EXHIBIT 10.9
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FIFTH AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
BY AND AMONG
AMERICAN COMMERCIAL FINANCE CORPORATION
AS BORROWER,
THE LENDERS THAT ARE SIGNATORIES HERETO
AS THE LENDERS,
AND
FOOTHILL CAPITAL CORPORATION
AS THE ARRANGER AND ADMINISTRATIVE AGENT
DATED AS OF AUGUST 5, 2002
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FIFTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS FIFTH AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
"AGREEMENT"), is entered into as of August 5, 2002, by and among, on the one
hand, the lenders identified on the signature pages hereof (such lenders,
together with their respective successors and assigns, are referred to
hereinafter each individually as a "LENDER" and collectively as the "LENDERS"),
and FOOTHILL CAPITAL CORPORATION, a California corporation, as the arranger and
administrative agent for the Lenders ("AGENT") and, on the other hand, AMERICAN
COMMERCIAL FINANCE CORPORATION, a Delaware corporation ("BORROWER").
RECITALS
WHEREAS, Borrower, HPSC, Inc., a Delaware corporation ("HPSC"),
Existing Lenders (as such term is defined herein), Fleet National Bank, a
national banking association, as the administrative agent for the Former Lenders
(the "EXISTING AGENT"; together with the Existing Lenders, the "EXISTING LENDER
GROUP") are parties to that certain Fourth Amended and Restated Credit Agreement
dated as of May 12, 2000, as amended by that certain First Amendment to Fourth
Amended and Restated Credit Agreement dated as of December 1, 2000, as further
amended by that certain Second Amendment to Fourth Amended and Restated Credit
Agreement dated as of December 31, 2000, as further amended by that certain
Third Amendment to Fourth Amended and Restated Credit Agreement dated as of May
8, 2001, as further amended by that certain Fourth Amendment to Fourth Amended
and Restated Credit Agreement dated as of May 6, 2002, and as further amended by
that certain Fifth Amendment to Fourth Amended and Restated Credit Agreement
dated as of June 5, 2002 (as amended, restated, supplemented or otherwise
modified prior to the date hereof, the "EXISTING CREDIT AGREEMENT").
WHEREAS, concurrent herewith, HPSC, the lenders a party thereto
(collectively the "HPSC LENDERS"), and Foothill Capital Corporation, a
California corporation, as administrative agent for the HPSC Lenders (in such
capacity, together with its successors and assigns in such capacity, the "HPSC
AGENT"; and together with the HPSC Lenders, the "HPSC LENDER GROUP") are
entering into that certain Fifth Amended and Restated Loan and Security
Agreement (as amended, restated, supplemented or otherwise modified from time to
time, the "HPSC LOAN AGREEMENT").
WHEREAS, concurrent herewith, Foothill Capital Corporation, a
California corporation ("FOOTHILL") and the Existing Lender Group are entering
into that certain Purchase Agreement (the "PURCHASE AGREEMENT") whereby the
Existing Lender Group has transferred and assigned to Foothill all of the rights
and obligations of the Existing Lender Group under the Existing Loan Documents
(as such term is defined below).
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WHEREAS, concurrent herewith, Foothill, Borrower and HPSC are entering
into that certain letter agreement (the "ALLOCATION AGREEMENT") pursuant to
which Foothill, Borrower and ACFC agree that (a) the obligations of Borrower
under the Existing Credit Agreement will be amended and restated as set forth in
this Agreement, (b) $10,500,000.00 of the Indebtedness of Borrower and HPSC
under the Existing Credit Agreement shall be allocated to Borrower under this
Agreement, shall be deemed to be Advances hereunder, and shall be held by the
Lenders ratably in accordance with their Pro Rata Shares, (c) the obligations of
ACFC under the Existing Credit Agreement will be amended and restated as set
forth in the ACFC Loan Agreement, and (d) $39,864,154.41 of the Indebtedness of
Borrower and HPSC under the Existing Credit Agreement shall be allocated to HPSC
under the HPSC Agreement, shall be deemed to be Advances thereunder, and shall
be held by the HPSC Lenders ratably in accordance with their Pro Rata Shares (as
such term is defined in the HPSC Loan Agreement).
WHEREAS, it is hereby understood that no repayment of the obligations
under the Existing Credit Agreement is being effected hereby, but merely an
amendment and restatement in accordance with the terms hereof.
In consideration of the premises and the covenants and agreements
contained herein, the parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 DEFINITIONS. As used in this Agreement, the following terms shall have
the following definitions:
"ACCOUNT DEBTOR" means any Person who is or who may become obligated
under, with respect to, or on account of, an Account, chattel paper, or a
General Intangible.
"ACCOUNTS" means all of Borrower's now owned or hereafter acquired
right, title, and interest with respect to "accounts" (as that term is defined
in the Code), and any and all supporting obligations in respect thereof.
"ACH TRANSACTIONS" means any cash management or related services
(including the Automated Clearing House processing of electronic funds transfers
through the direct Federal Reserve Fedline system) provided by a Bank Product
Provider for the account of Borrower or its Subsidiaries.
"ADDITIONAL DOCUMENTS" has the meaning set forth in SECTION 4.4.
"ADVANCES" has the meaning set forth in SECTION 2.1.
"AFFILIATE" means, as applied to any Person, any other Person who,
directly or indirectly, controls, is controlled by, or is under common control
with, such Person. For
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purposes of this definition, "control" means the possession, directly or
indirectly, of the power to direct the management and policies of a Person,
whether through the ownership of Stock, by contract, or otherwise; PROVIDED,
HOWEVER, that, for purposes of the definitions of Eligible Receivables and
SECTION 7.14 hereof: (a) any Person which owns directly or indirectly 10% or
more of the securities having ordinary voting power for the election of
directors or other members of the governing body of a Person or 10% or more of
the partnership or other ownership interests of a Person (other than as a
limited partner of such Person) shall be deemed to control such Person, (b) each
director (or comparable manager) of a Person shall be deemed to be an Affiliate
of such Person, and (c) each partnership or joint venture in which a Person is a
partner or joint venturer shall be deemed to be an Affiliate of such Person.
"AFTER ACQUIRED PROPERTY" has the meaning set forth in SECTION 6.17.
"AGENT" means Foothill, solely in its capacity as agent for the
Lenders hereunder, and any successor thereto.
"AGENT'S ACCOUNT" means the account identified on SCHEDULE A-1.
"AGENT ADVANCES" has the meaning set forth in SECTION 2.3(e)(i).
"AGENT'S LIENS" means the Liens granted by Borrower to Agent for the
benefit of the Lender Group and any Bank Product Provider under this Agreement
or the other Loan Documents.
"AGENT-RELATED PERSONS" means Agent together with its Affiliates,
officers, directors, employees, and agents.
"AGREEMENT" has the meaning set forth in the preamble hereto.
"ALLOCATION AGREEMENT" has the meaning set forth in the recitals
hereto.
"APPLICABLE PREPAYMENT PREMIUM" means, as of any date of
determination, an amount equal to 1% TIMES the Maximum Revolver Amount.
"ASSIGNEE" has the meaning set forth in SECTION 14.1.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance in
the form of EXHIBIT A-1.
"AUTHORIZED PERSON" means any officer or other employee of Borrower.
"AVAILABILITY" means, as of any date of determination, if such date
is a Business Day, and determined at the close of business on the immediately
preceding Business Day, if such date of determination is not a Business Day, the
amount that Borrower is entitled to borrow as Advances under SECTION 2.1 (after
giving effect to all then
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outstanding Obligations (other than Bank Products Obligations) and all sublimits
and reserves applicable hereunder).
"BANKNORTH" means Banknorth, N.A.
"BANK PRODUCT AGREEMENTS" means those certain agreements entered
into from time to time by Borrower or its Subsidiaries in connection with any of
the Bank Products.
"BANK PRODUCT OBLIGATIONS" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Borrower or
its Subsidiaries to any Bank Product Provider pursuant to or evidenced by the
Bank Product Agreements and irrespective of whether for the payment of money,
whether direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising, and including all such amounts that Borrower is
obligated to reimburse to Agent or any member of the Lender Group as a result of
Agent or such member of the Lender Group purchasing participations or executing
indemnities or reimbursement obligations with respect to the Bank Products
provided to Borrower or its Subsidiaries pursuant to the Bank Product
Agreements.
"BANK PRODUCT PROVIDER" means (a) Xxxxx Fargo or any of its
Affiliates, or (b) a Lender or any Affiliate of a Lender.
"BANK PRODUCTS" means any service or facility extended to Borrower
or its Subsidiaries by any Bank Product Provider including: (a) credit cards,
(b) credit card processing services, (c) debit cards, (d) purchase cards, (e)
ACH Transactions, (f) cash management, including controlled disbursement,
accounts or services, or (g) Hedge Agreements.
"BANK PRODUCT RESERVES" means, as of any date of determination, the
amount of reserves that Agent has established (based upon the relevant Bank
Product Providers' reasonable determination of the credit exposure in respect of
then extant Bank Products) for Bank Products then provided or outstanding.
"BANKRUPTCY CODE" means the United States Bankruptcy Code, as in
effect from time to time.
"BASE RATE" means, the rate of interest announced within Xxxxx Fargo
at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of Xxxxx Fargo's base rates (not
necessarily the lowest of such rates) and serves as the basis upon which
effective rates of interest are calculated for those loans making reference
thereto and is evidenced by the recording thereof after its announcement in such
internal publication or publications as Xxxxx Fargo may designate.
"BASE RATE MARGIN" means, on or before the date that is 180 days
after the Closing Date, 1.00 percentage point, and thereafter, 2.00 percentage
points.
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"BENEFIT PLAN" means a "defined benefit plan" (as defined in SECTION
3(35) of ERISA) for which Borrower or any Subsidiary or ERISA Affiliate of
Borrower has been an "employer" (as defined in Section 3(5) of ERISA) within the
past six years.
"BOARD OF DIRECTORS" means the board of directors (or comparable
managers) of Borrower or any committee thereof duly authorized to act on behalf
of the board.
"BOOKS" means Borrower's now owned or hereafter acquired books and
records (including all of its Records indicating, summarizing, or evidencing its
assets (including the Collateral) or liabilities, all of Borrower's Records
relating to its business operations or financial condition, and all of its goods
or General Intangibles related to such information).
"BORROWER" has the meaning set forth in the preamble to this
Agreement.
"BORROWER SPIN-OFF" means the sale by HPSC of all of the shares of
Stock of Borrower owned by HPSC or by Borrower of all or substantially all of
its assets, so long as (i) no Default or Event of Default shall have occurred
and be continuing or would result from the consummation of the proposed
transaction, and (ii) HPSC or Borrower receives fair market value for such Stock
or assets.
"BORROWING" means a borrowing hereunder consisting of Advances made
on the same day by the Lenders (or Agent on behalf thereof), or by Swing Lender
in the case of a Swing Loan, or by Agent in the case of an Agent Advance.
"BORROWING BASE" has the meaning set forth in SECTION 2.1.
"BORROWING BASE CERTIFICATE" means a certificate in the form of
EXHIBIT B-1.
"BRAVO" means HPSC Bravo Funding, LLC, a Delaware corporation.
"BRAVO CREDIT AGREEMENT" means the lease receivables-backed credit
agreement, dated as of January 31, 1995, as amended, restated, supplemented or
otherwise modified from time to time, by and among Bravo, Triple-A One Funding
Corporation, a Delaware corporation and Capital Markets Assurance Corporation, a
New York stock insurance company.
"BRAVO EVENT OF TERMINATION" means any event or condition identified
as an "Event of Termination" under the Bravo Purchase Agreement.
"BRAVO LEASE RECEIVABLES PURCHASE AGREEMENT" means that certain
Second Amended and Restated Lease Receivables Purchase Agreement dated
contemporaneously herewith, as amended, restated, supplemented or otherwise
modified from time to time, by and among Borrower, Bravo, Triple-A One Funding
Corporation, a Delaware corporation,
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and Capital Markets Assurance Corporation, a New York stock insurance company,
which is in form and substance satisfactory to Agent.
"BRAVO PURCHASE AGREEMENT" means that certain Amended and Restated
Purchase and Contribution Agreement dated as of March 31, 2000, as amended,
restated, supplemented or otherwise modified from time to time, by and between
Bravo and the HPSC.
"BRAVO WIND-DOWN EVENT" means any event or condition identified as a
"Wind-Down Event" under the Bravo Credit Agreement or under the Bravo Lease
Receivables Purchase Agreement.
"BUSINESS DAY" means any day that is not a Saturday, Sunday, or
other day on which national banks are authorized or required to close.
"CAPITAL LEASE" means a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
"CAPITALIZED LEASE OBLIGATION" means any Indebtedness represented by
obligations under a Capital Lease.
"CASH EQUIVALENTS" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within 1 year from the date of acquisition thereof, (b) marketable
direct obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or Xxxxx'x,
(c) commercial paper maturing no more than 270 days from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-1, or
better, from S&P or Xxxxx'x, and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof that are
either (i) issued by any bank organized under the laws of the United States or
any state thereof which bank has a rating of A or A2, or better, from S&P or
Xxxxx'x, or (ii) in an amount less than or equal to $100,000 in the aggregate
issued by any other bank insured by the Federal Deposit Insurance Corporation.
"CASH MANAGEMENT BANK" has the meaning set forth in SECTION 2.7(a).
"CASH MANAGEMENT ACCOUNT" has the meaning set forth in SECTION
2.7(a).
"CASH MANAGEMENT AGREEMENTS" means those certain cash management
service agreements, in form and substance satisfactory to Agent, each of which
is among Borrower, Agent, and the Cash Management Bank.
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"CHANGE OF CONTROL" means (a) HPSC ceases to directly own and
control 100% of the outstanding capital Stock of Borrower, or (b) a majority of
the members of the Board of Directors do not constitute Continuing Directors,
(c) Xxxxxxx Mount is no longer employed as an officer of Borrower, (d) except as
a result of a Permitted Disposition, Borrower ceases to directly own and control
100% of the outstanding capital Stock of each of its Subsidiaries extant as of
the Closing Date, or (e) a "Change of Control" occurs under and as defined in
the Indenture.
"CLOSING DATE" means the date of the making of the initial Advance
(or other extension of credit) hereunder.
"CLOSING DATE BUSINESS PLAN" means the set of Projections of
Borrower for the 3 year period following the Closing Date (on a year by year
basis, and for the 1 year period following the Closing Date, on a month by month
basis), in form and substance (including as to scope and underlying assumptions)
satisfactory to Agent.
"CODE" means the California Uniform Commercial Code, as in effect
from time to time.
"COLLATERAL" means all of Borrower's now owned or hereafter acquired
right, title, and interest in and to each of the following:
(a) Accounts,
(b) Books,
(c) Equipment,
(d) General Intangibles,
(e) Inventory,
(f) Investment Property,
(g) Negotiable Collateral,
(h) money or other assets of Borrower that now or hereafter
come into the possession, custody, or control of any member of the Lender Group,
and
(i) the proceeds and products, whether tangible or intangible,
of any of the foregoing, including proceeds of insurance covering any or all of
the foregoing, and any and all Accounts, Books, Equipment, General Intangibles,
Inventory, Investment Property, Negotiable Collateral, Real Property, money,
deposit accounts, or other tangible or intangible property resulting from the
sale, exchange, collection, or other disposition of any of the foregoing, or any
portion thereof or interest therein, and the proceeds thereof.
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"COLLATERAL ACCESS AGREEMENT" means a landlord waiver, bailee
letter, or acknowledgement agreement of any lessor or other Person in possession
of, having a Lien upon, or having rights or interests in the Equipment or
Inventory, in each case, in form and substance satisfactory to Agent.
"COLLECTIONS" means ALL cash, checks, notes, instruments, and other
items of payment (including insurance proceeds, proceeds of cash sales, rental
proceeds, and tax refunds) of Borrower.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT C-1 delivered by the chief financial officer of Borrower to
Agent.
"CONTINUING DIRECTOR" means (a) any member of the Board of Directors
who was a director (or comparable manager) of Borrower on the Closing Date, and
(b) any individual who becomes a member of the Board of Directors after the
Closing Date if such individual was appointed or nominated for election to the
Board of Directors by a majority of the Continuing Directors, but excluding any
such individual originally proposed for election in opposition to the Board of
Directors in office at the Closing Date in an actual or threatened election
contest relating to the election of the directors (or comparable managers) of
Borrower (as such terms are used in Rule 14a-11 under the Exchange Act) and
whose initial assumption of office resulted from such contest or the settlement
thereof.
"CONTROL AGREEMENT" means a control agreement, in form and substance
satisfactory to Agent, executed and delivered by Borrower, Agent, and the
applicable securities intermediary with respect to a Securities Account or bank
with respect to a deposit account.
"CURRENT VALUE" has the meaning set forth in SECTION 6.17.
"DAILY BALANCE" means, with respect to each day during the term of
this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand deposit account maintained
by Borrower.
"DEBT TO WORTH RATIO" means, as of any date of determination, a
ratio of (a) the outstanding amount of Indebtedness (other than Subordinated
Debt) of Borrower as of such date, to (a) the sum of (i) Tangible Net Worth as
of such date, PLUS (ii) the outstanding amount of the Subordinated Debt as of
such date.
"DEFAULT" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
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"DEFAULTING LENDER" means any Lender that fails to make any Advance
(or other extension of credit) that it is required to make hereunder on the date
that it is required to do so hereunder.
"DEFAULTING LENDER RATE" means (a) the Base Rate for the first 3
days from and after the date the relevant payment is due, and (b) thereafter, at
the interest rate then applicable to Advances (inclusive of the Base Rate Margin
applicable thereto).
"DESIGNATED ACCOUNT" means that certain DDA of Borrower identified
on SCHEDULE D-1.
"DISBURSEMENT LETTER" means an instructional letter executed and
delivered by Borrower to Agent regarding the extensions of credit to be made on
the Closing Date, the form and substance of which is satisfactory to Agent.
"DOLLARS" or "$" means United States dollars.
"DUE DILIGENCE LETTER" means the due diligence letter sent by
Agent's counsel to Borrower, together with Borrower's completed responses to the
inquiries set forth therein, the form and substance of such responses to be
satisfactory to Agent.
"EBITDA" means, with respect to any fiscal period, Borrower's net
earnings (or loss), MINUS extraordinary gains, PLUS interest expense, income
taxes, and depreciation and amortization for such period, as determined in
accordance with GAAP.
"ELIGIBLE RECEIVABLES" means those Receivables, created by Borrower
in the ordinary course of business, that comply with each of the representations
and warranties respecting Eligible Receivables made in the Loan Documents, and
that are not excluded as ineligible by virtue of one or more of the criteria set
forth below; PROVIDED, HOWEVER, that such criteria may be fixed and revised from
time to time by Agent in Agent's Permitted Discretion. Eligible Receivables
shall not include the following, as determined by Agent in its sole credit
judgment:
(a) Receivables with respect to which the applicable
commercial loan either (i) did not originally close or fund on or before May 31,
2002, or (ii) is not in compliance with Borrower's written underwriting
policies, including that the loans comply with all applicable laws, including
usury laws, and that the underlying collateral conforms to Borrower's
underwriting guidelines and with regard to Borrower's loan-to-value limitations,
or
(b) Receivables that are not in conformance with Borrower's
documentation guidelines (which documentation and guidelines must be
satisfactory to Agent, including that (i) if there is a promissory note, there
is only one promissory note, and
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(ii) each promissory note or loan agreement, as applicable, is fully assignable
by Borrower without any condition or required consent or notice),
(c) Receivables that are not payable in Dollars or Canadian
dollars,
(d) Receivables with respect to an Account Debtor (or its
Affiliates) whose total obligations owing to Borrower exceed $3,000,000, to the
extent of the obligations owing by such Account Debtor (or its Affiliates) in
excess of such amount; PROVIDED, HOWEVER, that (i) Agent agrees to consider, on
a case-by-case basis, exceptions to the foregoing Dollar limitation, such
determination to be made by Agent in its sole discretion based upon the
creditworthiness of the applicable Account Debtor and the quality of the
underlying collateral for such loan, and (ii) Borrower's Receivables due from
Amerifit Nutrition (up to a maximum amount of $5,000,000) and Halco Industries
(up to a maximum amount of $4,000,000) shall not be excluded as ineligible under
this clause,
(e) (i) Receivables owed by Amerifit Nutrition to the extent
of the obligations owing by such Account Debtor in excess of 20% of all Eligible
Receivables (such percentage being calculated without regard to the effect, if
any of this clause and such percentage being subject to reduction by Agent in
its sole discretion if the creditworthiness of such Account Debtor
deteriorates), (ii) Receivables owed by Halco Industries to the extent of the
obligations owing by such Account Debtor in excess of 20% of all Eligible
Receivables (such percentage being calculated without regard to the effect, if
any of this clause and such percentage being subject to reduction by Agent in
its sole discretion if the creditworthiness of such Account Debtor
deteriorates), and (iii) Receivables owed by any other Account Debtor (and its
Affiliates) to the extent of the obligations of such Account Debtor (and its
Affiliates) in excess of 10% of all Eligible Receivables (such percentage being
calculated without regard to the effect, if any of this clause and such
percentage as applied to a particular Account Debtor (and its Affiliates) being
subject to reduction by Agent in its sole discretion if the creditworthiness of
such Account Debtor (and its Affiliates) deteriorates),
(f) Receivables with respect to an Account Debtor that is more
than 30 days past due with respect to any payment owed to Borrower; PROVIDED,
HOWEVER, that a Receivable that would otherwise be excluded under this clause
shall not be excluded if, in the determination of Agent (in its sole
discretion), the applicable Receivable is secured by collateral of a type and in
an amount sufficient to fully secure all of the obligations of the Account
Debtor owed to Borrower,
(g) Receivables with respect to an Account Debtor that is
over-advanced (based upon the borrowing base formula set forth in the applicable
loan documents) or over-line (based upon the maximum line amount set forth in
the applicable loan documents); PROVIDED, HOWEVER, that a Receivable that would
otherwise be excluded under this clause shall not be excluded if, in the sole
determination of Agent, (i) the applicable Receivable is secured by collateral
of a type and in an amount sufficient to fully secure all of the obligations of
the Account Debtor owed to Borrower, and (ii) the over-advance
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amount is not greater than 10% of the applicable borrowing base calculated in
accordance with the provisions set forth in the applicable loan documents or the
over-line amount is not more than 10% in excess of the applicable maximum line
amount provision set forth in the applicable loan documents,
(h) Receivables, to the extent that the amount of each such
Receivable exceeds 85% of the eligible accounts receivable, 50% of the eligible
inventory (calculated at cost), 60% of eligible equipment (calculated at net
liquidation value), 70% of eligible real property (calculated at fair market
value), and an agreed upon percentage of other readily marketable assets (such
percentage and the type of such other assets to be satisfactory to Agent) of the
applicable Account Debtor the aggregate value of all assets securing such
Receivable,
(i) Receivables based upon the collateral value of unbilled
accounts, pre-billed accounts, purchase orders, progress xxxxxxxx, or accounts
owed by affiliates, except to the extent that such Receivables are reviewed and
determined by Agent in its sole and absolute discretion to be eligible;
(j) Receivables based upon the collateral value of eligible
equipment or eligible real property that exceed 10% of all Eligible Receivables
(calculated without regard to the exclusion under this clause), to the extent of
the Indebtedness owing by such Account Debtors or Makers in excess of such
percentage,
(k) Receivables with respect to which the Account Debtor is an
employee, Affiliate, or agent of Borrower,
(l) Receivables with respect to which the Account Debtor
either (i) does not maintain its chief executive office in the United States or
Canada, (ii) is not organized under the laws of the United States or any state
thereof or Canada or any province thereof, or (iii) is a government or any
political subdivision thereof or of any department, agency, public corporation,
or other instrumentality thereof,
(m) Receivables with respect to which the tangible collateral
is not located within the continental United States or Canada,
(n) Receivables with respect to which the Account Debtor is a
creditor of Borrower, has or has asserted a right of setoff or a counterclaim,
has disputed its liability, or has made any claim with respect to its obligation
to pay the Receivable, to the extent of such claim, right of setoff, or dispute,
(o) Receivables with respect to which the Account Debtor is
subject to an Insolvency Proceeding, has gone out of business, or as to which
Borrower has received notice of an imminent Insolvency Proceeding or a material
impairment of the financial condition of such Account Debtor; PROVIDED, HOWEVER,
that a Receivable that would
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otherwise be excluded under this clause shall not be excluded if it is (i) a
debtor-in-possession loan made pursuant to a bankruptcy court order that
provides Borrower with a first priority lien in and to the assets of the Account
Debtor and a super-priority expense of administration claim and otherwise is in
accordance with Borrower's underwriting guidelines, in the determination of
Agent (in its sole discretion), or (ii) in the sole determination of Agent,
secured by collateral of a type and in an amount sufficient to fully secure all
of the obligations of the Account Debtor owed to Borrower,
(p) Receivables, to the extent that they are participating
interests in loans originated by another Persons; PROVIDED, HOWEVER, that a
Receivable that would otherwise be excluded under this clause shall not be
excluded if, in the determination of Agent (in its sole discretion), the
applicable originating Person is a satisfactory financial institution,
(q) Receivables, to the extent that participating interests in
such Receivables have been sold to any Person,
(r) Receivables, the collection of which, Agent, in its
Permitted Discretion, believes to be doubtful,
(s) Receivables that are term loans to the extent that the
aggregate principal amount of all term loans is in excess of 10% of all Eligible
Receivables (such percentage being calculated without regard to the effect, if
any of this clause), or
(t) Receivables that are not subject to a valid and perfected
first priority Agent's Lien.
"ELIGIBLE TRANSFEREE" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having total assets in
excess of $250,000,000, (b) a commercial bank organized under the laws of any
other country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of any such country and which has total
assets in excess of $250,000,000, provided that such bank is acting through a
branch or agency located in the United States, (c) a finance company, insurance
company, or other financial institution or fund that is engaged in making,
purchasing, or otherwise investing in commercial loans in the ordinary course of
its business and having (together with its Affiliates) total assets in excess of
$250,000,000, (d) any Affiliate (other than individuals) of a Lender that was
party hereto as of the Closing Date, (e) so long as no Event of Default has
occurred and is continuing, any other Person approved by Agent and Borrower
(which approval shall of Borrower shall not be unreasonably withheld, delayed,
or conditioned), and (f) during the continuation of an Event of Default, any
other Person approved by Agent.
"ENVIRONMENTAL ACTIONS" means any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, judicial or administrative
proceeding,
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judgment, letter, or other communication from any Governmental Authority, or any
third party involving violations of Environmental Laws or releases of Hazardous
Materials from (a) any assets, properties, or businesses of Borrower, its
Subsidiaries or predecessors in interest to the Borrower or to any of the
Borrower's Subsidiaries, (b) from adjoining properties or businesses, or (c)
from or onto any facilities which received Hazardous Materials generated by
Borrower, its Subsidiaries or predecessors in interest to the Borrower or to any
of the Borrower's Subsidiaries.
"ENVIRONMENTAL LAW" means any applicable federal, state, provincial,
foreign or local statute, law, rule, regulation, ordinance, code, binding and
enforceable guideline, binding and enforceable written policy, or rule of
common law now or hereafter in effect and in each case as amended, or any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, to the extent binding on
Borrower or its Subsidiaries, relating to the environment, employee health
and safety, or Hazardous Materials, including CERCLA; RCRA; the Federal Water
Pollution Control Act, 33 USC Section 1251 ET SEQ; the Toxic Substances
Control Act, 15 USC Section 2601 ET SEQ; the Clean Air Act, 42 USC Section
7401 ET SEQ.; the Safe Drinking Water Act, 42 USC Section 3803 ET SEQ.; the
Oil Pollution Act of 1990, 33 USC Section 2701 ET SEQ.; the Emergency
Planning and the Community Right-to-Know Act of 1986, 42 USC Section 11001 ET
SEQ.; the Hazardous Material Transportation Act, 49 USC Section 1801 ET SEQ.;
and the Occupational Safety and Health Act, 29 USC Section 651 ET SEQ. (to
the extent it regulates occupational exposure to Hazardous Materials); any
state and local or foreign counterparts or equivalents, in each case as
amended from time to time.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities, monetary
obligations, Remedial Actions, losses, damages, punitive damages, consequential
damages, treble damages, costs and expenses (including all reasonable fees,
disbursements and expenses of counsel, experts, or consultants, and costs of
investigation and feasibility studies), fines, penalties, sanctions, and
interest incurred as a result of any claim or demand by any Governmental
Authority or any third party, and which relate to any Environmental Action.
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"EQUIPMENT" means all of Borrower's now owned or hereafter acquired
right, title, and interest with respect to equipment, machinery, machine tools,
motors, furniture, furnishings, fixtures, vehicles (including motor vehicles),
tools, parts, goods (other than consumer goods, farm products, or Inventory),
wherever located, including all attachments, accessories, accessions,
replacements, substitutions, additions, and improvements to any of the
foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto.
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"ERISA AFFILIATE" means (a) any Person subject to ERISA whose employees
are treated as employed by the same employer as the employees of Borrower or its
Subsidiaries under IRC Section 414(b), (b) any trade or business subject to
ERISA whose employees are treated as employed by the same employer as the
employees of Borrower or its Subsidiaries under IRC Section 414(c), (c) solely
for purposes of Section 302 of ERISA and Section 412 of the IRC, any
organization subject to ERISA that is a member of an affiliated service group of
which Borrower or any of its Subsidiaries are a member under IRC Section 414(m),
or (d) solely for purposes of Section 302 of ERISA and Section 412 of the IRC,
any Person subject to ERISA that is a party to an arrangement with Borrower or
any of its Subsidiaries and whose employees are aggregated with the employees of
Borrower or its Subsidiaries under IRC Section 414(o).
"EVENT OF DEFAULT" has the meaning set forth in SECTION 8.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as in effect
from time to time.
"EXISTING AGENT" has the meaning set forth in the recitals hereto.
"EXISTING CREDIT AGREEMENT" has the meaning set forth in the recitals
hereto.
"EXISTING LENDER GROUP" has the meaning set forth in the recitals
hereto.
"EXISTING LENDERS" means Fleet National Bank, KeyBank National
Association, PNC Business Credit Corporation, Banknorth, and Citizens Bank of
Massachusetts.
"EXISTING LOAN DOCUMENTS" means the "Loan Documents" as such term is
defined in the Existing Credit Agreement.
"FEE LETTER" means that certain fee letter, dated as of even date
herewith, between Borrower and Agent, in form and substance satisfactory to
Agent.
"FEIN" means Federal Employer Identification Number.
"FOOTHILL" means Foothill Capital Corporation, a California
corporation.
"FUNDING DATE" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States, consistently applied.
"GENERAL INTANGIBLES" means all of Borrower's now owned or hereafter
acquired right, title, and interest with respect to general intangibles
(including payment intangibles, contract rights, rights to payment, rights
arising under common law, statutes, or
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regulations, choses or things in action, goodwill, patents, trade names,
trademarks, servicemarks, copyrights, blueprints, drawings, purchase orders,
customer lists, monies due or recoverable from pension funds, route lists,
rights to payment and other rights under any royalty or licensing agreements,
infringement claims, computer programs, information contained on computer disks
or tapes, software, literature, reports, catalogs, money, deposit accounts,
insurance premium rebates, tax refunds, and tax refund claims), and any and all
supporting obligations in respect thereof, and any other personal property other
than goods, Accounts, Investment Property, and Negotiable Collateral.
"GOVERNING DOCUMENTS" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"GOVERNMENTAL AUTHORITY" means any federal, state, local, or other
governmental or administrative body, instrumentality, department, or agency or
any court, tribunal, administrative hearing body, arbitration panel, commission,
or other similar dispute-resolving panel or body.
"GUARANTY" means that certain general continuing guaranty executed and
delivered by HPSC in favor of Agent, for the benefit of the Lender Group (and
Xxxxx Fargo and its Affiliates), in form and substance satisfactory to Agent.
"HAZARDOUS MATERIALS" means (a) substances that are defined or listed
in, or otherwise classified pursuant to, any applicable laws or regulations as
"hazardous substances," "hazardous materials," "hazardous wastes," "toxic
substances," or any other formulation intended to define, list, or classify
substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, reproductive toxicity, or "EP
toxicity", (b) oil, petroleum, or petroleum derived substances, natural gas,
natural gas liquids, synthetic gas, drilling fluids, produced waters, and other
wastes associated with the exploration, development, or production of crude oil,
natural gas, or geothermal resources, (c) any flammable substances or explosives
or any radioactive materials, and (d) asbestos in any form or electrical
equipment that contains any oil or dielectric fluid containing levels of
polychlorinated biphenyls in excess of 50 parts per million.
"HEDGE AGREEMENT" means any and all transactions, agreements, or
documents now existing or hereafter entered into between Borrower or its
Subsidiaries and a Bank Product Provider, which provide for an interest rate,
credit, commodity or equity swap, cap, floor, collar, forward foreign exchange
transaction, currency swap, cross currency rate swap, currency option, or any
combination of, or option with respect to, these or similar transactions, for
the purpose of hedging Borrower's or its Subsidiaries' exposure to fluctuations
in interest or exchange rates, loan, credit exchange, security or currency
valuations or commodity prices.
"HPSC" has the meaning set forth in the recitals hereto.
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"HPSC AGENT" has the meaning set forth in the recitals hereto.
"HPSC CONDITIONS" means, collectively, each of the conditions precedent
to the obligations of the HPSC Lender Group to make the initial Advance (as such
term is defined in the HPSC Loan Agreement) or otherwise extend credit under the
HPSC Loan Agreement.
"HPSC EVENT OF DEFAULT" means any event or condition identified as an
"Event of Default" under the HPSC Loan Agreement.
"HPSC LENDER GROUP" has the meaning set forth in the recitals hereto.
"HPSC LENDERS" has the meaning set forth in the recitals hereto.
"HPSC LOAN AGREEMENT" has the meaning set forth in the recitals hereto.
"HPSC SECURITY AGREEMENT" means an amended and restated security
agreement executed and delivered by HPSC and Agent, the form and substance of
which is satisfactory to Agent.
"INDEBTEDNESS" means (a) all obligations for borrowed money, (b) all
obligations evidenced by bonds, debentures, notes, or other similar instruments
and all reimbursement or other obligations in respect of letters of credit,
bankers acceptances, interest rate swaps, or other financial products, (c) all
obligations under Capital Leases, (d) all obligations or liabilities of others
secured by a Lien on any asset of Borrower or its Subsidiaries, irrespective of
whether such obligation or liability is assumed, (e) all obligations for the
deferred purchase price of assets (other than trade debt incurred in the
ordinary course of business and repayable in accordance with customary trade
practices), and (f) any obligation guaranteeing or intended to guarantee
(whether directly or indirectly guaranteed, endorsed, co-made, discounted, or
sold with recourse) any obligation of any other Person.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION 11.3.
"INDEMNIFIED PERSON" has the meaning set forth in SECTION 11.3.
"INDENTURE" means the Indenture dated as of March 20, 1997 among
Borrower and State Street Bank & Trust Company, as trustee.
"INSOLVENCY PROCEEDING" means any proceeding commenced by or against
any Person under any provision of the Bankruptcy Code or under any other state
or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
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"INTANGIBLE ASSETS" means, with respect to any Person, that portion of
the book value of all of such Person's assets that would be treated as
intangibles under GAAP.
"INTEREST COVERAGE RATIO" means, with respect to any fiscal period, a
ratio of (a) EBITDA for such period, to (b) Net Interest Expense, payable in
cash, of Borrower for such period.
"INTEREST RESERVE" means a reserve maintained by Agent in the amount of
$225,000.
"INVENTORY" means all Borrower's now owned or hereafter acquired right,
title, and interest with respect to inventory, including goods held for sale or
lease or to be furnished under a contract of service, goods that are leased by
Borrower as lessor, goods that are furnished by Borrower under a contract of
service, and raw materials, work in process, or materials used or consumed in
Borrower's business.
"INVESTMENT" means, with respect to any Person, any investment by such
Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) BONA FIDE Accounts arising in the
ordinary course of business consistent with past practices), purchases or other
acquisitions for consideration of Indebtedness or Stock or all or substantially
all of the assets of a Person, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"INVESTMENT PROPERTY" means all of Borrower's now owned or hereafter
acquired right, title, and interest with respect to "investment property" as
that term is defined in the Code, and any and all supporting obligations in
respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect from time
to time.
"LENDER" and "LENDERS" have the respective meanings set forth in the
preamble to this Agreement, and shall include any other Person made a party to
this Agreement in accordance with the provisions of SECTION 14.1.
"LENDER GROUP" means, individually and collectively, each of the
Lenders (including the Issuing Lender) and Agent.
"LENDER GROUP EXPENSES" means all (a) costs or expenses (including
taxes, and insurance premiums) required to be paid by Borrower or its
Subsidiaries under any of the Loan Documents that are paid or incurred by the
Lender Group, (b) fees or charges paid or incurred by Agent in connection with
the Lender Group's transactions with Borrower including fees or charges for
photocopying, notarization, couriers and messengers,
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telecommunication, public record searches (including tax lien, litigation, and
UCC searches and including searches with the patent and trademark office, the
copyright office, or the department of motor vehicles), filing, recording,
publication, appraisal (including periodic collateral appraisals or business
valuations to the extent of the fees and charges (and up to the amount of any
limitation) contained in this Agreement), real estate surveys, real estate title
policies and endorsements, and environmental audits, (c) costs and expenses
incurred by Agent in the disbursement of funds to Borrower (by wire transfer or
otherwise), (d) charges paid or incurred by Agent resulting from the dishonor of
checks, (e) reasonable costs and expenses paid or incurred by the Lender Group
to correct any default or enforce any provision of the Loan Documents, or in
gaining possession of, maintaining, handling, preserving, storing, shipping,
selling, preparing for sale, or advertising to sell the Collateral or any
portion thereof, irrespective of whether a sale is consummated, (f) audit fees
and expenses of Agent related to audit examinations of the Books to the extent
of the fees and charges (and up to the amount of any limitation) contained in
this Agreement, (g) reasonable costs and expenses of third party claims or any
other suit paid or incurred by the Lender Group in enforcing or defending the
Loan Documents or in connection with the transactions contemplated by the Loan
Documents or the Lender Group's relationship with Borrower or any guarantor of
the Obligations, (h) Agent's and each Lender's reasonable fees and expenses
(including attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering, syndicating, or amending the Loan Documents, and (i)
Agent's and each Lender's reasonable fees and expenses (including attorneys
fees) incurred in terminating, enforcing (including attorneys fees and expenses
incurred in connection with a "workout," a "restructuring," or an Insolvency
Proceeding concerning Borrower or in exercising rights or remedies under the
Loan Documents), or defending the Loan Documents, irrespective of whether suit
is brought, or in taking any Remedial Action concerning the Collateral.
"LENDER-RELATED PERSON" means, with respect to any Lender, such Lender,
together with such Lender's Affiliates, and the officers, directors, employees,
and agents of such Lender.
"LIEN" means any interest in an asset securing an obligation owed to,
or a claim by, any Person other than the owner of the asset, whether such
interest shall be based on the common law, statute, or contract, whether such
interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"LOAN ACCOUNT" has the meaning set forth in SECTION 2.10.
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"LOAN DOCUMENTS" means this Agreement, the Allocation Agreement, the
Bank Product Agreements, the Cash Management Agreements, the Control Agreements,
the Disbursement Letter, the Due Diligence Letter, the Fee Letter, the Guaranty,
the HPSC Security Agreement, any Mortgages, the Officers' Certificate, the
Purchase Agreement, the Servicing Agreement, the Stock Pledge Agreement, the
Trademark Security Agreement, the Validity Agreement, any note or notes executed
by Borrower in connection with this Agreement and payable to a member of the
Lender Group, and any other agreement entered into, now or in the future, by
Borrower and the Lender Group in connection with this Agreement.
"MAKER" has the meaning set forth in Section 3-103(a)(5) of the Code.
"MATERIAL ADVERSE CHANGE" means (a) a material adverse change in the
business, prospects, operations, results of operations, assets, liabilities or
condition (financial or otherwise) of Borrower, (b) a material impairment of
Borrower's ability to perform its obligations under the Loan Documents to which
it is a party or of the Lender Group's ability to enforce the Obligations or
realize upon the Collateral, or (c) a material impairment of the enforceability
or priority of the Agent's Liens with respect to the Collateral as a result of
an action or failure to act on the part of Borrower.
"MATURITY DATE" has the meaning set forth in SECTION 3.4.
"MAXIMUM REVOLVER AMOUNT" means $20,000,000.
"MORTGAGES" means, individually and collectively, one or more
mortgages, deeds of trust, or deeds to secure debt, executed and delivered by
Borrower in favor of Agent, in form and substance satisfactory to Agent, that
encumber Real Property owned by Borrower and the related improvements thereto.
"NEGOTIABLE COLLATERAL" means all of Borrower's now owned and hereafter
acquired right, title, and interest with respect to letters of credit, letter of
credit rights, instruments, promissory notes, drafts, documents, and chattel
paper (including electronic chattel paper and tangible chattel paper), and any
and all supporting obligations in respect thereof.
"NET INCOME" means, for any period, the net income (exclusive of
minority interests and extraordinary items) for such period of Borrower,
determined in accordance with GAAP.
"NET INTEREST EXPENSE" means, for any period, Borrower's gross interest
expense for such period determined in conformity with GAAP (including, without
limitation, interest expense paid to Affiliates of Borrower), MINUS (i) gains
for such period on Hedge Agreements (to the extent not deducted in the
calculation of such gross interest expense), PLUS (ii) the sum of (A) losses for
such period on Hedge Agreements (to the extent not
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included in such gross interest expense) and (B) the upfront costs or fees for
such period associated with Hedge Agreements (to the extent not included in
gross interest expense), each determined on a consolidated basis and in
accordance with GAAP for Borrower.
"NEW SECURITIZATION SUBSIDIARY" means a special purpose Subsidiary of
Borrower created after the Closing Date for the purpose of acquiring Receivables
from Borrower, so long as the terms and conditions of the Governing Documents of
such Subsidiary and the purchase and sale agreement between Borrower and such
Subsidiary are satisfactory to Agent.
"NOTES" means, individually and collectively, the secured promissory
notes of the Borrower made payable to the order of each Lender, evidencing the
Obligations, as each such secured promissory note may be amended, supplemented,
restated, modified or extended from time to time, and any promissory note or
notes issued in exchange or replacement therefor.
"OBLIGATIONS" means (a) all loans, Advances, debts, principal, interest
(including any interest that, but for the provisions of the Bankruptcy Code,
would have accrued), premiums, liabilities (including all amounts charged to
Borrower's Loan Account pursuant hereto), obligations, fees (including the fees
provided for in the Fee Letter), charges, costs, Lender Group Expenses
(including any fees or expenses that, but for the provisions of the Bankruptcy
Code, would have accrued), lease payments, guaranties, covenants, and duties of
any kind and description owing by Borrower to the Lender Group pursuant to or
evidenced by the Loan Documents and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and including all interest not paid when due
and all Lender Group Expenses that Borrower is required to pay or reimburse by
the Loan Documents, by law, or otherwise, and (b) all Bank Product Obligations.
Any reference in this Agreement or in the Loan Documents to the Obligations
shall include all amendments, changes, extensions, modifications, renewals
replacements, substitutions, and supplements, thereto and thereof, as
applicable, both prior and subsequent to any Insolvency Proceeding.
"OFFICERS' CERTIFICATE" means the representations and warranties of
officers form submitted by Agent to Borrower, together with Borrower's completed
responses to the inquiries set forth therein, the form and substance of such
responses to be satisfactory to Agent.
"ORIGINATING LENDER" has the meaning set forth in SECTION 14.1(e).
"OVERADVANCE" has the meaning set forth in SECTION 2.5.
"PARTICIPANT" has the meaning set forth in SECTION 14.1(e).
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"PERMITTED DISCRETION" means a determination made in good faith and in
the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment.
"PERMITTED DISPOSITIONS" means (a) sales or other dispositions by
Borrower or its Subsidiaries of equipment that is substantially worn, damaged,
or obsolete in the ordinary course of business, (b) the use or transfer of money
or Cash Equivalents by Borrower or its Subsidiaries in a manner that is not
prohibited by the terms of this Agreement or the other Loan Documents, (c) so
long as no Default or Event of Default has occurred and is continuing or would
result therefrom, settlement by Borrower of the amount owed by an Account Debtor
or a Maker with respect to Receivables, to the extent that the difference
between (i) the sum of the par value of each Receivable which is the subject of
such a settlement, including the proposed settlement, and (ii) the aggregate
amount received by Borrower or its Subsidiaries in connection with all such
settlements, including the proposed settlement, in each case relating to
settlements which have taken place or which are proposed to take place during
any fiscal year of the Borrower, does not exceed the aggregate amount of the
losses projected to be incurred by the Borrower during such fiscal year in
connection with such settlements, (e) the Borrower Spin-Off, and (f) the sale of
Receivables by Borrower in the ordinary course of business to HPSC Equipment
Receivables 2000-1 LLC II or a New Securitization Subsidiary so long as (i) no
Event of Default has occurred and is continuing or would result therefrom, and
(ii) either (A) (I) Borrower receives not less than 76.6% of the total
contractual amount of the subject Eligible Receivables (including unearned
interest), (II) the aging of the Receivables that remain in the Borrowing Base
immediately after giving effect to the proposed sale are not aged more than the
Receivables in the Borrowing Base as they existed immediately prior to the sale,
and (III) the proceeds of the sale are paid to the Agent and applied to the
outstanding Obligations in accordance with the provisions hereof, or (B)
Borrower has submitted a written request to Agent relative to the Receivables
that it proposes to sell and Agent, in its sole discretion, has approved in
writing the sale of the subject Receivables free and clear of the Liens of
Agent.
"PERMITTED INVESTMENTS" means (a) investments in Cash Equivalents, (b)
investments in negotiable instruments for collection, and (c) advances made in
connection with purchases of goods or services in the ordinary course of
business.
"PERMITTED LIENS" means (a) Liens held by Agent for the benefit of
Agent, the Lenders, and any Bank Product Provider, (b) Liens for unpaid taxes
that either (i) are not yet delinquent, or (ii) do not constitute an Event of
Default hereunder and are the subject of Permitted Protests, (c) Liens set forth
on SCHEDULE P-1, (d) the interests of lessors under operating leases, (e)
purchase money Liens or the interests of lessors under Capital Leases to the
extent that such Liens or interests secure Permitted Purchase Money Indebtedness
and so long as such Lien attaches only to the asset purchased or acquired and
the proceeds thereof, (f) Liens arising by operation of law in favor of
warehousemen, landlords, carriers, mechanics, materialmen, laborers, or
suppliers, incurred in the ordinary course of business
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and not in connection with the borrowing of money, and which Liens either (i)
are for sums not yet delinquent, or (ii) are the subject of Permitted Protests,
(g) Liens arising from deposits made in connection with obtaining worker's
compensation or other unemployment insurance, (h) Liens or deposits to secure
performance of bids, tenders, or leases incurred in the ordinary course of
business and not in connection with the borrowing of money, (i) Liens granted as
security for surety or appeal bonds in connection with obtaining such bonds in
the ordinary course of business, (j) Liens resulting from any judgment or award
that is not an Event of Default hereunder, and (k) easements, rights of way, and
zoning restrictions that do not materially interfere with or impair the use or
operation thereof.
"PERMITTED PROTEST" means the right of Borrower or any of its
Subsidiaries, as applicable, to protest any Lien (other than any such Lien that
secures the Obligations), taxes (other than payroll taxes or taxes that are the
subject of a United States federal tax lien), or rental payment, provided that
(a) a reserve with respect to such obligation is established on the Books in
such amount as is required under GAAP, (b) any such protest is instituted
promptly and prosecuted diligently by Borrower or any of its Subsidiaries, as
applicable, in good faith, and (c) Agent is satisfied that, while any such
protest is pending, there will be no impairment of the enforceability, validity,
or priority of any of the Agent's Liens.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" means, as of any date of
determination, Purchase Money Indebtedness incurred after the Closing Date in an
aggregate principal amount outstanding at any one time not in excess of $50,000.
"PERSON" means natural persons, corporations, limited liability
companies, limited partnerships, general partnerships, limited liability
partnerships, joint ventures, trusts, land trusts, business trusts, or other
organizations, irrespective of whether they are legal entities, and governments
and agencies and political subdivisions thereof.
"PROJECTIONS" means Borrower's forecasted (a) balance sheets, and (b)
profit and loss statements, on a monthly basis for the first year and quarterly
thereafter, all prepared on a basis consistent with Borrower's historical
financial statements, together with appropriate supporting details and a
statement of underlying assumptions.
"PRO RATA SHARE" means:
(a) with respect to a Lender's obligation to make Advances and
receive payments of principal, interest, fees, costs, and expenses with respect
thereto, the percentage obtained by dividing (i) such Lender's Revolver
Commitment, by (ii) the aggregate Revolver Commitments of all Lenders, and
(b) with respect to all other matters (including the
indemnification obligations arising under SECTION 16.7), the percentage obtained
by dividing (i) such Lender's Revolver Commitment, by (ii) the aggregate amount
of the Revolver Commitments of all Lenders; PROVIDED, HOWEVER, that, in each
case in this definition, in the event the Revolver
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Commitments have been terminated, Pro Rata Share shall be determined according
to the Revolver Commitments in effect immediately prior to such termination.
"PURCHASE AGREEMENT" has the meaning set forth in the recitals hereto.
"PURCHASE MONEY INDEBTEDNESS" means Indebtedness (other than the
Obligations, but including Capitalized Lease Obligations), incurred at the time
of, or within 20 days after, the acquisition of any fixed assets for the purpose
of financing all or any part of the acquisition cost thereof.
"QUALIFIED CASH" means, as of any date of determination, the amount of
unrestricted cash and Cash Equivalents of Borrower that is on deposit with
banks, or in securities accounts with securities intermediaries, or any
combination thereof, and which such deposit account or securities account is the
subject of a Control Agreement and is maintained by a branch office located
within the United States.
"REAL PROPERTY" means any estates or interests in real property now
owned or hereafter acquired by Borrower and the improvements thereto.
"RECEIVABLES" means all of Borrower's now owned or hereafter acquired
right, title, and interest in receivables of any kind, and all supporting
obligations in respect thereof, that arise from commercial loans secured by a
first priority perfected Lien in assets of the respective Account Debtor or
Maker in favor of Borrower.
"RECORD" means information that is inscribed on a tangible medium or
which is stored in an electronic or other medium and is retrievable in
perceivable form.
"REMEDIAL ACTION" means all actions taken to (a) clean up, remove,
remediate, contain, treat, monitor, assess, evaluate, or in any way address
Hazardous Materials in the indoor or outdoor environment, (b) prevent or
minimize a release or threatened release of Hazardous Materials so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment, (c) perform any pre-remedial studies,
investigations, or post-remedial operation and maintenance activities, or (d)
conduct any other actions authorized by 42 USC Section 9601.
"REPORT" has the meaning set forth in SECTION 16.17.
"REQUIRED AVAILABILITY" means Availability and Qualified Cash in an
amount of not less than $2,250,000.
"REQUIRED LENDERS" means, at any time, Lenders whose Pro Rata Shares
aggregate 50.1% of the Total Commitments, or if the Commitments have been
terminated irrevocably, 50.1% of the Obligations (other than Bank Product
Obligations) then outstanding.
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"REVOLVER COMMITMENT" means, with respect to each Lender, its Revolver
Commitment, and, with respect to all Lenders, their Revolver Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on SCHEDULE C-1 or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of SECTION 14.1.
"REVOLVER USAGE" means, as of any date of determination, the then
extant amount of outstanding Advances.
"SEC" means the United States Securities and Exchange Commission and
any successor thereto.
"SECURITIES ACCOUNT" means a "securities account" as that term is
defined in the Code.
"SECURITIZATION RESERVE" means a reserve in such amounts determined by
Agent from time to time in its sole and absolute discretion with respect to the
amount that Borrower may pay or may be required to pay from time to time in
connection with the repurchase of Receivables or of other accounts or other
rights to payment from a Securitization Subsidiary or from any other Person.
"SECURITIZATION SUBSIDIARIES" means (a) Bravo, (b) HPSC Equipment
Receivables 2000-1 LLC I, a Delaware limited liability company, (c) HPSC
Equipment Receivables 2000-1 LLC II, a Delaware limited liability company, and
(d) any New Securitization Subsidiary, so long as no Indebtedness of any of the
foregoing Persons is recourse to Borrower or any of its Subsidiaries.
"SERVICING AGREEMENT" means a servicing agreement executed and
delivered by Borrower and Agent, the form and substance of which is satisfactory
to Agent.
"SETTLEMENT" has the meaning set forth in SECTION 2.3(f)(i).
"SETTLEMENT DATE" has the meaning set forth in SECTION 2.3(f)(i).
"SOLVENT" means, with respect to any Person on a particular date, that
such Person is not insolvent (as such term is defined in the Uniform Fraudulent
Transfer Act).
"STOCK" means all shares, options, warrants, interests, participations,
or other equivalents (regardless of how designated) of or in a Person, whether
voting or nonvoting, including common stock, preferred stock, or any other
"equity security" (as such term is defined in Rule 3a11-1 of the General Rules
and Regulations promulgated by the SEC under the Exchange Act).
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"STOCK PLEDGE AGREEMENT" means an amended and restated stock pledge
agreement, in form and substance satisfactory to Agent, executed and delivered
by HPSC to Agent with respect to the pledge of the Stock owned by HPSC.
"SUBORDINATED DEBT" means subordinated Indebtedness the terms and
conditions of which, including provisions subordinating such Indebtedness to the
Obligations, are satisfactory to the Required Lenders.
"SUBSIDIARY" of a Person means a corporation, partnership, limited
liability company, or other entity in which that Person directly or indirectly
owns or controls the shares of Stock having ordinary voting power to elect a
majority of the board of directors (or appoint other comparable managers) of
such corporation, partnership, limited liability company, or other entity;
PROVIDED, HOWEVER, that for purposes of this Agreement and the other Loan
Documents, the Securitization Subsidiaries shall not constitute or be deemed to
be Subsidiaries of Borrower or HPSC.
"SWING LENDER" means Foothill or any other Lender that, at the request
of Borrower and with the consent of Agent agrees, in such Lender's sole
discretion, to become the Swing Lender hereunder.
"SWING LOAN" has the meaning set forth in SECTION 2.3(d)(i).
"TANGIBLE NET WORTH" means, as of any date of determination, the result
of (a) Borrower's total stockholder's equity, MINUS (b) the sum of (i) all
Intangible Assets of Borrower, (ii) all of Borrower's prepaid expenses, and
(iii) all amounts due to Borrower from Affiliates, calculated on a consolidated
basis in accordance with GAAP (except that such calculation of Tangible Net
Worth shall be made without regard to the accounting adjustments required by
Financial Accounting Standard No. 133).
"TAXES" has the meaning set forth in SECTION 16.11.
"TRADEMARK SECURITY AGREEMENT" means a trademark security agreement
executed and delivered by Borrower and Agent, the form and substance of which is
satisfactory to Agent.
"VALIDITY GUARANTORS" means Xxxx X. Xxxxxxx, Xxxxxxx Mount, and Xxxx
Xxxxxxxx, and "VALIDITY GUARANTOR" means any one of them.
"VALIDITY AGREEMENT" means an agreement, in form and substance
satisfactory to Agent, from each Validity Guarantor relative to, among other
things, the BONA FIDE nature of the Receivables.
"VOIDABLE TRANSFER" has the meaning set forth in SECTION 17.7.
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"XXXXX FARGO" means Xxxxx Fargo Bank, National Association, a national
banking association.
1.2 ACCOUNTING TERMS. All accounting terms not specifically defined herein
shall be construed in accordance with GAAP. When used herein, the term
"financial statements" shall include the notes and schedules thereto. Whenever
the term "Borrower" is used in respect of a financial covenant or a related
definition, it shall be understood to mean Borrower and its Subsidiaries on a
consolidated basis unless the context clearly requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the Code
shall be construed and defined as set forth in the Code unless otherwise defined
herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any other Loan
Document clearly requires otherwise, references to the plural include the
singular, references to the singular include the plural, the term "including" is
not limiting, and the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and similar terms in this Agreement or any
other Loan Document refer to this Agreement or such other Loan Document, as the
case may be, as a whole and not to any particular provision of this Agreement or
such other Loan Document, as the case may be. Section, subsection, clause,
schedule, and exhibit references herein are to this Agreement unless otherwise
specified. Any reference in this Agreement or in the other Loan Documents to any
agreement, instrument, or document shall include all alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements, thereto and thereof, as applicable (subject to any
restrictions on such alterations, amendments, changes, extensions,
modifications, renewals, replacements, substitutions, joinders, and supplements
set forth herein). Any reference herein to any Person shall be construed to
include such Person's successors and assigns. Any requirement of a writing
contained herein or in the other Loan Documents shall be satisfied by the
transmission of a Record and any Record transmitted shall constitute a
representation and warranty as to the accuracy and completeness of the
information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits attached to
this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Revolver Commitment agrees
(severally, not jointly or jointly and severally) to make advances ("ADVANCES")
to Borrower in an amount at any one time outstanding not to exceed such Lender's
Pro Rata Share of an amount equal to
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THE LESSER OF (i) the Maximum Revolver Amount, or (ii) the Borrowing Base. For
purposes of this Agreement, "BORROWING BASE," as of any date of determination,
shall mean the result of:
(x) 85% of the result of (i) the principal
amount of all Eligible Receivables, MINUS (ii) the aggregate
amount of cash received by Borrower which has not yet been
allocated between the Receivables and the accounts receivable
owned by a Securitization Subsidiary as of such date, as
determined by Agent in its sole and absolute discretion;
PROVIDED, HOWEVER that if, upon receipt of such information as
Agent shall require in its sole and absolute discretion, Agent
may (but in no event shall be required to) reduce the amount
deducted pursuant to this clause (ii) by such amount as Agent
shall determine in its sole and absolute discretion, MINUS
(y) the sum of (i) the Bank Products Reserve, (ii) the
Securitization Reserve, (iii) the Interest Reserve, and (iv)
the aggregate amount of reserves, if any, established by Agent
under SECTION 2.1(b).
(b) Anything to the contrary in this SECTION 2.1 notwithstanding,
Agent shall have the right to establish reserves in such amounts, and with
respect to such matters, as Agent in its Permitted Discretion shall deem
necessary or appropriate, against the Borrowing Base, including reserves with
respect to (i) sums that Borrower is required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases) and has failed to pay under any Section
of this Agreement or any other Loan Document, and (ii) amounts owing by Borrower
to any Person to the extent secured by a Lien on, or trust over, any of the
Collateral (other than any Permitted Lien set forth on SCHEDULE P-1 which is
specifically identified thereon as entitled to have priority over the Agent's
Liens), which Lien or trust, in the Permitted Discretion of Agent likely would
have a priority superior to the Agent's Liens (such as Liens or trusts in favor
of landlords, warehousemen, carriers, mechanics, materialmen, laborers, or
suppliers, or Liens or trusts for AD VALOREM, excise, sales, or other taxes
where given priority under applicable law) in and to such item of the
Collateral.
(c) The Lenders with Revolver Commitments shall have no obligation
to make additional Advances hereunder to the extent such additional Advances
would cause the Revolver Usage to exceed the Maximum Revolver Amount.
(d) Amounts borrowed pursuant to this Section may be repaid and,
subject to the terms and conditions of this Agreement, reborrowed at any time
during the term of this Agreement.
2.2 [INTENTIONALLY OMITTED].
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2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be made by an
irrevocable written request by an Authorized Person delivered to Agent (which
notice must be received by Agent no later than 10:00 a.m. (California time) on
the Business Day prior to the date that is the requested Funding Date in the
case of a request for an Advance specifying (i) the amount of such Borrowing,
and (ii) the requested Funding Date, which shall be a Business Day; PROVIDED,
HOWEVER, that in the case of a request for Swing Loan in an amount of $1,000,000
or less, such notice will be timely received if it is received by Agent no later
than 10:00 a.m. (California time) on the Business Day that is the requested
Funding Date) specifying (i) the amount of such Borrowing, and (ii) the
requested Funding Date, which shall be a Business Day. At Agent's election, in
lieu of delivering the above-described written request, any Authorized Person
may give Agent telephonic notice of such request by the required time, with such
telephonic notice to be confirmed in writing within 24 hours of the giving of
such notice.
(b) AGENT'S ELECTION. Promptly after receipt of a request for a
Borrowing pursuant to SECTION 2.3(a), Agent shall elect, in its discretion, (i)
to have the terms of SECTION 2.3(c) apply to such requested Borrowing, or (ii)
to request Swing Lender to make a Swing Loan pursuant to the terms of SECTION
2.3(d) in the amount of the requested Borrowing; PROVIDED, HOWEVER, that if
Swing Lender declines in its sole discretion to make a Swing Loan pursuant to
SECTION 2.3(d), Agent shall elect to have the terms of SECTION 2.3(c) apply to
such requested Borrowing.
(c) MAKING OF ADVANCES.
(i) In the event that Agent shall elect to have the terms of this
SECTION 2.3(c) apply to a requested Borrowing as described in SECTION
2.3(b), then promptly after receipt of a request for a Borrowing
pursuant to SECTION 2.3(a), Agent shall notify the Lenders, not later
than 1:00 p.m. (California time) on the Business Day immediately
preceding the Funding Date applicable thereto, by telecopy, telephone,
or other similar form of transmission, of the requested Borrowing. Each
Lender shall make the amount of such Lender's Pro Rata Share of the
requested Borrowing available to Agent in immediately available funds,
to Agent's Account, not later than 10:00 a.m. (California time) on the
Funding Date applicable thereto. After Agent's receipt of the proceeds
of such Advances, upon satisfaction of the applicable conditions
precedent set forth in SECTION 3 hereof, Agent shall make the proceeds
thereof available to Borrower on the applicable Funding Date by
transferring immediately available funds equal to such proceeds
received by Agent to Borrower's Designated Account; PROVIDED, HOWEVER,
that, subject to the provisions of SECTION 2.3(i), Agent shall not
request any Lender to make, and no Lender shall have the obligation to
make, any Advance if Agent shall have
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actual knowledge that (1) one or more of the applicable conditions
precedent set forth in SECTION 3 will not be satisfied on the requested
Funding Date for the applicable Borrowing unless such condition has
been waived, or (2) the requested Borrowing would exceed the
Availability on such Funding Date.
(ii) Unless Agent receives notice from a Lender on or prior to the
Closing Date or, with respect to any Borrowing after the Closing Date,
at least 1 Business Day prior to the date of such Borrowing, that such
Lender will not make available as and when required hereunder to Agent
for the account of Borrower the amount of that Lender's Pro Rata Share
of the Borrowing, Agent may assume that each Lender has made or will
make such amount available to Agent in immediately available funds on
the Funding Date and Agent may (but shall not be so required), in
reliance upon such assumption, make available to Borrower on such date
a corresponding amount. If and to the extent any Lender shall not have
made its full amount available to Agent in immediately available funds
and Agent in such circumstances has made available to Borrower such
amount, that Lender shall on the Business Day following such Funding
Date make such amount available to Agent, together with interest at the
Defaulting Lender Rate for each day during such period. A notice
submitted by Agent to any Lender with respect to amounts owing under
this subsection shall be conclusive, absent manifest error. If such
amount is so made available, such payment to Agent shall constitute
such Lender's Advance on the date of Borrowing for all purposes of this
Agreement. If such amount is not made available to Agent on the
Business Day following the Funding Date, Agent will notify Borrower of
such failure to fund and, upon demand by Agent, Borrower shall pay such
amount to Agent for Agent's account, together with interest thereon for
each day elapsed since the date of such Borrowing, at a rate per annum
equal to the interest rate applicable at the time to the Advances
composing such Borrowing. The failure of any Lender to make any Advance
on any Funding Date shall not relieve any other Lender of any
obligation hereunder to make an Advance on such Funding Date, but no
Lender shall be responsible for the failure of any other Lender to make
the Advance to be made by such other Lender on any Funding Date.
(iii) Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by Borrower to Agent for the Defaulting
Lender's benefit, and, in the absence of such transfer to the
Defaulting Lender, Agent shall transfer any such payments to each other
non-Defaulting Lender member of the Lender Group ratably in accordance
with their Commitments (but only to the extent that such Defaulting
Lender's Advance was funded by the other members of the Lender Group)
or, if so directed by Borrower and if no Default or Event of Default
had occurred and is continuing (and to the extent such Defaulting
Lender's Advance was not funded by the Lender Group), retain
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same to be re-advanced to Borrower as if such Defaulting Lender had
made Advances to Borrower. Subject to the foregoing, Agent may hold
and, in its Permitted Discretion, re-lend to Borrower for the account
of such Defaulting Lender the amount of all such payments received and
retained by it for the account of such Defaulting Lender. Solely for
the purposes of voting or consenting to matters with respect to the
Loan Documents, such Defaulting Lender shall be deemed not to be a
"Lender" and such Lender's Commitment shall be deemed to be zero. This
Section shall remain effective with respect to such Lender until (x)
the Obligations under this Agreement shall have been declared or shall
have become immediately due and payable, (y) the non-Defaulting
Lenders, Agent, and Borrower shall have waived such Defaulting Lender's
default in writing, or (z) the Defaulting Lender makes its Pro Rata
Share of the applicable Advance and pays to Agent all amounts owing by
Defaulting Lender in respect thereof. The operation of this Section
shall not be construed to increase or otherwise affect the Commitment
of any Lender, to relieve or excuse the performance by such Defaulting
Lender or any other Lender of its duties and obligations hereunder, or
to relieve or excuse the performance by Borrower of its duties and
obligations hereunder to Agent or to the Lenders other than such
Defaulting Lender. Any such failure to fund by any Defaulting Lender
shall constitute a material breach by such Defaulting Lender of this
Agreement and shall entitle Borrower at its option, upon written notice
to Agent, to arrange for a substitute Lender to assume the Commitment
of such Defaulting Lender, such substitute Lender to be acceptable to
Agent. In connection with the arrangement of such a substitute Lender,
the Defaulting Lender shall have no right to refuse to be replaced
hereunder, and agrees to execute and deliver a completed form of
Assignment and Acceptance Agreement in favor of the substitute Lender
(and agrees that it shall be deemed to have executed and delivered such
document if it fails to do so) subject only to being repaid its share
of the outstanding Obligations (other than Bank Product Obligations)
(including an assumption of its Pro Rata Share of the Risk
Participation Liability) without any premium or penalty of any kind
whatsoever; PROVIDED FURTHER, HOWEVER, that any such assumption of the
Commitment of such Defaulting Lender shall not be deemed to constitute
a waiver of any of the Lender Groups' or Borrower's rights or remedies
against any such Defaulting Lender arising out of or in relation to
such failure to fund.
(d) MAKING OF SWING LOANS.
(i) In the event Agent shall elect, with the consent of Swing
Lender, as a Lender, to have the terms of this SECTION 2.3(d) apply to
a requested Borrowing as described in SECTION 2.3(b), Swing Lender as a
Lender shall make such Advance in the amount of such Borrowing (any
such Advance made solely by Swing Lender as a Lender pursuant to this
SECTION 2.3(d) being
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referred to as a "SWING LOAN" and such Advances being referred to
collectively as "SWING LOANS") available to Borrower on the Funding
Date applicable thereto by transferring immediately available funds to
Borrower's Designated Account. Each Swing Loan is an Advance hereunder
and shall be subject to all the terms and conditions applicable to
other Advances, except that all payments on any Swing Loan shall be
payable to Swing Lender as a Lender solely for its own account (and for
the account of the holder of any participation interest with respect to
such Swing Loan). Subject to the provisions of SECTION 2.3(i), Agent
shall not request Swing Lender as a Lender to make, and Swing Lender as
a Lender shall not make, any Swing Loan if Agent has actual knowledge
that (i) one or more of the applicable conditions precedent set forth
in SECTION 3 will not be satisfied on the requested Funding Date for
the applicable Borrowing unless such condition has been waived, or (ii)
the requested Borrowing would exceed the Availability on such Funding
Date. Swing Lender as a Lender shall not otherwise be required to
determine whether the applicable conditions precedent set forth in
SECTION 3 have been satisfied on the Funding Date applicable thereto
prior to making, in its sole discretion, any Swing Loan.
(ii) The Swing Loans shall be secured by the Agent's Liens, shall
constitute Advances and Obligations hereunder, and shall bear interest
at the rate applicable from time to time to Advances that are Base Rate
Loans.
(e) AGENT ADVANCES.
(i) Agent hereby is authorized by Borrower and the Lenders, from
time to time in Agent's sole discretion, (1) after the occurrence and
during the continuance of a Default or an Event of Default, or (2) at
any time that any of the other applicable conditions precedent set
forth in SECTION 3 have not been satisfied, to make Advances to
Borrower on behalf of the Lenders that Agent, in its Permitted
Discretion deems necessary or desirable (A) to preserve or protect the
Collateral, or any portion thereof, (B) to enhance the likelihood of
repayment of the Obligations (other than the Bank Product Obligations),
or (C) to pay any other amount chargeable to Borrower pursuant to the
terms of this Agreement, including Lender Group Expenses and the costs,
fees, and expenses described in SECTION 10 (any of the Advances
described in this SECTION 2.3(e) shall be referred to as "AGENT
ADVANCES"). Each Agent Advance is an Advance hereunder and shall be
subject to all the terms and conditions applicable to other Advances,
except that all payments thereon shall be payable to Agent solely for
its own account (and for the account of the holder of any participation
interest with respect to such Agent Advance).
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(ii) The Agent Advances shall be repayable on demand and secured by
the Agent's Liens granted to Agent under the Loan Documents, shall
constitute Advances and Obligations hereunder, and shall bear interest
at the rate applicable from time to time to Advances that are Base Rate
Loans.
(f) SETTLEMENT. It is agreed that each Lender's funded portion of
the Advances is intended by the Lenders to equal, at all times, such Lender's
Pro Rata Share of the outstanding Advances. Such agreement notwithstanding,
Agent, Swing Lender, and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by Borrower) that in order to facilitate the
administration of this Agreement and the other Loan Documents, settlement among
them as to the Advances, the Swing Loans, and the Agent Advances shall take
place on a periodic basis in accordance with the following provisions:
(i) Agent shall request settlement ("SETTLEMENT") with the Lenders
on a weekly basis, or on a more frequent basis if so determined by
Agent, (1) on behalf of Swing Lender, with respect to each outstanding
Swing Loan, (2) for itself, with respect to each Agent Advance, and (3)
with respect to Collections received, as to each by notifying the
Lenders by telecopy, telephone, or other similar form of transmission,
of such requested Settlement, no later than 2:00 p.m. (California time)
on the Business Day immediately prior to the date of such requested
Settlement (the date of such requested Settlement being the "SETTLEMENT
DATE"). Such notice of a Settlement Date shall include a summary
statement of the amount of outstanding Advances, Swing Loans, and Agent
Advances for the period since the prior Settlement Date. Subject to the
terms and conditions contained herein (including SECTION 2.3(c)(iii)):
(y) if a Lender's balance of the Advances, Swing Loans, and Agent
Advances exceeds such Lender's Pro Rata Share of the Advances, Swing
Loans, and Agent Advances as of a Settlement Date, then Agent shall, by
no later than 12:00 p.m. (California time) on the Settlement Date,
transfer in immediately available funds to the account of such Lender
as such Lender may designate, an amount such that each such Lender
shall, upon receipt of such amount, have as of the Settlement Date, its
Pro Rata Share of the Advances, Swing Loans, and Agent Advances, and
(z) if a Lender's balance of the Advances, Swing Loans, and Agent
Advances is less than such Lender's Pro Rata Share of the Advances,
Swing Loans, and Agent Advances as of a Settlement Date, such Lender
shall no later than 12:00 p.m. (California time) on the Settlement Date
transfer in immediately available funds to the Agent's Account, an
amount such that each such Lender shall, upon transfer of such amount,
have as of the Settlement Date, its Pro Rata Share of the Advances,
Swing Loans, and Agent Advances. Such amounts made available to Agent
under clause (z) of the immediately preceding sentence shall be applied
against the amounts of the applicable Swing Loan or Agent Advance and,
together with the portion of such Swing Loan or Agent Advance
representing
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Swing Lender's Pro Rata Share thereof, shall constitute Advances of
such Lenders. If any such amount is not made available to Agent by any
Lender on the Settlement Date applicable thereto to the extent required
by the terms hereof, Agent shall be entitled to recover for its account
such amount on demand from such Lender together with interest thereon
at the Defaulting Lender Rate.
(ii) In determining whether a Lender's balance of the Advances,
Swing Loans, and Agent Advances is less than, equal to, or greater than
such Lender's Pro Rata Share of the Advances, Swing Loans, and Agent
Advances as of a Settlement Date, Agent shall, as part of the relevant
Settlement, apply to such balance the portion of payments actually
received in good funds by Agent with respect to principal, interest,
fees payable by Borrower and allocable to the Lenders hereunder, and
proceeds of collateral. To the extent that a net amount is owed to any
such Lender after such application, such net amount shall be
distributed by Agent to that Lender as part of such next Settlement.
(iii) Between Settlement Dates, Agent, to the extent no Agent
Advances or Swing Loans are outstanding, may pay over to Swing Lender
any payments received by Agent, that in accordance with the terms of
this Agreement would be applied to the reduction of the Advances, for
application to Swing Lender's Pro Rata Share of the Advances. If, as of
any Settlement Date, Collections received since the then immediately
preceding Settlement Date have been applied to Swing Lender's Pro Rata
Share of the Advances other than to Swing Loans, as provided for in the
previous sentence, Swing Lender shall pay to Agent for the accounts of
the Lenders, and Agent shall pay to the Lenders, to be applied to the
outstanding Advances of such Lenders, an amount such that each Lender
shall, upon receipt of such amount, have, as of such Settlement Date,
its Pro Rata Share of the Advances. During the period between
Settlement Dates, Swing Lender with respect to Swing Loans, Agent with
respect to Agent Advances, and each Lender (subject to the effect of
letter agreements between Agent and individual Lenders) with respect to
the Advances other than Swing Loans and Agent Advances, shall be
entitled to interest at the applicable rate or rates payable under this
Agreement on the daily amount of funds employed by Swing Lender, Agent,
or the Lenders, as applicable.
(g) NOTATION. Agent shall record on its books the principal amount
of the Advances owing to each Lender, including the Swing Loans owing to Swing
Lender, and Agent Advances owing to Agent, and the interests therein of each
Lender, from time to time. In addition, each Lender is authorized, at such
Lender's option, to note the date and amount of each payment or prepayment of
principal of such Lender's Advances in its books and
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records, including computer records, such books and records constituting
conclusive evidence, absent manifest error, of the accuracy of the information
contained therein.
(h) LENDERS' FAILURE TO PERFORM. All Advances (other than Swing
Loans and Agent Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.
(i) OPTIONAL OVERADVANCES. Any contrary provision of this Agreement
notwithstanding, the Lenders hereby authorize Agent or Swing Lender, as
applicable, and Agent or Swing Lender, as applicable, may, but is not obligated
to, knowingly and intentionally, continue to make Advances (including Swing
Loans) to Borrower notwithstanding that an Overadvance exists or thereby would
be created, so long as (i) after giving effect to such Advances (including a
Swing Loan), the outstanding Revolver Usage does not exceed the Borrowing Base
by more than $500,000, (ii) after giving effect to such Advances (including a
Swing Loan), the outstanding Revolver Usage (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender Group Expenses) does
not exceed the Maximum Revolver Amount, and (iii) at the time of the making of
any such Advance (including any Swing Loan), Agent does not believe, in good
faith, that the Overadvance created by such Advance will be outstanding for more
than 90 days. The foregoing provisions are for the exclusive benefit of Agent,
Swing Lender, and the Lenders and are not intended to benefit Borrower in any
way. The Advances and Swing Loans, as applicable, that are made pursuant to this
SECTION 2.3(i) shall be subject to the same terms and conditions as any other
Advance or Swing Loan, as applicable, except that the rate of interest
applicable thereto shall be the rate applicable to Advances under SECTION 2.6(c)
hereof without regard to the presence or absence of a Default or Event of
Default.
(i) In the event Agent obtains actual knowledge that the Revolver
Usage exceeds the amounts permitted by the preceding paragraph,
regardless of the amount of, or reason for, such excess, Agent shall
notify Lenders as soon as practicable (and prior to making any (or any
additional) intentional Overadvances (except for and excluding amounts
charged to the Loan Account for interest, fees, or Lender Group
Expenses) unless Agent determines that prior notice would result in
imminent harm to the Collateral or its value), and the Lenders with
Revolver Commitments thereupon shall, together with Agent, jointly
determine the terms of arrangements that shall be implemented with
Borrower intended to reduce, within a reasonable time, the outstanding
principal amount of the Advances to Borrower to an amount permitted by
the preceding paragraph. In the event Agent or any Lender disagrees
over the
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terms of reduction or repayment of any Overadvance, the terms of
reduction or repayment thereof shall be implemented according to the
determination of the Required Lenders.
(ii) Each Lender with a Revolver Commitment shall be obligated to
settle with Agent as provided in SECTION 2.3(f) for the amount of such
Lender's Pro Rata Share of any unintentional Overadvances by Agent
reported to such Lender, any intentional Overadvances made as permitted
under this SECTION 2.3(i), and any Overadvances resulting from the
charging to the Loan Account of interest, fees, or Lender Group
Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWER.
(i) Except as otherwise expressly provided herein, all
payments by Borrower shall be made to Agent's Account for the account
of the Lender Group and shall be made in immediately available funds,
no later than 11:00 a.m. (California time) on the date specified
herein. Any payment received by Agent later than 11:00 a.m. (California
time) shall be deemed to have been received on the following Business
Day and any applicable interest or fee shall continue to accrue until
such following Business Day.
(ii) Unless Agent receives notice from Borrower prior to the
date on which any payment is due to the Lenders that Borrower will not
make such payment in full as and when required, Agent may assume that
Borrower has made (or will make) such payment in full to Agent on such
date in immediately available funds and Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender
on such due date an amount equal to the amount then due such Lender. If
and to the extent Borrower does not make such payment in full to Agent
on the date when due, each Lender severally shall repay to Agent on
demand such amount distributed to such Lender, together with interest
thereon at the Defaulting Lender Rate for each day from the date such
amount is distributed to such Lender until the date repaid.
(b) APPORTIONMENT AND APPLICATION OF PAYMENTS.
(i) Except as otherwise provided with respect to Defaulting Lenders
and except as otherwise provided in the Loan Documents (including
letter agreements between Agent and individual Lenders), aggregate
principal and interest payments shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the Obligations
to which such payments relate held by each Lender) and payments of fees
and expenses
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(other than fees or expenses that are for Agent's separate account,
after giving effect to any letter agreements between Agent and
individual Lenders) shall be apportioned ratably among the Lenders
having a Pro Rata Share of the type of Commitment or Obligation to
which a particular fee relates. All payments shall be remitted to Agent
and all such payments (other than payments received while no Event of
Default has occurred and is continuing and which relate to the payment
of principal or interest of specific Obligations or which relate to the
payment of specific fees), and all proceeds of Accounts or other
Collateral received by Agent, shall be applied as follows:
(A) FIRST, to pay any Lender Group Expenses then due to
Agent under the Loan Documents, until paid in full,
(B) SECOND, to pay any Lender Group Expenses then due to the
Lenders under the Loan Documents, on a ratable basis, until paid
in full,
(C) THIRD, to pay any fees then due to Agent (for its
separate accounts, after giving effect to any letter agreements
between Agent and individual Lenders) under the Loan Documents
until paid in full,
(D) FOURTH, to pay any fees then due to any or all of the
Lenders (after giving effect to any letter agreements between
Agent and individual Lenders) under the Loan Documents, on a
ratable basis, until paid in full,
(E) FIFTH, to pay interest due in respect of all Agent
Advances, until paid in full,
(F) SIXTH, ratably to pay interest due in respect of the
Advances (other than Agent Advances) and the Swing Loans until
paid in full,
(G) SEVENTH, to pay the principal of all Agent Advances
until paid in full,
(H) EIGHTH, to pay the principal of all Swing Loans until
paid in full,
(I) NINTH, so long as no Event of Default has occurred and
is continuing, and at Agent's election (which election Agent
agrees will not be made if an Overadvance would be created
thereby), to pay amounts then due and owing by Borrower or its
Subsidiaries in respect of Bank Products, until paid in full,
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(J) TENTH, so long as an Event of Default has not occurred
and is not continuing, to pay the principal of all Advances
until paid in full,
(K) ELEVENTH, so long as no Event of Default has occurred
and is continuing, to pay the principal of all Advances until
paid in full,
(L) TWELFTH, if an Event of Default has occurred and is
continuing, ratably (i) to pay the principal of all Advances
until paid in full, and (ii) to Agent, to be held by Agent, for
the benefit of the applicable Bank Product Providers, as cash
collateral in an amount up to the amount of the Bank Products
Reserve established prior to the occurrence of, and not in
contemplation of, the subject Event of Default until Borrower's
and its Subsidiaries' obligations in respect of the then extant
Bank Products have been paid in full or the cash collateral
amount has been exhausted,
(M) THIRTEENTH, to pay any other Obligations (including Bank
Product Obligations) until paid in full, and
(N) FOURTEENTH, to Borrower (to be wired to the Designated
Account) or such other Person entitled thereto under applicable
law.
(ii) Agent promptly shall distribute to each Lender, pursuant to the
applicable wire instructions received from each Lender in writing, such
funds as it may be entitled to receive, subject to a Settlement delay
as provided in SECTION 2.3(f).
(iii) In each instance, so long as no Event of Default has occurred
and is continuing, SECTION 2.4(b) shall not be deemed to apply to any
payment by Borrower specified by Borrower to be for the payment of
specific Obligations then due and payable (or prepayable) under any
provision of this Agreement.
(iv) For purposes of the foregoing, "paid in full" means payment of
all amounts owing under the Loan Documents according to the terms
thereof, including loan fees, service fees, professional fees, interest
(and specifically including interest accrued after the commencement of
any Insolvency Proceeding), default interest, interest on interest, and
expense reimbursements, whether or not the same would be or is allowed
or disallowed in whole or in part in any Insolvency Proceeding.
(v) In the event of a direct conflict between the priority
provisions of this SECTION 2.4 and other provisions contained in any
other Loan Document, it is the intention of the parties hereto that
such priority provisions
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in such documents shall be read together and construed, to the fullest
extent possible, to be in concert with each other. In the event of any
actual, irreconcilable conflict that cannot be resolved as aforesaid,
the terms and provisions of this SECTION 2.4 shall control and govern.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrower to the Lender
Group pursuant to SECTIONS 2.1 AND 2.12 is greater than either the Dollar or
percentage limitations set forth in SECTIONS 2.1 OR 2.12, (an "OVERADVANCE"),
except with respect to optional Overadvances provided for in SECTION 2.3(i),
Borrower immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in accordance with
the priorities set forth in SECTION 2.4(b). In addition, Borrower hereby
promises to pay the Obligations (including principal, interest, fees, costs, and
expenses) in Dollars in full to the Lender Group as and when due and payable
under the terms of this Agreement and the other Loan Documents.
2.6 INTEREST RATES: RATES, PAYMENTS, AND CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause (c) below, all
Obligations (except for Bank Product Obligations not charged to the Loan
Account) that have been charged to the Loan Account pursuant to the terms hereof
shall bear interest on the Daily Balance thereof at a per annum rate equal to
the Base Rate plus the Base Rate Margin.
(b) [INTENTIONALLY OMITTED]
(c) DEFAULT RATE. Upon the occurrence and during the continuation of
an Event of Default (and at the election of Agent or the Required Lenders), all
Obligations (except for Bank Product Obligations) that have been charged to the
Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof at a per annum rate equal to 4 percentage points above the per
annum rate otherwise applicable hereunder.
(d) PAYMENT. Interest, and all other fees payable hereunder shall be
due and payable, in arrears, on the first day of each month at any time that
Obligations or Commitments are outstanding. Borrower hereby authorizes Agent,
from time to time without prior notice to Borrower, to charge such interest and
fees, all Lender Group Expenses (as and when incurred), the fees and costs
provided for in SECTION 2.11 (as and when accrued or incurred), and all other
payments as and when due and payable under any Loan Document (including any
amounts due and payable to any Bank Product Provider in respect of Bank Products
up to the amount of the then extant Bank Products Reserve) to Borrower's Loan
Account, which amounts thereafter shall constitute Advances hereunder and shall
accrue interest at the rate then applicable hereunder. Any interest not paid
when due shall be compounded by being charged to Borrower's Loan Account and
shall thereafter constitute Advances hereunder and shall accrue interest at the
rate then applicable hereunder.
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(e) COMPUTATION. All interest and fees chargeable under the Loan
Documents shall be computed on the basis of a 360 day year for the actual number
of days elapsed. In the event the Base Rate is changed from time to time
hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE. In no event
shall the interest rate or rates payable under this Agreement, plus any other
amounts paid in connection herewith, exceed the highest rate permissible under
any law that a court of competent jurisdiction shall, in a final determination,
deem applicable. Borrower and the Lender Group, in executing and delivering this
Agreement, intend legally to agree upon the rate or rates of interest and manner
of payment stated within it; PROVIDED, HOWEVER, that, anything contained herein
to the contrary notwithstanding, if said rate or rates of interest or manner of
payment exceeds the maximum allowable under applicable law, then, IPSO FACTO, as
of the date of this Agreement, Borrower is and shall be liable only for the
payment of such maximum as allowed by law, and payment received from Borrower in
excess of such legal maximum, whenever received, shall be applied to reduce the
principal balance of the Obligations to the extent of such excess.
2.7 CASH MANAGEMENT.
(a) Borrower shall (i) establish and maintain cash management
services of a type and on terms satisfactory to Agent at Fleet National Bank,
N.A. or such other bank which is satisfactory to Agent in its Permitted
Discretion (the "CASH MANAGEMENT BANK"), and (ii) deposit or cause to be
deposited promptly, and in any event no later than the first Business Day after
the date of receipt thereof, all Collections into a bank account in Agent's name
(a "CASH MANAGEMENT ACCOUNT") at the Cash Management Bank. Upon the request of
Agent after the occurrence of an Event of Default, Borrower shall request in
writing and otherwise take such reasonable steps to ensure that all of its
Account Debtors and Makers forward payment of the amounts owed by them to
Borrower directly to such Cash Management Bank.
(b) The Cash Management Bank shall establish and maintain Cash
Management Agreements with Agent and Borrower, in form and substance acceptable
to Agent. Each such Cash Management Agreement shall provide, among other things,
that (i) all items of payment deposited in such Cash Management Account and
proceeds thereof are held by such Cash Management Bank as agent or
bailee-in-possession for Agent, (ii) the Cash Management Bank has no rights of
setoff or recoupment or any other claim against the applicable Cash Management
Account other than for payment of its service fees and other charges directly
related to the administration of such Cash Management Account and for returned
checks or other items of payment, and (iii) it immediately will forward by daily
sweep all available amounts in the applicable Cash Management Account to the
Agent's Account.
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(c) The Cash Management Account shall be a cash collateral account,
with all cash, checks and similar items of payment in such account securing
payment of the Obligations, and in which Borrower is hereby deemed to have
granted a Lien to Agent.
2.8 CREDITING PAYMENTS. The receipt of any payment item by Agent (whether
from transfers to Agent by the Cash Management Bank pursuant to the Cash
Management Agreements or otherwise) shall not be considered a payment on account
unless such payment item is a wire transfer of immediately available federal
funds made to the Agent's Account or unless and until such payment item is
honored when presented for payment. Should any payment item not be honored when
presented for payment, then Borrower shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person, or without instructions if pursuant to
SECTION 2.6(d). Borrower agrees to establish and maintain the Designated Account
with the Designated Account Bank for the purpose of receiving the proceeds of
the Advances requested by Borrower and made by Agent or the Lenders hereunder.
Unless otherwise agreed by Agent and Borrower, any Advance, Agent Advance, or
Swing Loan requested by Borrower and made by Agent or the Lenders hereunder
shall be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent shall
maintain an account on its books in the name of Borrower (the "LOAN ACCOUNT") on
which Borrower will be charged with all Advances (including Agent Advances and
Swing Loans) made by Agent, Swing Lender, or the Lenders to Borrower or for
Borrower's account, and with all other payment Obligations hereunder or under
the other Loan Documents (except for Bank Product Obligations), including,
accrued interest, fees and expenses, and Lender Group Expenses. In accordance
with SECTION 2.8, the Loan Account will be credited with all payments received
by Agent from Borrower or for Borrower's account, including all amounts received
in the Agent's Account from the Cash Management Bank. Agent shall render
statements regarding the Loan Account to Borrower, including principal,
interest, fees, and including an itemization of all charges and expenses
constituting Lender Group Expenses owing, and such statements shall be
conclusively presumed to be correct and accurate and constitute an account
stated between Borrower and the Lender Group unless, within 30 days after
receipt thereof by Borrower, Borrower shall deliver to Agent written objection
thereto describing the error or errors contained in any such statements.
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2.11 FEES. Borrower shall pay to Agent the following fees and charges, which
fees and charges shall be non-refundable when paid (irrespective of whether this
Agreement is terminated thereafter) and shall be apportioned among the Lenders
in accordance with the terms of letter agreements between Agent and individual
Lenders:
(a) FEE LETTER FEES. As and when due and payable under the terms of
the Fee Letter, Borrower shall pay to Agent the fees set forth in the Fee
Letter, and
(b) AUDIT, APPRAISAL, AND VALUATION CHARGES. For the separate
account of Agent, audit, appraisal, and valuation fees and charges as follows
(i) a fee of $850 per day, per auditor, plus out-of-pocket expenses for each
financial audit of Borrower performed by personnel employed by Agent, (ii) if
implemented, a one time charge of $3,000 plus out-of-pocket expenses for
expenses for the establishment of electronic collateral reporting systems, and
(iii) the actual charges paid or incurred by Agent if it elects to employ the
services of one or more third Persons to perform financial audits of Borrower,
to appraise the Collateral, or any portion thereof, or to assess Borrower's
business valuation.
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The obligation
of the Lender Group (or any member thereof) to make the initial Advance (or
otherwise to extend any credit provided for hereunder), is subject to the
fulfillment, to the satisfaction of Agent, of each of the conditions precedent
set forth below:
(a) the Closing Date shall occur on or before August 5, 2002;
(b) Agent shall have received all financing statements required by
Agent, duly authorized by Borrower, and Agent shall have received searches
reflecting the filing of all such financing statements;
(c) Agent shall have received each of the following documents, in
form and substance satisfactory to Agent, duly executed, and each such document
shall be in full force and effect:
(i) the Allocation Agreement,
(ii) the Cash Management Agreements,
(iii) the Control Agreements,
(iv) the Disbursement Letter,
(v) the Due Diligence Letter,
(vi) the Fee Letter,
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(vii) the Guaranty,
(viii) the HPSC Security Agreement,
(ix) the Note,
(x) the Officers' Certificate,
(xi) the Purchase Agreement,
(xii) the Servicing Agreement,
(xiii) the Stock Pledge Agreement, together with all certificates
representing the shares of Stock pledged thereunder, as well
as Stock powers with respect thereto endorsed in blank,
(xiv) the Trademark Security Agreement, and
(xv) the Validity Agreement;
(d) Agent shall have received a certificate from the Secretary of
Borrower attesting to the resolutions of Borrower's Board of Directors
authorizing its execution, delivery, and performance of this Agreement and the
other Loan Documents to which Borrower is a party and authorizing specific
officers of Borrower to execute the same;
(e) Agent shall have received copies of Borrower's Governing
Documents, as amended, modified, or supplemented to the Closing Date, certified
by the Secretary of Borrower;
(f) Agent shall have received a certificate of status with respect
to Borrower, dated within 10 days of the Closing Date, such certificate to be
issued by the appropriate officer of the jurisdiction of organization of
Borrower, which certificate shall indicate that Borrower is in good standing in
such jurisdiction;
(g) Agent shall have received certificates of status with respect to
Borrower, each dated within 30 days of the Closing Date, such certificates to be
issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of Borrower) in which its failure to be duly
qualified or licensed would constitute a Material Adverse Change, which
certificates shall indicate that Borrower is in good standing in such
jurisdictions;
(h) Agent shall have received a certificate from the Secretary of
HPSC attesting to the resolutions of HPSC's Board of Directors authorizing its
execution, delivery, and performance of the Loan Documents to which HPSC is a
party and authorizing specific officers of HPSC to execute the same;
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(i) Agent shall have received copies of HPSC's Governing Documents,
as amended, modified, or supplemented to the Closing Date, certified by the
Secretary of HPSC;
(j) Agent shall have received a certificate of status with respect
to HPSC, dated within 10 days of the Closing Date, such certificate to be issued
by the appropriate officer of the jurisdiction of organization of HPSC, which
certificate shall indicate that HPSC is in good standing in such jurisdiction;
(k) Agent shall have received certificates of status with respect to
HPSC, each dated within 30 days of the Closing Date, such certificates to be
issued by the appropriate officer of the jurisdictions (other than the
jurisdiction of organization of HPSC) in which its failure to be duly qualified
or licensed would have a material adverse effect on HPSC, which certificates
shall indicate that HPSC is in good standing in such jurisdictions;
(l) Agent shall have received a certificate of insurance, together
with the endorsements thereto, as are required by SECTION 6.8, the form and
substance of which shall be satisfactory to Agent;
(m) Agent shall have received an opinion of Borrower's counsel in
form and substance satisfactory to Agent;
(n) Agent shall have received satisfactory evidence (including a
certificate of the chief financial officer of Borrower) that all tax returns
required to be filed by Borrower have been timely filed and all taxes upon
Borrower or its properties, assets, income, and franchises (including Real
Property taxes and payroll taxes) have been paid prior to delinquency, except
such taxes that are the subject of a Permitted Protest;
(o) Borrower shall have the Required Availability after giving
effect to the initial extensions of credit hereunder;
(p) Agent shall have completed its business, legal, and collateral
due diligence, including a collateral audit and review of Borrower's books and
records and verification of Borrower's representations and warranties to the
Lender Group, the results of which shall be satisfactory to Agent;
(q) Agent shall have received completed reference checks with
respect to Borrower's senior management, the results of which are satisfactory
to Agent in its sole discretion;
(r) Agent shall have received Borrower's Closing Date Business Plan;
(s) Borrower shall have paid all Lender Group Expenses incurred in
connection with the transactions evidenced by this Agreement;
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(t) Each of the HPSC Conditions shall have been satisfied or waived;
(u) Agent shall have received copies of (i) Borrower's standard form
loan documents, and (ii) Borrower's employment contract with Xxxxxxx Mount,
together with a certificate of the Secretary of Borrower certifying each such
document as being a true, correct, and complete copy thereof;
(v) Xxxxx Fargo's credit committee has approved the terms and
conditions set forth in this Agreement;
(w) Borrower shall have received all licenses, approvals or evidence
of other actions required by any Governmental Authority in connection with the
execution and delivery of this Agreement or any other Loan Document to which it
is a party or with the consummation of the transactions contemplated hereby and
thereby; and
(x) all other documents and legal matters in connection with the
transactions contemplated by this Agreement shall have been delivered, executed,
or recorded and shall be in form and substance satisfactory to Agent.
3.2 CONDITIONS SUBSEQUENT TO THE INITIAL EXTENSION OF CREDIT. The obligation
of the Lender Group (or any member thereof) to continue to make Advances (or
otherwise extend credit hereunder) is subject to the fulfillment, on or before
the date applicable thereto, of each of the conditions subsequent set forth
below (the failure by Borrower to so perform or cause to be performed
constituting an Event of Default):
(a) within 30 days of the Closing Date, deliver to Agent certified
copies of the policies of insurance, together with the endorsements thereto, as
are required by SECTION 6.8, the form and substance of which shall be
satisfactory to Agent and its counsel; and
(b) as soon as practicable after the date of Borrower's receipt of a
written request therefor from Agent, but in any event within 45 days of
Borrower's receipt of such request, and so long as such product is available on
commercially reasonable basis, deliver to Agent evidence satisfactory to Agent
that Borrower has secured an interest rate Hedge Agreement on terms and
conditions satisfactory (including notional amount) to Agent.
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The obligation of the
Lender Group (or any member thereof) to make all Advances (or to extend any
other credit hereunder) shall be subject to the following conditions precedent:
(a) the representations and warranties contained in this Agreement
and the other Loan Documents shall be true and correct in all material respects
on and as of the date of such extension of credit, as though made on and as of
such date (except to the extent that such representations and warranties relate
solely to an earlier date),
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(b) no Default or Event of Default shall have occurred and be
continuing on the date of such extension of credit, nor shall either result from
the making thereof,
(c) no injunction, writ, restraining order, or other order of any
nature prohibiting, directly or indirectly, the extending of such credit shall
have been issued and remain in force by any Governmental Authority against
Borrower, Agent, any Lender, or any of their Affiliates,
(d) no Material Adverse Change shall have occurred, and
(e) Agent shall have received a Borrowing Base Certificate which
includes (i) a detailed calculation of the Borrowing Base as of the date of the
requested Advance, and (ii) detail regarding Receivables that are not Eligible
Receivables.
3.4 TERM. This Agreement shall continue in full force and effect for
a term ending on Februrary 2, 2003 (the "MATURITY DATE"). The foregoing
notwithstanding, the Lender Group, upon the election of the Required Lenders,
shall have the right to terminate its obligations under this Agreement
immediately and without notice upon the occurrence and during the continuation
of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this Agreement, all
Obligations (including all Bank Products Obligations) immediately shall become
due and payable without notice or demand (including providing cash collateral to
be held by Agent for the benefit of the Bank Product Providers with respect to
the then extant Bank Products Obligations). No termination of this Agreement,
however, shall relieve or discharge Borrower of its duties, Obligations, or
covenants hereunder and the Agent's Liens in the Collateral shall remain in
effect until all Obligations have been fully and finally discharged and the
Lender Group's obligations to provide additional credit hereunder have been
terminated. When this Agreement has been terminated and all of the Obligations
have been fully and finally discharged and the Lender Group's obligations to
provide additional credit under the Loan Documents have been terminated
irrevocably, Agent will, at Borrower's sole expense, execute and deliver any UCC
termination statements, lien releases, mortgage releases, re-assignments of
trademarks, discharges of security interests, and other similar discharge or
release documents (and, if applicable, in recordable form) as are reasonably
necessary to release, as of record, the Agent's Liens and all notices of
security interests and liens previously filed by Agent with respect to the
Obligations.
3.6 EARLY TERMINATION BY BORROWER. Borrower has the option, at any time upon
90 days prior written notice to Agent, to terminate this Agreement by paying to
Agent, for the benefit of the Lender Group, in cash, the Obligations (including
providing cash collateral to be held by Agent for the benefit of the Bank
Product Providers with respect to the then extant Bank Products Obligations), in
full, together with the Applicable Prepayment Premium (to be allocated based
upon letter agreements between Agent and individual Lenders). If Borrower
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has sent a notice of termination pursuant to the provisions of this Section,
then the Commitments shall terminate and Borrower shall be obligated to repay
the Obligations (including providing cash collateral to be held by Agent for the
benefit of the Bank Product Providers with respect to the then extant Bank
Products Obligations), in full, together with the Applicable Prepayment Premium,
on the date set forth as the date of termination of this Agreement in such
notice. In the event of the termination of this Agreement and repayment of the
Obligations at any time prior to the Maturity Date, for any other reason,
including (a) termination upon the election of the Required Lenders to terminate
after the occurrence of an Event of Default, (b) foreclosure and sale of
Collateral, (c) sale of the Collateral in any Insolvency Proceeding, or (iv)
restructure, reorganization, or compromise of the Obligations by the
confirmation of a plan of reorganization or any other plan of compromise,
restructure, or arrangement in any Insolvency Proceeding, then, in view of the
impracticability and extreme difficulty of ascertaining the actual amount of
damages to the Lender Group or profits lost by the Lender Group as a result of
such early termination, and by mutual agreement of the parties as to a
reasonable estimation and calculation of the lost profits or damages of the
Lender Group, Borrower shall pay the Applicable Prepayment Premium to Agent (to
be allocated based upon letter agreements between Agent and individual Lenders),
measured as of the date of such termination.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Borrower hereby grants to Agent, for the
benefit of the Lender Group (and any Bank Product Provider to the extent that it
has provided Bank Products to Borrower or its Subsidiaries), a continuing
security interest in all of its right, title, and interest in all currently
existing and hereafter acquired or arising Collateral in order to secure prompt
repayment of any and all of the Obligations in accordance with the terms and
conditions of the Loan Documents and in order to secure prompt performance by
Borrower of each of its covenants and duties under the Loan Documents. The
Agent's Liens in and to the Collateral shall attach to all Collateral without
further act on the part of Agent or Borrower. Anything contained in this
Agreement or any other Loan Document to the contrary notwithstanding, except for
Permitted Dispositions, Borrower has no authority, express or implied, to
dispose of any item or portion of the Collateral.
4.2 NEGOTIABLE COLLATERAL. In the event that any Collateral, including
proceeds, is evidenced by or consists of Negotiable Collateral, and if and to
the extent that perfection or priority of Agent's security interest is dependent
on or enhanced by possession, Borrower, immediately upon the request of Agent,
shall endorse and deliver physical possession of such Negotiable Collateral to
Agent.
4.3 COLLECTION OF ACCOUNTS, GENERAL INTANGIBLES, AND NEGOTIABLE COLLATERAL.
At any time after the occurrence and during the continuation of an Event of
Default, Agent or Agent's designee may (a) notify Account Debtors of Borrower
that the Accounts, chattel paper, or General Intangibles have been assigned to
Agent or that Agent has a security
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interest therein, or (b) collect the Accounts, chattel paper, or General
Intangibles directly and charge the collection costs and expenses to the Loan
Account. Borrower agrees that it will hold in trust for the Lender Group, as the
Lender Group's trustee, any Collections that it receives after the occurrence
and during the continuation of an Event of Default, and immediately will deliver
said Collections to Agent or a Cash Management Bank in their original form as
received by Borrower.
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time upon the
request of Agent, Borrower shall execute and deliver to Agent, any and all
financing statements, original financing statements in lieu of continuation
statements, fixture filings, security agreements, pledges, assignments,
endorsements of certificates of title, and all other documents (including, upon
the occurrence and during the continuance of an Event of Default, assignments in
favor of Agent of each of the financing statements or mortgages filed by
Borrower or any of its Subsidiaries with respect to any Account Debtor, Maker or
other similar Persons) (the "ADDITIONAL DOCUMENTS") that Agent may request in
its Permitted Discretion, in form and substance satisfactory to Agent, to
perfect and continue perfected or better perfect the Agent's Liens in the
Collateral (whether now owned or hereafter arising or acquired), to create and
perfect Liens in favor of Agent in any Real Property acquired after the Closing
Date, and in order to fully consummate all of the transactions contemplated
hereby and under the other Loan Documents. To the maximum extent permitted by
applicable law, Borrower authorizes Agent to execute any such Additional
Documents in Borrower's name and authorizes Agent to file such executed
Additional Documents in any appropriate filing office. In addition, on such
periodic basis as Agent shall require, Borrower shall (a) provide Agent with a
report of all new patentable, copyrightable, or trademarkable materials acquired
or generated by Borrower or its Subsidiaries during the prior period, (b) cause
all patents, copyrights, and trademarks acquired or generated by Borrower or its
Subsidiaries that are not already the subject of a registration with the
appropriate filing office (or an application therefor diligently prosecuted) to
be registered with such appropriate filing office in a manner sufficient to
impart constructive notice of Borrower's or the applicable Subsidiary's
ownership thereof, and (c) cause to be prepared, executed, and delivered to
Agent supplemental schedules to the applicable Loan Documents to identify such
patents, copyrights, and trademarks as being subject to the security interests
created thereunder.
4.5 POWER OF ATTORNEY. Borrower hereby irrevocably makes, constitutes, and
appoints Agent (and any of Agent's officers, employees, or agents designated by
Agent) as Borrower's true and lawful attorney, with power to (a) if Borrower
refuses to, or fails timely to execute and deliver any of the documents
described in SECTION 4.4, sign the name of Borrower on any of the documents
described in SECTION 4.4, (b) at any time that an Event of Default has occurred
and is continuing, sign Borrower's name on any invoice or xxxx of lading
relating to the Collateral, drafts against Account Debtors or Makers, or notices
to Account Debtors or Makers, (c) send requests for verification of Accounts,
(d) endorse Borrower's name on any Collection item that may come into the Lender
Group's possession, (e) at any time that an Event of Default has occurred and is
continuing, make, settle, and
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adjust all claims under Borrower's policies of insurance and make all
determinations and decisions with respect to such policies of insurance, and (f)
at any time that an Event of Default has occurred and is continuing, settle and
adjust disputes and claims respecting the Accounts, chattel paper, or General
Intangibles directly with Account Debtors or Makers, for amounts and upon terms
that Agent determines to be reasonable, and Agent may cause to be executed and
delivered any documents and releases that Agent determines to be necessary. The
appointment of Agent as Borrower's attorney, and each and every one of its
rights and powers, being coupled with an interest, is irrevocable until all of
the Obligations have been fully and finally repaid and performed and the Lender
Group's obligations to extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their respective
officers, employees, or agents) shall have the right, from time to time
hereafter to inspect the Books and to check, test, and appraise the Collateral
in order to verify Borrower's financial condition or the amount, quality, value,
condition of, or any other matter relating to, the Collateral.
4.7 CONTROL AGREEMENTS. Borrower agrees that it will not transfer assets out
of any Securities Accounts other than as permitted under SECTION 7.19 and, if to
another securities intermediary, unless each of Borrower, Agent, and the
substitute securities intermediary have entered into a Control Agreement. No
arrangement contemplated hereby or by any Control Agreement in respect of any
Securities Accounts or other Investment Property shall be modified by Borrower
without the prior written consent of Agent. Upon the occurrence and during the
continuance of a Default or Event of Default, Agent may notify any securities
intermediary to liquidate the applicable Securities Account or any related
Investment Property maintained or held thereby and remit the proceeds thereof to
the Agent's Account.
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this Agreement,
Borrower makes the following representations and warranties to the Lender Group
which shall be true, correct, and complete, in all material respects, as of the
date hereof, and shall be true, correct, and complete, in all material respects,
as of the Closing Date, and at and as of the date of the making of each Advance
(or other extension of credit) made thereafter, as though made on and as of the
date of such Advance (or other extension of credit) (except to the extent that
such representations and warranties relate solely to an earlier date) and such
representations and warranties shall survive the execution and delivery of this
Agreement:
5.1 NO ENCUMBRANCES. Borrower has good and indefeasible title to the
Collateral, free and clear of Liens except for Permitted Liens.
5.2 ELIGIBLE RECEIVABLES. The Eligible Receivables are BONA FIDE existing
payment obligations of Account Debtors or Makers created by the lending of money
in the ordinary course of Borrower's business, unconditionally owed to Borrower
without defenses, disputes,
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offsets, counterclaims, or rights of return or cancellation. Borrower has not
received notice of actual or imminent bankruptcy, insolvency, or material
impairment of the financial condition of any Account Debtor or Maker regarding
any Eligible Receivable. Borrower has not received notice of any actual or
threatened litigation regarding the validity or enforceability of any Eligible
Receivable or any lien on collateral securing any Eligible Receivable. With
regard to each Eligible Receivable, Borrower has duly filed financing statements
against the applicable Account Debtor or Maker in all applicable jurisdictions.
5.3 [INTENTIONALLY OMITTED].
5.4 EQUIPMENT. All of the Equipment is used or held for use in Borrower's
business and is fit for such purposes.
5.5 LOCATION OF EQUIPMENT. The Equipment is not stored with a bailee,
warehouseman, or similar party and are located only at the locations identified
on SCHEDULE 5.5.
5.6 [INTENTIONALLY OMITTED].
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive office of
each of Borrower and HPSC is located at the respective addresses indicated in
SCHEDULE 5.7 and Borrower's and HPSC's respective XXXXx are identified in
SCHEDULE 5.7.
5.8 DUE ORGANIZATION AND QUALIFICATION; SUBSIDIARIES.
(a) Borrower is duly organized and existing and in good standing
under the laws of the jurisdiction of its organization and qualified to do
business in any state where the failure to be so qualified reasonably could be
expected to have a Material Adverse Change.
(b) [intentionally omitted].
(c) Set forth on SCHEDULE 5.8(c), is a complete and accurate list of
Borrower's direct and indirect Subsidiaries, showing: (i) the jurisdiction of
their organization, (ii) the number of shares of each class of common and
preferred Stock authorized for each of such Subsidiaries, and (iii) the number
and the percentage of the outstanding shares of each such class owned directly
or indirectly by Borrower. All of the outstanding capital Stock of each such
Subsidiary has been validly issued and is fully paid and non-assessable.
(d) Except as set forth on SCHEDULE 5.8(c), there are no
subscriptions, options, warrants, or calls relating to any shares of Borrower's
Subsidiaries' capital Stock, including any right of conversion or exchange under
any outstanding security or other instrument. Neither Borrower nor any of its
Subsidiaries is subject to any obligation
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(contingent or otherwise) to repurchase or otherwise acquire or retire any
shares of Borrower's Subsidiaries' capital Stock or any security convertible
into or exchangeable for any such capital Stock.
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) The execution, delivery, and performance by Borrower of this
Agreement and the Loan Documents to which it is a party have been duly
authorized by all necessary action on the part of Borrower.
(b) The execution, delivery, and performance by Borrower of this
Agreement and the Loan Documents to which it is a party do not and will not (i)
violate any provision of federal, state, or local law or regulation applicable
to Borrower, the Governing Documents of Borrower, or any order, judgment, or
decree of any court or other Governmental Authority binding on Borrower, (ii)
conflict with, result in a breach of, or constitute (with due notice or lapse of
time or both) a default under any material contractual obligation of Borrower,
(iii) result in or require the creation or imposition of any Lien of any nature
whatsoever upon any properties or assets of Borrower, other than Permitted
Liens, or (iv) require any approval of Borrower's interestholders or any
approval or consent of any Person under any material contractual obligation of
Borrower.
(c) Other than the filing of financing statements, fixture filings,
and Mortgages, the execution, delivery, and performance by Borrower of this
Agreement and the Loan Documents to which Borrower is a party do not and will
not require any registration with, consent, or approval of, or notice to, or
other action with or by, any Governmental Authority or other Person.
(d) This Agreement and the other Loan Documents to which Borrower is
a party, and all other documents contemplated hereby and thereby, when executed
and delivered by Borrower will be the legally valid and binding obligations of
Borrower, enforceable against Borrower in accordance with their respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, perfected, and first
priority Liens, subject only to Permitted Liens.
5.10 LITIGATION. Other than those matters disclosed on SCHEDULE 5.10, there
are no actions, suits, or proceedings pending or, to the best knowledge of
Borrower, threatened against Borrower, or any of its Subsidiaries, as
applicable, except for (a) matters that are fully covered by insurance (subject
to customary deductibles), and (b) matters arising after the Closing Date that,
if decided adversely to Borrower, or any of its Subsidiaries, as applicable,
reasonably could not be expected to result in a Material Adverse Change.
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5.11 NO MATERIAL ADVERSE CHANGE. All financial statements relating to
Borrower that have been delivered by Borrower to the Lender Group have been
prepared in accordance with GAAP (except, in the case of unaudited financial
statements, for the lack of footnotes and being subject to year-end audit
adjustments) and present fairly in all material respects, Borrower's financial
condition as of the date thereof and results of operations for the period then
ended. There has not been a Material Adverse Change with respect to Borrower
since the date of the latest financial statements submitted to the Lender Group
on or before the Closing Date.
5.12 FRAUDULENT TRANSFER.
(a) Borrower and its Subsidiaries are Solvent.
(b) No transfer of property is being made by Borrower and no
obligation is being incurred by Borrower in connection with the transactions
contemplated by this Agreement or the other Loan Documents with the intent to
hinder, delay, or defraud either present or future creditors of Borrower.
5.13 EMPLOYEE BENEFITS. None of Borrower, any of its Subsidiaries, or any of
their ERISA Affiliates maintains or contributes to any Benefit Plan.
5.14 ENVIRONMENTAL CONDITION. Except as set forth on SCHEDULE 5.14, (a) to
Borrower's knowledge, none of Borrower's or its Subsidiaries' assets has ever
been used by Borrower, its Subsidiaries or by previous owners or operators in
the disposal of, or to produce, store, handle, treat, release, or transport, any
Hazardous Materials, where such production, storage, handling, treatment,
release or transport was in violation, in any material respect, of applicable
Environmental Law, (b) to Borrower's knowledge, none of Borrower's or its
Subsidiaries' properties or assets has ever been designated or identified in any
manner pursuant to any environmental protection statute as a Hazardous Materials
disposal site, (c) neither Borrower nor its Subsidiaries have received notice
that a Lien arising under any Environmental Law has attached to any revenues or
to any Real Property owned or operated by Borrower or its Subsidiaries, and (d)
neither Borrower nor its Subsidiaries have received a summons, citation, notice,
or directive from the Environmental Protection Agency or any other federal or
state governmental agency concerning any action or omission by Borrower or its
Subsidiaries resulting in the releasing or disposing of Hazardous Materials into
the environment.
5.15 BROKERAGE FEES. Borrower has not utilized the services of any broker or
finder in connection with Borrower's obtaining financing from the Lender Group
under this Agreement and no brokerage commission or finders fee is payable by
Borrower in connection herewith.
5.16 INTELLECTUAL PROPERTY. Borrower and its Subsidiaries own, or hold
licenses in, all trademarks, trade names, copyrights, patents, patent rights,
and licenses that are necessary
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to the conduct of its business as currently conducted. Attached hereto as
SCHEDULE 5.16 is a true, correct, and complete listing of all material patents,
patent applications, trademarks, trademark applications, copyrights, and
copyright registrations as to which Borrower or its Subsidiaries are the owner
or is an exclusive licensee.
5.17 LEASES. Borrower and its Subsidiaries enjoy peaceful and undisturbed
possession under all leases material to the business of Borrower and its
Subsidiaries and to which any such Person is a party or under which such Person
is operating. All of such leases are valid and subsisting and no material
default by Borrower or any of its Subsidiaries exists under any of them.
5.18 DDAS. Set forth on SCHEDULE 5.18 are all of Borrower's or its
Subsidiaries' DDAs, including, with respect to each depository (i) the name and
address of such depository, and (ii) the account numbers of the accounts
maintained with such depository.
5.19 COMPLETE DISCLOSURE. All factual information (taken as a whole)
furnished by or on behalf of Borrower or its Subsidiaries in writing to Agent or
any Lender (including all information contained in the Schedules hereto or in
the other Loan Documents) for purposes of or in connection with this Agreement,
the other Loan Documents, or any transaction contemplated herein or therein is,
and all other such factual information (taken as a whole) hereafter furnished by
or on behalf of Borrower or its Subsidiaries in writing to Agent or any Lender
will be, true and accurate, in all material respects, on the date as of which
such information is dated or certified and not incomplete by omitting to state
any fact necessary to make such information (taken as a whole) not misleading in
any material respect at such time in light of the circumstances under which such
information was provided. On the Closing Date, the Closing Date Projections
represent, and as of the date on which any other Projections are delivered to
Agent, such additional Projections represent Borrower's good faith best estimate
of its future performance for the periods covered thereby.
5.20 INDEBTEDNESS. Set forth on SCHEDULE 5.20 is a true and complete list of
all Indebtedness of Borrower outstanding immediately prior to the Closing Date
that is to remain outstanding after the Closing Date and such Schedule
accurately reflects the aggregate principal amount of such Indebtedness and the
principal terms thereof.
6. AFFIRMATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, Borrower
shall and shall cause each of its Subsidiaries to do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that enables Borrower
to produce financial statements in accordance with GAAP and maintain records
pertaining to the Collateral that contain information as from time to time
reasonably may be requested by Agent.
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6.2 COLLATERAL REPORTING. Provide Agent (and if so requested by Agent, with
copies for each Lender) with the following documents at the following times in
form satisfactory to Agent:
================================================================================
Monthly (not (a) a Borrowing Base Certificate which includes (i) a
later than the detailed calculation of the Borrowing Base, and
10th Business (ii) detail regarding Receivables that are not
Day of each Eligible Receivables,
month)
(b) a detailed aging, by total, of the Receivables,
together with (i) detail regarding the balance
thereof, commitments, status, and the collateral
securing such Receivables, and (ii) a reconciliation
to the detailed calculation of the Borrowing Base
previously provided to Agent,
(c) a report which projects the amount of losses to be
incurred in connection with each Receivable,
(d) a report which identifies each Receivable that is
delinquent, or that has been identified by Borrower as a
problem loan, and
(e) a detailed calculation of Borrower's and its
Subsidiaries' obligations with respect to Bank Product
Agreements.
--------------------------------------------------------------------------------
Upon request by Agent (f) such other reports as to the Collateral or the
financial condition of Borrower and its Subsidiaries,
as Agent may request.
================================================================================
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent, either
directly or through HPSC, with copies to each Lender:
(a) as soon as available, but in any event within 30 days (45 days
in the case of a month that is the end of one of the first 3 fiscal quarters in
a fiscal year) after the end of each month during each of Borrower's fiscal
years,
(i) a company prepared consolidating income statement (and in
the case of a month that is the end of a fiscal quarter, a
consolidating balance sheet and statement of cash flows) covering
Borrower's and its Affiliates operations during such period,
(ii) a certificate signed by the president of Borrower in the
form of EXHIBIT F-1 hereto,
(iii) for each month that is the date on which a financial
covenant in SECTION 7.20 is to be tested, a Compliance Certificate
demonstrating, in
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reasonable detail (A) compliance at the end of such period with the
applicable financial covenants contained in SECTION 7.20, and (B)
setting forth Borrower's most recent Debt to Worth Ratio (calculated
based upon the fiscal quarter then ended), and
(b) as soon as available, but in any event within 90 days after the
end of each of Borrower's fiscal years,
(i) financial statements of HPSC and its Subsidiaries for each
such fiscal year, audited by independent certified public
accountants reasonably acceptable to Agent and certified, without
any qualifications, by such accountants to have been prepared in
accordance with GAAP (such audited financial statements to include a
balance sheet, income statement, and statement of cash flow and, if
prepared, such accountants' letter to management, as well as such
financial statements for Borrower),
(ii) a certificate of such accountants addressed to Agent and
the Lenders stating that such accountants do not have knowledge of
the existence of any Default or Event of Default under SECTION 7.20
as of the last day of Borrower's fiscal year,
(c) as soon as available, but in any event within 30 days prior
to the start of each of Borrower's fiscal years,
(i) copies of Borrower's Projections, in form and substance
(including as to scope and underlying assumptions) satisfactory to
Agent, in its sole discretion, for the forthcoming year, and for the
forthcoming fiscal year, month by month, certified by the chief
financial officer of Borrower as being such officer's good faith
best estimate of the financial performance of Borrower during the
period covered thereby,
(d) if and when filed by Borrower,
(i) Form 10-Q quarterly reports, Form 10-K annual reports, and
Form 8-K current reports,
(ii) any other filings made by Borrower with the SEC,
(iii) copies of Borrower's federal income tax returns, and any
amendments thereto, filed with the Internal Revenue Service, and
(iv) any other information that is provided by Borrower to its
shareholders generally,
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(e) if and when filed by Borrower or its Subsidiaries and as
requested by Agent, satisfactory evidence of payment of applicable excise taxes
in each jurisdictions in which (i) Borrower or its Subsidiaries conducts
business or is required to pay any such excise tax, (ii) where Borrower's or its
Subsidiaries' failure to pay any such applicable excise tax would result in a
Lien on the properties or assets of Borrower or its Subsidiaries, or (iii) where
Borrower's or its Subsidiaries' failure to pay any such applicable excise tax
reasonably could be expected to result in a Material Adverse Change,
(f) as soon as Borrower has knowledge of any event or
condition that constitutes a Default or an Event of Default, notice thereof and
a statement of the curative action that Borrower proposes to take with respect
thereto, and
(g) upon the request of Agent, any other report reasonably
requested relating to the financial condition of Borrower.
In addition to the financial statements referred to above, Borrower
agrees to deliver financial statements prepared on both a consolidated and
consolidating basis and agrees that no Subsidiary of Borrower will have a fiscal
year different from that of Borrower. Borrower agrees that its independent
certified public accountants are authorized to communicate with Agent and to
release to Agent whatever financial information concerning Borrower Agent
reasonably may request. Borrower waives the right to assert a confidential
relationship, if any, it may have with any accounting firm or service bureau in
connection with any information requested by Agent pursuant to or in accordance
with this Agreement, and agrees that Agent may contact directly any such
accounting firm or service bureau in order to obtain such information.
6.4 QUARTERLY PORTFOLIO REVIEW. Borrower shall meet with Agent no less than
once per fiscal quarter to review its financial performance, the status of the
Receivables, and such other matters as Agent shall require in its discretion, at
a date, time and place reasonably determined by Agent.
6.5 RECORDS. Borrower and its Subsidiaries shall maintain accurate and
complete records regarding all Receivables, including without limitation all
Receivables which have been guaranteed by the principals of the respective
Account Debtors or Makers.
6.6 MAINTENANCE OF PROPERTIES. Maintain and preserve all of its properties
which are necessary or useful in the proper conduct to its business in good
working order and condition, ordinary wear and tear excepted, and comply at all
times with the provisions of all leases to which it is a party as lessee so as
to prevent any loss or forfeiture thereof or thereunder.
6.7 TAXES. Cause all assessments and taxes, whether real, personal, or
otherwise, due or payable by, or imposed, levied, or assessed against Borrower,
its Subsidiaries or any of their respective assets to be paid in full, before
delinquency or before the expiration of any
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extension period, except to the extent that the validity of such assessment or
tax shall be the subject of a Permitted Protest. Borrower will make timely
payment or deposit of all tax payments and withholding taxes required of it by
applicable laws, including those laws concerning F.I.C.A., F.U.T.A., state
disability, and local, state, and federal income taxes, and will, upon request,
furnish Agent with proof satisfactory to Agent indicating that Borrower has made
such payments or deposits. Borrower shall deliver satisfactory evidence of
payment of applicable excise taxes in each jurisdictions in which Borrower or
its Subsidiaries are required to pay any such excise tax.
6.8 INSURANCE.
(a) At Borrower's expense, maintain insurance respecting its
assets wherever located (other than Inventory of Borrower that is owned by
Account Debtors which have secured insurance with respect thereto), covering
loss or damage by fire, theft, explosion, and all other hazards and risks as
ordinarily are insured against by other Persons engaged in the same or similar
businesses. Borrower also shall maintain business interruption, public
liability, and product liability insurance, as well as insurance against
larceny, embezzlement, and criminal misappropriation. All such policies of
insurance shall be in such amounts and with such insurance companies as are
reasonably satisfactory to Agent. Borrower shall deliver copies of all such
policies to Agent with a satisfactory lender's loss payable endorsement naming
Agent as sole loss payee or additional insured, as appropriate. Each policy of
insurance or endorsement shall contain a clause requiring the insurer to give
not less than 30 days prior written notice to Agent in the event of cancellation
of the policy for any reason whatsoever.
(b) Borrower shall give Agent prompt notice of any loss
covered by such insurance. Agent shall have the exclusive right to adjust any
losses payable under any such insurance policies in excess of $50,000, without
any liability to Borrower whatsoever in respect of such adjustments. Any monies
received as payment for any loss under any insurance policy mentioned above
(other than liability insurance policies) or as payment of any award or
compensation for condemnation or taking by eminent domain, shall be paid over to
Agent to be applied at the option of the Required Lenders either to the
prepayment of the Obligations or shall be disbursed to Borrower under staged
payment terms reasonably satisfactory to the Required Lenders for application to
the cost of repairs, replacements, or restorations. Any such repairs,
replacements, or restorations shall be effected with reasonable promptness and
shall be of a value at least equal to the value of the items of property
destroyed prior to such damage or destruction.
(c) Borrower will not take out separate insurance concurrent
in form or contributing in the event of loss with that required to be maintained
under this SECTION 6.8, unless Agent is included thereon as named insured with
the loss payable to Agent under a lender's loss payable endorsement or its
equivalent. Borrower immediately shall notify Agent whenever such separate
insurance is taken out, specifying the insurer thereunder and
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full particulars as to the policies evidencing the same, and copies of such
policies promptly shall be provided to Agent.
(d) Borrower shall cause each Account Debtor or Maker to
maintain insurance in accordance with Borrower's standard underwriting practices
and policies with respect to each tangible asset financed by Borrower.
6.9 LOCATION OF EQUIPMENT. Keep the Equipment only at the locations
identified on SCHEDULE 5.5; PROVIDED, HOWEVER, that Borrower may amend SCHEDULE
5.5 so long as such amendment occurs by written notice to Agent not less than 30
days prior to the date on which Inventory or Equipment is moved to such new
location, so long as such new location is within the continental United States,
and so long as, at the time of such written notification, Borrower provides any
financing statements or fixture filings necessary to perfect and continue
perfected the Agent's Liens on such assets and also provides to Agent a
Collateral Access Agreement.
6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all applicable
laws, rules, regulations, and orders of any Governmental Authority, including
the Fair Labor Standards Act and the Americans With Disabilities Act, other than
laws, rules, regulations, and orders the non-compliance with which, individually
or in the aggregate, would not result in and reasonably could not be expected to
result in a Material Adverse Change.
6.11 LEASES. Pay when due all rents and other amounts payable under any
leases to which Borrower or its Subsidiaries are a party or by which Borrower's
or its Subsidiaries' properties and assets are bound, unless such payments are
the subject of a Permitted Protest.
6.12 BROKERAGE COMMISSIONS. Pay any and all brokerage commission or finders
fees incurred in connection with or as a result of Borrower's obtaining
financing from the Lender Group under this Agreement. Borrower agrees and
acknowledges that payment of all such brokerage commissions or finders fees
shall be the sole responsibility of Borrower, and Borrower agrees to indemnify,
defend, and hold Agent and the Lender Group harmless from and against any claim
of any broker or finder arising out of Borrower's obtaining financing from the
Lender Group under this Agreement.
6.13 EXISTENCE. At all times preserve and keep in full force and effect
Borrower's and its Subsidiaries' valid existence and good standing and any
rights and franchises material to Borrower's or its Subsidiaries' businesses.
6.14 ENVIRONMENTAL. (a) Keep any property either owned or operated by
Borrower or its Subsidiaries free of any Environmental Liens or post bonds or
other financial assurances sufficient to satisfy the obligations or liability
evidenced by such Environmental Liens, (b) comply, in all material respects,
with Environmental Laws and provide to Agent documentation of such compliance
which Agent reasonably requests, (c) promptly notify Agent of any release of a
Hazardous Material in any reportable quantity from or onto
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property owned or operated by Borrower or its Subsidiaries and take any Remedial
Actions required to xxxxx said release or otherwise to come into compliance with
applicable Environmental Law, and (d) promptly provide Agent with written notice
within 10 days of the receipt of any of the following: (i) notice that an
Environmental Lien has been filed against any of the real or personal property
of Borrower or its Subsidiaries, (ii) commencement of any Environmental Action
or notice that an Environmental Action will be filed against Borrower or its
Subsidiaries, and (iii) notice of a violation, citation, or other administrative
order which reasonably could be expected to result in a Material Adverse Change.
6.15 DISCLOSURE UPDATES. Promptly and in no event later than 5 Business Days
after obtaining knowledge thereof, (a) notify Agent if any written information,
exhibit, or report furnished to the Lender Group contained any untrue statement
of a material fact or omitted to state any material fact necessary to make the
statements contained therein not misleading in light of the circumstances in
which made, and (b) correct any defect or error that may be discovered therein
or in any Loan Document or in the execution, acknowledgement, filing, or
recordation thereof.
6.16 PROMISSORY NOTES.
(a) Concurrent with the execution thereof, print a legend,
which describes the security interests which have been granted by Borrower to
Agent pursuant to the Loan Documents, on the file that contains each promissory
note which has been issued by a Maker in favor of Borrower which forms the basis
of a Receivable, in form and substance satisfactory to Agent in its sole and
absolute discretion; PROVIDED, HOWEVER, that if any such promissory note has
been in existence for more than 90 days, Borrower shall print the legend on the
original document, and
(b) Store in a fireproof vault all promissory notes.
6.17 AFTER ACQUIRED REAL PROPERTY. Upon the acquisition by it or any of its
Subsidiaries after the date hereof of any fee interest in any real property
(wherever located, (each such interest being an "AFTER ACQUIRED PROPERTY"), with
a Current Value (as defined below) in excess of $100,000, immediately so notify
Agent, setting forth with specificity a description of the interest acquired,
the location of the real property, any structures or improvements thereon and
either an appraisal of Borrower's good-faith estimate of the current value of
such real property (for purposes of this Section, the "CURRENT VALUE"). The
Agent shall notify Borrower whether it intends to require a Mortgage and the
other documents referred to below. Upon receipt of such notice requesting a
Mortgage, the Person which has acquired such After Acquired Property shall
immediately furnish to Agent the following, each in form and substance
satisfactory to Agent: (i) a Mortgage with respect to such real property and
related assets located at the After Acquired Property, each duly executed by
such Person and in recordable form; (ii) evidence of the recording of the
mortgage referred to in clause (i) above in such office or offices as may be
necessary or, in
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the opinion of Agent, desirable to create and perfect a valid and enforceable
lien on the property purported to be covered thereby or to otherwise protect the
rights of Agent and the Lenders thereunder, and (iii) such other documents or
instruments (including opinions of counsel) as Agent may reasonably require.
Borrower shall pay all fees and expenses, including reasonable attorneys fees
and expenses in connection with the performance of the obligations under this
Section.
7. NEGATIVE COVENANTS.
Borrower covenants and agrees that, so long as any credit hereunder
shall be available and until full and final payment of the Obligations, Borrower
will not and will not permit any of its Subsidiaries to do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or otherwise
become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the other
Loan Documents,
(b) Indebtedness set forth on SCHEDULE 5.20,
(c) any Subordinated Debt issued after the Closing Date,
(d) Permitted Purchase Money Indebtedness, and
(e) refinancings, renewals, or extensions of Indebtedness
permitted under clauses (b), (c), and (d) of this SECTION 7.1 (and continuance
or renewal of any Permitted Liens associated therewith) so long as: (i) the
terms and conditions of such refinancings, renewals, or extensions do not, in
Agent's judgment, materially impair the prospects of repayment of the
Obligations by Borrower or materially impair Borrower's creditworthiness, (ii)
such refinancings, renewals, or extensions do not result in an increase in the
principal amount of, or interest rate with respect to, the Indebtedness so
refinanced, renewed, or extended, (iii) such refinancings, renewals, or
extensions do not result in a shortening of the average weighted maturity of the
Indebtedness so refinanced, renewed, or extended, nor are they on terms or
conditions that, taken as a whole, are materially more burdensome or restrictive
to Borrower, and (iv) if the Indebtedness that is refinanced, renewed, or
extended was subordinated in right of payment to the Obligations, then the terms
and conditions of the refinancing, renewal, or extension Indebtedness must
include subordination terms and conditions that are at least as favorable to the
Lender Group as those that were applicable to the refinanced, renewed, or
extended Indebtedness; and
(f) Indebtedness composing Permitted Investments.
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7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to any of its assets, of any kind,
whether now owned or hereafter acquired, or any income or profits therefrom,
except for Permitted Liens (including Liens that are replacements of Permitted
Liens to the extent that the original Indebtedness is refinanced, renewed, or
extended under SECTION 7.1(d) and so long as the replacement Liens only encumber
those assets that secured the refinanced, renewed, or extended Indebtedness).
7.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) Enter into any merger, consolidation, reorganization, or
recapitalization, or reclassify its Stock.
(b) Liquidate, wind up, or dissolve itself (or suffer any
liquidation or dissolution).
(c) Except for the consummation of the Borrower Spin-Off,
convey, sell, lease, license, assign, transfer, or otherwise dispose of, in one
transaction or a series of transactions, all or any substantial part of its
assets.
7.4 DISPOSAL OF ASSETS. Other than Permitted Dispositions, convey, sell,
lease, license, assign, transfer, or otherwise dispose of any of Borrower's
assets.
7.5 CHANGE NAME. Change Borrower's or any Subsidiairies' name, FEIN,
corporate structure, or identity, or add any new fictitious name; PROVIDED,
HOWEVER, that Borrower or any of its Subsidiaries may change its name upon at
least 30 days prior written notice to Agent of such change and so long as, at
the time of such written notification, Borrower provides any financing
statements or fixture filings necessary to perfect and continue perfected the
Agent's Liens in and to the Collateral.
7.6 GUARANTEE. Guarantee or otherwise become in any way liable with respect
to the obligations of any third Person except by endorsement of instruments or
items of payment for deposit to the account of Borrower or which are transmitted
or turned over to Agent.
7.7 NATURE OF BUSINESS. Make any change in the principal nature of its
business.
7.8 PREPAYMENTS AND AMENDMENTS.
(a) Except in connection with a refinancing permitted by
SECTION 7.1(e), prepay, redeem, defease, purchase, or otherwise acquire any
Indebtedness of Borrower or its Subsidiaries, other than the Obligations in
accordance with this Agreement, and
(b) Except in connection with a refinancing permitted by
SECTION 7.1(e), directly or indirectly, amend, modify, alter, increase, or
change any of the terms or
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conditions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning Indebtedness permitted under SECTIONS 7.1(b), (c), or
(d).
7.9 CHANGE OF CONTROL. Cause, permit, or suffer, directly or indirectly, any
Change of Control.
7.10 UNDERWRITING GUIDELINES. Modify or change Borrower's or its
Subsidiaries' documented underwriting standards or modification policies without
Agent's prior written consent.
7.11 DISTRIBUTIONS. Make any distribution or declare or pay any dividends
(in cash or other property, other than common Stock) on, or purchase, acquire,
redeem, or retire any of Borrower's Stock, of any class, whether now or
hereafter outstanding.
7.12 ACCOUNTING METHODS. Modify or change its method of accounting (other
than as may be required to conform to GAAP) or enter into, modify, or terminate
any agreement currently existing, or at any time hereafter entered into with any
third party accounting firm or service bureau for the preparation or storage of
Borrower's or its Subsidiaries' accounting records without said accounting firm
or service bureau agreeing to provide Agent information regarding the Collateral
or Borrower's financial condition.
7.13 INVESTMENTS. Except for Permitted Investments, directly or indirectly,
make or acquire any Investment or incur any liabilities (including contingent
obligations) for or in connection with any Investment; PROVIDED, HOWEVER, that
Borrower and its Subsidiaries shall not have Permitted Investments (other than
in the Cash Management Accounts) in deposit accounts or Securities Accounts in
excess of $250,000 in the aggregate outstanding at any one time for more than 3
consecutive Business Days unless Borrower or its Subsidiary, as applicable, and
the applicable securities intermediary or bank have entered into Control
Agreements governing such Permitted Investments, as Agent shall determine in its
Permitted Discretion, to perfect (and further establish) the Agent's Liens in
such Permitted Investments.
7.14 TRANSACTIONS WITH AFFILIATES. Directly or indirectly enter into or
permit to exist any transaction with any Affiliate of Borrower except for
transactions that are in the ordinary course of Borrower's business, upon fair
and reasonable terms, that are fully disclosed to Agent, and that are no less
favorable to Borrower than would be obtained in an arm's length transaction with
a non-Affiliate.
7.15 SUSPENSION. Except for the Borrower Spin-Off, suspend or go out of a
substantial portion of its business.
7.16 [INTENTIONALLY OMITTED].
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7.17 USE OF PROCEEDS. Use the proceeds of the Advances for any purpose other
than (a) on the Closing Date, (i) to repay, in full, the outstanding principal,
accrued interest, and accrued fees and expenses owing to the Existing Lenders,
and (ii) to pay transactional fees, costs, and expenses incurred in connection
with this Agreement, the other Loan Documents, and the transactions contemplated
hereby and thereby, and (b) thereafter, consistent with the terms and conditions
hereof, for its lawful and permitted purposes.
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE; INVENTORY AND EQUIPMENT
WITH BAILEES. Relocate its chief executive office to a new location without
providing 30 days prior written notification thereof to Agent and so long as, at
the time of such written notification, Borrower provides any financing
statements or fixture filings necessary to perfect and continue perfected the
Agent's Liens and also provides to Agent a Collateral Access Agreement with
respect to such new location. The Equipment shall not at any time now or
hereafter be stored with a bailee, warehouseman, or similar party without
Agent's prior written consent.
7.19 SECURITIES ACCOUNTS. Establish or maintain any Securities Account
unless Agent shall have received a Control Agreement in respect of such
Securities Account. Borrower shall not transfer assets out of any Securities
Account; PROVIDED, HOWEVER, that, so long as no Event of Default has occurred
and is continuing or would result therefrom, Borrower may use such assets (and
the proceeds thereof) to the extent not prohibited by this Agreement.
7.20 FINANCIAL COVENANTS.
(a) Fail to maintain:
(i) MINIMUM AVAILABILITY. Availability (calculated without
regard to the Interest Reserve) plus Qualified Cash of at least
$1,750,000 at any time after the Closing Date.
(ii) MINIMUM INTEREST COVERAGE RATIO. An Interest Coverage
Ratio, measured on a fiscal quarter-end basis as of each date set
forth below, of at least the ratio set forth opposite such date:
----------------------------------------------------------------------------------------------------------
Applicable Ratio Applicable Date
----------------------------------------------------------------------------------------------------------
0.65 : 1.00 September 30, 2002
----------------------------------------------------------------------------------------------------------
0.85 : 1.00 December 31, 2002
----------------------------------------------------------------------------------------------------------
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(iii) DEBT TO WORTH RATIO. A Debt to Worth Ratio, measured on
a fiscal quarter-end basis as of each date set forth below, which is
less than or equal to the ratio set forth opposite such date:
----------------------------------------------------------------------------------------------------------
Applicable Ratio Applicable Period
----------------------------------------------------------------------------------------------------------
5.5:1.0 September 30, 2002
----------------------------------------------------------------------------------------------------------
5.5:1.0 December 31, 2002
----------------------------------------------------------------------------------------------------------
(iv) TANGIBLE NET WORTH. Tangible Net Worth, measured on a
fiscal quarter-end basis as of each date set forth below, of at
least the amount set forth opposite such date:
----------------------------------------------------------------------------------------------------------
Applicable Amount Applicable Period
----------------------------------------------------------------------------------------------------------
$6,750,000 September 30, 2002
----------------------------------------------------------------------------------------------------------
$6,750,000 December 31, 2002
----------------------------------------------------------------------------------------------------------
(b) Make:
(i) CAPITAL EXPENDITURES. Capital expenditures in any fiscal
year in excess of the amount set forth in the following table for
the applicable period:
-----------------------------------------------------------
Fiscal Year 2002 Fiscal Year 2003
-----------------------------------------------------------
$50,000 $50,000
-----------------------------------------------------------
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an event of
default (each, an "EVENT OF DEFAULT") under this Agreement:
8.1 If Borrower fails to pay when due and payable, or when declared due and
payable, all or any portion of the Obligations (whether of principal, interest
(including any interest which, but for the provisions of the Bankruptcy Code,
would have accrued on such amounts), fees and charges due the Lender Group,
reimbursement of Lender Group Expenses, or other amounts constituting
Obligations); PROVIDED, HOWEVER, that in the case of Overadvances that are
caused by the charging of interest, fees, or Lender Expenses to the Loan
Account, such event shall not constitute an Event of Default if, within 3
Business Days
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of Borrower's receipt of telephonic or other notice of such Overadvance,
Borrower eliminates such Overadvance;
8.2 If Borrower or any of its Subsidiaries fails or neglects to (a) perform,
keep, or observe any covenant or other provision contained in SECTIONS 6.2, 6.3,
6.7, 6.9, 6.10, OR 6.11 hereof and such failure or neglect continues for a
period of 5 days after the date on which such failure or neglect first occurs,
or (b) perform, keep, or observe any covenant or other provision contained in
any Section of this Agreement (other than a Section that is expressly dealt with
elsewhere in this SECTION 8), including failure to satisfy a condition
subsequent set forth in SECTION 3.2 within the time period stated, or the other
Loan Documents (other than a Section of such other Loan Documents dealt with
elsewhere in this SECTION 8) and such failure or neglect is not cured within 15
days after the date on which such failure or neglect first occurs, or (c)
perform, keep, or observe any covenant or other provision contained in SECTION 6
(other than a subsection of SECTION 6 that is dealt with elsewhere in this
SECTION 8), or SECTION 7 of this Agreement or any comparable provision contained
in any of the other Loan Documents;
8.3 If any portion of Borrower's or any of its Subsidiaries' property or
assets with a value greater than $50,000 individually or in the aggregate, is
attached, seized, subjected to a writ or distress warrant, or is levied upon, or
comes into the possession of any third Person and the same is not discharged
before the earlier of 30 days after the date it first arises or 5 days prior to
the date on which such property or asset is subject to forfeiture by Borrower or
the applicable Subsidiary;
8.4 If an Insolvency Proceeding is commenced by Borrower or any of its
Subsidiaries;
8.5 If an Insolvency Proceeding is commenced against Borrower, or any of its
Subsidiaries, and any of the following events occur: (a) Borrower or the
Subsidiary consents to the institution of such Insolvency Proceeding against it,
(b) the petition commencing the Insolvency Proceeding is not timely
controverted, (c) the petition commencing the Insolvency Proceeding is not
dismissed within 45 calendar days of the date of the filing thereof; PROVIDED,
HOWEVER, that, during the pendency of such period, Agent (including any
successor agent) and each other member of the Lender Group shall be relieved of
their obligations to extend credit hereunder, (d) an interim trustee is
appointed to take possession of all or any substantial portion of the properties
or assets of, or to operate all or any substantial portion of the business of,
Borrower or any of its Subsidiaries, or (e) an order for relief shall have been
entered therein;
8.6 If Borrower or any of its Subsidiaries is enjoined, restrained, or in
any way prevented by court order from continuing to conduct all or any material
part of its business affairs;
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8.7 If (a) a notice of Lien, levy, or assessment is filed of record with
respect to the properties or assets or Borrower or any of its Subsidiaries by
the United States Government, or any department, agency, or instrumentality
thereof, or if any taxes or debts owing at any time hereafter to any one or more
of such entities becomes a Lien, whether xxxxxx or otherwise, upon any
properties or assets of Borrower or any of its Subsidiaries and the same is not
paid on the payment date thereof, or (b) notices of Lien, levy, or assessment in
an aggregate amount in excess of $50,000 are filed of record with respect to the
properties or assets of Borrower or any of its Subsidiaries by any state,
county, municipal, or governmental agency, or if any taxes or debts owing at any
time hereafter to any one or more of such entities becomes a Lien exceeding the
foregoing aggregate limitation, whether xxxxxx or otherwise, upon the properties
or assets of Borrower or any of its Subsidiaries and the same is not paid on the
payment date thereof;
8.8 If one or more judgments or other claims involving an aggregate amount
of $50,000, or more, in excess of the amount covered by insurance, becomes a
Lien or encumbrance upon any material portion of the properties or assets of
Borrower or any of its Subsidiaries and the same is not released, discharged,
bonded against, or stayed pending appeal before the earlier of 30 days after the
date it first arises or 5 days prior to the date on which such asset is subject
to being forfeited by Borrower or the applicable Subsidiary;
8.9 If there is a default in respect of the Subordinated Debt or under the
Indenture or any other material agreement to which Borrower or any of its
Subsidiaries is a party and such default (a) occurs at the final maturity of the
obligations thereunder, or (b) results in a right by the other party thereto,
irrespective of whether exercised, to accelerate the maturity of Borrower's or
its Subsidiaries' obligations thereunder, to terminate such agreement, or to
refuse to renew such agreement pursuant to an automatic renewal right therein;
8.10 If Borrower or any of its Subsidiaries makes any payment on account of
Indebtedness that has been contractually subordinated in right of payment to the
payment of the Obligations, except to the extent such payment is permitted by
the terms of the subordination provisions applicable to such Indebtedness;
8.11 If any material misstatement or misrepresentation exists now or
hereafter in any warranty, representation, statement, or Record made to the
Lender Group by Borrower, its Subsidiaries, or any officer, employee, agent, or
director of Borrower or any of its Subsidiaries;
8.12 If the obligation of HPSC under the Guaranty is limited or terminated
by operation of law or by HPSC thereunder;
8.13 If the obligation of any Validity Guarantor under the Validity
Agreement is limited or terminated by operation of law or by the Validity
Guarantor thereunder;
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8.14 If this Agreement or any other Loan Document that purports to create a
Lien, shall, for any reason, fail or cease to create a valid and perfected and,
except to the extent permitted by the terms hereof or thereof, first priority
Lien on or security interest in the Collateral covered hereby or thereby;
8.15 Any provision of any Loan Document shall at any time for any reason be
declared to be null and void, or the validity or enforceability thereof shall be
contested by Borrower or its Subsidiaries, or a proceeding shall be commenced by
Borrower or its Subsidiaries, or by any Governmental Authority having
jurisdiction over Borrower or its Subsidiaries, seeking to establish the
invalidity or unenforceability thereof, or Borrower or its Subsidiaries shall
deny that Borrower or its Subsidiaries has any liability or obligation purported
to be created under any Loan Document;
8.16 If an HPSC Event of Default occurs and is continuing; or
8.17 If a Bravo Event of Termination or a Bravo Wind-Down Event occurs and
is continuing and any applicable cure period applicable thereto expires.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the continuation,
of an Event of Default, the Required Lenders (at their election but without
notice of their election and without demand) may authorize and instruct Agent to
do any one or more of the following on behalf of the Lender Group (and Agent,
acting upon the instructions of the Required Lenders, shall do the same on
behalf of the Lender Group), all of which are authorized by Borrower:
(a) Declare all Obligations, whether evidenced by this
Agreement, by any of the other Loan Documents, or otherwise, immediately due and
payable;
(b) Cease advancing money or extending credit to or for the
benefit of Borrower under this Agreement, under any of the Loan Documents, or
under any other agreement between Borrower and the Lender Group;
(c) Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent's Liens in the Collateral and without
affecting the Obligations;
(d) Settle or adjust disputes and claims directly with Account
Debtors or Makers for amounts and upon terms which Agent considers advisable,
and in such cases, Agent will credit Borrower's Loan Account with only the net
amounts received by Agent in payment of such disputed Accounts after deducting
all Lender Group Expenses incurred or expended in connection therewith;
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(e) Without notice to or demand upon Borrower or HPSC, make
such payments and do such acts as Agent considers necessary or reasonable to
protect its security interests in the Collateral. Borrower agrees to assemble
the Collateral if Agent so requires, and to make the Collateral available to
Agent at a place that Agent may designate which is reasonably convenient to both
parties. Borrower authorizes Agent to enter the premises where the Collateral is
located, to take and maintain possession of the Collateral, or any part of it,
and to pay, purchase, contest, or compromise any Lien that in Agent's
determination appears to conflict with the Agent's Liens and to pay all expenses
incurred in connection therewith and to charge Borrower's Loan Account therefor.
With respect to any of Borrower's owned or leased premises, Borrower hereby
grants Agent a license to enter into possession of such premises and to occupy
the same, without charge, in order to exercise any of the Lender Group's rights
or remedies provided herein, at law, in equity, or otherwise;
(f) Without notice to Borrower or HPSC (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of Borrower held
by the Lender Group (including any amounts received in the Cash Management
Accounts), or (ii) Indebtedness at any time owing to or for the credit or the
account of Borrower held by the Lender Group;
(g) Hold, as cash collateral, any and all balances and
deposits of Borrower held by the Lender Group, and any amounts received in the
Cash Management Accounts, to secure the full and final repayment of all of the
Obligations;
(h) Ship, reclaim, recover, store, finish, maintain, repair,
prepare for sale, advertise for sale, and sell (in the manner provided for
herein) the Collateral. Borrower hereby grants to Agent a license or other right
to use, without charge, Borrower's labels, patents, copyrights, trade secrets,
trade names, trademarks, service marks, and advertising matter, or any property
of a similar nature, as it pertains to the Collateral, in completing production
of, advertising for sale, and selling any Collateral and Borrower's rights under
all licenses and all franchise agreements shall inure to the Lender Group's
benefit;
(i) Sell the Collateral at either a public or private sale, or
both, by way of one or more contracts or transactions, for cash or on terms, in
such manner and at such places (including Borrower's premises) as Agent
determines is commercially reasonable. It is not necessary that the Collateral
be present at any such sale;
(j) Agent shall give notice of the disposition of the
Collateral as follows:
(i) Agent shall give Borrower a notice in writing of the time
and place of public sale, or, if the sale is a private sale or some
other disposition other than a public sale is to be made of the
Collateral, the time on or after which the private sale or other
disposition is to be made; and
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(ii) The notice shall be personally delivered or mailed,
postage prepaid, to Borrower as provided in SECTION 12, at least 10
days before the earliest time of disposition set forth in the
notice; no notice needs to be given prior to the disposition of any
portion of the Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily sold on a
recognized market;
(k) Agent, on behalf of the Lender Group, may credit bid and
purchase at any public sale; and
(l) Agent may seek the appointment of a receiver or keeper to
take possession of all or any portion of the Collateral or to operate same and,
to the maximum extent permitted by law, may seek the appointment of such a
receiver without the requirement of prior notice or a hearing;
(m) Exercise or assign any and all rights to collect, manage,
and service the Receivables, including, (i) the receipt, processing and
accounting for all payments on account of the Receivables, (ii) periodically
sending demand notices and statements to the Account Debtors or Makers, (iii)
enforcing legal rights with respect to the Receivables, including hiring
attorneys to do so to the extent Agent or such assignee deems such engagement
necessary, and (iv) taking all lawful actions and procedures which Agent or such
assignee deems necessary to collect the Receivables, and all such amounts shall
be Lender Group Expenses;
(n) The Lender Group shall have all other rights and remedies
available at law or in equity or pursuant to any other Loan Document; and
(o) Any deficiency that exists after disposition of the
Collateral as provided above will be paid immediately by Borrower. Any excess
will be returned, without interest and subject to the rights of third Persons,
by Agent to Borrower.
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender Group under
this Agreement, the other Loan Documents, and all other agreements shall be
cumulative. The Lender Group shall have all other rights and remedies not
inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
10. TAXES AND EXPENSES.
If Borrower fails to pay any monies (whether taxes, assessments,
insurance premiums, or, in the case of leased properties or assets, rents or
other amounts payable under such leases), other than DE MINIMIS sums of money,
due to third Persons, or fails to make any
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deposits or furnish any required proof of payment or deposit, all as required
under the terms of this Agreement, then, Agent, in its sole discretion and
without prior notice to Borrower, may do any or all of the following: (a) make
payment of the same or any part thereof, (b) set up such reserves in Borrower's
Loan Account as Agent deems necessary to protect the Lender Group from the
exposure created by such failure, or (c) in the case of the failure to comply
with SECTION 6.8 hereof, obtain and maintain insurance policies of the type
described in SECTION 6.8 and take any action with respect to such policies as
Agent deems prudent. Any such amounts paid by Agent shall constitute Lender
Group Expenses and any such payments shall not constitute an agreement by the
Lender Group to make similar payments in the future or a waiver by the Lender
Group of any Event of Default under this Agreement. Agent need not inquire as
to, or contest the validity of, any such expense, tax, or Lien and the receipt
of the usual official notice for the payment thereof shall be conclusive
evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Borrower waives demand, protest, notice of
protest, notice of default or dishonor, notice of payment and nonpayment,
nonpayment at maturity, release, compromise, settlement, extension, or renewal
of documents, instruments, chattel paper, and guarantees at any time held by the
Lender Group on which Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Borrower hereby agrees
that: (a) so long as Agent complies with its obligations, if any, under the
Code, the Lender Group shall not in any way or manner be liable or responsible
for: (i) the safekeeping of the Collateral, (ii) any loss or damage thereto
occurring or arising in any manner or fashion from any cause, (iii) any
diminution in the value thereof, or (iv) any act or default of any carrier,
warehouseman, bailee, forwarding agency, or other Person, and (b) all risk of
loss, damage, or destruction of the Collateral shall be borne by Borrower.
11.3 INDEMNIFICATION. Borrower shall pay, indemnify, defend, and hold the
Agent-Related Persons, the Lender-Related Persons with respect to each Lender,
each Participant, and each of their respective officers, directors, employees,
agents, and attorneys-in-fact (each, an "INDEMNIFIED PERSON") harmless (to the
fullest extent permitted by law) from and against any and all claims, demands,
suits, actions, investigations, proceedings, and damages, and all reasonable
attorneys fees and disbursements and other costs and expenses actually incurred
in connection therewith (as and when they are incurred and irrespective of
whether suit is brought), at any time asserted against, imposed upon, or
incurred by any of them (a) in connection with or as a result of or related to
the execution, delivery, enforcement, performance, or administration of this
Agreement, any of the other Loan Documents, or the transactions contemplated
hereby or thereby, and (b) with respect to any investigation, litigation, or
proceeding related to this Agreement, any other Loan Document, or the use of the
proceeds of the credit provided hereunder (irrespective of whether any
Indemnified
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Person is a party thereto), or any act, omission, event, or circumstance in any
manner related thereto (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"). The foregoing to the contrary notwithstanding, Borrower shall
have no obligation to any Indemnified Person under this SECTION 11.3 with
respect to any Indemnified Liability that a court of competent jurisdiction
finally determines to have resulted from the gross negligence or willful
misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrower was required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrower
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE
OR IN PART CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON (BUT NOT WITH RESPECT TO GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT AS PROVIDED ABOVE).
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or demands
by Borrower or Agent to the other relating to this Agreement or any other Loan
Document shall be in writing and (except for financial statements and other
informational documents which may be sent by first-class mail, postage prepaid)
shall be personally delivered or sent by registered or certified mail (postage
prepaid, return receipt requested), overnight courier, electronic mail (at such
email addresses as Borrower or Agent, as applicable, may designate to each other
in accordance herewith), or telefacsimile to Borrower or Agent, as the case may
be, at its address set forth below:
If to Borrower: AMERICAN COMMERCIAL FINANCE CORPORATION
000 Xxxxx Xxxx Xxxxxx
Xxxx Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Xxxxxxx Mount, President
Fax No. 000.000.0000
with copies to: HILL & XXXXXX
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Fax No. 000.000.0000
If to Agent: FOOTHILL CAPITAL CORPORATION
00000 Xxxx Xxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Loan Portfolio Manager
Fax No. 000.000.0000
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with copies to: XXXXXXX, PHLEGER & XXXXXXXX LLP
000 Xxxxx Xxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No. 000.000.0000
Agent and Borrower may change the address at which they are to
receive notices hereunder, by notice in writing in the foregoing manner given to
the other party. All notices or demands sent in accordance with this SECTION 12,
other than notices by Agent in connection with enforcement rights against the
Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Borrower acknowledges and agrees that notices sent by the
Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING
IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING
ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S
OPTION, IN THE COURTS OF ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH
ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.
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BORROWER AND THE LENDER GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE
LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR
TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH
THIS SECTION 13(b).
(c) BORROWER AND THE LENDER GROUP HEREBY WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS. BORROWER AND THE LENDER GROUP REPRESENT
THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent
(provided that no written consent of Agent shall be required in connection with
any assignment and delegation by a Lender to an Eligible Transferee), assign and
delegate to one or more assignees (each an "ASSIGNEE") all, or any ratable part
of all, of the Obligations, the Commitments and the other rights and obligations
of such Lender hereunder and under the other Loan Documents, in a minimum amount
of $5,000,000; PROVIDED, HOWEVER, that Borrower and Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses, and related information with respect to the
Assignee, have been given to Borrower and Agent by such Lender and the Assignee,
(ii) such Lender and its Assignee have delivered to Borrower and Agent an
Assignment and Acceptance in form and substance satisfactory to Agent, and (iii)
the assignor Lender or Assignee has paid to Agent for Agent's separate account a
processing fee in the amount of $5,000. Anything contained herein to the
contrary notwithstanding, the consent of Agent shall not be required (and
payment of any fees shall not be required) if such assignment is in connection
with any merger, consolidation, sale, transfer, or other disposition of all or
any substantial portion of the business or loan portfolio of such Lender.
(b) From and after the date that Agent notifies the assignor
Lender (with a copy to Borrower) that it has received an executed Assignment and
Acceptance and payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party
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hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, shall have the rights
and obligations of a Lender under the Loan Documents, and (ii) the assignor
Lender shall, to the extent that rights and obligations hereunder and under the
other Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights (except with respect to SECTION 11.3 hereof)
and be released from 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 and the other Loan
Documents, such Lender shall cease to be a party hereto and thereto), and such
assignment shall affect a novation between Borrower and the Assignee.
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the Assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (1) other than as
provided in such Assignment and Acceptance, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrower or the performance or observance by Borrower of any of its obligations
under this Agreement or any other Loan Document furnished pursuant hereto, (3)
such Assignee confirms that it has received a copy of this Agreement, together
with such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance, (4) such Assignee will, independently and without reliance upon
Agent, such assigning Lender or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement, (5)
such Assignee appoints and authorizes Agent to take such actions and to exercise
such powers under this Agreement as are delegated to Agent, by the terms hereof,
together with such powers as are reasonably incidental thereto, and (6) such
Assignee agrees that it will perform all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(d) Immediately upon each Assignee's making its processing fee
payment under the Assignment and Acceptance and receipt and acknowledgment by
Agent of such fully executed Assignment and Acceptance, this Agreement shall be
deemed to be amended to the extent, but only to the extent, necessary to reflect
the addition of the Assignee and the resulting adjustment of the Commitments
arising therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Lender PRO TANTO.
(e) Any Lender may at any time, with the written consent of
Agent, sell to one or more commercial banks, financial institutions, or other
Persons not Affiliates of
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such Lender (a "PARTICIPANT") participating interests in its Obligations, the
Commitment, and the other rights and interests of that Lender (the "ORIGINATING
LENDER") hereunder and under the other Loan Documents (provided that no written
consent of Agent shall be required in connection with any sale of any such
participating interests by a Lender to an Eligible Transferee); PROVIDED,
HOWEVER, that (i) the Originating Lender shall remain a "Lender" for all
purposes of this Agreement and the other Loan Documents and the Participant
receiving the participating interest in the Obligations, the Commitments, and
the other rights and interests of the Originating Lender hereunder shall not
constitute a "Lender" hereunder or under the other Loan Documents and the
Originating Lender's obligations under this Agreement shall remain unchanged,
(ii) the Originating Lender shall remain solely responsible for the performance
of such obligations, (iii) Borrower, Agent, and the Lenders shall continue to
deal solely and directly with the Originating Lender in connection with the
Originating Lender's rights and obligations under this Agreement and the other
Loan Documents, (iv) no Lender shall transfer or grant any participating
interest under which the Participant has the right to approve any amendment to,
or any consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment to, or consent or waiver with
respect to this Agreement or of any other Loan Document would (A) extend the
final maturity date of the Obligations hereunder in which such Participant is
participating, (B) reduce the interest rate applicable to the Obligations
hereunder in which such Participant is participating, (C) release all or a
material portion of the Collateral or guaranties (except to the extent expressly
provided herein or in any of the Loan Documents) supporting the Obligations
hereunder in which such Participant is participating, (D) postpone the payment
of, or reduce the amount of, the interest or fees payable to such Participant
through such Lender, or (E) change the amount or due dates of scheduled
principal repayments or prepayments or premiums, and (v) all amounts payable by
Borrower hereunder shall be determined as if such Lender had not sold such
participation, except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement. The rights of any Participant only shall be derivative through the
Originating Lender with whom such Participant participates and no Participant
shall have any rights under this Agreement or the other Loan Documents or any
direct rights as to the other Lenders, Agent, Borrower, the Collections, the
Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves.
(f) In connection with any such assignment or participation or
proposed assignment or participation, a Lender may disclose all documents and
information which it now or hereafter may have relating to Borrower or
Borrower's business.
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(g) Any other provision in this Agreement notwithstanding, any
Lender may at any time create a security interest in, or pledge, all or any
portion of its rights under and interest in this Agreement in favor of any
Federal Reserve Bank in accordance with Regulation A of the Federal Reserve Bank
or U.S. Treasury Regulation 31 CFR ss.203.14, and such Federal Reserve Bank may
enforce such pledge or security interest in any manner permitted under
applicable law.
14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit of the
respective successors and assigns of each of the parties; PROVIDED, HOWEVER,
that Borrower may not assign this Agreement or any rights or duties hereunder
without the Lenders' prior written consent and any prohibited assignment shall
be absolutely void AB INITIO. No consent to assignment by the Lenders shall
release Borrower from its Obligations. A Lender may assign this Agreement and
the other Loan Documents and its rights and duties hereunder and thereunder
pursuant to SECTION 14.1 hereof and, except as expressly required pursuant to
SECTION 14.1 hereof, no consent or approval by Borrower is required in
connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision of this
Agreement or any other Loan Document, and no consent with respect to any
departure by Borrower therefrom, shall be effective unless the same shall be in
writing and signed by the Required Lenders (or by Agent at the written request
of the Required Lenders) and Borrower and then any such waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given; PROVIDED, HOWEVER, that no such waiver, amendment, or consent
shall, unless in writing and signed by all of the Lenders affected thereby and
Borrower, do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees, or other
amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest on, any
loan or other extension of credit hereunder, or reduce any fees or other amounts
payable hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is required
to take any action hereunder,
(e) amend this Section or any provision of the Agreement
providing for consent or other action by all Lenders,
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(f) release Collateral other than as permitted by SECTION
16.12,
(g) change the definition of "Required Lenders",
(h) contractually subordinate any of the Agent's Liens,
(i) release Borrower or HPSC (other than in connection with
the Borrower Spin-Off) from any obligation for the payment of money, or
(j) change the definition of Borrowing Base or the definitions
of Eligible Receivables, Maximum Revolver Amount, or change SECTION 2.1(b), or
(k) amend any of the provisions of SECTION 16.
and, PROVIDED FURTHER, HOWEVER, that no amendment, waiver or consent shall,
unless in writing and signed by Agent, Issuing Lender, or Swing Lender, as
applicable, affect the rights or duties of Agent, Issuing Lender, or Swing
Lender, as applicable, under this Agreement or any other Loan Document. The
foregoing notwithstanding, any amendment, modification, waiver, consent,
termination, or release of, or with respect to, any provision of this Agreement
or any other Loan Document that relates only to the relationship of the Lender
Group among themselves, and that does not affect the rights or obligations of
Borrower, shall not require consent by or the agreement of Borrower.
15.2 REPLACEMENT OF HOLDOUT LENDER.
(a) If any action to be taken by the Lender Group or Agent
hereunder requires the unanimous consent, authorization, or agreement of all
Lenders, and a Lender ("Holdout Lender") fails to give its consent,
authorization, or agreement, then Agent, upon at least 5 Business Days prior
irrevocable notice to the Holdout Lender, may permanently replace the Holdout
Lender with one or more substitute Lenders (each, a "Replacement Lender"), and
the Holdout Lender shall have no right to refuse to be replaced hereunder. Such
notice to replace the Holdout Lender shall specify an effective date for such
replacement, which date shall not be later than 15 Business Days after the date
such notice is given.
(b) Prior to the effective date of such replacement, the
Holdout Lender and each Replacement Lender shall execute and deliver an
Assignment and Acceptance Agreement, subject only to the Holdout Lender being
repaid its share of the outstanding Obligations (including an assumption of its
Pro Rata Share of the Risk Participation Liability) without any premium or
penalty of any kind whatsoever. If the Holdout Lender shall refuse or fail to
execute and deliver any such Assignment and Acceptance Agreement prior to the
effective date of such replacement, the Holdout Lender shall be deemed to have
executed and delivered such Assignment and Acceptance Agreement. The replacement
of any Holdout Lender shall be made in accordance with the terms of SECTION
14.1. Until such
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time as the Replacement Lenders shall have acquired all of the Obligations, the
Commitments, and the other rights and obligations of the Holdout Lender
hereunder and under the other Loan Documents, the Holdout Lender shall remain
obligated to make the Holdout Lender's Pro Rata Share of Advances.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any Lender to
exercise any right, remedy, or option under this Agreement or any other Loan
Document, or delay by Agent or any Lender in exercising the same, will operate
as a waiver thereof. No waiver by Agent or any Lender will be effective unless
it is in writing, and then only to the extent specifically stated. No waiver by
Agent or any Lender on any occasion shall affect or diminish Agent's and each
Lender's rights thereafter to require strict performance by Borrower of any
provision of this Agreement. Agent's and each Lender's rights under this
Agreement and the other Loan Documents will be cumulative and not exclusive of
any other right or remedy that Agent or any Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby designates
and appoints Foothill as its representative under this Agreement and the other
Loan Documents and each Lender hereby irrevocably authorizes Agent to execute
and deliver each of the other Loan Documents on its behalf and to take such
other action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this SECTION 16.
The provisions of this SECTION 16 are solely for the benefit of Agent, and the
Lenders, and Borrower shall have no rights as a third party beneficiary of any
of the provisions contained herein. Any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "Agent" is for convenience only, that Foothill
is merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the
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Collections, and related matters, (b) execute or file any and all financing or
similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders as
provided in the Loan Documents, (d) exclusively receive, apply, and distribute
the Collections as provided in the Loan Documents, (e) open and maintain such
bank accounts and cash management arrangements as Agent deems necessary and
appropriate in accordance with the Loan Documents for the foregoing purposes
with respect to the Collateral, and the Collections, (f) perform, exercise, and
enforce any and all other rights and remedies of the Lender Group with respect
to Borrower, the Obligations, the Collateral, the Collections, or otherwise
related to any of same as provided in the Loan Documents, and (g) incur and pay
such Lender Group Expenses as Agent may deem necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties under this
Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by Borrower or any Subsidiary or
Affiliate of Borrower, or any officer or director thereof, contained in this
Agreement or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document, or for any failure of Borrower or any
other party to any Loan Document to perform its obligations hereunder or
thereunder. No Agent-Related Person shall be under any obligation to any Lender
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the Books or properties of Borrower or the books or
records or properties of any of Borrower's Subsidiaries or Affiliates.
16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to
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Borrower or counsel to any Lender), independent accountants and other experts
selected by Agent. Agent shall be fully justified in failing or refusing to take
any action under this Agreement or any other Loan Document unless Agent shall
first receive such advice or concurrence of the Lenders as it deems appropriate
and until such instructions are received, Agent shall act, or refrain from
acting, as it deems advisable. If Agent so requests, it shall first be
indemnified to its reasonable satisfaction by Lenders against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action. Agent shall in all cases be fully protected
in acting, or in refraining from acting, under this Agreement or any other Loan
Document in accordance with a request or consent of the Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest, fees, and
expenses required to be paid to Agent for the account of the Lenders, except
with respect to Events of Default of which Agent has actual knowledge, unless
Agent shall have received written notice from a Lender or Borrower referring to
this Agreement, describing such Default or Event of Default, and stating that
such notice is a "notice of default." Agent promptly will notify the Lenders of
its receipt of any such notice or of any Event of Default of which Agent has
actual knowledge. If any Lender obtains actual knowledge of any Event of
Default, such Lender promptly shall notify the other Lenders and Agent of such
Event of Default. Each Lender shall be solely responsible for giving any notices
to its Participants, if any. Subject to SECTION 16.4, Agent shall take such
action with respect to such Default or Event of Default as may be requested by
the Required Lenders in accordance with SECTION 9; PROVIDED, HOWEVER, that
unless and until Agent has received any such request, Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrower
and its Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrower and any other Person (other than the Lender Group)
party to a Loan Document, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to Borrower. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking
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action under this Agreement and the other Loan Documents, and to make such
investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrower and any other Person (other than the Lender Group)
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of Borrower and any other
Person party to a Loan Document that may come into the possession of any of the
Agent-Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay Lender
Group Expenses to the extent Agent reasonably deems necessary or appropriate for
the performance and fulfillment of its functions, powers, and obligations
pursuant to the Loan Documents, including court costs, reasonable attorneys fees
and expenses, costs of collection by outside collection agencies and auctioneer
fees and costs of security guards or insurance premiums paid to maintain the
Collateral, whether or not Borrower is obligated to reimburse Agent or Lenders
for such expenses pursuant to the Loan Agreement or otherwise. Agent is
authorized and directed to deduct and retain sufficient amounts from Collections
received by Agent to reimburse Agent for such out-of-pocket costs and expenses
prior to the distribution of any amounts to Lenders. In the event Agent is not
reimbursed for such costs and expenses from Collections received by Agent, each
Lender hereby agrees that it is and shall be obligated to pay to or reimburse
Agent for the amount of such Lender's Pro Rata Share thereof. Whether or not the
transactions contemplated hereby are consummated, the Lenders shall indemnify
upon demand the Agent-Related Persons (to the extent not reimbursed by or on
behalf of Borrower and without limiting the obligation of Borrower to do so),
according to their Pro Rata Shares, from and against any and all Indemnified
Liabilities; PROVIDED, HOWEVER, that no Lender shall be liable for the payment
to any Agent-Related Person of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct nor
shall any Lender be liable for the obligations of any Defaulting Lender in
failing to make an Advance or other extension of credit hereunder. Without
limitation of the foregoing, each Lender shall reimburse Agent upon demand for
such Lender's ratable share of any costs or out-of-pocket expenses (including
attorneys fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrower. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
16.8 AGENT IN INDIVIDUAL CAPACITY. Foothill and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking, trust,
financial advisory, underwriting, or other
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business with Borrower and its Subsidiaries and Affiliates and any other Person
(other than the Lender Group) party to any Loan Documents as though Foothill
were not Agent hereunder, and, in each case, without notice to or consent of the
other members of the Lender Group. The other members of the Lender Group
acknowledge that, pursuant to such activities, Foothill or its Affiliates may
receive information regarding Borrower or its Affiliates and any other Person
(other than the Lender Group) party to any Loan Documents that is subject to
confidentiality obligations in favor of Borrower or such other Person and that
prohibit the disclosure of such information to the Lenders, and the Lenders
acknowledge that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall not be under any obligation to provide such
information to them. The terms "Lender" and "Lenders" include Foothill in its
individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice to the
Lenders. If Agent resigns under this Agreement, the Required Lenders shall
appoint a successor Agent for the Lenders. If no successor Agent is appointed
prior to the effective date of the resignation of Agent, Agent may appoint,
after consulting with the Lenders, a successor Agent. If Agent has materially
breached or failed to perform any material provision of this Agreement or of
applicable law, the Required Lenders may agree in writing to remove and replace
Agent with a successor Agent from among the Lenders. In any such event, upon the
acceptance of its appointment as successor Agent hereunder, such successor Agent
shall succeed to all the rights, powers, and duties of the retiring Agent and
the term "Agent" shall mean such successor Agent and the retiring Agent's
appointment, powers, and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this SECTION 16 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor Agent has accepted
appointment as Agent by the date which is 45 days following a retiring Agent's
notice of resignation, the retiring Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
Agent hereunder until such time, if any, as the Lenders appoint a successor
Agent as provided for above.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with Borrower
and its Subsidiaries and Affiliates and any other Person (other than the Lender
Group) party to any Loan Documents as though such Lender were not a Lender
hereunder without notice to or consent of the other members of the Lender Group.
The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Borrower or its Affiliates and any other Person (other than the Lender
Group) party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrower or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such
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confidentiality obligations, which waiver such Lender will use its reasonable
best efforts to obtain), such Lender not shall be under any obligation to
provide such information to them. With respect to the Swing Loans and Agent
Advances, Swing Lender shall have the same rights and powers under this
Agreement as any other Lender and may exercise the same as though it were not
the sub-agent of Agent.
16.11 WITHHOLDING TAXES.
(a) If any Lender is a "foreign corporation, partnership or
trust" within the meaning of the IRC and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the IRC, such
Lender agrees with and in favor of Agent and Borrower, to deliver to Agent and
Borrower:
(i) if such Lender claims an exemption from withholding tax
pursuant to its portfolio interest exception, (A) a statement of the
Lender, signed under penalty of perjury, that it is not a (I) a
"bank" as described in Section 881(c)(3)(A) of the IRC, (II) a 10%
shareholder (within the meaning of Section 881(c)(3)(B) of the IRC),
or (III) a controlled foreign corporation described in Section
881(c)(3)(C) of the IRC, and (B) a properly completed IRS Form
W-8BEN, before the first payment of any interest under this
Agreement and at any other time reasonably requested by Agent or
Borrower;
(ii) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed IRS Form W-8BEN before the first payment of any interest
under this Agreement and at any other time reasonably requested by
Agent or Borrower;
(iii) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form
W-8ECI before the first payment of any interest is due under this
Agreement and at any other time reasonably requested by Agent or
Borrower;
(iv) such other form or forms as may be required under the IRC
or other laws of the United States as a condition to exemption from,
or reduction of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Borrower of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form W-8BEN
and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of
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Borrower to such Lender, such Lender agrees to notify Agent of the percentage
amount in which it is no longer the beneficial owner of Obligations of Borrower
to such Lender. To the extent of such percentage amount, Agent will treat such
Lender's IRS Form W-8BEN as no longer valid.
(c) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such Lender an
amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to Agent, then Agent may withhold from any
interest payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax.
(d) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify Agent of a change in circumstances which rendered the
exemption from, or reduction of, withholding tax ineffective, or for any other
reason) such Lender shall indemnify and hold Agent harmless for all amounts
paid, directly or indirectly, by Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the amounts
payable to Agent under this Section, together with all costs and expenses
(including attorneys fees and expenses). The obligation of the Lenders under
this subsection shall survive the payment of all Obligations and the resignation
or replacement of Agent.
(e) All payments made by Borrower hereunder or under any
note will be made without setoff, counterclaim, or other defense, except as
required by applicable law other than for Taxes (as defined below). All such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments
or other charges of whatever nature now or hereafter imposed by any
jurisdiction (other than the United States) or by any political subdivision
or taxing authority thereof or therein (other than of the United States) with
respect to such payments (but excluding, any tax imposed by any jurisdiction
or by any political subdivision or taxing authority thereof or therein (i)
measured by or based on the net income or net profits of a Lender, or (ii) to
the extent that such tax results from a change in the circumstances of the
Lender, including a change in the residence, place of organization, or
principal place of business of the Lender, or a change in the branch or
lending office of the Lender participating in the transactions set forth
herein) and all interest, penalties or similar liabilities with respect
thereto (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as "TAXES"). If
any Taxes are so levied or imposed, Borrower agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any note, including
any amount paid pursuant to this SECTION 16.11(e) after withholding or
deduction for or on account of any Taxes, will not be less than the
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amount provided for herein; PROVIDED, HOWEVER, that Borrower shall not be
required to increase any such amounts payable to Agent or any Lender (i) that
is not organized under the laws of the United States, if such Person fails to
comply with the other requirements of this SECTION 16.11, or (ii) if the
increase in such amount payable results from Agent's or such Lender's own
willful misconduct or gross negligence. Borrower will furnish to Agent as
promptly as possible after the date the payment of any Taxes is due pursuant
to applicable law certified copies of tax receipts evidencing such payment by
Borrower.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent, at its
option and in its sole discretion, to release any Lien on any Collateral (i)
upon the termination of the Commitments and payment and satisfaction in full by
Borrower of all Obligations, (ii) constituting property being sold or disposed
of if a release is required or desirable in connection therewith and if Borrower
certifies to Agent that the sale or disposition is permitted under SECTION 7.4
of this Agreement or the other Loan Documents (and Agent may rely conclusively
on any such certificate, without further inquiry), (iii) constituting property
in which Borrower owned no interest at the time the security interest was
granted or at any time thereafter, or (iv) constituting property leased to
Borrower under a lease that has expired or is terminated in a transaction
permitted under this Agreement. Except as provided above, Agent will not execute
and deliver a release of any Lien on any Collateral without the prior written
authorization of (y) if the release is of all or substantially all of the
Collateral, all of the Lenders, or (z) otherwise, the Required Lenders. Upon
request by Agent or Borrower at any time, the Lenders will confirm in writing
Agent's authority to release any such Liens on particular types or items of
Collateral pursuant to this SECTION 16.12; PROVIDED, HOWEVER, that (1) Agent
shall not be required to execute any document necessary to evidence such release
on terms that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrower in respect of)
all interests retained by Borrower, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any of the
Lenders to assure that the Collateral exists or is owned by Borrower or is cared
for, protected, or insured or has been encumbered, or that the Agent's Liens
have been properly or sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to exercise at all or in
any particular manner or under any duty of care, disclosure or fidelity, or to
continue exercising, any of the rights, authorities and powers granted or
available to Agent pursuant to any of the Loan Documents, it being understood
and agreed that in respect of the Collateral, or any act, omission, or event
related thereto, subject to the terms and conditions contained herein, Agent may
act in any manner it may deem appropriate, in its sole discretion given Agent's
own interest in the Collateral in its capacity as one of the
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Lenders and that Agent shall have no other duty or liability whatsoever to any
Lender as to any of the foregoing, except as otherwise provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not, without the
express consent of Agent, and that it shall, to the extent it is lawfully
entitled to do so, upon the request of Agent, set off against the Obligations,
any amounts owing by such Lender to Borrower or any deposit accounts of Borrower
now or hereafter maintained with such Lender. Each of the Lenders further agrees
that it shall not, unless specifically requested to do so by Agent, take or
cause to be taken any action, including, the commencement of any legal or
equitable proceedings, to foreclose any Lien on, or otherwise enforce any
security interest in, any of the Collateral the purpose of which is, or could
be, to give such Lender any preference or priority against the other Lenders
with respect to the Collateral.
(b) If, at any time or times any Lender shall receive (i) by
payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or any
payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to Agent, or in immediately available funds, as applicable, for the account
of all of the Lenders and for application to the Obligations in accordance with
the applicable provisions of this Agreement, or (2) purchase, without recourse
or warranty, an undivided interest and participation in the Obligations owed to
the other Lenders so that such excess payment received shall be applied ratably
as among the Lenders in accordance with their Pro Rata Shares; provided,
however, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases of participations shall
be rescinded in whole or in part, as applicable, and the applicable portion of
the purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender as its
agent (and each Lender hereby accepts such appointment) for the purpose of
perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the Code can be perfected only by possession. Should any Lender obtain
possession of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor shall deliver such Collateral to Agent or
in accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by Agent to
the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by
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written notice to Agent. Concurrently with each such payment, Agent shall
identify whether such payment (or any portion thereof) represents principal,
premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each member of
the Lender Group authorizes and directs Agent to enter into this Agreement and
the other Loan Documents relating to the Collateral, for the benefit of the
Lender Group. Each member of the Lender Group agrees that any action taken by
Agent in accordance with the terms of this Agreement or the other Loan Documents
relating to the Collateral and the exercise by Agent of its powers set forth
therein or herein, together with such other powers that are reasonably
incidental thereto, shall be binding upon all of the Lenders.
16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY; DISCLAIMERS BY
LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to this Agreement,
each Lender:
(a) is deemed to have requested that Agent furnish such
Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "REPORT" and collectively, "REPORTS") prepared by
Agent, and Agent shall so furnish each Lender with such Reports,
(b) expressly agrees and acknowledges that Agent does not (i)
make any representation or warranty as to the accuracy of any Report, and (ii)
shall not be liable for any information contained in any Report,
(c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding Borrower
and will rely significantly upon the Books, as well as on representations of
Borrower's personnel,
(d) agrees to keep all Reports and other material, non-public
information regarding Borrower and its Subsidiaries and their operations,
assets, and existing and contemplated business plans in a confidential manner;
it being understood and agreed by Borrower that in any event such Lender may
make disclosures (a) to counsel for and other advisors, accountants, and
auditors to such Lender, (b) reasonably required by any BONA FIDE potential or
actual Assignee or Participant in connection with any contemplated or actual
assignment or transfer by such Lender of an interest herein or any participation
interest in such Lender's rights hereunder, (c) of information that has become
public by disclosures made by Persons other than such Lender, its Affiliates,
assignees, transferees, or Participants, or (d) as required or requested by any
court, governmental or administrative agency, pursuant to any subpoena or other
legal process, or by any law, statute, regulation, or court order; PROVIDED,
HOWEVER, that, unless prohibited by applicable law, statute, regulation, or
court order, such Lender shall notify Borrower of any request by any court,
governmental or administrative agency, or pursuant to any subpoena or other
legal process for disclosure of
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any such non-public material information concurrent with, or where practicable,
prior to the disclosure thereof, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrower, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Borrower, and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrower to Agent that has not been contemporaneously
provided by Borrower to such Lender, and, upon receipt of such request, Agent
promptly shall provide a copy of same to such Lender, (y) to the extent that
Agent is entitled, under any provision of the Loan Documents, to request
additional reports or information from Borrower, any Lender may, from time to
time, reasonably request Agent to exercise such right as specified in such
Lender's notice to Agent, whereupon Agent promptly shall request of Borrower the
additional reports or information reasonably specified by such Lender, and, upon
receipt thereof from Borrower, Agent promptly shall provide a copy of same to
such Lender, and (z) any time that Agent renders to Borrower a statement
regarding the Loan Account, Agent shall send a copy of such statement to each
Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that certain of the
Loan Documents now or hereafter may have been or will be executed only by or in
favor of Agent in its capacity as such, and not by or in favor of the Lenders,
any and all obligations on the part of Agent (if any) to make any credit
available hereunder shall constitute the several (and not joint) obligations of
the respective Lenders on a ratable basis, according to their respective
Commitments, to make an amount of such credit not to exceed, in principal
amount, at any one time outstanding, the amount of their respective Commitments.
Nothing contained herein shall confer upon any Lender any interest in, or
subject any Lender to any liability for, or in respect of, the business, assets,
profits, losses, or liabilities of any other Lender. Each Lender shall be solely
responsible for notifying its Participants of any matters relating to the Loan
Documents to the extent any such notice may be required, and no Lender shall
have any obligation, duty, or liability to any Participant of any other Lender.
Except as provided in SECTION 16.7, no member of the Lender Group shall have any
liability for the acts or any other member of the Lender Group. No Lender shall
be responsible to Borrower or
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any other Person for any failure by any other Lender to fulfill its obligations
to make credit available hereunder, nor to advance for it or on its behalf in
connection with its Commitment, nor to take any other action on its behalf
hereunder or in connection with the financing contemplated herein.
16.19 LEGAL REPRESENTATION OF AGENT. In connection with the negotiation,
drafting, and execution of this Agreement and the other Loan Documents, or in
connection with future legal representation relating to loan administration,
amendments, modifications, waivers, or enforcement of remedies, Xxxxxxx, Xxxxxxx
& Xxxxxxxx LLP ("Xxxxxxx") only has represented and only shall represent
Foothill in its capacity as Agent and as a Lender. Each other Lender hereby
acknowledges that Xxxxxxx does not represent it in connection with any such
matters.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed effective
when executed by Borrower, Agent, and each Lender whose signature is provided
for on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth herein for
convenience only. Unless the contrary is compelled by the context, everything
contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or ambiguity
herein shall be construed against the Lender Group or Borrower, whether under
any rule of construction or otherwise. On the contrary, this Agreement has been
reviewed by all parties and shall be construed and interpreted according to the
ordinary meaning of the words used so as to accomplish fairly the purposes and
intentions of all parties hereto.
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement shall be
severable from every other provision of this Agreement for the purpose of
determining the legal enforceability of any specific provision.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a writing
signed by Agent (on behalf of the requisite Lenders) and Borrower.
17.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be executed
in any number of counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be an original,
and all of which, when taken together, shall constitute but one and the same
Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
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counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document MUTATIS
MUTANDIS.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or payment
of the Obligations by Borrower or the transfer to the Lender Group of any
property should for any reason subsequently be declared to be void or voidable
under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "VOIDABLE TRANSFER"), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of Borrower
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
17.8 INTEGRATION. This Agreement, together with the other Loan Documents,
reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof, including without
limitation the Existing Loan Documents and any other agreement or other document
executed prior to the date hereof.
[Signature page to follow.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered as of the date first above written.
AMERICAN COMMERCIAL FINANCE CORPORATION,
a Delaware corporation
By: /s/ Xxxx X. Xxxxxxx
-----------------------
Title: Executive Vice President
FOOTHILL CAPITAL CORPORATION,
a California corporation, as Agent and as a Lender
By: /s/ Xxxxxx X. Xxxxx
--------------------------
Title: Senior Vice President
S-1
TABLE OF CONTENTS
1. DEFINITIONS AND CONSTRUCTION.............................................................................2
1.1 Definitions.....................................................................................2
1.2 Accounting Terms...............................................................................26
1.3 Code...........................................................................................26
1.4 Construction...................................................................................26
1.5 Schedules and Exhibits.........................................................................26
2. LOAN AND TERMS OF PAYMENT...............................................................................26
2.1 Revolver Advances..............................................................................26
2.2 Term Loan......................................................................................27
2.3 Borrowing Procedures and Settlements...........................................................28
2.4 Payments.......................................................................................35
2.5 Overadvances...................................................................................38
2.6 Interest Rates and Letter of Credit Fee: Rates, Payments, and Calculations....................38
2.7 Cash Management................................................................................39
2.8 Crediting Payments; Float Charge...............................................................40
2.9 Designated Account.............................................................................40
2.10 Maintenance of Loan Account; Statements of Obligations.........................................40
2.11 Fees...........................................................................................41
3. CONDITIONS; TERM OF AGREEMENT...........................................................................41
3.1 Conditions Precedent to the Initial Extension of Credit........................................41
3.2 Conditions Subsequent to the Initial Extension of Credit.......................................44
3.3 Conditions Precedent to all Extensions of Credit...............................................44
3.4 Term...........................................................................................45
3.5 Effect of Termination..........................................................................45
3.6 Early Termination by Borrower..................................................................45
4. CREATION OF SECURITY INTEREST...........................................................................46
4.1 Grant of Security Interest.....................................................................46
4.2 Negotiable Collateral..........................................................................46
4.3 Collection of Accounts, General Intangibles, and Negotiable Collateral.........................46
4.4 Delivery of Additional Documentation Required..................................................47
4.5 Power of Attorney..............................................................................47
4.6 Right to Inspect...............................................................................48
4.7 Control Agreements.............................................................................48
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5. REPRESENTATIONS AND WARRANTIES..........................................................................48
5.1 No Encumbrances................................................................................48
5.2 Eligible Accounts..............................................................................48
5.3 Eligible Inventory.............................................................................49
5.4 Equipment......................................................................................49
5.5 Location of Inventory and Equipment............................................................49
5.6 Inventory Records..............................................................................49
5.7 Location of Chief Executive Office; FEIN.......................................................49
5.8 Due Organization and Qualification; Subsidiaries...............................................49
5.9 Due Authorization; No Conflict.................................................................50
5.10 Litigation.....................................................................................50
5.11 No Material Adverse Change.....................................................................51
5.12 Fraudulent Transfer............................................................................51
5.13 Employee Benefits..............................................................................51
5.14 Environmental Condition........................................................................51
5.15 Brokerage Fees.................................................................................51
5.16 Intellectual Property..........................................................................51
5.17 Leases.........................................................................................52
5.18 DDAs...........................................................................................52
5.19 Complete Disclosure............................................................................52
5.20 Indebtedness...................................................................................52
6. AFFIRMATIVE COVENANTS...................................................................................52
6.1 Accounting System..............................................................................52
6.2 Collateral Reporting...........................................................................53
6.3 Financial Statements, Reports, Certificates....................................................53
6.5 Return.........................................................................................55
6.6 Maintenance of Properties......................................................................55
6.7 Taxes..........................................................................................55
6.8 Insurance......................................................................................57
6.9 Location of Inventory and Equipment............................................................57
6.10 Compliance with Laws...........................................................................57
6.11 Leases.........................................................................................57
6.12 Brokerage Commissions..........................................................................57
6.13 Existence, etc.................................................................................57
6.14 Environmental..................................................................................57
6.15 Disclosure Updates.............................................................................57
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7. NEGATIVE COVENANTS......................................................................................59
7.1 Indebtedness...................................................................................59
7.2 Liens..........................................................................................60
7.3 Restrictions on Fundamental Changes............................................................60
7.4 Disposal of Assets.............................................................................60
7.5 Change Name....................................................................................60
7.6 Guarantee......................................................................................60
7.7 Nature of Business.............................................................................60
7.8 Prepayments and Amendments.....................................................................60
7.9 Change of Control..............................................................................61
7.11 Distributions..................................................................................61
7.12 Accounting Methods.............................................................................61
7.13 Investments....................................................................................61
7.14 Transactions with Affiliates...................................................................61
7.15 Suspension.....................................................................................61
7.16 Compensation...................................................................................61
7.17 Use of Proceeds................................................................................62
7.18 Change in Location of Chief Executive Office; Inventory and Equipment with Bailees.............62
7.19 Securities Accounts............................................................................62
7.20 Financial Covenants............................................................................62
8. EVENTS OF DEFAULT.......................................................................................63
9. THE LENDER GROUP'S RIGHTS AND REMEDIES..................................................................66
9.1 Rights and Remedies............................................................................66
9.2 Remedies Cumulative............................................................................68
10. TAXES AND EXPENSES......................................................................................68
11. WAIVERS; INDEMNIFICATION................................................................................69
11.1 Demand; Protest; etc...........................................................................69
11.2 The Lender Group's Liability for Collateral....................................................69
11.3 Indemnification................................................................................69
12. NOTICES.................................................................................................70
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER..............................................................71
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS..............................................................72
14.1 Assignments and Participations.................................................................72
14.2 Successors.....................................................................................75
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15. AMENDMENTS; WAIVERS.....................................................................................75
15.1 Amendments and Waivers.........................................................................75
15.2 No Waivers; Cumulative Remedies................................................................77
16. AGENT; THE LENDER GROUP.................................................................................77
16.1 Appointment and Authorization of Agent.........................................................77
16.2 Delegation of Duties...........................................................................78
16.3 Liability of Agent.............................................................................78
16.4 Reliance by Agent..............................................................................78
16.5 Notice of Default or Event of Default..........................................................79
16.6 Credit Decision................................................................................79
16.7 Costs and Expenses; Indemnification............................................................80
16.8 Agent in Individual Capacity...................................................................80
16.9 Successor Agent................................................................................81
16.10 Lender in Individual Capacity..................................................................81
16.11 Withholding Taxes..............................................................................82
16.12 Collateral Matters.............................................................................84
16.13 Restrictions on Actions by Lenders; Sharing of Payments........................................85
16.14 Agency for Perfection..........................................................................85
16.15 Payments by Agent to the Lenders...............................................................85
16.16 Concerning the Collateral and Related Loan Documents...........................................86
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by Lenders; Other
Reports and Information........................................................................86
16.18 Several Obligations; No Liability..............................................................87
16.19 Legal Representation of Agent..................................................................88
17. GENERAL PROVISIONS......................................................................................88
17.1 Effectiveness..................................................................................88
17.2 Section Headings...............................................................................88
17.3 Interpretation.................................................................................88
17.4 Severability of Provisions.....................................................................88
17.5 Amendments in Writing..........................................................................88
17.6 Counterparts; Telefacsimile Execution..........................................................88
17.7 Revival and Reinstatement of Obligations.......................................................89
17.8 Integration....................................................................................89
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EXHIBITS AND SCHEDULES
Exhibit A-1 Form of Assignment and Acceptance
Exhibit B-1 Form of Borrowing Base Certificate
Exhibit C-1 Form of Compliance Certificate
Exhibit F-1 Form of Financial Reporting Certificate
Schedule A-1 Agent's Account
Schedule C-1 Commitments
Schedule D-1 Designated Account
Schedule P-1 Permitted Liens
Schedule 5.5 Locations of Equipment
Schedule 5.7 Chief Executive Office; FEIN
Schedule 5.8(c) Capitalization of Borrower's Subsidiaries
Schedule 5.10 Litigation
Schedule 5.14 Environmental Matters
Schedule 5.16 Intellectual Property
Schedule 5.18 Demand Deposit Accounts
Schedule 5.20 Permitted Indebtedness
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SCHEDULE A-1
AGENT'S ACCOUNT
An account at a bank designated by Agent from time to time as the
account into which Borrower shall make all payments to Agent for the benefit of
the Lender Group and into which the Lender Group shall make all payments to
Agent under this Agreement and the other Loan Documents; unless and until Agent
notifies Borrower and the Lender Group to the contrary, Agent's Account shall be
that certain deposit account bearing account number 323-266193 and maintained by
Agent with JPMorgan Chase Bank, 0 Xxx Xxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, ABA #000000000.
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SCHEDULE C-1
COMMITMENTS
==========================================================================================
LENDER REVOLVER COMMITMENT TOTAL COMMITMENT
==========================================================================================
Foothill Capital $20,000,000 $20,000,000
Corporation
==========================================================================================
All Lenders $20,000,000 $20,000,000
==========================================================================================
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SCHEDULE D-1
DESIGNATED ACCOUNT
Account number 541-48613 of Borrower maintained with Borrower's
Designated Account Bank, or such other deposit account of Borrower (located
within the United States) that has been designed as such, in writing, by
Borrower to Agent.
"DESIGNATED ACCOUNT BANK" means Fleet National Bank, whose office is
located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, and whose ABA number is
000-000-000.
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