EXHIBIT 10.1
LOAN AGREEMENT
AMONG
LASALLE BANK NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT
AND
LASALLE BANK NATIONAL ASSOCIATION
AND
SOUTHWEST BANK OF ST. LOUIS
AS LENDERS
AND
TALX CORPORATION, A MISSOURI CORPORATION
AS BORROWER
MARCH 27, 2002
TABLE OF CONTENTS
1. Effective Date.................................................................................................1
2. Definitions and Rules of Construction..........................................................................1
2.1. LISTED DEFINITIONS........................................................................................1
2.2. OTHER DEFINITIONS.........................................................................................1
2.3. REFERENCES TO COVERED PERSON..............................................................................1
2.4. REFERENCES TO REQUIRED LENDERS............................................................................1
2.5. ACCOUNTING TERMS..........................................................................................1
2.6. MEANING OF SATISFACTORY...................................................................................1
2.7. COMPUTATION OF TIME PERIODS...............................................................................2
2.8. GENERAL...................................................................................................2
3. Lenders' Commitments...........................................................................................2
3.1. REVOLVING LOAN COMMITMENTS................................................................................2
3.1.1. Aggregate Amount; Reductions.........................................................................2
3.1.2. Limitation on Revolving Loan Advances................................................................3
3.1.3. Revolving Notes......................................................................................3
3.2. TERM LOAN COMMITMENTS.....................................................................................3
3.2.1. Aggregate Term Loan..................................................................................3
3.2.2. Term Loan Notes......................................................................................3
3.3. LETTER OF CREDIT COMMITMENT...............................................................................3
4. Interest.......................................................................................................4
4.1. INTEREST ON DRAWS ON LETTERS OF CREDIT....................................................................4
4.2. INTEREST ON AGGREGATE LOANS...............................................................................4
4.3. ADJUSTED BASE RATE........................................................................................4
4.4. ADJUSTED EURODOLLAR RATE..................................................................................4
4.5. BASE RATE MARGINS AND EURODOLLAR MARGINS..................................................................5
4.6. CONVERSION OF LOANS.......................................................................................5
4.7. INTEREST PERIODS FOR EURODOLLAR LOANS.....................................................................6
4.8. TIME OF ACCRUAL...........................................................................................6
4.9. COMPUTATION...............................................................................................6
i
4.10. RATE AFTER MATURITY......................................................................................6
5. Fees...........................................................................................................7
5.1. COMMITMENT FEE............................................................................................7
5.2. REVOLVING LOAN UNUSED FEE.................................................................................7
5.3. LETTER OF CREDIT FEE......................................................................................7
5.4. LETTER OF CREDIT FRONTING FEE.............................................................................7
5.5. OTHER LETTER OF CREDIT FEES...............................................................................7
5.6. AGENCY FEE................................................................................................8
5.7. CALCULATION OF FEES.......................................................................................8
6. Payments.......................................................................................................8
6.1. SCHEDULED PAYMENTS ON AGGREGATE REVOLVING LOAN............................................................8
6.1.1. Interest.............................................................................................8
6.1.2. Principal............................................................................................8
6.2. SCHEDULED PAYMENTS ON TERM LOAN...........................................................................8
6.2.1. Interest.............................................................................................8
6.2.2. Principal............................................................................................9
6.3. PREPAYMENTS...............................................................................................9
6.3.1. Voluntary Prepayments................................................................................9
6.3.2. Mandatory Prepayments When Over-Advances Exist......................................................10
6.3.3. Other Mandatory Prepayments.........................................................................10
6.3.3.1 Insurance/Condemnation Proceeds..............................................................10
6.3.3.2. Excess Cash Flow............................................................................11
6.3.3.3. Change in Chief Executive...................................................................12
6.4. REIMBURSEMENT OBLIGATIONS OF BORROWER....................................................................12
6.5. MANNER OF PAYMENTS AND TIMING OF APPLICATION OF PAYMENTS.................................................12
6.5.1. Payment Requirement.................................................................................12
6.5.2. Application of Payments and Proceeds................................................................13
6.5.3. Interest Calculation................................................................................13
6.6. RETURNED INSTRUMENTS.....................................................................................13
6.7. COMPELLED RETURN OF PAYMENTS OR PROCEEDS.................................................................13
6.8. DUE DATES NOT ON BUSINESS DAYS...........................................................................14
7. Procedure for Obtaining Advances and Letters of Credit........................................................14
ii
7.1. INITIAL ADVANCES.........................................................................................14
7.2. SUBSEQUENT REVOLVING LOAN ADVANCES.......................................................................14
7.2.1. Borrower Requests...................................................................................14
7.2.2. Administrative Agent's Right to Make Other Revolving Loan Advances..................................14
7.3. LETTERS OF CREDIT........................................................................................15
7.4. FUNDINGS.................................................................................................15
7.4.1. Revolving Advances..................................................................................15
7.4.2. Draws on Letters of Credit..........................................................................15
7.4.3. All Fundings Ratable................................................................................16
7.5. ADMINISTRATIVE AGENT'S AVAILABILITY ASSUMPTION...........................................................16
7.5.1 Assumption as to Lenders.............................................................................16
7.5.2 Assumption as to Borrower............................................................................17
7.6. DISBURSEMENT.............................................................................................17
7.7. RESTRICTIONS ON ADVANCES.................................................................................17
7.8. RESTRICTION ON NUMBER OF EURODOLLAR LOANS................................................................18
7.9. EACH ADVANCE REQUEST AND LETTER OF CREDIT REQUEST A CERTIFICATION........................................18
7.10. REQUIREMENTS FOR EVERY ADVANCE REQUEST..................................................................18
7.11. REQUIREMENTS FOR EVERY LETTER OF CREDIT REQUEST.........................................................18
7.12. EXONERATION OF ADMINISTRATIVE AGENT AND LENDERS.........................................................18
8. Security and Guaranties.......................................................................................19
8.1. SECURITY AGREEMENTS......................................................................................19
8.2. PLEDGE AGREEMENTS........................................................................................19
8.3. COLLATERAL ASSIGNMENTS...................................................................................19
8.3.1. Intellectual Property Assignments...................................................................19
8.3.2. Acquisition Documents Assignment....................................................................19
8.4. GUARANTIES...............................................................................................19
8.5. ADDITIONAL SUBSIDIARIES..................................................................................19
9. Power of Attorney.............................................................................................20
10. Conditions of Lending........................................................................................21
10.1. CONDITIONS TO INITIAL ADVANCE...........................................................................21
10.1.1. Listed Documents and Other Items...................................................................21
iii
10.1.2. Financial Condition................................................................................21
10.1.3. No Default.........................................................................................22
10.1.4. Perfection of Security Interests...................................................................22
10.1.5. Representations and Warranties.....................................................................22
10.1.6. No Material Adverse Change.........................................................................22
10.1.7. Pending Material Proceedings.......................................................................22
10.1.8. Payment of Fees and Expenses.......................................................................22
10.1.9. Current Acquisitions...............................................................................22
10.1.10. Initial Net Worth.................................................................................23
10.1.11. Insurance.........................................................................................23
10.1.12. Environmental.....................................................................................23
10.1.13. Other Items.......................................................................................23
10.2. CONDITIONS TO SUBSEQUENT ADVANCES.......................................................................23
10.2.1. General Conditions.................................................................................23
10.2.2. Representations and Warranties.....................................................................23
10.2.3. No Default.........................................................................................23
11. Conditions to Issuance of Letters of Credit..................................................................24
11.1. LETTER OF CREDIT APPLICATION/REIMBURSEMENT AGREEMENT....................................................24
11.2. NO PROHIBITIONS.........................................................................................24
11.3. REPRESENTATIONS AND WARRANTIES..........................................................................24
11.4. NO DEFAULT..............................................................................................24
11.5. OTHER CONDITIONS........................................................................................24
12. Representations and Warranties...............................................................................25
12.1. ORGANIZATION AND EXISTENCE..............................................................................25
12.2. AUTHORIZATION...........................................................................................25
12.3. DUE EXECUTION...........................................................................................25
12.4. ENFORCEABILITY OF OBLIGATIONS...........................................................................25
12.5. BURDENSOME OBLIGATIONS..................................................................................25
12.6. LEGAL RESTRAINTS........................................................................................26
12.7. LABOR CONTRACTS AND DISPUTES............................................................................26
12.8. NO MATERIAL PROCEEDINGS.................................................................................26
iv
12.9. MATERIAL LICENSES.......................................................................................26
12.10. COMPLIANCE WITH MATERIAL LAWS..........................................................................26
12.10.1. General Compliance with Environmental Laws and Employment Laws....................................26
12.10.2. Proceedings.......................................................................................26
12.10.3. Investigations Regarding Hazardous Materials......................................................26
12.10.4. Notices and Reports Regarding Hazardous Materials.................................................27
12.10.5. Environmental Property Transfer Acts..............................................................27
12.11. OTHER NAMES............................................................................................27
12.12. CONSUMMATION OF CURRENT ACQUISITION....................................................................27
12.13. PRIOR TRANSACTIONS.....................................................................................28
12.14. CAPITALIZATION.........................................................................................28
12.15. SOLVENCY...............................................................................................28
12.16. PROJECTIONS; PRO FORMA BALANCE SHEET...................................................................28
12.17. FINANCIAL STATEMENTS...................................................................................28
12.18. NO CHANGE IN CONDITION.................................................................................28
12.19. NO DEFAULTS............................................................................................28
12.20. INVESTMENTS............................................................................................28
12.21. INDEBTEDNESS...........................................................................................28
12.22. INDIRECT OBLIGATIONS...................................................................................29
12.23. OPERATING LEASES.......................................................................................29
12.24. CAPITAL LEASES.........................................................................................29
12.25. TAX LIABILITIES; GOVERNMENTAL CHARGES..................................................................29
12.26. PENSION BENEFIT PLANS..................................................................................29
12.26.1. Prohibited Transactions...........................................................................29
12.26.2. Claims............................................................................................30
12.26.3. Reporting and Disclosure Requirements.............................................................30
12.26.4. Accumulated Funding Deficiency....................................................................30
12.26.5. Multi-employer Plan...............................................................................30
12.27. WELFARE BENEFIT PLANS..................................................................................30
12.28. RETIREE BENEFITS.......................................................................................30
12.29. DISTRIBUTIONS..........................................................................................31
12.30. REAL PROPERTY..........................................................................................31
v
12.31. STATE OF COLLATERAL AND OTHER PROPERTY.................................................................31
12.31.1. Accounts..........................................................................................31
12.31.2. Inventory.........................................................................................32
12.31.3. Equipment.........................................................................................32
12.31.4. Intellectual Property.............................................................................32
12.31.5. Documents, Instruments and Chattel Paper..........................................................33
12.32. CHIEF PLACE OF BUSINESS; LOCATIONS OF COLLATERAL.......................................................33
12.33. NEGATIVE PLEDGES.......................................................................................33
12.34. SECURITY DOCUMENTS.....................................................................................34
12.34.1. Security Agreements...............................................................................34
12.34.2. Collateral Assignments............................................................................34
12.34.2.1. Intellectual Property Assignments.........................................................34
12.34.2.2. Pledge Agreement..........................................................................34
12.34.2.3. Acquisition Documents Assignment..........................................................34
12.35. S CORPORATION..........................................................................................34
12.36. SUBSIDIARIES AND AFFILIATES............................................................................35
12.37. BANK ACCOUNTS AND LOCKBOXES............................................................................35
12.38. MARGIN STOCK...........................................................................................35
12.39. SECURITIES MATTERS.....................................................................................35
12.40. INVESTMENT COMPANY ACT, ETC............................................................................35
12.41. NO MATERIAL MISSTATEMENTS OR OMISSIONS.................................................................35
12.42. FILINGS................................................................................................36
12.43. BROKER'S FEES..........................................................................................36
12.44. NO XXXX-XXXXX XXXXXX FILING REQUIRED...................................................................36
13. Modification and Survival of Representations.................................................................36
14. Affirmative Covenants........................................................................................36
14.1. USE OF PROCEEDS.........................................................................................36
14.2. CORPORATE EXISTENCE.....................................................................................37
14.3. MAINTENANCE OF PROPERTY AND LEASES......................................................................37
14.4. INVENTORY...............................................................................................37
14.5. INSURANCE...............................................................................................37
14.6. PAYMENT OF TAXES AND OTHER OBLIGATIONS..................................................................38
vi
14.7. COMPLIANCE WITH LAWS....................................................................................38
14.8. DISCOVERY AND CLEAN-UP OF HAZARDOUS MATERIAL............................................................38
14.8.1. In General.........................................................................................38
14.8.2. Asbestos Clean-Up..................................................................................39
14.9. TERMINATION OF PENSION BENEFIT PLAN.....................................................................39
14.10. NOTICE TO ADMINISTRATIVE AGENT OF MATERIAL EVENTS......................................................40
14.11. BORROWING OFFICER......................................................................................41
14.12. MAINTENANCE OF SECURITY INTERESTS OF SECURITY DOCUMENTS................................................41
14.12.1. Preservation and Perfection of Security Interests.................................................41
14.12.2. Collateral Held by Warehouseman, Bailee, etc......................................................42
14.12.3. Compliance With Terms of Security Documents.......................................................42
14.13. ACCOUNTING SYSTEM......................................................................................42
14.13.1. Account Records...................................................................................43
14.13.3. Tracing of Proceeds...............................................................................43
14.14. FINANCIAL STATEMENTS...................................................................................43
14.14.1. Annual Financial Statements.......................................................................43
14.14.2. Quarterly Financial Statements....................................................................43
14.15. OTHER FINANCIAL INFORMATION............................................................................44
14.15.1. Agings Report.....................................................................................44
14.15.2. Other Reports or Information Concerning Accounts or Inventory.....................................44
14.15.3. Stockholder Reports...............................................................................44
14.15.4. Pension Benefit Plan Reports......................................................................44
14.15.5. Tax Returns.......................................................................................44
14.16. REVIEW OF ACCOUNTS.....................................................................................44
14.17. INVENTORY..............................................................................................45
14.18. ANNUAL PROJECTIONS.....................................................................................45
14.19. OTHER INFORMATION......................................................................................45
14.20. AUDITS BY ADMINISTRATIVE AGENT.........................................................................45
14.21. VERIFICATION OF ACCOUNTS AND NOTICES TO ACCOUNT DEBTORS................................................45
14.22. APPRAISALS OF COLLATERAL...............................................................................46
14.23. ACCESS TO OFFICERS AND AUDITORS........................................................................46
14.24. PROFORMAS FOR PERMITTED ACQUISITIONS...................................................................46
vii
14.25. RATE AGREEMENT.........................................................................................47
14.26. ACQUISITION DOCUMENTS..................................................................................47
14.27. PAYMENT OF LASALLE BANK LOAN...........................................................................48
14.28. FURTHER ASSURANCES.....................................................................................48
15. Negative Covenants...........................................................................................48
15.1. INVESTMENTS.............................................................................................48
15.2. INDEBTEDNESS............................................................................................49
15.3. PREPAYMENTS.............................................................................................49
15.4. INDIRECT OBLIGATIONS....................................................................................50
15.5. SECURITY INTERESTS......................................................................................50
15.6. NO AMENDMENTS TO ACQUISITION DOCUMENTS..................................................................51
15.7. ACQUISITIONS............................................................................................51
15.8. BAILMENTS; CONSIGNMENTS; WAREHOUSING....................................................................52
15.9. DISPOSAL OF PROPERTY....................................................................................52
15.10. DISTRIBUTIONS..........................................................................................52
15.11. CHANGE OF CONTROL......................................................................................52
15.12. AMENDMENT TO CHARTER DOCUMENTS.........................................................................52
15.13. CAPITAL STRUCTURE; EQUITY SECURITIES...................................................................52
15.14. CHANGE OF BUSINESS.....................................................................................53
15.15. TRANSACTIONS WITH AFFILIATES...........................................................................53
15.16. CONFLICTING AGREEMENTS.................................................................................53
15.17. SALE AND LEASEBACK TRANSACTIONS........................................................................53
15.18. NEW SUBSIDIARIES.......................................................................................53
15.19. FISCAL YEAR............................................................................................54
15.20. LEASES.................................................................................................54
15.21. TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT ON COVERED PERSON........................................54
16. Financial Covenants..........................................................................................54
16.1. SPECIAL DEFINITIONS.....................................................................................54
16.2. CAPITAL EXPENDITURES....................................................................................55
16.3. MINIMUM FIXED CHARGE COVERAGE...........................................................................55
16.4. MAXIMUM RATIO OF TOTAL INDEBTEDNESS TO EBITDA...........................................................55
viii
16.5. MINIMUM NET WORTH.......................................................................................56
16.6. MINIMUM EBITDA..........................................................................................56
17. Default......................................................................................................57
17.1. EVENTS OF DEFAULT.......................................................................................57
17.1.1. Failure to Pay Principal or Interest...............................................................57
17.1.2. Failure to Pay Amounts Owed to Other Persons.......................................................57
17.1.3. Representations or Warranties......................................................................57
17.1.4. Certain Covenants..................................................................................57
17.1.5. Other Covenants....................................................................................57
17.1.6. Acceleration of Other Indebtedness.................................................................57
17.1.7. Default Under Other Agreements.....................................................................57
17.1.8. Bankruptcy; Insolvency; Etc........................................................................58
17.1.9. Judgments; Attachment; Settlement; Etc.............................................................58
17.1.10. Pension Benefit Plan Termination, Etc.............................................................58
17.1.11. Liquidation or Dissolution........................................................................59
17.1.12. Seizure of Assets.................................................................................59
17.1.13. Racketeering Proceeding...........................................................................59
17.1.14. Loan Documents; Security Interests................................................................59
17.1.15. Loss to Collateral................................................................................59
17.1.16. Guaranty; Guarantor...............................................................................59
17.2. CROSS DEFAULT...........................................................................................60
17.3. RIGHTS AND REMEDIES.....................................................................................60
17.3.1. Termination of Commitments.........................................................................60
17.3.2. Acceleration.......................................................................................60
17.3.3. Right of Setoff....................................................................................60
17.3.4. Notice to Account Debtors..........................................................................60
17.3.5. Entry Upon Premises and Access to Information......................................................61
17.3.6. Completion of Uncompleted Inventory Items..........................................................61
17.3.7. Borrower's Obligations.............................................................................61
17.3.8. Secured Party Rights...............................................................................62
17.3.9. Joint and Several..................................................................................62
ix
17.3.10. Miscellaneous.....................................................................................63
17.4. APPLICATION OF FUNDS....................................................................................63
17.5. LIMITATION OF LIABILITY; WAIVER.........................................................................63
17.6. NOTICE..................................................................................................64
18. Administrative Agent and Lenders.............................................................................64
18.1. APPOINTMENT, POWERS, AND IMMUNITIES.....................................................................64
18.2. RELIANCE BY ADMINISTRATIVE AGENT........................................................................64
18.3. EMPLOYMENT OF AGENTS AND COUNSEL........................................................................65
18.4. DEFAULTS................................................................................................65
18.5. RIGHTS AS LENDER........................................................................................65
18.6. INDEMNIFICATION.........................................................................................66
18.7. NOTIFICATION OF LENDERS.................................................................................66
18.8. NON-RELIANCE ON AGENT AND OTHER LENDERS.................................................................66
18.9. RESIGNATION.............................................................................................67
18.10. COLLECTIONS AND DISTRIBUTIONS TO LENDERS BY ADMINISTRATIVE AGENT.......................................67
19. Change in Circumstances......................................................................................68
19.1. COMPENSATION FOR INCREASED COSTS AND REDUCED RETURNS....................................................68
19.1.1. Law Changes or Tax Impositions.....................................................................68
19.1.2. Capital Adequacy...................................................................................69
19.1.3. Notice to Borrower.................................................................................69
19.2. MARKET FAILURE..........................................................................................69
19.3. ILLEGALITY..............................................................................................70
19.4. COMPENSATION............................................................................................70
19.5. TREATMENT OF AFFECTED LOANS.............................................................................70
19.6. TAXES...................................................................................................71
19.6.1. Gross-Up...........................................................................................71
19.6.2. Lenders' Undertakings..............................................................................72
19.6.3. Survival of Borrower's Obligations.................................................................73
19.7. USURY...................................................................................................73
20. General......................................................................................................73
20.1. LENDERS' RIGHT TO CURE..................................................................................73
x
20.2. RIGHTS NOT EXCLUSIVE....................................................................................74
20.3. SURVIVAL OF AGREEMENTS..................................................................................74
20.4. ASSIGNMENTS.............................................................................................74
20.4.1. Permitted Assignments..............................................................................74
20.4.2. Consequences and Effect of Assignments.............................................................75
20.4.3. Agreements Upon Assignment.........................................................................75
20.4.4. Register...........................................................................................76
20.4.5. Notice to Borrower of Assignment...................................................................76
20.4.6. Assignment to Federal Reserve Bank.................................................................76
20.5. SALE OF PARTICIPATIONS..................................................................................77
20.6. INFORMATION.............................................................................................77
20.7. PAYMENT OF EXPENSES.....................................................................................77
20.8. GENERAL INDEMNITY.......................................................................................78
20.9. LETTERS OF CREDIT.......................................................................................79
20.10. CHANGES IN ACCOUNTING PRINCIPLES.......................................................................79
20.11. LOAN RECORDS...........................................................................................80
20.12. OTHER SECURITY AND GUARANTIES..........................................................................80
20.13. LOAN OBLIGATIONS PAYABLE IN DOLLARS....................................................................80
21. Miscellaneous................................................................................................81
21.1. NOTICES.................................................................................................81
21.2. AMENDMENTS AND MODIFICATIONS; WAIVERS AND CONSENTS......................................................81
21.3. RIGHTS CUMULATIVE.......................................................................................82
21.4. SUCCESSORS AND ASSIGNS..................................................................................82
21.5. SEVERABILITY............................................................................................82
21.6. COUNTERPARTS............................................................................................82
21.7. GOVERNING LAW; NO THIRD PARTY RIGHTS....................................................................82
21.8. COUNTERPART FACSIMILE EXECUTION.........................................................................83
21.9. EFFECT OF MERGER OF BANK................................................................................83
21.10. NEGOTIATED TRANSACTION.................................................................................83
21.14. INCORPORATION BY REFERENCE.............................................................................85
21.15. STATUTORY NOTICE - INSURANCE...........................................................................85
xi
21.16. STATUTORY NOTICE - ORAL COMMITMENTS....................................................................85
xii
LOAN AGREEMENT
In consideration of the mutual agreements herein and other sufficient
consideration, the receipt of which is hereby acknowledged, TALX Corporation, a
Missouri corporation (Borrower) and LaSalle Bank National Association (LaSalle),
as Administrative Agent, and LaSalle and Southwest Bank of St. Louis, as
Lenders, agree as follows:
1. EFFECTIVE DATE. This Agreement is effective March 27, 2002.
2. DEFINITIONS AND RULES OF CONSTRUCTION.
2.1. LISTED DEFINITIONS. Capitalized words defined in the Glossary attached
hereto as Exhibit 2.1 shall have such defined meanings wherever used in
this Agreement and the other Loan Documents. The inclusion of a defined
term in the Glossary that is not used elsewhere in this Agreement or in the
other Loan Documents shall not affect the interpretation or construction of
this Agreement or the other Loan Documents.
2.2. OTHER DEFINITIONS. If a capitalized word in this Agreement is not
defined in the Glossary, it shall have such meaning as defined elsewhere
herein, or if not defined elsewhere herein, the meaning defined in the UCC.
Terms are italicized in this Agreement where they are defined.
2.3. REFERENCES TO COVERED PERSON. The words Covered Person, a Covered
Person, any Covered Person, each Covered Person and every Covered Person
refer to Borrower and each of its now existing or later acquired, created
or organized Subsidiaries separately. The words Covered Persons refers to
Borrower and its now existing or later acquired, created or organized
Subsidiaries collectively.
2.4. REFERENCES TO REQUIRED LENDERS. The words Required Lenders means any
one or more Lenders whose shares of Lenders' Exposure at the relevant time
aggregate at least 51%.
2.5. ACCOUNTING TERMS. Unless the context otherwise requires, accounting
terms herein that are not defined herein shall be determined under GAAP.
All financial measurements contemplated hereunder respecting Borrower shall
be made and calculated for Borrower and all of its now existing or later
acquired, created or organized Subsidiaries, if any, on a consolidated and
consolidating basis in accordance with GAAP unless expressly provided
otherwise herein.
2.6. MEANING OF SATISFACTORY. Whenever herein a document or matter is
required to be satisfactory to Administrative Agent or satisfactory to
Lenders or satisfactory to Required Lenders, unless expressly stated
otherwise such document must be satisfactory to Administrative Agent,
Lenders or Required Lenders (as applicable) in both form and substance, and
unless expressly stated otherwise Administrative Agent, Lenders or Required
Lenders (as applicable) shall have the commercially reasonable discretion
to determine whether the document or matter is satisfactory.
1
2.7. COMPUTATION OF TIME PERIODS. In computing or defining periods of time
from a specified date to a later specified date, and in computing the
accrual of interest or fees, the word from shall mean from and
including and the words to and until shall each mean to but excluding.
Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed, and
references in this Agreement to months and years are to calendar
months and calendar years unless otherwise specified.
2.8. GENERAL. Unless the context of this Agreement clearly requires
otherwise: (i) references to the plural include the singular and vice
versa; (ii) references to any Person include such Person's successors
and assigns but, if applicable, only if such successors and assigns
are permitted by this Agreement; (iii) references to one gender
include all genders; (iv) including is not limiting; (v) or has the
inclusive meaning represented by the phrase and/or; (vi) the words
hereof, herein, hereby, hereunder and similar terms in this Agreement
refer to this Agreement as a whole, including its Exhibits, and not to
any particular provision of this Agreement; (vii) the word Section or
section and Page or page refer to a section or page, respectively, of,
and the word Exhibit refers to an Exhibit to, this Agreement unless it
expressly refers to something else; (viii) reference to any agreement,
document, or instrument (including this Agreement and any other Loan
Document or other agreement, document or instrument defined herein),
means such agreement, document, or instrument as amended, modified,
restated or replaced and in effect from time to time in accordance
with the terms thereof and, if applicable, the terms hereof, and
includes all attachments thereto and documents incorporated therein,
if any; and (ix) general and specific references to any Law means such
Law as amended, modified, codified or reenacted, in whole or in part,
and in effect from time to time. Section captions and the Table of
Contents are for convenience only and shall not affect the
interpretation or construction of this Agreement or the other Loan
Documents.
3. LENDERS' COMMITMENTS. Subject to the terms and conditions hereof, and in
reliance upon the Representations and Warranties, Lenders make the following
commitments to Borrower:
3.1. REVOLVING LOAN COMMITMENTS.
3.1.1. AGGREGATE AMOUNT; REDUCTIONS. Subject to the limitations in
Section 3.1.2 and elsewhere herein, each Lender commits to make
available to Borrower, from the Effective Date to the Revolving Loan
Maturity Date, such Lender's pro-rata share (as listed on Exhibit 3
hereto) of an Aggregate Revolving Loan Commitment of $10,000,000.00,
by funding such Lender's pro-rata share of Revolving Loan Advances
made from time to time by Administrative Agent as provided herein.
Subject to the limitations in Section 3.1.2 and elsewhere herein,
payments and prepayments that are applied to reduce the Aggregate
Revolving Loan may be re-borrowed through Revolving Loan Advances.
2
3.1.2. LIMITATION ON REVOLVING LOAN ADVANCES. No Revolving Loan
Advance will be made which would result in the Aggregate Revolving
Loan exceeding the Maximum Available Amount and no Revolving Loan
Advance will be made on or after the Revolving Loan Maturity Date.
Lenders may, however, in their absolute discretion make such Revolving
Loan Advances, but shall not be deemed by doing so to have increased
the Maximum Available Amount and shall not be obligated to make any
such Revolving Loan Advances thereafter. At any time that there is an
Existing Default, the Aggregate Revolving Loan Commitment may be
canceled as provided in Section 17.3. The Maximum Available Amount on
any date shall be a Dollar amount equal to (i) the Aggregate Revolving
Loan Commitment minus (ii) (a) the amount outstanding under the
Aggregate Revolving Loan on such date, and (b) the Letter of Credit
Exposure on such date (except to the extent that a Revolving Loan
Advance will be used immediately to reimburse Letter of Credit Issuer
for unreimbursed draws on a Letter of Credit).
3.1.3. REVOLVING NOTES. The obligation of Borrower to repay each
Lender's Revolving Loan shall be evidenced by a promissory note
payable to the order of
3
such Lender in a maximum principal amount
equal to the amount of its Revolving Loan Commitment and otherwise in
form and substance satisfactory to Lenders.
3.2. TERM LOAN COMMITMENTS.
3.2.1. AGGREGATE TERM LOAN. Each Lender commits to make available to
Borrower such Lender's pro-rata share (as listed on Exhibit 3 hereto)
of an Aggregate Term Loan Commitment of $30,000,000.00 by funding such
Lender's pro-rata share of a single Term Loan Advance by
Administrative Agent on the Effective Date as provided herein. Each
Lender's Term Loan Commitment is its pro-rata share of the Aggregate
Term Loan Commitment.
3.2.2. TERM LOAN NOTES. The obligation of Borrower to repay each
Lender's Term Loan shall be evidenced by a promissory note payable to
the order of such Lender in a principal amount equal to its pro-rata
share of the Aggregate Term Loan Commitment and otherwise in form and
substance satisfactory to Lenders.
3.3. LETTER OF CREDIT COMMITMENT. Letter of Credit Issuer commits to
issue standby letters of credit and commercial (documentary) letters
of credit for the account of Borrower from time to time from the
Effective Date to the Revolving Loan Maturity Date, but only in
connection with transactions satisfactory to Letter of Credit Issuer
and only if the Letter of Credit Exposure will not as a result of such
issuance exceed the lesser of (i) $1,000,000.00 and (ii) the Maximum
Available Amount. The expiration date of any Letter of Credit will be
a Business Day that is not later than the date which is twenty-five
days prior to the Revolving Loan Maturity Date; provided, however,
that the expiration date for a Letter of Credit may be later than the
Revolving Loan Maturity Date if Letter of Credit Issuer consents to
such issuance and Borrower provides to Letter of Credit Issuer cash
collateral satisfactory to Letter of Credit Issuer as security for
Borrower's obligation to reimburse Letter of Credit Issuer for all
draws thereunder. Immediately upon the issuance by Letter of Credit
Issuer of a Letter of Credit in accordance with the terms and
conditions of this Agreement, Letter of Credit Issuer shall be deemed
to have sold and transferred to each other Lender, and such other
Lender shall be deemed to have purchased and received from Letter of
Credit Issuer, a pro-rata undivided interest and participation in such
Letter of Credit, the reimbursement obligation of Borrower with
respect thereto, and any guaranty thereof or collateral therefor. Such
other Lender's pro-rata undivided interest shall be the same as its
pro-rata share of the Aggregate Revolving Loan Commitment.
4. INTEREST.
4.1. INTEREST ON DRAWS ON LETTERS OF CREDIT. The unreimbursed amount of
each draw on a Letter of Credit shall bear interest at a rate per annum
equal to the Adjusted Base Rate applicable to Revolving Loans.
4.2. INTEREST ON AGGREGATE LOANS. Borrower may, as provided in Section 7,
designate the whole of an Advance or
4
any part of an Advance (provided that any partial designation of the Term
Loan Advance shall apply to a minimum of $1,000,000.00 of the Term Loan) to
be either a Base Rate Advance or a Eurodollar Advance; provided, however,
during the existence of an Existing Default, Borrower may not designate an
Advance or part of an Advance as a Eurodollar Advance. Each Base Rate
Advance when made will become a Base Rate Loan, which shall bear interest
at the Adjusted Base Rate. Each Eurodollar Advance when made will become a
Eurodollar Loan, which shall bear interest at the Adjusted Eurodollar Rate.
Borrower may also, as provided herein, convert some or all of a Base Rate
Loan into a Eurodollar Loan and some or all of a Eurodollar Loan into a
Base Rate Loan. For each Eurodollar Loan, Borrower shall select an Interest
Period as provided in Section 4. A Eurodollar Loan shall bear interest at
the Adjusted Eurodollar Rate throughout the applicable Interest Period
designated by Borrower.
4.3. ADJUSTED BASE RATE. The Adjusted Base Rate for any Base Rate Loan
which is a Revolving Loan shall be the Base Rate plus the applicable Base
Rate Margin determined from the table in Section 4.5 and the Adjusted Base
Rate for any Base Rate Loan which is a Term Loan shall be the Base Rate
plus the applicable Base Rate Margin determined from the table in Section
4.5.
4.4. ADJUSTED EURODOLLAR RATE. The Adjusted Eurodollar Rate for any
Eurodollar Loan which is a Revolving Loan shall be the Eurodollar Rate plus
the applicable Eurodollar Margin determined from the table in Section 4.5,
and the Adjusted Eurodollar Rate for any Eurodollar Loan which is a Term
Loan shall be the Eurodollar Rate plus the applicable Eurodollar Margin
determined from the table in Section 4.5.
4.5. BASE RATE MARGINS AND EURODOLLAR MARGINS.
Commencing on the Effective Date and for the twelve (12) months thereafter,
the Base Rate Margin shall be 0.0% and the Eurodollar Margin shall be
2.25%. Thereafter, such Margins shall be determined as follows:
-------------------------------------- --------------------- --------------------
If the ratio of Borrower's Total
Indebtedness to EBITDA (for the four The Base Rate The Eurodollar
fiscal quarter period of Borrower Margin is: Margin is:
most recently ended) is:
-------------------------------------- --------------------- --------------------
Greater than or equal to 1.25 to 1 0.0% 2.25%
and less than or equal 2.00 to 1
-------------------------------------- --------------------- --------------------
Less than 1.25 to 1 0.0% 2.00%
-------------------------------------- --------------------- --------------------
Commencing on the first anniversary of the Effective Date, applicable
Margins shall be re-determined by Administrative Agent based on the ratio
of Borrower's Total
5
Indebtedness to EBITDA for the four fiscal quarter period of Borrower most
recently ended. Thereafter, the applicable Margins shall be re-determined
by Administrative Agent promptly after each delivery by Borrower to
Administrative Agent of Borrower's Financial Statements (and accompanying
Compliance Certificate) as required in Section 14.14.2 and will become
applicable on the third Business Day following the day when Borrower
delivers such Financial Statements (and accompanying Compliance
Certificate) to Administrative Agent.
4.6. CONVERSION OF LOANS. Borrower may (i) as of any Business Day convert
some or all of a Base Rate Loan to a Eurodollar Loan, or (ii) at the end of
any Interest Period of a Eurodollar Loan, continue the Loan as a Eurodollar
Loan for an additional Interest Period or convert some or all of such
Eurodollar Loan to a Base Rate Loan; provided however, that if there is an
Existing Default, Borrower may not convert a Base Rate Loan to a Eurodollar
Loan or continue a Eurodollar Loan for an additional Interest Period and
further provided that any designation of a portion of the Term Loan Advance
shall apply to a minimum of $1,000,000.00 of the Term Loan. To cause any
conversion or continuation, Borrower shall give Administrative Agent, prior
to 11:00 a.m. Local Time three Business Days prior to the date the
conversion or continuation is to be effective, a written request (which may
be mailed, personally delivered or telecopied as provided in Section 21.1)
(i) specifying whether a conversion or continuation is requested, (ii) in
the case of a conversion, specifying the amount to be converted and whether
it is to be a Eurodollar Loan or a Base Rate Loan upon the conversion, and
(iii) in the case of any conversion to or continuation of a Eurodollar
Loan, specifying the Interest Period therefor. If such notice is not given
prior to 11:00 a.m. Local Time on the third Business Day preceding the last
day of the Interest Period of a Eurodollar Loan, then Borrower shall be
deemed to have timely given a notice to Administrative Agent requesting to
convert all of such Eurodollar Loan to a Base Rate Loan. In the case of a
Eurodollar Loan, any conversion or continuation shall become effective only
on the day following the last day of the current Interest Period.
6
4.7. INTEREST PERIODS FOR EURODOLLAR LOANS. For each Eurodollar Loan
Borrower shall select an Interest Period that is either 30, 60, 90, or 180
days; provided that:
(i) every such Interest Period for a Eurodollar Advance shall commence
on the date of the Advance or on the date of the conversion or
continuation of any Loan as a Eurodollar Loan;
(ii) if any Interest Period would otherwise expire on a day of a
calendar month which is not a Business Day, then such Interest Period
shall expire on the next succeeding Business Day in that calendar
month; provided, however, that if the next succeeding Business Day
would be in the following calendar month, it shall expire on the first
preceding Business Day;
(iii) any Interest Period that begins on the last 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 Business Day of the calendar month at
the end of such Interest Period; and
(iv) no Interest Period for a Eurodollar Loan that is part of the
Aggregate Revolving Loan shall extend beyond the Revolving Loan
Maturity Date, and no Interest Period for a Eurodollar Loan that is
part of the Aggregate Term Loan shall extend beyond the Term Loan
Maturity Date.
4.8. TIME OF ACCRUAL. Interest shall accrue on all principal amounts
outstanding from the date when first outstanding to the date when no longer
outstanding. Amounts shall be deemed outstanding until payments are applied
thereto as provided herein.
4.9. COMPUTATION. Interest shall be computed for the actual days elapsed
over a year deemed to consist of 360 days. Interest rates that are based on
the Base Rate shall change simultaneously with any change in the Base Rate
and shall be effective for the entire day on which such change becomes
effective. The Base Rate will be determined by Administrative Agent before
the initial Advances on the Effective Date and on each Business Day
thereafter when the Base Rate changes.
4.10. RATE AFTER MATURITY. Borrower shall pay interest on the Aggregate
Loans and any Obligations with respect to Letters of Credit after their
Maturity, and, at the option of Administrative Agent, on the Aggregate
Loans and on the other Loan Obligations after the occurrence of an Event of
Default, at a rate per annum of three percent (3.0%) plus the Adjusted Base
Rate.
5. FEES.
5.1. COMMITMENT FEE. On or before the Effective Date Borrower shall pay to
Administrative Agent for the pro rata account of Lenders on the Effective
Date a non-refundable, one time Commitment Fee of $200,000.00.
7
5.2. REVOLVING LOAN UNUSED FEE. Borrower shall pay to Administrative Agent
and solely for the account of Administrative Agent, for the account of
Lenders a non-refundable, recurring Revolving Loan Unused Fee calculated by
applying the daily equivalent of an annual Unused Fee Rate (computed for
the actual number of days over a year deemed to consist of 360 days) to the
Unused Revolving Loan Commitment on each day during the period from the
Effective Date to the Revolving Loan Maturity Date. The Unused Revolving
Loan Commitment on any day shall be the difference between (i) the amount
of the Aggregate Revolving Loan Commitment and (ii) the sum of (a) the
Aggregate Revolving Loan, and (b) the aggregate undrawn amount of
outstanding Letters of Credit, and (c) the total of all amounts drawn on
outstanding Letters of Credit but not reimbursed to Letter of Credit Issuer
by Borrower as of the close of business on such day. The Revolving Loan
Unused Fee shall be payable quarterly in arrears commencing on the last day
of the first calendar quarter ending after the Effective Date and
continuing on the last day of each calendar quarter thereafter and on the
Revolving Loan Maturity Date. The annual Unused Fee Rate shall be 0.25%.
5.3. LETTER OF CREDIT FEE. Borrower shall pay to Administrative Agent for
the account of Letter of Credit Issuer and each other Lender with a
Revolving Loan Commitment, a non-refundable recurring Letter of Credit Fee
for each Letter of Credit issued by Letter of Credit Issuer. The Letter of
Credit Fee for any Letter of Credit shall be an amount equal to the
aggregate undrawn amount of such Letter of Credit multiplied by the
Eurodollar Margin in effect on the date such Letter of Credit is issued.
The Letter of Credit Fee for each Letter of Credit shall be payable in
advance upon its issuance and quarterly thereafter on the last day of each
calendar quarter thereafter while such Letter of Credit is outstanding.
5.4. LETTER OF CREDIT FRONTING FEE. Borrower shall pay to Letter of Credit
Issuer a non-refundable, one-time Fronting Fee equal to 0.125% of the face
amount of each Letter of Credit issued by Letter of Credit Issuer. The
Fronting Fee due for any Letter of Credit shall be payable in advance,
commencing on the issuance date of such Letter of Credit.
5.5. OTHER LETTER OF CREDIT FEES. Borrower shall pay to Letter of Credit
Issuer such Letter of Credit Issuer's other customary fees for issuance,
amendment, or renewal of a Letter of Credit and, as Letter of Credit Issuer
and Borrower may agree with respect to each Letter of Credit, for each
negotiation of a draft drawn under such Letter of Credit.
5.6. AGENCY FEE. Borrower shall pay to Administrative Agent, and solely for
the account of Administrative Agent, an annual non-refundable Agency Fee of
$15,000.00. The Agency Fee for the first twelve (12) months shall be paid
on or before the Effective Date, and an annual Agency Fee payment shall
thereafter be made to Administrative Agent on each anniversary date of the
Effective Date.
5.7. CALCULATION OF FEES. All of the foregoing fees and all other fees
payable to Administrative Agent or any Lender that are based on an annual
percentage shall be
8
calculated on the basis of a year deemed to consist of 360 days and for the
actual number of days elapsed.
6. PAYMENTS.
6.1. SCHEDULED PAYMENTS ON AGGREGATE REVOLVING LOAN.
6.1.1. INTEREST. Borrower shall pay interest accrued on each Base Rate
Loan included in the Aggregate Revolving Loan monthly in arrears
beginning on the first day of the first calendar month ending after
the Effective Date and continuing on the first day of each calendar
month thereafter, and on the Revolving Loan Maturity Date. Borrower
shall pay interest accrued on each Eurodollar Loan included in the
Aggregate Revolving Loan at the end of its Interest Period and, in
addition, for each such Eurodollar Loan with an Interest Period longer
than 90 days, Borrower shall pay interest accrued thereon quarterly on
the same date of each quarter as the date such Eurodollar Loan was
made. Borrower shall pay interest accrued thereon on each day that
would have been the end of an Interest Period with respect to such
Eurodollar Loan had successive Interest Periods of 90 days' duration
been applicable to such Eurodollar Loan. Borrower shall pay interest
accrued on each Revolving Loan after the Revolving Loan Maturity Date
on demand.
6.1.2. PRINCIPAL. Borrower shall repay the entire amount of the
Aggregate Revolving Loan as then outstanding on February 27, 2005.
6.2. SCHEDULED PAYMENTS ON TERM LOAN.
6.2.1. INTEREST. Borrower shall pay interest accrued on each Base Rate
Loan included in the Aggregate Term Loan monthly in arrears, beginning
on the last day of the first calendar month ending after the Effective
Date, and continuing on the last day of each calendar month
thereafter, and on the Term Loan Maturity Date. Borrower shall pay
interest accrued on each Eurodollar Loan included in the Aggregate
Term Loan at the end of its Interest Period and, in addition, for each
such Eurodollar Loan with an Interest Period longer than 90 days,
Borrower shall pay interest accrued thereon quarterly on the same date
of each quarter as the date such Eurodollar Loan was made. Borrower
shall pay interest accrued thereon on each day that would have been
the end of an Interest Period with respect to such Eurodollar Loan had
successive Interest Periods of 90 days' duration been applicable to
such Eurodollar Loan. Borrower shall pay interest accrued on the
Aggregate Term Loan after the Term Loan Maturity Date on demand.
6.2.2. PRINCIPAL. Borrower shall repay the Aggregate Term Loan in
quarterly installments in the amounts set forth in the table below on
the dates set forth in the table below, with a final installment on
February 27, 2005 in the amount of the Aggregate Term Loan as then
outstanding.
9
------------------------------------------- ------------------------------------------------------
On the following dates: Borrower shall make principal payments
each in the following amounts:
------------------------------------------- ------------------------------------------------------
June 30, 2002, September 30, 2002, Two Million Dollars ($2,000,000.00)
December 31, 2002, and March 31, 2003
------------------------------------------- ------------------------------------------------------
June 30, 2003, September 30, 2003, Two Million Five Hundred Thousand Dollars
December 31, 2003, and March 31, 2004 ($2,500,000.00)
------------------------------------------- ------------------------------------------------------
June 30, 2004, September 30, 2004, and Three Million Dollars ($3,000,000.00)
December 31, 2004
------------------------------------------- ------------------------------------------------------
6.3. PREPAYMENTS.
6.3.1. VOLUNTARY PREPAYMENTS. If, during the twelve (12) month period
commencing on the Effective Date, Borrower wishes to wholly or
partially prepay any Base Rate Loan or Eurodollar Loan that is
included in the Aggregate Term Loan, Borrower shall have the privilege
of making such prepayment, subject to the limitations in the following
sentences, and provided Borrower pays to Administrative Agent a
prepayment premium in the amount of Six Hundred Thousand and no/100
Dollars ($600,000.00) (except that a prepayment made with Borrower's
internally generated cash flow pursuant to Section 6.3.3.2, which
shall not include any cash generated by any financing provided by any
third party or cash generated by any public issuance of any equity
securities or debt of Borrower, or any issuance of equity securities
or debt to any qualified investors, shall not require a payment of
such premium). After the expiration of the twelve (12) month period
commencing on the Effective Date, subject to the limitations in
10
the following sentences, Borrower may wholly or partially prepay any
Base Rate Loan or Eurodollar Loan that is included in the Aggregate
Term Loan without payment of a premium. Subject to the limitations in
the following sentences, Borrower may wholly prepay any Base Rate Loan
or Eurodollar Loan that is included in the Aggregate Revolving Loan,
at any time and may make a partial prepayment thereon from time to
time, without payment of a premium. Notwithstanding the foregoing, no
partial or entire prepayment may be made hereunder unless (i) Borrower
gives Administrative Agent written notice (which may be mailed,
personally delivered or telecopied as provided in Section 21.1) or
telephonic notice (promptly confirmed in writing in the manner
provided in Section 21.1) of Borrower's intention to make such
prepayment at least one Business Day prior to tendering such
prepayment, (ii) the total amount of such prepayment is a whole
multiple of $1,000.00 (iii) Borrower pays any accrued interest on the
amount prepaid at the time of such prepayment, (iv) Borrower pays any
amount that is due under Section 19.4 as a consequence of the
prepayment. All such prepayments, unless otherwise expressly stated in
writing by Borrower to Administrative Agent prior to the making of
such prepayment, will be deemed made on the Base Rate Loans included
in the Aggregate Revolving Loan until they are reduced to zero, and
then to the Eurodollar Loans included in the Aggregate Revolving Loan
(and all penalties and premiums due hereunder in connection therewith)
until they are reduced to zero, and will be
11
applied by Lenders to reduce the Revolving Loans in accordance with
their respective prorata shares of the Aggregate Revolving Loan
Commitment. All subsequent prepayments shall be deemed made on the
Aggregate Term Loan (and all premiums due hereunder in connection
therewith) until reduced to zero, and will be applied by Lenders to
reduce their prorata shares, and consequently the aggregate amounts of
the quarterly repayment installments required under Sections 6.2.2 in
the inverse order of their due dates.
6.3.2. MANDATORY PREPAYMENTS WHEN OVER-ADVANCES EXIST. If at any time
the Aggregate Revolving Loan exceeds the Maximum Available Amount,
whether as a result of optional Revolving Loan Advances by Lenders as
contemplated by Section 3.1.2 or otherwise, Borrower shall on demand
make a payment in the amount of the excess to Administrative Agent for
the account of Lenders on the Aggregate Revolving Loan. Each such
prepayment will be applied by Administrative Agent and Lenders first
to reduce the Base Rate Loans that are included in the Aggregate
Revolving Loan (and consequently a ratable portion of each Lender's
Revolving Loan) until they are reduced to zero and then to reduce the
Eurodollar Loans that are included in the Aggregate Revolving Loan
(and consequently a ratable portion of each Lender's Revolving Loan).
In the case of such a prepayment, Borrower will pay any accrued
interest on the amount prepaid at the time of such prepayment, and
Borrower will pay any amount that is due under Section 19.4 as a
consequence of the prepayment.
6.3.3. OTHER MANDATORY PREPAYMENTS.
12
6.3.3.1. INSURANCE/CONDEMNATION PROCEEDS. All
Insurance/Condemnation Proceeds in connection with any loss or
condemnation, the proceeds of which exceed $100,000.00, shall
be deposited in an interest bearing Proceeds Account with
Administrative Agent in the name of Borrower promptly upon
receipt thereof by Borrower or Administrative Agent. Within 180
days after such receipt Borrower may expend, or commit to
expend, some or all of the funds in the Proceeds Account for
rebuilding, repairing or replacing the property for which such
Insurance/Condemnation Proceeds were paid. All funds in the
Proceeds Account that have not been committed to be so expended
by the 180th day after receipt shall be distributed by
Administrative Agent to Lenders in accordance with their
pro-rata shares of the Aggregate Term Loan Commitment and
applied by them to reduce the Aggregate Term Loan, and all
funds remaining in the Proceeds Account upon completion of such
rebuilding, repairing or replacement shall be distributed by
Administrative Agent to Lenders in accordance with their
pro-rata shares of the Aggregate Term Loan Commitment and
applied by them to reduce the Aggregate Term Loan. The
foregoing notwithstanding, Administrative Agent shall have the
right to debit the Proceeds Account in the amount of, and apply
the debit amount to pay, any of the Loan Obligations that are
not paid when due as provided herein or at any time upon the
occurrence and during the continuation of an Event of Default.
Borrower hereby assigns and grants to Administrative Agent for
the benefit of Lenders a first priority Security Interest in
any such Proceeds Account as security for payment and
performance of the Loan Obligations. Expenditures by Borrower
for such rebuilding, repairing or replacement in excess of the
amount of the Insurance/Condemnation Proceeds shall be deemed
Capital Expenditures. Administrative Agent is hereby authorized
to participate in any proceeding for the condemnation or other
taking of any of Borrower's property and Borrower from time to
time will deliver to Administrative Agent all instruments
reasonably requested by Administrative Agent to permit such
participation.
6.3.3.2. EXCESS CASH FLOW. Within 120 days after the end of
each fiscal year of Borrower, commencing with the fiscal year
ending March 31, 2003, Borrower shall pay to Administrative
Agent for the ratable benefit of Lenders, to be applied to
reduce the Aggregate Term Loan, an aggregate amount equal to
fifty percent (50%) of Borrower's Excess Cash Flow for such
fiscal year. Any such payment will be applied by Administrative
Agent and Lenders to reduce the Aggregate Term Loan. Excess
Cash Flow means, for any period of calculation, EBITDA minus
the sum of Fixed Charges and the amount of any prepayment
(including prepayment premium) of long term Indebtedness of
Borrower in such period. Notwithstanding the foregoing, the
Excess Cash Flow payment requirement shall no longer apply as
of the date that the following
13
conditions are satisfied: (a) the first full fiscal year of the
Borrower following the Effective Date of this Agreement shall
have elapsed and Borrower shall have made its first Excess Cash
Flow payment as required herein; and (b) Borrower shall
thereafter demonstrate for two (2) consecutive quarters that
the ratio of Borrower's Total Indebtedness to EBITDA (for the
four fiscal quarter periods of Borrower most recently ended)
for each such quarter is less than 1.25 to 1 by providing such
information in the Compliance Certificate.
6.3.3.3. CHANGE IN CHIEF EXECUTIVE If at any time within
twenty-four (24) months after the Effective Date, the chief
executive officer of Borrower is no longer Xxxxxxx X. Xxxxxxxx,
then Borrower shall be required to prepay the Loan Obligations
as of the date of the change in chief executive officer and
Borrower shall make such prepayment in accordance with the
terms of Section 6.3.1; provided, however, that Borrower shall
not be required to make such a prepayment if Borrower retains a
replacement chief executive officer satisfactory to all of the
Lenders within 120 days after Xxxxxxx X. Xxxxxxxx ceases being
Borrower's chief executive officer.
14
Every prepayment under this Section 6.3.3 that is required to
be applied to reduce the Aggregate Term Loan shall be
distributed by Administrative Agent to Lenders in accordance
with their pro-rata shares of the Aggregate Term Loan
Commitment and applied by Lenders to reduce their pro-rata
shares, and consequently the aggregate amounts, of the
repayment installments required under Section 6.2.2 in the
inverse order of their due dates. If application to the Term
Loans of any prepayment required under this Section 6.3.3
reduces the Term Loans (and consequently the Aggregate Term
Loan) to zero, the remaining amount of such prepayment shall be
applied by Lenders to reduce the Revolving Loans (and
consequently the Aggregate Revolving Loan).
6.4. REIMBURSEMENT OBLIGATIONS OF BORROWER. Each Borrower hereby
unconditionally agrees to immediately pay to Letter of Credit Issuer on
demand at the Letter of Credit Issuer's Applicable Lending Office all
amounts required to pay all drafts drawn under Letters of Credit issued for
the account of such Borrower and all reasonable expenses incurred by Letter
of Credit Issuer in connection with such Letters of Credit and in any event
and without demand to remit to Letter of Credit Issuer (which may be
through obtaining Advances if permitted under Section 3.1.2) sufficient
funds to pay all debts and liabilities arising under any Letter of Credit
issued for the account of such Borrower.
15
6.5. MANNER OF PAYMENTS AND TIMING OF APPLICATION OF PAYMENTS.
6.5.1. PAYMENT REQUIREMENT. Unless expressly provided to the contrary
elsewhere herein, Borrower shall make each payment on the Loan
Obligations to Administrative Agent for the account of Lenders as
required under the Loan Documents at the Applicable Lending Office of
the Administrative Agent on the date when due, without deduction,
setoff or counterclaim. All such payments will be distributed by
Administrative Agent to Lenders as provided in Section 18.10 for
application to the Loan Obligations as provided herein.
6.5.2. APPLICATION OF PAYMENTS AND PROCEEDS. All payments received by
Administrative Agent in immediately available funds at or before 1:00
p.m. (Local Time) on a Business Day will be distributed by
Administrative Agent to Lenders as provided in Section 18.10 on the
same Business Day. Such payments received on a day that is not a
Business Day or after 1:00 p.m. (Local Time) on a Business Day will be
distributed by Administrative Agent to Lenders as provided in Section
18.10 on the next Business Day. The amount so distributed to a Lender
will be applied by such Lender to the relevant Loan Obligation on the
Business Day when received.
16
6.5.3. INTEREST CALCULATION. Section 6.5.2 notwithstanding, for
purposes of interest calculation only, (i) a payment by check, draft
or other instrument received at or before 1:00 p.m. (Local Time) on a
Business Day shall be deemed to have been applied to the relevant Loan
Obligation on the second following Business Day, (ii) a payment by
check, draft or other instrument received on a day that is not a
Business Day or after 1:00 p.m. on a Business Day shall be deemed to
have been applied to the relevant Loan Obligation on the third
following Business Day, (iii) a payment in cash or by wire transfer
received at or before 1:00 p.m. (Local Time) on a Business Day shall
be deemed to have been applied to the relevant Loan Obligation on the
Business Day when it is received, and (iv) a payment in cash or by
wire transfer received on a day that is not a Business Day or after
1:00 p.m. (Local Time) on a Business Day shall be deemed to have been
applied to the relevant Loan Obligation on the next Business Day.
17
6.6. RETURNED INSTRUMENTS. If a payment is made by check, draft or other
instrument and the check, draft or other instrument is returned unpaid, any
application of the payment to the Loan Obligations will be reversed and
will be treated as never having been made.
6.7. COMPELLED RETURN OF PAYMENTS OR PROCEEDS. If Administrative Agent or
any Lender is for any reason compelled to surrender any payment or any
proceeds of the Collateral because such payment or the application of such
proceeds is for any reason invalidated, declared fraudulent, set aside, or
determined to be void or voidable as a preference, an impermissible setoff,
or a diversion of trust funds, then this Agreement and the Loan Obligations
to which such payment or proceeds was applied or intended to be applied
shall be revived as if such application was never made; and Borrower shall
be liable to pay to Administrative Agent or such Lender, and shall
indemnify Administrative Agent or such Lender for and hold Administrative
Agent or such Lender harmless from any loss with respect to, the amount of
such payment or proceeds surrendered. This Section shall be effective
notwithstanding any contrary action that Administrative Agent or such
Lender may take in reliance upon its receipt of any such payment or
proceeds.
18
Any such contrary action so taken by Administrative Agent or such Lender
shall be without prejudice to Administrative Agent's or such Lender's
rights under this Agreement and shall be deemed to have been conditioned
upon the application of such payment or proceeds having become final and
indefeasible. The provisions of this Section shall survive termination of
the Commitments, the expiration of the Letters of Credit and the
indefeasible full payment and satisfaction of all of the Loan Obligations.
6.8. DUE DATES NOT ON BUSINESS DAYS. If any payment required hereunder
becomes due on a date that is not a Business Day, then such due date shall
be deemed automatically extended to the next Business Day.
7. PROCEDURE FOR OBTAINING ADVANCES AND LETTERS OF CREDIT.
7.1. INITIAL ADVANCES. Provided that all conditions thereto hereunder are
satisfied and subject to the limitations contained herein, Lenders will
fund and Administrative Agent will make the initial Revolving Loan Advance
and the Term Loan Advance on the Effective Date as directed by Borrower in
a written direction delivered to Administrative Agent. The manner of
disbursement shall be subject to Lenders' approval.
7.2. SUBSEQUENT REVOLVING LOAN ADVANCES.
7.2.1. BORROWER REQUESTS. Borrower may request subsequent Revolving
Loan Advances at any time, but not more often than once each Business
Day, by submitting a request therefor to Administrative Agent as
provided in Section 7.10. Administrative Agent may treat every request
for an Advance as a request for a Base Rate Advance if Borrower does
not specify that such Advance is to be a Eurodollar Advance in
Borrower's request for an Advance. Every request for a Revolving Loan
Advance shall be irrevocable. A request for a Revolving Loan Advance
received by Administrative Agent on a day that is not a Business Day
or that is received by Administrative Agent after 11:00 a.m. (Local
Time) on a Business Day shall be treated as having been received by
Administrative Agent prior to 11:00 a.m. (Local Time) on the next
Business Day.
19
7.2.2. ADMINISTRATIVE AGENT'S RIGHT TO MAKE OTHER REVOLVING LOAN
ADVANCES.
7.2.2.1. Payment of Loan Obligations. If Borrower has failed to
timely pay any of the Loan Obligations, Administrative Agent
shall have the right to make Revolving Loan Advances at any
time and from time to time to cause timely payment of any of
the Loan Obligations. Administrative Agent may select the
Advance Date for any such Revolving Loan Advance, but such
Advance Date may only be a Business Day. Administrative Agent
will give notice to Borrower after any such Revolving Loan
Advance is made. Any such Revolving Loan Advance will be a Base
Rate Advance.
7.2.2.2. PAYMENTS TO OTHER CREDITORS. If Administrative Agent
becomes obligated to reimburse or pay to any creditor of
Borrower any amount in order to (i) obtain a release of such
creditor's Security Interest in any of the Collateral, or (ii)
otherwise satisfy an Obligation of Borrower to such creditor to
the extent not indefeasibly satisfied by the initial Advances,
and (a) an Event of Default has occurred and is continuing and
(b) there is not a good faith dispute as to the obligation to
such creditor, or there is a good faith dispute and Borrower
has failed to establish appropriate reserves adequate to pay
such items in accordance with GAAP, then Administrative Agent
shall have the right to make Revolving Loan Advances for that
purpose. Administrative Agent may select the Advance Date for
any such Advance, but such Advance Date may only be a Business
Day. Administrative Agent will give notice to Borrower after
any such Revolving Loan Advance is made. Any such Revolving
Loan Advance will be a Base Rate Advance.
7.3. LETTERS OF CREDIT. Borrower may request the issuance of a Letter of
Credit by submitting an issuance request to Letter of Credit Issuer and
executing the Letter of Credit Agreement required under Section 11.1 no
less than five Business Days prior to the requested issue date for such
Letter of Credit.
7.4. FUNDINGS.
20
7.4.1. REVOLVING ADVANCES. Not later than 11:00 a.m. (Local Time) on
each Advance Date for an Advance, Administrative Agent shall promptly
notify each Lender of the amount of the Advance to be made on that
Advance Date. Each Lender shall make immediately available to
Administrative Agent by 2:00 p.m. (Local Time) on the Advance Date
funds consisting solely of Dollars in the amount of its pro-rata share
of such Advance, rounded to the nearest xxxxx, in accordance with such
remittance instructions as may be given by Administrative Agent to
Lenders from time to time.
7.4.2. DRAWS ON LETTERS OF CREDIT. In the event that a draw is made on
a Letter of Credit and Borrower does not reimburse the amount of such
draw in full to Letter of Credit Issuer immediately on demand, Letter
of Credit Issuer shall promptly notify Administrative Agent of such
failure. Upon Administrative Agent's receipt of such notice from
Letter of Credit Issuer, Administrative Agent may notify each Lender
thereof and shall have the right to cause a Revolving Loan Advance to
be made, regardless whether such Revolving Loan Advance would result
in the Aggregate Revolving Loan exceeding the Maximum Available
Amount, by notifying each Lender of the draw, the amount of the
Revolving Loan Advance required to fund reimbursement of such draw,
and the amount of such Lender's ratable share of such Revolving Loan
Advance. The Advance Date and time for such Revolving Loan Advance
shall not be later than 1:00 p.m. (Local Time) on the first Business
Day following Administrative Agent's delivery of such notice to
Lenders. By no later than such Advance Date and time, each Lender
shall make immediately available to Administrative Agent funds
consisting solely of Dollars in the amount of its pro-rata share of
such Revolving Loan Advance, rounded to the nearest xxxxx, in
accordance with such remittance instructions as may be given by
Administrative Agent to each Lender from time to time. Each Revolving
Loan Advance made by Administrative Agent pursuant to this Section
7.4.2 shall be deemed to be a Base Rate Advance.
7.4.3. ALL FUNDINGS RATABLE. All fundings of Advances shall be made by
Lenders as provided herein in accordance with their pro-rata shares of
the respective Aggregate Commitments, as applicable. Except as
otherwise expressly provided herein, a Lender shall not be obligated
to fund Revolving Loan Advances that would result in the sum of (a)
such Lender's Revolving Loan, plus (b) such Lender's pro-rata share of
the Letter of Credit Exposure exceeding its Revolving Loan Commitment,
or make available any more than its pro-rata share of any Advance.
7.5. ADMINISTRATIVE AGENT'S AVAILABILITY ASSUMPTION.
7.5.1. ASSUMPTION AS TO LENDERS. Unless Administrative Agent has been
given written notice by a Lender prior to an Advance Date that such
Lender does not intend to make immediately available to Administrative
Agent such Lender's pro-
21
rata share of the Advance which Administrative Agent will be obligated
to make on the Advance Date, Administrative Agent may assume that such
Lender has made the required amount available to Administrative Agent
on the Advance Date and Administrative Agent may, in reliance upon
such assumption, make available to Borrower a corresponding amount. If
such corresponding amount is not in fact made immediately available to
Administrative Agent by such Lender on the Advance Date,
Administrative Agent shall be entitled to recover such corresponding
amount on demand from such Lender. If such Lender does not pay such
corresponding amount immediately upon Administrative Agent's demand
therefor, then Administrative Agent shall promptly notify Borrower and
the other Lenders, and Borrower shall pay such corresponding amount to
Administrative Agent within two (2) days of the date of delivery of
such notice by Administrative Agent. Administrative Agent shall also
be entitled to recover, either from such defaulting Lender (a
Defaulting Lender) or Borrower, interest on such corresponding amount
for each day from the date such corresponding amount was made
available by Administrative Agent to Borrower to the date such
corresponding amount is recovered by Administrative Agent, at a rate
per annum equal to (i) if paid by such Lender, the cost to
Administrative Agent of funding such amount at the Federal Funds Rate,
or (ii) if paid by Borrower, the applicable rate for the Advance in
question determined from the request therefor. Each Lender shall be
obligated only to fund its pro-rata share of an Advance subject to the
terms and conditions hereof, regardless of the failure of another
Lender to fund its pro-rata share thereof. In addition, the failure of
any Lender to pay its pro-rata share of any such Advance shall cause
such Lender to be a Defaulting Lender and such Defaulting Lender
shall, until such amount is paid to Administrative Agent (with
interest at the Federal Funds Rate), (a) permit Administrative Agent
the unconditional and irrevocable right of setoff against any amounts
(including, without limitation, payments of principal, interest, and
fees, as well as indemnity payments) received by Administrative Agent
hereunder for the benefit of any such Defaulting Lender, and (b) if
such failure to pay shall continue for a period of two Business Days,
result in any such Defaulting Lender forfeiting any right to vote on
any matter that the Required Lenders or all Lenders are permitted to
vote for hereunder (and the calculation of Required Lenders shall
exclude such Defaulting Lender's interest in the Lenders' Exposure);
provided, however, once such a failure is cured, then such Lender
shall, subsequent thereto, have all rights hereunder; provided,
further, however, if any Lender shall fail to make such a payment
within the two Business Day period specified in clause (b) above
(other than by reason of events beyond the reasonable control of such
Lender) two or more times during the term hereof, such Lender shall
permanently forfeit its right to vote hereunder (and the calculation
of Required Lenders shall exclude such Defaulting Lender's interest in
the Lenders' Exposure).
7.5.2. ASSUMPTION AS TO BORROWER. Unless Administrative Agent has been
given written notice by Borrower prior to the date any payment to be
made by it is due, that it does not intend to remit such payment,
Administrative Agent may assume
22
that the Borrower has timely remitted such payment and Administrative
Agent may, in reliance upon such assumption, make available a
corresponding amount or pro-rata portion thereof to the Persons
entitled thereto. If such payment was not in fact remitted to the
Administrative Agent in immediately available funds, then, each Lender
shall immediately on demand repay to Administrative Agent the
corresponding amount or pro-rata portion thereof made available to
such Lender, together with interest thereon in respect of each day
from the date such amount was made available by Administrative Agent
to such Lender to the date such amount is repaid to Administrative
Agent, at the Federal Funds Rate.
7.6. DISBURSEMENT. Provided that all conditions precedent herein to a
requested Advance have been satisfied, Administrative Agent will make the
amount of such requested Advance available to Borrower on the applicable
Advance Date in immediately available funds in Dollars at Administrative
Agent's Applicable Lending Office.
7.7. RESTRICTIONS ON ADVANCES. No Advance will be made unless it is a whole
multiple of $1,000.00 and not less than $100,000.00 in the case of a
Eurodollar Advance, or a whole multiple of $1,000.00 and not less than
$50,000.00 in the case of a Base Rate Advance. No more than one Revolving
Loan Advance will be made on any one day pursuant to a request for a
Revolving Loan Advance. Advances will only be made for the purposes
permitted in Section 14.1. No Eurodollar Advance will be made so long as
there is any Existing Default.
7.8. RESTRICTION ON NUMBER OF EURODOLLAR LOANS. No more than five (5)
Eurodollar Loans with different Interest Periods may be outstanding at any
one time.
7.9. EACH ADVANCE REQUEST AND LETTER OF CREDIT REQUEST A CERTIFICATION.
Each submittal of a request for an Advance and each submittal of a request
for the issuance of a Letter of Credit by a Borrowing Officer shall
constitute a certification by Borrower that (i) there is no Existing
Default, (ii) all conditions precedent hereunder to the making of the
requested Advance or issuance of the requested Letter of Credit have been
satisfied, and (iii) the Representations and Warranties are then true in
all material respects, with such exceptions as have been disclosed to
Lenders in writing by Borrower or a Guarantor from time to time and are
satisfactory to Lenders, and will be true on the Advance Date or issuance
date, as applicable, as if then made with such exceptions.
7.10. REQUIREMENTS FOR EVERY ADVANCE REQUEST. Only a Loan Request
Certificate (which shall be in writing in the form attached hereto as
Exhibit 7.10 and mailed, personally delivered or telecopied as provided in
Section 21.1) from a Borrowing Officer to Administrative Agent that
23
specifies the amount of the Advance to be made, the Advance Date for the
requested Advance, the portion of the Advance which is requested to be a
Eurodollar Advance and the portion of the Advance which is requested to be
a Base Rate Advance, and the Interest Period to be applicable to the
Eurodollar Loan that will result from a requested Eurodollar Advance, shall
be treated as a request for an Advance. No Advance Date for any requested
Advance may be other than a Business Day. A request for a Eurodollar
Advance must be given prior to 11:00 a.m., Local Time, at least three (3)
Business Days prior to the Advance Date for such Eurodollar Advance. A
request for a Base Rate Advance must be given prior to 11:00 a.m., Local
Time, on the Advance Date for such Base Rate Advance.
7.11. REQUIREMENTS FOR EVERY LETTER OF CREDIT REQUEST. Only a written
request (which may be mailed, personally delivered or telecopied as
provided in Section 21.1) from a Borrowing Officer to Administrative Agent
or an electronic initiation over an online service provided by Letter of
Credit Issuer that specifies the amount, requested issue date (which shall
be a Business Day and in no event later than twenty-five days before the
Revolving Loan Maturity Date) and beneficiary of the requested Letter of
Credit and other information necessary for its issuance shall be treated as
a request for issuance of a Letter of Credit. The form of Letter of Credit
application submitted by Borrower shall be in the form required by the
Letter of Credit Agreement.
7.12. EXONERATION OF ADMINISTRATIVE AGENT AND LENDERS. Neither
Administrative Agent nor any Lender shall incur any liability to Borrower
for treating a request that meets the express requirements of Section 7.10
or Section 7.11 as a request for an Advance or issuance of a Letter of
Credit, as applicable, if Administrative Agent believes in good faith that
the Person making the request is a Borrowing Officer or if, in the case of
a request for a Letter of Credit, it is electronically initiated. Neither
Administrative Agent nor any Lender shall incur any liability to Borrower
for failing to treat any such request as a request for an Advance or
issuance of a Letter of Credit, as applicable, if Administrative Agent
believes in good faith that the Person making the request is not a
Borrowing Officer.
24
8. SECURITY AND GUARANTIES. As security for the payment and performance of the
Loan Obligations, and also as security for the payment and performance of all
Obligations to Administrative Agent, Borrower shall on the Execution Date
execute and deliver, or cause to be executed and delivered, to Administrative
Agent the following documents, each satisfactory to Lenders:
8.1. SECURITY AGREEMENTS. Security agreements granting to Administrative
Agent for the benefit of Lenders a first priority Security Interest under
the UCC in all of the Goods, Equipment, Accounts, Inventory, Instruments,
Documents, Chattel Paper, General Intangibles and other personal property
of each Covered Person and every Subsidiary of each Covered Person, whether
now owned or hereafter acquired, and all proceeds thereof, subject only to
Permitted Security Interests affecting such property.
8.2. PLEDGE AGREEMENTS. Stock pledge agreements and membership pledge
agreements granting to Administrative Agent for the benefit of Lenders a
first priority Security Interest in all of each Covered Person's interest
in the capital stock, membership interests, and other securities (and all
options and warrants therefor) of every Subsidiary of every Covered Person,
now or hereafter issued and outstanding, and all proceeds thereof.
8.3. COLLATERAL ASSIGNMENTS. The following collateral assignments from each
Covered Person, each subject to no other Security Interests except existing
Permitted Security Interests affecting the item assigned.
8.3.1. INTELLECTUAL PROPERTY ASSIGNMENTS. One or more assignments
assigning to Administrative Agent for the benefit of Lenders a
Security Interest in all the Intellectual Property of such Covered
Person described in Attachment 1 to the Disclosure Schedule.
8.3.2. ACQUISITION DOCUMENTS ASSIGNMENT. An assignment assigning to
Administrative Agent for the benefit of Lenders all of Borrower's
rights and interest under the Acquisition Documents for the Current
Acquisitions.
8.4. GUARANTIES. Unconditional guaranties of the Loan Obligations to
Administrative Agent for the benefit of Lenders of each Covered Person and
every Subsidiary of each Covered Person.
8.5. ADDITIONAL SUBSIDIARIES. As further security for the payment and
performance of the Loan Obligations, if any Subsidiary of any Covered
Person is acquired or organized after the Execution Date, Borrower shall
(i) execute and deliver or cause to be executed and delivered by the
applicable Covered Person, a pledge agreement granting to Administrative
Agent for the benefit of Lenders a first priority Security Interest in all
of such Covered Person's interest in the voting capital stock, securities,
membership interests or other equity interests, as applicable (and all
options and warrants therefor), of any such later acquired or organized
Subsidiary, now or hereafter issued and outstanding, and all proceeds
thereof and a security agreement granting to Administrative Agent for
25
the benefit of Lenders a first priority Security Interest under the UCC in
all of the Goods, Equipment, Accounts, Inventory, Instruments, Documents,
Chattel Paper, General Intangibles and other personal property of such
Covered Person, and (ii) cause to be executed and delivered to
Administrative Agent by every such later acquired or organized Subsidiary
of any Covered Person (which may only be acquired or organized if permitted
elsewhere in this Agreement) an unconditional guaranty of the Loan
Obligations or, at the option of Administrative Agent in Administrative
Agent's absolute discretion, a joinder agreement in which such Subsidiary
becomes a Borrower under this Agreement and assumes primary, joint and
several liability for the Loan Obligations, and a Security Agreement (as
described in Section 8.1) and other appropriate security documents, each in
form satisfactory to Lenders.
Administrative Agent may, either before or after an Event of Default, but
only with the consent or at the direction of Required Lenders, granted or
withheld in their absolute discretion, exchange, waive or release the
Security Interests in any of the Collateral or permit Borrower to
substitute any real or personal property for any of the Collateral without
affecting the Loan Obligations or Administrative Agent's right to take any
other action with respect to any other Collateral, provided, however, that
Administrative Agent may, in its absolute discretion and without the
consent of any Lender, do or permit Borrower to do any of the foregoing
with respect to Collateral or other property that has an aggregate fair
market value that does not exceed $100,000.00, or in the event that the
disposal of such Collateral is permitted under Section 15.9 or upon the
indefeasible payment in full of all of the Loan Obligations, the expiration
or termination of all Letters of Credit and reduction of the Letter of
Credit Exposure to zero, and the termination of the Commitments.
9. POWER OF ATTORNEY. Borrower hereby authorizes Administrative Agent and
irrevocably appoints Administrative Agent (acting by any of its officers) as
Borrower's agent and attorney-in-fact (which appointment is coupled with an
interest and is therefore irrevocable) to do any of the following until all of
the Loan Obligations are fully and indefeasibly paid and satisfied, there are no
Letters of Credit outstanding and the Letter of Credit Exposure is irreversibly
zero, and the Commitments are terminated:
9.1. At any time while there exists an Event of Default that has not been
cured or waived in writing by Lenders, (i) demand payment of any Account;
(ii) enforce payment of any Account by legal proceedings or otherwise;
(iii) exercise all of Borrower's rights
26
and remedies in proceedings brought to collect any Account; (iv) sell or
assign any Account upon such terms, for such amount and at such time or
times as Administrative Agent deems advisable; (v) settle, adjust,
compromise, extend or renew any Account; (vi) discharge and release any
Account; (vii) prepare, file and sign Borrower's name on any proof of claim
in bankruptcy or other similar documents against an Account Debtor; (viii)
notify the postal authorities of any change of the address for delivery of
Borrower's mail to any address designated by Administrative Agent, and open
and process all mail addressed to Borrower; (ix) endorse Borrower's name on
any verification of Accounts and notices thereof to Account Debtors; (x)
make one or more Revolving Loan Advances to pay the costs and expenses of
any of the foregoing; (xi) take control in any manner of any item of
payment or proceeds of any Account; (xii) have access to any lockbox or
postal box into which Borrower's mail is deposited; (xiii) endorse
Borrower's name upon any items of payment and cash or deposit same and
apply the proceeds thereof to the Loan Obligations as provided herein;
(xiv) endorse Borrower's name upon any chattel paper, document, instrument,
invoice, or similar document or agreement relating to any Account or other
item of the Collateral; and (xv) do anything that Administrative Agent
deems necessary in its reasonable discretion to assure that the Loan
Obligations are fully and indefeasibly paid and satisfied.
9.2. At any time, file and/or execute in Borrower's name and on Borrower's
behalf any financing statement or amendments thereto deemed necessary or
appropriate by Administrative Agent to assure the perfection or continued
perfection of Administrative Agent's Security Interests in the Collateral
for the benefit of Lenders and the filing or execution of any such
financing statement or amendments is hereby ratified and confirmed.
The foregoing power of attorney and authorization shall be deemed
automatically revoked upon the indefeasible payment in full of all of the
Loan Obligations, the expiration or termination of all Letters of Credit
and reduction of the Letter of Credit Exposure to zero, and the termination
of the Commitments.
10. CONDITIONS OF LENDING.
10.1. CONDITIONS TO INITIAL ADVANCE. Lenders will have no obligation to
fund the Term Loan Advance or the initial Revolving Loan Advance or any
subsequent Revolving Loan Advance unless:
10.1.1. LISTED DOCUMENTS AND OTHER ITEMS. Administrative Agent shall
have received on or before the Effective Date all of the documents and
other items listed or described in Exhibit 10.1.1 hereto as being
conditions to the initial Advances as being delivered or executed on
or before the Execution Date, with each being satisfactory to Lenders
and (as applicable) duly executed and (also as applicable) sealed,
attested, acknowledged, certified, or authenticated.
10.1.2. FINANCIAL CONDITION. Lenders shall have determined to their
satisfaction that the financial statements of Borrower for the fiscal
year ended 3/31/01 and the
27
fiscal quarter ended 12/31/01 and the proforma financial statements of
Borrower for the period ending as of the Effective Date (after giving
effect to the Current Acquisitions and the consummation of the
transactions contemplated hereby, the funding of the Term Loan and the
initial Revolving Loan Advances, and the payment of all fees and
expenses hereunder), and the periods ending 3/31/02, 3/31/03, 3/31/04
and 3/31/05 as furnished to Administrative Agent, and other
information furnished to Administrative Agent by Borrower (i) for the
periods ended on or before the Effective Date, fairly and accurately
reflect the business and financial condition of Borrower, its cash
flows and the results of its operations for such periods, (ii) for the
periods that will end after the Effective Date, fairly and accurately
forecast the business and financial condition of Borrower, its cash
flows, and the results of its operations for such periods, (iii) are
consistent in all material respects with the sources and uses of cash
for the Current Acquisitions previously provided to Administrative
Agent and with the forecasts previously delivered to Administrative
Agent, and (iv) with respect to Borrower's proforma financial
statements, the ratio of Total Indebtedness to EBITDA as set forth
therein does not exceed 1.5 to 1 on a proforma basis as of the
Effective Date.
10.1.3. NO DEFAULT. There shall be no Existing Default and no Default
or Event of Default will occur as a result of such Advance being
requested or made or the application of the proceeds thereof.
10.1.4. PERFECTION OF SECURITY INTERESTS. Every Security Interest
required to be granted by Borrower to Administrative Agent under
Section 8 shall have been perfected and shall be, except as otherwise
satisfactory to Lenders, a first priority Security Interest.
10.1.5. REPRESENTATIONS AND WARRANTIES. The Representations and
Warranties shall be true and correct.
10.1.6. NO MATERIAL ADVERSE CHANGE. Since the date of the Initial
Financial Statements delivered to Administrative Agent, there shall
not have been any change which has or is reasonably likely to have a
Material Adverse Effect on any Covered Person.
10.1.7. PENDING MATERIAL PROCEEDINGS. There shall be no pending
Material Proceedings other than as disclosed in Section 12.8 of the
Disclosure Schedule.
10.1.8. PAYMENT OF FEES AND EXPENSES. Borrower shall have paid and
reimbursed to Lenders all fees, costs and expenses (including, without
limitation, the attorneys' fees of all Lenders).
28
10.1.9. CURRENT ACQUISITIONS. All documents to be executed and
delivered in connection with the Current Acquisitions shall have been
delivered to Administrative Agent in final form; Administrative Agent
shall be satisfied that all requirements to close the Current
Acquisitions have been completed or waived by the parties to the
Acquisition Documents except for the delivery of the purchase price
with respect to both of the Current Acquisitions; Borrower shall have
contributed $90,000,000.00 of its own cash to the Closing of the
Current Acquisitions; and Borrower shall have drawn on the Term Loan
Advance and delivered the purchase price for the Current Acquisitions
no later than thirty (30) days after the Effective Date.
10.1.10. INITIAL NET WORTH. Borrower shall have a Net Worth of at
least $110,000,000.00 on a consolidated basis after giving effect to
the Current Acquisitions and the transactions contemplated hereby, and
the funding of the Term Loan and the initial Revolving Loan Advances
and the payment of all fees and expenses hereunder.
10.1.11. INSURANCE. Administrative Agent shall be satisfied with the
insurance maintained by Borrower (including the insurance carrier, the
types of insurance maintained, and the levels of insurance
maintained).
10.1.12. ENVIRONMENTAL. Administrative Agent shall be satisfied with
the results of the environmental due diligence it has conducted, if
any, with respect to any real property owned and/or leased by
Borrower, including without limitation the Phase I Environmental
Reports, if any, ordered by or on behalf of Administrative Agent.
10.1.13. OTHER ITEMS. Administrative Agent shall have received such
other consents, approvals, opinions, certificates, documents or
information as it reasonably deems necessary.
10.2. CONDITIONS TO SUBSEQUENT ADVANCES. Lenders will have no obligation to
fund any Advance after the Term Loan Advance and the initial Revolving Loan
Advance unless:
10.2.1. GENERAL CONDITIONS. All of the conditions to the initial
Advances in Section 10.1 (except the condition in Section 10.1.5)
shall have been and shall remain satisfied.
10.2.2. REPRESENTATIONS AND WARRANTIES. The Representations and
Warranties are then true, with such exceptions as have been disclosed
to Lenders in writing by Borrower or any Guarantor from time to time
and are satisfactory to Lenders,
29
and will be true as of the time of such Advance, as if then made with
such exceptions.
10.2.3. NO DEFAULT. There shall be no Existing Default and no Default
or Event of Default will occur as a result of such Advance being
requested or made or the application of the proceeds thereof.
11. CONDITIONS TO ISSUANCE OF LETTERS OF CREDIT. As conditions precedent to the
issuance of any Letter of Credit:
11.1. LETTER OF CREDIT APPLICATION/REIMBURSEMENT AGREEMENT. Borrower shall
have executed and delivered to Letter of Credit Issuer the Letter of Credit
Issuer's Master Letter of Credit Agreement in the form attached hereto as
Exhibit 11.1 under which Borrower further evidences its obligation to
reimburse to Letter of Credit Issuer on demand the amount of each draw on
such Letter of Credit as provided in Section 6.4, together with interest
from the date of the draw at the rate provided in Section 4.1 and (without
duplication) all reasonable expenses incurred by Letter of Credit Issuer in
connection with such Letter of Credit.
11.2. NO PROHIBITIONS. No order, judgment or decree of any Governmental
Authority shall exist which purports by its terms to enjoin or restrain
Letter of Credit Issuer or any other Lender from issuing such Letter of
Credit, and no Law or request or directive (whether or not having the force
of law) from any Governmental Authority
30
with jurisdiction over Letter of Credit Issuer or any other Lender shall
exist which prohibits, or requests that Letter of Credit Issuer or any
other Lender refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular, or imposes upon Letter of Credit
Issuer or any other Lender with respect to such Letter of Credit any
restriction or reserve or capital requirement (for which Letter of Credit
Issuer or any other Lender is not otherwise compensable by Borrower
hereunder).
11.3. REPRESENTATIONS AND WARRANTIES. The Representations and Warranties
are then true, with such exceptions as have been disclosed to Lenders in
writing by Borrower or such Guarantor from time to time and are
satisfactory to Lenders, and will be true as of the time of the issuance of
such Letter of Credit, as if then made with such exceptions.
11.4. NO DEFAULT. There shall be no Existing Default and no Default or
Event of Default is reasonably likely to occur as a result of such Letter
of Credit being issued or a draw thereon being made or paid.
11.5. OTHER CONDITIONS. All of the conditions to the initial Advances in
Section 10.1 (except the condition in Section 10.1.5) shall have been and
shall remain satisfied.
12. REPRESENTATIONS AND WARRANTIES. Except as otherwise described in the
Disclosure Schedule attached hereto as Exhibit 12, Borrower represents and
warrants to Administrative Agent, Lenders, and Letter of Credit Issuer, on its
behalf and on behalf of each Covered Person, as follows (provided, however, that
to the extent such representations and warranties apply to the entity and assets
acquired pursuant to the Current Acquisitions, such representations and
warranties shall be to the best of Borrower's knowledge) and Borrower covenants
that Borrower shall undertake its best efforts to obtain the consents of all
third parties to all material contracts and leases set forth on the Disclosure
Schedule as soon as reasonably practicable.
12.1. ORGANIZATION AND EXISTENCE. Each Covered Person is duly organized and
existing in good standing under the Laws of the state of its organization,
is duly qualified to do business and is in good standing in every state
where the nature or extent of its business or properties require it to be
qualified to do business, except where the failure to so qualify is not
reasonably likely to have a Material Adverse Effect on any Covered Person.
Each Covered Person has the power and authority to own its properties and
carry on its business as now being conducted.
12.2. AUTHORIZATION. Each Covered Person is duly authorized to execute and
perform every Loan Document to which such Covered Person is a party, and
Borrower is duly authorized to borrow hereunder, and this Agreement and the
other Loan Documents have been duly authorized by all requisite corporate,
partnership or membership action (in the case of limited liability
companies) of each Covered Person. No consent, approval or authorization
of, or declaration or filing with, any Governmental Authority, and no
31
consent of any other Person, is required in connection with Borrower's
execution, delivery or performance of this Agreement and the other Loan
Documents, except for those already duly obtained.
12.3. DUE EXECUTION. Every Loan Document to which a Covered Person is a
party has been executed on behalf of such Covered Person by a Person duly
authorized to do so.
12.4. ENFORCEABILITY OF OBLIGATIONS. Each of the Loan Documents to which a
Covered Person is a party constitutes the legal, valid and binding
obligation of such Covered Person, enforceable against such Covered Person
in accordance with its terms, except to the extent that the enforceability
thereof against such Covered Person may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting creditors'
rights generally or by equitable principles of general application.
12.5. BURDENSOME OBLIGATIONS. No Covered Person is a party to or bound by
any Contract or is subject to any provision in the Charter Documents of
such Covered Person which would, if performed by such Covered Person,
result in a Default or Event of Default either immediately or upon the
elapsing of time.
12.6. LEGAL RESTRAINTS. The execution and performance of any Loan Document
by a Covered Person will not violate or constitute a default under the
Charter Documents of such Covered Person, any Material Agreement of such
Covered Person, or any Material Law, and will not, except as expressly
contemplated or permitted in this Agreement, result in any Security
Interest being imposed on any of such Covered Person's property.
12.7. LABOR CONTRACTS AND DISPUTES. There is no collective bargaining
agreement or other labor contract covering employees of a Covered Person.
No union or other labor organization is seeking to organize, or to be
recognized as, a collective bargaining unit of employees of a Covered
Person. There is no pending or, to Borrower's knowledge, threatened,
strike, work stoppage, material unfair labor practice claim or other
material labor dispute against or affecting any Covered Person or its
employees.
12.8. NO MATERIAL PROCEEDINGS. There are no Material Proceedings pending
or, to the best knowledge of Borrower, threatened, against any Covered
Person, except as set forth in Section 12.8 of the Disclosure Schedule.
12.9. MATERIAL LICENSES. All Material Licenses have been obtained or exist
for each Covered Person.
12.10. COMPLIANCE WITH MATERIAL LAWS. Each Covered Person is in compliance
in all material respects with all Material Laws. Without limiting the
generality of the foregoing:
12.10.1. GENERAL COMPLIANCE WITH ENVIRONMENTAL LAWS AND EMPLOYMENT
LAWS. The operations and employee compensation practices of every
Covered Person comply in all material respects with all applicable
Environmental Laws and Employment Laws which are Material Laws.
32
12.10.2. PROCEEDINGS. None of the operations of any Covered Person are
the subject of any judicial or administrative complaint, order or
proceeding alleging the violation of any applicable Environmental Laws
or Employment Laws which are Material Laws.
12.10.3. INVESTIGATIONS REGARDING HAZARDOUS MATERIALS. None of the
operations of any Covered Person are, or in the past six years have
been, the subject of investigation by any Governmental Authority
regarding the improper transportation, storage, disposal, generation
or release into the environment of any Hazardous Material, the results
of which have or are reasonably likely to have a Material Adverse
Effect on such Covered Person, or reduce materially the value of the
Collateral.
12.10.4. NOTICES AND REPORTS REGARDING HAZARDOUS MATERIALS. No notice
or report under any Environmental Law indicating a past or present
spill or release into the environment of any Hazardous Material has
been filed within the six years ending on the Execution Date, or is
required to be filed, by any Covered Person.
12.10.5. ENVIRONMENTAL PROPERTY TRANSFER ACTS. No Environmental
Property Transfer Acts are applicable to the transactions contemplated
by this Agreement or the Acquisition Documents and each Covered Person
has provided all notices and obtained all necessary environmental
permit transfers and consents, if any, required in order to consummate
the transactions contemplated by this Agreement or the Acquisition
Documents, to perfect Administrative Agent's Security Interests for
the benefit of Lenders and to operate such Covered Person's business
as presently or proposed to be operated.
12.11. OTHER NAMES. No Covered Person has used any name other than the full
name which identifies such Covered Person in this Agreement. The only trade
name or style under which a Covered Person sells Inventory or creates
Accounts, or to which instruments in payment of Accounts are made payable,
is the name which identifies such Covered Person in this Agreement.
12.12. CONSUMMATION OF CURRENT ACQUISITION. Borrower has delivered to
Administrative Agent complete and correct executed copies of the
Acquisition Documents for the Current Acquisitions. Such Acquisition
Documents have been duly authorized and executed and are the valid and
binding obligation of Borrower and, to Borrower's knowledge, the other
parties thereto and are enforceable in accordance with their terms except
to the extent that the enforceability thereof against such Covered Person
may be limited by bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' rights generally or by equitable
principles of general application. All Covered Persons, and to the best of
Borrower's knowledge, all other parties to such Acquisition Documents, have
to date performed all obligations, covenants, and conditions required of it
prior to or as a condition to the consummation of the transactions
33
contemplated by such Acquisition Documents to which it is a party other
than any such obligation, covenant, or condition that has been waived.
Borrower is not in default of any of its obligations under the Acquisition
Documents, and all representations and warranties of Borrower in such
Acquisition Documents are complete and correct in all material respects as
of the Effective Date as if made on and as of such date. To the knowledge
of Borrower after due inquiry, all of the representations and warranties of
the Sellers contained in the Acquisition Documents or any instrument
furnished in connection therewith or in reference thereto are true and
correct in all material respects as of the Effective Date as if made on and
as of such date.
12.13. PRIOR TRANSACTIONS. Within the past five (5) years, no Covered
Person has been a party to any merger or consolidation, or acquired all or
substantially all of the assets of any Person.
12.14. CAPITALIZATION. Borrower's authorized capital stock, and issued and
outstanding capital stock, are as described in section 12.14 of the
Disclosure Schedule, and all issued and outstanding shares of Borrower are
validly issued and outstanding, fully paid and non-assessable.
12.15. SOLVENCY. Borrower is Solvent prior to and after giving effect to,
the transactions contemplated by the Acquisition Documents for the Current
Acquisitions, and the making of the Term Loan and initial Revolving Loan
Advance on the Effective Date.
12.16. PROJECTIONS; PRO FORMA BALANCE SHEET. The projections of Borrower's
annual financial condition, results of operations, and cash flow for the
period ending as of the Effective Date and for the periods ending 3/31/02,
3/31/03, 3/31/04, and 3/31/05, a copy of which have been delivered to
Administrative Agent, represent Borrower's good faith best estimate of
Borrower's future financial performance for the periods set forth therein.
Such projections have been prepared on the basis of the assumptions set
forth therein, which Borrower believes are fair and reasonable in light of
current and reasonably foreseeable business conditions. The pro forma
balance sheet of Borrower as of the Effective Date, a copy of which has
been provided by Borrower to Administrative Agent, has been prepared in
accordance with GAAP exclusive of footnotes and normal year end adjustments
and presents fairly and accurately Borrower's financial condition as of the
Effective Date as if the transactions contemplated by the Acquisition
Documents for the Current Acquisitions had occurred on the Effective Date.
12.17. FINANCIAL STATEMENTS. The Financial Statements are complete and
correct in all material respects, have been prepared in accordance with
GAAP, and fairly reflect the financial condition, results of operations and
cash flows of the Persons covered thereby as of the dates and for the
periods stated therein, subject in the case of interim Financial Statements
to the absence of footnotes and normal year-end adjustments made in
accordance with GAAP.
34
12.18. NO CHANGE IN CONDITION. Since the date of the Financial Statements
delivered to Administrative Agent as required herein, there has been no
change which has or is reasonably likely to have a Material Adverse Effect
on any Covered Person.
12.19. NO DEFAULTS. Intentionally Deleted.
12.20. INVESTMENTS. No Covered Person has any Investments in other Persons
except existing Permitted Investments.
12.21. INDEBTEDNESS. No Covered Person has any Indebtedness except existing
Permitted Indebtedness.
12.22. INDIRECT OBLIGATIONS. No Covered Person has any Indirect Obligations
except existing Permitted Indirect Obligations.
12.23. OPERATING LEASES. As of the Effective Date, no Covered Person has an
interest as lessee under any Operating Leases other than (a) leases of
non-material items office equipment; and (b) short-term leases for office
space, none of which is material to the business of any Covered Person
except as set forth in Section 12.23 of this Disclosure Schedule.
12.24. CAPITAL LEASES. No Covered Person has an interest as a lessee under
any Capital Leases other than Capital Leases that are Permitted
Indebtedness.
12.25. TAX LIABILITIES; GOVERNMENTAL CHARGES. Each Covered Person has filed
or caused to be filed all tax reports and returns required to be filed by
it with any Governmental Authority, except where extensions have been
properly obtained. Each Covered Person has paid or made adequate provision
for payment of all Taxes of such Covered Person, except Taxes which are
being diligently contested in good faith by appropriate proceedings and as
to which such Covered Person has established adequate reserves in
conformity with GAAP. No Security Interest for any such Taxes has been
filed and no claims are being asserted with respect to any such Taxes
which, if adversely determined, has or is reasonably likely to have a
Material Adverse Effect on such Covered Person. There are no material
unresolved issues concerning any liability of a Covered Person for any
Taxes which, if adversely determined, will have or is reasonably likely to
have a Material Adverse Effect on such Covered Person.
35
12.26. PENSION BENEFIT PLANS. All Pension Benefit Plans maintained by each
Covered Person or an ERISA Affiliate of such Covered Person qualify under
Section 401 of the Code and are in compliance with the provisions of ERISA
and all other Material Laws. Except with respect to events or occurrences
which do not have and are not reasonably likely to have a Material Adverse
Effect on any Covered Person:
12.26.1. PROHIBITED TRANSACTIONS. None of such Pension Benefit Plans
has participated in, engaged in or been a party to any non-exempt
PROHIBITED TRANSACTION as defined in ERISA or the Code, and no
officer, director or employee of such Covered Person or of an ERISA
Affiliate of such Covered Person has committed a breach of any of the
responsibilities or obligations imposed upon fiduciaries by Title I of
ERISA.
12.26.2. CLAIMS. There are no claims, pending or threatened, involving
any such Pension Benefit Plan by a current or former employee (or
beneficiary thereof) of such Covered Person or ERISA Affiliate of such
Covered Person, nor is there any reasonable basis to anticipate any
claims involving any such Pension Benefit Plan which would likely be
successfully maintained against such Covered Person or such ERISA
Affiliate.
12.26.3. REPORTING AND DISCLOSURE REQUIREMENTS. There are no
violations of any reporting or disclosure requirements with respect to
any such Pension Benefit Plan and none of such Pension Benefit Plans
has violated any applicable Law, including ERISA and the Code.
12.26.4. ACCUMULATED FUNDING DEFICIENCY. No such Pension Benefit Plan
has (i) incurred an accumulated funding deficiency (within the meaning
of Section 412(a) of the Code), whether or not waived; (ii) been a
Pension Benefit Plan with respect to which a Reportable Event (to the
extent that the reporting of such events to the PBGC within thirty
days of the occurrence has not been waived) has occurred and is
continuing; or (iii) been a Pension Benefit Plan with respect to which
there exist conditions or events which have occurred that present a
significant risk of termination of such Pension Benefit Plan by the
PBGC.
12.26.5. MULTI-EMPLOYER PLAN. All Multi-employer Plans to which any
Covered Person contributes or is obligated to contribute are listed in
section 12.26.5 of the Disclosure Schedule. No Covered Person or ERISA
Affiliate of such Covered Person has received notice that any such
Multi-employer Plan is in reorganization or has been terminated within
the meaning of Title IV of ERISA, and no such Multi-employer Plan is
reasonably expected to be in reorganization or to be terminated within
the meaning of Title IV of ERISA.
12.27. WELFARE BENEFIT PLANS. No Covered Person or ERISA Affiliate of any
Covered Person maintains a Welfare Benefit Plan that has a liability which,
if enforced or
36
collected, has or is reasonably likely to have a Material Adverse Effect on
any Covered Person. Each Covered Person and each ERISA Affiliate of any
Covered Person has complied in all material respects with the applicable
requirements of Section 4980B of the Code pertaining to continuation
coverage as mandated by COBRA.
12.28. RETIREE BENEFITS. No Covered Person or ERISA Affiliate of such
Covered Person has an obligation to provide any Person with any medical,
life insurance, or similar benefit following such Person's retirement or
termination of employment (or to such Person's beneficiary subsequent to
such Person's death) other than (i) such benefits provided to Persons at
such Person's sole expense and (ii) obligations under COBRA.
12.29. DISTRIBUTIONS. No Distribution other than as allowed in Section
15.10 has been declared, paid or made upon or in respect of any capital
stock of Borrower on and after the Execution Date, except as expressly
permitted hereby.
12.30. REAL PROPERTY. No Covered Person owns any real property.
12.31. STATE OF COLLATERAL AND OTHER PROPERTY. Each Covered Person has good
and marketable or merchantable title to all real and personal property
purported to be owned by it or reflected in the Initial Financial
Statements, except for personal property sold in the ordinary course of
business or otherwise in accordance with the terms of Section 15.9 of this
Agreement after the date of the Initial Financial Statements. There are no
Security Interests on any of the property purported to be owned by any
Covered Person, including the Collateral, except existing Permitted
Security Interests. In addition to the foregoing, and not in limitation
thereof, no Security Interest has been granted in any Account with respect
to which the Account Debtor is the United States or any department, agency,
public corporation or other instrumentality thereof. Each material tangible
item of Personal Property Collateral purported to be owned by a Covered
Person is in generally good operating condition and repair and is suitable
for the use to which it is customarily put by its owner. Without limiting
the generality of the foregoing:
37
12.31.1. ACCOUNTS. With respect to each Account scheduled, listed or
referred to in reports submitted by any Covered Person to
Administrative Agent pursuant to the Loan Documents, except as
disclosed therein: (i) the Account arose from a bona fide transaction
completed in all material respects in accordance with the terms of any
documents pertaining to such transaction; (ii) the Account is not
evidenced by a judgment and there is no material dispute respecting
it; (iii) the amount of the Account as shown on the applicable Covered
Person's books and records and all invoices and statements which may
be delivered to Administrative Agent with respect thereto are actually
and absolutely owing to the applicable Covered Person and are not in
any way contingent; (iv) there are no material setoffs, counterclaims
or disputes existing or asserted with respect to the Account and the
applicable Covered Person has not made any agreement with any Account
Debtor for any deduction therefrom except a discount or allowance
allowed by the applicable Covered Person in the ordinary course of its
business for prompt payment; (v) Borrower has no knowledge of any
material facts, events or occurrences which in any way impair the
validity or enforcement of the Account or tend to reduce the amount
payable thereunder as shown on the applicable Covered Person's books
and records and all invoices and statements delivered to
Administrative Agent with respect thereto; (vi) the Account is
assignable; (vii) the Account arose in the ordinary course of the
applicable Covered Person's business; (viii) to such Covered Person's
best knowledge, the Account Debtor with respect to the Account has the
capacity to contract; (ix) the services furnished and/or goods sold
giving rise to the Account were not, at the time furnished or sold,
subject to any Security Interest except the first priority, perfected
Security Interest granted to Administrative Agent for the benefit of
Lenders and except the Permitted Security Interests; and (x) to such
Covered Person's best knowledge, there are no material proceedings or
actions which are threatened or pending against the Account Debtor
with respect to the Account.
12.31.2. INVENTORY. With respect to Inventory scheduled, listed or
referred to in any certificate, schedule, list or report given by any
Covered Person, except as disclosed therein: (i) such Inventory
(except for Inventory in transit) is located at one or another of the
premises listed in section 12.31.2 of the Disclosure Schedule; (ii)
the applicable Covered Person has good and merchantable title to such
Inventory subject to no Security Interest whatsoever except for the
first priority, perfected Security Interest granted to Administrative
Agent for the benefit of Lenders and except for existing Permitted
Security Interests; (iii) such Inventory is of generally good and
merchantable quality, free from any material defects; (iv) such
Inventory is not subject to any licensing, patent, royalty, trademark,
trade name or copyright agreements with any third parties; and (v) the
completion of manufacture and sale or other disposition of such
Inventory by Administrative Agent or Lenders following an Event of
Default shall not require the consent of any Person and shall not
constitute a breach or default under any
38
contract or agreement to which any Covered Person is a party or to
which the Inventory is subject.
12.31.3. EQUIPMENT. With respect to each Covered Person's owned
equipment: (i) such Covered Person has good and marketable title
thereto; (ii) none of such equipment is subject to any Security
Interests except for the first priority, perfected Security Interest
granted to Administrative Agent for the benefit of Lenders pursuant
hereto and except for Permitted Security Interests; and (iii) all such
equipment is generally in good operating condition and repair,
ordinary wear and tear alone excepted, and is suitable for the uses to
which customarily put in the conduct of such Covered Person's
business.
12.31.4. INTELLECTUAL PROPERTY. With respect to the Intellectual
Property of the Covered Persons: (i) section 12.31.4 of the Disclosure
Schedule contains a complete and correct list of all of each Covered
Person's registered Intellectual Property, (ii) the Covered Person
listed on the Disclosure Schedule as the owner thereof owns all right,
title and interest in, under and to such Intellectual Property,
subject to no licenses or any interest therein or other agreements
relating thereto, except for the Intellectual Property Assignments;
(iii) none of such Intellectual Property is subject to any pending or,
to such Covered Person's knowledge, threatened challenge; (iv) to the
knowledge of such Covered Person, such Covered Person has not
committed any patent, trademark, trade name, service xxxx or copyright
infringement, and the present conduct of such Covered Person's
business does not infringe any patents, trademarks, trade name rights,
service marks, copyrights, publication rights, trade secrets or other
proprietary rights of any Person; and (v) there are no claims or
demands of any Person pertaining to, or any proceedings which are
pending or, to the knowledge of such Covered Person, threatened, which
challenge such Covered Person's rights in respect of any proprietary
or confidential information or trade secrets used in the conduct of
such Covered Person's business.
12.31.5. DOCUMENTS, INSTRUMENTS AND CHATTEL PAPER. All documents,
instruments and chattel paper describing, evidencing or constituting
Collateral, and all signatures and endorsements of all Covered Persons
thereon, are complete, valid, and genuine, and to the best of
Borrower's knowledge, all signatures and endorsements of all parties
other than Covered Persons are complete, valid and genuine. All goods
evidenced by such documents, instruments and chattel paper are owned
by a Covered Person free and clear of all Security Interests other
than Permitted Security Interests.
12.32. CHIEF PLACE OF BUSINESS; LOCATIONS OF COLLATERAL. As of the
Execution Date,
12.32.1. The only chief executive office and the principal places of
business of each Covered Person are located at the places listed and
so identified in section 12.32.1 of the Disclosure Schedule and the
state of incorporation or
39
organization for each Covered Person is as identified in section
12.32.1 of the Disclosure Schedule;
12.32.2. the books and records of each Covered Person, and all of such
Covered Person's chattel paper and all records of Accounts, are
located only at the places listed and so identified in section 12.32.2
of the Disclosure Schedule; and
12.32.3. all of the tangible Collateral (except for Inventory which is
in transit) is located only at the places listed and so identified in
section 12.32.3 of the Disclosure Schedule; no Covered Person has an
office or place of business other than as identified in section
12.32.3 of the Disclosure Schedule.
12.33. NEGATIVE PLEDGES. No Covered Person is a party to or bound by any
material Contract which prohibits the creation or existence of any Security
Interest upon or assignment or conveyance of any of the Collateral. In
addition to the foregoing and not in limitation thereof, no Covered Person
is party to or bound by any Contract with the United States or any other
department, agency, public corporation, or other instrumentality thereof
which prohibits the creation or existence of any Security Interest upon or
assignment or conveyance of any of the Collateral.
12.34. SECURITY DOCUMENTS.
12.34.1. SECURITY AGREEMENTS. Each Security Agreement is effective to
grant to Administrative Agent for the benefit of Lenders an
enforceable Security Interest in the Personal Property Collateral
described therein. Upon appropriate filing (as to all Personal
Property Collateral in which a Security Interest may be perfected
under the applicable state's UCC by filing a financing statement) or
Administrative Agent's taking possession (as to items of the Personal
Property Collateral of which a secured party must take possession in
order to perfect a Security Interest under the applicable state's UCC)
or Administrative Agent's, taking control (as to items of the Personal
Property Collateral of which a secured party must take control in
order to perfect a security interest under the applicable state's
UCC), Administrative Agent will have a fully perfected first priority
Security Interest in the Personal Property Collateral described in
each Security Agreement, subject only to Permitted Security Interests
affecting such Personal Property Collateral.
12.34.2. COLLATERAL ASSIGNMENTS.
12.34.2.1. INTELLECTUAL PROPERTY ASSIGNMENTS. Each
Intellectual Property Assignment is effective to grant to
Administrative Agent for the benefit of Lenders an
enforceable first priority security interest in all the
Intellectual Property described therein, subject only to
Permitted Security Interests affecting such Intellectual
Property. Upon appropriate filing in the United States Patent
and Trademark Offices and the United States Copyright Office,
as well as the appropriate filing of a financing
40
statement, Administrative Agent's Security Interest in the
Intellectual Property will be fully perfected.
12.34.2.2. PLEDGE AGREEMENT. Each Pledge Agreement is
effective to grant to Administrative Agent for the benefit of
Lenders an enforceable first priority Security Interest in
all the stock, membership interests, and other securities
described therein.
12.34.2.3. ACQUISITION DOCUMENTS ASSIGNMENT. The Acquisition
Documents Assignment is effective to grant to Administrative
Agent for the benefit of Lenders an enforceable first
priority Security Interest in and lien on all of Borrower's
rights, remedies, claims and interests under the Acquisition
Documents covered thereby.
12.35. S CORPORATION. As of the Effective Date and thereafter, there is no
election in effect under Section 1362(a) of the Code for any Covered Person
to be treated as an S Corporation as defined in Section 1361 (a) of the
Code.
12.36. SUBSIDIARIES AND AFFILIATES. Borrower has no Subsidiaries, except
for those Subsidiaries listed in section 12.36 of the Disclosure Schedule.
12.37. BANK ACCOUNTS AND LOCKBOXES. All bank accounts maintained by any
Covered Person with any bank or other financial institution are described
in section 12.37 of the Disclosure Schedule.
12.38. MARGIN STOCK. No Covered Person is engaged or will engage,
principally or as one of its important activities, in the business of
extending credit for the purpose of PURCHASING or CARRYING MARGIN STOCK
(within the meaning of Regulation U), and no part of the proceeds of any
Advance will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying any such
margin stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation U. None of the transactions
contemplated by any of the Acquisition Documents will violate Regulations
T, U or X of the FRB.
12.39. SECURITIES MATTERS. No proceeds of any Advance will be used to
acquire any security in any transaction which is subject to Sections 13 and
14 of the Securities Exchange Act of 1934.
12.40. INVESTMENT COMPANY ACT, ETC. No Covered Person is an investment
company registered or required to be registered under the Investment
Company Act of 1940, or a company CONTROLLED (within the meaning of such
Investment Company Act) by such an INVESTMENT COMPANY or an AFFILIATED
PERSON of, or PROMOTER or PRINCIPAL UNDERWRITER for, an INVESTMENT COMPANY,
as such terms are defined in the Investment Company Act of 1940. No Covered
Person is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce
41
Act or any other Law limiting or regulating its ability to incur
Indebtedness for money borrowed.
12.41. NO MATERIAL MISSTATEMENTS OR OMISSIONS. Neither the Loan Documents,
any of the Financial Statements nor any statement, list, certificate or
other information furnished or to be furnished by Borrower or any other
Covered Person to Administrative Agent or Lenders in connection with the
Loan Documents or any of the transactions contemplated thereby contains any
untrue statement of a material fact, or omits to state a material fact
necessary to make the statements therein not materially misleading.
Borrower has disclosed to Administrative Agent and Lenders everything of
which Borrower has knowledge regarding the business, operations, property,
financial condition, or business prospects or itself and every Covered
Person that has or is reasonably likely to have a Material Adverse Effect
on any Covered Person.
12.42. FILINGS. All registration statements, reports, proxy statements and
other documents, if any, required to be filed by any Covered Person with
the Securities and Exchange Commission pursuant to the Securities Act of
1933, and the Securities Exchange Act of 1934, have been filed, and such
filings are complete and accurate in all material respects and contain no
untrue statements of material fact or omit to state any material facts
required to be stated therein or necessary in order to make the statements
therein not misleading, and all capital stock of any covered Person that is
issued and outstanding has been sold pursuant to transactions that are
registered under the Securities Act of 1933 or that are exempt thereunder.
12.43. BROKER'S FEES. No broker or finder is entitled to compensation for
services rendered with respect to the transactions contemplated by this
Agreement or the Acquisition Documents.
12.44. NO XXXX-XXXXX XXXXXX FILING REQUIRED. None of the Covered Persons,
any Guarantor, or Seller was required to file notification under the
Xxxx-Xxxxx Xxxxxx Antitrust Improvement Act of 1976, or to notify or obtain
the approval of any Governmental Authority in connection with the Current
Acquisitions or any other Permitted Acquisition, unless such notification
was filed or such approval was obtained, as the case may be.
13. MODIFICATION AND SURVIVAL OF REPRESENTATIONS. Borrower may at any time after
the initial Advances are made propose to Lenders in writing to modify the
representations and warranties in Section 12, the representations and warranties
in any other Loan Document and any other representation or warranty made in any
certificate, report, opinion or other document delivered by Borrower pursuant to
the Loan Documents. If the proposed modifications are satisfactory to Required
Lenders as evidenced by their written assent thereto, then such representations
and warranties shall be deemed and treated as so modified, but only as of the
date of Borrower's written modification proposal.
42
If such proposed modifications are not satisfactory to Required Lenders, then
such proposed modifications shall not be deemed or treated as modifying such
representations and warranties. All such representations and warranties, as made
or deemed made as of a particular time, shall survive execution of each of the
Loan Documents and the making of every Advance, and may be relied upon by
Administrative Agent and Lenders as being true and correct in all material
respects as of the date when made or deemed made until all of the Loan
Obligations are fully and indefeasibly paid, no Letters of Credit are
outstanding and the Letter of Credit Exposure is irreversibly zero.
14. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that, while any of the
Commitments remains in effect and until all of the Loan Obligations are fully
and indefeasibly paid, no Letters of Credit are outstanding and the Letter of
Credit Exposure is irreversibly zero, Borrower shall do, or cause to be done,
the following:
14.1. USE OF PROCEEDS. Subject to the terms and conditions hereof, the
proceeds of the Term Loan Advance shall be used solely to pay a portion of
the purchase price for the Current Acquisitions. The proceeds of Revolving
Loan Advances shall be used solely for working capital, capital
expenditures permitted hereunder, as the source for payment of Borrower's
reimbursement obligations with respect to Letters of Credit, to pay the
transaction costs for this Loan Agreement, and to finance Permitted
Acquisitions, including, without limitation, the Current Acquisitions.
14.2. CORPORATE EXISTENCE. Each Covered Person shall maintain its existence
in good standing and shall maintain in good standing its right to transact
business in those states in which it is now or hereafter doing business,
except where the failure to so qualify will not have and will not be
reasonably likely to have a Material Adverse Effect on any Covered Person.
Each Covered Person shall obtain and maintain all Material Licenses for
such Covered Person.
14.3. MAINTENANCE OF PROPERTY AND LEASES. Each Covered Person shall
maintain in good condition and working order, and repair and replace as
required, all buildings, equipment, machinery, fixtures and other real and
personal property whose useful economic life has not elapsed and which is
necessary for the ordinary conduct of the business of such Covered Person.
Each Covered Person shall maintain in good standing and free of defaults
all of its leases of buildings, equipment, machinery, fixtures and other
real and personal property whose useful economic life has not elapsed and
which is necessary for the ordinary conduct of the business of such Covered
Person. No Covered Person shall permit any of its owned equipment or other
owned property to become a fixture to real property or an accession to
other personal property unless Administrative Agent has a valid, perfected
and first priority Security Interest for the benefit of Lenders in such
real or personal property.
43
14.4. INVENTORY. Each Covered Person shall keep its Inventory in good and
merchantable condition at its own expense and shall hold such Inventory for
sale or lease, or to be furnished in connection with the rendition of
services, in the ordinary course of such Covered Person's business, on
terms which do not include xxxx-and-hold, guarantied sale, sale and return,
sale on approval, consignment or similar repurchase or return terms. All
such Inventory shall be produced in accordance with the Federal Fair Labor
Standards Act of 1938 and all rules, regulations, and orders thereunder.
14.5. INSURANCE. Each Covered Person shall at all times keep insured or
cause to be kept insured, in insurance companies having a rating of at
least "A" by Best's Rating Service, all property owned by it of a character
usually insured by others carrying on businesses similar to that of such
Covered Person in such manner and to such extent and covering such risks as
such properties are usually insured. Each Covered Person shall carry,
business interruption insurance in such amounts, in such manner and to such
extent and covering such risks as businesses similar to that of such
Covered Persons are usually insured. Each Covered Person shall at all times
carry insurance, in insurance companies having a rating of at least "A" by
Best's Rating Service, against liability on account of damage to persons or
property (including product liability insurance and insurance required
under all Laws pertaining to workers' compensation) and covering all other
liabilities common to such Covered Person's business, in such manner and to
such extent as such coverage is usually carried by others conducting
businesses similar to that of such Covered Person (and each Covered Person
shall maintain liability coverage, including tail coverage, in the amounts
in effect for such Covered Person on the Effective Date). All policies of
liability insurance maintained hereunder shall name Administrative Agent as
an additional insured for the benefit of Lenders; all policies of property
insurance maintained hereunder shall reflect Administrative Agent's
interest therein as mortgagee for the benefit of Lenders under a standard
New York or Union mortgagee clause. Administrative Agent is authorized, but
not obligated, as the attorney-in-fact for Borrower and for the benefit of
Lenders, at any time when there does not then exist an Event of Default,
with Borrower's consent (which consent shall not be unreasonably withheld),
and when an Event of Default is in existence, without Borrower's consent,
to (i) adjust and compromise proceeds payable under such policies of
insurance, (ii) collect, receive and give receipts for such proceeds in the
name of Borrower, Administrative Agent and Lenders, and (iii) to endorse
Borrower's name upon any instrument in payment thereof. Such power granted
to Administrative Agent shall be deemed coupled with an interest and shall
be irrevocable. All policies of insurance maintained hereunder shall
contain a clause providing that such policies may not be canceled, reduced
in coverage or otherwise modified without 30 days prior written notice to
Administrative Agent. Borrower shall upon request of Administrative Agent
at any time furnish to Administrative Agent updated evidence of insurance
(in the form required as a condition to Administrative Agent's lending
hereunder) for such insurance.
14.6. PAYMENT OF TAXES AND OTHER OBLIGATIONS. Each Covered Person shall
promptly pay and discharge or cause to be paid and discharged, as and when
due, any and all income taxes, federal or otherwise, lawfully assessed and
imposed upon it, and any and
44
all lawful taxes, rates, levies, and assessments whatsoever upon its
properties and every part thereof, or upon the income or profits therefrom
and all claims of materialmen, mechanics, carriers, warehousemen, landlords
and other like Persons for labor, materials, supplies, storage or other
items or services which if unpaid might be or become a Security Interest or
charge upon any of its property; provided, however, that a Covered Person
may diligently contest in good faith by appropriate proceedings the
validity of any such taxes, rates, levies, or assessments, provided such
Covered Person has established adequate reserves therefor in conformity
with GAAP on the books of such Covered Person, and no Security Interest,
other than a Permitted Security Interest, results from such non-payment.
14.7. COMPLIANCE WITH LAWS. Each Covered Person shall comply in all
material respects with all Material Laws.
14.8. DISCOVERY AND CLEAN-UP OF HAZARDOUS MATERIAL.
14.8.1. IN GENERAL. Upon any Covered Person receiving notice of any
violation of Environmental Laws or any similar notice described in Section
12.10.3, or upon any Covered Person otherwise discovering Hazardous
Material on any property owned or leased by such Covered Person which is in
violation of, or which would result in liability under, any Environmental
Law, Borrower shall: (i) promptly take such reasonable acts as may be
necessary to prevent danger or harm to the property or any person therein
as a result of such Hazardous Material; (ii) at the request of
Administrative Agent, and at Borrower's sole cost and expense, obtain and
deliver to Administrative Agent promptly, but in no event later than 90
days after such request, a then currently dated environmental assessment of
the property certified to Administrative Agent and any future holder of the
Loan Obligations, a proposed plan for responding to any environmental
problems described in such assessment, and an estimate of the costs
thereof; and (iii) take all necessary steps to initiate and expeditiously
complete all removal, remedial, response, corrective and other action to
eliminate any such environmental problems, and keep Administrative Agent
informed of such actions and the results thereof.
14.8.2. ASBESTOS CLEAN-UP. In the event that any property owned by any
Covered Person contains Asbestos Material, Borrower shall develop and
implement, as soon as reasonably possible, an Operations and Maintenance
Program (as contemplated by EPA guidance document entitled Managing
Asbestos in Place; A Building Owner's Guide to Operations and Maintenance
45
Programs for Asbestos-Containing Materials) for managing in place the
Asbestos Material, and deliver a true, correct and complete copy of such
Operations and Maintenance Program to Administrative Agent. In the event
that the asbestos survey done in connection with developing the Operations
and Maintenance Program reveals Asbestos Material which, due to its
condition, location or planned building renovation, is recommended to be
encapsulated or removed, Borrower shall promptly cause the same to be
encapsulated or removed and disposed of offsite, in either case by a
licensed and experienced asbestos contractor, all in accordance with
applicable state, federal and local Laws. Upon completion of any such
encapsulation or removal, Borrower shall deliver to Administrative Agent a
certificate in such form as is then customarily available signed by the
consultant overseeing the activity certifying to Administrative Agent that
the work has been completed in compliance with all applicable Laws
regarding notification, encapsulation, removal and disposal and that no
airborne fibers beyond permissible exposure limits remain on site. All
costs of such inspection, testing and remedial actions shall be paid by
Borrower.
14.9. TERMINATION OF PENSION BENEFIT PLAN. No Covered Person or ERISA
Affiliate of such Covered Person shall terminate or amend any Pension
Benefit Plan maintained by such Covered Person or such ERISA Affiliate if
such termination or amendment would result in any liability to such Covered
Person or such ERISA Affiliate under ERISA or any increase in current
liability for the plan year for which such Covered Person or such ERISA
Affiliate is required to provide security to such Pension Benefit Plan
under the Code, which such liability could reasonably be expected to have a
Material Adverse Effect on such Covered Person.
14.10. NOTICE TO ADMINISTRATIVE AGENT OF MATERIAL EVENTS. Borrower shall,
promptly upon any Responsible Officer of Borrower obtaining knowledge or
notice thereof, give notice to Administrative Agent of (i) any breach of
any of the covenants in Section 14, 15, or 16; (ii) any Default or Event of
Default; (iii) the commencement of any Material Proceeding; and (iv) any
loss of or damage to any assets of a Covered Person or the commencement of
any proceeding for the condemnation or other taking of any of the assets of
a Covered Person, if Insurance/Condemnation Proceeds in excess of
$100,000.00 are likely to be payable as a consequence of such loss, damage
or proceeding, or if such loss, damage or proceeding has or is reasonably
likely to have a Material Adverse Effect on such Covered Person. In
addition,
46
14.10.1. Borrower shall furnish to Administrative Agent from time to
time all information which Administrative Agent reasonably requests
with respect to the status of any Material Proceeding.
14.10.2. Borrower shall furnish to Administrative Agent from time to
time all information which Administrative Agent reasonably requests
with respect to any Pension Benefit Plan established by a Covered
Person or an ERISA Affiliate of any Covered Person.
14.10.3. Borrower shall deliver notice to Administrative Agent of the
establishment of any Pension Benefit Plan by a Covered Person or an
ERISA Affiliate of such Covered Person.
14.10.4. Borrower shall promptly deliver to Administrative Agent
notice of any event of default with respect to any of the Permitted
Indebtedness, the occurrence of which would be reasonably likely to
have a Material Adverse Effect.
14.10.5. Borrower shall promptly deliver notice to Administrative
Agent of the assertion by the holder of any capital stock, membership
interest, or any other equity interest in a Covered Person or any
Indebtedness of a Covered Person in the outstanding principal amount
in excess of $100,000.00 that a default exists with respect thereto or
that such Covered Person is not in compliance with the terms thereof,
or of the threat or commencement by such holder of any enforcement
action because of such asserted default or noncompliance and such
assertion, threat or commencement would be reasonably likely to have a
Material Adverse Effect.
14.10.6. Borrower shall, promptly after becoming aware thereof,
deliver notice to Administrative Agent of any pending or threatened
strike, work stoppage, material unfair labor practice claim or other
material labor dispute affecting a Covered Person.
14.10.7. Borrower shall deliver notice to Administrative Agent of any
change in the name, state of organization, or form of organization of
any Covered Person, at least 30 days prior to such change.
14.10.8. Borrower shall, promptly after becoming aware thereof,
deliver notice to Administrative Agent of any event that has or is
reasonably likely to have a Material Adverse Effect.
14.10.9. Borrower shall, promptly after becoming aware thereof,
deliver notice to Administrative Agent of an actual, alleged, or
potential violation of any Material Law applicable to a Covered Person
or the property of a Covered Person if such violation would reasonably
be likely to have a Material Adverse Effect.
47
14.10.10. Borrower shall notify Administrative Agent promptly in
writing of any fact or condition of which Borrower is aware which
materially and adversely affects the value of the Collateral,
including any adverse fact or condition or the occurrence of any event
which causes loss or depreciation in the value of any material item of
the Collateral, and the amount of such loss or depreciation. Borrower
shall provide such additional information to Administrative Agent
regarding the amount of any loss or depreciation in value of the
Collateral as Administrative Agent may request from time to time.
14.11. BORROWING OFFICER. Borrower shall keep on file with Administrative
Agent at all times an appropriate instrument naming each Borrowing Officer.
14.12. MAINTENANCE OF SECURITY INTERESTS OF SECURITY DOCUMENTS.
14.12.1. PRESERVATION AND PERFECTION OF SECURITY INTERESTS. Borrower
shall promptly, upon the reasonable request of Administrative Agent
and at Borrower's expense, execute, acknowledge and deliver, or cause
the execution, acknowledgment and delivery of, and thereafter file or
record in the appropriate governmental office, any document or
instrument supplementing or confirming the Security Documents or
otherwise deemed necessary by Administrative Agent to create, preserve
or perfect any Security Interest purported to be created by the
Security Documents or to fully consummate the transactions
contemplated by the Loan Documents. The foregoing actions by Borrower
shall include, upon the reasonable request of Administrative Agent,
(i) filing financing or continuation statements, and amendments
thereof, in form and substance satisfactory to Administrative Agent;
(ii) delivering to Administrative Agent the originals of each
instrument, document and chattel paper in the principal amount of
$100,000 or more, and all other Collateral of which Administrative
Agent should have physical possession in accordance with applicable
law in order to perfect Administrative Agent's Security Interest for
the benefit of Lenders therein, duly endorsed or assigned to
Administrative Agent without restriction; (iii) delivering to
Administrative Agent all letters of credit on which Borrower is named
beneficiary; (iv) placing a notice of the existence of Administrative
Agent's Security Interest for the benefit of Lenders, acceptable to
Administrative Agent, upon the books and records of Borrower
pertaining to the Collateral, as designated by Administrative Agent;
(v) delivering to Administrative Agent or if directed by
Administrative Agent, to the applicable government agency, such
notices, filings, statements, continuations, or amendments as
Administrative Agent shall deem necessary as desirable to perfect its
interest in that portion of the Collateral that consists of
Intellectual Property; and (vi) delivering to Administrative Agent or
if directed by Administrative Agent, to the applicable government
agency, such notices, filings, statements, continuations or amendments
as Administrative Agent shall deem necessary or desirable to perfect
its interest in that portion of the Collateral that consists of
Accounts of a value in excess of $250,000.00 with respect to which the
Account Debtor is the United States of America or any
48
department agency, public corporation or other instrumentality
thereof. Borrower hereby authorizes Administrative Agent to file any
financing or continuation statements and amendments thereof covering
the Collateral of all Covered Persons in form and substance
satisfactory to Administrative Agent and ratifies Administrative
Agent's authority to file any such statements or amendments already
filed.
14.12.2. COLLATERAL HELD BY WAREHOUSEMAN, BAILEE, ETC. If any
Collateral of a value in excess of $250,000.00 in the aggregate is at
any time in the possession or control of a warehouseman, bailee or any
of Borrower's agents or processors, then Borrower shall notify
Administrative Agent thereof and shall notify such Person of
Administrative Agent's Security Interest for the benefit of Lenders in
such Collateral and, upon Administrative Agent's request, instruct
such Person to hold all such Collateral for Administrative Agent's
account subject to Administrative Agent's instructions. If at any time
any material portion of the Collateral as determined by Administrative
Agent in its reasonable discretion is located on any premises that are
not owned by a Covered Person, then Borrower, if requested by
Administrative Agent, shall obtain or cause to be obtained written
waivers, in form and substance satisfactory to Administrative Agent,
of all present and future Security Interests to which the owner or
lessor or any mortgagee of such premises may be entitled to assert
against the Collateral.
14.12.3. COMPLIANCE WITH TERMS OF SECURITY DOCUMENTS. Each Covered
Person shall comply with all of the terms, conditions and covenants in
the Security Documents to which such Covered Person is a party.
14.13. ACCOUNTING SYSTEM. Each Covered Person shall maintain a system of
accounting established and administered in accordance with GAAP. Without
limiting the generality of the foregoing:
14.13.1. ACCOUNT RECORDS. Each Covered Person shall maintain a record of
Accounts at its principal place of business that itemize each Account of
such Covered Person and describe the names and addresses of the Account
Debtors on such Accounts, all relevant invoice numbers, invoice dates, and
shipping dates, and the due dates, collection histories, and aging of such
Accounts..
14.13.2. TRACING OF PROCEEDS. Each Covered Person shall maintain detailed
and accurate records of all transfers of any proceeds of the Loans from
Borrower to such Covered Person. Borrower shall maintain reasonably
detailed and accurate records of proceeds of the Loans and transfers of
proceeds of the Loans (i) received by it from the Lenders, (ii) transferred
from it to any other Covered Person, and (iii) received by it from another
Covered Person.
14.14. FINANCIAL STATEMENTS. Borrower shall deliver to Administrative
Agent:
49
14.14.1. ANNUAL FINANCIAL STATEMENTS. Within 120 days after the close
of each fiscal year of Borrower, yearend consolidated and
consolidating financial statements of Borrower and its Subsidiaries,
containing a balance sheet, income statement, statement of cash flows
and an audit report without qualification by an independent certified
public accounting firm selected by Borrower and satisfactory to
Administrative Agent, and accompanied by (i) a Compliance Certificate
of the Chief Financial Officer of Borrower, (ii) a certificate of the
independent certified public accounting firm that examined such
financial statements to the effect that they have reviewed and are
familiar with the financial covenants set forth in this Agreement and
that, in examining such financial statements, they did not become
aware of any fact or condition which then constituted a Default or
Event of Default, except for those, if any, described in reasonable
detail in such certificate, (iii) the management letter and report on
internal controls delivered by such independent certified public
accounting firm in connection with their audit, and (iv) if requested
by Administrative Agent, any summary prepared by such independent
certified public accounting firm of the adjustments proposed by the
members of its audit team.
14.14.2. QUARTERLY FINANCIAL STATEMENTS. Within 30 days after the end
of each fiscal quarter of Borrower, unaudited consolidated and
consolidating internally prepared financial statements of Borrower and
its Subsidiaries for the quarters not covered by the latest year-end
financial statements, in each case containing a balance sheet, income
statement, and statement of cash flows and accompanied by a Compliance
Certificate of the Chief Financial Officer of Borrower.
Each Compliance Certificate shall be in the form of Exhibit 14.14, shall
contain detailed calculations of the financial measurements referred to in
Section 16 for the relevant periods, and shall contain statements by the
signing officer to the effect that, except as explained in reasonable
detail in such Compliance Certificate, (i) the attached Financial
Statements are complete and correct in all material respects (subject, in
the case of Financial Statements other than annual, to normal year-end
audit adjustments) and have been prepared in accordance with GAAP applied
consistently throughout the periods covered thereby and with prior periods
(except as disclosed therein) (ii) all of the Representations and
Warranties are true and correct in all material respects as of the date
such certification is given as if made on such date, and (iii) there is no
Existing Default. If any Compliance Certificate delivered to Administrative
Agent discloses that a representation or warranty is not true and correct
in all material respects, or that there is an Existing Default that has not
been cured or waived in writing by Required Lenders, such Compliance
Certificate shall state what action Borrower has taken or proposes to take
with respect thereto.
14.15. OTHER FINANCIAL INFORMATION. Borrower shall also deliver the
following to Administrative Agent:
50
14.15.1. AGINGS REPORT. Within fifteen days after the end of each
month, a summary report of the aging of all Accounts of Borrower in
such reasonable detail as Administrative Agent may require.
14.15.2. OTHER REPORTS OR INFORMATION CONCERNING ACCOUNTS OR
INVENTORY. Such other reports and information, in form and detail
satisfactory to Administrative Agent, and documents as Administrative
Agent may reasonably request from time to time concerning Accounts or
Inventory including, to the extent requested by Administrative Agent,
copies of all invoices, bills of lading, shipping receipts, purchase
orders, and warehouse receipts.
14.15.3. STOCKHOLDER REPORTS. Contemporaneously with their filing by
or on behalf of Borrower or any other Covered Person, copies of any
proxy statements, financial statements and reports which Borrower
makes available to its stockholders, members or partners.
14.15.4. PENSION BENEFIT PLAN REPORTS. Promptly upon the reasonable
request of Administrative Agent at any time or from time to time, a
copy of each annual report or other filing or notice filed with
respect to each Pension Benefit Plan of a Covered Person or an ERISA
Affiliate of a Covered Person.
14.15.5. TAX RETURNS. Promptly upon the reasonable request of
Administrative Agent at any time or from time to time, a copy of each
federal, state, or local tax return or report filed by Borrower.
14.16. REVIEW OF ACCOUNTS. Not less often than annually, and promptly at
Administrative Agent's request if there is an Event of Default in
existence, Borrower shall conduct (and shall cause each other Covered
Person to conduct) a review of its Accounts, bad debt reserves, and
collection histories of Account Debtors and promptly following such review
provide Administrative Agent with a report of such review in form and
detail satisfactory to Administrative Agent.
14.17. INVENTORY. Not less often than annually, and promptly at
Administrative Agent's request if there is an Event of Default in
existence, Borrower shall conduct (and shall cause each other Covered
Person to conduct) a physical count of its and each other Covered Person's
Inventory and promptly following the completion of such count provide
Administrative Agent with a report thereof in form and detail satisfactory
to Administrative Agent, including the value of such Inventory (on a
first-in-first-out basis and valued at the lower of cost or market).
14.18. ANNUAL PROJECTIONS. Within the 10 days after the first day of each
fiscal year of Borrower, projected balance sheets, statements of income and
expense for Borrower and every other Covered Person as of the end of and
for each quarter of such fiscal year and the next four succeeding fiscal
years, in such detail as Administrative Agent may reasonably require. Such
projections shall be delivered to Administrative Agent.
51
14.19. OTHER INFORMATION. Upon the request of Administrative Agent,
Borrower shall promptly deliver to Administrative Agent such other
information about the business, operations, revenues, financial condition,
property, or business prospects of Borrower and every other Covered Person
as Administrative Agent may, from time to time, reasonably request.
14.20. AUDITS BY ADMINISTRATIVE AGENT. Administrative Agent or Persons
authorized by and acting on behalf of Administrative Agent or any Lender
may at any time during normal business hours audit the books and records
and inspect any of the property of each Covered Person from time to time
upon reasonable notice to such Covered Person, and in the course thereof
may make copies or abstracts of such books and records and discuss the
affairs, finances and books and records of such Covered Person with its
accountants and officers. Each Covered Person shall cooperate with
Administrative Agent and such Persons in the conduct of such audits and
shall deliver to Administrative Agent any instrument necessary for
Administrative Agent to obtain records from any service bureau maintaining
records for such Covered Person. Borrower shall reimburse Administrative
Agent for all reasonable costs and expenses incurred by it in conducting
each audit. Provided there is no Event of Default that has occurred and is
continuing, Administrative Agent shall not conduct an audit more than one
(1) time per calendar year, and Borrower's obligation to reimburse
Administrative Agent shall be capped at $5,000.00 per audit. However,
neither limitation shall apply to audits if an Event of Default occurs.
14.21. VERIFICATION OF ACCOUNTS AND NOTICES TO ACCOUNT DEBTORS. Upon the
occurrence and during the continuation of an Event of Default,
Administrative Agent shall have the right, in its commercially reasonable
judgment, to verify the validity and amount of any Account and any other
maker relating to an Account, by communicating in writing or orally
directly with the Account Debtor or any Person who represents or
Administrative Agent believes represents the Account Debtor.
14.22. APPRAISALS OF COLLATERAL. Upon Administrative Agent's request at any
time if there is an Event of Default in existence, Borrower shall at its
expense provide Administrative Agent with appraisals, prepared on a basis
satisfactory to Administrative Agent and from appraisers acceptable to
Administrative Agent, of any or all of the Collateral as Administrative
Agent may reasonably specify.
14.23. ACCESS TO OFFICERS AND AUDITORS. Each Covered Person shall permit
any Lender and Administrative Agent and each of their representatives and
agents to discuss the business, operations, revenues, financial condition,
property, or business prospects of such Covered Person with its officers,
accountants and independent auditors as often as Administrative Agent may
request in its discretion, and such Covered Person shall direct such
officers, accountants and independent auditors to cooperate with
Administrative Agent, Lenders, and their representatives and agents, and
make full disclosure to Administrative Agent, Lenders, and their
representatives and agents, of those matters that they may deem relevant to
the continuing ability of Borrower timely to pay and perform the Loan
Obligations. Administrative Agent and each Lender agrees that it will not
52
disclose to third Persons any information that it obtains about any Covered
Person or its operations or finances that is reasonably considered
non-public information. Administrative Agent and Lenders may, however,
disclose such information to each other and all of their respective
officers, attorneys, auditors, accountants, bank examiners, agents and
representatives who have a need to know such information in connection with
the administration, interpretation or enforcement of the Loan Documents or
the lending and collection activity contemplated therein or to the extent
required by Law or a Governmental Authority. Administrative Agent and
Lenders shall advise such Persons that such information is to be treated as
confidential. Administrative Agent and any Lender may also disclose such
information in any documents that it files in any legal proceeding to
pursue, enforce or preserve its rights under the Loan Documents to the
extent that its counsel advises in writing that such disclosure is
reasonably necessary. Administrative Agent's and Lenders' non-disclosure
obligation shall not apply to any information that (i) is disclosed to
Administrative Agent or any Lender by a third Person not affiliated with or
employed by Borrower who does not have a commensurate duty of
non-disclosure, or (ii) becomes publicly known other than as a result of
disclosure by Administrative Agent or a Lender.
14.24. PROFORMAS FOR PERMITTED ACQUISITIONS. Borrower shall, no less than
20 days prior to making any Permitted Acquisition, prepare and furnish to
Administrative Agent proforma financial statements described below for the
Target Company (if such Permitted Acquisition is structured as a purchase
of equity) or the Surviving Company (if such Permitted Acquisition is
structured as a purchase of assets or a merger), demonstrating to the
satisfaction of Administrative Agent that the Target Company, all Surviving
Companies, and Borrower, as the case may be, will be Solvent upon
consummation of such acquisition and upon the passage of time thereafter,
and that none of the covenants in Section 16 will be violated as a
consequence of such acquisition or with the passage of time thereafter.
Such proforma financial statements shall contain consolidated and
consolidating balance sheets, income statements, statements of cash flows
and such other reports and disclosures of Borrower as well as the Target
Company (if such Permitted Acquisition is structured as a purchase of
equity) or the Surviving Company (if such Permitted Acquisition is
structured as a purchase of assets or a merger) and shall cover such
forecast periods, as Administrative Agent may in its discretion require.
Borrower shall also provide to Administrative Agent copies of the audited
financial statements (if available, or unaudited financial statements if no
audited financial statements exist) for the Target Company for the three
fiscal years most recently ended and for each of the completed fiscal
quarters in the then current fiscal year.
14.25. RATE AGREEMENT. Within 90 days of the Effective Date, Borrower shall
secure a Rate Agreement with a counter-party acceptable to Administrative
Agent, upon terms satisfactory to Administrative Agent with respect to a
notional principal amount initially equal to or greater than
$15,000,000.00, and thereafter equal to or greater than the amount which is
fifty percent (50%) of the then outstanding principal balance of the
Aggregate Term Loan extending through the Revolving Loan Maturity Date or
the Term Loan Maturity Date, whichever is later. Borrower shall assign its
rights under the Rate
53
Agreement to Administrative Agent for the benefit of Lenders as security
for the Loans pursuant to an assignment satisfactory to Administrative
Agent.
14.26. ACQUISITION DOCUMENTS. Borrower shall fully perform in all material
respects all of its obligations under all Acquisition Documents, and shall
enforce all of its rights and remedies thereunder as it deems appropriate
in its reasonable business judgment; provided, however, that Borrower shall
not take any action or fail to take any action which would result in a
waiver or other loss of any material right or remedy of Borrower
thereunder. Without limiting the generality of the foregoing, Borrower
shall take all action necessary or appropriate to permit, and shall not
take any action which would have a Material Adverse Effect upon, the full
enforcement of all indemnification rights under all the Acquisition
Documents. Borrower shall not, without Administrative Agent's prior written
consent, modify, amend, supplement, compromise, satisfy, release or
discharge any material provision of the Acquisition Documents, any material
collateral securing the same, any Person liable directly or indirectly with
respect thereto, or any material agreement relating to the Acquisition
Documents or the collateral therefor. Borrower shall notify Administrative
Agent in writing promptly after Borrower becomes aware thereof, of any
event or fact which could give rise to a claim by it for indemnification
under any of the Acquisition Documents to the extent such claims in the
aggregate exceed $100,000.00, and shall diligently pursue such right and
report to Administrative Agent on all further developments with respect
thereto. If an Event of Default then exists, Borrower shall remit directly
to Administrative Agent, for application to the Loan Obligations in such
order as Administrative Agent determines, all amounts received by Borrower
as indemnification or otherwise pursuant to the Acquisition Documents. If
Borrower fails after Administrative Agent's demand to pursue diligently any
right under any of the Acquisition Documents, or if an Event of Default
then exists, then Administrative Agent may directly enforce such right in
its own or Borrower's name and may enter into such settlements or other
agreements with respect thereto as Administrative Agent determines.
Notwithstanding the foregoing, Borrower shall at all times remain liable to
observe and perform all of its duties and obligations under all the
Acquisition Documents, and Administrative Agent's exercise of any of its
rights with respect to the Collateral shall not release Borrower from any
of such duties or obligations. Administrative Agent shall not be obligated
to perform or fulfill any of Borrower's duties or obligations under any of
the Acquisition Documents or to make any payment thereunder, or to make any
inquiry as to the sufficiency of any payment or property received by it
thereunder or the sufficiency of performance by any party thereunder, or to
present or file any claim, or to take any action to collect or enforce any
performance or payment of any amounts, or any delivery of any property.
14.27. PAYMENT OF U.S. BANK LOAN. Within three (3) days after the Effective
Date Borrower shall pay the loan and all related expenses owed to U.S. Bank
in full and Borrower shall immediately obtain and deliver to Administrative
Agent a termination statement as to all financing statements held by U.S.
Bank.
54
14.28. FURTHER ASSURANCES. Borrower shall execute and deliver, or cause to
be executed and delivered, to Administrative Agent such documents and
agreements, and shall take or cause to be taken such actions, as
Administrative Agent may from time to time reasonably request to carry out
the terms and conditions of this Agreement and the other Loan Documents.
15. NEGATIVE COVENANTS. Each Borrower covenants and agrees that, while any of
the Commitments remains in effect and until all of the Loan Obligations are
fully and indefeasibly paid, no Letters of Credit are outstanding and the Letter
of Credit Exposure is zero, Borrower shall not, directly or indirectly, do any
of the following, or permit any Covered Person to do any of the following,
without the prior written consent of Required Lenders:
15.1. INVESTMENTS. Make any Investments in any other Person except the
following:
15.1.1. Investments in (i) interest-bearing obligations of the United
States government or any department, agency or instrumentality
thereof; (ii) certificates of deposit issued by any Lender; (iii)
prime commercial paper rated A1 or better by Standard and Poor's
Corporation or Prime P1 or better by Xxxxx'x Investor Service, Inc.;
(iv) agreements involving the sale to a Covered Person of United
States government securities and their guarantied repurchase the next
Business Day by a commercial bank chartered under the Laws of the
United States or any state thereof which has capital and surplus of
not less than $500,000,000.00 (v) certificates of deposit issued by
and time deposits with any commercial bank chartered under the Laws of
the United States or any state thereof which has capital and surplus
of not less than $500,000,000.00; or (vi) municipal bonds that are
rated in either of the two highest rating categories by a nationally
recognized rating service.
15.1.2. Accounts arising in the ordinary course of business and
payable in accordance with Borrower's customary trade terms.
15.1.3. Any Investments that are Permitted Acquisitions.
15.1.4. Investments existing on the Execution Date and disclosed in
section 12.20 of the Disclosure Schedule.
15.1.5. Notes received by a Covered Person in settlement of
Indebtedness of other Persons to such Covered Person that was incurred
in the ordinary course of such Covered Person's business.
15.1.6. Investments by any Covered Person in any other Covered Person.
15.1.7. Loans to employees of any Covered Person, provided that in no
event shall all such loans exceed $500,000 in the aggregate.
55
15.2. INDEBTEDNESS. Create, incur, assume, or allow to exist any
Indebtedness of any kind or description, except the following:
15.2.1. Indebtedness to trade creditors incurred in the ordinary
course of business, to the extent that it is not overdue past the
original due date by more than 90 days, provided that Indebtedness
that is overdue past its original due date by more than ninety (90)
days will be considered Permitted Indebtedness if it is the subject of
a good faith dispute and Borrower has established appropriate reserves
adequate to pay such items in accordance with GAAP.
15.2.2. The Loan Obligations.
15.2.3. Indebtedness secured by Permitted Security Interests.
15.2.4. Indebtedness under Capital Leases to the extent it does not
exceed $3,000,000.00 in the aggregate at any time and is on terms
approved in advance in writing by Administrative Agent.
15.2.5. Indebtedness owed by one Covered Person to another Covered
Person.
15.2.6. The Interest Hedge Obligation.
15.2.7. The Indebtedness set forth on Section 15.2.7 of the Disclosure
Schedule
15.2.8. Indebtedness incurred in connection with permitted
Acquisitions that do not exceed $2,500,000.00.
15.3. PREPAYMENTS. Voluntarily prepay any Indebtedness other than (a) the
Loan Obligations in accordance with the terms of the Loan Documents, (b)
trade payables in the ordinary course of business, and (c) Operating and
Capital Lease obligations.
15.4. INDIRECT OBLIGATIONS. Create, incur, assume or allow to exist any
Indirect Obligations except the Permitted Indebtedness and except Indirect
Obligations existing on the Execution Date and disclosed on section 12.22
of the Disclosure Schedule.
15.5. SECURITY INTERESTS. Create, incur, assume or allow to exist any
Security Interest upon all or any part of its property, real or personal,
now owned or hereafter acquired (including, without limitation, any Account
with respect to which the Account Debtor is the United States or any
department, agency, public corporation or other instrumentality thereof),
except the following:
15.5.1. Security Interests for taxes, assessments or governmental
charges not delinquent or being diligently contested in good faith and
by appropriate proceedings and for which adequate book reserves in
accordance with GAAP are maintained.
56
15.5.2. Security Interests arising out of deposits in connection with
workers' compensation insurance, unemployment insurance, old age
pensions, or other social security or retirement benefits legislation.
15.5.3. Deposits or pledges to secure bids, tenders, contracts (other
than contracts for the payment of money), leases, statutory
obligations, surety and appeal bonds, and other obligations of like
nature arising in the ordinary course of business.
15.5.4. Security Interests imposed by any Law, such as mechanics',
workmen's, materialmen's, landlords', carriers', or other like
Security Interests arising in the ordinary course of business which
secure payment of obligations which are not past due or which are
being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP are maintained
on Borrower's books.
15.5.5. Purchase money Security Interests securing payment of the
purchase price of capital assets acquired by a Covered Person after
the Execution Date in an aggregate principal amount outstanding at any
one time that does not exceed the lesser of $1,000,000.00 or the
maximum limit permitted for Capital Expenditures hereunder.
15.5.6. Security Interests securing the Loan Obligations in favor of
Administrative Agent for the benefit of Lenders.
15.5.7. Security Interests existing on the Execution Date that are
disclosed in section 12.31 of the Disclosure Schedule and are
satisfactory to Lenders.
57
15.5.8. Security Interests arising in connection with Permitted
Acquisitions to the extent of the limitations set forth in Section
15.2.8.
15.5.9. Security Interests granted under Capital Leases to the extent
of the limitations set forth in Section 15.2.4 and security interests
granted under Operating Leases.
15.6. NO AMENDMENTS TO ACQUISITION DOCUMENTS. Agree to, acquiesce to, or
consent to any amendment, modification, supplement, restatement,
replacement or change to any of the documents executed in connection with
any of the Acquisition Documents if such change would be reasonably likely
to have a Material Adverse Effect.
15.7. ACQUISITIONS. Acquire a controlling interest in the stock, membership
interests, or any other equity interest in a Person, or acquire all or
substantially all of the assets of a Person (including without limitation
assets comprising all or substantially all of an unincorporated business
unit or division of any Person), except for the Current Acquisitions and
except for Permitted Acquisitions. Permitted Acquisition means an
acquisition of a controlling interest in the stock, membership interests,
or any other equity interest in a Person, or the acquisition of all or
substantially all of the assets of a Person (including without limitation
assets comprising all or substantially all of an unincorporated business
unit or division of any Person), which satisfies each of the following
conditions: (i) Borrower is the Acquiring Company, (ii) if the acquisition
is structured as a merger, Borrower is the Surviving Company, (iii) Target
Company is in a substantially similar line of business as Borrower or
another Covered Person, (iv) Target Company has an EBITDA in excess of zero
for the twelve month period ended on the date such acquisition is
consummated, (v) there is no Existing Default, and no Default or Event of
Default will occur or is reasonably likely to occur as a result of or due
to such acquisition, (vi) Borrower has fully complied with Section 14.24 of
this Agreement with respect to such acquisition, (vii) the Maximum
Available Amount exceeds the Aggregate Revolving Loan by at least
$2,000,000.00 after giving effect to such acquisition, (viii) the purchase
price (including without limitation any deferred purchase price, seller
notes, assumed Indebtedness, or similar items) together with all expenses
incurred in connection with such acquisition does not exceed $2,500,000.00
for any single acquisition or $5,000,000.00 in the aggregate during any
fiscal year of Borrower, (ix) simultaneously with the closing of such
acquisition, the Target Company (if such Permitted Acquisition is
structured as a purchase of equity) or the Surviving Company (if such
Permitted Acquisition is structured as a purchase of assets or a merger)
58
executes and delivers to Administrative Agent (a) such documents necessary
to grant to Administrative Agent for the benefit of the Lenders a first
priority Security Interest in all of the assets of such Target Company or
Surviving Company, each in form and substance satisfactory to
Administrative Agent (and if the Target Company becomes a Subsidiary of any
Covered Person, such Covered Person executes and delivers to Administrative
Agent a Pledge Agreement granting to Administrative Agent for the benefit
of the Lenders a first priority security interest in 100% of the capital
stock or other equity interests of such Target Company, along with the
original stock certificates, if any, and stock powers executed in blank,
each in form and substance satisfactory to Administrative Agent), and (b)
an unlimited Guaranty of the Loan Obligations, or at the option of
Administrative Agent in Administrative Agent's absolute discretion, a
joinder agreement satisfactory to Administrative Agent in which such Target
Company or Surviving Company becomes a Borrower under this Agreement and
assumes primary, joint and several liability for the Loan Obligations, (x)
prior to the closing of such acquisition, a Responsible Officer of Borrower
delivers to Administrative Agent a certificate on behalf of Borrower
certifying that such acquisition is a Permitted Acquisition, and (xi) such
acquisition is friendly, rather than hostile, in nature.
15.8. BAILMENTS; CONSIGNMENTS; WAREHOUSING. Store any Inventory or other
assets in excess of $250,000.00 in the aggregate with a bailee,
warehouseman, consignee or pursuant to an express or implied agreement
establishing a bailment or consignment of Inventory or similar arrangement,
unless Administrative Agent has received a written acknowledgment
satisfactory to Administrative Agent from the third party involved which
acknowledges the prior perfected Security Interest of Administrative Agent
for the benefit of Lenders in such Inventory.
15.9. DISPOSAL OF PROPERTY. Sell, transfer, exchange, lease, or otherwise
dispose of any of its assets except (i) sales of Inventory in the ordinary
course of business, (ii) the sales of obsolete or unused assets, (iii)
sales of assets that are replaced by comparable assets of comparable or
better quality; and (iv) sales of other assets that do not exceed
$250,000.00 per year in the aggregate.
59
15.10. DISTRIBUTIONS. Directly or indirectly declare or make, or incur any
liability to make, any Distribution to any Person other than from one
Covered Person to another; provided that the distribution of cash dividends
in an amount not to exceed $2,500,000.00 per fiscal year shall be permitted
so long as there is no Default hereunder at the time of declaration of such
Distribution. For purposes of this Section, a Distribution means and
includes (i) any cash dividend or payment, (ii) any retirement or
prepayment of debt securities (other than the Loan Obligation or as
otherwise permitted hereunder) before their regularly scheduled maturity
dates, and (iii) any loan or advance to a shareholder or partner(other than
Permitted Investments).
15.11. CHANGE OF CONTROL. Merge or consolidate with or into another Person
provided that a Covered Person shall be permitted to merge or consolidate
with or into another Covered Person upon advance written notice to
Administrative Agent, or permit any Person or Group (i) to become the
record or beneficial owner, directly or indirectly, on a fully diluted
basis, of securities representing 49% or more of the voting power of
Borrower's then outstanding securities having the power to vote or 49% or
more of Borrower's then outstanding capital stock, or (ii) to acquire the
power to elect a majority of the Board of Directors of Borrower.
15.12. AMENDMENT TO CHARTER DOCUMENTS. Amend, modify, supplement, restate,
replace, or change any of its Charter Documents, except to the extent such
change could not reasonably be expected to adversely affect Administrative
Agent or any Lender.
15.13. CAPITAL STRUCTURE; EQUITY SECURITIES. Make any change in capital
structure which has or is reasonably likely to have a Material Adverse
Effect; or issue or create any stock, membership interest, or other equity
interest (or class or series thereof, or non-equity interest that is
convertible into stock, membership interests or other equity interest (or
class or series thereof), in any Covered Person, except stock, membership
interests, or other equity interests (or class or series thereof) that are
subordinated in right of payment to all the Loan Obligations.
15.14. CHANGE OF BUSINESS. Engage in any business other than substantially
as conducted on the Effective Date.
15.15. TRANSACTIONS WITH AFFILIATES. Enter into or be a party to any
transaction or arrangement, including the purchase, sale or exchange of
property of any kind or the rendering of any service, with any Affiliate
other than a Covered Person, or make any loans or advances to any Affiliate
other than a Covered Person, except that each Covered Person may engage in
such transactions in the ordinary course of business and pursuant to the
reasonable requirements of its business and on fair and reasonable terms
substantially as favorable to it as those which it could obtain in a
comparable arm's-length transaction with a non-Affiliate. No Covered Person
may pay any management or other fees to any Affiliate that is not a Covered
Person; provided, however, that no such management fees may be paid while
there is an Existing Default, and any such management fees which are not
paid when due as a result of this sentence may be subsequently paid only at
such time
60
as (i) there is no Existing Default, and (ii) the payment of such
management fee would not cause a Default to occur or result in a Default.
15.16. CONFLICTING AGREEMENTS. Enter into any agreement, that would, if
fully complied with by it, result in a Default or Event of Default either
immediately or upon the elapsing of time.
15.17. SALE AND LEASEBACK TRANSACTIONS. Enter into any agreement or
arrangement with any Person providing for any Covered Person to lease or
rent property that Borrower has or will sell or otherwise transfer to such
Person.
15.18. NEW SUBSIDIARIES. Organize, create or acquire any Subsidiary unless
it is part of a Permitted Acquisition or Borrower has obtained the prior
written consent of Administrative Agent thereto (which consent shall not be
unreasonably withheld) and contemporaneously with the organization,
creation or acquisition of such Subsidiary, the applicable Covered Person
and such Subsidiary executes and delivers to Administrative Agent for the
benefit of Lenders the following additional documents: an unlimited
guaranty of the Loan Obligations by such Subsidiary, a pledge of the
capital stock or membership interests of such Covered Person in such
Subsidiary, and other Security Documents requested by Administrative Agent
so as to grant Administrative Agent, for the benefit of the Lenders, a
perfected, first priority security interest in all real and personal
property of such Subsidiary subject to Permitted Security Interests,
together with an opinion letter from counsel for such Subsidiary. Such
counsel shall be acceptable to Administrative Agent and such opinion letter
shall be substantially similar to the opinion letter(s) received on the
Effective Date.
15.19. FISCAL YEAR. Change its fiscal year (currently April 1 -March 31),
without the prior written consent of Administrative Agent, which consent
shall not be unreasonably withheld.
15.20. LEASES. Enter into any Capital Leases except as permitted by Section
16.2 and Section 15.2.
15.21. TRANSACTIONS HAVING A MATERIAL ADVERSE EFFECT ON COVERED PERSON.
Enter into any transaction which has or is reasonably likely to have a
Material Adverse Effect on any Covered Person; or enter into any
transaction, or take or contemplate taking any other action, or omit or
contemplate omitting to take any action, which any Responsible Officer
knows, or reasonably should know is likely to cause a Default or Event of
Default hereunder.
61
16. FINANCIAL COVENANTS.
16.1. SPECIAL DEFINITIONS. As used in this Section 16 and elsewhere herein,
the following capitalized terms have the following meanings:
EBITDA means, with respect to any fiscal period of Borrower, the
consolidated net income of Borrower and each Covered Person for such fiscal
period, as determined in accordance with GAAP and reported on the Financial
Statements for such period, plus (i) (A) Interest Expense in such period,
(B) income tax expense in such period, (C) amortization of good will and
depreciation expense taken in such period, and (D) any extraordinary loss
in such period, minus (ii) any extraordinary gain in such period.
Interest Expense means for any period of calculation, all interest, whether
paid in cash or accrued as a liability, but without duplication, on
Indebtedness of Borrower and each Covered Person during such period.
Fixed Charges means, for any period of calculation, the sum of (i) Interest
Expense, (ii) the sum of all scheduled principal payments on long term
Indebtedness of Borrower (including the Term Loan), (iii) federal, state
and local income taxes payable, and (iv) Capital Expenditures (excluding
permitted expenditures for Permitted Acquisitions and excluding capital
expenditures financed by Indebtedness on which interest is owed), (v)
Distributions, (vi) management fees or other fees paid by Borrower to any
Affiliate of a Covered Person which is not a Covered Person or any other
Person which is not a Covered Person, and (vii) any acquisition or
redemption of any outstanding stock, membership interests or other equity
interest.
Senior Indebtedness means the outstanding balance of the Loan Obligations
at the time of calculation.
Total Indebtedness means the sum of Senior Indebtedness and the unamortized
capitalized amount of all Capital Leases.
All other capitalized terms used in this Section 16 shall have their
meanings and shall be determined under GAAP.
16.2. CAPITAL EXPENDITURES. Borrower shall not make Capital Expenditures
(exclusive of Permitted Acquisitions) in excess of $13,000,000.00 in the
aggregate annually for any of the fiscal years ending 3/31/03, 3/31/04 and
on the Maturity Date:
16.3. MINIMUM FIXED CHARGE COVERAGE. The ratio of Borrower's EBITDA to
Fixed Charges for each Trailing Period specified below, calculated as of
the last day of each such period (as set forth below), shall not be less
than the ratio specified for such period:
62
========================================= ================================= ==============================
Trailing Period Last Day of Period Minimum Fixed Charge
Coverage Ratio
----------------------------------------- --------------------------------- ------------------------------
One (1) fiscal quarter 6/30/02 1.10 to 1
----------------------------------------- --------------------------------- ------------------------------
Two (2) fiscal quarters 9/30/02 1.10 to 1
----------------------------------------- --------------------------------- ------------------------------
Three (3) fiscal quarters 12/31/02 1.10 to 1
----------------------------------------- --------------------------------- ------------------------------
Four (4) Fiscal quarters 3/31/03 and the last day of 1.10 to 1
each successive quarter
thereafter
========================================= ================================= ==============================
16.4. MAXIMUM RATIO OF TOTAL INDEBTEDNESS TO EBITDA. The ratio of
Borrower's Total Indebtedness to EBITDA for each fiscal period specified
below, calculated as of the last day of each such period, shall not be
greater than the ratio specified for such period:
===================================================== ====================================================
Period Maximum Ratio of Total Indebtedness to EBITDA*
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 6/30/02 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 9/30/02 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 12/31/02 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 3/31/03 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 6/30/03 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 9/30/03 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 12/31/03 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 3/31/04 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 6/30/04 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 9/30/04 2.0 to 1
----------------------------------------------------- ----------------------------------------------------
Fiscal Quarter ending 12/31/04 2.0 to 1
===================================================== ====================================================
*For purposes of this Section 16.4, EBITDA shall be determined based on a
trailing twelve month basis, with the following adjustments for the first three
fiscal quarters after the Effective Date: EBITDA shall be determined on an
actual consolidated trailing twelve month basis, plus $1,875,000 for the fiscal
quarter ending 6/30/02, $1,254,000 for the fiscal quarter ending 9/30/02 and
$625,000 for the fiscal quarter ending 12/31/02.
16.5. MINIMUM NET WORTH. Borrower's Net Worth shall at no time during any
fiscal period specified in the table below be less than the amount
specified for such period:
63
================================================== ======================================================
Period Minimum Net Worth
-------------------------------------------------- ------------------------------------------------------
The end of each fiscal quarter $110,000,000.00 plus 50% of cumulative quarterly net
income after the Effective Date, with no deduction
for any quarterly loss, plus 100% of net cash
proceeds from the issuance of equity securities
after the Effective Date.
================================================== ======================================================
16.6. MINIMUM EBITDA. Borrower's EBITDA, for each fiscal period specified
below, calculated as of the last day of such fiscal period for the four
quarter period then ended, shall at no time be less than the amount
specified for such period:
================================================== ======================================================
Period Minimum EBITDA*
($000 omitted)
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 6/30/02 $24,500
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 9/30/02 28,000
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 12/31/02 31,500
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 3/31/03 35,000
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 6/30/03 35,000
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 9/30/03 35,000
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 12/31/03 35,000
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 3/31/04 35,000
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 6/30/04 35,000
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 9/30/04 35,000
-------------------------------------------------- ------------------------------------------------------
Fiscal Quarter ending 12/31/04 35,000
================================================== ======================================================
*For purposes of this Section 16.6, EBITDA shall be determined based on
a trailing twelve month basis, with the following adjustments for the
first three fiscal quarters after the Effective Date: EBITDA shall be
determined on an actual consolidated trailing twelve month basis, plus
$1,875,000 for the fiscal quarter ending 6/30/02, $1,254,000 for the
fiscal quarter ending 9/30/02 and $625,000 for the fiscal quarter
ending 12/31/02.
17. DEFAULT.
17.1. EVENTS OF DEFAULT. Any one or more of the following shall constitute
an event of default (an Event of Default) under this Agreement:
17.1.1. FAILURE TO PAY PRINCIPAL OR INTEREST. Failure of Borrower to
pay any principal of the Loans or interest accrued thereon when due or
within two (2) days thereafter, or failure of Borrower to pay any of
the other Loan Obligations when due, or within two (2) days
thereafter.
64
17.1.2. FAILURE TO PAY AMOUNTS OWED TO OTHER PERSONS. Failure of any
Covered Person to make any payment due on Indebtedness of such Covered
Person over $200,000.00 to Persons (other than Lenders under the Loan
Documents) which continues uncured or unwaived beyond any applicable
grace period specified in the documents evidencing such Indebtedness.
17.1.3. REPRESENTATIONS OR WARRANTIES. Any of the Representations and
Warranties is discovered to have been false in any material respect
when made.
17.1.4. CERTAIN COVENANTS. Failure of any Covered Person to comply
with the covenants in Sections 14.1, 14.5, 14.9, 14.10, 14.14, 14.20,
14.23, 14.24, 14.25, 14.26, 15, or 16.
65
17.1.5. OTHER COVENANTS. Failure of any Covered Person to comply with
of any of the terms or provisions of any of the Loan Documents
applicable to it (other than a failure which constitutes an immediate
Event of Default under, or for which some other grace period is
specified in any other Section of this 17.1) which is not remedied or
waived in writing by Administrative Agent within 30 days after a
Responsible Officer becoming aware of such failure.
17.1.6. ACCELERATION OF OTHER INDEBTEDNESS. Any Obligation (other than
a Loan Obligation) of a Covered Person for the repayment of
$200,000.00 or more of borrowed money becomes or is declared to be due
and payable or required to be prepaid (other than by an originally
scheduled prepayment) prior to the original maturity thereof.
17.1.7. DEFAULT UNDER OTHER AGREEMENTS. The occurrence of any default
or event of default under any agreement to which a Covered Person is a
party (other than the Loan Documents), which default or event of
default continues uncured or unwaived beyond any applicable grace
period provided therein and has or is reasonably likely to have a
Material Adverse Effect.
17.1.8. BANKRUPTCY; INSOLVENCY; ETC. A Covered Person (i) fails to
pay, or admits in writing its inability to pay, its debts generally as
they become due, or otherwise becomes insolvent (however evidenced);
(ii) makes an assignment for the benefit of creditors; (iii) files a
petition in bankruptcy, is adjudicated insolvent or bankrupt,
petitions or applies to any tribunal for any receiver or any trustee
of
66
such Covered Person or any substantial part of its property; (iv)
commences any proceeding relating to such Covered Person under any
reorganization, arrangement, readjustment of debt, dissolution or
liquidation Law of any jurisdiction, whether now or hereafter in
effect; (v) has commenced against it any such proceeding which remains
undismissed for a period of 60 days, or by any act indicates its
consent to, approval of, or acquiescence in any such proceeding or the
appointment of any receiver of or any trustee for it or of any
substantial part of its property, or allows any such receivership or
trusteeship to continue undischarged for a period of 60 days; or (vi)
takes any action to authorize any of the foregoing.
17.1.9. JUDGMENTS; ATTACHMENT; SETTLEMENT; ETC. Any one or more
judgments or orders is entered against a Covered Person or any
attachment or other levy is made against the property of a Covered
Person with respect to a claim or claims involving in the aggregate
liabilities (not paid or fully covered by insurance, less the amount
of reasonable deductibles in effect on the Execution Date) in excess
of $200,000.00 and such judgment or order becomes final and
non-appealable or if timely appealed is not fully bonded and
collection thereof stayed pending the appeal.
17.1.10. PENSION BENEFIT PLAN TERMINATION, ETC. Any Pension Benefit
Plan termination by the PBGC or the appointment by the appropriate
United States District Court of a trustee to administer any Pension
Benefit Plan or to liquidate any Pension Benefit Plan; or any event
which constitutes grounds either for the termination of any Pension
Benefit Plan by PBGC or for the appointment by the appropriate United
States District Court of a trustee to administer or liquidate any
Pension Benefit Plan shall have occurred and be continuing for thirty
(30) days after Borrower has notice of any such event; or any
voluntary termination of any Pension Benefit Plan which is a DEFINED
BENEFIT PENSION PLAN as defined in Section 3(35) of ERISA while such
defined benefit pension plan has an ACCUMULATED FUNDING DEFICIENCY,
unless Administrative Agent has been notified of such intent to
voluntarily terminate such plan and Required Lenders have given their
consent and agreed that such event shall not constitute a Default; or
the plan administrator of any Pension Benefit Plan applies under
Section 412(d) of the Code for a waiver of the minimum funding
standards of Section 412(1) of the Code and Required Lenders determine
that the substantial business hardship upon which the application for
such waiver is based could subject any Covered Person or ERISA
Affiliate of any Covered Person to a liability in excess of
$200,000.00.
17.1.11. LIQUIDATION OR DISSOLUTION. A Covered Person files a
certificate of dissolution under applicable state Law or is liquidated
or dissolved or suspends or terminates the operation of its business,
or has commenced against it any action or proceeding for its
liquidation or dissolution or the winding up of its business, or takes
any corporate action in furtherance thereof, except in connection with
the
67
consolidation of such a Covered Person and its assets with another
Covered Person and its assets.
17.1.12. SEIZURE OF ASSETS. All or any material part of the property
of any Covered Person is nationalized, expropriated, seized or
otherwise appropriated, or custody or control of such property or of
any Covered Person shall be assumed by any Governmental Authority or
any court of competent jurisdiction at the instance of any
Governmental Authority, unless the same is being contested in good
faith by proper proceedings diligently pursued and a stay of
enforcement is in effect.
17.1.13. RACKETEERING PROCEEDING. There is filed against any Covered
Person any civil or criminal action, suit or proceeding under any
federal or state racketeering statute (including, without limitation,
the Racketeer Influenced and Corrupt Organization Act of 1970), which
action, suit or proceeding is not dismissed within 120 days and could
result in the confiscation or forfeiture of any material portion of
the Collateral.
17.1.14. LOAN DOCUMENTS; SECURITY INTERESTS. For any reason other than
the failure of Administrative Agent to take any action available to it
to maintain perfection of the Security Interests created in favor of
Administrative Agent for the benefit of Lenders pursuant to the Loan
Documents, any Loan Document ceases to be in full force and effect or
any Security Interest with respect to any portion of the Collateral
intended to be secured thereby ceases to be, or is not, valid,
perfected and prior to all other Security Interests (other than the
Permitted Security Interests) or is terminated, revoked or declared
void or invalid.
17.1.15. LOSS TO COLLATERAL. Any loss, theft, damage or destruction of
any item or items of Collateral occurs which either (i) has or is
reasonably likely to have a Material Adverse Effect on any other
Covered Person or (ii) materially and adversely affects the operation
of Borrower's business and is not covered by insurance as required
herein.
17.1.16. GUARANTY; GUARANTOR. Any Guaranty ceases to be in full force
and effect or any action is taken to discontinue or assert the
invalidity or unenforceability of any Guaranty or any Guarantor fails
to comply with any of the terms or provisions of any Guaranty, or any
representation or warranty of any Guarantor therein is false in any
material respects, or any Guarantor denies that it has any further
liability under any Guaranty or gives notice to Lender to such effect,
or any Guarantor fails to furnish the financial statements required
under any Guaranty.
17.2. CROSS DEFAULT. An Event of Default under this Agreement will
automatically and immediately constitute a default under all other Loan
Documents without regard to any requirement therein for the giving of
notice or the passing of time.
17.3. RIGHTS AND REMEDIES.
68
17.3.1. TERMINATION OF COMMITMENTS. Upon an Event of Default described
in Section 17.1.8, the Commitments shall be deemed canceled. Upon any
other Event of Default, and at any time thereafter, Required Lenders
may cancel the Commitments. Such cancellation may be, in either case,
without presentment, demand or notice of any kind, which Borrower
expressly waives.
17.3.2. ACCELERATION. Upon an Event of Default described in Section
17.1.8, all of the outstanding Loan Obligations shall automatically
become immediately due and payable. Upon any other Event of Default,
and at any time thereafter, Required Lenders may declare all of the
outstanding Loan Obligations immediately due and payable. Such
acceleration may be, in either case, without presentment, demand or
notice of any kind, which Borrower expressly waives.
17.3.3. RIGHT OF SETOFF. So long as there is any Event of Default in
existence, each Lender is hereby authorized, without notice to
Borrower (any such notice being expressly waived by Borrower), to the
fullest extent permitted by law, to set off and apply against the Loan
Obligations any and all deposits (general or
69
special, time or demand, provisional or final) at any time held, or
any other Indebtedness at any time owing by such Lender (or its
Affiliate) to or for the credit or the account of Borrower,
irrespective of whether or not such Lender shall have made any demand
under this Agreement or the Notes or any Guaranty and although such
Loan Obligations may be unmatured. The rights of each Lender under
this Section are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which such Lender may
otherwise have. All amounts received by each Lender on account of the
Loan Obligations pursuant to this Section shall be paid over promptly
to Administrative Agent for distribution to Lenders as provided in
this Agreement and shall be applied as provided in this Agreement.
17.3.4. NOTICE TO ACCOUNT DEBTORS. Upon the occurrence of any Event of
Default and at any time and from time to time thereafter so long as
such Event of Default is continuing, Administrative Agent may (if
Required Lenders concur), without prior notice to Borrower, notify any
or all Account Debtors that the Accounts have been assigned to
Administrative Agent for the benefit of Lenders and that
Administrative Agent has a Security Interest therein for the benefit
of Lenders, and Administrative Agent may direct, or Borrower, at
Administrative Agent's request, shall direct, any or all Account
Debtors to make all payments upon the Accounts directly to
Administrative Agent for the benefit of Lenders.
17.3.5. ENTRY UPON PREMISES AND ACCESS TO INFORMATION. Upon the
occurrence of an Event of Default and acceleration of the Loan
Obligations as provided herein, and at any time thereafter:
Administrative Agent may (i) enter upon the premises leased or owned
by Borrower where Collateral is located (or is believed to be located)
without any obligation to pay rent to Borrower, or any other place or
places where Collateral is believed to be located, (ii) render
Collateral usable or saleable, (iii) remove Collateral therefrom to
the premises of Administrative Agent or any agent of Administrative
Agent for such time as Administrative Agent may desire in order
effectively to collect or liquidate Collateral, (iv) take possession
of, and make copies and abstracts of, Borrower's original books and
records, obtain access to Borrower's data processing equipment,
computer hardware and software relating to any of the Collateral and
use all of the foregoing and the information contained therein in any
manner Administrative Agent deems appropriate in connection with the
exercise of Administrative Agent's rights, and (v) notify postal
authorities to change the address for delivery of Borrower's mail to
an address designated by Administrative Agent and to receive, open and
process all mail addressed to Borrower.
17.3.6. COMPLETION OF UNCOMPLETED INVENTORY ITEMS. Upon the occurrence
of an Event of Default and at any time and from time to time
thereafter so long as an Event of Default is continuing,
Administrative Agent may request that Borrower, and Borrower shall
upon such request, use Borrower's best efforts to obtain the consent
of its and any other Covered Person's customers to the completion
(before
70
or after foreclosure by Administrative Agent of its security interest
therein) of the manufacture of all uncompleted Inventory items that
Borrower or any other Covered Person was manufacturing for such
customers pursuant to contracts or accepted purchase orders, and the
commitment by such customers to purchase such items upon their
completion as provided in the relevant contracts or accepted purchase
orders. Borrower shall, as an uncompensated agent for Lenders,
complete or cause to be completed the manufacture and shipment of all
such items as provided in the relevant contracts or accepted purchase
orders if Administrative Agent so directs.
17.3.7. BORROWER'S OBLIGATIONS. Upon the occurrence of an Event of
Default and during its continuance, Borrower shall, if Administrative
Agent so requests, assemble all the movable tangible Collateral and
make it available to Administrative Agent at a place or places to be
designated by Administrative Agent in its discretion.
17.3.8. SECURED PARTY RIGHTS. Upon an Event of Default and
acceleration of the Loan Obligations as provided herein, and at any
time and from time to time thereafter:
17.3.8.1. Administrative Agent may exercise any or all of its
rights under the Security Documents as a secured party under
the UCC and any other applicable Law; and
17.3.8.2. Administrative Agent may sell or otherwise dispose
of any or all of the Collateral at public or private sale in a
commercially reasonable manner, which sale Administrative
Agent may postpone from time to time by announcement at the
time and place of sale stated in the notice of sale or by
announcement at any adjourned sale without being required to
give a new notice of sale, all as Administrative Agent deems
advisable, for cash or credit. Administrative Agent or any
Lender may become the purchaser at any such sale if
permissible under applicable Law, and such Lender may, in lieu
of actual payment of the purchase price, setoff the amount
thereof against Borrower's obligations owing to Lender, and
Borrower agrees that such Lender has no obligation to preserve
rights to Collateral against prior parties or to marshal any
Collateral for the benefit of any Person.
In connection with and for the sole purpose of the advertising for
sale, further manufacture, selling, or otherwise realizing upon any of
the Collateral securing the obligations of Borrower to Lender, to the
extent Administrative Agent has not foreclosed upon its Security
Interest in the following, Administrative Agent may use and is hereby
granted a license to use, without charge or liability to
Administrative Agent or Lenders therefor, any of Borrower's or any
other Covered Person's labels, trade names, trademarks, trade secrets,
service marks,
71
patents, patent applications, licenses, certificates of authority,
advertising materials, or any of Borrower's or any other Covered
Person's other properties or interests in properties of similar
nature, to the extent that such use thereof is not prohibited by
agreements under which Borrower or such other Covered Person has
rights therein, and all of Borrower's rights under license, franchise
and similar agreements shall inure to Lenders' benefit.
17.3.9. JOINT AND SEVERAL. Each Obligation and liability to the Letter
of Credit Issuer, Administrative Agent and each Lender of Borrower,
including, without limitation, the Loan Obligations, are the joint and
several obligations of Borrower, and each Guarantor and Administrative
Agent may proceed directly against Borrower, any Guarantor, all of the
foregoing, or any one of the foregoing or any combination of the
foregoing, without first proceeding against Borrower, or without
joining all Persons liable or potentially liable for any portion of
the Loan Obligations in one action.
17.3.10. MISCELLANEOUS. Upon the occurrence of an Event of Default and
at any time thereafter so long as such Event of Default is continuing,
Lenders may exercise any other rights and remedies available to
Lenders under the Loan Documents or otherwise available to Lenders at
law or in equity.
17.4. APPLICATION OF FUNDS. Any funds received by Lenders or Administrative
Agent for the benefit of Lenders with respect to any Loan Obligation after
its Maturity, including proceeds of Collateral, shall be applied as
follows: (i) first, to reimburse Lenders pro-rata for any amounts due to
Lenders under Section 20.8; (ii) second, to reimburse to Administrative
Agent all unreimbursed costs and expenses paid or incurred by
Administrative Agent that are payable or reimbursable by Borrower
hereunder; (iii) third, to reimburse to Lenders pro-rata all unreimbursed
costs and expenses paid or incurred by Lenders (including costs and
expenses incurred by Administrative Agent as a Lender that are not
reimbursable as provided in the preceding clause) that are payable or
reimbursable by Borrower hereunder; (iv) fourth, to the payment of accrued
and unpaid fees due hereunder and all other amounts due hereunder (other
than the Loans and interest accrued thereon); (v) fifth, to the payment of
the Loans of each of the Lenders and interest accrued thereon (which
payments shall be pro rata to each of the Lenders in accordance with the
amount of the Loans outstanding) and to the payment (pari passu with the
foregoing) of any Interest Hedge Obligations (vi) sixth, to Letter of
Credit Issuer as cash collateral for the Letter of Credit Exposure; and
(vii) seventh, to the payment of the other Loan Obligations. Any remaining
amounts shall be applied to payment of all the Obligations to
Administrative Agent. Any further remaining amounts shall be paid to
Borrower or such other Persons as shall be legally entitled thereto. Except
as expressly provided otherwise herein, Lenders may apply and reverse and
reapply, payments and proceeds of the Collateral to the Loan Obligations in
such order and manner as Lenders determine in their absolute discretion.
Borrower hereby irrevocably waives the right to direct the application of
payments and proceeds of the Collateral.
72
17.5. LIMITATION OF LIABILITY; WAIVER. Administrative Agent and Lenders
shall not be liable to Borrower as a result of any commercially reasonable
possession, repossession, collection or sale by Administrative Agent of
Collateral; and Borrower hereby waives all rights of redemption from any
such sale and the benefit of all valuation, appraisal and exemption Laws.
If Administrative Agent seeks to take possession of any of the Collateral
by replevin or other court process, Borrower hereby irrevocably waives (i)
the posting of any bonds, surety and security relating thereto required by
any statute, court rule or otherwise as an incident to such possession,
(ii) any demand for possession of the Collateral prior to the commencement
of any suit or action to recover possession thereof, (iii) any requirement
that Administrative Agent retain possession and not dispose of any
Collateral until after trial or final judgment, and (iv) to the extent
permitted by applicable Law, all rights to notice and hearing prior to the
exercise by Administrative Agent of Administrative Agent's right to
repossess the Collateral without judicial process or to replevy, attach or
levy upon the Collateral without notice or hearing. Administrative Agent
shall have no obligation to preserve rights to the Collateral or to
xxxxxxxx any Collateral for the benefit of any Person.
17.6. NOTICE. Any notice of intended action required to be given by
Administrative Agent (including notice of a public or private sale of
Collateral), if given as provided in Section 21.1 at least 10 days prior to
such proposed action, shall be effective and constitute reasonable and fair
notice to Borrower.
18. ADMINISTRATIVE AGENT AND LENDERS.
18.1. APPOINTMENT, POWERS, AND IMMUNITIES. LaSalle is hereby appointed
Administrative Agent hereunder and under each of the other Loan Documents.
Each Lender hereby irrevocably appoints and authorizes Administrative Agent
to act as its agent under this Agreement and the other Loan Documents with
such powers and discretion as are specifically delegated to Administrative
Agent by the terms of this Agreement and the other Loan Documents, together
with such other powers as are reasonably incidental thereto. Administrative
Agent (which term as used in this sentence and in Section 18.5 and the
first sentence of Section 18.6 hereof shall include its affiliates and its
own and its affiliates' officers, directors, employees, and agents): (a)
shall not have any duties or responsibilities except those expressly set
forth in this Agreement and shall not be a trustee or fiduciary for any
Lender; (b) shall not be responsible to the Lenders for any recital,
statement, representation, or warranty (whether written or oral) made in or
in connection with any Loan Document or any certificate or other document
referred to or provided for in, or received by any of them under, any Loan
Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Loan Document, or any other document
referred to or provided for therein or for any failure by any Covered
Person or any other Person to perform any of its obligations thereunder or
the validity or priority of any Security Interest in any Collateral; (c)
shall not be responsible for or have any duty to ascertain, inquire into,
or verify the performance or observance of any covenants or agreements by
any Covered Person or the satisfaction of any condition or to inspect the
property (including the books and records) of any Covered Person or any of
its Subsidiaries or affiliates; (d) shall not be required to initiate or
conduct any litigation or collection proceedings under any Loan Document;
and (e) shall not be responsible for any action taken or omitted to be
taken by it under or in connection with any Loan Document, except for its
own gross negligence or willful misconduct. Administrative Agent may employ
agents and attorneys-in-fact and shall not be responsible for the
negligence or misconduct of any such agents or attorneys-in-fact selected
by it with reasonable care.
73
18.2. RELIANCE BY ADMINISTRATIVE AGENT. Administrative Agent shall be
entitled to rely upon any certification, notice, instrument, writing, or
other communication (including, without limitation, any thereof by
telephone or telecopy) believed by it to be genuine and correct and to have
been signed, sent or made by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel (including counsel for any
Covered Person), independent accountants, and other experts selected by
Administrative Agent. Administrative Agent may deem and treat the payee of
any Note as the holder thereof for all purposes hereof unless and until
Administrative Agent receives and accepts an Assignment and Acceptance
executed in accordance with Section 20.4 hereof. As to any matters not
expressly provided for by this Agreement, Administrative Agent shall not be
required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in
so acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions shall be binding on all of the Lenders;
provided, however, that Administrative Agent shall not be required to take
any action that exposes Administrative Agent to personal liability or that
is contrary to any Loan Document or applicable law or unless it shall first
be indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking any
such action.
18.3. EMPLOYMENT OF AGENTS AND COUNSEL. Administrative Agent may execute
any of its duties hereunder by or through employees, agents, and
attorneys-in-fact and shall not be liable to any Lender, except with
respect to money or securities received by it or such agents or
attorneys-in-fact, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Administrative Agent
shall be entitled to advice of counsel concerning all matters pertaining to
the agency hereby created and its duties hereunder and shall not be liable
to any Lender for acting or failing to act as advised by such counsel,
except where doing so violates an express obligation of Administrative
Agent under the Loan Documents.
18.4. DEFAULTS. Administrative Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default unless
Administrative Agent has received written notice from a Lender or the
Borrower specifying such Default or Event of Default and stating that such
notice is a Notice of Default. In the event that Administrative Agent
receives such a notice of the occurrence of a Default or Event of Default,
Administrative Agent shall give notice thereof to the Lenders.
Administrative Agent shall (subject to Section 18.2 hereof) take such
action with respect to such Default or Event of Default as shall reasonably
be directed by the Required Lenders, provided that, unless and until
Administrative Agent shall have received such directions, Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it
shall deem advisable in the best interest of the Lenders.
74
18.5. RIGHTS AS LENDER. With respect to its Commitment and the Loans made
by it, LaSalle (and any successor acting as Administrative Agent) in its
capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were
not acting as Administrative Agent, and the term Lender or Lenders shall,
unless the context otherwise indicates, include Administrative Agent in its
individual capacity. LaSalle (and any successor acting as Administrative
Agent) and its affiliates may (without having to account therefor to any
Lender) accept deposits from, lend money to, make investments in, provide
services to, and generally engage in any kind of lending, trust, or other
business with any Covered Person or any of its Subsidiaries or Affiliates
as if it were not acting as Administrative Agent, and LaSalle (and any
successor acting as Administrative Agent) and its Affiliates may accept
fees and other consideration from any Covered Person or any of its
Subsidiaries or Affiliates for services in connection with this Agreement
or otherwise without having to account for the same to Lenders. The Lenders
acknowledge that, pursuant to such activities, Administrative Agent or its
Affiliates may receive information regarding Borrower or its Affiliates
(including information that may be subject to confidentiality obligations
in favor of Borrower or such Affiliates) and acknowledge that
Administrative Agent shall be under no obligation to provide such
information to the Lenders.
18.6. INDEMNIFICATION. Whether or not the transactions contemplated hereby
are consummated, Lenders agree to reimburse and indemnify Administrative
Agent upon demand (to the extent not reimbursed under Section 20.7, but
without limiting the obligations of Borrower under Section 20.7) ratably in
accordance with their respective Commitments, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including attorneys' fees), or disbursements of any kind and
nature whatsoever that may be imposed on, incurred by or asserted against
Administrative Agent (including by any Lender) in any way relating to or
arising out of any Loan Document or the transactions contemplated thereby
or any action taken or omitted by Administrative Agent under any Loan
Document; provided that no Lender shall be liable for any of the foregoing
to the extent they arise from the gross negligence or willful misconduct of
the Person to be indemnified. Without limitation of the foregoing, each
Lender agrees to reimburse Administrative Agent promptly upon demand for
its ratable share of any costs or expenses payable by Borrower under
Section 20.7, to the extent that Administrative Agent is not promptly
reimbursed for such costs and expenses by Borrower. The agreements
contained in this Section shall survive payment in full of the Loans and
all other amounts payable under this Agreement.
75
18.7. NOTIFICATION OF LENDERS. Each Lender agrees to use its good faith
efforts, upon becoming aware of anything which has or is reasonably likely
to have a Material Adverse Effect on any Covered Person, to promptly notify
Administrative Agent thereof. Administrative Agent shall promptly deliver
to each Lender copies of every written notice, demand, report (including
any financial report), or other writing which Administrative Agent gives to
or receives from Borrower and which itself (a) constitutes, or which
contains information about, something that has or is reasonably likely to
have a Material Adverse Effect on any Covered Person, or (b) is otherwise
delivered to Administrative Agent by Borrower pursuant to the Loan
Documents and is deemed material information by Administrative Agent in its
sole discretion. Administrative Agent and its directors, officers, agents,
and employees shall have no liability to any Lender for failure to deliver
any such item to such Lender unless the failure constitutes gross
negligence or willful misconduct.
18.8. NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender acknowledges
that Administrative Agent has not made any representation or warranty to
it, and that no act by the Administrative Agent hereafter taken, including
any review of the affairs of Borrower and its Affiliates, shall be deemed
to constitute any representation or warranty by Administrative Agent to any
Lender. Each Lender agrees that it has, independently and without reliance
on Administrative Agent or any other Lender, and based on such documents
and information as it has deemed appropriate, made its own credit analysis
of the Covered Persons and their Subsidiaries and decision to enter into
this Agreement and that it will, independently and without reliance upon
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 analysis and decisions in taking or not taking action under the Loan
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to Lenders by Administrative Agent
hereunder, Administrative Agent shall not have any duty or responsibility
to provide any Lender with any credit or other information concerning the
affairs, financial condition, or business of any Covered Person or any of
its Subsidiaries or Affiliates that may come into the possession of
Administrative Agent or any of its Affiliates.
18.9. RESIGNATION. Administrative Agent may resign at any time by giving
notice thereof to the Lenders and Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, which shall be a commercial bank organized under the laws of the
United States of America having a combined capital and surplus of at least
$1,000,000,000.00. If no successor
76
Administrative Agent shall have been so
appointed by the Required 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 commercial bank organized under the laws of the United States of
America having combined capital and surplus of at least $1,000,000,000.00.
Upon the acceptance of any appointment as Administrative Agent hereunder by
a successor, such successor shall thereupon succeed to and become vested
with all the rights, powers, discretion, privileges, and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall
be discharged from its duties and obligations hereunder. If no successor
has accepted appointment as Administrative Agent within thirty (30) days
after the date on which Administrative Agent first attempts to appoint a
successor Administrative Agent, the resigning Administrative Agent's
resignation shall nevertheless thereupon become effective and the Lenders
shall perform all of the duties of the Administrative Agent hereunder until
such time, if any, as the Required Lenders appoint a successor which
accepts such appointment. After any retiring Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this
Section 18.9 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.
18.10. COLLECTIONS AND DISTRIBUTIONS TO LENDERS BY ADMINISTRATIVE AGENT.
Except as otherwise provided in this Agreement, all payments of interest,
fees, principal and other amounts received by Administrative Agent for the
account of Lenders shall be distributed by Administrative Agent to Lenders
in accordance with their pro-rata shares of the outstanding Loan
Obligations at the time of such distribution on the same Business Day when
received, unless received after 1:00 p.m. (Local Time) in which case they
shall be so distributed by 1:00 p.m. (Local Time) on the next Business Day.
All amounts received by any Lender on account of the Loan Obligations,
including amounts received by way of setoff, shall be paid over promptly to
Administrative Agent for distribution to Lenders as provided above in this
Section. Such distributions shall be made according to instructions that
each Lender may give to Administrative Agent from time to time.
19. CHANGE IN CIRCUMSTANCES.
19.1. COMPENSATION FOR INCREASED COSTS AND REDUCED RETURNS.
19.1.1. LAW CHANGES OR TAX IMPOSITIONS. If, after the Effective Date,
the adoption of any applicable Law or any change in any applicable Law
or any change in the interpretation or administration thereof by any
Governmental Authority charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable
Lending Office) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank, or
comparable agency:
77
(i) subjects such Lender (or its Applicable Lending Office) to any Tax
with respect to any Eurodollar Loans or its obligation to make
Eurodollar Loans, or change the basis of taxation of any amounts
payable to such Lender (or its Applicable Lending Office) under this
Agreement in respect of any Eurodollar Loans (other than Taxes imposed
on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal office or such Applicable Lending
Office);
(ii) imposes, modifies, or deems applicable any reserve, special
deposit, assessment or similar requirement (other than the reserve
requirement utilized in the determination of the Eurodollar Rate)
relating to any extensions of credit or other assets of, or any
deposits with or other liabilities or commitments of, such Lender (or
its Applicable Lending Office), including the Commitment of such
Lender hereunder; or
(iii) imposes on such Lender (or its Applicable Lending Office) or on
the United States market for certificates of deposit or the London
Interbank market any other condition affecting this Agreement, its
Commitments or its Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, converting into,
continuing, or maintaining any Loans or to reduce any sum received or
receivable by such Lender (or its Applicable Lending Office) under
this Agreement or any of its Notes with respect to any Loans, then
Borrower shall pay to such Lender on demand such amount or amounts as
will compensate such Lender for such increased cost or reduction. If
any Lender requests compensation by Borrower under this Section
19.1.1, Borrower may, by notice to such Lender (with a copy to
Administrative Agent), suspend the obligation of such Lender to make
or continue Loans of the type with respect to which such compensation
is requested, or to convert Loans of any other type into Loans of such
type, until the event or condition giving rise to such request ceases
to be in effect (in which case the provisions of Section 19.5 shall be
applicable); provided, however, that such suspension shall not affect
the right of such Lender to receive the compensation so requested.
78
19.1.2. CAPITAL ADEQUACY. If, after the Effective Date, any Lender
shall have determined that the adoption of any applicable Law
regarding capital adequacy or any change therein or in the
interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of
any such governmental authority, central bank, or comparable agency,
has or would have the effect of reducing the rate of return on the
capital of such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder to a level below
that which such Lender or such corporation could have achieved but for
such adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy), then
from time to time upon demand Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender for such
reduction.
19.1.3. NOTICE TO BORROWER. Each Lender shall promptly notify Borrower
and Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to
compensation pursuant to this Section 19.1 and will designate a
different Applicable Lending Office if such designation will avoid the
need for, or reduce the amount of, such compensation and will not, in
the judgment of such Lender, be otherwise disadvantageous to it. Any
Lender claiming compensation under this Section 19.1 shall furnish to
Borrower and Administrative Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such
amount, such Lender may use any reasonable averaging and attribution
methods.
19.2. MARKET FAILURE. If on or prior to the first day of any Interest
Period for any Eurodollar Loan:
(i) Administrative Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for such Interest Period; or
(ii) the Required Lenders determine (which determination shall be
conclusive) and notify Administrative Agent that the Eurodollar Rate
will not adequately and
79
fairly reflect the cost to the Lenders of funding Eurodollar Loans for
such Interest Period;
then Administrative Agent shall give Borrower prompt notice thereof, and so
long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, continue Eurodollar Loans,
or to convert Eurodollar Loans and Borrower shall, on the last day(s) of
the then current Interest Period(s) for the outstanding Eurodollar Loans
either prepay such Loans or convert such Loans into Base Rate Loans in
accordance with the terms of this Agreement.
19.3. ILLEGALITY. Notwithstanding any other provision of this Agreement, in
the event that it becomes unlawful for any Lender or its Applicable Lending
Office to make, maintain, or fund Eurodollar Loans hereunder, then such
Lender shall promptly notify Borrower thereof and such Lender's obligation
to make, continue Eurodollar Loans or convert Base Rate Loans into
Eurodollar Loans shall be suspended until such time as such Lender may
again make, maintain, and fund Eurodollar Loans (in which case the
provisions of Section 19.5 shall be applicable).
19.4. COMPENSATION. Upon the request of any Lender, Borrower shall pay to
such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to compensate it for any loss, cost, or
expense (including loss of anticipated profits) incurred by it as a result
of:
(i) any payment, prepayment, or conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the
Loans pursuant to the terms hereof) on a date other than the last day
of the Interest Period for such Eurodollar Loan; or
(ii) any failure by Borrower for any reason to borrow, convert,
continue, or prepay a Eurodollar Loan on the date for such borrowing,
conversion, continuation, or prepayment specified in the relevant
notice of borrowing, prepayment, continuation, or conversion under
this Agreement.
If a Lender claims compensation under this Section 19.4, such Lender shall
furnish a certificate to Borrower that states the amount to be paid to it
hereunder and includes a description of the method used by such Lender in
calculating such amount. Borrower shall have the burden of proving that the
amount of any such compensation calculated by a Lender is not correct. Any
compensation payable by Borrower to a Lender under this Section 19.4 shall
be payable without regard to whether such Lender has funded its pro-rata
share of any Eurodollar Advance or Eurodollar Loan through the purchase of
deposits in an amount or of a maturity corresponding to the deposits used
as a reference in determining the Eurodollar Rate.
80
19.5. TREATMENT OF AFFECTED LOANS. If the obligation of any Lender to make
Eurodollar Loans or to continue any Eurodollar Loans, or to convert any
Base Rate Loan into a Eurodollar Loan shall be suspended pursuant to
Section 19.1, 19.2, or 19.3 (such Loans being herein called Affected
Loans), such Lender's Affected Loans shall be automatically and immediately
converted into Base Rate Loans on the last day(s) of the then current
Interest Period(s) for Affected Loans (or, in the case of a conversion
required by Section 19.3, on such earlier date as such Lender may specify
to Borrower with a copy to Administrative Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 19.1, 19.2, or 19.3 that gave rise to such conversion no longer
exist:
81
(i) to the extent that such Lender's Affected Loans have been so
converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Affected Loans shall continue to
be made and applied as provided for herein; and
(ii) all Loans that would otherwise be made or continued by such
Lender as Eurodollar Loans shall be made or continued instead as Base
Rate Loans, and all Loans of such Lender that would otherwise be
converted into Eurodollar Loans shall be converted instead into (or
shall remain as) Base Rate Loans.
If such Lender gives notice to Borrower (with a copy to Administrative
Agent) that the circumstances specified in Section 19.1, 19.2, or 19.3
hereof that gave rise to the conversion of such Lender's Affected Loans
pursuant to this Section 19.5 no longer exist (which such Lender agrees to
do promptly upon such circumstances ceasing to exist) at a time when Loans
of the type of the Affected Loans made by other Lenders are outstanding,
such Lender's Base Rate Loans shall be automatically converted, on the
first day(s) of the next succeeding Interest Period(s) for such outstanding
Loans of the type of the Affected Loans, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding Loans of
the type of the Affected Loans and by such Lender are held pro rata (as to
principal amounts, type of interest, and Interest Periods) in accordance
with their respective Commitments.
82
19.6. TAXES.
19.6.1. GROSS-UP. Any and all payments by Borrower to or for the
account of any Lender or the Administrative Agent hereunder or under
any other Loan Document shall be made free and clear of and without
deduction for any and all Taxes, whether imposed now or in the future,
excluding, in the case of each Lender and the Administrative Agent,
Taxes imposed on its income, and franchise Taxes imposed on it, by the
jurisdiction under the Laws of which such Lender (or its Applicable
Lending Office) or the Administrative Agent (as the case may be)
83
is organized or any political subdivision thereof. If Borrower is
required by Law to deduct any Taxes from or in respect of any sum
payable under this Agreement or any other Loan Document to any Lender
or the Administrative Agent, (i) the sum payable will be increased as
necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
19.6) such Lender or the Administrative Agent receives an amount equal
to the sum it would have received had no such deductions been made,
(ii) Borrower shall make such deductions, (iii) Borrower shall pay the
full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Law, and (iv) Borrower shall
furnish to Administrative Agent, at its address referred to herein,
the original or a certified copy of a receipt evidencing payment
thereof. In addition, Borrower agrees to pay any and all present or
future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made
under this Agreement or any other Loan Document or from the execution
or delivery of, or otherwise with respect to, this Agreement or any
other Loan Document (hereinafter referred to as Impositions). Borrower
agrees to indemnify each Lender and the Administrative Agent for the
full amount of Taxes and Impositions (including, without limitation,
any Taxes or Impositions imposed or asserted by any jurisdiction on
amounts payable under this Section 19.6) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect
thereto. Within 30 days after the date of any payment of Taxes,
Borrower shall furnish to Administrative Agent the original or a
certified copy of the receipt evidencing such payment.
19.6.2. LENDERS' UNDERTAKINGS.
(i) Each Lender organized under the Laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery
of this Agreement in the case of each Lender listed on the signature
pages hereof and on or prior to the date on which it becomes a Lender
in the case of each other Lender, and from time to time thereafter if
requested in writing by Borrower or Administrative Agent (but only so
long as such Lender remains lawfully able to do so), shall provide
Borrower and Administrative Agent with (i) Internal Revenue Service
Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Lender is entitled
to benefits under an income tax treaty to which the United States is a
party which reduces the rate of withholding Tax on payments of
interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or
business in the United States, (ii) Internal Revenue Service Form W-8
or W-9, as appropriate, or any successor form prescribed by the
Internal Revenue Service, and (iii) any other form or certificate
required by any Governmental Authority (including any certificate
required by Sections 871(h) and 881(c) of the Internal Revenue Code),
certifying that such Lender is entitled to an exemption from or a
reduced rate of Tax on payments pursuant to this Agreement or any of
84
the other Loan Documents. For any period with respect to which a
Lender has failed to provide Borrower and Administrative Agent with
the appropriate form pursuant to this Section 19.6.2 (unless such
failure is due to a change in treaty or Law occurring subsequent to
the date on which a form originally was required to be provided), such
Lender shall not be entitled to indemnification under Section 19.6.1
with respect to Taxes imposed by the United States; provided, however,
that should a Lender, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of
its failure to deliver a form required hereunder, Borrower shall take
such steps as such Lender shall reasonably request to assist such
Lender to recover such Taxes.
(ii) If Borrower is required to pay additional amounts to or for the
account of any Lender or Administrative Agent pursuant to this Section
19.6.2, then such Lender or the Administrative Agent will agree to use
85
reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional
payment which may thereafter accrue if such change, in the judgment of
such Lender or the Administrative Agent, as the case may be, is not
otherwise disadvantageous to such Lender or the Administrative Agent,
as the case may be.
19.6.3. SURVIVAL OF BORROWER'S OBLIGATIONS. Without prejudice to the
survival of any other agreement of Borrower hereunder, the agreements
and obligations of Borrower contained in this Section 19.6 shall
survive the termination of the Commitments, the expiration of the
Letters of Credit, the indefeasible full payment and satisfaction of
all of the Loan Obligations, and the release of the Collateral.
19.7. USURY. Notwithstanding any provisions to the contrary in Section 4 or
elsewhere in any of the Loan Documents, Borrower shall not be obligated to
pay interest at a rate which exceeds the maximum rate permitted by Law. If,
but for this Section 19.7, Borrower would be deemed obligated to pay
interest at a rate which exceeds the maximum rate permitted by Law, or if
any of the Loan Obligations is paid or becomes payable before its
originally scheduled Maturity and as a result Borrower has paid or would be
obligated to pay interest at such an excessive rate, then (i) Borrower
shall not be obligated to pay interest to the extent it exceeds the
interest that would be payable at the maximum rate permitted by Law; (ii)
if the outstanding Loan Obligations have not been accelerated as provided
in Section 17.3.2, any such excess interest that has been paid by Borrower
shall be refunded; (iii) if the outstanding Loan Obligations have been
accelerated as provided in Section 17.3.2, any such excess that has been
paid by Borrower shall be applied to the Loan Obligations as provided in
Section 17.4; and (iv) the effective rate of interest shall be deemed
automatically reduced to the maximum rate permitted by Law.
86
20. GENERAL.
20.1. LENDERS' RIGHT TO CURE. Required Lenders may from time to time, in
their absolute discretion, for Borrower's account and at Borrower's
expense, pay (or, with the consent of Required Lenders, make a Revolving
Loan Advance to pay) any amount or do any act required of Borrower
hereunder or requested by Administrative Agent or Required Lenders to
preserve, protect, maintain or enforce the Loan Obligations, the Collateral
or Administrative Agent's Security Interests therein for the benefit of
Lenders, and which Borrower fails to pay or do, including payment of any
judgment against Borrower, insurance premium, taxes or assessments,
warehouse charge, finishing or processing charge, landlord's claim, and any
other Security Interest upon or with respect to the Collateral provided
that neither Administrative Agent nor any Lender shall take any such
actions if there is no Event of Default, Borrower is disputing such item(s)
in good faith and Borrower establishes appropriate reserves adequate to pay
any such item(s) in accordance with GAAP in the event that Borrower does
not prevail in such a dispute. All payments that Lenders make pursuant to
this Section and all out-of-pocket costs and expenses that Lenders pay or
incur in connection with any action taken by them hereunder shall be a part
of the Loan Obligations, the repayment of which shall be secured by the
Collateral. Any payment made or other action taken by Lenders pursuant to
this Section shall be without prejudice to any right to assert an Event of
Default hereunder and to pursue Lender's other rights and remedies with
respect thereto.
20.2. RIGHTS NOT EXCLUSIVE. Every right granted to Administrative Agent and
Lenders hereunder or under any other Loan Document or allowed to it at law
or in equity shall be deemed cumulative and may be exercised from time to
time.
20.3. SURVIVAL OF AGREEMENTS. All covenants and agreements made herein and
in the other Loan Documents shall survive the execution and delivery of
this Agreement, the Notes and other Loan Documents and the making of every
Advance. All agreements, obligations and liabilities of Borrower under this
Agreement concerning the payment of money to Administrative Agent and
Lenders, including Borrower's obligations under Sections 20.7 and 20.8, but
excluding the obligation to repay the Loans and interest accrued thereon,
shall survive the repayment in full of the Loans and interest accrued
thereon, whether or not indefeasible, the return of the Notes to Borrower,
the termination of the Commitments and the expiration of all Letters of
Credit.
87
20.4. ASSIGNMENTS.
20.4.1. PERMITTED ASSIGNMENTS. At any time after the Execution Date,
any Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including
all or a portion of the Notes payable to it, its Commitments and its
Loans), provided that the terms of assignment satisfy the following
requirements:
20.4.1.1. Administrative Agent shall have accepted the
assignment, which acceptance shall not be unreasonably withheld.
20.4.1.2. Each such assignment shall be of a constant, and not a
varying, percentage of all of the assigning Lender's rights and
obligations under this Agreement. 20.4.1.3. For each assignment
involving the issuance and transfer of Notes, the assigning
Lender shall execute an Assignment and Acceptance in the form
attached hereto as Exhibit 20.4.1 together with any Note subject
to such assignment and a processing fee of $1,000.00.
20.4.1.3 For each assignment involving the issuance and transfer
of Notes, the assigning Lender shall execute an Assignment and
Acceptance in the form attached hereto as Exhibit 20.4.1 together
with any Note subject to such assignment and a processing fee of
$1,000.00.
20.4.1.4. The minimum Commitment which shall be assigned (which
shall include the applicable portion of the assigning Lender's
Revolving Loan Commitment, and Term Loan Commitment, and Letter
of Credit Commitment) is $5,000,000.00, or such lesser amount
which constitutes such Lender's entire Commitment; provided,
however, that no such minimum shall apply between a Lender and
its Affiliates, or between one
88
Lender and another Lender or an assignment of all of a Lender's
rights and obligations under this Agreement.
20.4.1.5. The assignee shall have an office located in the United
States and is otherwise an Eligible Assignee.
20.4.1.6. If there is no Event of Default in existence as of the
date of such assignment, Borrower shall have consented to the
assignment, which consent shall not be unreasonably withheld.
20.4.2. CONSEQUENCES AND EFFECT OF ASSIGNMENTS. From and after the
effective date specified in any Assignment and Acceptance, the
assignee shall be deemed and treated as a party to this Agreement and,
to the extent that rights and obligations hereunder and under the
Notes held by the assignor have been assigned or negotiated to the
assignee pursuant to such Assignment and Acceptance, to have the
rights and obligations of a Lender hereunder as fully as if such
assignee had been named as a Lender in this Agreement and of a holder
of such Notes, and the assignor shall, to the extent that rights and
obligations hereunder or under such Notes have been assigned or
negotiated by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its future obligations
under this Agreement. If the assignee is not incorporated under the
laws of the United States of America or a state thereof, it shall
deliver to Borrower and Administrative Agent certification as to the
exemption from deduction or withholding of Taxes in accordance with
Section 19.6.
20.4.3. AGREEMENTS UPON ASSIGNMENT. By executing and delivering an
Assignment and Acceptance, the assignor thereunder and the assignee
confirm to and agree with each other and the other parties hereto
substantially as follows: (i) the assignment made under such
Assignment and Acceptance is made under such Assignment and Acceptance
without recourse; (ii) such assignor makes no representation or
warranty and assumes no responsibility with respect to the financial
condition of any Covered Person or the performance or observance by
any Covered Person of any of its Loan Obligations; (iii) such assignee
confirms that it has received a copy of this Agreement, together with
copies of the Financial Statements and such other Loan Documents and
other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and without
reliance upon Administrative Agent, such assignor, or any other
Lender, and based on such documents and information as it deems
appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee
appoints and authorizes Administrative Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement
and the other Loan Documents as are delegated to Agent by the terms
hereof and thereof, together with such powers as are reasonably
incidental thereto; and (vi) such assignee agrees that it will perform
in accordance with their terms
89
all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender and a holder of a Note.
20.4.4. REGISTER. Administrative Agent shall maintain at its address
referred to herein a copy of each Assignment and Acceptance delivered
to and accepted by it and a register for the recordation of the names
and addresses of the Lenders and the Commitment of and principal
amount of Loans owing to, each Lender from time to time (the
Register). The entries in the Register shall be conclusive and binding
for all purposes, absent manifest error, and Borrower, Administrative
Agent and Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by Borrower or any Lender
at any reasonable time and from time to time upon reasonable prior
notice. Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment
and payment of the processing fee, Administrative Agent shall, if such
Assignment and Acceptance has been completed and is in substantially
the form of Exhibit 20.4.1 hereto, (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the parties thereto.
20.4.5. NOTICE TO BORROWER OF ASSIGNMENT. Upon its receipt of an
Assignment and Acceptance executed by an assigning Lender, if
Administrative Agent accepts the assignment contemplated thereby,
Administrative Agent shall give prompt notice thereof to Borrower.
Borrower shall execute and deliver replacement Notes to the assignor
and assignee as requested by Administrative Agent and necessary to
give effect to the assignment. If Borrower fails or refuses to execute
and deliver such replacement Notes, Administrative Agent may, as agent
and attorney-in-fact for Borrower, execute and deliver such
replacement Notes on behalf of Borrower. Borrower hereby appoints
Administrative Agent as its agent and attorney-in-fact for such
purpose and acknowledges that such power is coupled with an interest
and therefore irrevocable. Administrative Agent shall not have any
liability to Borrower or anyone else, including any Lender, as a
consequence of exercising such power in any instance.
20.4.6. ASSIGNMENT TO FEDERAL RESERVE BANK. Notwithstanding any other
provision set forth in this Agreement, any Lender may at any time
assign and pledge all or any portion of its Loans and its Note to any
Federal Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank. No
such assignment shall release the assigning Lender from its
obligations hereunder.
20.5. SALE OF PARTICIPATIONS. Each Lender may sell participations to one or
more Persons (other than Borrower or an Affiliate of Borrower) in all or a
portion of its rights and obligations under this Agreement (including all
or a portion of its Commitment and its Loans); provided, however, that (i)
such Lender's obligations under this Agreement
90
shall remain unchanged, (ii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, (iii) the
participant shall be entitled to the benefit of the yield protection
provisions contained in Section 19 and the right of setoff contained in
Section 17.3.3, (iv) the amount of the participation shall be in a minimum
amount of $1,000,000.00 or such lesser amount which constitutes such
Lender's entire Commitment, provided, however, that no such minimum amount
shall apply to participations between any of Lenders or between any Lender
and any of its Affiliates; and (v) Borrower, the other Lenders and
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement, and such Lender shall retain the sole right to enforce the
obligations of Borrower relating to its Loans, its Notes and its funding of
Advances and to approve any amendment, modification, or waiver of any
provision of this Agreement (other than amendments, modifications, or
waivers that (a) decrease the amount of principal of the Loans, (b) reduce
the rate at which interest is payable on the Loans, (c) extend the final
maturity of the Notes, (d) increase its Commitment (if such increase is to
be shared by any such Participant), or (e) release any Guarantor.
Notwithstanding the foregoing, the sale of any such participations which
require Borrower to file a registration statement with the SEC or under the
securities Laws of any state shall not be permitted.
20.6. INFORMATION. Any Lender or Administrative Agent may furnish any
information concerning Borrower or any of its Subsidiaries in the
possession of such Lender or Administrative Agent, as the case may be, from
time to time to assignees and participants (including prospective assignees
and participants), provided such assignees and participants shall agree to
keep such information confidential.
20.7. PAYMENT OF EXPENSES. Borrower agrees to pay or reimburse to
Administrative Agent all of Administrative Agent's out-of-pocket costs
incurred in connection with Administrative Agent's due diligence review
before execution of the Loan Documents; the negotiation and preparation of
proposals, a commitment letter and the Loan Documents; the syndication of
the Loans; the administration of this Agreement, the Loan Documents and the
Loans; the perfection of Administrative Agent's Security Interests in
91
the Collateral; the interpretation of any of the Loan Documents; any
amendment of or supplementation to any of the Loan Documents; and any
waiver, consent or forbearance with respect to any Default or Event of
Default. Borrower agrees to pay or reimburse to each Lender all of such
Lender's out-of-pocket costs incurred in connection with the enforcement of
such Lender's rights and remedies under the Loan Documents after a Default
or Event of Default. Administrative Agent's out-of-pocket costs may include
but are not limited to the following, to the extent they are actually paid
or incurred by Administrative Agent: title insurance fees and premiums; the
cost of searches for Security Interests existing against Covered Persons;
recording and filing fees; appraisal fees; environmental consultant fees;
litigation costs; and all attorneys' and paralegals' expenses and
reasonable fees. Each Lender's out-of-pocket costs may include but are not
limited to the following, to the extent they are actually paid or incurred
by a Lender: litigation costs and all attorneys' and paralegals' expenses
and reasonable fees. Attorneys' and paralegals' expenses may include but
are not limited to filing charges; telephone, data transmission, facsimile
and other communication costs; courier and other delivery charges; and
photocopying charges. Litigation costs may include but are not limited to
filing fees, deposition costs, expert witness fees, expenses of service of
process, and other such costs paid or incurred in any administrative,
arbitration, or court proceedings involving a Lender and any Covered
Person, including proceedings under the Federal Bankruptcy Code. All costs
which Borrower is obligated to pay or reimburse Administrative Agent or the
Lenders are Loan Obligations payable to Administrative Agent or Lender, as
applicable, and are payable on demand by Administrative Agent or such
Lender.
20.8. GENERAL INDEMNITY.
20.8.1. Borrower agrees to indemnify and hold harmless Administrative
Agent and each Lender and each of their Affiliates and their
respective officers, directors, employees, agents, and advisors (each,
an Indemnified Party) from and against any and all claims, damages,
losses, liabilities, costs, and expenses (including, without
limitation, reasonable attorneys' fees) that may be incurred by or
asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation,
or proceeding or preparation of defense in connection therewith) the
Loan Documents, the Acquisition Documents, any of the transactions
contemplated herein or therein or the actual or proposed use of the
proceeds of the Loans, or the manufacture, storage, transportation,
release or disposal of any Hazardous Material on, from, over or
affecting any of the Collateral or any of the assets, properties, or
operations of any Covered Person or any predecessor in interest,
directly or indirectly, except to the extent such claim, damage, loss,
liability, cost, or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from
such Indemnified Party's gross negligence or willful misconduct. In
the case of an investigation, litigation or other proceeding to which
the indemnity in this Section 20.8 applies, such indemnity shall be
effective whether or not such investigation, litigation or proceeding
is brought by Borrower, its directors, shareholders or creditors or an
Indemnified Party or any other Person or any Indemnified Party is
92
otherwise a party thereto and whether or not the transactions
contemplated hereby are consummated. Borrower agrees not to assert any
claim against Administrative Agent, any Lender, any of their
Affiliates, or any of their respective directors, officers, employees,
attorneys, agents, and advisers, on any theory of liability, for
special, indirect, consequential, or punitive damages arising out of
or otherwise relating to the Loan Documents, the Acquisition
Documents, any of the transactions contemplated herein or therein or
the actual or proposed use of the proceeds of the Loans. Borrower
shall pay, indemnify and hold harmless the Indemnified Parties for,
from and against, and shall promptly reimburse the Indemnified Parties
for, any and all claims, damages, liabilities, losses, costs and
expenses (including reasonable attorneys' fees and expenses and
amounts paid in settlement) incurred, paid or sustained by the
Indemnified Parties, arising out of or relating to the Acquisition
Documents or enforcement by Administrative Agent of any of its rights
with respect thereto.
20.8.2. The obligations of Borrower under this Section 20.8 shall
survive the termination of the Commitments, the expiration of the
Letters of Credit, the indefeasible full payment and satisfaction of
all of the Loan Obligations, and the release of the Collateral.
20.8.3. To the extent that any of the indemnities required from
Borrower under this Section are unenforceable because they violate any
Law or public policy, Borrower shall pay the maximum amount which it
is permitted to pay under applicable Law.
20.9. LETTERS OF CREDIT. Borrower assumes all risks of the acts or
omissions of any beneficiary of any of the Letters of Credit. Neither
Administrative Agent nor any of its directors, officers, employees, agents,
or representatives shall be liable or responsible for: (a) the use which
may be made of any of the Letters of Credit or for any acts or omissions of
beneficiary in connection therewith; (b) the validity, sufficiency or
genuineness of documents, or of any endorsement(s) thereon, even if such
documents should in fact prove to be in any or all respects invalid,
insufficient, fraudulent or forged; (c) payment by Administrative Agent
against presentation of documents which, on their face, appear to comply
with the terms of any Letter of Credit, even though such documents may fail
to bear any reference or adequate reference to any such Letter of Credit;
or (d) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit in connection with which Administrative
Agent would, pursuant to the Uniform Customs and Practices for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No.
500 (as amended from time to time), be absolved from liability. In
furtherance and not in limitation of the foregoing, Letter of Credit Issuer
may accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
93
20.10. CHANGES IN ACCOUNTING PRINCIPLES. If any Covered Person, at the end
of its fiscal year and with the concurrence of its independent certified
public accountants, changes the method of valuing the Inventory of such
Covered Person, or if any other changes in accounting principles from those
used in the preparation of any of the Financial Statements are required by
or result from the promulgation of principles, rules, regulations,
guidelines, pronouncements or opinions by the Financial Accounting
Standards Board or the American Institute of Certified Public Accountants
(or successors thereto or bodies with similar functions), and any of such
changes result in a change in the method of calculation of, or affect the
results of such calculation of, any of the financial covenants, standards
or terms found herein, then the parties hereto agree to enter into and
diligently pursue negotiations in order to amend such financial covenants,
standards or terms so as to equitably reflect such changes, with the
desired result that the criteria for evaluating the financial condition and
results of operations of such Covered Person shall be the same after such
changes as if such changes had not been made; provided, however, that until
such changes are made, all financial covenants herein and all the
provisions hereof which contemplate financial calculation hereunder shall
remain in full force and effect.
20.11. LOAN RECORDS. The date and amount of all Advances to Borrower and
payments of amounts due from Borrower under the Loan Documents will be
recorded in the records that Administrative Agent normally maintains for
such types of transactions. The failure to record, or any error in
recording, any of the foregoing shall not, however, affect the obligation
of Borrower to repay the Loans and other amounts payable under the Loan
Documents. Borrower shall have the burden of proving that such records are
not correct. Borrower agrees that Administrative Agent's and any Lender's
books and records showing the Loan Obligations and the transactions
pursuant to this Agreement shall be admissible in any action or proceeding
arising therefrom, and shall constitute prima facie proof thereof,
irrespective of whether any Loan Obligation is also evidenced by a
promissory note or other instrument. Administrative Agent will provide to
Borrower a monthly statement of Advances, payments, and other transactions
pursuant to this Agreement. Such statement shall be deemed correct,
accurate and binding on Borrower and an account stated (except for
reversals and reapplications of payments as provided in Section 6.7 and
corrections of errors discovered by Administrative Agent or a Lender),
unless Borrower notifies Administrative Agent in writing to the contrary
within 60 days after such statement is rendered. In the event a timely
written notice of objections is given by Borrower, only the items to which
exception is expressly made will be considered to be disputed by Borrower.
94
20.12. OTHER SECURITY AND GUARANTIES. Administrative Agent or any Lender
may, without notice or demand and without affecting Borrower's obligations
hereunder, from time to time: (a) take from any Person and hold collateral
(other than the Collateral) for the payment of all or any part of the Loan
Obligations and exchange, enforce and release such collateral or any part
thereof; and (b) accept and hold any endorsement or guaranty of payment of
all or any part of the Loan Obligations and release or substitute any such
endorser or guarantor, or any Person who has given any Security Interest in
any other collateral as security for the payment of all or any part of the
Loan Obligations, or any other Person in any way obligated to pay all or
any part of the Loan Obligations.
20.13. LOAN OBLIGATIONS PAYABLE IN DOLLARS. All Loan Obligations that are
payable in Dollars under the terms of the Loan Documents shall be payable
only in Dollars. If, however, to obtain a judgment in any court it is
necessary to convert a Loan Obligation payable in Dollars into another
currency, the rate of exchange used shall be that at which Administrative
Agent, using its customary procedures, could purchase Dollars with such
other currency in New York, New York on the Business Day immediately
preceding the day on which such judgment is rendered. If any sum in another
currency is paid to a Lender or received by a Lender and applied to a Loan
Obligation payable in Dollars, such Loan Obligation shall be deemed paid
and discharged only to the extent of the amount of Dollars that
Administrative Agent, using its customary procedures, is able to purchase
in New York, New York with such sum on the Business Day immediately
following receipt thereof. Borrower agrees to indemnify each Lender against
any loss in Dollars that it may incur on such Loan Obligation as a result
of such payment or receipt and application to such Loan Obligation.
21. MISCELLANEOUS.
21.1. NOTICES. All notices, consents, requests and demands to or upon the
respective parties hereto shall be in writing, and shall be deemed to have
been given or made when delivered in person to those Persons listed on the
signature pages hereof or three (3) days after deposit in the United States
mail, postage prepaid, or, in the case of overnight courier services, one
(1) day after delivery to the overnight courier service, or in the case of
telecopy notice, when sent, verification received, in each case addressed
as set forth on the signature pages hereof, or such other address as either
party may designate by notice
95
to the other in accordance with the terms of this Section. No notice given
to or demand made on Borrower by Administrative Agent or any Lender in any
instance shall entitle Borrower to notice or demand in any other instance.
21.2. AMENDMENTS AND MODIFICATIONS; WAIVERS AND CONSENTS. Unless otherwise
provided herein, no amendment to or modification of any provision of this
Agreement, or of any of the other Loan Documents shall be effective unless
it is in writing and signed by authorized officers of Borrower and Required
Lenders. Unless otherwise provided herein, no waiver of, or consent to any
departure by Borrower from, the requirements of any provision of this
Agreement or any of the other Loan Documents shall be effective unless it
is in writing and signed by authorized officers of Required Lenders. Any
such amendment, modification, waiver or consent shall be effective only in
the specific instance and for the purpose for which given. The foregoing
notwithstanding, no such amendment, modification or consent shall, unless
signed by authorized officers of Borrower and of all Lenders: (i) change
any Revolving Loan Commitment or any Term Loan Commitment of any Lender, or
change the Letter of Credit Commitment or subject any Lender or the Letter
of Credit Issuer to a greater obligation than expressly provided for in
this Agreement, (ii) reduce or forgive the repayment of principal of any
Advance or the reimbursement of any draw on a Letter of Credit or change
the rate, or mechanism for determining the rate, of interest on any Advance
or any fees or other amounts payable by Borrower hereunder, (iii) change
the regularly scheduled dates for payments of principal or interest of any
Advance or other fees or amounts payable to any Lender under the Loan
Documents (including, without limitation, the Revolving Loan Maturity Date
or the Term Loan Maturity Date), (iv) change the provisions of Section 18
to the detriment of any Lender, (v) change the definition of Required
Lenders herein, (vi) change any requirement herein that any particular
action be taken by all Lenders or by Required Lenders, (vii) change the
provisions of this Section, (viii) release any of the Collateral (except in
the ordinary course of business or as otherwise expressly permitted by the
terms of this Agreement) or any Covered Person or any Guarantor from its
obligations under the Loan Documents, or (ix) change any provisions of this
Agreement requiring ratable distributions to Lenders. No failure by
Administrative Agent or any Lender to exercise, and no delay by
Administrative Agent or any Lender in exercising, any right, remedy, power
or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise by Administrative Agent or any Lender of any
right, remedy, power or privilege hereunder preclude any other exercise
thereof, or the exercise of any other right, remedy, power or privilege
existing under any Law or otherwise.
21.3. RIGHTS CUMULATIVE. Each of the rights and remedies of Administrative
Agent and Lenders under this Agreement shall be in addition to all of its
other rights and remedies under applicable Law, and nothing in this
Agreement shall be construed as limiting any such rights or remedies.
21.4. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and all future holders of the
Notes and their respective
96
successors and assigns, except that Borrower may not assign, delegate or
transfer any of its rights or obligations under this Agreement without the
prior written consent of Administrative Agent and Required Lenders. With
respect to Borrower's successors and assigns, such successors and assigns
shall include any receiver, trustee or debtor-in-possession of or for
Borrower.
21.5. SEVERABILITY. Any provision of this Agreement which is prohibited,
unenforceable or not authorized in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or lack of authorization without invalidating the
remaining provisions hereof or affecting the validity, enforceability or
legality of such provision in any other jurisdiction unless the
ineffectiveness of such provision would result in such a material change as
to cause completion of the transactions contemplated hereby to be
unreasonable.
21.6. COUNTERPARTS. This Agreement may be executed by the parties hereto on
any number of separate counterparts, and all such counterparts taken
together shall constitute one and the same instrument. It shall not be
necessary in making proof of this Agreement to produce or account for more
than one counterpart signed by the party to be charged.
21.7. GOVERNING LAW; NO THIRD PARTY RIGHTS. This Agreement, the Notes and
the other Loan Documents and the rights and obligations of the parties
hereunder and thereunder shall be governed by and construed and interpreted
in accordance with the internal Laws of the State of Illinois applicable to
contracts made and to be performed wholly within such state, without regard
to choice or conflicts of law principles; except that the provisions of the
Loan Documents pertaining to the creation or perfection of Security
Interests or the enforcement of rights of Administrative Agent and Lenders
in Collateral located in a State other that the State of Illinois shall be
governed by the Laws of such State. This Agreement is solely for the
benefit of the parties hereto and their respective successors and assigns,
and no other Person shall have any right, benefit, priority or interest
under, or because of the existence of, this Agreement.
21.8. COUNTERPART FACSIMILE EXECUTION. For purposes of this Agreement, a
document (or signature page thereto) signed and transmitted by facsimile
machine or telecopier is to be treated as an original document. The
signature of any Person thereon, for purposes hereof, is to be considered
as an original signature, and the document transmitted is to be considered
to have the same binding effect as an original signature on an original
document. At the request of any party hereto, any facsimile or telecopy
document is to be re-executed in original form by the Persons who executed
the facsimile or telecopy document. No party hereto may raise the use of a
facsimile machine or telecopier or the fact that any signature was
transmitted through the use of a facsimile or telecopier machine as a
defense to the enforcement of this Agreement or any amendment or other
document executed in compliance with this Section.
21.9. EFFECT OF MERGER OF BANK. Effective immediately upon the merger of
Administrative Agent or a Lender with or into another financial
97
institution, all references to Administrative Agent or such Lender under
every Loan Document shall be deemed to be references to the surviving
institution. If the surviving institution does not have a "Prime Rate,"
references in the Loan Documents to Prime Rate shall be deemed to be
references to the reference rate (however it is designated) established
from time to time by the surviving institution that is most similar to the
Prime Rate.
21.10. NEGOTIATED TRANSACTION. Borrower, Administrative Agent and each
Lender represent each to the others that in the negotiation and drafting of
this Agreement and the other Loan Documents they have been represented by
and have relied upon the advice of counsel of their choice. Borrower and
Administrative Agent affirm that their counsel have both had substantial
roles in the drafting and negotiation of this Agreement and each Lender
affirms that its counsel has participated in the drafting and negotiation
of this Agreement; therefore, this Agreement will be deemed drafted by all
of Borrower, Administrative Agent and Lenders, and the rule of construction
to the effect that any ambiguities are to be resolved against the drafter
will not be employed in the interpretation of this Agreement.
21.11. CHOICE OF FORUM. SUBJECT ONLY TO THE EXCEPTION IN THE NEXT SENTENCE,
BORROWER, ADMINISTRATIVE AGENT, AND EACH LENDER HEREBY AGREES TO THE
EXCLUSIVE JURISDICTION OF THE FEDERAL COURT OF THE NORTHERN DISTRICT OF
ILLINOIS AND THE STATE COURTS OF ILLINOIS LOCATED IN XXXX COUNTY AND WAIVES
ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY
ACTION INSTITUTED THEREIN, AND AGREES THAT ANY DISPUTE CONCERNING THE
RELATIONSHIP BETWEEN ADMINISTRATIVE AGENT, LENDERS, AND BORROWER OR THE
CONDUCT OF ANY OF THEM IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE SHALL
BE HEARD ONLY IN THE COURTS DESCRIBED ABOVE. NOTWITHSTANDING THE FOREGOING:
(1) ADMINISTRATIVE AGENT OR ANY LENDER SHALL HAVE THE RIGHT TO BRING ANY
ACTION OR PROCEEDING AGAINST BORROWER OR ITS PROPERTY IN ANY COURTS OF ANY
OTHER JURISDICTION ADMINISTRATIVE AGENT OR ANY LENDER DEEM NECESSARY OR
APPROPRIATE IN ORDER TO REALIZE ON THE COLLATERAL, OR OTHER SECURITY FOR
THE LOAN OBLIGATIONS, AND (2) EACH OF THE PARTIES HERETO ACKNOWLEDGES THAT
ANY APPEALS FROM THE COURTS DESCRIBED IN THE IMMEDIATELY PRECEDING SENTENCE
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE THOSE JURISDICTIONS.
21.12. SERVICE OF PROCESS. BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY
BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO BORROWER
AT ITS ADDRESS SET FORTH ON THE SIGNATURE PAGES HEREOF, AND SERVICE SO MADE
SHALL BE DEEMED TO BE COMPLETED FIVE (5)
98
DAYS AFTER THE SAME SHALL HAVE BEEN SO DEPOSITED IN THE U.S. MAILS; OR AT
ADMINISTRATIVE AGENT'S OR ANY LENDER'S OPTION, BY SERVICE UPON CT
CORPORATION, WHICH BORROWER IRREVOCABLY APPOINTS AS BORROWER'S AGENT FOR
THE PURPOSE OF ACCEPTING SERVICE OF PROCESS WITHIN THE STATE OF ILLINOIS.
ADMINISTRATIVE AGENT OR SUCH LENDER SHALL PROMPTLY FORWARD BY REGISTERED
MAIL ANY PROCESS SO SERVED UPON SAID AGENT TO BORROWER AT ITS ADDRESS ON
THE SIGNATURE PAGES HEREOF. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
OF ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW.
21.13. WAIVER OF JURY TRIAL. BORROWER, ADMINISTRATIVE AGENT, AND EACH
LENDER HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT, OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE PARTIES HERETO OR EITHER OF THEM IN RESPECT OF THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR THE TRANSACTIONS RELATED HERETO OR
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND
WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE. BORROWER, ADMINISTRATIVE
AGENT, AND EACH LENDER AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT EITHER MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
21.14. INCORPORATION BY REFERENCE. All of the terms of the other Loan
Documents are incorporated in and made a part of this Agreement by this
reference.
21.15. STATUTORY NOTICE - INSURANCE. The following notice is given pursuant
to Section 10 of the Collateral Protection Act set forth in Chapter 815
Section 180/1 of the Illinois Compiled Statutes (1996); nothing contained
in such notice shall be deemed to limit or modify the terms of the Loan
Documents:
UNLESS YOU PROVIDE EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY YOUR
AGREEMENT WITH US, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR
INTERESTS IN YOUR COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT
YOUR INTERESTS. THE COVERAGE THAT WE PURCHASE MAY NOT PAY ANY CLAIM THAT
YOU MAKE OR ANY CLAIM THAT IS MADE AGAINST YOU IN CONNECTION WITH THE
COLLATERAL. YOU MAY LATER CANCEL
99
ANY INSURANCE PURCHASED BY US, BUT ONLY AFTER PROVIDING EVIDENCE THAT YOU
HAVE OBTAINED INSURANCE AS REQUIRED BY OUR AGREEMENT. IF WE PURCHASE
INSURANCE FOR THE COLLATERAL, YOU WILL BE RESPONSIBLE FOR THE COSTS OF THAT
INSURANCE, INCLUDING THE INSURANCE PREMIUM, INTEREST AND ANY OTHER CHARGES
WE MAY IMPOSE IN CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE
EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE
COSTS OF THE INSURANCE MAY BE ADDED TO YOUR TOTAL OUTSTANDING BALANCE OR
OBLIGATION. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF
INSURANCE YOU MAY BE ABLE TO OBTAIN ON YOUR OWN.
21.16. STATUTORY NOTICE - ORAL COMMITMENTS. Nothing contained in the
following notice shall be deemed to limit or modify the terms of the Loan
Documents:
ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR
FROM ENFORCING REPAYMENT OF A DEBT INCLUDING PROMISES TO EXTEND OR RENEW
SUCH DEBT ARE NOT ENFORCEABLE. TO PROTECT YOU (BORROWER) AND US (CREDITOR)
FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS WE REACH COVERING
SUCH MATTERS ARE CONTAINED IN THIS WRITING, WHICH IS THE COMPLETE AND
EXCLUSIVE STATEMENT OF THE AGREEMENT BETWEEN US, EXCEPT AS WE MAY LATER
AGREE IN WRITING TO MODIFY IT.
Borrower acknowledges that there are no other agreements between
Administrative Agent, Lenders, and Borrower, oral or written, concerning
the subject matter of the Loan Documents, and that all prior agreements
concerning the same subject matter, including any proposal or commitment
letter, are merged into the Loan Documents and thereby extinguished.
[SIGNATURE PAGES FOLLOW]
100
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by appropriate duly authorized officers as of the Execution Date.
TALX CORPORATION, A MISSOURI CORPORATION
AS BORROWER
By: /s/ XXXXXXX X. XXXXXXXX
--------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
------------------------------------------------
Title: President
-----------------------------------------------
NOTICE ADDRESS FOR BORROWER:
0000 Xxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxx
WITH A COPY TO:
Xxxxx Xxxx LLP
Xxx Xxxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: R. Xxxxxxx Xxxx and Xxxxx X. Xxxxx
LASALLE BANK NATIONAL ASSOCIATION
AS ADMINISTRATIVE AGENT AND A LENDER
By: /s/ XXX XXXXXX
--------------------------------------------------
Name: Xxx Xxxxxx
------------------------------------------------
Title: Vice President
-----------------------------------------------
NOTICE ADDRESS :
LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
With copies to:
One Metropolitan Square
000 X. Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxxx
101
And
Xxxxxxxxx Xxxxxxx Xxxxx Xxxxxx
000 Xxxxx Xxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. XxXxxxxxx
APPLICABLE LENDING OFFICE :
LaSalle Bank National Association
000 X. XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
SOUTHWEST BANK OF ST. LOUIS, AS A LENDER
By: /s/ XXXXXX X. XXXX, XX.
---------------------------------
Name: Xxxxxx X. Xxxx, Xx.
-------------------------------
Title: Vice President
------------------------------
NOTICE ADDRESS AND APPLICABLE LENDING OFFICE :
Southwest Bank of St. Louis
0000 X. Xxxxxxxxxxxx
Xx. Xxxxx, XX 00000
Fax: (000) 000-0000
--------------------------------
Phone: (000) 000-0000
------------------------------
With a copy to:
Xxxxxxxxx Xxxxxxxx LLP
One Metropolitan Square
000 X. Xxxxxxxx, Xxxxx 0000
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxxxxx
The Registrant agrees to furnish supplementally a copy of any omitted schedule
to the Commission upon request.
102
GLOSSARY
ACCOUNT -- as to any Person, the right of such Person to payment for goods sold
or leased or for services rendered by such Person.
ACCOUNT DEBTOR -- the obligor on any Account.
ACQUIRING COMPANY -- the Person obligated to pay or provide the consideration
payable in connection with a Permitted Acquisition upon the consummation
thereof.
ACQUISITION DOCUMENTS -- in the case of the Current Acquisitions, the documents
under which the Current Acquisitions are contemplated; and in the case of any
subsequent Permitted Acquisition, the documents to which Borrower or any other
Covered Person is a party and under which such Permitted Acquisition is
contemplated, and all of the foregoing at any time after a Permitted Acquisition
has occurred.
ACQUISITION DOCUMENTS ASSIGNMENT -- the assignment of the Acquisition Documents
that is executed and delivered to Administrative Agent for the benefit of
Lenders as provided herein.
ADJUSTED BASE RATE -- is defined in Section 4.3.
ADJUSTED EURODOLLAR RATE -- is defined in Section 4.4.
ADJUSTED FEDERAL FUNDS RATE -- is defined in Section 4.5.
ADMINISTRATIVE AGENT -- LaSalle in its capacity as Administrative Agent under
this Agreement, and its successors and assigns in such capacity.
ADVANCE -- the Term Loan Advance, or a Revolving Loan Advance.
ADVANCE DATE -- the date on which an Advance is requested by Borrower to be
made, or is otherwise contemplated or intended to be made, as provided herein.
AFFILIATE -- with respect to any Person, (a) any other Person who is a partner,
director, officer, stockholder, member, partner or other equity holder of such
Person; and (b) any other Person which, directly or indirectly, through one or
more intermediaries, is in control of, is controlled by or is under common
control with such Person, and any partner, director, officer or stockholder,
member, partner or other equity holder of such other Person described. For
purposes of this Agreement, control of a Person by another Person shall be
deemed to exist if such other Person has the power, directly or indirectly,
either to (i) vote twenty percent (20%) or more of the securities, membership
interests or other equity interest having the power to vote in an election of
directors or managers of such Person, or (ii) direct the management of such
Person, whether by contract or otherwise and whether alone or in combination
with others.
AGENCY FEE -- is defined in Section 5.6.
AGGREGATE COMMITMENT -- either the Aggregate Revolving Loan Commitment or the
Aggregate Term Loan Commitment.
AGGREGATE LOAN -- either the Aggregate Revolving Loan or the Aggregate Term
Loan.
AGGREGATE REVOLVING LOAN -- the from time to time outstanding principal balance
of all Revolving Loan Advances.
AGGREGATE REVOLVING LOAN COMMITMENT -- the aggregate commitments of Lenders as
stated in Section 3.1.1 to fund Revolving Loan Advances, as it may be changed as
provided herein.
ii
AGGREGATE TERM LOAN -- the from time to time outstanding principal amount of the
Term Loan Advances.
AGGREGATE TERM LOAN COMMITMENT -- the aggregate commitments of Lenders as stated
in Section 3.2.1 to fund the Term Loan Advance, as it may be changed as provided
herein.
APPLICABLE LENDING OFFICE -- means, for Administrative Agent and each Lender and
for each Loan, the Applicable Lending Office of Administrative Agent or such
Lender (or of an Affiliate of such Lender) designated for such Loan on the
signature pages hereof or such other office of such Lender (or an Affiliate of
Administrative Agent or such Lender) as Administrative Agent or such Lender may
from time to time specify to Administrative Agent (in the case of another
Lender) and Borrower by written notice in accordance with the terms hereof as
the office by which its Loans are to be made and maintained.
ASBESTOS MATERIAL -- either asbestos or asbestos-containing materials.
ASSIGNED COLLATERAL -- any tangible or intangible property of Borrower, now
owned or hereafter acquired, other than the Personal Property Collateral in
which Lender holds or will hold a Security Interest under a Collateral
Assignment to secure payment or performance of any of the Loan Obligations as
required or contemplated under Section 8.3, and all proceeds thereof.
iii
BASE RATE -- for any day, the rate per annum equal to the higher of (a) the
Federal Funds Rate (as such rate may fluctuate from time to time as provided for
herein) for such day plus 0.5% and (b) the Prime Rate (as such rate may
fluctuate from time to time as provided for herein) for such day. Any change in
the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall
be effective on the effective date of such change in the Prime Rate or Federal
Funds Rate. The interest rate so designated from time to time as the Base Rate
by Administrative Agent is a reference rate and does not necessarily represent
the lowest or best rate charged to any customer of Administrative Agent or any
other Lender.
BASE RATE ADVANCE -- an Advance that will become a Base Rate Loan.
BASE RATE MARGIN- is specified in Section 4.5.
BASE RATE LOAN -- any portion of a Loan on which interest accrues at the Base
Rate.
BENEFICIAL OWNER -- as defined in Rule 13-D-3 of the Securities and Exchange
Commission.
BORROWER - TALX Corporation, a Missouri corporation.
BORROWING OFFICER -- each officer of Borrower who is authorized to submit a
request for an Advance or the issuance of a Letter of Credit on behalf of
Borrower.
BUSINESS DAY-- a day other than a Saturday, Sunday or other day on which
commercial banks are authorized or required to close under the Laws of either
the United States or the State of Illinois and when used in connection with
Eurodollar Loans, also a day other than any day on which dealings in U.S. Dollar
deposits are not carried on in the London interbank market.
CAPITAL EXPENDITURE - an expenditure for an asset that must be depreciated or
amortized under GAAP, for goodwill, or for any asset that under GAAP must be
treated as a capital asset, including payments under Capital Leases excluding
expenditures for internally developed software. An expenditure for purposes of
this definition includes any deferred or seller financed portion of the purchase
price of an asset and includes the Capital Expenditure Equivalent of a Capital
Lease. The CAPITAL EXPENDITURE Equivalent of a Capital Lease is the amount which
would have been the aggregate cost of the property leased if it had been
purchased rather than leased. Capital Expenditures do not include the amount
expended in connection with any Permitted Acquisition.
CAPITAL LEASE -- any lease that has been or should be capitalized under GAAP.
CHARTER DOCUMENTS -- the articles or certificate of incorporation and bylaws of
a corporation; the certificate of limited partnership and partnership agreement
of a limited partnership; the partnership agreement of a general partnership;
the articles of organization and operating agreement of a limited liability
company; or the indenture of a trust.
CLAIMS ACT -- the Assignment of Claims Act of 1940.
iv
COBRA -- the Consolidated Omnibus Budget Reconciliation Act.
CODE -- the Internal Revenue Code of 1986 and all regulations thereunder of the
IRS.
COLLATERAL -- all of the Personal Property Collateral, the Assigned Collateral,
any other property in which Administrative Agent or a Lender has a Security
Interest to secure payment or performance of all or any of the Loan Obligations
and all proceeds and products thereof.
COLLATERAL ASSIGNMENT -- any of the collateral assignments required or
contemplated under Section 8.3 to be executed and delivered to Lender.
COMMITMENT -- either the Term Loan Commitment or Revolving Loan Commitment of a
Lender, or the Letter of Credit Commitment of Letter of Credit Issuer.
COMMITMENT FEE -- the fee payable to Administrative Agent as required in Section
5.1
COMMONLY CONTROLLED ENTITY -- a Person which is under common control with
another Person within the meaning of Section 414(b) or (c) of the Code.
COMPLIANCE CERTIFICATE - defined in Section 14.14
CONTRACT -- any contract, note, bond, indenture, lease, deed, mortgage, deed of
trust, security agreement, pledge, hypothecation agreement, assignment, or other
agreement or undertaking, or any security.
COVERED PERSON -- defined in Section 2.3.
CURRENT ACQUISITIONS -- the transactions contemplated under that certain
Acquisition Agreement dated March 27, 2002 between Borrower and Xxxxx X. Xxxxx,
Inc., Profit Sharing and ESOP and the principal holders of option to acquire
capital stock of Xxxxx X. Xxxxx, Inc., a Missouri corporation and that certain
Asset Purchase Agreement dated March 27, 2002 between Borrower, Xxxxxx
Acquisition Sub, Inc., a Missouri corporation and Gates, XxXxxxxx & Co., an Ohio
corporation.
DEFAULT -- any of the events listed in Section 17.1 of this Agreement, without
giving effect to any requirement for the giving of notice, for the lapse of
time, or both, or for the happening of any other condition, event or act.
v
DEFAULT RATE -- the rate of interest payable on each Loan after its Maturity and
in certain other circumstances as provided in Section 4.10.
DISCLOSURE SCHEDULE -- the disclosure schedule of Borrower attached hereto as
Exhibit 12.
DOL -- the United States Department of Labor.
DOLLARS and the sign $ -- lawful money of the United States.
DEFAULTING LENDER - is defined in Section 7.5.
vi
EBITDA - is defined in Section 16.1.
EFFECTIVE DATE -- the date when this Agreement is effective as provided in
Section 1.
ELIGIBLE ASSIGNEE -- means (i) a Lender; (ii) an Affiliate of a Lender; and
(iii) any other Person approved by Administrative Agent; provided, however, that
neither Borrower, any Covered Person, any Guarantor nor an Affiliate of Borrower
or Guarantor shall qualify as an Eligible Assignee.
EMPLOYMENT LAW -- ERISA, the Occupational Safety and Health Act, the Fair Labor
Standards Act, or any other Law pertaining to the terms or conditions of labor
or safety in the workplace or discrimination or sexual harassment in the
workplace.
ENVIRONMENTAL LAW -- the Resource Conservation and Recovery Act, the
Comprehensive Environmental Response, Compensation and Liability Act, the Clean
Water Act, the Clean Air Act, or any other Law pertaining to environmental
quality or remediation of Hazardous Material.
EPA -- the United States Environmental Protection Agency.
ERISA -- the Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE -- as to any Person, any trade or business (irrespective of
whether incorporated) which is a member of a group of which such Person is a
member and thereafter treated as a single employer under 414(b), (c), (m) or (o)
of the Code or applicable Treasury Regulations.
EURODOLLAR ADVANCE -- an Advance that will become a Eurodollar Loan.
EURODOLLAR MARGIN-- is defined in Section 4.5
EURODOLLAR LOAN -- any portion of an Aggregate Loan on which interest accrues at
the Adjusted Eurodollar Rate.
vii
EURODOLLAR RATE -- for the applicable Interest Period therefor, the interest
rate per annum equal to the quotient of
(i) the rate per annum (rounded upwards, if necessary, to the nearest 1/16
of 1%), as determined by Administrative Agent as appearing on the Dow Xxxxx
Market Page 3750 (or any successor page) as the London interbank offered
rate for deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term Eurodollar Rate shall mean, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) appearing on Reuters Screen LIBO Page
as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period
(provided, however, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates (rounded upwards, if necessary, to the nearest 1/100 of 1%)),
divided by
(ii) an amount equal to one minus the maximum rate (expressed as a decimal)
at which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the FRB or any other Governmental
Authority to which any Lender is subject (or any successor) against,
including, in the case of Eurodollar Loans, Eurocurrency liabilities (as
such term is used in Regulation D). Without limiting the effect of the
foregoing, the reserve requirement shall reflect any other reserves
required to be maintained by any Lender with respect to any category of
liabilities which includes deposits by reference to which the Eurodollar
Rate is to be determined, or any category of extensions of credit or other
assets which include Eurodollar Loans. (The entire amount of a Eurodollar
Loan shall be deemed to constitute a Eurocurrency liability and as such
shall be deemed to be subject to such reserve requirements without benefit
of credits for proration, exceptions or setoffs which may be available from
time to time to any Lender under Regulation D.) The Eurodollar Rate shall
be adjusted automatically on and as of the effective date of any change in
any such reserve requirements.
EVENT OF DEFAULT -- any of the events listed in Section 17.1 of this Agreement
as to which any requirement for the giving of notice, for the lapse of time, or
both, or for the happening of any further condition, event or act has been
satisfied.
EXECUTION DATE -- the date when this Agreement has been executed.
EXISTING DEFAULT -- a Default which has occurred and is continuing, or an Event
of Default which has occurred, and which has not been waived in writing by the
Required Lenders, or all of the Lenders if required by Section 21.2.
viii
FEDERAL FUNDS RATE -- for any day, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) 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 on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal Funds Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the Federal
Funds Rate for such day shall be the average rate charged to Administrative
Agent (in its individual capacity) on such day on such transactions as
determined by Administrative Agent.
FINANCIAL STATEMENTS -- the most recent of the Initial Financial Statements and
the financial statements of Borrower required to be furnished to Administrative
Agent under Section 14.14 of this Agreement.
ix
FIXED CHARGES - is defined in Section 16.1.
FRB -- the Board of Governors of the Federal Reserve System and any successor
thereto or to the functions thereof.
FRONTING FEE -- the fee payable to Letter of Credit Issuer as required in
Section 5.4.
GAAP -- those generally accepted accounting principles set forth in Statements
of the Financial Accounting Standards Board and in Opinions of the Accounting
Principles Board of the American Institute of Certified Public Accountants or
which have other substantial authoritative support in the United States and are
applicable in the circumstances, as applied on a consistent basis.
GOVERNMENTAL AUTHORITY -- the federal government of the United States; the
government of any foreign country that is recognized by the United States or is
a member of the United Nations; any state of the United States; any local
Government or municipality within the territory or under the jurisdiction of any
of the foregoing; any department, agency, division, or instrumentality of any of
the foregoing; and any court, arbitrator, or board of arbitrators whose orders
or judgements are enforceable by or within the territory of any of the
foregoing.
GROUP -- as used in Regulation 13-D issued by the Securities and Exchange
Commission.
GUARANTOR -- each of the Persons required under this Agreement to execute and
deliver to Administrative Agent for the benefit of Lenders a guaranty of part or
all of the Loan Obligations.
GUARANTY -- each guaranty of part or all of the Loan Obligations executed and
delivered to Administrative Agent for the benefit of Lenders by any Guarantor.
HAZARDOUS MATERIAL -- any hazardous, radioactive, toxic, solid or special waste,
material, substance or constituent thereof, or any other such substance (as
defined under any applicable Law or regulation), including Asbestos Material.
HAZARDOUS MATERIAL does not include materials or products containing hazardous
constituents which are not considered to be waste under the applicable
Environmental Law or which are considered to be waste but are transported,
handled or disposed of in accordance with the applicable Environmental Law, or
Asbestos Material which is not friable.
INDEBTEDNESS -- as to any Person at any particular date, any contractual
obligation enforceable against such Person (i) to repay borrowed money; (ii) to
pay the deferred purchase price of property or services; (iii) to make payments
or reimbursements with respect to bank acceptances or to a factor; (iv) to make
payments or reimbursements with respect to letters of credit whether or not
there have been drawings thereunder; (v) with respect to which there is any
Security
x
Interest in any property of such Person; (vi) to make any payment or
contribution to a Multi-Employer Plan; (vii) that is evidenced by a note, bond,
debenture or similar instrument; (viii) under any conditional sale agreement or
title retention agreement; or (ix) to pay interest or fees with respect to any
of the foregoing. INDEBTEDNESS also includes any other Obligation that either
(i) is non-contingent and liquidated in amount or (ii) should under GAAP be
included in liabilities and not just as a footnote on a balance sheet.
INDIRECT OBLIGATION -- as to any Person, (a) any guaranty by such Person of any
Obligation of another Person; (b) any Security Interest in any property of such
Person that secures any Obligation of another Person; (c) any enforceable
contractual requirement that such Person (i) purchase an Obligation of another
Person or any property that is security for such Obligation, (ii) advance or
contribute funds to another Person for the payment of an Obligation of such
other Person or to maintain the working capital, net worth or solvency of such
other Person as required in any documents evidencing an Obligation of such other
Person, (iii) purchase property, securities or services from another Person for
the purpose of assuring the beneficiary of any Obligation of such other Person
that such other Person has the ability to timely pay or discharge such
Obligation, (iv) grant a Security Interest in any property of such Person to
secure any Obligation of another Person, (v) otherwise assure or hold harmless
the beneficiary of any Obligation of another Person against loss in respect
thereof; (d) any Obligation arising from the endorsement by such Person of an
instrument; (e) any Obligation of such Person as a surety; and (f) any other
contractual requirement enforceable against such Person that has the same
substantive effect as any of the foregoing. The term INDIRECT OBLIGATION does
not, however, include the endorsement by a Person of instruments for deposit or
collection in the ordinary course of business or the liability of a general
partner of a partnership for Obligations of such partnership. The amount of any
Indirect Obligation of a Person shall be deemed to be the stated or determinable
amount of the Obligation in respect of which such Indirect Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof as determined by such Person in good faith.
INITIAL FINANCIAL STATEMENTS -- the financial statements (not including the
proforma financial statements) of Borrower referred to in Section 10.1.2.
xi
INSURANCE/CONDEMNATION PROCEEDS -- insurance proceeds payable as a consequence
of damage to or destruction of any of the Collateral and proceeds payable as a
consequence of condemnation or sale in lieu of condemnation of any of the
Collateral.
INTELLECTUAL PROPERTY -- as to any Person, any domestic or foreign patents or
patent applications of such Person, any inventions made or owned by such Person
upon which either domestic or foreign patent applications have not yet been
filed, any domestic or foreign trade names or trademarks of such Person, any
domestic or foreign trademark registrations or applications filed by such
Person, any domestic or foreign service marks of such Person, any domestic or
foreign service xxxx registrations and applications by such Person, any domestic
or foreign copyrights of such Person, and any domestic or foreign copyright
registrations or applications by such Person.
INTELLECTUAL PROPERTY ASSIGNMENT -- each assignment of Intellectual Property
that Borrower executes and delivers to Administrative Agent for the benefit of
Lenders, either on or after the Execution Date.
INTEREST EXPENSE - is defined in Section 16.1.
INTEREST HEDGE OBLIGATION -- any obligations of Borrower to Administrative Agent
or any Affiliate of Administrative Agent under an agreement or agreements
between Borrower and Administrative Agent or any Affiliate of Administrative
Agent under which the exposure of Borrower to fluctuations in interest rates is
effectively limited, whether in the form of one or more interest rate cap,
collar, or corridor agreements, interest rate swaps, or the like, or options
therefor.
INTEREST PERIOD -- the period during which a particular Adjusted Eurodollar Rate
applies to a Eurodollar Loan, as selected by Borrower as provided in Section
4.8.
INVENTORY -- goods owned and held by a Person for sale, lease or resale or
furnished or to be furnished under contracts for services, and raw materials,
goods in process, materials, component parts and supplies used or consumed, or
held for use or consumption in such Person's business.
INVESTMENT -- (a) a loan or advance of money or property to a Person, (b) stock,
membership interest, or other equity interest in a Person, (c) a debt instrument
issued by a Person, whether or not convertible to stock, membership interest, or
other equity interest in such Person, or (d) any other interest in or rights
with respect to a Person which include, in whole or in part, a right to
xii
share, with or without conditions or restrictions, some or all of the revenues
or net income of such Person.
IRS -- the Internal Revenue Service.
LASALLE - LaSalle Bank National Association.
LAW -- any statute, rule, regulation, order, judgment, award or decree of any
Governmental Authority.
LENDER -- any one of the lenders listed on Exhibit 3 to this Agreement,
including Administrative Agent in its capacity as a lender, or any Person who
takes an assignment from any of such lenders of all or a portion of its rights
and obligations as a lender under this Agreement pursuant to Section 20.4.1 and
an Assignment and Acceptance as provided therein.
LENDERS' EXPOSURE -- the sum of the Aggregate Revolving Loan Commitment, the
Aggregate Term Loan and the Letter of Credit Exposure.
LETTER OF CREDIT -- any standby or commercial (documentary) letter of credit
issued by Letter of Credit Issuer pursuant to the Letter of Credit Commitment.
LETTER OF CREDIT AGREEMENT - DEFINED IN SECTION 11.1.
xiii
LETTER OF CREDIT COMMITMENT -- the commitment of the Letter of Credit Issuer to
issue Letters of Credit as provided in Section 3.3.
LETTER OF CREDIT EXPOSURE -- the undrawn amount of all outstanding letters of
credit issued under the Letter of Credit Commitment plus all amounts drawn on
such letters of credit and not yet reimbursed by Borrower.
LETTER OF CREDIT FEE -- the fee payable to Administrative Agent and Lenders as
required in Section 5.3.
xiv
LETTER OF CREDIT ISSUER - LaSalle, or any other Lender succeeding to LaSalle's
commitment to issue Letters of Credit pursuant to Section 3.3.
LOAN -- a Revolving Loan or a Term Loan.
LOAN AGREEMENT - this Agreement.
LOAN DOCUMENTS -- this Agreement, the Notes, the Guaranties, the Security
Documents, any reimbursement agreement between Borrower and the Letter of Credit
Issuer and all other agreements, certificates, documents, instruments and other
writings executed from time to time in connection herewith or related hereto.
LOAN OBLIGATIONS -- all of Borrower's Indebtedness owing to Letter of Credit
Issuer, Administrative Agent or Lenders under the Loan Documents, whether as
principal, interest, fees or otherwise, all reimbursement obligations of
Borrower to Letter of Credit Issuer or Lenders with respect to the Letter of
Credit Exposure, all Obligations to Administrative Agent, and all other
obligations and liabilities of Borrower to Administrative Agent or Lenders under
the Loan Documents and all Interest Hedge Obligations (in each case including
all extensions, renewals, modifications, rearrangements, restructures,
replacements and refinancings of the foregoing, whether or not the same involve
modifications to interest rates or other payment terms), whether now existing or
hereafter created, absolute or contingent, direct or indirect, joint or several,
secured or unsecured, due or not due, contractual or tortious, liquidated or
unliquidated, arising by operation of law or otherwise, including but not
limited to the obligation of Borrower to repay future advances by Administrative
Agent or Lenders hereunder, whether or not made pursuant to commitment and
whether or not presently contemplated by Borrower, Administrative Agent or
Lenders in the Loan Documents.
xv
LOCAL TIME -- the local time in the city in which Administrative Agent's address
is located, as set forth on the signature page hereto (as changed from time to
time in accordance with the terms hereof).
MARGIN -- the Base Rate Margin or Eurodollar Margin.
MATERIAL ADVERSE EFFECT -- as to any Covered Person and with respect to any
event or occurrence of whatever nature (including any adverse determination in
any litigation, arbitration, investigation or proceeding), a material adverse
effect on (i) the business, operations, revenues, financial condition, property,
or business prospects of the Borrower specifically or of such Subsidiaries taken
as a whole, (ii) the value of the Collateral, (iii) the validity or
enforceability of the Loan Documents, (iv) the ability of such Person to timely
pay or perform such Covered Person's Obligations generally, (v) in the case of
Borrower specifically, the ability of Borrower to pay or perform any of
Borrower's Obligations to Lender, or (vi) in the case of a Guarantor
specifically, the ability of such Guarantor to pay or perform any of its
Obligations under the terms of its Guaranty.
MATERIAL AGREEMENT -- as to any Person, any Contract to which such Person is a
party or by which such Person is bound which, if violated or breached, has or is
reasonably likely to have a Material Adverse Effect on the Borrower specifically
or the Subsidiaries taken as a whole including without limitation all
Acquisition Documents.
MATERIAL LAW -- any separately enforceable provision of a Law whose violation by
a Person has or is reasonably likely to have a Material Adverse Effect on the
Borrower specifically or the Subsidiaries taken as a whole.
MATERIAL LICENSE -- (i) as to any Covered Person, any license, permit or consent
from a Governmental Authority or other Person and any registration and filing
with a Governmental Authority or other Person which if not obtained, held or
made by such Covered Person has or is reasonably likely to have a Material
Adverse Effect on the Borrower specifically or the Subsidiaries taken as a
whole, and (ii) as to any Person who is a party to this Agreement or any of the
other Loan Documents, any license, permit or consent from a Governmental
Authority or other Person and any registration or filing with a Governmental
Authority or other Person that is necessary for the execution or performance by
such party, or the validity or enforceability against such party, of this
Agreement or such other Loan Document.
MATERIAL OBLIGATION -- as to any Person, an Obligation of such Person which if
not fully and timely paid or performed has or is reasonably likely to have a
Material Adverse Effect on the Borrower specifically or the Subsidiaries taken
as a whole.
MATERIAL PROCEEDING -- any litigation, investigation or other proceeding by or
before any Governmental Authority (i) which involves any of the Loan Documents
or any of the transactions contemplated thereby, or involves a Covered Person or
a Guarantor as a party or any property of Covered Person or a Guarantor, and has
or is reasonably likely to have a Material Adverse Effect on the Borrower
specifically or the Subsidiaries taken as a whole if adversely determined, (ii)
in which there has been issued an injunction, writ, temporary restraining order
or
xvi
any other order of any nature which purports to restrain or enjoin the making of
any Advance, the consummation of any other transaction contemplated by the Loan
Documents, or the enforceability of any provision of any of the Loan Documents,
(iii) which involves the actual or alleged breach or violation by a Covered
Person of, or default by a Covered Person under, any Material Agreement, or (iv)
which involves the actual or alleged violation by a Covered Person or any
Guarantor of any Material Law.
MATURITY -- as to any Indebtedness, the time when it becomes payable in full,
whether at a regularly scheduled time, because of acceleration or otherwise.
MAXIMUM AVAILABLE AMOUNT -- the maximum Dollar amount available for Revolving
Loan Advances on any date as limited in Section 3.1.2, as it may be changed as
provided herein.
MULTI-EMPLOYER PLAN -- a Pension Benefit Plan which is a multi-employer plan as
defined in Section 4001(a)(3) of ERISA.
NOTE -- any Revolving Note or Term Note.
OBLIGATION -- as to any Person, any Indebtedness of such Person, any guaranty by
such Person of any Indebtedness of another Person, and any contractual
requirement enforceable against such Person that does not constitute
Indebtedness of such Person or a guaranty by such Person but which would involve
the expenditure of money by such Person if complied with or enforced.
OBLIGATIONS TO ADMINISTRATIVE AGENT -- exclusive of all the Loan Obligations,
all of Borrower's Indebtedness owing to Administrative Agent (whether as
principal, interest, fees or otherwise), all obligations of Borrower under
agreements between Borrower and Administrative Agent under which the exposure of
Borrower to fluctuations in interest rates is effectively limited, whether in
the form of interest rate cap, collar or corridor agreements, interest rate
swaps, or the like, or options therefor, all Indirect Obligations of Borrower
owing to Administrative Agent, all reimbursement obligations of Borrower to
Administrative Agent with respect to letters of credit, and all other
obligations and liabilities of Borrower to Administrative Agent including all
extensions, renewals, modifications, rearrangements, restructures, replacements
and refinancings of the foregoing, whether or not the same involve modifications
to interest rates or other payment terms), whether now existing or hereafter
created, absolute or
xvii
contingent, direct or indirect, joint or several, secured or unsecured, due or
not due, contractual or tortious, liquidated or unliquidated, arising by
operation of law or otherwise, or acquired by Administrative Agent outright,
conditionally or as collateral security from another, including the obligation
of Borrower to repay future advances by Administrative Agent, whether or not
made pursuant to commitment and whether or not presently contemplated by
Borrower and Administrative Agent.
OPERATING LEASE -- any lease that is not a Capital Lease.
PBGC -- the Pension Benefit Guaranty Corporation.
PENSION BENEFIT PLAN -- any pension or profit-sharing plan which is covered by
Title I of ERISA and all other benefit plans, in each case in respect of which a
Covered Person or a Commonly Controlled Entity of such Covered Person is an
employer as defined in Section 3(5) of ERISA.
PERMITTED ACQUISITIONS -- any acquisition by Borrower or a Covered Person of
stock, membership interests, or other equity interests of another Person or the
assets of another Person permitted under Section 15.7.
xviii
PERMITTED DISTRIBUTIONS -- any Distributions permitted under Section 15.10.
PERMITTED INDEBTEDNESS -- Indebtedness that Borrower is permitted under Section
15.2 to incur, assume, or allow to exist.
xix
PERMITTED INDIRECT OBLIGATIONS -- Indirect Obligations that Borrower is
permitted under Section 15.4 to create, incur, assume, or allow to exist.
PERMITTED INVESTMENTS -- Investments that Borrower is permitted under Section
15.1 to make in other Persons.
PERMITTED SECURITY INTERESTS -- Security Interests that Borrower is permitted
under Section 15.5 to create, incur, assume, or allow to exist.
PERSON -- any individual, partnership, corporation, trust, unincorporated
association, joint venture, limited liability company, Governmental Authority,
or other organization in any form that has the legal capacity to xxx or be sued.
If the context so implies or requires, the term Person includes Borrower.
PERSONAL PROPERTY COLLATERAL -- all of the Goods, Equipment, Accounts,
Inventory, Instruments, Documents, Chattel Paper, General Intangibles and other
personal property of Borrower, whether now owned or hereafter acquired, and all
proceeds thereof, in which Administrative Agent at any time holds a Security
Interest for the benefit of Lenders.
PLEDGE AGREEMENT -- any pledge agreement required or contemplated under Section
8.3 to be executed and delivered to Administrative Agent for the benefit of
Lenders.
PRIME RATE --on any day, the rate of interest per annum then most recently
established by Administrative Agent as its Prime Rate. Such rate is a general
reference rate of interest, may not be related to any other rate, and may not be
the lowest or best rate actually charged by Administrative Agent to any customer
or a favored rate and may not correspond with future increases or decreases in
interest rates charged by other lenders or market interest rates in general.
PROFORMA FINANCIAL STATEMENTS -- the proforma financial statements referred to
in Section 10.1.2.
xx
RATE AGREEMENT -- (a) any and all agreements, devices or arrangements (including
all schedules, amendments and supplements thereto and all documents and
confirming evidence now or hereafter exchanged between the counterparties
confirming the transactions governed by such agreements devices or arrangements)
designed to protect at least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to such party's
assets, liabilities or exchange transactions, including, but not limited to,
Dollar-denominated or cross-currency interest rate exchange agreements, forward
currency exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and those
commonly known as interest rate "swap" agreements; and (b) any and all
cancellations, buybacks, reversals, terminations or assignments of any of the
foregoing.
REGULATION D, REGULATION T, REGULATION U and REGULATION X -- respectively,
Regulation D issued by the FRB, Regulation T issued by the FRB, Regulation U
issued by the FRB and Regulation X issued by the FRB.
REPORTABLE EVENT -- a reportable event as defined in Title IV of ERISA or the
regulations thereunder.
REPRESENTATIONS AND WARRANTIES -- The representations and warranties made by any
Covered Person with respect to itself and any other Covered Persons in Section
12, and the representations and warranties made in any other Loan Document or
certificate, report or opinion delivered by Borrower, any Guarantor, or any
other Covered Person pursuant to the Loan Documents, as such representations and
warranties are modified from time to time as provided in Section 13.
xxi
REQUIRED LENDERS -- defined in Section 2.4.
RESPONSIBLE OFFICER -- as to any Person that is not an individual, partnership,
limited liability company or trust, the Chairman of the Board of Directors, the
President, the chief executive officer, the chief operating officer, the chief
financial officer, the Treasurer, any Assistant to the Treasurer, or any Vice
President in charge of a principal business unit; as to any partnership, any
individual who is a general partner thereof or any individual who has general
management or administrative authority over all or any principal unit of the
partnership's business; as to any limited liability company, any managing
member, or manager, any individual who has general management or administrative
authority over all or any principal unit of the limited liability company's
business; and as to any trust, any individual who is a trustee.
REVOLVING LOAN -- any Lender's pro-rata share of the Aggregate Revolving Loan.
REVOLVING LOAN ADVANCE -- an Advance by Administrative Agent that is to be
funded by Lenders under the Aggregate Revolving Loan Commitment.
REVOLVING LOAN COMMITMENT -- the commitment of each Lender as stated in Section
3.1.1. to fund Revolving Loan Advances.
xxii
REVOLVING LOAN MATURITY DATE -- the date when Borrower must repay the amount of
Aggregate Revolving Loan then outstanding as provided in Section 6.1.2.
REVOLVING LOAN UNUSED FEE - the fee described in Section 5.2.
xxiii
REVOLVING NOTE -- any note delivered to a Lender as required by Section 3.1.3 to
evidence Borrower's obligation to repay such Lender's Revolving Loan.
SCHEDULED REDUCTION -- an automatic reduction in the Aggregate Revolving Loan
Commitment as provided in Section 3.1.1.
SECURITY AGREEMENT -- any security agreement required or contemplated under
Section 8.2 to be executed and delivered to Administrative Agent for the benefit
of Lenders.
xxiv
SECURITY DOCUMENTS -- all of the documents required or contemplated to be
executed and delivered to Administrative Agent for the benefit of Lenders under
Section 8, all other documents granting a Security Interest in any asset of
Borrower or any other Person to secure the payment or performance of any of the
Loan Obligations from time to time, including any such documents listed on
Exhibit 10.1.1 and any similar documents at any time executed and delivered to
Administrative Agent for the benefit of Lenders from time to time, by Borrower,
any Covered Person, or any other Person to secure payment or performance of any
of the Loan Obligations.
SECURITY INTEREST -- as to any item of tangible or intangible property, any
interest therein or right with respect thereto that secures an Obligation or
Indirect Obligation, whether such interest or right is created under a Contract,
or by operation of law or statute (such as but not limited to a statutory lien
for work or materials), or as a result of a judgment, or which arises under any
form of preferential or title retention agreement or arrangement (including a
conditional sale agreement or a lease) that has substantially the same economic
effect as any of the foregoing.
SELLER - any Person who is a party to the Current Acquisitions or any Permitted
Acquisition other than Borrower or a Covered Person.
SENIOR INDEBTEDNESS - is defined in Section 16.1.
SOLVENT -- as to any Person, such Person not being "insolvent" within the
meaning of Section 101(32) of the Bankruptcy Code, Section 2 of the Uniform
Fraudulent Transfer Act (the "UFTA") or Section 3 of the Illinois Uniform
Fraudulent Transfer Act set forth in Section 160/3 of the Illinois Compiled
Statutes (1996) (the "Illinois UFTA"), (ii) such Person not having unreasonably
small capital, within the meaning of Section 548 of the Bankruptcy Code, Section
4 of the UFTA, or Section 5 of the Illinois UFTA, and (iii) such Person not
being unable to pay such Person's debts as they become due within the meaning of
Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the
Illinois UFTA.
SOUTHWEST - Southwest Bank of St. Louis
SUBSIDIARY -- as to any Person, another Person with respect to which more than
50% of the outstanding shares of stock or other equity interests of each class
having ordinary voting power (other than stock having such power only by reason
of the happening of a contingency) is at the time owned by such Person or by one
or more Subsidiaries of such Person.
xxv
SURVIVING COMPANY - as applicable, either (i) the Person that will own the
assets to be acquired from a Target Company in a Permitted Acquisition upon the
consummation thereof, or (ii) the survivor of the merger of an Acquiring Company
with the Target Company in a Permitted Acquisition upon the consummation
thereof.
TARGET COMPANY -- the Person whose assets or stock, membership interests, or
other equity interests will be acquired in a Permitted Acquisition upon the
consummation thereof, or if applicable, with which an Acquiring Company will
merge in a Permitted Acquisition upon the consummation thereof.
TAX -- as to any Person, any tax, duty, impost, deduction, charges,
withholdings, assessment, fee, or other charge levied by a Governmental
Authority (and all liabilities associated therewith) on the income or property
of such Person, including any interest or penalties thereon, and which is
payable by such Person.
TERM LOAN -- any Lender's pro-rata share of the Aggregate Term Loan.
TERM LOAN ADVANCE -- the Advance by Administrative Agent that is to be funded by
Lenders under the Aggregate Term Loan Commitment.
TERM LOAN COMMITMENT -- the commitment of each Lender as stated in Section 3.2
to fund the Term Loan Advance.
TERM LOAN MATURITY DATE -- the date when Borrower must repay the amount of the
Aggregate Term Loan then outstanding as provided in Section 6.2.2.
TERM NOTE -- any note delivered to a Lender as required by 3.2.2 to evidence
Borrower's obligation to repay such Lender's Term Loan.
THIS AGREEMENT -- this document (including every document that is stated herein
to be an appendix, exhibit or schedule hereto, whether or not physically
attached to this document).
TOTAL INDEBTEDNESS - is defined in Section 16.1.
TRAILING PERIOD - as set forth in Section 16.3.
xxvi
UCC -- the Uniform Commercial Code as in effect from time to time in the State
of Illinois or such other similar statute as in effect from time to time in
Illinois or any other appropriate jurisdiction.
UNITED STATES -- when used in a geographical sense, all the states of the United
States of America and the District of Columbia; and when used in a legal
jurisdictional sense, the government of the country that is the United States of
America.
WAGE AND HOUR LAWS -- the Xxxxx-Xxxxx Act, the Service Contract Act, the
Contract Work Hours & Safety Standards Act and any other federal Law governing
wage compensation or hours of work.
WELFARE BENEFIT PLAN -- any plan described by Section 3(1) of ERISA.
xxvii
EXHIBIT 3
LENDERS' COMMITMENTS AND PRO-RATA SHARES
------------------------ --------------------- ---------------------- ------------------------ ------------------
LENDER TOTALS REVOLVING LOAN TERM LOAN COMMITMENT PRO-RATA
COMMITMENT SHARES
------------------------ --------------------- ---------------------- ------------------------ ------------------
LaSalle Bank National $27,000,000.00 $6,750,000.00 $20,250,000.00 67.5%
Association
------------------------ --------------------- ---------------------- ------------------------ ------------------
Southwest Bank of $13,000,000.00 $3,250,000.00 $9,750,000.00 32.5%
St. Louis
------------------------ --------------------- ---------------------- ------------------------ ------------------
AGGREGATES $40,000,000.00 $10,000,000.00 $30,000,000.00 100.00%
------------------------ --------------------- ---------------------- ------------------------ ------------------
EXHIBIT 7.10
LOAN REQUEST CERTIFICATE
(REVOLVING LOANS)
To: LaSalle Bank Nation Association
From: TALX Corporation (the "Company")
This Loan Request Certificate is delivered pursuant to the Loan
Agreement (the "Loan Agreement") dated March __, 2002 by and among LaSalle Bank
National Association, individually and as Administrative Agent ("Agent"),
Southwest Bank of St. Louis ("SWB") and TALX Corporation ("Borrower"). All terms
used herein shall have the meaning set forth in the Loan Agreement.
1. REVOLVING LOAN COMMITMENT: $ 10,000,000.00
----------------
2. LESS Letters of Credit issued for the account
of Borrower (not to exceed $1,000,000.00): $
-----------------
3. SubTotal: $
-----------------
4. Less Total Revolving Credit Loans outstanding
to Borrower (not to exceed #3) $
-----------------
5. AVAILABILITY EXCESS/(DEFICIT) [= #3 - #4] $
==================
6. New Loan Request: The undersigned hereby requests Lender to
make and disburse a Revolving Loan to Borrower in the amount
of: $
7. INTEREST RATE REQUESTED: The undersigned hereby elects (1) _______ Adjusted Base Rate
for interest to accrue on the Revolving Loan requested herein on (2) _______ One-month Eurodollar
the basis of (Select One): (3) _______ Two-month Eurodollar
(4) _______ Three-month Eurodollar
(5) _______ Six-month Eurodollar
8. ADVANCE DATE REQUESTED:
The undersigned hereby represents, warrants, ratifies and confirms that
all representations and warranties of Borrower contained in the Loan Agreement
are true and correct, that Borrower is in compliance with all covenants of
Borrower contained in the Loan Agreement, that no Event of Default under the
Loan Agreement has occurred and is continuing and no event that but for the
passage of time or the giving of notice would be an Event of Default under the
Loan Agreement has occurred and is continuing and that all information contained
in this Loan Request Certificate is true and correct.
EXECUTED this _____ day of ______________________, 200__.
TALX CORPORATION,
a Missouri corporation
By: _________________________________
Name: _______________________________
Title: _______________________________
EXHIBIT 10.1.1
DOCUMENTS AND REQUIREMENTS LIST
A. LOAN DOCUMENTS
1. Loan Agreement by and among Borrower, LBNA and SWB
a. Loan Request Certificate
b. Disclosure Schedule of Borrower
c. Insurance Certificate per ss.14.5 of Loan Agreement
2. Term Note in the principal amount of $20,250,000.00 from Borrower to
the order of LBNA
3. Term Note in the principal amount of $9,750,000.00 from Borrower to
the order of SWB
4. Revolving Note in the principal amount of $6,750,000.00 from Borrower
to the order of LBNA
5. Revolving Note in the principal amount of $3,250,000.00 from Borrower
to the order of SWB
6. Security Agreement from Borrower in favor of LBNA (as Agent)
7. Security Agreement from Ti3 in favor of LBNA (as Agent)
8. Security Agreement from GAS in favor of LBNA (as Agent)
9. Security Agreement from JEF in favor of LBNA (as Agent)
10. Guaranty of Ti3 in favor of LBNA (as Agent)
11. Guaranty of GAS in favor of LBNA (as Agent)
12. Guaranty of JEF in favor of LBNA (as Agent)
13. Stock Pledge by Borrower of Ti3 in favor of LBNA (as Agent)
a. Stock Power
b. Original Ti3 Stock Certificate representing 100% of the issued
and outstanding capital stock
14. Stock Pledge by Borrower of GAS in favor of LBNA (as Agent)
a. Stock Power
2
b. Original GAS Stock Certificate representing 100% of the issued
and outstanding capital stock
15. Stock Pledge by Borrower of JEF in favor of LBNA (as Agent)
a. Stock Power
b. Original JEF Stock Certificate representing 100% of the issued
and outstanding capital stock
16. Trademark and/or Patent Recordation Form Cover Sheet for notice of
Security Agreement
17. Collateral Assignment of Asset Purchase Agreement ("APA") to LBNA (as
Agent)
a. Copy of APA, including all exhibits and attachments
18. Collateral Assignment of Acquisition Agreement ("AA") to LBNA (as
Agent)
a. Copy of AA, including all exhibits and attachments
19. Authorization to pay funds
B. AUTHORIZATION DOCUMENTS
20. Missouri Good Standing Certificate of Borrower
21. Secretary's Certificate of Borrower, attesting to incumbency,
signature specimen and authenticity of (and attaching):
a. Certified Copy of By-Laws
b. Certified Copy of Articles of Incorporation
c. Authorizing Resolution
22. Texas Good Standing Certificate of Ti3
23. Secretary's Certificate of Ti3, attesting to incumbency, signature
specimen and authenticity of (and attaching):
a. Certified Copy of By-Laws
b. Certified Copy of Articles of Incorporation
c. Authorizing Resolution
24. Missouri Good Standing Certificate of GAS
3
25. Secretary's Certificate of GAS, attesting to incumbency, signature
specimen and authenticity of (and attaching):
a. Certified Copy of By-Laws
b. Certified Copy of Articles of Incorporation
c. Authorizing Resolution
26. Missouri Good Standing Certificate of JEF
27. Secretary's Certificate of JEF, attesting to incumbency, signature
specimen and authenticity of (and attaching):
a. Certified Copy of By-Laws
b. Certified Copy of Articles of Incorporation
c. Authorizing Resolution
28. Opinion of Counsel for Borrower, Xxxxxx, Xxxxx and Ti3
C. UCC AND SEARCH MATTERS
29. UCC Searches as to Borrower
a. Missouri Secretary of State
b. St. Louis County, Missouri
c. City of St. Louis, Missouri
30. UCC-1 Financing Statements from Borrower in favor of LBNA
a. Missouri Secretary of State
31. Judgment and Tax Lien Searches as to Borrower
32. United States Patent and Trademark Office Search as to Borrower
33. UCC Searches as to Ti3
a. Texas Secretary of State
x. Xxxxxx County, Texas
34. UCC-1 Financing Statements from Ti3 in favor of LBNA
a. Texas Secretary of State
35. Judgment and Tax Lien Searches as to Ti3
36. UCC Searches as to GAS
4
a. Missouri Secretary of State
b. St. Louis County, Missouri
c. City of St. Louis, Missouri
37. UCC-1 Financing Statements from GAS in favor of LBNA
a. Missouri Secretary of State
38. Judgment and Tax Lien Searches as to GAS
39. UCC Searches as to XXX
x. Missouri Secretary of State
b. St. Louis County, Missouri
c. City of St. Louis, Missouri
40. UCC-1 Financing Statements from JEF in favor of LBNA
a. Missouri Secretary of State
41. Judgment and Tax Lien Searches as to JEF
5
EXHIBIT 11.1
MASTER LETTER OF CREDIT AGREEMENT
[forms of application for standby
and commercial (documentary) letters of credit]
THIS PAGE LEFT BLANK INTENTIONALLY TO
MAINTAIN FORMATTING OF
MASTER LETTER CREDIT AGREEMENT
MASTER LETTER OF CREDIT AGREEMENT
Dated as of _________________
THIS MASTER LETTER OF CREDIT AGREEMENT (this "Agreement") is issued by the
undersigned applicant (the "Applicant") in favor of LaSalle Bank National
Association (together with its affiliates as set forth in Section II .8, the
"Bank").
The Applicant may from time to time request that the Bank issue letters of
credit for the account of the Applicant. The Applicant agrees that, except as
provided below, any such letter of credit shall be subject to the terms and
provisions of this Agreement, and the Applicant further agrees with and for the
benefit of the Bank as follows:
SECTION 1 CERTAIN DEFINITIONS. When used herein the following terms shall have
the following meanings (such definitions to be applicable to both the singular
and plural forms of such terms):
Application means, at any time, an application (which shall be in writing,
including by facsimile, or made by electronic transmission) for a letter of
credit to be issued by the Bank, specifying (a) the requested issuance date, the
amount, the beneficiary and the expiration date of such letter of credit, (b)
the documentary requirements for drawing thereunder and (c) such other
information as the Bank may reasonably request.
Business Day means any day on which the Bank is open for commercial banking
business at its principal office in Chicago, Illinois.
Event of Default means any of the events described in Section 9.1.
Item means any draft, order, instrument, demand or other document drawn or
presented, or to be drawn or presented, under any Letter of Credit.
ISP means at any time the most recent International Standby Practices issued by
the Institute for International Banking Law & Practice, Inc.
Letter of Credit means any letter of credit issued (including any letter of
credit issued prior to the date hereof) by the Bank for the account of the
Applicant (including any letter of credit issued jointly for the account of the
Applicant and any other Person), in each case as amended or otherwise modified
from time to time but excluding any letter of credit that is issued pursuant to
an Application which expressly provides that such letter of credit is not issued
pursuant to this Agreement. A letter of credit issued by the Bank pursuant to an
Application from the Applicant (either individually or together with any other
Person) shall be a Letter of Credit hereunder even if another Person is named as
the "Applicant" or "Account Party" in such letter of credit.
Liabilities means all obligations of the Applicant to the Bank and its
successors and assigns, howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, now or hereafter existing or due or to
become due, arising Out of or in connection with this Agreement, any Letter of
Credit, any Application or any instrument or document delivered in connection
herewith or therewith.
Person means any natural person, corporation, partnership, trust, limited
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
Prime Rate means the rate per annum established by the Bank from time to time as
its "Prime Rate" for commercial customers. The Prime Rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to
any customer.
UCC means at any time the Uniform Commercial Code as in effect in the State of
Illinois.
UCP means at any time the most recent Uniform Customs and Practice for
Documentary Credits issued by the International Chamber of Commerce.
Unmatured Event of Default means any event which if it continues uncured will,
with lapse of time or notice or both, constitute an Event of Default.
SECTION 2 LETTER OF CREDIT PROCEDURES.
2.1 Issuance of Letters of Credit. Subject to the terms and conditions of this
Agreement, the Bank may from time to time, in its sole and complete discretion,
issue Letters of Credit for the account of the Applicant; provided that the
terms and provisions of each Letter of Credit and the Application therefor shall
be satisfactory to the Bank in its discretion.
2.2 Applications. Not later than three Business Days prior to the date of the
proposed issuance of a Letter of Credit (Or such later date as the Bank shall
agree), the Applicant shall deliver an Application for such Letter of Credit to
the Bank. An Application may be sent by facsimile, by United States mail, by
overnight courier, by electronic transmission using the system provided by the
Bank, by personal delivery or by any other means acceptable to the Bank.
2.3 Form of Letters of Credit. (a) The Applicant authorizes the Bank to set
forth the terms of each Application in the Letter of Credit corresponding to
such Application (and in any amendment thereto) in such language as the Bank
deems appropriate, with such variations from such terms as the Bank may in its
discretion determine to be necessary (which determination shall be conclusive)
and not materially inconsistent with such Application. The Bank may, but shall
not be obligated to, request the Applicant to review the form of a Letter of
Credit prior to issuance thereof, in which case the Applicant shall be deemed to
have approved the form of such Letter of Credit. With respect to any other
Letter of Credit, the Applicant agrees that such Letter of Credit shall be
conclusively presumed to be in proper form unless the Applicant notifies the
Bank in writing of any inconsistency in such Letter of Credit within three
Business Days of its issuance. Upon receipt of timely notice of any discrepancy
in any Letter of Credit, the Bank will endeavor to obtain the consent of the
beneficiary and any confirming bank for an appropriate modification to such
Letter of Credit; provided that the Bank shall have no liability or
responsibility for its failure to obtain such consent.
(a) The Applicant accepts the risk that a Letter of Credit will be interpreted
or applied other than as intended by the Applicant to the extent such
Letter of Credit (i) permits presentation at a place other than the place
of issuance, (ii) permits application of laws or practice rules with which
the Applicant is unfamiliar, (iii) includes ambiguous, inconsistent or
impossible requirements, (iv) requires termination or reduction against a
presentation made by the Applicant rather than the beneficiary or (v)
fails to incorporate appropriate letter of credit practices rules.
2.4 Representations and Warranties. The delivery of each Application shall
automatically constitute a representation and warranty by the Applicant to the
Bank to the effect that on the requested date of issuance of such Letter of
Credit, (a) the representations and warranties of the Applicant set forth in
Section 4 shall be true and correct as of such requested date as though made on
the date thereof and (b) no Event of Default or Unmatured Event of Default shall
have then occurred and be continuing or will result from such issuance.
SECTION 3 REIMBURSEMENT OBLIGATIONS; RESPONSIBILITIES, ETC.
3.1 Reimbursement Obligations. The Applicant hereby agrees to reimburse the Bank
forthwith upon demand in an amount equal to any payment or disbursement made by
the Bank under any Letter of Credit or any time draft issued pursuant thereto,
together with interest on the amount so paid or disbursed by the Bank from and
including the date of payment or disbursement to but not including the date the
Bank is reimbursed by the Applicant at a rate per annum equal to the Prime Rate
from time to time in effect plus 2% (or, if less, the maximum rate permitted by
applicable law). The obligation of the Applicant to reimburse the Bank under
this Section 3 for payments and disbursements made by the Bank under any Letter
of Credit or any time draft issued pursuant thereto shall be absolute and
unconditional under any and all circumstances, including, without limitation,
the following:
(a) any failure of any Item presented under such Letter of Credit to strictly
comply with the terms of such Letter of Credit;
(b) the legality, validity, regularity or enforceability of such Letter of
Credit or of any Item presented thereunder;
(c) any defense based on the identity of the transferee of such Letter of
Credit or the sufficiency of the transfer if such Letter of Credit is
transferable;
(d) the existence of any claim, set-oft defense or other right that the
Applicant may have at any time against any beneficiary or transferee of
such Letter of Credit, the Bank or any other Person, whether in connection
with this Agreement, the transactions contemplated hereby or any unrelated
transaction;
(e) any Item presented under such Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect;
(f) honor of a demand for payment presented electronically even if such Letter
of Credit requires that demand be in the form of a draft;
(g) waiver by the Bank of any requirement that exists for the Bank's protection
and not the protection of the Applicant or any waiver by the Bank which
does not in fact materially prejudice the Applicant;
(h) any payment made by the Bank in respect of an Item presented after the date
specified as the expiration date of, or the date by which documents must be
received under, such Letter of Credit if payment after such date is
authorized by the ISP, the UCC or the UCP, as applicable; or
(i) any other circumstance or happening whatsoever, whether or not similar to
any of the foregoing;
provided that the Applicant shall not be obligated to reimburse the Bank for any
wrongful payment or disbursement made by the Bank under any Letter of Credit as
a result of any act or omission constituting gross negligence or willful
misconduct on the part of the Bank.
3.2 Discrepancies. (a) The Applicant agrees that it will promptly examine any
and all instruments and documents delivered to it from time to time in
connection with any Letter of Credit, and if the Applicant has any claim of
non-compliance with its instructions or of discrepancies or other irregularity,
the Applicant will immediately (and, in any event, within three Business Days)
notify the Bank thereof in writing, and the Applicant shall be deemed to have
waived any claim against the Bank unless such notice is given within such time
period. Without limiting the foregoing, if the Bank makes any payment or
disbursement under a Letter of Credit and the Applicant does not send a notice
to the Bank within three Business Days objecting to such payment or disbursement
and specifying in reasonable detail the discrepancy or irregularity which is the
basis for such objection, then the Applicant shall be precluded from making any
objection to the Bank's honor of the presentation with respect to which such
payment or disbursement was made (but shall not be precluded from asserting any
objection to any different presentation under the same or a different Letter of
Credit).
(a) The Applicant's acceptance or retention of any documents presented under
or in connection with a Letter of Credit (including originals or copies of
documents sent directly to the Applicant) or of any property for which
payment is supported by a Letter of Credit shall ratify the Bank's honor
of the documents and absolutely preclude the Applicant from raising a
defense or claim with respect to the Bank's honor of the relevant
presentation.
3.3 Documents. Unless specified to the contrary in the relevant Application, the
Applicant agrees that the Bank and its correspondents: (a) may accept as
complying with the applicable Letter of Credit any Item drawn, issued or
presented under such Letter of Credit which is issued or purportedly issued by
an agent, executor, trustee in bankruptcy, receiver or other representative of
the party identified in such Letter of Credit as the party permitted to draw,
issue or present such Item; and (b) may in its or their discretion, but shall
not be obligated to, accept or honor (i) any Item which substantially complies
with the terms of the applicable Letter of Credit; (ii) any Item which
substantially complies under the laws, rules, regulations and general banking or
trade customs and usages of the place of presentation, negotiation or payment;
(iii) drafts which fail to bear any or adequate reference to the applicable
Letter of Credit; (iv) any Item presented to the Bank after the stated
expiration date of a Letter of Credit but within any applicable time period
during which such Letter of Credit may be honored in accordance with the UCP,
the UCC and/or the ISP, as applicable (and, in any event, any Item presented to
the Bank on the Business Day immediately following the stated expiration date of
any Letter of Credit, if such stated expiration date falls on a day which is not
a Business Day); or (v) any Item which substantially complies with the
requirements of the UCP, the UCC and/or the ISP, as applicable. In determining
whether to pay under any Letter of Credit, the Bank shall have no obligation to
the Applicant or any other Person except to confirm that the Items required to
be delivered under such Letter of Credit appear to have been delivered and
appear on their face to substantially comply with the requirements of such
Letter of Credit. For purposes of the foregoing, an Item "substantially
complies" unless there are discrepancies in the presentation which appear to be
substantial and which reflect corresponding defects in the beneficiary's
performance in the underlying transaction. A discrepancy is not substantial if
it is unrelated or immaterial to the nature or amount of the Applicant's loss.
For example, documents honored by the Bank that do not comply with the timing
requirements of the Letter of Credit for presenting or dating any required
beneficiary statement nonetheless substantially comply if those timing
requirements are not material in determining whether the underlying agreement
has been substantially performed or violated.
3.4 Exculpation. In addition to the exculpatory provisions contained in the UCP,
the UCC and/or the ISP, as applicable, the Bank and its correspondents shall not
be responsible for, and the Applicant's obligation to reimburse the Bank shall
not be affected by, (a) compliance with any law, custom or regulation in effect
in the country of issuance, presentation, negotiation or payment of any Letter
of Credit, (b) any refusal by the Bank to honor any Item because of an
applicable law, regulation or ruling of any governmental agency, whether now or
hereafter in effect, (c) any action or inaction required or permitted under the
UCC, the UCP, the ISP or the United Nations Convention on Independent Guarantees
and Standby Letters of Credit, in each case as applicable, or (d) any act or the
failure to act of any agent or correspondent of the Bank, including, without
limitation, failure of any such agent or correspondent to pay any Item because
of any law, decree, regulation, ruling or interpretation of any governmental
agency.
3.5 Risks. The Applicant assumes all risks of the acts or omissions of any
beneficiary or transferee of any Letter of Credit (it being understood that such
assumption is not intended to, and shall not, preclude the Applicant from
pursuing any right or remedy it may have against any such beneficiary or
transferee). The Applicant further agrees that any action or omission by the
Bank under or in connection with any Letter of Credit or any related Item,
document or property shall, unless in breach of good faith, be binding on the
Applicant and shall not put the Bank under any resulting liability to the
Applicant. Without limiting the foregoing, the Applicant agrees that in no event
shall the Bank be liable for incidental, consequential, punitive, exemplary or
special damages.
3.6 Limitation on Bank's Obligations. Without limiting any other provision
herein, the Bank is expressly authorized and directed to honor any request for
payment which is made under and in compliance with the terms of any Letter of
Credit without regard to, and without any duty on the part of the Bank to
inquire into, the existence of any dispute or controversy between any of the
Applicant, the beneficiary of any Letter of Credit or any other Person, or the
respective rights, duties or liabilities of any of them, or whether any facts
represented in any Item presented under a Letter of Credit are true or correct.
Furthermore, the Applicant agrees that the Bank's obligation to the Applicant
shall be limited to honoring requests for payment made under and in compliance
with the terms of any Letter of Credit, and the Bank's obligation remains so
limited even if the Bank may have prepared or assisted in the preparation of the
wording of any Letter of Credit or any Item required to be presented thereunder
or the Bank may otherwise be aware of the underlying transaction giving rise to
any Letter of Credit.
3.7 Automatic Renewal of Letters of Credit. If any Letter of Credit contains any
provision for automatic renewal, the Applicant acknowledges and agrees that the
Bank is under no obligation to allow such renewal to occur and any such renewal
shall remain within the sole and absolute discretion of the Bank. The Applicant
irrevocably consents to the automatic renewal of each such Letter of Credit in
accordance with its terms if the Bank allows such renewal to occur; provided
that
2
the Applicant shall have the right to request the Bank to disallow any such
renewal on the condition that the Applicant shall give the Bank prior written
notice of such request not less than 30 days prior to the deadline imposed upon
the Bank for notification to the beneficiary of non-renewal of any such Letter
of Credit.
SECTION 4 REPRESENTATIONS AND WARRANTIES. The Applicant represents and warrants
to the Bank that:
(a) Organization. etc. The Applicant is duly organized or formed, validly
existing and (to the extent applicable under the laws of the relevant
jurisdiction) in good standing under the laws of the jurisdiction of its
organization or formation, and the Applicant is duly qualified and in good
standing as a foreign entity authorized to do business in each other
jurisdiction where, because of the nature of its activities or properties,
such qualification is required.
(b) Authorization: No Conflict. The execution and delivery by the Applicant of
this Agreement and each Application, the issuance of Letters of Credit for
the account of the Applicant hereunder and the performance by the
Applicant of its obligations under this Agreement and the Applications are
within the organizational powers of the Applicant, have been duly
authorized by all necessary organizational action, have received all
necessary governmental approval (if any shall be required), and do not and
will not contravene or conflict with, or result in or require the
imposition of any lien or security interest under, any provision of law or
of the charter or by-laws of the Applicant or of any indenture, loan
agreement or other contract, or any judgment, order or decree, which is
binding upon the Applicant.
(c) Validity and Binding Nature. This Agreement is, and upon delivery to the
Bank each Application will be, the legal, valid and binding obligation of
the Applicant, enforceable against the Applicant in accordance with its
terms, subject to bankruptcy, insolvency and similar laws of general
application affecting the rights of creditors and to general principles of
equity.
(d) Approvals. No authorization, approval or consent of, or notice to or
filing with, any governmental or regulatory authority is required to be
made in connection with the execution and delivery by the Applicant of
this Agreement or the issuance of any Letter of Credit for the account of
the Applicant pursuant hereto,
(e) Year 2000 Problem. The Applicant and its subsidiaries (i) have reviewed
the areas within their business and operations which could be adversely
affected by, and have developed or are developing a program to address on
a timely basis, the "Year 2000 Problem" (that is, the risk that computer
applications and embedded microchips in non-computing devises may be
unable to recognize and perform properly date-sensitive functions
involving certain dates prior to and any date after December 31, 1999) and
(ii) have made appropriate inquiries as to the effect the Year 2000
Problem will have on their material suppliers and customers. Based on such
review, program and inquiries, the Applicant reasonably believes that the
Year 2000 Problem will not have a material adverse effect on the business,
operations, condition (financial or otherwise), assets or prospects of the
Applicant and its subsidiaries taken as a whole.
SECTION 5 FEES. The Applicant agrees to pay the Bank all reasonable fees of the
Bank (at the rates specified by the Bank from time to time in schedules
delivered by the Bank to the Applicant) with respect to each Letter of Credit
(including, without limitation, all fees associated with any amendment to,
drawing under, banker's acceptance pursuant to, or transfer of a Letter of
Credit), such fees to be payable on demand by the Bank therefor.
SECTION 6 COMPUTATION OF INTEREST AND FEES. All interest and fees hereunder
shall be computed for the actual number of days elapsed on the basis of a year
of 360 days. The interest rate applicable to Letter of Credit reimbursement
obligations shall change simultaneously with each change in the Prime Rate.
SECTION 7 MAKING OF PAYMENTS. (a) All payments of principal of, or interest on,
letter of credit reimbursement obligations, all payments of fees and all other
payments hereunder shall be made by the Applicant in immediately available funds
to the Bank at its principal office in Chicago not later than 12:30 P.M.,
Chicago time, on the date due, and funds received after that time shall be
deemed to have been received by the Bank on the next Business Day. If any
payment of principal, interest or fees falls due on a Saturday, Sunday or other
day which is not a Business Day, then such due date shall be extended to the
next Business Day, and additional interest shall accrue and be payable for the
period of such extension.
(b) The Applicant irrevocably agrees that the Bank or any affiliate thereof
may (but neither the Bank nor any such affiliate shall be obligated to)
debit any deposit account of the Applicant in an amount sufficient to pay
any fee, reimbursement obligation or other amount that is due and payable
hereunder. The Bank or the applicable affiliate shall promptly notify the
Applicant of any such debit (but failure of the Bank or any such affiliate
to do so shall not impair the effectiveness thereof or impose any
liability on the Bank or such affiliate).
(c) The Applicant shall reimburse the Bank for each payment under a Letter of
Credit in the same currency in which such payment was made; provided that,
if the Bank so requests (in its discretion), the Applicant shall reimburse
the Bank in United States dollars for any payment under a Letter of Credit
made in a foreign currency at the rate at which the Bank could sell such
foreign currency in exchange for United States dollars for transfer to the
place of payment of such payment or, if there is no such rate, the United
States dollar equivalent of the Bank's actual cost of settlement. The
Applicant agrees to pay the Bank on demand in United States dollars such
amounts as the Bank may be required to expend to comply with any and all
governmental exchange regulations now or hereafter applicable to the
purchase of foreign currency.
(d) All payments by the Applicant hereunder shall be made free and clear of
and without deduction for any present or future income, excise or stamp
taxes and any other taxes, fees, duties, withholdings or other charges of
any nature whatsoever imposed by any taxing authority, but excluding
franchise taxes and taxes imposed on or measured by the Bank's net income
or receipts (such non-excluded items being called "Taxes"). If any
withholding or deduction from any payment to be made by the Bank hereunder
is required in respect of any Taxes pursuant to any applicable law, rule
or regulation, then the Applicant will
(i) pay directly to the relevant authority the full amount required to
be so withheld or deducted;
(ii) promptly forward to the Bank an official receipt or other
documentation satisfactory to the Bank evidencing such payment to
such authority; and
(iii) pay to the Bank such additional amount as is necessary to ensure
that the net amount actually received by the Bank will equal the
full amount the Bank would have received had no such withholding or
deduction been required.
Moreover, if any Taxes are directly asserted against the Bank or on any payment
received by the Bank hereunder, the Bank may pay such Taxes and the Applicant
will promptly pay such additional amount (including any penalty, interest or
expense) as is necessary in order that the net amount received by the Bank after
the payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount the Bank would have received had no such Taxes been asserted.
If the Applicant fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Bank the required receipts or other required
documentary evidence, the Applicant shall indemnify the Bank for any incremental
Tax, interest, penalty or expense that may become payable by the Bank as a
result of such failure.
3
SECTION 8 INCREASED COSTS. If, after the date hereof, the adoption of, or any
change in, any applicable law, rule or regulation, or any change in the
interpretation or administration of any applicable law, rule or regulation by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank with any
request, guideline or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency,
(a) affects or would affect the amount of capital required or expected to be
maintained by the Bank or any corporation controlling the Bank and (taking
into consideration the Bank's or such controlling corporation's policies
with respect to capital adequacy) the Bank determines that the amount of
such capital is increased as a consequence of this Agreement or the
Letters of Credit; or
(b) imposes, modifies or deems applicable any reserve (including, without
limitation, any reserve imposed by the Board of Governors of the Federal
Reserve System), special deposit or similar requirement against assets of,
deposits with or for the account of, or credit extended by the Bank with
respect to letters of credit, or imposes on the Bank any other condition
affecting this Agreement or the Letters of Credit, and the Bank determines
that the result of any of the foregoing is to increase the cost to, or to
impose a cost on, the Bank of issuing or maintaining any Letter of Credit
or of making any payment or disbursement under any Letter of Credit, or to
reduce the amount of any sum received or receivable by the Bank under this
Agreement;
then within five Business Days after demand by the Bank (which demand shall be
accompanied by a statement setting forth in reasonable detail the basis of such
demand and a calculation thereof in reasonable detail), the Applicant shall pay
directly to the Bank such additional amount as will compensate the Bank for such
increased capital requirement, such increased cost or such reduction, as the
case may be. Determinations and statements of the Bank pursuant to this Section
8 shall be conclusive absent manifest error, and the provisions of this Section
8 shall survive termination of this Agreement.
SECTION 9 EVENTS OF DEFAULT AND THEIR EFFECT.
9.1 Events of Default. Each of the following shall constitute an Event
of Default under this Agreement:
9.1.1 Non-Payment of Liabilities, etc. Default in the payment when due of
any principal of or interest on any Liabilities; or default, and
continuance thereof for five days after notice thereof from the
Bank, in the payment when due of any fees or other amounts payable
by the Applicant hereunder.
9.1.2 Bankruptcy. etc. The Applicant or any guarantor of the Liabilities
shall become insolvent or admit in writing its inability to pay
debts as they mature, or the Applicant or any such guarantor shall
apply for, consent to or acquiesce in the appointment of a trustee
or receiver, or in the absence of such application, consent or
acquiescence, a trustee or receiver is appointed for the Applicant
or any such guarantor, or any proceeding under any bankruptcy or
insolvency law or any dissolution or liquidation proceeding is
instituted by or against the Applicant or any such guarantor and, if
instituted against the Applicant or such guarantor, remains for 30
days undismissed, or any writ of attachment is issued against any
substantial portion of the Applicant's or any such guarantor's
property and is not released within 30 days of service, or the
Applicant or any such guarantor takes any action to authorize, or in
furtherance of, any of the foregoing.
9.1.3 Other Agreements with Bank. Any default shall occur (subject to any
applicable grace period) under any other agreement between the
Applicant and the Bank or any of its affiliates (including any
agreement under which the Applicant is a borrower and the Bank or
any such affiliate and one or more other financial institutions are
the lenders); or the Applicant shall fail to comply with or to
perform (subject to any applicable grace period) any covenant set
forth in any such other agreement as such covenant is in effect on
the date hereof or is amended from time to time with the consent of
the Bank (but without giving effect to the expiration or termination
of any such agreement unless such agreement is replaced by another
agreement to which the Bank is a party).
9.1.4 Representations and Warranties. Any representation or warranty made
by the Applicant herein or in any writing furnished in connection
with or pursuant to this Agreement shall be false or misleading in
any material respect on the date made.
9.2 Effect of Event of Default. If any Event of Default described in Section
9.1.2 shall occur, all Liabilities shall immediately become due and payable and
the Applicant shall immediately become obligated to deliver to the Bank cash
collateral in an amount equal to the face amount of all outstanding Letters of
Credit; and if any other Event of Default shall occur, the Bank may declare all
Liabilities to be due and payable and may demand that the Applicant immediately
deliver to the Bank cash collateral in an amount equal to the face amount of all
outstanding Letters of Credit, whereupon all Liabilities shall become
immediately due and payable and the Applicant shall immediately become obligated
to deliver to the Bank cash collateral in an amount equal to the face amount of
all outstanding Letters of Credit. The Bank shall promptly advise the Applicant
of any such declaration, but failure to do so shall not impair the effect of
such declaration. The Applicant hereby grants the Bank a security interest in
all cash collateral delivered hereunder. All cash collateral shall be held by
the Bank and applied to Liabilities arising in connection with any drawing under
a Letter of Credit. After all Letters of Credit have been fully drawn, expired
or been terminated, such cash collateral shall be applied by the Bank, first, to
any remaining Liabilities and, then, to any other liabilities of the Applicant
to the Bank, and any excess shall be delivered to the Applicant or as a court of
competent jurisdiction may direct.
SECTION 10 SECURITY.
10.1 Grant of Security Interest. As security for the prompt payment and
performance of all Liabilities, and in addition to any other security given to
the Bank by separate agreement, the Applicant hereby grants to the Bank a
continuing security interest in all of the following, whether now existing or
hereafter arising: (i) all property shipped, stored or dealt with in connection
with any Letter of Credit; and (ii) all drafts, documents, instruments,
contracts (including, without limitation, shipping documents, warehouse receipts
and policies or certificates of insurance), inventory, accounts, chattel paper
and general intangibles, and all proceeds of the foregoing, arising from or in
connection with any Letter of Credit, including, without limitation, any of the
foregoing which is in the Bank's actual or constructive possession or is in
transit to the Bank or any of its affiliates, agents or correspondents (and
regardless of whether such property has been released to the Applicant). The
Applicant further agrees that the Bank or any of its affiliates may set off and
apply to any of the Liabilities which are then due and payable (by acceleration
or otherwise) any deposit of the Applicant at any time held by the Bank or any
of its affiliates. The Applicant agrees that this Agreement (Or a carbon or
photographic copy hereof) may be filed as a financing statement to the extent
permitted by law. The Applicant agrees that, on request by the Bank, the
Applicant shall execute and deliver such financing statements and other
documents or instruments as may be required by the Bank to perfect or maintain
the security interest of the Bank hereunder.
10.2 Rights and Remedies. The Bank shall have all rights and remedies of a
secured party under the UCC. If prior notice to the Applicant is required for
any action, the Bank shall give the Applicant at least five days' notice in
writing of the time and place of the sale, disposition or other event giving
rise to such required notice, and the Applicant agrees that such notice will be
deemed commercially reasonable. Any property or document representing collateral
may be held by the Bank in its name or in the name of the Bank's nominee, all
without prior notice. Proceeds of any sale or other disposition of collateral
shall be applied, in order, to the expenses of retaking, holding and preparing
the collateral for sale (including reasonable attorneys' fees and legal
expenses), and then to the obligations of the Applicant hereunder until paid in
full. The Applicant shall be liable for any deficiency.
4
SECTION 11 GENERAL.
11.1 Waiver: Amendments. No delay on the part of the Bank in the exercise of any
tight, power or remedy shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or remedy preclude other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement shall be effective unless the same shall be in writing and
signed and delivered by the Bank, and then any such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.
11.2 Notices. (a) Except as otherwise expressly provided herein, all notices
hereunder shall be in writing (including facsimile and electronic transmission,
which shall be considered original writings). Notices given by mail shall be
deemed to have been given three Business Days after the date sent if sent by
registered or certified mail, postage prepaid, to the applicable party at its
address shown below its signature hereto or at such other address as such party
may, by written notice received by the other party to this Agreement, have
designated as its address for notices. Notices given by facsimile or electronic
transmission shall be deemed to have been given when sent. Notices sent by any
other means shall be deemed to have been given when received (or when delivery
is refused).
(b) The Bank may rely on any writing (including any facsimile, any electronic
transmission or any information on a computer disk or similar medium which
may be reduced to writing), or any telephonic or other oral message or
instruction (including, without limitation, any oral waiver of any
discrepancy with respect to any Item), that the Bank believes in good
faith to have been received from an authorized officer, employee or
representative of the Applicant, and the Bank shall not be liable for any
action taken in good faith with respect to any writing, message or
instruction from an unauthorized person. The Bank shall not be under any
duty to verify the identity of any person submitting any Application or
other writing or making any other communication hereunder. Notwithstanding
the foregoing, the Bank is not obligated to recognize the authenticity of
any request to issue, amend, honor or otherwise act on any Letter of
Credit that is not evidenced to the Bank's satisfaction by a writing
originally signed by a person the Applicant has certified is authorized to
act for the Applicant hereunder or by a message or instruction
authenticated to the Bank's satisfaction.
11.3 Costs, Expenses and Taxes: Indemnification. (a) The Applicant agrees to pay
on demand all reasonable out-of-pocket costs and expenses of the Bank (including
the reasonable fees and charges of counsel for the Bank) in connection with the
enforcement of this Agreement. In addition, the Applicant agrees to pay, and to
save the Bank harmless from all liability for, any stamp or other taxes which
may be payable in connection with the execution or delivery of this Agreement,
the issuance of Letters of Credit hereunder, or the issuance of any other
instrument or document provided for herein or delivered or to be delivered
hereunder or in connection herewith.
(b) The Applicant agrees to indemnify the Bank and each of its affiliates and
each of their respective officers, directors, employees and agents (each
an "Indemnified Party") against, and to hold each Indemnified Party
harmless from, any and all actions, causes of action, suits, losses,
costs, damages, expenses (including reasonable attorneys' fees and
charges, expert witness fees and other dispute resolution expenses) and
other liabilities (collectively the "Indemnified Liabilities") incurred by
any Indemnified Party as a result of, or arising out of, or relating to,
this Agreement or any Letter of Credit (and without regard to whether the
applicable Indemnified Party is a party to any proceeding out of which
such Indemnified Liabilities arise), except to the extent that a court of
competent jurisdiction determines in a final, non-appealable order that
any Indemnified Liability resulted directly from the gross negligence or
willful misconduct of such Indemnified Party. Without limiting the
generality of the foregoing sentence, the term "Indemnified Liabilities"
includes any claim or liability in which an advising, confirming or other
nominated bank, or a beneficiary requested to issue its own undertaking,
seeks to bc reimbursed, indemnified or compensated. If and to the extent
the foregoing undertaking may be unenforceable for any reason, the
Applicant agrees to make the maximum contribution to the payment of each
of the Indemnified Liabilities which is permitted under applicable law.
(c) Without limiting clause (b), the Applicant agrees to indemnify the Bank,
and to hold the Bank harmless from, any loss or expense incurred by the
Bank as a result of any judgment or order being given or made for the
payment of any amount due hereunder in a particular currency (the
"Currency of Account") and such judgment or order being expressed in a
currency (the "Judgment Currency") other than the Currency of Account and
as a result of any variation having occurred in the rate of exchange
between the date which such amount is converted into the Judgment Currency
and the date of actual payment pursuant thereto. The foregoing indemnity
shall constitute a separate and independent obligation of the Applicant.
(d) All obligations provided for in this Section 11.3 shall survive any
termination of this Agreement.
11.4 Captions. Section captions used in this Agreement are for convenience only
and shall not affect the construction of this Agreement.
11.5 Governing Law. This Agreement shall be a contract made under and governed
by the laws of the State of Illinois applicable to contracts made and to be
performed entirely within such State. Except to the extent inconsistent with
such state law or otherwise expressly stated in any Letter of Credit, each
Letter of Credit and this Agreement also are subject to the terms of (i) with
respect to matters relating to standby Letters of Credit and Applications
therefor, the ISP, and (ii) with respect to matters relating to commercial
Letters of Credit and Applications therefor, the UCP. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Applicant and rights of the Bank expressed
herein shall be in addition to and not in limitation of those provided by
applicable law.
11.6 Counterparts. This Agreement may be executed in any number of counterparts
and by the parties hereto on separate counterparts and each such counterpart
shall be deemed to be an original, but all such counterparts shall together
constitute but one and the same Agreement.
11.7 Successors and Assigns. This Agreement shall be binding upon the Applicant
and its successors and assigns, provided that the Applicant may not assign any
of its rights or obligations hereunder without the prior written consent of the
Bank.
11.8 Right of Bank to Act through Branches and Affiliates. The Bank may cause
any Letter of Credit requested by the Applicant to be issued by a branch or
affiliate of the Bank, and all references to the "Bank" herein or in any related
document shall include each applicable branch or affiliate.
11.9 Foreign Assets Control Regulations. The Applicant certifies that no
transaction in foreign commodities covered by any Application will be prohibited
under the foreign assets control regulations of the United States Treasury
Department and that any importation related to any Letter of Credit will conform
with all applicable laws, rules and regulations.
11.10 Mitigation: Limitation of Liability. The Applicant agrees to take action
to avoid or reduce the amount of and damages which may be claimed against the
Bank. For example, (a) in the case of wrongful honor, the Applicant agrees to
enforce its rights arising out of the underlying transaction (except to the
extent that enforcement is impractical due to the insolvency of the beneficiary
or other Person from whom the Applicant might otherwise recover), and (b) in the
case of wrongful dishonor, the Applicant agrees to specifically and timely
authorize the Bank to effect a cure and give written assurances to the
beneficiary that a cure is being arranged. The Applicant's aggregate remedies
against the Bank for honoring a presentation or retaining honored documents in
breach of the Bank's obligations to the Applicant (whether arising under this
Agreement, applicable letter of credit practice or law, or any other agreement
or law) are limited to the aggregate amount paid by the Applicant to the Bank
with respect to the honored presentation.
5
11.11 Subrogation. The Bank shall be subrogated (for purposes of defending
against the Applicant's claims and proceeding against others to the extent of
any liability of the Bank to the Applicant) to the Applicant's rights against
any Person who may be liable to the Applicant on any underlying transaction, to
the rights of any holder in due course or Person with similar status against the
Applicant and to the rights of the beneficiary of any Letter of Credit or its
assignee or any Person with similar status against the Applicant.
11.12 Co-Applicants. (a) If this Agreement is signed by two or more Persons
(each a "Co-Applicant"), then the term "Applicant" shall mean each such Person
and all such Persons shall be jointly and severally liable for all obligations
of the "Applicant" hereunder and in respect of the Letters of Credit issued
pursuant hereto. Any Co-Applicant shall have the right to issue all instructions
relating to Letters of Credit (including, without limitation, instructions as to
the disposition of documents and waiver of discrepancies) and to agree with the
Bank upon any amendment, extension, renewal or modification of, or change in the
amount of, any Letter of Credit, and such instructions and agreements shall be
binding upon all Co-Applicants. Each Co-Applicant shall be bound by (i) any
notice from the Bank to any other Co-Applicant, (ii) any other Co-Applicant's
settlement or release of any claim against the Bank arising under this Agreement
and (iii) any default under this Agreement attributable to any other
Co-Applicant.
(b) Each Co-Applicant agrees that if at any time all or any part of any
payment theretofore applied by the Bank to any of the Liabilities is or
must be rescinded or returned by the Bank for any reason whatsoever
(including the insolvency, bankruptcy or reorganization of any
Co-Applicant), such Liabilities shall, to the extent that such payment is
or must be rescinded or returned, be deemed to have continued in
existence, notwithstanding such application by the Bank, and the
obligations of such Co-Applicant with respect thereto shall continue to be
effective or be reinstated, as the case may be, as to such Liabilities,
all as though such application by the Bank had not been made.
(c) The Bank may, from time to time, in its sole discretion and without
affecting the obligation of any Co-Applicant, take any or all of the
following actions: (a) retain or obtain the primary or secondary
obligation of any other obligor, in addition to such Co-Applicant, with
respect to any of the Liabilities, and take any security for the
obligations of any such other obligor, (b) extend or renew any of the
Liabilities for one or more periods (whether or not longer than the
original period), alter or exchange any of the Liabilities, or release or
compromise any obligation of any other Co-Applicant or any obligation of
any nature of any other obligor with respect to any of the Liabilities,
(c) release its security interest in, or surrender, release or permit any
substitution or exchange for, all or any part of any property securing any
of the Liabilities, or extend or renew for one or more periods (whether or
not longer than the original period) or release, compromise, alter or
exchange any obligations of any nature of any obligor with respect to any
such property, and (d) resort to such Co-Applicant for payment of any of
the Liabilities when due, whether or not the Bank shall have resorted to
any property securing any of the Liabilities or shall have proceeded
against any other Co-Applicant or any other obligor primarily or
secondarily obligated with respect to any of the Liabilities.
11.13 Continuation of Liability. Regardless of the expiry date of any Letter of
Credit, the Applicant shall remain liable hereunder until the Bank is released
from liability by every Person that is entitled to draw or demand payment under
each Letter of Credit issued pursuant hereto.
11.14 Jurisdiction. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY APPLICATION, SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF XXXX COUNTY, ILLINOIS OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS PROVIDED THAT ANY
SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE BANK'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE APPLICANT HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF XXXX COUNTY, ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
FOR THE PURPOSE OF ANY SUCH LITIGATION. THE APPLICANT FURTHER IRREVOCABLY
CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, TO THE
ADDRESS SET FORTH BENEATH ITS SIGNATURE HERETO (OR SUCH OTHER ADDRESS AS IT
SHALL HAVE SPECIFIED IN WRITING TO THE BANK AS ITS ADDRESS FOR NOTICES
HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
APPLICANT EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
11.15 Waiver of Jury Trial. EACH OF THE APPLICANT AND, BY ISSUING ANY LETTER OF
CREDIT, THE BANK HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY
APPLICATION, INSTRUMENT, DOCUMENT. AMENDMENT OR AGREEMENT DELIVERED OR WHICH MAY
IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR ARISING FROM ANY BANKING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT, AND AGREES THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
Delivered at Chicago. Illinois, as of the day and year first above written.
6
[Applicant]
By
--------------------------------------------------------------
Title
--------------------------------------------------------------
By
--------------------------------------------------------------
Title
--------------------------------------------------------------
Address:
Attention:
------------------------------------------------------------
Facsimile:
------------------------------------------------------------
[Second Applicant, if applicable]
By
--------------------------------------------------------------
Title
--------------------------------------------------------------
By
--------------------------------------------------------------
Title
--------------------------------------------------------------
Address:
Attention:
------------------------------------------------------------
Facsimile:
------------------------------------------------------------
7
LASALLE BANK N.A.
--------------------------------------------------------------------------------------------------------------------------------
International Trade Services
LASALLE BANKS
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000 fax (000) 000-0000 L/C no.
-------------------------
(For Bank Use)
APPLICATION FOR IRREVOCABLE COMMERCIAL LETTER OF CREDIT
Subject to our Master Letter of Credit Agreement with yourselves, please issue an irrevocable Commercial Letter of Credit (L/C)
substantially as set forth below, and
o send the original L/C directly to the Beneficiary
o send the L/C to the Advising Bank indicated or your chosen correspondent, as applicable (for delivery to the Beneficiary)
by [ ] airmail. [ ] courier. [ ] cable (SWIFT/telex/cablegram). [ ] other:
--------------------------------------.
------------------------------------------------------------------- ----------------------------------------------------------------
Advising Bank (optional) Applicant (name & address)
------------------------------------------------------------------- ----------------------------------------------------------------
Beneficiary of L/C (name & address expected to appear on invoices) Amount (U.S. dollars unless otherwise indicated)
up to:
plus or minus ____%
----------------------------------------------------------------
Expiry Date of L/C (month in words, day, year)
in the country of the Beneficiary unless otherwise indicated
------------------------------------------------------------------- ----------------------------------------------------------------
Please make the L/C subject to the Uniform Customs and Practice for Documentary
Credits (UCP) currently in effect.
Documents must be presented within ________ days after shipment (21 days if not
otherwise specified) but, in any case, within the validity of the credit.
Draft(s) must be drawn at (specify "sight" or other tenor) ____________________
for _______% (100% unless otherwise specified) of Commercial Invoice value
drawn on you or (specify other drawee)_________________________________________
and accompanied by the following documents:
[_] Original and _____ copy(ies) of Commercial Invoice covering (describe goods
as in the Beneficiary's proforma invoice but only in generic terms, omitting
details as to grade, quality, etc.):____________________________________________
[_] EXW (Ex Works, Ex Factory At)____________________________________________
(place)
[_] FCA (Free Carrier At) ___________________________________________________
(place)
[_] CPT (Carriage Paid To) __________________________________________________
(place)
[_] CIP (Carriage & Insurance Paid To) ______________________________________
(place)
[_] FOB (Free On Board At) __________________________________________________
(port of loading) (for port-to-port ocean shipments only; otherwise use FCA)
[_] CFR (Cost & Freight Paid To) ____________________________________________
(port of discharge) (for port-to-port ocean shipments only; otherwise use
CPT)
[ ] CIF (Cost, Insurance & Freight Paid To)__________________________________
(port of discharge) (for port-to-port ocean shipments only; otherwise use
CIP)
[ ] Other terms______________________________________________________________
[ ]Marine Cargo Insurance Policy or Certificate (for CIP and CIF shipments) in
negotiable form for at least ________% (110% unless otherwise specified) of
Commercial Invoice value, endorsed in blank and covering the following risks:
[ ] All risks warehouse-to-warehouse
[ ] All risks warehouse-to-warehouse including war risks and strikes, riots
and civil commotions
[ ] Other (specify)__________________________________________________________
[ ] Copy of a cable or fax message addressed to the Applicant giving date and
means of shipment and description and value of the goods shipped, bearing
the Beneficiary's original signed certification that "This is a true and
accurate copy of a message sent as addressed within two days of shipment of
the described goods" (for insurance purposes on EXW, FCA, CPT, FOB, and CFR
shipments).
[ ] Full set of Multimodal Transport (Door-to-Door) Bills of Lading showing
place of receipt as _____________________________________________ and place
of delivery or final destination as _______________________________________
consigned to the order of the shipper, endorsed in blank.
[ ] Full set of Port-to-Port Bills of Lading showing port of loading
as__________________________________________________________________ and
port of discharge as ______________________________________________________,
consigned to order of shipper, endorsed in blank.
[ ] Transshipment prohibited (only applies to Port-to-Port Bills of Lading).
[ ] Original Shipper's Copy of Air Waybill, showing airport of departure as
__________________________________________________________ and airport of
destination as ________________________________________, consigned to
___________________________________________________________________.
[ ] Beneficiary's certificate that "one extra set of documents is accompanying
the air shipment" (not applicable to ocean shipments).
The above Bills of Lading, Air Waybill or other transport documents are to be
marked and evidence:
Freight: [ ] Collect [ ] Prepaid Notify
Party:______________________________________________________________________
Partial shipments: [ ] Allowed [ ] Not allowed
Shipment not later than: ________________________________
[ ] Forwarder's Cargo Receipt issued by
____________________________________________________________________________
showing merchandise received no later than
__________________________________________, consigned to or held at the
disposal of the Applicant.
[ ] Original and _____ copy(ies) of Packing List.
[ ] Original and _____ copy(ies) of Certificate of Origin.
[ ] Original and _____ copy(ies)
of_________________________________________________________________________.
SPECIAL CONDITIONS/INSTRUCTIONS
[ ]Please make the L/C transferable in full or in parts by any bank.
[ ]All bank charges other than those of the Issuing Bank are for the account of
the Beneficiary.
[ ] All bank charges are for the account of the Applicant.
[ ]Discount charges, if any (applicable only to drafts other than "sight"), are
for the account of the [ ] Beneficiary. [ ] Applicant.
[ ]All documents are to be sent to you in one lot by [ ] Courier. [ ] Airmail.
[ ]Other conditions/instructions:
------------------------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------------
Account Party name (if different from Applicant name above) Correspondent Bank Name (if applicable)
----------------------------------------------------------- --------------------------------------------------------------
Authorized signature date Authorized signature date
----------------------------------------------------------- --------------------------------------------------------------
phone number fax number phone number fax number
FORM NO:096-0300 MAY 99
LASALLE BANK N.A.
--------------------------------------------------------------------------------------------------------------------------------
International Trade Services LASALLE BANKS
000 X. Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000 fax (000) 000-0000
L/C no.
---------------------------
(For Bank Use)
APPLICATION FOR STANDBY LETTER OF CREDIT
Subject to our Master Letter of Credit Agreement with yourselves,
o please issue an irrevocable Standby Letter of Credit (L/C) substantially as
set forth below, and
o return the original L/C to ourselves (for delivery to the Beneficiary)
o send the original L/C directly to the Beneficiary
o send the L/C to the Advising Bank indicated (for delivery to the
Beneficiary)
by
o airmail.
o courier.
o cable (SWIFT/telex/cablegram).
o messenger.
o other: _______________________________________________________________.
or
o [Local Guarantee] please issue an irrevocable Standby Letter of Credit in
favor of your affiliated office or correspondent (or the indicated Foreign
Bank) and request that they issue a Local Guarantee substantially as set
forth below and in the attached specimen. (Attach specimen language for the
Local Guarantee. All blanks must be completed on the specimen you provide.
If the Local Guarantee is to be subject to the ISP or other international
rules, indicate so on the specimen.)
Please make the L/C subject to
o the Uniform Customs and Practice for Documentary Credits (UCP)
or
o the International Standby Practices (ISP)
currently in effect.
------------------------------------------------------------------- ----------------------------------------------------------------
Advising Bank/Foreign Bank (optional) Applicant (name & address)
------------------------------------------------------------------
------------------------------------------------------------------- ----------------------------------------------------------------
Beneficiary of L/C or Local Guarantee, as applicable (name & Amount (U.S. dollars unless otherwise indicated)
address)
----------------------------------------------------------------
Expiry Date of L/C
----------------------------------------------------------------
Expiry Date of Local Guarantee (if applicable--must be before
Expiry Date of L/C)
------------------------------------------------------------------- ----------------------------------------------------------------
Available at sight against presentation of the following document(s) at your
office on or before the Expiry Date unless otherwise indicated below.
o Beneficiary's signed statement reading exactly as follows:
Other documents (if any):
-----------------------------------------------------
Other instructions (if any, including any special instructions for the Advising
Bank/Foreign Bank to follow when delivering the L/C
or Local Guarantee):
-----------------------------------------------------
o [Evergreen L/C] Please include language in the L/C which causes the Expiry
Date to be automatically extended for additional periods of one year at a
time unless you notify the Beneficiary at least _____ days in advance of
the then-current Expiry Date of your election not to allow any further
automatic extensions. Please include a "final expiry date" of
____________________ (optional).
o Partial drawings are prohibited (permitted if not marked).
o Multiple drawings are prohibited (permitted if not marked).
o Please refer to attachments. (NOTE: If this application is submitted by
mail or fax, all attachments must also be signed.)
In the event we request that the L/C be made subject to local law, we indemnify
you from any liabilities or obligations imposed by such local law, including any
obligation to make payment after the stated Expiry Date of the L/C and/or the
Local Guarantee. In the event we request that the L/C, or any part thereof, be
issued in a foreign language, we indemnify you from any errors in translation of
either the L/C or any documents presented.
--------------------------------------------------------------------------------
Account Party name (if different from Applicant name above)
---------------------------------------------------------- ------------------------ ---------------------------
Authorized signature date phone number fax number
--------------------------------------- ------------------------------------------------------- -----------------
Correspondent Bank Name (if applicable) Correspondent Bank Authorized Signature (if applicable) Phone
FORM NO: 096-0369 MAY 99
EXHIBIT 12
DISCLOSURE SCHEDULE OF BORROWER
(See attached Disclosure Schedules)
Attachment 1 to Disclosure Schedule
Intellectual Property to be Assigned for Loan Obligations
Borrower's Intellectual Property includes the following, which will be
assigned to Administrative Agent for the benefit of Lenders to secure payment of
the Loan Obligations:
EXHIBIT 14.14
FORM OF COMPLIANCE CERTIFICATE
TO: LaSalle Bank National Association, as Administrative Agent
This Compliance Certificate is furnished pursuant to that certain Loan Agreement
effective _____________ (as it may be amended, modified, restated or replaced
from time to time, the Loan Agreement), among TALX Corporation (referred to
herein both collectively and individually as Borrower), LaSalle Bank National
Association, as Administrative Agent (Administrative Agent) and the Lenders as
defined in the Loan Agreement (Lenders). Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings defined
in the Loan Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the Chief Financial Officer of Borrower.
2. I have reviewed the terms of the Loan Agreement and the Loan
Documents and I have made, or have caused to be made under my
supervision, a review of the transactions and conditions of
Borrower and each other Covered Person during the accounting
period covered by the attached Financial Statements.
3. The examinations described in paragraph 2 did not disclose,
and I have no knowledge of, the existence of any condition or
event which constitutes an Default or Event of Default as of
the date of this Compliance Certificate; and to my knowledge
all of the Representations and Warranties (including those of
each Guarantor in its Guaranty) are true in all material
respects.
4.
5. Borrower and every other Covered Person is in compliance with
all of the covenants in the Loan Agreement, including the
financial covenants in Section 16, and Schedule II attached
hereto contains calculations based on Borrower's financial
statements and other financial records that show Borrower's
compliance with such financial covenants. The calculations and
the data upon which they are based are believed by me to be
complete and correct.
This Compliance Certificate, together with the Schedules hereto, is executed and
delivered this day of _____________________.
By:
-----------------------------------------------
Print Name:
---------------------------------------
Title:
--------------------------------------------
ii
SCHEDULE I TO COMPLIANCE CERTIFICATE
See current Financial Statements.
SCHEDULE II TO COMPLIANCE CERTIFICATE
All calculations done in accordance with GAAP on a
consolidated basis, in accordance with the provisions of the Loan Agreement and
based on the period ended __________________. Any inconsistencies between the
descriptions of the items set forth in this Schedule II and the terms of any of
Sections 6.3.3.2 and 16.1 through 16.6 shall be resolved in favor of the terms
set forth in Sections 6.3.3.2 and 16.1 through 16.6. Reference should be made to
Sections 6.3.3.2 and 16.1 through 16.6 of the Loan Agreement for more specific
instructions regarding the calculation periods and how the components of the
financial covenants should be calculated.
1
I. EBITDA (for preceding four fiscal quarters) (Section 16.1):
(i) Net Income $_________
(ii) Federal, State and Local Income
Tax expense accrued for as a liability $_________
(iii) Interest Expense $_________
(iv) Amortization of good will and
other intangible assets and depreciation
expense taken or accrued for in such period,
without duplication $_________
(v) Extraordinary losses in such period incurred
or accrued for in such period, without
duplication $_________
(vi) Sum of Items (i), (ii), (iii), (iv) and (v) $_________
(vii) Extraordinary income/gain in such period
incurred or accrued for in such period,
without duplication $________
(viii) Item (vi) minus Item(vii) -- EBITDA $________
2
II. EXCESS CASH FLOW (SECTION 6.3.3.2)
A. Total Indebtedness $_______
B. EBITDA for preceding four fiscal quarters per Item I $_______
C. Ratio of Item A to Item B _______:1.0
D. Ratio of Total Indebtedness to EBITDA required
by Section 6.3.3.2 to avoid Excess Cash Flow Payment Less than 1.25:1.0
3
III. CAPITAL EXPENDITURE (SECTION 16.2)
A. Capital Expenditures in period $_________
B. Capital Expenditures permitted in such period
by Section 16.2 $13,000,000.00
IV. MINIMUM FIXED CHARGES COVERAGE (SECTION 16.3)
A. EBITDA (for preceding _____ fiscal quarter(s)) $_________
B. Fixed Charges(for preceding _____ fiscal quarter(s) (Section 16.1):
1. Interest Expense $_________
2. Sum of all scheduled principal payments on
long term Indebtedness of Borrower
(including the Term Loan) $_________
3. Federal, State and Local Income
Taxes expense paid $_________
4. Capital Expenditures (excluding permitted
expenditures for Permitted Acquisitions
and excluding Capital Expenditures financed
by Indebtedness on which interest is owed) $_________
5. Distributions paid or accrued for,
without duplication $_________
6. FIXED CHARGES (Sum of items 1
through 5) $_________
C. Ratio of Item A to Item B.6. ___:1.0
D. Minimum Ratio required by Section 16.3 for such period 1.10:1.0
4
V. EBITDA (for preceding four fiscal quarters) (Section 16.4 and 16.6):
A. EBITDA (for preceding four fiscal quarters) per Item I $_______
B. Additional stipulated amount for fiscal quarters ending
6/30/02, 9/30/02 and 12/31/02 (Sections 16.4 and 16.6) $_______
C. Sections 16.4 and 16.6 EBITDA (Sum of Items A and B) $_______
VI. TOTAL INDEBTEDNESS TO EBITDA (SECTION 16.4)
A. Total Indebtedness $_______
B. EBITDA for preceding four fiscal quarters per Item V.C. $_______
C. Ratio of Item A to Item B ___:1.0
D. Maximum Ratio of Total Indebtedness to
EBITDA permitted by Section 16.4 2.0:1.0
5
VII. MINIMUM NET WORTH (SECTION 16.5)
A. Actual Net Worth $_______
B. Minimum Net Worth Required by Section 16.5:
$110,000,000 plus an aggregate amount equal
----
to 50% of quarterly Net Income (but only if a
positive number, and with no reduction for losses),
plus 100% of net cash proceeds from the issuance
of equity securities after the Effective Date for each
completed fiscal quarter of Borrower beginning with
the fiscal quarter ended __________ $_______
VIII. MINIMUM EBITDA (SECTION 16.6)
A. EBITDA (for preceding four fiscal quarters) per Item V.C. $_______
B. Minimum EBITDA required by Section 16.6 $_______
6
EXHIBIT 20.4.1
FORM
ASSIGNMENT AND ACCEPTANCE
DATED: ___________, ______
Loan Agreement effective ___________ (as it may be amended, modified,
restated or replaced from time to time, the Loan Agreement) among TALX
Corporation (referred to herein both collectively and individually as Borrower),
LaSalle Bank National Association, as Administrative Agent (Administrative
Agent) and the Lenders as defined in the Loan Agreement (Lenders). Terms defined
in the Loan Agreement are used herein with the same meaning.
The Assignor and the Assignee referred to on Schedule 1 agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth
herein, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations
under the Loan Agreement and the other Loan Documents as of the date
hereof equal to the percentage interest specified on Schedule 1 of all
outstanding rights and obligations under the Loan Agreement and the
other Loan Documents. After giving effect to such sale and assignment,
the Assignee's Commitment and the amount of the Loans owing to the
Assignee will be as set forth on Schedule 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes
no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any other instrument or document furnished pursuant
thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Covered
Person or the performance or observance by any Covered Person of any of
its obligations under the Loan Documents or any other instrument or
document furnished pursuant thereto; and (iv) attaches the Note [s]
held by the Assignor and requests that Administrative Agent exchange
such Note [s] for new Note [s] payable to the order of the Assignee in
an amount equal to the Commitment assumed by the Assignee pursuant
hereto and to the Assignor in an amount equal to the Commitment
retained by the Assignor, if any, as specified on Schedule 1.
3. The Assignee (i) confirms that it has received a copy of the Loan
Agreement, together with copies of the financial statements referred to
in Section thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (ii) agrees that it will,
independently and without reliance upon Administrative Agent, the
Assignor 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 the
1
Loan Agreement; (iii) confirms that it is an Eligible Assignee; (iv)
appoints and authorizes Administrative Agent to take such action as
agent on its behalf and to exercise such powers and discretion under
the Loan Agreement as are delegated to Administrative Agent by the
terms thereof, together with such powers and discretion as are
reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations that by the terms of
the Loan Agreement are required to be performed by it as a Lender; and
(vi) attaches any U.S. Internal Revenue Service or other forms required
under Section
4. Following the execution of this Assignment and Acceptance, it will be
delivered to Administrative Agent for acceptance and recording by
Administrative Agent. The effective date for this Assignment and
Acceptance (the Effective Date) shall be the date of acceptance hereof
by Administrative Agent, unless otherwise specified on Schedule 1.
5. Upon such acceptance and recording by Administrative Agent, as of the
Effective Date, (i) the Assignee shall be a party to the Loan Agreement
and, to the extent provided in this Assignment and Acceptance, have the
rights and obligations of a Lender thereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the
Loan Agreement.
6. Upon such acceptance and recording by Administrative Agent, from and
after the Effective Date, Administrative Agent shall make all payments
under the Loan Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the
Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Loan Agreement and the Notes for
periods prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Illinois.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of Schedule 1 to this
Assignment and Acceptance by telecopier shall be effective as delivery
of a manually executed counterpart of this Assignment and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused Schedule
1 to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
2
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Percentage interest assigned: _____________%
Assignee's Commitment: $___________
Aggregate outstanding principal amount of Loans assigned: $_________
Principal amount of Note payable to Assignee: $________
Principal amount of Note payable to Assignor: $________
Effective Date (if other than date of
acceptance by Administrative Agent): * __________ , _______
[NAME OF ASSIGNOR], as Assignor
By:
---------------------------------
Title:
------------------------------
Dated:,
-------------------------,---
[NAME OF ASSIGNEE], as Assignee
By:
---------------------------------
Title:
------------------------------
Applicable Lending Office:
*This date should be no earlier than five Business Days after the delivery of
this Assignment and Acceptance to Administrative Agent.
Accepted [and Approved]
This ___ day of , _____
LaSalle Bank National Association, as Administrative Agent
By:
-----------------------------------
Title:
-----------------------------------
Accepted [and Approved]**
This ___ day of , _____
TALX Corporation,
By:
-----------------------------------
Title:
-----------------------------------
**Approval of Borrower required only if there is no Existing Default.
ii
