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EXHIBIT 10(d)
REVOLVING CREDIT AGREEMENT
Dated as of April 17, 1996
and amended and restated
as of August 28, 1997
among
CML GROUP, INC.,
NORDICTRACK, INC., NORDIC ADVANTAGE, INC.
AND XXXXX & XXXXXX, LTD.
AS BORROWERS
BANKBOSTON, N.A.
(F/K/A THE FIRST NATIONAL BANK OF BOSTON)
AND THE OTHER LENDING INSTITUTIONS LISTED ON SCHEDULE 1 HERETO
AS LENDERS
and
BANKBOSTON, N.A.
(F/K/A THE FIRST NATIONAL BANK OF BOSTON),
AS ADMINISTRATIVE AGENT
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION. ..............................2
1.1. Definitions. .................................................2
1.2. Rules of Interpretation. .....................................24
2. THE REVOLVING CREDIT FACILITIES. ......................................25
2.1. Commitment to Lend. ..........................................25
2.1.1. Commitment to Lend NordicTrack Loans. ...............25
2.1.2. Intentionally Omitted. ..............................25
2.1.3. Commitment to Lend S&H Loans. .......................25
2.1.4. Intentionally Omitted. ..............................26
2.1.5. Overadvance Facility..................................26
2.2. Commitment Fee. ..............................................27
2.3. Reallocation and Reduction of Total Commitment. ..............27
2.3.1. Reallocation of Total Commitment. ...................27
2.3.2. Reduction of Sub-Commitment. ........................28
2.3.3. Mandatory Reduction of Total Commitment. ............28
2.4. The Notes. ...................................................29
2.4.1. The NordicTrack Notes. ..............................29
2.4.2. Intentionally Omitted. ..............................29
2.4.3. The S&H Notes. ......................................29
2.4.4. Intentionally Omitted. ..............................30
2.5. Interest on Loans. ...........................................30
2.6. Requests for Loans. ..........................................30
2.6.1. Loan Requests. ......................................30
2.6.2. Daily Borrowings. ...................................31
2.7. Conversion Options. ..........................................31
2.7.1. Conversion to Different Type of Loan. ...............31
2.7.2. Continuation of Type of Loan. .......................32
2.7.3. Eurodollar Rate Loans. ..............................32
2.8. Settlement; Failure to Make Funds Available. .................33
2.8.1. Settlement and Funding Procedures. ..................33
2.8.2. Advances by Administrative Agent. ...................33
2.8.3. Failure to Make Funds Available. ....................34
2.9. Change in Borrowing Bases. ...................................34
3. REPAYMENT OF THE LOANS. ...............................................35
3.1. Maturity. ....................................................35
3.2. Mandatory Repayments of Loans. ...............................35
3.2.1. NordicTrack Loans. ..................................35
3.2.2. Intentionally Omitted. ..............................35
3.2.3. S&H Loans. ..........................................35
3.2.4. Intentionally Omitted. ..............................36
3.2.5. Annual Clean-up. ....................................36
3.3. Depository Arrangements. .....................................36
3.3.1. The Borrowers' Depository Arrangements. .............36
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3.3.2. CML's Depository Arrangements. ......................38
3.3.3. The Other Guarantors' Depository Arrangements. ......39
3.3.4. Fees and Expenses; Application of Payment. ..........40
3.4. Optional Repayments of Loans. ................................41
4. LETTERS OF CREDIT. ....................................................41
4.1. Letter of Credit Commitments...................................41
4.1.1. Commitment to Issue Letters of Credit. ..............41
4.1.2. Letter of Credit Applications. ......................42
4.1.3. Terms of Letters of Credit. .........................42
4.1.4. Reimbursement Obligations of Lenders. ...............42
4.1.5. Participations of Lenders. ..........................43
4.2. Reimbursement Obligation of CML and the Borrowers. ...........43
4.3. Letter of Credit Payments. ...................................44
4.4. Obligations Absolute. ........................................44
4.5. Reliance by Issuer. ..........................................45
4.6. Letter of Credit Fee. ........................................45
5. CERTAIN GENERAL PROVISIONS. ...........................................46
5.1. Closing Fee. .................................................46
5.2. Administrative Agent's Fee. ..................................46
5.3. Funds for Payments. ..........................................46
5.3.1. Payments to Administrative Agent. ...................46
5.3.2. No Offset, etc. .....................................46
5.4. Computations. ................................................47
5.5. Inability to Determine Eurodollar Rate. ......................47
5.6. Illegality. ..................................................47
5.7. Additional Costs, etc. .......................................48
5.8. Capital Adequacy. ............................................49
5.9. Certificate. .................................................50
5.10. Indemnity. ..................................................50
5.11. Interest After Default. .....................................50
5.11.1. Overdue Amounts. ...................................50
5.11.2. Amounts Not Overdue. ...............................51
6. COLLATERAL SECURITY AND GUARANTIES. ...................................51
6.1. Security of Borrowers. .......................................51
6.2. Guaranty, Foreign Guaranties and Security of Guarantors. .....51
7. GUARANTY. .............................................................51
7.1. Guaranty of Payment and Performance. .........................51
7.2. Guarantors' Agreement to Pay Enforcement Costs, etc. .........52
7.3. Waivers by the Guarantors; Lenders' Freedom to Act. ..........52
7.4. Unenforceability of Obligations Against Borrowers. ...........53
7.5. Subrogation; Subordination. ..................................53
7.5.1. Postponement of Rights Against Borrowers. ...........53
7.5.2. Subordination. ......................................54
7.5.3. Provisions Supplemental. ............................54
7.6. Security; Setoff. ............................................54
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7.7. Further Assurances. ..........................................55
7.8. Termination. .................................................55
7.9. Successors and Assigns. ......................................55
8. REPRESENTATIONS AND WARRANTIES. .......................................56
8.1. Corporate Authority. .........................................56
8.1.1. Incorporation; Good Standing. .......................56
8.1.2. Authorization. ......................................56
8.1.3. Enforceability. .....................................56
8.2. Governmental Approvals. ......................................57
8.3. Title to Properties; Leases. .................................57
8.4. Financial Statements and Projections. ........................57
8.4.1. Financial Statements. ...............................57
8.4.2. Projections. ........................................58
8.5. No Material Changes, etc.; Solvency. .........................58
8.5.1. Changes. ............................................58
8.5.2. Solvency. ...........................................58
8.6. Franchises, Patents, Copyrights, etc. ........................58
8.7. Litigation. ..................................................59
8.8. No Materially Adverse Contracts, etc. ........................59
8.9. Compliance with Other Instruments, Laws, etc. ................59
8.10. Tax Status. .................................................59
8.11. No Event of Default. ........................................60
8.12. Holding Company and Investment Company Acts. ................60
8.13. Absence of Financing Statements, etc. .......................60
8.14. Perfection of Security Interest. ............................60
8.15. Certain Affiliate Transactions. .............................60
8.16. Employee Benefit Plans. .....................................60
8.16.1. In General. ........................................61
8.16.2. Terminability of Welfare Plans. ....................61
8.16.3. Guaranteed Pension Plans. ..........................61
8.16.4. Multiemployer Plans. ...............................61
8.17. Regulations U, X and G. .....................................61
8.18. Environmental Compliance. ...................................62
8.19. Subsidiaries, etc. ..........................................63
8.20. Bank Accounts. ..............................................64
8.21. Chief Executive Offices. ....................................64
8.22. Fiscal Year. ................................................64
8.23. Disclosure ..................................................64
8.24. Insurance. ..................................................64
9. AFFIRMATIVE COVENANTS OF CML AND THE BORROWERS. .......................64
9.1. Punctual Payment. ............................................65
9.2. Maintenance of Office. .......................................65
9.3. Records and Accounts. ........................................65
9.4. Financial Statements, Certificates and Information. ..........65
9.5. Notices. .....................................................67
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9.5.1. Defaults. ...........................................67
9.5.2. Environmental Events. ...............................68
9.5.3. Notification of Claim against Collateral. ...........68
9.5.4. Notice of Litigation and Judgments. .................68
9.5.5. Notice of Tax Refunds. ..............................69
9.6. Corporate Existence; Maintenance of Properties. ..............69
9.7. Insurance. ...................................................69
9.8. Taxes. .......................................................70
9.9. Inspection of Properties and Books, etc. .....................70
9.9.1. General. ............................................70
9.9.2. Inventory Reports and Appraisals. ...................70
9.9.3. Commercial Finance Examinations. ....................71
9.9.4. Appraisals. .........................................71
9.9.5. Environmental Assessments. ..........................71
9.9.6. Communications with Accountants. ....................72
9.10. Compliance with Laws, Contracts, Licenses, and Permits. .....72
9.11. Inventory Restrictions. .....................................73
9.12. Use of Proceeds. ............................................73
9.13. Additional Mortgaged Property. ..............................73
9.14. Agency Account Agreements. ..................................73
9.15. Investments in Borrowers. ...................................73
9.16. Ownership of Subsidiaries. ..................................74
9.17. Private Label Credit Card Program. ..........................74
9.18. Collateral Notes. ...........................................74
9.19. Further Assurances; Additional Locations. ...................74
9.19.1. Further Assurances. ................................75
9.19.2. Additional Locations. ..............................75
10. CERTAIN NEGATIVE COVENANTS OF CML AND THE BORROWERS. .................75
10.1. Restrictions on Indebtedness. ...............................75
10.2. Restrictions on Liens. ......................................76
10.3. Restrictions on Investments. ................................78
10.4. Distributions and Restricted Payments. ......................79
10.4.1. Intercompany Distributions and Restricted Payments. .79
10.4.2. CML Distributions. .................................80
10.5. Merger, Consolidation and Disposition of Assets. ............81
10.5.1. Mergers and Acquisitions. ..........................81
10.5.2. Disposition of Assets. .............................81
10.6. Sale and Leaseback. .........................................82
10.7. Compliance with Environmental Laws. .........................82
10.8. Subordinated Debt. ..........................................82
10.9. Employee Benefit Plans. .....................................83
10.10. Bank Accounts. .............................................83
10.11. Transactions with Affiliates. ..............................83
10.12. Restrictive or Inconsistent Agreements. ....................84
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10.13. Business Activities. .......................................84
10.14. Private Label Credit Card Programs. ........................84
11. FINANCIAL COVENANTS OF CML AND THE BORROWERS. ........................84
11.1. Minimum Quarterly Consolidated EBITDA. ......................85
11.2. Minimum Consolidated EBITDA to Interest Ratio. ..............85
11.3. Capital Expenditures. .......................................85
11.4. Total Liabilities to Tangible Net Worth Ratio. ..............86
11.5. Minimum Quarterly EBITDA (NordicTrack). .....................86
12. CLOSING CONDITIONS. ..................................................87
12.1. Loan Documents. .............................................87
12.2. Certified Copies of Charter Documents. ......................87
12.3. Corporate Action. ...........................................87
12.4. Incumbency Certificate. .....................................87
12.5. Validity of Liens. ..........................................87
12.6. Perfection Certificates and UCC Search Results. .............88
12.7. Appraisals; Taxes. ..........................................88
12.8. Title Insurance. ............................................88
12.9. Certificates of Insurance. ..................................88
12.10. Agency Account Agreements. .................................88
12.11. Borrowing Base Report. .....................................89
12.12. Accounts Receivable Aging Report. ..........................89
12.13. Hazardous Waste Assessments. ...............................89
12.14. Solvency Certificate. ......................................89
12.15. Opinion of Counsel. ........................................89
12.16. Payment of Fees. ...........................................90
12.17. Payoff Letter. .............................................90
12.18. Disbursement Instructions. .................................90
12.19. Updated Collateral Examinations. ...........................90
12.20. Landlord Lien Waivers. .....................................90
12.21. Borrowing Availability. ....................................91
13. CONDITIONS TO ALL BORROWINGS. ........................................91
13.1. Representations True; No Event of Default. ..................91
13.2. No Legal Impediment. ........................................91
13.3. Governmental Regulation. ....................................91
13.4. Proceedings and Documents. ..................................91
13.5. Borrowing Base Report. ......................................92
13.6. Borrowing Availability. .....................................92
14. EVENTS OF DEFAULT; ACCELERATION; ETC. ................................92
14.1. Events of Default and Acceleration. .........................92
14.2. Termination of Commitments. .................................95
14.3. Remedies. ...................................................96
14.4. Distribution of Collateral Proceeds. ........................96
15. SETOFF. ..............................................................97
16. THE ADMINISTRATIVE AGENT. ............................................98
16.1. Authorization. ..............................................98
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16.2. Employees and Agents. .......................................99
16.3. No Liability. ...............................................99
16.4. No Representations. .........................................99
16.5. Payments. ...................................................100
16.5.1. Payments to Administrative Agent. ..................100
16.5.2. Distribution by Administrative Agent. ..............100
16.5.3. Delinquent Lenders. ................................100
16.6. Holders of Notes. ...........................................101
16.7. Indemnity. ..................................................101
16.8. Administrative Agent as Lender. .............................101
16.9. Resignation. ................................................102
16.10. Notification of Defaults and Events of Default. ............102
16.11. Duties in the Case of Enforcement. .........................102
17. EXPENSES. ............................................................103
18. INDEMNIFICATION. .....................................................104
19. SURVIVAL OF COVENANTS, ETC. ..........................................105
20. ASSIGNMENT AND PARTICIPATION. ........................................105
20.1. Conditions to Assignment by Lenders. ........................105
20.2. Certain Representations and Warranties; Limitations;
Covenants. .........................................................106
20.3. Register. ...................................................107
20.4. New Notes. ..................................................107
20.5. Participations. .............................................108
20.6. Disclosure. .................................................108
20.7. Assignee or Participant Affiliated with the Borrowers. ......108
20.8. Miscellaneous Assignment Provisions. ........................109
20.9. Assignment by Borrowers or Guarantors .......................109
21. NOTICES, ETC. ........................................................109
22. GOVERNING LAW. .......................................................110
23. HEADINGS. ............................................................111
24. COUNTERPARTS. ........................................................111
25. ENTIRE AGREEMENT, ETC. ...............................................111
26. WAIVER OF JURY TRIAL. ................................................111
27. CONSENTS, AMENDMENTS, WAIVERS, ETC. ..................................112
28. SEVERABILITY. ........................................................113
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SCHEDULES AND EXHIBITS
Schedule 1 Lenders and Commitments
Schedule 2 Permitted Inventory Locations
Schedule 8.3 Title to Properties; Leases
Schedule 8.5 Distributions since Balance Sheet Date
Schedule 8.7 Litigation
Schedule 8.10 Tax Status
Schedule 8.18 Environmental Matters
Schedule 8.19 Subsidiaries; Joint Ventures
Schedule 8.20 Bank Accounts
Schedule 8.21 Chief Executive Offices
Schedule 8.24 Insurance
Schedule 10.1 Existing Indebtedness
Schedule 10.2 Existing Liens
Schedule 10.3 Existing Investments
Schedule 10.6 Sale and Leasebacks Transactions
Exhibit A-1 Form of NordicTrack Note
Exhibit A-2 Form of S&H Note
Exhibit B Form of Loan Request
Exhibit C Form of Borrowing Base Report
Exhibit D Form of Compliance Certificate
Exhibit E Form of Agency Account Agreement
Exhibit F Form of Landlord Waiver
Exhibit G Form of Assignment and Acceptance
Exhibit H-1 Form of Overadvance Reallocation Request
Exhibit H-2 Form of Commitment Reallocation Request
Exhibit I Form of Supplement to Schedule 2
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REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of April 17, 1996 and
restated as of August 28, 1997, by and among (a) CML GROUP, INC., a Delaware
corporation ("CML"), (b) NORDICTRACK, INC., a Minnesota corporation ("NT"),
NORDIC ADVANTAGE, INC., a Minnesota corporation ("NA" and, on a consolidated
basis with NT, "NordicTrack"), and XXXXX & HAWKEN, LTD., a Delaware corporation
("S&H") and, together with NordicTrack, the "Borrowers"), (c) BANKBOSTON, N.A
(f/k/a The First National Bank of Boston), a national banking association, and
the other lending institutions that may become Lenders hereunder, and (d)
BANKBOSTON, N.A. (f/k/a the First National Bank of Boston), as administrative,
collateral and documentation agent for the Lenders.
RECITALS
CML, the Borrowers, certain of their Subsidiaries, BKB (the "Existing
Lender"), the Co-Agents (as defined in the Existing Credit Agreement) and the
Administrative Agent are party to a Revolving Credit Agreement, dated as of
April 17, 1996 (as amended, the "Existing Credit Agreement") pursuant to which
the Existing Lender made Loans and issued Letters of Credit to the Borrowers
(the "Existing Credit Extensions").
The Borrowers and CML have requested the Lenders and the Administrative
Agent to amend and restate the Existing Credit Agreement in its entirety to,
among other things,
(a) reflect the removal of certain Subsidiaries of CML as
Borrowers under the Existing Credit Agreement;
(b) reflect the assignment of BankAmerica Business
Credit, Inc.'s interest as a Lender to BKB and remove the role of and
all references to the Co-Agents;
(c) add an Overadvance facility;
(d) revise the interest rate provisions applicable to the
Loans;
(e) change the numerical amounts (but not the tests) for
certain of the financial covenants set forth in ss.11 of the Existing
Credit Agreement; and
(f) make certain other changes to the terms and provisions of
the Existing Credit Agreement.
The Lenders and the Administrative Agent are willing, on the terms set
forth in this Agreement and subject to the conditions and in reliance on the
representations set forth herein, to amend and restate the Existing Credit
Agreement so as to accomplish the foregoing.
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Accordingly, in consideration of the premises and the mutual agreements
herein contained, the parties hereto hereby agree that, from and after the
Restatement Effective Date, the Existing Credit Agreement (including all the
SCHEDULES and EXHIBITS thereto) is amended and restated in its entirety to read
as set forth above and as follows (and, in the case of the SCHEDULES and
EXHIBITS, in the forms attached hereto).
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
ACCOUNTS RECEIVABLE. All rights of any of the Borrowers to payment for
goods sold, leased or otherwise marketed in the ordinary course of business and
all rights of any of the Borrowers to payment for services rendered in the
ordinary course of business and all sums of money or other proceeds due thereon
pursuant to transactions with account debtors, except for that portion of the
sum of money or other proceeds due thereon that relate to sales, use or property
taxes in conjunction with such transactions, recorded on books of account in
accordance with generally accepted accounting principles.
ADMINISTRATIVE AGENT. BankBoston, N.A. (f/k/a The First National Bank of
Boston) acting as administrative, collateral and documentation agent for the
Lenders.
ADMINISTRATIVE AGENT'S HEAD OFFICE. The Administrative Agent's head
office located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx 00000, or at such
other location as the Administrative Agent may designate from time to time.
ADMINISTRATIVE AGENT'S SPECIAL COUNSEL. Xxxxxxx, Xxxx & Xxxxx LLP or
such other counsel as may be approved by the Administrative Agent.
AFFILIATE. With respect to any Person (a) any Person which directly, or
indirectly, controls or is controlled by, or is under common control with, the
Person specified, or (b) any other Person who is a Relative, director, officer
or general partner of such Person or of any Person described in clause (a). For
purposes of this definition, control of a Person shall include the power,
whether direct or indirect, (x) to vote five percent (5%) or more of the equity
securities having ordinary voting power for the election of directors or other
managers of such Person or (y) to direct or cause the direction, of the
management and policies of such Person whether by contract or otherwise.
AGENCY ACCOUNT AGREEMENTS. The several Agency Account Agreements in the
form of EXHIBIT E hereto (or a form otherwise approved by the Administrative
Agent in its sole discretion) entered into by any of the Borrowers, any of the
Guarantors, the Administrative Agent and the Agency Account Institutions or
other depository institutions satisfactory to the Administrative Agent.
AGENCY ACCOUNT INSTITUTIONS. NorWest Bank Minnesota, N.A., Fifth Third
Bank and any other financial institutions which receive deposits directly or
indirectly (as a result of interim concentration of depository accounts), from
an aggregate eight or more retail stores of the Borrowers and their
Subsidiaries.
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AGENCY ACCOUNTS. The depository accounts maintained by the Borrowers and
the Guarantors with the Agency Account Institutions or other depository
institutions satisfactory to the Administrative Agent, the funds from which are
periodically transferred to the applicable Concentration Account pursuant to the
Agency Account Agreements.
AGGREGATE BORROWING BASE. The sum of the NordicTrack Borrowing Base and
the S&H Borrowing Base.
AMENDMENT AGREEMENT. The Amendment Agreement, dated as of the
Restatement Effective Date, among the parties to the Existing Credit Agreement.
ASSIGNMENT AND ACCEPTANCE. See ss.20.1.
BALANCE SHEET DATE. July 31, 1996, the date of the most recent audited
financial statements of CML and its Subsidiaries.
BASE RATE. The higher of (i) the annual rate of interest announced from
time to time by BKB at its head office in Boston, Massachusetts, as its "base
rate" and (ii) one-half of one percent (1/2%) above the Federal Funds Effective
Rate. For the purposes of this definition, "Federal Funds Effective Rate" shall
mean for any day, the rate per annum equal 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 that
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three funds brokers of
recognized standing selected by the Administrative Agent.
BASE RATE LOANS. Loans bearing interest calculated by reference to the
Base Rate.
BKB. BankBoston, N.A. (f/k/a The First National Bank of Boston), a
national banking association, in its individual capacity.
BORROWERS. As defined in the preamble hereto.
BORROWING BASE. Collectively, the NordicTrack Borrowing Base, the S&H
Borrowing Base and the Overadvance Borrowing Base.
BORROWING BASE REPORT. A Borrowing Base Report signed by the chief
financial officer of CML and in substantially the form of EXHIBIT C hereto.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts, are open for the transaction of banking business and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
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CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by any
Person or any of its Subsidiaries in connection with the purchase or lease by
any such Person or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles.
CAPITALIZED LEASES. Leases under which CML or any of its Subsidiaries is
the lessee or obligor, the discounted future rental payment obligations under
which are required to be capitalized on the balance sheet of the lessee or
obligor in accordance with generally accepted accounting principles.
CERCLA. See ss.8.18.
CITIBANK. Citibank, N.A., in its capacity as agent for the lenders under
the Citibank Facility.
CITIBANK FACILITY. The revolving credit facility among CML, certain
lenders party thereto and Citibank as agent for such lenders.
CLOSING DATE. The first date on which the conditions set forth in ss.12
have been satisfied and any Loans are to be made or any Letter of Credit is to
be issued hereunder.
CML. As defined in the preamble hereto.
CODE. The Internal Revenue Code of 1986.
COLLATERAL. All of the property, rights and interests of CML and its
Subsidiaries that are or are intended to be subject to the security interests
and mortgages created by the Security Documents.
COLLATERAL NOTES. Any promissory notes issued by one or more of the
Borrowers in favor of BKB as agent under such notes, executed and delivered
pursuant to ss.9.20, and assigned to the Administrative Agent, each of which
such notes shall be secured by one of the Mortgages.
COMMITMENT. With respect to each Lender, the amount set forth on
SCHEDULE 1 hereto as the amount of such Lender's commitment to make Loans to,
and to participate in the issuance, extension and renewal of Letters of Credit
for the account of, the Borrowers, as the same may be reduced from time to time;
or if such commitment is terminated pursuant to the provisions hereof, zero.
COMMITMENT PERCENTAGE. With respect to each Lender, the percentage set
forth on SCHEDULE 1 hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders.
COMMITMENT REALLOCATION DATE. The date on which any reallocation of the
Sub-Commitments among the Borrowers is made or is to be made by CML in
accordance with ss.2.3.1.
COMMITMENT REALLOCATION REQUEST. See ss.2.3.1.
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COMPLIANCE CERTIFICATE. See ss.9.4(d).
CONCENTRATION ACCOUNT. With respect to any Borrower or any Guarantor,
such Borrower's or such Guarantor's, as the case may be, depository account with
BKB under the control of the Administrative Agent for the benefit of the Lenders
and the Administrative Agent.
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined herein,
shall mean that term as applied to the accounts of a Person and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
CONSOLIDATED ADJUSTED NET INCOME. With respect to any Person and its
Subsidiaries, for any period, an amount equal to consolidated net income for
such period, after deduction of all expenses, taxes and other proper charges,
determined in accordance with generally accepted accounting principles and after
eliminating therefrom all extraordinary nonrecurring items of income including,
without limitation (a) income from unusual transactions, (b) income from the
sale of Capital Assets and (c) income from the write-up in the book value of any
assets of such Person or its Subsidiaries; PROVIDED, HOWEVER, for the purposes
of determining Consolidated Adjusted Net Income, it shall include the estimated
deferred tax benefits for prior and current period losses which CML has been
including since the Original Closing Date regardless of whether or not generally
accepted accounting principles would permit such inclusion in the computation of
Consolidated Adjusted Net Income.
CONSOLIDATED EBITDA. With respect to any Person and its Subsidiaries,
for any period, Consolidated Adjusted Net Income plus, to the extent deducted in
determining Consolidated Adjusted Net Income, the sum of interest, taxes,
depreciation and amortization of such Person and its Subsidiaries for such
period on a consolidated basis, all determined in accordance with generally
accepted accounting principles.
CONSOLIDATED TANGIBLE NET WORTH. With respect to any Person, the excess
of Consolidated Total Assets over Consolidated Total Liabilities, and less the
sum of:
(a) the total book value of all assets of such Person and its
Subsidiaries properly classified as intangible assets under generally
accepted accounting principles, including such items as good will, the
purchase price of acquired assets in excess of the fair market value
thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the
foregoing; PLUS
(b) all amounts representing any write-up in the book value of
any assets of such Person or its Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date; PLUS
(c) to the extent otherwise includable in the computation of
Consolidated Tangible Net Worth, any subscriptions receivable relating
to capital stock.
CONSOLIDATED TOTAL ASSETS. All assets of a Person and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles; PROVIDED, HOWEVER, for the purposes of determining
Consolidated Total Assets, it shall include the
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-6-
estimated deferred tax benefits for prior and current period losses which CML
has been including since the Original Closing Date regardless of whether or not
generally accepted accounting principles would permit such inclusion in the
computation of Consolidated Total Assets.
CONSOLIDATED TOTAL INTEREST EXPENSE. With respect to any Person for any
period, the aggregate amount of interest required to be paid or accrued by such
Person and its Subsidiaries during such period on all Indebtedness of such
Person and its Subsidiaries outstanding during all or any part of such period,
whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in respect of
Capitalized Leases and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the
borrowing of money, PROVIDED that Consolidated Total Interest Expense shall not
include amortization of fees and expenses paid in connection with the
transactions contemplated by the Credit Agreement.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of a Person and its
Subsidiaries determined on a consolidated basis that in accordance with
generally accepted accounting principles should be classified upon the obligor's
balance sheet as liabilities.
CONTROLLED DISBURSEMENT ACCOUNT. With respect to any Borrower or CML,
such Borrower's or CML's, as the case may be, controlled disbursement account
with BKB, listed on SCHEDULE 8.20 hereto.
CONVERSION REQUEST. A notice given by any of the Borrowers to the
Administrative Agent of such Borrower's election to convert or continue a Loan
in accordance with ss.2.7.
COPYRIGHT MORTGAGE. The Memorandum of Copyrights, dated as of the
Original Closing Date, made by the Borrowers and the Guarantors in favor of the
Administrative Agent and in form and substance satisfactory to the Lenders and
the Administrative Agent.
CREDIT AGREEMENT. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
DEFAULT. See ss.14.1.
DELINQUENT LENDER. See ss.16.5.3.
DETERMINED VALUE. At the relevant time of reference thereto, (a) with
respect to Eligible Real Estate, the appraised fair market value thereof
determined by reference to the most recent appraisal thereof pursuant to
ss.9.9.4 and (b) with respect to Eligible Machinery and Equipment, the appraised
value of such machinery and equipment on an orderly liquidation basis determined
by reference to the most recent appraisal conducted pursuant to ss.9.9.4, in
each case after deduction of any claims entitled to priority under applicable
law over the security interest or mortgage of the Administrative Agent.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of a Person, other than
dividends payable solely in shares of common stock or similar non-preferred
equity interests of such Person; the purchase, redemption, or other retirement
of any shares of any class of capital stock or other equity
15
-7-
interests of a Person, directly or indirectly through a Subsidiary of such
Person or otherwise; the return of capital by a Person to its shareholders or
equity holders as such; or any other distribution on or in respect of any shares
of any class of capital stock or other equity interest of such Person.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC LENDING OFFICE. Initially, the office of each Lender designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Lender, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
DRAWDOWN DATE. The date on which any Loan is made or is to be made, and
the date on which any Loan is converted or continued in accordance with ss.2.7.
ELIGIBLE ACCOUNTS RECEIVABLE. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (i) that such Borrower reasonably and in good faith
determines to be collectible; (ii) that are with account debtors that (A) are
not Affiliates of CML or any of its Subsidiaries, (B) purchased the goods or
services giving rise to the relevant Account Receivable in an arm's length
transaction, (C) are not insolvent or the subject of any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction and (D) are, in the Administrative Agent's reasonable
judgment, creditworthy; (iii) that are in payment of obligations that have been
fully performed and are not subject to dispute or any other similar claims that
would reduce the cash amount payable therefor; (iv) that are not subject to any
pledge, restriction, security interest or other lien or encumbrance other than
those created by the Loan Documents; (v) in which the Administrative Agent has a
valid and perfected first priority security interest; (vi) that are not
outstanding for more than (A) sixty (60) days past the date payment thereof is
due or (B) ninety (90) days past the earlier to occur of (x) the date of the
respective invoices therefor and (y) the date of shipment therefor in the case
of goods or the end of the calendar month following the provision thereof in the
case of services; (vii) that are not due from an account debtor located in
Indiana, Minnesota or New Jersey unless such Borrower (A) has received a
certificate of authority to do business and is in good standing in such state or
(B) has filed a notice of business activities report with the appropriate office
or agency of such state for the current year; (viii) that are not due from any
single account debtor if more than twenty-five percent (25%) of the aggregate
amount of all Accounts Receivable owing from such account debtor would otherwise
not be Eligible Accounts Receivable (after applying co-op advertising credits,
if any, to the balances more than sixty (60) days past the date payment thereof
is due); (ix) that are payable in Dollars; (x) that are not payable from an
office outside of the United States or Canada; (xi) that are not secured by a
letter of credit unless the Administrative Agent has a prior, perfected security
interest in such letter of credit; (xii) that are not "xxxx-and-hold",
guaranteed sale, sale-or-return, sale on approval or consignment basis
receivables; (xiii) that are not receivables arising under any Private Label
Credit Card Program or any other credit card receivables; (xiv) that are not due
from any single account debtor (other than American Express Company, Sears
Xxxxxxx and Company and Target Stores, a division of Xxxxxx Xxxxxx Corporation
if and to the extent that, after inclusion of such Account Receivable in
Eligible Accounts Receivable, the aggregate amount of Eligible Accounts
Receivable owing from such account debtor would exceed twenty percent (20%)
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of the aggregate amount of all Eligible Accounts Receivable; (xv) in the case of
NordicTrack, that are not due from NorWest Bank Minnesota, N.A.; and (xvi) in
the case of S&H, that do not arise from the sale of mailing lists or are due
from Felissimo Corporation.
ELIGIBLE ASSIGNEE. Any of (i) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (ii)
a savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (iii) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution or
other Person approved by the Administrative Agent, such approval not to be
unreasonably withheld.
ELIGIBLE INVENTORY. With respect to S&H, finished goods owned by such
Borrower; PROVIDED that Eligible Inventory shall not include any inventory (i)
held on consignment, or not otherwise owned by such Borrower, or of a type no
longer sold by such Borrower; (ii) which has been returned by a customer or is
damaged or subject to any legal encumbrance other than Permitted Liens; (iii)
which is not in the possession of such Borrower unless (A) such inventory is
subject to a documentary letter of credit issued by a lender approved by the
Administrative Agent and the Administrative Agent has possession of and a first
priority, perfected security interest in the documents of title relating to such
inventory, (B) such inventory is in transit from one Permitted Inventory
Location of such Borrower within the United States of America to another
Permitted Inventory Location of such Borrower within the United States of
America or (C) the aggregate gross book value of such inventory does not exceed
$6,000,000 with respect to inventory located at such Borrower's distribution
center and warehouse located at 0000 Xxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxx and
operated by The Discovery Channel Store, Inc. pursuant to the Cooperation and
Services Agreement between The Discovery Channel Store, Inc. and such Borrower,
and $1,750,000 with respect to all other inventory locations and the
Administrative Agent has received (x) a waiver in form and substance
satisfactory to the Administrative Agent from the possessor of such inventory,
(y) financing statements in form and substance satisfactory to the
Administrative Agent executed and delivered by such Borrower as secured
party/xxxxxx and the possessor of such inventory as debtor/bailee, for filing in
the appropriate jurisdictions PROVIDED, HOWEVER, that the Administrative Agent
may in its sole discretion, waive the foregoing requirement with respect to
financing statements, and (z) an assignment in form and substance satisfactory
to the Administrative Agent by the secured party/xxxxxx to the Administrative
Agent of the aforementioned financing statements; (iv) in which the
Administrative Agent does not have a valid and perfected first priority security
interest; (v) which has been shipped to a customer of such Borrower regardless
of whether such shipment is on a consignment basis; (vi) which is not located at
a Permitted Inventory Location of such Borrower within the United States of
America, unless (A) such inventory is subject to a documentary letter of credit
issued by a lender approved by the Administrative Agent and the Administrative
Agent has possession of and a first priority,
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perfected security interest in the documents of title relating to such inventory
or (B) such inventory is in transit from one Permitted Inventory Location of
such Borrower within the United States of America to another Permitted Inventory
Location of such Borrower within the United States of America; (vii) which the
Majority Lenders reasonably deem to be obsolete or not marketable; (viii) which
is located in California unless the Administrative Agent has received a legal
opinion in form and substance satisfactory to the Administrative Agent that the
Loan Documents comply with the provisions of ss.9102(5)(b) of the Uniform
Commercial Code as in effect in California, or (ix) which consists of live
plantings.
ELIGIBLE MACHINERY AND EQUIPMENT. Those items of machinery and equipment
owned by NordicTrack at the relevant time of reference thereto with respect to
which NordicTrack has full and unencumbered title (except for liens granted to
the Administrative Agent pursuant to the Security Documents) and with respect to
which the Administrative Agent has a valid and perfected first priority security
interest.
ELIGIBLE NORDICTRACK INVENTORY. With respect to NordicTrack, (a)
finished goods owned by NordicTrack and (b) work-in-progress and raw materials
owned by NordicTrack and having an aggregate gross book value of not more than
$20,000,000 determined in accordance with generally accepted accounting
principles; PROVIDED that Eligible NordicTrack Inventory shall not include any
inventory (i) held on consignment, or not otherwise owned by NordicTrack, or of
a type no longer sold by NordicTrack; (ii) which has been returned by a customer
or is damaged or subject to any legal encumbrance other than Permitted Liens;
(iii) which is not in the possession of NordicTrack unless (A) such inventory is
subject to a documentary letter of credit issued by a lender approved by the
Administrative Agent and the Administrative Agent has possession of and a first
priority, perfected security interest in the documents of title relating to such
inventory, (B) such inventory is in transit from one Permitted Inventory
Location of NordicTrack within the United States of America to another Permitted
Inventory Location of NT or NA, as applicable, within the United States of
America or (C) the aggregate gross book value of such inventory does not exceed
$4,250,000 and the Administrative Agent has received (x) a waiver in form and
substance satisfactory to the Administrative Agent from the possessor of such
inventory, (y) financing statements in form and substance satisfactory to the
Administrative Agent executed and delivered by NT or NA, as applicable, as
secured party/xxxxxx and the possessor of such inventory as debtor/bailee, for
filing in the appropriate jurisdictions PROVIDED, HOWEVER, that the
Administrative Agent may, in its sole discretion, waive the foregoing
requirement with respect to financing statements, and (z) an assignment in form
and substance satisfactory to the Administrative Agent by the secured
party/xxxxxx to the Administrative Agent of the aforementioned financing
statements; (iv) in which the Administrative Agent does not have a valid and
perfected first priority security interest; (v) which has been shipped to a
customer of NordicTrack regardless of whether such shipment is on a consignment
basis; (vi) which is not located at a Permitted Inventory Location of NT or NA,
as applicable, within the United States of America, unless (A) such inventory is
subject to a documentary letter of credit issued by a lender approved by the
Administrative Agent and the Administrative Agent has possession of and a first
priority, perfected security interest in the documents of title relating to such
inventory or (B) such inventory is in transit from one Permitted Inventory
Location of NT or NA, as applicable, within the United States of America to
another Permitted Inventory Location of NT or NA, as applicable, within the
United States of America; (vii) which the Majority Lenders reasonably deem to be
obsolete or not marketable or (viii) which is located in California unless the
Administrative Agent has received a legal opinion in form and substance
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-10-
satisfactory to the Administrative Agent that the Loan Documents comply with the
provisions of ss.9102(5)(b) of the Uniform Commercial Code as in effect in
California.
ELIGIBLE REAL ESTATE. With respect to NordicTrack, all real property
with respect to which NordicTrack has full and unencumbered title (except for
the liens granted to the Administrative Agent pursuant to the Security
Documents) and with respect to which the Administrative Agent has a valid and
perfected first priority lien.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by CML, any of the Borrowers, or
any ERISA Affiliate, other than a Multiemployer Plan.
ENVIRONMENTAL LAWS. See ss.8.18(a).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
CML or any of the Borrowers under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
EUROCURRENCY RESERVE RATE. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
EURODOLLAR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith.
EURODOLLAR LENDING OFFICE. Initially, the office of each Lender
designated as such in SCHEDULE 1 hereto; thereafter, such other office of such
Lender, if any, that shall be making or maintaining Eurodollar Rate Loans.
EURODOLLAR RATE. For any Interest Period with respect to a Eurodollar
Rate Loan, the rate of interest equal to (i) the rate per annum (rounded upwards
to the nearest 1/16 of one percent) at which the Reference Bank's Eurodollar
Lending Office is offered Dollar deposits two Eurodollar Business Days prior to
the beginning of such Interest Period in the interbank eurodollar market where
the eurodollar and foreign currency and exchange operations of such Eurodollar
Lending Office are customarily conducted, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan of the Reference Bank to
which such Interest
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Period applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency
Reserve Rate, if applicable.
EURODOLLAR RATE LOANS. Loans bearing interest calculated by reference to
the Eurodollar Rate.
EVENT OF DEFAULT. See ss.14.1.
EXISTING CREDIT AGREEMENT. As defined in the Recitals.
EXISTING LENDERS. As defined in the Recitals.
FEE LETTER. The letter agreement dated as of March 8, 1996 and amended
and restated as of the Original Closing Date among CML, the Borrowers, BKB and
BankAmerica Business Credit, Inc.
FISCAL AGENCY AGREEMENT. The Fiscal Agency Agreement dated as of January
20, 1993 between CML and Chemical Bank, as fiscal agent, in the form delivered
to the Administrative Agent on or prior to the Closing Date.
FOREIGN GUARANTIES. The several foreign subsidiary guaranties made by
each of the Foreign Guarantors in favor of the Administrative Agent pursuant to
which each Foreign Guarantor guaranties to the Administrative Agent for the
benefit of the Lenders and the Administrative Agent the payment and performance
of the Obligations.
FOREIGN GUARANTORS. CML International (FSC), Ltd., The Nature Company
Limited, NordicTrack (U.K.) Ltd., NordicTrack GmbH and Nordic Advantage of
Ontario, Inc.
FOREIGN PLEDGE AGREEMENT. Collectively, (a) the share pledge agreement
dated as of April 24, 1996 among NT and the Lenders pledging the shares of
NordicTrack GmbH, (b) the charge over securities dated as of April 29, 1996
between The Nature Company (now known as OTNC, Inc.) and the Administrative
Agent pledging the securities of The Nature Company Limited and (c) the charge
over securities dated as of April 29, 1996 between NT and the Administrative
Agent, pledging the securities of NordicTrack (U.K.) Ltd., in each case in form
and substance satisfactory to the Lenders and the Administrative Agent.
GE CAPITAL CREDIT CARD PROGRAM. The credit card program made available
to customers of NordicTrack in accordance with the GE Capital Credit Card
Program Agreement.
GE CAPITAL CREDIT CARD PROGRAM AGREEMENT. The Account Purchase and
Consumer Credit Card Program Agreement, dated as of December 10, 1996, among
General Electric Capital Corporation and NordicTrack.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (i) When used in ss.11,
whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent consistent with such principles, the accounting practice of
CML and the Borrowers reflected in their financial statements for the year ended
on the
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Balance Sheet Date, and (ii) when used in general, other than as provided above,
means principles that are (A) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (B) consistently applied with past financial
statements of CML and the Borrowers adopting the same principles, provided that
in each case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
XXXXXX XXXXXXXX REPORT. The Xxxxxx Xxxxxxxx Partners, Inc. Inventory
Valuation and Review Report dated in May 1997 relating to the Borrowers'
inventory, in the form delivered to the Administrative Agent on or prior to the
Restatement Effective Date, or any subsequent appraisal thereof prepared in a
manner consistent with such report and in form and substance satisfactory to the
Administrative Agent.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by CML or any of the
Borrowers or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
GUARANTORS. CML, each Borrower and the direct and indirect Subsidiaries
of CML listed on the signature pages hereto as Guarantors.
GUARANTY. The Guaranty made by each of the Guarantors in favor of the
Lenders and the Administrative Agent pursuant to ss.7 hereof, pursuant to which
each Guarantor guaranties to the Lenders and the Administrative Agent the
payment and performance of the Obligations.
HAZARDOUS SUBSTANCES. See ss.8.18(b).
INDEBTEDNESS. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, including in any event and whether or not so
classified: (i) all debt and similar monetary obligations, whether direct or
indirect; (ii) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (iii) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, and the obligations to
reimburse the issuer in respect of any letters of credit.
INTERCOMPANY SUBORDINATION AGREEMENT. The Intercompany Subordination
Agreement, dated as of the Original Closing Date, among CML, the Borrowers, and
their Subsidiaries and in form and substance satisfactory to the Lenders and the
Administrative Agent.
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INTEREST PAYMENT DATE. (i) As to any Base Rate Loan, the first day after
the last day of the Interest Period with respect thereto; and (ii) as to any
Eurodollar Rate Loan, the last day of each Interest Period with respect thereto.
INTEREST PERIOD. With respect to each Loan, (i) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the applicable Borrower in a Loan
Request (A) for any Base Rate Loan, the last day of the calendar month; and (B)
for any Eurodollar Rate Loan, 1, 2 or 3 months; and (ii) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the applicable Borrower in a Conversion Request; PROVIDED that all
of the foregoing provisions relating to Interest Periods are subject to the
following:
(a) if any Interest Period with respect to a Eurodollar Rate Loan
would otherwise end on a day that is not a Eurodollar Business Day, that
Interest Period shall be extended to the next succeeding Eurodollar
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Eurodollar
Business Day;
(b) if any Interest Period with respect to a Base Rate Loan would
end on a day that is not a Business Day, that Interest Period shall end
on the next succeeding Business Day;
(c) if the applicable Borrower shall fail to give notice as
provided in ss.2.7, such Borrower shall be deemed to have requested a
conversion of the affected Eurodollar Rate Loan to a Base Rate Loan and
the continuance of all Base Rate Loans as Base Rate Loans on the last
day of the then current Interest Period with respect thereto;
(d) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Eurodollar Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (i) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (ii) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(iii) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (iv) there shall
not be deducted in respect of any Investment any amounts received as earnings
22
-14-
on such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (ii) may be
deducted when paid; and (v) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
ISSUING BANK. With respect to any Letter of Credit, BKB and any
successor Issuing Bank.
KIOSK. Any temporary seasonal lease (not in excess of twelve months in
any event) by any Borrower of space provided that not more than $50,000 of
Capital Expenditures may be expended by CML and its Subsidiaries in respect of
any one kiosk.
LANDLORD LIEN RESERVE. With respect to any Eligible Inventory or
Eligible NordicTrack Inventory which is located at a premises subject to a
Specified Lease, the Landlord Lien Reserve shall be the lesser of (a) the sum of
(i) all rent past due for more than thirty (30) days under such Specified Lease
at such time and (ii) all rent which may become due under such Specified Lease
during the twelve month period commencing at the Original Closing Date, in each
case, unless otherwise requested by the Administrative Agent, calculated on June
17, 1996 and at the end of each fiscal quarter thereafter by reference to the
average monthly rent on such Specified Lease during the immediately preceding
calendar year and (b) the net book value (determined on a first-in first-out
basis at lower of cost or market) of such Eligible Inventory or Eligible
NordicTrack Inventory.
LANDLORD WAIVER. A waiver from the lessor or sublessor of property
leased by any of the Borrowers as lessee in substantially the form of EXHIBIT F
hereto or otherwise approved by the Administrative Agent in its sole discretion.
LENDERS. BKB and any other Person who becomes a Lender pursuant to
ss.20.
LETTER OF CREDIT. See ss.4.1.1.
LETTER OF CREDIT APPLICATION. See ss.4.1.1.
LETTER OF CREDIT EXPOSURE. At any time, and with respect to any Borrower
or CML, the sum of (a) the Maximum Drawing Amount with respect to all Letters of
Credit issued at the request of such Borrower or, in the case of CML, any
Borrower and (b) all Unpaid Reimbursement Obligations of such Borrower or, as
the case may be, CML.
LETTER OF CREDIT PARTICIPATION. See ss.4.1.4.
LOAN DOCUMENTS. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Fee Letter, the Intercompany
Subordination Agreement, the Amendment Agreement and the Security Documents.
LOAN REQUEST. See ss.2.6.1.
LOANS. The NordicTrack Loans and the S&H Loans.
MAJORITY LENDERS. As of any date, the Lenders (excluding any Delinquent
Lenders) holding at least sixty-six and two-thirds percent (66 2/3%) of the
outstanding principal
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amount of the Notes on such date; and if no such principal is outstanding, the
Lenders (excluding any Delinquent Lenders) whose aggregate Commitments
constitutes at least sixty-six and two-thirds percent (66 2/3%) of the Total
Commitment.
MATURITY DATE. April 15, 1999.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
MAXIMUM OVERADVANCE AMOUNT. $15,000,000.
MONOGRAM CREDIT CARD PROGRAM. The credit card program made available to
customers of NordicTrack pursuant to the Monogram Credit Card Program Agreement.
MONOGRAM CREDIT CARD PROGRAM AGREEMENT. The Consumer Credit Card Program
Agreement dated as of November 29, 1995 among Monogram Credit Card Bank of
Georgia and NordicTrack as amended prior to the Restatement Effective Date in
the form delivered to the Administrative Agent on or prior to the Restatement
Effective Date.
MORTGAGED PROPERTY. Any Real Estate which is subject to any Mortgage.
MORTGAGES. Collectively the Mortgage Deeds, Assignments of Leases and
Security Agreements dated as of the Original Closing Date, from NordicTrack to
BKB as agent under the Collateral Note and assigned to the Administrative Agent
in accordance with the terms and provisions of (i) that certain Pledge Agreement
dated as of the Original Closing Date by and among NT, BKB as agent and the
Administrative Agent and (ii) that certain Assignment of Mortgage dated as of
the Original Closing Date by and between BKB as agent and the Administrative
Agent, with respect to the fee interest of NordicTrack in its owned real
properties, in each case in form and substance satisfactory to the
Administrative Agent and such other mortgages and deeds of trust from any of the
Borrowers or Guarantors to the Administrative Agent pursuant to ss.9.13.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by CML, any of the Borrowers or
any ERISA Affiliate.
NA. As defined in the preamble hereto.
NT. As defined in the preamble hereto.
NET CASH PROCEEDS. With respect to any sale of any assets of any of CML,
any of the Borrowers or any of their Subsidiaries, the gross consideration
received by CML, such Borrower, or such Subsidiary (in cash) from such sale, net
of commissions, direct sales costs, normal closing adjustments, income taxes
attributable to such sale and professional fees and expenses incurred directly
in connection therewith, to the extent the foregoing are actually paid in
connection with such sale.
NORDICTRACK. As defined in the preamble hereto.
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NORDICTRACK BORROWING BASE. At the time of reference thereto, an amount
determined by the Administrative Agent by reference to the most recent Borrowing
Base Report, which is equal to the sum of:
(a) 80.00% of NordicTrack's Eligible Accounts Receivable for which
invoices have been issued and are payable; PLUS
(b) 55.00% of the net book value (determined on a first-in first-out
basis at lower of cost or market) of Eligible NordicTrack Inventory; MINUS
(c) the amount of any Landlord Lien Reserve with respect to NordicTrack;
PROVIDED, HOWEVER, the Administrative Agent reserves its rights, upon prior
written notice to the Borrowers, to add reserves and decrease the advance rates
set forth herein, if, in the Administrative Agent's reasonable discretion, the
results of commercial finance examinations, inventory appraisals or other credit
or collateral considerations indicate a deterioration in NordicTrack's Eligible
Accounts Receivable or Eligible NordicTrack Inventory from May 1997, such that
additional reserves or a lower advance rate for NordicTrack's Eligible Accounts
Receivable and/or Eligible NordicTrack Inventory is warranted.
NORDICTRACK LOANS. Revolving credit loans made or to be made by the
Lenders to NordicTrack pursuant to ss.2.1.1.
NORDICTRACK NOTE RECORD. A record with respect to a NordicTrack Note.
NORDICTRACK NOTES. See ss.2.4.1.
NOTE RECORDS. Collectively, the NordicTrack Note Records and the S&H
Note Records.
NOTES. Collectively, the Collateral Notes, the NordicTrack Notes and the
S&H Notes.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
CML, the Borrowers and their Subsidiaries to any of the Lenders and the
Administrative Agent, individually or collectively, existing on the date of this
Credit Agreement or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Credit Agreement or any of the other Loan
Documents or in respect of any of the Loans made or Reimbursement Obligations
incurred or any of the Notes, Letter of Credit Applications, Letter of Credits
or other instruments at any time evidencing any thereof.
OPERATING ACCOUNT. With respect to any Borrower or CML, such Borrower's
or CML's as the case may be, demand deposit account(s) with BKB, listed on
SCHEDULE 8.20 hereto.
ORIGINAL CLOSING DATE. April 17, 1996.
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OUTSTANDING. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
OVERADVANCE. As of any date of determination, with respect to any
Borrower, Loans, the unpaid principal thereof which exceeds an amount equal to
such Borrower's Borrowing Base MINUS such Borrower's Letter of Credit Exposure.
OVERADVANCE BORROWING BASE. At the relevant time of reference thereto,
an amount determined by the Administrative Agent by reference to the most recent
Borrowing Base Report, which is equal to the sum of:
(a) 60.00% of the Determined Value of Eligible Real Estate; PLUS
(b) 80.00% of the Determined Value of Eligible Machinery and Equipment;
PLUS
(c) 10.00% of the sum of (i) the net book value (determined on a
first-in first-out basis at lower of cost or market) of S&H's Eligible Inventory
and (ii) the net book value (determined on a first-in first-out basis at a lower
of cost or market) of Eligible NordicTrack Inventory.
OVERADVANCE REALLOCATION DATE. The date on which any reallocation of the
Sub-Overadvance Amounts among the Borrowers is made or is to be made by CML in
accordance with ss.2.1.5(b).
OVERADVANCE REALLOCATION REQUEST. See ss.2.1.5(b).
PATENT ASSIGNMENT. The Patent Collateral Assignment and Security
Agreement, dated as of the Original Closing Date, made by the Borrowers and the
Guarantors in favor of the Administrative Agent and in form and substance
satisfactory to the Lenders and the Administrative Agent.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERFECTION CERTIFICATES. The Perfection Certificates as defined in the
Security Agreement.
PERMITTED DISPOSITION. Any disposition of assets of any Person described
in and permitted by ss.10.5.2.
PERMITTED INVENTORY LOCATIONS. The retail stores, distribution centers
and manufacturing facilities of the Borrowers located in the United States of
America and listed on SCHEDULE 2 hereto, as such SCHEDULE 2 may be supplemented
from time to time in accordance with the provisions of ss.9.4(j).
PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by ss.10.2.
PERMITTED OVERADVANCE AMOUNT. See ss.2.1.5(a).
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PERSON. Any individual, corporation, partnership, limited liability
company, limited liability partnership, trust, unincorporated association,
business, or other legal entity, and any government or any governmental agency
or political subdivision thereof.
PRIVATE LABEL CREDIT CARD PROGRAMS. The Monogram Credit Card Program,
the GE Capital Credit Card Program and all other credit card programs provided
to customers of NordicTrack by Persons other than CML, NordicTrack or their
Subsidiaries or Affiliates, together with all associated documentation.
REAL ESTATE. All real property now, or in the future, owned or leased
(as lessee or sublessee) by CML, any of the Borrowers or any of their
Subsidiaries.
RECORD. The grid attached to a Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any
Lender with respect to any Loan referred to in such Note.
REFERENCE BANK. BKB.
REIMBURSEMENT OBLIGATION. Each of CML's and each Borrower's obligation
to reimburse the Issuing Bank and the Lenders on account of any drawing under
any Letter of Credit issued on behalf of (a) in the case of CML, any Borrower,
and (b) in the case of any Borrower, such Borrower, all as provided in ss.4.2.
RELATIVE. In relation to any Person, any spouse, parent, grandparent,
child, grandchild, brother or sister of such Person, or the spouse of any of the
foregoing.
RESTATEMENT EFFECTIVE DATE. As defined in the Amendment Agreement.
RESTRICTED PAYMENTS. In relation to CML, the Borrowers and their
Subsidiaries, (a) any Distribution or (b) any payment or prepayment by any
Borrower or its Subsidiaries to CML or to any other Affiliate of any of the
Borrowers or CML other than payments to Affiliates (other than CML) for goods
and services in the ordinary course of business on terms equivalent to those
obtainable in arms length transactions.
S&H. As defined in the preamble hereto.
S&H BORROWING BASE. At the relevant time of reference thereto, an amount
determined by the Administrative Agent by reference to the most recent Borrowing
Base Report, which is equal to the sum of:
(a) 80.00% of S&H's Eligible Accounts Receivable for which
invoices have been issued and are payable; PLUS
(b) 55.00% of the net book value (determined on a first-in
first-out basis at lower of cost or market) of S&H's Eligible Inventory;
MINUS
(c) the amount of any Landlord Lien Reserve with respect to S&H;
PROVIDED, HOWEVER, the Administrative Agent reserves its rights, upon prior
written notice to the Borrowers, to add reserves and decrease the advance rates
set forth herein, if, in the
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Administrative Agent's reasonable discretion, the results of commercial finance
examinations, inventory appraisals or other credit or collateral considerations
indicate a deterioration in S&H's Eligible Accounts Receivable or Eligible
Inventory from ________________ __, 1997, such that additional reserves or a
lower advance rate for S&H's Eligible Accounts Receivable and/or Eligible
Inventory is warranted.
S&H LOANS. Revolving credit loans made or to be made by the Lenders to
S&H pursuant to ss.2.1.3.
S&H NOTE RECORD. A Record with respect to an S&H Note.
S&H NOTES. See ss.2.4.3.
SECURITY AGREEMENT. The Security Agreement, dated as of the Original
Closing Date, among the Borrowers, the Guarantors and the Administrative Agent
and in form and substance satisfactory to the Lenders and the Administrative
Agent.
SECURITY DOCUMENTS. The Guaranty, the Foreign Guaranties, the Security
Agreement, the Mortgages, the Patent Assignment, the Trademark Assignment, the
Copyright Mortgage, the Agency Account Agreements, the Stock Pledge Agreement
and the Foreign Pledge Agreements.
SETTLEMENT. The making among the Lenders of, or receiving of payments
among the Lenders, in immediately available funds, to the extent necessary to
cause each Lender's actual share of the outstanding amount of Loans (after
giving effect to any Loan Request) to be equal to each Lender's Commitment
Percentage of the outstanding amount of such Loans (after giving effect to any
Loan Request), in any case where, prior to such event or action, the actual
share is not so equal.
SETTLEMENT AMOUNT. See ss.2.8.
SETTLEMENT DATE. (a) The Drawdown Date relating to any Loan Request, (b)
Friday of each week, or if Friday is not a Business Day, the Business Day
immediately following such Friday, (c) the Business Day immediately following
the Administrative Agent becoming aware of the existence of an Event of Default,
(d) any Business Day on which the amount of Loans outstanding from BKB PLUS
BKB's Commitment Percentage of the aggregate Letter of Credit Exposures of the
Borrowers is equal to or greater than BKB's Commitment Percentage of the Total
Commitment, (e) the Business Day immediately following any Business Day on which
the amount of Loans outstanding increases or decreases by more than $5,000,000
as compared to the previous Settlement Date, (f) any day on which any conversion
of a Base Rate Loan to a Eurodollar Rate Loan occurs or (g) any Business Day on
which (i) the amount of outstanding Loans decreases and (ii) the amount of the
Administrative Agent's Loans outstanding equals zero Dollars ($0).
SETTLING LENDER. See ss.2.8.
SPECIFIED LEASE. A lease by any of the Borrowers as lessee of Real
Estate at which Eligible Inventory or, in the case of NordicTrack, Eligible
NordicTrack Inventory, is held and as to which at any time the Administrative
Agent has not received evidence, in form and substance satisfactory to the
Administrative Agent, that based upon then existing law (as
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determined by the Administrative Agent in the exercise of its reasonable
discretion and on the advice of counsel), the landlord of such property would
not have a lien on inventory superior to the security interest granted under the
Security Documents, securing rent obligations more than thirty (30) days past
due or securing future rent obligations accruing after the Closing Date;
PROVIDED, HOWEVER, that no lease for which the applicable Borrower and the
Administrative Agent have received a Landlord Waiver shall be a Specified Lease.
STOCK PLEDGE AGREEMENT. The Stock Pledge Agreement, dated as of the
Original Closing Date, among CML, certain of the Borrowers and the
Administrative Agent, in form and substance satisfactory to the Lenders and the
Administrative Agent.
SUB-COMMITMENT. See ss.2.3.1.
SUB-OVERADVANCE AMOUNT. See ss.2.1.6(b).
SUBORDINATED DEBENTURES. The 5 1/2% Convertible Debentures due 2003
issued by CML pursuant to the Fiscal Agency Agreement.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
TITLE INSURANCE COMPANY. Chicago Title Insurance Company.
TITLE POLICY. In relation to each Mortgaged Property, an ALTA standard
form title insurance policy issued by the Title Insurance Company (with such
reinsurance or co-insurance as the Administrative Agent may require, any such
reinsurance to be with direct access endorsements) in such amount as may be
determined by the Administrative Agent insuring the priority of the Mortgage of
such Mortgaged Property and that one of the Borrowers or one of the Guarantors
holds marketable fee simple title to such Mortgaged Property, subject only to
the encumbrances permitted by such Mortgage and which shall not contain
exceptions for mechanics liens or persons in occupancy (except as may be
permitted by such Mortgage), shall not insure over any matter except to the
extent that any such affirmative insurance is acceptable to the Administrative
Agent in its sole discretion, and shall contain such endorsements and
affirmative insurance as the Administrative Agent in its discretion may require,
including but not limited to (i) comprehensive endorsement, (ii) variable rate
of interest endorsement, (iii) usury endorsement, (iv) revolving credit
endorsement, (v) tie-in endorsement, (vi) doing business endorsement and (vii)
ALTA form 3.1 zoning endorsement.
TOTAL COMMITMENT. The sum of the Commitments of the Lenders, as in
effect from time to time.
TRADEMARK ASSIGNMENT. The Trademark Collateral Security and Pledge
Agreement, dated as of the Original Closing Date, among the Borrowers, the
Guarantors and the Administrative Agent, in form and substance satisfactory to
the Lenders and the Administrative Agent and the Assignments of Trademarks and
Service Marks executed in connection therewith.
TYPE. As to any Loan, its nature as a Base Rate Loan or a Eurodollar
Rate Loan.
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UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Issuing Bank in the ordinary course of its business as a letter of credit
issuer and in effect at the time of issuance of such Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for which
the applicable Borrower does not reimburse the Issuing Bank and the Lenders on
the date specified in, and in accordance with, ss.4.2.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit
Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification
to such law.
(d) A reference to any Person includes its permitted successors
and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like
import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
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2. THE REVOLVING CREDIT FACILITIES.
2.1. COMMITMENT TO LEND.
2.1.1. COMMITMENT TO LEND NORDICTRACK LOANS. Subject to the terms
and conditions set forth in this Credit Agreement, each of the Lenders
severally agrees to lend to NordicTrack and NordicTrack may borrow,
repay, and reborrow from time to time between the Restatement Effective
Date and the Maturity Date upon notice by NordicTrack to the
Administrative Agent given in accordance with ss.2.6, such sums as are
requested by NordicTrack, PROVIDED that the sum of the outstanding
amount of the NordicTrack Loans (after giving effect to all amounts
requested) PLUS NordicTrack's Letter of Credit Exposure shall not at any
time exceed the lesser of (a) NordicTrack's Sub-Commitment and (b) the
NordicTrack Borrowing Base PLUS the lesser of (i) the Overadvance
Borrowing Base less the aggregate outstanding amount of the Overadvances
of the other Borrowers (after giving effect to all amounts requested)
and (ii) NordicTrack's Sub-Overadvance Amount in effect at such time.
The NordicTrack Loans shall be made PRO RATA in accordance with each
Lender's Commitment Percentage. Each request for a NordicTrack Loan
hereunder shall constitute a representation and warranty by NordicTrack
that the conditions set forth in ss.12 and ss.13, in the case of the
initial NordicTrack Loans to be made on the Restatement Effective Date,
and ss.13, in the case of all other NordicTrack Loans, have been
satisfied on the date of such request.
2.1.2. INTENTIONALLY OMITTED.
2.1.3. COMMITMENT TO LEND S&H LOANS. Subject to the terms and
conditions set forth in this Credit Agreement, each of the Lenders
severally agrees to lend to S&H and S&H may borrow, repay, and reborrow
from time to time between the Restatement Effective Date and the
Maturity Date upon notice by S&H to the Administrative Agent given in
accordance with ss.2.6, such sums as are requested by S&H, PROVIDED that
the sum of the outstanding amount of the S&H Loans (after giving effect
to all amounts requested) PLUS S&H's Letter of Credit Exposure shall not
at any time exceed the lesser of (a) S&H's Sub-Commitment and (b) the
S&H Borrowing Base PLUS the lesser of (i) the Overadvance Borrowing Base
less the aggregate outstanding amount of the Overadvances of the other
Borrowers (after giving effect to all amounts requested) and (ii) S&H's
Sub-Overadvance Amount in effect at such time. The S&H Loans shall be
made PRO RATA in accordance with each Lender's Commitment Percentage.
Each request for a S&H Loan hereunder shall constitute a representation
and warranty by S&H that the conditions set forth in ss.12 and ss.13, in
the case of the initial S&H Loans to be made on the Restatement
Effective Date, and ss.13, in the case of all other S&H Loans, have been
satisfied on the date of such request.
2.1.4. INTENTIONALLY OMITTED.
2.1.5. OVERADVANCE FACILITY.
2.1.5(a). PERMITTED OVERADVANCE AMOUNT. As of any date of
determination, the sum of the Overadvances
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shall not exceed the lesser of (i) the Overadvance Borrowing
Base and (ii) the Maximum Overadvance Amount (the "Permitted
Overadvance Amount"). Overadvances shall be available on an
annual basis for a period of ninety (90) consecutive days
commencing not earlier than September 1 and ending not later
than the next following December 31. CML shall notify the
Administrative Agent in writing of the commencement of such
ninety (90) day period at least five (5) Business Days prior to
such commencement. Each Overadvance outstanding from time to
time shall bear interest calculated by reference to the Base
Rate pursuant to ss.2.5.
2.1.5(b). ALLOCATION OF MAXIMUM OVERADVANCE AMOUNT. On or
prior to July 31 of each year, CML shall by written notice to the
Administrative Agent allocate the Maximum Overadvance Amount for
such year among the Borrowers (such amount allocated to each
Borrower, a "Sub-Overadvance Amount"), PROVIDED that (a) the sum
of the Borrowers' Sub-Overadvance Amounts shall not exceed the
Maximum Overadvance Amount, (b) NordicTrack shall not have a
Sub-Overadvance Amount at any time in excess of the Maximum
Overadvance Amount, and (c) S&H shall not have a Sub-Overadvance
Amount at any time in excess of $5,000,000. CML shall have the
right, no more frequently than once in any calendar week (unless
otherwise permitted by the Administrative Agent) to request that
the Administrative Agent reallocate the unborrowed and unused
portion of the Maximum Overadvance Amount. Concurrently with its
delivery of the Borrowing Base Report for the previous week
pursuant to ss.9.4(f), CML shall give the Administrative Agent
written notice in the form of EXHIBIT H-1 hereto of each
reallocation of the Sub-Overadvance Amounts requested under this
ss.2.1.5(b) (an "Overadvance Reallocation Request"). Each such
notice shall specify (i) each Borrower's Sub-Overadvance Amount
as of the date of such notice, (ii) each Borrower's
Sub-Overadvance Amount after giving effect to such notice, and
(iii) the effective date of such reallocation, which date shall
be no less than two (2) Business Days after the date of such
notice. Promptly upon receipt of any such notice, the
Administrative Agent shall notify each of the Lenders thereof.
Upon giving effect to an Overadvance Reallocation Request, the
sum of the Borrowers' Sub-Overadvance Amounts shall not exceed
the Maximum Overadvance Amount. On the Overadvance Reallocation
Date, the Sub-Overadvance Amount of each of the Borrowers shall
be reallocated in accordance with the Overadvance Reallocation
Request. The Administrative Agent shall keep a record of each
Overadvance Reallocation Request and the Sub-Overadvance Amount
of each Borrower as in effect on each date and such record shall
be conclusive, in the absence of manifest error.
2.2. COMMITMENT FEE. Each Borrower agrees to pay to the Administrative
Agent for the accounts of the Lenders in accordance with their respective
Commitment Percentages a commitment fee calculated at the rate of one-half
percent (0.50%) per annum on the average daily amount during each calendar
quarter or portion thereof from the date hereof to the Maturity Date by which
such Borrower's Sub-Commitment MINUS such Borrower's Letter of Credit Exposure
exceeds the outstanding amount of such Borrower's Loans during such calendar
quarter. The commitment fee shall be payable quarterly in arrears on the first
day of each calendar quarter for the immediately preceding calendar quarter
commencing on
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the first such date following the date hereof, with a final payment on the
Maturity Date or any earlier date on which the Commitments shall terminate.
2.3. REALLOCATION AND REDUCTION OF TOTAL COMMITMENT.
2.3.1. REALLOCATION OF TOTAL COMMITMENT. On the Restatement
Effective Date, CML shall by written notice to the Administrative Agent
allocate the Total Commitment among the Borrowers (such amount allocated
to any Borrower and set forth on SCHEDULE 1, a "Sub-Commitment"),
PROVIDED that the sum of the Borrowers' Sub-Commitments shall not exceed
the Total Commitment. CML shall have the right, no more frequently than
once in any calendar month (unless otherwise permitted by the
Administrative Agent) to request that the Lenders reallocate the
unborrowed and unused portion of the Total Commitment. Concurrently with
its delivery of the Borrowing Base Report for the previous month
pursuant to ss.9.4(f), CML shall give to the Administrative Agent
written notice in the form of EXHIBIT H-2 hereto of each reallocation
requested under this ss.2.3.1 (a "Commitment Reallocation Request").
Each such notice shall specify (i) each Borrower's Sub-Commitment as of
the date of such notice, (ii) each Borrower's Sub-Commitment after
giving effect to such notice, and (iii) the effective date of such
reallocation, which date shall be no less than two (2) Business Days
after the date of such notice (the "Commitment Reallocation Date"). Upon
giving effect to a Commitment Reallocation Request, the sum of the
Borrowers' Sub-Commitments shall not exceed the Total Commitment in
effect at that time. On the Commitment Reallocation Date, the
Sub-Commitment of each of the Borrowers shall be reallocated in
accordance with the Commitment Reallocation Request and SCHEDULE 1 shall
be deemed revised to reflect the reallocation. The Administrative Agent
shall keep a record of each Commitment Reallocation Request and the
Sub-Commitment of each Borrower as in effect on each date and such
record shall be conclusive, in the absence of manifest error. A
reallocation of the Total Commitment under this ss.2.3.1 shall not be
deemed to be a reduction of the Total Commitment.
2.3.2. REDUCTION OF SUB-COMMITMENT. Each of the Borrowers and CML
shall have the right at any time and from time to time upon five (5)
Business Days prior written notice to the Administrative Agent to reduce
by $500,000 or an integral multiple thereof or terminate entirely its
Sub-Commitment or, in the case of CML, any Borrower's Sub-Commitment,
whereupon the Total Commitment shall be reduced by the amount specified
in such notice or, as the case may be, terminated and the Commitments of
the Lenders shall be reduced PRO RATA in accordance with their
respective Commitment Percentages of the amount specified in such notice
or, as the case may be, terminated. Promptly after receiving any notice
of any Borrower or CML delivered pursuant to this ss.2.3.2, the
Administrative Agent will notify the Lenders of the substance thereof.
Upon the effective date of any such reduction or termination, the
applicable Borrower shall pay to the Administrative Agent for the
respective accounts of the Lenders the full amount of any commitment fee
then accrued on the amount of the reduction. No reduction or termination
of the Commitments may be reinstated.
2.3.3. MANDATORY REDUCTION OF TOTAL COMMITMENT. Without limiting
the obligations of CML, the Borrowers and their Subsidiaries to comply
with the provisions of ss.10.5.2 of the Credit Agreement, in the event
of any disposition of
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assets by CML or any of its Subsidiaries (other than a Permitted
Disposition), the Total Commitment shall be reduced on the date of
receipt by CML or any of its Subsidiaries of any Net Cash Proceeds from
such disposition by an amount equal to such Net Cash Proceeds. On or
prior to the date of any such disposition, CML shall (a) allocate the
reduction of the Total Commitment among the Sub-Commitments of the
Borrowers as CML deems appropriate and (b) give to the Administrative
Agent written notice setting forth the Total Commitment allocation after
giving effect to any reduction pursuant to this ss.2.3.3. In the event
CML fails, by the date of the receipt by CML or any of its Subsidiaries
of any Net Cash Proceeds from such disposition, to reallocate the
Sub-Commitments of the Borrowers to give effect to such reductions, the
Administrative Agent shall reallocate the Sub-Commitments of the
Borrowers in its sole discretion.
2.4. THE NOTES.
2.4.1. THE NORDICTRACK NOTES. The NordicTrack Loans shall be
evidenced by promissory notes of NordicTrack in substantially the form
of EXHIBIT A-1 hereto (each a "NordicTrack Note"), dated as of the
Restatement Effective Date (or other such date on which a Lender may
become a party hereto in accordance with ss.20 hereof) and completed
with appropriate insertions. One NordicTrack Note shall be payable to
the order of each Lender in a principal amount equal to such Lender's
Commitment or, if less, the outstanding amount of all NordicTrack Loans
made by such Lender, plus interest accrued thereon, as set forth below.
NordicTrack irrevocably authorizes each Lender to make or cause to be
made, at or about the time of the Drawdown Date of any NordicTrack Loan
or at the time of receipt of any payment of principal on such Lender's
NordicTrack Note, an appropriate notation on such Lender's NordicTrack
Note Record reflecting the making of such NordicTrack Loan or (as the
case may be) the receipt of such payment. The outstanding amount of the
NordicTrack Loans set forth on such Lender's NordicTrack Note Record
shall be PRIMA FACIE evidence of the principal amount thereof owing and
unpaid to such Lender, but the failure to record, or any error in so
recording, any such amount on such Lender's NordicTrack Note Record
shall not limit or otherwise affect the obligations of NordicTrack
hereunder or under any NordicTrack Note to make payments of principal of
or interest on any NordicTrack Note when due.
2.4.2. INTENTIONALLY OMITTED.
2.4.3. THE S&H NOTES. The S&H Loans shall be evidenced by
promissory notes of S&H in substantially the form of EXHIBIT A-3 hereto
(each a "S&H Note"), dated as of the Restatement Effective Date (or
other such date on which a Lender may become a party hereto in
accordance with ss.20 hereof) and completed with appropriate insertions.
One S&H Note shall be payable to the order of each Lender in a principal
amount equal to such Lender's Commitment or, if less, the outstanding
amount of all S&H Loans made by such Lender, plus interest accrued
thereon, as set forth below. S&H irrevocably authorizes each Lender to
make or cause to be made, at or about the time of the Drawdown Date of
any S&H Loan or at the time of receipt of any payment of principal on
such Lender's S&H Note, an appropriate notation on such Lender's S&H
Note Record reflecting the making of such S&H Loan or (as the case may
be) the receipt of such payment. The outstanding amount of the S&H Loans
set forth on such Lender's S&H Note Record shall be PRIMA FACIE
34
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evidence of the principal amount thereof owing and unpaid to such
Lender, but the failure to record, or any error in so recording, any
such amount on such Lender's S&H's Note Record shall not limit or
otherwise affect the obligations of S&H hereunder or under any S&H Note
to make payments of principal of or interest on any S&H Note when due.
2.4.4. INTENTIONALLY OMITTED.
2.5. INTEREST ON LOANS. Except as otherwise provided in ss.5.11.
(a) Each Base Rate Loan which does not constitute an Overadvance
shall bear interest for the period commencing with the Drawdown Date
thereof and ending on the last day of the Interest Period with respect
thereto at the rate of three-quarters of one percent (0.75%) per annum
above the Base Rate.
(b) Each Eurodollar Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate of two and
three-quarters percent (2.75%) per annum above the Eurodollar Rate
determined for such Interest Period.
(c) Each Base Rate Loan which constitutes an Overadvance shall
bear interest for the period commencing with the Drawdown Date thereof
and ending on the last day of the Interest Period with respect thereto
at the rate of two percent (2.00%) per annum above the Base Rate.
(d) Each of the Borrowers promises to pay interest on each of its
Loans in arrears on each Interest Payment Date with respect thereto.
2.6. REQUESTS FOR LOANS.
2.6.1. LOAN REQUESTS. Each of the Borrowers shall give to the
Administrative Agent written notice in the form of EXHIBIT B hereto (or
telephonic notice confirmed in a writing in the form of EXHIBIT B
hereto) of each Loan requested by such Borrower hereunder (a "Loan
Request") not later than (i) 1:00 p.m. (Boston time) on the proposed
Drawdown Date of any Base Rate Loan and (ii) three (3) Eurodollar
Business Days prior to the proposed Drawdown Date of any Eurodollar Rate
Loan. Each such notice shall specify (A) the principal amount of the
Loan requested, (B) the proposed Drawdown Date of such Loan, (C) the
Interest Period for such Loan, (D) the Type of such Loan and (E) the
Borrower requesting such Loan. Promptly upon receipt of any such notice,
the Administrative Agent shall notify each of the Lenders thereof. Each
Loan Request shall be irrevocable and binding on the requesting Borrower
and shall obligate the requesting Borrower to accept the Loan requested
from the Lenders on the proposed Drawdown Date. Each Loan Request shall
be in a minimum aggregate amount of $100,000 or a larger integral
multiple thereof.
2.6.2. DAILY BORROWINGS. Notwithstanding the notice and minimum
amount requirements set forth in ss.2.6.1 but otherwise in accordance
with the terms and conditions of this Credit Agreement, the
Administrative Agent may, in its sole discretion and without conferring
with the Lenders, make Loans to each Borrower (i)
35
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by entry of credits to such Borrower's Controlled Disbursement Account
to cover checks or other charges which such Borrower has drawn or made
against such account or (ii) in an amount as otherwise requested by such
Borrower. Each Borrower hereby requests and authorizes the
Administrative Agent to make from time to time such Loans by means of
appropriate entries of such credits sufficient to cover checks and other
charges then presented. Each Borrower acknowledges and agrees that the
making of such Loans shall, in each case, be subject in all respects to
the provisions of this Credit Agreement as if they were Loans covered by
a Loan Request including, without limitation, the limitations set forth
in ss.2.1 and the requirements that the applicable provisions of
ss.ss.12 and 13 (in the case of Loans made on the Restatement Effective
Date) and ss.13 (in all other cases) be satisfied. All actions taken by
the Administrative Agent pursuant to the provisions of this ss.2.6.2
shall be conclusive and binding on the applicable Borrower absent the
Administrative Agent's gross negligence or willful misconduct. Loans
made pursuant to this ss.2.6.2 shall be Base Rate Loans until converted
in accordance with the provisions of the Credit Agreement and, prior to
a Settlement, such interest shall be solely for the account of the
Administrative Agent.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF LOAN. Each Borrower may
elect from time to time to convert any of its outstanding Loans
(excluding the Loans outstanding from time to time which constitute
Overadvances) to a Loan of another Type, PROVIDED that (i) with respect
to any such conversion of a Loan to a Base Rate Loan, the applicable
Borrower shall give the Administrative Agent at least three (3) Business
Days prior written notice of such election; (ii) with respect to any
such conversion of a Base Rate Loan to a Eurodollar Rate Loan, the
applicable Borrower shall give the Administrative Agent at least three
(3) Eurodollar Business Days prior written notice of such election;
(iii) with respect to any such conversion of a Eurodollar Rate Loan into
a Base Rate Loan, such conversion shall only be made on the last day of
the Interest Period with respect thereto; (iv) no Loan may be converted
into a Eurodollar Rate Loan when any Default or Event of Default has
occurred and is continuing; and (v) no Borrower may have more than two
(2) Eurodollar Rate Loans outstanding at any time. On the date on which
such conversion is being made each Lender shall take such action as is
necessary to transfer its Commitment Percentage of such Loans to its
Domestic Lending Office or its Eurodollar Lending Office, as the case
may be. All or any part of outstanding Loans of any Type may be
converted into a Loan of another Type as provided herein, PROVIDED that
any partial conversion shall be in an aggregate principal amount of
$3,000,000 or a whole multiple of $1,000,000 in excess thereof. Each
Conversion Request relating to the conversion of a Base Rate Loan to a
Eurodollar Rate Loan shall be irrevocable by the Borrowers.
2.7.2. CONTINUATION OF TYPE OF LOAN. Any Loan of any Type may be
continued as a Loan of the same Type upon the expiration of an Interest
Period with respect thereto by compliance by the applicable Borrower
with the notice provisions contained in ss.2.7.1; PROVIDED that no
Eurodollar Rate Loan may be continued as such when any Default or Event
of
36
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Default has occurred and is continuing, but shall be automatically
converted to a Base Rate Loan on the last day of the first Interest
Period relating thereto ending during the continuance of any Default or
Event of Default of which officers of the Administrative Agent active
upon the Borrowers' account have actual knowledge. In the event that the
applicable Borrower fails to provide any such notice with respect to the
continuation of any Eurodollar Rate Loan as such, then such Eurodollar
Rate Loan shall be automatically converted to a Base Rate Loan on the
last day of the first Interest Period relating thereto. The
Administrative Agent shall notify the Lenders promptly when any such
automatic conversion contemplated by this ss.2.7 is scheduled to occur.
2.7.3. EURODOLLAR RATE LOANS. Any conversion to or from Eurodollar
Rate Loans shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, the aggregate principal
amount of all Eurodollar Rate Loans having the same Interest Period
shall not be less than $3,000,000 or a whole multiple of $1,000,000 in
excess thereof.
2.8. SETTLEMENT; FAILURE TO MAKE FUNDS AVAILABLE.
2.8.1. SETTLEMENT AND FUNDING PROCEDURES. On each Settlement Date,
the Administrative Agent shall, not later than 1:00 p.m. (Boston time),
give telephonic or facsimile notice (i) to the Lenders and the Borrowers
of (A) the respective outstanding amount of Base Rate Loans made by the
Agent on behalf of the Lenders from the immediately preceding Settlement
Date through the close of business on the prior day and (B) the amount
of any Eurodollar Rate Loans to be made (following the giving of notice
pursuant to 2.6.1(ii)) on such date pursuant to a Loan Request and (ii)
to the Lenders of the amount (a "Settlement Amount") that each Lender
(the "Settling Lender") shall pay to effect a Settlement of any Loan. A
statement of the Administrative Agent submitted to the Lenders and the
applicable Borrower or to the Lenders with respect to any amounts owing
under this ss.2.8.1 shall be PRIMA FACIE evidence of the amount due and
owing. The Settling Lender shall, not later than 3:00 p.m. (Boston time)
on such Settlement Date, effect a wire transfer of immediately available
funds to the Administrative Agent in the amount of the Settlement
Amount. All funds advanced by any Lender as a Settling Lender pursuant
to this ss.2.8.1 shall foR all purposes be treated as a Loan made by
such Settling Lender to the applicable Borrower and all funds received
by any Lender pursuant to this ss.2.8.1 shall for alL purposes be
treated as repayment of amounts owed with respect to Loans made by such
Lender. In the event that any bankruptcy, reorganization, liquidation,
receivership or similar cases or proceedings in which any of the
Borrowers is a debtor prevent a Settling Lender from making any Loan to
effect a Settlement as contemplated hereby, such Settling Lender will
make such disposition and arrangements with the other Lenders with
respect to such Loans, either by way of purchase of participations,
distribution, PRO TANTO assignment of claims, subrogation or otherwise
as shall result in each Lender's share of the outstanding Loans being
equal, as nearly as may be, to such Lender's Commitment Percentage of
the outstanding amount of the Loans.
2.8.2. ADVANCES BY ADMINISTRATIVE AGENT. The Administrative Agent
may, unless notified to the contrary by any Lender prior to a Settlement
Date, assume that such Lender has made or will make available to the
Administrative Agent on such Settlement Date the amount of such Lender's
Settlement Amount, and the Administrative Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the
applicable Borrower a corresponding amount. If
37
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any Lender makes available to the Administrative Agent such amount on a
date after such Settlement Date, such Lender shall pay to the
Administrative Agent on demand an amount equal to the product of (i) the
average computed for the period referred to in clause (iii) below, of
the weighted average interest rate paid by the Administrative Agent for
federal funds acquired by the Administrative Agent during each day
included in such period, TIMES (ii) the amount of such Settlement
Amount, TIMES (iii) a fraction, the numerator of which is the number of
days that elapse from and including such Settlement Date to the date on
which the amount of such Settlement Amount shall become immediately
available to the Administrative Agent, and the denominator of which is
360. A statement of the Administrative Agent submitted to such Lender
with respect to any amounts owing under this paragraph shall be PRIMA
FACIE evidence of the amount due and owing to the Administrative Agent
by such Lender. If such Lender's Settlement Amount is not made available
to the Administrative Agent by such Lender within three (3) Business
Days following such Settlement Date, the Administrative Agent shall be
entitled to recover such amount from the applicable Borrower on demand,
with interest thereon at the rate per annum applicable to the Loans as
of such Settlement Date.
2.8.3. FAILURE TO MAKE FUNDS AVAILABLE. The failure or refusal of
any Lender to make available to the Administrative Agent at the
aforesaid time and place on any Settlement Date the amount of its
Settlement Amount (i) shall not relieve any other Lender from its
several obligations hereunder to make available to the Administrative
Agent the amount of such other Lender's Settlement Amount and (ii) shall
not impose upon such other Lender any liability with respect to such
failure or refusal or otherwise increase the Commitment of such other
Lender.
2.9. CHANGE IN BORROWING BASES. Each Borrowing Base shall be determined
weekly (or at such other interval as may be specified pursuant to ss.9.4(f)) by
thE Administrative Agent by reference to the Borrowing Base Report. The
Administrative Agent shall give to the Lenders and the applicable Borrower(s)
written notice of any change in such Borrower's Borrowing Base determined by the
Administrative Agent resulting from the Administrative Agent's determination to
add reserves or decrease the advance rates with respect to such Borrowing Base
based on commercial finance examinations, inventory appraisals or other credit
or collateral considerations, which notice shall be effective upon receipt by
the applicable Borrower(s). Prior to such time as the applicable Borrower
receives such notice, such Borrower's Borrowing Base shall be the amount in
effect in the absence of such notice. For purposes of this Credit Agreement and
the other Loan Documents, the Administrative Agent may assume, subject to
adjustment based upon the provisions of this Credit Agreement, that each
Borrower's Borrowing Base and the Overadvance Borrowing Base in effect on any
given date is such Borrower's Borrowing Base or the Overadvance Borrowing Base,
as the case may be, as indicated on the most recent Borrowing Base Report
delivered on a timely basis to the Lenders and the Administrative Agent in
accordance with the provisions of ss.9.4(f) hereof.
3. REPAYMENT OF THE LOANS.
3.1. MATURITY. Each Borrower promises to pay on the Maturity Date, and
there shall become absolutely due and payable on the Maturity Date, all of its
Loans outstanding on such date, together with any and all accrued and unpaid
interest thereon.
38
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3.2. MANDATORY REPAYMENTS OF LOANS.
3.2.1. NORDICTRACK LOANS. If at any time the sum of the
outstanding amount of the NordicTrack Loans and NordicTrack's Letter of
Credit Exposure exceeds the lesser of (i) NordicTrack's Sub-Commitment
in effect at such time and (ii) the NordicTrack Borrowing Base PLUS the
lesser of (x) the Overadvance Borrowing Base less the aggregate
outstanding amount of the Overadvances of the other Borrowers and (y)
NordicTrack's Sub-Overadvance Amount in effect at such time, then
NordicTrack shall immediately pay the amount of such excess to the
Administrative Agent for the respective accounts of the Lenders for
application: FIRST, to any Unpaid Reimbursement Obligations in respect
of Letters of Credit issued at the request of NordicTrack; second, to
the NordicTrack Loans; and THIRD, to provide to the Administrative Agent
cash collateral for Reimbursement Obligations in respect of Letters of
Credit issued at the request of NordicTrack as contemplated by ss.4.2(b)
and (c). Each payment of anY Unpaid Reimbursement Obligations or
prepayment of NordicTrack Loans shall be allocated among the Lenders, in
proportion, as nearly as practicable, to each Unpaid Reimbursement
Obligation or (as the case may be) the respective unpaid principal
amount of each Lender's NordicTrack Note, with adjustments to the extent
practicable to equalize any prior payments or repayments not exactly in
proportion.
3.2.2. INTENTIONALLY OMITTED.
3.2.3. S&H LOANS. If at any time the sum of the outstanding amount
of the S&H Loans and S&H's Letter of Credit Exposure exceeds the lesser
of (i) S&H's Sub-Commitment in effect at such time and (ii) the S&H
Borrowing Base PLUS the lesser of (x) the Overadvance Borrowing Base
less the aggregate outstanding amount of the Overadvances of the other
Borrowers and (y) S&H's Sub-Overadvance Amount in effect at such time,
then S&H shall immediately pay the amount of such excess to the
Administrative Agent for the respective accounts of the Lenders for
application: FIRST, to any Unpaid Reimbursement Obligations in respect
of Letters of Credit issued at the request of S&H; SECOND, to the S&H
Loans; and THIRD, to provide to the Administrative Agent cash collateral
for Reimbursement Obligations in respect of Letters of Credit issued at
the request of S&H as contemplated by ss.4.2(b) and (c). Each payment of
anY Unpaid Reimbursement Obligations or prepayment of S&H Loans shall be
allocated among the Lenders, in proportion, as nearly as practicable, to
each Unpaid Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Lender's S&H Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.2.4. INTENTIONALLY OMITTED.
3.2.5. ANNUAL CLEAN-UP. During each fiscal year of the Borrowers,
for a period of forty-five (45) consecutive days commencing not earlier
than December 15 and ending not later than the next following July 31,
the aggregate amount of all Loans outstanding shall be zero. At the
beginning of each such forty-five (45) day period, the Borrowers shall
repay all Loans outstanding and within fourteen (14) days following the
commencement of such forty-five (45) day period, CML and the Borrowers
shall deliver to the Administrative Agent and the Lenders a certificate
39
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signed by the chief financial officer of CML notifying the
Administrative Agent and the Lenders of the commencement of such
forty-five (45) day period.
3.3. DEPOSITORY ARRANGEMENTS.
3.3.1. THE BORROWERS' DEPOSITORY ARRANGEMENTS. Each of the
Borrowers will (i) on or prior to the Original Closing Date, maintain a
depository concentration account (such Borrower's "Concentration
Account") with and under the control of the Administrative Agent, as
contemplated by the terms of this Credit Agreement, (ii) direct each
Agency Account Institution pursuant to the Agency Account Agreements
(whereby such Agency Account Institution shall, among other things,
waive any right of set off, other than for service charges and returns
incurred in connection therewith), to cause all funds held by such
Agency Account Institution in the Agency Accounts to be transferred
daily (or such other period as the Administrative Agent requests) to,
and only to, the Administrative Agent for deposit in such Borrower's
Concentration Account and (iii) direct its account debtors and obligors
on instruments or other obligors of such Borrower with respect to any of
the Collateral to make all payments on or with respect to any of the
Collateral due or to become due to such Borrower directly to such
Borrower's Concentration Account or the Agency Accounts. If,
notwithstanding the requirements of the foregoing sentence, any of the
Borrowers receives any cash proceeds of any of the Collateral, whether
in the form of money, checks or otherwise, such Borrower will hold such
cash proceeds in trust for the benefit of the Administrative Agent and
the Lenders and turn such cash proceeds promptly over to the
Administrative Agent in the identical form received by deposit to any
Agency Account or Concentration Account. The Administrative Agent shall,
(i) with respect to all funds and cash proceeds in the form of money,
checks and like items received in any Borrower's Concentration Account,
on the same Business Day on which the Administrative Agent determines
that good collected funds have been received, and prior to the final
collection of good collected funds, on a provisional basis until such
final collection, (ii) with respect to all funds and cash proceeds in
the form of a wire transfer received in any Borrower's Concentration
Account, on the same Business Day as the Administrative Agent's receipt
of such amounts (or such later date as the Administrative Agent
determines that good collected funds have been received) and (iii) with
respect to all funds and cash proceeds in the form of an automated
clearing house transfer received in any Borrower's Concentration
Account, on the next Business Day following the Administrative Agent's
receipt of such amounts (or such later date as the Administrative Agent
determines that good collected funds have been received), in each case,
apply to the principal of the applicable Borrower's Base Rate Loans and
then (after payment in full of all such Borrower's Base Rate Loans) to
the principal of the applicable Borrower's Eurodollar Rate Loans all
such funds and cash proceeds which were deposited to such Borrower's
Concentration Account and, so long as no Default or Event of Default has
occurred and is continuing, the Administrative Agent shall cause any
excess to be credited to the applicable Borrower's Operating Account.
From and after the occurrence and during the continuance of a Default or
an Event of Default, the Administrative Agent may, from time to time in
the Administrative Agent's discretion, retain any or all of such excess
to pay any Obligations then due and payable in accordance with ss.14.4
and to provide cash collateral for any Obligations not then duE and
payable, including an amount equal to 105% of the Maximum Drawing Amount
to secure Reimbursement
40
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Obligations with respect to Letters of Credit issued at the request of
the applicable Borrower, with the Administrative Agent causing any
surplus, subject to the rights of any other persons entitled thereto, to
be credited to the applicable Borrower's Operating Account. For purposes
of the foregoing provisions of this ss.3.3.1, the Administrative Agent
shall not be deemed to have received any sucH cash proceeds on any day
unless received by the Administrative Agent before 4:00 p.m. (Boston
time) on such day. Each of the Borrowers further acknowledges and agrees
that any such provisional credit by the Administrative Agent shall be
subject to reversal if final collection in good collected funds of the
related item is not received by the Administrative Agent in accordance
with the Administrative Agent's customary procedures and practices for
collecting provisional items.
3.3.2. CML'S DEPOSITORY ARRANGEMENTS. CML will (i) on or prior to
the Original Closing Date, maintain a depository concentration account
(CML's "Concentration Account") with and under the control of the
Administrative Agent, as contemplated by the terms of this Credit
Agreement, (ii) direct each Agency Account Institution pursuant to the
Agency Account Agreements (whereby such Agency Account Institution
shall, among other things, waive any right of set off, other than for
service charges and returns incurred in connection therewith), to cause
all funds held by such Agency Account Institution in the Agency Accounts
to be transferred daily (or such other period as the Administrative
Agent requests) to, and only to, the Administrative Agent for deposit in
such Borrower's Concentration Account, (iii) direct its account debtors
and obligors on instruments or other obligors of CML with respect to any
of the Collateral to make all payments on or with respect to any of the
Collateral due or to become due to CML directly to CML's Concentration
Account or the Agency Accounts and (iv) cause any and all tax refunds
received by CML to be immediately deposited into CML's Concentration
Account. If, notwithstanding the requirements of the foregoing sentence,
CML receives any cash proceeds of any of the Collateral, whether in the
form of money, checks or otherwise, CML will hold such cash proceeds in
trust for the benefit of the Administrative Agent and the Lenders and
turn such cash proceeds promptly over to the Administrative Agent in the
identical form received by deposit to any Agency Account or
Concentration Account. The Administrative Agent shall, (i) with respect
to all funds and cash proceeds in the form of money, checks and like
items received in CML's Concentration Account, on the same Business Day
on which the Administrative Agent determines that good collected funds
have been received, and prior to the final collection of good collected
funds, on a provisional basis until such final collection, (ii) with
respect to all funds and cash proceeds in the form of a wire transfer
received in CML's Concentration Account, on the same Business Day as the
Administrative Agent's receipt of such amounts (or such later date as
the Administrative Agent determines that good collected funds have been
received), and (iii) with respect to all funds and cash proceeds in the
form of an automated clearing house transfer received in CML's
Concentration Account, on the next Business Day following the
Administrative Agent's receipt of such amounts (or such later date as
the Administrative Agent determines that good collected funds have been
received), in each case, apply first, to the principal of the Borrowers'
Base Rate Loans and then (after payment in full of the Borrowers' Base
Rate Loans) to the principal of the Borrowers' Eurodollar Rate Loans, in
each case in such proportions as the Administrative Agent shall
determine in its sole discretion all such funds and cash proceeds which
were deposited to CML's Concentration Account and, so long as no
41
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Default or Event of Default has occurred and is continuing, the
Administrative Agent shall cause any excess to be credited to CML's
Operating Account. From and after the occurrence and during the
continuance of a Default or an Event of Default, the Administrative
Agent may, from time to time in the Administrative Agent's discretion,
retain any or all of such excess to pay any Obligations then due and
payable in accordance with ss.14.4 and to provide cash collateral for
any Obligations not then duE and payable, including an amount equal to
105% of the Maximum Drawing Amount to secure Reimbursement Obligations
of the Borrowers and CML, with the Administrative Agent causing any
surplus, subject to the rights of any other persons entitled thereto, to
be credited to CML's Operating Account. For purposes of the foregoing
provisions of this ss.3.3.2, the Administrative Agent shall not be
deemed to have received any sucH cash proceeds on any day unless
received by the Administrative Agent before 4:00 p.m. (Boston time) on
such day. CML further acknowledges and agrees that any such provisional
credit by the Administrative Agent shall be subject to reversal if final
collection in good collected funds of the related item is not received
by the Administrative Agent in accordance with the Administrative
Agent's customary procedures and practices for collecting provisional
items.
3.3.3. THE OTHER GUARANTORS' DEPOSITORY ARRANGEMENTS. Each of the
Guarantors not subject to ss.ss.3.3.1 or 3.3.2 will (i) direct each
Agency AccoUnt Institution pursuant to the Agency Account Agreements
(whereby such Agency Account Institution shall, among other things,
waive any right of set off, other than for service charges and returns
incurred in connection therewith), to cause all funds held by such
Agency Account Institution in the Agency Accounts to be transferred
daily (or such other period as the Administrative Agent requests) to,
and only to, the Administrative Agent for deposit in the Concentration
Account of the Borrower which is such Guarantor's direct or indirect
parent, in accordance with this ss.3.3.3 and (ii) direct its account
debtors and obligors on instruments or other obligors of such Guarantor
with respect to any of the Collateral to make all payments on or with
respect to any of the Collateral due or to become due to such Guarantor
directly to the Concentration Account of such Guarantor's direct or
indirect parent or the Agency Accounts of such Guarantor or such
Guarantor's direct or indirect parent. If, notwithstanding the
requirements of the foregoing sentence, any of the Guarantors receives
any cash proceeds of any of the Collateral, whether in the form of
money, checks or otherwise, such Guarantor will hold such cash proceeds
in trust for the benefit of the Administrative Agent and the Lenders and
turn such cash proceeds promptly over to the Administrative Agent in the
identical form received by deposit to any Agency Account or
Concentration Account. The Administrative Agent shall, (i) with respect
to all funds and cash proceeds in the form of money checks and like
items received in any Borrower's or CML's Concentration Account, on the
same Business Day on which the Administrative Agent determines that good
collected funds have been received, and prior to the final collection of
good collected funds, on a provisional basis until such final
collection, (ii) with respect to all funds and cash proceeds in the form
of a wire transfer received in any Borrower's or CML's Concentration
Account, on the same Business Day as the Administrative Agent's receipt
of such amounts (or such later date as the Administrative Agent
determines that good collected funds have been received), and (iii) with
respect to all funds and cash proceeds in the form of an automated
clearing house transfer received in any Borrower's or CML's
Concentration Account, on the next Business Day following
42
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the Administrative Agent's receipt of such amounts (or such later date
as the Administrative Agent determines that good collected funds have
been received), in each case, apply, in accordance with the provisions
of ss.3.3.1 or ss.3.3.2, as the case may be, all such funds and cash
proceeds so long as no Default or Event of Default has occurred and is
continuing, the Administrative Agent shall cause any excess to be
credited in accordance with the provisions of ss.3.3.1 or ss.3.3.2, as
the case may be. From and after the occurrence and during the
continuance oF a Default or an Event of Default, the Administrative
Agent may, from time to time in the Administrative Agent's discretion,
retain any or all of such excess to pay any Obligations then due and
payable in accordance with ss.14.4 and to provide casH collateral for
any Obligations not then due and payable, including an amount equal to
105% of the Maximum Drawing Amount to secure Reimbursement Obligations
of the Borrowers, with the Administrative Agent causing any surplus,
subject to the rights of any other persons entitled thereto, to be
credited in accordance with the provisions of ss.3.3.1 or ss.3.3.2, as
the case may be. For purposes of the foregoing provisions of tHis
ss.3.3.3, the Administrative Agent shall not be deemed to have received
any such casH proceeds on any day unless received by the Administrative
Agent before 4:00 p.m. (Boston time) on such day. Each of the Guarantors
subject to this ss.3.3.3 furtheR acknowledges and agrees that any such
provisional credit by the Administrative Agent shall be subject to
reversal if final collection in good collected funds of the related item
is not received by the Administrative Agent in accordance with the
Administrative Agent's customary procedures and practices for collecting
provisional items.
3.3.4. FEES AND EXPENSES; APPLICATION OF PAYMENT. Each of the
Borrowers and the Guarantors agrees to pay to the Administrative Agent
any and all reasonable fees, costs and expenses which the Administrative
Agent incurs in connection with the opening and maintaining of the
Concentration Accounts, the Controlled Disbursement Accounts and the
depositing for collection by the Administrative Agent of any check or
other item of payment. Absent gross negligence or willful misconduct by
the Administrative Agent, each of the Borrowers and each of the
Guarantors agrees to indemnify the Administrative Agent and to hold the
Administrative Agent harmless from and against any loss, cost or expense
sustained or incurred by the Administrative Agent on account of any
claims of third parties arising in connection with the Administrative
Agent's operation of the Concentration Account. Each partial prepayment
of Loans under this ss.3.3 shall be allocated among the Lenders iN
proportion, as nearly as practicable, to the respective unpaid principal
amount of each Lender's applicable Note, with adjustments to the extent
practicable to equalize any prior repayments not exactly in proportion.
3.4. OPTIONAL REPAYMENTS OF LOANS. Each Borrower shall have the right,
at its election, to repay the outstanding amount of its Loans, as a whole or in
part, at any time without penalty or premium, PROVIDED that any full or partial
prepayment of the outstanding amount of any Eurodollar Rate Loans pursuant to
this ss.3.4 may be made only on the last daY of the Interest Period relating
thereto. The applicable Borrower shall give the Administrative Agent, no later
than 1:00 p.m., Boston time, at least one (1) Business Day prior written notice
of any proposed prepayment pursuant to this ss.3.4 of Base Rate Loans, and three
(3) Eurodollar Business Days notice of any proposed prepayment pursuant to this
ss.3.4 oF Eurodollar Rate Loans, in each case specifying the proposed date of
prepayment of
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its Loans and the principal amount to be prepaid. Each such partial prepayment
of the Loans shall be in an integral multiple of $500,000 and shall be applied,
in the absence of instruction by the applicable Borrower, first to the principal
of the applicable Borrower's Base Rate Loans and then to the principal of the
applicable Borrower's Eurodollar Rate Loans. Each partial prepayment shall be
allocated among the Lenders, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Lender's applicable Note, with
adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion. Any prepayment of the Loans made pursuant to ss.3.3 shall
not be subject to the provisions of thiS ss.3.4.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the terms
and conditions hereof and the execution and delivery by any of the
Borrowers and CML of a letter of credit application on the Issuing
Bank's customary form (a "Letter of Credit Application"), the Issuing
Bank on behalf of the Lenders and in reliance upon the agreement of the
Lenders set forth in ss.4.1.4 and upon the representations anD
warranties of the applicable Borrower and CML contained herein, agrees,
in its individual capacity, to issue, extend and renew for the account
of such Borrower and CML one or more standby or documentary letters of
credit (individually, a "Letter of Credit"), in such form as may be
requested from time to time by the applicable Borrower and agreed to by
the Issuing Bank; PROVIDED, HOWEVER, that, after giving effect to such
request, (a) the sum of the aggregate Letter of Credit Exposure of the
Borrowers shall not exceed $40,000,000 at any one time and (b) the sum
of (i) each Borrower's Letter of Credit Exposure and (ii) the amount of
all Loans of such Borrower outstanding shall not exceed the lesser of
(A) such Borrower's Sub-Commitment and (B) such Borrower's Borrowing
Base PLUS the lesser of (x) the Overadvance Borrowing Base and (y) such
Borrower's Sub-Overadvance Amount less the aggregate Sub-Overadvance
Amounts allocated to other Borrowers.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Issuing Bank.
In the event that any provision of any Letter of Credit Application
shall be inconsistent with any provision of this Credit Agreement, then
the provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit issued,
extended or renewed hereunder shall, among other things, (i) provide for
the payment of sight drafts for honor thereunder when presented in
accordance with the terms thereof and when accompanied by the documents
described therein, (ii) subject to clause (iii) hereof, with respect to
documentary Letters of Credit, have a term of not more than one hundred
eighty (180) days from the date of issuance, extension or renewal
thereof (unless the Issuing Bank, in its sole discretion, shall have
agreed to a longer term of up to but not exceeding two hundred seventy
(270) days) and with respect to standby Letters of Credit, have a term
of not more than one (1) year from the date of issuance, extension or
renewal thereof, and (iii) have an expiry date no later than the date
which is fourteen (14) days (or, if the Letter of Credit is confirmed by
a confirmer or otherwise provides for one or more nominated persons,
forty-five (45)
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days) prior to the Maturity Date. Each Letter of Credit so issued,
extended or renewed shall be subject to the Uniform Customs.
4.1.4. REIMBURSEMENT OBLIGATIONS OF LENDERS. Each Lender severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Lender's Commitment
Percentage, to reimburse the Issuing Bank on demand for the amount of
each draft paid by the Issuing Bank under each Letter of Credit to the
extent that such amount is not reimbursed by the Borrowers or CML
pursuant to ss.4.2 (such agreement for a Lender being called herein the
"Letter of CrediT Participation" of such Lender).
4.1.5. PARTICIPATIONS OF LENDERS. Each such payment made by a
Lender shall be treated as the purchase by such Lender of a
participating interest in CML's and the Borrowers' Reimbursement
Obligations under ss.4.2 in an amount equal to sucH payment. Each Lender
shall share in accordance with its participating interest in any
interest which accrues pursuant to ss.4.2.
4.2. REIMBURSEMENT OBLIGATION OF CML AND THE BORROWERS. In order to
induce the Issuing Bank to issue, extend and renew each Letter of Credit and the
Lenders to participate therein, each Borrower and CML hereby agrees to reimburse
or pay to the Issuing Bank, for the account of the Issuing Bank or (as the case
may be) the Lenders, with respect to each Letter of Credit issued, extended or
renewed by the Issuing Bank hereunder at the request of such Borrower and CML,
(a) except as otherwise expressly provided in ss.4.2(b) and (c),
on each date thaT any draft presented under such Letter of Credit is
honored by the Issuing Bank, or the Issuing Bank otherwise makes a
payment with respect thereto, (i) the amount paid by the Issuing Bank
under or with respect to such Letter of Credit, and (ii) the amount of
any taxes, fees, charges or other costs and expenses whatsoever incurred
by the Issuing Bank or any Lender in connection with any payment made by
the Issuing Bank or any Lender under, or with respect to, such Letter of
Credit,
(b) upon the reduction (but not termination) of such Borrower's
Sub-Commitment to an amount less than the Maximum Drawing Amount with
respect to Letters of Credit issued at the request of such Borrower, an
amount equal to such difference, which amount shall be held by the
Issuing Bank for the benefit of the Lenders, the Issuing Bank and the
Administrative Agent as cash collateral for all Reimbursement
Obligations with respect to Letters of Credit issued at the request of
such Borrower, and
(c) upon the termination of the such Borrower's Sub-Commitment,
or the acceleration of the Reimbursement Obligations with respect to
Letters of Credit issued at the request of such Borrower in accordance
with ss.14, an amount equal to the theN Maximum Drawing Amount with
respect to Letters of Credit issued at the request of such Borrower,
which amount shall be held by the Issuing Bank for the benefit of the
Lenders, the Issuing Bank and the Administrative Agent as cash
collateral for all Reimbursement Obligations with respect to Letters of
Credit issued at the request of such Borrower.
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Each such payment shall be made to the Issuing Bank at the Issuing Bank's head
office located at 000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx in immediately
available funds. Interest on any and all amounts remaining unpaid by the
Borrowers under this ss.4.2 at any time froM the date such amounts become due
and payable (whether as stated in this ss.4.2, bY acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Issuing Bank on demand at the rate specified in ss.5.11 for overdue principal oN
the Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Issuing Bank
shall notify the applicable Borrower of the date and amount of the draft
presented or demand for payment and of the date and time when it expects to pay
such draft or honor such demand for payment. If the applicable Borrower or CML
fails to reimburse the Issuing Bank as provided in ss.4.2 on oR before the date
that such draft is paid or other payment is made by the Issuing Bank, the
Issuing Bank may at any time thereafter notify the Lenders of the amount of any
such Unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on
the Business Day next following the receipt of such notice, each Lender shall
make available to the Issuing Bank, at its head office located at 000 Xxxxxxx
Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx, in immediately available funds, such Lender's
Commitment Percentage of such Unpaid Reimbursement Obligation, together with an
amount equal to the product of (i) the average, computed for the period referred
to in clause (iii) below, of the weighted average interest rate paid by the
Issuing Bank for federal funds acquired by the Issuing Bank during each day
included in such period, TIMES (ii) the amount equal to such Lender's Commitment
Percentage of such Unpaid Reimbursement Obligation, TIMES (iii) a fraction, the
numerator of which is the number of days that elapse from and including the date
the Issuing Bank paid the draft presented for honor or otherwise made payment to
the date on which such Lender's Commitment Percentage of such Unpaid
Reimbursement obligation shall become immediately available to the Issuing Bank,
and the denominator of which is 360. The responsibility of the Issuing Bank to
CML, the Borrowers and the Lenders shall be only to determine that the documents
(including each draft) delivered under each Letter of Credit in connection with
such presentment shall be in conformity in all material respects with such
Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. Each Borrower's and CML's obligations under
this ss.4 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which any Borrower or CML may have or have had against the Issuing Bank, any
Lender, any Agent or any beneficiary of a Letter of Credit. Each Borrower and
CML further agrees with the Issuing Bank and the Lenders that the Issuing Bank
and the Lenders shall not be responsible for, and each Borrower's and CML's
Reimbursement Obligations under ss.4.2 shall not be affected by, among other
things, thE validity or genuineness of documents or of any endorsements thereon,
even if such documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among any Borrower,
CML, the beneficiary of any Letter of Credit or any financing institution or
other party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of any Borrower against the beneficiary of any Letter of
Credit or any such transferee. The Issuing Bank and the Lenders shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. Each Borrower and CML agrees that any action taken or
omitted by the Issuing Bank or any
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Lender under or in connection with each Letter of Credit and the related drafts
and documents, if done in good faith, shall be binding upon such Borrower and
CML and shall not result in any liability on the part of the Issuing Bank or any
Lender to such Borrower.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4, the
Issuing Bank shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Issuing Bank. The Issuing Bank shall be fully
justified in failing or refusing to take any action under this Credit Agreement
unless it shall first have received such advice or concurrence of the Majority
Lenders as it reasonably deems appropriate or it shall first be indemnified to
its reasonable satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Issuing Bank shall in all cases be fully protected in
acting, or in refraining from acting, under this Credit Agreement in accordance
with a request of the Majority Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon the Lenders and all future
holders of the Notes or of a Letter of Credit Participation.
4.6. LETTER OF CREDIT FEE. Each Borrower shall, quarterly in arrears on
the first day of each calendar quarter for the immediately preceding calendar
quarter, pay a fee (in each case, a "Letter of Credit Fee") to the Issuing Bank
(i) in respect of each standby Letter of Credit issued at the request of such
Borrower equal to two and one-half percent (2.50%) per annum of the face amount
of such standby Letter of Credit, and (ii) in respect of each documentary Letter
of Credit issued at the request of such Borrower equal to one and three-eighths
percent (1.375%) of the face amount of such documentary Letter of Credit. The
Issuing Bank shall, in turn, remit to each Lender its PRO RATA portion of such
Letter of Credit Fee. In addition, the applicable Borrower shall pay to the
Issuing Bank, for its own account, on the date of issuance, or any extension or
renewal of any Letter of Credit and at such other time or times as such charges
are customarily made by the Issuing Bank, a fronting fee equal to one-eighth
percent (0.125%) of the face amount of such Letter of Credit and the Issuing
Bank's standard issuance, processing, negotiation, amendment and administrative
fees, determined in accordance with customary fees and charges for similar
facilities.
5. CERTAIN GENERAL PROVISIONS.
5.1. CLOSING FEE. The Borrowers jointly and severally agree to pay to
the Administrative Agent on the Original Closing Date a closing fee in the
amount set forth in the Fee Letter.
5.2. ADMINISTRATIVE AGENT'S FEE. The Borrowers jointly and severally
shall pay to the Administrative Agent an Administrative Agent's fee as provided
in the Fee Letter.
5.3. FUNDS FOR PAYMENTS.
5.3.1. PAYMENTS TO ADMINISTRATIVE AGENT. All payments of
principal, interest, Reimbursement Obligations, commitment fees, Letter
of Credit Fees and any other amounts due hereunder or under any of the
other Loan Documents shall be
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made to the Administrative Agent, for the respective accounts of the
Lenders and the Administrative Agent, at the Administrative Agent's Head
Office or at such other location in the Boston, Massachusetts area that
the Administrative Agent may from time to time designate, in each case
in immediately available funds.
5.3.2. NO OFFSET, ETC. All payments by the Borrowers hereunder and
under any of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any taxes,
levies, imposts, duties, charges, fees, deductions, withholdings,
compulsory loans, restrictions or conditions of any nature now or
hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless any
Borrower is compelled by law to make such deduction or withholding. If
any such obligation is imposed upon any Borrower with respect to any
amount payable by it hereunder or under any of the other Loan Documents,
such Borrower will pay to the Administrative Agent, for the account of
the Lenders or (as the case may be) the Administrative Agent, on the
date on which such amount is due and payable hereunder or under such
other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Lenders or the Administrative Agent to receive
the same net amount which the Lenders or the Administrative Agent would
have received on such due date had no such obligation been imposed upon
such Borrower. Such Borrower will deliver promptly to the Administrative
Agent certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by such
Borrower hereunder or under such other Loan Document.
5.4. COMPUTATIONS. All computations of interest on the Loans and of
commitment fees, Letter of Credit Fees or other fees shall, unless otherwise
expressly provided herein, be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to Eurodollar Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Note Records from time to
time shall be considered correct and binding on the applicable Borrower unless
within five (5) Business Days after receipt of any notice by the Administrative
Agent or any of the Lenders of such outstanding amount, the Administrative Agent
or such Lender shall notify such Borrower to the contrary.
5.5. INABILITY TO DETERMINE EURODOLLAR RATE. In the event, prior to the
commencement of any Interest Period relating to any Eurodollar Rate Loan, the
Administrative Agent shall determine or be notified by the Majority Lenders that
adequate and reasonable methods do not exist for ascertaining the Eurodollar
Rate that would otherwise determine the rate of interest to be applicable to any
Eurodollar Rate Loan during any Interest Period, the Administrative Agent shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrowers and the Lenders) to the Borrowers and the Lenders. In
such event (i) any Loan Request or Conversion Request with respect to Eurodollar
Rate Loans shall be automatically withdrawn and shall be deemed a request for
Base Rate Loans, (ii) each Eurodollar Rate Loan will automatically, on the last
day of the then current Interest Period relating thereto, become a Base Rate
Loan, and (iii) the obligations of the Lenders to make Eurodollar Rate Loans
shall be suspended until the
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Administrative Agent determine that the circumstances giving rise to such
suspension no longer exist, whereupon the Administrative Agent shall so notify
the Borrowers and the Lenders.
5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Lender to make or maintain
Eurodollar Rate Loans, such Lender shall forthwith give notice of such
circumstances to the Borrowers and the other Lenders and thereupon (i) the
commitment of such Lender to make Eurodollar Rate Loans or convert Loans of
another Type to Eurodollar Rate Loans shall forthwith be suspended and (ii) such
Lender's Loans then outstanding as Eurodollar Rate Loans, if any, shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such Eurodollar Rate Loans or within such earlier period as
may be required by law. Each Borrower hereby agrees promptly to pay the
Administrative Agent for the account of such Lender, upon demand by such Lender,
any additional amounts necessary to compensate such Lender for any costs
incurred by such Lender in making any conversion in accordance with this ss.5.6,
including any interest or fees payable by such Lender to lenders of funds
obtained bY it in order to make or maintain its Eurodollar Rate Loans hereunder.
5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Lender or the Administrative Agent by any central bank
or other fiscal, monetary or other authority (whether or not having the force of
law), shall:
(a) subject any Lender or the Administrative Agent to any tax,
levy, impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Credit Agreement, the other Loan Documents, any
Letters of Credit, such Lender's Commitment or the Loans (other than
taxes based upon or measured by the income or profits of such Lender or
the Administrative Agent), or
(b) materially change the basis of taxation (except for changes
in taxes on income or profits) of payments to any Lender of the
principal of or the interest on any Loans or any other amounts payable
to any Lender or the Administrative Agent under this Credit Agreement or
any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement) any
special deposit, reserve, assessment, liquidity, capital adequacy or
other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Lender, or
(d) impose on any Lender or the Administrative Agent any other
conditions or requirements with respect to this Credit Agreement, the
other Loan Documents, any Letters of Credit, the Loans, such Lender's
Commitment, or any class of loans, letters of credit or commitments of
which any of the Loans or such Lender's Commitment forms a part, and the
result of any of the foregoing is
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(i) to increase the cost to any Lender of making, funding,
issuing, renewing, extending or maintaining any of the Loans or
such Lender's Commitment or any Letter of Credit, or
(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Lender
or the Administrative Agent hereunder on account of such Lender's
Commitment, any Letter of Credit or any of the Loans, or
(iii) to require such Lender or the Administrative Agent
to make any payment or to forgo any interest or Reimbursement
Obligation or other sum payable hereunder, the amount of which
payment or forgone interest or Reimbursement Obligation or other
sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Lender or the
Administrative Agent from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Lender
or (as the case may be) the Administrative Agent at any time and from time to
time and as often as the occasion therefor may arise, pay to such Lender or the
Administrative Agent such additional amounts as will be sufficient to compensate
such Lender or the Administrative Agent for such additional cost, reduction,
payment or forgone interest or Reimbursement Obligation or other sum.
5.8. CAPITAL ADEQUACY. If after the date hereof any Lender or the
Administrative Agent determines that (i) the adoption of or change in any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) regarding capital requirements for banks or bank
holding companies or any change in the interpretation or application thereof by
a court or governmental authority with appropriate jurisdiction, or (ii)
compliance by such Lender or the Administrative Agent or any corporation
controlling such Lender or the Administrative Agent with any law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) of any such entity regarding capital adequacy, has the effect of
reducing the return on such Lender's or the Administrative Agent's capital as a
result of such Lender's obligations hereunder to a level below that which such
Lender or the Administrative Agent could have achieved but for such adoption,
change or compliance (taking into consideration such Lender's or the
Administrative Agent's then existing policies with respect to capital adequacy
and assuming full utilization of such entity's capital) by any amount deemed by
such Lender or (as the case may be) the Administrative Agent to be material,
then such Lender or the Administrative Agent may notify the Borrowers of such
fact. To the extent that the amount of such reduction in the return on capital
is not reflected in the Base Rate, the Borrowers agree to pay such Lender or (as
the case may be) the Administrative Agent for the amount of such reduction in
the return on capital as and when such reduction is determined upon presentation
by such Lender or (as the case may be) the Administrative Agent of a certificate
in accordance with ss.5.9 hereof. Each Lender shall allocate such cost increases
among its customers in good faith and on an equitable basis.
5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.ss.5.7 or 5.8 and a brief explanation of such amounts
which are due, submitted by any Lender or the Administrative Agent to the
Borrowers, shall be conclusive, absent manifest error, that such amounts are due
and owing.
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5.10. INDEMNITY. Each of the Borrowers agrees to indemnify each Lender
and to hold each Lender harmless from and against any loss, cost or expense
(including loss of anticipated profits) that such Lender may sustain or incur as
a consequence of (i) default by such Borrower in payment of the principal amount
of or any interest on any Eurodollar Rate Loans as and when due and payable,
including any such loss or expense arising from interest or fees payable by such
Lender to lenders of funds obtained by it in order to maintain its Eurodollar
Rate Loans, (ii) default by such Borrower in making a borrowing or conversion
after such Borrower has given (or is deemed to have given) a Loan Request or a
Conversion Request relating thereto in accordance with ss.2.6 or ss.2.7 or (iii)
the making of any payment oF a Eurodollar Rate Loan or the making of any
conversion of any such Loan to a Base Rate Loan on a day that is not the last
day of the applicable Interest Period with respect thereto, including interest
or fees payable by such Lender to lenders of funds obtained by it in order to
maintain any such Loans.
5.11. INTEREST AFTER DEFAULT.
5.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall
bear interest compounded monthly and payable on demand at a rate per
annum equal to two percent (2%) above the rate of interest otherwise
applicable thereto until such amount shall be paid in full (after as
well as before judgment).
5.11.2. AMOUNTS NOT OVERDUE. During the continuance of an Event of
Default the principal of the Loans not overdue shall, until such Event
of Default has been cured or remedied or such Event of Default has been
waived by the Majority Lenders pursuant to ss.27, bear interest at a
rate per annum equal to the rate of interesT applicable to overdue
principal pursuant to ss.5.11.1.
6. COLLATERAL SECURITY AND GUARANTIES.
6.1. SECURITY OF BORROWERS. The Obligations shall be secured by a
perfected first priority security interest (subject only to Permitted Liens
entitled to priority under applicable law) in all of the assets of the
Borrowers, (with such exceptions as are acceptable to the Majority Lenders),
including, without limitation, the stock of all Borrowers, Guarantors (other
than CML) and Foreign Guarantors, and all intercompany obligations owing to the
Borrowers, in each case wherever located and whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which any of such
Borrower is a party.
6.2. GUARANTY, FOREIGN GUARANTIES AND SECURITY OF GUARANTORS. The
Obligations shall also be guaranteed pursuant to the terms of the Guaranty and
the Foreign Guaranties. The obligations of the Guarantors under the Guaranty
shall be in turn secured by a perfected first priority security interest
(subject only to Permitted Liens entitled to priority under applicable law) in
all of the assets of each such Guarantor (with such exceptions as are acceptable
to the Majority Lenders) and all intercompany obligations owing to the
Guarantors, in each case wherever located and whether now owned or hereafter
acquired, pursuant to the terms of the Security Documents to which such
Guarantor is a party.
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7. GUARANTY.
7.1. GUARANTY OF PAYMENT AND PERFORMANCE. Each of the Guarantors hereby
jointly and severally guarantees to the Lenders, the Issuing Bank and the
Administrative Agent the full and punctual payment when due (whether at stated
maturity, by required pre-payment, by acceleration or otherwise), as well as the
performance, of all of the Obligations including all such which would become due
but for the operation of the automatic stay pursuant to ss.362(a) of the Federal
Bankruptcy Code and the operation of ss.ss.502(b) and 506(b) of the Federal
Bankruptcy Code. This Guaranty is an absolute, unconditional and continuing
guaranty of the full and punctual payment and performance of all of the
Obligations and not of their collectability only and is in no way conditioned
upon any requirement that any Agent, the Issuing Bank or any Lender first
attempt to collect any of the Obligations from the applicable Borrower or resort
to any collateral security or other means of obtaining payment. Should any of
the Borrowers default in the payment or performance of any of the Obligations,
the obligations of the Guarantors hereunder with respect to such Obligations in
default shall, upon demand by the Administrative Agent, become immediately due
and payable to the Administrative Agent, for the benefit of the Lenders, the
Issuing Bank and the Administrative Agent, without demand or notice of any
nature, all of which are expressly waived by each of the Guarantors. Payments by
the Guarantors hereunder may be required by the Administrative Agent on any
number of occasions. All payments by any of the Guarantors hereunder shall be
made to the Administrative Agent, in the manner and at the place of payment
specified therefor in ss.5 hereof, for the account of the Lenders, the IssuinG
Bank and the Administrative Agent.
7.2. GUARANTORS' AGREEMENT TO PAY ENFORCEMENT COSTS, ETC. Each of the
Guarantors further jointly and severally agrees, as the principal obligor and
not as a guarantor only, to pay to the Administrative Agent, on demand, all
reasonable costs and expenses (including court costs and legal expenses,
including the allocated cost of staff counsel) incurred or expended by any
Agent, the Issuing Bank or any Lender in connection with the Obligations, this
Guaranty and the enforcement thereof, together with interest on amounts
recoverable under this ss.7 from the time when such amounts become due untiL
payment, whether before or after judgment, at the rate of interest for overdue
principal set forth in ss.5.11 hereof, PROVIDED that if such interest exceeds
the maximum amount permitted tO be paid under applicable law, then such interest
shall be reduced to such maximum permitted amount.
7.3. WAIVERS BY THE GUARANTORS; LENDERS' FREEDOM TO ACT. Each of the
Guarantors agrees that the Obligations will be paid and performed strictly in
accordance with their respective terms, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such terms
or the rights of any Agent, the Issuing Bank or any Lender with respect thereto.
Each of the Guarantors waives promptness, diligence, presentment, demand,
protest, notice of acceptance, notice of any Obligations incurred and all other
notices of any kind, all defenses which may be available by virtue of any
valuation, stay, moratorium law or other similar law now or hereafter in effect,
any right to require the marshalling of assets of the applicable Borrower or any
other entity or other Person primarily or secondarily liable with respect to any
of the Obligations, and all suretyship defenses generally. Without limiting the
generality of the foregoing, each of the Guarantors agrees to the provisions of
any instrument evidencing, securing or otherwise executed in connection with any
Obligation and agrees that the obligations of such Guarantor hereunder shall not
be released or discharged, in whole or in part, or otherwise
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affected by (i) the failure of any Agent, the Issuing Bank or any Lender to
assert any claim or demand or to enforce any right or remedy against the
applicable Borrower or any other entity or other person primarily or secondarily
liable with respect to any of the Obligations; (ii) any extensions, compromise,
refinancing, consolidation or renewals of any Obligation; (iii) any change in
the time, place or manner of payment of any of the Obligations or any
rescissions, waivers, compromise, refinancing, consolidation or other amendments
or modifications of any of the terms or provisions of this Credit Agreement, the
other Loan Documents or any other agreement evidencing, securing or otherwise
executed in connection with any of the Obligation, (iv) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligation; (v) the adequacy of any rights which any Agent, the
Issuing Bank or any Lender may have against any collateral security or other
means of obtaining repayment of any of the Obligations; (vi) the impairment of
any collateral securing any of the Obligations, including without limitation the
failure to perfect or preserve any rights which any Agent, the Issuing Bank or
any Lender might have in such collateral security or the substitution, exchange,
surrender, release, loss or destruction of any such collateral security; or
(vii) any other act or omission which might in any manner or to any extent vary
the risk of such Guarantor or otherwise operate as a release or discharge of
such Guarantor, all of which may be done without notice to such Guarantor. To
the fullest extent permitted by law, each of the Guarantors hereby expressly
waives any and all rights or defenses arising by reason of (A) any "one action"
or "anti-deficiency" law which would otherwise prevent any Agent, the Issuing
Bank or any Lender from bringing any action, including any claim for a
deficiency, or exercising any other right or remedy (including any right of
set-off), against such Guarantor before or after such Agent's, the Issuing
Bank's or such Lender's commencement or completion of any foreclosure action,
whether judicially, by exercise of power of sale or otherwise, or (B) any other
law which in any other way would otherwise require any election of remedies by
any Agent, the Issuing Bank or any Lender.
7.4. UNENFORCEABILITY OF OBLIGATIONS AGAINST BORROWERS. If for any
reason any of the Borrowers has no legal existence or is under no legal
obligation to discharge any of the Obligations, or if any of the Obligations
have become irrecoverable from such Borrower by reason of such Borrower's
insolvency, bankruptcy or reorganization or by other operation of law or for any
other reason, this Guaranty shall nevertheless be binding on each of the
Guarantors to the same extent as if each such Guarantor at all times had been
the principal obligor on all such Obligations. In the event that acceleration of
the time for payment of any of the Obligations is stayed upon the insolvency,
bankruptcy or reorganization of such Borrower, or for any other reason, all such
amounts otherwise subject to acceleration under the terms of this Credit
Agreement, the other Loan Documents or any other agreement evidencing, securing
or otherwise executed in connection with any Obligation shall be immediately due
and payable by each of the Guarantors.
7.5. SUBROGATION; SUBORDINATION.
7.5.1. POSTPONEMENT OF RIGHTS AGAINST BORROWERS. Until the final
payment and performance in full in cash of all of the Obligations: none
of the Guarantors shall exercise any rights against any Borrower arising
as a result of payment by each such Guarantor hereunder, by way of
subrogation, reimbursement, restitution, contribution or otherwise, and
will not prove any claim in competition with any Agent, the Issuing Bank
or any Lender in respect of any payment hereunder in any bankruptcy,
insolvency or reorganization case or proceedings of any nature;
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none of the Guarantors will claim any setoff, recoupment or counterclaim
against any Borrower in respect of any liability of any such Guarantor
to such Borrower; and each of the Guarantors waives any benefit of and
any right to participate in any collateral security which may be held by
any Agent, the Issuing Bank or any Lender.
7.5.2. SUBORDINATION. The payment of any amounts due with respect
to any indebtedness of the Borrowers for money borrowed or credit
received now or hereafter owed to any of the Guarantors is hereby
subordinated to the prior payment in full in cash of all of the
Obligations. Each of the Guarantors agrees that, after the occurrence of
any default in the payment or performance of any of the Obligations,
such Guarantor will not demand, xxx for or otherwise attempt to collect
any such indebtedness of any Borrower to such Guarantor until all of the
Obligations shall have been paid in full. If, notwithstanding the
foregoing sentence, any of the Guarantors shall collect, enforce or
receive any amounts in respect of such indebtedness while any
Obligations are still outstanding, such amounts shall be collected,
enforced and received by such Guarantor as trustee for the Lenders, the
Issuing Bank and the Administrative Agent and be paid over to the
Administrative Agent, for the benefit of the Lenders, the Issuing Bank
and the Administrative Agent, on account of the Obligations without
affecting in any manner the liability of the Guarantors under the other
provisions of this Guaranty.
7.5.3. PROVISIONS SUPPLEMENTAL. The provisions of this ss.7.5
shall be supplemental to and not in derogation of any rights and
remedies of the Lenders, the Issuing Bank and the Administrative Agent
under any separate subordination agreement which the Administrative
Agent may at any time and from time to time enter into with any of the
Guarantors for the benefit of the Lenders, the Issuing Bank and the
Administrative Agent.
7.6. SECURITY; SETOFF. Each of the Guarantors grants to each of the
Admininstrative Agent, the Issuing Bank and the Lenders, as security for the
full and punctual payment and performance of all of the Guarantors' obligations
hereunder, a continuing lien on and security interest in all securities or other
property belonging to each such Guarantor now or hereafter held by such Agent,
the Issuing Bank or such Lender and in all deposits (general or special, time or
demand, provisional or final) and other sums credited by or due from such Agent,
the Issuing Bank or such Lender to such Guarantor or subject to withdrawal by
such Guarantor. Regardless of the adequacy of any collateral security or other
means of obtaining payment of any of the Obligations, each of the Administrative
Agent, the Issuing Bank and the Lenders is hereby authorized at any time and
from time to time, without notice to any of the Guarantors (any such notice
being expressly waived by each of the Guarantors) and to the fullest extent
permitted by law, to set off and apply such deposits and other sums against the
obligations of such Guarantor under this Guaranty, whether or not such Agent,
the Issuing Bank or such Lender shall have made any demand under this Guaranty
and although such obligations may be contingent or unmatured.
7.7. FURTHER ASSURANCES. Each of the Guarantors agrees that it will from
time to time, at the request of the Administrative Agent, do all such things and
execute all such documents as the Administrative Agent may consider necessary or
desirable to give full effect to this Guaranty and to perfect and preserve the
rights and powers of the Lenders, the Issuing Bank and the Administrative Agent
hereunder. Each of the Guarantors acknowledges and confirms that such Guarantor
itself has established its own adequate
54
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means of obtaining from the Borrowers on a continuing basis all information
desired by such Guarantor concerning the financial condition of the Borrowers
and that such Guarantor will look to the Borrowers and not to any Agent, the
Issuing Bank or any Lender in order for such Guarantor to keep adequately
informed of changes in any of the Borrowers' financial condition.
7.8. TERMINATION. Notwithstanding any termination of this Guaranty, this
Guaranty shall continue to be effective or be reinstated, if at any time any
payment made or value received with respect to any Obligation is rescinded or
must otherwise be returned by any Agent, the Issuing Bank or any Lender upon the
insolvency, bankruptcy or reorganization of any Borrower, or otherwise, all as
though such payment had not been made or value received.
7.9. SUCCESSORS AND ASSIGNS. This Guaranty shall be binding upon each of
the Guarantors, its successors and assigns, and shall inure to the benefit of
the Administrative Agent, the Issuing Bank and the Lenders and their respective
successors, transferees and assigns. Without limiting the generality of the
foregoing sentence, each Lender may, in accordance with the provisions of ss.20,
assign or otherwise transfer this Credit Agreement, thE other Loan Documents or
any other agreement or note held by it evidencing, securing or otherwise
executed in connection with the Obligations, or sell participations in any
interest therein, to any other entity or other person, and such other entity or
other person shall thereupon become vested, to the extent set forth in the
agreement evidencing such assignment, transfer or participation, with all the
rights in respect thereof granted to such Lender herein. None of the Guarantors
may assign any of its obligations hereunder.
8. REPRESENTATIONS AND WARRANTIES.
Each of the Borrowers and, to the extent the representation relates to
CML, CML represents and warrants to the Lenders and the Administrative Agent as
follows:
8.1. CORPORATE AUTHORITY.
8.1.1. INCORPORATION; GOOD STANDING. Each of CML, the Borrowers
and each of their Subsidiaries (i) is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation, (ii) has all requisite corporate power to own its
property and conduct its business as now conducted and as presently
contemplated, and (iii) is in good standing as a foreign corporation and
is duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified
would not have a materially adverse effect on the business, assets or
financial condition of CML, such Borrower or such Subsidiary.
8.1.2. AUTHORIZATION. The execution, delivery and performance of
this Credit Agreement and the other Loan Documents to which CML, any of
the Borrowers or any of their Subsidiaries is or is to become a party
and the transactions contemplated hereby and thereby (i) are within the
corporate authority of such Person, (ii) have been duly authorized by
all necessary corporate proceedings, (iii) do not conflict with or
result in any breach or contravention of any provision of law, statute,
rule or regulation to which CML, any of the Borrowers or any of their
Subsidiaries is subject or any judgment, order, writ, injunction,
license or permit
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applicable to CML, any of Borrower or any of their Subsidiaries and (iv)
do not conflict with any provision of the corporate charter or bylaws
of, or any agreement or other instrument binding upon, CML, any of the
Borrowers or any of their Subsidiaries.
8.1.3. ENFORCEABILITY. The execution and delivery of this Credit
Agreement and the other Loan Documents to which CML, any of the
Borrowers or any of their Subsidiaries is or is to become a party will
result in valid and legally binding obligations of such Person
enforceable against it in accordance with the respective terms and
provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights
and except to the extent that availability of the remedy of specific
performance or injunctive relief is subject to the discretion of the
court before which any proceeding therefor may be brought.
8.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
CML, any of the Borrowers and any of their Subsidiaries of this Credit Agreement
and the other Loan Documents to which CML, any of the Borrowers or any of their
Subsidiaries is or is to become a party and the transactions contemplated hereby
and thereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
8.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 8.3
hereto, CML, the Borrowers and their Subsidiaries own all of the assets
reflected in the consolidated balance sheet of CML, the Borrowers and their
Subsidiaries as at the Balance Sheet Date or acquired since that date (except
property and assets sold or otherwise disposed of in the ordinary course of
business since that date), subject to no rights of others, including any
mortgages, leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens.
8.4. FINANCIAL STATEMENTS AND PROJECTIONS.
8.4.1. FINANCIAL STATEMENTS. There has been furnished to each of
the Lenders (a) the consolidated balance sheet of CML, the Borrowers and
their Subsidiaries as at the Balance Sheet Date, and the consolidated
statements of income and cash flows of CML, the Borrowers and their
Subsidiaries for the fiscal year then ended, certified by Deloitte and
Touche LLP and (b) the consolidated balance sheet of CML, the Borrowers
and their Subsidiaries as at May 3, 1997 and the consolidated statements
of income and cash flows of CML, the Borrowers and their Subsidiaries
for the fiscal quarters then ended. All such balance sheets, statements
of income and statements of cash flows have been prepared in accordance
with generally accepted accounting principles and fairly present the
consolidated financial condition of CML, the Borrowers and their
Subsidiaries as at the close of business on the dates thereof and the
results of operations for the fiscal year or quarter, as the case may
be, then ended. There are no contingent liabilities of CML, any of the
Borrowers or any of their Subsidiaries as of May 3, 1997 involving
material amounts, known to the officers of CML or any the Borrowers,
which were not disclosed in the balance sheet as of May 3, 1997 or the
notes related thereto.
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8.4.2. PROJECTIONS. The projections of the annual operating
budgets of CML, the Borrowers and their Subsidiaries on a consolidated
basis, balance sheets and cash flow statements for the 1997 to 1998
fiscal years, copies of which have been delivered to each Lender,
disclose all assumptions made with respect to general economic,
financial and market conditions used in formulating such projections. To
the knowledge of CML, any of Borrowers or any of their Subsidiaries, no
facts exist that (individually or in the aggregate) would result in any
material change in any of such projections. The projections are based
upon reasonable estimates and assumptions, have been prepared on the
basis of the assumptions stated therein and reflect the reasonable
estimates of CML, the Borrowers and its Subsidiaries of the results of
operations and other information projected therein.
8.5. NO MATERIAL CHANGES, ETC.; SOLVENCY.
8.5.1. CHANGES. Since May 3, 1997 there has occurred no materially
adverse change in the financial condition, business or operations of
CML, the Borrowers and their Subsidiaries. Since the Balance Sheet Date
and except as set forth on SCHEDULE 8.5, CML has not made any
Distribution.
8.5.2. SOLVENCY. CML, each of the Borrowers and each of their
Subsidiaries, taken as a whole (after giving effect to the transactions
contemplated by this Credit Agreement and the other Loan Documents), is
Solvent. As used herein, "Solvent" shall mean such Person, (i) has
assets having a fair value in excess of its liabilities, (ii) has assets
having a fair value in excess of the amount required to pay its
liabilities on existing debts as such debts become absolute and matured,
and (iii) has, and expects to continue to have, access to adequate
capital for the conduct of its business and the ability to pay its debts
from time to time incurred in connection with the operation of its
business as such debts mature.
8.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of CML, the Borrowers
and their Subsidiaries possesses all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of its business substantially as now
conducted without known conflict with any rights of others.
8.7. LITIGATION. Except as set forth in SCHEDULE 8.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against CML, any of the Borrowers or any of their Subsidiaries before
any court, tribunal or administrative agency or board that, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the properties, assets, financial condition or business of CML, the
Borrowers and their Subsidiaries or materially impair the right of CML, the
Borrowers and their Subsidiaries, considered as a whole, to carry on business
substantially as now conducted by them, or result in any substantial liability
not adequately covered by insurance, or for which adequate reserves are not
maintained on the consolidated balance sheet of CML, the Borrowers and their
Subsidiaries, or which question the validity of this Credit Agreement or any of
the other Loan Documents, or any action taken or to be taken pursuant hereto or
thereto.
8.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of CML, any of the
Borrowers nor any of their Subsidiaries is subject to any charter, corporate or
other legal restriction, or any judgment, decree, order, rule or regulation that
has or is expected in the future to have a
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materially adverse effect on the business, assets or financial condition of CML,
any of the Borrowers or any of their Subsidiaries. None of CML, any of the
Borrowers nor any of their Subsidiaries is a party to any contract or agreement
that has or is expected, in the judgment of CML's officers, to have any
materially adverse effect on the business of CML, any of the Borrowers or any of
their Subsidiaries.
8.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of CML, any of
the Borrowers nor any of their Subsidiaries is in violation of any provision of
its charter documents, bylaws, or any agreement or instrument to which it may be
subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of CML, any of the Borrowers or any of their Subsidiaries.
8.10. TAX STATUS. Each of CML, the Borrowers and their Subsidiaries (i)
have made or filed all federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which any of them is
subject, (ii) have paid all taxes and other governmental assessments and charges
shown or determined to be due on such returns, reports and declarations, except
those being contested in good faith and by appropriate proceedings and (iii)
have set aside on their books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. Except as set forth on SCHEDULE 8.10, there are no unpaid
taxes in any material amount claimed to be due by the taxing authority of any
jurisdiction, and none of the officers of CML or any of the Borrowers knows of
any basis for any such claim.
8.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
8.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of CML, any of
the Borrowers nor any of their Subsidiaries is a "holding company", or a
"subsidiary company" of a "holding company", or an affiliate" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935; nor is it an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms are defined in
the Investment Company Act of 1940.
8.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of CML, any of the Borrowers or any of their
Subsidiaries or any rights relating thereto.
8.14. PERFECTION OF SECURITY INTEREST. All filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary or advisable, under applicable law, to
establish and perfect the Administrative Agent's security interest in the
Collateral (with such exceptions as are acceptable to the Majority Lenders). The
Collateral and the Administrative Agent's rights with respect to the Collateral
are not subject to any setoff, claims, withholdings or other defenses. CML, one
of the Borrowers or one of their Subsidiaries, as specified in the
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Security Documents, is the owner of the Collateral free from any lien, security
interest, encumbrance and any other claim or demand, except for Permitted Liens.
8.15. CERTAIN AFFILIATE TRANSACTIONS. None of CML, any of the Borrowers
nor any of their Subsidiaries is a party to any transaction in violation of
ss.10.11. None of CML, any oF Borrowers nor any of their Subsidiaries is a party
to any tax sharing agreement.
8.16. EMPLOYEE BENEFIT PLANS.
8.16.1. IN GENERAL. Each Employee Benefit Plan has been maintained
and operated in compliance in all material respects with the provisions
of ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions.
The Borrowers have heretofore delivered to the Administrative Agent the
most recently completed annual report, Form 5500, with all required
attachments, and actuarial statement required to be submitted under
ss.103(d) of ERISA, with respect to each Guaranteed Pension Plan.
8.16.2. TERMINABILITY OF WELFARE PLANS. Under each Employee
Benefit Plan which is an employee welfare benefit plan within the
meaning of ss.3(1) or ss.3(2)(B) of ERISA, no benefits are due unless
the event giving rise to the benefit entitlement occurs prior to plan
termination (except as required by Title I, Subtitle B, Part 6 of
ERISA). Any of CML, the Borrowers or an ERISA Affiliate, as appropriate,
may terminate each such Plan at any time (or at any time subsequent to
the expiration of any applicable bargaining agreement) in the discretion
of CML, such Borrower or such ERISA Affiliate without liability to any
Person other than for benefits accrued prior to such termination.
8.16.3. GUARANTEED PENSION PLANS. None of CML, any of the
Borrowers nor any ERISA Affiliate maintains or operates a Guaranteed
Pension Plan.
8.16.4. MULTIEMPLOYER PLANS. None of CML, any of the Borrowers nor
any ERISA Affiliate maintains or operates a Multiemployer Plan.
8.17. REGULATIONS U, X AND G. The proceeds of the Loans shall be used
solely for working capital and general corporate purposes of the Borrowers. Each
of the Borrowers will obtain Letters of Credit solely for working capital
purposes. No portion of any Loan is to be used, and no portion of any Letter of
Credit is to be obtained, for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U, X and G of
the Board of Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and
224.
8.18. ENVIRONMENTAL COMPLIANCE. The Borrowers have taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and have determined that:
(a) none of CML, any Borrower, any of their Subsidiaries nor any
of their operations is in violation, or alleged violation, of any
judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under
the Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and
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Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments
and Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating
to health, safety or the environment (hereinafter "Environmental Laws"),
which violation could have a material adverse effect on the environment
or the business, assets or financial condition of CML, any of the
Borrowers or any of their Subsidiaries;
(b) except as set forth on SCHEDULE 8.18 attached hereto, none of
CML, any of the Borrowers nor any of their Subsidiaries has received
notice from any third party including, without limitation, any federal,
state or local governmental authority, (i) that any one of them has been
identified by the United States Environmental Protection Agency ("EPA")
as a potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X;
(ii) that any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any
hazardouS substances as defined by 42 U.S.C. ss.9601(14), any pollutant
or contaminant as defineD by 42 U.S.C. ss.9601(33) and any toxic
substances, oil or hazardous materials or otheR chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances") which any
one of them has generated, transported or disposed of has been found at
any site at which a federal, state or local agency or other third party
has conducted or has ordered that CML, any Borrower or any of their
Subsidiaries conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall
be a named party to any claim, action, cause of action, complaint, or
legal or administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection with
the release of Hazardous Substances;
(c) except as set forth on SCHEDULE 8.18 attached hereto: (i) no
portion of the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance with
applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by CML, the Borrowers, their Subsidiaries or operators of
their properties, no Hazardous Substances have been generated or are
being used on the Real Estate except in accordance with applicable
Environmental Laws; (iii) there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of CML, the Borrowers or their Subsidiaries, which releases
would have a material adverse effect on the value of any of the Real
Estate or adjacent properties or the environment; (iv) to the best of
CML's and the Borrowers' knowledge, there have been no releases on,
upon, from or into any real property in the vicinity of any of the Real
Estate which, through soil or groundwater contamination, may have come
to be located on, and which would have a material adverse effect on the
value of, the Real Estate; and (v) in addition, to the best of CML's and
the Borrowers' knowledge, any Hazardous Substances that have been
generated on any of the Real Estate have been transported offsite only
by carriers having an identification number issued by the EPA, treated
or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
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transporters and facilities have been and are, to the best of CML's and
each Borrowers' knowledge, operating in compliance with such permits and
applicable Environmental Laws; and
(d) except as set forth on SCHEDULE 8.18 attached hereto, none of
CML, the Borrowers and their Subsidiaries, any Mortgaged Property or any
of the other Real Estate is subject to any applicable environmental law
requiring the performance of Hazardous Substances site assessments, or
the removal or remediation of Hazardous Substances, or the giving of
notice to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or as a
condition to the recording of any Mortgage or to the effectiveness of
any other transactions contemplated hereby.
8.19. SUBSIDIARIES, ETC. Set forth on SCHEDULE 8.19 hereto is a complete
and accurate list of all Subsidiaries of CML, each Borrower and each of their
Subsidiaries, showing as of the Restatement Effective Date (as to each such
Subsidiary) the jurisdiction of its incorporation, the number of shares of each
class of capital stock authorized and the number outstanding on the Restatement
Effective Date and the percentage of the outstanding shares of each such class
owned (directly or indirectly) by CML, such Borrower or such Subsidiary at the
Restatement Effective Date and the number of shares covered by all outstanding
options, warrants, rights of conversion or purchase and similar rights at the
date hereof. All of the outstanding capital stock of all such Subsidiaries has
been validly issued, is fully paid and non-assessable and is owned by CML or one
or more of its Subsidiaries free and clear of all liens except those created by
the Security Documents. Except as set forth on SCHEDULE 8.19 hereto, none of
CML, any of the Borrowers nor any of their Subsidiaries is engaged in any joint
venture or partnership with any other Person. None of the Guarantors (other than
the Borrowers and CML) or the Foreign Guarantors has assets having an aggregate
net book value in excess of $1,000,000.
8.20. BANK ACCOUNTS. SCHEDULE 8.20 sets forth the account numbers,
location and a description of all bank accounts of CML, each of the Borrowers
and each of their Subsidiaries.
8.21. CHIEF EXECUTIVE OFFICES. Set forth on SCHEDULE 8.21 hereto is a
complete and accurate list of the chief executive office of each of CML, each
Borrower and each of their Subsidiaries, at which location such Person keeps its
books and records.
8.22. FISCAL YEAR. Each of CML, each Borrower and each of their
Subsidiaries has a fiscal year which is the twelve (12) months ending on July 31
of each year.
8.23. DISCLOSURE No representation or warranty made by CML or any of the
Borrowers in this Credit Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to any Agent or any Lender by or on
behalf of CML and the Borrowers in connection with any of the transactions
contemplated by any of the Loan Documents contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained therein not misleading in light of the circumstances in
which they are made.
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8.24. INSURANCE. CML, the Borrowers and each of their Subsidiaries
maintains with financially sound and reputable insurers insurance with respect
to its properties and businesses against such casualties and contingencies as
are in accordance with sound business practices, with the details of such
coverage being more fully described on SCHEDULE 8.24 hereto.
9. AFFIRMATIVE COVENANTS OF CML AND THE BORROWERS.
Each of CML and each of the Borrowers covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Lender has any obligation to make any Loans or the Issuing
Bank has any obligation to issue, extend or renew any Letters of Credit:
9.1. PUNCTUAL PAYMENT. Each Borrower will duly and punctually pay or
cause to be paid the principal and interest on its Loans, all Reimbursement
Obligations in respect of letters of credit issued at the request of such
Borrower, the Letter of Credit Fees relating to such Letters of Credit, its
commitment fees, the Administrative Agent's fee and all other amounts provided
for in this Credit Agreement and the other Loan Documents to which CML, any of
the Borrowers or any of their Subsidiaries is a party, all in accordance with
the terms of this Credit Agreement and such other Loan Documents.
9.2. MAINTENANCE OF OFFICE. Each of CML and each of the Borrowers will
maintain its chief executive office at the location set forth on SCHEDULE 8.21
hereto, or at such other place in the United States of America as CML or such
Borrower shall designate upon prior written notice to the Administrative Agent,
where notices, presentations and demands to or upon such Person in respect of
the Loan Documents to which such Person is a party may be given or made.
9.3. RECORDS AND ACCOUNTS. Each of CML and each of the Borrowers will
(i) keep, and cause each of its Subsidiaries to keep, true and accurate records
and books of account in which full, true and correct entries will be made in
accordance with generally accepted accounting principles and (ii) maintain
adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and the
properties of its Subsidiaries, contingencies, and other reserves.
9.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. CML and the
Borrowers will deliver to each of the Lenders:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of CML, the
consolidated balance sheet of CML and its Subsidiaries and the
consolidating balance sheets of CML and its Subsidiaries, each as at the
end of such year, and the related consolidated statement of income and
consolidated statement of cash flow and consolidating statements of
income and consolidating statements of cash flow for such year, each
setting forth in comparative form the figures for the previous fiscal
year and all such consolidated and consolidating statements to be in
reasonable detail, prepared in accordance with generally accepted
accounting principles, and all such consolidated statements to be
certified without qualification by Deloitte and Touche LLP or by other
independent certified public accountants satisfactory to the
Administrative Agent, together with a written statement from such
accountants to the effect that they have read a copy of
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this Credit Agreement, and that, in making the examination necessary to
said certification, they have obtained no knowledge of any Default or
Event of Default, or, if such accountants shall have obtained knowledge
of any then existing Default or Event of Default they shall disclose in
such statement any such Default or Event of Default; PROVIDED that such
accountants shall not be liable to the Lenders for failure to obtain
knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal
quarters in each fiscal year of CML, copies of the unaudited
consolidated balance sheet of CML and its Subsidiaries and the unaudited
consolidating balance sheets of CML and its Subsidiaries, each as at the
end of such quarter, and the related consolidated statement of income
and consolidated statement of cash flow and consolidating statements of
income and consolidating statements of cash flow for the portion of
CML's fiscal year then elapsed, all in reasonable detail and prepared in
accordance with generally accepted accounting principles, together with
a certification by the principal financial or accounting officer of CML
that the information contained in such financial statements fairly
presents the financial position of CML and its Subsidiaries on the date
thereof (subject to year-end adjustments);
(c) as soon as practicable, but in any event within thirty (30)
days after the end of the first eleven months in each fiscal year of
CML, copies of the unaudited monthly consolidated balance sheet of CML
and its Subsidiaries and the unaudited consolidating balance sheets of
CML and its Subsidiaries, each as at the end of such month and the
related consolidated statement of income, consolidated statement of cash
flow, consolidating statements of income and consolidating statements of
cash flow for such month, each prepared in accordance with generally
accepted accounting principles, together with a certification by the
principal financial or accounting officer of CML that the information
contained in such financial statements fairly presents the financial
condition of CML and its Subsidiaries on the date thereof (subject to
quarter and year-end adjustments);
(d) simultaneously with the delivery of the financial statements
referred to in subsections (a) and (b) above, a statement certified by
the principal financial or accounting officer of CML in substantially
the form of EXHIBIT E hereto (a "COMPLIANCE CERTIFICATE") and setting
forth in reasonable detail computations evidencing compliance with the
covenants contained in ss.11 and (if applicable) reconciliations to
reflecT changes in generally accepted accounting principles since the
Balance Sheet Date;
(e) contemporaneously with the filing or mailing thereof, copies
of all material of a financial nature filed with the Securities and
Exchange Commission or sent to the stockholders of CML;
(f) (i) within three (3) Business Days after the end of each
calendar week or at such earlier time as the Administrative Agent may
reasonably request, a Borrowing Base Report setting forth the Borrowing
Bases as at the end of such calendar week or other date so requested by
the Administrative Agent and (ii) within fifteen (15) days after the end
of each calendar month, a Borrowing Base Report setting forth the
Borrowing Bases as at the end of such calendar month, containing
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such adjustments to the applicable weekly Borrowing Base Reports as may
be appropriate;
(g) within fifteen (15) days after the end of each calendar
month, an Accounts Receivable aging report with respect to the
Borrowers;
(h) from time to time as the Administrative Agent may request
detailed management prepared reports summarizing the Borrowers'
inventory, including information on the aging and obsolence of such
inventory;
(i) as soon as practicable, but in any event not later than
thirty (30) days prior to the beginning of each fiscal year,
management-prepared financial forecasts of CML and its Subsidiaries with
respect to such fiscal year;
(j) prior to the opening by any Borrower of any new retail store,
distribution center or manufacturing facility at which Eligible
Inventory or Eligible NordicTrack Inventory, as the case may be, is to
be located, a supplement to SCHEDULE 2 hereto in the form of EXHIBIT I
hereto, listing any additions or deletions to the list of retail stores,
distribution centers and manufacturing facilities of the Borrowers
located in the United States, which supplement, together with SCHEDULE 2
hereto and any prior supplements, shall be deemed to constitute SCHEDULE
2 for all purposes of this Credit Agreement; and
(k) from time to time such other financial data and information
(including accountants' management letters) as any Agent or any Lender
may reasonably request.
9.5. NOTICES.
9.5.1. DEFAULTS. The Borrowers and CML will promptly notify the
Administrative Agent and each of the Lenders in writing of the
occurrence of any Default or Event of Default. If any Person shall give
any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under (a) this Credit
Agreement or (b) any other note, evidence of indebtedness, indenture or
other obligation to which or with respect to which CML, any Borrower or
any of their Subsidiaries is a party or obligor, whether as principal,
guarantor, surety or otherwise and the aggregate amount of such
obligations referred to in this clause (b) in default is in excess of
$1,000,000, the Borrowers and CML shall forthwith give written notice
thereof to the Administrative Agent and each of the Lenders, describing
the notice or action and the nature of the claimed default.
9.5.2. ENVIRONMENTAL EVENTS. The Borrowers and CML will promptly
give notice to the Administrative Agent and each of the Lenders (i) of
any violation of any Environmental Law that CML, any of the Borrowers or
any of their Subsidiaries reports in writing or is reportable by such
Person in writing (or for which any written report supplemental to any
oral report is made) to any federal, state or local environmental agency
and (ii) upon becoming aware thereof, of any inquiry, proceeding,
investigation, or other action, including a notice from any agency of
potential environmental liability, of any federal, state or local
environmental agency or board, that has the potential to materially
affect the assets, liabilities, financial
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conditions or operations of CML, any of the Borrowers or any of their
Subsidiaries, or the Administrative Agent's mortgages, deeds of trust or
security interests pursuant to the Security Documents.
9.5.3. NOTIFICATION OF CLAIM AGAINST COLLATERAL. The Borrowers and
CML will, immediately upon becoming aware thereof, notify the
Administrative Agent and each of the Lenders in writing of any setoff,
claims (including, with respect to the Real Estate, environmental
claims), withholdings or other defenses to which any of the Collateral,
or the Administrative Agent's rights with respect to the Collateral, are
subject.
9.5.4. NOTICE OF LITIGATION AND JUDGMENTS. CML and each of the
Borrowers will, and will cause each of their Subsidiaries to, give
notice to the Administrative Agent and each of the Lenders in writing
within fifteen (15) days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and
proceedings affecting CML, any of the Borrowers or any of their
Subsidiaries or to which CML, any of the Borrower or any of their
Subsidiaries is or becomes a party involving an uninsured claim against
CML, any of the Borrowers or any of their Subsidiaries that could
reasonably be expected to have a materially adverse effect on CML, any
of the Borrowers or any of their Subsidiaries and stating the nature and
status of such litigation or proceedings. Each of CML and each of the
Borrowers will, and will cause each of its Subsidiaries to, give notice
to the Administrative Agent and each of the Lenders, in writing, in form
and detail satisfactory to the Administrative Agent, within ten (10)
days of any judgment not covered by insurance, final or otherwise,
against CML, any of the Borrowers or any of their Subsidiaries in an
amount in excess of $1,000,000.
9.5.5. NOTICE OF TAX REFUNDS. CML and each of the Borrowers will
give notice promptly to the Administrative Agent of such Person's
receipt of any federal or state tax refund in excess of $1,000,000 and
will, within fifteen (15) days of the end of each fiscal quarter, give
notice to the Administrative Agent of the aggregate amount of federal
and state tax refunds received by such Person during such fiscal
quarter.
9.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. CML and the
Borrowers will do or cause to be done all things necessary to preserve and keep
in full force and effect their corporate existence, rights and franchises and
those of their Subsidiaries and will not, and will not cause or permit any of
their Subsidiaries to, convert to a limited liability company or a limited
liability partnership. They (i) will cause all of their properties and those of
their Subsidiaries used or useful in the conduct of their business or the
business of their Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (ii) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of CML or the Borrowers, may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (iii) will, and will
cause each of their Subsidiaries to, continue to engage primarily in the
businesses now conducted by them and in related businesses; PROVIDED that
nothing in this ss.9.6 shall prevenT CML or the Borrowers from discontinuing the
operation and maintenance of any of their properties or any of those of their
Subsidiaries if such discontinuance is, in the judgment of CML or the Borrowers
as the case may be, desirable in the conduct of its or
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their business and that do not in the aggregate materially adversely affect the
business of CML, the Borrowers and their Subsidiaries on a consolidated basis.
9.7. INSURANCE. Each of CML and each Borrower will, and will cause each
of their Subsidiaries to, maintain with financially sound and reputable insurers
having an A.M. Best rating of not less than A- (or an equivalent rating
reasonably satisfactory to the Administrative Agent) (except that NordicTrack's
workers' compensation insurance may be self-insured) insurance with respect to
its properties and business against such casualties and contingencies as shall
be in accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as described on SCHEDULE 8.24 hereto and as may
be reasonable and prudent and in accordance with the terms of the Security
Agreement. Each of CML and each Borrower will, and will cause each of their
Subsidiaries to, maintain insurance on the Mortgaged Properties in accordance
with the terms of the Mortgages.
9.8. TAXES. Each of CML and each Borrower will, and will cause each of
their Subsidiaries to, duly pay and discharge, or cause to be paid and
discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its real properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; PROVIDED that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if CML, such Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto; and PROVIDED FURTHER that CML, each
Borrower and each Subsidiary of such Persons will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.
9.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
9.9.1. GENERAL. Each of CML and each Borrower shall permit the
Lenders, through the Administrative Agent or any of the Lenders' other
designated representatives, to visit and inspect any of the properties
of CML, any of the Borrowers or any of their Subsidiaries, to examine
the books of account of CML, the Borrowers and their Subsidiaries (and
to make copies thereof and extracts therefrom), and to discuss the
affairs, finances and accounts of the Borrowers and their Subsidiaries
with, and to be advised as to the same by, its and their officers, all
at such reasonable times and intervals as the Administrative Agent or
any Lender may reasonably request.
9.9.2. INVENTORY REPORTS AND APPRAISALS. No more frequently than
twice each calendar year, or more frequently as determined by the
Administrative Agent if an Event of Default shall have occurred and be
continuing, upon the request of the Administrative Agent, the Borrowers
will obtain and deliver to the Administrative Agent a report of an
independent collateral auditor or appraiser satisfactory to the
Administrative Agent (which may be affiliated with one of the Lenders)
with respect to the inventory components included in the Borrowing
Bases, which report (i) shall indicate whether or not the information
set forth in the Borrowing Base Report most recently delivered is
accurate and complete in all material respects based upon a review by
such auditors of the inventory (including verification as to the value,
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location and respective types) and (ii) shall, in any event, be not less
extensive in scope than the Xxxxxx Xxxxxxxx Report delivered to the
Administrative Agent prior to the Restatement Effective Date. All such
collateral value reports shall be conducted and made at the expense of
the applicable Borrower.
9.9.3. COMMERCIAL FINANCE EXAMINATIONS. No more frequently than
thrice each calendar year, or more frequently as determined by the
Administrative Agent if an Event of Default shall have occurred and be
continuing, upon the Administrative Agent's request, CML and the
Borrowers shall permit the Administrative Agent's commercial finance
examiners to conduct commercial finance examinations of CML's, the
Borrowers' and their Subsidiaries' property, all at such reasonable
times and intervals as the Administrative Agent may reasonably request.
All such commercial finance examinations shall be conducted and made at
the expense of the Borrowers.
9.9.4. APPRAISALS. No more frequently than once each calendar
year, or more frequently as determined by the Administrative Agent if an
Event of Default shall have occurred and be continuing, upon the request
of the Administrative Agent, the Borrowers will obtain and deliver to
the Administrative Agent appraisal reports in form and substance and
from appraisers satisfactory to the Administrative Agent, stating the
then current fair market, orderly liquidation and forced liquidation
values of all or any portion of the equipment or real estate owned by
CML, any of the Borrowers or any of their Subsidiaries. From time to
time if an Event of Default shall have occurred and be continuing, upon
the request of the Administrative Agent, the Borrowers will obtain and
deliver to the Administrative Agent appraisal reports in form and
substance and from appraisers satisfactory to the Administrative Agent
stating the then current business value of each of CML, each Borrower
and their Subsidiaries. No later than June 30th of each year, the
Borrowers will obtain and deliver to the Administrative Agent appraisal
reports in form and substance and from appraisers satisfactory to the
Administrative Agent, stating the then current fair market value of (i)
NordicTrack's Mortgaged Property and (ii) NordicTrack's machinery and
equipment. All such appraisals referred to in this ss.9.9.4 shall be
conducted and made at the expense of thE Borrowers.
9.9.5. ENVIRONMENTAL ASSESSMENTS. Whether or not an Event of
Default shall have occurred, upon prior notice to CML and the Borrowers,
the Administrative Agent may, from time to time, in its discretion for
the purpose of assessing and ensuring the value of any Mortgaged
Property, obtain one or more environmental assessments or audits of such
Mortgaged Property prepared by a hydrogeologist, an independent engineer
or other qualified consultant or expert approved by the Administrative
Agent to evaluate or confirm (i) whether any Hazardous Materials are
present in the soil or water at such Mortgaged Property and (ii) whether
the use and operation of such Mortgaged Property complies with all
Environmental Laws. Environmental assessments may include without
limitation detailed visual inspections of such Mortgaged Property
including any and all storage areas, storage tanks, drains, dry xxxxx
and leaching areas, and the taking of soil samples, surface water
samples and ground water samples, as well as such other investigations
or analyses as the Administrative Agent deem appropriate. All such
environmental assessments shall be conducted and made at the expense of
the Borrowers. Prior to requiring that such inspections be performed,
the
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Administrative Agent shall discuss with CML and the Borrowers the views
of CML and the Borrowers as to whether the results of such inspections
would be confidential and would be required to be reported to
governmental authorities and the consequences of potential findings from
such inspections.
9.9.6. COMMUNICATIONS WITH ACCOUNTANTS. Each of CML and each
Borrower authorizes the Administrative Agent and, if accompanied by the
Administrative Agent, the Lenders to communicate directly with CML's and
the Borrowers' independent certified public accountants and authorizes
such accountants to disclose to the Administrative Agent and the Lenders
any and all financial statements and other supporting financial
documents and schedules including copies of any management letter with
respect to the business, financial condition and other affairs of CML,
any of the Borrowers or any of their Subsidiaries. At the request of the
Administrative Agent, CML and the Borrowers shall deliver a letter
addressed to such accountants instructing them to comply with the
provisions of this ss.9.9.6.
9.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. Each of
CML and each Borrower will, and will cause each of their Subsidiaries to, comply
with (i) the applicable laws and regulations wherever its business is conducted,
including all Environmental Laws, (ii) the provisions of its charter documents
and by-laws, (iii) all agreements and instruments by which it or any of its
properties may be bound and (iv) all applicable decrees, orders, and judgments.
If any authorization, consent, approval, permit or license from any officer,
agency or instrumentality of any government shall become necessary or required
in order that CML, any of the Borrowers or any of their Subsidiaries may fulfill
any of its obligations hereunder or any of the other Loan Documents to which
CML, such Borrower or such Subsidiary is a party, CML or such Borrower will, or
(as the case may be) will cause such Subsidiary to, immediately take or cause to
be taken all reasonable steps within the power of CML or such Borrower or such
Subsidiary to obtain such authorization, consent, approval, permit or license
and furnish the Administrative Agent and the Lenders with evidence thereof.
9.11. INVENTORY RESTRICTIONS. Each of the Borrowers shall cause all
Eligible Inventory and, in the case of NordicTrack, all Eligible NordicTrack
Inventory, to be located at all times solely at Permitted Inventory Locations,
and to be sold or otherwise disposed of in the ordinary course of such
Borrower's business, consistent with past practices or as required pursuant to
the terms of this Credit Agreement.
9.12. USE OF PROCEEDS. Each Borrower will use the proceeds of its Loans
and will obtain Letters of Credit solely for the purposes set forth in ss.8.17.
9.13. ADDITIONAL MORTGAGED PROPERTY. If, after the Closing Date, CML,
any of the Borrowers or any of their Subsidiaries acquires real estate used as a
manufacturing or warehouse facility, CML or such Borrower shall, or shall cause
such Subsidiary to, forthwith deliver to the Administrative Agent a fully
executed mortgage or deed of trust over such real estate, in form and substance
satisfactory to the Administrative Agent, together with title insurance
policies, surveys, evidences of insurances with the Administrative Agent named
as loss payee and additional insured, legal opinions and other documents and
certificates with respect to such real estate as was required for Real Estate of
NordicTrack as of the Original Closing Date. CML and each Borrower further
agrees that, following the taking of such actions with respect to such real
estate, the Administrative
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Agent shall have for the benefit of the Lenders and the Administrative Agent a
valid and enforceable first priority mortgage or deed of trust over such real
estate, free and clear of all title defects and encumbrances except for
Permitted Liens.
9.14. AGENCY ACCOUNT AGREEMENTS. The Borrowers have delivered to the
Administrative Agent Agency Account Agreements in form and substance
satisfactory to the Administrative Agent from each of the Agency Account
Institutions. Each of CML and the Borrowers will, and will cause each of their
Subsidiaries to, use its best efforts to obtain Agency Account Agreements from
each other depository institution with which any of the Borrowers or any of the
Guarantors has an account.
9.15. INVESTMENTS IN BORROWERS. Within five (5) Business Days of receipt
by CML of any tax refund from any governmental authority or any other funds
received by CML from a third party, CML will invest all such refunds and other
funds in the Borrowers as subordinated loans or as contributions to capital.
9.16. OWNERSHIP OF SUBSIDIARIES. CML will maintain legal and beneficial
ownership of one hundred percent (100%) of the equity interests of each of the
Guarantors (other than CML and NA). NT will maintain legal and beneficial
ownership of one hundred percent (100%) of the equity interests of NA.
9.17. PRIVATE LABEL CREDIT CARD PROGRAM. Except as otherwise provided in
this ss.9.17, NordicTrack will maintain in effect at all times at least one
Private Label Credit CarD Program which (a) is as limited in recourse to CML,
NordicTrack and their Subsidiaries as the Monogram Credit Card Program, (b) is
on terms not less advantageous to NordicTrack than the terms of the Monogram
Credit Card Program and (c) has a Credit Review Point (as such term is defined
in the Monogram Credit Card Program Agreement) of not less than $120,000,000. In
the event that any Private Label Credit Card Program is terminated for any
reason, NordicTrack shall select and enter into a letter of intent (or similar
expression of understanding) with the new provider of such program within sixty
(60) days after the date of such termination and shall replace and implement
such new program within 150 days from the date of such termination with another
Private Label Credit Card Program which complies with the provisions of this
ss.9.17.
9.18. COLLATERAL NOTES. In addition to the NordicTrack Notes and the S&H
Notes, the Borrowers agree that with respect to any or all of the Mortgaged
Properties, they will execute and deliver or cause to be executed and delivered
such Collateral Notes as the Administrative Agent may request, it being
understood, however, that (a) the aggregate of all payments or recoveries on
such Collateral Notes shall not exceed the amount of the Obligations (exclusive
of the Collateral Notes), and (b) any payments or recoveries on such Collateral
Notes shall be credited to the unpaid amount of the Obligations and in such
order of application as may be required by ss.3.3 and ss.14.4 hereof. In the
event that the appraiSed value of any Mortgaged Property, a lien on which
secures any of the Collateral Notes, exceeds the amount of the Obligations
secured by the applicable Collateral Note, the applicable Borrower will execute
and deliver such amended Collateral Notes, amendments to Mortgages and other
documents, and will obtain such endorsements to the Title Policy covering such
Mortgaged Property, so as to reflect such altered appraised value.
9.19. FURTHER ASSURANCES; ADDITIONAL LOCATIONS.
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9.19.1. FURTHER ASSURANCES. CML and each Borrower will, and will
cause each of their Subsidiaries to, cooperate with the Lenders and the
Administrative Agent and execute such further instruments and documents
as the Lenders or the Administrative Agent shall reasonably request to
carry out to their satisfaction the transactions contemplated by this
Credit Agreement and the other Loan Documents.
9.19.2. ADDITIONAL LOCATIONS. Prior to the opening by any Borrower
of any new retail store, distribution center or manufacturing facility
at which Eligible Inventory or Eligible NordicTrack Inventory, as the
case may be, is to be located, such Borrower shall take all actions
necessary or advisable, under applicable law, to establish and perfect
the Administrative Agent's security interest in the Collateral located
or to be located at such retail store, distribution center or
manufacturing facility (with such exceptions as are acceptable to the
Majority Lenders).
10. CERTAIN NEGATIVE COVENANTS OF CML AND THE BORROWERS.
Each of CML and each of the Borrowers covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Lender has any obligation to make any Loans or the Issuing
Bank has any obligations to issue, extend or renew any Letters of Credit:
10.1. RESTRICTIONS ON INDEBTEDNESS. Neither CML nor any of the Borrowers
will, and none will permit any of their Subsidiaries to, create, incur, assume,
guarantee or be or remain liable, contingently or otherwise, with respect to any
Indebtedness other than:
(a) Indebtedness to the Lenders and the Administrative Agent
arising under any of the Loan Documents;
(b) current liabilities of CML, such Borrower or such Subsidiary
incurred in the ordinary course of business not incurred through (i) the
borrowing of money, or (ii) the obtaining of credit except for credit on
an open account basis customarily extended and in fact extended in
connection with normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be
made in accordance with the provisions of ss.9.8;
(d) Indebtedness in respect of judgments or awards that have been
in force for less than the applicable period for taking an appeal so
long as execution is not levied thereunder or in respect of which CML,
such Borrower or such Subsidiary shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which
a stay of execution shall have been obtained pending such appeal or
review;
(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
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(f) Subordinated Debt not exceeding $41,593,000 in aggregate
principal amount at any time outstanding;
(g) obligations under Capitalized Leases and purchase money
Indebtedness incurred in connection with the acquisition of any real or
personal property by CML, such Borrower or such Subsidiary, PROVIDED
that the aggregate outstanding principal amount of all such Indebtedness
of CML, the Borrowers and their Subsidiaries permitted under this
paragraph (g) shall not exceed $7,500,000 at any one time;
(h) Indebtedness not otherwise permitted by this ss.10.1 existing
on the datE hereof and listed and described on SCHEDULE 10.1 hereto;
(i) Indebtedness of a Guarantor which is a Subsidiary of any
Borrower to such Borrower in respect of loans permitted by ss.10.3(e);
(j) Indebtedness of any Borrower to CML in respect of Investments
by CML in such Borrower permitted under ss.10.3(i);
(k) Indebtedness of NordicTrack under the Monogram Credit Card
Program and the GE Capital Credit Card Program; and
(l) Indebtedness consisting of guaranties by CML or any of its
Subsidiaries of obligations of any direct or indirect Subsidiaries of
such Person in respect of operating leases of such Subsidiary; and
(m) Indebtedness of CML to any Borrower in respect of Investments
by such Borrower in CML permitted under ss.10.3(j).
10.2. RESTRICTIONS ON LIENS. Neither CML nor any of the Borrowers will,
and none will permit any of their Subsidiaries to, (i) create or incur or suffer
to be created or incurred or to exist any lien, encumbrance, mortgage, pledge,
charge, restriction or other security interest of any kind upon any of its
property or assets of any character whether now owned or hereafter acquired, or
upon the income or profits therefrom; (ii) transfer any of such property or
assets or the income or profits therefrom for the purpose of subjecting the same
to the payment of Indebtedness or performance of any other obligation in
priority to payment of its general creditors; (iii) acquire, or agree or have an
option to acquire, any property or assets upon conditional sale or other title
retention or purchase money security agreement, device or arrangement; (iv)
suffer to exist for a period of more than thirty (30) days after the same shall
have been incurred any Indebtedness or claim or demand against it that if unpaid
might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors; or (v) sell, assign, pledge or
otherwise transfer any accounts, contract rights, general intangibles, chattel
paper or instruments, with or without recourse; PROVIDED that CML, any of the
Borrowers and any of their Subsidiaries may create or incur or suffer to be
created or incurred or to exist:
(a) liens in favor of such Borrower on all or part of the assets
of Subsidiaries of such Borrower securing Indebtedness owing by
Subsidiaries of such Borrower to such Borrower;
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(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties
other than Mortgaged Properties to secure claims for labor, material or
supplies in respect of obligations not overdue;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties other than Mortgaged Properties in
respect of judgments or awards, the Indebtedness with respect to which
is permitted by ss.10.1(d);
(e) liens of carriers, warehousemen, mechanics and materialmen,
and other like liens on properties other than Mortgaged Properties, in
existence less than 120 days from the date of creation thereof in
respect of obligations not overdue;
(f) encumbrances on Real Estate other than the Mortgaged Property
consisting of easements, rights of way, zoning restrictions,
restrictions on the use of real property and defects and irregularities
in the title thereto, landlord's or lessor's liens under leases to which
CML, any of the Borrowers or any of their Subsidiaries is a party, and
other minor liens or encumbrances none of which in the opinion of CML or
such Borrower interferes materially with the use of the property
affected in the ordinary conduct of the business of CML, such Borrower
or their Subsidiaries, as the case may be, which defects do not
individually or in the aggregate have a materially adverse effect on the
business of CML or such Borrower, as the case may be individually or of
CML, the Borrowers and their Subsidiaries on a consolidated basis;
(g) liens existing on the date hereof and listed on SCHEDULE 10.2
hereto;
(h) liens to secure Capitalized Lease obligations of the type and
amount permitted by ss.10.1(g), so long as such liens cover only the
property subject to sucH Capitalized Leases, and purchase money security
interests in or purchase money mortgages on real or personal property
other than Mortgaged Properties acquired after the date hereof to secure
purchase money Indebtedness of the type and amount permitted by
ss.10.1(g), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired;
(i) liens and encumbrances on each Mortgaged Property as and to
the extent permitted by the Mortgage applicable thereto;
(j) liens in favor of the Administrative Agent for the benefit of
the Lenders and the Administrative Agent under the Loan Documents; and
(k) liens on assets of NordicTrack granted in accordance with the
Monogram Credit Card Program and the GE Capital Credit Card Program.
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10.3. RESTRICTIONS ON INVESTMENTS. Neither CML nor any of the Borrowers
will, and none will permit any of their Subsidiaries to, make or permit to exist
or to remain outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by CML or such Borrower;
(b) demand deposits, certificates of deposit, bankers acceptances
and time deposits of United States banks having total assets in excess
of $1,000,000,000 and money market accounts of brokerage firms
acceptable to the Administrative Agent;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States
of America or any state thereof that at the time of purchase have been
rated and the ratings for which are not less than "P 1" if rated by
Xxxxx'x Investors Services, Inc., and not less than "A 1" if rated by
Standard and Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc.;
(d) Investments existing on the date hereof and listed on
SCHEDULE 10.3 hereto;
(e) Investments by any Borrower in any Subsidiary of that
Borrower that is a Guarantor in the form of loans made in cash;
(f) Investments consisting of the Guaranty;
(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by ss.10.5.2;
(h) Investments consisting of loans and advances to employees for
moving, entertainment, travel and other similar expenses in the ordinary
course of business not to exceed $2,000,000 in the aggregate at any time
outstanding;
(i) Investments by CML in any of the Borrowers in the form of
contributions to capital, subordinated loans or a repayment of a loan
previously made to such Borrower so long as such entities remain
Borrowers hereunder;
(j) Investments consisting of guaranties by CML or any of its
Subsidiaries of obligations of any direct or indirect Subsidiaries of
such Person in respect of operating leases of such Subsidiary; and
(k) Investments by any Borrower in CML in the form of
distributions, subordinated loans or a repayment of a loan previously
made to CML by such Borrower, provided such Investment would be
permitted under ss.10.4 hereof.
PROVIDED, HOWEVER, that, with the exception of loans and advances referred to in
ss.10.3(h), sucH Investments will be considered Investments permitted by this
ss.10.3 only if all actions havE been taken to the satisfaction of the
Administrative Agent to provide to the Administrative Agent, for the benefit of
the Lenders and the Administrative Agent, a first
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priority perfected security interest in all of such Investments free of all
encumbrances other than Permitted Liens.
10.4. DISTRIBUTIONS AND RESTRICTED PAYMENTS.
10.4.1. INTERCOMPANY DISTRIBUTIONS AND RESTRICTED PAYMENTS. The
Borrowers will not make any Restricted Payments, PROVIDED HOWEVER, that:
(a) the Borrowers, may make Restricted Payments to CML in
an aggregate amount per fiscal year not to exceed (i)
$10,000,000, PLUS (ii) amounts required to pay income and other
taxes and governmental levies owed or payable by CML, PLUS (iii)
amounts required and permitted to be paid by CML in respect of
interest on its Subordinated Debentures, PLUS (iv) the maximum
amount of dividends permitted to be paid by CML during such
fiscal year pursuant to ss.10.4.2; PROVIDED that all such
Restricted Payments made by thE Borrowers to CML pursuant to this
ss.10.4.1(a) shall be used by CML for thE purposes described in
such clauses (ii), (iii) and (iv) and to pay any expenses
required to be paid by CML in the ordinary course of business in
each case not later than five (5) Business Days after the date on
which the relevant Restricted Payment is made;
(b) the Borrowers may make Restricted Payments to CML in
an aggregate amount per fiscal year not to exceed $12,000,000
PROVIDED all such Restricted Payments are used by CML to pay
expenses incurred directly by or for the direct benefit of any of
the Borrowers or their Subsidiaries in each case not later than
five (5) Business Days after the date on which the relevant
Restricted Payment is made;
(c) each Borrower may make Restricted Payments to CML in
an aggregate amount per Borrower not to exceed, on a cumulative
basis in any fiscal year, (i) $12,500,000 with respect to
NordicTrack and (ii) $2,500,000 with respect to S&H, PROVIDED
that (A) no Default or Event of Default shall have occurred and
be continuing or would result from the making of such Restricted
Payment and (B) CML, concurrently with its receipt of such
Restricted Payment, invests the proceeds of such Restricted
Payment in another Borrower to satisfy the working capital
requirements of such Borrower.
10.4.2. CML DISTRIBUTIONS. CML will not make any Distributions
other than:
(a) Distributions in the form of dividends paid in cash not to
exceed an aggregate amount of $1,300,000 for any fiscal quarter,
PROVIDED that:
(i) no Default or Event of Default has occurred and is
continuing or would result from the making of such Distribution;
(ii) the Borrowers have aggregate borrowing availability
under this Credit Agreement (after giving effect to such
Distribution) in excess of $5,000,000;
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(iii) Consolidated EBITDA of CML and its Subsidiaries for
the most recent fiscal quarter ending during the month set forth
in the table below is not less than the amount set forth opposite
such month:
Minimum
-------
Quarter Ending Consolidated EBITDA
-------------- -------------------
July 1997 $ 2,530,000
October 1997 $ 1,932,000
January 1998 $53,645,000
April 1998 $ 310,000
July 1998 $ 3,818,000
(iv) at any time after the fiscal quarter ending in July
1998, Consolidated EBITDA of CML and its Subsidiaries for the
most recent period of four consecutive fiscal quarters is not
less than $30,000,000; and
(v) prior to the declaration or making of any proposed
Distribution under this paragraph (a), CML shall have delivered
to the Administrative Agent a certificate of the principal
financial or accounting officer of CML containing calculations,
on a PRO FORMA basis after giving effect to the proposed
Distribution and the proposed borrowing, if applicable,
illustrating compliance by CML with the foregoing clauses (i)
through (iv).
(b) purchases or redemptions by CML of the stock of CML resulting
solely from any holder of any stock option issued by CML paying (i) all
or a portion of the exercise price of such stock option or (ii) any
taxes due from such holder as a result of the exercise of such stock
option by such holder's relinquishment of rights under such stock
option.
10.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
10.5.1. MERGERS AND ACQUISITIONS. Neither CML nor any of the
Borrowers will, and none will permit any of their Subsidiaries to,
become a party to any merger or consolidation, or agree to or effect any
asset acquisition or stock acquisition (other than the acquisition of
assets in the ordinary course of business consistent with past
practices) except the merger or consolidation of one or more of the
Subsidiaries of any Borrower with and into such Borrower (with such
Borrower being the surviving entity), or the merger or consolidation of
two or more Subsidiaries of any Borrower, provided, that if any of such
Subsidiaries is also a Guarantor, such Guarantor is the surviving entity
of such merger or consolidation.
10.5.2. DISPOSITION OF ASSETS. Neither CML nor any of the
Borrowers will, and none will permit any of their Subsidiaries to,
become a party to or agree to or effect any disposition of assets, other
than (a) the disposition of assets in the ordinary course of business,
consistent with past practices, (b) the dispositions of assets permitted
under ss.10.6, (c) the termination or assignment of store leases of anY
Borrower or its Subsidiaries; PROVIDED that all Net Cash Proceeds from
any such termination or assignment referred to in this clause (c) shall
be applied, concurrently with receipt of such proceeds by CML or any of
its Subsidiaries, to prepay the Loans of the applicable Borrower, or, in
the case of CML, any of the Borrowers, and
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(d) the sale of accounts receivable of NordicTrack to General Electric
Capital Corporation in accordance with the GE Capital Credit Card
Program Agreement.
10.6. SALE AND LEASEBACK. Neither CML nor any of the Borrowers will, and
none will permit any of their Subsidiaries to, enter into any arrangement,
directly or indirectly, whereby CML, any of the Borrowers or any of their
Subsidiaries shall sell or transfer any property owned by it in order then or
thereafter to lease such property or lease other property that CML, any of the
Borrowers or any of their Subsidiaries intends to use for substantially the same
purpose as the property being sold or transferred except as described in
SCHEDULE 10.6.
10.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. Neither CML nor any of the
Borrowers will, and none will permit any of their Subsidiaries to, (i) use any
of the Real Estate or any portion thereof for the handling, processing, storage
or disposal of Hazardous Substances in violation of Environmental Laws, (ii)
cause or permit to be located on any of the Real Estate any underground tank or
other underground storage receptacle for Hazardous Substances in violation of
Environmental Laws, (iii) generate any Hazardous Substances on any of the Real
Estate in violation of Environmental Laws, (iv) conduct any activity at any Real
Estate or use any Real Estate in any manner so as to cause a release (i.e.
releasing, spilling, leaking, pumping, pouring, emitting, emptying, discharging,
injecting, escaping, leaching, disposing or dumping) or threatened release of
Hazardous Substances on, upon or into the Real Estate or (v) otherwise conduct
any activity at any Real Estate or use any Real Estate in any manner that would
violate any Environmental Law or bring such Real Estate in violation of any
Environmental Law.
10.8. SUBORDINATED DEBT. Neither CML nor any of the Borrowers will, and
none will permit any of their Subsidiaries to, amend, supplement or otherwise
modify the terms of any of the Subordinated Debentures or Fiscal Agency
Agreement or prepay, redeem or repurchase any of the Subordinated Debentures.
10.9. EMPLOYEE BENEFIT PLANS. None of CML, any Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning of
ss.406 of ERISA or ss.4975 of the Code which could result in a material
liability for CML, any of thE Borrowers or any of their Subsidiaries; or
(b) operated or maintain any Guaranteed Pension Plan or
Multiemployer Plan.
10.10. BANK ACCOUNTS. Neither CML nor any of the Borrowers will, and
none will permit any of their Subsidiaries to, (i) establish any bank accounts
other than those listed on SCHEDULE 8.20 (as such may be amended from time to
time to include those depository institutions which have executed and delivered
to the Administrative Agent Agency Account Agreements) unless such new account
is subject to an Agency Account Agreement, (ii) violate directly or indirectly
any Agency Account Agreement in favor of the Administrative Agent for the
benefit of the Lenders and the Administrative Agent with respect to such account
or (iii) deposit into any of the payroll accounts listed on SCHEDULE 8.20 any
amounts in excess of amounts necessary to pay current payroll obligations from
such accounts.
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10.11. TRANSACTIONS WITH AFFILIATES. Neither CML nor any of the
Borrowers will, nor will they permit any of their Subsidiaries to, enter into,
or cause, suffer or permit to exist any transaction or agreement with any
Affiliate except:
(a) employment agreements entered into in the ordinary course of
business by CML, any of the Borrowers or any of their Subsidiaries and loans and
advances to employees of CML, any of the Borrowers or any of their Subsidiaries
in the ordinary course of business for travel expenses, drawing accounts or
other similar business related expenses;
(b) any transaction or agreement having terms not less favorable to CML,
the Borrowers and their Subsidiaries than would be the case if such transaction
or agreement had been entered into with a Person that is not an Affiliate,
PROVIDED that the aggregate potential value payable or receivable by CML, the
Borrowers and their Subsidiaries in connection with all such transactions during
any fiscal year of CML (excluding transactions or agreements exclusively among
or between CML, the Borrowers and their Subsidiaries) shall not exceed $500,000;
and
(c) tax sharing agreements in form and substance satisfactory to the
Administrative Agent among CML and any of its Subsidiaries.
10.12. RESTRICTIVE OR INCONSISTENT AGREEMENTS. Neither CML nor any of
the Borrowers will, nor will they permit any of their Subsidiaries to, enter
into any agreement:
(a) other than the Loan Documents, the Fiscal Agency Agreement and the
Subordinated Debentures (as in effect on the Closing Date or as thereafter
amended in compliance with this Credit Agreement) which, directly or indirectly,
prohibits or restrains, or has the effect of prohibiting or restraining, or
otherwise imposes any materially adverse or burdensome condition upon, the
declaration or payment of dividends or distributions, the incurrence of
Indebtedness, the granting of liens, the making of loans or advances to any of
CML, any Borrower or any of their Subsidiaries or the amendment or modification
of any of the Loan Documents; or
(b) containing any provision that would be violated or breached by any
Loan or by the performance by CML, any Borrower or any of their Subsidiaries of
their obligations hereunder or under any of the Loan Documents.
10.13. BUSINESS ACTIVITIES. CML will not engage in any business activity
except its ownership of its Subsidiaries, including the Borrowers, activities
reasonably related thereto, its performance from time to time of its obligations
under this Credit Agreement, the other Loan Documents, the Subordinated
Debentures and the Fiscal Agency Agreement and each other agreement, instrument
or document contemplated hereby, whether or not executed on or before the
Closing Date.
10.14. PRIVATE LABEL CREDIT CARD PROGRAMS. Neither CML nor NordicTrack
will amend, supplement or otherwise modify any terms or provisions of any
Private Label Credit Card Program without the prior written consent of the
Administrative Agent. Without limitation of the foregoing, neither CML nor
NordicTrack will (a) increase the Credit Review Point (as such term is defined
in the Monogram Credit Card Program Agreement) above $123,000,000 without the
prior written consent of the Administrative Agent or (b) increase the Credit
Review Point (as such term is defined in the GE Capital Credit Card
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Program Agreement) above $20,000,000 without the prior written consent of the
Administrative Agent. CML and NordicTrack will promptly notify the
Administrative Agent of the termination of the GE Capital Credit Card Program
and of the termination of the Intercreditor Agreement dated as of December 10,
1996 among General Electric Capital Corporation, the Lenders and the
Administrative Agent.
11. FINANCIAL COVENANTS OF CML AND THE BORROWERS.
Each of CML and each of the Borrowers covenants and agrees that, so long
as any Loan, Unpaid Reimbursement Obligation, Letter of Credit or Note is
outstanding or any Lender has any obligation to make any Loans or the Issuing
Bank has any obligation to issue, extend or renew any Letters of Credit:
11.1. MINIMUM QUARTERLY CONSOLIDATED EBITDA. CML and the Borrowers will
not permit, for each fiscal quarter ending during the month set forth in the
table below, Consolidated EBITDA of CML and its Subsidiaries for such fiscal
quarter to be less than the amount set forth opposite such month:
Minimum Consolidated
--------------------
Quarter Ending EBITDA
-------------- ------
July 1997 ($15,585,000)
October 1997 ($20,461,000)
January 1998 $10,863,000
April 1998 $ 5,681,000
July 1998 $ 1,342,000
October 1998 ($14,084,000)
January 1999 $15,199,000
11.2. MINIMUM CONSOLIDATED EBITDA TO INTEREST RATIO. CML and the
Borrowers will not permit the ratio of Consolidated EBITDA to Consolidated Total
Interest Expense of CML and its Subsidiaries for any period of four consecutive
fiscal quarters ending during the month set forth in the table below to be less
than the amount set forth opposite such month:
Period Ending Ratio
------------- -----
July 1998 1.12:100
October 1998 2.03:1.00
January 1999 3.08:1.00
11.3. CAPITAL EXPENDITURES. Neither CML nor any of the Borrowers will
make, nor will they permit any of their Subsidiaries to make, Capital
Expenditures that exceed
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$5,000,000 in the aggregate for any fiscal quarter ending after July 1996, and
$10,000,000 in the aggregate for any fiscal year ending after July 1996;
PROVIDED, HOWEVER that if during any fiscal year the amount of Capital
Expenditures permitted for that fiscal year is not so utilized, such unutilized
amount may be utilized in the next succeeding fiscal year (after first utilizing
the amount of capital expenditures permitted in such fiscal year) but not in any
subsequent fiscal year. CML and its Subsidiaries will not make or commit to make
Capital Expenditures with respect to new stores (other than kiosks) in any year
unless the Consolidated EBITDA of CML and its Subsidiaries calculated on a
rolling four quarter basis based upon the most recent consolidated financial
statements of CML and its Subsidiaries delivered to the Lenders pursuant to
ss.9.4 is equal to or exceeds $35,000,000 in which event (a) Capital
Expenditures of CML and its Subsidiaries shall not exceed $20,000,000 in the
aggregate for such year and (b) Capital Expenditures of CML and its Subsidiaries
with respect to new stores (other than kiosks) shall not exceed $10,000,000 in
the aggregate for such year.
11.4. TOTAL LIABILITIES TO TANGIBLE NET WORTH RATIO. CML and the
Borrowers will not permit the ratio of Consolidated Total Liabilities to
Consolidated Tangible Net Worth of CML and its Subsidiaries to exceed at any
time during any fiscal quarter ending during the month set forth in the table
below the amount set forth opposite such month:
Quarter Ending Ratio
-------------- -----
July 1997 3.15:1.00
October 1997 6.86:1.00
January 1998 5.39:1.00
April 1998 4.13:1.00
July 1998 4.03:1.00
October 1998 7.87:1.00
January 1999 4.88:1.00
11.5. MINIMUM QUARTERLY EBITDA (NORDICTRACK). For any fiscal quarter
ending during the month set forth in the table below, CML and the Borrowers will
not permit, NordicTrack's EBITDA for such fiscal quarter to be less than the
amount set forth opposite such month:
Quarter Ending Minimum EBITDA
-------------- --------------
July 1997 ($18,325,000)
October 1997 ($17,006,000)
January 1998 $11,040,000
April 1998 $ 6,770,000
July 1998 ($ 1,000,000)
October 1998 ($10,883,000)
January 1999 $14,930,000
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12. CLOSING CONDITIONS.
The obligations of the Lenders to make the initial Loans and of the
Issuing Bank to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent on or prior to the Original
Closing Date.
12.1. LOAN DOCUMENTS. Each of the Loan Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to each of the
Lenders. Each Lender shall have received a fully executed copy of each such
document.
12.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. Each of the Lenders shall
have received from CML, each of the Borrowers and each of their Subsidiaries a
copy, certified by a duly authorized officer of such Person to be true and
complete on the Original Closing Date, of each of (i) its charter or other
incorporation documents as in effect on such date of certification, and (ii) its
by-laws as in effect on such date.
12.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by CML, each of the Borrowers and each of
their Subsidiaries of this Credit Agreement and the other Loan Documents to
which it is or is to become a party shall have been duly and effectively taken,
and evidence thereof satisfactory to the Lenders shall have been provided to
each of the Lenders.
12.4. INCUMBENCY CERTIFICATE. Each of the Lenders shall have received
from CML, each of the Borrowers and each of their Subsidiaries an incumbency
certificate, dated as of the Original Closing Date, signed by a duly authorized
officer of CML, such Borrower or such Subsidiary, and giving the name and
bearing a specimen signature of each individual who shall be authorized: (i) to
sign, in the name and on behalf of each of CML, such Borrower or such
Subsidiary, each of the Loan Documents to which CML, such Borrower or such
Subsidiary is or is to become a party; (ii) in the case of such Borrower, to
make Loan Requests and Conversion Requests and to apply for Letters of Credit;
and (iii) to give notices and to take other action on its behalf under the Loan
Documents.
12.5. VALIDITY OF LIENS. The Security Documents shall be effective to
create in favor of the Administrative Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under applicable law) security
interest in and lien upon the Collateral (with such exceptions as are acceptable
to the Majority Lenders). All filings, recordings, deliveries of instruments and
other actions necessary or desirable in the opinion of the Administrative Agent
to protect and preserve such security interests shall have been duly effected
(with such exceptions as are acceptable to the Majority Lenders). The
Administrative Agent shall have received evidence thereof in form and substance
satisfactory to the Administrative Agent.
12.6. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Administrative
Agent shall have received from each of CML, each of the Borrowers and their
Subsidiaries a completed and fully executed Perfection Certificate and the
results of UCC, patent, trademark and copyright searches with respect to the
Collateral, indicating no liens other than Permitted Liens and otherwise in form
and substance satisfactory to the Administrative Agent.
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12.7. APPRAISALS; TAXES. The Administrative Agent shall have received (i)
appraisals of NordicTrack's Mortgaged Property performed by appraisers mutually
agreed upon by the Administrative Agent and the Borrowers and such appraisals
shall be in form and substance satisfactory to the Administrative Agent; and
(ii) evidence of payment of real estate taxes and municipal charges on all Real
Estate not delinquent on or before the Original Closing Date.
12.8. TITLE INSURANCE. The Administrative Agent shall have received a
Title Policy covering each Mortgaged Property (or commitments to issue such
policies, with all conditions to issuance of the Title Policy deleted by an
authorized agent of the Title Insurance Company) together with proof of payment
of all fees and premiums for such policies, from the Title Insurance Company and
in amounts satisfactory to the Administrative Agent, insuring the interest of
each of the Administrative Agent and each of the Lenders as mortgagee under the
Mortgages.
12.9. CERTIFICATES OF INSURANCE. The Administrative Agent shall have
received (i) a certificate of insurance from an independent insurance broker
dated as of the Original Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise describing the insurance
obtained in accordance with the provisions of the Security Agreement and (ii)
certified copies of all policies evidencing such insurance (or certificates
therefore signed by the insurer or an agent authorized to bind the insurer) and
the Administrative Agent shall be satisfied with the adequacy of all such
insurance.
12.10. AGENCY ACCOUNT AGREEMENTS. The Administrative Agent shall have
received an Agency Account Agreement, from each depository institution at which
CML, any of the Borrowers or any of the Guarantors maintains depository accounts
which the Administrative Agent in its sole discretion has identified as a key
concentration account concerning the Administrative Agent's interest for the
benefit of the Lenders and the Administrative Agent in such accounts.
12.11. BORROWING BASE REPORT. The Administrative Agent shall have
received from the Borrowers the initial Borrowing Base Report dated as of the
Original Closing Date.
12.12. ACCOUNTS RECEIVABLE AGING REPORT. The Administrative Agent shall
have received from NordicTrack and S&H the most recent Accounts Receivable aging
report of NordicTrack and S&H dated as of a date which shall be no more than
fifteen (15) days prior to the Original Closing Date and, as applicable shall
have notified the Administrative Agent in writing on the Original Closing Date
of any material deviation from the Accounts Receivable values reflected in such
Accounts Receivable aging report and shall have provided the Administrative
Agent with such supplementary documentation as the Administrative Agent may
reasonably request.
12.13. HAZARDOUS WASTE ASSESSMENTS. The Administrative Agent shall have
received hazardous waste site assessments from environmental engineers and in
form and substance satisfactory to the Administrative Agent, covering (a) all
currently owned real estate and (b), as requested by the Administrative Agent,
all other real property in respect of which CML, any of the Borrowers or any of
their Subsidiaries may have material liability, whether contingent or otherwise,
for dumping or disposal of Hazardous Substances.
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12.14. SOLVENCY CERTIFICATE. Each of the Lenders shall have received an
officer's certificate of CML dated as of the Original Closing Date as to the
solvency of CML and its Subsidiaries following the consummation of the
transactions contemplated herein and in form and substance satisfactory to the
Lenders.
12.15. OPINION OF COUNSEL. Each of the Lenders and the Administrative
Agent shall have received a favorable legal opinion addressed to the Lenders and
the Administrative Agent, in form and substance satisfactory to the Lenders and
the Administrative Agent, from:
(a) Xxxx and Xxxx, counsel to CML, the Borrowers and the
Guarantors; and
(b) local counsel to CML, the Borrowers and their Subsidiaries in
the United Kingdom, Germany, Canada, the U.S. Virgin Islands and the
states of California and Minnesota, as applicable.
Each of CML, the Borrowers and their Subsidiaries have instructed each
such counsel to deliver its opinion to the Lenders and the Administrative Agent.
12.16. PAYMENT OF FEES. The Borrowers shall have paid to the
Administrative Agent the Closing Fee and Administrative Agent's fee pursuant to
ss.ss.5.1 and 5.2.
12.17. PAYOFF LETTER. The Administrative Agent shall have received a
payoff letter from Citibank and the other lenders under the Citibank Facility,
indicating the amount of the loan obligations of CML to Citibank to be
discharged on the Original Closing Date and an acknowledgment by Citibank that
upon receipt of such funds it will forthwith execute and deliver to the
Administrative Agent for filing all termination statements and take such other
actions as may be necessary to discharge all mortgages, deeds of trust and
security interests granted by CML, any of the Borrowers or any of their
Subsidiaries in favor of Citibank and the other lenders under the Citibank
Facility.
12.18. DISBURSEMENT INSTRUCTIONS. The Administrative Agent shall have
received disbursement instructions from the Borrowers, indicating that a portion
of the proceeds of the Loans, in an amount equal to the aggregate loan
obligations of CML under the Citibank Facility, are paid to Citibank.
12.19. UPDATED COLLATERAL EXAMINATIONS. The Administrative Agent shall
have reviewed and been satisfied with the update of the commercial finance
examinations performed by the Administrative Agent's field examiners, including
satisfactory review of the Borrowers' books and records in connection with the
calculation of the Borrowing Base and the Administrative Agent's satisfaction
with the components and the Borrowers' method of calculating the Borrowing Base.
12.20. LANDLORD LIEN WAIVERS. The Administrative Agent shall have
received landlord waivers with respect to material leased locations of the
Borrowers located in Kentucky, Minnesota, South Dakota and Virginia in form and
substance satisfactory to the Administrative Agent.
12.21. BORROWING AVAILABILITY. The Administrative Agent shall have
received evidence satisfactory to the Administrative Agent that after giving
effect to all transactions
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to occur on the Original Closing Date and after deducting the amount of accounts
payable of the Borrowers' more than thirty (30) days past due, the Borrowers
shall have aggregate borrowing availability under the Credit Agreement on the
Original Closing Date of not less than $9,000,000.
13. CONDITIONS TO ALL BORROWINGS.
The obligations of the Lenders to make any Loan, and of the Issuing Bank
to issue, extend or renew any Letter of Credit, in each case whether on or after
the Original Closing Date, shall also be subject to the satisfaction of the
following conditions precedent:
13.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of CML, the Borrowers and their
Subsidiaries contained in this Credit Agreement, the other Loan Documents or in
any document or instrument delivered pursuant to or in connection with this
Credit Agreement shall be true as of the date as of which they were made and
shall also be true at and as of the time of the making of such Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing.
13.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Lender would make it illegal for such Lender to make such Loan or to
participate in the issuance, extension or renewal of such Letter of Credit or in
the reasonable opinion of the Issuing Bank would make it illegal for the Issuing
Bank to issue, extend or renew such Letter of Credit.
13.3. GOVERNMENTAL REGULATION. Each Lender shall have received such
statements in substance and form reasonably satisfactory to such Lender as such
Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
13.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Lenders and to the Administrative Agent and the Administrative
Agent's Special Counsel, and the Lenders, the Administrative Agent and such
counsel shall have received all information and such counterpart originals or
certified or other copies of such documents as the Administrative Agent may
reasonably request.
13.5. BORROWING BASE REPORT. The Administrative Agent shall have received
the most recent Borrowing Base Report required to be delivered to the
Administrative Agent in accordance with ss.9.4(f).
13.6. BORROWING AVAILABILITY. After giving effect to all amounts
requested, the sum of the outstanding amount of all Loans PLUS the Borrowers'
aggregate Letter of Credit Exposures shall not exceed the lesser of (a) the
Total Commitment and (b) the Aggregate Borrowing Base PLUS the Permitted
Overadvance Amount.
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14. EVENTS OF DEFAULT; ACCELERATION; ETC.
14.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) any of the Borrowers shall fail to pay any principal of the
Loans or any Reimbursement Obligation when the same shall become due and
payable, whether at the stated date of maturity or any accelerated date
of maturity or at any other date fixed for payment;
(b) CML, any of the Borrowers or any of their Subsidiaries shall
fail to pay any interest on the Loans, the commitment fee, any Letter of
Credit Fee, the Administrative Agent's fee, or other sums due hereunder
or under any of the other Loan Documents, when the same shall become due
and payable, whether at the stated date of maturity or any accelerated
date of maturity or at any other date fixed for payment;
(c) CML or any of the Borrowers shall fail to comply with any of
its covenants contained in ss.ss.9.1, 9.4, 9.5, 9.7, 9.9, 9.12, 9.14
through 9.19, 10 or 11 or any of The covenants contained in any of the
Mortgages;
(d) CML, any of the Borrowers or any of their Subsidiaries shall
fail to perform any term, covenant or agreement contained herein or in
any of the other Loan Documents (other than those specified elsewhere in
this ss.14.1) for fifteen (15) dayS after written notice of such failure
has been given to the Borrowers by the Administrative Agent;
(e) any representation or warranty of CML, any of the Borrowers
or any of their Subsidiaries in this Credit Agreement or any of the
other Loan Documents or in any other document or instrument delivered
pursuant to or in connection with this Credit Agreement shall prove to
have been false in any material respect upon the date when made or
deemed to have been made or repeated;
(f) CML, any of the Borrowers or any of their Subsidiaries shall
fail to pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or in respect of any
Capitalized Leases and the aggregate amount of such obligations and
Capitalized Leases is in excess of $2,000,000, or fail to observe or
perform any term, covenant or agreement contained in any agreement by
which it is bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases and the aggregate
amount of such obligations and Capitalized Leases is in excess of
$2,000,000 for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or of
any obligations issued thereunder to accelerate the maturity thereof;
(g) CML, any of the Borrowers or any of their Subsidiaries shall
make an assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of CML, any of the Borrowers
or any of their Subsidiaries or of any substantial part of
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the assets of CML, any of the Borrowers or any of their Subsidiaries or
shall commence any case or other proceeding relating to CML, any of the
Borrowers or any of their Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall be
commenced against CML, any of the Borrowers or any of their Subsidiaries
and CML, any of the Borrowers or any of their Subsidiaries shall
indicate its approval thereof, consent thereto or acquiescence therein
or such petition or application shall not have been dismissed within
sixty (60) days following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating CML, any of the
Borrowers or any of their Subsidiaries bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree
or order for relief is entered in respect of CML, any of the Borrowers
or any of their Subsidiaries in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against CML, any of the Borrowers or any of their
Subsidiaries that, with other outstanding final judgments, undischarged,
against CML, any of the Borrowers or any of their Subsidiaries exceeds
in the aggregate $2,000,000;
(j) the holders of all or any part of the Subordinated Debt shall
accelerate the maturity of all or any part of the Subordinated Debt or
the Subordinated Debt shall be prepaid, redeemed or repurchased in whole
or in part;
(k) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded or the Administrative Agent's security interests,
mortgages or liens in a substantial portion of the Collateral shall
cease to be perfected, or shall cease to have the priority contemplated
by the Security Documents, in each case otherwise than in accordance
with the terms thereof or with the express prior written agreement,
consent or approval of the Lenders, or any action at law, suit or in
equity or other legal proceeding to cancel, revoke or rescind any of the
Loan Documents shall be commenced by or on behalf of CML, any of the
Borrowers or any of their Subsidiaries party thereto or any of their
respective stockholders, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the
effect that, any one or more of the Loan Documents is illegal, invalid
or unenforceable in accordance with the terms thereof;
(l) CML, any of the Borrowers or any of their Subsidiaries shall
be enjoined, restrained or in any way prevented by the order of any
court or any administrative or regulatory agency from conducting any
material part of its business and such order shall continue in effect
for more than thirty (30) days;
(m) there shall occur any material damage to, or loss, theft or
destruction of, any Collateral, whether or not insured, or any strike,
lockout, labor dispute,
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embargo, condemnation, act of God or public enemy, or other casualty,
which in any such case causes, for more than fifteen (15) consecutive
days, the cessation or substantial curtailment of revenue producing
activities at any facility of CML, any of the Borrowers or any of their
Subsidiaries if such event or circumstance is not covered by business
interruption insurance and would have a material adverse effect on the
business or financial condition of CML, such Borrower or such
Subsidiary;
(n) there shall occur the loss, suspension or revocation of, or
failure to renew, any license or permit now held or hereafter acquired
by CML, any of the Borrowers or any of their Subsidiaries if such loss,
suspension, revocation or failure to renew would have a material adverse
effect on the business or financial condition of CML, such Borrower or
such Subsidiary;
(o) CML, any of the Borrowers or any of their Subsidiaries shall
be indicted for a state or federal crime, or any civil or criminal
action otherwise shall have been brought against CML, any of the
Borrowers or any of their Subsidiaries, a punishment for which in any
such case could include the forfeiture of any assets of such Person
included in any of the Borrowing Bases or any assets of such Person not
included in the Borrowing Bases but having a fair market value in excess
of $2,000,000;
(p) (i) CML shall at any time, legally or beneficially own less
than one hundred percent (100%) of the shares of capital stock of the
Borrowers (other than NA), as adjusted pursuant to any stock split,
stock dividend or recapitalization or reclassification of the capital of
such Borrower or (ii) NT shall at any time, legally or beneficially own
less than one hundred percent (100%) of the common stock of NA, as
adjusted pursuant to any stock split, stock dividend or recapitalization
or reclassification of the capital of NA;
(q) any person or group of persons (within the meaning of Section
13 or 14 of the Securities Exchange Act of 1934, as amended) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under said Act) of
30% or more of the outstanding shares of common stock of CML; or, during
any period of twelve consecutive calendar months, a majority of the
seats (other than vacant seats) on the board of directors of CML shall
at any time be occupied by Persons other than (i) directors on the
Original Closing Date or (ii) directors initially nominated or appointed
by action of a majority of CML's directors;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Majority Lenders shall, by
notice in writing to the Borrowers declare all amounts owing with respect to
this Credit Agreement, the Notes and the other Loan Documents and all
Reimbursement Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrowers; PROVIDED
that in the event of any Event of Default specified in ss.ss.14.1(g), 14.1(h) or
14.1(j), all sUch amounts shall become immediately due and payable automatically
and without any requirement of notice from the Administrative Agent or any
Lender.
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14.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.14.1(g), ss.14.1(h) or ss.14.1(j) shall occur, any
unused portion of the cRedit hereunder shall forthwith terminate and each of the
Lenders shall be relieved of all further obligations to make Loans to the
Borrowers and the Issuing Bank shall be relieved of all further obligations to
issue, extend or renew Letters of Credit. If any other Event of Default shall
have occurred and be continuing, or if on any Drawdown Date or other date for
issuing, extending or renewing any Letter of Credit the conditions precedent to
the making of the Loans to be made on such Drawdown Date or (as the case may be)
to issuing, extending or renewing such Letter of Credit on such other date are
not satisfied, the Administrative Agent may and, upon the request of the
Majority Lenders, shall, by notice to the Borrowers, terminate the unused
portion of the credit hereunder, and upon such notice being given such unused
portion of the credit hereunder shall terminate immediately and each of the
Lenders shall be relieved of all further obligations to make Loans and the
Issuing Bank shall be relieved of all further obligations to issue, extend or
renew Letters of Credit. No termination of the credit hereunder shall relieve
CML, any of the Borrowers or any of their Subsidiaries of any of the
Obligations.
14.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Lenders shall have
accelerated the maturity of the Loans pursuant to ss.14.1, each Lender, if owed
any amount with respect to thE Loans or the Reimbursement Obligations, may, with
the consent of the Majority Lenders but not otherwise, proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Credit Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations to such Lender are evidenced,
including as permitted by applicable law the obtaining of the EX PARTE
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Lender. No remedy herein conferred upon any
Lender or the Administrative Agent or the holder of any Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
14.4. DISTRIBUTION OF COLLATERAL PROCEEDS. In the event that following
the occurrence or during the continuance of any Default or Event of Default, the
Administrative Agent or any Lender, as the case may be, receives any monies in
connection with the enforcement of any the Security Documents, or otherwise with
respect to the realization upon any of the Collateral, such monies shall be
distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of the Administrative Agent for or in respect of the
Administrative Agent's fee payable pursuant to ss.5.2 and all reasonable
costs, expenses, disbursements and losses whicH shall have been incurred
or sustained by the Administrative Agent in connection with the
collection of such monies by the Administrative Agent, for the exercise,
protection or enforcement by the Administrative Agent of all or any of
the rights, remedies, powers and privileges of the Administrative Agent
under this Credit Agreement or any of the other Loan Documents or in
respect of the Collateral or in support of any provision of adequate
indemnity to the Administrative Agent against
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any taxes or liens which by law shall have, or may have, priority over
the rights of the Administrative Agent to such monies;
(b) Second, to all other Obligations in such order or preference
as the Majority Lenders may determine; PROVIDED, HOWEVER, that
distributions in respect of Obligations owing to the Lenders with
respect to each type of Obligation such as interest, principal, fees and
expenses, shall be made among the Lenders PRO RATA; and PROVIDED,
FURTHER, that the Administrative Agent may in its discretion make proper
allowance to take into account any Obligations not then due and payable;
(c) Third, upon payment and satisfaction in full or other
provisions for payment in full satisfactory to the Lenders and the
Administrative Agent of all of the Obligations, to the payment of any
obligations required to be paid pursuant to ss.9-504(1)(c) of the
Uniform Commercial Code of the Commonwealth of Massachusetts; and
(d) Fourth, the excess, if any, shall be returned to the
Borrowers or to such other Persons as are entitled thereto.
15. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Lenders to any of the Borrowers and any securities or other property of any
of the Borrowers in the possession of such Lender may be applied to or set off
by such Lender against the payment of Obligations and any and all other
liabilities, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of such Borrower to such Lender. Each of the
Lenders agrees with each other Lender that (i) if an amount to be set off is to
be applied to Indebtedness of such Borrower to such Lender, other than
Indebtedness evidenced by the Notes held by such Lender or constituting
Reimbursement Obligations owed to such Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by all such
Notes held by such Lender or constituting Reimbursement Obligations owed to such
Lender, and (ii) if such Lender shall receive from such Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Notes held by, or constituting
Reimbursement Obligations owed to, such Lender by proceedings against such
Borrower at law or in equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise, and shall retain
and apply to the payment of the Note or Notes held by, or Reimbursement
Obligations owed to, such Lender any amount in excess of its ratable portion of
the payments received by all of the Lenders with respect to the Notes held by,
and Reimbursement Obligations owed to, all of the Lenders, such Lender will make
such disposition and arrangements with the other Lenders with respect to such
excess, either by way of distribution, PRO TANTO assignment of claims,
subrogation or otherwise as shall result in each Lender receiving in respect of
the Notes held by it or Reimbursement Obligations owed it, its proportionate
payment as contemplated by this Credit Agreement; PROVIDED that if all or any
part of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
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16. THE ADMINISTRATIVE AGENT.
16.1. AUTHORIZATION.
(a) The Administrative Agent is authorized to take such action on
behalf of each of the Lenders and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related
documents delegated to the Administrative Agent, together with such
powers as are reasonably incident thereto, PROVIDED that no duties or
responsibilities not expressly assumed herein or therein shall be
implied to have been assumed by the Administrative Agent.
(b) The relationship between the Administrative Agent and each of
the Lenders is that of an independent contractor. The use of the term
"Administrative Agent" is for convenience only and is used to describe,
as a form of convention, the independent contractual relationship
between the Administrative Agent and each of the Lenders. Nothing
contained in this Credit Agreement nor the other Loan Documents shall be
construed to create an agency, trust or other fiduciary relationship
between the Administrative Agent and any of the Lenders.
(c) As an independent contractor empowered by the Lenders to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Administrative Agent
is nevertheless a "representative" of the Lenders, as that term is
defined in Article 1 of the Uniform Commercial Code, for purposes of
actions for the benefit of the Lenders and the Administrative Agent with
respect to all collateral security and guaranties contemplated by the
Loan Documents. Such actions include the designation of the
Administrative Agent as "secured party", "mortgagee" or the like on all
financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust in
collateral security intended to secure the payment or performance of any
of the Obligations, all for the benefit of the Lenders and the
Administrative Agent.
16.2. EMPLOYEES AND AGENTS. The Administrative Agent may exercise its
powers and execute its duties by or through employees or agents and shall be
entitled to take, and to rely on, advice of counsel concerning all matters
pertaining to its rights and duties under this Credit Agreement and the other
Loan Documents. The Administrative Agent may utilize the services of such
Persons as the Administrative Agent in its sole discretion may reasonably
determine, and all reasonable fees and expenses of any such Persons shall be
paid by the Borrower.
16.3. NO LIABILITY. Neither the Administrative Agent nor any of its
shareholders, directors, officers or employees nor any other Person assisting
them in their duties nor any agent or employee thereof, shall be liable for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Administrative
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.
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16.4. NO REPRESENTATIONS. The Administrative Agent shall not be
responsible for the execution or validity or enforceability of this Credit
Agreement, the Notes, the Letters of Credit, any of the other Loan Documents or
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes, or for the value of any such collateral security or for
the validity, enforceability or collectability of any such amounts owing with
respect to the Notes, or for any recitals or statements, warranties or
representations made herein or in any of the other Loan Documents or in any
certificate or instrument hereafter furnished to it by or on behalf of CML, any
of the Borrowers or any of their Subsidiaries, or be bound to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any instrument at any time constituting, or
intended to constitute, collateral security for the Notes or to inspect any of
the properties, books or records of CML, any of the Borrowers or any of their
Subsidiaries. The Administrative Agent shall not be bound to ascertain whether
any notice, consent, waiver or request delivered to it by any of the Borrowers
or any holder of any of the Notes shall have been duly authorized or is true,
accurate and complete. The Administrative Agent has not made nor does it now
make any representations or warranties, express or implied, nor does it assume
any liability to the Lenders, with respect to the credit worthiness or financial
conditions of CML, any of the Borrowers or any of their Subsidiaries. Each
Lender acknowledges that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based upon such information and
documents as it has deemed appropriate, made its own credit analysis and
decision to enter into this Credit Agreement.
16.5. PAYMENTS.
16.5.1. PAYMENTS TO ADMINISTRATIVE AGENT. A payment by any of the
Borrowers to the Administrative Agent hereunder or any of the other Loan
Documents for the account of any Lender shall constitute a payment to
such Lender. The Administrative Agent agrees promptly to distribute to
each Lender such Lender's PRO RATA share of payments received by the
Administrative Agent for the account of the Lenders except as otherwise
expressly provided herein or in any of the other Loan Documents.
16.5.2. DISTRIBUTION BY ADMINISTRATIVE AGENT. If in the opinion of
the Administrative Agent the distribution of any amount received by it
in such capacity hereunder, under the Notes or under any of the other
Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to
the Administrative Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to
such Persons as shall be determined by such court.
16.5.3. DELINQUENT LENDERS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Lender that fails (i) to make available to the
Administrative Agent its PRO RATA share of any Loan or to purchase any
Letter of Credit Participation or (ii) to comply with the provisions of
ss.15 with respect to making dispositions and arrangements with the
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otheR Lenders, where such Lender's share of any payment received,
whether by setoff or otherwise, is in excess of its PRO RATA share of
such payments due and payable to all of the Lenders, in each case as,
when and to the full extent required by the provisions of this Credit
Agreement, shall be deemed delinquent (a "Delinquent Lender") and shall
be deemed a Delinquent Lender until such time as such delinquency is
satisfied. A Delinquent Lender shall be deemed to have assigned any and
all payments due to it from the Borrowers, whether on account of
outstanding Loans, Unpaid Reimbursement Obligations, interest, fees or
otherwise, to the remaining nondelinquent Lenders for application to,
and reduction of, their respective PRO RATA shares of all outstanding
Loans and Unpaid Reimbursement Obligations. The Delinquent Lender hereby
authorizes the Administrative Agent to distribute such payments to the
nondelinquent Lenders in proportion to their respective PRO RATA shares
of all outstanding Loans and Unpaid Reimbursement Obligations. A
Delinquent Lender shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the assigned
payments to all outstanding Loans and Unpaid Reimbursement Obligations
of the nondelinquent Lenders, the Lenders' respective PRO RATA shares of
all outstanding Loans and Unpaid Reimbursement Obligations have returned
to those in effect immediately prior to such delinquency and without
giving effect to the nonpayment causing such delinquency. Until such
time as its delinquency is satisfied, a Delinquent Lender shall have no
right to vote with respect to any matters under or in respect of the
Credit Agreement and shall not be entitled to receive its portion of any
commitment fee paid in accordance with ss.2.2 of this Credit Agreement.
16.6. HOLDERS OF NOTES. The Administrative Agent may deem and treat the
payee of any Note or the purchaser of any Letter of Credit Participation as the
absolute owner or purchaser thereof for all purposes hereof until it shall have
been furnished in writing with a different name by such payee or by a subsequent
holder, assignee or transferee.
16.7. INDEMNITY. The Lenders ratably agree hereby to indemnify and hold
harmless the Administrative Agent from and against any and all claims, actions
and suits (whether groundless or otherwise), losses, damages, costs, expenses
(including any expenses for which the Administrative Agent has not been
reimbursed by the Borrowers as required by ss.17), and liabilities of every
nature and character arising out of or related to this CrediT Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Administrative Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Administrative Agent's willful misconduct or gross
negligence.
16.8. ADMINISTRATIVE AGENT AS LENDER. In its individual capacity, BKB
shall have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, and as the holder of any of
the Notes and as the purchaser of any Letter of Credit Participations, as it
would have were it not also the Administrative Agent.
16.9. RESIGNATION. The Administrative Agent may resign at any time by
giving sixty (60) days prior written notice thereof to the Lenders and the
Borrowers. Upon any such resignation, the Majority Lenders shall have the right
to appoint a successor Administrative Agent in such capacity. Unless a Default
or Event of Default shall have occurred and be continuing, such successor
Administrative Agent shall be reasonably
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acceptable to the Borrowers. If no successor Administrative Agent shall have
been so appointed by the Majority Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's
giving of notice of resignation, then the retiring Administrative Agent may, on
behalf of the Lenders, appoint a successor Administrative Agent, which shall be
a financial institution having a rating of not less than A or its equivalent by
Standard & Poor's Ratings Group, a division of XxXxxx-Xxxx, Inc. Upon the
acceptance of any appointment as an Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Administrative Agent's resignation, the provisions of this Credit
Agreement and the other Loan Documents 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 Administrative Agent.
16.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Lender
hereby agrees that, upon learning of the existence of a Default or an Event of
Default, it shall promptly notify the Administrative Agent thereof. The
Administrative Agent hereby agrees that upon receipt of any notice under this
ss.16.10 it shall promptly notify the other Lenders oF the existence of such
Default or Event of Default.
16.11. DUTIES IN THE CASE OF ENFORCEMENT. In case one of more Events of
Default have occurred and shall be continuing, and whether or not acceleration
of the Obligations shall have occurred, the Administrative Agent shall, if (i)
so requested by the Majority Lenders and (ii) the Lenders have provided to the
Administrative Agent such additional indemnities and assurances against expenses
and liabilities as the Administrative Agent may reasonably request, proceed to
enforce the provisions of the Security Documents authorizing the sale or other
disposition of all or any part of the Collateral and exercise all or any such
other legal and equitable and other rights or remedies as it may have in respect
of such Collateral. The Majority Lenders may direct the Administrative Agent in
writing as to the method and the extent of any such sale or other disposition,
the Lenders hereby agreeing to indemnify and hold the Administrative Agent,
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, PROVIDED that the Administrative
Agent need not comply with any such direction to the extent that the
Administrative Agent reasonably believes the Administrative Agent's compliance
with such direction to be unlawful or commercially unreasonable in any
applicable jurisdiction.
17. EXPENSES.
Each of the Borrowers jointly and severally agrees to pay (i) the
reasonable costs of producing and reproducing this Credit Agreement, the other
Loan Documents and the other agreements and instruments mentioned herein, (ii)
any taxes (including any interest and penalties in respect thereto) payable by
the Administrative Agent or any of the Lenders (other than taxes based upon the
Administrative Agent's or any Lender's net income) on or with respect to the
transactions contemplated by this Credit Agreement (the Borrowers hereby
agreeing to indemnify the Administrative Agent and each Lender with respect
thereto); (iii) the reasonable fees, expenses and disbursements of the
Administrative Agent's Special Counsel or any local counsel to the
Administrative Agent incurred in connection with the preparation,
administration, interpretation or syndication of the Loan Documents and other
instruments mentioned herein, each closing hereunder, and amendments,
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modifications, approvals, consents or waivers hereto or hereunder (including in
each case the allocated cost of staff counsel) and the syndication and the
termination hereof, and each Lenders' counsel in the case of waivers or
modifications of the Loan Documents; (iv) the reasonable fees, expenses and
disbursements of the Administrative Agent incurred by the Administrative Agent
in connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein, including all title insurance
premiums and surveyor, engineering and appraisal charges and the fees, expenses
and disbursements of the Administrative Agent and the Lenders for waivers and
modifications of the Loan Documents; (v) any reasonable fees, costs, expenses
and bank charges, including bank charges for returned checks, incurred by the
Administrative Agent in establishing, maintaining or handling agency accounts,
lock box accounts and other accounts for the collection of any of the
Collateral; (vi) all reasonable out-of-pocket expenses (including without
limitation reasonable attorneys' fees and costs, which attorneys may be
employees of any Lender or the Administrative Agent, and reasonable consulting,
accounting, appraisal, investment banking and similar professional fees and
charges) incurred by any Lender or the Administrative Agent in connection with
(A) the enforcement of or preservation of rights under any of the Loan Documents
against CML, any of the Borrowers or any of their Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default and
(B) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Lender's or the Administrative Agent's
relationship with CML, any of the Borrowers or any of their Subsidiaries; (vii)
all reasonable fees, expenses and disbursements of any Lender or Administrative
Agent incurred in connection with UCC searches, UCC filings, intellectual
property searches, intellectual property filings, or mortgage recordings and
(viii) all reasonable costs of conducting commercial finance examinations and
appraisals of the Borrowers' properties, including the applicable daily time
charges of the Administrative Agent's commercial finance examiners, agents,
consultants and representatives engaged in such examinations and appraisals as
in effect from time to time and reasonable out-of-pocket travel and other
related expenses. The covenants of this ss.17 shall survive payment or
satisfaction of all other Obligations.
18. INDEMNIFICATION.
Each of the Borrowers jointly and severally agrees to indemnify and hold
harmless the Administrative Agent and the Lenders from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature and
character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(i) any actual or proposed use by CML, any of the Borrowers or any of their
Subsidiaries of the proceeds of any of the Loans or Letters of Credit, (ii) the
reversal or withdrawal of any provisional credits granted by the Administrative
Agent upon the transfer of funds from bank agency or lock box accounts or in
connection with the provisional honoring of checks or other items, (iii) any
actual or alleged infringement of any patent, copyright, trademark, service xxxx
or similar right of CML, any of the Borrowers or any of their Subsidiaries
comprised in the Collateral, (iv) CML, any of the Borrowers or any of their
Subsidiaries entering into or performing this Credit Agreement or any of the
other Loan Documents or (v) with respect to CML, the Borrowers and their
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to,
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claims with respect to wrongful death, personal injury or damage to property),
in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Lenders and the Administrative
Agent shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrowers agree to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Borrowers under this ss.18 are unenforceable for any reason, the Borrowers
hereby agree tO make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law. The covenants
contained in this ss.18 shall survive paymenT or satisfaction in full of all
other Obligations.
19. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of CML, any of the Borrowers or any of their
Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Lenders and the Administrative Agent, notwithstanding any investigation
heretofore or hereafter made by any of them, and shall survive the making by the
Lenders of any of the Loans and the issuance, extension or renewal of any
Letters of Credit, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Credit
Agreement or the Notes or any of the other Loan Documents remains outstanding or
any Lender has any obligation to make any Loans or the Issuing Bank has any
obligation to issue, extend or renew any Letter of Credit, and for such further
time as may be otherwise expressly specified in this Credit Agreement. All
statements contained in any certificate or other paper delivered to any Lender
or the Administrative Agent at any time by or on behalf of CML, any of the
Borrowers or any of their Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by CML, such Borrower or such Subsidiary hereunder.
20. ASSIGNMENT AND PARTICIPATION.
20.1. CONDITIONS TO ASSIGNMENT BY LENDERS. Except as provided herein,
each Lender may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, the Notes held by it and its participating
interest in the risk relating to any Letters of Credit); PROVIDED that (i) each
of the Administrative Agent and, unless a Default or Event of Default shall have
occurred and be continuing, the Borrowers shall have given its prior written
consent to such assignment, which consent, in the case of the Borrowers, will
not be unreasonably withheld or delayed, (ii) each such assignment shall be a
constant PRO RATA percentage, and not a varying percentage, of all the assigning
Lender's rights and obligations under this Credit Agreement, (iii) each
assignment shall be in an amount that is a whole multiple of $5,000,000 or, if
less, the entire remaining Commitment of such Lender and (iv) the parties to
such assignment shall execute and deliver to the Administrative Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of EXHIBIT G hereto (an "Assignment and
Acceptance"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance,
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which effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (ii) the assigning Lender shall, to the
extent provided in such assignment and upon payment to the Administrative Agent
of the registration fee referred to in ss.20.3, be released from itS obligations
under this Credit Agreement.
20.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS. By
executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Lender makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or mortgage;
(b) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
CML, the Borrowers and their Subsidiaries or any other Person primarily
or secondarily liable in respect of any of the Obligations, or the
performance or observance by CML, the Borrowers and their Subsidiaries
or any other Person primarily or secondarily liable in respect of any of
the Obligations of any of their obligations under this Credit Agreement
or any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.8.4 anD ss.9.4 and such other documents and
information as it has deemed appropriate to makE its own credit analysis
and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon
the assigning Lender, the Administrative Agent or any other Lender and
based on such documents and information as it shall deem appropriate at
the time, continue to make its own credit decisions in taking or not
taking action under this Credit Agreement;
e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Administrative
Agent to take such action as agent on its behalf and to exercise such
powers under this Credit Agreement and the other Loan Documents as are
delegated to the Administrative Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto;
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(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Credit
Agreement are required to be performed by it as a Lender;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
(i) such assignee acknowledges that it has made arrangements with
the assigning Lender satisfactory to such assignee with respect to its
PRO RATA share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
20.3. REGISTER. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register or similar list (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitment Percentage of, and principal amount of the Loans owing to and
Letter of Credit Participations purchased by, the Lenders from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrowers and the Lenders at any reasonable time and from time
to time upon reasonable prior notice. Upon each such recordation, the assigning
Lender agrees to pay to the Administrative Agent a registration fee in the sum
of $3,500.
20.4. NEW NOTES. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Administrative Agent shall (i) record the information
contained therein in the Register, and (ii) give prompt notice thereof to the
Borrowers and the Lenders (other than the assigning Lender). Within five (5)
Business Days after receipt of such notice, each Borrower, at its own expense,
shall execute and deliver to the Administrative Agent, in exchange for each
surrendered Note, a new Note with respect to such Borrower to the order of such
Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained some portion of its obligations hereunder, a new Note to the order
of the assigning Lender in an amount equal to the amount retained by it
hereunder. Such new Notes shall provide that they are replacements for the
surrendered Notes, shall be in an aggregate principal amount equal to the
aggregate principal amount of the surrendered Notes, shall be dated the
effective date of such in Assignment and Acceptance and shall otherwise be
substantially the form of the assigned Notes. Within five (5) days of issuance
of any new Notes pursuant to this ss.20.4, thE Borrowers shall deliver an
opinion of counsel, addressed to the Lenders and the Administrative Agent,
relating to the due authorization, execution and delivery of such new Notes and
the legality, validity and binding effect thereof, in form and substance
satisfactory to the Lenders. The surrendered Notes shall be cancelled and
returned to the Borrowers.
20.5. PARTICIPATIONS. Each Lender may sell participations to one or more
banks or other entities in all or a portion of such Lender's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (i) each such participation shall be in an amount of not less than
$5,000,000, (ii) any such sale or participation shall not affect the rights and
duties of the selling Lender hereunder to the Borrowers and (iii) the only
rights granted to the participant pursuant to such participation arrangements
with respect to
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waivers, amendments or modifications of the Loan Documents shall be the rights
to approve waivers, amendments or modifications that would reduce the principal
of or the interest rate on any Loans, extend the term or increase the amount of
the Commitment of such Lender as it relates to such participant, reduce the
amount of any commitment fees or Letter of Credit Fees to which such participant
is entitled or extend any regularly scheduled payment date for principal or
interest.
20.6. DISCLOSURE. CML and each of the Borrowers agrees that in addition
to disclosures made in accordance with standard and customary banking practices
any Lender may disclose information obtained by such Lender pursuant to this
Credit Agreement to assignees or participants and potential assignees or
participants hereunder; PROVIDED that such assignees or participants or
potential assignees or participants shall agree (i) to treat in confidence such
information unless such information otherwise becomes public knowledge, (ii) not
to disclose such information to a third party, except as required by law or
legal process and (iii) not to make use of such information for purposes of
transactions unrelated to such contemplated assignment or participation.
20.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWERS. If any
assignee Lender is an Affiliate of CML or any Borrower, then any such assignee
Lender shall have no right to vote as a Lender hereunder or under any of the
other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or other modifications to any of the Loan
Documents or for purposes of making requests to the Administrative Agent
pursuant to ss.14.1 or ss.14.2, and the determination of the Majority Lenders
shall for All purposes of this Credit Agreement and the other Loan Documents be
made without regard to such assignee Lender's interest in any of the Loans. If
any Lender sells a participating interest in any of the Loans or Reimbursement
Obligations to a participant, and such participant is CML, a Borrower or an
Affiliate of a Borrower or CML, then such transferor Lender shall promptly
notify the Administrative Agent of the sale of such participation. A transferor
Lender shall have no right to vote as a Lender hereunder or under any of the
other Loan Documents for purposes of granting consents or waivers or for
purposes of agreeing to amendments or modifications to any of the Loan Documents
or for purposes of making requests to the Administrative Agent pursuant to
ss.14.1 or ss.14.2 to the extent that sUch participation is beneficially owned
by CML, a Borrower or any Affiliate of a Borrower, and the determination of the
Majority Lenders shall for all purposes of this Agreement and the other Loan
Documents be made without regard to the interest of such transferor Lender in
the Loans to the extent of such participation.
20.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Lender shall
retain its rights to be indemnified pursuant to ss.17 with respect to any claims
or actions arising prioR to the date of such assignment. If any assignee Lender
is not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrowers and the Administrative Agent certification as to its exemption
from deduction or withholding of any United States federal income taxes. If the
Reference Bank transfers all of its interest, rights and obligations under this
Credit Agreement, the Administrative Agent shall, in consultation with the
Borrowers and with the consent of the Borrowers and the Majority Lenders,
appoint another Lender to act as the Reference Bank hereunder. Anything
contained in this ss.20 to the contrary notwithstanding, any Lender may at any
time pledge all or any portion of its interest and rights under this Credit
Agreement (including all or any portion of its Notes) to any of the twelve
Federal
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Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341.
No such pleDge or the enforcement thereof shall release the pledgor Lender from
its obligations hereunder or under any of the other Loan Documents.
20.9. ASSIGNMENT BY BORROWERS OR GUARANTORS None of CML, any of the
Borrowers nor any of the Guarantors shall assign or transfer any of its rights
or obligations under any of the Loan Documents without the prior written consent
of each of the Lenders.
21. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Notes or any Letter of Credit Applications shall be in
writing and shall be delivered in hand, mailed by United States registered or
certified first class mail, postage prepaid, sent by overnight courier, or sent
by telegraph, telecopy, facsimile or telex and confirmed by delivery via courier
or postal service, addressed as follows:
(a) if to CML, at 000 Xxxx Xxxxxx, Xxxxx, Xxxxxxxxxxxxx 00000,
Attention: Chief Financial Officer, or at such other address for notice
as CML shall last have furnished in writing to the Person giving the
notice;
(b) if to any of the Borrowers, at c/o CML Group, Inc., 000 Xxxx
Xxxxxx, Xxxxx, Xxxxxxxxxxxxx 00000, Attention: Chief Financial Officer,
or at such other address for notice as such Borrower shall last have
furnished in writing to the Person giving the notice with a copy to the
Chief Financial Officer of such Borrower at the address set forth for
such Borrower on SCHEDULE 8.21 hereto;
(c) if to any of the Guarantors or Foreign Guarantors, at c/o CML
Group, Inc., 000 Xxxx Xxxxxx, Xxxxx, Xxxxxxxxxxxxx 00000, Attention:
Chief Financial Officer, or at such other address for notice as such
Guarantor shall last have furnished in writing to the Person giving the
notice with a copy to the Chief Financial Officer of such Guarantor or
Foreign Guarantor at the address set forth for such Guarantor or Foreign
Guarantor on SCHEDULE 8.21 hereto;
(d) if to the Administrative Agent, at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxx X. Xxxxx, Vice
President, or such other address for notice as the Administrative Agent
shall last have furnished in writing to the Person giving the notice;
and
(e) if to any Lender, at such Lender's address set forth on
SCHEDULE 1 hereto, or such other address for notice as such Lender shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if sent by registered or certified first-class mail, postage prepaid, on
the third Business Day following the mailing thereof.
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22. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). CML, EACH OF THE
BORROWERS AND EACH OF THE GUARANTORS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS CREDIT AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE
COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN
AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF
PROCESS IN ANY SUCH SUIT BEING MADE UPON CML, THE BORROWERS AND THE GUARANTORS
BY MAIL AT THE ADDRESS SPECIFIED IN SS.21. CML, EACH OF THE BORROWERS AND EACH
OF THE GUARANTORS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE
TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN
AN INCONVENIENT COURT.
23. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
24. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
25. ENTIRE AGREEMENT, ETC.
The Loan Documents express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.27.
26. WAIVER OF JURY TRIAL.
CML, each Borrower and each Guarantor hereby waives its right to a jury
trial with respect to any action or claim arising out of any dispute in
connection with this Credit Agreement, the Notes or any of the other Loan
Documents, any rights or obligations hereunder or thereunder or the performance
of which rights and obligations. Except as prohibited by law, CML, each Borrower
and each Guarantor hereby waives any right it may have to claim or recover in
any litigation referred to in the preceding sentence any special, exemplary,
punitive or consequential damages or any damages other than, or in addition to,
actual damages. CML, each Borrower and each Guarantor (i) certifies that no
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representative, agent or attorney of any Lender or the Administrative Agent has
represented, expressly or otherwise, that such Lender or the Administrative
Agent, would not, in the event of litigation, seek to enforce the foregoing
waivers and (ii) acknowledges that the Administrative Agent and the Lenders have
been induced to enter into this Credit Agreement, the other Loan Documents to
which it is a party by, among other things, the waivers and certifications
contained herein.
27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
The provisions of this Credit Agreement and the other Loan Documents may
from time to time be amended, modified or waived, and any Collateral may be
released, if such amendment, modification, waiver or release is consented to in
writing by the Majority Lenders and, in the case of any amendment or
modification, CML or its Subsidiaries party to the relevant Loan Document.
Notwithstanding the foregoing, no such amendment, modification, waiver or
release:
(a) which would modify any requirement hereunder that any particular
action be taken by all the Lenders shall be effective unless
consented to by each Lender;
(b) which would modify this ss.27 or change the definition of
"Majority Lenders" shalL be effective unless consented to by each
Lender;
(c) which would release any Collateral from the lien of the Security
Documents shall be effective unless consented to by each Lender,
unless (i) such release is in connection with the sale of such
Collateral and such sale is permitted by this Credit Agreement,
all Net Cash Proceeds of such sale are used to prepay the Loans
and, except with respect to Permitted Dispositions, the Total
Commitment is reduced, concurrently with such prepayment, by the
amount of such prepayment, (ii) such release is of Collateral
consisting of cash or cash equivalents and substantially all such
cash or cash equivalents is used to pay or prepay Obligations in
accordance with the Credit Agreement, (iii) such release is "cash
collateral", as defined in Section 363(a) of the federal
Bankruptcy Code, in any case where CML, a Borrower or a Guarantor
is a debtor, and the release is made under a cash collateral
stipulation with the debtor approved by the Majority Lenders and
the Administrative Agent, (iv) such release is of foreign
Collateral and such release is effected with the approval of the
Administrative Agent pursuant to the last sentence of this ss.27,
or (v) such release is of other Collateral and the aggregate
value of all Collateral releases permitted under this clause (v)
from and after the Closing Date shall not exceed $1,000,000;
(d) which would increase the Commitment or Commitment Percentage of
any Lender, reduce any commitment fee, Letter of Credit Fee or
other fees payable to any Lender, extend the Maturity Date,
increase the advance rates of any Borrowing Base, or reduce the
principal amount of or rate of interest on any Loan of any Lender
shall be effective unless consented to by such Lender; or
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(e) which would adversely affect the interests, rights or obligations
of the Administrative Agent, in its capacity as the
Administrative Agent, or would amend the provisions of ss.ss.2.1
or 2.8 relating to the transfer of funds betwEen the
Administrative Agent and the Lenders (including the types of
funds or the method of such transfer), shall be effective unless
consented to by the Administrative Agent.
The Guarantors (other than CML and the Borrowers) shall not be deemed a party to
this Credit Agreement for any purpose except for purposes of ss.3.3, ss.7 and
ss.ss.21 through 28. The consent of any Guarantor (other than CML and the
Borrowers) shall not be required for any amendment, modification or waiver of
any provision of this Credit Agreement, unless such amendment, modification or
waiver relates to ss.3.3, ss.7, and ss.ss.21 through 28 and adVersely affects
such Guarantor. No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Administrative Agent or any Lender in exercising any
right shall operate as a waiver thereof or otherwise be prejudicial thereto. No
notice to or demand upon CML or any of the Borrowers shall entitle CML or any of
the Borrowers to other or further notice or demand in similar or other
circumstances.
If CML has demonstrated to the reasonable satisfaction of the
Administrative Agent that the pledge of the stock of any foreign Subsidiary of
CML (to the extent greater than 65% of the outstanding stock of such foreign
Subsidiary) or the Foreign Guaranty given by any such foreign Subsidiary will
result in material tax obligations for CML and its Subsidiaries, which tax
obligations would not arise if such pledge or guaranty were released by the
Administrative Agent and/or the Lenders, the Administrative Agent and/or the
Lenders, as appropriate, upon ten (10) days' prior written request of CML
delivered to the Administrative Agent and the Lenders shall release such pledge
(to the extent applicable to greater than 65% of the outstanding stock of the
relevant foreign Subsidiary) or guaranty; PROVIDED that (i) no such release
shall be required if any Event of Default is continuing and (ii) no such release
shall be required in any event prior to July 15, 1997.
28. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in any manner affect such clause or provision in any other jurisdiction, or
any other clause or provision of this Credit Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
CML GROUP, INC.
By:
------------------------------------
Xxxxx X. Xxxxx, Vice President -
Finance
NORDICTRACK, INC.
NORDIC ADVANTAGE, INC.
XXXXX & HAWKEN, LTD.
By:
------------------------------------
Xxxxx X. Xxxxx, Vice President
BANKBOSTON N.A. (f/k/a The First
National Bank of Boston), individually
and as Administrative Agent
By:
------------------------------------
Title:
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For purposes of ss.3.3, ss.7, and ss.ss.21 through 28 hereof:
OCR, INC.
OBW, INC.
WFH GROUP, INC.
OTNC, INC.
BFPI, INC.
By:
------------------------------------
Xxxxx X. Xxxxx, Vice President
