EXHIBIT 10.8
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this
"Agreement"), is dated December 31, 2003 (and effective as of February 3, 2004)
between and among, on the one hand, the lenders identified on the signature
pages hereof (such lenders, together with their respective successors and
assigns, are referred to hereinafter each individually as a "Lender" and
collectively as the "Lenders"), XXXXX FARGO FOOTHILL, INC., a California
corporation, formerly known as Foothill Capital Corporation, as the arranger and
administrative agent for the Lenders ("Agent"), and, on the other hand, HYPERCOM
CORPORATION, a Delaware corporation ("Parent"), and each of Parent's
Subsidiaries identified on the signature pages hereof (Parent and such
Subsidiaries are referred to hereinafter each individually as a "Borrower", and
individually and collectively, jointly and severally, as the "Borrowers").
WHEREAS, Borrowers, Agent and the Lenders are parties to that
certain Loan and Security Agreement, dated as of July 31, 2001 (the "Original
Loan Agreement", as amended, supplemented, and otherwise modified from time to
time prior to the Closing Date, is referred to herein as the "Existing Loan
Agreement");
WHEREAS, Borrowers, Agent and the Lenders desire to amend and
restate the Existing Loan Agreement in its entirety as provided in this
Agreement, effective as of February 3, 2004, it being understood that (a) no
repayment of the obligations under the Existing Loan Agreement is being effected
hereby, but merely an amendment and restatement in accordance with the terms
hereof, and (b) the elimination of references to various payment obligations
that have been previously satisfied in full shall not reflect a modification in
any way of the underlying payment obligation with respect thereto.
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged, Borrowers, Agent, and Lenders
hereby agree as follows:
1. DEFINITIONS AND CONSTRUCTION.
1.1 XXXXXXXXXXX.Xx used in this Agreement, the following terms shall
have the following definitions:
"Accounts" means all of Borrowers' now owned or hereafter
acquired right, title, and interest with respect to "accounts" (as that term is
defined in the Code), and any and all supporting obligations in respect thereof.
"ACH Transactions" means any cash management or related
services (including the Automated Clearing House processing of electronic funds
transfers through the direct Federal Reserve Fedline system) provided by Xxxxx
Fargo or its Affiliates for the account of Borrowers or their Subsidiaries.
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"Acquisition" means any purchase or other acquisition by a
Borrower of the Stock of any other Person, or of all or substantially all of the
assets of any other Person.
"Additional Documents" has the meaning set forth in Section
4.4.
"Administrative Borrower" has the meaning set forth in Section
17.9.
"Advances" has the meaning set forth in Section 2.1.
"Affiliate" means, as applied to any Person, any other Person
who controls, is controlled by, or is under common control with, such Person.
For purposes of this definition, "control" means the possession, directly or
indirectly, of the power to direct the management and policies of a Person,
whether through the ownership of Stock, by contract, or otherwise; provided,
however, that, for purposes of Section 7.14: (a) any Person which owns directly
or indirectly 10% or more of the securities having ordinary voting power for the
election of directors or other members of the governing body of a Person or 10%
or more of the partnership or other ownership interests of a Person (other than
as a limited partner of such Person) shall be deemed to control such Person; (b)
each director (or comparable manager) of a Person shall be deemed to be an
Affiliate of such Person; and (c) each partnership or joint venture in which a
Person is a partner or joint venturer shall be deemed to be an Affiliate of such
Person.
"Agent" means WFF, solely in its capacity as agent for the
Lenders hereunder, and any successor thereto.
"Agent's Account" means the Deposit Account of Agent
identified on Schedule A-1.
"Agent Advances" has the meaning set forth in Section
2.3(c)(i).
"Agent's Liens" means the Liens granted by Borrowers to Agent
for the benefit of the Lender Group under this Agreement or the other Loan
Documents.
"Agent-Related Persons" means Agent together with its
Affiliates, officers, directors, employees, and agents.
"Agreement" has the meaning set forth in the preamble hereto.
"Amended and Restated Fee Letter" means that certain amended
and restated fee letter, dated as of even date herewith, between Borrowers and
Agent, in form and substance satisfactory to Agent.
"Applicable Prepayment Premium" means an amount equal to (a)
during the period of time from and after the Closing Date up to July 31, 2004,
1% multiplied by the Maximum Revolver Amount, (b) during the period of time from
and including July 31, 2004 up to the Maturity Date, 0.5% multiplied by the
Maximum Revolver Amount, provided that the Applicable Prepayment Premium will be
waived if the Obligations hereunder are refinanced entirely with a facility
provided (in whole or in part) or agented by Xxxxx Fargo.
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"Assignee" has the meaning set forth in Section 14.1.
"Assignment and Acceptance" means an Assignment and Acceptance
substantially in the form of Exhibit A-1.
"Authorized Person" means any officer or other employee of
Administrative Borrower.
"Availability" means, as of any date of determination, if such
date is a Business Day, and determined at the close of business on the
immediately preceding Business Day, if such date of determination is not a
Business Day, the amount that Borrowers are entitled to borrow as Advances under
Section 2.1 (after giving effect to all then outstanding Obligations (other than
Bank Products Obligations) and all sublimits and reserves applicable hereunder).
"Bank Product Agreements" means those certain cash management
service agreements entered into from time to time by Borrowers or their
Subsidiaries in connection with any of the Bank Products.
"Bank Product Obligations" means all obligations, liabilities,
contingent reimbursement obligations, fees, and expenses owing by Borrowers or
their Subsidiaries to Xxxxx Fargo or its Affiliates pursuant to or evidenced by
the Bank Product Agreements and irrespective of whether for the payment of
money, whether direct or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, and including all such amounts that Borrowers
are obligated to reimburse to Agent or any member of the Lender Group as a
result of Agent or such member of the Lender Group purchasing participations or
executing indemnities or reimbursement obligations with respect to the Bank
Products provided to Borrowers or their Subsidiaries pursuant to the Bank
Product Agreements.
"Bank Product Reserves" means, as of any date of
determination, the amount of reserves that Agent has established (based upon
Xxxxx Fargo's or its Affiliate's reasonable determination of the credit exposure
in respect of then extant Bank Products) for Bank Products then provided or
outstanding.
"Bank Products" means any service or facility extended to
Borrowers or their Subsidiaries by Xxxxx Fargo or any Affiliate of Xxxxx Fargo
including: (a) credit cards, (b) credit card processing services, (c) debit
cards, (d) purchase cards, (e) ACH Transactions, (f) cash management, including
controlled disbursement, accounts or services, or (g) Hedge Agreements.
"Bankruptcy Code" means the United States Bankruptcy Code, as
in effect from time to time.
"Base Rate" means, the rate of interest announced within Xxxxx
Fargo at its principal office in San Francisco as its "prime rate", with the
understanding that the "prime rate" is one of Xxxxx Fargo's base rates (not
necessarily the lowest of such rates) and serves
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as the basis upon which effective rates of interest are calculated for those
loans making reference thereto and is evidenced by the recording thereof after
its announcement in such internal publication or publications as Xxxxx Fargo may
designate.
"Benefit Plan" means a "defined benefit plan" (as defined in
Section 3(35) of ERISA) for which any Borrower or any Subsidiary or ERISA
Affiliate of any Borrower has been an "employer" (as defined in Section 3(5) of
ERISA) within the past six years.
"Board of Directors" means the board of directors (or
comparable managers) of Parent or any committee thereof duly authorized to act
on behalf thereof.
"Books" means all of each Borrower's now owned or hereafter
acquired books and records (including all of its Records indicating,
summarizing, or evidencing its assets (including the Collateral) or liabilities,
all of its Records relating to its business operations or financial condition,
and all of its goods or General Intangibles related to such information).
"Borrower" and "Borrowers" have the respective meanings set
forth in the preamble to this Agreement.
"Borrowing" means a borrowing hereunder consisting of Advances
made on the same day by the Lenders (or Agent on behalf thereof), or by Agent in
the case of an Agent Advance, in each case, to Administrative Borrower.
"Borrowing Base" has the meaning set forth in Section 2.1.
"Business Day" means any day that is not a Saturday, Sunday,
or other day on which national banks are authorized or required to close.
"Capital Lease" means a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.
"Capitalized Lease Obligation" means any Indebtedness
represented by obligations under a Capital Lease.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States or issued by any
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within 1 year from the date of acquisition thereof, (b)
marketable direct obligations issued by any state of the United States or any
political subdivision of any such state or any public instrumentality thereof
maturing within 1 year from the date of acquisition thereof and, at the time of
acquisition, having the highest rating obtainable from either S&P or Xxxxx'x,
(c) commercial paper maturing no more than 1 year from the date of acquisition
thereof and, at the time of acquisition, having a rating of A-1 or P-2, or
better, from S&P or Xxxxx'x and (d) certificates of deposit or bankers'
acceptances maturing within 1 year from the date of acquisition thereof either
(i) issued by any bank organized under the laws of the United States or any
state thereof which bank has a rating of A or A2, or better, from S&P or
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Xxxxx'x or (ii) certificates of deposit less than or equal to $100,000 in the
aggregate issued by any other bank insured by the Federal Deposit Insurance
Corporation, or (e) shares of any money market mutual fund that (i) has at least
95% of its assets invested continuously in the types of investments referred to
in the clauses above, (ii) has net assets of not less than $500,000,000, and
(iii) has the highest rating obtainable from either S&P or Xxxxx'x.
"Closing Date" means the date on which Agent sends
Administrative Borrower a written notice that each of the conditions precedent
set forth in Section 3.1 either have been satisfied or have been waived.
"Code" means the California Uniform Commercial Code, as in
effect from time to time.
"Collateral" means all of each Borrower's now owned or
hereafter acquired right, title, and interest in and to the Eligible Loans any
rights to payment or other General Intangibles in respect of the Eligible Loans,
and the proceeds and products, whether tangible or intangible, of any of the
foregoing, including Investment Property, money, Deposit Accounts, General
Intangibles, Negotiable Collateral, Securities Accounts or other tangible or
intangible property resulting from the sale, exchange, collection, or other
disposition of any of the foregoing, or any portion thereof or interest therein,
and the proceeds thereof.
"Collections" means all cash, checks, notes, instruments, and
other items of payment of Borrowers constituting proceeds of Accounts.
"Commitment" means, with respect to each Lender, its Revolver
Commitment or its Total Commitment, as the context requires, and, with respect
to all Lenders, their Revolver Commitments or their Total Commitments, as the
context requires, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Compliance Certificate" means a certificate substantially in
the form of Exhibit C-1 delivered by the chief financial officer of Parent to
Agent.
"Daily Balance" means, with respect to each day during the
term of this Agreement, the amount of an Obligation owed at the end of such day.
"DDA" means any checking or other demand deposit account
maintained by any Borrower.
"Default" means an event, condition, or default that, with the
giving of notice, the passage of time, or both, would be an Event of Default.
"Defaulting Lender" means any Lender that fails to make any
Advance (or other extension of credit) that it is required to make hereunder on
the date that it is required to do so hereunder.
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"Defaulting Lender Rate" means (a) the Base Rate for the first
3 days from and after the date the relevant payment is due, and (b) thereafter,
at the interest rate then applicable to Advances.
"Deposit Account" means any deposit account (as that term is
defined in the Code).
"Designated Account" means the Deposit Account of
Administrative Borrower identified on Schedule D-1.
"Designated Account Bank" has the meaning ascribed thereto on
Schedule D 1.
"Designated Fraction" means the result of (a) 1 divided by (b)
0.90.
"Designated Rate" means, the rate of interest announced within
Xxxxx Fargo at its principal office in San Francisco as its "business time
account rate", with the understanding that the "business time account rate" is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Xxxxx Fargo may designate.
"Dollars" or "$" means United States dollars.
"Eligible Loan" and "Eligible Loans" have the respective
meanings set forth in Section 2.1(e).
"Eligible Transferee" means (a) a commercial bank organized under the laws of
the United States, or any state thereof, and having total assets in excess of
$500,000,000 or has a rating of A or A2, or better, from S&P or Xxxxx'x, (b) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development or a political
subdivision of any such country and which has total assets in excess of
$500,000,000 or has a rating of A or A2, or better, from S&P or Xxxxx'x,
provided that such bank is acting through a branch or agency located in the
United States, (c) a finance company, insurance company, or other financial
institution or fund that is engaged in making, purchasing, or otherwise
investing in commercial loans in the ordinary course of its business and having
(together with its Affiliates) total assets in excess of $500,000,000 or has a
rating of A or A2, or better, from S&P or Xxxxx'x, (d) any Affiliate (other than
individuals) of a Lender that was party hereto as of the Closing Date, and (e)
any other Person approved by Agent (whose approval shall not be unreasonably
withheld, conditioned or delayed).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto.
"ERISA Affiliate" means (a) any Person subject to ERISA whose
employees are treated as employed by the same employer as the employees of a
Borrower under IRC
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Section 414(b), (b) any trade or business subject to ERISA whose employees are
treated as employed by the same employer as the employees of a Borrower under
IRC Section 414(c), (c) solely for purposes of Section 302 of ERISA and Section
412 of the IRC, any organization subject to ERISA that is a member of an
affiliated service group of which a Borrower is a member under IRC Section
414(m), or (d) solely for purposes of Section 302 of ERISA and Section 412 of
the IRC, any Person subject to ERISA that is a party to an arrangement with a
Borrower and whose employees are aggregated with the employees of a Borrower
under IRC Section 414(o).
"Event of Default" has the meaning set forth in Section 8.
"Exchange Act" means the Securities Exchange Act of 1934, as
in effect from time to time.
"FEIN" means Federal Employer Identification Number.
"Funding Date" means the date on which a Borrowing occurs.
"GAAP" means generally accepted accounting principles as in
effect from time to time in the United States, consistently applied.
"General Intangibles" means all of Borrowers' now owned or
hereafter acquired right, title, and interest with respect to general
intangibles, payment intangibles, contract rights, rights to payment, rights
arising under common law, statutes, or regulations, choses or things in action,
goodwill, patents, trade names, trademarks, servicemarks, Copyrights,
blueprints, drawings, purchase orders, customer lists, monies due or recoverable
from pension funds, route lists, rights to payment and other rights under any
royalty or licensing agreements, infringement claims, computer programs,
information contained on computer disks or tapes, software, literature, reports,
catalogs, money, insurance premium rebates, tax refunds, and tax refund claims,
and any and all supporting obligations in respect of any of the foregoing, and
any other personal property other than goods, Accounts, Investment Property, and
Negotiable Collateral.
"Governing Documents" means, with respect to any Person, the
certificate or articles of incorporation, by-laws, or other organizational
documents of such Person.
"Governmental Authority" means any federal, state, local, or
other governmental or administrative body, instrumentality, department, or
agency or any court, tribunal, administrative hearing body, arbitration panel,
commission, or other similar dispute-resolving panel or body.
"Hedge Agreement" means any and all transactions, agreements,
or documents now existing or hereafter entered into between Borrowers or their
Subsidiaries and Xxxxx Fargo or its Affiliates, which provide for an interest
rate, credit, commodity or equity swap, cap, floor, collar, forward foreign
exchange transaction, currency swap, cross currency rate swap, currency option,
or any combination of, or option with respect to, these or similar
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transactions, for the purpose of hedging Borrowers' or their Subsidiaries'
exposure to fluctuations in interest or exchange rates, loan, credit exchange,
security or currency valuations or commodity prices.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under (a) interest rate swap agreements, interest
rate cap agreements and interest rate collar agreements, (b) other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates, and (c) any foreign currency futures contract, option or similar
agreement or arrangement designed to protect such Person against fluctuations in
foreign currency rates, in each case to the extent such obligations are incurred
in the ordinary course of business.
"Indebtedness" means (a) all obligations of a Person for
borrowed money, (b) all obligations of a Person evidenced by bonds, debentures,
notes, or other similar instruments and all reimbursement or other obligations
of a Person in respect of letters of credit, bankers acceptances, interest rate
swaps, or other financial products, (c) all obligations of a Person under
Capital Leases, (d) all obligations or liabilities of others secured by a Lien
on any asset of a Person, irrespective of whether such obligation or liability
is assumed, (e) all obligations of a Person for the deferred purchase price of
assets (other than trade debt incurred in the ordinary course of a Person's
business and repayable in accordance with customary trade practices), and (f)
any obligation of a Person guaranteeing or intended to guarantee (whether
directly or indirectly guaranteed, endorsed, co-made, discounted, or sold with
recourse to a such Person) any obligation of any other Person.
"Indemnified Liabilities" has the meaning set forth in Section
11.3.
"Indemnified Person" has the meaning set forth in Section
11.3.
"Insolvency Proceeding" means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any other
state or federal bankruptcy or insolvency law, assignments for the benefit of
creditors, formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.
"Intercompany Advance" means loans, advances or transfers of
cash or Inventory in the ordinary course of business from Parent to one of its
Subsidiaries or from one of Parent's Subsidiaries to Parent or another
Subsidiary of Parent.
"Intercompany Subordination Agreement" means a subordination
agreement executed and delivered by each Borrower to Agent, the form and
substance of which is satisfactory to Agent.
"Inventory" means all Borrowers' now owned or hereafter
acquired right, title, and interest with respect to inventory, including goods
held for sale or lease or to be furnished under a contract of service, goods
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that are leased by a Borrower as lessor, goods that are furnished by a Borrower
under a contract of service, and raw materials, work in process, or materials
used or consumed in a Borrower's business.
"Investment" means, with respect to any Person, any investment
by such Person in any other Person (including Affiliates) in the form of loans,
guarantees, advances, or capital contributions (excluding (a) commission,
travel, and similar advances to officers and employees of such Person made in
the ordinary course of business, and (b) bona fide Accounts arising from the
sale of goods or rendition of services in the ordinary course of business
consistent with past practice), purchases or other acquisitions for
consideration of Indebtedness or Stock, and any other items that are or would be
classified as investments on a balance sheet prepared in accordance with GAAP.
"Investment Property" means all of Borrowers' now owned or
hereafter acquired right, title, and interest with respect to "investment
property" as that term is defined in the Code, and any and all supporting
obligations in respect thereof.
"IRC" means the Internal Revenue Code of 1986, as in effect
from time to time.
"Issuing Lender" means WFF or any other Lender that, at the
request of Administrative Borrower and with the consent of Agent agrees, in such
Lender's sole discretion, to become an Issuing Lender for the purpose of issuing
L/Cs or L/C Undertakings pursuant to Section 2.12.
"L/C" has the meaning set forth in Section 2.12(a).
"L/C Disbursement" means a payment made by the Issuing Lender
pursuant to a Letter of Credit.
"L/C Undertaking" has the meaning set forth in Section
2.12(a).
"Lender" and "Lenders" have the respective meanings set forth
in the preamble to this Agreement, and shall include any other Person made a
party to this Agreement in accordance with the provisions of Section 14.1.
"Lender Group" means, individually and collectively, each of
the Lenders (including the Issuing Lender) and Agent.
"Lender Group Expenses" means all (a) costs or expenses
(including taxes, and insurance premiums) required to be paid by a Borrower
under any of the Loan Documents that are paid or incurred by any one or more
members of the Lender Group, (b) fees or charges paid or incurred by any one or
more members of the Lender Group in connection with the Lender Group's
transactions with Borrowers, including, fees or charges for photocopying,
notarization, couriers and messengers, telecommunication, public record searches
(including tax lien, litigation, judgment, and UCC searches), (c) actual costs
and expenses incurred by any one or more members of the Lender Group in the
disbursement
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of funds to or for the account of Borrowers (by wire transfer or
otherwise), (d) charges paid or incurred by any one or more members of the
Lender Group resulting from the dishonor of checks, (e) reasonable costs and
expenses paid or incurred by the Lender Group to correct any default or enforce
any provision of the Loan Documents, or in gaining possession of, maintaining,
handling, preserving, storing, shipping, selling, preparing for sale, or
advertising to sell the Collateral, or any portion thereof, irrespective of
whether a sale is consummated, (f) audit fees and expenses of any one or more
members of the Lender Group related to audit examinations of the Books to the
extent of the fees and charges (and up to the amount of any limitation)
contained in this Agreement, (g) reasonable costs and expenses of third party
claims or any other suit paid or incurred by any one or more members of the
Lender Group in enforcing or defending the Loan Documents or in connection with
the transactions contemplated by the Loan Documents or any one or more members
of the Lender Group's relationship with any Borrower or any guarantor of the
Obligations, (h) Agent's and each Lender's reasonable fees and expenses
(including attorneys fees) incurred in advising, structuring, drafting,
reviewing, administering, or amending the Loan Documents, and (i) Agent's and
each Lender's reasonable fees and expenses (including attorneys fees) incurred
in terminating, enforcing (including attorneys fees and expenses incurred in
connection with a "workout," a "restructuring," or an Insolvency Proceeding
concerning any Borrower or in exercising rights or remedies under the Loan
Documents), or defending the Loan Documents, irrespective of whether suit is
brought.
"Lender-Related Person" means, with respect to any Lender,
such Lender, together with such Lender's Affiliates, and the officers,
directors, employees, and agents of such Lender.
"Letter of Credit" means an L/C or an L/C Undertaking, as the
context requires.
"Letter of Credit Usage" means, as of any date of
determination, the aggregate undrawn amount of all outstanding Letters of
Credit.
"Lien" means any interest in an asset securing an obligation
owed to, or a claim by, any Person other than the owner of the asset, whether
such interest shall be based on the common law, statute, or contract, whether
such interest shall be recorded or perfected, and whether such interest shall be
contingent upon the occurrence of some future event or events or the existence
of some future circumstance or circumstances, including the lien or security
interest arising from a mortgage, deed of trust, encumbrance, pledge,
hypothecation, assignment, deposit arrangement, security agreement, conditional
sale or trust receipt, or from a lease, consignment, or bailment for security
purposes and also including reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases, and other title
exceptions and encumbrances affecting Real Property.
"Loan Account" has the meaning set forth in Section 2.10.
"Loan Documents" means this Agreement, the Bank Products
Agreements, the Amended and Restated Fee Letter, the Intercompany Subordination
Agreement, the Letters
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of Credit, the Officers' Certificate, any note or notes executed by a Borrower
in connection with this Agreement and payable to a member of the Lender Group,
and any other agreement entered into, now or in the future, by any Borrower and
the Lender Group or Agent on behalf thereof in connection with this Agreement.
"Material Adverse Change" means (a) a material adverse change
in the business, prospects, operations, results of operations, assets,
liabilities or condition (financial or otherwise) of Borrowers taken as a whole,
(b) a material impairment of either the Parent's ability individually, or the
Borrowers' ability taken as a whole, to perform its obligations under the Loan
Documents to which it is a party or of the Lender Group's ability to enforce the
Obligations or realize upon the Collateral, or (c) a material impairment of the
enforceability or priority of the Agent's Liens with respect to the Collateral
as a result of an action or failure to act on the part of a Borrower.
"Maturity Date" has the meaning set forth in Section 3.4.
"Maximum Revolver Amount" means $10,000,000.
"Negotiable Collateral" means all of Borrowers' now owned and
hereafter acquired right, title, and interest with respect to letters of credit,
letter of credit rights, instruments, promissory notes, drafts, documents, and
chattel paper (including electronic chattel paper and tangible chattel paper),
and any and all supporting obligations in respect thereof.
"Obligations" means (a) all loans, Advances, debts, principal,
interest (including any interest that, but for the provisions of the Bankruptcy
Code, would have been due and payable), contingent reimbursement obligations
with respect to outstanding Letters of Credit, premiums, liabilities (including
all amounts charged to Borrowers' Loan Account pursuant hereto), obligations,
fees (including the fees provided for in the Fee Letter), charges, costs, Lender
Group Expenses (including any fees or expenses that, but for the provisions of
the Bankruptcy Code, would have accrued), lease payments, guaranties, covenants,
and duties of any kind and description owing by Borrowers to the Lender Group
pursuant to or evidenced by the Loan Documents and irrespective of whether for
the payment of money, whether direct or indirect, absolute or contingent, due or
to become due, now existing or hereafter arising, and including all interest not
paid when due and all Lender Group Expenses that Borrowers are required to pay
or reimburse by the Loan Documents, by law, or otherwise, and (b) all Bank
Product Obligations. Any reference in this Agreement or in the Loan Documents to
the Obligations shall include all amendments, changes, extensions,
modifications, renewals replacements, substitutions, and supplements, thereto
and thereof, as applicable, both prior and subsequent to any Insolvency
Proceeding.
"Officers' Certificate" means the representations and
warranties of officers form submitted by Agent to Administrative Borrower,
together with Borrowers' completed responses to the inquiries set forth therein,
the form and substance of such responses to be satisfactory to Agent.
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"Originating Lender" has the meaning set forth in Section
14.1(e).
"Overadvance" has the meaning set forth in Section 2.5.
"Parent" has the meaning set forth in the preamble to this
Agreement. "Participant" has the meaning set forth in Section
14.1(e).
"Permitted Acquisition Indebtedness" means, with respect to an
Acquisition, Indebtedness or other obligations of the acquired entity or seller
under such proposed Acquisition or the subject of such Acquisition, that any of
the Borrowers or any of their Subsidiaries have assumed, or for which such
Borrowers or Subsidiaries have otherwise become liable.
"Permitted Discretion" means a determination made in good
faith and in the exercise of reasonable (from the perspective of a secured
asset-based lender) business judgment.
"Permitted Investments" means (a) Investments in Cash
Equivalents, (b) Investments in negotiable instruments for collection, (c)
advances made in connection with purchases of goods or services in the ordinary
course of business, (d) Investments consisting of Intercompany Advances provided
that such Investments are in the form of Indebtedness, such Investments shall be
subject to the terms and conditions of the Intercompany Subordination Agreement,
(e) Investments consisting of the Hedging Obligations described in Section
7.1(k), and (f) Investments constituting Acquisitions.
"Permitted Liens" means Liens held by Agent for the benefit of
Agent and the Lenders.
"Permitted Protest" means the right of the applicable Borrower
to protest any Lien (other than any such Lien that secures the Obligations),
taxes (other than payroll taxes or taxes that are the subject of a United States
federal tax lien), or rental payment, provided that (a) a reserve with respect
to such obligation is established on the Books in such amount as is required
under GAAP, (b) any such protest is instituted promptly and prosecuted
diligently by the applicable Borrower in good faith, and (c) Agent is satisfied
in its Permitted Discretion that, while any such protest is pending, there will
be no impairment of the enforceability, validity, or priority of any of the
Agent's Liens.
"Permitted Reorganization Transaction" means any transaction
pursuant to which (a) any Borrower is merged with or into another Borrower,
provided that with respect to any such transaction involving Parent, Parent is
the continuing or surviving Person, (b) any Borrower other than Parent is merged
with or into a Subsidiary of a Borrower, provided that, on or before the date of
the consummation of such transaction, the continuing or surviving Person with
respect to such transaction is a Borrower or becomes joined as a party to the
Loan Agreement and the other Loan Documents as a Borrower pursuant to a joinder
agreement which is in form and substance reasonably satisfactory to Agent, or
(c) all or any
12
part of the Stock in, or the business, property or assets of, any Borrower other
than Parent, is conveyed, sold, leased, transferred or otherwise disposed of, in
one transaction or a series of transactions, provided that, in connection with
each such transaction, the interest of such Borrower in the Collateral is either
retained by a Borrower that is a Subsidiary of Parent or is transferred to
Parent or another Borrower that is a Subsidiary of Parent.
"Person" means natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint ventures, trusts, land trusts, business trusts, or
other organizations, irrespective of whether they are legal entities, and
governments and agencies and political subdivisions thereof.
"Projections" means Parent's forecasted (a) balance sheets,
(b) profit and loss statements, and (c) cash flow statements, all prepared on a
consistent basis with Parent's historical financial statements, together with
appropriate supporting details and a statement of underlying assumptions.
"Pro Rata Share" means, as of any date of determination:
(a) with respect to a Lender's obligation to
make Advances and receive payments of principal, interest, fees, costs, and
expenses with respect thereto, (i) prior to the Revolver Commitments being
terminated or reduced to zero, the percentage obtained by dividing (y) such
Lender's Revolver Commitment, by (z) the aggregate Revolver Commitments of all
Lenders, and (ii) from and after the time that the Revolver Commitments have
been terminated or reduced to zero, the percentage obtained by dividing (y) the
aggregate outstanding principal amount of such Lender's Advances by (z) the
aggregate outstanding principal amount of all Advances,
(b) with respect to a Lender's obligation to
participate in Letters of Credit, to reimburse the Issuing Lender, and to
receive payments of fees with respect thereto, (i) prior to the Revolver
Commitments being terminated or reduced to zero, the percentage obtained by
dividing (y) such Lender's Revolver Commitment, by (z) the aggregate Revolver
Commitments of all Lenders, and (ii) from and after the time that the Revolver
Commitments have been terminated or reduced to zero, the percentage obtained by
dividing (y) the aggregate outstanding principal amount of such Lender's
Advances by (z) the aggregate outstanding principal amount of all Advances, and
(c) with respect to all other matters as to a
particular Lender (including the indemnification obligations arising under
Section 16.7), the percentage obtained by dividing (i) such Lender's Revolver
Commitment, by (ii) the aggregate amount of Revolver Commitments of all Lenders;
provided, however, that in the event the Revolver Commitments have been
terminated or reduced to zero, Pro Rata Share shall be the percentage obtained
by dividing (A) the principal amount of such Lender's Advances by (B) the
principal amount of all outstanding Advances.
"Public Indebtedness" means unsecured indebtedness evidenced
by notes, debentures, or other similar instruments issued after the Closing Date
pursuant to either (a) a
13
registered public offering or (b) a private placement of such instruments in
accordance with an exemption from registration under the Securities Act of 1933
or the Securities Exchange Act of 1934 or similar law.
"Qualified Cash" means, as of any date of determination, the
sum of (a) the amount of unrestricted cash and Cash Equivalents of Parent and
the other Borrowers that are Subsidiaries of Parent plus (b) the then
outstanding balance of the Eligible Loans.
"Purchase Money Indebtedness" means Indebtedness (other than
the Obligations, but including Capitalized Lease Obligations), incurred at the
time of, or within 20 days after, the acquisition of any fixed assets for the
purpose of financing all or any part of the acquisition cost thereof.
"Record" means information that is inscribed on a tangible
medium or which is stored in an electronic or other medium and is retrievable in
perceivable form.
"Report" has the meaning set forth in Section 16.17.
"Revolver Commitment" means, with respect to each Lender, its
Revolver Commitment, and, with respect to all Lenders, their Revolver
Commitments, in each case as such Dollar amounts are set forth beside such
Lender's name under the applicable heading on Schedule C-1 or on the signature
page of the Assignment and Acceptance pursuant to which such Lender became a
Lender hereunder in accordance with the provisions of Section 14.1.
"Revolver Usage" means, as of any date of determination, the
sum of (a) the then extant amount of outstanding Advances, plus (b) the then
extant amount of the Letter of Credit Usage.
"Risk Participation Liability" means, as to each Letter of
Credit, all reimbursement obligations of Borrowers to the Issuing Lender with
respect to an L/C Undertaking, consisting of (a) the amount available to be
drawn or which may become available to be drawn, (b) all amounts that have been
paid by the Issuing Lender to the Underlying Issuer to the extent not reimbursed
by Borrowers, whether by the making of an Advance or otherwise, and (c) all
accrued and unpaid interest, fees, and expenses payable with respect thereto.
"SEC" means the United States Securities and Exchange
Commission and any successor thereto.
"Securities Account" means a "securities account" as that term
is defined in the Code.
"Settlement" has the meaning set forth in Section 2.3(d)(i).
"Settlement Date" has the meaning set forth in Section
2.3(d)(i).
14
"Solvent" means, with respect to any Person on a particular
date, that such Person is not insolvent (as such term is defined in the Uniform
Fraudulent Transfer Act).
"Stock" means all shares, options, warrants, interests,
participations, or other equivalents (regardless of how designated) of or in a
Person, whether voting or nonvoting, including common stock, preferred stock, or
any other "equity security" (as such term is defined in Rule 3a11-1 of the
General Rules and Regulations promulgated by the SEC under the Exchange Act).
"Subordinated Debt" means Indebtedness of Borrower, the
principal of which will not mature or be subject to a sinking fund within one
year of the Maturity Date, and the repayment terms and conditions and
subordination provisions of which are satisfactory to Agent in its reasonable
discretion, it being understood that Agent will consult with the other Lenders
regarding such repayment terms and conditions and subordination provisions.
"Subsidiary" of a Person means a corporation, partnership,
limited liability company, or other entity in which that Person directly or
indirectly owns or controls the shares of Stock having ordinary voting power to
elect a majority of the board of directors (or appoint other comparable
managers) of such corporation, partnership, limited liability company, or other
entity.
"Taxes" has the meaning set forth in Section 16.11.
"Total Commitment" means, with respect to each Lender, its
Total Commitment, and, with respect to all Lenders, their Total Commitments, in
each case as such Dollar amounts are set forth beside such Lender's name under
the applicable heading on Schedule C-1 or on the signature page of the
Assignment and Acceptance pursuant to which such Lender became a Lender
hereunder in accordance with the provisions of Section 14.1.
"Underlying Issuer" means a third Person which is the
beneficiary of an L/C Undertaking and which has issued a letter of credit at the
request of the Issuing Lender for the benefit of Borrowers.
"Underlying Letter of Credit" means a letter of credit that
has been issued by an Underlying Issuer.
"United States" means the United States, the District of
Columbia and each of the fifty states and any territory of the United States.
"Voidable Transfer" has the meaning set forth in Section 17.7.
"Xxxxx Fargo" means Xxxxx Fargo Bank, National Association, a
national banking association.
"WFF" means Xxxxx Fargo Foothill, Inc., a California
corporation, formerly known as Foothill Capital Corporation.
15
1.2 ACCOUNTING TERMS. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. When used herein, the
term "financial statements" shall include the notes and schedules thereto.
Whenever the term "Borrowers" or the term "Parent" is used in respect of a
financial covenant or a related definition, it shall be understood to mean
Parent and its Subsidiaries on a consolidated basis unless the context clearly
requires otherwise.
1.3 CODE. Any terms used in this Agreement that are defined in the
Code shall be construed and defined as set forth in the Code unless otherwise
defined herein.
1.4 CONSTRUCTION. Unless the context of this Agreement or any
other Loan Document clearly requires otherwise, references to the plural include
the singular, references to the singular include the plural, the term
"including" is not limiting, and the term "or" has, except where otherwise
indicated, the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder," and similar terms in this Agreement
or any other Loan Document refer to this Agreement or such other Loan Document,
as the case may be, as a whole and not to any particular provision of this
Agreement or such other Loan Document, as the case may be. Section, subsection,
clause, schedule, and exhibit references herein are to this Agreement unless
otherwise specified. Any reference in this Agreement or in the other Loan
Documents to any agreement, instrument, or document shall include all
alterations, amendments, changes, extensions, modifications, renewals,
replacements, substitutions, joinders, and supplements, thereto and thereof, as
applicable (subject to any restrictions on such alterations, amendments,
changes, extensions, modifications, renewals, replacements, substitutions,
joinders, and supplements set forth herein). Any reference herein to the
repayment in full of the Obligations shall mean the repayment in full in cash of
all Obligations other than contingent indemnification Obligations and other than
any Bank Product Obligations that, at such time, are allowed by the applicable
Bank Product Provider to remain outstanding and are not required to be repaid or
cash collateralized pursuant to the provisions of this Agreement. Any reference
herein to any Person shall be construed to include such Person's successors and
assigns. Any requirement of a writing contained herein or in the other Loan
Documents shall be satisfied by the transmission of a Record and any Record
transmitted shall constitute a representation and warranty as to the accuracy
and completeness of the information contained therein.
1.5 SCHEDULES AND EXHIBITS. All of the schedules and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.
2. LOAN AND TERMS OF PAYMENT.
2.1 REVOLVER ADVANCES.
(a) Subject to the terms and conditions of this
Agreement, and during the term of this Agreement, each Lender with a Revolver
Commitment agrees (severally, not jointly or jointly and severally) to make
advances ("Advances") to Borrowers in an amount at any one time outstanding not
to exceed such Lender's Pro Rata Share of an amount equal to the lesser of (i)
the Maximum Revolver Amount less the Letter of Credit Usage or (ii) the
16
Borrowing Base less the Letter of Credit Usage. For purposes of this Agreement,
"Borrowing Base," as of any date of determination, shall mean the result of:
(x) 90% of the then outstanding balance
of the Eligible Loans, minus
(y) the sum of (i) the Bank Products
Reserve, and (ii) the aggregate amount of reserves, if any, established by Agent
under Section 2.1 (b).
(b) Anything to the contrary in this Section 2.1
notwithstanding, Agent shall have the right to establish reserves in such
amounts, and with respect to such matters, as Agent in its Permitted Discretion
shall deem necessary or appropriate, against the Borrowing Base with respect to
amounts owing by Borrowers to any Person to the extent secured by a Lien on, or
trust over, any portion of the Collateral.
(c) The Lenders with Revolver Commitments shall have
no obligation to make additional Advances hereunder to the extent such
additional Advances would cause the Revolver Usage to exceed the Maximum
Revolver Amount.
(d) Amounts borrowed pursuant to this Section may be
repaid and, subject to the terms and conditions of this Agreement, reborrowed at
any time during the term of this Agreement.
(e) On or before the date on which Administrative
Borrower requests the initial Advance or other extension of credit hereunder on
or after the Closing Date, the Borrowers shall make a loan to the Agent in a
Dollar amount (in immediately available funds) not less than the Designated
Fraction times the Revolver Usage that would exist after giving effect to the
Advances and the Letters of Credit proposed to be issued on such date (such
loan, together with all other similar loans made by Borrowers to Agent after
such date, being referred to each as an "Eligible Loan" and collectively as the
"Eligible Loans") (it being understood for the avoidance of doubt that, subject
to the limitations, conditions and other provisions of this Section 2.1, Section
3.2, and the other provisions of this Agreement, one or more Advances or other
extensions of credit may be made or extended from time to time by the Lender
Group to the Borrowers in accordance with the provisions of this Agreement). In
the event that, after the Closing Date, Borrowers desire to increase the amount
of the Borrowing Base by increasing the outstanding balance of the Eligible
Loans, (i) the Obligations that have been charged to Borrowers' Loan Account
shall be offset against the then outstanding balance of the Eligible Loans, (ii)
the Borrowers shall be deemed to have immediately requested a new Advance in an
amount equal to the amount of the Obligations repaid pursuant to clause (i)
above, and (iii) any balance of the existing Eligible Loans remaining after
giving effect to the offset described in clause (i), together with (A) the
proceeds of the new Advance described above in clause (ii) and (B) the proceeds
of any additional Eligible Loan made by Borrowers to Agent, shall collectively
be deemed to be a single new Eligible Loan by Borrowers to Agent (it being
understood that each of the transactions described above shall be deemed to have
taken place simultaneously and that any determination regarding the accrual of
interest with respect to the outstanding
17
amount of the Obligations shall be calculated without giving effect to the
deemed repayment and reborrowing described above in clauses (i) and (ii)). Agent
shall be entitled to use the proceeds of each Eligible Loan (which proceeds
shall be the sole and separate property of WFF) in its sole and absolute
discretion and shall not be obligated to segregate any proceeds of any Eligible
Loan from any other funds received by Agent or by WFF. Agent shall only be
obligated to repay the net amount of all Eligible Loans owing at such time as
the Obligations shall have been repaid in full (including the cash
collateralization of all Bank Product Obligations and of any outstanding Letters
of Credit in accordance with the provisions of this Agreement) and all of the
Commitments have been irrevocably terminated (which net amount shall be
calculated after giving effect to the application of the then outstanding
balance of the Eligible Loans to satisfy any outstanding Obligations). The
Eligible Loans shall bear interest at a per annum rate equal to the Designated
Rate and, so long as no Default or Event of Default has occurred and is
continuing, shall be payable by Agent to Administrative Borrower, in arrears,
upon the prior written request by Administrative Borrower to Agent, on the first
Business Day of each fiscal quarter of Borrowers at any time that any Eligible
Loan is outstanding.
2.2 [INTENTIONALLY OMITTED]
2.3 BORROWING PROCEDURES AND SETTLEMENTS.
(a) PROCEDURE FOR BORROWING. Each Borrowing shall be
made by an irrevocable written request by an Authorized Person delivered to
Agent (which notice must be received by Agent no later than 10:00 a.m.
(California time) on the Business Day prior to the date that is the requested
Funding Date in the case of a request for an Advance specifying (i) the amount
of such Borrowing, and (ii) the requested Funding Date, which shall be a
Business Day. At Agent's election, in lieu of delivering the above-described
written request, any Authorized Person may give Agent telephonic notice of such
request by the required time, with such telephonic notice to be confirmed in
writing within 24 hours of the giving of such notice.
(b) MAKING OF ADVANCES.
(i) Promptly after receipt of a request
for a Borrowing pursuant to Section 2.3(a), Agent
shall notify the Lenders, not later than 1:00 p.m.
(California time) on the Business Day immediately
preceding the Funding Date applicable thereto, by
telecopy, telephone, or other similar form of
transmission, of the requested Borrowing. Each Lender
shall make the amount of such Lender's Pro Rata Share
of the requested Borrowing available to Agent in
immediately available funds, to Agent's Account, not
later than 10:00 a.m. (California time) on the
Funding Date applicable thereto. After Agent's
receipt of the proceeds of such Advances upon
satisfaction of the applicable conditions precedent
set forth in Section 3 hereof, Agent shall make the
proceeds thereof available to Administrative Borrower
on the
18
applicable Funding Date by transferring immediately
available funds equal to such proceeds received by
Agent to Administrative Borrower's Designated
Account; provided, however, that, subject to the
provisions of Section 2.3(g), Agent shall not request
any Lender to make, and no Lender shall have the
obligation to make, any Advance if Agent shall have
actual knowledge that (1) one or more of the
applicable conditions precedent set forth in Section
3 will not be satisfied on the requested Funding Date
for the applicable Borrowing unless such condition
has been waived, or (2) the requested Borrowing would
exceed the Availability on such Funding Date.
(ii) Unless Agent receives notice from a
Lender on or prior to the Closing Date or, with
respect to any Borrowing after the Closing Date, at
least 1 Business Day prior to the date of such
Borrowing, that such Lender will not make available
as and when required hereunder to Agent for the
account of Borrowers the amount of that Lender's Pro
Rata Share of the Borrowing, Agent may assume that
each Lender has made or will make such amount
available to Agent in immediately available funds on
the Funding Date and Agent may (but shall not be so
required), in reliance upon such assumption, make
available to Borrowers on such date a corresponding
amount. If and to the extent any Lender shall not
have made its full amount available to Agent in
immediately available funds and Agent in such
circumstances has made available to Borrowers such
amount, that Lender shall on the Business Day
following such Funding Date make such amount
available to Agent, together with interest at the
Defaulting Lender Rate for each day during such
period. A notice submitted by Agent to any Lender
with respect to amounts owing under this subsection
shall be conclusive, absent demonstrable error. If
such amount is so made available, such payment to
Agent shall constitute such Lender's portion of the
requested Advance on the date of Borrowing for all
purposes of this Agreement. If such amount is not
made available to Agent on the Business Day following
the Funding Date, Agent will notify Administrative
Borrower of such failure to fund and, upon demand by
Agent, Borrowers shall pay such amount to Agent for
Agent's account, together with interest thereon for
each day elapsed since the date of such Borrowing, at
a rate per annum equal to the interest rate
applicable at the time to the Advances composing such
Borrowing. The failure of any Lender to make its
portion of any Advance on any Funding Date shall not
relieve any other Lender of any obligation hereunder
to make available its portion of the requested
Advance on such Funding Date, but no Lender shall be
responsible for the failure of any other Lender to
make available its portion of the requested Advance
to be made by such other Lender on any Funding Date.
19
(iii) Agent shall not be obligated to
transfer to a Defaulting Lender any payments made by
Borrowers to Agent for the Defaulting Lender's
benefit, and, in the absence of such transfer to the
Defaulting Lender, Agent shall transfer any such
payments to each other non-Defaulting Lender member
of the Lender Group ratably in accordance with their
Commitments (but only to the extent that such
Defaulting Lender's portion of the Advance was funded
by the other members of the Lender Group) or, if so
directed by Administrative Borrower and if no Default
or Event of Default had occurred and is continuing
(and to the extent such Defaulting Lender's Advance
was not funded by the Lender Group), retain same to
be re-advanced to Borrowers as if such Defaulting
Lender had made Advances to Borrowers. Subject to the
foregoing, Agent may hold and, in its Permitted
Discretion, re-lend to Borrowers for the account of
such Defaulting Lender the amount of all such
payments received and retained by it for the account
of such Defaulting Lender. Solely for the purposes of
voting or consenting to matters with respect to the
Loan Documents, such Defaulting Lender shall be
deemed not to be a "Lender" and such Lender's
Commitment shall be deemed to be zero. This Section
shall remain effective with respect to such Lender
until (x) the Obligations under this Agreement shall
have been declared or shall have become immediately
due and payable, (y) the non-Defaulting Lenders,
Agent, and Administrative Borrower shall have waived
such Defaulting Lender's default in writing, or (z)
the Defaulting Lender makes its Pro Rata Share of the
applicable Advance and pays to Agent all amounts
owing by Defaulting Lender in respect thereof. The
operation of this Section shall not be construed to
increase or otherwise affect the Commitment of any
Lender, to relieve or excuse the performance by such
Defaulting Lender or any other Lender of its duties
and obligations hereunder, or to relieve or excuse
the performance by Borrowers of their duties and
obligations hereunder to Agent or to the Lenders
other than such Defaulting Lender. Any such failure
to fund by any Defaulting Lender shall constitute a
material breach by such Defaulting Lender of this
Agreement and shall entitle Administrative Borrower
at its option, upon written notice to Agent, to
arrange for a substitute Lender to assume the
Commitment of such Defaulting Lender, such substitute
Lender to be acceptable to Agent. In connection with
the arrangement of such a substitute Lender, the
Defaulting Lender shall have no right to refuse to be
replaced hereunder, and agrees to execute and deliver
a completed form of Assignment and Acceptance
Agreement in favor of the substitute Lender (and
agrees that it shall be deemed to have executed and
delivered such document if it fails to do so) subject
only to being repaid its share of the outstanding
Obligations (other than Bank Product Obligations)
(including an assumption of its Pro Rata Share of the
Risk Participation Liability) without any premium or
20
penalty of any kind whatsoever; provided further,
however, that any such assumption of the Commitment
of such Defaulting Lender shall not be deemed to
constitute a waiver of any of the Lender Groups' or
Borrowers' rights or remedies against any such
Defaulting Lender arising out of or in relation to
such failure to fund.
(c) AGENT ADVANCES.
(i) Agent hereby is authorized by
Borrowers and the Lenders, from time to time in
Agent's sole discretion, (1) after the occurrence and
during the continuance of a Default or an Event of
Default, or (2) at any time that any of the other
applicable conditions precedent set forth in Section
3 have not been satisfied, to make Advances to
Borrowers on behalf of the Lenders that Agent, in its
Permitted Discretion deems necessary or desirable (A)
to preserve or protect the Collateral, or any portion
thereof, (B) to enhance the likelihood of repayment
of the Obligations (other than the Bank Product
Obligations), or (C) to pay any other amount
chargeable to Borrowers pursuant to the terms of this
Agreement, including Lender Group Expenses and the
costs, fees, and expenses described in Section 10
(any of the Advances described in this Section 2.3(c)
shall be referred to as "Agent Advances"); provided,
that notwithstanding anything to the contrary
contained in this Section 2.3(c), the aggregate
principal amount of Agent Advances outstanding at any
one time, when taken together with the aggregate
principal amount of Overadvances made in accordance
with Section 2.3(g) outstanding at any time, shall
not exceed an amount equal to $2,000,000. Each Agent
Advance is an Advance hereunder and shall be subject
to all the terms and conditions applicable to other
Advances, except that all payments thereon shall be
payable to Agent solely for its own account (and for
the account of the holder of any participation
interest with respect to such Agent Advance).
(ii) The Agent Advances shall be
repayable by Borrowers on demand and secured by the
Agent's Liens granted to Agent under the Loan
Documents, shall constitute Advances and Obligations
hereunder, and shall bear interest at the rate
applicable from time to time to Advances.
(d) SETTLEMENT. It is agreed that each Lender's
funded portion of the Advances is intended by the Lenders to equal, at all
times, such Lender's Pro Rata Share of the outstanding Advances. Such agreement
notwithstanding, Agent and the other Lenders agree (which agreement shall not be
for the benefit of or enforceable by Borrowers) that in order to facilitate the
administration of this Agreement and the other Loan Documents,
21
settlement among them as to the Advances and the Agent Advances shall take place
on a periodic basis in accordance with the following provisions:
(i) Agent shall request settlement
("Settlement") with the Lenders on a weekly basis, or
on a more frequent basis if so determined by Agent,
(1) for itself, with respect to each Agent Advance,
and (2) with respect to Collections received, as to
each by notifying the Lenders by telecopy, telephone,
or other similar form of transmission, of such
requested Settlement, no later than 2:00 p.m.
(California time) on the Business Day immediately
prior to the date of such requested Settlement (the
date of such requested Settlement being the
"Settlement Date"). Such notice of a Settlement Date
shall include a summary statement of the amount of
outstanding Advances and Agent Advances for the
period since the prior Settlement Date. Subject to
the terms and conditions contained herein (including
Section 2.3(b)(iii)): (y) if a Lender's balance of
the Advances and Agent Advances exceeds such Lender's
Pro Rata Share of the Advances and Agent Advances as
of a Settlement Date, then Agent shall, by no later
than 12:00 p.m. (California time) on the Settlement
Date, transfer in immediately available funds to the
account of such Lender as such Lender may designate,
an amount such that each such Lender shall, upon
receipt of such amount, have as of the Settlement
Date, its Pro Rata Share of the Advances and Agent
Advances, and (z) if a Lender's balance of the
Advances and Agent Advances is less than such
Lender's Pro Rata Share of the Advances and Agent
Advances as of a Settlement Date, such Lender shall
no later than 12:00 p.m. (California time) on the
Settlement Date transfer in immediately available
funds to the Agent's Account, an amount such that
each such Lender shall, upon transfer of such amount,
have as of the Settlement Date, its Pro Rata Share of
the Advances and Agent Advances. Such amounts made
available to Agent under clause (z) of the
immediately preceding sentence shall be applied
against the amounts of the applicable Agent Advance
and, together with the portion of such Agent Advance
representing such Lender's Pro Rata Share thereof,
shall constitute Advances of such Lenders. If any
such amount is not made available to Agent by any
Lender on the Settlement Date applicable thereto to
the extent required by the terms hereof, Agent shall
be entitled to recover for its account such amount on
demand from such Lender together with interest
thereon at the Defaulting Lender Rate.
(ii) In determining whether a Lender's
balance of the Advances and Agent Advances is less
than, equal to, or greater than such Lender's Pro
Rata Share of the Advances and Agent Advances as of a
Settlement Date, Agent shall, as part of the relevant
Settlement, apply to such balance the portion of
payments actually received in good
22
funds by Agent with respect to principal, interest
and fees payable by Borrowers and allocable to the
Lenders hereunder, and proceeds of Collateral. To the
extent that a net amount is owed to any such Lender
after such application, such net amount shall be
distributed by Agent to that Lender as part of such
next Settlement.
(iii) During the period between
Settlement Dates, Agent with respect to Agent
Advances, and each Lender (subject to the effect of
letter agreements between Agent and individual
Lenders) with respect to the Advances other than
Agent Advances, shall be entitled to interest at the
applicable rate or rates payable under this Agreement
on the daily amount of funds employed Agent or the
Lenders, as applicable.
(e) NOTATION. Agent shall record on its books the
principal amount of the Advances owing to each Lender and Agent Advances owing
to Agent, and the interests therein of each Lender, from time to time. In
addition, each Lender is authorized, at such Lender's option, to note the date
and amount of each payment or prepayment of principal of such Lender's Advances
in its books and records, including computer records, such books and records
constituting conclusive evidence, absent manifest error, of the accuracy of the
information contained therein.
(f) LENDERS' FAILURE TO PERFORM. All Advances (other
than Agent Advances) shall be made by the Lenders contemporaneously and in
accordance with their Pro Rata Shares. It is understood that (i) no Lender shall
be responsible for any failure by any other Lender to perform its obligation to
make any Advance (or other extension of credit) hereunder, nor shall any
Commitment of any Lender be increased or decreased as a result of any failure by
any other Lender to perform its obligations hereunder, and (ii) no failure by
any Lender to perform its obligations hereunder shall excuse any other Lender
from its obligations hereunder.
(g) OPTIONAL OVERADVANCES. (i) Any contrary provision
of this Agreement notwithstanding, the Lenders hereby authorize Agent and Agent
may, but is not obligated to, knowingly and intentionally, continue to make
Advances to Borrowers notwithstanding that an Overadvance exists or thereby
would be created, so long as (A) after giving effect to such Advances, the
Revolver Usage does not exceed the Borrowing Base by more than an amount equal
to $2,000,000, (B) after giving effect to such Advances the outstanding Revolver
Usage (except for and excluding amounts charged to the Loan Account for
interest, fees, or Lender Group Expenses) does not exceed the Maximum Revolver
Amount, and (C) at the time of the making of any such Advance, Agent does not
believe, in good faith, that the Overadvance created by such Advance will be
outstanding for more than 120 days. The foregoing provisions are for the
exclusive benefit of Agent and the Lenders and are not intended to benefit
Borrowers in any way. The Advances that are made pursuant to this Section 2.3(g)
shall be subject to the same terms and conditions as any other Advance except
that the rate of interest applicable thereto shall be the rate applicable to
Advances
23
under Section 2.6(c) hereof without regard to the presence or absence of a
Default or Event of Default.
(i) In the event Agent obtains actual
knowledge that the Revolver Usage exceeds the amounts
permitted by the preceding paragraph, regardless of
the amount of, or reason for, such excess, Agent
shall notify Lenders as soon as practicable (and
prior to making any (or any additional) intentional
Overadvances (except for and excluding amounts
charged to the Loan Account for interest, fees, or
Lender Group Expenses) unless Agent determines that
prior notice would result in imminent harm to the
Collateral or its value), and the Lenders with
Revolver Commitments thereupon shall, together with
Agent, jointly determine the terms of arrangements
that shall be implemented with Borrowers and intended
to reduce, within a reasonable time, the outstanding
principal amount of the Advances to Borrowers to an
amount permitted by the preceding paragraph. In the
event Agent or any Lender disagrees over the terms of
reduction or repayment of any Overadvance, the terms
of reduction or repayment thereof shall be
implemented according to the determination of the
Required Lenders.
(ii) Each Lender with a Revolver
Commitment shall be obligated to settle with Agent as
provided in Section 2.3(d) for the amount of such
Lender's Pro Rata Share of any unintentional
Overadvances by Agent reported to such Lender, any
intentional Overadvances made as permitted under this
Section 2.3(g), and any Overadvances resulting from
the charging to the Loan Account of interest, fees,
or Lender Group Expenses.
2.4 PAYMENTS.
(a) PAYMENTS BY BORROWERS.
(i) Except as otherwise expressly
provided herein, all payments by Borrowers shall be made to
Agent's Account for the account of the Lender Group and shall
be made in immediately available funds, no later than 11:00
a.m. (California time) on the date specified herein. Any
payment received by Agent later than 11:00 a.m. (California
time), shall be deemed to have been received on the following
Business Day and any applicable interest or fee shall continue
to accrue until such following Business Day.
(ii) Unless Agent receives notice from
Administrative Borrower prior to the date on which any payment
is due to the Lenders that Borrowers will not make such
payment in full as and when required, Agent may assume that
Borrowers have made (or will make) such payment in full to
Agent on such date in immediately available funds and Agent
may (but shall
24
not be so required), in reliance upon such assumption,
distribute to each Lender on such due date an amount equal to
the amount then due such Lender. If and to the extent
Borrowers do not make such payment in full to Agent on the
date when due, each Lender severally shall repay to Agent on
demand such amount distributed to such Lender, together with
interest thereon at the Defaulting Lender Rate for each day
from the date such amount is distributed to such Lender until
the date repaid.
(b) APPORTIONMENT AND APPLICATION.
(i) Except as otherwise provided with
respect to Defaulting Lenders and except as otherwise provided
in the Loan Documents (including letter agreements between
Agent and individual Lenders), aggregate principal and
interest payments shall be apportioned ratably among the
Lenders (according to the unpaid principal balance of the
Obligations to which such payments relate held by each Lender)
and payments of fees and expenses (other than fees or expenses
that are for Agent's separate account, after giving effect to
any letter agreements between Agent and individual Lenders)
shall be apportioned ratably among the Lenders having a Pro
Rata Share of the type of Commitment or Obligation to which a
particular payment relates. All payments shall be remitted to
Agent and all such payments not relating to principal or
interest of specific Obligations (other than payments
constituting the payment of specific fees), and all proceeds
of Collateral received by Agent, shall be applied as follows:
A. first, to pay any Lender Group Expenses then
due to Agent under the Loan Documents, until paid in full,
B. second, to pay any Lender Group Expenses
then due to the Lenders under the Loan Documents, on a ratable basis, until paid
in full,
C. third, to pay any fees then due to Agent
(for its separate account, after giving effect to any letter agreements between
Agent and the individual Lenders) under the Loan Documents until paid in full,
D. fourth, to pay any fees then due to any or
all of the Lenders (after giving effect to any letter agreements between Agent
and individual Lenders) under the Loan Documents, on a ratable basis, until paid
in full,
E. fifth, to pay interest due in respect of all
Agent Advances, until paid in full,
F. sixth, ratably to pay interest due in
respect of the Advances (other than Agent Advances) until paid in full,
25
G. seventh, to pay the principal of all Agent
Advances until paid in full,
H. eighth, so long as no Event of Default has
occurred and is continuing, and at Agent's election (which election Agent agrees
will not be made if an Overadvance would be created thereby), to pay amounts
then due and owing by Borrower or its Subsidiaries in respect of Bank Products,
until paid in full,
I. ninth, so long as no Event of Default has
occurred and is continuing, to pay the principal of all Advances until paid in
full,
J. tenth, if an Event of Default has occurred
and is continuing, ratably (i) to pay the principal of all Advances until paid
in full, (ii) to Agent, to be held by Agent, for the ratable benefit of Issuing
Lender and those Lenders having a Revolver Commitment, as cash collateral in an
amount up to 105% of the then extant Letter of Credit Usage until paid in full,
and (iii) to Agent, to be held by Agent, for the benefit of Xxxxx Fargo and its
Affiliates, as cash collateral in an amount up to the amount of the Bank Product
Reserve established prior to the occurrence of, and not in contemplation of, the
subject Event of Default until Administrative Borrower's and its Subsidiaries'
obligations in respect of the then extant Bank Products have been paid in full
or the cash collateral amount has been exhausted,
K. eleventh, to pay any other Obligations
(including the provision of amounts to Agent, to be held by Agent, for the
benefit of Xxxxx Fargo and its Affiliates, as cash collateral in an amount up to
the amount determined by Agent in its Permitted Discretion as the amount
necessary to secure Administrative Borrower's and its Subsidiaries' obligations
in respect of the then extant Bank Products), until paid in full, and
L. twelfth, to Borrowers (to be wired to the
Designated Account) or such other Person
entitled thereto under applicable law.
(ii) Agent promptly shall distribute to
each Lender, pursuant to the applicable wire instructions
received from each Lender in writing, such funds as it may be
entitled to receive, subject to a Settlement delay as provided
in Section 2.3(d).
(iii) In each instance, so long as no
Default or Event of Default has occurred and is continuing,
Section 2.4(b) shall not be deemed to apply to any payment by
Borrowers specified by Borrowers to be for the payment of
specific Obligations then due and payable (or prepayable)
under any provision of this Agreement.
(iv) For purposes of the foregoing,
"paid in full" means payment of all amounts owing under the
Loan Documents according to the terms thereof, including loan
fees, service fees, professional fees, interest (and
specifically including interest accrued after the commencement
of any
26
Insolvency Proceeding), default interest, interest on
interest, and expense reimbursements, whether or not the same
would be or is allowed or disallowed in whole or in part in
any Insolvency Proceeding.
(v) In the event of a direct conflict
between the priority provisions of this Section 2.4 and other
provisions contained in any other Loan Document, it is the
intention of the parties hereto that such priority provisions
in such documents shall be read together and construed, to the
fullest extent possible, to be in concert with each other. In
the event of any actual, irreconcilable conflict that cannot
be resolved as aforesaid, the terms and provisions of this
Section 2.4 shall control and govern.
2.5 OVERADVANCES. If, at any time or for any reason, the amount of
Obligations (other than Bank Product Obligations) owed by Borrowers to the
Lender Group pursuant to Sections 2.1 and 2.12 is greater than either the Dollar
or percentage limitations set forth in Sections 2.1 or 2.12, (an "Overadvance"),
Borrowers immediately shall pay to Agent, in cash, the amount of such excess,
which amount shall be used by Agent to reduce the Obligations in accordance with
the priorities set forth in Section 2.4(b). In addition, Borrowers hereby
promise to pay the Obligations (including principal, interest, fees, costs, and
expenses) in Dollars in full to the Lender Group as and when due and payable
under the terms of this Agreement and the other Loan Documents.
2.6 INTEREST RATES AND LETTER OF CREDIT FEE RATES, PAYMENTS, AND
CALCULATIONS.
(a) INTEREST RATES. Except as provided in clause
(c) below, all Obligations (except for undrawn Letters of Credit and Bank
Products Obligations not charged to the Loan Account) that have been charged to
the Loan Account pursuant to the terms hereof shall bear interest on the Daily
Balance thereof at a per annum rate equal to the greater of (i) the Base Rate
plus one percentage point, and (ii) 4%;
(b) LETTER OF CREDIT FEE. Borrowers, jointly and
severally, shall pay Agent (for the ratable benefit of the Lenders with a
Revolver Commitment, subject to any letter agreement between Agent and
individual Lenders), a Letter of Credit fee (in addition to the charges,
commissions, fees, and costs set forth in Section 2.12(e)) which shall accrue at
a rate equal to 1.5% per annum multiplied by the Daily Balance of the undrawn
amount of all outstanding Letters of Credit.
(c) DEFAULT RATE. Upon the occurrence and during
the continuation of an Event of Default (and at the election of Agent or the
Required Lenders),
(i) all Obligations (except for undrawn
Letters of Credit and except for Bank Product
Obligations not charged to the Loan Account ) that
have been charged to the Loan Account pursuant to the
terms hereof shall bear interest on the Daily Balance
thereof at a per annum
27
rate equal to 3 percentage points above the per annum
rate otherwise applicable hereunder, and
(ii) the Letter of Credit fee provided
for above shall be increased to 3 percentage points
above the per annum rate otherwise applicable
hereunder.
(d) PAYMENT. Interest, Letter of Credit fees, and all
other fees payable hereunder shall be due and payable, in arrears, on the first
day of each month at any time that Obligations or Commitments are outstanding.
Borrowers hereby authorize Agent, from time to time, without prior notice to
Borrowers, to, and Agent agrees that it will, charge such interest and fees, all
Lender Group Expenses (as and when incurred), the charges, commissions, fees,
and costs provided for in Section 2.12(e) (as and when accrued or incurred), the
fees and costs provided for in Section 2.11 (as and when accrued or incurred),
and all other payments as and when due and payable under any Loan Document
(including any amounts due and payable to Xxxxx Fargo or its Affiliates in
respect of Bank Products up to the amount of the then extant Bank Products
Reserve) to Borrowers' Loan Account, which amounts thereafter constitute
Obligations hereunder and shall accrue interest at the rate then applicable
thereto. Any interest not paid when due shall be compounded by being charged to
Borrowers' Loan Account and shall thereafter constitute Obligations hereunder
and shall accrue interest at the rate then applicable thereto.
(e) COMPUTATION. All interest and fees chargeable
under the Loan Documents shall be computed on the basis of a 360 day year for
the actual number of days elapsed. In the event the Base Rate is changed from
time to time hereafter, the rates of interest hereunder based upon the Base Rate
automatically and immediately shall be increased or decreased by an amount equal
to such change in the Base Rate.
(f) INTENT TO LIMIT CHARGES TO MAXIMUM LAWFUL RATE.
In no event shall the interest rate or rates payable under this Agreement, plus
any other amounts paid in connection herewith, exceed the highest rate
permissible under any law that a court of competent jurisdiction shall, in a
final determination, deem applicable. Borrowers and the Lender Group, in
executing and delivering this Agreement, intend legally to agree upon the rate
or rates of interest and manner of payment stated within it; provided, however,
that, anything contained herein to the contrary notwithstanding, if said rate or
rates of interest or manner of payment exceeds the maximum allowable under
applicable law, then, ipso facto, as of the date of this Agreement, Borrowers
are and shall be liable only for the payment of such maximum as allowed by law,
and payment received from Borrowers in excess of such legal maximum, whenever
received, shall be applied to reduce the principal balance of the Obligations to
the extent of such excess.
2.7 [INTENTIONALLY OMITTED].
2.8 CREDITING PAYMENTS. The receipt of any payment item by Agent
shall not be considered a payment on account unless such payment item is a wire
transfer of immediately available federal funds made to the Agent's Account or
unless and until such payment item is
28
honored when presented for payment. Should any payment item not be honored when
presented for payment, then Borrowers shall be deemed not to have made such
payment and interest shall be calculated accordingly. Anything to the contrary
contained herein notwithstanding, any payment item shall be deemed received by
Agent only if it is received into the Agent's Account on a Business Day on or
before 11:00 a.m. (California time). If any payment item is received into the
Agent's Account on a non-Business Day or after 11:00 a.m. (California time) on a
Business Day, it shall be deemed to have been received by Agent as of the
opening of business on the immediately following Business Day.
2.9 DESIGNATED ACCOUNT. Agent is authorized to make the Advances,
and Issuing Lender is authorized to issue the Letters of Credit, under this
Agreement based upon telephonic or other instructions received from anyone
purporting to be an Authorized Person, or without instructions if pursuant to
Section 2.6(d). Administrative Borrower agrees to establish and maintain the
Designated Account with the Designated Account Bank for the purpose of receiving
the proceeds of the Advances requested by Borrowers and made by Agent or the
Lenders hereunder. So long as no Default or Event of Default has occurred and is
continuing, Administrative Borrower may add or replace, the Designated Account
Bank or the Designated Account on 30 days prior written notice to Agent. Unless
otherwise agreed by Agent and Administrative Borrower, any Advance or Agent
Advance requested by Borrowers and made by Agent or the Lenders hereunder shall
be made to the Designated Account.
2.10 MAINTENANCE OF LOAN ACCOUNT; STATEMENTS OF OBLIGATIONS. Agent
shall maintain an account on its books in the name of Borrowers (the "Loan
Account") on which Borrowers will be charged with all Advances (including Agent
Advances) made by Agent or the Lenders to Borrowers or for Borrowers' account,
the Letters of Credit issued by Issuing Lender for Borrowers' account, and with
all other payment Obligations hereunder or under the other Loan Documents
(except for Bank Product Obligations), including, accrued interest, fees and
expenses, and Lender Group Expenses. In accordance with Section 2.8, the Loan
Account will be credited with all payments received by Agent from Borrowers or
for Borrowers' account. Agent shall render statements regarding the Loan Account
to Administrative Borrower, including principal, interest, fees, and including
an itemization of all charges and expenses constituting Lender Group Expenses
owing, and such statements shall be conclusively presumed to be correct and
accurate and constitute an account stated between Borrowers and the Lender Group
unless, within 30 days after receipt thereof by Administrative Borrower,
Administrative Borrower shall deliver to Agent written objection thereto
describing the error or errors contained in any such statements.
2.11 FEES. Borrowers shall pay to Agent the following fees and
charges, which fees and charges shall be non-refundable when paid (irrespective
of whether this Agreement is terminated thereafter) and shall be apportioned
among the Lenders in accordance with the terms of letter agreements between
Agent and individual Lenders:
29
(a) FEE LETTER FEES. As and when due and payable
under the terms of the Fee Letter, Borrowers shall pay to Agent the fees set
forth in the Fee Letter.
2.12 LETTERS OF CREDIT
(a) Subject to the terms and conditions of this
Agreement, the Issuing Lender agrees to issue letters of credit for the account
of Borrowers (each, an "L/C") or to purchase participations or execute
indemnities or reimbursement obligations (each such undertaking, an "L/C
Undertaking") with respect to letters of credit issued by an Underlying Issuer
(as of the Closing Date, the prospective Underlying Issuer is to be Xxxxx Fargo)
for the account of Borrowers. To request the issuance of an L/C or an L/C
Undertaking (or the amendment, renewal, or extension of an outstanding L/C or
L/C Undertaking), Administrative Borrower shall hand deliver or telecopy (or
transmit by electronic communication, if arrangements for doing so have been
approved by the Issuing Lender) to the Issuing Lender and Agent (reasonably in
advance of the requested date of issuance, amendment, renewal, or extension) a
notice requesting the issuance of an L/C or L/C Undertaking, or identifying the
L/C or L/C Undertaking to be amended, renewed, or extended, the date of
issuance, amendment, renewal, or extension, the date on which such L/C or L/C
Undertaking is to expire, the amount of such L/C or L/C Undertaking, the name
and address of the beneficiary thereof (or of the Underlying Letter of Credit,
as applicable), and such other information as shall be necessary to prepare,
amend, renew, or extend such L/C or L/C Undertaking. If requested by the Issuing
Lender, Borrowers also shall be an applicant under the application with respect
to any Underlying Letter of Credit that is to be the subject of an L/C
Undertaking. The Issuing Lender shall have no obligation to issue a Letter of
Credit if any of the following would result after giving effect to the requested
Letter of Credit:
(i) the Letter of Credit Usage would exceed the
Borrowing Base less the then extant amount of outstanding
Advances, or
(ii) the Letter of Credit Usage would exceed
$6,000,000, or
(iii) the Letter of Credit Usage would exceed the
Maximum Revolver Amount less the then extant amount of
outstanding Advances.
Borrowers and the Lender Group acknowledge and agree that
certain Underlying Letters of Credit may be issued to support letters of credit
that already are outstanding as of the Closing Date. Each Letter of Credit (and
corresponding Underlying Letter of Credit) shall have an expiry date no later
than 30 days prior to the Maturity Date and all such Letters of Credit (and
corresponding Underlying Letter of Credit) shall be in form and substance
acceptable to the Issuing Lender (in the exercise of its Permitted Discretion),
including the requirement that the amounts payable thereunder must be payable in
Dollars. If Issuing Lender is obligated to advance funds under a Letter of
Credit, Borrowers immediately shall reimburse such L/C Disbursement to Issuing
Lender by paying to Agent an amount equal to such L/C Disbursement not later
than 11:00 a.m., California time, on the date that such L/C Disbursement is
made, if Administrative Borrower shall have
30
received written or telephonic notice of such L/C Disbursement prior to 10:00
a.m., California time, on such date, or, if such notice has not been received by
Administrative Borrower prior to such time on such date, then not later than
11:00 a.m., California time, on (i) the Business Day that Administrative
Borrower receives such notice, if such notice is received prior to 10:00 a.m.,
California time, on the date of receipt, and, in the absence of such
reimbursement, the L/C Disbursement immediately and automatically shall be
deemed to be an Advance hereunder and, thereafter, shall bear interest at the
rate then applicable to Advances under Section 2.6. To the extent an L/C
Disbursement is deemed to be an Advance hereunder, Borrowers' obligation to
reimburse such L/C Disbursement shall be discharged and replaced by the
resulting Advance. Promptly following receipt by Agent of any payment from
Borrowers pursuant to this paragraph, Agent shall distribute such payment to the
Issuing Lender or, to the extent that Lenders have made payments pursuant to
Section 2.12(c) to reimburse the Issuing Lender, then to such Lenders and the
Issuing Lender as their interest may appear.
(b) Promptly following receipt of a notice of L/C Disbursement
pursuant to Section 2.12(a), each Lender with a Revolver Commitment agrees to
fund its Pro Rata Share of any Advance deemed made pursuant to the foregoing
subsection on the same terms and conditions as if Borrowers had requested such
Advance and Agent shall promptly pay to Issuing Lender the amounts so received
by it from the Lenders. By the issuance of a Letter of Credit (or an amendment
to a Letter of Credit increasing the amount thereof) and without any further
action on the part of the Issuing Lender or the Lenders with Revolver
Commitment, the Issuing Lender shall be deemed to have granted to each Lender
with a Revolver Commitment, and each Lender with a Revolver Commitment shall be
deemed to have purchased, a participation in each Letter of Credit, in an amount
equal to its Pro Rata Share of the Risk Participation Liability of such Letter
of Credit, and each such Lender agrees to pay to Agent, for the account of the
Issuing Lender, such Lender's Pro Rata Share of any payments made by the Issuing
Lender under such Letter of Credit. In consideration and in furtherance of the
foregoing, each Lender with a Revolver Commitment hereby absolutely and
unconditionally agrees to pay to Agent, for the account of the Issuing Lender,
such Lender's Pro Rata Share of each L/C Disbursement made by the Issuing Lender
and not reimbursed by Borrowers on the date due as provided in clause (a) of
this Section, or of any reimbursement payment required to be refunded to
Borrowers for any reason. Each Lender with a Revolver Commitment acknowledges
and agrees that its obligation to deliver to Agent, for the account of the
Issuing Lender, an amount equal to its respective Pro Rata Share pursuant to
this Section 2.12(b) shall be absolute and unconditional and such remittance
shall be made notwithstanding the occurrence or continuation of an Event of
Default or Default or the failure to satisfy any condition set forth in Section
3 hereof. If any such Lender fails to make available to Agent the amount of such
Lender's Pro Rata Share of any payments made by the Issuing Lender in respect of
such Letter of Credit as provided in this Section, Agent (for the account of the
Issuing Lender) shall be entitled to recover such amount on demand from such
Lender together with interest thereon at the Defaulting Lender Rate until paid
in full.
31
(c) Each Borrower hereby agrees to indemnify, save, defend,
and hold the Lender Group harmless from any loss, cost, expense, or liability,
and reasonable attorneys fees incurred by the Lender Group arising out of or in
connection with any Letter of Credit; provided, however, that no Borrower shall
be obligated hereunder to indemnify for any loss, cost, expense, or liability
that is caused by the gross negligence or willful misconduct of the Issuing
Lender or any other member of the Lender Group. Each Borrower agrees to be bound
by the Underlying Issuer's regulations and interpretations of any Underlying
Letter of Credit or by Issuing Lender's interpretations of any L/C issued by
Issuing Lender to or for such Borrower's account, even though this
interpretation may be different from such Borrower's own, and each Borrower
understands and agrees that the Lender Group shall not be liable for any error,
negligence, or mistake, whether of omission or commission, in following
Borrowers' instructions or those contained in the Letter of Credit or any
modifications, amendments, or supplements thereto. Each Borrower understands
that the L/C Undertakings may require Issuing Lender to indemnify the Underlying
Issuer for certain costs or liabilities arising out of claims by Borrowers
against such Underlying Issuer. Each Borrower hereby agrees to indemnify, save,
defend, and hold the Lender Group harmless with respect to any loss, cost,
expense (including reasonable attorneys fees), or liability incurred by the
Lender Group under any L/C Undertaking as a result of the Lender Group's
indemnification of any Underlying Issuer; provided, however, that no Borrower
shall be obligated hereunder to indemnify for any loss, cost, expense, or
liability that is caused by the gross negligence or willful misconduct of the
Issuing Lender or any other member of the Lender Group.
(d) Each Borrower hereby authorizes and directs any Underlying
Issuer to deliver to the Issuing Lender all instruments, documents, and other
writings and property received by such Underlying Issuer pursuant to such
Underlying Letter of Credit and to accept and rely upon the Issuing Lender's
instructions with respect to all matters arising in connection with such
Underlying Letter of Credit and the related application.
(e) Any and all charges, commissions, fees, and costs incurred
by the Issuing Lender relating to Underlying Letters of Credit shall be Lender
Group Expenses for purposes of this Agreement and immediately shall be
reimbursable by Borrowers to Agent for the account of the Issuing Lender; it
being acknowledged and agreed by each Borrower that, as of the Closing Date, the
issuance charge imposed by the prospective Underlying Issuer is .825% per annum
times the face amount of each Underlying Letter of Credit, that such issuance
charge may be changed from time to time, and that the Underlying Issuer also
imposes a schedule of charges for amendments, extensions, drawings, and
renewals.
(f) If by reason of (i) any change in any applicable law,
treaty, rule, or regulation or any change in the interpretation or application
thereof by any Governmental Authority, or (ii) compliance by the Underlying
Issuer or the Lender Group with any direction, request, or requirement
(irrespective of whether having the force of law) of any Governmental Authority
or monetary authority including, Regulation D of the Federal Reserve Board as
from time to time in effect (and any successor thereto):
32
(i) any reserve, deposit, or similar
requirement is or shall be imposed or modified in
respect of any Letter of Credit issued hereunder, or
(ii) there shall be imposed on the
Underlying Issuer or the Lender Group any other
condition regarding any Underlying Letter of Credit
or any Letter of Credit issued pursuant hereto;
and the result of the foregoing is to increase, directly or indirectly, the cost
to the Lender Group of issuing, making, guaranteeing, or maintaining any Letter
of Credit or to reduce the amount receivable in respect thereof by the Lender
Group, then, and in any such case, Agent may, at any time within a reasonable
period after the additional cost is incurred or the amount received is reduced,
notify Administrative Borrower, and Borrowers shall pay on demand such amounts
as Agent may specify to be necessary to compensate the Lender Group for such
additional cost or reduced receipt, together with interest on such amount from
the date of such demand until payment in full thereof at the rate then
applicable to Advances hereunder. The determination by Agent of any amount due
pursuant to this Section, as set forth in a certificate setting forth the
calculation thereof in reasonable detail, shall, in the absence of manifest or
demonstrable error, be final and conclusive and binding on all of the parties
hereto.
2.13 CAPITAL REQUIREMENTS. If, after the date hereof, any Lender
determines that (i) the adoption of or change in any law, rule, regulation or
guideline regarding capital requirements for banks or bank holding companies, or
any change in the interpretation or application thereof by any Governmental
Authority charged with the administration thereof, or (ii) compliance by such
Lender or its parent bank holding company with any guideline, request or
directive of any such entity regarding capital adequacy (whether or not having
the force of law), will have the effect of reducing the return on such Lender's
or such holding company's capital as a consequence of such Lender's Commitments
hereunder to a level below that which such Lender or such holding company could
have achieved but for such adoption, change, or compliance (taking into
consideration such Lender's or such holding company's then existing policies
with respect to capital adequacy and assuming the full utilization of such
entity's capital) by any amount deemed by such Lender to be material, then such
Lender may notify Administrative Borrower and Agent thereof. Following receipt
of such notice, Borrowers agree to pay such Lender on demand the amount of such
reduction of return of capital as and when such reduction is determined, payable
within 90 days after presentation by such Lender of a statement in the amount
and setting forth in reasonable detail such Lender's calculation thereof and the
assumptions upon which such calculation was based (which statement shall be
deemed true and correct absent manifest error). In determining such amount, such
Lender may use any reasonable averaging and attribution methods.
2.14 JOINT AND SEVERAL LIABILITY OF BORROWERS.
33
(a) Each Borrower is accepting joint and several
liability hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Agent and the Lenders under this
Agreement, for the mutual benefit, directly and indirectly, of each Borrower and
in consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations.
(b) Each Borrower, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with respect to
the payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this Section 2.14), it being the
intention of the parties hereto that all the Obligations shall be the joint and
several obligations of each Person composing Borrowers without preferences or
distinction among them.
(c) If and to the extent that any of Borrowers shall fail
to make any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then in
each such event the other Persons composing Borrowers will make such payment
with respect to, or perform, such Obligation.
(d) The Obligations of each Person composing Borrowers
under the provisions of this Section 2.14 constitute the absolute and
unconditional, full recourse Obligations of each Person composing Borrowers
enforceable against each such Borrower to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstances whatsoever.
(e) Except as otherwise expressly provided in this
Agreement, each Person composing Borrowers hereby waives notice of acceptance of
its joint and several liability, notice of any Advances or Letters of Credit
issued under or pursuant to this Agreement, notice of the occurrence of any
Default, Event of Default, or of any demand for any payment under this
Agreement, notice of any action at any time taken or omitted by Agent or Lenders
under or in respect of any of the Obligations, any requirement of diligence and,
generally, to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement (except as
otherwise provided in this Agreement). Each Person composing Borrowers hereby
assents to, and waives notice of, any extension or postponement of the time for
the payment of any of the Obligations, the acceptance of any payment of any of
the Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by Agent or Lenders at any time or times
in respect of any default by any Person composing Borrowers in the performance
or satisfaction of any term, covenant, condition or provision of this Agreement,
any and all other indulgences whatsoever by Agent or Lenders in respect of any
of the Obligations, and the taking, addition, substitution or release, in whole
or in part, at any time or times, of any security for any of the Obligations or
the addition, substitution or release, in whole or in part, of any Person
composing Borrowers. Without limiting the generality of the foregoing, each
Borrower assents to any other action or delay in acting or failure to act on the
part of any Agent or Lender with respect to the failure by any Person composing
Borrowers to comply
34
with any of its respective Obligations, including, without limitation, any
failure strictly or diligently to assert any right or to pursue any remedy or to
comply fully with applicable laws or regulations thereunder, which might, but
for the provisions of this Section 2.14 afford grounds for terminating,
discharging or relieving any Person composing Borrowers, in whole or in part,
from any of its Obligations under this Section 2.14, it being the intention of
each Person composing Borrowers that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of such Person composing Borrowers
under this Section 2.14 shall not be discharged except by performance and then
only to the extent of such performance. The Obligations of each Person composing
Borrowers under this Section 2.14 shall not be diminished or rendered
unenforceable by any winding up, reorganization, arrangement, liquidation,
reconstruction or similar proceeding with respect to any Person composing
Borrowers or any Agent or Lender. The joint and several liability of the Persons
composing Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, constitution or place of formation of any of the Persons
composing Borrowers or any Agent or Lender.
(f) Each Person composing Borrowers represents and
warrants to Agent and Lenders that such Borrower is currently informed of the
financial condition of Borrowers and of all other circumstances which a diligent
inquiry would reveal and which bear upon the risk of nonpayment of the
Obligations. Each Person composing Borrowers further represents and warrants to
Agent and Lenders that such Borrower has read and understands the terms and
conditions of the Loan Documents. Each Person composing Borrowers hereby
covenants that such Borrower will continue to keep informed of Borrowers'
financial condition, the financial condition of other guarantors, if any, and of
all other circumstances which bear upon the risk of nonpayment or nonperformance
of the Obligations.
(g) The provisions of this Section 2.14 are made for the
benefit of the Agent, the Lenders and their respective successors and assigns,
and may be enforced by it or them from time to time against any or all of the
Persons composing Borrowers as often as occasion therefor may arise and without
requirement on the part of any such Agent, Lender, successor or assign first to
marshal any of its or their claims or to exercise any of its or their rights
against any of the other Persons composing Borrowers or to exhaust any remedies
available to it or them against any of the other Persons composing Borrowers or
to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
Section 2.14 shall remain in effect until all of the Obligations shall have been
paid in full or otherwise fully satisfied. If at any time, any payment, or any
part thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by any Agent or Lender upon the insolvency,
bankruptcy or reorganization of any of the Persons composing Borrowers, or
otherwise, the provisions of this Section 2.15 will forthwith be reinstated in
effect, as though such payment had not been made.
(h) Each of the Persons composing Borrowers hereby agrees
that it will not enforce any of its rights of contribution or subrogation
against the other Persons composing Borrowers with respect to any liability
incurred by it hereunder or under any of the other
35
Loan Documents, any payments made by it to the Agent or the Lenders with respect
to any of the Obligations or any collateral security therefor until such time as
all of the Obligations have been paid in full in cash. Any claim which any
Borrower may have against any other Borrower with respect to any payments to any
Agent or Lender hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations and, in the event of any insolvency,
bankruptcy, receivership, liquidation, reorganization or other similar
proceeding under the laws of any jurisdiction relating to any Borrower, its
debts or its assets, whether voluntary or involuntary, all such Obligations
shall be paid in full in cash before any payment or distribution of any
character, whether in cash, securities or other property, shall be made to any
other Borrower therefor.
(i) Each of the Persons composing Borrowers hereby agrees
that, after the occurrence and during the continuance of any Default or Event of
Default, the payment of any amounts due with respect to the indebtedness owing
by any Borrower to any other Borrower is hereby subordinated to the prior
payment in full in cash of the Obligations. Each Borrower hereby agrees that
after the occurrence and during the continuance of any Default or Event of
Default, such Borrower will not demand, xxx for or otherwise attempt to collect
any indebtedness of any other Borrower owing to such Borrower until the
Obligations shall have been paid in full in cash. If, notwithstanding the
foregoing sentence, such Borrower shall collect, enforce or receive any amounts
in respect of such indebtedness, such amounts shall be collected, enforced and
received by such Borrower as trustee for the Lender Group, and such Borrower
shall deliver any such amounts to Agent for application to the Obligations in
accordance with Section 2.4(b).
3. CONDITIONS; TERM OF AGREEMENT.
3.1 CONDITIONS PRECEDENT TO THE INITIAL EXTENSION OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make the initial
Advance (or otherwise to extend any credit provided for hereunder), is subject
to the fulfillment, to the satisfaction of Agent, of each of the conditions
precedent set forth below:
(a) the Closing Date shall occur on or before
February 3, 2004;
(b) Agent shall have received the Amended and
Restated Fee Letter, in form and substance satisfactory to Agent, duly executed
by each party thereto, and which shall be in full force and effect;
(c) Agent shall have received a certificate from the
Secretary of each Borrower (i) attesting to the resolutions of such Borrower's
Board of Directors authorizing its execution, delivery, and performance of this
Agreement and the other Loan Documents to which such Borrower is a party and
authorizing specific officers of such Borrower to execute the same, and (ii)
certifying the names and true signatures of the officers of such Borrower
authorized to sign each Loan Document to which such Borrower is a party;
36
(d) Agent shall have received copies of each
Borrower's Governing Documents, as amended, modified, or supplemented to the
Closing Date, certified by the Secretary of such Borrower;
(e) Agent shall have received a certificate of status
with respect to each Borrower, dated within 25 days of the Closing Date, such
certificate to be issued by the appropriate officer of the jurisdiction of
organization of such Borrower, which certificate shall indicate that such
Borrower is in good standing in such jurisdiction;
(f) Agent shall have received certificates of status
with respect to each Borrower, each dated within 30 days of the Closing Date,
such certificates to be issued by the appropriate officer of the jurisdictions
(other than the jurisdiction of organization of such Borrower) in which its
failure to be duly qualified or licensed would constitute a Material Adverse
Change, which certificates shall indicate that such Borrower is in good standing
in such jurisdictions;
(g) Agent shall have received a certificate of
insurance, together with the endorsements thereto, as are required by Section
6.8, the form and substance of which shall be satisfactory to Agent;
(h) Agent shall have received opinions of Borrowers'
counsel in form and substance satisfactory to Agent;
(i) Agent shall have received satisfactory evidence
(including a certificate of the chief financial officer of Parent) that all tax
returns required to be filed by Borrowers have been timely filed and all taxes
upon Borrowers or their respective properties, assets, income, and franchises
(including Real Property taxes and payroll taxes) have been paid prior to
delinquency, except such taxes that are the subject of a Permitted Protest;
(j) Borrowers shall pay all Lender Group Expenses
incurred in connection with the transactions evidenced by this Agreement;
(k) Borrowers shall have received all licenses,
approvals or evidence of other actions required by any Governmental Authority in
connection with the execution and delivery by Borrowers of this Agreement or any
other Loan Document or with the consummation of the transactions contemplated
hereby and thereby; and
(l) all other documents and legal matters in
connection with the transactions contemplated by this Agreement shall have been
delivered, executed, or recorded and shall be in form and substance satisfactory
to Agent.
3.2 [INTENTIONALLY OMITTED]
37
3.3 CONDITIONS PRECEDENT TO ALL EXTENSIONS OF CREDIT. The
obligation of the Lender Group (or any member thereof) to make any Advances (or
to extend any other credit hereunder) shall be subject to the following
conditions precedent:
(a) the representations and warranties contained in
this Agreement and the other Loan Documents shall be true and correct in all
material respects on and as of the date of such extension of credit, as though
made on and as of such date (except to the extent that such representations and
warranties expressly relate solely to an earlier date);
(b) no Default or Event of Default shall have
occurred and be continuing on the date of such extension of credit, nor shall
either result from the making thereof;
(c) no injunction, writ, restraining order, or other
order of any nature prohibiting, directly or indirectly, the extending of such
credit shall have been issued and remain in force by any Governmental Authority
against any Borrower, Agent, any Lender, or any of their Affiliates; and
(d) no Material Adverse Change shall have occurred.
3.4 TERM. This Agreement shall become effective upon the execution
and delivery hereof by Borrowers, Agent, and the Lenders and shall continue in
full force and effect for a term ending on July 31, 2005 (the "Maturity Date").
The foregoing notwithstanding, the Lender Group, upon the election of the
Required Lenders, shall have the right to terminate its obligations under this
Agreement immediately and without notice upon the occurrence and during the
continuation of an Event of Default.
3.5 EFFECT OF TERMINATION. On the date of termination of this
Agreement, all Obligations (including contingent reimbursement obligations of
Borrowers with respect to any outstanding Letters of Credit and including all
Bank Products Obligations) immediately shall become due and payable without
notice or demand (including (a) either (i) providing cash collateral to be held
by Agent for the benefit of those Lenders with a Revolver Commitment in an
amount equal to 105% of the then extant Letter of Credit Usage, or (ii) causing
the original Letters of Credit to be returned to the Issuing Lender, and (b)
providing cash collateral to be held by Agent for the benefit of Xxxxx Fargo or
its Affiliates with respect to the then extant Bank Products Obligations). No
termination of this Agreement, however, shall relieve or discharge Borrowers of
their duties, Obligations, or covenants hereunder and the Agent's Liens in the
Collateral shall remain in effect until all Obligations have been fully and
finally discharged and the Lender Group's obligations to provide additional
credit hereunder have been terminated. When this Agreement has been terminated
and all of the Obligations have been fully and finally discharged and the Lender
Group's obligations to provide additional credit under the Loan Documents have
been terminated irrevocably, Agent will, at Borrowers' sole expense, execute and
deliver any UCC termination statements, lien releases, mortgage releases,
re-assignments of trademarks, discharges of security interests, and other
similar discharge or release documents (and, if applicable, in recordable form)
as are reasonably necessary to release, as of record, the
38
Agent's Liens and all notices of security interests and liens previously filed
by Agent with respect to the Obligations.
3.6 EARLY TERMINATION BY BORROWERS. Borrowers have the option, at
any time upon 60 days prior written notice by Administrative Borrower to Agent,
to terminate this Agreement by paying to Agent, for the benefit of the Lender
Group, in cash, the Obligations (including (a) either (i) providing cash
collateral to be held by Agent for the benefit of those Lenders with a Revolver
Commitment in an amount equal to 105% of the then extant Letter of Credit Usage,
or (ii) causing the original Letters of Credit to be returned to the Issuing
Lender, and (b) providing cash collateral to be held by Agent for the benefit of
Xxxxx Fargo or its Affiliates with respect to the then extant Bank Products
Obligations), in full, together with the Applicable Prepayment Premium (to be
allocated based upon letter agreements between Agent and individual Lenders). If
Administrative Borrower has sent a notice of termination pursuant to the
provisions of this Section, then the Commitments shall terminate and Borrowers
shall be obligated to repay the Obligations (including (x) either (i) providing
cash collateral to be held by Agent for the benefit of those Lenders with a
Revolver Commitment in an amount equal to 105% of the then extant Letter of
Credit Usage, or (ii) causing the original Letters of Credit to be returned to
the Issuing Lender, and (y) providing cash collateral to be held by Agent for
the benefit of Xxxxx Fargo or its Affiliates with respect to the then extant
Bank Products Obligations), in full, together with the Applicable Prepayment
Premium, on the date set forth as the date of termination of this Agreement in
such notice. In the event of the termination of this Agreement and repayment of
the Obligations at any time prior to the Maturity Date, for any other reason,
including (I) termination upon the election of the Required Lenders to terminate
after the occurrence of an Event of Default, (II) foreclosure and sale of
Collateral, (III) sale of the Collateral in any Insolvency Proceeding, or (IV)
restructure, reorganization or compromise of the Obligations by the confirmation
of a plan of reorganization, or any other plan of compromise, restructure, or
arrangement in any Insolvency Proceeding, then, in view of the impracticability
and extreme difficulty of ascertaining the actual amount of damages to the
Lender Group or profits lost by the Lender Group as a result of such early
termination, and by mutual agreement of the parties as to a reasonable
estimation and calculation of the lost profits or damages of the Lender Group,
Borrowers shall pay the Applicable Prepayment Premium to Agent (to be allocated
based upon letter agreements between Agent and individual Lenders), measured as
of the date of such termination.
4. CREATION OF SECURITY INTEREST.
4.1 GRANT OF SECURITY INTEREST. Each Borrower hereby grants to
Agent, for the benefit of the Lender Group and the Bank Product Providers, a
continuing security interest in all of its right, title, and interest in all
currently existing and hereafter acquired or arising Collateral in order to
secure prompt repayment of any and all of the Obligations in accordance with the
terms and conditions of the Loan Documents and in order to secure prompt
performance by Borrowers of each of their covenants and duties under the Loan
Documents. The Agent's Liens in and to the Collateral shall attach to all
Collateral without further act on the part of Agent or Borrowers. Anything
contained in this Agreement or any
39
other Loan Document to the contrary notwithstanding, but subject to Section 4.7
with regard to accrued interest on the Collateral, Borrowers have no authority,
express or implied, to dispose of any item or portion of the Collateral.
4.2 [INTENTIONALLY OMITTED]
4.3 [INTENTIONALLY OMITTED]
4.4 DELIVERY OF ADDITIONAL DOCUMENTATION REQUIRED. At any time
upon the request of Agent, Borrowers shall execute and deliver to Agent, any and
all financing statements, original financing statements in lieu of continuation
statements, fixture filings, security agreements, pledges, assignments,
endorsements of certificates of title, and all other documents (the "Additional
Documents") that Agent may request in its Permitted Discretion, in form and
substance satisfactory to Agent, to perfect and continue perfected or better
perfect the Agent's Liens in the Collateral (whether now owned or hereafter
arising or acquired), and in order to fully consummate all of the transactions
contemplated hereby and under the other Loan Documents. To the maximum extent
permitted by applicable law, each Borrower authorizes Agent to execute any such
Additional Documents in Agent's or the applicable Borrower's name and authorize
Agent to file such executed Additional Documents in any appropriate filing
office.
4.5 POWER OF ATTORNEY. Each Borrower hereby irrevocably makes,
constitutes, and appoints Agent (and any of Agent's officers, employees, or
agents designated by Agent) as such Borrower's true and lawful attorney, with
power to (a) if such Borrower refuses to, or fails timely to execute and deliver
any of the documents described in Section 4.4, sign the name of such Borrower on
any of the documents described in Section 4.4. The appointment of Agent as
Agent's or each Borrower's attorney, and each and every one of its rights and
powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully and finally repaid and performed and the Lender
Group's obligations to extend credit hereunder are terminated.
4.6 RIGHT TO INSPECT. Agent and each Lender (through any of their
respective officers, employees, or agents) shall have the right, from time to
time hereafter to inspect the Books, and the books and records of each Borrower;
provided however, that so long as no Event of Default has occurred which is
continuing, any such inspection shall be conducted during normal business hours
in a manner so as not to interfere unreasonably with any Borrower's business
operations.
4.7 [INTENTIONALLY OMITTED]
40
5. REPRESENTATIONS AND WARRANTIES.
In order to induce the Lender Group to enter into this
Agreement, each Borrower makes the following representations and warranties to
the Lender Group which shall be true, correct, and complete, in all material
respects, as of the date hereof, and shall be true, correct, and complete, in
all material respects, as of the Closing Date, and at and as of the date of the
making of each Advance (or other extension of credit) made thereafter, as though
made on and as of the date of such Advance (or other extension of credit)
(except to the extent that such representations and warranties expressly relate
solely to an earlier date) and such representations and warranties shall survive
the execution and delivery of this Agreement:
5.1 NO ENCUMBRANCES. Each Borrower has good and indefeasible title
to its Collateral, free and clear of Liens except for Permitted Liens.
5.2 [INTENTIONALLY OMITTED]
5.3 [INTENTIONALLY OMITTED]
5.4 [INTENTIONALLY OMITTED]
5.5 [INTENTIONALLY OMITTED]
5.6 [INTENTIONALLY OMITTED]
5.7 LOCATION OF CHIEF EXECUTIVE OFFICE; FEIN. The chief executive
office of each Borrower and each of its Subsidiaries is located at the address
indicated in Schedule 5.7, and each Borrower's FEIN is identified in Schedule
5.7.
5.8 DUE ORGANIZATION AND QUALIFICATION . Each Borrower is duly
organized and existing and in good standing under the laws of the jurisdiction
of its organization and qualified to do business in any state where the
character of its business or the ownership of its assets make such qualification
or registration necessary, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Change.
41
5.9 DUE AUTHORIZATION; NO CONFLICT.
(a) As to each Borrower, the execution, delivery, and
performance by each such Borrower of this Agreement and the Loan Documents to
which it is a party have been duly authorized by all necessary action (corporate
or otherwise) on the part of such Borrower.
(b) As to each Borrower, the execution, delivery, and
performance by such Borrower of this Agreement and the Loan Documents to which
it is a party do not and will not (i) violate any provision of federal, state,
or local law or regulation applicable to any Borrower, the Governing Documents
of any Borrower, or any order, judgment, or decree of any court or other
Governmental Authority binding on any Borrower, (ii) conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any material contractual obligation of any Borrower, (iii) result in or
require the creation or imposition of any Lien of any nature whatsoever upon any
properties or assets of any Borrower, other than Permitted Liens, or (iv)
require any approval of any interestholders of any Borrower or any approval or
consent of any Person under any contractual obligation of any Borrower.
(c) Other than the filing of financing statements,
the execution, delivery, and performance by each Borrower of this Agreement and
the Loan Documents to which such Borrower is a party do not and will not require
any registration with, consent, or approval of, or notice to, or other action
with or by, any Governmental Authority or other Person.
(d) As to each Borrower, this Agreement and the other
Loan Documents to which such Borrower is a party, and all other documents
contemplated hereby and thereby, when executed and delivered by such Borrower
will be the legally valid and binding obligations of such Borrower, as the case
may be, enforceable against such Borrower in accordance with their respective
terms, except as enforcement may be limited by equitable principles or by
bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to
or limiting creditors' rights generally.
(e) The Agent's Liens are validly created, perfected,
and first priority Liens, subject only to Permitted Liens
5.10 LITIGATION. Other than those matters disclosed on Schedule
5.10, there are no actions, suits, complaints, investigations or proceedings
pending or, to the best knowledge of any Borrower, threatened against any
Borrower, or any of their Subsidiaries, as applicable, except for (a) matters
that are fully covered by insurance (subject to customary deductibles), and (b)
matters that could not reasonably be expected to result in a Material Adverse
Change.
5.11 [INTENTIONALLY OMITTED]
5.12 FRAUDULENT TRANSFER.
42
(a) each Borrower is Solvent.
(b) no transfer of property is being made by any
Borrower and no obligation is being incurred by any Borrower in connection with
the transactions contemplated by this Agreement or the other Loan Documents with
the intent to hinder, delay, or defraud either present or future creditors of
any Borrower.
5.13 EMPLOYEE BENEFITS. None of Borrowers, any of their
Subsidiaries, or any of their ERISA Affiliates maintains or contributes to any
Benefit Plan.
5.14 [INTENTIONALLY OMITTED].
5.15 BROKERAGE FEES. Borrowers have not utilized the services of
any broker or finder in connection with Borrowers' obtaining financing from the
Lender Group under this Agreement and no brokerage commission or finders fee is
payable by Borrowers in connection herewith.
5.16 [INTENTIONALLY OMITTED].
5.17 [INTENTIONALLY OMITTED].
5.18 [INTENTIONALLY OMITTED].
5.19 COMPLETE DISCLOSURE. All factual information (taken as a
whole) furnished by or on behalf of Borrowers in writing to Agent or any Lender
(including all information contained in the Schedules hereto or in the other
Loan Documents) pursuant to Section 6.3 of this Agreement (or any Compliance
Certificate delivered in connection therewith) will be, true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information was provided.
5.20 INDEBTEDNESS. Set forth on Schedule 5.20 is a true and
complete list of all Indebtedness of Parent and each of its Subsidiaries
outstanding immediately prior to the Closing Date that is to remain outstanding
after the Closing Date and such Schedule accurately reflects the aggregate
principal amount of such Indebtedness and the principal terms thereof.
6. AFFIRMATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the Obligations
and termination of this Agreement, Borrowers shall and shall cause each of their
respective Subsidiaries to do all of the following:
6.1 ACCOUNTING SYSTEM. Maintain a system of accounting that
enables Borrowers to produce financial statements in accordance with GAAP and
maintain records pertaining to
43
the Collateral that contain information as from time to time reasonably may be
requested by Agent. Borrowers also shall keep an inventory reporting system that
shows all additions, sales, claims, returns, and allowances with respect to the
Inventory.
6.2 [INTENTIONALLY OMITTED]
6.3 FINANCIAL STATEMENTS, REPORTS, CERTIFICATES. Deliver to Agent,
with copies to each Lender:
(a) as soon as available, but in any event within 45
days after the end of each fiscal quarter of Parent during each of Parent's
fiscal years,
(i) a company prepared consolidating
and consolidated balance sheet and income statement
and a consolidated statement of cash flow, in each
case covering operations of Parent and its
Subsidiaries during such period,
(ii) a certificate signed by the chief
financial officer of Parent to the effect that:
A. the financial statements delivered
hereunder have been prepared in accordance with GAAP
(except for the lack of footnotes and being subject
to year-end audit adjustments) and fairly present in
all material respects the financial condition of
Parent and its Subsidiaries,
B. the financial statements delivered
hereunder are true and accurate in all material
respects and are not incomplete by omitting to state
any fact necessary to make such information (taken as
a whole) not misleading in any material respect at
such time in light of the circumstances under which
such information was provided,
C. the representations and warranties of
Borrowers contained in this Agreement and the other
Loan Documents are true and correct in all material
respects on and as of the date of such certificate,
as though made on and as of such date (except to the
extent that such representations and warranties
expressly relate solely to an earlier date), and
D. there does not exist any condition or
event that constitutes a Default or Event of Default
(or, to the extent of any non-compliance, describing
such non-compliance as to which he or she may have
knowledge and what action Borrowers have taken, are
taking, or propose to take with respect thereto), and
44
(iii) for each fiscal quarter of
Borrowers, a Compliance Certificate demonstrating, in
reasonable detail, compliance at the end of such period with
the applicable financial covenants contained in Section 7.19,
(b) as soon as available, but in any event within 90
days after the end of each of Parent's fiscal years, financial statements of
Parent and its Subsidiaries for each such fiscal year, audited by independent
certified public accountants reasonably acceptable to Agent and certified,
without any qualifications (including, without limitation, (i) any "going
concern" or like qualification or exception, or (ii) any qualification or
exception as to the scope of such audit), by such accountants to have been
prepared in accordance with GAAP (such audited financial statements to include a
balance sheet, income statement, and statement of cash flow and, if prepared,
such accountants' letter to management),
(c) if and when filed by any Borrower,
(i) 10-Q or 10-QSB quarterly reports,
Form 10-K or 10-KSB annual reports, and Form 8-K or
8-KSB current reports,
(ii) any other filings made by any
Borrower with the SEC,
(iii) copies of Borrowers' federal income
tax returns, and any amendments thereto, filed with
the Internal Revenue Service, and
(iv) any other information that is
provided by Parent to its shareholders generally,
(d) promptly after the commencement thereof, but in
any event within 5 days after the service of process with respect thereto on any
Borrower, notice of all actions, suits or proceedings brought by or against any
Borrower before any Governmental Authority which, if determined adversely to
such Borrower, could reasonably be expected to cause a Material Adverse Change,
(e) as soon as a Borrower has knowledge of any event
or condition that constitutes a Default or an Event of Default, notice thereof
and a statement of the curative action that Borrowers propose to take with
respect thereto, and
(f) upon the request of Agent, any other report
reasonably requested relating to the financial condition of any Borrower.
6.4 [INTENTIONALLY OMITTED]
6.5 [INTENTIONALLY OMITTED].
6.6 [INTENTIONALLY OMITTED].
45
6.7 TAXES. Cause all assessments and taxes, whether real,
personal, or otherwise, due or payable by, or imposed, levied, or assessed
against it or any of its assets to be paid in full, before delinquency or before
the expiration of any extension period, except to the extent that the validity
of such assessment or tax shall be the subject of a Permitted Protest. Parent
and Parent's Subsidiaries will make timely payment or deposit of all tax
payments and withholding taxes required of it by applicable laws, including
those laws concerning F.I.C.A., F.U.T.A., state disability, and local, state,
and federal income taxes, and will, upon request, furnish Agent with proof
reasonably satisfactory to Agent indicating that Parent or the applicable
Subsidiary of Parent has made such payments or deposits, in each case except to
the extent that any failure to make any such payment or deposit, individually or
in the aggregate, (a) could not reasonably be expected to result in a Material
Adverse Change, and (b) could not reasonably be expected to result in a Lien in
and to any portion of the Collateral. Borrowers shall deliver reasonably
satisfactory evidence of payment of applicable excise taxes in each
jurisdictions in which Parent or any Subsidiary of Parent is required to pay any
such excise tax.
6.8 [INTENTIONALLY OMITTED].
6.9 [INTENTIONALLY OMITTED].
6.10 COMPLIANCE WITH LAWS. Comply with the requirements of all
applicable laws, rules, regulations, and orders of any Governmental Authority,
including the Fair Labor Standards Act and the Americans With Disabilities Act,
other than laws, rules, regulations, and orders the non-compliance with which,
individually or in the aggregate, would not result in and reasonably could not
be expected to result in a Material Adverse Change.
6.11 [INTENTIONALLY OMITTED].
6.12 BROKERAGE COMMISSIONS. Borrowers agree and acknowledge that
payment of all brokerage commissions or finders fees shall be the sole
responsibility of Borrowers, and each Borrower agrees to indemnify, defend, and
hold Agent and the Lender Group harmless from and against any claim of any
broker or finder arising out of Borrowers' obtaining financing from the Lender
Group under this Agreement.
6.13 EXISTENCE. Other than with respect to Permitted Reorganization
Transactions, at all times preserve and keep in full force and effect each
Borrower's valid existence and good standing to the extent material to any
Borrower's business and any rights and franchises material to any Borrower's
businesses.
6.14 [INTENTIONALLY OMITTED].
6.15 [INTENTIONALLY OMITTED[.
6.16 DISCLOSURE UPDATES. Promptly and in no event later than 5
Business Days after obtaining knowledge thereof, (a) notify Agent if any written
information, exhibit, or report furnished to the Lender Group pursuant to
Section 6.3 of this Agreement (or any
46
Compliance Certificate delivered in connection therewith) contained any untrue
statement of a material fact or omitted to state any material fact necessary to
make the statements contained therein not misleading in light of the
circumstances in which made, and (b) correct any defect or error that may be
discovered therein.
7. NEGATIVE COVENANTS.
Each Borrower covenants and agrees that, so long as any credit
hereunder shall be available and until full and final payment of the
Obligations, Borrowers will not and will not permit any of their respective
Subsidiaries to do any of the following:
7.1 INDEBTEDNESS. Create, incur, assume, permit, guarantee, or
otherwise become or remain, directly or indirectly, liable with respect to any
Indebtedness, except:
(a) Indebtedness evidenced by this Agreement and the
other Loan Documents, together with Indebtedness owed to Underlying Issuers with
respect to Underlying Letters of Credit; (b) Purchase Money Indebtedness;
(c) Indebtedness comprising Permitted Investments;
(d) Indebtedness arising as a result of Intercompany
Advances;
(e) Subordinated Debt;
(f) Permitted Acquisition Indebtedness;
(g) Hedging Obligations by Borrower in an aggregate
amount outstanding at any one time (together with any refinancing Indebtedness
in respect thereof permitted pursuant to clause (i) below) not to exceed
$10,000,000.
(h) The following types of Indebtedness, which are
exclusive of and in addition to the Indebtedness listed in Sections 7.1(a)
through (g) and (i); provided that the principal amount of the following types
of Indebtedness (together with any refinancing Indebtedness in respect thereof
permitted pursuant to clause (i) below) shall not exceed $10,000,000 in the
aggregate:
(i) unsecured Indebtedness including
Public Indebtedness (but excluding any type of
working capital facility or similar line of credit;
and
(ii) secured Indebtedness, provided that
the Liens securing such Indebtedness are on assets
other than the Collateral; and
(i) Indebtedness, other than that permitted by
subsections (a) through (h) of this Section 7.1, outstanding on the Closing Date
and listed on Schedule 5.20, and any refinancings, refundings, renewals, or
extensions thereof; provided that (i) such refinancings,
47
refundings, renewals, or extensions: do not result in an increase in the amount
of such Indebtedness except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in connection
with such refinancing plus an amount equal to any existing commitments utilized
thereunder, and (ii) if the Indebtedness that is refinanced, renewed, refunded,
or extended was subordinated in right of payment to the Obligations, then the
terms and conditions of the refinancing, renewal, refunding, or extension
Indebtedness must also include subordination terms and conditions that are at
least as favorable to the Lender Group as those that were applicable to the
refinanced, renewed, or extended Indebtedness.
7.2 LIENS. Create, incur, assume, or permit to exist, directly or
indirectly, any Lien on or with respect to the Collateral, or any income or
profits therefrom, except for Permitted Liens.
7.3 [INTENTIONALLY OMITTED].
7.4 [INTENTIONALLY OMITTED].
7.5 NAME CHANGES, REORGANIZATIONS, AND OTHER FUNDAMENTAL CHANGES.
(a) Directly or indirectly convey, sell, lease, license, assign, transfer, or
otherwise dispose of any interest of any Borrower in and to the Collateral, (b)
other than in connection with a Permitted Reorganization Transaction, enter into
any merger, consolidation, reorganization, recapitalization, liquidation,
dissolution (or other similar proceeding or transaction) with respect to any
Borrower (or permit any of the foregoing to occur), or (c) other than in
connection with a Permitted Reorganization Transaction, change any Borrower's
name, FEIN, corporate structure or identity, or add any new fictitious name;
provided, however, that a Borrower may change its name upon at least 30 days
prior written notice by Administrative Borrower to Agent of such change and so
long as, at the time of such written notification, such Borrower provides any
financing statements or fixture filings necessary to perfect and continue
perfected Agent's Liens.
7.6 [INTENTIONALLY OMITTED]
7.7 [INTENTIONALLY OMITTED].
7.8 [INTENTIONALLY OMITTED].
7.9 [INTENTIONALLY OMITTED].
7.10 [INTENTIONALLY OMITTED]
7.11 [INTENTIONALLY OMITTED].
7.12 [INTENTIONALLY OMITTED]
7.13 [INTENTIONALLY OMITTED].
48
7.14 [INTENTIONALLY OMITTED].
7.15 SUSPENSION. Suspend or go out of a substantial portion of its
business.
7.16 [INTENTIONALLY OMITTED]
7.17 [INTENTIONALLY OMITTED]
7.18 CHANGE IN LOCATION OF CHIEF EXECUTIVE OFFICE. Relocate its
chief executive office to a new location without Administrative Borrower
providing, concurrently therewith, notification thereof to Agent and so long as,
at the time of such written notification, the applicable Borrower provides any
financing statements or fixture filings necessary to perfect and continue
perfected the Agent's Liens.
7.19 QUALIFIED CASH. At any time, fail to maintain Qualified Cash
of at least $25,000,000.
8. EVENTS OF DEFAULT.
Any one or more of the following events shall constitute an
event of default (each, an "Event of Default") under this Agreement:
8.1 If Borrowers fail to pay when due and payable or when declared
due and payable, all or any portion of the Obligations (whether of principal,
interest (including any interest which, but for the provisions of the Bankruptcy
Code, would have accrued on such amounts), fees and charges due the Lender
Group, reimbursement of Lender Group Expenses, or other amounts constituting
Obligations);
8.2 If any Borrower fails to (a) perform, keep, or observe any
covenant or other provision contained in Sections 6.3, 6.7, or 6.10 hereof and
such failure or neglect continues for a period of 5 days after the date on which
such failure or neglect first occurs, or (b) perform, keep, or observe any
covenant or other provision contained in any Section of this Agreement (other
than a Section that is expressly dealt with elsewhere in this Section 8) or the
other Loan Documents (other than a Section of such other Loan Documents dealt
with elsewhere in this Section 8) and such failure or neglect is not cured
within 15 days after the date on which such failure or neglect first occurs, or
(c) perform, keep, or observe any covenant or other provision contained in
Section 6 (other than a subsection of Section 6 that is dealt with elsewhere in
this Section 8), or Section 7;
8.3 If any material portion of any Borrower's or any of its
Subsidiaries' assets is attached, seized, subjected to a writ or distress
warrant, levied upon, or comes into the possession of any third Person;
8.4 If an Insolvency Proceeding is commenced by any Borrower;
49
8.5 If an Insolvency Proceeding is commenced against any Borrower,
or any of its Subsidiaries, and any of the following events occur: (a) the
applicable Borrower or the Subsidiary consents to the institution of the
Insolvency Proceeding against it, (b) the petition commencing the Insolvency
Proceeding is not timely controverted, (c) the petition commencing the
Insolvency Proceeding is not dismissed within 45 calendar days of the date of
the filing thereof; provided, however, that, during the pendency of such period,
Agent (including any successor agent) and each other member of the Lender Group
shall be relieved of their obligation to extend credit hereunder, (d) an interim
trustee is appointed to take possession of all or any substantial portion of the
properties or assets of, or to operate all or any substantial portion of the
business of, any Borrower or any of its Subsidiaries, or (e) an order for relief
shall have been entered therein;
8.6 If any Borrower or any of its Subsidiaries is enjoined,
restrained, or in any way prevented by court order from continuing to conduct
all or any material part of its business affairs;
8.7 If a notice of Lien, levy, or assessment is filed of record
with respect to any Borrower's or any of its Subsidiaries' assets by the United
States, or any department, agency, or instrumentality thereof, or by any state,
county, municipal, or governmental agency, or if any taxes or debts owing at any
time hereafter to any one or more of such entities becomes a Lien, whether
xxxxxx or otherwise, upon any Borrower's or any of its Subsidiaries' assets and
the same is not paid on the payment date thereof;
8.8 If a judgment or other claim becomes a Lien or encumbrance
upon any material portion of any Borrower's or any of its Subsidiaries'
properties or assets;
8.9 [Intentionally Omitted]
8.10 [Intentionally Omitted]
8.11 If any material misstatement or material misrepresentation
exists now or hereafter in any warranty, representation, statement, or Record
made or delivered on or after the Closing Date to the Lender Group by any
Borrower, its Subsidiaries, or any officer, employee, agent, or director of any
Borrower or any of its Subsidiaries pursuant to or in connection with this
Agreement or any other Loan Document;
8.12 If this Agreement or any other Loan Document that purports to
create a Lien, shall, for any reason, fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien on or security interest in the Collateral covered hereby or
thereby; or
8.13 Any provision of any Loan Document shall at any time for any
reason be declared to be null and void, or the validity or enforceability
thereof shall be contested by any Borrower, or a proceeding shall be commenced
by any Borrower, or by any Governmental Authority having jurisdiction over any
Borrower seeking to establish the
50
invalidity or unenforceability thereof, or any Borrower shall deny that any
Borrower has any liability or obligation purported to be created under any Loan
Document.
9. THE LENDER GROUP'S RIGHTS AND REMEDIES.
9.1 RIGHTS AND REMEDIES. Upon the occurrence, and during the
continuation, of an Event of Default, the Required Lenders (at their election
but without notice of their election and without demand) may authorize and
instruct Agent to do any one or more of the following on behalf of the Lender
Group (and Agent, acting upon the instructions of the Required Lenders, shall do
the same on behalf of the Lender Group), all of which are authorized by
Borrowers:
(a) Declare all Obligations, whether evidenced by
this Agreement, by any of the other Loan Documents, or otherwise, immediately
due and payable;
(b) Cease advancing money or extending credit to or
for the benefit of Borrowers under this Agreement, under any of the Loan
Documents, or under any other agreement between Borrowers and the Lender Group;
(c) Terminate this Agreement and any of the other
Loan Documents as to any future liability or obligation of the Lender Group, but
without affecting any of the Agent's Liens in the Collateral and without
affecting the Obligations;
(d) [intentionally omitted]
(e) [intentionally omitted]
(f) Without notice to or demand upon any Borrower,
make such payments and do such acts as Agent considers necessary or reasonable
to protect its security interests in the Collateral. Each Borrower authorizes
Agent to pay, purchase, contest, or compromise any Lien that in Agent's
determination appears to conflict with the Agent's Liens and to pay all expenses
incurred in connection therewith and to charge Borrowers' Loan Account
therefore;
(g) Without notice to any Borrower (such notice being
expressly waived), and without constituting a retention of any collateral in
satisfaction of an obligation (within the meaning of the Code), set off and
apply to the Obligations any and all (i) balances and deposits of any Borrower
held by the Lender Group, or (ii) Indebtedness at any time owing to or for the
credit or the account of any Borrower by any member of the Lender Group or any
Bank Product Provider (including any Eligible Loan), or exercise rights of
recoupment with respect to any such Indebtedness;
(h) Hold, as cash collateral, any and all balances
and deposits of any Borrower held by the Lender Group to secure the full and
final repayment of all of the Obligations;
51
(i) [intentionally omitted]
(j) Sell the Collateral at either a public or private
sale, or both, by way of one or more contracts or transactions, for cash or on
terms, in such manner and at such places (including Borrowers' premises) as
Agent determines is commercially reasonable. It is not necessary that the
Collateral be present at any such sale;
(k) Agent shall give notice of the disposition of the
Collateral as follows:
(i) Agent shall give Administrative
Borrower (for the benefit of the applicable Borrower)
a notice in writing of the time and place of public
sale, or, if the sale is a private sale or some other
disposition other than a public sale is to be made of
the Collateral, the time on or after which the
private sale or other disposition is to be made; and
(ii) The notice shall be personally
delivered or mailed, postage prepaid, to
Administrative Borrower as provided in Section 12, at
least 10 days before the earliest time of disposition
set forth in the notice; no notice needs to be given
prior to the disposition of any portion of the
Collateral that is perishable or threatens to decline
speedily in value or that is of a type customarily
sold on a recognized market;
(l) Agent, on behalf of the Lender Group may credit
bid and purchase at any public sale;
(m) [intentionally omitted]
(n) The Lender Group shall have all other rights and
remedies available to it at law or in equity pursuant to any other Loan
Documents; and
(o) Any deficiency that exists after disposition of
the Collateral as provided above will be paid immediately by Borrowers. Any
excess will be returned, without interest and subject to the rights of third
Persons, by Agent to Administrative Borrower (for the benefit of the applicable
Borrower).
9.2 REMEDIES CUMULATIVE. The rights and remedies of the Lender
Group under this Agreement, the other Loan Documents, and all other agreements
shall be cumulative. The Lender Group shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by the Lender Group of one right or remedy shall be deemed an election,
and no waiver by the Lender Group of any Event of Default shall be deemed a
continuing waiver. No delay by the Lender Group shall constitute a waiver,
election, or acquiescence by it.
52
10. TAXES AND EXPENSES.
If any Borrower fails to pay any monies (whether taxes,
assessments, insurance premiums, or, in the case of leased properties or assets,
rents or other amounts payable under such leases) due to third Persons, or fails
to make any deposits or furnish any required proof of payment or deposit, all as
required under the terms of this Agreement, then, Agent, in its sole discretion
and without prior notice to any Borrower, may do any or all of the following:
(a) make payment of the same or any part thereof, (b) set up such reserves in
Borrowers' Loan Account as Agent deems necessary to protect the Lender Group
from the exposure created by such failure. Any such amounts paid by Agent shall
constitute Lender Group Expenses and any such payments shall not constitute an
agreement by the Lender Group to make similar payments in the future or a waiver
by the Lender Group of any Event of Default under this Agreement. Agent need not
inquire as to, or contest the validity of, any such expense, tax, or Lien and
the receipt of the usual official notice for the payment thereof shall be
conclusive evidence that the same was validly due and owing.
11. WAIVERS; INDEMNIFICATION.
11.1 DEMAND; PROTEST; ETC. Each Borrower waives demand, protest,
notice of protest, notice of default or dishonor, notice of payment and
nonpayment, nonpayment at maturity, release, compromise, settlement, extension,
or renewal of documents, instruments, chattel paper, and guarantees at any time
held by the Lender Group on which each such Borrower may in any way be liable.
11.2 THE LENDER GROUP'S LIABILITY FOR COLLATERAL. Each Borrower
hereby agrees that: (a) so long as the Lender Group complies with its
obligations, if any, under the Code, Agent shall not in any way or manner be
liable or responsible for: (i) the safekeeping of the Collateral, (ii) any loss
or damage thereto occurring or arising in any manner or fashion from any cause,
(iii) any diminution in the value thereof, or (iv) any act or default of any
carrier, warehouseman, bailee, forwarding agency, or other Person, and (b) all
risk of loss, damage, or destruction of the Collateral shall be borne by
Borrowers.
11.3 INDEMNIFICATION. Each Borrower shall pay, indemnify, defend,
and hold the Agent-Related Persons, the Lender-Related Persons with respect to
each Lender, each Participant, and each of their respective officers, directors,
employees, agents, and attorneys-in-fact (each, an "Indemnified Person")
harmless (to the fullest extent permitted by law) from and against any and all
claims, demands, suits, actions, investigations, proceedings, and damages, and
all reasonable attorneys fees and disbursements and other reasonable costs and
expenses actually incurred in connection therewith (as and when they are
incurred and irrespective of whether suit is brought), at any time asserted
against, imposed upon, or incurred by any of them (a) in connection with or as a
result of or related to the execution, delivery, enforcement, performance, or
administration of this Agreement, any of the other Loan Documents, or the
transactions contemplated hereby or thereby, and (b) with respect to any
investigation, litigation, or proceeding related to this Agreement, any other
Loan Document, or the use of the proceeds of the credit provided hereunder
(irrespective of
53
whether any Indemnified Person is a party thereto), or any act, omission, event,
or circumstance in any manner related thereto (all the foregoing, collectively,
the "Indemnified Liabilities"). The foregoing to the contrary notwithstanding,
Borrowers shall have no obligation to any Indemnified Person under this Section
11.3 with respect to any Indemnified Liability that a court of competent
jurisdiction finally determines to have resulted from the gross negligence or
willful misconduct of such Indemnified Person. This provision shall survive the
termination of this Agreement and the repayment of the Obligations. If any
Indemnified Person makes any payment to any other Indemnified Person with
respect to an Indemnified Liability as to which Borrowers were required to
indemnify the Indemnified Person receiving such payment, the Indemnified Person
making such payment is entitled to be indemnified and reimbursed by Borrowers
with respect thereto. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO
EACH INDEMNIFIED PERSON WITH RESPECT TO INDEMNIFIED LIABILITIES WHICH IN WHOLE
OR IN PART CAUSED BY OR ARISE OUT OF ANY NEGLIGENT ACT OR OMISSION OF SUCH
INDEMNIFIED PERSON OR OF ANY OTHER PERSON.
12. NOTICES.
Unless otherwise provided in this Agreement, all notices or
demands by Borrowers or Agent to the other relating to this Agreement or any
other Loan Document shall be in writing and (except for financial statements and
other informational documents which may be sent by first-class mail, postage
prepaid) shall be personally delivered or sent by registered or certified mail
(postage prepaid, return receipt requested), overnight courier, electronic mail
(at such email addresses as the Administrative Borrower or Agent, as applicable,
may designate to each other in accordance herewith), or telefacsimile to
Borrowers in care of Administrative Borrower or to Agent, as the case may be, at
its address set forth below:
If to Administrative
Borrower: HYPERCOM CORPORATION
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xx. Xxxx X. Xxxxxx
Executive Vice President & Chief
Financial and Administrative Officer
Fax No. (000) 000-0000
with copies to: XXXXX & XXXXXX LLP
One Arizona Center
000 Xxxx Xxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx Xxxxxx, Esq.
Fax No. (000) 000-0000
54
If to Agent: XXXXX FARGO FOOTHILL, INC.
0000 Xxxxxxxx Xxxxxx
Xxxxx 0000X
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attn: Business Finance Division Manager
Fax No. 000.000.0000
with copies to: PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxx Xxxxxxx Hilson, Esq.
Fax No. 000-000-0000
Agent and Borrowers may change the address at which they are
to receive notices hereunder, by notice in writing in the foregoing manner given
to the other party. All notices or demands sent in accordance with this Section
12, other than notices by Agent in connection with enforcement rights against
the Collateral under the provisions of the Code, shall be deemed received on the
earlier of the date of actual receipt or 3 Business Days after the deposit
thereof in the mail. Each Borrower acknowledges and agrees that notices sent by
the Lender Group in connection with the exercise of enforcement rights against
Collateral under the provisions of the Code shall be deemed sent when deposited
in the mail or personally delivered, or, where permitted by law, transmitted by
telefacsimile or any other method set forth above.
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.
(a) THE VALIDITY OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE CONTRARY IN ANOTHER LOAN DOCUMENT IN
RESPECT OF SUCH OTHER LOAN DOCUMENT), THE CONSTRUCTION, INTERPRETATION, AND
ENFORCEMENT HEREOF AND THEREOF, AND THE RIGHTS OF THE PARTIES HERETO AND THERETO
WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR THEREUNDER OR RELATED HERETO OR
THERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA.
(b) THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS
ARISING IN CONNECTION WITH THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
TRIED AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE STATE OF
CALIFORNIA, PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY
COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT AGENT'S OPTION, IN THE COURTS OF
ANY JURISDICTION WHERE AGENT ELECTS TO BRING SUCH ACTION OR
55
WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. BORROWERS AND THE LENDER
GROUP WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY
HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE
EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 13(B).
BORROWERS AND THE LENDER GROUP HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED THEREIN,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER
COMMON LAW OR STATUTORY CLAIMS. BORROWERS AND THE LENDER GROUP REPRESENT THAT
EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY
TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF
LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
TRIAL BY THE COURT.
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS.
14.1 ASSIGNMENTS AND PARTICIPATIONS.
(a) Any Lender may, with the written consent of Agent
(provided that no written consent of Agent shall be required in connection with
any assignment and delegation by a Lender to an Eligible Transferee), assign and
delegate to one or more assignees (each an "Assignee") all, or any ratable part
of all, of the Obligations, the Commitments and the other rights and obligations
of such Lender hereunder and under the other Loan Documents, in a minimum amount
of $5,000,000 (provided that such minimum amount shall not apply to any
assignment and delegation by a Lender to an Affiliate of a Lender); provided,
however, that Borrowers and Agent may continue to deal solely and directly with
such Lender in connection with the interest so assigned to an Assignee until (i)
written notice of such assignment, together with payment instructions,
addresses, and related information with respect to the Assignee, have been given
to Administrative Borrower and Agent by such Lender and the Assignee, (ii) such
Lender and its Assignee have delivered to Administrative Borrower and Agent an
Assignment and Acceptance in form and substance satisfactory to Agent, and (iii)
the assignor Lender or Assignee has paid to Agent for Agent's separate account a
processing fee in the amount of $5,000.
(b) From and after the date that Agent notifies the
assignor Lender (with a copy to Administrative Borrower) that it has received an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall, to the
56
extent that rights and obligations hereunder and under the other Loan Documents
have been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights (except with respect to Section 11.3 hereof) and be released from its
obligations under this Agreement (and in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement and the other Loan Documents, such Lender
shall cease to be a party hereto and thereto), and such assignment shall affect
a novation between Borrowers and the Assignee.
(c) By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (1) other
than as provided in such Assignment and Acceptance, such assigning Lender makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document furnished
pursuant hereto, (2) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
Borrowers or the performance or observance by Borrowers of any of their
obligations under this Agreement or any other Loan Document furnished pursuant
hereto, (3) such Assignee confirms that it has received a copy of this
Agreement, together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into such
Assignment and Acceptance, (4) such Assignee will, independently and without
reliance upon Agent, such assigning Lender or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement, (5) such Assignee appoints and authorizes Agent to take such
actions and to exercise such powers under this Agreement as are delegated to
Agent, by the terms hereof, together with such powers as are reasonably
incidental thereto, and (6) such Assignee agrees that it will perform all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) Immediately upon each Assignee's making its
processing fee payment under the Assignment and Acceptance and receipt and
acknowledgment by Agent of such fully executed Assignment and Acceptance, this
Agreement shall be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting adjustment
of the Commitments arising therefrom. The Commitment allocated to each Assignee
shall reduce such Commitments of the assigning Lender pro tanto.
(e) Any Lender may at any time, sell to one or more
commercial banks, financial institutions, or other Persons not Affiliates of
such Lender (a "Participant") participating interests in its Obligations, the
Commitment, and the other rights and interests of that Lender (the "Originating
Lender") hereunder and under the other Loan Documents (provided that no written
consent of Agent shall be required in connection with any sale of any such
participating interests by a Lender to an Eligible Transferee); provided,
however, that (i) the Originating Lender shall remain a "Lender" for all
purposes of this Agreement
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and the other Loan Documents and the Participant receiving the participating
interest in the Obligations, the Commitments, and the other rights and interests
of the Originating Lender hereunder shall not constitute a "Lender" hereunder or
under the other Loan Documents and the Originating Lender's obligations under
this Agreement shall remain unchanged, (ii) the Originating Lender shall remain
solely responsible for the performance of such obligations, (iii) Borrowers,
Agent, and the Lenders shall continue to deal solely and directly with the
Originating Lender in connection with the Originating Lender's rights and
obligations under this Agreement and the other Loan Documents, (iv) no Lender
shall transfer or grant any participating interest under which the Participant
has the right to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment to, or consent or waiver with respect to this Agreement or of any
other Loan Document would (A) extend the final maturity date of the Obligations
hereunder in which such Participant is participating, (B) reduce the interest
rate applicable to the Obligations hereunder in which such Participant is
participating, (C) release all or a material portion of the Collateral or
guaranties (except to the extent expressly provided herein or in any of the Loan
Documents) supporting the Obligations hereunder in which such Participant is
participating, (D) postpone the payment of, or reduce the amount of, the
interest or fees payable to such Participant through such Lender, (E) change the
amount or due dates of scheduled principal repayments, prepayments or premiums,
or (F) subordinate the Liens of Agent for the benefit of the Lender Group to the
Liens of any other creditor of any Borrower; and (v) all amounts payable by
Borrowers hereunder shall be determined as if such Lender had not sold such
participation; except that, if amounts outstanding under this Agreement are due
and unpaid, or shall have been declared or shall have become due and payable
upon the occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in amounts
owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement. The rights of any Participant only shall be derivative through the
Originating Lender with whom such Participant participates and no Participant
shall have any rights under this Agreement or the other Loan Documents or any
direct rights as to the other Lenders, Agent, Borrowers, the Collections, the
Collateral, or otherwise in respect of the Obligations. No Participant shall
have the right to participate directly in the making of decisions by the Lenders
among themselves.
(f) In connection with any such assignment or
participation or proposed assignment or participation, a Lender may disclose all
documents and information which it now or hereafter may have relating to
Borrowers or Borrowers' business.
(g) Any other provision in this Agreement
notwithstanding, any Lender may at any time create a security interest in, or
pledge, all or any portion of its rights under and interest in this Agreement in
favor of any Federal Reserve Bank in accordance with Regulation A of the Federal
Reserve Bank or U.S. Treasury Regulation 31 CFR Section 203.14, and such Federal
Reserve Bank may enforce such pledge or security interest in any manner
permitted under applicable law.
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14.2 SUCCESSORS. This Agreement shall bind and inure to the benefit
of the respective successors and assigns of each of the parties; provided,
however, that Borrowers may not assign this Agreement or any rights or duties
hereunder without the Lenders' prior written consent and any prohibited
assignment shall be absolutely void ab initio. No consent to assignment by the
Lenders shall release any Borrower from its Obligations. A Lender may assign
this Agreement and the other Loan Documents and its rights and duties hereunder
and thereunder pursuant to Section 14.1 hereof and, except as expressly required
pursuant to Section 14.1 hereof, no consent or approval by any Borrower is
required in connection with any such assignment.
15. AMENDMENTS; WAIVERS.
15.1 AMENDMENTS AND WAIVERS. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent with
respect to any departure by Borrowers therefrom, shall be effective unless the
same shall be in writing and signed by the Required Lenders (or by Agent at the
written request of the Required Lenders) and Administrative Borrower (on behalf
of all Borrowers) and then any such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such waiver, amendment, or consent shall, unless in writing and
signed by all of the Lenders affected thereby and Administrative Borrower (on
behalf of all Borrowers) and acknowledged by Agent, do any of the following:
(a) increase or extend any Commitment of any Lender,
(b) postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of principal, interest,
fees, or other amounts due hereunder or under any other Loan Document,
(c) reduce the principal of, or the rate of interest
on, any loan or other extension of credit hereunder, or reduce any fees or other
amounts payable hereunder or under any other Loan Document,
(d) change the percentage of the Commitments that is
required to take any action hereunder,
(e) amend, modify or waive this Section or any
provision of the Agreement providing for consent or other action by all Lenders,
(f) release Collateral other than as permitted by
Section 16.12,
(g) change the definition of "Required Lenders" or
"Pro Rata Share",
(h) contractually subordinate any of the Agent's
Liens,
(i) release any Borrower from any obligation for the
payment of money,
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(j) increase the advance rate with respect to
Advances,
(k) change the definitions (or any definitions used
therein) of Borrowing Base, Eligible Loans, Maximum Revolver Amount, or change
or modify Section 2.1, or Section 2.4(b); or
(l) amend, modify or waive any of the provisions of
Section 2.3(g) or Section 16, or
(m) change the definition of Eligible Transferee, or
amend, modify or waive any of the provisions of Section 14.
and, provided further, however, that no amendment, waiver or consent shall,
unless in writing and signed by Agent or Issuing Lender, affect the rights or
duties of Agent or Issuing Lender, as applicable, under this Agreement or any
other Loan Document. The foregoing notwithstanding, any amendment, modification,
waiver, consent, termination, or release of, or with respect to, any provision
of this Agreement or any other Loan Document that relates only to the
relationship of the Lender Group among themselves, and that does not affect the
rights or obligations of Borrowers, shall not require consent by or the
agreement of Borrowers.
15.2 REPLACEMENT OF HOLDOUT LENDER If any action to be taken by the
Lender Group or Agent hereunder requires the unanimous consent, authorization,
or agreement of all Lenders, and a Lender ("Holdout Lender") fails to give its
consent, authorization, or agreement, then Agent, upon at least 5 Business Days
prior irrevocable notice to the Holdout Lender, may permanently replace the
Holdout Lender with one or more substitute Lenders (each, a "Replacement
Lender"), and the Holdout Lender shall have no right to refuse to be replaced
hereunder. Such notice to replace the Holdout Lender shall specify an effective
date for such replacement, which date shall not be later than 15 Business Days
after the date such notice is given.
Prior to the effective date of such replacement, the Holdout
Lender and each Replacement Lender shall execute and deliver an Assignment and
Acceptance Agreement, subject only to the Holdout Lender being repaid its share
of the outstanding Obligations (including an assumption of its Pro Rata Share of
the Risk Participation Liability and the payment of all fees earned by or
otherwise due such Holdout Lender as of the date of such replacement) without
any premium or penalty of any kind whatsoever. If the Holdout Lender shall
refuse or fail to execute and deliver any such Assignment and Acceptance
Agreement prior to the effective date of such replacement, the Holdout Lender
shall be deemed to have executed and delivered such Assignment and Acceptance
Agreement. The replacement of any Holdout Lender shall be made in accordance
with the terms of Section 14.1, provided that in no event shall any Lender be
required to become a Replacement Lender. Until such time as the Replacement
Lenders shall have acquired all of the Obligations, the Commitments, and the
other rights and obligations of the Holdout Lender hereunder and under the other
Loan Documents, the Holdout Lender shall remain obligated to make the Holdout
Lender's Pro Rata Share of Advances and to purchase a participation in
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each Letter of Credit, in an amount equal to its Pro Rata Share of the Risk
Participation Liability of such Letter of Credit.
15.3 NO WAIVERS; CUMULATIVE REMEDIES. No failure by Agent or any
Lender to exercise any right, remedy, or option under this Agreement or, any
other Loan Document, or delay by Agent or any Lender in exercising the same,
will operate as a waiver thereof. No waiver by Agent or any Lender will be
effective unless it is in writing, and then only to the extent specifically
stated. No waiver by Agent or any Lender on any occasion shall affect or
diminish Agent's and each Lender's rights thereafter to require strict
performance by Borrowers of any provision of this Agreement. Agent's and each
Lender's rights under this Agreement and the other Loan Documents will be
cumulative and not exclusive of any other right or remedy that Agent or any
Lender may have.
16. AGENT; THE LENDER GROUP.
16.1 APPOINTMENT AND AUTHORIZATION OF AGENT. Each Lender hereby
designates and appoints WFF as its representative under this Agreement and the
other Loan Documents and each Lender hereby irrevocably authorizes Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to Agent by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Section 16.
The provisions of this Section 16 are solely for the benefit of Agent, and the
Lenders, and Borrowers shall have no rights as a third party beneficiary of any
of the provisions contained herein. Any provision to the contrary contained
elsewhere in this Agreement or in any other Loan Document notwithstanding, Agent
shall not have any duties or responsibilities, except those expressly set forth
herein, nor shall Agent have or be deemed to have any fiduciary relationship
with any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against Agent; it being expressly understood and
agreed that the use of the word "Agent" is for convenience only, that WFF is
merely the representative of the Lenders, and only has the contractual duties
set forth herein. Except as expressly otherwise provided in this Agreement,
Agent shall have and may use its sole discretion with respect to exercising or
refraining from exercising any discretionary rights or taking or refraining from
taking any actions that Agent expressly is entitled to take or assert under or
pursuant to this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, or of any other provision of the Loan Documents
that provides rights or powers to Agent, Lenders agree that Agent shall have the
right to exercise the following powers as long as this Agreement remains in
effect: (a) maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Obligations, the Collateral,
the Collections, and related matters, (b) execute or file any and all financing
or similar statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to the Loan Documents, (c) make Advances, for itself or on behalf of Lenders as
provided in the Loan Documents, (d) exclusively receive, apply, and distribute
the Collections as provided in the Loan Documents,
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(e) open and maintain such bank accounts and cash management accounts as Agent
deems necessary and appropriate in accordance with the Loan Documents for the
foregoing purposes with respect to the Collateral and the Collections, (f)
perform, exercise, and enforce any and all other rights and remedies of the
Lender Group with respect to Borrowers, the Obligations, the Collateral, the
Collections, or otherwise related to any of same as provided in the Loan
Documents, and (g) incur and pay such Lender Group Expenses as Agent may deem
necessary or appropriate for the performance and fulfillment of its functions
and powers pursuant to the Loan Documents.
16.2 DELEGATION OF DUTIES. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects as
long as such selection was made without gross negligence or willful misconduct.
16.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall
(i) be liable for any action taken or omitted to be taken by any of them under
or in connection with this Agreement or any other Loan Document or the
transactions contemplated hereby (except for its own gross negligence or willful
misconduct), or (ii) be responsible in any manner to any of the Lenders for any
recital, statement, representation or warranty made by any Borrower or any
Subsidiary or Affiliate of any Borrower, or any officer or director thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for any failure of
any Borrower or any other party to any Loan Document to perform its obligations
hereunder or thereunder. No Agent-Related Person shall be under any obligation
to any Lender to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
other Loan Document, or to inspect the Books or properties of Borrowers or the
books or records or properties of any of Borrowers' Subsidiaries or Affiliates.
16.4 RELIANCE BY AGENT. Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation believed by it to be genuine and
correct and to have been signed, sent, or made by the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel to Borrowers
or counsel to any Lender), independent accountants and other experts selected by
Agent. Agent shall be fully justified in failing or refusing to take any action
under this Agreement or any other Loan Document unless Agent shall first receive
such advice or concurrence of the Lenders as it deems appropriate and until such
instructions are received, Agent shall act, or refrain from acting, as it deems
advisable. If Agent so requests, it shall first be indemnified to its reasonable
satisfaction by Lenders against any and all liability and expense that may be
incurred by it by reason of taking or continuing to take any such action.
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Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Lenders and such request and any action taken or
failure to act pursuant thereto shall be binding upon all of the Lenders.
16.5 NOTICE OF DEFAULT OR EVENT OF DEFAULT. Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default, except with respect to defaults in the payment of principal, interest,
fees, and expenses required to be paid to Agent for the account of the Lenders,
except with respect to the existence of Overadvances as to which the Agent has
actual knowledge and to Defaults and Events of Default of which Agent has actual
knowledge, unless Agent shall have received written notice from a Lender or
Administrative Borrower referring to this Agreement, describing such Default or
Event of Default, and stating that such notice is a "notice of default." Agent
promptly will notify the Lenders of its receipt of any such notice or of any
Event of Default of which Agent has actual knowledge. If any Lender obtains
actual knowledge of any Event of Default, such Lender promptly shall notify the
other Lenders and Agent of such Event of Default. Each Lender shall be solely
responsible for giving any notices to its Participants, if any. Subject to
Section 16.4, Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Required Lenders in accordance with
Section 9; provided, however, that unless and until Agent has received any such
request, Agent may (but shall not be obligated to) take such action, or refrain
from taking such action, with respect to such Default or Event of Default as it
shall deem advisable.
16.6 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by Agent hereinafter taken, including any review of the affairs of Borrowers
and their Subsidiaries or Affiliates, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender. Each
Lender represents to Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person (other than the Lender Group)
party to a Loan Document, and all applicable bank regulatory laws relating to
the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to Borrowers. Each Lender also represents
that it will, independently and without reliance upon any Agent-Related Person
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial and other condition and
creditworthiness of Borrowers and any other Person (other than the Lender Group)
party to a Loan Document. Except for notices, reports, and other documents
expressly herein required to be furnished to the Lenders by Agent, Agent shall
not have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other
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condition or creditworthiness of Borrowers and any other Person party to a Loan
Document that may come into the possession of any of the Agent-Related Persons.
16.7 COSTS AND EXPENSES; INDEMNIFICATION. Agent may incur and pay
Lender Group Expenses to the extent Agent reasonably deems necessary or
appropriate for the performance and fulfillment of its functions, powers, and
obligations pursuant to the Loan Documents, including court costs, reasonable
attorneys fees and expenses, costs of collection by outside collection agencies
and auctioneer fees and costs of security guards or insurance premiums paid to
maintain the Collateral, whether or not Borrowers are obligated to reimburse
Agent or Lenders for such expenses pursuant to the Loan Agreement or otherwise.
Agent is authorized and directed to deduct and retain sufficient amounts from
Collections received by Agent to reimburse Agent for such out-of-pocket costs
and expenses prior to the distribution of any amounts to Lenders. In the event
Agent is not reimbursed for such costs and expenses from Collections received by
Agent, each Lender hereby agrees that it is and shall be obligated to pay to or
reimburse Agent for the amount of such Lender's Pro Rata Share thereof. Whether
or not the transactions contemplated hereby are consummated, the Lenders shall
indemnify upon demand the Agent-Related Persons (to the extent not reimbursed by
or on behalf of Borrowers and without limiting the obligation of Borrowers to do
so), according to their Pro Rata Shares, from and against any and all
Indemnified Liabilities; provided, however, that no Lender shall be liable for
the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct nor shall any Lender be liable for the obligations of any Defaulting
Lender in failing to make an Advance or other extension of credit hereunder.
Without limitation of the foregoing, each Lender shall reimburse Agent upon
demand for such Lender's ratable share of any costs or out-of-pocket expenses
(including attorneys fees and expenses) incurred by Agent in connection with the
preparation, execution, delivery, administration, modification, amendment, or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Agent is not reimbursed for such expenses by or on behalf of
Borrowers. The undertaking in this Section shall survive the payment of all
Obligations hereunder and the resignation or replacement of Agent.
16.8 AGENT IN INDIVIDUAL CAPACITY. WFF and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in, and generally engage in any kind of banking,
lending, trust, financial advisory, underwriting, or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person (other than
the Lender Group) party to any Loan Documents as though WFF were not Agent
hereunder, and, in each case, without notice to or consent of the other members
of the Lender Group. The other members of the Lender Group acknowledge that,
pursuant to such activities, WFF or its Affiliates may receive information
regarding Borrowers or their Affiliates and any other Person (other than the
Lender Group) party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge
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that, in such circumstances (and in the absence of a waiver of such
confidentiality obligations, which waiver Agent will use its reasonable best
efforts to obtain), Agent shall not be under any obligation to provide such
information to them. The terms "Lender" and "Lenders" include WFF in its
individual capacity.
16.9 SUCCESSOR AGENT. Agent may resign as Agent upon 45 days notice
to the Lenders. If Agent resigns under this Agreement, the Required Lenders
shall appoint a successor Agent for the Lenders. If no successor Agent is
appointed prior to the effective date of the resignation of Agent, Agent may
appoint, after consulting with the Lenders, a successor Agent. If Agent has
materially breached or failed to perform any material provision of this
Agreement or of applicable law, the Required Lenders may agree in writing to
remove and replace Agent with a successor Agent from among the Lenders. In any
such event, upon the acceptance of its appointment as successor Agent hereunder,
such successor Agent shall succeed to all the rights, powers, and duties of the
retiring Agent and the term "Agent" shall mean such successor Agent and the
retiring Agent's appointment, powers, and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this Section 16 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement. If no successor Agent
has accepted appointment as Agent by the date which is 45 days following a
retiring Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Lenders appoint a
successor Agent as provided for above.
16.10 LENDER IN INDIVIDUAL CAPACITY. Any Lender and its respective
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with
Borrowers and their Subsidiaries and Affiliates and any other Person (other than
the Lender Group) party to any Loan Documents as though such Lender were not a
Lender hereunder without notice to or consent of the other members of the Lender
Group. The other members of the Lender Group acknowledge that, pursuant to such
activities, such Lender and its respective Affiliates may receive information
regarding Borrowers or their Affiliates and any other Person (other than the
Lender Group) party to any Loan Documents that is subject to confidentiality
obligations in favor of Borrowers or such other Person and that prohibit the
disclosure of such information to the Lenders, and the Lenders acknowledge that,
in such circumstances (and in the absence of a waiver of such confidentiality
obligations, which waiver such Lender will use its reasonable best efforts to
obtain), such Lender shall not be under any obligation to provide such
information to them.
16.11 WITHHOLDING TAXES.
(a) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the IRC and such Lender claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the IRC, such Lender agrees with and in favor of Agent and Borrowers, to
deliver to Agent and Administrative Borrower:
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(i) if such Lender claims an exemption
from withholding tax pursuant to its portfolio
interest exception, (a) a statement of the Lender,
signed under penalty of perjury, that it is not a (I)
a "bank" as described in Section 881(c)(3)(A) of the
IRC, (II) a 10% shareholder (within the meaning of
Section 881(c)(3)(B) of the IRC), or (III) a
controlled foreign corporation described in Section
881(c)(3)(C) of the IRC, and (b) a properly completed
IRS Form W-8BEN, before the first payment of any
interest under this Agreement and at any other time
reasonably requested by Agent or Administrative
Borrower;
(ii) if such Lender claims an exemption
from, or a reduction of, withholding tax under a
United States tax treaty, properly completed IRS Form
W-8BEN before the first payment of any interest under
this Agreement and at any other time reasonably
requested by Agent or Administrative Borrower;
(iii) if such Lender claims that interest
paid under this Agreement is exempt from United
States withholding tax because it is effectively
connected with a United States trade or business of
such Lender, two properly completed and executed
copies of IRS Form W-8ECI before the first payment of
any interest is due under this Agreement and at any
other time reasonably requested by Agent or
Administrative Borrower;
(iv) such other form or forms as may be
required under the IRC or other laws of the United
States as a condition to exemption from, or reduction
of, United States withholding tax.
Such Lender agrees promptly to notify Agent and Administrative Borrower of any
change in circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Lender claims exemption from, or reduction
of, withholding tax under a United States tax treaty by providing IRS Form
W-8BEN and such Lender sells, assigns, grants a participation in, or otherwise
transfers all or part of the Obligations of Borrowers to such Lender, such
Lender agrees to notify Agent of the percentage amount in which it is no longer
the beneficial owner of Obligations of Borrowers to such Lender. To the extent
of such percentage amount, Agent will treat such Lender's IRS Form W-8BEN as no
longer valid.
(c) If any Lender is entitled to a reduction in the
applicable withholding tax, Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable withholding tax after taking into
account such reduction. If the forms or other documentation required by
subsection (a) of this Section are not delivered to Agent, then Agent may
withhold from any interest payment to such Lender not providing such forms or
other documentation an amount equivalent to the applicable withholding tax.
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(d) If the IRS or any other Governmental Authority of
the United States or other jurisdiction asserts a claim that Agent did not
properly withhold tax from amounts paid to or for the account of any Lender
(because the appropriate form was not delivered, was not properly executed, or
because such Lender failed to notify Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Lender shall indemnify and hold Agent harmless for
all amounts paid, directly or indirectly, by Agent as tax or otherwise,
including penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to Agent under this Section, together with
all costs and expenses (including attorneys fees and expenses). The obligation
of the Lenders under this subsection shall survive the payment of all
Obligations and the resignation or replacement of Agent.
(e) All payments made by Borrowers hereunder or under
any note or other Loan Document will be made without setoff, counterclaim, or
other defense, except as required by applicable law other than for Taxes (as
defined below). All such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction (other than the United States) or by any political
subdivision or taxing authority thereof or therein (other than of the United
States) with respect to such payments (but excluding, any tax imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein (i) measured by or based on the net income or net profits of a Lender,
or (ii) to the extent that such tax results from a change in the circumstances
of the Lender, including a change in the residence, place of organization, or
principal place of business of the Lender, or a change in the branch or lending
office of the Lender participating in the transactions set forth herein) and all
interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, each Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any note, including any amount paid pursuant to
this Section 16.11(e) after withholding or deduction for or on account of any
Taxes, will not be less than the amount provided for herein; provided, however,
that Borrowers shall not be required to increase any such amounts payable to
Agent or any Lender (i) that is not organized under the laws of the United
States, if such Person fails to comply with the other requirements of this
Section 16.11, or (ii) if the increase in such amount payable results from
Agent's or such Lender's own willful misconduct or gross negligence. Borrowers
will furnish to Agent as promptly as possible after the date the payment of any
Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by Borrowers.
16.12 COLLATERAL MATTERS.
(a) The Lenders hereby irrevocably authorize Agent,
at its option and in its sole discretion, to release or subordinate any Lien on
any Collateral upon the termination of the Commitments and payment and
satisfaction in full by Borrowers of all Obligations. Except as provided above,
Agent will not execute and deliver a release of any
67
Lien on any Collateral without the prior written authorization of (y) if the
release is of all or a substantial portion of the Collateral, all of the
Lenders, or (z) otherwise, the Required Lenders. Upon request by Agent or
Administrative Borrower at any time, the Lenders will confirm in writing Agent's
authority to release any such Liens on particular types or items of Collateral
pursuant to this Section 16.12; provided, however, that (1) Agent shall not be
required to execute any document necessary to evidence such release on terms
that, in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such Lien without
recourse, representation, or warranty, and (2) such release shall not in any
manner discharge, affect, or impair the Obligations or any Liens (other than
those expressly being released) upon (or obligations of Borrowers in respect of)
all interests retained by Borrowers, including, the proceeds of any sale, all of
which shall continue to constitute part of the Collateral.
(b) Agent shall have no obligation whatsoever to any
of the Lenders to assure that the Collateral exists or is owned by Borrowers or
is cared for, protected, or insured or has been encumbered, or that the Agent's
Liens have been properly or sufficiently or lawfully created, perfected,
protected, or enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of the rights,
authorities and powers granted or available to Agent pursuant to any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission, or event related thereto, subject to the terms and conditions
contained herein, Agent may act in any manner it may deem appropriate, in its
sole discretion given Agent's own interest in the Collateral in its capacity as
one of the Lenders and that Agent shall have no other duty or liability
whatsoever to any Lender as to any of the foregoing, except as otherwise
provided herein.
16.13 RESTRICTIONS ON ACTIONS BY LENDERS; SHARING OF PAYMENTS.
(a) Each of the Lenders agrees that it shall not,
without the express consent of Agent, and that it shall, to the extent it is
lawfully entitled to do so, upon the request of Agent, set off against the
Obligations, any amounts owing by such Lender to Borrowers or any deposit
accounts of Borrowers now or hereafter maintained with such Lender. Each of the
Lenders further agrees that it shall not, unless specifically requested to do so
by Agent, take or cause to be taken any action, including, the commencement of
any legal or equitable proceedings, to foreclose any Lien on, or otherwise
enforce any security interest in, any of the Collateral the purpose of which is,
or could be, to give such Lender any preference or priority against the other
Lenders with respect to the Collateral.
(b) If, at any time or times any Lender shall receive
(i) by payment, foreclosure, setoff, or otherwise, any proceeds of Collateral or
any payments with respect to the Obligations arising under, or relating to, this
Agreement or the other Loan Documents, except for any such proceeds or payments
received by such Lender from Agent pursuant to the terms of this Agreement, or
(ii) payments from Agent in excess of such Lender's ratable portion of all such
distributions by Agent, such Lender promptly shall (1) turn the same over to
Agent, in kind, and with such endorsements as may be required to negotiate the
same to
68
Agent, or in immediately available funds, as applicable, for the account of all
of the Lenders and for application to the Obligations in accordance with the
applicable provisions of this Agreement, or (2) purchase, without recourse or
warranty, an undivided interest and participation in the Obligations owed to the
other Lenders so that such excess payment received shall be applied ratably as
among the Lenders in accordance with their Pro Rata Shares; provided, however,
that if all or part of such excess payment received by the purchasing party is
thereafter recovered from it, those purchases of participations shall be
rescinded in whole or in part, as applicable, and the applicable portion of the
purchase price paid therefor shall be returned to such purchasing party, but
without interest except to the extent that such purchasing party is required to
pay interest in connection with the recovery of the excess payment.
16.14 AGENCY FOR PERFECTION. Agent hereby appoints each other Lender
as its agent (and each Lender hereby accepts such appointment) for the purpose
of perfecting the Agent's Liens in assets which, in accordance with Article 9 of
the Code can be perfected only by possession. Should any Lender obtain
possession of any such Collateral, such Lender shall notify Agent thereof, and,
promptly upon Agent's request therefor shall deliver such Collateral to Agent or
in accordance with Agent's instructions.
16.15 PAYMENTS BY AGENT TO THE LENDERS. All payments to be made by
Agent to the Lenders shall be made by bank wire transfer or internal transfer of
immediately available funds pursuant to such wire transfer instructions as each
party may designate for itself by written notice to Agent. Concurrently with
each such payment, Agent shall identify whether such payment (or any portion
thereof) represents principal, premium, or interest of the Obligations.
16.16 CONCERNING THE COLLATERAL AND RELATED LOAN DOCUMENTS. Each
member of the Lender Group authorizes and directs Agent to enter into this
Agreement and the other Loan Documents relating to the Collateral, for the
benefit of the Lender Group. Each member of the Lender Group agrees that any
action taken by Agent in accordance with the terms of this Agreement or the
other Loan Documents relating to the Collateral and the exercise by Agent of its
powers set forth therein or herein, together with such other powers that are
reasonably incidental thereto, shall be binding upon all of the Lenders.
16.17 FIELD AUDITS AND EXAMINATION REPORTS; CONFIDENTIALITY;
DISCLAIMERS BY LENDERS; OTHER REPORTS AND INFORMATION. By becoming a party to
this Agreement, each Lender:
(a) is deemed to have requested that Agent furnish
such Lender, promptly after it becomes available, a copy of each field audit or
examination report (each a "Report" and collectively, "Reports") prepared by or
at the request of Agent, and Agent shall so furnish each Lender with such
Reports,
(b) expressly agrees and acknowledges that Agent does
not (i) make any representation or warranty as to the accuracy of any Report,
and (ii) shall not be liable for any information contained in any Report,
69
(c) expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that Agent or other party
performing any audit or examination will inspect only specific information
regarding Borrowers and will rely significantly upon the Books, as well as on
representations of Borrowers' personnel,
(d) agrees to keep all Reports and other material,
non-public information regarding Borrowers and their Subsidiaries and their
operations, assets, and existing and contemplated business plans in a
confidential manner; it being understood and agreed by Borrowers that in any
event such Lender may make disclosures (a) to counsel for and other advisors,
accountants, and auditors to such Lender, (b) reasonably required by any bona
fide potential or actual Assignee or Participant in connection with any
contemplated or actual assignment or transfer by such Lender of an interest
herein or any participation interest in such Lender's rights hereunder, (c) of
information that has become public by disclosures made by Persons other than
such Lender, its Affiliates, assignees, transferees, or Participants, or (d) as
required or requested by any court, governmental or administrative agency,
pursuant to any subpoena or other legal process, or by any law, statute,
regulation, or court order; provided, however, that, unless prohibited by
applicable law, statute, regulation, or court order, such Lender shall notify
Administrative Borrower of any request by any court, governmental or
administrative agency, or pursuant to any subpoena or other legal process for
disclosure of any such non-public material information concurrent with, or where
practicable, prior to the disclosure thereof, and
(e) without limiting the generality of any other
indemnification provision contained in this Agreement, agrees: (i) to hold Agent
and any such other Lender preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying Lender may reach or
draw from any Report in connection with any loans or other credit accommodations
that the indemnifying Lender has made or may make to Borrowers, or the
indemnifying Lender's participation in, or the indemnifying Lender's purchase
of, a loan or loans of Borrowers; and (ii) to pay and protect, and indemnify,
defend and hold Agent, and any such other Lender preparing a Report harmless
from and against, the claims, actions, proceedings, damages, costs, expenses,
and other amounts (including, attorneys fees and costs) incurred by Agent and
any such other Lender preparing a Report as the direct or indirect result of any
third parties who might obtain all or part of any Report through the
indemnifying Lender.
In addition to the foregoing: (x) any Lender may from time to time request of
Agent in writing that Agent provide to such Lender a copy of any report or
document provided by Borrowers to Agent that has not been contemporaneously
provided by Borrowers to such Lender, and, upon receipt of such request, Agent
shall provide a copy of same to such Lender, (y) to the extent that Agent is
entitled, under any provision of the Loan Documents, to request additional
reports or information from Borrowers, any Lender may, from time to time,
reasonably request Agent to exercise such right as specified in such Lender's
notice to Agent, whereupon Agent promptly shall request of Administrative
Borrower the additional reports or information reasonably specified by such
Lender, and, upon receipt thereof from Administrative Borrower, Agent promptly
shall provide a copy of same to such Lender, and
70
(z) any time that Agent renders to Administrative Borrower a statement regarding
the Loan Account, Agent shall send a copy of such statement to each Lender.
16.18 SEVERAL OBLIGATIONS; NO LIABILITY. Notwithstanding that
certain of the Loan Documents now or hereafter may have been or will be executed
only by or in favor of Agent in its capacity as such, and not by or in favor of
the Lenders, any and all obligations on the part of the Lenders (if any) to make
any credit available hereunder shall constitute the several (and not joint)
obligations of the respective Lenders on a ratable basis, according to their
respective Commitments, to make an amount of such credit not to exceed, in
principal amount, at any one time outstanding, the amount of their respective
Commitments. Nothing contained herein shall confer upon any Lender any interest
in, or subject any Lender to any liability for, or in respect of, the business,
assets, profits, losses, or liabilities of any other Lender. Each Lender shall
be solely responsible for notifying its Participants of any matters relating to
the Loan Documents to the extent any such notice may be required, and no Lender
shall have any obligation, duty, or liability to any Participant of any other
Lender. Except as provided in Section 16.7, no member of the Lender Group shall
have any liability for the acts of any other member of the Lender Group. No
Lender shall be responsible to any Borrower or any other Person for any failure
by any other Lender to fulfill its obligations to make credit available
hereunder, nor to advance for it or on its behalf in connection with its
Commitment, nor to take any other action on its behalf hereunder or in
connection with the financing contemplated herein.
16.19 LEGAL REPRESENTATION OF AGENT. In connection with the
negotiation, drafting, and execution of this Agreement and the other Loan
Documents, or in connection with future legal representation relating to loan
administration, amendments, modifications, waivers, or enforcement of remedies,
Paul, Hastings, Xxxxxxxx & Xxxxxx LLP ("PHJW") only has represented and only
shall represent WFF in its capacity as Agent and as a Lender. Each other Lender
hereby acknowledges that PHJW does not represent it in connection with any such
matters.
17. GENERAL PROVISIONS.
17.1 EFFECTIVENESS. This Agreement shall be binding and deemed
effective when executed by Borrowers, Agent, and each Lender whose signature is
provided for on the signature pages hereof.
17.2 SECTION HEADINGS. Headings and numbers have been set forth
herein for convenience only. Unless the contrary is compelled by the context,
everything contained in each Section applies equally to this entire Agreement.
17.3 INTERPRETATION. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against the Lender Group or
Borrowers, whether under any rule of construction or otherwise. On the contrary,
this Agreement has been reviewed by all parties and shall be construed and
interpreted according to the ordinary meaning of the words used so as to
accomplish fairly the purposes and intentions of all parties hereto.
71
17.4 SEVERABILITY OF PROVISIONS. Each provision of this Agreement
shall be severable from every other provision of this Agreement for the purpose
of determining the legal enforceability of any specific provision.
17.5 AMENDMENTS IN WRITING. This Agreement only can be amended by a
writing in accordance with Section 15.1.
17.6 COUNTERPARTS; TELEFACSIMILE EXECUTION. This Agreement may be
executed in any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall constitute but one and
the same Agreement. Delivery of an executed counterpart of this Agreement by
telefacsimile shall be equally as effective as delivery of an original executed
counterpart of this Agreement. Any party delivering an executed counterpart of
this Agreement by telefacsimile also shall deliver an original executed
counterpart of this Agreement but the failure to deliver an original executed
counterpart shall not affect the validity, enforceability, and binding effect of
this Agreement. The foregoing shall apply to each other Loan Document mutatis
mutandis.
17.7 REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Borrower or the transfer to the Lender Group
of any property should for any reason subsequently be declared to be void or
voidable under any state or federal law relating to creditors' rights, including
provisions of the Bankruptcy Code relating to fraudulent conveyances,
preferences, or other voidable or recoverable payments of money or transfers of
property (collectively, a "Voidable Transfer"), and if the Lender Group is
required to repay or restore, in whole or in part, any such Voidable Transfer,
or elects to do so upon the reasonable advice of its counsel, then, as to any
such Voidable Transfer, or the amount thereof that the Lender Group is required
or elects to repay or restore, and as to all reasonable costs, expenses, and
attorneys fees of the Lender Group related thereto, the liability of Borrowers
automatically shall be revived, reinstated, and restored and shall exist as
though such Voidable Transfer had never been made.
17.8 CONFIDENTIALITY. The Agent and the Lenders each individually
(and not jointly or jointly and severally) agree that material, non-public
information regarding Borrowers and their Subsidiaries, their operations,
assets, and existing and contemplated business plans shall be treated by Agent
and the Lenders in a confidential manner, and shall not be disclosed by Agent
and the Lenders to Persons who are not parties to this Agreement, except: (a) to
attorneys for and other advisors, accountants, auditors, and consultants to any
member of the Lender Group, (b) to Subsidiaries and Affiliates of any member of
the Lender Group (including the Bank Product Providers), provided that any such
Subsidiary or Affiliate shall have agreed to receive such information hereunder
subject to the terms of this Section 17.8, (c) as may be required by statute,
decision, or judicial or administrative order, rule, or regulation, (d) as may
be agreed to in advance by Administrative Borrower or its Subsidiaries or as
requested or required by any Governmental Authority pursuant to any subpoena or
other legal process, (e) as to any such information that is or becomes generally
available to the public (other than as a result of prohibited disclosure by
Agent or the
72
Lenders), (f) in connection with any assignment, prospective assignment, sale,
prospective sale, participation or prospective participations, or pledge or
prospective pledge of any Lender's interest under this Agreement, provided that
any such assignee, prospective assignee, purchaser, prospective purchaser,
participant, prospective participant, pledgee, or prospective pledgee shall have
agreed in writing to receive such information hereunder subject to the terms of
this Section, and (g) in connection with any litigation or other adversary
proceeding involving parties hereto which such litigation or adversary
proceeding involves claims related to the rights or duties of such parties under
this Agreement or the other Loan Documents. The provisions of this Section 17.8
shall survive for 2 years after the payment in full of the Obligations.
17.9 INTEGRATION. This Agreement, together with the other Loan
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof.
17.10 ADMINISTRATIVE BORROWER. Each Borrower hereby irrevocably
appoints Parent as the borrowing agent and attorney-in-fact for all Borrowers
(the "Administrative Borrower") which appointment shall remain in full force and
effect unless and until Agent shall have received prior written notice signed by
each Borrower that such appointment has been revoked and that another Borrower
has been appointed Administrative Borrower. Each Borrower hereby irrevocably
appoints and authorizes the Administrative Borrower (i) to provide Agent with
all notices with respect to Advances and Letters of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action as the Administrative Borrower deems
appropriate on its behalf to obtain Advances and Letters of Credit and to
exercise such other powers as are reasonably incidental thereto to carry out the
purposes of this Agreement. It is understood that the handling of the Loan
Account and Collateral of Borrowers in a combined fashion, as more fully set
forth herein, is done solely as an accommodation to Borrowers in order to
utilize the collective borrowing powers of Borrowers in the most efficient and
economical manner and at their request, and that Lender Group shall not incur
liability to any Borrower as a result hereof. Each Borrower expects to derive
benefit, directly or indirectly, from the handling of the Loan Account and the
Collateral in a combined fashion since the successful operation of each Borrower
is dependent on the continued successful performance of the integrated group. To
induce the Lender Group to do so, and in consideration thereof, each Borrower
hereby jointly and severally agrees to indemnify each member of the Lender Group
and hold each member of the Lender Group harmless against any and all liability,
expense, loss or claim of damage or injury, made against the Lender Group by any
Borrower or by any third party whosoever, arising from or incurred by reason of
(a) the handling of the Loan Account and Collateral of Borrowers as herein
provided, (b) the Lender Group's relying on any instructions of the
Administrative Borrower, or (c) any other action taken by the Lender Group
hereunder or under the other Loan Documents, except that Borrowers will have no
liability to the relevant Agent-Related Person or Lender-Related Person under
this Section 17.10 with respect to any liability that has been finally
determined by a court of competent
73
jurisdiction to have resulted solely from the gross negligence or willful
misconduct of such Agent-Related Person or Lender-Related Person, as the case
may be.
17.11 EFFECT OF THIS AGREEMENT. The Borrowers, the Lenders, and the
Agent hereby agree that this Agreement amends and restates the Existing Loan
Agreement in its entirety. The rights and duties of Borrowers, Agent, and
Lenders with respect to all matters relating to time periods prior to the
Closing Date shall be determined in accordance with the terms of the Existing
Loan Agreement, and the rights and duties of Borrowers, Agent, and Lenders with
respect to all matters relating to time periods from and after the Closing Date
shall be determined in accordance with the provisions of this Agreement and the
other Loan Documents. Any reference in any other Loan Document to the "Loan
Agreement", "thereunder", "therein", "thereof" or words of like import referring
to the Existing Loan Agreement shall mean and refer to this Agreement (as
amended or otherwise modified from time to time). Any reference in any other
Loan Document to the "Obligations" or any similar term including or referencing
obligations under the Existing Loan Agreement shall include and reference the
Obligations as defined in this Agreement (as amended or otherwise modified from
time to time). The security interests granted pursuant to the Existing Loan
Agreement shall, as modified hereby, continue in full force and effect, and are
hereby affirmed, with respect to this Agreement and the Obligations as defined
herein. The obligations of each Borrower set forth in the Intercompany
Subordination Agreement are hereby reaffirmed in their entirety and shall remain
in full force and effect. In the event of a conflict between the terms and
provisions of this Agreement and the terms and provisions of any other Loan
Document, the terms and provisions of this Agreement shall govern.
[Signature page to follow.]
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date first above written.
HYPERCOM CORPORATION, HYPERCOM EMEA, INC.,
a Delaware corporation FKA HYPERCOM EUROPE LIMITED, INC., an
Arizona corporation
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
Title: Executive Vice President and Name: Xxxx X. Xxxxxx
Chief Financial and Title: Executive Vice President
Administrative Officer
HYPERCOM U.S.A., INC., HYPERCOM MANUFACTURING
a Delaware corporation RESOURCES, INC.,
an Arizona corporation
By: /s/ Xxxx X. Xxxxxx
By: /s/ Xxxx X. Xxxxxx Name: Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx Title: Executive Vice President
Title: Executive Vice President
HYPERCOM LATINO AMERICA, INC.,
an Arizona corporation
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Executive Vice President
XXXXX FARGO FOOTHILL, INC.,
a California corporation, formerly known as
Foothill Capital Corporation, as Agent and as a
Lender
By: /s/ Xxxx Xxxxxxxxx
Name: Xxxx Xxxxxxxxx
Title: Senior Vice President
TABLE OF CONTENTS
Page
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1. DEFINITIONS AND CONSTRUCTION........................................................... 1
1.1 Definitions................................................................... 1
1.2 Accounting Terms.............................................................. 17
1.3 Code.......................................................................... 17
1.4 Construction.................................................................. 17
1.5 Schedules and Exhibits........................................................ 18
2. LOAN AND TERMS OF PAYMENT.............................................................. 18
2.1 Revolver Advances............................................................. 18
2.3 Borrowing Procedures and Settlements.......................................... 18
(a) Procedure for Borrowing.............................................. 18
(b) Making of Advances................................................... 19
(c) Agent Advances....................................................... 21
(d) Settlement........................................................... 22
(e) Notation............................................................. 23
(f) Lenders' Failure to Perform.......................................... 24
(g) Optional Overadvances................................................ 24
2.4 Payments...................................................................... 25
(a) Payments by Borrowers................................................ 25
(b) Apportionment and Application........................................ 25
2.5 Overadvances.................................................................. 28
2.6 Interest Rates and Letter of Credit Fee Rates, Payments, and Calculations..... 28
(a) Interest Rates....................................................... 28
(b) Letter of Credit Fee................................................. 28
(c) Default Rate......................................................... 28
(d) Payment.............................................................. 29
(e) Computation.......................................................... 29
(f) Intent to Limit Charges to Maximum Lawful Rate....................... 29
2.8 Crediting Payments............................................................ 29
2.9 Designated Account............................................................ 30
2.10 Maintenance of Loan Account; Statements of Obligations........................ 30
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(continued)
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2.11 Fees.......................................................................... 30
(a) Fee Letter Fees...................................................... 30
2.12 Letters of Credit............................................................. 31
2.13 Capital Requirements.......................................................... 34
2.14 Joint and Several Liability of Borrowers...................................... 35
3. CONDITIONS; TERM OF AGREEMENT.......................................................... 37
3.1 Conditions Precedent to the Initial Extension of Credit....................... 37
3.3 Conditions Precedent to all Extensions of Credit.............................. 39
3.4 Term.......................................................................... 39
3.5 Effect of Termination......................................................... 40
3.6 Early Termination by Borrowers................................................ 40
4. CREATION OF SECURITY INTEREST.......................................................... 41
4.1 Grant of Security Interest.................................................... 41
4.4 Delivery of Additional Documentation Required................................. 41
4.5 Power of Attorney............................................................. 42
4.6 Right to Inspect.............................................................. 42
5. REPRESENTATIONS AND WARRANTIES......................................................... 42
5.1 No Encumbrances............................................................... 42
5.7 Location of Chief Executive Office; FEIN...................................... 43
5.8 Due Organization and Qualification............................................ 43
5.9 Due Authorization; No Conflict................................................ 44
5.10 Litigation.................................................................... 44
5.12 Fraudulent Transfer........................................................... 45
5.13 Employee Benefits............................................................. 45
5.15 Brokerage Fees................................................................ 45
5.19 Complete Disclosure........................................................... 45
5.20 Indebtedness.................................................................. 46
6. AFFIRMATIVE COVENANTS.................................................................. 46
6.1 Accounting System............................................................. 46
6.3 Financial Statements, Reports, Certificates................................... 46
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(continued)
Page
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6.7 Taxes......................................................................... 49
6.10 Compliance with Laws.......................................................... 49
6.12 Brokerage Commissions......................................................... 49
6.13 Existence..................................................................... 49
6.16 Disclosure Updates............................................................ 50
7. NEGATIVE COVENANTS..................................................................... 50
7.1 Indebtedness.................................................................. 50
7.2 Liens......................................................................... 51
7.5 Change Name................................................................... 51
7.15 Suspension.................................................................... 52
7.18 Change in Location of Chief Executive Office.................................. 52
7.19 Qualified Cash................................................................ 52
8. EVENTS OF DEFAULT...................................................................... 52
9. THE LENDER GROUP'S RIGHTS AND REMEDIES................................................. 54
9.1 Rights and Remedies........................................................... 54
9.2 Remedies Cumulative........................................................... 56
10. TAXES AND EXPENSES..................................................................... 56
11. WAIVERS; INDEMNIFICATION............................................................... 56
11.1 Demand; Protest; etc.......................................................... 56
11.2 The Lender Group's Liability for Collateral................................... 56
11.3 Indemnification............................................................... 57
12. NOTICES................................................................................ 57
13. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER............................................. 59
14. ASSIGNMENTS AND PARTICIPATIONS; SUCCESSORS............................................. 60
14.1 Assignments and Participations................................................ 60
14.2 Successors.................................................................... 62
15. AMENDMENTS; WAIVERS.................................................................... 62
15.1 Amendments and Waivers........................................................ 62
15.2 Replacement of Holdout Lender ............................................... 64
15.3 No Waivers; Cumulative Remedies............................................... 64
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TABLE OF CONTENTS
(continued)
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16. AGENT; THE LENDER GROUP................................................................ 65
16.1 Appointment and Authorization of Agent........................................ 65
16.2 Delegation of Duties.......................................................... 66
16.3 Liability of Agent............................................................ 66
16.4 Reliance by Agent............................................................. 66
16.5 Notice of Default or Event of Default......................................... 67
16.6 Credit Decision............................................................... 67
16.7 Costs and Expenses; Indemnification........................................... 68
16.8 Agent in Individual Capacity.................................................. 68
16.9 Successor Agent............................................................... 69
16.10 Lender in Individual Capacity................................................. 69
16.11 Withholding Taxes............................................................. 69
16.12 Collateral Matters............................................................ 72
16.13 Restrictions on Actions by Lenders; Sharing of Payments....................... 72
16.14 Agency for Perfection......................................................... 73
16.15 Payments by Agent to the Lenders.............................................. 73
16.16 Concerning the Collateral and Related Loan Documents.......................... 73
16.17 Field Audits and Examination Reports; Confidentiality; Disclaimers by
Lenders; Other Reports and Information........................................ 74
16.18 Several Obligations; No Liability............................................. 75
16.19 Legal Representation of Agent................................................. 75
17. GENERAL PROVISIONS..................................................................... 76
17.1 Effectiveness................................................................. 76
17.2 Section Headings.............................................................. 76
17.3 Interpretation................................................................ 76
17.4 Severability of Provisions.................................................... 76
17.5 Amendments in Writing......................................................... 76
17.6 Counterparts; Telefacsimile Execution......................................... 76
17.7 Revival and Reinstatement of Obligations...................................... 76
17.8 Confidentiality............................................................... 77
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(continued)
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17.9 Integration................................................................... 77
17.10 Administrative Borrower....................................................... 78
17.11 Effect of this Agreement...................................................... 78
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