EXHIBIT 10.371
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CREDIT AGREEMENT
Dated as of September 14, 2001
among
BLACK WARRIOR WIRELINE CORP.,
as Borrower,
THE OTHER CREDIT PARTIES FROM TIME TO TIME SIGNATORY HERETO,
as Credit Parties,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent and Lender
GECC CAPITAL MARKETS GROUP, INC.
as Lead Arranger
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TABLE OF CONTENTS
Page
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1. AMOUNT AND TERMS OF CREDIT...............................................................................1
1.1 Credit Facilities...............................................................................1
1.2 Intentionally Omitted...........................................................................6
1.3 Prepayments.....................................................................................6
1.4 Use of Proceeds.................................................................................8
1.5 Interest and Applicable Margins.................................................................8
1.6 Eligible Accounts..............................................................................10
1.7 Intentionally Omitted..........................................................................13
1.8 Cash Management Systems........................................................................13
1.9 Fees...........................................................................................13
1.10 Receipt of Payments............................................................................14
1.11 Application and Allocation of Payments.........................................................14
1.12 Loan Account and Accounting....................................................................15
1.13 Indemnity......................................................................................15
1.14 Access. ......................................................................................17
1.15 Taxes..........................................................................................17
1.16 Capital Adequacy; Increased Costs; Illegality..................................................18
1.17 Single Loan....................................................................................19
2. CONDITIONS PRECEDENT....................................................................................19
2.1 Conditions to the Initial Loans................................................................19
2.2 Further Conditions to Each Loan................................................................21
3. REPRESENTATIONS AND WARRANTIES..........................................................................22
3.1 Corporate Existence; Compliance with Law.......................................................23
3.2 Executive Offices, Collateral Locations, FEIN, Organizational Number...........................23
3.3 Corporate Power, Authorization, Enforceable Obligations........................................23
3.4 Financial Statements and Projections...........................................................24
3.5 Material Adverse Effect........................................................................25
3.6 Ownership of Property; Liens...................................................................25
3.7 Labor Matters..................................................................................25
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock and Indebtedness......................26
3.9 Government Regulation..........................................................................26
3.10 Margin Regulations.............................................................................26
3.11 Taxes..........................................................................................27
3.12 ERISA..........................................................................................27
3.13 No Litigation..................................................................................28
3.14 Brokers........................................................................................28
3.15 Intellectual Property..........................................................................29
3.16 Full Disclosure................................................................................29
3.17 Environmental Matters..........................................................................29
3.18 Insurance......................................................................................30
3.19 Deposit and Disbursement Accounts..............................................................30
3.20 Government Contracts...........................................................................30
3.21 Customer and Trade Relations...................................................................30
3.22 Agreements and Other Documents.................................................................30
3.23 Solvency.......................................................................................31
3.24 Subordinated Debt..............................................................................31
4. FINANCIAL STATEMENTS AND INFORMATION....................................................................31
4.1 Reports and Notices............................................................................31
4.2 Communication with Accountants.................................................................32
5. AFFIRMATIVE COVENANTS...................................................................................32
5.1 Maintenance of Existence and Conduct of Business...............................................32
5.2 Payment of Charges.............................................................................32
5.3 Books and Records..............................................................................33
5.4 Insurance; Damage to or Destruction of Collateral..............................................33
5.5 Compliance with Laws...........................................................................35
5.6 Supplemental Disclosure........................................................................35
5.7 Intellectual Property..........................................................................35
5.8 Environmental Matters..........................................................................35
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee Letters and Real Estate
Purchases......................................................................................36
5.10 Further Assurances.............................................................................36
6. NEGATIVE COVENANTS......................................................................................38
6.1 Mergers, Subsidiaries, Etc.....................................................................38
6.2 Investments; Loans and Advances................................................................38
6.3 Indebtedness...................................................................................38
6.4 Employee Loans and Affiliate Transactions......................................................39
6.5 Capital Structure and Business.................................................................39
6.6 Guaranteed Indebtedness........................................................................39
6.7 Liens..........................................................................................39
6.8 Sale of Stock and Assets.......................................................................40
6.9 ERISA..........................................................................................40
6.10 Financial Covenants............................................................................40
6.11 Hazardous Materials............................................................................40
6.12 Sale-Leasebacks................................................................................41
6.13 Cancellation of Indebtedness...................................................................41
6.14 Restricted Payments............................................................................41
6.15 Change of Corporate Name or Location; Change of Fiscal Year....................................41
6.16 No Impairment of Intercompany Transfers........................................................41
6.17 No Speculative Transactions....................................................................42
6.18 Leases; Real Estate Purchases..................................................................42
6.19 Changes Relating to Subordinated Debt; Material Contracts......................................42
7. TERM....................................................................................................42
7.1 Termination....................................................................................42
7.2 Survival of Obligations Upon Termination of Financing Arrangements.............................42
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8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES..................................................................43
8.1 Events of Default..............................................................................43
8.2 Remedies.......................................................................................45
8.3 Waivers by Credit Parties......................................................................45
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF
AGENT...................................................................................................46
9.1 Assignment and Participations..................................................................46
9.2 Appointment of Agent...........................................................................48
9.3 Agent's Reliance, Etc..........................................................................49
9.4 GE Capital and Affiliates......................................................................49
9.5 Lender Credit Decision.........................................................................50
9.6 Indemnification................................................................................50
9.7 Successor Agent................................................................................50
9.8 Setoff and Sharing of Payments.................................................................51
9.9 Advances; Payments; Non-Funding Lenders; Information; Actions in Concert.......................52
10. SUCCESSORS AND ASSIGNS..................................................................................54
10.1 Successors and Assigns.........................................................................54
11. MISCELLANEOUS...........................................................................................54
11.1 Complete Agreement; Modification of Agreement..................................................54
11.2 Amendments and Waivers.........................................................................55
11.3 Fees and Expenses..............................................................................57
11.4 No Waiver......................................................................................58
11.5 Remedies.......................................................................................58
11.6 Severability...................................................................................58
11.7 Conflict of Terms..............................................................................59
11.8 Confidentiality................................................................................59
11.9 GOVERNING LAW..................................................................................59
11.10 Notices........................................................................................60
11.11 Section Titles.................................................................................61
11.12 Counterparts...................................................................................61
11.13 WAIVER OF JURY TRIAL...........................................................................61
11.14 Press Releases and Related Matters.............................................................61
11.15 Reinstatement..................................................................................61
11.16 Advice of Counsel..............................................................................62
11.17 No Strict Construction.........................................................................62
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INDEX OF APPENDICES
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Annex A (Recitals) - Definitions
Annex B (Section 1.8) - Cash Management System
Annex C (Section 2.1(a)) - Closing Checklist
Annex D (Section 4.1(a)) - Financial Statements and Projections -- Reporting
Annex E(Section 4.1(b)) - Collateral Reports
Annex F (Section 6.10) - Financial Covenants
Annex G (Section 9.9(a)) - Lenders' Wire Transfer Information
Annex H (Section 11.10) - Notice Addresses
Annex I (from Annex A -
Commitments definition) Commitments as of Closing Date
Exhibit 1.1(a)(i) - Form of Notice of Revolving Credit Advance
Exhibit 1.1(a)(ii) - Form of Revolving Note
Exhibit 1.1(b) - Form of Term Note
Exhibit 1.1(c)(i) - Form of Notice of CapEx Advance
Exhibit 1.1(c) (ii) - Form of CapEx Note
Exhibit 1.1(d) - Form of Swing Line Note
Exhibit 1.5(e) - Form of Notice of Conversion/Continuation
Exhibit 4.1(b) - Form of Borrowing Base Certificate
Exhibit 9.1(a) - Form of Assignment Agreement
Schedule 1.1 - Agent's Representatives
Disclosure Schedule 1.4 - Sources and Uses; Funds Flow Memorandum
Disclosure Schedule 3.1 - Type of Entity; State of Organization
Disclosure Schedule 3.2 - Executive Offices, Collateral Locations, FEIN
Disclosure Schedule 3.4(A) - Financial Statements
Disclosure Schedule 3.4(B) - Pro Forma
Disclosure Schedule 3.4(C) - Projections
Disclosure Schedule 3.4(D) - Fair Salable Balance Sheet
Disclosure Schedule 3.6 - Real Estate and Leases
Disclosure Schedule 3.7 - Labor Matters
Disclosure Schedule 3.8 - Ventures, Subsidiaries and Affiliates; Outstanding Stock
Disclosure Schedule 3.11 - Tax Matters
Disclosure Schedule 3.12 - ERISA Plans
Disclosure Schedule 3.13 - Litigation
Disclosure Schedule 3.15 - Intellectual Property
Disclosure Schedule 3.17 - Hazardous Materials
Disclosure Schedule 3.18 - Insurance
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Disclosure Schedule 3.19 - Deposit and Disbursement Accounts
Disclosure Schedule 3.20 - Government Contracts
Disclosure Schedule 3.22 - Material Agreements
Disclosure Schedule 3.24 - Subordinated Notes and Subordinated Note Holders
Disclosure Schedule 5.1 - Trade Names
Disclosure Schedule 6.3 - Indebtedness
Disclosure Schedule 6.4(a) - Transactions with Affiliates
Disclosure Schedule 6.7 - Existing Liens
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This CREDIT AGREEMENT (this "Agreement"), dated as of
September 14, 2001 among BLACK WARRIOR WIRELINE CORP., a Delaware corporation
(the "Borrower"); the other Credit Parties from time to time signatory hereto;
GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (in its individual
capacity, "GE Capital"), for itself, as Lender, and as Agent for Lenders, and
the other Lenders signatory hereto from time to time.
RECITALS
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WHEREAS, Borrower has requested that Lenders extend revolving,
term and capex credit facilities to Borrower of up to Forty Million Dollars ($
40,000,000) in the aggregate for the purpose of refinancing certain indebtedness
of Borrower and to provide (a) working capital and capital expenditure financing
for Borrower, (b) funds for other general corporate purposes of Borrower and (c)
funds for other purposes permitted hereunder; and for these purposes, Lenders
are willing to make certain loans and other extensions of credit to Borrower of
up to such amount upon the terms and conditions set forth herein; and
WHEREAS, Borrower has agreed to secure all of its obligations
under the Loan Documents by granting to Agent, for the benefit of Agent and
Lenders, a security interest in and lien upon all of its existing and
after-acquired personal and real property; and
WHEREAS, capitalized terms used in this Agreement shall have
the meanings ascribed to them in Annex A and, for purposes of this Agreement and
the other Loan Documents, the rules of construction set forth in Annex A shall
govern. All Annexes, Disclosure Schedules, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified to this Agreement,
are incorporated herein by reference, and taken together with this Agreement,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants hereinafter contained, and for other good and valuable
consideration, the parties hereto agree as follows:
1. AMOUNT AND TERMS OF CREDIT
1.1 Credit Facilities.
(a) Revolving Credit Facility.
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(i) Subject to the terms and conditions hereof, each
Revolving Lender agrees to make available to Borrower from time to time until
the Commitment Termination Date its Pro Rata Share of advances (each, a
"Revolving Credit Advance"). The Pro Rata Share of the Revolving Loan of any
Revolving Lender shall not at any time exceed its separate Revolving Loan
Commitment. The obligations of each Revolving Lender hereunder shall be several
and not joint. Until the Commitment Termination Date, Borrower may borrow, repay
and reborrow under this Section 1.1(a); provided that the amount of any
Revolving Credit Advance to be made at
any time shall not exceed Borrowing Availability at such time. Borrowing
Availability may be reduced by Reserves imposed by Agent in its reasonable
credit judgment. Each Revolving Credit Advance shall be made on notice by
Borrower to one of the representatives of Agent identified in Schedule 1.1 at
the address specified therein. Any such notice must be given no later than (1)
11:00 a.m. (New York time) on the Business Day of the proposed Revolving Credit
Advance, in the case of an Index Rate Loan, or (2) 11:00 a.m. (New York time) on
the date which is 3 Business Days prior to the proposed Revolving Credit
Advance, in the case of a LIBOR Loan. Each such notice (a "Notice of Revolving
Credit Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(a)(i), and shall include the
information required in such Exhibit and such other information as may be
required by Agent. If Borrower desires to have the Revolving Credit Advances
bear interest by reference to a LIBOR Rate, Borrower must comply with Section
1.5(e).
(ii) Except as provided in Section 1.12, Borrower
shall execute and deliver to each Revolving Lender a note to evidence the
Revolving Loan Commitment of that Revolving Lender. Each note shall be in the
principal amount of the Revolving Loan Commitment of the applicable Revolving
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(a)(ii) (each a "Revolving Note" and, collectively, the "Revolving Notes").
Each Revolving Note shall represent the obligation of Borrower to pay the amount
of the applicable Revolving Lender's Revolving Loan Commitment or, if less, such
Revolving Lender's Pro Rata Share of the aggregate unpaid principal amount of
all Revolving Credit Advances to Borrower together with interest thereon as
prescribed in Section 1.5. The entire unpaid balance of the aggregate Revolving
Loan and all other non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.
(b) Term Loan.
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(i) Subject to the terms and conditions hereof, each
Term Lender agrees to make a term loan (collectively, the "Term Loan") on the
Closing Date to Borrower in the amount of the applicable Term Lender's Term Loan
Commitment. The obligations of each Term Lender hereunder shall be several and
not joint. Each such Term Loan shall be evidenced by a promissory note
substantially in the form of Exhibit 1.1(b) (each a "Term Note" and collectively
the "Term Notes"), and, except as provided in Section 1.12, Borrower shall
execute and deliver a Term Note to the applicable Term Lender. Each Term Note
shall represent the obligation of Borrower to pay the applicable Term Lender's
Term Loan Commitment, together with interest thereon as prescribed in Section
1.5.
(ii) Borrower shall repay the Term Loan in
thirty-five (35) consecutive monthly installments, each in the amount of
$283,333.33 on the first day of each month, commencing on October 1, 2001 and
continuing thereafter. The final thirty-sixth installment shall be due and
payable on September 14, 2004, and shall be in the amount of $7,083,333.45 or,
if different, the remaining principal balance of the Term Loan.
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(iii) Notwithstanding Section 1.1(b)(ii), the
aggregate outstanding principal balance of the Term Loan shall be due and
payable in full in immediately available funds on the Commitment Termination
Date, if not sooner paid in full. No payment with respect to the Term Loan may
be reborrowed.
(iv) Each payment of principal with respect to the
Term Loan shall be paid to Agent for the ratable benefit of each Term Lender
making a Term Loan, ratably in proportion to each such Term Lender's respective
Term Loan Commitment.
(c) CapEx Facility.
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(i) Subject to the terms and conditions hereof, each
CapEx Lender agrees to make available to Borrower from time to time until the
CapEx Commitment Termination Date its Pro Rata Share of advances (each, a "CapEx
Advance"). The Pro Rata Share of the CapEx Loan of any CapEx Lender shall not at
any time exceed its separate CapEx Loan Commitment. The obligations of each
CapEx Lender hereunder shall be several and not joint. Until the CapEx
Commitment Termination Date, Borrower may borrow under this Section 1.1(c);
provided that after giving effect to such CapEx Advance, the CapEx Loan shall
not exceed CapEx Borrowing Availability at such time, proforma for any Eligible
CapEx Equipment to purchased with such CapEx Advance. Each CapEx Advance shall
be made on notice by Borrower to one of the representatives of Agent identified
in Schedule 1.1 at the address specified therein. Any such notice must be given
no later than 11:00 a.m. (New York time) on the date that is 10 Business Days
prior to the date of the proposed CapEx Advance. Each such notice (a "Notice of
CapEx Advance") must be given in writing (by telecopy or overnight courier)
substantially in the form of Exhibit 1.1(c)(i), and shall include the
information required in such Exhibit and in Section 2.3 and such other
information as may be required by Agent. If Borrower desires to have the CapEx
Advances bear interest by reference to a LIBOR Rate, Borrower must comply with
Section 1.5(e).
(ii) Except as provided in Section 1.12, Borrower
shall execute and deliver to each CapEx Lender a note to evidence the CapEx Loan
Commitment of that CapEx Lender. Each note shall be in the principal amount of
the CapEx Loan Commitment of the applicable CapEx Lender, dated the Closing Date
and substantially in the form of Exhibit 1.1(c)(ii) (each a "CapEx Note" and,
collectively, the "CapEx Notes"). Each CapEx Note shall represent the obligation
of Borrower to pay the amount of the applicable CapEx Lender's CapEx Loan
Commitment or, if less, such CapEx Lender's Pro Rata Share of the aggregate
unpaid principal amount of all CapEx Advances to Borrower together with interest
thereon as prescribed in Section 1.5. The entire unpaid balance of the aggregate
CapEx Loan and all other non-contingent Obligations shall be immediately due and
payable in full in immediately available funds on the Commitment Termination
Date.
(iii) Borrower shall repay each CapEx Advance in
consecutive monthly installments, each in the amount of 1/60th of the principal
amount of the original CapEx Advance, on the first day of each month, commencing
3
on the first day of the month immediately following the first CapEx Advance, and
continuing thereafter. Notwithstanding the foregoing, the aggregate outstanding
principal balance of the CapEx Loan shall be due and payable in full in
immediately available funds on the Commitment Termination Date, if not sooner
paid in full. No payment with respect to the CapEx Loan may be reborrowed. Each
payment of principal with respect to the CapEx Loan shall be paid to Agent for
the ratable benefit of each CapEx Lender making a CapEx Loan, ratably in
proportion to each such CapEx Lender's respective CapEx Loan Commitment.
(d) Swing Line Facility.
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(i) Agent shall notify the Swing Line Lender upon
Agent's receipt of any Notice of Revolving Credit Advance. Subject to the terms
and conditions hereof, the Swing Line Lender may, in its discretion, make
available from time to time until the Commitment Termination Date advances
(each, a "Swing Line Advance") in accordance with any such notice. The
provisions of this Section 1.1(d) shall not relieve Revolving Lenders of their
obligations to make Revolving Credit Advances under Section 1.1(a); provided
that if the Swing Line Lender makes a Swing Line Advance pursuant to any such
notice, such Swing Line Advance shall be in lieu of any Revolving Credit Advance
that otherwise may be made by Revolving Credit Lenders pursuant to such notice.
The aggregate amount of Swing Line Advances outstanding shall not exceed at any
time the lesser of (A) the Swing Line Commitment and (B) the lesser of the
Maximum Revolver Amount and the Borrowing Base, in each case, less the
outstanding balance of the Revolving Loan at such time ("Swing Line
Availability"). Until the Commitment Termination Date, Borrower may from time to
time borrow, repay and reborrow under this Section 1.1(d). Each Swing Line
Advance shall be made pursuant to a Notice of Revolving Credit Advance delivered
to Agent by Borrower in accordance with Section 1.1(a). Any such notice must be
given no later than 11:00 a.m. (New York time) on the Business Day of the
proposed Swing Line Advance. Unless the Swing Line Lender has received at least
one Business Day's prior written notice from Requisite Revolving Lenders
instructing it not to make a Swing Line Advance, the Swing Line Lender shall,
notwithstanding the failure of any condition precedent set forth in Sections
2.2, be entitled to fund that Swing Line Advance, and to have each Revolving
Lender make Revolving Credit Advances in accordance with Section 1.1(d)(iii) or
purchase participating interests in accordance with Section 1.1(d)(iv).
Notwithstanding any other provision of this Agreement or the other Loan
Documents, the Swing Line Loan shall constitute an Index Rate Loan. Borrower
shall repay the aggregate outstanding principal amount of the Swing Line Loan
upon demand therefor by Agent.
(ii) Borrower shall execute and deliver to the Swing
Line Lender a promissory note to evidence the Swing Line Commitment. The note
shall be in the principal amount of the Swing Line Commitment of the Swing Line
Lender, dated the Closing Date and substantially in the form of Exhibit
1.1(d)(ii) (the "Swing Line Note"). The Swing Line Note shall represent the
obligation of Borrower to pay the amount of the Swing Line Commitment or, if
less, the aggregate unpaid principal amount of all Swing Line Advances made to
Borrower together with interest thereon as prescribed in Section 1.5. The entire
4
unpaid balance of the Swing Line Loan and all other noncontingent Obligations
shall be immediately due and payable in full in immediately available funds on
the Commitment Termination Date if not sooner paid in full.
(iii) The Swing Line Lender, at any time and from
time to time in its sole and absolute discretion, may on behalf of Borrower (and
Borrower hereby irrevocably authorizes the Swing Line Lender to so act on its
behalf) request each Revolving Lender (including the Swing Line Lender) to make
a Revolving Credit Advance to Borrower (which shall be an Index Rate Loan) in an
amount equal to that Revolving Lender's Pro Rata Share of the principal amount
of the Swing Line Loan (the "Refunded Swing Line Loan") outstanding on the date
such notice is given. Unless any of the events described in Sections 8.1(h) or
8.1(i) has occurred (in which event the procedures of Section 1.1(d)(iv) shall
apply) and regardless of whether the conditions precedent set forth in this
Agreement to the making of a Revolving Credit Advance are then satisfied, each
Revolving Lender shall disburse directly to Agent, its Pro Rata Share of a
Revolving Credit Advance on behalf of the Swing Line Lender prior to 3:00 p.m.
(New York time) in immediately available funds on the Business Day next
succeeding the date that notice is given. The proceeds of those Revolving Credit
Advances shall be immediately paid to the Swing Line Lender and applied to repay
the Refunded Swing Line Loan.
(iv) If, prior to refunding a Swing Line Loan with a
Revolving Credit Advance pursuant to Section 1.1(d)(iii), one of the events
described in Sections 8.1(h) or 8.1(i) has occurred, then, subject to the
provisions of Section 1.1(d)(v) below, each Revolving Lender shall, on the date
such Revolving Credit Advance was to have been made for the benefit of Borrower,
purchase from the Swing Line Lender an undivided participation interest in the
Swing Line Loan in an amount equal to its Pro Rata Share of such Swing Line
Loan. Upon request, each Revolving Lender shall promptly transfer to the Swing
Line Lender, in immediately available funds, the amount of its participation
interest.
(v) Each Revolving Lender's obligation to make
Revolving Credit Advances in accordance with Section 1.1(d)(iii) and to purchase
participation interests in accordance with Section 1.1(d)(iv) shall be absolute
and unconditional and shall not be affected by any circumstance, including (A)
any setoff, counterclaim, recoupment, defense or other right that such Revolving
Lender may have against the Swing Line Lender, Borrower or any other Person for
any reason whatsoever; (B) the occurrence or continuance of any Default or Event
of Default; (C) any inability of Borrower to satisfy the conditions precedent to
borrowing set forth in this Agreement at any time or (D) any other circumstance,
happening or event whatsoever, whether or not similar to any of the foregoing.
If any Revolving Lender does not make available to Agent or the Swing Line
Lender, as applicable, the amount required pursuant to Sections 1.1(d)(iii) or
1.1(d)(iv), as the case may be, the Swing Line Lender shall be entitled to
recover such amount on demand from such Revolving Lender, together with interest
thereon for each day from the date of non-payment until such amount is paid in
full at the Federal Funds Rate for the first two Business Days and at the Index
Rate thereafter.
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(e) Reliance on Notices. Agent shall be entitled to rely upon,
and shall be fully protected in relying upon, any Notice of Revolving Credit
Advance, Notice of Conversion/Continuation or similar notice believed by Agent
to be genuine. Agent may assume that each Person executing and delivering any
notice in accordance herewith was duly authorized, unless the responsible
individual acting thereon for Agent has actual knowledge to the contrary.
1.2 Intentionally Omitted.
---------------------
1.3 Prepayments.
-----------
(a) Voluntary Prepayments; Reductions in Commitments. Borrower
may at any time on at least 5 days' prior written notice to Agent (i)
voluntarily prepay all or part of the Term Loan or CapEx Loan, (ii) permanently
reduce (but not terminate) the Revolving Loan Commitment and/or (iii)
permanently reduce or terminate the CapEx Loan Commitment; provided that (A) any
such prepayments or reductions shall be in a minimum amount of $500,000 and
integral multiples of $250,000 in excess of such amount, (B) the Revolving Loan
Commitment shall not be reduced to an amount less than the amount of the
Revolving Loan then outstanding, (C) the CapEx Loan Commitment shall not be
reduced to an amount less than the amount of the CapEx Loan then outstanding and
(D) after giving effect to such reductions, Borrower shall comply with Section
1.3(b)(i). In addition, Borrower may at any time on at least 10 days' prior
written notice to Agent terminate the Revolving Loan Commitment; provided that
upon such termination, all Loans and other Obligations shall be immediately due
and payable in full. Any voluntary prepayment of the Term Loan or CapEx Loan and
any reduction or termination of the Revolving Loan Commitment or the CapEx Loan
Commitment must be accompanied by payment of the Fee required by Section 1.9(c),
if any, plus the payment of any LIBOR funding breakage costs in accordance with
Section 1.13(b). Upon any such reduction or termination of the Revolving Loan
Commitment, Borrower's right to request Revolving Credit Advances, or request
Swing Line Advances, shall simultaneously be permanently reduced or terminated,
as the case may be. Upon any such reduction or termination of the CapEx Loan
Commitment, Borrower's right to request CapEx Advances shall simultaneously be
permanently reduced or terminated, as the case may be. Each notice of partial
prepayment shall designate the Loans or other Obligations to which such
prepayment is to be applied; provided that any partial prepayments of the Term
Loan or CapEx Loan made by or on behalf of Borrower shall be applied to prepay
the scheduled installments of Borrower's Term Loan or CapEx Loan, as the case
may be, in inverse order of maturity.
(b) Mandatory Prepayments.
---------------------
(i) If at any time the aggregate outstanding balances
of the Revolving Loan and the Swing Line Loan exceed the lesser of (A) the
Maximum Revolver Amount and (B) the Borrowing Base, Borrower shall immediately
repay the aggregate outstanding Revolving Credit Advances to the extent required
to eliminate such excess.
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(ii) If at any time the aggregate outstanding Term
Loan exceeds 70% of the Forced Liquidation Value of Eligible Term Equipment,
Borrower shall immediately repay the aggregate outstanding Term Loan to the
extent required to eliminate such excess.
(iii) If at any time the aggregate outstanding CapEx
Loan exceeds the lesser of (A) the Maximum CapEx Amount and (B) 100% of the
Forced Liquidation Value of the Eligible CapEx Equipment, Borrower shall
immediately repay the aggregate outstanding CapEx Advances to the extent
required to eliminate such excess.
(iv) Immediately upon receipt by any Credit Party of
proceeds of any asset disposition (excluding proceeds of asset dispositions
permitted by Section 6.8(a)) or any sale of Stock of any Subsidiary of any
Credit Party, Borrower shall prepay the Loans in an amount equal to all such
proceeds, net of (A) commissions and other reasonable and customary transaction
costs, fees and expenses properly attributable to such transaction and payable
by such Credit Party in connection therewith (in each case, paid to
non-Affiliates), (B) transfer taxes, (C) amounts payable to holders of senior
Liens (to the extent such Liens constitute Permitted Encumbrances hereunder), if
any, and (D) an appropriate reserve for income taxes in accordance with GAAP in
connection therewith. Any such prepayment shall be applied in accordance with
Section 1.3(c).
(v) If Borrower issues Stock or any debt securities,
no later than the Business Day following the date of receipt of the proceeds
thereof, Borrower shall prepay the Loans in an amount equal to all such
proceeds, net of underwriting discounts and commissions and other reasonable
costs paid to non-Affiliates in connection therewith. Any such prepayment shall
be applied in accordance with Section 1.3(c).
(vi) If 30 days after the Closing Date, the aggregate
appraised value of all Equipment of Borrower that can be titled but for which
certificates of title noting the Lien of the Agent have not been delivered to
the Agent exceeds $250,000, Borrower shall prepay the Loans in an amount equal
to amount by which the aggregate appraised value of all such Equipment exceeds
$250,000.
(c) Application of Certain Mandatory Prepayments. Any
prepayments made by Borrower pursuant to Sections 1.3(b)(iv), (b)(v) or (b)(vi)
above shall be applied as follows: first, to Fees and reimbursable expenses of
Agent then due and payable pursuant to any of the Loan Documents; second, to
interest then due and payable on the Term Loan and CapEx Loan, pro rata between
the Term Loan and CapEx Loan; third, to prepay the scheduled principal
installments of the Term Loan and CapEx Loan, in inverse order of maturity as to
installments of principal and pro rata between the Term Loan and CapEx Loan,
until such Term Loan and CapEx Loan have been prepaid in full; fourth, to
interest then due and payable on the Swing Line Loan; fifth, to the principal
balance of the Swing Line Loan until the same has been repaid in full; sixth, to
interest then due and payable on Revolving Credit Advances; and seventh, to the
principal balance of Revolving Credit Advances until the same has been paid in
full. Neither the
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Revolving Loan Commitment nor the Swing Line Commitment shall be permanently
reduced by the amount of any such prepayments.
(d) Application of Prepayments from Insurance and Condemnation
Proceeds. Prepayments from insurance or condemnation proceeds in accordance with
Section 5.4(c) shall be applied as follows: insurance proceeds from casualties
or losses to cash or Inventory shall be applied, first, to the Swing Line Loans
and, second, to the Revolving Credit Loan; insurance or condemnation proceeds
from casualties or losses to Equipment, Fixtures and Real Estate shall be
applied pro rata to scheduled installments of the Term Loan and CapEx Loan, each
in inverse order of maturity. Neither the Revolving Loan Commitment nor the
Swing Line Loan Commitment shall be permanently reduced by the amount of any
such prepayments.
(e) No Implied Consent. Nothing in this Section 1.3 shall be
construed to constitute Agent's or any Lender's consent to any transaction that
is not permitted by other provisions of this Agreement or the other Loan
Documents.
1.4 Use of Proceeds. Borrower shall utilize the proceeds of
the Term Loan, the CapEx Loan, the Revolving Loan and the Swing Line Loan solely
for the Refinancing (and to pay any related transaction expenses), and for the
financing of Borrower's ordinary working capital, capital expenditure and
general corporate needs. Disclosure Schedule (1.4) contains a description of
Borrower's sources and uses of funds as of the Closing Date, including Loans to
be made on that date, and a funds flow memorandum detailing how funds from each
source are to be transferred to particular uses. The fees paid to anyone other
than the Lender in connection with the Refinancing shall not exceed $200,000 in
the aggregate on the Closing Date.
1.5 Interest and Applicable Margins.
-------------------------------
(a) Borrower shall pay interest to Agent, for the ratable
benefit of Lenders, in accordance with the various Loans being made by each
Lender, in arrears on each applicable Interest Payment Date, at the following
rates: (i) with respect to the Revolving Credit Advances, the Index Rate plus
the Applicable Revolver Index Margin per annum or, at the election of Borrower,
the applicable LIBOR Rate plus the Applicable Revolver LIBOR Margin per annum,
based on the aggregate Revolving Credit Advances outstanding from time to time;
(ii) with respect to the Term Loan, the Index Rate plus the Applicable Term Loan
Index Margin per annum or, at the election of Borrower, the applicable LIBOR
Rate plus the Applicable Term Loan LIBOR Margin per annum; (iii) with respect to
the CapEx Loan, the Index Rate plus the Applicable CapEx Loan Index Margin per
annum or, at the election of Borrower, the applicable LIBOR Rate plus the
Applicable CapEx Loan LIBOR Margin per annum; and (iv) with respect to the Swing
Line Loan, the Index Rate plus the Applicable Revolver Index Margin per annum.
The Applicable Margins are as follows:
Applicable Revolver Index Margin 1.75%
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Applicable Revolver LIBOR Margin 3.25%
Applicable Term Loan Index Margin 2.50%
Applicable Term Loan LIBOR Margin 4.00%
Applicable Capex Loan Index Margin 2.50%
Applicable Capex Loan LIBOR Margin 4.00%
(b) If any payment on any Loan becomes due and payable on a
day other than a Business Day, the maturity thereof will be extended to the next
succeeding Business Day (except as set forth in the definition of LIBOR Period)
and, with respect to payments of principal, interest thereon shall be payable at
the then applicable rate during such extension.
(c) All computations of Fees calculated on a per annum basis
and interest shall be made by Agent on the basis of a 360-day year, in each case
for the actual number of days occurring in the period for which such interest
and Fees are payable. The Index Rate is a floating rate determined for each day.
Each determination by Agent of an interest rate and Fees hereunder shall be
final, binding and conclusive on Borrower, absent manifest error.
(d) So long as an Event of Default has occurred and is
continuing under Section 8.1(a), (h) or (i), or so long as any other Default or
Event of Default has occurred and is continuing and at the election of Agent (or
upon the written request of Requisite Lenders) confirmed by written notice from
Agent to Borrower, the interest rates applicable to the Loans shall be increased
by two percentage points (2%) per annum above the rates of interest or the rate
of such Fees otherwise applicable hereunder ("Default Rate"), and all
outstanding Obligations shall bear interest at the Default Rate applicable to
such Obligations. Interest at the Default Rate shall accrue from the initial
date of such Default or Event of Default until that Default or Event of Default
is cured or waived and shall be payable upon demand.
(e) Subject to the conditions precedent set forth in Section
2.2, Borrower shall have the option to (i) request that any Revolving Credit
Advance be made as a LIBOR Loan, (ii) convert at any time all or any part of
outstanding Loans (other than the Swing Line Loan) from Index Rate Loans to
LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan, subject to
payment of LIBOR breakage costs in accordance with Section 1.13(b) if such
conversion is made prior to the expiration of the LIBOR Period applicable
thereto, or (iv) continue all or any portion of any Loan (other than the Swing
Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR Period
and the succeeding LIBOR Period of that continued Loan shall commence on the
first day after the last day of the LIBOR Period of the Loan to be continued.
Any Loan or group of Loans having the same proposed LIBOR Period to be made or
continued as, or converted into, a LIBOR Loan must be in a minimum amount of
$5,000,000 and integral multiples of $500,000 in excess of such amount. Any such
election must be made by 11:00 a.m. (New York time) on the 3rd Business Day
prior to (1) the date of any proposed Advance which is to bear interest at the
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LIBOR Rate, (2) the end of each LIBOR Period with respect to any LIBOR Loans to
be continued as such, or (3) the date on which Borrower wishes to convert any
Index Rate Loan to a LIBOR Loan for a LIBOR Period designated by Borrower in
such election. If no election is received with respect to a LIBOR Loan by 11:00
a.m. (New York time) on the 3rd Business Day prior to the end of the LIBOR
Period with respect thereto (or if a Default or an Event of Default has occurred
and is continuing or if the additional conditions precedent set forth in Section
2.2 shall not have been satisfied), that LIBOR Loan shall be converted to an
Index Rate Loan at the end of its LIBOR Period. Borrower must make such election
by notice to Agent in writing, by telecopy or overnight courier. In the case of
any conversion or continuation, such election must be made pursuant to a written
notice (a "Notice of Conversion/Continuation") in the form of Exhibit 1.5(e).
(f) Notwithstanding anything to the contrary set forth in this
Section 1.5, if a court of competent jurisdiction determines in a final order
that the rate of interest payable hereunder exceeds the highest rate of interest
permissible under law (the "Maximum Lawful Rate"), then so long as the Maximum
Lawful Rate would be so exceeded, the rate of interest payable hereunder shall
be equal to the Maximum Lawful Rate; provided, however, that if at any time
thereafter the rate of interest payable hereunder is less than the Maximum
Lawful Rate, Borrower shall continue to pay interest hereunder at the Maximum
Lawful Rate until such time as the total interest received by Agent, on behalf
of Lenders, is equal to the total interest that would have been received had the
interest rate payable hereunder been (but for the operation of this paragraph)
the interest rate payable since the Closing Date as otherwise provided in this
Agreement. Thereafter, interest hereunder shall be paid at the rate(s) of
interest and in the manner provided in Sections 1.5(a) through (e), unless and
until the rate of interest again exceeds the Maximum Lawful Rate, and at that
time this paragraph shall again apply. In no event shall the total interest
received by any Lender pursuant to the terms hereof exceed the amount that such
Lender could lawfully have received had the interest due hereunder been
calculated for the full term hereof at the Maximum Lawful Rate. If the Maximum
Lawful Rate is calculated pursuant to this paragraph, such interest shall be
calculated at a daily rate equal to the Maximum Lawful Rate divided by the
number of days in the year in which such calculation is made. If,
notwithstanding the provisions of this Section 1.5(f), a court of competent
jurisdiction shall finally determine that a Lender has received interest
hereunder in excess of the Maximum Lawful Rate, Agent shall, to the extent
permitted by applicable law, promptly apply such excess in the order specified
in Section 1.11 and thereafter shall refund any excess to Borrower or as a court
of competent jurisdiction may otherwise order.
1.6 Eligible Accounts. All of the Accounts owned by Borrower
and reflected in the most recent Borrowing Base Certificate delivered by
Borrower to Agent shall be "Eligible Accounts" for purposes of this Agreement,
except any Account to which any of the exclusionary criteria set forth below
applies. Agent shall have the right to establish, modify or eliminate Reserves
against Eligible Accounts from time to time in its reasonable credit judgment.
In addition, Agent reserves the right, at any time and from time to time after
the Closing Date, to adjust any of the criteria set forth below, to establish
new criteria and to adjust advance rates with respect to Eligible Accounts, in
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its reasonable credit judgment, subject to the approval of Supermajority
Revolving Lenders in the case of changes in advance rates which have the effect
of making more credit available. Eligible Accounts shall not include any Account
of Borrower:
(a) that does not arise from the sale of goods or the
performance of services by Borrower in the ordinary course of its business;
(b) (i) upon which Borrower's right to receive payment is not
absolute or is contingent upon the fulfillment of any condition whatsoever or
(ii) as to which Borrower is not able to bring suit or otherwise enforce its
remedies against the Account Debtor through judicial process or (iii) if the
Account represents a progress billing consisting of an invoice for goods sold or
used or services rendered pursuant to a contract under which the Account
Debtor's obligation to pay that invoice is subject to Borrower's completion of
further performance under such contract or is subject to the equitable lien of a
surety bond issuer;
(c) in the event that any defense, counterclaim, setoff or
dispute is asserted as to such Account;
(d) that is not a true and correct statement of bona fide
indebtedness incurred in the amount of the Account for merchandise sold to or
services rendered and accepted by the applicable Account Debtor;
(e) with respect to which an invoice, reasonably acceptable to
Agent in form and substance, has not been sent to the applicable Account Debtor;
(f) that (i) is not owned by Borrower or (ii) is subject to
any right, claim, security interest or other interest of any other Person, other
than Liens in favor of Agent, on behalf of itself and Lenders;
(g) that arises from a sale to any director, officer, other
employee or Affiliate of any Credit Party, or to any entity that has any common
officer or director with any Credit Party;
(h) that is the obligation of an Account Debtor that is the
United States government or a political subdivision thereof, or any state,
county or municipality or department, agency or instrumentality thereof unless
Agent, in its sole discretion, has agreed to the contrary in writing and
Borrower, if necessary or desirable, has complied with respect to such
obligation with the Federal Assignment of Claims Act of 1940, or any applicable
state, county or municipal law restricting assignment thereof;
(i) that is the obligation of an Account Debtor located in a
foreign country other than Canada (excluding the province of Newfoundland, the
Northwest Territories and the Territory of Nunavit) unless payment thereof is
assured by a letter of credit assigned and delivered to Agent, reasonably
satisfactory to Agent as to form, amount and issuer;
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(j) to the extent Borrower or any Subsidiary thereof is liable
for goods sold or services rendered by the applicable Account Debtor to Borrower
or any Subsidiary thereof but only to the extent of the potential offset;
(k) that arises with respect to goods that are delivered on a
xxxx-and-hold, cash-on-delivery basis or placed on consignment, guaranteed sale
or other terms by reason of which the payment by the Account Debtor is or may be
conditional;
(l) that is in default; provided, that, without limiting the
generality of the foregoing, an Account shall be deemed in default upon the
occurrence of any of the following:
(i) the Account is not paid within the earlier of: 60
days following its due date or 90 days following its original invoice date;
(ii) the Account Debtor obligated upon such Account
suspends business, makes a general assignment for the benefit of creditors or
fails to pay its debts generally as they come due; or
(iii) a petition is filed by or against any Account
Debtor obligated upon such Account under any bankruptcy law or any other
federal, state or foreign (including any provincial) receivership, insolvency
relief or other law or laws for the relief of debtors;
(m) that is the obligation of an Account Debtor if 50% or more
of the Dollar amount of all Accounts owing by that Account Debtor are ineligible
under the other criteria set forth in this Section 1.6;
(n) as to which Agent's Lien thereon, on behalf of itself and
Lenders, is not a first priority perfected Lien;
(o) as to which any of the representations or warranties in
the Loan Documents are untrue;
(p) to the extent such Account is evidenced by a judgment,
Instrument or Chattel Paper;
(q) to the extent such Account exceeds any credit limit
established by Agent, in its reasonable credit judgment;
(r) to the extent that such Account, together with all other
Accounts owing by such Account Debtor and its Affiliates as of any date of
determination exceed 10% of all Eligible Accounts, except for such Account
Debtor(s) approved in advance by Agent, for which the limit shall be 15%;
(s) that is payable in any currency other than Dollars; or
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(t) that is otherwise unacceptable to Agent in its reasonable
credit judgment.
1.7 Intentionally Omitted.
---------------------
1.8 Cash Management Systems. On or prior to the Closing Date,
Borrower will establish and will maintain until the Termination Date, the cash
management systems described in Annex B (the "Cash Management Systems").
1.9 Fees.
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(a) Borrower shall pay to GE Capital, individually, the Fees
specified in the GE Capital Fee Letter, at the times specified for payment
therein.
(b) As additional compensation for the Revolving Lenders,
Borrower shall pay to Agent, for the ratable benefit of such Lenders, in
arrears, on the first Business Day of each month prior to the Commitment
Termination Date and on the Commitment Termination Date, a Fee for Borrower's
non-use of available funds in an amount equal to one half of one percent (0.50%)
per annum (calculated on the basis of a 360 day year for actual days elapsed)
multiplied by the difference between (x) the Maximum Revolver Amount (as it may
be reduced from time to time) and (y) the average for the period of the daily
closing balances of the aggregate Revolving Loan and the Swing Line Loan
outstanding during the period for which such Fee is due.
(c) As additional compensation for the CapEx Lenders, Borrower
shall pay to Agent, for the ratable benefit of such Lenders, in arrears, on the
first Business Day of each month prior to the Commitment Termination Date and on
the Commitment Termination Date, a Fee for Borrower's non-use of available funds
in an amount equal to one half of one percent (0.50%) per annum (calculated on
the basis of a 360 day year for actual days elapsed) multiplied by the
difference between (x) the Maximum CapEx Amount (as it may be reduced from time
to time) and (y) the average for the period of the daily closing balances of the
CapEx Loan outstanding during the period for which such Fee is due.
(d) If Borrower pays after acceleration or prepays all or any
portion of the Term Loan or CapEx Loan or reduces or terminates the Revolving
Loan Commitment or the CapEx Loan Commitment, whether voluntarily or
involuntarily and whether before or after acceleration of the Obligations, or if
any of the Commitments are otherwise terminated, Borrower shall pay to Agent,
for the benefit of Lenders as liquidated damages and compensation for the costs
of being prepared to make funds available hereunder an amount equal to the
Applicable Percentage (as defined below) multiplied by the sum of (i) the
principal amount of the Term Loan or CapEx Loan paid after acceleration or
prepaid, (ii) the amount of the reduction of the Revolving Loan Commitment and
(iii) the reduction of the unused portion of the CapEx Loan Commitment. As used
herein, the term "Applicable Percentage" shall mean (x) three percent (3%), in
the case of a prepayment or reduction on or prior to the first anniversary of
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the Closing Date, (y) two percent (2%), in the case of a prepayment or reduction
after the first anniversary of the Closing Date but on or prior to the second
anniversary thereof, and (z) one percent (1%), in the case of a prepayment or
reduction after the second anniversary of the Closing Date but prior to the
third anniversary thereof. The Credit Parties agree that the Applicable
Percentages are a reasonable calculation of Lenders' lost profits in view of the
difficulties and impracticality of determining actual damages resulting from an
early termination of the Commitments. Notwithstanding the foregoing, (i) no
prepayment fee shall be payable by Borrower upon a mandatory prepayment made
pursuant to Sections 1.3(b) or 1.16(c); provided that Borrower does not
permanently reduce or terminate the Revolving Loan Commitment upon any such
prepayment and, in the case of prepayments made pursuant to Sections 1.3(b)(ii),
(b)(iii) or (b)(iv), the transaction giving rise to the applicable prepayment is
expressly permitted under Section 6 and (ii) the Applicable Percentage shall be
reduced to one percent (1%) in the first two years after the Closing Date if
Borrower terminates the Revolving Loan Commitment and the CapEx Loan Commitment
and prepays all Loans in connection with a sale of all of the Stock of Borrower
or all or substantially all of the assets of Borrower.
1.10 Receipt of Payments. Borrower shall make each payment
under this Agreement not later than 2:00 p.m. (New York time) on the day when
due in immediately available funds in Dollars to the Collection Account. For
purposes of computing interest and Fees, all payments shall be deemed received
on the Business Day immediately following the Business Day on which immediately
available funds therefor are received in the Collection Account prior to 2:00
p.m. New York time. Payments received after 2:00 p.m. New York time on any
Business Day or on a day that is not a Business Day shall be deemed to have been
received on the following Business Day.
1.11 Application and Allocation of Payments.
--------------------------------------
(a) So long as no Default or Event of Default has occurred and
is continuing, (i) payments consisting of proceeds of Accounts received in the
ordinary course of business shall be applied, first, to the Swing Line Loan and,
second, the Revolving Loan; (ii) payments matching specific scheduled payments
then due shall be applied to those scheduled payments; (iii) voluntary
prepayments shall be applied as determined by Borrower, subject to the
provisions of Section 1.3(a); and (iv) mandatory prepayments shall be applied as
set forth in Sections 1.3(c) and 1.3(d). All payments and prepayments applied to
a particular Loan shall be applied ratably to the portion thereof held by each
Lender as determined by its Pro Rata Share. As to any other payment, and as to
all payments made when a Default or Event of Default has occurred and is
continuing or following the Commitment Termination Date, Borrower hereby
irrevocably waives the right to direct the application of any and all payments
received from or on behalf of Borrower, and Borrower hereby irrevocably agrees
that Agent shall have the continuing exclusive right to apply any and all such
payments against the Obligations of Borrower as Agent may deem advisable
notwithstanding any previous entry by Agent in the Loan Account or any other
books and records. In the absence of a specific determination by Agent with
respect thereto, payments shall be applied in the following order: (1) to Fees
and Agent's expenses reimbursable hereunder; (2) to interest on the Swing Line
Loan; (3) to principal payments on the Swing Line Loan; (4) to interest on the
14
other Loans, ratably in proportion to the interest accrued as to each Loan; (5)
to principal payments on the other Loans, ratably to the aggregate, combined
principal balance of the other Loans; and (6) to all other Obligations,
including expenses of Lenders to the extent reimbursable under Section 11.3.
(b) Agent is authorized to, and at its sole election may,
charge to the Revolving Loan balance on behalf of Borrower and cause to be paid
all Fees, expenses, Charges, costs (including insurance premiums in accordance
with Section 5.4(a)) and interest and principal, other than principal of the
Revolving Loan, owing by Borrower under this Agreement or any of the other Loan
Documents if and to the extent Borrower fails to pay promptly any such amounts
as and when due, even if the amount of such charges would exceed Borrowing
Availability at such time. At Agent's option and to the extent permitted by law,
any charges so made shall constitute part of the Revolving Loan hereunder.
1.12 Loan Account and Accounting. Agent shall maintain a loan
account (the "Loan Account") on its books to record: all Advances and the Term
Loan, all payments made by Borrower, and all other debits and credits as
provided in this Agreement with respect to the Loans or any other Obligations.
All entries in the Loan Account shall be made in accordance with Agent's
customary accounting practices as in effect from time to time. The balance in
the Loan Account, as recorded on Agent's most recent printout or other written
statement, shall, absent manifest error, be presumptive evidence of the amounts
due and owing to Agent and Lenders by Borrower; provided that any failure to so
record or any error in so recording shall not limit or otherwise affect
Borrower's duty to pay the Obligations. Agent shall render to Borrower a monthly
accounting of transactions with respect to the Loans setting forth the balance
of the Loan Account. Unless Borrower notifies Agent in writing of any objection
to any such accounting (specifically describing the basis for such objection),
within 30 days after the date thereof, each and every such accounting shall
(absent manifest error) be deemed final, binding and conclusive on Borrower in
all respects as to all matters reflected therein. Only those items expressly
objected to in such notice shall be deemed to be disputed by Borrower.
Notwithstanding any provision herein contained to the contrary, any Lender may
elect (which election may be revoked) to dispense with the issuance of Notes to
that Lender and may rely on the Loan Account as evidence of the amount of
Obligations from time to time owing to it.
1.13 Indemnity.
---------
(a) Each Credit Party that is a signatory hereto shall jointly
and severally indemnify and hold harmless each of Agent, Lenders and their
respective Affiliates, and each such Person's respective officers, directors,
employees, attorneys, agents and representatives (each, an "Indemnified
Person"), from and against any and all suits, actions, proceedings, claims,
damages, losses, liabilities and expenses (including reasonable attorneys' fees
and disbursements and other costs of investigation or defense, including those
incurred upon any appeal) that may be instituted or asserted against or incurred
by any such Indemnified Person as the result of credit having been extended,
suspended or terminated under this Agreement and the other Loan Documents and
the administration of such credit, and in connection with or arising out of the
15
transactions contemplated hereunder and thereunder and any
actions or failures to act in connection therewith, including any and all
Environmental Liabilities and legal costs and expenses arising out of or
incurred in connection with disputes between or among any parties to any of the
Loan Documents (collectively, "Indemnified Liabilities"); provided, that no such
Credit Party shall be liable for any indemnification to an Indemnified Person to
the extent that any such suit, action, proceeding, claim, damage, loss,
liability or expense results from that Indemnified Person's gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the LIBOR Rate option on the
terms provided herein, if (i) any LIBOR Loans are repaid in whole or in part
prior to the last day of any applicable LIBOR Period (whether that repayment is
made pursuant to any provision of this Agreement or any other Loan Document or
occurs as a result of acceleration, by operation of law or otherwise); (ii)
Borrower shall default in payment when due of the principal amount of or
interest on any LIBOR Loan; (iii) Borrower shall refuse to accept any borrowing
of, or shall request a termination of, any borrowing of, conversion into or
continuation of, LIBOR Loans after Borrower has given notice requesting the same
in accordance herewith; or (iv) Borrower shall fail to make any prepayment of a
LIBOR Loan after Borrower has given a notice thereof in accordance herewith,
then Borrower shall indemnify and hold harmless each Lender from and against all
losses, costs and expenses resulting from or arising from any of the foregoing.
Such indemnification shall include any loss (including loss of margin) or
expense arising from the reemployment of funds obtained by it or from fees
payable to terminate deposits from which such funds were obtained. For the
purpose of calculating amounts payable to a Lender under this subsection, each
Lender shall be deemed to have actually funded its relevant LIBOR Loan through
the purchase of a deposit bearing interest at the LIBOR Rate in an amount equal
to the amount of that LIBOR Loan and having a maturity comparable to the
relevant LIBOR Period; provided, that each Lender may fund each of its LIBOR
Loans in any manner it sees fit, and the foregoing assumption shall be utilized
only for the calculation of amounts payable under this subsection. This covenant
shall survive the termination of this Agreement and the payment of the Notes and
all other amounts payable hereunder. As promptly as practicable under the
circumstances, each Lender shall provide Borrower with its written calculation
of all amounts payable pursuant to this Section 1.13(b), and such calculation
shall be binding on the parties hereto unless Borrower shall object in writing
within 10 Business Days of receipt thereof, specifying the basis for such
objection in detail.
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1.14 Access. Each Credit Party that is a party hereto shall,
during normal business hours, from time to time upon one Business Day's prior
notice as frequently as Agent determines to be appropriate: (a) provide Agent
and any of its officers, employees and agents access to its properties,
facilities, advisors and employees (including officers) of each Credit Party and
to the Collateral, (b) permit Agent, and any of its officers, employees and
agents, to inspect, audit and make extracts from any Credit Party's books and
records, and (c) permit Agent, and its officers, employees and agents, to
inspect, review, evaluate and make test verifications and counts of the
Accounts, Inventory and other Collateral of any Credit Party. If a Default or
Event of Default has occurred and is continuing or if access is necessary to
preserve or protect the Collateral as determined by Agent, each such Credit
Party shall provide such access to Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Event of Default has
occurred and is continuing, Borrower shall provide Agent and each Lender with
access to their suppliers and customers. Each Credit Party shall make available
to Agent and its counsel, as quickly as is possible under the circumstances,
originals or copies of all books and records that Agent may reasonably request.
Each Credit Party shall deliver any document or instrument necessary for Agent,
as it may from time to time reasonably request, to obtain records from any
service bureau or other Person that maintains records for such Credit Party, and
shall maintain duplicate records or supporting documentation on media, including
computer tapes and discs owned by such Credit Party. Agent will give Lenders at
least 5 days' prior written notice of regularly scheduled audits.
Representatives of other Lenders may accompany Agent's representatives on
regularly scheduled audits at no charge to Borrower.
1.15 Taxes.
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(a) Any and all payments by Borrower hereunder (including any
payments made pursuant to Section 1.13) or under the Notes shall be made, in
accordance with this Section 1.15, free and clear of and without deduction for
any and all present or future Taxes. If Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder (including any
sum payable pursuant to Section 1.13) or under the Notes, (i) the sum payable
shall be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 1.15) Agent or Lenders, as applicable, receive an amount
equal to the sum they would have received had no such deductions been made, (ii)
Borrower shall make such deductions, and (iii) Borrower shall pay the full
amount deducted to the relevant taxing or other authority in accordance with
applicable law. Within 30 days after the date of any payment of Taxes, Borrower
shall furnish to Agent the original or a certified copy of a receipt evidencing
payment thereof. Agent and Lenders shall not be obligated to return or refund
any amounts received pursuant to this Section.
(b) Each Credit Party that is a signatory hereto shall jointly
and severally indemnify and, within 10 days of demand therefor, pay Agent and
each Lender for the full amount of Taxes (including any Taxes imposed by any
jurisdiction on amounts payable under this Section 1.15) paid by Agent or such
Lender, as appropriate, and any liability (including penalties, interest and
17
expenses) arising therefrom or with respect thereto, whether or not such Taxes
were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction
outside the United States (a "Foreign Lender") as to which payments to be made
under this Agreement or under the Notes are exempt from United States
withholding tax under an applicable statute or tax treaty shall provide to
Borrower and Agent a properly completed and executed IRS Form W-8ECI or Form
W-8BEN or other applicable form, certificate or document prescribed by the IRS
or the United States certifying as to such Foreign Lender's entitlement to such
exemption (a "Certificate of Exemption"). Any foreign Person that seeks to
become a Lender under this Agreement shall provide a Certificate of Exemption to
Borrower and Agent prior to becoming a Lender hereunder. No foreign Person may
become a Lender hereunder if such Person fails to deliver a Certificate of
Exemption in advance of becoming a Lender.
1.16 Capital Adequacy; Increased Costs; Illegality.
---------------------------------------------
(a) If any Lender shall have determined that any law, treaty,
governmental (or quasi-governmental) rule, regulation, guideline or order
regarding capital adequacy, reserve requirements or similar requirements or
compliance by any Lender with any request or directive regarding capital
adequacy, reserve requirements or similar requirements (whether or not having
the force of law), in each case, adopted after the Closing Date, from any
central bank or other Governmental Authority increases or would have the effect
of increasing the amount of capital, reserves or other funds required to be
maintained by such Lender and thereby reducing the rate of return on such
Lender's capital as a consequence of its obligations hereunder, then Borrower
shall from time to time upon demand by such Lender (with a copy of such demand
to Agent) pay to Agent, for the account of such Lender, additional amounts
sufficient to compensate such Lender for such reduction. A certificate as to the
amount of that reduction and showing the basis of the computation thereof
submitted by such Lender to Borrower and to Agent shall, absent manifest error,
be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in
any law or regulation (or any change in the interpretation thereof) or (ii) the
compliance with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law), in each case
adopted after the Closing Date, there shall be any increase in the cost to any
Lender of agreeing to make or making, funding or maintaining any Loan, then
Borrower shall from time to time, upon demand by such Lender (with a copy of
such demand to Agent), pay to Agent for the account of such Lender additional
amounts sufficient to compensate such Lender for such increased cost. A
certificate as to the amount of such increased cost, submitted to Borrower and
to Agent by such Lender, shall be conclusive and binding on Borrower for all
purposes, absent manifest error. Each Lender agrees that, as promptly as
practicable after it becomes aware of any circumstances referred to above which
would result in any such increased cost, the affected Lender shall, to the
extent not inconsistent with such Lender's internal policies of general
application, use reasonable commercial efforts to minimize costs and expenses
incurred by it and payable to it by Borrower pursuant to this Section 1.16(b).
18
(c) Notwithstanding anything to the contrary contained herein,
if the introduction of or any change in any law or regulation (or any change in
the interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any LIBOR Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
LIBOR Loan at another branch or office of that Lender without, in that Lender's
opinion, adversely affecting it or its Loans or the income obtained therefrom,
on notice thereof and demand therefor by such Lender to Borrower through Agent,
(i) the obligation of such Lender to agree to make or to make or to continue to
fund or maintain LIBOR Loans shall terminate and (ii) Borrower shall forthwith
prepay in full all outstanding LIBOR Loans owing by Borrower to such Lender,
together with interest accrued thereon, unless Borrower, within 5 Business Days
after the delivery of such notice and demand, converts all LIBOR Loans into
Index Rate Loans.
(d) Within 15 days after receipt by Borrower of written notice
and demand from any Lender (an "Affected Lender") for payment of additional
amounts or increased costs as provided in Sections 1.15(a), 1.16(a) or 1.16(b),
Borrower may, at its option, notify Agent and such Affected Lender of its
intention to replace the Affected Lender. So long as no Default or Event of
Default has occurred and is continuing, Borrower, with the consent of Agent, may
obtain, at Borrower's expense, a replacement Lender ("Replacement Lender") for
the Affected Lender, which Replacement Lender must be reasonably satisfactory to
Agent. If Borrower obtains a Replacement Lender within 90 days following notice
of their intention to do so, the Affected Lender must sell and assign its Loans
and Commitments to such Replacement Lender for an amount equal to the principal
balance of all Loans held by the Affected Lender and all accrued interest and
Fees with respect thereto through the date of such sale; provided, that Borrower
shall have reimbursed such Affected Lender for the additional amounts or
increased costs that it is entitled to receive under this Agreement through the
date of such sale and assignment. Notwithstanding the foregoing, Borrower shall
not have the right to obtain a Replacement Lender if the Affected Lender
rescinds its demand for increased costs or additional amounts within 15 days
following its receipt of Borrower's notice of intention to replace such Affected
Lender. Furthermore, if Borrower gives a notice of intention to replace and does
not so replace such Affected Lender within 90 days thereafter, Borrower's rights
under this Section 1.16(d) shall terminate and Borrower shall promptly pay all
increased costs or additional amounts demanded by such Affected Lender pursuant
to Sections 1.15(a), 1.16(a) and 1.16(b).
1.17 Single Loan. All Loans to Borrower and all of the other
Obligations of Borrower arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Borrower secured, until the
Termination Date, by all of the Collateral.
2. CONDITIONS PRECEDENT
2.1 Conditions to the Initial Loans. No Lender shall be
obligated to make any Loan on the Closing Date, or to take, fulfill, or perform
19
any other action hereunder, until the following conditions have been satisfied
or provided for in a manner satisfactory to Agent, or waived in writing by Agent
and Lenders:
(a) Credit Agreement; Loan Documents. This Agreement or
counterparts hereof shall have been duly executed by, and delivered to,
Borrower, Agent and Lenders; and Agent shall have received such documents,
instruments, agreements and legal opinions as Agent shall reasonably request in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, including all those listed in the Closing Checklist attached
hereto as Annex C, each in form and substance reasonably satisfactory to Agent.
(b) Repayment of Prior Lender Obligations. (i) Agent shall
have received a fully executed original of a pay-off letter reasonably
satisfactory to Agent confirming that all of the Prior Lender Obligations will
be repaid in full from the proceeds of the Term Loan and the initial Revolving
Credit Advance and all Liens upon any of the property of Borrower or any of its
Subsidiaries in favor of Prior Lender shall be terminated by Prior Lender
immediately upon such payment; and (ii) all letters of credit issued or
guaranteed by Prior Lender shall have been cash collateralized, as mutually
agreed upon by Agent, Borrower and Prior Lender.
(c) Approvals. Agent shall have received (i) satisfactory
evidence that the Credit Parties have obtained all required consents and
approvals of all Persons including all requisite Governmental Authorities, to
the execution, delivery and performance of this Agreement and the other Loan
Documents and the consummation of the Related Transactions or (ii) an officer's
certificate in form and substance reasonably satisfactory to Agent affirming
that no such consents or approvals are required.
(d) Opening Availability. The Eligible Accounts supporting the
initial Revolving Credit Advance and the amount of the Reserves to be
established on the Closing Date shall be sufficient in value, as determined by
Agent, to provide Borrower with Borrowing Availability, after giving effect to
the initial Revolving Credit Advance made to Borrower and the consummation of
the Related Transactions (on a pro forma basis, with trade payables being paid
consistently with Borrower's historical practice, and expenses and liabilities
being paid in the ordinary course of business and without acceleration of sales)
of at least $3,500,000.
(e) Payment of Fees. Borrower shall have paid the Fees
required to be paid on the Closing Date in the respective amounts specified in
Section 1.9 (including the Fees specified in the GE Capital Fee Letter), and
shall have reimbursed Agent for all fees, costs and expenses of closing
presented as of the Closing Date.
(f) Capital Structure: Other Indebtedness. The capital
structure of each Credit Party and the terms and conditions of all Indebtedness
of each Credit Party shall be acceptable to Agent in its sole discretion,
including without limitation, that the maturity of the Subordinated Notes shall
be extended to no earlier than 91 days after the Commitment Termination Date,
with no payments of interest or principal prior to such extended maturity date.
20
(g) Physical Inventory. Agent shall have completed a physical
inventory of Borrower's Tool Inventory and Parts Inventory, the results of which
must be satisfactory to Agent;
(h) Due Diligence. Agent shall have completed its business and
legal due diligence, including a roll forward of its previous Collateral audit,
with results reasonably satisfactory to Agent.
2.2 Further Conditions to Each Advance. Except as otherwise
expressly provided herein, no Lender shall be obligated to fund any Advance,
convert or continue any Loan as a LIBOR Loan, if, as of the date thereof:
(a) any representation or warranty by any Credit Party
contained herein or in any other Loan Document is untrue or incorrect as of such
date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted or
expressly contemplated by this Agreement and Agent or Requisite Revolving
Lenders or Requisite CapEx Lenders, as the case may be, have determined not to
make such Advance, convert or continue any Loan as LIBOR Loan as a result of the
fact that such warranty or representation is untrue or incorrect;
(b) any event or circumstance having a Material Adverse Effect
has occurred since the date hereof as determined by the Requisite Revolving
Lenders or Requisite CapEx Lenders, as the case may be, and Agent or Requisite
Revolving Lenders or Requisite CapEx Lenders, as the case may be, have
determined not to make such Advance, convert or continue any Loan as a LIBOR
Loan as a result of the fact that such event or circumstance has occurred;
(c) any Default or Event of Default has occurred and is
continuing or would result after giving effect to any Advance, and Agent or
Requisite Revolving Lenders or Requisite CapEx Lenders, as the case may be,
shall have determined not to make any Advance, convert or continue any Loan as a
LIBOR Loan as a result of that Default or Event of Default; or
(d) after giving effect to any Revolving Advance, the
outstanding principal amount of the aggregate Revolving Loan would exceed the
lesser of the Borrowing Base and the Maximum Revolver Amount, in each case, less
the then outstanding principal amount of the Swing Line Loan.
The request and acceptance by Borrower of the proceeds of any Advance or the
conversion or continuation of any Loan into, or as, a LIBOR Loan shall be deemed
to constitute, as of the date thereof, (i) a representation and warranty by
Borrower that the conditions in this Section 2.2 have been satisfied and (ii) a
reaffirmation by Borrower of the granting and continuance of Agent's Liens, on
behalf of itself and Lenders, pursuant to the Collateral Documents.
21
2.3 Further Conditions to Each CapEx Advance. Except as
otherwise expressly provided herein, and in addition to the conditions set forth
in Section 2.2, no CapEx Lender shall be obligated to fund any CapEx Advance
unless, as of the date thereof:
(a) the CapEx Lenders shall have received from Borrower a
certificate executed by the Chief Financial Officer of Borrower that (A)
describes in detail the Equipment to be financed with the proceeds of such CapEx
Advance, (B) sets forth the "hard" and "soft" costs of such Equipment, including
without limitation the purchase price for such Equipment, as well as the taxes,
transportation costs, installation costs and licensing costs associated
therewith, (C) demonstrates that after giving pro forma effect to the requested
CapEx Advance, as if such CapEx Advance (and any associated interest expense and
principal repayments) had been made on the first day of the four fiscal quarter
period ending as of the most recent Fiscal Quarter for which Borrower is
required under this Agreement to have delivered Financial Statements to the
Lenders, Borrower shall have a Fixed Charge Coverage Ratio of at least 1.5:1.0;
(b) the CapEx Lenders shall have received an appraisal in form
and substance satisfactory to the Agent from an Acceptable Appraiser of the
Equipment to be financed with the proceeds of such CapEx Advance setting forth
the Forced Liquidation Value of such Equipment; provided, further, that with
respect to new Equipment purchased from a vendor that is not an Affiliate, the
Agent shall accept a "desktop" appraisal of such Equipment from an Aceptable
Appraiser.
(c) the requested CapEx Advance does not exceed the lesser of
(i) 70%, or such lower percentage as the Agent shall determine in its sole
discretion from time to time, of the purchase price of the Equipment to be
financed with the proceeds of such CapEx Advance (excluding all taxes,
transportation costs, installation costs, licensing costs and all other "soft"
costs) and (ii) 100% of the Forced Liquidation Value reported in the appraisal
described in subsection (b) above;
(d) the CapEx Lenders shall have received from Borrower such
other information and documents relating to such Equipment as the CapEx Lenders
shall have requested; and
(e) the CapEx Lenders shall have determined in their sole
discretion that the Equipment proposed by Borrower to be financed with the
proceeds of the CapEx Advance is Eligible CapEx Equipment, which determination
shall be evidenced by the funding of the requested CapEx Advance.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans, the Credit Parties
executing this Agreement, jointly and severally, make the following
representations and warranties to Agent and each Lender with respect to all
Credit Parties, each and all of which shall survive the execution and delivery
of this Agreement.
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3.1 Corporate Existence; Compliance with Law. Each Credit
Party (a) is a corporation, limited liability company or limited partnership
duly organized, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation or organization set forth in Disclosure
Schedule (3.1); (b) is duly qualified to conduct business and is in good
standing in each other jurisdiction where its ownership or lease of property or
the conduct of its business requires such qualification, except where the
failure to be so qualified would not result in exposure to losses, damages or
liabilities in excess of $50,000; (c) has the requisite power and authority and
the legal right to own, pledge, mortgage or otherwise encumber and operate its
properties, to lease the property it operates under lease and to conduct its
business as now, heretofore and proposed to be conducted; (d) subject to
specific representations regarding Environmental Laws, has all material
licenses, permits, consents or approvals from or by, and has made all material
filings with, and has given all material notices to, all Governmental
Authorities having jurisdiction, to the extent required for such ownership,
operation and conduct; (e) is in compliance with its charter and bylaws or
partnership or operating agreement, as applicable; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable provisions of law, except where
the failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
3.2 Executive Offices, Collateral Locations, FEIN,
Organizational Number. As of the Closing Date, the current location of each
Credit Party's chief executive office and the warehouses and premises at which
any Collateral is located are set forth in Disclosure Schedule (3.2), and,
except as set forth in Disclosure Schedule (3.2) none of such locations has
changed within the 12 months preceding the Closing Date. In addition, Disclosure
Schedule (3.2) lists the federal employer identification number and
organizational number of each Credit Party.
3.3 Corporate Power, Authorization, Enforceable Obligations.
The execution, delivery and performance by each Credit Party of the Loan
Documents to which it is a party and the creation of all Liens provided for
therein: (a) are within such Person's power; (b) have been duly authorized by
all necessary corporate, limited liability company or limited partnership
action; (c) do not contravene any provision of such Person's charter, bylaws or
partnership or operating agreement as applicable; (d) do not violate any law or
regulation, or any order or decree of any court or Governmental Authority; (e)
do not conflict with or result in the breach or termination of, constitute a
default under or accelerate or permit the acceleration of any performance
required by, any indenture, mortgage, deed of trust, lease, agreement or other
instrument to which such Person is a party or by which such Person or any of its
property is bound; (f) do not result in the creation or imposition of any Lien
upon any of the property of such Person other than those in favor of Agent, on
behalf of itself and Lenders, pursuant to the Loan Documents; and (g) do not
require the consent or approval of any Governmental Authority or any other
Person, except those referred to in Section 2.1(c), all of which will have been
23
duly obtained, made or complied with prior to the Closing Date. Each of the Loan
Documents shall be duly executed and delivered by each Credit Party that is a
party thereto and each such Loan Document shall constitute a legal, valid and
binding obligation of such Credit Party enforceable against it in accordance
with its terms.
3.4 Financial Statements and Projections. Except for the
Projections and the Fair Salable Balance Sheet, all Financial Statements
concerning Borrower that are referred to below have been prepared in accordance
with GAAP consistently applied throughout the periods covered (except as
disclosed therein and except, with respect to unaudited Financial Statements,
for the absence of footnotes, a statement of owners' equity and normal year-end
audit adjustments) and present fairly in all material respects the financial
position of the Persons covered thereby as at the dates thereof and the results
of their operations and cash flows for the periods then ended.
(a) Financial Statements. The following Financial Statements
attached hereto as Disclosure Schedule (3.4(a)) have been delivered on the date
hereof:
(i) The audited balance sheets at December 31, 1999
and 2000 and the related statements of income and cash flows of Borrower for the
Fiscal Years then ended, certified by the Chief Financial Officer of Borrower.
(ii) The unaudited balance sheet(s) at June 30, 2001
and the related statement(s) of income and cash flows of Borrower for the two
Fiscal Quarters then ended.
(b) Pro Forma. The Pro Forma delivered on the date hereof and
attached hereto as Disclosure Schedule (3.4(b)) was prepared by Borrower giving
pro forma effect to the Related Transactions, was based on the unaudited balance
sheets of Borrower dated June 30, 2001, and was prepared in accordance with
GAAP, with only such adjustments thereto as would be required in accordance with
GAAP.
(c) Projections. The Projections delivered on the date hereof
and attached hereto as Disclosure Schedule (3.4(c)) have been prepared by
Borrower in light of the past operations of its businesses, but including future
payments of known contingent liabilities reflected on the Fair Salable Balance
Sheet, and reflect projections for the 2001 year period beginning on January 1,
2001 on a month-by-month basis for Fiscal Year 2001 and 2002. The Projections
are based upon estimates and assumptions stated therein, all of which Borrower
believes to be reasonable and fair in light of current conditions and current
facts known to Borrower and, as of the Closing Date, reflect Borrower's good
faith and reasonable estimates of the future financial performance of Borrower
and of the other information projected therein for the period set forth therein.
(d) Fair Salable Balance Sheet. The Fair Salable Balance Sheet
delivered on the date hereof and attached hereto as Disclosure Schedule (3.4(d))
was prepared by Borrower on the same basis as the Pro Forma, except that
Borrower's assets are set forth therein at their fair salable values on a going
concern basis and the liabilities set forth therein include all contingent
liabilities of Borrower stated at the reasonably estimated present values
thereof.
24
3.5 Material Adverse Effect. Between December 31, 2000 and the
Closing Date: (a) no Credit Party has incurred any obligations, contingent or
noncontingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments that are not reflected in the Pro Forma and
that, alone or in the aggregate, could reasonably be expected to have a Material
Adverse Effect, (b) no contract, lease or other agreement or instrument has been
entered into by any Credit Party or has become binding upon any Credit Party's
assets and no law or regulation applicable to any Credit Party has been adopted
that has had or could reasonably be expected to have a Material Adverse Effect,
and (c) no Credit Party is in default and to the best of Borrower's knowledge no
third party is in default under any material contract, lease or other agreement
or instrument, that alone or in the aggregate could reasonably be expected to
have a Material Adverse Effect. Between December 31, 2000 and the Closing Date
no event has occurred, that alone or together with other events, could
reasonably be expected to have a Material Adverse Effect.
3.6 Ownership of Property; Liens. As of the Closing Date, the
real estate ("Real Estate") listed in Disclosure Schedule (3.6) constitutes all
of the real property owned, leased, subleased, or used by any Credit Party. Each
Credit Party owns good and marketable fee simple title to all of its owned Real
Estate, and valid and marketable leasehold interests in all of its leased Real
Estate, all as described on Disclosure Schedule (3.6), and copies of all such
leases or a summary of terms thereof reasonably satisfactory to Agent have been
delivered to Agent. Disclosure Schedule (3.6) further describes any Real Estate
with respect to which any Credit Party is a lessor, sublessor or assignor as of
the Closing Date. Each Credit Party also has good and marketable title to, or
valid leasehold interests in, all of its personal property and assets. As of the
Closing Date, none of the properties and assets of any Credit Party are subject
to any Liens other than Permitted Encumbrances, and there are no facts,
circumstances or conditions known to any Credit Party that may result in any
Liens (including Liens arising under Environmental Laws) other than Permitted
Encumbrances. Each Credit Party has received all deeds, assignments, waivers,
consents, nondisturbance and attornment or similar agreements, bills of sale and
other documents, and has duly effected all recordings, filings and other actions
necessary to establish, protect and perfect such Credit Party's right, title and
interest in and to all such Real Estate and other properties and assets.
Disclosure Schedule (3.6) also describes any purchase options, rights of first
refusal or other similar contractual rights pertaining to any Real Estate. As of
the Closing Date, no portion of any Credit Party's Real Estate has suffered any
material damage by fire or other casualty loss that has not heretofore been
repaired and restored in all material respects to its original condition or
otherwise remedied. As of the Closing Date, all material permits required to
have been issued or appropriate to enable the Real Estate to be lawfully
occupied and used for all of the purposes for which it is currently occupied and
used have been lawfully issued and are in full force and effect.
3.7 Labor Matters. As of the Closing Date (a) no strikes or
other material labor disputes against any Credit Party are pending or, to any
Credit Party's knowledge, threatened; (b) hours worked by and payment made to
employees of each Credit Party comply with the Fair Labor Standards Act and each
other federal, state, local or foreign law applicable to such matters; (c) all
25
payments due from any Credit Party for employee health and welfare insurance
have been paid or accrued as a liability on the books of such Credit Party; (d)
except as set forth in Disclosure Schedule (3.7), no Credit Party is a party to
or bound by any collective bargaining agreement, management agreement,
consulting agreement, employment agreement, bonus, restricted stock, stock
option, or stock appreciation plan or agreement or any similar plan, agreement
or arrangement (and true and complete copies of any agreements described on
Disclosure Schedule (3.7) have been delivered to Agent); (e) there is no
organizing activity involving any Credit Party pending or, to any Credit Party's
knowledge, threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Credit Party's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Credit Party has made a pending demand for
recognition; and (g) except as set forth in Disclosure Schedule (3.7), there are
no material complaints or charges against any Credit Party pending or, to the
knowledge of any Credit Party, threatened to be filed with any Governmental
Authority or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment by any Credit
Party of any individual.
3.8 Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness. Except as set forth in Disclosure Schedule (3.8), as of the
Closing Date, no Credit Party has any Subsidiaries, is engaged in any joint
venture or partnership with any other Person, or is an Affiliate of any other
Person. All of the issued and outstanding Stock of each Credit Party is owned by
each of the Stockholders and in the amounts set forth in Disclosure Schedule
(3.8). Except as set forth in Disclosure Schedule (3.8), there are no
outstanding rights to purchase, options, warrants or similar rights or
agreements pursuant to which any Credit Party may be required to issue, sell,
repurchase or redeem any of its Stock or other equity securities or any Stock or
other equity securities of its Subsidiaries. All outstanding Indebtedness and
Guaranteed Indebtedness of each Credit Party as of the Closing Date (except for
the Obligations) is described in Section 6.3 (including Disclosure Schedule
(6.3)).
3.9 Government Regulation. No Credit Party is an "investment
company" or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company," as such terms are defined in the Investment
Company Act of 1940. No Credit Party is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any other federal
or state statute that restricts or limits its ability to incur Indebtedness or
to perform its obligations hereunder. The making of the Loans by Lenders to
Borrower, the application of the proceeds thereof and repayment thereof and the
consummation of the Related Transactions will not violate any provision of any
such statute or any rule, regulation or order issued by the Securities and
Exchange Commission.
3.10 Margin Regulations. No Credit Party is engaged, nor will
it engage, principally or as one of its important activities, in the business of
extending credit for the purpose of "purchasing" or "carrying" any "margin
stock" as such terms are defined in Regulation U of the Federal Reserve Board as
now and from time to time hereafter in effect (such securities being referred to
26
herein as "Margin Stock"). No Credit Party owns any Margin Stock, and none of
the proceeds of the Loans or other extensions of credit under this Agreement
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock, for the purpose of reducing or retiring any Indebtedness that
was originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Credit Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.11 Taxes. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to be filed by any
Credit Party have been filed with the appropriate Governmental Authority and all
Charges have been paid prior to the date on which any fine, penalty, interest or
late charge may be added thereto for nonpayment thereof (or any such fine,
penalty, interest, late charge or loss has been paid), excluding Charges or
other amounts being contested in accordance with Section 5.2(b). Proper and
accurate amounts have been withheld by each Credit Party from its respective
employees for all periods in full and complete compliance with all applicable
federal, state, local and foreign laws and such withholdings have been timely
paid to the respective Governmental Authorities. Disclosure Schedule (3.11) sets
forth as of the Closing Date those taxable years for which any Credit Party's
tax returns are currently being audited by the IRS or any other applicable
Governmental Authority, and any assessments or threatened assessments in
connection with such audit, or otherwise currently outstanding. Except as
described in Disclosure Schedule (3.11), no Credit Party has executed or filed
with the IRS or any other Governmental Authority any agreement or other document
extending, or having the effect of extending, the period for assessment or
collection of any Charges. None of the Credit Parties and their respective
predecessors are liable for any Charges: (a) under any agreement (including any
tax sharing agreements) or (b) to each Credit Party's knowledge, as a
transferee. As of the Closing Date, no Credit Party has agreed or been requested
to make any adjustment under IRC Section 481(a), by reason of a change in
accounting method or otherwise, which would have a Material Adverse Effect.
3.12 ERISA.
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(a) Disclosure Schedule (3.12) lists (i) all ERISA Affiliates
and (ii) all Plans and separately identifies all Pension Plans, including Title
IV Plans, Multiemployer Plans, ESOPs and Welfare Plans, including all Retiree
Welfare Plans. Copies of all such listed Plans, together with a copy of the
latest IRS/DOL 5500-series form for each such Plan, have been delivered to
Agent. Except with respect to Multiemployer Plans, each Qualified Plan has been
determined by the IRS to qualify under Section 401 of the IRC, the trusts
created thereunder have been determined to be exempt from tax under the
provisions of Section 501 of the IRC, and nothing has occurred that would cause
the loss of such qualification or tax-exempt status. Each Plan is in compliance
with the applicable provisions of ERISA and the IRC, including the timely filing
of all reports required under the IRC or ERISA, including the statement required
by 29 CFR Section 2520.104-23. Neither any Credit Party nor ERISA Affiliate has
27
failed to make any contribution or pay any amount due as required by either
Section 412 of the IRC or Section 302 of ERISA or the terms of any such Plan.
Neither any Credit Party nor ERISA Affiliate has engaged in a "prohibited
transaction," as defined in Section 406 of ERISA and Section 4975 of the IRC, in
connection with any Plan, that would subject any Credit Party to a material tax
on prohibited transactions imposed by Section 502(i) of ERISA or Section 4975 of
the IRC.
(b) Except as set forth in Disclosure Schedule (3.12): (i) no
Title IV Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event
described in Section 4062(e) of ERISA with respect to any Title IV Plan has
occurred or is reasonably expected to occur; (iii) there are no pending, or to
the knowledge of any Credit Party, threatened claims (other than claims for
benefits in the normal course), sanctions, actions or lawsuits, asserted or
instituted against any Plan or any Person as fiduciary or sponsor of any Plan;
(iv) no Credit Party or ERISA Affiliate has incurred or reasonably expects to
incur any liability as a result of a complete or partial withdrawal from a
Multiemployer Plan; (v) within the last five years no Title IV Plan of any
Credit Party or ERISA Affiliate has been terminated, whether or not in a
"standard termination" as that term is used in Section 4041(b)(1) of ERISA, nor
has any Title IV Plan of any Credit Party or any ERISA Affiliate (determined at
any time within the last five years) with Unfunded Pension Liabilities been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14) of ERISA) of any Credit Party or ERISA Affiliate (determined at such
time); (vi) except in the case of any ESOP, Stock of all Credit Parties and
their ERISA Affiliates makes up, in the aggregate, no more than 10% of fair
market value of the assets of any Plan measured on the basis of fair market
value as of the latest valuation date of any Plan; and (vii) no liability under
any Title IV Plan has been satisfied with the purchase of a contract from an
insurance company that is not rated AAA by the Standard & Poor's Corporation or
an equivalent rating by another nationally recognized rating agency.
3.13 No Litigation. No action, claim, lawsuit, demand,
investigation or proceeding is now pending or, to the knowledge of any Credit
Party, threatened against any Credit Party, before any Governmental Authority or
before any arbitrator or panel of arbitrators (collectively, "Litigation"), (a)
that challenges any Credit Party's right or power to enter into or perform any
of its obligations under the Loan Documents to which it is a party, or the
validity or enforceability of any Loan Document or any action taken thereunder,
or (b) that has a reasonable risk of being determined adversely to any Credit
Party and that , if so determined, could be reasonably be expected to have a
Material Adverse Effect. Except as set forth on Disclosure Schedule (3.13), as
of the Closing Date there is no Litigation pending or, to any Credit Party's
knowledge, threatened, that seeks damages in excess of $100,000 or injunctive
relief against, or alleges criminal misconduct of, any Credit Party.
3.14 Brokers. No broker or finder brought about the obtaining,
making or closing of the Loans or the Related Transactions, and no Credit Party
or Affiliate thereof has any obligation to any Person in respect of any finder's
or brokerage fees in connection therewith.
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3.15 Intellectual Property. As of the Closing Date, each
Credit Party owns or has rights to use all Intellectual Property necessary to
continue to conduct its business as now or heretofore conducted by it or
proposed to be conducted by it, and each Patent, Trademark, Copyright and
License is listed, together with application or registration numbers, as
applicable, in Disclosure Schedule (3.15). Each Credit Party conducts its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect. Except as set
forth in Disclosure Schedule (3.15), no Credit Party is aware of any
infringement claim by any other Person with respect to any Intellectual
Property.
3.16 Full Disclosure. No information contained in this
Agreement, any of the other Loan Documents, any Projections, Financial
Statements or Collateral Reports or other written reports from time to time
delivered hereunder or any written statement furnished by or on behalf of any
Credit Party to Agent or any Lender pursuant to the terms of this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made. The Liens granted to Agent, on behalf of itself and Lenders, pursuant
to the Collateral Documents will at all times be fully perfected first priority
Liens in and to the Collateral described therein, subject, as to priority, only
to Permitted Encumbrances.
3.17 Environmental Matters.
---------------------
(a) Except as set forth in Disclosure Schedule (3.17), as of
the Closing Date: (i) the Real Estate is free of contamination from any
Hazardous Material except for such contamination that would not adversely impact
the value or marketability of such Real Estate and which would not result in
Environmental Liabilities, which could reasonably be expected to exceed
$100,000; (ii) no Credit Party has caused or suffered to occur any Release of
Hazardous Materials on, at, in, under, above, to, from or about any of its Real
Estate; (iii) the Credit Parties are and have been in compliance with all
Environmental Laws, except for such noncompliance that would not result in
Environmental Liabilities which could reasonably be expected to exceed $100,000;
(iv) the Credit Parties have obtained, and are in compliance with, all
Environmental Permits required by Environmental Laws for the operations of their
respective businesses as presently conducted or as proposed to be conducted,
except where the failure to so obtain or comply with such Environmental Permits
would not result in Environmental Liabilities that could reasonably be expected
to exceed $100,000, and all such Environmental Permits are valid, uncontested
and in good standing; (v) no Credit Party is involved in operations or knows of
any facts, circumstances or conditions, including any Releases of Hazardous
Materials, that are likely to result in any Environmental Liabilities of such
Credit Party which could reasonably be expected to exceed $100,000, and no
Credit Party has permitted any current or former tenant or occupant of the Real
Estate to engage in any such operations; (vi) there is no Litigation arising
under or related to any Environmental Laws, Environmental Permits or Hazardous
Material that seeks damages, penalties, fines, costs or expenses in excess of
$25,000 or injunctive relief against, or that alleges criminal misconduct by,
any Credit Party; (vii) no notice has been received by any Credit Party
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identifying it as a "potentially responsible party" or requesting information
under CERCLA or analogous state statutes, and to the knowledge of the Credit
Parties, there are no facts, circumstances or conditions that may result in any
Credit Party being identified as a "potentially responsible party" under CERCLA
or analogous state statutes; and (viii) the Credit Parties have provided to
Agent copies of all existing environmental reports, reviews and audits and all
written information pertaining to actual or potential Environmental Liabilities,
in each case relating to any Credit Party.
(b) Each Credit Party hereby acknowledges and agrees that
Agent (i) is not now, and has not ever been, in control of any of the Real
Estate or any Credit Party's affairs, and (ii) does not have the capacity
through the provisions of the Loan Documents or otherwise to influence any
Credit Party's conduct with respect to the ownership, operation or management of
any of its Real Estate or compliance with Environmental Laws or Environmental
Permits.
3.18 Insurance. Disclosure Schedule (3.18) lists all insurance
policies of any nature maintained, as of the Closing Date, for current
occurrences by each Credit Party, as well as a summary of the terms of each such
policy.
3.19 Deposit and Disbursement Accounts. Disclosure Schedule
(3.19) lists all banks and other financial institutions at which any Credit
Party maintains deposit or other accounts as of the Closing Date, including any
Disbursement Accounts, and such Schedule correctly identifies the name, address
and telephone number of each depository, the name in which the account is held,
a description of the purpose of the account, and the complete account number
therefor.
3.20 Government Contracts. Except as set forth in Disclosure
Schedule (3.20), as of the Closing Date, no Credit Party is a party to any
contract or agreement with any Governmental Authority and no Credit Party's
Accounts are subject to the Federal Assignment of Claims Act (31 U.S.C. Section
3727) or any similar state or local law.
3.21 Customer and Trade Relations. As of the Closing Date,
there exists no actual or, to the knowledge of any Credit Party, threatened
termination or cancellation of, or any material adverse modification or change
in: the business relationship of any Credit Party with any customer or group of
customers whose purchases during the preceding 12 months caused them to be
ranked among the ten largest customers of such Credit Party; or the business
relationship of any Credit Party with any supplier material to its operations.
3.22 Agreements and Other Documents. As of the Closing Date,
each Credit Party has provided to Agent or its counsel, on behalf of Lenders,
accurate and complete copies (or summaries) of all of the following agreements
or documents to which it is subject and each of which is listed in Disclosure
Schedule (3.22): supply agreements and purchase agreements not terminable by
such Credit Party within 60 days following written notice issued by such Credit
Party and involving transactions in excess of $1,000,000 per annum; leases of
Equipment having a remaining term of one year or longer and requiring aggregate
30
rental and other payments in excess of $500,000 per annum; licenses and permits
held by the Credit Parties, the absence of which could be reasonably likely to
have a Material Adverse Effect; instruments and documents evidencing any
Indebtedness or Guaranteed Indebtedness of such Credit Party and any Lien
granted by such Credit Party with respect thereto; and instruments and
agreements evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of such Credit Party.
3.23 Solvency. Both before and after giving effect to (a) the
Loans to be made or incurred on the Closing Date or such other date as Loans
requested hereunder are made or incurred; (b) the disbursement of the proceeds
of such Loans pursuant to the instructions of Borrower; (c) the Refinancing and
the consummation of the other Related Transactions; and (d) the payment and
accrual of all transaction costs in connection with the foregoing, each Credit
Party is and will be Solvent.
3.24 Subordinated Debt. As of the Closing Date, Borrower has
provided to Agent or its counsel, on behalf of Lenders, accurate and complete
copies of all Subordinated Notes (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith), each of which is listed in
Disclosure Schedule (3.24). Disclosure Schedule (3.24) also sets forth a true
and correct list of all Subordinated Note Holders. Borrower had the corporate
power and authority to incur the Indebtedness evidenced by the Subordinated
Notes and to enter into the amendment to the Subordinated Notes contemplated as
a condition to the closing of this Credit Agreement. The Subordination Agreement
is enforceable against the holders of the Subordinated Notes by Agent and
Lenders. All Obligations constitute senior Indebtedness entitled to the benefits
of the subordination provisions contained in the Subordination Agreement.
Borrower acknowledges that Agent and each Lender are entering into this
Agreement and are extending the Commitments in reliance upon the subordination
provisions contained in the Subordination Agreement and this Section 3.23.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1 Reports and Notices.
-------------------
(a) Each Credit Party executing this Agreement hereby agrees
that from and after the Closing Date and until the Termination Date, it shall
deliver to Agent or to Agent and Lenders, as required, the Financial Statements,
notices, Projections and other information at the times, to the Persons and in
the manner set forth in Annex D.
(b) Each Credit Party executing this Agreement hereby agrees
that, from and after the Closing Date and until the Termination Date, it shall
deliver to Agent or to Agent and Lenders, as required, the various Collateral
Reports (including Borrowing Base Certificates in the form of Exhibit 4.1(b)) at
the times, to the Persons and in the manner set forth in Annex E.
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4.2 Communication with Accountants. Each Credit Party
executing this Agreement authorizes (a) Agent and (b) so long as an Event of
Default has occurred and is continuing, each Lender, to communicate directly
with its independent certified public accountants, including
PricewaterhouseCoopers LLP, and authorizes and, at Agent's request, shall
instruct those accountants and advisors to disclose and make available to Agent
and each Lender any and all Financial Statements and other supporting financial
documents, schedules and information relating to any Credit Party (including
copies of any issued management letters) with respect to the business, financial
condition and other affairs of any Credit Party.
5. AFFIRMATIVE COVENANTS
Each Credit Party executing this Credit Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
and until the Termination Date:
5.1 Maintenance of Existence and Conduct of Business. Each
Credit Party shall: do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and its rights and
franchises; continue to conduct its business substantially as now conducted or
as otherwise permitted hereunder; at all times maintain, preserve and protect
all of its assets and properties used or useful in the conduct of its business,
and keep the same in good repair, working order and condition in all material
respects (taking into consideration ordinary wear and tear) and from time to
time make, or cause to be made, all necessary or appropriate repairs,
replacements and improvements thereto consistent with industry practices; and
transact business only in such corporate and trade names as are set forth in
Disclosure Schedule (5.1).
5.2 Payment of Charges.
------------------
(a) Subject to Section 5.2(b), each Credit Party shall pay and
discharge or cause to be paid and discharged promptly all Charges payable by it,
including (i) Charges imposed upon it, its income and profits, or any of its
property (real, personal or mixed) and all Charges with respect to tax, social
security and unemployment withholding with respect to its employees, (ii) lawful
claims for labor, materials, supplies and services or otherwise, and (iii) all
storage or rental charges payable to warehousemen or bailees, in each case,
before any thereof shall become past due.
(b) Each Credit Party may in good faith contest, by
appropriate proceedings, the validity or amount of any Charges, Taxes or claims
described in Section 5.2(a); provided, that (i) adequate reserves with respect
to such contest are maintained on the books of such Credit Party, in accordance
with GAAP; (ii) no Lien shall be imposed to secure payment of such Charges
(other than payments to warehousemen and/or bailees) that is superior to any of
the Liens securing the Obligations and such contest is maintained and prosecuted
continuously and with diligence and operates to suspend collection or
enforcement of such Charges; (iii) none of the Collateral becomes subject to
forfeiture or loss as a result of such contest; (iv) such Credit Party shall
promptly pay or discharge such contested Charges, Taxes or claims and all
additional charges, interest, penalties and expenses, if any, and shall deliver
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to Agent evidence reasonably acceptable to Agent of such compliance, payment or
discharge, if such contest is terminated or discontinued adversely to such
Credit Party or the conditions set forth in this Section 5.2(b) are no longer
met; and (v) Agent has not advised Borrower in writing that Agent reasonably
believes that nonpayment or nondischarge thereof could have or result in a
Material Adverse Effect.
5.3 Books and Records. Each Credit Party shall keep adequate
books and records with respect to its business activities in which proper
entries, reflecting all financial transactions, are made in accordance with GAAP
and on a basis consistent with the Financial Statements attached as Disclosure
Schedule (3.4(a)).
5.4 Insurance; Damage to or Destruction of Collateral.
--------------------------------------------------
(a) The Credit Parties shall, at their sole cost and expense,
maintain the policies of insurance described on Disclosure Schedule (3.18) as in
effect on the date hereof or otherwise in form and amounts and with insurers
reasonably acceptable to Agent. Such policies of insurance (or the loss payable
and additional insured endorsements delivered to Agent) shall contain provisions
pursuant to which the insurer agrees to provide 30 days prior written notice to
Agent in the event of any non-renewal, cancellation or amendment of any such
insurance policy. If any Credit Party at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required above, or to pay
all premiums relating thereto, Agent may at any time or times thereafter obtain
and maintain such policies of insurance and pay such premiums and take any other
action with respect thereto that Agent deems advisable. Agent shall have no
obligation to obtain insurance for any Credit Party or pay any premiums
therefor. By doing so, Agent shall not be deemed to have waived any Default or
Event of Default arising from any Credit Party's failure to maintain such
insurance or pay any premiums therefor. All sums so disbursed, including
reasonable attorneys' fees, court costs and other charges related thereto, shall
be payable on demand by Borrower to Agent and shall be additional Obligations
hereunder secured by the Collateral.
(b) Agent reserves the right at any time upon any change in
any Credit Party's risk profile (including any change in the product mix
maintained by any Credit Party or any laws affecting the potential liability of
such Credit Party) to require additional forms and limits of insurance to, in
Agent's opinion, adequately protect both Agent's and Lender's interests in all
or any portion of the Collateral and to ensure that each Credit Party is
protected by insurance in amounts and with coverage customary for its industry.
If reasonably requested by Agent, each Credit Party shall deliver to Agent from
time to time a report of a reputable insurance broker, reasonably satisfactory
to Agent, with respect to its insurance policies.
(c) Each Credit Party shall deliver to Agent, in form and
substance reasonably satisfactory to Agent, endorsements to (i) all "All Risk"
and business interruption insurance naming Agent, on behalf of itself and
Lenders, as loss payee, and (ii) all general liability and other liability
policies naming Agent, on behalf of itself and Lenders, as additional insured.
Each Credit Party irrevocably makes, constitutes and appoints Agent (and all
33
officers, employees or agents designated by Agent), so long as any Default or
Event of Default has occurred and is continuing or the anticipated insurance
proceeds exceed $500,000, as such Credit Party's true and lawful agent and
attorney-in-fact for the purpose of making, settling and adjusting claims under
such "All Risk" policies of insurance, endorsing the name of such Credit Party
on any check or other item of payment for the proceeds of such "All Risk"
policies of insurance and for making all determinations and decisions with
respect to such "All Risk" policies of insurance. Agent shall have no duty to
exercise any rights or powers granted to it pursuant to the foregoing
power-of-attorney. Borrower shall promptly notify Agent of any loss, damage, or
destruction to the Collateral in the amount of $250,000 or more, whether or not
covered by insurance. After deducting from such proceeds the expenses, if any,
incurred by Agent in the collection or handling thereof, Agent may, at its
option, apply such proceeds to the reduction of the Obligations in accordance
with Section 1.3(d); or permit or require the applicable Credit Party to use
such money, or any part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials and workmanship
of substantially the same quality as existed before the loss, damage or
destruction. Notwithstanding the foregoing, if the casualty giving rise to such
insurance proceeds could not reasonably be expected to have a Material Adverse
Effect and such insurance proceeds do not exceed $500,000 in the aggregate,
Agent shall permit the applicable Credit Party to replace, restore, repair or
rebuild the property; provided that if such Credit Party shall not have
completed or entered into binding agreements to complete such replacement,
restoration, repair or rebuilding within 180 days of such casualty, Agent may
apply such insurance proceeds to the Obligations in accordance with Section
1.3(d). All insurance proceeds that are to be made available to Borrower to
replace, repair, restore or rebuild the Collateral shall be applied by Agent to
reduce the outstanding principal balance of the Revolving Loan (which
application shall not result in a permanent reduction of the Revolving Loan
Commitment) and upon such application, Agent shall establish a Reserve against
the Borrowing Base in an amount equal to the amount of such proceeds so applied.
All insurance proceeds made available to any Credit Party that is not a Borrower
to replace, repair, restore or rebuild Collateral shall be deposited in a cash
collateral account. Thereafter, such funds shall be made available to such
Credit Party provide funds to replace, repair, restore or rebuild the Collateral
as follows: (i) Borrower shall request a Revolving Credit Advance or a release
from the cash collateral account be made to such Credit Party in the amount
requested to be released; (ii) so long as the conditions set forth in Section
2.2 have been met, Revolving Lenders shall make such Revolving Credit Advance or
Agent shall release funds from the cash collateral account; and (iii) in the
case of insurance proceeds applied against the Revolving Loan, the Reserve
established with respect to such insurance proceeds shall be reduced by the
amount of such Revolving Credit Advance. To the extent not used to replace,
repair, restore or rebuild the Collateral, such insurance proceeds shall be
applied in accordance with Section 1.3(d).
(d) The Credit Parties shall, at their sole cost and expense,
maintain (i) key-man life insurance policies in the amounts of $2.0 million,
$1.0 million and $1.0 million on the lives of Xxxxxxx Xxxxxxx, Xxxxx Xxxxxxxx
and Xxxxx Xxxx, respectively, all in form and with insurers reasonably
acceptable to Agent and (ii) assignments of such key-man life insurance policies
to Agent, all in form acceptable to Agent.
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5.5 Compliance with Laws. Each Credit Party shall comply with
all federal, state, local and foreign laws and regulations applicable to it,
including those relating to ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.6 Supplemental Disclosure. From time to time as may be
reasonably requested by Agent (which request will not be made more frequently
than once each year absent the occurrence and continuance of a Default or an
Event of Default), the Credit Parties shall supplement each Disclosure Schedule
hereto, or any representation herein or in any other Loan Document, with respect
to any matter hereafter arising that, if existing or occurring at the date of
this Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or that is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall amend,
supplement or otherwise modify any Disclosure Schedule or representation, or be
or be deemed a waiver of any Default or Event of Default resulting from the
matters disclosed therein, except as consented to by Agent and Requisite Lenders
in writing, and (b) no supplement shall be required or permitted as to
representations and warranties that relate solely to the Closing Date.
5.7 Intellectual Property. Each Credit Party will conduct its
business and affairs without infringement of or interference with any
Intellectual Property of any other Person in any material respect.
5.8 Environmental Matters. Each Credit Party shall and shall
cause each Person within its control to: (a) conduct its operations and keep and
maintain its Real Estate in compliance with all Environmental Laws and
Environmental Permits other than noncompliance that could not reasonably be
expected to have a Material Adverse Effect; (b) implement any and all
investigation, remediation, removal and response actions that are appropriate or
necessary to maintain the value and marketability of the Real Estate or to
otherwise comply with Environmental Laws and Environmental Permits pertaining to
the presence, generation, treatment, storage, use, disposal, transportation or
Release of any Hazardous Material on, at, in, under, above, to, from or about
any of its Real Estate; (c) notify Agent promptly after such Credit Party
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate that is
reasonably likely to result in Environmental Liabilities in excess of $25,000;
and (d) promptly forward to Agent a copy of any order, notice, request for
information or any communication or report received by such Credit Party in
connection with any such violation or Release or any other matter relating to
any Environmental Laws or Environmental Permits that could reasonably be
expected to result in Environmental Liabilities in excess of $25,000, in each
case whether or not the Environmental Protection Agency or any Governmental
Authority has taken or threatened any action in connection with any such
35
violation, Release or other matter. If Agent at any time has a reasonable basis
to believe that there may be a violation of any Environmental Laws or
Environmental Permits by any Credit Party or any Environmental Liability arising
thereunder, or a Release of Hazardous Materials on, at, in, under, above, to,
from or about any of its Real Estate, that, in each case, could reasonably be
expected to have a Material Adverse Effect, then each Credit Party shall, upon
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Borrower's expense, as Agent may from time to time
reasonably request, which shall be conducted by reputable environmental
consulting firms reasonably acceptable to Agent and shall be in form and
substance reasonably acceptable to Agent, and (ii) permit Agent or its
representatives to have access to all Real Estate for the purpose of conducting
such environmental audits and testing as Agent deems appropriate, including
subsurface sampling of soil and groundwater. Borrower shall reimburse Agent for
the costs of such audits and tests and the same will constitute a part of the
Obligations secured hereunder.
5.9 Landlords' Agreements, Mortgagee Agreements, Bailee
Letters and Real Estate Purchases. Each Credit Party shall obtain a landlord's
agreement, mortgagee agreement or bailee letter, as applicable, from the lessor
of each leased property, mortgagee of owned property or bailee with respect to
any warehouse, processor or converter facility or other location where
Collateral is stored or located, which agreement or letter shall contain a
waiver or subordination of all Liens or claims that the landlord, mortgagee or
bailee may assert against the Collateral at that location, and shall otherwise
be reasonably satisfactory in form and substance to Agent. After the Closing
Date, no real property or warehouse space shall be leased by any Credit Party
and no Inventory shall be shipped to a processor or converter under arrangements
established after the Closing Date without the prior written consent of Agent
or, unless and until a reasonably satisfactory landlord agreement or bailee
letter, as appropriate, shall first have been obtained with respect to such
location. Each Credit Party shall timely and fully pay and perform its
obligations under all leases and other agreements with respect to each leased
location or public warehouse where any Collateral is or may be located.
5.10 Mortgages. At the request of Agent, each Credit Party
executing this Agreement agrees that it shall and shall cause each other Credit
Party to, at such Credit Party's expense and upon request of Agent, to provide
to Agent a mortgage or deed of trust granting Agent a first priority Lien on
such Real Estate, together with environmental audits, mortgage title insurance
commitment and policy, real property survey, local counsel opinion(s), and, if
required by Agent, supplemental casualty insurance and flood insurance, and such
other documents, instruments or agreements reasonably requested by Agent, in
each case, in form and substance reasonably satisfactory to Agent. To the extent
otherwise permitted hereunder, if any Credit Party proposes to acquire a fee
ownership interest in Real Estate after Agent has requested that the Credit
Parties deliver a mortgage or deed of trust pursuant to the foregoing sentence,
it shall notify Agent, and if the Agent requests, provide to Agent a mortgage or
deed of trust granting Agent a first priority Lien on such Real Estate, together
with environmental audits, mortgage title insurance commitment, real property
survey, local counsel opinion(s), and, if required by Agent, supplemental
36
casualty insurance and flood insurance, and such other documents, instruments or
agreements reasonably requested by Agent, in each case, in form and substance
reasonably satisfactory to Agent.
5.11 Further Assurances. Each Credit Party executing this
Agreement agrees that it shall and shall cause each other Credit Party to, at
such Credit Party's expense and upon request of Agent, duly execute and deliver,
or cause to be duly executed and delivered, to Agent such further instruments
and do and cause to be done such further acts as may be necessary or proper in
the reasonable opinion of Agent to carry out more effectively the provisions and
purposes of this Agreement or any other Loan Document.
5.12 Certificates of Title. As of the Closing Date, Borrower
shall have delivered to the Agent applications for new certificates of title for
all Equipment of Borrower that can be titled evidencing the Lien granted to
Agent under the Loan Documents in such Equipment, and as of one Business Day
immediately following the Closing Date, Borrower shall have caused all existing
certificates of title for all Equipment of Borrower that can be titled to be
delivered to Agent, with any Liens noted thereon released by the holder of such
Lien. If Borrower acquires any Equipment after the Closing Date that can be
titled, Borrower shall cause a certificate of title to be issued for such
Equipment, with the Lien of the Agent noted thereon, and shall cause such
certificate to be delivered to the Agent or its designee directly.
Notwithstanding the foregoing provisions of this Section 5.12, Borrower shall
not be required to deliver certificates of title to Agent for Equipment with an
aggregate appraised value not to exceed (i) $1,800,000 at any time on or prior
to the 14-day anniversary of the Closing Date, (ii) $750,000 at any time from
and after the 15-day anniversary of the Closing Date through and including the
30-day anniversary of the Closing Date or at any time after the 30-day
anniversary of the Closing Date so long as the mandatory prepayment required
pursuant to Section 1.3(b)(vi) has been paid in full, and (iii) $250,000 at any
time after the 30-day anniversary of the Closing Date if the mandatory
prepayment required pursuant to Section 1.3(b)(vi) is not paid in full.
5.13 Subordinated Noteholder Consents.
---------------------------------
(a) No later than the 4-month anniversary of the Closing Date,
Borrower shall deliver to Agent a written consent executed by each holder of the
Subordinated Notes, in form and substance satisfactory to Agent, consenting to
any senior Indebtedness which refinances the Obligations, secured by all assets
of the Credit Parties, and consenting to the aggregate principal amount of all
Loans extended hereunder or under any credit facilities that refinance the
Obligations to be increased to at least $43,000,000 in the aggregate.
(b) No later than 14 days after the Closing Date, Borrower
shall either (i) prepay in full all or a part of the Subordinated Notes held by
holders that have not signed the Subordination Agreement, provided that the
aggregate purchase price that Borrower pays may not exceed $400,000 or (ii)
cause St. Xxxxx to purchase all remaining Subordinated Notes held by holders
that have not signed the Subordination Agreement and to execute a joinder to the
37
Subordination Agreement and an amendment and consent in the form delivered on
the Closing Date by St. Xxxxx, all in form and substance satisfactory to the
Agent.
6. NEGATIVE COVENANTS
Each Credit Party executing this Agreement jointly and
severally agrees as to all Credit Parties that from and after the date hereof
until the Termination Date:
6.1 Mergers, Subsidiaries, Etc. No Credit Party shall directly
or indirectly, by operation of law or otherwise, (a) form or acquire any
Subsidiary, or (b) merge with, consolidate with, acquire all or substantially
all of the assets or Stock of, or otherwise combine with or acquire, any Person
6.2 Investments; Loans and Advances. Except as otherwise
expressly permitted by this Section 6, no Credit Party shall make or permit to
exist any investment in, or make, accrue or permit to exist loans or advances of
money to, any Person, through the direct or indirect lending of money, holding
of securities or otherwise, except that: (a) Borrower may hold investments
comprised of notes payable, or stock or other securities issued by Account
Debtors to Borrower pursuant to negotiated agreements with respect to settlement
of such Account Debtor's Accounts in the ordinary course of business, so long as
the aggregate amount of such Accounts so settled by Borrower does not exceed
$250,000; and (b) other investments not exceeding $1,000,000 in the aggregate at
any time outstanding.
6.3 Indebtedness.
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(a) No Credit Party shall create, incur, assume or permit to
exist any Indebtedness, except (without duplication) (i) Indebtedness secured by
purchase money security interests and Capital Leases permitted in Section
6.7(c), (ii) the Loans and the other Obligations, (iii) unfunded pension fund
and other employee benefit plan obligations and liabilities to the extent they
are permitted to remain unfunded under applicable law, (iv) existing
Indebtedness described in Disclosure Schedule (6.3) and refinancings thereof or
amendments or modifications thereto that do not have the effect of increasing
the principal amount thereof or changing the amortization thereof (other than to
extend the same) and that are otherwise on terms and conditions no less
favorable to any Credit Party, Agent or any Lender, as determined by Agent, than
the terms of the Indebtedness being refinanced, amended or modified, and (v)
Indebtedness specifically permitted under Section 6.17;
(b) No Credit Party shall, directly or indirectly, voluntarily
purchase, redeem, defease or prepay any principal of, premium, if any, interest
or other amount payable in respect of any Indebtedness, other than (i) the
Obligations; (ii) Indebtedness secured by a Permitted Encumbrance if the asset
securing such Indebtedness has been sold or otherwise disposed of in accordance
with Sections 6.8(b) or (c); and (iii) Indebtedness permitted by Section
6.3(a)(iv) upon any refinancing thereof in accordance with Section 6.3(a)(iv).
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6.4 Employee Loans and Affiliate Transactions.
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(a) No Credit Party shall enter into or be a party to any
transaction with any other Credit Party or any Affiliate thereof except in the
ordinary course of and pursuant to the reasonable requirements of such Credit
Party's business and upon fair and reasonable terms that are no less favorable
to such Credit Party than would be obtained in a comparable arm's length
transaction with a Person not an Affiliate of such Credit Party. All such
transactions existing as of the date hereof are described in Disclosure Schedule
(6.4(a)).
(b) No Credit Party shall enter into any lending or borrowing
transaction with any employees of any Credit Party, except loans to its
respective employees in the ordinary course of business consistent with past
practices for travel and entertainment expenses, relocation costs and similar
purposes up to a maximum of $50,000 to any employee and up to a maximum of
$250,000 in the aggregate at any one time outstanding.
6.5 Capital Structure and Business. No Credit Party shall (a)
make any changes in any of its business objectives, purposes or operations that
could in any way adversely affect the repayment of the Loans or any of the other
Obligations or could reasonably be expected to have or result in a Material
Adverse Effect, (b) make any change in its capital structure as described in
Disclosure Schedule (3.8), including the issuance or sale of any shares of
Stock, warrants or other securities convertible into Stock or any revision of
the terms of its outstanding Stock, except for the exercise of existing
conversion rights, options and warrants, the grant of additional common stock to
holders of the Subordinated Notes in exchange for such holders' grant of the
extension required by Section 2.1(f), and options granted under existing or
future employee incentive stock option plans; or (c) amend its charter or bylaws
in a manner that would adversely affect Agent or Lenders or such Credit Party's
duty or ability to repay the Obligations. No Credit Party shall engage in any
business other than the businesses currently engaged in by it.
6.6 Guaranteed Indebtedness. No Credit Party shall create,
incur, assume or permit to exist any Guaranteed Indebtedness except (a) by
endorsement of instruments or items of payment for deposit to the general
account of any Credit Party, and (b) for Guaranteed Indebtedness incurred for
the benefit of any other Credit Party if the primary obligation is expressly
permitted by this Agreement.
6.7 Liens. No Credit Party shall create, incur, assume or
permit to exist any Lien on or with respect to its Accounts or any of its other
properties or assets (whether now owned or hereafter acquired) except for (a)
Permitted Encumbrances; (b) Liens in existence on the date hereof and summarized
on Disclosure Schedule (6.7) securing the Indebtedness described on Disclosure
Schedule (6.3) and permitted refinancings, extensions and renewals thereof,
including extensions or renewals of any such Liens; provided that the principal
amount of the Indebtedness so secured is not increased and the Lien does not
attach to any other property; (c) Liens created after the date hereof by
conditional sale or other title retention agreements (including Capital Leases)
or in connection with purchase money Indebtedness with respect to Equipment and
39
Fixtures acquired by any Credit Party in the ordinary course of business,
involving the incurrence of an aggregate amount of purchase money Indebtedness
and Capital Lease Obligations of not more than $1,000,000 outstanding at any one
time for all such Liens (provided that such Liens attach only to the assets
subject to such purchase money debt and such Indebtedness is incurred within 20
days following such purchase and does not exceed 100% of the purchase price of
the subject assets). In addition, no Credit Party shall become a party to any
agreement, note, indenture or instrument, or take any other action, that would
prohibit the creation of a Lien on any of its properties or other assets in
favor of Agent, on behalf of itself and Lenders, as additional collateral for
the Obligations, except operating leases, Capital Leases or Licenses which
prohibit Liens upon the assets that are subject thereto.
6.8 Sale of Stock and Assets. No Credit Party shall sell,
transfer, convey, assign or otherwise dispose of any of its properties or other
assets, including the Stock of any of its Subsidiaries (whether in a public or a
private offering or otherwise) or any of its Accounts, other than (a) the sale
of Inventory in the ordinary course of business, and (b) the sale, transfer,
conveyance or other disposition by a Credit Party of Equipment or Fixtures that
are obsolete or no longer used or useful in such Credit Party's business and
having an appraised value not exceeding $100,000 in any single transaction or
$250,000 in the aggregate in any Fiscal Year; and (c) other Equipment and
Fixtures having a value not exceeding $100,000 in any single transaction or
$250,000 in the aggregate in any Fiscal Year. With respect to any disposition of
assets or other properties permitted pursuant to clauses (b) and (c) above,
subject to Section 1.3(b), Agent agrees on reasonable prior written notice to
release its Lien on such assets or other properties in order to permit the
applicable Credit Party to effect such disposition and shall execute and deliver
to Borrower, at Borrower's expense, appropriate UCC-3 termination statements and
other releases as reasonably requested by Borrower.
6.9 ERISA. No Credit Party shall, or shall cause or permit any
ERISA Affiliate to, cause or permit to occur an event that could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event to the extent such ERISA Event
could reasonably be expected to have a Material Adverse Effect.
6.10 Financial Covenants. Borrower shall not breach or fail to
comply with any of the Financial Covenants.
6.11 Hazardous Materials. No Credit Party shall cause or
permit a Release of any Hazardous Material on, at, in, under, above, to, from or
about any of the Real Estate where such Release would (a) violate in any
respect, or form the basis for any Environmental Liabilities under, any
Environmental Laws or Environmental Permits or (b) otherwise adversely impact
the value or marketability of any of the Real Estate or any of the Collateral,
other than such violations or Environmental Liabilities that could not
reasonably be expected to have a Material Adverse Effect.
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6.12 Sale-Leasebacks. No Credit Party shall engage in any
sale-leaseback, synthetic lease or similar transaction involving any of its
assets.
6.13 Cancellation of Indebtedness. No Credit Party shall
cancel any claim or debt owing to it, except for reasonable consideration
negotiated on an arm's length basis and in the ordinary course of its business
consistent with past practices.
6.14 Restricted Payments. No Credit Party shall make any
Restricted Payment, except (a) dividends and distributions by Subsidiaries of
Borrower paid to Borrower, (b) employee loans permitted under Section 6.4(b),
and (c) fees paid to SJMB, LP in an amount not to exceed $150,000 but only to
the extent that (1) such fees are paid after the Lenders receive copies of the
Form 10-Q to be filed by Borrower with the Securities and Exchange Commission
for its Fiscal Quarter ending September 30, 2001, and are paid no later than
December 31, 2001, and (2) such Form 10-Q demonstrates that Borrower's EBITDA
for the Fiscal Quarter ending September 30, 2001 is at least $7,000,000.
6.15 Change of Corporate Name or Location; Change of Fiscal
Year. No Credit Party shall (a) change its name as it appears in official
filings in the state of its incorporation or other organization, (b) change its
chief executive office, principal place of business, corporate offices or
warehouses or locations at which Collateral is held or stored, or the location
of its records concerning the Collateral, (c) change the type of entity that it
is, (d) change its organization identification number, if any, issued by its
state of incorporation or other organization, or (e) change its state of
incorporation or organization, in each case without at least 30 days prior
written notice to Agent and after Agent's written acknowledgment that any
reasonable action requested by Agent in connection therewith, including to
continue the perfection of any Liens in favor of Agent, on behalf of Lenders, in
any Collateral, has been completed or taken, and provided that any such new
location shall be in the continental United States. Without limiting the
foregoing, no Credit Party shall change its name, identity or corporate
structure in any manner that might make any financing or continuation statement
filed in connection herewith seriously misleading within the meaning of Section
9-402(7) of the Code or any other then applicable provision of the Code except
upon prior written notice to Agent and Lenders and after Agent's written
acknowledgment that any reasonable action requested by Agent in connection
therewith, including to continue the perfection of any Liens in favor of Agent,
on behalf of Lenders, in any Collateral, has been completed or taken. No Credit
Party shall change its Fiscal Year.
6.16 No Impairment of Intercompany Transfers. No Credit Party
shall directly or indirectly enter into or become bound by any agreement,
instrument, indenture or other obligation (other than this Agreement and the
other Loan Documents) that could directly or indirectly restrict, prohibit or
require the consent of any Person with respect to the payment of dividends or
distributions or the making or repayment of intercompany loans by a Subsidiary
of Borrower to Borrower.
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6.17 No Speculative Transactions. No Credit Party shall engage
in any transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and interest swaps, caps or collars.
6.18 Real Estate Purchases. No Credit Party shall purchase a
fee simple ownership interest in Real Estate with an aggregate purchase price in
excess of $250,000.
6.19 Changes Relating to Subordinated Debt; Material
Contracts. No Credit Party shall change or amend the terms of any Subordinated
Debt (or any indenture or agreement in connection therewith) if the effect of
such amendment is to: (a) increase the interest rate on such Subordinated Debt;
(b) change the dates upon which payments of principal or interest are due on
such Subordinated Debt other than to extend such dates; (c) change any default
or event of default other than to delete or make less restrictive any default
provision therein, or add any covenant with respect to such Subordinated Debt;
(d) change the redemption or prepayment provisions of such Subordinated Debt
other than to extend the dates therefor or to reduce the premiums payable in
connection therewith; (e) grant any security or collateral to secure payment of
such Subordinated Debt; or (f) change or amend any other term if such change or
amendment would materially increase the obligations of the Credit Party
thereunder or confer additional material rights on the holder of such
Subordinated Debt in a manner adverse to any Credit Party, Agent or any Lender.
7. TERM
7.1 Termination. The financing arrangements contemplated
hereby shall be in effect until the Commitment Termination Date, and the Loans
and all other Obligations shall be automatically due and payable in full on such
date.
7.2 Survival of Obligations Upon Termination of Financing
Arrangements. Except as otherwise expressly provided for in the Loan Documents,
no termination or cancellation (regardless of cause or procedure) of any
financing arrangement under this Agreement shall in any way affect or impair the
obligations, duties and liabilities of the Credit Parties or the rights of Agent
and Lenders relating to any unpaid portion of the Loans or any other
Obligations, due or not due, liquidated, contingent or unliquidated, or any
transaction or event occurring prior to such termination, or any transaction or
event, the performance of which is required after the Commitment Termination
Date. Except as otherwise expressly provided herein or in any other Loan
Document, all undertakings, agreements, covenants, warranties and
representations of or binding upon the Credit Parties, and all rights of Agent
and each Lender, all as contained in the Loan Documents, shall not terminate or
expire, but rather shall survive any such termination or cancellation and shall
continue in full force and effect until the Termination Date; provided, that the
provisions of Section 11, the payment obligations under Sections 1.15 and 1.16,
42
and the indemnities contained in the Loan Documents shall survive the
Termination Date.
8. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
8.1 Events of Default. The occurrence of any one or more of
the following events (regardless of the reason therefor) shall constitute an
"Event of Default" hereunder:
(a) Borrower (i) fails to make any payment of principal of, or
interest on, or Fees owing in respect of, the Loans or any of the other
Obligations when due and payable, or (ii) fails to pay or reimburse Agent or
Lenders for any expense reimbursable hereunder or under any other Loan Document
within 10 days following Agent's demand for such reimbursement or payment of
expenses.
(b) Any Credit Party fails or neglects to perform, keep or
observe any of the provisions of Sections 1.4, 1.8, 5.4(a), 5.12, 5.13 or 6, or
any of the provisions set forth in Annexes B or F, respectively.
(c) Borrower fails or neglects to perform, keep or observe any
of the provisions of Section 4 or any provisions set forth in Annexes D or E,
respectively, and the same shall remain unremedied for (i) 3 days or more with
respect to any report, certificate or other information required to be delivered
weekly and (i) 5 days or more with respect to all other reports, certificates
and information.
(d) Any Credit Party fails or neglects to perform, keep or
observe any other provision of this Agreement or of any of the other Loan
Documents (other than any provision embodied in or covered by any other clause
of this Section 8.1) and the same shall remain unremedied for 20 days or more.
(e) A default or breach occurs under any other agreement,
document or instrument to which any Credit Party is a party that is not cured
within any applicable grace period therefor, and such default or breach (i)
involves the failure to make any payment when due in respect of any Indebtedness
or Guaranteed Indebtedness (other than the Obligations) of any Credit Party in
excess of $250,000 in the aggregate (including (x) undrawn committed or
available amounts and (y) amounts owing to all creditors under any combined or
syndicated credit arrangements), or (ii) causes, or permits any holder of such
Indebtedness or Guaranteed Indebtedness or a trustee to cause, Indebtedness or
Guaranteed Indebtedness or a portion thereof in excess of $250,000 in the
aggregate to become due prior to its stated maturity or prior to its regularly
scheduled dates of payment, or cash collateral in respect thereof to be
demanded, in each case, regardless of whether such default is waived, or such
right is exercised, by such holder or trustee.
(f) Any information contained in any Borrowing Base
Certificate is untrue or incorrect in any respect in any Borrowing Base
43
Certificate), or any representation or warranty herein or in any Loan Document
or in any written statement, report, financial statement or certificate (other
than a Borrowing Base Certificate) made or delivered to Agent or any Lender by
any Credit Party is untrue or incorrect in any material respect as of the date
when made or deemed made.
(g) Assets of any Credit Party are attached, seized, levied
upon or subjected to a writ or distress warrant, or come within the possession
of any receiver, trustee, custodian or assignee for the benefit of creditors of
any Credit Party and such condition continues for 30 days or more.
(h) A case or proceeding is commenced against any Credit Party
seeking a decree or order in respect of such Credit Party (i) under the
Bankruptcy Code, or any other applicable federal, state or foreign bankruptcy or
other similar law, (ii) appointing a custodian, receiver, liquidator, assignee,
trustee or sequestrator (or similar official) for such Credit Party or for any
substantial part of any such Credit Party's assets, or (iii) ordering the
winding-up or liquidation of the affairs of such Credit Party, and such case or
proceeding shall remain undismissed or unstayed for 60 days or more or a decree
or order granting the relief sought in such case or proceeding shall be entered
by a court of competent jurisdiction.
(i) Any Credit Party (i) files a petition seeking relief under
the Bankruptcy Code, or any other applicable federal, state or foreign
bankruptcy or other similar law, (ii) consents to or fails to contest in a
timely and appropriate manner the institution of proceedings thereunder or the
filing of any such petition or the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar
official) for such Credit Party or for any substantial part of any such Credit
Party's assets, (iii) makes an assignment for the benefit of creditors, (iv)
takes any action in furtherance of any of the foregoing; or (v) admits in
writing its inability to, or is generally unable to, pay its debts as such debts
become due.
(j) A final judgment or judgments for the payment of money in
excess of $250,000 in the aggregate at any time are outstanding against one or
more of the Credit Parties and the same are not, within 30 days after the entry
thereof, discharged or execution thereof stayed or bonded pending appeal, or
such judgments are not discharged prior to the expiration of any such stay.
(k) Any material provision of any Loan Document for any reason
ceases to be valid, binding and enforceable in accordance with its terms (or any
Credit Party shall challenge the enforceability of any Loan Document or shall
assert in writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has ceased to be or
otherwise is not valid, binding and enforceable in accordance with its terms),
or any Lien created under any Loan Document ceases to be a valid and perfected
first priority Lien (except as otherwise permitted herein or therein) in any of
the Collateral purported to be covered thereby.
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(l) Any Change of Control occurs.
8.2 Any Material Adverse Effect occurs.
8.3 Remedies.
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(a) If any Default or Event of Default has occurred and is
continuing, Agent may (and at the written request of the Requisite Revolving
Lenders shall), without notice, suspend the Revolving Loan Commitment with
respect to additional Revolving Advances, whereupon any additional Revolving
Advances shall be made or incurred in Agent's sole discretion (or in the sole
discretion of the Requisite Revolving Lenders, if such suspension occurred at
their direction) so long as such Default or Event of Default is continuing. If
any Default or Event of Default has occurred and is continuing, Agent may (and
at the written request of the Requisite CapEx Lenders shall), without notice,
suspend the CapEx Loan Commitment with respect to additional CapEx Advances,
whereupon any additional CapEx Advances shall be made or incurred in Agent's
sole discretion (or in the sole discretion of the Requisite CapEx Lenders, if
such suspension occurred at their direction) so long as such Default or Event of
Default is continuing. If any Default or Event of Default has occurred and is
continuing, Agent may (and at the written request of Requisite Lenders shall),
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans to the Default Rate.
(b) If any Event of Default has occurred and is continuing,
Agent may (and at the written request of the Requisite Lenders shall), without
notice: (i) terminate the Revolving Loan Commitment and CapEx Loan Commitment
with respect to further Advances; (ii) declare all or any portion of the
Obligations, including all or any portion of any Loan to be forthwith due and
payable, all without presentment, demand, protest or further notice of any kind,
all of which are expressly waived by Borrower and each other Credit Party; or
(iii) exercise any rights and remedies provided to Agent under the Loan
Documents or at law or equity, including all remedies provided under the Code;
provided, that upon the occurrence of an Event of Default specified in Sections
8.1(h) or (i), the Revolving Loan Commitment and CapEx Loan Commitment shall be
immediately terminated and all of the Obligations, including the aggregate
Revolving Loan and CapEx Loan, shall become immediately due and payable without
declaration, notice or demand by any Person.
8.4 Waivers by Credit Parties. Except as otherwise provided
for in this Agreement or by applicable law, each Credit Party waives (including
for purposes of Section 12): (a) presentment, demand and protest and notice of
presentment, dishonor, notice of intent to accelerate, notice of acceleration,
protest, default, nonpayment, maturity, release, compromise, settlement,
extension or renewal of any or all commercial paper, accounts, contract rights,
documents, instruments, chattel paper and guaranties at any time held by Agent
on which any Credit Party may in any way be liable, and hereby ratifies and
confirms whatever Agent may do in this regard, (b) all rights to notice and a
hearing prior to Agent's taking possession or control of, or to Agent's replevy,
attachment or levy upon, the Collateral or any bond or security that might be
45
required by any court prior to allowing Agent to exercise any of its remedies,
and (c) the benefit of all valuation, appraisal, marshaling and exemption laws.
9. ASSIGNMENT AND PARTICIPATIONS; APPOINTMENT OF AGENT
9.1 Assignment and Participations.
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(a) Subject to the terms of this Section 9.1, any Lender may
make an assignment to a Qualified Assignee of, or sell participations in, at any
time or times, the Loan Documents, Loans and any Commitment or any portion
thereof or interest therein, including any Lender's rights, title, interests,
remedies, powers or duties thereunder. Any assignment by a Lender shall: (i)
require the consent of Agent (which consent shall not be unreasonably withheld
or delayed with respect to a Qualified Assignee) and the execution of an
assignment agreement (an "Assignment Agreement") substantially in the form
attached hereto as Exhibit 9.1(a) and otherwise in form and substance reasonably
satisfactory to, and acknowledged by, Agent; (ii) be conditioned on such
assignee Lender representing to the assigning Lender and Agent that it is
purchasing the applicable Loans to be assigned to it for its own account, for
investment purposes and not with a view to the distribution thereof; (iii) after
giving effect to any such partial assignment, the assignee Lender shall have
Commitments in an amount at least equal to $5,000,000 and the assigning Lender
shall have retained Commitments in an amount at least equal to $5,000,000
(unless it assigns its entire Commitments); (iv) include a payment to Agent of
an assignment fee of $3,500; and (v) so long as no Event of Default has occurred
and is continuing, require the consent of Borrower, which shall not be
unreasonably withheld or delayed; provided that no such consent shall be
required for an assignment to a Qualified Assignee. In the case of an assignment
by a Lender under this Section 9.1, the assignee shall have, to the extent of
such assignment, the same rights, benefits and obligations as all other Lenders
hereunder. The assigning Lender shall be relieved of its obligations hereunder
with respect to its Commitments or assigned portion thereof from and after the
date of such assignment. Borrower hereby acknowledges and agrees that any
assignment shall give rise to a direct obligation of Borrower to the assignee
and that the assignee shall be considered to be a "Lender". In all instances,
each Lender's liability to make Loans hereunder shall be several and not joint
and shall be limited to such Lender's Pro Rata Share of the applicable
Commitment. In the event Agent or any Lender assigns or otherwise transfers all
or any part of the Obligations, Agent or any such Lender shall so notify
Borrower and Borrower shall, upon the request of Agent or such Lender, execute
new Notes in exchange for the Notes, if any, being assigned. Notwithstanding the
foregoing provisions of this Section 9.1(a), any Lender may at any time pledge
the Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to a Federal Reserve Bank, and any Lender that is an
investment fund may assign the Obligations held by it and such Lender's rights
under this Agreement and the other Loan Documents to another investment fund
managed by the same investment advisor; provided, that no such pledge to a
Federal Reserve Bank shall release such Lender from such Lender's obligations
hereunder or under any other Loan Document.
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(b) Any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that all amounts payable by
Borrower hereunder shall be determined as if that Lender had not sold such
participation, and that the holder of any such participation shall not be
entitled to require such Lender to take or omit to take any action hereunder
except actions directly affecting (i) any reduction in the principal amount of,
or interest rate or Fees payable with respect to, any Loan in which such holder
participates, (ii) any extension of the scheduled amortization of the principal
amount of any Loan in which such holder participates or the final maturity date
thereof, and (iii) any release of all or substantially all of the Collateral
(other than in accordance with the terms of this Agreement, the Collateral
Documents or the other Loan Documents). Solely for purposes of Sections 1.13,
1.15, 1.16 and 9.8, Borrower acknowledges and agrees that a participation shall
give rise to a direct obligation of Borrower to the participant and the
participant shall be considered to be a "Lender". Except as set forth in the
preceding sentence, no Credit Party shall have any obligation or duty to any
participant. Neither Agent nor any Lender (other than the Lender selling a
participation) shall have any duty to any participant and may continue to deal
solely with the Lender selling a participation as if no such sale had occurred.
(c) Except as expressly provided in this Section 9.1, no
Lender shall, as between Borrower and that Lender, or Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Credit Party executing this Agreement shall assist
any Lender permitted to sell assignments or participations under this Section
9.1 as reasonably required to enable the assigning or selling Lender to effect
any such assignment or participation, including the execution and delivery of
any and all agreements, notes and other documents and instruments as shall be
requested and, if requested by Agent, the preparation of informational materials
for, and the participation of management in meetings with, potential assignees
or participants. Each Credit Party executing this Agreement shall certify the
correctness, completeness and accuracy of all descriptions of the Credit Parties
and their respective affairs contained in any selling materials provided by them
and all other information provided by them and included in such materials,
except that any Projections delivered by Borrower shall only be certified by
Borrower as having been prepared by Borrower in compliance with the
representations contained in Section 3.4(c).
(e) Any Lender may furnish any information concerning Credit
Parties in the possession of such Lender from time to time to assignees and
participants (including prospective assignees and participants); provided that
such Lender shall obtain from assignees or participants confidentiality
covenants substantially equivalent to those contained in Section 11.8.
(f) Notwithstanding anything to the contrary contained herein,
any Lender (a "Granting Lender"), may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing by the Granting Lender to Agent and
Borrower, the option to provide to Borrower all or any part of any Loans that
such Granting Lender would otherwise be obligated to make to Borrower pursuant
to this Agreement; provided that (i) nothing herein shall constitute a
47
commitment by any SPC to make any Loan; and (ii) if an SPC elects not to
exercise such option or otherwise fails to provide all or any part of such Loan,
the Granting Lender shall be obligated to make such Loan pursuant to the terms
hereof. The making of a Loan by an SPC hereunder shall utilize the Commitment of
the Granting Lender to the same extent, and as if such Loan were made by such
Granting Lender. No SPC shall be liable for any indemnity or similar payment
obligation under this Agreement (all liability for which shall remain with the
Granting Lender). Any SPC may (i) with notice to, but without the prior written
consent of, Borrower and Agent and without paying any processing fee therefor
assign all or a portion of its interests in any Loans to the Granting Lender or
to any financial institutions (consented to by Borrower and Agent) providing
liquidity and/or credit support to or for the account of such SPC to support the
funding or maintenance of Loans and (ii) disclose on a confidential basis any
non-public information relating to its Loans to any rating agency, commercial
paper dealer or provider of any surety, guarantee or credit or liquidity
enhancement to such SPC. This Section 9.1(g) may not be amended without the
prior written consent of each Granting Lender, all or any of whose Loans are
being funded by an SPC at the time of such amendment. For the avoidance of
doubt, the Granting Lender shall for all purposes, including without limitation,
the approval of any amendment or waiver of any provision of any Loan Document or
the obligation to pay any amount otherwise payable by the Granting Lender under
the Loan Documents, continue to be the Lender of record hereunder.
9.2 Appointment of Agent. GE Capital is hereby appointed to
act on behalf of all Lenders as Agent under this Agreement and the other Loan
Documents. The provisions of this Section 9.2 are solely for the benefit of
Agent and Lenders and no Credit Party nor any other Person shall have any rights
as a third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement and the other Loan Documents, Agent
shall act solely as an agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any Credit Party or any other Person. Agent shall have no duties or
responsibilities except for those expressly set forth in this Agreement and the
other Loan Documents. The duties of Agent shall be mechanical and administrative
in nature and Agent shall not have, or be deemed to have, by reason of this
Agreement, any other Loan Document or otherwise a fiduciary relationship in
respect of any Lender. Except as expressly set forth in this Agreement and the
other Loan Documents, Agent shall not have any duty to disclose, and shall not
be liable for failure to disclose, any information relating to any Credit Party
or any of their respective Subsidiaries or any Account Debtor that is
communicated to or obtained by GE Capital or any of its Affiliates in any
capacity. Neither Agent nor any of its Affiliates nor any of their respective
officers, directors, employees, agents or representatives shall be liable to any
Lender for any action taken or omitted to be taken by it hereunder or under any
other Loan Document, or in connection herewith or therewith, except for damages
caused by its or their own gross negligence or willful misconduct.
If Agent shall request instructions from Requisite Lenders,
Requisite Revolving Lenders, Supermajority Revolving Lenders or all affected
Lenders with respect to any act or action (including failure to act) in
48
connection with this Agreement or any other Loan Document, then Agent shall be
entitled to refrain from such act or taking such action unless and until Agent
shall have received instructions from Requisite Lenders, Requisite Revolving
Lenders, Supermajority Revolving Lenders or all affected Lenders, as the case
may be, and Agent shall not incur liability to any Person by reason of so
refraining. Agent shall be fully justified in failing or refusing to take any
action hereunder or under any other Loan Document (a) if such action would, in
the opinion of Agent, be contrary to law or the terms of this Agreement or any
other Loan Document, (b) if such action would, in the opinion of Agent, expose
Agent to Environmental Liabilities or (c) if Agent shall not first be
indemnified to its satisfaction against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such action.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
hereunder or under any other Loan Document in accordance with the instructions
of Requisite Lenders, Requisite Revolving Lenders, Supermajority Revolving
Lenders or all affected Lenders, as applicable.
9.3 Agent's Reliance, Etc. Neither Agent nor any of its
Affiliates nor any of their respective directors, officers, agents or employees
shall be liable for any action taken or omitted to be taken by it or them under
or in connection with this Agreement or the other Loan Documents, except for
damages caused by its or their own gross negligence or willful misconduct.
Without limiting the generality of the foregoing, Agent: (a) may treat the payee
of any Note as the holder thereof until Agent receives written notice of the
assignment or transfer thereof signed by such payee and in form reasonably
satisfactory to Agent; (b) may consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken by it in good faith in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in or in connection with this
Agreement or the other Loan Documents; (d) shall not have any duty to ascertain
or to inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement or the other Loan Documents on the part of any
Credit Party or to inspect the Collateral (including the books and records) of
any Credit Party; (e) shall not be responsible to any Lender for the due
execution, legality, validity, enforceability, genuineness, sufficiency or value
of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (f) shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, consent, certificate or other instrument or writing (which may be by
telecopy, telegram, cable or telex) believed by it to be genuine and signed or
sent by the proper party or parties.
9.4 GE Capital and Affiliates. With respect to its Commitments
hereunder, GE Capital shall have the same rights and powers under this Agreement
and the other Loan Documents as any other Lender and may exercise the same as
though it were not Agent; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include GE Capital in its individual capacity. GE
Capital and its Affiliates may lend money to, invest in, and generally engage in
any kind of business with, any Credit Party, any of their Affiliates and any
Person who may do business with or own securities of any Credit Party or any
49
such Affiliate, all as if GE Capital were not Agent and without any duty to
account therefor to Lenders. GE Capital and its Affiliates may accept fees and
other consideration from any Credit Party for services in connection with this
Agreement or otherwise without having to account for the same to Lenders. Each
Lender acknowledges the potential conflict of interest between GE Capital as a
Lender holding disproportionate interests in the Loans and GE Capital as Agent.
9.5 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon Agent or any other Lender and based
on the Financial Statements referred to in Section 3.4(a) and such other
documents and information as it has deemed appropriate, made its own credit and
financial analysis of the Credit Parties and its own decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Each
Lender acknowledges the potential conflict of interest of each other Lender as a
result of Lenders holding disproportionate interests in the Loans, and expressly
consents to, and waives any claim based upon, such conflict of interest.
9.6 Indemnification. Lenders agree to indemnify Agent (to the
extent not reimbursed by Credit Parties and without limiting the obligations of
Borrower hereunder), ratably according to their respective Pro Rata Shares, from
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever that may be imposed on, incurred by, or asserted against Agent
in any way relating to or arising out of this Agreement or any other Loan
Document or any action taken or omitted to be taken by Agent in connection
therewith; provided, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence or
willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement and each other Loan Document, to the extent that Agent is not
reimbursed for such expenses by Credit Parties.
9.7 Successor Agent. Agent may resign at any time by giving
not less than 30 days' prior written notice thereof to Lenders and Borrower.
Upon any such resignation, the Requisite Lenders shall have the right to appoint
a successor Agent. If no successor Agent shall have been so appointed by the
Requisite Lenders and shall have accepted such appointment within 30 days after
the resigning Agent's giving notice of resignation, then the resigning Agent
may, on behalf of Lenders, appoint a successor Agent, which shall be a Lender,
if a Lender is willing to accept such appointment, or otherwise shall be a
commercial bank or financial institution or a subsidiary of a commercial bank or
financial institution if such commercial bank or financial institution is
50
organized under the laws of the United States of America or of any State thereof
and has a combined capital and surplus of at least $300,000,000. If no successor
Agent has been appointed pursuant to the foregoing, within 30 days after the
date such notice of resignation was given by the resigning Agent, such
resignation shall become effective and the Requisite Lenders shall thereafter
perform all the duties of Agent hereunder until such time, if any, as the
Requisite Lenders appoint a successor Agent as provided above. Any successor
Agent appointed by Requisite Lenders hereunder shall be subject to the approval
of Borrower, such approval not to be unreasonably withheld or delayed; provided
that such approval shall not be required if a Default or an Event of Default has
occurred and is continuing. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Agent. Upon the earlier of the acceptance of any appointment as Agent hereunder
by a successor Agent or the effective date of the resigning Agent's resignation,
the resigning Agent shall be discharged from its duties and obligations under
this Agreement and the other Loan Documents, except that any indemnity rights or
other rights in favor of such resigning Agent shall continue. After any
resigning Agent's resignation hereunder, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was acting as Agent under this Agreement and the other Loan Documents.
9.8 Setoff and Sharing of Payments. In addition to any rights
now or hereafter granted under applicable law and not by way of limitation of
any such rights, upon the occurrence and during the continuance of any Event of
Default and subject to Section 9.9(f), each Lender is hereby authorized at any
time or from time to time, without notice to any Credit Party or to any other
Person, any such notice being hereby expressly waived, to offset and to
appropriate and to apply any and all balances held by it at any of its offices
for the account of any Credit Party (regardless of whether such balances are
then due to such Credit Party) and any other properties or assets at any time
held or owing by that Lender or that holder to or for the credit or for the
account of any Credit Party against and on account of any of the Obligations
that are not paid when due. Any Lender exercising a right of setoff or otherwise
receiving any payment on account of the Obligations in excess of its Pro Rata
Share thereof shall purchase for cash (and the other Lenders or holders shall
sell) such participations in each such other Lender's or holder's Pro Rata Share
of the Obligations as would be necessary to cause such Lender to share the
amount so offset or otherwise received with each other Lender or holder in
accordance with their respective Pro Rata Shares (other than offset rights
exercised by any Lender with respect to Sections 1.13, 1.15 or 1.16). Each
Lender's obligation under this Section 9.8 shall be in addition to and not in
limitation of its obligations to purchase a participation in an amount equal to
its Pro Rata Share of the Swing Line Loans under Section 1.1. Each Credit Party
agrees, to the fullest extent permitted by law, that (a) any Lender may exercise
its right to offset with respect to amounts in excess of its Pro Rata Share of
the Obligations and may sell participations in such amounts so offset to other
Lenders and holders and (b) any Lender so purchasing a participation in the
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Loans made or other Obligations held by other Lenders or holders may exercise
all rights of offset, bankers' lien, counterclaim or similar rights with respect
to such participation as fully as if such Lender or holder were a direct holder
of the Loans and the other Obligations in the amount of such participation.
Notwithstanding the foregoing, if all or any portion of the offset amount or
payment otherwise received is thereafter recovered from the Lender that has
exercised the right of offset, the purchase of participations by that Lender
shall be rescinded and the purchase price restored without interest.
9.9 Advances; Payments; Non-Funding Lenders; Information;
Actions in Concert.
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(a) Advances; Payments.
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(i) Revolving Lenders shall refund or participate in
the Swing Line Loan in accordance with clauses (iii) and (iv) of Section 1.1(d).
If the Swing Line Lender declines to make a Swing Line Loan or if Swing Line
Availability is zero, Agent shall notify Revolving Lenders, promptly after
receipt of a Notice of Revolving Credit Advance and in any event prior to 1:00
p.m. (New York time) on the date such Notice of Revolving Advance is received,
by telecopy, telephone or other similar form of transmission. Each Revolving
Lender shall make the amount of such Lender's Pro Rata Share of such Revolving
Credit Advance available to Agent in same day funds by wire transfer to Agent's
account as set forth in Annex G not later than 3:00 p.m. (New York time) on the
requested funding date, in the case of an Index Rate Loan, and not later than
11:00 a.m. (New York time) on the requested funding date, in the case of a LIBOR
Loan. After receipt of such wire transfers (or, in the Agent's sole discretion,
before receipt of such wire transfers), subject to the terms hereof, Agent shall
make the requested Revolving Credit Advance to the Borrower designated by
Borrower in the Notice of Revolving Credit Advance. All payments by each
Revolving Lender shall be made without setoff, counterclaim or deduction of any
kind.
(ii) On the 2nd Business Day of each calendar week or
more frequently at Agent's election (each, a "Settlement Date"), Agent shall
advise each Lender by telephone, or telecopy of the amount of such Lender's Pro
Rata Share of principal, interest and Fees paid for the benefit of Lenders with
respect to each applicable Loan. Provided that each Lender has funded all
payments or Advances required to be made by it and has purchased all
participations required to be purchased by it under this Agreement and the other
Loan Documents as of such Settlement Date, Agent shall pay to each Lender such
Lender's Pro Rata Share of principal, interest and Fees paid by Borrower since
the previous Settlement Date for the benefit of such Lender on the Loans held by
it. To the extent that any Lender (a "Non-Funding Lender") has failed to fund
all such payments and Advances or failed to fund the purchase of all such
participations, Agent shall be entitled to set off the funding short-fall
against that Non-Funding Lender's Pro Rata Share of all payments received from
Borrower. Such payments shall be made by wire transfer to such Lender's account
(as specified by such Lender in Annex G or the applicable Assignment Agreement)
not later than 2:00 p.m. (New York time) on the next Business Day following each
Settlement Date.
(b) Availability of Lender's Pro Rata Share. Agent may assume
that each Revolving Lender will make its Pro Rata Share of each Revolving Credit
52
Advance available to Agent on each funding date. If such Pro Rata Share is not,
in fact, paid to Agent by such Revolving Lender when due, Agent will be entitled
to recover such amount on demand from such Revolving Lender without setoff,
counterclaim or deduction of any kind. If any Revolving Lender fails to pay the
amount of its Pro Rata Share forthwith upon Agent's demand, Agent shall promptly
notify Borrower and Borrower shall immediately repay such amount to Agent.
Nothing in this Section 9.9(b) or elsewhere in this Agreement or the other Loan
Documents shall be deemed to require Agent to advance funds on behalf of any
Revolving Lender or to relieve any Revolving Lender from its obligation to
fulfill its Commitments hereunder or to prejudice any rights that Borrower may
have against any Revolving Lender as a result of any default by such Revolving
Lender hereunder. To the extent that Agent advances funds to Borrower on behalf
of any Revolving Lender and is not reimbursed therefor on the same Business Day
as such Advance is made, Agent shall be entitled to retain for its account all
interest accrued on such Advance until reimbursed by the applicable Revolving
Lender.
(c) Return of Payments.
-------------------
(i) If Agent pays an amount to a Lender under this
Agreement in the belief or expectation that a related payment has been or will
be received by Agent from Borrower and such related payment is not received by
Agent, then Agent will be entitled to recover such amount from such Lender on
demand without setoff, counterclaim or deduction of any kind.
(ii) If Agent determines at any time that any amount
received by Agent under this Agreement must be returned to Borrower or paid to
any other Person pursuant to any insolvency law or otherwise, then,
notwithstanding any other term or condition of this Agreement or any other Loan
Document, Agent will not be required to distribute any portion thereof to any
Lender. In addition, each Lender will repay to Agent on demand any portion of
such amount that Agent has distributed to such Lender, together with interest at
such rate, if any, as Agent is required to pay to Borrower or such other Person,
without setoff, counterclaim or deduction of any kind.
(d) Non-Funding Lenders. The failure of any Non-Funding Lender
to make any Revolving Credit Advance or any payment required by it hereunder or
to purchase any participation in any Swing Line Loan to be made or purchased by
it on the date specified therefor shall not relieve any other Lender (each such
other Revolving Lender, an "Other Lender") of its obligations to make such
Advance or purchase such participation on such date, but neither any Other
Lender nor Agent shall be responsible for the failure of any Non-Funding Lender
to make an Advance, purchase a participation or make any other payment required
hereunder. Notwithstanding anything set forth herein to the contrary, a
Non-Funding Lender shall not have any voting or consent rights under or with
respect to any Loan Document or constitute a "Lender" or a "Revolving Lender"
(or be included in the calculation of "Requisite Lenders", "Requisite CapEx
Lender", "Requisite Revolving Lenders" or "Supermajority Revolving Lenders"
hereunder) for any voting or consent rights under or with respect to any Loan
Document. At Borrower's request, Agent or a Person reasonably acceptable to
Agent shall have the right with Agent's consent and in Agent's sole discretion
(but shall have no obligation) to purchase from any Non-Funding Lender, and each
53
Non-Funding Lender agrees that it shall, at Agent's request, sell and assign to
Agent or such Person, all of the Commitments of that Non-Funding Lender for an
amount equal to the principal balance of all Loans held by such Non-Funding
Lender and all accrued interest and fees with respect thereto through the date
of sale, such purchase and sale to be consummated pursuant to an executed
Assignment Agreement.
(e) Dissemination of Information. Agent shall use reasonable
efforts to provide Lenders with any notice of Default or Event of Default
received by Agent from, or delivered by Agent to, any Credit Party, with notice
of any Event of Default of which Agent has actually become aware and with notice
of any action taken by Agent following any Event of Default; provided, that
Agent shall not be liable to any Lender for any failure to do so, except to the
extent that such failure is attributable to Agent's gross negligence or willful
misconduct. Lenders acknowledge that Borrower is required to provide Financial
Statements and Collateral Reports to Lenders in accordance with Annexes D and E
hereto and agree that Agent shall have no duty to provide the same to Lenders.
(f) Actions in Concert. Anything in this Agreement to the
contrary notwithstanding, each Lender hereby agrees with each other Lender that
no Lender shall take any action to protect or enforce its rights arising out of
this Agreement or the Notes (including exercising any rights of setoff) without
first obtaining the prior written consent of Agent and Requisite Lenders, it
being the intent of Lenders that any such action to protect or enforce rights
under this Agreement and the Notes shall be taken in concert and at the
direction or with the consent of Agent or Requisite Lenders.
10. SUCCESSORS AND ASSIGNS
10.1 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding on and shall inure to the benefit of each Credit
Party, Agent, Lenders and their respective successors and assigns (including, in
the case of any Credit Party, a debtor-in-possession on behalf of such Credit
Party), except as otherwise provided herein or therein. No Credit Party may
assign, transfer, hypothecate or otherwise convey its rights, benefits,
obligations or duties hereunder or under any of the other Loan Documents without
the prior express written consent of Agent and Lenders. Any such purported
assignment, transfer, hypothecation or other conveyance by any Credit Party
without the prior express written consent of Agent and Lenders shall be void.
The terms and provisions of this Agreement are for the purpose of defining the
relative rights and obligations of each Credit Party, Agent and Lenders with
respect to the transactions contemplated hereby and no Person shall be a third
party beneficiary of any of the terms and provisions of this Agreement or any of
the other Loan Documents.
11. MISCELLANEOUS
11.1 Complete Agreement; Modification of Agreement. The Loan
Documents constitute the complete agreement between the parties with respect to
54
the subject matter thereof and may not be modified, altered or amended except as
set forth in Section 11.2. Any letter of interest, commitment letter or fee
letter (other than the GE Capital Fee Letter) or confidentiality agreement, if
any, between any Credit Party and Agent or any Lender or any of their respective
Affiliates, predating this Agreement and relating to a financing of
substantially similar form, purpose or effect shall be superseded by this
Agreement.
11.2 Amendments and Waivers.
-----------------------
(a) Except for actions expressly permitted to be taken by
Agent, no amendment, modification, termination or waiver of any provision of
this Agreement or any other Loan Document, or any consent to any departure by
any Credit Party therefrom, shall in any event be effective unless the same
shall be in writing and signed by Agent and Borrower, and by Requisite Lenders,
Requisite Revolving Lenders, Supermajority Revolving Lenders or all affected
Lenders, as applicable. Except as set forth in clauses (b) and (c) below, all
such amendments, modifications, terminations or waivers requiring the consent of
any Lenders shall require the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or
consent with respect to any provision of this Agreement that increases the
percentage advance rates set forth in the definition of the Borrowing Base, or
that makes less restrictive the nondiscretionary criteria for exclusion from
Eligible Accounts set forth in Section 1.6, shall be effective unless the same
shall be in writing and signed by Agent, Supermajority Revolving Lenders and
Borrower. No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement that waives compliance with the
conditions precedent set forth in Section 2.2 to the making of any Loan shall be
effective unless the same shall be in writing and signed by Agent, Requisite
Revolving Lenders and Borrower. Notwithstanding anything contained in this
Agreement to the contrary, no waiver or consent with respect to any Default or
any Event of Default shall be effective for purposes of the conditions precedent
to the making of Loans set forth in Section 2.2 and Section 2.3 unless the same
shall be in writing and signed by Agent, Requisite Revolving Lenders and
Borrower.
(c) No amendment, modification, termination or waiver shall,
unless in writing and signed by Agent and each Lender directly affected thereby:
(i) increase the principal amount of any Lender's Commitment (which action shall
be deemed to directly affect all Lenders; (ii) reduce the principal of, rate of
interest on or Fees payable with respect to any Loan of any affected Lender;
(iii) extend any scheduled payment date (other than payment dates of mandatory
prepayments under Section 1.3(b)(ii)-(v)) or final maturity date of the
principal amount of any Loan of any affected Lender; (iv) waive, forgive, defer,
extend or postpone any payment of interest or Fees as to any affected Lender;
(v) release any Guaranty or, except as otherwise permitted herein or in the
other Loan Documents, release, or permit any Credit Party to sell or otherwise
dispose of, any Collateral with a value exceeding $5,000,000 in the aggregate
(which action shall be deemed to directly affect all Lenders); (vi) change the
percentage of the Commitments or of the aggregate unpaid principal amount of the
Loans that shall be required for Lenders or any of them to take any action
hereunder; and (vii) amend or waive this Section 11.2 or the definitions of the
55
terms "Requisite Lenders", "Requisite Revolving Lenders" or "Supermajority
Revolving Lenders" insofar as such definitions affect the substance of this
Section 11.2. Furthermore, no amendment, modification, termination or waiver
affecting the rights or duties of Agent under this Agreement or any other Loan
Document shall be effective unless in writing and signed by Agent, in addition
to Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver shall be required for Agent to take
additional Collateral pursuant to any Loan Document. No amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the holder of that Note. No notice to or demand on
any Credit Party in any case shall entitle such Credit Party or any other Credit
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 11.2 shall be binding upon each holder
of the Notes at the time outstanding and each future holder of the Notes.
(d) If, in connection with any proposed amendment,
modification, waiver or termination (a "Proposed Change"):
(i) requiring the consent of all affected Lenders,
the consent of Requisite Lenders is obtained, but the consent of other Lenders
whose consent is required is not obtained (any such Lender whose consent is not
obtained as described in this clause (i) and in clauses (ii), (iii) and (iv)
below being referred to as a "Non-Consenting Lender"),
(ii) requiring the consent of Supermajority Revolving
Lenders, the consent of Requisite Revolving Lenders is obtained, but the consent
of Supermajority Revolving Lenders is not obtained,
(iii) requiring the consent of Requisite Revolving
Lenders, the consent of Revolving Lenders holding 51% or more of the aggregate
Revolving Loan Commitments is obtained, but the consent of Requisite Revolving
Lenders is not obtained, or
(iv) requiring the consent of Requisite Lenders, the
consent of Lenders holding 51% or more of the aggregate Commitments is obtained,
but the consent of Requisite Lenders is not obtained,
then, so long as Agent is not a Non-Consenting Lender, at Borrower's request,
Agent or a Person reasonably acceptable to Agent shall have the right, with
Agent's consent and in Agent's sole discretion (but with no obligation by Agent)
to purchase from such Non-Consenting Lenders, and such Non-Consenting Lenders
agree that they shall, upon Agent's request, sell and assign to Agent or such
Person, all of the Commitments of such Non-Consenting Lenders for an amount
equal to the principal balance of all Loans held by the Non-Consenting Lenders
and all accrued interest and Fees with respect thereto through the date of sale,
such purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
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(e) Upon payment in full in cash and performance of all of the
Obligations (other than indemnification Obligations), termination of the
Commitments and a release of all claims against Agent and Lenders, and so long
as no suits, actions, proceedings or claims are pending or threatened against
any Indemnified Person asserting any damages, losses or liabilities that are
Indemnified Liabilities, Agent shall deliver to Borrower termination statements,
mortgage releases and other documents necessary or appropriate to evidence the
termination of the Liens securing payment of the Obligations.
11.3 Fees and Expenses. Borrower shall reimburse (i) Agent for
all fees, costs and expenses (including the reasonable fees and expenses of all
of its counsel, advisors, consultants and auditors) and (ii) Agent (and, with
respect to clauses (c) and (d) below, all Lenders) for all fees, costs and
expenses, including the reasonable fees, costs and expenses of counsel or other
advisors (including environmental and management consultants and appraisers),
incurred in connection with the negotiation and preparation of the Loan
Documents and incurred in connection with:
(a) the forwarding to Borrower or any other Person on behalf
of Borrower by Agent of the proceeds of any Loan (including a wire transfer fee
of $25 per wire transfer);
(b) any amendment, modification or waiver of, consent with
respect to, or termination of, any of the Loan Documents or Related Transactions
Documents or advice in connection with the syndication and administration of the
Loans made pursuant hereto or its rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Agent, any Lender, Borrower or any other Person
and whether as a party, witness or otherwise) in any way relating to the
Collateral, any of the Loan Documents or any other agreement to be executed or
delivered in connection herewith or therewith, including any litigation,
contest, dispute, suit, case, proceeding or action, and any appeal or review
thereof, in connection with a case commenced by or against any or all of the
Borrower or any other Person that may be obligated to Agent by virtue of the
Loan Documents; including any such litigation, contest, dispute, suit,
proceeding or action arising in connection with any work-out or restructuring of
the Loans during the pendency of one or more Events of Default; provided that in
the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders; provided,
further, that no Person shall be entitled to reimbursement under this clause (c)
in respect of any litigation, contest, dispute, suit, proceeding or action to
the extent any of the foregoing results from such Person's gross negligence or
willful misconduct;
(d) any attempt to enforce any remedies of Agent against any
or all of the Credit Parties or any other Person that may be obligated to Agent
or any Lender by virtue of any of the Loan Documents, including any such attempt
to enforce any such remedies in the course of any work-out or restructuring of
57
the Loans during the pendency of one or more Events of Default; provided, that
in the case of reimbursement of counsel for Lenders other than Agent, such
reimbursement shall be limited to one counsel for all such Lenders;
(e) any workout or restructuring of the Loans during the
pendency of one or more Events of Default; and
(f) efforts to (i) monitor the Loans or any of the other
Obligations, (ii) evaluate, observe or assess any of the Credit Parties or their
respective affairs, and (iii) verify, protect, evaluate, assess, appraise,
collect, sell, liquidate or otherwise dispose of any of the Collateral;
including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service providers' fees arising from such
services and other advice, assistance or other representation, including those
in connection with any appellate proceedings, and all expenses, costs, charges
and other fees incurred by such counsel and others in connection with or
relating to any of the events or actions described in this Section 11.3, all of
which shall be payable, on demand, by Borrower to Agent. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees may include:
fees, costs and expenses of accountants, environmental advisors, appraisers,
investment bankers, management and other consultants and paralegals; court costs
and expenses; photocopying and duplication expenses; court reporter fees, costs
and expenses; long distance telephone charges; air express charges; telegram or
telecopy charges; secretarial overtime charges; and expenses for travel, lodging
and food paid or incurred in connection with the performance of such legal or
other advisory services.
11.4 No Waiver. Agent's or any Lender's failure, at any time
or times, to require strict performance by the Credit Parties of any provision
of this Agreement or any other Loan Document shall not waive, affect or diminish
any right of Agent or such Lender thereafter to demand strict compliance and
performance herewith or therewith. Any suspension or waiver of an Event of
Default shall not suspend, waive or affect any other Event of Default whether
the same is prior or subsequent thereto and whether the same or of a different
type. Subject to the provisions of Section 11.2, none of the undertakings,
agreements, warranties, covenants and representations of any Credit Party
contained in this Agreement or any of the other Loan Documents and no Default or
Event of Default by any Credit Party shall be deemed to have been suspended or
waived by Agent or any Lender, unless such waiver or suspension is by an
instrument in writing signed by an officer of or other authorized employee of
Agent and the applicable required Lenders, and directed to Borrower specifying
such suspension or waiver.
11.5 Remedies. Agent's and Lenders' rights and remedies under
this Agreement shall be cumulative and nonexclusive of any other rights and
remedies that Agent or any Lender may have under any other agreement, including
the other Loan Documents, by operation of law or otherwise. Recourse to the
Collateral shall not be required.
11.6 Severability. Wherever possible, each provision of this
Agreement and the other Loan Documents shall be interpreted in such a manner as
to be effective and valid under applicable law, but if any provision of this
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Agreement or any other Loan Document shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity without invalidating the remainder of such provision
or the remaining provisions of this Agreement or such other Loan Document.
11.7 Conflict of Terms. Except as otherwise provided in this
Agreement or any of the other Loan Documents by specific reference to the
applicable provisions of this Agreement, if any provision contained in this
Agreement conflicts with any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.
11.8 Confidentiality. Agent and each Lender agree to use
commercially reasonable efforts (equivalent to the efforts Agent or such Lender
applies to maintaining the confidentiality of its own confidential information)
to maintain as confidential all confidential information provided to them by the
Credit Parties and designated as confidential for a period of 2 years following
receipt thereof, except that Agent and any Lender may disclose such information
(a) to Persons employed or engaged by Agent or such Lender; (b) to any bona fide
assignee or participant or potential assignee or participant that has agreed to
comply with the covenant contained in this Section 11.8 (and any such bona fide
assignee or participant or potential assignee or participant may disclose such
information to Persons employed or engaged by them as described in clause (a)
above); (c) as required or requested by any Governmental Authority or reasonably
believed by Agent or such Lender to be compelled by any court decree, subpoena
or legal or administrative order or process; (d) as, on the advice of Agent's or
such Lender's counsel, is required by law; (e) in connection with the exercise
of any right or remedy under the Loan Documents or in connection with any
Litigation to which Agent or such Lender is a party; or (f) that ceases to be
confidential through no fault of Agent or any Lender.
11.9 GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN
ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF
CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS
SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.
EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS
LOCATED IN XXX XXXX XXXXXX, XXXX XX XXX XXXX, XXX XXXX SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE CREDIT
PARTIES, AGENT AND LENDERS PERTAINING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY
OF THE OTHER LOAN DOCUMENTS; PROVIDED, THAT AGENT, LENDERS AND THE CREDIT
PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY X
XXXXX XXXXXXX XXXXXXX XX XXX XXXX XXXXXX; PROVIDED FURTHER, THAT NOTHING IN THIS
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AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR
TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL
OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER IN FAVOR OF AGENT. EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS
IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH
COURT, AND EACH CREDIT PARTY HEREBY WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY
MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON
CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF
AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE
ADDRESS SET FORTH IN ANNEX H OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF
OR 3 DAYS AFTER DEPOSIT IN THE UNITED STATES MAILS, PROPER POSTAGE PREPAID.
11.10 Notices. Except as otherwise provided herein, whenever
it is provided herein that any notice, demand, request, consent, approval,
declaration or other communication shall or may be given to or served upon any
of the parties by any other parties, or whenever any of the parties desires to
give or serve upon any other parties any communication with respect to this
Agreement, each such notice, demand, request, consent, approval, declaration or
other communication shall be in writing and shall be deemed to have been validly
served, given or delivered: (a) upon the earlier of actual receipt and 3
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid; (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
11.10); (c) 1 Business Day after deposit with a reputable overnight courier with
all charges prepaid or (d) when delivered, if hand-delivered by messenger, all
of which shall be addressed to the party to be notified and sent to the address
or facsimile number indicated in Annex H or to such other address (or facsimile
number) as may be substituted by notice given as herein provided. The giving of
any notice required hereunder may be waived in writing by the party entitled to
receive such notice. Failure or delay in delivering copies of any notice,
demand, request, consent, approval, declaration or other communication to any
Person (other than Borrower or Agent) designated in Annex H to receive copies
shall in no way adversely affect the effectiveness of such notice, demand,
request, consent, approval, declaration or other communication.
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11.11 Section Titles. The Section titles and Table of Contents
contained in this Agreement are and shall be without substantive meaning or
content of any kind whatsoever and are not a part of the agreement between the
parties hereto.
11.12 Counterparts. This Agreement may be executed in any
number of separate counterparts, each of which shall collectively and separately
constitute one agreement.
11.13 WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN
CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY
RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE
STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES
DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS.
THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL
SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER
SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY CREDIT
PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED THERETO.
11.14 Press Releases and Related Matters. Each Credit Party
executing this Agreement agrees that neither it nor its Affiliates will in the
future issue any press releases or other public disclosure using the name of GE
Capital or its affiliates or referring to this Agreement, the other Loan
Documents or the Related Transactions Documents without at least 2 Business
Days' prior notice to GE Capital and without the prior written consent of GE
Capital unless (and only to the extent that) such Credit Party or Affiliate is
required to do so under law and then, in any event, such Credit Party or
Affiliate will consult with GE Capital before issuing such press release or
other public disclosure. Each Credit Party consents to the publication by Agent
or any Lender of a tombstone or similar advertising material relating to the
financing transactions contemplated by this Agreement. Agent reserves the right
to provide to industry trade organizations information necessary and customary
for inclusion in league table measurements.
11.15 Reinstatement. This Agreement shall remain in full force
and effect and continue to be effective should any petition be filed by or
against Borrower for liquidation or reorganization, should Borrower become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of
Borrower's assets, and shall continue to be effective or to be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
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otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
11.16 Advice of Counsel. Each of the parties represents to
each other party hereto that it has discussed this Agreement and, specifically,
the provisions of Sections 11.9 and 11.13, with its counsel.
11.17 No Strict Construction. The parties hereto have
participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement.
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IN WITNESS WHEREOF, this Agreement has been duly executed as
of the date first written above.
BLACK WARRIOR WIRELINE
CORPORATION, as Borrower
By:
--------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Executive Officer
GENERAL ELECTRIC CAPITAL
CORPORATION, as Agent and Lender
By:
--------------------------------
Xxxx Xxxxxx
Duly Authorized Signatory
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