FIRST AMENDMENT TO LOAN AGREEMENT
THIS FIRST AMENDMENT AGREEMENT ("Amendment") made this 26th day of
September, 1997 among XXXXXX INTERNATIONAL CORP., a Delaware corporation having
its principal place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 ("Xxxxxx" or a "Borrower"), HAPL LEASING CO., INC., a New York corporation
having its principal place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("HAPL" or a "Borrower") (Xxxxxx and HAPL sometimes referred to
herein as a "Borrower" or collectively, as the "Borrowers"), SEWING MACHINE
EXCHANGE, INC., an Illinois corporation having an office at 000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("SMX"), PULSE MICROSYSTEMS LTD., an
Ontario, Canada corporation having its principal place of business at 0000
Xxxxxxxxxx Xxxxxxxxx, Xxxx 00, Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X0X0 ("Pulse"),
SEDECO, INC., a Texas corporation having its principal place of business at 0000
X. Xxxxxx Xxxxxx, Xxxx Xxxxx, Xxxxx 00000 ("Sedeco") and XXXXXX EQUIPMENT
CONNECTION, INC., a Delaware corporation having an office at 000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Equipment") (Xxxxxx,( with respect to
Loans made to HAPL), HAPL, (with respect to Loans made to and Letters of Credit
issued for Xxxxxx), SMX, Pulse, Sedeco and Equipment being individually, a
"Guarantor" and collectively, the "Guarantors"), THE BANK OF NEW YORK, a New
York banking organization, having an office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx
Xxx Xxxx 00000 ("BNY" or a "Bank") FLEET BANK, N.A., a national banking
association, having an office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx
("Fleet" or a "Bank"), MELLON BANK, N.A., a national banking association, having
an office at 000 XXX Xxxxx, Xxxx Xxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxx Xxxx
00000-0000 ("Mellon" or a "Bank") and THE BANK OF NEW YORK, as agent for the
Banks (the "Agent"). W I T N E S S E T H :
WHEREAS, Hirsch, HAPL, SMX, Sedeco and Pulse, and BNY and Fleet, as lending
Banks, and BNY, as Agent, entered into a Loan Agreement dated as of the 7th day
of January, 1997 (hereinafter the "Agreement"); and
WHEREAS, BNY and Fleet have made loans to Xxxxxx as evidenced by and as
to be evidenced by certain notes of Xxxxxx and specifying interest to be paid
thereon; and
WHEREAS, Xxxxxx has requested certain increases and changes in the
revolving credit facility made available pursuant to the Agreement.
NOW, THEREFORE, in consideration of Ten ($10.00) Dollars and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Hirsch, HAPL, the other Guarantors and the Banks and the Agent do
hereby agree as follows:
1. Defined Terms. As used in this Amendment, capitalized terms, unless
otherwise defined, shall have the meanings set forth in the Agreement.
2. Representations and Warranties. As an inducement for the Agent and the
Banks to enter into this Amendment, Xxxxxx, HAPL and each of the other
Guarantors represent and warrant as follows:
A. That with respect to the Agreement and the Loan Documents executed in
connection therewith and herewith:
(i) There are no defenses or offsets to Xxxxxx'x or any Guarantor's
obligations under the Agreement, as in effect prior to or subsequent to this
Amendment, the Notes or any of the Loan Documents or any other agreements in
favor of the Agent or the Banks referred to in the Agreement, and if any such
defenses or offsets exist without the knowledge of Xxxxxx or any Guarantor, the
same are hereby waived.
(ii) All of the representations and warranties made by Xxxxxx and any
Guarantor in the Agreement, as amended hereby, are true and correct in all
material respects as if made on the date hereof, except for those made with
respect to a particular date, which such representations and warranties are
restated as of such date; and provided further that the representations and
warranties set forth in Section 4.01(f) of the Agreement shall relate to the
consolidated financial statements of Xxxxxx and the Guarantors for the fiscal
year ended January 31, 1997.
(iii) The outstanding aggregate principal balance of the Revolving Credit
Loans is $5,000,000.00 and interest has been paid through August 31, 1997.
(iv) The outstanding aggregate L/C Exposure is $11,254,760.38.
3. Amendment. The Agreement is hereby amended and restated to read as
follows:
AMENDED AND RESTATED LOAN AGREEMENT
Dated and Restated as of September 26, 1997
XXXXXX INTERNATIONAL CORP., a Delaware corporation having its principal
place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Xxxxxx"
or a "Borrower"), HAPL LEASING CO., INC., a New York corporation having its
principal place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
("HAPL" or a "Borrower") (Xxxxxx and HAPL sometimes referred to herein as a
"Borrower" or collectively, as the "Borrowers"), SEWING MACHINE EXCHANGE, INC.,
an Illinois corporation having an office at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx,
Xxx Xxxx 00000 ("SMX"), PULSE MICROSYSTEMS LTD., an Ontario, Canada corporation
having its principal place of business at 0000 Xxxxxxxxxx Xxxxxxxxx, Xxxx 00,
Xxxxxxxxxxx, Xxxxxxx, Xxxxxx X0X0X0 ("Pulse"), SEDECO, INC., a Texas corporation
having its principal place of business at 0000 X. Xxxxxx Xxxxxx, Xxxx Xxxxx,
Xxxxx 00000 ("Sedeco") and XXXXXX EQUIPMENT CONNECTION, INC., a Delaware
corporation having an office at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx
00000 ("Equipment") (Xxxxxx, with respect to Loans made to HAPL, HAPL, with
respect to Loans made to and Letters of Credit issued for Xxxxxx, SMX, Pulse,
Sedeco and Equipment being individually, a "Guarantor" and collectively, the
"Guarantors"), THE BANK OF NEW YORK, a New York banking organization, having an
office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx Xxx Xxxx 00000 ("BNY" or a "Bank")
FLEET BANK, N.A., a national banking association, having an office at 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx ("Fleet" or a "Bank"), MELLON BANK, N.A., a
national banking association, having an office at 000 XXX Xxxxx, Xxxx Xxxxx,
00xx Xxxxx, Xxxxxxxxx, Xxx Xxxx 00000-0000 ("Mellon" or a "Bank") and THE BANK
OF NEW YORK, as agent for the Banks (the "Agent") hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. Certain Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ABR Applicable Margin" shall have the meaning set forth in Section 2.04 of
this Agreement.
"Adjusted LIBOR Rate" means, with respect to any Eurodollar Loan for any
Interest Period, an interest rate per annum (rounded, if not already a whole
multiple of 1/100 of one (.01%) percent to the nearest 1/100 of one (.01%)
percent) determined by the Agent to be equal to the quotient of (a) the LIBOR
Rate divided by (b) a percentage equal to 100% minus the Eurocurrency Reserve
Requirement as determined by the Agent on the date the Adjusted LIBOR Rate is
determined.
"Affiliate" means, as to any Person (i) a Person which directly or
indirectly controls, or is controlled by, or is under common control with, such
Person; (ii) a Person which directly or indirectly beneficially owns or holds
ten (10%) percent or more of any class of voting stock of, or ten (10%) percent
or more of the equity interest in, such Person; or (iii) a Person ten (10%)
percent or more of the voting stock of which, or ten (10%) or more of the equity
interest of which, is directly or indirectly beneficially owned or held by such
Person. The term control means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract, or
otherwise.
"Agent" means The Bank of New York, or any bank which succeeds to the
position of Agent, as provided in this Agreement.
"Aggregate Xxxxxx Outstandings" means, at any time, the aggregate of (i)
the principal amount of outstanding Revolving Credit Loans (Xxxxxx) and (ii) L/C
Exposure.
"Agreement" means this Amended and Restated Loan Agreement, as amended,
supplemented or modified from time to time.
"Alternate Base Rate" means, for any day, an interest rate per annum equal
to the higher of (i) the Prime Rate in effect on such day (computed on the basis
of the actual number of days elapsed over a year of 365/366 days) or (ii) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1% (computed on
the basis of the actual number of days elapsed over a year of 360 days). For
purposes of this Agreement any change in the Alternate Base Rate due to a change
in the Prime Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds Effective
Rate, respectively. The Agent shall use its best efforts to notify the Borrower
of any change in the Alternate Base Rate, but any failure of the Agent to so
notify the Borrower shall not void or otherwise delay the effectiveness of the
change in the Alternate Base Rate. If for any reason the Agent shall have
determined (which determination shall be conclusive absent manifest error) that
it is unable to ascertain the Federal Funds Effective Rate for any reason,
including, without limitation, the inability or failure of the Agent to obtain
sufficient bids or publications in accordance with the terms thereof, the
Alternate Base Rate shall be determined without regard to clause (ii) of the
first sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist.
"Alternate Base Rate Loan" means a Loan bearing interest at the Alternate
Base Rate.
"Arranger" means BNY Capital Markets, Inc.
"Bank" or "Banks" means one or more, as the context requires, of BNY,
Fleet, Mellon and each other lender which becomes a party to this Agreement.
"Board of Governors" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrowing Base" means eighty five (85%) percent of the book value,
calculated in accordance with GAAP, of Eligible Lease Assets. The Agent and the
Required Banks reserve the right to revise the advance rate, based on the
results of a Collateral Audit.
"Borrowing Base Certificate" means a certificate in the form of Exhibit D
annexed hereto signed by the chief executive officer or the chief financial
officer of HAPL and submitted to the Agent in accordance with Sections 3.05(l),
3.06(b) and 5.01(m) hereof.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City, provided that, if the relevant day relates
to a Eurodollar Loan, an Interest Period, or notice with respect to a Eurodollar
Loan, the term "Business Day" shall mean a day on which dealings in dollar
deposits are also carried on in the London interbank market and banks are open
for business in London.
"Capital Lease" means a lease which has been or should be, in accordance
with GAAP, capitalized on the books of the lessee.
"Collateral" shall have the meaning set forth in Section 3.05(i) hereof.
"Collateral Audit" means an examination of the books and records of HAPL,
to be performed by employees or other representatives of the Agent.
"Commitment" means, with respect to each Bank, the aggregate obligations of
such Bank to (i) make Revolving Credit Loans (Xxxxxx) and to make the Term Loans
to Xxxxxx pursuant to the terms and conditions of this Agreement, (ii) make
Revolving Credit Loans (HAPL) to HAPL pursuant to the terms and conditions of
this Agreement and (iii) participate in Letters of Credit issued pursuant to the
terms and conditions of this Agreement, in each case in the aggregate Dollar
amount set forth in Schedule 1.0 A annexed hereto.
"Commitment Letter" means the letter from BNY to Xxxxxx and HAPL, dated
August 15, 1997 pursuant to which BNY agreed to extend forty five (45%) percent
of a credit facility as described therein to each of Xxxxxx and HAPL and the
Arranger agreed to use its best efforts to arrange, structure and syndicate such
credit facilities.
"Consolidated Affiliates" means, as to any Person, those Affiliates of such
Person which are consolidated with such Person in the financial statements
delivered pursuant to Section 5.01(b).
"Consolidated Capital Expenditures" means, as to any Person, the aggregate
amount of any expenditures (including purchase money Debt or purchase money
Liens) by such Person and its Consolidated Affiliates for assets (including
fixed assets acquired under Capital Leases) which it is contemplated will be
used or usable in fiscal years subsequent to the year of acquisition, all
computed and consolidated in accordance with GAAP.
"Consolidated Current Liabilities" means, as to any Person, the aggregate
amount of all liabilities of such Person and its Consolidated Affiliates
(including tax and other proper accruals) which would be properly classified as
current liabilities, all computed and consolidated in accordance with GAAP.
"Consolidated Funded Debt" means, as to Xxxxxx and its Consolidated
Affiliates, the aggregate of the Funded Debt of Xxxxxx and its Consolidated
Affiliates, computed and consolidated in accordance with GAAP.
"Consolidated Tangible Net Worth" means, as to any Person, the excess of
(i) such Person's Consolidated Total Assets, less all intangible assets properly
classified as such in accordance with GAAP, including, but without limitation,
patents, patent rights, trademarks, trade names, franchises, copyrights,
licenses, permits and goodwill, over (ii) such Person's Consolidated Total
Liabilities.
"Consolidated Total Assets" means, as to any Person, the aggregate net book
value of the assets of such Person and its Consolidated Affiliates after all
appropriate adjustments in accordance with GAAP (including without limitation,
reserves for doubtful receivables, obsolescence, depreciation and amortization
and excluding the amount of any write-up or revaluation of any asset).
"Consolidated Total Liabilities" means, as to any Person, all of the
liabilities of such Person and its Consolidated Affiliates, including all items
which, in accordance with GAAP, would be included on the liability side of the
balance sheet (other than capital stock, capital surplus and retained earnings)
computed and consolidated in accordance with GAAP.
"Debt" means, as to any Person, (i) all indebtedness or liability of such
Person for borrowed money; (ii) indebtedness of such Person for the deferred
purchase price of property or services (including trade obligations); (iii)
obligations of such Person as a lessee under Capital Leases; (iv) current
liabilities of such Person in respect of unfunded vested benefits under any
Plan; (v) obligations of such Person under letters of credit issued for the
account of such Person; (vi) obligations of such Person arising under acceptance
facilities; (vii) all guaranties, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any other
Person, or otherwise to assure a creditor against loss; (viii) obligations
secured by any Lien on property owned by such Person whether or not the
obligations have been assumed; and (ix) all other liabilities recorded as such,
or which should be recorded as such, on such Person's financial statements in
accordance with GAAP.
"Default" means any of the events specified in Section 6.01 of this
Agreement, whether or not any requirement for notice or lapse of time or any
other condition has been satisfied.
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"EBITDA" means, as to Xxxxxx and its Consolidated Affiliates for any
period, the sum of (i) net income (excluding extraordinary gains and excluding
extraordinary losses), (ii) interest expense, (iii) depreciation expense, (iv)
amortization of intangible assets and (v) federal, state and local income taxes
paid, in each case measured for the Borrower and its Consolidated Affiliates on
a consolidated basis for such period, computed and consolidated in accordance
with GAAP.
"Eligible Lease Assets" means a sales type lease or sales type leases of
industrial or commercial embroidery equipment and related software and
accessories supplied by Xxxxxx or any of the Guarantors, of which HAPL is the
lessor and the lessee of which is not more than sixty (60) days past due in any
payments due under the lease and which conform with the criteria for permanent
Non-Recourse (as hereinafter defined) takeout by a Funding Source. Eligible
Lease Assets shall not include (i) residual receivables on all leases, (ii)
leases where the lessee is 60 days past due on any other obligation to HAPL,
(iii) leases between HAPL and its Affiliates, (iv) leases aged over 12 months
(v) leases to lessees which are not located in the United States or Canada, (vi)
leases repurchased by HAPL from any Funding Source, and (vii) leases to lessees
that are the United States government or any agency or instrumentality of the
United States government or any state or local government or agency. The Agent
and the Required Banks reserve the right to revise the definition of "Eligible
Lease Assets" based on the results of a Collateral Audit.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, the regulations promulgated thereunder and the
published interpretations thereof as in effect from time to time.
"ERISA Affiliate" means any trade or business (whether or not incorporated)
which together with any other Person would be treated, with such Person, as a
single employer under Section 4001 of ERISA.
"Eurocurrency Reserve Requirement" means, with respect to the Adjusted
LIBOR Rate for an Interest Period, the daily average of the stated maximum rate
(expressed as a decimal) at which reserves (including any marginal, supplemental
or emergency reserves) are required to be maintained at the beginning of such
Interest Period under any regulation (including, but without limitation,
Regulation D) promulgated by the Board of Governors (or any successor thereto or
other governmental authority having jurisdiction over the Agent) by the Agent
against "Eurocurrency liabilities" (as such term is used in Regulation D), but
without benefit or credit for proration, exemptions or offsets that might
otherwise be available to the Agent from time to time under Regulation D.
Without limiting the effect of the foregoing, the Eurocurrency Reserve
Requirement shall reflect any other reserves required to be maintained by the
Agent against (1) any category of liabilities that includes deposits by
reference to which the Adjusted LIBOR Rate is to be determined; or (2) any
category of extension of credit or other assets that include loans bearing an
Adjusted LIBOR Rate.
"Eurodollar Loan" means a Loan bearing interest at a rate based on the
Adjusted LIBOR Rate in accordance with the provisions of Article II hereof.
"Event of Default" means any of the events specified in Section 6.01 of
this Agreement, provided that any requirement for notice or lapse of time or any
other condition has been satisfied.
"Federal Funds Effective Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published for such
day (or, if such day is not a Business Day for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by the Agent from three (3) federal funds brokers
of recognized standing selected by it.
"Fixed Charge Coverage Ratio" means, as to Xxxxxx and its Consolidated
Affiliates for any period, the ratio of (i) the difference between (a) EBITDA
for such period and (b) the sum of (x) Consolidated Capital Expenditures for
such period and (y) the amount of treasury stock of Xxxxxx acquired during such
period to (ii) the sum of (a) the current portion (as of the last day of such
period) of long term Debt (including Capital Leases), (b) interest expense for
such period and (c) dividends payable in cash during such period on preferred
stock described in clause (v) of the definition of "Funded Debt". The Fixed
Charge Coverage Ratio shall be measured and tested at the end of each fiscal
quarter and for a period covering the four (4) fiscal quarters then ended.
"Funded Debt" means, as to any Person, such Debt of such Person which is
(i) all indebtedness or liability for borrowed money; (ii) all indebtedness or
liability for the deferred purchase price of property (excluding trade
obligations); (iii) all obligations as a lessee under Capital Leases; (iv) all
obligations to reimburse the Issuing Bank for the amount of all unmatured drafts
accepted or deferred payment obligations incurred under Letters of Credit, and
(v) all liabilities of such Person under any preferred stock which, at the
option of the holder or upon the occurrence of one or more certain events, is
redeemable by such holder, or which, at the option of such holder is convertible
into Debt.
"Funded Debt to EBITDA Ratio" means, as to Xxxxxx and its Consolidated
Affiliates for any period, the ratio of (i) Consolidated Funded Debt (as of the
last day of such period) to (ii) EBITDA for such period. The Funded Debt to
EBITDA Ratio shall be measured and tested at the end of each fiscal quarter and,
in the case of EBITDA, for a period covering the four (4) fiscal quarters then
ended.
"Funding Source" means each of the funding sources set forth on Schedule
4.01(v), and any other Person to which HAPL sells sales type leases (or the
right to receive payments under sales type leases or any other portion thereof)
of embroidery equipment and related software and accessories of which HAPL is
the lessor, including Eligible Lease Assets.
"GAAP" means Generally Accepted Accounting Principles.
"Generally Accepted Accounting Principles" means those generally accepted
accounting principles and practices which are recognized as such by the American
Institute of Certified Public Accountants acting through the Financial
Accounting Standards Board ("FASB") or through other appropriate boards or
committees thereof and which are consistently applied for all periods so as to
properly reflect the financial condition, operations and cash flows of a Person,
except that any accounting principle or practice required to be changed by the
FASB (or other appropriate board or committee of the FASB) in order to continue
as a generally accepted accounting principle or practice may be so changed. Any
dispute or disagreement between either of the Borrowers and the Agent relating
to the determination of Generally Accepted Accounting Principles shall, in the
absence of manifest error, be conclusively resolved for all purposes hereof by
the written opinion with respect thereto, delivered to the Agent, of the
independent accountants selected by such Borrower and approved by the Agent for
the purpose of auditing the periodic financial statements of such Borrower.
"Guarantor" or Guarantors" means one or more of Hirsch, HAPL, SMX, Pulse,
Sedeco or Equipment, and any other Person required to guarantee the obligations
of one or both of the Borrowers in accordance with Section 5.01(k) of this
Agreement.
"Guaranty" or "Guaranties" means the guaranty or guaranties executed and
delivered by the Guarantors pursuant to Section 3.01(h), Section 3.05(h) or
Section 5.01(k) of this Agreement.
"HAPL EBIT" shall mean, with respect to HAPL, earnings before interest,
taxes and income from realization of residual value.
"Hazardous Materials" includes, without limit, any flammable explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or related materials defined in the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Section 1801 et seq.), the Resource Conservation and Recovery Act, as
amended (42 U.S.C. Sections 9601 et. seq.), and in the regulations adopted and
publications promulgated pursuant thereto, or any other federal, state or local
environmental law, ordinance, rule or regulation.
"Intercreditor Agreement" means an intercreditor agreement between the
Agent and a Funding Source, which shall provide, inter alia, that the Agent's
security interest in a lease shall be terminated upon sale of such lease to such
Funding Source, provided, however, that the Agent retains a first priority
security interest in and lien against the residual value of each lease sold by
HAPL to said Funding Source to the extent there exists a residual value in such
lease and HAPL has an interest therein, which intercreditor agreement shall be
in form and substance reasonably satisfactory to the Agent.
"Interest Determination Date" means the date on which an Alternate Base
Rate Loan is converted to a Eurodollar Loan and, in the case of a Eurodollar
Loan, the last day of the applicable Interest Period.
"Interest Payment Date" means (i) as to each Eurodollar Loan, (a) in the
case of Eurodollar Loans with Interest Periods of less than three (3) months,
the last day of such Interest Period and (b) in the case of Eurodollar Loans
with Interest Periods of three (3) months or more, the last Business Day of each
calendar quarter during the applicable Interest Period and the last day of the
applicable Interest Period and (ii) as to each Alternate Base Rate Loan, the
last Business Day of each month.
"Interest Period" means as to any Eurodollar Loan, the period commencing on
the date of such Eurodollar Loan and ending on the numerically corresponding day
in the calendar month that is one, two, three or six months thereafter, as a
Borrower may elect (or, if there is no numerically corresponding day, on the
last Business Day of such month); provided, however, (i) that no Interest Period
shall end later than the Maturity Date or the Term Loan Maturity Date, as
applicable, (ii) if any Interest Period would end on a day which shall not be a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (iii) no Interest Period in respect of a Eurodollar Loan
representing a portion of the principal required to be paid in accordance with
Section 2.12 may be selected unless the outstanding Alternate Base Rate Loans
and Eurodollar Loans for which the relevant Interest Periods end on or prior to
the date of such payment are in an aggregate amount which will be sufficient to
make such payment, (iv) interest shall accrue from and including the first day
of such Interest Period to but excluding the date of payment of such interest,
and (v) no Interest Period of particular duration with respect to a Eurodollar
Loan may be selected by a Borrower if the Agent determines, in its sole, good
faith discretion, that Eurodollar Loans with such maturities are not generally
available.
"Investment" means any stock, evidence of Debt or other security of any
Person, any loan, advance, contribution of capital, extension of credit or
commitment therefor, including without limitation the guaranty of loans made to
others (except for current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms in the ordinary course of business) and any purchase of
(i) any security of another Person or (ii) any business or undertaking of any
Person or any commitment or option to make any such purchase, or any other
investment.
"Issuing Bank" means BNY.
"Letters of Credit" means trade letters of credit and standby letters of
credit issued by the Issuing Bank for the account of Xxxxxx pursuant to the
terms and conditions of this Agreement.
"L/C Documents" means all documents required to be executed and delivered
by Xxxxxx in connection with the issuance of Letters of Credit in accordance
with the usual and customary practices of the Issuing Bank.
"L/C Exposure" means, at any time, the aggregate of (i) the amount
available to be drawn on all outstanding Letters of Credit, (ii) the aggregate
amount of all unmatured drafts accepted and deferred payment obligations
incurred by the Issuing Bank under any Letters of Credit (including such
unmatured drafts accepted and/or deferred payment obligations incurred by BNY
prior to the date of this Agreement and as identified on Schedule 1.01-C annexed
hereto), and (iii) the amount of any payments made by the Issuing Bank under any
Letters of Credit that has not been reimbursed by Xxxxxx.
"LIBOR Applicable Margin" shall have the meaning set forth in Section 2.04
of this Agreement.
"LIBOR Rate" means the rate, as reported by BNY to the Agent, quoted by BNY
to leading banks in the interbank eurodollar market as the rate at which BNY is
offering Dollar deposits in an amount equal approximately to the Eurodollar Loan
of BNY to which an Interest Period shall apply for a period equal to such
Interest Period, as quoted at approximately 11:00 a.m. two Business Days prior
to the first day of such Interest Period.
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever, including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing.
"Loan" or Loans" means Revolving Credit Loans (HAPL), Revolving Credit
Loans (Xxxxxx) and Term Loans, or any or all as the context requires, and may
refer to Alternate Base Rate Loans and/or Eurodollar Loans, as the context
requires.
"Loan Documents" means this Agreement, the Notes, the Guaranties, the
Security Agreement, the L/C Documents, the Commitment Letter and any other
document executed or delivered pursuant to this Agreement.
"Material Adverse Change" means, as to any Person, (i) a material adverse
change in the financial condition, business, operations, properties or results
of operations of such Person or (ii) any event or occurrence which could have a
material adverse effect on the ability of such Person to perform its obligations
under the Loan Documents.
"Maturity Date" means September 26, 2000.
"Multiemployer Plan" means a Plan described in Section 4001(a)(3) of ERISA
which covers employees of Xxxxxx or any ERISA Affiliate.
"Non-Recourse" means, with respect to leases sold by HAPL, sales of leases
to Funding Sources pursuant to which HAPL has no obligation to repurchase any
lease due to non-performance by the lessee, or otherwise.
"Note" or "Notes" means one or more of the Revolving Credit Notes (HAPL),
the Revolving Credit Notes (Xxxxxx) or the Term Loan Notes as the context
requires.
"Other Acquisition" means a transaction which meets the definition of an
"Acquisition" in the definition of "Permitted Acquisition" and satisfies the
requirements of clauses (iv) and (v) thereof but which is not otherwise a
Permitted Acquisition.
"Other Acquisition Maximum Consideration" means $10,000,000.00.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" means an acquisition by Xxxxxx or any Subsidiary by
merger, consolidation or by purchase of a voting majority of the stock of
another Person or the purchase of all or substantially all of the assets of
another Person (or of a division or other operating component of another Person)
(an "Acquisition") if all of the following conditions are met:
(i) The Acquisition is identified as a "Permitted Acquisition" by Xxxxxx in
writing to the Agent;
(ii) The Person to be acquired is domiciled in, and generates the majority
of its revenues from sources within, the United States or Canada;
(iii) The majority of such Person's revenue is derived from one or more of
the following lines of business: (a) distribution of embroidery equipment, (b)
the production or distribution of embroidery related software, (c) distribution
of embroidery supplies, (d) embroidery design, and/or (e) embroidery equipment
servicing;
(iv) The Agent and the Banks shall have received a certificate signed by
the chief financial officer of Xxxxxx to the effect that (and including
calculations indicating that) on a pro forma basis after giving effect to the
Acquisition: (a) all representations and warranties contained in the Loan
Documents will remain true and correct, (b) Xxxxxx and HAPL will remain in
compliance with all covenants contained in the Loan Documents, and (c) no
Default or Event of Default has occurred and is continuing or will occur as a
result of the consummation of the Acquisition; and
(v) The Agent and the Banks shall have received (i) at least two (2) years
of historical financial statements of such Person, and (ii) a set of projections
(in the case of any Acquisition with consideration therefor of at least
$1,000,000.00), setting forth in reasonable detail (with those stated
assumptions set forth below) the pro forma effect of the Acquisition and showing
compliance by Xxxxxx and HAPL with all covenants set forth in Section 5.03 of
this Agreement for the next succeeding four quarters. The projections to be
delivered hereunder shall include and specify the assumptions used to prepare
such projections regarding growth of sales, margins on sales and cost savings
resulting from the Acquisition.
"Permitted Acquisition Loans" means Revolving Credit Loans (Xxxxxx), the
proceeds of which are used to fund Permitted Acquisitions.
"Permitted Acquisition Sublimit" means Twenty Million ($20,000,000.00)
Dollars.
"Permitted Investments" means, (i) direct obligations of the United States
of America or any governmental agency thereof, or obligations guaranteed by the
United States of America, provided that such obligations mature within one year
from the date of acquisition thereof; (ii) time certificates of deposit having a
maturity of two years or less issued by any commercial bank organized and
existing under the laws of the United States or any state thereof and having
aggregate capital and surplus in excess of $1,000,000,000.00; (iii) money market
mutual funds having assets in excess of $2,500,000,000; (iv) commercial paper
rated not less than P-1 or A-1 or their equivalent by Xxxxx'x Investor Services,
Inc. or Standard & Poor's Corporation, respectively; (v) foreign exchange
contracts with the Banks; (vi) treasury stock of the Borrower, (vii) tax exempt
securities rated Prime 2 or better by Xxxxx'x Investor Services, Inc. or A-1 or
better by Standard & Poor's Corporation or (viii) Inter Company Transactions
permitted by Section 5.02(r) or Section 5.02(s).
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity or a federal, state or
local government, or a political subdivision thereof or any agency of such
government or subdivision.
"Plan" means any employee benefit plan established, maintained, or to which
contributions have been made by the Borrower or any ERISA Affiliate.
"Prime Rate" means the prime commercial lending rate of the Agent as
publicly announced to be in effect from time to time, each change in the Prime
Rate to be effective on the date such change is announced to be effective.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended from time
to time.
"Quick Asset Ratio" means, as to Xxxxxx and its Consolidated Affiliates, as
of any date, the ratio of (i) the sum of (a) cash on hand or on deposit in
banks, (b) readily marketable securities issued by the United States, (c)
readily marketable commercial paper rated "A-2" or better by Standard and Poors
Corporation (or having a similar rating by any similar organization which rates
commercial paper), (d) certificates of deposit or banker's acceptances issued by
commercial banks of recognized standing operating in the United States, and (e)
accounts receivable to (ii) Consolidated Current Liabilities.
"Regulation D" means Regulation D of the Board of Governors, as the same
may be amended and in effect from time to time.
"Regulation G" means Regulation G of the Board of Governors, as the same
may be amended and in effect from time to time.
"Regulation T" means Regulation T of the Board of Governors, as the same
may be amended and in effect from time to time.
"Regulation U" means Regulation U of the Board of Governors, as the same
may be amended and in effect from time to time.
"Regulation X" means Regulation X of the Board of Governors, as the same
may be amended and in effect from time to time.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA.
"Required Banks" means, (i) at any time while there are Revolving Credit
Loans outstanding, those Banks having, in the aggregate, sixty six and two
thirds (66 2/3%) percent of such Revolving Credit Loans, (ii) at any time while
there are no Revolving Credit Loans outstanding but the Total Commitment is
available, those Banks having, in the aggregate, sixty six and two thirds (66
2/3%) percent of the Total Commitment, and, (iii) after the Maturity Date, those
Banks having, in the aggregate, sixty six and two-thirds (66 2/3%) percent of
the outstanding principal amount of the Term Loans.
"Revolving Credit Loan" or "Revolving Credit Loans" means one or more, as
the context requires, of Revolving Credit Loans (HAPL) or Revolving Credit Loans
(Xxxxxx).
"Revolving Credit Loan (HAPL)" or "Revolving Credit Loans (HAPL)" means one
or more, as the context requires, of the revolving credit loans made by the
Banks to HAPL pursuant to the terms and conditions of this Agreement. "Revolving
Credit Loan (Xxxxxx)" or "Revolving Credit Loans (Xxxxxx)" means one or more, as
the context requires, of the revolving credit loans made by the Banks to Xxxxxx
pursuant to the terms and conditions of this Agreement.
"Revolving Credit Note (HAPL)" or "Revolving Credit Notes (HAPL)" means one
or more, as the context requires, of the promissory notes of HAPL payable to the
order of each of the Banks, in substantially the form of Exhibit B annexed
hereto, evidencing the indebtedness of HAPL to each such Bank resulting from
Revolving Credit Loans (HAPL) made by such Bank to HAPL pursuant to this
Agreement.
"Revolving Credit Note (Xxxxxx)" or "Revolving Credit Notes (Xxxxxx)" means
one or more, as the context requires, of the promissory notes of Xxxxxx payable
to the order of each of the Banks, in substantially the form of Exhibit A
annexed hereto, evidencing the indebtedness of Xxxxxx to each such Bank
resulting from Revolving Credit Loans made by such Bank to Xxxxxx pursuant to
this Agreement.
"Sedeco Tajima Agreement" means that certain distribution agreement dated
as of February 21, 1991 among Sedeco, Tajima Industries Ltd., Nomura Trading
Co., Inc. and Nomura (America) Corp., as same has been amended from time to
time.
"Subsidiary" means, as to any Person, any corporation, partnership, limited
liability company, joint venture or other Person whether now existing or
hereafter organized or acquired: (i) in the case of a corporation, of which a
majority of the securities having ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) are at the time owned by such Person and/or one or
more Subsidiaries of such Person or (ii) in the case of a partnership, limited
liability company, joint venture or similar entity, of which a majority of the
partnership, membership or other ownership interests are at the time owned by
such Person and/or one or more of its Subsidiaries.
"Tajima Agreement" means that certain distribution agreement dated as of
February 21, 1991 among Xxxxxx, Tajima Industries Ltd., Nomura Trading Co., Ltd.
and Nomura (America) Corp., as same has been amended from time to time.
"Term Loan" or "Term Loans" means one or more, as the context requires, of
the term loans made by the Banks to Xxxxxx pursuant to the terms and conditions
of this Agreement.
"Term Loan Installment Date" shall mean (i) the day that is ninety (90)
days after the making of the Term Loans and (ii) the same day of each third
month thereafter.
"Term Loan Maturity Date" means September 26, 2003.
"Term Loan Note" or "Term Loan Notes" means one or more, as the context
requires, of the promissory notes of Xxxxxx payable to the order of each of the
Banks, in substantially the form of Exhibit C annexed hereto, evidencing the
indebtedness of Xxxxxx to each such Bank resulting from the Term Loan made by
such Bank to Xxxxxx pursuant to this Agreement.
"Total Commitment" means the aggregate of the Commitments of each of the
Banks, which, on the date of this Agreement, is Seventy Million ($70,000,000.00)
Dollars.
"Total Commitment (HAPL)" means the aggregate of the Commitments of the
Banks to make Revolving Credit Loans (HAPL), which, on the date of this
Agreement, is Ten Million ($10,000,000.00) Dollars.
"Total Commitment (Xxxxxx)" means the aggregate of the Commitments of the
Banks to make Revolving Credit Loans (Xxxxxx) and to make the Term Loans to
Xxxxxx and to participate in Letters of Credit issued on behalf of Xxxxxx,
which, on the date of this Agreement, is Sixty Million ($60,000,000.00) Dollars.
"Unused Facility Fee" means the fee payable pursuant to Section 2.06 or
Section 2.25 of this Agreement.
"Working Capital Sublimit" means $30,000,000.00.
SECTION 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
SECTION 1.03. Accounting Terms. Except as otherwise herein specifically
provided, each accounting term used herein shall have the meaning given to it
under GAAP.
- 1 -
ARTICLE II
AMOUNT AND TERMS OF THE LOANS
SECTION 2.01. The Revolving Credit Loans (Xxxxxx). (a) The Banks agree,
severally but not jointly, on the terms and subject to the conditions of this
Agreement, and in reliance upon the representations and warranties of the
Borrowers and the Guarantors set forth in this Agreement that the Banks will,
until the Maturity Date, lend to Xxxxxx such Revolving Credit Loans (Xxxxxx) as
Xxxxxx may request from time to time, which Loans may be borrowed, repaid and
reborrowed, provided, however, that (v) the Aggregate Xxxxxx Outstandings at any
one time shall not exceed the Total Commitment (Xxxxxx) as it may be reduced
pursuant to Section 2.07 hereof, (w) each Bank's pro rata share of Revolving
Credit Loans (Xxxxxx) and L/C Exposure shall not exceed its pro rata share of
the Total Commitment (Xxxxxx), (x) Revolving Credit Loans (Xxxxxx) shall not
exceed the Working Capital Sublimit, (y) the aggregate principal amount of
Permitted Acquisition Loans made during the term of this Agreement shall not
exceed the Permitted Acquisition Sublimit and (z) if all or any part of a
Permitted Acquisition Loan is repaid, such amount may not be reborrowed as a
Permitted Acquisition Loan.
(b) Each Revolving Credit Loan (Xxxxxx) shall be an Alternate Base Rate
Loan or a Eurodollar Loan (or a combination thereof) as Xxxxxx may request
subject to and in accordance with Section 2.02. Any Bank may at its option make
any Eurodollar Loan by causing a foreign branch or affiliate to make such Loan,
provided that any exercise of such option shall not affect the obligation of
Xxxxxx to repay such Loan in accordance with the terms of such Bank's Revolving
Credit Note. Subject to the other provisions of this Agreement, Revolving Credit
Loans (Xxxxxx) of more than one type may be outstanding at the same time
provided, however, that not more than six (6) Eurodollar Loans may be
outstanding at the same time.
SECTION 2.02. Notice of Revolving Credit Loans.
(a) Xxxxxx shall give the Agent irrevocable written, telex, telephonic
(immediately confirmed in writing) or facsimile notice (i) at least two (2)
Business Days prior to each Revolving Credit Loan (Xxxxxx) comprised in whole or
in part of one or more Eurodollar Loans (subject to availability) and (ii) prior
to 11:00 a.m. on the day of each Revolving Credit Loan (Xxxxxx) consisting
solely of an Alternate Base Rate Loan. Upon receipt of such notice, the Agent
shall promptly notify each Bank of the contents thereof and of the amount, type
and other relevant information regarding the Loan requested. Thereupon, each
Bank shall, not later than 2:00 p.m. (New York time), transfer immediately
available funds equal to such Bank's share of the requested borrowing to the
Agent, which, provided the conditions of Section 3.01 and 3.02 of this Agreement
have been met, shall thereupon transfer immediately available funds equal to the
requested borrowing to Xxxxxx'x account with the Agent. If a notice of borrowing
is received by the Agent after 11:00 a.m. on a Business Day, such notice shall
be deemed to have been given on the next succeeding Business Day. Any Bank's
failure to make any requested Loan shall not relieve any other Bank of its
obligation to make such Loan, but such other Bank shall not be liable for such
failure of the first Bank.
(b) Each notice given pursuant to this Section 2.02 shall specify the date
of such borrowing, the amount thereof and whether such Loan is to be (or what
portion or portions thereof are to be) an Alternate Base Rate Loan or a
Eurodollar Loan and, if such Loan or any portion thereof is to consist of one or
more Eurodollar Loans, the principal amounts thereof and Interest Period or
Interest Periods with respect thereto. If no election as to a type of Loan is
specified in such notice, such Loan (or portion thereof as to which no election
is specified) shall be an Alternate Base Rate Loan. If no election as to the
Interest Period is specified in such notice with respect to any Eurodollar Loan,
Xxxxxx shall be deemed to have selected an Interest Period of one month's
duration and if a Eurodollar Loan is requested when such Loans are not
available, Xxxxxx shall be deemed to have requested an Alternate Base Rate Loan.
(c) Xxxxxx shall have the right, on such notice to the Agent as is required
pursuant to (a) above, (x) to continue any Eurodollar Loan or a portion thereof
into a subsequent Interest Period (subject to availability) and (y) to convert
an Alternate Base Rate Loan into a Eurodollar Loan (subject to availability)
subject to the following:
(i) if a Default or an Event of Default shall have occurred and be
continuing at the time of any proposed conversion or continuation only Alternate
Base Rate Loans shall be available;
(ii) in the case of a continuation or conversion of fewer than all Loans,
the aggregate principal amount of each Eurodollar Loan continued or into which a
Loan is converted shall be in the minimum principal amount of $250,000.00 and in
minimum increased multiples of $100,000.00;
(iii) each continuation or conversion shall be effected by each Bank
applying the proceeds of the new Loan to the Loan (or portion thereof) being
continued or converted;
(iv) if the new Loan made as a result of a continuation or conversion shall
be a Eurodollar Loan, the first Interest Period with respect thereto shall
commence on the date of continuation or conversion;
(v) each request for a Eurodollar Loan which shall fail to state an
applicable Interest Period shall be deemed to be a request for an Interest
Period of one month's duration and each request for a Eurodollar Loan made when
such Loans are not available shall be deemed to be a request for an Alternate
Base Rate Loan;
(vi) in the event that Xxxxxx shall not give notice to continue a
Eurodollar Loan as provided above, such Loan shall automatically be converted
into an Alternate Base Rate Loan at the expiration of the then current Interest
Period.
(d) Unless the Agent shall have received notice from a Bank prior to 2:00
p.m. (New York time) on the requested date, that such Bank will not make
available to the Agent the Loan requested to be made on such date, the Agent may
assume that such Bank has made such Loan available to the Agent on such date in
accordance with Section 2.01(a) and the Agent in its sole discretion may, in
reliance upon such assumption, make available to Xxxxxx on such date a
corresponding amount on behalf of such Bank. If and to the extent such Bank
shall not have so made available to the Agent the Loan requested to be made on
such date and the Agent shall have so made available to Xxxxxx a corresponding
amount on behalf of such Bank, such Bank shall, on demand, pay to the Agent such
corresponding amount together with interest thereon, at the Federal Funds
Effective Rate, for each day from the date such amount shall have been so made
available by the Agent to Xxxxxx until the date such amount shall have been
repaid to the Agent. If such Bank does not pay such corresponding amount
promptly upon the Agent's demand therefor, the Agent shall promptly notify
Xxxxxx and Xxxxxx shall, not later than one (1) Business Day following such
notice, repay such corresponding amount to the Agent together with accrued
interest thereon at the applicable rate or rates provided in Section 2.04.
SECTION 2.03. Revolving Credit Notes (Xxxxxx). (a) Each Revolving Credit
Loan (Xxxxxx) shall be (i) in the case of each Alternate Base Rate Loan in the
minimum principal amount of $100,000.00, and in minimum increased multiples of
$100,000.00 and (ii) in the case of each Eurodollar Loan in the minimum
principal amount of $250,000.00 and in minimum increased multiples of
$100,000.00 (except that, if any such Alternate Base Rate Loan so requested
shall exhaust the remaining available Total Commitment (Xxxxxx) or the Working
Capital Sublimit, such Alternate Base Rate Loan may be in an amount equal to the
amount of the remaining available Total Commitment (Xxxxxx), or the Working
Capital Sublimit, as applicable). Each Revolving Credit Loan (Xxxxxx) shall be
evidenced by the Revolving Credit Notes (Xxxxxx). Each Revolving Credit Note
(Xxxxxx) shall be dated the date hereof and be in the principal amount set forth
next to the applicable Bank's name on Schedule 1.01 annexed hereto, and shall
mature on the Maturity Date, at which time the entire outstanding principal
balance and all interest thereon shall be due and payable. Each Revolving Credit
Note (Xxxxxx) shall be entitled to the benefits and subject to the provisions of
this Agreement.
(b) At the time of the making of each Revolving Credit Loan (Xxxxxx) and at
the time of each payment of principal thereon, each Bank is hereby authorized by
Xxxxxx to make a notation on the schedule annexed to its Revolving Credit Note
(Xxxxxx) of the date and amount, and the type and Interest Period, if
applicable, of the Revolving Credit Loan (Xxxxxx) or payment, as the case may
be. Failure to make a notation with respect to any Revolving Credit Loan
(Xxxxxx) shall not limit or otherwise affect the obligation of Xxxxxx hereunder
or under the applicable Revolving Credit Note (Xxxxxx) with respect to such
Revolving Credit Loan (Xxxxxx), and any payment of principal by Xxxxxx shall not
be affected by the failure to make a notation thereof on said schedule.
SECTION 2.04. Payment of Interest on the Revolving Credit Notes (Xxxxxx).
(a) In the case of an Alternate Base Rate Loan, interest shall be payable
at a rate per annum equal to the Alternate Base Rate plus the ABR Applicable
Margin. Such interest shall be payable on each Interest Payment Date, commencing
with the first Interest Payment Date after the date of such Alternate Base Rate
Loan and on the Maturity Date. Any change in the rate of interest on the
Revolving Credit Notes (Xxxxxx) due to a change in the Alternate Base Rate or a
change in the ABR Applicable Margin shall take effect as of the date of such
change in the Alternate Base Rate or ABR Applicable Margin, as applicable.
(b) In the case of a Eurodollar Loan, interest shall be payable at a rate
per annum equal to the Adjusted LIBOR Rate plus the LIBOR Applicable Margin.
Such interest shall be payable on each Interest Payment Date, commencing with
the first Interest Payment Date after the date of such Eurodollar Loan and on
the Maturity Date. In the event Eurodollar Loans are available, the Agent shall
determine the rate of interest applicable to each requested Eurodollar Loan for
each Interest Period at 11:00 a.m., New York City time, or as soon as
practicable thereafter, two (2) Business Days prior to the commencement of such
Interest Period and shall use its best efforts to notify Xxxxxx and the Banks of
the rate of interest so determined. Such determination shall be conclusive
absent manifest error.
(c) The ABR Applicable Margin and the LIBOR Applicable Margin shall each be
determined on the basis of Xxxxxx'x Funded Debt to EBITDA Ratio, as calculated
based on the Xxxxxx'x consolidated financial statements for its most recent
fiscal quarter. The ABR Applicable Margin and the LIBOR Applicable Margin shall
be determined as follows:
(i) The initial ABR Applicable Margin shall be -0- basis points and the
initial LIBOR Applicable Margin shall be 100 basis points, and shall be
applicable until delivery of Xxxxxx'x financial statements for its fiscal year
ending January 31, 1997 pursuant to Section 5.01(b) hereof (subject to increase
in the event that Xxxxxx fails to deliver such statements as required below).
Beginning with delivery of Xxxxxx'x financial statements for the fiscal
year ending January 31, 1997, and for each fiscal quarter thereafter:
(ii) If Xxxxxx'x Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is less than 1.25 to 1.00, the ABR Applicable Margin shall be -0- basis
points and the LIBOR Applicable Margin shall be 62.5 basis points.
(iii) If Xxxxxx'x Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 1.25 to 1.00 but less than 1.85 to 1.00, the
ABR Applicable Margin shall be -0- basis points and the LIBOR Applicable Margin
shall be 87.5 basis points.
(iv) If Xxxxxx'x Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 1.85 to 1.00 but less than 2.00 to 1.00, the
ABR Applicable Margin shall be -0- basis points and the LIBOR Applicable Margin
shall be 112.5 basis points.
(v) If Xxxxxx'x Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 2.00 to 1.00, the ABR Applicable Margin
shall be -0- basis points and the LIBOR Applicable Margin shall be 137.5 basis
points.
In the event that Xxxxxx fails to deliver any financial statements or the
related certificate within five (5) days of the due date therefor set forth in
Section 5.01(b)(i), (ii) or (iv) hereof, unless an Event of Default is declared
as a result of such failure, the ABR Applicable Margin shall be -0- basis points
and the LIBOR Applicable Margin shall be 137.5 basis points until Xxxxxx
delivers all required financial statements and certificates at which time the
ABR Applicable Margin and the LIBOR Applicable Margin shall be redetermined as
provided for in this Section 2.04.
Upon the occurrence and during the continuance of a Default or an Event of
Default the ABR Applicable Margin and the LIBOR Applicable Margin may, as a
result of changes in the Xxxxxx'x Funded Debt to EBITDA Ratio, increase but will
not decrease.
(d) All interest shall be paid to the Agent for the pro rata distribution
to the Banks.
SECTION 2.05. Use of Proceeds. (a) The proceeds of the Revolving Credit
Loans (Xxxxxx) shall be used by Xxxxxx (i) to finance working capital of Xxxxxx
and, subject to the limitations set forth in Section 5.02(r) and Section
5.02(s), to finance working capital of its Subsidiaries and (ii) subject to the
Permitted Acquisition Sublimit, to finance Permitted Acquisitions. No part of
the proceeds of any Loan may be used for any purpose that directly or indirectly
violates or is inconsistent with, the provisions of Regulations G, T, U or X.
(b) Letters of Credit shall be issued exclusively to finance trade
transactions and other commercial transactions related to the working capital
needs of Xxxxxx and its Subsidiaries.
SECTION 2.06. Fees. (a) Xxxxxx agrees to pay to the Agent, for the pro rata
distribution to the Banks, from the date of this Agreement and for so long as
the Total Commitment (Xxxxxx) remains in effect, on the first Business Day of
each calendar quarter, and on any day that the Total Commitment (Xxxxxx) is
reduced or terminated, an Unused Facility Fee computed at a rate per annum as
determined below (computed on the basis of the actual number of days elapsed
over 360 days) on the average daily unused amount of the Total Commitment
(Xxxxxx), such Unused Facility Fee being payable for the calendar quarter, or
part thereof, preceding the payment date. The Unused Facility Fee shall be
determined as follows, on the basis of Xxxxxx'x Funded Debt to EBITDA Ratio, as
calculated based on Xxxxxx'x financial statements for its most recent fiscal
quarter.
(i) The initial Unused Facility Fee shall be 0.15% per annum and shall be
applicable until delivery of Xxxxxx'x financial statements for its fiscal year
ending January 31, 1997 pursuant to Section 5.01(b) hereof (subject to increase
in the event that Xxxxxx fails to deliver such statements as required below).
Beginning with delivery of Xxxxxx'x financial statements for the fiscal
year ending January 31, 1997, and for each fiscal quarter thereafter:
(ii) If Xxxxxx'x Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is less than 1.25 to 1.00, the Unused Facility Fee shall be 0.10% per
annum.
(iii) If Xxxxxx'x Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 1.25 to 1.00 but less than 1.85 to 1.00, the
Unused Facility Fee shall be 0.15% per annum.
(iv) If Xxxxxx'x Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 1.85 to 1.00 but less than 2.00 to 1.00, the
Unused Facility Fee shall be 0.1875% per annum.
(v) If Xxxxxx'x Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 2.00 to 1.00, the Unused Facility Fee shall
be 0.20% per annum.
In the event that Xxxxxx fails to deliver any financial statements or the
related certificate within five (5) days of the due date therefor set forth in
Section 5.01(b)(i), (ii) or (iv) hereof, unless an Event of Default is declared
as a result of such failure, the Unused Facility Fee shall be 0.20% per annum
until Xxxxxx delivers all required financial statements and certificates.
Upon the occurrence and during the continuance of a Default or an Event of
Default the Unused Facility Fee may, as a result of changes in Xxxxxx'x Funded
Debt to EBITDA Ratio, increase but will not decrease.
(b) Xxxxxx agrees to pay to the Agent, for its services as Agent hereunder,
those fees, charges and expenses as Xxxxxx and the Agent may mutually agree.
SECTION 2.07. Reduction of Commitment. (a) Upon at least three (3) Business
Days' prior written notice to the Agent, Xxxxxx may irrevocably elect to have
the unused Total Commitment (Xxxxxx) terminated in whole or reduced in part
provided, however, that any such partial reduction shall be in a minimum amount
of $1,000,000.00, or whole multiples thereof. The Total Commitment, once
terminated or reduced, shall not be reinstated without the express written
approval of the Agent and the Banks. Any reduction to the Total Commitment
(Xxxxxx) shall be applied pro rata to the respective Commitments of each Bank.
(b) In the event that Xxxxxx, Tajima Industries Ltd., or any other party to
the Tajima Agreement gives notice that it intends to terminate the Tajima
Agreement, the Total Commitment (Xxxxxx) shall automatically, and without notice
from the Agent or the Banks, terminate and the Aggregate Xxxxxx Outstandings
shall be paid or provided for as provided in Section 2.08 of this Agreement.
(c) In the event that (i) any party to the Sedeco Tajima Agreement gives
notice that it intends to terminate the Sedeco Tajima Agreement, and (ii) that
at the time of such notice sales of equipment made under the Sedeco Tajima
Agreement represent five (5%) percent or more of total consolidated equipment
sales of Xxxxxx then, upon notice from the Agent (i) the Permitted Acquisition
Sublimit shall be reduced by such percentage (rounded upwards, if necessary, to
the nearest multiple of $50,000.00), and (ii) the Total Commitment (Xxxxxx)
shall be reduced by such percentage (rounded upwards, if necessary, to the
nearest multiple of $50,000.00) (and the Commitments of each Bank shall be
reduced pro-rata). Any Aggregate Xxxxxx Outstandings required to be repaid as a
result of such termination shall be paid or provided for as provided in Section
2.08(f) of this Agreement.
SECTION 2.08. Prepayment. (a) Xxxxxx shall have the right at any time and
from time to time to prepay any Alternate Base Rate Loan, in whole or in part,
without premium or penalty on one (1) Business Day's prior irrevocable written
notice to the Agent provided, however, that each such prepayment shall be on a
Business Day and shall be in an aggregate principal amount which is in the
minimum amount of $100,000.00 and in increased integral multiples of
$100,000.00.
(b) Xxxxxx shall have the right at any time and from time to time, subject
to the provisions of this Agreement, including but without limitation Section
2.30, to prepay any Eurodollar Loan, in whole or in part, on three (3) Business
Days' prior irrevocable written notice to the Agent, provided, however, that
each such prepayment shall be on a Business Day and shall be in an aggregate
principal amount which is in the minimum amount of $250,000.00 and in increased
integral multiples of $100,000.00
(c) The notice of prepayment under this Section 2.08 shall set forth the
prepayment date and the principal amount of the Loan being prepaid and shall be
irrevocable and shall commit Xxxxxx to prepay such Loan by the amount and on the
date stated therein. All prepayments shall be accompanied by accrued interest on
the principal amount being prepaid to the date of prepayment. Each prepayment
under this Section 2.08 shall be applied first towards unpaid interest on the
amount being prepaid and then towards the principal in whole or partial
prepayment of Loans as specified by Xxxxxx. In the absence of such
specification, amounts being prepaid shall be applied first to any Alternate
Base Rate Loan then outstanding and then to Eurodollar Loans in the order of the
nearest expiration of their Interest Periods.
(d) At any time that the Aggregate Xxxxxx Outstandings exceed the Total
Commitment (Xxxxxx), Xxxxxx shall first, prepay so much of the Revolving Credit
Loans (Xxxxxx) as shall exceed the Total Commitment (Xxxxxx) and second, if
Aggregate Xxxxxx Outstandings still exceed the Total Commitment (Xxxxxx),
deposit with the Agent for the benefit of the Issuing Bank cash collateral for
any undrawn and outstanding Letters of Credit in an amount equal to the amount
by which the remaining Aggregate Xxxxxx Outstandings exceed the Total Commitment
(Xxxxxx). Any such prepayments shall be applied as set forth in (c) above and if
such prepayments of Revolving Credit Loans (Xxxxxx) shall result in a prepayment
of a Eurodollar Loan other than on the last day of its Interest Period, such
prepayment shall be subject to the reimbursement required by Section 2.30.
(e) In the event that Xxxxxx, Tajima Industries Ltd. or any other party to
the Tajima Agreement gives notice that it intends to terminate the Tajima
Agreement, the Total Commitment shall terminate and the then outstanding
principal balance of Revolving Credit Loans (Xxxxxx) (including Permitted
Acquisition Loans) shall be repaid in equal quarterly installments, each due on
the first day of each calendar quarter, beginning with the first such day after
said notice of termination. Such outstanding balance shall be payable over the
shorter of (i) twelve (12) quarterly installments or (ii) the number of full
calendar quarters between the date of notice of termination and the Maturity
Date. The payments required by this sub-section (e) shall be applied as set
forth, and subject to the other provisions of, this Section 2.08.
(f) In the event that any party to the Sedeco Tajima Agreement gives notice
that it intends to terminate the Sedeco Tajima Agreement, the difference between
(i) the outstanding principal balance of Revolving Credit Loans (Xxxxxx)
(including Permitted Acquisition Loans) and (ii) the amount of the Total
Commitment (Xxxxxx), as reduced as a result of the termination of the Sedeco
Tajima Agreement, shall be repaid in equal quarterly installments, each due on
the first day of each calendar quarter, beginning with the first such day after
said notice of termination. Such outstanding balance shall be payable over the
shorter of (i) twelve (12) quarterly installments or (ii) the number of full
calendar quarters between the date of notice of termination and the Maturity
Date. The payments required by this sub-section (f) shall be applied as set
forth, and subject to the other provisions of, this Section 2.08.
SECTION 2.09. The Term Loans. The Banks hereby agree, severally but not
jointly, on the second anniversary of the date of this Agreement and on the
Maturity Date, and on the terms and conditions and in reliance upon the
representations and warranties of Xxxxxx and the Guarantors hereinafter set
forth in this Agreement, and provided no Default or Event of Default has
occurred and is continuing, or would result from the making of the Term Loan, to
convert the then outstanding principal balance of Permitted Acquisition Loans to
a Term Loan and Xxxxxx agrees to convert such amounts by executing and
delivering to the Agent, for delivery to the Banks, the Term Loan Notes. Any
Permitted Acquisition Loans then outstanding shall be converted to Term Loan on
the second anniversary of the date of this Agreement and any Permitted
Acquisition Loans then outstanding shall be converted into a Term Loan on the
Maturity Date. The Term Loans, or portions thereof, shall be Alternate Base Rate
Loans or Eurodollar Loans (or a combination thereof) as Xxxxxx may request
subject to and in accordance with Section 2.10 hereof. Any Bank may at its
option make any Eurodollar Loan by causing a foreign branch or affiliate to make
such Loan, provided that any exercise of such option shall not affect the
obligation of Xxxxxx to repay such Loan in accordance with the terms of the
Notes. SECTION 2.10. Notice of Term Loan Designations. (a) Xxxxxx may elect to
designate the Term Loan (or a portion thereof) as an Alternate Base Rate Loan or
a Eurodollar Loan by so specifying in the irrevocable notice given pursuant to
this Section 2.10; provided, however, that each Eurodollar Loan requested of the
Agent for any specific Interest Period shall be in the minimum principal amount
of $250,000.00 and in minimum integral multiples of $100,000.00 thereafter.
(b) Xxxxxx shall give the Agent irrevocable written, telex, telephonic
(immediately confirmed in writing) or facsimile notice (i) at least two (2)
Business Days' prior to each election to designate each Term Loan (or a portion
thereof) as a Eurodollar Loan, and (ii) prior to 11:00 a.m. on the day of each
election to designate each Term Loan (or a portion thereof) as an Alternate Base
Rate Loan, in each case specifying the date (which shall be a Business Day)
thereof and the aggregate principal amount and, if any portion thereof is to
consist of one or more Eurodollar Loans, the respective principal amounts and
Interest Periods for each such Eurodollar Loan; provided that:
(i) if Xxxxxx shall fail to specify the duration of an Interest Period with
regard to any Eurodollar Loan in its notice, the Interest Period shall be for a
period of one month; and
(ii) if Xxxxxx shall fail to specify the type of Loan requested, the
request shall be deemed to be a request for an Alternate Base Rate Loan.
(c) Upon receipt of such notice, the Agent shall promptly notify each Bank
of the contents thereof and of the amount, type and other relevant information
regarding the Loan requested.
SECTION 2.11. Term Loan Notes. The Term Loans shall be evidenced by the
Term Loan Notes. The Term Loan Notes shall be dated as of the date any Revolving
Credit Loan (Xxxxxx) is converted into a Term Loan and each of the Term Loan
Notes shall mature on the Term Loan Maturity Date at which time the entire
outstanding principal balance and all interest thereon shall be due and payable.
The Term Loan Notes shall be entitled to the benefits and subject to the
provisions of this Agreement.
SECTION 2.12. Repayment of Term Loan Notes. (a) The principal balance of
each of the Term Loan Notes shall be payable in equal quarterly installments,
each due on a Term Loan Installment Date, beginning on the first such day after
the date the Term Loan is made and continuing on each Term Loan Installment Date
thereafter. The Term Loans shall be repaid in such number of installments as
equal the number of calendar quarters occurring between the date of such Term
Loan and the Term Loan Maturity Date. Each of such quarterly principal
installments shall be in an amount equal to (i) one sixteenth (1/16th), in the
case of Term Loans made or the second anniversary of the date of this Agreement
and (ii) one twelfth (1/12th), in the case of Term Loans made on the Maturity
Date, of the principal amount of the Permitted Acquisition Loans so converted to
the Term Loan and the final such quarterly principal installment shall be in an
amount equal to the then aggregate outstanding principal balance of the Term
Loan Notes.
(b) All payments of installments on the Term Loan Notes shall be made to
the Agent for the pro rata distributions to the Banks.
SECTION 2.13. Payment of Interest on the Term Loan Notes. (a) In the case
of an Alternate Base Rate Loan, interest shall be payable at a rate per annum
equal to the Alternate Base Rate plus the ABR Applicable Margin. Such interest
shall be payable to the Agent, for the pro rata distribution to the Banks, on
each Interest Payment Date, commencing with the first Interest Payment Date
after the date of such Alternate Base Rate Loan, on each Interest Determination
Date and on the Term Loan Maturity Date. Any change in the rate of interest on
the Term Loan Notes due to a change in the Alternate Base Rate or a change in
the ABR Applicable Margin shall take effect as of the date of such change in the
Alternate Base Rate or the ABR Applicable Margin.
(b) In the case of a Eurodollar Loan, interest shall be payable at a rate
per annum (computed on the basis of the actual number of days elapsed over a
year of 360 days) equal to the Adjusted LIBOR Rate plus the LIBOR Applicable
Margin. Such interest shall be payable to the Agent, for the pro rata
distribution to the Banks on each Interest Payment Date, commencing with the
first Interest Payment Date after the date of such Eurodollar Loan, on each
Interest Determination Date and on the Term Loan Maturity Date. The Agent shall
determine the rate of interest applicable to each requested Eurodollar Loan for
each Interest Period at 11:00 a.m., New York City time, or as soon as
practicable thereafter, two (2) Business Days prior to the commencement of such
Interest Period and shall notify Xxxxxx of the rate of interest so determined.
Such determination shall be conclusive absent manifest error.
(c) The ABR Applicable Margin and the LIBOR Applicable Margin shall each be
determined on the basis of Hirsch's Funded Debt to EBITDA Ratio, as calculated
based on Hirsch's financial statements for its most recent fiscal quarter. The
ABR Applicable Margin and the LIBOR Applicable Margin shall be determined as set
forth in Section 2.04(c) of this Agreement.
SECTION 2.14. Conversion and Continuation of Loans. Xxxxxx shall have the
right, at any time, on such notice to the Agent as set forth in Section 2.10(b)
of this Agreement, (i) to continue any Eurodollar Loan or portion thereof into a
subsequent Interest Period (subject to availability) or (ii) to convert an
Alternate Base Rate Loan into a Eurodollar Loan (subject to availability),
subject to the following:
(a) no Default or Event of Default shall have occurred and be continuing at
the time of any proposed conversion or continuation;
(b) in the case of a continuation or conversion of fewer than all Loans,
the aggregate principal amount of each Eurodollar Loan continued or converted
shall be in the minimum amount of $250,000.00 and in increased integral
multiples of $100,000.00;
(c) each continuation or conversion shall be effected by each Bank applying
the proceeds of the new Loan to the Loan (or portion thereof) being continued or
converted;
(d) if the new Loan made as a result of a continuation or conversion shall
be a Eurodollar Loan, the first Interest Period with respect thereto shall
commence on the date of continuation or conversion;
(e) each request for a Eurodollar Loan which shall fail to state an
applicable Interest Period shall be deemed to be a request for an Interest
Period of one month;
(f) unless sufficient Alternate Base Rate Loans are outstanding or other
Eurodollar Loans are outstanding with Interest Periods expiring prior to the
next scheduled installment payment of the Term Loan Notes, and are sufficient to
enable Xxxxxx to make such installment payments, any Eurodollar Loan, a portion
of which is required to be repaid on any such installment payment date shall be
automatically converted at the end of such Interest Period into an Alternate
Base Rate Loan; and
(g) in the event that Xxxxxx shall not give notice to continue a Eurodollar
Loan as provided above, such Loan shall automatically be converted into an
Alternate Base Rate Loan at the expiration of the then current Interest Period.
SECTION 2.15. Use of Proceeds. The proceeds of the Term Loans shall be used
by Xxxxxx exclusively to refinance the Permitted Acquisition Loans. No part of
the proceeds of any Term Loan may be used for any purpose that directly or
indirectly violates or is inconsistent with, the provisions of Regulation G, T,
U or X.
SECTION 2.16. Prepayment. (a) Xxxxxx shall have the right at any time and
from time to time to prepay any Alternate Base Rate Loan, in whole or in part,
without premium or penalty on one (1) Business Day's prior irrevocable written
notice to the Agent provided, however, that each such prepayment shall be on a
Business Day and shall be in an aggregate minimum principal amount of
$250,000.00 and in increased integral multiples of $100,000.00. (b) Xxxxxx shall
have the right at any time and from time to time, subject to the provisions
hereof and of Section 2.30, to prepay any Eurodollar Loan, in whole or in part,
on three (3) Business Days prior irrevocable written notice to the Agent,
provided, however, that such prepayment shall be in an aggregate minimum
principal amount of $250,000.00 and in increased integral multiples of
$100,000.00.
(c) The notice of prepayment under this Section 2.16 shall set forth the
prepayment date and the principal amount of the Loan being prepaid and shall be
irrevocable and shall commit Xxxxxx to prepay such Loan by the amount and on the
date stated therein. All prepayments shall be accompanied by accrued interest on
the principal amount being prepaid to the date of prepayment. Each prepayment
under this Section 2.16 shall be applied first towards unpaid interest on the
amount being prepaid and then towards the principal in whole or partial
prepayment of Loans by Xxxxxx. All prepayments shall be applied first to any
Alternate Base Rate Loans then outstanding and then to Eurodollar Loans
outstanding in the order of the nearest expiration of their Interest Periods.
All partial prepayments of the Term Loans shall be applied to installments of
principal of the Term Loans in the inverse order of maturity. All principal
payments or prepayments shall be made to the Agent for the pro rata distribution
to the Banks.
SECTION 2.17. The Revolving Credit Loans (HAPL). The Banks hereby agree,
severally but not jointly, on the date of this Agreement, and on the terms and
conditions and in reliance upon the representations and warranties of the
Borrowers and the Guarantors set forth in this Agreement, to lend to HAPL prior
to the Maturity Date, such amounts as HAPL may request from time to time
(individually, a "Revolving Credit Loan (HAPL)" or collectively, the "Revolving
Credit Loans (HAPL)"), which amounts may be borrowed, repaid and reborrowed,
provided, however, that the aggregate amount of such Revolving Credit Loans
(HAPL) outstanding at any one time shall not exceed the lesser of (i) Ten
Million ($10,000,000.00) Dollars, or such lesser amount of the Total Commitment
(HAPL) as may be reduced pursuant to Section 2.24 hereof or (ii) the Borrowing
Base. HAPL agrees to borrow such amounts from the Banks by executing and
delivering to the Agent, for delivery to the Banks, the BNY Revolving Credit
Note (HAPL), the Fleet Revolving Credit Note (HAPL) and the Mellon Revolving
Credit Note (HAPL). The Loans, or portions thereof, shall be Alternate Base Rate
Loans or Eurodollar Loans (or a combination thereof) as HAPL may request subject
to and in accordance with Section 2.18 hereof. Each Bank may at its option make
any Eurodollar Loan by causing a foreign branch or affiliate to make such Loan,
provided that any exercise of such option shall not affect the obligation of
HAPL to repay such Loan in accordance with the terms of the Notes. Subject to
the other provisions of this Agreement, Revolving Credit Loans (HAPL) of more
than one type may be outstanding at the same time provided, however, that not
more than six (6) Eurodollar Loans may be outstanding at the same time.
SECTION 2.18. Notice of Revolving Credit Loan (HAPL) Designations. (a) HAPL
may elect to designate each Revolving Credit Loan (HAPL) (or a portion thereof)
as an Alternate Base Rate Loan or a Eurodollar Loan by so specifying in the
irrevocable notice given pursuant to this Section 2.18; provided, however, that
each Eurodollar Loan requested of the Agent for any specific Interest Period
shall be in the minimum principal amount of $250,000.00 and in increased
integral multiples of $100,000.00, and each Alternate Base Rate Loan shall be in
a minimum principal amount of $100,000.00 and increased integral multiples of
$100,000.00.
(b) HAPL shall give the Agent irrevocable written, telex, telephonic
(immediately confirmed in writing) or facsimile notice (i) at least two (2)
Business Days' prior to each election to designate a Revolving Credit Loan
(HAPL) (or a portion thereof) as a Eurodollar Loan, and (ii) prior to 11:00 a.m.
on the day of such Loan of each election to designate a Revolving Credit Loan
(HAPL) (or a portion thereof) as an Alternate Base Rate Loan, in each case
specifying the date (which shall be a Business Day) thereof and the aggregate
principal amount and, if any portion thereof is to consist of one or more
Eurodollar Loans, the respective principal amounts and Interest Periods for each
such Eurodollar Loan; provided that:
(i) if HAPL shall fail to specify the duration of an Interest Period with
regard to any Eurodollar Loan in its notice, the Interest Period shall be for a
period of one month; and
(ii) if HAPL shall fail to specify the type of Loan requested, the request
shall be deemed to be a request for an Alternate Base Rate Loan.
(c) Upon receipt of such notice, the Agent shall promptly notify each Bank
of the contents thereof and of the amount, type and other relevant information
regarding the Loan requested. Thereupon, each Bank shall, not later than 2:00
p.m. (New York time), transfer immediately available funds equal to such Bank's
share of the requested borrowing to the Agent, who, provided the conditions of
Section 3.05 and 3.06 of this Agreement have been met, shall thereupon transfer
immediately available funds equal to the requested borrowing to HAPL's account
with the Agent. If a notice of borrowing is received by the Agent after 11:00
a.m. on a Business Day, such notice shall be deemed to have been given on the
next succeeding Business Day. Any Bank's failure to make any requested Loan
shall not relieve any other Bank of its obligation to make such Loan, but such
other Bank shall not be liable for such failure of the first Bank.
(d) Unless the Agent shall have received notice from a Bank prior to 2:00
p.m. (New York time) on the requested date, that such Bank will not make
available to the Agent the Loan requested to be made on such date, the Agent may
assume that such Bank has made such Loan available to the Agent on such date in
accordance with Section 2.17 and the Agent in its sole discretion may, in
reliance upon such assumption, make available to HAPL on such date a
corresponding amount on behalf of such Bank. If and to the extent such Bank
shall not have so made available to the Agent the Loan requested to be made on
such date and the Agent shall have so made available to HAPL a corresponding
amount on behalf of such Bank, such Bank shall, on demand, pay to the Agent such
corresponding amount together with interest thereon, at the Federal Funds
Effective Rate, for each day from the date such amount shall have been so made
available by the Agent to HAPL until the date such amount shall have been repaid
to the Agent. If such Bank does not pay such corresponding amount promptly upon
the Agent's demand therefor, the Agent shall promptly notify HAPL and HAPL shall
immediately repay such corresponding amount to the Agent together with accrued
interest thereon at the applicable rate or rates provided in Section 2.19.
SECTION 2.19. Revolving Credit Notes (HAPL). Each Revolving Credit Loan
(HAPL) shall be evidenced by the Revolving Credit Notes (HAPL) of HAPL. Each
Revolving Credit Note (HAPL) shall be dated the date hereof and be in the
principal amount set forth next to the applicable Bank's name on Schedule 1.01
annexed hereto. Each such Note shall mature on the Maturity Date, at which time
the entire outstanding principal balance and all interest thereon shall be due
and payable and the Total Commitment (HAPL) shall terminate. The Revolving
Credit Notes (HAPL) shall be entitled to the benefits and subject to the
provisions of this Agreement.
At the time of the making of each Revolving Credit Loan (HAPL) and at the
time of each payment of principal thereon, the holder of each Revolving Credit
Note (HAPL) is hereby authorized by HAPL to make a notation on the schedule
annexed to such Revolving Credit Note (HAPL) of the date and amount of the
Revolving Credit Loan (HAPL) or payment as the case may be. Failure to make a
notation with respect to any Revolving Credit Loan (HAPL) shall not limit or
otherwise affect the obligation of HAPL hereunder or under the Revolving Credit
Notes (HAPL) with respect to such Revolving Credit Loan (HAPL), and any payment
of principal on the Revolving Credit Notes (HAPL) by HAPL shall not be affected
by the failure to make a notation thereof on said schedule.
SECTION 2.20. Interest.(a) In the case of an Alternate Base Rate Loan,
interest shall be payable at a rate per annum equal to the Alternate Base Rate
plus the ABR Applicable Margin. Such interest shall be payable to the Agent, for
the pro rata distribution to the Banks, on each Interest Payment Date,
commencing with the first Interest Payment Date after the date of such Alternate
Base Rate Loan, on each Interest Determination Date and on the Maturity Date.
Any change in the rate of interest on the Revolving Credit Notes (HAPL) due to a
change in the Alternate Base Rate shall take effect as of the date of such
change in the Alternate Base Rate.
(b) In the case of a Eurodollar Loan, interest shall be payable at a rate
per annum (computed on the basis of the actual number of days elapsed over a
year of 360 days) equal to the Adjusted LIBOR Rate plus the LIBOR Applicable
Margin. Such interest shall be payable to the Agent, for the pro rata
distribution to the Banks on each Interest Payment Date, commencing with the
first Interest Payment Date after the date of such Eurodollar Loan, on each
Interest Determination Date and on the Maturity Date. The Agent shall determine
the rate of interest applicable to each requested Eurodollar Loan for each
Interest Period at 11:00 a.m., New York City time, or as soon as practicable
thereafter, two (2) Business Days prior to the commencement of such Interest
Period and shall notify HAPL of the rate of interest so determined. Such
determination shall be conclusive absent manifest error.
(c) The ABR Applicable Margin and the LIBOR Applicable Margin shall be
determined on the basis of Hirsch's Funded Debt to EBITDA Ratio, as calculated
based on Hirsch's consolidated financial statements for its most recent fiscal
quarter. ABR Applicable Margin and the LIBOR Applicable Margin shall be
determined in accordance with the provisions of Section 2.04(c) of this
Agreement.
In the event that Xxxxxx fails to deliver any financial statements or the
related certificate within five (5) days of the due date therefor set forth in
Section 5.01(b)(i), (ii) or (iv) hereof, unless an Event of Default is declared
as a result of such failure, the ABR Applicable Margin shall be -0- basis points
and the LIBOR Applicable Margin shall be 137.5 basis points until Xxxxxx
delivers all required financial statements and certificates.
Upon the occurrence and during the continuance of a Default or an Event of
Default, the ABR Applicable Margin and the LIBOR Applicable Margin may, as a
result of changes in Hirsch's Funded Debt to EBITDA Ratio, increase but will not
decrease.
SECTION 2.21. Conversion and Continuation of Loans. HAPL shall have the
right, at any time, on such notice to the Agent as is required by Section 2.18,
(i) to continue any Eurodollar Loan or portion thereof into a subsequent
Interest Period (subject to availability) or (ii) to convert an Alternate Base
Rate Loan into a Eurodollar Loan (subject to availability), subject to the
following:
(a) no Default or Event of Default shall have occurred and be continuing at
the time of any proposed conversion or continuation;
(b) in the case of a continuation or conversion of fewer than all Loans,
the aggregate principal amount of each Eurodollar Loan continued or converted
shall be in the minimum amount of $250,000.00 and in increased integral
multiples of $100,000.00;
(c) each continuation or conversion shall be effected by the Bank applying
the proceeds of the new Loan to the Loan (or portion thereof) being continued or
converted;
(d) if the new Loan made as a result of a continuation or conversion shall
be a Eurodollar Loan, the first Interest Period with respect thereto shall
commence on the date of continuation or conversion;
(e) each request for a Eurodollar Loan which shall fail to state an
applicable Interest Period shall be deemed to be a request for an Interest
Period of one month;
(f) in the event that HAPL shall not give notice to continue a Eurodollar
Loan as provided above, such Loan shall automatically be converted into an
Alternate Base Rate Loan at the expiration of the then current Interest Period.
SECTION 2.22. Payment of Revolving Credit Notes (HAPL).
(a) Optional: (i) HAPL shall have the right, at any time and from time to
time, to prepay any Alternate Base Rate Loan, in whole or in part, without
premium or penalty, upon one (1) Business Day's written notice to the Agent
provided that such prepayments shall be on a Business Day and shall be in an
aggregate principal amount which is in the minimum amount of $100,000.00 and in
increased integral multiples of $100,000.00.
(ii) HAPL shall have the right at any time and from time to time, subject
to the provisions of this Agreement, including but without limitation Section
2.30, to prepay any Eurodollar Loan, in whole or in part, on three (3) Business
Days prior irrevocable written notice to the Agent, provided, however, that such
prepayment shall be on a Business Day and shall be in an aggregate principal
amount of $250,000.00 and in increased integral multiples of $100,000.00.
(iii) The notice of prepayment under this Section 2.22 shall set forth the
prepayment date and the principal amount of the Loan being prepaid and shall be
irrevocable and shall commit HAPL to prepay such Loan by the amount and on the
date stated therein. All prepayments shall be accompanied by accrued interest on
the principal amount being prepaid to the date of prepayment. Each prepayment
under this Section 2.22 shall be applied first towards unpaid interest on the
amount being prepaid and then towards the principal in whole or partial
prepayment of Loans as specified by HAPL. In the absence of such specification,
amounts being prepaid shall be applied first to any Alternate Base Rate Loan
then outstanding and then to Eurodollar Loans in the order of the nearest
expiration of their Interest Periods.
(b) Mandatory: Payments or prepayments on the Revolving Credit Notes (HAPL)
shall be made in such manner and at such time that (i) on the Maturity Date
shall have satisfied all of its obligations to the Banks under the Revolving
Credit Notes (HAPL); and (ii) if at any time the principal amount outstanding
under the Revolving Credit Notes (HAPL) exceeds the Borrowing Base as reflected
in the most recent Borrowing Base Certificate, a prepayment shall be made to the
Agent, for the pro rata distribution to the Banks, without further demand by the
Agent or the Banks, in an amount equal to such excess; and (iii) if any time
HAPL sells or transfers any Eligible Lease Assets, and after deducting 85% of
the book value of such Eligible Lease Assets from the Borrowing Base, the
principal amount of the Revolving Credit Notes (HAPL) exceeds the Borrowing
Base, as adjusted for the value of the Eligible Lease Assets sold, a prepayment
shall be made to the Agent for the pro rata distribution to the Banks, without
further demand by the Agent or the Bank in an amount necessary to bring the
Borrower into compliance with Section 2.17; and (iv) if HAPL reduces the Total
Commitment (HAPL) pursuant to Section 2.24 hereof, a prepayment shall be made to
the Agent for the pro rata distribution to the Banks in an amount equal to the
difference between (x) the outstanding principal balance of the Notes on the
date of such reduction in the Total Commitment (HAPL) and (y) the reduced Total
Commitment (HAPL).
In the event that Xxxxxx, Tajima Industries, Ltd. or any other party to the
Tajima Agreement gives notice that it intends to terminate the Tajima Agreement,
the then outstanding principal balance of the Revolving Credit Loans (HAPL)
shall be repaid in equal quarterly installments, each due on the first day of
each calendar quarter, beginning with the first such day after said notice of
termination. Such outstanding balance shall be payable over the shorter of (i)
twelve (12) quarterly installments or (ii) the number of full calendar quarters
between the date of notice of termination and the Maturity Date. The payments
required by this sub-section (e) shall be applied as set forth, and subject to
the other provisions of, this Section 2.22.
In the event that any party to the Sedeco Tajima Agreement gives notice
that it intends to terminate the Sedeco Tajima Agreement, the difference between
(i) the outstanding principal balance of Revolving Credit Loans (HAPL), and (ii)
the amount of the Total Commitment (HAPL), as reduced as a result of the
termination of the Sedeco Tajima Agreement, shall be repaid in equal quarterly
installments, each due on the first day of each calendar quarter, beginning with
the first such day after said notice of termination. Such outstanding balance
shall be payable over the shorter of (i) twelve (12) quarterly installments or
(ii) the number of full calendar quarters between the date of notice of
termination and the Maturity Date. The payments required by this paragraph shall
be applied as set forth, and subject to the other provisions of, this Section
2.22.
All payments or prepayments on the Revolving Credit Notes (HAPL) shall be
made to the Agent for the pro rata distribution to the Banks, in immediately
available funds.
SECTION 2.23. Use of Proceeds. The proceeds of the Revolving Credit Loans
(HAPL) shall be used by HAPL to purchase embroidery equipment and related
software and accessories from Xxxxxx and/or the Guarantors to be leased by HAPL
in transactions that qualify such leases as Eligible Lease Assets, provided that
no part of the proceeds of any Revolving Credit Loan (HAPL) may be used for any
purpose that directly or indirectly violates or is inconsistent with, the
provisions of Regulation U or Regulation X.
SECTION 2.24. Reduction of Commitment. (a) Upon at least three (3) Business
Days' prior written notice to the Agent, HAPL may irrevocably elect to have the
unused Total Commitment (HAPL) terminated in whole or be reduced in part,
provided, however, that any such partial reduction shall be in an amount of not
less than $500,000.00, and in increased integral multiples of $100,000.00. The
Total Commitment (HAPL), once terminated or reduced, shall not be reinstated
without the express written approval of the Agent and the Banks.
(b) In the event that Xxxxxx, Tajima Industries, Ltd., or any other party
to the Tajima Agreement gives notice that it intends to terminate the Tajima
Agreement, the Total Commitment (HAPL) shall automatically, and without notice
from the Agent or the Banks, terminate and the principal amount of outstanding
Revolving Credit Loans (HAPL) shall be paid or provided for as provided in
Section 2.22 of this Agreement.
(c) In the event that (i) any party to the Sedeco Tajima Agreement gives
notice that it intends to terminate the Sedeco Tajima Agreement, and (ii) that
at the time of such notice sales of equipment made under the Sedeco Tajima
Agreement represent five (5%) percent or more of total consolidated equipment
sales of Xxxxxx then, upon notice from the Agent, the Total Commitment (HAPL)
shall be reduced by such percentage (rounded upwards, if necessary, to the
nearest multiple of $50,000.00) (and the Commitments of each Bank shall be
reduced pro-rata). Any sums required to be repaid as a result of such
termination shall be paid or provided for as provided in Section 2.22 of this
Agreement.
SECTION 2.25. Unused Commitment Fee. HAPL agrees to pay to Agent for the
pro rata distribution to the Banks from the date of this Agreement and for so
long as the Total Commitment (HAPL) remains outstanding, on the first Business
Day of each calendar quarter an Unused Commitment Fee computed at the rates set
forth below (on the basis of a year of three hundred sixty (360) days for actual
days) on the average daily unused amount of the Total Commitment (HAPL), such
Unused Commitment Fee being payable for the calendar quarter, or part thereof,
preceding the payment date.
(i) The initial Unused Commitment Fee shall be .10% per annum, and shall be
applicable until delivery of the Hirsch's financial statements for its fiscal
quarter ending July 31, 1997 pursuant to Section 5.01(b) hereof (subject to
increase in the event that the Borrower fails to deliver such statements as
required below).
(ii) Beginning with delivery of the Borrower's financial statements for the
fiscal quarter ending July 31, 1997, and for each fiscal quarter thereafter:
(w) If Hirsch's Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is less than 1.25 to 1.00, the Unused Commitment Fee shall be 0.10% per
annum.
(x) If Hirsch's Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 1.25 to 1.00 but less than 1.85 to 1.00, the
Unused Commitment Fee shall be 0.15% per annum.
(y) If Hirsch's Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 1.85 to 1.00 but less than 2.00 to 1.0, the
Unused Commitment Fee shall be 0.1875% per annum.
(z) If Hirsch's Funded Debt to EBITDA Ratio as of the end of such fiscal
quarter is equal to or greater than 2.00 to 1.0, the Unused Commitment Fee shall
be 0.20% per annum.
In the event that Xxxxxx fails to deliver any financial statements or the
related certificate within five (5) days of the due date therefor set forth in
Section 5.01(b)(i), (ii) or (iv) hereof, unless an Event of Default is declared
as a result of such failure, the Unused Commitment Fee shall be 0.20% per annum
until Xxxxxx delivers all required financial statements and certificates.
SECTION 2.26. Eurocurrency Reserve Requirement. It is understood that the
cost to the Banks of making or maintaining Eurodollar Loans may fluctuate as a
result of the applicability of, or change in, the Eurocurrency Reserve
Requirement. The Borrowers agree to pay to the Agent on behalf of the Banks from
time to time, as provided in Section 2.27 below, such amounts as shall be
necessary to compensate each Bank for the portion of the cost of making or
maintaining any Eurodollar Loans made by it resulting from any change in the
Eurocurrency Reserve Requirement, it being understood that the rates of interest
applicable to Eurodollar Loans hereunder have been determined on the basis of
the Eurocurrency Reserve Requirement in effect at the time of determination of
the Adjusted LIBOR Rate and that such rates do not reflect costs imposed on each
Bank in connection with any change to the Eurocurrency Reserve Requirement. It
is agreed that for purposes of this paragraph the Eurodollar Loans made
hereunder shall be deemed to constitute Eurocurrency Liabilities as defined in
Regulation D and to be subject to the reserve requirements of Regulation D
without benefit or credit of proration, exemptions or offsets which might
otherwise be available to each Bank from time to time under Regulation D.
SECTION 2.27. Increased Costs. If, after the date of this Agreement, the
adoption of, or any change in, any applicable law, regulation, rule or
directive, or any interpretation thereof by any authority charged with the
administration or interpretation thereof:
(i) subjects any Bank or the Letter of Credit Issuer to any tax with
respect to the Notes, the Letters of Credit or on any amount paid or to be paid
under or pursuant to this Agreement, the Notes or the Letters of Credit (other
than any tax measured by or based upon the overall net income of such Bank or
the Letter of Credit Issuer);
(ii) changes the basis of taxation of payments to any Bank or the Letter of
Credit Issuer of any amounts payable hereunder (other than any tax measured by
or based upon the overall net income of such Bank or the Letter of Credit
Issuer);
(iii) imposes, modifies or deems applicable any reserve, capital adequacy
or deposit requirements against any assets held by, deposits with or for the
account of, or loans made by, any Bank or the Letter of Credit Issuer; or
(iv) imposes on the Agent, any Bank or the Letter of Credit Issuer, any
other condition affecting the Notes, the Letters of Credit or this Agreement;
and the result of any of the foregoing is to increase the cost to the Agent, a
Bank or the Letter of Credit Issuer of maintaining this Agreement, making the
Loans or issuing the Letters of Credit, or to reduce the amount of any payment
(whether of principal, interest or otherwise) receivable by the Agent, any Bank
or the Letter of Credit Issuer or to require the Agent, any Bank or the Letter
of Credit Issuer to make any payment on or calculated by reference to the gross
amount of any sum received by them, in each case by an amount which the Agent in
its sole, reasonable judgment deems material, then and in any such case:
(a) the Agent shall promptly advise the affected Borrower of such event,
together with the date thereof, the amount of such increased cost or reduction
or payment and the way in which such amount has been calculated; and
(b) such Borrower shall pay to the Agent on behalf of itself, such Bank or
the Letter of Credit Issuer, within ten (10) days after the advice referred to
in subsection (a) hereinabove, such an amount or amounts as will compensate the
Agent, the Bank or the Letter of Credit Issuer for such additional cost,
reduction or payment for so long as the same shall remain in effect.
The determination of the Agent as to additional amounts payable pursuant to
this Section 2.27 shall be conclusive evidence of such amounts absent manifest
error and if made in good faith.
SECTION 2.28. Capital Adequacy. If the Agent, any Bank or the Letter of
Credit Issuer shall have reasonably determined that, subsequent to the date
hereof, any change in the applicability of any law, rule, regulation or
guideline, or the adoption after the date hereof of any other law, rule,
regulation or guideline regarding capital adequacy, or any change in any of the
foregoing or in the interpretation or administration of any of the foregoing by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Bank or the
Letter of Credit Issuer (or any lending office of such Bank or the Letter of
Credit Issuer) or such Bank's or the Letter of Credit Issuer's holding company
with any request or directive regarding capital adequacy (whether or not having
the force of law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Bank's or the
Letter of Credit Issuer's capital or on the capital of such Bank's or the Letter
of Credit Issuer's holding company, if any, as a consequence of its obligations
hereunder to a level below that which such Bank or the Letter of Credit Issuer
or such Bank's or the Letter of Credit Issuer's holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Bank's or the Letter of Credit Issuer's policies and the policies of such
Bank's or the Letter of Credit Issuer's holding company with respect to capital
adequacy) by an amount deemed by such Bank or the Letter of Credit Issuer to be
material, then from time to time the Borrowers shall pay to the Agent on behalf
of such Bank or the Letter of Credit Issuer such additional amount or amounts as
will reasonably compensate such Bank or the Letter of Credit Issuer or its or
their holding company or companies for any such reduction suffered.
SECTION 2.29. Change in Legality. (a) Notwithstanding anything to the
contrary contained elsewhere in this Agreement, if any change after the date
hereof in law, rule, regulation, guideline or order, or in the interpretation
thereof by any governmental authority charged with the administration thereof,
shall make it unlawful for any of the Banks to make or maintain any Eurodollar
Loan or to give effect to its obligations as contemplated hereby with respect to
a Eurodollar Loan, then, by written notice to the Borrowers, the Agent, on
behalf of such Bank may:
(i) declare that Eurodollar Loans will not thereafter be made by such Bank
hereunder, whereupon the Borrowers shall be prohibited from requesting such
Eurodollar Loans from such Bank hereunder unless such declaration is
subsequently withdrawn; and
(ii) require that, subject to the provisions of Section 2.30, all
outstanding Eurodollar Loans made by it be converted to an Alternate Base Rate
Loan, whereupon all of such Eurodollar Loans shall be automatically converted to
an Alternate Base Rate Loan as of the effective date of such notice as provided
in paragraph (b) below.
(b) For purposes of this Section 2.29, a notice to the Borrowers by the
Agent pursuant to paragraph (a) above shall be effective, for the purposes of
paragraph (a) above, if lawful, and if any Eurodollar Loans shall then be
outstanding, on the last day of the then current Interest Period; otherwise,
such notice shall be effective on the date of receipt by the Borrower.
SECTION 2.30. Funding Losses. (a) The Borrowers agree to compensate each
Bank for any loss or expense which such Bank may sustain or incur as a
consequence of (a) default by a Borrower in payment when due of the principal
amount of or interest on any Eurodollar Loan, (b) default by a Borrower in
making a borrowing of, conversion into or continuation of Eurodollar Loans after
a Borrower has given a notice requesting the same in accordance with the
provisions of this Agreement, (c) default by a Borrower in making any prepayment
after a Borrower has given a notice thereof in accordance with the provisions of
this Agreement or (d) the making of a prepayment of Eurodollar Loans on a day
which is not the last day of an Interest Period with respect thereto, including,
without limitation, in each case, any such loss (including, without limitation,
loss of margin) or expense arising from the reemployment of funds obtained by it
or from amounts payable by such Bank to lenders of funds obtained by it in order
to make or maintain such Loans. Such compensation may include an amount equal to
the excess, if any, of (i) the amount of interest which would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein, including, the LIBOR Applicable Margin included
therein, if any, over (ii) the amount of interest (as reasonably determined by
such Bank) which would have accrued to such Bank on such amount by placing such
amount on deposit for a comparable period with leading banks in the interbank
eurodollar market. This covenant shall survive the termination of this Agreement
and the payment of the Loans and all other amounts payable hereunder. When
claiming under this Section 2.30, the claiming Bank shall provide to the
affected Borrower a statement, signed by an officer of such Bank, explaining the
amount of any such loss or expense (including the calculation of such amount),
which statement shall, in the absence of manifest error, be conclusive with
respect to the parties hereto.
SECTION 2.31. Change in LIBOR; Availability of Rates. In the event, and on
each occasion, that, on the day the interest rate for any Eurodollar Loan is to
be determined, the Agent shall have determined (which determination, absent
manifest error, shall be conclusive and binding upon the Borrowers) that dollar
deposits in the amount of the principal amount of the requested Eurodollar Loan
are not generally available in the London interbank market, or that the rate at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to the Banks of making or maintaining the principal amount of
such Eurodollar Loan during such Interest Period, such Eurodollar Loan shall be
unavailable. The Agent shall, as soon as practicable thereafter, given written,
telex or telephonic notice of such determination of unavailability to the
Borrowers. Any request by a Borrower for an unavailable Eurodollar Loan shall be
deemed to have been a request for an Alternate Base Rate Loan. After such notice
shall have been given and until the Agent shall have notified the Borrowers that
the circumstances giving rise to such unavailability no longer exist, each
subsequent request for an unavailable Eurodollar Loan shall be deemed to be a
request for an Alternate Base Rate Loan.
SECTION 2.32. Authorization to Debit Borrower's Account. The Agent is
hereby authorized to debit each Borrower's account maintained with the Agent for
(i) all scheduled payments due from such Borrower of principal and/or interest
and/or commissions or fees under the Notes and the Letters of Credit, (ii) the
Agent's fees, and (iii) all other amounts due hereunder; all such debits to be
made on the days such payments are due in accordance with the terms hereof.
SECTION 2.33. Late Charges, Default Interest. (a) If a Borrower shall
default in the payment of any principal installment of or interest on any Loan,
or any amount due under any Letter of Credit, or any other amount becoming due
hereunder, a Borrower shall pay to the Agent for the pro rata distribution to
the Banks or the Issuing Bank, as applicable, interest, to the extent permitted
by law, on such defaulted amount up to the date of actual payment (after as well
as before judgment) at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) equal to two (2%) percent in
excess of the interest rate otherwise in effect with respect to the type of Loan
or Letter of Credit reimbursement in connection with which the required payments
have not been made.
(b) Upon the occurrence and during the continuation of an Event of Default,
the Borrowers shall pay to the Agent, for the pro rata distribution to the
Banks, interest on the Aggregate Xxxxxx Outstandings, on all Term Loans and on
all Revolving Credit Loans (HAPL)(after as well as before judgment) at a rate
per annum (computed on the basis of the actual number of days elapsed over a
year of 360 days) equal to two (2%) percent in excess of the interest rate
otherwise in effect hereunder.
SECTION 2.34. Payments. All payments by the Borrowers hereunder, under the
Notes or under the Letters of Credit shall be made in U.S. dollars in
immediately available funds at the office of the Agent by 12:00 noon, New York
City time on the date on which such payment shall be due.
SECTION 2.35. Interest Adjustments. (a) If the provisions of this
Agreement, the Notes or the L/C Documents would at any time otherwise require
payment by a Borrower to any Bank or the Issuing Bank of any amount of interest
in excess of the maximum amount then permitted by applicable law the interest
payments shall be reduced to the extent necessary so that such Bank or the
Issuing Bank shall not receive interest in excess of such maximum amount. To the
extent that, pursuant to the foregoing sentence, the Agent shall receive
interest payments on behalf of the Banks or the Issuing Bank hereunder, under
the Notes or under the L/C Documents in an amount less than the amount otherwise
provided, such deficit (hereinafter called the "Interest Deficit") will cumulate
and will be carried forward (without interest) until the termination of this
Agreement. Interest otherwise payable by an affected Borrower to any Bank or the
Issuing Bank hereunder, under the Notes or under the L/C Documents for any
subsequent period shall be increased by such maximum amount of the Interest
Deficit that may be so added without causing such Bank or the Issuing Bank to
receive interest in excess of the maximum amount then permitted by applicable
law.
(b) The amount of the Interest Deficit shall be treated as a prepayment
penalty and paid in full at the time of any optional prepayment by Xxxxxx of all
or any part of the Term Loans. The amount of the Interest Deficit at the time of
any complete payment of the Term Loans at that time outstanding (other than an
optional prepayment thereof) shall be cancelled and not paid.
- 2 -
ARTICLE IIA
THE LETTERS OF CREDIT
SECTION 2A.01. Letters of Credit. (a) On the terms and conditions set forth
herein, (i) the Issuing Bank agrees, from time to time on any Business Day
during the period from the date of this Agreement to the day which is five (5)
days prior to the Maturity Date to issue Letters of Credit for the account of
Xxxxxx and (ii) the Banks severally agree to participate in Letters of Credit
issued for the account of Xxxxxx. Within the foregoing limits, and subject to
the other terms and conditions hereof, Hirsch's ability to obtain Letters of
Credit shall be fully revolving, and, accordingly, Xxxxxx may, during the
foregoing period, obtain Letters of Credit to replace Letters of Credit which
have expired or which have been drawn upon and reimbursed.
(b) The Issuing Bank has no obligation to issue any Letter of Credit if:
(i) any order, judgment or decree of any governmental authority or
arbitrator purports by its terms to enjoin or restrain the Issuing Bank from
issuing such Letter of Credit or any requirement of law applicable to the
Issuing Bank or any request or directive (whether or not having the force of
law) from any governmental authority with jurisdiction over the Issuing Bank
prohibits, or requests that the Issuing Bank refrain from, the issuance of
commercial or standby letters of credit generally or such Letter of Credit in
particular or imposes upon such Issuing Bank with respect to such Letter of
Credit any restriction, reserve or capital requirement (for which such Issuing
Bank is not otherwise compensated hereunder) not in effect on the date of this
Agreement, or imposes upon the Issuing Bank any unreimbursed loss, cost or
expense which was not applicable on the date of this Agreement and which the
Issuing Bank in good xxxxx xxxxx material to it;
(ii) the Issuing Bank has received written notice from any Bank, the Agent
or Xxxxxx, on or prior to the Business Day prior to the requested date of
issuance of such Letter of Credit, that one or more of the applicable conditions
contained in Article III is not then satisfied;
(iii) the expiry date of any requested Letter of Credit is (x) more than
one (1) year from its date of issuance or (y) later than five (5) Business Days
prior to the Maturity Date;
(iv) the Aggregate Xxxxxx Outstandings, after giving effect to the
requested Letter of Credit shall exceed $60,000,000.00;
(v) the aggregate L/C Exposure, after giving effect to the requested Letter
of Credit, under all standby Letters of Credit shall exceed $10,000,000.00; or
(vi) any requested Letter of Credit is not in form and substance acceptable
to the Issuing Bank, or the issuance of a Letter of Credit violates any
applicable policies of the Issuing Bank.
SECTION 2A.02. Issuance of Letters of Credit. Each Letter of Credit shall
be issued upon the request of Xxxxxx (which request shall be irrevocable),
received by the Issuing Bank in accordance with arrangements between the Issuing
Bank and Xxxxxx to provide the Issuing Bank electronically with the information
necessary to issue, amend or renew Letters of Credit. The arrangements between
Xxxxxx and the Issuing Bank are set forth in the L/C Documents (other than the
Letters of Credit) between the Issuing Bank and Xxxxxx. To the extent any term
in any such L/C Documents (other than a Letter of Credit) conflicts with or is
inconsistent with the terms of this Agreement, the term most favorable to the
Issuing Bank shall apply, and an Issuing Bank may exercise its rights under
either such L/C Document or this Agreement vis-a-vis Xxxxxx, but subject in any
event to the provisions herein with respect to sharing and notification. If any
such inconsistency exists, the Agent and the Banks shall not be deemed to have
waived any rights hereunder, nor shall the Issuing Bank be deemed to have waived
any rights under such L/C Document, by reason of such inconsistency.
SECTION 2A.03. Participations of Banks. (a) Immediately upon the issuance
of each Letter of Credit, each Bank shall be deemed to, and hereby irrevocably
unconditionally agrees to, purchase from the Issuing Bank a participation in
such Letter of Credit, each drawing thereunder in any amount and each draft
accepted or deferred payment obligation incurred in any amount under such Letter
of Credit equal in each case to the product of (i) the pro rata share (expressed
as a percentage) of each Bank, represented by the percentage that each Bank's
Commitment bears to the Total Commitment, times (ii) the maximum amount
available to be drawn under such Letter of Credit and the amount of such
drawing, accepted draft or deferred payment obligation, respectively. Each
issuance of a Letter of Credit shall be deemed to utilize the Commitment of each
Bank by an amount equal to the amount of such participation.
(b) The Issuing Bank will promptly notify Xxxxxx of any drawing under a
Letter of Credit. Xxxxxx shall reimburse the Issuing Bank on each date that any
amount is paid by the Issuing Bank under any Letter of Credit (each such date,
an "Honor Date") at such time(s) as are agreed upon by Xxxxxx and the Issuing
Bank, in an amount equal to the amount so paid by the Issuing Bank. If Xxxxxx
fails to reimburse the Issuing Bank for the full amount of any drawing under any
Letter of Credit at such agreed upon time on the Honor Date, such Issuing Bank
will promptly notify the Agent and the Agent will promptly notify each Bank
thereof. The Honor Date shall, in every case, be (i) not later than seventy (70)
days beyond the date when the beneficiary of the Letter of Credit makes
presentment of the required documents under the Letter of Credit or (ii) not
later than five (5) Business Days prior to the Maturity Date.
(c) Upon receipt of any notice from the Agent of any failure by Xxxxxx to
reimburse the Issuing Bank, each Bank shall make available to the Agent for the
account of the Issuing Bank its pro rata share of the amount of such
reimbursement. If, after receipt of such notice, any Bank fails to transfer its
pro rata share of the amount of such reimbursement to the Agent, interest shall
accrue on such Bank's obligation to make such payment from the Honor Date to the
date such Bank makes such payment, at a rate per annum equal to the Federal
Funds Effective Rate in effect from time to time during such period. Any failure
of the Agent to give notice to the Banks on an Honor Date or in sufficient time
to enable any Bank to effect such payment on such date shall not relieve such
Bank from its obligations under this subsection (c).
(d) Each Bank's payment to the Issuing Bank pursuant to Section 2A.03(c)
shall be deemed payment in respect of and in satisfaction of its participation
in such Letter of Credit.
(e) Each Bank's obligation to make payment in respect of its participation
in Letters of Credit, shall be absolute and unconditional and without recourse
to the Issuing Bank and shall not be affected by any circumstance, including (i)
any setoff, counterclaim, recoupment, defense or other right which such Bank may
have against the Issuing Bank, Xxxxxx or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default or any Event of
Default; or (iii) any other circumstance, happening or event whatsoever, whether
or not similar to any of the foregoing.
SECTION 2A.04. Repayment of Participations. (a) Upon receipt by the Issuing
Bank of (i) reimbursement from Xxxxxx for any payment made by the Issuing Bank
under a Letter of Credit with respect to which any Bank has paid for its
participation in such Letter of Credit or (ii) payment of interest thereon, the
Issuing Bank will pay such amounts to the Agent in the same funds as those
received by the Issuing Bank. The Agent shall promptly distribute to each Bank
its pro rata share thereof.
(b) If the Agent or any Issuing Bank is required at any time to return to
Xxxxxx, or to a trustee, receiver, liquidator, custodian, or any official in any
insolvency proceeding, any portion of the payments made by Xxxxxx to the Agent
or to the Issuing Bank pursuant to Section 2A.04(a) in reimbursement of a
payment made under a Letter of Credit or interest thereon or fees relating
thereto or as a result of a setoff, each Bank shall, on demand of the Agent or
the Issuing Bank, as the case may be, forthwith return to the Agent or the
Issuing Bank, as the case may be, the amount of its pro rata share of any
amounts so returned by the Agent or the Issuing Bank plus interest thereon from
the date such demand is made to the date such amounts are returned by such Bank
to the Agent or the Issuing Bank, at a rate per annum equal to the Federal Funds
Effective Rate in effect from time to time.
(c) If any event described in subsection (b) above occurs, the obligation
of Xxxxxx in respect of the payment or setoff required to be returned shall be
revived and continued in full force and effect as if such payment had not been
make or such setoff had not been effected.
SECTION 2A.05 Role of the Issuing Bank. (a) The Issuing Bank shall not have
any responsibility to obtain any document in connection with paying any draw
under a Letter of Credit (other than any required sight or time draft,
certificate and other documents expressly required by the Letter of Credit) or
to ascertain or inquire as to the validity or accuracy of any such document or
the authority of the Person executing or delivering any such document.
(b) Neither the Issuing Bank nor any of its correspondents or assignees
shall be liable to any Bank for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Banks (including the
Required Banks, as applicable); (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any L/C Document.
(c) Xxxxxx hereby assumes all risks of the acts or omissions of any
beneficiary or transferee with respect to its use of any Letter of Credit;
provided, however, that this assumption is not intended to, and shall not,
preclude Hirsch's pursuing such rights and remedies as it may have against the
beneficiary or transferee at law or under any other agreement. Neither the
Agent, nor any of its officers, directors or employees, nor any of the
respective correspondents, participants or assignees of the Issuing Bank, shall
be liable or responsible for any of the matters described in clauses (i) through
(vii) of Section 2A.06; provided, however, that Xxxxxx may have a claim against
the Issuing Bank, and the Issuing Bank may be liable to Xxxxxx, to the extent of
any direct, as opposed to consequential or exemplary, damages suffered by Xxxxxx
which Xxxxxx proves were caused by the Issuing Bank's willful misconduct or
gross negligence or the Issuing Bank's willful failure to pay under any Letter
of Credit after the presentation to it by the beneficiary of a required sight or
time draft and certificate(s) strictly complying with the terms and conditions
of a Letter of Credit. In furtherance and not in limitation of the foregoing:
(i) the Issuing Bank may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary; and (ii) the Issuing Bank shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reasons.
SECTION 2A.06. Obligations Absolute. The obligations of Xxxxxx under this
Agreement and any L/C Documents to reimburse the Issuing Bank for a drawing
under a Letter of Credit shall be unconditional and irrevocable, and shall be
paid strictly in accordance with the terms of this Agreement and the L/C
Documents under all circumstances, including the following:
(i) any lack of validity or enforceability of this Agreement or any L/C
Document;
(ii) any change in the time, manner or place of payment of, or in any other
term of, all or any of the obligations of Xxxxxx in respect of any Letter of
Credit or any other amendment or waiver of or any consent to departure from all
or any of the L/C Documents;
(iii) the existence of any claim, setoff, defense or other right that
Xxxxxx may have at any time against any beneficiary or any transferee of any
Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other Person, whether in
connection with this Agreement, the transactions contemplated hereby or by the
L/C Documents or any unrelated transaction;
(iv) any draft, demand, certificate or other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any document required
in order to make a drawing under any Letter of Credit;
(v) any payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or certificate that does not strictly comply with the
terms of any Letter of Credit; or any payment made by the Issuing Bank under any
Letter of Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors, liquidator,
receiver or other representative of or successor to any beneficiary or any
transferee of any Letter of Credit, including any arising in connection with any
insolvency proceeding; (vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to departure
from any other guarantee, for all or any of the obligations of Xxxxxx in respect
of any Letter of Credit; or
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including any other circumstance that might
otherwise constitute a defense available to, or a discharge of, Xxxxxx.
SECTION 2A.07. Uniform Customs and Practices. The Uniform Customs and
Practices for Documentary Credits as published by the International Chamber of
Commerce most recently at the time of issuance of any Letter of Credit shall
(unless otherwise expressly provided in the Letters of Credit) apply to the
Letters of Credit.
SECTION 2A.08. Fees and Commissions. (a) In the case of trade Letters of
Credit payable on sight, Xxxxxx shall pay to the Agent a payment commission
equal to 0.25% of the amount drawn, payable on the date of presentment of the
required documents under the Letter of Credit.
(b) In the case of trade Letters of Credit payable at a stated time, Xxxxxx
shall pay to the Agent a per annum commission on the average amount of drafts
accepted and deferred payment obligations as outstanding from the date of
presentment of required documents under the Letter of Credit to the date of
payment, equal to (i) 0.625% during such periods when the Xxxxxx'x Funded Debt
to EBITDA Ratio (as determined from Xxxxxx'x most recent financial statements)
is less than 1.25 to 1.00, (ii) 0.750% during such periods when Xxxxxx'x Funded
Debt to EBITDA Ratio is equal to or greater than 1.25 to 1.00 but less than 2.00
to 1.00 and (iii) 1.25% when Xxxxxx'x Funded Debt to EBITDA Ratio is equal to or
greater than 2.00 to 1.00. Such commission shall be payable on the Honor Date.
(c) In the case of standby Letters of Credit, Xxxxxx shall pay to the Agent
a per annum fee equal to the LIBOR Applicable Margin, as in effect from time to
time, on the average amount issued and available to be drawn on standby Letters
of Credit (computed on the basis of a year of 360 days for actual days elapsed),
payable quarterly in arrears.
(d) In the case of all Letters of Credit, Xxxxxx shall pay to the Issuing
Bank its usual and customary letter of credit fees as established from time to
time, including without limitation, fees, commissions and charges for issuance,
payment, processing amendment and expiration.
(e) In the case of the fees and commissions set forth in (a), (b) and (c)
above, same shall be paid to the Agent for the pro rata distribution to the
Banks.
ARTICLE III
CONDITIONS OF LENDING
SECTION 3.01. Conditions Precedent to the Making of the Initial Revolving
Credit Loan (Xxxxxx) and the Issuing of the Initial Letter of Credit. The
obligation of the Banks to make the initial Revolving Credit Loans (Xxxxxx)
contemplated by this Agreement and the obligation of the Issuing Bank to issue
the initial Letter of Credit issued after the date of this Agreement
contemplated by this Agreement are each subject to the condition precedent that
the Agent, the Banks and the Issuing Bank shall have received from Xxxxxx and
the Guarantors on or before the date of this Agreement the following, each dated
such day, in form and substance satisfactory to the Agent and its counsel:
(a) A Revolving Credit Note (Xxxxxx), duly executed by Xxxxxx and payable
to the order of each of the Banks.
(b) Certified (as of the date of this Agreement) copies of the resolutions
of the Board of Directors of Xxxxxx authorizing the Revolving Credit Loans
(Xxxxxx) and the Letters of Credit and authorizing and approving this Agreement
and the other Loan Documents and the execution, delivery and performance thereof
and certified copies of all documents evidencing other necessary corporate
action and governmental approvals, if any, with respect to this Agreement and
the other Loan Documents.
(c) Certified (as of the date of this Agreement) copies of the resolutions
of the Boards of Directors and the shareholders of each of the Guarantors,
authorizing and approving this Agreement, their Guaranties and any other Loan
Document applicable to the Guarantors, and the execution, delivery and
performance thereof and certified copies of all documents evidencing other
necessary corporate action and governmental approvals, if any, with respect to
this Agreement, their Guaranties and the other Loan Documents.
(d) A certificate of the Secretary or an Assistant Secretary (attested to
by another officer) of Xxxxxx certifying: (i) the names and true signatures of
the officer or officers of Xxxxxx authorized to sign this Agreement, the
Revolving Credit Notes (Xxxxxx) and the other Loan Documents to be delivered
hereunder on behalf of Xxxxxx; and (ii) a copy of Xxxxxx'x by-laws as complete
and correct on the date of this Agreement.
(e) A Certificate of the Secretary or an Assistant Secretary (attested to
by another officer) of each of the Guarantors certifying (i) the names and true
signatures of the officer or officers of the Guarantors authorized to sign this
Agreement, their Guaranties and any other Loan Documents to be delivered
hereunder on behalf of the Guarantors; (ii) a copy of each of the Guarantors'
by-laws as complete and correct on the date of this Agreement; and (iii) the
stock ownership of each Guarantor.
(f) Copies of the certificate of incorporation and all amendments thereto
of Xxxxxx and the Guarantors certified in each case by the Secretary of State
(or equivalent officer) of the state of incorporation of each of Xxxxxx and the
Guarantors and a certificate of existence and good standing with respect to
Xxxxxx and the Guarantors from the Secretary of State (or equivalent officer) of
the state of incorporation of the Borrower and the Guarantors) and from the
Secretary of State (or equivalent officer) of any state in which Xxxxxx or the
Guarantors are authorized to do business.
(g) An opinion of (i) Ruskin, Moscou, Xxxxx & Faltischek, P.C., counsel for
the Borrower and the Guarantors as to certain matters referred to in Article IV
hereof and as to such other matters as the Agent or its counsel may reasonably
request and (ii) of Xxxxxx & Hanger, L.L.P. with respect to Sedeco and (iii) of
Xxxxxxx, Carton & Xxxxxxx with respect to SMX, in each case, concerning such
matters as the Agent or its counsel may reasonably request.
(h) From each of the Guarantors, an executed Guaranty.
(i) From Xxxxxx, copies of all of Xxxxxx'x credit agreements, loan
agreements, indentures, mortgages and other documents relating to the extension
of credit.
(j) From Xxxxxx, (x) the fees and expenses to be paid pursuant to this
Agreement, and (y) those fees, charges and expenses as Xxxxxx, the Banks and the
Agent may mutually agree.
(k) The Agent and the Banks shall, prior to the date of this Agreement,
have completed their due diligence reviews of Xxxxxx, the results of which shall
be satisfactory to the Agent and the Banks in their sole discretion.
(l) The following statements shall be true and the Agent shall have
received a certificate signed by the President or Chief Financial Officer of
Xxxxxx and each Guarantor dated the date hereof, stating that:
(i) The representations and warranties contained in Article IV of this
Agreement and in the other Loan Documents are true and correct on and as of such
date; and (ii) No Default or Event of Default has occurred and is continuing, or
would result from the making of the initial Revolving Credit Loans (Xxxxxx) or
the issuance of the initial Letter of Credit, as applicable.
(m) All legal matters incident to this Agreement and the Loan transactions
contemplated hereby shall be satisfactory to Cullen and Xxxxxx, counsel to the
Agent.
(n) Receipt by the Agent of such other approvals, opinions or documents as
the Agent or its counsel may reasonably request.
SECTION 3.02. Conditions Precedent to All Revolving Credit Loans (Xxxxxx)
and all Letters of Credit. The obligation of the Banks to make each Revolving
Credit Loan (Xxxxxx) and the obligation of the Issuing Bank to issue Letters of
Credit shall each be subject to the further condition precedent that on the date
of such Revolving Credit Loan (Xxxxxx) or Letter of Credit:
(a) The following statements shall be true and the Agent shall have
received a certificate signed by the President or the Chief Financial Officer of
Xxxxxx dated the date of such Revolving Credit Loan (Xxxxxx) or Letter of
Credit, stating that:
(i) The representations and warranties contained in Article IV of this
Agreement and in the other Loan Documents are true and correct in all material
respects on and as of such date as though made on and as such date (provided
that the representation made in Section 4.01(f) shall be deemed made as to the
then most recent fiscal year and interim period financial statements delivered
to the Agent and the Banks); and
(ii) No Default or Event of Default has occurred and is continuing, or
would result from such Revolving Credit Loan (Xxxxxx) or Letter of Credit.
(b) The Agent shall have received such other approvals, opinions or
documents as the Agent or its counsel may reasonably request.
SECTION 3.03. Conditions Precedent to the Making of Permitted Acquisition
Loans. The obligation of the Banks to make each Revolving Credit Loan (Xxxxxx)
which is a Permitted Acquisition Loan shall be subject to the further conditions
precedent that on the date of such Revolving Credit Loan (Xxxxxx):
(a) The Agent and the Banks shall have received, at least ten (10) Business
Days prior to such request, the certificate and information required under the
definition of Permitted Acquisition.
(b) The Agent and the Banks shall have received copies of all contracts,
documents and agreements relating to the Permitted Acquisition (the "Acquisition
Documents"), and evidence that except for the payment of that portion of the
purchase price to be funded by the proceeds of any Permitted Acquisition Loans,
the Permitted Acquisition has been completed in accordance with the terms of the
Acquisition Documents previously furnished and that no condition or material
obligation on the part of the acquired Person has been waived.
SECTION 3.04. Conditions Precedent to the Making of the Term Loan. The
obligation of each Bank to make its share of the Term Loan shall be subject to
the condition precedent that the Agent and the Banks shall have received on or
before the date of such Term Loan all of the documents required by Section 3.01,
3.02 and 3.03 and each of the following, in form and substance satisfactory to
the Agent and its counsel:
(a) A Term Loan Note, duly executed by Xxxxxx and payable to the order of
each of the Banks.
(b) The following statements shall be true and the Agent shall have
received a certificate signed by the President or the Chief Financial Officer of
Xxxxxx and each Guarantor dated such date, stating that:
(i) The representations and warranties contained in Article IV of this
Agreement and in the other Loan Documents are true and correct in all material
respects on and as of such date as though made on and as of such date (provided
that the representation made in Section 4.01(f) shall be deemed made as to the
then most recent fiscal year and interim period financial statements delivered
to the Agent and the Banks); and
(ii) No Default or Event of Default has occurred and is continuing, or
would result from the making of the Term Loan.
(c) Additional Documentation. The Agent shall have received such other
approvals, opinions, or documents as the Agent or its counsel may reasonably
request.
SECTION 3.05. Conditions Precedent to the Making of the Initial Revolving
Credit Loan (HAPL). The obligation of the Banks to make the initial Revolving
Credit Loan (HAPL) contemplated by this Agreement is subject to the condition
precedent that the Agent shall have received from HAPL on or before the day of
the making of the first Revolving Credit Loan (HAPL) the following, each dated
such day, in form and substance satisfactory to the Agent and its counsel:
(a) A Revolving Credit Note duly executed by HAPL and payable to the order
of each of the Banks.
(b) Certified (as of the date of this Agreement) copies of the resolutions
of the Board of Directors of HAPL authorizing the Revolving Credit Loans (HAPL)
and authorizing and approving this Agreement and the other Loan Documents and
the execution, delivery and performance thereof and certified copies of all
documents evidencing other necessary corporate action and governmental or other
approvals, if any, with respect to this Agreement and the other Loan Documents.
(c) Certified (as of the date of this Agreement) copies of the resolutions
of the Board of Directors of each of the Guarantors authorizing and approving
this Agreement, its Guaranty and any other Loan Document applicable to the
Guarantors, and the execution, delivery and performance thereof and certified
copies of all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, its Guaranty and
the other Loan Documents.
(d) A certificate of the Secretary or an Assistant Secretary (attested to
by another officer) of HAPL certifying; (i) the names and true signatures of the
officer or officers of HAPL authorized to sign this Agreement, the Revolving
Credit Notes (HAPL) and the other Loan Documents to be delivered hereunder on
behalf of HAPL; and (ii) a copy of HAPL's by-laws as complete and correct on the
date of this Agreement.
(e) A certificate of the Secretary or an Assistant Secretary (attested to
by another officer) of each of the Guarantors certifying (i) the names and true
signatures of the officer or officers of the Guarantors authorized to sign this
Agreement, their Guaranties and any other Loan Documents to be delivered
hereunder on behalf of the Guarantors; (ii) a copy of each Guarantor's by-laws
as complete and correct on the date of this Agreement; and (iii) the stock
ownership each Guarantor.
(f) Copies certified by the Secretary of State of the State of New York in
the case of HAPL, the Secretary of State of the State of Delaware in the case of
Xxxxxx and Equipment, the Ministry of Consumer and Commercial Relations of
Ontario, Canada in the case of Pulse, and the Secretary of State of the State of
Texas in the case of Sedeco, of the certificate of incorporation and all
amendments thereto of HAPL and the Guarantors and a certificate of existence and
good standing with respect to HAPL and the Guarantors from the Secretary of
State of each state listed on Schedule 4.01(b) hereto and from any other
jurisdiction in which HAPL and each Guarantor is qualified to do business.
(g) an opinion of Ruskin, Moscou, Xxxxx & Faltischek, P.C., counsel for
HAPL and an opinion of counsel for each Guarantor (other than Pulse) as to
certain matters referred to in Article IV hereof and as to such other matters as
the Agent or its counsel may reasonably request. (h) From each of the
Guarantors, an executed Guaranty.
(i) From HAPL, a Security Agreement duly executed by HAPL giving to the
Banks a first priority security interest in substantially all of the assets of
HAPL including, but not limited to, all personal property, equipment, fixtures,
inventory, accounts, chattel paper (including all Eligible Lease assets and all
other leases of commercial and industrial embroidery and related equipment) and
general intangibles all whether now owned or hereafter acquired (the
"Collateral") together with: (1) acknowledgement copies of the Financing
Statements (UCC-1) duly filed under the Uniform Commercial Code of all
jurisdictions necessary or, in the opinion of the Agent, desirable to perfect
the security interest created by the Security Agreement; and (2) certified
copies of Request for Information (Form UCC-11) identifying all of the financing
statements on file with respect to HAPL in all jurisdictions referred to under
(1), including the Financing Statements filed by the Agent on behalf of the
Banks against HAPL indicating that no party claims an interest in any of the
Collateral, other than Liens permitted by Section 5.02(a).
(j) From HAPL, copies of all the Borrower's credit agreements, loan
agreements, indentures, mortgages and other documents relating to the extension
of credit.
(k) The following statements shall be true and the Agent shall have
received certificates signed by a duly authorized officer of each of HAPL and
the Guarantors dated the date hereof, stating that to the best of the officer's
knowledge after due inquiry:
(i) The representations and warranties contained in Article IV of this
Agreement, the Guaranty and in the Security Agreement are correct on and as of
such date; and
(ii) No Default or Event of Default has occurred and is continuing, or
would result from the making of a Revolving Credit Loan (HAPL).
(l) The Bank shall have received a Borrowing Base Certificate in accordance
with the provisions of Section 5.01(m).
(m) From HAPL, (x) the fees and expenses to be paid pursuant to this
Agreement, and (y) those fees, charges and expenses as HAPL, the Banks and the
Agent may mutually agree.
(n) From HAPL, a property damage insurance policy in the amount of the
replacement value of that portion of the Collateral consisting of industrial and
commercial embroidery and related equipment held as inventory and not leased to
a lessee for such equipment, naming the Agent and the Banks as loss payee with
an insurance company acceptable to the Agent. The policy shall provide for
thirty (30) days notice to the Agent of cancellation or change.
(o) From HAPL, a copy of its current form of lease for industrial and
commercial embroidery equipment, together with all supporting documentation
thereto.
(p) From HAPL, copies of all master purchase agreements or similar
agreements entered into by HAPL in connection with the sale of its lease paper,
including, but not limited to such agreements entered into by HAPL with each
Funding Source, and all criteria for permanent Non-Recourse purchase by each
Funding Source.
(q) The Agent shall have conducted a Collateral Audit of the (i) the
Eligible Lease Assets and (ii) the books and records of the Borrower, and the
Agent shall have conducted such other due diligence as the Agent, in its
reasonable discretion, considers necessary. The results of such Collateral Audit
shall be satisfactory to the Agent in its reasonable discretion. Such Collateral
Audit may be performed by the Agent's internal staff or by the Agent's
designated representatives. The Collateral Audit shall be at the expense of
HAPL.
(r) All legal matters incident to the initial Revolving Credit Loan (HAPL)
shall be satisfactory to Cullen and Xxxxxx, counsel to the Agent.
(s) The Agent shall have entered into an Intercreditor Agreement with each
Funding Source.
(t) The Agent shall have received such other approvals, opinions, or
documents as the Agent may reasonably request.
SECTION 3.06. Conditions Precedent to all Revolving Credit Loans (HAPL).
The obligations of the Banks to make each Revolving Credit Loan (HAPL)
(including the initial Revolving Credit Loan (HAPL)) shall be subject to the
condition precedent that on the date of such Revolving Credit Loan (HAPL):
(a) The following statements shall be true and the Agent shall have
received a certificate signed by a duly authorized officer of the Borrower and
each of the Guarantors dated the date of the Revolving Credit Loan (HAPL)
stating that in all material respects, to the best of said officer's knowledge
after due inquiry:
(i) The representations and warranties contained in Article IV of this
Agreement and the other Loan Documents are correct on and as of the date of the
Revolving Credit Loan (HAPL) as though made on and as of such date; and
(ii) No Default or Event of Default has occurred and is continuing, or
would result from the making of such Revolving Credit Loan.
(b) HAPL shall have delivered to the Agent a current Borrowing Base
Certificate in form and substance satisfactory to the Agent.
(c) HAPL shall have delivered to the Agent an aging of all leases between
HAPL and all lessees in form and substance satisfactory to the Agent.
(d) The Agent shall have entered into an Intercreditor Agreement with each
Funding Source.
(e) The Total Commitment (Xxxxxx) shall be in effect.
(f) The Agent shall have received such other approvals, opinions, or
documents as the Agent or its counsel may reasonably request in accordance with
this Agreement.
- 3 -
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties. On the date of this
Agreement, on each date that either Borrower requests a Revolving Credit Loan or
Xxxxxx requests a Letter of Credit and on the date the Term Loan is made, the
Borrowers and each of the Guarantors represent and warrant as follows:
(a) Subsidiaries. On the date hereof, the only Subsidiaries of the
Borrowers or a Guarantor are those set forth on Schedule 4.01(a) annexed hereto,
which Schedule accurately sets forth with respect to each such Subsidiary, its
name and address, any other addresses at which it conducts business, its state
of incorporation and each other jurisdiction in which it is qualified to do
business and the identity and share holdings of its stockholders. Except as set
forth on Schedule 4.01(a), all of the issued and outstanding shares of each
Subsidiary which are owned by a Borrower or a Guarantor are owned by such
Borrower or such Guarantor free and clear of any mortgage, pledge, lien or
encumbrance. Except as set forth on Schedule 4.01(a), there are not outstanding
any warrants, options, contracts or commitments of any kind entitling any Person
to purchase or otherwise acquire any shares of common or capital stock or other
equity interest of any Guarantor or any Subsidiary of a Borrower or a Guarantor,
nor are there outstanding any securities which are convertible into or
exchangeable for any shares of the common or capital stock of any Guarantor or
any Subsidiary of a Borrower or a Guarantor.
(b) Good Standing. The Borrowers and the Guarantors are each corporations
duly incorporated, validly existing and in good standing under the laws of the
States of their respective incorporation and each has the corporate power to own
their assets and to transact the business in which they are presently engaged
and are duly qualified and are in good standing in such other jurisdictions
where failure to qualify or otherwise maintain such standing could result in a
Material Adverse Change in the Borrower and the Guarantors, taken as a whole.
(c) Due Execution, Etc. The execution, delivery and performance by each
Borrower and each Guarantor of the Loan Documents to which they are a party are
within the Borrowers' and the Guarantors' corporate power and have been duly
authorized by all necessary corporate action and do not and will not (i) require
any consent or approval of the stockholders of the Borrowers or Guarantors; (ii)
do not contravene the Borrowers' or any of the Guarantors' certificates of
incorporation, charters or by-laws; (iii) violate any provision of any law,
rule, regulation, contractual restriction, order, writ, judgment, injunction, or
decree, determination or award binding on or affecting either Borrower or any
Guarantor; (iv) result in a breach of or constitute a default under any
indenture or loan or credit agreement, or any other agreement, lease or
instrument to which a Borrower or any Guarantor is a party or by which it or its
properties may be bound or affected; or (v) result in, or require, the creation
or imposition of any Lien (other than the Lien of the Loan Documents) upon or
with respect to any of the properties now owned or hereafter acquired by a
Borrower or any Guarantor.
(d) No Consents Required. No authorization or approval or other action by,
and no notice to or filing with, any governmental authority or regulatory body
is required for the due execution, delivery and performance by a Borrower or any
Guarantor of any Loan Document to which it is a party, except authorizations,
approvals, actions, notices or filings which have been obtained, taken or made,
as the case may be.
(e) Validity and Enforceability. The Loan Documents when delivered
hereunder will have been duly executed and delivered on behalf of each Borrower
and each Guarantor, as the case may be, and will be legal, valid and binding
obligations of each Borrower and each Guarantor, as the case may be, enforceable
against each Borrower or such Guarantor in accordance with their respective
terms.
(f) Financial Statements. The consolidated and consolidating financial
statements of Xxxxxx and its Consolidated Affiliates for the fiscal year ended
January 31, 1997, and for the fiscal quarter ended July 31, 1997 copies of which
have been furnished to the Agent and the Banks, fairly present the financial
condition of Xxxxxx and its Consolidated Affiliates as at such dates and the
results of operations of Xxxxxx and its Consolidated Affiliates for the periods
ended on such dates, all in accordance with GAAP, and since such dates (and each
succeeding January 31) there has been (i) no material increase in the
liabilities of Xxxxxx and its Consolidated Affiliates and (ii) no Material
Adverse Change in Xxxxxx and its Consolidated Affiliates.
(g) No Litigation. There is no pending or, to either Borrower's knowledge,
threatened action, proceeding or investigation affecting such Borrower, any
Guarantor or any Subsidiary of a Borrower or a Guarantor, before any court,
governmental agency or arbitrator, which may either in one case or in the
aggregate, result in a Material Adverse Change in a Borrower, any Guarantor or
any such Subsidiary.
(h) Taxes. Each Borrower, each Guarantor and each Subsidiary of a Borrower
or a Guarantor have filed all federal, state and local tax returns required to
be filed and have paid all taxes, assessments and governmental charges and
levies thereon to be due, including interest and penalties. The federal income
tax liability of each Borrower, each Guarantor and each Subsidiary has been
finally determined and satisfied for all taxable years up to and including the
taxable year ending January 31, 1996
(i) Licenses, etc. Each Borrower, each Guarantor and each Subsidiary of a
Borrower or a Guarantor possess all licenses, permits, franchises, patents,
copyrights, trademarks and trade names, or rights thereto, to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted, and neither a Borrower, any Guarantor nor any such Subsidiary
are in violation of any similar rights of others.
(j) Burdensome Agreements. To the best of the Borrowers' knowledge after
due inquiry, neither of the Borrowers, nor any of the Guarantors nor any
Subsidiary of a Borrower or a Guarantor are a party to any indenture, loan or
credit agreement or any other agreement, lease or instrument or subject to any
charter, corporate or partnership restriction which could result in a Material
Adverse Change in the Borrowers, the Guarantors and such Subsidiaries, taken as
a whole. Neither Borrower nor any Guarantor nor any such Subsidiary is in
default in any respect in the performance, observance, or fulfillment of any of
the obligations or covenants contained in any agreement or instrument material
to its business.
(k) Margin Stock. Neither Borrower is engaged in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulation G, T, U or X), and no proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying any margin stock or in any other way which will cause
such Borrower to violate the provisions of Regulations G, T, U or X.
(l) Compliance With Laws. Each Borrower, each Guarantor and each Subsidiary
of a Borrower or a Guarantor are in all material respects in compliance with all
federal and state laws and regulations in all jurisdictions where the failure to
comply with such laws or regulations could result in a Material Adverse Change
in the Borrowers and the Guarantors, taken as a whole.
(m) ERISA. Each Borrower, each Guarantor, each Subsidiary of a Borrower or
a Guarantor and each ERISA Affiliate are in compliance in all material respects
with all applicable provisions of ERISA. Neither a Reportable Event nor a
Prohibited Transaction has occurred and is continuing with respect to any Plan;
no notice of intent to terminate a Plan has been filed nor has any Plan been
terminated; no circumstances exist which constitute grounds under Section 4042
of ERISA entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administrate, a Plan, nor has the PBGC instituted any such
proceedings; neither a Borrower, any Guarantor, any Subsidiary of a Borrower or
a Guarantor, nor any ERISA Affiliate has completely or partially withdrawn under
Sections 4201 or 4204 of ERISA from a Multiemployer Plan; each Borrower, each
Guarantor, each Subsidiary of a Borrower or a Guarantor and each ERISA Affiliate
have met their minimum funding requirements under ERISA with respect to all of
their Plans and the present fair market value of all Plan assets exceeds the
present value of all vested benefits under each Plan, as determined on the most
recent valuation date of the Plan in accordance with the provisions of ERISA for
calculating the potential liability of a Borrower, any Guarantor, any such
Subsidiary or any ERISA Affiliate to PBGC or the Plan under Title IV of ERISA;
and neither either Borrower, any Guarantor, any such Subsidiary nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA.
(n) Hazardous Materials. Each Borrower, each Guarantor and each Subsidiary
of a Borrower or a Guarantor are in compliance with all federal, state or local
laws, ordinances, rules, regulations or policies governing Hazardous Materials
and neither Borrower, any Guarantor nor any such Subsidiary has used Hazardous
Materials on, from, or affecting any property now owned or occupied or hereafter
owned or occupied by either Borrower, any Guarantor or any such Subsidiary in
any manner which violates federal, state or local laws, ordinances, rules,
regulations or policies governing the use, storage, treatment, transportation,
manufacture, refinement, handling, production or disposal of Hazardous
Materials, and that to the best of the Borrowers', Guarantors' and such
Subsidiaries' knowledge, no prior owner of any such property or any tenant,
subtenant, prior tenant or prior subtenant have used Hazardous Materials on,
from or affecting such property in any manner which violates federal, state or
local laws, ordinances, rules, regulations, or policies governing the use,
storage, treatment, transportation, manufacture, refinement, handling,
production or disposal of Hazardous Materials.
(o) Use of Proceeds. The proceeds of the Revolving Credit Loans shall be
used exclusively for the purposes set forth in Section 2.05(a) and Section 2.23
of this Agreement. Letters of Credit shall be used exclusively for the purposes
set forth in Section 2.05(b) of this Agreement. The proceeds of the Term Loans
shall be used exclusively for the purposes set forth in Section 2.15 of this
Agreement.
(p) No Liens. The properties and assets of the Borrowers, the Guarantors
and each Subsidiary of a Borrower or a Guarantor are not subject to any Lien
other than those described in Section 5.02(a) hereof.
(q) Casualties. Neither the business nor the properties of the Borrowers,
any Guarantor or any Subsidiary of the Borrowers or a Guarantor are affected by
any fire, explosion, accident, strike, hail, earthquake, embargo, act of God or
of the public enemy, or other casualty (whether or not covered by insurance),
which could result in a Material Adverse Change in Xxxxxx and the Guarantors,
taken as a whole. (r) Solvency of Guarantors. The liability of the Guarantors as
a result of the execution of their respective Guaranties and the execution of
this Agreement shall not cause the liabilities (including contingent
liabilities) of each of the Guarantors to exceed the fair saleable value of
their respective assets.
(s) Advantage to Guarantors. The Guarantors acknowledge they have derived
or expect to derive a financial or other advantage from the Loans obtained by
the Borrowers from the Bank.
(t) Credit Agreements. Schedule 4.01(t) is a complete and correct list of
all credit agreements, indentures, purchase agreements, guaranties, Capital
Leases, and other investments, agreements and arrangements presently in effect
providing for or relating to extensions of credit (including agreements and
arrangements for the issuance of letters of credit or for acceptance financing)
in respect of which either of the Borrowers or any Guarantor is in any manner
directly or contingently obligated, and the maximum principal or face amounts of
the credit in question, outstanding or to be outstanding, are correctly stated,
and all Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Schedule and neither of the Borrowers
nor any Guarantor is in default with respect to its obligations thereunder.
(u) Eligible Lease Assets. The interests of HAPL in and to the Eligible
Lease Assets, including the equipment which is the subject of any Eligible Lease
Assets, are or will be reflected in duly filed financing statements under the
Uniform Commercial Code ("UCC") of the State of New York and under the UCC of
any other states applicable thereto.
(v) Funding Sources. Schedule 4.01(v) is a complete and correct list of the
names, addresses, telephone numbers and contact persons of each Funding Source
of HAPL.
- 4 -
ARTICLE V
COVENANTS OF THE BORROWER
SECTION 5.01. Affirmative Covenants. So long as (i) any part of the Total
Commitment shall be in effect, (ii) any amount shall remain outstanding under
any of the Notes, or (iii) any Letter of Credit, accepted draft or deferred
payment obligation under a Letter of Credit is outstanding, the Borrowers and
each of the Guarantors will, unless the Agent and the Required Banks shall
otherwise consent in writing:
(a) Compliance with Laws, Etc. Comply, and cause each Subsidiary of a
Borrower or a Guarantor to comply, in all material respects with all applicable
laws, rules, regulations and orders, where the failure to so comply could result
in a Material Adverse Change in such Borrower, a Guarantor or any such
Subsidiary.
(b) Reporting Requirements. Furnish to the Agent and each of the Banks:
(i) Annual Financial Statements.
(1) As soon as available and in any event within ninety five (95) days
after the end of each fiscal year of Xxxxxx, a copy of the audited consolidated
financial statements of Xxxxxx and its Consolidated Affiliates for such year,
including a balance sheet with related statements of income and retained
earnings and statements of cash flows, all in reasonable detail and setting
forth in comparative form the figures for the previous fiscal year, together
with an unqualified opinion, prepared by Deloitte & Touche or such other
independent certified public accountants selected by the Borrower and reasonably
satisfactory to the Agent, all such financial statements to be prepared in
accordance with GAAP, and
(2) As soon as available and in any event within ninety five (95) days
after the end of each fiscal year of Xxxxxx, a copy of the consolidating
financial statements of Xxxxxx and its Consolidated Affiliates for such year,
including balance sheets with related statements of income and retained earnings
and statements of cash flows and a statement of (x) the aggregate advances by
Xxxxxx to HAPL, and (y) the aggregate advances by Xxxxxx to all Subsidiaries
other than HAPL, all in reasonable detail and setting forth in comparative form
the figures for the previous fiscal year, prepared by management of Xxxxxx, all
such financial statements to be prepared in accordance with GAAP, and
(3) consolidating projections for Xxxxxx and its Consolidated Affiliates
for the next three (3) years, including balance sheets and statements of profit
and loss for the next three (3) years, prepared by management of Xxxxxx.
(ii) Quarterly Financial Statements.
(1) As soon as available and in any event within fifty (50) days after the
end of each of the first three fiscal quarters of each fiscal year of Xxxxxx, a
copy of the consolidated financial statements of Xxxxxx and its Consolidated
Affiliates for such quarter and for year to date, including a balance sheet with
related statements of income and retained earnings and a statement of cash
flows, all in reasonable detail and setting forth in comparative form the
figures for the comparable quarter and comparable year to date period for the
previous fiscal year, all such financial statements to be prepared by management
of Xxxxxx in accordance with GAAP, and
(2) As soon as available and in any event within fifty (50) days after the
end of each of the first three fiscal quarters of each fiscal year of Xxxxxx, a
copy of the consolidating financial statements of Xxxxxx and its Consolidated
Affiliates, for such quarter and for year to date, including a balance sheet
with related statements of income and retained earnings and statements of cash
flows and a statement of (x) the aggregate advances by Xxxxxx to HAPL and (y)
the aggregate advances by Xxxxxx to all Subsidiaries other than HAPL, all in
reasonable detail and setting forth in comparative form the figures for the
comparable quarter and comparable year to date period for the previous fiscal
year, all such financial statements to be prepared by management of Xxxxxx in
accordance with GAAP.
(iii) Management Letters. Promptly upon receipt thereof, copies of any
reports submitted to Xxxxxx or any Guarantor by independent certified public
accountants in connection with examination of the financial statements of Xxxxxx
and each Guarantor made by such accountants.
(iv) Certificate of No Default. Simultaneously with the delivery of the
financial statements referred to in Section 5.01(b)(i) and (ii), a certificate
of the President or the Chief Financial Officer of Xxxxxx or Guarantor, as the
case may be, (1) certifying that no Default or Event of Default has occurred and
is continuing, or if a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which is
proposed to be taken with respect thereto; (2) with computations demonstrating
compliance with the covenants contained in Section 5.03; and (3) certifying that
after excluding the financial impact of third party sales by Tajima USA, Inc.
from consolidated operations and after excluding the net income of Tajima USA,
Inc. from Xxxxxx'x consolidated net income, Xxxxxx would remain in compliance
with the covenants contained in Section 5.03.
(v) Accountant's Certificate. Simultaneously with the delivery of the
annual financial statements referred to in Section 5.01(b)(i), a certificate of
the independent certified public accountants who audited such statements to the
effect that, in making the examination necessary for the audit of such
statements, they have obtained no knowledge of any condition or event which
constitutes a Default or Event of Default, or if such accountants shall have
obtained knowledge of any such condition or event, specify in such certificate
each such condition or event of which they have knowledge and the nature and
status thereof. In addition, such accountants shall certify that after excluding
the financial impact of third party sales by Tajima USA, Inc. from consolidated
operations, and after excluding the net income of Tajima USA, Inc. from Xxxxxx'x
consolidated net income, Xxxxxx would remain in compliance with the covenants
contained in Section 5.03.
(vi) Notice of Litigation. Promptly after the commencement thereof, notice
of all actions, suits and proceedings before any court or governmental
department, commission, board, bureau, agency, or instrumentality, domestic or
foreign, affecting either Borrower, any Guarantor or any Subsidiary of a
Borrower or a Guarantor which, if determined adversely to the Borrower, any
Guarantor or any such Subsidiary could result in a Material Adverse Change in
the Borrower and the Guarantors, taken as a whole.
(vii) Notice of Defaults and Events of Default. As soon as possible and in
any event within five (5) days after the occurrence of each Default or Event of
Default, a written notice setting forth the details of such Default or Event of
Default and the action which is proposed to be taken by the applicable Borrower
with respect thereto.
(viii) ERISA Reports. Promptly after the filing or receiving thereof,
copies of all reports, including annual reports, and notices which a Borrower
any Guarantor and any Subsidiary of a Borrower or a Guarantor, files with or
receives from the PBGC or the U.S. Department of Labor under ERISA; and as soon
as possible after a Borrower, any Guarantor or any such Subsidiary knows or has
reason to know that any Reportable Event or Prohibited Transaction has occurred
with respect to any Plan or that the PBGC or a Borrower, any Guarantor or any
such Subsidiary has instituted or will institute proceedings under Title IV of
ERISA to terminate any Plan, such Borrower or such Guarantor will deliver to the
Agent a certificate of the President or the Chief Financial Officer of such
Borrower or such Guarantor setting forth details as to such Reportable Event or
Prohibited Transaction or Plan termination and the action such Borrower or such
Guarantor proposes to take with respect thereto.
(ix) Reports to Other Creditors. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other party pursuant to the
terms of any indenture, loan, or credit or similar agreement and not otherwise
required to be furnished to the Agent pursuant to any other clause of this
Section 5.01(b).
(x) Proxy Statements, Etc. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports which Xxxxxx,
any Guarantor or any Subsidiary of a Borrower or any Guarantor sends to its
public stockholders, and copies of all regular, periodic, and special reports,
and all registration statements which Xxxxxx, any Guarantor or any such
Subsidiary files with the Securities and Exchange Commission or any governmental
authority which may be substituted therefor, or with any national securities
exchange.
(xi) Notice of Default or Termination of Tajima Agreement or Sedeco Tajima
Agreement. Promptly upon receipt thereof, notice of the cancellation or
suspension of the Tajima Agreement or the Sedeco Tajima Agreement or of any
notice by any party thereto of its intent to cancel or suspend the Tajima
Agreement or the Sedeco Tajima Agreement, and notice of the existence of any
default or event of default thereunder.
(xii) Notice of Tajima Agreements. Promptly upon the commencement thereof,
notice to the Agent of any new agreement between Xxxxxx and/or any of its
Affiliates and Tajima Industries Ltd.
(xiii) Notice of IRS Audits. Promptly upon the occurrence thereof, notice
to the Agent of any audit or other investigation by the Internal Revenue Service
of HAPL's treatment of the residual value of its leases.
(xiv) Reports to Funding Sources. At the same time it furnishes financial
information to any Funding Source, copies of such information;
(xv) General Information. Such other information respecting the condition
or operations, financial or otherwise, of a Borrower, any Guarantor or any
Subsidiary of a Borrower or a Guarantor as the Bank may from time to time
reasonably request.
(c) Taxes. Pay and discharge, and cause its Subsidiaries to pay and
discharge, all taxes, assessments and governmental charges upon it or them, its
or their income and its or their properties prior to the dates on which
penalties are attached thereto, unless and only to the extent that (i) such
taxes shall be contested in good faith and by appropriate proceedings by a
Borrower, any Guarantor or any such Subsidiary, as the case may be, and (ii)
there be adequate reserves therefor in accordance with GAAP entered on the books
of a Borrower, any Guarantor or any such Subsidiary.
(d) Corporate Existence. Preserve and maintain, and cause its Subsidiaries
to preserve and maintain, their corporate existence and good standing in the
jurisdiction of their incorporation and the rights, privileges and franchises of
a Borrower, each Guarantor and each such Subsidiary in each case where failure
to so preserve or maintain could result in a Material Adverse Change in Xxxxxx
and the Guarantors, taken as a whole.
(e) Maintenance of Properties and Insurance. (i) Keep, and cause any
Subsidiaries to keep, the respective properties and assets (tangible or
intangible) that are useful and necessary in its business, in good working order
and condition, reasonable wear and tear excepted; (ii) maintain, and cause any
Subsidiaries to maintain, insurance with financially sound and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
properties doing business in the same general areas in which a Borrower, any
Guarantors and any such Subsidiaries operate; and (iii) maintain a property
damage insurance policy in the amount of the replacement value of that portion
of the Collateral consisting of industrial and commercial embroidery equipment
held as inventory and not leased to a lessee for such equipment, naming the
Agent and the Banks as loss payee with an insurance company acceptable to the
Agent. The policy shall provide for thirty (30) days notice to the Agent of
cancellation or change.
(f) Books of Record and Account. Keep and cause any Subsidiaries to keep,
adequate records and proper books of record and account in which complete
entries will be made in a manner to enable the preparation of financial
statements in accordance with GAAP, reflecting all financial transactions of the
Borrowers, the Guarantors, and any such Subsidiaries.
(g) Visitation; Collateral Audit. (a) At any reasonable time and upon
reasonable notice, and from time to time, permit the Agent or any of the Banks
or any agents or representatives thereof, to examine and make copies of and
abstracts from the books and records of, and visit the properties of, a Borrower
or any Guarantor and to discuss the affairs, finances and accounts of a Borrower
or any Guarantor with any of the respective officers or directors of a Borrower
or such Guarantor or the Borrowers' or such Guarantor's independent accountants.
(b) Upon reasonable notice, in the event that there have been, at any time,
any Revolving Credit Loans (HAPL) outstanding, permit the Agent to conduct a
Collateral Audit, by the Agent's in-house staff or by outside auditors. The cost
of one (1) such Collateral Audit, during each semi-annual fiscal period shall be
at HAPL's cost and expense, with additional Collateral Audits to be at the
expense of the Agent for the pro rata account of the Banks, unless there is an
occurrence of an Event of Default, in which case the Agent may conduct such
additional Collateral Audits as are deemed necessary by the Agent, in its sole
discretion, at the Borrower's cost and expense. (h) Performance and Compliance
with Other Agreements. Perform and comply with each of the provisions of each
and every agreement the failure to perform or comply with which could result in
a Material Adverse Change in Xxxxxx and the Guarantors, taken as a whole.
(i) Pension Funding. Comply with the following and cause each ERISA
Affiliate of a Borrower, any Guarantor or any Subsidiary of a Borrower or a
Guarantor to comply with the following:
(i) engage solely in transactions which would not subject any of such
entities to either a civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Internal Revenue Code in either case in
an amount in excess of $25,000.00;
(ii) make full payment when due of all amounts which, under the provisions
of any Plan or ERISA, a Borrower, any Guarantor, any such Subsidiary or any
ERISA Affiliate of any of same is required to pay as contributions thereto;
(iii) all applicable provisions of the Internal Revenue Code and the
regulations promulgated thereunder, including but not limited to Section 412
thereof, and all applicable rules, regulations and interpretations of the
Accounting Principles Board and the Financial Accounting Standards Board;
(iv) not fail to make any payments in an aggregate amount greater than
$25,000.00 to any Multiemployer Plan that a Borrower, any Guarantor, any such
Subsidiary or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, or any law pertaining thereto; or
(v) not take any action regarding any Plan which could result in the
occurrence of a Prohibited Transaction.
(j) Licenses. Maintain at all times, and cause each Subsidiary to maintain
at all times, all licenses or permits necessary to the conduct of its business
or as may be required by any governmental agency or instrumentality thereof.
(k) New Subsidiaries and Affiliates. Cause (i) any Subsidiary of either
Borrower or any Guarantor, or (ii) any Affiliate of either Borrower or any
Guarantor engaged in any of the businesses of Xxxxxx as set forth in Xxxxxx'x
initial public offering prospectus dated as of February 17, 1994, in either case
formed after the date of this Agreement, to (x) become a guarantor of all
obligations of the Borrowers under this Agreement and the other Loan Documents
and (y) become a party to this Agreement.
(l) Agent's Administrative Fee. Pay to the Agent the annual administrative
fees as mutually agreed between Xxxxxx and the Agent.
(m) Borrowing Base Certificate; Aging of Leases; Sale of Eligible Lease
Assets. Once the initial Revolving Credit Loan (HAPL) has been made, deliver to
the Agent and the Banks, not later than the fifteenth (15th) day of each month
(x) a Borrowing Base Certificate dated as of the last Business Day of the prior
month, such Borrowing Base Certificate to include: (i) the book value,
calculated in accordance with GAAP, of each Eligible Lease Asset, which book
value shall not include any residual value of such Eligible Lease Asset; (ii)
each lease which has one or more payments past due; and (iii) HAPL's calculation
of the Borrowing Base; (y) an aging of all Eligible Lease Assets as of the last
Business day of the prior month in form and substance satisfactory to the Bank;
and (z) notice of the sale of Eligible Lease Assets, which notice shall specify
the Eligible Lease Assets sold and the purchase price for such Eligible Lease
Assets and the name and address of the purchaser thereof together with (i) two
(2) UCC-3 termination statements for the Eligible Lease Assets sold for the
Agent's execution in substantially the form annexed to the Security Agreement as
Exhibit A and (ii) a Borrowing Base Certificate, which certificate shall
indicate compliance with section 2.17 hereof upon remittance to the Agent of the
proceeds of such sale as required thereby;
(n) Funding Sources. (i) Notify the Agent of any additional Funding Source
of HAPL, within five (5) Business Days of such addition, (ii) deliver to the
Agent a true copy of any agreement between HAPL and such Funding Source for the
purchase of leases or any portion thereof, (iii) cause such additional Funding
Source of HAPL to enter into an Intercreditor Agreement with the Agent prior to
selling or otherwise transferring any leases to such new Funding Source, and
(iv) notify the Agent of the termination of any such agreement with a Funding
Source within the earlier of (x) twenty (20) days of notice of such termination,
or (y) twenty (20) days of such termination.
SECTION 5.02. Negative Covenants. So long as (i) any part of the Total
Commitment shall be in effect, (ii) any amount shall remain outstanding under
any of the Notes, or (iii) any Letter of Credit, accepted draft or deferred
payment obligation under a Letter of Credit is outstanding, neither Borrower nor
any of the Guarantors nor any Subsidiary of a Borrower or a Guarantor will,
without the written consent of the Agent and the Required Banks:
(a) Liens, Etc. Create, incur, assume or suffer to exist, any Lien, upon or
with respect to any of its properties, now owned or hereafter acquired, except:
(i) Liens in favor of the Banks securing Debt permitted by Section 5.02;
(ii) Liens for taxes or assessments or other government charges or levies
if not yet due and payable or if due and payable if they are being contested in
good faith by appropriate proceedings and for which appropriate reserves are
maintained;
(iii) Liens imposed by law, such as mechanics', materialmen's, landlords',
warehousemen's, and carriers' Liens, and other similar Liens, securing
obligations incurred in the ordinary course of business which are not past due
or which are being contested in good faith by appropriate proceedings and for
which appropriate reserves have been established;
(iv) Liens under workers' compensation, unemployment insurance, Social
Security, or similar legislation;
(v) Liens, deposits, or pledges to secure the performance of bids, tenders,
contracts (other than contracts for the payment of money), leases (permitted
under the terms of this Agreement), public or statutory obligations, surety,
stay, appeal, indemnity, performance or other similar bonds, or other similar
obligations arising in the ordinary course of business;
(vi) Liens described in Schedule 5.02(a), provided that no such Liens shall
be renewed, extended or refinanced;
(vii) Judgment and other similar Liens arising in connection with court
proceedings (other than those described in Section 6.01(f)), provided the
execution or other enforcement of such Liens is effectively stayed and the
claims secured thereby are being actively contested in good faith and by
appropriate proceedings;
(viii) Easements, rights-of-way, restrictions, and other similar
encumbrances which, in the aggregate, do not materially interfere with the
Borrower's or a Guarantor's occupation, use and enjoyment of the property or
assets encumbered thereby in the normal course of its business or materially
impair the value of the property subject thereto;
(ix) Purchase money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such acquisition, or
a Lien incurred in connection with any conditional sale or other title retention
agreement or a Capital Lease, provided that:
(1) Any property subject to any of the foregoing is acquired by the
Borrower or any Guarantor in the ordinary course of its respective business and
the Lien on any such property is created contemporaneously with such
acquisition; (2) The obligation secured by any Lien so created, assumed, or
existing shall not exceed one hundred (100%) percent of lesser of cost or fair
market value of the property acquired as of the time of the Borrower or any
Guarantor acquiring the same;
(3) Each such Lien shall attach only to the property so acquired and fixed
improvements thereon;
(4) The Debt secured by all such Liens shall not exceed Four Million Five
Hundred Thousand($4,500,000.00) Dollars at any time outstanding in the
aggregate; and
(5) The obligation secured by such Lien is permitted by the provisions of
Section 5.02(b) and the related expenditure is permitted by the provisions of
Section 5.03(b);
(x) Liens constituting mortgages on real property in an aggregate principal
amount not to exceed Five Million ($5,000,000.00) Dollars; and
(xi) Liens given to Funding Sources granted in connection with the sale of
leases by HAPL.
(b) Debt. Create, incur, assume, or suffer to exist, any Debt, except:
(i) Debt of the Borrower under this Agreement, the Notes or the Letters of
Credit;
(ii) Debt described in Schedule 5.02(b), provided that no such Debt shall
be renewed, extended or refinanced;
(iii) Accounts payable to trade creditors for goods or services and current
operating liabilities (other than for borrowed money), in each case incurred in
the ordinary course of business and paid within the specified time, unless
contested in good faith and by appropriate proceedings;
(iv) Debt of the Borrower or any Guarantor secured by purchase money Liens
permitted by Section 5.02(a)(ix);
(v) Debt incurred by HAPL from Xxxxxx permitted by Section 5.02(r);
(vi) Debt in connection with mortgage liens permitted pursuant to Section
5.02(a)(x) hereof; and
(vii) Any other Debt in the maximum aggregate amount outstanding at any
time of $60,000.00.
(c) Lease Obligations. Create, incur, assume, or suffer to exist any
obligation as lessee for the rental or hire of any real or personal property,
except (i) Capital Leases permitted by Section 5.02(a); (ii) leases existing on
the date of this Agreement and any extensions or renewals thereof; and (iii)
leases (other than Capital Leases) which do not in the aggregate require the
Borrowers or any Guarantor to make payments (including taxes, insurance,
maintenance, and similar expenses which the Borrowers or any Guarantor is
required to pay under the terms of any lease) in any fiscal year of Xxxxxx in
excess of $2,000,000.00.
(d) Merger. Merge into, or consolidate with or into, or have merged into
it, any Person (for the purpose of this subsection (d), the acquisition or sale
by a Borrower or any Guarantor by lease, purchase or otherwise, of all, or
substantially all, of the common stock or the assets of any Person or of it
shall be deemed a merger of such Person with the Borrower or any Guarantor)
other than (i) a merger of a Subsidiary into its parent corporation, (ii) Other
Acquisitions, but not in excess of the Other Acquisition Maximum Consideration,
or (iii) in connection with Permitted Acquisitions, provided that the total
aggregate consideration for all Other Acquisitions and Permitted Acquisitions
(including all Permitted Acquisition Loans) shall not exceed $30,000,000.00 in
the aggregate during the term of this Agreement.
(e) Sale of Assets, Etc. Sell, assign, transfer, lease or otherwise dispose
of any of its assets, (including a saleleaseback transaction) with or without
recourse, except for (i) inventory disposed of in the ordinary course of
business; and (ii) the sale or other disposition of assets no longer used or
useful in the conduct of its business, (iii) saleleaseback transactions which in
the aggregate involve the sale of assets for total consideration of not greater
than $2,000,000.00 Dollars, (iv) leases sold by HAPL on a Non-Recourse basis and
(v) leases sold by HAPL on a recourse basis, provided that the aggregate
liability of HAPL for such recourse does not exceed $2,500,000.00 at any time.
(f) Investments, Etc. Make any Investment other than Permitted Investments.
(g) Transactions With Affiliates. Except in the ordinary course of business
and pursuant to the reasonable requirements of a Borrower's, a Guarantor's or a
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower, or the Guarantor or the Subsidiary than would be obtained in a
comparable arm's length transaction with a Person not an Affiliate, enter into
any transaction, including, without limitation, the purchase, sale, or exchange
of property or the rendering of any service, with any Affiliate.
(h) Prepayment of Outstanding Debt. Pay, in whole or in part, any
outstanding Debt (other than the Loans) of the Borrower or any Guarantor which
by its terms is not then due and payable (other than the Loans).
(i) Guarantees. Guaranty, or in any other way become directly or
contingently obligated for any Debt of any other Person (including any
agreements relating to working capital maintenance, take or pay contracts or
similar arrangements) other than (i) the endorsement of negotiable instruments
for deposit in the ordinary course of business; (ii) guarantees existing on the
date hereof and set forth in Schedule 5.02(i) annexed hereto, or (iii)
guarantees of Debt permitted hereunder.
(j) Change of Business. Materially alter the nature of its business.
(k) Fiscal Year. Change the ending date of its fiscal year from January 31.
(l) Losses. Incur a net loss for any fiscal year.
(m) Accounting Policies. Change any accounting policies, except as
permitted by GAAP.
(n) Change of Tax Status. Change its tax reporting status as a C
corporation.
(o) Change in Ownership. Fail or cease to maintain the ownership by Xxxx
Xxxxxx and Xxxxx Xxxxxxx, directly or indirectly, of a majority of such classes
of voting stock of Xxxxxx and the Guarantors such as would enable the holder
thereof to elect a majority of the members of the Board of Directors of Xxxxxx
and each Guarantor.
(p) Management. Fail to retain each of Xxxxx Xxxxxxx and Xxxx Xxxxxx in a
reasonably active full time capacity in the management of Xxxxxx and Guarantors.
(q) Hazardous Material. Each Borrower, each Guarantor and each Subsidiary
of a Borrower or a Guarantor shall not cause or permit any property owned or
occupied by a Borrower, any Guarantor or any such Subsidiary to be used to
generate, manufacture, refine, transport, treat, store, handle, dispose,
transfer, produce or process Hazardous Materials, except in compliance with all
applicable federal, state and local laws or regulations nor shall a Borrower,
any Guarantor or any such Subsidiary cause or permit, as a result of any
intentional or unintentional act or omission on the part of a Borrower, any
Guarantor or any such Subsidiary or any tenant or subtenant, a release of
Hazardous Materials onto any property owned or occupied by a Borrower, any
Guarantor or any such Subsidiary or onto any other property. Each Borrower, each
Guarantor and each such Subsidiary shall not fail in all material respects to
comply with all applicable federal, state and local laws, ordinances, rules and
regulations, whenever and by whomever triggered, and shall not fail to obtain
and comply with, any and all approvals, registrations or permits required
thereunder. The Borrowers and the Guarantors shall execute any documentation
reasonably required by the Agent in connection with the representations,
warranties and covenants contained in this paragraph and Section 4.01 of this
Agreement.
(r) HAPL Transactions. (i) Permit HAPL to incur Debt for borrowed money
other than pursuant to this Agreement and (ii) engage in any transaction
involving a loan, advance, capital or other contribution or any other
transaction pursuant to which cash or other assets are transferred from Xxxxxx
to HAPL (an "Inter Company Transaction"), other than transactions which at any
time do not exceed the lesser of (x) the difference between (i) one hundred
(100%) percent of the net present value of HAPL's lease receivables and (2) the
principal amount outstanding under the Revolving Credit Loans (HAPL) or (y) the
following amounts: (a) from the date of this Agreement until January 31, 1998,
$12,500,000.00; (b) from January 31, 1998 until January 31, 1999,
$16,500,000.00; and (c) from January 31, 1999 and thereafter, $21,000,000.00.
(s) Inter Company Transactions. Engage in any transaction involving a loan,
advance, capital or other contribution or any other transaction (other than
transactions in the ordinary course of business which comply with Section
5.02(g)) pursuant to which cash or other assets are transferred from Xxxxxx to
any Subsidiary (an "Inter Company Transaction") (other than HAPL, for which
Inter Company Transactions are governed by Section 5.02(r)), if the aggregate
(i) Inter Company Transactions with any Guarantor (other than HAPL) would exceed
$5,000,000.00 at any time or (ii) Inter Company Transactions with all
Subsidiaries other than Guarantors would exceed $2,000,000.00 at any time,
provided that Xxxxxx shall be permitted to make additional capital investments
not exceeding $1,000,000.00 in the aggregate in Tajima USA, Inc. during the term
of this Agreement.
SECTION 5.03. Financial Requirements. So long as (i) any part of the Total
Commitment shall be in effect, (ii) any amount shall remain outstanding under
any of the Notes, or (iii) any Letter of Credit, accepted draft or deferred
payment obligation under a Letter of Credit is outstanding:
(a) Minimum Consolidated Tangible Net Worth. Xxxxxx and the Guarantors will
maintain at all times a Consolidated Tangible Net Worth ("TNW") of not less than
the following, to be tested quarterly:
Period Minimum TNW
From the date of this 90% of TNW at July 31, 1997
Agreement until January 31,1998 ("Base TNW")
From January 31, 1998 until the sum of (x) Base TNW and
January 31, 1999 (y) the difference between
(1) $7,500,000.00 and (2)
Xxxxxx'x consolidated net
income for the first two
quarters of fiscal year 1998
From January 31, 1999 and until $7,500,000.00 over the
January 31, 2000 required TNW at January 31, 1998
From January 31, 2000 and until $8,000,000.00 over the
January 31, 2001 required TNW at January 31, 1999
From January 31, 2001 and $10,000,000.00 over the
thereafter required TNW at the previous
fiscal year end
(b) Consolidated Capital Expenditures. Xxxxxx, the Guarantors and their
respective Subsidiaries will not make Consolidated Capital Expenditures in
excess of $4,500,000.00 in the aggregate during any fiscal year, provided that
Xxxxxx, the Guarantors and their respective Subsidiaries may make Consolidated
Capital Expenditures in excess of such amount solely for the purchase of a new
building(s) or expansion of their existing building(s) in amounts not in excess
of $5,000,000.00 in the aggregate.
(c) Quick Asset Ratio. Xxxxxx and the Guarantors will at all times maintain
a Quick Asset Ratio of not less than 0.75 to 1.0, such ratio to be tested
quarterly.
(d) Funded Debt to EBITDA Ratio. Xxxxxx and Guarantors will maintain at all
times on a consolidated basis, a Funded Debt to EBITDA Ratio, to be tested
quarterly, of not greater than the following:
Period Funded Debt to EBITDA Ratio
From the date of this Agreement 2.50 to 1.0
until January 31, 1998
From January 31, 1998 and 2.25 to 1.0
thereafter.
(e) Fixed Charge Coverage Ratio. Xxxxxx and Guarantors will maintain at all
times on a consolidated basis a minimum Fixed Charge Coverage Ratio of not less
than 3.50 to 1.0, such ratio to be tested quarterly.
(f) Minimum Tangible Net Worth (HAPL). (i) HAPL will maintain a Tangible
Net Worth of not less than the following:
Period Minimum TNW
From the date of this Agreement $4,000,000.00
until January 31, 1998
From January 31, 1998 and $500,000.00 in excess
thereafter
(g) HAPL shall maintain at all times a ratio of HAPL EBIT to Interest
Expense of at least 1.50:1.0.
- 5 -
ARTICLE VI
EVENTS OF DEFAULT
SECTION 6.01. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) A Borrower shall fail to pay any installment of principal of, or
interest on, any of the Notes when due, or any fees or other amounts owed in
connection with this Agreement or Xxxxxx shall fail to reimburse the Letter of
Credit Issuer for any draw, accepted draft, deferred payment obligations or any
other amounts owed in connection with any Letters of Credit when due; or
(b) Any representation or warranty made by a Borrower or any Guarantor
herein or in the Loan Documents or which is contained in any certificate,
document, opinion, or financial or other statement furnished at any time under
or in connection with any Loan Document shall prove to have been incorrect in
any material respect when made; or
(c) A Borrower or any Guarantor shall fail to perform any affirmative
covenant contained in Section 5.01 hereof within twenty (20) calendar days of
the date required thereunder, or shall fail to perform any other term, covenant,
or agreement contained in this Agreement in any other Loan Document (other than
the Notes) on its part to be performed or observed; or
(d) A Borrower, any Guarantor, or any Subsidiary of a Borrower or a
Guarantor shall fail to pay any Debt (excluding Debt evidenced by the Notes or
the Letters of Credit) of a Borrower, any Guarantor or any such Subsidiary (as
the case may be), or any interest or premium thereon, when due (other than trade
payables in the ordinary course of business of less than $250,000.00 in the
aggregate) (whether by scheduled maturity, required prepayment, acceleration,
demand or otherwise) and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such Debt;
or any other default under any agreement or instrument relating to any such
Debt, or any other event shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such default or event is to accelerate, or to permit the acceleration of, the
maturity of such Debt; or any such Debt shall be declared to be due and payable,
or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(e) A Borrower, any Guarantor or any Subsidiary of a Borrower or a
Guarantor shall generally not pay its Debts as such Debts become due, or shall
admit in writing its inability to pay its Debts generally, or shall make a
general assignment for the benefit of creditors; or any proceeding shall be
instituted by or against a Borrower, any Guarantor or any such Subsidiary
seeking to adjudicate it a bankrupt or insolvent, or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief, or
composition of it or its Debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official for
it or for any substantial part of its property and if instituted against a
Borrower, any Guarantor or any such Subsidiary shall remain undismissed for a
period of 90 days; or a Borrower, any Guarantor or any such Subsidiary shall
take any action to authorize any of the actions set forth above in this
subsection (e); or
(f) Any judgment or order or combination of judgments or orders for the
payment of money, in excess of $500,000.00 in the aggregate, which sum shall not
be subject to full, complete and effective insurance coverage, shall be rendered
against a Borrower, any Guarantor or any Subsidiary of a Borrower or a Guarantor
and either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 60 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(g) Any Guarantor shall fail to perform or observe any term or provision of
its Guaranty or any representation or warranty made by any Guarantor (or any of
its officers or partners) in connection with such Guarantor's Guaranty shall
prove to have been incorrect in any material respect when made; or
(h) Any of the following events occur or exist with respect to a Borrower,
any Guarantor, any Subsidiary of a Borrower or a Guarantor, or any ERISA
Affiliate: (i) any Prohibited Transaction involving any Plan; (ii) any
Reportable Event with respect to any Plan; (iii) the filing under Section 4041
of ERISA of a notice of intent to terminate any Plan or the termination of any
Plan; (iv) any event or circumstance that might constitute grounds entitling the
PBGC to institute proceedings under Section 4042 of ERISA for the termination
of, or for the appointment of a trustee to administer, any Plan, or the
institution of the PBGC of any such proceedings; (v) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization insolvency, or termination of any Multiemployer Plan; and in each
case above, such event or condition, together with all other events or
conditions, if any, could in the opinion of the Agent subject a Borrower, any
Guarantor, any such Subsidiary or any ERISA Affiliate to any tax, penalty, or
other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or any
combination thereof) which in the aggregate exceeds or may exceed $500,000.00;
or
(i) This Agreement or any other Loan Document, at any time after its
execution and delivery and for any reason, ceases to be in full force and effect
in all material respects or shall be declared to be null and void, or the
validity or enforceability of any document or instrument delivered pursuant to
this Agreement shall be contested by a Borrower, any Guarantor or any party to
such document or instrument or a Borrower, any Guarantor or any party to such
document or instrument shall deny that it has any or further liability or
obligation under any such document or instrument; or
(j) An event of default specified in any Loan Document other than this
Agreement shall have occurred and be continuing.
SECTION 6.02. Remedies on Default. Upon the occurrence and continuance of
an Event of Default the Agent may, and at the request of the Required Banks
shall, by notice to the Borrowers take any or all of the following actions: (i)
terminate the Total Commitment, (ii) declare the Notes, all interest thereon and
all other amounts payable under this Agreement to be forthwith due and payable,
and (iii) demand that Xxxxxx provide the Letter of Credit Issuer with cash
collateral for any undrawn Letters of Credit and any accepted drafts or deferred
payment obligations under any Letters of Credit, whereupon the Total Commitment
shall be terminated, the Notes, all such interest, all such cash collateral and
all such other amounts shall become and be forthwith due and payable, without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrowers and (iv) proceed to enforce its rights
whether by suit in equity or by action at law, whether for specific performance
of any covenant or agreement contained in this Agreement or any Loan Document,
or in aid of the exercise of any power granted in either this Agreement or any
Loan Document or proceed to obtain judgment or any other relief whatsoever
appropriate to the enforcement of its rights, or proceed to enforce any other
legal or equitable right which the Agent or the Banks may have by reason of the
occurrence of any Event of Default hereunder or under any Loan Document,
provided, however, upon the occurrence of an Event of Default referred to in
Section 6.01(e), the Total Commitment shall be immediately terminated, the
Notes, all interest thereon, all such cash collateral and all other amounts
payable under this Agreement shall be immediately due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Borrowers. Any amounts collected pursuant to
action taken under this Section 6.02 shall be applied to the payment of, first,
any costs incurred by the Agent in taking such action, including but without
limitation attorneys fees and expenses, second, to provide cash collateral to
the Letter of Credit Issuer for any undrawn Letters of Credit, accepted drafts
or deferred payment obligations, third, to payment of the accrued interest on
the Notes and fourth, to payment of the unpaid principal of the Notes.
SECTION 6.03. Remedies Cumulative. No remedy conferred upon or reserved to
the Agent or the Banks hereunder or in any Loan Document is intended to be
exclusive of any other available remedy, but each and every such remedy shall be
cumulative and in addition to every other remedy given under this Agreement or
any Loan Document or now or hereafter existing at law or in equity. No delay or
omission to exercise any right or power accruing upon any Event of Default shall
impair any such right or power or shall be construed to be a waiver thereof, but
any such right and power may be exercised from time to time and as often as may
be deemed expedient. In order to entitle the Agent or the Banks to exercise any
remedy reserved in this Article VI, it shall not be necessary to give any
notice, other than such notice as may be herein expressly required in this
Agreement or in any Loan Document.
- 6 -
ARTICLE VII
THE AGENT; RELATIONS AMONG BANKS AND BORROWER
SECTION 7.01. Appointment, Powers and Immunities of Agent. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under any other Loan Document with such powers as are specifically delegated to
the Agent by the terms of this Agreement and any other Loan Document, together
with such other powers as are reasonably incidental thereto. The Agent shall
have no duties or responsibilities except those expressly set forth in this
Agreement and any other Loan Document, and shall not by reason of this Agreement
be a trustee or fiduciary for any Bank. The Agent shall not be responsible to
the Banks for any recitals, statements, representations or warranties made by
the Borrowers or the Guarantors, or any officer or official of the Borrowers or
Guarantors, or any of them, or any other Person contained in this Agreement or
any other Loan Document, or in any certificate or other document or instrument
referred to or provided for in, or received by any of them under, this Agreement
or any other Loan Document, or for the value, legality, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or any other document or instrument referred to or provided for herein
or therein, except as explicitly provided herein, or for the failure by the
Borrowers, the Guarantors, or any of them to perform any of their or its
respective obligations hereunder or thereunder. The Agent may employ agents and
attorneys-in-fact and shall not be responsible, except as to money or securities
received by it or its authorized agents, for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. Except as
otherwise explicitly provided herein, neither the Agent nor any of its
directors, officers, employees or agents shall be liable or responsible to any
Bank for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith, except for
its or their own gross negligence or wilful misconduct. The Borrowers shall pay
any fee agreed to by the Borrowers and the Agent with respect to the Agent's
services hereunder.
SECTION 7.02. Reliance by Agent. The Agent shall be entitled to rely upon
any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent with reasonable care. The Agent may deem and
treat each Bank as the holder of the Loans made by it for all purposes hereof
unless and until a notice of the permitted transfer thereof satisfactory to, the
Agent signed by such Bank shall have been furnished to the Agent but the Agent
shall not be required to deal with any Person who has acquired a participation
in any Loan from a Bank. As to any matters not expressly provided for by this
Agreement or any other Loan Document, the Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions signed by the Required Banks, and such instructions of the Required
Banks and any action taken or failure to act pursuant thereto shall be binding
on all of the Banks and any other holder of all or any portion of any Loan.
SECTION 7.03. Defaults. The Agent shall not be deemed to have knowledge of
the occurrence of a Default or Event of Default (other than the non-payment of
principal of or interest on the Loans) unless the Agent has actual knowledge of
any Default or Event of Default or has received notice from a Bank or a Borrower
specifying such Default or Event of Default and stating that such notice is a
"Notice of Default." In the event that the Agent receives such a notice of, or
otherwise has actual knowledge of the occurrence of a Default or Event of
Default, the Agent shall give prompt notice thereof to the Banks (and shall give
each Bank prompt notice of each such non-payment). The Agent shall (subject to
Section 7.08) take such action with respect to such Default or Event of Default
which is continuing as shall be directed by the Required Banks; provided that,
unless and until the Agent shall have received such directions, the Agent may
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interest of
the Banks; and provided further that the Agent shall not be required to take any
such action which it determines to be contrary to law.
SECTION 7.04. Rights of Agent as a Bank. With respect to the Loans made by
it, the Agent in its capacity as a Bank hereunder shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though it were
not acting as the Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include the Agent in its capacity as a Bank. The
Agent or any Bank and their respective Affiliates may (without having to account
therefor to any other Bank except as otherwise expressly provided in this
Agreement) accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or other business
with, the Borrowers, the Guarantors or any of them (and any of their
Affiliates); provided that no payment or lien priority shall be given to the
Agent or to any Bank for any other transaction without the express written
approval of all of the other Banks. In the case of BNY, it may do so as if it
were not acting as the Agent, and the Agent may accept fees and other
consideration from the Borrowers, the Guarantors or any of them for services in
connection with this Agreement or otherwise without having to account for the
same to the Banks. Although the Agent or a Bank or any of their respective
Affiliates may in the course of such relationships and relationships with other
Persons acquire information about the Borrowers, the Guarantors, their
Affiliates and such other Persons, neither the Agent nor such Bank shall have
any duty to the other Banks or the Agent to disclose such information to the
other Banks or the Agent except as otherwise provided herein with respect to the
occurrence of an Event of Default.
SECTION 7.05. Indemnification of Agent. The Banks agree to indemnify the
Agent (to the extent not reimbursed under Section 8.04 or under the applicable
provisions of any other Loan Document, but without limiting the obligations of
the Borrowers and Guarantors under Section 8.04 or such provisions), ratably in
accordance with their respective percentages of the Total Commitment (without
giving effect to any participation in all or any portion of the Total Commitment
sold by them to any other Person), for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement, any other Loan Document or any other documents contemplated
by or referred to herein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses which the Borrowers and
Guarantors are obligated to pay under Section 8.04 or under the applicable
provisions of any other Loan Document but excluding, unless a Default or Event
of Default has occurred, normal administrative costs and expenses incidental to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents or instruments; provided
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or wilful misconduct of the party to be indemnified.
SECTION 7.06. Documents. It is the responsibility of the Borrowers to
forward to each Bank, on or before the due dates set forth herein, a copy of
each report, notice or other document required by this Agreement or any other
Loan Document to be delivered to the Agent. The Agent is not responsible for
forwarding such information to the Banks.
SECTION 7.07. Non-Reliance on Agent and Other Banks. Each Bank agrees that
it has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrowers, the Guarantors and their Subsidiaries and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under this Agreement
or any other Loan Document. The Agent shall not be required to keep itself
informed as to the performance or observance by the Borrowers or Guarantors of
this Agreement or any other Loan Document or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Borrowers, the Guarantors or any Subsidiary. Except for notices, reports and
other documents and information expressly required to be furnished to the Banks
by the Agent hereunder, the Agent shall not have any duty or responsibility to
any other Bank to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrowers, the
Guarantors or any Subsidiary (or any of their Affiliates) which may come into
the possession of the Agent or of its Affiliates. The Agent shall not be
required to file this Agreement, any other Loan Document or any document or
instrument referred to herein or therein, or record or give notice of this
Agreement, any other Loan Document or any document or instrument referred to
herein or therein, to any Person.
SECTION 7.08. Failure of Agent to Act. Except for action expressly required
of the Agent hereunder, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall have received further
assurances (which may include cash collateral) of the indemnification
obligations of the Banks under Section 7.05 in respect of any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
SECTION 7.09. Resignation of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving written notice thereof to the Banks and the Borrowers. Upon any
such resignation, the Required Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Required Banks
and shall have accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a bank which has an
office in New York, New York. The Required Banks or the retiring Agent, as the
case may be, shall upon the appointment of a Successor Agent promptly so notify
the Borrowers, the Guarantors and the other Banks. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder. After any retiring Agent's
resignation as Agent, the provisions of this Article 7 shall continue in effect
for its benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Agent.
SECTION 7.10. Amendments Concerning Agency Function. The Agent shall not be
bound by any waiver, amendment, supplement or modification of this Agreement or
any other Loan Document which affects its duties hereunder or thereunder unless
it shall have given its prior written consent thereto.
SECTION 7.11. Liability of Agent. The Agent shall not have any liabilities
or responsibilities to the Borrowers, the Guarantors or any of them on account
of the failure of any Bank to perform its obligations hereunder or to any Bank
on account of the failure of the Borrowers, the Guarantors or any of them to
perform their or its obligations hereunder or under any other Loan Document.
SECTION 7.12. Transfer of Agency Function. Without the consent of the
Borrowers, the Guarantors or any Bank, the Agent may at any time or from time to
time transfer its functions as Agent hereunder to any of its offices wherever
located, provided that the Agent shall promptly notify the Borrowers, the
Guarantors and the Banks thereof.
SECTION 7.13. Withholding Taxes. Each Bank represents that it is entitled
to receive any payments to be made to it hereunder without the withholding of
any tax and will furnish to the Agent such forms, certifications, statements and
other documents as the Agent may request from time to time to evidence such
Bank's exemption from the withholding of any tax imposed by any jurisdiction or
to enable the Agent to comply with any applicable laws or regulations relating
thereto. Without limiting the effect of the foregoing, if any Bank is not
created or organized under the laws of the United States of America or any state
thereof, in the event that the payment of interest by either Borrower is treated
for U.S. income tax purposes as derived in whole or in part from sources from
within the U.S., such Bank will furnish to the Agent Form 4224 or Form 1001 of
the Internal Revenue Service, or such other forms, certifications, statements or
documents, duly executed and completed by such Bank as evidence of such Bank's
exemption from the withholding of U.S. tax with respect thereto. The Agent shall
not be obligated to make any payments hereunder to such Bank in respect of any
Loan until such Bank shall have furnished to the Agent the requested form,
certification, statement or document.
SECTION 7.14. Several Obligations and Rights of Banks. The failure of any
Bank to make any Loan to be made by it on the date specified therefor shall not
relieve any other Bank of its obligation to make its Loan on such date, but no
Bank shall be responsible for the failure of any other Bank to make a Loan to be
made by such other Bank.
SECTION 7.15. Pro Rata Treatment of Loans, Etc. Except to the extent
otherwise provided, each prepayment and payment of principal of or interest on
Loans of a particular type and a particular Interest Period shall be made to the
Agent for the account of the Banks holding Loans of such type and Interest
Period pro rata in accordance with the respective unpaid principal amounts of
such Loans of such Interest Period held by such Banks.
SECTION 7.16. Sharing of Payments Among Banks. If a Bank shall obtain
payment of any principal of or interest on any Loan made by it through the
exercise of any right of setoff, banker's lien, counterclaim, or by any other
means, it shall share such payment with the other Banks and the amount of such
payment shall be applied to reduce the Loans of all the Banks pro rata in
accordance with the unpaid principal on the Loans held by each of them, and make
such other adjustments from time to time as shall be equitable to the end that
all the Banks shall share the benefit of such payment (net of any expenses which
may be incurred by such Bank in obtaining or preserving such benefit) pro rata
in accordance with the unpaid principal and interest on the Loans held by each
of them. To such end the Banks shall make appropriate adjustments among
themselves if such payment is rescinded or must otherwise be restored. The
Borrowers agree that any Bank so purchasing a participation (or direct interest)
in the loans made by the other Banks may exercise all rights of set off,
banker's lien, counterclaim or similar rights with respect to such participation
(or direct interest). Nothing contained herein shall require any Bank to
exercise any such right or shall affect the right of any Bank to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness of the Borrowers. Notwithstanding the foregoing or any other
provision of this Agreement, no right or remedy of any Bank relating to any
assets of the Borrowers (including real property, improvements or fixtures) not
covered by this Agreement or the Loan Documents shall in any way be affected by
this Agreement or otherwise with respect to any other indebtedness of the
Borrowers to any of the Banks.
SECTION 7.17. Nonreceipt of Funds by Agent. Unless the Agent shall have
received notice from a Bank prior to the date on which such Bank is to provide
funds to the Agent for a Loan to be made by such Bank that such Bank will not
make available to the Agent such funds, the Agent may assume that such Bank has
made such funds available to the Agent on the date of such Loan, and the Agent
in its sole discretion may, but shall not be obligated to, in reliance upon such
assumption, make available to the Borrowers on such date a corresponding amount.
If and to the extent that such Bank shall not have so made such funds available
to the Agent, such Bank agrees to repay to the Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrowers until the date such amount is
repaid to the Agent, at the customary rate set by the Agent for the correction
of errors among banks for three Business Days and thereafter at the Prime Rate.
If such Bank shall repay to the Agent such corresponding amount, such amount so
repaid shall constitute such Bank's Loan for purposes of this Agreement. If such
Bank does not pay such corresponding amount forthwith upon Agent's demand
therefor, the Agent shall promptly notify the affected Borrower, and such
Borrower shall immediately pay such corresponding amount to the Agent with
interest thereon, for each day from the date such amount is made available to
such Borrower until the date such amount is repaid to the Agent, at the rate of
interest applicable at the time to such proposed Loan.
Unless the Agent shall have received notice from a Borrower prior to the
date on which any payment is due to the Banks hereunder that such Borrower will
not make such payment in full, the Agent may assume that such Borrower has made
such payment in full to the Agent on such date and the Agent in its sole
discretion may, but shall not be obligated to, in reliance upon such assumption,
cause to be distributed to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent such Borrower shall repay to the
Agent forthwith on demand such amount distributed to such Bank together with
interest thereon, for each day from the date such amount is distributed to such
Bank until the date such Bank repays such amount to the Agent, at the customary
rate set by the Agent for the correction of errors among banks for three
Business Days and thereafter at the Prime Rate.
- 7 -
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Amendments. Etc. Except as otherwise expressly provided in
this Agreement, any provision of this Agreement may be amended or modified only
by an instrument in writing signed by the Borrowers, the Guarantors, the Agent
and the Required Banks, and any provision of this Agreement may be waived by the
Borrowers (if such provision requires performance by the Agent or the Banks) or
by the Agent acting with the consent of the Required Banks (if such provision
requires performance by the Borrowers); provided that no amendment, modification
or waiver shall, unless by an instrument signed by all of the Banks or by the
Agent acting with the consent of all of the Banks: (a) increase or extend the
term of the Commitment or the Loans, (b) extend the date fixed for the payment
of principal of or interest on any Loan, (c) reduce the amount of any payment of
principal thereof or the rate at which interest is payable thereon or any fee
payable hereunder, (d) alter the terms of this Section 8.01, (e) amend the
definition of the term "Required Banks", (f) change the fees payable to any Bank
except as otherwise provided herein, (g) permit a Borrower to transfer or assign
any of its obligations hereunder or under the Loan Documents, (h) amend the
provisions of Article 7 hereof, (i) give any payment priority to any Person
(including any of the Banks) over amounts due in connection with the Loans or
the Letters of Credit, or (j) release any Collateral (other than as permitted by
the Security Agreement). No failure on the part of the Agent or any Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof or preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 8.02. Notices, Etc. All notices and other communications
provided for hereunder shall be in writing (including telegraphic communication)
and mailed via certified mail, telegraphed, sent by overnight mail delivery
service, sent by facsimile or delivered, if to Xxxxxx or any Guarantor, at the
address of Xxxxxx or Guarantor, as the case may be, set forth at the beginning
of this Agreement with a copy to Xxxxx Xxxx, Esq., Ruskin, Moscou, Xxxxx &
Faltischek, P.C., 000 Xxx Xxxxxxx Xxxx, Xxxxxxx, Xxx Xxxx 00000 and if to the
Agent or any Bank, at the address of the Agent or such Bank set forth at the
beginning of this Agreement to the attention of Xxxxxx International Corp.
Account Officer, or, as to each party, at such other address as shall be
designated by such party in a written notice complying as to delivery with the
terms of this Section 8.02 to the other parties. All such notices and
communications shall be effective when mailed, telegraphed or delivered, except
that notices to the Bank shall not be effective until received by the Bank.
SECTION 8.03. No Waiver, Remedies. No failure on the part of the Agent or
any Bank to exercise, and no delay in exercising, any right, power or remedy
under any Loan Document, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right. The remedies
provided in the Loan Documents are cumulative and not exclusive of any remedies
provided by law.
SECTION 8.04. Costs, Expenses and Taxes. The Borrowers agree to pay on
demand all costs and expenses of the Agent in connection with the preparation,
execution, delivery and administration of this Agreement, the Notes, the Letters
of Credit and any other Loan Documents, including, without limitation, the
reasonable fees and expenses of counsel for the Agent with respect thereto and
with respect to advising the Banks as to their respective rights and
responsibilities under this Agreement, and all costs and expenses, if any
(including reasonable counsel fees and expenses), in connection with the
enforcement of this Agreement, the Notes, the Letters of Credit and any other
Loan Documents. The Borrowers shall at all times protect, indemnify, defend and
save harmless the Agent and the Banks from and against any and all claims,
actions, suits and other legal proceedings, and liabilities, obligations,
losses, damages, penalties, judgments, costs, expenses or disbursements which
the Agent or the Banks may, at any time, sustain or incur by reason of or in
consequence of or arising out of the execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby. The Borrowers
acknowledge that it is the intention of the parties hereto that this Agreement
shall be construed and applied to protect and indemnify the Agent and the Banks
against any and all risks involved in the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby, all of
which risks are hereby assumed by the Borrowers, including, without limitation,
any and all risks of the acts or omissions, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority,
provided that the Borrowers shall not be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent or any Bank's gross
negligence or willful misconduct. The provisions of this Section 8.04 shall
survive the payment of the Notes and the termination of this Agreement.
SECTION 8.05. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the declaration of the making of
the Notes due and payable pursuant to the provisions of Section 6.02, the Banks
each are hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by the Banks to or for the credit or the account
of either Borrower or any Guarantor against any and all of the obligations of
the Borrowers or any Guarantor now or hereafter existing under this Agreement
and the Notes, irrespective of whether or not the Agent or the Banks shall have
made any demand under this Agreement or the Notes and although such obligations
may be unmatured. The rights of the Banks under this Section are in addition to
all other rights and remedies (including, without limitation, other rights of
set-off) which the Agent and the Banks may have.
SECTION 8.06. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrowers, the Guarantors, the Agent and the
Banks.
SECTION 8.07. Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that neither Borrower may not assign
or otherwise transfer any of its rights under this Agreement without the prior
written consent of all Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its Commitment or
any or all of its Loans. In the event of any such grant by a Bank of a
participating interest to a Participant, whether or not upon notice to the
Borrower and the Agent, such Bank shall remain responsible for the performance
of its obligations hereunder, and the Borrowers and the Agent shall continue to
deal solely and directly with such Bank in connection with such Bank's rights
and obligations under this Agreement. Any agreement pursuant to which any Bank
may grant such a participating interest shall provide that such Bank shall
retain the sole right and responsibility to enforce the obligations of the
Borrowers hereunder including, without limitation, the right to approve any
amendment, modification or waiver of any provision of this Agreement; provided
that such participation agreement may provide that such Bank will not agree to
any modification, amendment or waiver of this Agreement described in clauses (a)
through (i) of Section 8.01 without the consent of the Participant. The
Borrowers agrees that each Participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of this Article VIII with
respect to its participating interest. An assignment or other transfer which is
not permitted by subsection (c) or (d) below shall be given effect for purposes
of this Agreement only to the extent of a participating interest granted in
accordance with this subsection (b).
(c) (i) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or a proportionate part (equivalent to an
initial Commitment of not less than $5,000,000) of all, of its rights and
obligations under this Agreement and the Notes, and such Assignee shall assume
such rights and obligations, pursuant to an Assignment and Assumption Agreement
in substantially the form of Exhibit E hereto executed by such Assignee and such
transferor Bank, with, so long as no Default or Event of Default has occurred
and is continuing, (and subject to) the subscribed consent of the Borrowers,
which shall not be unreasonably withheld, and the Agent; provided that if an
Assignee is an affiliate of such transferor Bank, no such consent shall be
required. Upon execution and delivery of such instrument and payment by such
Assignee to such transferor Bank of an amount equal to the purchase price agreed
between such transferor bank and such Assignee, such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations of a Bank
with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party shall be
required.
(ii) Upon the consummation of any assignment pursuant to this subsection
(c), the transferor Bank, the Agent and the Borrowers shall make appropriate
arrangements so that, if required, a new Note is issued to the Assignee. In
connection with any such assignment, the transferor Bank shall pay to the Agent
an administrative fee for processing such assignment in the amount of $3,500.00.
If the Assignee is not incorporated under the laws of the United States of
America or a state thereof, it shall deliver to the Borrower and the Agent
certification as to exemption from deduction or withholding of any Unites States
federal income taxes in accordance with Section 7.13.
(d) Any Bank may at any time assign all or any portion of its rights under
this Agreement and its Note to a Federal Reserve Bank. No such assignment shall
release the transferor Bank from its obligations hereunder.
SECTION 8.08. Further Assurances. The Borrowers and each Guarantor agree at
any time and from time to time at its expense, upon request of the Agent, the
Banks or their respective counsel, to promptly execute, deliver, or obtain or
cause to be executed, delivered or obtained any and all further instruments and
documents and to take or cause to be taken all such other action the Agent or
any Bank may deem desirable in obtaining the full benefits of this Agreement.
SECTION 8.09. Section Headings, Severability, Entire Agreement. Section and
subsection headings have been inserted herein for convenience only and shall not
be construed as part of this Agreement. Every provision of this Agreement and
each Loan Document is intended to be severable; if any term or provision of this
Agreement, any Loan Document, or any other document delivered in connection
herewith shall be invalid, illegal or unenforceable for any reason whatsoever,
the validity, legality and enforceability of the remaining provisions hereof or
thereof shall not in any way be affected or impaired thereby. All exhibits and
schedules to this Agreement shall be annexed hereto and shall be deemed to be
part of this Agreement. This Agreement and the exhibits and schedules attached
hereto embody the entire Agreement and understanding between the Borrowers, the
Guarantors, the Agent and the Banks and supersede all prior agreements and
understandings relating to the subject matter hereof provided, however, that to
the extent that the provisions of the Commitment Letter are not inconsistent
with the provisions of this Agreement and the other Loan Documents but are
cumulative with respect thereto, such provisions of the Commitment Letter shall
survive the execution and delivery of this Agreement.
SECTION 8.10. Governing Law. This Agreement, the Notes and all other Loan
Documents shall be governed by, and construed in accordance with, the laws of
the State of New York.
SECTION 8.11. Waiver of Jury Trial. The Borrowers, each Guarantor, the
Agent and the Banks waive all rights to trial by jury on any cause of action
directly or indirectly involving the terms, covenants or conditions of this
Agreement or any Loan Document.
SECTION 8.12. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
- 8 -
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BANK OF NEW YORK, as Agent
By:____________________________
Xxxxxx X. Xxxxxx
Vice President
THE BANK OF NEW YORK
By:____________________________
Xxxxxx X. Xxxxxx
Vice President
FLEET BANK, N.A.
By:____________________________
Name:
Title:
MELLON BANK
By:____________________________
Xxxxxx Xxxxx
Senior Vice President
XXXXXX INTERNATIONAL CORP.
By:____________________________
Xxxxxxx Xxxxxxx
Chief Financial Officer
HAPL LEASING CO., INC.
By:____________________________
Xxxxxxx Xxxxxxx
Vice President
PULSE MICROSYSTEMS, LTD.
By:____________________________
Xxxxxxx Xxxxxxx
Vice President
SEWING MACHINE EXCHANGE, INC.
By:____________________________
Xxxxxxx Xxxxxxx
Vice President
- 9 -
SEDECO, INC.
By:____________________________
Xxxxxxx Xxxxxxx
Vice President
XXXXXX EQUIPMENT CONNECTION, INC.
By:
Xxxxxxx Xxxxxxx
Chief Financial Officer
- 10 -
SCHEDULE 1.01
Total Commitments (Xxxxxx) of Each Bank
The Bank of New York - $27,000,000.00
Fleet Bank, N.A. - $21,000,000.00
Mellon Bank, N.A. - $12,000,000.00
Total Commitments (HAPL) of Each Bank
The Bank of New York - $ 4,500,000.00
Fleet Bank, N.A. - $ 3,500,000.00
Mellon Bank, N.A. - $ 2,000,000.00
- 11 -
SCHEDULE 4.01(a)
STATE OF INCORPORATION IDENTITY AND
AND EACH STATE IN WHICH PERCENTAGE OF
SUBSIDIARY'S NAME IT IS QUALIFIED TO DO OWNERSHIP OF
AND ADDRESS BUSINESS EACH SHAREHOLDER
- 12 -
SCHEDULE 4.01 (t)
Nature of Amount of Liens Securing
Creditor Agreement Credit Credit
- 13 -
SCHEDULE 4.01 (v)
FUNDING SOURCES
1. AT&T Capital Leasing Services, Inc.
0 Xxxxxxxx Xxxxx
Xxxx Xxxxxx, XX 00000
2. The CIT Group/Equipment Financing, Inc.
0000 Xxxx Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
3. ORIX Credit Alliance
000 Xxxxx Xxxx Xxxx
Xxxxxxxxxx, XX 00000
4. Execulease Finance Group
The Xxxxxxxxxx Xxxxxxxx
Xxxxxx, XX 00000
5. Finova Capital Corporation
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
6. JLA Credit Corporation 000 X. 000xx Xxxxxx Xxxxxxxx, XX 00000
7. Norwest Financial Leasing, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000X
Xxxxxxxxx, XX 00000
- 14 -
SCHEDULE 5.02(a)
Creditor Amount Property Subject to Lien
- 15 -
SCHEDULE 5.02(b)
Creditor Amount
- 16 -
SCHEDULE 5.02(i)
Description of All Guaranties:
- 17 -
EXHIBIT A
REVOLVING CREDIT NOTE (XXXXXX)
$_________________ Garden City, New York
__________, 199_
FOR VALUE RECEIVED, on the Maturity Date, XXXXXX INTERNATIONAL CORP., a
Delaware corporation, having its principal place of business at 000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Borrower"), promises to pay to the order
of __________________ ("Bank") at the office of The Bank of New York, as Agent,
located at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, the principal sum of
the lesser of: (a) ________________ ($___________) DOLLARS; or (b) the aggregate
unpaid principal amount of all Revolving Credit Loans made by Bank to Borrower
pursuant to the Agreement (as defined below). Borrower shall pay interest on the
unpaid principal balance of this Note from time to time outstanding, at said
office, at the rates of interest, at the times and for the periods set forth in
the Agreement. All payments including prepayments on this Note shall be made in
lawful money of the United States of America in immediately available funds.
Except as otherwise provided in the Agreement, if a payment becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day, and interest shall be payable
thereon at the rate herein specified during such extension. Borrower hereby
authorizes Bank to enter from time to time the amount of each Loan to Borrower
and the amount of each payment on a Loan on the schedule annexed hereto and made
a part hereof. Failure of Bank to record such information on such schedule shall
not in any way effect the obligation of Borrower to pay any amount due under
this Note. This Note is one of the Revolving Credit Notes (Xxxxxx) referred to
in that certain First Amendment to Loan Agreement among Borrower, certain
Guarantors, The Bank of New York, as Agent, The Bank of New York, Fleet Bank,
N.A. and Mellon Bank, N.A. of even date herewith (the "Agreement"), as such
Agreement may be amended from time to time, and is subject to prepayment and its
maturity is subject to acceleration upon the terms contained in said Agreement.
All capitalized terms used in this Note and not defined herein shall have the
meanings given them in the Agreement. If any action or proceeding be commenced
to collect this Note or enforce any of its provisions, Borrower further agrees
to pay all costs and expenses of such action or proceeding and attorneys' fees
and expenses and further expressly waives any and every right to interpose any
counterclaim in any such action or proceeding. Borrower hereby submits to the
jurisdiction of the Supreme Court of the State of New York and agrees with Bank
that personal jurisdiction over Borrower shall rest with the Supreme Court of
the State of New York for purposes of any action on or related to this Note, the
liabilities, or the enforcement of either or all of the same. Borrower hereby
waives personal service by manual delivery and agrees that service of process
may be made by post-paid certified mail directed to the Borrower at the
Borrower's address set forth above or at such other address as may be designated
in writing by the Borrower to Bank in accordance with Section 8.02 of the
Agreement, and that upon mailing of such process such service be effective with
the same effect as though personally served. Borrower hereby expressly waives
any and every right to a trial by jury in any action on or related to this Note,
the liabilities or the enforcement of either or all of the same. Subject to the
provisions of the Agreement, Bank may transfer this Note and may deliver the
security or any part thereof to the transferee or transferees, who shall
thereupon become vested with all the powers and rights above given to Bank in
respect thereto, and Bank shall thereafter be forever relieved and fully
discharged from any liability or responsibility in the matter. The failure of
any holder of this Note to insist upon strict performance of each and/or all of
the terms and conditions hereof shall not be construed or deemed to be a waiver
of any such term or condition. Borrower and all endorsers and guarantors hereof
waive presentment and demand for payment, notice of non-payment, protest, and
notice of protest. This Note shall be construed in accordance with and governed
by the laws of the State of New York. XXXXXX INTERNATIONAL CORP.
By:
Xxxxxxx Xxxxxxx
Chief Financial Officer
- 18 -
Schedule of Revolving Credit Loans
Amount of
Principal Unpaid Name of
Making Amount of Type of Paid or Principal Person
Date Loan Loan Prepaid Balance Notation Making
- 19 -
EXHIBIT B
REVOLVING CREDIT NOTE (HAPL)
$_______________ Garden City, New York
__________, 199_
FOR VALUE RECEIVED, on the Maturity Date, HAPL LEASING CO., INC., a New
York corporation, having its principal place of business at 000 Xxxxxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 ("Borrower"), promises to pay to the order
of __________________ ("Bank") at the office of The Bank of New York, as Agent,
located at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000, the principal sum of
the lesser of: (a) ________________ ($___________) DOLLARS; or (b) the aggregate
unpaid principal amount of all Revolving Credit Loans (HAPL) made by Bank to
Borrower pursuant to the Agreement (as defined below). Borrower shall pay
interest on the unpaid principal balance of this Note from time to time
outstanding, at said office, at the rates of interest, at the times and for the
periods set forth in the Agreement. All payments including prepayments on this
Note shall be made in lawful money of the United States of America in
immediately available funds. Except as otherwise provided in the Agreement, if a
payment becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day, and interest
shall be payable thereon at the rate herein specified during such extension.
Borrower hereby authorizes Bank to enter from time to time the amount of each
Loan to Borrower and the amount of each payment on a Loan on the schedule
annexed hereto and made a part hereof. Failure of Bank to record such
information on such schedule shall not in any way effect the obligation of
Borrower to pay any amount due under this Note. This Note is one of the
Revolving Credit Notes (HAPL) referred to in that certain First Amendment to
Loan Agreement among Borrower, certain Guarantors, The Bank of New York, as
Agent, The Bank of New York, Fleet Bank, N.A. and Mellon Bank, N.A. of even date
herewith (the "Agreement"), as such Agreement may be amended from time to time,
and is subject to prepayment and its maturity is subject to acceleration upon
the terms contained in said Agreement. All capitalized terms used in this Note
and not defined herein shall have the meanings given them in the Agreement. If
any action or proceeding be commenced to collect this Note or enforce any of its
provisions, Borrower further agrees to pay all costs and expenses of such action
or proceeding and attorneys' fees and expenses and further expressly waives any
and every right to interpose any counterclaim in any such action or proceeding.
Borrower hereby submits to the jurisdiction of the Supreme Court of the State of
New York and agrees with Bank that personal jurisdiction over Borrower shall
rest with the Supreme Court of the State of New York for purposes of any action
on or related to this Note, the liabilities, or the enforcement of either or all
of the same. Borrower hereby waives personal service by manual delivery and
agrees that service of process may be made by post-paid certified mail directed
to the Borrower at the Borrower's address set forth above or at such other
address as may be designated in writing by the Borrower to Bank in accordance
with Section 8.02 of the Agreement, and that upon mailing of such process such
service be effective with the same effect as though personally served. Borrower
hereby expressly waives any and every right to a trial by jury in any action on
or related to this Note, the liabilities or the enforcement of either or all of
the same. Subject to the provisions of the Agreement, Bank may transfer this
Note and may deliver the security or any part thereof to the transferee or
transferees, who shall thereupon become vested with all the powers and rights
above given to Bank in respect thereto, and Bank shall thereafter be forever
relieved and fully discharged from any liability or responsibility in the
matter. The failure of any holder of this Note to insist upon strict performance
of each and/or all of the terms and conditions hereof shall not be construed or
deemed to be a waiver of any such term or condition. Borrower and all endorsers
and guarantors hereof waive presentment and demand for payment, notice of
non-payment, protest, and notice of protest. This Note shall be construed in
accordance with and governed by the laws of the State of New York. HAPL LEASING
CO., INC.
By: Xxxxxxx Xxxxxxx
-----------------------
Vice President
- 20 -
Schedule of Revolving Credit Loans (HAPL)
Amount of
Principal Unpaid Name of
Making Amount of Type of Paid or Principal Person Making
Date Loan Loan Prepaid Balance Notation
- 00 -
XXXXXXX X
XXXX XXXX XXXX
Xxxxxx Xxxx, Xxx Xxxx
$_______________ _____________, 199_
FOR VALUE RECEIVED, XXXXXX INTERNATIONAL CORP., a Delaware corporation,
having its principal place of business at 000 Xxxxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxx
Xxxx 00000 ("Borrower") promises to pay to the order of _____________ ("Bank")
at the office of The Bank of New York, as Agent, located at 000 Xxxxx Xxxxxx
Xxxx, Xxxxxxxx, Xxx Xxxx 00000, the principal sum of _____________
($___________) DOLLARS in twelve (12) quarterly principal installments, each of
the first eleven (11) such installments being in the principal amount of
$_____________, commencing on the first Term Loan Installment Date after the
date hereof and continuing on each Term Loan Installment Date thereafter until
the twelfth (12th) Term Loan Installment Date, when any remaining principal
amount shall be due and payable. Borrower shall pay interest on the unpaid
balance of this Note from time to time outstanding at said office, at the rates
of interest, at the times and for the periods as set forth in the Agreement (as
defined below). All payments including prepayments on this Term Loan Note shall
be made in lawful money of the United States of America in immediately available
funds. Except as otherwise provided in the Agreement, if a payment becomes due
and payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day, and interest shall be payable
thereon at the rate herein specified during such extension. This Term Loan Note
is one of the Term Loan Notes referred to in that certain First Amendment to
Loan Agreement among Borrower, certain Guarantors, The Bank of New York, as
Agent, The Bank of New York Fleet Bank, N.A. and Mellon Bank, N.A. dated as of
September 26, 1997 (the "Agreement"), as such Agreement may be amended from time
to time, and is subject to prepayment and its maturity is subject to
acceleration upon the terms contained in said Agreement. All capitalized terms
used in this Term Loan Note and not defined herein shall have the meanings given
them in the Agreement. If any action or proceeding be commenced to collect this
Term Loan Note or enforce any of its provisions, Borrower further agrees to pay
all costs and expenses of such action or proceeding and attorneys' fees and
expenses and further expressly waives any and every right to interpose any
counterclaim in any such action or proceeding. Borrower hereby submits to the
jurisdiction of the Supreme Court of the State of New York and agrees with Bank
that personal jurisdiction over Borrower shall rest with the Supreme Court of
the State of New York for purposes of any action on or related to this Term Loan
Note, the liabilities, or the enforcement of either or all of the same. Borrower
hereby waives personal service by manual delivery and agrees that service of
process may be made by post-paid certified mail directed to Borrower at
Borrower's address designated in the Agreement or at such other address as may
be designated in writing by Borrower to Bank in accordance with Section 7.02 of
the Agreement, and that upon mailing of such process such service be effective
with the same effect as though personally served. Borrower hereby expressly
waives any and every right to a trial by jury in any action on or related to
this Term Loan Note, the liabilities or the enforcement of either or all of the
same. Subject to the provisions of the Agreement, Bank may transfer this Term
Loan Note and may deliver the security or any part thereof to the transferee or
transferees, who shall thereupon become vested with all the powers and rights
above given to Bank in respect thereto, and Bank shall thereafter be forever
relieved and fully discharged from any liability or responsibility in the
matter. The failure of any holder of this Term Loan Note to insist upon strict
performance of each and/or all of the terms and conditions hereof shall not be
construed or deemed to be a waiver of any such term or condition. Borrower and
all endorsers and Guarantors hereof waive presentment and demand for payment,
notice of non-payment, protest, and notice of protest. This Term Loan Note shall
be construed in accordance with and governed by the laws of the State of New
York.
XXXXXX INTERNATIONAL CORP.
By:___________________________
Xxxxxxx Xxxxxxx
Chief Financial Officer
- 22 -
EXHIBIT D
BORROWING BASE CERTIFICATE
Date: __________________, 199__
The Bank of New York, as Agent
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Att:____________________
Fleet Bank, N.A.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Att:____________________
Mellon Bank, N.A.
___ XXX Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Att:____________________
The Bank of New York
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Att:____________________
Gentlemen:
As required in Section 5.01(m) of our loan agreement, we hereby furnish the
following Borrowing Base information as of :
Total Balance of all Leases Outstanding: X,XXX,XXX.XX
Less Leases to be sold on a recourse basis: (XXX,XXX.XX)
Total Leases to be sold on a non-recourse basis X,XXX,XXX.XX
SCHEDULE OF ALL NON-RECOURSE LEASES
Lease Lease Principal
Number Name Outstanding
123 ABC Co. XXX.XX
124 XYZ Co. X,XXX,XXX.XX
Total Principal Outstanding X,XXX,XXX.XX
Less Residual Receivables (XXX,XXX.XX)
Less Intercompany Leases XX,XXX.XX)
Less Leases at least 60 days past due ( XX,XXX.XX)
Less Leases where lessee isat least
60 days past due on other obligation
to HAPL ( XX,XXX.XX)
Less Leases to lessees which are not located
in the United States or Canada ( XX,XXX.XX)
Less Leases repurchased by HAPL from
any Funding Source ( XX,XXX.XX)
Less Leases to US and State governments
or agencies XX,XXX.XX
Total Eligible Leases X,XXX,XXX.XX
Advance Rate (85%)
Total Availability X,XXX,XXX.XX
Total Outstanding X,XXX,XXX.XX
Attached hereto is a schedule of all leases which have one or more payments
past due.
I hereby certify the above information to be true and accurate. I further
certify that all leases that have been sold are not included in the above list
of leases and, therefore, have not been included in the eligible leases for
calculating the Borrowing Base. I further certify that any lease for which a
payment is more than 60 days past due is properly reflected as ineligible.
HAPL LEASING CO., INC.
By:_________________________
Chief Financial Officer
- 23 -
EXHIBIT E
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") dated as of
__________________ among ___________________ (the "Assignor"), ________________,
(the "Assignee") and THE BANK OF NEW YORK, as Agent (the "Agent").
WITNESSETH
WHEREAS, this Assignment and Assumption Agreement (the "Assignment")
relates to the First Amendment to Loan Agreement dated September 26, 1997 among
the Borrowers, the Guarantors, the Assignor as a Bank and the Agent (the
"Agreement");
WHEREAS, as provided under the Agreement, the Assignor has heretofore made
Loans to the Borrowers.
WHEREAS, the Assignor proposes to assign to the Assignee all of the rights
of the Assignor under the Agreement in respect of all or a portion of its Total
Commitment and the Assignee proposes to accept assignment of such rights and
assume the corresponding obligations from the Assignor on such terms;
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined herein
shall have the respective meanings set forth in the Agreement.
SECTION 2. Assignment. The Assignor hereby sells and assigns to the
Assignee, without recourse, and the Assignee hereby purchases and assumes from
the Assignor, a ____% interest in and to all of the Assignor's rights and
obligations as a Bank under the Agreement as of the Effective Date (as defined
below) including, without limitation, such percentage interest in (w) the
Assignor's Total Commitment, (x) the Revolving Credit Loans (Xxxxxx) and
Revolving Credit Loans (HAPL) owing to Assignor outstanding on the Effective
Date, (y) the Revolving Credit Note (Xxxxxx) and the Revolving Credit Note
(HAPL) held by the Assignor under the Agreement together with all related unpaid
interest accrued from the Effective Date, and (z) the Assignor's participation
in Letters of Credit, drawings thereunder, unmatured drafts accepted and
deferred payment obligations incurred under Letters of Credit ("Letter of Credit
Exposure").
SECTION 3. Assignor Representations. The Assignor (i) represents and
warrants that as of the date hereof, (w) its Total Commitment (unreduced by any
assignments thereof which have not yet become effective) is $_____________, (x)
the outstanding balance of its Revolving Credit Loans (Xxxxxx) (unreduced by any
assignments thereof which have not yet become effective) is $___________, (y)
the outstanding balance of its Revolving Credit Loans (HAPL) (unreduced by any
assignments thereof which have not yet become effective) is $___________, and
(z) its Letter of Credit Exposure (unreduced by any assignments which have not
yet become effective) is $__________; (ii) makes no representation or warranty
and assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or any other Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto, other than that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
solvency or financial condition of the Borrowers or the Guarantors, or the
performance or observance by the Borrowers or the Guarantors of any of their
obligations under the Agreement, any other Loan Document or any other instrument
or document furnished pursuant thereto; and (iv) confirms that its Revolving
Credit Note (Xxxxxx) shall be exchanged as of the Effective Date for (a) a
Revolving Credit Note (Xxxxxx), dated the Effective Date, to be delivered to the
Assignee, in an aggregate principal amount of $__________, (b) a Revolving
Credit Note (Xxxxxx), dated the Effective Date, to be delivered to the Assignor,
in an aggregate principal amount of $__________, (v) confirms that its Revolving
Credit Note (HAPL) shall be exchanged as of the Effective Date for (a) a
Revolving Credit Note (HAPL), dated the Effective Date, to be delivered to the
Assignee, in an aggregate principal amount of $__________, (b) a Revolving
Credit Note (HAPL), dated the Effective Date, to be delivered to the Assignor,
in an aggregate principal amount of $__________.
SECTION 4. Assignee Representations. The Assignee (i) represents and
warrants that it is legally authorized to enter into this Assignment and
Assumption Agreement; (ii) confirms that it has received copies of the Agreement
and the Loan Documents, together with copies of such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (iii) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying as to
the Assignee's status for purposes of determining exemption from United States
withholding taxes with respect to all payments to be made to the Assignee under
the Agreement and the Notes or such other documents as are necessary to indicate
that all such payments are subject to such rates at a rate reduced by an
applicable tax treaty; (iv) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Bank 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 the Agreement
and the Loan Documents; and (v) agrees that it will perform in accordance with
their terms all the obligations which by the terms of the Agreement are required
to be performed by it as a Bank.
SECTION 5. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in federal funds an amount equal to the outstanding principal of the
Revolving Credit Loans assigned hereunder, with accrued but unpaid interest
thereon from the Effective Date to the date hereof. Each of the Assignor and the
Assignee hereby agree that if either of them receives any amount under the
Agreement or any other Loan Document which is for the account of the other, it
shall receive the same for the account of such other party to the extent of such
other party's interest herein and shall promptly pay the same to the Agent on
behalf of such other party.
SECTION 6. Effectiveness. Subject to the remaining provisions of this
Section 6, the effective date for this Assignment and Assumption Agreement shall
be ___________, 19__ (the "Effective Date"). Following the execution of this
Assignment and Assumption Agreement, it will be delivered by the Assignor to the
Agent for acknowledgment and recording by the Agent. The Assignee agrees to pay
to the Agent, on or prior to the Effective Date, the $3,500.00 assignment fee
required by Section 8.07 of the Agreement. This Assignment and Assumption
Agreement shall become effective, as of the Effective Date, upon (i) its
execution by the Agent and (ii) if required by Section 8.07 of the Agreement,
the consent of the Borrowers.
SECTION 7. Effect of Assignment. On and after the Effective Date, (i) the
Assignee shall be a party to the Agreement and the other Loan Documents to which
each Bank is a party and, to the extent provided in this Assignment and
Assumption Agreement, shall have the rights and obligations of a Bank and (ii)
the Assignor shall, to the extent provided in this Assignment and Assumption
Agreement, relinquish its rights and be released from its obligations under the
Agreement and the other Loan Documents to which it is a party.
SECTION 8. Payments. From and after the Effective Date, the Agent shall
make all payments in respect of the interest assigned hereby (including payments
of principal, interest and other amounts) to the Assignee.
SECTION 9. Governing Law. This Assignment and Assumption Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
SECTION 10. Counterparts. This Assignment and Assumption Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their duly authorized officers as of the date first above
written.
[ASSIGNOR]
By:_____________________
Name:
Title:
[ASSIGNEE]
By:_____________________
Name:
Title:
THE BANK OF NEW YORK, as Agent
By:____________________
Name:
Title:
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CONSENT OF BORROWERS
Xxxxxx International Corp. and HAPL Leasing Co., Inc., the Borrowers under
that certain First Amendment to Loan Agreement dated as of September 26, 1997
among Xxxxxx International Corp., HAPL Leasing Co., Inc., Sewing Machine
Exchange, Inc., Pulse Microsystems Ltd., Sedeco, Inc., The Bank of New York, as
Agent and The Bank of New York, Fleet Bank, N.A. and Mellon Bank, N.A. as
lending banks, as amended or supplemented from time to time (the "Agreement")
each hereby consent to the attached Assignment and Assumption Agreement and the
transactions contemplated thereby.
Date:_______________ XXXXXX INTERNATIONAL CORP.
By:_____________________
Name:
Title:
Date:_______________ HAPL LEASING CO., INC.
By:_____________________ Name:
Title:
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4. Letters of Credit. Each of the parties to this Amendment agree that all
Letters of Credit issued and outstanding under the Agreement, as in effect
before this Amendment, shall be deemed to have been issued and be deemed
outstanding under the Agreement as amended hereby and all rights and obligations
of Xxxxxx, any Guarantor, the Agent, the Issuing Bank and the Banks shall be
governed by the Agreement, as amended by this Agreement.
5. Additional Parties. By its execution of this Amendment, (i) Equipment
agrees to become a Guarantor (as defined in the Agreement) and a party to the
Agreement and (ii) Mellon agrees to become one of the Banks (as defined in the
Agreement) and a party to the Agreement.
6. Revolving Credit Notes (Xxxxxx). The Revolving Credit Notes (Xxxxxx) to
be executed and delivered by Xxxxxx on the date hereof shall replace and
supercede the Revolving Credit Notes executed and delivered by Xxxxxx on January
7, 1997.
7. Effectiveness. This Amendment shall become effective upon the occurrence
of the following events and the receipt and satisfactory review by the Agent and
the Banks of the following documents:
(a) The Agent and each Bank shall have received this Amendment, duly
executed by Xxxxxx, HAPL and each other Guarantor.
(b) The Agent's counsel shall have been paid their fees and disbursements
in connection with this Amendment.
8. Governing Law. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
9. Counterparts. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
10. Ratification. Except as hereby amended, the Agreement and all other
Loan Documents executed in connection therewith shall remain in full force and
effect in accordance with their originally stated terms and conditions. The
Agreement and all other Loan Documents executed in connection therewith, as
amended hereby, are in all respects ratified and confirmed.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the year and date first above written.
THE BANK OF NEW YORK, as Agent
By:____________________________
Xxxxxx X. Xxxxxx
Vice President
THE BANK OF NEW YORK
By:____________________________
Xxxxxx X. Xxxxxx
Vice President
FLEET BANK, N.A.
By:____________________________
Name:
Title:
MELLON BANK, N.A.
By:____________________________
Xxxxxx Xxxxx
Senior Vice President
XXXXXX INTERNATIONAL CORP.
By:____________________________
Xxxxxxx Xxxxxxx
Chief Financial Officer
HAPL LEASING CO., INC.
By:____________________________
Xxxxxxx Xxxxxxx
Vice President
PULSE MICROSYSTEMS, LTD.
By:____________________________
Xxxxxxx Xxxxxxx
Vice President
SEWING MACHINE EXCHANGE, INC.
By:____________________________
Xxxxxxx Xxxxxxx
Vice President
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SEDECO, INC.
By:____________________________
Xxxxxxx Xxxxxxx
Vice President
XXXXXX EQUIPMENT CONNECTION, INC.
By:
Xxxxxxx Xxxxxxx
Chief Financial Officer
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