion, PROVIDED, HOWEVER, that
(i) the expiry date of all Letters of Credit shall be no later than fifteen days
prior to the Revolving Loan Commitment Termination Date unless, on or prior to
fifteen days prior to the Revolving Loan Commitment Termination Date either (x)
such Letters of Credit shall be cash collateralized in an amount equal to 110%
of the face amount of such Letters of Credit or (y) the Borrowers shall provide
the Administrative Agent and the Lenders with an indemnification, in form and
substance reasonably satisfactory to the Administrative Agent, from a commercial
bank or other financial institution acceptable to the Agents for any Letter of
Credit Obligations with respect to such Letters of Credit, and (ii) the Letters
of Credit and all documentation in connection therewith shall be in form and
substance reasonably satisfactory to the Administrative Agent and the L/C
Issuer.
(c) The Administrative Agent shall have the right, without notice to
the Borrowers, to charge the Loan Account with the amount of any and all
indebtedness, liabilities and obligations of any kind (including indemnification
for breakage costs, capital adequacy and reserve requirement charges) incurred
by the Agents or the Lenders under the Letter of Credit Guaranty or incurred by
an L/C Issuer with respect to a Letter of Credit at the earlier of (i) payment
by the Administrative Agent or the Lenders under the Letter of Credit Guaranty
or (ii) the occurrence of an Event of Default. Any amount charged to the Loan
Account shall be deemed a Revolving Loan hereunder made by the Lenders to the
Borrowers, funded by the Administrative Agent on behalf of the Lenders and
subject to Section 2.02 of this Agreement. Any charges, fees, commissions, costs
and expenses charged to the Administrative Agent for the Borrowers' account by
the L/C Issuer in connection with or arising out of Letters of Credit or
transactions relating thereto will be charged to the Loan Account in full when
charged to or paid by the Administrative Agent and, when charged, shall be
conclusive on the Borrowers absent manifest error. Each of the Lenders and the
Borrowers agrees that the Administrative Agent shall have the right to make such
charges regardless of whether any Event of Default or Default shall have
occurred and be continuing or whether any of the conditions precedent in Section
5.02 have been satisfied.
(d) The Borrowers unconditionally jointly and severally indemnify each
Agent and each Lender and hold each Agent and each Lender harmless from any and
all loss, claim or liability incurred by any Agent or any Lender arising from
any transactions or occurrences relating to Letters of Credit, any drafts or
acceptances thereunder, the Collateral relating thereto, and all Obligations in
respect thereof, including any such loss or claim due to any action taken by the
L/C Issuer, other than for any such loss, claim or liability arising out of the
gross negligence or willful misconduct of the L/C Issuer, any Agent or any
Lender as determined by a final judgment of a court of competent jurisdiction.
The Borrowers further agree to jointly and severally hold each Agent and each
Lender harmless from any errors or omission, negligence or misconduct by the L/C
Issuer. The Borrowers' unconditional obligations to each Agent, the L/C Issuer
and each Lender with respect to Letters of Credit hereunder shall not be
modified or diminished for any
-39-
reason or in any manner whatsoever, other than as a result of such Agent's, the
L/C Issuer's or such Lender's gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction. The
Borrowers agree that any charges incurred by the Administrative Agent or the L/C
Issuer for the Borrowers' account hereunder may be charged to the Loan Account.
(e) Upon any payments made to the L/C Issuer under the Letter of Credit
Guaranty, the Agents or the Lenders, as the case may be, shall, without
prejudice to its rights under this Agreement (including that such unreimbursed
amounts shall constitute Loans hereunder), acquire by subrogation, any rights,
remedies, duties or obligations granted or undertaken by the Borrowers in favor
of the L/C Issuer in any application for Letters of Credit, any standing
agreement relating to Letters of Credit or otherwise, all of which shall be
deemed to have been granted to the Agents and the Lenders and apply in all
respects to the Agents and the Lenders and shall be in addition to any rights,
remedies, duties or obligations contained herein.
SECTION 3.02 PARTICIPATIONS. (a) PURCHASE OF PARTICIPATIONS. Immediately
upon issuance by the L/C Issuer of any Letter of Credit pursuant to this
Agreement, each Lender which has a Revolving Credit Commitment hereunder (a
"PARTICIPATING LENDER") shall be deemed to have irrevocably and unconditionally
purchased and received from the Administrative Agent, without recourse or
warranty, an undivided interest and participation, to the extent of such
Lender's Pro Rata Share of the Total Revolving Credit Commitment, in all
obligations of the Administrative Agent in such Letter of Credit (including,
without limitation, all Reimbursement Obligations of the Borrowers with respect
thereto pursuant to the Letter of Credit Guaranty or otherwise).
(b) SHARING OF PAYMENTS. In the event that the Administrative Agent
makes any payment in respect of the Letter of Credit Guaranty and the Borrowers
shall not have repaid such amount to the Administrative Agent, the
Administrative Agent shall charge the Loan Account in the amount of the
Reimbursement Obligation, in accordance with Sections 3.01(c) and 4.02 of this
Agreement.
(c) OBLIGATIONS IRREVOCABLE. The obligations of a Participating Lender
to make payments to the Administrative Agent for the account of the Agents, the
Lenders or the L/C Issuer with respect to a Letter of Credit shall be
irrevocable, without any qualification or exception whatsoever and shall be made
in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrowers may have at any time against a beneficiary named in such
Letter of Credit or any transferee of such Letter of Credit (or any Person for
whom any such transferee may be acting), any Agent, any Lender, or any other
Person, whether in connection with this Agreement, such Letter of Credit, the
transactions contemplated herein or any unrelated transactions
-40-
(including any underlying transactions between any Borrower or any other party
and the beneficiary named in such Letter of Credit);
(iii) any draft, certificate or any other document presented under
such Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan Documents;
(v) any failure by any Agent to provide any notices required
pursuant to this Agreement relating to such Letter of Credit;
(vi) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit; or
(vii) the occurrence of any Default or Event of Default.
SECTION 3.03 LETTERS OF CREDIT. (a) REQUEST FOR ISSUANCE. The Parent may,
upon notice not later than 1:00 p.m., New York City time, at least two Business
Days in advance of the Effective Date, request the Administrative Agent to
assist the Borrowers in establishing or opening a Letter of Credit by delivering
to the Administrative Agent, with a copy to the L/C Issuer, a Letter of Credit
Application, together with any necessary related documents. The Administrative
Agent shall not provide support, pursuant to the Letter of Credit Guaranty, if
the Administrative Agent shall have received written notice from the Required
Lenders on the Business Day immediately preceding the proposed issuance date for
such Letter of Credit that one or more of the conditions precedent in Article V
will not have been satisfied on such date, and the Administrative Agent shall
otherwise be required to determine that, or take notice whether, the conditions
precedent set forth in Article V have been satisfied.
(b) LETTER OF CREDIT FEES. (i) The Borrowers shall pay to the
Administrative Agent for the account of the Participating Lenders, in accordance
with the Participating Lenders' Pro Rata Shares (x) for any Letter of Credit
issued hereunder, a nonrefundable fee equal to 3% per annum of the stated amount
of such Letter of Credit, payable on the date such Letter of Credit is issued
and (y) for any amendment to an existing Letter of Credit that increases the
stated amount of such Letter of Credit, a nonrefundable fee equal to 3% per
annum of the increase in the stated amount of such Letter of Credit, payable on
the date of such increase (collectively, the "LETTER OF CREDIT FEES").
(ii) L/C ISSUER CHARGES. The Borrowers shall pay to the
Administrative Agent the standard charges actually assessed by the L/C Issuer in
connection with the issuance, administration, amendment, payment or cancellation
of Letters of Credit.
(iii) CHARGES TO THE LOAN ACCOUNT. The Borrowers hereby authorize
the Administrative Agent to, and the Administrative Agent may, from time to
time,
-41-
charge the Loan Account pursuant to Sections 3.01(c) and 4.02 of this Agreement
with the amount of any Letter of Credit fees or charges due under this Section
3.03.
ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
SECTION 4.01 AUDIT AND COLLATERAL MONITORING FEES. The Loan Parties
acknowledge that the Agents may visit the Loan Parties and/or conduct audits,
inspections, valuations, appraisals and/or field examinations of the Loan
Parties at any time and from time to time in a manner so as to not unduly
disrupt the business of the Loan Parties. The Borrowers agree to pay $1,500 per
day per examiner plus the examiner's out-of-pocket costs and reasonable expenses
(including all charges of third party appraisers and professionals employed by
the Agents) incurred in connection with all such visits, inspections, audits,
valuations, appraisals and examinations (collectively, "FIELD EXAMINATION
FEES").
SECTION 4.02 PAYMENTS; COMPUTATIONS AND STATEMENTS. (a) The Borrowers will
make each payment under the Revolving Credit Note not later than 2:00 p.m. (New
York City time) on the day when due, in lawful money of the United States of
America and in immediately available funds, to the Administrative Agent at the
Payment Office. All payments received by the Administrative Agent after 2:00
p.m. (New York City time) on any Business Day will be credited to the Loan
Account on the next succeeding Business Day. All payments shall be made by the
Borrowers without defense, set-off or counterclaim to the Agents and the
Lenders. Except as provided in Section 2.02, after receipt, the Administrative
Agent will promptly thereafter cause to be distributed like funds relating to
the payment of principal ratably to the Lenders in accordance with their Pro
Rata Shares and like funds relating to the payment of any other amount payable
to any Lender to such Lender, in each case to be applied in accordance with the
terms of this Agreement, PROVIDED that the Administrative Agent will cause to be
distributed all interest and fees received from or for the account of the
Borrowers not less than once each month and in any event promptly after receipt
thereof. The Lenders and the Borrowers hereby authorize the Administrative Agent
to, and the Administrative Agent may, from time to time, charge the Loan Account
of the Borrowers with any amount due and payable by the Borrowers under any Loan
Document. Each of the Lenders and the Borrowers agree that the Administrative
Agent shall have the right to make such charges whether or not any Event of
Default or Default shall have occurred and be continuing or whether any of the
conditions precedent in Section 5.02 have been satisfied. Any amount charged to
the Loan Account of the Borrowers shall be deemed a Revolving Loan hereunder
made by the Lenders to the Borrowers, funded by the Administrative Agent on
behalf of the Lenders and subject to Section 2.02 of this Agreement. The Lenders
and the Borrowers confirm that any charges which the Administrative Agent may so
make to the Loan Account of the Borrowers as herein provided will be made as an
accommodation to the Borrowers and solely at the Administrative Agent's
discretion, PROVIDED that the Administrative Agent shall from time to time upon
the request of the Collateral Agent, charge the Loan Account of the Borrowers
with any amount due and payable under any Loan Document. Whenever any payment to
be made under any such Loan Document shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day and such extension of time shall in such case be included in the computation
of interest or fees, as the case
-42-
may be. All computations of fees shall be made by the Administrative Agent on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
fees are payable. Each determination by the Administrative Agent of an interest
rate or fees hereunder shall be conclusive and binding for all purposes in the
absence of manifest error.
(b) The Administrative Agent shall provide the Parent, promptly after
the end of each calendar month, a summary statement (in the form from time to
time used by the Administrative Agent) of the opening and closing daily balances
in the Loan Account of the Borrowers during such month, the amounts and dates on
all Loans made to the Borrowers during such month, the amounts and dates of all
payments on account of the Loans to the Borrowers during such month and the
Loans to which such payments were applied, the amount of interest accrued on the
Loans to the Borrowers during such month, any Letters of Credit issued by the
L/C Issuer for the account of the Borrowers during such month, specifying the
face amount thereof, the amount of charges to such Loan Account and/or Loans
made to the Borrowers during such month to reimburse the Lenders for drawings
made under Letters of Credit, and the amount and nature of any charges to such
Loan Account made during such month on account of fees, commissions, expenses
and other Obligations. All entries on any such statement shall, 30 days after
the same is sent, be presumed to be correct and shall be final and conclusive
absent manifest error.
SECTION 4.03 SHARING OF PAYMENTS, ETC. Except as provided in Section 2.02,
if any Lender shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) on account of any Obligation
in excess of its ratable share of payments on account of similar obligations
obtained by all the Lenders, such Lender shall forthwith purchase from the other
Lenders such participations in such similar obligations held by them as shall be
necessary to cause such purchasing Lender to share the excess payment ratably
with each of them; PROVIDED, HOWEVER, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Lender, such purchase from
each Lender shall be rescinded and such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery together with an amount
equal to such Lender's ratable share (according to the proportion of (i) the
amount of such Lender's required repayment to (ii) the total amount so recovered
from the purchasing Lender of any interest or other amount paid by the
purchasing Lender in respect of the total amount so recovered). The Borrowers
agree that any Lender so purchasing a participation from another Lender pursuant
to this Section 4.03 may, to the fullest extent permitted by law, exercise all
its rights (including the Lender's right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrowers in the amount of such participation.
SECTION 4.04 APPORTIONMENT OF PAYMENTS. (a) Subject to Section 2.02 hereof
and to any written agreement among the Agents and the Lenders, all payments of
principal and interest in respect of outstanding Loans, all payments in respect
of the Reimbursement Obligations, all payments of fees and all other payments in
respect of any other Obligations, shall be allocated by the Administrative Agent
among such of the Lenders or the Agents as are entitled thereto, in proportion
to their respective Pro Rata Shares or otherwise as provided herein or, in
respect of payments not made on account of Loans or Letter of Credit
Obligations, as designated by the Person making payment when the payment is
made.
-43-
(b) After the occurrence and during the continuance of an Event of
Default, all payments in respect of any Obligations and all proceeds of the
Collateral, shall, unless the Administrative Agent shall otherwise agree, be
applied, notwithstanding any other provision of this Agreement, (i) FIRST, to
pay the Obligations in respect of any fees, expense reimbursements, indemnities
and other amounts then due to the Agents or the L/C Issuer until paid in full;
(ii) SECOND, ratably to pay the Revolving Loan Obligations (including Collateral
Agent Advances) in respect of any fees and indemnities then due to the Lenders
until paid in full; (iii) THIRD, ratably to pay interest due in respect of the
Revolving Loans, Reimbursement Obligations and Collateral Agent Advances until
paid in full; (iv) FOURTH, ratably to pay principal of the Revolving Loans and
Letter of Credit Obligations (or, to the extent such Obligations are contingent,
to provide cash collateral in respect of such Obligations) and Collateral Agent
Advances until paid in full; and (v) FIFTH, to the ratable payment of all other
Obligations then due and payable.
(c) For purposes of Section 4.04(b), "paid in full" with respect to
interest shall include interest accrued after the commencement of any Insolvency
Proceeding irrespective of whether a claim for such interest is allowable in
such Insolvency Proceeding.
(d) In the event of a direct conflict between the priority provisions
of this Section 4.04 and other provisions contained in any other Loan Document,
it is the intention of the parties hereto that both 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 4.04 shall control and govern.
SECTION 4.05 INCREASED COSTS AND REDUCED RETURN. (a) If any Lender or the
L/C Issuer shall have determined that the adoption or implementation of, or any
change in, any law, rule, treaty or regulation, or any policy, guideline or
directive of, or any change in the interpretation or administration thereof by,
any court, central bank or other Administrative or Governmental Authority, or
compliance by the L/C Issuer or any Lender or any Person controlling any such
Lender or the L/C Issuer with any directive of or guideline from any central
bank or other Governmental Authority or the introduction of or change in any
accounting principles applicable to the L/C Issuer or any Lender or any Person
controlling any such Lender or the L/C Issuer (in each case, whether or not
having the force of law), shall (i) change the basis of taxation of payments to
the L/C Issuer or any Lender or any Person controlling any such Lender or the
L/C Issuer of any amounts payable hereunder (except for taxes on the overall net
income of the L/C Issuer or any Lender or any Person controlling any such Lender
or the L/C Issuer), (ii) impose, modify or deem applicable any reserve, special
deposit or similar requirement against any Loan, Letter of Credit or against
assets of or held by, or deposits with or for the account of, or credit extended
by, the L/C Issuer or any Lender, or any Person controlling any such Lender or
the L/C Issuer or (iii) impose on the L/C Issuer or any Lender or any Person
controlling any such Lender or the L/C Issuer any other condition regarding this
Agreement or any Loan or Letter of Credit, and the result of any event referred
to in clauses (i), (ii) or (iii) above shall be to increase the cost to the L/C
Issuer or any Lender of making any Loan, issuing, guaranteeing or participating
in any Letter of Credit, or agreeing to make any Loan or issue, guaranty or
participate in any Letter of Credit, or to reduce any amount received or
receivable by the L/C Issuer or any Lender hereunder, then, upon demand by the
L/C Issuer or such Lender,
-44-
the Borrowers shall pay to the L/C Issuer or such Lender such additional amounts
as will compensate the L/C Issuer or such Lender for such increased costs or
reductions in amount.
(b) If any Lender or the L/C Issuer shall have determined that any
Capital Guideline or adoption or implementation of, or any change in, any
Capital Guideline by the Governmental Authority charged with the interpretation
or administration thereof, or compliance by the L/C Issuer, any Lender or any
Person controlling such L/C Issuer or any Lender with any Capital Guideline or
with any request or directive of any such Governmental Authority with respect to
any Capital Guideline, or the implementation of, or any change in, any
applicable accounting principles (in each case, whether or not having the force
of law), either (i) affects or would affect the amount of capital required or
expected to be maintained by the L/C Issuer, any Lender or any Person
controlling such L/C Issuer or any Lender, and the L/C Issuer or any Lender
determines that the amount of such capital is increased as a direct or indirect
consequence of any Loans made or maintained, Letters of Credit issued or any
guaranty or participation with respect thereto, or the L/C Issuer's, any
Lender's or any such other controlling Person's other obligations hereunder, or
(ii) has or would have the effect of reducing the rate of return on the L/C
Issuer's, any Lender's, any such other controlling Person's capital to a level
below that which such L/C Issuer, such Lender or such controlling Person could
have achieved but for such circumstances as a consequence of any Loans made or
maintained, Letters of Credit issued, or any guaranty or participation with
respect thereto or any agreement to make Loans, to issue Letters of Credit or
such L/C Issuer's, such Lender's, such other controlling Person's other
obligations hereunder (in each case, taking into consideration such L/C
Issuer's, such Lender's or such other controlling Person's policies with respect
to capital adequacy), then, upon demand by the L/C Issuer or any Lender, the
Borrowers shall pay to the L/C Issuer or such Lender from time to time such
additional amounts as will compensate the L/C Issuer or such Lender for such
cost of maintaining such increased capital or such reduction in the rate of
return on such L/C Issuer's, such Lender's or such other controlling Person's
capital.
(c) All amounts payable under this Section 4.05 shall bear interest
from the date that is ten days after the date of demand by the L/C Issuer or a
Lender until payment in full to the L/C Issuer or such Lender at the Reference
Rate. A certificate of the L/C Issuer or any Lender claiming compensation under
this Section 4.05 specifying the event herein above described and the nature of
such event shall be submitted by the L/C Issuer or such Lender to the Parent,
setting forth the additional amount due and an explanation of the calculation
thereof, the L/C Issuer's or such Lender's reasons for invoking the provisions
of this Section 4.05, and shall be final and conclusive absent manifest error.
SECTION 4.06 JOINT AND SEVERAL LIABILITY OF THE BORROWERS. (a)
Notwithstanding anything in this Agreement or any other Loan Document to the
contrary, each of the Borrowers hereby accepts joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Agent and the Lenders under this Agreement
and the other Loan Documents, for the mutual benefit, directly and indirectly,
of each of the Borrowers and in consideration of the undertakings of the other
Borrowers to accept joint and several liability for the Obligations. Each of the
Borrowers, 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
-45-
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 4.06), it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of each of the Borrowers without preferences or distinction among
them. If and to the extent that any of the Borrowers 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. Subject to the terms and conditions hereof, the Obligations of each
of the Borrowers under the provisions of this Section 4.06 constitute the
absolute and unconditional, full recourse Obligations of each of the Borrowers
enforceable against each such Person to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement, the other Loan Documents or any other circumstances whatsoever.
(b) The provisions of this Section 4.06 are made for the benefit of the
Agent, the Lenders and their successors and assigns, and may be enforced by them
from time to time against any or all of the Borrowers as often as occasion
therefor may arise and without requirement on the part of the Agent, the Lenders
or such successors or assigns first to xxxxxxxx any of its or their claims or to
exercise any of its or their rights against any of the other Borrowers or to
exhaust any remedies available to it or them against any of the other Borrowers
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 4.06 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied.
(c) Each of the Borrowers hereby agrees that it will not enforce any of
its rights of contribution or subrogation against the other Borrowers with
respect to any liability incurred by it hereunder or under any of the other Loan
Documents, any payments made by it to the Agent or the Lenders with respect to
any of the Obligations or any Collateral 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 the Agent or the
Lenders 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.
ARTICLE V
CONDITIONS TO LOANS
SECTION 5.01 CONDITIONS PRECEDENT TO EFFECTIVENESS. This Agreement shall
become effective as of the Business Day (the "EFFECTIVE DATE") when each of the
following conditions precedent shall have been satisfied in a manner
satisfactory to the Agents:
(a) PAYMENT OF FEES, ETC. The Borrowers shall have paid on or before
the date of this Agreement all fees, costs, expenses and taxes then payable
pursuant to Sections 2.06 and 12.04.
(b) REPRESENTATIONS AND WARRANTIES; NO EVENT OF DEFAULT. The following
statements shall be true and correct: (i) the representations and warranties
contained in
-46-
Article VI and in each other Loan Document, certificate or other writing
delivered to the Agents, the Lenders or the L/C Issuer pursuant hereto or
thereto on or prior to the Effective Date are true and correct on and as of the
Effective Date as though made on and as of such date and (ii) no Default or
Event of Default shall have occurred and be continuing on the Effective Date or
would result from this Agreement or the other Loan Documents becoming effective
in accordance with its or their respective terms.
(c) LEGALITY. The making of the initial Loans or the issuance of any
Letters of Credit shall not contravene any law, rule or regulation applicable to
the Agents, the Lenders or the L/C Issuer.
(d) DELIVERY OF DOCUMENTS. The Collateral Agent shall have received on
or before the Effective Date the following, each in form and substance
satisfactory to the Collateral Agent and, unless indicated otherwise, dated the
Effective Date:
(i) a Guaranty, duly executed by Funding Corp.;
(ii) counterparts to this Agreement, duly executed by each
Borrower, Guarantor, Agent and Lender;
(iii) a Revolving Credit Note payable to the order of each Lender
with a Revolving Credit Commitment, duly executed by the Borrowers;
(iv) the Amendatory Agreement, duly executed by the Collateral
Agent, each Borrower and Guarantor and substantially in the form of Exhibit C
hereto;
(v) Amendment No. 1 to the Contribution Agreement, substantially in
the form of Exhibit I hereto, among the Borrowers;
(vi) [Reserved];
(vii) appropriate financing statements on Form UCC-1 and amendments
on Form UCC-3, duly executed by each Loan Party and duly filed in such office or
offices as may be necessary or, in the opinion of the Collateral Agent,
desirable to perfect, or to continue the perfection of, the security interests
purported to be created by the Security Agreements;
(viii) certified copies of request for copies of information on
Form UCC-11, listing all effective financing statements which name as debtor any
Loan Party and which are filed in the offices referred to in paragraph (vii)
above, together with copies of such financing statements, none of which, except
as otherwise agreed in writing by the Collateral Agent and except for such
financing statements for which executed termination statements on Form UCC-3
have been delivered to the Collateral Agent, shall cover any of the Collateral
and the results of searches for any tax Lien and judgment Lien filed against
such Person or its property, which results, except as otherwise agreed to in
writing by the Collateral Agent, shall not show any such Liens, other than
Permitted Liens;
-47-
(ix) a copy of the resolutions of each Loan Party, certified as of
the Effective Date by an Authorized Officer thereof, authorizing (A) the
borrowings hereunder and the transactions contemplated by the Loan Documents to
which such Loan Party is or will be a party, and (B) the execution, delivery and
performance by such Loan Party of each Loan Document and the execution and
delivery of the other documents to be delivered by such Person in connection
herewith and therewith;
(x) a certificate of an Authorized Officer of each Loan Party,
certifying the names and true signatures of the representatives of such Loan
Party authorized to sign each Loan Document to which such Loan Party is or will
be a party and the other documents to be executed and delivered by such Loan
Party in connection herewith and therewith, together with evidence of the
incumbency of such authorized officers;
(xi) a certificate of the appropriate official(s) of the state of
organization and each state of foreign qualification of each Loan Party
certifying as to the subsistence in good standing of, and the payment of taxes
by, such Loan Party in such states, together with confirmation by telephone or
telegram (where available) on the Effective Date from such official(s) as to
such matters;
(xii) a true and complete copy of the charter, certificate of
formation, certificate of limited partnership or other publicly filed
organizational document of each Loan Party certified as of a date not more than
30 days prior to the Effective Date by an appropriate official of the state of
organization of such Loan Party;
(xiii) a certificate of an Authorized Officer of each Loan Party,
certified as of the Effective Date, certifying as to the charter and by-laws,
limited liability company agreement, operating agreement, agreement of limited
partnership or other organizational document of each Loan Party;
(xiv) an opinion of Xxxxxxx Xxxx LLP, counsel to the Loan Parties,
substantially in the form of Exhibit F and as to such other matters as the
Collateral Agent may reasonably request;
(xv) a certificate of an Authorized Officer of each Loan Party,
certifying as to the matters set forth in subsection (b) of this Section 5.01;
(xvi) a copy of the Financial Statements, together with a
certificate of an Authorized Officer of the Parent setting forth all existing
Indebtedness, pending or threatened litigation or claims and other contingent
liabilities of the Parent and its Subsidiaries;
(xvii) evidence of the insurance coverage required by Section
7.01(h) and the terms of the Security Agreements and such other insurance
coverage with respect to the business and operations of the Loan Parties as the
Collateral Agent may reasonably request, in each case, where requested by the
Collateral Agent, with such indorsements as to the named insureds or loss payees
thereunder as the Collateral Agent may request and providing that such policy
may be terminated or canceled (by the insurer or the
-48-
insured thereunder) only upon 30 days' prior written notice to the Collateral
Agent and each such named insured or loss payee, together with evidence of the
payment of all premiums due in respect thereof for such period as the Collateral
Agent may request;
(xviii) a certificate of an Authorized Officer of the Parent,
certifying the names and true signatures of the persons that are authorized to
provide Notices of Borrowings, Letters of Credit Applications and all other
notices under this Agreement and the other Loan Documents;
(xix) (A) the Foothill Assignment and the Foothill Resignation
Agreement, each duly executed by the parties thereto and effective immediately
prior to the Effective Date, and (B) evidence that the revolving credit note
issued to Foothill and evidencing the Existing Revolving Loans has been marked
"cancelled" and returned to the Borrowers;
(xx) copies of the Specified Joint Venture Agreement, any other
material agreement entered into in connection therewith and the other Material
Contracts as in effect on the Effective Date, certified as true and correct
copies thereof by an Authorized Officer of the Parent, together with a
certificate of an Authorized Officer of the Parent stating that such agreements
remain in full force and effect and that the Parent and its Subsidiaries have
not breached or defaulted in any of their obligations under such agreements;
(xxi) a termination and release agreement with respect to the
Receivable Purchase Facility and all related agreement and other documents, duly
executed by Borrowers, Funding Corp. and Foothill, together with UCC-3
termination statements for all UCC-1 financing statements filed by (or assigned
to) Foothill and covering any portion of the Collateral, and evidence that each
of the demand notes and other promissory notes delivered in connection with the
Receivable Purchase Facility has been marked "cancelled" and returned to the
issuer thereof;
(xxii) a copy of each Existing Letter of Credit and each Fleet
Letter of Credit outstanding on the Effective Date; and
(xxiii) such other agreements, instruments, approvals, opinions and
other documents, each satisfactory to the Collateral Agent in form and
substance, as the Collateral Agent may reasonably request.
(e) MATERIAL ADVERSE CHANGE; LITIGATION. The Collateral Agent shall
have determined, in its sole judgment, that no material adverse change shall
have occurred in the business, operations, condition (financial or otherwise),
properties or prospects of the Loan Parties (taken as a whole) since April 28,
2001; and there shall exist no claim, action, suit, investigation, litigation or
proceeding, pending or threatened in any court or before any arbitrator or
Governmental Authority which relates to the Loan Documents or which, in the
opinion of the Agents, has any reasonable likelihood of having a material
adverse effect on the condition (financial or otherwise), operations,
properties, business or prospects of the Loan Parties.
(f) PROCEEDINGS; RECEIPT OF DOCUMENTS. All proceedings in connection
with the making of the initial Loans or the issuance of the initial Letter of
Credit (and the
-49-
assumption by the Administrative Agent of any existing Letter of
Credit Guaranties) and the other transactions contemplated by this Agreement and
the other Loan Documents, and all documents incidental hereto and thereto, shall
be satisfactory to the Agents and their counsel, and the Agents and their
counsel shall have received all such information and such counterpart originals
or certified or other copies of such documents as the Agents or such counsel may
reasonably request.
(g) TERM LOANS. The Borrowers shall have repaid the term loans made by
Ableco and A2 Funding, LP pursuant to the Original Financing Agreement, all
accrued and unpaid interest thereon and all other obligations with respect
thereto in cash, which repayment may be made by the Borrowers with funds on
deposit in the Cash Collateral Account prior to the Effective Date and other
cash on hand. The proceeds of the Loans may not be used to repay such term loans
or such other obligations. Upon payment in accordance with this paragraph, the
term notes issued to Ableco and A2 Funding LP pursuant to the Original Financing
Agreement shall be marked "cancelled" and returned to the Parent.
(h) FLEET LETTERS OF CREDIT AND EXISTING LETTERS OF CREDIT. Xxxxx Fargo
Bank, N.A. shall have agreed to maintain the Existing Letters of Credit (other
than the Existing Letter of Credit which names Fleet as beneficiary, to the
extent Fleet has directed in writing that such Existing Letter of Credit be
terminated) on terms satisfactory to the Agents and pursuant to a written
agreement, in form and substance satisfactory to the Agents. In the event that
the Borrowers and Fleet and/or the Borrowers and Xxxxx Fargo Bank, N.A., enter
into any cash collateral or other arrangements with respect to the Fleet Letters
of Credit or the Existing Letters of Credit (as applicable), such arrangements
shall be satisfactory to the Agents.
(i) AVAILABILITY. After giving effect to all Loans made on the
Effective Date and all Letters of Credit issued on the Effective Date, (i)
Availability plus the amount of the Borrowers' cash on hand shall not be less
than $7,500,000 and (ii) all accounts payable of the Loan Parties shall be at a
level and in a condition reasonably satisfactory to the Collateral Agent. The
Parent shall deliver to the Collateral Agent a certificate of the chief
financial officer and the chief operating officer of the Parent certifying as to
the matters set forth in clauses (i) and (ii) above and containing the
calculations thereof.
(j) EXISTING LOCKBOXES. The interest of Foothill in the Existing
Lockboxes and all related accounts at the Existing Lockbox Bank shall have been
terminated in a manner satisfactory to the Agents and the Existing Lockbox Bank,
the Agents and the Borrowers shall have entered into such lockbox agreements,
blocked account agreements or other agreements as the Agents shall deem
appropriate consistent with Section 8.01.
(k) INDENTURE. The Agents and their counsel shall be satisfied that the
execution, delivery and performance by the Loan Parties of the Loan Documents
will not breach any of the terms or conditions of the Indenture Documents.
(l) APPROVALS. All governmental and third party consents and approvals
necessary in connection with the effectiveness of the Loan Documents and the
transactions contemplated thereby shall have been obtained (without the
imposition of any conditions that are not reasonably acceptable to the Agents)
and shall remain in effect and all applicable governmental filings shall have
been made and all applicable waiting periods shall have
-50-
expired without in either case any action being taken by any competent
authority; and no law or regulation shall be applicable in the judgment of the
Agents that restrains, prevents or impose materially adverse conditions on the
performance of the Loan Documents and the transactions contemplated thereby.
SECTION 5.02 CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT. The
obligation of any Agent or any Lender to make any Loan or of the Administrative
Agent to assist the Borrowers in establishing or opening any Letter of Credit is
subject to the fulfillment, in a manner satisfactory to the Administrative
Agent, of each of the following conditions precedent:
(a) PAYMENT OF FEES, ETC. The Borrowers shall have paid all fees,
costs, expenses and taxes then payable by the Borrowers pursuant to this
Agreement and the other Loan Documents, including, without limitation, Sections
2.06 and 12.04 hereof.
(b) REPRESENTATIONS AND WARRANTIES; NO EVENT OF DEFAULT. The following
statements shall be true and correct, and the submission by the Parent to the
Administrative Agent of a Notice of Borrowing with respect to each such Loan,
and the Borrowers' acceptance of the proceeds of such Loan, or the submission by
the Parent of a Letter of Credit Application with respect to a Letter of Credit,
and the issuance of such Letter of Credit, shall each be deemed to be a
representation and warranty by the Borrowers on the date of such Loan or the
date of issuance of Letter of Credit that: (i) the representations and
warranties contained in Article VI and in each other Loan Document, certificate
or other writing delivered to the Agents pursuant hereto or thereto on or prior
to the date of such Loan or Letter of Credit are true and correct on and as of
such date as though made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall be true and correct on and
as of such earlier date), (ii) at the time of and after giving effect to the
making of such Loan and the application of proceeds thereof or at the time of
issuance of such Letter of Credit, no Default or Event of Default has occurred
and is continuing or would result from the making of the Loan to be made, or the
issuance of such Letter of Credit to be issued, on such date and (iii) the
conditions set forth in this Section 5.02 have been satisfied as of the date of
such request.
(c) LEGALITY. The making of such Loan or the issuance of such Letter of
Credit shall not contravene any law, rule or regulation applicable to the
Agents, the Lenders or the L/C Issuer.
(d) NOTICES. Except in the case of a Revolving Loan pursuant to Section
3.01(c), the Administrative Agent shall have received (i) a Notice of Borrowing
pursuant to Section 2.02 hereof or (ii) a Letter of Credit Application pursuant
to Section 3.03 hereof.
(e) DELIVERY OF DOCUMENTS. The Agents shall have received such other
agreements, instruments, approvals, opinions and other documents, each in form
and substance satisfactory to the Agents, as any Agent may reasonably request.
(f) PROCEEDINGS; RECEIPT OF DOCUMENTS. All proceedings in connection
with the making of such Loan or the issuance of such Letter of Credit and the
other transactions contemplated by this Agreement and the other Loan Documents,
and all documents incidental
-51-
hereto and thereto, shall be satisfactory to the Agents and their counsel, and
the Agents and such counsel shall have received all such information and such
counterpart originals or certified or other copies of such documents, in form
and substance satisfactory to the Agents, as the Agents or such counsel may
reasonably request.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.01 REPRESENTATIONS AND WARRANTIES. Each Loan Party hereby
represents and warrants to the Agents, the Lenders and the L/C Issuer as
follows:
(a) ORGANIZATION, GOOD STANDING, ETC. Each Loan Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state of its
organization, (ii) has all requisite power and authority to conduct its business
as now conducted and as presently contemplated and, in the case of the
Borrowers, to make the borrowings hereunder, and to execute and deliver each
Loan Document to which it is a party, and to consummate the transactions
contemplated thereby, and (iii) is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the properties owned or
leased by it or in which the transaction of its business makes such
qualification necessary.
(b) AUTHORIZATION, ETC. The execution, delivery and performance by each
Loan Party of each Loan Document to which it is or will be a party, (i) have
been duly authorized by all necessary action, (ii) do not and will not
contravene its charter or by-laws, its limited liability company or operating
agreement or its certificate of partnership or partnership agreement, as
applicable, or any applicable law or any contractual restriction binding on or
otherwise affecting it or any of its properties, (iii) do not and will not
result in or require the creation of any Lien (other than pursuant to any Loan
Document) upon or with respect to any of its properties, and (iv) do not and
will not result in any suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to its
operations or any of its properties.
(c) GOVERNMENTAL APPROVALS. No authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority is
required in connection with the due execution, delivery and performance by any
Loan Party of any Loan Document to which it is or will be a party.
(d) ENFORCEABILITY OF LOAN DOCUMENTS. This Agreement is, and each other
Loan Document to which any Loan Party is or will be a party, when delivered
hereunder, will be, a legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws.
(e) SUBSIDIARIES. Schedule 6.01(e) is a complete and correct
description of the name, jurisdiction of incorporation and ownership of the
outstanding Capital Stock of such Subsidiaries of the Parent in existence on the
date hereof. All of the issued and outstanding shares
-52-
of Capital Stock of such Subsidiaries have been validly issued and are fully
paid and nonassessable, and the holders thereof are not entitled to any
preemptive, first refusal or other similar rights. Except as indicated on such
Schedule, all such Capital Stock is owned by the Parent or one or more of its
wholly-owned Subsidiaries, free and clear of all Liens other than in favor of
the Collateral Agent. Except as set forth on Schedule 6.01(e), there are no
outstanding debt or equity securities of the Parent or any of its Subsidiaries
and no outstanding obligations of the Parent or any of its Subsidiaries
convertible into or exchangeable for, or warrants, options or other rights for
the purchase or acquisition from the Parent or any of its Subsidiaries, or other
obligations of any Subsidiary to issue, directly or indirectly, any shares of
Capital Stock of any Subsidiary of the Parent.
(f) LITIGATION. Except as set forth in Schedule 6.01(f), there is no
pending or, to the knowledge of any Loan Party, threatened action, suit or
proceeding affecting any Loan Party before any court or other Governmental
Authority or any arbitrator that (i) if adversely determined, could have a
Material Adverse Effect, (ii) relates to the Indenture Documents, the Original
Financing Agreement, the Fleet Letters of Credit, the Existing Letters of
Credit, the Existing Revolving Loans, the Receivable Purchase Facility or any
Material Contract, or (iii) relates to this Agreement, the Notes or any other
Loan Document or any transaction contemplated hereby or thereby.
(g) FINANCIAL CONDITION.
(i) The Financial Statements, copies of which have been delivered
to the Agents and the Lenders, fairly present the consolidated financial
condition of the Parent and its Subsidiaries as at the respective dates thereof
and the consolidated results of operations of the Parent and its Subsidiaries
for the fiscal periods ended on such respective dates, all in accordance with
GAAP, and since April 28, 2001, no event or development has occurred that has
had or could have a Material Adverse Effect.
(ii) The Parent has heretofore furnished to the Lenders projected
monthly balance sheets, income statements and statements of cash flows of the
Parent and its Subsidiaries for the period from April 28, 2001, through April
28, 2002, as updated from time to time pursuant to Section 7.01(a)(vii). Such
projections, as so updated, are believed by the Parent at the time furnished to
be reasonable, have been prepared on a reasonable basis and in good faith by the
Parent, and have been based on assumptions believed by the Parent to be
reasonable at the time made and upon the best information then reasonably
available to the Parent, and the Parent is not aware of any facts or information
that would lead it to believe that such projections, as so updated, are
incorrect or misleading in any material respect.
(h) COMPLIANCE WITH LAW, ETC. None of the Loan Parties is in violation
of its organizational documents, any law, rule, regulation, judgment or order of
any Governmental Authority applicable to it or any of its property or assets, or
any material term of any agreement or instrument (including, without limitation,
the Indenture Documents, the Receivable Purchase Documents or any other Material
Contract) binding on or otherwise affecting it or any of its properties, and no
Default or Event of Default has occurred and is continuing.
-53-
(i) ERISA. Except as set forth on Schedule 6.01(i), (i) each Employee
Plan is in substantial compliance with ERISA and the Internal Revenue Code, (ii)
no Termination Event has occurred nor is reasonably expected to occur with
respect to any Employee Plan, (iii) the most recent annual report (Form 5500
Series) with respect to each Employee Plan, including any required Schedule B
(Actuarial Information) thereto, copies of which have been filed with the
Internal Revenue Service and delivered to the Agents, is complete and correct
and fairly presents the funding status of such Employee Plan, and since the date
of such report there has been no material adverse change in such funding status,
(iv) no Employee Plan had an accumulated or waived funding deficiency or
permitted decreases which would create a deficiency in its funding standard
account or has applied for an extension of any amortization period within the
meaning of Section 412 of the Internal Revenue Code at any time during the
previous 60 months, and (v) no Lien imposed under the Internal Revenue Code or
ERISA exists or is likely to arise on account of any Employee Plan within the
meaning of Section 412 of the Internal Revenue Code at any time during the
previous 60 months. Except as set forth on Schedule 6.01(i), none of the Loan
Parties or any of their ERISA Affiliates have incurred any withdrawal liability
under ERISA with respect to any Multiemployer Plan, or are aware of any facts
indicating that the Loan Parties or any of their ERISA Affiliates may in the
future incur any such withdrawal liability. Except as required by Section 4980B
of the Internal Revenue Code, none of the Loan Parties or any of their ERISA
Affiliates maintains an employee welfare benefit plan (as defined in Section
3(1) of ERISA) which provides health or welfare benefits (through the purchase
of insurance or otherwise) for any retired or former employee of any Loan Party
or any of its ERISA Affiliates or coverage after a participant's termination of
employment. None of the Loan Parties or any of their ERISA Affiliates has
incurred any liability or obligation under the Worker Adjustment and Retraining
Notification Act ("WARN") or similar state law, which remains unpaid or
unsatisfied.
(j) TAXES, ETC. All Federal, state and local tax returns and other
reports required by applicable law to be filed by any Loan Party have been
filed, or extensions have been obtained, and all taxes, assessments and other
governmental charges imposed upon any Loan Party or any property of any Loan
Party and which have become due and payable on or prior to the date hereof have
been paid, except to the extent contested in good faith by proper proceedings
which stay the imposition of any penalty, fine or Lien resulting from the
non-payment thereof and with respect to which adequate reserves have been set
aside for the payment thereof.
(k) REGULATION U. None of the Loan Parties is nor will be engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulations T, U or X), and no proceeds of
any Loan will be used to purchase or carry any margin stock or to extend credit
to others for the purpose of purchasing or carrying any margin stock.
(l) NATURE OF BUSINESS. None of the Loan Parties is engaged in any
business other than as described in the quarterly financial statement filed by
the Parent with the SEC on Form 10-Q for the fiscal quarter ending January 29,
2001.
(m) ADVERSE AGREEMENTS, ETC. Neither the Parent nor any other Loan
Party is a party to any agreement or instrument, or subject to any charter,
limited liability company agreement, partnership agreement or other corporate,
partnership or limited liability company
-54-
restriction or any judgment, order, regulation, ruling or other requirement of a
court or other Governmental Authority, which has, or in the future could have, a
Material Adverse Effect.
(n) PERMITS, ETC. Each Loan Party has, and is in compliance with, all
permits, licenses, authorizations, approvals, entitlements and accreditations
required for such Person lawfully to own, lease, manage or operate, or to
acquire, each business currently owned, leased, managed or operated, or to be
acquired, by such Person. No condition exists or event has occurred which, in
itself or with the giving of notice or lapse of time or both, would result in
the suspension, revocation, impairment, forfeiture or non-renewal of any such
permit, license, authorization, approval, entitlement or accreditation, and
there is no claim that any thereof is not in full force and effect.
(o) PROPERTIES. (i) Each Loan Party has good and marketable title to,
or valid leasehold interests in, all property and assets material to its
business, free and clear of all Liens except Permitted Liens. The properties are
in good working order and condition, ordinary wear and tear excepted.
(ii) Schedule 6.01(o) sets forth a complete and accurate list as of
the Effective Date of the location, by state and street address, of all real
property owned or leased by each Loan Party and, in the case of owned real
property, a description of each mortgage Lien affecting such real property. As
of the Effective Date, each Loan Party has valid leasehold interests in the
Leases described on Schedule 6.01(o) to which it is a party. Schedule 6.01(o)
sets forth with respect to each such Lease, the commencement date, termination
date, renewal options (if any) and annual base rents. Each such Lease is valid
and enforceable in accordance with its terms in all material respects and is in
full force and effect. No consent or approval of any landlord or other third
party in connection with any such Lease is necessary for any Loan Party to enter
into and execute the Loan Documents to which it is a party, except as set forth
on Schedule 6.01(o). To the knowledge of any Loan Party, no other party to any
such Lease is in default of its obligations thereunder, and none of the Loan
Parties (or any other party to any such Lease) has not at any time delivered or
received any notice of default which remains uncured under any such Lease and,
as of the Effective Date, no event has occurred which, with the giving of notice
or the passage of time or both, would constitute a default under any such Lease.
(p) FULL DISCLOSURE. Each Loan Party has disclosed to the Agents all
agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, could result in a Material Adverse Effect. None of the other reports,
financial statements, certificates or other information furnished by or on
behalf of any Loan Party to the Agents in connection with the negotiation of
this Agreement or delivered hereunder (as modified or supplemented by other
information so furnished) contains any material misstatement of fact or omits to
state any material fact necessary to make the statements therein, in the light
of the circumstances under which it was made, not misleading; PROVIDED that,
with respect to projected financial information, each Loan Party represents only
that such information was prepared in good faith based upon assumptions believed
to be reasonable at the time. There is no contingent liability or fact that may
have a Material Adverse Effect which has not been set forth in a footnote
included in the Financial Statements or a schedule hereto.
-55-
(q) EXISTING LETTERS OF CREDIT; FLEET LETTERS OF CREDIT. (i) Schedule
6.01(q)(i) sets forth the number, beneficiary, account party, undrawn amount and
expiration date of each Existing Letter of Credit which has not terminated or
expired on or prior to the Effective Date.
(ii) Schedule 6.01(q)(ii) sets forth the number, beneficiary,
account, party, undrawn amount and expiration date of each Fleet Letter of
Credit which has not terminated or expired on or prior to the Effective Date.
(r) OPERATING LEASE OBLIGATIONS. On the Effective Date, none of the
Loan Parties has any obligations as lessee for the payment of rent for any
personal property (with annual lease payments in excess of $100,000) or real
property other than the Operating Lease Obligations set forth on Schedule
6.01(r).
(s) ENVIRONMENTAL MATTERS. Except as set forth on Schedule 6.01(s), (i)
no properties currently owned by any Loan Party or any of their Subsidiaries are
currently being used, nor, to the Loan Parties' knowledge, have ever been used,
for any activities involving, directly or indirectly, the use, handling,
generation, treatment, storage transportation or disposal of any Hazardous
Materials; (ii) the operations of each Loan Party and any of their subsidiaries
are in compliance with Environmental Laws in all material respects; (iii) there
has been no Release at, from, or, onto any of the properties owned or operated
by any Loan Party or any of its Subsidiaries or a predecessor in interest at any
disposal or treatment facility which received Hazardous Materials generated by
any Loan Party or any predecessor in interest which could have a Material
Adverse Effect; (iv) no Environmental Action has been asserted against any Loan
Party or any of its Subsidiaries or, to any Loan Party's knowledge, any
predecessor in interest nor does any Loan Party have knowledge or notice of any
pending Environmental Action against any Loan Party or any of their Subsidiaries
or any predecessor in interest which could have a Material Adverse Effect; (v)
no Environmental Actions have been asserted against any facilities that may have
received Hazardous Materials generated by any Loan Party or any predecessor in
interest which could have a Material Adverse Effect; and (vi) none of the
Collateral is subject to any existing or pending Environmental Action or
Environmental Lien.
(t) INSURANCE. Each Loan Party keeps its property adequately insured
and maintains (i) insurance to such extent and against such risks, including
fire, as is customary with companies in the same or similar businesses, (ii)
workmen's compensation insurance in the amount required by applicable law, (iii)
public liability insurance, which shall include product liability insurance, in
the amount customary with companies in the same or similar business against
claims for personal injury or death on properties owned, occupied or controlled
by it, and (iv) such other insurance as may be required by law or as may be
reasonably required by the Collateral Agent (including, without limitation,
against larceny, embezzlement or other criminal misappropriation). Schedule
6.01(t) sets forth a list of all insurance maintained by each Loan Party on the
Effective Date.
(u) USE OF PROCEEDS. The proceeds of the Loans shall be used to (i)
refinance the Existing Revolving Loans under the Original Financing Agreement,
(ii) pay fees and expenses in connection with the transactions contemplated
hereby, (iii) fund working capital and general corporate requirements of the
Borrowers and (iv) to pay fees and expenses related to this
-56-
Agreement. The Letters of Credit will be used for general working capital
purposes, including as security for (A) if so requested by the Parent and deemed
appropriate in the judgment of the Agents, the Fleet Letters of Credit and the
Existing Letters of Credit, and (B) certain environmental obligations of the
Borrowers.
(v) SOLVENCY. After giving effect to the transactions contemplated by
this Agreement and before and after giving effect to each Loan and Letter of
Credit, each Loan Party is, and the Loan Parties on a consolidated basis are,
Solvent.
(w) LOCATION OF BANK ACCOUNTS; EXISTING LOCKBOXES. (i) Schedule 6.01(w)
sets forth a complete and accurate list as of the Effective Date of all deposit,
checking and other bank accounts, all securities and other accounts maintained
with any broker dealer and all other similar accounts maintained by each Loan
Party, together with a description thereof (I.E., the bank or broker dealer at
which such deposit or other account is maintained and the account number and the
purpose thereof).
(ii) Schedule 8.01 sets forth a complete and accurate description
as of the Effective Date of the Existing Lockboxes (I.E., the name of the
Existing Lockbox Bank, the address and p.o. box number of the Existing Lockboxes
and the account numbers of the related Collection Accounts).
(x) INTELLECTUAL PROPERTY. Except as set forth on Schedule 6.01(x),
each Loan Party owns or licenses or otherwise has the right to use all licenses,
permits, patents, patent applications, trademarks, trademark applications,
service marks, tradenames, copyrights, copyright applications, franchises,
authorizations and other intellectual property rights that are necessary for the
operations of its businesses, without infringement upon or conflict with the
rights of any other Person with respect thereto, except for such infringements
and conflicts which, individually or in the aggregate, could not have a Material
Adverse Effect. Set forth on Schedule 6.01(x) is a complete and accurate list as
of the Effective Date of all such material licenses, permits, patents, patent
applications, trademarks, trademark applications, service marks, tradenames,
copyrights, copyright applications, franchises, authorizations and other
intellectual property rights of each Loan Party. No slogan or other advertising
device, product, process, method, substance, part or other material now
employed, or now contemplated to be employed, by any Loan Party infringes upon
or conflicts with any rights owned by any other Person, and no claim or
litigation regarding any of the foregoing is pending or threatened, except for
such infringements and conflicts which could not have, individually or in the
aggregate, a Material Adverse Effect. To the best knowledge of each Loan Party,
no patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code is pending or proposed, which, individually or in
the aggregate, could have a Material Adverse Effect.
(y) MATERIAL CONTRACTS. Set forth on Schedule 6.01(y) is a complete and
accurate list as of the Effective Date of all Material Contracts of each Loan
Party, showing the parties and subject matter thereof and amendments and
modifications thereto. Each such Material Contract (i) is in full force and
effect and is binding upon and enforceable against each Loan Party that is a
party thereto and, to the best knowledge of such Loan Party, all other parties
thereto in accordance with its terms, (ii) has not been otherwise amended or
modified, and (iii) is not in
-57-
default due to the action of any Loan Party or, to the best knowledge of any
Loan Party, any other party thereto.
(z) HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the Loan
Parties is (i) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
"investment company" or an "affiliated person" or "promoter" of, or "principal
underwriter" of or for, an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
(aa) EMPLOYEE AND LABOR MATTERS. (i) There is (A) no unfair labor
practice complaint pending or, to the best knowledge of any Loan Party,
threatened against any Loan Party before any Governmental Authority and no
grievance or arbitration proceeding pending or threatened against any Loan Party
which arises out of or under any collective bargaining agreement, (B) no strike,
labor dispute, slowdown, stoppage or similar action or grievance pending or
threatened against any Loan Party and (C) to the best knowledge of any Loan
Party, no union representation question existing with respect to the employees
of any Loan Party and no union organizing activity taking place with respect to
any of the employees of any of them.
(bb) CUSTOMERS AND SUPPLIERS. There exists no actual or threatened
termination, cancellation or limitation of, or modification to or change in, the
business relationship between (A) any Loan Party, on the one hand, and any
customer or any group thereof, on the other hand, whose agreements with any Loan
Party are individually or in the aggregate material to the business or
operations of such Loan Party, or (B) any Loan Party, on the one hand, and any
material supplier thereof, on the other hand; and there exists no present state
of facts or circumstances that could give rise to or result in any such
termination, cancellation, limitation, modification or change.
(cc) NO BANKRUPTCY FILING. None of the Loan Parties is contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of such Loan
Party's assets or property, and none of the Loan Parties has any knowledge of
any Person contemplating the filing of any such petition against it.
(dd) [Intentionally Omitted]
(ee) LOCATION OF INVENTORY; PLACE OF BUSINESS; CHIEF EXECUTIVE OFFICE.
There is no location at which the Borrowers have any Inventory (except for
Inventory in transit) other than (i) those locations listed on Schedule 6.01(ee)
and (ii) any other locations approved in writing by the Collateral Agent
pursuant to the definition of "Eligible Inventory". Schedule 6.01(ee) hereto
contains a true, correct and complete list, as of the Effective Date, of the
legal names and addresses of each warehouse at which Inventory of each Loan
Party is stored. None of the receipts received by any Loan Party from any
warehouse states that the goods covered thereby are to be delivered to bearer or
to the order of a named Person or to a named Person and such named Person's
assigns. Schedule 6.01(ee) sets forth a complete and accurate list as of the
date hereof of (A) each place of business of each Loan Party and (B) the chief
executive office of each Loan Party.
-58-
(ff) TRADENAMES. Schedule 6.01(ff) hereto sets forth a complete and
accurate list as of the Effective Date of all tradenames used by each Loan
Party.
(gg) SECURITY INTERESTS. Each Security Agreement and each Pledge
Agreement creates in favor of the Collateral Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
secured thereby. Upon the filing of the UCC-1 financing statements and UCC-3
amendments to financing statement described in Section 5.01(d)(xii) and the
recording of the Assignment for Security (Trademarks) and Assignment for
Security (Patents), referred to in each Security Agreement, in the United States
Patent and Trademark Office, such security interests in and Liens on the
Collateral granted thereby shall be perfected, first priority security
interests, and no further recordings or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens, other than (i) the filing of continuation statements in
accordance with applicable law, (ii) the recording of the Assignment for
Security (Trademarks) and Assignment for Security (Patents) pursuant to each
Security Agreement in the United States Patent and Trademark Office, with
respect to after-acquired U.S. patent and trademark applications and
registrations, (iii) the recordation of appropriate evidence of the security
interest in the appropriate foreign registry with respect to all foreign
intellectual property, and (iv) the registration of all U.S. copyrights and the
recordation of the Assignment for Security (Copyrights) in the United States
Copyright Office.
(hh) SCHEDULES. All of the information which is required to be
scheduled to this Agreement is set forth on the Schedules attached hereto, is
correct and accurate and does not omit to state any information material
thereto.
(ii) REPRESENTATIONS AND WARRANTIES IN DOCUMENTS; NO DEFAULT. All
representations and warranties set forth in the Loan Documents are true and
correct in all respects at the time as of which such representations were made
and on the Effective Date. No Event of Default has occurred and is continuing
and no condition exists which constitutes a Default or an Event of Default.
ARTICLE VII
COVENANTS OF THE BORROWER
SECTION 7.01 AFFIRMATIVE COVENANTS. So long as any principal of or interest
on any Loan, Reimbursement Obligation, Letter of Credit Obligation or any other
Obligations (whether or not due) shall remain unpaid or any Lender shall have
any Commitment hereunder, the Loan Parties will, unless the Required Lenders
shall otherwise consent in writing:
(a) REPORTING REQUIREMENTS. Furnish to each Agent and each Lender:
(i) as soon as available and in any event within 45 days after the
end of each fiscal quarter of the Parent, consolidated and consolidating balance
sheets, consolidated and consolidating statements of operations and retained
earnings and consolidated and consolidating statements of cash flows of the
Parent and its Subsidiaries as at the end of such quarter, and for the period
commencing at the end of the immediately preceding Fiscal Year and ending with
the end of such quarter, setting forth in each case in comparative form the
figures for
-59-
the corresponding date or period of the immediately preceding Fiscal Year, all
in reasonable detail and certified by an Authorized Officer as fairly
presenting, in all material respects, the financial position of the Parent and
its Subsidiaries as of the end of such quarter and the results of operations and
cash flows of the Parent and its Subsidiaries for such quarter, in accordance
with GAAP applied in a manner consistent with that of the most recent audited
financial statements of the Parent and its Subsidiaries furnished to the
Lenders, subject to normal year-end adjustments;
(ii) as soon as available, and in any event within 90 days after
the end of each Fiscal Year consolidated and consolidating balance sheets,
consolidated and consolidating statements of operations and retained earnings
and consolidated and consolidating statements of cash flows of the Parent and
its Subsidiaries as at the end of such Fiscal Year, setting forth in comparative
form the corresponding figures for the immediately preceding Fiscal Year, all in
reasonable detail and prepared in accordance with GAAP, and accompanied by a
report and an unqualified opinion, prepared in accordance with generally
accepted auditing standards, of Xxxxx Xxxxxxx LLP or another independent
certified public accountants of recognized standing selected by the Parent and
reasonably satisfactory to the Agents (which opinion shall be without (A) a
"going concern" or like qualification or exception, (B) any qualification or
exception as to the scope of such audit (other than with regard to certain
foreign Subsidiaries and Subsidiaries acquired within the audit period where
such accountant is relying on the opinions or agreed upon procedures of other
accountants or certified financial statements prepared by other accountants or
by such acquired Subsidiaries) or (C) any 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 7.03),
together with a written statement of such accountants (1) to the effect that, in
making the examination necessary for their certification of such financial
statements, they have not obtained any knowledge of the existence of an Event of
Default or a Default and (2) if such accountants shall have obtained any
knowledge of the existence of an Event of Default or such Default, describing
the nature thereof;
(iii) as soon as available, and in any event within 30 days of the
end of each fiscal month of the Parent and its Subsidiaries internally prepared
consolidated and consolidating balance sheets, consolidated and consolidating
statements of operations and consolidated and consolidating statements of cash
flows for such fiscal month of the Parent and its Subsidiaries for such fiscal
month and for the period from the beginning of such Fiscal Year to the end of
such fiscal month, all in reasonable detail and certified by an Authorized
Officer as fairly presenting, in all material respects, the financial position
of the Parent and its Subsidiaries as of the end of such fiscal month and the
results of operations and cash flows of the Parent and its Subsidiaries for such
fiscal month, in accordance with GAAP applied in a manner consistent with that
of the most recent audited financial statements furnished to the Lenders,
subject to (A) normal year-end adjustments and (B) in the case of the first and
second fiscal month of each Fiscal Year, such other customary adjustments as the
Parent reasonably deems necessary as a result of such financial statements
having been prepared prior to the completion of audited financial statements for
the immediately preceding Fiscal Year;
-60-
(iv) simultaneously with the delivery of the financial statements
of the Parent required by clauses (i), (ii) and (iii) of this Section 7.01(a), a
certificate of an Authorized Officer (A) stating that such Authorized Officer
has reviewed the provisions of this Agreement and the other Loan Documents and
has made or caused to be made under his or her supervision a review of the
condition and operations of the Parent and its Subsidiaries during the period
covered by such financial statements with a view to determining whether the
Parent and its Subsidiaries were in compliance with all of the provisions of
such Loan Documents at the times such compliance is required by the Loan
Documents, and that such review has not disclosed, and such Authorized Officer
has no knowledge of, the existence during such period of an Event of Default or
Default or, if an Event of Default or Default existed, describing the nature and
period of existence thereof and the action which the Parent and its Subsidiaries
propose to take or have taken with respect thereto and (B) attaching a schedule
showing the calculations specified in Section 7.03;
(v) (A) as soon as available and in any event within 10 Business
Days of the end of each fiscal month of the Borrowers, reports in detail
satisfactory to the Agents and certified by an Authorized Officer as being
accurate and complete (1) listing all accounts payable of the Loan Parties as of
each such day which shall include the amount and age of each account payable,
the name and mailing address of each account creditor and such other information
as any Agent may request, and (2) listing all Inventory of the Loan Parties as
of each such day, and containing a breakdown of such Inventory by type and
amount, the cost and the current market value thereof (by location), the date of
acquisition, the warehouse and production facility location and such other
information as any Agent may request, all in detail and in form satisfactory to
the Agents; and (B) on a weekly basis, a report, in detail satisfactory to the
Agents, updating from the most recent Borrowing Base Certificate the value of
the Accounts Receivable and Eligible Joint Venture Receivables and total past
due Accounts Receivable;
(vi) as soon as available and in any event within 5 Business Days
after the end of each month, a Borrowing Base Certificate current as of the
close of business on the last Business Day of such month, supported by such
schedules and other information as the Administrative Agent may reasonably
request from time to time, PROVIDED, that (A) the Borrowing Base set forth in
the Borrowing Base Certificate shall be effective from and including the date
such Borrowing Base Certificate is duly received by the Administrative Agent but
not including the date on which a subsequent Borrowing Base Certificate is
received by the Administrative Agent, unless any Agent disputes the eligibility
of any property for inclusion in the calculation of the Borrowing Base or the
valuation thereof by notice of such dispute to the Parent and (B) in the event
of any dispute about the eligibility of any property for inclusion in the
calculation of the Borrowing Base or the valuation thereof, such Agent's good
faith judgment shall control;
(vii) (A) within six months of the Effective Date, projected annual
balance sheets, income statements and statements of cash flows of the Parent and
its Subsidiaries for the Fiscal Year ending in April 2003 and (B) on or before
April 15 of each year, (A) financial projections supplementing and superseding
the financial projections for such period delivered pursuant to the preceding
clause (A), prepared on a monthly basis and otherwise in
-61-
form and substance satisfactory to the Agents, for the immediately succeeding
Fiscal Year for the Parent and its Subsidiaries, all such financial projections
to be reasonable, to be prepared on a reasonable basis and in good faith, and to
be based on assumptions believed by the Parent to be reasonable at the time made
and from the best information then available to the Parent, and (B) a list of
the fiscal months for the Parent and its Subsidiaries for such immediately
succeeding Fiscal Year;
(viii) promptly after submission to any Government Authority, all
documents and information furnished to such Government Authority in connection
with any investigation of any Loan Party other than (A) routine inquiries by
such Governmental Authority and (B) inquiries regarding matters which are
immaterial;
(ix) as soon as possible, and in any event within three days after
the occurrence of an Event of Default or Default or the occurrence of any event
or development that could have a Material Adverse Effect, the written statement
of an Authorized Officer setting forth the details of such Event of Default,
Default, other event or Material Adverse Effect and the action which the Parent
and its Subsidiaries propose to take with respect thereto;
(x) (A) as soon as possible and in any event (1) within 10 days
after any Loan Party or any ERISA Affiliate thereof knows or has reason to know
that any Termination Event described in clause (i) of the definition of
Termination Event with respect to any Employee Plan has occurred, (2) within 10
days after a Borrower or any ERISA Affiliate thereof knows or has reason to know
that any other Termination Event with respect to any Employee Plan has occurred,
or (3) within 10 days after any Loan Party or any ERISA Affiliate thereof knows
or has reason to know that an accumulated funding deficiency has been incurred
or an application has been made to the Secretary of the Treasury for a waiver or
modification of the minimum funding standard (including installment payments) or
an extension of any amortization period under Section 412 of the Internal
Revenue Code with respect to an Employee Plan, a statement of an Authorized
Officer setting forth the details of such occurrence and the action, if any,
which such Loan Party or such ERISA Affiliate proposes to take with respect
thereto, (B) promptly and in any event within three days after receipt thereof
by any Loan Party or any ERISA Affiliate thereof from the PBGC, copies of each
notice received by any Loan Party or any ERISA Affiliate thereof of the PBGC's
intention to terminate any Plan or to have a trustee appointed to administer any
Plan, (C) promptly and in any event within 10 days after the filing thereof with
the Internal Revenue Service if requested by the Agent, copies of each Schedule
B (Actuarial Information) to the annual report (Form 5500 Series) with respect
to each Employee Plan and Multiemployer Plan, (D) promptly and in any event
within 10 days after any Loan Party or any ERISA Affiliate thereof knows or has
reason to know that a required installment within the meaning of Section 412 of
the Internal Revenue Code has not been made when due with respect to an Employee
Plan, (E) promptly and in any event within three days after receipt thereof by
any Loan Party or any ERISA Affiliate thereof from a sponsor of a Multiemployer
Plan or from the PBGC, a copy of each notice received by any Loan Party or any
ERISA Affiliate thereof concerning the imposition or amount of withdrawal
liability under Section 4202 of ERISA or indicating that such Multiemployer Plan
may enter reorganization status under Section 4241 of ERISA, and (F) promptly
and in any event within 10 days after any Loan Party or any ERISA Affiliate
thereof send notice of a plant closing or mass layoff (as
-62-
defined in WARN) to employees, copies of each such notice sent by such Loan
Party or such ERISA Affiliate thereof;
(xi) promptly after the commencement thereof but in any event not
later than 7 Business Days after service of process with respect thereto on, or
the obtaining of knowledge thereof by, any Loan Party, notice of each action,
suit or proceeding before any court or other Governmental Authority or other
regulatory body or any arbitrator which, if adversely determined, could have a
Material Adverse Effect;
(xii) as soon as possible and in any event within 10 days after
execution, receipt or delivery thereof, copies of any material notices that any
Loan Party delivers or receives in connection with the Indenture Documents or
any other Material Contract;
(xiii) promptly after the sending or filing thereof, copies of all
statements, reports and other information any Loan Party sends to any holders of
its Indebtedness or its securities or files with the SEC or any national
(domestic or foreign) securities exchange;
(xiv) promptly upon receipt thereof, copies of all financial
reports (including, without limitation, management letters), if any, submitted
to any Loan Party by its auditors in connection with any annual or interim audit
of the books thereof; and
(xv) promptly upon request, such other information concerning the
condition or operations, financial or otherwise, of any Loan Party as any Agent
may from time to time may reasonably request.
(b) ADDITIONAL GUARANTIES AND COLLATERAL SECURITY.
(i) Cause each domestic Subsidiary of any Loan Party which either
(x) is not in existence on the Effective Date or (y) is in existence on the
Effective Date, is designated at such time as an Excluded Subsidiary and ceases
at any time thereafter to be an Excluded Subsidiary, to execute and deliver to
the Collateral Agent promptly and in any event within three days after the
formation, acquisition or change in status thereof and in form and substance
satisfactory to the Collateral Agent (A) a Guaranty guaranteeing the
Obligations, (B) a Security Agreement, (C) if such Subsidiary owns or leases any
real property such that a Mortgage would be required to be delivered for such
property under Section 7.01(o), (x) promptly deliver a notice to the Collateral
Agent setting forth with specificity a description of such real property, the
location of such real property, any structures or improvements thereon and
either an appraisal or the Parent's good-faith estimate of the current value of
such real property, and (y) if requested by the Collateral Agent, promptly
execute and deliver one or more Mortgages creating on such real property a
perfected, first priority Lien on such real property, and, if the same would be
required under Section 7.01(o), a Title Insurance Policy covering such real
property, a current ALTA survey thereof and a surveyor's certificate, each in
form and substance satisfactory to the Collateral Agent, together with such
other agreements, instruments and documents as the Collateral Agent may require
whether comparable to the documents required under Section 7.01(o) or otherwise,
and (D) such other agreements, instruments, approvals, legal opinions or other
documents reasonably requested by the Collateral Agent in order to create,
perfect, establish the first priority of or otherwise protect any Lien purported
to
-63-
be covered by any such Security Agreement or Mortgage or otherwise to effect the
intent that such Subsidiary shall become bound by all of the terms, covenants
and agreements contained in the Loan Documents and that all property and assets
of such Subsidiary shall become Collateral for the Obligations.
(ii) If the value of the Inventory owned by the Borrowers in the
State of Texas as of January 1, 2001 exceeds $500,000 in the aggregate, deliver
to the Lenders the legal opinion of Texas local counsel to the Loan Parties,
substantially in the form of Exhibit J-2 and as to such other matters as the
Collateral Agent may reasonably request.
(iii) If Funding Corp. has not been dissolved within 30 days of the
Effective Date, deliver to the Collateral Agent a Security Agreement and such
UCC-1 Financing Statements as the Collateral Agent may require, in each case in
form and substance satisfactory to the Collateral Agent and duly executed by
Funding Corp.
(c) COMPLIANCE WITH LAWS, ETC. Comply, and cause each of their
Subsidiaries to comply, in all material respects with all applicable laws,
rules, regulations and orders (including, without limitation, all Environmental
Laws), such compliance to include, without limitation, (i) paying before the
same become delinquent all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits or upon any of its properties, and
(ii) paying all lawful claims which if unpaid might become a Lien or charge upon
any of its properties; except in each case to the extent contested in good faith
by proper proceedings which stay the imposition of any penalty, fine or Lien
resulting from the non-payment thereof and with respect to which adequate
reserves have been set aside for the payment thereof.
(d) PRESERVATION OF EXISTENCE, ETC. Except as otherwise expressly
permitted by Section 7.02(c) (i) maintain and preserve, and cause each of their
Subsidiaries to maintain and preserve, their existence, rights and privileges,
and (ii) become or remain duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by them or
in which the transaction of their business makes such qualification necessary,
except, in the case of this clause (ii), where the failure to become or remain
so qualified could not reasonably be expected to have a Material Adverse Effect.
(e) KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep, and cause each of
their Subsidiaries to keep, adequate records and books of account, with complete
entries made in accordance with GAAP.
(f) INSPECTION RIGHTS. Permit, and cause each of their Subsidiaries to
permit, the Agents or any agents or representatives thereof at any time and from
time to time during normal business hours and so as not to unduly disrupt the
normal operations of the Borrowers, at the expense of the Borrowers, to examine
and make copies of and abstracts from their records and books of account, to
visit and inspect their properties, to verify materials, leases, notes, accounts
receivable, deposit accounts and other assets of the Loan Parties and their
Subsidiaries, to conduct audits, physical counts, valuations, appraisals,
environmental assessments or examinations and to discuss their affairs, finances
and accounts with any of the directors, officers, managerial employees,
independent accountants or other representatives thereof. The Borrowers agree to
pay the reasonable cost of such audits, counts, valuations, appraisals,
-64-
assessments or examinations. So long as no Default or Event of Default shall
have occurred and be continuing, the Agents shall provide the Parent with at
least one Business Day notice prior to exercising the rights set forth in this
subsection (f). With respect to business valuations, the Loan Parties shall
assist the Collateral Agent in obtaining, at the sole cost and expense of the
Borrowers, a business valuation of the Parent and its Subsidiaries performed by
a third party reasonably acceptable to the Collateral Agent at such times as the
Collateral Agent shall determine, PROVIDED that so long as no Default or Event
of Default shall have occurred and be continuing, such business valuations shall
be obtained no more frequently than one time during any twelve month period.
(g) MAINTENANCE OF PROPERTIES, ETC. Maintain and preserve, and cause
each of their Subsidiaries to maintain and preserve, all of their properties
which are necessary or useful in the proper conduct of their business in good
working order and condition, ordinary wear and tear excepted, and comply, and
cause each of their Subsidiaries to comply, at all times with the provisions of
all leases to which each of them is a party as lessee or under which each of
them occupies property, so as to prevent any loss or forfeiture thereof or
thereunder which reasonably could be expected to have a Material Adverse Effect.
(h) MAINTENANCE OF INSURANCE. Maintain, and cause each of their
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to
their properties (including all real properties leased or owned by them) and
business, in such amounts and covering such risks as is required by any
Governmental Authority having jurisdiction with respect thereto or as is carried
generally in accordance with sound business practice by companies in similar
businesses similarly situated and in any event in amount, adequacy and scope
reasonably satisfactory to the Collateral Agent. All policies covering the
Collateral are to be made payable to the Collateral Agent for the benefit of the
Lenders, as its interests may appear, in case of loss, under a standard
non-contributory "lender" or "secured party" clause and are to contain such
other provisions as the Collateral Agent may require to fully protect the
Lenders' interest in the Collateral and to any payments to be made under such
policies. All certificates of insurance are to be delivered to the Collateral
Agent and the policies are to be premium prepaid, with the loss payable and
additional insured endorsement in favor of Collateral Agent, and shall provide
for not less than 30 days' prior written notice to the Collateral Agent of the
exercise of any right of cancellation. If the Loan Parties or any of their
Subsidiaries fail to maintain such insurance, the Collateral Agent may arrange
for such insurance, but at the Borrowers' expense and without any responsibility
on the Collateral Agent's part for obtaining the insurance, the solvency of the
insurance companies, the adequacy of the coverage, or the collection of claims.
Upon the occurrence of an Event of Default, the Collateral Agent shall have the
sole right, in the name of the Lenders, the Loan Parties and their Subsidiaries,
to file claims under any insurance policies, to receive, receipt and give
acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.
(i) OBTAINING OF PERMITS, ETC. (i) Obtain, maintain and preserve, and
cause each of their Subsidiaries to obtain, maintain and preserve, all permits,
licenses, authorizations, approvals, entitlements and accreditations which are
necessary in the proper
-65-
conduct of its business and (ii) become or remain, and cause each of their
Subsidiaries to become or remain, duly qualified and in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary,
except, in the case of this clause (ii), where the failure to become or remain
so qualified could not reasonably be expected to have a Material Adverse Effect.
(j) ENVIRONMENTAL. (i) Keep any property either owned or operated by
them or any of their Subsidiaries free of any Environmental Liens; (ii) comply,
and cause their Subsidiaries to comply, in all material respects with
Environmental Laws and provide to the Collateral Agent documentation of such
compliance which the Collateral Agent reasonably requests; (iii) promptly notify
the Agents of any Release of a Hazardous Material in excess of any reportable
quantity from or onto property owned or operated by the Loan Parties or any of
their Subsidiaries and take any Remedial Actions required to xxxxx said Release;
(iv) promptly provide the Agents with written notice within 10 days of the
receipt of any of the following: (A) notice that an Environmental Lien has been
filed against any property of any Loan Party or any of its Subsidiaries securing
a liability in excess of $500,000; (B) commencement of any Environmental Action
or notice that an Environmental Action will be filed against any Loan Party or
any of its Subsidiaries; and (C) notice of any violation, citation, request for
information or other Administrative order which could reasonably be expected to
have a Material Adverse Effect and (v) defend, indemnify and hold harmless the
Agents and the Lenders and their transferees, and their respective employees,
agents, officers and directors ("INDEMNIFIED PARTIES"), from and against any
claims, demands, penalties, fines, liabilities, settlements, damages, costs or
expenses (including, without limitation, attorney and consultant fees,
investigation and laboratory fees, court costs and litigation expenses)
("COSTS") arising out of (A) the presence, disposal, Release or threatened
Release of any Hazardous Materials on any property at any time owned or occupied
by any Loan Party, or any of its Subsidiaries or its respective predecessors in
interest or title, (B) any personal injury (including wrongful death) or
property damage (real or personal) arising out of or related to such Hazardous
Materials, (C) any investigation, Environmental Action brought or threatened,
settlement reached or government order relating to such Hazardous Materials
and/or (D) any violation of any Environmental Law, but excluding any Costs
finally determined by a court of competent jurisdiction to have been caused
solely by the gross negligence or willful misconduct of any of the Indemnified
Parties.
(k) FURTHER ASSURANCES. Take such action and execute, acknowledge and
deliver, and cause each of their Subsidiaries to take such action and execute,
acknowledge and deliver, at their sole cost and expense, such agreements,
instruments or other documents as each Agent may require from time to time in
order (i) to carry out more effectively the purposes of this Agreement and the
other Loan Documents, (ii) to subject to valid and perfected first priority
Liens any of the Collateral or any other property of the Loan Parties and their
Subsidiaries, (iii) to establish and maintain the validity and effectiveness of
any of the Loan Documents and the validity, perfection and priority of the Liens
intended to be created thereby, and (iv) to better assure, convey, grant,
assign, transfer and confirm unto each Agent the rights now or hereafter
intended to be granted to the Agents, the Lenders and the L/C Issuer under this
Agreement or any other Loan Document.
-66-
(l) CHANGE IN COLLATERAL; COLLATERAL RECORDS. (i) Give the Collateral
Agent not less than 30 days' prior written notice of any change in the location
of any Collateral, other than to locations set forth on Schedule 7.01(l) and
with respect to which the Collateral Agent has filed financing statements and
otherwise fully perfected its Liens thereon, (ii) advise the Collateral Agent
promptly, in sufficient detail, of any material adverse change relating to the
type, quantity or quality of the Collateral or the Lien granted thereon and
(iii) execute and deliver, and cause each of their Subsidiaries to execute and
deliver, to the Collateral Agent for the benefit of the Lenders from time to
time, solely for the Collateral Agent's convenience in maintaining a record of
Collateral, such written statements and schedules as the Collateral Agent may
reasonably require, designating, identifying or describing the Collateral.
(m) LANDLORD WAIVERS; MORTGAGEE WAIVERS; COLLATERAL ACCESS AGREEMENTS.
(i) Use best efforts to deliver to the Collateral Agent (A) a landlord waiver
for each real property location leased by any Loan Party on or after the
Original Effective Date and described in Schedule 7.01(m), executed by the owner
of such real property, (B) a mortgagee waiver for each real property location
owned by any Loan Party on or after the Original Effective Date and described in
Schedule 7.01(m) which is subject to a mortgage, executed by the mortgagee under
such mortgage, and (C) a collateral access agreement, executed by each Person
(other than a Loan Party) that has possession of any Collateral on or after the
Original Effective Date at a location described in Schedule 7.01(m), each such
document to be in form and substance reasonably satisfactory to the Collateral
Agent.
(ii) Obtain at the time any Loan Party enters into a lease or
mortgage for real property not occupied on or after the Original Effective Date
or delivers possession of Collateral to Persons that did not have possession of
Collateral on or after the Original Effective Date a landlord's waiver from the
landlord of such real property (which waiver may be contained in such lease), a
mortgagee waiver from the mortgagee for such real property or a collateral
access agreement from the Person that has possession of such Collateral, each in
form and substance reasonably satisfactory to the Collateral Agent.
(n) SUBORDINATION. Cause all Indebtedness and other obligations now or
hereafter owed by any Loan Party to any of its Affiliates, other than the
Indebtedness evidenced by the Intercompany Notes and pledged to the Indenture
Trustee pursuant to the Indenture Pledge Agreement, to be subordinated in right
of payment and security to the Indebtedness and other Obligations owing to the
Agents and the Lenders in accordance with a subordination agreement in form and
substance satisfactory to the Agents.
(o) AFTER ACQUIRED REAL PROPERTY. Upon the acquisition by any Loan
Party or any of its Subsidiaries after the date hereof of any interest (whether
fee or leasehold) in any real property (wherever located) (each such interest
being an "AFTER ACQUIRED PROPERTY") (x) with a Current Value (as defined below)
in excess of $1.00 in the case of a fee interest, or (y) requiring the payment
of annual rent exceeding in the aggregate $500,000 in the case of leasehold
interest, promptly so notify the Collateral Agent, setting forth with
specificity a description of the interest acquired, the location of the real
property, any structures or improvements thereon and either an appraisal or such
Loan Party's good-faith estimate of the current value of such real property (for
purposes of this Section, the "CURRENT VALUE"). The Collateral Agent shall
notify such Loan Party whether it intends to require a Mortgage and the
-67-
other documents referred to below or in the case of leasehold, a leasehold
Mortgage or landlord's waiver (pursuant to Section 7.01(m) hereof). Upon receipt
of such notice requesting a Mortgage, the Person which has acquired such After
Acquired Property shall promptly furnish to the Collateral Agent the following,
each in form and substance satisfactory to the Collateral Agent: (i) a Mortgage
with respect to such real property and related assets located at the After
Acquired Property, each duly executed by such Person and in recordable form,
(ii) evidence of the recording of the Mortgage referred to in clause (i) above
in such office or offices as may be necessary or, in the opinion of the
Collateral Agent, desirable to create and perfect a valid and enforceable first
priority lien on the property purported to be covered thereby or to otherwise
protect the rights of the Agents and the Lenders thereunder, (iii) if the
Current Value of such real property exceeds $1 million, (A) a Title Insurance
Policy, (B) a survey of such real property, certified to the Collateral Agent
and to the issuer of the Title Insurance Policy by a licensed professional
survey or reasonably satisfactory to the Collateral Agent, and (C) Phase I
environmental assessment reports with respect to such real property, certified
to the Collateral Agent by a company reasonably satisfactory to the Collateral
Agent, (iv) in the case of a leasehold interest, a certified copy of the lease
between the landlord and such Person with respect to such real property in which
such Person has a leasehold interest, and the certificate of occupancy with
respect thereto, (v) in the case of a leasehold interest, an attornment and
nondisturbance agreement between the landlord (and any fee mortgagee) with
respect to such real property and the Collateral Agent, and (vi) such other
documents or instruments (including guarantees and opinions of counsel) as the
Collateral Agent may reasonably require. The Loan Parties shall pay all fees and
expenses, including reasonable attorneys' fees and expenses, and all title
insurance charges and premiums, in connection with their obligations under this
Section 7.01(o).
(p) FISCAL YEAR. Cause the Fiscal Year of the Parent and its
Subsidiaries to end on the last Saturday in April, or May 1, if such date is a
Saturday, of each calendar year unless the Agents consent to a change in such
Fiscal Year (and appropriate related changes to this Agreement).
(q) BORROWING BASE; OTHER REQUIREMENTS. Maintain all Revolving Loans
and Letter of Credit Obligations in compliance with the then current Borrowing
Base and Section 2.01 hereof.
(r) ACCOUNTS RECEIVABLE. Cause all Accounts Receivable of the Borrowers
and all Eligible Joint Venture Receivables to be paid directly to the Lockbox
Banks and to be credited to the Collection Accounts on each Business Day.
(s) CASH SWEEP. During the continuance of a Cash Sweep Event, cause all
funds on deposit in the Lockboxes or the Collection Accounts to be sent directly
to the Administrative Agent's Account.
SECTION 7.02 NEGATIVE COVENANTS. So long as any principal of or interest on
any Loan, Reimbursement Obligation, Letter of Credit Obligation or any other
Obligation (whether or not due) shall remain unpaid or any Lender shall have any
Commitment hereunder, the Loan Parties shall not, unless the Required Lenders
shall otherwise consent in writing:
-68-
(a) LIENS, ETC. Create, incur, assume or suffer to exist, or permit any
of their Subsidiaries to create, incur, assume or suffer to exist any Lien upon
or with respect to any of their properties, whether now owned or hereafter
acquired, to file or suffer to exist under the Uniform Commercial Code or any
similar law or statute of any jurisdiction, a financing statement (or the
equivalent thereof) that names any Loan Party or any of its Subsidiaries as
debtor, to sign or suffer to exist any security agreement authorizing any
secured party thereunder to file such financing statement (or the equivalent
thereof), to sell any of its property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable) with recourse to any Loan Party or any
of its Subsidiaries or assign or otherwise transfer, or permit any of its
Subsidiaries to assign or otherwise transfer, any account or other right to
receive income, other than Permitted Liens.
(b) INDEBTEDNESS. Create, incur, assume, guarantee or suffer to exist,
or otherwise become or remain liable with respect to, or permit any of their
Subsidiaries to create, incur, assume, guarantee or suffer to exist or otherwise
become or remain liable with respect to, any Indebtedness, other than Permitted
Indebtedness.
(c) FUNDAMENTAL CHANGES. Wind-up, liquidate or dissolve (or permit or
suffer any Subsidiary thereof) or merge, consolidate or amalgamate with any
Person, convey, sell, lease or sublease, transfer or otherwise dispose of,
whether in one transaction or a series of related transactions, all or any part
of their business, property or assets, whether now owned or hereafter acquired,
or (agree to do any of the foregoing) or purchase or otherwise acquire, whether
in one transaction or a series of related transactions, all or substantially all
of the assets of any Person (or any division thereof) (or agree to do any of the
foregoing), or permit any of their Subsidiaries to do any of the foregoing;
PROVIDED, HOWEVER, that
(i) (x) any Subsidiary of the Parent may be merged into the Parent
or another Loan Party that is wholly owned by the Parent or may consolidate with
the Parent or another Loan Party that is wholly owned by the Parent and (y) any
Borrower may be merged into another Borrower or may consolidate with another
Borrower, so long as (A) the Parent gives the Agent at least 60 days' prior
written notice of such merger or consolidation, (B) no Event of Default shall
have occurred and be continuing either before or after giving effect to such
transaction, (C) the Lenders' rights in any Collateral, including, without
limitation, the existence, perfection and priority of any Lien thereon, are not
adversely affected by such merger or consolidation, and (D) the surviving entity
is a party to this Agreement or a Guaranty and a Security Agreement, in each
case which is in full force and effect on the date of and immediately after
giving effect to such merger or consolidation;
(ii) any of the Loan Parties and their Subsidiaries may (A) sell
Inventory in the ordinary course of business, (B) dispose of obsolete or
worn-out equipment in the ordinary course of business, (C) sell the Facility for
a cash purchase price not less than the lesser of (x) $2 million and (y) the
fair market value thereof, PROVIDED that the Net Cash Proceeds of such sale are
deposited into the Cash Collateral Account pursuant to Section 2.05(d), (D) sell
the Ophir Investment for a cash purchase price not less than the fair market
value thereof, PROVIDED that the Net Cash Proceeds of such sale are deposited
into the Cash Collateral Account pursuant to Section 2.05(d), and (E) sell or
otherwise dispose of other property or assets for cash in an aggregate amount
not less than the fair market value of such property or assets, PROVIDED
-69-
that the Net Cash Proceeds of such Dispositions do not exceed $1 million in the
aggregate in any twelve-month period and are deposited into the Cash Collateral
Account pursuant to Section 2.05(d).
(d) CHANGE IN NATURE OF BUSINESS. Make, or permit any of their
Subsidiaries to make, any change in the nature of its business as carried on at
the date hereof.
(e) LOANS, ADVANCES, INVESTMENTS, ETC. Make or commit or agree to make
any loan, advance guarantee of obligations, other extension of credit or capital
contributions to, or hold or invest in or commit or agree to hold or invest in,
or purchase or otherwise acquire or commit or agree to purchase or otherwise
acquire any shares of the Capital Stock, bonds, notes, debentures or other
securities of, or make or commit or agree to make any other investment in, any
other Person (including any Excluded Subsidiary), or purchase or own any futures
contract or otherwise become liable for the purchase or sale of currency or
other commodities at a future date in the nature of a futures contract, or
permit any of its Subsidiaries to do any of the foregoing, except for: (i)
Investments existing on the date hereof, as set forth on Schedule 7.02(e)
hereto, but not any increase in the amount thereof as set forth in such Schedule
or any other modification of the terms thereof, (ii) loans and advances by any
Loan Party to its Subsidiaries and by such Subsidiaries to such Loan Party, made
in the ordinary course of business and constituting Permitted Indebtedness under
clause (k) of the definition thereof, (iii) Permitted Investments, (iv) loans
and investments evidenced by the Intercompany Notes, (v) loans to employees for
relocation expenses in an aggregate outstanding amount not to exceed $500,000 at
any time and (vi) other investments not to exceed $500,000 in the aggregate at
any time outstanding.
(f) LEASE OBLIGATIONS. Create, incur or suffer to exist, or permit any
of their Subsidiaries to create, incur or suffer to exist, any obligations as
lessee (i) for the payment of rent for any real or personal property in
connection with any sale and leaseback transaction, or (ii) for the payment of
rent for any real or personal property under leases or agreements to lease other
than (A) Capitalized Lease Obligations which would not cause the aggregate
amount of all obligations under Capitalized Leases entered into after the
Effective Date owing by the Loan Parties and their Subsidiaries in any Fiscal
Year to exceed the amounts set forth in Section 7.02(g), and (B) Operating Lease
Obligations which would not cause the aggregate amount of all Operating Lease
Obligations owing by the Loan Parties and their Subsidiaries in any Fiscal Year
to exceed $5 million.
(g) CAPITAL EXPENDITURES. Make or commit or agree to make, or permit
any of their Subsidiaries to make or commit or agree to make, any Capital
Expenditure (by purchase or Capitalized Lease) that would cause the aggregate
amount of all such Capital Expenditures made by the Loan Parties and their
Subsidiaries to exceed: (i) for the Fiscal Year ending April 27, 2002,
$14,200,000; and (ii) for the Fiscal Year ending April 26, 2003, $14,200,000;
PROVIDED, HOWEVER, that notwithstanding the foregoing, in no event shall the
Capital Expenditures made by the Loan Parties and their Subsidiaries during any
fiscal quarter exceed $8,000,000.
(h) RESTRICTED PAYMENTS. (i) Declare or pay any dividend or other
distribution, direct or indirect, on account of any Capital Stock of any Loan
Party or any of its Subsidiaries, now or hereafter outstanding, (ii) make any
repurchase, redemption, retirement,
-70-
defeasance, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any Capital Stock of any Loan Party or now or
hereafter outstanding, (iii) make any payment to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights for the purchase
or acquisition of shares of any class of Capital Stock of any Loan Party, now or
hereafter outstanding, (iv) return any of capital to any shareholders or other
equity holders of any Loan Party or any of its Subsidiaries, or make any other
distribution of property, assets, shares of Capital Stock, warrants, rights,
options, obligations or securities thereto as such or (v) pay any management
fees or any other fees or expenses (including the reimbursement thereof by any
Loan Party or any of its Subsidiaries) pursuant to any management, consulting or
other services agreement to any of the shareholders or other equityholders of
any Loan Party or any of its Subsidiaries or other Affiliates, or to any other
Subsidiaries or Affiliates of any Loan Party; PROVIDED, HOWEVER, (i) any
Subsidiaries of the Loan Parties may pay dividends or make distributions to the
Loan Parties, (ii) the Parent may pay dividends in the form of common Capital
Stock, and (iii) the Parent and its Subsidiaries may pay to Hyde Park Holdings,
Inc., Xxxxxxxx Press, Xxxxxxxx X. Xxxx and their Affiliates (x) management fees
in accordance with the management agreements among such parties so long as the
aggregate amount of all such management fees paid by the Parent or any of its
Subsidiaries to such Persons shall not exceed $750,000 in the aggregate during
any Fiscal Year of the Parent and (y) other compensation (including bonuses but
excluding reasonable and customary expense reimbursements) so long as the
aggregate amount of all such other compensation paid by the Parent or any of its
Subsidiaries to such Persons, when aggregated with all management fees paid to
such Persons in accordance with the preceding subclause (x), shall not exceed
$2,200,000 in the aggregate during any Fiscal Year of the Parent, PROVIDED that
(A) no management fees shall be made pursuant to subclause (x) of this clause
(iii) if an Event of Default shall have occurred and be continuing or would
result from the making of any such payment or, if either immediately before or
after giving effect to any such payment, the Revolving Loans and Letter of
Credit Obligations exceed the Borrowing Base and (B) any such payment not
permitted to be made under the preceding sub-clause (A) may be paid after such
Event Default has been cured or waived in writing in accordance with this
Agreement if at such time Availability plus the Borrowers' cash on hand exceeds
$5,000,000.
(i) FEDERAL RESERVE REGULATIONS. Permit any Loan or the proceeds of any
Loan under this Agreement to be used for any purpose that would cause such Loans
to be margin loans under the provisions of Regulation T, U or X of the Board.
(j) TRANSACTIONS WITH AFFILIATES. Except as set forth in Schedule
7.02(j), enter into, renew, extend or be a party to, or permit any of their
Subsidiaries to enter into, renew, extend or be a party to any transaction or
series of related transactions (including, without limitation, the purchase,
sale, lease, transfer or exchange of property or assets of any kind or the
rendering of services of any kind) with any Affiliate, except (i) in the
ordinary course of business in a manner and to an extent consistent with past
practice and necessary or desirable for the prudent operation of its business,
for fair consideration and on terms no less favorable to the Loan Parties or
such Subsidiaries than would be obtainable in a comparable arm's length
transaction with a Person that is not an Affiliate thereof, (ii) transactions
among the Loan Parties, and (iii) the payment of management fees and other
compensation, including salaries and bonuses, to Hyde Park Holdings, Inc.,
Xxxxxxxx Press, Xxxxxxxx X. Xxxx and their Affiliates to the extent permitted in
clause (iii) of the proviso to Section 7.02(h).
-71-
(k) LIMITATIONS ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS AFFECTING
SUBSIDIARIES. Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any of Subsidiaries of the Parent (i) to pay dividends or to
make any other distribution on any shares of Capital Stock of such Subsidiary
owned by the Parent or any of its Subsidiaries, (ii) to pay or prepay or to
subordinate any Indebtedness owed to the Parent or any of its Subsidiaries,
(iii) to make loans or advances to the Parent or any of its Subsidiaries or (iv)
to transfer any of its property or assets to the Parent or any of its
Subsidiaries, or permit any of its Subsidiaries to do any of the foregoing;
PROVIDED, HOWEVER, that nothing in any of clauses (i) through (iv) of this
Section 7.02(k) shall prohibit or restrict:
(A) this Agreement and the other Loan Documents;
(B) any agreements in effect on the date of this Agreement and
described on Schedule 7.02(k), including, without limitation, the Indenture;
(C) any applicable law, rule or regulation (including, without
limitation, applicable currency control laws and applicable state corporate
statutes restricting the payment of dividends in certain circumstances);
(D) in the case of clause (iv) any agreement setting forth
customary restrictions on the subletting, assignment or transfer of any property
or asset that is a lease, license, conveyance or contract of similar property or
assets; or
(E) in the case of clause (iv) any holder of a Permitted Lien
from restricting on customary terms the transfer of any property or assets
subject thereto.
(l) LIMITATION ON ISSUANCE OF CAPITAL STOCK. Permit any Subsidiaries of
the Parent to issue or sell or enter into any agreement or arrangement for the
issuance and sale of any shares of its Capital Stock, any securities convertible
into or exchangeable for its Capital Stock or any warrants.
(m) MODIFICATIONS OF INDEBTEDNESS, ORGANIZATIONAL DOCUMENTS AND CERTAIN
OTHER AGREEMENTS; ETC. (i) Amend, modify or otherwise change (or permit the
amendment, modification or other change in any manner of) any of the provisions
of any Indebtedness of the Loan Parties or any of their Subsidiaries or of any
instrument or agreement (including, without limitation, any purchase agreement,
indenture, loan agreement or security agreement) relating to any such
Indebtedness if such amendment, modification or change would shorten the final
maturity or average life to maturity of, or require any payment to be made
earlier than the date originally scheduled on, such Indebtedness, would increase
the interest rate applicable to such Indebtedness, or would change the
subordination provision, if any, of such Indebtedness, or would otherwise be
adverse to the issuer of such Indebtedness in any respect, (ii) except for the
Obligations, make any voluntary or optional payment, prepayment, redemption
defeasance, including fund payment or other acquisition for value of any
Indebtedness of the Loan Parties or any of their Subsidiaries (including,
without limitation, by way of depositing money or securities with the trustee
therefor before the date required for the purpose of paying any portion of such
Indebtedness when due), or refund, refinance, replace or exchange any other
Indebtedness for
-72-
any such Indebtedness, or make any prepayment, redemption defeasance, including
fund payment or repurchase of any outstanding Indebtedness as a result of any
asset sale, change of control, issuance and sale of debt or equity securities or
similar event, or give any notice with respect to any of the foregoing, or (iii)
amend, modify or otherwise change their certificate of incorporation or bylaws
(or other similar organizational documents), including, without limitation, by
the filing or modification of any certificate of designation, or any agreement
or arrangement entered into by them, with respect to any of their Capital Stock
(including any shareholders' agreement), or enter into any new agreement with
respect to any of their Capital Stock, except any such amendments, modifications
or changes or any such new agreements or arrangements pursuant to this clause
(iii) that either individually or in the aggregate, could not have a Material
Adverse Effect.
(n) INVESTMENT COMPANY ACT OF 1940. Engage in any business, enter into
any transaction, use any securities or take any other action or permit any of
their Subsidiaries to do any of the foregoing, that would cause them or any of
their Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of being an "investment
company" or a company "controlled" by an "investment company" not entitled to an
exemption within the meaning of such Act.
(o) ENVIRONMENTAL. Permit the use, handling, generation, storage,
treatment, release or disposal of Hazardous Materials at any property owned or
leased by the Loan Parties or any of their Subsidiaries except in compliance
with Environmental Laws and so long as such use, handling, generation, storage,
treatment, release or disposal of Hazardous Materials does not result in a
Material Adverse Effect.
(p) CERTAIN AGREEMENTS. Agree to any material amendment or other
material change to or material waiver of any of its rights under the Indenture
Documents or any other Material Contract.
(q) COMPROMISE OF ACCOUNTS RECEIVABLE. Compromise or adjust any Account
Receivable (or extend the time of payment thereof) or grant any discounts,
allowances or credits or permit any of its Subsidiaries to do so other than,
provided no Default or Event of Default has occurred and is continuing, in the
ordinary course of its business; PROVIDED, HOWEVER, in no event shall any such
discount, allowance or credit exceed $500,000 in the aggregate and no such
extension of the time for payment extend beyond 30 days from the original due
date.
SECTION 7.03 FINANCIAL COVENANTS. So long as any principal of or interest
on any Loan, Reimbursement Obligation, Letter of Credit Obligation or any other
Obligation (whether or not due) shall remain unpaid or any Lender shall have any
Commitment hereunder, the Loan Parties shall not, unless the Required Lenders
shall otherwise consent in writing:
(a) LEVERAGE RATIO. Permit the ratio of Consolidated Funded
Indebtedness to Consolidated EBITDA of the Parent and its Subsidiaries as of the
end of each period of twelve (12) consecutive Fiscal Months, tested as of the
last day of each Fiscal Month set forth below, to be greater than the ratio set
forth below opposite such Fiscal Month:
-73-
FISCAL MONTH RATIO
------------ -----
May 2001 15.0 to 1.0
June 2001 15.0 to 1.0
July 2001 15.0 to 1.0
August 2001 15.0 to 1.0
September 2001 15.0 to 1.0
October 2001 13.5 to 1.0
November 2001 13.5 to 1.0
December 2001 13.0 to 1.0
January 2002 10.0 to 1.0
February 2002 10.0 to 1.0
March 2002 10.0 to 1.0
April 2002 10.0 to 1.0
May 2002 10.0 to 1.0
June 2002 10.0 to 1.0
July 2002 10.0 to 1.0
August 2002 10.0 to 1.0
September 2002 10.0 to 1.0
October 2002 10.0 to 1.0
November 2002 10.0 to 1.0
December 2002 10.0 to 1.0
January 2003 10.0 to 1.0
February 2003 10.0 to 1.0
March 2003 10.0 to 1.0
April 2003 10.0 to 1.0
May 2003 10.0 to 1.0
June 2003 10.0 to 1.0
July 2003 10.0 to 1.0
August 2003 10.0 to 1.0
September 2003 10.0 to 1.0
October 2003 10.0 to 1.0
(b) TANGIBLE NET WORTH. Permit Consolidated Tangible Net Worth of the
Parent and its Subsidiaries at any time to be less than ($150,000,000).
(c) FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge Coverage Ratio
for each period of twelve (12) consecutive Fiscal Months, tested as of the last
day of each Fiscal Month set forth below, to be less than the ratio set forth
below opposite such Fiscal Month:
FISCAL MONTH RATIO
------------ -----
May 2001 .30 to 1.0
June 2001 .30 to 1.0
July 2001 .30 to 1.0
August 2001 .30 to 1.0
September 2001 .33 to 1.0
October 2001 .33 to 1.0
November 2001 .33 to 1.0
December 2001 .35 to 1.0
-74-
January 2002 .40 to 1.0
February 2002 .45 to 1.0
March 2002 .45 to 1.0
April 2002 .50 to 1.0
May 2002 .50 to 1.0
June 2002 .50 to 1.0
July 2002 .50 to 1.0
August 2002 .50 to 1.0
September 2002 .50 to 1.0
October 2002 .50 to 1.0
November 2002 .50 to 1.0
December 2002 .50 to 1.0
January 2003 .50 to 1.0
February 2003 .50 to 1.0
March 2003 .50 to 1.0
April 2003 .50 to 1.0
May 2003 .50 to 1.0
June 2003 .50 to 1.0
July 2003 .50 to 1.0
August 2003 .50 to 1.0
September 2003 .50 to 1.0
October 2003 .50 to 1.0
(d) CONSOLIDATED EBITDA. Permit Consolidated EBITDA of the Parent and
its Subsidiaries at the end of each period of twelve (12) consecutive Fiscal
Months ending on the last day of a Fiscal Month set forth below to be less than
the amount set forth below opposite such Fiscal Month:
FISCAL MONTH CONSOLIDATED EBITDA
------------ -------------------
May 2001 $12,000,000
June 2001 $12,000,000
July 2001 $12,000,000
August 2001 $12,000,000
September 2001 $12,500,000
October 2001 $13,000,000
November 2001 $13,000,000
December 2001 $14,000,000
January 2002 $16,000,000
February 2002 $16,500,000
March 2002 $17,000,000
April 2002 $17,000,000
May 2002 $17,000,000
June 2002 $17,000,000
July 2002 $17,000,000
August 2002 $17,000,000
September 2002 $17,000,000
-75-
October 2002 $17,000,000
November 2002 $17,000,000
December 2002 $17,000,000
January 2003 $17,000,000
February 2003 $17,000,000
March 2003 $17,000,000
April 2003 $17,000,000
May 2003 $17,000,000
June 2003 $17,000,000
July 2003 $17,000,000
August 2003 $17,000,000
September 2003 $17,000,000
October 2003 $17,000,000
ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS
RECEIVABLE AND OTHER COLLATERAL
SECTION 8.01 COLLECTION OF ACCOUNTS RECEIVABLE; MANAGEMENT OF COLLATERAL.
(a) On or prior to the Effective Date, the Borrowers shall assist the Agents in
(i) acquiring control over the Existing Lockboxes or, if requested by the
Agents, establishing, and, during the term of this Agreement, maintaining one or
more replacement lockboxes in the name of the Administrative Agent and
identified on Schedule 8.01 hereto (collectively, the "LOCKBOXES") with the
Existing Lockbox Bank or other financial institutions set forth on Schedule 8.01
hereto or such other financial institutions selected by the Borrowers and
acceptable to the Agents in their sole discretion (each being referred to as a
"LOCKBOX BANK"), and (ii) establishing, and during the term of this Agreement,
maintaining accounts (each a "COLLECTION ACCOUNT" and, collectively, the
"COLLECTION ACCOUNTS") in the name of the Administrative Agent with each Lockbox
Bank. Each Borrower shall irrevocably instruct its Account Debtors, with respect
to Accounts Receivable of such Person (and Physical Electronics shall so direct
the Specified Joint Venture), to remit all payment to be made by checks or other
drafts to the Lockboxes and to remit all payments to be made by wire transfer or
by Automated Clearing House, Inc. payments as directed by the Administrative
Agent and shall instruct each Lockbox Bank to deposit all amounts received in
its Lockbox to the Collection Account at such Lockbox Bank on the day received
or, if such day is not a Business Day, on the next succeeding Business Day.
Until the Administrative Agent has advised the Parent to the contrary after the
occurrence and during the continuance of an Event of Default, the Borrowers may
and will enforce, collect and receive all amounts owing on the Accounts
Receivable of the Borrowers for the Administrative Agent's benefit and on the
Administrative Agent's behalf, but at the Borrowers' joint and several expense;
such privilege shall terminate, at the election of any Agent, upon the
occurrence and during the continuance of any Event of Default. All checks,
drafts, notes, money orders, acceptances, cash and other evidences of
Indebtedness received directly by any Borrowers from any Account Debtor, as
proceeds from Accounts Receivable of such Borrower, or as proceeds of any other
-76-
Collateral, shall be held by such Borrower in trust for the Agents and the
Lenders and upon receipt be deposited by such Borrower in original form and no
later than the next Business Day after receipt thereof into a Collection
Account. The Borrowers shall not commingle such collections with the Borrowers'
own funds or the funds of any Subsidiary or Affiliate of any Borrower or with
the proceeds of any assets not included in the Collateral. The Administrative
Agent shall charge the Loan Account on the last day of each month with two (2)
collection days for all such collections. All funds received in the Collection
Account during the continuance of a Cash Sweep Event (as hereinafter defined)
shall be sent by wire transfer or Automated Clearing House, Inc. payment to the
Payment Office to be credited to the Administrative Agent's Account for
application at the end of each Business Day to reduce the then principal balance
of the Revolving Loans, conditional upon final payment to the Administrative
Agent. No checks, drafts or other instrument received by the Administrative
Agent shall constitute final payment to the Administrative Agent unless and
until such instruments have actually been collected. As used herein, "Cash Sweep
Event" means the occurrence of an Event of Default or the failure of
Availability to equal or exceed $7,500,000. In the absence of a Cash Sweep
Event, the Borrowers may cause each Lockbox Bank to transfer funds on deposit in
the Collection Account into any operating account of the Borrowers.
(b) After the occurrence and during the continuance of an Event of
Default, any Agent may send a notice of assignment and/or notice of the Lenders'
security interest to any and all Account Debtors or third parties holding or
otherwise concerned with any of the Collateral, and thereafter the Agents shall
have the sole right to collect the Accounts Receivable and/or take possession of
the Collateral and the books and records relating thereto. The Borrowers shall
not, without prior written consent of the Agents, grant any extension of time of
payment of any Account Receivable, compromise or settle any Account Receivable
for less than the full amount thereof, release, in whole or in part, any Person
or property liable for the payment thereof, or allow any credit or discount
whatsoever thereon, except, in the absence of a continuing Event of Default, as
permitted by Section 7.02(q).
(c) Each Borrower hereby appoints each Agent or its designee on behalf
of such Agent as the Borrower's attorney-in-fact with power exercisable during
the continuance of any Event of Default to endorse such Borrower's name upon any
notes, acceptances, checks, drafts, money orders or other evidences of payment
relating to the Accounts Receivable, to sign such Borrower's name on any invoice
or xxxx of lading relating to any of the Accounts Receivable, drafts against
Account Debtors with respect to Accounts Receivable, assignments and
verifications of Accounts Receivable and notices to Account Debtors with respect
to Accounts Receivables, to send verification of Accounts Receivable, and, to
notify the Postal Service authorities to change the address for delivery of mail
addressed to such Borrower to such address as such Agent may designate and to do
all other acts and things necessary to carry out this Agreement. All acts of
said attorney or designee are hereby ratified and approved, and said attorney or
designee shall not be liable for any acts of omission or commission (other than
acts or omissions constituting gross negligence or willful misconduct), or for
any error of judgment or mistake of fact or law; this power being coupled with
an interest is irrevocable until all of the Loans, Reimbursement Obligations,
Letter of Credit Obligations and other Obligations under the Loan Documents are
paid in full and all of the Loan Documents are terminated.
-77-
(d) Nothing herein contained shall be construed to constitute any Agent
as agent of the Borrowers for any purpose whatsoever, and the Agents shall not
be responsible or liable for any shortage, discrepancy, damage, loss or
destruction of any part of the Collateral wherever the same may be located and
regardless of the cause thereof (other than from acts or omissions of the Agents
constituting gross negligence or willful misconduct as determined by a final
judgment of a court of competent jurisdiction). The Agents shall not, under any
circumstance or in any event whatsoever, have any liability for any error or
omission or delay of any kind occurring in the settlement, collection or payment
of any of the Accounts Receivable or any instrument received in payment thereof
or for any damage resulting therefrom (other than acts or omissions of the
Agents constituting gross negligence or willful misconduct as determined by a
final judgment of a court of competent jurisdiction). The Agents, by anything
herein or in any assignment or otherwise, do not assume any of the obligations
under any contract or agreement assigned to any Agent and shall not be
responsible in any way for the performance by the Borrowers of any of the terms
and conditions thereof.
(e) If any Account Receivable includes a charge for any tax payable to
any Governmental Authority, the Agents are hereby authorized (but in no event
obligated) in their discretion to pay the amount thereof to the proper taxing
authority for the Borrowers' account and to charge the Borrowers therefor. The
Borrowers shall notify the Agents if any Account Receivable includes any taxes
due to any such Governmental Authority and, in the absence of such notice, the
Agents shall have the right to retain the full proceeds of such Account
Receivable and shall not be liable for any taxes that may be due by reason of
the sale and delivery creating such Account Receivable.
(f) Notwithstanding any other terms set forth in the Loan Documents,
the rights and remedies of the Agents and the Lenders herein provided, and the
obligations of the Loan Parties set forth herein, are cumulative of, may be
exercised singly or concurrently with, and are not exclusive of, any other
rights, remedies or obligations set forth in any other Loan Document or as
provided by law.
SECTION 8.02 ACCOUNTS RECEIVABLE DOCUMENTATION. The Borrowers will at such
intervals as the Agents may require, execute and deliver confirmatory written
assignments of the Accounts Receivable to the Agents and furnish such further
schedules and/or information as any such Agent may require relating to the
Accounts Receivable, including, without limitation, sales invoices or the
equivalent, credit memos issued, remittance advices, reports and copies of
deposit slips and copies of original shipping or delivery receipts for all
merchandise sold. In addition, the Borrowers shall notify the Agents of any
non-compliance in respect of the representations, warranties and covenants
contained in Section 8.03. The items to be provided under this Section 8.02 are
to be in form reasonably satisfactory to the Agents and are to be executed and
delivered to the Agents from time to time solely for their convenience in
maintaining records of the Collateral. The Borrowers' failure to give any of
such items to the Agents shall not affect, terminate, modify or otherwise limit
the Collateral Agent's Lien on the Collateral. The Borrowers shall not re-date
any invoice or sale or make sales on extended dating beyond that customary in
the Borrowers' industry, and shall not re-xxxx any Accounts Receivable without
promptly disclosing the same to the Agents and providing the Agents with copy of
such re-billing, identifying the same as such. If any Borrower becomes aware of
anything materially
-78-
detrimental to any of such Borrower's customers' credit, such Borrower will
promptly advise the Agents thereof.
SECTION 8.03 STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL. With
respect to Collateral of any Loan Party at the time the Collateral becomes
subject to the Collateral Agent's Lien, each Loan Party covenants, represents
and warrants: (a) such Loan Party shall be the sole owner, free and clear of all
Liens (except for the Liens granted in the favor of the Collateral Agent for the
benefit of the Lenders and Permitted Liens), and fully authorized to sell,
transfer, pledge and/or grant a security interest in each and every item of said
Collateral; (b) except to the extent such Account Receivable is excluded from
the Borrowing Base, each Account Receivable shall be a good and valid account
representing an undisputed bona fide indebtedness incurred or an amount
indisputably owed by the Account Debtor therein named, for a fixed sum as set
forth in the invoice relating thereto with respect to any absolute sale and
delivery upon the specified terms of goods sold or services rendered by the such
Loan Party; (c) except to the extent such Account Receivable is excluded from
the Borrowing Base, no Account Receivable shall be subject to any defense,
offset, counterclaim, discount or allowance except as may be stated in the
invoice relating thereto, discounts and allowances as may be customary in such
Loan Party's business and as otherwise disclosed to the Agents, and each Account
Receivable will be paid within 60 days of the date when due; (d) none of the
transactions underlying or giving rise to any Account Receivable shall violate
any applicable state or federal laws or regulations, and all documents relating
thereto shall be legally sufficient under such laws or regulations and shall be
legally enforceable in accordance with their terms; (e) no agreement under which
any deduction or offset of any kind, other than normal trade discounts, may be
granted or shall have been made by such Loan Party at or before the time such
Accounts Receivable is created; (f) all agreements, instruments and other
documents relating to any Account Receivable shall be true and correct and in
all material respects what they purport to be; (g) all signatures and
endorsements that appear on all material agreements, instruments and other
documents relating to Account Receivable shall be genuine and all signatories
and endorsers shall have full capacity to contract; (h) such Loan Party shall
maintain books and records pertaining to said Collateral in such detail, form
and scope as the Agents shall reasonably require; (i) such Loan Party shall
immediately notify the Agents if any Account Receivable arises out of contracts
with the United States or any department, agency, or instrumentality thereof and
will execute any instruments and take any steps required by the Agents in order
that all monies due or to become due under any such contract shall be assigned
to the Collateral Agent and notice thereof given to the United States Government
under the Federal Assignment of Claims Act; (j) such Loan Party will,
immediately upon learning thereof, report to the Agents any material loss or
destruction of, or substantial damage to, any of the Collateral, and any other
matters affecting the value, enforceability or collectibility of any of the
Collateral; (k) if any amount payable under or in connection with any Account
Receivable is evidenced by a promissory note or other instrument, such
promissory note or instrument shall be immediately pledged, endorsed, assigned
and delivered to the Collateral Agent for the benefit of the Lenders as
additional Collateral; (l) such Loan Party shall not re-date any invoice or sale
or make sales on extended dating beyond that which is customary in the ordinary
course of its business and in the industry; (m) such Loan Party shall conduct a
physical count of its Inventory at such intervals as the Collateral Agent may
request and such Loan Party shall promptly supply the Agents with a copy of such
count accompanied by a report of the value (based on the lower of cost (on a
first in
-79-
first out basis) and market value) of such Inventory; and (n) such Loan Party is
not and shall not be entitled to pledge the Agents' or the Lenders' credit on
any purchases or for any purpose whatsoever.
SECTION 8.04 COLLATERAL CUSTODIAN. Upon the occurrence and during the
continuance of any Default or Event of Default, the Collateral Agent may at any
time and from time to time employ and maintain on the premises of any Loan Party
a custodian selected by the Collateral Agent who shall have full authority to do
all acts necessary to protect the Agents' and the Lenders' interests. Each Loan
Party hereby agrees to, and to cause its Subsidiaries to, cooperate with any
such custodian and to do whatever the Collateral Agent may reasonably request to
preserve the Collateral. All costs and expenses incurred by the Collateral Agent
by reason of the employment of the custodian shall be the responsibility of the
Borrowers and charged to the Loan Account.
ARTICLE IX
EVENTS OF DEFAULT
SECTION 9.01 EVENTS OF DEFAULT. If any of the following Events of Default
shall occur and be continuing:
(a) the Borrowers shall fail to pay (i) any principal of any Loan, any
Collateral Agent Advance or any Reimbursement Obligation when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) or
(ii) any interest, fee, indemnity or other amount payable under this Agreement
or any other Loan Document when due and, in the case of this clause (ii), such
failure remains uncured for a period of three days;
(b) any representation or warranty made or deemed made by or on behalf
of any Loan Party or by any officer of the foregoing under or in connection with
any Loan Document or under or in connection with any report, certificate, or
other document delivered to the Agents, the L/C Issuer or the Lenders pursuant
to any Loan Document shall have been incorrect in any material respect when
deemed made;
(c) (i) any Loan Party shall fail to perform or comply with any
covenant or agreement contained in Article VII or Article VIII, or (ii) any Loan
Party shall fail to perform or comply with any covenant or agreement contained
in Section 5 of any Security Agreement to which it is a party, Section 6 of any
Pledge Agreement to which it is a party or Section 5 of any Mortgage to which it
is a party;
(d) any Loan Party shall fail to perform or comply with any other term,
covenant or agreement contained in any Loan Document to be performed or observed
by it and, except as set forth in subsections (a), (b) and (c) of this Section
9.01, such failure, if capable of being remedied, shall remain unremedied for 15
days after the earlier of the date a senior officer of any Loan Party becomes
aware of such failure and the date written notice of such default shall have
been given by the Collateral Agent to such Loan Party;
-80-
(e) any Loan Party shall fail to pay any principal of or interest on
any of its Indebtedness (excluding Indebtedness evidenced by the Notes) in
excess of $500,000, or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Indebtedness, or any other
default under any agreement or instrument relating to any such Indebtedness, or
any other event, shall occur and shall continue after the applicable grace
period, if any, specified in such agreement or instrument, if the effect of such
default or event is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or any such Indebtedness shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
required prepayment), redeemed, purchased or defeased or an offer to prepay,
redeem, purchase or defease such Indebtedness shall be required to be made, in
each case prior to the stated maturity thereof;
(f) any Loan Party (i) shall institute any proceeding or voluntary case
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
liquidation, winding up, reorganization, arrangement, adjustment, protection,
relief or composition of it or its debts under any law relating to bankruptcy,
insolvency, reorganization or relief of debtors, or seeking the entry of an
order for relief or the appointment of a receiver, trustee, custodian or other
similar official for any such Person or for any substantial part of its
property, (ii) shall be generally not paying its debts as such debts become due
or shall admit in writing its inability to pay its debts generally, (iii) shall
make a general assignment for the benefit of creditors, or (iv) shall take any
action to authorize or effect any of the actions set forth above in this
subsection (f);
(g) any proceeding shall be instituted against any Loan Party seeking
to adjudicate it a bankrupt or insolvent, or seeking dissolution, liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for any such Person or
for any substantial part of its property, and either such proceeding shall
remain undismissed or unstayed for a period of 30 days or any of the actions
sought in such proceeding (including, without limitation, the entry of an order
for relief against any such Person or the appointment of a receiver, trustee,
custodian or other similar official for it or for any substantial part of its
property) shall occur;
(h) any provision of any Loan Document shall at any time for any reason
(other than pursuant to the express terms thereof) cease to be valid and binding
on or enforceable against any Loan Party intended to be a party thereto, or the
validity or enforceability thereof shall be contested by any party thereto, or a
proceeding shall be commenced by any Loan Party or any Governmental Authority
having jurisdiction over any of them, seeking to establish the invalidity or
unenforceability thereof, any Loan Party shall deny in writing that it has any
liability or obligation purported to be created under any Loan Document;
(i) any Security Agreement, Pledge Agreement or Mortgage or any other
security document, after delivery thereof pursuant hereto, 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 in favor of the
Collateral Agent for the benefit of the Lenders on any Collateral purported to
be covered thereby;
-81-
(j) one or more judgments or orders for the payment of money exceeding
$500,000 in the aggregate in excess of any applicable insurance coverage (but
only to the extent the insurer has acknowledged in writing its liability
therefor) shall be rendered against any Loan Party and remain unsatisfied and
either (i) enforcement proceedings shall have been commenced by any creditor
upon any such judgment or order, or (ii) there shall be a period of 10
consecutive days after entry thereof during which a stay of enforcement of any
such judgment or order, by reason of a pending appeal or otherwise, shall not be
in effect; PROVIDED, HOWEVER, that any such judgment or order shall not give
rise to an Event of Default under this subsection (j) if and for so long as (A)
the amount of such judgment or order is covered by a valid and binding policy of
insurance between the defendant and the insurer covering full payment thereof
and (B) such insurer has been notified, and has not disputed the claim made for
payment, of the amount of such judgment or order;
(k) any Loan Party or any of its ERISA Affiliates shall have made a
complete or partial withdrawal from a Multiemployer Plan, and, as a result of
such complete or partial withdrawal any Loan Party or such ERISA Affiliate
incurs a withdrawal liability in an annual amount exceeding $500,000; or a
Multiemployer Plan enters reorganization status under Section 4241 of ERISA,
and, as a result thereof such Loan Party's, or such ERISA Affiliate's annual
contribution requirement with respect to such Multiemployer Plan increases in an
annual amount exceeding $500,000;
(l) any Termination Event with respect to any Employee Plan shall have
occurred, and, 30 days after notice thereof shall have been given to any Loan
Party by the Agent, (i) such Termination Event (if correctable) shall not have
been corrected, and (ii) the then current value of such Employee Plan's vested
benefits exceeds the then current value of assets allocable to such benefits in
such Employee Plan by more than $500,000 (or, in the case of a Termination Event
involving liability under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 4971 or 4975 of the Internal
Revenue Code, the liability is in excess of such amount);
(m) a Change of Control shall have occurred; or
(n) an event or development occurs which has a Material Adverse Effect;
then, and in any such event, the Collateral Agent may, and shall at the request
of the Required Lenders, by notice to the Parent, (i) terminate the Commitments,
whereupon the Commitments shall terminate immediately, (ii) declare all Loans
and Reimbursement Obligations then outstanding to be due and payable, whereupon
the aggregate principal of such Loans and Reimbursement Obligations, all accrued
and unpaid interest thereon, all fees and all other amounts payable under this
Agreement shall become due and payable immediately, without presentment, demand,
protest or further notice of any kind, all of which are hereby expressly waived
by each Loan Party and (iii) exercise any and all of its other rights and
remedies under applicable law, hereunder and under the other Loan Documents;
PROVIDED, HOWEVER, that upon the occurrence of any Event of Default described in
subsection (f) or (g) of this Section 9.01, without any notice to any Loan Party
or any other Person or any act by any Agent or any Lender, the Commitments shall
automatically terminate and the Loans and Reimbursement Obligations
-82-
then outstanding, together with all accrued and unpaid interest thereon, all
fees and all other amounts due under this Agreement shall become due and payable
automatically and immediately, without presentment, demand, protest or notice of
any kind, all of which are expressly waived by each Loan Party. Upon demand by
the Administrative Agent after the occurrence and during the continuation of any
Event of Default, the Borrowers shall deposit with the Administrative Agent with
respect to each Letter of Credit then outstanding cash in an amount equal to the
greatest amount for which such Letter of Credit may be drawn. Such deposits
shall be held by the Administrative Agent in a joint non-interest bearing
account maintained at the Payment Office of the Administrative Agent as security
for, and to provide for the payment of, the Letter of Credit Obligations.
ARTICLE X
AGENTS
SECTION 10.01 APPOINTMENT. Each Lender (and each subsequent holder of any
Note by its acceptance thereof) hereby irrevocably appoints and authorizes the
Administrative Agent and the Collateral Agent to perform the duties of each such
Agent as set forth in this Agreement including: (i) to receive on behalf of each
Lender any payment of principal of or interest on the Notes outstanding
hereunder and all other amounts accrued hereunder for the account of the Lenders
and paid to such Agent, and, subject to Section 2.02 of this Agreement, to
distribute promptly to each Lender its Pro Rata Share of all payments so
received; (ii) to distribute to each Lender copies of all material notices and
agreements received by such Agent and not required to be delivered to each
Lender pursuant to the terms of this Agreement, PROVIDED that the Agents shall
not have any liability to the Lenders for the Agents' inadvertent failure to
distribute any such notices or agreements to the Lenders; (iii) to maintain, in
accordance with its customary business practices, ledgers and records reflecting
the status of the Obligations, the Loans, and related matters and to maintain,
in accordance with its customary business practices, ledgers and records
reflecting the status of the Collateral and related matters; (iv) to 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 this Agreement or any other Loan
Document; (v) to make the Loans and Collateral Agent Advances, for such Agent or
on behalf of the applicable Lenders as provided in this Agreement or any other
Loan Document; (vi) to perform, exercise, and enforce any and all other rights
and remedies of the Lenders with respect to the Loan Parties, the Obligations,
or otherwise related to any of same to the extent reasonably incidental to the
exercise by such Agent of the rights and remedies specifically authorized to be
exercised by such Agent by the terms of this Agreement or any other Loan
Document; (vii) to incur and pay such fees necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Document; and (viii) subject to Section 10.03 of this Agreement, to take such
action as such Agent deems appropriate on its behalf to administer the Loans and
the Loan Documents and to exercise such other powers delegated to such Agent by
the terms hereof or the Loan Documents (including, without limitation, the power
to give or to refuse to give notices, waivers, consents, approvals and
instructions and the power to make or to refuse to make determinations and
calculations) together with such powers as are reasonably incidental thereto to
carry out the purposes hereof and thereof. As to any matters not expressly
provided for by this
-83-
Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Notes), the Agents shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Required Lenders, and such
instructions of the Required Lenders shall be binding upon all Lenders and all
holders of Notes; PROVIDED, HOWEVER, that the L/C Issuer shall not be required
to refuse to honor a drawing under any Letter of Credit and the Agents shall not
be required to take any action which, in the reasonable opinion of any Agent,
exposes such Agent to liability or which is contrary to this Agreement or any
Loan Document or applicable law.
SECTION 10.02 NATURE OF DUTIES. The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of the Agents shall be mechanical and administrative
in nature. The Agents shall not have by reason of this Agreement or any Loan
Document a fiduciary relationship in respect of any Lender. Nothing in this
Agreement or any of the Loan Documents, express or implied, is intended to or
shall be construed to impose upon the Agents any obligations in respect of this
Agreement or any of the Loan Documents except as expressly set forth herein or
therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the Loan Parties in connection with the
making and the continuance of the Loans hereunder and shall make its own
appraisal of the creditworthiness of the Loan Parties and the value of the
Collateral, and the Agents shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Lender with any credit or
other information with respect thereto, whether coming into its possession
before the initial Loan hereunder or at any time or times thereafter, PROVIDED
that, upon the reasonable request of a Lender, each Agent shall provide to such
Lender any documents or reports delivered to such Agent by the Loan Parties
pursuant to the terms of this Agreement or any Loan Document. If any Agent seeks
the consent or approval of the Required Lenders to the taking or refraining from
taking any action hereunder, such Agent shall send notice thereof to each
Lender. Each Agent shall promptly notify each Lender any time that the Required
Lenders have instructed such Agent to act or refrain from acting pursuant
hereto.
SECTION 10.03 RIGHTS, EXCULPATION, ETC. The Agents and their directors,
officers, agents or employees shall not be liable for any action taken or
omitted to be taken by them under or in connection with this Agreement or the
other Loan Documents, except for their own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction. Without limiting the generality of the foregoing, the Agents (i)
may treat the payee of any Note as the holder thereof until the Agents receive
written notice of the assignment or transfer thereof, pursuant to Section 12.07,
signed by such payee and in form satisfactory to the Agent; (ii) may consult
with legal counsel (including, without limitation, counsel to such Agent or
counsel to the Loan Parties), independent public accountants, and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel or
experts; (iii) make no warranty or representation to any Lender and shall not be
responsible to any Lender for any statements, certificates, warranties or
representations made in or in connection with this Agreement or the other Loan
Documents; (iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Person, the existence
or possible existence of any Default or Event
-84-
of Default, or to inspect the Collateral or other property (including, without
limitation, the books and records) of any Person; (v) shall not be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto; and
(vi) shall not be deemed to have made any representation or warranty regarding
the existence, value or collectability of the Collateral, the existence,
priority or perfection of the Collateral Agent's Lien thereon, or any
certificate prepared by any Loan Party in connection therewith, nor shall the
Collateral Agent be responsible or liable to the Lenders for any failure to
monitor or maintain any portion of the Collateral. The Agents shall not be
liable for any apportionment or distribution of payments made in good faith
pursuant to Sections 2.05 and 4.04, and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from other Lenders any payment in excess of the amount which they are determined
to be entitled. The Agents may at any time request instructions from the Lenders
with respect to any actions or approvals which by the terms of this Agreement or
of any of the Loan Documents the Agents are permitted or required to take or to
grant, and if such instructions are promptly requested, the Agents shall be
absolutely entitled to refrain from taking any action or to withhold any
approval under any of the Loan Documents until it shall have received such
instructions from the Required Lenders. Without limiting the foregoing, no
Lender shall have any right of action whatsoever against any Agent as a result
of such Agent acting or refraining from acting under this Agreement, the Notes,
or any of the other Loan Documents in accordance with the instructions of the
Required Lenders.
SECTION 10.04 RELIANCE. Each Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.
SECTION 10.05 INDEMNIFICATION. To the extent that any Agent is not
reimbursed and indemnified by any Loan Party, the Lenders will reimburse and
indemnify such Agent and the L/C Issuer from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, advances or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against such Agent or the L/C
Issuer in any way relating to or arising out of this Agreement or any of the
Loan Documents or any action taken or omitted by such Agent or the L/C Issuer
under this Agreement or any of the Loan Documents, in proportion to each
Lender's Pro Rata Share, including, without limitation, advances and
disbursements made pursuant to Section 10.08; PROVIDED, HOWEVER, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements for which there has been a final judicial determination that such
resulted from any Agent's or the L/C Issuer's gross negligence or willful
misconduct. The obligations of the Lenders under this Section 10.05 shall
survive the payment in full of the Loans and the termination of this Agreement.
SECTION 10.06 AGENTS INDIVIDUALLY. With respect to its Pro Rata Share of
the Total Commitment hereunder, the Loans made by it and the Notes issued to or
held by it, each
-85-
Agent shall have and may exercise the same rights and powers hereunder
and is subject to the same obligations and liabilities as and to the extent set
forth herein for any other Lender or holder of a Note. The terms "Lenders" or
"Required Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include each Agent in its individual capacity as a Lender
or one of the Required Lenders. Each Agent and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with the Borrowers as if it were not acting as an Agent
pursuant hereto without any duty to account to the Lenders.
SECTION 10.07 SUCCESSOR AGENT. (a) Each Agent may resign from the
performance of all its functions and duties hereunder and under the other Loan
Documents at any time by giving at least thirty (30) Business Days prior written
notice to the Parent and each Lender. Such resignation shall take effect upon
the acceptance by a successor Agent of appointment pursuant to clauses (b) and
(c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Agent who, in the absence of a continuing Event of Default,
shall be reasonably satisfactory to the Borrowers. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents. After any Agent's resignation hereunder as the Agent, the provisions
of this Article X shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Agent under this Agreement and the other Loan
Documents.
(c) If a successor Agent shall not have been so appointed within said
thirty (30) Business Day period, the retiring Agent, with the consent of the
other Agent and, if an Event of Default is not continuing, the Parent, shall
then appoint a successor Agent who shall serve as Agent until such time, if any,
as the Required Lenders, with the consent of other Agent and, if an Event of
Default is not continuing, the Parent, appoint a successor Agent as provided
above.
SECTION 10.08 COLLATERAL MATTERS.
(a) The Collateral Agent may from time to time, make such disbursements
and advances ("COLLATERAL AGENT ADVANCES") which the Collateral Agent, in its
sole discretion, deems necessary or desirable to preserve or protect the
Collateral or any portion thereof, to enhance the likelihood or maximize the
amount of repayment by the Borrowers of the Loans, Reimbursement Obligations,
Letter of Credit Obligations and other Obligations or to pay any other amount
chargeable to the Borrowers pursuant to the terms of this Agreement, including,
without limitation, costs, fees and expenses as described in Section 12.04. The
Collateral Agent Advances shall be repayable on demand and be secured by the
Collateral. The Collateral Agent Advances shall constitute Obligations
hereunder. The Collateral Agent shall notify each Lender and the Parent in
writing of each such Collateral Agent Advance, which notice shall include a
description of the purpose of such Collateral Agent Advance. Without limitation
to its obligations pursuant to Section 10.05, each Lender agrees that it shall
make available to the Collateral Agent, upon the Collateral Agent's demand, in
Dollars in immediately available funds, the amount equal to such Lender's Pro
Rata Share of each such Collateral Agent Advance. If such funds are not made
-86-
available to the Collateral Agent by such Lender the Collateral Agent shall be
entitled to recover such funds, on demand from such Lender together with
interest thereon, for each day from the date such payment was due until the date
such amount is paid to the Collateral Agent, at the Federal Funds Rate for three
Business Days and thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the Collateral Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Collateral Agent upon any Collateral upon termination of the Total Commitments
and payment and satisfaction of all Loans, Reimbursement Obligations, Letter of
Credit Obligations, and all other Obligations which have matured and which the
Collateral Agent has been notified in writing are then due and payable; or the
Disposition of property in compliance with the terms of Section 7.02(c) of this
Agreement and the other Loan Documents; or constituting property in which the
Loan Parties owned no interest at the time the Lien was granted or at any time
thereafter; or if approved, authorized or ratified in writing by the Lenders.
Upon request by the Collateral Agent at any time, the Lenders will confirm in
writing the Collateral Agent's authority to release particular types or items of
Collateral pursuant to this Section 10.08(b).
(c) Without in any manner limiting the Collateral Agent's authority to
act without any specific or further authorization or consent by the Lenders (as
set forth in Section 10.08(b)), each Lender agrees to confirm in writing, upon
request by the Collateral Agent, the authority to release Collateral conferred
upon the Collateral Agent under Section 10.08(b). Upon receipt by the Collateral
Agent of confirmation from the Lenders of its authority to release any
particular item or types of Collateral, and upon prior written request by any
Loan Party, the Collateral Agent shall (and is hereby irrevocably authorized by
the Lenders to) execute such documents as may be necessary to evidence the
release of the Liens granted to the Collateral Agent for the benefit of the
Lenders upon such Collateral; PROVIDED, HOWEVER, that (i) the Collateral Agent
shall not be required to execute any such document on terms which, in the
Collateral Agent's opinion, would expose the Collateral Agent to liability or
create any obligations or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Lien upon (or
obligations of any Loan Party in respect of) all interests in the Collateral
retained by any Loan Party.
(d) The Collateral Agent shall have no obligation whatsoever to any
Lenders to assure that the Collateral exists or is owned by the Loan Parties or
is cared for, protected or insured or has been encumbered or that the Lien
granted to the Collateral Agent pursuant to this Agreement has been properly or
sufficiently or lawfully created, perfected, protected or enforced or is
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
the Collateral Agent in this Section 10.08 or in any of the Loan Documents, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Collateral Agent may act in any manner it
may deem appropriate, in its sole discretion, given the Collateral Agent's own
interest in the Collateral as one of the Lenders and that the Collateral Agent
shall have no duty or liability whatsoever to any other Lender.
-87-
SECTION 10.09 COLLATERAL SUB-AGENTS. Each Lender and the Administrative
Agent, by its execution and delivery of this Agreement (or any joinder hereto or
any Assignment hereunder), agrees that, in the event it shall hold any monies or
other investments on account of the Borrowers or any other Loan Party, such
monies or other investments shall be held in the name and under the control of
such Lender or the Administrative Agent (as applicable), and such Lender or the
Administrative Agent (as applicable) shall hold such monies or other investments
as a collateral sub-agent for the Collateral Agent under this Agreement and the
other Loan Documents. Each Loan Party by its execution and delivery of this
Agreement hereby consents to the foregoing.
ARTICLE XI
GUARANTY
SECTION 11.01 GUARANTY; LIMITATION OF LIABILITY. The Guarantors, jointly
and severally, hereby unconditionally and irrevocably guarantee the punctual
payment when due, whether at stated maturity, by acceleration or otherwise, of
all obligations of the Borrowers now or hereafter existing under any Loan
Document, whether for principal, interest, fees, expenses or otherwise (such
obligations, to the extent not paid by the Borrowers, being the "GUARANTEED
OBLIGATIONS"), and agree to pay any and all expenses (including reasonable
counsel fees and expenses) incurred by the Agents, the Lenders and the L/C
Issuer in enforcing any rights under the guaranty set forth in this Article.
Without limiting the generality of the foregoing, the Guarantors' joint and
several liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrowers to the Agents, the
Lenders and the L/C Issuer under any Loan Document but for the fact that they
are unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrowers.
SECTION 11.02 GUARANTY ABSOLUTE. The Guarantors, jointly and severally,
guarantee that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or order
now or hereafter in effect in any jurisdiction affecting any of such terms or
the rights of the Agents, the Lenders or the L/C Issuer with respect thereto.
The joint and several obligations of the Guarantors under this Article are
independent of the Guaranteed Obligations, and a separate action or actions may
be brought and prosecuted against any Guarantor to enforce such obligations,
irrespective of whether any action is brought against the Borrowers or any other
Guarantor or whether any Borrower is joined in any such action or actions. The
liability of each Guarantor under this Article shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now or hereafter have in any way relating to, any or all of
the following:
(a) any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations, or any other amendment
or waiver of or any consent to departure from any Loan Document, including,
without limitation, any increase in
-88-
the Guaranteed Obligations resulting from the extension of additional credit to
the Borrowers or otherwise;
(c) any taking, exchange, release or non-perfection of any Collateral,
or any taking, release or amendment or waiver of or consent to departure from
any other guaranty, for all or any of the Guaranteed Obligations;
(d) any change, restructuring or termination of the corporate, limited
liability company or partnership structure or existence of any Borrower; or
(e) any other circumstance (including, without limitation, any statute
of limitations) or any existence of or reliance on any representation by the
Agents, the Lenders or the L/C Issuer that might otherwise constitute a defense
available to, or a discharge of, any Guarantor or Borrower or any other
guarantor or surety.
This Article shall continue to be effective or be reinstated, as the case
may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Lender or any other Person upon
the insolvency, bankruptcy or reorganization of the Borrowers or otherwise, all
as though such payment had not been made.
SECTION 11.03 WAIVER. The Guarantors hereby waive promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Article and any requirement that the Agents, the Lenders or
the L/C Issuer exhaust any right or take any action against the Borrowers or any
other Person or any collateral. Each Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements contemplated herein
and that the waiver set forth in this Section 11.03 is knowingly made in
contemplation of such benefits. The Guarantors hereby waive any right to revoke
this Article, and acknowledges that this Article is continuing in nature and
applies to all Guaranteed Obligations, whether existing now or in the future.
SECTION 11.04 CONTINUING GUARANTY; ASSIGNMENTS. This Article is a
continuing guaranty and shall (a) remain in full force and effect until the
later of (i) the cash payment in full of the Guaranteed Obligations (other than
indemnification obligations as to which no claim has been made) and all other
amounts payable under this Article and (ii) the Revolving Credit Termination
Date, (b) be binding upon each Guarantor, its successors and assigns and (c)
inure to the benefit of and be enforceable by the Agents, the Lenders and the
L/C Issuer and their successors, pledgees, transferees and assigns. Without
limiting the generality of the foregoing clause (c), any Lender may pledge,
assign or otherwise transfer all or any portion of its rights and obligations
under this Agreement (including, without limitation, all or any portion of its
Revolving Credit Commitment, the Loans, the Reimbursement Obligations and the
Letter of Credit Obligations owing to it and any Revolving Credit Note held by
it) to any other Person, and such other Person shall thereupon become vested
with all the benefits in respect thereof granted such Lender herein or
otherwise, in each case as provided in Section 12.07.
SECTION 11.05 SUBROGATION. None of the Guarantors will exercise any rights
that such Guarantor may now or hereafter acquire against any Borrower or any
other Guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor's obligations
-89-
under this Article, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of the Agents and the Lenders against the
Borrowers or such other Guarantor or any Collateral, whether or not such claim,
remedy or right arises in equity or under contract, statute or common law,
including, without limitation, the right to take or receive from the Borrowers
or any other Guarantor, directly or indirectly, in cash or other property or by
set-off or in any other manner, payment or security solely on account of such
claim, remedy or right, unless and until all of the Guaranteed Obligations and
all other amounts payable under this Article shall have been paid in full in
cash and the Final Maturity Date shall have occurred. If any amount shall be
paid to a Guarantor in violation of the immediately preceding sentence at any
time prior to the later of the payment in full in cash of the Guaranteed
Obligations and all other amounts payable under this Article and the Final
Maturity Date, such amount shall be held in trust for the benefit of the Agents
and the Lenders and shall forthwith be paid to the Agents and the Lenders to be
credited and applied to the Guaranteed Obligations and all other amounts payable
under this Article, whether matured or unmatured, in accordance with the terms
of this Agreement, or to be held as collateral for any Guaranteed Obligations or
other amounts payable under this Article thereafter arising. If (i) the
Guarantors shall make payment to the Agents and the Lenders of all or any part
of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and all
other amounts payable under this Article shall be paid in full in cash and (iii)
the Final Maturity Date shall have occurred, the Agents and the Lenders will, at
the Guarantors' request and expense, execute and deliver to the Guarantors
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to the Guarantors of an
interest in the Guaranteed Obligations resulting from such payment by the
Guarantors.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01 NOTICES, ETC. All notices and other communications provided for
hereunder shall be in writing and shall be mailed, telecopied or delivered, if
to any Loan Party, at the following address:
High Voltage Engineering Corporation
000 Xxxxxxxxx Xxxx,
Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. XxXxxx, Xx.,
Chief Financial Officer
Telephone: (000) 000-0000 Ext. 102
Telecopier: (000) 000-0000
-90-
with a copy to:
Xxxxxxx Xxxx LLP
000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
if to the Administrative Agent, to it at the following
address:
Ableco Finance LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
if to the Collateral Agent, to it at the following address:
Ableco Finance LLC
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
-91-
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
or, as to each party, at such other address as shall be designated by such party
in a written notice to the other party complying as to delivery with the terms
of this Section 12.01. All such notices and other communications shall be
effective, (i) if mailed, when received or three days after deposited in the
mails, whichever occurs first, (ii) if telecopied, when transmitted and
confirmation received, or (iii) if delivered, upon delivery, except that notices
to any Agent or the L/C Issuer pursuant to Articles II and III shall not be
effective until received by such Agent or the L/C Issuer, as the case may be.
SECTION 12.02 AMENDMENTS, ETC. No amendment or waiver of any provision of
this Agreement or any Revolving Credit Note, and no consent to any departure by
the Borrowers or any other Loan Party therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Agents with the consent of
the Required Lenders, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given PROVIDED,
HOWEVER, that no amendment, waiver or consent shall (i) increase the Revolving
Credit Commitment of any Lender, reduce the principal of, or interest on, the
Loans or the Reimbursement Obligations payable to any Lender, reduce the amount
of any fee payable for the account of any Lender, or postpone or extend any date
fixed for any payment of principal of, or interest or fees on, the Loans or
Letter of Credit Obligations payable to any Lender, in each case without the
written consent of any Lender affected thereby, (ii) increase the Total
Revolving Credit Commitment without the written consent of each Lender, (iii)
change the percentage of the Revolving Credit Commitment or of the aggregate
unpaid principal amount of the Revolving Credit Note that is required for the
Lenders or any of them to take any action hereunder, (iv) amend the definition
of "Required Lenders" or "Pro Rata Share", (v) release all or a substantial
portion of the Collateral (except as otherwise provided in this Agreement and
the other Loan Documents) or subordinate any Lien granted in favor of the
Collateral Agent for the benefit of the Lenders, or release the Borrowers or any
Guarantor, (vi) amend, modify or waive Section 4.04 or this Section 12.02, or
(vii) amend the definition of "Eligible Inventory" or "Borrowing Base", in each
case without the written consent of each Lender. Notwithstanding the foregoing,
no amendment, waiver or consent shall, unless in writing and signed by an Agent,
affect the rights or duties of such Agent (but not in its capacity as a Lender)
under this Agreement or the other Loan Documents.
SECTION 12.03 NO WAIVER; REMEDIES, ETC. No failure on the part of any Agent
or any Lender to exercise, and no delay in exercising, any right hereunder or
under any other Loan Document shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right. The rights
and remedies of the Agents and the Lenders provided herein and in the other Loan
Documents are cumulative and are in addition to, and not exclusive of, any
rights or
-92-
remedies provided by law. The rights of the Agents and the Lenders under any
Loan Document against any party thereto are not conditional or contingent on any
attempt by the Agents and the Lenders to exercise any of their rights under any
other Loan Document against such party or against any other Person.
SECTION 12.04 EXPENSES; TAXES; ATTORNEYS' FEES. The Borrowers will pay on
demand, all costs and expenses incurred by or on behalf of the Agents (and, in
the case of clauses (c) through (m) below, the Lenders), regardless of whether
the transactions contemplated hereby are consummated, including, without
limitation, reasonable fees, costs, client charges and expenses of counsel for
the Agents (and, in the case of clauses (c) through (m) below, the Lenders),
accounting, due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, title searching, environmental assessments, miscellaneous
disbursements, examination, travel, lodging and meals, arising from or relating
to: (a) the negotiation, preparation, execution, delivery, performance and
administration of this Agreement and the other Loan Documents (including,
without limitation, the preparation of any additional Loan Documents, pursuant
to Section 7.01(b), Section 7.01(m) or Section 7.01(o) or the review of any of
the agreements, instruments and documents referred to in such Sections), (b) any
requested amendments, waivers or consents to this Agreement or the other Loan
Documents whether or not such documents become effective or are given, (c) the
preservation and protection of any of the Lenders' rights under this Agreement
or the other Loan Documents, (d) the defense of any claim or action asserted or
brought against the Agents or the Lenders by any Person that arises from or
relates to this Agreement, any other Loan Document, the Agents' or the Lenders'
claims against the Borrowers and each other Loan Party, or any and all matters
in connection therewith, (e) the commencement or defense of, or intervention in,
any court proceeding arising from or related to this Agreement or any other Loan
Document, (f) the filing of any petition, complaint, answer, motion or other
pleading by the Agents or the Lenders, or the taking of any action in respect of
the Collateral or other security, in connection with this Agreement or any other
Loan Document, (g) the protection, collection, lease, sale, taking possession of
or liquidation of, any Collateral or other security in connection with this
Agreement or any other Loan Document, (h) any attempt to enforce any Lien or
security interest in any Collateral or other security in connection with this
Agreement or any other Loan Document, (i) any attempt to collect from the
Borrowers or any other Loan Party, (j) the receipt by the Agents or the Lenders
of any advice from professionals with respect to any of the foregoing, (k) all
liabilities and costs arising from or in connection with the past, present or
future operations of the Borrowers and each other Loan Party involving any
damage to real or personal property or natural resources or harm or injury
alleged to have resulted from any Release of Hazardous Materials on, upon or
into such property, (l) any Environmental Liabilities and Costs incurred in
connection with the investigation, removal, cleanup and/or remediation of any
Hazardous Materials present or arising out of the operations of any facility of
the Borrowers and any other Loan Party, or (m) any Environmental Liabilities and
Costs incurred in connection with any Environmental Lien. Without limitation of
the foregoing or any other provision of any Loan Document: (x) the Borrowers
agree to pay all stamp, document, transfer, recording or filing taxes or fees
and similar impositions now or hereafter determined by any Agent or any Lender
to be payable in connection with this Agreement or any other Loan Document, and
the Borrowers agree to save the Agents and the Lenders harmless from and against
any and all present or future claims, liabilities or losses with
-93-
respect to or resulting from any omission to pay or delay in paying any such
taxes, fees or impositions, (y) the Borrowers agree to pay all broker fees that
may become due in connection with the transactions contemplated by this
Agreement, and (z) if the Borrowers fail to perform any covenant or agreement
contained herein or in any other Loan Document, any Agent may itself perform or
cause performance of such covenant or agreement, and the expenses of the such
Agent incurred in connection therewith shall be reimbursed on demand by the
Borrowers.
SECTION 12.05 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, any Lender may, and is hereby authorized
to, at any time and from time to time, without notice to the Borrowers (any such
notice being expressly waived by the Borrowers) and to the fullest extent
permitted by law, set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender to or for the credit or the account of the
Borrowers against any and all obligations of either now or hereafter existing
under any Loan Document, irrespective of whether or not such Lender shall have
made any demand hereunder or thereunder and although such obligations may be
contingent or unmatured. Each Lender agrees to notify the Parent promptly after
any such set-off and application made by such Lender provided that the failure
to give such notice shall not affect the validity of such set-off and
application.
SECTION 12.06 SEVERABILITY. Any provision of this Agreement, which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
SECTION 12.07 ASSIGNMENTS AND PARTICIPATIONS. (a) This Agreement and the
Notes shall be binding upon and inure to the benefit of the Borrowers and the
other Loan Parties and each Agent and each Lender and their respective
successors and assigns; PROVIDED, however, that each of the Borrowers and the
other Loan Parties may not assign or transfer any of their rights hereunder, or
under the Notes, without the prior written consent of each Lender and any such
assignment without the Lenders' prior written consent shall be null and void.
(b) Each Lender may assign to one or more of its Affiliates or any fund
or account managed by such Lender, to another Lender or, with the written
consent of the Collateral Agent, other lenders or other entities all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Loans made by it, the Notes
held by it and its Pro Rata Share of Letter of Credit Obligations); PROVIDED,
HOWEVER, that (1) such assignment is in an amount which is at least $5,000,000
or a multiple of $1,000,000 in excess thereof (or the remainder of such Lender's
Commitment), (except such minimum amount shall not apply to any Affiliate of a
Lender or any fund or account managed by a Lender) and (2) the parties to each
such assignment shall execute and deliver to the Collateral Agent, for its
acceptance, an Assignment and Acceptance, together with any Note subject to such
assignment, and such parties shall deliver to the Collateral Agent a processing
and recordation fee of $5,000 (except the payment of such fee shall not be
required if the assignee is an Affiliate of a Lender or to any fund or account
managed by a Lender). Upon such execution, delivery and acceptance, from and
after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least three Business Days after the delivery thereof
to the Collateral Agent (or such shorter period as shall be agreed to by the
Collateral Agent and the parties to such
-94-
assignment), (x) the assignee thereunder shall become a "Lender" hereunder and,
in addition to the rights and obligations hereunder held by it immediately prior
to such effective date, have the rights and obligations hereunder that have been
assigned to it pursuant to such Assignment and Acceptance and (y) the assigning
Lender thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its 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, such
Lender shall cease to be a party hereto).
(i) By executing and delivering an Assignment and Acceptance, the
assigning Lender and the assignee thereunder confirm to and agree with each
other and the other parties hereto as follows: (A) other than as provided in
such Assignment and Acceptance, the 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
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
furnished pursuant hereto; (B) the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Loan Parties or any of their Subsidiaries or the performance or
observance by the Loan Parties of any of their obligations under this Agreement
or any other Loan Document furnished pursuant hereto; (C) such assignee confirms
that it has received a copy of this Agreement and the other Loan Documents,
together with such other documents and information it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (D) such assignee will, independently and without reliance upon the
Assigning Lender, any Agent or any 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 and the
other Loan Documents; (E) such assignee appoints and authorizes the Agents to
take such action as agents on its behalf and to exercise such powers under this
Agreement and the other Loan Documents as are delegated to the Agents by the
terms thereof, together with such powers as are reasonably incidental thereto;
and (F) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement and the other Loan
Documents are required to be performed by it as a Lender.
(ii) The Collateral Agent shall maintain, or cause to be maintained
at the Payment Office, a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitments of, and principal amount of the Loans and Letter
of Credit Obligations owing to each Lender from time to time (the "REGISTER").
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrowers, the Agents and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Parent and any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(iii) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, together with the Notes subject to such
assignment, the Collateral Agent shall, if the Collateral Agent consents to such
assignment and if
-95-
such Assignment and Acceptance has been completed (A) accept such Assignment and
Acceptance, (B) give prompt notice thereof to the Parent (except no such notice
shall be required if the assignee is an Affiliate of the assigning Lender or a
fund or account managed by such Lender), (C) record the information contained
therein in the Register, and (D) prepare and distribute to each Lender and the
Parent a revised Schedule 1.01(A) hereto after giving effect to such assignment,
which revised Schedule 1.01(A) shall replace the prior Schedule 1.01(A) and
become part of this Agreement (except no such revised Schedule 1.01(A) shall be
distributed if the assignee is an Affiliate of the assigning Lender or a fund or
account managed by such Lender).
(iv) A Registered Loan (and the Registered Note, if any, evidencing
the same) may be assigned or sold in whole or in part only by registration of
such assignment or sale on the Register (and each Registered Note shall
expressly so provide). Any assignment or sale of all or part of such Registered
Loan (and the Registered Note, if any, evidencing the same) may be effected only
by registration of such assignment or sale on the Register, together with the
surrender of the Registered Note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such Registered Note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new Registered Notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s). Prior to the registration of assignment or sale of any Registered
Loan (and the Registered Note, if any evidencing the same), the Agents shall
treat the Person in whose name such Loan (and the Registered Note, if any,
evidencing the same) is registered as the owner thereof for the purpose of
receiving all payments thereon and for all other purposes, notwithstanding
notice to the contrary.
(v) In the event that any Lender sells participations in the
Registered Loan, such Lender shall maintain a register on which it enters the
name of all participants in the Registered Loans held by it (the "PARTICIPANT
REGISTER"). A Registered Loan (and the Registered Note, if any, evidencing the
same) may be participated in whole or in part only by registration of such
participation on the Participant Register (and each Registered Note shall
expressly so provide). Any participation of such Registered Loan (and the
Registered Note, if any, evidencing the same) may be effected only by the
registration of such participation on the Participant Register.
(vi) Any foreign Person who purchases or is assigned or
participates in any portion of such Loan shall provide the Agents (in the case
of a purchase or assignment) or the Lender (in the case of a participation) with
a completed Internal Revenue Service Form W-8 (Certificate of Foreign Status) or
a substantially similar form for such purchaser, participant or any other
affiliate who is a holder of beneficial interests in the Loan.
(c) Each Lender may sell participations to one or more banks or other
entities in or to all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, all or a
portion of its Commitments, the Loans made by it and its Pro Rate Share of the
Letter of Credit Obligations); PROVIDED, that (i) such Lender's obligations
under this Agreement (including without limitation, its Commitments hereunder)
and the other Loan Documents shall remain unchanged; (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, and the
-96-
Borrowers, the Agents and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents, and (iii) a
participant shall not be entitled to require such Lender to take or omit to take
any action hereunder except (A) action directly effecting an extension of the
maturity dates or decrease in the principal amount of the Loans or Letter of
Credit Obligations, or (B) action directly effecting an extension of the due
dates or a decrease in the rate of interest payable on the Loans or the fees
payable under this Agreement, or (C) actions directly effecting a release of all
or a substantial portion of the Collateral or the Borrowers or any Guarantor
(except as set forth in Section 10.08 of this Agreement or any Loan Document).
SECTION 12.08 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same agreement.
SECTION 12.09 GOVERNING LAW. THIS AGREEMENT, THE NoteS AND THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE
OF NEW YORK.
SECTION 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE. ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN XXX XXXXXX XX XXX XXXXX XX XXX XXXX IN THE COUNTY OF
NEW YORK OR OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW
YORK, AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY
IRREVOCABLY ACCEPT IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. EACH LOAN PARTY FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS AND
IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED
OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH LOAN PARTY AT ITS ADDRESS FOR
NOTICES AS SET FORTH IN SECTION 12.01, SUCH SERVICE TO BECOME EFFECTIVE TEN (10)
DAYS AFTER SUCH MAILING. EACH LOAN PARTY HEREBY IRREVOCABLY APPOINTS THE
SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS AGENT FOR SERVICE OF PROCESS
IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENTS OR THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
EACH LOAN PARTY IN ANY OTHER JURISDICTION. EACH LOAN PARTY HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
EACH LOAN PARTY HAS OR HEREAFTER MAY
-97-
ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS
(WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN
AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH LOAN
PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 12.11 WAIVER OF JURY TRIAL, ETC. EACH LOAN PARTY, THE AGENTS AND
THE LENDERS HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NoteS OR OTHER
LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR COUNTERCLAIM
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. EACH LOAN PARTY CERTIFIES
THAT NO OFFICER, REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY LENDER
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT,
IN THE EVENT OF ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE
FOREGOING WAIVERS. EACH LOAN PARTY HEREBY ACKNOWLEDGES THAT THIS PROVISION IS A
MATERIAL INDUCEMENT FOR THE LENDERS ENTERING INTO THIS AGREEMENT.
SECTION 12.12 CONSENT BY THE AGENTS AND LENDERS. Except as otherwise
expressly set forth herein to the contrary, if the consent, approval,
satisfaction, determination, judgment, acceptance or similar action (an
"ACTION") of any Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which the
Borrowers and any other Loan Party are parties and to which any Agent or any
Lender has succeeded thereto, such Action shall be required to be in writing and
may be withheld or denied by such Agent or such Lender, in its sole discretion,
with or without any reason, and without being subject to question or challenge
on the grounds that such Action was not taken in good faith.
SECTION 12.13 NO PARTY DEEMED DRAFTER. Each of the parties hereto agrees
that no party hereto shall be deemed to be the drafter of this Agreement.
SECTION 12.14 REINSTATEMENT; CERTAIN PAYMENTS. If any claim is ever made
upon any Agent, any Lender or the L/C Issuer for repayment or recovery of any
amount or amounts received by such Agent, such Lender or the L/C Issuer in
payment or on account of any of the Obligations, such Agent, such Lender or the
L/C Issuer shall give prompt notice of such claim to each other Agent and Lender
and the Parent, and if such Agent, such Lender or the L/C Issuer repays all or
part of such amount by reason of (i) any judgment, decree or order of any court
or Administrative body having jurisdiction over such Agent, such Lender or the
L/C Issuer or any of their property, or (ii) any good faith settlement or
compromise of any such claim effected by such Agent, such Lender or the L/C
Issuer with any such claimant, then and in such event each Loan Party agrees
that (A) any such judgment, decree, order, settlement or compromise shall be
-98-
binding upon it notwithstanding the cancellation of any Note or other instrument
evidencing the Obligations or the other Loan Documents or the termination of
this Agreement or the other Loan Documents, and (B) it shall be and remain
liable to such Agent, such Lender or the L/C Issuer hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by such Agent, such Lender or the L/C Issuer.
SECTION 12.15 INDEMNIFICATION. In addition to each Loan Party's other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless each Agent, each Lender,
the L/C Issuer and all of their respective officers, directors, employees,
attorneys, consultants and agents (collectively called the "INDEMNITEES") from
and against any and all losses, damages, liabilities, obligations, penalties,
fees, reasonable costs and expenses (including, without limitation, reasonable
attorneys' fees, costs and expenses) incurred by such Indemnitees, whether prior
to or from and after the Effective Date, whether direct, indirect or
consequential, as a result of or arising from or relating to or in connection
with any of the following: (i) the negotiation, preparation, execution or
performance or enforcement of this Agreement, any other Loan Document or of any
other document executed in connection with the transactions contemplated by this
Agreement, (ii) any Agent's or any Lender's furnishing of funds to the Borrowers
or the L/C Issuer's issuing of Letters of Credit for the account of the
Borrowers under this Agreement, including, without limitation, the management of
any such Loans, the Reimbursement Obligations or the Letter of Credit
Obligations, (iii) any matter relating to the financing transactions
contemplated by this Agreement or the other Loan Documents or by any document
executed in connection with the transactions contemplated by this Agreement or
the other Loan Documents, or (iv) any claim, litigation, investigation or
proceeding relating to any of the foregoing, whether or not any Indemnitee is a
party thereto (collectively, the "INDEMNIFIED MATTERS"); PROVIDED, HOWEVER, that
the Loan Parties shall not have any obligation to any Indemnitee under this
Section 12.15 for any Indemnified Matter caused by the gross negligence or
willful misconduct of such Indemnitee, as determined by a final judgment of a
court of competent jurisdiction. Such indemnification for all of the foregoing
losses, damages, fees, costs and expenses of the Indemnitees are chargeable
against the Loan Account. To the extent that the undertaking to indemnify, pay
and hold harmless set forth in this Section 12.15 may be unenforceable because
it is violative of any law or public policy, each Loan Party shall, jointly and
severally, contribute the maximum portion which it is permitted to pay and
satisfy under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees. This Indemnity shall survive the repayment
of the Obligations and the discharge of the Liens granted under the Loan
Documents.
SECTION 12.16 PARENT AS AGENT FOR BORROWERS. Each Borrower hereby
irrevocably appoints Parent as the borrowing agent and attorney-in-fact for the
Borrowers (i) to provide the Agents with all notices with respect to Loans
obtained for the benefit of any Borrower and all other notices and instructions
under this Agreement and (ii) to take such action as the Parent deems
appropriate on its behalf to obtain Loans 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 the
Borrowers in a combined fashion, as more fully set forth herein, is done solely
as an accommodation to the Borrowers in order to utilize the collective
borrowing powers of the Borrowers in the most efficient and economical manner
and at their request, and that neither the Agents nor the Lenders shall incur
liability to the
-99-
Borrowers as a result thereof. Each of the Borrowers 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 Agents and the Lenders to do so, and in consideration thereof, each
of the Borrowers hereby jointly and severally agrees to indemnify the
Indemnitees and hold the Indemnitees harmless against any and all liability,
expense, loss or claim of damage or injury, made against such Indemnitee by any
of the Borrowers or by any third party whosoever, arising from or incurred by
reason of (a) the handling of the Loan Account and Collateral of the Borrowers
as herein provided, (b) the Agents and the Lenders relying on any instructions
of the Parent, or (c) any other action taken by the Agents or any Lender
hereunder or under the other Loan Documents.
SECTION 12.17 JOINT AND SEVERAL. The obligations of the Loan Parties
hereunder are joint and several. The Agents may, in their sole and absolute
discretion, enforce the provisions hereof against one or more of the Loan
Parties and shall not be required to proceed against all of the Loan Parties
jointly or seek payment from the Loan Parties ratably. In addition, the
Collateral Agent may, in its sole and absolute discretion, select the Collateral
of one or more of the Loan Parties for sale or application to the Obligations,
without regard to the ownership of such Collateral, and shall not be required to
make such selection ratably from the Collateral owned by any Loan Parties. The
release or discharge of any Loan Party by the Collateral Agent shall not release
or discharge any other Loan Party from the obligations of such Person hereunder.
SECTION 12.18 RECORDS. The unpaid principal of and interest on the Notes,
the interest rate or rates applicable to such unpaid principal and interest, the
duration of such applicability, the Commitments, and the accrued and unpaid fees
payable pursuant to Section 2.06 hereof, including, without limitation, the
Closing Fee, Loan Servicing Fee, the Anniversary Fee, the Unused Line Fee, the
Letter of Credit Fee and the Field Examination Fees, shall at all times be
ascertained from the records of the Agents, which shall be conclusive and
binding absent manifest error.
SECTION 12.19 BINDING EFFECT. This Agreement shall become effective when it
shall have been executed by the Borrowers, the Guarantors, each Agent and each
Lender and when the conditions precedent set forth in Section 5.01 hereof have
been satisfied or waived in writing by the Agents, and thereafter shall be
binding upon and inure to the benefit of the Borrowers, the Guarantors, each
Agent and each Lender, and their respective successors and assigns, except that
neither the Borrowers nor any other Loan Party shall have the right to assign
its rights hereunder or any interest herein without the prior written consent of
each Lender, and any assignment by any Lender shall be governed by Section 12.07
hereof.
SECTION 12.20 CONFIDENTIALITY. Each Agent and each Lender agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with its customary procedures for handling confidential information
of this nature and in accordance with safe and sound practices of comparable
commercial finance companies, any non-public information supplied to it by the
Loan Parties pursuant to this Agreement or the other Loan Documents which is
identified by the Loan Parties as being confidential at the time the same is
delivered to such Person (and which at
-100-
the time is not, and does not thereafter become, publicly available or available
to such Person from another source not known to be subject to a confidentiality
obligation to such Person not to disclose such information), PROVIDED that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or judicial process, (ii) to
counsel for any Agent or any Lender, (iii) to examiners, auditors, accountants
or Securitization Parties, (iv) in connection with any litigation to which any
Agent or any Lender is a party or (v) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first agrees, in writing, to be bound by
confidentiality provisions similar in substance to this Section 12.20. Each
Agent and each Lender agrees that, upon receipt of a request or identification
of the requirement for disclosure pursuant to clause (iv) hereof, it will make
reasonable efforts to keep the Loan Parties informed of such request or
identification; PROVIDED that the each Loan Party acknowledges that each Agent
and each Lender may make disclosure as required or requested by any Governmental
Authority or representative thereof and that each Agent and each Lender may be
subject to review by Securitization Parties or other regulatory agencies and may
be required to provide to, or otherwise make available for review by, the
representatives of such parties or agencies any such non-public information.
SECTION 12.21 INTEREST. It is the intention of the parties hereto that the
Agents and each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby or by any other Loan
Document would be usurious as to the Agents or any Lender under laws applicable
to it (including the laws of the United States of America and the State of New
York or any other jurisdiction whose laws may be mandatorily applicable to the
Agents or such Lender notwithstanding the other provisions of this Agreement),
then, in that event, notwithstanding anything to the contrary in this Agreement
or any other Loan Document or any agreement entered into in connection with or
as security for the Obligations, it is agreed as follows: (i) the aggregate of
all consideration which constitutes interest under law applicable to the Agents
or any Lender that is contracted for, taken, reserved, charged or received by
the Agents or such Lender under this Agreement or any other Loan Document or
agreements or otherwise in connection with the Obligations shall under no
circumstances exceed the maximum amount allowed by such applicable law, any
excess shall be canceled automatically and if theretofore paid shall be credited
by the Agents or such Lender on the principal amount of the Obligations (or, to
the extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by the Agents or such Lender, as applicable,
to the Borrowers); and (ii) in the event that the maturity of the Obligations is
accelerated by reason of any Event of Default under this Agreement or otherwise,
or in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to the Agents or any Lender may
never include more than the maximum amount allowed by such applicable law, and
excess interest, if any, provided for in this Agreement or otherwise shall be
canceled automatically by the Agents or such Lender, as applicable, as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by the Agents or such Lender, as applicable, on the principal amount of
the Obligations (or, to the extent that the principal amount of the Obligations
shall have been or would thereby be paid in full, refunded by the Agents or such
Lender to the Borrowers). All sums paid or agreed to be paid to the Agents or
any Lender for the use, forbearance or detention of sums due hereunder shall, to
the extent permitted by law applicable to the Agents or such Lender, be
amortized, prorated, allocated and
-101-
spread throughout the full term of the Loans until payment in full so that the
rate or amount of interest on account of any Loans hereunder does not exceed the
maximum amount allowed by such applicable law. If at anytime and from time to
time (i) the amount of interest payable to the Agents or any Lender on any date
shall be computed at the Highest Lawful Rate applicable to the Agents or such
Lender pursuant to this Section 12.21 and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to the
Agents or such Lender would be less than the amount of interest payable to the
Agents or such Lender computed at the Highest Lawful Rate applicable to the
Agents or such Lender, then the amount of interest payable to the Agents or such
Lender in respect of such subsequent interest computation period shall continue
to be computed at the Highest Lawful Rate applicable to the Agents or such
Lender until the total amount of interest payable to the Agents or such Lender
shall equal the total amount of interest which would have been payable to the
Agents or such Lender if the total amount of interest had been computed without
giving effect to this Section 12.21.
-102-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWERS:
HIGH VOLTAGE ENGINEERING CORPORATION
By:
------------------------------------------
Name:
Title:
MAXIMA TECHNOLOGIES, INC.
By:
------------------------------------------
Name:
Title:
XXXXXXX XXXXXX INSTRUMENT CORPORATION
By:
------------------------------------------
Name:
Title:
ROBICON CORPORATION
By:
------------------------------------------
Name:
Title:
PHYSICAL ELECTRONICS, INC.
By:
------------------------------------------
Name:
Title:
VIVIRAD - HIGH VOLTAGE CORPORATION
By:
------------------------------------------
Name:
Title:
XXXXXXX XXXXX & ASSOCIATES
By:
------------------------------------------
Name:
Title:
GUARANTORS:
HIVEC HOLDINGS, INC.
By:
------------------------------------------
Name:
Title:
COLLATERAL AGENT, ADMINISTRATIVE AGENT AND LENDER:
-------------------------------------------------
ABLECO FINANCE LLC
By:
------------------------------------------
Name:
Title:
-104-
SCHEDULE 1.01(A)
LENDERS AND LENDERS' COMMITMENTS
Lender Revolving Credit Commitment
---------------------------------- -------------------------------------
Ableco Finance LLC $25,000,000
Total: $25,000,000
AMENDED AND RESTATED
FINANCING AGREEMENT
Dated as of June 19, 2001
by and among
HIGH VOLTAGE ENGINEERING CORPORATION,
MAXIMA TECHNOLOGIES, INC.,
XXXXXXX XXXXXX INSTRUMENT CORPORATION,
ROBICON CORPORATION,
VIVIRAD - HIGH VOLTAGE CORPORATION,
PHYSICAL ELECTRONICS, INC.,
and
XXXXXXX XXXXX & ASSOCIATES
as Borrowers,
CERTAIN SUBSIDIARIES OF THE BORROWERS PARTY HERETO,
as Guarantors,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
as Lenders,
ABLECO FINANCE LLC,
as Collateral Agent,
and
ABLECO FINANCE LLC,
as Administrative Agent
TABLE OF CONTENTS
PAGE
Article I DEFINITIONS; CERTAIN TERMS................................................................2
Section 1.01 Definitions..............................................................2
Section 1.02 Terms Generally.........................................................27
Section 1.03 Accounting and Other Terms..............................................28
Section 1.04 Time References.........................................................28
Article II THE LOANS...............................................................................28
Section 2.01 Commitments.............................................................28
Section 2.02 Making the Loans........................................................29
Section 2.03 Revolving Credit Note; Repayment of Loans...............................32
Section 2.04 Interest................................................................32
Section 2.05 Reduction of Revolving Credit Commitment; Prepayment of Loans...........33
Section 2.06 Fees....................................................................35
Section 2.07 Securitization..........................................................36
Section 2.08 Taxes...................................................................36
Article III LETTERS OF CREDIT......................................................................38
Section 3.01 Letter of Credit Guaranty...............................................38
Section 3.02 Participations..........................................................40
Section 3.03 Letters of Credit.......................................................41
Article IV FEES, PAYMENTS AND OTHER COMPENSATION...................................................42
Section 4.01 Audit and Collateral Monitoring Fees....................................42
Section 4.02 Payments; Computations and Statements...................................42
Section 4.03 Sharing of Payments, Etc................................................43
Section 4.04 Apportionment of Payments...............................................43
Section 4.05 Increased Costs and Reduced Return......................................44
Section 4.06 Joint and Several Liability of the Borrowers............................45
Article V CONDITIONS TO LOANS......................................................................46
Section 5.01 Conditions Precedent to Effectiveness...................................46
Section 5.02 Conditions Precedent to all Loans and Letters of Credit.................51
Article VI REPRESENTATIONS AND WARRANTIES..........................................................52
Section 6.01 Representations and Warranties..........................................52
Article VII COVENANTS OF THE BORROWER..............................................................59
Section 7.01 Affirmative Covenants...................................................59
Section 7.02 Negative Covenants......................................................68
Section 7.03 Financial Covenants.....................................................73
Article VIII MANAGEMENT, COLLECTION AND STATUS OF ACCOUNTS RECEIVABLE AND OTHER COLLATERAL........76
Section 8.01 Collection of Accounts Receivable; Management of Collateral.............76
Section 8.02 Accounts Receivable Documentation.......................................78
Section 8.03 Status of Accounts Receivable and Other Collateral......................79
Section 8.04 Collateral Custodian....................................................80
-ii-
Article IX EVENTS OF DEFAULT.......................................................................80
Section 9.01 Events of Default.......................................................80
Article X AGENTS 83
Section 10.01 Appointment.............................................................83
Section 10.02 Nature of Duties........................................................84
Section 10.03 Rights, Exculpation, Etc................................................84
Section 10.04 Reliance................................................................85
Section 10.05 Indemnification.........................................................85
Section 10.06 Agents Individually.....................................................85
Section 10.07 Successor Agent.........................................................86
Section 10.08 Collateral Matters......................................................86
Section 10.09 Collateral Sub-Agents...................................................88
Article XI GUARANTY................................................................................88
Section 11.01 Guaranty; Limitation of Liability.......................................88
Section 11.02 Guaranty Absolute.......................................................88
Section 11.03 Waiver..................................................................89
Section 11.04 Continuing Guaranty; Assignments........................................89
Section 11.05 Subrogation.............................................................89
Article XII MISCELLANEOUS..........................................................................90
Section 12.01 Notices, Etc............................................................90
Section 12.02 Amendments, Etc.........................................................92
Section 12.03 No Waiver; Remedies, Etc................................................92
Section 12.04 Expenses; Taxes; Attorneys' Fees........................................93
Section 12.05 Right of Set-off........................................................94
Section 12.06 Severability............................................................94
Section 12.07 Assignments and Participations..........................................94
Section 12.08 Counterparts............................................................97
Section 12.09 GOVERNING LAW...........................................................97
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE...................97
Section 12.11 WAIVER OF JURY TRIAL, ETC...............................................98
Section 12.12 Consent by the Agents and Lenders.......................................98
Section 12.13 No Party Deemed Drafter.................................................98
Section 12.14 Reinstatement; Certain Payments.........................................98
Section 12.15 Indemnification.........................................................99
Section 12.16 Parent as Agent for Borrowers...........................................99
Section 12.17 Joint and Several......................................................100
Section 12.18 Records................................................................100
Section 12.19 Binding Effect.........................................................100
Section 12.20 Confidentiality........................................................100
Section 12.21 Interest...............................................................101
-iii-
Schedule 1.01(A) Lenders and Lenders' Commitments
Schedule 1.01(B) Exclusions From Consolidated EBITDA
Schedule 1.01(C) Permitted Holders
Schedule 1.01(D) Fiscal Months
Schedule 1.01(E) Certain Material Contracts
Schedule 6.01(e) Subsidiaries
Schedule 6.01(f) Litigation Schedule 6.01(i) ERISA
Schedule 6.01(o) Real Property
Schedule 6.01(q)(i) Existing Letters of Credit
Schedule 6.01(q)(ii) Fleet Letters of Credit
Schedule 6.01(r) Operating Leases
Schedule 6.01(s) Environmental Matters
Schedule 6.01(t) Insurance
Schedule 6.01(w) Bank Accounts
Schedule 6.01(x) Intellectual Property
Schedule 6.01(y) Material Contracts
Schedule 6.01(ee) Inventory Locations; Place of Business; Chief Executive
Office
Schedule 6.01(ff) Tradenames
Schedule 7.01(l) Collateral Locations
Schedule 7.01(m) Specified Locations and Release Amounts
Schedule 7.02(a) Existing Liens
Schedule 7.02(b) Existing Indebtedness
Schedule 7.02(e) Existing Investments
Schedule 7.02(j) Existing Affiliate Transactions
Schedule 7.02(k) Existing Limitations on Dividends and Other Payment
Restrictions
Schedule 8.01 Lockboxes
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Guaranty
Exhibit C Form of Amendatory Agreement
Exhibit D-1 Form of Notice of Borrowing (Initial Loans)
Exhibit D-2 Form of Notice of Borrowing
Exhibit E Form of Borrowing Base Certificate
Exhibit F Form of Opinion of Counsel
Exhibit G Form of Letter of Credit Application
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Amendment No. 1 to Contribution Agreement
-iv-
