FINANCING AGREEMENT
DATED AS OF NOVEMBER 21, 2002
BY AND AMONG
COLUMBUS XXXXXXXX CORPORATION,
AS BORROWER,
EACH SUBSIDIARY OF THE BORROWER LISTED AS A GUARANTOR
ON THE SIGNATURE PAGES HERETO,
AS GUARANTORS,
THE FINANCIAL INSTITUTIONS FROM TIME TO TIME PARTY HERETO,
AS LENDERS,
AND
REGIMENT CAPITAL III, L.P.,
AS AGENT
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS; CERTAIN TERMS......................................1
Section 1.01 Definitions................................................1
Section 1.02 Terms Generally...........................................24
Section 1.03 Accounting and Other Terms................................25
Section 1.04 Time References...........................................25
ARTICLE II THE LOANS......................................................25
Section 2.01 Term Loan Commitments.....................................25
Section 2.02 Making the Term Loan......................................26
Section 2.03 Repayment of the Term Loan; Evidence of Debt..............26
Section 2.04 Interest..................................................27
Section 2.05 Reduction of the Term Loan Commitment; Prepayment of the
Term Loan.................................................28
Section 2.06 Fees......................................................31
Section 2.07 Securitization............................................32
Section 2.08 Taxes.....................................................32
ARTICLE III THE COLLATERAL.................................................34
Section 3.01 Grant of Security Interest................................34
Section 3.02 Special Representations, Warranties and Covenants
of the Loan Parties.......................................35
Section 3.03 Fixtures, etc.............................................42
Section 3.04 Right of Agent to Dispose of Collateral, etc..............42
Section 3.05 Right of Agent to Use and Operate Collateral, etc.........42
Section 3.06 Proceeds of Collateral....................................43
Section 3.07 Relation to Collateral Documents..........................43
Section 3.08 Marshalling...............................................44
ARTICLE IV FEES, PAYMENTS AND OTHER COMPENSATION..........................45
Section 4.01 Audit and Collateral Monitoring Fees......................45
Section 4.02 Payments; Computations and Statements.....................45
Section 4.03 Sharing of Payments, Etc..................................46
Section 4.04 Apportionment of Payments.................................46
Section 4.05 Increased Costs and Reduced Return........................47
ARTICLE V CONDITIONS TO THE TERM LOAN....................................48
Section 5.01 Conditions Precedent to Effectiveness.....................48
ARTICLE VI REPRESENTATIONS AND WARRANTIES.................................53
Section 6.01 Representations and Warranties............................53
ARTICLE VII COVENANTS OF THE LOAN PARTIES..................................63
Section 7.01 Affirmative Covenants.....................................63
Section 7.02 Negative Covenants........................................72
ARTICLE VIII MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER
COLLATERAL.....................................................81
Section 8.01 Management of Collateral..................................81
Section 8.02 Accounts Receivable Documentation.........................83
Section 8.03 Status of Accounts Receivable and Other Collateral........83
Section 8.04 Collateral Custodian......................................84
Section 8.05 Compliance with Working Capital Loan Agreement............84
ARTICLE IX EVENTS OF DEFAULT..............................................84
Section 9.01 Events of Default.........................................84
ARTICLE X AGENT..........................................................88
Section 10.01 Appointment...............................................88
Section 10.02 Nature of Duties..........................................89
Section 10.03 Rights, Exculpation, Etc..................................89
Section 10.04 Reliance..................................................90
Section 10.05 Indemnification...........................................90
Section 10.06 Agent Individually........................................90
Section 10.07 Successor Agent...........................................91
Section 10.08 Collateral Matters........................................91
Section 10.09 Agency for Perfection.....................................92
ARTICLE XI GUARANTY.......................................................93
Section 11.01 Guaranty..................................................93
Section 11.02 Guaranty Absolute.........................................93
Section 11.03 Waiver....................................................94
Section 11.04 Continuing Guaranty; Assignments..........................94
Section 11.05 Subrogation...............................................94
ARTICLE XII MISCELLANEOUS..................................................95
Section 12.01 Notices, Etc..............................................95
Section 12.02 Amendments, Etc...........................................96
Section 12.03 No Waiver; Remedies, Etc..................................97
Section 12.04 Expenses; Taxes; Attorneys' Fees..........................97
Section 12.05 Right of Set-off..........................................98
Section 12.06 Severability..............................................98
Section 12.07 Assignments and Participations............................98
Section 12.08 Counterparts.............................................101
Section 12.09 GOVERNING LAW............................................101
Section 12.10 CONSENT TO JURISDICTION; SERVICE OF PROCESS
AND VENUE................................................101
Section 12.11 WAIVER OF JURY TRIAL, ETC................................102
Section 12.12 Consent by the Agent and Lenders.........................102
Section 12.13 No Party Deemed Drafter..................................103
Section 12.14 Reinstatement; Certain Payments..........................103
Section 12.15 Indemnification..........................................103
Section 12.16 Records..................................................104
Section 12.17 Binding Effect...........................................104
Section 12.18 Interest.................................................104
Section 12.19 Confidentiality..........................................106
Section 12.20 Integration..............................................106
FINANCING AGREEMENT
Financing Agreement, dated as of November 21, 2002, by and among
Columbus XxXxxxxx Corporation, a New York corporation (the "BORROWER"), each
subsidiary of the Borrower listed as a "GUARANTOR" on the signature pages hereto
(each a "Guarantor" and collectively, the "GUARANTORS"), the financial
institutions from time to time party hereto (each a "LENDER" and collectively,
the "LENDERS"), and Regiment Capital III, L.P., a Delaware limited partnership,
as agent for the Lenders (in such capacity, the "AGENT").
RECITALS
The Borrower has asked the Lenders to extend credit to the Borrower
consisting of a term loan in the aggregate principal amount of $60,000,000. The
proceeds of the term loan shall be used to partially refinance the Existing
Indebtedness (as hereinafter defined) under the Existing Credit Facility (as
hereinafter defined), thereby constituting a partial replacement of the Existing
Credit Facility, and to pay fees and expenses related to this Agreement. The
Lenders are severally, and not jointly, willing to extend such credit to the
Borrower 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 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:
"ACCOUNT DEBTOR" means each debtor, customer or obligor in any way
obligated on or in connection with any Account Receivable.
"ACCOUNT RECEIVABLE" means, with respect to any Person, any and all
rights of such Person to payment for goods sold and/or 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.
"ACCUMULATED OTHER COMPREHENSIVE GAINS (OR LOSSES)" means "accumulated
other comprehensive gains (or losses)" as defined under GAAP.
"ACTION" has the meaning specified therefor in Section 12.12.
"ADDITIONAL MORTGAGES" has the meaning specified therefor in Section
7.01(m).
"ADDITIONAL MORTGAGED PROPERTY" means any Real Property Asset that is
now owned or leased, or hereinafter acquired or leased, by the Loan Parties,
which the Agent determines to acquire a Mortgage on following the Effective
Date.
"AFFILIATE" means, with respect to a specified Person, another Person
that Controls or is Controlled by or is under common Control with the Person
specified. Notwithstanding anything herein to the contrary, in no event shall
any Agent or any Lender be considered an "Affiliate" of any Loan Party.
"AGENT" has the meaning specified therefor in the preamble hereto.
"AGENT ADVANCES" has the meaning specified therefor in Section
10.08(a).
"AGENT'S ACCOUNT" means an account at a bank designated by the Agent
from time to time as the account into which the Loan Parties shall make all
payments to the Agent for the benefit of the Agent and the Lenders under this
Agreement and the other Loan Documents.
"AGREEMENT" means this 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.
"ANNIVERSARY FEE" has the meaning specified therefor in Section
2.06(c).
"ANNIVERSARY FEE PERCENTAGE" means a percentage equal to (a) on the
first anniversary of the Effective Date, 1.00%, (b) on the second anniversary of
the Effective Date, 1.25%, (c) on the third anniversary of the Effective Date,
1.50%, and (d) on the fourth anniversary of the Effective Date, 1.75%.
"APPLICABLE MARGIN" means, as of any date of determination, a
percentage equal to (a) during the period of time from and after the Effective
Date up to the date that is immediately prior to the first anniversary of the
Effective Date, 0.00%, (b) during the period of time from and including the date
that is the first anniversary of the Effective Date up to the date that is
immediately prior to the second anniversary of the Effective Date, 0.50%, (c)
during the period of time from and including the date that is the second
anniversary of the Effective Date up to the date that is immediately prior to
the third anniversary of the Effective Date, 1.00%, and (d) during the period of
time from and including the date that is the third anniversary of the Effective
Date up to and including the Final Maturity Date, 1.50%.
"APPRAISED VALUE" means the fair market value of any Real Property
Assets determined by the most recent appraisal performed by a qualified
independent appraiser, in form and substance acceptable to the Working Capital
Agent.
"APPROVED RESTRUCTURING CHARGES" means cash restructuring charges
incurred by the Borrower and/or its Subsidiaries and approved by the Agent up to
an amount not to exceed $4,500,000 in the aggregate from the Effective Date to
the second anniversary of the Effective Date (of which no more than $2,300,000
shall be paid in cash by the Borrower and/or its Subsidiaries from September 30,
2002 through March 31, 2003); PROVIDED, HOWEVER, that no more than $2,000,000
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in cash restructuring charges for any one facility, plant or other Property
shall constitute Approved Restructuring Charges.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered
into by an assigning Lender and an assignee, and accepted by the Agent, in
accordance with Section 12.07 hereof and substantially in the form of Exhibit J
hereto or such other form acceptable to the Agent.
"AUDUBON EUROPE" means Audubon Europe S.a.r.l., a company duly founded
and validly existing under the laws of Luxembourg.
"AUTHORIZED OFFICER" means, with respect to any Person, the chief
executive officer, chief financial officer, president or executive vice
president of such Person.
"BANK" means JPMorgan Chase Bank, its successors or any other bank
designated by the Agent to the Borrower from time to time.
"BANKRUPTCY CODE" means the United States Bankruptcy Code (11 X.X.X.xx.
101, ET SEQ.), as amended, and any successor statute.
"BASE INTEREST RATE" means the greater of (i) 11.50% per annum and (ii)
the Reference Rate plus 5.00% per annum.
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States.
"BOARD OF DIRECTORS" means, with respect to any Person, the board of
directors (or comparable managers) of such Person or any committee thereof duly
authorized to act on behalf of the board.
"BORROWER" has the meaning specified therefor in the preamble hereto.
"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.
"CANADIAN BORROWERS" means, collectively, Larco Industrial Services,
Ltd., a business corporation organized under the laws of Canada, and Columbus
XxXxxxxx Limited, a business corporation organized under the laws of Canada.
"CANADIAN AGENT" means Regiment Capital III, L.P., in its capacity as
agent for the Canadian Lenders.
"CANADIAN FINANCING AGREEMENT" means the Financing Agreement by and
among the Canadian Borrowers, the Canadian Lenders and the Canadian Agent.
"CANADIAN LENDERS" means the financial institutions from time to time
party to the Canadian Financing Agreement.
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"CANADIAN LOAN DOCUMENTS" means, collectively, the Canadian Financing
Agreement and each other "Loan Document" as defined under the Canadian Financing
Agreement.
"CANADIAN TERM LOAN" means the term loan made by the Canadian Lenders
to the Canadian Borrowers on the Effective Date pursuant to the Canadian
Financing Agreement in the aggregate principal amount of $10,000,000.
"CAPITAL EXPENDITURES" means, for any period, the sum for the Borrower
and its consolidated Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP) of the aggregate amount of expenditures
made or liabilities incurred during such period (including the aggregate amount
of Capital Lease Obligations incurred during such period) to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs) computed in accordance with GAAP;
PROVIDED that such term shall not include any such expenditures in connection
with any replacement or repair of Property affected by a Casualty Event.
"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) of any central bank or
Governmental Authority (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 any
Lender or any Person controlling any Lender or the manner in which any Lender or
any Person controlling any Lender allocates capital to any of its contingent
liabilities (including letters of credit), advances, acceptances, commitments,
assets or liabilities.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations 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, 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 MANAGEMENT BANK" means Fleet National Bank.
"CASUALTY EVENT" means, with respect to any Property of any Person, any
loss of or damage to, or any condemnation or other taking of, such Property for
which such Person or any of its Subsidiaries receives insurance proceeds, or
proceeds of a condemnation award or other compensation.
"CHANGE OF CONTROL" means each occurrence of any of the following:
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(a) the acquisition, directly or indirectly, by any person or group
(within the meaning of Section 13(d)(3) of the Exchange Act) of beneficial
ownership of more than 25% of the aggregate outstanding voting power of the
Capital Stock of the Borrower;
(b) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of the Borrower
(together with any new directors whose election by such Board of Directors or
whose nomination for election by the shareholders of the Borrower was approved
by a vote of at least a majority the directors of the Borrower 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 Borrower;
(c) the Borrower shall cease to have beneficial ownership (as defined
in Rule 13d-3 under the Exchange Act) of 100% of the aggregate voting power of
the Capital Stock of each other Loan Party, free and clear of all Liens (other
than any Liens granted hereunder and Permitted Liens); or
(d) (i) any Loan Party consolidates with or merges into another entity
or conveys, transfers or leases all or substantially all of its properties and
assets to another Person other than as permitted under Section 7.02(d)(iii), or
(ii) any entity consolidates with or merges into any Loan Party in a transaction
pursuant to which the outstanding voting Capital 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 (ii) in which
either (A) in the case of any such transaction involving the Borrower, no person
or group (within the meaning of Section 13(d)(3) of the Exchange Act) has,
directly or indirectly, acquired beneficial ownership of more than 25% of the
aggregate outstanding voting Capital Stock of the Borrower or (B) in the case of
any such transaction involving a Loan Party other than the Borrower, the
Borrower has beneficial ownership of 100% of the aggregate voting power of all
Capital Stock of the resulting, surviving or transferee entity; or
(e) a "Change of Control" shall occur under the Senior Subordinated
Note Indenture.
"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 DOCUMENT" means any Patent Agreement, any Trademark
Agreement, any Copyright Mortgage, any Pledge Agreement (including, without
limitation, any pledge and security agreement delivered pursuant to Section
5.01(d), 7.01(o) or 7.01(r)), any Mortgage, and any other instruments and
documents, including without limitation Uniform Commercial Code financing
statements, and the like, required to be executed or delivered pursuant to this
Agreement or any Collateral Document.
"COMPLIANCE CERTIFICATE" means a certificate signed by a Designated
Financial Officer, substantially in the form of Exhibit H, (a) certifying as to
whether a Default has occurred and, if a Default has occurred, specifying the
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details thereof and any action taken or proposed to be taken with respect
thereto, (b) setting forth reasonably detailed calculations demonstrating
compliance with Section 7.02(j), and (c) stating whether any change in GAAP or
in the application thereof has occurred since the date of the audited financial
statements referred to in Section 6.01(d) and, if any such change has occurred,
specifying the effect of such change on the financial statements accompanying
such certificate.
"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 product 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 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.
"CONTROL" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto. A Person who
owns or holds capital stock, beneficial interests or other securities
representing five percent (5%) or more of the Total Voting Power of another
Person shall be deemed, for purposes of this Agreement, to "control" such other
Person.
"COPYRIGHT MORTGAGE" means a Memorandum of Grant of Security Interest
in Copyrights made by a Loan Party in favor of the Agent, substantially in the
form of Exhibit E.
"COPYRIGHTS" means all copyrights, whether statutory or common law,
owned by or assigned to the Loan Parties, and all exclusive and nonexclusive
licenses to the Loan Parties from third parties or rights to use copyrights
owned by such third parties, including, without limitation, the registrations,
applications and licenses listed on Schedule 6.01(e) hereto, along with any and
all (a) renewals and extensions thereof, (b) income, royalties, damages, claims
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and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages and payments for past, present or future
infringements thereof, (c) rights to xxx for past, present and future
infringements thereof, and (d) foreign copyrights and any other rights
corresponding thereto throughout the world.
"DEFAULT" means an event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default.
"DESIGNATED FINANCIAL OFFICER" means an individual holding one or more
of the following offices with the Borrower or otherwise having executive
responsibilities for financial matters and listed in Schedule 1.01(B) hereto:
chief financial officer, principal accounting officer, treasurer, assistant
treasurer or controller.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in Schedule 6.01(f) hereto.
"DISPOSITION" means any transaction, or series of related transactions,
pursuant to which any Person 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 any sales of Inventory in the ordinary course of
business on ordinary business terms.
"DOLLAR," "DOLLARS" and the symbol "$" each means lawful money of the
United States of America.
"DOMESTIC SUBSIDIARY" means, at any time, any Subsidiary of the
Borrower organized under the laws of the United States of America or any State
thereof, including any Subsidiary of the Borrower listed in Schedule 1.01(C)
hereto.
"EBITDA" means, for any period and without duplication, (a) the net
income of the Borrower and its Subsidiaries (determined on a consolidated basis
in accordance with GAAP) for such period, PLUS (b) to the extent deducted in
calculating net income without duplication (i) income taxes accrued during such
period, (ii) Interest Expense during such period, (iii) depreciation,
amortization and other Non-Cash Charges accrued for such period, and (iv)
Approved Restructuring Charges incurred during such period, MINUS (c) to the
extent such items were added in calculating net income (i) extraordinary gains
during such period, (ii) gains from any Casualty Event, Disposition, or
discontinued operation during such period, and (iii) interest and other income
(excluding interest and other income related to CM Insurance Company, Inc.)
during such period.
"EFFECTIVE DATE" means the date, on or before November 30, 2002, on
which all of the conditions precedent set forth in Section 5.01 are satisfied or
waived and the Term Loan is made.
"ENVIRONMENTAL ACTIONS" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding, judgment, letter or other communication from any Person or
Governmental Authority involving violations of Environmental Laws or Releases of
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Hazardous Materials (i) from any assets, properties or businesses owned or
operated by any Loan Party or any of its Subsidiaries or any predecessor in
interest; (ii) from adjoining properties or businesses; or (iii) onto 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 (42 X.X.X.xx. 9601, ET SEQ. ("CERCLA")), 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.), the
Occupational Safety and Health Act (29 X.X.X.xx. 651 ET seq.), and the Superfund
Amendments and Reauthorization Act of 1986, 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, ordinance, rule, regulation, order, judgment,
decree, permit, license or other binding determination of any Governmental
Authority imposing liability or establishing standards of conduct for protection
of the environment or other government restrictions relating to the protection
of the environment or the Release, deposit or migration of any Hazardous
Materials into the environment.
"ENVIRONMENTAL LIABILITIES" 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 claim or demand by any Governmental
Authority or any third party, and which relate to any environmental condition or
a Release of Hazardous Materials from or onto (i) any property presently or
formerly owned by any Loan Party or any of its Subsidiaries or (ii) any facility
which received Hazardous Materials generated by any Loan Party or any of its
Subsidiaries.
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental
Authority for Environmental Liabilities.
"EQUITY RIGHTS" means, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including any stockholders' or voting trust agreements) for the issuance or
sale of, or securities convertible into, any additional shares of Capital Stock
of any class, or partnership or other ownership interests of any type in, such
Person.
"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 in effect from time to time. References to sections
of ERISA shall be construed also to refer to any successor sections.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Loan Parties, is treated as a single
employer within the meaning of Section 414(b), (c), (m) or (o) of the Internal
Revenue Code. Notwithstanding the foregoing, for purposes of any liability
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related to a Multiemployer Plan under Title IV of ERISA, the term "ERISA
Affiliate" means any trade or business that, together with the Loan Parties, is
treated as a single employer within the meaning of Section 4001(b) of ERISA.
"ERISA EVENT" means (a) a "reportable event", as defined in Section
4043 of ERISA or the regulations issued thereunder for which the notice
requirement has not been waived with respect to any Pension Plan, (b) the
existence with respect to any Pension Plan of an "accumulated funding
deficiency" (as defined in Section 412 of the Internal Revenue Code or Section
302 of ERISA), whether or not waived, (c) the filing pursuant to Section 412(d)
of the Internal Revenue Code or Section 303(d) of ERISA of an application for a
waiver of the minimum funding standard with respect to any Pension Plan, (d) the
incurrence by any Loan Party or any ERISA Affiliate of any liability under Title
IV of ERISA with respect to the termination of any Pension Plan, (e) the receipt
by any Loan Party or any ERISA Affiliate from the PBGC or plan administrator of
any notice relating to an intention to terminate any Pension Plan or Pension
Plans or to appoint a trustee to administer any Pension Plan, or (f) the receipt
by any Loan Party or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from any Loan Party or any ERISA Affiliate of any notice of
Withdrawal Liability or a determination that a Multiemployer Plan is, or is
expected to be, insolvent or in reorganization, within the meaning of Title IV
of ERISA.
"EVENT OF DEFAULT" means any of the events set forth in Section 9.01.
"EXCESS CASH FLOW" means, with respect to any Person for any period,
(i) Net Income of such Person and its Subsidiaries for such period, PLUS (ii)
all non-cash items of such Person and its Subsidiaries deducted in determining
Net Income for such period, LESS (iii) the sum of (A) all non-cash items of such
Person and its Subsidiaries added to the calculation of Net Income for such
period, (B) all scheduled cash principal payments on the Term Loan and the
Canadian Term Loan made during such period, and all scheduled cash principal
payments on other Indebtedness of such Person or any of its Subsidiaries during
such period (but, in the case of revolving loans, only to the extent that the
commitments with respect thereto are permanently reduced by the amount of such
payments) to the extent such other Indebtedness is permitted to be incurred, and
such payments are permitted to be made, under this Agreement, (C) the cash
portion of Capital Expenditures made by such Person and its Subsidiaries during
such period to the extent permitted to be made under this Agreement and (D) all
optional prepayments of principal on the Term Loan pursuant to Section 2.05(b)
made to the Agent and the Lenders during and after the end of such period but on
or prior to the date any Excess Cash Flow payment is required to be made
pursuant to Section 2.05(c)(i) (it being understood that any such payment
deducted pursuant to this clause (D) shall not be deducted from Excess Cash Flow
for any subsequent period).
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING CREDIT FACILITY" means the Credit Agreement, dated as of
March 31, 1998, among the Borrower, the lenders named therein, and Fleet
National Bank, as Agent.
"EXISTING INDEBTEDNESS" means (i) Indebtedness of the Loan Parties
existing as of the Effective Date which is being refinanced in full with the
proceeds of the Term Loan and the Working Capital Loans on the Effective Date
- 9 -
including Indebtedness under the Existing Credit Facility and (ii) Indebtedness
of the Loan Parties existing as of the Effective Date which is permitted to
remain outstanding after the Effective Date under Section 7.02(a) and is listed
on Schedule 7.02(a) hereto.
"EXISTING LENDERS" means the lenders party to the Existing Credit
Facility.
"EXTRAORDINARY RECEIPTS" means any cash received by the Borrower or any
of its Subsidiaries not in the ordinary course of business (and not consisting
of proceeds described in Section 2.05(c)(ii) or (iii) hereof), including,
without limitation, (i) foreign, United States, state or local tax refunds, (ii)
pension plan reversions, (iii) proceeds of insurance, (iv) judgments, proceeds
of settlements or other consideration of any kind in connection with any cause
of action, (v) condemnation awards (and payments in lieu thereof), (vi)
indemnity payments and (vii) any purchase price adjustment received in
connection with any purchase agreement.
"FASB" means Financial Accounting Standards Board.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating interest rate
per annum equal to, for each day during such period, 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 Agent from three
Federal funds brokers of recognized standing selected by it.
"FIELD SURVEY AND AUDIT" means a field survey and audit of the Loan
Parties and an appraisal of the Collateral performed by auditors, examiners
and/or appraisers selected by the Agent, at the sole cost and expense of the
Borrower.
"FINAL MATURITY DATE" means May 21, 2007, or such earlier date on which
the Term Loan shall become due and payable in accordance with the terms of this
Agreement and the other Loan Documents.
"FINANCIAL STATEMENTS" means (i) the audited consolidated balance sheet
of the Borrower and its Subsidiaries for the Fiscal Years ended March 31, 2000,
March 31, 2001 and March 31, 2002, and the related consolidated statement of
operations, shareholders' equity and cash flows for the Fiscal Years then ended,
and (ii) the unaudited consolidated balance sheet of the Borrower and its
Subsidiaries for the 6 months ended September 30, 2002, and the related
consolidated statement of operations, shareholder's equity and cash flows for
the 6 months then ended.
"FISCAL YEAR" means the fiscal year of the Borrower and its
Subsidiaries ending on March 31st of each year.
"FIXED CHARGE COVERAGE RATIO" means, for any Reference Period, the
ratio of (a) (i) EBITDA for such Reference Period MINUS (ii) the aggregate
amount of all Capital Expenditures during such Reference Period MINUS (iii) the
aggregate amount paid, or required to be paid (without duplication), in cash in
respect of the current portion of all income taxes for such Reference Period to
- 10 -
(b) the sum for the Borrower and its Subsidiaries (determined on a consolidated
basis without duplication in accordance with GAAP), of (i) the aggregate amount
of Interest Expense for such Reference Period (net of the sum of (A) the
capitalized interest accrued during such Reference Period in respect of the Term
Loan and the Canadian Term Loan, PLUS (B) the amortization during such Reference
Period of financing costs incurred in connection with this Agreement, the
Canadian Financing Agreement, the Existing Credit Facility, the Working Capital
Loan Agreement and the Senior Subordinated Note Indenture), and (ii) the
aggregate amount of regularly scheduled payments of principal in respect of
Indebtedness for borrowed money (including the principal component of any
payments in respect of Capital Lease Obligations) paid or required to be paid
during such Reference Period.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Borrower organized
under the laws of any jurisdiction other than the United States of America or
any State thereof.
"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 7.02(j) 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 7.02(j) hereof, the Agent and the Borrower 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 Borrower 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 7.02(j) 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.
"GUARANTEED OBLIGATIONS" has the meaning specified therefor in Section
11.01.
"GUARANTOR" means (i) each Subsidiary of the Borrower listed as a
"Guarantor" on the signature pages hereto, and (ii) each other Person which
guarantees, pursuant to Section 7.01(o) or otherwise, all or any part of the
Obligations.
"GUARANTY" means (i) the guaranty of each Guarantor party hereto
contained in ARTICLE XI hereof, and (ii) each guaranty substantially in the form
of Exhibit A, made by any other Guarantor in favor of the Agent for the benefit
of the Lenders pursuant to Section 7.01(o) or otherwise.
"HAZARDOUS MATERIAL" 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
- 11 -
Laws or that is likely to cause immediately, harm to or have an adverse effect
on, the environment or risk to human health or safety, including, without
limitation, any pollutant, contaminant, waste, hazardous waste, toxic substance
or dangerous good which is defined or identified in any Environmental Law and
which is present in the environment in such quantity or state that it
contravenes any Environmental Law; (b) petroleum and its refined products; (c)
polychlorinated biphenyls; (d) any substance exhibiting a hazardous waste
characteristic, including, without limitation, corrosivity, ignitability,
toxicity or reactivity as well as any radioactive or explosive materials; and
(e) any raw materials, building components (including, without limitation,
asbestos-containing materials) and manufactured products containing hazardous
substances listed or classified as such under Environmental Laws.
"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 Agent or any Lender,
the maximum non-usurious 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 Agent 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.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(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 which are not for borrowed money) or other accounts payable
(including accrued expenses and deferred taxes) incurred in the ordinary course
of such Person's business and not outstanding for more than 90 days after the
date such payable was created); (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 reimbursement, payment or other
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 may be limited to repossession or sale
of such property; (v) all Capital 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 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 with respect to any Multiemployer Plan; and (xi)
all obligations referred to in clauses (i) through (x) 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
- 12 -
owned by such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness. The Indebtedness of any 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.
"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, or extensions generally with creditors, or
proceedings seeking reorganization, arrangement, or other similar relief.
"INTERCREDITOR AGREEMENT" means the Lien Subordination and
Intercreditor Agreement, substantially in the form of Exhibit F, by and among
the Borrower, the Agent, the Lenders, the Working Capital Agent and the Working
Capital Lenders.
"INTEREST EXPENSE" means, for any period, the sum, without duplication,
for the Borrower and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of the following: (a) all interest
in respect of Indebtedness accrued or paid during such period (whether or not
actually paid during such period), PLUS (b) the net amounts payable (or MINUS
the net amounts receivable) in respect of Hedging Agreements accrued during such
period (whether or not actually paid or received during such period) excluding
reimbursement of legal fees and other similar transaction costs and excluding
payments required by reason of the early termination of Hedging Agreements in
effect on the date hereof, PLUS (c) all fees, including letter of credit fees
and expenses (but excluding reimbursement of legal fees), incurred hereunder and
under the Canadian Financing Agreement and the Working Capital Loan Agreement
during such period.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended (or any successor statute thereto) and the regulations thereunder.
"INVENTORY" means, with respect to any Person, all goods and
merchandise of such Person, 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, 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.
"INVESTMENT" means, for any Person: (a) the acquisition (whether for
cash, Property, services or securities or otherwise) of Capital Stock, bonds,
notes, debentures, partnership, limited liability company or other ownership
interests or other securities of any other Person or any agreement to make any
such acquisition (including, without limitation, any "short sale" or any sale of
any securities at a time when such securities are not owned by the Person
entering into such short sale); (b) the making of any deposit with, or advance,
loan or other extension of credit to, any other Person (including the purchase
of Property from another Person subject to an understanding or agreement,
- 13 -
contingent or otherwise, to resell such Property to such Person, but excluding
any such advance, loan or extension of credit representing the purchase price of
Inventory or supplies sold by such Person in the ordinary course of business,
PROVIDED that in no event shall the term of any such Inventory or supply
advance, loan or extension of credit exceed 180 days); or (c) the entering into
of any Guaranty of, or other contingent obligation with respect to, Indebtedness
or other liability of any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person.
"LANDLORD'S WAIVER AND CONSENT" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related Lease, in the form approved by the Agent in its sole
discretion.
"LEASE" means any lease of real property to which any Loan Party or any
of its Subsidiaries is a party as lessor or lessee.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee under any Lease, other than any such leasehold interest designated from
time to time by the Agent in its sole discretion as not being required to be
included in the Collateral and not being of material importance to the business
or operations of the Loan Parties.
"LENDER" has the meaning specified therefor in the preamble hereto.
"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 capital lease and any
assignment, deposit arrangement or financing lease intended as, or having the
effect of, security.
"LOAN ACCOUNT" means an account maintained hereunder by the Agent on
its books of account at the Payment Office and, with respect to the Borrower, in
which the Borrower will be charged with the Term Loan made to, and all other
Obligations incurred by, the Borrower.
"LOAN DOCUMENT" means this Agreement, any Guaranty, any Collateral
Document, any UCC Filing Authorization Letter, the Participation Agreement, the
Intercreditor Agreement, and any other agreement, instrument, and other document
executed and delivered pursuant hereto or thereto or otherwise evidencing or
securing the Term Loan or any other Obligation.
"LOAN PARTY" means the Borrower and any Guarantor.
"LOAN SERVICING FEE" has the meaning specified therefor in Section
2.06(b).
"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 Borrower or the Loan Parties taken as a whole, (ii) the
ability of any Loan Party to perform any of its obligations under any Loan
- 14 -
Document to which it is a party, (iii) the legality, validity or enforceability
of this Agreement or any other Loan Document, (iv) the rights and remedies of
the Agent or any Lender under any Loan Document, or (v) the validity, perfection
or priority of a Lien in favor of the Agent for the benefit of the Lenders on
any of the Collateral with an aggregate fair market value in excess of $100,000.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Term Loan),
including, without limitation, obligations in respect of one or more Hedging
Agreements, in an aggregate principal amount exceeding $1,000,000. For purposes
of determining Material Indebtedness, the "principal amount" of the obligations
of any Person in respect of a Hedging Agreement at any time shall be the maximum
aggregate amount (giving effect to any netting agreements) that such Person
would be required to pay if such Hedging Agreement were terminated at such time.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by the Agent to be of material value as Collateral or of material
importance to the operations of the Loan Parties and as to which the aggregate
amount of all rents payable during any Fiscal Year exceeds $100,000.
"MATERIAL OWNED PROPERTY" means any real property owned by any Loan
Party that is reasonably determined by the Agent to be of material value as
Collateral or of material importance to the operations of the Loan Parties.
"MATERIAL RENTAL OBLIGATIONS" means obligations of the Loan Parties to
pay rent under any one or more operating leases with respect to any real or
personal property that is material to the business of the Loan Parties and as to
which the aggregate amount of all rents payable during any Fiscal Year exceeds
$100,000.
"MOODY'S" means Xxxxx'x Investors Service, Inc. and any successor
thereto.
"MORTGAGED PROPERTY" means, at any time of determination, any and all
real property owned or leased by the Loan Parties that are subject to a Mortgage
in favor of the Agent for the benefit of the Lenders and the Agent, including
without limitation the Properties listed on Schedule 1.01(D).
"MORTGAGES" means, collectively, the several security instruments
(whether designated as a deed of trust or a mortgage, leasehold mortgage,
assignment of leases and rents or by any similar title) executed and delivered
by any Loan Party, in such form as may be approved by the Agent in its
reasonable discretion, in each case with such changes thereto as may be
recommended by the Agent's local counsel based on local laws or customary local
practices, with respect to the Real Property Assets owned by a Loan Party.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which any Loan Party or any of its ERISA Affiliates has
contributed to, or has been obligated to contribute, at any time during the
preceding six (6) years.
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"NET CASH PROCEEDS" means,
(a) with respect to any Casualty Event, the aggregate amount
of cash proceeds of insurance, condemnation awards and other compensation
received by the Borrower or any of its Subsidiaries in respect of such Casualty
Event net of (i) reasonable expenses incurred by the Borrower or any of its
Subsidiaries in connection therewith and (ii) contractually required repayments
of Indebtedness to the extent secured by a Lien permitted by Section 7.02(b) on
such property and (iii) any income and transfer taxes payable by the Borrower or
any of its Subsidiaries in respect of such Casualty Event;
(b) with respect to any Disposition, the aggregate amount of
all cash payments received by the Borrower or any of its Subsidiaries directly
or indirectly in connection with such Disposition, whether at the time of such
Disposition or after such Disposition under deferred payment arrangements or
Investments entered into or received in connection with such Disposition, net of
(i) the amount of any legal, title, transfer and recording tax expenses,
commissions and other fees and expenses payable by the Borrower or any of its
Subsidiaries in connection therewith, (ii) any Federal, state and local income
or other Taxes payable by the Borrower or any of its Subsidiaries as a result
thereof, and (iii) any repayments by the Borrower or any of its Subsidiaries of
Indebtedness to the extent that such Indebtedness is secured by a Lien permitted
by Section 7.02(b) on the property that is the subject of such Disposition and
the transferee of (or holder of a Lien on) such property requires that such
Indebtedness be repaid as a condition to the purchase of such property, and (iv)
any repayments by the Borrower or any of its Subsidiaries to minority
stockholders if and to the extent permitted hereby; and
(c) with respect to any incurrence of Indebtedness or offering
of Capital Stock, the aggregate amount of all cash proceeds received by the
Borrower or any of its Subsidiaries therefrom less all legal, underwriting and
similar fees and expenses incurred in connection therewith;
in each case of clause (a), (b) and (c) to the extent, but only to the extent,
that the amounts so deducted are (x) actually paid to a Person that, except in
the case of reasonable out-of-pocket expenses, is not an Affiliate of such
Person or any of its Subsidiaries and (y) properly attributable to such
transaction or to the asset that is the subject thereof.
"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, but excluding from the
determination of Net Income (without duplication) (a) any extraordinary or non
recurring gains or losses or gains or losses from Dispositions, (b)
restructuring charges, (c) effects of discontinued operations and (d) interest
income (excluding interest income from CM Insurance Company, Inc.).
"NET WORTH" means, as of any date of determination thereof, the sum of
Total Assets MINUS (a) Total Liabilities, plus (b) non-cash goodwill impairment
charges recorded after the Effective Date in accordance with FASB Statement No.
142, and MINUS (c) Accumulated Other Comprehensive Gains (or Losses).
- 16 -
"NON-CASH CHARGES" means, with respect to any calculation of net income
for any period, all non-cash extraordinary losses and charges (excluding
inventory write-downs and Accounts Receivable charge-offs) deducted in such
calculation (as determined in accordance with GAAP, including, without
limitation, non-cash recognition of unrealized declines in the market value of
marketable securities recorded in accordance with FASB Statement No. 115,
non-cash asset impairment charges recorded in accordance with FASB Statement No.
142 and FASB Statement No. 144 (in each case, to the extent not expected to
result in cash charges in the future), and non-cash restructuring charges.
"NOTICE OF BORROWING" has the meaning specified therefor in Section
2.02(a).
"OBLIGATIONS" means all present and future indebtedness, obligations,
and liabilities of each Loan Party to the Agent and the Lenders under the Loan
Documents, whether or not the right of payment in respect of such claim is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
disputed, undisputed, legal, equitable, secured, unsecured, and whether or not
such claim is discharged, stayed or otherwise affected by any proceeding
referred to in Section 9.01. Without limiting the generality of the foregoing,
the Obligations of each Loan Party under the Loan Documents include (a) the
obligation to pay principal, interest (including the Term Loan PIK Amount),
charges, expenses, fees, attorneys' fees and disbursements, indemnities and
other amounts payable by such Person under the Loan Documents, and (b) the
obligation of such Person to reimburse any amount in respect of any of the
foregoing that the Agent or any Lender (in its sole discretion) may elect to pay
or advance on behalf of such Person.
"PARTICIPANT REGISTER" has the meaning specified therefor in Section
12.07(b)(v).
"PARTICIPATION AGREEMENT" means the Master Risk Participation
Agreement, dated as of the date hereof, by and among the Loan Parties, the
Canadian Agent and the Canadian Lenders.
"PATENT AGREEMENT" means a Patent Collateral Assignment and Security
Agreement made by a Loan Party in favor of the Agent, substantially in the form
of Exhibit D.
"PATENTS" means all patents issued or assigned to and all patent
applications made by the Loan Parties and, to the extent that the grant of a
security interest does not cause a breach or termination thereof, all exclusive
and nonexclusive licenses to the Loan Parties from third parties or rights to
use patents owned by such third parties, including, without limitation, the
patents, patent applications and licenses listed on Schedule 6.01(e) hereto,
along with any and all (a) inventions and improvements described and claimed
therein, (b) reissues, divisions, continuations, extensions and
continuations-in-part thereof, (c) income, royalties, damages, claims and
payments now and hereafter due and/or payable under and with respect thereto,
including, without limitation, damages and payments for past or future
infringements thereof, (d) rights to xxx for past, present and future
infringements thereof, and (e) any other rights corresponding thereto throughout
the world.
- 17 -
"PAYMENT OFFICE" means the Agent's office located at 00 Xxxxxxx Xxxxxx,
0xx Xxxxx, Xxxxxx, XX 00000, or at such other office or offices of the Agent as
may be designated in writing from time to time by the Agent to the Borrower.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Plan that is a defined benefit pension plan
subject to the provisions of Title IV of ERISA or Section 412 of the Internal
Revenue Code or Section 302 of ERISA, and in respect of which any Loan Party or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America (or by
any agency thereof to the extent such obligations are backed by the full faith
and credit of the United States of America), in each case maturing within one
year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, the highest
credit rating obtainable from Standard and Poor's or from Xxxxx'x;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition thereof
issued or guaranteed by or placed with, and money market deposit accounts issued
or offered by, any domestic office of any commercial bank organized under the
laws of the United States of America or any State thereof which has a combined
capital and surplus and undivided profits of not less than $250,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
(e) advances, loans and extensions of credit to any director, officer
or employee of the Loan Parties, if the aggregate outstanding amount of all such
advances, loans and extensions of credit (excluding travel advances in the
ordinary course of business) does not at any time exceed $500,000;
(f) investments in money market mutual funds that are rated AAA by
Standard & Poor's; and
(g) stocks, bonds, funds, covered call options, cash equivalents and
cash included in the portfolio of Investments owned by CM Insurance Company,
Inc. under the investment objective of "Aggressive Growth/Moderate Income" using
the following asset guidelines: cash, 0% to 20%; bonds, 0% to 30%; stocks, 70%
to 90%; other, 0% to 20%; in each case, invested at the discretion of Fleet
Investment Advisors, Inc. and Gold-K Securities, Inc.
- 18 -
"PERMITTED LIENS" has the meaning specified therefor in Section
7.02(b).
"PERSON" means an individual, corporation, limited liability company,
partnership, association, joint-stock company, trust, unincorporated
organization, joint venture or other enterprise or entity or Governmental
Authority.
"PLAN" means any employee benefit plan within the meaning of Section
3(3) of ERISA in which any Loan Party or any ERISA Affiliate is an "employer" as
defined in Section 3(5) of ERISA or any employee benefit plan established and
maintained by, or for the benefit of such Loan Party for the benefit of its
respective employees, including, but not limited to, any Pension Plan or
Multiemployer Plan.
"PLEDGE AGREEMENT" means a Pledge and Security Agreement made by a Loan
Party in favor of the Agent for the benefit of the Lenders, substantially in the
form of Exhibit B or otherwise acceptable to the Agent, securing the Obligations
and delivered to the 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 3%.
"PRO RATA SHARE" means, with respect to a Lender's obligation to make
the Term Loan and receive payments of interest, fees, and principal with respect
thereto, and all other matters (including, without limitation, the
indemnification obligations arising under Section 10.05), the percentage
obtained by dividing (i) such Lender's Term Loan Commitment, by (ii) the Total
Term Loan Commitment, PROVIDED that if the Total Term Loan Commitment has been
reduced to zero, the numerator shall be the aggregate unpaid principal amount of
such Lender's portion of the Term Loan and the denominator shall be the
aggregate unpaid principal amount of the Term Loan.
"PROPERTY" means any interest of any kind in property or assets,
whether real, personal or mixed, and whether tangible or intangible.
"PROPRIETARY RIGHTS" has the meaning specified therefor in Section
6.01(e)(ii).
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of the Agent, desirable in order to create or perfect Liens on any Patents or
Trademarks.
"RATING AGENCIES" has the meaning specified therefor in Section 2.07.
"REAL PROPERTY ASSET" means, at any time of determination, any and all
real property owned or leased by the Loan Parties.
"REFERENCE BANK" means JPMorgan Chase Bank, its successors or any other
commercial bank designated by the Agent to the Borrower from time to time.
"REFERENCE PERIOD" means, as of any date of determination, the period
of four (4) consecutive fiscal quarters of the Borrower and its Subsidiaries
ending on such date, or if such date is not a fiscal quarter end date, the
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period of four (4) consecutive fiscal quarters most recently ended (in each case
treated as a single accounting period).
"REFERENCE RATE" means the rate of interest publicly announced by the
Reference Bank in New York, New York from time to time as its reference rate,
base rate or prime rate. The reference rate, base rate or prime 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
12.07(b)(ii).
"REGISTERED PROPRIETARY RIGHTS" has the meaning specified therefor in
Section 6.01(e)(iii).
"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.
"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, without
limitation, the movement of Hazardous Materials through or in the ambient air,
soil, surface or ground water, or property.
"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)
perform any other actions authorized by 42 U.S.C. ss. 9601.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares of the Term Loan
aggregate at least 51%.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of, or other equity interest in, any Loan Party or any of its Subsidiaries now
or hereafter outstanding, except a dividend payable solely in shares of stock or
other equity interests, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock of, or other equity interest in, any Loan Party or
any of its Subsidiaries now or hereafter outstanding, (iii) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
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other rights to acquire shares of any class of stock of, or other equity
interest in, any Loan Party or any of its Subsidiaries, (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or redemption
purchase, retirement, defeasance (including economic or legal defeasance),
sinking fund or similar payment with respect to the Senior Subordinated Notes
and/or any intercompany Indebtedness owing by the Borrower or any Guarantor, and
(v) any payment made to any Affiliates of any Loan Party or any of its
Subsidiaries in respect of management, consulting or other similar services
provided to any Loan Party or any of its Subsidiaries.
"RESTRICTIVE AGREEMENTS" has the meaning specified therefor in Section
6.01(m)(ii).
"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 from time to time.
"SECURITIZATION" has the meaning specified therefor in Section 2.07.
"SECURITIZATION PARTIES" has the meaning specified therefor in Section
2.07.
"SENIOR FUNDED INDEBTEDNESS" means, at any time of determination, the
sum of Total Funded Indebtedness minus the principal amount of the Senior
Subordinated Notes outstanding at such time.
"SENIOR LEVERAGE RATIO" means as at any date of determination, the
ratio of (a) Senior Funded Indebtedness of the Borrower and its Subsidiaries
outstanding on such date to (b) the EBITDA for the Referenced Period ended on
such date.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means the Senior Subordinated Note
Indenture, the Senior Subordinated Notes and all other documents, instruments
and agreements executed and delivered in connection with the Senior Subordinated
Notes.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Columbus XxXxxxxx
Corporation Series A and Series B 8 1/2% Senior Subordinated Notes Due 2008
Indenture, dated as of March 31, 1998 (as supplemented by the Supplemental
Indenture, dated as of March 31, 1998, the Second Supplemental Indenture, dated
as of February 12, 1999, the Third Supplemental Indenture, dated as of March 1,
1999, the Fourth Supplemental Indenture, dated as of November 1, 1999, the Fifth
Supplemental Indenture, dated as of April 4, 2002 and the Sixth Supplemental
Indenture, dated as of August 5, 2002), between the Borrower, as issuer, and
State Street Bank and Trust Company, N.A., as trustee.
"SENIOR SUBORDINATED NOTES" means the Borrower's 8 1/2% senior
subordinated notes due 2008 issued pursuant to the Senior Subordinated Note
Indenture.
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"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The XxXxxx-Xxxx Companies, Inc. and any successor thereto.
"SUBSIDIARY" means, with respect to any Person at any date, any
corporation, limited or general partnership, limited liability company, trust,
estate, association, joint venture or other business 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 or other managing body of such
Person, (B) in the case of a partnership or limited liability company, the
interest in the capital or profits of such partnership or limited liability
company or (C) in the case of a trust, estate, association, joint venture or
other entity, the beneficial interest in such trust, estate, association or
other entity business is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person.
"SYNTHETIC LEASE" means, any lease of goods or other property, whether
real or personal, which is treated as an operating lease under GAAP and as a
loan or financing for U.S. income tax purposes.
"TAXES" has the meaning specified therefor in Section 2.08(a).
"TERM LOAN" means, collectively, the loans made by the Lenders to the
Borrower on the Effective Date pursuant to Section 2.01(a).
"TERM LOAN COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make the Term Loan to the Borrower in the amount
set forth in Schedule 1.01(A) hereto, as the same may be terminated or reduced
from time to time in accordance with the terms of this Agreement.
"TERM LOAN PIK AMOUNT" means, as at any date of determination, the
amount of all interest accrued with respect to the Term Loan that has been
paid-in-kind by being added to the outstanding principal balance of the Term
Loan in accordance with Section 2.04(a).
"TITLE INSURANCE POLICY" means a mortgagee's loan policy, in form and
substance satisfactory to the Agent, together with all endorsements made from
time to time thereto, issued by or on behalf of a title insurance company
satisfactory to the Agent, insuring the Lien created by a Mortgage in an amount
and on terms satisfactory to the Agent, delivered to the Agent.
"TRADEMARK AGREEMENT" means a Trademark Collateral Security and Pledge
Agreement made by a Loan Party in favor of the Agent, substantially in the form
of Exhibit C.
"TRADEMARKS" means all trademarks (including service marks), federal
and state trademark registrations and applications made by the Loan Parties,
common law trademarks and trade names owned by or assigned to the Loan Parties,
all registrations and applications for the foregoing and all exclusive and
nonexclusive licenses from third parties of the right to use trademarks of such
third parties, including, without limitation, the registrations, applications,
unregistered trademarks, service marks and licenses listed on Schedule 6.01(e)
hereto, along with any and all (a) renewals thereof, (b) income, royalties,
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damages and payments now and hereafter due and/or payable with respect thereto,
including, without limitation, damages, claims and payments for past or future
infringements thereof, (c) rights to xxx for past, present and future
infringements thereof, and (d) foreign trademarks, trademark registrations, and
trade name applications for any thereof and any other rights corresponding
thereto throughout the world.
"TOTAL ASSETS" means the sum of (a) all assets ("CONSOLIDATED BALANCE
SHEET ASSETS") of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, PLUS (b) without duplication, all assets leased
by the Borrower or any of its Subsidiaries as lessee under any Synthetic Lease
to the extent that such assets would have been consolidated balance sheet assets
had the Synthetic Lease been treated for accounting purposes as a Capital Lease
Obligation.
"TOTAL FUNDED INDEBTEDNESS" means, with respect to the Borrower and its
Subsidiaries, the sum, without duplication, of (a) the aggregate amount of
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis in accordance with GAAP, relating to (i) the borrowing of money or the
obtaining of credit, including the issuance of notes or bonds, (ii) the deferred
purchase price of assets (other than trade payables incurred in the ordinary
course of business), (iii) in respect of any Synthetic Leases or any Capital
Lease Obligations, and (iv) the maximum drawing amount of all letters of credit
outstanding, PLUS (b) Indebtedness of the type referred to in clause (a) of
another Person guaranteed by the Borrower or any of its Subsidiaries.
"TOTAL LIABILITIES" means all liabilities of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP and
classified as such on the consolidated balance sheet of the Borrower and its
Subsidiaries and all other Indebtedness of the Borrower and its Subsidiaries,
whether or not so classified.
"TOTAL TERM LOAN COMMITMENT" means the sum of the amounts of the
Lenders' Term Loan Commitments.
"TOTAL VOTING POWER" means, with respect to any Person, the total
number of votes which holders of securities having the ordinary power to vote,
in the absence of contingencies, are entitled to cast in the election of
directors of such Person.
"UCC FILING AUTHORIZATION LETTER" means a letter duly executed by each
Loan Party authorizing the Agent to file appropriate financing statements on
Form UCC-1 without the signature of such Loan Party in such office or offices as
may be necessary or, in the opinion of the Agent, desirable to perfect the
security interests purported to be created by each Collateral Document.
"UNIFORM COMMERCIAL CODE" has the meaning specified therefor in Section
1.03.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
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"WORKING CAPITAL AGENT" means Fleet Capital Corporation, as agent for
the Working Capital Lenders under the Working Capital Loan Agreement.
"WORKING CAPITAL AVAILABILITY" means "Domestic Excess Availability" as
such term is defined in the Working Capital Loan Agreement as such agreement is
in effect on the date hereof.
"WORKING CAPITAL BORROWING BASE" means, collectively, the "Domestic
Borrowing Base" and the "Canadian Borrowing Base" as each such term is defined
in the Working Capital Loan Agreement as such agreement is in effect on the date
hereof.
"WORKING CAPITAL INDEBTEDNESS" means, collectively, the Indebtedness of
the Borrowers owing to the Working Capital Agent and the Working Capital Lenders
and (ii) the Indebtedness of the Canadian Borrowers owing to the Canadian Lender
(as defined in the Working Capital Loan Agreement as in effect on the date
hereof), in each case under the Working Capital Loan Agreement.
'WORKING CAPITAL LC EXPOSURE" means the "Total LC Exposure" as such
term is defined in the Working Capital Loan Agreement as such agreement is in
effect on the date hereof.
"WORKING CAPITAL LENDERS" means the lenders from time to time party to
the Working Capital Loan Agreement.
"WORKING CAPITAL LOAN AGREEMENT" means the amended and restated credit
and security agreement, dated as of the date hereof, by and among the Borrower,
the Canadian Borrowers, the Guarantors, the Working Capital Lenders and the
Working Capital Agent.
"WORKING CAPITAL LOAN DOCUMENTS" means, collectively, (i) the Working
Capital Loan Agreement, and (ii) all other agreements, instruments, and other
documents executed and delivered in connection therewith.
"WORKING CAPITAL LOANS" means, collectively, the (i) Working Capital
Revolving Loans and (ii) the Working Capital Term Loan.
"WORKING CAPITAL REVOLVING LOANS" means the "Revolving Loan" (as
defined in the Working Capital Loan Agreement as in effect on the date hereof).
"WORKING CAPITAL TERM LOAN" means the "Term Loan" (as defined in the
Working Capital Loan Agreement as in effect on the date hereof).
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 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
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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 right or interest in or to assets and properties of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
References in this Agreement to "determination" by the Agent include good faith
estimates by the Agent (in the case of quantitative determinations) and good
faith beliefs by the 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 as in effect from time to
time in the State of New York (the "UNIFORM COMMERCIAL CODE") and which are not
otherwise defined herein shall have the same meanings herein as set forth
therein, provided that terms used herein which are defined in the Uniform
Commercial Code as in effect in the State of New York on the date hereof shall
continue to have the same meaning notwithstanding any replacement or amendment
of such statute except as the Agent may otherwise determine.
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 the Agent or any Lender, such period shall in any
event consist of at least one full day.
ARTICLE II
THE LOANS
Section 2.01 TERM LOAN COMMITMENTS. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender severally agrees to make the Term Loan to the Borrower on the
Effective Date, in an aggregate principal amount not to exceed the amount of
such Lender's Term Loan Commitment.
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(b) Notwithstanding the foregoing, the aggregate principal
amount of the Term Loan made on the Effective Date shall not exceed the Total
Term Loan Commitment. Any principal amount of the Term Loan which is repaid or
prepaid may not be reborrowed.
Section 2.02 MAKING THE TERM LOAN. The Borrower shall give the Agent
prior telephonic notice (immediately confirmed in writing, substantially in the
form of Exhibit G (a "NOTICE OF BORROWING")), not later than 12:00 noon (New
York City time) on the date which is one (1) Business Day prior to the Effective
Date. Such Notice of Borrowing shall be irrevocable and shall specify (i) the
principal amount of the Term Loan, (ii) the use of the proceeds of the Term
Loan, and (iii) the proposed borrowing date, which must be a Business Day. The
Agent and the Lenders may act without liability upon the basis of written,
telecopied or telephonic notice believed by the Agent in good faith to be from
the Borrower (or from any Authorized Officer thereof designated in writing
purportedly from the Borrower to the Agent). The Borrower hereby waives the
right to dispute the Agent's record of the terms of any such telephonic Notice
of Borrowing. The Agent and each Lender shall be entitled to rely conclusively
on any Authorized Officer's authority to request the Term Loan on behalf of the
Borrower until the Agent receives written notice to the contrary. The Agent and
the Lenders shall have no duty to verify the authenticity of the signature
appearing on any written Notice of Borrowing.
(b) The Term Loan shall be made by the Lenders simultaneously
and proportionately to their Pro Rata Shares of the Total Term Loan 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 the Term Loan requested
hereunder, nor shall the Term Loan 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 the Term Loan requested hereunder, and each Lender shall be
obligated to make the Term Loan required to be made by it by the terms of this
Agreement regardless of the failure by any other Lender.
Section 2.03 REPAYMENT OF THE TERM LOAN; EVIDENCE OF DEBT. (a) The
outstanding principal of the Term Loan shall be repaid in full on the Final
Maturity Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the Borrower to
such Lender resulting from the Term Loan made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Agent shall maintain accounts in which it shall record
(i) the amount of the Term Loan made hereunder, (ii) the amount of any principal
or interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) the amount of any sum received by the Agent
hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Term Loan in accordance with the terms of this Agreement.
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(e) Any Lender may request that the Term Loan made by it be
evidenced by a promissory note. In such event, the Borrower shall execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns) in
a form furnished by the Agent and reasonably acceptable to the Borrower.
Thereafter, the Term Loan evidenced by such promissory note and interest thereon
shall at all times (including after assignment pursuant to Section 12.07) be
represented by one or more promissory notes in such form payable to the order of
the payee named therein (or, if such promissory note is a registered note, to
such payee and its registered assigns).
Section 2.04 INTEREST.
(a) TERM LOAN.
(i) The Term Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the date of the
Term Loan until such principal amount becomes due, at a rate per annum equal to
the sum of (A) the lesser of (1) the Base Interest Rate plus the Applicable
Margin and (2) 15.0% PLUS (B) 1.25%; PROVIDED that, in the absence of a
continuing Event of Default, that portion of such interest equal to 1.25% per
annum shall, in the absence of an election by the Borrower to pay such interest
in cash, be paid-in-kind by being added to the outstanding principal amount of
the Term Loan, PROVIDED, FURTHER, that, the Borrower may, on or prior to the
date that is 5 Business Days prior to due date thereof, elect to pay all accrued
and unpaid interest under this Section 2.04(a)(i)(B) in cash.
(ii) Notwithstanding anything to the contrary
contained in Section 2.04(a)(i), (A) in the event that the Borrower repays in
full in cash all Obligations (other than the Term Loan PIK Amount) under this
Agreement and the other Loan Documents on or prior to the first anniversary of
the Effective Date, the Borrower shall not be required to repay any of the Term
Loan PIK Amount and (B) in the event that the Borrower repays in full in cash
all Obligations (other than the Term Loan PIK Amount) under this Agreement and
the other Loan Documents on or prior to the second anniversary of the Effective
Date, the Borrower shall not be required to repay 50% of the Term Loan PIK
Amount.
(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, the Term Loan, fees, indemnities, or any
other Obligations of the Loan Parties under this Agreement and the other Loan
Documents, shall bear interest, from the date such Event of Default occurred
until the date 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 the Term 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 the Term 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 Borrower hereby authorizes the
Agent to, and the Agent may, from time to time, charge the Loan Account pursuant
to Section 4.02 with the amount of any interest payment due and payable
hereunder.
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(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.
Section 2.05 REDUCTION OF THE TERM LOAN COMMITMENT; PREPAYMENT OF THE
TERM LOAN.
(a) REDUCTION OF THE TERM LOAN COMMITMENT. The Total Term Loan
Commitment shall terminate at 5:00 p.m. (New York City time) on the Effective
Date.
(b) OPTIONAL PREPAYMENT. The Borrower may, upon at least five
(5) Business Days' prior written notice to the Agent, prepay without penalty or
premium the principal of the Term Loan, in whole or in part. Each prepayment
made pursuant to this clause (b) shall be accompanied by the payment of accrued
interest to the date of such payment on the amount prepaid. Each such prepayment
shall be applied against the remaining installments of principal due on the Term
Loan in the inverse order of maturity.
(c) MANDATORY PREPAYMENT.
(i) Within 10 days of delivery to the Agent and the
Lenders of audited annual financial statements pursuant to Section 7.01(a)(i),
commencing with the delivery to the Agent and the Lenders of the financial
statements for the Fiscal Year ended March 31, 2004 or, if such financial
statements are not delivered to the Agent and the Lenders on the date such
statements are required to be delivered pursuant to Section 7.01(a)(i), 10 days
after the date such statements are required to be delivered to the Agent and the
Lenders pursuant to Section 7.01(a)(i), the Borrower shall make a prepayment to
the Working Capital Loans and/or the Term Loan in accordance with Section
2.05(d) hereto in an amount equal to 50% of the Excess Cash Flow of the Borrower
and its Subsidiaries for such Fiscal Year.
(ii) Immediately upon any Disposition by any Loan
Party or its Subsidiaries pursuant to Sections 7.02(d)(ii) and 7.02(d)(iii)
(other than (A) Dispositions permitted under Section 7.02(d)(ii)(B) and (B)
Dispositions permitted under Section 7.02(d)(iii) to the extent that the
aggregate Net Cash Proceeds received therefrom do not exceed $500,000), the
Borrower shall make a prepayment to the Working Capital Loans (which may include
provision of cash collateral in respect of Working Capital LC Exposure) and/or
the Term Loan in accordance with Section 2.05(d) hereto in an amount equal to
100% of the Net Cash Proceeds received by such Person in connection with such
Disposition. Nothing contained in this subsection (ii) shall permit any Loan
Party or any of its Subsidiaries to make a Disposition of any property other
than in accordance with Sections 7.02(d)(ii) and 7.02(d)(iii).
(iii) Upon the issuance or incurrence by any Loan
Party or any of its Subsidiaries of any Indebtedness (other than Indebtedness
permitted pursuant to Section 7.02(a)), or the sale or issuance by any Loan
Party or any of its Subsidiaries of any shares of its Capital Stock, the
Borrower shall make a prepayment to the Working Capital Loans (which may include
provision of cash collateral in respect of Working Capital LC Exposure) and/or
the Term Loan in accordance with Section 2.05(d) hereto in an amount equal to
100% of the Net Cash Proceeds received by such Person in connection therewith.
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The provisions of this subsection (iii) shall not be deemed to be implied
consent to any such issuance, incurrence or sale otherwise prohibited by the
terms and conditions of this Agreement.
(iv) Upon the receipt by any Loan Party or any of its
Subsidiaries of any Extraordinary Receipts, the Borrower shall make a prepayment
to the Working Capital Loans (which may include provision of cash collateral in
respect of Working Capital LC Exposure) and/or the Term Loan in accordance with
Section 2.05(d) hereto in an amount equal to 100% of such Extraordinary
Receipts, net of any reasonable expenses incurred in collecting such
Extraordinary Receipts; PROVIDED, that in the case of insurance proceeds
received in connection with a Casualty Event with respect to Property having an
aggregate market value less than $1,500,000, so long as, at the time of receipt
and use of such insurance proceeds, no Event of Default shall have occurred and
be continuing, the Loan Parties shall be entitled to use such insurance proceeds
(in an amount not in excess of $1,500,000) to repair or replace the Property
affected by such Casualty Event, PROVIDED, FURTHER, that (A) until so used, such
insurance proceeds shall be deposited into a cash collateral account (and when
so deposited such insurance proceeds shall constitute Collateral for the
Obligations then outstanding), (B) such insurance proceeds may be used solely to
repair or replace the Property that was the subject of such Casualty Event with
other Property of the same type, (C) such insurance proceeds must be used and
such Property must be repaired or replaced within 180 days after the date of
receipt thereof, and (D) upon the occurrence and during the continuance of an
Event of Default or after such 180 day period shall have expired, such insurance
proceeds, if not so used, shall be applied to the prepayment of the Working
Capital Loans and/or the Term Loan as provided in Section 2.05(d).
(v) In the event that the aggregate amount of the
cash and Permitted Investments (other than cash in the Prepayment Escrow Account
(as defined in the Working Capital Loan Agreement) and Investments permitted
pursuant to clause (g) of the definition of Permitted Investments) of the Loan
Parties and their Subsidiaries exceeds at any time $1,500,000, the Borrower
shall immediately make a prepayment to the Working Capital Loans (which may
include provision of cash collateral in respect of Working Capital LC Exposure)
and/or the Term Loan in accordance with Section 2.05(d) hereto in an amount
equal to such excess.
(d) APPLICATION OF PAYMENTS. Each prepayment pursuant to
subsections (c)(i), (c)(ii), (c)(iii), (c)(iv) and (c)(v) above shall be applied
as follows:
(i) if the proceeds are from (A) any Disposition of
any Account Receivable or Inventory or any insurance policy or condemnation
award with respect to Inventory or (B) any event set forth in Section
2.05(c)(v), such proceeds shall be applied, first, to the Working Capital
Revolving Loans until paid in full (which may include provision of cash
collateral in respect of Working Capital LC Exposure), second, to the Working
Capital Term Loan until paid in full and, third, to the Term Loan until paid in
full;
(ii) if the proceeds are from any Disposition of any
of the Mortgaged Properties described on Schedule 1.01(E) or any insurance
policy or condemnation award with respect to any such Mortgaged Properties, such
proceeds shall be applied either to the Working Capital Term Loan or the Term
Loan;
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(iii) if the proceeds are from any Disposition of any
Mortgaged Properties other than those described on Schedule 1.01(E) or any
insurance policy or condemnation award with respect to any such Mortgaged
Properties, such proceeds shall be applied, first, to the Working Capital Term
Loan in an amount equal to the Appraised Value of such Mortgaged Properties (as
set forth in the most recent appraisal of such Mortgaged Property delivered by
the Working Capital Agent to the Agent) and, second, to the Term Loan until paid
in full;
(iv) subject to clause (v) below, if the proceeds are
from the Disposition of any (A) other assets of the Loan Parties not described
in clause (i), (ii) or (iii) above or (B) event set forth in Section 2.05(c)(i),
(c)(iii) or (c)(iv), such proceeds shall be applied either to the Working
Capital Term Loan or to the Term Loan; and
(v) if the proceeds are from a Disposition of all or
substantially all of the assets or Capital Stock of any Person or any insurance,
which Disposition or proceeds of insurance includes both (1) Accounts Receivable
or Inventory and (2) other assets, such proceeds shall be applied as follows:
(A) an amount equal to the net book value of such Accounts Receivable and
Inventory shall be applied to the Working Capital Revolving Loans (which may
include provision of cash collateral in respect of Working Capital LC Exposure)
and (B) the remaining proceeds shall be applied either to the Working Capital
Term Loan or to the Term Loan;
PROVIDED, that in the case of each of clauses (i) through (v) above, if either
(x) the conditions to any prepayment of the Term Loan set forth in Section 8.14
of the Working Capital Loan Agreement (as in effect on the date hereof) are not
satisfied or (y) the Borrower is required to apply such proceeds to the Working
Capital Revolving Loans pursuant to the terms of the Working Capital Loan
Agreement (as in effect on the date hereof), then the Borrower shall not be
required to make such prepayment of the Term Loan to the extent that:
(1) in the case of clause (x) or (y) above,
either (AA) the Borrower actually applies the proceeds that would otherwise be
required to be applied to the Term Loan pursuant to Section 2.05(c) and this
Section 2.05(d) to the Working Capital Term Loan or (BB) the Borrower actually
applies the proceeds that would otherwise be required to be applied to the Term
Loan pursuant to Section 2.05(c) and this Section 2.05(d) to the Working Capital
Revolving Loans (which may include provision of cash collateral in respect of
Working Capital LC Exposure), and the Working Capital Agent, concurrently with
such payment of the Working Capital Revolving Loans, (xx) makes a corresponding
permanent reduction in the Revolving Credit Commitments (as defined in the
Working Capital Loan Agreement as in effect on the date hereof) and (yy) except
in the case of Section 2.05(c)(iii), establishes and maintains a corresponding
permanent reserve against the Working Capital Borrowing Base, in the case of
each of (xx) and (yy), in an amount equal to the amount of proceeds that would
have otherwise been applied by the Borrower to the prepayment of the Term Loan
pursuant to Section 2.05(c) and this Section 2.05(d),
(2) in the case of clauses (x) or (y) above,
(AA) the Borrower actually applies the proceeds that would otherwise be required
to be applied to the Term Loan pursuant to Section 2.05(c) and this Section
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2.05(d) to the Working Capital Revolving Loans (which may include provision of
cash collateral in respect of Working Capital LC Exposure) and (BB) concurrently
with such payment of the Working Capital Revolving Loans, the Working Capital
Agent establishes and maintains a reserve against the Working Capital Borrowing
Base in an amount equal to the amount of proceeds that would have otherwise been
applied by the Borrower to the prepayment of the Term Loan pursuant to Section
2.05(c) and this Section 2.05(d), PROVIDED, that, the amount of such proceeds
that are applied to the Working Capital Revolving Loans pursuant to this
subclause (2) shall be required to be applied to the prepayment of the Term Loan
at any time after such application to the Working Capital Revolving Loans if
either (xx) no breach of Section 8.14 of the Working Capital Loan Agreement (as
in effect on the date hereof) would occur as a result of such prepayment of the
Term Loan or (yy) the Working Capital Agent releases all or any portion of the
reserve established against the Working Capital Borrowing Base at the time such
proceeds were applied to the Working Capital Revolving Loans, or
(3) in the case of clause (x) above at a
time when the Working Capital Term Loan has been paid in full and such
prepayment of the Term Loan is required pursuant to Section 2.05(c)(i), the
Borrower makes such payment on a deferred basis (in whole or in part from time
to time) to the extent that such payment(s) do not result in a breach of Section
8.14 of the Working Capital Loan Agreement (as in effect on the date hereof).
Each such prepayment of the Working Capital Term Loan made pursuant to this
subsection 2.05(d) shall be applied against the remaining installments of
principal of the Working Capital Term Loan in the inverse order of maturity.
(e) INTEREST AND FEES. Any prepayment made pursuant to 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
outstanding principal amount of the Term Loan to zero, such prepayment shall be
accompanied by the payment of all 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
Borrower shall pay to the Agent for the account of the Lenders, in accordance
with their Pro Rata Shares, a non-refundable closing fee (the "CLOSING FEE")
equal to $2,100,000, which shall be deemed fully earned when paid.
(b) LOAN SERVICING FEE. From and after the Effective Date and
until the later of (i) the Final Maturity Date and (ii) the date on which all
Obligations are paid in full, the Borrower shall pay to the Agent for the
account of the Agent, a non-refundable loan servicing fee (the "LOAN SERVICING
FEE") equal to $7,500 each month, which shall be deemed fully earned when paid
and which shall be payable on the Effective Date (payable ratably based on the
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number of days remaining in the month in which the Effective Date occurs) and
monthly in advance thereafter on the first day of each month commencing on
December 1, 2002.
(c) ANNIVERSARY FEE. The Borrower shall pay to the Agent for
the account of the Lenders, in accordance with their Pro Rata Shares, a
non-refundable anniversary fee (the "ANNIVERSARY FEE") in an amount equal to the
product of (i) Anniversary Fee Percentage MULTIPLIED BY (ii) the outstanding
principal amount of the Term Loan, which shall be deemed fully earned when paid
and which shall be payable on each anniversary of the Effective Date.
Section 2.07 SECURITIZATION. The Loan Parties hereby acknowledge that
the Lenders and their Affiliates may sell or securitize the Term Loan (a
"SECURITIZATION") through the pledge of the Term Loan as collateral security for
loans to the Lenders or their Affiliates or through the sale of the Term Loan or
the issuance of direct or indirect interests in the Term Loan, 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 Loan Parties 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 Loan Parties and
(ii) any such amendment or additional documentation does not materially
adversely affect the rights, or materially increase the obligations, of the Loan
Parties under the Loan Documents or change or affect in a manner adverse to the
Loan Parties the financial terms of the Term Loan, (b) providing such
information as may be reasonably requested by the Lenders in connection with the
rating of the Term Loan or the Securitization, and (c) providing in connection
with any rating of the Term Loan a certificate (i) agreeing to indemnify the
Lenders and 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 or in any writing delivered by or
on behalf of any Loan Party 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 Term Loan and (ii) agreeing to
reimburse the Lenders and 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 any Loan Party hereunder
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
Federal, state, local or foreign law) or by any political subdivision or taxing
authority thereof or therein, and all interest, penalties or additional amounts,
excluding taxes on the net income of any Lender or the Agent imposed by the
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jurisdiction in which such Lender or the Agent is organized or any political
subdivision thereof or taxing authority thereof or any jurisdiction in which
such Person's principal office is located or any political subdivision thereof
or taxing authority thereof (such nonexcluded taxes, levies, imposts,
deductions, charges, fees, withholdings, restrictions, conditions, interest,
penalties and additional amounts being hereinafter collectively referred to as
"TAXES"). If any Loan Party shall be required to deduct or to withhold any Taxes
from or in respect of any amount payable hereunder or under any other Loan
Document,
(i) the amount so payable shall be increased so that
after making all required deductions and withholdings (including Taxes on
amounts payable pursuant to this sentence) the Lenders or the Agent, as the case
may be, receive an amount equal to the sum they would have received had no such
deduction or withholding been made,
(ii) such Loan Party shall make such deduction or
withholding,
(iii) such Loan Party shall pay the full amount
deducted or withheld to the relevant taxation authority in accordance with
applicable law, and
(iv) as promptly as possible thereafter, such Loan
Party shall send the Lenders and the Agent an official receipt (or, if an
official receipt is not available, such other documentation as shall be
satisfactory to the Lenders or the Agent, as the case may be) evidencing payment
of the amount or amounts so deducted or withheld. In addition, each Loan Party
agrees 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 or any
other Loan Document other than the foregoing excluded taxes (hereinafter
referred to as "OTHER TAXES").
(b) The Loan Parties hereby jointly and severally indemnify
and agree to hold the Lenders and the Agent harmless from and against 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 Lender
or the Agent 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. Such indemnification shall be paid within 10 days from the date on
which any such Lender or the Agent makes written demand therefor, which demand
shall identify in reasonable detail the nature and amount of such Taxes or Other
Taxes.
(c) Each Lender that is organized in a jurisdiction outside
the United States hereby agrees that 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 (and from time to time thereafter upon the reasonable request of
the Borrower or the Agent, but only if such Lender is legally able to do so),
deliver to the Borrower and the Agent either (i) two accurate, complete and
signed copies of either (x) U.S. Internal Revenue Service Form W-8ECI or
successor form, or (y) U.S. Internal Revenue Service Form W-8BEN or successor
form, in each case, indicating that such Lender is on the date of delivery
thereof entitled to receive payments of interest hereunder free from, or subject
to a reduced rate of, withholding of United States Federal income tax or (ii) in
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the case of such a Lender that is entitled to claim exemption from withholding
of United States Federal income tax under Section 871(h) or Section 881(c) of
the Internal Revenue Code, (x) a certificate to the effect that such Lender is
(A) not a "bank" within the meaning of Section 881(c)(3)(A) of the Internal
Revenue Code, (B) not a "10 percent shareholder" of the Borrower within the
meaning of Section 881(c)(3)(B) of the Internal Revenue Code and (C) not a
controller foreign corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Internal Revenue Code and (y) two
accurate, complete and signed copies of U.S. Internal Revenue Service Form
W-8BEN or successor form.
(d) If any Loan Party fails to perform any of its obligations
under this Section 2.08, the Loan Parties shall indemnify the Lenders and the
Agent for any taxes, interest or penalties that may become payable as a result
of any such failure. The obligations of the Loan Parties under this Section 2.08
shall survive the termination of this Agreement and the payment of the Term Loan
and all other amounts payable hereunder.
ARTICLE III
THE COLLATERAL
Section 3.01 GRANT OF SECURITY INTEREST. As collateral security for all
of the Obligations, each Loan Party hereby pledges and assigns to the Agent, and
grants to the Agent for the benefit of the Lenders a continuing security
interest in, all personal property of such Loan Party, wherever located and
whether now or hereafter existing and whether now owned or hereafter acquired,
of every kind and description, tangible or intangible (the "COLLATERAL"),
including, without limitation, the following:
(a) all Accounts;
(b) all Chattel Paper (whether tangible or electronic);
(c) the Commercial Tort Claims specified on Schedule 6.01(f)
hereto;
(d) all Deposit Accounts, all cash, and all other property
from time to time deposited therein and the monies and property in the
possession or under the control of the Agent or any Lender or any affiliate,
representative, agent or correspondent of the Agent or any Lender;
(e) all Documents;
(f) all Equipment;
(g) all Fixtures;
(h) all General Intangibles (including, without limitation,
all Payment Intangibles);
(i) all Goods;
(j) all Instruments (including, without limitation, Promissory
Notes);
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(k) all Inventory;
(l) all Investment Property;
(m) all Copyrights, Patents and Trademarks;
(n) all Letter-of-Credit Rights;
(o) all Supporting Obligations;
(p) all other tangible and intangible personal property of
such Loan Party (whether or not subject to the Uniform Commercial Code),
including, without limitation, all bank and other accounts and all cash and all
investments therein, all proceeds, products, offspring, accessions, rents,
profits, income, benefits, substitutions and replacements of and to any of the
property of such Loan Party described in the preceding clauses of this Section
3.01 (including, without limitation, any proceeds of insurance thereon and all
causes of action, claims and warranties now or hereafter held by such Loan Party
in respect of any of the items listed above), and all books, correspondence,
files and other Records, including, without limitation, all tapes, desks, cards,
Software, data and computer programs in the possession or under the control of
such Loan Party or any other Person from time to time acting for such Loan Party
that at any time evidence or contain information relating to any of the property
described in the preceding clauses of this Section 3.01 or are otherwise
necessary or helpful in the collection or realization thereof; and
(q) all Proceeds, including all Cash Proceeds and Noncash
Proceeds, and products of any and all of the foregoing Collateral;
in each case howsoever such Loan Party's interest therein may arise or appear
(whether by ownership, security interest, claim or otherwise).
As used in this Section 3.01, the following terms shall have the respective
meanings provided for in the Uniform Commercial Code: "Accounts", "Cash
Proceeds", "Chattel Paper", "Commercial Tort Claim", "Deposit Account",
"Documents", "Equipment", "Fixtures", "General Intangibles", "Goods",
"Instruments", "Inventory", "Investment Property", "Letter-of-Credit Rights",
"Noncash Proceeds", "Payment Intangibles", "Proceeds", "Promissory Notes",
"Record", "Software", and "Supporting Obligations".
Section 3.02 SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
LOAN PARTIES. Each Loan Party hereby warrants and covenants to the Agent and the
Lenders that:
(a) Such Loan Party has delivered to the Agent a Perfection
Certificate, substantially in the form of Exhibit C to the Working Capital Loan
Agreement. All information set forth in such Perfection Certificate is complete,
true and correct in all material respects and there has been no change in any of
such information since the date on which the Perfection Certificate was signed
by such Loan Party.
(b) No Loan Party will change its jurisdiction of
organization, type of organization or other legal structure, principal or any
other place of business, or the location of any Collateral from the locations
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set forth in the Perfection Certificate delivered by such Loan Party, or make
any change in its name or conduct its business operations under any fictitious
business name or trade name, without, in any such case, at least 30 days' prior
written notice to the Agent; PROVIDED that the Inventory of such Loan Party may
be in the possession of manufacturers or processors in any jurisdiction in which
all necessary Uniform Commercial Code financing statements have been filed by
the Agent and with respect to which the Agent has received waiver letters from
all landlords, warehousemen and processors in form and substance acceptable to
the Agent.
(c) Each Loan Party represents and warrants to the Lenders and
the Agent as follows: (i) except for the security interest created by this
Agreement and other Liens permitted hereunder, there is no financing statement,
security agreement, chattel mortgage, real estate mortgage or other document
filed or recorded with any filing records, registry or other public office, that
purports to cover, affect or give notice of any present or possible future Lien
on any assets or property of the Loan Parties or any rights relating thereto,
(ii) such Loan Party is the owner of or has other rights in or power to transfer
the Collateral, free from any right or claim of any Person or any adverse lien,
except for the security interest created by this Agreement and other Liens
permitted hereunder, (iii) none of the Collateral constitutes, or is the
proceeds of, "farm products" as defined in ss.9-102(a)(34) of the Uniform
Commercial Code, (iv) none of the Account Debtors or other Persons obligated on
any of the Collateral is a Governmental Authority covered by the Federal
Assignment of Claims Act or like federal, state or local statute or rule in
respect of such Collateral and (v) such Loan Party has at all times operated its
business in compliance with all applicable provisions of the federal Fair Labor
Standards Act, as amended, and with all applicable provisions of federal, state
and local statutes and ordinances dealing with the control, shipment, storage or
disposal of Hazardous Materials.
(d) Each Loan Party covenants with the Lenders and the Agent
that, such Loan Party shall defend its rights in the Collateral against all
claims and demands of all Persons at any time claiming the same or any interests
therein adverse to the Agent or any of the Lenders.
(e) Each Loan Party represents and warrants to the Lenders and
the Agent that all filings, assignments, pledges and deposits of documents or
instruments have been made and all other actions have been taken that are
necessary or advisable, under applicable law, to establish and perfect the
Agent's security interest in the Collateral. The Collateral and the Agent's
rights with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses.
(f) Except for Collateral that is obsolete or no longer used
in their business, the Loan Parties will keep the Collateral in good order and
repair (normal wear excepted) and will not use the same in violation of law or
any policy of insurance thereon and keep the Collateral adequately insured at
all times in accordance with the provisions of Section 7.01(e). The Loan Parties
will pay promptly when due all taxes, assessments, governmental charges and
levies upon the Collateral or for its use or operation, except for taxes and
assessments permitted to be contested as provided in Section 7.01(d). Following
the occurrence and during the continuance of an Event of Default, the Agent may
at its option discharge any taxes or Liens to which any Collateral is at any
time subject (other than Permitted Liens), and may, upon the failure of the Loan
Parties to do so in accordance with this Agreement, purchase insurance on any
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Collateral and pay for the repair, maintenance or preservation thereof, and each
Loan Party agrees to reimburse the Agent on demand for any payments or expenses
incurred by the Agent or the Lenders pursuant to the foregoing authorization and
any unreimbursed amounts shall constitute Obligations for all purposes hereof.
(g) The Agent may from time to time request and each Loan
Party shall deliver copies of all customer lists and vendor lists.
(h) Each Loan Party hereby irrevocably authorizes the Agent,
at any time and from time to time, to file in any jurisdiction financing
statements and amendments thereto that (i) indicate the Collateral (x) as all
assets of such Loan Party or words of similar effect, regardless of whether any
particular asset falls within the scope of Article 9 of the Uniform Commercial
Code or such other jurisdiction or (y) as being of an equal or lesser scope or
with greater detail and (ii) which contain any other information required by
Article 9 of the Uniform Commercial Code (including Part 5 thereof) for the
sufficiency or filing office acceptance of any financing statement or amendment,
including whether (A) any Loan Party is an organization, the type of
organization and any organization identification number issued to such Loan
Party and (B) in the case of a financing statement filed as a fixture filing or
indicating Collateral as as-extracted collateral or timber to be cut, a
sufficient description of the real property to which the Collateral relates. The
Loan Parties agree to furnish any such information to the Agent promptly upon
request. Each Loan Party also ratifies its authorization for the Agent to have
filed in any Uniform Commercial Code jurisdiction any like initial financing
statements or amendments thereto if filed prior to the date hereof.
(i) Each Loan Party agrees that it will join with the Agent in
executing and, at its own expense file and refile, or permit the Agent to file
and refile such financing statements, continuation statements and other
documents (including, without limitation, Patent Agreements, Trademark
Agreements, Copyright Mortgages and licenses to use software and other property
protected by copyright), in such offices (including, without limitation, the
PTO, the United States Copyright Office, and appropriate state patent, trademark
and copyright offices), as the Agent may reasonably deem necessary or
appropriate, wherever required or permitted by law, in order to perfect and
preserve the rights and interests granted to the Agent in the Collateral. Each
Loan Party will give the Agent notice of each office at which records of such
Loan Party pertaining to all intangible items of Collateral are kept. Except as
may be provided in such notice, the records concerning all intangible Collateral
are and will be kept at the address shown in the respective Perfection
Certificate for such Loan Party as the principal place of business of such Loan
Party.
(j) The Loan Parties are the sole and exclusive owners of the
websites and domain names listed on Schedule 3.02(j) hereto and have registered
such domain names with all applicable authorities which provides for the
exclusive use by the Loan Parties of such domain names. The websites do not
contain any material, the publication of which may result in (i) the violation
of rights of any Person or (ii) a right of any Person against the publisher or
distributor of such material.
(k) The Loan Parties shall, annually by the end of the first
fiscal quarter following the previous Fiscal Year, provide written notice to the
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Agent of all applications for registration of Patents, Trademarks or Copyrights,
to the extent such applications exist, made during the preceding Fiscal Year.
The Loan Parties shall file and prosecute diligently all applications for
registration of Patents, Trademarks or Copyrights now or hereafter pending that
would be necessary to the business of the Loan Parties to which any such
applications pertain, and to do all acts, in any such instance, necessary to
preserve and maintain all rights in such registered Patents, Trademarks or
Copyrights unless such Patents, Trademarks or Copyrights are not material to the
business of the Loan Parties, as reasonably determined by the Loan Parties
consistent with prudent and commercially reasonable business practices. Any and
all costs and expenses incurred in connection with any such actions shall be
borne by the Loan Parties. Except in accordance with prudent and commercially
reasonable business practices, the Loan Parties shall not abandon any right to
file a Patent, Trademark or Copyright application or any pending Patent,
Trademark or Copyright application or any registered Patent, Trademark or
Copyright, in each case material to its business, without the consent of the
Agent.
(l) The domain name servers used in connection with the domain
names of the Loan Parties and all other relevant information pertaining to such
domain names, and the administrative contacts used in connection with the
registration of such domain names are identified on Schedule 3.02(j) hereto. No
Loan Party will change such domain name servers without 10 days' prior written
notice to the Agent. No Loan Party will cause a change in the identity of any
domain name administrative contact without 10 days' prior written notice to the
Agent.
(m) If any Loan Party is, now or at any time hereafter, a
beneficiary under a letter of credit in the face amount in excess of $100,000,
such Loan Party shall promptly notify the Agent thereof and, at the request and
option of the Agent, such Loan Party shall, pursuant to an agreement in form and
substance satisfactory to the Agent, either (i) arrange for the issuer and any
confirmer or other nominated Person of such letter of credit to consent to an
assignment to the Agent of the proceeds of the letter of credit or (ii) arrange
for the Agent to become the transferee beneficiary of the letter of credit, with
the Agent agreeing, in each case, that the proceeds of the letter of credit are
to be applied by the Agent against the Obligations as provided in this
Agreement.
(n) To the extent any Loan Party shall, now or at any time
hereafter, hold or acquire any promissory note or other instrument or tangible
chattel paper (the principal amount of which is greater than $100,000), such
Loan Party will promptly notify the Agent thereof and, at the request and option
of the Agent, such Debtor will endorse, assign and deliver such promissory note
or other instrument or tangible chattel paper to the Agent to be held as
Collateral hereunder, together with such instruments of transfer or assignment
thereof reasonably satisfactory in form and substance to the Agent.
(o) If any Loan Party shall, now or at any time hereafter,
hold or acquire any certificated securities, such Loan Party shall forthwith
endorse, assign and deliver the same to the Agent, accompanied by such
instruments of transfer or assignment duly executed in blank as the Agent may
from time to time specify; PROVIDED, HOWEVER, except with respect to entities
which are disregarded entities for U.S. income tax purposes, such Loan Party
shall only be required to endorse, assign and deliver shares representing
sixty-five percent (65%) of the Capital Stock of such Loan Party's first-tier
Foreign Subsidiaries. If any securities now or hereafter acquired by any Loan
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Party are uncertificated and are issued to such Loan Party or its nominee
directly by the issuer thereof, such Loan Party shall promptly notify the Agent
thereof and, at the Agent's request and option, pursuant to an agreement in form
and substance satisfactory to the Agent, either (i) cause the issuer to agree to
comply without further consent of such Loan Party or such nominee, at any time
with instructions from the Agent as to such securities, or (ii) arrange for the
Agent to become the registered owner of the securities. If any securities,
whether certificated or uncertificated, or other investment property now or
hereafter acquired by any Loan Party are held by such Loan Party or its nominee
through a securities intermediary or commodity intermediary, such Loan Party
shall promptly notify the Agent thereof and, at the Agent's request and option,
pursuant to an agreement in form and substance satisfactory to the Agent, either
(A) cause such securities intermediary or (as the case may be) commodity
intermediary to agree to comply, in each case without further consent of such
Loan Party or such nominee, at any time with entitlement orders or other
instructions from the Agent to such securities intermediary as to such
securities or other investment property, or (as the case may be) to apply any
value distributed on account of any commodity contract as directed by the Agent
to such commodity intermediary, or (B) in the case of financial assets or other
investment property held through a securities intermediary, arrange for the
Agent to become the entitlement holder with respect to such investment property,
with such Loan Party being permitted, only with the consent of the Agent, to
exercise rights to withdraw or otherwise deal with such investment property. The
Agent agrees with each Loan Party that the Agent shall not give any such
entitlement orders or instructions or directions to any such issuer, securities
intermediary or commodity intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing rights by such Loan Party, unless an
Event of Default has occurred and is continuing, or, after giving effect to any
such investment and withdrawal rights not otherwise permitted by the Loan
Documents, would occur. The provisions of this paragraph shall not apply to any
financial assets credited to a securities account for which the Agent is the
securities intermediary.
(p) For each deposit account or other accounts that any Loan
Party, now or at any time hereafter, opens or maintains (other than a deposit
account for which the Agent is the depositary bank), such Loan Party shall, at
the Agent's request and option, pursuant to an agreement in form and substance
satisfactory to the Agent, either (i) cause the depositary bank or such Person
to agree to comply without further consent of such Loan Party, at any time with
instructions from the Agent to such depositary bank or such Person directing the
disposition of funds from time to time credited to or held in such deposit
account or other account, as the case may be, or (ii) arrange for the Agent to
become the customer of the depositary bank or other Person with respect to the
deposit account or other account, with such Loan Party being permitted, only
with the consent of the Agent, to exercise rights to withdraw funds from such
deposit account or other account. The provisions of this paragraph shall not
apply to (A) a deposit account for which the Agent is in automatic control, (B)
any deposit accounts specially and exclusively used for payroll, payroll taxes
and other employee wage and benefit payments to or for the benefit of such Loan
Party's salaried employees, (C) the deposit accounts or other accounts listed on
Schedule 3.02(p), and (D) deposit accounts or local bank accounts not subject to
the Agent's control so long as (1) the aggregate amount of funds on deposit in
all such local bank accounts does not exceed $500,000, and (2) the aggregate
amount of funds on deposit in any such local bank account does not exceed
$50,000.
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(q) No Loan Party holds any commercial tort claims, as defined
in Article 9 of the Uniform Commercial Code, except as indicated in the
Perfection Certificates. If any of the Loan Parties shall at any time acquire a
commercial tort claim, such Loan Party shall promptly notify the Agent in a
writing signed by such Loan Party of the brief details thereof and grant to the
Agent in such writing a security interest therein and in the proceeds thereof,
all upon the terms of this Agreement, with such writing to be in form and
substance reasonably satisfactory to the Agent.
(r) If any Collateral is, now or at any time hereafter, in the
possession of a bailee, the Loan Parties shall promptly notify the Agent thereof
and, at the Agent's request and option, shall promptly obtain an acknowledgement
from the bailee, in form and substance satisfactory to the Agent, that the
bailee holds such Collateral for the benefit of the Agent and such bailee's
agreement to comply, without further consent of such Loan Party, at any time
with instructions of the Agent as to such Collateral. The Agent agrees with each
Loan Party that the Agent shall not give any such instructions unless an Event
of Default has occurred and is continuing or would occur after taking into
account any action by such Loan Party with respect to the bailee.
(s) If any Loan Party, now or at any time hereafter, holds or
acquires an interest in any electronic chattel paper or any "transferable
record," as that term is defined in Section 201 of the federal Electronic
Signatures in Global and National Commerce Act, or in ss.16 of the Uniform
Electronic Transactions Act as in effect in any relevant jurisdiction, such Loan
Party shall promptly notify the Agent thereof and, at the request and option of
the Agent, shall take such action as the Agent may reasonably request to vest in
the Agent control, under ss.9-105 of the Uniform Commercial Code, of such
electronic chattel paper or control under Section 201 of the federal Electronic
Signatures in Global and National Commerce Act or, as the case may be, ss.16 of
the Uniform Electronic Transactions Act, as so in effect in such jurisdiction,
of such transferable record. The Agent agrees with each Loan Party that the
Agent will arrange, pursuant to procedures satisfactory to the Agent and so long
as such procedures will not result in the Agent's loss of control, for such Loan
Party to make alterations to the electronic chattel paper or transferable record
permitted under Uniform Commercial Code ss.9-105 or, as the case may be, Section
201 of the federal Electronic Signatures in Global and National Commerce Act or
ss.16 of the Uniform Electronic Transactions Act, unless an Event of Default has
occurred and is continuing or would occur after taking into account any action
by such Loan Party with respect to such electronic chattel paper or transferable
record.
(t) If any Loan Party has Accounts Receivable in respect of
which the Account Debtor is located in Minnesota, the Loan Parties represent and
warrant that the applicable Loan Party has filed and shall file all
legally-required Notice of Business Activities Reports and comparable reports
with the appropriate Governmental Authorities.
(u) Each Loan Party further agrees, upon the request of the
Agent and at the Agent's option, to take any and all other actions as the Agent
may determine to be necessary or useful for the attachment, perfection and
priority of, and the ability of the Agent to enforce, the Agent's security
interest in any and all of the Collateral, including, without limitation, (i)
executing, delivering and, where appropriate, filing financing statements and
amendments relating thereto, certificates and other documents or instruments as
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may be necessary to enable the Agent to perfect or from time to time renew the
security interest granted hereby or by any other Collateral Document under the
Uniform Commercial Code, to the extent, if any, that such Loan Party's signature
thereon is required therefor, including, without limitation, such financing
statements and amendments thereto, certificates and other documents as may be
necessary to perfect a security interest in any additional Collateral hereafter
acquired by such Loan Party or in any replacements or proceeds thereof, (ii)
causing the Agent's name to be noted as secured party on any certificate of
title for a titled good if such notation is a condition to attachment,
perfection or priority of, or ability of the Agent to enforce, the Agent's
security interest in such Collateral, (iii) complying with any provision of any
statute, regulation or treaty of the United States as to any Collateral if
compliance with such provision is a condition to attachment, perfection or
priority of, or ability of the Agent to enforce, the Agent's security interest
in such Collateral, (iv) obtaining governmental and other third party waivers,
consents and approvals, in form and substance satisfactory to the Agent,
including, without limitation, any consent of any licensor, lessor or other
Person obligated on Collateral, (v) obtaining waivers from mortgagees and
landlords in form and substance satisfactory to the Agent and (vi) taking all
actions under any earlier versions of the Uniform Commercial Code or under any
other law, as reasonably determined by the Agent to be applicable in any
relevant Uniform Commercial Code or other jurisdiction, including any foreign
jurisdiction.
(v) Each Loan Party authorizes and appoints the Agent and any
officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Loan Party or in the Agent's own name, for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments that may be necessary or
useful to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives said attorneys the power and right, on
behalf of such Loan Party, without notice to or assent by such Loan Party, to do
the following: (i) upon the occurrence and during the continuance of an Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise dispose of or deal with any of the Collateral in such manner as is
consistent with the Uniform Commercial Code and as fully and completely as
though the Agent were the absolute owner thereof for all purposes, and to do, at
the Loan Parties' expense, at any time, or from time to time, all acts and
things which the Agent deems necessary or useful to protect, preserve or realize
upon the Collateral and the Agent's security interest therein, in order to
effect the intent of this Agreement, all no less fully and effectively as any
Loan Party might do, including, without limitation, (A) the filing and
prosecuting of registration and transfer applications with the appropriate
federal, state or local agencies or authorities with respect to trademarks,
copyrights and patentable inventions and processes, (B) upon written notice to
such Loan Party, the exercise of voting rights with respect to voting
securities, which rights may be exercised, if the Agent so elects, with a view
to causing the liquidation of assets of the issuer of any such securities and
(C) the execution, delivery and recording, in connection with any sale or other
disposition of any Collateral, of the endorsements, assignments or other
instruments of conveyance or transfer with respect to such Collateral; and (ii)
to the extent that such Loan Party's authorization given in this subsection
3.02(v) is not sufficient, to file such financing statements with respect
hereto, with or without such Loan Party's signature, or a photocopy of this
Agreement in substitution for a financing statement, as the Agent may deem
appropriate and to execute in such Loan Party's name such financing statements
and amendments thereto and continuation statements which may require such Loan
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Party's signature. To the extent permitted by law, each Loan Party hereby
ratifies all that said attorneys shall lawfully do or cause to be done by virtue
hereof. This power of attorney is a power coupled with an interest and is
irrevocable. The powers conferred on the Agent hereunder are solely to protect
the interests of the Agent and the Lenders in the Collateral and shall not
impose any duty upon the Agent to exercise any such powers. The Agent shall be
accountable only for the amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officers, directors,
employees or agents shall be responsible to any Loan Party for any act or
failure to act, except for the Agent's own gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction.
Section 3.03 FIXTURES, ETC. It is the intention of the parties hereto
that (except for Collateral located on any Mortgaged Property) none of the
Collateral shall become fixtures and each Loan Party will take all such
reasonable action or actions as may be necessary to prevent any of the
Collateral from becoming fixtures. Without limiting the generality of the
foregoing, each Loan Party will, if requested by the Agent, use commercially
reasonable efforts to obtain waivers of Liens, in form satisfactory to the
Agent, from each lessor of real property on which any of the Collateral is or is
to be located to the extent requested by the Agent.
Section 3.04 RIGHT OF AGENT TO DISPOSE OF COLLATERAL, ETC. Upon the
occurrence and during the continuance of any Event of Default, subject to the
provisions of the Uniform Commercial Code or other applicable law, the Agent
shall have the right to take possession of the Collateral and, in addition
thereto, the right to enter upon any premises on which the Collateral or any
part thereof may be situated and remove the same therefrom. The Agent may
require the Loan Parties to make the Collateral (to the extent the same is
moveable) available to the Agent at a place to be designated by the Agent or
transfer any information related to the Collateral to the Agent by electronic
medium. The Agent may in its discretion require any Loan Party to assemble all
or any part of the Collateral at such location or locations within the
jurisdiction(s) of such Loan Party's principal office(s) or at such other
locations as the Agent may reasonably designate. Unless the Collateral is
perishable or threatens to decline speedily in value or is of a type customarily
sold on a recognized market, the Agent will give the Loan Parties at least 7
days' prior written notice of the time and place of any public sale thereof or
of the time after which any private sale or any other intended disposition
thereof is to be made. Any such notice shall be deemed to meet any requirement
hereunder or under any applicable law (including the Uniform Commercial Code)
that reasonable notification be given of the time and place of such sale or
other disposition. In addition, each Loan Party waives any and all rights that
it may have to a judicial hearing in advance of the enforcement of any of the
Agent's rights and remedies hereunder.
Section 3.05 RIGHT OF AGENT TO USE AND OPERATE COLLATERAL, ETC. Upon
the occurrence and during the continuance of any Event of Default, subject to
the provisions of the Uniform Commercial Code or other applicable law, the Agent
shall have the right and power (a) to take possession of all or any part of the
Collateral, and to exclude the Loan Parties and all Persons claiming under the
Loan Parties wholly or partly therefrom, and thereafter to hold, store, and/or
use, operate, manage and control the same, and (b) to grant a license to use, or
cause to be granted a license to use, any or all of the Patents, Trademarks and
Copyrights (in the case of Trademarks, along with the goodwill associated
therewith), but subject to the terms of any licenses. Upon any such taking of
possession, the Agent may, from time to time, at the expense of the Loan
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Parties, make all such repairs, replacements, alterations, additions and
improvements to and of the Collateral as the Agent may deem proper. In any such
case the Agent shall have the right to manage and control the Collateral and to
carry on the business and to exercise all rights and powers of the Loan Parties
in respect thereto as the Agent shall deem proper, including the right to enter
into any and all such agreements with respect to the operation of the Collateral
or any part thereof as the Agent may see fit; and the Agent shall be entitled to
collect and receive all rents, issues, profits, fees, revenues and other income
of the same and every part thereof. Such rents, issues, profits, fees, revenues
and other income shall be applied to pay the expenses of holding and operating
the Collateral and of conducting the business thereof, and of all maintenance,
repairs, replacements, alterations, additions and improvements, and to make all
payments which the Agent may be required or may elect to make, if any, for
taxes, assessments, insurance and other charges upon the Collateral or any part
thereof, and all other payments which the Agent may be required or authorized to
make under any provision of this Agreement (including legal costs and reasonable
attorneys' fees). The Agent shall apply the remainder of such rents, issues,
profits, fees, revenues and other income as provided in Section 3.06.
Section 3.06 PROCEEDS OF COLLATERAL. After deducting all reasonable
costs and expenses of collection, storage, custody, sale or other disposition
and delivery (including reasonable legal costs and attorneys' fees) and all
other charges against the Collateral, the Agent shall apply the residue of the
proceeds of any such sale or disposition to the Obligations in accordance with
the terms hereof and any surplus shall be returned to the Loan Parties or to any
Person or party lawfully entitled thereto. In the event the proceeds of any
sale, lease or other disposition of the Collateral are insufficient to pay all
of the Obligations in full, the Loan Parties will be liable for the deficiency,
together with interest thereon at the Post-Default Rate, and the cost and
expenses of collection of such deficiency, including (to the extent permitted by
law), without limitation, reasonable attorneys' fees, expenses and
disbursements.
Section 3.07 RELATION TO COLLATERAL DOCUMENTS. The provisions of this
Agreement supplement the provisions of any real estate mortgage or deed of trust
granted by any Loan Party to the Agent, for the benefit of the Lenders and the
Agent, and which secures the payment or performance of any of the Obligations.
Nothing contained in any such real estate mortgage or deed of trust shall
derogate from any of the rights or remedies of the Agent or any of the Lenders
hereunder. In addition, to the provisions of this Agreement being so read and
construed with any such mortgage or deed of trust, the provisions of this
Agreement shall be read and construed with the Collateral Documents referred to
below in the manner so indicated.
(a) PLEDGE AGREEMENTS. Concurrently herewith each Loan Party
is executing and delivering to the Agent, for the benefit of the Lenders and the
Agent, a Pledge Agreement pursuant to which such Loan Party is pledging to the
Agent (a) 100% of the shares of the Capital Stock of its Domestic Subsidiary or
Subsidiaries, and/or Audubon Europe, as the case may be, (b) 65% of the shares
of the Capital Stock of its Foreign Subsidiary or Subsidiaries (other than
Audubon Europe) and (c) all intercompany promissory notes of such Loan Party.
Such pledge shall be governed by the terms of such pledge agreement and not by
the terms of this Agreement.
(b) TRADEMARK AND PATENT AGREEMENTS. Concurrently herewith
each Loan Party is executing and delivering to the Agent, for the benefit of the
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Lenders and the Agent, a Trademark Agreement and a Patent Agreement pursuant to
which such Loan Party is assigning to the Agent, for the benefit of the Lenders
and the Agent, certain Collateral consisting of trademarks, service marks and
trademark and service xxxx rights, patent and patent rights, together with the
goodwill appurtenant thereto. The provisions of the Trademark Agreement and the
Patent Agreement are supplemental to the provisions of this Agreement, and
nothing contained in the Trademark Agreement or the Patent Agreement shall
derogate from any of the rights or remedies of the Agent or any of the Lenders
hereunder. Neither the delivery of, nor anything contained in, the Trademark
Agreement or the Patent Agreement shall be deemed to prevent or postpone the
time of attachment or perfection of any security interest in such Collateral
created hereby.
(c) COPYRIGHT MORTGAGES, ETC. Concurrently herewith each Loan
Party is also executing and delivering to the Agent, for the benefit of the
Lenders and the Agent, for recording in the United States Copyright Office (the
"COPYRIGHT OFFICE") a Memorandum of Grant of Security Interest in Copyrights.
Such Loan Party represents and warrants to the Lenders and the Agent that such
Copyright Mortgage identifies all now existing material copyrights and other
rights in and to all material copyrightable works of such Loan Party,
identified, where applicable, by title, author and/or Copyright Office
registration number and date. Each Loan Party represents and warrants to the
Lenders and the Agent that it has registered all material copyrights with the
Copyright Office, as identified in such Copyright Mortgage. Each Loan Party
covenants, promptly following such Loan Party's acquisition thereof, to provide
to the Agent like identifications of all material copyrights and other rights in
and to all material copyrightable works hereafter acquired by such Loan Party,
to register such copyrights with the Copyright Office and to execute and deliver
to the Agent, for the benefit of the Lenders and the Agent, a supplemental
Memorandum of Grant of Security Interest in Copyrights, in form and substance
satisfactory to the Agent, for the benefit of the Lenders and the Agent,
modified to reflect such subsequent acquisitions and registrations.
Section 3.08 MARSHALLING. Neither the Agent nor any Lender shall be
required to marshal any present or future collateral security (including but not
limited to the Collateral) for, or other assurances of payment of, the
Obligations or any of them or to resort to such collateral security or other
assurances of payment in any particular order, and all of the rights and
remedies of the Agent or any Lender hereunder and of the Agent or any Lender in
respect of such collateral security and other assurances of payment shall be
cumulative and in addition to all other rights and remedies, however existing or
arising. To the extent that it lawfully may, each Loan Party hereby agrees that
it will not invoke any law relating to the marshalling of collateral which might
cause delay in or impede the enforcement of the Agent's rights and remedies
under this Agreement or under any other instrument creating or evidencing any of
the Obligations or under which any of the Obligations is outstanding or by which
any of the Obligations is secured or payment thereof is otherwise assured, and,
to the extent that it lawfully may, such Loan Party hereby irrevocably waives
the benefits of all such laws.
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ARTICLE IV
FEES, PAYMENTS AND OTHER COMPENSATION
Section 4.01 AUDIT AND COLLATERAL MONITORING FEES. The Borrower
acknowledges that pursuant to Section 7.01(f), representatives of the Agent and
the Lenders may visit any or all of the Loan Parties and/or conduct audits,
inspections, valuations and/or field examinations of any or all of the Loan
Parties. The Borrower agrees to pay (i) $1,500 per day per examiner plus the
examiner's out-of-pocket costs and reasonable expenses incurred in connection
with all such visits, audits, inspections, valuations and field examinations and
(ii) the cost of all visits, audits, inspections, valuations and field
examinations conducted by a third party on behalf of the Agent or the Lenders.
Section 4.02 PAYMENTS; COMPUTATIONS AND STATEMENTS. (a) The Borrower
will make each payment under this Agreement not later than 12:00 noon (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 Agent's Account. All payments
received by the Agent after 12:00 noon (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 Borrower without set-off, counterclaim, deduction
or other defense to the Agent and the Lenders. After receipt, the 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 Agent will cause to be distributed all interest and
fees received from or for the account of the Borrower not less than once each
month and in any event promptly after receipt thereof. The Lenders and the
Borrower hereby authorize the Agent to, and the Agent may, from time to time,
charge the Loan Account of the Borrower with any amount due and payable by the
Borrower under any Loan Document. Each of the Lenders and the Borrower agrees
that the Agent shall have the right to make such charges whether or not any
Default or Event of Default shall have occurred and be continuing. Any amount
charged to the Loan Account of the Borrower shall be deemed an Obligation of the
Borrower hereunder made by the Lenders to the Borrower, funded by the Agent on
behalf of the Lenders. The Lenders and the Borrower confirm that any charges
which the Agent may so make to the Loan Account of the Borrower as herein
provided will be made as an accommodation to the Borrower and solely at the
Agent's discretion. 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 may
be. All computations of fees shall be made by the 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 Agent of an interest rate or fees hereunder shall be
conclusive and binding for all purposes in the absence of manifest error.
(b) The Agent shall provide the Borrower, promptly after the
end of each calendar month, a summary statement (in the form from time to time
used by the Agent) of the opening and closing daily balances in the Loan Account
of the Borrower during such month, the amounts and dates of all payments on
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account of the Term Loan during such month, the amount of interest accrued on
the Term Loan during such month, and the amount and nature of any charges to the
Loan Account made during such month on account of fees, commissions, expenses
and other Obligations. All entries on any such statement shall be presumed to be
correct and, 30 days after the same is sent, shall be final and conclusive
absent manifest error.
Section 4.03 SHARING OF PAYMENTS, ETC. 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 Borrower agrees 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 of 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
Borrower in the amount of such participation.
Section 4.04 APPORTIONMENT OF PAYMENTS. Subject to Section 2.02 hereof
and to any written agreement among the Agent and/or the Lenders:
(a) all payments of principal and interest in respect of the
Term Loan, all payments of fees (other than the Loan Servicing Fee set forth in
Section 2.06 hereof and the audit and collateral monitoring fee provided for in
Section 4.01) and all other payments in respect of any other Obligations, shall
be allocated by the Agent among such of the Lenders 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 the Term Loan, as designated
by the Person making payment when the payment is made.
(b) After the occurrence and during the continuance of an
Event of Default, the Agent may, and upon the direction of the Required Lenders
shall, apply all payments in respect of any Obligations and all proceeds of the
Collateral, subject to the provisions of this Agreement, (i) FIRST, to pay the
Obligations in respect of any fees, expense reimbursements, indemnities and
other amounts then due to the Agent until paid in full; (ii) SECOND, to pay
interest due in respect of the Agent Advances until paid in full; (iii) THIRD,
to pay principal of the Agent Advances until paid in full; (iv) FOURTH, ratably
to pay the Obligations in respect of any fees and indemnities then due to the
Lenders until paid in full; (v) FIFTH, ratably to pay interest due in respect of
the Term Loan until paid in full; (vi) SIXTH, ratably to pay principal of the
Term Loan until paid in full, and (vii) SEVENTH, to the ratable payment of all
other Obligations then due and payable.
(c) In each instance, so long as no Event of Default has
occurred and is continuing, Section 4.04(b) shall not be deemed to apply to any
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payment by the Borrower specified by the Borrower to the Agent to be for the
prepayment of all or part of the principal of the Term Loan in accordance with
the terms and conditions of Section 2.05.
(d) 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.
(e) 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 Agent 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 any Lender or the Agent or any Person controlling any such Lender
or the Agent 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 any Lender or the Agent or any Person controlling any
such Lender or the Agent (in each case, whether or not having the force of law),
shall (i) subject any Lender or the Agent, or any Person controlling any such
Lender or the Agent to any tax, duty or other charge with respect to this
Agreement or the Term Loan made by such Lender or the Agent, or change the basis
of taxation of payments to any Lender or the Agent or any Person controlling any
such Lender or the Agent of any amounts payable hereunder (except for taxes on
the overall net income of any Lender or the Agent or any Person controlling any
such Lender or the Agent), (ii) impose, modify or deem applicable any reserve,
special deposit or similar requirement against the Term Loan or against assets
of or held by, or deposits with or for the account of, or credit extended by,
any Lender or the Agent or any Person controlling any such Lender or the Agent
or (iii) impose on any Lender or the Agent or any Person controlling any such
Lender or the Agent any other condition regarding this Agreement or the Term
Loan, and the result of any event referred to in clauses (i), (ii) or (iii)
above shall be to increase the cost to any Lender or the Agent of making the
Term Loan or agreeing to make the Term Loan, or to reduce any amount received or
receivable by any Lender or the Agent hereunder, then, upon demand by any such
Lender or the Agent, the Borrower shall pay to such Lender or the Agent such
additional amounts as will compensate such Lender or the Agent for such
increased costs or reductions in amount.
(b) If any Lender or the Agent shall have determined that any
Capital Guideline or the 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 any Lender or the Agent or any
Person controlling such Lender or the Agent 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
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be maintained by any Lender or the Agent or any Person controlling such Lender
or the Agent, and any Lender or the Agent determines that the amount of such
capital is increased as a direct or indirect consequence of the Term Loan or any
Lender's or the Agent'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 any Lender's or the Agent's or any such other controlling Person's capital to
a level below that which such Lender or the Agent or such controlling Person
could have achieved but for such circumstances as a consequence of the Term Loan
or any agreement to make the Term Loan, or such Lender's or the Agent's or such
other controlling Person's other obligations hereunder (in each case, taking
into consideration, such Lender's or the Agent's or such other controlling
Person's policies with respect to capital adequacy), then, upon demand by any
Lender or the Agent, the Borrower shall pay to such Lender or the Agent from
time to time such additional amounts as will compensate such Lender or the Agent
for such cost of maintaining such increased capital or such reduction in the
rate of return on such Lender's or the Agent'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 10 days after the date of demand by any Lender or
the Agent until payment in full to such Lender or the Agent at the Reference
Rate. A certificate of such Lender or the Agent claiming compensation under this
Section 4.05, specifying the event herein above described and the nature of such
event shall be submitted by such Lender or the Agent to the Borrower, setting
forth the additional amount due and an explanation of the calculation thereof,
and such Lender's or the Agent's reasons for invoking the provisions of this
Section 4.05, and shall be final and conclusive absent manifest error.
ARTICLE V
CONDITIONS TO THE TERM LOAN
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 Agent:
(a) PAYMENT OF FEES, ETC. The Borrower shall have paid on or
before the date of this Agreement all fees, costs, expenses and taxes then
payable pursuant to Section 2.06 and Section 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 ARTICLE VI and in each other Loan Document, certificate
or other writing delivered to the Agent or any Lender 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 Term Loan shall not contravene
any law, rule or regulation applicable to the Agent or any Lender.
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(d) DELIVERY OF DOCUMENTS. The Agent shall have received on or
before the Effective Date the following, each in form and substance satisfactory
to the Agent and, unless indicated otherwise, dated the Effective Date:
(i) a Pledge Agreement, duly executed by each Loan
Party;
(ii) a pledge and security agreement, duly executed
by Yale Industrial Products, Inc., with respect to the pledge of the common
stock of Audubon Europe;
(iii) a Patent Agreement, duly executed by each Loan
Party;
(iv) a Trademark Agreement, duly executed by each
Loan Party;
(v) an Assignment of Trademarks and Service Marks
(U.S.), in the form of Exhibit 1 to the Trademark Agreement, duly executed by
each Loan Party;
(vi) a Copyright Mortgage, duly executed by each Loan
Party;
(vii) a Mortgage with respect to each Mortgaged
Property;
(viii) evidence of the recording of each Mortgage in
such office or offices as may be necessary or, in the opinion of the Agent,
desirable to perfect the Lien purported to be created thereby or to otherwise
protect the rights of the Agent and the Lenders thereunder;
(ix) a Title Insurance Policy with respect to each
Mortgage (other than with respect to the Mortgaged Properties listed on Schedule
1.01(E)), dated as of the Effective Date;
(x) a survey of each Mortgaged Property (other than
the Mortgaged Properties listed on Schedule 1.01(E)), in form and substance
satisfactory to the Agent, certified to the Agent and to the issuer of the
relevant Title Insurance Policy;
(xi) a copy of each letter issued by the applicable
State Governmental Authority, evidencing each Mortgaged Property's (other than
the Mortgaged Properties listed on Schedule 1.01(E)) compliance with all
applicable building codes, fire codes, other health and safety rules and
regulations, parking, density and height requirements and other building and
zoning laws;
(xii) a UCC Filing Authorization Letter, duly
executed by each Loan Party, together with appropriate financing statements on
Form UCC-1 duly filed in such office or offices as may be necessary or, in the
opinion of the Agent, desirable to perfect the security interests purported to
be created hereby and by the Collateral Documents;
(xiii) 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 (xii) above, together with copies of such financing statements, none
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of which, except as otherwise agreed in writing by the 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 Agent, shall not show any such Liens;
(xiv) the Participation Agreement, duly executed by
the Loan Parties;
(xv) the Intercreditor Agreement, duly executed by
the Working Capital Agent and the Working Capital Lenders, and acknowledged by
the Loan Parties;
(xvi) 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 to which such
Loan Party is or will be a party and the execution and delivery of the other
documents to be delivered by such Person in connection herewith and therewith;
(xvii) 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;
(xviii) 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;
(xix) 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 recent date
not more than 30 days prior to the Effective Date by an appropriate official of
the state of organization of such Loan Party which shall set forth the same
complete name of such Loan Party as is set forth herein and the organizational
number of such Loan Party, if an organized number is issued in such
jurisdiction;
(xx) a copy of the charter and by-laws, limited
liability company agreement, operating agreement, agreement of limited
partnership or other organizational document of each Loan Party, together with
all amendments thereto, certified as of the Effective Date by an Authorized
Officer of such Loan Party;
(xxi) an opinion from each of the following counsel
to the Borrower and its Subsidiaries, in form and substance satisfactory to the
Agent, as to such matters as the Agent may reasonably request:
(A) Phillips, Lytle, Xxxxxxxxx, Xxxxxx &
Xxxxx LLP, counsel to the Loan Parties;
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(B) Xxxxxxxx Xxxxx-Xxxxxx, environmental
counsel to the Loan Parties;
(C) Xxxxxxx Xxxx LLP, bond counsel to the
Loan Parties;
(D) Shook, Hardy & Bacon L.L.P., Missouri
counsel to Audubon West, Inc. and LICO Steel, Inc.;
(E) Xxxxx & Xxxx, Oklahoma counsel to Crane
Equipment & Service, Inc.;
(F) Linklaters Xxxxxx, Luxembourg counsel to
Audubon Europe; and
(G) Opinion of the Manager - Legal Affairs
of the Borrower.
(xxii) 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;
(xxiii) a copy of the Financial Statements and the
financial projections described in Section 6.01(d)(i) hereof, certified as of
the Effective Date as true and correct by a Designated Financial Officer of the
Borrower;
(xxiv) a certificate of a Designated Financial
Officer of each Loan Party, certifying as to the solvency of such Loan Party,
which certificate shall be satisfactory in form and substance to the Agent;
(xxv) evidence of the insurance coverage required by
Section 7.01(e) and the terms of each Mortgage and such other insurance coverage
with respect to the business and operations of the Loan Parties as the Agent may
reasonably request, in each case, where requested by the Agent, with such
endorsements as to the named insureds or loss payees thereunder as the Agent may
request and providing that such policy may be terminated or canceled (by the
insurer or the insured thereunder) only upon 30 days' prior written notice to
the 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 Agent
may request;
(xxvi) a certificate of an Authorized Officer of the
Borrower, certifying the names and true signatures of the persons that are
authorized to provide the Notice of Borrowing and all other notices under this
Agreement and the other Loan Documents;
(xxvii) a Landlord's Waiver and Consent, executed by
each landlord with respect to each Material Leasehold Property, together with a
copy of the relevant Lease, and all amendments thereto, between the applicable
Loan Party and the landlord party thereto;
(xxviii) copies of the Canadian Loan Documents as in
effect on the Effective Date, certified as true and correct copies thereof by an
Authorized Officer of the Borrower, together with a certificate of an Authorized
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Officer of the Borrower stating that such agreements remain in full force and
effect and that none of the Canadian Borrowers has breached or defaulted in any
of its obligations under such agreements;
(xxix) copies of the Working Capital Loan Documents
as in effect on the Effective Date, certified as true and correct copies thereof
by an Authorized Officer of the Borrower, together with a certificate of an
Authorized Officer of the Borrower stating that such agreements remain in full
force and effect and that none of the Loan Parties has breached or defaulted in
any of its obligations under such agreements;
(xxx) copies of the Senior Subordinated Note
Documents as in effect on the Effective Date, certified as true and correct
copies thereof by an Authorized Officer of the Borrower, together with a
certificate of an Authorized Officer of the Borrower stating that such
agreements remain in full force and effect and that none of the Loan Parties has
breached or defaulted in any of its obligations under such agreements;
(xxxi) an assignment agreement with respect to the
Existing Credit Facility and all related documents, duly executed by the Loan
Parties and the Existing Lender in favor of the Working Capital Agent and the
Working Capital Lenders, together with an assignment of mortgage in favor of the
Working Capital Agent and the Working Capital Lenders for each mortgage filed by
the Existing Lender on the Mortgaged Properties and UCC-3 amendments for all
UCC-1 financing statements filed by the Existing Lender and covering any portion
of the Collateral;
(xxxii) a satisfactory ASTM 1527-00 Phase I
Environmental Site Assessment ("Phase I ESA") (and, if requested by the Agent
based upon the results of such Phase I ESA, an ASTM 1527-00 Phase II
Environmental Site Assessment) of each Mortgaged Property (other than the
Mortgaged Properties listed on Schedule 1.01(E)), in form and substance and by
an independent firm satisfactory to the Agent;
(xxxiii) copies of all lockbox agreements, control
agreements and blocked account agreements delivered pursuant to the Working
Capital Loan Agreement; and
(xxxiv) such other agreements, instruments,
approvals, opinions and other documents, each satisfactory to the Agent in form
and substance, as the Agent may reasonably request.
(e) MATERIAL ADVERSE EFFECT. The Agent shall have determined,
in its sole judgment, that no event or development shall have occurred since
September 30, 2002 which could have a Material Adverse Effect.
(f) WORKING CAPITAL FINANCING. On or prior to the Effective
Date, the Agent shall have received evidence that the transactions contemplated
by the Working Capital Loan Agreement shall have been consummated.
(g) APPROVALS. All consents, authorizations and approvals of,
and filings and registrations with, and all other actions in respect of, any
Governmental Authority or other Person required in connection with the making of
the Term Loan or the conduct of the Loan Parties' business shall have been
obtained and shall be in full force and effect.
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(h) PROCEEDINGS; RECEIPT OF DOCUMENTS. All proceedings in
connection with the making of the Term Loan 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 Agent and its
counsel, and the Agent and such counsel shall have received all such information
and such counterpart originals or certified or other copies of such documents as
the Agent or such counsel may reasonably request.
(i) MANAGEMENT REFERENCE CHECKS. The Agent shall have received
satisfactory reference checks for, and shall have had an opportunity to meet
with, key management of each Loan Party.
(j) DUE DILIGENCE. The Agent shall have completed its
business, legal and collateral due diligence with respect to each Loan Party and
the results thereof shall be acceptable to the Agent, in its sole and absolute
discretion. Without limiting the foregoing, the Agent shall have received a
Field Survey and Audit, dated not earlier than 30 days prior to the Effective
Date, and such Field Survey and Audit and the results thereof shall be
acceptable to the Agent, in its sole and absolute discretion.
(k) AVAILABILITY. After giving effect to the Term Loan, the
Canadian Term Loan and the Working Capital Loans to be made on the Effective
Date, (i) Working Capital Availability shall not be less than $15,000,000 and
(ii) all liabilities of the Loan Parties shall be current. The Borrower shall
deliver to the Agent a certificate of a Designated Financial Officer of the
Borrower certifying as to the matters set forth in clauses (i) and (ii) above
and containing the calculation of Working Capital Availability.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.01 REPRESENTATIONS AND WARRANTIES. Each Loan Party hereby
represents and warrants to the Agent and the Lenders as follows:
(a) ORGANIZATION; POWERS. Each of the Borrower and its
Subsidiaries has been duly formed or organized and is validly existing and in
good standing under the laws of its jurisdiction of organization or formation.
Each of the Borrower and its Subsidiaries has all requisite power to own its
property and authority to carry on its business as now conducted and as
presently contemplated, and is qualified to do business in, and is in good
standing and duly authorized to do business in, every jurisdiction where such
qualification is required, except where the failure to have such power or
authority or to be so qualified or in good standing, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) AUTHORIZATION; ENFORCEABILITY. The borrowing of the Term
Loan and the grant of security interests pursuant to the Loan Documents are
within the power and authority of the Borrower and each of its Subsidiaries, as
applicable and have been duly authorized by all necessary action on the part of
the Borrower and each of its Subsidiaries, as applicable. This Agreement and the
other Loan Documents have been duly authorized, executed and delivered by the
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Borrower and each of its Subsidiaries, as applicable, and constitute legal,
valid and binding obligations of the Borrower and each of its Subsidiaries, as
applicable, enforceable in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
(c) GOVERNMENTAL APPROVALS; NO CONFLICTS. The borrowing of the
Term Loan and the grant of the security interests pursuant to the Loan Documents
(i) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority which has not been obtained,
except as disclosed on Schedule 6.01(c), (ii) will not violate any applicable
law, policy or regulation or the organizational documents of the Borrower or any
of its Subsidiaries or any order of any Governmental Authority, (iii) will not
violate or result in a default under any material term of any indenture,
agreement or other instrument binding upon the Borrower or any of its
Subsidiaries, or any of their assets, or give rise to a right thereunder to
require any payment to be made by the Borrower or any of its Subsidiaries, and
(iv) except for the Liens created by the Loan Documents, will not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
(d) FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE.
(i) The Loan Parties have heretofore delivered to the
Agent and the Lenders the following financial statements:
(A) the consolidated balance sheets and
statements of operations and cash flows of the Borrower and its Subsidiaries, as
of and for the Fiscal Years ended March 31, 2000, March 31, 2001, and March 31,
2002, audited and accompanied by an opinion of the Borrower's independent public
accountants;
(B) the unaudited consolidated balance sheet
and statements of operations and cash flows of the Borrower and its
Subsidiaries, as of and for the fiscal year-to-date period ended September 30,
2002, certified by a Designated Financial Officer that such financial statements
fairly present the financial condition of the Borrower and its Subsidiaries as
at such date and the results of the operations of the Borrower and its
Subsidiaries for the period ended on such date and that all such financial
statements, including the related schedules and notes thereto have been prepared
in all material respects in accordance with GAAP applied consistently throughout
the periods involved, except as disclosed on Schedule 6.01(d); and
(C) the projected consolidated balance
sheets, statements of operations and cash flows, for the Borrower and its
Subsidiaries for the Fiscal Years ended March 31, 2003 through March 31, 2007.
Except as disclosed on Schedule 6.01(d), such financial statements (except for
the projections) present fairly, in all material respects, the respective
consolidated financial position and results of operations and cash flows of the
respective entities as of such respective dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
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footnotes in the case of such unaudited or pro forma statements. The projections
were prepared by the Borrower in good faith and were based on assumptions that
were reasonable when made.
(ii) Except as disclosed on Schedule 6.01(d), since
September 30, 2002, there has been no material adverse change in the business,
assets, operations or condition, financial or otherwise, of the Borrower and its
Subsidiaries from that set forth in the September 30, 2002 financial statements
referred to in clause (B) of paragraph (i) above.
(iii) Neither the Borrower nor any of its
Subsidiaries has on the date hereof any contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments or unrealized or anticipated
losses from any unfavorable commitments in each case that are material, except
as referred to or reflected or provided for in the financial statements
described in this Section 6.01(d) or in Schedule 6.01(d) hereto, or as otherwise
permitted pursuant to this Agreement.
(iv) Schedule 6.01(d)(iv) hereto contains the
calculation of EBITDA and other financial information, including restructuring
charges for the fiscal quarters ending March 31, 2002, June 30, 2002 and
September 30, 2002.
(e) PROPERTIES.
(i) Each of the Borrower and its Subsidiaries has
good and marketable title to, or valid, subsisting and enforceable leasehold
interests in, all Property material to its business. All machinery and equipment
of each of the Borrower and its Subsidiaries is in good operating condition and
repair, and all necessary replacements of and repairs thereto have be made so as
to preserve and maintain the value and operating efficiency of such machinery
and equipment.
(ii) Set forth on Schedule 6.01(e) hereto is a
complete list of all Patents, Trademarks and Copyrights. The Borrower and its
Subsidiaries own, or are licensed to use, all Patents, Trademarks and Copyrights
and other intellectual property material to their business (collectively, the
"PROPRIETARY RIGHTS"), and to the knowledge of the Borrower and its
Subsidiaries, the use thereof by the Borrower or any of its Subsidiaries does
not infringe upon the rights of any other Person, except for any such
infringements that, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
(iii) Schedule 6.01(e) clearly identifies all
Patents, Trademarks and Copyrights that have been duly registered in, filed in
or issued by the PTO or the United States Register of Copyrights (collectively,
the "REGISTERED PROPRIETARY RIGHTS"). The Registered Proprietary Rights have
been properly maintained and renewed in accordance with all applicable
provisions of law and administrative regulations in the United States, as
applicable. The Borrower and its Subsidiaries have taken commercially reasonable
steps to protect their Registered Proprietary Rights and to maintain the
confidentiality of all Proprietary Rights that are not generally in the public
domain.
(iv) As of the date hereof, Schedule 6.01(e) contains
a true, accurate and complete list of (A) all Real Property Assets, whether
owned or leased, and (B) all Leases, subleases or assignments of Leases
(together with all amendments, modifications, supplements, renewals or
- 55 -
extensions of any thereof) affecting each Leasehold Property, regardless of
whether the Borrower or any of its Subsidiaries is the landlord or tenant
(whether directly or as an assignee or successor in interest) under such Lease,
sublease or assignment. Except as specified in Schedule 6.01(e), each agreement
listed in clause (B) of the immediately preceding sentence is in full force and
effect and neither the Borrower nor any of its Subsidiaries has any knowledge of
any default that has occurred and is continuing thereunder, and each such
agreement constitutes the legal, valid and binding obligation of the Borrower
and each of its Subsidiaries, as applicable, enforceable against the Borrower
and each of its Subsidiaries, as applicable, in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
(f) LITIGATION AND ENVIRONMENTAL MATTERS.
(i) Except as set forth on Schedule 6.01(f), there
are no Environmental Actions of any kind by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower and
its Subsidiaries, threatened against or affecting the Borrower or any of its
Subsidiaries that (A) if adversely determined, could have a Material Adverse
Effect or (B) relates to this Agreement or any other Loan Document or any
transaction contemplated hereby or thereby.
(ii) The Borrower and its Subsidiaries have taken all
necessary steps to investigate the past and present condition and usage of the
Real Property Assets and the operations conducted thereon and, based upon such
diligent investigation, have determined, except as set forth on Schedule
6.01(f), that:
(A) none of the Borrower, its Subsidiaries
or any operator of the Real Property Assets currently or formerly owned, leased
or operated by the Borrower, any of its Subsidiaries or any
predecessor-in-interest or any operations thereon are in violation or alleged
violation, in any material respect, of any Environmental Laws;
(B) neither the Borrower nor any of its
Subsidiaries has become subject to any Environmental Liabilities and do not know
of any basis for any Environmental Liabilities which could reasonably be
expected to result in any Environmental Liabilities in excess of $200,000
individually or $4,000,000 in the aggregate;
(C) neither the Borrower nor any of its
Subsidiaries has received notice from any third party including, without
limitation, any Governmental Authority, (1) that any one of them has been
identified by a Governmental Authority as a potentially responsible party under
Environmental Law; (2) that the Borrower, its Subsidiaries or any
predecessor-in-interest has generated, transported or disposed of any Hazardous
Materials at any site at which a Governmental Authority has conducted or has
ordered a party to conduct a Remedial Action, removal or other response action
pursuant to any Environmental Law; or (3) that the Borrower or any of its
Subsidiaries is or shall be a named party to any Environmental Action arising
out of any third party's incurrence of costs, expenses, losses or damages of any
kind whatsoever in connection with the Release of Hazardous Materials;
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(D) (1) no portion of the Real Property
Assets currently or formerly owned, leased or operated by the Borrower or any of
its Subsidiaries has been used for the generation, handling, processing, storage
or disposal of Hazardous Materials except in accordance in all material respects
with applicable Environmental Laws; and no underground tank or other underground
storage receptacle for Hazardous Materials is located on any portion of the Real
Property Assets currently or formerly owned, leased or operated by the Borrower
or any of its Subsidiaries; (2) there have been no Releases or threatened
Releases of Hazardous Materials on, upon, into or from the properties of the
Borrower or any of its Subsidiaries, which Releases would have a material
adverse effect on the value of any of the Real Property Assets or adjacent
properties; (3) to the best knowledge of the Borrower and its Subsidiaries,
there have been no generation, storage, disposal or Releases on, upon, from or
into any real property in the vicinity of any of the Real Property Assets which,
through soil or groundwater contamination, may have come to be located on, and
which would have a material adverse effect on the value of, any Real Property
Asset; and (4) in addition, any Hazardous Materials that have been generated on
any of the Real Property Assets currently or formerly owned, leased or operated
by the Borrower, any of its Subsidiaries or any predecessor-in-interest have
been transported offsite only by carriers having an identification number issued
by any Governmental Authority, treated or disposed of, to the knowledge of the
Borrower or any of its Subsidiaries, only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best knowledge of the
Borrower and its Subsidiaries, operating in compliance in all material respects
with such permits and applicable Environmental Laws; and
(E) none of the Borrower, its Subsidiaries
or any of the Real Property Assets are subject to any applicable Environmental
Law requiring the performance of Hazardous Material site assessments, or the
removal or remediation of Hazardous Materials, or the giving of notice to any
Governmental Authority or the recording or delivery to other Persons of an
environmental disclosure document or statement by virtue of the transactions set
forth herein and contemplated hereby, or as a condition to the recording of any
Mortgage or to the effectiveness of any other transactions contemplated hereby.
(iii) Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that, individually or in
the aggregate, has had, or materially increased the likelihood of having, a
Material Adverse Effect.
(g) COMPLIANCE WITH LAWS AND AGREEMENTS. Except as set forth
on Schedule 6.01(g), each of the Borrower and its Subsidiaries is in material
compliance with all laws, decrees, judgments, licenses, rules, regulations,
policies, permits, approvals and orders of any Governmental Authority applicable
to it, its property or the operation of its business and all material terms of
indentures, agreements and other instruments binding upon it or its property.
(h) INVESTMENT AND HOLDING COMPANY STATUS. Neither the
Borrower nor any of its Subsidiaries is (i) an "investment company", or an
"affiliated company" or a "principal underwriter" of an "investment company", as
defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended, (ii) a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as defined in, or subject to
regulation under, the Public Utility Holding Company Act of 1935, as amended or
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(iii) a "bank holding company" as defined in, or subject to regulation under,
the Bank Holding Company Act of 1956, as amended.
(i) TAXES. Except as set forth on Schedule 6.01(i), each of
the Borrower and its Subsidiaries has timely made, filed or caused to be filed
all Tax returns, declarations and reports required to have been filed or made
and has paid or caused to be paid all Taxes required to have been paid by it,
except (A) as of the Effective Date, Taxes that are being contested in good
faith by appropriate proceedings, so long as such contest operates to suspend
the enforcement of compliance therewith, the collection thereof and/or the
imposition of any penalty, fine or Lien with respect thereto, and for which the
Borrower or any of its Subsidiaries has set aside on its books adequate reserves
with respect thereto in accordance with GAAP, which reserves shall be acceptable
to Agent and (B) after the Effective Date, as permitted by Section 7.01(d).
There are no unpaid Taxes in any material amount claimed to be due by the taxing
authority of any jurisdiction, and none of the officers of the Borrower or any
of its Subsidiaries knows of any basis for any such claim.
(j) ERISA. Except as set forth on Schedule 6.01(j), neither
the Borrower nor any of its Subsidiaries has any Pension Plans. No ERISA Event
has occurred or is reasonably expected to occur with respect to any Plan.
Neither the Borrower nor any of its Subsidiaries has a present intention to
terminate any Pension Plan (except in connection with the transactions described
in Schedules 7.02(d)(ii) and 7.02(d)(iii)), with respect to which the Borrower
or any of its Subsidiaries would incur a cost of more than $100,000 to terminate
such Plan, including amounts required to be contributed to fund such Plan upon
termination thereof and all costs and expenses associated therewith, including,
without limitation, attorneys' and actuaries' fees and expenses in connection
with such termination and reasonable expenses and settlement or judgment costs
and attorneys' fees and expenses in connection with any litigation related to
such termination.
(k) DISCLOSURE. As of the Effective Date, the Borrower and its
Subsidiaries have disclosed to the Agent all material agreements, instruments
and corporate or other restrictions to which the Borrower or any of its
Subsidiaries is subject after the Effective Date, and all other matters known to
the Borrower or any of its Subsidiaries, that, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect. The
organizational structure of the Borrower and its Subsidiaries is as set forth on
Schedule 6.01(l). The information, reports, financial statements, exhibits and
schedules furnished at or prior to the Effective Date in writing by or on behalf
of the Borrower and its Subsidiaries to the Agent in connection with the
negotiation, preparation or delivery of this Agreement and the other Loan
Documents or included herein or therein or delivered pursuant hereto or thereto,
at the Effective Date, when taken as a whole do not contain any untrue statement
of material fact or omit to state any material fact necessary to make the
statements herein or therein, in light of the circumstances under which they
were made, not materially misleading. All written information furnished after
the Effective Date by the Borrower and its Subsidiaries to the Agent and/or the
Lenders in connection with this Agreement and the other Loan Documents and the
transactions contemplated hereby and thereby will be true, complete and accurate
in every material respect, or (in the case of pro forma information and
projections) prepared in good faith based on reasonable assumptions, on the date
as of which such information is stated or certified. There is no fact known to
the Borrower or any of its Subsidiaries that could reasonably be expected to
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have a Material Adverse Effect that has not been disclosed herein, in the other
Loan Documents or in a report, financial statement, exhibit, schedule,
disclosure letter or other writing furnished to the Agent for use in connection
with the transactions contemplated hereby or thereby.
(l) CAPITALIZATION. As of the Effective Date, the capital
structure and ownership of the Subsidiaries of the Borrower are correctly
described on Schedule 6.01(l). As of the Effective Date, the authorized, issued
and outstanding Capital Stock of the Borrower and each of its Subsidiaries
consists of the Capital Stock described on Schedule 6.01(l), all of which is
duly and validly issued and outstanding, fully paid and nonassessable. Except as
set forth on Schedule 6.01(l), as of the Effective Date, (x) there are no
outstanding Equity Rights with respect to the Borrower or any of its
Subsidiaries and, (y) there are no outstanding obligations of the Borrower or
any of its Subsidiaries to repurchase, redeem, or otherwise acquire any shares
of Capital Stock of or other interest in the Borrower or any of its
Subsidiaries, nor are there any outstanding obligations of the Borrower or any
of its Subsidiaries to make payments to any Person, such as "phantom stock"
payments, where the amount thereof is calculated with reference to the fair
market value or equity value of the Borrower or any of its Subsidiaries.
(m) SUBSIDIARIES.
(i) Set forth on Schedule 6.01(m) is a complete and
correct list of all Subsidiaries of the Loan Parties as of the date hereof,
together with, for each such Subsidiary, (A) the jurisdiction of organization of
such Subsidiary, (B) each Person holding ownership interests in such Subsidiary
and (C) the nature of the ownership interests held by each such Person and the
percentage of ownership of such Subsidiary represented by such ownership
interests. Except as disclosed in Schedule 6.01(m), (x) each Loan Party and its
respective Subsidiaries owns, free and clear of all Liens (other than Liens
permitted hereunder), and has the unencumbered right to vote, all outstanding
ownership interests in each Person shown to be held by it in Schedule 6.01(m),
(y) all of the issued and outstanding Capital Stock of each such Person
organized as a corporation is validly issued, fully paid and nonassessable and
(z) there are no outstanding Equity Rights with respect to such Person.
(ii) Except as set forth on Schedule 7.02(h), as of
the date of this Agreement, neither the Borrower nor any of its Subsidiaries is
subject to any indenture, agreement, instrument or other arrangement containing
any provision of the type described in Section 7.02(h) ("RESTRICTIVE
AGREEMENTS"), other than any such provision the effect of which has been
unconditionally, irrevocably and permanently waived.
(n) INDEBTEDNESS, LIENS AND AGREEMENTS.
(i) Schedule 6.01(n) contains a complete and correct
list, as of the Effective Date, of any Indebtedness or any extension of credit
(or commitment for any extension of credit) to, or guarantee by, the Borrower or
any of its Subsidiaries in an amount in excess of $100,000, and the aggregate
principal or face amount outstanding or that may become outstanding with respect
thereto is correctly described on Schedule 6.01(n).
(ii) Schedule 6.01(n) contains a complete and correct
list, as of the Effective Date, of each Lien (other than the Liens in favor of
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the Agent) securing Indebtedness of any Person and covering any property of the
Borrower or any of its Subsidiaries, and the aggregate Indebtedness secured (or
which may be secured) by each such Lien and the Property covered by each such
Lien is correctly described in the appropriate part of Schedule 6.01(n).
(iii) Schedule 6.01(n) contains a complete and
correct list, as of the Effective Date, of each contract and arrangement to
which the Borrower or any of its Subsidiaries is a party for which breach,
nonperformance, cancellation or failure to renew would have a Material Adverse
Effect other than purchase orders made in the ordinary course of business and
subject to customary terms.
(iv) To the extent requested by the Agent, true and
complete copies of each agreement listed on Schedule 6.01(n) have been delivered
to the Agent, together with all amendments, waivers and other modifications
thereto. All such agreements are valid, subsisting, in full force and effect,
are currently binding and will continue to be binding upon the Borrower and each
of its Subsidiaries that is a party thereto and, to the best knowledge of the
Borrower and its Subsidiaries, binding upon the other parties thereto in
accordance with their terms. The Borrower and its Subsidiaries are not in
default under any such agreements, the occurrence of which could have a Material
Adverse Effect.
(o) FEDERAL RESERVE REGULATIONS. Neither the Borrower nor any
of its Subsidiaries is engaged principally or as one of its important activities
in the business of extending credit for the purpose of purchasing or carrying
margin stock (as defined in Regulation U of the Board). The making of the Term
Loan hereunder, the use of the proceeds thereof as contemplated hereby, and the
security arrangements contemplated by the Loan Documents, will not violate or be
inconsistent with any of the provisions of Regulations T, U, or X of the Board.
(p) SOLVENCY. As of the Effective Date and after giving effect
to the Term Loan hereunder and the consummation of the transactions contemplated
hereby and by the Canadian Loan Documents and the Working Capital Loan
Documents:
(i) the aggregate value of all properties of the
Borrower and its Subsidiaries at their present fair saleable value on a going
concern basis (i.e., the amount that may be realized within a reasonable time,
considered to be six months to one year, either through collection or sale at
the regular market value, conceiving the latter as the amount that could be
obtained for such properties within such period by a capable and diligent
businessman from an interested buyer who is willing to purchase under ordinary
selling conditions), exceed the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities) of
the Borrower and its Subsidiaries;
(ii) the Borrower and its Subsidiaries will not, on a
consolidated basis, have an unreasonably small capital with which to conduct
their business operations as heretofore conducted; and
(iii) the Borrower and its Subsidiaries will have, on
a consolidated basis, sufficient cash flow to enable them to pay their debts as
they mature.
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(q) FORCE MAJEURE. Since September 30, 2002, none of the
business, properties and other assets of the Borrower and its Subsidiaries is
affected by any fire or other casualty, strike, lockout or other labor trouble,
embargo, sabotage, confiscation, contamination, riot, civil disturbance,
activity of armed forces or act of God that has or could reasonably be expected
to have a Material Adverse Effect.
(r) ACCOUNTS RECEIVABLE. Unless otherwise indicated to the
Agent in writing:
(i) Each Account Receivable is genuine and in all
respects what it purports to be, and it is not evidenced by a judgment;
(ii) Each Account Receivable arises out of a
completed, bona fide sale and delivery of goods or rendition of services by a
Loan Party in the ordinary course of its business and in accordance with the
terms and conditions of all purchase orders, contracts or other documents
relating thereto and forming a part of the contract between such Loan Party and
the Account Debtor, and, in the case of goods, title to the goods has passed
from the Loan Party to the Account Debtor;
(iii) Each Account Receivable is for a liquidated
amount maturing as stated in the duplicate invoice covering such sale or
rendition of services, a copy of which has been furnished or is available to the
Agent;
(iv) Each Account Receivable, and the Agent's
security interest therein, is not, and will not (by voluntary act or omission of
the Loan Parties) be in the future, subject to any offset, Lien, deduction,
defense, dispute, counterclaim or any other adverse condition except for
disputes resulting in returned goods where the amount in controversy is deemed
by the Agent to be immaterial, and each such Account Receivable is absolutely
owing to one of the Loan Parties and is not contingent in any respect or for any
reason;
(v) No Loan Party has made any agreement with any
Account Debtor for any extension, compromise, settlement or modification of any
Account Receivable or any deduction therefrom, except discounts or allowances
which are granted by the Loan Parties in the ordinary course of their businesses
for prompt payment and which are reflected in the calculation of the net amount
of each respective invoice related thereto and are reflected in the borrowing
base certificates and collateral update certificates furnished to the Agent
hereunder;
(vi) To the best knowledge of the Loan Parties, the
Account Debtor under each Account Receivable had the capacity to contract at the
time any contract or other document giving rise to an Account Receivable was
executed and such Account Debtor is not insolvent; and
(vii) To the best knowledge of the Loan Parties,
there are no proceedings or actions which are threatened or pending against any
Account Debtor which might result in any material adverse change in such Account
Debtor's financial condition or the collectability of any Account Receivable.
(s) LABOR AND EMPLOYMENT MATTERS.
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(i) Except as set forth on Schedule 6.01(s), (A) to
the knowledge of the Borrower or any of its Subsidiaries, no employee of the
Borrower or any of its Subsidiaries is represented by a labor union, no labor
union has been certified or recognized as a representative of any such employee,
and the Borrower and its Subsidiaries do not have any obligation under any
collective bargaining agreement or other agreement with any labor union or any
obligation to recognize or deal with any labor union, and there are no such
contracts or other agreements pertaining to or which determine the terms or
conditions of employment of any employee of the Borrower or any of its
Subsidiaries; (B) to the knowledge of the Borrower or any of its Subsidiaries,
there are no pending or threatened representation campaigns, elections or
proceedings; (C) the Borrower and its Subsidiaries do not have knowledge of any
strikes, slowdowns or work stoppages of any kind, or threats thereof, and no
such activities occurred during the 24-month period preceding the Effective
Date; (D) neither the Borrower nor any of its Subsidiaries has engaged in,
admitted committing or been held to have committed any unfair labor practice;
and (E) to the knowledge of the Borrower or any of its Subsidiaries, there are
no controversies or grievances between the Borrower or any of its Subsidiaries
and any of its employees or representatives thereof; in each case, which would
have a Material Adverse Effect.
(ii) Except as set forth on Schedule 6.01(s), the
Borrower and its Subsidiaries have at all times complied in all material
respects, and are in material compliance with, all applicable laws, rules and
regulations respecting employment, wages, hours, compensation, benefits, and
payment and withholding of taxes in connection with employment.
(iii) Except as set forth on Schedule 6.01(s), to the
knowledge of the Borrower or any of its Subsidiaries, the Borrower and its
Subsidiaries have at all times complied with, and are in compliance with, all
applicable laws, rules and regulations respecting occupational health and
safety, whether now existing or subsequently amended or enacted, including,
without limitation, the Occupational Safety & Health Act of 1970, 29 U.S.C.
Section 651 et seq. and the state analogies thereto, all as amended or
superseded from time to time, and any common law doctrine relating to worker
health and safety, except for noncompliance which could not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
(t) BANK ACCOUNTS. Schedule 6.01(t) lists all banks and other
financial institutions at which the Borrower and each of its Subsidiaries
maintains deposits and/or other accounts as of the Effective Date, and such
Schedule correctly identifies the name and address of each depository, the name
in which the account is held, a description of the purpose of the account, and
the complete account number.
(u) OBLIGATIONS AS SENIOR DEBT. The Obligations constitute
Senior Debt (as defined in the Senior Subordinated Note Indenture) and
Designated Senior Debt (as defined in the Senior Subordinated Note Indenture).
As such, all of the Obligations (and the Agent and Lenders) are entitled to the
benefits of each of the subordination and other provisions contained in the
Senior Subordinated Note Indenture which are available in respect of Senior Debt
and Designated Senior Debt (and to the holders thereof), and each of such
subordination and other provisions is in full force and effect and enforceable
in accordance with its terms.
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(v) SENIOR SUBORDINATED NOTE DOCUMENTS AND WORKING CAPITAL
LOAN DOCUMENTS. The Loan Parties have heretofore furnished to the Agent true,
complete and correct copies of each of the Senior Subordinated Note Documents
and the Working Capital Loan Documents (including schedules, exhibits and
annexes thereto). The Senior Subordinated Note Documents and the Working Capital
Loan Documents have not been amended, supplemented or modified, and constitute
the complete understanding among the parties thereto in respect of the matters
and transactions covered thereby, except for amendments thereto delivered to the
Agent prior to the Effective Date. Each of the Senior Subordinated Note
Documents and the Working Capital Loan Documents is in full force and effect,
and neither the Borrower nor any of its Subsidiaries is in default under any of
such documents.
(w) CERTAIN TRANSACTIONS. Except for arm's length transactions
pursuant to which the Borrower or any of its Subsidiaries makes payments in the
ordinary course of business upon terms no less favorable than the Borrower or
any of its Subsidiaries could obtain from third parties, none of the officers,
directors, or employees of the Borrower or any of its Subsidiaries is presently
a party to any transaction with the Borrower or any of its Subsidiaries (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Borrower, any corporation, partnership, trust or other entity
in which any officer, director, or any such employee has a substantial interest
or is an officer, director, trustee or partner.
(x) COLUMBUS XXXXXXXX FINANCE CORPORATION. Columbus XxXxxxxx
Finance Corporation does not (i) own any assets other than that certain
intercompany promissory note issued by Columbus XxXxxxxx Limited and made to
Columbus XxXxxxxx Finance Corporation in the aggregate face amount of
C$3,750,000, (ii) have any liabilities or (iii) engage in any business.
ARTICLE VII
COVENANTS OF THE LOAN PARTIES
Section 7.01 AFFIRMATIVE COVENANTS. So long as any principal of or
interest on the Term Loan or any other Obligation (whether or not due) shall
remain unpaid, each Loan Party covenants and agrees with the Agent and the
Lenders that:
(a) FINANCIAL STATEMENTS AND OTHER INFORMATION. The Loan
Parties will furnish to the Agent and each Lender:
(i) as soon as available and in any event within 90
days after the end of each Fiscal Year of the Borrower and its Subsidiaries:
(A) consolidated and consolidating
statements of operations and cash flows of the Borrower and its Subsidiaries for
such Fiscal Year and the related consolidated and consolidating balance sheets
of the Borrower and its Subsidiaries as at the end of such Fiscal Year, setting
forth in each case in comparative form the corresponding consolidated and
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consolidating figures for the preceding Fiscal Year, and consolidated statements
of shareholders' equity for such Fiscal Year, and
(B) an opinion of independent certified
public accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception as to
the scope of such audit) stating that the consolidated financial statements
referred to in the preceding clause (A) fairly present in all material respects
the consolidated financial condition and results of operations of the Borrower
and its Subsidiaries as at the end of, and for, such Fiscal Year in accordance
with GAAP.
(ii) as soon as available and in any event within 45
days after the end of each fiscal quarter of the Borrower and its Subsidiaries:
(A) consolidated and consolidating
statements of operations and consolidated statements of cash flows of the
Borrower and its Subsidiaries for such fiscal quarter and for the period from
the beginning of the respective Fiscal Year to the end of such fiscal quarter,
and the related consolidated and consolidating balance sheets of the Borrower
and its Subsidiaries as at the end of such period, setting forth in each case in
comparative form the corresponding consolidated and consolidating figures for
the corresponding period in the preceding Fiscal Year, and the corresponding
figures for the budgets (except with respect to consolidating balance sheets)
most recently delivered to the Agent for such period, and
(B) a certificate of a Designated Financial
Officer, which certificate shall state that said consolidated and consolidating
financial statements referred to in the preceding clause (A) fairly present in
all material respects the consolidated financial condition and results of
operations of the Borrower and its Subsidiaries as at the end of, and for, such
period (subject to normal year-end audit adjustments and the omission of
footnotes) in accordance with GAAP;
(iii) as soon as available and in any event within 30
days after the end of each of the first 11 months in each Fiscal Year of the
Borrower and its Subsidiaries:
(A) consolidated statements of operations
and cash flows of the Borrower and its Subsidiaries for such month and for the
period from the beginning of the respective Fiscal Year to the end of such
month, and the related consolidated balance sheets of the Borrower and its
Subsidiaries as at the end of such period, setting forth in each case in
comparative form the corresponding consolidated figures for the corresponding
period in the preceding Fiscal Year, and the corresponding figures for the
budgets most recently delivered to the Agent for such period, and
(B) a certificate of a Designated Financial
Officer, which certificate shall state that said consolidated financial
statements referred to in the preceding clause (A) fairly present in all
material respects the consolidated financial condition and results of operations
of the Borrower and its Subsidiaries as at the end of, and for, such period
(subject to normal year-end audit adjustments and the omission of footnotes) in
accordance with GAAP;
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(iv) as soon as available and in any event within 30
days after the beginning of each Fiscal Year of the Borrower and its
Subsidiaries, statements of budgeted consolidated and consolidating income and
statements of budgeted consolidated cash flows for the Borrower and its
Subsidiaries for each fiscal month in such period and a budgeted consolidated
balance sheet of the Borrower and its Subsidiaries as of the last day of each
fiscal month in such period, and the projected availability under the Working
Capital Borrowing Base as of the last day of each fiscal month in such period,
together with supporting assumptions which shall be reasonable when made, all
prepared in good faith in reasonable detail and consistent with the Borrower's
past practices in preparing budgets and otherwise reasonably satisfactory in
scope to the Agent;
(v) as soon as available and in any event (A) within
90 days after the end of each Fiscal Year, a Compliance Certificate duly
executed by a Designated Financial Officer with respect to the annual financial
statements delivered pursuant to subsection (a)(i) above, (B) within 45 days
after the end of each fiscal quarter of the Borrower and its Subsidiaries, a
Compliance Certificate duly executed by a Designated Financial Officer with
respect to the quarterly financial statements delivered pursuant to subsection
(a)(ii) above, and (C) within 30 days after the end of each fiscal month of the
Borrower and its Subsidiaries, a Compliance Certificate duly executed by a
Designated Financial Officer with respect to the monthly financial statements
delivered pursuant to subsection (a)(iii) above;
(vi) as soon as available and in any event no later
than 1:00 p.m. (New York City time) on Wednesday of each week (or, if such day
is not a Business Day, on the preceding Business Day) (or with such greater
frequency as the Agent may reasonably request), a borrowing base certificate in
the form delivered to the Working Capital Agent, with respect to the Collateral
of the Borrower as of the close of business on the previous Friday (or, if such
day is not a Business Day, on the preceding Business Day) (PROVIDED that
Inventory and total ineligible accounts may be calculated as of the close of
business on the last Business Day of the previous month), together with such
other information relating to the Collateral as the Agent shall reasonably
request, and accompanied by such supporting detail and documentation as the
Agent shall reasonably request;
(vii) as soon as available and in any event within 30
days after the end of each month with respect to such month (or more frequently
if requested by the Agent), (A) a collateral update certificate in the form
delivered to the Working Capital Agent, (B) an accounts receivable/loan
reconciliation report in the form delivered to the Working Capital Agent, (C) a
summary of Inventory by type and location, (D) an accounts receivable aging
report (which report shall contain amounts denominated in Dollars), and (E) such
other information relating to the Collateral as the Agent shall reasonably
request, in each case, accompanied by such supporting detail and documentation
as the Agent shall reasonably request;
(viii) as soon as available and in any event no later
than 45 days after the last Business Day of each calendar quarter, a term loan
borrowing base certificate in the form delivered to the Working Capital Agent,
together with an updated list of eligible fixed assets and such other
information relating to the term loan borrowing base collateral under the
Working Capital Loan Agreement as the Agent shall reasonably request, and
accompanied by such supporting detail and documentation as the Agent shall
reasonably request;
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(ix) as soon as available and in any event within 10
days after the end of each month (or more frequently if requested by the Agent),
a rolling 13 week cash flow projection, of the Borrower and its Subsidiaries in
a form and in such details as is reasonably satisfactory to the Agent, updating
the prior cash flow projection and, for prior periods ending up to one week
prior to the date of the report, showing actual performance and any variances of
actual performance from projected performance;
(x) promptly upon receipt thereof, copies of all
management letters and accountants' letters received by the Loan Parties;
(xi) promptly after submission to any Governmental
Authority, all documents and information furnished to such Governmental
Authority in connection with any investigation of any Loan Party other than
routine inquiries by such Governmental Authority;
(xii) as soon as possible and in any event within 5
days after execution, receipt or delivery thereof, copies of any material
notices that any Loan Party executes or receives in connection with any Material
Indebtedness (including, without limitation, the Senior Subordinated Notes and
the Working Capital Indebtedness);
(xiii) as soon as possible and in any event within 5
days after execution, receipt or delivery thereof, copies of any material
notices that any Loan Party executes or receives in connection with the sale or
other Disposition of the Capital Stock of, or all or substantially all of the
assets of, any Loan Party;
(xiv) 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;
(xv) promptly following any request therefor, such
other information regarding the operations, business affairs and financial
condition of the Loan Parties, or compliance with the terms of this Agreement,
as the Agent or any Lender may reasonably request.
(b) NOTICES OF MATERIAL EVENTS. The Loan Parties will furnish
to the Agent and each Lender prompt written notice of the following:
(i) the occurrence of any Default hereunder or any
default or event of default under any Working Capital Loan Document;
(ii) the filing or commencement of any action, suit
or proceeding by or before any arbitrator or Governmental Authority against or
affecting any Loan Party or Affiliate (A) with respect to any claim in excess of
$100,000 or (B) that, if adversely determined, could reasonably be expected to
have a Material Adverse Effect;
(iii) the occurrence of any ERISA Event related to
the Plan of any Loan Party or knowledge after due inquiry of any ERISA Event
related to a Plan of any other ERISA Affiliate that, alone or together with any
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other ERISA Events that have occurred, could reasonably be expected to result in
liability of the Loan Parties in an aggregate amount exceeding $100,000;
(iv) any other development that has, or could
reasonably be expected to have, a Material Adverse Effect.
Each notice delivered under this Section 7.01(b) shall be accompanied by a
statement of a Designated Financial Officer setting forth the details of the
event or development requiring such notice and any action taken or proposed to
be taken with respect thereto.
(c) EXISTENCE; CONDUCT OF BUSINESS. The Borrower and each of
its Subsidiaries shall do or cause to be done all things necessary to preserve,
renew and keep in full force and effect its legal existence and the rights,
licenses, permits, privileges and franchises material to the conduct of its
business; PROVIDED that the foregoing shall not prohibit any merger,
consolidation, liquidation, dissolution or any discontinuance or sale of such
business permitted under Section 7.02(d).
(d) PAYMENT OF OBLIGATIONS. The Borrower and each of its
Subsidiaries shall pay its obligations (including Tax liabilities) in an amount
in excess of $100,000, before the same shall become delinquent or in default,
except where (i) the validity or amount thereof is being contested in good faith
by appropriate proceedings, so long as such contest operates to suspend the
enforcement of compliance therewith, the collection thereof and/or the
imposition of any penalty, fine or Lien with respect thereto, (ii) such Person
has set aside on its books adequate reserves with respect thereto in accordance
with GAAP, which reserves shall be acceptable to Agent.
(e) MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower and
each of its Subsidiaries shall (i) keep and maintain all property material to
the conduct of its business in good working order and condition, ordinary wear
and tear excepted, and (ii) maintain insurance, with financially sound and
reputable insurance companies, as may be required by law and such other
insurance in such amounts and against such risks as are customarily maintained
by companies engaged in the same or similar businesses operating in the same or
similar locations, including, without limitation, business interruption and
product liability insurance. Such insurance shall be in such minimum amounts
that such Person will not be deemed a co-insurer under applicable insurance
laws, regulations and policies and otherwise shall be in such amounts, contain
such terms, be in such forms and be for such periods as may be reasonably
satisfactory to the Agent. Without limiting the generality of the foregoing, the
Borrower and each of its Subsidiaries will maintain or cause to be maintained
replacement value casualty insurance on the Collateral under such policies of
insurance, in each case with such insurance companies, in such amounts, with
such deductibles, and covering such terms and risks as are at all times
satisfactory to the Agent in its commercially reasonable judgment. All general
liability and other liability policies with respect to the Loan Parties shall
name the Agent for the benefit of the Lenders as an additional insured
thereunder as its interests may appear, and all business interruption and
casualty insurance policy shall contain a loss payable clause or endorsement,
satisfactory in form and substance to the Agent, that names the Agent for the
benefit of the Lenders as the loss payee thereunder. All policies of insurance
shall provide for at least 30 days prior written notice to the Agent of any
modifications or cancellation of such policy.
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(f) BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower and
each of its Subsidiaries shall keep proper books of record and account in which
entries are made of all dealings and transactions in relation to its business
and activities which fairly record such transactions and activities. The
Borrower and each of its Subsidiaries shall permit any representatives
designated by the Agent or any Lender to visit and inspect its properties, to
examine and make extracts from its books and records, to conduct audits,
physical counts, valuations, appraisals or examinations (whether by internal
commercial finance examiners or independent auditors) of all Collateral and the
Borrower and each of its Subsidiaries, and to discuss its affairs, finances and
condition with its officers and independent accountants at any reasonable times
and as frequently as the Agent deems appropriate provided that, so long as no
Default has occurred and is continuing, (i) all such visits shall be on
reasonable prior notice, at reasonable times during regular business hours, and
(ii) the Agent and the Lenders shall not conduct any such audit, valuation or
appraisal, in each case, more than once each year. The Borrower shall, in
accordance with Section 4.01, reimburse the Agent and the Lenders for all costs
incurred in connection with such audits, physical counts, valuations, appraisals
or examinations. Each of the Loan Parties authorizes the Agent and, if
accompanied by the Agent, the Lenders to communicate directly with such Loan
Party's independent certified public accountants and authorizes such accountants
to disclose to the Agent and the Lenders any and all financial statements and
other supporting financial documents and schedules including copies of any
management letters with respect to the business, financial condition and other
affairs of the Borrower or any of its Subsidiaries. At the request of the Agent,
each Loan Party shall deliver a letter addressed to such accountants instructing
them to comply with the provisions of this Section 7.01(f). The Loan Parties, in
consultation with the Agent, will arrange for a meeting to be held at least once
every year (and after the occurrence and during the continuance of a Default,
more frequently, if requested by the Agent or the Required Lenders) with the
Lenders and the Agent hereunder at which the business and operations of the Loan
Parties are discussed. The Loan Parties will permit environmental consultants
selected by the Agent to visit the properties of the Loan Parties and perform
examinations of the Real Property Assets of the Loan Parties at such times and
with such frequencies as the Agent or any Lender shall reasonably request;
PROVIDED that, so long as no Default has occurred and is continuing, the Agent
and the Lenders shall not request that the Real Property Assets of the Loan
Parties be examined by environmental consultants more frequently than once every
year commencing on the first anniversary of the Effective Date. The Borrower
shall reimburse the Agent and the Lenders for all fees, costs and expenses
charged by such environmental consultants for each such examination.
(g) FISCAL YEAR. To enable the ready and consistent
determination of compliance with the covenants set forth in Section 7.02(j)
hereof, the Borrower and each of its Subsidiaries shall maintain their current
Fiscal Year and current method of determining the last day of the first three
fiscal quarters in each Fiscal Year.
(h) COMPLIANCE WITH LAWS. The Borrower and each of its
Subsidiaries shall comply in all material respects with (i) all permits,
licenses and authorizations, including, without limitation, environmental
permits, licenses and authorizations, issued by a Governmental Authority, (ii)
all laws, rules, regulations and orders including, without limitation,
Environmental Laws, of any Governmental Authority and (iii) all contractual
obligations, in each case applicable to it or its property.
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(i) USE OF PROCEEDS. The proceeds of the Term Loan will be
used only for (i) the refinancing of Existing Indebtedness, (ii) fees and
expenses incurred in connection with the transactions contemplated by this
Agreement, the Canadian Financing Agreement and the Working Capital Loan
Agreement, and (iii) for general corporate and working capital purposes of the
Loan Parties. No part of the proceeds of the Term Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations T, U and X.
(j) CERTAIN OBLIGATIONS RESPECTING SUBSIDIARIES. Each Loan
Party will, and will cause each of its Subsidiaries to, take such action from
time to time as shall be necessary to ensure that the percentage of the issued
and outstanding shares of Capital Stock of any class or character owned by it in
any of its Subsidiaries on the date hereof is not at any time decreased, other
than by reason of transfers to another Loan Party.
(k) ERISA. The Loan Parties (i) will maintain, and cause each
ERISA Affiliate to maintain, each Plan in material compliance with the
provisions of such Plans and all applicable requirements of ERISA and of the
Internal Revenue Code and with all applicable rulings and regulations issued
under the provisions of ERISA and of the Internal Revenue Code and (ii) will not
and, to the extent authorized, will not permit any of the ERISA Affiliates to
(A) engage in any transaction with respect to any Plan which would subject any
Loan Party to either a civil penalty assessed pursuant to Section 502(i) of
ERISA or a tax imposed by Section 4975 of the Internal Revenue Code, (B) fail to
make full payment when due of all amounts which, under the provisions of any
Plan, any Loan Party or any ERISA Affiliate is required to pay as contributions
thereto, or permit to exist any accumulated funding deficiency (as such term is
defined in Section 302 of ERISA and Section 412 of the Internal Revenue Code),
whether or not waived, with respect to any Pension Plan or (C) fail to make any
payments to any Multiemployer Plan that any Loan Party or any of the ERISA
Affiliates may be required to make under any agreement relating to such
Multiemployer Plan or any law pertaining thereto.
(l) ENVIRONMENTAL MATTERS; REPORTING AND ASSESSMENTS.
(i) The Loan Parties will observe and comply in all
material respects with, and cause each of their Subsidiaries to observe and
comply in all material respects with, all Environmental Laws and all permits and
authorizations issued by any Governmental Authority under Governmental Law
(collectively, "ENVIRONMENTAL PERMITS"). The Loan Parties will give the Agent
prompt written notice of (A) any presence, Release or threat of Release of any
Hazardous Materials at or from any Real Property Asset, (B) any actual or
alleged violation as to any Environmental Law or Environmental Permit by any
Loan Party, (C) the commencement of any Environmental Action or Remedial Action
or other communication to it or of which it has knowledge, or with the exercise
of due diligence, should have had knowledge regarding the presence or suspected
presence of any Hazardous Material at, on about, under, within or in connection
with any Real Property Asset or any migration thereof from or to such Real
Property Asset, (D) the discovery of any occurrence or condition on any real
property adjoining or in the vicinity of any Real Property Asset that could
cause such Real Property Asset or any part thereof to be subject to any
restrictions on ownership, occupancy, transferability, or use, or subject the
owner or any Person having any interest in such Real Property Asset to any
liability, penalty, or disability under any Environmental Law, and (E) the
receipt of any notice or discovery of any information regarding any actual,
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alleged, or potential Release, disposal or any other presence or existence of
any Hazardous Material at, on, about, under, within, near or in connection with
any Real Property Asset; in each case, which (x) would have a material adverse
effect on any Environmental Permits held by any Loan Party, (y) will, or is
likely to, have a Material Adverse Effect, or (z) will require a material
expenditure by such Loan Party to cure such alleged problem or violation.
(ii) The Agent may, from time to time, in its
reasonable discretion, obtain one or more environmental assessments or audits of
any Real Property Asset prepared by a hydrogeologist, an independent engineer or
other qualified consultant or expert approved by the Agent to evaluate or
confirm (A) whether any Hazardous Materials are present in the soil, sediment,
air or water at such Real Property Asset and (B) whether the use and operation
of such Real Property Asset complies with all Environmental Laws; PROVIDED that,
so long as no Default has occurred and is continuing, the Agent shall not
request any such environmental assessments or audits of any Real Property Asset
more frequently than once every other year. Environmental assessments may
include, without limitation, detailed visual inspections of such Real Property
Asset, including any and all storage areas, storage tanks, drains, dry xxxxx and
leaching areas, and the taking of soil samples, surface water samples and ground
water samples, as well as such other investigations or analyses as the Agent
deems appropriate. All such environmental assessments shall be conducted and
made at the sole expense of the Borrower.
(m) MATTERS RELATING TO ADDITIONAL REAL PROPERTY COLLATERAL.
(i) In the event that any Loan Party acquires any
Material Owned Property after the Effective Date that the Agent determines is an
Additional Mortgaged Property or in the event that the Agent determines that any
Real Property Asset existing on the Effective Date has become an Additional
Mortgaged Property after the Effective Date, the Borrower shall deliver to the
Agent, as soon as practicable after the Agent has notified the Borrower that
such Real Property Asset is an Additional Mortgaged Property, fully executed and
notarized Mortgages ("ADDITIONAL MORTGAGES"), in proper form for recording in
all appropriate places in all applicable jurisdictions, encumbering the interest
of the applicable Loan Party in such Additional Mortgaged Property, together
with Title Insurance Policies or commitments therefor, and copies of all
surveys, deeds, title exception documents, flood hazard certificates and other
documents as the Agent may reasonably require, together with copies of all deeds
with respect to such Additional Mortgaged Property.
(ii) In the event that any Loan Party enters into any
Lease with respect to any Material Leasehold Property after the Effective Date,
the Borrower shall deliver to the Agent copies of the Lease, and all amendments
thereto, between the Loan Party and the landlord or tenant, together with a
Landlord's Waiver and Consent with respect thereto and where required by the
terms of any such Lease, the consent of the mortgagee, ground lessor or other
party.
(iii) If requested by the Agent, the Loan Parties
shall permit an independent real estate appraiser satisfactory to the Agent,
upon reasonable notice, to visit and inspect any Additional Mortgaged Property
for the purpose of preparing an appraisal of such Additional Mortgaged Property
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satisfying the requirements of all applicable laws and regulations (in each case
to the extent required under such laws and regulations as determined by the
Agent in its sole discretion).
(n) CASH DEPOSITS/BANK ACCOUNTS. The Loan Parties shall take
all actions necessary to maintain, preserve and protect the rights and interests
of the Agent with respect to all cash deposits of the Loan Parties and all other
proceeds of Collateral and shall not, without the Agent's prior written consent,
open any deposit or other bank account, or instruct any Account Debtor to make
payment to any account other than to an established dominion account, lockbox
account or other controlled account under the Working Capital Agent's control;
PROVIDED that so long as no Default or Event of Default shall have occurred and
be continuing, the Loan Parties shall be permitted to maintain (i) payroll
accounts and other accounts not subject to the Working Capital Agent's control
so long as the aggregate amount of funds on deposit in all such payroll accounts
does not materially exceed estimated payroll for the next payroll period, and
(ii) local bank accounts not subject to the Working Capital Agent's control so
long as (x) the aggregate amount of funds on deposit in all such local bank
accounts does not exceed $500,000, and (y) the aggregate amount of funds on
deposit in any such local bank account does not exceed $50,000.
(o) NEW GUARANTORS. The Loan Parties will cause each Domestic
Subsidiary created, acquired or otherwise existing on or after the Effective
Date to immediately become a Guarantor and a Loan Party hereunder and shall
execute and deliver, and cause such Domestic Subsidiary to execute and deliver,
to the Agent, for the benefit of the Agent and the Lenders, all such Loan
Documents and other documents, and take all such actions, and cause such
Domestic Subsidiary to take all such actions, as may be required by the Agent in
connection therewith.
(p) PUNCTUAL PAYMENT. The Loan Parties will duly and
punctually pay or cause to be paid the principal and interest on the Term Loan,
all fees and expenses, and all other Obligations under this Agreement and the
other Loan Documents to which the Borrower or any of its Subsidiaries is a
party, all in accordance with the terms of this Agreement and such other Loan
Documents.
(q) FURTHER ASSURANCES. The Loan Parties will, and will 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 the 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 Liens any of the Collateral or any other
property of any Loan Party and its 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 the Agent and
each Lender the rights now or hereafter intended to be granted to it under this
Agreement or any other Loan Document.
(r) FOREIGN PLEDGE AGREEMENTS. The Loan Parties will, within
20 days of the Effective Date, deliver to the Agent:
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(i) a pledge and security agreement, in form and
substance satisfactory to the Agent, duly executed by certain of the Loan
Parties, with respect to the pledge of the common stock of each of the following
Subsidiaries of such Loan Parties:
(A) Societe d'Exploitation des Raccords
Gautier;
(B) Univeyor Electronic A/S;
(C) Columbus XxXxxxxx de Mexico, S.A. de
C.V.; and
(D) Yale Industrial Products GmbH; and
(ii) an opinion from each of the following counsel to
such Loan Parties, in form and substance satisfactory to the Agent, as to such
matters as the Agent may reasonably request:
(A) Xxxxxxx x'Xxxxxx, French counsel to
Societe d'Exploitation des Raccords Gautier;
(B) Advokatfirmaet Xxxxx Xxxxxxx, Danish
counsel to Univeyor Electronic A/S;
(C) Xxxxxxx Lumen, Mexican counsel to
Columbus XxXxxxxx De Mexico, S.A. de C.V.; and
(D) Xxxxxxx & Partners LLP, German counsel
to Yale Industrial Products GmbH.
(s) MOTOR VEHICLE COLLATERAL. The Loan Parties will, within 90
days of the Effective Date, take such actions as may be necessary to cause the
Agent's Lien on each titled motor vehicle (the fair market value of which is
greater than $5,000) of the Loan Parties to be noted on all certificates of
title with respect to such vehicle, including, without limitation, filing
applications for new certificates of title with respect thereto.
(t) PERMITTED CORPORATE RESTRUCTURING. The Loan Parties will,
and will cause each of their Subsidiaries, within 14 days of the Effective Date,
to consummate each of the transactions contemplated in Schedule 7.02(d)(iii)
with respect to each of Spreckels Land Company, Inc., Spreckels Development
Company, Inc., Spreckels Water Company, Inc. and Spreckels Consolidated
Industries, Inc.
Section 7.02 NEGATIVE COVENANTS. So long as any principal of or
interest on the Term Loan or any other Obligation (whether or not due) shall
remain unpaid, each Loan Party covenants and agrees with the Agent and the
Lenders that:
(a) INDEBTEDNESS. The Loan Parties will not, and will not
permit any of their Subsidiaries to, create, incur, assume or permit to exist
any Indebtedness, except:
(i) Indebtedness created hereunder and under the
Canadian Financing Agreement;
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(ii) Existing Indebtedness on the Effective Date
which is set forth in Schedule 7.02(a) and has been designated on such schedule
as Indebtedness that will remain outstanding following the funding of the Term
Loan, and any extension, renewal, refunding or replacement of any such
Indebtedness; PROVIDED, HOWEVER, that (A) such extension, renewal, refunding or
replacement is pursuant to terms that are not less favorable to the Loan Parties
and the Lenders than the terms of the Indebtedness being extended, renewed,
refunded or replaced and (B) after giving effect to such extension, renewal,
refunding or replacement, the amount of such Indebtedness is not greater than
the amount of Indebtedness outstanding immediately prior to such extension,
renewal, refunding or replacement;
(iii) Intercompany loans among the Borrower and Loan
Parties which are Guarantors; PROVIDED, that (A) the Investment corresponding to
such Indebtedness is permitted pursuant Section 7.02(e) hereof, (B) such
intercompany loan is evidenced by a promissory note, (C) such promissory note is
pledged to the Working Capital Agent and the Agent, and (D) there are no
restrictions whatsoever on the ability of the applicable Loan Party to repay
such loan;
(iv) Guaranties permitted under Section 7.02(c);
(v) Indebtedness of any foreign Subsidiary of the
Borrower (other than the Canadian Borrowers) in an aggregate amount for all such
Indebtedness not to exceed the local currency equivalent (as determined by the
Agent) of $20,000,000 in the aggregate at any one time outstanding; PROVIDED
that (A) the proceeds of such Indebtedness are transferred to the Borrower and
applied to the Working Capital Loans and the Term Loan in accordance with
Section 2.05(c)(iii) and Section 2.05(d), (B) such Indebtedness is incurred
solely by such foreign Subsidiary, (C) such Indebtedness is either unsecured or
secured only by the assets of such foreign Subsidiary, and (D) no guaranty or
other credit support of any kind is provided by any Person (including, without
limitation, any Loan Party) of or for such Indebtedness or any holder thereof;
and PROVIDED, FURTHER, that the Borrower shall notify the Agent in writing in
advance prior to permitting any such foreign Subsidiary to incur any
Indebtedness under this Section 7.02(a)(v); and
(vi) Working Capital Indebtedness in an aggregate
principal amount not to exceed at any time outstanding the sum of (A) the lesser
of (1) $67,000,000 and (2) 100% of the Working Capital Borrowing Base and (B)
the outstanding principal amount of the term loan under the Working Capital Loan
Agreement as reduced from time to time by the scheduled principal payments and
prepayments of such term loan as set forth in the Working Capital Loan Agreement
as in effect on the date hereof, PROVIDED, that Working Capital Indebtedness
other than in respect of the Canadian Letter of Credit (as defined in the
Working Capital Loan Agreement as in effect on the date hereof) shall not exceed
at any time outstanding the sum of (x) the lesser of (I) $67,000,000 and (II)
100% of the Domestic Borrowing Base (as defined in the Working Capital Loan
Agreement as in effect on the date hereof) and (y) the outstanding principal
amount of the term loan under the Working Capital Loan Agreement as reduced from
time to time by the scheduled principal payments and prepayments of such term
loan as set forth in the Working Capital Loan Agreement as in effect on the date
hereof, PROVIDED, FURTHER, that the Working Capital Agent, the Working Capital
Lenders and the Loan Parties shall have executed and delivered to the Agent the
Intercreditor Agreement; and the extension of maturity, replacement, refinancing
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or modification of the terms thereof, provided that such extension, replacement,
refinancing or modification (xx) is pursuant to terms that are not less
favorable to the Loan Parties and the Lenders than the terms of the Working
Capital Indebtedness being so extended, replaced, refinanced or modified, (yy)
is subject to the Intercreditor Agreement or a similar intercreditor agreement,
in form and substance satisfactory to the Agent and the Lenders, having
substantially the same terms and conditions as the Intercreditor Agreement and
(zz) in the case of the Working Capital Term Loan, shall not exceed the
principal amount of the Working Capital Term Loan then outstanding.
(b) LIENS. The Loan Parties will not, and will not permit any
of their Subsidiaries to, create, incur, assume or permit to exist any Lien on
any Property or asset now owned or hereafter acquired by it, or assign or sell
any income or revenues (including Accounts Receivable) or rights in respect of
any thereof, except (the following being called "PERMITTED LIENS"):
(i) Liens created under the Loan Documents and the
Canadian Loan Documents;
(ii) any Lien on any property or asset of any Loan
Party existing on the Effective Date and set forth in Schedule 7.02(b)
(excluding, however, following the making of the Term Loan hereunder, the Liens
in favor of any Person other than the Agent securing Indebtedness not designated
on said schedule as Indebtedness to remain outstanding following the funding of
the Term Loan), 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;
(iii) Liens imposed by any Governmental Authority for
Taxes, assessments or charges in respect of obligations not yet delinquent or in
the case of Taxes and assessments on Properties other than Mortgaged Properties
not exceeding $250,000 in the aggregate more than 90 days overdue which are
being contested in good faith and by appropriate proceedings, so long as such
contest operates to suspend the enforcement of compliance with and/or collection
thereof, and so long as adequate reserves with respect thereto are maintained on
the books of the applicable Loan Party in accordance with GAAP and which
reserves shall be acceptable to the Agent;
(iv) landlords', carriers', warehousemen's,
mechanics', materialmen's, repairmen's or other like Liens on Properties other
than Mortgaged Properties, and vendors' Liens imposed by statute or common law
not securing the repayment of Indebtedness, arising in the ordinary course of
business which are not overdue for a period of more than 60 days or which 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, and so long as such
contest operates to suspend the enforcement of compliance with and/or collection
thereof, and Liens securing judgments (including, without limitation,
pre-judgment attachments) the existence of which do not result in an Event of
Default under Section 9.01(j) hereof;
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(v) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation and pledges or
deposits to secure the performance of bids, tenders, trade contracts (other than
for borrowed money), leases (other than capital leases), utility purchase
obligations, statutory obligations, surety and appeal bonds, performance bonds
and other obligations of a like nature incurred in the ordinary course of
business;
(vi) encumbrances on any Real Property Asset other
than a Mortgaged Property consisting of easements, rights-of-way, zoning
restrictions, easements, licenses, restrictions and other similar encumbrances
incurred in the ordinary course of business, restrictions on the use of Property
or minor imperfections in title thereto which, in the aggregate, are not
material in amount, and which do not, in the aggregate, materially detract from
the value of such Real Property Asset or materially interfere with the ordinary
conduct of the business of any Loan Party;
(vii) Liens consisting of bankers' liens and rights
of setoff, in each case, arising by operation of law, and Liens on documents
presented in letter of credit drawings;
(viii) the replacement, extension or renewal of any
Lien permitted by clauses (ii) and (vii) of this Section 7.02(b) upon or in the
same property theretofore subject thereto in connection with the replacement,
extension or renewal (without increase in the amount or any change in any direct
or contingent obligor) of the Indebtedness secured thereby; and
(ix) the Liens granted under the Working Capital Loan
Documents to secure the Working Capital Indebtedness permitted pursuant to
Section 7.02(a)(vi), provided that, the Working Capital Agent, the Working
Capital Lenders and the Loan Parties shall have executed and delivered to the
Agent the Intercreditor Agreement.
(c) CONTINGENT LIABILITIES. The Loan Parties will not, and
will not permit any of their Subsidiaries to, guarantee the Indebtedness or
other obligations of any Person, or guarantee the payment of dividends or other
distributions upon the stock of, or the earnings of, any Person, except:
(i) guarantees issued pursuant to the terms of this
Agreement, the Canadian Financing Agreement and the Working Capital Loan
Agreement;
(ii) endorsements of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business;
(iii) guarantees and letters of credit in effect on
the date hereof which are disclosed in Schedule 7.02(a), and any replacements
thereof in amounts not exceeding such guarantees; and
(iv) obligations in respect of letters of credit
issued under the Working Capital Loan Agreement.
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(d) FUNDAMENTAL CHANGES; ASSET SALES.
(i) The Loan Parties will not, and will not permit
any of their Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), except that any Loan Party may, so long
as no Default or Event of Default shall have occurred or be continuing or result
therefrom, be merged or combined with or into any other Loan Party, PROVIDED
that if such merger involves the Borrower or a Guarantor, (x) the Borrower or
such Guarantor shall be the surviving entity and (y) no Change of Control shall
result therefrom. The Loan Parties will not form any Subsidiary without the
prior written consent of the Agent. The Loan Parties will not acquire any
business or property from, or Capital Stock of, or other equity interests in, or
be a party to any acquisition of, any Person except for purchases of property to
be used in the ordinary course of business, Investments permitted under Section
7.02(e) and Capital Expenditures.
(ii) The Loan Parties will not, and will not permit
any of their Subsidiaries to, convey, sell, lease, transfer or otherwise dispose
(including any Disposition) of, in one transaction or a series of transactions,
any part of their business or property, whether now owned or hereafter acquired
(including, without limitation, receivables and leasehold interests), except:
(A) obsolete property (including leasehold
interests), tools or equipment no longer used or useful in their business, or
worn out or in need of replacement and that are replaced with assets of
reasonably equivalent value or utility or which are otherwise productive or
useful in the conduct of such Loan Party's business;
(B) any Inventory or other property sold or
disposed of in the ordinary course of business and on ordinary business terms;
(C) sales of property from a Loan Party to
another Loan Party permitted pursuant to Section 7.02(g);
(D) sales by the Borrower or any of its
Subsidiaries of the assets listed on Schedule 7.02(d)(ii) hereto in an aggregate
amount for all such sales not to exceed $5,000,000, so long as (1) no Default or
Event of Default has occurred and is continuing or would result from the sale of
any such asset, (2) each such sale is on arm's-length terms for fair and
reasonable consideration, (3) not less than 85% of the proceeds from any such
sale is in the form of cash, (4) the Net Cash Proceeds received from each such
sale are not less than, with respect to each such asset, the amount
corresponding to such asset set forth on Schedule 7.02(d)(ii) and (5) the Net
Cash Proceeds of each such sale are applied in accordance with Section
2.05(c)(ii); and
(E) sales by the Borrower or any of its
Subsidiaries of any other assets so long as (1) no Default or Event of Default
has occurred and is continuing or would result from the sale of such asset, (2)
such sale is on arm's-length terms for fair and reasonable consideration, (3)
not less than 85% of the proceeds from such sale is in the form of cash, (4) the
Net Cash Proceeds are applied in accordance with Section 2.05(c)(ii), and (5)
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the aggregate fair market value of all such assets sold during any calendar year
does not exceed $500,000.
(iii) Notwithstanding anything to the contrary
contained in this Section 7.02(d), so long as no Default or
Event of Default shall have occurred or be continuing or would
result therefrom, the Loan Parties shall be permitted to
consummate the transactions described on Schedule
7.02(d)(iii).
(e) INVESTMENTS; HEDGING AGREEMENTS.
(i) The Loan Parties will not, and will not permit
any of their Subsidiaries to, make or permit to remain outstanding any
Investment, except:
(A) Investments consisting of guarantees
permitted by Section 7.02(c);
(B) Investments by the Borrower and/or its
Subsidiaries in the Borrower or any Guarantor;
(C) Investments of the Borrower and/or its
Subsidiaries in any of the Borrower's Subsidiaries which are not Domestic
Subsidiaries; provided that the aggregate amount of such Investments made after
the Effective Date does not exceed $1,000,000;
(D) Investments existing on the Effective
Date and described on Schedule 7.02(e);
(E) Permitted Investments; and
(F) Checking and deposit accounts with banks
used in the ordinary course of business.
(ii) The Loan Parties will not, and will not permit
any of their Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business with the
prior written consent of the Agent to hedge or mitigate risks to which the Loan
Parties are exposed in the conduct of their business or the management of their
liabilities.
(f) RESTRICTED JUNIOR PAYMENTS. The Loan Parties will not, and
will not permit any of their Subsidiaries, to declare or make any Restricted
Junior Payment at any time, other than:
(i) payments of dividends or management fees by a
Subsidiary of the Borrower to the Borrower or another wholly-owned Subsidiary of
the Borrower;
(ii) payments of dividends and distributions payable
solely in common stock of such Person;
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(iii) so long as no Default shall have occurred and
be continuing and no Default shall be caused thereby, regularly scheduled
payments of interest (but not principal or premium) in respect of the Senior
Subordinated Notes on the dates and in the amounts set forth in the Senior
Subordinated Note Documents; and
(iv) payments with respect to intercompany loans
permitted under Section 7.02(a)(iii).
(g) TRANSACTIONS WITH AFFILIATES. Except as expressly
permitted by this Agreement, the Loan Parties will not, and will not permit any
of their Subsidiaries to, directly or indirectly (i) make any Investment in an
Affiliate; (ii) transfer, sell, lease, assign or otherwise dispose of any
property to an Affiliate; (iii) merge into or consolidate with an Affiliate, or
purchase or acquire property from an Affiliate; or (iv) enter into any other
transaction directly or indirectly with or for the benefit of an Affiliate
(including, without limitation, guarantees and assumptions of obligations of an
Affiliate); PROVIDED that:
(A) any Affiliate who is an individual may
serve as a director, officer, employee or consultant of any Loan Party, receive
reasonable compensation for his or her services in such capacity and benefit
from Permitted Investments to the extent specified in clause (e) of the
definition thereof;
(B) the Loan Parties may engage in and
continue the transactions with or for the benefit of Affiliates which are
described in Schedule 7.02(g) or are referred to in Sections 7.02(e) or 7.02(f)
(but only to the extent specified in such Sections); and
(C) the Loan Parties may engage in
transactions with Affiliates in the ordinary course of business on terms which
are no less favorable to the Loan Parties than those likely to be obtained in an
arms' length transaction between a Loan Party and a non-affiliated third party.
(h) RESTRICTIVE AGREEMENTS; RESTRICTIONS ON NEGATIVE PLEDGES
AND UPSTREAM LIMITATION. The Loan Parties will not, and will not permit any of
their Subsidiaries to, directly or indirectly, enter into, incur or permit to
exist any agreement or other arrangement (other than this Agreement, the
Canadian Financing Agreement and the Working Capital Loan Agreement) that
prohibits, restricts or imposes any condition upon (i) the ability of any such
Person to create, incur or permit to exist any Lien upon any of its property or
assets, or (ii) the ability of such Person to pay dividends or other
distributions with respect to any shares of its Capital Stock or other equity
interests or to make or repay loans or advances to any other Person or to
guarantee the Indebtedness of any other Person; PROVIDED that (A) the foregoing
shall not apply to restrictions and conditions imposed by law, (B) the foregoing
shall not apply to restrictions and conditions existing on the date hereof
identified on Schedule 7.02(h) (but shall apply to any extension or renewal of,
or any amendment or modification expanding the scope of, any such restriction or
condition), (C) the foregoing shall not apply to customary restrictions and
conditions contained in agreements relating to the sale of stock or assets of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(D) clause (i) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
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Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, and (E) clause (i) of the foregoing shall not
apply to customary provisions in leases and other contracts (excluding license
agreements) restricting the assignment thereof.
(i) SALE-LEASEBACK TRANSACTIONS. No Loan Party or any of its
Subsidiaries will directly or indirectly, enter into any arrangements with any
Person whereby such Person shall sell or transfer (or request another Person to
purchase) any property, real, personal or mixed, used or useful in its business,
whether now owned or hereafter acquired, and thereafter rent or lease such
property from any Person.
(j) CERTAIN FINANCIAL COVENANTS.
(i) CAPITAL EXPENDITURES. The Borrower will not make,
or permit any of its Subsidiaries to make, Capital Expenditures during any
Reference Period ending during any Fiscal Year set forth in the table below,
that exceed, in the aggregate, the amounts listed below opposite such Fiscal
Year:
---------------------------------------------------------------------
FISCAL YEAR MAXIMUM AMOUNT
-------------------------------------------------- ------------------
2003 Fiscal Year $6,000,000
-------------------------------------------------- ------------------
2004 Fiscal Year $8,000,000
-------------------------------------------------- ------------------
2005 Fiscal Year and each Fiscal Year thereafter $10,000,000
---------------------------------------------------------------------
(ii) MAXIMUM SENIOR LEVERAGE RATIO. The Borrower
shall not permit the Senior Leverage Ratio for any Reference Period ending
during a period set forth in the table below, to exceed the ratio set forth
opposite such period in such table:
---------------------------------------------------------------------
PERIOD RATIO
-------------------------------------------------- ------------------
Effective Date through September 30, 2003 3.25 to 1.00
-------------------------------------------------- ------------------
December 31, 2003 through September 30, 2004 3.00 to 1.00
-------------------------------------------------- ------------------
December 31, 2004 and each fiscal quarter
ending thereafter 2.75 to 1.00
---------------------------------------------------------------------
(iii) FIXED CHARGE COVERAGE RATIO. The Borrower shall
not permit the Fixed Charge Coverage Ratio for any Reference Period ending
during a period set forth in the table below, to be less than the ratio set
forth opposite such period in such table:
---------------------------------------------------------------------
PERIOD RATIO
-------------------------------------------------- ------------------
Effective Date through March 31, 2004 1.05 to 1.00
-------------------------------------------------- ------------------
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-------------------------------------------------- ------------------
June 30, 2004 and each fiscal quarter ending
thereafter 1.10 to 1.00
---------------------------------------------------------------------
(iv) MINIMUM NET WORTH. The Borrower shall not permit
Net Worth at any time during a period set forth in the table below, to be less
than the amounts set forth opposite such date in such table:
---------------------------------------------------------------------
PERIOD MINIMUM AMOUNT
-------------------------------------------------- ------------------
Effective Date through March 31, 2004 $72,500,000
-------------------------------------------------- ------------------
June 30, 2004 through September 30, 2004 $74,500,000
-------------------------------------------------- ------------------
December 31, 2004 and each fiscal quarter
ending thereafter $76,500,000
---------------------------------------------------------------------
(v) MINIMUM EBITDA OF THE LOAN PARTIES. The Borrower
shall not permit the EBITDA attributable to the Loan Parties for any Reference
Period to be less than $30,000,000.
(vi) MINIMUM EBITDA.
(A) The Borrower shall not permit EBITDA for
the month of November 2002 to be less than $2,400,000.
(B) The Borrower shall not permit EBITDA for
any Reference Period ending on the date set forth in the table below to be less
than the amounts set forth opposite such date in such table:
---------------------------------------------------------------------
PERIOD MINIMUM AMOUNT
-------------------------------------------------- ------------------
December 31, 2002 $44,019,000
-------------------------------------------------- ------------------
January 31, 2003 $45,605,000
-------------------------------------------------- ------------------
February 28, 2003 $45,200,000
-------------------------------------------------- ------------------
March 31, 2003 through November 30, 2003 $42,620,000
-------------------------------------------------- ------------------
December 31, 2003 through March 31, 2004 $45,000,000
---------------------------------------------------------------------
(k) LINES OF BUSINESS. The Borrower will not, and will not
permit any of its Subsidiaries to, engage to any substantial extent in any line
or lines of business activity other than (i) the types of businesses engaged in
by them as of the Effective Date and businesses substantially related thereto,
and (ii) such other lines of business as may be consented to by the Agent and
the Required Lenders.
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(l) OTHER INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, purchase, redeem, retire or otherwise acquire
for value, or set apart any money for a sinking, defeasance or other analogous
fund for the purchase, redemption, retirement or other acquisition of, or make
any voluntary payment or prepayment of the principal of or interest on, or any
other amount owing in respect of any Senior Subordinated Notes, except to the
extent permitted by Section 7.02(f).
(m) MODIFICATIONS OF CERTAIN DOCUMENTS; DESIGNATION OF SENIOR
DEBT. The Borrower will not, and will not permit any of its Subsidiaries to,
consent to any modification of or supplement to any of the provisions of any
documents or agreements evidencing or governing the Subordinated Notes, the
Working Capital Loans or any other Existing Indebtedness. The Loan Parties will
designate the Agreement and the Obligations hereunder as "Designated Senior
Debt" under the Senior Subordinated Note Indenture, and will not designate any
other Indebtedness other than the Working Capital Loans as "Designated Senior
Debt" under the Senior Subordinated Note Indenture.
(n) COLUMBUS XXXXXXXX FINANCE CORPORATION. Except as set forth
in Section 6.01(x) and as otherwise permitted by Section 7.02(d)(iii), the
Borrower will not permit Columbus XxXxxxxx Finance Corporation to own any asset,
incur any liabilities or engage in any business. The Borrower will not permit
Columbus XxXxxxxx Limited to make, or Columbus XxXxxxxx Finance Corporation to
receive, any payment in respect of that certain intercompany promissory note
issued by Columbus XxXxxxxx Limited and made to Columbus XxXxxxxx Finance
Corporation in the aggregate face amount of C$3,750,000.
ARTICLE VIII
MANAGEMENT, COLLECTION AND STATUS OF
ACCOUNTS RECEIVABLE AND OTHER COLLATERAL
Section 8.01 MANAGEMENT OF COLLATERAL. The Agent (and all Persons
designated by the Agent for such purpose) may, at any time and from time to time
after the occurrence and during the continuance of an Event of Default, whether
before or after notification to any Account Debtor and whether before or after
the maturity of any of the Obligations, (i) enforce collection of any Accounts
Receivable or contract rights of the Loan Parties by suit or otherwise; (ii)
exercise all of the rights and remedies of the Loan Parties with respect to
proceedings brought to collect any Accounts Receivable; (iii) surrender, release
or exchange all or any part of any Accounts Receivable of the Loan Parties, or
compromise or extend or renew for any period (whether or not longer than the
original period) any Indebtedness thereunder; (iv) sell or assign any Account
Receivable of the Loan Parties upon such terms, for such amount and at such time
or times as the Agent deems advisable; (v) prepare, file and sign the names of
the Loan Parties on any proof of claim in bankruptcy or other similar document
against any Account Debtor indebted on an Account Receivable of the Loan
Parties; and (vi) do all other acts and things which are necessary, in the
Agent's sole discretion, to fulfill the Obligations of the Loan Parties under
this Agreement and to allow the Agent to collect the Accounts Receivable. In
addition to any other provision hereof or in any of the other Loan Documents,
the Agent may at any time on or after the occurrence of an Event of Default, at
the sole expense of the Loan Parties, notify any parties obligated on any of the
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Accounts Receivable of the Loan Parties to make payment directly to the Agent of
any amounts due or to become due thereunder.
(b) Each Loan Party hereby appoints the Agent or its designee
on behalf of the Agent as the Loan Parties' attorney-in-fact with power
exercisable during the continuance of an Event of Default to endorse any Loan
Party's name upon any notes, acceptances, checks, drafts, money orders or other
evidences of payment relating to the Accounts Receivable, to sign any Loan
Party'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 Receivable, to send verification of Accounts
Receivable, and to notify the Postal Service authorities to change the address
for delivery of mail addressed to any Loan Party to such address as the 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 of omission or commission constituting
gross negligence or willful misconduct as determined by a final judgment of a
court of competent jurisdiction), or for any error of judgment or mistake of
fact or law; this power being coupled with an interest is irrevocable until the
Term Loan and the other Obligations under the Loan Documents are paid in full
and all of the Loan Documents are terminated.
(c) Nothing herein contained shall be construed to constitute
the Agent as agent of any Loan Party for any purpose whatsoever, and the Agent
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 of omission or
commission constituting gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction). The Agent 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 of
omission or commission constituting gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction). The Agent,
by anything herein or in any assignment or otherwise, does not assume any of the
obligations under any contract or agreement assigned to the Agent and shall not
be responsible in any way for the performance by any Loan Party of any of the
terms and conditions thereof.
(d) If any Account Receivable includes a charge for any tax
payable to any Governmental Authority, the Agent is hereby authorized (but in no
event obligated) in its discretion to pay the amount thereof to the proper
taxing authority for the Loan Parties' account and to charge the Loan Parties
therefor. The Loan Parties shall notify the Agent if any Account Receivable
includes any taxes due to any such Governmental Authority and, in the absence of
such notice, the Agent 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.
(e) Notwithstanding any other terms set forth in the Loan
Documents, the rights and remedies of the Agent and the Lenders herein provided,
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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 Loan Parties will
at such intervals as the Agent may require, execute and deliver confirmatory
written assignments of the Accounts Receivable to the Agent and furnish such
further schedules and/or information as the 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 Loan Parties shall notify the Agent 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 Agent and are to be executed and
delivered to the Agent from time to time solely for its convenience in
maintaining records of the Collateral. The Loan Parties' failure to give any of
such items to the Agent shall not affect, terminate, modify or otherwise limit
the Agent's Lien on the Collateral. The Loan Parties shall not re-date any
invoice or sale or make sales on extended dating beyond that customary in the
Loan Parties' industry, and shall not re-xxxx any Accounts Receivable without
promptly disclosing the same to the Agent and providing the Agent with a copy of
such re-billing, identifying the same as such. If the Loan Parties become aware
of anything materially detrimental to any of the Loan Parties' customers'
credit, the Loan Parties will promptly advise the Agent 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 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 Agent for the benefit of the Lenders
and Permitted Liens), and shall be fully authorized to sell, transfer, pledge
and/or grant a security interest in each and every item of said Collateral; (b)
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 an absolute sale and delivery upon the
specified terms of goods sold or services rendered by such Loan Party; (c) 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 Agent, and each Account Receivable will be paid
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 Account 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 any 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 Agent shall reasonably require;
(i) such Loan Party shall immediately notify the Agent if any Account Receivable
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arises out of contracts with any Governmental Authority, and will execute any
instruments and take any steps required by the Agent in order that all monies
due or to become due under any such contract shall be assigned to the Agent and
notice thereof given to such Governmental Authority under the Federal Assignment
of Claims Act or any similar state or local law; (j) such Loan Party will,
immediately upon learning thereof, report to the Agent 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 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 Agent may reasonably
request and such Loan Party shall promptly supply the Agent with a copy of such
count accompanied by a report of the value (based on the lower of cost (on a
first in first out basis) and market value) of such Inventory; and (n) such Loan
Party is not and shall not be entitled to pledge the Agent's or any Lender's
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 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 Agent who shall have full authority to do all acts
necessary to protect the Agent's 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 Agent may reasonably request to preserve the
Collateral. All costs and expenses incurred by the Agent by reason of the
employment of the custodian shall be the responsibility of the Borrower and
charged to the Loan Account.
Section 8.05 COMPLIANCE WITH WORKING CAPITAL LOAN AGREEMENT. The Loan
Parties shall comply with the cash management provisions of the Working Capital
Loan Agreement (or any successor or replacement agreement acceptable to the
Agent), PROVIDED that, if the Working Capital Loan Agreement shall have been
terminated and the Loan Parties shall not have entered into a successor or
replacement agreement acceptable to the Agent, then the Loan Parties shall enter
into control agreements, lockbox agreements and other similar agreements in form
and substance reasonably satisfactory to the Agent.
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 Loan Parties shall fail to pay to the Agent or the
Lenders, any principal of or interest on the Term Loan or any other Obligation
of the Loan Parties to the Agent or the Lenders when the same shall become due
and payable, whether at the due date thereof or at a date fixed for prepayment
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thereof, by acceleration of such due or prepayment date, or otherwise;
(b) any representation or warranty made or deemed made by or
on behalf of any Loan Party or any of its Subsidiaries in connection with this
Agreement, any of the other Loan Documents or any amendment or modification
hereof or thereof, or in any report, certificate, financial statement or other
document furnished pursuant to or in connection with this Agreement, any of the
other Loan Documents or any amendment or modification hereof or thereof, shall
prove to have been incorrect in any material respect when made or deemed made;
(c) the Loan Parties (i) shall fail to observe or perform any
covenant, condition or agreement contained in Sections 7.01(a), 7.01(b),
7.01(c), 7.01(e), 7.01(f), 7.01(g), 7.01(h), 7.01(i), 7.01(j), 7.01(k), 7.01(l),
7.01(n), 7.01(o), 7.01(p) or in Section 7.02 (it being expressly acknowledged
and agreed that any Event of Default resulting from the failure of the Loan
Parties at any measurement date to satisfy any financial covenant set forth in
Section 7.02(j) shall not be deemed to be "cured" or remedied by the Loan
Parties' satisfaction of such financial covenant at any subsequent measurement
date) or (ii) shall fail to observe or perform any other covenant, condition or
agreement contained in Sections 7.01(d), 7.01(m), 7.01(q), 7.01(r) or 7.01(s)
and such failure described in this clause (ii) shall continue unremedied for a
period of 10 days after the earlier of (x) the date on which any officer of any
Loan Party knows or should have known of such failure or (y) the date the
Borrower receives notice thereof from the Agent;
(d) the Borrower or any of its Subsidiaries shall fail to
observe or perform any covenant, condition or agreement contained in this
Agreement (other than those specified in clauses (a), (b) or (c) of this Section
9.01) or any other Loan Document, and such failure shall continue unremedied for
a period of 20 days after the earlier of (x) the date on which any officer of
any Loan Party knows or should have known of such failure or (y) the date the
Borrower receives notice thereof from the Agent;
(e) the Borrower or any of its Subsidiaries shall fail to make
any payment (whether of principal, interest or otherwise and regardless of
amount) in respect of any Material Indebtedness or any Material Rental
Obligation, when and as the same shall become due and payable, after giving
effect to any grace period with respect thereto;
(f) any event or condition occurs that results in (i) (A) any
Material Indebtedness of the Borrower or any of its Subsidiaries becoming due
prior to its scheduled maturity, (B) that enables or permits (with or without
the giving of notice, the lapse of time or both) the holder or holders of any
Material Indebtedness or any trustee or agent on its or their behalf to cause
such Material Indebtedness to become due, or to require the prepayment,
repurchase, redemption or defeasance thereof, prior to its scheduled maturity,
or (C) requires the Borrower or any of its Subsidiaries to offer to repay,
repurchase, redeem, or defease such Material Indebtedness, or (ii) the Lease
with respect to any Material Rental Obligation of the Borrower or any of its
Subsidiaries being terminated prior to its scheduled expiration date or that
enables or permits (with or without the giving of notice, the lapse of time or
both) the counterparty to such Lease to cause such Lease to be terminated prior
to its scheduled expiration date;
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(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation, reorganization or
other relief in respect of the Borrower or any of its Subsidiaries or its debts,
or of a substantial part of its assets, under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect
or (ii) the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any of its Subsidiaries or
for a substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for 60 days or an order or decree approving
or ordering any of the foregoing shall be entered;
(h) the Borrower or any of its Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign bankruptcy,
insolvency, receivership or similar law now or hereafter in effect, (ii) consent
to the institution of, or fail to contest in a timely and appropriate manner,
any proceeding or petition described in clause (g) of this Section 9.01, (iii)
apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Borrower or any of its
Subsidiaries or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors or (vi)
take any action for the purpose of effecting any of the foregoing;
(i) the Borrower or any of its Subsidiaries shall become
unable, admit in writing or fail generally to pay its debts as they become due;
(j) a final judgment or judgments for the payment of money (x)
in excess of $1,000,000 in the aggregate (exclusive of judgment amounts fully
covered by insurance where the insurer has admitted liability in respect of such
judgment) or (y) in excess of $1,000,000 in the aggregate (regardless of
insurance coverage), shall be rendered by one or more courts, administrative
tribunals or other bodies having jurisdiction over the Borrower or any of its
Subsidiaries and the same shall not be discharged (or provision shall not be
made for such discharge), bonded, or a stay of execution thereof shall not be
procured, within 60 days from the date of entry thereof and the Borrower or
relevant Subsidiary shall not, within said period of 60 days, or such longer
period during which execution of the same shall have been stayed, appeal
therefrom and cause the execution thereof to be stayed during such appeal;
(k) an ERISA Event shall have occurred that, in the reasonable
opinion of the Required Lenders, when taken together with all other ERISA Events
that have occurred, could reasonably be expected to have a Material Adverse
Effect;
(l) any Loan Party shall be liable for any Environmental
Liabilities payment of which could reasonably be expected to have a Material
Adverse Effect;
(m) there shall occur any Change of Control;
(n) any of the following shall occur: (i) the Liens created
hereunder or under the other Loan Documents shall at any time (other than by
reason of the Agent relinquishing such Lien) cease to constitute valid and
perfected Liens on any Collateral with an aggregate fair market value in excess
of $100,000 which is intended to be covered thereby; (ii) except for expiration
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in accordance with its terms, any Loan Document shall for whatever reason be
terminated, or shall cease to be in full force and effect; or (iii) the
enforceability of any Loan Document shall be contested by the Borrower or any of
its Subsidiaries;
(o) any bank at which any deposit account, blocked account, or
lockbox account of any Loan Party is maintained shall fail to comply with any of
the terms of any deposit account agreement, blocked account agreement, control
Agreement or similar agreement to which such bank is a party or any securities
intermediary, commodity intermediary or other financial institution at any time
in custody, control or possession of any investment property of any Loan Party
shall fail to comply with any of the terms of any investment property control
agreement to which such Person is a party;
(p) any Loan Party is enjoined, restrained or in any way
prevented by the order of any court or any Governmental Authority from
conducting all or any material part of its business for more than 15 days;
(q) any cessation of a substantial part of the business of any
Loan Party for a period which materially and adversely affects the ability of
such Person to continue its business on a profitable basis;
(r) the loss, suspension or revocation of, or failure to
renew, any license or permit now held or hereafter acquired by any Loan Party,
if such loss, suspension, revocation or failure to renew could reasonably be
expected to have a Material Adverse Effect;
(s) the indictment, or the threatened indictment of any Loan
Party under any criminal statute, or commencement or threatened commencement of
criminal or civil proceedings against any Loan Party, pursuant to which statute
or proceedings the penalties or remedies sought or available include forfeiture
to any Governmental Authority of any material portion of the property of such
Person;
(t) there shall occur any loss theft, damage or destruction of
any Collateral not fully covered (subject to such reasonable deductibles as the
Agent shall have approved) by insurance which has or could reasonably be
expected to have a Material Adverse Effect;
(u) any Guarantor shall assert that its obligations under any
Loan Document shall be invalid or unenforceable;
(v) there shall occur any material adverse change (in the
opinion of the Agent) on the businesses, operations, properties, conditions
(financial or otherwise), assets, liabilities, income or prospects of the
Borrower and its Subsidiaries;
(w) an "Event of Default" shall have occurred under the
Canadian Financing Agreement or the Working Capital Loan Agreement;
then, and in any such event, the Agent may, and shall at the request of
the Required Lenders, by notice to the Borrower, (i) declare all or any portion
of the Term Loan then outstanding to be due and payable, whereupon all or such
- 87 -
portion of the aggregate principal of the Term Loan, all accrued and unpaid
interest thereon, all fees and all other amounts payable under this Agreement
and the other Loan Documents 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 (ii) 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 (g), (h) or (i) of this Section 9.01, without
any notice to any Loan Party or any other Person or any act by the Agent or any
Lender, the Term Loan, together with all accrued and unpaid interest thereon,
all fees and all other amounts due under this Agreement and the other Loan
Documents 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.
ARTICLE X
AGENT
Section 10.01 APPOINTMENT. Each Lender hereby irrevocably appoints and
authorizes the Agent to perform the duties of the 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 Term Loan outstanding hereunder and all other
amounts accrued hereunder for the account of the Lenders and paid to the 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 the Agent
and not required to be delivered to each Lender pursuant to the terms of this
Agreement, provided that the Agent shall not have any liability to the Lenders
for the Agent's 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
Term Loan, 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 Term Loan and
Agent Advances, for the 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 the Agent of the rights and remedies
specifically authorized to be exercised by the 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 this Agreement or any other Loan Document; and (viii) subject to
Section 10.03 of this Agreement, to take such action as the Agent deems
appropriate on its behalf to administer the Term Loan and the Loan Documents and
to exercise such other powers delegated to the Agent by the terms hereof or the
other 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
Agreement and the other Loan Documents (including, without limitation,
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enforcement or collection of the Term Loan), the Agent 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.
Section 10.02 NATURE OF DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the
other Loan Documents. The duties of the Agent shall be mechanical and
administrative in nature. The Agent shall not have by reason of this Agreement
or any other Loan Document a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any other Loan Document, express or implied, is
intended to or shall be construed to impose upon the Agent any obligations in
respect of this Agreement or any other Loan Document 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 Term Loan hereunder and
shall make its own appraisal of the creditworthiness of the Loan Parties and the
value of the Collateral, and the Agent 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 their possession
before the Term Loan hereunder or at any time or times thereafter, provided
that, upon the reasonable request of a Lender, the Agent shall provide to such
Lender any documents or reports delivered to the Agent by the Loan Parties
pursuant to the terms of this Agreement or any other Loan Document. If the Agent
seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, the Agent shall send notice thereof
to each Lender. The Agent shall promptly notify each Lender any time that the
Required Lenders have instructed the Agent to act or refrain from acting
pursuant hereto.
Section 10.03 RIGHTS, EXCULPATION, ETC. The Agent and its 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 Agent (i)
may treat the payee of the Term Loan as the owner thereof until the Agent
receives written notice of the assignment or transfer thereof, pursuant to
Section 12.07 hereof, signed by such payee and in form satisfactory to the
Agent; (ii) may consult with legal counsel (including, without limitation,
counsel to the Agent or counsel to the Loan Parties), independent public
accountants, and other experts selected by any of them and shall not be liable
for any action taken or omitted to be taken in good faith by any of them 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
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
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the existence, value or collectibility of the Collateral, the existence,
priority or perfection of the Agent's Lien thereon, or any certificate prepared
by any Loan Party in connection therewith, nor shall the Agent be responsible or
liable to the Lenders for any failure to monitor or maintain any portion of the
Collateral. The Agent shall not be liable for any apportionment or distribution
of payments made in good faith pursuant to Section 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 Agent 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 other Loan Documents the Agent is
permitted or required to take or to grant, and if such instructions are promptly
requested, the Agent 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 the Agent as a result of the Agent acting or refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of the Required Lenders.
Section 10.04 RELIANCE. The 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 other Loan Documents and its
duties hereunder or thereunder, upon advice of counsel selected by it.
Section 10.05 INDEMNIFICATION. To the extent that the Agent is not
reimbursed and indemnified by any Loan Party, the Lenders will reimburse and
indemnify the Agent 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 the Agent in any way relating to or arising out
of this Agreement or any of the other Loan Documents or any action taken or
omitted by the Agent under this Agreement or any of the other 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 liability resulted from the Agent's gross negligence or willful misconduct.
The obligations of the Lenders under this Section 10.05 shall survive the
payment in full of the Term Loan and the termination of this Agreement.
Section 10.06 AGENT INDIVIDUALLY. With respect to its Pro Rata Share of
the Total Term Loan Commitment hereunder and the Term Loan made by it, the 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. The terms "Lenders" or "Required Lenders" or any similar
terms shall, unless the context clearly otherwise indicates, include the Agent
in its individual capacity as a Lender or one of the Required Lenders. The Agent
and its Affiliates may accept deposits from, lend money to, and generally engage
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in any kind of banking, trust or other business with the Borrower as if it were
not acting as the Agent pursuant hereto without any duty to account to the other
Lenders.
Section 10.07 SUCCESSOR AGENT. (a) The 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 30 Business Days' prior written notice
to the Borrower 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. 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
Agent, and the Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents. After the 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 the
Agent under this Agreement and the other Loan Documents.
(c) If a successor Agent shall not have been so appointed
within said 30 Business Day period, the Agent shall then appoint a successor
Agent who shall serve as the Agent until such time, if any, as the Required
Lenders appoint a successor Agent as provided above.
Section 10.08 COLLATERAL MATTERS.
(a) The Agent may from time to time make such disbursements
and advances ("AGENT ADVANCES") which the Agent, in its sole discretion, deems
necessary or desirable to preserve, protect, prepare for sale or lease or
dispose of the Collateral or any portion thereof, to enhance the likelihood or
maximize the amount of repayment by the Borrower of the Term Loan and the other
Obligations or to pay any other amount chargeable to the Borrower pursuant to
the terms of this Agreement, including, without limitation, costs, fees and
expenses as described in Section 12.04. The Agent Advances shall be repayable on
demand, shall bear interest at the rate per annum set forth in Section 2.04 and
shall be secured by the Collateral. The Agent Advances shall constitute
Obligations hereunder which may be charged to the Loan Account in accordance
with Section 4.02. The Agent shall notify each Lender and the Borrower in
writing of each such Agent Advance, which notice shall include a description of
the purpose of such Agent Advance. Without limitation to its obligations
pursuant to Section 10.05, each Lender agrees that it shall make available to
the Agent, upon the Agent's demand, in Dollars in immediately available funds,
the amount equal to such Lender's Pro Rata Share of each such Agent Advance. If
such funds are not made available to the Agent by such Lender, the 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 Agent, at the Federal Funds Rate for 3 Business Days
and thereafter at the Reference Rate.
(b) The Lenders hereby irrevocably authorize the Agent, at its
option and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral upon payment and satisfaction of the Term Loan and all
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other Obligations which have matured and which the Agent has been notified in
writing are then due and payable; or constituting property being sold or
disposed of in compliance with the terms 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 Agent at
any time, the Lenders will confirm in writing the 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 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 Agent, the authority to release Collateral conferred upon the
Agent under Section 10.08(b). Upon receipt by the 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 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 Agent for the
benefit of the Lenders upon such Collateral; PROVIDED, HOWEVER, that (i) the
Agent shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the 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 Agent shall have no obligation whatsoever to any
Lender 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 Agent pursuant to this Agreement or any other Loan Document 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 Agent in this Section 10.08 or in any other Loan Document, it
being understood and agreed that in respect of the Collateral, or any act,
omission or event related thereto, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's own interest in the
Collateral as one of the Lenders and that the Agent shall have no duty or
liability whatsoever to any other Lender, except as otherwise provided herein.
Section 10.09 AGENCY FOR PERFECTION. The Agent and each Lender hereby
appoints the Agent and each other Lender as agent and bailee for the purpose of
perfecting the security interests in and liens upon the Collateral in assets
which, in accordance with Article 9 of the Uniform Commercial Code, can be
perfected only by possession or control (or where the security interest of a
secured party with possession or control has priority over the security interest
of another secured party) and the Agent and each Lender hereby acknowledges that
it holds possession of or otherwise controls any such Collateral for the benefit
of the Agent and the Lenders as secured party. Should any Lender obtain
possession or control of any such Collateral, such Lender shall notify the Agent
thereof, and, promptly upon the Agent's request therefor shall deliver such
Collateral to the Agent or in accordance with the Agent's instructions. Each
Loan Party by its execution and delivery of this Agreement hereby consents to
the foregoing.
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ARTICLE XI
GUARANTY
Section 11.01 GUARANTY. Each Guarantor hereby unconditionally and
irrevocably guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all Obligations of the Borrower now
or hereafter existing under any Loan Document, whether for principal, interest
(including, without limitation, all interest that accrues after the commencement
of any Insolvency Proceeding of the Borrower), fees, commissions, expense
reimbursements, indemnifications or otherwise (such obligations, to the extent
not paid by the Borrower, being the "GUARANTEED OBLIGATIONS"), and agrees to pay
any and all expenses (including reasonable counsel fees and expenses) incurred
by the Agent and the Lenders in enforcing any rights under the guaranty set
forth in this ARTICLE XI. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrower to the Agent and the
Lenders under any Loan Document but for the fact that they are unenforceable or
not allowable due to the existence of an Insolvency Proceeding involving the
Borrower.
Section 11.02 GUARANTY ABSOLUTE. Each Guarantor guarantees 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
Agent or the Lenders with respect thereto. The obligations of each Guarantor
under this ARTICLE XI are independent of the Guaranteed Obligations, and a
separate action or actions may be brought and prosecuted against each Guarantor
to enforce such obligations, irrespective of whether any action is brought
against any Loan Party or whether any Loan Party is joined in any such action or
actions. The liability of each Guarantor under this ARTICLE XI 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 the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party 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 Loan
Party; or
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(e) any other circumstance (including, without limitation, any
statute of limitations) or any existence of or reliance on any representation by
the Agent or the Lenders that might otherwise constitute a defense available to,
or a discharge of, any Loan Party or any other guarantor or surety.
This ARTICLE XI 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 Agent, the Lenders or any other Person upon
the insolvency, bankruptcy or reorganization of the Borrower or otherwise, all
as though such payment had not been made.
Section 11.03 WAIVER. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this ARTICLE XI and any requirement that the Agent or
the Lenders exhaust any right or take any action against any Loan Party 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. Each Guarantor hereby waives any right to revoke
this ARTICLE XI, and acknowledges that this ARTICLE XI 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 XI is a
continuing guaranty and shall (a) remain in full force and effect until the
later of 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 XI and the Final Maturity Date, (b) be
binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Agent and the Lenders 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 Term Loan) 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. No Guarantor will exercise any rights that
it may now or hereafter acquire against any Loan Party or any other guarantor
that arise from the existence, payment, performance or enforcement of such
Guarantor's obligations under this ARTICLE XI, including, without limitation,
any right of subrogation, reimbursement, exoneration, contribution or
indemnification and any right to participate in any claim or remedy of the Agent
and the Lenders against any Loan Party or any 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 any Loan Party 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 XI shall
have been paid in full in cash and the Final Maturity Date shall have occurred.
If any amount shall be paid to any 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
XI and the Final Maturity Date, such amount shall be held in trust for the
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benefit of the Agent and the Lenders and shall forthwith be paid to the Agent
and the Lenders to be credited and applied to the Guaranteed Obligations and all
other amounts payable under this ARTICLE XI, 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 XI thereafter
arising. If (i) any Guarantor shall make payment to the Agent 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 XI shall be paid in
full in cash and (iii) the Final Maturity Date shall have occurred, the Agent
and the Lenders will, at such Guarantor's request and expense, execute and
deliver to such Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
such Guarantor of an interest in the Guaranteed Obligations resulting from such
payment by such Guarantor.
Section 11.06 AUDUBON EUROPE. Notwithstanding anything to the contrary
contained in this Agreement, the maximum aggregate liability of Audubon Europe
under this Guaranty in respect of the Guaranteed Obligations and under the
Working Capital Loan Agreement in respect of its guarantee thereunder shall not
exceed 95% of the aggregate of its net equity and its preferred equity
certificates, as stated in its most recently approved financial statements.
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:
Columbus XxXxxxxx Corporation
000 Xxxx Xxxxx Xxxxxxx Xxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxx, Xx.
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to:
Phillips, Lytle, Xxxxxxxxx, Xxxxxx & Xxxxx
0000 XXXX Xxxxxx
Xxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone: 000-000-0000
Telecopier: 000-000-0000
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if to the Agent, to it at the following address:
Regiment Capital III, L.P.
00 Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
with a copy to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 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 parties 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 3 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 the Agent pursuant to ARTICLE II shall not be effective until received by the
Agent.
Section 12.02 AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement, and no consent to any departure by any Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Required Lenders or by the Agent 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) reduce the principal of, or interest
on, the Term Loan 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 Term Loan, in each case
without the written consent of any Lender affected thereby, (ii) increase the
Total Term Loan Commitment without the written consent of each Lender, (iii)
change the percentage of the Term Loan Commitments or of the aggregate unpaid
principal amount of the Term Loan 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), subordinate any Lien granted in favor of the Agent for the benefit
of the Lenders, or release the Borrower or any Guarantor, or (vi) amend, modify
or waive Section 4.04 or this Section 12.02 of this Agreement, 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 the Agent,
affect the rights or duties of the Agent (but not in its capacity as a Lender)
under this Agreement or the other Loan Documents.
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Section 12.03 NO WAIVER; REMEDIES, ETC. No failure on the part of the
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 Agent 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 remedies provided by law. The rights of the Agent and the Lenders
under any Loan Document against any party thereto are not conditional or
contingent on any attempt by the Agent 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 Borrower will pay
on demand, all costs and expenses incurred by or on behalf of the Agent and each
Lender, regardless of whether the transactions contemplated hereby are
consummated, including, without limitation, reasonable fees, costs, client
charges and expenses of counsel for the Agent and each Lender, accounting, due
diligence, periodic field audits, physical counts, valuations, investigations,
searches and filings, monitoring of assets, appraisals of Collateral, title
searches and reviewing 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 Sections 7.01(m) and
7.01(o), or the review of any of the agreements, instruments and documents
referred to in Sections 7.01(f) and 7.01(l)), (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 Agent or any Lender by any Person that arises from or relates to this
Agreement, any other Loan Document, the Agent's or the Lenders' claims against
any 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 Agent or any
Lender, 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 any Loan Party, (j) all liabilities
and costs arising from or in connection with the past, present or future
operations of any 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, (k) any Environmental
Liabilities 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 any Loan Party, (l) any Environmental Liabilities
incurred in connection with any Environmental Lien, or (m) the receipt by the
Agent or any Lender of any advice from professionals with respect to any of the
foregoing. Without limitation of the foregoing or any other provision of any
Loan Document: (x) the Borrower agrees to pay all stamp, document, transfer,
recording or filing taxes or fees and similar impositions now or hereafter
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determined by the Agent or any Lender to be payable in connection with this
Agreement or any other Loan Document, and the Borrower agrees to save the Agent
and each Lender harmless from and against any and all present or future claims,
liabilities or losses with respect to or resulting from any omission to pay or
delay in paying any such taxes, fees or impositions, (y) the Borrower agrees to
pay all broker fees that may become due in connection with the transactions
contemplated by this Agreement and the other Loan Documents, and (z) if the
Borrower fails to perform any covenant or agreement contained herein or in any
other Loan Document, the Agent may itself perform or cause performance of such
covenant or agreement, and the expenses of the Agent incurred in connection
therewith shall be reimbursed on demand by the Borrower.
Section 12.05 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, the Agent or any Lender may, and is hereby
authorized to, at any time and from time to time, without notice to any Loan
Party (any such notice being expressly waived by the Loan Parties) 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 the Agent or such Lender to or for the credit
or the account of any Loan Party against any and all obligations of the Loan
Parties either now or hereafter existing under any Loan Document, irrespective
of whether or not the Agent or such Lender shall have made any demand hereunder
or thereunder and although such obligations may be contingent or unmatured. The
Agent and each Lender agrees to notify such Loan Party promptly after any such
set-off and application made by the Agent or such Lender provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agent and the Lenders under this Section 12.05
are in addition to the other rights and remedies (including other rights of
set-off) which the Agent and the Lenders may have under this Agreement or any
other Loan Documents of law or otherwise.
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 other Loan Documents shall be binding upon and inure to the benefit of each
Loan Party and the Agent and each Lender and their respective successors and
assigns; PROVIDED, HOWEVER, that none of the Loan Parties may assign or transfer
any of its rights hereunder 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, with the written consent of the Agent,
assign to one or more 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 Term Loan); PROVIDED, HOWEVER, that (i) 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 Term Loan) (except such minimum
amount shall not apply to an assignment by a Lender to an Affiliate of such
Lender or a fund or account managed by such Lender or an Affiliate of such
Lender or its investment manager), (ii) the parties to each such assignment
shall execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance, together with any promissory note subject to such assignment and
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such parties shall deliver to the Agent a processing and recordation fee of
$5,000 (except the payment of such fee shall not be required in connection with
an assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender or its investment manager)
and (iii) no written consent of the Agent shall be required in connection with
any assignment by a Lender to an Affiliate of such Lender or a fund or account
managed by such Lender or an Affiliate of such Lender or its investment manager.
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 3 Business Days after the delivery thereof to the Agent (or such shorter
period as shall be agreed to by the Agent and the parties to such assignment),
(A) 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 (B) 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). The Agent shall provide the Borrower
with notice of each assignment by a Lender which requires the Agent's consent
pursuant to this Section 12.07(b) promptly after the effectiveness of such
assignment.
(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 any Loan Party or any of its Subsidiaries or the
performance or observance by any Loan Party of any of its 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, the 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 Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to the Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental hereto and 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 Agent shall, on behalf of the Borrower,
maintain, or cause to be maintained at the Payment Office, a copy of each
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Assignment and Acceptance delivered to and accepted by it and a register (the
"REGISTER") for the recordation of the names and addresses of the Lenders and
the principal amount of the Term Loan (the "REGISTERED LOANS") from time to
time. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Lenders
shall 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 Borrower and any Lender at any reasonable time and from
time to time upon reasonable prior notice. In the case of any assignment
pursuant to Section 12.07(b)(iii), the assigning Lender shall maintain a
comparable register on behalf of the Borrower.
(iii) Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, together with any
promissory notes subject to such assignment, the Agent shall, if the Agent
consents to such assignment and if such Assignment and Acceptance has been
completed (i) accept such Assignment and Acceptance and (ii) record the
information contained therein in the Register.
(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
Agent shall treat the Person in whose name such Registered 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 a 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 Registered Loan shall provide the Agent
and the Lender with a completed Internal Revenue Service Form W-8BEN
(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 Registered Loan.
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(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 Term Loan); 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 Borrower, the Agent 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 Term Loan, (B) action directly effecting an extension of the due dates or
a decrease in the rate of interest payable on the Term Loan or the fees payable
under this Agreement, or (C) actions directly effecting a release of all or a
substantial portion of the Collateral or any Loan Party (except as set forth in
Section 10.08 of this Agreement or any other Loan Document). The Loan Parties
agree that each participant shall be entitled to the benefits of Section 2.08
and Section 4.05 of this Agreement with respect to its participation in any
portion of the Term Loan as if it was a Lender.
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. Delivery of an executed counterpart
of this Agreement by telecopier shall be equally as effective as delivery of an
original executed counterpart of this Agreement. Any party delivering an
executed counterpart of this Agreement by telecopier also shall deliver an
original executed counterpart of this Agreement but the failure to deliver an
original executed counterpart shall not affect the validity, enforceability, and
binding effect of this Agreement. The foregoing shall apply to each other Loan
Document MUTATIS MUTANDIS.
Section 12.09 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT) 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 ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS. 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 AND FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
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COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS
FOR NOTICES AS SET FORTH IN SECTION 12.01 AND TO THE SECRETARY OF STATE OF THE
STATE OF NEW YORK, SUCH SERVICE TO BECOME EFFECTIVE 10 DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE AGENT AND THE LENDERS TO SERVICE OF
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY 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 ANY LOAN PARTY HAS OR HEREAFTER MAY 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 AGENT AND
EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING
OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT OR THE 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 AGREES 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 THE AGENT
OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE 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 AGENT AND THE LENDERS ENTERING INTO
THIS AGREEMENT.
Section 12.12 CONSENT BY THE AGENT 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 the Agent or any Lender shall be permitted or required pursuant to
any provision hereof or any provision of any other agreement to which any Loan
Party is a party and to which the Agent or any Lender has succeeded thereto,
such Action shall be required to be in writing and may be withheld or denied by
the 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.
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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 the Agent or any Lender for repayment or recovery of any amount or
amounts received by the Agent or such Lender in payment or on account of any of
the Obligations, the Agent or such Lender shall give prompt notice of such claim
to each other Lender and the Borrower, and if the Agent or such Lender 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 the Agent or such Lender
or any of its property, or (ii) any good faith settlement or compromise of any
such claim effected by the Agent or such Lender 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 binding upon it notwithstanding the
cancellation of any Indebtedness hereunder or under the other Loan Documents or
the termination of this Agreement or the other Loan Documents, and (B) it shall
be and remain liable to the Agent or such Lender hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by the Agent or such Lender.
Section 12.15 INDEMNIFICATION.
(a) GENERAL INDEMNITY. 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 the Agent and each
Lender 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) the Agent's or any Lender's furnishing of funds to the Borrower
under this Agreement or the other Loan Documents, including, without limitation,
the management of the Term Loan, (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 subsection (a) 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.
(b) ENVIRONMENTAL INDEMNITY. Without limiting Section 12.15(a)
hereof, each Loan Party agrees to, jointly and severally, defend, indemnify, and
hold harmless the Indemnitees against any and all Environmental Liabilities and
all other claims, demands, penalties, fines, liability (including strict
liability), losses, damages, costs and expenses (including without limitation,
reasonable legal fees and expenses, consultant fees and laboratory fees),
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arising out of (i) any Releases or threatened Releases (x) at any property
presently or formerly owned or operated by any Loan Party or any Subsidiary of
any Loan Party, or any predecessor in interest, or (y) of any Hazardous
Materials generated and disposed of by any Loan Party or any Subsidiary of any
Loan Party, or any predecessor in interest; (ii) any violations of Environmental
Laws; (iii) any Environmental Action relating to any Loan Party or any
Subsidiary of any Loan Party, or any predecessor in interest; (iv) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of exposure to Hazardous Materials used, handled, generated, transported or
disposed by any Loan Party or any Subsidiary of any Loan Party, or any
predecessor in interest; and (v) any breach of any warranty or representation
regarding environmental matters made by the Loan Parties in Section 6.01(f) or
the breach of any covenant made by the Loan Parties in Section 7.01(l).
Notwithstanding the foregoing, the Loan Parties shall not have any obligation to
any Indemnitee under this subsection (b) regarding any potential environmental
matter covered hereunder which is caused by the gross negligence or willful
misconduct of such Indemnitee, as determined by a final judgment of a court of
competent jurisdiction.
(c) The 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. The indemnities set forth in this Section
12.15 shall survive the repayment of the Obligations and discharge of any Liens
granted under the Loan Documents.
Section 12.16 RECORDS. The unpaid principal of and interest on the Term
Loan, 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 and the Anniversary Fee, shall
at all times be ascertained from the records of the Agent, which shall be
conclusive and binding absent manifest error.
Section 12.17 BINDING EFFECT. This Agreement shall become effective
when it shall have been executed by each Loan Party, the 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 Agent, and thereafter shall be binding
upon and inure to the benefit of each Loan Party, the Agent and each Lender, and
their respective successors and assigns, except that the Loan Parties shall not
have the right to assign their 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 12.18 INTEREST. It is the intention of the parties hereto that
the Agent 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 Agent 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
Agent or such Lender notwithstanding the other provisions of this Agreement),
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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 Agent
or any Lender that is contracted for, taken, reserved, charged or received by
the Agent 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 Agent 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 Agent or such Lender, as applicable, to
the Borrower); 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 Agent 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 Agent or such Lender, as applicable, as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited by the Agent 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 Agent or such
Lender to the Borrower). All sums paid or agreed to be paid to the Agent or any
Lender for the use, forbearance or detention of sums due hereunder shall, to the
extent permitted by law applicable to the Agent or such Lender, be amortized,
prorated, allocated and spread throughout the full term of the Term Loan until
payment in full so that the rate or amount of interest on account of the Term
Loan hereunder does not exceed the maximum amount allowed by such applicable
law. If at an time and from time to time (x) the amount of interest payable to
the Agent or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to the Agent or such Lender pursuant to this Section 12.18 and (y) in
respect of any subsequent interest computation period the amount of interest
otherwise payable to the Agent or such Lender would be less than the amount of
interest payable to the Agent or such Lender computed at the Highest Lawful Rate
applicable to the Agent or such Lender, then the amount of interest payable to
the Agent or such Lender in respect of such subsequent interest computation
period shall continue to be computed at the Highest Lawful Rate applicable to
the Agent or such Lender until the total amount of interest payable to the Agent
or such Lender shall equal the total amount of interest which would have been
payable to the Agent or such Lender if the total amount of interest had been
computed without giving effect to this Section 12.18.
For purposes of this Section 12.18, the term "applicable law" shall
mean that law in effect from time to time and applicable to the loan transaction
between the Borrower, on the one hand, and the Agent and the Lenders, on the
other, that lawfully permits the charging and collection of the highest
permissible, lawful non-usurious rate of interest on such loan transaction and
this Agreement, including laws of the State of New York and, to the extent
controlling, laws of the United States of America.
The right to accelerate the maturity of the Obligations does not
include the right to accelerate any interest that has not accrued as of the date
of acceleration.
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Section 12.19 CONFIDENTIALITY. The 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 in writing by the Loan Parties as being confidential at the time the
same is delivered to such Person (and which at 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 the Agent or any Lender,
(iii) to examiners, auditors, accountants or Securitization Parties, (iv) in
connection with any litigation to which the 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 12.19. The 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 the Agent and each Lender may make disclosure as
required or requested by any Governmental Authority or representative thereof
and that the 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 12.20 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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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.
BORROWER:
---------
COLUMBUS XXXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Executive Vice President
GUARANTORS:
-----------
AUDUBON EUROPE S.A.R.L.
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Manager
AUDUBON WEST, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer
CRANE EQUIPMENT & SERVICE, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer
LICO STEEL, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer
YALE INDUSTRIAL PRODUCTS, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Treasurer
AGENT AND LENDER:
----------------
REGIMENT CAPITAL III, L.P.
By: Regiment Capital Management, L.L.C.,
its General Partner
By: Regiment Capital Advisors, L.L.C.,
its Manager
By: /s/ Xxxxxxx X. Xxxxxx
---------------------
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
LENDER:
-------
ABLECO FINANCE LLC
By: /s/ Xxxxx Xxxxx
---------------
Name: Xxxxx Xxxxx
Title: Vice President
